LyondellBasell Industries N.V. (NYSE:LYB) Q2 2020 Earnings Conference Call - Final Transcript
Jul 31, 2020 • 11:00 am ET
Hello, and welcome to the LyondellBasell teleconference. At the request of LyondellBasell, this conference is being recorded for instant replay purposes. [Operator Instructions]
I'd now like to turn the conference over to Mr. David Kinney, Director of Investor Relations. Sir, you may begin.
Hello, and welcome to LyondellBasell's Second Quarter 2020 Teleconference. I am joined today by Bob Patel, our Chief Executive Officer; and Michael McMurray, our Chief Financial Officer. Before we begin the business discussion, I would like to point out that a slide presentation accompanies today's call and is available on our website at www.lyondellbasell.com. We will be discussing our business results while making reference to some forward-looking statements and non-GAAP financial measures. We believe the forward-looking statements are based upon reasonable assumptions, and the alternative measures are useful to investors. Nonetheless, the forward-looking statements are subject to significant risk and uncertainty. We encourage you to learn more about the factors that could lead our actual results to differ by reviewing the cautionary statements in the presentation slides and our regulatory filings, which are available at www.lyondellbasell.com/investorrelations.
Reconciliations of non-GAAP financial measures to GAAP financial measures, together with other disclosures, including the earnings release, are also currently available on our website. Finally, I would like to point out that a recording of this call will be available by telephone beginning at one p.m. Eastern Time today until September one by calling (800) 879-4299 in the United States and (203) 369-3561 outside the United States. The passcode for both numbers is 7410. During today's call, we will focus on second quarter results, the current environment, our near-term outlook and provide an update on our growth initiatives. Before turning the call over to Bob, I would like to call your attention to the noncash lower op cost or market inventory adjustments, or LCM, that we have discussed on past calls.
These adjustments are related to our use of last-in, first-out or LIFO accounting and the recent decline in prices of our raw material and finished goods inventories. During the second quarter, we've recognized pretax LCM benefits totaling $96 million compared to LCM charges of $419 million in the first quarter. Comments made on this call will be in regard to our underlying business results, excluding the impacts of these LCM inventory charges.
With that being said, I would now like to turn the call over to Bob.
Bhavesh V. (Bob) Patel
Thank you, Dave, and good day to all of you participating around the world. I hope that you, your colleagues and your families are all staying healthy during these challenging times. We appreciate you joining us today as we discuss our second quarter results. Let's begin with slide three and review the highlights. LyondellBasell's employees leveraged our core strengths in operational excellence, cost management and commercial agility to generate $1.3 billion of cash from operating activities during an extremely challenging quarter. This represents an improvement of over $100 million relative to the second quarter of 2019 despite our significantly lower earnings. During the second