43
Pat Quarles Senior Vice President Intermediates and Derivatives September 2012 Bank of America Merrill Lynch 2012 Industrials and Materials Conference
Pat Quarles Senior Vice President Intermediates and Derivatives September 2012
Bank of America Merrill Lynch 2012 Industrials and Materials Conference
lyondellbasell.com
Cautionary Statement
The information in this presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and results may differ materially from what is expressed or forecast in such forward‐looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ from forward-looking statements include, but are not limited to, availability, cost and price volatility of raw materials and utilities; supply/demand balances; industry production capacities and operating rates; uncertainties associated with worldwide economies; legal, tax and environmental proceedings; cyclical nature of the chemical and refining industries; operating interruptions; current and potential governmental regulatory actions; terrorist acts; international political unrest; competitive products and pricing; technological developments; the ability to comply with the terms of our credit facilities and other financing arrangements; the ability to implement business strategies; and other factors affecting our business generally as set forth in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2011, 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.
This presentation contains time sensitive information that is accurate only as of the date hereof. Information contained in this presentation is unaudited and is subject to change. We undertake no obligation to update the information presented herein except as required by law.
2
lyondellbasell.com
Information Related to Financial Measures
We have included EBITDA in this presentation, which is a non-GAAP measure, as we believe that EBITDA is a measure commonly used by investors. However, 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. For purposes of this presentation, EBITDA means earnings before interest, taxes, depreciation and amortization, as adjusted for other items management does not believe are indicative of the Company’s underlying results of operations such as impairment charges, reorganization items, the effect of mark-to-market accounting on our warrants. EBITDA also includes dividends from joint ventures. 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. See Table 9 of our accompanying earnings release for reconciliations of EBITDA to net income. While we also believe that net debt is a measure commonly used by investors, net debt, 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. For purposes of this presentation, net debt means short-term debt plus current maturities of long-term debt plus long-term debt minus cash and cash equivalents and minus restricted cash.
3
lyondellbasell.com
0
20
40
60
80
$100
BASF Dow LYB SABIC DuPont
O&P Americas38%
O&P EAI16%
Intermediates & Derivatives
25%
Refining17%
Technology4%
O&P Americas46%
O&P EAI15%
Intermediates & Derivatives
29%
Refining7%
Technology3%
World-Class Scale With Leading Market Positions
$3.0 billion Notes: 2012 YTD EBITDA includes a $71 million LCM inventory valuation adjustment. Source: Capital IQ and LYB.
2011 Revenues
1H 2012 EBITDA
($ in billions)
Channelview, Texas
4
2011 EBITDA
$5.6 billion
lyondellbasell.com
• Maya 2-1-1 spread
• Cost improvements
• Proprietary Technology
• Global durable goods demand
• US Natural gas pricing; Gasoline price vs. natural gas cost
• Differentiated products and JV’s
• Restructuring
• Cyclical Upside
• US natural gas/ “Ethane Advantage”
• Cyclical Upside
Refining
Intermediates & Derivatives
Olefins & Polyolefins - EAI
Olefins & Polyolefins - Americas
Key Drivers Of Business Segment Performance
5
Technology • Strong catalyst sales
• Excellent licensing position
lyondellbasell.com
• Crude oil price increases have been as much a factor as have US natural gas price declines
• Raw material factors define regional competitiveness
Crude Oil vs. Natural Gas Price Global Capacity Cost Curve
Source: IHS Chemical as of August 2012.
O&P Americas: Natural Gas vs. Crude is Currently the Dominant Factor
6
67%33%
Cos
t of E
thyl
ene
Prod
uctio
n
Global Naphtha Cracking
40-60 ¢/lb
Middle East
Ethane Crackers
5-15 ¢/lb
N. America
Ethane Crackers
15-20 ¢/lb
0
30
60
90
120
$150
0
5
10
15
20
$25
Dec-08 Dec-09 Dec-10 Dec-11
$ / Bbl
$ / M
MBT
U
Crude Oil
Natural Gas
Delta
lyondellbasell.com
0
20
40
60
80
NE AsiaNaphtha
U.S. Naphtha U.S. Propane U.S. Ethane
2Q11 1Q12 2Q12
Indexed Commodity Prices Cost of Ethylene Production
Source: IHS Chemical.
7
US NGL Costs Have had a Downward Trend
The US ethylene production cost advantage has expanded as NGL price declines have outpaced the recent crude oil price decline
(cents/lb)
40
60
80
100
120
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12
Brent Ethane Propane Butane
lyondellbasell.com
Ethane and Propane Production and Inventories at Historic Highs
U.S. Ethane Production U.S. Propane Production
2007 - 2011 Range 2011 2012
U.S. Ethane Inventory U.S. Propane Inventory
Source: EIA.
8
400
600
800
1,000
1,200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MBP
D
400
500
600
700
800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MBP
D
0
10
20
30
40
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MM
Bbls
0
20
40
60
80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MM
Bbl
s
lyondellbasell.com
Ethane Production Capacity is Forecast to Outpace Olefins Cracking Capacity Growth
9
US Ethane Production US Ethane Demand
Infrastructure projects should bring NGLs to the Gulf Coast and help ensure supply security for petrochemical growth projects
Source: EAI, Goldman Sachs, company announcements, LYB estimates.
0
500
1,000
1,500
2,000
1H'12 E 2H'12 E 1H'13 E 2H'13 E 1H'14 E
Thou
sand
b/d
Ethane Factionation AdditionsRecent Max Production
0
500
1,000
1,500
2,000
1H'12E 2H'12E 1H'13E 2H'13E 1H'14E
Thou
sand
b/d
Base Additions
lyondellbasell.com
Growth and Efficiency Projects
Increase Ethane Capability
Expand La Porte Cracker
Scope
Expand Flex Capacity
500 MM Lbs ethylene
Investment ($ million)
Timing (year)
Expected Value ($ million / year)
800+ MM Lbs ethylene
100 MM Lbs ethylene /
polyethylene
Midwest Debottleneck
500 MM Lbs propylene
~$25
~$350
~$30
~$125
2012
2014
2013
2014
$100 -$150
$150 - $250
$20 - $30
$75 - $125
$350 – $550 million / yr(1) of additional EBITDA for ~$500 million of investment (1) Based on historic average IHS Chemical pricing.
10
lyondellbasell.com
70%
75%
80%
85%
90%
95%
Pre-Shale Post- Shale
US EU
----
300
600
900
1,200
1,500
2012 2013 2014 2015
U.S. LYB
La Porte Olefins Expansion Project
11
Size: 800+ million pound ethylene increase Timing: 2014 Cost: ~$350 million Expected EBITDA Contribution: ~ $150 - $250 million/yr
La Porte, Texas Source: LYB,IHS Chemical July 2012
Ethylene Nameplate Operating Rate
U.S. Ethylene Capacity Additions
(MMlbs)
lyondellbasell.com
At 2010 / 2011 Operating Rates Global Naphtha Margins Have Been Near Trough Levels
Typical NE Asian Cycle Margins Northeast Asian Ethylene Margins
Source: IHS Chemical
• Asian margins have been weak, Asian prices set the global price • Significant cyclical upside
0
5
10
15
20
25
Trough Mean Peak
cent
s / p
ound
12
40%
50%
60%
70%
80%
90%
100%
100
150
200
250
300
350
400
450
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Effective O
perating Rate (E
OR
)
Bill
ions
of P
ound
s
DemandCapacity
World Effective Operating Rate @ 95% On-Stream
lyondellbasell.com
O&P EAI: Earnings Drivers
• Differentiated businesses provide stable profitability • Commodities provide cyclical upside
• High cost on global basis EU Olefins
• Specialty polyolefins • High value in use
Joint Ventures • Feedstock advantage • LYB technology deployment
Catalloy & PB-1
PP Compounding • Automotive demand • Technical competency critical
EU Polyethylene EU Polypropylene
• Large consuming market • Cyclical profit
Base Value Streams Cyclical Upside
O&P EAI EBITDA Scenarios
EU Butadiene • Light cracking in US • Europe, net exporter of C4’s
0.0
0.5
1.0
1.5
2.0
Trough Mid-Cycle Peak 2011
EBIT
DA
Inde
xed,
Mid
-Cyc
le =
1.0
Stable Base Cyclical
13
lyondellbasell.com
0
400
800
1200
1600
2000-2009 2010-2012 YTD
O&P EAI Butadiene Expansion Project
(1) Source: IHS. Data based on historic average IHS Chemical pricing.
14
Size: 70KT Butadiene increase Timing: 2013 Cost: ~$100 million Expected EBITDA Contribution(1): ~$50 - $75 million/yr
NWE Butadiene – Naphtha Spread (USD/MT)
Butadiene/Ethylene Production Yield
0%
3%
6%
9%
12%
15%
Ethane Light Naphtha
lyondellbasell.com
Capacity 75,000 bbls/day ETBE & MTBE
Intermediates & Derivatives A Robust and Diversified Portfolio
15
2012 LTM 6/30/12 Revenue $ 9.4billion 2012 LTM 6/30/12 EBITDA $ 1.5billion
High Low Market & Technology Profitability
Capacity(1): 2.6 billion lbs Propylene Oxide
Propylene Oxide &
Derivatives Capacity: 1.4 billion lbs High Purity Isobutylene
C4 Chemicals Capacity: 190 million gallons Methanol
1.2 billion lbs Acetic Acid
Acetyls Capacity: 0.8 billion lbs Ethylene Oxide
Ethylene Oxide & Derivatives
Capacity(1): 3.6 billion lbs Styrene Monomer
Styrene
Intermediates & Derivatives
(1) Includes pro-rata share of joint ventures.
Oxyfuels
lyondellbasell.com 16
Co-Products: Oxyfuels, Isobutylene and Styrene Acetyls
Ethylene Oxide & Derivatives
Globally Diversified End Uses
• Food packaging • Textiles • Coatings • Safety glass
• Surfactants • Antifreeze • Industrial coatings • Polyester
• Gasoline Blending • Lube & fuel additives • Tires • Polyester composites • Food packaging
• Home and auto cushioning • Insulation foams • Polyester composites • Coatings • Automotive parts • Spandex
Propylene Oxide & Derivatives
Note: LYB 2011 end-use (durable / non-durable) and revenues by region, %.
Durables Non-Durables
U.S. EU Asia
Durables Non-Durables
U.S. EU Asia
Durables Non-Durables
U.S. Asia
Durables Non-Durables
U.S. EU Asia
lyondellbasell.com
Drivers of Recent Profitability
17
PO & Derivatives
PO Co-products
Acetyls Ethylene Oxide &
Derivatives
Prof
itabi
lity
• Proprietary Technology
• Asia Economic growth
• Natural Gas pricing
• N. America production base
• Oil-Gas pricing spread
• Light feed cracking
• Mono-ethylene Glycol cyclical recovery
• Differentiated products demand (Ethers)
lyondellbasell.com
Propylene Oxide & Derivatives
TBA & Intermediates
Oxyfuels
Acetyls
Ethylene Oxide / Glycol
Styrene
I&D Wtd. Average
'05-'11E cycle average
Propylene Oxide & Derivatives
TBA & Intermediates
Oxyfuels
Acetyls
Ethylene Oxide / Glycol
I&D Wtd. Average
Styrene
Propylene Oxide &
Derivatives
TBA & Intermediates
Oxyfuels
Acetyls
Ethylene Oxide / Glycol
Styrene
Highly Profitable Balanced Portfolio
18
• Diverse product mix with average EBITDA profit margin of ~14% • Propylene Oxide is a consistent segment leader in profitability
Relative EBITDA Margin Range
(1) Based on 2011 revenues.
Revenue Contribution by Product(1)
0%
lyondellbasell.com
0
30
60
90
120
2009 2010 2011 2012 YTD
0
40
80
120
160
2009 2010 2011 2012 YTD
0
15
30
45
60
2009 2010 2011 2012 YTD
Ethylene MEG
0
10
20
30
40
2009 2010 2011 2012 YTD
19
PG RMM
N. America MeOH RMM
MTBE RMM
N. America MEG RMM
Strong Performance across Diverse Portfolio
(cents/gal) (cents/lb)
(cents/lb) (cents/gal)
Source: IHS, Chemdata
lyondellbasell.com
I&D Methanol Restart Project
Source: IHS. Supply reflects 2011 actual data.
20
Size: 780KT Channelview Re-start Timing: 2013 Cost: ~$150 million Expected EBITDA Contribution: ~ $200 million/yr
N. America Methanol Supply
Methanol Cost
0
40
80
120
160
2 4 6 8 10 12
MeO
H C
ash
Cost
(cpg
)
Natgas Price ($/MMBTU)
85% of N. America supply (~ 6000KT) - Imports
Imports
2012 Average Contract Price
Production
lyondellbasell.com
0 5 10 15
Global
Americas
Europe
Asia
2011E to 2016E CAGR %
GlycolsPolyols
Asia PO/TBA Project
21
PO& Derivatives Demand Growth
0
1
2
3
PropyleneOxide / TBA
Chlorohydrin PropyleneOxide /Styrene
Monomer
PropyleneOxide
Cumene
HydrogenPeroxide toPropylene
Oxide
Cas
h C
ost P
ositi
on
Technologies utilized by LYB to produce Propylene Oxide
Competitive Cost Position
Source: IHS, LYB internal sources.
Asia demand for durable goods + Gasoline Demand & clean fuel need + Competitive PO/TBA economics Joint feasibility study agreement with SINOPEC
lyondellbasell.com
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2011 EBITDA MethanolRestart
Asia PO/TBA Efficiency Near TermEarning
Potential
Intermediates and Derivatives: Highly Profitable Balanced Portfolio
Future benefit of ~ $300 - $350 million from growth / efficiency
High Return Growth and Earnings Potential
Source: Based on company estimates of propylene and propylene oxide prices. Methanol pricing based on IHS Chemical spread between oil and gas.
($ in millions)
22
lyondellbasell.com
$0
$200
$400
$600
$800
'10 '11 2012 ProForma
Returning Cash to Shareholders Through Dividends
• Interim dividend provides a strong yield
LYB Interim Dividend History Net Interest Expense Excluding Refinancing Premiums
Source: LYB estimates. (1) 2010 interest is for successor period (5/1 – 12/31/2010) on an annualized basis.
23
($ in millions)
(1) $0.00
$0.10
$0.20
$0.30
$0.40
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
lyondellbasell.com
Primarily Complete
Complete Q1
Implementing
Complete Q2
Operational and Financial Improvements
Houston Refinery Yield &
Throughput
Discontinue Berre Refinery
Operations
O&P - EAI Reorganization
& Improvements
Improve Capital Structure
Minimal investment for high return
Potential Pre-Tax
Earnings
$700 - $900 million per
year by 2013(1)
(1) Company estimate based on historic industry margins and costs.
24
lyondellbasell.com
Significant High-Return Growth Opportunities
Other Quick-Return Projects
Olefins Feedstock Flexibility
Olefins Debottlenecks
Co-Product Flexibility
Average payback period less than 2 years
Propylene Oxide JV
PP Compounding Growth
Methanol Restart
Projected Spending
$1,300 - $1,500
million
Potential Pre-Tax
Earnings
$800 - $1,000 million per year
by 2016(1)
(1) Company estimate based on historic industry margins and costs.
25
lyondellbasell.com
Industry Trends Provide Further Upside
Olefins Cycle
Ethane Supply / Demand
Refining Industry Rationalization &
Feedstock Flexibility
Potential Additional Pre-Tax Earnings
Through the Cycle
~$2 - $3 billion / year
26
lyondellbasell.com
2011 – 1H 2012 Reconciliation of EBITDA to Net Income
27
Table 9 - Reconciliation of EBITDA to Income from Continuing Operations 2011 2012 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 YTD Segment EBITDA: Olefins & Polyolefins - Americas $ 484 $ 577 $ 672 $ 407 $ 2,140 $ 598 $ 776 $ 1,374 Olefins & Polyolefins - Europe, Asia, International 329 273 247 45 894 101 335 436 Intermediates & Derivatives 321 419 417 235 1,392 418 455 873 Refining 190 293 427 67 977 48 161 209 Technology 91 42 45 36 214 57 49 106 Other 5 (11) (2) (24) (32) 6 (2) 4 Total EBITDA 1,420 1,593 1,806 766 5,585 1,228 1,774 3,002 Adjustments to EBITDA: Lower of cost or market inventory adjustment - - - - - - - - - - - - 71 71 Sale of precious metals - - (41) - - - - (41) - - - - - - Corporate restructurings - - 61 14 18 93 - - - - - - Environmental accruals - - 16 - - - - 16 - - - - - - Settlement related to Houston refinery crane incident - - - - - - (15) (15) - - - - - - Insurance settlement (34) - - - - - - (34) - - (100) (100) Total Adjusted EBITDA 1,386 1,629 1,820 769 5,604 1,228 1,745 2,973 Add: Income from equity investments 58 73 52 33 216 46 27 73 Deduct: Adjustments to EBITDA 34 (36) (14) (3) (19) - - 29 29 Depreciation and amortization (215) (224) (237) (255) (931) (237) (244) (481) Impairment charges - - (4) (19) - - (23) (22) - - (22) Asset retirement obligation - - - - (10) - - (10) - - - - - - Reorganization items (2) (28) - - (15) (45) 5 (1) 4 Interest expense, net (155) (164) (145) (542) (1,006) (95) (409) (504) Joint venture dividends received (96) (11) (55) (44) (206) (14) (73) (87) Provision for income taxes (263) (388) (506) 98 (1,059) (301) (306) (607) Non-controlling interests (3) (1) - - (3) (7) (1) (2) (3) Fair value change in warrants (59) 6 22 (6) (37) (10) - - (10) Other (3) (1) 3 (5) (6) (5) 2 (3) Income from continuing operations 682 851 911 27 2,471 594 768 1,362 Adjustments to EBITDA (34) 36 14 3 19 - - (29) (29) Premiums and charges on early repayment of debt - - 12 - - 431 443 - - 329 329 Reorganization items 2 28 - - 15 45 (5) - - (5) Asset retirement obligation - - - - 10 - - 10 - - - - - - Fair value change in warrants 59 (6) (22) 6 37 10 - - 10 Impairment charges - - 4 19 - - 23 22 - - 22 Tax impact of net income (loss) adjustments 11 (21) (5) (154) (169) (5) (109) (114) Adjusted income from continuing operations $ 720 $ 904 $ 927 $ 328 $ 2,879 $ 616 $ 959 $ 1,575 Earnings (loss) per share: Diluted earnings per share – continuing operations $ 1.19 $ 1.46 $ 1.54 $ 0.05 $ 4.32 $ 1.03 $ 1.33 $ 2.36 Adjustments to continuing operations 0.07 0.09 0.03 0.52 0.69 0.04 0.32 0.36 Adjusted diluted earnings per share $ 1.26 $ 1.55 $ 1.57 $ 0.57 $ 5.01 $ 1.07 $ 1.65 $ 2.72 Source: Second Quarter 2012 Earnings Release
lyondellbasell.com
Back-up
28
lyondellbasell.com
Jim Gallogly, Chief Executive Officer Karyn Ovelmen, Chief Financial Officer Sergey Vasnetsov, SVP - Strategic Planning and Transactions Doug Pike, VP - Investor Relations July 27, 2012
Second-Quarter 2012 Earnings
lyondellbasell.com
Cautionary Statement
The information in this presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and results may differ materially from what is expressed or forecast in such forward‐looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ from forward-looking statements include, but are not limited to, availability, cost and price volatility of raw materials and utilities; supply/demand balances; industry production capacities and operating rates; uncertainties associated with worldwide economies; legal, tax and environmental proceedings; cyclical nature of the chemical and refining industries; operating interruptions; current and potential governmental regulatory actions; terrorist acts; international political unrest; competitive products and pricing; technological developments; the ability to comply with the terms of our credit facilities and other financing arrangements; the ability to implement business strategies; and other factors affecting our business generally as set forth in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2011, 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.
This presentation contains time sensitive information that is accurate only as of the date hereof. Information contained in this presentation is unaudited and is subject to change. We undertake no obligation to update the information presented herein except as required by law.
30
lyondellbasell.com
Information Related to Financial Measures
We have included EBITDA in this presentation, which is a non-GAAP measure, as we believe that EBITDA is a measure commonly used by investors. However, 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. For purposes of this presentation, EBITDA means earnings before interest, taxes, depreciation and amortization, as adjusted for other items management does not believe are indicative of the Company’s underlying results of operations such as impairment charges, reorganization items, the effect of mark-to-market accounting on our warrants. EBITDA also includes dividends from joint ventures. 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. See Table 9 of our accompanying earnings release for reconciliations of EBITDA to net income. While we also believe that net debt is a measure commonly used by investors, net debt, 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. For purposes of this presentation, net debt means short-term debt plus current maturities of long-term debt plus long-term debt minus cash and cash equivalents and minus restricted cash.
31
lyondellbasell.com
500
1,000
1,500
$2,000
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
Highlights
Quarterly EBITDA
Quarterly EBITDA increase of 44% from 1Q’12
($ in millions)
32
($ in millions, except per share data) (1) 2Q'12 1Q'12 2Q'11
EBITDA $1,774 $1,228 $1,593
Income from Continuing Operations $768 $594 $851
Diluted Earnings ($ / share) from Continuing Operations $1.33 $1.03 $1.46
Net Debt / LTM EBITDA 0.4x 0.4x NA
(1) EBITDA, Income and EPS for the second quarter 2012 reflect a $71million Lower of Cost or Market inventory valuation adjustment charge. Discontinued operations had no impact on the second quarter 2012 earnings.
lyondellbasell.com
LyondellBasell Safety Performance
• Continued good safety results • Significant first half 2012 contractor
activity related to maintenance turnarounds
Injuries per 200,000 Hours Worked(1)
1) Includes employees and contractors. YTD as of June 2012.
33
0.0
0.1
0.2
0.3
0.4
0.5
2009 2010 2011 2012 YTD
lyondellbasell.com
500
1,000
1,500
2,000
2,500
$3,000
Olefins &Polyolefins -
Americas
Olefins &Polyolefins -
EAI
Intermediates& Derivatives
Refining Technology
150
300
450
600
750
$900
Olefins &Polyolefins -
Americas
Olefins &Polyolefins -
EAI
Intermediates& Derivatives
Refining Technology
June 2012 LTM EBITDA
LTM June EBITDA(1) $5,574 million
LTM Operating Income
$4,321 million
Q2’12 EBITDA(1) $1,774 million
Q2’12 Operating Income
$1,449 million
Second-Quarter 2012 and Last-Twelve-Months (LTM) Segment EBITDA
Second-Quarter 2012 EBITDA ($ in millions) ($ in millions)
34
1) Shaded area reflects add back of $71 million Lower of Cost or Market inventory valuation adjustment charge in O&P Americas
lyondellbasell.com
$4,937
$1,964
0
2,500
5,000
7,500
$10,000
Q3'11Begin.Cash
Balance
CF fromOperations
excl.WorkingCapital
WorkingCapital
Changes
Capex Dividends Net DebtRepayment
Other Q2'12EndingCash
Balance
$1,679
$1,964
0
750
1,500
2,250
$3,000
Q2'12Beginning
CashBalance
CF fromOperations
excl.WorkingCapital
WorkingCapital
Changes
Capex Dividends Net DebtRepayment
Other Q2'12EndingCash
Balance
Cash Flow
1) Beginning and ending cash balance includes cash, cash equivalents and restricted cash. 2) Includes inventories, accounts payable and accounts receivable. 3) Includes capital and maintenance turnaround spending.
(3) (2) (1)
($ in millions)
(2) (1)
Second-Quarter 2012 LTM June 2012
(3) (1)
35
(1)
lyondellbasell.com
Working Capital and Key Financials Statistics
Snapshot at June 30, 2012 Liquidity: $4.4 billion
Debt: $4.4 billion Cash: $2.0 billion
Net Debt/LTM EBITDA: 0.4x
1) Figures depicted represent end of quarter balances.
($ in billions)
Working Capital(1) Key Statistics
36
($6)
($4)
($2)
$0
$2
$4
$6
$8
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
Total WC Inventory AR AP
lyondellbasell.com
(10)
0
10
20
30
40
50
Ethane Margin Naphtha Margin HDPE Margin Ethylene/HDPE Chain
Olefins & Polyolefins - Americas Highlights and Business Drivers - 2Q’12
U.S. Olefins • Ethylene price down 6¢/lb • Cost of Ethylene down 13¢/lb • ~85% of ethylene from NGLs • Hurricane Ike insurance settlement • Channelview turnaround completed
Polyethylene • Spread up 3¢/lb
Polypropylene (includes Catalloy) • Modest margin improvement
Ethylene Chain Margins (per IHS)
EBITDA(1) Performance vs. 1Q’12
Polypropylene Margins (per IHS)
EBITDA Margin Volume($ in millions)
(cents / lb) (cents / lb)
2Q’11 1Q’12 2Q’12 July-12
0
200
400
600
800
$1,000
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
37
0
1
2
3
4
2Q'11 1Q'12 2Q'12 Jul'12
1) Shaded area refers to $71million Lower of Cost or Market adjustment (LCM)
lyondellbasell.com
Olefins Benchmark Margins
U.S. Gulf Coast Ethylene Margin (cents/lb)
Source: IHS.
38
0
15
30
45
60
Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12
Spot Contract
40
60
80
100
120
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12Brent Ethane Propane Butane
0
10
20
30
40
50
60
70
NE Asia Naphtha U.S. Naphtha U.S. Propane U.S. Ethane
2Q11 1Q12 2Q12
Indexed Commodity Prices Cost of Ethylene Production (cents/lb)
lyondellbasell.com
Ethane and Propane Production and Inventories at Historic Highs
U.S. Ethane Production U.S. Propane Production
2007 - 2011 Range 2011 2012
U.S. Ethane Inventory U.S. Propane Inventory
Source: EIA.
39
400
600
800
1,000
1,200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MBP
D
400
500
600
700
800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MBP
D
0
10
20
30
40
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MM
Bbls
0
20
40
60
80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MM
Bbls
lyondellbasell.com
(10)
0
10
20
30
40
50
2Q'11 1Q'12 2Q'12 Jul' 12
HDPE Margin Naphtha Margin Ethylene/HDPE Chain
Olefins & Polyolefins - Europe, Asia, International Highlights and Business Drivers - 2Q’12
EU Olefins • Margin expansion for light Olefins and
butadiene
Polyethylene • Volumes down 14%
Polypropylene (includes Catalloy) • Modest margin improvement • Volume down 13%
JV dividends • Due to timing
European Ethylene Chain Margins (per IHS)
EBITDA Performance vs. 1Q’12
European Polypropylene Margins (per IHS)
EBITDA Margin Volume($ in millions)
(cents / lb) (cents / lb)
100
200
300
$400
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
40
(6)
(4)
(2)
0
2
2Q'11 1Q'12 2Q'12 Jul' 12
lyondellbasell.com
0
15
30
45
2Q11 1Q12 2Q12 3Q12 E
Intermediates & Derivatives Highlights and Business Drivers - 2Q’12
EBITDA
Propylene Oxide and Derivatives • Steady underlying businesses results • First China JV dividend
Intermediates
• Improved PO co-products margins Oxyfuels Hurricane Ike Insurance Setllement
EBITDA Margin Volume
Performance vs. 1Q’12 ($ in millions)
41
EU MTBE Raw Material Margins (per Platts)
(cents / gallon)
0
50
100
150
200
2Q'11 1Q'12 2Q'12 Jul' 12
P-Glycol Raw Material Margins (per Chemdata)
(cents / lb)
100
200
300
400
$500
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
lyondellbasell.com
Refining Highlights and Business Drivers - 2Q’12
Houston Refinery • Q2 crude throughput: 267 MBPD • Maya 2-1-1: $23.16/ bbl • Hurricane Ike insurance settlement
Berre refinery discontinued operations
Refining Spreads (per Platts)(1)
EBITDA Performance vs. 1Q’12 EBITDA Margin Volume($ in millions)
($ / bbl)
1) Light Louisiana Sweet (LLS) is the referenced light crude.
42
0
10
20
30
2Q'11 1Q'12 2Q'12 Jul'12
Lt-Hvy Lt-Gasoline Lt-Heating Oil
HRO Operating Rate
0
100
200
300
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
150
300
$450
2Q'11 3Q'11 4Q'11 1Q'12 2Q'12
(MBPD)
lyondellbasell.com
– O&P Americas chain margin remains advantaged
– European olefins/polyolefins weaken, consistent with EU economic uncertainties, while differentiated businesses continue to perform
– Intermediates & Derivatives remain steady
– Projects are progressing as scheduled
Second-Quarter Summary and Outlook
– Strong Olefins results
• Feedstock cost decline outpaced price declines
• Continued U.S. NGL advantage
– Channelview turnaround complete
– Steady results in Intermediates and Derivatives, including Oxyfuels
– Closed debt refinancing
– Interim quarterly dividend increased to 40 cents per share
Second-Quarter Summary Near-Term Outlook
43
Bank of America Merrill Lynch 2012 Industrials and Materials ConferenceCautionary StatementInformation Related to Financial MeasuresWorld-Class Scale With Leading Market PositionsSlide Number 5Slide Number 6Slide Number 7Ethane and Propane Production and Inventories at Historic HighsEthane Production Capacity is Forecast to Outpace Olefins Cracking Capacity GrowthGrowth and Efficiency ProjectsLa Porte Olefins Expansion ProjectAt 2010 / 2011 Operating Rates Global Naphtha Margins Have Been Near Trough LevelsO&P EAI: Earnings DriversO&P EAI Butadiene Expansion ProjectIntermediates & Derivatives �A Robust and Diversified PortfolioGlobally Diversified End UsesDrivers of Recent ProfitabilityHighly Profitable Balanced PortfolioStrong Performance across Diverse PortfolioI&D Methanol Restart ProjectAsia PO/TBA ProjectIntermediates and Derivatives: Highly Profitable Balanced PortfolioReturning Cash to Shareholders Through DividendsOperational and Financial ImprovementsSignificant High-Return Growth OpportunitiesIndustry Trends Provide Further Upside2011 – 1H 2012 Reconciliation of EBITDA to �Net IncomeBack-upSecond-Quarter 2012 EarningsCautionary StatementInformation Related to Financial MeasuresHighlightsLyondellBasell Safety PerformanceSecond-Quarter 2012 and Last-Twelve-Months (LTM) Segment EBITDACash Flow Working Capital and Key Financials StatisticsOlefins & Polyolefins - Americas�Highlights and Business Drivers - 2Q’12Olefins Benchmark MarginsEthane and Propane Production and Inventories at Historic HighsOlefins & Polyolefins - Europe, Asia, International�Highlights and Business Drivers - 2Q’12Intermediates & Derivatives�Highlights and Business Drivers - 2Q’12Refining Highlights and Business Drivers - 2Q’12Second-Quarter Summary and Outlook
