x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
The Netherlands | 98-0646235 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
1221 McKinney St., Suite 300 Houston, Texas USA 77010 | 4th Floor, One Vine Street London W1J0AH The United Kingdom | Delftseplein 27E 3013 AA Rotterdam The Netherlands |
(713) 309-7200 | +44 (0) 207 220 2600 | +31 (0)10 275 5500 |
Large accelerated filer | x | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars, except earnings per share | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues: | |||||||||||||||
Trade | $ | 9,926 | $ | 8,312 | $ | 29,441 | $ | 24,775 | |||||||
Related parties | 229 | 204 | 687 | 574 | |||||||||||
10,155 | 8,516 | 30,128 | 25,349 | ||||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of sales | 8,499 | 6,939 | 24,801 | 20,531 | |||||||||||
Selling, general and administrative expenses | 309 | 218 | 803 | 622 | |||||||||||
Research and development expenses | 30 | 27 | 87 | 77 | |||||||||||
8,838 | 7,184 | 25,691 | 21,230 | ||||||||||||
Operating income | 1,317 | 1,332 | 4,437 | 4,119 | |||||||||||
Interest expense | (90 | ) | (94 | ) | (272 | ) | (396 | ) | |||||||
Interest income | 14 | 5 | 40 | 15 | |||||||||||
Other income, net | 17 | 114 | 57 | 173 | |||||||||||
Income from continuing operations before equity investments and income taxes | 1,258 | 1,357 | 4,262 | 3,911 | |||||||||||
Income from equity investments | 89 | 81 | 253 | 240 | |||||||||||
Income from continuing operations before income taxes | 1,347 | 1,438 | 4,515 | 4,151 | |||||||||||
Provision for income taxes | 232 | 380 | 514 | 1,154 | |||||||||||
Income from continuing operations | 1,115 | 1,058 | 4,001 | 2,997 | |||||||||||
Loss from discontinued operations, net of tax | (2 | ) | (2 | ) | (3 | ) | (14 | ) | |||||||
Net income | 1,113 | 1,056 | 3,998 | 2,983 | |||||||||||
Net loss attributable to non-controlling interests | — | 1 | — | 2 | |||||||||||
Net income attributable to the Company shareholders | $ | 1,113 | $ | 1,057 | $ | 3,998 | $ | 2,985 | |||||||
Earnings per share: | |||||||||||||||
Net income (loss) attributable to the Company shareholders — | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations | $ | 2.86 | $ | 2.67 | $ | 10.21 | $ | 7.49 | |||||||
Discontinued operations | — | — | (0.01 | ) | (0.03 | ) | |||||||||
$ | 2.86 | $ | 2.67 | $ | 10.20 | $ | 7.46 | ||||||||
Diluted: | |||||||||||||||
Continuing operations | $ | 2.85 | $ | 2.67 | $ | 10.19 | $ | 7.49 | |||||||
Discontinued operations | — | — | (0.01 | ) | (0.03 | ) | |||||||||
$ | 2.85 | $ | 2.67 | $ | 10.18 | $ | 7.46 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income | $ | 1,113 | $ | 1,056 | $ | 3,998 | $ | 2,983 | |||||||
Other comprehensive income (loss), net of tax – | |||||||||||||||
Financial derivatives | 51 | (21 | ) | 89 | (20 | ) | |||||||||
Unrealized gains (losses) on available-for-sale debt securities | — | 1 | — | (1 | ) | ||||||||||
Unrealized gains on equity securities and equity securities held by equity investees | — | 6 | — | 10 | |||||||||||
Defined pension and other postretirement benefit plans | 6 | 7 | 20 | 20 | |||||||||||
Foreign currency translations | (8 | ) | 23 | (63 | ) | 143 | |||||||||
Total other comprehensive income, net of tax | 49 | 16 | 46 | 152 | |||||||||||
Comprehensive income | 1,162 | 1,072 | 4,044 | 3,135 | |||||||||||
Comprehensive loss attributable to non-controlling interests | — | 1 | — | 2 | |||||||||||
Comprehensive income attributable to the Company shareholders | $ | 1,162 | $ | 1,073 | $ | 4,044 | $ | 3,137 |
Millions of dollars | September 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 521 | $ | 1,523 | |||
Restricted cash | 11 | 5 | |||||
Short-term investments | 944 | 1,307 | |||||
Accounts receivable: | |||||||
Trade, net | 3,883 | 3,359 | |||||
Related parties | 204 | 180 | |||||
Inventories | 4,596 | 4,217 | |||||
Prepaid expenses and other current assets | 1,224 | 1,147 | |||||
Total current assets | 11,383 | 11,738 | |||||
Property, plant and equipment at cost | 18,116 | 16,570 | |||||
Less: Accumulated depreciation | (6,094 | ) | (5,573 | ) | |||
Property, plant and equipment, net | 12,022 | 10,997 | |||||
Investments and long-term receivables: | |||||||
Investment in PO joint ventures | 440 | 420 | |||||
Equity investments | 1,688 | 1,635 | |||||
Other investments and long-term receivables | 20 | 17 | |||||
Goodwill | 1,819 | 570 | |||||
Intangible assets, net | 982 | 568 | |||||
Other assets | 342 | 261 | |||||
Total assets | $ | 28,696 | $ | 26,206 |
Millions of dollars, except shares and par value data | September 30, 2018 | December 31, 2017 | |||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 984 | $ | 2 | |||
Short-term debt | 214 | 68 | |||||
Accounts payable: | |||||||
Trade | 2,928 | 2,258 | |||||
Related parties | 627 | 637 | |||||
Accrued liabilities | 1,489 | 1,812 | |||||
Total current liabilities | 6,242 | 4,777 | |||||
Long-term debt | 7,471 | 8,549 | |||||
Other liabilities | 2,017 | 2,275 | |||||
Deferred income taxes | 1,774 | 1,655 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 123 | — | |||||
Stockholders’ equity: | |||||||
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 387,177,776 and 394,512,054 shares outstanding, respectively | 22 | 31 | |||||
Additional paid-in capital | 7,033 | 10,206 | |||||
Retained earnings | 6,453 | 15,746 | |||||
Accumulated other comprehensive loss | (1,309 | ) | (1,285 | ) | |||
Treasury stock, at cost, 13,032,504 and 183,928,109 ordinary shares, respectively | (1,155 | ) | (15,749 | ) | |||
Total Company share of stockholders’ equity | 11,044 | 8,949 | |||||
Noncontrolling interests | 25 | 1 | |||||
Total equity | 11,069 | 8,950 | |||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 28,696 | $ | 26,206 |
Nine Months Ended September 30, | |||||||
Millions of dollars | 2018 | 2017 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 3,998 | $ | 2,983 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 908 | 876 | |||||
Amortization of debt-related costs | 11 | 12 | |||||
Charges related to repayment of debt | — | 49 | |||||
Share-based compensation | 33 | 39 | |||||
Equity investments – | |||||||
Equity income | (253 | ) | (240 | ) | |||
Distributions of earnings, net of tax | 200 | 190 | |||||
Deferred income taxes | 111 | 217 | |||||
Gain on sale of business and equity method investments | — | (108 | ) | ||||
Changes in assets and liabilities that provided (used) cash: | |||||||
Accounts receivable | (128 | ) | (278 | ) | |||
Inventories | (202 | ) | (219 | ) | |||
Accounts payable | 257 | 121 | |||||
Other, net | (761 | ) | 82 | ||||
Net cash provided by operating activities | 4,174 | 3,724 | |||||
Cash flows from investing activities: | |||||||
Expenditures for property, plant and equipment | (1,407 | ) | (1,146 | ) | |||
Acquisition of A. Schulman, net of cash acquired | (1,776 | ) | — | ||||
Payments for repurchase agreements | — | (512 | ) | ||||
Proceeds from repurchase agreements | — | 381 | |||||
Purchases of available-for-sale debt securities | (50 | ) | (653 | ) | |||
Proceeds from sales and maturities of available-for-sale debt securities | 410 | 499 | |||||
Proceeds from maturities of held-to-maturity securities | — | 75 | |||||
Purchases of equity securities | (64 | ) | — | ||||
Proceeds from sales of equity securities | 64 | — | |||||
Net proceeds from sales of business and equity method investments | — | 155 | |||||
Proceeds from settlement of net investment hedges | 872 | 609 | |||||
Payments for settlement of net investment hedges | (850 | ) | (658 | ) | |||
Other, net | (100 | ) | (4 | ) | |||
Net cash used in investing activities | (2,901 | ) | (1,254 | ) |
Nine Months Ended September 30, | |||||||
Millions of dollars | 2018 | 2017 | |||||
Cash flows from financing activities: | |||||||
Repurchases of Company ordinary shares | (801 | ) | (866 | ) | |||
Dividends paid | (1,176 | ) | (1,060 | ) | |||
Issuance of long-term debt | — | 990 | |||||
Repayments of long-term debt | (394 | ) | (1,000 | ) | |||
Debt extinguishment costs | — | (65 | ) | ||||
Payments of debt issuance costs | — | (8 | ) | ||||
Net of proceeds from (repayments of) commercial paper | 140 | (178 | ) | ||||
Other, net | (11 | ) | (4 | ) | |||
Net cash used in financing activities | (2,242 | ) | (2,191 | ) | |||
Effect of exchange rate changes on cash | (27 | ) | 54 | ||||
Increase (decrease) in cash and cash equivalents and restricted cash | (996 | ) | 333 | ||||
Cash and cash equivalents and restricted cash at beginning of period | 1,528 | 878 | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 532 | $ | 1,211 |
Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||
Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Company Share of Stockholders’ Equity | Non- Controlling Interests | ||||||||||||||||||||||
Millions of dollars | Issued | Treasury | |||||||||||||||||||||||||
Balance, June 30, 2018 | $ | 31 | $ | (16,200 | ) | $ | 10,190 | $ | 17,939 | $ | (1,358 | ) | $ | 10,602 | $ | 1 | |||||||||||
Net income | — | — | — | 1,113 | — | 1,113 | — | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | 49 | 49 | — | ||||||||||||||||||||
Share-based compensation | — | 4 | 8 | — | — | 12 | — | ||||||||||||||||||||
Dividends ($1.00 per share) | — | — | — | (389 | ) | — | (389 | ) | — | ||||||||||||||||||
Repurchase of Company ordinary shares | — | (343 | ) | — | — | — | (343 | ) | — | ||||||||||||||||||
Cancellation of treasury shares | (9 | ) | 15,384 | (3,165 | ) | (12,210 | ) | — | — | — | |||||||||||||||||
Acquisition of A. Schulman Inc. | — | — | — | — | — | — | 24 | ||||||||||||||||||||
Balance, September 30, 2018 | $ | 22 | $ | (1,155 | ) | $ | 7,033 | $ | 6,453 | $ | (1,309 | ) | $ | 11,044 | $ | 25 |
Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||
Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Company Share of Stockholders’ Equity | Non- Controlling Interests | ||||||||||||||||||||||
Millions of dollars | Issued | Treasury | |||||||||||||||||||||||||
Balance, June 30, 2017 | $ | 31 | $ | (15,494 | ) | $ | 10,198 | $ | 13,506 | $ | (1,375 | ) | $ | 6,866 | $ | 2 | |||||||||||
Net income (loss) | — | — | — | 1,057 | — | 1,057 | (1 | ) | |||||||||||||||||||
Other comprehensive income | — | — | — | — | 16 | 16 | — | ||||||||||||||||||||
Share-based compensation | — | 6 | 3 | — | — | 9 | — | ||||||||||||||||||||
Dividends ($0.90 per share) | — | — | — | (356 | ) | — | (356 | ) | — | ||||||||||||||||||
Repurchase of Company ordinary shares | — | (266 | ) | — | — | — | (266 | ) | — | ||||||||||||||||||
Balance, September 30, 2017 | $ | 31 | $ | (15,754 | ) | $ | 10,201 | $ | 14,207 | $ | (1,359 | ) | $ | 7,326 | $ | 1 |
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||||
Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Company Share of Stockholders’ Equity | Non- Controlling Interests | ||||||||||||||||||||||
Millions of dollars | Issued | Treasury | |||||||||||||||||||||||||
Balance, December 31, 2017 | $ | 31 | $ | (15,749 | ) | $ | 10,206 | $ | 15,746 | $ | (1,285 | ) | $ | 8,949 | $ | 1 | |||||||||||
Adoption of accounting standards | — | — | — | 95 | (70 | ) | 25 | — | |||||||||||||||||||
Net income | — | — | — | 3,998 | — | 3,998 | — | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | 46 | 46 | — | ||||||||||||||||||||
Share-based compensation | — | 31 | 20 | — | — | 51 | — | ||||||||||||||||||||
Dividends ($3.00 per share) | — | — | — | (1,176 | ) | — | (1,176 | ) | — | ||||||||||||||||||
Repurchase of Company ordinary shares | — | (821 | ) | — | — | — | (821 | ) | — | ||||||||||||||||||
Purchase of non-controlling interest | — | — | (28 | ) | — | — | (28 | ) | — | ||||||||||||||||||
Cancellation of treasury shares | (9 | ) | 15,384 | (3,165 | ) | (12,210 | ) | — | — | — | |||||||||||||||||
Acquisition of A. Schulman Inc. | — | — | — | — | — | — | 24 | ||||||||||||||||||||
Balance, September 30, 2018 | $ | 22 | $ | (1,155 | ) | $ | 7,033 | $ | 6,453 | $ | (1,309 | ) | $ | 11,044 | $ | 25 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||
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, 2016 | $ | 31 | $ | (14,945 | ) | $ | 10,191 | $ | 12,282 | $ | (1,511 | ) | $ | 6,048 | $ | 25 | |||||||||||
Net income (loss) | — | — | — | 2,985 | — | 2,985 | (2 | ) | |||||||||||||||||||
Other comprehensive income | — | — | — | — | 152 | 152 | — | ||||||||||||||||||||
Share-based compensation | — | 36 | 9 | — | — | 45 | — | ||||||||||||||||||||
Dividends ($2.65 per share) | — | — | — | (1,060 | ) | — | (1,060 | ) | — | ||||||||||||||||||
Repurchase of Company ordinary shares | — | (845 | ) | — | — | — | (845 | ) | — | ||||||||||||||||||
Purchase of non-controlling interest | — | — | 1 | — | — | 1 | (22 | ) | |||||||||||||||||||
Balance, September 30, 2017 | $ | 31 | $ | (15,754 | ) | $ | 10,201 | $ | 14,207 | $ | (1,359 | ) | $ | 7,326 | $ | 1 |
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Standard | Description | Period of Adoption | Effect on the Consolidated Financial Statements |
Recently Adopted Guidance | |||
Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (including subsequent amendments: ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20) | This guidance requires entities to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration expected to be received in exchange for those goods and services. This guidance also enhanced related disclosures and was effective for annual and interim periods beginning after December 15, 2017. | First quarter of 2018 | See Note 4 for disclosures related to the adoption of this guidance. |
ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities | This guidance includes a requirement for equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. This guidance was effective for annual and interim periods beginning after December 15, 2017. | First quarter of 2018 | We adopted this guidance prospectively and recorded a cumulative effect adjustment of $15 million to beginning retained earnings. |
ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10) | This ASU was issued as part of the Financial Accounting Standards Board’s ongoing agenda to make improvements clarifying the Accounting Standards Codification and provides technical corrections and improvements related to ASU 2016-01. This ASU was effective for annual and interim periods beginning after December 15, 2017. | First quarter of 2018 | The adoption of this guidance did not have a material impact. |
Standard | Description | Period of Adoption | Effect on the Consolidated Financial Statements |
ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory | This ASU is aimed at reducing complexity in accounting standards. Under current GAAP, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. This new guidance eliminates the exception for all intra-entity sales of assets other than inventory. A reporting entity would be required to recognize tax expense from the sale of assets in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. This guidance was effective for annual periods beginning after December 15, 2017. Early adoption is permitted. | First quarter of 2018 (early adopted) | We adopted this guidance using the modified-retrospective method and recorded a cumulative-effect adjustment of $9 million to beginning retained earnings. |
ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | This guidance permits entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of the U.S.-enacted “H.R.1,” also known as the “Tax Cuts and Jobs Act” (the “Tax Act”) to retained earnings. This amendment will be effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. | First quarter of 2018 (early adopted) | We adopted this guidance using the specific identification method and recorded a cumulative-effect adjustment of $52 million to beginning retained earnings. |
ASU 2017-01, Clarifying the Definition of a Business | This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether a transaction should be accounted for as an acquisition or disposal of an asset or a business. This amendment was effective for annual and interim periods beginning after December 15, 2017. | First quarter of 2018 | The prospective adoption of this guidance did not have a material impact. |
ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets | This guidance provides clarification about the term in substance nonfinancial asset, other aspects of the scope of Subtopic 610-20 Other Income, and how an entity should account for partial sales of nonfinancial assets once the amendments in ASU 2014-09 become effective. This amendment was effective for annual and interim periods beginning after December 15, 2017. | First quarter of 2018 | The retrospective adoption of this guidance did not have a material impact. |
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost | This guidance requires changes in the presentation of current service cost and other components of net benefit cost. This amendment was effective for annual and interim periods beginning after December 15, 2017. | First quarter of 2018 | The retrospective adoption of this guidance did not have a material impact. |
Standard | Description | Period of Adoption | Effect on the Consolidated Financial Statements |
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities | This guidance makes more financial and nonfinancial hedging strategies eligible for hedge accounting, amends the presentation and disclosure requirements and changes how companies assess effectiveness. This amendment will be effective for annual and interim periods beginning after December 15, 2018. Early application is permitted. | First quarter of 2018 (early adopted) | The adoption of this guidance did not have a material impact. |
Accounting Guidance Issued But Not Adopted as of September 30, 2018 | |||
ASU 2016-02, Leases (Topic 842) (including subsequent amendments: ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842, ASU 2018-10, Codification Improvements to Topic 842, and ASU 2018-11, Leases, Targeted Improvements) | This guidance, as amended, requires lessee leases with a term longer than 12 months to be recognized as a lease liability and a right-of-use asset representing the right to use the underlying asset for the lease term. Topic 842 retains a classification distinction between finance leases and operating leases, with the classification affecting the pattern of expense recognition in the income statement. Enhanced disclosures are also required. This amendment will be effective for annual periods beginning after December 15, 2018. Early adoption is permitted. | January 1, 2019 | We have made significant progress assessing the impact of this guidance through review of existing lease contracts and other purchase obligations that contain embedded lease features. We are finalizing the implementation of a lease accounting software solution. We are also approaching the end of our efforts to update our systems and processes, including our internal control framework. |
ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This guidance, as amended, modifies the current incurred loss model of recognizing credit losses and requires a current expected credit loss model which requires utilizing historical, current and forecasted information to develop a current estimate of credit losses for financial assets recorded either at amortized costs or fair value through Other Comprehensive Income. 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 the amendment of this guidance on our Consolidated Financial Statements. |
Standard | Description | Period of Adoption | Effect on the Consolidated Financial Statements |
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. |
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 (a consensus of the FASB Emerging Issue Task Force) | 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 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. |
Millions of dollars | |||
Cash and cash equivalents | $ | 71 | |
Restricted cash | 10 | ||
Accounts receivable | 407 | ||
Prepaid expenses and other current assets | 77 | ||
Inventories | 300 | ||
Property, plant and equipment | 431 | ||
Equity investments | 16 | ||
Goodwill | 1,259 | ||
Intangible assets | 488 | ||
Other assets | 170 | ||
Total assets | $ | 3,229 | |
Current maturities of long-term debt | $ | 397 | |
Accounts payable | 327 | ||
Accrued liabilities | 103 | ||
Other liabilities | 164 | ||
Deferred income taxes | 149 | ||
Total liabilities | 1,140 | ||
Redeemable noncontrolling interests | 125 | ||
Noncontrolling interests | 24 | ||
Total liabilities, redeemable noncontrolling interests and noncontrolling interests | $ | 1,289 | |
Total net assets acquired | $ | 1,940 |
Millions of dollars | |||
Land | $ | 54 | |
Major manufacturing equipment | 197 | ||
Buildings | 141 | ||
Light equipment and instrumentation | 12 | ||
Office furniture | 9 | ||
Information system equipment | 2 | ||
Construction in progress | 16 | ||
Total | $ | 431 |
Millions of dollars | Fair Value | Weighted Average Life (Years) | Useful Life (Years) | |||||
Customer relationships | $ | 265 | 15 | 15 | ||||
Trade name and trademarks | 106 | 5 | 5 | |||||
Know-how | 89 | 8 | 5 - 8 | |||||
Various contracts | 28 | 2 | 1 - 2 | |||||
Total | $ | 488 |
Millions of dollars | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||
Sales and other operating revenues: | |||||||
Olefins & co-products | $ | 1,021 | $ | 2,987 | |||
Polyethylene | 1,830 | 5,765 | |||||
Polypropylene | 1,414 | 4,405 | |||||
PO & derivatives | 642 | 1,949 | |||||
Oxyfuels and related products | 934 | 2,670 | |||||
Intermediate chemicals | 866 | 2,635 | |||||
Compounding and solutions | 797 | 1,990 | |||||
Advanced polymers | 240 | 718 | |||||
Refined products | 2,236 | 6,536 | |||||
Other | 175 | 473 | |||||
Total | $ | 10,155 | $ | 30,128 |
Millions of dollars | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||
Sales and other operating revenues: | |||||||
United States | $ | 5,011 | $ | 14,528 | |||
Germany | 741 | 2,326 | |||||
Italy | 376 | 1,203 | |||||
France | 371 | 1,118 | |||||
Mexico | 627 | 1,705 | |||||
The Netherlands | 259 | 835 | |||||
Other | 2,770 | 8,413 | |||||
Total | $ | 10,155 | $ | 30,128 |
Millions of dollars | September 30, 2018 | December 31, 2017 | |||||
Finished goods | $ | 3,056 | $ | 2,932 | |||
Work-in-process | 184 | 142 | |||||
Raw materials and supplies | 1,356 | 1,143 | |||||
Total inventories | $ | 4,596 | $ | 4,217 |
Millions of dollars | September 30, 2018 | December 31, 2017 | |||||
Senior Notes due 2019, $1,000 million, 5.0% ($1 million of debt issuance cost) | $ | 979 | $ | 961 | |||
Senior Notes due 2021, $1,000 million, 6.0% ($6 million of debt issuance cost) | 960 | 981 | |||||
Senior Notes due 2024, $1,000 million, 5.75% ($7 million of debt issuance cost) | 993 | 992 | |||||
Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost) | 973 | 973 | |||||
Guaranteed Notes due 2022, €750 million, 1.875% ($2 million of discount; $3 million of debt issuance cost) | 864 | 894 | |||||
Guaranteed Notes due 2023, $750 million, 4.0% ($5 million of discount; $3 million of debt issuance cost) | 742 | 740 | |||||
Guaranteed Notes due 2027, $1,000 million, 3.5% ($9 million of discount; $7 million of debt issuance cost) | 931 | 984 | |||||
Guaranteed Notes due 2027, $300 million, 8.1% | 300 | 300 | |||||
Guaranteed Notes due 2043, $750 million, 5.25% ($21 million of discount; $7 million of debt issuance cost) | 722 | 722 | |||||
Guaranteed Notes due 2044, $1,000 million, 4.875% ($11 million of discount; $9 million of debt issuance cost) | 980 | 979 | |||||
Other | 11 | 25 | |||||
Total | 8,455 | 8,551 | |||||
Less current maturities | (984 | ) | (2 | ) | |||
Long-term debt | $ | 7,471 | $ | 8,549 |
Gains (Losses) | Cumulative Fair Value Hedging Adjustments Included in Carrying Amount of Debt | ||||||||||||||||||||||||
Inception Year | Three Months Ended September 30, | Nine Months Ended September 30, | September 30, | December 31, | |||||||||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Senior Notes due 2019, 5.0% | 2014 | $ | (7 | ) | $ | (4 | ) | $ | (16 | ) | $ | (46 | ) | $ | 20 | $ | 36 | ||||||||
Senior Notes due 2021, 6.0% | 2016 | 2 | 2 | 22 | (1 | ) | 34 | 12 | |||||||||||||||||
Guaranteed Notes due 2027, 3.5% | 2017 | 12 | — | 54 | (10 | ) | 53 | (1 | ) | ||||||||||||||||
Guaranteed Notes due 2022, 1.875% | 2018 | 1 | — | — | — | — | — | ||||||||||||||||||
Total | $ | 8 | $ | (2 | ) | $ | 60 | $ | (57 | ) | $ | 107 | $ | 47 |
Millions of dollars | September 30, 2018 | December 31, 2017 | |||||
$2,500 million Senior Revolving Credit Facility | $ | — | $ | — | |||
$900 million U.S. Receivables Facility | — | — | |||||
Commercial paper | 140 | — | |||||
Precious metal financings | 70 | 64 | |||||
Other | 4 | 4 | |||||
Total short-term debt | $ | 214 | $ | 68 |
September 30, 2018 | December 31, 2017 | ||||||||||||||||
Millions of dollars | Notional Amount | Fair Value | Notional Amount | Fair Value | Balance Sheet Classification | ||||||||||||
Assets– | |||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||
Commodities | $ | 49 | $ | 21 | $ | — | $ | — | Prepaid expenses and other current assets | ||||||||
Commodities | 1 | — | — | — | Other assets | ||||||||||||
Foreign currency | 236 | 55 | — | 26 | Prepaid expenses and other current assets | ||||||||||||
Foreign currency | 2,000 | 58 | 2,000 | 25 | Other assets | ||||||||||||
Interest rates | 1,000 | 82 | — | 20 | Prepaid expenses and other current assets | ||||||||||||
Interest rates | 647 | 15 | 650 | 1 | Other assets | ||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||
Commodities | 151 | 12 | 77 | 20 | Prepaid expenses and other current assets | ||||||||||||
Foreign currency | 1,164 | 10 | 19 | — | Prepaid expenses and other current assets | ||||||||||||
Non-derivatives: | |||||||||||||||||
Available-for-sale debt securities | 586 | 586 | 960 | 960 | Short-term investments | ||||||||||||
Equity securities | 350 | 358 | 350 | 347 | Short-term investments | ||||||||||||
Total | $ | 6,184 | $ | 1,197 | $ | 4,056 | $ | 1,399 | |||||||||
Liabilities– | |||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||
Commodities | $ | — | $ | — | $ | 97 | $ | 8 | Accrued liabilities | ||||||||
Commodities | — | — | 5 | — | Other liabilities | ||||||||||||
Foreign currency | — | 34 | 139 | 29 | Accrued liabilities | ||||||||||||
Foreign currency | 950 | 101 | 950 | 140 | Other liabilities | ||||||||||||
Interest rates | 1,000 | 10 | — | 5 | Accrued liabilities | ||||||||||||
Interest rates | 2,000 | 86 | 3,350 | 58 | Other liabilities | ||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||
Commodities | 8 | 3 | 108 | 29 | Accrued liabilities | ||||||||||||
Foreign currency | 213 | 1 | 995 | 11 | Accrued liabilities | ||||||||||||
Non-derivatives: | |||||||||||||||||
Performance share awards | 32 | 32 | 23 | 23 | Accrued liabilities | ||||||||||||
Performance share awards | 2 | 2 | 27 | 27 | Other liabilities | ||||||||||||
Total | $ | 4,205 | $ | 269 | $ | 5,694 | $ | 330 |
September 30, 2018 | December 31, 2017 | ||||||||||||||
Millions of dollars | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Non-derivatives: | |||||||||||||||
Assets: | |||||||||||||||
Short-term loans receivable | $ | 550 | $ | 550 | $ | 570 | $ | 570 | |||||||
Liabilities: | |||||||||||||||
Short-term debt | $ | 70 | $ | 67 | $ | 64 | $ | 75 | |||||||
Long-term debt | 8,444 | 8,772 | 8,526 | 9,442 | |||||||||||
Total | $ | 8,514 | $ | 8,839 | $ | 8,590 | $ | 9,517 |
September 30, 2018 | December 31, 2017 | ||||||||
Millions of dollars | Notional Value | Notional Value | Expiration Date | ||||||
Foreign currency | $ | 2,300 | $ | 2,300 | 2021 to 2027 | ||||
Interest rates | 1,500 | 1,000 | 2019 to 2021 | ||||||
Commodities | 50 | 102 | 2018 to 2019 |
Effect of Financial Instruments | |||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||
Gain (Loss) Recognized in AOCI | Gain (Loss) Reclassified from AOCI to Income | Gain (Loss) Recognized in Income | Income Statement | ||||||||||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | Classification | ||||||||||||||||||
Derivatives designated as net investment hedges: | |||||||||||||||||||||||||
Foreign currency | $ | 4 | $ | (57 | ) | $ | — | $ | — | $ | 8 | $ | — | Interest expense | |||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||||
Commodities | 30 | 3 | (11 | ) | — | — | — | Cost of sales | |||||||||||||||||
Foreign currency | 11 | (98 | ) | (13 | ) | 74 | 11 | 9 | Other income, net; Interest expense | ||||||||||||||||
Interest rates | 48 | (5 | ) | — | — | — | — | Interest expense | |||||||||||||||||
Derivatives designated as fair value hedges: | |||||||||||||||||||||||||
Interest rates | — | — | — | — | (12 | ) | 3 | Interest expense | |||||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||||
Commodities | — | — | — | — | 2 | (6 | ) | Sales and other operating revenues | |||||||||||||||||
Commodities | — | — | — | — | 7 | 6 | Cost of sales | ||||||||||||||||||
Foreign currency | — | — | — | — | 12 | (6 | ) | Other income, net | |||||||||||||||||
Non-derivatives designated as net investment hedges: | |||||||||||||||||||||||||
Long-term debt | 5 | (30 | ) | — | — | — | — | Other income, net | |||||||||||||||||
Total | $ | 98 | $ | (187 | ) | $ | (24 | ) | $ | 74 | $ | 28 | $ | 6 |
Effect of Financial Instruments | |||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||
Gain (Loss) Recognized in AOCI | Gain (Loss) Reclassified from AOCI to Income | Gain (Loss) Recognized in Income | Income Statement | ||||||||||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | Classification | ||||||||||||||||||
Derivatives designated as net investment hedges: | |||||||||||||||||||||||||
Foreign currency | $ | 65 | $ | (170 | ) | $ | — | $ | — | $ | 21 | $ | — | Interest expense | |||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||||||
Commodities | 36 | (4 | ) | (7 | ) | — | — | — | Cost of sales | ||||||||||||||||
Foreign currency | 37 | (233 | ) | (75 | ) | 232 | 29 | 32 | Other income, net; Interest expense | ||||||||||||||||
Interest rates | 115 | (23 | ) | — | — | — | (1 | ) | Interest expense | ||||||||||||||||
Derivatives designated as fair value hedges: | |||||||||||||||||||||||||
Interest rates | — | — | — | — | (74 | ) | 21 | Interest expense | |||||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||||
Commodities | — | — | — | — | 1 | (9 | ) | Sales and other operating revenues | |||||||||||||||||
Commodities | — | — | — | — | 16 | (31 | ) | Cost of sales | |||||||||||||||||
Foreign currency | — | — | — | — | 28 | (7 | ) | Other income, net | |||||||||||||||||
Non-derivatives designated as net investment hedges: | |||||||||||||||||||||||||
Long-term debt | 31 | (95 | ) | — | — | — | — | Other income, net | |||||||||||||||||
Total | $ | 284 | $ | (525 | ) | $ | (82 | ) | $ | 232 | $ | 21 | $ | 5 |
September 30, 2018 | |||||||||||||||
Millions of dollars | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available-for-sale debt securities: | |||||||||||||||
Bonds | $ | 586 | $ | 1 | $ | (1 | ) | $ | 586 | ||||||
Total available-for-sale debt securities | $ | 586 | $ | 1 | $ | (1 | ) | $ | 586 |
December 31, 2017 | |||||||||||||||
Millions of dollars | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
Available-for-sale securities: | |||||||||||||||
Commercial paper | $ | 180 | $ | — | $ | — | $ | 180 | |||||||
Bonds | 630 | — | — | 630 | |||||||||||
Certificates of deposit | 150 | — | — | 150 | |||||||||||
Limited partnership investments | 350 | 2 | (5 | ) | 347 | ||||||||||
Total available-for-sale securities | $ | 1,310 | $ | 2 | $ | (5 | ) | $ | 1,307 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Proceeds from maturities of securities | $ | — | $ | 12 | $ | 410 | $ | 499 | |||||||
Proceeds from sales of securities | — | — | — | — |
September 30, 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 | $ | 155 | $ | (1 | ) | $ | — | $ | — |
December 31, 2017 | |||||||||||||||
Less than 12 months | Greater than 12 months | ||||||||||||||
Millions of dollars | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||
Available-for-sale securities: | |||||||||||||||
Limited partnership investments | $ | 117 | $ | (5 | ) | $ | — | $ | — |
Millions of dollars | |||
Net gains recognized during the period | $ | 1 | |
Less: Net gains recognized during the period on securities sold | 2 | ||
Unrealized losses recognized during the period | $ | (1 | ) |
U.S. Plans | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Service cost | $ | 13 | $ | 11 | $ | 38 | $ | 35 | |||||||
Interest cost | 15 | 15 | 45 | 45 | |||||||||||
Expected return on plan assets | (30 | ) | (30 | ) | (91 | ) | (91 | ) | |||||||
Actuarial and investment loss amortization | 5 | 5 | 16 | 16 | |||||||||||
Net periodic benefit costs | $ | 3 | $ | 1 | $ | 8 | $ | 5 |
Non-U.S. Plans | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Service cost | $ | 8 | $ | 9 | $ | 25 | $ | 28 | |||||||
Interest cost | 8 | 5 | 24 | 16 | |||||||||||
Expected return on plan assets | (6 | ) | (4 | ) | (18 | ) | (13 | ) | |||||||
Settlement loss | — | — | 1 | — | |||||||||||
Actuarial and investment loss amortization | 3 | 4 | 8 | 11 | |||||||||||
Net periodic benefit costs | $ | 13 | $ | 14 | $ | 40 | $ | 42 |
U.S. Plans | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Service cost | $ | 1 | $ | — | $ | 2 | $ | 2 | |||||||
Interest cost | 2 | 3 | 7 | 7 | |||||||||||
Net periodic benefit costs | $ | 3 | $ | 3 | $ | 9 | $ | 9 |
Non-U.S. Plans | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Service cost | $ | — | $ | 1 | $ | 1 | $ | 2 | |||||||
Interest cost | — | — | 1 | 1 | |||||||||||
Actuarial loss amortization | 1 | 1 | 1 | 2 | |||||||||||
Net periodic benefit costs | $ | 1 | $ | 2 | $ | 3 | $ | 5 |
Nine Months Ended September 30, | |||||||
Millions of dollars | 2018 | 2017 | |||||
Beginning balance | $ | 102 | $ | 95 | |||
Changes in estimates | 1 | 3 | |||||
Amounts paid | (9 | ) | (7 | ) | |||
Foreign exchange effects | (2 | ) | 8 | ||||
Ending balance | $ | 92 | $ | 99 |
Millions of dollars, except per share amounts | Dividend Per Ordinary Share | Aggregate Dividends Paid | Date of Record | ||||||
March | $ | 1.00 | $ | 395 | March 5, 2018 | ||||
June | 1.00 | 392 | June 11, 2018 | ||||||
September | 1.00 | 389 | September 5, 2018 | ||||||
$ | 3.00 | $ | 1,176 |
Nine Months Ended September 30, 2018 | ||||||||||
Millions of dollars, except shares and per share amounts | Shares Repurchased | Average Purchase Price | Total Purchase Price, Including Commissions | |||||||
May 2017 Share Repurchase Program | 4,004,753 | $ | 106.05 | $ | 425 | |||||
June 2018 Share Repurchase Program | 3,674,062 | 107.89 | 396 | |||||||
7,678,815 | $ | 106.93 | $ | 821 |
Nine Months Ended September 30, 2017 | ||||||||||
Millions of dollars, except shares and per share amounts | Shares Repurchased | Average Purchase Price | Total Purchase Price, Including Commissions | |||||||
May 2016 Share Repurchase Program | 3,501,084 | $ | 85.71 | $ | 300 | |||||
May 2017 Share Repurchase Program | 6,516,917 | 83.54 | 545 | |||||||
10,018,001 | $ | 84.30 | $ | 845 |
Nine Months Ended September 30, | |||||
2018 | 2017 | ||||
Ordinary shares outstanding: | |||||
Beginning balance | 394,512,054 | 404,046,331 | |||
Share-based compensation | 285,186 | 343,663 | |||
Warrants exercised | — | 4,184 | |||
Employee stock purchase plan | 82,758 | 81,964 | |||
Purchase of ordinary shares | (7,702,222 | ) | (10,018,001 | ) | |
Ending balance | 387,177,776 | 394,458,141 |
Nine Months Ended September 30, | |||||
2018 | 2017 | ||||
Ordinary shares held as treasury shares: | |||||
Beginning balance | 183,928,109 | 174,389,139 | |||
Share-based compensation | (285,186 | ) | (343,663 | ) | |
Warrants exercised | — | 509 | |||
Employee stock purchase plan | (82,758 | ) | (81,964 | ) | |
Purchase of ordinary shares | 7,702,222 | 10,018,001 | |||
Treasury shares canceled | (178,229,883 | ) | — | ||
Ending balance | 13,032,504 | 183,982,022 |
Millions of dollars | Financial Derivatives | Unrealized Gains (Losses) on Available -for-Sale Debt Securities | Unrealized Gains on Equity Securities and Equity Securities Held by Equity Investees | Defined Benefit Pension and Other Postretirement Benefit Plans | Foreign Currency Translation Adjustments | Total | |||||||||||||||||
Balance – January 1, 2018 | $ | (120 | ) | $ | — | $ | 17 | $ | (421 | ) | $ | (761 | ) | $ | (1,285 | ) | |||||||
Adoption of accounting standards | (2 | ) | — | (17 | ) | (51 | ) | — | (70 | ) | |||||||||||||
Other comprehensive income (loss) before reclassifications | 186 | — | — | — | (48 | ) | 138 | ||||||||||||||||
Tax expense before reclassifications | (36 | ) | — | — | — | (15 | ) | (51 | ) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (81 | ) | — | — | 26 | — | (55 | ) | |||||||||||||||
Tax (expense) benefit | 20 | — | — | (6 | ) | — | 14 | ||||||||||||||||
Net other comprehensive income (loss) | 89 | — | — | 20 | (63 | ) | 46 | ||||||||||||||||
Balance – September 30, 2018 | $ | (33 | ) | $ | — | $ | — | $ | (452 | ) | $ | (824 | ) | $ | (1,309 | ) |
Millions of dollars | Financial Derivatives | Unrealized Gains (Losses) on Available -for-Sale Debt Securities | 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, 2017 | $ | (75 | ) | $ | 1 | $ | — | $ | (498 | ) | $ | (939 | ) | $ | (1,511 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (260 | ) | (1 | ) | 8 | — | 112 | (141 | ) | ||||||||||||||
Tax benefit before reclassifications | 73 | — | 2 | — | 31 | 106 | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 232 | — | — | 29 | — | 261 | |||||||||||||||||
Tax expense | (65 | ) | — | — | (9 | ) | — | (74 | ) | ||||||||||||||
Net other comprehensive income (loss) | (20 | ) | (1 | ) | 10 | 20 | 143 | 152 | |||||||||||||||
Balance – September 30, 2017 | $ | (95 | ) | $ | — | $ | 10 | $ | (478 | ) | $ | (796 | ) | $ | (1,359 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | Affected Line Item on the Consolidated Statements of Income | |||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Reclassification adjustments for: | |||||||||||||||||
Financial derivatives – Foreign currency | $ | (13 | ) | $ | 74 | $ | (75 | ) | $ | 232 | Other income, net | ||||||
Financial derivatives – Commodities | (10 | ) | — | (6 | ) | — | Cost of sales | ||||||||||
Income tax expense (benefit) | (5 | ) | 18 | (20 | ) | 65 | Provision for income taxes | ||||||||||
Financial derivatives, net of tax | (18 | ) | 56 | (61 | ) | 167 | |||||||||||
Amortization of defined pension items: | |||||||||||||||||
Actuarial loss | 9 | 10 | 25 | 29 | |||||||||||||
Settlement loss | — | — | 1 | — | |||||||||||||
Income tax expense | 3 | 3 | 6 | 9 | |||||||||||||
Defined pension items, net of tax | 6 | 7 | 20 | 20 | |||||||||||||
Total reclassifications, before tax | (14 | ) | 84 | (55 | ) | 261 | |||||||||||
Income tax expense (benefit) | (2 | ) | 21 | (14 | ) | 74 | Provision for income taxes | ||||||||||
Total reclassifications, after tax | $ | (12 | ) | $ | 63 | $ | (41 | ) | $ | 187 | Amount included in net income |
Three Months Ended September 30, | |||||||||||||||
2018 | 2017 | ||||||||||||||
Millions of dollars | Continuing Operations | Discontinued Operations | Continuing Operations | Discontinued Operations | |||||||||||
Net income (loss) | $ | 1,115 | $ | (2 | ) | $ | 1,058 | $ | (2 | ) | |||||
Less: net loss attributable to non-controlling interests | — | — | 1 | — | |||||||||||
Net income (loss) attributable to the Company shareholders | 1,115 | (2 | ) | 1,059 | (2 | ) | |||||||||
Net income attributable to participating securities | (2 | ) | — | (1 | ) | — | |||||||||
Net income (loss) attributable to ordinary shareholders – basic and diluted | $ | 1,113 | $ | (2 | ) | $ | 1,058 | $ | (2 | ) | |||||
Millions of shares, except per share amounts | |||||||||||||||
Basic weighted average common stock outstanding | 389 | 389 | 395 | 395 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
PSU awards | 1 | 1 | — | — | |||||||||||
Potential dilutive shares | 390 | 390 | 395 | 395 | |||||||||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | 2.86 | $ | — | $ | 2.67 | $ | — | |||||||
Diluted | $ | 2.85 | $ | — | $ | 2.67 | $ | — | |||||||
Millions of shares, except per share amounts | |||||||||||||||
Participating securities | 0.5 | 0.5 | 0.4 | 0.4 | |||||||||||
Dividends declared per share of common stock | $ | 1.00 | $ | — | $ | 0.90 | $ | — |
Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | ||||||||||||||
Millions of dollars | Continuing Operations | Discontinued Operations | Continuing Operations | Discontinued Operations | |||||||||||
Net income (loss) | $ | 4,001 | $ | (3 | ) | $ | 2,997 | $ | (14 | ) | |||||
Less: net loss attributable to non-controlling interests | — | — | 2 | — | |||||||||||
Net income (loss) attributable to the Company shareholders | 4,001 | (3 | ) | 2,999 | (14 | ) | |||||||||
Net income attributable to participating securities | (4 | ) | — | (3 | ) | — | |||||||||
Net income (loss) attributable to ordinary shareholders – basic and diluted | $ | 3,997 | $ | (3 | ) | $ | 2,996 | $ | (14 | ) | |||||
Millions of shares, except per share amounts | |||||||||||||||
Basic weighted average common stock outstanding | 391 | 391 | 400 | 400 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
PSU awards | 1 | 1 | — | — | |||||||||||
Potential dilutive shares | 392 | 392 | 400 | 400 | |||||||||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | 10.21 | $ | (0.01 | ) | $ | 7.49 | $ | (0.03 | ) | |||||
Diluted | $ | 10.19 | $ | (0.01 | ) | $ | 7.49 | $ | (0.03 | ) | |||||
Millions of shares, except per share amounts | |||||||||||||||
Participating securities | 0.5 | 0.5 | 0.4 | 0.4 | |||||||||||
Dividends declared per share of common stock | $ | 3.00 | $ | — | $ | 2.65 | $ | — |
• | 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 co-products and 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 September 30, 2018 | |||||||||||||||||||||||||||||||
Millions of dollars | O&P– Americas | O&P– EAI | I&D | APS | Refining | Technology | Other | Total | |||||||||||||||||||||||
Sales and other operating revenues: | |||||||||||||||||||||||||||||||
Customers | $ | 1,843 | $ | 2,434 | $ | 2,463 | $ | 1,038 | $ | 2,236 | $ | 141 | $ | — | $ | 10,155 | |||||||||||||||
Intersegment | 927 | 209 | 46 | 1 | 263 | 30 | (1,476 | ) | — | ||||||||||||||||||||||
2,770 | 2,643 | 2,509 | 1,039 | 2,499 | 171 | (1,476 | ) | 10,155 | |||||||||||||||||||||||
Income from equity investments | 18 | 69 | 2 | — | — | — | — | 89 | |||||||||||||||||||||||
EBITDA | 704 | 262 | 504 | 70 | 84 | 98 | 10 | 1,732 |
Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||
Millions of dollars | O&P– Americas | O&P– EAI | I&D | APS | Refining | Technology | Other | Total | |||||||||||||||||||||||
Sales and other operating revenues: | |||||||||||||||||||||||||||||||
Customers | $ | 1,731 | $ | 2,451 | $ | 2,043 | $ | 731 | $ | 1,491 | $ | 69 | $ | — | $ | 8,516 | |||||||||||||||
Intersegment | 616 | 189 | 34 | — | 179 | 29 | (1,047 | ) | — | ||||||||||||||||||||||
2,347 | 2,640 | 2,077 | 731 | 1,670 | 98 | (1,047 | ) | 8,516 | |||||||||||||||||||||||
Income from equity investments | 8 | 69 | 4 | — | — | — | — | 81 | |||||||||||||||||||||||
EBITDA | 591 | 599 | 402 | 124 | 58 | 47 | — | 1,821 |
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||||||||
Millions of dollars | O&P– Americas | O&P– EAI | I&D | APS | Refining | Technology | Other | Total | |||||||||||||||||||||||
Sales and other operating revenues: | |||||||||||||||||||||||||||||||
Customers | $ | 5,324 | $ | 7,866 | $ | 7,314 | $ | 2,709 | $ | 6,536 | $ | 379 | $ | — | $ | 30,128 | |||||||||||||||
Intersegment | 2,634 | 637 | 122 | 1 | 789 | 89 | (4,272 | ) | — | ||||||||||||||||||||||
7,958 | 8,503 | 7,436 | 2,710 | 7,325 | 468 | (4,272 | ) | 30,128 | |||||||||||||||||||||||
Income from equity investments | 50 | 199 | 4 | — | — | — | — | 253 | |||||||||||||||||||||||
EBITDA | 2,131 | 1,036 | 1,632 | 314 | 251 | 267 | 24 | 5,655 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||
Millions of dollars | O&P– Americas | O&P– EAI | I&D | APS | Refining | Technology | Other | Total | |||||||||||||||||||||||
Sales and other operating revenues: | |||||||||||||||||||||||||||||||
Customers | $ | 5,383 | $ | 7,083 | $ | 6,142 | $ | 2,194 | $ | 4,306 | $ | 241 | $ | — | $ | 25,349 | |||||||||||||||
Intersegment | 1,917 | 553 | 99 | — | 430 | 84 | (3,083 | ) | — | ||||||||||||||||||||||
7,300 | 7,636 | 6,241 | 2,194 | 4,736 | 325 | (3,083 | ) | 25,349 | |||||||||||||||||||||||
Income from equity investments | 33 | 202 | 5 | — | — | — | — | 240 | |||||||||||||||||||||||
EBITDA | 2,130 | 1,638 | 1,080 | 356 | 53 | 155 | (4 | ) | 5,408 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
EBITDA: | |||||||||||||||
Total segment EBITDA | $ | 1,722 | $ | 1,821 | $ | 5,631 | $ | 5,412 | |||||||
Other EBITDA | 10 | — | 24 | (4 | ) | ||||||||||
Less: | |||||||||||||||
Depreciation and amortization expense | (309 | ) | (294 | ) | (908 | ) | (876 | ) | |||||||
Interest expense | (90 | ) | (94 | ) | (272 | ) | (396 | ) | |||||||
Add: | |||||||||||||||
Interest income | 14 | 5 | 40 | 15 | |||||||||||
Income from continuing operations before income taxes | $ | 1,347 | $ | 1,438 | $ | 4,515 | $ | 4,151 |
• | O&P–Americas results improved in the third quarter of 2018 with strong polyethylene margins and increased volumes, partly offset by lower olefins margins as ethylene prices declined. Results in the first nine months of 2018 were unchanged with higher polyolefins margins offset by lower olefins margins and increased fixed costs; |
• | Lower O&P–EAI results with margin and volume declines in Europe, partly offset in the first nine months of 2018 by favorable foreign exchange impacts; |
• | I&D segment results improved with increased margins and volumes; |
• | APS segment results declined as lower margins and the impact of acquisition-related transaction and integration costs were partly offset by the contribution of results from of A. Schulman Inc. (“A. Schulman”) product lines following the August 21, 2018 acquisition; |
• | Refining segment results improved with higher refining margins and better yields and in the first nine months of 2018, by higher crude oil processing rates; and |
• | Technology segment results increased due mostly to higher licensing and services revenue. |
• | Completion of the $1.9 billion acquisition of A. Schulman Inc., a leading global supplier of high-performance plastic compounds, composites and powders, on August 21, 2018; |
• | Groundbreaking of our new $2.4 billion PO/TBA plant at our Channelview, Texas facility on August 22, 2018; |
• | Non-cash income tax benefit of $346 million related to an audit settlement associated with specific uncertain tax positions recognized in the first nine months of 2018; |
• | Acquired a 50% interest in Quality Circular Polymers, a high standard plastics recycling company in Sittard-Geleen, Netherlands on March 14, 2018; and |
• | Increased quarterly dividend from $0.90 cents to $1.00 in February 2018. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues | $ | 10,155 | $ | 8,516 | $ | 30,128 | $ | 25,349 | |||||||
Cost of sales | 8,499 | 6,939 | 24,801 | 20,531 | |||||||||||
Selling, general and administrative expenses | 309 | 218 | 803 | 622 | |||||||||||
Research and development expenses | 30 | 27 | 87 | 77 | |||||||||||
Operating income | 1,317 | 1,332 | 4,437 | 4,119 | |||||||||||
Interest expense | (90 | ) | (94 | ) | (272 | ) | (396 | ) | |||||||
Interest income | 14 | 5 | 40 | 15 | |||||||||||
Other income, net | 17 | 114 | 57 | 173 | |||||||||||
Income from equity investments | 89 | 81 | 253 | 240 | |||||||||||
Provision for income taxes | 232 | 380 | 514 | 1,154 | |||||||||||
Income from continuing operations | 1,115 | 1,058 | 4,001 | 2,997 | |||||||||||
Loss from discontinued operations, net of tax | (2 | ) | (2 | ) | (3 | ) | (14 | ) | |||||||
Net income | $ | 1,113 | $ | 1,056 | $ | 3,998 | $ | 2,983 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues: | |||||||||||||||
O&P–Americas segment | $ | 2,770 | $ | 2,347 | $ | 7,958 | $ | 7,300 | |||||||
O&P–EAI segment | 2,643 | 2,640 | 8,503 | 7,636 | |||||||||||
I&D segment | 2,509 | 2,077 | 7,436 | 6,241 | |||||||||||
APS segment | 1,039 | 731 | 2,710 | 2,194 | |||||||||||
Refining segment | 2,499 | 1,670 | 7,325 | 4,736 | |||||||||||
Technology segment | 171 | 98 | 468 | 325 | |||||||||||
Other, including intersegment eliminations | (1,476 | ) | (1,047 | ) | (4,272 | ) | (3,083 | ) | |||||||
Total | $ | 10,155 | $ | 8,516 | $ | 30,128 | $ | 25,349 | |||||||
Operating income (loss): | |||||||||||||||
O&P–Americas segment | $ | 572 | 473 | $ | 1,744 | $ | 1,730 | ||||||||
O&P–EAI segment | 141 | 367 | 667 | 1,143 | |||||||||||
I&D segment | 431 | 329 | 1,408 | 868 | |||||||||||
APS Segment | 48 | 117 | 274 | 331 | |||||||||||
Refining segment | 38 | 10 | 111 | (81 | ) | ||||||||||
Technology segment | 88 | 36 | 234 | 125 | |||||||||||
Other, including intersegment eliminations | (1 | ) | — | (1 | ) | 3 | |||||||||
Total | $ | 1,317 | $ | 1,332 | $ | 4,437 | $ | 4,119 | |||||||
Depreciation and amortization: | |||||||||||||||
O&P–Americas segment | $ | 111 | $ | 104 | $ | 326 | $ | 326 | |||||||
O&P–EAI segment | 50 | 54 | 158 | 156 | |||||||||||
I&D segment | 71 | 69 | 216 | 206 | |||||||||||
APS segment | 22 | 7 | 39 | 25 | |||||||||||
Refining segment | 45 | 49 | 137 | 133 | |||||||||||
Technology segment | 10 | 11 | 32 | 30 | |||||||||||
Total | $ | 309 | $ | 294 | $ | 908 | $ | 876 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Income (loss) from equity investments: | |||||||||||||||
O&P–Americas segment | $ | 18 | $ | 8 | $ | 50 | $ | 33 | |||||||
O&P–EAI segment | 69 | 69 | 199 | 202 | |||||||||||
I&D segment | 2 | 4 | 4 | 5 | |||||||||||
Total | $ | 89 | $ | 81 | $ | 253 | $ | 240 | |||||||
Other income (expense), net: | |||||||||||||||
O&P–Americas segment | $ | 3 | $ | 6 | $ | 11 | $ | 41 | |||||||
O&P–EAI segment | 2 | 109 | 12 | 137 | |||||||||||
I&D segment | — | — | 4 | 1 | |||||||||||
APS segment | — | — | 1 | — | |||||||||||
Refining segment | 1 | (1 | ) | 3 | 1 | ||||||||||
Technology segment | — | — | 1 | — | |||||||||||
Other, including intersegment eliminations | 11 | — | 25 | (7 | ) | ||||||||||
Total | $ | 17 | $ | 114 | $ | 57 | $ | 173 | |||||||
EBITDA: | |||||||||||||||
O&P–Americas segment | $ | 704 | $ | 591 | $ | 2,131 | $ | 2,130 | |||||||
O&P–EAI segment | 262 | 599 | 1,036 | 1,638 | |||||||||||
I&D segment | 504 | 402 | 1,632 | 1,080 | |||||||||||
APS segment | 70 | 124 | 314 | 356 | |||||||||||
Refining segment | 84 | 58 | 251 | 53 | |||||||||||
Technology segment | 98 | 47 | 267 | 155 | |||||||||||
Other, including intersegment eliminations | 10 | — | 24 | (4 | ) | ||||||||||
Total | $ | 1,732 | $ | 1,821 | $ | 5,655 | $ | 5,408 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues | $ | 2,770 | $ | 2,347 | $ | 7,958 | $ | 7,300 | |||||||
Income from equity investments | 18 | 8 | 50 | 33 | |||||||||||
EBITDA | 704 | 591 | 2,131 | 2,130 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues | $ | 2,643 | $ | 2,640 | $ | 8,503 | $ | 7,636 | |||||||
Income from equity investments | 69 | 69 | 199 | 202 | |||||||||||
EBITDA | 262 | 599 | 1,036 | 1,638 |
Three Months Ended September 30, | Nine Months Ended September 30, 2018 | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues | $ | 2,509 | $ | 2,077 | $ | 7,436 | $ | 6,241 | |||||||
Income from equity investments | 2 | 4 | 4 | 5 | |||||||||||
EBITDA | 504 | 402 | 1,632 | 1,080 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues | $ | 1,039 | $ | 731 | $ | 2,710 | $ | 2,194 | |||||||
EBITDA | 70 | 124 | 314 | 356 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues | $ | 2,499 | $ | 1,670 | $ | 7,325 | $ | 4,736 | |||||||
EBITDA | 84 | 58 | 251 | 53 | |||||||||||
Heavy crude oil processing rates, thousands of barrels per day | 232 | 240 | 248 | 233 | |||||||||||
Market margins, dollars per barrel | |||||||||||||||
Light crude oil – 2-1-1 | $ | 13.15 | $ | 16.71 | $ | 13.60 | $ | 13.94 | |||||||
Light crude – Maya differential | 8.28 | 5.10 | 9.10 | 6.71 | |||||||||||
Total Maya 2-1-1 | $ | 21.43 | $ | 21.81 | $ | 22.70 | $ | 20.65 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Millions of dollars | 2018 | 2017 | 2018 | 2017 | |||||||||||
Sales and other operating revenues | $ | 171 | $ | 98 | $ | 468 | $ | 325 | |||||||
EBITDA | 98 | 47 | 267 | 155 |
Nine Months Ended September 30, | |||||||
Millions of dollars | 2018 | 2017 | |||||
Source (use) of cash: | |||||||
Operating activities | $ | 4,174 | $ | 3,724 | |||
Investing activities | (2,901 | ) | (1,254 | ) | |||
Financing activities | (2,242 | ) | (2,191 | ) |
Nine Months Ended September 30, | |||||||
Millions of dollars | 2018 | 2017 | |||||
Capital expenditures by segment: | |||||||
O&P–Americas | $ | 800 | $ | 540 | |||
O&P–EAI | 156 | 95 | |||||
I&D | 248 | 263 | |||||
APS | 41 | 34 | |||||
Refining | 128 | 184 | |||||
Technology | 29 | 21 | |||||
Other | 5 | 9 | |||||
Consolidated capital expenditures | $ | 1,407 | $ | 1,146 |
• | $2,360 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 |
• | $900 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 September 30, 2018. |
• | 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 (1) | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (1) | |||||||
July 1 – July 31 | 1,022,562 | $108.02 | 1,022,562 | 56,338,591 | |||||||
August 1 – August 31 | 530,996 | $112.62 | 530,996 | 55,807,595 | |||||||
September 1 – September 30 | 1,637,641 | $105.31 | 1,637,641 | 54,169,954 | |||||||
Total | 3,191,199 | $107.40 | 3,191,199 | 54,169,954 |
2.1 | |
2.2 | |
10.1 | |
31.1* | |
31.2* | |
32* | |
101.INS* | XBRL Instance Document |
101.SCH* | XBRL Schema Document |
101.CAL* | XBRL Calculation Linkbase Document |
101.DEF* | XBRL Definition Linkbase Document |
101.LAB* | XBRL Labels Linkbase Document |
101.PRE* | XBRL Presentation Linkbase Document |
LYONDELLBASELL INDUSTRIES N.V. | ||
Date: | October 30, 2018 | /s/ Jacinth C. Smiley |
Jacinth C. Smiley | ||
Vice President and | ||
Chief Accounting Officer | ||
(Principal Accounting Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Oct. 26, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2018 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001489393 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Registrant Name | LyondellBasell Industries N.V. | |
Trading Symbol | LYB | |
Entity Common Stock, Shares Outstanding | 383,657,690 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Net income | $ 1,113 | $ 1,056 | $ 3,998 | $ 2,983 |
Other comprehensive income (loss), net of tax – | ||||
Financial derivatives | 51 | (21) | 89 | (20) |
Unrealized gains (losses) on available-for-sale debt securities | 0 | 1 | 0 | (1) |
Unrealized gains on equity securities and equity securities held by equity investees | 0 | 6 | 0 | 10 |
Defined pension and other postretirement benefit plans | 6 | 7 | 20 | 20 |
Foreign currency translations | (8) | 23 | (63) | 143 |
Total other comprehensive income, net of tax | 49 | 16 | 46 | 152 |
Comprehensive income | 1,162 | 1,072 | 4,044 | 3,135 |
Comprehensive loss attributable to non-controlling interests | 0 | 1 | 0 | 2 |
Comprehensive income attributable to the Company shareholders | $ 1,162 | $ 1,073 | $ 4,044 | $ 3,137 |
Consolidated Balance Sheets (Parentheticals) - € / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Stockholders’ equity: | ||
Ordinary shares par value (in euros per share) | € 0.04 | € 0.04 |
Ordinary shares, shares authorized (in shares) | 1,275,000,000 | 1,275,000,000 |
Ordinary shares, shares outstanding (in shares) | 387,177,776 | 394,512,054 |
Treasury stock, shares (in shares) | 13,032,504 | 183,928,109 |
Consolidated Statement of Stockholders' Equity - USD ($) $ in Millions |
Total |
Ordinary Shares |
Treasury Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Company Share of Stockholders' Equity |
Non-Controlling Interests |
---|---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2016 | $ 31 | $ (14,945) | $ 10,191 | $ 12,282 | $ (1,511) | $ 6,048 | $ 25 | |
Net income (loss) | $ 2,983 | 0 | 0 | 0 | 2,985 | 0 | 2,985 | (2) |
Other comprehensive income | 152 | 0 | 0 | 0 | 0 | 152 | 152 | 0 |
Share-based compensation | 0 | 36 | 9 | 0 | 0 | 45 | 0 | |
Dividends | 0 | 0 | 0 | (1,060) | 0 | (1,060) | 0 | |
Repurchase of Company ordinary shares | (845) | 0 | (845) | 0 | 0 | 0 | (845) | 0 |
Purchase of non-controlling interest | 0 | 0 | 1 | 0 | 0 | 1 | (22) | |
Ending balance at Sep. 30, 2017 | 31 | (15,754) | 10,201 | 14,207 | (1,359) | 7,326 | 1 | |
Beginning balance at Jun. 30, 2017 | 31 | (15,494) | 10,198 | 13,506 | (1,375) | 6,866 | 2 | |
Net income (loss) | 1,056 | 0 | 0 | 0 | 1,057 | 0 | 1,057 | (1) |
Other comprehensive income | 16 | 0 | 0 | 0 | 0 | 16 | 16 | 0 |
Share-based compensation | 0 | 6 | 3 | 0 | 0 | 9 | 0 | |
Dividends | 0 | 0 | 0 | (356) | 0 | (356) | 0 | |
Repurchase of Company ordinary shares | 0 | (266) | 0 | 0 | 0 | (266) | 0 | |
Ending balance at Sep. 30, 2017 | 31 | (15,754) | 10,201 | 14,207 | (1,359) | 7,326 | 1 | |
Beginning balance at Dec. 31, 2017 | 8,950 | 31 | (15,749) | 10,206 | 15,746 | (1,285) | 8,949 | 1 |
Net income (loss) | 3,998 | 0 | 0 | 0 | 3,998 | 0 | 3,998 | 0 |
Other comprehensive income | 46 | 0 | 0 | 0 | 0 | 46 | 46 | 0 |
Share-based compensation | 0 | 31 | 20 | 0 | 0 | 51 | 0 | |
Dividends | (1,176) | 0 | 0 | 0 | (1,176) | 0 | (1,176) | 0 |
Repurchase of Company ordinary shares | (821) | 0 | (821) | 0 | 0 | 0 | (821) | 0 |
Purchase of non-controlling interest | 0 | 0 | (28) | 0 | 0 | (28) | 0 | |
Cancellation of treasury shares | (9) | 15,384 | (3,165) | (12,210) | 0 | 0 | 0 | |
Acquisition of A. Schulman Inc. | 0 | 0 | 0 | 0 | 0 | 0 | 24 | |
Ending balance at Sep. 30, 2018 | 11,069 | 22 | (1,155) | 7,033 | 6,453 | (1,309) | 11,044 | 25 |
Beginning balance at Jun. 30, 2018 | 31 | (16,200) | 10,190 | 17,939 | (1,358) | 10,602 | 1 | |
Net income (loss) | 1,113 | 0 | 0 | 0 | 1,113 | 0 | 1,113 | 0 |
Other comprehensive income | 49 | 0 | 0 | 0 | 0 | 49 | 49 | 0 |
Share-based compensation | 0 | 4 | 8 | 0 | 0 | 12 | 0 | |
Dividends | 0 | 0 | 0 | (389) | 0 | (389) | 0 | |
Repurchase of Company ordinary shares | 0 | (343) | 0 | 0 | 0 | (343) | 0 | |
Cancellation of treasury shares | (9) | 15,384 | (3,165) | (12,210) | 0 | 0 | 0 | |
Acquisition of A. Schulman Inc. | 0 | 0 | 0 | 0 | 0 | 0 | 24 | |
Ending balance at Sep. 30, 2018 | $ 11,069 | 22 | (1,155) | 7,033 | 6,453 | (1,309) | 11,044 | 25 |
Adoption of accounting standards | $ 0 | $ 0 | $ 0 | $ 95 | $ (70) | $ 25 | $ 0 |
Consolidated Statement of Stockholders' Equity (Parentheticals) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per share (in dollars per share) | $ 1.00 | $ 0.90 | $ 3.00 | $ 2.65 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation [Text Block] | 1. Basis of Presentation LyondellBasell Industries N.V., together with its consolidated subsidiaries (collectively “LyondellBasell N.V.”), is a worldwide manufacturer of chemicals and polymers, a refiner of crude oil, a significant producer of gasoline blending components and a developer and licensor of technologies for production of polymers. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell N.V. The accompanying Consolidated Financial Statements are unaudited and have been prepared from the books and records of LyondellBasell N.V. in accordance with the instructions to Form 10-Q and Rule 10-1 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. In our opinion, all adjustments, including normal recurring adjustments, considered necessary for a fair statement have been included. The results for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. On August 21, 2018, we acquired A. Schulman Inc. (“A. Schulman”), a global supplier of high-performance plastic compounds, composites and resins, pursuant to an Agreement and Plan of Merger dated February 15, 2018. As a result of the acquisition, A. Schulman became a wholly owned subsidiary and its results of operations are consolidated prospectively from August 21, 2018 (see Note 3). |
Accounting and Reporting Changes |
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Accounting and Reporting Changes [Text Block] | 2. Accounting and Reporting Changes
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Business Combination |
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Business Combination Disclosure [Text Block] | 3. Business Combination On August 21, 2018, through an indirect wholly owned subsidiary, we acquired all of the outstanding common stock of A. Schulman Inc., a Delaware corporation for an aggregate purchase price of approximately $1,940 million, including a $1,240 million cash payment to the former common stock holders, $594 million for the repayment of A. Schulman debt and $106 million for the settlement of stock-based compensation plans and other purchase consideration. The acquisition of A. Schulman, a global supplier of high-performance plastic compounds, composites and powders, builds upon our already existing platform in this space, allowing us to create our Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio. Preliminary Purchase Price Allocation—The following table summarizes the allocation of the purchase price based on the fair value of the assets acquired and liabilities, redeemable noncontrolling interests and noncontrolling interests assumed on the acquisition date.
In determining the fair value, we utilized various forms of the income, cost and market approaches depending on the asset or liability being fair valued, primarily using Level 3 inputs. The estimation of fair value required significant judgment related to future net cash flows (including net sales, cost of products sold, selling and marketing costs, and working capital/contributory asset charges), discount rates reflecting the risk inherent in each cash flow stream, competitive trends, market comparisons and other factors. Inputs were generally determined by taking into account historical data, supplemented by current and anticipated market conditions, and growth rates. The purchase price allocation presented above, including the residual amount allocated to goodwill, is based on preliminary information and is subject to change as additional information concerning final asset and liability valuations is obtained. The primary areas of the preliminary purchase price allocation that have not been finalized relate to the fair value of inventories, accounts receivables, property, plant and equipment, investments, intangible assets, contingencies and the related impacts on deferred income taxes and cumulative translation adjustments. During the measurement period, we will adjust assets and liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. The effect of measurement period adjustments to the estimated fair values will be reflected as if the adjustments had been completed on the acquisition date. The impact of all changes that do not qualify as measurement period adjustments will be included in current period earnings. Inventories—The acquired inventory of $300 million comprises $180 million of finished goods, $8 million of work-in-process and $112 million of raw materials and supplies. Fair value of finished goods was based on the estimated selling price of finished goods on hand less costs to sell, including disposal and holding period costs, and a reasonable profit margin on the selling and disposal effort for each specific category of finished goods being evaluated. Fair value of work in process was based on the estimated selling price once completed less total costs to complete the manufacturing process, costs to sell including disposal and holding period costs, a reasonable profit margin on the remaining manufacturing, selling, and disposal effort. Raw materials were valued based on current replacement cost. Other Current Assets and Current Liabilities—Due to the short maturity of these assets and liabilities, their fair values closely approximate their carrying values; therefore, their fair values are deemed to be their respective carrying values. The gross contractual amount of the receivables presented in the table above is $415 million. Property, Plant and Equipment—The fair value of the components of property, plant and equipment acquired are represented in the table below:
Fair value for the acquired property, plant and equipment was determined using two valuation methods: the market approach and the replacement cost approach. The market approach represents a sales comparison that measures the value of an asset through an analysis of sales and offerings of comparable assets. The replacement cost approach measures the value of an asset by estimating the cost to acquire or construct comparable assets adjusted for the age and condition of the asset. Goodwill—Goodwill represents the excess of consideration over the net fair value of the acquired assets and liabilities, redeemable noncontrolling interest and noncontrolling interest assumed. The acquisition resulted in $1,259 million of goodwill, which will not be deductible for tax purposes. The goodwill recognized in this transaction largely consists of the acquired workforce and expected synergies resulting from the acquisition. Cost synergies will be achieved through a combination of workforce consolidations, savings from procurement synergies, optimizing warehouse and logistic footprints, implementing systems and processes best practices and leveraging existing research and development knowledge management systems. All of the goodwill was assigned to our APS segment. As a result of the reorganization of our operating segments, an additional $40 million of goodwill attributed to the polypropylene compounding, Catalloy and polybutene-1 businesses previously reported in our O&P–EAI segment was assigned to our APS segment at the acquisition date. Intangible Assets—The fair value, weighted average useful life and useful life of each class of intangible asset acquired are presented in the following table:
Know-how in the table above represents formulations, know-how and trade secrets associated with manufacturing processes. The fair values of know-how and trade name and trademarks were determined using the relief from royalty method. The excess earnings method was used to determine the fair value of customer relationships. These methods are all variations of the income approach. The total weighted-average life of the acquired intangible assets that are subject to amortization is 11 years. Other Assets and Other Liabilities—Other assets include deferred tax assets and pension assets while other liabilities are primarily related to pension and other postretirement benefit plans. Long-Term Debt—In August 2018, we notified bondholders that we would call the assumed $375 million 6.875% Senior Notes due June 2023 at a price of 105.156% of par. In conjunction with the repayment of the debt in September 2018, we paid a make-whole premium of $19 million. These notes were recognized at redemption value which approximates fair value at the acquisition date. Redeemable Noncontrolling Interests—Our redeemable noncontrolling interests relate to 124,347 shares of cumulative perpetual special stock issued by our consolidated subsidiary, A. Schulman, Inc. (“A. Schulman Special Stock”). Holders of A. Schulman Special Stock are entitled to receive cumulative dividends at the rate of 6% per share on the liquidation preference of $1,000 per share. These shares may be redeemed at any time at the discretion of the holders. In August and September of 2018, 2,820 shares of A. Schulman Special Stock were redeemed for approximately $3 million. As of September 30, 2018, 121,527 shares of A. Schulman Special Stock were outstanding. At the acquisition date, the fair value was estimated using the Black Derman Toy binomial lattice technique, which models the decision to redeem or hold by considering the maximum of the redemption value and the hold value throughout the term of the instrument and chooses the action that maximizes the return to the holder. This model requires assumptions on credit spread, yield volatility and risk-free rates. Acquisition Costs—We incurred approximately $30 million of acquisition-related transaction costs in connection with the acquisition of A. Schulman during the nine months ended September 30, 2018. These costs comprising banker, legal and consulting fees were classified in our Consolidated Statements of Income for the three-and-nine months ended September 30, 2018 as selling, general and administrative expenses. Pro forma Information—Our Consolidated Financial Statements include the operating results of A. Schulman from August 21, 2018 to September 30, 2018, including revenues of $269 million and loss from continuing operations before income taxes of $2 million. Pro forma results of operations for this acquisition have not been presented because the effects of the acquisition were not material to our pre-acquisition financial results. |
Revenues |
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Revenues [Text Block] | 4. Revenues Adoption of New Revenue Accounting Guidance—On January 1, 2018, we adopted the accounting standard ASC 606, Revenue from Contracts with Customers and all related amendments using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. We recognized an $18 million adjustment to the beginning retained earnings balance for the cumulative effect of initially applying the new standard. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of the adoption of this new guidance was immaterial for the nine months ended September 30, 2018, and we expect the impact to be immaterial to our Consolidated Financial Statements on an ongoing basis. Revenue Recognition—Substantially all our revenues are derived from contracts with customers. We account for contracts when both parties have approved the contract and are committed to perform, the rights of the parties and payment terms have been identified, the contract has commercial substance, and collectability is probable. Payments are typically required within a short period following the transfer of control of the product to the customer. We occasionally require customers to prepay purchases to ensure collectability. Such prepayments do not represent financing arrangements, since payment and fulfillment of the performance obligation occurs within a short time frame. We elected to apply the practical expedient not to adjust the promised amount of consideration for the effects of a significant financing component when, at contract inception, we expect that payment will occur in one year or less. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. This generally occurs at the point in time when performance obligations are fulfilled and control transfers to the customer. In most instances, control transfers upon transfer of risk of loss and title to the customer, which usually occurs when we ship products to the customer from our manufacturing facility. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Customer incentives are generally based on volumes purchased and recognized over the period earned. Sales, value added, and other taxes that we collect concurrent with revenue-producing activities are excluded from the transaction price as they represent amounts collected on behalf of third parties. Incidental costs incurred to obtain a contract are immaterial in the context of the contract and are recognized as expense. We have elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Shipping and handling costs are treated as a fulfillment cost and not a separate performance obligation. Contract Balances—Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs. Our contract liabilities, which are reflected in our Consolidated Financial Statements as Accrued liabilities and Other liabilities, consist primarily of customer payments for products or services received before the transfer of control to the customer occurs. These contract liabilities were $89 million as of September 30, 2018. Revenue recognized in the reporting period included in the contract liability balance at the beginning of the period was immaterial. Disaggregation of Revenues—We participate globally across the petrochemical value chain and are an industry leader in many of our product lines. Our chemical businesses consist primarily of large processing plants that convert large volumes of liquid and gaseous hydrocarbon feedstocks into plastic resins and other chemicals. Our chemical products tend to be basic building blocks for other chemicals and plastics, while our plastic products are typically used in large volume applications. Our refining business consists of our Houston refinery, which processes crude oil into refined products such as gasoline, diesel and jet fuel. Petrochemical products generally follow global price trends of crude oil, natural gas liquids and/or natural gas. Price volatility significantly affects our revenues, as our sales contracts are tied to global commodity indexes. Other factors such as global industry capacities and operating rates, foreign exchange rates and worldwide geopolitical trends also affect our revenues. The following table presents our revenues disaggregated by key products for the three and nine months ended September 30, 2018:
The following table presents our revenues disaggregated by geography, based upon the location of the customer, for the three and nine months ended September 30, 2018:
Transaction Price Allocated to the Remaining Performance Obligations—We have elected to exclude contracts which have an initial term of one year or less from this disclosure. Our contracts with customers are commodity supply arrangements that settle based on market prices at future delivery dates; therefore, transaction prices are entirely variable. Transaction prices are known at the time revenue is recognized since they are generally determined by the commodity price index at a specific date, at month-end or at the month average once products are shipped to our customers. Future estimates of transaction prices for disclosure purposes are substantially constrained as they are highly susceptible to factors outside our influence, including volatility in commodity markets, industry production capacities and operating rates, planned and unplanned industry operating interruptions, foreign exchange rates and worldwide geopolitical trends. |
Accounts Receivable |
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Receivables [Abstract] | |
Accounts Receivable [Text Block] | 5. Accounts Receivable Our allowance for doubtful accounts receivable, which is reflected in the Consolidated Balance Sheets as a reduction of accounts receivable, totaled $16 million and $17 million at September 30, 2018 and December 31, 2017, respectively. |
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Inventories [Text Block] | 6. Inventories Inventories consisted of the following components:
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Debt |
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Debt [Text Block] | 7. Debt Long-term loans, notes and other long-term debt, net of unamortized discount and debt issuance cost, consisted of the following:
Fair value hedging adjustments associated with the fair value hedge accounting of our fixed-for-floating interest rate swaps for the applicable periods are as follows:
The cumulative fair value hedging adjustments remaining at September 30, 2018 and December 31, 2017 associated with our Senior Notes due 2019 included $13 million and $31 million, respectively, for hedges that have been discontinued. The $46 million loss in the nine months ended September 30, 2017 included a $44 million charge for the write-off of the cumulative fair value hedging adjustment related to our 5% Senior Notes due 2019 described below. These fair value adjustments are recognized in Interest expense in the Consolidated Statements of Income. Short-term loans, notes, and other short-term debt consisted of the following:
Long-Term Debt Guaranteed Notes due 2027—In March 2017, LYB International Finance II B.V. (“LYB Finance II”), a direct, 100% owned finance subsidiary of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X, issued $1,000 million of 3.5% guaranteed notes due 2027 at a discounted price of 98.968%. Senior Notes due 2019—In March 2017, we redeemed $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019, and paid $65 million in make-whole premiums. In conjunction with the redemption of these notes, we recognized non-cash charges of $4 million for the write-off of unamortized debt issuance costs and $44 million for the write-off of the cumulative fair value hedge accounting adjustment related to the redeemed notes. The remaining balance of these notes is due in April 2019 and is reflected in our Consolidated Balance Sheets in Current maturities of long-term debt. Short-Term Debt Senior Revolving Credit Facility—Our $2,500 million revolving credit facility, which expires in June 2022, may be used for dollar and euro denominated borrowings, has a $500 million sublimit for dollar and euro denominated letters of credit, a $1,000 million uncommitted accordion feature, and supports our commercial paper program. The aggregate balance of outstanding borrowings, including amounts outstanding under our commercial paper program, and letters of credit under this facility may not exceed $2,500 million at any given time. Borrowings under the facility bear interest at a Base Rate or LIBOR, plus an applicable margin. Additional fees are incurred for the average daily unused commitments. The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00 or less for the period covering the most recent four quarters. We are in compliance with these covenants as of September 30, 2018. Commercial Paper Program—We have a commercial paper program under which we may issue up to $2,500 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). This program is backed by our $2,500 million senior revolving credit facility. Proceeds from the issuance of commercial paper may be used for general corporate purposes, including dividends and share repurchases. Interest rates on the commercial paper outstanding at September 30, 2018 are based on the terms of the notes and range from 230 to 240 basis points. U.S. Receivables Facility—In July 2018, we amended our U.S. accounts receivable facility to, among other things, extend the term of the facility to July 2021. The facility has a purchase limit of $900 million in addition to a $300 million uncommitted accordion feature. This facility provides liquidity through the sale or contribution of trade receivables by certain of our U.S. subsidiaries to a wholly owned, bankruptcy-remote subsidiary on an ongoing basis and without recourse. The bankruptcy-remote subsidiary may then, at its option and subject to a borrowing base of eligible receivables, sell undivided interests in the pool of trade receivables to financial institutions participating in the facility. In the event of liquidation, the bankruptcy-remote subsidiary’s assets will be used to satisfy the claims of its creditors prior to any assets or value in the bankruptcy-remote subsidiary becoming available to us. We are responsible for servicing the receivables. This facility also provides for the issuance of letters of credit up to $200 million. The term of the facility may be extended in accordance with the terms of the agreement. The facility is also subject to customary warranties and covenants, including limits and reserves and the maintenance of specified financial ratios. We are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00 or less for the period covering the most recent four quarters. Performance obligations under the facility are guaranteed by the parent company. Additional fees are incurred for the average daily unused commitments. At September 30, 2018, there were no borrowings or letters of credit under the facility. Weighted Average Interest Rate—At September 30, 2018 and December 31, 2017, our weighted average interest rate on outstanding short-term debt was 3.0% and 1.8%, respectively. Debt Discount and Issuance Costs—For the nine months ended September 30, 2018 and 2017, amortization of debt discounts and debt issuance costs resulted in amortization expense of $11 million and $16 million, respectively, which is included in Interest expense in the Consolidated Statements of Income. Other Information—On December 28, 2016, LYB International Finance III, LLC was formed as a private company with limited liability in Delaware. LYB International Finance III, LLC is a direct, 100% owned finance subsidiary of LyondellBasell N.V., as defined in Rule 3-10(b) of Regulation S-X. Any debt securities issued by LYB International Finance III, LLC will be fully and unconditionally guaranteed by LyondellBasell N.V. |
Financial Instruments and Fair Value Measurements |
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Financial Instruments and Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Fair Value Measurements [Text Block] | 8. Financial Instruments and Fair Value Measurements We are exposed to market risks, such as changes in commodity pricing, currency exchange rates and interest rates. To manage the volatility related to these exposures, we selectively enter into derivative transactions pursuant to our risk management policies. A summary of our financial instruments, risk management policies, derivative instruments, hedging activities and fair value measurement can be found in Notes 2 and 14 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. If applicable, updates have been included in the respective sections below. At September 30, 2018 and December 31, 2017, we had marketable securities classified as cash and cash equivalents of $189 million and $1,035 million, respectively. Foreign Currency Gain (Loss)—Other income, net, in the Consolidated Statements of Income reflected foreign currency gains of $6 million and $14 million for the three and nine months ended September 30, 2018, respectively, and foreign currency losses of less than $1 million and $6 million for the three and nine months ended September 30, 2017, respectively. Financial Instruments Measured at Fair Value on a Recurring Basis—The following table summarizes financial instruments outstanding as of September 30, 2018 and December 31, 2017 that are measured at fair value on a recurring basis:
All derivatives and available-for-sale debt securities in the tables above are classified as Level 2. Our limited partnership investments included in our equity securities discussed below, are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. At September 30, 2018, our outstanding foreign currency and commodity contracts not designated as hedges mature from October 2018 to August 2019 and from October 2018 to December 2018, respectively. Financial Instruments Not Measured at Fair Value on a Recurring Basis—The following table presents the carrying value and estimated fair value of our financial instruments that are not measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017. Short-term loans receivable, which represent our repurchase agreements, and short-term and long-term debt are recorded at amortized cost in the Consolidated Balance Sheets. The carrying and fair values of short-term and long-term debt exclude capital leases and commercial paper.
All financial instruments in the table above are classified as Level 2. There were no transfers between Level 1 and Level 2 for any of our financial instruments during the nine months ended September 30, 2018 and the year ended December 31, 2017. Net Investment Hedges—In 2018, we entered into €800 million of foreign currency contracts that were designated as net investment hedges. On June 15, 2018, €400 million of these foreign currency contracts expired, resulting in €400 million ($473 million at the expiry spot rate) settlement payment to and $498 million receipt from our counterparties, respectively. On September 10, 2018, €325 million of our foreign currency contracts expired, resulting in €325 million ($377 million at the expiry spot rate) settlement payment to and $374 million receipt from our counterparties, respectively. In 2017, we entered into €617 million of foreign currency contracts that were designated as net investment hedges. In 2016, we issued euro denominated notes payable due 2022 with notional amounts totaling €750 million that were designated as a net investment hedge. In May 2018, we dedesignated and redesignated a €125 million tranche of our euro denominated notes payable due 2022 as a net investment hedge. At September 30, 2018 and December 31, 2017, we had outstanding foreign currency contracts with an aggregate notional value of €817 million ($886 million) and €742 million ($789 million), respectively, designated as net investment hedges. In addition, at September 30, 2018 and December 31, 2017 we had outstanding foreign-currency denominated debt, with notional amount totaling €750 million ($869 million) and €750 million ($899 million), respectively, designated as a net investment hedge. There was no ineffectiveness recorded during the three and nine months ended September 30, 2017 related to these hedging relationships. Cash Flow Hedges—The following table summarizes our cash flow hedges outstanding at September 30, 2018 and December 31, 2017:
There was less than $1 million of ineffectiveness recorded during the three months ended September 30, 2017 and $1 million of ineffectiveness recorded during the nine months ended September 30, 2017 related to these hedging relationships. In June 2018 and July 2018, we entered into forward-starting interest rate swaps with a total notional amount of $300 million and $200 million, respectively, to mitigate the risk of variability in interest rates for an expected debt issuance by November 2021. These swaps were designated as cash flow hedges and will be terminated upon debt issuance. As of September 30, 2018, $1 million is scheduled to be reclassified as a decrease to interest expense and $21 million is scheduled to be reclassified as a decrease to cost of sales over the next twelve months. Fair Value Hedges—In May 2018, we entered into a euro fixed-for-floating interest rate swap to mitigate the change in the fair value of €125 million ($147 million) of our €750 million notes payable due 2022 associated with the risk of variability in the 6-month EURIBOR rate (the benchmark interest rate). The fixed-rate and variable-rate are settled annually and semi-annually, respectively. In February 2017, we entered into U.S. dollar fixed-for-floating interest rate swaps to mitigate changes in the fair value of our $1,000 million 3.5% guaranteed notes due 2027 associated with the risk of variability in the 3 Month USD LIBOR rate (the benchmark interest rate). The fixed-rate and variable-rate are settled semi-annually and quarterly, respectively. In March 2017, concurrent with the redemption of $1,000 million of our outstanding 5% senior notes due 2019, we dedesignated the related $2,000 million fair value hedge and terminated swaps in the notional amount of $1,000 million. At the same time, we redesignated the remaining $1,000 million notional amount of swaps as a fair value hedge of the remaining $1,000 million of 5% senior notes outstanding. We had outstanding interest rate contracts with aggregate notional amounts of $3,147 million and $3,000 million at September 30, 2018 and December 31, 2017, respectively, designated as fair value hedges. Our interest rate contracts outstanding at September 30, 2018 mature from 2019 to 2027. There was $4 million and $11 million of ineffectiveness recorded for the three and nine months ended September 30, 2017, respectively, related to these hedging relationships. Impact on Earnings and Other Comprehensive Income—The following table summarizes the pre-tax effect of derivative instruments and non-derivative instruments on Other comprehensive income and earnings for the three and nine months ended September 30, 2018 and 2017:
The derivative amounts excluded from effectiveness testing for foreign currency contracts designated as net investment hedges recognized in other comprehensive income for the three and nine months ended September 30, 2018 were losses of $1 million and gains of $14 million, respectively. The derivative amounts excluded from effectiveness testing for foreign currency contracts designated as net investment hedges recognized in interest expense for the three and nine months ended September 30, 2018 were gains of $8 million and $21 million, respectively. For the three and nine months ended September 30, 2018, losses of $13 million and $75 million, respectively, for our foreign currency contracts designated as cash flow hedges were reclassified from AOCI to Other income, net. The pre-tax effect of the periodic receipt of fixed interest and payment of variable interest associated with our fixed-for-floating interest rate swaps resulted in interest expense losses of $3 million and $1 million during the three and nine months ended September 30, 2018, respectively; and, resulted in interest expense gains of $5 million and $18 million during the three and nine months ended September 30, 2017, respectively. These gains and losses are not included in the tables above. Investments in Available-for-Sale Debt Securities—The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of our available-for-sale debt securities that are outstanding as of September 30, 2018 and December 31, 2017:
No losses related to other-than-temporary impairments of our available-for-sale debt securities have been recorded in Accumulated other comprehensive loss during the three and nine months ended September 30, 2018 and the year ended December 31, 2017. As of September 30, 2018, bonds classified as available-for-sale debt securities had maturities between two and twenty-five months. The proceeds from maturities and sales of our available-for-sale debt securities during the three and nine months ended September 30, 2018 and 2017 are summarized in the following table:
No gain or loss was realized in connection with the sales of our available-for-sale debt securities during the three and nine months ended September 30, 2018 and 2017. During the nine months ended September 30, 2017, we had maturities of our held-to-maturity securities of $75 million. The following table summarizes the fair value and unrealized losses related to available-for-sale debt securities that were in a continuous unrealized loss position for less than and greater than twelve months as of September 30, 2018 and December 31, 2017:
Investments in Equity Securities—Our equity securities primarily consist of our limited partnership investments, which include investments in, among other things, equities and equity related securities, debt securities, credit instruments, global interest rate products, currencies, commodities, futures, options, warrants and swaps. These investments may be redeemed at least monthly with advance notice ranging up to ninety days. These investments had a notional amount of $350 million and a fair value of $358 million at September 30, 2018. The following table summarizes the portion of unrealized gains and losses for the equity securities that are outstanding as of September 30, 2018:
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Pension and Other Postretirement Benefits |
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Pension and Other Postretirement Benefits [Text Block] | 9. Pension and Other Postretirement Benefits Net periodic pension benefits included the following cost components for the periods presented:
Net periodic other postretirement benefits included the following cost components for the periods presented:
The components of net periodic benefit cost other than the service cost component are included in Other income, net in the Consolidated Statements of Income. |
Income Taxes |
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Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes [Text Block] | 10. Income Taxes Our effective income tax rate for the three months ended September 30, 2018 was 17.2% compared with 26.4% for the three months ended September 30, 2017. For the nine months ended September 30, 2018, the effective income tax rate was 11.4% compared with 27.8% for the nine months ended September 30, 2017. Our effective income tax rate fluctuates based on, among other factors, changes in statutory tax rates, changes in pretax income in countries with varying statutory tax rates, changes in valuation allowances, changes in foreign exchange gains/losses, the amount of exempt income and changes in unrecognized tax benefits associated with uncertain tax positions. Compared with the three months ended September 30, 2017, the lower effective tax rate for the three months ended September 30, 2018 was primarily attributable to the impact of the reduction to the U.S. federal statutory tax rate as a result of the Tax Act, changes in pretax income in countries with varying statutory tax rates, increases in exempt income, and changes in foreign exchange gains/losses. Compared with the nine months ended September 30, 2017, the lower effective tax rate for the nine months ended September 30, 2018 was primarily attributable to changes in unrecognized tax benefits associated with uncertain tax positions, the impact of the reduction to the U.S. federal statutory tax rate as a result of the Tax Act and increases in exempt income, partially offset by the repeal of the U.S. domestic production activity deduction. We operate in multiple jurisdictions throughout the world, and our tax returns are periodically audited or subjected to review by tax authorities. We are currently under examination in a number of tax jurisdictions. As a result, there is an uncertainty in income taxes recognized in our financial statements. Positions challenged by the tax authorities may be settled or appealed by us. During the nine months ended September 30, 2018, we entered into an audit settlement impacting specific uncertain tax positions. This audit settlement resulted in a $346 million non-cash benefit to our effective tax rate consisting of the recognition of $288 million of previously unrecognized tax benefits as a reduction for tax positions of prior years and the release of $58 million of previously accrued interest. This non-cash reduction in unrecognized tax benefits is reflected on our Consolidated Balance Sheet in Other liabilities and on our Consolidated Statement of Cash Flows in Other operating activities. Tax benefits totaling $262 million and $544 million were unrecognized as of September 30, 2018 and December 31, 2017, respectively. It is reasonably possible that, within the next twelve months, due to the settlement of uncertain tax positions with various tax authorities and the expiration of statutes of limitations, unrecognized tax benefits could decrease by up to approximately $180 million. We recognize interest associated with unrecognized tax benefits in income tax expense. Income tax expense includes a benefit of interest totaling $46 million in the nine months ended September 30, 2018, and interest expense totaling $16 million in the year ended December 31, 2017. We accrued approximately $17 million and $63 million for interest and penalties as of September 30, 2018 and December 31, 2017, respectively. We monitor income tax developments in countries where we conduct business. On December 22, 2017, the Tax Act was enacted with some provisions effective as early as 2017 while others were delayed until 2018. This change in U.S. tax law included a reduction in the federal corporate tax rate from 35% to 21% for years beginning after 2017, which resulted in the remeasurement of our U.S. net deferred income tax liabilities. Our 2017 income tax provision included a provisional estimate of $819 million income tax benefit related to the remeasurement of our U.S. net deferred income tax liabilities. The impact of the Tax Act may differ from this reasonable estimate due to additional guidance that may be issued, changes in assumptions made, and the finalization of certain U.S. income tax positions with the filing of our 2017 U.S. income tax return which will allow for the ability to conclude whether any further adjustments are necessary to our deferred tax assets and liabilities. Any adjustments to these provisional amounts will be reported as a component of income tax expense in the reporting period in which any such adjustments are identified which will be no later than the fourth quarter of 2018. |
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Commitments and Contingencies [Text Block] | 11. Commitments and Contingencies Financial Assurance Instruments—We have obtained letters of credit, performance and surety bonds and have issued financial and performance guarantees to support trade payables, potential liabilities and other obligations. Considering the frequency of claims made against the financial instruments we use to support our obligations, and the magnitude of those financial instruments in light of our current financial position, management does not expect that any claims against or draws on these instruments would have a material adverse effect on our Consolidated Financial Statements. We have not experienced any unmanageable difficulty in obtaining the required financial assurance instruments for our current operations. Environmental Remediation—Our accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $92 million and $102 million as of September 30, 2018 and December 31, 2017, respectively. At September 30, 2018, the accrued liabilities for individual sites range from less than $1 million to $17 million. The remediation expenditures are expected to occur over a number of years, and not to be concentrated in any single year. In our opinion, it is reasonably possible that losses in excess of the liabilities recorded may have been incurred. However, we cannot estimate any amount or range of such possible additional losses. New information about sites, new technology or future developments such as involvement in investigations by regulatory agencies, could require us to reassess our potential exposure related to environmental matters. The following table summarizes the activity in our accrued environmental liability included in “Accrued liabilities” and “Other liabilities:”
Access Indemnity Demand—In December 2010, one of our subsidiaries received demand letters from affiliates of Access Industries (collectively, “Access Entities”), a more than five percent shareholder of the Company, demanding indemnity for losses, including attorney’s fees and expenses, arising out of a 2007 management agreement and a pending lawsuit styled Edward S. Weisfelner, as Litigation Trustee of the LB Litigation Trust v. Leonard Blavatnik, et al., Adversary Proceeding No. 09-1375 (REG), in the United States Bankruptcy Court, Southern District of New York. In the Weisfelner lawsuit, the plaintiffs sought recovery from Access all amounts earned by the Access Entities related to their purchase of shares of Lyondell Chemical Company (“Lyondell Chemical”) prior to its acquisition by Basell AF S.C.A.; distributions by Basell AF S.C.A. to its shareholders before it acquired Lyondell Chemical; and management and transaction fees and expenses. The Access Entities also demanded $100 million in management fees under the management agreement between an Access affiliate and the predecessor of LyondellBasell AF, as well as other unspecified amounts relating to advice purportedly given in connection with financing and other strategic transactions. In June 2009, an Access affiliate filed a proof of claim in Bankruptcy Court against LyondellBasell AF seeking “no less than $723,963.65” for the amounts allegedly owed under the 2007 management agreement. We did not believe that the 2007 management agreement was in effect or that the Company or any Company-affiliated entity owed any obligation under the management agreement, including for management fees or for indemnification. We defended our position in proceedings and against any claims or demands that were asserted. In April 2011, Lyondell Chemical filed an objection to the claim and brought a declaratory judgment action for a determination that the demands were not valid and the declaratory judgment action was stayed per the parties’ agreement pending the outcome of the Weisfelner lawsuit. The Weisfelner lawsuit went to trial in October 2016. In April 2017, the trial court awarded $12.6 million to the plaintiffs and denied all other relief, and in May 2017 the court issued its Final Judgment reflecting this ruling. The plaintiffs filed an appeal to the Federal District Court for the Southern District of New York, which largely affirmed the Final Judgment on January 24, 2018. In April 2018, the Company and the Access Entities agreed to settle all claims, including under the 2009 Proof of Claim and 2007 Management Agreement, described in the April 2011 declaratory judgment action and the Access Entities’ December 2010 demand letters. No payments were required by either side under the settlement agreement; the declaratory judgment action was dismissed and the Proof of Claim was withdrawn. Indemnification—We are parties to various indemnification arrangements, including arrangements entered into in connection with acquisitions, divestitures and the formation and dissolution of joint ventures. Pursuant to these arrangements, we provide indemnification to and/or receive indemnification from other parties in connection with liabilities that may arise in connection with the transactions and in connection with activities prior to completion of the transactions. These indemnification arrangements typically include provisions pertaining to third party claims relating to environmental and tax matters and various types of litigation. As of September 30, 2018, we had not accrued any significant amounts for our indemnification obligations, and we are not aware of other circumstances that would likely lead to significant future indemnification obligations. We cannot determine with certainty the potential amount of future payments under the indemnification arrangements until events arise that would trigger a liability under the arrangements. As part of our technology licensing contracts, we give indemnifications to our licensees for liabilities arising from possible patent infringement claims with respect to certain proprietary licensed technologies. Such indemnifications have a stated maximum amount and generally cover a period of five to ten years. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity [Text Block] | 12. Stockholders’ Equity Dividend Distributions—The following table summarizes the dividends paid in the periods presented:
Share Repurchase Programs—In June 2018, our shareholders approved a proposal to authorize us to repurchase up to 57,844,016 of our ordinary shares through December 1, 2019 (“June 2018 Share Repurchase Program”), which superseded the remaining authorization under our May 2017 Share Repurchase Program. The timing and amount of these repurchases, which are determined based on our evaluation of market conditions and other factors, may be executed from time to time through open market or privately negotiated transactions. The repurchased shares, which are recorded at cost, are classified as Treasury stock and may be retired or used for general corporate purposes, including for various employee benefit and compensation plans. The following table summarizes our share repurchase activity for the periods presented:
Due to the timing of settlements, total cash paid for share repurchases for the nine months ended September 30, 2018 and 2017 was $801 million and $866 million, respectively. Ordinary Shares—The changes in the outstanding amounts of ordinary shares are as follows:
Treasury Shares—The changes in the amounts of treasury shares held by the Company are as follows:
During the three months ended September 30, 2018, following approval by our management and shareholders, we canceled 178,229,883 ordinary shares held in our treasury account in accordance with cancellation requirements under Dutch law. Purchase of ordinary shares during the three months ended September 30, 2018 includes 23,407 shares that were returned to us at no cost resulting from unclaimed distributions to creditors. Accumulated Other Comprehensive Income (Loss)—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the nine months ended September 30, 2018 and 2017 are presented in the following table:
The amounts reclassified out of each component of Accumulated other comprehensive loss are as follows:
Amortization of prior service cost and actuarial loss is included in the computation of net periodic pension and other postretirement benefit costs (see Note 9). |
Per Share Data |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Share Data [Text Block] | 13. Per Share Data Basic earnings per share are based upon the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share includes the effect of certain stock option awards and other equity-based compensation awards. We have unvested restricted stock units that are considered participating securities for earnings per share. Earnings per share data and dividends declared per share of common stock are as follows:
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Segment and Related Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Related Information [Text Block] | 14. Segment and Related Information In conjunction with our acquisition of A. Schulman, we formed the Advanced Polymer Solutions business management function for the product lines acquired in the acquisition. In addition, the responsibility for business decisions relating to polypropylene compounding, Catalloy and polybutene-1, previously reflected in our O&P–EAI and O&P–Americas segments, were moved to our new Advanced Polymer Solutions business management function. These products are now reflected in our new Advanced Polymer Solutions segment. All comparable periods presented have been revised to reflect this change. We disclose the results of each of our operating segments in accordance with ASC 280, Segment Reporting. Each of our six operating segments is managed by a senior executive reporting directly to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the operating results of each of the operating segments for performance evaluation and resource allocation. The activities of each of our segments from which they earn revenues and incur expenses are described below:
Our chief operating decision maker uses EBITDA as the primary measure for reviewing our segments’ profitability and therefore, in accordance with ASC 280, Segment Reporting, we have presented EBITDA for all segments. We define EBITDA as earnings before interest, taxes and depreciation and amortization. “Other” includes intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains (losses) and components of pension and other postretirement benefit costs other than service cost. Sales between segments are made primarily at prices approximating prevailing market prices. Summarized financial information concerning reportable segments is shown in the following table for the periods presented:
Our O&P–Americas results for the first nine months of 2017 included a $31 million gain on the first quarter sale of a portion of our Lake Charles, Louisiana site. EBITDA for our O&P–EAI segment in the first nine months of 2017 included a $108 million gain on the third quarter 2017 sale of our 27% interest in Geosel and the beneficial impact of a $21 million non-cash gain stemming from the elimination of an obligation associated with a lease. Our APS segment results for the third quarter and first nine months of 2018 included $49 million of transaction and integration costs associated with our acquisition of A. Schulman in August 2018. Our I&D segment results for the first nine months of 2017 included charges approximating $40 million primarily related to the settlement of precious metal financings. A reconciliation of EBITDA to Income from continuing operations before income taxes is shown in the following table for each of the periods presented:
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Revenue (Policies) |
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Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from contract with customer [Policy Text Block] | Revenue Recognition—Substantially all our revenues are derived from contracts with customers. We account for contracts when both parties have approved the contract and are committed to perform, the rights of the parties and payment terms have been identified, the contract has commercial substance, and collectability is probable. Payments are typically required within a short period following the transfer of control of the product to the customer. We occasionally require customers to prepay purchases to ensure collectability. Such prepayments do not represent financing arrangements, since payment and fulfillment of the performance obligation occurs within a short time frame. We elected to apply the practical expedient not to adjust the promised amount of consideration for the effects of a significant financing component when, at contract inception, we expect that payment will occur in one year or less. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. This generally occurs at the point in time when performance obligations are fulfilled and control transfers to the customer. In most instances, control transfers upon transfer of risk of loss and title to the customer, which usually occurs when we ship products to the customer from our manufacturing facility. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Customer incentives are generally based on volumes purchased and recognized over the period earned. Sales, value added, and other taxes that we collect concurrent with revenue-producing activities are excluded from the transaction price as they represent amounts collected on behalf of third parties. Incidental costs incurred to obtain a contract are immaterial in the context of the contract and are recognized as expense. We have elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Shipping and handling costs are treated as a fulfillment cost and not a separate performance obligation. |
Accounting and Reporting Changes (Tables) |
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Schedule of accounting and reporting changes [Table Text Block] |
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Business Combination (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of recognized identified assets acquired and liabilities assumed [Table Text Block] | Preliminary Purchase Price Allocation—The following table summarizes the allocation of the purchase price based on the fair value of the assets acquired and liabilities, redeemable noncontrolling interests and noncontrolling interests assumed on the acquisition date.
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Property, plant and equipment assets acquired as part of business combination [Table Text Block] | Property, Plant and Equipment—The fair value of the components of property, plant and equipment acquired are represented in the table below:
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Schedule of finite lived intangible assets acquired as part of business combination [Table Text Block] | Intangible Assets—The fair value, weighted average useful life and useful life of each class of intangible asset acquired are presented in the following table:
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Revenues (Tables) |
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Disaggregation of revenue [Table Text Block] | The following table presents our revenues disaggregated by key products for the three and nine months ended September 30, 2018:
The following table presents our revenues disaggregated by geography, based upon the location of the customer, for the three and nine months ended September 30, 2018:
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Inventories (Tables) |
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Schedule of inventory, current [Table Text Block] | Inventories consisted of the following components:
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Debt (Tables) |
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Schedule of long-term debt [Table Text Block] | Long-term loans, notes and other long-term debt, net of unamortized discount and debt issuance cost, consisted of the following:
Fair value hedging adjustments associated with the fair value hedge accounting of our fixed-for-floating interest rate swaps for the applicable periods are as follows:
The cumulative fair value hedging adjustments remaining at September 30, 2018 and December 31, 2017 associated with our Senior Notes due 2019 included $13 million and $31 million, respectively, for hedges that have been discontinued. The $46 million loss in the nine months ended September 30, 2017 included a $44 million charge for the write-off of the cumulative fair value hedging adjustment related to our 5% Senior Notes due 2019 described below. These fair value adjustments are recognized in Interest expense in the Consolidated Statements of Income. |
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Schedule of short-term debt [Table Text Block] | Short-term loans, notes, and other short-term debt consisted of the following:
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Financial Instruments and Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of fair value of outstanding financial instruments [Table Text Block] | Financial Instruments Measured at Fair Value on a Recurring Basis—The following table summarizes financial instruments outstanding as of September 30, 2018 and December 31, 2017 that are measured at fair value on a recurring basis:
All derivatives and available-for-sale debt securities in the tables above are classified as Level 2. Our limited partnership investments included in our equity securities discussed below, are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. At September 30, 2018, our outstanding foreign currency and commodity contracts not designated as hedges mature from October 2018 to August 2019 and from October 2018 to December 2018, respectively. |
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Schedule of the carrying value and estimated fair value of non-derivative financial instruments [Table Text Block] | Financial Instruments Not Measured at Fair Value on a Recurring Basis—The following table presents the carrying value and estimated fair value of our financial instruments that are not measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017. Short-term loans receivable, which represent our repurchase agreements, and short-term and long-term debt are recorded at amortized cost in the Consolidated Balance Sheets. The carrying and fair values of short-term and long-term debt exclude capital leases and commercial paper.
All financial instruments in the table above are classified as Level 2. There were no transfers between Level 1 and Level 2 for any of our financial instruments during the nine months ended September 30, 2018 and the year ended December 31, 2017. |
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Summary of cash flow hedges [Table Text Block] | Cash Flow Hedges—The following table summarizes our cash flow hedges outstanding at September 30, 2018 and December 31, 2017:
There was less than $1 million of ineffectiveness recorded during the three months ended September 30, 2017 and $1 million of ineffectiveness recorded during the nine months ended September 30, 2017 related to these hedging relationships. In June 2018 and July 2018, we entered into forward-starting interest rate swaps with a total notional amount of $300 million and $200 million, respectively, to mitigate the risk of variability in interest rates for an expected debt issuance by November 2021. These swaps were designated as cash flow hedges and will be terminated upon debt issuance. |
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Summary of the impact of financial instruments on earnings and other comprehensive income [Table Text Block] | Impact on Earnings and Other Comprehensive Income—The following table summarizes the pre-tax effect of derivative instruments and non-derivative instruments on Other comprehensive income and earnings for the three and nine months ended September 30, 2018 and 2017:
The derivative amounts excluded from effectiveness testing for foreign currency contracts designated as net investment hedges recognized in other comprehensive income for the three and nine months ended September 30, 2018 were losses of $1 million and gains of $14 million, respectively. The derivative amounts excluded from effectiveness testing for foreign currency contracts designated as net investment hedges recognized in interest expense for the three and nine months ended September 30, 2018 were gains of $8 million and $21 million, respectively. |
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Schedule of available-for-sale debt securities reconciliation [Table Text Block] | Investments in Available-for-Sale Debt Securities—The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of our available-for-sale debt securities that are outstanding as of September 30, 2018 and December 31, 2017:
No losses related to other-than-temporary impairments of our available-for-sale debt securities have been recorded in Accumulated other comprehensive loss during the three and nine months ended September 30, 2018 and the year ended December 31, 2017. As of September 30, 2018, bonds classified as available-for-sale debt securities had maturities between two and twenty-five months. |
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Summary of proceeds from maturities and sales of available-for-sale debt securities [Table Text Block] | The proceeds from maturities and sales of our available-for-sale debt securities during the three and nine months ended September 30, 2018 and 2017 are summarized in the following table:
No gain or loss was realized in connection with the sales of our available-for-sale debt securities during the three and nine months ended September 30, 2018 and 2017. During the nine months ended September 30, 2017, we had maturities of our held-to-maturity securities of $75 million. |
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Summary of available-for-sale debt securities, continuous unrealized loss position, fair value [Table Text Block] | The following table summarizes the fair value and unrealized losses related to available-for-sale debt securities that were in a continuous unrealized loss position for less than and greater than twelve months as of September 30, 2018 and December 31, 2017:
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Summary of the portion of unrealized gains and losses for equity securities outstanding [Table Text Block] | The following table summarizes the portion of unrealized gains and losses for the equity securities that are outstanding as of September 30, 2018:
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Pension and Other Postretirement Benefits (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the components of net periodic benefit costs (credits) [TableText Block] | Net periodic pension benefits included the following cost components for the periods presented:
Net periodic other postretirement benefits included the following cost components for the periods presented:
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Commitments and Contingencies (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of environmental loss contingencies [Table Text Block] | The following table summarizes the activity in our accrued environmental liability included in “Accrued liabilities” and “Other liabilities:”
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Stockholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared [Table Text Block] | Dividend Distributions—The following table summarizes the dividends paid in the periods presented:
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Schedule of share repurchase programs [Table Text Block] | The following table summarizes our share repurchase activity for the periods presented:
Due to the timing of settlements, total cash paid for share repurchases for the nine months ended September 30, 2018 and 2017 was $801 million and $866 million, respectively. |
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Schedule of changes in ordinary and treasury shares outstanding during the period [Table Text Block] | Ordinary Shares—The changes in the outstanding amounts of ordinary shares are as follows:
Treasury Shares—The changes in the amounts of treasury shares held by the Company are as follows:
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Schedule of accumulated other comprehensive income (loss) [Table Text Block] | Accumulated Other Comprehensive Income (Loss)—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the nine months ended September 30, 2018 and 2017 are presented in the following table:
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Reclassification out of accumulated other comprehensive income (loss) [Table Text Block] | The amounts reclassified out of each component of Accumulated other comprehensive loss are as follows:
Amortization of prior service cost and actuarial loss is included in the computation of net periodic pension and other postretirement benefit costs (see Note 9). |
Per Share Data (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Earnings per share data and dividends declared per share of common stock are as follows:
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Segment and Related Information (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Summarized financial information concerning reportable segments is shown in the following table for the periods presented:
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Reconciliation of EBITDA to income (loss) from continuing operations before income taxes [Table Text Block] | A reconciliation of EBITDA to Income from continuing operations before income taxes is shown in the following table for each of the periods presented:
|
Business Combination, Summary of assets acquired and liabilities, redeemable noncontrolling interests and noncontrolling interests assumed (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Aug. 21, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Preliminary purchase price allocation [Abstract] | |||
Goodwill | $ 1,819 | $ 570 | |
A. Schulman Inc. [Member] | |||
Preliminary purchase price allocation [Abstract] | |||
Cash and cash equivalents | $ 71 | ||
Restricted cash | 10 | ||
Accounts receivable | 407 | ||
Prepaid expenses and other current assets | 77 | ||
Inventories | 300 | ||
Property, plant and equipment | 431 | ||
Equity investments | 16 | ||
Goodwill | 1,259 | ||
Intangible assets | 488 | ||
Other assets | 170 | ||
Total assets | 3,229 | ||
Current maturities of long-term debt | 397 | ||
Accounts payable | 327 | ||
Accrued liabilities | 103 | ||
Other liabilities | 164 | ||
Deferred income taxes | 149 | ||
Total liabilities | 1,140 | ||
Redeemable noncontrolling interests | 125 | ||
Noncontrolling interests | 24 | ||
Total liabilities, redeemable noncontrolling interests and noncontrolling interests | 1,289 | ||
Total net assets acquired | $ 1,940 |
Business Combination, Summary of acquired inventories by component and gross contractual cost of accounts receivable acquired (Details) - A. Schulman Inc. [Member] $ in Millions |
Aug. 21, 2018
USD ($)
|
---|---|
Inventory Disclosure [Abstract] | |
Finished goods | $ 180 |
Work-in-process | 8 |
Raw materials and supplies | 112 |
Total inventory acquired | 300 |
Business Combination, Acquired Receivables [Abstract] | |
Acquired receivables, gross contractual amount | $ 415 |
Business Combination, Summary of aquired property, plant and equipment by component (Details) - A. Schulman Inc. [Member] $ in Millions |
Aug. 21, 2018
USD ($)
|
---|---|
Business combination, Property, plant and equipment acquired by component [Abstract] | |
Land | $ 54 |
Major manufacturing equipment | 197 |
Buildings | 141 |
Light equipment and instrumentation | 12 |
Office furniture | 9 |
Information system equipment | 2 |
Construction in progress | 16 |
Total | $ 431 |
Business Combination, Summary of goodwill (Details) - USD ($) $ in Millions |
Aug. 21, 2018 |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Business Combination Segment Allocation [Line Items] | |||
Goodwill | $ 1,819 | $ 570 | |
O&P - EAI [Member] | |||
Business Combination Segment Allocation [Line Items] | |||
Goodwill transfers | $ (40) | ||
Advanced Polymer Solutions [Member] | |||
Business Combination Segment Allocation [Line Items] | |||
Goodwill | 1,259 | ||
Goodwill transfers | $ 40 |
Business Combination, Repayment of acquired debt (Details) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Aug. 31, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Aug. 21, 2018 |
|
Debt Instrument [Line Items] | |||||
Repayments of long-term debt | $ 394 | $ 1,000 | |||
Senior Notes due 2023, $375 million, 6.875% [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 375 | ||||
Interest rate (in hundredths) | 6.875% | ||||
Maturity date | June 2023 | ||||
Redemption price, in hundredths | 105.156% | ||||
Premium paid on redemption of 6.875% Senior Notes due 2023 | $ 19 | ||||
Repayments of long-term debt | $ 375 |
Business Combination, Redeemable noncontrolling interests (Details) - USD ($) |
1 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Aug. 21, 2018 |
|
Temporary equity [Line Items] | ||
Cumulative perpetual special stock, shares outstanding | 121,527 | 124,347 |
Cumulative dividends per share on liquidation preference of cumulative perpetual special stock, in hundredths | 6.00% | |
Liquidation preference per share of cumulative perpetual special stock | $ 1,000 | |
Cumulative perpetual special stock redeemed during the period, in shares | 2,820 | |
Cumulative perpetual special stock redeemed during the period, in value | $ 3,000,000 |
Business Combination, Acquisition costs (Details) $ in Millions |
Sep. 30, 2018
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Acquisition costs | $ 30 |
Business Combination, Proforma information (Details) $ in Millions |
1 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Business acquisition, Pro forma information [Abstract] | |
Actual revenue of acquiree since acquisition date | $ 269 |
Acutal earnings or loss of acquiree since acquisition date | $ (2) |
Revenues (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Contract with customer, liability [Abstract] | |
Contract with customer, liability | $ 89 |
Revenue recognized included in beginning contract liability | Revenue recognized in the reporting period included in the contract liability balance at the beginning of the period was immaterial. |
ASU 2014-09 adoption effect [Member] | |
Revenue, initial application period cumulative effect transition [Line Items] | |
Cumulative effect on retained earnings, after tax | $ 18 |
Revenues, Geographic location (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | $ 10,155 | $ 8,516 | $ 30,128 | $ 25,349 |
United States [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | 5,011 | 14,528 | ||
Germany [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | 741 | 2,326 | ||
Italy [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | 376 | 1,203 | ||
France [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | 371 | 1,118 | ||
Mexico [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | 627 | 1,705 | ||
The Netherlands [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | 259 | 835 | ||
Other [Member] | ||||
Disaggregation of revenue [Abstract] | ||||
Sales and other operating revenues | $ 2,770 | $ 8,413 |
Accounts Receivable (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Receivables [Abstract] | ||
Allowance for doubtful accounts receivable | $ 16 | $ 17 |
Inventories (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory, finished goods, work-in-process, and raw materials and supplies [Abstract] | ||
Finished goods | $ 3,056 | $ 2,932 |
Work-in-process | 184 | 142 |
Raw materials and supplies | 1,356 | 1,143 |
Total inventories | $ 4,596 | $ 4,217 |
Debt, Short-term debt (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Short-term debt [Line Items] | ||
Short-term debt | $ 214 | $ 68 |
$2,500 million Senior Revolving Credit Facility [Member] | ||
Short-term debt [Line Items] | ||
Maximum borrowing capacity on line of credit | 2,500 | |
Short-term debt | 0 | 0 |
$900 million U.S. Receivables Facility [Member] | ||
Short-term debt [Line Items] | ||
Maximum borrowing capacity on line of credit | 900 | |
Short-term debt | 0 | 0 |
Commercial paper [Member] | ||
Short-term debt [Line Items] | ||
Maximum borrowing capacity on line of credit | 2,500 | |
Short-term debt | 140 | 0 |
Precious metal financings [Member] | ||
Short-term debt [Line Items] | ||
Short-term debt | 70 | 64 |
Other short-term debt [Member] | ||
Short-term debt [Line Items] | ||
Short-term debt | $ 4 | $ 4 |
Debt, Description of long-term debt (Details) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Long-term debt [Line Items] | |||
Repayments of long-term debt | $ 394 | $ 1,000 | |
Guaranteed Notes due 2027, $1,000 million, 3.50% [Member] | |||
Long-term debt [Line Items] | |||
Issuance date | March 2017 | ||
Percentage ownership by parent of finance subsidiary (in hundredths) | 100.00% | ||
Face amount | $ 1,000 | $ 1,000 | |
Interest rate (in hundredths) | 3.50% | 3.50% | |
Maturity year | 2027 | 2027 | |
Discounted price at which long-term debt was issued | 98.968% | ||
Senior Notes due 2019, $1,000 million, 5.0% [Member] | |||
Long-term debt [Line Items] | |||
Face amount | $ 1,000 | ||
Interest rate (in hundredths) | 5.00% | 5.00% | |
Maturity year | 2019 | 2019 | |
Premium paid on redemption of Senior Notes due 2019 | $ 65 | ||
Write-off of debt issuance costs | 4 | ||
Charges associated with the redemption of Senior Notes due 2019 | $ (44) | $ (44) |
Debt, Description of short-term debt (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Description of short-term debt [Line Items] | ||
Weighted average interest rate, short-term debt (in hundredths) | 3.00% | 1.80% |
$2,500 million Senior Revolving Credit Facility [Member] | ||
Description of short-term debt [Line Items] | ||
Maximum borrowing capacity | $ 2,500 | |
Expiration date | June 2022 | |
Maximum allowed letters of credit | $ 500 | |
Additional borrowing capacity, uncommitted loans | $ 1,000 | |
Terms of debt covenants | The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00 or less for the period covering the most recent four quarters. | |
Commercial paper program [Member] | ||
Description of short-term debt [Line Items] | ||
Maximum borrowing capacity | $ 2,500 | |
Description of commercial paper interest rate | Interest rates on the commercial paper outstanding at September 30, 2018 are based on the terms of the notes and range from 230 to 240 basis points. | |
$900 million U.S. Receivables Facility [Member] | ||
Description of short-term debt [Line Items] | ||
Maximum borrowing capacity | $ 900 | |
Expiration date | July 2021 | |
Maximum allowed letters of credit | $ 200 | |
Additional borrowing capacity, uncommitted loans | $ 300 | |
Terms of debt covenants | The term of the facility may be extended in accordance with the terms of the agreement. The facility is also subject to customary warranties and covenants, including limits and reserves and the maintenance of specified financial ratios. We are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00 or less for the period covering the most recent four quarters. Performance obligations under the facility are guaranteed by the parent company. | |
Outstanding borrowings | $ 0 | |
Outstanding letters of credit | $ 0 |
Debt, Debt discount and issuance costs (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Debt discount and issuance costs [Abstract] | ||
Amortization of debt discounts and debt issuance costs | $ 11 | $ 16 |
Debt, Formation of LYB International Finance III, LLC (Details) |
1 Months Ended |
---|---|
Dec. 28, 2016 | |
Formation of direct, 100% owned finance subsidiary [Abstract] | |
LYB International Finance III, LLC formation date | Dec. 28, 2016 |
LYB International Finance III, LLC state of formation | Delaware |
LYB International Finance III, LLC business activities and description | LYB International Finance III, LLC is a direct, 100% owned finance subsidiary of LyondellBasell N.V., as defined in Rule 3-10(b) of Regulation S-X. Any debt securities issued by LYB International Finance III, LLC will be fully and unconditionally guaranteed by LyondellBasell N.V. |
Financial Instruments and Fair Value Measurements, Market risks, commodity prices and foreign currency rates (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Foreign currency [Abstract] | |||||
Foreign currency gains (losses) | $ 6 | $ 14 | $ (6) | ||
Marketable Securities [Abstract] | |||||
Amount of marketable securities classified as cash and cash equivalents | $ 189 | $ 189 | $ 1,035 | ||
Minimum [Member] | |||||
Foreign currency [Abstract] | |||||
Foreign currency gains (losses) | $ 0 | ||||
Maximum [Member] | |||||
Foreign currency [Abstract] | |||||
Foreign currency gains (losses) | $ (1) |
Financial Instruments and Fair Value Measurements, Outstanding foreign currency and commodity contracts (Details) - Not Designated as Hedging Instrument [Member] |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Foreign currency rates [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative, maturity date | October 2018 |
Foreign currency rates [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative, maturity date | August 2019 |
Commodities [Member] | Minimum [Member] | |
Derivative [Line Items] | |
Derivative, maturity date | October 2018 |
Commodities [Member] | Maximum [Member] | |
Derivative [Line Items] | |
Derivative, maturity date | December 2018 |
Financial Instruments and Fair Value Measurements, Carrying value and estimated fair value of non-derivative financial instruments (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Liabilities [Abstract] | ||
Short-term debt, carrying value | $ 214 | $ 68 |
Non-derivatives, fair value level description | Level 2 | |
Amount of transfers between Level 1 and Level 2 of the fair value hierarchy | $ 0 | 0 |
Nonrecurring [Member] | Non-derivatives: [Member] | ||
Assets: [Abstract] | ||
Short-term loans receivable, carrying value | 550 | 570 |
Short-term loans receivable, fair value | 550 | 570 |
Liabilities [Abstract] | ||
Short-term debt, carrying value | 70 | 64 |
Long-term debt, carrying value | 8,444 | 8,526 |
Total liabilities, carrying value | 8,514 | 8,590 |
Short-term debt, fair value | 67 | 75 |
Long-term debt, fair value | 8,772 | 9,442 |
Total liabilities, fair value | $ 8,839 | $ 9,517 |
Financial Instruments and Fair Value Measurements, Equity securities (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Unrealized gains and losses for equity securities [Abstract] | |
Net gain (loss) recognized during the period | $ 1 |
Gain (loss) on sale of equity securities net | 2 |
Unrealized gain (loss) on equity securities | (1) |
Equity securities [Member] | |
Derivative [Line Items] | |
Notional amount | 350 |
Fair value | $ 358 |
Income Taxes (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Effective income tax rate reconciliation, percent [Abstract] | ||||
Effective income tax rate (in hundredths) | 17.20% | 26.40% | 11.40% | 27.80% |
Income Taxes, Unrecognized tax benefits (Details) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Unrecognized tax benefits [Abstract] | ||
Non-cash benefit of reductions for tax positions of prior years including released interest | $ 346 | |
Reductions for tax positions of prior years | 288 | |
Released interest expenses recognized in uncertain tax positions | 58 | |
Unrecognized tax benefits relating to uncertain tax positions | 262 | $ 544 |
Reasonably possible decrease in unrecognized tax benefits within the next twelve months | 180 | |
Interest and penalties recognized on uncertain tax positions | 46 | 16 |
Interest and penalties accrued on uncertain tax positions | $ 17 | $ 63 |
Income Taxes, Components of income tax provision (Details) - United States [Member] $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Corporate income tax rate [Line Items] | |
Corporate income tax rate (in hundredths) | 35.00% |
Tax Cuts and Jobs Act of 2017, new statutory tax rate effective 1/1/2018 (in hundredths) | 21.00% |
Remeasurement of U.S. net deferred tax liability | $ 819 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Environmental remediation [Abstract] | ||||
Total accrued liability for future environmental remediation costs | $ 92 | $ 102 | $ 99 | $ 95 |
Minimum [Member] | ||||
Site contingency [Line Items] | ||||
Accrued liability for individual site range | less than $1 million | |||
Maximum [Member] | ||||
Site contingency [Line Items] | ||||
Accrued liability for individual site range | $17 million |
Commitments and Contingencies, Accrued environmental liability (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Accrual for environmental loss contingencies [Roll Forward] | ||
Beginning balance | $ 102 | $ 95 |
Changes in estimates | 1 | 3 |
Amounts paid | (9) | (7) |
Foreign exchange effects | (2) | 8 |
Ending balance | $ 92 | $ 99 |
Stockholders' Equity, Dividend distributions (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Summary of dividend payments [Abstract] | |||||||
Dividend per ordinary share (per share) | $ 1.00 | $ 1.00 | $ 3.00 | ||||
Aggregate dividends paid | $ 389 | $ 392 | $ 395 | $ 1,176 | |||
Date of record | Sep. 05, 2018 | Jun. 11, 2018 | Mar. 05, 2018 | ||||
Dividends per share (in dollars per share) | $ 1.00 | $ 0.90 | $ 3.00 | $ 2.65 |
Stockholders' Equity, Ordinary shares (Details) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Ordinary share outstanding [Abstract] | ||
Beginning balance (in shares) | 394,512,054 | |
Purchase of ordinary shares (in shares) | (7,678,815) | (10,018,001) |
Ending balance (in shares) | 387,177,776 | |
Ordinary shares [Member] | ||
Ordinary share outstanding [Abstract] | ||
Beginning balance (in shares) | 394,512,054 | 404,046,331 |
Share-based compensation (in shares) | 285,186 | 343,663 |
Warrants exercised (in shares) | 0 | 4,184 |
Employee stock purchase plan (in shares) | 82,758 | 81,964 |
Purchase of ordinary shares (in shares) | (7,702,222) | (10,018,001) |
Ending balance (in shares) | 387,177,776 | 394,458,141 |
Stockholders' Equity, Treasury shares (Details) - shares |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Ordinary shares held as treasury shares: [Abstract] | |||
Beginning balance (in shares) | 183,928,109 | ||
Purchase of ordinary shares (in shares) | 7,678,815 | 10,018,001 | |
Ending balance (in shares) | 13,032,504 | 13,032,504 | |
Treasury shares [Member] | |||
Ordinary shares held as treasury shares: [Abstract] | |||
Beginning balance (in shares) | 183,928,109 | 174,389,139 | |
Share-based compensation (in shares) | (285,186) | (343,663) | |
Warrants exercised (in shares) | 0 | 509 | |
Employee stock purchase plan (in shares) | (82,758) | (81,964) | |
Purchase of ordinary shares (in shares) | 23,407 | 7,702,222 | 10,018,001 |
Treasury shares canceled | 178,229,883 | (178,229,883) | 0 |
Ending balance (in shares) | 13,032,504 | 13,032,504 | 183,982,022 |
Segment and Related Information, Reconciliation of EBITDA to income (loss) from continuing operations before income taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
EBITDA: [Abstract] | ||||
Total segment EBITDA | $ 1,722 | $ 1,821 | $ 5,631 | $ 5,412 |
Other EBITDA | 10 | 0 | 24 | (4) |
Less: [Abstract] | ||||
Depreciation and amortization expense | (309) | (294) | (908) | (876) |
Interest expense | (90) | (94) | (272) | (396) |
Add: [Abstract] | ||||
Interest income | 14 | 5 | 40 | 15 |
Income from continuing operations before income taxes | $ 1,347 | $ 1,438 | $ 4,515 | $ 4,151 |
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