Market Overview

LyondellBasell Reports Third-Quarter 2012 Results and Announces $2.75 per share Special Dividend

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ROTTERDAM, Netherlands, Oct. 26, 2012 /PRNewswire/ --

Third-Quarter 2012 Highlights

  • $851 million income from continuing operations or $1.47 diluted earnings per share
  • Third-quarter EBITDA of $1,565 million
  • Olefins margins in North America remain robust; approximately 85 percent of ethylene production sourced from natural gas liquids (NGLs)
  • Intermediates and Derivatives achieved record performance
  • Announced $2.75 per share special dividend in addition to the regular $0.40 per share interim dividend
  • LyondellBasell joins S&P 500 index

LyondellBasell Industries (NYSE: LYB) today announced earnings for the third quarter 2012 of $851 million, or $1.47 per share. Third-quarter 2012 EBITDA was $1,565 million, inclusive of a $71 million reversal of a non-cash, lower of cost or market inventory valuation adjustment recognized in the second quarter 2012.

Comparisons with the prior quarter and third quarter 2011 are shown below:

Table 1 - Earnings Summary(a)





Three Months Ended

Nine Months Ended





September 30,

June 30,

September 30,

September 30,

Millions of U.S. dollars (except share data)

2012

2012

2011

2012

2011

Sales and other operating revenues

$11,273

$11,248

$12,516

$34,255

$37,202

Net income(a)

844

768

895

2,211

2,358

Income from continuing operations

851

768

912

2,213

2,445

Diluted earnings per share (U.S. dollars):













Net income(b)

1.46

1.33

1.51

3.83

4.12



Income from continuing operations

1.47

1.33

1.54

3.83

4.27

Diluted share count (millions)

577

577

575

577

570

EBITDA(c)

1,565

1,774

1,806

4,567

4,819

EBITDA excluding LCM inventory

      valuation adjustments

1,494

1,845

1,806

4,567

4,819















(a) Includes net loss attributable to non-controlling interests and loss from discontinued operations, net of tax. See Table 11.

(b) Includes diluted loss per share attributable to discontinued operations.

(c) See the end of this release for an explanation of the Company's use of EBITDA and Table 9 for reconciliations of EBITDA to income from continuing operations.

Net income in the third quarter 2012 increased from the second quarter 2012 as a result of lower interest and financing charges. Third quarter 2012 EBITDA was lower than the second quarter 2012, primarily due to lower margins in European olefins. Second quarter 2012 results included $100 million from a hurricane insurance settlement. Results also reflect the following charges and benefits:

Table 2 - Charges (Benefits) Included in Income from Continuing Operations

















Three Months Ended

Nine Months

Ended



September 30,

June 30,

September 30,

September 30,

Millions of U.S. dollars (except share data)

2012

2012

2011

2012

2011

Pretax charges (benefits):













Charges and premiums related

    to repayment of debt

$ - -

$329

$ - -

$329

$12



Reorganization items

- -

- -

- -

(5)

30



Corporate restructurings

- -

- -

14

- -

75



Impairments

- -

- -

19

22

23



Sale of precious metals

- -

- -

- -

- -

(41)



Warrants - mark to market

- -

- -

(22)

10

31



Insurance settlement

- -

(100)

- -

(100)

(34)



Legal recovery

(24)

- -

- -

(24)

- -



Environmental accruals

- -

- -

- -

- -

16



Asset retirement obligation

- -

- -

10

- -

10



Lower of cost or market

    inventory adjustment

(71)

71

- -

- -

- -

Total pretax charges (benefits)

(95)

300

21

232

122

Provision for (benefit from) income

    tax related to these items

35

(109)

(5)

(79)

(15)

After-tax effect of net charges (credits)

($60)

$191

$16

$153

$107

Effect on diluted earnings per share

$0.11

($0.33)

($0.03)

($0.25)

($0.18)

"LyondellBasell continues to perform strongly in a volatile economic environment. We are pleased with the third quarter and year-to-date results as the company advances its strategy. Although the outlook for the global economy is uncertain, we remain focused on safe and reliable operations, continuously improving our cost structure and disciplined growth. Our robust cash generation has allowed us to further reward shareholders through our regular interim dividend of $0.40 per share plus a special dividend of $2.75 per share. The company's dramatic financial improvement over the last couple of years and our significant position within the chemical industry were acknowledged by our recent inclusion in the S&P 500 index," said Jim Gallogly, LyondellBasell Chief Executive Officer. 

"During the third quarter, our segments generally performed well, and results were consistent with their specific business environments and geographic exposures. Our olefins and polyolefins business in North America continues to provide excellent results. In addition to stable NGL price trends throughout the third quarter, our olefins plants utilization exceeded 100 percent of nameplate capacity.  The olefins and polyolefins segment results for Europe, Asia and International (EAI) reflected weak European economic conditions; however, polyolefin sales volumes improved versus the second quarter. Our Intermediates and Derivatives business continues to demonstrate steady performance with exceptional third-quarter oxyfuels results. Refining margins improved in line with the change in industry spreads, but operating limitations at the Houston refinery during the quarter impacted crude processing rates," Gallogly said. "Our previously-announced growth projects remain on schedule. We have initiated a review of additional olefins debottleneck projects targeted to capitalize on the advantage of favorable North American NGL prices," Gallogly indicated. 

OUTLOOK

"We have historically experienced a fourth quarter seasonal slowdown in certain of our segments.   While we expect this to recur, we do not expect a slowdown of the severity experienced in 2011," Gallogly said.

"In North America olefins, we believe that margins will remain strong as fundamental drivers remain intact. We do not expect to see the rapid increase in ethane prices experienced in 2011. Conversely, we expect European olefins and polyolefin results to remain weak in the fourth quarter. However, the differentiated areas of Olefins and Polyolefins – EAI, including polypropylene compounding and joint ventures, are expected to remain steady. Thus far in the quarter, Intermediates and Derivatives segment margins have held firm except oxyfuel margins, which have seasonally declined.  We have one of our German crackers and a U.S. PO/TBA plant finishing turnarounds during the quarter. The Houston refinery is currently operating at normal rates," Gallogly added.

LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT

LyondellBasell operates in five business segments: 1) Olefins and Polyolefins – Americas; 2) Olefins and Polyolefins –EAI; 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.

Olefins and Polyolefins - Americas (O&P-Americas) – The primary products of this segment include ethylene and its co-products (propylene, butadiene and benzene), polyethylene, polypropylene and Catalloy process resins. 



Table 3 - O&P–Americas Financial Overview





Three Months Ended

Nine Months Ended





September 30,

June 30,

September 30,

September 30,

Millions of U.S. dollars

2012

2012

2011

2012

2011

Operating income

$738

$700

$598

$1,957

$1,527

EBITDA

820

776

672

2,194

1,733

EBITDA excluding LCM inventory

  valuation adjustments

749

847

672

2,194

1,733

Three months ended September 30, 2012 versus three months ended June 30, 2012 – O&P-Americas segment EBITDA increased $44 million in the third quarter 2012 versus the second quarter 2012. Excluding the second quarter 2012 hurricane insurance settlement of $29 million and the impact of the $71 million non-cash lower of cost or market (LCM) reversal in the third quarter 2012 to offset the second quarter 2012 LCM inventory valuation charge, underlying EBITDA declined by $69 million. Compared to the prior period, underlying olefins results decreased primarily due to a decline in margins resulting from lower ethylene and co-products prices from naphtha cracking. Ethylene production volume increased as our olefins plants utilization exceeded 100 percent of nameplate capacity. Combined polyolefin results decreased by approximately $25 million from the second quarter 2012 primarily due to lower margins. Polyolefin sales volumes increased approximately 7 percent from the prior quarter. During the third quarter, the segment received $10 million in dividends from the Indelpro joint venture.

Three months ended September 30, 2012 versus three months ended September 30, 2011 – O&P-Americas results increased $148 million in the third quarter 2012 versus the third quarter 2011.  Excluding the impact of the $71 million non-cash LCM reversal in the third quarter 2012 which offset the prior quarter LCM inventory valuation charge, underlying EBITDA increased by $77 million compared to the same period in 2011.  Olefins results increased approximately $30 million compared to the prior year period as a result of higher olefins sales more than offsetting a 2 cents per pound decline in margin.  Combined polyolefin results improved by approximately $50 million primarily due to improved polyethylene margins. The segment received $10 million in dividends from its Indelpro joint venture in the third quarters of 2012 and 2011.

Olefins and Polyolefins - Europe, Asia, International (O&P-EAI) – The primary products of this segment include ethylene and its co-products (propylene and butadiene), polyethylene, polypropylene, global polypropylene compounds, Catalloy process resins and Polybutene-1 resins. 

Table 4 - O&P–EAI Financial Overview



Three Months Ended

Nine Months Ended



September 30,

June 30,

September 30,

September 30,

Millions of U.S. dollars

2012

2012

2011

2012

2011

Operating income

$15

$203

$130

$221

$508

EBITDA

75

335

247

511

849













Three months ended September 30, 2012 versus three months ended June 30, 2012 – O&P-EAI segment EBITDA decreased $260 million in the third quarter 2012 versus the second quarter 2012. Olefins results decreased approximately $210 million from the second quarter 2012, returning the business to approximately breakeven performance which is more reflective of the prevailing industry and economic environment than the strong second quarter results. Olefins production volumes declined in the third quarter 2012 due to a turnaround at Wesseling, Germany. Combined polyolefin results increased approximately $10 million compared to the second quarter primarily driven by approximately a 20 percent increase in polypropylene sales volumes. Polypropylene compounds and polybutene-1 results increased approximately $20 million from the second quarter 2012 mainly driven by margins improvement.  The segment did not receive any joint venture dividends in the third quarter 2012 compared to $59 million in the second quarter.

Three months ended September 30, 2012 versus three months ended September 30, 2011 – O&P-EAI segment EBITDA declined $172 million versus the third quarter 2011. Olefins results declined by approximately $140 million, primarily as a result of lower margins. Production volume was lower in the third quarter 2012 versus the corresponding period in 2011 due to a turnaround at Wesseling, Germany. Polyolefin results increased by approximately $15 million primarily as a result of higher polypropylene margins in the third quarter 2012. Polypropylene compounds and polybutene-1 results were approximately $15 million higher than the prior year due to higher margins. The third quarter in 2011 included $45 million related to dividend payments from joint ventures.

Intermediates and Derivatives (I&D) – The primary products of this segment include propylene oxide (PO) and its co-products (styrene monomer, tertiary butyl alcohol (TBA), isobutylene and tertiary butyl hydroperoxide), and derivatives (propylene glycol, propylene glycol ethers and butanediol), acetyls, ethylene oxide and its derivatives, and oxyfuels.  

Table 5 - I&D Financial Overview



Three Months Ended

Nine Months Ended



September 30,

June 30,

September 30,

September 30,

Millions of U.S. dollars

2012

2012

2011

2012

2011

Operating income

$424

$390

$368

$1,184

$971

EBITDA

475

455

417

1,348

1,157













Three months ended September 30, 2012 versus three months ended June 30, 2012 I&D segment EBITDA increased $20 million versus the second quarter 2012. Results for PO, PO derivatives, and intermediate chemicals were relatively unchanged. Oxyfuels results increased by approximately $60 million, driven by higher sales volumes and stronger margins in the third quarter 2012 compared to the prior period. Oxyfuels margins gained strength as the crude oil-to-natural gas spread expanded in the third quarter 2012. Second quarter 2012 EBITDA included an $18 million insurance settlement and $14 million of dividends from our Asian PO joint ventures.

Three months ended September 30, 2012 versus three months ended September 30, 2011 – I&D EBITDA increased $58 million compared to the third quarter 2011.  Intermediate chemicals results decreased approximately $30 million versus the prior year period mainly due to lower margins in the derivatives businesses. The third quarter 2011 prices benefitted from several competitor outages. Oxyfuels results improved approximately $80 million in the 2012 period primarily as a result of stronger margins. 

Refining – The primary products of this segment include gasoline, diesel fuel, heating oil, jet fuel, and petrochemical raw materials.

Table 6 - Refining Financial Overview



Three Months Ended

Nine Months Ended



September 30,

June 30,

September 30,

September 30,

Millions of U.S. dollars

2012

2012

2011

2012

2011

Operating income

$114

$124

$390

$248

$806

EBITDA

150

161

427

359

910













Three months ended September 30, 2012 versus three months ended June 30, 2012 – Refining segment EBITDA decreased $11 million versus the second quarter 2012. The Houston refinery operated at 240,000 barrels per day, down 27,000 barrels per day from the prior quarter due to a reduction in throughput resulting from certain operating limitations. The Maya 2-1-1 benchmark crack spread increased $3.49 per barrel to $26.65 per barrel in the third quarter 2012. Relative to the benchmark spread, results continue to be negatively impacted from depressed by-product values such as petroleum coke and various natural gas-based products. The refining segment benefitted in the third quarter from $24 million of restitution related to a former employee's fraudulent activities and in the second quarter from $53 million related to a hurricane insurance settlement.

Three months ended September 30, 2012 versus three months ended September 30, 2011 – Refining segment EBITDA decreased $277 million versus the third quarter 2011 due to fewer opportunities to purchase discounted crude oils, reduced by-product values, and a 29,000 barrels-per-day throughput decline. Throughput decline negatively impacted the third quarter 2012 by approximately $25 million while lower by-products values, such as petroleum coke and various natural gas based products, had a negative impact of approximately $90 million. The refining segment also benefitted from $24 million of restitution in the third quarter 2012 related to a former employee's fraudulent activities.

Technology – The principal products of the Technology segment include polyolefin catalysts and production process technology licenses and related services.













Table 7 - Technology Financial Overview





Three Months Ended

Nine Months Ended





September 30,

June 30,

September 30,

September 30,

Millions of U.S. dollars

2012

2012

2011

2012

2011

Operating income

$31

$30

$7

$99

$96

EBITDA

48

49

45

154

178















Three months ended September 30, 2012 versus three months ended June 30, 2012 – Results were relatively unchanged.

Three months ended September 30, 2012 versus three months ended September 30, 2011 – Results were relatively unchanged.

Liquidity

Company liquidity, defined as cash and cash equivalents plus funds available through established lines of credit, was approximately $6.8 billion on Sept. 30, 2012.  The company's cash balance was approximately $3.5 billion on Sept. 30, 2012.

Capital Spending

Capital expenditures, including maintenance turnarounds, catalyst and information technology-related expenditures, were $267 million in the third quarter 2012.

CONFERENCE CALL

LyondellBasell will host a conference call and webcast to discuss these results today at 11 a.m. ET.  Participating on the call will be Chief Executive Officer Jim Gallogly, Executive Vice President and Chief Financial Officer Karyn Ovelmen, Senior Vice President of Strategic Planning and Transactions Sergey Vasnetsov, and Vice President of Investor Relations Doug Pike.

The toll-free dial-in number in the U.S. is 800-369-1609.  For international numbers, please go to the company website, www.lyondellbasell.com/teleconference, for a complete listing of toll-free numbers by country.  The pass code for all numbers is 4807902.

A replay of the call will be available from 2 p.m. ET Oct. 26 until 11 p.m. ET on Nov. 26.  The replay dial-in numbers are 800-839-5569 (U.S.) and +1 402-998-1150 (international). The pass code for each is 9511. The slides that accompany the call will be available at http://www.lyondellbasell.com/earnings.

ABOUT LYONDELLBASELL

LyondellBasell (NYSE: LYB) is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500 Index.  LyondellBasell (www.lyondellbasell.com) manufactures products at 58 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels. 

FORWARD-LOOKING STATEMENTS

The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our debt.  Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended Dec. 31, 2011, which can be found at www.lyondellbasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.

NON-GAAP MEASURES

This release makes reference to certain "non-GAAP" financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended.  We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

We have included EBITDA in this press release. EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. For purposes of this release, EBITDA means net income before net interest expense, income taxes, depreciation and amortization, reorganization items, income from equity investments, net income (loss) attributable to non-controlling interests plus joint venture dividends, as adjusted for other items management does not believe are indicative of the Company's underlying results of operations such as impairment charges, asset retirement obligations and the effect of mark-to-market accounting on our warrants. The specific items for which EBITDA is adjusted in each applicable reporting period may only be relevant in certain periods and are disclosed in the reconciliation of non-GAAP financial measures table. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as alternatives to operating cash flows as a measure of our liquidity. 

Quantitative reconciliations of non-GAAP financial measures are provided in Table 9 at the end of this release.

OTHER FINANCIAL MEASURE PRESENTATION NOTES

This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change. LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.



Media Contact:

David A. Harpole +1 713-309-4125

Investor Contact:

Douglas J. Pike +1 713-309-7141



Table 8 - Reconciliation of Segment Information to Consolidated Financial Information









































































2011 



2012



(Millions of U.S. dollars)

Q1



Q2



Q3



Q4



Total



Q1



Q2



Q3



YTD



Sales and other operating revenues:  

























































Olefins & Polyolefins - Americas

$

3,572



$

4,010



$

3,875



$

3,423



$

14,880



$

3,349



$

3,283



$

3,217



$

9,849





Olefins & Polyolefins - Europe, Asia, International



3,988





4,292





3,954





3,357





15,591





3,898





3,575





3,448





10,921





Intermediates & Derivatives



2,331





2,536





2,491





2,142





9,500





2,485





2,285





2,637





7,407





Refining



2,867





3,996





3,955





2,888





13,706





3,203





3,496





3,272





9,971





Technology



139





126





129





112





506





119





115





124





358





Other/elims



(1,517)





(1,654)





(1,888)





(941)





(6,000)





(1,320)





(1,506)





(1,425)





(4,251)







Continuing Operations

$

11,380



$

13,306



$

12,516



$

10,981



$

48,183



$

11,734



$

11,248



$

11,273



$

34,255







Discontinued Operations

$

872



$

736



$

781



$

463



$

2,852



$

145



$

42



$

56



$

243



Operating income (loss):  

























































Olefins & Polyolefins - Americas

$

421



$

508



$

598



$

328



$

1,855



$

519



$

700



$

738



$

1,957





Olefins & Polyolefins - Europe, Asia, International



175





203





130





(73)





435





3





203





15





221





Intermediates & Derivatives



276





327





368





185





1,156





370





390





424





1,184





Refining



158





258





390





3





809





10





124





114





248





Technology



66





23





7





11





107





38





30





31





99





Other



(1)





(9)





- -





(15)





(25)





- -





2





6





8







Continuing Operations

$

1,095



$

1,310



$

1,493



$

439



$

4,337



$

940



$

1,449



$

1,328



$

3,717







Discontinued Operations

$

(30)



$

(45)



$

(26)



$

(238)



$

(339)



$

6



$

(15)



$

(8)



$

(17)



Depreciation and amortization:

























































Olefins & Polyolefins - Americas

$

58



$

59



$

64



$

65



$

246



$

65



$

71



$

69



$

205





Olefins & Polyolefins - Europe, Asia, International



57





66





69





70





262





69





69





63





201





Intermediates & Derivatives



44





48





46





48





186





47





48





49





144





Refining



32





35





37





49





153





38





37





36





111





Technology



24





16





21





23





84





18





19





18





55





Other



- -





- -





- -





- -





- -





- -





- -





1





1







Continuing Operations

$

215



$

224



$

237



$

255



$

931



$

237



$

244



$

236



$

717







Discontinued Operations

$

- -



$

- -



$

- -



$

- -



$

- -



$

- -



$

- -



$

- -



$

- -



EBITDA: (a)

























































Olefins & Polyolefins - Americas

$

484



$

577



$

672



$

407



$

2,140



$

598



$

776



$

820



$

2,194





Olefins & Polyolefins - Europe, Asia, International



329





273





247





45





894





101





335





75





511





Intermediates & Derivatives



321





419





417





235





1,392





418





455





475





1,348





Refining



190





293





427





67





977





48





161





150





359





Technology



91





42





45





36





214





57





49





48





154





Other



5





(11)





(2)





(24)





(32)





6





(2)





(3)





1







Continuing Operations

$

1,420



$

1,593



$

1,806



$

766



$

5,585



$

1,228



$

1,774



$

1,565



$

4,567







Discontinued Operations

$

(18)



$

(40)



$

(18)



$

(230)



$

(306)



$

8



$

(15)



$

(9)



$

(16)



Capital, turnarounds and IT deferred  

























































spending:  

























































Olefins & Polyolefins - Americas

$

66



$

138



$

149



$

72



$

425



$

102



$

135



$

126



$

363





Olefins & Polyolefins - Europe, Asia, International



42





37





46





110





235





60





39





60





159





Intermediates & Derivatives



5





15





26





55





101





18





24





44





86





Refining



96





49





45





34





224





38





27





24





89





Technology



7





3





8





8





26





9





8





12





29





Other



1





10





- -





6





17





2





3





1





6







Total   



217





252





274





285





1,028





229





236





267





732





Deferred charges included above



(1)





- -





(2)





(4)





(7)





(1)





(3)





(1)





(5)







Continuing Operations

$

216



$

252



$

272



$

281



$

1,021



$

228



$

233



$

266



$

727







Discontinued Operations

$

5



$

9



$

7



$

8



$

29



$

- -



$

- -



$

- -



$

- -





























































































































(a) See Table 9 for a reconciliation of total EBITDA to income from continuing operations. 



Table 9 - Reconciliation of EBITDA to Income from Continuing Operations









































































2011 



2012



(Millions of U.S. dollars)

Q1



Q2



Q3



Q4



Total



Q1



Q2



Q3



YTD



Segment EBITDA:

























































Olefins & Polyolefins - Americas

$

484



$

577



$

672



$

407



$

2,140



$

598



$

776



$

820



$

2,194





Olefins & Polyolefins - Europe, Asia,  



























































International



329





273





247





45





894





101





335





75





511





Intermediates & Derivatives



321





419





417





235





1,392





418





455





475





1,348





Refining



190





293





427





67





977





48





161





150





359





Technology



91





42





45





36





214





57





49





48





154





Other



5





(11)





(2)





(24)





(32)





6





(2)





(3)





1



Total EBITDA



1,420





1,593





1,806





766





5,585





1,228





1,774





1,565





4,567



Adjustments to EBITDA:

























































Legal recovery



- -





- -





- -





- -





- -





- -





- -





(24)





(24)





Lower of cost or market inventory  



























































adjustment



- -





- -





- -





- -





- -





- -





71





(71)





- -





Sale of precious metals



- -





(41)





- -





- -





(41)





- -





- -





- -





- -





Corporate restructurings



- -





61





14





18





93





- -





- -





- -





- -





Environmental accruals



- -





16





- -





- -





16





- -





- -





- -





- -





Settlement related to Houston refinery  



























































crane incident



- -





- -





- -





(15)





(15)





- -





- -





- -





- -





Insurance settlement



(34)





- -





- -





- -





(34)





- -





(100)





- -





(100)



Total Adjusted EBITDA



1,386





1,629





1,820





769





5,604





1,228





1,745





1,470





4,443



Add:  

























































Income from equity investments



58





73





52





33





216





46





27





32





105



Deduct:  

























































Adjustments to EBITDA



34





(36)





(14)





(3)





(19)





- -





29





95





124





Depreciation and amortization  



(215)





(224)





(237)





(255)





(931)





(237)





(244)





(236)





(717)





Impairment charges



- -





(4)





(19)





- -





(23)





(22)





- -





- -





(22)





Asset retirement obligation



- -





- -





(10)





- -





(10)





- -





- -





- -





- -





Reorganization items



(2)





(28)





- -





(15)





(45)





5





(1)





- -





4





Interest expense, net



(155)





(164)





(146)





(542)





(1,007)





(95)





(409)





(67)





(571)





Joint venture dividends received



(96)





(11)





(55)





(44)





(206)





(14)





(73)





(10)





(97)





Provision for income taxes



(263)





(388)





(506)





98





(1,059)





(301)





(306)





(435)





(1,042)





Non-controlling interests



(3)





(1)





- -





(3)





(7)





(1)





(2)





(2)





(5)





Fair value change in warrants



(59)





6





22





(6)





(37)





(10)





- -





(1)





(11)





Other



(3)





(1)





5





(5)





(4)





(5)





2





5





2



Income from continuing operations



682





851





912





27





2,472





594





768





851





2,213





Adjustments to EBITDA



(34)





36





14





3





19





- -





(29)





(95)





(124)





Premiums and charges on early  



























































repayment of debt



- -





12





- -





431





443





- -





329





- -





329





Reorganization items



2





28





- -





15





45





(5)





- -





- -





(5)





Asset retirement obligation



- -





- -





10





- -





10





- -





- -





- -





- -





Fair value change in warrants



59





(6)





(22)





6





37





10





- -





- -





10





Impairment charges



- -





4





19





- -





23





22





- -





- -





22





Tax impact of net income (loss)  



























































adjustments



11





(21)





(5)





(154)





(169)





(5)





(109)





35





(79)



Adjusted income from continuing operations

$

720



$

904



$

928



$

328



$

2,880



$

616



$

959



$

791



$

2,366



Earnings (loss) per share:

























































Diluted earnings per share –



























































continuing operations

$

1.19



$

1.46



$

1.54



$

0.05



$

4.32



$

1.03



$

1.33



$

1.47



$

3.83





Adjustments to continuing operations



0.07





0.09





0.03





0.52





0.69





0.04





0.32





(0.11)





0.25





Adjusted diluted earnings per share

$

1.26



$

1.55



$

1.57



$

0.57



$

5.01



$

1.07



$

1.65



$

1.36



$

4.08































































































































 

Table 10 - Selected Segment Operating Information























































2011



2012











Q1



Q2



Q3



Q4



YTD



Q1



Q2



Q3



YTD



Olefins and Polyolefins - Americas







































Volumes (million pounds)









































Ethylene produced

2,089



1,929



2,134



2,201



8,353



1,988



2,134



2,401



6,523







Propylene produced

769



556



838



744



2,907



533



615



633



1,781







Polyethylene sold

1,405



1,377



1,368



1,343



5,493



1,448



1,316



1,434



4,198







Polypropylene sold

585



611



635



640



2,471



650



634



651



1,935





Benchmark Market Prices









































West Texas Intermediate crude oil (USD











































per barrel)

94.60



102.34



89.54



94.06



95.11



103.03



93.35



92.20



96.16







Light Louisiana Sweet ("LLS") crude oil (USD











































per barrel)

107.83



118.34



112.46



110.81



112.40



119.85



108.24



109.36



112.44







Natural gas (USD per million BTUs)

4.19



4.43



4.31



3.64



4.14



2.65



2.33



2.92



2.63







U.S. weighted average cost of ethylene production











































(cents/pound)

32.6



33.8



34.3



41.6



35.6



28.5



18.4



19.7



22.2







U.S. ethylene (cents/pound)

49.3



57.5



55.8



54.4



54.3



54.9



46.9



45.4



49.1







U.S. polyethylene [high density] (cents/pound)

61.7



68.7



63.0



59.7



63.3



67.0



63.0



59.3



63.1







U.S. propylene (cents/pound)

71.7



87.3



76.5



57.8



73.3



67.2



64.2



49.8



60.4







U.S. polypropylene [homopolymer] (cents/pound)

89.3



99.7



90.2



70.7



87.5



81.2



76.7



63.8



73.9















































Olefins and Polyolefins - Europe, Asia, International







































Volumes (million pounds)









































Ethylene produced

997



999



926



807



3,729



947



930



802



2,679







Propylene produced

608



631



560



487



2,286



577



562



493



1,631







Polyethylene sold

1,305



1,279



1,349



1,210



5,143



1,316



1,137



1,253



3,706







Polypropylene sold

1,551



1,494



1,489



1,543



6,077



1,541



1,337