LyondellBasell Industries N.V. (NYSE:LYB) Q3 2020 Earnings Conference Call - Final Transcript
Oct 30, 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. Following today's presentation, we will conduct a question-and-answer session. [Operator Instructions]
I'd now like to turn the conference over to Mr. David Kinney, Director of Investor Relations. Sir, you may begin.
Thank you, operator. Hello, and welcome to LyondellBasell's Third Quarter 2020 Teleconference. I'm 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. Today, we will be discussing our business results, while making reference to some forward-looking statements and non-GAAP financial measures. We believe the forward-looking statements are based upon reasonable assumptions and the alternative measures are useful to investors.
Nonetheless, the forward-looking statements are subject to significant risks 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/investor relations.
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 1:00 p.m. Eastern Time today until November 30 by calling 888-566-0568 in the United States and 203-369-3064 outside the United States. The passcode for both numbers is 6541. During today's call, we will focus on third quarter results, the current environment our near-term outlook and provide an update on our growth initiatives.
Before turning the call over to Bob, I would like to call your attention to the non-cash lower of 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 volatility in prices for our raw materials and finished goods inventories.
During the third quarter, we recognized pre-tax LCM benefits totaling $160 million, compared to LCM charges of $323 million during the first half of 2020. During the third quarter we also recognized a non-cash impairment of $582 million that reflects our expectation for reduced profitability from our Houston refinery. Comments made on this call will be in regard to our underlying business results, excluding the impacts of the refinery impairment and the LCM inventory adjustments.
With that being said, I would now like to turn the call over to Bob.
Bhavesh V. Patel
Thank you, Dave, and good day to all of you participating around the world. We hope that you, your colleagues and your families are all staying healthy and safe during these challenging times. We appreciate you joining us today as we discuss our third quarter results.
Let's begin with Slide three and review the highlights. In the third quarter Lyondellbasell's businesses