x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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The Netherlands
|
|
|
|
98-0646235
|
(State or other jurisdiction of
incorporation or organization)
|
|
|
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(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
1221 McKinney St.,
Suite 300
Houston, Texas
USA 77010
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4
th
Floor, One Vine Street
London
W1J0AH
The United Kingdom
|
|
Delftseplein 27E
3013 AA Rotterdam
The Netherlands
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(713) 309-7200
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+44 (0) 207 220 2600
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+31 (0)10 275 5500
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Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange On Which Registered
|
Ordinary Shares, €0.04 Par Value
|
|
LYB
|
|
New York Stock Exchange
|
Large accelerated filer
|
x
|
Accelerated filer
|
¨
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Non-accelerated filer
|
¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
|
|
|
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|
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|
|
|
|
|
|
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|
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|
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|
Three Months Ended
March 31, |
||||||
Millions of dollars, except earnings per share
|
2019
|
|
2018
|
||||
Sales and other operating revenues:
|
|
|
|
||||
Trade
|
$
|
8,565
|
|
|
$
|
9,530
|
|
Related parties
|
213
|
|
|
237
|
|
||
|
8,778
|
|
|
9,767
|
|
||
Operating costs and expenses:
|
|
|
|
||||
Cost of sales
|
7,446
|
|
|
8,012
|
|
||
Selling, general and administrative expenses
|
287
|
|
|
233
|
|
||
Research and development expenses
|
28
|
|
|
28
|
|
||
|
7,761
|
|
|
8,273
|
|
||
Operating income
|
1,017
|
|
|
1,494
|
|
||
Interest expense
|
(92
|
)
|
|
(91
|
)
|
||
Interest income
|
6
|
|
|
11
|
|
||
Other income, net
|
25
|
|
|
24
|
|
||
Income before equity investments and income taxes
|
956
|
|
|
1,438
|
|
||
Income from equity investments
|
64
|
|
|
96
|
|
||
Income before income taxes
|
1,020
|
|
|
1,534
|
|
||
Provision for income taxes
|
203
|
|
|
303
|
|
||
Net income
|
817
|
|
|
1,231
|
|
||
Dividends on A. Schulman Special Stock
|
(2
|
)
|
|
—
|
|
||
Net income attributable to the Company shareholders
|
$
|
815
|
|
|
$
|
1,231
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Net income attributable to the Company shareholders —
|
|
|
|
||||
Basic
|
$
|
2.19
|
|
|
$
|
3.12
|
|
Diluted
|
$
|
2.19
|
|
|
$
|
3.11
|
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
817
|
|
|
$
|
1,231
|
|
Other comprehensive income (loss), net of tax –
|
|
|
|
|
||||
Financial derivatives
|
|
(50
|
)
|
|
7
|
|
||
Defined benefit pension and other postretirement benefit plans
|
|
5
|
|
|
7
|
|
||
Foreign currency translations
|
|
(10
|
)
|
|
40
|
|
||
Total other comprehensive income (loss), net of tax
|
|
(55
|
)
|
|
54
|
|
||
Comprehensive income
|
|
762
|
|
|
1,285
|
|
||
Dividends on A. Schulman Special Stock
|
|
(2
|
)
|
|
—
|
|
||
Comprehensive income attributable to the Company shareholders
|
|
$
|
760
|
|
|
$
|
1,285
|
|
Millions of dollars
|
March 31,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
339
|
|
|
$
|
332
|
|
Restricted cash
|
19
|
|
|
69
|
|
||
Short-term investments
|
423
|
|
|
892
|
|
||
Accounts receivable:
|
|
|
|
||||
Trade, net
|
3,508
|
|
|
3,355
|
|
||
Related parties
|
172
|
|
|
148
|
|
||
Inventories
|
4,496
|
|
|
4,515
|
|
||
Prepaid expenses and other current assets
|
1,329
|
|
|
1,255
|
|
||
Total current assets
|
10,286
|
|
|
10,566
|
|
||
Operating lease assets
|
1,534
|
|
|
—
|
|
||
Property, plant and equipment at cost
|
19,244
|
|
|
18,701
|
|
||
Less: Accumulated depreciation
|
(6,447
|
)
|
|
(6,224
|
)
|
||
Property, plant and equipment, net
|
12,797
|
|
|
12,477
|
|
||
Investments and long-term receivables:
|
|
|
|
||||
Investment in PO joint ventures
|
464
|
|
|
469
|
|
||
Equity investments
|
1,650
|
|
|
1,611
|
|
||
Other investments and long-term receivables
|
23
|
|
|
23
|
|
||
Goodwill
|
1,803
|
|
|
1,814
|
|
||
Intangible assets, net
|
945
|
|
|
965
|
|
||
Other assets
|
387
|
|
|
353
|
|
||
Total assets
|
$
|
29,889
|
|
|
$
|
28,278
|
|
Millions of dollars, except shares and par value data
|
March 31,
2019 |
|
December 31,
2018 |
||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
5
|
|
|
$
|
5
|
|
Short-term debt
|
2,377
|
|
|
885
|
|
||
Accounts payable:
|
|
|
|
||||
Trade
|
2,610
|
|
|
2,560
|
|
||
Related parties
|
577
|
|
|
527
|
|
||
Accrued liabilities
|
1,443
|
|
|
1,536
|
|
||
Total current liabilities
|
7,012
|
|
|
5,513
|
|
||
Long-term debt
|
7,522
|
|
|
8,497
|
|
||
Operating lease liabilities
|
1,282
|
|
|
—
|
|
||
Other liabilities
|
1,830
|
|
|
1,897
|
|
||
Deferred income taxes
|
1,967
|
|
|
1,975
|
|
||
Commitments and contingencies
|
|
|
|
||||
Redeemable non-controlling interests
|
116
|
|
|
116
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 370,326,103
and 375,696,661 shares outstanding, respectively
|
22
|
|
|
22
|
|
||
Additional paid-in capital
|
6,996
|
|
|
7,041
|
|
||
Retained earnings
|
7,206
|
|
|
6,763
|
|
||
Accumulated other comprehensive loss
|
(1,418
|
)
|
|
(1,363
|
)
|
||
Treasury stock, at cost, 29,884,177 and 24,513,619 ordinary shares, respectively
|
(2,668
|
)
|
|
(2,206
|
)
|
||
Total Company share of stockholders’ equity
|
10,138
|
|
|
10,257
|
|
||
Non-controlling interests
|
22
|
|
|
23
|
|
||
Total equity
|
10,160
|
|
|
10,280
|
|
||
Total liabilities, redeemable non-controlling interests and equity
|
$
|
29,889
|
|
|
$
|
28,278
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
817
|
|
|
$
|
1,231
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
322
|
|
|
299
|
|
||
Amortization of debt-related costs
|
1
|
|
|
4
|
|
||
Share-based compensation
|
12
|
|
|
9
|
|
||
Equity investments –
|
|
|
|
||||
Equity income
|
(64
|
)
|
|
(96
|
)
|
||
Distributions of earnings, net of tax
|
25
|
|
|
—
|
|
||
Deferred income taxes
|
46
|
|
|
61
|
|
||
Changes in assets and liabilities that provided (used) cash:
|
|
|
|
||||
Accounts receivable
|
(206
|
)
|
|
(196
|
)
|
||
Inventories
|
(3
|
)
|
|
(55
|
)
|
||
Accounts payable
|
105
|
|
|
72
|
|
||
Other, net
|
(398
|
)
|
|
(323
|
)
|
||
Net cash provided by operating activities
|
657
|
|
|
1,006
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(599
|
)
|
|
(429
|
)
|
||
Purchases of available-for-sale debt securities
|
—
|
|
|
(50
|
)
|
||
Proceeds from sales and maturities of available-for-sale debt securities
|
308
|
|
|
335
|
|
||
Proceeds from sales and maturities of equity securities
|
162
|
|
|
—
|
|
||
Other, net
|
(49
|
)
|
|
(45
|
)
|
||
Net cash used in investing activities
|
(178
|
)
|
|
(189
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repurchases of Company ordinary shares
|
(512
|
)
|
|
(119
|
)
|
||
Dividends paid - common stock
|
(372
|
)
|
|
(395
|
)
|
||
Purchase of non-controlling interest
|
(63
|
)
|
|
—
|
|
||
Issuance of short-term debt
|
2,000
|
|
|
—
|
|
||
Repayment of long-term debt
|
(1,000
|
)
|
|
—
|
|
||
Net repayments of commercial paper
|
(559
|
)
|
|
—
|
|
||
Other, net
|
(15
|
)
|
|
(6
|
)
|
||
Net cash used in financing activities
|
(521
|
)
|
|
(520
|
)
|
||
Effect of exchange rate changes on cash
|
(1
|
)
|
|
15
|
|
||
(Decrease) increase in cash and cash equivalents and restricted cash
|
(43
|
)
|
|
312
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
401
|
|
|
1,528
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
358
|
|
|
$
|
1,840
|
|
|
|
|
|
|
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, December 31, 2018
|
$
|
22
|
|
|
$
|
(2,206
|
)
|
|
$
|
7,041
|
|
|
$
|
6,763
|
|
|
$
|
(1,363
|
)
|
|
$
|
10,257
|
|
|
$
|
23
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
817
|
|
|
—
|
|
|
817
|
|
|
—
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|
—
|
|
|||||||
Share-based compensation
|
—
|
|
|
26
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|||||||
Dividends - common stock ($1.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(372
|
)
|
|
—
|
|
|
(372
|
)
|
|
—
|
|
|||||||
Dividends - A. Schulman Special Stock ($15.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||||
Repurchases of Company ordinary shares
|
—
|
|
|
(488
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(488
|
)
|
|
—
|
|
|||||||
Purchase of non-controlling interest
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
(1
|
)
|
|||||||
Balance, March 31, 2019
|
$
|
22
|
|
|
$
|
(2,668
|
)
|
|
$
|
6,996
|
|
|
$
|
7,206
|
|
|
$
|
(1,418
|
)
|
|
$
|
10,138
|
|
|
$
|
22
|
|
|
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
|
—
|
|
|
—
|
|
|
—
|
|
|
1,231
|
|
|
—
|
|
|
1,231
|
|
|
—
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
54
|
|
|
—
|
|
|||||||
Share-based compensation
|
—
|
|
|
22
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|||||||
Dividends - common stock ($1.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(395
|
)
|
|
—
|
|
|
(395
|
)
|
|
—
|
|
|||||||
Repurchases of Company ordinary shares
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|||||||
Purchase of non-controlling interest
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|||||||
Balance, March 31, 2018
|
$
|
31
|
|
|
$
|
(15,865
|
)
|
|
$
|
10,186
|
|
|
$
|
16,677
|
|
|
$
|
(1,301
|
)
|
|
$
|
9,728
|
|
|
$
|
1
|
|
|
|
Page
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1.
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2.
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3.
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4.
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5.
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6.
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7.
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|
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8.
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9.
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10.
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|
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11.
|
||
|
|
|
12.
|
||
|
|
|
13.
|
||
|
|
|
14.
|
Standard
|
Description
|
Period of Adoption
|
Effect on the Consolidated Financial Statements
|
ASU 2016-13,
Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
This amendment requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected, resulting in the use of a current expected credit loss (“CECL”) model when measuring an impairment of financial instruments. Credit losses related to
available-for-sale securities should be recorded in the consolidated income statement through an allowance for credit losses. Estimated credit losses utilizing
the CECL model are based on historical experience, current conditions 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. The guidance will be effective for annual and interim periods beginning after
December 15, 2019. Early adoption is permitted.
|
First quarter of 2019
(early adopted)
|
The adoption of the new guidance did not have a material impact on our Consolidated Financial Statements.
|
Accounting Guidance Issued But Not Adopted as of March 31, 2019
|
|||
ASU 2018-13,
Fair Value Measurement (Topic 820): 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. The guidance will be effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted.
|
January 1, 2020
|
We are currently assessing the impact of this guidance on our Consolidated Financial Statements.
|
ASU 2018-14,
Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): 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 adds more pertinent disclosures. The guidance will be effective for public entities for annual periods ending after December 15, 2020. Early adoption is permitted.
|
January 1, 2021
|
We are currently assessing the impact of this guidance on our Consolidated Financial Statements.
|
Standard
|
Description
|
Period of Adoption
|
Effect on the Consolidated Financial Statements
|
ASU 2018-15,
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): 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. The guidance will be effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted.
|
January 1, 2020
|
We are currently assessing the impact of this guidance on our Consolidated Financial Statements.
|
|
Three Months Ended March 31,
|
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues:
|
|
|
|
||||
Olefins and co-products
|
$
|
748
|
|
|
$
|
1,020
|
|
Polyethylene
|
1,666
|
|
|
1,978
|
|
||
Polypropylene
|
1,315
|
|
|
1,520
|
|
||
PO and derivatives
|
559
|
|
|
649
|
|
||
Oxyfuels and related products
|
664
|
|
|
795
|
|
||
Intermediate chemicals
|
609
|
|
|
848
|
|
||
Compounding and solutions
|
1,140
|
|
|
609
|
|
||
Advanced polymers
|
198
|
|
|
228
|
|
||
Refined products
|
1,743
|
|
|
2,002
|
|
||
Other
|
136
|
|
|
118
|
|
||
Total
|
$
|
8,778
|
|
|
$
|
9,767
|
|
|
Three Months Ended March 31,
|
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues:
|
|
|
|
||||
United States
|
$
|
3,893
|
|
|
$
|
4,653
|
|
Germany
|
731
|
|
|
821
|
|
||
Mexico
|
528
|
|
|
478
|
|
||
Italy
|
387
|
|
|
394
|
|
||
France
|
362
|
|
|
350
|
|
||
Japan
|
203
|
|
|
301
|
|
||
China
|
298
|
|
|
282
|
|
||
The Netherlands
|
252
|
|
|
276
|
|
||
Other
|
2,124
|
|
|
2,212
|
|
||
Total
|
$
|
8,778
|
|
|
$
|
9,767
|
|
Millions of dollars
|
March 31,
2019 |
|
December 31,
2018 |
||||
Finished goods
|
$
|
3,010
|
|
|
$
|
3,066
|
|
Work-in-process
|
215
|
|
|
138
|
|
||
Raw materials and supplies
|
1,271
|
|
|
1,311
|
|
||
Total inventories
|
$
|
4,496
|
|
|
$
|
4,515
|
|
Millions of dollars
|
March 31,
2019 |
|
December 31,
2018 |
||||
Senior Notes due 2019, $1,000 million, 5.0%
|
$
|
—
|
|
|
$
|
988
|
|
Senior Notes due 2021, $1,000 million, 6.0% ($5 million of debt issuance cost)
|
982
|
|
|
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 2022, $4,000 million
|
—
|
|
|
—
|
|
||
Guaranteed Notes due 2022, €750 million, 1.875% ($2 million of discount; $2 million of debt issuance cost)
|
840
|
|
|
855
|
|
||
Guaranteed Notes due 2023, $750 million, 4.0% ($5 million of discount; $3 million of debt issuance cost)
|
742
|
|
|
742
|
|
||
Guaranteed Notes due 2027, $1,000 million, 3.5% ($8 million of discount; $7 million of debt issuance cost)
|
986
|
|
|
964
|
|
||
Guaranteed Notes due 2027, $300 million, 8.1%
|
300
|
|
|
300
|
|
||
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
|
7
|
|
|
10
|
|
||
Total
|
7,527
|
|
|
8,502
|
|
||
Less current maturities
|
(5
|
)
|
|
(5
|
)
|
||
Long-term debt
|
$
|
7,522
|
|
|
$
|
8,497
|
|
|
|
Gains (Losses)
|
|
Cumulative Fair Value
Hedging Adjustments Included
in Carrying Amount of Debt
|
|||||||||||||
|
Inception
Year
|
|
Three Months Ended
March 31, |
|
March 31,
|
|
December 31,
|
||||||||||
Millions of dollars
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Senior Notes due 2019, 5.0%
|
2014
|
|
$
|
(11
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
11
|
|
Senior Notes due 2021, 6.0%
|
2016
|
|
(7
|
)
|
|
14
|
|
|
13
|
|
|
20
|
|
||||
Guaranteed Notes due 2027, 3.5%
|
2017
|
|
(22
|
)
|
|
31
|
|
|
(1
|
)
|
|
21
|
|
||||
Guaranteed Notes due 2022, 1.875%
|
2018
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Total
|
|
|
$
|
(40
|
)
|
|
$
|
44
|
|
|
$
|
11
|
|
|
$
|
51
|
|
Millions of dollars
|
March 31,
2019 |
|
December 31,
2018 |
||||
$2,000 million Term Loan
|
$
|
2,000
|
|
|
$
|
—
|
|
$2,500 million Senior Revolving Credit Facility
|
—
|
|
|
—
|
|
||
$900 million U.S. Receivables Facility
|
—
|
|
|
—
|
|
||
Commercial paper
|
251
|
|
|
809
|
|
||
Precious metal financings
|
123
|
|
|
71
|
|
||
Other
|
3
|
|
|
5
|
|
||
Total short-term debt
|
$
|
2,377
|
|
|
$
|
885
|
|
Millions of dollars
|
|
|
||
Last nine months of 2019
|
|
$
|
255
|
|
2020
|
|
295
|
|
|
2021
|
|
247
|
|
|
2022
|
|
211
|
|
|
2023
|
|
183
|
|
|
Thereafter
|
|
645
|
|
|
Total lease payments
|
|
1,836
|
|
|
Less: Imputed interest
|
|
(281
|
)
|
|
Present value of lease liabilities
|
|
$
|
1,555
|
|
Millions of dollars
|
|
|
||
Operating lease cost
|
|
$
|
90
|
|
Short-term lease cost
|
|
40
|
|
|
Variable lease cost
|
|
17
|
|
|
Net operating lease cost
|
|
$
|
147
|
|
Millions of dollars
|
|
|
||
2019
|
|
$
|
365
|
|
2020
|
|
288
|
|
|
2021
|
|
256
|
|
|
2022
|
|
236
|
|
|
2023
|
|
204
|
|
|
Thereafter
|
|
1,126
|
|
|
Total minimum lease payments
|
|
$
|
2,475
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
|
||||||||||||
Millions of dollars
|
Notional Amount
|
|
Fair Value
|
|
Notional Amount
|
|
Fair Value
|
|
Balance Sheet Classification
|
||||||||
Assets–
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities
|
$
|
618
|
|
|
$
|
7
|
|
|
$
|
472
|
|
|
$
|
12
|
|
|
Prepaid expenses and other current assets
|
Foreign currency
|
—
|
|
|
52
|
|
|
—
|
|
|
27
|
|
|
Prepaid expenses and other current assets
|
||||
Foreign currency
|
2,000
|
|
|
169
|
|
|
2,000
|
|
|
117
|
|
|
Other assets
|
||||
Interest rates
|
—
|
|
|
26
|
|
|
600
|
|
|
33
|
|
|
Prepaid expenses and other current assets
|
||||
Interest rates
|
790
|
|
|
3
|
|
|
143
|
|
|
1
|
|
|
Other assets
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities
|
124
|
|
|
2
|
|
|
35
|
|
|
5
|
|
|
Prepaid expenses and other current assets
|
||||
Foreign currency
|
618
|
|
|
5
|
|
|
599
|
|
|
3
|
|
|
Prepaid expenses and other current assets
|
||||
Non-derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities
|
258
|
|
|
259
|
|
|
567
|
|
|
567
|
|
|
Short-term investments
|
||||
Equity securities
|
161
|
|
|
170
|
|
|
322
|
|
|
325
|
|
|
Short-term investments
|
||||
Total
|
$
|
4,569
|
|
|
$
|
693
|
|
|
$
|
4,738
|
|
|
$
|
1,090
|
|
|
|
Liabilities–
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
Accrued liabilities
|
Foreign currency
|
—
|
|
|
33
|
|
|
—
|
|
|
17
|
|
|
Accrued liabilities
|
||||
Foreign currency
|
950
|
|
|
58
|
|
|
950
|
|
|
75
|
|
|
Other liabilities
|
||||
Interest rates
|
1,000
|
|
|
53
|
|
|
1,400
|
|
|
16
|
|
|
Accrued liabilities
|
||||
Interest rates
|
1,850
|
|
|
41
|
|
|
2,500
|
|
|
45
|
|
|
Other liabilities
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities
|
129
|
|
|
6
|
|
|
63
|
|
|
14
|
|
|
Accrued liabilities
|
||||
Foreign currency
|
234
|
|
|
—
|
|
|
1,165
|
|
|
7
|
|
|
Accrued liabilities
|
||||
Non-derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Performance share awards
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
Accrued liabilities
|
||||
Total
|
$
|
4,163
|
|
|
$
|
191
|
|
|
$
|
6,111
|
|
|
$
|
203
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
Millions of dollars
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Non-derivatives:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Short-term loans receivable
|
$
|
534
|
|
|
$
|
534
|
|
|
$
|
544
|
|
|
$
|
544
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Short-term debt
|
$
|
2,126
|
|
|
$
|
2,131
|
|
|
$
|
71
|
|
|
$
|
77
|
|
Long-term debt
|
7,521
|
|
|
7,789
|
|
|
8,492
|
|
|
8,476
|
|
||||
Total
|
$
|
9,647
|
|
|
$
|
9,920
|
|
|
$
|
8,563
|
|
|
$
|
8,553
|
|
|
March 31, 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
|
618
|
|
|
476
|
|
|
2019
|
|
Effect of Financial Instruments
|
||||||||||||||||||||||||
|
Three Months Ended March 31,
|
||||||||||||||||||||||||
|
Gain (Loss) Recognized in AOCI
|
|
Gain (Loss) Reclassified from AOCI to Income
|
|
Gain (Loss) Recognized in Income
|
|
Income Statement
|
||||||||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Classification
|
||||||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodities
|
$
|
(50
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Sales and other operating revenues
|
Commodities
|
46
|
|
|
(3
|
)
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
Cost of sales
|
||||||
Foreign currency
|
70
|
|
|
(125
|
)
|
|
(39
|
)
|
|
62
|
|
|
17
|
|
|
13
|
|
|
Other income, net; Interest expense
|
||||||
Interest rates
|
(74
|
)
|
|
49
|
|
|
(4
|
)
|
|
—
|
|
|
(34
|
)
|
|
(44
|
)
|
|
Interest expense
|
||||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
Sales and other operating revenues
|
||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(4
|
)
|
|
Cost of sales
|
||||||
Foreign currency
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
(19
|
)
|
|
Other income, net
|
||||||
Non-derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
16
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other income, net
|
||||||
Total
|
$
|
8
|
|
|
$
|
(104
|
)
|
|
$
|
(44
|
)
|
|
$
|
66
|
|
|
$
|
7
|
|
|
$
|
(53
|
)
|
|
|
|
March 31, 2019
|
||||||||||||||
Millions of dollars
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
$
|
258
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
259
|
|
|
December 31, 2018
|
||||||||||||||
Millions of dollars
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
$
|
567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
567
|
|
|
March 31, 2019
|
||||||||||||||
|
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
|
$
|
83
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
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
|
|
|
$
|
—
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Net gains (losses) recognized during the period
|
$
|
7
|
|
|
$
|
(1
|
)
|
Less: Net gains recognized during the period on securities sold
|
1
|
|
|
—
|
|
||
Unrealized gains (losses) recognized during the period
|
$
|
6
|
|
|
$
|
(1
|
)
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
90
|
|
|
$
|
102
|
|
Additional provisions
|
7
|
|
|
—
|
|
||
Amounts paid
|
(3
|
)
|
|
(2
|
)
|
||
Foreign exchange effects
|
(1
|
)
|
|
2
|
|
||
Ending balance
|
$
|
93
|
|
|
$
|
102
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019
|
|||||||||
Millions of dollars, except shares and per share amounts
|
Shares
Repurchased
|
|
Average
Purchase
Price
|
|
Total Purchase
Price, Including
Commissions
|
|||||
June 2018 Share Repurchase Program
|
5,648,900
|
|
|
$
|
86.38
|
|
|
$
|
488
|
|
|
Three Months Ended March 31, 2018
|
|||||||||
Millions of dollars, except shares and per share amounts
|
Shares
Repurchased
|
|
Average
Purchase
Price
|
|
Total Purchase
Price, Including
Commissions
|
|||||
May 2017 Share Repurchase Program
|
1,292,480
|
|
|
$
|
107.17
|
|
|
$
|
138
|
|
|
Three Months Ended
March 31, |
||||
|
2019
|
|
2018
|
||
Ordinary shares outstanding:
|
|
|
|
||
Beginning balance
|
375,696,661
|
|
|
394,512,054
|
|
Share-based compensation
|
235,550
|
|
|
235,671
|
|
Employee stock purchase plan
|
42,792
|
|
|
27,179
|
|
Purchase of ordinary shares
|
(5,648,900
|
)
|
|
(1,292,480
|
)
|
Ending balance
|
370,326,103
|
|
|
393,482,424
|
|
|
Three Months Ended
March 31, |
||||
|
2019
|
|
2018
|
||
Ordinary shares held as treasury shares:
|
|
|
|
||
Beginning balance
|
24,513,619
|
|
|
183,928,109
|
|
Share-based compensation
|
(235,550
|
)
|
|
(235,671
|
)
|
Employee stock purchase plan
|
(42,792
|
)
|
|
(27,179
|
)
|
Purchase of ordinary shares
|
5,648,900
|
|
|
1,292,480
|
|
Ending balance
|
29,884,177
|
|
|
184,957,739
|
|
Millions of dollars
|
Financial
Derivatives
|
|
Defined Benefit
Pension and Other
Postretirement
Benefit Plans
|
|
Foreign
Currency
Translation
Adjustments
|
|
Total
|
||||||||
Balance – January 1, 2019
|
$
|
(68
|
)
|
|
$
|
(442
|
)
|
|
$
|
(853
|
)
|
|
$
|
(1,363
|
)
|
Other comprehensive loss before reclassifications
|
(19
|
)
|
|
—
|
|
|
(7
|
)
|
|
(26
|
)
|
||||
Tax (expense) benefit before reclassifications
|
4
|
|
|
—
|
|
|
(3
|
)
|
|
1
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(45
|
)
|
|
7
|
|
|
—
|
|
|
(38
|
)
|
||||
Tax (expense) benefit
|
10
|
|
|
(2
|
)
|
|
—
|
|
|
8
|
|
||||
Net other comprehensive income (loss)
|
(50
|
)
|
|
5
|
|
|
(10
|
)
|
|
(55
|
)
|
||||
Balance – March 31, 2019
|
$
|
(118
|
)
|
|
$
|
(437
|
)
|
|
$
|
(863
|
)
|
|
$
|
(1,418
|
)
|
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
|
(61
|
)
|
|
—
|
|
|
—
|
|
|
37
|
|
|
(24
|
)
|
|||||
Tax benefit before reclassifications
|
17
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
20
|
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
66
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
74
|
|
|||||
Tax expense
|
(15
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(16
|
)
|
|||||
Net other comprehensive income (loss)
|
7
|
|
|
—
|
|
|
7
|
|
|
40
|
|
|
54
|
|
|||||
Balance – March 31, 2018
|
$
|
(115
|
)
|
|
$
|
—
|
|
|
$
|
(465
|
)
|
|
$
|
(721
|
)
|
|
$
|
(1,301
|
)
|
|
Three Months Ended
March 31, |
|
Affected Line Item on
the Consolidated
Statements of Income
|
||||||
Millions of dollars
|
2019
|
|
2018
|
|
|||||
Reclassification adjustments for:
|
|
|
|
|
|
||||
Financial derivatives:
|
|
|
|
|
|
||||
Foreign currency
|
$
|
(39
|
)
|
|
$
|
62
|
|
|
Other income, net
|
Commodities
|
(6
|
)
|
|
—
|
|
|
Sales and other operating revenue
|
||
Commodities
|
4
|
|
|
4
|
|
|
Cost of sales
|
||
Interest rates
|
(4
|
)
|
|
—
|
|
|
Interest expense
|
||
Income tax expense (benefit)
|
(10
|
)
|
|
15
|
|
|
Provision for income taxes
|
||
Financial derivatives, net of tax
|
(35
|
)
|
|
51
|
|
|
|
||
Amortization of defined pension items:
|
|
|
|
|
|
||||
Actuarial loss
|
7
|
|
|
8
|
|
|
Other income, net
|
||
Income tax expense
|
2
|
|
|
1
|
|
|
Provision for income taxes
|
||
Defined pension items, net of tax
|
5
|
|
|
7
|
|
|
|
||
Total reclassifications, before tax
|
(38
|
)
|
|
74
|
|
|
|
||
Income tax expense (benefit)
|
(8
|
)
|
|
16
|
|
|
Provision for income taxes
|
||
Total reclassifications, after tax
|
$
|
(30
|
)
|
|
$
|
58
|
|
|
Amount included in net income
|
|
Three Months Ended March 31,
|
||||||
Millions of dollars
|
2019
|
2018
|
|||||
Net income attributable to the Company shareholders
|
$
|
817
|
|
|
$
|
1,231
|
|
Dividends on A. Schulman Special Stock
|
(2
|
)
|
|
—
|
|
||
Net income attributable to participating securities
|
(1
|
)
|
|
(1
|
)
|
||
Net income attributable to ordinary shareholders – basic and diluted
|
$
|
814
|
|
|
$
|
1,230
|
|
|
|
|
|
||||
Millions of shares, except per share amounts
|
|
|
|
||||
Basic weighted average common stock outstanding
|
372
|
|
|
394
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
PSU awards
|
—
|
|
|
1
|
|
||
Potential dilutive shares
|
372
|
|
|
395
|
|
||
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
2.19
|
|
|
$
|
3.12
|
|
Diluted
|
$
|
2.19
|
|
|
$
|
3.11
|
|
Participating securities
|
0.6
|
|
|
0.5
|
|
||
Dividends declared per share of common stock
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
•
|
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.
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||||||
Millions of dollars
|
O&P–
Americas
|
|
O&P–
EAI
|
|
I&D
|
|
APS
|
|
Refining
|
|
Technology
|
|
Other
|
|
Total
|
||||||||||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Customers
|
$
|
1,393
|
|
|
$
|
2,343
|
|
|
$
|
1,852
|
|
|
$
|
1,338
|
|
|
$
|
1,743
|
|
|
$
|
109
|
|
|
$
|
—
|
|
|
$
|
8,778
|
|
Intersegment
|
718
|
|
|
192
|
|
|
42
|
|
|
1
|
|
|
139
|
|
|
32
|
|
|
(1,124
|
)
|
|
—
|
|
||||||||
|
2,111
|
|
|
2,535
|
|
|
1,894
|
|
|
1,339
|
|
|
1,882
|
|
|
141
|
|
|
(1,124
|
)
|
|
8,778
|
|
||||||||
Income from equity investments
|
11
|
|
|
51
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||||||
EBITDA
|
516
|
|
|
296
|
|
|
390
|
|
|
148
|
|
|
(15
|
)
|
|
83
|
|
|
10
|
|
|
1,428
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||||||||||
Millions of dollars
|
O&P–
Americas
|
|
O&P–
EAI
|
|
I&D
|
|
APS
|
|
Refining
|
|
Technology
|
|
Other
|
|
Total
|
||||||||||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Customers
|
$
|
1,787
|
|
|
$
|
2,742
|
|
|
$
|
2,310
|
|
|
$
|
838
|
|
|
$
|
2,002
|
|
|
$
|
88
|
|
|
$
|
—
|
|
|
$
|
9,767
|
|
Intersegment
|
859
|
|
|
218
|
|
|
33
|
|
|
—
|
|
|
255
|
|
|
27
|
|
|
(1,392
|
)
|
|
—
|
|
||||||||
|
2,646
|
|
|
2,960
|
|
|
2,343
|
|
|
838
|
|
|
2,257
|
|
|
115
|
|
|
(1,392
|
)
|
|
9,767
|
|
||||||||
Income from equity investments
|
17
|
|
|
76
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
||||||||
EBITDA
|
756
|
|
|
419
|
|
|
486
|
|
|
123
|
|
|
63
|
|
|
56
|
|
|
10
|
|
|
1,913
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
EBITDA:
|
|
|
|
||||
Total segment EBITDA
|
$
|
1,418
|
|
|
$
|
1,903
|
|
Other EBITDA
|
10
|
|
|
10
|
|
||
Less:
|
|
|
|
||||
Depreciation and amortization expense
|
(322
|
)
|
|
(299
|
)
|
||
Interest expense
|
(92
|
)
|
|
(91
|
)
|
||
Add:
|
|
|
|
||||
Interest income
|
6
|
|
|
11
|
|
||
Income before income taxes
|
$
|
1,020
|
|
|
$
|
1,534
|
|
•
|
Lower O&P–Americas results due to a decline in olefins and polyethylene margins and volumes which were negatively impacted by planned maintenance activities;
|
•
|
Lower O&P–EAI results with margin and volume declines in Europe, combined with a decline in equity income and unfavorable foreign exchange impacts;
|
•
|
I&D segment results declined due to lower margins relative to the strong first quarter of 2018, which benefited from planned and unplanned industry maintenance;
|
•
|
APS segment results improved primarily due to the contribution of results from A. Schulman product lines following the August 21, 2018 acquisition;
|
•
|
Lower Refining segment results due to a decline in refining margins; and
|
•
|
Technology segment results increased mostly due to higher licensing revenue.
|
•
|
Executed a 364-day, $2,000 million senior unsecured term loan facility and borrowed the full amount;
|
•
|
Redemption of $1,000 million of our 5% senior notes due 2019; and
|
•
|
Executed a three-year, $4,000 million senior unsecured delayed draw term loan credit facility.
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues
|
$
|
8,778
|
|
|
$
|
9,767
|
|
Cost of sales
|
7,446
|
|
|
8,012
|
|
||
Selling, general and administrative expenses
|
287
|
|
|
233
|
|
||
Research and development expenses
|
28
|
|
|
28
|
|
||
Operating income
|
1,017
|
|
|
1,494
|
|
||
Interest expense
|
(92
|
)
|
|
(91
|
)
|
||
Interest income
|
6
|
|
|
11
|
|
||
Other income, net
|
25
|
|
|
24
|
|
||
Income from equity investments
|
64
|
|
|
96
|
|
||
Provision for income taxes
|
203
|
|
|
303
|
|
||
Net income
|
$
|
817
|
|
|
$
|
1,231
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues:
|
|
|
|
||||
O&P–Americas segment
|
$
|
2,111
|
|
|
$
|
2,646
|
|
O&P–EAI segment
|
2,535
|
|
|
2,960
|
|
||
I&D segment
|
1,894
|
|
|
2,343
|
|
||
APS segment
|
1,339
|
|
|
838
|
|
||
Refining segment
|
1,882
|
|
|
2,257
|
|
||
Technology segment
|
141
|
|
|
115
|
|
||
Other, including intersegment eliminations
|
(1,124
|
)
|
|
(1,392
|
)
|
||
Total
|
$
|
8,778
|
|
|
$
|
9,767
|
|
Operating income (loss):
|
|
|
|
||||
O&P–Americas segment
|
$
|
384
|
|
|
629
|
|
|
O&P–EAI segment
|
186
|
|
|
281
|
|
||
I&D segment
|
314
|
|
|
408
|
|
||
APS segment
|
119
|
|
|
114
|
|
||
Refining segment
|
(59
|
)
|
|
15
|
|
||
Technology segment
|
73
|
|
|
46
|
|
||
Other, including intersegment eliminations
|
—
|
|
|
1
|
|
||
Total
|
$
|
1,017
|
|
|
$
|
1,494
|
|
Depreciation and amortization:
|
|
|
|
||||
O&P–Americas segment
|
$
|
115
|
|
|
$
|
106
|
|
O&P–EAI segment
|
53
|
|
|
56
|
|
||
I&D segment
|
72
|
|
|
73
|
|
||
APS segment
|
29
|
|
|
8
|
|
||
Refining segment
|
43
|
|
|
46
|
|
||
Technology segment
|
10
|
|
|
10
|
|
||
Total
|
$
|
322
|
|
|
$
|
299
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Income from equity investments:
|
|
|
|
||||
O&P–Americas segment
|
$
|
11
|
|
|
$
|
17
|
|
O&P–EAI segment
|
51
|
|
|
76
|
|
||
I&D segment
|
2
|
|
|
3
|
|
||
Total
|
$
|
64
|
|
|
$
|
96
|
|
Other income, net:
|
|
|
|
||||
O&P–Americas segment
|
$
|
6
|
|
|
$
|
4
|
|
O&P–EAI segment
|
6
|
|
|
6
|
|
||
I&D segment
|
2
|
|
|
2
|
|
||
APS segment
|
—
|
|
|
1
|
|
||
Refining segment
|
1
|
|
|
2
|
|
||
Other, including intersegment eliminations
|
10
|
|
|
9
|
|
||
Total
|
$
|
25
|
|
|
$
|
24
|
|
EBITDA:
|
|
|
|
||||
O&P–Americas segment
|
$
|
516
|
|
|
$
|
756
|
|
O&P–EAI segment
|
296
|
|
|
419
|
|
||
I&D segment
|
390
|
|
|
486
|
|
||
APS segment
|
148
|
|
|
123
|
|
||
Refining segment
|
(15
|
)
|
|
63
|
|
||
Technology segment
|
83
|
|
|
56
|
|
||
Other, including intersegment eliminations
|
10
|
|
|
10
|
|
||
Total
|
$
|
1,428
|
|
|
$
|
1,913
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues
|
$
|
2,111
|
|
|
$
|
2,646
|
|
Income from equity investments
|
11
|
|
|
17
|
|
||
EBITDA
|
516
|
|
|
756
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues
|
$
|
2,535
|
|
|
$
|
2,960
|
|
Income from equity investments
|
51
|
|
|
76
|
|
||
EBITDA
|
296
|
|
|
419
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues
|
$
|
1,894
|
|
|
$
|
2,343
|
|
Income from equity investments
|
2
|
|
|
3
|
|
||
EBITDA
|
390
|
|
|
486
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues
|
$
|
1,339
|
|
|
$
|
838
|
|
EBITDA
|
148
|
|
|
123
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues
|
$
|
1,882
|
|
|
$
|
2,257
|
|
EBITDA
|
(15
|
)
|
|
63
|
|
||
|
|
|
|
||||
Heavy crude oil processing rates, thousands of barrels per day
|
259
|
|
|
252
|
|
||
|
|
|
|
||||
Market margins, dollars per barrel
|
|
|
|
||||
Light crude oil – 2-1-1
|
$
|
9.92
|
|
|
$
|
12.62
|
|
Light crude – Maya differential
|
3.63
|
|
|
8.10
|
|
||
Total Maya 2-1-1
|
$
|
13.55
|
|
|
$
|
20.72
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Sales and other operating revenues
|
$
|
141
|
|
|
$
|
115
|
|
EBITDA
|
83
|
|
|
56
|
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Source (use) of cash:
|
|
|
|
||||
Operating activities
|
$
|
657
|
|
|
$
|
1,006
|
|
Investing activities
|
(178
|
)
|
|
(189
|
)
|
||
Financing activities
|
(521
|
)
|
|
(520
|
)
|
|
Three Months Ended
March 31, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Capital expenditures by segment:
|
|
|
|
||||
O&P–Americas
|
$
|
276
|
|
|
$
|
242
|
|
O&P–EAI
|
64
|
|
|
58
|
|
||
I&D
|
179
|
|
|
68
|
|
||
APS
|
16
|
|
|
15
|
|
||
Refining
|
43
|
|
|
36
|
|
||
Technology
|
17
|
|
|
8
|
|
||
Other
|
4
|
|
|
2
|
|
||
Consolidated capital expenditures
|
$
|
599
|
|
|
$
|
429
|
|
•
|
$2,240 million
under our $2,500 million 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
March 31, 2019
, we had
$251 million
of outstanding commercial paper, net of discount, no outstanding letters of credit and no outstanding borrowings under the facility;
|
•
|
$797 million
under our $900 million U.S. accounts receivable facility. Availability under this facility is subject to a borrowing base of eligible receivables, which is reduced by outstanding borrowings and letters of credit, if any. This facility had no outstanding borrowings or letters of credit at
March 31, 2019
; and
|
•
|
$4,000 million
under our new three-year senior unsecured delayed draw term loan facility. Availability under this facility is net of outstanding borrowings. This facility had no outstanding borrowings at
March 31, 2019
.
|
•
|
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 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 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, 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;
|
•
|
the negative outcome of any legal, tax and environmental proceedings or changes in laws or regulations regarding legal, tax and environmental matters may increase our costs or otherwise limit our ability to achieve savings under current regulations;
|
•
|
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.
|
|
|
Issuer Purchases of Equity Securities
|
|
|
|||||||
Period
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number
of Shares That May Yet
Be Purchased Under the
Plans or Programs
|
|||
January 1 – January 31
|
|
2,930,000
|
|
|
$85.99
|
|
2,930,000
|
|
|
39,698,050
|
|
February 1 – February 28
|
|
2,578,600
|
|
|
$86.87
|
|
2,578,600
|
|
|
37,119,450
|
|
March 1 – March 31
|
|
140,300
|
|
|
$85.54
|
|
140,300
|
|
|
36,979,150
|
|
Total
|
|
5,648,900
|
|
|
$86.38
|
|
5,648,900
|
|
|
36,979,150
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32*
|
|
|
|
101.INS*
|
XBRL Instance Document
|
|
|
101.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
|
|
|
LYONDELLBASELL INDUSTRIES N.V.
|
|
|
|
Date:
|
April 26, 2019
|
/s/ Jacinth C. Smiley
|
|
|
Jacinth C. Smiley
|
|
|
Vice President and
|
|
|
Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|