LyondellBasell Reports Second-Quarter 2014 Results

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Jul 25, 2014, 06:50 ET

HOUSTON and LONDON, July 25, 2014 /PRNewswire/ --

Second-Quarter 2014 Highlights

LyondellBasell (PRNewsFoto/LyondellBasell Industries) (PRNewsFoto/LyondellBasell Industries)

Record quarterly EBITDA of $1.94 billion
Record diluted earnings per share of $2.22; income from continuing operations of $1.17 billion
Solid results in all segments, with O&P Americas segment approaching EBITDA of $1 billion
Completed initial 10% share repurchase and initiated purchases under second 10% authorization; repurchased approximately 19 million shares during the quarter

LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the second quarter 2014 of $2.22 diluted earnings per share, or $1.17 billion. Second quarter 2014 EBITDA was $1.94 billion. The increase from the first quarter 2014 was primarily due to Olefins and Polyolefins – Americas segment results.

Comparisons with the prior quarter and second quarter 2013 are shown below:

Table 1 - Earnings Summary
		Three Months Ended			Six Months Ended
		June 30,	March 31,	June 30,	June 30,
*Millions of U.S. dollars (except share data)*		2014	2014	2013	2014	2013
Sales and other operating revenues		$12,117	$11,135	$11,103	$23,252	$21,772
Net income^(a)		1,176	944	927	2,120	1,827
Income from continuing operations^(b)		1,173	943	923	2,116	1,829
Diluted earnings per share (U.S. dollars):
	Net income^(c)	2.23	1.72	1.61	3.94	3.16
	Income from continuing operations^(b)	2.22	1.72	1.60	3.93	3.16
Diluted share count (millions)		527	548	578	537	578
EBITDA^(d)		1,941	1,668	1,652	3,609	3,237

(a) Includes net loss attributable to non-controlling interests and income (loss) from discontinued operations, net of tax. See Table 10.
(b) Please see Table 11 for charges and benefits to income from continuing operations.
(c) Includes diluted earnings 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 income
from continuing operations.

"We had record earnings this quarter of $2.22 per share, while our EBITDA approached $2 billion. Importantly, every segment contributed to this achievement. Of particular note was the strength in our Olefins and Polyolefins- Americas segment which generated nearly $1 billion of EBITDA even while we were performing significant scheduled maintenance at our La Porte ethylene site. In addition to the strong quarterly earnings, we repurchased approximately 19 million of our shares during the second quarter, completing the initial 10 percent share repurchase authorization. We also initiated repurchases under the second 10 percent authorization," said Jim Gallogly, LyondellBasell Chief Executive Officer.

"As encouraging as these results are, we did not fully deliver on our reliability expectations, and the quarterly earnings could have been better. Specifically, we were late in completing our La Porte ethylene turnaround in part due to a mechanical issue with a compressor. Both supplier upsets and mechanical issues impacted our Intermediates and Derivatives business as well. Despite these temporary setbacks, our commitment to Operational Excellence continues to be the foundation of our success," Gallogly said.

"Industry fundamentals remain strong, and we continue to execute on our investment program. During the third quarter we expect to begin production from the 800 million pound per year La Porte ethylene expansion. This is the first of three ethylene expansions and continues to put us well ahead of new greenfield plants pursued by others in the industry," Gallogly added.

OUTLOOK
"During the first weeks of the third quarter, industry conditions have been similar to the second quarter environment. U.S. oil, natural gas, and natural gas liquids production remain strong. Together these support margins in our Olefins and Polyolefins – Americas, Intermediates and Derivatives, and Refining segments. However, our results in the next quarter will be negatively impacted by the delayed start-up of our La Porte ethylene plant," Gallogly noted.

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 and International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.

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			Six Months Ended
	June 30,	March 31,	June 30,	June 30,
*Millions of U.S. dollars*	2014	2014	2013	2014	2013
Operating income	$898	$656	$872	$1,554	$1,693
EBITDA	978	736	951	1,714	1,849

Three months ended June 30, 2014 versus three months ended March 31, 2014 – The segment achieved record EBITDA results in the second quarter of 2014. EBITDA increased $242 million versus the first quarter 2014. Compared to the prior period, olefins results increased approximately $220 million. The first quarter was negatively impacted by ethylene purchases and inventory build in preparation for the second quarter La Porte plant turnaround. The second quarter was also negatively impacted, but to a lesser extent, by the delayed restart of the La Porte olefin plant and the subsequent purchase of ethylene. This impacted results by approximately $50 million. Olefins benefited in the second quarter from lower NGL costs and improved co-product values. Combined polyolefin results increased by approximately $20 million from the first quarter 2014 driven by higher polyethylene margins. The ethylene to polyethylene price spread increased 2 cents per pound. Joint venture equity income increased by $2 million.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $27 million versus the second quarter 2013. Olefins results declined approximately $130 million compared to the prior year period. Olefins sales and production volumes declined. However, margins benefited from lower NGL costs and higher co-product values. The price of ethylene decreased by approximately 2 cents per pound compared to the prior year period. Polyethylene results increased by approximately $150 million as the ethylene to polyethylene price spread improved by 10 cents per pound and sales volumes increased approximately 4 percent versus the prior year period. Polypropylene results increased by approximately $15 million due to slightly higher margins. Joint venture equity income decreased by $2 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, global polypropylene compounds, Catalloy process resins and polybutene-1 resins.

Table 3 - O&P–EAI Financial Overview
	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,
*Millions of U.S. dollars*	2014	2014	2013	2014	2013
Operating income	$190	$225	$189	$415	$282
EBITDA	319	356	295	675	520

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA decreased $37 million versus the first quarter 2014. Excluding the benefits of a $52 million environmental settlement in the first quarter, EBITDA increased by $15 million. Olefins results increased modestly. Naphtha cost increases and a decline in the price of ethylene of approximately 2 cents per pound were more than offset by increased co-product prices and from cracking more advantaged feedstocks. Approximately 55 percent of our ethylene production was sourced from advantaged raw materials. Combined polyolefin results increased from higher volumes. Combined polypropylene compounds and polybutene-1 results were unchanged. Equity income from joint ventures increased by $9 million from the first quarter 2014.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $24 million versus the second quarter 2013. Olefins results declined by approximately $20 million as a result of margins that were lower by approximately 3 cents per pound. This was partially mitigated by higher operating rates and from higher butadiene volumes following a 2013 expansion project. Combined polyolefin results increased primarily as a result of higher polyethylene and polypropylene margins of approximately 1 cent per pound. Polypropylene compounds and polybutene-1 results decreased by approximately $10 million from the prior year period as a result of lower polypropylene compound margins. Equity income from joint ventures increased $32 million from the second quarter 2013.

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 (acetic acid, vinyl acetate monomer and methanol), ethylene oxide and its derivatives, and oxyfuels.

Table 4 - I&D Financial Overview
	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,
*Millions of U.S. dollars*	2014	2014	2013	2014	2013
Operating income	$375	$316	$285	$691	$608
EBITDA	430	375	338	805	711

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA increased $55 million versus the first quarter 2014. Results for PO and PO derivatives decreased by approximately $20 million. Seasonally lower sales of propylene glycol sold into aircraft deicing were offset by higher sales of propylene oxide. Solvent margins declined. Intermediate chemicals results increased by approximately $10 million as styrene and ethylene glycol volumes improved. Additionally, acetic acid, vinyl acetate, and styrene margins improved but lower margins from methanol and ethylene glycol pricing partially offset the benefit. Oxyfuels results improved by approximately $70 million due to seasonal increases in both volume and margin. Equity income from joint ventures decreased by $4 million.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $92 million compared to the second quarter 2013. Results for PO and PO derivatives increased by approximately $25 million primarily due to higher volumes. Intermediate chemicals results were higher by approximately $60 million due to higher methanol and styrene volumes, and higher methanol and vinyl acetate margins. Oxyfuels results increased by approximately $10 million. Equity income from joint ventures decreased by $5 million from the second quarter in 2013.

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			Six Months Ended
	June 30,	March 31,	June 30,	June 30,
*Millions of U.S. dollars*	2014	2014	2013	2014	2013
Operating income (loss)	$95	$86	($16)	$181	($33)
EBITDA	137	129	20	266	40

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA increased $8 million versus the first quarter 2014. The refinery processed 257,000 barrels per day, up 10,000 barrels per day from the prior quarter. Compared to the prior quarter, the Maya 2-1-1 benchmark crack spread declined by $1.25 per barrel, averaging $27.01 per barrel. The corresponding Houston refinery spread was relatively unchanged. The cost of Renewable Identification Numbers (RINs) to meet U.S. renewable fuel standards was relatively unchanged versus the first quarter 2014.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $117 million versus the second quarter 2013. The refinery processed 257,000 barrels per day, down 8,000 barrels per day from the prior year period. Compared to the second quarter 2013, the Maya 2-1-1 benchmark spread increased $5.43 per barrel, and we benefited from improved yields and higher margins on secondary products. The cost of RINs decreased by approximately $20 million compared to the same quarter last year.

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			Six Months Ended
	June 30,	March 31,	June 30,	June 30,
*Millions of U.S. dollars*	2014	2014	2013	2014	2013
Operating income	$56	$60	$39	$116	$89
EBITDA	71	76	59	147	125

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA decreased by $5 million.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased by $12 million from higher catalyst and licensing results.

Capital spending and cash balances

Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $415 million in the second quarter 2014. Our cash and short-term securities balance was $3.5 billion at June 30, 2014. We repurchased approximately 19 million of our outstanding ordinary shares and paid $370 million in dividends during the second quarter of 2014. There were 515 million common shares outstanding as of June 30^th.

CONFERENCE CALL
LyondellBasell will host a conference call July 25 at 11 a.m. ET. Participants on the call will include Chief Executive Officer Jim Gallogly, 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. For international numbers, go to www.lyondellbasell.com/teleconference, for a complete listing of toll-free numbers by country. The pass code for all numbers is 1231245.

A replay of the call will be available from 2 p.m. ET July 25 until Aug. 25 at 11 p.m. ET. The replay dial-in numbers are 800-839-1171 (U.S.) and +1 203-369-3030 (international). The pass code for each is 3675.

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

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.lyondellbasell.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, 2013, which can be found at www.lyondellbasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.

NON-GAAP MEASURES
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA, as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. 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, 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. These 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.

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

				2013										2014
	(Millions of U.S. dollars)			Q1		Q2		Q3		Q4		Total		Q1		Q2		YTD
	Sales and other operating revenues:
		Olefins & Polyolefins - Americas		$	3,244	$	3,251	$	3,315	$	3,279	$	13,089	$	3,357	$	3,462	$	6,819
		Olefins & Polyolefins - Europe, Asia, International			3,800		3,708		3,594		3,583		14,685		3,778		4,069		7,847
		Intermediates & Derivatives			2,282		2,217		2,452		2,521		9,472		2,429		2,706		5,135
		Refining			2,468		3,077		3,177		2,976		11,698		2,756		3,250		6,006
		Technology			134		132		124		142		532		136		144		280
		Other			(1,259)		(1,282)		(1,510)		(1,363)		(5,414)		(1,321)		(1,514)		(2,835)
			Continuing Operations	$	10,669	$	11,103	$	11,152	$	11,138	$	44,062	$	11,135	$	12,117	$	23,252
	Operating income (loss):
		Olefins & Polyolefins - Americas		$	821	$	872	$	759	$	801	$	3,253	$	656	$	898	$	1,554
		Olefins & Polyolefins - Europe, Asia, International			93		189		78		17		377		225		190		415
		Intermediates & Derivatives			323		285		371		321		1,300		316		375		691
		Refining			(17)		(16)		(37)		92		22		86		95		181
		Technology			50		39		35		33		157		60		56		116
		Other			(3)		(5)		1		- -		(7)		(3)		(1)		(4)
			Continuing Operations	$	1,267	$	1,364	$	1,207	$	1,264	$	5,102	$	1,340	$	1,613	$	2,953
	Depreciation and amortization:
		Olefins & Polyolefins - Americas		$	75	$	69	$	73	$	76	$	293	$	73	$	74	$	147
		Olefins & Polyolefins - Europe, Asia, International			77		76		78		56		287		70		67		137
		Intermediates & Derivatives			48		50		50		56		204		55		56		111
		Refining			36		37		45		42		160		42		42		84
		Technology			17		20		16		22		75		16		15		31
		Other			- -		2		- -		- -		2		- -		- -		- -
			Continuing Operations	$	253	$	254	$	262	$	252	$	1,021	$	256	$	254	$	510
	EBITDA: ^(a)
		Olefins & Polyolefins - Americas		$	898	$	951	$	841	$	883	$	3,573	$	736	$	978	$	1,714
		Olefins & Polyolefins - Europe, Asia, International			225		295		204		115		839		356		319		675
		Intermediates & Derivatives			373		338		427		354		1,492		375		430		805
		Refining			20		20		8		134		182		129		137		266
		Technology			66		59		52		55		232		76		71		147
		Other			3		(11)		(1)		2		(7)		(4)		6		2
			Continuing Operations	$	1,585	$	1,652	$	1,531	$	1,543	$	6,311	$	1,668	$	1,941	$	3,609
	Capital, turnarounds and IT deferred spending:
		Olefins & Polyolefins - Americas		$	122	$	122	$	218	$	183	$	645	$	231	$	306	$	537
		Olefins & Polyolefins - Europe, Asia, International			63		46		44		76		229		33		27		60
		Intermediates & Derivatives			106		141		119		77		443		45		52		97
		Refining			93		67		36		13		209		32		20		52
		Technology			7		6		7		10		30		2		6		8
		Other			- -		5		(1)		1		5		- -		4		4
			Total		391		387		423		360		1,561		343		415		758
		Deferred charges included above			- -		- -		- -		- -		- -		- -		- -		- -
			Continuing Operations	$	391	$	387	$	423	$	360	$	1,561	$	343	$	415	$	758


(a) See Table 8 for EBITDA calculation.

Table 8 - EBITDA Calculation

			2013										2014
	(Millions of U.S. dollars)		Q1		Q2		Q3		Q4		Total		Q1		Q2		YTD

	Net income attributable to the Company shareholders		$	901	$	929	$	853	$	1,174	$	3,857	$	945	$	1,178	$	2,123
	Net income (loss) attributable to non-controlling interests			(1)		(2)		(2)		1		(4)		(1)		(2)		(3)
	(Income) loss from discontinued operations, net of tax			6		(4)		3		2		7		(1)		(3)		(4)
	Income from continuing operations			906		923		854		1,177		3,860		943		1,173		2,116
		Provision for income taxes		357		410		339		30		1,136		383		425		808
		Depreciation and amortization		253		254		262		252		1,021		256		254		510
		Interest expense, net		69		65		76		84		294		86		89		175
	EBITDA		$	1,585	$	1,652	$	1,531	$	1,543	$	6,311	$	1,668	$	1,941	$	3,609

Table 9 - Selected Segment Operating Information

				2013					2014
				Q1	Q2	Q3	Q4	Total	Q1	Q2	YTD
	Olefins and Polyolefins - Americas
		Volumes (million pounds)
			Ethylene produced	2,337	2,412	2,111	2,156	9,016	1,979	1,721	3,700
			Propylene produced	624	529	652	646	2,451	611	648	1,259
			Polyethylene sold	1,396	1,389	1,378	1,409	5,572	1,406	1,451	2,857
			Polypropylene sold	565	637	669	642	2,513	614	632	1,246
		Benchmark Market Prices
			West Texas Intermediate crude oil (USD per barrel)	94.43	94.17	105.80	97.60	98.06	98.61	102.99	100.84
			Light Louisiana Sweet ("LLS") crude oil (USD per barrel)	113.86	104.64	109.94	101.12	107.31	104.36	105.55	104.97
			Natural gas (USD per million BTUs)	3.45	4.22	3.68	3.70	3.78	5.01	4.74	4.87
			U.S. weighted average cost of ethylene production (cents/pound)	13.8	15.7	16.6	18.6	16.2	20.0	17.1	18.6
			U.S. ethylene (cents/pound)	48.0	46.3	45.8	46.5	46.7	48.3	47.2	47.8
			U.S. polyethylene [high density] (cents/pound)	66.7	68.7	71.7	75.0	70.5	76.3	77.0	76.7
			U.S. propylene (cents/pound)	75.0	63.3	68.3	68.2	68.7	73.3	69.7	71.5
			U.S. polypropylene [homopolymer] (cents/pound)	88.0	76.2	82.3	82.2	82.2	88.3	84.7	86.5

	Olefins and Polyolefins - Europe, Asia, International
		Volumes (million pounds)
			Ethylene produced	912	991	984	930	3,817	989	1,024	2,013
			Propylene produced	577	610	597	568	2,352	582	617	1,199
			Polyethylene sold	1,206	1,314	1,212	1,167	4,899	1,275	1,363	2,638
			Polypropylene sold	1,657	1,821	1,612	1,531	6,621	1,509	1,707	3,216
		Benchmark Market Prices (€0.01 per pound)
			Western Europe weighted average cost of ethylene production	36.2	29.3	34.9	38.5	34.7	32.9	34.3	33.6
			Western Europe ethylene	58.6	54.4	55.0	55.1	55.8	54.7	52.8	53.8
			Western Europe polyethylene [high density]	61.2	56.8	57.9	57.1	58.2	56.1	54.8	55.5
			Western Europe propylene	50.6	47.9	49.6	49.9	49.5	51.3	52.2	51.7
			Western Europe polypropylene [homopolymer]	59.1	56.1	58.1	58.2	57.9	59.9	61.3	60.6

	Intermediates and Derivatives
		Volumes (million pounds)
			Propylene oxide and derivatives	683	665	665	729	2,742	772	781	1,553
			Ethylene oxide and derivatives	260	277	294	346	1,177	262	319	581
			Styrene monomer	703	589	756	832	2,880	683	870	1,553
			Acetyls	431	470	506	510	1,917	683	592	1,275
			TBA Intermediates	434	357	425	442	1,658	416	391	807
		Volumes (million gallons)
			MTBE/ETBE	185	235	241	222	883	188	266	454
		Benchmark Market Margins (cents per gallon)
			MTBE - Northwest Europe	104.9	88.4	86.8	37.8	79.1	63.4	90.7	76.8

	Refining
		Volumes (thousands of barrels per day)
			Heavy crude oil processing rate	173	265	250	239	232	247	257	252
		Benchmark Market Margins
			Light crude oil - 2-1-1	11.53	14.63	12.63	12.67	12.89	13.18	17.29	15.27
			Light crude oil - Maya differential	11.17	6.95	10.59	11.65	10.05	15.08	9.72	12.41


Source: LYB and third party consultants
Note: Benchmark market prices for U.S. and Western Europe polyethylene and polypropylene reflect discounted prices.

Table 10 - Unaudited Income Statement Information

					2013										2014
	(Millions of U.S. dollars)				Q1		Q2		Q3		Q4		Total		Q1		Q2		YTD

	Sales and other operating revenues				$	10,669	$	11,103	$	11,152	$	11,138	$	44,062	$	11,135	$	12,117	$	23,252
	Cost of sales					9,153		9,496		9,690		9,601		37,940		9,577		10,255		19,832
	Selling, general and administrative expenses					213		208		220		229		870		186		215		401
	Research and development expenses					36		35		35		44		150		32		34		66
		Operating income				1,267		1,364		1,207		1,264		5,102		1,340		1,613		2,953
	Income from equity investments					59		43		61		40		203		61		68		129
	Interest expense, net					(69)		(65)		(76)		(84)		(294)		(86)		(89)		(175)
	Other income (expense), net					6		(8)		1		(13)		(14)		11		6		17
	Reorganization items					- -		(1)		- -		- -		(1)		- -		- -		- -
		Income from continuing operations before income taxes				1,263		1,333		1,193		1,207		4,996		1,326		1,598		2,924
	Provision for income taxes					357		410		339		30		1,136		383		425		808
		Income from continuing operations				906		923		854		1,177		3,860		943		1,173		2,116
	Income (loss) from discontinued operations,
		net of tax				(6)		4		(3)		(2)		(7)		1		3		4
			Net income			900		927		851		1,175		3,853		944		1,176		2,120
	Net (income) loss attributable to non-controlling
		interests				1		2		2		(1)		4		1		2		3
			Net income attributable to the Company
				shareholders	$	901	$	929	$	853	$	1,174	$	3,857	$	945	$	1,178	$	2,123

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

		2013										2014
Millions of U.S. dollars (except share data)		Q1		Q2		Q3		Q4		Total		Q1		Q2		YTD
Pretax charges (benefits):
	Impairments	$	- -	$	- -	$	- -	$	10	$	10	$	- -	$	- -	$	- -
	Insurance settlement		- -		- -		- -		(25)		(25)		- -		- -		- -
	Settlement of environmental indemnification agreement		- -		- -		- -		- -		- -		(52)		- -		(52)
	Loss on sale of investment		- -		- -		- -		16		16		- -		- -		- -
Total pretax charges (benefits)			- -		- -		- -		1		1		(52)		- -		(52)
Provision for income tax related to these items			- -		- -		- -		4		4		- -		- -		- -
After-tax effect of net charges (benefits)		$	- -	$	- -	$	- -	$	5	$	5	$	(52)	$	- -	$	(52)
Effect on diluted earnings per share		$	- -	$	- -	$	- -	$	- -	$	- -	$	0.09	$	- -	$	0.09

Table 12 - Unaudited Cash Flow Information

		2013										2014
	(Millions of U.S. dollars)	Q1		Q2		Q3		Q4		Total		Q1			Q2		YTD

	Net cash provided by operating activities	$	799	$	1,246	$	1,116	$	1,674	$	4,835	$	801	$	1,797	$	2,598

	Net cash used in investing activities		(408)		(389)		(438)		(367)		(1,602)		(2,011)		(246)		(2,257)

	Net cash provided by (used in) financing activities		(234)		(508)		452		(1,299)		(1,589)		(550)		(2,217)		(2,767)

Table 13 - Unaudited Balance Sheet Information

			March 31,		June 30,		September 30,		December 31,		March 31,		June 30,
	(Millions of U.S. dollars)		2013		2013		2013		2013		2014		2014

	Cash and cash equivalents		$	2,879	$	3,233	$	4,414	$	4,450	$	2,702	$	2,030
	Restricted cash			6		2		4		10		3		2
	Short-term investments			- -		- -		- -		- -		1,402		1,299
	Accounts receivable, net			3,878		4,023		4,041		4,030		4,141		4,264
	Inventories			5,270		5,197		5,382		5,279		5,589		5,326
	Prepaid expenses and other current assets			622		577		784		830		1,156		784
		Total current assets		12,655		13,032		14,625		14,599		14,993		13,705
	Property, plant and equipment, net			7,779		7,979		8,223		8,457		8,556		8,740
	Investments and long-term receivables:
		Investment in PO joint ventures		401		409		423		421		424		418
		Equity investments		1,607		1,622		1,615		1,629		1,693		1,702
		Other investments and long-term receivables		421		231		164		64		62		58
	Goodwill			582		588		598		605		605		602
	Intangible assets, net			999		966		934		904		870		838
	Other assets			233		221		229		619		624		593
		Total assets	$	24,677	$	25,048	$	26,811	$	27,298	$	27,827	$	26,656

	Current maturities of long-term debt		$	1	$	1	$	1	$	1	$	3	$	3
	Short-term debt			115		114		114		58		58		55
	Accounts payable			3,217		3,324		3,241		3,572		3,642		3,690
	Accrued liabilities			1,217		1,047		1,528		1,299		1,477		1,310
	Deferred income taxes			557		550		494		580		540		570
		Total current liabilities		5,107		5,036		5,378		5,510		5,720		5,628
	Long-term debt			4,307		4,306		5,774		5,776		6,766		6,766
	Other liabilities			2,306		2,325		2,278		1,839		1,838		1,851
	Deferred income taxes			1,277		1,312		1,472		1,659		1,677		1,623
	Stockholders' equity			11,641		12,032		11,874		12,478		11,791		10,753
	Non-controlling interests			39		37		35		36		35		35
		Total liabilities and stockholders' equity	$	24,677	$	25,048	$	26,811	$	27,298	$	27,827	$	26,656