(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
March 31, 2023
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
|
| |||
|
|
| ||
(Addresses of registrant’s principal executive offices)
| Netherlands | 98-0646235 | ||||||||||||||||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||||||||||||||
| 1221 McKinney St., | 4th Floor, One Vine Street | ||||||||||||||||||||||||||||||||||
| Suite 300 | London | Delftseplein 27E | |||||||||||||||||||||||||||||||||
| Houston, | Texas | W1J0AH | 3013AA | Rotterdam | |||||||||||||||||||||||||||||||
| USA | 77010 | United Kingdom | Netherlands | ||||||||||||||||||||||||||||||||
| (713) | 309-7200 | +44 (0) | 207 | 220 2600 | +31 (0) | 10 | 2755 500 | ||||||||||||||||||||||||||||||||||||||||||||||
| Title of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||||||||||||
| Ordinary Shares, €0.04 Par Value | LYB | New York Stock Exchange | ||||||||||||
| Large accelerated filer | x | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ | |||||||||||||
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐
| Page | ||||||||
Millions of dollars, except earnings per share Sales and other operating revenues: Trade Related parties Operating costs and expenses: Cost of sales Selling, general and administrative expenses Research and development expenses Operating income Interest expense Interest income Other income, net Income from continuing operations before equity investments and income taxes Income from equity investments Income from continuing operations before income taxes Provision for income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income Net (income) loss attributable to non-controlling interests Net income attributable to the Company shareholders Earnings per share: Net income (loss) attributable to the Company shareholders — Basic: Continuing operations Discontinued operations Diluted: Continuing operations Discontinued operations Millions of dollars Net income Other comprehensive income (loss), net of tax – Financial derivatives: Loss on cash flow hedges arising during the period Reclassification adjustment included in net income Income tax benefit Financial derivatives, net of tax Unrealized gains (losses) on available-for-sale securities: Unrealized holding gains (losses) arising during the period Income tax benefit Unrealized gains (losses) on available-for-sale securities, net of tax Unrealized gains on available-for-sale securities held by equity investees: Unrealized holding gains arising during the period Income tax expense (benefit) Unrealized gains on available-for-sale securities held by equity investees, net of tax Defined pension and other postretirement benefit plans: Reclassification adjustment for amortization of prior service cost included in net income Reclassification adjustment for net actuarial loss included in net income Income tax expense Defined pension and other postretirement benefit plans, net of tax Foreign currency translation adjustments: Unrealized gains arising during the period Reclassification adjustment included in net income Income tax benefit Foreign currency translation adjustments, net of tax Total other comprehensive income (loss) Comprehensive income Comprehensive (income) loss attributable to non-controlling interests Comprehensive income attributable to the Company shareholders Millions of dollars ASSETS Current assets: Cash and cash equivalents Restricted cash Short-term investments Accounts receivable: Trade, net Related parties Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment at cost Less: Accumulated depreciation Property, plant and equipment, net Investments and long-term receivables: Investment in PO joint ventures Equity investments Other investments and long-term receivables Goodwill Intangible assets, net Other assets Total assets Millions of dollars, except shares and par value data LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt Short-term debt Accounts payable: Trade Related parties Accrued liabilities Total current liabilities Long-term debt Other liabilities Deferred income taxes Commitments and contingencies Stockholders’ equity: Ordinary shares, €0.04 par value, 1,275 million shares authorized, 394,458,141 and 404,046,331 shares outstanding, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 183,982,022 and 174,389,139 ordinary shares, respectively Total Company share of stockholders’ equity Non-controlling interests Total equity Total liabilities and equity Millions of dollars Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Amortization of debt-related costs Charges related to repayment of debt Equity investments – Equity income Distributions of earnings, net of tax Deferred income taxes Gain on sales of business and equity method investments Gain on sale of assets Changes in assets and liabilities that provided (used) cash: Accounts receivable Inventories Accounts payable Other, net Net cash provided by operating activities Cash flows from investing activities: Expenditures for property, plant and equipment Proceeds from disposal of assets Payments for repurchase agreements Proceeds from repurchase agreements Purchases of available-for-sale securities Proceeds from maturities of available-for-sale securities Purchases of held-to-maturity securities Proceeds from maturities of held-to-maturity securities Purchases of business, equity method investment and non-controlling interest Net proceeds from sale of business and equity method investments Proceeds from settlement of net investment hedges Payments for settlement of net investment hedges Other, net Net cash used in investing activities Millions of dollars Cash flows from financing activities: Repurchases of Company ordinary shares Dividends paid Issuance of long-term debt Repayment of long-term debt Debt extinguishment costs Net proceeds from (repayments of) commercial paper Payments of debt issuance costs Other, net Net cash used in financing activities Effect of exchange rate changes on cash Increase (decrease) in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents and restricted cash at end of period SHAREHOLDERS’ EQUITY Ordinary Shares Millions of dollars Balance, December 31, 2016 Net income (loss) Other comprehensive income Share-based compensation Dividends ($2.65 per share) Repurchases of Company ordinary shares Purchase of non-controlling interest Balance, September 30, 2017 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. together with its consolidated subsidiaries (“LyondellBasell N.V.”). LyondellBasell N.V. is a worldwide manufacturer of chemicals and polymers, a refiner of crude oil, a producer of gasoline blending components and a developer and licensor of technologies for the production of polymers. 2022. 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. 2022. Millions of dollars Finished goods Work-in-process Raw materials and supplies Total inventories Millions of dollars Senior Notes due 2019, $2,000 million, 5.0% ($3 million of debt issuance cost) Senior Notes due 2021, $1,000 million, 6.0% ($8 million of debt issuance cost) Senior Notes due 2024, $1,000 million, 5.75% ($8 million of debt issuance cost) Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost) Guaranteed Notes due 2044, $1,000 million, 4.875% ($11 million of discount; $10 million of debt issuance cost) Guaranteed Notes due 2043, $750 million, 5.25% ($21 million of discount; $7 million of debt issuance cost) Guaranteed Notes due 2023, $750 million, 4.0% ($6 million of discount; $4 million of debt issuance cost) Guaranteed Notes due 2027, $300 million, 8.1% Guaranteed Notes due 2022, €750 million, 1.875% ($3 million of discount; $3 million of debt issuance cost) Guaranteed Notes due 2027, $1,000 million, 3.5% ($10 million of discount; $8 million of debt issuance cost) Other Total Less current maturities Long-term debt Millions of dollars Senior Notes due 2019, 5.0% Senior Notes due 2021, 6.0% Guaranteed Notes due 2027, 3.5% Millions of dollars $2,500 million Senior Revolving Credit Facility $900 million U.S. Receivables Securitization Facility Commercial paper Precious metal financings Other Total short-term debt At March 31, 2023, we had no borrowings or letters of credit outstanding and $3,050 million of unused availability under this facility. At supply chain financing will have a significant impact on our liquidity. Millions of dollars Assets– Derivatives designated as hedges: Commodities Commodities Foreign currency Foreign currency Interest rates Interest rates Derivatives not designated as hedges: Commodities Foreign currency Non-derivatives: Available-for-sale securities Total Millions of dollars Liabilities– Derivatives designated as hedges: Commodities Commodities Foreign currency Foreign currency Interest rates Derivatives not designated as hedges: Commodities Foreign currency Non-derivatives: Performance share awards Performance share awards Total Millions of dollars Non-derivatives: Assets: Short-term loans receivable Liabilities: Short-term debt Long-term debt Total Millions of dollars Foreign currency Interest rates Commodities Millions of dollars Derivatives designated as hedges: Commodities Foreign currency Interest rates Derivatives not designated as hedges: Commodities Commodities Foreign currency Non-derivatives designated as hedges: Long-term debt Total Millions of dollars Derivatives designated as hedges: Commodities Foreign currency Interest rates Derivatives not designated as hedges: Commodities Commodities Foreign currency Non-derivatives designated as hedges: Long-term debt Total Millions of dollars Available-for-sale securities: Commercial paper Bonds Certificates of deposit Time deposits Limited partnership investments Total available-for-sale securities Millions of dollars Available-for-sale securities: Commercial paper Bonds Certificates of deposit Limited partnership investments Total available-for-sale securities Held-to-maturity securities: Time deposits Millions of dollars Proceeds from maturities of securities Proceeds from sales of securities Millions of dollars Available-for-sale securities: Limited partnership investments Millions of dollars Available-for-sale securities: Limited partnership investments Millions of dollars Service cost Interest cost Expected return on plan assets Actuarial and investment loss amortization Net periodic benefit costs Millions of dollars Service cost Interest cost Expected return on plan assets Actuarial and investment loss amortization Net periodic benefit costs Millions of dollars Service cost Interest cost Net periodic benefit costs Millions of dollars Service cost Interest cost Actuarial loss amortization Net periodic benefit costs in excess of normal requirements. Additionally, we have capital expenditure commitments, which we incur in our normal course of business. Millions of dollars Beginning balance Additional provision Changes in estimates Amounts paid Foreign exchange effects Ending balance Millions of dollars, except per share amounts March June September Millions of dollars, except shares and per share amounts May 2016 Share Repurchase Program May 2017 Share Repurchase Program Millions of dollars, except shares and per share amounts May 2015 Share Repurchase Program May 2016 Share Repurchase Program Cash payments made during the reporting period may differ from the total purchase price, including commissions and fees, due to the timing of payments. Ordinary shares outstanding: Beginning balance Share-based compensation Warrants expired or exercised Employee stock purchase plan Repurchase of ordinary shares Ending balance Ordinary shares held as treasury shares: Beginning balance Share-based compensation Warrants exercised Employee stock purchase plan Repurchase of ordinary shares Ending balance Millions of dollars Balance – January 1, 2017 Other comprehensive income (loss) before reclassifications Amounts reclassified from Accumulated other comprehensive loss Net other comprehensive income (loss) Balance – September 30, 2017 Balance – January 1, 2016 Other comprehensive income (loss) before reclassifications Amounts reclassified from Accumulated other comprehensive loss Net other comprehensive income (loss) Balance – September 30, 2016 tables: Millions of dollars Reclassification adjustments for: Financial derivatives Defined pension and other postretirement benefit plan items: Amortization of: Prior service cost Actuarial loss Foreign currency translation adjustments Reclassifications, before tax Income tax expense Amounts reclassified out of Accumulated other comprehensive loss the holders. share under the two-class method. Millions of dollars Net income (loss) Less: net (income) loss attributable to non-controlling interests Net income (loss) attributable to the Company shareholders Net income attributable to participating securities Net income (loss) attributable to ordinary shareholders – basic and diluted Millions of shares, except per share amounts Basic weighted average common stock outstanding Effect of dilutive securities: PSU awards Potential dilutive shares Earnings (loss) per share: Basic Diluted Millions of shares Participating securities Dividends declared per share of common stock Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA the refinery business to be made in 2023. Millions of dollars EBITDA: Total segment EBITDA Other EBITDA Less: Depreciation and amortization expense Interest expense Add: Interest income Income from continuing operations before income taxes Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 8,312 $ 7,191 $ 24,775 $ 20,879 204 174 574 557 8,516 7,365 25,349 21,436 6,939 5,903 20,531 16,771 218 188 622 580 27 25 77 73 7,184 6,116 21,230 17,424 1,332 1,249 4,119 4,012 (94 ) (72 ) (396 ) (237 ) 5 4 15 13 114 19 173 104 1,357 1,200 3,911 3,892 81 81 240 289 1,438 1,281 4,151 4,181 380 326 1,154 1,104 1,058 955 2,997 3,077 (2 ) (2 ) (14 ) (3 ) 1,056 953 2,983 3,074 1 (1 ) 2 (1 ) $ 1,057 $ 952 $ 2,985 $ 3,073 $ 2.67 $ 2.31 $ 7.49 $ 7.26 — (0.01 ) (0.03 ) (0.01 ) $ 2.67 $ 2.30 $ 7.46 $ 7.25 $ 2.67 $ 2.31 $ 7.49 $ 7.24 — (0.01 ) (0.03 ) (0.01 ) $ 2.67 $ 2.30 $ 7.46 $ 7.23 Three Months Ended
March 31,Millions of dollars, except earnings per share 2023 2022 Sales and other operating revenues: Trade $ 10,076 $ 12,840 Related parties 171 317 10,247 13,157 Operating costs and expenses: Cost of sales 8,864 11,136 Impairment 252 — Selling, general and administrative expenses 385 328 Research and development expenses 33 32 9,534 11,496 Operating income 713 1,661 Interest expense (116) (74) Interest income 23 2 Other income, net 5 19 Income from continuing operations before equity investments and income taxes 625 1,608 Income from equity investments 17 29 Income from continuing operations before income taxes 642 1,637 Provision for income taxes 167 316 Income from continuing operations 475 1,321 Loss from discontinued operations, net of tax (1) (1) Net income 474 1,320 Dividends on redeemable non-controlling interests (2) (2) Net income attributable to the Company shareholders $ 472 $ 1,318 Earnings per share: Net income attributable to the Company shareholders — Basic Continuing operations $ 1.45 $ 4.01 Discontinued operations — — $ 1.45 $ 4.01 Diluted Continuing operations $ 1.44 $ 4.00 Discontinued operations — — $ 1.44 $ 4.00 Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 1,056 $ 953 $ 2,983 $ 3,074 (100 ) (69 ) (260 ) (258 ) 74 5 232 52 (5 ) (16 ) (8 ) (57 ) (21 ) (48 ) (20 ) (149 ) 2 (3 ) (7 ) (9 ) — (2 ) (2 ) (2 ) 2 (1 ) (5 ) (7 ) 5 — 14 — — — — — 5 — 14 — — 1 — 1 10 8 29 23 3 4 9 9 7 5 20 15 11 17 112 73 — 7 — 7 (12 ) — (31 ) (7 ) 23 24 143 87 16 (20 ) 152 (54 ) 1,072 933 3,135 3,020 1 (1 ) 2 (1 ) $ 1,073 $ 932 $ 3,137 $ 3,019 Three Months Ended
March 31,Millions of dollars 2023 2022 Net income $ 474 $ 1,320 Other comprehensive income (loss), net of tax – Financial derivatives 4 88 Defined benefit pension and other postretirement benefit plans 2 5 Foreign currency translations 59 (25) Total other comprehensive income, net of tax 65 68 Comprehensive income 539 1,388 Dividends on redeemable non-controlling interests (2) (2) Comprehensive income attributable to the Company shareholders $ 537 $ 1,386 September 30,
2017 December 31,
2016 $ 1,204 $ 875 7 3 1,295 1,147 3,097 2,716 178 126 4,177 3,809 1,104 923 11,062 9,599 16,039 14,635 (5,302 ) (4,498 ) 10,737 10,137 428 415 1,644 1,575 19 20 570 528 480 550 303 618 $ 25,243 $ 23,442 Millions of dollars March 31,
2023December 31,
2022ASSETS Current assets: Cash and cash equivalents $ 1,790 $ 2,151 Restricted cash 14 5 Accounts receivable: Trade, net 3,715 3,392 Related parties 186 201 Inventories 5,158 4,804 Prepaid expenses and other current assets 1,161 1,292 Total current assets 12,024 11,845 Operating lease assets 1,677 1,725 Property, plant and equipment 24,130 23,724 Less: Accumulated depreciation (8,729) (8,337) Property, plant and equipment, net 15,401 15,387 Equity investments 4,266 4,295 Goodwill 1,605 1,827 Intangible assets, net 651 662 Other assets 631 624 Total assets $ 36,255 $ 36,365 September 30,
2017 December 31,
2016 $ 3 $ 2 381 594 2,138 2,028 597 501 1,493 1,415 4,612 4,540 8,531 8,385 2,326 2,113 2,447 2,331 31 31 10,201 10,191 14,207 12,282 (1,359 ) (1,511 ) (15,754 ) (14,945 ) 7,326 6,048 1 25 7,327 6,073 $ 25,243 $ 23,442 Millions of dollars, except shares and par value data March 31,
2023December 31,
2022LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY Current liabilities: Current maturities of long-term debt $ 432 $ 432 Short-term debt 343 349 Accounts payable: Trade 3,029 3,106 Related parties 543 477 Accrued liabilities 2,166 2,396 Total current liabilities 6,513 6,760 Long-term debt 10,601 10,540 Operating lease liabilities 1,507 1,510 Other liabilities 1,899 1,954 Deferred income taxes 2,886 2,858 Commitments and contingencies Redeemable non-controlling interests 114 114 Shareholders’ equity: Ordinary shares, €0.04 par value, 1,275 million shares authorized, 325,468,601 and 325,723,567 shares outstanding, respectively 19 19 Additional paid-in capital 6,092 6,119 Retained earnings 9,277 9,195 Accumulated other comprehensive loss (1,307) (1,372) Treasury stock, at cost, 14,953,897 and 14,698,931 ordinary shares, respectively (1,360) (1,346) Total Company share of shareholders’ equity 12,721 12,615 Non-controlling interests 14 14 Total equity 12,735 12,629 Total liabilities, redeemable non-controlling interests and equity $ 36,255 $ 36,365 Nine Months Ended
September 30, 2017 2016 $ 2,983 $ 3,074 876 791 12 12 49 — (240 ) (289 ) 190 249 217 307 (108 ) (84 ) (31 ) (5 ) (278 ) (323 ) (219 ) 23 121 74 152 64 3,724 3,893 (1,146 ) (1,676 ) 29 — (512 ) (500 ) 381 603 (653 ) (607 ) 499 665 — (76 ) 75 — (21 ) (65 ) 155 209 609 1,295 (658 ) (1,356 ) (12 ) (22 ) (1,254 ) (1,530 ) Three Months Ended
March 31,Millions of dollars 2023 2022 Cash flows from operating activities: Net income $ 474 $ 1,320 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 396 311 Impairment 252 — Amortization of debt-related costs 3 4 Share-based compensation 24 18 Equity investments— Equity income (17) (29) Distributions of earnings, net of tax 22 34 Deferred income tax provision 6 137 Changes in assets and liabilities that provided (used) cash: Accounts receivable (279) (629) Inventories (319) (117) Accounts payable 40 724 Other, net (120) (271) Net cash provided by operating activities 482 1,502 Cash flows from investing activities: Expenditures for property, plant and equipment (352) (446) Proceeds from equity securities — 8 Acquisition of equity method investment (2) — Other, net (17) (18) Net cash used in investing activities (371) (456) Cash flows from financing activities: Repurchases of Company ordinary shares (70) (217) Dividends paid - common stock (389) (371) Net proceeds from (repayments of) commercial paper — (169) Collateral received from interest rate derivatives — 51 Other, net (18) (7) Net cash used in financing activities (477) (713) Effect of exchange rate changes on cash 14 (16) (Decrease) increase in cash and cash equivalents and restricted cash (352) 317 Cash and cash equivalents and restricted cash at beginning of period 2,156 1,477 Cash and cash equivalents and restricted cash at end of period $ 1,804 $ 1,794 CASH FLOWS Nine Months Ended
September 30, 2017 2016 (866 ) (2,501 ) (1,060 ) (1,049 ) 990 812 (1,000 ) — (65 ) — (178 ) 177 (8 ) (5 ) (4 ) (1 ) (2,191 ) (2,567 ) 54 17 333 (187 ) 878 931 $ 1,211 $ 744 Ordinary Shares Additional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossCompany
Share of
Shareholders’
EquityNon-
Controlling
InterestsMillions of dollars Issued Treasury Balance, December 31, 2022 $ 19 $ (1,346) $ 6,119 $ 9,195 $ (1,372) $ 12,615 $ 14 Net income — — — 474 — 474 — Other comprehensive income — — — — 65 65 — Share-based compensation — 60 (27) (1) — 32 — Dividends - common stock ($1.19 per share) — — — (389) — (389) — Dividends - redeemable non-controlling interests ($15.00 per share) — — — (2) — (2) — Repurchases of Company ordinary shares — (74) — — — (74) — Balance, March 31, 2023 $ 19 $ (1,360) $ 6,092 $ 9,277 $ (1,307) $ 12,721 $ 14 Ordinary Shares Additional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossCompany
Share of
Shareholders’
EquityNon-
Controlling
InterestsMillions of dollars Issued Treasury Balance, December 31, 2021 $ 19 $ (965) $ 6,044 $ 8,563 $ (1,803) $ 11,858 $ 14 Net income — — — 1,320 — 1,320 — Other comprehensive income — — — — 68 68 — Share-based compensation — 11 12 4 — 27 — Dividends - common stock ($1.13 per share) — — — (371) — (371) — Dividends - redeemable non-controlling interests ($15.00 per share) — — — (2) — (2) — Repurchases of Company ordinary shares — (202) — — — (202) — Balance, March 31, 2022 $ 19 $ (1,156) $ 6,056 $ 9,514 $ (1,735) $ 12,698 $ 14 CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Company
Share of
Stockholders’
Equity Non-
Controlling
Interests Issued Treasury $ 31 $ (14,945 ) $ 10,191 $ 12,282 $ (1,511 ) $ 6,048 $ 25 — — — 2,985 — 2,985 (2 ) — — — — 152 152 — — 36 9 — — 45 — — — — (1,060 ) — (1,060 ) — — (845 ) — — — (845 ) — — — 1 — — 1 (22 ) $ 31 $ (15,754 ) $ 10,201 $ 14,207 $ (1,359 ) $ 7,326 $ 1 See Notes to the Consolidated Financial Statements.LYONDELLBASELL INDUSTRIES N.V. Page 9 9 12 12 13 16 24 25 26 27 31 33 Page 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. , together with its consolidated subsidiaries (collectively “LyondellBasell N.V.”), is a worldwide manufacturerlimited liability company (Naamloze Vennootschap) incorporated under Dutch law by deed of chemicals and polymers, a refiner of crude oil, a significant producer of gasoline blending components and a developer and licensor of technologies for production of polymers.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. 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 ChangesIntangibles-Goodwill and OtherJanuary 2017,September 2022, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standards Update (“ASU”) 2017-04,Intangibles—Goodwill and other (Topic 350)ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Simplifying the Test for Goodwill Impairmentto simplify the accounting for goodwill impairment.Disclosure of Supplier Finance Program Obligations. The guidance removes Step 2requires an entity that uses supplier finance programs in connection with the purchase of goods and services to disclose certain qualitative and quantitative information about its programs including the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now bekey terms and conditions, activity during the amount byperiod, and potential magnitude. The guidance is effective retrospectively for the year ending December 31, 2023, including interim periods, with disclosures required for each period for which a reporting unit’s carrying value exceeds its fair value; however,balance sheet is presented, except for the loss recognized should not exceed the total amountdisclosure 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 testroll forward information, which is necessary.effective for fiscal years beginning after December 15, 2023. 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 2017guidance did not have a material impact on our Consolidated Financial Statements.InventoriesJuly 2015,June 2022, the FASB issued ASU 2015-11,Inventory2022-03, Fair Value Measurement (Topic 330)820): Simplifying theFair Value Measurement of Inventory. Under this newEquity Securities Subject to Contractual Sale Restrictions. The guidance entitiesclarifies that measure inventory using any method othera contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security because it is a characteristic of the entity holding the equity security rather than last-in, first-out ora characteristic of the retail inventory method will be required to measure inventory at the lower of costsecurity and net realizableis not considered in measuring its fair value. The amendments in this ASU, which should be appliedguidance is effective prospectively are effective for annual andthe year ending December 31, 2024, including the interim periods, beginning after December 15, 2016.with the impact of adoption reflected in earnings. Early adoption is permitted. The adoption of this amendment in the first quarter of 2017 didguidance will not have a material impact on our Consolidated Financial Statements.Compensation—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 aspectsSTATEMENTS—STATEMENTS-(Continued)reduce diversitypracticeeach reporting period, included in the classification of certain transactions incontract liability balance at 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 amendmentsperiod, was immaterial.guidance inchange, we have updated the second quarterdisclosure 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 aspectsrevenue disaggregated by key products for all periods presented.Three Months Ended
March 31,Millions of dollars 2023 2022 Sales and other operating revenues: Olefins and co-products $ 883 $ 1,157 Polyethylene 2,016 2,707 Polypropylene 1,526 2,263 Propylene oxide and derivatives 641 885 Oxyfuels and related products 1,233 1,254 Intermediate chemicals 746 1,110 Compounding and solutions 995 1,135 Refined products 2,057 2,458 Other 150 188 Total $ 10,247 $ 13,157 amendment did not have a material impact on our Consolidated Statementscustomer:Three Months Ended
March 31,Millions of dollars 2023 2022 Sales and other operating revenues: United States $ 4,852 $ 6,074 Germany 786 995 China 514 656 Mexico 430 442 Italy 376 518 Japan 365 423 France 294 387 Poland 239 395 The Netherlands 233 390 Other 2,158 2,877 Total $ 10,247 $ 13,157 STATEMENTS—STATEMENTS-(Continued)Leases—In February 2016, the FASB issued ASU 2016-02,Leases (Topic 842), which supersedes the existing guidance for lease accounting in ASC 840,Leases. Under the new guidance, for leases with a term longer than 12 months a lessee should recognize a liability for lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. Topic 842 retains a classification distinction between finance leases and operating leases, with the classification affecting the pattern of expense recognition in the income statement. This ASU also requires enhanced disclosures. A modified retrospective transition approach is required for annual and interim periods beginning on or after December 15, 2018. Early adoption is permitted. We are currently assessing the impact of this new guidance on our Consolidated Financial Statements via an extensive review of numerous existing lease contracts and other purchase obligations that contain embedded lease features, all of which are classified as operating leases under the existing guidance.Financial Instruments—In June 2016, the FASB issued ASU 2016-13,Financial Instruments—Credit Losses (Topic 326):Measurement of Credit Losses on Financial Instruments. This amendment requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected, resulting in the use of a current expected credit loss (“CECL”) model when measuring an impairment of financial instruments. Credit losses related to available-for-sale securities should be recorded in the consolidated income statement through an allowance for credit losses. Estimated credit losses utilizing the CECL model are based on reasonable use of historical experience, current conditions and forecasts that affect the collectability of reported financial assets. This ASU also modifies the impairment model for available-for-sale debt securities by eliminating the concept of “other than temporary” as well as providing a simplified accounting model for purchased financial assets with credit deterioration since their origination. The guidance will be effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. We are currently assessing the impact of the amendment in this guidance on our Consolidated Financial Statements.Income Taxes—In October 2016, the FASB issued ASU 2016-16,Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU is aimed at reducing complexity in accounting standards. Under current GAAP, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new guidance eliminates the exception for all intra-entity sales of assets other than inventory, and a reporting entity would recognize tax expense from the sale of assets in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new guidance will be effective for public entities for annual periods beginning after December 15, 2017. We are currently assessing the impact of this new guidance on our Consolidated Financial Statements.Business Combinations—In January 2017, the FASB issued ASU 2017-01,Clarifying the Definition of a Business. This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether a transaction should be accounted for as an acquisition (or disposal) of an asset or a business. The amendments will be effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. We do not expect the adoption of this new guidance to have a material impact on our Consolidated Financial Statements.Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets—In February 2017, the FASB issued ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The guidance provides clarification about the termin substance nonfinancial asset, other aspects of the scope of Subtopic 610-20Other Income, and how an entity should account for partial sales of nonfinancial assets once the amendments in Update 2014-09 become effective. The amendments will be effective for public entities for annual and interim periods beginning after December 15, 2017. We do not expect the adoption of this new guidance to have a material impact on our Consolidated Financial Statements.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)Compensation—Retirement Benefits—In March 2017, the FASB issued ASU 2017-07,Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The guidance will require changes in presentation of current service cost and other components of net benefit cost. The amendments will be effective for public entities for annual and interim periods beginning after December 15, 2017. We do not expect the adoption of this new guidance to have a material impact on our Consolidated Financial Statements.Receivables—Nonrefundable Fees and Other Costs—In March 2017, the FASB issued ASU 2017-08,Premium Amortization on Purchased Callable Debt Securities. This new guidance requires the premium on callable debt securities to be amortized to the earliest call date. Under current requirements, premiums on callable debt securities are generally amortized over the contractual life of the security. The amendments will be effective for public entities for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of this new guidance to have a material impact on our Consolidated Financial Statements.Derivatives and Hedging—In August 2017, the FASB issued ASU 2017-12,Targeted Improvements to Accounting for Hedging Activities. The new guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting and amends the presentation and disclosure requirements while changing how companies assess effectiveness. Overall, it is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The amendments will be effective for public entities for annual and interim periods beginning after December 15, 2018. Early adoption is permitted and the Company will adopt the guidance effective January 1, 2018. We do not expect the adoption of this new guidance to have a material impact on our Consolidated Financial Statements.3.Accounts Receivable allowance for doubtful accounts receivable which isare reflected in the Consolidated Balance Sheets, net of allowance for credit losses of $6 million as a reduction of accounts receivable, totaled $17 million and $16 million at September 30, 2017March 31, 2023 and December 31, 2016, respectively.4.Inventories September 30,
2017 December 31,
2016 $ 2,705 $ 2,575 188 154 1,284 1,080 $ 4,177 $ 3,809 Millions of dollars March 31,
2023December 31,
2022Finished goods $ 3,443 $ 3,027 Work-in-process 219 227 Raw materials and supplies 1,496 1,550 Total inventories $ 5,158 $ 4,804 long-term debt, net of unamortized discount and debt issuance cost, consisted of the following: September 30, December 31, 2017 2016 $ 959 $ 1,906 990 988 992 991 973 972 979 979 722 721 740 739 300 300 880 785 992 — 7 6 8,534 8,387 (3 ) (2 ) $ 8,531 $ 8,385 Gains (losses) related to fairMillions of dollars March 31,
2023December 31,
2022Senior Notes due 2024, $1,000 million, 5.75% ($1 million of debt issuance cost) $ 774 $ 774 Senior Notes due 2055, $1,000 million, 4.625% ($15 million of discount; $11 million of debt issuance cost) 974 974 Guaranteed Notes due 2027, $300 million, 8.1% 300 300 Issued by LYB International Finance B.V.: Guaranteed Notes due 2023, $750 million, 4.0% 425 424 Guaranteed Notes due 2043, $750 million, 5.25% ($19 million of discount; $6 million of debt issuance cost) 725 725 Guaranteed Notes due 2044, $1,000 million, 4.875% ($10 million of discount; $8 million of debt issuance cost) 982 982 Issued by LYB International Finance II B.V.: Guaranteed Notes due 2026, €500 million, 0.875% ($1 million of discount; $2 million of debt issuance cost) 529 518 Guaranteed Notes due 2027, $1,000 million, 3.5% ($2 million of discount; $2 million of debt issuance cost) 590 587 Guaranteed Notes due 2031, €500 million, 1.625% ($4 million of discount; $3 million of debt issuance cost) 528 516 Issued by LYB International Finance III LLC: Guaranteed Notes due 2025, $500 million, 1.25% ($1 million of discount; $2 million of debt issuance cost) 477 475 Guaranteed Notes due 2030, $500 million, 3.375% ($1 million of debt issuance cost) 124 120 Guaranteed Notes due 2030, $500 million, 2.25% ($3 million of discount; $3 million of debt issuance cost) 473 469 Guaranteed Notes due 2040, $750 million, 3.375% ($2 million of discount; $7 million of debt issuance cost) 741 741 Guaranteed Notes due 2049, $1,000 million, 4.2% ($14 million of discount; $10 million of debt issuance cost) 976 976 Guaranteed Notes due 2050, $1,000 million, 4.2% ($6 million of discount; $10 million of debt issuance cost) 973 971 Guaranteed Notes due 2051, $1,000 million, 3.625% ($2 million of discount; $11 million of debt issuance cost) 914 897 Guaranteed Notes due 2060, $500 million, 3.8% ($4 million of discount; $6 million of debt issuance cost) 484 481 Other 44 42 Total 11,033 10,972 Less current maturities (432) (432) Long-term debt $ 10,601 $ 10,540 Cumulative Three Months Ended Nine Months Ended Year Ended Amount Inception September 30, September 30, December 31, Since Year 2017 2016 2017 2016 2016 Inception 2014 $ (4 ) $ 26 $ (46 ) $ 11 $ 42 $ 38 2016 2 — (1 ) — 3 2 2017 — — (10 ) — — (10 ) These fairGains (Losses) Cumulative Fair Value
Hedging Adjustments Included
in Carrying Amount of DebtThree Months Ended
March 31,March 31, December 31, Millions of dollars 2023 2022 2023 2022 Guaranteed Notes due 2025, 1.25% $ (2) $ 7 $ 12 $ 14 Guaranteed Notes due 2026, 0.875% (1) 4 12 13 Guaranteed Notes due 2027, 3.5% (3) 19 (3) — Guaranteed Notes due 2030, 3.375% (4) 10 17 21 Guaranteed Notes due 2030, 2.25% (3) 10 21 24 Guaranteed Notes due 2031, 1.625% (2) — 9 11 Guaranteed Notes due 2050, 4.2% (2) 5 11 13 Guaranteed Notes due 2051, 3.625% (17) 29 73 90 Guaranteed Notes due 2060, 3.8% (3) — 6 9 Total $ (37) $ 84 $ 158 $ 195 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)short-term debt consisted of the following: September 30, December 31, 2017 2016 $ — $ — — — 317 500 59 90 5 4 $ 381 $ 594 Millions of dollars March 31,
2023December 31,
2022U.S. Receivables Facility $ — $ — Commercial paper 200 200 Precious metal financings 142 131 Other 1 18 Total Short-term debt $ 343 $ 349 Guaranteed Notes due 2027—In March 2017, LYB International Finance II B.V. (“LYB Finance II”), a direct, 100% owned finance subsidiary of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X, issued $1,000 million of 3.5% guaranteed notes due 2027 at a discounted price of 98.968%.These unsecured notes, which are fully and unconditionally guaranteed by LyondellBasell Industries N.V., rank equally in right of payment to all of LYB Finance II’s existing and future unsecured indebtedness and to all of LyondellBasell N.V.’s existing and future unsubordinated indebtedness. There are no significant restrictions that would impede LyondellBasell N.V., as guarantor, from obtaining funds by dividend or loan from its subsidiaries.The indenture governing these notes contains limited covenants, including those restricting our ability and the ability of our subsidiaries to incur indebtedness secured by significant property or by capital stock of subsidiaries that own significant property, enter into certain sale and lease-back transactions with respect to any significant property or enter into consolidations, mergers or sales of all or substantially all of our assets.The notes may be redeemed before the date that is three months prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable Treasury Yield plus 20 basis points) on the notes to be redeemed. The notes may also be redeemed on or after the date that is three months prior to the scheduled maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest.Senior Notes due 2019—In March 2017, we redeemed $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019, and paid $65 million in make-whole premiums. In conjunction with the redemption of these notes, we recognized non-cash charges of $4 million for the write-off of unamortized debt issuance costs and $44 million for the write-off of the cumulative fair value hedge accounting adjustment related to the redeemed notes.Short-Term DebtIn June 2017, the term of our $2,500Our $3,250 million senior unsecured revolving credit facility was extended for one year to June 2022 pursuant to a consent agreement. The revolving credit facility(the “Senior Revolving Credit Facility”), which expires in November 2026, may be used for dollar and euro denominated borrowings,borrowings. The facility has a $500$200 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, LIBOR rate or LIBOR,EURIBOR rate, plus an applicable margin. Additional fees are incurred for the average daily unused commitments.STATEMENTS—STATEMENTS-(Continued)The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00 or less for the period covering the most recent four quarters. We are in compliance with these covenants as of September 30, 2017. At September 30, 2017, we had $317 million of outstanding commercial paper, no outstanding letters of credit and no outstanding borrowings under this facility.Commercial Paper Program—We have a commercial paper program under which we may issue up to $2,500 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). This program is backed by our $2,500 million Senior Revolving Credit Facility. Proceeds from the issuance of commercial paper may be used for general corporate purposes, including dividends and share repurchases. Interest rates on the commercial paper outstanding at September 30, 2017 are based on the term of the notes and range from 141 to 155 basis points.Securitization Facility—Our $900 million U.S. accounts receivable securitization facility,Receivables Facility, which expires in 2018,June 2024, has a purchase limit of $900 million in addition to a $300 million uncommitted accordion feature. This facility provides liquidity through the sale or contribution of trade receivables by certain of our U.S. subsidiaries to a wholly owned, bankruptcy-remote subsidiary on an ongoing basis and without recourse. The bankruptcy-remote subsidiary may then, at its option and subject to a borrowing base of eligible receivables, sell undivided interests 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.September 30, 2017, there wereMarch 31, 2023, we had no borrowings or letters of credit outstanding and $900 million unused availability under this facility.facility.Otherterms of the notes and range from 4.90% to 4.98%. At March 31, 2023, we had $200 million of outstanding commercial paper.September 30, 2017March 31, 2023 and December 31, 2016,2022, our weighted average interest raterates on outstanding short-termShort-term debt was 1.4%were 4.0% and 0.9%3.7%, respectively.DiscountCompliance—As of March 31, 2023, we are in compliance with our debt covenants.Issuance CostsIn the nine months ended September 30, 2017financial intermediary. When a supplier utilizes the program and 2016, amortizationreceives an early payment from the financial intermediary, the supplier takes a discount on the invoice. We pay the financial intermediary the full amount of debt discountsthe invoice on the contractually agreed upon due date. The majority of the suppliers using the program are on 90-day payment terms. We have no economic impact from a supplier’s decision to take an early payment. No guarantees are provided by us or any of our subsidiaries under the program.debt issuance costs resulted in amortization expense of $16December 31, 2022, Accounts payable-Trade included $63 million and $12$53 million, respectively, which is included in Interest expensepayable to suppliers who have elected to participate in the Consolidated Statementssupply chain financing program. We do not believe that future changes in the availability of Income.STATEMENTS—STATEMENTS-(Continued)6.Financial Instruments and Fair Value Measurementscurrency exchangeinterest rates and interestcurrency exchange rates. To manage the volatility related to these exposures, we selectively enter into derivative transactionscontracts pursuant to our risk management policies.A summary of the Company’s financial instruments, risk management policies, derivative instruments, hedging activities and fair value measurement can be found in Notes 14 and 15 to our Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. If applicable, updates have been included in the respective sections below.as of September 30, 2017 and December 31, 2016for the periods presented that are measured at fair value on a recurring basis: September 30, 2017 December 31, 2016 Notional Fair Notional Fair Balance Sheet Amount Value Amount Value Classification $ 22 $ — $ 4 $ — Prepaid expenses and other current assets 16 — 54 3 Other assets — 15 604 34 Prepaid expenses and other current assets 2,000 70 2,439 282 Other assets — 24 — 5 Prepaid expenses and other current assets 1,950 11 2,200 11 Other assets 131 12 85 3 Prepaid expenses and other current assets 32 — 11 — Prepaid expenses and other current assets 1,299 1,295 1,069 1,073 Short-term investments $ 5,450 $ 1,427 $ 6,466 $ 1,411 March 31, 2023 December 31, 2022 Millions of dollars Notional Amount Fair Value Notional Amount Fair Value Balance Sheet
ClassificationAssets– Derivatives designated as hedges: Commodities $ 8 $ 2 $ — $ — Prepaid expenses and other current assets Commodities 32 4 — — Other assets Foreign currency 903 114 903 109 Prepaid expenses and other current assets Foreign currency 2,099 114 2,725 133 Other assets Interest rates — 28 — 16 Prepaid expenses and other current assets Interest rates 400 10 400 25 Other assets Derivatives not designated as hedges: Commodities 215 39 192 27 Prepaid expenses and other current assets Foreign currency 144 1 160 — Prepaid expenses and other current assets Total $ 3,801 $ 312 $ 4,380 $ 310 Liabilities– Derivatives designated as hedges: Commodities $ 16 $ 2 $ 35 $ 14 Accrued liabilities Commodities 24 4 — — Other liabilities Foreign currency — 27 — 15 Accrued liabilities Foreign currency 1,500 29 650 8 Other liabilities Interest rates — 26 — 23 Accrued liabilities Interest rates 2,168 191 2,164 229 Other liabilities Derivatives not designated as hedges: Commodities 143 8 50 11 Accrued liabilities Commodities 11 2 7 3 Other liabilities Foreign currency 423 11 236 6 Accrued liabilities Total $ 4,285 $ 300 $ 3,142 $ 309 STATEMENTS—STATEMENTS-(Continued) September 30, 2017 December 31, 2016 Notional Fair Notional Fair Balance Sheet Amount Value Amount Value Classification $ 59 $ 2 $ — $ — Accrued liabilities 13 — — — Other liabilities 139 9 — — Accrued liabilities 950 120 — — Other liabilities 2,050 42 1,400 20 Other liabilities 192 16 103 11 Accrued liabilities 631 1 28 1 Accrued liabilities 20 20 19 19 Accrued liabilities 21 21 22 22 Other liabilities $ 4,075 $ 231 $ 1,572 $ 73 All derivatives and available-for-sale securities in the tables above are classified as Level 2, except for our limited partnership investments included in our available-for-sale securities discussed below, that are measured at fair value using the net asset per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy.At September 30, 2017, our outstanding foreign currency and commodity contracts not designated as hedges mature from October 2017 to December 2017 and from October 2017 to June 2018, respectively.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)financial instruments that are not measured at fair value on a recurring basis as of September 30, 2017Short-term precious metal financings and December 31, 2016: September 30, 2017 December 31, 2016 Carrying
Value Fair
Value Carrying
Value Fair
Value $ 561 $ 561 $ 369 $ 369 $ 59 $ 67 $ 90 $ 98 8,528 9,428 8,382 9,147 $ 8,587 $ 9,495 $ 8,472 $ 9,245 AllLong-term debt:March 31, 2023 December 31, 2022 Millions of dollars Carrying
ValueFair
ValueCarrying
ValueFair
ValuePrecious metal financings $ 142 $ 114 $ 131 $ 113 Long-term debt 10,580 9,201 10,517 8,882 Total $ 10,722 $ 9,315 $ 10,648 $ 8,995 There were no transfers between Level 1Our other financial instruments classified within Current assets and Level 2 for anyCurrent liabilities have a short maturity and their carrying value generally approximates fair value.financial instruments duringoutstanding commodity derivative instruments:March 31, 2023 December 31, 2022 Millions of dollars Notional Amount Notional Amount Maturity Date Derivatives designated as hedges: Cash flow hedges $ 80 $ 35 2023 to 2026 Derivatives not designated as hedges: Commodity contracts 369 249 2023 to 2024 nine months ended September 30, 2017 and the year ended December 31, 2016.Net Investment Hedges—In August 2017 and September 2017, forward exchange contracts and basis swaps with an aggregate notional value of €550 million expired. Upon settlement of these foreign currency contracts, we paid €550 million ($658 million at the expiry spot rate) to our counterparties and received $609 million from our counterparties. The $49 million loss is reflected in foreign currency translation adjustments in Accumulated other comprehensive loss. Cash flows from the settlement of these foreign currency contracts are reported in Cash flows from investing activities in the Consolidated Statements of Cash Flows.In February 2017, we entered into €617 million of basis swaps to reduce the volatility in stockholders’ equity resulting from changes in currency exchange ratesamounts of our foreign subsidiaries with respect tooutstanding interest rate derivative instruments:March 31, 2023 December 31, 2022 Millions of dollars Notional Amount Notional Amount Maturity Date Cash flow hedges $ 400 $ 400 2024 Fair value hedges 2,168 2,164 2025 to 2031 U.S. dollar. We use the critical terms match to assess hedge effectivenessnotional amounts of these basis swaps by comparing the spot rate change in the basis swaps and the spot rate change in the designated net investment.In September 2016, €450 million of our basis swaps expired. Upon settlement of these basis swap contracts, we paid €450 million ($506 million at the expiry spot rate) to our counterparties and received $500 million from our counterparties. The $6 million loss is reflected in foreign currency translation adjustments in Accumulated other comprehensive loss. Cash flows from the settlement of these basis swap contracts are reported in Cash flows from investing activities in the Consolidated Statements of Cash Flows.On March 31, 2016, we settled forward exchange contracts with an aggregate notional value of €750 million. Upon settlement of these contracts, we paid €750 million ($850 million at the expiry spot rate) to our counterparties and received $795 million from our counterparties. The $55 million difference, which includes a $30 million loss in the first quarter of 2016, is reflected in foreign currency translations adjustments in Accumulated other comprehensive loss. Cash flows from the settlement of these forward exchange contracts are reported in Cash flows from investing activities in the Consolidated Statements of Cash Flows.At September 30, 2017 and December 31, 2016, we had outstanding foreign currency contracts with an aggregate notional valuederivative instruments:March 31, 2023 December 31, 2022 Millions of dollars Notional Amount Notional Amount Maturity Date Net investment hedges $ 3,352 $ 3,128 2023 to 2030 Cash flow hedges 1,150 1,150 2024 to 2027 Not designated 567 396 2023 to 2024 STATEMENTS—STATEMENTS-(Continued)investment hedges. In addition, we had outstanding foreign-currency denominated debt, with notional amounts totaling €750 million ($850 million), designated as a net investment hedge at each of September 30, 2017 and December 31, 2016.There was no ineffectiveness recorded for any of these net investment hedging relationships during the three and nine months ended September 30, 2017 and 2016.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 Notional
Value Notional
Value Expiration
Date $ 2,300 $ 2,300 2021 to 2027 1,000 1,000 2049 110 58 2017 to 2019 The ineffectiveness recorded for these cash flow hedging relationships was losses of less than $1 million during each of the three months ended September 30, 2017 and 2016 and losses of $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, 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)table summarizestables summarize 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 2017 2016 2017 2016 2017 2016 $ 3 $ — $ — $ — $ — $ — Cost of sales (155 ) (52 ) 74 5 — — Other income, net (5 ) (21 ) — — 3 (12 ) Interest expense — — — — (6 ) (4 ) Sales and other
operating revenues
— — — — 6 (5 ) Cost of sales — — — — (6 ) 1 Other income, net (30 ) (2 ) — — — — $ (187 ) $ (75 ) $ 74 $ 5 $ (3 ) $ (20 ) 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 2017 2016 2017 2016 2017 2016 $ (4 ) $ — $ — $ — $ — $ — Cost of sales (403 ) (134 ) 232 52 — — Other income, net (23 ) (175 ) — — 20 31 Interest expense — — — — (9 ) 6 Sales and other
operating revenues
— — — — (31 ) (27 ) Cost of sales — — — — (7 ) 13 Other income, net (95 ) 12 — — — — $ (525 ) $ (297 ) $ 232 $ 52 $ (27 ) $ 23 Foreign currency losses recognizedrecorded in Accumulated 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 ofloss (“AOCI”), the gains (losses) reclassified from AOCI to earnings and additional gains (losses) recognized directly in income for our fixed-for-floating interest rate swaps includesearnings:Effects of Financial Instruments Three Months Ended March 31, Balance Sheet Income Statement Gain (Loss)
Recognized in
AOCIGain (Loss) Reclassified
to Income
from AOCIAdditional Gain
(Loss) Recognized
in IncomeIncome Statement Millions of dollars 2023 2022 2023 2022 2023 2022 Classification Derivatives designated as hedges: Commodities $ (5) $ 26 $ 19 $ (11) $ — $ — Cost of sales Foreign currency (55) 44 20 (25) 14 (4) Interest expense Interest rates (14) 112 1 1 23 (77) Interest expense Derivatives not designated as hedges: Commodities — — — — (33) 36 Sales and other operating revenues Commodities — — — — 27 3 Cost of sales Foreign currency — — — — (11) (19) Other income, net Total $ (74) $ 182 $ 40 $ (35) $ 20 $ (61) net value of interest accrued of $5 millionnext twelve months.$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 Marketable SecuritiesCash EquivalentsThe following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of our available-for-sale and held-to maturity securities that are outstanding as of September 30, 2017At March 31, 2023 and December 31, 2016: September 30, 2017 Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value $ 177 $ — $ — $ 177 621 1 — 622 150 — — 150 1 — — 1 350 1 (6 ) 345 $ 1,299 $ 2 $ (6 ) $ 1,295 December 31, 2016 Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value $ 232 $ — $ — $ 232 141 — — 141 347 1 — 348 350 2 — 352 $ 1,070 $ 3 $ — $ 1,073 $ 74 $ — $ — $ 74 At September 30, 2017 and December 31, 2016,2022, we had marketable securities classified as Cash and cash equivalents of $725$1,065 million and $351$1,191 million, respectively.No losses relatedother-than-temporary impairmentsthe year-to-date ordinary income. Tax effects of our available-for-salesignificant, unusual, or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and held-to-maturity investments have been recorded in Accumulated other comprehensive loss during the three and nine months ended September 30, 2017 and 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)The proceeds from maturities and sales of our available-for-sale securities during the three and nine months ended September 30, 2017 and 2016 are summarizedrecognized in the following table: Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 12 $ 8 $ 499 $ 665 — — — — No gain or loss was realizedinterim period in connection with the sales of our available-for-sale securities during the three and nine months ended September 30, 2017 and 2016.During the nine months ended September 30, 2017, we had maturities of our held-to-maturity securities of $75 million. During the three and nine months ended September 30, 2017, we had no sales of our held-to-maturity securities and we had no transfers of investments classified as held-to-maturity to available-for-sale.The following table summarizes the fair value and unrealized losses related to available-for-sale and held-to-maturity securities 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 Fair
Value Unrealized
Loss Fair
Value Unrealized
Loss $ 122 $ (5 ) $ 105 $ (2 ) December 31, 2016 Less than 12 months Greater than 12 months Fair
Value Unrealized
Loss Fair
Value Unrealized
Loss $ — $ — $ 105 $ (3 ) Foreign Currency Gain (Loss)—Other income, net, in the Consolidated Statements of Income reflected losses of less than $1 million and $6 million for the three and nine months ended September 30, 2017, respectively, and a gain of $1 million and a loss of $5 million for the three and nine months ended September 30, 2016, respectively.Repurchase Agreements—At September 30, 2017 and December 31, 2016, we had investments in tri-party repurchase agreements of $561 million and $369 million, respectively. Depending upon maturity, these tri-party repurchase agreements are treated as short-term loans receivable and are reflected in Prepaid expenses and other current assets or as long-term loans receivable reflected in Other investments and long-term receivables on our Consolidated Balance Sheets.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)7.Pension and Other Postretirement BenefitsNet periodic pension benefits included the following cost components for the periods presented: U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 11 $ 11 $ 35 $ 33 15 22 45 66 (30 ) (34 ) (91 ) (104 ) 5 5 16 15 $ 1 $ 4 $ 5 $ 10 Non-U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 9 $ 8 $ 28 $ 24 5 8 16 24 (4 ) (6 ) (13 ) (18 ) 4 2 11 6 $ 14 $ 12 $ 42 $ 36 Net periodic other postretirement benefits included the following cost components for the periods presented: U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ — $ — $ 2 $ 2 3 3 7 9 $ 3 $ 3 $ 9 $ 11 Non-U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 1 $ — $ 2 $ 1 — — 1 1 1 1 2 2 $ 2 $ 1 $ 5 $ 4 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)8.Income TaxesOur effective income tax rate for the three months ended September 30, 2017 was 26.4% compared with 25.4% for the three months ended September 30, 2016. For the nine months ended September 30, 2017, the effective income tax rate was 27.8% compared with 26.4% for the first nine months ended September 30, 2016.which they occur. Our effective income tax rate fluctuates based on, among other factors, changes in pretaxpre-tax 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.third quarterU.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 2016,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 higherfavorable treatment for interest income, dividends, and export incentives to continue in the near term; however, this treatment is based on current law. We continue to monitor the Organization for Economic Cooperation and Development (“OECD”)’s Pillar One and Two legislation which focus on taxing rights and minimum taxes in countries where we operate, including the United Kingdom; however, we do not expect the impact to be material based on the principles agreed to at this stage.thirdfirst quarter of 20172023 was primarily attributable to changes in pretax income in countries26.0% compared with varying statutory tax rates, prior year adjustments to our deferred tax liabilities, and an increase in foreign currency exchange gains, partially offset by an increase in exempt income, and an increase in U.S. domestic production activity deduction. Compared with19.3% for the first nine monthsquarter of 2016, the2022. The higher effective tax rate for the first nine monthsquarter of 20172023 was primarily attributable to changes in valuation allowances, changes in pretax income in countries with varying statutory tax rates, a decrease in exempt income, and prior year adjustments to our deferred tax liabilities, partially offset by an increase 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. 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, 2017 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, due to the settlementfirst quarter 2023 goodwill impairment, for which there is no tax benefit, of uncertain tax positions with6.6%.tax authoritiespurchase commitments for materials, supplies and the expiration 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 proposals and the European Union’s state aid investigations) in countries where we conduct business. Recently, there has been an increase in attention, both in the U.K. and globally,services incidental to the tax practicesordinary conduct of multinational companies, including proposals by the Organizationbusiness, generally for Economic Cooperationquantities required for our businesses and Development with respectat prevailing market prices. These commitments are designed to base erosionassure sources of supply 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 regulations to be revoked.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)9.Commitments and ContingenciesInstruments—Instruments—We have obtained letters of credit, performance and surety bonds and have issued financial and performance guarantees to support trade payables, potential liabilities and other obligations. Considering the frequency of claims made against the financial instruments we use to support our obligations, and the magnitude of those financial instruments in light of our current financial position, management does not expect that any claims against or draws on these instruments would have a material adverse effect on our Consolidated Financial Statements. We have not experienced any unmanageable difficultydifficulties in obtaining the required financial assurance instruments for our current operations.Remediation—Remediation—Our accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $99$126 million and $95$127 million as of September 30, 2017March 31, 2023 and December 31, 2016,2022, respectively. At September 30, 2017,March 31, 2023, the accrued liabilities for individual sites range from less than $1 million to $17$25 million. The remediation expenditures are expected to occur over a number of years and are not to be concentrated in any single year. In our opinion, it is reasonably possible that losses in excess of the liabilities recorded may have been incurred. However, we cannot estimate any amount or range of such possible additional losses. New information about sites, new technology or future developments, such as involvement in investigations by regulatory agencies, could require us to reassess our potential exposure related to environmental matters.The following table summarizes the activity in our accrued environmental liability included in “Accrued liabilities” and “Other liabilities:” Nine Months Ended
September 30, 2017 2016 $ 95 $ 106 — 3 3 10 (7 ) (16 ) 8 2 $ 99 $ 105 Access Indemnity Demand—In December 2010, one of our subsidiaries received demand letters from affiliates of Access Industries (collectively, “Access Entities”), a more than five percent shareholder of the Company, demanding indemnity for losses, including attorney’s fees and expenses, arising out of a pending lawsuit styledEdward S. Weisfelner, as Litigation Trustee of the LB Litigation Trust v. Leonard Blavatnik, et al.,Adversary Proceeding No. 09-1375 (REG), in the United States Bankruptcy Court, Southern District of New York. In theWeisfelner lawsuit, the plaintiffs seek to recover from Access the return of all amounts earned by the Access Entities related to their purchase of shares of Lyondell Chemical prior to its acquisition by Basell AF S.C.A.; distributions by Basell AF S.C.A. to its shareholders before it acquired Lyondell Chemical; and management and transaction fees and expenses. Trial of the lawsuit was held in October 2016. In April 2017, the court awarded $7.2 million to the plaintiffs and denied all other relief, and in May 2017 the court issued its Final Judgment reflecting this ruling. With prejudgment interest included, the total Final Judgment is $12.6 million. In May 2017, the plaintiffs filed an appeal of this Final Judgment to the Federal District Court for the Southern District of New York. That appeal remains pending.The Access Entities have also demanded $100 million in management fees under a 2007 management agreement between an Access affiliate and the predecessor of LyondellBasell AF, as well as other unspecified amounts relatingLYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)to advice purportedly given in connection with financing and other strategic transactions. In June 2009, an Access affiliate filed a proof of claim in Bankruptcy Court against LyondellBasell AF seeking “no less than” $723 thousand for amounts allegedly owed under the 2007 management agreement. In April 2011, Lyondell Chemical filed an objection to the claim and brought a declaratory judgment action for a determination that the demands are not valid. The declaratory judgment action is stayed pending the outcome of theWeisfelner lawsuit.We do not believe that the 2007 management agreement is in effect or that the Company or any Company-affiliated entity owes any obligations under the management agreement, including for management fees or for indemnification. We intend to vigorously defend our position in any proceedings and against any claims or demands that may be asserted.Although the court issued its Final Judgment inWeisfelner in May 2017 as noted above, it remains on appeal and subject to further potential appeal by the parties. Accordingly, we cannot at this time estimate the reasonably possible loss or range of loss that may be incurred.409A Matter—Certain of the Company’s current and former executives were being audited by the Internal Revenue Service for the 2012 tax year regarding the treatment of their Company stock options under Section 409A of the Internal Revenue Code. In early 2017, the audits were settled and the Company has incurred an aggregate of $1.7 million for all liabilities relating to the 2012 tax year. The Company believes that any additional future liability that may arise related to this issue will not be material.third partythird-party claims relating to environmental and tax matters and various types of litigation. As of September 30, 2017,March 31, 2023, we had not accrued any significant amounts for our indemnification obligations, and we are not aware of other circumstances that would likely lead to significant future indemnification obligations. We cannot determine with certainty the potential amount of future payments under the indemnification arrangements until events arise that would trigger a liability under the arrangements.five5 to ten10 years.10.Stockholders’ EquitydistributionsDistributions—The following table summarizes the dividends paid in the periods presented: Dividend Per
Ordinary
Share Aggregate
Dividends
Paid Date of Record $ 0.85 $ 343 March 6, 2017 0.90 361 June 5, 2017 0.90 356 September 6, 2017 $ 2.65 $ 1,060 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)Millions of dollars, except per share amounts Dividend Per
Ordinary ShareAggregate
Dividends PaidDate of Record March 2023 - Quarterly dividend $ 1.19 $ 389 March 6, 2023 ProgramsAuthorization—In May 2017,2022, our shareholders approved a proposal to authorize us to repurchase up to an additional 10% of our outstanding34.0 million ordinary shares, through November 201827, 2023 (“May 20172022 Share Repurchase Program”Authorization”). As a result, the authorization, which superseded any prior repurchase authorizations. The timing and amount of the remaining unpurchased shares under the share repurchase program approved by our shareholders in May 2016 (“May 2016 Share Repurchase Program”) was superseded.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. Nine Months Ended September 30, 2017 Shares
Repurchased Average
Purchase
Price Total Purchase
Price, Including
Commissions 3,501,084 $ 85.71 $ 300 6,516,917 83.54 545 10,018,001 $ 84.30 $ 845 Nine Months Ended September 30, 2016 Shares
Repurchased Average
Purchase
Price Total Purchase
Price, Including
Commissions 15,302,707 $ 80.15 $ 1,226 16,091,214 77.73 1,251 31,393,921 $ 78.91 $ 2,477 Due to the timing of settlements, totalMillions of dollars, except shares and per share amounts Shares
RepurchasedAverage
Purchase
PriceTotal Purchase Price, Including
Commissions and FeesFor three months ended March 31, 2023: 2022 Share Repurchase Authorization 846,500 $ 87.28 $ 74 For three months ended March 31, 2022: 2021 Share Repurchase Authorization 2,073,378 $ 97.70 $ 202 ninethree months ended September 30, 2017March 31, 2023 and 20162022 was $866$70 million and $2,501$217 million, respectively. Nine Months Ended
September 30, 2017 2016 404,046,331 440,150,069 343,663 338,103 4,184 200 81,964 71,108 (10,018,001 ) (31,393,921 ) 394,458,141 409,165,559 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Three Months Ended
March 31, 2023 2022 Ordinary shares outstanding: Beginning balance 325,723,567 329,536,389 Share-based compensation 516,142 123,550 Employee stock purchase plan 75,392 57,473 Purchase of ordinary shares (846,500) (2,073,378) Ending balance 325,468,601 327,644,034 Nine Months Ended September 30, 2017 2016 174,389,139 138,285,201 (343,663 ) (338,103 ) 509 — (81,964 ) (71,108 ) 10,018,001 31,393,921 183,982,022 169,269,911 Three Months Ended
March 31, 2023 2022 Ordinary shares held as treasury shares: Beginning balance 14,698,931 10,675,605 Share-based compensation (516,142) (123,550) Employee stock purchase plan (75,392) — Purchase of ordinary shares 846,500 2,073,378 Ending balance 14,953,897 12,625,433 Income (Loss)Loss—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the ninethree months ended September 30, 2017March 31, 2023 and 20162022 are presented in the following table: Net Unrealized Net Holding Unrealized Gains Defined Holding (Losses) Pension Foreign Gains Attributable and Other Currency Financial (Losses) on to Equity Postretirement Translation Derivatives Investments Investees Benefit Plans Adjustments Total $ (75 ) $ 1 $ — $ (498 ) $ (939 ) $ (1,511 ) (187 ) (5 ) 14 — 143 (35 ) 167 — — 20 — 187 (20 ) (5 ) 14 20 143 152 $ (95 ) $ (4 ) $ 14 $ (478 ) $ (796 ) $ (1,359 ) $ (79 ) $ (5 ) $ — $ (428 ) $ (926 ) $ (1,438 ) (201 ) (7 ) — — 80 (128 ) 52 — — 15 7 74 (149 ) (7 ) — 15 87 (54 ) $ (228 ) $ (12 ) $ — $ (413 ) $ (839 ) $ (1,492 ) Millions of dollars Financial
DerivativesDefined Benefit
Pension and Other
Postretirement
Benefit PlansForeign
Currency
Translation
AdjustmentsTotal Balance – December 31, 2022 $ (146) $ (182) $ (1,044) $ (1,372) Other comprehensive income (loss) before reclassifications (35) — 49 14 Tax benefit before reclassifications 9 — 10 19 Amounts reclassified from accumulated other comprehensive loss 40 3 — 43 Tax expense (10) (1) — (11) Net other comprehensive income 4 2 59 65 Balance – March 31, 2023 $ (142) $ (180) $ (985) $ (1,307) STATEMENTS—STATEMENTS-(Continued)Millions of dollars Financial
DerivativesDefined Benefit
Pension and Other
Postretirement
Benefit PlansForeign
Currency
Translation
AdjustmentsTotal Balance – December 31, 2021 $ (354) $ (528) $ (921) $ (1,803) Other comprehensive income (loss) before reclassifications 147 — (14) 133 Tax expense before reclassifications (32) — (11) (43) Amounts reclassified from accumulated other comprehensive loss (35) 8 — (27) Tax (expense) benefit 8 (3) — 5 Net other comprehensive income (loss) 88 5 (25) 68 Balance – March 31, 2022 $ (266) $ (523) $ (946) $ (1,735) Three Months Ended
September 30, Nine Months Ended
September 30, Affected line item on
the Consolidated
Statements of Income 2017 2016 2017 2016 $ 74 $ 5 $ 232 $ 52 Other income, net — 1 — 1 10 8 29 23 — 7 — 7 Other income, net 84 21 261 83 21 4 74 9 Provision for income taxes $ 63 $ 17 $ 187 $ 74 Amortization Three Months Ended
March 31,Affected Line Item on
the Consolidated
Statements of IncomeMillions of dollars 2023 2022 Reclassification adjustments for: Financial derivatives: Commodities $ 19 $ (11) Cost of sales Foreign currency 20 (25) Interest expense Interest rates 1 1 Interest expense Income tax (expense) benefit (10) 8 Provision for income taxes Financial derivatives, net of tax 30 (27) Amortization of defined pension items: Actuarial loss 2 7 Other income, net Prior service cost 1 1 Other income, net Income tax expense (1) (3) Provision for income taxes Defined pension items, net of tax 2 5 Total reclassifications, before tax 43 (27) Income tax (expense) benefit (11) 5 Provision for income taxes Total reclassifications, after tax $ 32 $ (22) Amount included in net income actuarial losscumulative perpetual special stock (“redeemable non-controlling interest stock”) issued by a consolidated subsidiary. As of March 31, 2023 and prior service cost is included inDecember 31, 2022, we had 113,466 and 113,471 shares of redeemable non-controlling interest stock outstanding, respectively. These shares may be redeemed at any time at the computationdiscretion of net periodic pension and other postretirement benefit costs (see Note 7).periods.period. Diluted earnings per share includes the effect of certain stock option awards and other equity-based compensation awards. We haveOur unvested restricted stock units thatcontain non-forfeitable rights to dividend equivalents and are considered participating securities forsecurities. We calculate basic and diluted earnings per share.and dividends declared per shareis as follows: Three Months Ended March 31, 2023 2022 Millions of dollars Continuing
OperationsDiscontinued
OperationsContinuing
OperationsDiscontinued
OperationsNet income (loss) $ 475 $ (1) $ 1,321 $ (1) Dividends on redeemable non-controlling interests (2) — (2) — Net income attributable to participating securities (1) — (2) — Net income (loss) attributable to ordinary shareholders – basic and diluted $ 472 $ (1) $ 1,317 $ (1) Millions of shares, except per share amounts Basic weighted average common stock outstanding 326 326 328 328 Effect of dilutive securities 1 1 1 1 Potential dilutive shares 327 327 329 329 Earnings per share: Basic $ 1.45 $ — $ 4.01 $ — Diluted $ 1.44 $ — $ 4.00 $ — STATEMENTS—STATEMENTS-(Continued) Nine Months Ended September 30, 2017 2016 Continuing Discontinued Continuing Discontinued Operations Operations Operations Operations $ 2,997 $ (14 ) $ 3,077 $ (3 ) 2 — (1 ) — 2,999 (14 ) 3,076 (3 ) (3 ) — (3 ) — $ 2,996 $ (14 ) $ 3,073 $ (3 ) 400 400 423 423 — — 1 1 400 400 424 424 $ 7.49 $ (0.03 ) $ 7.26 $ (0.01 ) $ 7.49 $ (0.03 ) $ 7.24 $ (0.01 ) 0.4 0.4 0.4 0.4 $ 2.65 $ — $ 2.48 $ — LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)12.Segment and Related Informationthrough five operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280,Segment Reporting. Each of our operating segments is managed by a senior executive reporting directlyexecutives who report to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the operating results of each of the operating segments for performance evaluation and resource allocation.•Olefins and Polyolefins–Americas (“O&P–Americas”). Our O&P–Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.•Olefins and Polyolefins–Europe, Asia, International (“O&P–EAI”). Our O&P–EAI segment produces and markets olefins and co-products, polyethylene, and polypropylene, including polypropylene compounds.•Intermediates and Derivatives (“I&D”). Our I&D segment produces and markets propylene oxide and its co-products and derivatives, oxyfuels and related products and intermediate chemicals such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.•Refining. Our Refining segment refines heavy, high-sulfur crude oils and other crude oils of varied types and sources available on the U.S. Gulf Coast into refined products, including gasoline and distillates.•Technology. Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.segments’ profitabilitysegments, and therefore, in accordance with ASC 280,Segment Reporting, we have presented EBITDA for all segments. We define EBITDA as earnings from continuing operations before interest, income taxes, and depreciation and amortization.Intersegmentare included in “Other.”such as foreign exchange gains or losses and components of pension and other postretirement benefit costs other than service costs. Sales between segments are made primarily at prices approximating prevailing market prices.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)tabletables for the periods presented: Three Months Ended September 30, 2017 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 1,817 $ 3,096 $ 2,043 $ 1,491 $ 69 $ — $ 8,516 632 56 34 179 29 (930 ) — 2,449 3,152 2,077 1,670 98 (930 ) 8,516 8 69 4 — — — 81 616 698 402 58 47 — 1,821 Three Months Ended September 30, 2016 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 1,740 $ 2,585 $ 1,769 $ 1,192 $ 80 $ (1 ) $ 7,365 602 49 36 138 22 (847 ) — 2,342 2,634 1,805 1,330 102 (848 ) 7,365 12 67 2 — — — 81 682 584 304 (10 ) 45 1 1,606 Nine Months Ended September 30, 2017 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 5,631 $ 9,029 $ 6,142 $ 4,306 $ 241 $ — $ 25,349 1,969 155 99 430 84 (2,737 ) — 7,600 9,184 6,241 4,736 325 (2,737 ) 25,349 33 202 5 — — — 240 2,198 1,926 1,080 53 155 (4 ) 5,408 Three Months Ended March 31, 2023 Millions of dollars O&P-
AmericasO&P-
EAII&D APS Refining Technology Other Total Sales and other operating revenues: Customers $ 1,727 $ 2,710 $ 2,641 $ 995 $ 2,057 $ 117 $ — $ 10,247 Intersegment 1,081 182 41 2 133 22 (1,461) — 2,808 2,892 2,682 997 2,190 139 (1,461) 10,247 Income (loss) from equity investments 23 1 (6) (1) — — — 17 EBITDA 541 77 426 (226) 246 73 (6) 1,131 Capital expenditures 82 54 179 17 2 17 1 352 STATEMENTS—STATEMENTS-(Continued) Nine Months Ended September 30, 2016 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 4,978 $ 7,805 $ 5,186 $ 3,179 $ 288 $ — $ 21,436 1,690 128 90 395 75 (2,378 ) — 6,668 7,933 5,276 3,574 363 (2,378 ) 21,436 54 232 3 — — — 289 2,314 1,669 1,027 (9 ) 201 (6 ) 5,196 Our O&P–Americas results forThree Months Ended March 31, 2022 Millions of dollars O&P–
AmericasO&P–
EAII&D APS Refining Technology Other Total Sales and other operating revenues: Customers $ 2,453 $ 3,687 $ 3,276 $ 1,135 $ 2,458 $ 148 $ — $ 13,157 Intersegment 1,281 239 63 1 262 33 (1,879) — 3,734 3,926 3,339 1,136 2,720 181 (1,879) 13,157 Income (loss) from equity investments 33 1 (5) — — — — 29 EBITDA 939 214 546 71 148 103 (1) 2,020 Capital expenditures 135 89 163 15 14 29 1 446 first nine monthsfollowing table:Millions of dollars O&P-
AmericasO&P-
EAII&D APS Refining Technology Total March 31, 2023 Property, plant and equipment, net $ 6,337 $ 1,914 $ 5,800 $ 639 $ 193 $ 518 $ 15,401 Equity investments 2,038 1,663 563 2 — — 4,266 December 31, 2022 Property, plant and equipment, net $ 6,378 $ 1,880 $ 5,728 $ 636 $ 255 $ 510 $ 15,387 Equity investments 2,053 1,655 585 2 — — 4,295 2017 include$315 million and $269 million, respectively, based on the relative fair values of the products that were reintegrated compared to the fair value of the APS segment.$31large portion of the APS reporting unit’s fair value was derived from our Catalloy and polybutene-1 products, which had disproportionately low carrying values in comparison to the remaining assets of the reporting unit, which had relatively higher carrying values due to the 2018 purchase price allocation associated with the acquisition of A. Schulman. As a result of the reallocation of goodwill and the change in both fair value and carrying value among reporting units, we determined the APS reporting units goodwill fair value to be $753 million, gain onresulting in a non-cash goodwill impairment charge of $252 million in the first quarter saleof 2023 in our APS segment. Fair values were determined utilizing a discounted cash flow method under the income approach and assumptions including management’s view on long-term growth rates in our industry, discount rates and other assumptions based on a market participant perspective, which are inherently subjective. The fair value of the reporting unit is Level 3 within the fair value hierarchy.Lake Charles, Louisiana site. EBITDA forHouston refinery no later than the end of 2023 after determining that exiting the refining business is our O&P–EAI segmentbest strategic and financial path forward. In connection with the planned exit from the refinery business, during the first quarter of 2023 we expensed accelerated lease amortization costs of $51 million, personnel costs of $16 million, asset retirement cost depreciation of $55 million, and asset retirement obligation accretion of $2 million. In subsequent periods, we expect to incur additional costs primarily consisting of accelerated amortization of operating lease assets of $100 million to $200 million, personnel costs of $40 million to $70 million and other charges of $50 million to $100 million. Additionally, we estimate that the Houston refinery’s asset retirement obligations are in the third quarter and first nine monthsrange of 2017 includes a $108$150 million gain on the saleto $450 million. As of March 31, 2023, we recorded asset retirement obligations of $253 million representing our 27% interest in Geosel and the first nine months of 2017 also includes a $21 million non-cash gain stemming from the elimination of an obligation associated with a lease.In the first nine months of 2016, our O&P–Americas and O&P–EAI segments also benefited from gains of $57 million and $21 million, respectively,best estimate. We do not anticipate any material cash payments related to the saleexit of our wholly owned Argentine subsidiary, Petroken Petroquimica Ensenada S.A. Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 $ 1,821 $ 1,605 $ 5,412 $ 5,202 — 1 (4 ) (6 ) (294 ) (257 ) (876 ) (791 ) (94 ) (72 ) (396 ) (237 ) 5 4 15 13 $ 1,438 $ 1,281 $ 4,151 $ 4,181 Three Months Ended
March 31,Millions of dollars 2023 2022 EBITDA: Total segment EBITDA $ 1,137 $ 2,021 Other EBITDA (6) (1) Less: Depreciation and amortization expense (396) (311) Interest expense (116) (74) Add: Interest income 23 2 Income from continuing operations before income taxes $ 642 $ 1,637
subsidiaries (“LyondellBasell N.V.”). Results of operations for the periods discussed are presented in the table below: Millions of dollars Sales and other operating revenues Cost of sales Selling, general and administrative expenses Research and development expenses Operating income Interest expense Interest income Other income, net Income from equity investments Provision for income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income 2022. Average sales prices revenues. $38 million. Foreign currency translation gains in Comprehensive income increased by $84 million in the first quarter of 2023 compared to the first quarter of 2022, primarily due to the strengthening of the U.S. dollar relative to the euro. Millions of dollars Sales and other operating revenues: O&P–Americas segment O&P–EAI segment I&D segment Refining segment Technology segment Other, including intersegment eliminations Total Operating income (loss): O&P–Americas segment O&P–EAI segment I&D segment Refining segment Technology segment Other, including intersegment eliminations Total Depreciation and amortization: O&P–Americas segment O&P–EAI segment I&D segment Refining segment Technology segment Total Income from equity investments: O&P–Americas segment O&P–EAI segment I&D segment Total Millions of dollars Other income (expense), net: O&P–Americas segment O&P–EAI segment I&D segment Refining segment Other, including intersegment eliminations Total EBITDA: O&P–Americas segment O&P–EAI segment I&D segment Refining segment Technology segment Other, including intersegment eliminations Total below: 2022 primarily driven by lower margins across most businesses. Millions of dollars Sales and other operating revenues Income from equity investments EBITDA EBITDA decreased in the first 2022, respectively. Millions of dollars Sales and other operating revenues Income from equity investments EBITDA 4%. Contents related products. Millions of dollars Sales and other operating revenues Income from equity investments EBITDA 2022. 2023 compared to the first quarter of 2022 due to higher margins. Millions of dollars Sales and other operating revenues EBITDA Heavy crude processing rates, thousands of barrels per day Market margins, dollars per barrel Light crude oil – 2-1-1 Light crude – Maya differential Total Maya 2-1-1 2022. See Note 12 to the Consolidated Financial Statements for additional information regarding our planned exit of the refining business. Millions of dollars Sales and other operating revenues EBITDA Millions of dollars Source (use) of cash: Operating activities Investing activities Financing activities energy costs. Millions of dollars Capital expenditures by segment: O&P–Americas O&P–EAI I&D Refining Technology Other Consolidated capital expenditures of continuing operations 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“Company,” “we,” “us,” “our” or similar words in this discussion, unless the context otherwise requires, we are referringused to refer to LyondellBasell Industries N.V. andtogether with its consolidated subsidiaries.Our portfolioglobal businesses demonstrated strong performance2023, margins in our O&P-Americas and O&P-EAI segments increased driven by lower ethane cost in the third quarterU.S., lower energy costs and moderately improving global demand. We increased global operating rates to align with the improvementmarket conditions. Steady demand for fuels continued to support margins in our I&D segmentIntermediates and continued strong resultsDerivatives and Refining segments.our O&P–EAI segment. Texas Gulf Coast production losses dueoperating activities. We remain committed to a disciplined approach to capital allocation. During the impactsfirst quarter of Hurricane Harvey on our operations2023, we reinvested $352 million in the thirdbusinesses through capital expenditures and we paid dividends of $389 million to shareholders and repurchased $70 million worth of our shares. In the first quarter of 2017 were partly offset by margin improvements and, in many cases, were similar to or less than production constraints in2023 we successfully started up the comparable periods of 2016.Significant items that affected our results during the third quarter and first nine months of 2017 relative to the third quarter and first nine months of 2016 include:Lower O&P–Americas results due to a decline in olefins margins, partly offset by higher polyethylene margins in the third quarter of 2017; and lower polyolefins margins in the first nine months of 2017, partly offset by increased olefins volumes;world's largest PO/TBA plant.Strong O&P–EAI results reflect higher polyolefins volumes in the third quarter of 2017, offset in part by declines in olefins 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; andImproved 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: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,March 2023, we announced our final investmentthe decision to buildexplore strategic options for our U.S. Gulf Coast-based ethylene oxide & derivatives (“EO&D”) business as it is not a world-scale PO/TBA plant in Texas withbusiness where we seek a capacityleading long-term position.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 $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019; andRepurchases of approximately 3 million and 10 million of our outstanding ordinary shares during the third quarter and first nine months of 2017, respectively. Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 8,516 $ 7,365 $ 25,349 $ 21,436 6,939 5,903 20,531 16,771 218 188 622 580 27 25 77 73 1,332 1,249 4,119 4,012 (94 ) (72 ) (396 ) (237 ) 5 4 15 13 114 19 173 104 81 81 240 289 380 326 1,154 1,104 1,058 955 2,997 3,077 (2 ) (2 ) (14 ) (3 ) $ 1,056 $ 953 $ 2,983 $ 3,074 Three Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues $ 10,247 $ 10,206 $ 13,157 Cost of sales 8,864 9,356 11,136 Impairment 252 — — Selling, general and administrative expenses 385 334 328 Research and development expenses 33 29 32 Operating income 713 487 1,661 Interest expense (116) (85) (74) Interest income 23 16 2 Other income (expense), net 5 (9) 19 Income (loss) from equity investments 17 (20) 29 Income from continuing operations before income taxes 642 389 1,637 Provision for income taxes 167 34 316 Income from continuing operations 475 355 1,321 Loss from discontinued operations, net of tax (1) (2) (1) Net income 474 353 1,320 Other comprehensive income (loss), net of tax – Financial derivatives 4 (5) 88 Defined benefit pension and other postretirement benefit plans 2 212 5 Foreign currency translations 59 232 (25) Total other comprehensive income, net of tax 65 439 68 Comprehensive income $ 539 $ 792 $ 1,388 increased by $1,151 million, or 16%,remained relatively unchanged in the thirdfirst quarter of 20172023 compared to the thirdfourth quarter of 2016 and2022. Lower volumes driven by $3,913lower demand resulted in a 2% decrease in revenues. Favorable foreign exchange impacts resulted in a 2% increase in revenues.18%22%, in the first nine monthsquarter of 20172023 compared to the first nine monthsquarter of 2016.in the third quarter and first nine monthswere lower for many of 2017 were higher across mostour products as sales prices generally correlate with crude oil prices, which on average, increased compareddecreased relative to the corresponding periods in 2016.first quarter of 2022. These higherlower prices led to increasesa 13% decrease in revenues of 9% and 15%, respectively. Higherrevenue. Lower volumes in our O&P–Americas, O&P-EAI and Refining segments, which were partly offsetdriven by lower I&D segment volumes, led to revenue increasesdemand resulted in the third quarter and first nine months of 2017 by 5% and 3%, respectively. Favorablea 7% decrease in revenues. Unfavorable foreign exchange impacts resulted in a 2% revenue increasedecrease in the third quarter of 2017.increaseddecreased by $1,036$492 million, or 18%, in the third quarter of 2017 compared to the third quarter of 2016 and by $3,760 million, or 22%5%, in the first nine monthsquarter of 20172023 compared to the fourth quarter of 2022 and by $2,272 million, or 20%, in the first quarter of 2023 compared to the first nine monthsquarter of 20162022. These decreases were primarily due to increases indriven by lower feedstock and energy costs.$83$226 million, or 46%, in the thirdfirst quarter of 20172023 compared to the thirdfourth quarter of 20162022. Operating income in our O&P-EAI, O&P-Americas, I&D, and Technology segments increased by $107$177 million, $154 million, $109 million, and $11 million, respectively. These increases were partially offset by decreases in our APS and Refining segments of $197 million and $35 million, respectively.nine monthsquarter of 20172023 compared to the first nine months of 2016.Operating income for the third quarter of 2017 increased relative to the third quarter of 2016 by $89 million and $66 million in our I&D and Refining segments, respectively. These favorable impacts were offset by a decline of $85 million2022. Operating income in our O&P–Americas segment.Operating income for the first nine months of 2017 increased relative to the first nine months of 2016&P-Americas, APS, I&D, O&P-EAI and Technology segments decreased by $182$383 million, $46$285 million, $148 million, $142 million and $58$32 million, respectively. These decreases were partially offset by an increase in our O&P–EAI, I&D and Refining segments. These favorable impacts were offset by declinessegment of $141 million and $45 million, respectively, in our O&P–Americas and Technology segments.“Segment Analysis”Segment Analysis section below.Interest Expense—Interest expense increased by $22 million in the third quarter of 2017 compared to the third quarter of 2016 and by $159 million in the first nine months of 2017 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 Net—Other income, net of $114 million in the third quarter of 2017 reflects an increase of $95 million over the prior year period largely due to a $108 million gain on the sale of our 27% interest in our Geosel joint venture, which was recognized by our O&P–EAI segment.Other income, net of $173 million in the first nine months of 2017 increased by $69 million relative to the same period in 2016. In the first nine months of 2017, we recognized the gain on the sale of our joint venture discussed above, a $31 million gain on the sale of our Lake Charles, Louisiana site, which was recognized by our O&P–Americas segment, and a $21 million non-cash gain in our O&P–EAI segment related 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—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 TaxTaxesthirdfirst quarter of 20172023 was 26.4%26.0% compared with 25.4%9.0% for the thirdfourth 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.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.2022. 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 monthsquarter of 20172023 was primarily attributable to fluctuations in uncertain tax positions of 18.3%, coupled with the first quarter 2023 goodwill impairment, for which there is no tax benefit, of 6.6%. These increases were partially offset by changes in valuation allowances (0.6%), changesforeign exchange gains or losses of 6.4%.pretaxNote 8 to the Consolidated Financial Statements.countries with varying statutory tax rates (0.4%), a decreasethe first quarter of 2023 compared to the fourth quarter of 2022, primarily due to the decreases in exempt income (0.4%),defined pension and prior year adjustments to our deferred tax liabilities (0.3%), partiallyother postretirement benefit plans and foreign currency translations gains, offset by an increase in U.S. domestic production activity deduction (-0.3%).We monitor income tax developments (including, for example, the U.S. tax reform proposals and the European Union’s state aid investigations) in countries where we conduct business. Recently, there has been an increase in attention, both in the U.K. and globally, to the tax practices of multinational companies, including proposals by the Organization for Economic Cooperation and Development with respect to base erosion and profit shifting. Such attention may result in legislative changes that could affect our tax rate. Management does not believe that recent changes in income tax laws will have a material impact on our Consolidated Financial Statements, although new or proposed changes to tax laws could affect our tax liabilities in the future. In October 2016, the U.S. Treasury issued final Section 385 debt-equity regulations that may impact our internal financings in future years. Pursuant to an Executive Order, the Treasury Department reviewed these regulations and recently concluded to partially retain the regulations pending potential enactment of U.S. tax reform, which is expected to make it possible for the regulations to be revoked.Comprehensive Income—net income. Comprehensive income increaseddecreased by $139 million in the third quarter of 2017 compared to the third quarter of 2016 and by $115$849 million in the first nine monthsquarter of 20172023 compared to the first nine months of 2016. The third quarter 2017 increase reflects higher net income in the third quarter of 2017 and2022, primarily due to the favorable impactsdecline in net income. The activities from the remaining components of financial derivative adjustments. The increase in the first nine months of 2017 reflects the favorable impacts of financial derivative adjustments and the net favorable impact of unrealized net changes in foreign currency translation adjustments, partially offset by lower net income.In the third quarter and first nine months of 2017, the cumulative effects of ourComprehensive income are discussed below.were losses of $100 million and $260 million, respectively. The euro strengthened against the U.S. dollar in the third quarter and first nine months of 2017 resulting in pre-tax losses of $98 million and $233 million, respectively, in the third quarter and first nine months of 2017 related toprimarily our cross-currency swaps. Pre-tax gains of $74 million and $232 million related to our cross-currency swaps were reclassification adjustments included in net income in the third quarter and first nine months of 2017, respectively. Unrealized pre-tax losses of $5 million and $23 million in the third quarter and first nine months of 2017, respectively, related to forward-starting interest rate swaps, were driven by increasesremained relatively unchanged in the first quarter of 2023 compared to the fourth quarter of 2022. Financial derivatives designated as cash flow hedges, primarily our forward-starting interest rate swaps, led to a decrease in Comprehensive income of $84 million in the first quarter of 2023 compared to the first quarter of 2022 due to periodic changes in the benchmark interest rates, combined with lower notional amounts outstanding during those periods.The predominant functionalthe first quarter of 2023.for our operations outsidetranslation gains in Comprehensive income decreased by $173 million in the first quarter of 2023 compared to the fourth quarter of 2022, primarily due to the weakening of the U.S. is the euro. Relativedollar relative to the U.S. dollar, the value of the euro, increased during the third quarter and first nine months of 2017 resulting in net gains as reflected in the Consolidated Statements of Comprehensive Income. These net gains include pre-tax losses of $87 million and $265 million in the third quarter and first nine months of 2017, respectively, which representoffset by the effective portion of our net investment hedges.“Other.”“Other”. For additional information related to our operating segments, as well as a reconciliation of EBITDA to its nearest GAAPgenerally accepted accounting principles (“GAAP”) measure, Income from continuing operations before income taxes, see Note 12Segment and Related Information, to our Consolidated Financial Statements.divided into fivemanaged through six reportable segments: O&P–Americas;&P-Americas, O&P–EAI;&P-EAI, I&D; Refining;&D, APS, Refining and Technology.below. Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 2,449 $ 2,342 $ 7,600 $ 6,668 3,152 2,634 9,184 7,933 2,077 1,805 6,241 5,276 1,670 1,330 4,736 3,574 98 102 325 363 (930 ) (848 ) (2,737 ) (2,378 ) $ 8,516 $ 7,365 $ 25,349 $ 21,436 $ 497 $ 582 $ 1,794 $ 1,935 460 447 1,410 1,228 329 240 868 822 10 (56 ) (81 ) (139 ) 36 35 125 170 — 1 3 (4 ) $ 1,332 $ 1,249 $ 4,119 $ 4,012 $ 105 $ 87 $ 330 $ 265 60 58 177 171 69 62 206 201 49 40 133 123 11 10 30 31 $ 294 $ 257 $ 876 $ 791 $ 8 $ 12 $ 33 $ 54 69 67 202 232 4 2 5 3 $ 81 $ 81 $ 240 $ 289 Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 6 $ 1 $ 41 $ 60 109 12 137 38 — — 1 1 (1 ) 6 1 7 — — (7 ) (2 ) $ 114 $ 19 $ 173 $ 104 $ 616 $ 682 $ 2,198 $ 2,314 698 584 1,926 1,669 402 304 1,080 1,027 58 (10 ) 53 (9 ) 47 45 155 201 — 1 (4 ) (6 ) $ 1,821 $ 1,606 $ 5,408 $ 5,196 Three Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues: O&P-Americas segment $ 2,808 $ 2,818 $ 3,734 O&P-EAI segment 2,892 2,523 3,926 I&D segment 2,682 2,562 3,339 APS segment 997 901 1,136 Refining segment 2,190 2,633 2,720 Technology segment 139 145 181 Other, including intersegment eliminations (1,461) (1,376) (1,879) Total $ 10,247 $ 10,206 $ 13,157 Operating income (loss): O&P-Americas segment $ 371 $ 217 $ 754 O&P-EAI segment 21 (156) 163 I&D segment 320 211 468 APS segment (247) (50) 38 Refining segment 186 221 148 Technology segment 61 50 93 Other, including intersegment eliminations 1 (6) (3) Total $ 713 $ 487 $ 1,661 Depreciation and amortization: O&P-Americas segment $ 144 $ 149 $ 144 O&P-EAI segment 48 35 47 I&D segment 110 87 81 APS segment 22 24 29 Refining segment 61 28 — Technology segment 11 11 10 Total $ 396 $ 334 $ 311 Three Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Income (loss) from equity investments: O&P-Americas segment $ 23 $ 17 $ 33 O&P-EAI segment 1 (29) 1 I&D segment (6) (8) (5) APS segment (1) — — Total $ 17 $ (20) $ 29 Other income (expense), net: O&P-Americas segment $ 3 $ 1 $ 8 O&P-EAI segment 7 2 3 I&D segment 2 1 2 APS segment — — 4 Refining segment (1) — — Technology segment 1 (2) — Other, including intersegment eliminations (7) (11) 2 Total $ 5 $ (9) $ 19 EBITDA: O&P-Americas segment $ 541 $ 384 $ 939 O&P-EAI segment 77 (148) 214 I&D segment 426 291 546 APS segment (226) (26) 71 Refining segment 246 249 148 Technology segment 73 59 103 Other, including intersegment eliminations (6) (17) (1) Total $ 1,131 $ 792 $ 2,020 Polyolefins–AmericasPolyolefin-Americas SegmentThirdEBITDA in the first quarter 2017 EBITDA decreased due to lower olefins margins, partly offset by higher polyethylene marginsof 2023 increased compared to the thirdfourth quarter of 2016.2022 driven by improvements in olefins and polyethylene margins. EBITDA fordecreased in the first nine monthsquarter of 2017 declined due2023 relative to lower polyolefins and olefins margins and higher fixed costs, partially offset by higher olefins volumes. EBITDA for the first nine monthsquarter 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.Production economicsWe 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 the industry have favoredboth feedstocks and products. Although prices of crude-based liquids and natural gas liquids (“NGLs”) in recent years. While ethane continuesare generally related 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 componentand natural gas prices, during specific periods the relationships among these materials and benchmarks may vary significantly. In the first quarter of heavy liquid economics than for ethane, which outpaced feedstock price increases. We produced approximately 85%2023, and 87% of our U.S. ethylene production from NGLs during the thirdfirst and fourth quarters of 2017 and 2016, respectively, and 87% and 88%, respectively, during2022, approximately 65% to 70% of the first nine monthsraw materials used in our North American crackers was ethane.&P–Americas&P-Americas segment including Income from equity investments, which is a component of EBITDA: Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 2,449 $ 2,342 $ 7,600 $ 6,668 8 12 33 54 616 682 2,198 2,314 RevenuesThree Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues $ 2,808 $ 2,818 $ 3,734 Income from equity investments 23 17 33 EBITDA 541 384 939 &P–Americas&P-Americas segment increased by $107 million, or 5%, in the third quarter of 2017 compared to the third quarter of 2016 and by $932 million, or 14%, in the first nine months of 2017 compared to the first nine months of 2016.Average sales prices for most products increased in the third quarter and first nine months of 2017, consistent with feedstock prices that are correlated with the price of crude oil, which on average increased relative to the third quarter and first nine months of 2016. These higher sales prices were responsible for increases in revenues of 2% and 12% in the third quarter and first nine months of 2017, respectively.Better product availability compared to the third quarter 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 impact of the increased cost of ethylene 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 subsidiaryremained relatively unchanged in the first quarter of 20162023 compared to the fourth quarter of 2022 and decreased by $926 million, or 25%, in the first quarter 2017 gain on sale of 2023 compared to the Lake Charles, Louisiana site alsofirst quarter of 2022.1% declinerevenue increase of 6% primarily driven by improving demand and lower industry supply due to outages.prior year. These decreases were partly offsetfourth quarter of 2022 and decreased by $398 million, or 42%, in the first quarter of 2023 compared to the first quarter of 2022.5% improvementdecrease in spreads resulting from increased industry supply and weak demand for durable goods.becausedriven by lower margins as a result of the higherlower average sales prices. Lower olefins volumesresults led to a 13% decrease in EBITDA due to lower margins driven by a decline in the first nine months 2017 discussed above.Olefins and Polyolefins–Europe, Asia, International SegmentOverview—Third quarter 2017 EBITDA was higher relative to the third quarteraverage sales price of 2016 due to the impacts of higher polyolefins volumes and favorable foreign exchange,ethylene partially offset by lower margins for olefinsfeedstock costs. Lower polypropylene results led to a 13% decrease in EBITDA driven by a decrease in margin as a result of lower spreads due to increased industry supply and polyethylene. lower demand.also improvedincreased in the first nine monthsquarter of 2017 over2023 compared to the corresponding period in 2016. This improvement was driven by higherfourth quarter of 2022 primarily due to improved olefins margins, increased polymer volumes, and the impact of higher volumes across most products, partly offset by lower polyethylene margins and lower income from our equity investments.nine monthsquarter 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 related2023 relative to the eliminationfirst quarter of an obligation associated with2022 primarily as a lease. result of lower polymers margins.nine monthsquarter of 2016, EBITDA reflected gains totaling $11 million from the sales of our joint venture in Japan2023 and idled assets in Australia recognized65% and 75% used in the third quarterfirst and a $21 million gain from the salefourth quarters of our wholly owned Argentine subsidiary.&P–EAI&P-EAI segment including Income from equity investments, which is a component of EBITDA: Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 3,152 $ 2,634 $ 9,184 $ 7,933 69 67 202 232 698 584 1,926 1,669 RevenuesThree Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues $ 2,892 $ 2,523 $ 3,926 (Loss) income from equity investments 1 (29) 1 EBITDA 77 (148) 214 $518$369 million, or 20%, in the third quarter of 2017 compared to the third quarter of 2016 and by $1,251 million, or 16%15%, in the first nine monthsquarter of 20172023 compared to the fourth quarter of 2022 and decreased by $1,034 million, or 26%, in the first quarter of 2023 compared to the first nine monthsquarter of 2016.Average2022.the third quarter and first nine months of 2017 were higher across most productsa 4% decrease in revenue as sales prices generally correlate with crude oil prices, which on average, increaseddecreased compared to the thirdfourth quarter andof 2022.nine monthsquarter of 2016. These higher2022—Lower average sales prices were responsible forresulted in a 16% decrease in revenue increases of 5% and 12%, respectively, in the third quarter and first nine months of 2017. Better product availabilityas sales prices generally correlate with crude oil prices, which on average, decreased 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 20172022. Lower volumes resulted in a revenue increasedecrease of 4% compared6% primarily due to the third quarterlower demand. Unfavorable foreign exchange impacts resulted in a revenue decrease of 2016.$114$225 million, or 20%, in the third quarter of 2017 compared to the third quarter of 2016, and by $257 million, or 15%152%, in the first nine monthsquarter of 20172023 compared to the fourth quarter of 2022 and decreased by $137 million, or 64%, in the first quarter of 2023 compared to the first nine months of 2016.In the third quarter of 2017,2022.across most products and favorable foreign exchange impactsdue to increased demand. Improved income from our equity investments led to increasesan increase in EBITDA of 8% and 4%, respectively. The combined impact of the third quarter 201720% mainly attributable to a gain on sale of our interest in Geosel and the absence of the third quarter 2016 gains related to the salesasset recognized by one of our joint ventureventures in Japan and idled assetsEurope. During the fourth quarter of 2022 we recognized last-in, first out (“LIFO”) inventory valuation charges of $56 million. The absence of similar charges in Australia alsothe first quarter of 2023 resulted in a 17%38% increase in EBITDA. These increases were partly offset by a 9% declinedueprimarily driven by decreased margins resulting from lower polyolefins spreads reflecting weak demand. Higher olefins results led to per pound decreases in olefins and polyethylene margins of 1 cent and 3 cents, respectively, relative to the prior year period.Ana 21% increase in olefin marginsEBITDA, which was primarily driven by higher margins resulting from lower feedstock costs which outpaced decreased ethylene and co-product sales prices was partly offset in the first nine monthsprices.2017 by a 4 cents per pound decrease in European polyethylene spreads due to a more balanced European market. This net increase resulted in a 6% improvement in EBITDA in the first nine 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 benefit 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.Higher EBITDA for our I&D segmentincreased in the thirdfirst quarter and first nine months of 2017 relative2023 compared to the thirdfourth quarter and first nine months of 2016 reflects stronger2022, primarily driven by improved margins for oxyfuels and related products. EBITDA decreased in the first quarter of 2023 compared to the first quarter of 2022, primarily driven by a decrease in margins for propylene oxide and derivatives and intermediate chemicals, products supported by industry outages and increased Asia demand, partially offset by the negative impacts of turnarounds at our Botlek, Netherlands, PO/TBAmargin improvements for oxyfuels 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. Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 2,077 $ 1,805 $ 6,241 $ 5,276 4 2 5 3 402 304 1,080 1,027 RevenuesThree Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues $ 2,682 $ 2,562 $ 3,339 Loss from equity investments (6) (8) (5) EBITDA 426 291 546 $272 million, or 15%, in the third quarter of 2017 compared to the third quarter of 2016 and by $965 million, or 18%, in the first nine months of 2017 compared to the first nine months of 2016.Higher average sales prices in the third quarter and first nine months of 2017 for most products, which reflect the impacts of higher feedstock and energy costs and recent industry supply constraints, were responsible for revenue increases of 14% and 19%, respectively. These increases were partially offset by a revenue decrease of 1% in each of the third quarter and first nine months of 2017, primarily due to lower sales volumes for oxyfuels and related products. This volume driven decline was largely due to two major turnarounds at our Botlek, Netherlands, and Channelview, Texas, facilities, and to a lesser extent, to the negative effect of Hurricane Harvey on the operations 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$120 million, or 5%, in the first nine monthsquarter of 20172023 compared to the fourth quarter of 2022 and decreased by $657 million, or 20%, in the first quarter of 2023 compared to the first nine monthsquarter of 2016.margins for intermediate chemicalsaverage sales prices resulted in a 2% increase in revenue. Favorable foreign exchange impacts resulted in a 2% increase in revenue. Sales volumes improved resulting in a 1% increase in revenue.PO and derivatives ledstyrene as a result of higher market supply. Sales volumes decreased resulting in a 9% reduction in revenue due to lower demand. Unfavorable foreign exchange impacts resulted in a 35% improvementrevenue decrease of 2%.thirdthe first quarter 2017 EBITDA relativeof 2023 compared to the thirdfourth quarter of 2016. PO2022 and derivative margins weredecreased by $120 million, or 22%, in the first quarter of 2023 compared to the first quarter of 2022.seasonal demand supported by industry outages, while intermediate chemicals margins benefited from increased sales prices due toas a result of higher blend premiums and a tight supply.gasoline market. During the fourth quarter of 2022 we recognized a $26 million LIFO inventory valuation charge. The impactabsence of lower volumes discussed abovea similar charge in the first quarter of 2023 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. Propylene oxide and derivatives results drove a 3% increase in EBITDA primarily as a result of increased volumes. Favorable foreign exchange impacts resulted in a 2% increase in EBITDA.nine monthsquarter of 2017, more than offsetting2023 relative to the fourth quarter of 2022 and the first quarter of 2022 primarily due to the recognition of a 4%non-cash goodwill impairment charge in the first quarter of 2023. See Note 12 to our Consolidated Financial Statements for additional information.Three Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues $ 997 $ 901 $ 1,136 Loss from equity investments (1) — — EBITDA (226) (26) 71 stemming fromas a result of a decrease in demand. The remaining change was primarily due to the impactrecognition of lower volumes discussed above.Refining SegmentOverview—EBITDA for our Refining segment benefited from higher crude processing ratesthe non-cash goodwill impairment charge in the thirdfirst quarter and first nine months of 2017 as the impacts2023, discussed above.corresponding periodsfirst quarter of 2016. Higher industry margins, which include2023 relative to the favorable impact relatedfourth quarter of 2022 primarily due to industry production outages associated with Hurricane Harveythe absence of a LIFO inventory valuation benefit recognized in the thirdfourth quarter of 2017, also benefited the 2017 periods but was2022 offset by higher maintenance-related fixed costsmargins. EBITDA increased in the first nine monthsquarter of 2017.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, 2017 2016 2017 2016 $ 1,670 $ 1,330 $ 4,736 $ 3,574 58 (10 ) 53 (9 ) 240 209 233 192 $ 16.71 $ 11.46 $ 13.94 $ 10.58 5.10 7.52 6.71 8.74 $ 21.81 $ 18.98 $ 20.65 $ 19.32 RevenuesThree Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues $ 2,190 $ 2,633 $ 2,720 EBITDA 246 249 148 Thousands of barrels per day Heavy crude oil processing rates 226 229 255 Market margins, dollars per barrel Brent - 2-1-1 $ 29.44 $ 31.11 $ 22.31 Brent - Maya differential 19.39 17.01 8.51 Total Maya 2-1-1 $ 48.83 $ 48.12 $ 30.82 increaseddecreased by $340$443 million, or 26%17%, in the thirdfirst quarter of 20172023 compared to the thirdfourth quarter of 20162022 and by $1,162$530 million, or 33%19%, in the first nine monthsquarter of 20172023 compared to the first nine monthsquarter of 2016.Higher2022.increasesdecrease of 23% and 29%, respectively, relative to the comparative periods in 20167% due to an average Brent crude oil price increasesdecrease of approximately $8 and $11$6.38 per barrelbarrel.the third quarter and first nine monthsa 14% decrease in revenue due to unplanned downtime. Lower product prices led to a revenue decrease of 2017, respectively. Heavy5% due to an average Brent crude oil processing rates increasedprice decrease of approximately $15.16 per barrel.15% and 21% in the third quarter and first nine months of 2017, respectively, leading to volume driven revenue increases of 3% and 4% during those same periods.EBITDA—EBITDA increased by $68$3 million, or 680%, in the third quarter of 2017 compared to the third quarter of 2016 and by $62 million, or 689%1%, in the first nine monthsquarter of 20172023 compared to the fourth quarter of 2022 and increased by $98 million, or 66%, in the first quarter of 2023 compared to the first nine months of 2016.Higher production accounted for approximately 20% of the improvement in EBITDA in the third quarter of 2017 and all2022.improvement in EBITDA for the first nine monthsfourth quarter of 2017. Crude oil processing rates in 2017 were higher than 2016, as the 2016 periods were negatively impacted by2022 we recognized a coker unit fire in the second quarter and planned turnaround activity onLIFO inventory benefit of $40 million. The absence of a crude unit and a coker unit processing trainsimilar benefit in the first quarter. Downtime at crude units reduced crude oil processing ratesquarter of 2023 resulted in both 2016 comparison periods.Refininga 16% decrease in EBITDA. Lower volumes as a result of unplanned downtime resulted in a 6% decrease in EBITDA. Increased margins which increasedprimarily driven by higher by-product crack spreads resulted in a 19% increase in EBITDA.industry outagesan increase in the Maya 2-1-1 market margin. EBITDA decreased 22% as a result of a decrease in volumes driven by unplanned downtime. Additionally, higher costs incurred related to Hurricane Harvey, accounted for approximately 80% ofour planned exit from the EBITDA improvement in the third quarter of 2017. Higher refining margins also benefited EBITDAbusiness in the first nine months of 2017; however, the benefit was offset by the higher maintenance-related fixed costs mentioned above.Technology SegmentOverview—EBITDA for the Technology segment was relatively unchanged in the third quarter of 2017 compared to the third quarter 2016. A decline2023 resulted in EBITDAa 47% decrease in the first nine months of 2017 reflects lower licensing revenues, partially offset by higher catalyst sales volumes,EBITDA compared to the first nine monthsquarter of 2016. Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 98 $ 102 $ 325 $ 363 47 45 155 201 Revenues—Three Months Ended March 31, December 31, March 31, Millions of dollars 2023 2022 2022 Sales and other operating revenues $ 139 $ 145 $ 181 EBITDA 73 59 103 $4$6 million, or 4%, in the thirdfirst quarter of 20172023 compared to the thirdfourth quarter of 2016,2022 and by $38 million, or 10%, in the first nine months of 2017 compared to the first nine months of 2016.Revenue decreases in the third quarter of 2% and 4%, respectively, were attributable to catalyst sales volumes and average sales prices that were lower compared to the third quarter of 2016. A decline in process licenses issued in prior periods also resulted in a revenue decrease of 3% in the third quarter of 2017. These decreases were offset in part by a revenue increase of 5% driven by foreign exchange impacts that, on average, were favorable in the third quarter of 2017.A decline 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% and 1%, respectively, related to increased catalyst sales volumes and higher average sales prices for catalysts.EBITDA—EBITDA increased by $2 million, or 4%, in the third quarter of 2017 compared to the third quarter of 2016, and decreased by $46$42 million, or 23%, in the first nine monthsquarter of 20172023 compared to the first nine monthsquarter of 2016.The benefit2022.higherfewer contracts reaching significant milestones drove a 1% decrease in revenue.which was reduced roughly one half by lowerand favorable foreign exchange impacts resulted in a 12% and 10% increase in EBITDA, respectively, compared to the fourth quarter of 2022. Lower licensing and services margins,revenues resulting from fewer contracts reaching significant milestones led to a 9% increase20% decrease in thirdEBITDA. The remaining change was due to the fourth quarter 2017 EBITDA. This net margin improvement was partly offset by a 5% volume-driven decrease resulting from lowerof 2022 LIFO inventory valuation charge.the third quarter of 2017 relative to the corresponding prior year period. Lower licensing and services margins were largely responsible for a 27%an EBITDA decrease of 26%. Unfavorable foreign exchange impacts resulted in the first nine monthsan EBITDA decrease of 2017. This decline was partly offset by a 4% improvement in EBITDA resulting from an increase in catalyst volumes during the first nine months3%. Nine Months Ended
September 30, 2017 2016 $ 3,724 $ 3,893 (1,254 ) (1,530 ) (2,191 ) (2,567 ) Three Months Ended
March 31,Millions of dollars 2023 2022 Cash provided by (used in): Operating activities $ 482 $ 1,502 Investing activities (371) (456) Financing activities (477) (713) Activities—Activities—Cash of $3,724 million generated provided by operating activities of $482 million in the first nine monthsquarter of 2017 reflects2023 primarily reflected earnings adjusted for non-cash items and $376 million of cash consumed by the main components of working capital–accountscapital—Accounts receivable, inventoriesInventories, and accountsAccounts payable. Higherand increased volumes in our O&P–EAI segment led to the&P-EAI, I&D and APS segments. The increase in accounts receivableInventories was primarily due to inventory build associated with the timing of the start-up of our PO/TBA plant in Houston, TX as well as planned and an increase in feedstock pricing in our O&P–EAI segment led to the increase in accounts payableunplanned outages.nine monthsquarter 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 20162022 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital. The non-cash items in 2016 included a $78 million gain related tosalefirst quarter 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.The2022, the main components of working capital used $22 million of cash driven primarily by an increase in Inventories and Accounts receivable, partially offset by an increase in Accounts payable. The increase in Inventories was primarily due to an increase in raw material costs coupled with an increase in inventory in anticipation of $226 million duringturnaround activity in the first nine monthsI&D segment. The increase in Accounts receivable was driven by higher revenues across several of 2016. Higher productour businesses primarily driven by higher volumes and higher average sales pricesprices. The increase in Accounts payable was primarily driven by increases in our Refining and O&P–Americas segment at the end&P-Americas segments as a result of the third quarter of 2016 combined with the impact of higher quarter-end sales volumes in our O&P–Americasincreased raw material 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.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 2017 and 2016, we invested $653 million and $683 million, respectively, in securities that are classified as Short-term investments. The majority of these investments are deemed available-for-sale; however, we also invested 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. In the first nine months of 2017 and 2016, we also invested $512 million and $500 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 of our available-for-sale securities and repurchase agreements of $499 million and $381 million, respectively,Capital expenditures in the first nine monthsquarter of 2017, and $6652023 totaled $352 million and $603compared to $446 million respectively, in the corresponding periodsfirst quarter of 2016.Joint Venture Activity—In September 2017, we sold2022. Approximately 45% and 40% of our 27% interest in our Geosel joint venture and received proceeds of $155 million.In April 2017, we increased our interestcapital expenditures in the entity that holdsfirst quarter of 2023 and 2022, respectively, was for profit-generating growth projects, primarily our equity interest in Al Waha Petrochemicals Ltd. from 83.79% to 100% by paying $21 million to exercise a call option to purchasePO/TBA plant, with 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.expenditures supporting sustaining maintenance. 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, 2017 2016 $ 546 $ 1,026 123 189 263 246 184 179 21 24 9 12 $ 1,146 $ 1,676 In the first nine months of 2017by segment.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$371 million in the first nine monthsquarter of 2017 is largely due to the completion of the 800 million pound ethylene expansion at our Corpus Christi, Texas facility2023 and 2022, respectively. Additionally, in the fourthfirst quarter of 2016.Financing Activities—In the first nine months of 20172023 and 2016,2022, we made payments of $866$70 million and $2,501$217 million respectively, to acquire approximately 10 million and 31 million, respectively, of ourrepurchase outstanding ordinary shares. We also made dividend payments totaling $1,060 million and $1,049 million duringshares, respectively.nine monthsquarter of 2017 and 2016, respectively. For additional information related to these share repurchases and dividend payments, see Note 10 to the Consolidated Financial Statements.We2022, we made net repayments of $178$169 million and received net proceeds of $177 million in the first nine months of 2017 and 2016, respectively, throughrelated to the issuance and repurchase of commercial paper instruments under our commercial paper program.March 2017,the first quarter of 2022, we issued $1,000 received a return of collateral of $51 million, of 3.5% guaranteed notes due 2027 and received net proceeds of $990 million. The proceeds from these notes, together with available cash, were used to repay $1,000 million of our outstanding 5% senior notes due 2019. We paid $65 million in premiums in connection with this prepayment.In March 2016, we issued €750 million of 1.875% guaranteed notes due 2022 and received net proceeds of $812 million. The net proceeds from these notes were used for general corporate purposes, including repurchases of LyondellBasell N.V.’s ordinary shares.Additional information related to these notes can be found in the positions held with our counterparties for certain forward-starting interest rate swaps. section belowin Note 5 toother cash requirements with our current available liquidity and cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. Debt repayment, and the Consolidated Financial Statements.Liquidity and Capital Resources—Aspurchase of September 30, 2017, we had $2,499 million of unrestrictedshares under our share repurchase authorization, may be funded from cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt, or a combination thereof.marketable securities classifiedshare repurchases. Barring any significant or unforeseen business challenges, mergers or acquisitions, over the long-term, we are targeting shareholder returns of 70% of free cash flow, defined as Short-term investmentsnet cash provided by operating activities less capital expenditures. We intend to continue to declare and held $561 millionpay quarterly dividends, with the goal of tri-party repurchase agreements classified as Prepaid expenses and other current assets. For additional information relatedincreasing the dividend over time, after giving consideration to our purchasescash 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 marketable securities see “Investing Activities” aboveour capital allocation strategy.Note 6 to the Consolidated Financial Statements.At September 30, 2017,Liquid Investmentsheld $584had Cash and cash equivalents totaling $1,790 million, of cashwhich includes $734 million in jurisdictions outside of the U.S., principally inthe majority of which is held within the European Union and the United Kingdom. There are currently no legal or economic restrictions that would materially would impede our transfers of cash. also had total unused availability under our credit facilities of $2,955$3,950 million at September 30, 2017,March 31, 2023, which included the following:2,1833,050 million under our $2,500$3,250 million revolving credit facility,Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program. 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,March 31, 2023, we had $317$200 million of outstanding commercial paper, net of discount, and no outstandingborrowings or letters of credit and no outstanding borrowings under thethis facility; and
In March 2017,
At September 30, 2017,the open market, through privately negotiated transactions or a combination thereof, in each case using cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt or proceeds from asset divestitures. Any repayment or redemption of our debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In connection with such repurchases or redemptions, we had total debt, including current maturities, of $8,915 million,may incur cash and $551 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.
non-cash charges, which could be material in the period in which they are incurred.
For additional information related to our credit facilities and Notes discussed above, see Note 5 to the Consolidated Financial Statements.
monthsquarter of 2017,2023, we have purchased approximately 100.8 million shares under these programsour share repurchase authorizations for approximately $845$74 million.
We may repay or redeem our debt, including purchases of our outstanding bonds
In July 2017, we announced our final investment decision to build a world-scale PO/TBA plant in Texas with a capacity of 1 billion pounds of PO and 2.2 billion pounds of TBA. The project is estimated to cost approximately $2.4 billion, with construction estimated to commence inChina on petrochemical markets during the second half of 2018. 2023.
We plana non-cash goodwill impairment of $252 million recognized in our APS segment. Refer to fundNote 12 to our ongoing working capital, capital expenditures, debt serviceConsolidated Financial Statements.
We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations.
We believe that our available liquidity and cash from operating activities provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due.
CURRENT BUSINESS OUTLOOK
Hurricane Harvey reduced inventories across the petrochemical industry and contributed to further delays in the startup of new U.S. capacity. As we look toward the remainder of 2017, we continue to see firm olefin and polyolefin markets as supply chains restock from the production lost during Hurricane Harvey. New polyethylene capacity is aligned with seasonal demand and supportive of improved demand 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.
March 31, 2023.
The following is
penalty in excess of $300,000.
being prepared to be lodged for public comment and entered by the court.
| 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 | |||||||||||
|
|
|
| |||||||||||||
| 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 Authorizations | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Authorizations | ||||||||||||||||||||||
| January 1 - January 31 | — | $ | — | — | 31,740,731 | |||||||||||||||||||||
| February 1 - February 28 | — | $ | — | — | 31,740,731 | |||||||||||||||||||||
| March 1 - March 31 | 846,500 | $ | 87.28 | 846,500 | 30,894,231 | |||||||||||||||||||||
| Total | 846,500 | $ | 87.28 | 846,500 | 30,894,231 | |||||||||||||||||||||
| Exhibit Number | Description | |||||||
| 31.1* | ||||||||
| XBRL Instance | ||||||||
| XBRL Schema Document | ||||||||
| XBRL Calculation Linkbase Document | ||||||||
| XBRL Definition Linkbase Document | ||||||||
| XBRL Labels Linkbase Document | ||||||||
| XBRL Presentation Linkbase Document | ||||||||
| 104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
| LYONDELLBASELL INDUSTRIES N.V. | ||||||||||
| Date: | April 28, 2023 |
| ||||||||
| Chief Accounting Officer and Investor Relations | ||||||||||
| (Principal | ||||||||||
56