☒
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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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|
Netherlands
|
|
|
|
|
98-0646235
|
|
|
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(State or other jurisdiction of
incorporation or organization)
|
|
|
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(I.R.S. Employer
Identification No.)
|
|
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1221 McKinney St.,
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4th Floor, One Vine Street
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|||
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Suite 300
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London
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Delftseplein 27E
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||||
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Houston,
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Texas
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W1J0AH
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3013AA
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Rotterdam
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USA
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77010
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United Kingdom
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|
Netherlands
|
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(713)
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309-7200
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|
+44 (0)
|
207
|
220 2600
|
|
+31 (0)
|
10
|
2755 500
|
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange On Which Registered
|
Ordinary Shares, €0.04 Par Value
|
|
LYB
|
|
New York Stock Exchange
|
Large accelerated filer
|
x
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
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Emerging growth company
|
☐
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Page
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|
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Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars, except earnings per share
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
||||||||
Trade
|
$
|
8,828
|
|
|
$
|
9,985
|
|
|
$
|
17,393
|
|
|
$
|
19,515
|
|
Related parties
|
220
|
|
|
221
|
|
|
433
|
|
|
458
|
|
||||
|
9,048
|
|
|
10,206
|
|
|
17,826
|
|
|
19,973
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
7,542
|
|
|
8,290
|
|
|
14,988
|
|
|
16,302
|
|
||||
Selling, general and administrative expenses
|
302
|
|
|
261
|
|
|
589
|
|
|
494
|
|
||||
Research and development expenses
|
27
|
|
|
29
|
|
|
55
|
|
|
57
|
|
||||
|
7,871
|
|
|
8,580
|
|
|
15,632
|
|
|
16,853
|
|
||||
Operating income
|
1,177
|
|
|
1,626
|
|
|
2,194
|
|
|
3,120
|
|
||||
Interest expense
|
(81
|
)
|
|
(91
|
)
|
|
(173
|
)
|
|
(182
|
)
|
||||
Interest income
|
5
|
|
|
15
|
|
|
11
|
|
|
26
|
|
||||
Other income, net
|
10
|
|
|
16
|
|
|
35
|
|
|
40
|
|
||||
Income from continuing operations before equity investments and income taxes
|
1,111
|
|
|
1,566
|
|
|
2,067
|
|
|
3,004
|
|
||||
Income from equity investments
|
64
|
|
|
68
|
|
|
128
|
|
|
164
|
|
||||
Income from continuing operations before income taxes
|
1,175
|
|
|
1,634
|
|
|
2,195
|
|
|
3,168
|
|
||||
Provision for (benefit from) income taxes
|
169
|
|
|
(21
|
)
|
|
372
|
|
|
282
|
|
||||
Income from continuing operations
|
1,006
|
|
|
1,655
|
|
|
1,823
|
|
|
2,886
|
|
||||
Loss from discontinued operations, net of tax
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(1
|
)
|
||||
Net income
|
1,003
|
|
|
1,654
|
|
|
1,820
|
|
|
2,885
|
|
||||
Dividends on A. Schulman Special Stock
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Net income attributable to the Company shareholders
|
$
|
1,002
|
|
|
$
|
1,654
|
|
|
$
|
1,817
|
|
|
$
|
2,885
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to the Company shareholders —
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
2.71
|
|
|
$
|
4.23
|
|
|
$
|
4.90
|
|
|
$
|
7.34
|
|
Discontinued operations
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
||||
|
$
|
2.70
|
|
|
$
|
4.23
|
|
|
$
|
4.89
|
|
|
$
|
7.34
|
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
2.71
|
|
|
$
|
4.22
|
|
|
$
|
4.89
|
|
|
$
|
7.33
|
|
Discontinued operations
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
||||
|
$
|
2.70
|
|
|
$
|
4.22
|
|
|
$
|
4.88
|
|
|
$
|
7.33
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
1,003
|
|
|
$
|
1,654
|
|
|
$
|
1,820
|
|
|
$
|
2,885
|
|
Other comprehensive income (loss), net of tax –
|
|
|
|
|
|
|
|
||||||||
Financial derivatives
|
(68
|
)
|
|
31
|
|
|
(118
|
)
|
|
38
|
|
||||
Unrealized gains on available-for-sale debt securities
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Defined benefit pension and other postretirement benefit plans
|
5
|
|
|
7
|
|
|
10
|
|
|
14
|
|
||||
Foreign currency translations
|
18
|
|
|
(95
|
)
|
|
8
|
|
|
(55
|
)
|
||||
Total other comprehensive loss, net of tax
|
(44
|
)
|
|
(57
|
)
|
|
(99
|
)
|
|
(3
|
)
|
||||
Comprehensive income
|
959
|
|
|
1,597
|
|
|
1,721
|
|
|
2,882
|
|
||||
Dividends on A. Schulman Special Stock
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Comprehensive income attributable to the Company shareholders
|
$
|
958
|
|
|
$
|
1,597
|
|
|
$
|
1,718
|
|
|
$
|
2,882
|
|
Millions of dollars
|
June 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,279
|
|
|
$
|
332
|
|
Restricted cash
|
29
|
|
|
69
|
|
||
Short-term investments
|
52
|
|
|
892
|
|
||
Accounts receivable:
|
|
|
|
||||
Trade, net
|
3,576
|
|
|
3,355
|
|
||
Related parties
|
182
|
|
|
148
|
|
||
Inventories
|
4,685
|
|
|
4,515
|
|
||
Prepaid expenses and other current assets
|
1,285
|
|
|
1,255
|
|
||
Total current assets
|
11,088
|
|
|
10,566
|
|
||
Operating lease assets
|
1,560
|
|
|
—
|
|
||
Property, plant and equipment, at cost
|
19,989
|
|
|
18,701
|
|
||
Less: Accumulated depreciation
|
(6,704
|
)
|
|
(6,224
|
)
|
||
Property, plant and equipment, net
|
13,285
|
|
|
12,477
|
|
||
Investments and long-term receivables:
|
|
|
|
||||
Investment in PO joint ventures
|
489
|
|
|
469
|
|
||
Equity investments
|
1,599
|
|
|
1,611
|
|
||
Other investments and long-term receivables
|
24
|
|
|
23
|
|
||
Goodwill
|
1,848
|
|
|
1,814
|
|
||
Intangible assets, net
|
892
|
|
|
965
|
|
||
Other assets
|
386
|
|
|
353
|
|
||
Total assets
|
$
|
31,171
|
|
|
$
|
28,278
|
|
Millions of dollars, except shares and par value data
|
June 30,
2019 |
|
December 31,
2018 |
||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
4
|
|
|
$
|
5
|
|
Short-term debt
|
2,812
|
|
|
885
|
|
||
Accounts payable:
|
|
|
|
||||
Trade
|
2,584
|
|
|
2,560
|
|
||
Related parties
|
531
|
|
|
527
|
|
||
Accrued liabilities
|
1,607
|
|
|
1,536
|
|
||
Total current liabilities
|
7,538
|
|
|
5,513
|
|
||
Long-term debt
|
7,586
|
|
|
8,497
|
|
||
Operating lease liabilities
|
1,304
|
|
|
—
|
|
||
Other liabilities
|
1,876
|
|
|
1,897
|
|
||
Deferred income taxes
|
2,008
|
|
|
1,975
|
|
||
Commitments and contingencies
|
|
|
|
||||
Redeemable non-controlling interests
|
116
|
|
|
116
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 370,387,374
and 375,696,661 shares outstanding, respectively
|
22
|
|
|
22
|
|
||
Additional paid-in capital
|
7,006
|
|
|
7,041
|
|
||
Retained earnings
|
7,818
|
|
|
6,763
|
|
||
Accumulated other comprehensive loss
|
(1,462
|
)
|
|
(1,363
|
)
|
||
Treasury stock, at cost, 29,822,906 and 24,513,619 ordinary shares, respectively
|
(2,663
|
)
|
|
(2,206
|
)
|
||
Total Company share of stockholders’ equity
|
10,721
|
|
|
10,257
|
|
||
Non-controlling interests
|
22
|
|
|
23
|
|
||
Total equity
|
10,743
|
|
|
10,280
|
|
||
Total liabilities, redeemable non-controlling interests and equity
|
$
|
31,171
|
|
|
$
|
28,278
|
|
|
Six Months Ended
June 30, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
1,820
|
|
|
$
|
2,885
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
650
|
|
|
599
|
|
||
Amortization of debt-related costs
|
4
|
|
|
7
|
|
||
Share-based compensation
|
24
|
|
|
24
|
|
||
Equity investments –
|
|
|
|
||||
Equity income
|
(128
|
)
|
|
(164
|
)
|
||
Distributions of earnings, net of tax
|
149
|
|
|
192
|
|
||
Deferred income taxes
|
110
|
|
|
82
|
|
||
Changes in assets and liabilities that provided (used) cash:
|
|
|
|
||||
Accounts receivable
|
(263
|
)
|
|
(324
|
)
|
||
Inventories
|
(173
|
)
|
|
9
|
|
||
Accounts payable
|
(102
|
)
|
|
215
|
|
||
Other, net
|
(248
|
)
|
|
(792
|
)
|
||
Net cash provided by operating activities
|
1,843
|
|
|
2,733
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(1,221
|
)
|
|
(925
|
)
|
||
Purchases of available-for-sale debt securities
|
—
|
|
|
(50
|
)
|
||
Proceeds from sales and maturities of available-for-sale debt securities
|
511
|
|
|
410
|
|
||
Purchases of equity securities
|
—
|
|
|
(19
|
)
|
||
Proceeds from sales and maturities of equity securities
|
332
|
|
|
32
|
|
||
Proceeds from settlement of net investment hedges
|
—
|
|
|
498
|
|
||
Payments for settlement of net investment hedges
|
—
|
|
|
(473
|
)
|
||
Other, net
|
(78
|
)
|
|
(62
|
)
|
||
Net cash used in investing activities
|
(456
|
)
|
|
(589
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repurchases of Company ordinary shares
|
(512
|
)
|
|
(470
|
)
|
||
Dividends paid - common stock
|
(760
|
)
|
|
(787
|
)
|
||
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
|
(128
|
)
|
|
—
|
|
||
Other, net
|
(19
|
)
|
|
(8
|
)
|
||
Net cash used in financing activities
|
(482
|
)
|
|
(1,265
|
)
|
||
Effect of exchange rate changes on cash
|
2
|
|
|
(21
|
)
|
||
Increase in cash and cash equivalents and restricted cash
|
907
|
|
|
858
|
|
||
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
|
$
|
1,308
|
|
|
$
|
2,386
|
|
|
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, 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 - A. Schulman Special Stock ($15.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||||
Balance, June 30, 2019
|
$
|
22
|
|
|
$
|
(2,663
|
)
|
|
$
|
7,006
|
|
|
$
|
7,818
|
|
|
$
|
(1,462
|
)
|
|
$
|
10,721
|
|
|
$
|
22
|
|
|
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, March 31, 2018
|
$
|
31
|
|
|
$
|
(15,865
|
)
|
|
$
|
10,186
|
|
|
$
|
16,677
|
|
|
$
|
(1,301
|
)
|
|
$
|
9,728
|
|
|
$
|
1
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,654
|
|
|
—
|
|
|
1,654
|
|
|
—
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
(57
|
)
|
|
—
|
|
|||||||
Share-based compensation
|
—
|
|
|
5
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|||||||
Dividends - common stock ($1.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(392
|
)
|
|
—
|
|
|
(392
|
)
|
|
—
|
|
|||||||
Repurchases of Company ordinary shares
|
—
|
|
|
(340
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(340
|
)
|
|
—
|
|
|||||||
Balance, June 30, 2018
|
$
|
31
|
|
|
$
|
(16,200
|
)
|
|
$
|
10,190
|
|
|
$
|
17,939
|
|
|
$
|
(1,358
|
)
|
|
$
|
10,602
|
|
|
$
|
1
|
|
|
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
|
—
|
|
|
—
|
|
|
—
|
|
|
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 - A. Schulman Special Stock ($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
|
|
|
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, 2017
|
$
|
31
|
|
|
$
|
(15,749
|
)
|
|
$
|
10,206
|
|
|
$
|
15,746
|
|
|
$
|
(1,285
|
)
|
|
$
|
8,949
|
|
|
$
|
1
|
|
Adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
(70
|
)
|
|
25
|
|
|
—
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,885
|
|
|
—
|
|
|
2,885
|
|
|
—
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|||||||
Share-based compensation
|
—
|
|
|
27
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|||||||
Dividends - common stock ($2.00 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(787
|
)
|
|
—
|
|
|
(787
|
)
|
|
—
|
|
|||||||
Repurchases of Company ordinary shares
|
—
|
|
|
(478
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(478
|
)
|
|
—
|
|
|||||||
Purchase of non-controlling interest
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|||||||
Balance, June 30, 2018
|
$
|
31
|
|
|
$
|
(16,200
|
)
|
|
$
|
10,190
|
|
|
$
|
17,939
|
|
|
$
|
(1,358
|
)
|
|
$
|
10,602
|
|
|
$
|
1
|
|
|
|
Page
|
1.
|
||
|
|
|
2.
|
||
|
|
|
3.
|
||
|
|
|
4.
|
||
|
|
|
5.
|
||
|
|
|
6.
|
||
|
|
|
7.
|
||
|
|
|
8.
|
||
|
|
|
9.
|
||
|
|
|
10.
|
||
|
|
|
11.
|
||
|
|
|
12.
|
||
|
|
|
13.
|
||
|
|
|
14.
|
Standard
|
|
Description
|
ASU 2016-02, Leases (including subsequent amendments)
|
|
The new 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 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 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 is effective for public entities for annual and interim periods beginning after December 15, 2019. Our early adoption of this guidance, including the subsequent amendments, in the first quarter of 2019 did not have a material impact on our Consolidated Financial Statements. |
Standard
|
|
Description
|
ASU 2018-09, Codification Improvements
|
|
This guidance makes minor improvements in various subtopics.
Some of the 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 have a material impact on our Consolidated Financial Statements.
|
ASU 2019-04, Codification Improvements to Credit Losses on Financial Instruments; Derivatives and Hedging; and Financial Instruments
|
|
The guidance makes minor clarifications and minor improvements to certain aspects of accounting for credit losses, hedging activities and financial instruments.
The guidance is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. Our early adoption of this guidance on a modified-retrospective basis in the second quarter of 2019 did not have a material impact on our Consolidated Financial Statements.
|
Standard
|
|
Description
|
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.
The guidance will be effective for all entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted.
|
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 adds more pertinent disclosures.
The 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.
The guidance will be effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
||||||||
Polyethylene
|
$
|
1,538
|
|
|
$
|
1,957
|
|
|
$
|
3,204
|
|
|
$
|
3,935
|
|
Polypropylene
|
1,317
|
|
|
1,471
|
|
|
2,632
|
|
|
2,991
|
|
||||
Olefins and co-products
|
745
|
|
|
946
|
|
|
1,493
|
|
|
1,966
|
|
||||
Oxyfuels and related products
|
797
|
|
|
941
|
|
|
1,461
|
|
|
1,736
|
|
||||
Intermediate chemicals
|
705
|
|
|
965
|
|
|
1,345
|
|
|
1,851
|
|
||||
PO and derivatives
|
489
|
|
|
614
|
|
|
1,017
|
|
|
1,225
|
|
||||
Compounding and solutions
|
1,062
|
|
|
584
|
|
|
2,202
|
|
|
1,193
|
|
||||
Advanced polymers
|
196
|
|
|
250
|
|
|
394
|
|
|
478
|
|
||||
Refined products
|
2,011
|
|
|
2,298
|
|
|
3,754
|
|
|
4,300
|
|
||||
Other
|
188
|
|
|
180
|
|
|
324
|
|
|
298
|
|
||||
Total
|
$
|
9,048
|
|
|
$
|
10,206
|
|
|
$
|
17,826
|
|
|
$
|
19,973
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
4,250
|
|
|
$
|
4,864
|
|
|
$
|
8,143
|
|
|
$
|
9,517
|
|
Germany
|
710
|
|
|
764
|
|
|
1,441
|
|
|
1,585
|
|
||||
Mexico
|
431
|
|
|
600
|
|
|
959
|
|
|
1,078
|
|
||||
Italy
|
385
|
|
|
433
|
|
|
772
|
|
|
827
|
|
||||
France
|
363
|
|
|
397
|
|
|
725
|
|
|
747
|
|
||||
China
|
298
|
|
|
279
|
|
|
596
|
|
|
561
|
|
||||
The Netherlands
|
270
|
|
|
300
|
|
|
522
|
|
|
576
|
|
||||
Japan
|
255
|
|
|
354
|
|
|
458
|
|
|
655
|
|
||||
Other
|
2,086
|
|
|
2,215
|
|
|
4,210
|
|
|
4,427
|
|
||||
Total
|
$
|
9,048
|
|
|
$
|
10,206
|
|
|
$
|
17,826
|
|
|
$
|
19,973
|
|
Millions of dollars
|
June 30,
2019 |
|
December 31,
2018 |
||||
Finished goods
|
$
|
3,140
|
|
|
$
|
3,066
|
|
Work-in-process
|
193
|
|
|
138
|
|
||
Raw materials and supplies
|
1,352
|
|
|
1,311
|
|
||
Total inventories
|
$
|
4,685
|
|
|
$
|
4,515
|
|
Millions of dollars
|
June 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)
|
996
|
|
|
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% ($1 million of discount; $2 million of debt issuance cost)
|
852
|
|
|
855
|
|
||
Guaranteed Notes due 2023, $750 million, 4.0% ($4 million of discount; $3 million of debt issuance cost)
|
743
|
|
|
742
|
|
||
Guaranteed Notes due 2027, $1,000 million, 3.5% ($8 million of discount; $7 million of debt issuance cost)
|
1,021
|
|
|
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
|
8
|
|
|
10
|
|
||
Total
|
7,590
|
|
|
8,502
|
|
||
Less current maturities
|
(4
|
)
|
|
(5
|
)
|
||
Long-term debt
|
$
|
7,586
|
|
|
$
|
8,497
|
|
|
|
|
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
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||||||
Senior Notes due 2019, 5.0%
|
2014
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
(11
|
)
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
11
|
|
Senior Notes due 2021, 6.0%
|
2016
|
|
(13
|
)
|
|
6
|
|
|
(20
|
)
|
|
20
|
|
|
—
|
|
|
20
|
|
||||||
Guaranteed Notes due 2027, 3.5%
|
2017
|
|
(35
|
)
|
|
11
|
|
|
(57
|
)
|
|
42
|
|
|
(36
|
)
|
|
21
|
|
||||||
Guaranteed Notes due 2022, 1.875%
|
2018
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Total
|
|
|
$
|
(49
|
)
|
|
$
|
8
|
|
|
$
|
(89
|
)
|
|
$
|
52
|
|
|
$
|
(38
|
)
|
|
$
|
51
|
|
Millions of dollars
|
June 30,
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
|
681
|
|
|
809
|
|
||
Precious metal financings
|
128
|
|
|
71
|
|
||
Other
|
3
|
|
|
5
|
|
||
Total short-term debt
|
$
|
2,812
|
|
|
$
|
885
|
|
Millions of dollars
|
|
|
||
Last six months of 2019
|
|
$
|
176
|
|
2020
|
|
311
|
|
|
2021
|
|
262
|
|
|
2022
|
|
223
|
|
|
2023
|
|
194
|
|
|
Thereafter
|
|
704
|
|
|
Total lease payments
|
|
1,870
|
|
|
Less: Imputed interest
|
|
(288
|
)
|
|
Present value of lease liabilities
|
|
$
|
1,582
|
|
|
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
||||
Millions of dollars
|
|
|
|
|
||||
Operating lease cost
|
|
$
|
90
|
|
|
$
|
180
|
|
Short-term lease cost
|
|
33
|
|
|
73
|
|
||
Variable lease cost
|
|
19
|
|
|
36
|
|
||
Net operating lease cost
|
|
$
|
142
|
|
|
$
|
289
|
|
Millions of dollars
|
|
|
||
2019
|
|
$
|
365
|
|
2020
|
|
288
|
|
|
2021
|
|
256
|
|
|
2022
|
|
236
|
|
|
2023
|
|
204
|
|
|
Thereafter
|
|
1,126
|
|
|
Total minimum lease payments
|
|
$
|
2,475
|
|
|
June 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
|
$
|
525
|
|
|
$
|
6
|
|
|
$
|
472
|
|
|
$
|
12
|
|
|
Prepaid expenses and other current assets
|
Foreign currency
|
—
|
|
|
26
|
|
|
—
|
|
|
27
|
|
|
Prepaid expenses and other current assets
|
||||
Foreign currency
|
2,000
|
|
|
166
|
|
|
2,000
|
|
|
117
|
|
|
Other assets
|
||||
Interest rates
|
—
|
|
|
20
|
|
|
600
|
|
|
33
|
|
|
Prepaid expenses and other current assets
|
||||
Interest rates
|
1,742
|
|
|
39
|
|
|
143
|
|
|
1
|
|
|
Other assets
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities
|
26
|
|
|
—
|
|
|
35
|
|
|
5
|
|
|
Prepaid expenses and other current assets
|
||||
Foreign currency
|
360
|
|
|
—
|
|
|
599
|
|
|
3
|
|
|
Prepaid expenses and other current assets
|
||||
Non-derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale debt securities
|
52
|
|
|
52
|
|
|
567
|
|
|
567
|
|
|
Short-term investments
|
||||
Equity securities
|
—
|
|
|
—
|
|
|
322
|
|
|
325
|
|
|
Short-term investments
|
||||
Total
|
$
|
4,705
|
|
|
$
|
309
|
|
|
$
|
4,738
|
|
|
$
|
1,090
|
|
|
|
Liabilities–
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
Accrued liabilities
|
Foreign currency
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
|
Accrued liabilities
|
||||
Foreign currency
|
950
|
|
|
74
|
|
|
950
|
|
|
75
|
|
|
Other liabilities
|
||||
Interest rates
|
1,000
|
|
|
125
|
|
|
1,400
|
|
|
16
|
|
|
Accrued liabilities
|
||||
Interest rates
|
900
|
|
|
61
|
|
|
2,500
|
|
|
45
|
|
|
Other liabilities
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities
|
180
|
|
|
19
|
|
|
63
|
|
|
14
|
|
|
Accrued liabilities
|
||||
Foreign currency
|
428
|
|
|
1
|
|
|
1,165
|
|
|
7
|
|
|
Accrued liabilities
|
||||
Non-derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Performance share units
|
—
|
|
|
—
|
|
|
29
|
|
|
29
|
|
|
Accrued liabilities
|
||||
Total
|
$
|
3,458
|
|
|
$
|
297
|
|
|
$
|
6,111
|
|
|
$
|
203
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
Millions of dollars
|
Carrying Value
|
|
Fair
Value
|
|
Carrying Value
|
|
Fair
Value
|
||||||||
Non-derivatives:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Short-term loans receivable
|
$
|
541
|
|
|
$
|
541
|
|
|
$
|
544
|
|
|
$
|
544
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Short-term debt
|
$
|
2,128
|
|
|
$
|
2,142
|
|
|
$
|
71
|
|
|
$
|
77
|
|
Long-term debt
|
7,582
|
|
|
8,176
|
|
|
8,492
|
|
|
8,476
|
|
||||
Total
|
$
|
9,710
|
|
|
$
|
10,318
|
|
|
$
|
8,563
|
|
|
$
|
8,553
|
|
|
June 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
|
525
|
|
|
476
|
|
|
2019
|
|
Effects of Financial Instruments
|
||||||||||||||||||||||||
|
Three 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
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Classification
|
||||||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodities
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Sales and other operating revenues
|
Commodities
|
(8
|
)
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Cost of sales
|
||||||
Foreign currency
|
(19
|
)
|
|
212
|
|
|
26
|
|
|
(124
|
)
|
|
15
|
|
|
19
|
|
|
Other income, net; Interest expense
|
||||||
Interest rates
|
(105
|
)
|
|
17
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
(16
|
)
|
|
Interest expense
|
||||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(2
|
)
|
|
Sales and other operating revenues
|
||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
13
|
|
|
Cost of sales
|
||||||
Foreign currency
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
36
|
|
|
Other income, net
|
||||||
Non-derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
(11
|
)
|
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other income, net
|
||||||
Total
|
$
|
(134
|
)
|
|
$
|
288
|
|
|
$
|
24
|
|
|
$
|
(124
|
)
|
|
$
|
37
|
|
|
$
|
50
|
|
|
|
|
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
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Classification
|
||||||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodities
|
(41
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Sales and other operating revenues
|
||||||
Commodities
|
38
|
|
|
6
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
Cost of sales
|
||||||
Foreign currency
|
51
|
|
|
87
|
|
|
(13
|
)
|
|
(62
|
)
|
|
32
|
|
|
32
|
|
|
Other income, net; Interest expense
|
||||||
Interest rates
|
(179
|
)
|
|
67
|
|
|
(4
|
)
|
|
—
|
|
|
73
|
|
|
(60
|
)
|
|
Interest expense
|
||||||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(1
|
)
|
|
Sales and other operating revenues
|
||||||
Commodities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
9
|
|
|
Cost of sales
|
||||||
Foreign currency
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
|
Other income, net
|
||||||
Non-derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
5
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other income, net
|
||||||
Total
|
$
|
(126
|
)
|
|
$
|
185
|
|
|
$
|
(21
|
)
|
|
$
|
(58
|
)
|
|
$
|
105
|
|
|
$
|
(4
|
)
|
|
|
|
June 30, 2019
|
||||||||||||||
Millions of dollars
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52
|
|
|
December 31, 2018
|
||||||||||||||
Millions of dollars
|
Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Available-for-sale debt securities:
|
|
|
|
|
|
|
|
||||||||
Bonds
|
$
|
567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
567
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Proceeds from maturities of available-for-sale debt securities
|
$
|
23
|
|
|
$
|
75
|
|
|
$
|
331
|
|
|
$
|
410
|
|
Proceeds from sales of available-for-sale debt securities
|
180
|
|
|
—
|
|
|
180
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
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
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net gains (losses) recognized during the period
|
$
|
(1
|
)
|
|
$
|
10
|
|
|
$
|
6
|
|
|
$
|
9
|
|
Less: Net gains recognized during the period on securities sold
|
8
|
|
|
1
|
|
|
9
|
|
|
1
|
|
||||
Unrealized gains (losses) recognized during the period
|
$
|
(9
|
)
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
$
|
8
|
|
|
|
|
|
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
|
||
|
$
|
2.05
|
|
|
$
|
760
|
|
|
|
|
Six Months Ended June 30, 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
|
|
|
5,648,900
|
|
|
$
|
86.38
|
|
|
$
|
488
|
|
|
Six Months Ended June 30, 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
|
4,004,753
|
|
|
$
|
106.05
|
|
|
$
|
425
|
|
June 2018 Share Repurchase Program
|
482,863
|
|
|
111.16
|
|
|
53
|
|
||
|
4,487,616
|
|
|
$
|
106.60
|
|
|
$
|
478
|
|
|
Six Months Ended
June 30, |
||||
|
2019
|
|
2018
|
||
Ordinary shares outstanding:
|
|
|
|
||
Beginning balance
|
375,696,661
|
|
|
394,512,054
|
|
Share-based compensation
|
256,140
|
|
|
264,671
|
|
Employee stock purchase plan
|
83,473
|
|
|
54,174
|
|
Purchase of ordinary shares
|
(5,648,900
|
)
|
|
(4,487,616
|
)
|
Ending balance
|
370,387,374
|
|
|
390,343,283
|
|
|
Six Months Ended
June 30, |
||||
|
2019
|
|
2018
|
||
Ordinary shares held as treasury shares:
|
|
|
|
||
Beginning balance
|
24,513,619
|
|
|
183,928,109
|
|
Share-based compensation
|
(256,140
|
)
|
|
(264,671
|
)
|
Employee stock purchase plan
|
(83,473
|
)
|
|
(54,174
|
)
|
Purchase of ordinary shares
|
5,648,900
|
|
|
4,487,616
|
|
Ending balance
|
29,822,906
|
|
|
188,096,880
|
|
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 income (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
|
)
|
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
|
99
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
58
|
|
|||||
Tax expense before reclassifications
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(32
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(58
|
)
|
|
—
|
|
|
17
|
|
|
—
|
|
|
(41
|
)
|
|||||
Tax (expense) benefit
|
15
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
12
|
|
|||||
Net other comprehensive income (loss)
|
38
|
|
|
—
|
|
|
14
|
|
|
(55
|
)
|
|
(3
|
)
|
|||||
Balance – June 30, 2018
|
$
|
(84
|
)
|
|
$
|
—
|
|
|
$
|
(458
|
)
|
|
$
|
(816
|
)
|
|
$
|
(1,358
|
)
|
|
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
|
|
|||||||||
Reclassification adjustments for:
|
|
|
|
|
|
|
|
|
|
||||||||
Financial derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency
|
$
|
26
|
|
|
$
|
(124
|
)
|
|
$
|
(13
|
)
|
|
$
|
(62
|
)
|
|
Other income, net
|
Commodities
|
(2
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
Sales and other operating revenue
|
||||
Commodities
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
Cost of sales
|
||||
Interest rates
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
Interest expense
|
||||
Income tax expense (benefit)
|
7
|
|
|
(30
|
)
|
|
(3
|
)
|
|
(15
|
)
|
|
Provision for income taxes
|
||||
Financial derivatives, net of tax
|
17
|
|
|
(94
|
)
|
|
(18
|
)
|
|
(43
|
)
|
|
|
||||
Amortization of defined pension items:
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Other income, net
|
||||
Actuarial loss
|
6
|
|
|
8
|
|
|
13
|
|
|
16
|
|
|
Other income, net
|
||||
Settlement loss
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
Other income, net
|
||||
Income tax expense
|
2
|
|
|
2
|
|
|
4
|
|
|
3
|
|
|
Provision for income taxes
|
||||
Defined pension items, net of tax
|
5
|
|
|
7
|
|
|
10
|
|
|
14
|
|
|
|
||||
Total reclassifications, before tax
|
31
|
|
|
(115
|
)
|
|
(7
|
)
|
|
(41
|
)
|
|
|
||||
Income tax expense (benefit)
|
9
|
|
|
(28
|
)
|
|
1
|
|
|
(12
|
)
|
|
Provision for income taxes
|
||||
Total reclassifications, after tax
|
$
|
22
|
|
|
$
|
(87
|
)
|
|
$
|
(8
|
)
|
|
$
|
(29
|
)
|
|
Amount included in net income
|
|
Three Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
Millions of dollars
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
||||||||
Net income (loss)
|
$
|
1,006
|
|
|
$
|
(3
|
)
|
|
$
|
1,655
|
|
|
$
|
(1
|
)
|
Dividends on A. Schulman Special Stock
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to participating securities
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Net income (loss) attributable to ordinary shareholders – basic and diluted
|
$
|
1,003
|
|
|
$
|
(3
|
)
|
|
$
|
1,654
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
||||||||
Millions of shares, except per share amounts
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common stock outstanding
|
370
|
|
|
370
|
|
|
391
|
|
|
391
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Performance share units
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Potential dilutive shares
|
370
|
|
|
370
|
|
|
392
|
|
|
392
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.71
|
|
|
$
|
(0.01
|
)
|
|
$
|
4.23
|
|
|
$
|
—
|
|
Diluted
|
$
|
2.71
|
|
|
$
|
(0.01
|
)
|
|
$
|
4.22
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Participating securities
|
0.6
|
|
|
0.6
|
|
|
0.5
|
|
|
0.5
|
|
||||
Dividends declared per share of common stock
|
$
|
1.05
|
|
|
$
|
—
|
|
|
$
|
1.00
|
|
|
$
|
—
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
Millions of dollars
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
||||||||
Net income (loss)
|
$
|
1,823
|
|
|
$
|
(3
|
)
|
|
$
|
2,886
|
|
|
$
|
(1
|
)
|
Dividends on A. Schulman Special Stock
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to participating securities
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Net income (loss) attributable to ordinary shareholders – basic and diluted
|
$
|
1,817
|
|
|
$
|
(3
|
)
|
|
$
|
2,884
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
||||||||
Millions of shares, except per share amounts
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common stock outstanding
|
371
|
|
|
371
|
|
|
393
|
|
|
393
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Performance share units
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Potential dilutive shares
|
371
|
|
|
371
|
|
|
394
|
|
|
394
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
4.90
|
|
|
$
|
(0.01
|
)
|
|
$
|
7.34
|
|
|
$
|
—
|
|
Diluted
|
$
|
4.89
|
|
|
$
|
(0.01
|
)
|
|
$
|
7.33
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Participating securities
|
0.6
|
|
|
0.6
|
|
|
0.5
|
|
|
0.5
|
|
||||
Dividends declared per share of common stock
|
$
|
2.05
|
|
|
$
|
—
|
|
|
$
|
2.00
|
|
|
$
|
—
|
|
•
|
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 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
|
$
|
1,325
|
|
|
$
|
2,283
|
|
|
$
|
2,020
|
|
|
$
|
1,257
|
|
|
$
|
2,011
|
|
|
$
|
152
|
|
|
$
|
—
|
|
|
$
|
9,048
|
|
Intersegment
|
789
|
|
|
222
|
|
|
42
|
|
|
1
|
|
|
169
|
|
|
21
|
|
|
(1,244
|
)
|
|
—
|
|
||||||||
|
2,114
|
|
|
2,505
|
|
|
2,062
|
|
|
1,258
|
|
|
2,180
|
|
|
173
|
|
|
(1,244
|
)
|
|
9,048
|
|
||||||||
Income (loss) from equity investments
|
12
|
|
|
52
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||||||
EBITDA
|
635
|
|
|
331
|
|
|
448
|
|
|
120
|
|
|
(66
|
)
|
|
107
|
|
|
4
|
|
|
1,579
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||
Millions of dollars
|
O&P–
Americas |
|
O&P–
EAI |
|
I&D
|
|
APS
|
|
Refining
|
|
Technology
|
|
Other
|
|
Total
|
||||||||||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Customers
|
$
|
1,694
|
|
|
$
|
2,690
|
|
|
$
|
2,541
|
|
|
$
|
833
|
|
|
$
|
2,298
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
10,206
|
|
Intersegment
|
848
|
|
|
210
|
|
|
43
|
|
|
—
|
|
|
271
|
|
|
32
|
|
|
(1,404
|
)
|
|
—
|
|
||||||||
|
2,542
|
|
|
2,900
|
|
|
2,584
|
|
|
833
|
|
|
2,569
|
|
|
182
|
|
|
(1,404
|
)
|
|
10,206
|
|
||||||||
Income (loss) from equity investments
|
15
|
|
|
54
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
||||||||
EBITDA
|
671
|
|
|
355
|
|
|
642
|
|
|
121
|
|
|
104
|
|
|
113
|
|
|
4
|
|
|
2,010
|
|
|
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
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||
Millions of dollars
|
O&P–
Americas
|
|
O&P–
EAI
|
|
I&D
|
|
APS
|
|
Refining
|
|
Technology
|
|
Other
|
|
Total
|
||||||||||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Customers
|
$
|
3,481
|
|
|
$
|
5,432
|
|
|
$
|
4,851
|
|
|
$
|
1,671
|
|
|
$
|
4,300
|
|
|
$
|
238
|
|
|
$
|
—
|
|
|
$
|
19,973
|
|
Intersegment
|
1,707
|
|
|
428
|
|
|
76
|
|
|
—
|
|
|
526
|
|
|
59
|
|
|
(2,796
|
)
|
|
—
|
|
||||||||
|
5,188
|
|
|
5,860
|
|
|
4,927
|
|
|
1,671
|
|
|
4,826
|
|
|
297
|
|
|
(2,796
|
)
|
|
19,973
|
|
||||||||
Income from equity investments
|
32
|
|
|
130
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164
|
|
||||||||
EBITDA
|
1,427
|
|
|
774
|
|
|
1,128
|
|
|
244
|
|
|
167
|
|
|
169
|
|
|
14
|
|
|
3,923
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
EBITDA:
|
|
|
|
|
|
|
|
||||||||
Total segment EBITDA
|
$
|
1,575
|
|
|
$
|
2,006
|
|
|
$
|
2,993
|
|
|
$
|
3,909
|
|
Other EBITDA
|
4
|
|
|
4
|
|
|
14
|
|
|
14
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization expense
|
(328
|
)
|
|
(300
|
)
|
|
(650
|
)
|
|
(599
|
)
|
||||
Interest expense
|
(81
|
)
|
|
(91
|
)
|
|
(173
|
)
|
|
(182
|
)
|
||||
Add:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
5
|
|
|
15
|
|
|
11
|
|
|
26
|
|
||||
Income from continuing operations before income taxes
|
$
|
1,175
|
|
|
$
|
1,634
|
|
|
$
|
2,195
|
|
|
$
|
3,168
|
|
•
|
Lower O&P–Americas results due to a decline in polyethylene results offset by higher olefins results;
|
•
|
Lower O&P–EAI results driven by lower volumes in Europe, combined with lower polyolefins margins and unfavorable foreign exchange impacts, which were partially offset by higher olefins margins;
|
•
|
I&D segment results declined due to margin and volume decreases across most businesses; and
|
•
|
Lower Refining segment results due to a decline in refining margins.
|
•
|
Executed a 364-day, $2,000 million senior unsecured term loan facility and borrowed the full amount;
|
•
|
Redeemed of $1,000 million of our 5% senior notes due 2019;
|
•
|
Executed a three-year, $4,000 million senior unsecured delayed draw term loan credit facility; and
|
•
|
In July 2019, repurchased 35.1 million ordinary shares for a total of $3,093 million, at a tender offer price of $88.00 per share.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues
|
$
|
9,048
|
|
|
$
|
10,206
|
|
|
$
|
17,826
|
|
|
$
|
19,973
|
|
Cost of sales
|
7,542
|
|
|
8,290
|
|
|
14,988
|
|
|
16,302
|
|
||||
Selling, general and administrative expenses
|
302
|
|
|
261
|
|
|
589
|
|
|
494
|
|
||||
Research and development expenses
|
27
|
|
|
29
|
|
|
55
|
|
|
57
|
|
||||
Operating income
|
1,177
|
|
|
1,626
|
|
|
2,194
|
|
|
3,120
|
|
||||
Interest expense
|
(81
|
)
|
|
(91
|
)
|
|
(173
|
)
|
|
(182
|
)
|
||||
Interest income
|
5
|
|
|
15
|
|
|
11
|
|
|
26
|
|
||||
Other income, net
|
10
|
|
|
16
|
|
|
35
|
|
|
40
|
|
||||
Income from equity investments
|
64
|
|
|
68
|
|
|
128
|
|
|
164
|
|
||||
Provision for (benefit from) income taxes
|
169
|
|
|
(21
|
)
|
|
372
|
|
|
282
|
|
||||
Income from continuing operations
|
1,006
|
|
|
1,655
|
|
|
1,823
|
|
|
2,886
|
|
||||
Loss from discontinued operations, net of tax
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(1
|
)
|
||||
Net income
|
$
|
1,003
|
|
|
$
|
1,654
|
|
|
$
|
1,820
|
|
|
$
|
2,885
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
||||||||
O&P–Americas segment
|
$
|
2,114
|
|
|
$
|
2,542
|
|
|
$
|
4,225
|
|
|
$
|
5,188
|
|
O&P–EAI segment
|
2,505
|
|
|
2,900
|
|
|
5,040
|
|
|
5,860
|
|
||||
I&D segment
|
2,062
|
|
|
2,584
|
|
|
3,956
|
|
|
4,927
|
|
||||
APS segment
|
1,258
|
|
|
833
|
|
|
2,597
|
|
|
1,671
|
|
||||
Refining segment
|
2,180
|
|
|
2,569
|
|
|
4,062
|
|
|
4,826
|
|
||||
Technology segment
|
173
|
|
|
182
|
|
|
314
|
|
|
297
|
|
||||
Other, including intersegment eliminations
|
(1,244
|
)
|
|
(1,404
|
)
|
|
(2,368
|
)
|
|
(2,796
|
)
|
||||
Total
|
$
|
9,048
|
|
|
$
|
10,206
|
|
|
$
|
17,826
|
|
|
$
|
19,973
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
||||||||
O&P–Americas segment
|
$
|
504
|
|
|
$
|
543
|
|
|
$
|
888
|
|
|
$
|
1,172
|
|
O&P–EAI segment
|
226
|
|
|
245
|
|
|
412
|
|
|
526
|
|
||||
I&D segment
|
372
|
|
|
569
|
|
|
686
|
|
|
977
|
|
||||
APS segment
|
91
|
|
|
112
|
|
|
210
|
|
|
226
|
|
||||
Refining segment
|
(110
|
)
|
|
58
|
|
|
(169
|
)
|
|
73
|
|
||||
Technology segment
|
96
|
|
|
100
|
|
|
169
|
|
|
146
|
|
||||
Other, including intersegment eliminations
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
||||
Total
|
$
|
1,177
|
|
|
$
|
1,626
|
|
|
$
|
2,194
|
|
|
$
|
3,120
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
O&P–Americas segment
|
$
|
117
|
|
|
$
|
109
|
|
|
$
|
232
|
|
|
$
|
215
|
|
O&P–EAI segment
|
52
|
|
|
52
|
|
|
105
|
|
|
108
|
|
||||
I&D segment
|
74
|
|
|
72
|
|
|
146
|
|
|
145
|
|
||||
APS segment
|
30
|
|
|
9
|
|
|
59
|
|
|
17
|
|
||||
Refining segment
|
44
|
|
|
46
|
|
|
87
|
|
|
92
|
|
||||
Technology segment
|
11
|
|
|
12
|
|
|
21
|
|
|
22
|
|
||||
Total
|
$
|
328
|
|
|
$
|
300
|
|
|
$
|
650
|
|
|
$
|
599
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income (loss) from equity investments:
|
|
|
|
|
|
|
|
||||||||
O&P–Americas segment
|
$
|
12
|
|
|
$
|
15
|
|
|
$
|
23
|
|
|
$
|
32
|
|
O&P–EAI segment
|
52
|
|
|
54
|
|
|
103
|
|
|
130
|
|
||||
I&D segment
|
2
|
|
|
(1
|
)
|
|
4
|
|
|
2
|
|
||||
APS segment
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Total
|
$
|
64
|
|
|
$
|
68
|
|
|
$
|
128
|
|
|
$
|
164
|
|
Other income, net:
|
|
|
|
|
|
|
|
||||||||
O&P–Americas segment
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
8
|
|
O&P–EAI segment
|
1
|
|
|
4
|
|
|
7
|
|
|
10
|
|
||||
I&D segment
|
—
|
|
|
2
|
|
|
2
|
|
|
4
|
|
||||
APS segment
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Refining segment
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||
Technology segment
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Other, including intersegment eliminations
|
6
|
|
|
5
|
|
|
16
|
|
|
14
|
|
||||
Total
|
$
|
10
|
|
|
$
|
16
|
|
|
$
|
35
|
|
|
$
|
40
|
|
EBITDA:
|
|
|
|
|
|
|
|
||||||||
O&P–Americas segment
|
$
|
635
|
|
|
$
|
671
|
|
|
$
|
1,151
|
|
|
$
|
1,427
|
|
O&P–EAI segment
|
331
|
|
|
355
|
|
|
627
|
|
|
774
|
|
||||
I&D segment
|
448
|
|
|
642
|
|
|
838
|
|
|
1,128
|
|
||||
APS segment
|
120
|
|
|
121
|
|
|
268
|
|
|
244
|
|
||||
Refining segment
|
(66
|
)
|
|
104
|
|
|
(81
|
)
|
|
167
|
|
||||
Technology segment
|
107
|
|
|
113
|
|
|
190
|
|
|
169
|
|
||||
Other, including intersegment eliminations
|
4
|
|
|
4
|
|
|
14
|
|
|
14
|
|
||||
Total
|
$
|
1,579
|
|
|
$
|
2,010
|
|
|
$
|
3,007
|
|
|
$
|
3,923
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues
|
$
|
2,114
|
|
|
$
|
2,542
|
|
|
$
|
4,225
|
|
|
$
|
5,188
|
|
Income from equity investments
|
12
|
|
|
15
|
|
|
23
|
|
|
32
|
|
||||
EBITDA
|
635
|
|
|
671
|
|
|
1,151
|
|
|
1,427
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues
|
$
|
2,505
|
|
|
$
|
2,900
|
|
|
$
|
5,040
|
|
|
$
|
5,860
|
|
Income from equity investments
|
52
|
|
|
54
|
|
|
103
|
|
|
130
|
|
||||
EBITDA
|
331
|
|
|
355
|
|
|
627
|
|
|
774
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, 2019 |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues
|
$
|
2,062
|
|
|
$
|
2,584
|
|
|
$
|
3,956
|
|
|
$
|
4,927
|
|
Income (loss) from equity investments
|
2
|
|
|
(1
|
)
|
|
4
|
|
|
2
|
|
||||
EBITDA
|
448
|
|
|
642
|
|
|
838
|
|
|
1,128
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues
|
$
|
1,258
|
|
|
$
|
833
|
|
|
$
|
2,597
|
|
|
$
|
1,671
|
|
Loss from equity investments
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
EBITDA
|
120
|
|
|
121
|
|
|
268
|
|
|
244
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues
|
$
|
2,180
|
|
|
$
|
2,569
|
|
|
$
|
4,062
|
|
|
$
|
4,826
|
|
EBITDA
|
(66
|
)
|
|
104
|
|
|
(81
|
)
|
|
167
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Heavy crude oil processing rates, thousands of barrels per day
|
261
|
|
|
259
|
|
|
260
|
|
|
255
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Market margins, dollars per barrel
|
|
|
|
|
|
|
|
||||||||
Light crude oil – 2-1-1
|
$
|
14.12
|
|
|
$
|
15.03
|
|
|
$
|
12.03
|
|
|
$
|
13.83
|
|
Light crude – Maya differential
|
4.87
|
|
|
10.91
|
|
|
4.26
|
|
|
9.58
|
|
||||
Total Maya 2-1-1
|
$
|
18.99
|
|
|
$
|
25.94
|
|
|
$
|
16.29
|
|
|
$
|
23.41
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Millions of dollars
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales and other operating revenues
|
$
|
173
|
|
|
$
|
182
|
|
|
$
|
314
|
|
|
$
|
297
|
|
EBITDA
|
107
|
|
|
113
|
|
|
190
|
|
|
169
|
|
|
Six Months Ended
June 30, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Source (use) of cash:
|
|
|
|
||||
Operating activities
|
$
|
1,843
|
|
|
$
|
2,733
|
|
Investing activities
|
(456
|
)
|
|
(589
|
)
|
||
Financing activities
|
(482
|
)
|
|
(1,265
|
)
|
|
Six Months Ended
June 30, |
||||||
Millions of dollars
|
2019
|
|
2018
|
||||
Capital expenditures by segment:
|
|
|
|
||||
O&P–Americas
|
$
|
533
|
|
|
$
|
553
|
|
O&P–EAI
|
103
|
|
|
98
|
|
||
I&D
|
417
|
|
|
148
|
|
||
APS
|
27
|
|
|
25
|
|
||
Refining
|
96
|
|
|
81
|
|
||
Technology
|
34
|
|
|
17
|
|
||
Other
|
11
|
|
|
3
|
|
||
Consolidated capital expenditures
|
$
|
1,221
|
|
|
$
|
925
|
|
•
|
$1,813 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 June 30, 2019, we had $681 million of outstanding commercial paper, net of discount, no outstanding letters of credit and no outstanding borrowings under the facility;
|
•
|
$832 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 June 30, 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 June 30, 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.
|
|
|
10.1 +
|
|
|
|
10.2 +*
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32*
|
|
|
|
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
|
|
|
101.DEF*
|
XBRL Definition Linkbase Document
|
|
|
101.LAB*
|
XBRL Labels Linkbase Document
|
|
|
101.PRE*
|
XBRL Presentation Linkbase Document
|
|
|
LYONDELLBASELL INDUSTRIES N.V.
|
|
|
|
Date:
|
August 2, 2019
|
/s/ Jacinth C. Smiley
|
|
|
Jacinth C. Smiley
|
|
|
Vice President and
|
|
|
Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
i.
|
2019 STI Annual Bonus. Executive will remain eligible to receive an annual incentive bonus payment for calendar year 2019 under the STI Plan, with Executive being treated as having terminated employment due to “Retirement” (as defined in the STI Plan) on December 31, 2019 (the “2019 STI Annual Bonus”). The calculation and payment of the 2019 STI Annual Bonus will be determined in good faith, in accordance with the terms and conditions of the STI Plan and, if applicable, shall be paid to Executive at the same time (but no later than March 15, 2020) and subject to the same administrative procedures that bonuses under the STI Plan are paid to the Company’s other executive officers. Executive acknowledges and agrees that, as part of its determination under the STI Plan, the Company may, in its sole discretion, ultimately determine annual incentive bonuses are not payable for a certain calendar year. Executive’s individual performance rating is agreed at the “Meets Expectations” level.
|
ii.
|
Pro Rata Treatment of Awards Under LTI Plan. Executive’s rights or benefits with respect to any Awards under the LTI Plan, including any Stock Awards, Options, or Performance Awards, shall be subject to pro rata treatment due to “Retirement” (as defined in the applicable Award Agreements) effective as of December 31, 2019, and any Options will not expire until five years following the Separation Date. The terms “Awards”, “Stock Awards”, “Options”, “Performance Awards”, and “Award Agreements” are defined in the LTI Plan and shall have the same meaning in this Agreement.
|
iii.
|
Benefits Continuation. Following the Separation Date, Executive shall, to the fullest extent permitted by the plans and applicable law, be eligible to continue his coverage under the Company’s medical, dental, vision and life benefit plans (as in effect from time to time) (collectively, the “Company Welfare Plans”) by electing continuation coverage pursuant to the requirements of the Company Welfare Plans and the Consolidated Omnibus Budget Reconciliation Act, Section 4980B of the Internal Revenue Code and any similar state law (“COBRA”). If Executive elects COBRA coverage under any of the Company Welfare Plans, he shall be solely responsible for the full premium payments. Executive may convert any life insurance policies as permitted by applicable state law.
|
•
|
unlawful discrimination, harassment or retaliation, such as under the Age Discrimination in Employment Act (“ADEA”), and that any such unlawful activity affected any payment in this Agreement;
|
•
|
violation of any other federal, state, local, common law or foreign legal requirements, such as any regarding accommodations, background checks, consortium loss, constructive discharge, fiduciary duty, health/safety, indemnification, information/records requirements, leaves of absence, negligence, notice obligations, public policy, torts, and whistleblowing;
|
•
|
violation of any express or implied contract/covenant/duty/promise, and any intellectual property/proprietary right;
|
•
|
compensation, severance, benefits, insurance, damages, equitable relief, attorney fees, costs, interest and penalties; and
|
•
|
participation in any class or collective action.
|
▪
|
Solicit any business competitive with any of the Company’s business segments (e.g., Advanced Polymer Solutions, Intermediates & Derivatives, Olefins & Polyolefins, Americas, Olefins & Polyolefins, EAI, Refining, and Technology) (“Company Business”) from any person or entity who: (a) was a customer to the Company within the eighteen (18) months before the Separation Date; and (b) with whom Executive had contact to further the Company’s Business or for whom Executive performed services, or supervised the provision of services for, during Executive’s employment;
|
▪
|
Hire, employ, recruit or solicit any employee of, or consultant to, the Company who possesses confidential information of the Company;
|
▪
|
Induce or influence any employee, consultant, or customer to the Company to terminate his, her or its employment or other relationship with the Company;
|
▪
|
Engage or participate in, or in any way render services or assistance to, any business whose primary business is competitive with the Company’s Business. This restriction applies in any geographic territory for which Executive had responsibilities during the 18 months before the Separation Date;
|
▪
|
Assist anyone in any of the activities listed above.
|
*
|
He is entering this Agreement knowingly and voluntarily;
|
*
|
He has been advised by this Agreement to consult with an attorney before signing this Agreement;
|
*
|
He understands he may take up to twenty-one (21) days to consider this Agreement before signing it and that such twenty-one (21) day period commenced on and was inclusive of May 10, 2019 when the Company initially presented the Agreement to Executive; and in accordance with 29 C.F.R. § 1625.22(e), the twenty-one (21) day period was not restarted or tolled while the Company and Executive negotiated the final terms of the Agreement;
|
*
|
He is not otherwise entitled to the consideration provided in Section 2;
|
*
|
He is not entitled to Severance under the Executive Severance Plan; and
|
*
|
This Agreement and its attachments are the entire agreement between him and the Company regarding the transition of his Executive Vice President, Chief Financial Officer duties through the Transition Period, and the terms of his continued employment through the Separation Date.
|
|
|
EXECUTIVE
|
|
|
|
30 May 2019
|
|
/s/ Thomas Aebischer
|
Date
|
|
Thomas Aebischer
|
|
|
|
|
|
|
|
|
LYONDELL CHEMICAL COMPANY
|
|
|
|
30 May 2019
|
|
/s/ Jeffrey Kaplan
|
Date
|
|
By:
|
|
|
EVP & Chief Legal Officer
|
|
|
Title:
|
a.
|
2019 STI Annual Bonus. Executive will remain eligible to receive an annual incentive bonus payment for calendar year 2019 under the STI Plan, with Executive being treated as having terminated employment due to “Retirement” (as defined in the STI Plan) on December 31, 2019 (the “2019 STI Annual Bonus”). The calculation and payment of the 2019 STI Annual Bonus will be determined in good faith, in accordance with the terms and conditions of the STI Plan and, if applicable, shall be paid to Executive at the same time (but no later than March 15, 2020) and subject to the same administrative procedures that bonuses under the STI Plan are paid to the Company’s other executive officers. Executive acknowledges and agrees that, as part of its determination under the STI Plan, the Company may, in its sole discretion, ultimately determine annual incentive bonuses are not payable for a certain calendar year. Executive’s individual performance rating is agreed at the “Meets Expectations” level.
|
b.
|
Benefits Continuation. Following the Separation Date, Executive shall, to the fullest extent permitted by the plans and applicable law, be eligible to continue his coverage under the Company’s medical, dental, vision and life benefit plans (as in effect from time to time) (collectively, the “Company Welfare Plans”) by electing continuation coverage pursuant to the requirements of the Company Welfare Plans and the Consolidated Omnibus Budget Reconciliation Act, Section 4980B of the Internal Revenue Code and any similar state law (“COBRA”). If Executive elects COBRA coverage under any of the Company Welfare Plans, he shall be solely responsible for the full premium payments. Executive may convert any life insurance policies as permitted by applicable state law.
|
c.
|
Transition Payment. Executive shall be entitled to a transition payment in the amount of $500,000. $250,000 shall be payable in a lump sum on the Separation Date and the remaining $250,000 shall be paid in twelve equal monthly installments over the one-year period following the Separation Date; provided, however, that such monthly payments shall cease if Executive violates any terms of the Agreement or the Second Release.
|
•
|
unlawful discrimination, harassment or retaliation, such as under the Age Discrimination in Employment Act (“ADEA”), and that any such unlawful activity affected any payment in this Second Release;
|
•
|
violation of any other federal, state, local, common law or foreign legal requirements, such as any regarding accommodations, background checks, consortium loss, constructive discharge, fiduciary duty, health/safety, indemnification, information/records requirements, leaves of absence, negligence, notice obligations, public policy, torts, and whistleblowing;
|
•
|
violation of any express or implied contract/covenant/duty/promise, and any intellectual property/proprietary right;
|
•
|
compensation, severance, benefits, insurance, damages, equitable relief, attorney fees, costs, interest and penalties; and
|
•
|
participation in any class or collective action.
|
*
|
He is entering this Second Release knowingly and voluntarily;
|
*
|
He has been advised by this Second Release to consult with an attorney before signing this Second Release;
|
*
|
He understands he may take up to twenty-one (21) days to consider this Second Release before signing it;
|
*
|
He is not otherwise entitled to the Separation Consideration referenced in Section 3;
|
*
|
He is not entitled to Severance under the Executive Severance Plan; and
|
*
|
The Agreement and this Second Release are the entire agreement between him and the Company regarding the transition of his Executive Vice President, Chief Financial Officer duties through the Separation Date, and the terms of his continued employment through the Separation Date. Executive understands that his failure to execute this Second Release will not relieve him of any continuing obligations owed by him under the terms of the Agreement.
|
|
|
EXECUTIVE
|
|
|
|
|
|
|
Date
|
|
Thomas Aebischer
|
|
|
|
|
|
|
|
|
LYONDELL CHEMICAL COMPANY
|
|
|
|
|
|
|
Date
|
|
By:
|
|
|
|
|
|
Title:
|