UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


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

For the quarterly period ended ~~March 31,~~June 30, 2020


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

For the transition period from to

Commission file number: 001-34726

LYONDELLBASELL INDUSTRIES N.V.

(Exact name of registrant as specified in its charter)

Netherlands

98-0646235

(State or other jurisdiction of
incorporation or organization)

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

1221 McKinney St.,

4th Floor, One Vine Street

Suite 300

London

Delftseplein 27E

Houston,

Texas

W1J0AH

3013AA

Rotterdam

USA

77010

United Kingdom

Netherlands

(Addresses of registrant’s principal executive offices)


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

(Registrant’s telephone numbers, including area codes)

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

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

Title of Each Class

Trading Symbol

Name of Each Exchange On Which Registered

Ordinary Shares, €0.04 Par Value

LYB

New York Stock Exchange

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

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

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


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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act). Yes ☐ No x

The registrant had ~~333,706,244~~333,839,284 ordinary shares, €0.04 par value, outstanding at ~~April~~July 29, 2020 (excluding ~~6,339,384~~6,206,344 treasury shares).

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LYONDELLBASELL INDUSTRIES N.V.

TABLE OF CONTENTS

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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF INCOME

(In millions of dollars, except earnings per share)


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Sales and other operating revenues:	Sales and other operating revenues:					Sales and other operating revenues:
Trade	Trade	$	7,303	$	8,565	Trade	$	5,371	$	8,828	$	12,674	$	17,393
Related parties	Related parties	191		213		Related parties	175		220		366		433
		7,494		8,778			5,546		9,048		13,040		17,826
Operating costs and expenses:	Operating costs and expenses:					Operating costs and expenses:
Cost of sales	Cost of sales	6,868		7,446		Cost of sales	4,894		7,542		11,762		14,988
Selling, general and administrative expenses	Selling, general and administrative expenses	295		287		Selling, general and administrative expenses	288		302		583		589
Research and development expenses	Research and development expenses	27		28		Research and development expenses	25		27		52		55
		7,190		7,761			5,207		7,871		12,397		15,632
Operating income	Operating income	304		1,017		Operating income	339		1,177		643		2,194
Interest expense	Interest expense	(89)		(92)		Interest expense	(125)		(81)		(214)		(173)
Interest income	Interest income	3		6		Interest income	4		5		7		11
Other income, net	Other income, net	—		25		Other income, net	4		10		4		35
Income from continuing operations before equity investments and income taxes	Income from continuing operations before equity investments and income taxes	218		956		Income from continuing operations before equity investments and income taxes	222		1,111		440		2,067
Income from equity investments	Income from equity investments	—		64		Income from equity investments	61		64		61		128
Income from continuing operations before income taxes	Income from continuing operations before income taxes	218		1,020		Income from continuing operations before income taxes	283		1,175		501		2,195
Provision for income taxes		75		203
Provision for (benefit from) income taxes						Provision for (benefit from) income taxes	(32)		169		43		372
Income from continuing operations	Income from continuing operations	143		817		Income from continuing operations	315		1,006		458		1,823
Income from discontinued operations, net of tax		1		—
Loss from discontinued operations, net of tax						Loss from discontinued operations, net of tax	(1)		(3)		—		(3)
Net income	Net income	144		817		Net income	314		1,003		458		1,820

Dividends on redeemable non-controlling interests	Dividends on redeemable non-controlling interests	(2)		(2)		Dividends on redeemable non-controlling interests	(1)		(1)		(3)		(3)
Net income attributable to the Company shareholders	Net income attributable to the Company shareholders	$	142	$	815	Net income attributable to the Company shareholders	$	313	$	1,002	$	455	$	1,817

Earnings per share:	Earnings per share:					Earnings per share:
Net income attributable to the Company shareholders —	Net income attributable to the Company shareholders —					Net income attributable to the Company shareholders —
Basic:	Basic:					Basic:
Continuing operations	Continuing operations	$	0.42	$	2.19	Continuing operations	$	0.94	$	2.71	$	1.36	$	4.90
Discontinued operations	Discontinued operations	—		—		Discontinued operations	—		(0.01)		—		(0.01)
		$	0.42	$	2.19		$	0.94	$	2.70	$	1.36	$	4.89
Diluted:	Diluted:					Diluted:
Continuing operations	Continuing operations	$	0.42	$	2.19	Continuing operations	$	0.94	$	2.71	$	1.36	$	4.89
Discontinued operations	Discontinued operations	—		—		Discontinued operations	—		(0.01)		—		(0.01)
		$	0.42	$	2.19		$	0.94	$	2.70	$	1.36	$	4.88

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions of dollars)


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Net income	Net income	$	144	$	817	Net income	$	314	$	1,003	$	458	$	1,820
Other comprehensive income (loss), net of tax –	Other comprehensive income (loss), net of tax –					Other comprehensive income (loss), net of tax –
Financial derivatives	Financial derivatives	(338)		(50)		Financial derivatives	(26)		(68)		(364)		(118)
Unrealized losses on available-for-sale debt securities		(2)		—
Unrealized gains on available-for-sale debt securities						Unrealized gains on available-for-sale debt securities	3		1		1		1
Defined benefit pension and other postretirement benefit plans	Defined benefit pension and other postretirement benefit plans	10		5		Defined benefit pension and other postretirement benefit plans	11		5		21		10
Foreign currency translations	Foreign currency translations	(199)		(10)		Foreign currency translations	66		18		(133)		8
Total other comprehensive loss, net of tax		(529)		(55)
Total other comprehensive income (loss), net of tax						Total other comprehensive income (loss), net of tax	54		(44)		(475)		(99)
Comprehensive income (loss)	Comprehensive income (loss)	(385)		762		Comprehensive income (loss)	368		959		(17)		1,721
Dividends on redeemable non-controlling interests	Dividends on redeemable non-controlling interests	(2)		(2)		Dividends on redeemable non-controlling interests	(1)		(1)		(3)		(3)

Comprehensive income (loss) attributable to the Company shareholders	Comprehensive income (loss) attributable to the Company shareholders	$	(387)	$	760	Comprehensive income (loss) attributable to the Company shareholders	$	367	$	958	$	(20)	$	1,718

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

(In millions of dollars)


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,596	$	858	Cash and cash equivalents	$	2,552	$	858
Restricted cash	Restricted cash	37		30		Restricted cash	26		30
Short-term investments	Short-term investments	199		196		Short-term investments	651		196
Accounts receivable:	Accounts receivable:					Accounts receivable:
Trade, net	Trade, net	2,885		2,981		Trade, net	2,454		2,981
Related parties	Related parties	158		121		Related parties	134		121
Inventories	Inventories	3,973		4,588		Inventories	3,768		4,588
Prepaid expenses and other current assets	Prepaid expenses and other current assets	844		736		Prepaid expenses and other current assets	892		736
Total current assets	Total current assets	9,692		9,510		Total current assets	10,477		9,510
Operating lease assets	Operating lease assets	1,453		1,468		Operating lease assets	1,425		1,468
Property, plant and equipment, at cost	Property, plant and equipment, at cost	21,664		21,260		Property, plant and equipment, at cost	22,019		21,260
Less: Accumulated depreciation	Less: Accumulated depreciation	(7,277)		(7,130)		Less: Accumulated depreciation	(7,493)		(7,130)
Property, plant and equipment, net	Property, plant and equipment, net	14,387		14,130		Property, plant and equipment, net	14,526		14,130
Investments and long-term receivables:	Investments and long-term receivables:					Investments and long-term receivables:
Investment in PO joint ventures	Investment in PO joint ventures	497		504		Investment in PO joint ventures	523		504
Equity investments	Equity investments	1,539		1,602		Equity investments	1,559		1,602
Other investments and long-term receivables	Other investments and long-term receivables	22		22		Other investments and long-term receivables	23		22
Goodwill	Goodwill	1,800		1,891		Goodwill	1,830		1,891
Intangible assets, net	Intangible assets, net	808		869		Intangible assets, net	756		869
Other assets	Other assets	902		439		Other assets	422		439
Total assets	Total assets	$	31,100	$	30,435	Total assets	$	31,541	$	30,435

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

(In millions of dollars, except shares and par value data)


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY	LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY					LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current maturities of long-term debt	Current maturities of long-term debt	$	3	$	3	Current maturities of long-term debt	$	3	$	3
Short-term debt	Short-term debt	1,493		445		Short-term debt	659		445
Accounts payable:	Accounts payable:					Accounts payable:
Trade	Trade	2,217		2,516		Trade	1,790		2,516
Related parties	Related parties	421		412		Related parties	404		412
Accrued liabilities	Accrued liabilities	1,387		1,822		Accrued liabilities	1,579		1,822
Total current liabilities	Total current liabilities	5,521		5,198		Total current liabilities	4,435		5,198
Long-term debt	Long-term debt	12,159		11,614		Long-term debt	13,674		11,614
Operating lease liabilities	Operating lease liabilities	1,192		1,216		Operating lease liabilities	1,160		1,216
Other liabilities	Other liabilities	2,808		2,213		Other liabilities	2,968		2,213
Deferred income taxes	Deferred income taxes	1,961		2,015		Deferred income taxes	1,811		2,015
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Redeemable non-controlling interests	Redeemable non-controlling interests	116		116		Redeemable non-controlling interests	116		116
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 333,703,450 and 333,476,883 shares outstanding, respectively		19		19
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 333,829,804 and 333,476,883 shares outstanding, respectively						Ordinary shares, €0.04 par value, 1,275 million shares authorized, 333,829,804 and 333,476,883 shares outstanding, respectively	19		19
Additional paid-in capital	Additional paid-in capital	5,950		5,954		Additional paid-in capital	5,958		5,954
Retained earnings	Retained earnings	4,227		4,435		Retained earnings	4,188		4,435
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(2,313)		(1,784)		Accumulated other comprehensive loss	(2,259)		(1,784)
Treasury stock, at cost, 6,342,178 and 6,568,745 ordinary shares, respectively		(559)		(580)
Treasury stock, at cost, 6,215,824 and 6,568,745 ordinary shares, respectively						Treasury stock, at cost, 6,215,824 and 6,568,745 ordinary shares, respectively	(548)		(580)
Total Company share of shareholders’ equity	Total Company share of shareholders’ equity	7,324		8,044		Total Company share of shareholders’ equity	7,358		8,044
Non-controlling interests	Non-controlling interests	19		19		Non-controlling interests	19		19
Total equity	Total equity	7,343		8,063		Total equity	7,377		8,063
Total liabilities, redeemable non-controlling interests and equity	Total liabilities, redeemable non-controlling interests and equity	$	31,100	$	30,435	Total liabilities, redeemable non-controlling interests and equity	$	31,541	$	30,435

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions of dollars)


		Three Months Ended March 31,							Six Months Ended June 30,
		2020		2019			2020		2019
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	144	$	817	Net income	$	458	$	1,820
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	342		322		Depreciation and amortization	698		650
Amortization of debt-related costs	Amortization of debt-related costs	4		1		Amortization of debt-related costs	7		4

Share-based compensation	Share-based compensation	16		12		Share-based compensation	29		24
Inventory valuation adjustment		419		—
Inventory valuation charges						Inventory valuation charges	323		—
Equity investments—	Equity investments—					Equity investments—
Equity income	Equity income	—		(64)		Equity income	(61)		(128)
Distributions of earnings, net of tax	Distributions of earnings, net of tax	15		25		Distributions of earnings, net of tax	81		149
Deferred income taxes	Deferred income taxes	68		46		Deferred income taxes	(90)		110

Changes in assets and liabilities that provided (used) cash:	Changes in assets and liabilities that provided (used) cash:					Changes in assets and liabilities that provided (used) cash:
Accounts receivable	Accounts receivable	4		(206)		Accounts receivable	487		(263)
Inventories	Inventories	121		(3)		Inventories	463		(173)
Accounts payable	Accounts payable	(235)		105		Accounts payable	(485)		(102)
Other, net	Other, net	(356)		(398)		Other, net	(76)		(248)
Net cash provided by operating activities	Net cash provided by operating activities	542		657		Net cash provided by operating activities	1,834		1,843
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Expenditures for property, plant and equipment	Expenditures for property, plant and equipment	(660)		(599)		Expenditures for property, plant and equipment	(1,248)		(1,221)

Purchases of available-for-sale debt securities						Purchases of available-for-sale debt securities	(270)		—
Proceeds from sales and maturities of available-for-sale debt securities						Proceeds from sales and maturities of available-for-sale debt securities	—		511

Proceeds from maturities of available-for-sale debt securities		—		308

Purchases of equity securities						Purchases of equity securities	(184)		—
Proceeds from sales of equity securities	Proceeds from sales of equity securities	1		162		Proceeds from sales of equity securities	1		332

Other, net	Other, net	(4)		(49)		Other, net	(26)		(78)
Net cash used in investing activities	Net cash used in investing activities	(663)		(178)		Net cash used in investing activities	(1,727)		(456)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Repurchases of Company ordinary shares	Repurchases of Company ordinary shares	(4)		(512)		Repurchases of Company ordinary shares	(4)		(512)
Dividends paid - common stock	Dividends paid - common stock	(351)		(372)		Dividends paid - common stock	(701)		(760)
Purchase of non-controlling interest	Purchase of non-controlling interest	(30)		(63)		Purchase of non-controlling interest	(30)		(63)
Issuance of long-term debt	Issuance of long-term debt	500		—		Issuance of long-term debt	2,492		—
Repayments of long-term debt	Repayments of long-term debt	—		(1,000)		Repayments of long-term debt	(500)		(1,000)

Payments of debt issuance costs						Payments of debt issuance costs	(18)		(4)
Issuance of short-term debt	Issuance of short-term debt	500		2,000		Issuance of short-term debt	521		2,000

Repayments of short-term debt						Repayments of short-term debt	(500)		—
Net proceeds from (repayments of) commercial paper	Net proceeds from (repayments of) commercial paper	516		(559)		Net proceeds from (repayments of) commercial paper	212		(128)
Payments on forward-starting interest rate swaps that include financing elements	Payments on forward-starting interest rate swaps that include financing elements	(238)		—		Payments on forward-starting interest rate swaps that include financing elements	(238)		—
Proceeds from settlement of cash flow hedges						Proceeds from settlement of cash flow hedges	346		—
Other, net	Other, net	(9)		(15)		Other, net	(12)		(15)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	884		(521)		Net cash provided by (used in) financing activities	1,568		(482)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(18)		(1)		Effect of exchange rate changes on cash	15		2
Increase (decrease) in cash and cash equivalents and restricted cash		745		(43)
Increase in cash and cash equivalents and restricted cash						Increase in cash and cash equivalents and restricted cash	1,690		907
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	888		401		Cash and cash equivalents and restricted cash at beginning of period	888		401
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	1,633	$	358	Cash and cash equivalents and restricted cash at end of period	$	2,578	$	1,308

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions of dollars)


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




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

Ordinary Shares Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Loss Company
Share of
Shareholders’
Equity Non-
Controlling
Interests
Issued Treasury
Balance, December 31, 2019 $ 19 $ (580) $ 5,954 $ 4,435 $ (1,784) $ 8,044 $ 19
Net income — — — 144 — 144 —
Other comprehensive loss — — — — (529) (529) —
Share-based compensation — 25 (11) 1 — 15 —
Dividends - common stock ($1.05 per share) — — — (351) — (351) —
Dividends - redeemable non-controlling interests ($15.00 per share) — — — (2) — (2) —
Repurchases of Company ordinary shares — (4) — — — (4) —
Purchase of non-controlling interest — — 7 — — 7 —
Balance, March 31, 2020 $ 19 $ (559) $ 5,950 $ 4,227 $ (2,313) $ 7,324 $ 19


		Ordinary Shares						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity					Non- Controlling Interests			Ordinary Shares										Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity	Non- Controlling Interests
Millions of dollars		Issued		Treasury
Balance, December 31, 2018		$	22	$	(2,206)	$	7,041									$	6,763			$	(1,363)			$	10,257			$	23
																		Issued				Treasury								Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
Balance, March 31, 2019																	Balance, March 31, 2019	$	22			$	(2,668)			$	6,996
Net income	Net income	—		—		—		817		—		817		—			Net income	—				—				—				1,003		—		1,003		—
Other comprehensive loss	Other comprehensive loss	—		—		—		—		(55)		(55)		—			Other comprehensive loss	—				—				—				—		(44)		(44)		—
Share-based compensation	Share-based compensation	—		26		2		—		—		28		—			Share-based compensation	—				5				10				(2)		—		13		—
Dividends - common stock ($1.00 per share)		—		—		—		(372)		—		(372)		—
Dividends - common stock ($1.05 per share)																	Dividends - common stock ($1.05 per share)	—				—				—				(388)		—		(388)		—
Dividends - redeemable non-controlling interests ($15.00 per share)	Dividends - redeemable non-controlling interests ($15.00 per share)	—		—		—		(2)		—		(2)		—			Dividends - redeemable non-controlling interests ($15.00 per share)	—				—				—				(1)		—		(1)		—
Repurchases of Company ordinary shares		—		(488)		—		—		—		(488)		—
Purchase of non-controlling interest		—		—		(47)		—		—		(47)		(1)

Balance, March 31, 2019		$	22	$	(2,668)	$	6,996	$	7,206	$	(1,418)	$	10,138	$	22

Balance, June 30, 2019																	Balance, June 30, 2019	$	22			$	(2,663)			$	7,006			$	7,818	$	(1,462)	$	10,721	$	22

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In millions of dollars)


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

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


	Ordinary Shares						Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
	Issued		Treasury
Balance, December 31, 2018	$	22	$	(2,206)	$	7,041	$	6,763	$	(1,363)	$	10,257	$	23
Net income	—		—		—		1,820		—		1,820		—
Other comprehensive loss	—		—		—		—		(99)		(99)		—
Share-based compensation	—		31		12		(2)		—		41		—
Dividends - common stock ($2.05 per share)	—		—		—		(760)		—		(760)		—
Dividends - redeemable non-controlling interests ($30.00 per share)	—		—		—		(3)		—		(3)		—
Repurchases of Company ordinary shares	—		(488)		—		—		—		(488)		—
Purchase of non-controlling interest	—		—		(47)		—		—		(47)		(1)


Balance, June 30, 2019	$	22	$	(2,663)	$	7,006	$	7,818	$	(1,462)	$	10,721	$	22

See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS


			Page			Page
1.	1.	Basis of Presentation	8	1.	Basis of Presentation	9

2.	2.	Accounting and Reporting Changes	8	2.	Accounting and Reporting Changes	9

3.	3.	Revenues	10	3.	Revenues	10

4.	4.	Accounts Receivable	11	4.	Accounts Receivable	11

5.	5.	Inventories	11	5.	Inventories	12

6.	6.	Debt	12	6.	Debt	13

7.	7.	Financial Instruments and Fair Value Measurements	15	7.	Financial Instruments and Fair Value Measurements	16

8.	8.	Income Taxes	20	8.	Income Taxes	22

9.	9.	Commitments and Contingencies	20	9.	Commitments and Contingencies	22

10.	10.	Shareholders’ Equity and Redeemable Non-controlling Interests	21	10.	Shareholders’ Equity and Redeemable Non-controlling Interests	23

11.	11.	Per Share Data	25	11.	Per Share Data	27

12.	12.	Segment and Related Information	26	12.	Segment and Related Information	29

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

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

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

The accompanying unaudited Consolidated Financial Statements have been prepared from the books and records of LyondellBasell N.V. in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. In our opinion, all adjustments, including normal recurring adjustments, considered necessary for a fair statement have been included. The results for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Events surrounding the ongoing novel strain of coronavirus, causing a pandemic referred to as COVID-19, ~~and the significant drop in the price of oil~~ continue to evolve and impact global markets and demand for our products. During the first ~~quarter~~six months of 2020, we recognized a lower of cost or market ~~(“LCM”)~~ inventory valuation ~~charge of $419 million, see~~charges as disclosed in Note 5 to our Consolidated Financial Statements. ~~Further, we~~We also assessed accounting matters that generally require consideration of forecasted financial information based on the information reasonably available to us and the uncertain future impacts of COVID-19 and ~~volatility in commodity prices. Accounting matters assessed included, but were not limited to,~~ the carrying value of our goodwill and other long-lived assets, inventory, valuation allowances for tax assets and expected credit losses. Other than the inventory valuation charges noted above, there were no other impacts to our consolidated financial statements for the first quarter of 2020 resulting from our assessments.related economic impacts. We will continue to assess the potential financial statement impacts of COVID-19 and commodity price volatility throughout the duration of the pandemic in accordance with our corporate accounting policies.

The extent of the impact of the pandemic ~~and the decline in commodity prices~~ on our operational and financial performance will depend on future developments which are uncertain and cannot be predicted. An extended period of economic disruption could have a material adverse impact on our business, results of operations, access to sources of liquidity and financial condition.

2. Accounting and Reporting Changes

Recently Adopted Guidance

The following table provides a brief description of recently adopted Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). The adoption of the new standards listed below in the first quarter of 2020 did not have a material impact on our Consolidated Financial Statements.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

Standard

Description

ASU 2020-04, Facilitation of the Effects of Relief of Reference Rate Reform on Financial Reporting

This guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions that reference London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The expedients and exceptions provided by this guidance are available from January 1, 2020, prospectively, and do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The adoption of the guidance ~~will enable~~enables us to continue hedge accounting for the relevant designated hedges and is expected to ease the accounting burden associated with transitioning away from reference rates that are expected to be discontinued.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Standard

Description

ASU 2020-03, Codification Improvements to Financial Instruments

This guidance makes narrow-scope changes that are intended to improve the guidance on financial instruments and current expected credit loss (“CECL”). We adopted the guidance related to CECL and other amendments on a modified retrospective basis.

ASU 2019-12, Simplifying the Accounting for Income Taxes

This guidance enhances and simplifies various aspects of income tax accounting by removing exceptions for recognizing deferred taxes for changes from a subsidiary to an equity method investment and vice versa, performing intraperiod allocation and calculating income taxes in interim periods. The new guidance also reduces complexity in certain areas, including the tax basis step-up in goodwill in a transaction that is not a business combination and interim period accounting for enacted changes in tax law. We early adopted the amendments applicable to us on a prospective basis.

ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

This guidance requires a customer in a hosted, cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized costs are amortized over the term of the hosting arrangement when the recognized asset is ready for its intended use.

ASU 2018-13, Disclosure Framework - Change to the Disclosure Requirements for Fair Value Measurement

This guidance eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. It removes transfer disclosures between Level 1 and Level 2 of the fair value hierarchy, and adds disclosures for the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.

Accounting Guidance Issued But Not Adopted as of ~~March 31,~~June 30, 2020

We are currently assessing the impact of the standard listed below on our Consolidated Financial Statements.

Standard

Description

ASU 2018-14, Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

This guidance changes disclosure requirements for employers that sponsor defined benefit pension and/or other postretirement benefit plans. It eliminates the requirement of certain disclosures that are no longer considered cost beneficial and adds more pertinent disclosures.

This guidance will be effective for public entities for annual periods ending after December 15, 2020. Early adoption is permitted.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

3. Revenues

Contract Balances—Contract liabilities were ~~$151~~$147 million and $124 million at ~~March 31,~~June 30, 2020 and December 31, 2019, respectively. Revenue recognized in each reporting period, included in the contract liability balance at the beginning of the period, was immaterial.

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

Three Months Ended
March 31,
Millions of dollars 2020 2019
Sales and other operating revenues:
Olefins and co-products $ 667 $ 748
Polyethylene 1,459 1,666
Polypropylene 1,101 1,315
Propylene oxide and derivatives 464 528
Oxyfuels and related products 707 664
Intermediate chemicals 544 640
Compounding and solutions 912 1,140
Advanced polymers 181 198
Refined products 1,336 1,743
Other 123 136
Total $ 7,494 $ 8,778

~~The following table presents our revenues disaggregated by geography, based upon the location of the customer:~~

Three Months Ended
March 31,
Millions of dollars 2020 2019
Sales and other operating revenues:
United States $ 3,187 $ 3,893
Germany 641 731
Mexico 380 528
Italy 335 387
France 270 362
China 243 298
The Netherlands 212 252
Japan 335 203
Other 1,891 2,124
Total $ 7,494 $ 8,778

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues:
Olefins and co-products	$	460	$	745	$	1,127	$	1,493
Polyethylene	1,277		1,538		2,736		3,204
Polypropylene	969		1,317		2,070		2,632
Propylene oxide and derivatives	332		489		796		1,017
Oxyfuels and related products	389		797		1,096		1,461
Intermediate chemicals	404		705		948		1,345
Compounding and solutions	549		1,062		1,461		2,202
Advanced polymers	151		196		332		394
Refined products	855		2,011		2,191		3,754
Other	160		188		283		324
Total	$	5,546	$	9,048	$	13,040	$	17,826

The following table presents our revenues disaggregated by geography, based upon the location of the customer:


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues:
United States	$	2,417	$	4,250	$	5,604	$	8,143
Germany	398		710		1,039		1,441
Italy	259		385		594		772
Mexico	203		431		583		959
China	302		298		545		596
Japan	143		255		478		458
France	161		363		431		725
Poland	188		252		412		521
The Netherlands	153		270		365		522
Other	1,322		1,834		2,989		3,689
Total	$	5,546	$	9,048	$	13,040	$	17,826

4. Accounts Receivable

Our accounts receivable are reflected in the Consolidated Balance Sheets net of allowance for credit losses of $14 million and $16 million at ~~March 31,~~June 30, 2020 and December 31, 2019, respectively.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

5. Inventories

Inventories consisted of the following components:


Millions of dollars	Millions of dollars	March 31, 2020		December 31, 2019		Millions of dollars	June 30, 2020		December 31, 2019
Finished goods	Finished goods	$	2,691	$	3,083	Finished goods	$	2,368	$	3,083
Work-in-process	Work-in-process	124		130		Work-in-process	139		130
Raw materials and supplies	Raw materials and supplies	1,158		1,375		Raw materials and supplies	1,261		1,375
Total inventories	Total inventories	$	3,973	$	4,588	Total inventories	$	3,768	$	4,588

Our inventories are stated at the lower of cost or market (“LCM”). Cost is determined using the last-in, first-out ("LIFO") inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may be higher than the market value, ~~which reduces~~and as a result we adjust the value of inventory to market value. ~~This adjustment is related to the recent decline in pricing for many of our raw material and finished goods inventories. Fluctuation~~Fluctuations in the prices of crude oil, natural gas and correlated products from period to period may result in the recognition of charges to adjust the value of inventory to the lower of cost or market in periods of falling prices and the reversal of those charges in subsequent interim periods, within the fiscal year, as market prices recover.

During the first ~~quarter~~six months of 2020, we recognized an LCM inventory ~~charge~~valuation charges of ~~$419 million. This charge is~~$323 million related to the ~~recent~~ decline in pricing for many of our raw material and finished goods inventories

. since December 31, 2019. During the second quarter of 2020, we recognized a LCM inventory valuation benefit of $96 million, largely driven by the recovery of market prices of crude oil and refined products during the second quarter.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

6. Debt

Long-term loans, notes and other debt, net of unamortized discount and debt issuance cost, consisted of the following:


Millions of dollars	Millions of dollars	March 31, 2020		December 31, 2019		Millions of dollars	June 30, 2020		December 31, 2019
Senior Notes due 2021, $1,000 million, 6.0% ($3 million of debt issuance cost)	Senior Notes due 2021, $1,000 million, 6.0% ($3 million of debt issuance cost)	$	1,014	$	998	Senior Notes due 2021, $1,000 million, 6.0% ($3 million of debt issuance cost)	$	1,012	$	998
Senior Notes due 2024, $1,000 million, 5.75% ($5 million of debt issuance cost)	Senior Notes due 2024, $1,000 million, 5.75% ($5 million of debt issuance cost)	995		995		Senior Notes due 2024, $1,000 million, 5.75% ($5 million of debt issuance cost)	995		995
Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost)	Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost)	973		973		Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost)	973		973
Term Loan due 2022, $4,000 million ($2 million of debt issuance costs)	Term Loan due 2022, $4,000 million ($2 million of debt issuance costs)	1,948		1,950		Term Loan due 2022, $4,000 million ($2 million of debt issuance costs)	1,948		1,950
Senior Revolving Credit Facility due 2022, $2,500 million		500		—

Guaranteed Notes due 2022, €750 million, 1.875% ($1 million of discount; $2 million of debt issuance cost)	Guaranteed Notes due 2022, €750 million, 1.875% ($1 million of discount; $2 million of debt issuance cost)	819		841		Guaranteed Notes due 2022, €750 million, 1.875% ($1 million of discount; $2 million of debt issuance cost)	839		841
Guaranteed Notes due 2023, $750 million, 4.0% ($4 million of discount; $2 million of debt issuance cost)	Guaranteed Notes due 2023, $750 million, 4.0% ($4 million of discount; $2 million of debt issuance cost)	744		744		Guaranteed Notes due 2023, $750 million, 4.0% ($4 million of discount; $2 million of debt issuance cost)	744		744
Guaranteed Notes due 2025, $500 million, 2.875% ($4 million of debt issuance cost)						Guaranteed Notes due 2025, $500 million, 2.875% ($4 million of debt issuance cost)	496		—
Guaranteed Notes due 2026, €500 million, 0.875% ($2 million of discount; $3 million of debt issuance cost)	Guaranteed Notes due 2026, €500 million, 0.875% ($2 million of discount; $3 million of debt issuance cost)	542		555		Guaranteed Notes due 2026, €500 million, 0.875% ($2 million of discount; $3 million of debt issuance cost)	556		555
Guaranteed Notes due 2027, $1,000 million, 3.5% ($8 million of discount; $6 million of debt issuance cost)		1,103		1,023
Guaranteed Notes due 2027, $1,000 million, 3.5% ($7 million of discount; $6 million of debt issuance cost)						Guaranteed Notes due 2027, $1,000 million, 3.5% ($7 million of discount; $6 million of debt issuance cost)	1,097		1,023
Guaranteed Notes due 2027, $300 million, 8.1%	Guaranteed Notes due 2027, $300 million, 8.1%	300		300		Guaranteed Notes due 2027, $300 million, 8.1%	300		300
Guaranteed Notes due 2030, $500 million, 3.375% ($1 million of discount; $4 million of debt issuance cost)						Guaranteed Notes due 2030, $500 million, 3.375% ($1 million of discount; $4 million of debt issuance cost)	495		—
Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $3 million of debt issuance cost)	Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $3 million of debt issuance cost)	538		552		Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $3 million of debt issuance cost)	551		552
Guaranteed Notes due 2043, $750 million, 5.25% ($20 million of discount; $7 million of debt issuance cost)	Guaranteed Notes due 2043, $750 million, 5.25% ($20 million of discount; $7 million of debt issuance cost)	723		723		Guaranteed Notes due 2043, $750 million, 5.25% ($20 million of discount; $7 million of debt issuance cost)	723		723
Guaranteed Notes due 2044, $1,000 million, 4.875% ($10 million of discount; $9 million of debt issuance cost)	Guaranteed Notes due 2044, $1,000 million, 4.875% ($10 million of discount; $9 million of debt issuance cost)	981		980		Guaranteed Notes due 2044, $1,000 million, 4.875% ($10 million of discount; $9 million of debt issuance cost)	981		980
Guaranteed Notes due 2049, $1,000 million, 4.2% ($15 million of discount; $10 million of debt issuance cost)	Guaranteed Notes due 2049, $1,000 million, 4.2% ($15 million of discount; $10 million of debt issuance cost)	975		975		Guaranteed Notes due 2049, $1,000 million, 4.2% ($15 million of discount; $10 million of debt issuance cost)	975		975
Guaranteed Notes due 2050, $1,000 million, 4.2% ($6 million of discount; $10 million of debt issuance cost)						Guaranteed Notes due 2050, $1,000 million, 4.2% ($6 million of discount; $10 million of debt issuance cost)	984		—
Other	Other	7		8		Other	8		8
Total	Total	12,162		11,617		Total	13,677		11,617
Less current maturities	Less current maturities	(3)		(3)		Less current maturities	(3)		(3)
Long-term debt	Long-term debt	$	12,159	$	11,614	Long-term debt	$	13,674	$	11,614

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Fair value hedging adjustments associated with the fair value hedge accounting of our fixed-for-floating interest rate swaps for the applicable periods are as follows:


			Gains (Losses)									Cumulative Fair Value Hedging Adjustments Included in Carrying Amount of Debt										Gains (Losses)											Cumulative Fair Value Hedging Adjustments Included in Carrying Amount of Debt
		Inception Year	Three Months Ended March 31,									March 31,				December 31,		Inception Year		Three Months Ended June 30,						Six Months Ended June 30,					June 30,	December 31,
Millions of dollars	Millions of dollars				2020			2019			2020			2019		Millions of dollars	Inception Year			2020		2019		2020		2019		2020		2019
Senior Notes due 2019, 5.0%	Senior Notes due 2019, 5.0%	2014	$	—		$	(11)		$	—		$	—	Senior Notes due 2019, 5.0%	2014			$	—	$	—	$	—	$	(11)	$	—	$	—
Senior Notes due 2021, 6.0%	Senior Notes due 2021, 6.0%	2016	(16)			(7)			(17)			(1)		Senior Notes due 2021, 6.0%	2016			2		(13)		(14)		(20)		(15)		(1)
Guaranteed Notes due 2027, 3.5%	Guaranteed Notes due 2027, 3.5%	2017	(80)			(22)			(117)			(37)		Guaranteed Notes due 2027, 3.5%	2017			7		(35)		(73)		(57)		(110)		(37)
Guaranteed Notes due 2022, 1.875%	Guaranteed Notes due 2022, 1.875%	2018	1			—			(1)			(2)		Guaranteed Notes due 2022, 1.875%	2018			—		(1)		1		(1)		(1)		(2)
Guaranteed Notes due 2026, 0.875%														Guaranteed Notes due 2026, 0.875%	2020			(1)		—		(1)		—		(1)		—
Total	Total		$	(95)		$	(40)		$	(135)		$	(40)	Total				$	8	$	(49)	$	(87)	$	(89)	$	(127)	$	(40)

Fair value adjustments are recognized in Interest expense in the Consolidated Statements of Income.

Short-term loans, notes and other debt consisted of the following:


Millions of dollars	Millions of dollars	March 31, 2020		December 31, 2019		Millions of dollars	June 30, 2020		December 31, 2019

U.S. Receivables Facility	U.S. Receivables Facility	$	500	$	—	U.S. Receivables Facility	$	—	$	—
Commercial paper	Commercial paper	778		262		Commercial paper	473		262
Precious metal financings	Precious metal financings	211		181		Precious metal financings	159		181
Other	Other	4		2		Other	27		2
Total Short-term debt	Total Short-term debt	$	1,493	$	445	Total Short-term debt	$	659	$	445

Long-Term Debt

Senior Revolving Credit Facility—Our $2,500 million Senior Revolving Credit Facility which expires in June 2022 may be used for dollar and euro denominated borrowings, has a $500 million sublimit for dollar and euro denominated letters of credit, a $1,000 million uncommitted accordion feature, and supports our commercial paper program. Borrowings under the facility bear interest at either a base rate or LIBOR rate, plus an applicable margin. Additional fees are incurred for the average daily unused commitments. AsThe facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of ~~March 31, 2020,~~every fiscal quarter of 3.50 to 1.00, or less, for the ~~interest rate under this facility was 1.74%. During~~period covering the ~~three months ended~~most recent four quarters. In March ~~31,~~ 2020, we borrowed $500 million from this ~~facility.~~facility, which we subsequently repaid in April 2020. At ~~March 31,~~June 30, 2020, we had ~~$500 million of outstanding~~0 borrowings ~~0 outstanding~~or letters of credit outstanding and ~~$1,206~~$2,017 million of unused availability under this facility.

~~In April 2020, we repaid $500 million outstanding under our Senior Revolving Credit Facility.~~

Guaranteed Notes due 2025, 2030 and 2050—In April 2020, LYB International Finance III, LLC (“LYB Finance III”), a wholly owned finance subsidiary of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X, issued $500 million of 2.875% guaranteed notes due 2025 (the “2025 Notes”) at a discounted price of 99.911%, $500 million of 3.375% guaranteed notes due 2030 (the “2030 Notes”) at a discounted price of 99.813% and $1,000 million of 4.2% guaranteed notes due 2050 (the “2050 Notes”) at a discounted price of 99.373%. Net proceeds from the sale of the notes totaled $1,974 million.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

We used the net proceeds from the sale of the notes for general corporate purposes, including to increase our liquidity and manage short-term debt maturities.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

These unsecured notes, which are fully and unconditionally guaranteed by LyondellBasell Industries N.V., ~~will~~ rank equally in right of payment to all of LYB Finance III’s and LyondellBasell Industries N.V.’s existing and future senior unsecured indebtedness and will rank senior in right of payment to any future subordinated indebtedness that LYB Finance III or LyondellBasell Industries N.V. incurs. There are no significant restrictions that would impede LyondellBasell Industries N.V., as guarantor, from obtaining funds by dividend or loan from its subsidiaries.

The indenture governing these notes contains limited covenants, including those restricting our ability and the ability of our subsidiaries to incur indebtedness secured by significant property or by capital stock of subsidiaries that own significant property, enter into certain sale and lease-back transactions with respect to any significant property or enter into consolidations, mergers or sales of all or substantially all of our assets.

The 2025 Notes, 2030 Notes and 2050 Notes may be redeemed before the date that is one month, three months, or six months, respectively, prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable treasury yield plus 40 basis points in the case of the 2025 Notes or 45 basis points in the case of the 2030 Notes and 2050 Notes) on the notes to be redeemed. The 2025 Notes, 2030 Notes and 2050 Notes may also be redeemed on or after the date that is one month, three months, or six months, respectively, prior to the scheduled maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. The notes are also redeemable upon certain tax events.

Short-Term Debt

~~Commercial Paper Program~~—We have a commercial paper program under which we may issue up to $2,500 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). Interest rates on the commercial paper outstanding at March 31, 2020 are based on the terms of the notes and range from 1.45% to 2.45%. At March 31, 2020, we had $778 million of outstanding commercial paper.

U.S. Receivables Facility—Our U.S. Receivables Facility, which expires in July 2021, has a purchase limit of $900 million in addition to a $300 million uncommitted accordion feature. ~~This facility is secured by $1,041 million of accounts receivable as of March 31, 2020.~~ This facility provides liquidity through the sale or contribution of trade receivables by certain of our U.S. subsidiaries to a wholly owned, bankruptcy-remote subsidiary on an ongoing basis and without recourse. The bankruptcy-remote subsidiary may then, at its option and subject to a borrowing base of eligible receivables, sell undivided interests in the pool of trade receivables to financial institutions participating in the facility (“Purchasers”). The sale of the undivided interest in the pool of trade receivables is accounted for as a secured borrowing in the Consolidated Balance Sheets. We are responsible for servicing the receivables. We pay variable interest rates on our secured borrowings. ~~As of March 31, 2020, the interest rate under this facility was 1.62%.~~ In the event of liquidation, the bankruptcy-remote subsidiary’s assets will be used to satisfy the claims of the Purchasers prior to any assets or value in the bankruptcy-remote subsidiary becoming available to us. This facility also provides for the issuance of letters of credit up to $200 million. The term of the facility may be extended in accordance with the terms of the agreement. The facility is also subject to customary warranties and covenants, including limits and reserves and the maintenance of specified financial ratios. We are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00, or less, for the period covering the most recent four quarters. Performance obligations under the facility are guaranteed by LyondellBasell Industries N.V. Additional fees are incurred for the average daily unused commitments. ~~During the three months ended~~In March ~~31,~~ 2020, we borrowed $500 million from this ~~facility.~~facility, which we subsequently repaid in April 2020. At ~~March 31,~~June 30, 2020, we had ~~$500 million of outstanding~~0 borrowings ~~0 outstanding~~or letters of credit outstanding and ~~$151~~$524 million unused availability under this facility.

~~In April~~Commercial Paper Program—We have a commercial paper program under which we may issue up to $2,500 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). Interest rates on the commercial paper outstanding at June 30, 2020 are based on the terms of the notes and range from 0.23% to 0.35%. At June 30, 2020, we ~~repaid $500~~had $473 million of outstanding ~~under our U.S. Receivables Facility.~~commercial paper.

Weighted Average Interest Rate—At ~~March 31,~~June 30, 2020 and December 31, 2019, our weighted average interest rates on outstanding Short-term debt were ~~2.4%~~1.3% and 3.3%, respectively.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Additional Information

Debt Discount and Issuance Costs—Amortization of debt discounts and debt issuance costs resulted in amortization expense of $4$7 million and $1$4 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019, respectively, which is included in Interest expense in the Consolidated Statements of Income.

Other Information—LYB International Finance B.V., LYB International Finance II B.V. and LYB International Finance III, LLC are ~~direct,~~ 100% owned finance subsidiaries of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X. Any debt securities issued by LYB International Finance B.V., LYB International Finance II B.V. and LYB International Finance III, LLC ~~will be~~are fully and unconditionally guaranteed by LyondellBasell Industries N.V.

~~As of March 31, 2020, we are in compliance with our debt covenants.~~

In April 2020, we entered into amendments and related documents (collectively, the “Amendments”) to our (i) Senior Revolving Credit Facility, (ii) Term Loan due 2022, and (iii) U.S. Receivables Facility (collectively, as amended, the “Credit Agreements”). The Amendments amended each Credit Agreement’s gross leverage ratio covenant of 3.50 to 1.0 to permit netting of unrestricted cash and cash equivalents in excess of $300 million (with certain restrictions on non-US cash) and, in respect of the Senior Revolving Credit Facility and Term Loan due 2022, restrict certain dividends and other specified restricted payments.

As of June 30, 2020, we are in compliance with our debt covenants.

7. Financial Instruments and Fair Value Measurements

We are exposed to market risks, such as changes in commodity pricing, interest rates and currency exchange rates. To manage the volatility related to these exposures, we selectively enter into derivative contracts pursuant to our risk management policies.

A summary of our financial instruments, risk management policies, derivative instruments, hedging activities and fair value measurement can be found in Notes 2 and 15 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. If applicable, updates have been included in the respective sections below.

Cash and Cash Equivalents—At ~~March 31,~~June 30, 2020 and December 31, 2019, we had marketable securities classified as Cash and cash equivalents of ~~$885~~$1,358 million and $389 million, respectively.

Foreign Currency Gain (Loss)—Other income, net, in the Consolidated Statements of Income reflected foreign currency losses of less than $1 million and $7 million, and gains of ~~$11~~$3 million and $14 million for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial Instruments Measured at Fair Value on a Recurring Basis—The following table summarizes financial instruments outstanding ~~as of March 31, 2020 and December 31, 2019~~for the periods presented that are measured at fair value on a recurring basis:


		March 31, 2020						December 31, 2019								June 30, 2020					December 31, 2019
Millions of dollars	Millions of dollars	Notional Amount		Fair Value		Notional Amount		Fair Value		Balance Sheet Classification	Millions of dollars	Notional Amount		Fair Value		Notional Amount		Fair Value		Balance Sheet Classification
Assets–	Assets–										Assets–
Derivatives designated as hedges:	Derivatives designated as hedges:										Derivatives designated as hedges:

Foreign currency	Foreign currency	$	—	$	51	$	—	$	27	Prepaid expenses and other current assets	Foreign currency	$	—	$	20	$	—	$	27	Prepaid expenses and other current assets
Foreign currency	Foreign currency	2,300		351		2,000		214		Other assets	Foreign currency	300		12		2,000		214		Other assets
Interest rates	Interest rates	—		26		—		22		Prepaid expenses and other current assets	Interest rates	—		1		—		22		Prepaid expenses and other current assets
Interest rates	Interest rates	2,246		135		1,940		41		Other assets	Interest rates	252		3		1,940		41		Other assets
Derivatives not designated as hedges:	Derivatives not designated as hedges:										Derivatives not designated as hedges:
Commodities	Commodities	138		9		3		—		Prepaid expenses and other current assets	Commodities	165		55		3		—		Prepaid expenses and other current assets
Foreign currency	Foreign currency	355		13		580		5		Prepaid expenses and other current assets	Foreign currency	235		6		580		5		Prepaid expenses and other current assets
Non-derivatives:	Non-derivatives:										Non-derivatives:
Available-for-sale debt securities	Available-for-sale debt securities	159		157		162		162		Short-term investments	Available-for-sale debt securities	432		433		162		162		Short-term investments
Equity securities	Equity securities	43		43		34		34		Short-term investments	Equity securities	218		218		34		34		Short-term investments
Total	Total	$	5,241	$	785	$	4,719	$	505		Total	$	1,602	$	748	$	4,719	$	505
Liabilities–	Liabilities–										Liabilities–
Derivatives designated as hedges:	Derivatives designated as hedges:										Derivatives designated as hedges:

Commodities											Commodities	$	51	$	2	$	—	$	—	Accrued liabilities
Foreign currency	Foreign currency	$	—	$	33	$	—	$	16	Accrued liabilities	Foreign currency	—		15		—		16		Accrued liabilities
Foreign currency	Foreign currency	650		27		950		53		Other liabilities	Foreign currency	2,355		108		950		53		Other liabilities
Interest rates	Interest rates	—		5		1,000		154		Accrued liabilities	Interest rates	—		1		1,000		154		Accrued liabilities
Interest rates	Interest rates	1,500		760		700		77		Other liabilities	Interest rates	1,500		756		700		77		Other liabilities
Derivatives not designated as hedges:	Derivatives not designated as hedges:										Derivatives not designated as hedges:
Commodities	Commodities	156		37		224		34		Accrued liabilities	Commodities	103		17		224		34		Accrued liabilities
Foreign currency	Foreign currency	604		15		200		1		Accrued liabilities	Foreign currency	603		8		200		1		Accrued liabilities

Total	Total	$	2,910	$	877	$	3,074	$	335		Total	$	4,612	$	907	$	3,074	$	335

All financial instruments in the table above are classified as Level 2. We present the gross assets and liabilities of our derivative financial instruments on the Consolidated Balance Sheets.

At ~~March 31,~~June 30, 2020, our outstanding foreign currency contracts, not designated as hedges, mature from ~~April~~July 2020 to ~~September 2020.~~March 2021. Our commodity contracts, not designated as hedges, mature from ~~April~~July 2020 to ~~June~~December 2020.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Financial Instruments Not Measured at Fair Value on a Recurring Basis—The following table presents the carrying value and estimated fair value of our financial instruments that are not measured at fair value on a recurring basis ~~as of March 31, 2020 and December 31, 2019.~~for the periods presented. Due to the short maturity, the fair value of all non-derivative financial instruments included in Current assets and Current liabilities for which the carrying value approximates fair value are excluded from the table below. Short-term and long-term debt are recorded at amortized cost in the Consolidated Balance Sheets. The carrying and fair values of short-term and of long-term debt ~~exclude~~exclude commercial paper and other miscellaneous ~~short-term~~ debt.


		March 31, 2020						December 31, 2019							June 30, 2020				December 31, 2019
Millions of dollars	Millions of dollars	Carrying Value		Fair Value		Carrying Value		Fair Value		Millions of dollars	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-derivatives:	Non-derivatives:									Non-derivatives:

Liabilities:	Liabilities:									Liabilities:
Short-term debt	Short-term debt	$	711	$	731	$	181	$	215	Short-term debt	$	159	$	159	$	181	$	215
Long-term debt	Long-term debt	12,155		12,222		11,609		12,561		Long-term debt	13,669		14,872		11,609		12,561
Total	Total	$	12,866	$	12,953	$	11,790	$	12,776	Total	$	13,828	$	15,031	$	11,790	$	12,776

All financial instruments in the table above are classified as Level 2.

Net Investment Hedges—The following table summarizes our net investment hedges outstanding ~~at March 31, 2020 and December 31, 2019:~~for the periods presented:

March 31, 2020 December 31, 2019
Millions of euro/dollars Notional Value Notional Value Expiration Date
Equivalent
US$ Equivalent
US$
Foreign currency € 617 $ 650 € 617 $ 650 2027
Foreign-currency denominated debt € 750 $ 821 € 750 $ 842 2022


	June 30, 2020						December 31, 2019
Millions of euro/dollars	Notional Value						Notional Value			Expiration Date
			Equivalent US$				Equivalent US$
Foreign currency	€	617	$	650	€	617	$	650	2027
Foreign-currency denominated debt	€	750	$	841	€	750	$	842	2022

Cash Flow Hedges—The following table summarizes our cash flow hedges outstanding ~~at March 31, 2020 and December 31, 2019:~~for the periods presented:

March 31, 2020 December 31, 2019
Millions of dollars Notional Value Notional Value Expiration Date
Foreign currency $ 2,300 $ 2,300 2021 to 2027
Interest rates 1,500 1,500 2021 to 2024


	June 30, 2020		December 31, 2019
Millions of dollars	Notional Value		Notional Value		Expiration Date
Foreign currency	$	2,005	$	2,300	2021 to 2027
Interest rates	1,500		1,500		2021 to 2024
Commodities	51		—		2021 to 2022

In January 2020, we amended previously existing forward-starting interest rate swaps with a total notional amount of $1,000 million (the “Swaps”) to extend their maturities to July 2023 and April 2024. As of ~~March 31,~~June 30, 2020, the Swaps were designated as cash flow hedges to mitigate the risk of variability in interest rates of future expected debt issuance by July 2023 and April 2024. Other assets as of ~~March 31,~~June 30, 2020 includes $238 million of collateral held with our counterparties related to our forward-starting interest rate swaps; this amount represents the maximum amount of collateral required in accordance with the Swap agreements. Related cash flows are included in financing activities in the Consolidated Statements of Cash Flows.

~~As of March 31, 2020, on a pre-tax basis, $3 million is scheduled to be reclassified from Accumulated other comprehensive loss as an increase to interest expense over the next twelve months.~~

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

In May 2020, we terminated and cash settled $2,000 million in notional value of our cross-currency interest rate swaps, designated as cash flows hedges, maturing in 2021 and 2024. Upon termination of the swaps, we received $346 million from our counterparties. Concurrent with the settlement of the swaps, we entered into $1,705 million cross-currency interest rate swaps with euro notional amounts and maturity dates matching the original swaps. The swaps are designated as cash flow hedges to reduce the variability in the functional currency equivalent cash flows of certain foreign currency denominated intercompany loans.

During the second quarter of 2020, we entered into over-the-counter commodity swaps with a total notional amount of $51 million that were designated as cash flow hedges to manage the volatility of commodity prices related to anticipated purchases of feedstock for the years 2021 and 2022.

As of June 30, 2020, on a pre-tax basis, $6 million is scheduled to be reclassified from Accumulated other comprehensive loss as an increase to interest expense over the next twelve months.

Fair Value Hedges—The following table summarizes our fair value hedges outstanding ~~at March 31, 2020 and December 31, 2019:~~for the periods presented:

March 31, 2020

December 31, 2019

June 30, 2020

December 31, 2019

Millions of dollars

Notional Value

Expiration Date

Millions of dollars

Notional Value

Expiration Date

Interest rates

2,246

2,140

2021 to 2027

Interest rates

252

2,140

2022 to 2026

In January 2020, we entered into ana euro fixed-for-floating interest rate swap to mitigate the change in the fair value of €100 million of our €500 million guaranteed notes due 2026 associated with the risk of variability in the 6-month EURIBOR rate, ~~(the~~the benchmark interest ~~rate).~~rate. The fixed-rate and variable-rate components are settled annually and semi-annually, respectively.

In April 2020, we terminated $2,000 million in notional value of our fixed-for-floating interest rate swaps which were designated as fair value hedges originally set to expire in 2021 and 2027. Upon termination of the fixed-for-floating interest rate swaps, we received $147 million from our counterparties.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Impact on Earnings and Other Comprehensive Income—The following ~~table summarizes~~tables summarize the pre-tax effect of derivative and non-derivative instruments recorded in Accumulated other comprehensive ~~loss~~loss (“AOCI”), the gains (losses) reclassified from AOCI to earnings and additional gains (losses) recognized directly in earnings:



	Effects of Financial Instruments
	Three Months Ended June 30,
	Gain (Loss) Recognized in AOCI						Gain (Loss) Reclassified from AOCI to Income						Gain (Loss) Recognized in Income	Income Statement
Millions of dollars	2020		2019		2020		2019		2020		2019		Classification
Derivatives designated as hedges:
Commodities	$	(2)	$	9	$	—	$	(2)	$	—	$	—	Sales and other operating revenues
Commodities	—		(8)		—		—		—		—		Cost of sales
Foreign currency	(86)		(19)		45		26		14		15		Interest expense
Interest rates	3		(105)		2		—		(6)		46		Interest expense
Derivatives not designated as hedges:
Commodities	—		—		—		—		14		1		Sales and other operating revenues
Commodities	—		—		—		—		77		(22)		Cost of sales
Foreign currency	—		—		—		—		(6)		(3)		Other income, net
Non-derivatives designated as hedges:
Long-term debt	(20)		(11)		—		—		—		—		Other income, net
Total	$	(105)	$	(134)	$	47	$	24	$	93	$	37

Effects of Financial Instruments
Three Months Ended March 31,
Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Income Gain (Loss) Recognized in Income Income Statement
Millions of dollars 2020 2019 2020 2019 2020 2019 Classification
Derivatives designated as hedges:
Commodities $ — $ (50) $ — $ (5) $ — $ — Sales and other operating revenues
Commodities — 46 — 4 — — Cost of sales
Foreign currency 164 70 (53) (39) 16 17 Other income, net; Interest expense
Interest rates (535) (74) — (4) 96 (34) Interest expense
Derivatives not designated as hedges:
Commodities — — — — (9) 2 Sales and other operating revenues
Commodities — — — — (3) 3 Cost of sales
Foreign currency — — — — (4) 19 Other income, net
Non-derivatives designated as hedges:
Long-term debt 22 16 — — — — Other income, net
Total $ (349) $ 8 $ (53) $ (44) $ 96 $ 7

The derivative amounts excluded from the assessment of effectiveness for foreign currency contracts designated as net investment hedges recognized in other comprehensive income for the three months ended ~~March 31, 2020~~ ~~and 2019 were gains of less than $1 million and $2 million, respectively.~~


	Effects of Financial Instruments
	Six Months Ended June 30,
	Gain (Loss) Recognized in AOCI						Gain (Loss) Reclassified from AOCI to Income						Gain (Loss) Recognized in Income	Income Statement
Millions of dollars	2020		2019		2020		2019		2020		2019		Classification
Derivatives designated as hedges:
Commodities	$	(2)	$	(41)	$	—	$	(8)	$	—	$	—	Sales and other operating revenues
Commodities	—		38		—		4		—		—		Cost of sales
Foreign currency	78		51		(8)		(13)		30		32		Interest expense
Interest rates	(532)		(179)		2		(4)		90		73		Interest expense
Derivatives not designated as hedges:
Commodities	—		—		—		—		5		3		Sales and other operating revenues
Commodities	—		—		—		—		74		(19)		Cost of sales
Foreign currency	—		—		—		—		(10)		16		Other income, net
Non-derivatives designated as hedges:
Long-term debt	2		5		—		—		—		—		Other income, net
Total	$	(454)	$	(126)	$	(6)	$	(21)	$	189	$	105

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The derivative amounts excluded from the assessment of effectiveness ~~testing~~for foreign currency contracts designated as net investment hedges recognized in other comprehensive income for the three and six months ended June 30, 2020 were losses of $2 million each, and for the three and six months ended June 30, 2019 were losses of $5 million and $3 million, respectively.

The derivative amounts excluded from the assessment of effectiveness for foreign currency contracts designated as net investment hedges recognized in interest expense for the three and six months ended ~~March 31,~~June 30, 2020 were gains of $3 million and $7 million, respectively, and for the three and six months ended June 30, 2019 were gains of ~~$4 million~~ ~~and~~ $5 million and $10 million, respectively.

The pre-tax effect of the periodic receipt of fixed interest and payment of variable interest associated with our fixed-for-floating interest rate swaps resulted in a $2$1 million and $3 million decrease in interest expense during the three and six months ended ~~March 31,~~June 30, 2020, respectively, and $3$2 million and $5 million increase in interest expense during the three and six months ended ~~March 31, 2019.~~June 30, 2019, respectively.

Investments in Available-for-Sale Debt Securities—The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of our outstanding available-for-sale debt securities:

Millions of dollars Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
Available-for-sale debt securities:
Bonds at March 31, 2020 $ 159 $ 1 $ (3) $ 157
Bonds at December 31, 2019 162 — — 162


Millions of dollars	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Debt securities at June 30, 2020	$	432	$	1	$	—	$	433
Debt securities at December 31, 2019	162		—		—		162

NaN allowance for credit losses related to our available-for-sale debt securities was recorded for the ~~three~~six months ended ~~March 31,~~June 30, 2020 ~~and~~or for the year ended December 31, 2019.

As of ~~March 31,~~June 30, 2020, bonds classified as available-for-sale debt securities had maturities between 104 months and 4239 months.

The proceeds from maturities and sales of our available-for-sale-debt securities during the three and six months ended ~~March 31,~~June 30, 2020 and 2019 are summarized in the following table:

Three Months Ended
March 31,
Millions of dollars 2020 2019
Proceeds from maturities of available-for-sale debt securities $ — $ 308


	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Proceeds from maturities of available-for-sale debt securities	$	—	$	23	$	—	$	331
Proceeds from sales of available-for-sale debt securities	—		180		—		180

NaN ~~proceeds were received and 0~~ gain or loss was realized in connection with the sales of our available-for-sale debt securities during the three and six months ended ~~March 31, 2020~~June 30, 2020. The gross realized gains and ~~2019.~~losses associated with the sale of available-for-sale debt securities during the three and six months ended June 30, 2019 were less than $1 million in each respective period.

We had 0 available-for-sale debt securities which were in a continuous unrealized loss position for less than or greater than twelve months as of ~~March 31,~~June 30, 2020 and December 31, 2019.

Investments in Equity Securities—Our investment in equity securities primarily consist of limited partnership investments. At ~~March 31,~~June 30, 2020 and December 31, 2019, we had investments in equity securities with a notional amount of ~~$43~~$218 million and $34 million, respectively, and a fair value of ~~$43~~$218 million and $34 million, respectively. These investments may be redeemed ~~on a weekly basis.~~

~~We received proceeds of $1 million and $162 million related to~~within 7 days following written notice from the ~~sale of our investments in equity securities during the three months ended March 31, 2020 and 2019, respectively.~~Company.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

We received proceeds $1 million related to the sale of our investments in equity securities during the six months ended June 30, 2020 and $170 million and $332 million during the three and six months ended in June 30, 2019, respectively. NaN proceeds related to the sale of investments in equity securities were received during the three months ended June 30, 2020.

The following table summarizes the portion of unrealized gains and losses for the equity securities that are outstanding ~~as of March 31, 2020 and 2019:~~for the periods presented:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Net gains recognized during the period		$	—	$	7
Net gains (losses) recognized during the period						Net gains (losses) recognized during the period	$	—	$	(1)	$	—	$	6
Less: Net gains recognized during the period on securities sold	Less: Net gains recognized during the period on securities sold	—		1		Less: Net gains recognized during the period on securities sold	—		8		—		9
Unrealized gains recognized during the period		$	—	$	6
Unrealized losses recognized during the period						Unrealized losses recognized during the period	$	—	$	(9)	$	—	$	(3)

8. Income Taxes

Our effective income tax rate for the three months ended ~~March 31,~~June 30, 2020 was ~~34.4%~~-11.3% compared with ~~19.9%~~14.4% for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, the effective income tax rate was 8.6% compared with 16.9% for the six months ended June 30, 2019. Our effective income tax rate fluctuates based on, among other factors, changes in pretax income in countries with varying statutory tax rates, changes in valuation allowances, changes in foreign exchange gains/losses, the amount of exempt income, changes in unrecognized tax benefits associated with uncertain tax positions, and changes in tax laws.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act, also known as the “CARES ~~Act”. As~~Act,” which contains numerous income tax provisions and other stimulus measures. We anticipate that several of the tax measures will favorably impact our income tax on our Consolidated Financial Statements for the year ended December 31, 2020. Based on our analysis as of June 30, 2020, we recorded an overall tax benefit including a ~~result~~remeasurement of our deferred income tax balances. We continue to assess the impact that the CARES Act ~~we remeasured~~will have on our ~~U.S. deferred tax liabilities resulting in an increase to our~~Company.

Compared with the three and six months ended June 30, 2019, the lower effective tax rate for the three and six months ended ~~March 31,~~June 30, 2020 ~~compared~~was primarily attributable to an anticipated benefit resulting from various provisions of the ~~three months ended March 31, 2019. This increase was partially offset by~~CARES Act and to the increased relative impact of exempt income due to decreased pretax income.

~~We are continuing~~ This is partially offset by changes in the pretax income in countries with varying statutory tax rates and tax benefits related to ~~analyze the impact of the CARES Act; however, we anticipate an overall favorable income tax impact on our Consolidated Financial Statements during the remainder of 2020.~~

prior year research and development activities.

9. Commitments and Contingencies

Commitments—We have various purchase commitments for materials, supplies and services incidental to the ordinary conduct of business, generally for quantities required for our businesses and at prevailing market prices. These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements. As of ~~March 31,~~June 30, 2020, we had capital expenditure commitments, which we incurred in our normal course of business, including commitments of approximately ~~$783~~$475 million related to building our new PO/TBA plant in Houston, Texas.

Financial Assurance Instruments—We have obtained letters of credit, performance and surety bonds and have issued financial and performance guarantees to support trade payables, potential liabilities and other obligations. Considering the frequency of claims made against the financial instruments we use to support our obligations, and the magnitude of those financial instruments in light of our current financial position, management does not expect that any claims against or draws on these instruments would have a material adverse effect on our Consolidated Financial Statements. We have not experienced any unmanageable difficulty in obtaining the required financial assurance instruments for our current operations.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Environmental Remediation—Our accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled ~~$130~~$129 million and $132 million as of ~~March 31,~~June 30, 2020 and December 31, 2019, respectively. At ~~March 31,~~June 30, 2020, the accrued liabilities for individual sites range from less than $1 million to $15 million. The remediation expenditures are expected to occur over a number of years, and not concentrated in any single year. In our opinion, it is reasonably possible that losses in excess of the liabilities recorded may have been incurred. However, we cannot estimate any amount or range of such possible additional losses. New information about sites, new technology or future developments such as involvement in investigations by regulatory agencies, could require us to reassess our potential exposure related to environmental matters.

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~~LYONDELLBASELL INDUSTRIES N.V.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

Indemnification—We are parties to various indemnification arrangements, including arrangements entered into in connection with acquisitions, divestitures and the formation and dissolution of joint ventures. Pursuant to these arrangements, we provide indemnification to and/or receive indemnification from other parties in connection with liabilities that may arise in connection with the transactions and in connection with activities prior to completion of the transactions. These indemnification arrangements typically include provisions pertaining to ~~third party~~third-party claims relating to environmental and tax matters and various types of litigation. As of ~~March 31,~~June 30, 2020, we had not accrued any significant amounts for our indemnification obligations, and we are not aware of other circumstances that would likely lead to significant future indemnification obligations. We cannot determine with certainty the potential amount of future payments under the indemnification arrangements until events arise that would trigger a liability under the arrangements.

As part of our technology licensing contracts, we give indemnifications to our licensees for liabilities arising from possible patent infringement claims with respect to certain proprietary licensed technologies. Such indemnifications have a stated maximum amount and generally cover a period of 5 to 10 years.

Legal Proceedings—We are subject to various lawsuits and claims, including but not limited to, matters involving contract disputes, environmental damages, personal injury and property damage. We vigorously defend ourselves and prosecute these matters as appropriate.

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor legal proceedings in which we are a party. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial, mediation or other resolution. We regularly assesses the adequacy of legal accruals based on our professional judgment, experience and the information available regarding our cases.

Based on a consideration of all relevant facts and circumstances, we do not believe the ultimate outcome of any currently pending lawsuit against us will have a material adverse effect upon our operations, financial condition or ~~financial statements.~~Consolidated Financial Statements.

10. Shareholders’ Equity and Redeemable Non-controlling Interests

Shareholders’ Equity

Dividend Distributions—~~In March 2020, we~~The following table summarizes the dividends paid ~~a cash dividend of $1.05 per share for an aggregate of $351 million to shareholders of record on March 2, 2020.~~in the periods presented:


Millions of dollars, except per share amounts	Dividend Per Ordinary Share		Aggregate Dividends Paid		Date of Record
March 2020	$	1.05	$	351	March 2, 2020
June 2020	1.05		350		June 8, 2020

	$	2.10	$	701

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Share Repurchase Authorization—In ~~September 2019,~~May 2020, our shareholders approved a proposal to authorize us to repurchase up to ~~33.3~~34.0 million ordinary shares, through ~~March 12,~~November 29, 2021 (“~~September 2019~~May 2020 Share Repurchase Authorization”), which superseded any prior repurchase authorizations. The timing and amount of these repurchases, which are determined based on our evaluation of market conditions and other factors, may be executed from time to time through open market or privately negotiated transactions. The repurchased shares, which are recorded at cost, are classified as Treasury stock and may be retired or used for general corporate purposes, including for various employee benefit and compensation plans.

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~~LYONDELLBASELL INDUSTRIES N.V.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

The following table summarizes our share repurchase activity for the periods presented:


Millions of dollars, except shares and per share amounts	Millions of dollars, except shares and per share amounts	Shares Repurchased	Average Purchase Price		Total Purchase Price, Including Commissions and Fees		Millions of dollars, except shares and per share amounts	Shares Repurchased	Average Purchase Price		Total Purchase Price, Including Commissions and Fees
For three months ended March 31, 2020:
For six months ended June 30, 2020:							For six months ended June 30, 2020:
September 2019 Share Repurchase Authorization	September 2019 Share Repurchase Authorization	50,685	$	78.93	$	4	September 2019 Share Repurchase Authorization	50,685	$	78.93	$	4
May 2020 Share Repurchase Authorization							May 2020 Share Repurchase Authorization	—	$	—	$	—
								50,685	$	78.93	$	4
For three months ended March 31, 2019:

For six months ended June 30, 2019:							For six months ended June 30, 2019:
June 2018 Share Repurchase Authorization	June 2018 Share Repurchase Authorization	5,648,900	$	86.38	$	488	June 2018 Share Repurchase Authorization	5,648,900	$	86.38	$	488

Due to the timing of settlements, total cash paid for share repurchases for the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019 was $4 million and $512 million, respectively.

Ordinary Shares—The changes in the outstanding amounts of ordinary shares are as follows:


		Three Months Ended March 31,				Six Months Ended June 30,
		2020	2019		2020	2019
Ordinary shares outstanding:	Ordinary shares outstanding:			Ordinary shares outstanding:
Beginning balance	Beginning balance	333,476,883	375,696,661	Beginning balance	333,476,883	375,696,661
Share-based compensation	Share-based compensation	196,037	235,550	Share-based compensation	225,367	256,140

Employee stock purchase plan	Employee stock purchase plan	81,215	42,792	Employee stock purchase plan	178,239	83,473
Purchase of ordinary shares	Purchase of ordinary shares	(50,685)	(5,648,900)	Purchase of ordinary shares	(50,685)	(5,648,900)
Ending balance	Ending balance	333,703,450	370,326,103	Ending balance	333,829,804	370,387,374

Treasury Shares—The changes in the amounts of treasury shares held by the Company are as follows:


		Three Months Ended March 31,				Six Months Ended June 30,
		2020	2019		2020	2019
Ordinary shares held as treasury shares:	Ordinary shares held as treasury shares:			Ordinary shares held as treasury shares:
Beginning balance	Beginning balance	6,568,745	24,513,619	Beginning balance	6,568,745	24,513,619
Share-based compensation	Share-based compensation	(196,037)	(235,550)	Share-based compensation	(225,367)	(256,140)

Employee stock purchase plan	Employee stock purchase plan	(81,215)	(42,792)	Employee stock purchase plan	(178,239)	(83,473)
Purchase of ordinary shares	Purchase of ordinary shares	50,685	5,648,900	Purchase of ordinary shares	50,685	5,648,900

Ending balance	Ending balance	6,342,178	29,884,177	Ending balance	6,215,824	29,822,906

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Accumulated Other Comprehensive ~~Income (Loss)~~Loss—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019 are presented in the following tables:


Millions of dollars	Millions of dollars	Financial Derivatives		Unrealized Gains on Available -for-Sale Debt Securities		Defined Benefit Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustments		Total		Millions of dollars	Financial Derivatives		Unrealized Gains on Available -for-Sale Debt Securities		Defined Benefit Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustments		Total
Balance – January 1, 2020	Balance – January 1, 2020	$	(200)	$	—	$	(711)	$	(873)	$	(1,784)	Balance – January 1, 2020	$	(200)	$	—	$	(711)	$	(873)	$	(1,784)
Other comprehensive loss before reclassifications		(388)		(3)		—		(195)		(586)
Other comprehensive income (loss) before reclassifications												Other comprehensive income (loss) before reclassifications	(456)		1		—		(133)		(588)
Tax (expense) benefit before reclassifications	Tax (expense) benefit before reclassifications	88		1		—		(4)		85		Tax (expense) benefit before reclassifications	95		—		—		—		95
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	(53)		—		14		—		(39)		Amounts reclassified from accumulated other comprehensive loss	(6)		—		28		—		22
Tax (expense) benefit	Tax (expense) benefit	15		—		(4)		—		11		Tax (expense) benefit	3		—		(7)		—		(4)
Net other comprehensive income (loss)	Net other comprehensive income (loss)	(338)		(2)		10		(199)		(529)		Net other comprehensive income (loss)	(364)		1		21		(133)		(475)
Balance – March 31, 2020		$	(538)	$	(2)	$	(701)	$	(1,072)	$	(2,313)
Balance – June 30, 2020												Balance – June 30, 2020	$	(564)	$	1	$	(690)	$	(1,006)	$	(2,259)


Millions of dollars	Millions of dollars	Financial Derivatives		Defined Benefit Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustments		Total		Millions of dollars	Financial Derivatives		Unrealized Gains on Available -for-Sale Debt Securities		Defined Benefit Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustments		Total
Balance – January 1, 2019	Balance – January 1, 2019	$	(68)	$	(442)	$	(853)	$	(1,363)	Balance – January 1, 2019	$	(68)	$	—	$	(442)	$	(853)	$	(1,363)
Other comprehensive loss before reclassifications		(19)		—		(7)		(26)
Other comprehensive income (loss) before reclassifications										Other comprehensive income (loss) before reclassifications	(129)		1		—		14		(114)
Tax (expense) benefit before reclassifications	Tax (expense) benefit before reclassifications	4		—		(3)		1		Tax (expense) benefit before reclassifications	29		—		—		(6)		23
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	(45)		7		—		(38)		Amounts reclassified from accumulated other comprehensive loss	(21)		—		14		—		(7)
Tax (expense) benefit	Tax (expense) benefit	10		(2)		—		8		Tax (expense) benefit	3		—		(4)		—		(1)
Net other comprehensive income (loss)	Net other comprehensive income (loss)	(50)		5		(10)		(55)		Net other comprehensive income (loss)	(118)		1		10		8		(99)
Balance – March 31, 2019		$	(118)	$	(437)	$	(863)	$	(1,418)
Balance – June 30, 2019										Balance – June 30, 2019	$	(186)	$	1	$	(432)	$	(845)	$	(1,462)

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The amounts reclassified out of each component of Accumulated other comprehensive loss are as follows:


		Three Months Ended March 31,							Affected Line Item on the Consolidated Statements of Income		Three Months Ended June 30,									Six Months Ended June 30,		Affected Line Item on the Consolidated Statements of Income
Millions of dollars	Millions of dollars	2020		2019			Affected Line Item on the Consolidated Statements of Income			2020			2019			2020			2019		Affected Line Item on the Consolidated Statements of Income
Reclassification adjustments for:	Reclassification adjustments for:
Financial derivatives:	Financial derivatives:						Financial derivatives:
Foreign currency	Foreign currency	$	(53)	$	(39)	Other income, net	Foreign currency	$	45		$	26		$	(8)		$	(13)		Other income, net
Commodities	Commodities	—		(6)		Sales and other operating revenue	Commodities	—			(2)			—			(8)			Sales and other operating revenue
Commodities	Commodities	—		4		Cost of sales	Commodities	—			—			—			4			Cost of sales
Interest rates	Interest rates	—		(4)		Interest expense	Interest rates	2			—			2			(4)			Interest expense
Income tax benefit		(15)		(10)		Provision for income taxes
Income tax expense (benefit)							Income tax expense (benefit)	12			7			(3)			(3)			Provision for income taxes
Financial derivatives, net of tax	Financial derivatives, net of tax	(38)		(35)			Financial derivatives, net of tax	35			17			(3)			(18)
Amortization of defined pension items:	Amortization of defined pension items:						Amortization of defined pension items:
Prior service cost	Prior service cost	1		—		Other income, net	Prior service cost	1			1			2			1			Other income, net
Actuarial loss	Actuarial loss	13		7		Other income, net	Actuarial loss	13			6			26			13			Other income, net

Income tax expense		4		2		Provision for income taxes
Income tax expense (benefit)							Income tax expense (benefit)	3			2			7			4			Provision for income taxes
Defined pension items, net of tax	Defined pension items, net of tax	10		5			Defined pension items, net of tax	11			5			21			10
Total reclassifications, before tax	Total reclassifications, before tax	(39)		(38)			Total reclassifications, before tax	61			31			22			(7)
Income tax benefit		(11)		(8)		Provision for income taxes
Income tax expense (benefit)							Income tax expense (benefit)	15			9			4			1			Provision for income taxes
Total reclassifications, after tax	Total reclassifications, after tax	$	(28)	$	(30)	Amount included in net income	Total reclassifications, after tax	$	46		$	22		$	18		$	(8)		Amount included in net income

Non-controlling Interest—In February 2019, we increased our interest in our subsidiary La Porte Methanol Company, L.P., from 85% to 100%, for cash consideration of $63 million.

Redeemable Non-controlling Interests

Our redeemable non-controlling interests relate to shares of cumulative perpetual special stock (“redeemable non-controlling interest stock”) issued by our consolidated subsidiary, formerly known as A. Schulman. As of June 30, 2020 and December 31, 2019, we had 115,374 shares of redeemable non-controlling interest stock outstanding.

In February and May 2020, we paid cash dividends of $15.00 per share to our redeemable non-controlling interest shareholders of record as of January 15, 2020 and April 15, 2020, respectively. These dividends totaled $3 million for each of the six months ended June 30, 2020 and 2019.

2426

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

~~Redeemable Non-controlling Interests~~

~~Our redeemable non-controlling interests relate to shares of cumulative perpetual special stock (“redeemable non-controlling~~

interest stock”) issued by our consolidated subsidiary, formerly known as A. Schulman. As of March 31, 2020 and December 31, 2019, we had 115,374 shares of redeemable non-controlling interest stock outstanding.

In February 2020, we paid a cash dividend of $15.00 per share to our redeemable non-controlling interest shareholders of record as of January 15, 2020. These dividends totaled $2 million for both the three months ended March 31, 2020 and 2019, respectively.

11. Per Share Data

Basic earnings per share are based upon the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share includes the effect of certain stock option awards and other equity-based compensation awards. We have unvested restricted stock units that are considered participating securities for earnings per share.

Earnings per share data and dividends declared per share of common stock are as follows:

Three Months Ended March 31,
2020 2019
Millions of dollars Continuing
Operations Discontinued
Operations Continuing
Operations Discontinued
Operations
Net income $ 143 $ 1 $ 817 $ —
Dividends on redeemable non-controlling interest stock (2) — (2) —
Net income attributable to participating securities — — (1) —
Net income attributable to ordinary shareholders – basic and diluted $ 141 $ 1 $ 814 $ —
Millions of shares, except per share amounts
Basic weighted average common stock outstanding 334 334 372 372
Effect of dilutive securities — — — —
Potential dilutive shares 334 334 372 372
Earnings per share:
Basic $ 0.42 $ — $ 2.19 $ —
Diluted $ 0.42 $ — $ 2.19 $ —


	Three Months Ended June 30,
	2020						2019
Millions of dollars	Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations
Net income (loss)	$	315	$	(1)	$	1,006	$	(3)


Dividends on redeemable non-controlling interest stock	(1)		—		(1)		—
Net (income) loss attributable to participating securities	(1)		—		(2)		—
Net income (loss) attributable to ordinary shareholders – basic and diluted	$	313	$	(1)	$	1,003	$	(3)

Millions of shares, except per share amounts
Basic weighted average common stock outstanding	334		334		370		370

Effect of dilutive securities	—		—		—		—
Potential dilutive shares	334		334		370		370

Earnings (loss) per share:
Basic	$	0.94	$	—	$	2.71	$	(0.01)
Diluted	$	0.94	$	—	$	2.71	$	(0.01)

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


	Six Months Ended June 30,
	2020						2019
Millions of dollars	Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations
Net income (loss)	$	458	$	—	$	1,823	$	(3)


Dividends on redeemable non-controlling interest stock	(3)		—		(3)		—
Net (income) loss attributable to participating securities	(1)		—		(3)		—
Net income (loss) attributable to ordinary shareholders – basic and diluted	$	454	$	—	$	1,817	$	(3)

Millions of shares, except per share amounts
Basic weighted average common stock outstanding	334		334		371		371
Effect of dilutive securities	—		—		—		—

Potential dilutive shares	334		334		371		371

Earnings (loss) per share:
Basic	$	1.36	$	—	$	4.90	$	(0.01)
Diluted	$	1.36	$	—	$	4.89	$	(0.01)

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

12. Segment and Related Information

Our operations are managed by senior executives who report to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the operating results of each of the operating segments for performance evaluation and resource allocation. The activities of each of our segments from which they earn revenues and incur expenses are described below:

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

•Olefins and Polyolefins—Europe, Asia, International (“O&P—EAI”). Our O&P—EAI segment produces and markets olefins and co-products, polyethylene and polypropylene.

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

•Advanced Polymer Solutions (“APS”). Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers, which includes Catalloy and polybutene-1.

•Refining. Our Refining segment refines heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast into refined products, including gasoline and distillates.

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

Our chief operating decision maker uses EBITDA as the primary measure for reviewing profitability of our segments, and therefore, we have presented EBITDA for all segments. We define EBITDA as earnings before interest, income taxes, and depreciation and amortization.

“Other” includes intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains or losses and components of pension and other postretirement benefit costs other than service costs. Sales between segments are made primarily at prices approximating prevailing market prices.

Summarized financial information concerning reportable segments is shown in the following tables for the periods presented:

Three Months Ended March 31, 2020
Millions of dollars O&P–
Americas O&P–
EAI I&D APS Refining Technology Other Total
Sales and other operating revenues:
Customers $ 1,173 $ 2,064 $ 1,732 $ 1,093 $ 1,336 $ 96 $ — $ 7,494
Intersegment 619 160 38 3 112 26 (958) —
1,792 2,224 1,770 1,096 1,448 122 (958) 7,494
Income (loss) from equity investments 2 (3) 2 (1) — — — —
EBITDA 366 189 203 113 (272) 56 (9) 646


	Three Months Ended June 30, 2020
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:
Customers	$	1,073	$	1,642	$	1,140	$	700	$	854	$	137	$	—	$	5,546
Intersegment	360		60		17		5		65		40		(547)		—
	1,433		1,702		1,157		705		919		177		(547)		5,546
Income from equity investments	7		51		3		—		—		—		—		61
EBITDA	248		185		101		(44)		165		112		(7)		760

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


		Three Months Ended March 31, 2019																															Three Months Ended June 30, 2019
Millions of dollars	Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total		Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:	Sales and other operating revenues:																	Sales and other operating revenues:
Customers	Customers	$	1,393	$	2,343	$	1,852	$	1,338	$	1,743	$	109	$	—	$	8,778	Customers	$	1,325	$	2,283	$	2,020	$	1,257	$	2,011	$	152	$	—	$	9,048
Intersegment	Intersegment	718		192		42		1		139		32		(1,124)		—		Intersegment	789		222		42		1		169		21		(1,244)		—
		2,111		2,535		1,894		1,339		1,882		141		(1,124)		8,778			2,114		2,505		2,062		1,258		2,180		173		(1,244)		9,048
Income from equity investments		11		51		2		—		—		—		—		64
Income (loss) from equity investments																		Income (loss) from equity investments	12		52		2		(2)		—		—		—		64
EBITDA	EBITDA	516		296		390		148		(15)		83		10		1,428		EBITDA	635		331		448		120		(66)		107		4		1,579


	Six Months Ended June 30, 2020
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:
Customers	$	2,246	$	3,706	$	2,872	$	1,793	$	2,190	$	233	$	—	$	13,040
Intersegment	979		220		55		8		177		66		(1,505)		—
	3,225		3,926		2,927		1,801		2,367		299		(1,505)		13,040
Income (loss) from equity investments	9		48		5		(1)		—		—		—		61
EBITDA	614		374		304		69		(107)		168		(16)		1,406


	Six Months Ended June 30, 2019
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:
Customers	$	2,718	$	4,626	$	3,872	$	2,595	$	3,754	$	261	$	—	$	17,826
Intersegment	1,507		414		84		2		308		53		(2,368)		—
	4,225		5,040		3,956		2,597		4,062		314		(2,368)		17,826
Income (loss) from equity investments	23		103		4		(2)		—		—		—		128
EBITDA	1,151		627		838		268		(81)		190		14		3,007

Operating results for our O&P–Americas segment ~~include charges of $111 million in the first quarter of 2020, primarily related to~~includes LCM inventory valuation charges of $73 million during the first six months of 2020, primarily driven ~~primarily~~ by declines in the prices of heavy liquids and ethylene. During the second quarter of 2020, operating results for our O&P–Americas segment include a LCM inventory valuation benefit of $38 million largely driven by recovery of market prices of heavy liquids and ethylene which were partially offset by declines in the price of polymers.

Our O&P–EAI segment results for the second quarter and first ~~quarter~~six months of 2020 were negatively impacted by ~~a $36~~$34 million and $70 million of LCM inventory valuation ~~charge~~charges, respectively, largely due to a decline in the price of ~~naphtha.~~ naphtha in the first quarter of 2020 and a decline in the price of polymers in the second quarter of 2020.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Operating results for our I&D segment in the second quarter and first ~~quarter~~six months of 2020 reflect ~~a $78~~$20 million and $98 million LCM ~~charge~~inventory valuation charges, respectively, driven by declines in the prices of various gasoline blending components and ~~butane.~~ butane in the first quarter of 2020 and declines in the prices of benzene and styrene, partially offset by recoveries in the prices of various gasoline blending components and butane, during the second quarter of 2020.

Our APS segment results for the second quarter and first ~~quarter~~six months of 2020 were negatively impacted by ~~a $2~~$67 million and $69 million LCM ~~charge~~inventory valuation charges, respectively, mainly due to a decline in the price of polymers.

In our Refining segment, operating results ~~were reduced by a $192 million~~include LCM inventory ~~charge in~~valuation charges of $13 million during the first ~~quarter~~six months of 2020, primarily driven by ~~a decline~~declines in the prices of crude oil and refined products. During the second quarter of 2020, our Refining segment operating results include a LCM inventory valuation benefit of $179 million primarily due to the recovery of market prices of crude oil and refined products.

Our APS segment results ~~for the first quarters of 2020 and 2019 included $14 million and $16 million of~~include integration costs associated with our 2018 acquisition of A. Schulman for the second quarter of 2020 and 2019 of $16 million and $19 million, respectively, and for the first six months of 2020 and 2019 of $30 million and $35 million, respectively.

A reconciliation of EBITDA to Income from continuing operations before income taxes is shown in the following table for each of the periods presented:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
EBITDA:	EBITDA:					EBITDA:
Total segment EBITDA	Total segment EBITDA	$	655	$	1,418	Total segment EBITDA	$	767	$	1,575	$	1,422	$	2,993
Other EBITDA	Other EBITDA	(9)		10		Other EBITDA	(7)		4		(16)		14
Less:	Less:					Less:
Depreciation and amortization expense	Depreciation and amortization expense	(342)		(322)		Depreciation and amortization expense	(356)		(328)		(698)		(650)
Interest expense	Interest expense	(89)		(92)		Interest expense	(125)		(81)		(214)		(173)
Add:	Add:					Add:
Interest income	Interest income	3		6		Interest income	4		5		7		11
Income from continuing operations before income taxes	Income from continuing operations before income taxes	$	218	$	1,020	Income from continuing operations before income taxes	$	283	$	1,175	$	501	$	2,195

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

This discussion should be read in conjunction with the information contained in our Consolidated Financial Statements, and the accompanying notes elsewhere in this report. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell Industries N.V. together with its consolidated subsidiaries (“LyondellBasell N.V.”).

OVERVIEW

Results were lower in the second quarter and first ~~quarter~~six months of 2020 relative to the ~~first quarter~~comparative 2019 periods, primarily reflecting lower margins and volumes in several ~~segments as~~segments. In the first six months of 2020, we demonstrated the value of our core strengths in operational excellence, cost management and capital discipline by delivering resilient results despite declines in economic activity associated with the global ~~economy experienced disruptions during the quarter. Events surrounding the ongoing novel strain of coronavirus, causing a pandemic referred~~response to ~~as COVID-19,~~COVID-19. Our olefins and ~~the significant drop in the price of oil continue~~polyolefins businesses continued to ~~evolve and impact global markets for our products. As of March 31, 2020, all of our major global manufacturing sites were operational, and~~benefit from strong demand for ~~products~~polymers used in consumer-driven packaging and ~~medical applications remained robust. In response to lower demand for certain products, the Company has temporarily idled production at several small plants in the~~healthcare applications. As expected, our Intermediates & Derivatives, Refining and Advanced Polymer Solutions ~~segment serving automotive end markets and reduced production rates at other plants. Lower oil prices and reduced~~segments were impacted by significant reductions in demand for transportation fuels ~~are affecting both volumes~~ and ~~margins~~polymers utilized in automotive manufacturing and other durable goods markets. We believe the pandemic-driven decline in demand bottomed during the second quarter. As the quarter progressed, demand and prices for polyethylene exports from North America improved and the U.S. ethane feedstock advantage returned during May and June of 2020 with rebounding crude oil prices. We applied our ~~Refining~~experience with the first quarter progression of events in Asia to manage our global businesses and ~~Intermediates~~generate $1.3 billion of cash from operating activities during a challenging second quarter. We also moved quickly to strengthen our balance sheet and ~~Derivatives segments.~~

~~The Company has developed strategies~~bolster liquidity, and ~~is implementing measures~~believe we remain well-positioned to respond to a variety of economic scenarios. To reduce operational and financial risk, the Company is postponing selected growth projects and planned maintenance, including slowing construction activities on our PO/TBA plant in Houston, Texas. We currently expect thatnavigate through these actions will reduce 2020 capital expenditures to $1.9 billion, including investments in our U.S. and European PO joint ventures, which represents a 20% decrease compared to our budget as of December 31, 2019.volatile market conditions.

During the first ~~quarter~~six months of 2020, we recognized a lower of cost or market (“LCM”) inventory valuation charge of ~~$419 million. This charge is~~$323 million related to the ~~recent~~ decline in pricing for many of our raw material and finished goods inventories largely driven by the current economic conditions. Results for our second quarter of 2020 include a LCM inventory valuation benefit of $96 million largely driven by the recovery of market prices of crude oil and refined products since March 31, 2020. Further sustained price declines in our finished goods and raw materials could result in future LCM inventory valuation charges during the remainder of 2020. The extent to which further charges may occur is dependent on the pool-specific product prices and composition within each individual dollar value LIFO pool at the balance sheet date. However, if pricing trends ~~reverse,~~improve, some or all of these charges could be reversed in future quarterly interim periods during 2020.

Events surrounding the ongoing COVID-19 pandemic, continue to evolve and impact global markets and demand for our products. We assessed accounting matters that generally require consideration of forecasted financial information based on the information reasonably available to us and the uncertain future impacts of COVID-19 and ~~volatility in commodity prices. Accounting matters assessed included, but were not limited to,~~ the carrying value of our goodwill and other long-lived assets, inventory, valuation allowances for tax assets and expected credit losses. Other than the inventory valuation charges noted above, there were no other impacts to our consolidated financial statements for the first quarter of 2020 resulting from our assessments.related economic impacts. We will continue to assess the potential financial statement impacts of COVID-19 and commodity price volatility throughout the duration of the pandemic in accordance with our corporate accounting policies.

The extent of the impact of the pandemic and the drop in the oil price on our operational and financial performance will depend on future developments which are uncertain and cannot be predicted. An extended period of economic disruption could have a material adverse impact on our business, results of operations, access to sources of liquidity and financial condition. While it is too early to predict the magnitude and duration of the downturn, we believe we are well-positioned to face this volatile environment and prepare the company for an eventual recovery of the economy. We believe that our current available liquidity and cash from operating activities provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due.

We remain committed to the health and safety of our employees, contractors and communities and are following governmental policies and recommendations related to the virus. Our manufacturing operations have been designated as an essential industry to support society’s needs during the pandemic in the majority of the regions in which we operate.

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Significant items that affected our results during the second quarter and first ~~quarter~~six months of 2020 relative to the second quarter and first ~~quarter~~six months of 2019 include:

•~~Lower~~ O&P–Americas results declined primarily due to a decline in olefin and polyolefins ~~margins while olefins margins improved;~~margins;

•O&P–EAI results ~~benefited from improved~~declined due to lower olefin ~~volumes~~ and ~~margins, which was more than offset by lower equity income and polyolefin results;~~polyolefins margins;

•I&D segment results declined due to margin decreases primarily driven by our intermediate ~~chemicals;~~chemicals and oxyfuels and related products businesses; and

•~~Lower Refining~~APS segment results ~~due to a decline in refining margins~~declined driven by lower compounding and solutions volumes.

Other noteworthy items since the beginning of the year include the following:

•Launched production at our U.S. Gulf Coast high-density polyethylene plant using LyondellBasell's next-generation Hyperzone technology;

•Expanding our presence in China with definitive agreements for an integrated olefins and polyolefins joint venture with Liaoning Bora Enterprise Group using our polyolefin technologies;

•In April 2020, issued $2,000 million of guaranteed senior notes. Net proceeds from the sale of the notes totaled $1,974 million; and

•In April 2020, we repaid $500 million outstanding under our Senior Revolving Credit Facility and $500 million outstanding under our U.S. Receivables Facility.

Results of operations for the periods discussed are presented in the table below:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	Sales and other operating revenues	$	7,494	$	8,778	Sales and other operating revenues	$	5,546	$	9,048	$	13,040	$	17,826
Cost of sales	Cost of sales	6,868		7,446		Cost of sales	4,894		7,542		11,762		14,988
Selling, general and administrative expenses	Selling, general and administrative expenses	295		287		Selling, general and administrative expenses	288		302		583		589
Research and development expenses	Research and development expenses	27		28		Research and development expenses	25		27		52		55
Operating income	Operating income	304		1,017		Operating income	339		1,177		643		2,194
Interest expense	Interest expense	(89)		(92)		Interest expense	(125)		(81)		(214)		(173)
Interest income	Interest income	3		6		Interest income	4		5		7		11
Other income, net	Other income, net	—		25		Other income, net	4		10		4		35
Income from equity investments	Income from equity investments	—		64		Income from equity investments	61		64		61		128
Provision for income taxes		75		203
Provision for (benefit from) income taxes						Provision for (benefit from) income taxes	(32)		169		43		372
Income from continuing operations	Income from continuing operations	143		817		Income from continuing operations	315		1,006		458		1,823
Income from discontinued operations, net of tax		1		—
Loss from discontinued operations, net of tax						Loss from discontinued operations, net of tax	(1)		(3)		—		(3)
Net income	Net income	$	144	$	817	Net income	$	314	$	1,003	$	458	$	1,820

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RESULTS OF OPERATIONS

Revenues—Revenues decreased by ~~$1,284~~$3,502 million, or ~~15%~~39%, in the ~~first~~second quarter of 2020 compared to the second quarter of 2019 and by $4,786 million, or 27%, in the first ~~quarter~~six months of 2020 compared to the first six months of 2019. Average sales prices in the second quarter and the first ~~quarter~~six months of 2020 were lower for most of our products as sales prices generally correlate with crude oil prices, which decreased relative to the corresponding ~~period~~periods in 2019. These lower prices led to a ~~14%~~37% and 24% decrease in revenue in the second quarter and the first six months of 2020, respectively. Lower sales volumes resulted in a revenue decrease of 1% and 2% relative to the second quarter and first six months of ~~2020.~~2019, respectively. Unfavorable foreign exchange impacts also resulted in a revenue decrease of 1% each in the second quarter and the first ~~quarter~~six months of 2020. ~~Sales volumes were relatively unchanged in first quarter of 2020 compared to the first quarter of 2019.~~

Cost of Sales—Cost of sales decreased by ~~$578~~$2,648 million, or 8%35%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $3,226 million, or 22%, in the first six months of 2020 compared to the first six months of 2019. This decrease primarily related to lower feedstock and energy costs. ~~Cost of sales in~~

During the first ~~quarter~~six months of 2020, ~~includes~~we recognized LCM inventory valuation charges ~~totaling $419~~of $323 million related to the decline in pricing for many of our ~~Refining, O&P–Americas, I&D, O&P–EAI~~raw material and ~~APS segments.~~finished goods inventories since December 31, 2019. During the second quarter of 2020, we recognized a LCM inventory valuation benefit of $96 million largely driven by the recovery of market prices of crude oil and refined products during the second quarter.

Operating Income—Operating income decreased by ~~$713~~$838 million, or ~~70%~~71%, in the ~~first~~second quarter of 2020 compared to the second quarter of 2019 and by $1,551 million, or 71%, in the first ~~quarter~~six months of 2020 compared to the first six months of 2019. Operating income ~~for the first quarter of 2020~~ includes the ~~impact~~effects of ~~the $419 million~~ LCM inventory valuation charges as noted above.

In the second quarter of 2020, operating income in our ~~Refining,~~ O&P–Americas, I&D, ~~O&P–EAI and APS segments. Operating income for our Refining, I&D, O&P–Americas, O&P–EAI,~~ APS, and ~~Technology~~O&P–EAI segments declined by ~~$255~~$397 million, ~~$183~~$348 million, ~~$146 million, $51 million, $49~~$174 million, and ~~$26~~$145 million, respectively, relative to the ~~first~~second quarter of 2019. The declines were partially offset by the increases of operating income in the amount of $226 million and $8 million in our Refining and Technology segments in the second quarter of 2020 compared to the second quarter of 2019.

In the first six months of 2020, operating income declined across all of our segments, including $543 million, $531 million, $223 million, $196 million, $29 million and $18 million declines in our O&P–Americas, I&D, APS, O&P–EAI, Refining and Technology segments, respectively, compared to the first six months of 2019.

Income from Equity Investments—Income from our equity investments declined by ~~$64~~$3 million, or ~~100%~~5% in the ~~first~~second quarter of 2020 compared to the second quarter of 2019 and by $67 million, or 52%, in the first ~~quarter~~six months of 2020 compared to the first six months of 2019. The ~~decline was~~declines were largely as a result of lower sales prices and reduced polyolefin spreads for our joint ventures in our O&P–EAI and O&P–Americas segments.

Results for each of our business segments are discussed further in the “Segment Analysis” section below.

Income Taxes—We believe our effective income tax rate for 2020 will be lower than the previously provided guidance of mid-teens. Our effective income tax rate for the ~~first~~second quarter of 2020 was ~~34.4%~~-11.3% compared with ~~19.9%~~14.4% for the second quarter of 2019, and for the first ~~quarter~~six months of 2020 was 8.6% compared with 16.9% for the first six months of 2019.

Our effective income tax rate fluctuates based on, among other factors, changes in pretax income in countries with varying statutory tax rates, changes in valuation allowances, changes in foreign exchange gains/losses, the amount of exempt income, changes in unrecognized tax benefits associated with uncertain tax positions and changes in tax laws.

On March 27, 2020, the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act, also known as the “CARES ~~Act”.~~ Act,” which contains numerous income tax provisions and other stimulus measures. We anticipate that several of the tax measures will favorably impact our income tax on our Consolidated Financial Statements for the year ended December 31, 2020. Based on our analysis as of June 30, 2020, we recorded an overall tax benefit including a remeasurement of our deferred income tax balances. We continue to assess the impact that the CARES Act will have on our Company.

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Compared with the three months ended ~~March 31,~~June 30, 2019, the ~~higher~~lower effective tax rate for the three months ended ~~March 31,~~June 30, 2020 was primarily attributable to ~~the remeasurement of U.S. deferred tax liabilities due to the enactment~~a benefit resulting from various provisions of the CARES Act ~~(25.3%~~(-28.9%) including the remeasurement of our deferred tax balances resulting in negative tax expense for the quarter. The lower effective tax rate was further reduced by an increased relative impact of exempt income due to decreased pretax income (-9.6%), partially offset by changes in the pretax income in countries with varying statutory tax rates (2.5%) and tax benefits related to prior year research and development activities (5.9%). Compared with the six months ended June 30, 2019, the lower effective tax rate for the six months ended June 30, 2020 was primarily attributable to the increased relative impact of exempt income due to decreased ~~pre-tax earnings (-5.3%~~pretax income (-9.0%).

~~We monitor tax law changes and~~, the ~~potential impact to our results of operations. We are continuing to analyze the impact~~projected benefit resulting from various provisions of the CARES Act ~~but we anticipate favorable~~(-6.4%), partially offset by the changes in pretax income in countries with varying statutory tax ~~impacts on our Consolidated Financial Statements.~~rates (2.7%) and reduced tax benefits related to prior year research and development activities (2.9%).

Our exempt income primarily includes interest income, export incentives, and equity earnings of joint ventures. Interest income earned by certain of our European subsidiaries through intercompany financings is taxed at rates substantially lower than the U.S. statutory rate. Export incentives relate to tax benefits derived from elections and structures available for U.S. exports. Equity earnings attributable to the earnings of our joint ventures, when paid through dividends to certain European subsidiaries, are exempt from all or portions of normal statutory income tax rates. We currently anticipate the favorable treatment for interest income, dividends, and export incentives to continue in the near term; however, this treatment is based on current law and tax rulings, which could change. ~~We believe our effective income tax rate for 2020 will be in the mid-teens.~~

There continues to be increased attention to the tax practices of multinational companies, including certain provisions of H.R.1, also known as the U.S. Tax Cuts and Jobs Act (the “Tax Act”), the European Union’s state aid investigations, proposals by the Organization for Economic Cooperation and Development with respect to base erosion and profit shifting, and European Union tax directives and their implementation. Management does not believe that recent changes in income tax laws, other than those disclosed and reflected in our financial statements, will have a material impact on our Consolidated Financial Statements, although new or proposed changes to tax laws could affect our tax liabilities in the future.

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Comprehensive Income

Comprehensive income (loss) decreased by ~~$1,147~~$591 million in the ~~first~~second quarter of 2020 compared to the second quarter of 2019 and by $1,738 million in the first ~~quarter~~six months of 2020 compared to the first six months of 2019, primarily due to lower net income and net unfavorable impacts of financial derivative instruments ~~primarily~~ driven by periodic changes in benchmark interest ~~rates~~rates. In the second quarter of 2020, these decreases were partially offset by the favorable impact of unrealized net changes in foreign currency translation adjustments, and in the ~~net~~first six months of 2020 supplemented by the unfavorable impact of unrealized net changes in foreign currency translation adjustments.

The predominant functional currency for our operations outside of the U.S. is the euro. Relative to the U.S. dollar, the value of the euro ~~decreased~~increased during the second quarter and decreased for first ~~quarter~~six months of 2020, resulting in net gains and losses, respectively, as reflected in the Consolidated Statements of Comprehensive Income. The net gains and losses ~~attributable~~related to unrealized changes in foreign currency translation impacts ~~include~~were partially offset by pre-tax losses of $37 million in the second quarter of 2020 and pre-tax gains of ~~$39~~$2 million in the first ~~quarter~~six months of 2020 which represent the effective portion of our net investment hedges.

In the second quarter and first ~~quarter~~six months of 2020, the cumulative after-tax effects of our derivatives designated as cash flow hedges were net losses of ~~$338 million.~~$26 million and $364 million, respectively. Pre-tax gains of $3 million and pre-tax losses of ~~$535~~$532 million related to forward-starting interest rate swaps, ~~which~~ were driven by ~~the significant decline~~periodic changes in benchmark interest rates in the second quarter and first ~~quarter~~six months of 2020, respectively, primarily due to changes in the economy impacting late in the first quarter. The ~~strengthening~~fluctuations of the U.S. dollar against the euro in the second quarter and first ~~quarter~~six months of 2020 and periodic changes in benchmark interest rates resulted in pre-tax losses of $69 million and pre-tax gains of ~~$147~~$78 million, respectively, related to our cross-currency swaps. ~~The remaining changes pertain to~~Pre-tax gains of $45 million and pre-tax losses of ~~$53~~$8 million related to our cross-currency swaps were reclassified from Accumulated other comprehensive loss to ~~Other income, net~~Interest expense in the second quarter and first ~~quarter~~six months of ~~2020.~~2020, respectively. The remaining change pertains to our commodity cash flow hedges.

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Segment Analysis

We use earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) as our measure of profitability for segment reporting purposes. This measure of segment operating results is used by our chief operating decision maker to assess the performance of and allocate resources to our operating segments. Intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains or losses and components of pension and other postretirement benefits other than service costs are included in “Other.” For additional information related to our operating segments, as well as a reconciliation of EBITDA to its nearest GAAP measure, Income from continuing operations before income taxes, see Note 12 to our Consolidated Financial Statements.

Revenues and the components of EBITDA for the periods presented are reflected in the table below:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues:	Sales and other operating revenues:					Sales and other operating revenues:
O&P–Americas segment	O&P–Americas segment	$	1,792	$	2,111	O&P–Americas segment	$	1,433	$	2,114	$	3,225	$	4,225
O&P–EAI segment	O&P–EAI segment	2,224		2,535		O&P–EAI segment	1,702		2,505		3,926		5,040
I&D segment	I&D segment	1,770		1,894		I&D segment	1,157		2,062		2,927		3,956
APS segment	APS segment	1,096		1,339		APS segment	705		1,258		1,801		2,597
Refining segment	Refining segment	1,448		1,882		Refining segment	919		2,180		2,367		4,062
Technology segment	Technology segment	122		141		Technology segment	177		173		299		314
Other, including intersegment eliminations	Other, including intersegment eliminations	(958)		(1,124)		Other, including intersegment eliminations	(547)		(1,244)		(1,505)		(2,368)
Total	Total	$	7,494	$	8,778	Total	$	5,546	$	9,048	$	13,040	$	17,826
Operating income (loss):	Operating income (loss):					Operating income (loss):
O&P–Americas segment	O&P–Americas segment	$	238	$	384	O&P–Americas segment	$	107	$	504	$	345	$	888
O&P–EAI segment	O&P–EAI segment	135		186		O&P–EAI segment	81		226		216		412
I&D segment	I&D segment	131		314		I&D segment	24		372		155		686
APS segment	APS segment	70		119		APS segment	(83)		91		(13)		210
Refining segment	Refining segment	(314)		(59)		Refining segment	116		(110)		(198)		(169)
Technology segment	Technology segment	47		73		Technology segment	104		96		151		169
Other, including intersegment eliminations	Other, including intersegment eliminations	(3)		—		Other, including intersegment eliminations	(10)		(2)		(13)		(2)
Total	Total	$	304	$	1,017	Total	$	339	$	1,177	$	643	$	2,194
Depreciation and amortization:	Depreciation and amortization:					Depreciation and amortization:
O&P–Americas segment	O&P–Americas segment	$	124	$	115	O&P–Americas segment	$	133	$	117	$	257	$	232
O&P–EAI segment	O&P–EAI segment	53		53		O&P–EAI segment	53		52		106		105
I&D segment	I&D segment	70		72		I&D segment	74		74		144		146
APS segment	APS segment	44		29		APS segment	39		30		83		59
Refining segment	Refining segment	42		43		Refining segment	49		44		91		87
Technology segment	Technology segment	9		10		Technology segment	8		11		17		21
Total	Total	$	342	$	322	Total	$	356	$	328	$	698	$	650

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		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Income (loss) from equity investments:	Income (loss) from equity investments:					Income (loss) from equity investments:
O&P–Americas segment	O&P–Americas segment	$	2	$	11	O&P–Americas segment	$	7	$	12	$	9	$	23
O&P–EAI segment	O&P–EAI segment	(3)		51		O&P–EAI segment	51		52		48		103
I&D segment	I&D segment	2		2		I&D segment	3		2		5		4
APS segment	APS segment	(1)		—		APS segment	—		(2)		(1)		(2)
Total	Total	$	—	$	64	Total	$	61	$	64	$	61	$	128
Other income (loss), net:	Other income (loss), net:					Other income (loss), net:
O&P–Americas segment	O&P–Americas segment	$	2	$	6	O&P–Americas segment	$	1	$	2	$	3	$	8
O&P–EAI segment	O&P–EAI segment	4		6		O&P–EAI segment	—		1		4		7
I&D segment	I&D segment	—		2		I&D segment	—		—		—		2

APS segment						APS segment	—		1		—		1
Refining segment	Refining segment	—		1		Refining segment	—		—		—		1

Other, including intersegment eliminations	Other, including intersegment eliminations	(6)		10		Other, including intersegment eliminations	3		6		(3)		16
Total	Total	$	—	$	25	Total	$	4	$	10	$	4	$	35
EBITDA:	EBITDA:					EBITDA:
O&P–Americas segment	O&P–Americas segment	$	366	$	516	O&P–Americas segment	$	248	$	635	$	614	$	1,151
O&P–EAI segment	O&P–EAI segment	189		296		O&P–EAI segment	185		331		374		627
I&D segment	I&D segment	203		390		I&D segment	101		448		304		838
APS segment	APS segment	113		148		APS segment	(44)		120		69		268
Refining segment	Refining segment	(272)		(15)		Refining segment	165		(66)		(107)		(81)
Technology segment	Technology segment	56		83		Technology segment	112		107		168		190
Other, including intersegment eliminations	Other, including intersegment eliminations	(9)		10		Other, including intersegment eliminations	(7)		4		(16)		14
Total	Total	$	646	$	1,428	Total	$	760	$	1,579	$	1,406	$	3,007

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Olefins and Polyolefins–Americas Segment

Overview—EBITDA declined in the second quarter and first ~~quarter~~six months of 2020 relative to the second quarter and first ~~quarter~~six months of 2019 due to lower olefin and polyolefin results ~~partially offset by improved olefin results. Results were further decreased due to~~in challenging market conditions arising from a ~~lower~~low oil price environment and the impact of ~~cost or market inventory charge.~~COVID-19.

Ethylene Raw Materials—We have ~~significant~~ flexibility to vary the raw material mix and process conditions in our U.S. olefins plants in order to maximize profitability as market prices for both feedstocks and products change. Although prices of crude-based liquids and natural gas liquids are generally related to crude oil and natural gas prices, during specific periods the relationships among these materials and benchmarks may vary significantly.

~~In recent years, strong~~ Strong supplies from ~~the~~ U.S. shale ~~gas/~~oil ~~boom~~and gas in conjunction with the return of U.S. ethane feedstock advantages in June 2020 resulted in ethane being a preferred feedstock in our U.S. ~~plants in 2020. However, based on current economic conditions, we continue to assess other feedstocks to maximize profitability.~~plants. In the second quarter and first ~~quarters~~six months of 2020 and 2019 ~~we produced~~ approximately ~~81% and 83%, respectively,~~60% of the raw materials used in our ~~ethylene from~~North American crackers was ethane.

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The following table sets forth selected financial information for the O&P–Americas segment including Income from equity investments, which is a component of EBITDA:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	Sales and other operating revenues	$	1,792	$	2,111	Sales and other operating revenues	$	1,433	$	2,114	$	3,225	$	4,225
Income from equity investments	Income from equity investments	2		11		Income from equity investments	7		12		9		23
EBITDA	EBITDA	366		516		EBITDA	248		635		614		1,151

Revenues—Revenues for our O&P–Americas segment decreased by ~~$319~~$681 million, or ~~15%~~32%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $1,000 million, or 24%, in the first six months of 2020 compared to the first six months of 2019.

Average olefins and polyethylene sales prices were lower in the second quarter and first ~~quarter~~six months of 2020 compared to the second quarter and first ~~quarter~~six months of 2019 due to ~~increased market supply stemming from new industry capacity additions and, to a lesser extent, a~~the lower oil price ~~environment. Polypropylene sales prices decreased with declining commodity prices.~~environment and the impact of COVID-19. These lower sales prices were responsible for a revenue decrease of ~~19%~~40% and 30% in the second quarter and first ~~quarter~~six months of ~~2020.Higher sales volumes, driven mainly by higher polyethylene export demands,led to~~2020, respectively. Volume increases resulted in a revenue increase of 4%8% and 6% in the second quarter and first ~~quarter~~six months of ~~2020.~~2020, respectively.

EBITDA—EBITDA decreased by ~~$150~~$387 million, or ~~29%~~61%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $537 million, or 47%, in the first six months of 2020 compared to the first six months of 2019.

Lower olefin results led to a 37% decline in EBITDA in the second quarter of 2020 primarily due to ethylene margin declines of approximately $165 per ton driven by lower co-product prices. The decrease in olefin results in the first six months of 2020 compared to the first six months of 2019 resulted in a 13% decrease in EBITDA, largely driven by lower volumes due to a decline in downstream demand as a result of COVID-19. Polyethylene results declined resulting in a ~~17%~~22% and 20% decrease in EBITDA in the second quarter and first six months of 2020, respectively. This decrease was driven by a ~~$185~~$277 and $231 per ton reduction in price spreads over ethylene asin the second quarter and first six months of 2020, respectively. Decreased polypropylene results led to a ~~result~~7% decrease in EBITDA in both the second quarter and first six months of ~~increased market supply. Polypropylene results decreased 6%~~2020, respectively, largely due to a ~~$105 per ton reduction~~decline in margins attributed to lower price spreads over propylene ~~also~~of $119 and $111 per ton, in the second quarter and first six months of 2020, respectively.

Segment results declined $73 million, or 6%, during the first six months of 2020, due to a LCM inventory valuation charge primarily driven by ~~increased market supply~~. ~~An offsetting increase~~declines in ~~olefin results increased EBITDA by 16% as ethylene margins increased by approximately $70 per ton primarily due to lower feedstock costs partially offset by a lower ethylene price. Prices for~~the prices of heavy liquids and ~~ethylene have declined since December 31, 2019. These declines resulted in~~ethylene. Second quarter of 2020 results include a LCM inventory valuation benefit of $38 million, or 6%, related to the ~~recognition~~reversal of LCM inventory valuation charges ~~of $111 million during~~recognized in the first quarter of 2020, ~~reducing EBITDA~~largely driven by ~~22% compared to~~recovery of market prices of heavy liquids and ethylene which were partially offset by declines in the ~~first quarter~~price of ~~2019.~~polymers.

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Olefins and Polyolefins–Europe, Asia, International Segment

Overview—EBITDA for the second quarter and first ~~quarter~~six months of 2020 decreased compared to the second quarter and first ~~quarter~~six months of 2019 mainly as a result of lower ~~polyolefin results~~olefin and ~~lower income from equity investments, partially offset by higher olefin~~polyolefin results. Results were ~~further~~also decreased due to a ~~lower~~LCM inventory charges recognized in the second quarter and first six months of ~~cost or market inventory charge. Further, as a result of COVID-19,~~2020. To improve liquidity during the pandemic we have deferred certain planned maintenance which was ~~planned~~scheduled for 2020.

The following table sets forth selected financial information for the O&P–EAI segment including Income ~~(loss)~~ from equity investments, which is a component of EBITDA:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	Sales and other operating revenues	$	2,224	$	2,535	Sales and other operating revenues	$	1,702	$	2,505	$	3,926	$	5,040
Income (loss) from equity investments		(3)		51
Income from equity investments						Income from equity investments	51		52		48		103
EBITDA	EBITDA	189		296		EBITDA	185		331		374		627

Revenues—Revenues decreased by ~~$311~~$803 million, or ~~12%~~32%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $1,114 million, or 22%, in the first six months of 2020 compared to the first six months of 2019.

Average sales prices in the second quarter and first ~~quarter~~six months of 2020 were lower across most products as sales prices generally correlate with crude oil prices, which on average, decreased compared to the ~~first quarter of~~comparative periods in 2019. These lower average sales prices were responsible for revenue decreases of ~~10%.~~32% and 21% in the second quarter and first six months of 2020, respectively. Volume improvements resulted in a revenue increase of 2% and 1% in the second quarter and first six months of 2020, respectively. Foreign exchange impacts, which on average, were unfavorable ~~and led to~~resulted in a revenue decrease of 2% in each of the second quarter and first ~~quarter~~six months of 2020.

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EBITDA—EBITDA decreased in the ~~first~~second quarter of 2020 ~~decreased~~ by ~~$107~~$146 million, or ~~36%~~44%, compared to the ~~first~~second quarter of ~~2019.~~2019 and by $253 million, or 40%, in the first six months of 2020 compared to the first six months of 2019.

Lower olefins results led to a 29% and 6% decrease in EBITDA in the second quarter and first six months of 2020, respectively. These decreases were primarily due to decreased ethylene prices, which outpaced the decrease in the weighted average cost of ethylene by $269 and $197 per ton, respectively. Decreased polypropylene results led to a ~~11%~~9% and 10% decrease in EBITDA in the second quarter and first six months of 2020, respectively, largely due to a decline in margins attributed to ~~lower~~a reduction in price spreads over propylene by $9 and $38 per ton, in the second quarter and first six months of ~~$63 per ton. A decline in polyethylene results decreased EBITDA by 9% as price spreads over ethylene decreased $48 per ton. Joint venture~~2020, respectively.

Lower income from our equity ~~income decreased largely due to reduced polyolefin spreads resulting in a 19% decrease in EBITDA. These decreases were partially offset by higher olefins results which~~investments led to ~~a 16% increase~~decreases in EBITDA of ~~EBITDA. This increase was primarily due~~9% in the first six months of 2020 mainly attributable to ~~increased volumes driven by improved reliability. Unfavorable foreign exchange impacts reduced EBITDA by approximately 1%.~~lower margins for our joint ventures in Saudi Arabia and Asia. Results ~~of our O&P–EAI segment~~ were further reduced by ~~$36~~$34 million, or ~~12%~~10%, in the second quarter of 2020 and $70 million, or 11%, in the first six months of 2020 due to an LCM inventory ~~charge~~valuation charges resulting from a decline in the price of naphtha ~~since December 31, 2019.~~in the first quarter of 2020 and a decline in the price of polymers in the second quarter of 2020. Unfavorable foreign exchange impacts resulted in a 2% declined in EBITDA in both the second quarter and first six months of 2020.

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Intermediates and Derivatives Segment

Overview—EBITDA for our I&D segment was lower in the second quarter and first ~~quarter~~six months of 2020 compared to the second quarter and first ~~quarter~~six months of 2019, largely driven by decreased demand and margin ~~decreases primarily in~~erosion due to the impacts of COVID-19, particularly within our intermediate chemicals ~~business. Results were further decreased due to a lower of cost or market inventory charge. Further, as a result of COVID-19, we have deferred planned maintenance which was planned for the third~~ and ~~fourth quarters of 2020.~~oxyfuels related products.

The following table sets forth selected financial information for the I&D segment including Income from equity investments, which is a component of EBITDA:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	Sales and other operating revenues	$	1,770	$	1,894	Sales and other operating revenues	$	1,157	$	2,062	$	2,927	$	3,956
Income from equity investments	Income from equity investments	2		2		Income from equity investments	3		2		5		4
EBITDA	EBITDA	203		390		EBITDA	101		448		304		838

Revenues—Revenues decreased by ~~$124~~$905 million, or 7%44%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $1,029 million, or 26%, in the first six months of 2020 compared to the first six months of 2019.

Lower average sales prices in the second quarter and first ~~quarter~~six months of 2020 for most products, which reflect the impacts of lower feedstock and energy costs and lower demand, were responsible for a revenue decrease of ~~11%. Higher~~29% and 20%, respectively. Lower sales volumes resulted in a 14% and 5% ~~increase~~decrease in revenues in the second quarter and first ~~quarter~~six months of ~~2020.~~2020, respectively. Foreign exchange impacts, which on average, were unfavorable ~~and led to~~resulted in a revenue decrease of 1%. in each of the second quarter and first six months of 2020.

EBITDA—EBITDA decreased ~~$187~~$347 million, or ~~48%~~77%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of ~~2019.~~2019 and by $534 million, or 64%, in the first six months of 2020 compared to the first six months of 2019 primarily driven by lower margins across most businesses.

Oxyfuels and related products results declined, resulting in a 33% and 15% decrease in EBITDA in the second quarter and first six months of 2020, respectively. The decline was a result of lower margins as fuel demand significantly declined in response to the pandemic, including lockdowns and the resulting economic slowdown, as well as a decline in crude oil prices. Decreased intermediate chemicals results led to an EBITDA decrease of ~~26%.~~29% and 27% in the second quarter and first six months of 2020, respectively. This decrease was a result of lower margins across most businesses, in particular styrene, as market supply increased and demand weakened in 2020. Lower propylene oxide and derivatives results decreased EBITDA by ~~5% largely~~9% in the second quarter of 2020, driven by lower volumes due to lower ~~derivative~~demand on construction, automotive and furniture industries which were impacted by COVID-19. Propylene oxide and derivatives results declined 7% in the first six months of 2020, driven by lower margins asdue to increased market ~~supply increased. These declines in EBITDA were partially offset by a 5% increase in EBITDA in oxyfuels and related products results driven equally by increased volumes and margins.~~ competition.

Results of our I&D segment were further reduced by ~~$78~~$98 million, or ~~20%~~12%, in the first six months of 2020 due to an LCM inventory ~~charge~~valuation charges resulting from a decline in the price of various gasoline blending components, butane, benzene and styrene since December 31, 2019. Results in the second quarter were reduced by $20 million, or 4%, due to LCM inventory valuation charges resulting from a decline in the price of benzene and styrene, despite price improvements for various gasoline blending components and butane since ~~December 31, 2019~~the first quarter of 2020.

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Advanced Polymer Solutions Segment

Overview—EBITDA for our APS segment decreased in the second quarter and first ~~quarter~~six months of 2020 ~~compared~~relative to the second quarter and first ~~quarter~~six months of 2019, primarily due to lower compounding and solutions volumes.

The following table sets forth selected financial information for the APS segment including ~~Income (loss)~~losses from equity investments, which is a component of EBITDA:

Three Months Ended
March 31,
Millions of dollars 2020 2019
Sales and other operating revenues $ 1,096 $ 1,339
Income (loss) from equity investments (1) —
EBITDA 113 148

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	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	705	$	1,258	$	1,801	$	2,597
Loss from equity investments	—		(2)		(1)		(2)
EBITDA	(44)		120		69		268

Revenues—Revenues decreased by ~~$243~~$553 million, or ~~18%~~44%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $796 million, or 31%, in the first six months of 2020 compared to the first six months of 2019.

Sales volumes declined in the second quarter and first ~~quarter~~six months of 2020 stemming from lower market demand for compounding and solutions, including lower automotive and ~~roofing~~construction demand, which led to a ~~12%~~39% and 26% decrease in revenue in ~~2020. Lower average~~the second quarter and first six months of 2020, respectively. Average sales prices also declined resulting in a 3% decline in revenue in each the second quarter and first six months of 2020. Foreign exchange impacts, which on average, were unfavorable resulted in a 3%revenue decrease of 2% in ~~revenue~~each of the second quarter and first six months of 2020.

~~while unfavorable foreign exchange impacts resulted in a 3% decrease in revenue.~~

EBITDA—EBITDA decreased ~~$35~~$164 million, or ~~24%~~137%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $199 million, or 74%, in the first six months of 2020 compared to the first six months of 2019.

This decrease was ~~largely~~ driven by decreased compounding and solutions results which resulted in a ~~20%~~72% and 42% decrease in EBITDA in the second quarter and first six months of ~~EBITDA~~. 2020, respectively. The decrease was largely due to lower volumes driven by reduced automotive demand as a result of economic conditions caused by COVID-19.

EBITDA decreased $67 million, or 56%, in the second quarter of 2020 compared to the second quarter of 2019 and by $69 million, or 26%, in the first six months of 2020 compared to the first six months of 2019 due to LCM inventory valuation charges resulting from a decline in the price of polymers. Unfavorable foreign exchange impacts ~~also~~ reduced EBITDA by ~~an additional~~ 2% and 1% in the second quarter and first ~~quarter~~six months of ~~2020.~~2020, respectively. Integration costs related to the acquisition of A. Schulman were relatively unchanged in the second quarter and first ~~quarter~~six months of 2020 ~~versus~~relative to the ~~first quarter~~comparative periods in 2019.

Refining Segment

Overview—EBITDA for our Refining segment ~~decreased~~increased in the second quarter relative to the second quarter of 2019 due to improved margins on by-products and a favorable mark-to-market gain on crude oil hedging.EBITDA decreased in the first six months of 2020 relative to the first six months of 2019 due to lower volumes and a lower of cost or market inventory ~~charge, lower conversion rates caused by an outage at our fluid catalytic cracking unit and lower heavy crude oil processing rates compared to 2019.~~charge.

The following table sets forth selected financial information and heavy crude oil processing rates for the Refining segment and the U.S. refining market margins for the applicable periods. ~~Light Louisiana Sweet,~~“Brent” is a light sweet crude oil ~~while~~and is one of the main benchmark prices for purchases of oil worldwide. “Maya” is a heavy sour crude ~~oil.~~oil grade produced in Mexico that is a relevant benchmark for heavy sour crude oils in the U.S. Gulf Coast market. References to industry benchmarks for refining market margins are to industry prices reported by Platts, a division of S&P Global.

Three Months Ended
March 31,
Millions of dollars 2020 2019
Sales and other operating revenues $ 1,448 $ 1,882
EBITDA (272) (15)
Thousands of barrels per day
Heavy crude oil processing rates 226 259
Market margins, dollars per barrel
Light crude oil – 2-1-1 $ 10.09 $ 9.92
Light crude – Maya differential 7.12 3.63
Total Maya 2-1-1 $ 17.21 $ 13.55

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	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	$	919	$	2,180	$	2,367	$	4,062
EBITDA	165		(66)		(107)		(81)

Thousands of barrels per day
Heavy crude oil processing rates	237		261		231		260

Market margins, dollars per barrel
Brent - 2-1-1	$	4.42	$	12.74	$	5.87	$	10.59
Brent - Maya differential	8.85		6.26		9.32		5.69
Total Maya 2-1-1	$	13.27	$	19.00	$	15.19	$	16.28

Revenues—Revenues decreased by ~~$434~~$1,261 million, or ~~23%~~58%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and by $1,695 million, or 42%, in the first six months of 2020 compared to the first six months of 2019.

Lower product prices led to a revenue decrease of ~~20%~~53% and 38% relative to the second quarter and first ~~quarter~~six months of 2019, respectively, due to an average crude oil price decrease of approximately ~~$15~~$37 per barrel in the second quarter of 2020 and $26 per barrel in the first ~~quarter~~six months of ~~2020 compared to the first quarter of 2019.~~2020. In addition, rates on conversion units were lower due to an unplanned outage at our fluid catalytic cracking unit, as well as crude selection and the optimization of refinery operations. Heavy crude oil processing rates decreased during the second quarter and first ~~quarter~~six months of 2020, leading to a decrease in overall sales volumes of ~~3%.~~5% and 4%, respectively.

EBITDA—EBITDA ~~decreased~~increased by ~~$257~~$231 million, or ~~over 100%~~350%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of 2019 and decreased by $26 million, or 32%, in the first six months of 2020 compared to the first six months of 2019.

Results of our Refining segment were reduced by ~~$192~~$13 million, or 16%, in the first six months of 2020, due to an LCM inventory valuation charge resulting from a decline in the prices of crude oil and refined products since December 31, ~~2019~~2019. Results in the second quarter of 2020 include a LCM inventory valuation benefit of $179 million as market prices recovered since March 31, 2020, resulting in a 271% increase in EBITDA.

Margins ~~decreased~~increased by ~~333%~~90% and 11% in the second quarter and first six months of 2020, respectively, primarily due to increased margins of the primary by-products of our crude processing units and a favorable mark-to-market gain on crude oil hedging. This increase was partially offset by unplanned outages at our fluid catalytic cracking unit, which restricted the yield of higher-margin refined products, ~~partially offset by~~and a ~~27% increase~~30% and 7% decrease in the Maya 2-1-1 market margin in the second quarter and first six months of 2020, relative to the comparable periods in 2019, driven primarily by ~~a favorable light-to-heavy differential relative to 2019.~~lower refined product cracks. Lower heavy crude oil processing rates resulted in a ~~93%~~11% and 27% decrease in EBITDA relative to the second quarter and first ~~quarter~~six months of ~~2019.~~2019, respectively.

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Technology Segment

Overview—EBITDA for our Technology segment ~~decreased~~increased in the ~~first~~second quarter of 2020 compared to the second quarter of 2019 due to higher catalyst results, but decreased in the first ~~quarter~~six months of 2020 compared to the first six months of 2019, primarily due to lower licensing revenues.

The following table sets forth selected financial information for the Technology segment:


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019		2020		2019
Sales and other operating revenues	Sales and other operating revenues	$	122	$	141	Sales and other operating revenues	$	177	$	173	$	299	$	314
EBITDA	EBITDA	56		83		EBITDA	112		107		168		190

Revenues—Revenues ~~decreased~~increased by ~~$19~~$4 million, or ~~13%~~2%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of ~~2019. Lower licensing revenues resulted in a decrease of 14%~~2019 and decreased by $15 million, or 5%, in the first ~~quarter~~six months of 2020 compared to the first ~~quarter~~six months of 2019.

Lower licensing revenues were responsible for revenue decreases of 9% and 11% in the second quarter and first six months of 2020 compared to the corresponding periods in 2019. Higher catalyst sales volumes, driven by orders from customers to secure inventory early during the pandemic, resulted in a 10% and 5% increase in revenue in the second quarter and first six months of 2020, respectively. Increases in average catalyst sales prices resulted in revenue increases of 4%2% and 3% in the second quarter and first ~~quarter~~six months of ~~2020. Lower catalyst sales volumes, driven by the timing of customer orders, resulted in a 1% decrease in revenue in the first quarter of 2020.~~2020, respectively. Foreign exchange impacts, ~~that,~~which on average, were unfavorable led to a revenue decrease of 1% and 2%. in the second quarter and first six months of 2020, respectively.

EBITDA—EBITDA ~~decreased~~increased by ~~$27~~$5 million, or ~~33%~~5%, in the ~~first~~second quarter of 2020 compared to the ~~first~~second quarter of ~~2019. This decrease was primarily driven~~2019 and decreased by ~~lower licensing revenues as revenue was recognized on fewer licensing agreements during~~$22 million, or 12%, in the first ~~quarter~~six months of 2020 compared to the first ~~quarter~~six months of 2019.

Lower licensing revenues were responsible for decreases of 17% and 21% in the second quarter and first six months of 2020 compared to the corresponding periods in 2019 as a result of fewer contracts reaching significant milestones and lower average contract values. Higher catalyst results increased EBITDA by 26% and 13% in the second quarter and first six months of 2020, respectively, driven by orders from customers to secure inventory early during the pandemic. Unfavorable foreign exchange impacts reduced EBITDA by 2% and 1% in the second quarter and first six months of 2020, respectively.

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FINANCIAL CONDITION

Operating, investing and financing activities of continuing operations, which are discussed below, are presented in the following table:


		Three Months Ended March 31,							Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019
Source (use) of cash:	Source (use) of cash:					Source (use) of cash:
Operating activities	Operating activities	$	542	$	657	Operating activities	$	1,834	$	1,843
Investing activities	Investing activities	(663)		(178)		Investing activities	(1,727)		(456)
Financing activities	Financing activities	884		(521)		Financing activities	1,568		(482)

Operating ~~Activities—~~Activities—Cash of $~~542~~1,834 million generated by operating activities in the first ~~quarter~~six months of 2020 reflected earnings adjusted for non-cash items, payments for employee bonuses, income taxes, and cash provided by the main components of working capital—Accounts receivable, Inventories and Accounts payable.

In the first six months of 2020, the main components of working capital provided $465 million of cash driven by decreases in Accounts receivable and Inventory, partially offset by a decrease in Accounts payable. The decrease in Accounts receivable was primarily driven by lower sales in our Refining, APS and I&D segments due to unfavorable market conditions. The decrease in Inventory was primarily driven by company-wide inventory reduction initiatives as well as lower prices. The decrease in Accounts payable was primarily due to lower cost of sales resulting from lower production across multiple segments driven by unfavorable market conditions.

Cash of $1,843 million generated by operating activities in the first six months of 2019 reflected earnings adjusted for non-cash items, payments for employee bonuses, income taxes, and cash consumed by the main components of working capital—Accounts receivable, Inventories and Accounts payable.

In the first quarter of 2020, the main components of working capital consumed $110 million of cash driven primarily by a decrease in accounts payable partially offset by a decrease in inventories. The decrease in accounts payable was primarily due to lower feedstock prices in our O&P–EAI segment as well as a decrease in crude oil purchases in our Refining segment. The decrease in inventory was primarily driven by company-wide inventory reduction initiatives as well as higher sales volumes in our O&P–EAI segment compared to the fourth quarter 2019 and turnaround activities in our I&D segment.

Cash of $657 million generated by operating activities in the first quarter of 2019 reflected earnings adjusted for non-cash items, payments for employee bonuses, income taxes, interest and cash consumed by the main components of working capital—Accounts receivable, Inventories and Accounts payable.

~~In the first quarter~~six months of 2019, the main components of working capital consumed ~~$104~~$538 million of cash. ~~Higher Accounts receivable due to increased sales volume in our O&P–EAI segment were partially offset by an~~The increase in Accounts ~~payable~~receivable was due to higher sales volumes in our O&P—EAI segment during the period. Inventories increased due to inventory build in our Refining and O&P—EAI segments as ~~a result of higher volumes offset by lower~~inventories returned to more balanced levels and operations improved. Lower feedstock and energy costs relative to ~~the~~ fourth quarter of ~~2018.~~2018, partially offset by higher volumes drove a decrease in Accounts payable.

Investing Activities

Investments—We invest cash in investment-grade and other high-quality instruments that provide adequate flexibility to redeploy funds as needed to meet our cash flow requirements while maximizing yield.

In the first six months of 2020 we invested $270 million in debt securities that are deemed available-for-sale. We also invested $184 million in equity securities in the first six months of 2020. Our investments in available-for-sale debt securities and equity securities are classified as Short-term investments.

We received proceeds of ~~$308~~$511 million in the first ~~quarter~~six months of 2019 upon the sale and maturity of certain of our available-for-sale debt securities. Additionally, in the first ~~quarters~~six months of 2020 and 2019 we received proceeds of $1 million and ~~$162~~$332 million, respectively, on the sale of our investments in equity securities.

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Capital Expenditures—The following table summarizes capital expenditures for the periods presented:


		Three Months Ended March 31,							Six Months Ended June 30,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2020		2019
Capital expenditures by segment:	Capital expenditures by segment:					Capital expenditures by segment:
O&P–Americas	O&P–Americas	$	204	$	276	O&P–Americas	$	394	$	533
O&P–EAI	O&P–EAI	42		64		O&P–EAI	76		103
I&D	I&D	353		179		I&D	658		417
APS	APS	13		16		APS	23		27
Refining	Refining	16		43		Refining	37		96
Technology	Technology	30		17		Technology	56		34
Other	Other	2		4		Other	4		11
Consolidated capital expenditures	Consolidated capital expenditures	$	660	$	599	Consolidated capital expenditures	$	1,248	$	1,221

In the first ~~quarters~~six months of 2020 and 2019, our capital expenditures included construction related to our PO/TBA plant at our Houston, Texas facility, turnaround activities at several sites and other plant improvement projects. Additionally, in the first ~~quarter~~six months of 2019, our capital expenditures included construction related to our Hyperzone polyethylene plant at our La Porte, Texas facility. The higher level of capital expenditures in the first ~~quarter~~six months of 2020 relative to the same period in 2019 was primarily driven by an increase in our I&D segment largely due to the construction of our PO/TBA plant partially offset by a decrease in our O&P–Americas segment related to our Hyperzone polyethylene plant. To reduce operational and financial risk associated with the ongoing COVID-19 pandemic and the significant drop in the price of oil, we are postponing selected growth projects and planned maintenance, including slowing construction activities on our PO/TBA ~~plant in Houston, Texas.~~plant. We currently expect that these actions will reduce our 2020 capital expenditures by approximately 20% from our prior guidance of $2.4 billion to our current outlook of $1.9 billion, including ~~investment~~investments in our U.S. and European PO joint ventures.

Financing Activities—In the first ~~quarters~~six months of 2020 and 2019, we made payments of $4 million and $512 million to acquire approximately 0.1 million and 5.6 million, respectively, of our outstanding ordinary shares. We also made dividend payments totaling ~~$351~~$701 million and ~~$372~~$760 million in the first ~~quarters~~six months of 2020 and 2019, respectively. For additional information related to our share repurchases and dividend payments, see Note 10 to the Consolidated Financial Statements.

In January 2020, we amended the terms of certain forward-starting interest rate swaps to extend their maturities. Concurrently with the amendment of the swaps, we posted collateral of $238 million related to the liability position held with our counterparties as of the amendment date. For additional information see Note 7 to the Consolidated Financial Statements.

In March 2020, we borrowed $500 million from our Senior Revolving Credit Facility and $500 million from our U.S. Receivables Facility to increase our liquidity.

In February 2019, LYB Americas Finance Company LLC, a wholly owned subsidiary of LyondellBasell Industries N.V., entered into a 364-day, $2,000 million senior unsecured term loan credit agreement and borrowed the entire amount. The proceeds of this term loan, which is fully and unconditionally guaranteed by LyondellBasell Industries N.V., were used for general corporate purposes and to redeem the remaining $1,000 million outstanding of our 5% Senior Notes due 2019 at par.

Through the issuance and repurchase of commercial paper instruments under our commercial paper program, we received net proceeds of $516 million in the first quarter of 2020 and made net repayments of $559 million in the first quarter of 2019.

~~Additional information related to commercial paper can be found in the Liquidity and Capital Resources section below and in Note 6 to the Consolidated Financial Statements.~~

~~In February 2019, we purchased the non-controlling interest in our subsidiary that holds our La Porte, Texas methanol facility for $63 million.~~

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~~Liquidity and Capital Resources~~

~~Overview~~

We plan to fund our ongoing working capital, capital expenditures, debt service and other funding requirements with cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. Cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt, or a combination thereof, may be used to fund the purchase of shares under our share repurchase authorization.

~~We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations.~~

As a result of COVID-19, we are taking actions to manage risk by reducing budgeted 2020 capital expenditures by $500 million, increasing liquidity by $2 billion through the issuance of senior notes in April 2020 and accelerating our focus on cost savings. We believe that our current liquidity availability and cash from operating activities provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due. We believe the current economic environment will not have an adverse effect on our ability to be in compliance with our debt covenants.

~~Cash and Liquid Investments~~

~~As of March 31, 2020, we had $1,795 million of unrestricted cash and cash equivalents as well as marketable securities classified as Short-term investments.~~

At March 31, 2020, we held $405 million of cash in jurisdictions outside of the U.S., principally in the United Kingdom and China. There are currently no legal or economic restrictions that would materially impede our transfers of cash.

~~Credit Arrangements~~

At March 31, 2020, we had total debt, including current maturities, of $13,655 million, and $193 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.

~~We had total unused availability under our credit facilities of $1,357 million at March 31, 2020, which included the following:~~

•$1,206 million under our $2,500 million Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program. Availability under this facility is net of outstanding borrowings, outstanding letters of credit provided under the facility and notes issued under our commercial paper program. A small portion of our availability under this facility is impacted by changes in the euro/U.S. dollar exchange rate. At March 31, 2020, we had $778 million of outstanding commercial paper, net of discount, $500 million of outstanding borrowings and no outstanding letters of credit under the facility; and

•$151 million under our $900 million U.S. Receivables Facility. Availability under this facility is subject to a borrowing base of eligible receivables, which is reduced by outstanding borrowings and letters of credit, if any. At March 31, 2020, we had $500 million of outstanding borrowings and no letters of credit outstanding under this facility.

Our $2,500 million Senior Revolving Credit Facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00, or less, for the period covering the most recent four quarters.

The U.S. Receivables Facility is subject to customary warranties and covenants, including limits and reserves and the maintenance of specified financial ratios. We are required to maintain a leverage ratio at the end of every fiscal quarter of 3.50 to 1.00, or less, for the period covering the most recent four quarters. Performance obligations under the facility are guaranteed by LyondellBasell Industries N.V.

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In April 2020, we entered into amendments and related documents (collectively, the “Amendments”) to our (i) Senior Revolving Credit Facility, (ii)Term Loan due 2022, and (iii) U.S Receivables Facility (collectively, amended, the “Credit Agreements”). Among other things, the Amendments amended each Credit Agreement’s gross leverage ratio covenant of 3.50 to 1.0 to permit netting of unrestricted cash and cash equivalents in excess of $300 million (with certain restriction on non-US cash) and, in respect of the Senior Revolving Credit Facility and Term Loan due 2022, restrict certain dividends and other specified restricted payments.

In April 2020, LYB International Finance III, LLC (“LYB Finance III”), a wholly owned finance subsidiary of LyondellBasell Industries N.V. issued $500 million of 2.875% guaranteed notes due 2025 (the “2025 Notes”) at a discounted price of 99.911%, $500 million of 3.375% guaranteed notes due 2030 (the “2030 Notes”) at a discounted price of 99.813% and $1,000 million of 4.2% guaranteed notes due 2050 (the “2050 Notes”) at a discounted price of 99.373%. Net proceeds from the sale of the notes totaled $1,974 million.

We used the net proceeds from the sale of the notes for general corporate purposes, including to increase our liquidity and manage short-term debt maturities. We invested funds that were not immediately needed for these purposes in short-term investments, including marketable securities.

Additionally, in April 2020 we repaid $500 million outstanding under our Senior Revolving Credit Facility and $500 million outstanding under our U.S. Receivables Facility.

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Through the issuance and repurchase of commercial paper instruments under our commercial paper program, we received net proceeds of $212 million in the first six months of 2020 and made net repayments of $128 million in the first six months of 2019. Additional information related to commercial paper can be found in the Liquidity and Capital Resources section below and in Note 6 to the Consolidated Financial Statements.

In February 2019, we purchased the non-controlling interest in our subsidiary that holds our La Porte, Texas methanol facility for $63 million.

Liquidity and Capital Resources

Overview

As a result of COVID-19, we are taking actions to manage our financial risk. In April 2020, we announced that we reduced our budgeted 2020 capital expenditures by $500 million, bringing our total budget to $1.9 billion. We increased liquidity by $2 billion through the issuance of guaranteed senior notes in April 2020. Additionally, we continue to focus on cost savings while minimizing working capital.

We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations. Our focus on funding our dividends while remaining committed to a strong investment grade balance sheet continues to be the foundation of our capital deployment strategy.

Cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt, or a combination thereof, may be used to fund the purchase of shares under our share repurchase authorization.

We plan to fund our ongoing working capital, capital expenditures, debt service and other funding requirements with cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. We believe that our current liquidity availability and cash from operating activities provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due. Further, we believe the current economic environment will not have an adverse effect on our ability to be in compliance with our debt covenants.

Cash and Liquid Investments

As of June 30, 2020, we had Cash and cash equivalents and marketable securities classified as Short-term investments totaling $3,203 million.

At June 30, 2020, we held $775 million of cash in jurisdictions outside of the U.S., principally in the United Kingdom. There are currently no legal or economic restrictions that would materially impede our transfers of cash.

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Credit Arrangements

At June 30, 2020, we had total debt, including current maturities, of $14,336 million, and $196 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.

We had total unused availability under our credit facilities of $2,541 million at June 30, 2020, which included the following:

•$2,017 million under our $2,500 million Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program. Availability under this facility is net of outstanding borrowings, outstanding letters of credit provided under the facility and notes issued under our commercial paper program. A small portion of our availability under this facility is impacted by changes in the euro/U.S. dollar exchange rate. At June 30, 2020, we had $473 million of outstanding commercial paper, net of discount, no borrowings or letters of credit outstanding under this facility; and

•$524 million under our $900 million U.S. Receivables Facility. Availability under this facility is subject to a borrowing base of eligible receivables, which is reduced by outstanding borrowings and letters of credit, if any. At June 30, 2020, we had no borrowings or letters of credit outstanding under this facility.

In April 2020, we entered into amendments and related documents (collectively, the “Amendments”) to our (i) Senior Revolving Credit Facility, (ii)Term Loan due 2022, and (iii) U.S Receivables Facility (collectively, amended, the “Credit Agreements”). Among other things, the Amendments amended each Credit Agreement’s gross leverage ratio covenant of 3.50 to 1.0 to permit netting of unrestricted cash and cash equivalents in excess of $300 million (with certain restriction on non-US cash) and, in respect of the Senior Revolving Credit Facility and Term Loan due 2022, restrict certain dividends and other specified restricted payments.

In April 2020, we issued the 2025 Notes, the 2030 Notes, and 2050 Notes. The 2025 Notes, 2030 Notes and 2050 Notes may be redeemed before the date that is one month, three months, or six months, respectively, prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable treasury yield plus 40 basis points in the case of the 2025 Notes or 45 basis points in the case of the 2030 Notes and 2050 Notes) on the notes to be redeemed. The 2025 Notes, 2030 Notes and 2050 Notes may also be redeemed on or after the date that is one month, three months, or six months, respectively, prior to the scheduled maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. The notes are also redeemable upon certain tax events.

~~In April 2020, we repaid $500 million outstanding under our Senior Revolving Credit Facility and $500 million outstanding under our U.S. Receivables Facility.~~

We may repay or redeem our debt, including purchases of our outstanding bonds in the open market, using cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt, proceeds from asset divestitures, or a combination thereof. In connection with any repayment or redemption of our debt, we may incur cash and non-cash charges, which could be material in the period in which they are incurred.

In accordance with our current interest rate risk management strategy and subject to management’s evaluation of market conditions and the availability of favorable interest rates among other factors, we may from time to time enter into interest rate swap agreements to economically convert a portion of our fixed rate debt to variable rate debt or convert a portion of our variable rate debt to fixed rate debt.

For additional information, see Note 6 to our Consolidated Financial Statements.

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Share Repurchases

In ~~September 2019,~~May 2020, our shareholders approved a proposal to authorize us to repurchase up to ~~33.3~~34.0 million of our ordinary shares through ~~March 12,~~November 29, 2021, which superseded any prior repurchase authorizations. Our share repurchase authorization does not have a stated dollar amount, and purchases may be made through open market purchases, private market transactions or other structured transactions. Repurchased shares could be retired or used for general corporate purposes, including for various employee benefit and compensation plans. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased. In the first ~~quarter~~six months of 2020, we purchased approximately 0.1 million shares under our share repurchase authorization for approximately $4 million.

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As of ~~April~~July 29, 2020, we had approximately ~~33.3~~34.0 million shares remaining under the current authorization. The timing and amounts of additional shares repurchased, if any, will be determined based on our evaluation of market conditions and other factors, including any additional authorizations approved by our shareholders. For additional information related to our share repurchase authorizations, see Note 10 to the Consolidated Financial Statements.

Capital Budget

As a result of the coronavirus and current market conditions, the Company ~~is postponing~~has postponed selected growth projects and planned maintenance, including slowing construction activities on our PO/TBA ~~plant in Houston, Texas.~~plant. We currently expect that these actions will reduce 2020 capital expenditures to $1.9 billion. This represents a 20% decrease compared to our budget as of December 31, 2019. Our capital expenditures budget includes approximately $75 million for investments in our U.S. and European PO joint ventures.

Once complete, our world-scale PO/TBA plant will have the capacity to produce 470 thousand tons of PO and 1.0 million tons of tertiary butyl alcohol. We expect the project to be complete in the second half of 2022.

Equity Investment

In March 2020, we signed a definitive agreement to expand in China through a 50% joint venture with the Liaoning Bora Enterprise Group (“Bora”). The joint venture with Bora will operate a 1.1 million ton ethylene cracker and associated polyolefin derivative complex in Panjin, China. We estimate investing CNY 3.3 billion (approximately ~~$450~~$460 million) in the joint venture ~~during~~and expect commissioning to begin in the ~~second half~~third quarter of 2020.

CURRENT BUSINESS OUTLOOK

~~The current challenges from~~

Demand for our products is improving with increased economic activity. In June and July of 2020, we raised operating rates and prices in response to increased demand for North American polyethylene exports to Asia. During the ~~pandemic~~third quarter of 2020, we anticipate operating our North American ethylene plants at approximately 95% of nameplate capacity, and ~~crude oil pricing will increasingly impact~~ our ~~businesses during the second quarter. Our April~~European crackers are expected to operate at approximately 90% of nameplate capacity. With increased mobility and ~~May 2020 orders continue to demonstrate strong~~reductions in fuel inventories, we expect improving demand for our ~~polyolefins that are used in consumer packaging~~refining and ~~medical applications. Weak demand from markets for industrial~~oxyfuels and ~~durable~~related products ~~is expected~~businesses. Accordingly, we anticipate our operating rates at our refinery to ~~continue.~~be approximately 85% to 90% of nameplate capacity during the third quarter of 2020. In response to ~~closures in automotive manufacturing,~~lower demand for certain products, we ~~have temporarily halted~~had previously idled production at several ~~of our~~small plants in the Advanced Polymer Solutions segment serving automotive end markets and reduced production rates at other plants. As demand rebounds for our plastics used in automotive manufacturing, in July 2020, we restarted most of our plants previously idled, and we plan to operate our compounding capacity at rates that serve customers in this end market. Our oxyfuels and related products business in our I&D segment and our Refining segment will be impacted by significantly lower demand for transportation fuels. While our major facilities are all operating, we have reduced rates across our system to match ~~decreased customer~~automotive demand. ~~Industry consultants estimate that petrochemical and refining assets in various parts of the world are running at 60 to 80 percent of nameplate capacity.~~

We expect ~~that~~ the ~~majority~~recent startup of our Hyperzone polyethylene capacity, the establishment of new Asian joint ventures and the integration of our A. Schulman acquisition will ~~also operate within that range during the second quarter.~~

benefit us. We ~~are taking actions~~accelerated our plans to ~~manage risk by reducing budgeted 2020~~reduce capital expenditures ~~by $500 million, increasing~~and are aggressively managing our inventories to prioritize liquidity ~~by $2 billion through the issuance of senior notes~~ and ~~accelerating our~~maximize cash flow. Our focus on ~~cost savings. Our foundations~~funding the dividend while remaining committed to a strong investment grade balance sheet continues to be the foundation of ~~safety leadership, operational excellence and cost discipline should continue to bolster~~ our ~~resilient business portfolio. While it is too early to predict~~capital deployment strategy.

Despite the ~~magnitude and duration of the downturn,~~volatile macro-economic environment, we believe ~~we are well-positioned~~our leading portfolio, advantaged positions and disciplined approach will enable us to ~~navigate this volatile environment~~continue capturing opportunities and ~~position the Company for an eventual recovery of the economy.~~delivering resilient results through business cycles.

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CRITICAL ACCOUNTING POLICIES

Inventory—Our inventories are stated at the lower of cost or market (“LCM”). Cost is determined using the last-in, first-out (“LIFO”) inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Market value is determined based on an assessment of the current estimated replacement cost and selling price of the inventory.

During the first ~~quarter~~six months of 2020, we recognized an LCM ~~charge~~inventory valuation charges of ~~$419 million. This adjustment is~~$323 million related to the ~~recent~~ decline in pricing for many of our raw material and finished goods inventories. ~~Market~~During the second quarter of 2020, we recognized a LCM inventory valuation benefit of $96 million, largely driven by the recovery of market prices of crude oil and refined products during the quarter. In the first quarter of 2020, market price declines in crude oil, heavy liquids and ethylene were the primary contributors to the LCM ~~adjustment in the first quarter of 2020. Representative~~inventory valuation charges, and representative prices used in the calculation of this LCM ~~adjustment~~inventory valuation charge were $12.14/~~bbl~~barrel for crude, $13.50/~~bbl~~barrel for heavy liquids and $205/ton for ethylene. In the second quarter of 2020, market price recoveries in crude oil, heavy liquids and ethylene were the primary contributors to the LCM inventory valuation benefit. Representative prices used in the calculation of the LCM inventory valuation benefit were $32.22/barrel for crude, $40.42/barrel for heavy liquids and $276/ton for ethylene.

Since our inventory consists of manufactured products derived from crude oil, natural gas, natural gas liquids and correlated materials, as well as the associated feedstocks and intermediate chemicals, our inventory market values are generally influenced by changes in the benchmark of crude oil and heavy liquid values and prices for manufactured finished goods. The degree of influence of a particular benchmark may vary from period to period, as the composition of the dollar value LIFO pools change. Additionally, an LCM condition may arise due to a volumetric decline in a particular material that had previously provided a positive impact within a pool. As a result, market valuations and LCM conditions are dependent upon the inventory composition ~~and mix of materials on hand~~ at the balance sheet date. In the measurement of an LCM adjustment, the numeric input value for determining the crude oil market price includes pricing that is weighted by volume of inventories held at a point in time, including WTI, Brent and Maya crude oils.

Currently, ten out of our eleven LIFO inventory pools are “at-risk” for further adjustment as each impacted LIFO pool has been

reduced to, or close to, the calculated market value at the last balance sheet measurement date. “At-risk” inventory accounts for $3

$2.6 billion of our total inventory carrying value as of ~~March 31,~~June 30, 2020. The extent to which further adjustment may occur is dependent on the pool specific product prices and composition within each individual dollar value LIFO pool at the balance sheet date. Further sustained price declines in our finished goods and raw materials could result in future LCM inventory valuation ~~charges during the remainder of 2020.~~charges. However, if pricing trends reverse, some, or all of these charges could be reversed in future quarterly interim periods during 2020.

ACCOUNTING AND REPORTING CHANGES

For a discussion of the potential impact of new accounting pronouncements on our Consolidated Financial Statements, see Note 2 to the Consolidated Financial Statements.

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CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions.

We based forward-looking statements on our current expectations, estimates and projections of our business and the industries in which we operate. We caution you that these statements are not guarantees of future performance. They involve assumptions about future events that, while made in good faith, may prove to be incorrect, and involve risks and uncertainties we cannot predict. Our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

•the cost of raw materials represents a substantial portion of our operating expenses, and energy costs generally follow price trends of crude oil, natural gas liquids and/or natural gas; price volatility can significantly affect our results of operations and we may be unable to pass raw material and energy cost increases on to our customers due to the significant competition that we face, the commodity nature of our products and the time required to implement pricing changes;

•our operations in the United States (“U.S.”) have benefited from low-cost natural gas and natural gas liquids; decreased availability of these materials (for example, from their export or regulations impacting hydraulic fracturing in the U.S.) could reduce the current benefits we receive;

•if crude oil prices fall materially, or decrease relative to U.S. natural gas prices, we would see less benefit from low-cost natural gas and natural gas liquids and it could have a negative effect on our results of operations;

•industry production capacities and operating rates may lead to periods of oversupply and low profitability; for example, substantial capacity expansions are underway in the U.S. olefins industry;

•we may face unplanned operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failures, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental incidents) at any of our facilities, which would negatively impact our operating results; for example, because the Houston refinery is our only refining operation, we would not have the ability to increase production elsewhere to mitigate the impact of any outage at that facility;

•changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate could increase our costs, restrict our operations and reduce our operating results;

•our ability to execute our organic growth plans may be negatively affected by our ability to complete projects on time and on budget;

•our ability to acquire new businesses and assets and integrate those operations into our existing operations and make cost-saving changes in operations;

•uncertainties associated with worldwide economies could create reductions in demand and pricing, as well as increased counterparty risks, which could reduce liquidity or cause financial losses resulting from counterparty default;

•uncertainties related to the extent and duration of the pandemic-related decline in demand, or other impacts due to the pandemic in geographic regions or markets served by us, or where our operations are located, including the risk of prolonged recession;

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•the negative outcome of any legal, tax and environmental proceedings or changes in laws or regulations regarding legal, tax and environmental matters may increase our costs, reduce demand for our products, or otherwise limit our ability to achieve savings under current regulations;

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•any loss or non-renewal of favorable tax treatment under agreements or treaties, or changes in laws, regulations or treaties, may substantially increase our tax liabilities;

•we may be required to reduce production or idle certain facilities because of the cyclical and volatile nature of the supply-demand balance in the chemical and refining industries, which would negatively affect our operating results;

•we rely on continuing technological innovation, and an inability to protect our technology, or others’ technological developments could negatively impact our competitive position;

•we have significant international operations, and fluctuations in exchange rates, valuations of currencies and our possible inability to access cash from operations in certain jurisdictions on a tax-efficient basis, if at all, could negatively affect our liquidity and our results of operations;

•we are subject to the risks of doing business at a global level, including wars, terrorist activities, political and economic instability and disruptions and changes in governmental policies, which could cause increased expenses, decreased demand or prices for our products and/or disruptions in operations, all of which could reduce our operating results;

•if we are unable to comply with the terms of our credit facilities, indebtedness and other financing arrangements, those obligations could be accelerated, which we may not be able to repay; and

•we may be unable to incur additional indebtedness or obtain financing on terms that we deem acceptable, including for refinancing of our current obligations; higher interest rates and costs of financing would increase our expenses.

Any of these factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Our management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels.

All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section and any other cautionary statements that may accompany such forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market and regulatory risks is described in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2019. Our exposure to such risks has not changed materially in the ~~three~~six months ended ~~March 31,~~June 30, 2020.

Item 4. CONTROLS AND PROCEDURES

As of ~~March 31,~~June 30, 2020, with the participation of our management, our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer) carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the Act), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Act). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were ~~operating effectively~~effective as of ~~March 31,~~June 30, 2020.

There have been no changes in our internal controls over financial reporting, as defined in Rule 13a-15(f) of the Act, in the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Information regarding our litigation and other legal proceedings can be found in Note 9 to the Consolidated Financial Statements, which is incorporated into this Item 1 by reference.

The following is a description of environmental proceedings to which a governmental authority is a party and potential monetary penalties are reasonably likely to be $100,000 or more:

In September 2019, the Illinois Environmental Protection Agency referred three emission events that occurred at our Tuscola facility in ~~August~~September and ~~September~~October 2018 to the Illinois Attorney General's Office (IAG) ~~Office~~ for enforcement. In ~~February~~June 2020, the ~~IAG sent~~parties entered into a Stipulation and Proposal for Settlement with a ~~proposed~~ penalty of $120,000. ~~The parties are currently working~~

On May 19, 2020, the IAG notified us that the Illinois Environmental Protection Agency had referred six emission events that occurred at our Morris facility in 2018 and 2019 for enforcement. Equistar is planning to ~~finalize~~meet with the ~~settlement.~~IAG to discuss resolution of this matter. We reasonably believe that the IAG may assert a penalty demand in excess of $100,000.

Additional information about our other environmental proceedings can be found in Part I, Item 3 of our 2019 Annual Report on Form 10-K and Part II, Item 1 of our Form 10-Q for the quarter ended March 31, 2020, which is incorporated into this Item 1 by reference.

Item 1A. RISK FACTORS

There have been no material changes to the risk factors associated with our business previously disclosed in “Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2019, ~~except as set forth below. The risk factor set forth below updates,~~ and ~~should be read together with, the risk factors disclosed in “Item 1A. Risk Factors,” in our 2019 Annual Report on~~ Form ~~10-K.~~

~~The recent novel coronavirus (COVID-19) pandemic could materially adversely affect our financial condition and results of operations.~~

In December 2019, a novel strain of coronavirus, SARS-CoV-2, causing a disease referred to as COVID-19, was reported to have surfaced in Wuhan, China, resulting in shutdowns of manufacturing and commerce in the months that followed. Since then, COVID-19 has spread to multiple countries worldwide, including the United States and Europe, and has resulted in authorities implementing numerous measures to try to contain the disease, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns, among others. Many of our facilities and employees are based in areas impacted by the virus.

The spread of COVID-19 has caused us to modify our business practices (including implementing health screenings, limiting employee travel, mandatory work-from-home policies and cancellation of physical participation in meetings, events and conferences), and we may take further actions as required by government authorities or that we determine are in the best interests of our employees, customers, partners and suppliers. There is no certainty that such measures will be sufficient to mitigate the risks posed by the disease, and our ability to perform certain functions could be harmed.

In addition, while the potential impact and duration of the COVID-19 pandemic on the global economy and our business in particular may be difficult to assess or predict, the pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, which may reduce our ability to access capital or our customers’ ability to pay us for past or future purchases, which could negatively affect our liquidity. The COVID-19 pandemic could also reduce the demand for our products, and has already led us to reduce production rates for some of our products. Lower oil prices and reduced demand for transportation fuels are also affecting volumes and margins for certain of our other products. These impacts are expected to adversely affect our results during the second quarter of 2020. In addition, a recession or further financial market correction resulting from the spread of COVID-19 could adversely affect demand for our products.

The global pandemic of COVID-19 continues to rapidly evolve, and we will continue to monitor the COVID-19 situation closely. The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. The extent of the impact of the COVID-19 pandemic on our operational and financial performance, will depend on future developments, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the

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disease or treat its impact, related restrictions on travel, and the duration, timing and severity of the impact on customer spending, including any recession resulting from the pandemic, all of which are uncertain and cannot be predicted. An extended period of global supply chain and economic disruption as a result of the COVID-19 pandemic could have a material negative impact on our business, results of operations, access to sources of liquidity and financial condition, though the full extent and duration is uncertain. To the extent that the COVID-19 pandemic adversely impacts our business, results of operations, liquidity or financial condition, it may also have the effect of increasing many of the other risks described in the risk factors described in our Annual Report on Form 10-K10-Q for the ~~fiscal year~~quarter ended ~~December~~March 31, ~~2019.~~2020.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities
Period Total Number
of Shares
Purchased Average Price
Paid per Share Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Authorizations Maximum Number
of Shares That May Yet
Be Purchased Under the
Plans or Authorizations
January 1 – January 31 25,375 $ 78.83 25,375 33,310,692
February 1 – February 29 25,310 $ 79.03 25,310 33,285,382
March 1 – March 31 — $ — — 33,285,382
Total 50,685 $ 78.93 50,685 33,285,382
None.

~~On September 12, 2019,~~

In May 2020, we announced a share repurchase authorization of up to ~~33.3~~34.0 million of our ordinary shares through ~~March 12,~~November 29, 2021, which superseded any prior repurchase authorizations. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

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Item 6. EXHIBITS


Exhibit Number						Description

~~4.1~~10.1+*						~~Indenture, among LYB International Finance III, LLC, as Issuer, LyondellBasell Industries N.V., as Guarantor, and Wells Fargo Bank, National Association, as Trustee, dated as~~Form of ~~October 10, 2019 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on April 21, 2020 and October 10, 2019)~~Director Restricted Stock Unit Award Agreement

~~4.2~~						Officer’s Certificate of LYB International Finance III, LLC relating to the Officer’s Certificate of LYB International Finance III, LLC relating to the 2.875% Guaranteed Notes due 2025, 3.375% Guaranteed Notes due 2030, and 4.200% Guaranteed Notes due 2050 dated as of April 20, 2020 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on April 21, 2020)

~~4.3~~						~~Form of LYB International Finance III, LLC’s 2.875% Guaranteed Notes due 2025 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on April 21, 2020)~~

~~4.4~~						~~Form of LYB International Finance III, LLC’s 3.375% Guaranteed Notes due 2030 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on April 21, 2020)~~

~~4.5~~						~~Form of LYB International Finance III, LLC’s 4.200% Guaranteed Notes due 2050 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on April 21, 2020)~~

~~10.1~~						Amendment No. 2 to the Amended and Restated Credit Agreement, dated April 14, 2020, among LyondellBasell Industries N.V. and LYB Americas Finance Company LLC, as borrowers, the lenders party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the SEC on April 15, 2020)

~~10.2~~						Amendment No. 1 to the Three-Year Credit Agreement, dated April 14, 2020, among LyondellBasell Industries N.V. as guarantor, and LYB Americas Finance Company LLC, as borrower, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the SEC on April 15, 2020)

~~10.3~~						Acknowledgement of Amendment to Receivables Purchase Agreement, dated April 14, 2020, among Lyondell Chemical Company, as servicer, LYB Receivables LLC, as seller, the conduit purchasers, related committed purchasers, LC participants and purchaser agents party thereto, the other parties thereto and Mizuho Bank, Ltd., as administrator and letter of credit bank (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed with the SEC on April 15, 2020)

31.1*						Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2*						Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32*						Certifications pursuant to 18 U.S.C. Section 1350

101.INS*						XBRL Instance Document–The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

~~Table of Contents~~


~~Exhibit Number~~						~~Description~~

101.SCH*						XBRL Schema Document

101.CAL*						XBRL Calculation Linkbase Document

101.DEF*						XBRL Definition Linkbase Document

101.LAB*						XBRL Labels Linkbase Document

101.PRE*						XBRL Presentation Linkbase Document

104*						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

+ Management contract or compensatory plan, contract or arrangement

* Filed herewith

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		LYONDELLBASELL INDUSTRIES N.V.

Date:	~~May 1,~~July 31, 2020	/s/ Jacinth C. Smiley
		Jacinth C. Smiley
		Vice President and
		Chief Accounting Officer
		(Principal Accounting Officer)


			Page
Part I – Financial Information			1

Item 1. Consolidated Financial Statements (Unaudited)			1
Consolidated Statements of Income			1
Consolidated Statements of Comprehensive Income			2
Consolidated Balance Sheets			3
Consolidated Statements of Cash Flows			5
Consolidated Statements of Shareholders’ Equity			6
Notes to the Consolidated Financial Statements			78

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2832

Item 3. Quantitative and Qualitative Disclosures About Market Risk			4551

Item 4. Controls and Procedures			4551

Part II – Other Information			4652

Item 1. Legal Proceedings			4652

Item 1A. Risk Factors			4652

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4752

Item 4. Mine Safety Disclosures			4752

Item 6. Exhibits			4853

Signature			5054


	Effects of Financial Instruments
	Three Months Ended March 31,
	Gain (Loss) Recognized in AOCI						Gain (Loss) Reclassified from AOCI to Income						Gain (Loss) Recognized in Income	Income Statement
Millions of dollars	2020		2019		2020		2019		2020		2019		Classification
Derivatives designated as hedges:
Commodities	$	—	$	(50)	$	—	$	(5)	$	—	$	—	Sales and other operating revenues
Commodities	—		46		—		4		—		—		Cost of sales
Foreign currency	164		70		(53)		(39)		16		17		Other income, net; Interest expense
Interest rates	(535)		(74)		—		(4)		96		(34)		Interest expense
Derivatives not designated as hedges:
Commodities	—		—		—		—		(9)		2		Sales and other operating revenues
Commodities	—		—		—		—		(3)		3		Cost of sales
Foreign currency	—		—		—		—		(4)		19		Other income, net
Non-derivatives designated as hedges:
Long-term debt	22		16		—		—		—		—		Other income, net
Total	$	(349)	$	8	$	(53)	$	(44)	$	96	$	7


	Three Months Ended March 31, 2020
Millions of dollars	O&P– Americas		O&P– EAI		I&D		APS		Refining		Technology		Other		Total
Sales and other operating revenues:
Customers	$	1,173	$	2,064	$	1,732	$	1,093	$	1,336	$	96	$	—	$	7,494
Intersegment	619		160		38		3		112		26		(958)		—
	1,792		2,224		1,770		1,096		1,448		122		(958)		7,494
Income (loss) from equity investments	2		(3)		2		(1)		—		—		—		—
EBITDA	366		189		203		113		(272)		56		(9)		646


	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Authorizations	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Authorizations
January 1 – January 31	25,375	$	78.83	25,375	33,310,692
February 1 – February 29	25,310	$	79.03	25,310	33,285,382
March 1 – March 31	—	$	—	—	33,285,382
Total	50,685	$	78.93	50,685	33,285,382