corresp
Via EDGAR and Federal Express
August 16, 2011
Pamela Long
Assistant Director
United States Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, D.C. 20549
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Re: |
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Lyondell Chemical Company
Lyondell Basell Industries N.V.
Registration Statement on Form S-4
Filed June 22, 2011
File No. 333-175077
Form 10-K for the Fiscal Year Ended December 31, 2010
Filed March 18, 2011
File No. 001-34726 |
Ladies and Gentlemen:
Set forth below are the responses of Lyondell Chemical Company, a Delaware corporation
(LCC), LyondellBasell Industries N.V., an entity organized under the laws of The Netherlands
(LBI NV or the Company) and the registrants named in the Registration Statement (as defined
below) (together with LCC and the Company, the Registrants) to comments received from the staff
of the Division of Corporation Finance (the Staff) of the Securities and Exchange Commission (the
Commission) by letter dated July 19, 2011, with respect to the registration statement on Form S-4
initially filed by the Company with the Commission on June 22, 2011, File No. 333-175077 (the
Registration Statement).
Concurrently with the submission of this letter, we are filing through EDGAR Amendment No. 1
(Amendment No. 1) to our Registration Statement. For your convenience, we have hand delivered
three full copies of Amendment No. 1, as well as three copies of Amendment No. 1 marked to show all
changes made since the initial filing of the Registration Statement.
For your convenience, each response is prefaced by the exact text of the Staffs corresponding
comment in bold, italicized text. All references to page numbers and captions correspond to
Amendment No. 1 unless otherwise specified. All terms used but not otherwise defined herein have
the definitions ascribed thereto in Amendment No. 1. In addition, where appropriate, we will
incorporate the Staffs comments in future filings we make with the Commission.
Securities and Exchange Commission
August 16, 2011
Page 2
Registration Statement on Form S-4
General
1. |
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We note that you are registering the exchange notes in reliance on our position enunciated in
Exxon Capital Holdings Corp., SEC No-Action Letter (April 13, 1988). |
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See also Morgan Stanley & Co. Inc., SEC No-Action Letter (June 5, 1991) and Shearman &
Sterling, SEC No-Action Letter (July 2, 1993). Accordingly, with the next amendment, please
provide us with a supplemental letter stating that you are registering the exchange offer
in reliance on our position contained in these letters, and include the representations
contained in the Morgan Stanley and Shearman & Sterling no-action letters. |
Response: Concurrently with this letter, the Registrants are transmitting electronically a
supplemental letter which states that the Registrants are registering the exchange offer in
reliance on the Commissions position contained in the above referenced no-action letters. The
supplemental letter includes the representations contained in the Morgan Stanley & Co. Inc.
No-Action Letter (available June 5, 1991) and the Shearman & Sterling No-Action Letter (available
July 2, 1993).
Prospectus Cover Page
2. |
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Please confirm supplementally that the offer will be open for at least 20 full business days
to ensure compliance with Rule 14e-1(a). Further, please confirm that the expiration date will
be included in the final prospectus disseminated to security holders and filed pursuant to the
applicable provisions of Rule 424. |
Response: The Registrants hereby confirm that the offer will be open for at least 20 full business
days to ensure compliance with Rule 14e-1(a). The Registrants hereby confirm that the expiration
date will be included in the final prospectus disseminated to security holders and filed pursuant
to the applicable provisions of Rule 424.
3. |
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As currently represented, the offer could be open for less than 20 full business days due to
the 5:00 p.m. expiration time instead of an expiration time of midnight on what ultimately may
be the twentieth business day following commencement. See Question and Answer Eight in
Exchange Act Release No. 16623 (March 5, 1980). Please confirm that the offer will be open at
least through midnight on the twentieth business day. See Rule 14d-1(g)(3). |
Response: We have revised our disclosure in the Registration Statement to provide that the exchange
offer will expire at midnight on the expiration date. Please see the cover, pages 5, 8, 240 and
244 and Annex A of Amendment No. 1.
Securities and Exchange Commission
August 16, 2011
Page 3
4. |
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Please revise the prospectus cover page to disclose the following: |
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Broker-dealers who receive new notes pursuant to the exchange offer acknowledge
that they will deliver a prospectus in connection with any resale of such new notes;
and |
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Broker-dealers who acquired the old notes as a result of market-making or other
trading activities may use the prospectus for the exchange offer, as supplemented or
amended, in connection with resales of the new notes. |
Response: We have revised our disclosure in the Registration Statement to disclose the above
bulleted information regarding broker-dealers. Please see the cover page of Amendment No. 1.
Cautionary Statements Regarding Forward-Looking Statements, page 1
5. |
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The safe harbor for forward-looking statements provided in the Private Securities Litigation
Reform Act of 1995 does not apply to statements made in connection with a tender offer. See
Section 27A(b)(2)(C) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(C) of
the Securities Exchange Act of 1934, as amended. Therefore, please delete the reference to the
safe harbor, or state explicitly that the safe harbor protections it provides do not apply to
statements made in connection with the offer. |
Response: We have revised our disclosure in the Registration Statement to remove any references to
the safe harbor. Please see page 1 of Amendment No. 1.
Risk Factors, page 12
6. |
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In the introductory paragraph, we note your statement, The risks described below are not the
only risks facing us or that may materially adversely affect our business. Please either
remove this limitation on the scope of your risk factors or revise your disclosure to clarify,
if true, that you have discussed all known material risk factors. |
Response: We have revised our disclosure in the Registration Statement to clarify that all known
material risk factors have been discussed. Please see page 12 of Amendment No. 1.
Managements Discussion and Analysis, page 36
Securities and Exchange Commission
August 16, 2011
Page 4
Results of Operations, page 41
7. |
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We note your disclosures that changes in revenue for each period presented were due to
multiple factors. For example, in your comparison of revenues for the first quarter of 2011
versus the first quarter of 2010, you state that higher average product sales prices and
higher sales volumes contributed to the increase in revenues. To the extent material and
quantifiable, please disclose the percentage or dollar amount of change attributable to each
factor. Refer to Item 303(a)(3)(iii) of Regulation S-K. |
Response: We have revised our disclosures in Amendment No.1 to attribute percentage changes to each
factor discussed as it relates to the overall percentage change in revenue. In addition the
Company will include similar disclosures to comply with item 303(a)(3)(iii) of Regulation S-K in
future filings containing Management Discussion and Analysis.
Quantitative and Qualitative Disclosures about Market Risk, page 74
Foreign Exchange Risk, page 74
8. |
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To the extent material, please provide either the tabular presentation, sensitivity analysis,
or value at risk disclosure required by Item 305(a) of Regulation S-K. |
Response: We have revised our disclosure in Amendment No. 1 regarding foreign currency risk to
provide the sensitivity analysis in accordance with Item 305(a) of Regulation S-K. Please see page
76 of Amendment No. 1.
9. |
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Please disclose the specific exchange rate fluctuations that are primarily responsible for
the translation gains reported on pages F-6 and F-229. Such amounts are material to
comprehensive income. Similarly, disclose on page 42 the specific circumstances which caused
the material March 31, 2010 foreign exchange loss. |
Response: We have disclosed the exchange rate fluctuation that is primarily responsible for the
translation gains in the six months ended June 30, 2011 in the Overview section of our
Managements Discussion and Analysis beginning on page 36 of Amendment No.1. We also have included
additional disclosure in the Quantitative and Qualitative Disclosures About Market Risk section
of Amendment No. 1 beginning on page 76 of Amendment No. 1]. We believe the additional
disclosures will assist investors in understanding the differences between the effects of currency
translations on the Companys comprehensive income as opposed to those that are solely recognized
in the income statement.
Securities and Exchange Commission
August 16, 2011
Page 5
Finally, the Company notes that Amendment No. 1 no longer includes March 31, 2010 financial
statements as the Company has updated the financial statements and information for the second
quarter of 2011 pursuant to Rule 3-12 of Regulation S-X. The Company has included discussion on
page 77 related to the foreign exchange losses during the six months ended June 30, 2010 to address
the Staffs comment.
Description of Business, page 76
Segments, page 76
10. |
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In the table beginning on page 78, we note you disclose the annual capacity for each of your
products. Please also disclose the actual capacity used. |
Response: We believe that the descriptions of our business and properties currently contained in
the Registration Statement comply with Items 101 and 103 of Regulation S-K. As described in the
Registration Statement, the annual processing capacities disclosed are calculated by estimating the
average number of days in a typical year that a production unit of a plant is expected to operate,
after allowing for downtime for regular maintenance, and multiplying that number by an amount equal
to the units optimal daily output based on the design raw material mix. We believe this
information is useful to investors, as it provides information regarding how much of each of the
listed products our facilities are capable of producing each year, thereby giving a detailed
description of our Company that we respectfully submit is not required by Regulation S-K, nor is it
generally disclosed by participants in our industry.
We recognize that actual capacity may, in certain circumstances, be useful to investors and
appreciate the Staffs comment. We note that because of the usefulness of detailed capacity
information, we disclose production and sales volumes of our principle products for each of our
reportable segments in our Managements Discussion and Analysis of Financial Condition and Results
of Operations. Please see pages 48, 53, 57 and 60 of Amendment No. 1. We believe these
disclosures sufficiently inform investors about the volumes we have produced and the impact on our
results of operations.
Directors, Executive Officers and Corporate Governance, page 108
Board Committees, page 120
Audit Committee, page 120
11. |
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In the first sentence, you state that the audit committee consists of Messrs. Smith, Aigrain,
Gwin, and Kleinman. In the second sentence, you refer to Mr. Carroll. Please revise your
disclosure to clarify whether Mr. Carroll is a member of the audit committee. |
Securities and Exchange Commission
August 16, 2011
Page 6
Response: The reference to Mr. Carroll in the second sentence was an error, as was the omission of
Messrs. Aigrain and Gwin from that sentence. We have corrected the error; please see page 122 of
Amendment No. 1.
Compensation Committee Interlocks and Insider Participation, page 121
12. |
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We note your reference to Item 404 of Regulation S-K in the first sentence. It appears as if
you mean Item 407(e)(4) of Regulation S-K. Please revise your disclosure as appropriate. |
Response: We have revised the disclosure to refer to Item 407(e)(4) of Regulation S-K. Please see
page 123 of Amendment No. 1.
Executive Compensation, page 124
Compensation Discussion and Analysis, page 124
Overview of Executive Compensation Program, page 126
Benchmarking, page 126
13. |
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We note your statement in the last sentence of the first paragraph that your human resources
departments recommendations were designed to position each element of each named executive
officers total direct compensation at approximately the 50th percentile in relation to
similar compensation paid to the executives peers. Please disclose how each named executive
officers actual compensation compared to his peers. |
Response: We have revised the disclosure as requested. Please see page 129 of Amendment No. 1.
Elements of our Executive Compensation Program, page 128
Annual Cash Incentive Compensation, page 128
14. |
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Please disclose how you determined the target bonus percentage for each of your named
executive officers. |
Response: We have disclosed how the Company determined the target bonus percentages for each of the
named executive officers. Please see page 131 of Amendment No. 1.
Securities and Exchange Commission
August 16, 2011
Page 7
15. |
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On page 130, we note your reference to award units with safety, cost, customer service, and
business results metrics. To the extent these metrics are quantifiable, please disclose the
targets as well as the actual results achieved. If you believe that disclosure of these
metrics is not required because disclosure would result in competitive harm such that the
information could be excluded under Instruction 4 to Item 402(b) of Regulation S-K, please
provide a detailed explanation supporting your conclusion. Furthermore, to the extent that you
have a sufficient basis to keep the information confidential, please expand your disclosure to
discuss how difficult or how likely it would be to achieve the undisclosed objectives. This
comment also applies to the return on assets and costs metrics discussed on page 131. |
Response: We have revised our disclosure to provide more information about the award units we use.
We also have disclosed the award units used in determining the weighted average unit score for each
named executive officer (other than for Mr. Gallogly who is evaluated based on the weighted average
of all of the Companys 68 award units) and the weighted payout for each named executive officer
based on his award units ratings. Please see page 132 of Amendment No. 1.
As described in the Compensation Discussion and Analysis, the Companys 2010 STI is not a formulaic
plan that pays out based solely on the achievement of specified targets. A high degree of
discretion and subjective judgment goes into the award units ratings. Management and the
Compensation Committee review and discuss results in certain specified areas of performance,
including safety, cost, customer service and business results for each award unit. Internal
budgeting and forecast measures for award units are used in the review and discussion of cost and
business results. These measures are reviewed in conjunction with other factors that management
believes has affected results, either positively or negatively, including general and industry
market conditions, among others specific to the performance of the award unit. . . The Company has
revised its disclosure to more specifically describe the considerations that are used in
determining payouts for award units which, as described, the Company does not believe require
disclosure under Item 402(b) of Regulation S-K.
Similarly, with respect to the return on assets and costs metrics discussed on page 134 for the
Companys 2010 MTI, there is no specific quantifiable target for either of the metrics. At the end
of the three-year performance period, the Compensation Committee will review the percentage change
between January 1, 2010 and December 31, 2012 of the Companys return on assets and costs and,
considering the factors described under Considerations in the table on page 134 will determine
an appropriate payout based on those results. We have revised the disclosure on page 134 of
Amendment No. 1 to clarify.
Securities and Exchange Commission
August 16, 2011
Page 8
16. |
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We note your disclosure on page 131 that the compensation committee approved awards in
multiples of between 1.2 and 1.5 times the calculated award. Please disclose the actual awards
approved for each named executive officer. |
Response: We have disclosed the multiples approved for each named executive officer. Please see
page 134 of Amendment No. 1.
Description of the Exchange Notes, page 154
Change of Control, page 171
17. |
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In the last paragraph on page 171, we note your statement regarding compliance with the
requirements of Section 14(e) of the Securities Exchange Act of 1934, as amended, and any
other securities laws or regulations. Please specifically disclose that any repurchase offer
made pursuant to the change in control provisions will comply with any applicable regulations
under the federal securities laws, including Rule 14e-1 under the Exchange Act. |
Response: We have revised our disclosure in the Registration Statement to specifically disclose
that any repurchase offer made pursuant to the change of control provisions will comply with any
applicable regulations under the federal securities laws, including Rule 14e-1 under the Exchange
Act. Please see page 173 of Amendment No. 1.
The Exchange Offer, page 237
Purpose and Effect of the Exchange Offer, page 237
18. |
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In the third paragraph, you discuss what you will do in the event the exchange offer is not
consummated by the Exchange Date. The first paragraph suggests that the Exchange Date is April
29, 2010. Please disclose the current status of the steps you outline in the third paragraph
as it appears the exchange offer was not consummated by the Exchange Date. |
Response: We have revised the language in the third paragraph to more accurately describe our
obligations to file a shelf registration statement in the event the exchange offer is not
consummated by the Exchange Date of April 29, 2011.
Extensions, Delays in Acceptance, Termination or Amendment, page 239
Securities and Exchange Commission
August 16, 2011
Page 9
19. |
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Please advise us as to how oral notice of any extension is reasonably calculated to reach
registered holders of the outstanding notes or otherwise satisfies the requirements of Rule
14e-1(d). |
Response: We have revised our disclosure in the Registration Statement to clarify that written
notice is required for any extension or delay in acceptance, termination or amendment of the
exchange offer. Please see page 241 of Amendment No. 1.
Certain United States Federal Income Tax Consequences, page 250
20. |
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Please remove the word certain from this heading and other relevant discussion, such as in
the prospectus summary. Similarly, please remove the word principal from the first sentence
in this section. All material tax considerations should be described. |
Response: We have revised our disclosure in the Registration Statement to remove the word certain
from the heading Certain United States Federal Income Tax Consequences as well as from all other
relevant discussion. Similarly, we have removed the word principal from the first sentence in
the above-referenced section. Please see pages 8 and 252 of this preliminary prospectus.
Plan of Distribution, page 251
21. |
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Please include disclosure in this section alerting investors that, if they wish to exchange
their original notes in the exchange offer, they must make certain representations as set
forth in the prospectus and in the letter of transmittal. |
Response: We have revised our disclosure in the Registration Statement to acknowledge that any
investors that wish to exchange their original notes in the exchange offer must make certain
representations as set forth in the prospectus and in the letter of transmittal. Please see page
253 of Amendment No. 1.
Financial Statements, page F-1
22. |
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We understand that you had expected to file Basell Orlen JV financial statements consistent
with the guidance in Article 3-09 of Regulation S-X. Please clarify for us why the financial
statements of Basell Orlen JV have been excluded, and provide any relevant calculations. |
Response:
Securities and Exchange Commission
August 16, 2011
Page 10
As required by Rule 3-09, we performed the significance tests specified in subsections (1) and (3)
of Rule 1-02(w) of Regulation S-X, substituting 20% for 10% to determine the significance in
accordance with Rule 3-09. Based on the calculation Basell Orlen Polyolefins Sp. Z.o.o. (BOP)
did not meet either test for any of the presented years and as a result the financial statements of
the investment were not included in the Companys Form 10-K or LyondellBasell Subholdings B.V.
(LBSH BV) annual financial statements.
Investment test (Rule 1-02(w)(1): We compared our and our other subsidiaries consolidated total
assets to investments in and advances to BOP at each annual balance sheet date.
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December 31, |
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December 31, |
Millions of dollars |
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2010 |
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2009 |
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Total assets (LBSH BV) |
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13,545 |
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10,470 |
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Total Assets (LBI NV) |
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25,494 |
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27,761 |
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Equity method investments including advances to BOP |
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394 |
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382 |
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percentage of LBSH BV |
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3 |
% |
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4 |
% |
percentage of LBI NV |
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2 |
% |
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1 |
% |
Income test (Rule 1-02(w)(3): The significance tests must be computed using the investors
basis of accounting. Our consolidated financial statements are prepared under accounting principles
generally accepted in the United States. (U.S. GAAP). The significance tests were computed using
U.S. GAAP financial data in both the numerator and denominator. We compared, on a consolidated
basis, (i) our income from continuing operations before income taxes, extraordinary items, and
cumulative effect of changes in accounting principles exclusive of amounts attributable to any
non-controlling interests to (ii) our interest in the equity income or loss from BOP. Income
averaging was used to determine the denominator for the income test for 2009. Our calculation is
reflected in the table below.
Rule 3.09 Testing
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5-Yr. Average |
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Pre-Tax Income for the year ended |
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May 1 to |
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Income per |
Particulars |
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December 31 |
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December 31 |
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Rule 1-02(w) |
($/Million)
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2006 |
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2007 |
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2008 |
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2009 |
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2010 |
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2006 to 20082
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LBI NV pre-tax income (loss)
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667 |
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980 |
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(8,168 |
) |
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(4,250 |
) |
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1,727 |
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329 |
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LBSH BV pre-tax income (loss)
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1,058 |
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(97 |
) |
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(379 |
) |
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97 |
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755 |
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212 |
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Pre-Tax Income |
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2008 |
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2009 |
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2010 |
Basell Orlen Polyolefins Sp. Z.o.o. pre-tax income (loss) |
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(32 |
) |
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6 |
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24 |
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% of LBI NVs total income |
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0 |
% |
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2 |
% |
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1 |
% |
% of LBSH BVs total income |
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9 |
% |
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3 |
% |
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3 |
% |
Conclusion
Securities and Exchange Commission
August 16, 2011
Page 11
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LBI NVs equity investment in BOP as a percentage of total assets is 2% and 1% as
of December 31, 2010 and 2009 respectively. LBSH BVs equity investment in BOP as a
percentage of total assets is 3% and 4% of as of December 31, 2010 and 2009 respectively. |
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BOPs pre-tax income as a percentage of LBI NVs pre-tax income was 1% and 2% for
the 8 month period ended December 31, 2010 and for the year ended December 31, 2009,
respectively. BOPs pre-tax income as a percentage of LBSH BVs pre-tax income was 3%, 3% and
9% for the 8 month period ended December 31, 2010 and for the years ended December 31, 2009
and 2008, respectively. |
We therefore concluded that the separate audited financial statements of BOP were not
required under SEC Rule 3-09 of Regulation S-X.
23. |
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Please note the updating requirements outlined in Article 3-12 of Regulation S-X. |
Response: We have updated our financial statements in accordance with Article 3-12 of Regulation
S-X in Amendment No. 1.
Note 18 Supplemental Guarantor Information, page F-28
24. |
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Please disclose here and on page F-126 whether each subsidiary guarantor is 100% owned as
required by Article 3-10(i)(8)(i) of Regulation S-X. |
Response: We have revised the disclosure to clarify that each subsidiary guarantor is 100% owned.
Note 21 Commitments and Contingencies, page F-114
25. |
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For each contingency that meets the requirements in paragraph 50-3 of ASC 450-20-50, disclose
an estimate of the possible additional loss or range of loss or a statement that such an
estimate cannot be made. For the BASF lawsuit, please disclose the amount accrued and an
estimate of the possible additional loss or range of loss. |
Response: We have made the requested disclosures, as requested. Please note that the Company has
disclosed the range of possible loss for the BASF lawsuit, but has not disclosed the amount accrued
for the BASF lawsuit, as we do not believe disclosure of the amount accrued is necessary for our
financial statements not to be misleading. The Company believes that the description of the BASF
proceedings and the range of loss, as
Securities and Exchange Commission
August 16, 2011
Page 12
disclosed in Amendment No. 1, provide sufficient detail to inform investors and comply with the
requirements of ASC 450.
26. |
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Regarding the Access Indemnity Demand, you state you cannot determine the amount of
liability that may be sought from LBIH. Please clarify whether you can make an estimate of
the possible loss or range of loss, and provide the disclosure required by paragraph 50-4 of
ASC 450-20-50. |
Response: We have revised our disclosure as requested. Please see page F-127 of Amendment No. 1.
Note 27 Supplemental Guarantor Information, page F-127
27. |
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Please tell us the long-term receivables amount that has been aggregated with Investments
on the Balance Sheets. Compliance with Article 10-01(a)(2) of Regulation S-X should be clearly
evident. |
Response:
In response to your comment, we have modified the condensed consolidating balance sheets included
in Amendment No. 1 to separately present amounts that are 10% or more of total assets or have
changed more than 25% from the amounts presented for the previous fiscal year end in compliance
with Rule 3-10(a)(2).
In the condensed consolidating financial information presented in the Registration Statement, we
included the following items in Investments and Long-Term Receivables for all periods presented:
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Investments in consolidated subsidiaries |
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Investments in PO joint ventures |
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Long-term notes receivable, affiliates |
As a result of our analysis, we have determined that we should have presented these items using the
following classification:
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Investments in consolidated subsidiaries |
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Other investments and long-term receivables |
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o |
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Equity investments |
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o |
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Investments in PO joint ventures |
Securities and Exchange Commission
August 16, 2011
Page 13
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Long-term notes receivable, affiliates |
In addition, the Company will comply with the requirements of Rule 3-10(a)(2) in future filings.
The attached analysis in Figure A on the following page reflects our calculation and the revised
presentation.
Securities and Exchange Commission
August 16, 2011
Page 14
LyondellBasell Industries N.V.
Fig A
Presentation of Investments and Long-Term Receivables
Article 10-01(a)(2) of Regulation S-X
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Lyondell |
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(Millions of U.S. dollars) |
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LyondellBasell N.V. |
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Basell AF |
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LCC |
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Guarantors |
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Non-Guarantors |
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Eliminations |
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Consolidated |
Total Assets |
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14,855 |
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12,817 |
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2,823 |
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17,516 |
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16,213 |
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|
|
19,608 |
|
|
|
|
|
|
|
19,458 |
|
|
|
|
|
|
|
|
|
|
|
17,581 |
|
|
|
|
|
|
|
18,465 |
|
|
|
|
|
|
|
17,729 |
|
|
|
|
|
|
|
|
|
|
|
15,801 |
|
|
|
|
|
|
|
17,847 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10% of total assets |
|
|
1,486 |
|
|
|
|
|
|
|
|
|
|
|
1,282 |
|
|
|
|
|
|
|
282 |
|
|
|
|
|
|
|
1,752 |
|
|
|
|
|
|
|
|
|
|
|
1,621 |
|
|
|
|
|
|
|
1,961 |
|
|
|
|
|
|
|
1,946 |
|
|
|
|
|
|
|
|
|
|
|
1,758 |
|
|
|
|
|
|
|
1,847 |
|
|
|
|
|
|
|
1,773 |
|
|
|
|
|
|
|
|
|
|
|
1,580 |
|
|
|
|
|
|
|
1,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June |
|
|
|
|
|
|
|
|
|
|
Dec. |
|
|
|
|
|
Dec. |
|
|
|
|
|
June |
|
|
|
|
|
|
|
|
|
Dec. |
|
|
|
|
|
Dec. |
|
|
|
|
|
June |
|
|
|
|
|
|
|
|
|
Dec. |
|
|
|
|
|
Dec. |
|
|
|
|
|
June |
|
|
|
|
|
|
|
|
|
Dec. |
|
|
|
|
|
Dec. |
|
|
|
|
|
June |
|
Dec. |
|
Dec. |
|
June |
|
Dec. |
|
Dec. |
|
|
|
30, |
|
|
|
|
|
|
|
|
|
|
31, |
|
|
|
|
|
31, |
|
|
|
|
|
30, |
|
|
|
|
|
|
|
|
|
31, |
|
|
|
|
|
31, |
|
|
|
|
|
30, |
|
|
|
|
|
|
|
|
|
31, |
|
|
|
|
|
31, |
|
|
|
|
|
30, |
|
|
|
|
|
|
|
|
|
31, |
|
|
|
|
|
31, |
|
|
|
|
|
30, |
|
31, |
|
31, |
|
30, |
|
31, |
|
31, |
|
|
|
2011 |
|
|
|
10 |
% |
|
|
25 |
% |
|
2010 |
|
|
10 |
% |
|
2009 |
|
|
10 |
% |
|
2011 |
|
|
10 |
% |
|
|
25 |
% |
|
2010 |
|
|
10 |
% |
|
2009 |
|
|
10 |
% |
|
2011 |
|
|
10 |
% |
|
|
25 |
% |
|
2010 |
|
|
10 |
% |
|
2009 |
|
|
10 |
% |
|
2011 |
|
|
10 |
% |
|
|
25 |
% |
|
2010 |
|
|
10 |
% |
|
2009 |
|
|
10 |
% |
|
2011 |
|
2010 |
|
2009 |
|
2011 |
|
2010 |
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments and long-term receivables: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in
consolidated
subsidiaries |
|
|
14,105 |
|
|
|
X |
|
|
|
|
|
|
|
12,070 |
|
|
|
X |
|
|
|
1,317 |
|
|
|
X |
|
|
|
12,197 |
|
|
|
X |
|
|
|
|
|
|
|
10,489 |
|
|
|
X |
|
|
|
15,724 |
|
|
|
X |
|
|
|
5,170 |
|
|
|
X |
|
|
|
|
|
|
|
5,122 |
|
|
|
X |
|
|
|
1,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31,472 |
) |
|
|
(27,681 |
) |
|
|
(18,059 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,643 |
|
|
|
|
|
|
|
|
|
|
|
1,587 |
|
|
|
X |
|
|
|
1,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,643 |
|
|
|
1,587 |
|
|
|
1,085 |
|
Investments in PO
joint ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
436 |
|
|
|
|
|
|
|
|
|
|
|
437 |
|
|
|
|
|
|
|
922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
436 |
|
|
|
437 |
|
|
|
922 |
|
Other investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
2 |
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
4 |
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
48 |
|
|
|
|
|
|
|
|
|
|
|
48 |
|
|
|
|
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48 |
|
|
|
54 |
|
|
|
67 |
|
Notes receivable,
affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
500 |
|
|
|
|
|
|
|
2,901 |
|
|
|
X |
|
|
|
(500 |
) |
|
|
(500 |
) |
|
|
(2,901 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other investments and
long-term receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
108 |
|
|
|
|
|
|
|
|
|
|
|
102 |
|
|
|
|
|
|
|
59 |
|
|
|
|
|
|
|
(63 |
) |
|
|
(75 |
) |
|
|
|
|
|
|
45 |
|
|
|
27 |
|
|
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposed presentation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in
consolidated
subsidiaries |
|
|
14,105 |
|
|
|
|
|
|
|
|
|
|
|
12,070 |
|
|
|
|
|
|
|
1,317 |
|
|
|
|
|
|
|
12,197 |
|
|
|
|
|
|
|
|
|
|
|
10,489 |
|
|
|
|
|
|
|
15,724 |
|
|
|
|
|
|
|
5,170 |
|
|
|
|
|
|
|
|
|
|
|
5,122 |
|
|
|
|
|
|
|
1,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31,472 |
) |
|
|
(27,681 |
) |
|
|
(18,059 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other investments and
long-term receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
2,235 |
|
|
|
|
|
|
|
|
|
|
|
2,174 |
|
|
|
|
|
|
|
2,120 |
|
|
|
|
|
|
|
(63 |
) |
|
|
(75 |
) |
|
|
|
|
|
|
2,172 |
|
|
|
2,105 |
|
|
|
2,133 |
|
Notes receivable,
affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
500 |
|
|
|
|
|
|
|
2,901 |
|
|
|
|
|
|
|
(500 |
) |
|
|
(500 |
) |
|
|
(2,901 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Legend:
X indicates items that are 10% or more of Total Assets and/or items that have changed by 25% or more since the previous year end.
28. |
|
Please disclose any significant restrictions on the ability of the parent company or any
guarantor to obtain funds from its subsidiaries by dividend or loan. See Article 3-10(i)(9) of
Regulation S-X. |
Response: Our Guarantors are currently not restricted from obtaining funds by dividend or loan from
their subsidiaries. We have provided the requested disclosure. Please see page F-139 of Amendment
No. 1. In addition, the Company will include similar disclosure in future filings.
Note 12 Equity Investments, page F-275
29. |
|
Please clarify for us how the previously discussed issues concerning assets contributed to
the JV have been reflected in these financial statements. |
Response: Effective May 1, 2010 (the Emergence Date), we adopted fresh-start accounting in
accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification
Topic 852, Reorganizations. Fresh-start accounting required us to allocate the reorganization
value approved by the U.S. Bankruptcy Court to the individual assets and liabilities based upon
their estimated fair values. As part of our emergence activity, the investment in BOP was subject
to fair value adjustment. Therefore, at the Emergence Date the investment in BOP was recorded at
its determined fair value of $78 million.
In September 2009, in connection with the fair values developed in conjunction with the estimation
of its reorganization enterprise value, the Predecessor determined that there was a diminution in
the value of its investments in certain joint ventures and such loss was other than temporary. The
pre-impairment carrying value of BOP was $168 million. As a result of the other than temporary
diminution in value of the investment we recognized a pretax impairment charge totaling $88
million.
In August 2005, Access Industries acquired Basell BV. At this time Basell BVs interest in BOP was
subject to fair valuation.
As such, for all periods presented in the financial statements of LyondellBasell Industries N.V.
and LBSH BV, the equity interest in BOP has been reflected at fair value and we have recognized
equity income or loss during each reporting period.
Signatures, page II-5
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For each company that signs the registration statement, please ensure the principal executive
officer, principal financial officer, and principal accounting officer or controllers sign in
those capacities. In this regard, we note not all of these capacities |
Securities and Exchange Commission
August 16, 2011
Page 16
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are identified for the companies signing on pages II-9 through II-14, pages II-16 through
II-17, page II-20, page II-24, and pages II-26 through II-27. |
Response: We have revised our disclosure in the Registration Statement to identify the principal
executive officer, principal financial officer and principal accounting officer for each
Registrant. We further note that the principal executive officer, principal financial officer and
principal accounting officer for each Registrant have signed the Registration Statement. Please
see pages II-5 through II-27 of the Registration Statement.
Exhibit 5.2
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In paragraph 3 on page 4, we note that counsel limits its opinion to the date hereof.
Please note that depending on when the registration statement goes effective, counsel may need
to file an updated opinion. In the alternative, counsel may remove the date limitation and
file a new opinion with the next amendment. |
Response: A newly dated opinion has been filed as Exhibit 5.2 to Amendment No. 1. An updated
opinion will be filed before effectiveness, if necessary.
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Please revise the first sentence of paragraph 4 on page 5 of the opinion to clarify that the
opinion is issued in connection with the registration statement and to remove the statement
that it cannot be disclosed to or relied upon by any other person. While we do not object to
limiting the purpose of the opinion to its use in connection with the registration statement,
counsel may not limit the persons who may rely on the opinion. |
Response: Counsel to the Company has revised the opinion as requested. Please see Exhibit 5.2.
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Please have counsel revise its opinion to remove the assumptions contained in paragraphs
3(a), 3(b), 3(f), 3(g), 3(h), 3(i), 4(a), and 4(b) as these assumptions are inappropriate in
light of counsels opinion. Note that we do not object to counsel stating that it is relying
on representations made by LyondellBasell Industries N.V., and we do not object to an
assumption that the indenture is the binding obligation of all parties other than
LyondellBasell Industries N.V. |
Response: Counsel to the Company has revised the opinion as requested, other than the deletion of
assumption 4(a). Assumption 4(a) has been revised in a manner that we believe will be acceptable
to the Staff. The intended assumption of 4(a) is that the Indenture is legal, valid and binding
against all parties to the Indenture other than the Company, who is the
Securities and Exchange Commission
August 16, 2011
Page 17
Dutch Guarantor that is the basis of the opinion. We believe that it is standard for opinion givers to
assume the enforceability of a contract against parties who are organized outside of the legal
jurisdiction as to which the opinion giver is opining. Assumption 4(a) has been revised to clarify
that this was the intent.
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Please have counsel revise its opinion to state that Vinson & Elkins may rely on it. |
Response: Counsel to the Company has revised the opinion included as Exhibit 5.2 to Amendment No. 1
to state that our legal advisors may rely on it. Please see Exhibit 5.2.
Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2010
Item 9A. Disclosure Controls and Procedures, page 170
Evaluation of Disclosure Controls and Procedures, page 170
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We note your definition of disclosure controls and procedures appears to be based on the
definition of disclosure controls and procedures set forth in Exchange Act Rules 13a-15(e) and
15d-15(e) under the Exchange Act. As described, however, this description does not fully
conform to the definition set forth in those rules. Please confirm, if true, that the
conclusion regarding effectiveness is based on the full definition of disclosure controls and
procedures set forth in the applicable rules, and revise accordingly in future filings.
Alternatively, you may simply state in future filings that your certifying officers concluded
on the applicable dates that your disclosure controls and procedures were or were not
effective. |
Response: We confirm that the conclusion regarding effectiveness is based on the full definition of
disclosure controls and procedures set forth in the applicable rules, and will revise its
disclosure accordingly in future filings.
* * * * *
The Company acknowledges that:
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the Company is responsible for the adequacy and accuracy of the disclosure in the
filing; |
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staff comments or changes to disclosure in response to comments do not foreclose the
Commission from taking any action with respect to the filing; and |
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the Company may not assert Staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States. |
Securities and Exchange Commission
August 16, 2011
Page 18
Please direct any questions that you have with respect to the foregoing or with respect to the
Registration Statement or Amendment No. 1 to me at (713) 309-7929.
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Very truly yours, |
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LYONDELLBASELL INDUSTRIES N.V. |
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By:
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/s/ Brenton A. Pharis |
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Name:
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Brenton A. Pharis
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Title:
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Counsel, Corporate & Securities |
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cc: |
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Alfred Pavot, Staff Accountant, Securities and Exchange Commission
Terence OBrien, Accounting Branch Chief, Securities and Exchange Commission
Jessica Dickerson, Staff Attorney, Securities and Exchange Commission |