8-K
LyondellBasell Industries N.V. (LYB)
UNITED 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 30, 2021
____________________________________________
LYONDELLBASELL INDUSTRIES N.V.
(Exact Name of Registrant as Specified in Charter)
____________________________________________
| Netherlands | 001-34726 | 98-0646235 | ||
|---|---|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br>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 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 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)) | ||
| --- | --- | 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 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 30, 2021, LyondellBasell Industries N.V. announced earnings results for the quarter ended June 30, 2021 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 | Press Release dated July 30, 2021. |
| 99.2 | Business Results Discussion by Reporting Segment dated July 30, 2021. |
| 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 30, 2021 | By: | /s/ Jeffrey A. Kaplan |
| Jeffrey A. Kaplan | |||
| Executive Vice President | |||
| and Chief Legal Officer |
Document
NEWS RELEASE
FOR IMMEDIATE RELEASE
HOUSTON and LONDON, July 30, 2021
LyondellBasell Reports Second Quarter 2021 Earnings
Second Quarter 2021 Highlights
•Record quarterly earnings driven by strong demand and tight market conditions
•Net Income: $2.1 billion
•Diluted earnings per share: $6.13 per share
•EBITDA: $3.0 billion; Record quarterly EBITDA for the company and for each of the O&P segments
•Cash from operating activities: $1.9 billion
•Strong cash flow supported debt repayment of $1.3 billion in the second quarter with $1.8 billion year-to-date
•Increased quarterly dividend by 7.6 percent to $1.13 per share reflecting confidence in dividend sustainability through cycles
Comparisons with the prior quarter and second quarter 2020 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,<br>2021 | ||||||
| Sales and other operating revenues | 11,561 | 9,082 | 5,546 | 20,643 | $13,040 | |
| Net income | 2,059 | 1,070 | 314 | 3,129 | 458 | |
| Diluted earnings per share | 6.13 | 3.18 | 0.94 | 9.32 | $1.36 | |
| Weighted average diluted share count | 335 | 334 | 334 | 335 | 334 | |
| EBITDA (a) | 3,018 | 1,585 | 760 | 4,603 | 1,406 |
All values are in US Dollars.
Excluding LCM1
| Diluted earnings per share | $6.13 | $3.18 | $0.68 | $9.32 | $2.15 |
|---|---|---|---|---|---|
| LCM (benefits) charges, pre-tax | — | — | (96) | — | 323 |
| EBITDA | 3,018 | 1,585 | 664 | 4,603 | 1,729 |
(a) See an explanation of the Company's use of EBITDA and reconciliation of net income to EBITDA at the end of this release.
________________________
1 LCM stands for “lower of cost or market.” An explanation of LCM and why we have excluded it from certain financial information can be found under “Information Related to Financial Measures.”
LyondellBasell Industries (NYSE: LYB) today announced net income for the second quarter 2021 of $2.1 billion, or $6.13 per share. Second quarter 2021 EBITDA was $3.0 billion.
“LyondellBasell’s outstanding results demonstrate that our company continues to be well positioned to benefit from the ongoing global economic recovery. Persistent consumer and industrial demand enabled us to establish new benchmarks for profitability during the second quarter.”
“In both of our Olefins and Polyolefins segments, strong demand supported price and margin improvements resulting in record quarterly EBITDA. Reopening and increased mobility are driving higher demand for transportation fuels and improving margins for our Oxyfuels and Refining businesses. During the period, we operated all of our available capacity near full rates to begin rebuilding depleted inventories and addressing our customers' backlogs,” said Bob Patel, LyondellBasell CEO.
“LyondellBasell's growth investments are evident in our results as these new assets expanded the earnings power of our global portfolio and enabled the company to generate $1.9 billion in cash from operations during the quarter. As evidence of our increased confidence to sustain cash flows through cycles, we raised our quarterly dividend by 7.6 percent. Additionally, the strong cash flow allowed us to reduce net debt from $13.6 billion to $12.7 billion with more deleveraging planned for the second half of 2021. Our robust cash generation is supporting rapid progress toward our goal of further strengthening our investment grade balance sheet,” said Patel.
OUTLOOK
“We expect demand for LyondellBasell's products and our associated financial results to remain stronger for the foreseeable future. Three broad themes support our convictions. First, as we work to overcome the challenges of variants, the phased rollout of vaccines and the progression of societal reopening around the world should support robust global demand for our products in both the manufactured goods and service industries for several quarters to come. Second, as our customers seek to address order backlogs, rebuild inventories and serve pent up consumer demand, we expect strong integrated polyethylene margins to continue. Third, increasing mobility during the second half of 2021 should drive higher demand for gasoline and jet fuel providing additional tailwinds by improving margins for our Oxyfuels & Related Products and Refining businesses.”
“LyondellBasell is benefiting from a series of value driven growth investments coming to fruition in an exceptional market environment. Our investments in growth and sustainability should enable the company to continue establishing new benchmarks for profitability and provide a step change in the power of our cash generation. We remain committed to strengthening our investment grade balance sheet and expect to reduce our net debt by up to $4 billion in 2021. LyondellBasell is emerging from the pandemic stronger and is well positioned to continue capturing opportunities through all stages of the business cycle,” Patel said.
CONFERENCE CALL
LyondellBasell will host a conference call July 30 at 11 a.m. EDT. Participants on the call will include Chief Executive Officer Bob Patel, Executive Vice President and Chief Financial Officer Michael McMurray 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 30 until August 30. The replay toll-free dial-in numbers are 1-877-660-6853 and 201-612-7415. The access ID for each is 13721413.
ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world's largest producer of polypropylene compounds and the largest licensor of polyolefin technologies. In 2021, LyondellBasell was named to Fortune magazine's list of the “World's Most Admired Companies” for the fourth consecutive year. More information about LyondellBasell can be found at www.LyondellBasell.com.
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 presentation, 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 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; 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, and reduce our emissions intensity; 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 amend, extend, repay, redeem, service, and reduce 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, 2020, 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.
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 and diluted EPS exclusive of adjustment for “lower of cost or market” (“LCM”) 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 & amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as an alternative to operating cash flows as a measure of our liquidity. We also present EBITDA and diluted EPS exclusive of adjustments for (LCM). LCM is an accounting rule consistent with GAAP related to the valuation of inventory. 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 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.
Net debt is a measure that provides an indicator of a company’s leverage. We calculate net debt as total debt less cash and cash equivalents and short-term investments. Total debt is defined as short-term debt and current maturities of long-term debt plus long-term debt. Reconciliations of forward-looking estimates of net debt are not able to be provided due to the inherent difficultly in forecasting various components which comprise the measure including cash and cash equivalents and short-term investments.
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.
Source: LyondellBasell Industries
Media Contact: Michael Waldron +1 713-309-7575
Investor Contact: David Kinney +1 713-309-7141
| Table 2 - Reconciliation of Net Income to EBITDA, including and excluding LCM | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Six Months Ended | |||||||||
| Millions of U.S. dollars | June 30,<br> 2021 | March 31,<br> 2021 | June 30,<br>2020 | June 30, <br>2021 | June 30,<br>2020 | |||||
| Net income | $ | 2,059 | $ | 1,070 | $ | 314 | $ | 3,129 | $ | 458 |
| (Income) loss from discontinued operations, net of tax | (2) | 2 | 1 | — | — | |||||
| Income from continuing operations | 2,057 | 1,072 | 315 | 3,129 | 458 | |||||
| Provision for (benefit from) income taxes | 506 | 70 | (32) | 576 | 43 | |||||
| Depreciation and amortization | 330 | 335 | 356 | 665 | 698 | |||||
| Interest expense, net | 125 | 108 | 121 | 233 | 207 | |||||
| add: LCM charges (benefits), pre-tax | — | — | (96) | — | 323 | |||||
| EBITDA excluding LCM | 3,018 | 1,585 | 664 | 4,603 | 1,729 | |||||
| less: LCM (charges) benefits, pre-tax | — | — | 96 | — | (323) | |||||
| EBITDA | $ | 3,018 | $ | 1,585 | $ | 760 | $ | 4,603 | $ | 1,406 |
| Table 3 - Reconciliation of Net Debt | ||||||||||
| --- | --- | --- | --- | --- | ||||||
| Millions of U.S. dollars | June 30, <br>2021 | March 31, <br>2021 | ||||||||
| Current maturities of long-term debt | $ | 8 | $ | 958 | ||||||
| Short-term debt | 683 | 682 | ||||||||
| Long-term debt | 13,482 | 13,785 | ||||||||
| Total debt | 14,173 | 15,425 | ||||||||
| less: | ||||||||||
| Cash and cash equivalents | (1,381) | (1,452) | ||||||||
| Short-term investments | (136) | (383) | ||||||||
| Net debt | $ | 12,656 | $ | 13,590 |
5
Document
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, 2021, including the forward-looking statements and information related to financial measures. Comments and analysis represent underlying business activity and are exclusive of LCM.
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,<br>2021 | ||||||
| Operating income | 1,395 | 687 | 107 | 2,082 | $345 | |
| EBITDA | 1,576 | 867 | 248 | 2,443 | 614 | |
| LCM (benefits) charges, pre-tax | — | — | (38) | — | 73 | |
| EBITDA excluding LCM | 1,576 | 867 | 210 | 2,443 | 687 |
All values are in US Dollars.
Three months ended June 30, 2021 versus three months ended March 31, 2021 - EBITDA increased $709 million versus the first quarter 2021. Compared to the prior period, olefins results increased approximately $310 million due to higher margins and volumes driven by first quarter weather events. Margins improved primarily due to the absence of high costs incurred during that time. We operated the ethylene crackers at 93 percent of capacity with the raw materials being approximately 65 percent ethane and about 25 percent other natural gas liquids. Combined polyolefins results increased approximately $400 million due to robust demand and tight markets driving higher prices for polyethylene and polypropylene.
Three months ended June 30, 2021 versus three months ended June 30, 2020 - EBITDA increased $1,366 million versus the second quarter 2020, excluding an unfavorable variance of $38 million due to a second quarter 2020 LCM inventory benefit. Compared with the prior period, olefins results increased $865 million driven by higher margins and volumes. Margins increased primarily due to higher ethylene and propylene pricing outpacing increases in feedstock costs. Volumes increased due to a full quarter of Louisiana joint venture volumes and planned maintenance which occurred in the second quarter 2020. Combined polyolefin results increased $475 million due to higher polyolefins margins and volumes. Polyolefins margins increased driven by higher spread due to increased product prices outpacing higher monomer costs. Polyethylene volume increased due to a full quarter of contribution from the Louisiana joint venture. Joint venture equity income increased approximately $25 million due to higher volumes and margins at our Indelpro polypropylene joint venture in Mexico. Results from our Louisiana joint venture are embedded in the segment's olefins and polyethylene profitability and are not reflected in equity income.
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,<br>2021 | ||||||
| Operating income | 551 | 259 | 81 | 810 | $216 | |
| EBITDA | 708 | 412 | 185 | 1,120 | 374 | |
| LCM charges, pre-tax | — | — | 34 | — | 70 | |
| EBITDA excluding LCM | 708 | 412 | 219 | 1,120 | 444 |
All values are in US Dollars.
Three months ended June 30, 2021 versus three months ended March 31, 2021 - EBITDA increased $296 million versus the first quarter 2021. Compared to the prior period, olefins results increased $100 million due to increased margins driven by higher ethylene and co-product prices, partially offset by higher feedstock costs. We operated the ethylene crackers at 96 percent of capacity with approximately 40 percent of the raw materials from advantaged feedstocks. Combined polyolefins results increased approximately $180 million due to strong demand and continued tight markets driving higher polyethylene and polypropylene price spreads over monomer, partially offset by a decrease in volumes.
Three months ended June 30, 2021 versus three months ended June 30, 2020 - EBITDA increased $489 million versus the second quarter 2020, excluding a favorable variance of $34 million due to a second quarter 2020 LCM inventory charge. Compared to the prior period, olefins results increased more than $90 million driven by higher margins and volumes. Margins increased primarily due to higher ethylene price, partially offset by higher feedstock costs. Combined polyolefins results increased about $330 million due to strong demand and tight markets driving higher polyethylene and polypropylene price spreads over monomer. Joint venture equity income increased approximately $50 million due to higher margins associated with increased polyolefins demand.
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,<br>2021 | ||||||
| Operating income | 493 | 88 | 24 | 581 | $155 | |
| EBITDA | 596 | 182 | 101 | 778 | 304 | |
| LCM charges, pre-tax | — | — | 20 | — | 98 | |
| EBITDA excluding LCM | 596 | 182 | 121 | 778 | 402 |
All values are in US Dollars.
Three months ended June 30, 2021 versus three months ended March 31, 2021 - EBITDA increased $414 million versus the first quarter 2021. Compared to the prior period, Propylene Oxide & Derivatives results increased $170 million due to higher margins and volumes. Strong demand drove margins for the Propylene Oxide and Derivatives business to historical highs. Volumes increased due to the Texas weather events and planned maintenance which occurred in the first quarter. Intermediate Chemicals results increased approximately $170 million due to improved margins driven by higher product prices and an increase in volumes driven by the absence of the weather events. Oxyfuels & Related Products results increased $70 million due to higher margins and volumes. Margins increased driven by higher demand and gasoline prices.
Three months ended June 30, 2021 versus three months ended June 30, 2020 - EBITDA increased $475 million versus the second quarter 2020, excluding a favorable variance of $20 million due to LCM inventory charges in the second quarter 2020. Compared with the prior period, Propylene Oxide & Derivatives results increased $205 million due to strong demand and tight markets driving higher margins and volumes. Intermediate Chemicals results increased approximately $155 million due to increased margins driven by higher product prices and higher volumes due to improved demand and planned maintenance which occurred in the second quarter 2020. Oxyfuels & Related Products results increased approximately $95 million due to higher margins driven by higher demand and gasoline prices.
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,<br>2021 | ||||||
| Operating income (loss) | 101 | 104 | (83) | 205 | $(13) | |
| EBITDA | 129 | 135 | (44) | 264 | 69 | |
| LCM charges, pre-tax | — | — | 67 | — | 69 | |
| EBITDA excluding LCM | 129 | 135 | 23 | 264 | 138 |
All values are in US Dollars.
Three months ended June 30, 2021 versus three months ended March 31, 2021 - EBITDA decreased $6 million versus the first quarter 2021. Compared with the prior period, Compounding & Solutions results declined approximately $25 million driven by a decrease in volumes due to lower demand for products serving the automotive and electronic end markets as a result of semiconductor shortages. Advanced Polymers results increased more than $10 million primarily due to higher margins resulting from higher product price spreads over propylene.
Three months ended June 30, 2021 versus three months ended June 30, 2020 - EBITDA increased $106 million compared to the second quarter 2020, excluding a favorable variance of $67 million due to LCM inventory charges in the second quarter 2020. The prior period results included integration costs of approximately $15 million which did not recur in the second quarter 2021. Compared with the prior period, Compounding & Solutions results increased approximately $65 million with higher demand driving increases in volumes. Advanced Polymers results increased more than $20 million due to higher volumes driven by increased automotive and construction demand and margin increases primarily due to lower propylene feedstock prices in North America.
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,<br>2021 | ||||||
| Operating income (loss) | (95) | (130) | 116 | (225) | $(198) | |
| EBITDA | (81) | (110) | 165 | (191) | (107) | |
| LCM (benefits) charges, pre-tax | — | — | (179) | — | 13 | |
| EBITDA excluding LCM | (81) | (110) | (14) | (191) | (94) |
All values are in US Dollars.
Three months ended June 30, 2021 versus three months ended March 31, 2021 - EBITDA increased $29 million versus the first quarter 2021. Margin improved driven by an increase in the Maya 2-1-1 industry benchmark crack spread of $6.14 per barrel to $21.46 per barrel, partially offset by increased costs for renewable identification number credits (RINs) and lower refinery grade propylene prices. The Houston Refinery operated at 248,000 barrels per day, 96,000 barrels per day higher than prior period driven by the absence of weather events which occurred in the first quarter 2021.
Three months ended June 30, 2021 versus three months ended June 30, 2020 - EBITDA decreased $67 million versus the second quarter 2020, excluding an unfavorable variance of $179 million due to LCM inventory benefits in the second quarter 2020. Margin declined driven by lower by-product margins, increased costs for RINs and the absence of hedge gains which occurred in the second quarter 2020, partially offset by an increase in the Maya 2-1-1 industry benchmark crack spread of $8.19 per barrel. Crude throughput increased by 11,000 barrels per day due to higher demand for transportation fuels.
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,<br>2021 | ||||||
| Operating income | 82 | 82 | 104 | 164 | $151 | |
| EBITDA | 92 | 94 | 112 | 186 | 168 |
All values are in US Dollars.
Three months ended June 30, 2021 versus three months ended March 31, 2021 - EBITDA decreased $2 million compared to the first quarter 2021 driven by lower catalyst margin, partially offset by higher licensing revenue.
Three months ended June 30, 2021 versus three months ended June 30, 2020 - EBITDA decreased $20 million, versus the second quarter 2020 driven by lower catalyst margin and reduced licensing revenue.
Capital Spending and Cash Balances
Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $431 million during the second quarter 2021. Our cash and liquid investment balance was $1.5 billion, which includes $1.4 billion of cash and cash equivalents and restricted cash and $0.1 billion of short-term investments. There were 335 million common shares outstanding as of June 30, 2021. The company paid dividends of $378 million during the second quarter 2021.
| Table 7 - Reconciliation of EBITDA to EBITDA Excluding LCM by Segment | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Six Months Ended | |||||||||
| Millions of U.S. dollars | June 30, <br>2021 | March 31,<br>2021 | June 30,<br>2020 | June 30, <br>2021 | June 30,<br>2020 | |||||
| EBITDA: | ||||||||||
| Olefins & Polyolefins - Americas | $ | 1,576 | $ | 867 | $ | 248 | $ | 2,443 | $ | 614 |
| Olefins & Polyolefins - EAI | 708 | 412 | 185 | 1,120 | 374 | |||||
| Intermediates & Derivatives | 596 | 182 | 101 | 778 | 304 | |||||
| Advanced Polymer Solutions | 129 | 135 | (44) | 264 | 69 | |||||
| Refining | (81) | (110) | 165 | (191) | (107) | |||||
| Technology | 92 | 94 | 112 | 186 | 168 | |||||
| Other | (2) | 5 | (7) | 3 | (16) | |||||
| Continuing Operations | $ | 3,018 | $ | 1,585 | $ | 760 | $ | 4,603 | $ | 1,406 |
| Add: LCM charges (benefits), pre-tax: | ||||||||||
| Olefins & Polyolefins - Americas | $ | — | $ | — | $ | (38) | $ | — | $ | 73 |
| Olefins & Polyolefins - EAI | — | — | 34 | — | 70 | |||||
| Intermediates & Derivatives | — | — | 20 | — | 98 | |||||
| Advanced Polymer Solutions | — | — | 67 | — | 69 | |||||
| Refining | — | — | (179) | — | 13 | |||||
| Continuing Operations | $ | — | $ | — | $ | (96) | $ | — | $ | 323 |
| EBITDA excluding LCM: | ||||||||||
| Olefins & Polyolefins - Americas | $ | 1,576 | $ | 867 | $ | 210 | $ | 2,443 | $ | 687 |
| Olefins & Polyolefins - EAI | 708 | 412 | 219 | 1,120 | 444 | |||||
| Intermediates & Derivatives | 596 | 182 | 121 | 778 | 402 | |||||
| Advanced Polymer Solutions | 129 | 135 | 23 | 264 | 138 | |||||
| Refining | (81) | (110) | (14) | (191) | (94) | |||||
| Technology | 92 | 94 | 112 | 186 | 168 | |||||
| Other | (2) | 5 | (7) | 3 | (16) | |||||
| Continuing Operations | $ | 3,018 | $ | 1,585 | $ | 664 | $ | 4,603 | $ | 1,729 |
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