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 third quarter of 2024 declined compared to the second quarter of 2024. In our Olefins and Polyolefins-Americas (“O&P-Americas”) segment, integrated polyethylene margins increased, driven by favorable ethane and natural gas costs coupled with higher polyethylene prices. Our third quarter volumes benefited from high cracker operating rates that captured improved margins on ethylene sales. In our Olefins and Polyolefins-Europe, Asia, International (“O&P-EAI”) segment, integrated polyethylene margins expanded due to lower feedstock costs and stable polyolefins prices. Margins for our Intermediates and Derivatives (“I&D”) and Refining segments fell due to lower crude oil prices and gasoline crack spreads.

Results for the first nine months of 2024 remained relatively flat compared to the first nine months of 2023. Our Refining segment results decreased as a result of decreases in the Maya 2-1-1 industry crack spread. Our I&D segment results decreased due to lower gasoline crack spreads which impacted our oxyfuels business partially offset by the gain on the sale of the Ethylene Oxide & Derivatives (“EO&D”) business. These decreases were offset by improvement in our Advanced Polymer Solutions (“APS”) segment results driven primarily by the absence of a non-cash goodwill impairment recognized in the first quarter of 2023. Additionally, improvements in our O&P-Americas and O&P-EAI segments were driven by higher olefins margins driven by higher ethylene prices coupled with lower costs.

During the second quarter of 2024, 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 nine months of 2024 we generated $1,904 million in cash from operating activities, invested $1,335 million in capital expenditures and returned $1,400 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																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	10,322					$	10,558											$	30,805					$	31,178
Cost of sales			9,080						9,148												26,991						26,909
Impairments			5						—												5						277
Selling, general and administrative expenses			404						407												1,237						1,158
Research and development expenses			31						33												96						96
Operating income			802						970												2,476						2,738
Interest expense			(118)						(120)												(365)						(356)
Interest income			36						37												114						88
Gain on sale of business			—						293												293						—
Other income (expense), net			11						13												29						(33)
(Loss) income from equity investments			(20)						(19)												(66)						11
Income from continuing operations before income taxes			711						1,174												2,481						2,448
Provision for income taxes			134						249												505						508
Income from continuing operations			577						925												1,976						1,940
Loss from discontinued operations, net of tax			(4)						(1)												(6)						(4)
Net income			573						924												1,970						1,936
Other comprehensive income (loss), net of tax –
Financial derivatives			12						49												62						24
Defined benefit pension and other postretirement benefit plans			3						4												10						6
Foreign currency translations			134						(44)												30						(58)
Total other comprehensive income (loss), net of tax			149						9												102						(28)
Comprehensive income			$	722					$	933											$	2,072					$	1,908

RESULTS OF OPERATIONS

Revenues—Revenues decreased by $236 million, or 2%, in the third quarter of 2024 compared to the second quarter of 2024. Lower volumes, driven by lower demand and unplanned downtime in our refining segment, resulted in a 2% decrease in revenues. Lower average sales prices for many of our products resulted in a 1% decrease in revenues. Favorable foreign exchange impact resulted in a 1% increase in revenues.

Revenues decreased by $373 million or 1% in the first nine months of 2024 compared to the first nine months of 2023 due to lower sales volumes.

Cost of Sales—Cost of sales decreased by $68 million, or 1%, in the third quarter of 2024 compared to the second quarter of 2024 and increased by $82 million, or less than 1%, in the first nine months of 2024 compared to the first nine months of 2023, primarily driven by feedstock and energy costs, including the impact of our commodity hedges.

Impairments—During the first nine 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. Additionally, we recognized a non-cash impairment charge of $25 million related to capital project costs in our O&P-Americas segment.

SG&A Expenses—Selling, general and administrative (“SG&A”) expenses remained relatively unchanged in the third quarter of 2024 compared to the second quarter of 2024 and increased by $79 million, or 7%, in the first nine months of 2024 compared to the first nine months of 2023, primarily attributable to an increase in employee-related expenses.

Operating Income—Operating income decreased by $168 million, or 17%, in the third quarter of 2024 compared to the second quarter of 2024. Operating income in our I&D, Refining, APS and Technology segments decreased by $182 million, $35 million, $20 million and $13 million, respectively. These decreases were partially offset by increases in our O&P-Americas and O&P-EAI segments of $77 million and $9 million, respectively.

Operating income decreased by $262 million, or 10%, in the first nine months of 2024 compared to the first nine months of 2023. Operating income in our I&D, Refining, and Technology segments decreased by $478 million, $359 million and $25 million, respectively. These decreases were partially offset by increases in our APS, O&P-Americas and O&P-EAI segments of $267 million, $250 million and $78 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 remained relatively unchanged in the third quarter of 2024 compared to the second quarter of 2024.

Income from equity investments decreased by $77 million or 700% in the first nine months of 2024 compared to the first nine months of 2023. Approximately 60% of the decrease was driven by changes in our O&P-EAI segment, including the impact of a one-time gain on sale of an asset recognized by one of our European joint ventures in the first quarter of 2023. The remaining change was primarily driven by lower polypropylene margins at our Mexican joint venture in our O&P-Americas segment.

Income Taxes—Our effective income tax rate for the third quarter of 2024 was 18.8% compared to 21.2% for the second quarter of 2024. In the third quarter of 2024, the impact of changes in pre-tax income in countries with varying statutory tax rates, changes in return to accrual adjustments, and an increase in exempt income decreased our effective income tax rate by 2.8%, 2.8%, and 1.2%, respectively. These decreases were partially offset by fluctuations in foreign exchange gains or losses that increased our effective income tax rate by 4.3%.

Our effective income tax rate for the first nine months of 2024 was 20.4% compared to 20.8% for the first nine months of 2023. The lower effective income tax rate for the first nine months of 2024 was primarily due to the first quarter 2023 goodwill impairment, for which there was no tax benefit, and an audit settlement during the second quarter 2023 of 1.7% and 1.6%, respectively. These decreases were partially offset by a 2.3% increase in our effective income tax rate due to a decrease in exempt income.

Comprehensive Income—Comprehensive income decreased by $211 million in the third quarter of 2024 compared to the second quarter of 2024, primarily due to the decrease in Net income. Comprehensive income increased by $164 million in the first nine months of 2024 compared to the first nine months of 2023, primarily due to the net favorable impacts of unrealized changes in foreign currency translation adjustments. The components of Other comprehensive income (loss) are discussed below.

Financial derivatives designated as cash flow hedges, primarily our commodity swaps, led to a decrease in Comprehensive income of $37 million and an increase of $38 million in the third quarter of 2024 compared to the second quarter of 2024 and in the first nine months of 2024 compared to the first nine months of 2023, respectively, reflecting commodity price volatility.

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

Foreign currency translations increased by $178 million and $88 million in the third quarter of 2024 compared to the second quarter of 2024 and in the first nine months of 2024 compared to the first nine months of 2023, respectively, primarily due to the weakening of the U.S. dollar relative to the euro, partially 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																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Net income			$	573					$	924											$	1,970					$	1,936
Loss from discontinued operations, net of tax			4						1												6						4
Income from continuing operations			577						925												1,976						1,940
Provision for income taxes			134						249												505						508
Depreciation and amortization			381						387												1,133						1,154
Interest expense, net			82						83												251						268
EBITDA			$	1,174					$	1,644											$	3,865					$	3,870

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																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues:
O&P-Americas segment			$	2,982					$	2,926											$	8,779					$	8,416
O&P-EAI segment			2,809						2,842												8,396						8,067
I&D segment			2,686						2,795												8,067						8,425
APS segment			896						948												2,809						2,856
Refining segment			2,054						2,345												6,489						7,314
Technology segment			146						159												497						511
Other, including intersegment eliminations			(1,251)						(1,457)												(4,232)						(4,411)
Total			$	10,322					$	10,558											$	30,805					$	31,178
Operating income (loss):
O&P-Americas segment			$	596					$	519											$	1,471					$	1,221
O&P-EAI segment			39						30												58						(20)
I&D segment			210						392												814						1,292
APS segment			(5)						15												23						(244)
Refining segment			(92)						(57)												(125)						234
Technology segment			59						72												240						265
Other, including intersegment eliminations			(5)						(1)												(5)						(10)
Total			$	802					$	970											$	2,476					$	2,738

			Three Months Ended																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Depreciation and amortization:
O&P-Americas segment			$	157					$	152											$	460					$	435
O&P-EAI segment			56						54												162						148
I&D segment			101						103												304						333
APS segment			22						22												64						70
Refining segment			35						46												112						135
Technology segment			10						10												31						33
Total			$	381					$	387											$	1,133					$	1,154

(Loss) income from equity investments:
O&P-Americas segment			$	4					$	(1)											$	12					$	41
O&P-EAI segment			(17)						(16)												(65)						(21)
I&D segment			(7)						(2)												(13)						(8)
APS segment			—						—												—						(1)
Total			$	(20)					$	(19)											$	(66)					$	11
Gain on sale of business:
I&D segment			$	—					$	293											$	293					$	—
Total			$	—					$	293											$	293					$	—
Other income (expense), net:
O&P-Americas segment			$	1					$	—											$	6					$	2
O&P-EAI segment			3						2												10						9
I&D segment			13						8												25						(11)
APS segment			2						3												7						1
Refining segment			(3)						4												1						—
Technology segment			—						2												—						—
Other, including intersegment eliminations			(5)						(6)												(20)						(34)
Total			$	11					$	13											$	29					$	(33)
EBITDA:
O&P-Americas segment			$	758					$	670											$	1,949					$	1,699
O&P-EAI segment			81						70												165						116
I&D segment			317						794												1,423						1,606
APS segment			19						40												94						(174)
Refining segment			(60)						(7)												(12)						369
Technology segment			69						84												271						298
Other, including intersegment eliminations			(10)						(7)												(25)						(44)
Total			$	1,174					$	1,644											$	3,865					$	3,870

Olefins and Polyolefins-Americas Segment

Overview—EBITDA increased in the third quarter of 2024 compared to the second quarter of 2024, and in the first nine months of 2024 relative to the first nine months of 2023, primarily due to improved olefins 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 third and second quarter of 2024, and the first nine months of 2024 and 2023, approximately 75% 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 Income (loss) from equity investments, which is a component of EBITDA:

			Three Months Ended																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,982					$	2,926											$	8,779					$	8,416
Income (loss) from equity investments			4						(1)												12						41
EBITDA			758						670												1,949						1,699

Revenue—Revenues for our O&P-Americas segment increased by $56 million, or 2% in the third quarter of 2024 compared to the second quarter of 2024 and by $363 million, or 4%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Revenue increased by 1% as a result of higher average sales prices driven by a decline in olefins supply in the industry. Higher sales volumes, driven by improved operating rates, contributed to a 1% increase in revenue.

First nine months of 2024 versus first nine months of 2023—Higher propylene and polypropylene average sales prices resulted in a 7% increase in revenue. Lower volumes driven by lower cracker operating rates resulted in a 3% decrease in revenue.

EBITDA—EBITDA increased by $88 million, or 13%, in the third quarter of 2024 compared to the second quarter of 2024 and by $250 million, or 15%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Higher olefins results led to a 22% increase in EBITDA driven by higher margins resulting from higher ethylene average sales prices due to industry cracker downtime and lower ethane feedstock cost. Lower polymer results led to a 7% decrease in EBITDA primarily due to lower margins reflecting higher monomer cost.

First nine months of 2024 versus first nine months of 2023—Higher olefins results led to a 23% increase in EBITDA driven by higher margins reflecting higher ethylene average sales prices and lower feedstock and energy costs. Lower polyolefins results led to a 5% 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.

Olefins and Polyolefins-Europe, Asia, International Segment

Overview—EBITDA increased in the third quarter of 2024 compared to the second quarter of 2024, and in the first nine months of 2024 relative to the first nine months of 2023, primarily due to margin improvements.

Ethylene Raw Materials—In Europe, naphtha is the primary raw material for our ethylene production and represented approximately 55% to 65% of the raw materials used in the third and second quarter of 2024, and in the first nine 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																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,809					$	2,842											$	8,396					$	8,067
Loss from equity investments			(17)						(16)												(65)						(21)
EBITDA			81						70												165						116

Revenue—Revenues decreased by $33 million, or 1%, in the third quarter of 2024 compared to the second quarter of 2024 and increased by $329 million, or 4%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Lower volumes resulted in a revenue decrease of 2% primarily due to a decrease in demand. Lower average sales prices resulted in a 1% decrease as sales prices generally correlate with crude oil prices, which on average, decreased compared to the second quarter of 2024. Favorable foreign exchange impacts resulted in a revenue increase of 2%.

First nine months of 2024 versus first nine months of 2023—Higher average sales prices resulted in an increase of 2% due to increased demand. Higher volumes resulted in an increase of 2% due to higher demand.

EBITDA—EBITDA increased by $11 million, or 16%, in the third quarter of 2024 compared to the second quarter of 2024 and by $49 million, or 42%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—EBITDA improved largely due to higher polyolefins results which were driven by moderately higher margins.

First nine months of 2024 versus first nine months of 2023—Higher polyolefins results led to a 73% increase in EBITDA primarily driven by higher margins as a result of higher average sales prices and lower energy costs. Improved olefins results resulted in a 21% increase in EBITDA primarily driven by higher margins as a result of higher ethylene prices and lower costs of ethylene production reflecting an increased use of advantaged feedstocks. Losses from our equity investments led to a decline in EBITDA of 40% driven by lower results from our Saudi Arabian and Asian joint ventures combined with 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 decreased in the third quarter of 2024 compared to the second quarter of 2024, primarily due to the absence of the gain on the sale of the EO&D business recognized in the second quarter of 2024. EBITDA decreased in the first nine months of 2024 compared to the first nine months of 2023 primarily due to lower margins for oxyfuels and related products, partially offset by the recognition of a gain on the sale of the EO&D business in the second 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																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,686					$	2,795											$	8,067					$	8,425
Loss from equity investments			(7)						(2)												(13)						(8)
EBITDA			317						794												1,423						1,606

Revenue—Revenues decreased by $109 million, or 4%, in the third quarter of 2024 compared to the second quarter of 2024 and by $358 million, or 4%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Lower average sales prices resulted in a 6% decrease in revenue driven primarily by lower crude and gasoline crack spreads. Sales volumes increased due to the absence of unplanned downtime resulting in a 1% increase in revenue. Favorable foreign exchange impact resulted in a 1% increase in revenue.

First nine months of 2024 versus first nine months of 2023—Lower average sales prices resulted in a 6% decrease in revenue driven by oxyfuels and related products as a result of lower gasoline crack spreads and blend premiums. Sales volumes increased resulting in a 2% increase in revenue due to additional PO/TBA production.

EBITDA—EBITDA decreased by $477 million, or 60%, in the third quarter of 2024 compared to the second quarter of 2024 and by $183 million, or 11%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—In the second quarter of 2024 we recognized a $293 million gain on the sale of our EO&D business. The absence of a similar gain in the third quarter resulted in a 37% decrease in EBITDA. Oxyfuels and related products results led to an EBITDA decrease of 15% as margins decreased reflecting lower gasoline crack spreads.

First nine months of 2024 versus first nine months of 2023—Oxyfuels and related products results led to an EBITDA decrease of 26% driven by lower margins reflecting lower gasoline cracks and blend premiums. Propylene oxide and derivatives results drove a 3% decrease in EBITDA as lower demand pressured margins. EBITDA increased 18% primarily due to the recognition of the gain on sale of the EO&D business during the first nine months of 2024.

Advanced Polymer Solutions Segment

Overview—EBITDA decreased in the third quarter of 2024 relative to the second quarter of 2024 primarily due to lower demand. During the first nine months of 2023 we recognized a non-cash goodwill impairment charge of $252 million.

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																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	896					$	948											$	2,809					$	2,856
Loss from equity investments			—						—												—						(1)
EBITDA			19						40												94						(174)

Revenue—Revenues decreased by $52 million, or 5%, in the third quarter of 2024 compared to the second quarter of 2024 and by $47 million, or 2%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Sales volumes decreased resulting in a 6% decrease in revenue stemming from lower demand. Favorable foreign exchange impacts resulted in a revenue increase of 1%.

First nine months of 2024 versus first nine months of 2023—Average sales prices decreased resulting in a 3% decrease in revenue. Sales volumes increased resulting in a 1% increase in revenue due to increased recycled compounds capacity.

EBITDA—EBITDA decreased by $21 million or 53% in the third quarter of 2024 compared to the second quarter of 2024 and increased by $268 million or 154% in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024— Decreases in volumes and margins resulted in a 35% and 18% reduction in EBITDA, respectively, primarily driven by lower automotive demand in Europe.

First nine months of 2024 versus first nine months of 2023—During the first nine months 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 nine months of 2024 was the primary driver for the improved EBITDA results.

Refining Segment

Overview—EBITDA decreased in the third quarter of 2024 compared to the second quarter of 2024 and in the first nine months of 2024 compared to the first nine 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																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	2,054					$	2,345											$	6,489					$	7,314
EBITDA			(60)						(7)												(12)						369
Thousands of barrels per day
Heavy crude oil processing rates			240						250												234						240
Market margins, dollars per barrel
Brent - 2-1-1			$	14.27					$	17.59											$	17.76					$	28.91
Brent - Maya differential			11.37						11.54												11.73						14.09
Total Maya 2-1-1			$	25.64					$	29.13											$	29.49					$	43.00

Revenue—Revenues decreased by $291 million, or 12%, in the third quarter of 2024 compared to the second quarter of 2024 and by $825 million, or 11%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Lower sales volumes due to unplanned outages at our fluid catalytic cracking unit led to a 7% decrease in revenue. Lower product prices led to a revenue decrease of 5% due to an average Brent crude oil price decrease of approximately $6.46 per barrel.

First nine months of 2024 versus first nine months of 2023—Lower product prices led to a revenue decrease of 8% due to lower average sales prices reflecting lower margins on refined products. Sales volumes decreased resulting in a 3% decrease in revenue due to lower operating rates.

EBITDA—EBITDA decreased by $53 million, or 757%, in the third quarter of 2024 compared to the second quarter of 2024 and by $381 million, or 103%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Lower margins resulted in an EBITDA decrease of 486% in the third quarter of 2024 primarily due to a decrease in the Maya 2-1-1 industry crack spread of approximately $3.49 per barrel to $25.64 per barrel driven by lower gasoline crack spreads driven by lower demand and high industry operating rates. An increase in costs incurred related to our planned exit from the refining business in the third quarter of 2024 compared to the second quarter of 2024 resulted in a 214% decrease in EBITDA.

First nine months of 2024 versus first nine months of 2023—Lower margins resulted in a 123% decrease in EBITDA primarily due to a decrease in the Maya 2-1-1 industry crack spread of approximately $13.51 per barrel to $29.49 per barrel and lower by-product margins. A decrease in costs incurred related to our planned exit from the refining business in the first nine months of 2024 compared to the first nine months of 2023 resulted in a 24% increase in EBITDA.

Technology Segment

Overview—EBITDA decreased in the third quarter of 2024 compared to the second quarter of 2024 primarily due to lower licensing results. EBITDA decreased in the first nine months of 2024 relative to the first nine months of 2023 primarily due to lower catalyst margins and licensing results.

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

			Three Months Ended																		Nine Months Ended
			September 30,						June 30,												September 30,						September 30,
Millions of dollars			2024						2024												2024						2023
Sales and other operating revenues			$	146					$	159											$	497					$	511
EBITDA			69						84												271						298

Revenue—Revenues decreased by $13 million, or 8%, in the third quarter of 2024 compared to the second quarter of 2024 and by $14 million, or 3%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Lower licensing revenues resulting from fewer contracts reaching significant contract milestones drove a 10% decrease in revenue. Lower catalyst average sales prices resulted in a 3% decrease in revenues. Higher catalyst volumes resulted in a 3% increase in revenues primarily driven by higher demand in the U.S. Favorable foreign exchange impact resulted in a 2% increase in revenues.

First nine months of 2024 versus first nine months of 2023—Lower licensing revenues resulting from contracts with lower average values reaching significant milestones drove a 3% decrease in revenue.

EBITDA—EBITDA decreased by $15 million, or 18%, in the third quarter of 2024 compared to the second quarter of 2024 and by $27 million, or 9%, in the first nine months of 2024 compared to the first nine months of 2023.

Third quarter of 2024 versus second quarter of 2024—Licensing results led to an 18% decrease in EBITDA as a result of fewer contracts reaching significant milestones.

First nine months of 2024 versus first nine months of 2023—Lower catalyst margins reflecting an unfavorable product mix led to a 6% decrease in EBITDA. Licensing contracts which reached significant milestones had lower average values resulting in a 5% decline in EBITDA.

FINANCIAL CONDITION

The following table summarizes operating, investing and financing cash flow activities:

			Nine Months Ended September 30,
Millions of dollars			2024						2023
Cash provided by (used in):
Operating activities			$	1,904					$	3,438
Investing activities			(1,306)						(1,171)
Financing activities			(1,377)						(1,545)

Operating Activities—Cash provided by operating activities of $1,904 million in the first nine 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 nine months of 2024, the main components of working capital used $1,063 million of cash primarily driven by increases in Accounts receivable and Inventories. The increase in Accounts receivable was primarily driven by higher average sales prices in our O&P-Americas and O&P-EAI segments. The increase in Inventories was primarily due to inventory build for planned outages within our O&P-Americas and O&P-EAI segments coupled with inventory rebuild from low year-end levels at our I&D segment.

Cash provided by operating activities of $3,438 million in the first nine months of 2023 primarily reflected earnings adjusted for non-cash items and cash used by the main components of working capital.

In the first nine months of 2023, the main components of working capital used $447 million of cash driven primarily by increases in Accounts receivable and Inventories. The increase in Accounts receivable was primarily driven by higher average sales prices in our I&D and Refining segments. The increase in Inventories was primarily to support operating rates and industry demand for our O&P-Americas and Refining segments, partially offset by lower inventory in our APS segment driven by lower average costs and volumes.

Investing Activities—Capital expenditures in the first nine months of 2024 totaled $1,335 million compared to $1,047 million in the first nine months of 2023, of which approximately 75% and 65%, respectively, support sustaining maintenance such as turnaround activities at several sites as well as other plant Health, Safety and Environmental projects. The remaining expenditures support profit-generating growth projects. 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 National Petrochemical Industrial Company (“NATPET”) joint venture. See Note 12 to the Consolidated Financial Statements for additional information.

In the first nine months of 2024, foreign currency contracts with an aggregate notional value of €400 million expired. Upon settlement of these foreign currency contracts, we paid €400 million ($445 million at the expiry spot rate) to our counterparties and received $463 million from our counterparties.

In the first nine months of 2023, foreign currency contracts with an aggregate notional value of €500 million expired. Upon settlement of these foreign currency contracts, we paid €500 million ($550 million at the expiry spot rate) to our counterparties and received $612 million from our counterparties.

Financing Activities—We made dividend payments totaling $1,283 million and $1,204 million in the first nine months of 2024 and 2023, respectively. Additionally, we made payments of $117 million and $211 million to repurchase outstanding ordinary shares in the first nine 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.

In July 2023, we repaid the $425 million remaining of outstanding principal on our 4.0% guaranteed notes due 2023. 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 nine 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 September 30, 2024, we had Cash and cash equivalents totaling $2,621 million, which includes $1,223 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 September 30, 2024, we had total debt, including current maturities, of $11,260 million. Additionally, we had $171 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 $4,650 million at September 30, 2024, which included the following:

• $3,750 million under our $3,750 million Senior Revolving Credit Facility. This facility backs our $2,500 million commercial paper program. Availability under the facility is net of outstanding borrowings, outstanding letters of credit provided under the facility and notes issued under our commercial paper program. At September 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 September 30, 2024, we had no borrowings or letters of credit outstanding under this facility.

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.

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 nine months of 2024, we purchased approximately 1.2 million shares under our share repurchase authorizations for $117 million.

As of October 30, 2024, we had approximately 32.8 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 fourth quarter of 2024, we expect year-end seasonality to result in softer demand across most businesses. Sequentially higher natural gas and ethane feedstock costs are expected to moderate North American integrated polyolefins margins during the fourth quarter. Oxyfuels and refining margins are expected to continue to decline with low gasoline crack spreads and the conclusion of the summer driving season. To align with global demand and our planned maintenance, we expect fourth quarter operating rates of 85% for our O&P-Americas assets, 60% for our European O&P-EAI assets and 75% for our I&D assets. Easing interest rates are expected to improve demand for durable goods during 2025, benefiting our polypropylene and I&D businesses.

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.