lyb-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


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

For the quarterly period ended June 30, 2021


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

For the transition period from to

Commission file number: 001-34726

LYONDELLBASELL INDUSTRIES N.V.

(Exact name of registrant as specified in its charter)

Netherlands

98-0646235

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1221 McKinney St.,

4th Floor, One Vine Street

Suite 300

London

Delftseplein 27E

Houston,

Texas

W1J0AH

3013AA

Rotterdam

USA

77010

United Kingdom

Netherlands

(Addresses of registrant’s principal executive offices)


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

(Registrant’s telephone numbers, including area codes)

______________________________________________________________________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange On Which Registered

Ordinary Shares, €0.04 Par Value

LYB

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The registrant had 334,515,368 ordinary shares, €0.04 par value, outstanding at July 28, 2021 (excluding 5,578,288 treasury shares).

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

TABLE OF CONTENTS


			Page
Part I – Financial Information			1

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			28

Item 3. Quantitative and Qualitative Disclosures About Market Risk			42

Item 4. Controls and Procedures			42

Part II – Other Information			43

Item 1. Legal Proceedings			43

Item 1A. Risk Factors			43

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			43

Item 4. Mine Safety Disclosures			43

Item 6. Exhibits			44

Signature			45

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended June 30,				Six Months Ended June 30,
Millions of dollars, except earnings per share	2021		2020		2021		2020
Sales and other operating revenues:
Trade	$	11,334	$	5,371	$	20,185	$	12,674
Related parties	227		175		458		366
	11,561		5,546		20,643		13,040
Operating costs and expenses:
Cost of sales	8,676		4,894		16,354		11,762

Selling, general and administrative expenses	327		288		614		583
Research and development expenses	32		25		61		52
	9,035		5,207		17,029		12,397
Operating income	2,526		339		3,614		643
Interest expense	(130)		(125)		(240)		(214)
Interest income	5		4		7		7
Other income, net	14		4		39		4
Income from continuing operations before equity investments and income taxes	2,415		222		3,420		440
Income from equity investments	148		61		285		61
Income from continuing operations before income taxes	2,563		283		3,705		501
Provision for (benefit from) income taxes	506		(32)		576		43
Income from continuing operations	2,057		315		3,129		458
Income (loss) from discontinued operations, net of tax	2		(1)		—		—
Net income	2,059		314		3,129		458


Dividends on redeemable non-controlling interests	(1)		(1)		(3)		(3)
Net income attributable to the Company shareholders	$	2,058	$	313	$	3,126	$	455

Earnings per share:
Net income attributable to the Company shareholders —
Basic:
Continuing operations	$	6.13	$	0.94	$	9.33	$	1.36
Discontinued operations	0.01		—		—		—
	$	6.14	$	0.94	$	9.33	$	1.36
Diluted:
Continuing operations	$	6.12	$	0.94	$	9.32	$	1.36
Discontinued operations	0.01		—		—		—
	$	6.13	$	0.94	$	9.32	$	1.36

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended June 30,				Six Months Ended June 30,
Millions of dollars	2021		2020		2021		2020
Net income	$	2,059	$	314	$	3,129	$	458
Other comprehensive income (loss), net of tax –
Financial derivatives	(78)		(26)		97		(364)
Unrealized (losses) gains on available-for-sale debt securities	(1)		3		(1)		1
Defined benefit pension and other postretirement benefit plans	17		11		28		21
Foreign currency translations	77		66		(30)		(133)
Total other comprehensive income (loss), net of tax	15		54		94		(475)
Comprehensive income (loss)	2,074		368		3,223		(17)
Dividends on redeemable non-controlling interests	(1)		(1)		(3)		(3)

Comprehensive income (loss) attributable to the Company shareholders	$	2,073	$	367	$	3,220	$	(20)

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS


Millions of dollars	June 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	1,381	$	1,763
Restricted cash	2		2
Short-term investments	136		702
Accounts receivable:
Trade, net	4,707		3,291
Related parties	190		150
Inventories	4,840		4,344
Prepaid expenses and other current assets	1,641		1,382
Total current assets	12,897		11,634
Operating lease assets	1,634		1,492
Property, plant and equipment	22,176		21,484
Less: Accumulated depreciation	(7,531)		(7,098)
Property, plant and equipment, net	14,645		14,386
Equity investments	4,902		4,729
Goodwill	1,931		1,953
Intangible assets, net	677		751
Other assets	573		458
Total assets	$	37,259	$	35,403

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS


Millions of dollars, except shares and par value data	June 30, 2021		December 31, 2020
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	8	$	8
Short-term debt	683		663
Accounts payable:
Trade	2,909		2,398
Related parties	577		550
Accrued liabilities	2,418		1,883
Total current liabilities	6,595		5,502
Long-term debt	13,482		15,286
Operating lease liabilities	1,364		1,222
Other liabilities	2,657		2,957
Deferred income taxes	2,507		2,332
Commitments and contingencies
Redeemable non-controlling interests	116		116
Shareholders’ equity:
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 334,503,518 and 334,015,220 shares outstanding, respectively	19		19
Additional paid-in capital	6,011		5,986
Retained earnings	6,837		4,440
Accumulated other comprehensive loss	(1,849)		(1,943)
Treasury stock, at cost, 5,590,138 and 6,030,408 ordinary shares, respectively	(494)		(531)
Total Company share of shareholders’ equity	10,524		7,971
Non-controlling interests	14		17
Total equity	10,538		7,988
Total liabilities, redeemable non-controlling interests and equity	$	37,259	$	35,403

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,
Millions of dollars	2021		2020
Cash flows from operating activities:
Net income	$	3,129	$	458
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	665		698

Amortization of debt-related costs	13		7

Share-based compensation	35		29
Inventory valuation charges	—		323
Equity investments—
Equity income	(285)		(61)
Distributions of earnings, net of tax	142		81

Deferred income tax (benefit) provision	34		(90)

Changes in assets and liabilities that provided (used) cash:
Accounts receivable	(1,502)		487
Inventories	(541)		463
Accounts payable	482		(485)
Other, net	301		(76)
Net cash provided by operating activities	2,473		1,834
Cash flows from investing activities:
Expenditures for property, plant and equipment	(771)		(1,248)



Purchases of available-for-sale debt securities	—		(270)
Proceeds from maturities of available-for-sale debt securities	291		—

Purchases of equity securities	—		(184)
Proceeds from equity securities	264		1
Acquisition of equity method investment	(104)		—



Other, net	(42)		(26)
Net cash used in investing activities	(362)		(1,727)
Cash flows from financing activities:
Repurchases of Company ordinary shares	—		(4)
Dividends paid - common stock	(730)		(701)
Purchase of non-controlling interest	—		(30)
Issuance of long-term debt	—		2,492
Payments of debt issuance costs	—		(18)
Repayments of long-term debt	(1,775)		(500)
Debt extinguishment costs	(23)		—
Issuance of short-term debt	—		521
Repayments of short-term debt	—		(500)
Net proceeds from commercial paper	—		212
Collateral received from (paid for) interest rate derivatives	51		(238)

Proceeds from settlement of cash flow hedges	—		346


Other, net	7		(12)
Net cash (used in) provided by financing activities	(2,470)		1,568
Effect of exchange rate changes on cash	(23)		15
(Decrease) increase in cash and cash equivalents and restricted cash	(382)		1,690
Cash and cash equivalents and restricted cash at beginning of period	1,765		888
Cash and cash equivalents and restricted cash at end of period	$	1,383	$	2,578

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


	Ordinary Shares				Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
Millions of dollars	Issued		Treasury
Balance, March 31, 2021	$	19	$	(506)	$	5,993	$	5,158	$	(1,864)	$	8,800	$	14
Net income	—		—		—		2,059		—		2,059		—
Other comprehensive income	—		—		—		—		15		15		—
Share-based compensation	—		12		18		(1)		—		29		—
Dividends - common stock ($1.13 per share)	—		—		—		(378)		—		(378)		—
Dividends - redeemable non-controlling interests ($15.00 per share)	—		—		—		(1)		—		(1)		—





Balance, June 30, 2021	$	19	$	(494)	$	6,011	$	6,837	$	(1,849)	$	10,524	$	14


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



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

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY


	Ordinary Shares				Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
Millions of dollars	Issued		Treasury
Balance, December 31, 2020	$	19	$	(531)	$	5,986	$	4,440	$	(1,943)	$	7,971	$	17
Net income	—		—		—		3,129		—		3,129		—
Other comprehensive income	—		—		—		—		94		94		—
Share-based compensation	—		37		25		1		—		63		—
Dividends - common stock ($2.18 per share)	—		—		—		(730)		—		(730)		—
Dividends - redeemable non-controlling interests ($30.00 per share)	—		—		—		(3)		—		(3)		—
Sales of non-controlling interest	—		—		—		—		—		—		(3)


Balance, June 30, 2021	$	19	$	(494)	$	6,011	$	6,837	$	(1,849)	$	10,524	$	14


	Ordinary Shares				Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
Millions of dollars	Issued		Treasury
Balance, December 31, 2019	$	19	$	(580)	$	5,954	$	4,435	$	(1,784)	$	8,044	$	19
Net income	—		—		—		458		—		458		—
Other comprehensive loss	—		—		—		—		(475)		(475)		—
Share-based compensation	—		36		(3)		(1)		—		32		—
Dividends - common stock ($2.10 per share)	—		—		—		(701)		—		(701)		—
Dividends - redeemable non-controlling interests ($30.00 per share)	—		—		—		(3)		—		(3)		—
Repurchases of Company ordinary shares	—		(4)		—		—		—		(4)		—
Purchase of non-controlling interest	—		—		7		—		—		7		—


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

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS


		Page
1.	Basis of Presentation	9

2.	Accounting and Reporting Changes	9

3.	Revenues	10

4.	Accounts Receivable	11

5.	Inventories	11

6.	Debt	12

7.	Financial Instruments and Fair Value Measurements	14

8.	Income Taxes	19

9.	Commitments and Contingencies	20

10.	Shareholders’ Equity and Redeemable Non-controlling Interests	21

11.	Per Share Data	24

12.	Segment and Related Information	25

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

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

LyondellBasell N.V. is a worldwide manufacturer of chemicals and polymers, a refiner of crude oil, a significant producer of gasoline blending components and a developer and licensor of technologies for the production of polymers.

The accompanying unaudited Consolidated Financial Statements have been prepared from the books and records of LyondellBasell N.V. in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. In our opinion, all adjustments, including normal recurring adjustments, considered necessary for a fair statement have been included. The results for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

2. Accounting and Reporting Changes

Recently Adopted Guidance

The following table provides a brief description of recently adopted Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”):

Standard

Description

ASU 2020-01, Clarifying the Interactions between Topic 321, Topic 323, Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging

This guidance clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 and includes scope considerations for entities that hold certain non-derivative forward contracts and purchased options to acquire equity securities that, upon settlement of the forward contract or exercise of the purchase option, would be accounted for under the equity method of accounting. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

The prospective adoption of this guidance from January 1, 2021 did not have a material impact on our Consolidated Financial Statements.

ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity

This guidance simplifies the accounting for convertible instruments and the application of the derivatives scope exception for contracts in an entity’s own equity. The standard also amends the accounting for convertible instruments in the diluted earnings per share calculation and requires enhanced disclosures of convertible instruments and contracts in an entity’s own equity. The guidance is effective for fiscal years beginning after December 15, 2021 and may be applied on a modified or fully retrospective basis.

The early adoption of this guidance on a modified retrospective basis from January 1, 2021 did not have a material impact on our Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Standard

Description

ASU 2020-09, Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762

This guidance amends and supersedes SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10762 related to financial disclosure requirements for subsidiary issuers and guarantors of registered debt securities and affiliates whose securities are pledged as collateral for registered securities. The guidance is effective for annual and interim periods ending after January 4, 2021.

The adoption of this guidance from January 1, 2021 did not have a material impact on our Consolidated Financial Statements.

Accounting Guidance Issued But Not Adopted as of June 30, 2021

There are no ASUs issued and not yet adopted that could have a material impact on our Consolidated Financial Statements.

3. Revenues

Contract Balances—Contract liabilities were $181 million and $194 million at June 30, 2021 and December 31, 2020, respectively. Revenue recognized in each reporting period, included in the contract liability balance at the beginning of the period, was immaterial.

Disaggregation of Revenues—The following table presents our revenues disaggregated by key products:


	Three Months Ended June 30,				Six Months Ended June 30,
Millions of dollars	2021		2020		2021		2020
Sales and other operating revenues:
Olefins and co-products	$	1,185	$	460	$	2,276	$	1,127
Polyethylene	2,611		1,277		4,764		2,736
Polypropylene