Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

This discussion should be read in conjunction with the information contained in the Consolidated Financial Statements, and the accompanying notes elsewhere in this report. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell Industries N.V. together with its consolidated subsidiaries (“LyondellBasell N.V.”).

OVERVIEW

Results for the second quarter of 2024 improved compared to the first quarter of 2024. Second quarter volumes benefited from increased production and improving seasonal demand. Our Olefins and Polyolefins-Americas (“O&P-Americas”) segment volumes increased while favorable ethane and natural gas costs continued to provide support for margins. Our Olefins and Polyolefins-Europe, Asia, International (“O&P-EAI”) segment benefited from polyethylene margin expansion with increased utilization of advantaged liquified petroleum gas (“LPG”) feedstocks in Europe. Our Intermediates & Derivatives (“I&D”) segment benefited from improved oxyfuels volumes driven by production from our newest propylene oxide/tertiary butyl alcohol (“PO/TBA”) plant in Houston, Texas. Intermediate chemical margins and volumes improved, largely due to higher production from our acetyls assets. Refining margins fell due to lower crack spreads.

Results for the first six months of 2024 compared to the first six months of 2023 improved driven in part by the absence of a non-cash goodwill impairment recognized in our Advanced Polymer Solutions (“APS”) segment in the first quarter of 2023. Technology results improved as more contracts reached significant milestones. Results for our Refining segment decreased as margins declined. An increase in loss from equity investments drove the decrease in our O&P-EAI segment results. Our O&P-Americas segment results decreased as margins were compressed by higher monomer costs.

In May 2024, we divested our U.S. Gulf Coast-based Ethylene Oxide & Derivatives (“EO&D”) business for $700 million, while investing approximately $500 million to acquire a 35% interest in Saudi Arabia-based National Petrochemical Industrial Company (“NATPET”).

During the quarter, we announced a strategic review of some of our European assets to position the company for a more sustainable and circular future by strengthening profitability and competitive advantage in the region.

We remain committed to our balanced and disciplined capital allocation strategy. During the first six months of 2024 we generated $1,234 million in cash from operating activities, invested $967 million in capital expenditures and returned $921 million to shareholders through dividend payments and share repurchases.

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

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	10,558					$	9,925											$	20,483					$	20,553
Cost of sales			9,148						8,763												17,911						17,732
Impairments			—						—												—						252
Selling, general and administrative expenses			407						426												833						780
Research and development expenses			33						32												65						65
Operating income			970						704												1,674						1,724
Interest expense			(120)						(127)												(247)						(231)
Interest income			37						41												78						51
Gain on sale of business			293						—												293						—
Other income (expense), net			13						5												18						(2)
(Loss) income from equity investments			(19)						(27)												(46)						5
Income from continuing operations before income taxes			1,174						596												1,770						1,547
Provision for income taxes			249						122												371						355
Income from continuing operations			925						474												1,399						1,192
Loss from discontinued operations, net of tax			(1)						(1)												(2)						(3)
Net income			924						473												1,397						1,189
Other comprehensive income (loss), net of tax –
Financial derivatives			49						1												50						7
Defined benefit pension and other postretirement benefit plans			4						3												7						4
Foreign currency translations			(44)						(60)												(104)						28
Total other comprehensive income (loss), net of tax			9						(56)												(47)						39
Comprehensive income			$	933					$	417											$	1,350					$	1,228

RESULTS OF OPERATIONS

Revenues—Revenues increased by $633 million, or 6%, in the second quarter of 2024 compared to the first quarter of 2024. Higher volumes, driven by improved availability and demand, resulted in a 4% increase in revenues. Higher average sales prices for many of our products resulted in a 2% increase in revenues.

Revenues remained relatively unchanged in the first six months of 2024 compared to the first six months of 2023. Higher volumes resulted in a 1% increase in revenues, which was partially offset by a 1% decrease in revenues due to lower average sales prices.

Cost of Sales—Cost of sales increased by $385 million, or 4%, in the second quarter of 2024 compared to the first quarter of 2024 and by $179 million, or 1%, in the first six months of 2024 compared to the first six months of 2023, primarily driven by higher feedstock and energy costs, including the impact of our commodity hedges.

Impairments—During the first six months of 2023 we recognized a non-cash goodwill impairment charge of $252 million in our APS segment after the effect of moving our Catalloy and polybutene-1 businesses from our APS segment and reintegrating them into our O&P-Americas and O&P-EAI segments.

SG&A Expenses—Selling, general and administrative (“SG&A”) expenses decreased by $19 million, or 4%, in the second quarter of 2024 compared to the first quarter of 2024 and increased by $53 million, or 7%, in the first six months of 2024 compared to the first six months of 2023, primarily attributable to changes in employee-related expenses.

Operating Income—Operating income increased by $266 million, or 38%, in the second quarter of 2024 compared to the first quarter of 2024. Operating income in our I&D, O&P-Americas, O&P-EAI and APS segments increased by $180 million, $163 million, $41 million and $2 million, respectively. These increases were partially offset by decreases in our Refining and Technology segments of $81 million and $37 million, respectively.

Operating income decreased by $50 million, or 3%, in the first six months of 2024 compared to the first six months of 2023. Operating income in our Refining, I&D, O&P-EAI and O&P-Americas segments decreased by $216 million, $77 million, $56 million and $20 million, respectively. The decreases were partially offset by increases in our APS and Technology segments of $266 million and $50 million, respectively.

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

**Gain on Sale of Business—**In the second quarter of 2024, we completed the sale of our EO&D business and associated production facilities located in Bayport, Texas and recognized a pre-tax gain of $293 million. See Note 12 to the Consolidated Financial Statements for additional information.

(Loss) Income from Equity Investments—Loss from equity investments decreased by $8 million, or 30%, in the second quarter of 2024 compared to the first quarter of 2024 primarily driven by improved margins at our Asian joint ventures in our O&P-EAI segment.

Income from equity investments decreased by $51 million or 1020% in the first six months of 2024 compared to the first six months of 2023. Approximately half of the decrease was driven by lower margins at our Mexico joint venture in our O&P-Americas segment. The remainder of the change is primarily driven by a one-time gain on sale of an asset recognized by one of our European joint ventures in our O&P-EAI segment in the first quarter of 2023.

Income Taxes—Our effective income tax rate for the second quarter of 2024 was 21.2% compared to 20.4% for the first quarter of 2024. In the second quarter of 2024, the impact of changes in pre-tax income in countries with varying statutory tax rates and fluctuations in foreign exchange gains or losses increased our effective income tax rate by 2.0% and 0.9%, respectively. These increases were partially offset by the reduced relative impact of our tax rate drivers, primarily exempt income, due to increased earnings including the gain on the EO&D divestiture recognized in the second quarter of 2.1%.

Our effective income tax rate for the first six months of 2024 was 21.0% compared to 22.9% for the first six months of 2023. The lower effective tax rate for the first six months of 2024 was primarily due to the first quarter 2023 goodwill impairment, for which there was no tax benefit, of 2.8%, an audit settlement during the second quarter 2023 of 2.4%, and changes in foreign exchange gains or losses of 1.0%. These decreases were partially offset by a 4.1% increase in our effective income tax rate due to a decrease in exempt income.

Comprehensive Income—Comprehensive income increased by $516 million in the second quarter of 2024 compared to the first quarter of 2024, and by $122 million in the first six months of 2024 compared to the first six months of 2023, primarily due to the increase in Net income. The components of Other comprehensive income (loss) are discussed below.

Financial derivatives designated as cash flow hedges, primarily our commodity swaps, led to an increase in Comprehensive income of $48 million and $43 million in the second quarter of 2024 compared to the first quarter of 2024 and in the first six months of 2024 compared to the first six months of 2023, respectively, reflecting commodity price volatility.

Defined pension and postretirement benefit plans remained relatively unchanged in the second quarter of 2024 compared to the first quarter of 2024 and in the first six months of 2024 compared to the first six months of 2023.

Foreign currency translations remained relatively unchanged in the second quarter of 2024 compared to the first quarter of 2024. Foreign currency translations decreased Comprehensive income by $132 million in the first six months of 2024 compared to the first six months of 2023, primarily due to the strengthening of the U.S dollar relative to the euro offset by the effective portion of our net investment hedges.

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. This measure of segment operating results is used by our chief operating decision maker to assess the performance of and allocate resources to our operating segments. Intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains or losses and components of pension and other postretirement benefits other than service costs are included in “Other”. See the table below for a reconciliation of EBITDA to its nearest generally accepted accounting principles (“GAAP”) measure.

The following table presents the reconciliation of Net Income to EBITDA for each of the periods presented:

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Net income			$	924					$	473											$	1,397					$	1,189
Loss from discontinued operations, net of tax			1						1												2						3
Income from continuing operations			925						474												1,399						1,192
Provision for income taxes			249						122												371						355
Depreciation and amortization			387						365												752						787
Interest expense, net			83						86												169						180
EBITDA			$	1,644					$	1,047											$	2,691					$	2,514

Our continuing operations are managed through six reportable segments: O&P-Americas, O&P-EAI, I&D, APS, Refining and Technology. Revenues and other information by segment for the periods presented are reflected in the tables below:

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues:
O&P-Americas segment			$	2,926					$	2,871											$	5,797					$	5,535
O&P-EAI segment			2,842						2,745												5,587						5,621
I&D segment			2,795						2,586												5,381						5,344
APS segment			948						965												1,913						1,957
Refining segment			2,345						2,090												4,435						4,649
Technology segment			159						192												351						293
Other, including intersegment eliminations			(1,457)						(1,524)												(2,981)						(2,846)
Total			$	10,558					$	9,925											$	20,483					$	20,553
Operating income (loss):
O&P-Americas segment			$	519					$	356											$	875					$	895
O&P-EAI segment			30						(11)												19						75
I&D segment			392						212												604						681
APS segment			15						13												28						(238)
Refining segment			(57)						24												(33)						183
Technology segment			72						109												181						131
Other, including intersegment eliminations			(1)						1												—						(3)
Total			$	970					$	704											$	1,674					$	1,724

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Depreciation and amortization:
O&P-Americas segment			$	152					$	151											$	303					$	288
O&P-EAI segment			54						52												106						95
I&D segment			103						100												203						227
APS segment			22						20												42						46
Refining segment			46						31												77						110
Technology segment			10						11												21						21
Total			$	387					$	365											$	752					$	787

(Loss) income from equity investments:
O&P-Americas segment			$	(1)					$	9											$	8					$	35
O&P-EAI segment			(16)						(32)												(48)						(18)
I&D segment			(2)						(4)												(6)						(11)
APS segment			—						—												—						(1)
Total			$	(19)					$	(27)											$	(46)					$	5
Gain on sale of business:
I&D segment			$	293					$	—											$	293					$	—
Total			$	293					$	—											$	293					$	—
Other income (expense), net:
O&P-Americas segment			$	—					$	5											$	5					$	2
O&P-EAI segment			2						5												7						9
I&D segment			8						4												12						1
APS segment			3						2												5						1
Refining segment			4						—												4						—
Technology segment			2						(2)												—						—
Other, including intersegment eliminations			(6)						(9)												(15)						(15)
Total			$	13					$	5											$	18					$	(2)
EBITDA:
O&P-Americas segment			$	670					$	521											$	1,191					$	1,220
O&P-EAI segment			70						14												84						161
I&D segment			794						312												1,106						898
APS segment			40						35												75						(192)
Refining segment			(7)						55												48						293
Technology segment			84						118												202						152
Other, including intersegment eliminations			(7)						(8)												(15)						(18)
Total			$	1,644					$	1,047											$	2,691					$	2,514

Olefins and Polyolefins-Americas Segment

Overview—EBITDA increased in the second quarter of 2024 compared to the first quarter of 2024, primarily due to improved olefins results. EBITDA decreased in the first six months of 2024 relative to the first six months of 2023 driven by lower polymer margins.

*Ethylene Raw Materials—*Ethylene and its co-products are produced from two major raw material groups:

*•*natural gas liquids (“NGLs”), principally ethane and propane, the prices of which are generally affected by natural gas prices; and

• crude oil-based liquids (“liquids” or “heavy liquids”), including naphtha, condensates and gas oils, the prices of which are generally related to crude oil prices.

We have flexibility to vary the raw material mix and process conditions in our U.S. olefins plants in order to maximize profitability as market prices fluctuate for both feedstocks and products. Although prices of crude-based liquids and natural gas liquids are generally related to crude oil and natural gas prices, during specific periods the relationships among these materials and benchmarks may vary significantly. In the second and first quarter of 2024, and the first six months of 2024 and 2023, approximately 70% to 80% of the raw materials used in our North American crackers was ethane.

The following table sets forth selected financial information for the O&P-Americas segment including (Loss) income from equity investments, which is a component of EBITDA:

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,926					$	2,871											$	5,797					$	5,535
(Loss) income from equity investments			(1)						9												8						35
EBITDA			670						521												1,191						1,220

Revenue—Revenues for our O&P-Americas segment increased by $55 million, or 2% in the second quarter of 2024 compared to the first quarter of 2024 and by $262 million, or 5%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Revenue increased by 5% as a result of higher ethylene average sales prices driven by an increase in demand. Lower co-product sales volumes driven by planned outages led to a 3% decrease in revenue.

First six months of 2024 versus first six months of 2023—Higher average polypropylene sales prices resulted in a 5% increase in revenue.

EBITDA—EBITDA increased by $149 million, or 29%, in the second quarter of 2024 compared to the first quarter of 2024 and decreased by $29 million, or 2%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Higher olefins results led to a 21% increase in EBITDA driven equally by higher volumes and margins resulting from the absence of planned and unplanned outages and higher ethylene prices, respectively. Higher polyolefins results led to a 7% increase in EBITDA primarily driven by an increase in margins due to increased polyethylene pricing despite higher ethylene costs and increased polypropylene spreads driven by lower propylene costs.

First six months of 2024 versus first six months of 2023—Lower polyolefins results led to a 6% decrease in EBITDA primarily driven by lower margins reflecting higher monomer costs. EBITDA decreased 2% due to lower income from equity investments reflecting lower polypropylene margins at our joint venture in Mexico. Higher olefins results led to a 9% increase in EBITDA primarily due to higher margins driven by higher average ethylene sales prices and lower feedstock and energy costs.

Olefins and Polyolefins-Europe, Asia, International Segment

Overview—EBITDA increased in the second quarter of 2024 compared to the first quarter of 2024, primarily due to higher olefins margins and improved results from our equity investments. EBITDA decreased in the first six months of 2024 relative to the first six months of 2023 primarily due to losses from equity investments.

Ethylene Raw Materials—In Europe, naphtha is the primary raw material for our ethylene production and represented approximately 60% to 65% of the raw materials used in the second and first quarter of 2024, and in the first six months of 2024 and 2023.

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:

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,842					$	2,745											$	5,587					$	5,621
Loss from equity investments			(16)						(32)												(48)						(18)
EBITDA			70						14												84						161

Revenue—Revenues increased by $97 million, or 4%, in the second quarter of 2024 compared to the first quarter of 2024 and decreased by $34 million, or 1%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Higher average sales prices resulted in a 3% increase in revenue as sales prices generally correlate with crude oil prices, which on average, increased compared to the first quarter of 2024. Higher volumes resulted in a revenue increase of 2% primarily due to an increase in demand. Unfavorable foreign exchange impacts resulted in a revenue decrease of 1%.

First six months of 2024 versus first six months of 2023—Lower average sales prices resulted in a decrease of 2% due to lower polyethylene demand. Higher volumes resulted in an increase of 1% due to the absence of planned and unplanned downtime.

EBITDA—EBITDA increased by $56 million, or 400%, in the second quarter of 2024 compared to the first quarter of 2024 and decreased by $77 million, or 48%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Higher olefins results led to a 264% increase in EBITDA primarily driven by higher margins as a result of higher ethylene prices and lower costs of ethylene production driven by an increased use of advantaged feedstocks. Improved results from our equity investments led to an increase in EBITDA of 100% mainly attributable to improved margins at our Asian joint ventures.

First six months of 2024 versus first six months of 2023—Losses from our equity investments led to a decline in EBITDA of 19% primarily driven by the absence of a gain on sale of asset recognized by one of our joint ventures in Europe in the first quarter of 2023.

Intermediates and Derivatives Segment

Overview—EBITDA increased in the second quarter of 2024 compared to the first quarter of 2024, and in the first six months of 2024 compared to the first six months of 2023 primarily due to recognition of a gain on the sale of the EO&D business. Higher volumes for oxyfuels and related products and intermediate chemicals further contributed to the increase in EBITDA in the second quarter of 2024 compared to the first quarter of 2024.

The following table sets forth selected financial information for the I&D segment including Loss from equity investments, which is a component of EBITDA:

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,795					$	2,586											$	5,381					$	5,344
Loss from equity investments			(2)						(4)												(6)						(11)
EBITDA			794						312												1,106						898

Revenue—Revenues increased by $209 million, or 8%, in the second quarter of 2024 compared to the first quarter of 2024 and by $37 million, or 1%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Sales volumes increased due to the absence of unplanned downtime resulting in a 10% increase in revenue. Lower average sales prices resulted in a 2% decrease in revenue driven primarily by MTBE blend premiums reflecting increased market supply.

First six months of 2024 versus first six months of 2023—Sales volumes increased resulting in a 4% increase in revenue due to additional PO/TBA production. Lower average sales prices resulted in a 3% decrease in revenue driven by oxyfuels and related products as a result of lower gasoline crack spreads.

EBITDA—EBITDA increased by $482 million, or 154%, in the second quarter of 2024 compared to the first quarter of 2024 and by $208 million, or 23%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—In the second quarter of 2024 we recognized a $293 million gain on the sale of our EO&D business which resulted in a 94% increase in EBITDA. Improved oxyfuels and related products results led to an EBITDA increase of 29% as volumes increased due to the absence of unplanned downtime coupled with increased production at our newest PO/TBA asset. Intermediate chemicals results improved, resulting in a 17% increase in EBITDA primarily driven by higher volumes reflecting the absence of unplanned downtime.

First six months of 2024 versus first six months of 2023—EBITDA increased 33% due to the recognition of the gain on sale of the EO&D business in the second quarter of 2023.

Advanced Polymer Solutions Segment

Overview—EBITDA increased in the second quarter of 2024 relative to the first quarter of 2024 primarily due to higher margins. During the first quarter of 2023 we recognized a non-cash goodwill impairment charge of $252 million, no similar charges were recognized during the first six months of 2024.

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

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	948					$	965											$	1,913					$	1,957
Loss from equity investments			—						—												—						(1)
EBITDA			40						35												75						(192)

Revenue—Revenues decreased by $17 million, or 2%, in the second quarter of 2024 compared to the first quarter of 2024 and by $44 million, or 2%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Sales volumes decreased resulting in a 4% decrease in revenue stemming from lower demand. Average sales prices increased resulting in a 2% increase in revenue reflecting favorable product mix.

First six months of 2024 versus first six months of 2023—Average sales prices decreased resulting in a 5% decrease in revenue. Sales volumes increased resulting in a 3% increase in revenue due to increased recycled compounds capacity.

EBITDA—EBITDA increased by $5 million or 14% in the second quarter of 2024 compared to the first quarter of 2024 and by $267 million or 139% in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—EBITDA increased by $5 million primarily due to higher margins reflecting higher average sales prices.

First six months of 2024 versus first six months of 2023—During the first quarter of 2023 we recognized a non-cash goodwill impairment charge of $252 million after the effect of moving our Catalloy and polybutene-1 businesses from our APS segment and reintegrating them into our O&P-Americas and O&P-EAI segments. The absence of a similar impairment charge in the first six months of 2024 was the primary driver for the improved EBITDA results.

Refining Segment

Overview—EBITDA decreased in the second quarter of 2024 compared to the first quarter of 2024 and in the first six months of 2024 compared to the first six months of 2023 primarily due to lower 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. “Brent” is a light sweet crude oil and is one of the main benchmark prices for purchases of oil worldwide. “Maya” is a heavy sour crude oil grade produced in Mexico that is a relevant benchmark for heavy sour crude oils in the U.S. Gulf Coast market. References to industry benchmarks for refining market margins are to industry prices reported by Platts, a division of S&P Global.

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,345					$	2,090											$	4,435					$	4,649
EBITDA			(7)						55												48						293
Thousands of barrels per day
Heavy crude oil processing rates			250						212												231						236
Market margins, dollars per barrel
Brent - 2-1-1			$	17.59					$	21.41											$	19.50					$	27.27
Brent - Maya differential			11.54						12.29												11.92						16.87
Total Maya 2-1-1			$	29.13					$	33.70											$	31.42					$	44.14

Revenue—Revenues increased by $255 million, or 12%, in the second quarter of 2024 compared to the first quarter of 2024 and decreased by $214 million, or 5%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Higher sales volumes due to the absence of planned and unplanned outages led to an 8% increase in revenue. Higher product prices led to a revenue increase of 4% due to an average Brent crude oil price increase of approximately $3.15 per barrel.

First six months of 2024 versus first six months of 2023—Lower product prices led to a revenue decrease of 4% due to lower average sales prices reflecting lower margins on refined products. Sales volumes decreased resulting in a 1% decrease in revenue due to slightly lower operating rates.

EBITDA—EBITDA decreased by $62 million, or 113%, in the second quarter of 2024 compared to the first quarter of 2024 and by $245 million, or 84%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Lower margins resulted in an EBITDA decrease of 178% in the second quarter of 2024 due to a decrease in the Maya 2-1-1 industry crack spread of approximately $4.57 per barrel to $29.13 per barrel and a decrease in byproduct margins partially offset by the impact of commodity hedges. Higher volumes, as a result of the absence of planned and unplanned downtime in the second quarter of 2024, resulted in a 76% increase in EBITDA.

First six months of 2024 versus first six months of 2023—Lower margins resulted in a 114% decrease in EBITDA primarily due to a decrease in the Maya 2-1-1 industry crack spread of approximately $12.72 per barrel to $31.42 per barrel and lower by-product margins. A decrease in costs incurred related to our planned exit from the refining business in the first six months of 2024 compared to the first six months of 2023 resulted in a 33% increase in EBITDA.

Technology Segment

Overview—EBITDA decreased in the second quarter of 2024 compared to the first quarter of 2024 and increased in the first six months of 2024 relative to the first six months of 2023 primarily due to licensing results.

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

			Three Months Ended																		Six Months Ended
			June 30,						March 31,												June 30,						June 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	159					$	192											$	351					$	293
EBITDA			84						118												202						152

Revenue—Revenues decreased by $33 million, or 17%, in the second quarter of 2024 compared to the first quarter of 2024 and increased by $58 million, or 20%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Lower licensing revenues resulting from more contracts with lower average values reaching significant contract milestones drove a 13% decrease in revenue. Lower catalyst volumes resulted in a 5% decrease in revenue primarily driven by weaker demand. Unfavorable foreign exchange impacts decreased revenue by 1%. Higher average catalyst sales prices resulted in a 2% increase in revenues.

First six months of 2024 versus first six months of 2023—Higher licensing revenues resulting from more contracts with higher average values reaching significant milestones drove a 15% increase in revenue. Higher catalyst volumes resulted in a 3% increase in revenue primarily driven by higher demand. Higher average catalyst sales prices resulted in a 2% increase in revenues.

EBITDA—EBITDA decreased by $34 million, or 29%, in the second quarter of 2024 compared to the first quarter of 2024 and increased by $50 million, or 33%, in the first six months of 2024 compared to the first six months of 2023.

Second quarter of 2024 versus first quarter of 2024—Licensing results led to a 21% decrease in EBITDA as a result of more contracts with lower average values reaching significant milestones. Lower catalyst volumes resulted in a 7% decrease in EBITDA driven by lower polymer end-use demand.

First six months of 2024 versus first six months of 2023—Licensing results led to a 31% increase in EBITDA as a result of more contracts with higher average values reaching significant milestones.

FINANCIAL CONDITION

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

			Six Months Ended June 30,
Millions of dollars			2024						2023
Cash provided by (used in):
Operating activities			$	1,234					$	1,772
Investing activities			(823)						(742)
Financing activities			(893)						(701)

Operating Activities—Cash provided by operating activities of $1,234 million in the first six months of 2024 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital—Accounts receivable, Inventories, and Accounts payable.

In the first six months of 2024, the main components of working capital used $566 million of cash primarily driven by increases in Accounts receivable and Inventories partially offset by an increase in Accounts payable. The increase in Accounts receivable was primarily due to higher volumes sold coupled with timing of receipts. Our I&D and Refining segments built inventory to align with demand. The increase in Accounts payable was primarily driven by timing of payments and higher raw material costs for our Refining segment.

Cash provided by operating activities of $1,772 million in the first six months of 2023 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital.

In the first six months of 2023, the main components of working capital used $605 million of cash driven primarily by increases in Inventories and Accounts receivable. The increase in Inventories was primarily due to inventory build associated with our PO/TBA plant as well as planned and unplanned outages. The increase in Accounts receivable was primarily driven by higher volumes and average sales prices in our O&P-EAI and I&D segments.

Investing Activities—Capital expenditures in the first six months of 2024 totaled $967 million compared to $653 million in the first six months of 2023. During the first six months of 2024 and 2023, approximately 80% and 60% of the expenditures support sustaining maintenance, respectively, with the remaining expenditures supporting profit-generating growth projects. Capital expenditures in the first six months of 2023 included spending for our PO/TBA plant. See Note 12 to the Consolidated Financial Statements for additional information regarding capital expenditures by segment.

In the second quarter of 2024 we sold our EO&D business for $700 million and invested approximately $500 million to acquire a 35% stake in the NATPET joint venture in Saudi Arabia. See Note 12 to the Consolidated Financial Statements for additional information.

Financing Activities—We made dividend payments totaling $846 million and $797 million in the first six months of 2024 and 2023, respectively. Additionally, we made payments of $75 million and $170 million to repurchase outstanding ordinary shares in the first six months of 2024 and 2023, respectively.

In February 2024, we issued $750 million of 5.5% guaranteed notes due 2034. In March 2024, we repaid the $775 million remaining of outstanding principal on our 5.75% senior notes due 2024.

In May 2023, we issued $500 million of 5.625% guaranteed notes due 2033. For additional detail regarding these debt transactions see Note 6 to the Consolidated Financial Statements.

Through the repurchase and issuance of commercial paper instruments under our commercial paper program, we made net repayments of $200 million in the first six months of 2023.

In April 2024, foreign currency contracts with an aggregate notional value of €784 million expired. Upon settlement of these foreign currency contracts, which were designated as cash flow hedges, we paid €784 million ($835 million at the expiry spot rate) to our counterparties and received $849 million from our counterparties.

Liquidity and Capital Resources

Overview

We plan to fund our working capital, capital expenditures, debt service, dividends and other cash requirements with our current available liquidity and cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. 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.

As part of our overall capital allocation strategy, we plan to provide returns to shareholders in the form of dividends and share repurchases. Barring any significant or unforeseen business challenges, mergers or acquisitions, over the long-term, we are targeting shareholder returns of 70% of free cash flow, defined as net cash provided by operating activities less capital expenditures. We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations. Our focus on funding our dividends while remaining committed to a strong investment grade balance sheet continues to be the foundation of our capital allocation strategy.

Cash and Liquid Investments

As of June 30, 2024, we had Cash and cash equivalents totaling $2,839 million, which includes $1,768 million in jurisdictions outside of the U.S., the majority of which is 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.

Credit Arrangements

At June 30, 2024, we had total debt, including current maturities, of $11,190 million. Additionally, we had $169 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.

We had total unused availability under our credit facilities of $4,150 million at June 30, 2024, 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. 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 June 30, 2024, we had no outstanding commercial paper and no borrowings or letters of credit outstanding under this facility; and

• $900 million under our $900 million U.S. Receivables Facility. Availability under this facility is subject to a borrowing base of eligible receivables, which is reduced by outstanding borrowings and letters of credit, if any. At June 30, 2024, we had no borrowings or letters of credit outstanding under this facility. In May 2024, we extended the term of the facility to June 2025 in accordance with the terms of the agreement.

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. Any repayment or redemption of our debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In connection with such repurchases or redemptions, we may incur cash and non-cash charges, which could be material in the period in which they are incurred.

In July 2024, we amended our credit agreement to increase our senior unsecured revolving credit facility from $3,250 million to $3,750 million and extend the maturity to July 2029.

Share Repurchases

In May 2024, our shareholders approved a proposal to authorize us to repurchase up to 34.0 million ordinary shares, through November 24, 2025, which superseded any prior repurchase authorizations. Our share repurchase authorization does not have a stated dollar amount, and purchases may be made through open market purchases, private market transactions or other structured transactions. Repurchased shares could be retired or used for general corporate purposes, including for various employee benefit and compensation plans. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased. In the first six months of 2024, we purchased approximately 0.8 million shares under our share repurchase authorizations for $75 million.

As of July 31, 2024, we had approximately 33.3 million shares remaining under the current authorization. The timing and amounts of additional shares repurchased, if any, will be determined based on our evaluation of market conditions and other factors, including any additional authorizations approved by our shareholders. For additional information related to our share repurchase authorizations, see Note 10 to the Consolidated Financial Statements.

CURRENT BUSINESS OUTLOOK

In the third quarter of 2024 we expect margins to continue to benefit from low costs for natural gas and natural gas liquids utilized in our North American and Middle East production relative to higher oil-based costs in other regions. With the summer driving season underway, oxyfuels margins are expected to remain above historical levels with high octane premiums. During the third quarter of 2024, we expect to operate our assets in line with market demand with average operating rates of 85% for our O&P-Americas assets, 80% for European O&P-EAI assets and 75% for I&D assets.

ACCOUNTING AND REPORTING CHANGES

For a discussion of the potential impact of new accounting pronouncements on the Consolidated Financial Statements, see Note 2 to the Consolidated Financial Statements.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). You can identify our forward-looking statements by the words “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions.

We based forward-looking statements on our current expectations, estimates and projections of our business and the industries in which we operate. We caution you that these statements are not guarantees of future performance. They involve assumptions about future events that, while made in good faith, may prove to be incorrect, and involve risks and uncertainties we cannot predict. Our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

• the cost of raw materials represents a substantial portion of our operating expenses, and energy costs generally follow price trends of crude oil, natural gas liquids and/or natural gas; price volatility can significantly affect our results of operations and we may be unable to pass raw material and energy cost increases on to our customers due to the significant competition that we face, the commodity nature of our products and the time required to implement pricing changes;

• our operations in the United States (“U.S.”) have benefited from low-cost natural gas and natural gas liquids; decreased availability of these materials (for example, from their export or regulations impacting hydraulic fracturing in the U.S.) could reduce the current benefits we receive;

• if crude oil prices are low relative to U.S. natural gas prices, we could see less benefit from low-cost natural gas and natural gas liquids and it could have a negative effect on our results of operations;

• industry production capacities and operating rates may lead to periods of oversupply and low profitability;

• we may face unplanned operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failures, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental incidents) at any of our facilities, which would negatively impact our operating results;

• changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate could increase our costs, restrict our operations and reduce our operating results;

• our ability to execute our organic growth plans may be negatively affected by our ability to complete projects on time and on budget;

• the successful outcome of any strategic review of our assets, or our ability to acquire or dispose of product lines or businesses could disrupt our business and harm our financial condition;

• uncertainties associated with worldwide economies could create reductions in demand and pricing, as well as increased counterparty risks, which could reduce liquidity or cause financial losses resulting from counterparty default;

• the negative outcome of any legal, tax and environmental proceedings or changes in laws or regulations regarding legal, tax and environmental matters may increase our costs, reduce demand for our products, or otherwise limit our ability to achieve savings under current regulations;

• any loss or non-renewal of favorable tax treatment under tax agreements or tax treaties, or changes in tax laws, regulations or treaties, may substantially increase our tax liabilities;

• we may be required to reduce production or idle certain facilities because of the cyclical and volatile nature of the supply-demand balance in the chemical and refining industries, which would negatively affect our operating results;

• we rely on continuing technological innovation, and an inability to protect our technology, or others’ technological developments could negatively impact our competitive position;

• we may be unable to continue operations until the shutdown of the Houston refinery within the expected timeframe or without incurring additional charges or expenses;

• we have significant international operations, and fluctuations in exchange rates, valuations of currencies and our possible inability to access cash from operations in certain jurisdictions on a tax-efficient basis, if at all, could negatively affect our liquidity and our results of operations;

• we are subject to the risks of doing business at a global level, including wars, terrorist activities, political and economic instability and disruptions and changes in governmental policies, which could cause increased expenses, decreased demand or prices for our products and/or disruptions in operations, all of which could reduce our operating results;

• if we are unable to achieve our emission reduction, circularity, or other sustainability targets, it could result in reputational harm, changing investor sentiment regarding investment in our stock or a negative impact on our access to and cost of capital;

• our ability to execute and achieve expected results of our value enhancement program;

• if we are unable to comply with the terms of our credit facilities, indebtedness and other financing arrangements, those obligations could be accelerated, which we may not be able to repay; and

• we may be unable to incur additional indebtedness or obtain financing on terms that we deem acceptable, including for refinancing of our current obligations; higher interest rates and costs of financing would increase our expenses.

Any of these factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Our management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels.

All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section and any other cautionary statements that may accompany such forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements.