UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
On July 16, 2007, LyondellBasell Industries AF S.C.A. (“LyondellBasell Industries”), formerly Basell AF
S.C.A. and Lyondell Chemical Company (“Lyondell”) entered into an agreement under which a subsidiary of
LyondellBasell Industries purchased all of the outstanding common stock of Lyondell at a price of $48.00 per share
on December 20, 2007. The acquisition was financed from the proceeds of $11.45 billion of new senior secured
credit facilities, an $8.0 billion bridge facility, and draws from our asset backed facilities. Of the proceeds, $7.2
billion was used to repay a portion of Lyondell's and LyondellBasell Industries’ existing indebtedness and asset-
The following unaudited pro forma condensed combined statement of income of LyondellBasell Industries
presents the combined results of operations of LyondellBasell Industries as they may have appeared had the
acquisition and financing transactions described above occurred as of January 1, 2007. The pro forma condensed
combined statement of income presents information from continuing operations.
The unaudited pro forma condensed combined statement of income is provided for illustrative purposes
only and does not purport to present what the actual results of operations would have been had the transactions
actually occurred on the date indicated, nor does it purport to represent results of operations for any future period or
financial position for any future date. This statement does not reflect any cost savings or other benefits that may be
obtained through synergies among the operations of LyondellBasell Industries and Lyondell.
The unaudited pro forma condensed combined statement of income has been derived from and should be
read together with the historical consolidated financial statements and notes of LyondellBasell Industries and the
historical financial statements of Lyondell, both prepared in accordance with accounting principles generally
accepted in the United States (“U.S. GAAP”), for the year ended December 31, 2007, included elsewhere in this
Consistent with requirements related to US income taxation, the following unaudited pro forma condensed
combined statement of income is presented with costs of sales of certain inventories of Lyondell reflected in the
consolidated pro forma information based on accounting for the costs of those inventories using the LIFO method.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2007
LyondellBasell December 20, Pro forma
Amounts in accordance with U.S. GAAP Historical 2007 Adjustments Pro forma
Revenue $ 17,120 $ 27,674 $ (59) $ 44,735
Operating costs and expenses (16,186) (26,386) 59 (42,909)
Operating income 934 1,288 (396) 1,826
Interest expense (353) (614) 728 (2,103)
Interest income 70 33 -- 103
Other income (expense), net 127 (539) 544 232
Income before income
taxes, associates and joint ventures 778 168 (888) 58
Income from associates and joint ventures 162 2 -- 164
Income from continuing operations before
income tax 940 170 (888) 222
(Provision for) benefit from income tax (279) (86) 311 (54)
Net income from continuing operations 661 84 (577) 168
See notes to Unaudited Pro Forma Condensed Combined Statement of Income.
Note 1 – Basis of Pro Forma Presentation
The unaudited pro forma condensed combined statement of income of LyondellBasell Industries is
presented for the year ended December 31, 2007. The unaudited pro forma condensed combined statement of
income of LyondellBasell Industries applies the group’s accounting policies over the pro forma period.
This statement reflects borrowings under the new $2.0 billion Term Loan A at LIBOR plus 3.0%, the $9.45
billion Term Loan B at LIBOR plus 3.25%, the $8.0 billion bridge facility at LIBOR plus 4.625%, and draws of the
$1.15 billion accounts receivable securitization facility at LIBOR plus 1.75%, to finance the acquisition. In addition,
this statement reflects fees of 0.75% related to the $1.0 billion revolving credit facility, and 0.35% under the
commitment related to the $1.0 billion inventory securitization facility. Any unused portion of the accounts
receivable securitization facility would have borne a fee of 0.25% of the unused available amount. Pro forma
interest expense has been determined based on an assumed LIBOR of 4.9%.
No amounts have been included in the purchase price allocation for estimated costs to be incurred to
achieve savings or other benefits of the transactions. Similarly, the pro forma statement of income does not reflect
any cost savings or other benefits that may be obtained through synergies among the operations of LyondellBasell
Industries and Lyondell. The unaudited pro forma condensed combined statement of income does not include the
pro forma effect of the acquisition of one of Shell’s refineries and related business in France that was completed on
April 1, 2008.
Note 2 –Lyondell Purchase Price Allocation
The purchase of Lyondell’s outstanding common stock and other equity instruments resulted in a total purchase
price of $20,873 million, including the fair value of assumed and refinanced debt of $7,995 million and transaction
costs of $460 million.
The fair value of the Lyondell assets acquired and liabilities acquired at December 20, 2007 was as follows:
Millions of dollars
Cash and cash equivalents $ 948
Other current assets 3,119
Plant, property and equipment 13,695
Investments and joint ventures 1,169
Other identifiable intangibles 2,069
Other assets 677
Purchased in-process research and development 95
Current liabilities (3,906)
Other liabilities (1,560)
Deferred taxes (4,141)
Minority interests (126)
Total allocated purchase price $ 20,873
The goodwill is not deductible for tax purposes. The purchase price allocation is preliminary due to the continuing
analyses relating to the determination of the fair values of the assets acquired and liabilities acquired. Any changes
to the fair value of net assets acquired, based on information as of the acquisition date, would result in a
corresponding adjustment to goodwill. Management does not expect the finalization of these matters to have a
material effect on the allocation.
Note 3 — Pro forma adjustments
The unaudited pro forma condensed combined statement of income has been prepared to reflect the
acquisition of Lyondell by LyondellBasell Industries and the related financing as if it had occurred January 1, 2007.
Pro forma adjustments included in the unaudited pro forma condensed combined statement of income are as follows:
(a) To eliminate sales between LyondellBasell Industries and Lyondell and the related cost of sales.
The changes during the year ended December 31, 2007 in related profit in ending inventory was
(b) To adjust depreciation expense on Lyondell plant, property and equipment and investments in
joint ventures based upon the values assigned in LyondellBasell Industries’ accounting for the
purchase of Lyondell, reflecting an estimated average remaining useful life of 17 years.
(c) To adjust amortization expense for Lyondell’s separately identifiable intangible assets other than
goodwill based upon the values assigned in LyondellBasell Industries’ accounting for the purchase
of Lyondell, reflecting the average estimated useful life of 9 years.
(d) To eliminate amortization of deferred pension gains and losses.
(e) To eliminate the costs associated with the Lyondell accounts receivable securitization program.
(f) To recognize the costs of the new accounts receivable securitization program.
(g) To eliminate expensed acquisition and financing costs.
(h) To eliminate LyondellBasell Industries and Lyondell long-term debt-related historical debt
issuance costs at the time of the acquisition and the related interest expense, prepayment penalties
and other charges.
(i) To recognize pro forma interest expense and debt issuance cost amortization expense for new debt
issued to finance the acquisition. The impact of an increase in the LIBOR rate of 1/8 of 1% would
be to increase pro forma interest expense by approximately $24 million for the year ended
December 31, 2007.
(j) To eliminate a $100 million one-time transaction fee paid to Access Industries Group.
(k) To reflect the deferred income tax effect, using the statutory rate for the relevant jurisdictions
which is approximately 35%, related to the net pro forma adjustments. LyondellBasell Industries’
actual effective tax rate may vary significantly from this estimate, depending upon the relative
earnings and deductions in the various tax jurisdictions.
Pro Forma EBITDA Information
Pro Forma EBITDA and Pro Forma Adjusted EBITDA 1 LyondellBasell Industries
December 31, 2007
Pro forma net income from continuing operations $168
Provision for income taxes 54
Income from associates and joint ventures (164)
Interest expense, net 2,000
Depreciation, amortization and impairment losses 1,774
A/R facility fees 65
Debt prepayment premiums, charges and other items (IPR&D) 142
Pro Forma EBITDA $4,039
Adjustments to Pro Forma EBITDA:
Increase in provision related to pension trust exit fee
claim in UK 57
Curtailment gain related to post-retirement benefits
in North America (50)
Income recognized for fee related to termination of
acquisition of Huntsman (200)
Change of control costs related to transaction 158
Cash distributions from associates and joint
Propylene Oxide and Related Products - charges
related to commercial disputes 82
Effect of planned turnarounds, upgrades and catalyst
Pro Forma Adjusted EBITDA (pre FIFO adjustments and synergies) $4,429
1. The unaudited pro forma EBITDA and adjusted EBITDA is provided for illustrative purposes only and
does not purport to present what the actual EBITDA and adjusted EBITDA would have been had the transactions actually
occurred on January 1, 2007, nor does it purport to represent EBITDA and adjusted EBITDA for any future period
or financial position for any future date.
See attachted note "Reconciliation of Pro Forma Adjusted EBITDA" for further information
Attached note to "Pro Forma EBITDA and Pro Forma Adjusted EBITDA
Reconciliation of Pro Forma Adjusted EBITDA Lyondell Lyondell Basell LB Industries
Last Twelve For the period Last Twelve Last Twelve
Months Ended from 12/21/2007 Months Ended Months Ended
December 31, through December 31, December 31,
(Millions of dollars) 2007 12/31/2007 2007 1 2007
Income (loss) from continuing operations ($62) ($146) $661 $745
Depreciation and amortization 907 39 472 1,340
Interest expense, net 633 52 283 864
(Provision for) benefit from income taxes 63 (23) 279 365
Income from equity investment 2 0 162 164
EBITDA $1,539 ($78) $1,533 $3,150
Pro forma EBITDA adjustments :
Elimination of 11 days Lyondell EBITDA - 78 78 -
Purchased in-process R&D 95 - 95
Elimination of legacy Lyondell A/R facility costs 12 - 12
Expensed acquisition costs 62 1 63
Amortization of deferred pension gains/losses 8 - 8
Assets impairments - 20 20
Debt repayment penalty not included in adjustments 47 - 47
Lyondell debt prepayment penalty (deal-related) 544 - 544
Access M&A advisory fee (deal-related) - 100 100
Increase in provision related to pension trust exit fee claim in UK - 57 57
Curtailment gain related to post-retirement benefits in NAM - (50) (50)
Huntsman break-up fee - (200) (200)
Change of control costs related to transaction 158 - 158
Dividends from JVs and associates - 148 148
Charges related to commercial disputes 82 - 82
Effect of planned turnarounds, upgrades, and catalyst changes 195 - 195
Pro Forma Adjusted EBITDA (pre FIFO adjustments and synergies) $2,742 $1,687 $4,429
LIFO to FIFO adjustments 869 - 869
Adjusted Pro Forma EBITDA (pre synergies) $3,611 $1,687 $5,298
Assumed synergies 420
LB Industries Adjusted Pro Forma EBITDA $5,718
1. Basell 2007 Earnings include 11-day Lyondell results from 12/21/2007 to 12/31/2007.
2. The unaudited pro forma EBITDA and adjusted EBITDA is provided for illustrative purposes only and does not purport to present what the actual EBITDA and adjusted
EBITDA would have been had the transactions actually occurred on January 1, 2007, nor does it purport to represent EBITDA and adjusted EBITDA for any future period or
financial position for any future date.
3. LyondellBasell Industries reported certain legacy Lyondell operations using the LIFO method. The FIFO adjustment is provided herein as supplementary
data showing different earnings had LyondellBasell Industries instead used the FIFO method.