LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of dollars)


														Three Months Ended June 30,						Six Months Ended June 30,
	Three Months Ended September 30,						Nine Months Ended September 30,							2020		2019		2020		2019
Millions of dollars	2019			2018			2019			2018
Net income	$	965		$	1,113		$	2,785		$	3,998		Net income	$	314	$	1,003	$	458	$	1,820
Other comprehensive income (loss), net of tax –													Other comprehensive income (loss), net of tax –
Financial derivatives	(112		)	51			(230		)	89			Financial derivatives	(26)		(68)		(364)		(118)
Unrealized gains on available-for-sale debt securities	—			—			1			—			Unrealized gains on available-for-sale debt securities	3		1		1		1
Defined benefit pension and other postretirement benefit plans	5			6			15			20			Defined benefit pension and other postretirement benefit plans	11		5		21		10
Foreign currency translations	(114		)	(8		)	(106		)	(63		)	Foreign currency translations	66		18		(133)		8
Total other comprehensive income (loss), net of tax	(221		)	49			(320		)	46			Total other comprehensive income (loss), net of tax	54		(44)		(475)		(99)
Comprehensive income	744			1,162			2,465			4,044
Dividends on A. Schulman Special Stock	(2		)	—			(5		)	—
Comprehensive income attributable to the Company shareholders	$	742		$	1,162		$	2,460		$	4,044
Comprehensive income (loss)													Comprehensive income (loss)	368		959		(17)		1,721
Dividends on redeemable non-controlling interests													Dividends on redeemable non-controlling interests	(1)		(1)		(3)		(3)

Comprehensive income (loss) attributable to the Company shareholders													Comprehensive income (loss) attributable to the Company shareholders	$	367	$	958	$	(20)	$	1,718

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

(In millions of dollars)


								June 30, 2020		December 31, 2019
Millions of dollars	September 30, 2019			December 31, 2018
ASSETS							ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	476		$	332		Cash and cash equivalents	$	2,552	$	858
Restricted cash	36			69			Restricted cash	26		30
Short-term investments	53			892			Short-term investments	651		196
Accounts receivable:							Accounts receivable:
Trade, net	3,331			3,355			Trade, net	2,454		2,981
Related parties	138			148			Related parties	134		121
Inventories	4,446			4,515			Inventories	3,768		4,588
Prepaid expenses and other current assets	1,150			1,255			Prepaid expenses and other current assets	892		736
Total current assets	9,630			10,566			Total current assets	10,477		9,510
Operating lease assets	1,510			—			Operating lease assets	1,425		1,468
Property, plant and equipment, at cost	20,528			18,701			Property, plant and equipment, at cost	22,019		21,260
Less: Accumulated depreciation	(6,859		)	(6,224		)	Less: Accumulated depreciation	(7,493)		(7,130)
Property, plant and equipment, net	13,669			12,477			Property, plant and equipment, net	14,526		14,130
Investments and long-term receivables:							Investments and long-term receivables:
Investment in PO joint ventures	486			469			Investment in PO joint ventures	523		504
Equity investments	1,609			1,611			Equity investments	1,559		1,602
Other investments and long-term receivables	24			23			Other investments and long-term receivables	23		22
Goodwill	1,848			1,814			Goodwill	1,830		1,891
Intangible assets, net	841			965			Intangible assets, net	756		869
Other assets	497			353			Other assets	422		439
Total assets	$	30,114		$	28,278		Total assets	$	31,541	$	30,435

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

(In millions of dollars, except shares and par value data)


								June 30, 2020		December 31, 2019
Millions of dollars, except shares and par value data	September 30, 2019			December 31, 2018
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY							LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Current liabilities:							Current liabilities:
Current maturities of long-term debt	$	4		$	5		Current maturities of long-term debt	$	3	$	3
Short-term debt	2,438			885			Short-term debt	659		445
Accounts payable:							Accounts payable:
Trade	2,687			2,560			Trade	1,790		2,516
Related parties	514			527			Related parties	404		412
Accrued liabilities	1,745			1,536			Accrued liabilities	1,579		1,822
Total current liabilities	7,388			5,513			Total current liabilities	4,435		5,198
Long-term debt	9,628			8,497			Long-term debt	13,674		11,614
Operating lease liabilities	1,257			—			Operating lease liabilities	1,160		1,216
Other liabilities	1,801			1,897			Other liabilities	2,968		2,213
Deferred income taxes	2,018			1,975			Deferred income taxes	1,811		2,015
Commitments and contingencies							Commitments and contingencies
Redeemable non-controlling interests	116			116			Redeemable non-controlling interests	116		116
Stockholders’ equity:
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 333,407,876 and 375,696,661 shares outstanding, respectively	22			22
Shareholders’ equity:							Shareholders’ equity:
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 333,829,804 and 333,476,883 shares outstanding, respectively							Ordinary shares, €0.04 par value, 1,275 million shares authorized, 333,829,804 and 333,476,883 shares outstanding, respectively	19		19
Additional paid-in capital	7,017			7,041			Additional paid-in capital	5,958		5,954
Retained earnings	8,430			6,763			Retained earnings	4,188		4,435
Accumulated other comprehensive loss	(1,683		)	(1,363		)	Accumulated other comprehensive loss	(2,259)		(1,784)
Treasury stock, at cost, 66,802,404 and 24,513,619 ordinary shares, respectively	(5,898		)	(2,206		)
Total Company share of stockholders’ equity	7,888			10,257
Treasury stock, at cost, 6,215,824 and 6,568,745 ordinary shares, respectively							Treasury stock, at cost, 6,215,824 and 6,568,745 ordinary shares, respectively	(548)		(580)
Total Company share of shareholders’ equity							Total Company share of shareholders’ equity	7,358		8,044
Non-controlling interests	18			23			Non-controlling interests	19		19
Total equity	7,906			10,280			Total equity	7,377		8,063
Total liabilities, redeemable non-controlling interests and equity	$	30,114		$	28,278		Total liabilities, redeemable non-controlling interests and equity	$	31,541	$	30,435

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)


								Six Months Ended June 30,
	Nine Months Ended September 30,							2020		2019
Millions of dollars	2019			2018
Cash flows from operating activities:							Cash flows from operating activities:
Net income	$	2,785		$	3,998		Net income	$	458	$	1,820
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	977			908			Depreciation and amortization	698		650
Amortization of debt-related costs	7			11			Amortization of debt-related costs	7		4

Share-based compensation	36			33			Share-based compensation	29		24
Equity investments –
Inventory valuation charges							Inventory valuation charges	323		—
Equity investments—							Equity investments—
Equity income	(179		)	(253		)	Equity income	(61)		(128)
Distributions of earnings, net of tax	159			200			Distributions of earnings, net of tax	81		149
Deferred income taxes	189			111			Deferred income taxes	(90)		110

Changes in assets and liabilities that provided (used) cash:							Changes in assets and liabilities that provided (used) cash:
Accounts receivable	(46		)	(128		)	Accounts receivable	487		(263)
Inventories	(12		)	(202		)	Inventories	463		(173)
Accounts payable	(7		)	257			Accounts payable	(485)		(102)
Other, net	(190		)	(761		)	Other, net	(76)		(248)
Net cash provided by operating activities	3,719			4,174			Net cash provided by operating activities	1,834		1,843
Cash flows from investing activities:							Cash flows from investing activities:
Expenditures for property, plant and equipment	(1,963		)	(1,407		)	Expenditures for property, plant and equipment	(1,248)		(1,221)
Acquisition of A. Schulman, net of cash acquired	—			(1,776		)

Purchases of available-for-sale debt securities	—			(50		)	Purchases of available-for-sale debt securities	(270)		—
Proceeds from sales and maturities of available-for-sale debt securities	511			410			Proceeds from sales and maturities of available-for-sale debt securities	—		511

Purchases of equity securities	—			(64		)	Purchases of equity securities	(184)		—
Proceeds from sales and maturities of equity securities	332			64
Proceeds from settlement of net investment hedges	—			872
Payments for settlement of net investment hedges	—			(850		)
Proceeds from sales of equity securities							Proceeds from sales of equity securities	1		332

Other, net	(90		)	(100		)	Other, net	(26)		(78)
Net cash used in investing activities	(1,210		)	(2,901		)	Net cash used in investing activities	(1,727)		(456)
Cash flows from financing activities:							Cash flows from financing activities:
Repurchases of Company ordinary shares	(3,752		)	(801		)	Repurchases of Company ordinary shares	(4)		(512)
Dividends paid - common stock	(1,111		)	(1,176		)	Dividends paid - common stock	(701)		(760)
Purchase of non-controlling interest	(63		)	—			Purchase of non-controlling interest	(30)		(63)
Issuance of short-term debt	2,500			—
Issuance of long-term debt	2,096			—			Issuance of long-term debt	2,492		—
Repayments of long-term debt	(2,000		)	(394		)	Repayments of long-term debt	(500)		(1,000)
Payments of debt issuance costs	(12		)	—			Payments of debt issuance costs	(18)		(4)
Net (repayments of) proceeds from commercial paper	(23		)	140
Issuance of short-term debt							Issuance of short-term debt	521		2,000
Repayments of short-term debt							Repayments of short-term debt	(500)		—
Net proceeds from (repayments of) commercial paper							Net proceeds from (repayments of) commercial paper	212		(128)
Payments on forward-starting interest rate swaps that include financing elements							Payments on forward-starting interest rate swaps that include financing elements	(238)		—
Proceeds from settlement of cash flow hedges							Proceeds from settlement of cash flow hedges	346		—
Other, net	(17		)	(11		)	Other, net	(12)		(15)
Net cash used in financing activities	(2,382		)	(2,242		)
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	1,568		(482)
Effect of exchange rate changes on cash	(16		)	(27		)	Effect of exchange rate changes on cash	15		2
Increase (decrease) in cash and cash equivalents and restricted cash	111			(996		)
Increase in cash and cash equivalents and restricted cash							Increase in cash and cash equivalents and restricted cash	1,690		907
Cash and cash equivalents and restricted cash at beginning of period	401			1,528			Cash and cash equivalents and restricted cash at beginning of period	888		401
Cash and cash equivalents and restricted cash at end of period	$	512		$	532		Cash and cash equivalents and restricted cash at end of period	$	2,578	$	1,308

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~SHAREHOLDERS’ EQUITY

(In millions of dollars)

Ordinary Shares
Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Company
Share of
Stockholders’
Equity

Non-
Controlling
Interests
Millions of dollars Issued Treasury
Balance, June 30, 2019 $ 22
$ (2,663 ) $ 7,006
$ 7,818
$ (1,462 ) $ 10,721
$ 22
Net income —
—
—
965
—
965
—
Other comprehensive loss —
—
—
—
(221 ) (221 ) —
Share-based compensation —
5
11
—
—
16
—
Dividends - common stock ($1.05 per share) —
—
—
(351 ) —
(351 ) —
Dividends - A. Schulman Special Stock ($15.00 per share) —
—
—
(2 ) —
(2 ) —
Repurchases of Company ordinary shares —
(3,240 ) —
—
—
(3,240 ) —
Purchase of non-controlling interest —
—
—
—
—
—
(4 )
Balance, September 30, 2019 $ 22
$ (5,898 ) $ 7,017
$ 8,430
$ (1,683 ) $ 7,888
$ 18


	Ordinary Shares						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
	Issued		Treasury
Balance, March 31, 2020	$	19	$	(559)	$	5,950	$	4,227	$	(2,313)	$	7,324	$	19
Net income	—		—		—		314		—		314		—
Other comprehensive income	—		—		—		—		54		54		—
Share-based compensation	—		11		8		(2)		—		17		—
Dividends - common stock ($1.05 per share)	—		—		—		(350)		—		(350)		—
Dividends - redeemable non-controlling interests ($15.00 per share)	—		—		—		(1)		—		(1)		—




Balance, June 30, 2020	$	19	$	(548)	$	5,958	$	4,188	$	(2,259)	$	7,358	$	19

Ordinary Shares
Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Company
Share of
Stockholders’
Equity

Non-
Controlling
Interests
Millions of dollars Issued Treasury
Balance, June 30, 2018 $ 31
$ (16,200 ) $ 10,190
$ 17,939
$ (1,358 ) $ 10,602
$ 1
Net income —
—
—
1,113
—
1,113
—
Other comprehensive income —
—
—
—
49
49
—
Share-based compensation —
4
8
—
—
12
—
Dividends - common stock ($1.00 per share) —
—
—
(389 ) —
(389 ) —
Repurchases of Company ordinary shares —
(343 ) —
—
—
(343 ) —
Cancellation of treasury shares (9 ) 15,384
(3,165 ) (12,210 ) —
—
—
Acquisition of A. Schulman Inc. —
—
—
—
—
—
24
Balance, September 30, 2018 $ 22
$ (1,155 ) $ 7,033
$ 6,453
$ (1,309 ) $ 11,044
$ 25


	Ordinary Shares						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
	Issued		Treasury
Balance, March 31, 2019	$	22	$	(2,668)	$	6,996	$	7,206	$	(1,418)	$	10,138	$	22
Net income	—		—		—		1,003		—		1,003		—
Other comprehensive loss	—		—		—		—		(44)		(44)		—
Share-based compensation	—		5		10		(2)		—		13		—
Dividends - common stock ($1.05 per share)	—		—		—		(388)		—		(388)		—
Dividends - redeemable non-controlling interests ($15.00 per share)	—		—		—		(1)		—		(1)		—



Balance, June 30, 2019	$	22	$	(2,663)	$	7,006	$	7,818	$	(1,462)	$	10,721	$	22

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~SHAREHOLDERS’ EQUITY

(In millions of dollars)


																						Ordinary Shares						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity				Non- Controlling Interests
	Ordinary Shares					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Company Share of Stockholders’ Equity			Non- Controlling Interests				Issued		Treasury
Millions of dollars	Issued		Treasury
Balance, December 31, 2018	$	22	$	(2,206	)	$	7,041		$	6,763		$	(1,363	)	$	10,257		$	23
Balance, December 31, 2019																					Balance, December 31, 2019	$	19	$	(580)	$	5,954									$	4,435		$	(1,784)	$	8,044	$	19
Net income	—		—			—			2,785			—			2,785			—			Net income	—		—		—		458		—		458		—
Other comprehensive loss	—		—			—			—			(320		)	(320		)	—			Other comprehensive loss	—		—		—		—		(475)		(475)		—
Share-based compensation	—		36			23			(2		)	—			57			—			Share-based compensation	—		36		(3)		(1)		—		32		—
Dividends - common stock ($3.10 per share)	—		—			—			(1,111		)	—			(1,111		)	—
Dividends - A. Schulman Special Stock ($45.00 per share)	—		—			—			(5		)	—			(5		)	—
Dividends - common stock ($2.10 per share)																					Dividends - common stock ($2.10 per share)	—		—		—		(701)		—		(701)		—
Dividends - redeemable non-controlling interests ($30.00 per share)																					Dividends - redeemable non-controlling interests ($30.00 per share)	—		—		—		(3)		—		(3)		—
Repurchases of Company ordinary shares	—		(3,728		)	—			—			—			(3,728		)	—			Repurchases of Company ordinary shares	—		(4)		—		—		—		(4)		—
Purchase of non-controlling interest	—		—			(47		)	—			—			(47		)	(5		)	Purchase of non-controlling interest	—		—		7		—		—		7		—
Balance, September 30, 2019	$	22	$	(5,898	)	$	7,017		$	8,430		$	(1,683	)	$	7,888		$	18

Balance, June 30, 2020																					Balance, June 30, 2020	$	19	$	(548)	$	5,958	$	4,188	$	(2,259)	$	7,358	$	19

Ordinary Shares
Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Company
Share of
Stockholders’
Equity

Non-
Controlling
Interests
Millions of dollars Issued Treasury
Balance, December 31, 2017 $ 31
$ (15,749 ) $ 10,206
$ 15,746
$ (1,285 ) $ 8,949
$ 1
Adoption of accounting standards —
—
—
95
(70 ) 25
—
Net income —
—
—
3,998
—
3,998
—
Other comprehensive income —
—
—
—
46
46
—
Share-based compensation —
31
20
—
—
51
—
Dividends - common stock ($3.00 per share) —
—
—
(1,176 ) —
(1,176 ) —
Repurchases of Company ordinary shares —
(821 ) —
—
—
(821 ) —
Purchase of non-controlling interest —
—
(28 ) —
—
(28 ) —
Cancellation of treasury shares (9 ) 15,384
(3,165 ) (12,210 ) —
—
—
Acquisition of A. Schulman Inc. —
—
—
—
—
—
24
Balance, September 30, 2018 $ 22
$ (1,155 ) $ 7,033
$ 6,453
$ (1,309 ) $ 11,044
$ 25


	Ordinary Shares						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
	Issued		Treasury
Balance, December 31, 2018	$	22	$	(2,206)	$	7,041	$	6,763	$	(1,363)	$	10,257	$	23
Net income	—		—		—		1,820		—		1,820		—
Other comprehensive loss	—		—		—		—		(99)		(99)		—
Share-based compensation	—		31		12		(2)		—		41		—
Dividends - common stock ($2.05 per share)	—		—		—		(760)		—		(760)		—
Dividends - redeemable non-controlling interests ($30.00 per share)	—		—		—		(3)		—		(3)		—
Repurchases of Company ordinary shares	—		(488)		—		—		—		(488)		—
Purchase of non-controlling interest	—		—		(47)		—		—		(47)		(1)


Balance, June 30, 2019	$	22	$	(2,663)	$	7,006	$	7,818	$	(1,462)	$	10,721	$	22

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

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

LyondellBasell N.V. is a worldwide manufacturer of chemicals and polymers, a refiner of crude oil, a significant producer of gasoline blending components and a developer and licensor of technologies for the production of polymers. ~~Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell N.V.~~

The accompanying unaudited Consolidated Financial Statements ~~are unaudited and~~ have been prepared from the books and records of LyondellBasell N.V. in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. In our opinion, all adjustments, including normal recurring adjustments, considered necessary for a fair statement 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, ~~2018.~~2019.

Events surrounding the ongoing novel strain of coronavirus, causing a pandemic referred to as COVID-19, continue to evolve and impact global markets and demand for our products. During the first six months of 2020, we recognized lower of cost or market inventory valuation charges as disclosed in Note 5 to our Consolidated Financial Statements. We also assessed accounting matters that generally require consideration of forecasted financial information based on the information reasonably available to us and the uncertain future impacts of COVID-19 and the related economic impacts. We will continue to assess the potential financial statement impacts of COVID-19 and commodity price volatility throughout the duration of the pandemic in accordance with our corporate accounting policies.

The extent of the impact of the pandemic on our operational and financial performance will depend on future developments which are uncertain and cannot be predicted. An extended period of economic disruption could have a material adverse impact on our business, results of operations, access to sources of liquidity and financial condition.

2. Accounting and Reporting Changes

Recently Adopted Guidance

The following table provides a brief description of recently adopted Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). ~~With the exception of the new lease standard, the~~The adoption of the new standards listed below in the first quarter of 2020 did not have a material impact on our Consolidated Financial Statements.

Standard

Description

~~Standard~~

~~Description~~

ASU ~~2016-02,~~2020-04, ~~Leases~~ ~~(including subsequent amendments)~~Facilitation of the Effects of Relief of Reference Rate Reform on Financial Reporting

This guidance establishes a right-of-use model that requires a lessee to recognize a right-of-use asset and lease liability on the balance sheet for all leases with a term greater than 12 months. Leases are classified as finance or operating, with classification affecting the timing and classification of expense recognition. This guidance also enhances disclosure requirements.

This guidance is effective for public entities for annual and interim periods beginning after December 15, 2018. We adopted the new standard in the first quarter of 2019. See Note 8 to the Consolidated Financial Statements for the disclosures related to the adoption of this guidance.

~~ASU 2016-13,~~ ~~Measurement of Credit Losses on Financial Instruments~~ ~~(including subsequent amendments)~~

This guidance ~~requires financial assets measured at amortized cost basis~~provides optional expedients and exceptions for applying generally accepted accounting principles to ~~be presented at the net amount~~contracts, hedging relationships and other transactions that reference London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be ~~collected, resulting in the use~~discontinued because of ~~a current expected credit loss (“CECL”) model when measuring an impairment of financial instruments. Credit losses related~~reference rate reform, if certain criteria are met. The expedients and exceptions provided by this guidance are available from January 1, 2020, prospectively, and do not apply to available-for-sale securities should be recorded in the consolidated income statement through an allowance for credit losses. Estimated credit losses utilizing the CECL model are based on historical experience, current conditionscontract modifications made and forecasts that affect collectability. This ASU also modifies the impairment model for available-for-sale debt securities by eliminating the concept of “other than temporary” as well as providing a simplified accounting model for purchased financial assets with credit deterioration since their origination.

This guidance is effective for public entities for annual and interim periods beginninghedging relationships entered into or evaluated after December ~~15, 2019. Our early~~31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The adoption of ~~this~~the guidance ~~including~~enables us to continue hedge accounting for the ~~subsequent amendments, in~~relevant designated hedges and is expected to ease the ~~first quarter of 2019 did not have a material impact on our Consolidated Financial Statements.~~accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Standard

Description

~~Standard~~

~~Description~~

ASU ~~2018-09,~~2020-03, Codification Improvements to Financial Instruments

This guidance makes ~~minor improvements in various subtopics.~~

~~Some of~~narrow-scope changes that are intended to improve the guidance on financial instruments and current expected credit loss (“CECL”). We adopted the guidance related to CECL and other amendments within the ASU do not require transition and are effective upon issuance. However, many of the amendments do have transition guidance with effective dates for annual periods beginning after December 15, 2018 for public entities. Our early adoption of this guidance in the first quarter of 2019 did not haveon a ~~material impact on our Consolidated Financial Statements.~~

modified retrospective basis.

ASU ~~2019-04,~~2019-12, ~~Codification Improvements to Credit Losses on Financial Instruments; Derivatives and Hedging; and Financial Instruments~~Simplifying the Accounting for Income Taxes

This guidance ~~makes minor clarifications~~enhances and ~~minor improvements to certain~~simplifies various aspects of income tax accounting by removing exceptions for recognizing deferred taxes for changes from a subsidiary to an equity method investment and vice versa, performing intraperiod allocation and calculating income taxes in interim periods. The new guidance also reduces complexity in certain areas, including the tax basis step-up in goodwill in a transaction that is not a business combination and interim period accounting for ~~credit losses, hedging activities and financial instruments.~~

~~This guidance is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. Our~~enacted changes in tax law. We early ~~adoption of this guidance~~adopted the amendments applicable to us on a ~~modified-retrospective basis in the second quarter of 2019 did not have a material impact on our Consolidated Financial Statements.~~

~~Accounting Guidance Issued But Not Adopted as of September 30, 2019~~

~~We are currently assessing the impact of the standards listed below on our Consolidated Financial Statements.~~

prospective basis.

~~Standard~~

ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

~~Description~~This guidance requires a customer in a hosted, cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized costs are amortized over the term of the hosting arrangement when the recognized asset is ready for its intended use.

ASU 2018-13, Disclosure Framework - Change to the Disclosure Requirements for Fair Value Measurement

This guidance eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. It removes transfer disclosures between Level 1 and Level 2 of the fair value hierarchy, and adds disclosures for the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.

Accounting Guidance Issued But Not Adopted as of June 30, 2020

We are currently assessing the impact of the standard listed below on our Consolidated Financial Statements.

~~This guidance will be effective for all entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted.~~

Standard

Description

ASU 2018-14, Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

This guidance changes disclosure requirements for employers that sponsor defined benefit pension and/or other postretirement benefit plans. It eliminates the requirement of certain disclosures that are no longer considered cost ~~beneficial; however, it~~beneficial and adds more pertinent disclosures.

This guidance will be effective for public entities for annual periods ending after December 15, 2020. Early adoption is permitted.

~~ASU 2018-15,~~ ~~Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract~~

This guidance requires a customer in a hosted, cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized costs are amortized over the term of the hosting arrangement when the recognized asset is ready for its intended use.

~~This guidance will be effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted.~~

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~~LYONDELLBASELL INDUSTRIES N.V.~~

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

3. ~~Business Combination~~

On ~~August 21, 2018~~, we acquired all of the outstanding common stock of A. Schulman Inc., a Delaware corporation for an adjusted aggregate purchase price of $1,933 million. The purchase price was adjusted during the third quarter of 2019 as a result of the resolution of certain contingencies.

The purchase price was allocated based on the fair value of the acquired assets and liabilities, redeemable non-controlling interests and non-controlling interests assumed. During 2019, we made certain measurement period adjustments resulting in a $86 million increase of goodwill with corresponding adjustments to property, plant and equipment, contingencies and deferred taxes.

4. Revenues

Contract Balances—Contract liabilities were ~~$143~~$147 million and ~~$138~~$124 million at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. Revenue recognized in ~~the~~each reporting period, included in the contract liability balance at the beginning of the period, was immaterial.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Disaggregation of Revenues—The following table presents our revenues disaggregated by key ~~products for the three and nine months ended September 30, 2019 and 2018, respectively:~~products:

Three Months Ended September 30, Nine Months Ended September 30,
Millions of dollars 2019 2018 2019 2018
Sales and other operating revenues:
Polyethylene $ 1,509
$ 1,830
$ 4,713
$ 5,765
Polypropylene 1,251
1,414
3,883
4,405
Olefins and co-products 709
1,021
2,202
2,987
Oxyfuels and related products 837
934
2,298
2,670
Intermediate chemicals 655
905
2,000
2,756
Propylene oxide and derivatives 481
603
1,498
1,828
Compounding and solutions 991
797
3,193
1,990
Advanced polymers 194
240
588
718
Refined products 1,952
2,236
5,706
6,536
Other 143
175
467
473
Total $ 8,722
$ 10,155
$ 26,548
$ 30,128

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues:
Olefins and co-products	$	460	$	745	$	1,127	$	1,493
Polyethylene	1,277		1,538		2,736		3,204
Polypropylene	969		1,317		2,070		2,632
Propylene oxide and derivatives	332		489		796		1,017
Oxyfuels and related products	389		797		1,096		1,461
Intermediate chemicals	404		705		948		1,345
Compounding and solutions	549		1,062		1,461		2,202
Advanced polymers	151		196		332		394
Refined products	855		2,011		2,191		3,754
Other	160		188		283		324
Total	$	5,546	$	9,048	$	13,040	$	17,826

The following table presents our revenues disaggregated by geography, based upon the location of the ~~customer, for the three and nine months ended September 30, 2019 and 2018, respectively:~~customer:


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues:
United States	$	2,417	$	4,250	$	5,604	$	8,143
Germany	398		710		1,039		1,441
Italy	259		385		594		772
Mexico	203		431		583		959
China	302		298		545		596
Japan	143		255		478		458
France	161		363		431		725
Poland	188		252		412		521
The Netherlands	153		270		365		522
Other	1,322		1,834		2,989		3,689
Total	$	5,546	$	9,048	$	13,040	$	17,826

Three Months Ended September 30, Nine Months Ended September 30,
Millions of dollars 2019 2018 2019 2018
Sales and other operating revenues:
United States $ 4,190
$ 5,011
$ 12,333
$ 14,528
Germany 671
741
2,112
2,326
Mexico 390
627
1,349
1,705
Italy 361
376
1,133
1,203
France 324
371
1,049
1,118
China 299
289
895
850
The Netherlands 226
259
748
835
Japan 282
297
740
952
Other 1,979
2,184
6,189
6,611
Total $ 8,722
$ 10,155
$ 26,548
$ 30,128

5.4. Accounts Receivable

Our ~~allowance for doubtful~~ accounts receivable ~~which is~~are reflected in the Consolidated Balance Sheets ~~as a reduction~~net of ~~accounts receivable, was $15~~allowance for credit losses of $14 million and $16 million at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

5. Inventories

Inventories consisted of the following components:


Millions of dollars	June 30, 2020		December 31, 2019
Finished goods	$	2,368	$	3,083
Work-in-process	139		130
Raw materials and supplies	1,261		1,375
Total inventories	$	3,768	$	4,588

Millions of dollars September 30,
2019 December 31,
2018
Finished goods $ 3,008
$ 3,066
Work-in-process 177
138
Raw materials and supplies 1,261
1,311
Total inventories $ 4,446
$ 4,515
Our inventories are stated at the lower of cost or market (“LCM”). Cost is determined using the last-in, first-out ("LIFO") inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may be higher than the market value, and as a result we adjust the value of inventory to market value. Fluctuations in the prices of crude oil, natural gas and correlated products from period to period may result in the recognition of charges to adjust the value of inventory to the lower of cost or market in periods of falling prices and the reversal of those charges in subsequent interim periods, within the fiscal year, as market prices recover.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

7.6. Debt

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


Millions of dollars	June 30, 2020		December 31, 2019
Senior Notes due 2021, $1,000 million, 6.0% ($3 million of debt issuance cost)	$	1,012	$	998
Senior Notes due 2024, $1,000 million, 5.75% ($5 million of debt issuance cost)	995		995
Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost)	973		973
Term Loan due 2022, $4,000 million ($2 million of debt issuance costs)	1,948		1,950

Guaranteed Notes due 2022, €750 million, 1.875% ($1 million of discount; $2 million of debt issuance cost)	839		841
Guaranteed Notes due 2023, $750 million, 4.0% ($4 million of discount; $2 million of debt issuance cost)	744		744
Guaranteed Notes due 2025, $500 million, 2.875% ($4 million of debt issuance cost)	496		—
Guaranteed Notes due 2026, €500 million, 0.875% ($2 million of discount; $3 million of debt issuance cost)	556		555
Guaranteed Notes due 2027, $1,000 million, 3.5% ($7 million of discount; $6 million of debt issuance cost)	1,097		1,023
Guaranteed Notes due 2027, $300 million, 8.1%	300		300
Guaranteed Notes due 2030, $500 million, 3.375% ($1 million of discount; $4 million of debt issuance cost)	495		—
Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $3 million of debt issuance cost)	551		552
Guaranteed Notes due 2043, $750 million, 5.25% ($20 million of discount; $7 million of debt issuance cost)	723		723
Guaranteed Notes due 2044, $1,000 million, 4.875% ($10 million of discount; $9 million of debt issuance cost)	981		980
Guaranteed Notes due 2049, $1,000 million, 4.2% ($15 million of discount; $10 million of debt issuance cost)	975		975
Guaranteed Notes due 2050, $1,000 million, 4.2% ($6 million of discount; $10 million of debt issuance cost)	984		—
Other	8		8
Total	13,677		11,617
Less current maturities	(3)		(3)
Long-term debt	$	13,674	$	11,614

Millions of dollars September 30,
2019 December 31,
2018
Senior Notes due 2019, $1,000 million, 5.0% $ —
$ 988
Senior Notes due 2021, $1,000 million, 6.0% ($4 million of debt issuance cost) 999
975
Senior Notes due 2024, $1,000 million, 5.75% ($6 million of debt issuance cost) 994
993
Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost) 973
973
Term Loan due 2020, $2,000 million 974
—
Term Loan due 2022, $4,000 million —
—
Guaranteed Notes due 2022, €750 million, 1.875% ($1 million of discount; $2 million of debt issuance cost) 817
855
Guaranteed Notes due 2023, $750 million, 4.0% ($4 million of discount; $3 million of debt issuance cost) 743
742
Guaranteed Notes due 2026, €500 million, 0.875% ($2 million of discount; $4 million of debt issuance cost) 539
—
Guaranteed Notes due 2027, $1,000 million, 3.5% ($8 million of discount; $6 million of debt issuance cost) 1,043
964
Guaranteed Notes due 2027, $300 million, 8.1% 300
300
Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $3 million of debt issuance cost) 536
—
Guaranteed Notes due 2043, $750 million, 5.25% ($20 million of discount; $7 million of debt issuance cost) 723
722
Guaranteed Notes due 2044, $1,000 million, 4.875% ($11 million of discount; $9 million of debt issuance cost) 980
980
Other 11
10
Total 9,632
8,502
Less current maturities (4 ) (5 )
Long-term debt $ 9,628
$ 8,497

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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


		Gains (Losses)																			Cumulative Fair Value Hedging Adjustments Included in Carrying Amount of Debt
	Inception Year	Three Months Ended June 30,									Six Months Ended June 30,									June 30,	December 31,
Millions of dollars				2020			2019			2020			2019			2020			2019
Senior Notes due 2019, 5.0%	2014	$	—		$	—		$	—		$	(11)		$	—		$	—
Senior Notes due 2021, 6.0%	2016	2			(13)			(14)			(20)			(15)			(1)
Guaranteed Notes due 2027, 3.5%	2017	7			(35)			(73)			(57)			(110)			(37)
Guaranteed Notes due 2022, 1.875%	2018	—			(1)			1			(1)			(1)			(2)
Guaranteed Notes due 2026, 0.875%	2020	(1)			—			(1)			—			(1)			—
Total		$	8		$	(49)		$	(87)		$	(89)		$	(127)		$	(40)

Gains (Losses)
Cumulative Fair Value
Hedging Adjustments Included
in Carrying Amount of Debt

Inception
Year
Three Months Ended
September 30, Nine Months Ended
September 30, September 30, December 31,
Millions of dollars 2019 2018 2019 2018 2019 2018
Senior Notes due 2019, 5.0% 2014 $ —
$ (7 ) $ (11 ) $ (16 ) $ —
$ 11
Senior Notes due 2021, 6.0% 2016 (3 ) 2
(23 ) 22
(3 ) 20
Guaranteed Notes due 2027, 3.5% 2017 (21 ) 12
(78 ) 54
(57 ) 21
Guaranteed Notes due 2022, 1.875% 2018 —
1
(1 ) —
(2 ) (1 )
Total
$ (24 ) $ 8
$ (113 ) $ 60
$ (62 ) $ 51

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

~~The cumulative fair value hedging adjustments remaining at December 31, 2018 associated with our Senior Notes due 2019 included $7 million for hedges that were discontinued.~~ Fair value adjustments are recognized in Interest expense in the Consolidated Statements of Income.

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

Millions of dollars September 30,
2019 December 31,
2018
Term Loan due 2020, $2,000 million $ 1,026
$ —
Senior Revolving Credit Facility, $2,500 million —
—
U.S. Receivables Facility, $900 million 500
—
Commercial paper 786
809
Precious metal financings 124
71
Other 2
5
Total short-term debt $ 2,438
$ 885


Millions of dollars	June 30, 2020		December 31, 2019

U.S. Receivables Facility	$	—	$	—
Commercial paper	473		262
Precious metal financings	159		181
Other	27		2
Total Short-term debt	$	659	$	445

Long-Term Debt

Senior Revolving Credit Facility—Our $2,500 million Senior Revolving Credit Facility which expires in June 2022 may be used for dollar and euro denominated borrowings, has a $500 million sublimit for dollar and euro denominated letters of credit, a $1,000 million uncommitted accordion feature, and supports our commercial paper program. Borrowings under the facility bear interest at either a base rate or LIBOR rate, plus an applicable margin. Additional fees are incurred for the average daily unused commitments. The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00, or less, for the period covering the most recent four quarters. In March 2020, we borrowed $500 million from this facility, which we subsequently repaid in April 2020. At June 30, 2020, we had 0 borrowings or letters of credit outstanding and $2,017 million of unused availability under this facility.

Guaranteed Notes due ~~2026~~2025, 2030 and ~~2031~~2050—In ~~September 2019,~~April 2020, LYB International Finance ~~II B.V.~~III, LLC (“LYB Finance ~~II”~~III”), a wholly owned finance subsidiary of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X, issued ~~€500~~$500 million of ~~0.875%~~2.875% guaranteed notes due ~~2026~~2025 (the ~~“2026~~“2025 Notes”) at a discounted price of ~~99.642%~~99.911%, ~~and €500~~$500 million of ~~1.625%~~3.375% guaranteed notes due ~~2031~~2030 (the ~~“2031~~“2030 Notes”) at a discounted price of ~~98.924%~~99.813% and $1,000 million of 4.2% guaranteed notes due 2050 (the “2050 Notes”) at a discounted price of 99.373%. ~~In September 2019, we~~Net proceeds from the sale of the notes totaled $1,974 million.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

We used the net proceeds from the sale of the notes for general corporate purposes, including to ~~repay $1,000 million of indebtedness outstanding under the $4,000 million three-year Term Loan due 2022~~increase our liquidity and ~~a portion of borrowings from our commercial paper program.~~manage short-term debt maturities.

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~~III’s and ~~future unsecured indebtedness and to all of~~ LyondellBasell Industries N.V.’s existing and future ~~unsubordinated indebtedness.~~senior unsecured indebtedness and will rank senior in right of payment to any future subordinated indebtedness that LYB Finance III or LyondellBasell Industries N.V. incurs. There are no significant restrictions that would impede LyondellBasell Industries 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~~2025 Notes, 2030 Notes and 2050 Notes may be redeemed before the date that is one month, three months, or six months, respectively, prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable ~~Comparable Government Bond Rate~~treasury yield plus 3040 basis points in the case of the ~~2026~~2025 Notes ~~and 35~~or 45 basis points in the case of the ~~2031~~2030 Notes and 2050 Notes) on the notes to be redeemed. The ~~notes~~2025 Notes, 2030 Notes and 2050 Notes may also be redeemed on or after the date that is one month, three months, or six months, respectively, prior to the scheduled maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. The notes are also redeemable upon certain tax events.

~~Three-Year Term Loan due 2022~~—In March 2019, LYB Americas Finance Company LLC (“LYB Americas Finance”), a wholly owned subsidiary of LyondellBasell N.V., entered into a three-year $4,000 million senior unsecured delayed draw term loan credit facility that matures in March 2022. As of September 30, 2019, borrowings under the credit agreement may be made on up to five occasions through December 31, 2019. Proceeds under this credit agreement, which is fully and unconditionally guaranteed by LyondellBasell N.V., may be used for general corporate purposes.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

Borrowings under the credit agreement bear interest at either a base rate or LIBOR rate, as defined, plus in each case, an applicable margin determined by reference to LyondellBasell N.V.’s current credit ratings.

The credit agreement contains customary representations and warranties and contains certain restrictive covenants regarding, among other things, secured indebtedness, subsidiary indebtedness, mergers and sales of assets. 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.

~~Senior Notes due 2019~~—In February 2019, proceeds from the new senior unsecured term loan credit agreement discussed below were used to redeem the remaining $1,000 million outstanding of our 5% Senior Notes due 2019 at par. In conjunction with the redemption of these notes, we recognized non-cash charges of less than $1 million for unamortized debt issuance costs and $8 million for the write-off of the cumulative fair value hedge accounting adjustment related to the redeemed notes.

~~Guaranteed Notes due 2049~~— In October 2019, LYB International Finance III, LLC (“LYB Finance III”), a wholly owned finance subsidiary of LyondellBasell N.V., as defined in Rule 3-10(b) of Regulation S-X, issued $1,000 million of 4.2% guaranteed notes due 2049 at a discounted price of 98.488%. Net proceeds from the sale of the notes totaled $974 million.

In October 2019, we repaid $2,000 million of the indebtedness outstanding under our Term Loan due 2020 using the net proceeds from the sale of the Guaranteed Notes due 2049, $300 million of operating cash and $726 million of additional borrowings of commercial paper.

These unsecured notes, which are fully and unconditionally guaranteed by LyondellBasell N.V., rank equally in right of payment to all of LYB Finance III’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 notes may be redeemed before the date that is six months prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed or the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable Treasury Yield plus 35 basis points) on the notes to be redeemed. The notes may also be redeemed on or after the date that is six months prior to the final maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. The notes are also redeemable upon certain tax events.

Short-Term Debt

~~Term Loan due 2020—~~In February 2019, LYB Americas Finance, entered into a 364-day $2,000 million senior unsecured term loan credit agreement and borrowed the entire amount. The proceeds of this term loan, which is fully and unconditionally guaranteed by LyondellBasell N.V., were used for general corporate purposes, including the repayment of debt.

Borrowings under the credit agreement will bear interest at either a base rate or LIBOR rate, as defined, plus in each case, an applicable margin determined by reference to LyondellBasell N.V.’s current credit ratings.

The credit agreement contains customary covenants and warranties, including specified restrictions on indebtedness, including secured and subsidiary indebtedness, and merger and sales of assets. 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.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

~~Senior Revolving Credit Facility~~—Our $2,500 million revolving credit facility, which expires in June 2022, may be used for dollar and euro denominated borrowings, has a $500 million sublimit for dollar and euro denominated letters of credit, a $1,000 million uncommitted accordion feature, and supports our commercial paper program. The aggregate balance of outstanding borrowings, 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 rate or LIBOR rate, plus an applicable margin. Additional fees are incurred for the average daily unused commitments.

The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00, or less, for the period covering the most recent four quarters.

~~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, 2019 are based on the terms of the notes and range from 2.17% to 2.35%.~~

U.S. Receivables Facility—Our U.S. ~~accounts receivable facility,~~Receivables Facility, which expires in July 2021,, has a purchase limit of $900 million in addition to a $300 million uncommitted accordion feature. ~~This facility is secured by $1,270 million of accounts receivable as of September 30, 2019.~~ This facility provides liquidity through the sale or contribution of trade receivables by certain of our U.S. subsidiaries to a wholly owned, bankruptcy-remote subsidiary on an ongoing basis and without recourse. The bankruptcy-remote subsidiary may then, at its option and subject to a borrowing base of eligible receivables, sell undivided interests in the pool of trade receivables to financial institutions participating in the facility (“Purchasers”). The sale of the undivided interest in the pool of trade receivables is accounted for as a secured borrowing in the Consolidated Balance Sheets. ~~The receivables held by our bankruptcy-remote subsidiary are available first to satisfy our creditors, including the Purchasers.~~ We are responsible for servicing the receivables. We pay variable interest rates on our secured borrowings. ~~As of September 30, 2019, the interest rate under the facility was 2.83%.~~ In the event of liquidation, the bankruptcy-remote subsidiary’s assets will be used to satisfy the claims of the Purchasers prior to any assets or value in the bankruptcy-remote subsidiary becoming available to us. This facility also provides for the issuance of letters of credit up to $200 million. The term of the facility may be extended in accordance with the terms of the agreement. The facility is also subject to customary warranties and covenants, including limits and reserves and the maintenance of specified financial ratios. We 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 LyondellBasell Industries N.V. Additional fees are incurred for the average daily unused commitments. In March 2020, we borrowed $500 million from this facility, which we subsequently repaid in April 2020. At ~~September~~June 30, ~~2019, there was~~ ~~$500 million~~ of2020, we had 0 borrowings ~~and 0~~or letters of credit outstanding and $524 million unused availability under this facility.

Commercial Paper Program—We have a commercial paper program under which we may issue up to $2,500 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). Interest rates on the ~~facility.~~commercial paper outstanding at June 30, 2020 are based on the terms of the notes and range from 0.23% to 0.35%. At June 30, 2020, we had $473 million of outstanding commercial paper.

Weighted Average Interest Rate—At ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, our weighted average interest ~~rate~~rates on outstanding ~~short-term~~Short-term debt ~~was 2.8%~~were 1.3% and ~~3.1%~~3.3%, respectively.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Additional Information

Debt Discount and Issuance Costs—~~For the~~ ~~nine~~ ~~months ended September 30, 2019 and 2018, amortization~~Amortization of debt discounts and debt issuance costs resulted in amortization expense of $7 million and ~~$11~~$4 million for the six months ended June 30, 2020 and 2019, respectively, which is included in Interest expense in the Consolidated Statements of Income.

Other Information—LYB International Finance B.V., LYB International Finance II B.V. and LYB International Finance III, LLC ~~is a direct,~~are 100% owned finance ~~subsidiary~~subsidiaries of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X. Any debt securities issued by LYB International Finance B.V., LYB International Finance II B.V. and LYB International Finance III, LLC ~~will be~~are fully and unconditionally guaranteed by LyondellBasell Industries N.V.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

In ~~July 2019,~~April 2020, we ~~repurchased 35.1 million ordinary shares upon completion of~~entered into amendments and related documents (collectively, the ~~modified Dutch Auction tender offer (“tender offer”~~“Amendments”)~~. Concurrently, we financed the share repurchase by utilizing $1,000 million from~~ to our (i) Senior Revolving Credit Facility, (ii) Term Loan due 2022, ~~$500 million from our~~and (iii) U.S. Receivables Facility (collectively, as amended, the “Credit Agreements”). The Amendments amended each Credit Agreement’s gross leverage ratio covenant of 3.50 to 1.0 to permit netting of unrestricted cash and ~~$1,280~~cash equivalents in excess of $300 million ~~from our commercial paper program, with~~(with certain restrictions on non-US cash) and, in respect of the ~~remainder funded by operating cash.~~Senior Revolving Credit Facility and Term Loan due 2022, restrict certain dividends and other specified restricted payments.

As of ~~September~~June 30, ~~2019,~~2020, we are in compliance with our debt covenants.

~~8. Leases~~

~~Adoption of the New Lease Accounting Guidance—On January 1, 2019, we adopted ASU 2016-02,~~ ~~Leases,~~ ~~including subsequent amendments~~, using the modified retrospective method. Upon adoption, we recognized Operating lease assets and Operating lease liabilities of $1,533 million and $1,553 million, respectively. We also reduced Accrued liabilities and Other liabilities by $2 million and $18 million, respectively. The adoption of this new guidance did not have a material impact on our Consolidated Statements of Income or Cash Flows.

We elected the practical expedients that permit us not to reassess our prior conclusions about lease identification, lease classification, initial direct costs and whether existing land easements that were not accounted for as leases under previous accounting standards are, or contain a lease under the new standard. We also elected the practical expedient to account for lease and associated non-lease components as a single lease component for all asset classes with the exception of utilities and pipeline assets within major manufacturing equipment, which do not have a material impact on our Consolidated Financial Statements.

~~Comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods.~~

At inception of a contract, we determine if the contract contains a lease. When a lease is identified, we recognize a lease asset and a corresponding lease liability based on the present value of the lease payments over the lease term discounted using our incremental borrowing rate, unless an implicit rate is readily determinable. Lease payments include fixed and variable lease components. Variable components are derived from usage or market-based indices, such as the consumer price index. Options to extend or terminate the lease are reflected in the lease payments and lease term when it is reasonably certain that we will exercise those options. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense on a straight-line basis over the lease term.

~~Operating Leases—~~The majority of our leases are operating leases. We lease storage tanks, terminal facilities, land, office facilities, railcars, pipelines, barges, plant equipment and other equipment. As of September 30, 2019, our Operating lease assets were $1,510 million. Operating lease liabilities totaled $1,531 million of which $274 million are current and recorded in Accrued liabilities. These values were derived using a weighted average discount rate of 4.2%.

Our operating leases have remaining lease terms ranging from less than 1 year to 30 years and have a weighted-average remaining lease term of 8 years. While extension clauses included in our leases do not materially impact our Operating lease assets or Operating lease liabilities, certain leases include options to extend the lease for up to 20 years.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

~~Maturities of operating lease liabilities as of September 30, 2019 are as follows:~~

Millions of dollars
Last three months of 2019 $ 88
2020 317
2021 267
2022 226
2023 197
Thereafter 701
Total lease payments 1,796
Less: Imputed interest (265 )
Present value of lease liabilities $ 1,531

~~The following table presents the components of operating lease cost for the three and nine months ended September 30, 2019:~~

Millions of dollars Three Months Ended
September 30, 2019 Nine Months Ended
September 30, 2019
Operating lease cost $ 90
$ 270
Short-term lease cost 41
114
Variable lease cost 12
48
Net operating lease cost $ 143
$ 432

Cash paid for operating lease liabilities totaled $273 million for the nine months ended September 30, 2019. Leased assets obtained in exchange for new operating lease liabilities, including all leases recognized upon adoption of the new lease accounting standard, totaled $1,801 million for the nine months ended September 30, 2019.

As of September 30, 2019, we have entered into additional operating leases, with an undiscounted value of $556 million, primarily for storage tanks related to our new PO/TBA plant at our Channelview, Texas facility. These leases, which will commence between the last quarter of 2019 and 2022, have lease terms ranging from 2 to 20 years.

~~Lease Commitments—~~As of December 31, 2018, the undiscounted aggregate future estimated payments for our operating lease commitments, including those which have not commenced, and those with an initial term of 12 months or less, were as follows:

Millions of dollars
2019 $ 365
2020 288
2021 256
2022 236
2023 204
Thereafter 1,126
Total minimum lease payments $ 2,475

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

9.7. Financial Instruments and Fair Value Measurements

We are exposed to market risks, such as changes in commodity pricing, ~~currency exchange~~interest rates and ~~interest~~currency exchange rates. To manage the volatility related to these exposures, we selectively enter into derivative ~~transactions~~contracts pursuant to our risk management policies.

A summary of our financial instruments, risk management policies, derivative instruments, hedging activities and fair value measurement can be found in Notes 2 and 15 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. If applicable, updates have been included in the respective sections below.

Cash and Cash Equivalents—At ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we had marketable securities classified as Cash and cash equivalents of ~~$78~~$1,358 million and ~~$19~~$389 million, respectively.

Foreign Currency Gain (Loss)—Other income, net, in the Consolidated Statements of Income reflected foreign currency losses of less than $1 million and $7 million, and gains of ~~$2 million and $16 million, and $6~~$3 million and $14 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively.

1916

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial Instruments Measured at Fair Value on a Recurring Basis—The following table summarizes financial instruments outstanding ~~as of September 30, 2019 and December 31, 2018~~for the periods presented that are measured at fair value on a recurring basis:


	June 30, 2020						December 31, 2019
Millions of dollars	Notional Amount		Fair Value		Notional Amount		Fair Value		Balance Sheet Classification
Assets–
Derivatives designated as hedges:

Foreign currency	$	—	$	20	$	—	$	27	Prepaid expenses and other current assets
Foreign currency	300		12		2,000		214		Other assets
Interest rates	—		1		—		22		Prepaid expenses and other current assets
Interest rates	252		3		1,940		41		Other assets
Derivatives not designated as hedges:
Commodities	165		55		3		—		Prepaid expenses and other current assets
Foreign currency	235		6		580		5		Prepaid expenses and other current assets
Non-derivatives:
Available-for-sale debt securities	432		433		162		162		Short-term investments
Equity securities	218		218		34		34		Short-term investments
Total	$	1,602	$	748	$	4,719	$	505
Liabilities–
Derivatives designated as hedges:

Commodities	$	51	$	2	$	—	$	—	Accrued liabilities
Foreign currency	—		15		—		16		Accrued liabilities
Foreign currency	2,355		108		950		53		Other liabilities
Interest rates	—		1		1,000		154		Accrued liabilities
Interest rates	1,500		756		700		77		Other liabilities
Derivatives not designated as hedges:
Commodities	103		17		224		34		Accrued liabilities
Foreign currency	603		8		200		1		Accrued liabilities


Total	$	4,612	$	907	$	3,074	$	335

September 30, 2019 December 31, 2018
Millions of dollars Notional Amount Fair Value Notional Amount Fair Value Balance Sheet Classification
Assets–
Derivatives designated as hedges:
Commodities $ —
$ —
$ 472
$ 12
Prepaid expenses and other current assets
Foreign currency —
52
—
27
Prepaid expenses and other current assets
Foreign currency 2,000
261
2,000
117
Other assets
Interest rates —
27
600
33
Prepaid expenses and other current assets
Interest rates 2,136
62
143
1
Other assets
Derivatives not designated as hedges:
Commodities 53
3
35
5
Prepaid expenses and other current assets
Foreign currency 91
—
599
3
Prepaid expenses and other current assets
Non-derivatives:
Available-for-sale debt securities 53
53
567
567
Short-term investments
Equity securities —
—
322
325
Short-term investments
Total $ 4,333
$ 458
$ 4,738
$ 1,090

Liabilities–
Derivatives designated as hedges:
Commodities $ —
$ —
$ 4
$ —
Accrued liabilities
Foreign currency —
32
—
17
Accrued liabilities
Foreign currency 950
28
950
75
Other liabilities
Interest rates 1,000
232
1,400
16
Accrued liabilities
Interest rates 500
117
2,500
45
Other liabilities
Derivatives not designated as hedges:
Commodities 192
19
63
14
Accrued liabilities
Foreign currency 75
—
1,165
7
Accrued liabilities
Non-derivatives:
Performance share units —
—
29
29
Accrued liabilities
Total $ 2,717
$ 428
$ 6,111
$ 203

Commodity derivatives designated as hedges are classified as Level 1. Our investments in equity securities discussed below are measured at fair value using the net asset value per share, or its equivalent, practical expedient and have not been classifiedAll financial instruments in the ~~fair value hierarchy. All other derivatives and available-for-sale debt securities in the tables~~table above are classified as Level 2.

~~Table~~ We present the gross assets and liabilities of ~~Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

our derivative financial instruments on the Consolidated Balance Sheets.

At ~~September~~June 30, ~~2019,~~2020, our outstanding foreign currency contracts, not designated as hedges, mature from ~~October 2019~~July 2020 to ~~January 2020.~~March 2021. Our commodity contracts, not designated as hedges, mature ~~in October 2019.~~from July 2020 to December 2020.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial Instruments Not Measured at Fair Value on a Recurring Basis—Due to the short maturity, the fair value of all non-derivative financial instruments included in Current assets and Current liabilities approximates the applicable carrying value. Current assets include Cash and cash equivalents, Restricted cash, held-to-maturity time deposits and Accounts receivable. Current liabilities include Accounts payable and commercial paper.

The following table presents the carrying value and estimated fair value of our financial instruments that are not measured at fair value on a recurring basis asfor the periods presented. Due to the short maturity, the fair value of ~~September 30, 2019~~all non-derivative financial instruments included in Current assets and ~~December 31, 2018.~~Current liabilities for which the carrying value approximates fair value are excluded from the table below. Short-term ~~loans receivable, which represent our repurchase agreements, and short-term~~ and long-term debt are recorded at amortized cost in the Consolidated Balance Sheets. The carrying and fair values of short-term and of long-term debt ~~exclude finance leases~~exclude commercial paper and ~~commercial paper.~~other miscellaneous debt.


	September 30, 2019				December 31, 2018					June 30, 2020						December 31, 2019
Millions of dollars	Carrying Value		Fair Value		Carrying Value		Fair Value		Millions of dollars	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-derivatives:									Non-derivatives:
Assets:
Short-term loans receivable	$	518	$	518	$	544	$	544

Liabilities:									Liabilities:
Short-term debt	$	1,650	$	1,667	$	71	$	77	Short-term debt	$	159	$	159	$	181	$	215
Long-term debt	9,621		10,309		8,492		8,476		Long-term debt	13,669		14,872		11,609		12,561
Total	$	11,271	$	11,976	$	8,563	$	8,553	Total	$	13,828	$	15,031	$	11,790	$	12,776

All financial instruments in the table above are classified as Level 2. ~~There were 0 transfers between Level 1 and Level 2 for any of our financial instruments during the nine months ended September 30, 2019 and the year ended December 31, 2018.~~

Net Investment Hedges—~~At September 30, 2019 and December 31, 2018, we had outstanding foreign currency contracts with an aggregate notional value of €617 million ($650 million) designated as~~The following table summarizes our net investment ~~hedges. We also had~~hedges outstanding foreign-currency denominated debt designated as a net investment hedge with notional amounts totaling €750 million ($818 million) and €750 million ($858 million), respectively, as of September 30, 2019 and December 31, 2018.for the periods presented:


	June 30, 2020						December 31, 2019
Millions of euro/dollars	Notional Value						Notional Value			Expiration Date
			Equivalent US$				Equivalent US$
Foreign currency	€	617	$	650	€	617	$	650	2027
Foreign-currency denominated debt	€	750	$	841	€	750	$	842	2022

Cash Flow Hedges—The following table summarizes our cash flow hedges outstanding ~~at September 30, 2019 and December 31, 2018:~~for the periods presented:

September 30, 2019 December 31, 2018
Millions of dollars Notional Value Notional Value Expiration Date
Foreign currency $ 2,300
$ 2,300
2021 to 2027
Interest rates 1,500
1,500
2020 to 2021
Commodities —
476
2019


	June 30, 2020		December 31, 2019
Millions of dollars	Notional Value		Notional Value		Expiration Date
Foreign currency	$	2,005	$	2,300	2021 to 2027
Interest rates	1,500		1,500		2021 to 2024
Commodities	51		—		2021 to 2022

In ~~February 2019,~~January 2020, we ~~entered into~~amended previously existing forward-starting interest rate swaps with a total notional amount of $1,000 million (the “Swaps”) to extend their maturities to July 2023 and April 2024. As of June 30, 2020, the Swaps were designated as cash flow hedges to mitigate the risk of variability in interest rates ~~for a $1,000 million~~of future expected debt issuance initially expected by February 2020. These swaps were designated as cash flow hedges. In September 2019, concurrent with the offering of our guaranteed notes due 2049 issued in October 2019, we dedesignated the hedging relationship. The forward-starting interest rate swaps scheduled to settle in February 2020 were redesignated as cash flow hedges of forecasted interest payments related to expected debt issuances to be completed by July 2023 and April 2024. Other assets as of June 30, 2020 includes $238 million of collateral held with our counterparties related to our forward-starting interest rate swaps; this amount represents the maximum amount of collateral required in accordance with the Swap agreements. Related cash flows are included in financing activities in the Consolidated Statements of Cash Flows.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

In ~~February 2019, concurrent with the redemption of $1,000~~May 2020, we terminated and cash settled $2,000 million in notional value of our ~~then outstanding 5% senior notes due 2019, we received $4 million in settlement of $1,000 million of forward-starting~~cross-currency interest rate swaps, ~~that~~designated as cash flows hedges, maturing in 2021 and 2024. Upon termination of the swaps, we received $346 million from our counterparties. Concurrent with the settlement of the swaps, we entered into $1,705 million cross-currency interest rate swaps with euro notional amounts and maturity dates matching the original swaps. The swaps are designated as cash flow hedges to reduce the variability in the functional currency equivalent cash flows of ~~forecasted interest payments.~~certain foreign currency denominated intercompany loans.

During the ~~first~~second quarter of ~~2019,~~2020, we entered into over-the-counter commodity futures contracts to mitigate the risk of variability in feedstock prices and product sales prices for 2019 with total notional amounts of $78 million and $97 million, respectively. The cash flow hedges were dedesignated in September 2019 by unwinding these commodities futures contracts.

~~During the nine months ended September 30, 2019, we paid $20 million in settlement of commodity futures contracts that hedge the risk of variability in feedstock prices~~swaps with a total notional amount of ~~$310 million. Additionally, we received $26~~$51 million ~~in settlement~~that were designated as cash flow hedges to manage the volatility of commodity ~~futures contracts that hedge~~prices related to anticipated purchases of feedstock for the ~~risk of variability in product sales prices with a total notional amount of $408 million.~~years 2021 and 2022.

As of ~~September~~June 30, ~~2019,~~2020, on a pre-tax basis, $7$6 million ~~$8 million, and $8 million are expected~~is scheduled to be reclassified from Accumulated other comprehensive loss as ~~increases~~an increase to interest expense ~~revenues and cost of sales, respectively,~~ over the next twelve months.

Fair Value Hedges—The following table summarizes our fair value hedges outstanding for the periods presented:

June 30, 2020

December 31, 2019

Millions of dollars

Notional Value

Expiration Date

Interest rates

252

2,140

2022 to 2026

In ~~February 2019, concurrent with~~January 2020, we entered into a euro fixed-for-floating interest rate swap to mitigate the ~~redemption~~change in the fair value of ~~$1,000~~€100 million of our ~~then outstanding 5% senior~~€500 million guaranteed notes due ~~2019,~~2026 associated with the risk of variability in the 6-month EURIBOR rate, the benchmark interest rate. The fixed-rate and variable-rate components are settled annually and semi-annually, respectively.

In April 2020, we ~~paid $5~~terminated $2,000 million in ~~settlement~~notional value of ~~$1,000 million of~~our fixed-for-floating interest rate ~~swaps.~~

~~We had outstanding interest rate contracts with aggregate notional amounts of $2,136 million and $3,143 million at September 30, 2019 and December 31, 2018, respectively. These~~swaps which were designated as fair value hedges ~~have maturities ranging~~originally set to expire in 2021 and 2027. Upon termination of the fixed-for-floating interest rate swaps, we received $147 million from our counterparties.

~~2021~~

~~to 2027 as~~Table of ~~September 30, 2019.~~Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Impact on Earnings and Other Comprehensive Income—The following tables summarize the pre-tax ~~effects~~effect of derivative ~~instruments~~ and non-derivative instruments ~~on Other~~recorded in Accumulated other comprehensive ~~income~~loss (“AOCI”), the gains (losses) reclassified from AOCI to earnings and ~~earnings for the three and nine months ended September 30, 2019 and 2018:~~additional gains (losses) recognized directly in earnings:


	Effects of Financial Instruments																			Effects of Financial Instruments
	Three Months Ended September 30,																			Three Months Ended June 30,
	Gain (Loss) Recognized in AOCI					Gain (Loss) Reclassified from AOCI to Income						Gain (Loss) Recognized in Income						Income Statement		Gain (Loss) Recognized in AOCI						Gain (Loss) Reclassified from AOCI to Income						Gain (Loss) Recognized in Income	Income Statement
Millions of dollars	2019			2018		2019			2018			2019			2018			Classification	Millions of dollars	2020		2019		2020		2019		2020		2019		Classification
Derivatives designated as hedges:																			Derivatives designated as hedges:
Commodities	$	7		$	—	$	(10	)	$	—		$	—		$	—		Sales and other operating revenues	Commodities	$	(2)	$	9	$	—	$	(2)	$	—	$	—	Sales and other operating revenues
Commodities	(10		)	30		8			(11		)	—			—			Cost of sales	Commodities	—		(8)		—		—		—		—		Cost of sales
Foreign currency	141			15		(86		)	(13		)	18			19			Other income, net; Interest expense	Foreign currency	(86)		(19)		45		26		14		15		Interest expense
Interest rates	(163		)	48		(1		)	—			23			(12		)	Interest expense	Interest rates	3		(105)		2		—		(6)		46		Interest expense
Derivatives not designated as hedges:																			Derivatives not designated as hedges:
Commodities	—			—		—			—			(1		)	2			Sales and other operating revenues	Commodities	—		—		—		—		14		1		Sales and other operating revenues
Commodities	—			—		—			—			1			7			Cost of sales	Commodities	—		—		—		—		77		(22)		Cost of sales
Foreign currency	—			—		—			—			14			12			Other income, net	Foreign currency	—		—		—		—		(6)		(3)		Other income, net
Non-derivatives designated as hedges:																			Non-derivatives designated as hedges:
Long-term debt	35			5		—			—			—			—			Other income, net	Long-term debt	(20)		(11)		—		—		—		—		Other income, net
Total	$	10		$	98	$	(89	)	$	(24	)	$	55		$	28			Total	$	(105)	$	(134)	$	47	$	24	$	93	$	37


	Effects of Financial Instruments
	Six Months Ended June 30,
	Gain (Loss) Recognized in AOCI						Gain (Loss) Reclassified from AOCI to Income						Gain (Loss) Recognized in Income	Income Statement
Millions of dollars	2020		2019		2020		2019		2020		2019		Classification
Derivatives designated as hedges:
Commodities	$	(2)	$	(41)	$	—	$	(8)	$	—	$	—	Sales and other operating revenues
Commodities	—		38		—		4		—		—		Cost of sales
Foreign currency	78		51		(8)		(13)		30		32		Interest expense
Interest rates	(532)		(179)		2		(4)		90		73		Interest expense
Derivatives not designated as hedges:
Commodities	—		—		—		—		5		3		Sales and other operating revenues
Commodities	—		—		—		—		74		(19)		Cost of sales
Foreign currency	—		—		—		—		(10)		16		Other income, net
Non-derivatives designated as hedges:
Long-term debt	2		5		—		—		—		—		Other income, net
Total	$	(454)	$	(126)	$	(6)	$	(21)	$	189	$	105

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Effects of Financial Instruments
Nine Months Ended September 30,
Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Income Gain (Loss) Recognized in Income Income Statement
Millions of dollars 2019 2018 2019 2018 2019 2018 Classification
Derivatives designated as hedges:
Commodities $ (34 ) $ —
$ (18 ) $ —
$ —
$ —
Sales and other operating revenues
Commodities 28
36
12
(7 ) —
—
Cost of sales
Foreign currency 192
102
(99 ) (75 ) 50
50
Other income, net; Interest expense
Interest rates (342 ) 115
(5 ) —
96
(74 ) Interest expense
Derivatives not designated as hedges:
Commodities —
—
—
—
2
1
Sales and other operating revenues
Commodities —
—
—
—
(18 ) 16
Cost of sales
Foreign currency —
—
—
—
30
28
Other income, net
Non-derivatives designated as hedges:
Long-term debt 40
31
—
—
—
—
Other income, net
Total $ (116 ) $ 284
$ (110 ) $ (82 ) $ 160
$ 21

The derivative amounts excluded from the assessment of effectiveness ~~testing~~ for foreign currency contracts designated as net investment hedges recognized in other comprehensive income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 were ~~gains~~losses of $3$2 million ~~and less than $1 million, respectively,~~each, and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 were losses of $1$5 million and ~~gains of $14~~$3 million, respectively.

The derivative amounts excluded from the assessment of effectiveness ~~testing~~ for foreign currency contracts designated as net investment hedges recognized in interest expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 were gains of $5$3 million and ~~$15~~$7 million, respectively, and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 were gains of $8$5 million and ~~$21~~$10 million, respectively.

The pre-tax effect of the periodic receipt of fixed interest and payment of variable interest associated with our fixed-for-floating interest rate swaps resulted in a $1 million and $7$3 million decrease in interest expense during the three and six months ended June 30, 2020, respectively, and $2 million and $5 million increase in interest expense during the three and ~~nine~~six months ended ~~September~~June 30, 2019, ~~respectively, and a $3 million and $1 million increase in interest expense during the three and nine months ended September 30, 2018.~~respectively.

Investments in Available-for-Sale Debt Securities—The following ~~tables summarize~~table summarizes the amortized cost, gross unrealized gains and losses, and fair value of our outstanding available-for-sale debt ~~securities that are outstanding as of September 30, 2019 and December 31, 2018:~~securities:

September 30, 2019
Millions of dollars Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Available-for-sale debt securities:
Bonds $ 52
$ 1
$ —
$ 53

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~~LYONDELLBASELL INDUSTRIES N.V.~~

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

December 31, 2018
Millions of dollars Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Available-for-sale debt securities:
Bonds $ 567
$ —
$ —
$ 567


Millions of dollars	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Debt securities at June 30, 2020	$	432	$	1	$	—	$	433
Debt securities at December 31, 2019	162		—		—		162

NaN allowance for credit losses related to our available-for-sale debt securities was recorded for the ~~nine~~six months ended ~~September~~June 30, ~~2019. NaN losses related to other-than-temporary impairments of our available-for-sale debt securities were recorded in Accumulated other comprehensive income~~2020 or for the year ended December 31, ~~2018.~~2019.

As of June 30, 2020, bonds classified as available-for-sale debt securities had maturities between 4 months and 39 months.

The proceeds from maturities and sales of our available-for-sale-debt securities during the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 are summarized in the following table:

Three Months Ended September 30, Nine Months Ended September 30,
Millions of dollars 2019 2018 2019 2018
Proceeds from maturities of available-for-sale debt securities $ —
$ —
$ 331
$ 410
Proceeds from sales of available-for-sale debt securities —
—
180
—


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Proceeds from maturities of available-for-sale debt securities	$	—	$	23	$	—	$	331
Proceeds from sales of available-for-sale debt securities	—		180		—		180

NaN gain or loss was realized in connection with the sales of our available-for-sale debt securities during the three and six months ended June 30, 2020. The gross realized gains and losses associated with the sale of ~~available-for-debt~~available-for-sale debt securities during the three and ~~nine~~six months ended ~~September~~June 30, 2019 were less than $1 million in each respective period.

We had 0 available-for-sale debt securities which were in a continuous unrealized loss position for less than or greater than twelve months ~~respectively,~~ as of ~~September~~June 30, ~~2019. The following table summarizes the fair value~~2020 and ~~unrealized losses related to available-for-sale debt securities that were in a continuous unrealized loss position for less than and greater than twelve months as of~~ December 31, ~~2018:~~

2019.

December 31, 2018
Less than 12 months Greater than 12 months
Millions of dollars Fair Value Unrealized Loss Fair Value Unrealized Loss
Available-for-sale debt securities:
Bonds $ 118
$ (1 ) $ 45
$ —

Investments in Equity Securities—Our investment in equity securities primarily consist of limited partnership investments. At June 30, 2020 and December 31, 2019, we had investments in equity securities with a notional amount of $218 million and $34 million, respectively, and a fair value of $218 million and $34 million, respectively. These investments may be redeemed within 7 days following written notice from the Company.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

We received proceeds ~~of $332 million and $64~~$1 million related to the sale of our investments in equity securities during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~$170 million and $332 million during the three and six months ended in June 30, 2019, respectively. NaN proceeds ~~were received~~ related to the sale of ~~our~~ investments in equity securities were received during the three months ended ~~September~~June 30, ~~2019. We received proceeds of $32 million related to the sale of our investments in equity securities during the three months ended September 30, 2018.~~

At September 30, 2019, we had 0 outstanding investment in equity securities. At December 31, 2018, we had investments in equity securities with a notional amount of $322 million and a fair value of $325 million.

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~~LYONDELLBASELL INDUSTRIES N.V.~~

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

2020.

The following table summarizes the portion of unrealized gains and losses for the equity securities that are outstanding ~~as of September 30, 2019 and 2018:~~for the periods presented:


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Net gains (losses) recognized during the period	$	—	$	(1)	$	—	$	6
Less: Net gains recognized during the period on securities sold	—		8		—		9
Unrealized losses recognized during the period	$	—	$	(9)	$	—	$	(3)

Three Months Ended
September 30, Nine Months Ended
September 30,
Millions of dollars 2019 2018 2019 2018
Net gains (losses) recognized during the period $ —
$ (8 ) $ 6
$ 1
Less: Net gains recognized during the period on securities sold —
1
9
2
Unrealized losses recognized during the period $ —
$ (9 ) $ (3 ) $ (1 )

~~10.~~8. Income Taxes

Our effective income tax rate for the three months ended ~~September~~June 30, ~~2019~~ 2020 was ~~12.3%~~-11.3% compared with ~~17.2%~~14.4% for the three months ended ~~September~~June 30, ~~2018~~.2019. For the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, the effective income tax rate was ~~15.4%~~8.6% compared with ~~11.4%~~16.9% for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~.2019. Our effective income tax rate fluctuates based on, among other factors, ~~changes in statutory tax rates,~~ changes in pretax income in countries with varying statutory tax rates, changes in valuation allowances, changes in foreign exchange gains/losses, ~~changes in~~ the amount of exempt income, ~~and changes in unrecognized tax benefits associated with uncertain tax positions.~~

Compared with the three months ended September 30, 2018, the lower effective tax rate for the three months ended September 30, 2019 was primarily attributable to changes in unrecognized tax benefits associated with uncertain tax positions, partially offset by decreased exempt income. Compared with the nine months ended September 30, 2018, the higher effective tax rate for the nine months ended September 30, 2019 was primarily attributable to changes in unrecognized tax benefits associated with uncertain tax positions, and ~~decreases~~changes in tax laws.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act, also known as the “CARES Act,” which contains numerous income tax provisions and other stimulus measures. We anticipate that several of the tax measures will favorably impact our income tax on our Consolidated Financial Statements for the year ended December 31, 2020. Based on our analysis as of June 30, 2020, we recorded an overall tax benefit including a remeasurement of our deferred income tax balances. We continue to assess the impact that the CARES Act will have on our Company.

Compared with the three and six months ended June 30, 2019, the lower effective tax rate for the three and six months ended June 30, 2020 was primarily attributable to an anticipated benefit resulting from various provisions of the CARES Act and to the increased relative impact of exempt income due to decreased pretax income. This is partially offset by achanges in the pretax income in countries with varying statutory tax ~~benefit~~rates and tax benefits related to prior year research and development activities.

We operate in multiple jurisdictions throughout the world, and our tax returns are periodically audited or subjected to review by tax authorities. We are currently under examination in a number of tax jurisdictions. As a result, there is an uncertainty in income taxes recognized in our financial statements. Positions challenged by the tax authorities may be settled or appealed by us. As of September 30, 2019 and December 31, 2018, we had unrecognized tax benefits of $199 million and $269 million, respectively. During the three months ended September 30, 2019, a statute of limitation expired and resulted in a $85 million non-cash benefit to our effective tax rate consisting of the recognition of $72 million of previously unrecognized tax benefits as a reduction for tax positions of a prior year and the release of $13 million of previously accrued interest. Additionally, during 2018, we entered into an audit settlement impacting specific uncertain tax positions. This audit settlement resulted in a $346 million non-cash benefit to our effective tax rate consisting of the recognition of $288 million of previously unrecognized tax benefits as a reduction for tax positions of prior years and the release of $58 million of previously accrued interest. These non-cash reductions in unrecognized tax benefits are reflected on our Consolidated Statements of Cash Flows in Other operating activities. It is reasonably possible that, within the next twelve months, due to the settlement of uncertain tax positions with various tax authorities and the expiration of statutes of limitations, unrecognized tax benefits could decrease by up to approximately $45 million.

We monitor income tax developments in countries where we conduct business. In 2017, the U.S. enacted “H.R.1,” also known as the “Tax Cuts and Jobs Act” (the “Tax Act”) materially impacting our Consolidated Financial Statements by, among other things, decreasing the tax rate, and significantly affecting future periods. To determine the full effects of the tax law, we are awaiting the finalization of several proposed U.S. Treasury regulations under the Tax Act that were issued during 2018 and 2019. In prior years, the Company did not assert permanent reinvestment of our foreign earnings. However, as a result of the U.S. Section 245A temporary regulations, the Company does intend to permanently reinvest approximately $550 million of our non-U.S. earnings. Repatriation of these earnings to the U.S. in the future could result in a tax impact of approximately $60 million. Prior to the issuance of the retroactive temporary regulations, the non-U.S. earnings on the permanent reinvestment could have been distributed tax free.

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~~LYONDELLBASELL INDUSTRIES N.V.~~

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

~~11.~~9. Commitments and Contingencies

Commitments—We have various purchase commitments for materials, supplies and services incidental to the ordinary conduct of business, generally for quantities required for our businesses and at prevailing market prices. These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements. As of ~~September~~June 30, ~~2019~~2020, we had capital expenditure commitments, which we incurred in our normal course of business, including commitments of approximately ~~$429~~$475 million related to building our new PO/TBA plant ~~on the Texas Gulf Coast and~~ ~~Hyperzone~~ ~~polyethylene plant~~ in ~~La Porte,~~Houston, Texas.

Financial Assurance Instruments—We have obtained letters of credit, performance and surety bonds and have issued financial and performance guarantees to support trade payables, potential liabilities and other obligations. Considering the frequency of claims made against the financial instruments we use to support our obligations, and the magnitude of those financial instruments in light of our current financial position, management does not expect that any claims against or draws on these instruments would have a material adverse effect on our Consolidated Financial Statements. We have not experienced any unmanageable difficulty in obtaining the required financial assurance instruments for our current operations.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Environmental Remediation—Our accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled ~~$130~~$129 million and ~~$90~~$132 million as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. At ~~September~~June 30, ~~2019,~~2020, the accrued liabilities for individual sites range from less than $1 million to ~~$16~~$15 million. The remediation expenditures are expected to occur over a number of years, and not 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.

Indemnification—We are parties to various indemnification arrangements, including arrangements entered into in connection with acquisitions, divestitures and the formation and dissolution of joint ventures. Pursuant to these arrangements, we provide indemnification to and/or receive indemnification from other parties in connection with liabilities that may arise in connection with the transactions and in connection with activities prior to completion of the transactions. These indemnification arrangements typically include provisions pertaining to ~~third party~~third-party claims relating to environmental and tax matters and various types of litigation. As of ~~September~~June 30, ~~2019,~~2020, we had not accrued any significant amounts for our indemnification obligations, and we are not aware of other circumstances that would likely lead to significant future indemnification obligations. We cannot determine with certainty the potential amount of future payments under the indemnification arrangements until events arise that would trigger a liability under the arrangements.

As part of our technology licensing contracts, we give indemnifications to our licensees for liabilities arising from possible patent infringement claims with respect to certain proprietary licensed technologies. Such indemnifications have a stated maximum amount and generally cover a period of 5 to 10 years.

Legal Proceedings—We are subject to various lawsuits and claims, including but not limited to, matters involving contract disputes, environmental damages, personal injury and property damage. We vigorously defend ourselves and prosecute these matters as appropriate.

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor legal proceedings in which we are a party. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial, mediation or other resolution. We regularly assesses the adequacy of legal accruals based on our professional judgment, experience and the information available regarding our cases.

Based on a consideration of all relevant facts and circumstances, we do not believe the ultimate outcome of any currently pending lawsuit against us will have a material adverse effect upon our operations, financial condition or Consolidated Financial Statements.

10. Shareholders’ Equity and Redeemable Non-controlling Interests

Shareholders’ Equity

Dividend Distributions—The following table summarizes the dividends paid in the periods presented:


Millions of dollars, except per share amounts	Dividend Per Ordinary Share		Aggregate Dividends Paid		Date of Record
March 2020	$	1.05	$	351	March 2, 2020
June 2020	1.05		350		June 8, 2020

	$	2.10	$	701

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

~~12. Stockholders’ Equity and Redeemable Non-controlling Interests~~

~~Stockholders’ Equity~~

~~Dividend Distributions—The following table summarized the dividends paid in the periods presented:~~

Millions of dollars, except per share amounts Dividend Per Ordinary Share Aggregate Dividends Paid Date of Record
March $ 1.00
$ 372

March 4, 2019
June 1.05
388

June 10, 2019
September 1.05
351

September 4, 2019
$ 3.10
$ 1,111

~~In February, May and August 2019, we paid a cash dividend of $15.00 per share to A. Schulman Special Stock shareholders of record as of~~ ~~January 15, 2019~~, ~~April 15, 2019, and~~ ~~July 15, 2019, respectively. Dividends on A. Schulman Special Stock totaled $5 million for the nine months ended September 30, 2019.~~

Share Repurchase Authorization

—In May ~~2019,~~2020, our shareholders approved a proposal to authorize us to repurchase up to ~~37.0~~34.0 million ~~of our~~ ordinary shares, through November ~~30, 2020~~29, 2021 (“May ~~2019~~2020 Share Repurchase Authorization”), which superseded ~~the remaining authorization under our June 2018 Share Repurchase Authorization.~~any prior repurchase authorizations. The timing and amount of these repurchases, which are determined based on our evaluation of market conditions and other factors, may be executed from time to time through open market or privately negotiated transactions. The repurchased shares, which are recorded at cost, are classified as Treasury stock and may be retired or used for general corporate purposes, including for various employee benefit and compensation plans.

Upon the completion of the tender offer in July 2019, we repurchased 35.1 million ordinary shares, under the May 2019 Share Repurchase Authorization, at a tender offer price of $88.00 per share for a total of $3,099 million, including $6 million of fees and expenses related to the tender offer. The remaining 1.9 million shares under the May 2019 Share Repurchase Authorization were repurchased from the open market in August 2019.

~~In September 2019, our shareholders approved a proposal to authorize us to repurchase up to 33.3 million ordinary shares, through~~ ~~March 12, 2021~~ ~~(“September 2019 Share Repurchase Authorization”), which superseded any prior repurchase authorizations.~~

The following ~~tables summarize~~table summarizes our share repurchase activity for the periods presented:

Nine Months Ended September 30, 2019
Millions of dollars, except shares and per share amounts
Shares
Repurchased

Average
Purchase
Price

Total Purchase Price, Including
Commissions and Fees
June 2018 Share Repurchase Authorization 5,648,900
$ 86.38
$ 488
May 2019 Share Repurchase Authorization 37,032,594
87.50
3,240
42,681,494
$ 87.35
$ 3,728

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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


Millions of dollars, except shares and per share amounts						Millions of dollars, except shares and per share amounts	Shares Repurchased	Average Purchase Price		Total Purchase Price, Including Commissions and Fees
For six months ended June 30, 2020:						For six months ended June 30, 2020:
September 2019 Share Repurchase Authorization						September 2019 Share Repurchase Authorization	50,685	$	78.93	$	4
May 2020 Share Repurchase Authorization						May 2020 Share Repurchase Authorization	—	$	—	$	—
							50,685	$	78.93	$	4

	Nine Months Ended September 30, 2018
Millions of dollars, except shares and per share amounts	Shares Repurchased	Average Purchase Price		Total Purchase Price, Including Commissions and Fees
May 2017 Share Repurchase Authorization	4,004,753	$	106.05	$	425
For six months ended June 30, 2019:						For six months ended June 30, 2019:
June 2018 Share Repurchase Authorization	3,674,062	107.89		396		June 2018 Share Repurchase Authorization	5,648,900	$	86.38	$	488
	7,678,815	$	106.93	$	821

Due to the timing of settlements, total cash paid for share repurchases for the ~~nine~~six months ended ~~September~~June 30, 2020 and 2019 ~~and 2018~~ was ~~$3,752~~$4 million and ~~$801~~$512 million, respectively.

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


	Six Months Ended June 30,
	2020	2019
Ordinary shares outstanding:
Beginning balance	333,476,883	375,696,661
Share-based compensation	225,367	256,140

Employee stock purchase plan	178,239	83,473
Purchase of ordinary shares	(50,685)	(5,648,900)
Ending balance	333,829,804	370,387,374

Nine Months Ended
September 30,
2019 2018
Ordinary shares outstanding:
Beginning balance 375,696,661
394,512,054
Share-based compensation 268,851
285,186
Employee stock purchase plan 123,869
82,758
Purchase of ordinary shares (42,681,505 ) (7,702,222 )
Ending balance 333,407,876
387,177,776

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


	Nine Months Ended September 30,					Six Months Ended June 30,
	2019		2018			2020	2019
Ordinary shares held as treasury shares:					Ordinary shares held as treasury shares:
Beginning balance	24,513,619		183,928,109		Beginning balance	6,568,745	24,513,619
Share-based compensation	(268,851	)	(285,186	)	Share-based compensation	(225,367)	(256,140)

Employee stock purchase plan	(123,869	)	(82,758	)	Employee stock purchase plan	(178,239)	(83,473)
Purchase of ordinary shares	42,681,505		7,702,222		Purchase of ordinary shares	50,685	5,648,900
Treasury shares canceled	—		(178,229,883	)

Ending balance	66,802,404		13,032,504		Ending balance	6,215,824	29,822,906

In September 2019, our Board authorized the cancellation of approximately 60.2 million ordinary shares held in treasury, as approved by the shareholders. In accordance with cancellation procedures under Dutch law, the cancellation will become effective only following the conclusion of a two-month creditor opposition period and contingent upon the resolution of any objections that may be raised. We expect the cancellation to be effective during the fourth quarter of 2019.

~~During the three months ended September 30, 2018, following approval by our Board and shareholders, we canceled 178,229,883 ordinary shares held in our treasury account.~~

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

During the three months ended September 30, 2019 and 2018, purchase of ordinary shares includes 11 shares and 23,407 shares, respectively, that were returned to us at no cost resulting from unclaimed distributions to creditors.

Accumulated Other Comprehensive ~~Income (Loss)~~Loss—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 are presented in the following tables:


Millions of dollars	Financial Derivatives		Unrealized Gains on Available -for-Sale Debt Securities		Defined Benefit Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustments		Total
Balance – January 1, 2020	$	(200)	$	—	$	(711)	$	(873)	$	(1,784)
Other comprehensive income (loss) before reclassifications	(456)		1		—		(133)		(588)
Tax (expense) benefit before reclassifications	95		—		—		—		95
Amounts reclassified from accumulated other comprehensive loss	(6)		—		28		—		22
Tax (expense) benefit	3		—		(7)		—		(4)
Net other comprehensive income (loss)	(364)		1		21		(133)		(475)
Balance – June 30, 2020	$	(564)	$	1	$	(690)	$	(1,006)	$	(2,259)

Millions of dollars
Financial
Derivatives

Unrealized
Gains
on Available
-for-Sale
Debt
Securities

Defined Benefit
Pension and Other
Postretirement
Benefit Plans

Foreign
Currency
Translation
Adjustments
Total
Balance – January 1, 2019 $ (68 ) $ —
$ (442 ) $ (853 ) $ (1,363 )
Other comprehensive income (loss) before reclassifications (184 ) 1
—
(92 ) (275 )
Tax (expense) benefit before reclassifications 36
—
—
(14 ) 22
Amounts reclassified from accumulated other comprehensive income (loss) (110 ) —
20
—
(90 )
Tax (expense) benefit 28
—
(5 ) —
23
Net other comprehensive income (loss) (230 ) 1
15
(106 ) (320 )
Balance – September 30, 2019 $ (298 ) $ 1
$ (427 ) $ (959 ) $ (1,683 )

Millions of dollars
Financial
Derivatives
Unrealized
Gains
on Equity
Securities
and Equity
Securities
Held by
Equity
Investees
Defined Benefit
Pension and Other
Postretirement
Benefit Plans

Foreign
Currency
Translation
Adjustments
Total
Balance – January 1, 2018 $ (120 ) $ 17
$ (421 ) $ (761 ) $ (1,285 )
Adoption of accounting standards (2 ) (17 ) (51 ) —
(70 )
Other comprehensive income (loss) before reclassifications 186
—
—
(48 ) 138
Tax expense before reclassifications (36 ) —
—
(15 ) (51 )
Amounts reclassified from accumulated other comprehensive income (loss) (81 ) —
26
—
(55 )
Tax (expense) benefit 20
—
(6 ) —
14
Net other comprehensive income (loss) 89
—
20
(63 ) 46
Balance – September 30, 2018 $ (33 ) $ —
$ (452 ) $ (824 ) $ (1,309 )


Millions of dollars	Financial Derivatives		Unrealized Gains on Available -for-Sale Debt Securities		Defined Benefit Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustments		Total
Balance – January 1, 2019	$	(68)	$	—	$	(442)	$	(853)	$	(1,363)
Other comprehensive income (loss) before reclassifications	(129)		1		—		14		(114)
Tax (expense) benefit before reclassifications	29		—		—		(6)		23
Amounts reclassified from accumulated other comprehensive loss	(21)		—		14		—		(7)
Tax (expense) benefit	3		—		(4)		—		(1)
Net other comprehensive income (loss)	(118)		1		10		8		(99)
Balance – June 30, 2019	$	(186)	$	1	$	(432)	$	(845)	$	(1,462)

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The amounts reclassified out of each component of Accumulated other comprehensive loss are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,						Affected Line Item on the Consolidated Statements of Income		Three Months Ended June 30,						Six Months Ended June 30,				Affected Line Item on the Consolidated Statements of Income
Millions of dollars	2019			2018			2019			2018				Millions of dollars	2020		2019		2020		2019			Affected Line Item on the Consolidated Statements of Income
Reclassification adjustments for:														Reclassification adjustments for:
Financial derivatives:														Financial derivatives:
Foreign currency	$	(86	)	$	(13	)	$	(99	)	$	(75	)	Other income, net	Foreign currency	$	45	$	26	$	(8)	$	(13)	Other income, net
Commodities	(10		)	—			(18		)	—			Sales and other operating revenue	Commodities	—		(2)		—		(8)		Sales and other operating revenue
Commodities	8			(10		)	12			(6		)	Cost of sales	Commodities	—		—		—		4		Cost of sales
Interest rates	(1		)	—			(5		)	—			Interest expense	Interest rates	2		—		2		(4)		Interest expense
Income tax expense (benefit)	(25		)	(5		)	(28		)	(20		)	Provision for income taxes	Income tax expense (benefit)	12		7		(3)		(3)		Provision for income taxes
Financial derivatives, net of tax	(64		)	(18		)	(82		)	(61		)		Financial derivatives, net of tax	35		17		(3)		(18)
Amortization of defined pension items:														Amortization of defined pension items:
Prior service cost	—			—			1			—			Other income, net	Prior service cost	1		1		2		1		Other income, net
Actuarial loss	6			9			19			25			Other income, net	Actuarial loss	13		6		26		13		Other income, net
Settlement loss	—			—			—			1			Other income, net
Income tax expense	1			3			5			6			Provision for income taxes

Income tax expense (benefit)														Income tax expense (benefit)	3		2		7		4		Provision for income taxes
Defined pension items, net of tax	5			6			15			20				Defined pension items, net of tax	11		5		21		10
Total reclassifications, before tax	(83		)	(14		)	(90		)	(55		)		Total reclassifications, before tax	61		31		22		(7)
Income tax expense (benefit)	(24		)	(2		)	(23		)	(14		)	Provision for income taxes	Income tax expense (benefit)	15		9		4		1		Provision for income taxes
Total reclassifications, after tax	$	(59	)	$	(12	)	$	(67	)	$	(41	)	Amount included in net income	Total reclassifications, after tax	$	46	$	22	$	18	$	(8)	Amount included in net income

~~Purchase of~~ Non-controlling Interest—In February 2019, we increased our interest in our subsidiary La Porte Methanol Company, L.P., from 85% to 100%, for cash consideration of $63 million.

Redeemable Non-controlling Interests

Our redeemable non-controlling interests relate to shares of cumulative perpetual special stock (“redeemable non-controlling interest stock”) issued by our consolidated subsidiary, formerly known as A. Schulman. As of June 30, 2020 and December 31, 2019, we had 115,374 shares of ~~A. Schulman Special Stock which were outstanding~~redeemable non-controlling interest stock outstanding.

In February and May 2020, we paid cash dividends of $15.00 per share to our redeemable non-controlling interest shareholders of record as of ~~September~~January 15, 2020 and April 15, 2020, respectively. These dividends totaled $3 million for each of the six months ended June 30, ~~2019~~2020 and ~~December 31, 2018.~~

2019.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

~~13.~~11. Per Share Data

Basic earnings per share are based upon the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share includes the effect of certain stock option awards and other equity-based compensation awards. We have unvested restricted stock units that are considered participating securities for earnings per share.

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


	Three Months Ended June 30,
	2020						2019
Millions of dollars	Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations
Net income (loss)	$	315	$	(1)	$	1,006	$	(3)


Dividends on redeemable non-controlling interest stock	(1)		—		(1)		—
Net (income) loss attributable to participating securities	(1)		—		(2)		—
Net income (loss) attributable to ordinary shareholders – basic and diluted	$	313	$	(1)	$	1,003	$	(3)

Millions of shares, except per share amounts
Basic weighted average common stock outstanding	334		334		370		370

Effect of dilutive securities	—		—		—		—
Potential dilutive shares	334		334		370		370

Earnings (loss) per share:
Basic	$	0.94	$	—	$	2.71	$	(0.01)
Diluted	$	0.94	$	—	$	2.71	$	(0.01)

Three Months Ended September 30,
2019 2018
Millions of dollars
Continuing
Operations

Discontinued
Operations

Continuing
Operations

Discontinued
Operations
Net income (loss) $ 969
$ (4 ) $ 1,115
$ (2 )
Dividends on A. Schulman Special Stock (2 ) —
—
—
Net income attributable to participating securities (2 ) —
(2 ) —
Net income (loss) attributable to ordinary shareholders – basic and diluted $ 965
$ (4 ) $ 1,113
$ (2 )

Millions of shares, except per share amounts
Basic weighted average common stock outstanding 337
337
389
389
Effect of dilutive securities:
Performance share units —
—
1
1
Potential dilutive shares 337
337
390
390

Earnings (loss) per share:
Basic $ 2.86
$ (0.01 ) $ 2.86
$ —
Diluted $ 2.86
$ (0.01 ) $ 2.85
$ —

Participating securities 0.6
0.6
0.5
0.5
Dividends declared per share of common stock $ 1.05
$ —
$ 1.00
$ —

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


	Six Months Ended June 30,
	2020						2019
Millions of dollars	Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations
Net income (loss)	$	458	$	—	$	1,823	$	(3)


Dividends on redeemable non-controlling interest stock	(3)		—		(3)		—
Net (income) loss attributable to participating securities	(1)		—		(3)		—
Net income (loss) attributable to ordinary shareholders – basic and diluted	$	454	$	—	$	1,817	$	(3)

Millions of shares, except per share amounts
Basic weighted average common stock outstanding	334		334		371		371
Effect of dilutive securities	—		—		—		—

Potential dilutive shares	334		334		371		371

Earnings (loss) per share:
Basic	$	1.36	$	—	$	4.90	$	(0.01)
Diluted	$	1.36	$	—	$	4.89	$	(0.01)

Nine Months Ended September 30,
2019 2018
Millions of dollars
Continuing
Operations

Discontinued
Operations

Continuing
Operations

Discontinued
Operations
Net income (loss) $ 2,792
$ (7 ) $ 4,001
$ (3 )
Dividends on A. Schulman Special Stock (5 ) —
—
—
Net income attributable to participating securities (5 ) —
(4 ) —
Net income (loss) attributable to ordinary shareholders – basic and diluted $ 2,782
$ (7 ) $ 3,997
$ (3 )

Millions of shares, except per share amounts
Basic weighted average common stock outstanding 360
360
391
391
Effect of dilutive securities:
Performance share units —
—
1
1
Potential dilutive shares 360
360
392
392

Earnings (loss) per share:
Basic $ 7.74
$ (0.02 ) $ 10.21
$ (0.01 )
Diluted $ 7.74
$ (0.02 ) $ 10.19
$ (0.01 )

Participating securities 0.6
0.6
0.5
0.5
Dividends declared per share of common stock $ 3.10
$ —
$ 3.00
$ —

3228

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

~~14.~~12. Segment and Related Information

Our ~~operating segments~~operations are managed by senior executives who report to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the operating results of each of the operating segments for performance evaluation and resource allocation. The activities of each of our segments from which they earn revenues and incur expenses are described below:

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

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

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

•Advanced Polymer Solutions (“APS”). Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers, which includes Catalloy and polybutene-1.

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

•

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


•	~~Olefins and Polyolefins–Europe, Asia, International~~ ~~(“O&P–EAI”). Our O&P–EAI segment produces and markets olefins and co-products, polyethylene, and polypropylene.~~


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


•	~~Advanced Polymer Solutions~~ ~~(“APS”)~~. Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers, which includes ~~Catalloy~~ ~~and polybutene-1.~~


•	~~Refining~~. Our Refining segment refines heavy, high-sulfur crude 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.

Our chief operating decision maker uses EBITDA as the primary measure for reviewing profitability of our ~~segments’ profitability~~segments, and therefore, we have presented EBITDA for all segments. We define EBITDA as earnings before interest, income taxes, and depreciation and amortization.

“Other” includes intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains or losses and components of pension and other postretirement benefit costs other than service ~~cost.~~costs. Sales between segments are made primarily at prices approximating prevailing market prices.

Summarized financial information concerning reportable segments is shown in the following ~~table~~tables for the periods presented:


	Three Months Ended September 30, 2019																			Three Months Ended June 30, 2020
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining			Technology		Other			Total		Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:																			Sales and other operating revenues:
Customers	$	1,337	$	2,138	$	1,988	$	1,186	$	1,952		$	121	$	—		$	8,722	Customers	$	1,073	$	1,642	$	1,140	$	700	$	854	$	137	$	—	$	5,546
Intersegment	800		171		58		—		182			25		(1,236		)	—		Intersegment	360		60		17		5		65		40		(547)		—
	2,137		2,309		2,046		1,186		2,134			146		(1,236		)	8,722			1,433		1,702		1,157		705		919		177		(547)		5,546
Income from equity investments	12		36		1		2		—			—		—			51		Income from equity investments	7		51		3		—		—		—		—		61
EBITDA	653		291		390		102		(6		)	83		—			1,513		EBITDA	248		185		101		(44)		165		112		(7)		760

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Three Months Ended September 30, 2018
Millions of dollars O&P–
Americas O&P–
EAI I&D APS Refining Technology Other Total
Sales and other operating revenues:
Customers $ 1,843
$ 2,434
$ 2,463
$ 1,038
$ 2,236
$ 141
$ —
$ 10,155
Intersegment 927
209
46
1
263
30
(1,476 ) —
2,770
2,643
2,509
1,039
2,499
171
(1,476 ) 10,155
Income from equity investments 18
69
2
—
—
—
—
89
EBITDA 704
262
504
70
84
98
10
1,732

Nine Months Ended September 30, 2019
Millions of dollars
O&P–
Americas

O&P–
EAI
I&D APS Refining Technology Other Total
Sales and other operating revenues:
Customers $ 4,055
$ 6,764
$ 5,860
$ 3,781
$ 5,706
$ 382
$ —
$ 26,548
Intersegment 2,307
585
142
2
490
78
(3,604 ) —
6,362
7,349
6,002
3,783
6,196
460
(3,604 ) 26,548
Income from equity investments 35
139
5
—
—
—
—
179
EBITDA 1,804
918
1,228
370
(87 ) 273
14
4,520


	Nine Months Ended September 30, 2018																		Three Months Ended June 30, 2019
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other			Total		Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:																		Sales and other operating revenues:
Customers	$	5,324	$	7,866	$	7,314	$	2,709	$	6,536	$	379	$	—		$	30,128	Customers	$	1,325	$	2,283	$	2,020	$	1,257	$	2,011	$	152	$	—	$	9,048
Intersegment	2,634		637		122		1		789		89		(4,272		)	—		Intersegment	789		222		42		1		169		21		(1,244)		—
	7,958		8,503		7,436		2,710		7,325		468		(4,272		)	30,128			2,114		2,505		2,062		1,258		2,180		173		(1,244)		9,048
Income from equity investments	50		199		4		—		—		—		—			253
Income (loss) from equity investments																		Income (loss) from equity investments	12		52		2		(2)		—		—		—		64
EBITDA	2,131		1,036		1,632		314		251		267		24			5,655		EBITDA	635		331		448		120		(66)		107		4		1,579


	Six Months Ended June 30, 2020
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:
Customers	$	2,246	$	3,706	$	2,872	$	1,793	$	2,190	$	233	$	—	$	13,040
Intersegment	979		220		55		8		177		66		(1,505)		—
	3,225		3,926		2,927		1,801		2,367		299		(1,505)		13,040
Income (loss) from equity investments	9		48		5		(1)		—		—		—		61
EBITDA	614		374		304		69		(107)		168		(16)		1,406


	Six Months Ended June 30, 2019
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:
Customers	$	2,718	$	4,626	$	3,872	$	2,595	$	3,754	$	261	$	—	$	17,826
Intersegment	1,507		414		84		2		308		53		(2,368)		—
	4,225		5,040		3,956		2,597		4,062		314		(2,368)		17,826
Income (loss) from equity investments	23		103		4		(2)		—		—		—		128
EBITDA	1,151		627		838		268		(81)		190		14		3,007

Operating results for our O&P–Americas segment includes LCM inventory valuation charges of $73 million during the first six months of 2020, primarily driven by declines in the prices of heavy liquids and ethylene. During the second quarter of 2020, operating results for our O&P–Americas segment include a LCM inventory valuation benefit of $38 million largely driven by recovery of market prices of heavy liquids and ethylene which were partially offset by declines in the price of polymers.

Our ~~APS~~O&P–EAI segment results for the ~~third~~second quarter and first ~~nine~~six months of ~~2019 include $43~~2020 were negatively impacted by $34 million and ~~$78~~$70 million of LCM inventory valuation charges, respectively, largely due to a decline in the price of ~~integration costs associated with our August 2018 acquisition~~naphtha in the first quarter of ~~A. Schulman.In 2018,~~2020 and a decline in the ~~third~~price of polymers in the second quarter ~~and first nine months include~~ ~~$49 million~~of ~~transaction and integration costs.~~2020.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Operating results for our I&D segment in the second quarter and first six months of 2020 reflect $20 million and $98 million LCM inventory valuation charges, respectively, driven by declines in the prices of various gasoline blending components and butane in the first quarter of 2020 and declines in the prices of benzene and styrene, partially offset by recoveries in the prices of various gasoline blending components and butane, during the second quarter of 2020.

Our APS segment results for the second quarter and first six months of 2020 were negatively impacted by $67 million and $69 million LCM inventory valuation charges, respectively, mainly due to a decline in the price of polymers.

In our Refining segment, operating results include LCM inventory valuation charges of $13 million during the first six months of 2020, primarily driven by declines in the prices of crude oil and refined products. During the second quarter of 2020, our Refining segment operating results include a LCM inventory valuation benefit of $179 million primarily due to the recovery of market prices of crude oil and refined products.

Our APS segment results include integration costs associated with our 2018 acquisition of A. Schulman for the second quarter of 2020 and 2019 of $16 million and $19 million, respectively, and for the first six months of 2020 and 2019 of $30 million and $35 million, respectively.

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


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
EBITDA:
Total segment EBITDA	$	767	$	1,575	$	1,422	$	2,993
Other EBITDA	(7)		4		(16)		14
Less:
Depreciation and amortization expense	(356)		(328)		(698)		(650)
Interest expense	(125)		(81)		(214)		(173)
Add:
Interest income	4		5		7		11
Income from continuing operations before income taxes	$	283	$	1,175	$	501	$	2,195

Three Months Ended
September 30, Nine Months Ended
September 30,
Millions of dollars 2019 2018 2019 2018
EBITDA:
Total segment EBITDA $ 1,513
$ 1,722
$ 4,506
$ 5,631
Other EBITDA —
10
14
24
Less:
Depreciation and amortization expense (327 ) (309 ) (977 ) (908 )
Interest expense (86 ) (90 ) (259 ) (272 )
Add:
Interest income 5
14
16
40
Income from continuing operations before income taxes $ 1,105
$ 1,347
$ 3,300
$ 4,515

Table of Contents

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

GENERAL

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

OVERVIEW

Results were lower in the ~~third~~second quarter and first ~~nine~~six months of ~~2019~~2020 relative to ~~third quarter and first nine months of 2018,~~the comparative 2019 periods, primarily reflecting lower margins and volumes in several segments. In the first six months of 2020, we demonstrated the value of our core strengths in operational excellence, cost management and capital discipline by delivering resilient results despite declines in economic activity associated with the global response to COVID-19. Our olefins and polyolefins businesses continued to benefit from strong demand for polymers used in consumer-driven packaging and healthcare applications. As expected, our Intermediates & Derivatives, Refining and Advanced Polymer Solutions segments were impacted by significant reductions in demand for transportation fuels and polymers utilized in automotive manufacturing and other durable goods markets. We believe the pandemic-driven decline in demand bottomed during the second quarter. As the quarter progressed, demand and prices for polyethylene exports from North America improved and the U.S. ethane feedstock advantage returned during May and June of 2020 with rebounding crude oil prices. We applied our experience with the first quarter progression of events in Asia to manage our global businesses and generate $1.3 billion of cash from operating activities during a challenging second quarter. We also moved quickly to strengthen our balance sheet and bolster liquidity, and believe we remain well-positioned to navigate through these volatile market conditions.

During the first six months of 2020, we recognized a lower of cost or market (“LCM”) inventory valuation charge of $323 million related to the decline in pricing for many of our raw material and finished goods inventories largely driven by the current economic conditions. Results for our second quarter of 2020 include a LCM inventory valuation benefit of $96 million largely driven by the recovery of market prices of crude oil and refined products since March 31, 2020. Further sustained price declines in our finished goods and raw materials could result in future LCM inventory valuation charges during the remainder of 2020. The extent to which further charges may occur is dependent on the pool-specific product prices and composition within each individual dollar value LIFO pool at the balance sheet date. However, if pricing trends improve, some or all of these charges could be reversed in future quarterly interim periods during 2020.

Events surrounding the ongoing COVID-19 pandemic, continue to evolve and impact global markets and demand for our products. We assessed accounting matters that generally require consideration of forecasted financial information based on the information reasonably available to us and the uncertain future impacts of COVID-19 and the related economic impacts. We will continue to assess the potential financial statement impacts of COVID-19 and commodity price volatility throughout the duration of the pandemic in accordance with our corporate accounting policies.

We remain committed to the health and safety of our employees, contractors and communities and are following governmental policies and recommendations related to the virus. Our manufacturing operations have been designated as an essential industry to support society’s needs during the pandemic in the majority of the regions in which we operate.

Table of Contents

Significant items that affected our results during the ~~third~~second quarter and first ~~nine~~six months of 2020 relative to the second quarter and first six months of 2019 ~~relative to the third quarter and first nine months of 2018~~ include:

~~Lower~~ •O&P–Americas results declined primarily due to a decline in ~~polyethylene margins while olefins margins improved;~~olefin and polyolefins margins;

•O&P–EAI results ~~benefited from improved~~declined due to lower olefin ~~margins in the third quarter~~ and ~~first nine months of 2019, offset by lower equity income and unfavorable foreign exchange impacts;~~polyolefins margins;

•I&D segment results declined due to margin ~~and volume~~ decreases primarily driven by our intermediate ~~chemicals;~~chemicals and oxyfuels and related products businesses; and

~~Lower Refining~~•APS segment results ~~due to a decline in refining margins.~~declined driven by lower compounding and solutions volumes.

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

~~Executed a~~•Launched production at our U.S. Gulf Coast high-density polyethylene plant using LyondellBasell's next-generation Hyperzone technology;

•Expanding our presence in China with definitive agreements for an integrated olefins and polyolefins joint venture with Liaoning Bora Enterprise Group using our polyolefin technologies;

•In April 2020, issued $2,000 million of guaranteed senior ~~unsecured term loan facility due~~notes. Net proceeds from the sale of the notes totaled $1,974 million; and

•In April 2020, ~~and borrowed the full amount;~~

~~Redeemed $1,000~~repaid $500 million ~~of our 5% senior notes due 2019;~~

~~Executed a three-year, $4,000 million senior unsecured delayed draw term loan credit facility;~~

~~Completed a tender offer to repurchase 35.1 million ordinary shares for a total of $3,099 million, at a price of $88.00 per share;~~

~~Issued €1,000 million of long-term guaranteed notes used to refinance $1,000 million of long-term debt and repay a portion of our outstanding short-term debt; and~~

~~During October 2019, issued $1,000 million of long-term guaranteed notes used to repay our indebtedness~~ outstanding under our ~~Term Loan due 2020.~~Senior Revolving Credit Facility and $500 million outstanding under our U.S. Receivables Facility.

~~Table of Contents~~

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


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	5,546	$	9,048	$	13,040	$	17,826
Cost of sales	4,894		7,542		11,762		14,988
Selling, general and administrative expenses	288		302		583		589
Research and development expenses	25		27		52		55
Operating income	339		1,177		643		2,194
Interest expense	(125)		(81)		(214)		(173)
Interest income	4		5		7		11
Other income, net	4		10		4		35
Income from equity investments	61		64		61		128
Provision for (benefit from) income taxes	(32)		169		43		372
Income from continuing operations	315		1,006		458		1,823
Loss from discontinued operations, net of tax	(1)		(3)		—		(3)
Net income	$	314	$	1,003	$	458	$	1,820

Three Months Ended
September 30, Nine Months Ended
September 30,
Millions of dollars 2019 2018 2019 2018
Sales and other operating revenues $ 8,722
$ 10,155
$ 26,548
$ 30,128
Cost of sales 7,269
8,499
22,257
24,801
Selling, general and administrative expenses 303
309
892
803
Research and development expenses 26
30
81
87
Operating income 1,124
1,317
3,318
4,437
Interest expense (86 ) (90 ) (259 ) (272 )
Interest income 5
14
16
40
Other income, net 11
17
46
57
Income from equity investments 51
89
179
253
Provision for income taxes 136
232
508
514
Income from continuing operations 969
1,115
2,792
4,001
Loss from discontinued operations, net of tax (4 ) (2 ) (7 ) (3 )
Net income $ 965
$ 1,113
$ 2,785
$ 3,998

Table of Contents

RESULTS OF OPERATIONS

Revenues—Revenues decreased by ~~$1,433~~$3,502 million, or ~~14%~~39%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$3,580~~$4,786 million, or ~~12%~~27%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~

2019. Average sales prices in the ~~third~~second quarter and the first ~~nine~~six months of ~~2019~~2020 were lower for most of our products as sales prices generally correlate with crude oil prices, which decreased relative to the corresponding periods in ~~2018.~~2019. These lower prices led to a ~~revenue~~37% and 24% decrease ~~of 15% and 10%~~in revenue in the ~~third~~second quarter and the first ~~nine~~six months of ~~2019,~~2020, respectively. Lower sales volumes resulted in a revenue decrease of 1% and 5%2% relative to the ~~third~~second quarter and first ~~nine~~six months of ~~2018,~~2019, respectively. Unfavorable foreign exchange impacts also resulted in a revenue decrease of 1% ~~and 2%~~each in the ~~third~~second quarter and the first ~~nine~~six months of ~~2019, respectively.~~

The operations of A. Schulman contributed $520 million and $1,674 million of revenues which accounts for the remaining change in revenues for the third quarter and first nine months of 2019, respectively.2020.

Cost of Sales—Cost of sales decreased by ~~$1,230~~$2,648 million, or ~~14%~~35%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$2,544~~$3,226 million, or ~~10%~~22%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019. This decrease ~~in cost of sales is~~ primarily ~~due~~related to lower feedstock and energy costs.

~~SG&A Expenses—Selling, general~~During the first six months of 2020, we recognized LCM inventory valuation charges of $323 million related to the decline in pricing for many of our raw material and ~~administrative (“SG&A”) expenses decreased by $6 million, or 2%, in~~finished goods inventories since December 31, 2019. During the ~~third~~second quarter of ~~2019 compared to~~2020, we recognized a LCM inventory valuation benefit of $96 million largely driven by the ~~third quarter~~recovery of ~~2018~~market prices of crude oil and ~~increased by $89 million, or 11%, in~~refined products during the ~~first~~ ~~nine~~ ~~months of 2019 compared to the first nine months of 2018.~~

In the first nine months of 2019, compared to the corresponding period in 2018, SG&A costs increased, primarily attributable to SG&A expenses incurred related to A. Schulman operations and integration costs of $149 million and $75 million, respectively. These increased costs were partially offset by a decline in employee-related expenses and costs associated with the evaluation and pre-project planning of certain growth projects, each resulting in a 4% decrease in SG&A expenses, relative to the corresponding periods in 2018. In the third quarter of 2019, SG&A expenses decreased mainly due to lower employee-related expenses, relative to the third quarter of 2018.

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second quarter.

Operating Income—Operating income decreased by ~~$193~~$838 million, or ~~15%~~71%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$1,119~~$1,551 million, or ~~25%~~71%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~

2019. Operating income ~~for our I&D, Refining, O&P–Americas and Technology segments declined by $117 million, $90 million, $48 million and $15 million, respectively, relative to~~includes the ~~third~~effects of LCM inventory valuation charges as noted above.

In the second quarter of ~~2018. These decreases were offset in part by increased~~2020, operating income in our O&P–~~EAI and APS segments of $61 million and $19 million, respectively.~~

~~In the first nine months of 2019, operating income for our~~Americas, I&D, ~~Refining, O&P–Americas~~APS, and O&P–EAI segments declined by ~~$408~~$397 million, ~~$332~~$348 million, ~~$332~~$174 million, and ~~$53~~$145 million, respectively, relative to the ~~third~~second quarter of ~~2018. These decreases in operating income~~2019. The declines were partially offset by the increases of operating income in the amount of $226 million and $8 million in our Refining and Technology ~~and APS~~ segments in the second quarter of $82020 compared to the second quarter of 2019.

In the first six months of 2020, operating income declined across all of our segments, including $543 million, $531 million, $223 million, $196 million, $29 million and $3$18 million ~~respectively.~~declines in our O&P–Americas, I&D, APS, O&P–EAI, Refining and Technology segments, respectively, compared to the first six months of 2019.

Income from Equity Investments—Income from our equity investments declined by ~~$38~~$3 million, or ~~43%~~5% in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$74~~$67 million, or ~~29%~~52%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018. These~~2019. The declines were largely as a result of lower sales prices and reduced polyolefin spreads for our joint ventures in our O&P–EAI ~~segment.~~and O&P–Americas segments.

Results for each of our business segments are discussed further in the “Segment Analysis” section below.

Income Taxes—We believe our effective income tax rate for 2020 will be lower than the previously provided guidance of mid-teens. Our effective income tax rate for the ~~third~~second quarter of ~~2019~~2020 was ~~12.3%~~-11.3% compared with ~~17.2%~~14.4% for the ~~third~~second quarter of ~~2018,~~2019, and for the first ~~nine~~six months of ~~2019~~2020 was ~~15.4%~~8.6% compared with ~~11.4%~~16.9% for the first ~~nine~~six months of ~~2018.~~ 2019.

Our effective income tax rate fluctuates based on, among other factors, ~~changes in statutory tax rates,~~ changes in pretax income in countries with varying statutory tax rates, changes in valuation allowances, changes in foreign exchange gains/losses, ~~changes in~~ the amount of exempt income, ~~and~~ changes in unrecognized tax benefits associated with uncertain tax ~~positions.~~positions and changes in tax laws.

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Compared with the three months ended June 30, 2019, the lower effective tax rate for the three months ended June 30, 2020 was primarily attributable to a benefit resulting from various provisions of the CARES Act (-28.9%) including the remeasurement of our deferred tax balances resulting in negative tax expense for the quarter. The lower effective tax rate was further reduced by an increased relative impact of exempt income due to decreased pretax income (-9.6%), partially offset by changes in the pretax income in countries with varying statutory tax rates (2.5%) and tax benefits related to prior year research and development activities (5.9%). Compared with the six months ended June 30, 2019, the lower effective tax rate for the six months ended June 30, 2020 was primarily attributable to the increased relative impact of exempt income due to decreased pretax income (-9.0%), the projected benefit resulting from various provisions of the CARES Act (-6.4%), partially offset by the changes in pretax income in countries with varying statutory tax rates (2.7%) and reduced tax benefits related to prior year research and development activities (2.9%).

Our exempt income primarily includes interest income, export incentives, and equity earnings of joint ventures. Interest income earned by certain of our European subsidiaries through intercompany financings is ~~either untaxed or~~ taxed at rates substantially lower than the U.S. statutory rate. Export incentives relate to tax benefits derived from elections and structures available for U.S. exports. Equity earnings attributable to the earnings of our joint ventures, when paid through dividends to certain European subsidiaries, are exempt from all or portions of normal statutory income tax rates. We currently anticipate the favorable treatment for interest income, dividends, and export incentives to continue in the near term; however, this treatment is based on current law and tax rulings, which could change.

~~We monitor income~~

There continues to be increased attention to the tax ~~developments in countries where we conduct business. In 2017, the U.S. enacted “H.R.1,”~~practices of multinational companies, including certain provisions of H.R.1, also known as the ~~“Tax~~U.S. Tax Cuts and Jobs ~~Act”~~Act (the “Tax Act”) ~~materially impacting~~, the European Union’s state aid investigations, proposals by the Organization for Economic Cooperation and Development with respect to base erosion and profit shifting, and European Union tax directives and their implementation. Management does not believe that recent changes in income tax laws, other than those disclosed and reflected in our financial statements, will have a material impact on our Consolidated Financial Statements, ~~by, among other things, decreasing the~~although new or proposed changes to tax ~~rate, and significantly affecting future periods. To determine the full effects of the~~laws could affect our tax law, we are awaiting the finalization of several proposed U.S. Treasury regulations under the Tax Act that were issued during 2018 and 2019. In prior years, the Company did not assert permanent reinvestment of our foreign earnings. However, as a result of the U.S. Section 245A temporary regulations, the Company does intend to permanently reinvest approximately $550 million of our non-U.S. earnings. Repatriation of these earnings to the U.S.liabilities in the future could result in a tax impact of approximately $60 million. Prior to the issuance of the retroactive temporary regulations, the non-U.S. earnings on the permanent reinvestment could have been distributed tax free.future.

Compared with the three months ended September 30, 2018, the lower effective tax rate for the three months ended September 30, 2019 was primarily attributable to changes in unrecognized tax benefits associated with uncertain tax positions (-7.7%), partially offset by decreased exempt income (2.2%). Compared with the nine months ended September 30, 2018, the higher effective tax rate for the nine months ended September 30, 2019 was primarily attributable to changes in unrecognized tax benefits associated with uncertain tax positions (5.0%) and decreases in exempt income (1.1%), partially offset by a tax benefit related to research and development activities (-2.4%).

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Comprehensive Income—

Comprehensive income (loss) decreased by ~~$418~~$591 million in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$1,579~~$1,738 million in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018,~~2019, primarily due to lower net income and net unfavorable impacts of financial derivative instruments ~~primarily~~ driven by periodic changes in benchmark interest ~~rates and~~rates. In the ~~net unfavorable~~second quarter of 2020, these decreases were partially offset by the favorable impact of unrealized net changes in foreign currency translation adjustments, and in the first six months of 2020 supplemented by the unfavorable impact of unrealized net changes in foreign currency translation adjustments.

The predominant functional currency for our operations outside of the U.S. is the euro. Relative to the U.S. dollar, the value of the euro ~~decreased~~increased during the ~~third~~second quarter and decreased for first ~~nine~~six months of ~~2019~~2020, resulting in net gains and losses, respectively, as reflected in the Consolidated Statements of Comprehensive Income. The net gains and losses ~~attributable~~related to unrealized changes in foreign currency translation impacts ~~include~~were partially offset by pre-tax losses of $37 million in the second quarter of 2020 and pre-tax gains of ~~$65 million and $68~~$2 million in the ~~third quarter and~~ first ~~nine~~six months of ~~2019, respectively,~~2020 which represent the effective portion of our net investment hedges.

In the ~~third~~second quarter and first ~~nine~~six months of ~~2019,~~2020, the cumulative after-tax effects of our derivatives designated as cash flow hedges were net losses of ~~$112~~$26 million and ~~$230~~$364 million, respectively. Pre-tax gains of $3 million and pre-tax losses of $532 million related to forward-starting interest rate swaps, were driven by periodic changes in benchmark interest rates in the second quarter and first six months of 2020, respectively, primarily due to changes in the economy impacting late in the first quarter. The ~~strengthening~~fluctuations of the U.S. dollar against the euro in the ~~third~~second quarter and first ~~nine~~six months of ~~2019~~2020 and periodic changes in benchmark interest rates resulted in pre-tax losses of $69 million and pre-tax gains of ~~$111 million and $164~~$78 million, respectively, related to our cross-currency swaps. Pre-tax gains of $45 million and pre-tax losses of ~~$86 million and $99~~$8 million related to our cross-currency swaps were reclassified from Accumulated other comprehensive loss to ~~Other income, net~~Interest expense in the ~~third~~second quarter and first ~~nine~~six months of 2019. Pre-tax losses of $163 million and $342 million related to forward-starting interest rate swaps were driven by changes in benchmark interest rates in the third quarter and first nine months of 2019.2020, respectively. The remaining change ~~relates~~pertains to our commodity cash flow hedges.

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Segment Analysis

We use earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) as our measure of profitability for segment reporting purposes. This measure of segment operating results is used by our chief operating decision maker to assess the performance of and allocate resources to our operating segments. Intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains or losses and components of pension and other postretirement benefits other than service costs are included in “Other.” For additional information related to our operating segments, as well as a reconciliation of EBITDA to its nearest GAAP measure, Income from continuing operations before income taxes, see Note 1412 to our Consolidated Financial Statements.

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


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2019			2018			2019			2018			Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues:													Sales and other operating revenues:
O&P–Americas segment	$	2,137		$	2,770		$	6,362		$	7,958		O&P–Americas segment	$	1,433	$	2,114	$	3,225	$	4,225
O&P–EAI segment	2,309			2,643			7,349			8,503			O&P–EAI segment	1,702		2,505		3,926		5,040
I&D segment	2,046			2,509			6,002			7,436			I&D segment	1,157		2,062		2,927		3,956
APS segment	1,186			1,039			3,783			2,710			APS segment	705		1,258		1,801		2,597
Refining segment	2,134			2,499			6,196			7,325			Refining segment	919		2,180		2,367		4,062
Technology segment	146			171			460			468			Technology segment	177		173		299		314
Other, including intersegment eliminations	(1,236		)	(1,476		)	(3,604		)	(4,272		)	Other, including intersegment eliminations	(547)		(1,244)		(1,505)		(2,368)
Total	$	8,722		$	10,155		$	26,548		$	30,128		Total	$	5,546	$	9,048	$	13,040	$	17,826
Operating income (loss):													Operating income (loss):
O&P–Americas segment	$	524		$	572		$	1,412		$	1,744		O&P–Americas segment	$	107	$	504	$	345	$	888
O&P–EAI segment	202			141			614			667			O&P–EAI segment	81		226		216		412
I&D segment	314			431			1,000			1,408			I&D segment	24		372		155		686
APS segment	67			48			277			274			APS segment	(83)		91		(13)		210
Refining segment	(52		)	38			(221		)	111			Refining segment	116		(110)		(198)		(169)
Technology segment	73			88			242			234			Technology segment	104		96		151		169
Other, including intersegment eliminations	(4		)	(1		)	(6		)	(1		)	Other, including intersegment eliminations	(10)		(2)		(13)		(2)
Total	$	1,124		$	1,317		$	3,318		$	4,437		Total	$	339	$	1,177	$	643	$	2,194
Depreciation and amortization:													Depreciation and amortization:
O&P–Americas segment	$	118		$	111		$	350		$	326		O&P–Americas segment	$	133	$	117	$	257	$	232
O&P–EAI segment	51			50			156			158			O&P–EAI segment	53		52		106		105
I&D segment	75			71			221			216			I&D segment	74		74		144		146
APS segment	32			22			91			39			APS segment	39		30		83		59
Refining segment	41			45			128			137			Refining segment	49		44		91		87
Technology segment	10			10			31			32			Technology segment	8		11		17		21
Total	$	327		$	309		$	977		$	908		Total	$	356	$	328	$	698	$	650

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	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Income (loss) from equity investments:
O&P–Americas segment	$	7	$	12	$	9	$	23
O&P–EAI segment	51		52		48		103
I&D segment	3		2		5		4
APS segment	—		(2)		(1)		(2)
Total	$	61	$	64	$	61	$	128
Other income (loss), net:
O&P–Americas segment	$	1	$	2	$	3	$	8
O&P–EAI segment	—		1		4		7
I&D segment	—		—		—		2
APS segment	—		1		—		1
Refining segment	—		—		—		1

Other, including intersegment eliminations	3		6		(3)		16
Total	$	4	$	10	$	4	$	35
EBITDA:
O&P–Americas segment	$	248	$	635	$	614	$	1,151
O&P–EAI segment	185		331		374		627
I&D segment	101		448		304		838
APS segment	(44)		120		69		268
Refining segment	165		(66)		(107)		(81)
Technology segment	112		107		168		190
Other, including intersegment eliminations	(7)		4		(16)		14
Total	$	760	$	1,579	$	1,406	$	3,007

Three Months Ended
September 30, Nine Months Ended
September 30,
Millions of dollars 2019 2018 2019 2018
Income from equity investments:
O&P–Americas segment $ 12
$ 18
$ 35
$ 50
O&P–EAI segment 36
69
139
199
I&D segment 1
2
5
4
APS segment 2
—
—
—
Total $ 51
$ 89
$ 179
$ 253
Other income (loss), net:
O&P–Americas segment $ (1 ) $ 3
$ 7
$ 11
O&P–EAI segment 2
2
9
12
I&D segment —
—
2
4
APS segment 1
—
2
1
Refining segment 5
1
6
3
Technology segment —
—
—
1
Other, including intersegment eliminations 4
11
20
25
Total $ 11
$ 17
$ 46
$ 57
EBITDA:
O&P–Americas segment $ 653
$ 704
$ 1,804
$ 2,131
O&P–EAI segment 291
262
918
1,036
I&D segment 390
504
1,228
1,632
APS segment 102
70
370
314
Refining segment (6 ) 84
(87 ) 251
Technology segment 83
98
273
267
Other, including intersegment eliminations —
10
14
24
Total $ 1,513
$ 1,732
$ 4,520
$ 5,655

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Olefins and Polyolefins–Americas Segment

Overview—EBITDA declined in the ~~third~~second quarter and first ~~nine~~six months of 2020 relative to the second quarter and first six months of 2019 ~~relative to the third quarter and first nine months of 2018 primarily~~ due to lower ~~polyethylene margins. Olefins margins increased~~olefin and polyolefin results in challenging market conditions arising from a low oil price environment and the ~~third quarter and first nine months~~impact of ~~2019 relative to the third quarter and first nine months of 2018.~~COVID-19.

Ethylene Raw Materials—We have ~~significant~~ flexibility to vary the raw material mix and process conditions in our U.S. olefins plants in order to maximize profitability as market prices for both feedstocks and products change. Although prices of crude-based liquids and natural gas liquids are generally related to crude oil and natural gas prices, during specific periods the relationships among these materials and benchmarks may vary significantly.

~~As in recent years, strong~~ Strong supplies from ~~the~~ U.S. shale ~~gas/~~oil ~~boom~~and gas in conjunction with the return of U.S. ethane feedstock advantages in June 2020 resulted in ethane being a preferred feedstock in our U.S. ~~plants in 2019. We produced approximately 77% and 81% of our ethylene from ethane in~~plants. In the ~~third~~second quarter and first ~~nine~~six months of 2020 and 2019 ~~respectively, compared to~~ approximately ~~82%~~60% of the raw materials used in ~~the third quarter and first nine months of 2018.~~

~~Table of Contents~~our North American crackers was ethane.

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


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2019		2018		2019		2018		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	2,137	$	2,770	$	6,362	$	7,958	Sales and other operating revenues	$	1,433	$	2,114	$	3,225	$	4,225
Income from equity investments	12		18		35		50		Income from equity investments	7		12		9		23
EBITDA	653		704		1,804		2,131		EBITDA	248		635		614		1,151

Revenues—Revenues for our O&P–Americas segment decreased by ~~$633~~$681 million, or ~~23%~~32%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$1,596~~$1,000 million, or ~~20%~~24%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

Average olefins and polyethylene sales prices were lower in the ~~third~~second quarter and first ~~nine~~six months of 2020 compared to the second quarter and first six months of 2019 ~~compared~~due to the ~~third quarter and first nine months of 2018 due to increased market supply stemming from new industry capacity additions and, to a lesser extent, a~~ lower oil price ~~environment. Polypropylene sales prices decreased with declining propylene feedstock prices.~~environment and the impact of COVID-19. These lower sales prices were responsible for a revenue decrease of ~~25%~~40% and ~~18%~~30% in the ~~third~~second quarter and ~~the~~ first ~~nine~~six months of ~~2019,~~2020, respectively.

~~Higher polyethylene sales volumes in the third quarter of 2019 driven by higher exports~~ Volume increases resulted in a 2% revenue ~~increase. Lower ethylene sales volumes, driven mainly by planned downtime at our Matagorda, Texas~~increase of 8% and ~~Clinton, Iowa facilities, accompanied by softer demand also led to a revenue decrease of 2%~~6% in the second quarter and first ~~nine~~six months of ~~2019.~~2020, respectively.

EBITDA—EBITDA decreased by ~~$51~~$387 million, or 7%61%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$327~~$537 million, or ~~15%~~47%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

Lower olefin results led to a 37% decline in EBITDA ~~declined 4% and 9%~~ in the ~~third~~second quarter of 2020 primarily due to ethylene margin declines of approximately $165 per ton driven by lower co-product prices. The decrease in olefin results in the first six months of 2020 compared to the first six months of 2019 resulted in a 13% decrease in EBITDA, largely driven by lower volumes due to a decline in downstream demand as a result of COVID-19. Polyethylene results declined resulting in a 22% and 20% decrease in EBITDA in the second quarter and first ~~nine~~six months of ~~2019, respectively, due to lower margins. The~~2020, respectively. This decrease ~~in margins~~ was ~~primarily~~ driven by a ~~decrease in polyethylene margins due to decreases~~$277 and $231 per ton reduction in price spreads over ethylene ~~of approximately $320 and $225 per ton for~~in the ~~third~~second quarter and first ~~nine~~six months of ~~2019,~~2020, respectively. Decreased polypropylene results led to a 7% decrease in EBITDA in both the second quarter and first six months of 2020, respectively, ~~driven by increased market supply. Ethylene~~largely due to a decline in margins ~~increased by approximately $165~~attributed to lower price spreads over propylene of $119 and ~~$80~~$111 per ton, in the ~~third~~second quarter and first ~~nine~~six months of ~~2019, respectively,~~2020, respectively.

Segment results declined $73 million, or 6%, during the first six months of 2020, due to ~~lower feedstock costs.~~

~~Lower ethylene sales volumes, as discussed above, resulted in~~ a ~~2% and 5% decline in EBITDA for the third quarter and first nine months of 2019, respectively. The remaining 1% decrease in EBITDA~~LCM inventory valuation charge primarily driven by declines in the ~~third~~prices of heavy liquids and ethylene. Second quarter of 2020 results include a LCM inventory valuation benefit of $38 million, or 6%, related to the reversal of LCM inventory valuation charges recognized in the first quarter of 2020, largely driven by recovery of market prices of heavy liquids and ~~first nine months~~ethylene which were partially offset by declines in the price of ~~2019 is attributable to lower income from our joint venture in Mexico.~~

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Olefins and Polyolefins–Europe, Asia, International Segment

Overview—EBITDA for the ~~third~~second quarter and first six months of ~~2019 increased~~2020 decreased compared to the ~~third~~second quarter ~~of 2018, primarily due to higher volumes~~ and ~~olefins margins, partially offset by lower equity income from our equity investments. EBITDA for the~~ first ~~nine~~six months of 2019 ~~declined compared to the first~~ ~~nine~~ ~~months of 2018~~mainly as a result of lower ~~equity income from our equity investments~~olefin and ~~unfavorable foreign exchange impacts.~~polyolefin results. Results were also decreased due to a LCM inventory charges recognized in the second quarter and first six months of 2020. To improve liquidity during the pandemic we have deferred certain planned maintenance which was scheduled for 2020.

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


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2019		2018		2019		2018		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	2,309	$	2,643	$	7,349	$	8,503	Sales and other operating revenues	$	1,702	$	2,505	$	3,926	$	5,040
Income from equity investments	36		69		139		199		Income from equity investments	51		52		48		103
EBITDA	291		262		918		1,036		EBITDA	185		331		374		627

Revenues—Revenues decreased by ~~$334~~$803 million, or ~~13%~~32%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$1,154~~$1,114 million, or ~~14%~~22%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

Average sales prices in the ~~third~~second quarter ~~of 2019~~ and first ~~nine~~six months of ~~2019~~2020 were lower across most products as sales prices generally correlate with crude oil prices, which on average, decreased compared to the ~~third quarter and first~~ ~~nine~~ ~~months of 2018.~~comparative periods in 2019. These lower average sales prices were responsible for revenue decreases of ~~16%~~32% and ~~8%, respectively~~21% in the ~~third~~second quarter and first ~~nine~~six months of ~~2019.~~

~~Higher sales volumes~~2020, respectively. Volume improvements resulted in a revenue increase of 2% and 1% in the ~~third~~second quarter and first six months of 2020, respectively. Foreign exchange impacts, which on average, were unfavorable resulted in a revenue decrease of 2% in each of the second quarter and first six months of 2020.

EBITDA—EBITDA decreased in the second quarter of 2020 by $146 million, or 44%, compared to the second quarter of 2019 ~~driven~~and by ~~the absence of turnaround activity and less pronounced summer seasonality compared to the third quarter of 2018 resulted in a 6% revenue increase. Lower sales volumes~~$253 million, or 40%, in the first ~~nine~~six months of ~~2019 resulted in 1% lower revenue driven by unplanned maintenance and weaker demand earlier in the year,~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

~~Foreign exchange impacts that, on average, were unfavorable~~Lower olefins results led to a ~~revenue~~29% and 6% decrease in EBITDA in the ~~third~~second quarter and first ~~nine~~ ~~monthsof 2019 relative to the third quarter and first~~ ~~nine~~six months of ~~2018 of 3% and 5%,~~2020, respectively.

~~EBITDA—EBITDA in the third quarter of 2019 increased by $29 million, or 11%, compared to the third quarter of 2018 and decreased by $118 million, or 11%, in the first~~ ~~nine~~ ~~months of 2019 compared to the first~~ ~~nine~~ ~~months of 2018.~~

~~In the third quarter of 2019, margins improved 17% mainly~~ These decreases were primarily due to ~~higher olefins margins, reflecting a~~decreased ethylene prices, which outpaced the decrease ~~of $309 per ton~~ in the weighted average cost of ethylene ~~compared~~by $269 and $197 per ton, respectively. Decreased polypropylene results led to ~~the third quarter of 2018. Higher sales volumes, as discussed above, resulted in~~ a 9% and 10% ~~improvement~~decrease in EBITDA ~~for the third quarter of 2019.~~

~~Margin improvements~~ in the second quarter and first ~~nine~~six months of ~~2019 of 1% were driven by higher olefins margins, reflecting a decrease of $209 per ton in the weighted average cost of ethylene production. These improvements were~~2020, respectively, largely ~~offset by polypropylene margin declines in the first~~ ~~nine~~ ~~months of 2019 mainly~~ due to ~~decreases~~a decline in margins attributed to a reduction in price spreads over propylene ~~of $54~~by $9 and $38 per ~~ton. Polyethylene margins also declined~~ton, in the second quarter and first ~~nine~~six months of ~~2019 due to lower price spreads over ethylene of $35 per ton. Lower sales volumes, as discussed above, resulted in a 1% decline in EBITDA in the first nine months of 2019.~~2020, respectively.

Lower income from our equity investments led to ~~a decrease~~decreases in EBITDA of ~~13% and 6%~~9% in the ~~third quarter and~~ first ~~nine~~six months of ~~2019, respectively. These declines were~~2020 mainly attributable to lower margins ~~in most of~~for our joint ventures asin Saudi Arabia and Asia. Results were further reduced by $34 million, or 10%, in the second quarter of 2020 and $70 million, or 11%, in the first six months of 2020 due to LCM inventory valuation charges resulting from a ~~result~~decline in the price of ~~reduced polyolefin spreads.~~naphtha in the first quarter of 2020 and a decline in the price of polymers in the second quarter of 2020. Unfavorable foreign exchange impacts resulted in a 2% declined in EBITDA in both the ~~third~~second quarter and ~~the~~ first ~~nine~~six months of ~~2019, led to decreases in EBITDA of 3% and 5%, respectively.~~

2020.

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Intermediates and Derivatives Segment

Overview—EBITDA for our I&D segment was lower in the ~~third~~second quarter and first ~~nine~~six months of 2020 compared to the second quarter and first six months of 2019, ~~compared to the third quarter and first nine months of 2018,~~ largely driven by decreased demand and margin ~~and volume decreases primarily in~~erosion due to the impacts of COVID-19, particularly within our intermediate chemicals ~~business.~~and oxyfuels related products.

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


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2019		2018		2019		2018		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	2,046	$	2,509	$	6,002	$	7,436	Sales and other operating revenues	$	1,157	$	2,062	$	2,927	$	3,956
Income from equity investments	1		2		5		4		Income from equity investments	3		2		5		4
EBITDA	390		504		1,228		1,632		EBITDA	101		448		304		838

Revenues—Revenues decreased by ~~$463~~$905 million, or ~~18%~~44%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$1,434~~$1,029 million, or ~~19%~~26%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

Lower average sales prices in the ~~third~~second quarter and first ~~nine~~six months of ~~2019~~2020 for most products, which reflect the impacts of lower feedstock and energy costs and lower demand, were responsible for a revenue decrease of ~~17%~~29% and ~~13%~~20%, ~~respectively, compared to the third quarter and first nine months of 2018. Comparable periods in 2018 benefited from an elevated level of planned and unplanned industry outages.~~respectively. Lower sales volumes resulted in a 4%14% and 5% decrease in revenues in the second quarter and first ~~nine~~six months of ~~2019.~~

2020, respectively. Foreign exchange impacts, ~~that,~~which on average, were unfavorable ~~led to~~resulted in a revenue decrease of 1% in each of the ~~third~~second quarter and first ~~nine~~ ~~monthsof 2019 relative to the third quarter and first~~ ~~nine~~six months of ~~2018 of 1% and 2%, respectively.~~2020.

EBITDA—EBITDA decreased ~~$114~~$347 million, or ~~23%~~77%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$404~~$534 million, or ~~25%~~64%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019 primarily driven by lower margins across most businesses.

~~Lower margins led to declines of 11%~~Oxyfuels and ~~13%~~related products results declined, resulting in a 33% and 15% decrease in EBITDA in the ~~third~~second quarter and first ~~nine~~six months of ~~2019, respectively, relative~~2020, respectively. The decline was a result of lower margins as fuel demand significantly declined in response to the ~~third~~pandemic, including lockdowns and the resulting economic slowdown, as well as a decline in crude oil prices. Decreased intermediate chemicals results led to an EBITDA decrease of 29% and 27% in the second quarter and first ~~nine~~six months of ~~2018.~~2020, respectively. This ~~decline~~decrease was ~~primarily driven by intermediate chemicals~~a result of lower margins across most businesses, in particular styrene, as market supply increased and demand ~~declined~~weakened in ~~the third quarter and first nine months of 2019.~~

2020. Lower volumes resulted in a 11% decrease of EBITDA in the third quarter of 2019. Approximately four-fifths of this decline was in our intermediates products businesses which was primarily driven by the impact of turnarounds.

~~Lower sales volumes in the first nine months of 2019 resulted in a 10% decrease of EBITDA. Reduced demand for~~ propylene oxide and derivatives ~~and intermediates products each contributed approximately two-fifths~~results decreased EBITDA by 9% in the second quarter of ~~this decrease. The remaining decrease was~~2020, driven by ~~logistical limitations~~lower volumes due to lower demand on ~~oxyfuels~~construction, automotive and ~~related products~~furniture industries which were impacted by COVID-19. Propylene oxide and derivatives results declined 7% in the first six months of 2020, driven by lower margins due to increased market competition.

Results of our I&D segment were further reduced by $98 million, or 12%, in the first six months of 2020 due to LCM inventory valuation charges resulting from a ~~service disruption stemming~~decline in the price of various gasoline blending components, butane, benzene and styrene since December 31, 2019. Results in the second quarter were reduced by $20 million, or 4%, due to LCM inventory valuation charges resulting from a ~~fire at a third party terminal on the Houston ship channel.~~

~~Unfavorable foreign exchange impacts~~decline in the ~~third quarter~~price of benzene and styrene, despite price improvements for various gasoline blending components and butane since the first ~~nine months~~quarter of ~~2019, also led to decreases in EBITDA of 1% and 2%.~~

2020.

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Advanced Polymer Solutions Segment

Overview—EBITDA for our APS segment ~~increased~~decreased in the ~~third~~second quarter and first ~~nine~~six months of 2020 relative to the second quarter and first six months of 2019, ~~compared to the third quarter and first nine months of 2018,~~ primarily due to ~~the contribution of EBITDA stemming from the August 2018 acquisition of A. Schulman, partly offset by integration costs as well as~~ lower ~~volumes across most products.~~compounding and solutions volumes.

The following table sets forth selected financial information for the APS ~~segment:~~segment including losses from equity investments, which is a component of EBITDA:


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2019		2018		2019		2018		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	1,186	$	1,039	$	3,783	$	2,710	Sales and other operating revenues	$	705	$	1,258	$	1,801	$	2,597
Income from equity investments	2		—		—		—
Loss from equity investments									Loss from equity investments	—		(2)		(1)		(2)
EBITDA	102		70		370		314		EBITDA	(44)		120		69		268

Revenues—Revenues ~~increased~~decreased by ~~$147~~$553 million, or ~~14%~~44%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$1,073~~$796 million, or ~~40%~~31%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

~~The August 2018 acquisition of A. Schulman contributed $520 million and $1,674 million to revenues of the APS segment~~Sales volumes declined in the ~~third~~second quarter and first ~~nine~~six months of ~~2019, which accounts for a revenue increase of 28% and 53%, respectively.~~

~~The decline in sales volumes in the third quarter of 2019 and the first nine months of 2019~~2020 stemming from lower market demand ~~of advanced polymer products,~~for compounding and solutions, including lower automotive ~~production~~and construction demand, which led to a 39% and 26% decrease in ~~Europe, led to~~revenue in the second quarter and first six months of 2020, respectively. Average sales prices also declined resulting in a 3% decline in revenue in each the second quarter and first six months of 2020. Foreign exchange impacts, which on average, were unfavorable resulted in a revenue decrease of 4%2% in each of the second quarter and first six months of 2020.

EBITDA—EBITDA decreased $164 million, or 137%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 and ~~7% in the first nine months of 2019. Lower average sales prices in the third quarter and first nine months of 2019 led to a further revenue decrease of 7% and 3%, respectively.~~

~~Foreign exchange impacts resulted in a 3% revenue decrease in the third quarter and first nine months of 2019.~~

~~EBITDA—EBITDA increased $32~~by $199 million, or ~~46%, in the third quarter of 2019 compared to the third quarter of 2018 and by $56 million, or 18%~~74%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

~~The operations of A. Schulman contributed $31 million~~

This decrease was driven by decreased compounding and ~~$120 million of~~solutions results which resulted in a 72% and 42% decrease in EBITDA toin the ~~results of the APS segment, which represents an increase of 44% and 38% relative to the third~~second quarter and first ~~nine~~six months of ~~2018. Costs associated with~~2020, respectively. The decrease was largely due to lower volumes driven by reduced automotive demand as a result of economic conditions caused by COVID-19.

EBITDA decreased $67 million, or 56%, in the ~~integration~~second quarter of 2020 compared to the second quarter of 2019 and by $69 million, or 26%, in the first six months of 2020 compared to the first six months of 2019 due to LCM inventory valuation charges resulting from a decline in the price of polymers. Unfavorable foreign exchange impacts reduced EBITDA by 2% and 1% in the second quarter and first six months of 2020, respectively. Integration costs related to the acquisition of A. Schulman were ~~$6 million lower~~relatively unchanged in the ~~third~~second quarter ~~of 2019~~ and ~~$29 million higher in the~~ first ~~nine~~six months of ~~2019, which accounts for an EBITDA increase of 9%~~2020 relative to the ~~third quarter and a decrease of 9% relative to the first nine months of 2018.~~comparative periods in 2019.

Lower volumes as discussed above led to declines of 13% and 14% in EBITDA in the third quarter and first nine months of 2019, respectively. Higher margins in the third quarter of 2019 and in the first nine months of 2019 resulted in a 6% and 3% increase in EBITDA, respectively. The increase was primarily due to decreases in average sales prices which were outpaced by raw material cost decreases across most products.

~~Table of Contents~~

Refining Segment

Overview—EBITDA for our Refining segment increased in the second quarter relative to the second quarter of 2019 due to improved margins on by-products and a favorable mark-to-market gain on crude oil hedging.EBITDA decreased in the ~~third quarter~~first six months of 2020 relative to the first six months of 2019 due to lower ~~industry margins driven by~~volumes and a ~~compressed Maya differential and~~ lower ~~byproduct margins compared to the corresponding period in 2018. For the first nine months~~ of ~~2019, EBITDA decreased due to lower industry margins driven by a compressed Maya differential, lower gasoline crack spreads and lower byproduct margins compared to the corresponding period in 2018.~~cost or market inventory charge.

The following table sets forth selected financial information and heavy crude oil processing rates for the Refining segment and the U.S. refining market margins for the applicable periods. ~~Light Louisiana Sweet,~~“Brent” is a light sweet crude oil ~~while~~and 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.

Table of Contents


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2019			2018		2019			2018		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	2,134		$	2,499	$	6,196		$	7,325	Sales and other operating revenues	$	919	$	2,180	$	2,367	$	4,062
EBITDA	(6		)	84		(87		)	251		EBITDA	165		(66)		(107)		(81)

Heavy crude oil processing rates, thousands of barrels per day	264			232		261			248
Thousands of barrels per day											Thousands of barrels per day
Heavy crude oil processing rates											Heavy crude oil processing rates	237		261		231		260

Market margins, dollars per barrel											Market margins, dollars per barrel
Light crude oil – 2-1-1	$	14.11		$	13.15	$	12.73		$	13.60
Light crude – Maya differential	4.02			8.28		4.16			9.10
Brent - 2-1-1											Brent - 2-1-1	$	4.42	$	12.74	$	5.87	$	10.59
Brent - Maya differential											Brent - Maya differential	8.85		6.26		9.32		5.69
Total Maya 2-1-1	$	18.13		$	21.43	$	16.89		$	22.70	Total Maya 2-1-1	$	13.27	$	19.00	$	15.19	$	16.28

Revenues—Revenues decreased by ~~$365~~$1,261 million, or ~~15%~~58%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and by ~~$1,129~~$1,695 million, or ~~15%~~42%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

Lower product prices led to a revenue decrease of ~~14%~~53% and 7%38% relative to the ~~third~~second quarter and first ~~nine~~six months of ~~2018,~~2019, respectively, due to an average crude oil price decrease of approximately ~~$11~~$37 per barrel in the ~~third~~second quarter of ~~2019~~2020 and $5$26 per barrel in the first ~~nine~~six months of ~~2019. Although heavy crude oil processing rates increased during the third quarter and first nine months of 2019, overall sales volumes decreased, driven by reduced~~2020. In addition, rates on conversion units were lower due to an unplanned outage at our fluid catalytic cracking unit, as well as crude selection and the optimization of refinery operations. ~~This reduction in conversion~~Heavy crude oil processing rates ~~resulted in a further revenue decrease of 1% and 8%~~decreased during ~~third~~the second quarter and first ~~nine~~six months of ~~2019,~~2020, leading to a decrease in overall sales volumes of 5% and 4%, respectively.

EBITDA—EBITDA ~~decreased~~increased by ~~$90~~$231 million, or ~~107%~~350%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and decreased by ~~$338~~$26 million, or ~~135%~~32%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

Results of our Refining segment were reduced by $13 million, or 16%, in the first six months of 2020, due to an LCM inventory valuation charge resulting from a decline in the prices of crude oil and refined products since December 31, 2019. Results in the second quarter of 2020 include a LCM inventory valuation benefit of $179 million as market prices recovered since March 31, 2020, resulting in a 271% increase in EBITDA.

Margins increased by 90% and 11% in the second quarter and first six months of 2020, respectively, primarily due to increased margins of the primary by-products of our crude processing units and a favorable mark-to-market gain on crude oil hedging. This increase was partially offset by unplanned outages at our fluid catalytic cracking unit, which restricted the yield of higher-margin refined products, and a 30% and 7% decrease in the Maya 2-1-1 market margin in the second quarter and first six months of 2020, relative to the comparable periods in 2019, driven primarily by lower refined product cracks. Lower ~~refining margins~~heavy crude oil processing rates resulted in a ~~145%~~11% and ~~150%~~27% decrease in EBITDA relative to the ~~third~~second quarter and first nine months of 2018, respectively. Unusually low discounts for heavy sour crude oils on the U.S. Gulf Coast created a challenging market for our refining business, leading to a lower light-to-heavy crude price differential and compression in the benchmark Maya 2-1-1 market margin. Margins were further compressed by a negative byproduct impact primarily driven by weakness in Naphtha and refinery grade propylene. This margin driven decrease in EBITDA was partly offset by a 38% and 15% increase associated with the rise in heavy crude oil processing rates that stemmed from improved operations in the third quarter and first ninesix months of 2019, respectively.

4642

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Technology Segment

Overview—EBITDA for our Technology segment increased in the second quarter of 2020 compared to the second quarter of 2019 due to higher catalyst results, but decreased in the ~~third quarter~~first six months of ~~2019~~2020 compared to the ~~third quarter~~first six months of ~~2018,~~2019, primarily due to lower ~~catalyst sales volumes but improved in the first nine months of 2019 compared to the first nine months of 2018 largely due to higher~~ licensing revenues.

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


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2019		2018		2019		2018		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	146	$	171	$	460	$	468	Sales and other operating revenues	$	177	$	173	$	299	$	314
EBITDA	83		98		273		267		EBITDA	112		107		168		190

Revenues—Revenues ~~decreased~~increased by ~~$25 million, or 15%, in the third quarter of 2019 compared to the third quarter of 2018 and by $8~~$4 million, or 2%, in the second quarter of 2020 compared to the second quarter of 2019 and decreased by $15 million, or 5%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

Lower licensing revenues were responsible for a revenue ~~decrease~~decreases of 8%9% and 11% in the ~~third~~second quarter and first six months of ~~2019 relative~~2020 compared to the corresponding ~~period~~periods in ~~2018. However, higher licensing revenues~~2019. Higher catalyst sales volumes, driven by orders from customers to secure inventory early during the pandemic, resulted in ana 10% and 5% increase ~~of 3%~~in revenue in the second quarter and first ~~nine~~six months of ~~2019 compared to the same period in 2018.~~

2020, respectively. Increases in average catalyst sales prices resulted in revenue increases of 4%2% and 3% in the ~~third~~second quarter and first ~~nine~~six months of ~~2019,~~2020, respectively. ~~Lower catalyst sales volumes, driven by the timing of customer orders, resulted in an 8% and 4% decrease in revenue for the third quarter and first nine months of 2019, respectively.~~

Foreign exchange impacts, ~~that,~~which on average, were unfavorable led to a revenue decrease of 1% and 2% in the ~~third~~second quarter and first ~~nine~~ ~~monthsof 2019 relative to the third quarter and first~~ ~~nine~~six months of ~~2018 of 3% and 5%,~~2020, respectively.

EBITDA—EBITDA ~~decreased~~increased by ~~$15~~$5 million, or ~~15%~~5%, in the ~~third~~second quarter of 2020 compared to the second quarter of 2019 ~~compared to the third quarter of 2018~~ and ~~increased~~decreased by $6$22 million, or 2%12%, in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018.~~2019.

~~Higher~~Lower licensing revenues ~~in the first nine months~~were responsible for decreases of ~~2019 resulted~~17% and 21% in ~~an EBITDA increase of 12% as several licensing agreements signed in 2018, primarily in China, were recognized in revenue during~~ the second quarter and first six months of ~~2019. Lower~~2020 compared to the corresponding periods in 2019 as a result of fewer contracts reaching significant milestones and lower average contract values. Higher catalyst ~~sales volumes, as discussed above, resulted in an~~results increased EBITDA ~~decrease of 11%~~by 26% and 5%13% in the ~~third~~second quarter and first ~~nine~~six months of ~~2019, respectively.~~

~~Foreign~~2020, respectively, driven by orders from customers to secure inventory early during the pandemic. Unfavorable foreign exchange impacts ~~which on average, were unfavorable~~reduced EBITDA by 2% and 1% in the ~~third~~second quarter and first ~~nine~~six months of ~~2019 resulted in a decline in EBITDA of 4% and 5%,~~2020, respectively.

4743

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FINANCIAL CONDITION

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


	Nine Months Ended September 30,							Six Months Ended June 30,
Millions of dollars	2019			2018			Millions of dollars	2020		2019
Source (use) of cash:							Source (use) of cash:
Operating activities	$	3,719		$	4,174		Operating activities	$	1,834	$	1,843
Investing activities	(1,210		)	(2,901		)	Investing activities	(1,727)		(456)
Financing activities	(2,382		)	(2,242		)	Financing activities	1,568		(482)

Operating ~~Activities—~~Activities—Cash of ~~$3,719~~$1,834 million generated by operating activities in the first six months of 2020 reflected earnings adjusted for non-cash items, payments for employee bonuses, income taxes, and cash provided by the main components of working capital—Accounts receivable, Inventories and Accounts payable.

In the first six months of 2020, the main components of working capital provided $465 million of cash driven by decreases in Accounts receivable and Inventory, partially offset by a decrease in Accounts payable. The decrease in Accounts receivable was primarily driven by lower sales in our Refining, APS and I&D segments due to unfavorable market conditions. The decrease in Inventory was primarily driven by company-wide inventory reduction initiatives as well as lower prices. The decrease in Accounts payable was primarily due to lower cost of sales resulting from lower production across multiple segments driven by unfavorable market conditions.

Cash of $1,843 million generated by operating activities in the first ~~nine~~six months of 2019 reflected earnings adjusted for non-cash items, payments for employee bonuses, income taxes, and cash consumed by the main components of working capital—~~accounts~~Accounts receivable, ~~inventories~~Inventories and ~~accounts~~Accounts payable.

In the first ~~nine~~six months of 2019, the main components of working capital consumed ~~$65~~$538 million of ~~cash driven primarily by an increase in accounts receivable.~~cash. The increase in ~~accounts~~Accounts receivable was ~~largely~~ due to higher sales volumes in our O~~&P-EAI~~&P—EAI segment during the ~~period,~~period. Inventories increased due to inventory build in our Refining and O&P—EAI segments as inventories returned to more balanced levels and operations improved. Lower feedstock and energy costs relative to fourth quarter of 2018, partially offset by higher volumes drove a decrease in ~~accounts receivable in our I&D and APS segments as a result of unfavorable market conditions.~~Accounts payable.

The main components of working capital consumed $73 million of cash in the first nine months of 2018. Inventories increased primarily due to a build in inventory in preparation for turnaround activity at our O&P–EAI segment’s Wesseling, Germany facility. Higher accounts receivable due primarily to higher sales prices in our O&P–Americas and O&P–EAI segments and higher I&D segment sales volumes were more than offset by an increase in accounts payable reflecting higher feedstock costs.Investing Activities

~~Investing Activities~~Investments—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 six months of 2020 we invested $270 million in debt securities that are deemed available-for-sale. We also invested $184 million in equity securities in the first six months of 2020. Our investments in available-for-sale debt securities and equity securities are classified as Short-term investments.

We received proceeds of $511 ~~million and $410~~ million in the first ~~nine~~six months of 2019 ~~and 2018, respectively,~~ upon the sale and maturity of certain of our available-for-sale debt securities. Additionally, in the first ~~nine~~six months of ~~2019~~2020 and ~~2018~~2019 we received proceeds of ~~$332~~$1 million and ~~$64~~$332 million, respectively, on the sale of our investments in equity securities.

~~In the first~~ ~~nine~~ ~~months of 2018, we invested $50 million in debt securities that are deemed available-for-sale. We also invested~~ ~~$64 million~~ ~~in equity securities in the first~~ ~~nine~~ ~~months of 2018. Our investments in available-for-sale debt securities and equity securities are classified as Short-term investments.~~

Upon expiration in June 2018 and September 2018, we settled foreign currency contracts, with notional values totaling €725 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 inflow of $22 million.

~~See Note 9 to the Consolidated Financial Statements for additional information regarding these investments.~~44

~~In August 2018, we acquired A. Schulman for $1,776 million, which is net of $81 million of cash acquired and a liability deemed as a component of the purchase price.~~

Table of Contents

Capital Expenditures—The following table summarizes capital expenditures for the periods presented:


	Nine Months Ended September 30,					Six Months Ended June 30,
Millions of dollars	2019		2018		Millions of dollars	2020		2019
Capital expenditures by segment:					Capital expenditures by segment:
O&P–Americas	$	828	$	800	O&P–Americas	$	394	$	533
O&P–EAI	148		156		O&P–EAI	76		103
I&D	734		248		I&D	658		417
APS	41		41		APS	23		27
Refining	137		128		Refining	37		96
Technology	60		29		Technology	56		34
Other	15		5		Other	4		11
Consolidated capital expenditures	$	1,963	$	1,407	Consolidated capital expenditures	$	1,248	$	1,221

In the first ~~nine~~six months of ~~2019~~2020 and ~~2018,~~2019, our capital expenditures included construction related to our PO/TBA plant at our ~~Channelview,~~Houston, Texas facility, turnaround activities at several sites and other plant improvement projects. Additionally, in the first six months of 2019, our ~~new~~capital expenditures included construction related to our Hyperzone polyethylene plant at our La Porte, Texas ~~facility, turnaround activities at several sites as well as other plant improvement projects.~~facility. The higher level of capital expenditures in the first ~~nine~~six months of ~~2019~~2020 relative to the same period in ~~2018 for~~2019 was primarily driven by an increase in our I&D segment is largely due to the construction of our ~~new~~PO/TBA plant partially offset by a decrease in our O&P–Americas segment related to our Hyperzone polyethylene plant. To reduce operational and financial risk associated with the ongoing COVID-19 pandemic and the significant drop in the price of oil, we are postponing selected growth projects and planned maintenance, including slowing construction activities on our PO/TBA plant. We currently expect that these actions will reduce our 2020 capital expenditures by approximately 20% from our prior guidance of $2.4 billion to our current outlook of $1.9 billion, including investments in our U.S. and European PO joint ventures.

Financing Activities—In the first ~~nine~~six months of ~~2019~~2020 and ~~2018,~~2019, we made payments of ~~$3,752~~$4 million and ~~$801~~$512 million to acquire approximately ~~42.7~~0.1 million and ~~7.7~~5.6 million, respectively, of our outstanding ordinary shares. We also made dividend payments totaling ~~$1,111~~$701 million and ~~$1,176~~$760 million ~~during~~in the first ~~nine~~six months of ~~2019~~2020 and ~~2018,~~2019, respectively. For additional information related to our share repurchases and dividend payments, see Note 1210 to the Consolidated Financial Statements.

In ~~September 2018,~~January 2020, we amended the terms of certain forward-starting interest rate swaps to extend their maturities. Concurrently with the amendment of the swaps, we posted collateral of $238 million related to the liability position held with our counterparties as of the amendment date. For additional information see Note 7 to the Consolidated Financial Statements.

In March 2020, we borrowed $500 million from our Senior Revolving Credit Facility and $500 million from our U.S. Receivables Facility to increase our liquidity.

In April 2020, LYB International Finance III, LLC (“LYB Finance III”), a wholly owned finance subsidiary of LyondellBasell Industries N.V. issued $500 million of 2.875% guaranteed notes due 2025 (the “2025 Notes”) at a discounted price of 99.911%, $500 million of 3.375% guaranteed notes due 2030 (the “2030 Notes”) at a discounted price of 99.813% and $1,000 million of 4.2% guaranteed notes due 2050 (the “2050 Notes”) at a discounted price of 99.373%. Net proceeds from the sale of the notes totaled $1,974 million.

We used the net proceeds from the sale of the notes for general corporate purposes, including to increase our liquidity and manage short-term debt maturities. We invested funds that were not immediately needed for these purposes in short-term investments, including marketable securities.

Additionally, in April 2020 we repaid $500 million outstanding under our Senior Revolving Credit Facility and $500 million outstanding under our U.S. Receivables Facility.

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In May 2020, we terminated and cash settled $2,000 million in notional value of our cross-currency interest rate swaps, designated as cash flows hedges, maturing in 2021 and 2024. Upon termination of the ~~$375~~swaps, we received $346 million ~~6.875% Senior Notes due June 2023 assumed in the acquisition of A. Schulman for a price of 105.156% of par.~~from our counterparties.

In February 2019, LYB Americas Finance Company LLC, a wholly owned subsidiary of LyondellBasell Industries N.V., entered into a 364-day, $2,000 million senior unsecured term loan credit agreement and borrowed the entire amount. The proceeds of this term loan, which is fully and unconditionally guaranteed by LyondellBasell Industries N.V., were used for general corporate purposes and to redeem the remaining $1,000 million outstanding of our 5% Senior Notes due 2019 at par.

~~In the first nine months of 2019 we borrowed $1,000 million from our Term Loan due 2022 and $500 million U.S. Receivables Facility which was used to partially fund the July 2019 share repurchase.~~

In September 2019, LYB International Finance II B.V. (“LYB Finance II”), a wholly owned finance subsidiary of LyondellBasell N.V., issued €500 million of 0.875% guaranteed notes due 2026 (the “2026 Notes”) at a discounted price of 99.642% and €500 million of 1.625% guaranteed notes due 2031 (the “2031 Notes”) at a discounted price of 98.924%. We used the net proceeds from the 2026 Notes and the 2031 Notes to repay $1,000 million outstanding under our Term Loan due 2022, and a portion of borrowings from our commercial paper program.

Through the issuance and repurchase of commercial paper instruments under our commercial paper program, we received net proceeds of $212 million in the first six months of 2020 and made net repayments of ~~$23~~$128 million in the first ~~nine~~six months of ~~2019 and received net proceeds of $140 million in the first nine months of 2018.~~

2019. Additional information related to ~~these notes~~commercial paper can be found in the Liquidity and Capital Resources section below and in Note 76 to the Consolidated Financial Statements.

In February 2019, we purchased the non-controlling interest in our subsidiary that holds our La Porte, Texas methanol facility for $63 million.

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Liquidity and Capital Resources

Overview

As a result of COVID-19, we are taking actions to manage our financial risk. In April 2020, we announced that we reduced our budgeted 2020 capital expenditures by $500 million, bringing our total budget to $1.9 billion. We increased liquidity by $2 billion through the issuance of guaranteed senior notes in April 2020. Additionally, we continue to focus on cost savings while minimizing working capital.

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

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

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

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

We believe that our current liquidity availability and cash from operating activities provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due. Further, we believe the current economic environment will not have an adverse effect on our ability to be in compliance with our debt covenants.

Cash and Liquid Investments

As of ~~September~~June 30, ~~2019,~~2020, we had ~~$529 million of unrestricted cash~~Cash and cash equivalents and marketable securities classified as Short-term investments and held $518 million of tri-party repurchase agreements classified as Prepaid expenses and other current assets. For additional information related to our purchases of marketable securities, see “Investing Activities” above and Note 9 to the Consolidated Financial Statements.totaling $3,203 million.

At ~~September~~June 30, ~~2019,~~2020, we held ~~$436~~$775 million of cash in jurisdictions outside of the U.S., principally in the United Kingdom. There are currently no legal or economic restrictions that would materially impede our transfers of cash.

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Credit Arrangements

At June 30, 2020, we had total debt, including current maturities, of $14,336 million, and $196 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.

We had total unused availability under our credit facilities of ~~$5,011~~$2,541 million at ~~September~~June 30, ~~2019,~~2020, which included the following:

•$~~1,697~~2,017 million under our $2,500 million ~~revolving credit facility,~~Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program. Availability under this facility is net of outstanding borrowings, outstanding letters of credit provided under the facility and notes issued under our commercial paper program. A small portion of our availability under this facility is impacted by changes in the euro/U.S. dollar exchange rate. At ~~September~~June 30, ~~2019,~~2020, we had ~~$786~~$473 million of outstanding commercial paper, net of discount, no ~~outstanding~~borrowings or letters of credit ~~and no~~ outstanding ~~borrowings~~ under ~~the~~this facility; and

•$~~314~~524 million under our $900 million U.S. ~~accounts receivable facility.~~Receivables Facility. Availability under this facility is subject to a borrowing base of eligible receivables, which is reduced by outstanding borrowings and letters of credit, if any. At ~~September~~June 30, ~~2019 there was $500 million of~~2020, we had no borrowings ~~and no~~or letters of credit outstanding under this ~~facility;~~facility.

Our $2,500 million Senior Revolving Credit 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.

~~$3,000 million~~The U.S. Receivables Facility is subject to customary warranties and covenants, 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 ~~our $4,000 million three-year senior unsecured delayed draw term loan facility. Availability under this~~the facility ~~is net of amounts previously borrowed. At September 30, 2019 there were no outstanding borrowings under this facility.~~

At September 30, 2019, we had total debt, including current maturities, of $12,070 million, and $205 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.are guaranteed by LyondellBasell Industries N.V.

In ~~September 2019, LYB Finance II, a wholly owned finance subsidiary of LyondellBasell N.V., issued~~April 2020, we entered into amendments and related documents (collectively, the €500 million of 0.875% guaranteed notes due 2026 at a discounted price of 99.642%, and €500 million of 1.625% guaranteed notes due 2031 at a discounted price of 98.924%. We used the net proceeds from the 2026 Notes and the 2031 Notes“Amendments”) to ~~repay the aforementioned July 2019 $1,000 million borrowing from~~ our (i) Senior Revolving Credit Facility, (ii)Term Loan due 2022, and ~~a portion~~(iii) U.S Receivables Facility (collectively, amended, the “Credit Agreements”). Among other things, the Amendments amended each Credit Agreement’s gross leverage ratio covenant of ~~borrowings from our commercial paper program.~~3.50 to 1.0 to permit netting of unrestricted cash and cash equivalents in excess of $300 million (with certain restriction on non-US cash) and, in respect of the Senior Revolving Credit Facility and Term Loan due 2022, restrict certain dividends and other specified restricted payments.

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~~The 2026~~In April 2020, we issued the 2025 Notes, the 2030 Notes, and ~~2031~~2050 Notes. The 2025 Notes, 2030 Notes and 2050 Notes may be redeemed before the date that is one month, three months, or six months, respectively, prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable ~~Comparable Government Bond Rate~~treasury yield plus 3040 basis points in the case of the ~~2026~~2025 Notes ~~and 35~~or 45 basis points in the case of the ~~2031~~2030 Notes and 2050 Notes) on the notes to be redeemed. The ~~notes~~2025 Notes, 2030 Notes and 2050 Notes may also be redeemed on or after the date that is one month, three months, or six months, respectively, prior to the scheduled ~~maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. The notes are also redeemable upon certain tax events.~~

In October 2019, LYB International Finance III LLC, a wholly owned finance subsidiary of LyondellBasell N.V., issued $1,000 million of 4.2% guaranteed notes due 2049 (the “2049 Notes”) at a discounted price of 98.488%. Net proceeds from the sale of the notes totaled $974 million.

The 2049 Notes may be redeemed before the date that is six months prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable Treasury Yield plus 35 basis points) on the notes to be redeemed. The notes may also be redeemed on or after the date that is six months prior to the final maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. The notes are also redeemable upon certain tax events.

We may repay or redeem our debt, including purchases of our outstanding bonds in the open market, using cash and cash equivalents, cash from our short-term investments, ~~and tri-party repurchase agreements,~~ cash from operating activities, proceeds from the issuance of debt, proceeds from asset divestitures, or a combination thereof. In connection with any repayment or redemption of our debt, we may incur cash and non-cash charges, which could be material in the period in which they are incurred.

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

For additional information, see Note 76 to our Consolidated Financial Statements.

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Share Repurchases

Upon completion of the tender offer in July 2019, we repurchased 35.1 million ordinary shares at a tender offer price of $88.00 per share for a total of $3,099 million, including $6 million of fees and expenses related to the tender offer. In conjunction with the tender offer, we financed the share repurchase by borrowing $1,000 million from our Term Loan due 2022, $500 million from our U.S. Receivables Facility, and $1,280 million from our commercial paper program, with the remainder funded by operating cash.

In ~~September 2019~~,May 2020, our shareholders approved a proposal to authorize us to repurchase up to ~~33.3~~34.0 million of our ordinary shares through ~~March 12,~~November 29, 2021, which superseded any prior repurchase authorizations. Our share repurchase authorization does not have a stated dollar amount, and purchases may be made through open market purchases, private market transactions or other structured transactions. Repurchased shares could be retired or used for general corporate purposes, including for various employee benefit and compensation plans. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased. In the first ~~nine~~six months of ~~2019,~~2020, we purchased approximately ~~42.7~~0.1 million shares under our share repurchase authorization for approximately ~~$3,728~~$4 million.

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As of ~~October 30, 2019,~~July 29, 2020, we had approximately ~~33.3~~34.0 million shares remaining under the current authorization. The timing and amounts of additional shares repurchased, if any, will be determined based on our evaluation of market conditions and other factors, including any additional authorizations approved by our shareholders. For additional information related to our share repurchase authorizations, see Note 1210 to the Consolidated Financial Statements.

~~Major Projects~~Capital Budget

~~In July 2017, we announced~~As a result of the coronavirus and current market conditions, the Company has postponed selected growth projects and planned maintenance, including slowing construction activities on our ~~final investment decision~~PO/TBA plant. We currently expect that these actions will reduce 2020 capital expenditures to ~~build~~$1.9 billion. This represents a 20% decrease compared to our budget as of December 31, 2019. Our capital expenditures budget includes approximately $75 million for investments in our U.S. and European PO joint ventures. Once complete, our world-scale PO/TBA plant ~~in Texas with a~~will have the capacity ~~of 1 billion pounds~~to produce 470 thousand tons of PO and ~~2.2 billion pounds~~1.0 million tons of tertiary butyl alcohol. ~~In August 2018, we broke ground on this project, which is estimated to cost approximately $2.4 billion.~~ We ~~anticipate~~expect the project to be ~~completed~~complete in the second half of ~~2021.~~2022.

Equity Investment

In ~~May 2017,~~March 2020, we ~~commenced construction~~signed a definitive agreement to expand in China through a 50% joint venture with the Liaoning Bora Enterprise Group (“Bora”). The joint venture with Bora will operate a 1.1 million ton ethylene cracker and associated polyolefin derivative complex in Panjin, China. We estimate investing CNY 3.3 billion (approximately $460 million) in the joint venture and expect commissioning to begin in the third quarter of 2020.

CURRENT BUSINESS OUTLOOK

Demand for our products is improving with increased economic activity. In June and July of 2020, we raised operating rates and prices in response to increased demand for North American polyethylene exports to Asia. During the third quarter of 2020, we anticipate operating our North American ethylene plants at approximately 95% of nameplate capacity, and our European crackers are expected to operate at approximately 90% of nameplate capacity. With increased mobility and reductions in fuel inventories, we expect improving demand for our refining and oxyfuels and related products businesses. Accordingly, we anticipate our operating rates at our refinery to be approximately 85% to 90% of nameplate capacity during the third quarter of 2020. In response to lower demand for certain products, we had previously idled production at several small plants in the Advanced Polymer Solutions segment serving automotive end markets and reduced production rates at other plants. As demand rebounds for our plastics used in automotive manufacturing, in July 2020, we restarted most of our plants previously idled, and we plan to operate our compounding capacity at rates that match automotive demand.

We expect the recent startup of our Hyperzone ~~high-density~~ polyethylene ~~plant~~capacity, the establishment of new Asian joint ventures and the integration of our A. Schulman acquisition will benefit us. We accelerated our plans to reduce capital expenditures and are aggressively managing our inventories to prioritize liquidity and maximize cash flow. Our focus on funding the dividend while remaining committed to a strong investment grade balance sheet continues to be the foundation of our capital deployment strategy.

Despite the volatile macro-economic environment, we believe our leading portfolio, advantaged positions and disciplined approach will enable us to continue capturing opportunities and delivering resilient results through business cycles.

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CRITICAL ACCOUNTING POLICIES

Inventory—Our inventories are stated at ~~our La Porte, Texas site,~~the lower of cost or market (“LCM”). Cost is determined using the last-in, first-out (“LIFO”) inventory valuation methodology, which ~~is now estimated~~means that the most recently incurred costs are charged to cost ~~approximately $900 million. We~~of sales and inventories are ~~commissioning~~valued at the ~~plant~~earliest acquisition costs. Market value is determined based on an assessment of the current estimated replacement cost and selling price of the inventory.

During the first six months of 2020, we recognized LCM inventory valuation charges of $323 million related to the decline in pricing for many of our raw material and finished goods inventories. During the second ~~half~~quarter of ~~2019~~2020, we recognized a LCM inventory valuation benefit of $96 million, largely driven by the recovery of market prices of crude oil and ~~expect sales volumes~~refined products during the quarter. In the first quarter of 2020, ~~with increasing profitability throughout~~market price declines in crude oil, heavy liquids and ethylene were the ~~year.~~primary contributors to the LCM inventory valuation charges, and representative prices used in the calculation of this LCM inventory valuation charge were $12.14/barrel for crude, $13.50/barrel for heavy liquids and $205/ton for ethylene. In the second quarter of 2020, market price recoveries in crude oil, heavy liquids and ethylene were the primary contributors to the LCM inventory valuation benefit. Representative prices used in the calculation of the LCM inventory valuation benefit were $32.22/barrel for crude, $40.42/barrel for heavy liquids and $276/ton for ethylene.

~~CURRENT BUSINESS OUTLOOK~~

~~Our businesses continue to benefit~~Since our inventory consists of manufactured products derived from ~~low-cost~~crude oil, natural gas, ~~liquid~~natural gas liquids and correlated materials, as well as the associated feedstocks ~~with favorable prices persisting into October 2019. We expect to see typical seasonal softening of demand~~and intermediate chemicals, our inventory market values are generally influenced by changes in the ~~final months~~benchmark of ~~2019. At~~crude oil and heavy liquid values and prices for manufactured finished goods. The degree of influence of a particular benchmark may vary from period to period, as the ~~same time, profitability at our Houston refinery should begin to improve during the fourth quarter of 2019 with increasing demand for low-sulfur marine fuels ahead~~composition of the ~~International Maritime Organization (“IMO”) 2020 regulation deadline.~~dollar value LIFO pools change. Additionally, an LCM condition may arise due to a volumetric decline in a particular material that had previously provided a positive impact within a pool. As a result, market valuations and LCM conditions are dependent upon the inventory composition at the balance sheet date. In the measurement of an LCM adjustment, the numeric input value for determining the crude oil market price includes pricing that is weighted by volume of inventories held at a point in time, including WTI, Brent and Maya crude oils.

Currently, ten out of our eleven LIFO inventory pools are “at-risk” for further adjustment as each impacted LIFO pool has been

reduced to, or close to, the calculated market value at the last balance sheet measurement date. “At-risk” inventory accounts for

$2.6 billion of our total inventory carrying value as of June 30, 2020. The extent to which further adjustment may occur is dependent on the pool specific product prices and composition within each individual dollar value LIFO pool at the balance sheet date. Further sustained price declines in our finished goods and raw materials could result in future LCM inventory valuation charges. However, if pricing trends reverse, some, or all of these charges could be reversed in future quarterly interim periods during 2020.

ACCOUNTING AND REPORTING CHANGES

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

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

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

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

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

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

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

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

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

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

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

•our ability to acquire new businesses and assets and integrate those operations into our existing operations and make cost-saving changes in operations;

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

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

•uncertainties related to the extent and duration of the pandemic-related decline in demand, or other impacts due to the pandemic in geographic regions or markets served by us, or where our operations are located, including the risk of prolonged recession;

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

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

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

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

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

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

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

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

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

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

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market and regulatory risks is described in Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. Our exposure to such risks has not changed materially in the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

Item 4. CONTROLS AND PROCEDURES

As of ~~September~~June 30, ~~2019~~,2020, with the participation of our management, our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer) carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the Act), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Act). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were ~~operating effectively~~effective as of ~~September~~June 30, ~~2019.~~2020.

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

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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Information regarding our litigation and other legal proceedings can be found in Note 119 to the Consolidated Financial Statements, which is incorporated into this Item 1 by reference.

The following is a description of environmental proceedings to which a governmental authority is a party and potential monetary penalties are reasonably likely to be $100,000 or more:

In September 2019, the Illinois Environmental Protection Agency referred three emission events that occurred at our Tuscola facility in ~~August~~September and ~~September~~October 2018 to the Illinois Attorney General's Office ~~(“IAG”)~~(IAG) for enforcement. In ~~October 2019,~~June 2020, the parties entered into a Stipulation and Proposal for Settlement with a penalty of $120,000.

On May 19, 2020, the IAG ~~made a $225,000 civil penalty demand. We are currently engaged in settlement discussions.~~

~~In June 2014,~~notified us that the Illinois Environmental Protection Agency ~~Region V issued a Notice and Finding of Violation alleging violations~~had referred six emission events that occurred at our ~~Tuscola, Illinois~~Morris facility ~~related~~in 2018 and 2019 for enforcement. Equistar is planning to ~~flaring activity. The Notice generally alleges failure~~meet with the IAG to ~~conduct~~discuss resolution of this matter. We reasonably believe that the IAG may assert a ~~valid performance test and improper flare operations. After engaging~~penalty demand in ~~discussions, in September 2019, we and Region V executed settlement documents resolving the matter, requiring payment~~excess of ~~a $25,000 penalty and performance of a supplemental environmental project.~~$100,000.

Additional information about our other environmental proceedings can be found in Part I, Item 3 of our ~~2018~~2019 Annual Report on Form 10-K and Part II, Item 1 of our Form 10-Q for the quarter ended March 31, 2020, which is incorporated into this Item 1 by reference.

Item 1A. RISK FACTORS

There have been no material changes ~~from~~to the risk factors associated with our business previously disclosed in ~~Item 1A of~~“Item 1A. Risk Factors,” in our ~~2018~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2019, and Form 10-Q for the quarter ended March 31, 2020.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

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
July 1 – July 31 35,144,596
$ 88.18
35,144,596
1,887,998
August 1 – August 31 1,887,998
$ 74.77
1,887,998
—
September 1 – September 30 —
$ —
—
33,336,067
Total 37,032,594
$ 87.50
37,032,594
33,336,067

OnIn May ~~31, 2019,~~2020, we announced a share repurchase authorization of up to ~~37,032,594 of our ordinary shares, which was fully utilized during the third quarter. On September 12, 2019, we announced a share repurchase authorization of up to 33.3~~34.0 million of our ordinary shares through ~~March 12,~~November 29, 2021, which superseded any prior repurchase authorizations. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Table of Contents

Item 6. EXHIBITS


Exhibit Number			Description

~~Exhibit Number~~		~~Description~~
10.1+*			Form of Director Restricted Stock Unit Award Agreement
~~4.1~~			Indenture, among LYB International Finance II B.V., as Issuer, LyondellBasell Industries N.V., as Guarantor, and Deutsche Bank Trust Company Americas, as Trustee, dated as of March 2, 2016 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on March 2, 2016)
31.1*
~~4.2~~	Supplemental Indenture, among LYB International Finance II B.V., as Issuer, LyondellBasell Industries N.V., as Guarantor, and Deutsche Bank Trust Company Americas, as Trustee, dated as of September 17, 2019 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on September 17, 2019)

~~4.3~~	~~Form of LYB International Finance II B.V.’s 0.875% Guaranteed Notes due 2026 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on September 17, 2019)~~

~~4.4~~	~~Form of LYB International Finance II B.V.’s 1.625% Guaranteed Notes due 2031 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on September 17, 2019)~~

~~4.5~~	Indenture, among LYB International Finance III, LLC, as Issuer, LyondellBasell Industries N.V., as Guarantor, and Wells Fargo Bank, National Association, as Trustee, dated as of October 10, 2019 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on October 10, 2019)

~~4.6~~	Officer’s Certificate of LYB International Finance III, LLC relating to the 4.200% Guaranteed Notes due 2049, dated as of October 10, 2019 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on October 10, 2019)

~~4.7~~	~~Form of LYB International Finance III, LLC’s 4.200% Guaranteed Notes due 2049 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on October 10, 2019)~~

~~10.1~~	~~Offer Letter dated October 10, 2019 between Michael McMurray and Lyondell Chemical Company (incorporated by reference to our Current Report on Form 8-K filed with the SEC on October 15, 2019)~~

31.1*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2*			Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32*			Certifications pursuant to 18 U.S.C. Section 1350

101.INS*			XBRL Instance Document–The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*	~~XBRL Schema Document~~

101.CAL*	~~XBRL Calculation Linkbase Document~~

~~Table of Contents~~



~~Exhibit Number~~	~~Description~~
101.DEF101.SCH		XBRL Schema Document

101.CAL*		XBRL Calculation Linkbase Document

101.DEF*		XBRL Definition Linkbase Document

101.LAB*		XBRL Labels Linkbase Document

101.PRE*		XBRL Presentation Linkbase Document

104*		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

+ Management contract or compensatory plan, contract or arrangement

* Filed herewith

Table of Contents

SIGNATURE

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


				LYONDELLBASELL INDUSTRIES N.V.

Date:			July 31, 2020	~~LYONDELLBASELL INDUSTRIES N.V.~~

~~Date:~~	~~November 1, 2019~~	/s/ Jacinth C. Smiley
				Jacinth C. Smiley
				Vice President and
				Chief Accounting Officer
				(Principal Accounting Officer)



	~~Netherlands~~	~~98-0646235~~
~~(State or other jurisdiction of~~ ~~incorporation or organization)~~			~~(I.R.S. Employer~~ ~~Identification No.)~~


						(713)						309-7200									+44 (0)						207			220 2600									+31 (0)						10			2755 500



Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


		Page
Part I – Financial Information		1

		~~Page~~
~~Part I – Financial Information~~	1

Item 1. Consolidated Financial Statements (Unaudited)	1
Consolidated Statements of Income		1
Consolidated Statements of Comprehensive Income		2
Consolidated Balance Sheets		3
Consolidated Statements of Cash Flows		5
Consolidated Statements of ~~Stockholders’~~Shareholders’ Equity		6
Notes to the Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		3632

Item 3. Quantitative and Qualitative Disclosures About Market Risk		5451

Item 4. Controls and Procedures		5451

Part II – Other Information		5552

Item 1. Legal Proceedings		5552

Item 1A. Risk Factors		5552

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		5552

Item 4. Mine Safety Disclosures		5552

Item 6. Exhibits		5653

Signature		5854



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



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


		Page			Page
1.	Basis of Presentation	9	1.	Basis of Presentation	9

2.	Accounting and Reporting Changes	9	2.	Accounting and Reporting Changes	9

3.	Business Combination	11	3.	Revenues	10

4.	Revenues	11	4.	Accounts Receivable	11

5.	Accounts Receivable	12	5.	Inventories	12

6.	Inventories	12	6.	Debt	13

7.	Debt	13	7.	Financial Instruments and Fair Value Measurements	16

8.	Leases	17	8.	Income Taxes	22

9.	Financial Instruments and Fair Value Measurements	19	9.	Commitments and Contingencies	22

10.	Income Taxes	25	10.	Shareholders’ Equity and Redeemable Non-controlling Interests	23

11.	Commitments and Contingencies	26	11.	Per Share Data	27

12.	Stockholders’ Equity and Redeemable Non-controlling Interests	27	12.	Segment and Related Information	29

13.	Per Share Data	31

14.	Segment and Related Information	33



Millions of dollars
Last three months of 2019	$	88
2020	317
2021	267
2022	226
2023	197
Thereafter	701
Total lease payments	1,796
Less: Imputed interest	(265		)
Present value of lease liabilities	$	1,531



Millions of dollars	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Operating lease cost	$	90	$	270
Short-term lease cost	41		114
Variable lease cost	12		48
Net operating lease cost	$	143	$	432



	December 31, 2018
	Less than 12 months					Greater than 12 months
Millions of dollars	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Available-for-sale debt securities:
Bonds	$	118	$	(1	)	$	45	$	—



	Nine Months Ended September 30, 2019
Millions of dollars, except shares and per share amounts	Shares Repurchased	Average Purchase Price		Total Purchase Price, Including Commissions and Fees
June 2018 Share Repurchase Authorization	5,648,900	$	86.38	$	488
May 2019 Share Repurchase Authorization	37,032,594	87.50		3,240
	42,681,494	$	87.35	$	3,728



Millions of dollars	Financial Derivatives			Unrealized Gains on Equity Securities and Equity Securities Held by Equity Investees			Defined Benefit Pension and Other Postretirement Benefit Plans			Foreign Currency Translation Adjustments			Total
Balance – January 1, 2018	$	(120	)	$	17		$	(421	)	$	(761	)	$	(1,285	)
Adoption of accounting standards	(2		)	(17		)	(51		)	—			(70		)
Other comprehensive income (loss) before reclassifications	186			—			—			(48		)	138
Tax expense before reclassifications	(36		)	—			—			(15		)	(51		)
Amounts reclassified from accumulated other comprehensive income (loss)	(81		)	—			26			—			(55		)
Tax (expense) benefit	20			—			(6		)	—			14
Net other comprehensive income (loss)	89			—			20			(63		)	46
Balance – September 30, 2018	$	(33	)	$	—		$	(452	)	$	(824	)	$	(1,309	)



	Three Months Ended September 30, 2018
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other			Total
Sales and other operating revenues:
Customers	$	1,843	$	2,434	$	2,463	$	1,038	$	2,236	$	141	$	—		$	10,155
Intersegment	927		209		46		1		263		30		(1,476		)	—
	2,770		2,643		2,509		1,039		2,499		171		(1,476		)	10,155
Income from equity investments	18		69		2		—		—		—		—			89
EBITDA	704		262		504		70		84		98		10			1,732



	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
July 1 – July 31	35,144,596	$	88.18	35,144,596	1,887,998
August 1 – August 31	1,887,998	$	74.77	1,887,998	—
September 1 – September 30	—	$	—	—	33,336,067
Total	37,032,594	$	87.50	37,032,594	33,336,067