Form 8-K LyondellBasell Industrie For: Jul 29
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
FORM 8-K
____________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2022
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(Exact Name of Registrant as Specified in Charter)
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| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Addresses of principal executive offices)
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(Former Name or Former Address, if Changed Since Last Report)
_____________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02. Results of Operations and Financial Conditions.
On July 29, 2022, LyondellBasell Industries N.V. announced earnings results for the quarter ended June 30, 2022 and provided a supplemental discussion of segment results. Copies of our earnings release and segment results are attached as Exhibit 99.1 and 99.2 respectively, and are incorporated into this Item 2.02 by reference.
The information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| LYONDELLBASELL INDUSTRIES N.V. | |||||||||||||||||
| Date: | July 29, 2022 | By: | /s/ Jeffrey A. Kaplan | ||||||||||||||
| Jeffrey A. Kaplan | |||||||||||||||||
| Executive Vice President | |||||||||||||||||
| and Chief Legal Officer | |||||||||||||||||
NEWS RELEASE
FOR IMMEDIATE RELEASE
HOUSTON and LONDON, July 29, 2022
LyondellBasell Reports Second Quarter 2022 Earnings
Second Quarter 2022 Highlights
•Net Income: $1.6 billion, $1.7 billion excluding LCM and impairment(a)
•Diluted earnings per share: $4.98 per share, $5.19 per share excluding LCM and impairment
•EBITDA: $2.4 billion, $2.5 billion excluding LCM and impairment
•Record Intermediates & Derivatives segment quarterly EBITDA
•Cash from operating activities: $1.6 billion
•24 percent return on invested capital over the trailing twelve months
•Returned $2.1 billion to shareholders in the form of dividends and share repurchases during the quarter
•Peter Vanacker started as LyondellBasell's new CEO on May 23rd
Comparisons with the prior quarter and second quarter 2021 are available in the following table:
Table 1 - Earnings Summary
| Millions of U.S. dollars (except share data) | Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Sales and other operating revenues | $14,838 | $13,157 | $11,561 | $27,995 | $20,643 | ||||||||||||
| Net income | 1,644 | 1,320 | 2,059 | 2,964 | 3,129 | ||||||||||||
| Diluted earnings per share | 4.98 | 4.00 | 6.13 | 8.98 | 9.32 | ||||||||||||
| Weighted average diluted share count | 329 | 329 | 335 | 329 | 335 | ||||||||||||
EBITDA (a) | 2,381 | 2,020 | 3,018 | 4,401 | 4,603 | ||||||||||||
Excluding LCM and Impairment (a)
| Net income | $1,713 | $1,320 | $2,059 | $3,033 | $3,129 | ||||||||||||
| Diluted earnings per share | 5.19 | 4.00 | 6.13 | 9.19 | 9.32 | ||||||||||||
| Impairments, pre-tax | 69 | — | — | 69 | — | ||||||||||||
| EBITDA | 2,450 | 2,020 | 3,018 | 4,470 | 4,603 | ||||||||||||
(a) See “Information Related to Financial Measures” for a discussion of the Company’s use of non-GAAP financial measures and Table 2 and Table 3 for reconciliations of these measures to the nearest GAAP measures. LCM stands for “lower of cost or market.” Impairment is related to a charge incurred in the O&P Europe, Asia and International segment.
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LyondellBasell Industries (NYSE: LYB) today announced net income for the second quarter 2022 of $1.6 billion, or $4.98 per share. The company recognized a $69 million non-cash impairment charge during the quarter related to the exit from our Australian polypropylene business that impacted earnings by $0.21 per share. Second quarter 2022 EBITDA was $2.4 billion, or $2.5 billion excluding LCM and impairment. Second quarter 2022 EBITDA was further impacted by a $94 million non-cash pension settlement charge.
“With a diverse portfolio, strong cash generation and disciplined capital allocation, LyondellBasell is already well-regarded as one of the best operated companies in our sector. After my first two months as LyondellBasell CEO, I am convinced that our team has the passion and dedication required to grow these capabilities. Our aim is to build upon our strong position, our scale and our reach to establish LyondellBasell as a leader in serving the world's growing needs for circular and sustainable materials while reducing our carbon footprint. I look forward to sharing more of our plans about how LyondellBasell will advance our strategy and unlock additional value over the coming months,” said Peter Vanacker, LyondellBasell Chief Executive Officer.
“Looking specifically at the second quarter, LyondellBasell's global portfolio of businesses delivered strong earnings and cash generation driven by record results from our Intermediates & Derivatives segment and exceptional refining margins. In addition, LyondellBasell is making tangible progress toward our goals to help address the global challenges of climate change and plastic waste,” said Vanacker.
LyondellBasell's broad portfolio supported an 18 percent sequential growth in EBITDA during the second quarter. The Intermediates & Derivatives segment delivered record profitability. The Houston refinery ran at a rate of nearly 95 percent to support increased demand for gasoline, diesel and jet fuel. Olefins and polyolefins markets reflected distinct regional dynamics. While North American demand for products used in consumer packaging end markets remained strong, the company's volumes in Europe decreased due to downtime at the cracker in France and moderating regional demand near the end of the quarter. In China, markets remained weak due to zero-COVID measures and logistical challenges. Advanced Polymer Solutions results continued to be hindered by automotive production constraints.
LyondellBasell generated $1.6 billion in cash from operating activities during the quarter. The company remains committed to a disciplined approach to capital allocation. In the second quarter, $532 million was reinvested back into the businesses and $2.1 billion was returned to shareholders through the combination of a special dividend, an increased quarterly dividend and modest share repurchases. Strong shareholder returns continue to be a capital allocation priority at LyondellBasell.
During the quarter, LyondellBasell signed several renewable power purchase agreements that will help reduce the carbon footprint of operations. Since the launch of the Circulen portfolio in 2019, the company has sold over 140,000 tons of polymer manufactured from recycled and renewable feedstocks; an amount that represents the annual polyethylene and polypropylene demand from the population of Houston. LyondellBasell is scaling up the Circulen product lines to address the growing demand from our customers and society for renewable and circular materials.
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OUTLOOK
“The power of our business portfolio is providing resilience during the third quarter with continued strength in demand from packaging markets and favorable margins for our oxyfuels and refined products. As consumers' needs move from durables toward service industries and mobility, LyondellBasell's diverse businesses are well positioned to serve evolving trends in global demand,” said Vanacker.
Moderating demand and elevated costs for feedstocks and energy are likely to compress margins across most of the company's businesses in the third quarter. Potential benefits from China's reopening could provide tailwinds for our businesses toward the end of 2022. The company is carefully monitoring impacts from inflation, supply chain challenges and slowing economic conditions while positioning businesses appropriately.
LyondellBasell is beginning commissioning activities for its largest growth investment in the third quarter. The world-scale U.S. Gulf Coast propylene oxide and oxyfuels facility will deliver needed capacity to meet the rising demand for polyurethanes and high-octane, clean-burning oxyfuels. Polyurethanes are key materials used for insulation, windmill blades and light-weight vehicles.
“We expect our new propylene oxide capacity will provide a meaningful addition to our earnings starting in 2023 and help contribute toward a more sustainable world,” said Vanacker.
CONFERENCE CALL
LyondellBasell will host a conference call July 29 at 11 a.m. EDT. Participants on the call will include Chief Executive Officer Peter Vanacker, Executive Vice President and Chief Financial Officer Michael McMurray, Executive Vice President Ken Lane, Executive Vice President Torkel Rhenman, Executive Vice President Jim Guilfoyle and Head of Investor Relations David Kinney. For event access, the toll-free dial-in number is 1-877-407-8029, international dial-in number is 201-689-8029 or click the CallMe link. The slides and webcast that accompany the call will be available at www.LyondellBasell.com/earnings. A replay of the call will be available from 1:00 p.m. EDT July 29 until August 29. The replay toll-free dial-in numbers are 1-877-660-6853 and 201-612-7415. The access ID for each is 13729909.
ABOUT LYONDELLBASELL
As a leader in the global chemical industry, LyondellBasell (NYSE: LYB) strives every day to be the safest, best operated and most valued company in our industry. The company's products, materials and technologies are advancing sustainable solutions for food safety, access to clean water, healthcare and fuel efficiency in more than 100 international markets. LyondellBasell places high priority on diversity, equity and inclusion and is Advancing Good with an emphasis on our planet, the communities where we operate and our future workforce. The company takes great pride in its world-class technology and customer focus. LyondellBasell has stepped up its circularity and climate ambitions and actions to address the global challenges of plastic waste and decarbonization. In 2022, LyondellBasell was named as one of FORTUNE Magazine's “World's Most Admired Companies” for the fifth consecutive year. For more information, please visit www.LyondellBasell.com or follow @LyondellBasell on LinkedIn.
FORWARD-LOOKING STATEMENTS
The statements in this release relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management of LyondellBasell which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. When used in this release, the words “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking
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statements contain such identifying words. Actual results could differ materially based on factors including, but not limited to, market conditions, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; uncertainties and impacts related to the extent and duration of the pandemic; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures’ products, and the related effects of industry production capacities and operating rates; our ability to manage costs; future financial and operating results; benefits and synergies of any proposed transactions; our ability to identify, evaluate and complete any strategic alternative related to the refinery; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; our ability to meet our sustainability goals, including the ability to operate safely, increase production of recycled and renewable-based polymers to meet our targets and forecasts, and reduce our emissions and achieve net zero emissions by the time set in our respective goals; our ability to procure energy from renewable sources; the successful shut down and closure of the Houston Refinery, including within the expected timeframe; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and to repay our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2021, which can be found at www.LyondellBasell.com on the Investor Relations page and on the Securities and Exchange Commission’s website at www.sec.gov. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on our results of operations or financial condition. Forward-looking statements speak only as of the date they were made and are based on the estimates and opinions of management of LyondellBasell at the time the statements are made. LyondellBasell does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change, except as required by law.
This release contains time sensitive information that is accurate only as of the date hereof. Information contained in this release is unaudited and is subject to change. We undertake no obligation to update the information presented herein except as required by law.
INFORMATION RELATED TO FINANCIAL MEASURES
This release makes reference to certain non-GAAP financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended.
We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures, such as EBITDA, net income and diluted EPS exclusive of adjustment for “lower of cost or market" (“LCM”) and impairment provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.
We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation and amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as an alternative to operating cash flows as a
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measure of our liquidity. We also present EBITDA, net income and diluted EPS exclusive of adjustments for LCM and Impairment. Our inventories are stated at the lower of cost or market. 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. Fluctuation in the prices of crude oil, natural gas and correlated products from period to period may result in the recognition of charges to adjust the value of inventory to the lower of cost or market in periods of falling prices and the reversal of those charges in subsequent interim periods, within the same fiscal year as the charge, as market prices recover. Property, plant and equipment are recorded at historical costs. If it is determined that an asset or asset group’s undiscounted future cash flows will not be sufficient to recover the carrying amount, an impairment charge is recognized to write the asset down to its estimated fair value.
These measures as presented herein, may not be comparable to similarly titled measures reported by other companies due to differences in the way the measures are calculated. This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change.
LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.
Additional operating and financial information may be found on our website at www.LyondellBasell.com/investorrelations. These measures as presented herein, may not be comparable to similarly titled measures reported by other companies due to differences in the way the measures are calculated.
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Source: LyondellBasell Industries
Media Contact: Kimberly Windon +1 713-309-7575
Investor Contact: David Kinney +1 713-309-7141
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| Table 2 - Reconciliation of Net Income to EBITDA, including and excluding LCM and Impairment | ||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
| Millions of U.S. dollars | June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||||||||||||||
| Net income | $ | 1,644 | $ | 1,320 | $ | 2,059 | $ | 2,964 | $ | 3,129 | ||||||||||||||||||||||
| add: Impairments, after-tax | 69 | — | — | 69 | — | |||||||||||||||||||||||||||
| Net income excluding impairment | 1,713 | 1,320 | 2,059 | 3,033 | 3,129 | |||||||||||||||||||||||||||
| less: Impairments, after-tax | (69) | — | — | (69) | — | |||||||||||||||||||||||||||
| Net income | 1,644 | 1,320 | 2,059 | 2,964 | 3,129 | |||||||||||||||||||||||||||
| Loss (income) from discontinued operations, net of tax | 1 | 1 | (2) | 2 | — | |||||||||||||||||||||||||||
| Income from continuing operations | 1,645 | 1,321 | 2,057 | 2,966 | 3,129 | |||||||||||||||||||||||||||
| Provision for income taxes | 378 | 316 | 506 | 694 | 576 | |||||||||||||||||||||||||||
| Depreciation and amortization | 304 | 311 | 330 | 615 | 665 | |||||||||||||||||||||||||||
| Interest expense, net | 54 | 72 | 125 | 126 | 233 | |||||||||||||||||||||||||||
| add: Impairments, pre-tax | 69 | — | — | 69 | — | |||||||||||||||||||||||||||
| EBITDA excluding impairment | 2,450 | 2,020 | 3,018 | 4,470 | 4,603 | |||||||||||||||||||||||||||
| less: Impairments, pre-tax | (69) | — | — | (69) | — | |||||||||||||||||||||||||||
| EBITDA | $ | 2,381 | $ | 2,020 | $ | 3,018 | $ | 4,401 | $ | 4,603 | ||||||||||||||||||||||
| Table 3 - Reconciliation of Diluted EPS to Diluted EPS Excluding LCM and Impairment | |||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||||||||||||
| Diluted earnings per share | $ | 4.98 | $ | 4.00 | $ | 6.13 | $ | 8.98 | $ | 9.32 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||||||||
| Impairments | 0.21 | — | — | 0.21 | — | ||||||||||||||||||||||||
| Diluted earnings per share excluding impairment | $ | 5.19 | $ | 4.00 | $ | 6.13 | $ | 9.19 | $ | 9.32 | |||||||||||||||||||
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LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell manages operations through six operating segments: 1) Olefins and Polyolefins - Americas; 2) Olefins and Polyolefins - Europe, Asia and International; 3) Intermediates and Derivatives; 4) Advanced Polymer Solutions; 5) Refining; and 6) Technology.
This information should be read in conjunction with our Earnings Release for the period ended June 30, 2022, including the forward-looking statements and information related to financial measures.
Olefins & Polyolefins - Americas (O&P-Americas) - Our O&P-Americas segment produces and markets Olefins & Co-products, polyethylene and polypropylene.
Table 1 - O&P-Americas Financial Overview
| Millions of U.S. dollars | Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Operating income | $768 | $728 | $1,395 | $1,496 | $2,082 | ||||||||||||
| EBITDA | 905 | 911 | 1,576 | 1,816 | 2,443 | ||||||||||||
Three months ended June 30, 2022 versus three months ended March 31, 2022 - EBITDA decreased $6 million versus the first quarter 2022. Compared to the prior period, olefins results decreased approximately $85 million with lower margins due to higher ethane and energy costs. We operated our ethylene crackers at 90 percent of capacity with the raw materials being 75 percent ethane and 20 percent other natural gas liquids. Combined polyolefins results increased approximately $125 million driven by higher spreads, resulting from higher product prices and lower monomer costs.
Three months ended June 30, 2022 versus three months ended June 30, 2021 - EBITDA decreased $671 million versus the second quarter 2021. Olefins results decreased approximately $525 million driven by lower margins and volumes. Margins decreased due to higher feedstock and energy costs and lower ethylene sales price. Ethylene volumes decreased driven by lower internal demand due to maintenance downtime. Combined polyolefin results decreased approximately $105 million due to lower polyolefins spreads with lower product prices and higher monomer costs.
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Olefins & Polyolefins - Europe, Asia, International (O&P-EAI) - Our O&P-EAI segment produces and markets Olefins and Co-products, polyethylene and polypropylene.
Table 2 - O&P-EAI Financial Overview
| Millions of U.S. dollars | Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Operating income | $121 | $138 | $551 | $259 | $810 | ||||||||||||
| EBITDA | 159 | 188 | 708 | 347 | 1,120 | ||||||||||||
| Impairments, pre-tax | 69 | — | — | 69 | — | ||||||||||||
| EBITDA excluding impairment | 228 | 188 | 708 | 416 | 1,120 | ||||||||||||
Three months ended June 30, 2022 versus three months ended March 31, 2022 - EBITDA increased $40 million versus the first quarter 2022, excluding an impairment of $69 million in the second quarter 2022 related to the exit of our Australia polypropylene business. Compared to the prior period, olefins results increased approximately $95 million due to increased margins driven by higher ethylene and co-product prices. We operated the ethylene crackers at 70 percent of capacity with extended maintenance at our ethylene cracker in Berre, France reducing utilization. Approximately 30 percent of the raw materials were derived from non-naphtha feedstocks. Combined polyolefins results decreased about $45 million compared to the prior period due to lower volumes driven by the cracker downtime and softening demand during June.
Three months ended June 30, 2022 versus three months ended June 30, 2021 - EBITDA decreased $480 million versus the second quarter 2021, excluding an impairment of $69 million in the second quarter 2022. Olefins results decreased approximately $95 million driven by lower volumes and margins. Volumes decreased due to planned and unplanned maintenance. Ethylene margins decreased primarily due to higher feedstock and energy costs, partially offset by higher co-product and ethylene prices. Combined polyolefins results decreased about $210 million primarily due to decreased margins driven by lower spreads over monomer and higher energy costs. Joint venture equity income decreased approximately $105 million due to lower spreads at our Asia joint ventures.
Intermediates & Derivatives (I&D) - Our I&D segment produces and markets Propylene Oxide & Derivatives, Oxyfuels & Related Products and Intermediate Chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.
Table 3 - I&D Financial Overview
| Millions of U.S. dollars | Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Operating income | $635 | $468 | $493 | $1,103 | $581 | ||||||||||||
| EBITDA | 675 | 546 | 596 | 1,221 | 778 | ||||||||||||
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Three months ended June 30, 2022 versus three months ended March 31, 2022 - EBITDA increased $129 million compared to the first quarter 2022 resulting in a record quarter for the I&D segment. Compared to the prior period, Propylene Oxide & Derivatives results decreased approximately $90 million due to softening durable goods demand pressuring product pricing. Intermediate Chemicals results increased about $5 million due to higher styrene results that were partially offset by lower acetyls volumes driven by unplanned maintenance at our La Porte, Texas site. Oxyfuels & Related Products results increased approximately $260 million due to significant margin expansion driven by high gasoline prices and lower costs driven by a decreasing butane to crude ratio.
Three months ended June 30, 2022 versus three months ended June 30, 2021 - EBITDA increased $79 million versus the second quarter 2021. Compared to the prior period, Propylene Oxide & Derivatives results decreased $50 million due to lower demand and higher natural gas costs in Europe. Intermediate Chemicals results decreased about $30 million driven by planned and unplanned maintenance, partially offset by higher styrene results. Oxyfuels & Related Products increased approximately $270 million driven by higher demand and gasoline prices. Joint venture equity income decreased approximately $15 million due to reduced margins at our Asia joint ventures.
Advanced Polymer Solutions (APS) - Our Advanced Polymer Solutions segment produces and markets in two lines of business: Compounding & Solutions and Advanced Polymers. Compounding & Solutions includes polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders. Advanced Polymers consists of Catalloy and polybutene-1.
Table 4 - Advanced Polymer Solutions Financial Overview
| Millions of U.S. dollars | Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Operating income | $100 | $88 | $101 | $188 | $205 | ||||||||||||
| EBITDA | 118 | 125 | 129 | 243 | 264 | ||||||||||||
Three months ended June 30, 2022 versus three months ended March 31, 2022 - EBITDA decreased $7 million versus the first quarter 2022. Compared with the prior period, Compounding & Solutions results decreased approximately $15 million due to lower volumes driven by persistent constraints in automotive production during the second quarter. Advanced Polymers results increased $25 million driven by improved margins and volumes due to strong seasonal demand.
Three months ended June 30, 2022 versus three months ended June 30, 2021 - EBITDA decreased $11 million compared to the second quarter 2021. Compared with the prior period, Compounding & Solutions results decreased approximately $10 million with lower volumes driven by constrained production in automotive end markets. Advanced Polymers results increased $20 million due to margin increases primarily driven by improved spreads over propylene with higher product prices.
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Refining - Our Refining segment produces and markets gasoline and distillates, including diesel fuel, heating oil and jet fuel.
Table 5 - Refining Financial Overview
| Millions of U.S. dollars | Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Operating income (loss) | $422 | $148 | $(95) | $570 | $(225) | ||||||||||||
| EBITDA | 418 | 148 | (81) | 566 | (191) | ||||||||||||
Three months ended June 30, 2022 versus three months ended March 31, 2022 - EBITDA increased $270 million versus the first quarter 2022. Margins improved driven by an increase in the Maya 2-1-1 industry crack spread of $25 per barrel to about $56 per barrel, partially offset by lower by-product crack spreads due to rising crude cost outpacing by-product price increases. The Houston Refinery operated at 252,000 barrels per day, 3,000 barrels per day lower than the prior period due to an unplanned maintenance, partially offset by increased demand for gasoline, diesel and jet fuel.
Three months ended June 30, 2022 versus three months ended June 30, 2021 - EBITDA increased $499 million versus the second quarter 2021. Margins improved driven by an increase in the Maya 2-1-1 industry crack spread of about $34 per barrel. Crude throughput increased by 4,000 barrels per day due to strong demand for efined products, partially offset by an unplanned maintenance.
Technology - Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.
Table 6 - Technology Financial Overview
| Millions of U.S. dollars | Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Operating income | $106 | $93 | $82 | $199 | $164 | ||||||||||||
| EBITDA | 112 | 103 | 92 | 215 | 186 | ||||||||||||
Three months ended June 30, 2022 versus three months ended March 31, 2022 - EBITDA increased $9 million compared to the prior period with higher licensing revenue, partially offset by lower catalyst volume.
Three months ended June 30, 2022 versus three months ended June 30, 2021 - EBITDA increased $20 million relative to the second quarter 2021 driven by higher licensing revenue and catalyst volume with stronger demand in Asia.
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Capital Spending and Cash Balances
Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $532 million during the second quarter 2022. Our cash and liquid investment balance was $1.1 billion, which includes cash and cash equivalents, restricted cash and short-term investments. There were 327 million common shares outstanding as of June 30, 2022. The company paid dividends of $2.1 billion during the second quarter 2022.
| Table 7 - Reconciliation of EBITDA to EBITDA Excluding LCM and Impairment by Segment | ||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
| Millions of U.S. dollars | June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||||||||||||||
| EBITDA: | ||||||||||||||||||||||||||||||||
| Olefins & Polyolefins - Americas | $ | 905 | $ | 911 | $ | 1,576 | $ | 1,816 | $ | 2,443 | ||||||||||||||||||||||
| Olefins & Polyolefins - EAI | 159 | 188 | 708 | 347 | 1,120 | |||||||||||||||||||||||||||
| Intermediates & Derivatives | 675 | 546 | 596 | 1,221 | 778 | |||||||||||||||||||||||||||
| Advanced Polymer Solutions | 118 | 125 | 129 | 243 | 264 | |||||||||||||||||||||||||||
| Refining | 418 | 148 | (81) | 566 | (191) | |||||||||||||||||||||||||||
| Technology | 112 | 103 | 92 | 215 | 186 | |||||||||||||||||||||||||||
| Other | (6) | (1) | (2) | (7) | 3 | |||||||||||||||||||||||||||
| Continuing Operations | $ | 2,381 | $ | 2,020 | $ | 3,018 | $ | 4,401 | $ | 4,603 | ||||||||||||||||||||||
| Add: Impairments, pre-tax: | ||||||||||||||||||||||||||||||||
| Olefins & Polyolefins - EAI | $ | 69 | $ | — | $ | — | $ | 69 | $ | — | ||||||||||||||||||||||
| EBITDA excluding impairment: | ||||||||||||||||||||||||||||||||
| Olefins & Polyolefins - Americas | $ | 905 | $ | 911 | $ | 1,576 | $ | 1,816 | $ | 2,443 | ||||||||||||||||||||||
| Olefins & Polyolefins - EAI | 228 | 188 | 708 | 416 | 1,120 | |||||||||||||||||||||||||||
| Intermediates & Derivatives | 675 | 546 | 596 | 1,221 | 778 | |||||||||||||||||||||||||||
| Advanced Polymer Solutions | 118 | 125 | 129 | 243 | 264 | |||||||||||||||||||||||||||
| Refining | 418 | 148 | (81) | 566 | (191) | |||||||||||||||||||||||||||
| Technology | 112 | 103 | 92 | 215 | 186 | |||||||||||||||||||||||||||
| Other | (6) | (1) | (2) | (7) | 3 | |||||||||||||||||||||||||||
| Continuing Operations | $ | 2,450 | $ | 2,020 | $ | 3,018 | $ | 4,470 | $ | 4,603 | ||||||||||||||||||||||
5
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