LyondellBasell Industries

Hello, and welcome to the Lyondell Bissell teleconference. At the request of Lyondell Bissell, this conference is being recorded for instant replay purposes. Following today's presentation, we will conduct a question and answer session. I'd now like to turn the conference over to Mr. David Kinney, Head of Investor Relations. Sir, you may begin.

Thank you, operator. Hello, and welcome to Lyondell Bissell's third quarter 2021 teleconference. I'm joined today by Bob Patel, our Chief Executive Officer, and Michael McMurray, our Chief Financial Officer. Before we begin the discussion, I would like to point out that a slide presentation accompanies today's call and is available on our website at www.LyondellBassell.com slash Investor Relations. Today, we will be discussing our business results while making reference to some forward-looking statements and non-GAAP financial measures. We believe the forward-looking statements are based upon reasonable assumptions and the alternative measures are useful to investors. Nonetheless, the forward-looking statements are subject to significant risk and uncertainty. We encourage you to learn more about the factors that can lead our actual results to differ by reviewing the cautionary statements in the presentation slides and our regulatory filings, which are also available at our investor website. Additional documents on our investor website provide reconciliations of non-GAAP financial measures to GAAP financial measures, together with other disclosures, including the earnings release. A recording of this call will be available by telephone beginning at 1 p.m. Eastern time today until November 30th by calling 877-660-6853 in the United States and 201-612-7415 outside the United States. The passcode for both numbers is 137-233-96. During today's call, we will focus on third quarter results, the current environment, our near-term outlook, and provide an update on our growth initiatives. Before turning the call over to Bob, I would like to call your attention to the non-cash, lower-up cost, or market inventory adjustments, or LCM, that we have discussed on past calls. These adjustments are related to our use of last in, first out, or LIFO accounting, and the volatility in prices for our raw material and finished goods inventories. During the third quarter of 2020, we recognized non-cash impairment of $582 million. that reflected our expectation for reduced profitability from our use in refinery. Comments made on this call will be in regard to our underlying business results, excluding the impacts of the refinery impairment and the LCM inventory adjustments. With that being said, I would now like to turn the call over to Bob.

Thank you, Dave. I'm pleased to join for my 28th and last earnings call as CEO of Lyondell Bazell. Per our usual practice, we will review our results from the quarter. As I prepare to leave the company at the end of the year, I've taken some time to reflect on the strong company we have built and our outlook for the future. Without a doubt, Lyondell Bazell's future is very bright. Because of the efforts of our incredibly talented and hardworking global team, we have built a company that has proven it can perform under a range of conditions. During an event like a global pandemic that no one could have predicted or imagined, We were able to fund our dividend with cash from operations and grow our company through accretive M&A. I'm confident that Lyondell Bazell will continue to deliver for its stakeholders in the future. This is a company that is focused on building value for the long term and one that is built to stand the test of time. With that said, let's review our third quarter results. Please turn to slide three. Blandell Bazell's businesses are continuing to benefit from robust global demand and tight market conditions. In the third quarter, our company delivered $5.25 per share of earnings, more than four times higher than the same quarter last year. EBITDA was approximately $2.7 billion, a year-over-year quarterly improvement of $1.8 billion. Efficient cash conversion generated $2.1 billion in cash from operating activities, a new quarterly record for our company. These results are indicative of strong markets, the discipline with which we approach running our business, and the increased earnings power from our value-driven investments and accretive growth over the past several years. We remain focused on improving Lionel Vazell's cash generation through all stages of the business cycle. Please turn to slide four to review our quarterly profitability. While our portfolio delivered $2.7 billion of EBITDA, this quarter's results reflect a sequential decline of 11 percent. Increased costs for natural gas, ethane, naphtha, and butane compressed margins for many products from the high seen in the second quarter. This, however, does not change how we see the future. We continue to see very solid demand for our products and remain highly constructive on the outlook for our businesses as global reopening continues to play out over the coming quarters. We expect the combination of a well-funded economy and pent-up consumer demand for durable goods, as well as the non-durable goods associated with travel, leisure, and other in-person activities, will continue to underpin attractive markets. In short, we remain confident that a reopening global economy and eventual normalization of global supply chains will support continued growth for our businesses over the coming quarters. Let's turn to slide five and review our safety performance. Our year-to-date total recordable incident rate for employees and contractors rose to 0.24 during the third quarter. Much of this increase is associated with the tragic incident at our Acetyls facility in La Porte, Texas during July. We remain committed to learning from this incident and incorporating the learnings from the investigations to help prevent such tragedies from ever happening again. Looking more closely at the chart, we are encouraged by the notable improvement in chemical industry safety performance during 2020. We are watching to see if this is a durable trend or perhaps a one-time benefit from reduced in-person work hours during the height of the pandemic. At Lyondell Vazell, continuous learning and a self-improving culture are key focus areas in our pursuit of goal zero safety performance for both our employees and our contractors. On slide six, I would like to highlight Lyondell Vazell's increased commitments to help address the global challenge of climate change. In late September, we announced accelerated targets and a goal to achieve net zero scope one and scope two greenhouse gas emissions from our global operations by 2050. We now aim to reduce absolute emissions from our global operations by 30% relative to a 2020 baseline. We plan to achieve these goals by advancing progress on several fronts. First, we are improving energy efficiency in all our plants and reducing our need for high carbon content fuel sources such as coal. We are already moving on this front. In September, we announced our plan to phase out coal from the power plant at our site in Wesseling, Germany. Second, we intend to procure at least 50% of our electricity from renewable sources by 2030. Third, we are focusing on minimizing flare emissions from our plants, particularly during shutdowns and startup events. In addition, we're evaluating a portfolio of technology options across the company's manufacturing footprint, including sustainable hydrogen, increased electrification, and carbon capture for storage or re-utilization in our processes. We believe this strategy puts us on an achievable pathway toward our net zero goal. In the near term, we do not expect significant increases in our overall capital budget as reduced spending associated with the completion of our POTBA project in 2022 will be offset by an increasing share of climate-related investment. With that, I will turn the call over to Michael, who will describe our financial and segment results in more detail.