Lyondell Reports First Quarter 2004 Results
*$109 million improvement versus fourth quarter 2003 *$151 million improvement versus first quarter 2003 HOUSTON, April 22 /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE: LYO) today announced a net loss for the first quarter of $15 million, or $0.08 per share. This compares to a net loss of $113 million, or $0.70 per share, for the first quarter 2003, and a net loss of $77 million, or $0.44 per share, for the fourth quarter 2003. Table 1 - Lyondell Earnings Summary Millions of dollars except per share amounts 1Q2004 1Q2003 4Q2003 Sales and other operating revenues $1,105 $989 $945 Net loss (15) (113) (77) Basic and diluted net loss per share (A) (0.08) (0.70) (0.44) Weighted average shares outstanding (millions) (A) 176.5 160.4 174.0 (A) Lyondell sold 13.8 million shares of common stock in October 2003, including 2.7 million shares to Occidental Chemical Holding Corporation ("OCHC"). In addition, Lyondell paid a dividend to OCHC by issuing approximately 0.6 million shares of Series B common stock each quarter beginning in December 2002 in lieu of a dividend payment in cash. Table 2 - Lyondell and Proportionate Share of Ventures - Supplemental Financial Data Millions of dollars 1Q2004 1Q2003 4Q2003 Proportionate sales and other operating revenues (A) $3,166 $2,841 $2,732 Proportionate EBITDA (B) 259 78 144 (A) See Table 6 for components of proportionate share of sales and other operating revenues. (B) See Table 7 for a reconciliation of net income (loss) to proportionate EBITDA and Table 8 for Lyondell's income statement information. Overall, price increases in Lyondell and Equistar products more than offset the impact of rising raw material costs, driven by average crude oil prices that were $4 per barrel higher in the first quarter 2004 versus the fourth quarter 2003. LYONDELL-CITGO Refining LP (LCR) continued to receive full contract volumes of crude oil from PDVSA, and maximized processing rates with spot purchases. "Improving economic conditions and tight supply/demand balances in several Lyondell, Equistar, and LCR products contributed to improved results during the quarter. Quarterly crude oil prices reached record-high levels, even surpassing the levels of the first quarter of last year. However, the cost of ethylene production from our crude-oil-based liquid crackers decreased versus the fourth quarter of 2003 because strong co-product pricing more than offset the crude oil price impact," said Dan F. Smith, president and CEO of Lyondell Chemical Company. OUTLOOK The level and volatility of crude oil and natural gas prices continue to negatively impact the industry, creating uncertainties for both near-term product margins and demand. "Although we continue to face raw material price uncertainties, improving industry conditions have enabled us to deal with this volatility more successfully than during the past three years. However, I believe that it would be premature to say that we have turned the corner and entered a sustained strong upturn. If we continue to experience solid global economic growth and see some stabilization of energy prices, I believe that we could enjoy very positive conditions later in the year," said Smith. LYONDELL AND JOINT VENTURES Lyondell's operations comprise: Lyondell's Intermediate Chemicals and Derivatives (IC&D) segment; Equistar, a joint venture with Millennium Chemicals Inc.; and LYONDELL-CITGO Refining LP (LCR), a joint venture with CITGO Petroleum Corp. Lyondell's Intermediate Chemicals & Derivatives (IC&D) Segment - The IC&D segment includes propylene oxide (PO) and derivatives, MTBE, styrene and TDI. Table 3 - IC&D Financial Overview Millions of dollars 1Q2004 1Q2003 4Q2003 Sales and other operating revenues $1,105 $989 $945 Operating income (loss) (A) 23 (18) 3 EBITDA (A) 86 53 60 (A) See Table 7 for a reconciliation of Lyondell's net loss to EBITDA and Table 8 for Lyondell's IC&D operating income (loss) and net loss. 1Q04 v. 4Q03 - Increased MTBE margins and higher propylene oxide and PO derivative sales volumes contributed significantly to an improvement in results. MTBE margins were driven by strong gasoline prices and seasonally lower raw material (butane) prices. Propylene oxide and PO derivative volumes increased 20 percent versus the fourth quarter. A significant portion of these increases resulted from seasonally strong deicer sales and PO sales related to the timing of maintenance activities within the industry. Generally, margins in PO and derivatives were negatively impacted by significant increases in raw material (propylene) prices. However, price increases in certain products were sufficient to offset these raw material price increases. Styrene and TDI results were relatively unchanged. 1Q04 v. 1Q03 - Results improved significantly in the propylene oxide and PO derivative products. Increased prices and 14 percent volume growth in these products combined to increase operating results by more than $40 million despite higher raw material (propylene) costs. Results in MTBE and styrene were relatively unchanged versus the year-ago period, while TDI results were impacted by lower margins. Equistar Chemicals, LP - Lyondell owns a 70.5 percent interest in Equistar, which consists of the petrochemicals and polymers segments. Table 4 - Equistar Financial Overview - 100% Basis Millions of dollars 1Q2004 1Q2003 4Q2003 Sales and other operating revenues $1,962 $1,641 $1,665 Operating income (loss) 61 (96) (29) Net income (loss) (A) 5 (146) (104) EBITDA (A) 136 (19) 27 (A) See Table 7 for a reconciliation of Equistar's net income (loss) to EBITDA. 1Q04 v. 4Q03 - Results improved significantly as ethylene and ethylene derivative (ethylene oxygenates and polyethylene) prices averaged 2 cents per pound to 3.5 cents per pound higher than during the fourth quarter. Significantly higher co-product (propylene, benzene, and fuels) prices more than offset the impact of an increase of approximately $100 million in crude- oil-based liquid raw material costs. This resulted in crude-oil-based raw materials -- which yield a higher ratio of co-products -- being Equistar's preferred raw material during the first quarter. Ethylene and ethylene derivative volumes were relatively unchanged versus the fourth quarter. Fourth-quarter 2003 results included charges of $24 million related to financing and severance costs. 1Q04 v. 1Q03 - Equistar's average prices for ethylene and ethylene derivatives were approximately 3 cents per pound higher than first quarter 2003 average sales prices. Increased co-product prices more than offset raw material price increases. According to Chemical Market Associates, Inc. (CMAI), the impact of this was approximately a 1-cent-per-pound reduction in their average cost-of-ethylene-production metric versus the first quarter of 2003. Equistar's combined ethylene and ethylene derivative sales volumes increased by approximately 5 percent. First-quarter 2003 results included a $12 million charge related to the sale of a polypropylene facility. LYONDELL-CITGO Refining LP (LCR) - Lyondell owns a 58.75 percent interest in LCR, a major refiner of heavy crude oil. Table 5 - LCR Financial Overview - 100% Basis Millions of dollars 1Q2004 1Q2003 4Q2003 Sales and other operating revenues $1,154 $1,183 $1,044 Operating income 101 38 82 Net income (A) 91 28 73 EBITDA (A) 131 66 110 (A) See Table 7 for a reconciliation of LCR's net income to EBITDA. 1Q04 v. 4Q03 - Results continued to be strong in the first quarter. Venezuelan contract (CSA) crude volumes increased to an average of 238,000 barrels per day. Total crude volumes were relatively unchanged, averaging 268,000 barrels per day. Spot crude and aromatics margins were strong during the first quarter. 1Q04 v. 1Q03 - Results improved significantly versus the first quarter of 2003 which was negatively impacted by supply disruptions related to the general strike in Venezuela and a $25 million charge related to the redesign of the low sulfur gasoline project. CONFERENCE CALL Lyondell will host a conference call today, April 22, 2004, at 11:30 a.m. Eastern Time (ET). Participating on the call will be: Dan F. Smith, President and CEO; Morris Gelb, Executive Vice President and COO; T. Kevin DeNicola, Senior Vice President and CFO; and Doug Pike, Director of Investor Relations. The dial-in numbers are 888-391-2385 (U.S. - toll free) and 484-644-0641 (international). The passcode for each number is Lyondell. The call will be broadcast live on the Investor Relations page of the company's web site, www.lyondell.com/earnings . A replay of the call will be available from 1:30 p.m. ET April 22 to 5 p.m. ET April 30. The dial-in numbers are 800-294-4406 (U.S.) and 402-220-9778 (international). Passcode for each is 5549. Web replay will be available at 1:30 p.m. ET April 22 on the Investor Relations page of the company's web site, www.lyondell.com/earnings . Reconciliations of non-GAAP financial measures to GAAP financial measures, together with any other applicable disclosures, including this earnings release, will be available at 11:30 a.m. ET at www.lyondell.com/earnings . ABOUT LYONDELL Lyondell Chemical Company, (www.lyondell.com ), headquartered in Houston, Texas, is a leading producer of: propylene oxide (PO); PO derivatives, 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 processing extra heavy Venezuelan crude oil to produce gasoline, low sulfur diesel and jet fuel. FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION The statements in this release and the related teleconference 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. In the case of any forward-looking statements relating to the proposed transaction between Lyondell Chemical Company ("Lyondell") and Millennium Chemicals Inc. ("Millennium"), the following factors, among others, could affect the proposed transaction and the anticipated results: approval by Lyondell's and Millennium's respective shareholders, amendments to Lyondell's and Millennium's respective credit facilities, the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Act, the receipt of other competition law clearances and the parties' ability to achieve expected synergies in the transaction within the expected timeframes or at all. All of such forward-looking statements are based upon the current beliefs and expectations of Lyondell's management and are subject to significant risks and uncertainties. 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, 2003, which was filed with the SEC on March 12, 2004, and Lyondell's Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, which will be filed with the SEC in May 2004. In addition, Lyondell and Millennium will file a joint proxy statement/prospectus with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THAT DOCUMENT, WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of that document (when it becomes available) and other documents filed by Lyondell and Millennium with the SEC at the SEC's web site at www.sec.gov . The joint proxy statement/prospectus (when it becomes available) and the other documents filed by Lyondell may also be obtained free from Lyondell by calling Lyondell's Investor Relations department at (713) 309-4590. The respective executive officers and directors of Lyondell and Millennium and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Lyondell's executive officers and directors is available in its proxy statement filed with the SEC by Lyondell on March 16, 2004, and information regarding Millennium's directors and its executive officers is available in Millennium's Annual Report on Form 10-K for the year ended December 31, 2003, which was filed with the SEC on March 12, 2004. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC. Table 6 - Unaudited Financial and Operating Information Lyondell and Proportionate Lyondell Joint Ventures Share of Chemical Equistar LCR Equity (Millions of dollars) Company 100% 100% Investments (A) Three months ended March 31, 2004: Sales and other operating revenues (B) $1,105 $1,962 $1,154 $3,166 SG&A and R&D 53 48 16 96 EBITDA 86 136 131 259 Depreciation and amortization 63 76 30 132 Interest expense, net 109 55 10 154 Net loss (15) (C) Capital expenditures 11 (D) 19 15 33 Cash dividends 31 Three months ended March 31, 2003: Sales and other operating revenues (B) $989 $1,641 $1,183 $2,841 SG&A and R&D 51 49 12 93 EBITDA 53 (19) 66 78 Depreciation and amortization 57 78 28 126 Interest expense, net 83 49 10 123 Net loss (113) (C) Capital expenditures 9 (D) 13 15 27 Cash dividends 28 Three months ended December 31, 2003: Sales and other operating revenues (B) $945 $1,665 $1,044 $2,732 SG&A and R&D 56 60 14 107 EBITDA 60 27 110 144 Depreciation and amortization 66 77 28 135 Interest expense, net 104 54 9 147 Net loss (77) (C) Capital expenditures 21 (D) 44 10 58 Cash dividends 31 (A) This column reflects Lyondell's 100% owned operations and its pro rata share of each joint venture's operations, which is not a presentation in accordance with generally accepted accounting principles. Lyondell has a 58.75% interest in LYONDELL-CITGO Refining LP ("LCR") and a 70.5% interest in Equistar Chemicals, LP ("Equistar"). (B) Includes revenues from sales to affiliates. (C) Includes income (loss) from equity investments in Equistar and LCR. (D) In addition, Lyondell made cash contributions to the European PO Joint Venture and the U.S. PO Joint Venture. See footnote (A) of Table 10 for detail of cash contributions. Table 7 - Reconciliation of Net Income (Loss) to EBITDA For the three months ended March 31, December 31, (Millions of dollars) 2004 2003 2003 LYONDELL Net loss $(15) $(113) $(77) Add: Benefit from income taxes (9) (55) (58) Interest expense, net 109 83 104 Depreciation and amortization 63 57 66 (Income) loss from equity investment in Equistar (6) 100 70 Income from equity investment in LCR (56) (19) (45) IC&D EBITDA $86 $53 $60 EQUISTAR Net income (loss) $5 $(146) $(104) Add: Depreciation and amortization 76 78 77 Interest expense, net 55 49 54 EBITDA $136 $(19) $27 Lyondell Proportionate Share - 70.5% $96 $(13) $19 LCR Net income $91 $28 $73 Add: Depreciation and amortization 30 28 28 Interest expense, net 10 10 9 EBITDA $131 $66 $110 Lyondell Proportionate Share - 58.75% $77 $38 $65 EBITDA - Lyondell and Proportionate Share of Equity Investments Lyondell EBITDA $86 $53 $60 70.5% of Equistar EBITDA 96 (13) 19 58.75% of LCR EBITDA 77 38 65 Lyondell and Proportionate Share of Equity Investments $259 $78 $144 Table 8 - Lyondell Unaudited Income Statement Information For the three months ended March 31, December 31, (Millions of dollars, except per share data) 2004 2003 2003 Sales and other operating revenues $1,105 $989 $945 Cost of sales 1,029 956 886 Selling, general and administrative expenses 45 42 45 Research and development expenses 8 9 11 Operating income (loss) 23 (18) 3 Income (loss) from equity investment in Equistar 6 (100) (70) Income from equity investment in LCR 56 19 45 Income (loss) from other equity investments 1 (2) (9) Interest expense, net (109) (83) (104) Other income (expense), net (1) 16 --- Loss before income taxes (24) (168) (135) Benefit from income taxes (9) (55) (58) Net loss $(15) $(113) $(77) Basic and diluted loss per share $(0.08) $(0.70) $(0.44) Basic and diluted shares (in thousands) (A) 176,543 160,419 174,016 (A) Lyondell sold 13.8 million shares of common stock in October 2003, including 2.7 million shares to OCHC. In addition, Lyondell paid a dividend to OCHC by issuing approximately 0.6 million shares of Series B common stock each quarter beginning in December 2002 in lieu of a dividend payment in cash. Table 9 - Lyondell Intermediate Chemicals and Derivatives Segment - Sales Volumes For the three months ended March 31, December 31, (In millions) 2004 2003 2003 PO and derivatives (pounds) (A) 1,002 899 829 Co-products: Styrene monomer (pounds) 931 869 953 MTBE and other TBA derivatives (gallons) 272 257 271 (A) Includes propylene oxide ("PO"), PO derivatives and isocyanates. Table 10 - Lyondell Unaudited Cash Flow Information For the three months ended March 31, (Millions of dollars) 2004 2003 Net loss $(15) $(113) Adjustments: Depreciation and amortization 63 57 (Income) loss from equity investments (6) 102 Deferred income taxes (10) (54) Gain on sale of equity interest --- (18) Changes in assets and liabilities: Accounts receivable (26) (48) Inventories 11 (5) Accounts payable (6) 36 Accrued interest 78 67 Income taxes refundable, net of payable 1 34 Other assets and liabilities, net (22) (12) Cash provided by operating activities 68 46 Expenditures for property, plant and equipment (11) (9) Distributions from affiliates in excess of earnings 18 71 Contributions and advances to affiliates (A) (13) (51) Purchase of other short-term investments --- (9) Proceeds from sale of equity interest --- 28 Cash provided by (used in) investing activities (6) 30 Dividends paid (31) (28) Other 3 (3) Cash used in financing activities (28) (31) Effect of exchange rate changes on cash (1) --- Increase in cash and cash equivalents $33 $45 (A) Includes cash contributions to the European PO Joint Venture and the U.S. PO Joint Venture of $4 million, $26 million and $25 million in the three-month periods ended March 31, 2004 and 2003 and December 31, 2003, respectively. These amounts included $4 million, $23 million and $9 million, respectively, related to funding for capital expenditures. Also includes capitalized interest related to the Maasvlakte PO/SM plant of $4 million for each of the three-month periods ended March 31, 2003 and December 31, 2003. Table 11 - Lyondell Unaudited Balance Sheet Information March 31, December 31, (Millions of dollars) 2004 2003 Cash and cash equivalents $471 $438 Accounts receivable, net 467 449 Inventories 334 347 Prepaid expenses and other current assets 84 82 Deferred tax assets 43 43 Total current assets 1,399 1,359 Property, plant and equipment, net 2,566 2,640 Investments and long-term receivables: Investment in Equistar 969 965 Investment in PO joint ventures 840 866 Investment in and receivable from LCR 234 232 Other investments and long-term receivables 86 85 Goodwill, net 1,080 1,080 Other assets, net 390 406 Total assets $7,564 $7,633 Accounts payable $416 $431 Accrued liabilities 326 268 Total current liabilities 742 699 Long-term debt 4,151 4,151 Other liabilities 688 680 Deferred income taxes 768 792 Minority interest 134 155 Stockholders' equity (177,891,819 and 176,792,587 shares outstanding at March 31, 2004 and December 31, 2003, respectively) 1,081 1,156 Total liabilities and stockholders' equity $7,564 $7,633 Table 12 - Lyondell Selected Equity Investment Activity For the three months ended March 31, (Millions of dollars) 2004 Investment in Equistar, beginning of period $965 Lyondell's share of Equistar net income 6 Lyondell's share of Equistar other comprehensive income (2) Investment in Equistar, end of period $969 Investment in LCR, beginning of period $3 Lyondell's share of LCR net income 56 Cash distributions from LCR (63) Cash contributions to LCR 9 Investment in LCR, end of period 5 LCR receivable, beginning and end of period 229 Investment in and receivable from LCR, end of period $234 Table 13 - Equistar Unaudited Income Statement Information For the three months ended March 31, December 31, (Millions of dollars) 2004 2003 2003 Sales and other operating revenues (A) $1,962 $1,641 $1,665 Cost of sales 1,857 1,676 1,633 Selling, general and administrative expenses 41 40 51 Research and development expenses 7 9 9 (Gain) loss on asset dispositions (4) 12 1 Operating income (loss) 61 (96) (29) Interest expense, net (55) (49) (54) Other expense, net (1) (1) (21) Net income (loss) (B) $5 $(146) $(104) (A) Sales and other operating revenues include sales to affiliates. (B) As a partnership, Equistar is not subject to federal income taxes. Table 14 - Equistar Unaudited Segment Financial and Operating Information For the three months ended March 31, December 31, (Millions of dollars) 2004 2003 2003 Sales and other operating revenues (A) Petrochemicals segment $1,866 $1,536 $1,528 Polymers segment 557 513 547 Intersegment eliminations (461) (408) (410) Total $1,962 $1,641 $1,665 Operating income (loss) Petrochemicals segment $104 $(32) $6 Polymers segment (14) (35) 2 Unallocated (29) (29) (37) Total $61 $(96) $(29) Depreciation and amortization: Petrochemicals segment $57 $57 $57 Polymers segment 14 16 14 Unallocated 5 5 6 Total $76 $78 $77 EBITDA (B) $136 $(19) $27 Sales Volumes (including intersegment sales) (millions) (A) Selected petrochemical products: Ethylene, propylene and other olefins (pounds) 4,277 3,921 4,433 Aromatics (gallons) 93 94 96 Polymers products (pounds) 1,401 1,397 1,444 (A) Sales and other operating revenues include sales to affiliates. Sales volumes include sales to affiliates as well as intersegment sales volumes. (B) See Table 7 for reconciliation of Equistar's net income (loss) to EBITDA. Table 15 - Equistar Unaudited Balance Sheet Information March 31, December 31, (Millions of dollars) 2004 2003 Cash and cash equivalents $111 $199 Accounts receivable, net (A) 608 608 Inventories 473 408 Prepaid expenses and other current assets 33 46 Total current assets 1,225 1,261 Property, plant and equipment, net 3,293 3,334 Investments 61 60 Other assets, net 387 373 Total assets $4,966 $5,028 Accounts payable $504 $513 Current maturities of long-term debt 1 --- Accrued liabilities 183 241 Total current liabilities 688 754 Long-term debt 2,313 2,314 Other liabilities and deferred revenues 361 359 Partners' capital 1,604 1,601 Total liabilities and partners' capital $4,966 $5,028 (A) See Table 22 for accounts receivable sold. Table 16 - Equistar Unaudited Cash Flow Information For the three months ended March 31, (Millions of dollars) 2004 2003 Net income (loss) $5 $(146) Adjustments: Depreciation and amortization 76 78 Deferred maintenance turnaround expenditures (17) (27) Deferred revenues --- 159 (Gain) loss on asset dispositions (4) 12 Changes in assets and liabilities: Accounts receivable (A) (B) --- 62 Inventories (65) (49) Accounts payable (12) 60 Accrued interest (17) (45) Other assets and liabilities, net (39) (37) Cash provided by (used in) operating activities (73) 67 Expenditures for property, plant and equipment (19) (13) Proceeds from sales of assets 4 35 Cash provided by (used in) investing activities (15) 22 Repayment of long-term debt --- (1) Other --- (3) Cash used in financing activities --- (4) Increase (decrease) in cash and cash equivalents $(88) $85 (A) See Table 22 for accounts receivable sold. (B) In consideration of discounts offered to certain customers for early payment for product, some receivable amounts were collected in March 2004 and 2003 that otherwise would have been expected to be collected in April of the respective years. This included $39 million from OCHC in March 2004 and, in March 2003, $46 million from OCHC and $23 million from Lyondell. Table 17 - LCR Unaudited Income Statement Information For the three months ended March 31, December 31, (Millions of dollars) 2004 2003 2003 Sales and other operating revenues (A) $1,154 $1,183 $1,044 Operating costs and expenses: Cost of sales 1,037 1,133 948 Selling, general and administrative expenses 16 12 14 Operating income 101 38 82 Interest expense, net (10) (10) (9) Net income (B) $91 $28 $73 EBITDA (C) $131 $66 $110 (A) Includes revenues from sales to affiliates. (B) As a partnership, LCR is not subject to federal income taxes. (C) See Table 7 for reconciliation of LCR's net income to EBITDA. Table 18 - LCR Operating Information For the three months ended March 31, December 31, 2004 2003 2003 Sales Volumes (including intersegment sales) (A) Refined products (thousand barrels per day): Gasoline 115 113 121 Diesel and heating oil 90 78 93 Jet fuel 16 21 20 Aromatics 8 9 8 Other refined products 92 83 94 Total refined products volumes 321 304 336 Refinery Runs Crude processing rates (thousand barrels per day): Crude Supply Agreement 238 194 227 Other crude oil 30 51 44 Total crude oil 268 245 271 (A) Includes volumes from sales to affiliates. Table 19 - LCR Unaudited Balance Sheet Information March 31, December 31, (Millions of dollars) 2004 2003 Total current assets $328 $316 Property, plant and equipment, net 1,230 1,240 Other assets, net 78 81 Total assets $1,636 $1,637 Payables and accrued liabilities $381 $386 Bank loan facility 450 450 Loans payable to partners 264 264 Other liabilities 118 114 Partners' capital 423 423 Total liabilities and partners' capital $1,636 $1,637 Table 20 - LCR Unaudited Cash Flow Information For the three months ended March 31, (Millions of dollars) 2004 2003 Cash flow from operations $100 $58 Capital expenditures 15 15 Depreciation and amortization 30 28 Table 21 - Reconciliation of Lyondell's Days of Working Capital March 31, December 31, (Millions of dollars) 2004 2003 Working Capital: (A) Accounts receivable $467 $449 Inventories 334 347 Accounts payable (416) (431) Total 385 365 Add: Accounts receivable sold (B) 75 75 Adjusted working capital $460 $440 Days of Working Capital: Sales and other operating revenues for the three months ended $1,105 $945 Number of days in quarter 91 92 Sales per day $12.1 $10.3 Days of working capital (C) 38 43 (A) Defined as the major controllable components of working capital - receivables, inventories and payables. (B) Receivables sold are added back for consistency as such amounts are included in sales and in the sales per day calculation. Management believes that this provides useful information to investors because it reflects Lyondell's and Equistar's responsibility for administration and collection of said amounts. (C) Days of working capital are calculated as adjusted working capital divided by sales per day. Table 22 - Reconciliation of Equistar's Days of Working Capital March 31, December 31, (Millions of dollars) 2004 2003 Working Capital: (A) Accounts receivable (B) $608 $608 Inventories 473 408 Accounts payable (504) (513) Total 577 503 Add: Accounts receivable sold (C) 217 102 Adjusted working capital $794 $605 Days of Working Capital: Sales and other operating revenues for the three months ended $1,962 $1,665 Number of days in quarter 91 92 Sales per day $21.6 $18.1 Days of working capital (B) (D) 37 33 (A) Defined as the major controllable components of working capital - receivables, inventories and payables. (B) In consideration of discounts offered to certain customers for early payment for product delivered in March 2004, some receivable amounts were collected in March 2004 that otherwise would have been expected to be collected in April 2004, including $39 million from OCHC. Similarly, in December 2003, $41 million was received from OCHC that otherwise would have been expected to be collected in January 2004. Had such amounts been collected in April and January 2004, respectively, days of working capital would have been 39 days and 36 days at March 31, 2004 and December 31, 2003, respectively. (C) Receivables sold are added back for consistency as such amounts are included in sales and in the sales per day calculation. Management believes that this provides useful information to investors because it reflects Lyondell's and Equistar's responsibility for administration and collection of said amounts. (D) Days of working capital are calculated as adjusted working capital divided by sales per day. SOURCE Lyondell Chemical Company |