Highlights
- Lyondell maintains second quarter's performance.
- Product pricing improves Equistar's profits versus second quarter.
- Third-quarter accomplishments advance Lyondell's strategy:
- Acquisition of Occidental's share of Equistar increases ethylene cycle exposure.
- Start-up of European butanediol plant facilitates propylene oxide growth.
- Debt refinancing maintains liquidity.
HOUSTON, Oct. 31 -- In spite of escalating energy and raw material costs late in the third quarter, Lyondell Chemical Company (NYSE: LYO) maintained the previous-quarter's near break-even performance and today announced a net loss for the third quarter 2002 of $2 million, or $0.02 per share. This compares to net income of $2 million, or $0.02 per share, in the second quarter 2002, and a third quarter 2001 net loss of $67 million, or $0.57 per share. The third quarter of 2001 includes a $51 million charge related to the shutdown of the aliphatic diisocyanate (ADI) business.
Lyondell Earnings Summary Millions of dollars 1st Nine 1st Nine except per share Months Months amounts 3Q2002 2Q2002 3Q2001 2002 2001 Sales Revenues $ 855 $ 843 $ 742 $ 2,372 $ 2,484 Net Income (Loss) $ (2) $ 2 $ (67) $ (55) $ (97) Basic and Diluted Net Income (Loss) per Share (A) $(0.02) $ 0.02 $(0.57) $ (0.44) $ (0.82) Weighted Average Shares Outstanding (in millions)(A) 140.3 117.6 117.6 125.2 117.6 (A) Lyondell sold 8.3 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 Lyondell's purchase of Occidental's 29.5% interest in Equistar. Common shares outstanding at September 30, 2002, were 159.8 million shares.
Before a $7 million extraordinary charge related to debt refinancing, Lyondell achieved net income in the third quarter 2002 of $5 million, or $0.04 per share. This compares with net income of $2 million, or $0.02 per share, in the second quarter 2002, and a net loss, before the ADI shutdown charge, of $16 million, or $0.13 per share, in the third quarter 2001.
EBITDA (earnings before net interest, taxes, depreciation and amortization - see "Reconciliation of Net Income (Loss) to EBITDA," attached) for Lyondell and the proportionate share of its joint ventures was $241 million in the third quarter 2002. This compares with proportionate EBITDA of $217 million in the second quarter 2002 and $193 million in the third quarter 2001. Lyondell's acquisition in August 2002 of Occidental Petroleum's 29.5 percent interest in Equistar Chemicals, LP, contributed $13 million of EBITDA in the third quarter 2002.
Supplemental Financial Data 1st Nine 1st Nine Months Months Millions of dollars 3Q2002 2Q2002 3Q2001 2002 2001 Net Income (Loss) Before Extraordinary and Other Items (A) $ 5 $ 2 $ (16) $ (48) $ (40) Earnings (Loss) per Share Before Extraordinary and Other Items (A) $ 0.04 $ 0.02 $ (0.13) $ (0.38) $ (0.33) EBITDA (Lyondell and proportionate share of ventures) (A) $ 241 $ 217 $ 193 $ 597 $ 602 Sales revenues (Lyondell and proportionate share of ventures) (B) $ 2,189 $ 1,942 $ 1,817 $ 5,706 $ 6,096 Total sales revenues - all businesses in which Lyondell participates(B) $ 3,254 $ 3,153 $ 2,972 $ 8,950 $10,027 (A) The third quarter 2002 excludes an extraordinary loss on early debt retirement of $7 million, or $0.06 per share. The third quarter 2001 excludes the restructuring charge related to the ADI shutdown of $51 million after tax, or $0.44 per share. The first nine months 2001 exclude the ADI shutdown charge as well as an after-tax charge of $6 million, or $0.05 per share, consisting of Lyondell's share of Equistar's facility shutdown costs. (B) Includes revenues from sales to affiliates.
Lyondell's overall profitability in the third quarter 2002 was substantially unchanged from the previous quarter. The benefits from the full quarter's stronger product pricing in Equistar offset the combined effect of rising feedstock costs on Equistar, the seasonal decline in MTBE profitability in Intermediate Chemicals and Derivatives (IC&D), and the impact of lower contract margins at Lyondell-CITGO Refining LP (LCR).
During the third quarter of 2002, Lyondell accomplished several critical steps consistent with its strategy to build a balanced portfolio, maintain near-term liquidity and reduce debt. Significant among these efforts are completion of a Lyondell refinancing, finalization of the Occidental transactions, and successful production start-up of the butanediol (BDO) plant in Europe.
"While we entered the third quarter with good momentum in Equistar, the latter portion of the quarter was negatively impacted by rising raw material costs and what appears to be some slowing in the pace of the economy's recovery," said Dan F. Smith, president and chief executive officer. "Industry supply/demand balances in the ethylene chain have not been adequate to quickly realize price increases that would offset higher raw material costs.
"IC&D and LCR continued to perform in line with our expectations. Deliveries of crude oil from PDVSA (Petroleos de Venezuela, S.A., the national oil company of Venezuela) have increased to near contract levels. LCR's operations continued to be strong as demonstrated by $49 million in net cash distributions to Lyondell during the third quarter. All three of our businesses delivered positive cash flow in the third quarter, enabling Lyondell to increase its cash balance during the quarter and Equistar to reduce its revolver balance despite making semi-annual interest payments."
Compared to the third quarter of 2001, IC&D profits were essentially flat (excluding a charge in the third quarter of 2001 related to the ADI shutdown), while Equistar's profits improved. LCR's profits diminished primarily because the refinery processed fewer barrels under its crude supply agreement (CSA) with PDVSA.
TAX RATE
Lyondell increased its estimated effective tax rate for the year to 30 percent, versus the previous estimate of 25 percent. The increase in the estimated rate reflects a lower projected impact from taxes on foreign income. The benefit of this change to net income in the third quarter 2002 was $3 million.
OUTLOOK
"Global economic and political climates continue to be uncertain," Smith said. "Lyondell's near-term profitability largely depends on ethylene chain supply/demand balances, stability of raw material costs, and reliable crude oil deliveries under the CSA. While deliveries from PDVSA have increased, the other factors have placed pressure on Equistar's performance and, therefore, on Lyondell's earnings.
"Our aggressive cost-control and cash-management programs continue to address the uncertainties we now face. Through these activities, we are managing the elements that are within our direct control. Our financing efforts have maintained focus around our strategic priorities of liquidity and debt reduction. Consistent with this strategy, we completed a $100-million receivables financing at Equistar after the close of the quarter. Further, the balance we have built into the Lyondell portfolio continues to support the enterprise through the economic downturn and the petrochemical trough."
INTERMEDIATE CHEMICALS & DERIVATIVES (IC&D)
The wholly owned IC&D segment includes propylene oxide (PO) and derivatives, MTBE and styrene. EBITDA for the third quarter 2002 was $117 million, compared to $120 million for the second quarter 2002 and $110 million for the third quarter 2001.
IC&D's third-quarter 2002 results were driven primarily by the seasonal decline in profits from sales of the gasoline additive MTBE, as is consistent with the end of the summer driving season. The contribution from PO and derivatives continued to demonstrate stability and was essentially unchanged from the second quarter, as increased volumes offset higher propylene costs and expenses associated with the operation of Lyondell's new European BDO plant. Higher prices in both toluene diisocyanate (TDI) and methanol also contributed positively to the quarter. Styrene margins improved slightly from the second quarter, but sales volumes were lower due to scheduled downtime at one of Lyondell's propylene oxide/styrene monomer (PO/SM) plants.
EQUISTAR CHEMICALS, LP
Lyondell currently owns a 70.5 percent interest in Equistar, which produces petrochemicals, including ethylene, and polymers. On a 100-percent basis, Equistar's third quarter 2002 EBITDA was $147 million, compared to $96 million in the previous quarter and $46 million in the third quarter of 2001.
Equistar EBITDA Millions of dollars 3Q2002 2Q2002 3Q2001 Equistar (A) $ 147 $ 96 $ 46 Petrochemicals 152 132 79 Polymers 21 (11) (10) Unallocated (A) (26) (25) (23) (A) EBITDA for the third quarter 2001 excludes a $3 million extraordinary loss on early debt retirement.
Equistar's performance improved in the third quarter primarily as a result of the benefit of a full quarter's price increases that were implemented during the second quarter. However, over the course of the third quarter, the benefit was gradually eroded by higher raw material costs.
While petrochemical volumes were down four percent in the third quarter, total ethylene volumes were approximately equal to second-quarter volumes. Polymer sales volumes in the third quarter were down approximately four percent relative to strong second-quarter volumes.
LYONDELL-CITGO REFINING LP (LCR)
Lyondell owns a 58.75 percent interest in LCR, a major refiner of heavy crude oil. On a 100-percent basis, LCR's third quarter 2002 EBITDA was $86 million, down from $100 million in the second quarter 2002 and $116 million, before an extraordinary loss, in the third quarter 2001.
As in the second quarter 2002, LCR's third quarter performance was negatively impacted by continued shortfalls in CSA deliveries under PDVSA's declared force majeure. However, CSA processing rates increased by 6,000 barrels per day from the second quarter to average 207,000 barrels per day in the third quarter. Total crude processing rates increased by 4,000 barrels per day from the second quarter to average 263,000 barrels per day in the third quarter. Even so, reduced margins related to the scheduled, semi-annual adjustments in the CSA contract formula reduced contract margins to a more typical level. The CSA margin is now more consistent with historic levels.
LCR's third quarter 2002 EBITDA was significantly lower than it was for the same period a year ago. Third quarter 2001 performance was unusually strong because LCR increased CSA processing rates to 253,000 barrels per day in anticipation of a scheduled maintenance turnaround in the fourth quarter of 2001 and also benefited from stronger spot crude margins.
Lyondell Chemical Company, (www.lyondell.com ), headquartered in Houston, Texas, a leading producer of propylene oxide (PO); the world's number three supplier of TDI (toluene diisocyanate); a leading producer of propylene glycol; a leading producer of other PO derivatives such as BDO (butanediol) and PGE (propylene glycol ether); and a producer of 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 processing extra heavy Venezuelan crude oil to produce gasoline, low sulfur diesel and jet fuel.
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; 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; availability, cost and volatility of raw materials and utilities; access to capital markets; governmental regulatory actions and political unrest; 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, filed with the Securities and Exchange Commission in March 2002, and Lyondell's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, which will be filed in November 2002.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
(Millions of dollars)
Lyondell and
Lyondell Chemical Joint Ventures Proportionate
Company Share of
(Excluding Equity Equistar LCR LMC Equity
Investments)(A)(B) 100% 100% 100%(B) Investments(C)
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 66 (E) 76 (E) 28 --- 123
Interest expense, net 95 51 8 --- 127
Net loss (2)
Capital expenditures 8 (F) 14 11 --- 22
Dividends 28
Three months ended
June 30, 2002:
Sales and other
operating revenues (D) $843 $1,462 $838 $10 $1,942
SG&A and R&D 54 50 14 1 83
EBITDA 120 96 100 (2) 217
Depreciation
and amortization 63 (E) 75 (E) 30 1 112
Interest expense, net 91 50 7 --- 116
Net income 2
Capital expenditures 1 (F) 14 20 --- 18
Dividends 27
Three months ended
September 30, 2001:
Sales and other
operating revenues (D) $742 $1,351 $850 $29 $1,817
SG&A and R&D 42 49 16 2 73
EBITDA 110 46 116 (6) 193
Depreciation
and amortization 67 (E) 80 (E) 26 2 114
Interest expense, net 91 46 10 --- 116
Net loss (67)
Capital expenditures 12 (F) 32 30 --- 43
Dividends 26
(A) Consists of the operating results of the Intermediate Chemicals and
Derivatives ("IC&D") business segment.
(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) Goodwill amortization ceased effective January 1, 2002.
(F) Excludes contributions to PO-11 joint venture and U.S. PO joint
venture of $17 million, $10 million and $44 million in the three-
month periods ended September 30, 2002, June 30, 2002 and
September 30, 2001, respectively.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
For the three For the nine
INCOME STATEMENTS months ended months ended
(Millions of dollars, September 30, September 30,
except per share data) 2002 2001 2002 2001
Sales and other operating revenues $855 $742 $2,372 $2,484
Operating costs and expenses:
Cost of sales 749 640 2,062 2,171
Selling, general and
administrative expenses 40 34 126 117
Research and development 7 8 22 24
Amortization of goodwill --- 8 --- 23
Restructuring charges --- 78 --- 78
Operating income (loss) 59 (26) 162 71
Income (loss) from equity investment
in Equistar (A) (B) 11 (24) (39) (48)
Income from equity investment in LCR 32 48 98 116
Income (loss) from other equity
investments 1 (7) (4) (7)
Interest expense, net (95) (91) (277) (277)
Other expense, net (5) (4) (8) (2)
Income (loss) before income taxes
and extraordinary item 3 (104) (68) (147)
Benefit from income taxes (2) (37) (20) (50)
Income (loss) before
extraordinary item 5 (67) (48) (97)
Extraordinary loss, net of income taxes (7) --- (7) ---
Net loss (A) $(2) $(67) $(55) $(97)
Basic and diluted earnings per share:
Income (loss) before
extraordinary item $0.04 $(0.57) $(0.38) $(0.82)
Net loss (A) $(0.02) $(0.57) $(0.44) $(0.82)
Shares (in thousands) (C):
Basic 140,258 117,563 125,212 117,563
Diluted 140,258 117,563 125,212 117,563
INTERMEDIATE CHEMICALS AND
DERIVATIVES SEGMENT
SELECTED OPERATING INFORMATION
Sales Volumes (millions)
PO and derivatives (pounds) (D) 767 694 2,284 2,064
Co-products:
Styrene monomer (pounds) 783 767 2,433 2,345
MTBE and other TBA derivatives
(gallons) 311 307 906 873
(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.
(D) Includes propylene oxide ("PO"), PO derivatives and isocyanates.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
(Millions of dollars)
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
For the three For the nine
months ended months ended
September 30, September 30,
2002 2001 2002 2001
Lyondell
Net loss $(2) $(67) $(55) $(97)
Eliminate:
Income (loss) from equity
investment in Equistar 11 (24) (39) (48)
Income from equity investment in
LCR 32 48 98 116
Loss from equity investment in LMC --- (6) (5) (7)
Add back:
Interest expense, net 95 91 277 277
Depreciation and amortization 66 67 189 199
Less: Amortization of debt
issuance costs included in both
amortization and interest
expense, net (4) (4) (12) (11)
Benefit from income taxes (2) (37) (20) (50)
Restructuring charges (A) --- 78 --- 78
Extraordinary loss, net of
income taxes (B) 7 --- 7 ---
Lyondell EBITDA before
restructuring charges
and extraordinary loss $117 $110 $332 $335
Equistar
Net income (loss) $22 $(82) $(1,185) $(189)
Add back:
Interest expense, net 51 46 153 137
Depreciation and amortization 76 80 226 239
Less: Amortization of debt
issuance costs included in both
amortization and interest
expense, net (2) (1) (5) (1)
Facility closing costs (C) --- --- --- 22
Extraordinary loss (D) --- 3 --- 3
Cumulative effect of accounting
change (E) --- --- 1,053 ---
Equistar EBITDA before facility
closing costs, extraordinary
loss and cumulative effect
of accounting change $147 $46 $242 $211
Proportionate Share - % varies (F) $74 $19 $113 $87
LCR
Net income $50 $78 $154 $186
Add back:
Interest expense, net 8 10 23 41
Depreciation and amortization 28 26 87 81
Extraordinary loss (G) --- 2 --- 2
LCR EBITDA before extraordinary loss $86 $116 $264 $310
Proportionate Share - 58.75% $51 $68 $155 $182
Lyondell and Proportionate Share of
Equity Investments
Lyondell EBITDA $117 $110 $332 $335
% Equistar EBITDA before facility
closing costs, extraordinary
loss and cumulative effect of
accounting change (F) 74 19 113 87
58.75% of LCR EBITDA before
extraordinary loss 51 68 155 182
75% of LMC EBITDA through
April 30, 2002 --- (4) (3) (2)
EBITDA before extraordinary loss and
other charges - Lyondell
and Proportionate Share of Equity
Investments $241 $193 $597 $602
(A) Lyondell EBITDA for the three and nine months ended
September 30, 2001 excludes ADI exit costs of $78 million.
(B) Lyondell EBITDA for the three and nine months ended
September 30, 2002 excludes an extraordinary loss, net of income
taxes, on early debt retirement of $7 million.
(C) The nine months ended September 30, 2001 EBITDA excludes Equistar's
facility shutdown costs of $22 million.
(D) Equistar EBITDA for the three and nine months ended
September 30, 2001 excludes an extraordinary loss on early debt
retirement of $3 million.
(E) EBITDA for the nine months ended September 30, 2002 excludes a
$1.1 billion charge for the write off of Equistar's goodwill.
(F) Lyondell had a 41% interest in Equistar through August 22, 2002 and
70.5% thereafter.
(G) LCR EBITDA for the three and nine months ended September 30, 2001
excludes an extraordinary loss on early debt retirement of
$2 million.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Millions of dollars)
For the nine months
ended September 30,
STATEMENTS OF CASH FLOWS 2002 2001
Net loss $(55) $(97)
Adjustments:
Depreciation and amortization 189 199
Loss from equity investments 43 55
Restructuring charges --- 78
Extraordinary loss 7 ---
Accounts receivable 36 127
Inventories (22) 22
Accounts payable (10) (101)
Prepaid expenses and other
current assets 64 (45)
Other assets and liabilities, net 92 (52)
Net cash provided by operating activities 344 186
Purchase of equity investment in Equistar (440) ---
Contributions and advances to
affiliates (A) (85) (108)
Expenditures for property, plant and equipment (20) (52)
Distributions from affiliates in
excess of earnings 16 30
Other (3) ---
Net cash used in investing activities (532) (130)
Issuance of Series B common stock,
warrants and right 440 ---
Issuance of common stock 110 ---
Issuance of long-term debt 276 ---
Repayment of long-term debt (217) (8)
Dividends paid (81) (79)
Other (25) (7)
Net cash provided by (used in)
financing activities 503 (94)
Effect of exchange rate changes on cash 2 ---
Increase (decrease) in cash and cash
equivalents $317 $(38)
(A) Includes contributions to PO-11 joint venture and U.S. PO joint
venture of $40 million and $74 million in the nine-month periods
ended September 30, 2002 and 2001, respectively.
LYONDELL CHEMICAL COMPANY
SELECTED FINANCIAL INFORMATION (UNAUDITED)
(Millions of dollars)
September 30, December 31,
BALANCE SHEET 2002 2001
Cash and cash equivalents $463 $146
Accounts receivable, net 367 352
Inventories 344 316
Prepaid expenses and other current assets 53 116
Deferred tax assets 35 277
Total current assets 1,262 1,207
Property, plant and equipment, net 2,347 2,293
Investments and long-term
receivables:
Investment in PO joint ventures 746 717
Investment in Equistar (A) 1,275 522
Receivable from LCR 229 229
Investment in LCR 54 29
Investment in LMC (B) --- 36
Other investments
and long-term receivables 95 86
Goodwill, net 1,119 1,102
Other assets, net 430 482
Total assets $7,557 $6,703
Accounts payable $332 $319
Current maturities of long-term debt 4 7
Other accrued liabilities 358 233
Total current liabilities 694 559
Long-term debt 3,908 3,846
Other liabilities 583 583
Deferred income taxes (A) 914 790
Minority interest 162 176
Stockholders' equity
(159,844,920 and 117,562,920
shares outstanding respectively
at September 30, 2002
and December 31, 2001) (C) 1,296 749
Total liabilities and
stockholders' equity $7,557 $6,703
For the three For the nine
months ended months ended
Sept. 30, 2002 Sept. 30, 2002
Investment in Equistar, beginning of period $472 $522
Purchase of Occidental's interest 792 792
Lyondell's share of Equistar net
income (loss) 11 (39)
Investment in Equistar, end of period $1,275 $1,275
Investment in LCR, beginning of
period $71 $29
Lyondell's share of LCR net income 32 98
Cash distributions from LCR (63) (114)
Cash contributions to LCR 14 41
Investment in LCR, end of period $54 $54
(A) On August 22, 2002, Lyondell acquired Occidental's 29.5% interest
in Equistar. Lyondell issued Series B common stock, warrants and
right valued at $452 million and recorded deferred taxes of
$340 million.
(B) Through April 30, 2002, Lyondell's share of LMC 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 CHEMICAL COMPANY
EQUISTAR CHEMICALS, LP
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
For the three For the nine
months ended months ended
INCOME STATEMENTS September 30, September 30,
(Millions of dollars) 2002 2001 2002 2001
Sales and other operating
revenues (A) $1,508 $1,351 $4,106 $4,724
Operating costs and expenses:
Cost of sales 1,386 1,328 3,938 4,573
Selling, general and
administrative expenses 41 40 122 131
Research and development 10 9 28 29
Amortization of goodwill --- 8 --- 25
Facility closing costs --- --- --- 22
Operating income (loss) 71 (34) 18 (56)
Interest expense, net (51) (46) (153) (137)
Other income, net 2 1 3 7
Income (loss) before
extraordinary loss and
cumulative effect
of accounting change 22 (79) (132) (186)
Extraordinary loss --- (3) --- (3)
Cumulative effect of accounting
change (B) --- --- (1,053) ---
Net income (loss) (C) $22 $(82) $(1,185) $(189)
SELECTED FINANCIAL AND OPERATING
INFORMATION
(Millions of dollars)
Sales and other operating
revenues (A)
Petrochemicals segment $1,362 $1,181 $3,673 $4,345
Polymers segment 503 494 1,393 1,552
Intersegment eliminations (357) (324) (960) (1,173)
Total $1,508 $1,351 $4,106 $4,724
Operating income (loss)
Petrochemicals segment $96 $29 $151 $225
Polymers segment 6 (26) (41) (138)
Unallocated (31) (37) (92) (143)
Total $71 $(34) $18 $(56)
EBITDA before facility closing costs,
extraordinary loss and cumulative
effect of accounting change
Petrochemicals segment $152 $79 $313 $376
Polymers segment 21 (10) 4 (94)
Unallocated (26) (23) (75) (71)
Total $147 $46 $242 $211
Sales Volumes (millions) (A)
Selected petrochemical products:
Ethylene, propylene and other
olefins (pounds) 4,259 4,039 12,789 12,352
Aromatics (gallons) 92 86 282 274
Polymers products (pounds) 1,527 1,565 4,628 4,402
(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)
September 30, December 31,
BALANCE SHEETS 2002 2001
Cash and cash equivalents $19 $202
Accounts receivable, net 708 540
Inventories 507 448
Prepaid expenses and other current assets 37 36
Total current assets 1,271 1,226
Property, plant and equipment, net 3,569 3,705
Goodwill, net --- 1,053
Other assets, net 333 324
Total assets $5,173 $6,308
Accounts payable $438 $360
Current maturities of long-term debt 32 104
Other accrued liabilities 189 197
Total current liabilities 659 661
Long-term debt 2,288 2,233
Other liabilities 174 177
Partners' capital 2,052 3,237
Total liabilities and partners' capital $5,173 $6,308
For the three For the nine
months ended months ended
September 30, September 30,
OTHER INFORMATION 2002 2001 2002 2001
Depreciation and amortization $76 $80 $226 $239
Cash flow from operations 21 24 (118) 119
Capital expenditures 14 32 43 85
LYONDELL CHEMICAL COMPANY
LYONDELL-CITGO REFINING LP
SELECTED FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
CONDENSED BALANCE SHEETS Sept. 30, Dec. 31,
(Millions of dollars) 2002 2001
Total current assets $258 $230
Property, plant and equipment, net 1,321 1,343
Deferred charges and other assets, net 83 97
Total assets $1,662 $1,670
Notes payable $13 $50
Current maturities of long-term debt 450 ---
Current loans payable to partners 264 ---
Other current liabilities 370 335
Long-term debt --- 450
Loans payable to partners --- 264
Other liabilities and deferred credits 68 79
Partners' capital 497 492
Total liabilities and partners' capital $1,662 $1,670
For the three For the nine
INCOME STATEMENTS months ended months ended
September 30, September 30,
(Millions of dollars) 2002 2001 2002 2001
Sales and other operating
revenues (A) $891 $850 $2,436 $2,692
Operating costs and expenses:
Cost of sales 820 744 2,220 2,419
Selling, general and
administrative expenses 13 16 39 44
Operating income 58 90 177 229
Interest expense, net (8) (10) (23) (41)
Income before
extraordinary loss 50 80 154 188
Extraordinary loss --- (2) --- (2)
Net income (B) $50 $78 $154 $186
OTHER INFORMATION
(Millions of dollars)
Depreciation and amortization $28 $26 $87 $81
Cash flow from operations 89 183 217 273
Capital expenditures 11 30 53 59
EBITDA before extraordinary loss $86 $116 $264 $310
SELECTED OPERATING INFORMATION
Sales Volumes (including
intersegment sales) (A)
Refined products
(thousand barrels per day):
Gasoline 118 103 114 107
Diesel and heating oil 83 80 82 74
Jet fuel 20 24 19 22
Aromatics 9 7 9 8
Other refinery products 91 109 102 106
Total refined products
volumes 321 323 326 317
Refinery Runs
Crude processing rates (thousand
barrels per day):
Crude Supply Agreement 207 253 212 240
Other crude oil 56 16 49 22
Total crude oil 263 269 261 262
(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
