LyondellBasell Reports Third Quarter 2017 Earnings

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Oct 27, 2017, 06:45 ET

HOUSTON and LONDON, Oct. 27, 2017 /PRNewswire/ --

Third Quarter 2017 Highlights

Income from continuing operations: $1.1 billion
EBITDA: $1.8 billion
Quarterly diluted earnings per share: $2.67 per share
Impacts from Hurricane Harvey partially offset by margin improvements
Dividends and share repurchases totaled $652 million; repurchased 3.1 million shares during the third quarter
Senior unsecured debt raised to BBB+ by S&P Global Ratings

Comparisons with the prior quarter and third quarter 2016 are available in the following table:

Table 1 - Earnings Summary
		Three Months Ended			Nine Months Ended
		September 30,	June 30,	September 30,	September 30,
*Millions of U.S. dollars (except share data)*		2017	2017	2016	2017	2016
Sales and other operating revenues		$8,516	$8,403	$7,365	$25,349	$21,436
Net income^(a)		1,056	1,130	953	2,983	3,074
Income from continuing operations^(b)		1,058	1,134	955	2,997	3,077
Diluted earnings per share (U.S. dollars):
	Net income^(c)	2.67	2.81	2.30	7.46	7.23
	Income from continuing operations^(b)	2.67	2.82	2.31	7.49	7.24
Diluted share count (millions)		395	402	414	400	424
EBITDA^(d)		1,821	1,970	1,606	5,408	5,196


(a)	Includes net (income) loss attributable to non-controlling interests and 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.

LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the third quarter 2017 of $1.1 billion, or $2.67 per share. In September, LyondellBasell's interest in the Geosel pipeline and storage system in France was sold for an after-tax gain of $103 million that increased third quarter earnings by $0.26 per share. Third quarter 2017 EBITDA was $1.8 billion.

"LyondellBasell's portfolio of global businesses demonstrated strong performance in the third quarter with EBITDA in our Intermediates and Derivatives segment improving by more than 30% relative to the third quarter of 2016 and continued strong results from our Olefins and Polyolefins – Europe, Asia and International segment," said Bob Patel, LyondellBasell CEO.

"On the U.S. Gulf Coast, our commitment to hurricane preparedness enabled safe plant operations during Hurricane Harvey. We are deeply grateful for the selfless dedication and commitment of our employees toward both restoring our businesses and supporting our communities during this unprecedented storm. We estimate that lost sales volumes valued at third quarter margins and additional related costs due to the storm impacted third quarter results by approximately $200 million. Margin improvements during September provided a partial offset to the lost production and higher costs," Patel said.

"During the third quarter, LyondellBasell advanced our growth strategy by opening a new polypropylene compounds plant in China and reaching final investment decision for our next propylene oxide (PO) plant while generating approximately $1.5 billion of cash flow from operating activity and returning $652 million to shareholders. With Standard & Poor's raising our senior unsecured debt to BBB+, the rating on our long-term debt now matches our strong corporate investment-grade credit ratings," said Patel.

OUTLOOK
"Hurricane Harvey reduced inventories across the petrochemical industry and contributed to further delays in the startup of new U.S. ethylene and derivative capacity. As the industry works to rebuild inventories during the fourth quarter, we expect global markets will remain tight to balanced for the remainder of 2017 and the industry will be better positioned to absorb capacity additions during 2018," 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 and International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.

Olefins and Polyolefins - Americas (O&P-Americas) – Our O&P–Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.


Table 2 - O&P–Americas Financial Overview
	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,
*Millions of U.S. dollars*	2017	2017	2016	2017	2016
Operating income	$497	$738	$582	$1,794	$1,935
EBITDA	616	859	682	2,198	2,314

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA decreased $243 million versus the second quarter 2017. Compared to the prior period, olefin results declined approximately $260 million. Ethylene margins fell approximately 5 cents per pound primarily due to increasing feedstock prices. Sales volumes also declined due to production outages related to Hurricane Harvey. Combined polyolefin results were relatively unchanged. Improvements in polyethylene volume and polyethylene spreads over ethylene were offset by reduced volumes in polypropylene combined with polypropylene prices lagging propylene price increases. Joint venture equity income decreased by $3 million.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA decreased $66 million versus the third quarter 2016. Olefin results declined approximately $130 million primarily due to a decrease in ethylene margin from reduced ethylene price and increased feedstock costs. Net ethylene production increased 8 percent due to planned maintenance and expansion in the third quarter 2016 at Corpus Christi and planned maintenance at Morris which exceeded the Harvey volume impacts in the third quarter 2017. Combined polyolefin results increased approximately $40 million primarily due to a polyethylene spread improvement over ethylene of approximately 5 cents per pound. Joint venture equity income declined by $4 million.

Olefins and Polyolefins - Europe, Asia, and International (O&P-EAI) – Our O&P–EAI segment produces and markets olefins and co-products, polyethylene and polypropylene, including polypropylene compounds.

Table 3 - O&P–EAI Financial Overview
	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,
*Millions of U.S. dollars*	2017	2017	2016	2017	2016
Operating income	$460	$549	$447	$1,410	$1,228
EBITDA	698	699	584	1,926	1,669

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA decreased by $1 million versus the second quarter 2017. The third quarter benefited $108 million from the sale of LyondellBasell's interest in Geosel. Olefin results decreased approximately $100 million primarily due to declining co-product prices. Combined polyolefin results decreased approximately $10 million with reduced margins partially offset by increased volume. Joint venture equity income was relatively unchanged.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased by $114 million versus the third quarter 2016. The third quarter 2017 benefited $108 million from the sale of LyondellBasell's interest in Geosel. Third quarter 2016 included an $11 million benefit from the restructuring of Asian polypropylene joint ventures and the sale of Australian polypropylene assets. Olefin results decreased by approximately $15 million as higher feedstock prices led to declining ethylene margins. Combined polyolefin results increased by approximately $10 million with increased sales volumes partially offset by declining polyethylene spreads. Joint venture equity income was relatively unchanged.

Intermediates and Derivatives (I&D) – Our I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.

Table 4 - I&D Financial Overview
	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,
*Millions of U.S. dollars*	2017	2017	2016	2017	2016
Operating income	$329	$270	$240	$868	$822
EBITDA	402	339	304	1,080	1,027

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA increased $63 million versus the second quarter 2017. PO and derivatives results increased approximately $25 million. Volumes improved resulting from the completion of planned maintenance at our plant in Botlek, The Netherlands in the second quarter which were partially offset by production losses in the third quarter due to Hurricane Harvey. Intermediate chemicals results increased approximately $15 million, primarily due to a 2 cent per pound improvement in styrene margins. Volumes declined for most intermediate chemicals except for an increase in methanol volumes due to the completion of second quarter planned maintenance. Oxyfuels and related products results increased by approximately $25 million primarily due to increased volumes from the completion of planned maintenance at Botlek. Joint venture equity income increased by $4 million.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased $98 million versus the third quarter 2016. PO and derivatives results increased by approximately $35 million as both margins and volumes improved. Intermediate chemicals results increased by approximately $85 million primarily due to margin improvements in styrene, methanol and ethylene glycol which more than offset volume declines related to Hurricane Harvey. Oxyfuels and related products results declined by approximately $20 million primarily due to hurricane related production losses. Joint venture equity income was relatively unchanged.

Refining – The primary products of this segment include gasoline and distillates, including diesel fuel, heating oil and jet fuel.

Table 5 - Refining Financial Overview
	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,
*Millions of U.S. dollars*	2017	2017	2016	2017	2016
Operating loss	$10	($21)	($56)	($81)	($139)
EBITDA	58	25	(10)	53	(9)

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA increased $33 million versus the second quarter 2017. The Houston refinery operated at 240,000 barrels per day, 25,000 barrels per day less than the prior quarter due to reduced rates as a result of Hurricane Harvey. A $2.27 increase in the Maya 2-1-1 to $21.81 was partially offset by unfavorable heavy to light differentials on by-product margins.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased $68 million versus the third quarter 2016. Third quarter 2017 throughput increased by 31,000 barrels per day with operational disruptions in the third quarter of 2016 exceeding reduced rates in the third quarter 2017 due to Hurricane Harvey. A $2.83 increase in the Maya 2-1-1 to $21.81 was partially offset by unfavorable heavy to light differentials on by-product margins.

Technology Segment – Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.

Table 6 - Technology Financial Overview
	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,
*Millions of U.S. dollars*	2017	2017	2016	2017	2016
Operating income	$36	$39	$35	$125	$170
EBITDA	47	48	45	155	201

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA decreased by $1 million versus the second quarter 2017.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased by $2 million versus the third quarter 2016.

Capital Spending and Cash Balances

Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $318 million during the third quarter 2017. Our cash and liquid investment balance was $3.1 billion at September 30, 2017. We repurchased 3.1 million shares during the third quarter 2017, leaving 394 million common shares outstanding as of September 30, 2017. The company paid dividends of $356 million during the third quarter of 2017.

CONFERENCE CALL
LyondellBasell will host a conference call October 27 at 11 a.m. EDT. Participants on the call will include Chief Executive Officer Bob Patel, Executive Vice President and Chief Financial Officer Thomas Aebischer and Director of Investor Relations David Kinney.

The toll-free dial-in number in the U.S. is 800-475-8402. 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 6934553.

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

A replay of the call will be available from 2 p.m. EDT October 27 until November 27 at 11:59 p.m. EST. The replay dial-in numbers are 866-448-2572 (U.S.) and 203-369-1168 (international). The pass code for each is 2526.

ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin and polypropylene technologies. More information about LyondellBasell can be found at www.lyondellbasell.com.

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, 2016, 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.

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.

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 an 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 ^(a)


				2016										2017
	(Millions of U.S. dollars)			Q1		Q2		Q3		Q4		Total		Q1		Q2		Q3		YTD
	Sales and other operating revenues:
		Olefins & Polyolefins - Americas		$	2,115	$	2,211	$	2,342	$	2,409	$	9,077	$	2,604	$	2,547	$	2,449	$	7,600
		Olefins & Polyolefins - EAI			2,578		2,721		2,634		2,646		10,579		3,024		3,008		3,152		9,184
		Intermediates & Derivatives			1,702		1,769		1,805		1,950		7,226		2,150		2,014		2,077		6,241
		Refining			955		1,289		1,330		1,561		5,135		1,353		1,713		1,670		4,736
		Technology			132		129		102		116		479		120		107		98		325
		Other/elims			(739)		(791)		(848)		(935)		(3,313)		(821)		(986)		(930)		(2,737)
			Continuing Operations	$	6,743	$	7,328	$	7,365	$	7,747	$	29,183	$	8,430	$	8,403	$	8,516	$	25,349
	Operating income (loss):
		Olefins & Polyolefins - Americas		$	707	$	646	$	582	$	458	$	2,393	$	559	$	738	$	497	$	1,794
		Olefins & Polyolefins - EAI			358		423		447		266		1,494		401		549		460		1,410
		Intermediates & Derivatives			255		327		240		236		1,058		269		270		329		868
		Refining			(30)		(53)		(56)		40		(99)		(70)		(21)		10		(81)
		Technology			73		62		35		51		221		50		39		36		125
		Other			(3)		(2)		1		(3)		(7)		1		2		- -		3
			Continuing Operations	$	1,360	$	1,403	$	1,249	$	1,048	$	5,060	$	1,210	$	1,577	$	1,332	$	4,119
	Depreciation and amortization:
		Olefins & Polyolefins - Americas		$	90	$	88	$	87	$	97	$	362	$	118	$	107	$	105	$	330
		Olefins & Polyolefins - EAI			55		58		58		58		229		59		58		60		177
		Intermediates & Derivatives			70		69		62		68		269		69		68		69		206
		Refining			43		40		40		40		163		40		44		49		133
		Technology			10		11		10		10		41		10		9		11		30
			Continuing Operations	$	268	$	266	$	257	$	273	$	1,064	$	296	$	286	$	294	$	876
	EBITDA: ^(b)
		Olefins & Polyolefins - Americas		$	878	$	754	$	682	$	563	$	2,877	$	723	$	859	$	616	$	2,198
		Olefins & Polyolefins - EAI			509		576		584		398		2,067		529		699		698		1,926
		Intermediates & Derivatives			326		397		304		306		1,333		339		339		402		1,080
		Refining			14		(13)		(10)		81		72		(30)		25		58		53
		Technology			83		73		45		61		262		60		48		47		155
		Other			(3)		(4)		1		(3)		(9)		(4)		- -		- -		(4)
			Continuing Operations	$	1,807	$	1,783	$	1,606	$	1,406	$	6,602	$	1,617	$	1,970	$	1,821	$	5,408
	Capital, turnarounds and IT deferred spending:
		Olefins & Polyolefins - Americas		$	303	$	339	$	384	$	350	$	1,376	$	202	$	179	$	165	$	546
		Olefins & Polyolefins - EAI			81		60		48		72		261		47		32		44		123
		Intermediates & Derivatives			76		80		90		87		333		77		107		79		263
		Refining			57		71		51		45		224		84		79		21		184
		Technology			6		9		9		12		36		7		6		8		21
		Other			4		4		4		1		13		4		4		1		9
			Continuing Operations	$	527	$	563	$	586	$	567	$	2,243	$	421	$	407	$	318	$	1,146

(a)

EBITDA for the first quarter of 2016 includes a pre-tax lower of cost or market inventory valuation ("LCM") charge of $68 million and a $78 million pre-tax-gain on the sale of our wholly owned Argentine subsidiary. Second quarter 2016 EBITDA includes a pre-tax LCM benefit of $68 million for the reversal of the first quarter 2016 LCM adjustment due to price recoveries during the period. Fourth quarter 2016 EBITDA also includes a pre-tax LCM charge of $29 million.

(b)

See Table 8 for EBITDA calculation.

Table 8 - EBITDA Calculation


			2016										2017
	(Millions of U.S. dollars)		Q1		Q2		Q3		Q4		Total		Q1		Q2		Q3		YTD

	Net income^(a)		$	1,030	$	1,091	$	953	$	763	$	3,837	$	797	$	1,130	$	1,056	$	2,983
	Loss from discontinued operations, net of tax			- -		1		2		7		10		8		4		2		14
	Income from continuing operations^(a)			1,030		1,092		955		770		3,847		805		1,134		1,058		2,997
		Provision for income taxes		432		346		326		282		1,386		315		459		380		1,154
		Depreciation and amortization		268		266		257		273		1,064		296		286		294		876
		Interest expense, net^(b)		77		79		68		81		305		201		91		89		381
	EBITDA^(c)		$	1,807	$	1,783	$	1,606	$	1,406	$	6,602	$	1,617	$	1,970	$	1,821	$	5,408

(a)

The first quarter of 2016 includes an after-tax LCM charge of $47 million and a $78 million after-tax gain related to the sale of our wholly owned Argentine subsidiary. The second quarter of 2016 includes an after-tax benefit of $47 million for the reversal of the first quarter 2016 LCM adjustment due to price recoveries during the period. Fourth quarter 2016 also includes an $18 million after-tax LCM charge. The third quarter of 2017 includes an after-tax gain of $103 million on the sale of our interest in Geosel.

(b)

Includes pre-tax charges totaling $113 million in the first quarter of 2017 related to the repayment of $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019.

(c)

The first quarter of 2016 includes a pre-tax LCM charge of $68 million and a pre-tax gain of $78 million on the sale of our wholly owned Argentine subsidiary. Second quarter 2016 EBITDA includes a pre-tax LCM benefit of $68 million for the reversal of the first quarter 2016 LCM adjustment. Fourth quarter 2016 also includes a pre-tax LCM charge of $29 million. Third quarter 2017 EBITDA includes a pre-tax gain of $108 million on the sale of our interest in Geosel.

Table 9 - Selected Segment Operating Information


				2016					2017
				Q1	Q2	Q3	Q4	Total	Q1	Q2	Q3	YTD
Olefins and Polyolefins - Americas
	Volumes (million pounds)
		Ethylene produced		2,392	1,899	1,939	2,173	8,403	2,486	2,606	2,088	7,180
		Propylene produced		832	748	575	660	2,815	597	821	671	2,089
		Polyethylene sold		1,554	1,426	1,517	1,485	5,982	1,533	1,404	1,454	4,391
		Polypropylene sold		612	582	659	623	2,476	644	634	624	1,902
	Benchmark Market Prices
		West Texas Intermediate crude oil (USD per barrel)		33.63	46.01	44.94	49.29	43.56	51.78	48.15	48.20	49.36
		Light Louisiana Sweet ("LLS") crude oil (USD per barrel)		35.34	47.39	46.52	50.60	45.03	53.39	50.17	51.67	51.73
		Houston Ship Channel natural gas (USD per million BTUs)		1.93	2.06	2.79	3.01	2.45	2.96	3.14	2.92	3.01
		U.S. weighted average cost of ethylene production (cents/pound)		9.8	12.0	10.6	14.3	11.7	11.8	12.5	16.1	13.5
		U.S. ethylene (cents/pound)		26.7	30.3	33.0	32.7	30.7	33.1	31.9	31.9	32.3
		U.S. polyethylene [high density] (cents/pound)		52.3	59.0	60.7	58.3	57.6	57.3	59.0	60.7	59.0
		U.S. propylene (cents/pound)		31.0	32.7	37.8	36.2	34.4	47.2	41.0	41.7	43.3
		U.S. polypropylene [homopolymer] (cents/pound)		67.8	61.7	60.2	55.8	61.4	66.2	59.0	60.2	61.8

Olefins and Polyolefins - Europe, Asia, International
	Volumes (million pounds)
		Ethylene produced		950	941	1,066	946	3,903	1,022	1,069	1,046	3,137
		Propylene produced		555	577	649	563	2,344	598	632	620	1,850
		Polyethylene sold		1,434	1,386	1,315	1,330	5,465	1,421	1,370	1,525	4,316
		Polypropylene sold		1,773	1,617	1,509	1,582	6,481	1,714	1,530	1,738	4,982
	Benchmark Market Prices (€0.01 per pound)
		Western Europe weighted average cost of ethylene production		16.3	21.2	17.9	23.8	19.8	22.7	17.6	18.9	19.7
		Western Europe ethylene		38.4	41.1	42.3	43.1	41.2	46.2	47.1	44.2	45.8
		Western Europe polyethylene [high density]		55.4	57.6	55.7	55.2	56.0	58.2	59.5	56.6	58.1
		Western Europe propylene		26.3	28.8	30.7	33.3	29.8	37.0	39.3	36.4	37.6
		Western Europe polypropylene [homopolymer]		46.5	49.5	49.5	51.7	49.3	56.3	60.1	57.4	58.0

Intermediates and Derivatives
	Volumes (million pounds unless otherwise indicated)
		Propylene oxide and derivatives		793	743	752	749	3,037	786	748	793	2,327
		Intermediate Chemicals:
			Ethylene oxide and derivatives	301	233	224	329	1,087	292	297	275	864
			Styrene monomer	917	933	911	933	3,694	992	924	845	2,761
			Acetyls	702	821	751	776	3,050	825	672	715	2,212
		Oxyfuels and Related Products:
			TBA Intermediates	415	391	410	361	1,577	383	332	359	1,074
			MTBE/ETBE (million gallons)	270	278	298	264	1,110	239	263	289	791
	Benchmark Market Margins (cents per gallon)
		MTBE - Northwest Europe		44.4	78.7	55.3	50.6	57.2	49.5	67.3	59.8	58.6

Refining
	Volumes (thousands of barrels per day)
		Heavy crude oil processing rate		186	183	209	228	201	193	265	240	233
	Benchmark Market Margins
		Light crude oil - 2-1-1		8.67	11.52	11.46	11.20	10.73	11.86	13.26	16.71	13.94
		Light crude oil - Maya differential		9.19	9.55	7.52	7.80	8.51	8.78	6.28	5.10	6.71


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


				2016										2017
	(Millions of U.S. dollars)			Q1		Q2		Q3		Q4		Total		Q1		Q2		Q3		YTD

	Sales and other operating revenues			$	6,743	$	7,328	$	7,365	$	7,747	$	29,183	$	8,430	$	8,403	$	8,516	$	25,349
	Cost of sales^(a)				5,166		5,702		5,903		6,420		23,191		6,991		6,601		6,939		20,531
	Selling, general and administrative expenses				193		199		188		253		833		204		200		218		622
	Research and development expenses				24		24		25		26		99		25		25		27		77
		Operating income^(a)			1,360		1,403		1,249		1,048		5,060		1,210		1,577		1,332		4,119
	Income from equity investments				91		117		81		78		367		81		78		81		240
	Interest expense, net^(b)				(77)		(79)		(68)		(81)		(305)		(201)		(91)		(89)		(381)
	Other income (expense), net^(c)				88		(3)		19		7		111		30		29		114		173
		Income from continuing operations before income taxes^{(a) (b) (c)}			1,462		1,438		1,281		1,052		5,233		1,120		1,593		1,438		4,151
	Provision for income taxes				432		346		326		282		1,386		315		459		380		1,154
		Income from continuing operations^(d)			1,030		1,092		955		770		3,847		805		1,134		1,058		2,997
	Loss from discontinued operations, net of tax				- -		(1)		(2)		(7)		(10)		(8)		(4)		(2)		(14)
			Net income^(d)		1,030		1,091		953		763		3,837		797		1,130		1,056		2,983
	Net (income) loss attributable to non-controlling interests				- -		- -		(1)		- -		(1)		- -		1		1		2
			Net income attributable to the Company shareholders^(d)	$	1,030	$	1,091	$	952	$	763	$	3,836	$	797	$	1,131	$	1,057	$	2,985

(a)

Amounts presented herein include pre-tax LCM charges of $68 million and $29 million in the first and fourth quarters of 2016, respectively. A pre-tax benefit of
$68 million in the second quarter of 2016 reflects the reversal of the first quarter 2016 LCM adjustment due to price recoveries during the period.

(b)

Includes pre-tax charges totaling $113 million in the first quarter of 2017 related to the repayment of $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019.

(c)

Includes a $78 million gain in the first quarter of 2016 on the sale of our wholly owned Argentine subsidiary; a pre-tax gain of $31 million in the first quarter of 2017 on the sale of our Lake Charles, Louisiana site currently used as a logistics terminal; and a pre-tax gain of $108 million in the third quarter of 2017 on the sale of our interest in Geosel.

(d)

Amounts presented herein include after-tax LCM charges of $47 million and $18 million in the first and fourth quarters of 2016, respectively. The second quarter of 2016 includes an after-tax benefit of $47 million for the partial reversal of the first quarter 2016 LCM adjustment resulting from price recoveries during the period. The first quarter of 2016 also includes a $78 million gain on the sale of our wholly owned Argentine subsidiary. The first quarter of 2017 includes after-tax charges totaling $106 million related to the repayment of $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019. The third quarter of 2017 includes a $103 million after-tax gain for sale of our interest in Geosel.

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


		2016										2017
										Annual
Millions of U.S. dollars (except share data)		Q1		Q2		Q3		Q4		Impact		Q1		Q2		Q3		YTD
Pretax charges (benefits):
	Charges and premiums related to repayment of debt	$	- -	$	- -	$	- -	$	- -	$	- -	$	113	$	- -	$	- -	$	113
	Out of period tax adjustment		- -		- -		- -		61		74		- -		- -		- -		- -
	Gain on sale of wholly owned subsidiary		(78)		- -		- -		- -		(78)		- -		- -		- -		- -
	Lower of cost or market inventory adjustment		68		(68)		- -		29		29		- -		- -		- -		- -
	Pension settlement charge		- -		- -		- -		58		58		- -		- -		- -		- -
	Gain on sale of Geosel		- -		- -		- -		- -		- -		- -		- -		(108)		(108)
Total pretax charges (benefits)			(10)		(68)		- -		148		83		113		- -		(108)		5
Provision for (benefit from) income tax related to these items			(21)		21		- -		(32)		(32)		(7)		- -		5		(2)
After-tax effect of net charges (benefits)		$	(31)	$	(47)	$	- -	$	116	$	51	$	106	$	- -	$	(103)	$	3
Effect on diluted earnings per share		$	0.07	$	0.11	$	- -	$	(0.29)	$	(0.12)	$	(0.26)	$	- -	$	0.26	$	(0.01)

Table 12 - Unaudited Cash Flow Information


		2016										2017
	(Millions of U.S. dollars)	Q1		Q2		Q3		Q4		Total		Q1			Q2		Q3		YTD

	Net cash provided by operating activities^(a)	$	1,300	$	1,261	$	1,332	$	1,713	$	5,606	$	678	$	1,560	$	1,486	$	3,724

	Net cash used in investing activities^(b)		(600)		(471)		(459)		(771)		(2,301)		(541)		(513)		(200)		(1,254)

	Net cash used in financing activities ^(a)		(333)		(1,039)		(1,195)		(782)		(3,349)		(537)		(822)		(832)		(2,191)

(a)

In the second quarter of 2017, the early adoption of ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments resulted in the reclassification of cash flows related to debt extinguishment costs incurred in the first quarter of 2017 from operating to financing activities cash flows.

(b)

Also in the second quarter of 2017, the early retrospective adoption of ASU 2016-18, Statement of Cash Flows: Restricted Cash requires the inclusion of restricted cash and restricted cash equivalents in the cash and cash equivalents balances in our Statements of Cash Flows.

Table 13 - Unaudited Balance Sheet Information


			March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,
	(Millions of U.S. dollars)		2016		2016		2016		2016		2017		2017		2017

	Cash and cash equivalents		$	1,318	$	1,060	$	740	$	875	$	485	$	734	$	1,204
	Restricted cash			4		4		4		3		1		6		7
	Short-term investments			1,332		1,023		1,090		1,147		1,176		1,278		1,295
	Accounts receivable, net			2,683		2,806		2,852		2,842		3,292		3,086		3,275
	Inventories			3,978		4,009		4,015		3,809		3,875		4,007		4,177
	Prepaid expenses and other current assets			1,009		1,081		852		923		852		964		1,104
		Total current assets		10,324		9,983		9,553		9,599		9,681		10,075		11,062
	Property, plant and equipment, net			9,373		9,681		10,057		10,137		10,361		10,551		10,737
	Investments and long-term receivables:
		Investment in PO joint ventures		398		390		399		415		409		423		428
		Equity investments		1,734		1,610		1,681		1,575		1,672		1,595		1,644
		Other investments and long-term receivables		18		18		17		20		20		18		19
	Goodwill			548		542		543		528		531		559		570
	Intangible assets, net			618		588		562		550		517		499		480
	Other assets			559		623		607		618		577		398		303
		Total assets	$	23,572	$	23,435	$	23,419	$	23,442	$	23,768	$	24,118	$	25,243

	Current maturities of long-term debt		$	4	$	4	$	3	$	2	$	2	$	2	$	3
	Short-term debt			594		616		621		594		611		561		381
	Accounts payable			2,243		2,357		2,329		2,529		2,627		2,317		2,735
	Accrued liabilities			1,600		1,374		1,357		1,415		1,139		1,251		1,493
		Total current liabilities		4,441		4,351		4,310		4,540		4,379		4,131		4,612
	Long-term debt			8,504		8,485		8,464		8,385		8,419		8,496		8,531
	Other liabilities			2,125		2,143		2,151		2,113		2,130		2,253		2,326
	Deferred income taxes			2,134		2,149		2,387		2,331		2,353		2,370		2,447
	Stockholders' equity			6,344		6,283		6,082		6,048		6,462		6,866		7,326
	Non-controlling interests			24		24		25		25		25		2		1
		Total liabilities and stockholders' equity	$	23,572	$	23,435	$	23,419	$	23,442	$	23,768	$	24,118	$	25,243