“It concerns us to know the purposes we seek in life, for then, like archers aiming at a definite mark, we shall be more likely to attain what we want.” - Aristotle
At LyondellBasell, our sights are fixed on operating safe, reliable and low-cost facilities; creating sustainable competitive advantages; establishing a strong presence in the right markets and having financial flexibility with strong liquidity. By focusing on these targets, we have moved LyondellBasell closer to the bull’s eye of best in class.
For the third consecutive year, our safety and environmental performance improved around the globe. Employees set an all-time best safety record, placing us among the safest operators in the industry. Process safety incidents decreased approximately 65 percent and environmental incidents decreased 12 percent. Safe, environmentally responsible operations are our top priority.
During 2011, our strong operations and advantaged asset positions helped drive profitability across all major business segments. Our scale and cracking flexibility allowed us to reap the benefits of shale gas discoveries in the United States. Low natural gas and natural gas liquids prices resulted in strong margins for our North American olefins and polyolefins business. Expanding our crude mix and improving reliability at the Houston refinery increased overall throughput and positively impacted financial results in the refining and oxyfuels segment. Our intermediates and derivatives business also performed well. Compared to 2010, total EBITDA increased 31 percent from $4.0 billion to $5.3 billion. Revenues were also 24 percent higher.
We generated substantial cash flow that enabled us to improve our balance sheet and reward shareholders. We reduced debt by $2.1 billion and paid $2.9 billion in dividends. Over the course of 2011, an investment in LyondellBasell yielded a ten percent return, five times higher than the S&P 500 index. We hit the target in other areas as well. From a manufacturing perspective, we completed three key maintenance turnarounds and increased our ethane feedstock flexibility by approximately five percent. We also announced plans to establish a propylene oxide joint venture in China that will strengthen our focus on large-scale, low-cost operations and allow us to supply emerging economies. We will continue to invest in our existing assets and grow our company.
We will, of course, always focus on costs and the prudent use of our capital. This is a hallmark of a great company - regardless of financial strength. Streamlining our European organization is one of the necessary actions we took in 2011 to aggressively improve our cost position and strengthen our competitive posture.
Finally, establishing strong governance was an important goal for us. We expanded our independent Supervisory Board by adding four distinguished business leaders with world-class expertise. We also introduced a new Code of Conduct and trained the global workforce on our expectations for conducting business in an ethical and responsible manner.
In the pages that follow, we hope you will note how targeting excellence has served our stakeholders. We are aiming high with a goal to be the top competitor in our industry. With the substantial improvements we have made over the last couple of years, I believe we are well positioned for profitable growth and continued success.
James L. Gallogly,
Chief Executive Officer