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What changed in LyondellBasell's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of LyondellBasell's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+226 added−226 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in LyondellBasell's 2023 10-K

226 paragraphs added · 226 removed · 168 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

53 edited+14 added−9 removed105 unchanged
Biggest changeAlthough we have preparedness plans in place designed to minimize impacts and enhance safety, should an event occur, it could have the potential to disrupt our supply chain and operations. A number of our facilities are located on the U.S. Gulf Coast, which has been impacted by hurricanes that have required us to temporarily shut down operations at those sites.
Biggest changeA number of our facilities are located on the U.S. Gulf Coast, which has been impacted by hurricanes that have required us to temporarily shut down operations at those sites. Our sites rely on rivers and other waterways for transportation that may experience restrictions in times of drought or other unseasonal weather variation.
Incidents of civil unrest, including terrorist attacks and demonstrations that have been marked by violence, have occurred in a number of countries in the Middle East and South America. Some political regimes in these countries are threatened or have changed as a result of such unrest.
Incidents of civil unrest, including terrorist attacks and demonstrations that have been marked by violence, have occurred in a number of countries, including in the Middle East and South America. Some political regimes in these countries are threatened or have changed as a result of such unrest.
In September 2020, we announced a circularity goal of marketing at least two million metric tons of recycled and renewable-based polymers annually by 2030. Many of our customers also have goals to increase the recycled and renewable content in their own products and packaging.
In September 2020, we announced a circularity goal of producing and marketing at least two million metric tons of recycled and renewable-based polymers annually by 2030. Many of our customers also have goals to increase the recycled and renewable content in their own products and packaging.
In addition, most of our European transactions and assets, including cash reserves and receivables, are denominated in euros. We also derive significant revenues from our business in emerging markets, particularly the emerging markets in Asia and South America.
In addition, most of our European transactions and assets, including cash and receivables, are denominated in euros. We also derive significant revenues from our business in emerging markets, particularly the emerging markets in Asia and South America.
These potential hazards include: • pipeline leaks and ruptures; • explosions; • fires; • severe weather and natural disasters; • mechanical failure; • unscheduled downtimes; • supplier disruptions; • labor shortages or other labor difficulties; • transportation interruptions; • remediation complications; • increased restrictions on, or the unavailability of, water for use at our manufacturing sites or for the transport of our products or raw materials; 24 Table of Contents • chemical and oil spills; • discharges or releases of toxic or hazardous substances or gases; • shipment of incorrect or off-specification product to customers; • storage tank leaks; • other environmental risks; and • cyber-attack or other terrorist acts.
These potential hazards include: • pipeline leaks and ruptures; • explosions; • fires; 24 Table of Conte nts • severe weather and natural disasters; • mechanical failure; • unscheduled downtimes; • supplier disruptions; • labor shortages or other labor difficulties; • transportation interruptions; • remediation complications; • increased restrictions on, or the unavailability of, water for use at our manufacturing sites or for the transport of our products or raw materials; • chemical and oil spills; • discharges or releases of toxic or hazardous substances or gases; • shipment of incorrect or off-specification product to customers; • storage tank leaks; • other environmental risks; and • cyber-attack or other terrorist acts.
While we attempt to mitigate these risks by employing a number of measures, including security measures, employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems, our employees, systems, networks, products, facilities and services remain potentially vulnerable to ransomware, sophisticated espionage or cyber-assault.
While we attempt to mitigate these risks by employing a number of measures, including security measures, employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems, our employees, systems, networks, products, facilities and services remain potentially vulnerable to ransomware or sophisticated espionage.
If we were to incur a significant liability for which we were not fully insured, we might not be able to finance the 23 Table of Contents amount of the uninsured liability on terms acceptable to us or at all, and might be obligated to divert a significant portion of our cash flow from normal business operations.
If we were to incur a significant liability for which we were not fully insured, we might not be able to finance the amount of the uninsured liability on terms acceptable to us, or at all, and might be obligated to divert a significant portion of our cash flow from normal business operations.
Additionally, demand for the products we produce may be reduced. 29 Table of Contents Non-Governmental Organizations have been active in filing lawsuits against governments and private parties in various jurisdictions around the world seeking enforcement of existing laws and new requirements to reduce GHG emissions.
Additionally, demand for the products we produce may be reduced. Non-Governmental Organizations have been active in filing lawsuits against governments and private parties in various jurisdictions around the world seeking enforcement of existing laws and new requirements to reduce GHG emissions.
In addition, scarcity of water and drought conditions due to climate change could reduce the availability of fresh water needed to produce our products which could increase our costs of operations. 30 Table of Contents Increased regulation or deselection of plastic could lead to a decrease in demand growth for some of our products.
In addition, scarcity of water and drought conditions due to climate change could reduce the availability of fresh water needed to produce our products which could increase our costs of operations. Increased regulation or deselection of plastic could lead to a decrease in demand growth for some of our products.
The retention of key personnel and appropriate senior management succession planning will continue to be critically important to the successful implementation of our strategies. 32 Table of Contents There is substantial and continuous competition for diverse, talented engineering, manufacturing, and operations employees.
The retention of key personnel and appropriate senior management succession planning will continue to be critically important to the successful implementation of our strategies. There is substantial and continuous competition for diverse, talented engineering, manufacturing, and operations employees.
We may develop a dispute with any of our partners over decisions affecting the venture that may result in litigation, arbitration or some other form of dispute resolution. If a joint venture participant acts contrary to our interest, it could harm our brand, business, results of operations and financial condition.
We may develop a dispute with any of our partners over decisions affecting the venture that may result in litigation, arbitration or some other form of dispute resolution. If a joint venture participant acts contrary to our interest, or is unsuccessful in conducting its business, it could harm our brand, business, results of operations and financial condition.
These factors result in significant fluctuations in profits and cash flow from period to period and over business cycles. 21 Table of Contents New capacity additions around the world may lead to periods of oversupply and lower profitability.
These factors result in significant fluctuations in profits and cash flow from period to period and over business cycles. 21 Table of Conte nts New capacity additions around the world may lead to periods of oversupply and lower profitability.
Many of our current pension plans have projected benefit obligations that exceed the fair value of the plan assets. As of December 31, 2022, the aggregate deficit was $662 million. Any declines in the fair values of the pension plans’ assets could require additional payments by us in order to maintain specified funding levels.
Many of our current pension plans have projected benefit obligations that exceed the fair value of the plan assets. As of December 31, 2023, the aggregate deficit was $853 million. Any declines in the fair values of the pension plans’ assets could require additional payments by us in order to maintain specified funding levels.
Often, we are not able to protect our market position for these products by product differentiation and may not be able to pass on cost increases to our customers due to the significant competition in our business. In addition, we face increased competition from companies that may have greater financial resources and different cost structures or strategic goals than us.
Often, we are not able to protect our market position for these products by product differentiation and may not be able to pass on cost increases to our customers due to the significant competition in our business. 27 Table of Conte nts In addition, we face increased competition from companies that may have greater financial resources and different cost structures or strategic goals than us.
We may be required to record material charges against our earnings due to any number of events that could cause impairments to our assets. We may be required to reduce production or idle facilities for extended periods of time or exit certain businesses as a result of the cyclical nature of our industry.
We may be required to record material charges against our earnings due to any number of events including impairments of our assets. We may be required to reduce production or idle facilities for extended periods of time or exit certain businesses as a result of the cyclical nature of our industry.
With increased volatility in raw material costs, our suppliers could impose more onerous terms on us, resulting in shorter payment cycles and increasing our working capital requirements. 22 Table of Contents Our ability to source raw materials may be adversely affected by political instability, civil disturbances or other governmental actions.
With increased volatility in raw material costs, our suppliers could impose more onerous terms on us, resulting in shorter payment cycles and increasing our working capital requirements. 22 Table of Conte nts Our ability to source raw materials or deliver products may be adversely affected by political instability, civil disturbances or other governmental actions.
Furthermore, we are subject to certain existing, and may be subject to possible future, laws that limit or may limit our activities while some of our competitors may not be subject to such laws, which may adversely affect our competitiveness. Changes in tax laws and regulations could affect our tax rate and our results of operations.
Furthermore, we are subject to certain existing, and may be subject to possible future, laws that limit or may limit our activities while some of our competitors may not be subject to such laws, which may adversely affect our competitiveness. 28 Table of Conte nts Changes in tax laws and regulations could affect our tax rate and our results of operations.
The European Union has been undertaking a series of actions under its Circular Economy Action Plan, including adoption of the Single Use Plastics Directive in 2019, which introduced policy measures for single use plastics including bans, product design requirements, extended producer responsibility obligations, and labeling requirements, and adoption of a proposed Packaging and Packaging Waste Regulation in 2022.
The European Union has been undertaking a series of actions under its Circular Economy Action Plan, including adoption of the Single Use Plastics Directive in 2019, which introduced policy measures for single use plastics including bans, product design requirements, extended producer responsibility obligations, and labeling requirements, and a proposal for a Packaging and Packaging Waste Regulation to replace the Packaging and Packaging Waste Directive.
There is a growing concern with the accumulation of plastic, including microplastics, and plastic waste in the environment. Additionally, plastics have recently faced increased public backlash and scrutiny, as well as governmental investigations and enforcement, and private litigation. Policy measures to address this concern are being discussed or implemented by governments at all levels.
There is a growing concern with the accumulation of plastic, plastic additives, and microplastics in the environment, particularly in waterways and oceans. Additionally, plastics have recently faced increased public backlash and scrutiny, as well as governmental investigations and enforcement, and private litigation. Policy measures to address this concern are being discussed or implemented by governments at all levels.
Our pension plans are subject to legislative and regulatory requirements of applicable jurisdictions, which could include, under certain circumstances, local governmental authority to terminate the plan. See Note 14 to the Consolidated Financial Statements for additional information regarding pensions and other post-retirement benefits. Item 1B. Unresolved Staff Comments. None.
Our pension plans are subject to legislative and regulatory requirements of applicable jurisdictions, which could include, under certain circumstances, local governmental authority to terminate the plan. See Note 15 to the Consolidated Financial Statements for additional information regarding pensions and other post-retirement benefits. Item 1B. Unresolved Staff Comments. None. 33 Table of Conte nts
For example, higher costs arising from delaying construction of our world-scale PO/TBA plant in Houston due to COVID-19, more extensive civil construction, and unexpected tariffs on materials increased our costs and impacted our projected rate of return on the project.
For example, higher costs arising from delaying construction of our world-scale PO/TBA plant in Houston including more extensive civil construction and unexpected tariffs on materials, increased our costs and impacted our projected rate of return on the project.
Political instability, civil disturbances and actions by governments in these areas are more likely to substantially increase the price and decrease the supply of raw materials necessary for our operations, which could have a material adverse effect on our results of operations.
Political instability, civil disturbances and actions by governments in these areas are more likely to substantially increase the price and decrease the supply of raw materials necessary for our operations or impair our ability to deliver products to customers, which could have a material adverse effect on our results of operations.
In addition, any future potential climate regulations, legislation, or litigation results could impose additional operating restrictions or delays in implementing growth projects or other capital investments, require us to incur increased costs, and could have a material adverse effect on our business and results of operations. Legislation and regulatory initiatives could lead to a decrease in demand for our products.
In addition, any future potential climate regulations, legislation, or litigation results could impose additional operating restrictions or delays in implementing growth projects or other capital investments, require us to incur increased costs, and could have a material adverse effect on our business and results of operations.
As of December 31, 2022, we had availability of $794 million under this facility. In the event of a default under our credit facilities or any of our senior notes, we could be required to immediately repay all outstanding borrowings and make cash deposits as collateral for all obligations the facility supports, which we may not be able to do.
In the event of a default under our credit facilities or any of our senior notes, we could be required to immediately repay all outstanding borrowings and make cash deposits as collateral for all obligations the facility supports, which we may not be able to do.
Delays or cost increases related to capital spending programs involving engineering, procurement and construction of facilities could materially adversely affect our ability to achieve forecasted internal rates of return and operating results.
Delays or cost increases related to capital spending programs involving engineering, procurement and construction of facilities could materially adversely affect our ability to achieve forecasted internal rates of return and operating results, or impair our ability to meet our sustainability or other targets or goals.
Shared control or lack of control of joint ventures may delay decisions or actions regarding our joint ventures. A portion of our operations are conducted through joint ventures, where control may be exercised by or shared with unaffiliated third parties.
Shared control or lack of control of joint ventures or equity investments may delay decisions or actions regarding our joint ventures, or adversely affect our financial results. A portion of our operations are conducted through joint ventures or equity investments, where control may be exercised by or shared with unaffiliated third parties.
Such delays or cost increases may arise as a result of unpredictable factors, many of which are beyond our control, including: • denial of or delay in receiving requisite regulatory approvals and/or permits; • unplanned increases in the cost of construction materials or labor; • disruptions in transportation of components or construction materials; • adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors or suppliers; • shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; and • nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors.
Such delays or cost increases may arise as a result of unpredictable factors, many of which are beyond our control, including: • denial of or delay in receiving requisite regulatory approvals and/or permits; • unplanned increases in the cost of construction materials or labor; • disruptions in transportation of components or construction materials; • adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors or suppliers; • shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; and • nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors. 25 Table of Conte nts Any one or more of these factors could have a significant impact on our ongoing capital projects.
Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical products and otherwise limit the use of these products, which could lead to a decrease in demand for these products. Such a decrease in demand could have an adverse impact on our business and results of operations.
Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical products and otherwise limit the use of these products, which could lead to a decrease in demand for these products.
In the event we are unable to successfully divest a business or product line, we may be forced to wind down such business or product line, which could materially and adversely affect our results of operations and financial condition. 26 Table of Contents We cannot assure you that we will be successful in managing these or any other significant risks that we encounter in acquiring or divesting a business or product line, and any transaction we undertake could materially and adversely affect our business, financial condition, results of operations and cash flows, and may also result in a diversion of management attention, operational difficulties and losses.
We cannot assure you that we will be successful in managing these or any other significant risks that we encounter in acquiring or divesting a business or product line, and any transaction we undertake could materially and adversely affect our business, financial condition, results of operations and cash flows, and may also result in a diversion of management attention, operational difficulties and losses.
Any one or more of these factors could have a significant impact on our ongoing capital projects. If we were unable to make up the delays associated with such factors or to recover the related costs, or if market conditions change, it could materially and adversely affect our business, financial condition, results of operations and cash flows.
If we were unable to make up the delays associated with such factors or to recover the related costs, or if market conditions change, it could materially and adversely affect our business, financial condition, results of operations and cash flows.
Failure to achieve our emissions targets could result in reputational harm, enforcement or litigation, changing investor sentiment regarding investment in LyondellBasell or a negative impact on access to and cost of capital. Failure to achieve our circularity goals could have an adverse effect on the demand for our products.
Failure to achieve our emissions targets could result in reputational harm, enforcement or litigation, changing investor sentiment regarding investment in LyondellBasell or a negative impact on access to and cost of capital.
Increased global information cybersecurity threats and more sophisticated, targeted computer crime pose a risk to the confidentiality, availability and integrity of our data, operations and infrastructure.
General Risk Factors Increased IT and cybersecurity threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, data, products, facilities and services. Increased global information cybersecurity threats and more sophisticated, targeted computer crime pose a risk to the confidentiality, availability and integrity of our data, operations and infrastructure.
We operate internationally and are subject to the risks of doing business on a global level. These risks include fluctuations in currency exchange rates, economic instability and disruptions, restrictions on the transfer of funds and the imposition of trade restrictions or duties and tariffs, and complex regulations concerning privacy and data security.
These risks include fluctuations in currency exchange rates, economic instability and disruptions, restrictions on the transfer of funds and the imposition of trade restrictions or duties and tariffs, and complex regulations concerning privacy and data security.
New or revised governmental regulations and independent studies relating to the effect of our products on health, safety and the environment may affect demand for our products and the cost of producing our products.
Legislation and regulatory initiatives could lead to a decrease in demand for our products or reputational harm. New or revised governmental regulations and independent studies relating to the effect of our products on health, safety and the environment may affect demand for our products and the cost of producing our products.
We continually evaluate the performance and strategic fit of all of our businesses and evaluate whether our businesses would benefit from acquisitions to enhance growth or dispositions that would align our footprint with our overall business strategy. These transactions pose risks and challenges that could negatively impact our business and financial statements.
Acquisitions or dispositions of assets or businesses could disrupt our business and harm our financial condition and stock price. We continually evaluate the performance and strategic fit of all of our businesses and evaluate whether our businesses would benefit from acquisitions to enhance growth or dispositions that would align our footprint with our overall business strategy.
Our tax returns are periodically audited or subjected to review by tax authorities, and any adverse result of these examinations could also have an impact on our effective income tax rate and our results of operations.
Our tax returns are periodically audited or subjected to review by tax authorities, and any adverse result of these examinations could also have an impact on our effective income tax rate and our results of operations. We regularly evaluate the likelihood of an adverse result of an examination, however, there is no assurance as to the ultimate outcome and impact.
Competitors with different cost structures or strategic goals than we have may be able to invest significant capital into their businesses, including expenditures for research and development. In addition, specialty products we produce may become commoditized over time.
Competitors with different cost structures or strategic goals than we have may be able to invest significant capital into their businesses, including expenditures for research and development. In addition, specialty products we produce may become commoditized over time. Increased competition could result in lower prices or lower sales volumes, which would have a negative impact on our results of operations.
We also may be subject to claims that our technology, patents or other intellectual property infringes on a third party’s intellectual property rights. Unfavorable resolution of these claims could result in restrictions on our ability to deliver the related service or in a settlement that could be material to us. Adverse results of legal proceedings could materially adversely affect us.
Unfavorable resolution of these claims could result in restrictions on our ability to deliver the related service or in a settlement that could be material to us. 32 Table of Conte nts Adverse results of legal proceedings could materially adversely affect us.
As of December 31, 2022, we had no borrowings or letters of credit outstanding under the facility and $200 million, net of discount, outstanding under our commercial paper program, leaving an unused and available credit capacity of $3,050 million. We may also meet our cash needs by selling receivables under our $900 million U.S. Receivables Facility.
We may use our $3,250 million revolving credit facility, which backs our commercial paper program, to meet our cash needs, to the extent available. As of December 31, 2023, we had no borrowings or letters of credit outstanding under the facility and no borrowings outstanding under our commercial paper program, leaving an unused and available credit capacity of $3,250 million.
We regularly evaluate the likelihood of an adverse result of an examination, however, there is no assurance as to the ultimate outcome and impact. 28 Table of Contents Risks Related to Health, Safety, and the Environment We cannot predict with certainty the extent of future costs under environmental, health and safety and other laws and regulations, and cannot guarantee they will not be material.
Risks Related to Health, Safety, and the Environment We cannot predict with certainty the extent of future costs under environmental, health and safety and other laws and regulations, and cannot guarantee they will not be material.
The joint ventures that we do not control may also lack financial reporting systems to provide adequate and timely information for our reporting purposes. 25 Table of Contents Our joint venture partners may have different interests or goals than we do and may take actions contrary to our requests, policies or objectives.
We cannot control the actions or ownership of these partners, including any nonperformance, default or bankruptcy of the joint venture or its partners. The joint ventures that we do not control may also lack financial reporting systems to provide adequate and timely information for our reporting purposes.
Acquisitions involve numerous risks, including meeting our standards for compliance, problems combining the purchased operations, technologies or products, unanticipated costs and liabilities, diversion of management’s attention from our core businesses, and potential loss of key employees. There can be no assurance that we will be able to integrate successfully any businesses, products, technologies, or personnel that we might acquire.
These transactions pose risks and challenges that could negatively impact our business and financial statements. 26 Table of Conte nts Acquisitions involve numerous risks, including meeting our standards for compliance, problems combining the purchased operations, technologies or products, unanticipated costs and liabilities, diversion of management’s attention from our core businesses, and potential loss of key employees.
In December 2022, we announced that we were increasing our GHG emissions reduction targets for 2030, while maintaining our previously announced goal to achieve net zero scope 1 and 2 GHG emissions by 2050.
We have set GHG emissions reduction targets for 2030, and aim to achieve net zero scope 1 and 2 GHG emissions by 2050.
Risks Related to our Operations Our operations are subject to risks inherent in chemical and refining businesses, and we could be subject to liabilities for which we are not fully insured or that are not otherwise mitigated.
Without waivers from lenders party to those agreements, any such default could have a material adverse effect on our ability to continue to operate. 23 Table of Conte nts Risks Related to our Operations Our operations are subject to risks inherent in chemical and refining businesses, and we could be subject to liabilities for which we are not fully insured or that are not otherwise mitigated.
Jurisdictions in which we operate, including, in particular, the European Union (EU), are preparing national legislation and protection plans to implement their emission reduction commitments under the Paris Agreement. In June 2021, the European Climate Law set legally binding targets of net zero GHG emissions by 2050, and a 55% reduction in GHG emissions by 2030.
In June 2021, the European Climate Law set legally binding targets of net zero GHG emissions by 2050, and a 55% reduction in GHG emissions by 2030.
Any decision to permanently close facilities or exit a business would likely result in impairment and other charges to earnings. For example, in April 2022, the Finance Committee of the Board of Directors of the Company approved a plan to exit the refining business, resulting in the recognition of $187 million of expense.
For example, in April 2022, the Finance Committee of the Board of Directors of the Company approved a plan to exit the refining business, resulting in the recognition of $334 million and $187 million of expense in 2023 and 2022, respectively. Temporary outages at our facilities can last for several quarters and sometimes longer.
Under the 2015 Paris Agreement, parties to the United Nations Framework Convention on Climate Change agreed to undertake ambitious efforts to reduce GHG emissions and strengthen adaptation to the effects of climate change.
Under the 2015 Paris Agreement, parties to the United Nations Framework Convention on Climate Change agreed to undertake ambitious efforts to reduce GHG emissions and strengthen adaptation to the effects of climate change. 29 Table of Conte nts Jurisdictions in which we operate, including, in particular, the European Union (EU), are preparing national legislation and protection plans to implement their emission reduction commitments under the Paris Agreement.
Any default under any of our credit arrangements could cause a default under many of our other credit agreements and debt instruments. Without waivers from lenders party to those agreements, any such default could have a material adverse effect on our ability to continue to operate.
Any default under any of our credit arrangements could cause a default under many of our other credit agreements and debt instruments.
We anticipate the forthcoming regulations will result in an accelerated reduction of our free allowances and higher market prices for purchased allowances. These and other future regulations could result in increased costs, additional capital expenditures, and/or restrictions on operations.
Our operations in Europe participate in the ETS and we meet our obligations through a combination of free and purchased emission allowances. We anticipate that these regulations will result in an accelerated reduction of our free allowances and higher market prices for purchased allowances.
The physical impacts of climate change can negatively impact our facilities and operations. Potential physical impacts of climate change include increased frequency and severity of hurricanes and floods as well as freezing conditions, tornadoes, and global sea level rise.
Potential physical impacts of climate change include increased frequency and severity of hurricanes and floods as well as freezing conditions, tornadoes, and global sea level rise. Although we have preparedness plans in place designed to minimize impacts and enhance safety, should an event occur, it could have the potential to disrupt our supply chain and operations.
Even though we may reduce production at facilities, we may be required to continue to purchase or pay for utilities or raw materials under these arrangements. Acquisitions or dispositions of assets or businesses could disrupt our business and harm our financial condition and stock price.
These outages could cause us to incur significant costs, including the expenses of maintaining and restarting these facilities. In addition, we have significant obligations under take-or-pay agreements. Even though we may reduce production at facilities, we may be required to continue to purchase or pay for utilities or raw materials under these arrangements.
In the U.S., addressing climate change is a stated priority of President Biden, and in February 2021, the U.S. recommitted to the Paris Agreement after having withdrawn in August 2017. The U.S. Environmental Protection Agency as well as several state governments have promulgated regulations directed at GHG emissions reductions from certain types of facilities.
Environmental Protection Agency as well as several state governments have promulgated regulations directed at GHG emissions reductions from certain types of facilities.
Increased competition could result in lower prices or lower sales volumes, which would have a negative impact on our results of operations. 27 Table of Contents We operate internationally and are subject to exchange rate fluctuations, exchange controls, political risks and other risks relating to international operations.
We operate internationally and are subject to exchange rate fluctuations, exchange controls, political risks and other risks relating to international operations. We operate internationally and are subject to the risks of doing business on a global level.
Removed
We may use our $3,250 million revolving credit facility, which backs our commercial paper program, to meet our cash needs, to the extent available.
Added
We may also meet our cash needs by selling receivables under our $900 million U.S. Receivables Facility. As of December 31, 2023, we had no borrowing or letters of credit outstanding and availability of $900 million under this facility.
Removed
We cannot control the actions or ownership of our joint venture partners, including any nonperformance, default or bankruptcy of joint venture partners.
Added
Our joint venture partners may have different interests or goals than we do and may take actions contrary to our requests, policies or objectives.
Removed
See Notes 7, 12 and 20 to the Consolidated Financial Statements for additional information regarding the planned exit. Temporary outages at our facilities can last for several quarters and sometimes longer. These outages could cause us to incur significant costs, including the expenses of maintaining and restarting these facilities. In addition, we have significant obligations under take-or-pay agreements.
Added
For example, during the fourth quarter of 2023, we identified an impairment trigger related to the adverse financial performance of our European PO joint venture which resulted in a non-cash impairment charge of $192 million. Any decision to permanently close facilities or exit a business may result in impairment and other charges to earnings.
Removed
For example, in April 2022 we agreed to the sale of our Australian polypropylene business that resulted in a $69 million non-cash impairment charge, which impacted earnings.
Added
There can be no assurance that we will be able to integrate successfully any businesses, products, technologies, or personnel that we might acquire.
Removed
In December 2022, the EU announced forthcoming regulations to support the 2030 climate target, including a revision of the EU Emissions Trading System (ETS), and the introduction of a Carbon Border Adjustment Mechanism. Our operations in Europe participate in the ETS and we meet our obligations through a combination of free and purchased emission allowances.
Added
In the event we are unable to successfully divest a business or product line, we may be forced to wind down such business or product line, which could materially and adversely affect our results of operations and financial condition.
Removed
Our sites rely on rivers for transportation that may experience restrictions in times of drought or other unseasonal weather variation.
Added
Throughout 2023, a series of legislative reforms arising out of the EU’s ‘Fit for 55’ package of proposals have been adopted and are in the process of being implemented, including reforms to the EU Emissions Trading System (ETS), and the introduction of a Carbon Border Adjustment Mechanism.
Removed
General Risk Factors The COVID-19 pandemic could materially adversely affect our financial condition and results of operations. In early 2020, responses to the COVID-19 pandemic caused significant economic disruption and adversely impacted the global economy, leading to reduced consumer spending and volatility in the global financial and commodities markets.
Added
These and other future regulations could result in increased costs, additional capital expenditures, and/or restrictions on operations. In the U.S., addressing climate change is a stated priority of President Biden, and in February 2021, the U.S. recommitted to the Paris Agreement after having withdrawn in August 2017. The U.S.
Removed
The return to pre-pandemic economic activity continues to depend on the severity and transmission rate of the virus, the continued effectiveness of vaccines and treatments, and policy decisions made by governments in reaction to evolving local conditions.
Added
Such a decrease in demand could have an adverse impact on our business and results of operations. 30 Table of Conte nts U.S. state and federal regulators, international regulators, investors, consumers and other stakeholders are focused on environmental, social, and governance (“ESG”) considerations.
Removed
Any further global supply chain or economic disruption as a result of COVID-19 could have a material negative impact on our business, results of operations, access to sources of liquidity and financial condition. 31 Table of Contents Increased IT and cybersecurity threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, data, products, facilities and services.
Added
ESG disclosure obligations have required and may continue to require us to implement new practices and reporting processes, and have created and will continue to create additional compliance risk.
Added
If we are unable to meet our circularity, greenhouse gas reduction, diversity or other goals, or if we are perceived by regulators, customers, stockholders or employees to have not responded appropriately to the growing concern for these issues, our reputation, and therefore our ability to sell our products, could be negatively impacted.
Added
If, as a result of their assessment of our ESG performance, certain investors are unsatisfied with our actions or progress, they may reconsider their investment in our shares or debt securities.
Added
Providers of debt and equity financing may also consider our sustainability performance and external ESG ratings, which we have limited ability to influence, which could impact our cost of capital and adversely affect our business. The physical impacts of climate change can negatively impact our facilities and operations.
Added
In addition, if customers increasingly set their own scope 3 GHG emissions reduction targets, this could lead to a decrease in demand for our products. 31 Table of Conte nts Failure to achieve our circularity goals could have an adverse effect on the demand for our products.
Added
We also may be subject to claims that our technology, patents or other intellectual property infringes on a third party’s intellectual property rights.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+0 added−7 removed2 unchanged
Biggest changeLitigation and Other Matters Information regarding our litigation and other legal proceedings can be found in Note 17 to the Consolidated Financial Statements. Item 4. Mine Safety Disclosures. Not applicable. 34 Table of Contents PART II
Biggest changeThe court entered the final judgment in January 2024, and we have paid the penalty amount. Litigation and Other Matters Information regarding our litigation and other legal proceedings can be found in Note 18 to the Consolidated Financial Statements. 35 Table of Conte nts
In April 2022, the State of Texas filed suit against Equistar Chemicals, LP, in Travis County District Court seeking civil penalties and injunctive relief for alleged violations of the Texas Clean Air Act related to multiple emissions events at Equistar’s Bayport Plant.
In April 2022, the State of Texas filed suit against Equistar Chemicals, LP, in Travis County District Court seeking civil penalties and injunctive relief for alleged violations of the Texas Clean Air Act related to multiple emissions events at Equistar’s Bayport Plant. In October 2023, we came to an agreement with the State to resolve the matter for $1.5 million.
The matters below are disclosed solely pursuant to that requirement and we do not believe that any of these proceedings will have a material impact on the Company’s Consolidated Financial Statements. In connection with an enforcement initiative of EPA regarding flare emissions at petrochemical plants, we have settled with EPA and the U.S.
The matters below are disclosed solely pursuant to that requirement and we do not believe that any of these proceedings will have a material impact on the Company’s Consolidated Financial Statements.
Removed
Department of Justice in order to resolve claims initiated in July 2014, related to alleged improper operation and maintenance of flares at four of our U.S. facilities. The consent decree related to the settlement was entered by the U.S. District Court for the Southern District of Texas in January 2022.
Removed
Under the terms of the settlement, we paid a penalty of $3.4 million in January 2022 and will conduct fence line monitoring and make investments in equipment at the facilities. The consent decree was amended in September 2022 to include flares at an additional facility, including a penalty of $324,000 that we paid in October 2022.
Removed
In March 2018, the Cologne, Germany local court issued a regulatory fine notice of €1.8 million arising from a pipeline leak near our Wesseling, Germany facility.
Removed
We expect the Cologne prosecutor to issue a corresponding payment request, which will resolve the matter. 33 Table of Contents In February 2020, the State of Texas filed suit against Houston Refining, LP, a subsidiary of LyondellBasell, in Travis County District Court seeking civil penalties and injunctive relief for violations of the Texas Clean Air Act related to several emission events.
Removed
In July 2020, Harris County, Texas petitioned to intervene in the lawsuit and the State added additional claims to its petition relating to self-reported deviations of Houston Refining’s air operating permit. We are currently engaged in settlement negotiations to resolve the matter.
Removed
On July 27, 2021, approximately 160,000 pounds of liquid process material containing primarily acetic acid was released from a reactor at the La Porte acetic acid unit. In October 2021, the Texas Commission on Environmental Quality (“TCEQ”) issued a Notice of Enforcement for the incident.
Removed
In November 2021, the State of Texas filed a petition on behalf of the TCEQ seeking injunctive relief and civil penalties for unauthorized air pollution and regulatory nuisance related to the incident. We are currently engaged in settlement discussions with the State to resolve this matter.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph is presented pursuant to SEC rules and is not meant to be an indication of our future performance. 35 Table of Contents 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 LyondellBasell Industries N.V. $100.00 $78.31 $93.50 $95.97 $100.84 $99.85 S&P 500 Index $100.00 $95.62 $125.72 $148.85 $191.58 $156.88 S&P 500 Chemicals Index $100.00 $88.39 $107.85 $127.31 $160.30 $142.24 Issuer Purchases of Equity Securities On May 27, 2022, our shareholders approved a share repurchase authorization of up to 34,026,947 of our ordinary shares, through November 27, 2023, which superseded any prior repurchase authorizations.
Biggest changeThe graph is presented pursuant to SEC rules and is not meant to be an indication of our future performance. 37 Table of Conte nts 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 LyondellBasell Industries N.V. $100.00 $119.41 $122.56 $128.77 $127.51 $153.91 S&P 500 Index $100.00 $131.49 $155.68 $200.37 $164.08 $207.21 S&P 500 Chemicals Index $100.00 $122.01 $144.03 $181.35 $160.92 $178.69 Issuer Purchases of Equity Securities On May 19, 2023, our shareholders approved a proposal to authorize us to repurchase up to 34.0 million ordinary shares, through November 19, 2024, which superseded any prior repurchase authorizations.
The graph below shows the relative investment performance of LyondellBasell Industries N.V. shares, the S&P 500 Index and the S&P 500 Chemicals Index since December 31, 2017. The graph assumes that $100 was invested on December 31, 2017 and any dividends paid were reinvested at the date of payment.
The graph below shows the relative investment performance of LyondellBasell Industries N.V. shares, the S&P 500 Index and the S&P 500 Chemicals Index since December 31, 2018. The graph assumes that $100 was invested on December 31, 2018 and any dividends paid were reinvested at the date of payment.
Holders As of February 21, 2023, there were approximately 5,200 record holders of our shares, including Cede & Co. as nominee of the Depository Trust Company. Equity Compensation Plan See Part III, Item 11. Executive Compensation for information relating to the Company’s equity compensation plans.
Holders As of February 20, 2024, there were approximately 5,000 record holders of our shares, including Cede & Co. as nominee of the Depository Trust Company. Equity Compensation Plan See Part III, Item 11. Executive Compensation for information relating to the Company’s equity 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. Item 6. Reserved 36 Table of Contents
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 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, Millions of dollars 2022 2021 Sales and other operating revenues: O&P-Americas $ 13,935 $ 15,002 O&P-EAI 12,823 13,490 I&D 12,950 10,180 APS 5,231 5,145 Refining 11,893 8,002 Technology 693 843 Other, including segment eliminations (7,074) (6,489) Total $ 50,451 $ 46,173 Operating income (loss): O&P-Americas $ 2,082 $ 4,552 O&P-EAI 14 1,228 I&D 1,604 967 APS 201 286 Refining 889 (696) Technology 331 471 Other, including segment eliminations (20) (35) Total $ 5,101 $ 6,773 Depreciation and amortization: O&P-Americas $ 582 $ 578 O&P-EAI 166 197 I&D 332 379 APS 109 117 Refining 39 79 Technology 39 43 Total $ 1,267 $ 1,393 Income (loss) from equity investments: O&P-Americas $ 98 $ 115 O&P-EAI (68) 313 I&D (25) 34 APS — (1) Total $ 5 $ 461 40 Table of Contents Year Ended December 31, Millions of dollars 2022 2021 Other (expense) income, net: O&P-Americas $ (28) $ 28 O&P-EAI — 11 I&D (39) (2) APS 2 7 Refining (7) (7) Technology (4) — Other, including intersegment eliminations 4 25 Total $ (72) $ 62 EBITDA: O&P-Americas $ 2,734 $ 5,273 O&P-EAI 112 1,749 I&D 1,872 1,378 APS 312 409 Refining 921 (624) Technology 366 514 Other, including intersegment eliminations (16) (10) Total $ 6,301 $ 8,689 Olefins and Polyolefins-Americas Segment Overview —EBITDA decreased in 2022 relative to 2021 primarily driven by lower olefins margins.
Biggest changeRevenues and the components of EBITDA for the periods presented are reflected in the tables below for our reportable segments: Year Ended December 31, Millions of dollars 2023 2022 Sales and other operating revenues: O&P-Americas $ 11,280 $ 14,480 O&P-EAI 10,479 13,455 I&D 11,086 12,950 APS 3,698 4,202 Refining 9,714 11,893 Technology 663 693 Other, including segment eliminations (5,813) (7,222) Total $ 41,107 $ 50,451 Operating income (loss): O&P-Americas $ 1,665 $ 2,206 O&P-EAI (160) 75 I&D 1,262 1,604 APS (261) 16 Refining 221 889 Technology 334 331 Other, including segment eliminations (8) (20) Total $ 3,053 $ 5,101 Depreciation and amortization: O&P-Americas $ 587 $ 591 O&P-EAI 207 171 I&D 443 332 APS 98 95 Refining 158 39 Technology 41 39 Total $ 1,534 $ 1,267 Income (loss) from equity investments: O&P-Americas $ 49 $ 98 O&P-EAI (55) (68) I&D (13) (25) APS (1) — Total $ (20) $ 5 43 Table of Conte nts Year Ended December 31, Millions of dollars 2023 2022 Other (expense) income, net: O&P-Americas $ 2 $ (30) O&P-EAI (1) — I&D (13) (39) APS 2 4 Refining — (7) Technology — (4) Other, including intersegment eliminations (48) 4 Total $ (58) $ (72) EBITDA: O&P-Americas $ 2,303 $ 2,865 O&P-EAI (9) 178 I&D 1,679 1,872 APS (162) 115 Refining 379 921 Technology 375 366 Other, including intersegment eliminations (56) (16) Total $ 4,509 $ 6,301 Olefins and Polyolefins-Americas Segment Overview —EBITDA decreased in 2023 relative to 2022 primarily driven by lower polyolefin margins.
In calculating the impact of margin and volume on EBITDA, consistent with industry practice, management offsets revenues and volumes related to ethylene co-products against the cost to produce ethylene. Volume and price impacts of ethylene co-products are reported in margin.
In calculating the impact of margin and volume on EBITDA, consistent with industry practice, management offsets revenues and volumes related to ethylene co-products against the cost to produce ethylene. Volume and price impacts of ethylene co-products are reported in margin.
Debt repayment, and the purchase of shares under our share repurchase authorization, may be funded from cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt, or a combination thereof.
Debt repayment, and the purchase of shares under our share repurchase authorization, may be funded from cash and cash equivalents, cash from short-term investments, cash from operating activities, proceeds from the issuance of debt, or a combination thereof.
Intersegment eliminations and items that are not directly related or allocated to business operations, such a s foreign exchange gains (losses) and components of pension and other post-retirement benefit costs other than service cost, are included in “Other.” For additional information related to our operating segments, as well as a reconciliation of EBITDA to its nearest generally accepted accounting principles (“GAAP”) measure, Income from continuing operations before income taxes, see Note 20 to our Consolidated Financial Statements.
Intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains (losses) and components of pension and other post-retirement benefit costs other than service cost, are included in “Other.” For additional information related to our operating segments, as well as a reconciliation of EBITDA to its nearest generally accepted accounting principles (“GAAP”) measure, Income from continuing operations before income taxes, see Note 21 to our Consolidated Financial Statements.
Due to the compositions of our LIFO pools, changes in market prices from period-to-period do not necessarily correlate with LCM charges. Additionally, an LCM condition may arise due to a volumetric or price decline in a particular material that had previously provided a positive impact within a pool.
Due to the compositions of our LIFO pools, changes in market prices of the materials within the pool from period-to-period do not necessarily correlate with LCM charges. An LCM condition may arise due to a volumetric or price decline in a particular material that had previously provided a positive impact within a pool.
These purchase arrangements include provisions which state minimum purchase quantities; however, in the event we do not take the contractual minimum volumes, we are obligated to compensate the vendor only for any resulting economic losses they suffer. No material fees were paid to vendors for such losses in 2022.
These purchase arrangements include provisions which state minimum purchase quantities; however, in the event we do not take the contractual minimum volumes, we are obligated to compensate the vendor only for any resulting economic losses they suffer. No material fees were paid to vendors for such losses in 2023.
The following table reflects the sensitivity of the benefit obligations and the net periodic benefit costs of our pension plans to changes in the actuarial assumptions: Effects on Benefit Obligations in 2022 Effects on Net Periodic Pension Costs in 2023 Millions of dollars U.S. Non-U.S. U.S. Non-U.S.
The following table reflects the sensitivity of the benefit obligations and the net periodic benefit costs of our pension plans to changes in the actuarial assumptions: Effects on Benefit Obligations in 2023 Effects on Net Periodic Pension Costs in 2024 Millions of dollars U.S. Non-U.S. U.S. Non-U.S.
Such estimates are consistent with those used in our financial planning and business performance reviews. When an income approach is used to estimate fair value of our long-lived assets, the cash flows are discounted using a rate that is based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk.
Such estimates are consistent with those used in our financial planning and business performance reviews. 53 Table of Conte nts When an income approach is used to estimate fair value of our long-lived assets, the cash flows are discounted using a rate that is based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk.
Share Repurchases In May 2022, our shareholders approved a proposal to authorize us to repurchase up to 34.0 million ordinary shares, through November 27, 2023, 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.
Share Repurchases In May 2023, our shareholders approved a proposal to authorize us to repurchase up to 34.0 million ordinary shares, through November 19, 2024, 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.
Our assumed discount rate is based on yield information for high-quality corporate bonds with durations comparable to the expected cash settlement of our obligations. For the purpose of measuring the benefit obligations at December 31, 2022, we used a weighted average discount rate of 5.50% for the U.S. plans, which reflects the different terms of the related benefit obligations.
Our assumed discount rate is based on yield information for high-quality corporate bonds with durations comparable to the expected cash settlement of our obligations. For the purpose of measuring the benefit obligations at December 31, 2023, we used a weighted average discount rate of 5.80% for the U.S. plans, which reflects the different terms of the related benefit obligations.
Inherent in such policies are certain key assumptions and estimates made by management and updated periodically based on its latest assessment of the current and projected business and general economic environment. Management believes the following accounting policies and estimates, and the judgments and uncertainties affecting them, are critical in understanding our reported operating results and financial condition.
Inherent in such policies are certain key assumptions and estimates made by management and updated periodically based on its latest assessment of the current and projected business and general economic environment. 52 Table of Conte nts Management believes the following accounting policies and estimates, and the judgments and uncertainties affecting them, are critical in understanding our reported operating results and financial condition.
As indicated above, 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.
As indicated above, 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 market prices recover.
The discussion summarizing the significant factors affecting the results of operations and financial condition for the year ended December 31, 2020 and for the year ended December 31, 2021 compared to 2020 have been excluded from this Form 10-K and can be found in Part II, “Item 7.
The discussion summarizing the significant factors affecting the results of operations and financial condition for the year ended December 31, 2021 and for the year ended December 31, 2022 compared to 2021 has been excluded from this Form 10-K and can be found in the update to Part II, “Item 7.
Ethylene Raw Materials —In Europe, naphtha is the primary raw material for our ethylene production and represents approximately 70% of the raw materials used in 2022 and 2021. The following table sets forth selected financial information for the O&P-EAI segment including Income from equity investments, which is a component of EBITDA.
Ethylene Raw Materials —In Europe, naphtha is the primary raw material for our ethylene production and represents approximately 65% to 70% of the raw materials used in 2023 and 2022. The following table sets forth selected financial information for the O&P-EAI segment including Loss from equity investments, which is a component of EBITDA.
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 2022, we purchased 4.4 million shares under our share repurchase authorization for $406 million.
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 2023, we purchased 2.3 million shares under our share repurchase authorization for $211 million.
The weighted average expected long-term rate of return on assets in our non-U.S. plans of 1.85% is based on expectations and asset allocations that vary by region. The asset allocations are summarized in Note 14 to the Consolidated Financial Statements.
The weighted average expected long-term rate of return on assets in our non-U.S. plans of 3.57% is based on expectations and asset allocations that vary by region. The asset allocations are summarized in Note 15 to the Consolidated Financial Statements.
As of December 31, 2022, the assumed rate of increase for our U.S. plans was 6.5%, decreasing to 4.5% in 2031 and thereafter. 52 Table of Contents The net periodic benefit cost of pension benefits included in expense is affected by the expected long-term rate of return on plan assets assumption.
As of December 31, 2023, the assumed rate of increase for our U.S. plans was 6.3%, decreasing to 4.5% in 2031 and thereafter. 55 Table of Conte nts The net periodic benefit cost of pension benefits included in expense is affected by the expected long-term rate of return on plan assets assumption.
The weighted average discount rate used to measure obligations for non-U.S. plans at December 31, 2022, was 3.99%, reflecting market interest rates. The discount rates in effect at December 31, 2022 will be used to measure net periodic benefit cost during 2023.
The weighted average discount rate used to measure obligations for non-U.S. plans at December 31, 2023, was 4.00%, reflecting market interest rates. The discount rates in effect at December 31, 2023 will be used to measure net periodic benefit cost during 2024.
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. At December 31, 2022, we had $200 million of outstanding commercial paper, net of discount, and no borrowings or letters of credit outstanding under this facility; and • $794 million under our $900 million U.S.
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. At December 31, 2023, we had no outstanding borrowings of commercial paper, and no borrowings or letters of credit outstanding under this facility; and • $900 million under our $900 million U.S. Receivables Facility.
We had total unused availability under our credit facilities of $3,844 million at December 31, 2022, which included the following: • $3,050 million under our $3,250 million Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program.
We had total unused availability under our credit facilities of $4,150 million at December 31, 2023, which included the following: • $3,250 million under our $3,250 million Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program.
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. 54 Table of Contents
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. 57 Table of Conte nts
As of February 21, 2023, we had approximately 31.7 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.
As of February 20, 2024, we had approximately 33.1 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.
Feedstock and energy related costs generally represent approximately 70% to 80% of cost of sales, other variable costs account for approximately 10% of cost of sales on an annual basis and fixed operating costs, consisting primarily of expenses associated with employee compensation, depreciation and amortization, and maintenance, range from approximately 10% to 20% in each annual period.
On an annual basis, feedstock and energy related costs generally represent approximately 70% to 80% of cost of sales. Other variable costs account for approximately 10% of cost of sales and fixed operating costs, consisting primarily of expenses associated with employee compensation, depreciation and amortization, and maintenance, account for the remainder.
For more information regarding our debt arrangements, lease obligations, pension and other post-retirement benefits and income taxes, see Notes 11, 12, 14 and 16 to the Consolidated Financial Statements, respectively.
For more information regarding our debt arrangements, lease obligations, pension and other post-retirement benefits and income taxes, see Notes 12, 13, 15 and 17 to the Consolidated Financial Statements, respectively.
Comprehensive Income— Comprehensive income decreased by $1,437 million in 2022 compared to 2021, primarily due to a decrease in net income. The activities from the remaining components of Comprehensive income are discussed below.
Comprehensive Income— Comprehensive income decreased by $2,303 million in 2023 compared to 2022, primarily due to a decrease in net income. The activities from the remaining components of Comprehensive income are discussed below.
Projected benefit obligations at December 31, 2022 $ 153 $ 41 $ — $ — Projected net periodic benefit costs in 2023 — — (2) 2 Discount rate increases by 100 basis points (11) (8) — (1) Discount rate decreases by 100 basis points 12 8 1 1 Additional information on the key assumptions underlying these benefit costs appears in Note 14 to the Consolidated Financial Statements. 53 Table of Contents Accruals for Taxes Based on Income —The determination of our provision for income taxes and the calculation of our tax benefits and liabilities is subject to management’s estimates and judgments due to the complexity of the tax laws and regulations in the tax jurisdictions in which we operate.
Projected benefit obligations at December 31, 2023 $ 142 $ 39 $ — $ — Projected net periodic benefit costs in 2024 — — (1) 2 Discount rate increases by 100 basis points (10) (7) (1) (1) Discount rate decreases by 100 basis points 11 7 1 — Additional information on the key assumptions underlying these benefit costs appears in Note 15 to the Consolidated Financial Statements. 56 Table of Conte nts Accruals for Taxes Based on Income —The determination of our provision for income taxes and the calculation of our tax benefits and liabilities is subject to management’s estimates and judgments due to the complexity of the tax laws and regulations in the tax jurisdictions in which we operate.
Upon settlement of these foreign currency contracts, we paid €500 million ($501 million at the expiry spot rate) to our counterparties and received $614 million from our counterparties. In 2021, foreign currency contracts with an aggregate notional value of €300 million expired.
Upon settlement of these foreign currency contracts, we paid €750 million ($820 million at the expiry spot rate) to our counterparties and received $903 million from our counterparties. In 2022, foreign currency contracts with an aggregate notional value of €500 million expired.
See Notes 13, 14 and 18 to our Consolidated Financial Statements for further discussions. 39 Table of Contents Segment Analysis We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (“EBITDA”) as our measure of profitability for segment reporting purposes.
See Notes 14, 15 and 19 to the Consolidated Financial Statements for further discussions. 41 Table of Conte nts Segment Analysis We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (“EBITDA”) as our measure of profitability for segment reporting purposes.
Impairments —During 2022 we recognized a non-cash impairment charge of $69 million related to the sale of our Australian polypropylene manufacturing facility. During 2021 we recognized a non-cash impairment charge of $624 million related to our Houston refinery.
During 2022 we recognized a non-cash impairment of $69 million related to the sale of our Australian polypropylene manufacturing facility.
For purposes of impairment evaluation, long-lived assets including finite-lived intangible assets must be grouped at the lowest level for which independent cash flows can be identified. 50 Table of Contents Significant judgment is involved in developing estimates of future cash flows since the results are based on forecasted financial information prepared using significant assumptions which may include, among other things, projected changes in supply and demand fundamentals (including industry-wide capacity, our planned utilization rate and end-user demand), new technological developments, capital expenditures, new competitors with significant raw material or other cost advantages, changes associated with world economies, the cyclical nature of the chemical and refining industries, uncertainties associated with governmental actions and other economic conditions.
Significant judgment is involved in developing estimates of future cash flows since the results are based on forecasted financial information prepared using significant assumptions which may include, among other things, projected changes in supply and demand fundamentals (including industry-wide capacity, our planned utilization rate and end-user demand), new technological developments, capital expenditures, new competitors with significant raw material or other cost advantages, changes associated with world economies, the cyclical nature of the chemical and refining industries, uncertainties associated with governmental actions and other economic conditions.
See Note 4 to the Consolidated Financial Statements for additional related party disclosures. 49 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management applies those accounting policies that it believes best reflect the underlying business and economic events, consistent with accounting principles generally accepted in the U.S., see Note 2 to the Consolidated Financial Statements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management applies those accounting policies that it believes best reflect the underlying business and economic events, consistent with accounting principles generally accepted in the U.S., see Note 2 to the Consolidated Financial Statements.
RELATED PARTY TRANSACTIONS We have related party transactions with our joint venture partners. We believe that such transactions are effected on terms substantially no more or less favorable than those that would have been agreed upon by unrelated parties on an arm’s length basis.
RELATED PARTY TRANSACTIONS We have related party transactions with our joint venture partners. We believe that such transactions are effected on terms substantially no more or less favorable than those that would have been agreed upon by unrelated parties on an arm’s length basis. See Note 5 to the Consolidated Financial Statements for additional related party disclosures.
For 2022 and 2021, management performed a qualitative impairment assessment of our reporting units, which indicated that it was more likely than not that the fair value of our reporting units was greater than their carrying value including goodwill. Accordingly, a quantitative goodwill impairment test was not required, and no goodwill impairment was recognized in 2022 or 2021.
During the fourth quarter of 2022, management performed a qualitative impairment assessment of our reporting units, which indicated that it was more likely than not that the fair value of our reporting units was greater than their carrying value including goodwill. Accordingly, a quantitative goodwill impairment test was not required.
Accordingly, interim LIFO calculations are based on our estimates of expected inventory levels and costs at the end of the year.
Accordingly, interim LIFO calculations are based on our estimates of expected inventory levels and costs at the end of the year. LIFO value is measured at the total pool level.
In 2022 and 2021, approximately 70% and 60%, respectively, of the raw materials used in our North American crackers was ethane. 41 Table of Contents 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.
Ethane made up approximately 70% of the raw materials used in our North American crackers in 2023 and 2022. 44 Table of Conte nts 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.
Unfavorable foreign exchange impacts resulted in an EBITDA decrease of 11%. 45 Table of Contents FINANCIAL CONDITION Operating, investing and financing activities of continuing operations, which are discussed below, are presented in the following table: Year Ended December 31, Millions of dollars 2022 2021 Cash provided by (used in): Operating activities $ 6,119 $ 7,695 Investing activities (1,977) (1,502) Financing activities (3,407) (6,385) Operating Activities —Cash provided by operating activities of $6,119 million in 2022 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital–Accounts receivable, Inventories and Accounts payable.
Favorable foreign exchange impacts resulted in an EBITDA increase of 3%. 48 Table of Conte nts FINANCIAL CONDITION Operating, investing and financing activities of continuing operations, which are discussed below, are presented in the following table: Year Ended December 31, Millions of dollars 2023 2022 Cash provided by (used in): Operating activities $ 4,942 $ 6,119 Investing activities (1,777) (1,977) Financing activities (1,950) (3,407) Operating Activities —Cash provided by operating activities of $4,942 million in 2023 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital–Accounts receivable, Inventories and Accounts payable.
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 December 31, 2022 we had no borrowings or letters of credit outstanding under this 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 any time and from time to time, 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.
At December 31, 2023 we had no borrowings or letters of credit outstanding under this facility. 50 Table of Conte nts At any time and from time to time, 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.
The remaining goodwill at December 31, 2022 primarily represents the tax effect of the differences between the tax and book basis of our assets and liabilities resulting from the revaluation of those assets and liabilities to fair value in connection with the Company’s emergence from bankruptcy and fresh-start accounting in 2010.
Schulman Inc. in 2018 and the tax effect of the differences between the tax and book basis of our assets and liabilities resulting from the revaluation of those assets and liabilities to fair value in connection with the Company’s emergence from bankruptcy and fresh-start accounting in 2010.
Equity Method Investments Impairment —Investments in nonconsolidated entities accounted for under the equity method are assessed for impairment when there are indicators of a loss in value, such as a lack of sustained earnings capacity or a current fair value less than the investment’s carrying amount.
This discount rate is also compared to recent observable market transactions, if possible. Equity Method Investments Impairment —Investments in nonconsolidated entities accounted for under the equity method are assessed for impairment when there are indicators of a loss in value, such as a lack of sustained earnings capacity or a current fair value less than the investment’s carrying amount.
Financial derivatives designated as cash flow hedges, primarily our forward-starting interest rate swaps, led to an increase in Comprehensive income of $136 million in 2022 compared to 2021, due to periodic changes in the benchmark interest rates.
Financial derivatives designated as cash flow hedges, primarily our forward-starting interest rate swaps, led to a decrease in Comprehensive income of $288 million in 2023 compared to 2022, due to periodic changes in the benchmark interest rates combined with a decrease in notional outstanding.
Projected benefit obligations at December 31, 2022 $ 1,140 $ 1,276 $ — $ — Projected net periodic pension costs in 2023 — — 57 47 Discount rate increases by 100 basis points (94) (163) (7) (7) Discount rate decreases by 100 basis points 111 192 8 10 The sensitivity of our post-retirement benefit plans obligations and net periodic benefit costs to changes in actuarial assumptions are reflected in the following table: Effects on Benefit Obligations in 2022 Effects on Net Periodic Benefit Costs in 2023 Millions of dollars U.S.
Projected benefit obligations at December 31, 2023 $ 1,155 $ 1,363 $ — $ — Projected net periodic pension costs in 2024 — — 69 54 Discount rate increases by 100 basis points (95) (172) (7) (6) Discount rate decreases by 100 basis points 112 200 8 7 The sensitivity of our post-retirement benefit plans obligations and net periodic benefit costs to changes in actuarial assumptions are reflected in the following table: Effects on Benefit Obligations in 2023 Effects on Net Periodic Benefit Costs in 2024 Millions of dollars U.S.
Should our estimates and assumptions significantly change in future periods, it is possible that we may determine future impairment charges. An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the numerous assumptions, including pricing, volumes, discount rates, and market information provided by unrelated third parties that can materially affect our estimates.
An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the numerous assumptions, including pricing, volumes, discount rates, and market information provided by unrelated third parties that can materially affect our estimates. That is, unfavorable adjustments to some of the above listed assumptions may be offset by favorable adjustments in other assumptions.
Approximately 70% of the 2023 budget is planned for sustaining maintenance, with the remaining budget supporting profit-generating growth projects. 48 Table of Contents Cash Requirements from Contractual and Other Obligations As part of our ongoing operations, we enter into contractual arrangements that may require us to make future cash payments under certain circumstances.
Approximately half of our profit-generating growth project budget, or $400 million, is for projects that support our sustainability goals. Cash Requirements from Contractual and Other Obligations As part of our ongoing operations, we enter into contractual arrangements that may require us to make future cash payments under certain circumstances.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on February 24, 2022, of which Item 7 is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022 as reported in Exhibit 99.1 to the Current Report on form 8-K of the Company filed with the Securities and Exchange Commission on May 12, 2023 and is incorporated herein by reference.
Investing Activities —Capital expenditures in 2022 totaled $1,890 million compared to $1,959 million in 2021. Approximately 50% and 60% of our capital expenditures in 2022 and 2021, respectively, was for profit-generating growth projects, primarily our PO/TBA plant, with the remaining expenditures supporting sustaining maintenance. See Note 20 to the Consolidated Financial Statements for additional information regarding capital spending by segment.
Approximately 30% and 50% of our capital expenditures in 2023 and 2022, respectively, was for profit-generating growth projects, largely for our PO/TBA plant, with the remaining expenditures supporting sustaining maintenance. See Note 21 to the Consolidated Financial Statements for additional information regarding capital spending by segment. In 2023, foreign currency contracts with an aggregate notional value of €750 million expired.
In 2022, we received a return of collateral of $238 million related to the positions held with our counterparties for certain forward-starting interest rate swaps. In 2021, we prioritized debt reduction resulting in a $4 billion decrease in our outstanding long-term debt. For a detailed discussion of financing activities for 2021, see Note 11 to the Consolidated Financial Statements.
In 2022, we received a return of collateral of $238 million related to the positions held with our counterparties for certain forward-starting interest rate swaps. For additional information related to our swaps contracts, see Note 14 to the Consolidated Financial Statements.
Intermediates and Derivatives Segment Overview— EBITDA increased in 2022 compared to 2021, primarily driven by increased oxyfuels and related products margin, partially offset by decreases in margin for propylene oxide and derivatives and intermediate chemicals. The following table sets forth selected financial information for the I&D segment including Income from equity investments, which is a component of EBITDA.
Segment results were relatively unchanged as improvements in our oxyfuels and related products results were offset by lower margins for propylene oxide and derivatives and intermediate chemicals. The following table sets forth selected financial information for the I&D segment including Loss from equity investments, which is a component of EBITDA.
Year Ended December 31, Millions of dollars 2022 2021 Sales and other operating revenues $ 11,893 $ 8,002 EBITDA 921 (624) Thousands of barrels per day Heavy crude oil processing rates 238 231 Market margins, dollars per barrel Brent - 2-1-1 $ 33.62 $ 14.39 Brent - Maya differential 11.71 6.48 Total Maya 2-1-1 $ 45.33 $ 20.87 Revenues —Revenues increased by $3,891 million, or 49%, in 2022 compared to 2021.
Year Ended December 31, Millions of dollars 2023 2022 Sales and other operating revenues $ 9,714 $ 11,893 EBITDA 379 921 Thousands of barrels per day Heavy crude oil processing rates 237 238 Market margins, dollars per barrel Brent - 2-1-1 $ 25.71 $ 33.62 Brent - Maya differential 13.26 11.71 Total Maya 2-1-1 $ 38.97 $ 45.33 47 Table of Conte nts Revenues —Revenues decreased by $2,179 million, or 18%, in 2023 compared to 2022.
Year Ended December 31, Millions of dollars 2022 2021 Sales and other operating revenues $ 50,451 $ 46,173 Cost of sales 43,847 37,397 Impairments 69 624 Selling, general and administrative expenses 1,310 1,255 Research and development expenses 124 124 Operating income 5,101 6,773 Interest expense (287) (519) Interest income 29 9 Other (expense) income, net (72) 62 Income from equity investments 5 461 Income from continuing operations before income taxes 4,776 6,786 Provision for income taxes 882 1,163 Income from continuing operations 3,894 5,623 Loss from discontinued operations, net of tax (5) (6) Net income 3,889 5,617 Other comprehensive income (loss), net of tax – Financial derivatives 208 72 Unrealized losses on available-for-sale debt securities — (1) Defined benefit pension and other postretirement benefit plans 346 224 Foreign currency translations (123) (155) Total other comprehensive income, net of tax 431 140 Comprehensive income $ 4,320 $ 5,757 RESULTS OF OPERATIONS Revenues —Revenues increased $4,278 million, or 9%, in 2022 compared to 2021.
Year Ended December 31, Millions of dollars 2023 2022 Sales and other operating revenues $ 41,107 $ 50,451 Cost of sales 35,849 43,847 Impairments 518 69 Selling, general and administrative expenses 1,557 1,310 Research and development expenses 130 124 Operating income 3,053 5,101 Interest expense (477) (287) Interest income 129 29 Other expense, net (58) (72) (Loss) income from equity investments (20) 5 Income from continuing operations before income taxes 2,627 4,776 Provision for income taxes 501 882 Income from continuing operations 2,126 3,894 Loss from discontinued operations, net of tax (5) (5) Net income 2,121 3,889 Other comprehensive income (loss), net of tax – Financial derivatives (80) 208 Defined benefit pension and other postretirement benefit plans (97) 346 Foreign currency translations 73 (123) Total other comprehensive (loss) income, net of tax (104) 431 Comprehensive income $ 2,017 $ 4,320 RESULTS OF OPERATIONS Revenues —Revenues decreased by $9,344 million, or 19%, in 2023 compared to 2022.
Technology Segment Overview —The Technology segment recognizes revenues related to the sale of polyolefin catalysts and the licensing of chemical and polyolefin process technologies. These revenues are offset in part by the costs incurred in the production of catalysts, licensing and services activities and research and development (“R&D”) activities.
These revenues are offset in part by the costs incurred in the production of catalysts, licensing and services activities and research and development (“R&D”) activities. In 2023 and 2022, our Technology segment incurred approximately 50% to 55% of all R&D costs.
For additional information related to our share repurchase authorizations, see Note 18 to the Consolidated Financial Statements. Capital Budget In 2023, we are planning to invest approximately $1.6 billion in capital expenditures.
For additional information related to our share repurchase authorizations, see Note 19 to the Consolidated Financial Statements. Capital Budget In 2024, we are planning to invest approximately $2.1 billion in capital expenditures. Approximately 60% of the 2024 budget is planned for sustaining maintenance, with the remaining budget supporting profit-generating growth projects.
Average sales prices in 2022 were higher for many of our products as sales prices generally correlate with crude oil prices, which increased relative to 2021. These higher prices led to a 13% increase in revenue. Unfavorable foreign exchange impacts resulted in a 4% decrease in revenue.
Average sales prices in 2023 were lower for many of our products, as sales prices generally correlate with crude oil prices, which decreased relative to 2022. These lower prices led to a 21% decrease in revenue. Volume improvements resulted in a 1% increase in revenue, primarily driven by increased I&D sales volumes.
These increases were coupled with a decrease in exempt income in 2022 resulting in a 2% increase in the effective tax rate, partially offset by changes in pretax income in countries with varying statutory tax rates and fluctuations in uncertain tax positions of 2.1% and 1.8%, respectively. For additional information, see Note 16 to our Consolidated Financial Statements.
These increases were partially offset by decreases in the effective tax rate of 2.8% related to changes in pre-tax income in countries with varying statutory tax rates and 1.0% related to a patent box ruling received in the fourth quarter of 2023. For additional information, see Note 17 to the Consolidated Financial Statements.
As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment determination will prove to be an accurate prediction of the future. The Houston refinery’s estimated fair value was calculated using a market approach which utilized unobservable inputs, which generally consist of market information provided by unrelated third parties.
As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment determination will prove to be an accurate prediction of the future.
(“BLYB”) for impairment and concluded that our $345 million investment in BLYB is not impaired. However, certain circumstances beyond our control could change in the near-term resulting in the need to recognize a non-cash impairment in subsequent periods. 51 Table of Contents Goodwill —As of December 31, 2022, we had goodwill of $1,827 million.
In response to challenging market conditions in China, during 2023, we assessed our equity method investment in Bora LyondellBasell Petrochemical Co. Ltd. (“BLYB”) for impairment and concluded that our $231 million investment in BLYB is not impaired. However, certain circumstances beyond our control could change in the near-term resulting in the need to recognize a non-cash impairment in subsequent periods.
Additional information on the amount of goodwill allocated to our reporting units appears in Notes 7 and 20 to the Consolidated Financial Statements. We evaluate the recoverability of the carrying value of goodwill annually or more frequently if events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable.
That is, unfavorable adjustments to some of the above listed assumptions may be offset by favorable adjustments in other assumptions. We evaluate the recoverability of the carrying value of goodwill annually or more frequently if events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable.
Cost of Sales —Cost of sales increased $6,450 million, or 17%, in 2022 compared to 2021. This increase primarily related to higher feedstock and energy costs. Fluctuations in our cost of sales are generally driven by changes in feedstock and energy costs.
Favorable foreign exchange impacts resulted in a 1% increase in revenue. Cost of Sales —Cost of sales decreased by $7,998 million, or 18%, in 2023 compared to 2022. This decrease primarily related to lower feedstock and energy costs. Fluctuations in our cost of sales are generally driven by changes in feedstock and energy costs.
“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.
“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.
Income Taxes— Our effective income tax rates of 18.5% in 2022 and 17.1% in 2021 resulted in tax provisions of $882 million and $1,163 million, respectively.
The remaining increase was driven by higher cash balances during 2023. Income Taxes— Our effective income tax rates of 19.1% in 2023 and 18.5% in 2022 resulted in tax provisions of $501 million and $882 million, respectively.
Cash and Liquid Investments As of December 31, 2022, we had Cash and cash equivalents totaling $2,151 million, which includes $1,044 million in jurisdictions outside of the U.S., primarily held within the United Kingdom.
Cash and Liquid Investments As of December 31, 2023, we had Cash and cash equivalents totaling $3,390 million, which includes $1,816 million in jurisdictions outside of the U.S., primarily held within the European Union and the United Kingdom. There are currently no legal or economic restrictions that would materially impede our transfers of cash.
For additional information related to our share repurchases and dividend payments, see Note 18 to the Consolidated Financial Statements. In 2022 and 2021, we made net repayments of $4 million and $296 million, respectively, through the issuance and repurchase of commercial paper instruments under our commercial paper program.
Additionally, we repaid the $425 million remaining of outstanding principal on our 4.0% guaranteed notes due 2023. For details see Note 12 to the Consolidated Financial Statements. In 2023 and 2022, we made net repayments of $200 million and $4 million, respectively, through the issuance and repurchase of commercial paper instruments under our commercial paper program.
Year Ended December 31, Millions of dollars 2022 2021 Sales and other operating revenues $ 13,935 $ 15,002 Income from equity investments 98 115 EBITDA 2,734 5,273 Revenues —Revenues decreased by $1,067 million, or 7%, in 2022 compared to 2021.
Year Ended December 31, Millions of dollars 2023 2022 Sales and other operating revenues $ 10,479 $ 13,455 Loss from equity investments (55) (68) EBITDA (9) 178 Revenues —Revenues decreased by $2,976 million, or 22%, in 2023 compared to 2022.
There are currently no legal or economic restrictions that would materially impede our transfers of cash. 47 Table of Contents Credit Arrangements At December 31, 2022, we had total debt, including current maturities, of $11,321 million, and $227 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.
Credit Arrangements At December 31, 2023, we had total debt, including current maturities, of $11,232 million, and $171 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.
Assuming that contractual minimum volumes are purchased at contract prices as of December 31, 2022, these commitments represent approximately 20% of our annual Cost of sales with a weighted average remaining term of 7 years.
Assuming that contractual minimum volumes are purchased at contract prices as of December 31, 2023, these commitments represent approximately 20% of our annual Cost of sales with a weighted average remaining term of 7 years. 51 Table of Conte nts We also have purchase obligations under take-or-pay agreements which require us to either buy and take delivery of a minimum quantity of goods or to pay for any shortfall.
The net periodic benefit cost attributable to current periods is based on several assumptions about such future uncertainties and is sensitive to changes in those assumptions.
Long-Term Employee Benefit Costs —Our costs for long-term employee benefits, particularly pension and other post-retirement medical and life insurance benefits, are incurred over long periods of time, and involve many uncertainties over those periods. The net periodic benefit cost attributable to current periods is based on several assumptions about such future uncertainties and is sensitive to changes in those assumptions.
The decrease in Accounts payable was driven by lower production volumes as a result of lower operating rates. Cash provided by operating activities of $7,695 million in 2021 primarily reflected earnings adjusted for non-cash items and cash provided by the main components of working capital.
The increase in Accounts payable was primarily driven by higher feedstock and energy costs in our O&P-Americas segment. Cash provided by operating activities of $6,119 million in 2022 primarily reflected earnings adjusted for non-cash items and cash provided by the main components of working capital.
Year Ended December 31, Millions of dollars 2022 2021 Sales and other operating revenues $ 12,823 $ 13,490 (Loss) income from equity investments (68) 313 EBITDA 112 1,749 Revenues —Revenues decreased by $667 million, or 5%, in 2022 compared to 2021. Unfavorable foreign exchange impacts resulted in a revenue decrease of 8%.
Year Ended December 31, Millions of dollars 2023 2022 Sales and other operating revenues $ 11,086 $ 12,950 Loss from equity investments (13) (25) EBITDA 1,679 1,872 Revenues —Revenues decreased by $1,864 million, or 14%, in 2023 compared to 2022. Lower average sales prices resulted in a 20% decrease in revenue as a result of lower demand.
In 2022, a decrease in foreign currency translation losses led to an increase in Comprehensive income of $32 million compared to 2021, primarily due to continued strengthening of the U.S. dollar relative to the euro and the pre-tax gain from the effective portion of our net investment hedges in 2022.
Foreign currency translations increased Comprehensive income by $196 million in 2023 compared to 2022, primarily due to the weakening of the U.S. dollar relative to the euro and the British pound sterling in 2023, offset by the effective portion of our net investment hedges.
Refining Segment Overview —EBITDA increased in 2022 relative to 2021 primarily due to higher margins. 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.
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.
Unfavorable foreign exchange impacts resulted in a 10% decrease in revenue. Changes in average catalyst sales price resulted in a 2% increase in revenue. Higher catalyst volumes resulted in a 1% increase in revenue primarily driven by increased demand. EBITDA —EBITDA in 2022 decreased by $148 million, or 29%, compared to 2021.
Sales volumes declines resulted in a 2% decrease in revenue stemming from lower demand. Favorable foreign exchange impacts resulted in a revenue increase of 1%. EBITDA —EBITDA decreased in 2023 by $277 million, or 241%, compared to 2022.
We also have purchase obligations under take-or-pay agreements which require us to either buy and take delivery of a minimum quantity of goods or to pay for any shortfall. These arrangements primarily relate to product off-take agreements with joint ventures located in Poland . No material shortfall was paid for quantities not taken under these contracts in 2022.
These arrangements largely relate to product off-take agreements with a joint venture located in Poland . No material shortfall was paid for quantities not taken under these contracts in 2023.
By the end of 2023, we anticipate that our value enhancement program will achieve annual recurring Net income of approximately $115 million, which, after adding back income taxes and depreciation and amortization of approximately $25 million and $10 million, respectively, results in $150 million of EBITDA. We estimate costs of $150 million in 2023 to achieve this milestone.
Given its performance in 2023, we anticipate that our VEP will achieve a 2024 year-end annual run rate of approximately $445 million of Net income, which, after adding back income taxes and depreciation and amortization of approximately $110 million and $45 million, respectively, results in approximately $600 million of recurring annual EBITDA.
For the market approach, since quoted market prices are usually not available, we utilize market multiples of revenue and earnings derived from comparable publicly-traded industrial gases companies. In response to challenging market conditions in China, during 2022 we assessed our equity method investment in Bora LyondellBasell Petrochemical Co. Ltd.
For the market approach, since quoted market prices are usually not available, we utilize market multiples of revenue and earnings derived from comparable publicly-traded industrial gases companies. During the fourth quarter of 2023, a trend of adverse financial performance triggered an impairment analysis of our investment in our European PO joint venture.
When valued using a contract price as of December 31, 2022, these commitments represent approximately 5% of our annual Cost of sales with a weighted average remaining term of 14 years. CURRENT BUSINESS OUTLOOK In January 2023, demand from consumer packaging, oxyfuels and refining markets remained stable. Moderating energy and feedstock costs are providing some offsets to tepid global demand.
When valued using a contract price as of December 31, 2023, these commitments represent approximately 5% of our annual Cost of sales with a weighted average remaining term of 14 years. CURRENT BUSINESS OUTLOOK In the first quarter of 2024, seasonally slow demand and economic uncertainty provide headwinds for most businesses.
During 2022, we introduced our value enhancement program that is anticipated to generate approximately $575 million in recurring annual Net income improvement by the end of 2025, which, after adding back income taxes and depreciation and amortization of $140 million and $35 million, respectively, results in $750 million of EBITDA.
By the end of 2025, the VEP is expected to achieve a 2025 year-end annual run rate of up to $750 million in Net income improvement, which, after adding back income taxes and depreciation and amortization of $185 million and $65 million, respectively, results in up to $1 billion of recurring annual EBITDA.
Higher average sales prices resulted in a 11% increase in revenue as sales prices generally correlate with crude oil prices, which on average, increased compared to 2021. 42 Table of Contents EBITDA —EBITDA decreased by $1,637 million, or 94%, in 2022 compared to 2021. Lower polyolefin results led to a 39% decrease in EBITDA.
Lower average sales prices resulted in a 23% decrease in revenue as sales prices generally correlate with crude oil prices, which, on average, decreased compared to 2022. Lower volumes resulted in a revenue decrease of 1% primarily due to weak demand.
These decreases were partially offset by increases in Operating income for our Refining and I&D segments of $1,585 million and $637 million, respectively. Results for each of our business segments are discussed further in the Segment Analysis section below.
In 2023, Operating income decreased for our Refining, O&P-Americas, I&D, APS and O&P-EAI segments by $668 million, $541 million, $342 million, $277 million and $235 million, respectively. Operating income for our Technology segment increased by $3 million in 2023 compared to 2022. Results for each of our business segments are discussed further in the Segment Analysis section below.
Defined benefit pension and other postretirement benefit plans led to an increase in Comprehensive income of $122 million in 2022 compared to 2021, primarily resulting from changes in actuarial assumptions and pension settlements.
Defined benefit pension and other postretirement benefit plans led to a decrease in Comprehensive income of $443 million in 2023 compared to 2022, primarily due to actuarial losses resulting from lower-than-expected asset returns combined with the absence of pre-tax pension settlements in 2023.
Accordingly, our cost of sales and results of operations may be affected by such fluctuations. No LCM inventory valuation charges were recorded in 2022 or 2021, and we do not believe any of our inventory balance at year-end is at risk for impairment.
Accordingly, our cost of sales and results of operations may be affected by such fluctuations. We do not believe any of our inventory is at risk for impairment at this time, however as prices for our products and raw materials are inherently volatile and therefore no prediction can be given with certainty.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIn certain sales contracts, we may negotiate pricing terms to better align with changes in raw material costs. We also selectively enter commodity swap, option and futures contracts to manage commodity price risk. The impact of a 10% change in commodity prices at December 31, 2022 and 2021 would not materially impact the fair values of our commodity derivative contracts.
Biggest changeIn certain sales contracts, we may negotiate pricing terms to better align with changes in raw material costs. We also selectively enter commodity swap, option and futures contracts to manage commodity price risk.
Foreign Exchange Risk —We manufacture and market our products in many countries throughout the world and, as a result, are exposed to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar. Many of our operating entities use the euro as their functional currency. Translation adjustments are deferred in Accumulated other comprehensive income.
Foreign Exchange Risk —We manufacture and market our products in many countries throughout the world and, as a result, are exposed to changes in foreign currency exchange rates. Our reporting currency is the U.S. dollar. Many of our operating entities use the euro as their functional currency. Translation adjustments are deferred in Accumulated other comprehensive income (loss).
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. See Note 13 to the Consolidated Financial Statements for further discussion of our management of commodity price risk, foreign exchange risk and interest rate risk. Commodity Price Risk —Prices for our products and raw materials are subject to changes in supply and demand.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. See Note 14 to the Consolidated Financial Statements for further discussion of our management of commodity price risk, foreign exchange risk and interest rate risk. Commodity Price Risk —Prices for our products and raw materials are subject to changes in supply and demand.
We estimate that a 10% change in market interest rates as of December 31, 2022 and 2021, would change the fair value of these forward-starting interest rate swaps by approximately $23 million and $48 million, respectively. Fixed-rate debt —We enter into interest rate swaps that effectively convert our fixed-rate debt to variable-rate debt.
We estimate that a 10% change in market interest rates as of December 31, 2023 and 2022, would change the fair value of these forward-starting interest rate swaps by approximately $12 million and $23 million, respectively. Fixed-rate debt —We enter into interest rate swaps that effectively convert our fixed-rate debt to variable-rate debt.
A 10% fluctuation compared to the U.S. dollar would have resulted in an additional impact to earnings of approximately $17 million and $4 million in 2022 and 2021, respectively. Interest Rate Risk —We are exposed to interest rate risk with respect to our fixed-rate and variable-rate debt.
A 10% fluctuation compared to the U.S. dollar would have resulted in an additional impact to earnings of approximately $21 million and $17 million in 2023 and 2022, respectively. Interest Rate Risk —We are exposed to interest rate risk with respect to our fixed-rate and variable-rate debt.
By centralizing most of our foreign currency exposure into one subsidiary, we are able to take advantage of natural offsets thereby reducing the overall impact of changes in foreign currency rates on our earnings. 55 Table of Contents To minimize the effects of our net currency exchange exposures, we enter into forward exchange contracts and cross-currency swaps.
By centralizing most of our foreign currency exposure into one subsidiary, we are able to take advantage of natural offsets thereby reducing the overall impact of changes in foreign currency rates on our earnings. 58 Table of Conte nts To minimize the effects of our net currency exchange exposures, we enter into forward exchange contracts and cross-currency swaps.
Based on our average variable-rate debt outstanding per year, we estimate that a 10% change in market interest rates as of December 31, 2022 and 2021 would not materially impact the fair value of these facilities. 56 Table of Contents
Based on our average variable-rate debt outstanding per year, we estimate that a 10% change in market interest rates as of December 31, 2023 and 2022 would not materially impact the fair value of these facilities. 59 Table of Conte nts
These interest rate swaps are designated as fair value hedges. At December 31, 2022 and 2021, the total notional amount of these interest rate swaps was $2,164 million and $1,163 million , respectively.
These interest rate swaps are designated as fair value hedges. At December 31, 2023 and 2022, the total notional amount of these interest rate swaps was $2,171 million and $2,164 million , respectively.
Other (expense) income, net, in the Consolidated Statements of Income reflects net foreign currency losses of $14 million and $2 million in 2022 and 2021, respectively. As of December 31, 2022, our foreign currency contracts that are accounted for as economic hedges mature between January 2023 and September 2023, inclusively, and had an aggregate notional amount of $396 million.
Other (expense) income, net, in the Consolidated Statements of Income reflects net foreign currency losses of $34 million and $14 million in 2023 and 2022, respectively. As of December 31, 2023, our foreign currency contracts that are accounted for as economic hedges mature between January 2024 and January 2025, inclusively, and had an aggregate notional amount of $555 million.
At December 31, 2022, after giving consideration to the fixed-rate debt that we have effectively converted to variable-rate debt, approximately 81% of our debt portfolio, on a gross basis, incurred interest at a fixed-rate and the remaining 19% of the portfolio incurred interest at a variable-rate.
At December 31, 2023, after giving consideration to the fixed-rate debt that we have effectively converted to variable-rate debt, approximately 80% of our debt portfolio, on a gross basis, incurred interest at a fixed-rate and the remaining 20% of the portfolio incurred interest at a variable-rate.
The table below illustrates the impact on Other comprehensive loss of a 10% fluctuation in the foreign currency rate associated with the hedges at December 31: Notional Amount 10% Variance on Foreign Currency Rate Impact on Other Comprehensive Loss Millions of euro/dollars 2022 2021 2022 2021 Net investment hedges: Cross currency basis swaps € 617 € 617 euro/U.S. dollar rate $ 67 $ 71 Cross currency swaps € 750 € 750 euro/U.S. dollar rate $ 75 $ 92 Forward exchange contracts € 1,350 € 1,250 euro/U.S. dollar rate $ 138 $ 142 Cash flow hedges: Cross currency swaps € 1,052 € 1,051 euro/U.S. dollar rate $ 113 $ 134 Some of our consolidated entities enter transactions that are not denominated in their functional currency.
The table below illustrates the impact on other comprehensive income (loss) of a 10% fluctuation in the foreign currency rate associated with the hedges at December 31: Notional Amount 10% Variance on Foreign Currency Rate Impact on Other Comprehensive Loss Millions of euro/dollars 2023 2022 2023 2022 Net investment hedges: Cross currency basis swaps € 617 € 617 euro/U.S. dollar rate $ 70 $ 67 Cross currency swaps € 750 € 750 euro/U.S. dollar rate $ 81 $ 75 Forward exchange contracts € 1,550 € 1,350 euro/U.S. dollar rate $ 165 $ 138 Cash flow hedges: Cross currency swaps € 1,052 € 1,052 euro/U.S. dollar rate $ 117 $ 113 Some of our consolidated entities enter transactions that are not denominated in their functional currency.
Variable-rate debt —At December 31, 2022, our variable-rate debt consisted of $200 million outstanding under our Commercial Paper Program. We also have available borrowing capacity under our $3,250 million Senior Revolving Credit Facility and our $900 million U.S. Receivables Facility. At December 31, 2022, there were no outstanding borrowings under these facilities.
We also have available borrowing capacity under our $3,250 million Senior Revolving Credit Facility and our $900 million U.S. Receivables Facility. At December 31, 2023, there were no outstanding borrowings under these facilities.
We estimate that a 10% change in market interest rates as of December 31, 2022, would change the fair value of these interest rate swaps by approximately $35 million; while an equivalent change in market interest rates as of December 31, 2021, would not materially impact the fair value of these interest rate swaps.
We estimate that a 10% change in commodity prices as of December 31, 2023, would change the fair value of our commodity derivative contracts by approximately $36 million; while a 10% change in commodity prices as of December 31, 2022, would not materially impact the fair values of our commodity derivative contracts.
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We estimate that a 10% change in market interest rates as of December 31, 2023 and 2022, would change the fair value of these interest rate swaps by approximately $14 million and $35 million, respectively. Variable-rate debt —At December 31, 2023, we have no borrowings under our Commercial Paper Program.

Other LYB 10-K year-over-year comparisons