LyondellBasell Reports First-Quarter 2015 Results

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Apr 24, 2015, 07:00 ET

HOUSTON and LONDON, April 24, 2015 /PRNewswire/ --

First Quarter 2015 Highlights

Income from continuing operations: $1.17 billion ($1.23 billion excluding LCM¹)
Diluted earnings per share: $2.42 per share ($2.54 per share excluding LCM, our highest diluted quarterly EPS ever)
EBITDA: $1.95 billion ($2.04 billion excluding LCM)
Share repurchases and dividends totaled $1.69 billion; repurchased 15.7 million shares during the first quarter, more than 3% of the outstanding shares

LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the first quarter 2015 of $1.17 billion, or $2.42 diluted earnings per share. First quarter 2015 EBITDA was approximately $1.95 billion.

Comparisons with the prior quarter and first quarter 2014 are available in the following table:

Table 1 - Earnings Summary
		Three Months Ended
		March 31,	December 31,	March 31,
*Millions of U.S. dollars (except share data)*		2015	2014	2014
Sales and other operating revenues		$8,185	$10,290	$11,135
Net income^(a)		1,164	791	944
Income from continuing operations^(b)		1,167	796	943
Diluted earnings per share (U.S. dollars):
	Net income^(c)	2.41	1.54	1.72
	Income from continuing operations^(b)	2.42	1.57	1.72
Diluted share count (millions)		481	499	548
EBITDA^(d)		1,952	1,406	1,668

*Excluding LCM Impact:*
LCM, pre-tax		92	715	- -
Income from continuing operations^(b)		1,225	1,251	943
Diluted earnings per share (U.S. dollars):
	Income from continuing operations^(b)	2.54	2.48	1.72
EBITDA^(d)		2,044	2,121	1,668

(a) Includes net loss attributable to non-controlling interests and income (loss) from discontinued operations, net of tax. See Table 10.
(b) See Table 11 for charges and benefits to income from continuing operations.
(c) Includes diluted earnings (loss) per share attributable to discontinued operations.
(d) See the end of this release for an explanation of the Company's use of EBITDA and Table 8 for reconciliations of EBITDA to net income and income from continuing operations.


¹ LCM stands for "lower of cost or market." An explanation of LCM and why we have excluded it from our financial information in this press release can be found at the end of this press release under "Information Related to Financial Measures."

The first quarter included a $92 million non-cash, pre-tax charge for the impact of a lower of cost or market (LCM) inventory adjustment ($58 million after tax). This charge is somewhat unique to our 2010 company formation when all assets and liabilities were measured at fair value, our use of LIFO accounting, and the recent declines in pricing for many of our raw material and finished goods inventories. Excluding the LCM adjustment, earnings from continuing operations during the first quarter totaled $1.2 billion, or $2.54 per share, and EBITDA was $2.0 billion.

"The first quarter of 2015 continued at a pace that made 2014 a record year. Excluding the LCM inventory impacts, first quarter diluted earnings per share of $2.54 was a new quarterly high for LyondellBasell, and EBITDA exceeded $2.0 billion for the third consecutive quarter. We have generated EBITDA of $8.2 billion over the past twelve months excluding the impacts of the LCM. Quarterly EBITDA has been very steady during this period. During the first quarter, we achieved these strong results in a market in which crude oil price declines pressured product prices. However, the abundance of low cost natural gas-based raw materials, supply and demand tightness in several products, and our flexible portfolio provided balance to offset the impact of lower prices. Our business portfolio proves to be resilient in a volatile market environment, delivering strong results," said Bob Patel, LyondellBasell Chief Executive Officer.

OUTLOOK
"During the first few weeks of April, business conditions within our olefins and polyolefins segments have been relatively consistent with the first quarter. Planned and unplanned industry downtime has continued to support polyolefins pricing. Additionally, in the U.S., NGL feedstock inventories stand at or near record levels, production has remained strong, and NGL prices are low. During the quarter, we expect our Intermediate and Derivatives segment to benefit from normal seasonal trends. Thus far, Refining industry spreads have declined versus the first quarter but remain healthy," Patel said.

LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell manages operations through five operating segments: 1) Olefins and Polyolefins – Americas; 2) Olefins and Polyolefins – Europe, Asia, International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.

Comments and analysis represent underlying business activity and are exclusive of LCM inventory adjustments.

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


Table 2 - O&P–Americas Financial Overview
	Three Months Ended
	March 31,	December 31,	March 31,
*Millions of U.S. dollars*	2015	2014	2014
Operating income	$934	$950	$656
EBITDA	1,031	1,040	736
LCM, pre-tax	43	234	- -
EBITDA excluding LCM	1,074	1,274	736

Three months ended March 31, 2015 versus three months ended December 31, 2014 –EBITDA declined versus the fourth quarter of 2014 by $200 million, excluding a $191 million quarter to quarter variance as a result of the LCM inventory adjustments. Olefins results declined by $280 million as the price of ethylene declined by approximately 14 cents per pound, which was partially offset by a slightly lower cost of ethylene production. Polyolefin results improved by approximately $75 million principally due to stronger spreads. Polyethylene and polypropylene spreads improved by approximately 4 and 3 cents per pound, respectively. Joint venture equity income increased by $2 million.

Three months ended March 31, 2015 versus three months ended March 31, 2014 – EBITDA increased by $338 million versus the first quarter 2014, excluding a $43 million quarter to quarter variance as a result of the LCM inventory adjustments. Olefins improved by $245 million primarily due to higher operating rates and sales volumes as the first quarter of 2014 was impacted by scheduled and unscheduled operating disruptions. The price of ethylene declined by approximately 13 cents per pound. This negative impact was partially offset by the lower cost of production in the first quarter of 2015. Polyolefin results improved by approximately $85 million as a result of increased volumes and improved spreads. Polyethylene and polypropylene spreads improved by approximately 3 and 5 cents per pound, respectively. Joint venture equity income increased by $3 million.

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

Table 3 - O&P–EAI Financial Overview
	Three Months Ended
	March 31,	December 31,	March 31,
*Millions of U.S. dollars*	2015	2014	2014
Operating income	$236	$246	$225
EBITDA	357	348	356
LCM, pre-tax	- -	44	- -
EBITDA excluding LCM	357	392	356

Three months ended March 31, 2015 versus three months ended December 31, 2014 – EBITDA declined by $35 million versus the fourth quarter 2014, excluding a $44 million quarter to quarter variance as a result of the fourth quarter LCM inventory adjustment. Olefin results declined by $105 million primarily due to a lower ethylene price which declined by approximately 14 cents per pound. Raw materials with an economic advantage to naphtha represented 49 percent of ethylene production during the first quarter of 2015. Increased volumes were primarily responsible for an approximately $45 million increase in polyolefins respectively. Combined polypropylene compounds and polybutene-1 followed typical seasonal trends as results improved by approximately $30 million. Equity income increased by $1 million.

Three months ended March 31, 2015 versus three months ended March 31, 2014 – EBITDA was relatively unchanged versus the first quarter 2014. The first quarter of 2014 included a $52 million positive environmental settlement. Olefin results increased by approximately $10 million primarily due to higher ethylene margins from a lower cost of naphtha. Combined polyolefin results increased by approximately $60 million. Margin and spreads in European ethylene and polyolefins were relatively unchanged in dollars while increasing on a Euro basis. Polyethylene and polypropylene volumes each increased by 20 percent. Combined polypropylene compounds and polybutene-1 results were relatively unchanged. Equity income increased by $3 million.

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

Table 4 - I&D Financial Overview
	Three Months Ended
	March 31,	December 31,	March 31,
*Millions of U.S. dollars*	2015	2014	2014
Operating income	$271	$208	$316
EBITDA	337	271	375
LCM, pre-tax	44	93	- -
EBITDA excluding LCM	381	364	375

Three months ended March 31, 2015 versus three months ended December 31, 2014 – EBITDA increased by $17 million versus the fourth quarter 2014, excluding a $49 million quarter to quarter variance as a result of the LCM inventory adjustments. Propylene oxide and derivative results improved by approximately $15 million due to higher volumes. Intermediate chemical results increased by $35 million primarily as a result of higher margins. The negative impact of the Channelview methanol plant turnaround was offset by increased results in EO/EG, styrene and C4 chemicals. Oxyfuels results declined by approximately $35 million due to lower margins following strong fourth quarter 2014 results. Equity income increased by $2 million.

Three months ended March 31, 2015 versus three months ended March 31, 2014 – EBITDA increased by $6 million versus the first quarter 2014, excluding a $44 million quarter to quarter variance as a result of the LCM inventory adjustment. Propylene oxide and derivative results were relatively unchanged. Intermediate chemical results were relatively unchanged as lower acetyl and EO/EG results were offset by higher styrene results. Oxyfuels results were also relatively unchanged. Equity income increased by $2 million.

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

Table 5 - Refining Financial Overview
	Three Months Ended
	March 31,	December 31,	March 31,
*Millions of U.S. dollars*	2015	2014	2014
Operating income (loss)	$74	($354)	$86
EBITDA	149	(311)	129
LCM, pre-tax	5	344	- -
EBITDA excluding LCM	154	33	129

Three months ended March 31, 2015 versus three months ended December 31, 2014 – EBITDA increased by $121 million versus the fourth quarter 2014, excluding a $339 million quarter to quarter variance as a result of the LCM inventory adjustments. Crude oil throughput declined by 25,000 barrels per day as rates were primarily constrained by maintenance internally and at a third party off-gas processor. The Maya 2-1-1 industry benchmark spread increased by approximately $6 per barrel, averaging $23.74 per barrel. The refinery spread increased somewhat less than the benchmark. The percentage of combined Canadian and light crudes approximately doubled versus the fourth quarter of 2014.

Three months ended March 31, 2015 versus three months ended March 31, 2014 – Versus the first quarter of 2014, EBITDA increased by $25 million, excluding a $5 million quarter to quarter variance as a result of the LCM inventory adjustment. Crude oil throughput declined by 6,000 barrels per day in the first quarter of 2015. The Maya 2-1-1 spread declined by approximately $4.52 per barrel. The refinery spread was relatively unchanged year over year, declining by $0.34 per barrel. During the first quarter of 2014, yields, capture rates, and throughput were negatively impacted by maintenance. The cost of RIN's increased by approximately $10 million.

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


Table 6 - Technology Financial Overview
	Three Months Ended
	March 31,	December 31,	March 31,
*Millions of U.S. dollars*	2015	2014	2014
Operating income	$64	$29	$60
EBITDA	76	44	76

Three months ended March 31, 2015 versus three months ended December 31, 2014 – EBITDA increased by $32 million. Increased catalyst results represented approximately two thirds of the increase.

Three months ended March 31, 2015 versus three months ended March 31, 2014 – EBITDA was unchanged. Catalyst results improved while licensing declined.

Capital Spending and Cash Balances
Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $306 million during the first quarter 2015. Our cash and short-term securities balance was $3.6 billion at March 31, 2015. We repurchased 15.7 million of our outstanding ordinary shares during the first quarter of 2015. There were 475 million common shares outstanding as of March 31, 2015. The company paid dividends of $334 million during the first quarter of 2015 and issued $1.0 billion in bonds at a coupon rate of 4.625% due in 2055.

CONFERENCE CALL
LyondellBasell will host a conference call April 24 at 11 a.m. ET. Participants on the call will include Chief Executive Officer Bob Patel, Executive Vice President and Chief Financial Officer Karyn Ovelmen, Senior Vice President - Strategic Planning and Transactions Sergey Vasnetsov, and Vice President of Investor Relations Doug Pike.

The toll-free dial-in number in the U.S. is 888-677-1826. A complete listing of toll-free numbers by country is available at www.lyb.com/teleconference for international callers. The pass code for all numbers is 4843334.

The slides and webcast that accompany the call will be available at http://www.lyb.com/earnings.

A replay of the call will be available from 2 p.m. ET April 24 until May 24 at 11 p.m. ET. The replay dial-in numbers are 800-839-4837 (U.S.) and +1 203-369-3588 (international). The pass code for each is 4558.

ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell (www.lyb.com) manufactures products at 55 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.

FORWARD-LOOKING STATEMENTS
The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; our ability to successfully execute projects and growth strategies; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2014, which can be found at www.lyb.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.

INFORMATION RELATED TO FINANCIAL MEASURES
This release makes reference to certain "non-GAAP" financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. The non-GAAP measures we have presented include income from continuing operations excluding LCM, diluted earnings per share excluding LCM, EBITDA and EBITDA excluding LCM. LCM stands for "lower of cost or market," which is an accounting rule consistent with GAAP related to the valuation of inventory. Our inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out ("LIFO") inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may be higher than the market value, which results in us writing down the value of inventory to market value in accordance with the LCM rule, consistent with GAAP. We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures, such as EBITDA and earnings and EBITDA excluding LCM, provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as alternative to operating cash flows as a measure of our liquidity. We have also presented financial information herein exclusive of adjustments for LCM.

Quantitative reconciliations of EBITDA to net income, the most comparable GAAP measure, are provided in Table 8 at the end of this release.

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

Table 7 - Reconciliation of Segment Information to Consolidated Financial Information ^(a)

				2014										2015
	(Millions of U.S. dollars)			Q1		Q2		Q3		Q4		Total		Q1
	Sales and other operating revenues:
		Olefins & Polyolefins - Americas		$	3,357	$	3,462	$	3,750	$	3,379	$	13,948	$	2,551
		Olefins & Polyolefins - EAI			3,778		4,069		3,995		3,361		15,203		2,911
		Intermediates & Derivatives			2,429		2,706		2,691		2,304		10,130		1,918
		Refining			2,756		3,250		3,146		2,558		11,710		1,607
		Technology			136		144		107		110		497		136
		Other/elims			(1,321)		(1,514)		(1,623)		(1,422)		(5,880)		(938)
			Continuing Operations	$	11,135	$	12,117	$	12,066	$	10,290	$	45,608	$	8,185
	Operating income (loss):
		Olefins & Polyolefins - Americas		$	656	$	898	$	1,068	$	950	$	3,572	$	934
		Olefins & Polyolefins - EAI			225		190		223		246		884		236
		Intermediates & Derivatives			316		375		321		208		1,220		271
		Refining			86		95		67		(354)		(106)		74
		Technology			60		56		26		29		171		64
		Other			(3)		(1)		1		(2)		(5)		(4)
			Continuing Operations	$	1,340	$	1,613	$	1,706	$	1,077	$	5,736	$	1,575
	Depreciation and amortization:
		Olefins & Polyolefins - Americas		$	73	$	74	$	84	$	85	$	316	$	86
		Olefins & Polyolefins - EAI			70		67		65		46		248		55
		Intermediates & Derivatives			55		56		55		59		225		60
		Refining			42		42		42		43		169		74
		Technology			16		15		16		14		61		12
			Continuing Operations	$	256	$	254	$	262	$	247	$	1,019	$	287
	EBITDA: ^(b)
		Olefins & Polyolefins - Americas		$	736	$	978	$	1,157	$	1,040	$	3,911	$	1,031
		Olefins & Polyolefins - EAI			356		319		343		348		1,366		357
		Intermediates & Derivatives			375		430		383		271		1,459		337
		Refining			129		137		110		(311)		65		149
		Technology			76		71		41		44		232		76
		Other			(4)		6		1		14		17		2
			Continuing Operations	$	1,668	$	1,941	$	2,035	$	1,406	$	7,050	$	1,952
	Capital, turnarounds and IT deferred spending:
		Olefins & Polyolefins - Americas		$	231	$	306	$	208	$	167	$	912	$	149
		Olefins & Polyolefins - EAI			33		27		45		86		191		38
		Intermediates & Derivatives			45		52		50		94		241		76
		Refining			32		20		27		44		123		33
		Technology			2		6		6		11		25		6
		Other			- -		4		2		1		7		4
			Continuing Operations	$	343	$	415	$	338	$	403	$	1,499	$	306


(a) EBITDA as presented herein includes the impacts of pre-tax LCM adjustments of $45 million and $715 million in the third and fourth quarters of 2014, respectively, and $92 million in the first quarter of 2015. See Tables 2 through 6 for LCM adjustments recorded for each segment.
(b) See Table 8 for EBITDA calculation.

Table 8 - EBITDA Calculation

			2014										2015
	(Millions of U.S. dollars)		Q1		Q2		Q3		Q4		Total		Q1

	Net income attributable to the Company shareholders^(a)		$	945	$	1,178	$	1,258	$	793	$	4,174	$	1,166
	Net income (loss) attributable to non-controlling interests			(1)		(2)		(1)		(2)		(6)		(2)
	(Income) loss from discontinued operations, net of tax			(1)		(3)		3		5		4		3
	Income from continuing operations^(a)			943		1,173		1,260		796		4,172		1,167
		Provision for income taxes		383		425		434		298		1,540		440
		Depreciation and amortization		256		254		262		247		1,019		287
		Interest expense, net		86		89		79		65		319		58
	EBITDA^(b)		$	1,668	$	1,941	$	2,035	$	1,406	$	7,050	$	1,952


(a) Amounts presented herein include after-tax LCM adjustments of $28 million and $455 million in the third and fourth quarters of 2014, respectively, and $58 million in the first quarter of 2015.
(b) EBITDA as presented herein includes pre-tax LCM adjustments of $45 million and $715 million in the third and fourth quarters of 2014, respectively, and $92 million in the first quarter of 2015.

Table 9 - Selected Segment Operating Information

				2014					2015
				Q1	Q2	Q3	Q4	Total	Q1
	Olefins and Polyolefins - Americas
		Volumes (million pounds)
			Ethylene produced	1,979	1,721	2,301	2,458	8,459	2,364
			Propylene produced	611	648	559	719	2,537	805
			Polyethylene sold	1,406	1,451	1,577	1,486	5,920	1,497
			Polypropylene sold	614	632	681	596	2,523	633
		Benchmark Market Prices
			West Texas Intermediate crude oil (USD per barrel)	98.61	102.99	97.25	73.20	92.91	48.57
			Light Louisiana Sweet ("LLS") crude oil (USD per barrel)	104.36	105.55	101.03	76.58	96.92	52.84
			Natural gas (USD per million BTUs)	5.01	4.74	4.19	4.09	4.51	2.76
			U.S. weighted average cost of ethylene production (cents/pound)	20.0	17.1	14.5	10.5	15.4	10.2
			U.S. ethylene (cents/pound)	48.3	47.2	51.8	44.8	48.0	34.8
			U.S. polyethylene [high density] (cents/pound)	76.3	77.0	78.0	76.7	77.0	65.7
			U.S. propylene (cents/pound)	73.3	69.7	70.8	69.8	70.9	49.7
			U.S. polypropylene [homopolymer] (cents/pound)	88.3	84.7	86.3	85.8	86.3	67.7

	Olefins and Polyolefins - Europe, Asia, International
		Volumes (million pounds)
			Ethylene produced	989	1,024	1,039	1,059	4,111	1,007
			Propylene produced	582	617	629	618	2,446	600
			Polyethylene sold	1,275	1,363	1,284	1,254	5,176	1,533
			Polypropylene sold	1,509	1,707	1,633	1,561	6,410	1,817
		Benchmark Market Prices (€0.01 per pound)
			Western Europe weighted average cost of ethylene production	32.9	34.3	31.5	18.2	29.2	22.9
			Western Europe ethylene	54.7	52.8	54.1	48.7	52.6	39.3
			Western Europe polyethylene [high density]	56.1	54.8	55.4	51.5	54.5	45.2
			Western Europe propylene	51.3	52.2	51.9	46.5	50.5	37.1
			Western Europe polypropylene [homopolymer]	59.9	61.3	61.4	57.0	59.9	49.8

	Intermediates and Derivatives
		Volumes (million pounds)
			Propylene oxide and derivatives	772	726	768	781	3,047	870
			Ethylene oxide and derivatives	262	319	211	226	1,018	268
			Styrene monomer	683	870	933	870	3,356	903
			Acetyls	683	592	613	619	2,507	547
			TBA Intermediates	416	391	461	384	1,652	433
		Volumes (million gallons)
			MTBE/ETBE	188	266	245	216	915	229
		Benchmark Market Margins (cents per gallon)
			MTBE - Northwest Europe	63.4	90.7	111.8	109.1	94.0	64.0

	Refining
		Volumes (thousands of barrels per day)
			Heavy crude oil processing rate	247	257	264	266	259	241
		Benchmark Market Margins
			Light crude oil - 2-1-1	13.18	17.29	14.20	8.50	13.32	15.02
			Light crude oil - Maya differential	15.08	9.72	10.15	9.22	11.11	8.72


Source: LYB and third party consultants
Note: Benchmark market prices for U.S. and Western Europe polyethylene and polypropylene reflect discounted prices. Volumes presented represent third party sales of selected key products.

Table 10 - Unaudited Income Statement Information

				2014										2015
	(Millions of U.S. dollars)			Q1		Q2		Q3		Q4		Total		Q1

	Sales and other operating revenues			$	11,135	$	12,117	$	12,066	$	10,290	$	45,608	$	8,185
	Cost of sales^(a)				9,577		10,255		10,118		8,989		38,939		6,379
	Selling, general and administrative expenses				186		215		211		194		806		205
	Research and development expenses				32		34		31		30		127		26
		Operating income^(a)			1,340		1,613		1,706		1,077		5,736		1,575
	Income from equity investments				61		68		64		64		257		69
	Interest expense, net				(86)		(89)		(79)		(65)		(319)		(58)
	Other income, net				11		6		3		18		38		21
		Income from continuing operations before income taxes^(a)			1,326		1,598		1,694		1,094		5,712		1,607
	Provision for income taxes				383		425		434		298		1,540		440
		Income from continuing operations^(b)			943		1,173		1,260		796		4,172		1,167
	Income (loss) from discontinued operations, net of tax				1		3		(3)		(5)		(4)		(3)
			Net income^(b)		944		1,176		1,257		791		4,168		1,164
	Net loss attributable to non-controlling interest				1		2		1		2		6		2
			Net income attributable to the Company shareholders^(b)	$	945	$	1,178	$	1,258	$	793	$	4,174	$	1,166


(a) Amounts included herein include pre-tax LCM adjustments of $45 million and $715 million in the third and fourth quarters of 2014, respectively, and $92 million in the first quarter of 2015.
(b) Amounts included herein include after-tax LCM adjustments of $28 million and $455 million in the third and fourth quarters of 2014, respectively, and $58 million in the first quarter of 2015.

Table 11 - Charges (Benefits) Included in Income from Continuing Operations

		2014										2015
Millions of U.S. dollars (except share data)		Q1		Q2		Q3		Q4		Total		Q1
Pretax charges (benefits):
	Settlement of environmental indemnification agreement	$	(52)	$	- -	$	- -	$	- -	$	(52)	$	- -
	Lower of cost or market inventory adjustment		- -		- -		45		715		760		92
	Emission allowance credits, amortization		- -		- -		- -		- -		- -		35
Total pretax charges (benefits)			(52)		- -		45		715		708		127
Provision for (benefit from) income tax related to these items			- -		- -		(17)		(260)		(277)		(47)
After-tax effect of net charges (benefits)		$	(52)	$	- -	$	28	$	455	$	431	$	80
Effect on diluted earnings per share		$	0.09	$	- -	$	(0.05)	$	(0.91)	$	(0.82)	$	(0.17)

Table 12 - Unaudited Cash Flow Information

		2014										2015
	(Millions of U.S. dollars)	Q1		Q2		Q3		Q4		Total		Q1

	Net cash provided by operating activities	$	801	$	1,797	$	1,434	$	2,016	$	6,048	$	1,468

	Net cash used in investing activities		(2,011)		(246)		(638)		(636)		(3,531)		(443)

	Net cash used in financing activities		(550)		(2,217)		(1,621)		(1,519)		(5,907)		(401)

Table 13 - Unaudited Balance Sheet Information

			March 31,		June 30,		September 30,		December 31,		March 31,
	(Millions of U.S. dollars)		2014		2014		2014		2014		2015

	Cash and cash equivalents		$	2,702	$	2,030	$	1,185	$	1,031	$	1,616
	Restricted cash			3		2		- -		2		2
	Short-term investments			1,402		1,299		1,544		1,593		1,478
	Accounts receivable, net			4,141		4,264		4,105		3,448		3,089
	Inventories			5,589		5,326		5,359		4,517		4,267
	Prepaid expenses and other current assets			1,156		784		739		1,054		1,195
		Total current assets		14,993		13,705		12,932		11,645		11,647
	Property, plant and equipment, net			8,556		8,740		8,600		8,758		8,430
	Investments and long-term receivables:
		Investment in PO joint ventures		424		418		397		384		373
		Equity investments		1,693		1,702		1,690		1,636		1,581
		Other investments and long-term receivables		62		58		54		44		38
	Goodwill			605		602		576		566		533
	Intangible assets, net			870		838		799		769		695
	Other assets			624		593		583		481		709
		Total assets	$	27,827	$	26,656	$	25,631	$	24,283	$	24,006

	Current maturities of long-term debt		$	3	$	3	$	2	$	4	$	4
	Short-term debt			58		55		56		346		514
	Accounts payable			3,642		3,690		3,431		3,064		2,631
	Accrued liabilities			1,477		1,310		1,460		1,554		1,482
	Deferred income taxes			540		570		685		469		429
		Total current liabilities		5,720		5,628		5,634		5,437		5,060
	Long-term debt			6,766		6,766		6,753		6,757		7,749
	Other liabilities			1,838		1,851		1,795		2,122		2,038
	Deferred income taxes			1,677		1,623		1,574		1,623		1,653
	Stockholders' equity			11,791		10,753		9,843		8,314		7,478
	Non-controlling interests			35		35		32		30		28
		Total liabilities and stockholders' equity	$	27,827	$	26,656	$	25,631	$	24,283	$	24,006