- Full-year 2002 results comparable to 2001 as trough conditions continue in chemical industry. - Rising energy costs and scheduled maintenance weaken fourth-quarter results at Equistar and Intermediate Chemicals & Derivatives. - Venezuelan oil-industry strike has minimal fourth-quarter earnings impact on LYONDELL-CITGO Refining. - Broad price increases announced for first quarter 2003.
HOUSTON, Jan. 30 /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE: LYO) today announced a net loss for the fourth quarter of $93 million, or $0.58 per share. This compares to a net loss of $53 million, or $0.46 per share, for the fourth quarter of 2001, and a net loss of $2 million, or $0.02 per share, for the third quarter 2002.
For the full year 2002, Lyondell had a net loss of $148 million, or $1.10 per share, compared to a net loss of $150 million, or $1.28 per share, for 2001.
Lyondell Earnings Summary
Millions of dollars Full Full
except per share Year Year
amounts 4Q2002 4Q2001 3Q2002 2002 2001
Sales and Other
Operating Revenues $890 $709 $855 $3,262 $3,193
Net Loss (93) (53) (2) (148) (150)
Basic and Diluted Net
Loss per Share (A) (0.58) (0.46) (0.02) (1.10) (1.28)
Weighted Average
Shares Outstanding
(millions) (A) 159.9 117.5 140.3 133.9 117.6
(A) Lyondell sold 8.28 million shares of common stock on July 1, 2002 in
a public offering and issued 34 million shares of Series B common
stock to Occidental on August 22, 2002 in connection with the
purchase of Occidental's 29.5% interest in Equistar. Lyondell paid a
dividend to Occidental on December 31, 2002 by issuing 568,224 shares
of Series B common stock to Occidental in lieu of a dividend payment
in cash. Common shares outstanding on December 31, 2002 were
160.4 million shares.
EBITDA (earnings before net interest, taxes, depreciation and amortization) for Lyondell and the proportionate share of its joint ventures was $145 million in the fourth quarter 2002. Proportionate EBITDA in the fourth quarter 2001 was $136 million, and in the third quarter of 2002 was $241 million.
Supplemental Financial Data
Full Full
Year Year
Millions of dollars 4Q2002 4Q2001 3Q2002 2002 2001
Sales and Other
Operating Revenues
(Lyondell and
proportionate share
of ventures) (A) $2,461 $1,561 $2,189 $8,166 $7,658
EBITDA (Lyondell and
proportionate share
of ventures) (B) 145 136 241 742 738
(A) Includes revenues from sales to affiliates. See the financial table
SELECTED FINANCIAL AND OPERATING INFORMATION for components of
proportionate share of sales and other operating revenues.
(B) See reconciliation of Lyondell's net loss to operating income on
the SELECTED FINANCIAL AND OPERATING INFORMATION financial table and
reconciliation of operating income to EBITDA on the RECONCILIATION OF
OPERATING INCOME (LOSS) TO EBITDA financial table.
For the year, individual results for Intermediate Chemicals & Derivatives (IC&D), Equistar Chemicals, LP, and LYONDELL-CITGO Refining LP (LCR) were comparable to 2001 results. Unfavorable economic conditions -- including high energy costs and weak supply/demand balances that characterize the chemical industry trough -- persisted throughout 2002. While Lyondell's performance improved mid year, that improvement was reversed in the fourth quarter by a confluence of factors:
-- Energy costs continued their year-long climb into the fourth quarter,
particularly impacting Equistar's performance.
-- The supply/demand balance in the North American olefins industry
weakened in the fourth quarter.
-- While the oil-industry strike in Venezuela did not greatly affect
LCR's profits, it did result in the reduction of fourth-quarter cash
distributions from the joint venture to Lyondell.
"Although industry conditions and a continued weak economy severely impacted our financial results in 2002, commitment to our operational excellence process enabled us to reduce costs and working capital, achieve our second consecutive year of record-setting safety performance and improve the reliability of our manufacturing operations," said Dan F. Smith, President and CEO of Lyondell Chemical Company. "Year-over-year operational improvements, coupled with our financing efforts, have enabled us to maintain sufficient liquidity to respond confidently to the uncertainties of the global market."
OUTLOOK
So far in the first quarter of 2003, energy and raw material costs are higher and more volatile than in the fourth quarter of 2002. Smith said Lyondell and Equistar have responded by announcing price increases, which they expect to realize in the first quarter 2003, for the majority of IC&D and Equistar products. Additionally, industry operating rates have increased from the fourth quarter and supply/demand balances in many product areas are tighter.
Smith said Lyondell's first-quarter earnings would be impacted by the protracted situation in Venezuela, but added that LCR has acquired crude oil from alternate sources. While the alternate sources will not completely offset the financial impact of reduced supplies from Venezuela, they are profitable feedstocks. "We are confident that we have established both Venezuelan and spot-market supplies to enable LCR to operate at high rates until the situation is resolved," Smith said.
"Despite these feedstock-related issues, we expect our actions and the improving industry environment to lead to better performance in the near future," Smith continued. "For example, industry analysts believe Equistar will enjoy improved supply/demand conditions beginning in March. And, if global energy market issues are resolved, we would expect a significant reduction in raw material costs. If these events occur, our operations should benefit from a rebound similar to what we saw in the second quarter of last year."
LYONDELL AND JOINT VENTURES
Lyondell's operations comprise: Lyondell's IC&D segment; Equistar, a joint venture with Millennium Chemicals Inc.; and LCR, a joint venture with CITGO Petroleum Corp. Each plays a unique role in supporting the enterprise during all phases of the business cycle.
Lyondell's Intermediate Chemicals & Derivatives (IC&D) Segment -- The IC&D segment includes propylene oxide (PO) and derivatives, MTBE and styrene.
IC&D Financial Overview
Full Year Full Year
Millions of dollars 4Q2002 4Q2001 3Q2002 2002 2001
Sales and Other
Operating Revenues $890 $709 $855 $3,262 $3,193
Operating Income (A) 12 41 59 174 112
EBITDA (A) 78 90 117 410 425
(A) See reconciliation of Lyondell operating income (loss) to EBITDA on
the RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA financial
table.
4Q02 v. 3Q02 -- PO and derivatives were negatively impacted in the fourth quarter 2002 by high energy costs and holiday shutdowns at some customer operations, as well as turnaround activity in toluene diisocyanate (TDI). Performance in styrene was relatively unchanged, while MTBE performance was down consistent with typical fourth-quarter conditions.
4Q02 v. 4Q01 -- Competition in PO and its derivatives markets resulted in lower margins in the fourth quarter 2002. Additionally, slow sales late in the fourth quarter from the new BDO manufacturing plant in The Netherlands were not sufficient to fully offset increased costs. The financial impact of the TDI turnaround in the fourth quarter 2002 more than offset improved margins that resulted from price increases throughout the year. MTBE profits were slightly higher in 2002 as a result of temporary supply tightness in October.
2002 v. 2001 -- In PO and derivatives, increased volumes were insufficient to offset reduced margins in the derivatives products. However, TDI was an exception and experienced tighter supply throughout 2002, resulting in price increases and improved profitability. Supply/demand balance in the styrene industry improved in 2002. In MTBE, year-to-year performance was relatively unchanged from the strong performance in 2001.
Equistar Chemicals, LP -- Lyondell owns a 70.5 percent interest in Equistar, which consists of the petrochemicals (including ethylene) and polymers segments.
Equistar Financial Overview - 100% Basis
Full Year Full Year
Millions of dollars 4Q2002 4Q2001 3Q2002 2002 2001
Sales and Other
Operating Revenues (A) $1,431 $1,185 $1,508 $5,537 $5,909
Operating Income
(Loss) (B) (62) (43) 71 (44) (99)
EBITDA (B) 14 39 147 256 250
(A) Includes revenues from sales to affiliates.
(B) See reconciliation of Equistar operating income (loss) to EBITDA on
the RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA financial
table.
4Q02 v. 3Q02 -- The fourth quarter 2002 was primarily impacted by increasing raw material costs as, according to Chemical Marketing Associates Inc. (CMAI), the cost of ethylene production increased by 3 cents per pound compared to the third quarter. Equistar experienced an additional cost increase of nearly 1 cent per pound, attributable to planned maintenance at its olefins manufacturing plant in Chocolate Bayou, Texas. These cost increases were partially offset by a 1 cent per pound ethylene price increase, according to CMAI. Equistar's ethylene sales were approximately 50 million pounds below third-quarter sales. Most of the shortfall was concentrated in October and November.
In the polymers segment, volumes were approximately 56 million pounds below third-quarter sales. Equistar's average selling price was below the third quarter 2002 level as a result of slightly lower domestic market prices and a lower-margin product mix.
4Q02 v. 4Q01 -- Equistar's ethylene and polymers prices increased 3 cents and 4 cents per pound, respectively, but this positive contribution was more than offset by the increasing cost of ethylene, which was driven principally by higher crude oil prices.
2002 v. 2001 -- Although, according to CMAI, volumes recovered over the course of the year, as demonstrated by 5 percent increase in industry polymers sales volumes, trough conditions continued in the industry, leading to reductions in pricing and margins in ethylene and polymers.
LYONDELL-CITGO Refining LP (LCR) -- Lyondell owns a 58.75 percent interest in LCR, a major refiner of heavy crude oil.
LCR Financial Overview - 100% Basis
Full Year Full Year
Millions of dollars 4Q2002 4Q2001 3Q2002 2002 2001
Sales and Other
Operating Revenues (A) $956 $592 $891 $3,392 $3,284
Operating Income (B) 69 27 58 246 256
EBITDA (B) 98 54 86 362 364
(A) Includes revenues from sales to affiliates.
(B) See reconciliation of LCR operating income to EBITDA on the
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA financial table.
4Q02 v. 3Q02 -- Despite a rate reduction in December due to the strike in Venezuela, in the fourth quarter LCR processed approximately 209,000 barrels per day of heavy Venezuelan crude, supplied under the Crude Supply Agreement (CSA) with Petroleos de Venezuela, S.A. (PDVSA). In the previous quarter, LCR processed 212,000 barrels per day of CSA crude. Spot crude volumes were down slightly, but margins were stronger, leading to a higher contribution from spot crude purchases. Increases in the cost of natural gas were offset by inventory reductions and CSA timing impacts.
4Q02 v. 4Q01 -- Total crude processing rates were 43,000 barrels per day higher in the fourth quarter 2002 compared to the same period a year ago when a scheduled major turnaround significantly reduced crude throughput.
2002 v. 2001 -- Overall performance was flat year to year as lower volumes of CSA crude, related to a declaration of force majeure by PDVSA in 2002, were offset by increased spot crude volumes.
CONFERENCE CALL
Lyondell will host a conference call today, Jan. 30, 2003, at 11:30 a.m. Eastern Time (ET). Participating on the call will be: Dan F. Smith, President and CEO; T. Kevin DeNicola, Senior Vice President and CFO; and Douglas J. Pike, Director of Investor Relations. The dial-in numbers are 888-385-9734 (U.S. - toll free) and 212-287-1615 (international). The call will be broadcast live on the Investor Relations page of the company's web site, www.lyondell.com . A replay of the call will be available from 1:30 p.m. ET Jan. 30 to 5 p.m. ET Feb. 7. The dial-in numbers are 800-294-0358 (U.S.) and 402-220-9749 (international). Pass code for each is 5549. Web replay will be available at 1:30 p.m. ET Jan. 30 on the Investor Relations page of the company's web site, www.lyondell.com .
ABOUT LYONDELL
Lyondell Chemical Company, (www.lyondell.com ), headquartered in Houston, Texas, is a leading producer of: propylene oxide (PO); PO derivatives, including toluene diisocyanate (TDI), propylene glycol (PG), butanediol (BDO) and propylene glycol ether (PGE); and styrene monomer and MTBE as co-products of PO production. Through its 70.5% interest in Equistar Chemicals, LP, Lyondell also is one of the largest producers of ethylene, propylene and polyethylene in North America and a leading producer of ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. Through its 58.75% interest in LYONDELL-CITGO Refining LP, Lyondell is one of the largest refiners in the United States, principally processing extra heavy Venezuelan crude oil to produce gasoline, low sulfur diesel and jet fuel.
FORWARD-LOOKING STATEMENTS
The statements in this release relating to matters that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to: the cyclical nature of the chemical and refining industries; availability, cost and volatility of raw materials and utilities; governmental regulatory actions and political unrest; global economic conditions; industry production capacity and operating rates; the supply/demand balance for Lyondell's and its joint ventures' products; competitive products and pricing pressures; access to capital markets; technological developments and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to Lyondell's Annual Report on Form 10-K for the year ended December 31, 2001, Lyondell's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, and Lyondell's Annual Report on Form 10-K for the year ended December 31, 2002, which will be filed in March 2003.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
(Millions of dollars)
Lyondell Lyondell and
Chemical Joint Ventures Proportionate
Company Equistar LCR LMC Share of Equity
(A) (B) 100% 100% 100% (B) Investments (C)
Three months ended
December 31, 2002:
Sales and other
operating
revenues (D) $890 $1,431 $956 $--- $2,461
SG&A and R&D 42 43 14 --- 81
EBITDA 78 14 98 --- 145
Depreciation and
amortization 67 (F) 77 (F) 29 --- 136
Interest expense, net 96 51 9 --- 137
Net loss (E) (93)
Capital expenditures 2 (G) 75 12 --- 62
Cash dividends 28
Three months ended
September 30, 2002:
Sales and other
operating
revenues (D) $855 $1,508 $891 $--- $2,189
SG&A and R&D 47 51 13 --- 82
EBITDA 117 147 86 --- 241
Depreciation and
amortization 62 (F) 74 (F) 28 --- 115
Interest expense, net 95 51 8 --- 127
Net loss (E) (2)
Capital expenditures 8 (G) 14 11 --- 22
Cash dividends 28
Three months ended
December 31, 2001:
Sales and other
operating
revenues (D) $709 $1,185 $592 $24 $1,561
SG&A and R&D 48 60 17 2 84
EBITDA 90 39 54 (3) 136
Depreciation and
amortization 66 (F) 81 (F) 27 3 114
Interest expense, net 92 52 10 --- 119
Net loss (E) (53)
Capital expenditures 16 (G) 25 50 --- 56
Cash dividends 27
Year ended
December 31, 2002:
Sales and other
operating
revenues (D) $3,262 $5,537 $3,392 $36 $8,166
EBITDA 410 256 362 (4) 742
Interest expense,
net 373 204 32 --- 497
Capital expenditures 22 (G) 118 65 --- 133
Cash dividends 109
Year ended
December 31, 2001:
Sales and other
operating
revenues (D) $3,193 $5,909 $3,284 $151 $7,658
EBITDA 425 250 364 (5) 738
Interest expense,
net 369 189 51 --- 476
Capital expenditures 68 (G) 110 109 --- 177
Cash dividends 106
(A) Amounts shown, except for net interest expense, net loss and cash
dividends, consist of the operating results of the Intermediate
Chemicals and Derivatives ("IC&D") business segment of Lyondell.
(B) As of May 1, 2002, Lyondell Methanol Company ("LMC") is wholly owned
by Lyondell and its operations are included in the IC&D business
segment.
(C) This column reflects Lyondell's 100% owned operations and its pro
rata share of each joint venture's operations and is not a
presentation in accordance with generally accepted accounting
principles. Lyondell had a 41% interest in Equistar Chemicals, LP
("Equistar") through August 22, 2002 and 70.5% thereafter, a 58.75%
interest in LYONDELL-CITGO Refining LP ("LCR") and, through
April 30, 2002, a 75% interest in LMC.
(D) Includes revenues from sales to affiliates.
(E) Includes income (loss) from equity investments.
(F) Goodwill amortization ceased effective January 1, 2002.
(G) In addition, Lyondell made contributions to PO-11 joint venture and
U.S. PO joint venture of $24 million, $17 million and $45 million in
the three-month periods ended December 31, 2002, September 30, 2002
and December 31, 2001, respectively, and $64 million and $119 million
in the twelve-month periods ended December 31, 2002 and
December 31, 2001, respectively.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
For the twelve
For the three months ended months ended
INCOME STATEMENTS December 31, September 30, December 31,
(Millions of dollars,
except per share data) 2002 2001 2002 2002 2001
Sales and other operating
revenues $890 $709 $855 $3,262 $3,193
Operating costs and
expenses:
Cost of sales 836 613 749 2,898 2,862
Selling, general and
administrative
expenses 34 40 40 160 157
Research and
development 8 8 7 30 32
Amortization of
goodwill --- 7 --- --- 30
Operating income 12 41 59 174 112
Income (loss) from
equity investment in
Equistar (A) (B) (78) (29) 11 (117) (77)
Income from equity
investment in LCR 37 13 32 135 129
Income (loss) from other
equity investments --- (5) 1 (4) (12)
Interest expense, net (96) (92) (95) (373) (369)
Other income
(expense), net 2 (2) (5) (6) (4)
Income (loss) before
income taxes and
extraordinary item (123) (74) 3 (191) (221)
Benefit from income taxes (38) (26) (2) (58) (76)
Income (loss) before
extraordinary item (85) (48) 5 (133) (145)
Extraordinary loss,
net of income taxes (8) (5) (7) (15) (5)
Net loss (A) $(93) $(53) $(2) $(148) $(150)
Basic and diluted loss
per share:
Income (loss) before
extraordinary item $(0.53) $(0.42) $0.04 $(0.99) $(1.24)
Net loss (A) $(0.58) $(0.46) $(0.02) $(1.10) $(1.28)
Shares (in
thousands) (C):
Basic 159,851 117,563 140,258 133,943 117,563
Diluted 159,851 117,563 140,258 133,943 117,563
INTERMEDIATE CHEMICALS
AND DERIVATIVES
SEGMENT SELECTED
OPERATING INFORMATION
Sales Volumes (millions)
PO and derivatives
(pounds) (D) 744 739 767 3,028 2,803
Co-products:
Styrene monomer (pounds) 889 787 798 3,337 3,132
MTBE and other TBA
derivatives (gallons) 303 284 311 1,209 1,157
(A) Lyondell's share of Equistar's $1.1 billion charge for the write-off
of goodwill, or $432 million, was offset by Lyondell's write-off of a
portion of the difference between its investment in Equistar and its
share of Equistar's partners' capital.
(B) Lyondell had a 41% interest in Equistar through August 22, 2002 and
70.5% thereafter.
(C) Lyondell sold 8,280,000 shares of common stock on July 1, 2002 and
issued 34,000,000 shares of Series B common stock to Occidental on
August 22, 2002. Lyondell paid a dividend to Occidental on
December 31, 2002 by issuing 568,224 shares of Series B common stock
to Occidental in lieu of a dividend payment in cash.
(D) Includes propylene oxide ("PO"), PO derivatives and isocyanates.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
(Millions of dollars)
RECONCILIATION OF OPERATING INCOME (LOSS) TO EBITDA
For the twelve
For the three months ended months ended
December 31, September 30, December 31,
2002 2001 2002 2002 2001
Lyondell
Operating income $12 $41 $59 $174 $112
Add:
Restructuring charges
(credits) (A) (3) (15) --- (3) 63
Depreciation and
amortization 67 66 62 244 254
Other income
(expense), net 2 (2) (5) (6) (4)
Income from other equity
investments --- --- 1 1 ---
Lyondell EBITDA
excluding restructuring
charges (credits) $78 $90 $117 $410 $425
Equistar
Operating income (loss) $(62) $(43) $71 $(44) $(99)
Add:
Facility closing
costs (B) --- --- --- --- 22
Depreciation and
amortization 77 81 74 298 319
Other income
(expense), net (1) 1 2 2 8
Equistar EBITDA
excluding facility
closing costs $14 $39 $147 $256 $250
Proportionate Share -
% varies (C) $10 $16 $74 $122 $103
LCR
Operating income $69 $27 $58 $246 $256
Add:
Depreciation and
amortization 29 27 28 116 108
LCR EBITDA $98 $54 $86 $362 $364
Proportionate
Share - 58.75% $58 $32 $51 $213 $214
EBITDA - Lyondell and
Proportionate Share of
Equity Investments
Lyondell EBITDA
excluding restructuring
charges (credits) $78 $90 $117 $410 $425
Lyondell share of Equistar
EBITDA excluding facility
closing costs (C) 10 16 74 122 103
58.75% of LCR EBITDA 58 32 51 213 214
75% of LMC EBITDA through
April 30, 2002 --- (2) --- (3) (4)
Lyondell and Proportionate
Share of Equity
Investments $145 $136 $241 $742 $738
(A) Restructuring charges (credits) related to shutdown of Lyondell's ADI
business.
(B) Closing costs related to Equistar's Port Arthur, Texas facility.
(C) Lyondell had a 41% interest in Equistar through August 22, 2002 and
70.5% thereafter.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Millions of dollars)
For the twelve months
ended December 31,
STATEMENTS OF CASH FLOWS 2002 2001
Net loss $(148) $(150)
Adjustments:
Depreciation and amortization 244 254
Loss from equity investments 121 89
Extraordinary loss 15 5
Accounts receivable (7) 154
Inventories (14) 48
Accounts payable 13 (74)
Prepaid expenses and other current assets 62 (85)
Other accrued liabilities 7 (21)
Other assets and liabilities, net (4) (21)
Net cash provided by operating
activities 289 199
Purchase of equity investment in Equistar (440) ---
Contributions and advances to
affiliates (A) (114) (173)
Expenditures for property, plant and
equipment (22) (68)
Distributions from affiliates in excess
of earnings --- 50
Purchase of other short-term investments (44) ---
Other (3) ---
Net cash used in investing activities (623) (191)
Issuance of Series B common stock,
warrants and right 440 ---
Issuance of common stock 110 ---
Issuance of long-term debt 606 393
Repayment of long-term debt (532) (394)
Dividends paid (109) (106)
Other (44) (15)
Net cash provided by (used in)
financing activities 471 (122)
Effect of exchange rate changes on cash 3 ---
Increase (decrease) in cash and cash
equivalents $140 $(114)
(A) Includes contributions to PO-11 joint venture and U.S. PO joint
venture of $64 million and $119 million in the twelve-month periods
ended December 31, 2002 and 2001, respectively.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Millions of dollars)
December 31, December 31,
BALANCE SHEET 2002 2001
Cash and cash equivalents $286 $146
Other short-term investments 44 ---
Accounts receivable, net 396 352
Inventories 344 316
Prepaid expenses and other current assets 66 116
Deferred tax assets 35 277
Total current assets 1,171 1,207
Property, plant and equipment, net 2,369 2,293
Investments and long-term receivables:
Investment in Equistar (A) 1,184 522
Investment in PO joint ventures 770 717
Receivable from LCR 229 229
Investment in LCR 68 29
Investment in LMC (B) --- 36
Other investments and long-term
receivables 98 86
Goodwill, net 1,130 1,102
Other assets, net 429 482
Total assets $7,448 $6,703
Accounts payable $344 $319
Current maturities of long-term debt 1 7
Other accrued liabilities 279 233
Total current liabilities 624 559
Long-term debt 3,926 3,846
Other liabilities 673 583
Deferred income taxes (A) 881 790
Minority interest 165 176
Stockholders' equity (160,413,144 and
117,562,920 shares outstanding
respectively at December 31, 2002 and
December 31, 2001) (C) 1,179 749
Total liabilities and
stockholders' equity $7,448 $6,703
For the three For the twelve
months ended months ended
December 31, December 31,
2002 2002
Investment in Equistar, beginning
of period $1,275 $522
Purchase of Occidental's interest 12 804
Lyondell's share of Equistar net loss (78) (117)
Lyondell's share of Equistar minimum
pension liability (25) (25)
Investment in Equistar, end of period $1,184 $1,184
Investment in LCR, beginning of period $54 $29
Lyondell's share of LCR net income 37 135
Lyondell's share of LCR minimum pension
liability (16) (16)
Cash distributions from LCR (12) (126)
Cash contributions to LCR 5 46
Investment in LCR, end of period $68 $68
(A) On August 22, 2002, Lyondell acquired Occidental's 29.5% interest in
Equistar. Lyondell issued Series B common stock, warrants and a
right valued at $452 million and recorded deferred taxes of
$352 million.
(B) Through April 30, 2002, Lyondell's share of LMC's net loss was
$5 million and contributions to LMC were $4 million. Effective
May 1, 2002, LMC became a wholly owned subsidiary of Lyondell. LMC
is consolidated with Lyondell prospectively from that date.
(C) Lyondell sold 8,280,000 shares of common stock on July 1, 2002 and
issued 34,000,000 shares of Series B common stock to Occidental on
August 22, 2002. Lyondell paid a dividend to Occidental on
December 31, 2002 by issuing 568,224 shares of Series B common stock
to Occidental in lieu of a dividend payment in cash.
LYONDELL CHEMICAL COMPANY
EQUISTAR CHEMICALS, LP
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
For the twelve
For the three months ended months ended
INCOME STATEMENTS December 31, September 30, December 31,
(Millions of dollars) 2002 2001 2002 2002 2001
Sales and other operating
revenues (A) $1,431 $1,185 $1,508 $5,537 $5,909
Operating costs and
expenses:
Cost of sales 1,450 1,160 1,386 5,388 5,733
Selling, general and
administrative expenses 33 50 41 155 181
Research and development 10 10 10 38 39
Amortization of goodwill --- 8 --- --- 33
Facility closing costs --- --- --- --- 22
Operating income (loss) (62) (43) 71 (44) (99)
Interest expense, net (51) (52) (51) (204) (189)
Other income (expense), net (1) 1 2 2 8
Income (loss) before
extraordinary loss and
cumulative effect of
accounting change (114) (94) 22 (246) (280)
Extraordinary loss --- --- --- --- (3)
Cumulative effect of
accounting change (B) --- --- --- (1,053) ---
Net income (loss) (C) $(114) $(94) $22 $(1,299) $(283)
SELECTED FINANCIAL AND
OPERATING INFORMATION
(Millions of dollars)
Sales and other operating
revenues (A)
Petrochemicals segment $1,284 $1,042 $1,362 $4,957 $5,384
Polymers segment 476 428 503 1,868 1,980
Intersegment eliminations (329) (285) (357) (1,288) (1,455)
Total $1,431 $1,185 $1,508 $5,537 $5,909
Operating income (loss)
Petrochemicals segment $(5) $50 $96 $146 $275
Polymers segment (33) (48) 6 (74) (186)
Unallocated (24) (45) (31) (116) (188)
Total $(62) $(43) $71 $(44) $(99)
EBITDA before facility
closing costs,
extraordinary loss
and cumulative effect
of accounting change $14 $39 $147 $256 $250
Sales Volumes (millions) (A)
Selected petrochemical
products:
Ethylene, propylene and
other olefins (pounds) 4,026 3,884 4,259 16,815 16,236
Aromatics (gallons) 87 92 92 369 366
Polymers products (pounds) 1,471 1,460 1,527 6,098 5,862
(A) Includes revenues and volumes from sales to affiliates.
(B) Concurrent with the adoption of FASB Statement No. 142, Goodwill and
Other Intangible Assets, Equistar reviewed goodwill for impairment
and concluded that the entire balance was impaired, resulting in the
$1.1 billion charge.
(C) As a partnership, Equistar is not subject to federal income taxes.
LYONDELL CHEMICAL COMPANY
EQUISTAR CHEMICALS, LP
SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Millions of dollars)
December 31, December 31,
BALANCE SHEETS 2002 2001
Cash and cash equivalents $27 $202
Accounts receivable, net 625 540
Inventories 424 448
Prepaid expenses and other current assets 50 36
Total current assets 1,126 1,226
Property, plant and equipment, net 3,565 3,705
Goodwill, net --- 1,053
Other assets, net 361 324
Total assets $5,052 $6,308
Accounts payable $459 $360
Current maturities of long-term debt 32 104
Other accrued liabilities 223 197
Total current liabilities 714 661
Long-term debt 2,196 2,233
Other liabilities 221 177
Partners' capital 1,921 3,237
Total liabilities and partners' capital $5,052 $6,308
For the three months For the twelve months
ended December 31, ended December 31,
OTHER INFORMATION 2002 2001 2002 2001
Depreciation and amortization $77 $81 $298 $319
Cash flow from operations 173 111 55 230
Capital expenditures 75 25 118 110
LYONDELL CHEMICAL COMPANY
LYONDELL-CITGO REFINING LP
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
Dec. 31, Dec. 31,
CONDENSED BALANCE SHEETS
(Millions of dollars) 2002 2001
Total current assets $356 $230
Property, plant
and equipment, net 1,312 1,343
Deferred charges and
other assets, net 87 97
Total assets $1,755 $1,670
Notes payable $--- $50
Other current
liabilities 514 335
Long-term debt 450 450
Loans payable to
partners 264 264
Other liabilities
and deferred credits 122 79
Partners' capital 405 492
Total liabilities
and partners' capital $1,755 $1,670
For the twelve
For the three months ended months ended
INCOME STATEMENTS December 31, September 30, December 31,
(Millions of dollars) 2002 2001 2002 2002 2001
Sales and other
operating revenues (A) $956 $592 $891 $3,392 $3,284
Operating costs and
expenses:
Cost of sales 873 548 820 3,093 2,967
Selling, general and
administrative expenses 14 17 13 53 61
Operating income 69 27 58 246 256
Interest expense, net (9) (10) (8) (32) (51)
Income before
extraordinary loss 60 17 50 214 205
Extraordinary loss (1) --- --- (1) (2)
Net income (B) $59 $17 $50 $213 $203
OTHER INFORMATION
(Millions of dollars)
Depreciation and
amortization $29 $27 $28 $116 $108
Cash flow from operations 144 7 89 361 280
Capital expenditures 12 50 11 65 109
EBITDA before
extraordinary loss $98 $54 $86 $362 $364
SELECTED OPERATING
INFORMATION
Sales Volumes (including
intersegment sales) (A)
Refined products (thousand
barrels per day):
Gasoline 116 81 118 115 101
Diesel and heating oil 90 63 83 84 71
Jet fuel 15 13 20 18 20
Aromatics 9 8 9 9 8
Other refinery products 81 113 91 96 107
Total refined products
volumes 311 278 321 322 307
Refinery Runs
Crude processing rates
(thousand barrels per day):
Crude Supply Agreement 209 196 212 213 229
Other crude oil 41 11 51 46 19
Total crude oil 250 207 263 259 248
(A) Includes revenues and volumes from sales to affiliates.
(B) As a partnership, LCR is not subject to federal income taxes.
SOURCE Lyondell Chemical Company
