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 ~~June 30, 2020~~March 31, 2021


☐			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 ~~333,839,284~~334,353,962 ordinary shares, €0.04 par value, outstanding at ~~July 29, 2020~~April 28, 2021 (excluding ~~6,206,344~~5,691,666 treasury shares).

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

TABLE OF CONTENTS

Table of Contents

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 June 30,						Six Months Ended June 30,					Three Months Ended March 31,
		2020		2019		2020		2019
Millions of dollars, except earnings per share										Millions of dollars, except earnings per share	2021		2020
Sales and other operating revenues:	Sales and other operating revenues:									Sales and other operating revenues:
Trade	Trade	$	5,371	$	8,828	$	12,674	$	17,393	Trade	$	8,851	$	7,303
Related parties	Related parties	175		220		366		433		Related parties	231		191
		5,546		9,048		13,040		17,826			9,082		7,494
Operating costs and expenses:	Operating costs and expenses:									Operating costs and expenses:
Cost of sales	Cost of sales	4,894		7,542		11,762		14,988		Cost of sales	7,678		6,868

Selling, general and administrative expenses	Selling, general and administrative expenses	288		302		583		589		Selling, general and administrative expenses	287		295
Research and development expenses	Research and development expenses	25		27		52		55		Research and development expenses	29		27
		5,207		7,871		12,397		15,632			7,994		7,190
Operating income	Operating income	339		1,177		643		2,194		Operating income	1,088		304
Interest expense	Interest expense	(125)		(81)		(214)		(173)		Interest expense	(110)		(89)
Interest income	Interest income	4		5		7		11		Interest income	2		3
Other income, net	Other income, net	4		10		4		35		Other income, net	25		0
Income from continuing operations before equity investments and income taxes	Income from continuing operations before equity investments and income taxes	222		1,111		440		2,067		Income from continuing operations before equity investments and income taxes	1,005		218
Income from equity investments	Income from equity investments	61		64		61		128		Income from equity investments	137		0
Income from continuing operations before income taxes	Income from continuing operations before income taxes	283		1,175		501		2,195		Income from continuing operations before income taxes	1,142		218
Provision for (benefit from) income taxes		(32)		169		43		372
Provision for income taxes										Provision for income taxes	70		75
Income from continuing operations	Income from continuing operations	315		1,006		458		1,823		Income from continuing operations	1,072		143
Loss from discontinued operations, net of tax		(1)		(3)		—		(3)
(Loss) income from discontinued operations, net of tax										(Loss) income from discontinued operations, net of tax	(2)		1
Net income	Net income	314		1,003		458		1,820		Net income	1,070		144

Dividends on redeemable non-controlling interests	Dividends on redeemable non-controlling interests	(1)		(1)		(3)		(3)		Dividends on redeemable non-controlling interests	(2)		(2)
Net income attributable to the Company shareholders	Net income attributable to the Company shareholders	$	313	$	1,002	$	455	$	1,817	Net income attributable to the Company shareholders	$	1,068	$	142

Earnings per share:	Earnings per share:									Earnings per share:
Net income attributable to the Company shareholders —
Net income (loss) attributable to the Company shareholders —										Net income (loss) attributable to the Company shareholders —
Basic:	Basic:									Basic:
Continuing operations	Continuing operations	$	0.94	$	2.71	$	1.36	$	4.90	Continuing operations	$	3.20	$	0.42
Discontinued operations	Discontinued operations	—		(0.01)		—		(0.01)		Discontinued operations	(0.01)		0
		$	0.94	$	2.70	$	1.36	$	4.89		$	3.19	$	0.42
Diluted:	Diluted:									Diluted:
Continuing operations	Continuing operations	$	0.94	$	2.71	$	1.36	$	4.89	Continuing operations	$	3.19	$	0.42
Discontinued operations	Discontinued operations	—		(0.01)		—		(0.01)		Discontinued operations	(0.01)		0
		$	0.94	$	2.70	$	1.36	$	4.88		$	3.18	$	0.42

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

~~(In millions of dollars)~~


		Three Months Ended June 30,						Six Months Ended June 30,					Three Months Ended March 31,
		2020		2019		2020		2019
Millions of dollars										Millions of dollars	2021		2020
Net income	Net income	$	314	$	1,003	$	458	$	1,820	Net income	$	1,070	$	144
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	(26)		(68)		(364)		(118)		Financial derivatives	175		(338)
Unrealized gains on available-for-sale debt securities		3		1		1		1
Unrealized losses on available-for-sale debt securities										Unrealized losses on available-for-sale debt securities	0		(2)
Defined benefit pension and other postretirement benefit plans	Defined benefit pension and other postretirement benefit plans	11		5		21		10		Defined benefit pension and other postretirement benefit plans	11		10
Foreign currency translations	Foreign currency translations	66		18		(133)		8		Foreign currency translations	(107)		(199)
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	54		(44)		(475)		(99)		Total other comprehensive income (loss), net of tax	79		(529)
Comprehensive income (loss)	Comprehensive income (loss)	368		959		(17)		1,721		Comprehensive income (loss)	1,149		(385)
Dividends on redeemable non-controlling interests	Dividends on redeemable non-controlling interests	(1)		(1)		(3)		(3)		Dividends on redeemable non-controlling interests	(2)		(2)

Comprehensive income (loss) attributable to the Company shareholders	Comprehensive income (loss) attributable to the Company shareholders	$	367	$	958	$	(20)	$	1,718	Comprehensive income (loss) attributable to the Company shareholders	$	1,147	$	(387)

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

~~(In millions of dollars)~~


		June 30, 2020		December 31, 2019
Millions of dollars						Millions of dollars	March 31, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	2,552	$	858	Cash and cash equivalents	$	1,452	$	1,763
Restricted cash	Restricted cash	26		30		Restricted cash	11		2
Short-term investments	Short-term investments	651		196		Short-term investments	383		702
Accounts receivable:	Accounts receivable:					Accounts receivable:
Trade, net	Trade, net	2,454		2,981		Trade, net	3,796		3,291
Related parties	Related parties	134		121		Related parties	165		150
Inventories	Inventories	3,768		4,588		Inventories	4,632		4,344
Prepaid expenses and other current assets	Prepaid expenses and other current assets	892		736		Prepaid expenses and other current assets	1,525		1,382
Total current assets	Total current assets	10,477		9,510		Total current assets	11,964		11,634
Operating lease assets	Operating lease assets	1,425		1,468		Operating lease assets	1,466		1,492
Property, plant and equipment, at cost	Property, plant and equipment, at cost	22,019		21,260		Property, plant and equipment, at cost	21,631		21,484
Less: Accumulated depreciation	Less: Accumulated depreciation	(7,493)		(7,130)		Less: Accumulated depreciation	(7,241)		(7,098)
Property, plant and equipment, net	Property, plant and equipment, net	14,526		14,130		Property, plant and equipment, net	14,390		14,386
Investments and long-term receivables:
Investment in PO joint ventures		523		504
Equity investments	Equity investments	1,559		1,602		Equity investments	4,794		4,729
Other investments and long-term receivables		23		22
Goodwill	Goodwill	1,830		1,891		Goodwill	1,904		1,953
Intangible assets, net	Intangible assets, net	756		869		Intangible assets, net	717		751
Other assets	Other assets	422		439		Other assets	511		458
Total assets	Total assets	$	31,541	$	30,435	Total assets	$	35,746	$	35,403

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

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


		June 30, 2020		December 31, 2019
Millions of dollars, except shares and par value data						Millions of dollars, except shares and par value data	March 31, 2021		December 31, 2020
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	$	958	$	8
Short-term debt	Short-term debt	659		445		Short-term debt	682		663
Accounts payable:	Accounts payable:					Accounts payable:
Trade	Trade	1,790		2,516		Trade	2,703		2,398
Related parties	Related parties	404		412		Related parties	579		550
Accrued liabilities	Accrued liabilities	1,579		1,822		Accrued liabilities	1,953		1,883
Total current liabilities	Total current liabilities	4,435		5,198		Total current liabilities	6,875		5,502
Long-term debt	Long-term debt	13,674		11,614		Long-term debt	13,785		15,286
Operating lease liabilities	Operating lease liabilities	1,160		1,216		Operating lease liabilities	1,199		1,222
Other liabilities	Other liabilities	2,968		2,213		Other liabilities	2,554		2,957
Deferred income taxes	Deferred income taxes	1,811		2,015		Deferred income taxes	2,403		2,332
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies	0		0
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, 333,829,804 and 333,476,883 shares outstanding, respectively		19		19
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 334,313,140 and 334,015,220 shares outstanding, respectively						Ordinary shares, €0.04 par value, 1,275 million shares authorized, 334,313,140 and 334,015,220 shares outstanding, respectively	19		19
Additional paid-in capital	Additional paid-in capital	5,958		5,954		Additional paid-in capital	5,993		5,986
Retained earnings	Retained earnings	4,188		4,435		Retained earnings	5,158		4,440
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(2,259)		(1,784)		Accumulated other comprehensive loss	(1,864)		(1,943)
Treasury stock, at cost, 6,215,824 and 6,568,745 ordinary shares, respectively		(548)		(580)
Treasury stock, at cost, 5,732,488 and 6,030,408 ordinary shares, respectively						Treasury stock, at cost, 5,732,488 and 6,030,408 ordinary shares, respectively	(506)		(531)
Total Company share of shareholders’ equity	Total Company share of shareholders’ equity	7,358		8,044		Total Company share of shareholders’ equity	8,800		7,971
Non-controlling interests	Non-controlling interests	19		19		Non-controlling interests	14		17
Total equity	Total equity	7,377		8,063		Total equity	8,814		7,988
Total liabilities, redeemable non-controlling interests and equity	Total liabilities, redeemable non-controlling interests and equity	$	31,541	$	30,435	Total liabilities, redeemable non-controlling interests and equity	$	35,746	$	35,403

See Notes to the Consolidated Financial Statements.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(In millions of dollars)~~


		Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019
Millions of dollars						Millions of dollars	2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	458	$	1,820	Net income	$	1,070	$	144
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	698		650		Depreciation and amortization	335		342

Amortization of debt-related costs	Amortization of debt-related costs	7		4		Amortization of debt-related costs	5		4

Share-based compensation	Share-based compensation	29		24		Share-based compensation	19		16
Inventory valuation charges	Inventory valuation charges	323		—		Inventory valuation charges	0		419
Equity investments—	Equity investments—					Equity investments—
Equity income	Equity income	(61)		(128)		Equity income	(137)		0
Distributions of earnings, net of tax	Distributions of earnings, net of tax	81		149		Distributions of earnings, net of tax	20		15
Deferred income taxes		(90)		110
Deferred income tax (benefit) provision						Deferred income tax (benefit) provision	(83)		68

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	487		(263)		Accounts receivable	(593)		4
Inventories	Inventories	463		(173)		Inventories	(360)		121
Accounts payable	Accounts payable	(485)		(102)		Accounts payable	327		(235)
Other, net	Other, net	(76)		(248)		Other, net	(32)		(356)
Net cash provided by operating activities	Net cash provided by operating activities	1,834		1,843		Net cash provided by operating activities	571		542
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	(1,248)		(1,221)		Expenditures for property, plant and equipment	(340)		(660)

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

Purchases of equity securities		(184)		—
Proceeds from sales of equity securities		1		332
Proceeds from maturities of available-for-sale debt securities						Proceeds from maturities of available-for-sale debt securities	74		0

Proceeds from equity securities						Proceeds from equity securities	226		1

Other, net	Other, net	(26)		(78)		Other, net	(19)		(4)
Net cash used in investing activities	Net cash used in investing activities	(1,727)		(456)		Net cash used in investing activities	(59)		(663)
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	0		(4)
Dividends paid - common stock	Dividends paid - common stock	(701)		(760)		Dividends paid - common stock	(352)		(351)
Purchase of non-controlling interest	Purchase of non-controlling interest	(30)		(63)		Purchase of non-controlling interest	0		(30)
Issuance of long-term debt	Issuance of long-term debt	2,492		—		Issuance of long-term debt	0		500
Repayments of long-term debt	Repayments of long-term debt	(500)		(1,000)		Repayments of long-term debt	(500)		0
Payments of debt issuance costs		(18)		(4)

Issuance of short-term debt	Issuance of short-term debt	521		2,000		Issuance of short-term debt	0		500
Repayments of short-term debt		(500)		—
Net proceeds from (repayments of) commercial paper		212		(128)
Payments on forward-starting interest rate swaps that include financing elements		(238)		—
Proceeds from settlement of cash flow hedges		346		—

Net proceeds from commercial paper						Net proceeds from commercial paper	0		516
Collateral received from (paid for) interest rate derivatives						Collateral received from (paid for) interest rate derivatives	66		(238)

Other, net	Other, net	(12)		(15)		Other, net	4		(9)
Net cash provided by (used in) financing activities		1,568		(482)
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(782)		884
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	15		2		Effect of exchange rate changes on cash	(32)		(18)
Increase in cash and cash equivalents and restricted cash		1,690		907
(Decrease) increase in cash and cash equivalents and restricted cash						(Decrease) increase in cash and cash equivalents and restricted cash	(302)		745
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	1,765		888
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	2,578	$	1,308	Cash and cash equivalents and restricted cash at end of period	$	1,463	$	1,633

See Notes to the Consolidated Financial Statements.

Table of Contents

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
Millions of dollars	Issued		Treasury
Balance, December 31, 2020	$	19	$	(531)	$	5,986	$	4,440	$	(1,943)	$	7,971	$	17
Net income	0		0		0		1,070		0		1,070		0
Other comprehensive income	0		0		0		0		79		79		0
Share-based compensation	0		25		7		2		0		34		0
Dividends - common stock ($1.05 per share)	0		0		0		(352)		0		(352)		0
Dividends - redeemable non-controlling interests ($15.00 per share)	0		0		0		(2)		0		(2)		0



Sale of non-controlling interest	0		0		0		0		0		0		(3)

Balance, March 31, 2021	$	19	$	(506)	$	5,993	$	5,158	$	(1,864)	$	8,800	$	14

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			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, 2019		$	22	$	(2,668)	$	6,996							$	7,206			$	(1,418)			$	10,138			$	22
Millions of dollars																			Millions of dollars	Issued				Treasury				Additional Paid-in Capital					Retained Earnings		Accumulated Other Comprehensive Loss		Company Share of Shareholders’ Equity		Non- Controlling Interests
Balance, December 31, 2019																			Balance, December 31, 2019	$	19			$	(580)
Net income	Net income	—		—		—		1,003		—		1,003				—			Net income	0				0				0		144		0		144		0
Other comprehensive loss	Other comprehensive loss	—		—		—		—		(44)		(44)				—			Other comprehensive loss	0				0				0		0		(529)		(529)		0
Share-based compensation	Share-based compensation	—		5		10		(2)		—		13				—			Share-based compensation	0				25				(11)		1		0		15		0
Dividends - common stock ($1.05 per share)	Dividends - common stock ($1.05 per share)	—		—		—		(388)		—		(388)				—			Dividends - common stock ($1.05 per share)	0				0				0		(351)		0		(351)		0
Dividends - redeemable non-controlling interests ($15.00 per share)	Dividends - redeemable non-controlling interests ($15.00 per share)	—		—		—		(1)		—		(1)				—			Dividends - redeemable non-controlling interests ($15.00 per share)	0				0				0		(2)		0		(2)		0
Repurchases of Company ordinary shares																			Repurchases of Company ordinary shares	0				(4)				0		0		0		(4)		0
Purchase of non-controlling interest																			Purchase of non-controlling interest	0				0				7		0		0		7		0

Balance, June 30, 2019		$	22	$	(2,663)	$	7,006	$	7,818	$	(1,462)	$	10,721			$	22
Balance, March 31, 2020																			Balance, March 31, 2020	$	19			$	(559)			$	5,950	$	4,227	$	(2,313)	$	7,324	$	19

See Notes to the Consolidated Financial Statements.

~~Table of Contents~~

~~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.~~

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS


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

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

3.	3.	Revenues	10	3.	Revenues	9

4.	4.	Accounts Receivable	11	4.	Accounts Receivable	10

5.	5.	Inventories	12	5.	Inventories	10

6.	6.	Debt	13	6.	Debt	11

7.	7.	Financial Instruments and Fair Value Measurements	16	7.	Financial Instruments and Fair Value Measurements	13

8.	8.	Income Taxes	22	8.	Income Taxes	17

9.	9.	Commitments and Contingencies	22	9.	Commitments and Contingencies	18

10.	10.	Shareholders’ Equity and Redeemable Non-controlling Interests	23	10.	Shareholders’ Equity and Redeemable Non-controlling Interests	19

11.	11.	Per Share Data	27	11.	Per Share Data	22

12.	12.	Segment and Related Information	29	12.	Segment and Related Information	23

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, continue to evolve and impact global markets and demand for our products. During the first six months of 2020, we recognized lower of cost or market inventory valuation charges as disclosed in Note 5 to our Consolidated Financial Statements. 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 the 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 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.2020.

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.~~:

Standard

Description

ASU ~~2020-04,~~ 2020-01,~~Facilitation of~~ Clarifying the ~~Effects of Relief of Reference Rate Reform on Financial Reporting~~Interactions between Topic 321, Topic 323, Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging

This guidance ~~provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other~~clarifies that an entity should consider observable transactions that ~~reference London Inter-Bank Offered Rate (“LIBOR”)~~require it to either apply or ~~another reference rate expected~~discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 and includes scope considerations for entities that hold certain non-derivative forward contracts and purchased options to acquire equity securities that, upon settlement of the forward contract or exercise of the purchase option, would be ~~discontinued because~~accounted for under the equity method of ~~reference rate reform, if certain criteria are met.~~ accounting. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

The ~~expedients and exceptions provided by~~prospective adoption of this guidance ~~are available~~ from January 1, ~~2020, prospectively,~~2021 did not have a material impact on our Consolidated Financial Statements.

ASU 2020-06, Debt - Debt with Conversion and ~~do not apply to contract modifications made~~Other Options and ~~hedging relationships entered into or evaluated~~Derivatives and Hedging - Contracts in Entity’s Own Equity

This guidance simplifies the accounting for convertible instruments and the application of the derivatives scope exception for contracts in an entity’s own equity. The standard also amends the accounting for convertible instruments in the diluted earnings per share calculation and requires enhanced disclosures of convertible instruments and contracts in an entity’s own equity. The guidance is effective for fiscal years beginning after December ~~31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for~~15, 2021 and ~~that are retained through the end of the hedging relationship.~~ may be applied on a modified or fully retrospective basis.

The early adoption of ~~the~~this guidance ~~enables us to continue hedge accounting for the relevant designated hedges and is expected to ease the accounting burden associated with transitioning away~~on a modified retrospective basis from ~~reference rates that are expected to be discontinued.~~January 1, 2021 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 ~~2020-03,~~2020-09, ~~Codification Improvements~~Debt (Topic 470): Amendments to ~~Financial Instruments~~SEC Paragraphs Pursuant to SEC Release No. 33-10762

This guidance ~~makes narrow-scope changes that are intended~~amends and supersedes SEC paragraphs in the Accounting Standards Codification to ~~improve~~reflect the ~~guidance on financial instruments and current expected credit loss (“CECL”). We adopted the guidance~~issuance of SEC Release No. 33-10762 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~~financial disclosure requirements for ~~fair value measurements~~subsidiary issuers and guarantors of registered debt securities and affiliates whose securities are pledged as ~~part~~collateral for registered securities. The guidance is effective for annual and interim periods ending after January 4, 2021.

The adoption of ~~its disclosure framework project. It removes transfer disclosures between Level~~this guidance from January 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.~~2021 did not have a material impact on our Consolidated Financial Statements.

Accounting Guidance Issued But Not Adopted as of ~~June 30, 2020~~March 31, 2021

WeThere are ~~currently assessing the~~no ASUs issued and not yet adopted that could have a material 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.

3. Revenues

Contract Balances—Contract liabilities were ~~$147~~$185 million and ~~$124~~$194 million at ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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		2021		2020
Sales and other operating revenues:
Olefins and co-products		$	1,091	$	667
Polyethylene		2,153		1,459
Polypropylene		1,718		1,101
Propylene oxide and derivatives		502		464
Oxyfuels and related products		607		707
Intermediate chemicals		578		544
Compounding and solutions		1,038		912
Advanced polymers		231		181
Refined products		993		1,336
Other		171		123
Total		$	9,082	$	7,494

109

Table of Contents

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,					Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		2020		2019		Millions of dollars	2021		2020
Sales and other operating revenues:	Sales and other operating revenues:									Sales and other operating revenues:
United States	United States	$	2,417	$	4,250	$	5,604	$	8,143	United States	$	4,086	$	3,187
Germany	Germany	398		710		1,039		1,441		Germany	765		641
China										China	560		243
Italy	Italy	259		385		594		772		Italy	378		335
Mexico		203		431		583		959
China		302		298		545		596
Japan		143		255		478		458
France	France	161		363		431		725		France	290		270
Poland	Poland	188		252		412		521		Poland	270		224
The Netherlands	The Netherlands	153		270		365		522		The Netherlands	270		212
Mexico										Mexico	247		380
Japan										Japan	230		335
Other	Other	1,322		1,834		2,989		3,689		Other	1,986		1,667
Total	Total	$	5,546	$	9,048	$	13,040	$	17,826	Total	$	9,082	$	7,494

4. Accounts Receivable

Our accounts receivable are reflected in the Consolidated Balance Sheets net of allowance for credit losses of ~~$14 million and $16~~$15 million at ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019, respectively.~~2020.

~~Table of Contents~~

~~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	June 30, 2020		December 31, 2019		Millions of dollars	March 31, 2021		December 31, 2020
Finished goods	Finished goods	$	2,368	$	3,083	Finished goods	$	2,733	$	2,816
Work-in-process	Work-in-process	139		130		Work-in-process	184		144
Raw materials and supplies	Raw materials and supplies	1,261		1,375		Raw materials and supplies	1,715		1,384
Total inventories	Total inventories	$	3,768	$	4,588	Total inventories	$	4,632	$	4,344

Our inventories are stated at the lower of cost or market (“LCM”). Cost is determined using the last-in, first-out ~~("LIFO"~~(“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, and as a result we adjust the value of inventory to market value. 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~~LCM 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 ~~six~~three months of 2020, we recognized an LCM inventory valuation ~~charges~~charge of ~~$323~~$419 million related to the 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.

1210

Table of Contents

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	June 30, 2020		December 31, 2019		Millions of dollars	March 31, 2021		December 31, 2020
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)		995		995
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)		1,948		1,950
Senior Notes due 2024, $1,000 million, 5.75% ($4 million of debt issuance cost)						Senior Notes due 2024, $1,000 million, 5.75% ($4 million of debt issuance cost)	$	996	$	996
Senior Notes due 2055, $1,000 million, 4.625% ($15 million of discount; $11 million of debt issuance cost)						Senior Notes due 2055, $1,000 million, 4.625% ($15 million of discount; $11 million of debt issuance cost)	974		974
Term Loan due 2022, $4,000 million ($1 million of debt issuance cost)						Term Loan due 2022, $4,000 million ($1 million of debt issuance cost)	949		1,448

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)		744		744
Guaranteed Notes due 2023, $750 million, 4.0% ($3 million of discount; $1 million of debt issuance cost)						Guaranteed Notes due 2023, $750 million, 4.0% ($3 million of discount; $1 million of debt issuance cost)	746		745
Guaranteed Floating Rate Notes due 2023, $650 million ($3 million of debt issuance cost)						Guaranteed Floating Rate Notes due 2023, $650 million ($3 million of debt issuance cost)	647		646
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 2025, $500 million, 2.875% ($4 million of debt issuance cost)	496		496
Guaranteed Notes due 2025, $500 million, 1.25% ($1 million of discount; $4 million of debt issuance cost)						Guaranteed Notes due 2025, $500 million, 1.25% ($1 million of discount; $4 million of debt issuance cost)	495		495
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)	556		555		Guaranteed Notes due 2026, €500 million, 0.875% ($2 million of discount; $3 million of debt issuance cost)	583		608
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, $1,000 million, 3.5% ($7 million of discount; $5 million of debt issuance cost)						Guaranteed Notes due 2027, $1,000 million, 3.5% ($7 million of discount; $5 million of debt issuance cost)	1,086		1,090
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 2030, $500 million, 3.375% ($1 million of discount; $4 million of debt issuance cost)	495		495
Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $3 million of debt issuance cost)		551		552
Guaranteed Notes due 2030, $500 million, 2.25% ($4 million of discount; $4 million of debt issuance cost)						Guaranteed Notes due 2030, $500 million, 2.25% ($4 million of discount; $4 million of debt issuance cost)	492		492
Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $4 million of debt issuance cost)						Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $4 million of debt issuance cost)	577		602
Guaranteed Notes due 2040, $750 million, 3.375% ($2 million of discount; $8 million of debt issuance cost)						Guaranteed Notes due 2040, $750 million, 3.375% ($2 million of discount; $8 million of debt issuance cost)	740		740
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		981
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		—		Guaranteed Notes due 2050, $1,000 million, 4.2% ($6 million of discount; $10 million of debt issuance cost)	984		984
Guaranteed Notes due 2051, $1,000 million, 3.625% ($3 million of discount; $11 million of debt issuance cost)						Guaranteed Notes due 2051, $1,000 million, 3.625% ($3 million of discount; $11 million of debt issuance cost)	986		986
Guaranteed Notes due 2060, $500 million, 3.8% ($4 million of discount; $6 million of debt issuance cost)						Guaranteed Notes due 2060, $500 million, 3.8% ($4 million of discount; $6 million of debt issuance cost)	490		490
Other	Other	8		8		Other	28		28
Total	Total	13,677		11,617		Total	14,743		15,294
Less current maturities	Less current maturities	(3)		(3)		Less current maturities	(958)		(8)
Long-term debt	Long-term debt	$	13,674	$	11,614	Long-term debt	$	13,785	$	15,286

1311

Table of Contents

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 June 30,									Six Months Ended June 30,										June 30,		December 31,	Inception Year					Three Months Ended March 31,								March 31,				December 31,
Millions of dollars	Millions of dollars				2020			2019			2020			2019			2020			2019		Millions of dollars	Inception Year			2021				2020				2021				2020
Senior Notes due 2019, 5.0%		2014	$	—		$	—		$	—		$	(11)		$	—		$	—
Senior Notes due 2021, 6.0%	Senior Notes due 2021, 6.0%	2016	2			(13)			(14)			(20)			(15)			(1)		Senior Notes due 2021, 6.0%	2016							$	0			$	(16)			$	0			$	0
Guaranteed Notes due 2027, 3.5%	Guaranteed Notes due 2027, 3.5%	2017	7			(35)			(73)			(57)			(110)			(37)		Guaranteed Notes due 2027, 3.5%	2017					4				(80)				(98)				(102)
Guaranteed Notes due 2022, 1.875%	Guaranteed Notes due 2022, 1.875%	2018	—			(1)			1			(1)			(1)			(2)		Guaranteed Notes due 2022, 1.875%	2018					0				1				0				0
Guaranteed Notes due 2026, 0.875%	Guaranteed Notes due 2026, 0.875%	2020	(1)			—			(1)			—			(1)			—		Guaranteed Notes due 2026, 0.875%	2020					1				0				(1)				(2)
Total	Total		$	8		$	(49)		$	(87)		$	(89)		$	(127)		$	(40)	Total						$	5			$	(95)			$	(99)			$	(104)

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	June 30, 2020		December 31, 2019		Millions of dollars	March 31, 2021		December 31, 2020

U.S. Receivables Facility	U.S. Receivables Facility	$	—	$	—	U.S. Receivables Facility	$	0	$	0

Commercial paper	Commercial paper	473		262		Commercial paper	500		500
Precious metal financings	Precious metal financings	159		181		Precious metal financings	162		140
Other	Other	27		2		Other	20		23
Total Short-term debt	Total Short-term debt	$	659	$	445	Total Short-term debt	$	682	$	663

Long-Term Debt

Senior Revolving Credit Facility—Our $2,500 million Senior Revolving Credit Facility, of which $2,440 million expires in June 2023 and the remainder expires in June 2022, may be used for dollar and euro denominated ~~borrowings,~~borrowings. The facility has a $500 million ~~sublimit~~sub-limit 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. The 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. InAt March ~~2020, we borrowed $500 million from this facility, which we subsequently repaid in April 2020. At June 30, 2020,~~31, 2021, we had 0 borrowings or letters of credit outstanding and ~~$2,017~~$2,005 million of unused availability under this facility.

~~Guaranteed Notes~~Term Loan due ~~2025, 2030 and 2050~~2022—In ~~April 2020,~~March 2019, LYB ~~International~~Americas Finance ~~III,~~Company LLC (“LYB ~~Finance III”~~Americas Finance”), a wholly owned ~~finance~~ subsidiary of LyondellBasell Industries N.V., entered into a $4,000 million senior unsecured delayed draw term loan credit facility that matures in March 2022. Borrowings under the credit agreement were available through December 31, 2019, subsequent to which no further borrowings may be made under the agreement. Outstanding borrowings bear interest at either a base rate or LIBOR rate, as defined, plus in ~~Rule 3-10(b) of Regulation S-X, issued~~each case, an applicable margin determined by reference to LyondellBasell N.V.’s current credit ratings.

In January 2021, we repaid $500 million ~~of 2.875% guaranteed notes~~outstanding under our Term Loan due ~~2025 (the “2025 Notes”) at a discounted price of 99.911%,~~2022. An additional $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%~~was repaid in April 2021. ~~Net proceeds from the sale of the notes totaled $1,974 million.~~

1412

Table of Contents

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.~~

These unsecured notes, which are fully and unconditionally guaranteed by LyondellBasell Industries N.V., 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

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 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. InAdditional fees are incurred for 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.average daily unused commitments. This facility also provides for the issuance of letters of credit up to $200 million. ~~The term~~We plan on extending

all or a portion of ~~the~~this facility ~~may be extended~~prior to its maturity in July 2021 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. InAt March ~~2020, we borrowed $500 million from this facility, which we subsequently repaid in April 2020. At June 30, 2020,~~31, 2021, we had 0 borrowings or letters of credit outstanding and ~~$524~~$900 million unused availability under this facility.

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~~March 31, 2021 are based on the terms of the notes and range from ~~0.23%~~0.19% to ~~0.35%~~0.27%. At ~~June 30, 2020,~~March 31, 2021, we had ~~$473~~$500 million of outstanding commercial paper.

Weighted Average Interest Rate—At ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, our weighted average interest rates on outstanding Short-term debt ~~were 1.3% and 3.3%, respectively.~~was 0.9%.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

~~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 $7$5 million and $4 million for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 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 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 are fully and unconditionally guaranteed by LyondellBasell Industries N.V.

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,~~March 31, 2021, 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 1513 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. If applicable, updates have been included in the respective sections below.

Cash and Cash Equivalents—At ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, we had marketable securities classified as Cash and cash equivalents of ~~$1,358~~$560 million and ~~$389~~$682 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 $3 million and ~~$14~~losses of $7 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

1613

Table of Contents

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 for the periods presented that are measured at fair value on a recurring basis:


		June 30, 2020						December 31, 2019								March 31, 2021				December 31, 2020
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:
Commodities											Commodities	$	25	$	5	$	19	$	3	Prepaid expenses and other current assets
Commodities											Commodities	30		4		41		4		Other Assets
Foreign currency											Foreign currency	358		56		0		26		Prepaid expenses and other current assets

Foreign currency		$	—	$	20	$	—	$	27	Prepaid expenses and other current assets
Foreign currency		300		12		2,000		214		Other assets
Interest rates	Interest rates	—		1		—		22		Prepaid expenses and other current assets	Interest rates	0		1		0		0		Prepaid expenses and other current assets
Interest rates	Interest rates	252		3		1,940		41		Other assets	Interest rates	117		1		122		2		Other assets
Derivatives not designated as hedges:	Derivatives not designated as hedges:										Derivatives not designated as hedges:
Commodities	Commodities	165		55		3		—		Prepaid expenses and other current assets	Commodities	111		5		71		2		Prepaid expenses and other current assets
Foreign currency	Foreign currency	235		6		580		5		Prepaid expenses and other current assets	Foreign currency	34		1		149		0		Prepaid expenses and other current assets
Non-derivatives:	Non-derivatives:										Non-derivatives:
Available-for-sale debt securities	Available-for-sale debt securities	432		433		162		162		Short-term investments	Available-for-sale debt securities	265		266		348		349		Short-term investments
Equity securities	Equity securities	218		218		34		34		Short-term investments	Equity securities	117		117		353		353		Short-term investments
Total	Total	$	1,602	$	748	$	4,719	$	505		Total	$	1,057	$	456	$	1,103	$	739
Liabilities–	Liabilities–										Liabilities–
Derivatives designated as hedges:	Derivatives designated as hedges:										Derivatives designated as hedges:
Commodities											Commodities	$	0	$	0	$	0	$	2	Accrued liabilities

Commodities		$	51	$	2	$	—	$	—	Accrued liabilities
Foreign currency	Foreign currency	—		15		—		16		Accrued liabilities	Foreign currency	855		116		1,213		146		Accrued liabilities
Foreign currency	Foreign currency	2,355		108		950		53		Other liabilities	Foreign currency	2,682		209		2,682		302		Other liabilities
Interest rates		—		1		1,000		154		Accrued liabilities

Interest rates	Interest rates	1,500		756		700		77		Other liabilities	Interest rates	1,150		120		1,000		343		Other liabilities
Derivatives not designated as hedges:	Derivatives not designated as hedges:										Derivatives not designated as hedges:
Commodities	Commodities	103		17		224		34		Accrued liabilities	Commodities	191		22		113		14		Accrued liabilities
Foreign currency	Foreign currency	603		8		200		1		Accrued liabilities	Foreign currency	717		5		76		1		Accrued liabilities

Total	Total	$	4,612	$	907	$	3,074	$	335		Total	$	5,595	$	472	$	5,084	$	808

As of March 31, 2021, our limited partnership investments included in our equity securities discussed below are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. All other financial instruments in the table above, including equity securities as of December 31, 2020, are classified as Level 2. We present the gross assets and liabilities of our derivative financial instruments on the Consolidated Balance Sheets.

At ~~June 30, 2020,~~March 31, 2021, our outstanding foreign currency contracts, not designated as hedges, mature from ~~July 2020~~April 2021 to March ~~2021.~~2022. Our commodity contracts, not designated as hedges, mature ~~from July 2020 to December 2020.~~in May 2021.

1714

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

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 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 debt.

June 30, 2020 December 31, 2019
Millions of dollars Carrying
Value Fair
Value Carrying
Value Fair
Value
Non-derivatives:
Liabilities:
Short-term debt $ 159 $ 159 $ 181 $ 215
Long-term debt 13,669 14,872 11,609 12,561
Total $ 13,828 $ 15,031 $ 11,790 $ 12,776

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


	March 31, 2021				December 31, 2020
Millions of dollars	Carrying Value		Fair Value		Carrying Value		Fair Value
Non-derivatives:


Liabilities:
Short-term debt	$	162	$	181	$	140	$	154
Long-term debt	14,715		15,895		15,266		17,290
Total	$	14,877	$	16,076	$	15,406	$	17,444

Net Investment Hedges—The following table summarizes our net investment hedges outstanding for the periods presented:


	March 31, 2021				December 31, 2020
Millions of euro/dollars	Notional Value				Notional Value				Expiration Date
			Equivalent US$				Equivalent US$
Foreign currency	€	1,667	$	1,890	€	1,667	$	1,890	2021 to 2030

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
In April 2021, we entered into a foreign currency contract with a notional value of €250 million that was designated as a net investment hedge.

Cash Flow Hedges—The following table summarizes our cash flow hedges outstanding for the periods presented:


	March 31, 2021		December 31, 2020
Millions of dollars	Notional Value		Notional Value		Expiration Date
Foreign currency	$	2,005	$	2,005	2021 to 2027
Interest rates	1,000		1,000		2023 to 2024
Commodities	55		60		2021 to 2022

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 ~~June 30,~~March 31, 2021 and December 31, 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 June 30, 2020 includes~~include$172 million and $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.~~swaps, respectively. Related cash flows are included in financing activities in the Consolidated Statements of Cash Flows.

As of March 31, 2021, on a pre-tax basis, $5 million is scheduled to be reclassified from Accumulated other comprehensive loss as an increase to Interest expense over the next twelve months.

1815

Table of Contents

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 for the periods presented:

June 30, 2020

December 31, 2019

March 31, 2021

December 31, 2020

Millions of dollars

Notional Value

Expiration Date

Millions of dollars

Notional Value

Expiration Date

Interest rates

252

2,140

2022 to 2026

Interest rates

267

122

2026 to 2030

In ~~January 2020,~~March 2021, we entered into a ~~euro~~ fixed-for-floating interest rate swap to mitigate the change in the fair value of ~~€100~~$150 million of our ~~€500~~$500 million, 3.375% guaranteed notes due ~~2026~~2030 associated with the risk of variability in the ~~6-month EURIBOR~~3-month LIBOR rate component.

In April 2021, we entered into two fixed-for-floating interest rate swaps to mitigate the ~~benchmark interest rate.~~ change in the fair value associated with the risk of variability in the 3-month LIBOR rate component of $150 million of our $500 million, 2.875% guaranteed notes due 2025 and $150 million of our $1,000 million, 3.5% guaranteed notes due 2027.

The fixed-rate and variable-rate components for these trades are settled ~~annually~~semi-annually and ~~semi-annually,~~quarterly, 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.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

Impact on Earnings and Other Comprehensive Income—The following tables summarize the pre-tax effect of derivative and non-derivative instruments recorded in Accumulated other comprehensive ~~los~~sloss (“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																										Effects of Financial Instruments
		Six Months Ended June 30,																										Three Months Ended March 31,
		Gain (Loss) Recognized in AOCI						Gain (Loss) Reclassified from AOCI to Income						Gain (Loss) Recognized in Income							Income Statement	Gain (Loss) Recognized in AOCI				Gain (Loss) Reclassified from AOCI to Income			Gain (Loss) Recognized in Income	Income Statement
Millions of dollars	Millions of dollars	2020		2019		2020		2019		2020		2019		Classification	Millions of dollars	2021		2020		2021		2020		2021		2020		Classification
Derivatives designated as hedges:	Derivatives designated as hedges:														Derivatives designated as hedges:
Commodities		$	(2)	$	(41)	$	—	$	(8)	$	—	$	—	Sales and other operating revenues

Commodities	Commodities	—		38		—		4		—		—		Cost of sales	Commodities	$	6	$	0	$	(1)	$	0	$	0	$	0	Cost of sales
Foreign currency	Foreign currency	78		51		(8)		(13)		30		32		Interest expense	Foreign currency	148		164		(92)		(53)		12		16		Interest expense
Interest rates	Interest rates	(532)		(179)		2		(4)		90		73		Interest expense	Interest rates	223		(535)		1		0		2		96		Interest expense
Derivatives not designated as hedges:	Derivatives not designated as hedges:														Derivatives not designated as hedges:
Commodities	Commodities	—		—		—		—		5		3		Sales and other operating revenues	Commodities	0		0		0		0		3		(9)		Sales and other operating revenues
Commodities	Commodities	—		—		—		—		74		(19)		Cost of sales	Commodities	0		0		0		0		11		(3)		Cost of sales
Foreign currency	Foreign currency	—		—		—		—		(10)		16		Other income, net	Foreign currency	0		0		0		0		(14)		(4)		Other income, net
Non-derivatives designated as hedges:	Non-derivatives designated as hedges:														Non-derivatives designated as hedges:
Long-term debt	Long-term debt	2		5		—		—		—		—		Other income, net	Long-term debt	0		22		0		0		0		0		Other income, net
Total	Total	$	(454)	$	(126)	$	(6)	$	(21)	$	189	$	105		Total	$	377	$	(349)	$	(92)	$	(53)	$	14	$	96

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, 2021 and 2020 were gains of $4 million and less than $1 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 months ended March 31, 2021 and 2020 were gains of $3 million and $4 million, respectively.

2016

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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 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 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~~ ~~$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 aless than $1 million and $3$2 million ~~decrease~~decreases in ~~interest~~Interest expense during the three ~~and six~~ months ended ~~June 30,~~in March 31, 2021 and 2020, ~~respectively,~~ ~~and $2 million and $5 million increase in interest expense during the three and six months ended 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
Debt securities at June 30, 2020 $ 432 $ 1 $ — $ 433
Debt securities at December 31, 2019 162 — — 162


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

Debt securities at March 31, 2021	$	265	$	1	$	0	$	266
Debt securities at December 31, 2020	348		1		0		349

NaN allowance for credit losses related to our available-for-sale debt securities ~~was~~were recorded for the ~~six~~three months ended ~~June 30, 2020 or~~March 31, 2021 and for the year ended December 31, ~~2019.~~2020.

As of ~~June 30, 2020,~~March 31, 2021, bonds classified as available-for-sale debt securities had remaining maturities between ~~4 months~~1 month and 393 months.

~~The~~We received proceeds of $74 million from maturities ~~and sales~~ of our ~~available-for-sale-debt~~available-for-sale debt securities during the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021. NaN proceeds were received from maturities of our available-for-sale debt securities during the three months ended March 31, 2020. In addition, 0 proceeds were received and ~~2019 are summarized in the following table:~~

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~~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 ~~June 30, 2020. The gross realized gains~~March 31, 2021 and ~~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.~~2020, respectively.

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 ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

Investments in Equity Securities—Our investment in equity securities consists of an investment in a limited partnership with a notional amount of $117 million and $353 million as of March 31, 2021 and December 31, 2020, respectively. Carrying amount approximate fair value. The investment is carried at its net asset value as a practical expedient at March 31, 2021 and fair value at December 31, 2020. The investment is under voluntary liquidation by the fund administrator and we expect the investment to be fully liquidated within the next twelve months, during which time redemption or sale of the investment is restricted.

We received proceeds of $226 million and $1 million related to our investments in equity securities during the three months ended March 31, 2021 and 2020, respectively. Proceeds of $16 million were received in April 2021.

We recognized unrealized gains of less than $1 million on our equity securities that were outstanding during the three months ended March 31, 2021 and 2020.

~~Investments in Equity Securities—Our investment in equity securities primarily consist of limited partnership investments. At June 30, 2020 and December 31, 2019, we had investments in equity securities with a notional amount~~ ~~of $218 million and $34 million, respectively,~~ ~~and a fair value of $218 million and~~ ~~$34 million, respectively. These investments may be redeemed within 7 days following written notice from the Company.~~

~~Table of Contents~~

~~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 for the periods presented:~~

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

8. Income Taxes

~~Our~~For interim tax reporting, we estimate an annual effective ~~income~~ tax rate ~~for~~which is applied to the ~~three months ended June 30, 2020 was -11.3% compared with 14.4% for~~year-to-date ordinary income (loss). Tax effects of significant unusual or infrequently occurring items are excluded from the ~~three months ended June 30, 2019. For the six months ended June 30, 2020, the~~estimated annual effective ~~income~~ tax rate ~~was 8.6% compared with 16.9% for~~calculation and recognized in the ~~six months ended June 30, 2019.~~interim period in which they occur. 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,~~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,~~

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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. ~~enacted~~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.

Our effective income tax rate for the three months ended March 31, 2021 was 6.1% compared with 34.4% for the three months ended March 31, 2020. The lower effective tax rate was primarily attributable to the remeasurement of U.S. deferred tax liabilities that occurred in the prior year as a result of the Coronavirus Aid, Relief, and Economic Security Act, also known as the “CARES ~~Act,”~~Act”, and return to accrual adjustments primarily from a tax benefit associated with a step-up of certain Italian assets to fair market value. The tax benefit associated with a step-up of certain Italian assets resulted from a tax change which ~~contains numerous income tax provisions~~allows a voluntary step-up of tangible and ~~other stimulus measures. We anticipate that several~~intangible assets to fair market value in exchange for a substitute tax. During the first quarter of 2021, we assessed a reasonable estimate 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~~step-up of ~~June 30, 2020, we recorded an overall~~select assets and recognized a net tax benefit ~~including a remeasurement~~of $120 million. These drivers were partially offset by the reduced relative impact of our ~~deferred income tax balances. We continue to assess the impact that the CARES Act will have on 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 June 30, 2020 was~~drivers, primarily ~~attributable to an anticipated benefit resulting from various provisions of the CARES Act and to the increased relative impact of~~ exempt income, due to decreased pretax income. This is partially offset by changes in the pretax income in countries with varying statutory tax rates and tax benefits related to prior year research and development activities.increased pre-tax earnings.

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 ~~June 30, 2020~~March 31, 2021, we had capital expenditure commitments, which we incurred in our normal course of business, including commitments of approximately ~~$475~~$316 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.

~~Table of Contents~~

~~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 ~~$129~~$130 million and ~~$132~~$133 million as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. At ~~June 30, 2020,~~March 31, 2021, the accrued liabilities for individual sites range from less than $1 million to ~~$15~~$16 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.

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 claims relating to environmental and tax matters and various types of litigation. As of ~~June 30, 2020,~~March 31, 2021, 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.

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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~~assess 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 Consolidated Financial Statements.

10. Shareholders’ Equity and Redeemable Non-controlling Interests

Shareholders’ Equity

Dividend Distributions—~~The following table summarizes the dividends~~In March 2021, we paid ~~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

~~Table~~a cash dividend of ~~Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

~~Share Repurchase Authorization—In May 2020, our~~$1.05 per share for an aggregate of $352 million to shareholders approved a proposal to authorize us to repurchase up to 34.0 million ordinary shares, through November 29, 2021 (“May 2020 Share Repurchase Authorization”), which superseded any prior repurchase authorizations. The timing and amount of ~~these repurchases, which are determined based~~record 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.March 8, 2021.

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

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


		Six Months Ended June 30,				Three Months Ended March 31,
		2020	2019		2021	2020
Ordinary shares outstanding:	Ordinary shares outstanding:			Ordinary shares outstanding:
Beginning balance	Beginning balance	333,476,883	375,696,661	Beginning balance	334,015,220	333,476,883
Share-based compensation	Share-based compensation	225,367	256,140	Share-based compensation	247,964	196,037

Employee stock purchase plan	Employee stock purchase plan	178,239	83,473	Employee stock purchase plan	49,956	81,215
Purchase of ordinary shares	Purchase of ordinary shares	(50,685)	(5,648,900)	Purchase of ordinary shares	0	(50,685)
Ending balance	Ending balance	333,829,804	370,387,374	Ending balance	334,313,140	333,703,450

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

Six Months Ended
June 30,
2020 2019
Ordinary shares held as treasury shares:
Beginning balance 6,568,745 24,513,619
Share-based compensation (225,367) (256,140)
Employee stock purchase plan (178,239) (83,473)
Purchase of ordinary shares 50,685 5,648,900
Ending balance 6,215,824 29,822,906


	Three Months Ended March 31,
	2021	2020
Ordinary shares held as treasury shares:
Beginning balance	6,030,408	6,568,745
Share-based compensation	(247,964)	(196,037)

Employee stock purchase plan	(49,956)	(81,215)
Purchase of ordinary shares	0	50,685

Ending balance	5,732,488	6,342,178

2419

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Accumulated Other Comprehensive Loss—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 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		$	(200)	$	—	$	(711)	$	(873)	$	(1,784)
Balance – January 1, 2021												Balance – January 1, 2021	$	(426)	$	1	$	(752)	$	(766)	$	(1,943)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(456)		1		—		(133)		(588)		Other comprehensive income (loss) before reclassifications	315		0		0		(93)		222
Tax (expense) benefit before reclassifications		95		—		—		—		95
Tax expense before reclassifications												Tax expense before reclassifications	(68)		0		0		(14)		(82)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	(6)		—		28		—		22		Amounts reclassified from accumulated other comprehensive loss	(92)		0		15		0		(77)
Tax (expense) benefit	Tax (expense) benefit	3		—		(7)		—		(4)		Tax (expense) benefit	20		0		(4)		0		16
Net other comprehensive income (loss)	Net other comprehensive income (loss)	(364)		1		21		(133)		(475)		Net other comprehensive income (loss)	175		0		11		(107)		79
Balance – June 30, 2020		$	(564)	$	1	$	(690)	$	(1,006)	$	(2,259)
Balance – March 31, 2021												Balance – March 31, 2021	$	(251)	$	1	$	(741)	$	(873)	$	(1,864)


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, 2019		$	(68)	$	—	$	(442)	$	(853)	$	(1,363)
Other comprehensive income (loss) before reclassifications		(129)		1		—		14		(114)
Balance – January 1, 2020												Balance – January 1, 2020	$	(200)	$	0	$	(711)	$	(873)	$	(1,784)
Other comprehensive loss before reclassifications												Other comprehensive loss before reclassifications	(388)		(3)		0		(195)		(586)
Tax (expense) benefit before reclassifications	Tax (expense) benefit before reclassifications	29		—		—		(6)		23		Tax (expense) benefit before reclassifications	88		1		0		(4)		85
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	(21)		—		14		—		(7)		Amounts reclassified from accumulated other comprehensive loss	(53)		0		14		0		(39)
Tax (expense) benefit	Tax (expense) benefit	3		—		(4)		—		(1)		Tax (expense) benefit	15		0		(4)		0		11
Net other comprehensive income (loss)	Net other comprehensive income (loss)	(118)		1		10		8		(99)		Net other comprehensive income (loss)	(338)		(2)		10		(199)		(529)
Balance – June 30, 2019		$	(186)	$	1	$	(432)	$	(845)	$	(1,462)
Balance – March 31, 2020												Balance – March 31, 2020	$	(538)	$	(2)	$	(701)	$	(1,072)	$	(2,313)

2520

Table of Contents

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
June 30, Six Months Ended
June 30, Affected Line Item on
the Consolidated
Statements of Income
Millions of dollars 2020 2019 2020 2019
Reclassification adjustments for:
Financial derivatives:
Foreign currency $ 45 $ 26 $ (8) $ (13) Other income, net
Commodities — (2) — (8) Sales and other operating revenue
Commodities — — — 4 Cost of sales
Interest rates 2 — 2 (4) Interest expense
Income tax expense (benefit) 12 7 (3) (3) Provision for income taxes
Financial derivatives, net of tax 35 17 (3) (18)
Amortization of defined pension items:
Prior service cost 1 1 2 1 Other income, net
Actuarial loss 13 6 26 13 Other income, net
Income tax expense (benefit) 3 2 7 4 Provision for income taxes
Defined pension items, net of tax 11 5 21 10
Total reclassifications, before tax 61 31 22 (7)
Income tax expense (benefit) 15 9 4 1 Provision for income taxes
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.~~


	Three Months Ended March 31,			Affected Line Item on the Consolidated Statements of Income
Millions of dollars		2021				2020
Reclassification adjustments for:
Financial derivatives:
Foreign currency		$	(92)	$	(53)		Interest expense

Commodities		(1)		0			Cost of sales
Interest rates		1		0			Interest expense
Income tax expense (benefit)		(20)		(15)			Provision for income taxes
Financial derivatives, net of tax		(72)		(38)
Amortization of defined pension items:
Prior service cost		1		1			Other income, net
Actuarial loss		14		13			Other income, net

Income tax expense (benefit)		4		4			Provision for income taxes
Defined pension items, net of tax		11		10
Total reclassifications, before tax		(77)		(39)
Income tax benefit		(16)		(11)			Provision for income taxes
Total reclassifications, after tax		$	(61)	$	(28)		Amount included in net income

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~~March 31, 2021 and December 31, ~~2019,~~2020, we had 115,374 shares of redeemable non-controlling interest stock outstanding.

In February ~~and May 2020,~~2021, 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.~~2021. These dividends totaled $3$2 million for each of the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 and ~~2019.~~2020.

2621

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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 June 30,															Three Months Ended March 31,
		2020						2019							2021				2020
Millions of dollars	Millions of dollars	Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations		Millions of dollars	Continuing Operations		Discontinued Operations		Continuing Operations		Discontinued Operations
Net income (loss)	Net income (loss)	$	315	$	(1)	$	1,006	$	(3)	Net income (loss)	$	1,072	$	(2)	$	143	$	1

Dividends on redeemable non-controlling interest stock		(1)		—		(1)		—
Dividends on redeemable non-controlling interests										Dividends on redeemable non-controlling interests	(2)		0		(2)		0
Net (income) loss attributable to participating securities	Net (income) loss attributable to participating securities	(1)		—		(2)		—		Net (income) loss attributable to participating securities	(2)		0		0		0
Net income (loss) attributable to ordinary shareholders – basic and diluted	Net income (loss) attributable to ordinary shareholders – basic and diluted	$	313	$	(1)	$	1,003	$	(3)	Net income (loss) attributable to ordinary shareholders – basic and diluted	$	1,068	$	(2)	$	141	$	1

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

Effect of dilutive securities	Effect of dilutive securities	—		—		—		—		Effect of dilutive securities	0		0		0		0
Potential dilutive shares	Potential dilutive shares	334		334		370		370		Potential dilutive shares	334		334		334		334

Earnings (loss) per share:	Earnings (loss) per share:									Earnings (loss) per share:
Basic	Basic	$	0.94	$	—	$	2.71	$	(0.01)	Basic	$	3.20	$	(0.01)	$	0.42	$	0
Diluted	Diluted	$	0.94	$	—	$	2.71	$	(0.01)	Diluted	$	3.19	$	(0.01)	$	0.42	$	0

~~Table of Contents~~

~~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)

2822

Table of Contents

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 June 30, 2020																															Three Months Ended March 31, 2021
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	$	1,073	$	1,642	$	1,140	$	700	$	854	$	137	$	—	$	5,546	Customers	$	2,135	$	2,840	$	1,704	$	1,269	$	993	$	141	$	0	$	9,082
Intersegment	Intersegment	360		60		17		5		65		40		(547)		—		Intersegment	724		207		63		1		133		24		(1,152)		0
		1,433		1,702		1,157		705		919		177		(547)		5,546			2,859		3,047		1,767		1,270		1,126		165		(1,152)		9,082
Income from equity investments	Income from equity investments	7		51		3		—		—		—		—		61		Income from equity investments	30		95		12		0		0		0		0		137
EBITDA	EBITDA	248		185		101		(44)		165		112		(7)		760		EBITDA	867		412		182		135		(110)		94		5		1,585
Capital expenditures																		Capital expenditures	65		40		145		20		25		22		23		340

2923

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Three 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 $ 1,325 $ 2,283 $ 2,020 $ 1,257 $ 2,011 $ 152 $ — $ 9,048
Intersegment 789 222 42 1 169 21 (1,244) —
2,114 2,505 2,062 1,258 2,180 173 (1,244) 9,048
Income (loss) from equity investments 12 52 2 (2) — — — 64
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 includes LCM inventory valuation charges of $73 million during the first six months of 2020, primarily driven 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 six months of 2020 were negatively impacted by $34 million and $70 million of LCM inventory valuation charges, respectively, largely due to a decline in the price of naphtha in the first quarter of 2020 and a decline in the price of polymers in the second quarter of 2020.

~~Table of Contents~~

~~LYONDELLBASELL INDUSTRIES N.V.~~

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

Operating results for our I&D segment in the second quarter and first six months of 2020 reflect $20 million and $98 million LCM inventory valuation charges, respectively, driven by declines in the prices of various gasoline blending components and 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 six months of 2020 were negatively impacted by $67 million and $69 million LCM inventory valuation charges, respectively, mainly due to a decline in the price of polymers.

In our Refining segment, operating results include LCM inventory valuation charges of $13 million during the first six months of 2020, primarily driven by 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 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.


	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	$	0	$	7,494
Intersegment	619		160		38		3		112		26		(958)		0
	1,792		2,224		1,770		1,096		1,448		122		(958)		7,494
Income (loss) from equity investments	2		(3)		2		(1)		0		0		0		0
LCM inventory valuation charge	111		36		78		2		192		0		0		419
EBITDA	366		189		203		113		(272)		56		(9)		646
Capital expenditures	204		42		353		13		16		30		2		660

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 June 30,						Six Months Ended June 30,					Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		2020		2019		Millions of dollars	2021		2020
EBITDA:	EBITDA:									EBITDA:
Total segment EBITDA	Total segment EBITDA	$	767	$	1,575	$	1,422	$	2,993	Total segment EBITDA	$	1,580	$	655
Other EBITDA	Other EBITDA	(7)		4		(16)		14		Other EBITDA	5		(9)
Less:	Less:									Less:
Depreciation and amortization expense	Depreciation and amortization expense	(356)		(328)		(698)		(650)		Depreciation and amortization expense	(335)		(342)
Interest expense	Interest expense	(125)		(81)		(214)		(173)		Interest expense	(110)		(89)
Add:	Add:									Add:
Interest income	Interest income	4		5		7		11		Interest income	2		3
Income from continuing operations before income taxes	Income from continuing operations before income taxes	$	283	$	1,175	$	501	$	2,195	Income from continuing operations before income taxes	$	1,142	$	218

3124

Table of Contents

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,”~~“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~~

First quarter performance built upon the economic momentum we saw toward the end of last year. We experienced improved consumer-driven demand, recovery in the second quarter and first six months of 2020 relative to the comparative 2019 periods, primarily reflecting lower margins and volumes in several 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 response to COVID-19. Our olefins and polyolefins businesses continued to benefit from strong demand for polymers used in consumer-driven packaging and healthcare applications. As expected, our Intermediates & Derivatives, Refining and Advanced Polymer Solutions segments were impacted by significant reductions in demand for transportation fuels and 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~~markets and ~~prices for polyethylene exports from North America improved~~industry supply constraints, which enabled price increases and the U.S. ethane feedstock advantage returned during May and June of 2020 with rebounding crude oil prices. We applied our experience with the first quarter progression of events in Asia to manage our global businesses and generate $1.3 billion of cash from operating activities during a challenging second quarter. We also moved quickly to strengthen our balance sheet and bolster liquidity, and believe we remain well-positioned to navigate through these volatile market conditions.

~~During the first six months of 2020, we recognized a lower of cost or market (“LCM”) inventory valuation charge of $323 million related to the decline in pricing~~drove margin improvements for many of our ~~raw material~~products. During February 2021, unusually cold weather and ~~finished goods inventories largely driven by~~related power outages impacted operations in our industry across the ~~current economic conditions. Results~~state of Texas and reduced our production volumes. In March 2021 we achieved the first full quarter of 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 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 the 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.

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 regionsrecently formed Louisiana Integrated PolyEthylene JV LLC joint venture (the “Louisiana Joint Venture”) in which we ~~operate.~~

have a 50% ownership interest. We benefited from the increased geographic diversity of our portfolio as the Louisiana ethylene cracker operated continuously when most Texas assets were down due to the cold weather. Tight markets and strong demand drove margin improvements in our O&P—Americas and O&P—EAI segments. Higher demand from automotive and other non-durable markets increased volumes for our Advanced Polymer Solutions segment while margins compressed due to rapidly rising raw material costs.

~~Table of~~ ~~Contents~~

Significant items that affected our results during the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 relative to the ~~second~~first quarter ~~and first six months~~ of ~~2019~~2020 include:

•O~~&P–~~&P—Americas results ~~declined~~increased primarily due to ~~a decline in~~ olefin margin improvements and ~~polyolefins margins;~~the first full quarter of results for our newly formed Louisiana Joint Venture;

•O~~&P–~~&P—EAI results ~~declined due to~~improved as a result of higher polyolefin margins and equity income, partly offset by lower olefin margins; and ~~polyolefins margins;~~

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

•~~APS segment results declined driven by~~ lower ~~compounding and solutions volumes.~~volumes across most businesses from the downtime in Texas due to the weather events.

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~~In January 2021, signed an ~~integrated olefins and polyolefins~~agreement to form a 50 percent owned 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;~~China Petroleum & Chemical Corporation which will construct a new PO and SM unit in China; and

•In both January and April ~~2020,~~2021, repaid $500 million outstanding under our ~~Senior Revolving Credit Facility and $500 million outstanding under our U.S. Receivables Facility.~~Term Loan due 2022, for a total repayment of $1 billion.

Table of Contents

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


		Three Months Ended June 30,						Six Months Ended June 30,					Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		2020		2019		Millions of dollars	2021		2020
Sales and other operating revenues	Sales and other operating revenues	$	5,546	$	9,048	$	13,040	$	17,826	Sales and other operating revenues	$	9,082	$	7,494
Cost of sales	Cost of sales	4,894		7,542		11,762		14,988		Cost of sales	7,678		6,868

Selling, general and administrative expenses	Selling, general and administrative expenses	288		302		583		589		Selling, general and administrative expenses	287		295
Research and development expenses	Research and development expenses	25		27		52		55		Research and development expenses	29		27
Operating income	Operating income	339		1,177		643		2,194		Operating income	1,088		304
Interest expense	Interest expense	(125)		(81)		(214)		(173)		Interest expense	(110)		(89)
Interest income	Interest income	4		5		7		11		Interest income	2		3
Other income, net	Other income, net	4		10		4		35		Other income, net	25		—
Income from equity investments	Income from equity investments	61		64		61		128		Income from equity investments	137		—
Provision for (benefit from) income taxes		(32)		169		43		372
Income from continuing operations before income taxes										Income from continuing operations before income taxes	1,142		218
Provision for income taxes										Provision for income taxes	70		75
Income from continuing operations	Income from continuing operations	315		1,006		458		1,823		Income from continuing operations	1,072		143
Loss from discontinued operations, net of tax		(1)		(3)		—		(3)
(Loss) income from discontinued operations, net of tax										(Loss) income from discontinued operations, net of tax	(2)		1
Net income	Net income	$	314	$	1,003	$	458	$	1,820	Net income	$	1,070	$	144

~~Table of~~ ~~Contents~~

RESULTS OF OPERATIONS

Revenues—Revenues ~~decreased~~increased by ~~$3,502~~$1,588 million, or ~~39%, in the second quarter of 2020 compared to the second quarter of 2019 and by $4,786 million, or 27%~~21%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~2020. Average sales prices in the ~~second~~first quarter ~~and the first six months~~ of ~~2020~~2021 were ~~lower~~higher for ~~most~~many of our products as sales prices generally correlate with crude oil prices, which ~~decreased~~increased relative to the corresponding ~~periods~~period in ~~2019.~~2020. These ~~lower~~higher prices led to a ~~37% and 24% decrease~~26% increase in revenue in the ~~second~~first quarter ~~and~~of 2021. Favorable foreign exchange impacts resulted in a revenue increase of 4% during the first ~~six months~~quarter of ~~2020, respectively.~~2021. Lower sales volumes resulted in a revenue decrease of ~~1% and 2%~~9% relative to the ~~second~~first quarter of 2020 primarily due to unusually cold temperatures and ~~first six months of 2019, respectively. Unfavorable foreign exchange impacts also resulted~~associated electrical power outages that led to shutdowns in ~~a revenue decrease of 1% each~~our Refining and I&D manufacturing facilities in ~~the second quarter and the first six months of 2020.~~Texas partially offset by revenues generated from our Louisiana Joint Venture.

Cost of Sales—Cost of sales ~~decreased~~increased by ~~$2,648~~$810 million, or ~~35%, in the second quarter of 2020 compared to the second quarter of 2019 and by $3,226 million, or 22%~~12%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~2020. This ~~decrease~~increase primarily related to ~~lower~~higher feedstock and energy costs.

~~During~~ Additionally, in the first ~~six months~~quarter of 2020, we recognized an LCM inventory valuation ~~charges~~charge of ~~$323~~$419 million related to the decline in market 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.

Operating Income—Operating income ~~decreased~~increased by ~~$838~~$784 million, or ~~71%, in the second quarter of 2020 compared to the second quarter of 2019 and by $1,551 million, or 71%~~258%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019. Operating income includes the effects of LCM inventory valuation charges as noted above.~~

2020. In the ~~second~~first quarter of ~~2020,~~2021, operating income in our O&P–Americas, ~~I&D, APS, and~~Refining, O&P–EAI, Technology and APS segments ~~declined~~increased by ~~$397~~$449 million, ~~$348~~$184 million, ~~$174~~$124 million, $35 million and ~~$145~~$34 million, respectively, relative to the ~~second~~first quarter of ~~2019.~~2020. The ~~declines~~increases were partially offset by ~~the increases~~a decline of ~~operating income in the amount of $226 million and $8~~$43 million in our ~~Refining and Technology segments~~I&D segment in the ~~second~~first 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,2021 compared to the first ~~six months of 2019.~~

~~Income from Equity Investments—Income from our equity investments declined by $3 million, or 5% in the second~~ quarter of 2020 compared to the second quarter of 2019 and by $67 million, or 52%, in the first six months of 2020 compared to the first six months of 2019. The 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.

2020. Results for each of our business segments are discussed further in the “Segment Analysis” section below.

Income ~~Taxes~~from Equity Investments—~~We believe~~Income from our ~~effective income tax rate for 2020 will be lower than~~equity investments increased $137 million, or 100%, in the ~~previously provided guidance of mid-teens. Our effective income tax rate for the second~~first quarter of ~~2020 was -11.3%~~2021 compared ~~with 14.4% for~~to the ~~second~~first quarter of ~~2019, and for the first six months of 2020~~2020. The increase 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~~primarily due to increases in ~~pretax income~~Income from equity investments 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,” 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 continueO&P–EAI segment driven primarily by higher margins due to ~~assess the impact that the CARES Act will have on our Company.~~

increased demand.

3426

Table of Contents

~~Compared with the three months ended June 30, 2019, the lower~~Income Taxes—Our effective income tax rate for the three months ended ~~June 30, 2020~~March 31, 2021 was ~~primarily attributable to a benefit resulting from various provisions of the CARES Act (-28.9%) including the remeasurement of our deferred tax balances resulting in negative tax expense~~6.1% compared with 34.4% for the ~~quarter.~~three months ended March 31, 2020. The lower effective tax rate was ~~further~~primarily attributable to the remeasurement of U.S. deferred tax liabilities that occurred in the prior year as a result of the CARES Act (-20.9%) and return to accrual adjustments primarily from a tax benefit associated with a step-up of certain Italian assets to fair market value (-11.3%). These drivers were partially offset by the reduced ~~by an increased~~ relative impact of our tax rate drivers, primarily 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%increased pre-tax earnings (7.1%). 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 pretax income (-9.0%), the projected benefit resulting from various provisions of the CARES Act (-6.4%), partially offset by the changes in pretax income in countries with varying statutory tax 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.

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.

Comprehensive Income

—Comprehensive income ~~(loss) decreased~~increased by ~~$591 million in the second quarter of 2020 compared to the second quarter of 2019 and by $1,738~~$1,534 million in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019,~~2020, primarily due to ~~lower~~higher net income, ~~and~~ net ~~unfavorable~~favorable impacts of financial derivative instruments driven by periodic changes in benchmark interest ~~rates. In the second quarter of 2020, these decreases were partially offset by the favorable impact of unrealized net changes in~~rates and improved foreign currency translation ~~adjustments,~~adjustments.

In the first quarter of 2021 and 2020, the cumulative after-tax effects of our derivatives designated as cash flow hedges were net gains of $175 million and net losses of $338 million, respectively. Pre-tax gains of $223 million and pre-tax losses of $535 million related to forward-starting interest rate swaps were driven by periodic changes in benchmark interest rates in the first ~~six months~~quarter of 2021 and 2020, ~~supplemented by~~respectively. The fluctuations of the ~~unfavorable impact of unrealized net~~U.S. dollar against the euro and the periodic changes in ~~foreign currency translation adjustments.~~benchmark interest rates, in the first quarter of 2021 and 2020, resulted in pre-tax gains of $86 million and $147 million, respectively, related to our cross-currency swaps. Pre-tax losses of $92 million and $53 million related to our cross-currency swaps were reclassified from Accumulated other comprehensive loss to Interest expense in the first quarter of 2021 and 2020, respectively. The remaining change pertains to our commodity cash flow hedges.

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 ~~increased~~decreased during the ~~second~~first quarter of 2021 and ~~decreased for first 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 related to unrealized changes in foreign currency translation impacts were partially offset by pre-tax ~~losses of $37 million in the second quarter of 2020 and pre-tax~~ gains of $2$62 million and $39 million in the first ~~six months~~quarter of 2021 and 2020, respectively, which represent the effective portion of our net investment hedges.

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

3527

Table of Contents

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.”~~“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
June 30, Six Months Ended
June 30,
Millions of dollars 2020 2019 2020 2019
Sales and other operating revenues:
O&P–Americas segment $ 1,433 $ 2,114 $ 3,225 $ 4,225
O&P–EAI segment 1,702 2,505 3,926 5,040
I&D segment 1,157 2,062 2,927 3,956
APS segment 705 1,258 1,801 2,597
Refining segment 919 2,180 2,367 4,062
Technology segment 177 173 299 314
Other, including intersegment eliminations (547) (1,244) (1,505) (2,368)
Total $ 5,546 $ 9,048 $ 13,040 $ 17,826
Operating income (loss):
O&P–Americas segment $ 107 $ 504 $ 345 $ 888
O&P–EAI segment 81 226 216 412
I&D segment 24 372 155 686
APS segment (83) 91 (13) 210
Refining segment 116 (110) (198) (169)
Technology segment 104 96 151 169
Other, including intersegment eliminations (10) (2) (13) (2)
Total $ 339 $ 1,177 $ 643 $ 2,194
Depreciation and amortization:
O&P–Americas segment $ 133 $ 117 $ 257 $ 232
O&P–EAI segment 53 52 106 105
I&D segment 74 74 144 146
APS segment 39 30 83 59
Refining segment 49 44 91 87
Technology segment 8 11 17 21
Total $ 356 $ 328 $ 698 $ 650


	Three Months Ended March 31,
Millions of dollars		2021		2020
Sales and other operating revenues:
O&P–Americas segment		$	2,859	$	1,792
O&P–EAI segment		3,047		2,224
I&D segment		1,767		1,770
APS segment		1,270		1,096
Refining segment		1,126		1,448
Technology segment		165		122
Other, including intersegment eliminations		(1,152)		(958)
Total		$	9,082	$	7,494
Operating income (loss):
O&P–Americas segment		$	687	$	238
O&P–EAI segment		259		135
I&D segment		88		131
APS segment		104		70
Refining segment		(130)		(314)
Technology segment		82		47
Other, including intersegment eliminations		(2)		(3)
Total		$	1,088	$	304
Depreciation and amortization:
O&P–Americas segment		$	143	$	124
O&P–EAI segment		53		53
I&D segment		80		70
APS segment		28		44
Refining segment		19		42
Technology segment		12		9
Total		$	335	$	342
Income (loss) from equity investments:
O&P–Americas segment		$	30	$	2
O&P–EAI segment		95		(3)
I&D segment		12		2
APS segment		—		(1)
Total		$	137	$	—

3628

Table of Contents

Three Months Ended
June 30, Six Months Ended
June 30,
Millions of dollars 2020 2019 2020 2019
Income (loss) from equity investments:
O&P–Americas segment $ 7 $ 12 $ 9 $ 23
O&P–EAI segment 51 52 48 103
I&D segment 3 2 5 4
APS segment — (2) (1) (2)
Total $ 61 $ 64 $ 61 $ 128
Other income (loss), net:
O&P–Americas segment $ 1 $ 2 $ 3 $ 8
O&P–EAI segment — 1 4 7
I&D segment — — — 2
APS segment — 1 — 1
Refining segment — — — 1
Other, including intersegment eliminations 3 6 (3) 16
Total $ 4 $ 10 $ 4 $ 35
EBITDA:
O&P–Americas segment $ 248 $ 635 $ 614 $ 1,151
O&P–EAI segment 185 331 374 627
I&D segment 101 448 304 838
APS segment (44) 120 69 268
Refining segment 165 (66) (107) (81)
Technology segment 112 107 168 190
Other, including intersegment eliminations (7) 4 (16) 14
Total $ 760 $ 1,579 $ 1,406 $ 3,007


	Three Months Ended March 31,
Millions of dollars		2021		2020
Other income (loss), net:
O&P–Americas segment		$	7	$	2
O&P–EAI segment		5		4
I&D segment		2		—
APS segment		3		—
Refining segment		1		—

Other, including intersegment eliminations		7		(6)
Total		$	25	$	—
EBITDA:
O&P–Americas segment		$	867	$	366
O&P–EAI segment		412		189
I&D segment		182		203
APS segment		135		113
Refining segment		(110)		(272)
Technology segment		94		56
Other, including intersegment eliminations		5		(9)
Total		$	1,585	$	646

~~Table of~~ ~~Contents~~

Olefins and Polyolefins–Americas Segment

Overview—EBITDA ~~declined~~improved in the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 relative to the ~~second~~first quarter ~~and first six months~~ of ~~2019~~2020 primarily due to ~~lower~~higher olefin ~~and polyolefin results in challenging market conditions arising from a low oil price environment and the impact of COVID-19.~~margins.

Ethylene Raw Materials—We have flexibility to vary the raw material mix and process conditions in our U.S. olefins plants in order to maximize profitability as market prices fluctuate for both feedstocks and ~~products change.~~products. 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. ~~Strong supplies from U.S. shale oil 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 the ~~second~~first quarter of 2021 and ~~first six months of~~ 2020 ~~and 2019~~ approximately 60% of the raw materials used in our North American crackers was ethane.

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 June 30,						Six Months Ended June 30,					Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		2020		2019		Millions of dollars	2021		2020
Sales and other operating revenues	Sales and other operating revenues	$	1,433	$	2,114	$	3,225	$	4,225	Sales and other operating revenues	$	2,859	$	1,792
Income from equity investments	Income from equity investments	7		12		9		23		Income from equity investments	30		2
EBITDA	EBITDA	248		635		614		1,151		EBITDA	867		366

Revenues—Revenues for our O&P–Americas segment ~~decreased~~increased by ~~$681~~$1,067 million, or ~~32%, in the second quarter of 2020 compared to the second quarter of 2019 and by $1,000 million, or 24%~~60%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~2020.

Table of Contents

Average ~~olefins and polyethylene~~ sales prices were ~~lower~~higher in the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 compared to the ~~second~~first quarter and first six months of 2019 due to the lower oil price environment and the impact of COVID-19. These lower sales prices were responsible for a revenue decrease of 40% and 30% in the second quarter and first six months of 2020 ~~respectively. Volume increases~~which resulted in a revenue increase of ~~8% and 6%~~50% in the ~~second~~first quarter of 2021. Volume improvements resulted in a revenue increase of 10% in the first quarter of 2021 primarily due to a full quarter of results associated with our Louisiana Joint Venture partially offset by the effects of unusually cold temperatures and ~~first six months~~associated electrical power outages that led to shutdowns of ~~2020, respectively.~~our manufacturing facilities in Texas.

EBITDA—EBITDA ~~decreased~~increased by ~~$387~~$501 million, or ~~61%, in the second quarter of 2020 compared to the second quarter of 2019 and by $537 million, or 47%~~137%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~

~~Lower olefin results led to a 37% decline in EBITDA in the second~~2020. First 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~~included 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 22% and 20% decrease in EBITDA in the second quarter and first six months of 2020, respectively. This decrease was driven by a $277 and $231 per ton reduction in price spreads over ethylene in the second quarter and first six months of 2020, respectively. Decreased polypropylene results led to a 7% decrease in EBITDA in both the second quarter and first six months of 2020, respectively, largely due to a decline in margins attributed to lower price spreads over propylene 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 ~~declines~~a decline in the ~~prices~~price of heavy liquids and ~~ethylene. Second~~ethylene during the quarter. The absence of a similar charge in the first quarter 2021 resulted in a 30% change in EBITDA. The first full quarter of ~~2020~~ results ~~include~~for our newly formed Louisiana Joint Venture improved EBITDA by 36% during the quarter.

Including the results of the Louisiana Joint Venture, higher olefin results led to a ~~LCM inventory valuation benefit of $38 million, or 6%, related to the reversal of LCM inventory valuation charges recognized~~89% improvement in EBITDA in the first quarter of ~~2020, largely driven by recovery of market prices of heavy liquids and~~2021, primarily due to ethylene ~~which were partially offset by declines~~variable margin improvements associated with higher sales prices. Polypropylene results led to a 12% increase in EBITDA in the first quarter of 2021, largely due to improved margins attributed to higher price spreads over propylene in the first quarter of ~~polymers.~~2021. Higher income from our equity investments led to increases in EBITDA of 7% in the first quarter of 2021 mainly attributable to improved results at our polypropylene joint venture in Mexico.

~~Table of~~ ~~Contents~~

Olefins and Polyolefins–Europe, Asia, International Segment

Overview—EBITDA for the ~~second~~first quarter ~~and first six months~~ of ~~2020 decreased~~2021 increased compared to the ~~second~~first quarter ~~and first six months~~ of ~~2019~~2020 mainly as a result of higher polymer margins and equity income, partly offset by lower olefin and polyolefin results. Results were also decreased due to a LCM inventory charges recognized in the second quarter and first six months of 2020. To improve liquidity during the pandemic we have deferred certain planned maintenance which was scheduled for 2020.

margins.

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 June 30,						Six Months Ended June 30,					Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		2020		2019		Millions of dollars	2021		2020
Sales and other operating revenues	Sales and other operating revenues	$	1,702	$	2,505	$	3,926	$	5,040	Sales and other operating revenues	$	3,047	$	2,224
Income from equity investments		51		52		48		103
Income (loss) from equity investments										Income (loss) from equity investments	95		(3)
EBITDA	EBITDA	185		331		374		627		EBITDA	412		189

Revenues—Revenues ~~decreased~~increased by ~~$803~~$823 million, or ~~32%, in the second quarter of 2020 compared to the second quarter of 2019 and by $1,114 million, or 22%~~37%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~2020.

Average sales prices in the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 were ~~lower~~higher across most products as sales prices generally correlate with crude oil prices, which on average, ~~decreased~~increased compared to the ~~comparative periods~~same period in ~~2019.~~2020. These ~~lower~~higher average sales prices were responsible for a revenue ~~decreases~~increase of ~~32% and 21%~~18% in the ~~second~~first quarter ~~and first six months~~ of ~~2020, respectively.~~2021. Volume improvements resulted in a revenue increase of ~~2% and 1%~~12% in the ~~second~~first quarter ~~and first six months~~ of ~~2020, respectively. Foreign~~2021 from strong polymer demand. Favorable foreign exchange impacts ~~which on average, were unfavorable~~ resulted in a revenue ~~decrease~~increase of 2%7% in ~~each~~the first quarter of ~~the second quarter and first six months of 2020.~~2021.

EBITDA—EBITDA ~~decreased in the second quarter of 2020~~increased by ~~$146~~$223 million, or ~~44%, compared to the second quarter of 2019 and by $253 million, or 40%~~118%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019~~2020.First quarter of 2020 results included a $36 million LCM inventory valuation charge primarily driven by a decline in the price of naphtha during the quarter. The absence of a similar charge in the first quarter 2021 resulted in a 19% change in EBITDA.

Improved polyethylene and polypropylene results increased EBITDA by 54% and 35%, respectively, in the first quarter of 2021. These improvements were largely attributed to higher margins due to strong demand. Lower olefins results led to a ~~29% and 6%~~51% decrease in EBITDA in the ~~second~~first quarter ~~and first six months~~ of ~~2020, respectively. These decreases were~~2021, primarily ~~due~~driven by lower margins attributable 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 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 a reduction in price spreads over propylene by $9 and $38 per ton, in the second quarter and first six months of 2020, respectively.

~~Lower~~increased feedstock costs. Higher income from our equity investments led to ~~decreases~~increases in EBITDA of 9% in the first six months of 2020 mainly attributable to lower margins for our joint ventures in Saudi Arabia and Asia. Results were further reduced by $34 million, or 10%, in the second quarter of 2020 and $70 million, or 11%, in the first six months of 2020 due to LCM inventory valuation charges resulting from a decline in the price of naphtha52% in the first quarter of ~~2020 and a decline in the price of polymers in the second quarter of 2020. Unfavorable~~2021 mainly attributable to higher polyolefin margins due to increased demand. Favorable foreign exchange impacts resulted in a ~~2% declined~~11% increase in EBITDA in ~~both~~ the ~~second~~first quarter ~~and first six months~~ of ~~2020.~~2021.

3930

Table of Contents

Intermediates and Derivatives Segment

Overview—EBITDA ~~for our I&D segment was lower~~declined in the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 compared to the ~~second~~first quarter ~~and first six months~~ of ~~2019, largely~~2020, primarily driven by ~~decreased demand~~lower volumes across most businesses, in particular propylene oxide and ~~margin erosion due to the impacts of COVID-19, particularly within our intermediate chemicals and oxyfuels related products.~~derivatives.

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 June 30,						Six Months Ended June 30,					Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		2020		2019		Millions of dollars	2021		2020
Sales and other operating revenues	Sales and other operating revenues	$	1,157	$	2,062	$	2,927	$	3,956	Sales and other operating revenues	$	1,767	$	1,770
Income from equity investments	Income from equity investments	3		2		5		4		Income from equity investments	12		2
EBITDA	EBITDA	101		448		304		838		EBITDA	182		203

Revenues—Revenues decreased by ~~$905~~$3 million, ~~or 44%, in the second quarter of 2020 compared to the second quarter of 2019 and by $1,029 million, or 26%,~~remaining relatively flat, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~

Lower average sales prices in the second quarter and first 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 29% and 20%, respectively.2020. Lower sales volumes resulted in a ~~14%~~17% decline in sales, primarily driven by a decline in production due to the impact of unusually cold temperatures and 5%associated electrical power outages that led to shutdowns of our manufacturing facilities in Texas. This decrease ~~in revenues~~was largely offset by higher average sales prices in the ~~second~~first quarter ~~and first six months~~ of ~~2020, respectively. Foreign exchange impacts,~~2021 for most products as sales prices generally correlate with crude oil prices, which on average, ~~were unfavorable~~increased compared to the same period in 2020. This increase in average sales prices resulted in a 14% increase in revenue. Favorable foreign exchange impacts also increased revenue ~~decrease~~by 3% in the first quarter of ~~1% in each of the second quarter and first six months of 2020.~~2021.

EBITDA—EBITDA decreased ~~$347~~by $21 million, or ~~77%, in the second quarter of 2020 compared to the second quarter of 2019 and by $534 million, or 64%~~10%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019~~2020. In the first quarter of 2020 EBITDA for our I&D segment included a $78 million LCM inventory valuation charge primarily driven by ~~lower margins across most businesses.~~a decline in the price of various gasoline blending components and butane during the quarter. The absence of a similar charge in the first quarter 2021 resulted in a 38% change in EBITDA.

Oxyfuels and related products results declined, resulting in a ~~33% and 15%~~35% decrease in EBITDA in the ~~second~~first quarter ~~and first six months~~ of ~~2020, respectively. The~~2021. Approximately 60% of this decline was driven by a ~~result of~~decrease in margins due to lower ~~margins as fuel demand significantly declined~~blending premium over gasoline prices, higher feedstock costs and higher utility costs related to Texas weather events. The remaining decrease was due to lower volumes driven by Texas weather events and lower gasoline demand. Declines in ~~response to the pandemic, including lockdowns~~propylene oxide and ~~the resulting economic slowdown, as well as a decline in crude oil prices. Decreased intermediate chemicals~~derivatives results led to an EBITDA decrease of ~~29% and 27%~~12% in the ~~second~~first quarter ~~and first six months~~ of ~~2020, respectively.~~2021. 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 9% in the second quarter of 2020,volumes driven by ~~lower volumes~~Texas weather events as discussed above and planned maintenance. Approximately half of this volume decrease was offset by margin improvements due to ~~lower demand on construction, automotive and furniture industries which were impacted by COVID-19. Propylene oxide and derivatives~~tight market supply. Intermediate chemicals results declined, 7%contributing to a 10% decrease in ~~the first six months of 2020, driven by lower~~EBITDA primarily due to a decrease in margins due to ~~increased market competition.~~

~~Results~~higher feedstock costs. Higher income from our equity investments led to increases in EBITDA of ~~our I&D segment were further reduced by $98 million, or 12%,~~5% in the first six months of 2020 due to LCM inventory 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 the first quarter of ~~2020.~~2021 mainly attributable to improved results at our joint venture in China. Favorable foreign exchange impacts increased EBITDA by 4% in the first quarter of 2021.

Planned maintenance in 2021 is expected to reduce EBITDA by approximately $115 million, which is $30 million lower than previously estimated, due to reduced scope of work and associated downtime for the maintenance.

~~Table of~~ ~~Contents~~

Advanced Polymer Solutions Segment

Overview—EBITDA for our APS segment ~~decreased~~increased in the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 relative to the ~~second~~first quarter ~~and first six months~~ of ~~2019,~~2020, primarily due to ~~lower~~improved compounding and ~~solutions volumes.~~solution results and the absence of integration costs related to the acquisition of A. Schulman recognized in the first quarter of 2020.

Table of Contents

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


		Three Months Ended June 30,						Six Months Ended June 30,					Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		2020		2019		Millions of dollars	2021		2020
Sales and other operating revenues	Sales and other operating revenues	$	705	$	1,258	$	1,801	$	2,597	Sales and other operating revenues	$	1,270	$	1,096
Loss from equity investments		—		(2)		(1)		(2)
Income (loss) from equity investments										Income (loss) from equity investments	—		(1)
EBITDA	EBITDA	(44)		120		69		268		EBITDA	135		113

Revenues—Revenues ~~decreased~~increased by ~~$553~~$174 million, or ~~44%, in the second quarter of 2020 compared to the second quarter of 2019 and by $796 million, or 31%~~16%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~

2020. Foreign exchange impacts resulted in a revenue increase of 8% in the first quarter of 2021. Sales volumes ~~declined~~increased in the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 stemming from ~~lower~~higher market demand for compounding and solutions, including ~~lower~~higher automotive and construction demand, which led to a ~~39% and 26% decrease~~4% increase in revenue. Average sales price increased resulting in a 4% increase in revenue in the ~~second~~first 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 revenue decrease of 2% in each of the second quarter and first six months of 2020.2021.

EBITDA—EBITDA ~~decreased $164~~increased by $22 million, or ~~137%, in the second quarter of 2020 compared to the second quarter of 2019 and by $199 million, or 74%~~19%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~

~~This decrease was driven by decreased~~2020. Increased compounding and solutions results ~~which resulted in a 72% and 42% decrease in~~led to an EBITDA increase of 8% in the ~~second~~first quarter ~~and first six months~~ of ~~2020, respectively. The decrease~~2021. This increase was ~~largely due~~mainly attributable to ~~lower~~higher volumes driven by ~~reduced automotive~~increased demand ~~as a result of economic conditions caused by COVID-19.~~

~~EBITDA decreased $67 million, or 56%,~~for our products utilized in the ~~second quarter of 2020 compared to the second quarter of 2019~~automotive and ~~by $69 million, or 26%,~~construction end markets 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 reduced EBITDA by 2%Asia and ~~1% in the second quarter and first six months of 2020, respectively.~~Europe. Integration ~~costs~~activities related to ~~the~~our 2018 acquisition of A. Schulman Inc. were ~~relatively unchanged~~substantially completed during the third quarter of 2020. In the absence of these integration costs in the ~~second~~first quarter ~~and~~of 2021, EBITDA changed 12% during the quarter. Favorable foreign exchange impacts increased EBITDA by 6% in the first ~~six months of 2020 relative to the comparative periods in 2019.~~quarter 2021.

Refining Segment

Overview—EBITDA ~~for our Refining segment~~ increased in the ~~second quarter relative to the second~~first 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~~2021 relative to the first ~~six months~~quarter of ~~2019~~2020 primarily due to ~~lower volumes and a lower~~the absence of ~~cost or market~~an LCM inventory ~~charge.~~

valuation charge which was recognized in the first quarter of 2020.

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. “Brent” is a light sweet crude oil and is one of the main benchmark prices for purchases of oil worldwide. “Maya” is a heavy sour crude 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		2021		2020
Sales and other operating revenues		$	1,126	$	1,448
EBITDA		(110)		(272)

Thousands of barrels per day
Heavy crude oil processing rates		152		226

Market margins, dollars per barrel
Brent - 2-1-1		$	10.57	$	7.43
Brent - Maya differential		4.75		9.79
Total Maya 2-1-1		$	15.32	$	17.22

4132

Table of Contents

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 ~~$1,261~~$322 million, or ~~58%, in the second quarter of 2020 compared to the second quarter of 2019 and by $1,695 million, or 42%~~22%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months of 2019.~~

Lower product prices led to a revenue decrease of 53% and 38% relative to the second quarter and first six months of 2019, respectively, due to an average crude oil price decrease of approximately $37 per barrel in the second quarter of ~~2020 and $26 per barrel in the first six months of~~ 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~~first quarter of 2021 due to planned and ~~first six months~~unplanned outages, including the effects of ~~2020, leading~~unusually cold temperatures and associated electrical power outages that led to shutdowns of our manufacturing facilities in Texas. This decline in sales volumes resulted in a 32% reduction in revenue. This decrease was partially offset by higher product prices, which led to a ~~decrease~~revenue increase of 10% due to an average Brent crude oil price increase of approximately $10 per barrel in ~~overall sales volumes~~the first quarter of ~~5% and 4%, respectively.~~2021.

EBITDA—EBITDA increased by ~~$231~~$162 million, or ~~350%, in the second quarter of 2020 compared to the second quarter of 2019 and decreased by $26 million, or 32%~~60%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~

~~Results of our Refining segment were reduced by $13~~2020. First quarter 2020 results included a $192 million ~~or 16%, in the first six months of 2020, due to an~~ LCM inventory valuation charge ~~resulting from~~primarily driven by a decline in the ~~prices~~price of crude oil and refined products, ~~since December 31, 2019. Results~~the absence of a similar charge in the ~~second~~first quarter 2021 resulted in a 71% change in EBITDA. This increase in the first 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 increased by 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 increase2021 was partially offset by ~~unplanned~~a 7% decrease in EBITDA due to lower heavy crude oil processing rates driven by the impact of facility outages ~~at our fluid catalytic cracking unit, which restricted the yield of higher-margin refined products,~~as discussed above and lower demand for transportation fuels. Margin declines resulted in a ~~30% and 7%~~4% decrease in EBITDA driven by a decrease in the Maya 2-1-1 market margin ~~in the second quarter~~due to tighter heavy oil supply and ~~first six months of 2020, relative to the comparable periods~~a decrease in ~~2019, driven primarily by lower~~ refined product ~~cracks. Lower heavy crude oil processing rates resulted in a 11% and 27% decrease in EBITDA relative to the second quarter and first six months~~demand as well as higher costs of ~~2019, respectively.~~

Renewable Identification Numbers (“RINs”).

~~Table of~~ ~~Contents~~

Technology Segment

Overview—EBITDA ~~for our Technology segment~~ increased in the ~~second~~first quarter of ~~2020 compared to the second quarter of 2019 due to higher catalyst results, but decreased in the first six months of 2020~~2021 compared to the first ~~six months~~quarter of ~~2019,~~2020, primarily due to ~~lower~~higher licensing revenues.

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

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


	Three Months Ended March 31,
Millions of dollars		2021		2020
Sales and other operating revenues		$	165	$	122
EBITDA		94		56

Revenues—Revenues increased by $4$43 million, or ~~2%, in the second quarter of 2020 compared to the second quarter of 2019 and decreased by $15 million, or 5%~~35%, in the first ~~six months~~quarter of ~~2020~~2021 compared to the first ~~six months~~quarter of ~~2019.~~

~~Lower~~2020. Higher licensing revenues ~~were responsible for revenue decreases of 9% and 11%~~resulted in a 20% increase in the ~~second~~first quarter ~~and first six months~~ of ~~2020~~2021 compared to the ~~corresponding periods in 2019.~~first quarter of 2020. Higher catalyst ~~sales~~ volumes ~~driven by orders from customers to secure inventory early during the pandemic,~~ resulted in a ~~10% and 5%~~8% increase in revenue in the ~~second~~first quarter ~~and~~of 2021 primarily driven by a strong demand. Favorable foreign exchange impact led to a revenue increase of 7% in the first ~~six months~~quarter of 2021.

EBITDA—EBITDA increased by $38 million, or 68%, in the first quarter of 2021 compared to the first quarter of 2020. Higher licensing revenues from more contracts reaching significant milestones in the first quarter of 2021 compared to the first quarter of 2020 ~~respectively. Increases in average catalyst sales prices~~ resulted in ~~revenue increases of 2% and 3%~~a 41% increase in ~~the second quarter and first six months of 2020, respectively.~~EBITDA. Higher catalyst volumes resulted in a 14% increase in EBITDA. Foreign exchange impacts, which on average, were ~~unfavorable~~favorable led to a ~~revenue decrease of 1% and 2%~~9% increase in ~~the second quarter and first six months of 2020, respectively.~~

~~EBITDA—~~EBITDA ~~increased by $5 million, or 5%, in the second quarter of 2020 compared to the second quarter of 2019 and decreased by $22 million, or 12%,~~ in the first ~~six months~~quarter of ~~2020 compared to the first six months of 2019.~~2021.

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.

4333

Table of Contents

FINANCIAL CONDITION

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


		Six Months Ended June 30,							Three Months Ended March 31,
Millions of dollars	Millions of dollars	2020		2019		Millions of dollars	2021		2020
Source (use) of cash:
Cash provided by (used in) :						Cash provided by (used in) :
Operating activities	Operating activities	$	1,834	$	1,843	Operating activities	$	571	$	542
Investing activities	Investing activities	(1,727)		(456)		Investing activities	(59)		(663)
Financing activities	Financing activities	1,568		(482)		Financing activities	(782)		884

Operating Activities—Cash of ~~$1,834 million~~provided ~~generated~~ by operating activities of $571 million in the first ~~six months~~quarter of ~~2020~~2021 reflected earnings adjusted for non-cash items, payments for employee bonuses, income taxes, income from equity investments, and cash ~~provided~~used by the main components of working capital—Accounts receivable, Inventories and Accounts payable.

In the first ~~six months~~quarter of ~~2020,~~2021, the main components of working capital ~~provided $465~~used $626 million of cash driven primarily by ~~decreases~~an increase in Accounts receivable and ~~Inventory,~~Inventories partially offset by ~~a decrease~~an increase in Accounts payable. The ~~decrease~~increase in Accounts receivable was ~~primarily~~ driven by ~~lower sales in~~higher revenues for our ~~Refining,~~O&P—Americas, O&P—EAI, and APS ~~and I&D segments due to unfavorable market conditions.~~segments. The ~~decrease~~increase in Inventory was primarily driven by ~~company-wide~~higher inventory ~~reduction initiatives as well as lower prices. The decrease in Accounts payable was primarily~~volumes, due to lower ~~cost~~crude oil consumption as a result of ~~sales resulting from lower production across multiple segments~~Texas weather events, and prices within our Refining segment. The increase in Accounts payables was primarily driven by ~~unfavorable market conditions.~~increased raw material costs.

Cash ~~of $1,843 million generated~~ provided by operating activities of $542 million in the first ~~six months~~quarter of ~~2019~~2020 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.~~capital.

In the first ~~six months~~quarter of ~~2019,~~2020, the main components of working capital ~~consumed $538~~used $110 million of ~~cash. The increase~~cash driven primarily by a decrease in Accounts ~~receivable~~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—&P–EAI segment ~~during~~compared to the ~~period. Inventories increased due to inventory build~~fourth quarter 2019 and turnaround activities in our ~~Refining and O&P~~—EAI segments as inventories returned to more balanced levels and operations improved. Lower feedstock and energy costs relative to fourth quarter of 2018, partially offset by higher volumes drove a decrease in Accounts payable.I&D segment.

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~~quarters of 2021 and 2020 we received proceeds of $226 million and $1 million, respectively, from our investments in equity securities. Additionally, we received proceeds of $74 million in the first quarter of 2021 upon the maturity of certain available-for-sale debt securities.

Capital expenditures for the first three months of 2021 totaled $340 million compared to $660 million for the first three months of 2020, ~~we invested $270~~resulting in a decrease of $320 million or 48% in ~~debt securities that are deemed available-for-sale. We also invested $184 million~~2021 compared to 2020. Reduced spending within our I&D segment accounted for 32% of the decline which was driven by decreased spending at our PO/TBA plant. Additionally, spending in ~~equity securities~~our O&P—Americas segment decreased by 21% due to the completion of our Hyperzone polyethylene plant in 2020 and a decline in other plant improvement projects in 2021. See Note 12 to the ~~first six months of 2020. Our investments in available-for-sale debt securities and equity securities are classified as Short-term investments.~~Consolidated Financial Statements for additional information regarding capital spending by segment.

Financing Activities—We ~~received proceeds of~~ ~~$511~~made dividend payments totaling $352 million and $351 million in the first ~~six months~~quarters of ~~2019 upon the sale~~2021 and ~~maturity of certain of~~2020, respectively.

In January 2021, we repaid $500 million outstanding under our ~~available-for-sale debt securities. Additionally, in~~Term Loan due 2022.

In the first ~~six months~~quarters of ~~2020~~2021 and ~~2019~~2020 we received ~~proceeds~~a return of $1collateral of $66 million and ~~$332~~posted collateral of $238 million, respectively, onrelated to the ~~sale of~~positions held with our ~~investments in equity securities.~~counterparties for certain forward-starting interest rate swaps.

4434

Table of Contents

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

Six Months Ended
June 30,
Millions of dollars 2020 2019
Capital expenditures by segment:
O&P–Americas $ 394 $ 533
O&P–EAI 76 103
I&D 658 417
APS 23 27
Refining 37 96
Technology 56 34
Other 4 11
Consolidated capital expenditures $ 1,248 $ 1,221

In the first 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 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 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. 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 investments in our U.S. and European PO joint ventures.

~~Financing Activities~~—In the first 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 $701 million and $760 million in the first 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 ~~April~~the first quarter 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~~we received 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~~$516 million, ~~outstanding under our Senior Revolving Credit Facility and $500 million outstanding under our U.S. Receivables Facility.~~

~~Table of~~ ~~Contents~~

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~~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.~~ program.

Additional information related to the issuance of debt and 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~~We plan to ~~manage~~fund our ~~financial risk. In April 2020, we announced that we reduced our budgeted 2020~~ongoing working capital, capital expenditures, debt service and other funding requirements with our current available liquidity and cash from operations, which could be affected by ~~$500 million, bringing~~general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our ~~total budget to $1.9 billion. We increased liquidity by $2 billion through~~control. Cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of ~~guaranteed senior notes in April 2020. Additionally, we continue~~debt, or a combination thereof, may be used to ~~focus on cost savings while minimizing working capital.~~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. 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~~ In the ~~issuance of~~near term, we are prioritizing 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 effectreduction on our ~~ability to be in compliance with our debt covenants.~~balance sheet.

Cash and Liquid Investments

As of ~~June 30, 2020,~~March 31, 2021, 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~~$1,835 million, ~~of cash~~which includes $1,197 million 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.

~~Table of~~ ~~Contents~~

Credit Arrangements

At ~~June 30, 2020,~~March 31, 2021, we had total debt, including current maturities, of ~~$14,336~~$15,425 million, and ~~$196~~$197 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~~$2,905 million at ~~June 30, 2020,~~March 31, 2021, which included the following:

•$~~2,017~~2,005 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,~~March 31, 2021, we had ~~$473~~$500 million of outstanding commercial paper, net of discount, no borrowings or letters of credit outstanding under this facility; and

•$~~524~~900 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,~~March 31, 2021, we had no borrowings or letters of credit outstanding under this facility.

~~Our $2,500~~

Table of Contents

We believe that our recent value-driven growth investments should benefit us over the coming years. With an improving outlook for cash generation, we remain committed to further strengthening our investment grade balance sheet through deleveraging. In January 2021, we repaid $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 obligationsoutstanding under ~~the facility are guaranteed by LyondellBasell Industries N.V.~~

~~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,~~2022. An additional $500 million was repaid in April 2021. We expect that our robust cash generation from operations should continue throughout the year 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~~our top priority for capital deployment in 2021 is debt reduction, which will enable meaningful progress toward improving our credit metrics to ~~1.0~~two times total debt to ~~permit netting of unrestricted cash~~EBITDA.

At any time 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,~~from time to time, 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.

We may repay or redeem our outstanding debt, including purchases of our outstanding bonds in the open market, through privately negotiated transactions or a combination thereof, in each case using cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt or proceeds from asset ~~divestitures, or a combination thereof. In connection with any~~divestitures. Any repayment or redemption of our debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In connection with such repurchases or redemptions, 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.~~

~~Table of~~ ~~Contents~~

~~Share Repurchases~~

In May 2020, our shareholders approved a proposal to authorize us to repurchase up to 34.0 million of our ordinary shares through 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 six months of 2020, we purchased approximately 0.1 million shares under our share repurchase authorization for approximately $4 million.

As of July 29, 2020, we had approximately 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 has postponed selected growth projects and planned maintenance, including slowing construction activities on our PO/TBA 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 $460 million) in the joint venture and expect commissioning to begin in the third quarter of 2020.

CURRENT BUSINESS OUTLOOK

~~Demand~~With no significant planned maintenance 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 third quarter of 2020, we anticipate operating our North American ethylene plants at approximately 95% of nameplate capacity, and our European crackers are expected to operate at approximately 90% of nameplate capacity. With increased mobility and reductions in fuel inventories, we expect improving demand for our refining and oxyfuels and related products businesses. Accordingly, we anticipate our operating rates at our refinery to be approximately 85% to 90% of nameplate capacityassets during the ~~third~~second quarter, of 2020. In response to lower demand for certain products, we had previously idled production at several 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 at nearly full capacity worldwide to meet improved demand that is expected to persist due to low inventories and maintenance downtime across our ~~compounding capacity at rates that match automotive~~industry. Strong North American integrated polyethylene margins should continue as U.S. producers seek to fulfill domestic order backlogs, rebuild inventories and serve export demand.

~~We expect the recent startup of our~~ ~~Hyperzone~~ polyethylene capacity, the establishment of new Asian joint ventures and the integration of our A. Schulman acquisition will benefit us. We accelerated our plans to reduce capital expenditures and are aggressively managing our inventories to prioritize liquidity and maximize cash flow. Our focus on funding the dividend while remaining committed to a strong investment grade balance sheet continues to be the foundation of our capital deployment strategy.

Despite the volatile macro-economic environment, we believe our leading portfolio, advantaged positions and disciplined approach will enable us to continue capturing opportunities and delivering resilient results through business cycles.

~~Table of~~ ~~Contents~~

~~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 six months of 2020, we recognized LCM inventory valuation charges of~~ ~~$323 million~~ ~~related to the decline in pricing for many of our raw material and finished goods inventories.~~ During the second ~~quarter~~half of ~~2020, we recognized a LCM inventory valuation benefit of $96 million, largely driven by the recovery of market prices of crude oil~~2021, increased mobility should drive higher demand for gasoline and ~~refined products during the quarter. In the first quarter of 2020, market price declines in crude oil, heavy liquids~~jet fuel, improving margins for our Refining and ethylene were the primary contributors to the LCM inventory valuation charges, and representative prices used in the calculation of this LCM inventory valuation charge were $12.14/barrel for crude, $13.50/barrel for heavy liquids and $205/ton for ethylene. In theI&D segments. We also expect that moderating feedstock costs will increase 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/barrelmargins 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 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~~

$2.6 billion of our total inventory carrying value as of 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. However, if pricing trends reverse, some, or all of these charges could be reversed in future quarterly interim periods during 2020.Advanced Polymer Solutions segment.

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.

4936

Table of Contents

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~~remain low 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;

5037

Table of Contents

•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;

•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.~~2020. Our exposure to such risks has not changed materially in the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021.

Item 4. CONTROLS AND PROCEDURES

As of ~~June 30, 2020,~~March 31, 2021, with the participation of our management, our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial and accounting 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 effective as of ~~June 30, 2020.~~March 31, 2021.

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.

5138

Table of Contents

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 September and October 2018 to the Illinois Attorney General's Office (IAG) for enforcement. In June 2020, the parties entered into a Stipulation and Proposal for Settlement with a penalty of $120,000.

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 meet with the 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~~2020 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, and Form 10-Q for the quarter ended March 31,~~ 2020.

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

None.

In May 2020, we announced a share repurchase authorization of up to 34.0 million of our ordinary shares through 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.

5239

Table of Contents

Item 6. EXHIBITS


Exhibit Number						Description

10.1+10.1+						2021 Form of ~~Director~~ Restricted Stock Unit Award Agreement

10.2*+						2021 Form of Performance Share Unit Award Agreement

10.3*+						2021 Form of Non-Qualified Stock Option Award Agreement

22*						Subsidiary Issuers of Guaranteed Securities

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.

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

5340

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:	~~July 31, 2020~~April 30, 2021	/s/ ~~Jacinth C. Smiley~~Michael C McMurray
		~~Jacinth~~Michael C. ~~Smiley~~McMurray
		Executive Vice President and
		Chief ~~Accounting~~Financial Officer
		(Principal Financial and Accounting Officer)

5441


			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			87

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3225

Item 3. Quantitative and Qualitative Disclosures About Market Risk			5138

Item 4. Controls and Procedures			5138

Part II – Other Information			5239

Item 1. Legal Proceedings			5239

Item 1A. Risk Factors			5239

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			5239

Item 4. Mine Safety Disclosures			5239

Item 6. Exhibits			5340

Signature			5441


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


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

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


	Three 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	$	1,325	$	2,283	$	2,020	$	1,257	$	2,011	$	152	$	—	$	9,048
Intersegment	789		222		42		1		169		21		(1,244)		—
	2,114		2,505		2,062		1,258		2,180		173		(1,244)		9,048
Income (loss) from equity investments	12		52		2		(2)		—		—		—		64
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