* Lyondell reports quarterly net income of $290 million, or $1.12 per share
* Strong results in all segments
* Repayment of $437 million principal amount of debt brings total debt reduction to $2.1 billion since September 2004
* Announced plans to explore the sale of Lyondell-Citgo Refining
* Favorable LCR-related settlement
HOUSTON, April 27 /PRNewswire-FirstCall/ -- Lyondell Chemical Company (NYSE: LYO) today announced net income for the first quarter 2006 of $290 million, or $1.12 per share on a fully diluted basis. This compares with net income of $254 million, or 98 cents per share, for the first quarter 2005, and net income of $141 million, or 54 cents per share, for the fourth quarter 2005.
Table 1 - Lyondell Earnings Summary
Millions of dollars except
per share amounts 1Q 2006 1Q 2005 4Q 2005
Sales and other operating revenues $4,757 $4,440 $5,000
Net income 290 254 141
Basic earnings per share 1.18 1.04 0.57
Diluted earnings per share (A) 1.12 0.98 0.54
Basic weighted average shares
outstanding (millions) 246.9 244.5 246.7
Diluted weighted average shares
outstanding (millions) (A) 259.3 259.8 260.3
(A) Includes the dilutive effect of the convertible debentures, stock
options and warrants.
First-quarter results, excluding a settlement related to Lyondell-Citgo Refining (LCR), were comparable to the first quarter 2005, as improved refining and propylene oxide (PO) segment results and lower interest expense offset a decline in ethylene segment results. Improvement versus the fourth quarter 2005 is primarily attributed to strong results in the refining segment versus the hurricane-damage related downtime experienced in the fourth quarter 2005.
Quarterly results reflected the following:
Millions of dollars 1Q 2006 1Q 2005 4Q 2005
LCR-related settlement (A) $70 $--- $---
Mutual insurance consortia losses (5) --- (12)
Debt prepayment premiums and charges --- (12) (17)
Hurricane (estimated lost production) (B) --- --- (75)
Lake Charles TDI plant shutdown --- --- (24)
(A) Represents the pre-tax impact of the resolution of various matters
among LCR, its owners and their affiliates.
(B) Represents Lyondell's percentage of LCR's estimated lost production
of $130 million.
"Business results have been solid thus far in 2006, and we are pleased to have resolved several open issues in our favor. First-quarter 2006 earnings were strong, and we continued to improve our balance sheet through the repayment of $437 million principal amount of debt," said Dan F. Smith, president and CEO of Lyondell Chemical Company. "Unfortunately, during the quarter we believe the market overreacted to the verdict in the Rhode Island lead pigment trial. This matter is far from concluded, and we expect the financial impact, if any, will be far less than the initial reaction would indicate."
OUTLOOK
The ethylene chain has largely adjusted to resumed production following planned and unplanned outages in the industry. While this is resulting in lower product prices in the ethylene chain, profitability over the course of the year is expected to reflect industry operating rates in the mid-90 percentiles. As the summer driving season begins, conditions for the refining industry are expected to remain very tight. Despite this, U.S. refiners are removing methyl tertiary butyl ether (MTBE) from their systems, and Lyondell has shifted its MTBE sales mix to reflect this situation by emphasizing exports from the United States. Globally, MTBE margins have followed typical seasonal trends thus far in 2006.
"Volatility and current high prices in the energy markets continue to present challenges, but strong business conditions ultimately should prevail, positioning Lyondell's chemical products for another strong year," added Smith. "Tightness in the refining industry creates an opportune situation for the sale of the LCR refinery at a time that should maximize its value and allow us to accelerate and expand our already successful debt-reduction efforts."
In April 2006, Lyondell was granted an arbitration award related to a commercial dispute with Bayer. The award was not reflected in first-quarter earnings. It pertains to several issues related to the companies' U.S. PO and PO technology joint ventures and included declaratory judgment in Lyondell's favor concerning interpretation of the contract provisions at issue. Lyondell was awarded approximately $121 million, plus interest of approximately $23 million, through June 30, 2005. Additional amounts subject to finalization could include pre-award and post-award interest and attorney fees, costs and expenses.
LYONDELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
Lyondell operates in four segments: 1) Ethylene, co-products and derivatives; 2) PO and related products; 3) Inorganic chemicals; and 4) Refining, which includes Lyondell's 58.75 percent ownership of LCR, a joint venture with CITGO Petroleum Corp.
Ethylene, Co-products and Derivatives Segment -- The primary products of this segment are ethylene, ethylene co-products (propylene, butadiene and benzene), and derivatives of ethylene (polyethylene, ethylene oxygenates and vinyl acetate monomer or VAM).
Table 2 - Ethylene, Co-Products & Derivatives Financial Overview (A)
Millions of dollars 1Q 2006 1Q 2005 4Q 2005
Sales and other operating revenues $3,152 $2,974 $3,380
Operating income 299 392 337
EBITDA (B) 397 486 438
(A) See Table 6 for additional segment information.
(B) See Table 9 for reconciliations of segment EBITDA to net income of
Lyondell.
1Q06 v. 4Q05 -- Ethylene and ethylene derivative product sales volumes increased by approximately 70 million pounds (3 percent) versus the fourth quarter 2005. Quarterly average prices for ethylene and polyethylene decreased by 9 cents and 4 cents per pound, respectively, compared with the fourth quarter 2005. The company's cost-of-ethylene-production metric (COE) decreased by approximately 3 cents per pound versus the fourth quarter. Essentially all of this decrease is attributed to the lower price of natural-gas-based raw materials. Acetyls results improved by approximately $10 million, as margins increased due to lower raw material (natural gas and ethylene) costs.
1Q06 v. 1Q05 -- Ethylene and ethylene derivative product sales volumes were relatively unchanged versus the first quarter 2005. The quarterly average prices for ethylene and polyethylene increased by 6 cents and 8 cents per pound, respectively, while the average ethylene glycol price decreased by approximately 5 cents per pound compared with the first quarter 2005. The company's COE metric increased by approximately 8 cents per pound as the cost of production from both crude oil- and natural-gas-based raw materials increased. Elevated raw material costs in the first quarter 2006 resulted in a $20 million decline in acetyls results.
PO and Related Products Segment -- The principal products of the PO and related products segment include PO, PO derivatives (propylene glycol, propylene glycol ethers, butanediol and butanediol derivatives), styrene, MTBE and toluene diisocyanate (TDI).
Table 3 - PO & Related Products Financial Overview (A)
Millions of dollars 1Q 2006 1Q 2005 4Q 2005
Sales and other operating revenues $1,644 $1,523 $1,645
Operating income 117 89 35
EBITDA (B) 175 146 104
(A) See Table 6 for additional segment information.
(B) See Table 9 for a reconciliation of segment EBITDA to net income of
Lyondell.
1Q06 v. 4Q05 -- TDI results improved by approximately $40 million due to the absence of costs related to the shutdown of the Lake Charles TDI facility and higher margins. PO results improved by approximately $35 million primarily due to stronger margins. Styrene and MTBE results were relatively unchanged.
1Q06 v. 1Q05 -- Versus the year-ago quarter, results improved by approximately $29 million primarily due to moderately stronger results in TDI, PO and PO derivatives, and MTBE. PO and PO derivative volumes declined primarily due to lower aircraft deicer sales volumes related to the warm winter weather compared with first quarter 2005.
Inorganic Chemicals Segment -- The principal product of the inorganic chemicals segment is titanium dioxide (TiO2).
Table 4 - Inorganic Chemicals Financial Overview (A)
Millions of dollars 1Q 2006 1Q 2005 4Q 2005
Sales and other operating revenues $342 $318 $355
Operating income (loss) 20 21 (3)
EBITDA (B) 44 47 26
(A) See Table 6 for additional segment information.
(B) See Table 9 for a reconciliation of segment EBITDA to net income of
Lyondell.
1Q06 v. 4Q05 -- A decline in sales volumes of approximately 11,000 metric tons versus the fourth quarter 2005 was largely offset by an increase in the average sales price (in U.S. dollars) of approximately $50 per metric ton. Strong operations and lower natural gas costs resulted in a $20 million decline in production costs.
1Q06 v. 1Q05 -- Sales volumes were approximately 9,000 metric tons higher than the year-ago quarter, while average sales prices were approximately $20 per metric ton higher. North and South American price increases were partially offset by lower European prices. Production costs increased compared with the first quarter 2005 due to higher raw material and natural gas costs.
Refining Segment -- Lyondell owns a 58.75 percent interest in LCR, a major refiner of heavy crude oil. This interest is accounted for by the equity method.
Table 5 - Refining Financial Overview - 100% Basis (A)
Millions of dollars 1Q 2006 1Q 2005 4Q 2005
Sales and other operating revenues $2,094 $1,536 $1,440
Operating income (loss) (B) 162 118 (23)
EBITDA (B) (C) 193 146 7
(A) The Refining segment information presented above represents the
operating results of LCR on a 100 percent basis. See Table 6 for
additional segment information.
(B) Includes an $8 million charge for the three months ended March 31,
2006, representing reimbursement to Lyondell of legal fees and
expenses paid by Lyondell on behalf of LCR related to the settlement.
(C) See Table 9 for a reconciliation of segment EBITDA to net income of
LCR.
1Q06 v. 4Q05 -- Refinery crude processing rates increased by approximately 92,000 barrels per day versus the fourth quarter 2005, which was impacted by hurricane damage-related fluid catalytic cracking unit downtime. The total crude processing rate averaged 261,000 barrels per day while Venezuelan contract (CSA) crude volumes averaged 221,000 barrels per day during first quarter 2006. Increased spot crude volumes more than offset a reduction in spot crude margins. The refinery also benefited from lower natural gas costs and strong operations during the first quarter 2006.
1Q06 v. 1Q05 -- Versus the first quarter 2005, operating efficiencies, premium product production and higher margins (CSA and spot crude) more than offset increased natural gas costs and lower aromatic margins. Total crude volumes were relatively unchanged.
Cash Distributions and Debt Reduction
LCR to Lyondell Chemical Company -- During the first quarter 2006, LCR made a net distribution of $46 million to Lyondell Chemical Company.
Equistar to Lyondell Chemical Company and Millennium -- During the first quarter 2006, Lyondell Chemical Company received $141 million of distributions from Equistar. Millennium received $59 million from Equistar during the first quarter 2006.
Millennium to Lyondell Chemical Company -- There were no dividends paid by Millennium to Lyondell Chemical Company during the first quarter 2006.
Debt reduction -- During the first quarter 2006, Lyondell repaid $437 million principal amount of debt, of which $237 million was Millennium debt, $150 million was Equistar debt and the $50 million balance was Lyondell parent company debt.
CONFERENCE CALL
Lyondell will host a conference call today, April 27, 2006, 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, Vice President of Investor Relations. The dial-in numbers are 888-391-2385 (U.S. - toll free) and 517-645-6239 (international). The passcode for each is Lyondell. The call will be broadcast live on the Investor Relations page of the company's web site, http://www.lyondell.com/earnings .
A replay of the call will be available from 1:30 p.m. ET April 27 to 6 p.m. ET on May 4. The dial-in numbers are 888-567-0440 (U.S.) and 203-369-3442 (international). The passcode for each is 5549. Web replay will be available at 2:30 p.m. ET April 27, 2006, on the Investor Relations page of the company's web site, http://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 April 27 at http://www.lyondell.com/earnings .
ABOUT LYONDELL
Lyondell Chemical Company, headquartered in Houston, Texas, is North America's third-largest independent, publicly traded chemical company. Lyondell is a major global manufacturer of basic chemicals and derivatives including ethylene, propylene, titanium dioxide, styrene, polyethylene, propylene oxide and acetyls. It also is a significant producer of gasoline- blending components. The company has a 58.75 percent interest in Lyondell- Citgo Refining LP, a refiner of heavy, high-sulfur crude oil. As a result of Lyondell's November 30, 2004, acquisition of Millennium Chemicals Inc., Millennium and Equistar Chemicals, LP are wholly owned subsidiaries of Lyondell. Lyondell is a global company operating on five continents and employs approximately 10,000 people worldwide.
FORWARD-LOOKING STATEMENTS
The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of management, and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, availability, cost and price volatility of raw materials and utilities; supply/demand balances; industry production capacities and operating rates; cyclical nature of the chemical and refining industries; operating interruptions; uncertainties associated with the U.S. and worldwide economies; legal, tax and environmental proceedings; current and potential governmental regulatory actions; terrorist acts; international political unrest; competitive products and pricing; risks of doing business outside of the U.S.; access to capital markets; technological developments; Lyondell's ability to implement its business strategies, including the timing of, and value received in connection with, any potential sale of the LCR refinery; and other risk factors. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Lyondell, Equistar and Millennium Annual Reports on Form 10-K for the year ended December 31, 2005, and the Lyondell, Equistar and Millennium Quarterly Reports on Form 10-Q for the quarter ended March 31, 2006, which will be filed with the SEC in May 2006.
Table 6 - Selected Unaudited Segment Financial Information (A)
For the three months ended
March 31, Dec. 31,
(Millions of dollars) 2006 2005 2005
Sales and other operating revenues (B)
Ethylene, Co-Products & Derivatives $3,152 $2,974 $3,380
PO & Related Products 1,644 1,523 1,645
Inorganic Chemicals 342 318 355
Refining 2,094 1,536 1,440
Operating income (loss)
Ethylene, Co-Products & Derivatives $299 $392 $337
PO & Related Products 117 89 35
Inorganic Chemicals 20 21 (3)
Refining (C) 162 118 (23)
Depreciation and amortization
Ethylene, Co-Products & Derivatives $98 $95 $102
PO & Related Products 56 58 58
Inorganic Chemicals 24 24 22
Refining 31 28 30
EBITDA (D)
Ethylene, Co-Products & Derivatives $397 $486 $438
PO & Related Products 175 146 104
Inorganic Chemicals 44 47 26
Refining (C) 193 146 7
Capital expenditures
Ethylene, Co-Products & Derivatives $23 $37 $52
PO & Related Products 15 11 8
Inorganic Chemicals 10 5 21
Refining 60 34 55
(A) See Table 8 for a reconciliation of segment information for the three
months ended March 31, 2006 and 2005 and for the three months ended
December 31, 2005 to consolidated Lyondell financial information.
The Refining information presented above represents the operating
results of LCR on a 100% basis. See Tables 20 through 22 for
additional LCR financial information.
(B) Sales include sales to affiliates and intersegment sales.
(C) Includes an $8 million charge for the three months ended March 31,
2006 representing reimbursement to Lyondell of legal fees and
expenses paid by Lyondell on behalf of LCR related to the settlement.
(D) See Table 9 for reconciliation of segment EBITDA to net income.
Table 7 - Selected Segment Sales Volumes (A) (B)
For the three months ended
March 31, Dec. 31,
2006 2005 2005
Ethylene, Co-Products and Derivatives
(in millions)
Ethylene and derivatives (pounds) 2,871 2,908 2,799
Polyethylene included above (pounds) 1,333 1,337 1,258
Co-products, nonaromatic (pounds) 1,966 2,034 1,953
Aromatics (gallons) 89 102 103
PO and Related Products (in millions)
PO and derivatives (pounds) 834 884 831
Co-products:
Styrene monomer (pounds) 982 982 905
MTBE and other TBA derivatives
(gallons) 297 283 300
Inorganic Chemicals (thousand metric tons)
TiO2 151 142 162
Refined products (thousand barrels per day)
Gasoline 113 117 66
Diesel and heating oil 105 88 63
Jet fuel 10 20 8
Aromatics 8 8 8
Other refined products 114 87 90
Total refined products volumes 350 320 235
Refinery Runs
Crude processing rates (thousand
barrels per day)
Crude Supply Agreement 221 219 146
Other crude oil 40 43 23
Total crude oil 261 262 169
(A) The Refining information presented above represents the operating
results of LCR on a 100% basis.
(B) Sales volumes include sales to affiliates and intersegment sales.
Table 8 - Reconciliation of Segment Information to Consolidated
Lyondell Financial Information
Depreci-
Sales and ation
other Operating and Capital
operating income amorti- expend-
(Millions of dollars) revenues (loss) zation itures
For the three months ended
March 31, 2006:
Segment Data
Ethylene, Co-Products &
Derivatives $3,152 $299 $98 $23
PO & Related Products 1,644 117 56 15
Inorganic Chemicals 342 20 24 10
Other (A) (381) (4) 3 ---
Total $4,757 $432 $181 $48
For the three months ended
March 31, 2005:
Segment Data
Ethylene, Co-Products &
Derivatives $2,974 $392 $95 $37
PO & Related Products 1,523 89 58 11
Inorganic Chemicals 318 21 24 5
Other (A) (375) (1) 1 2
Total $4,440 $501 $178 $55
For the three months ended
December 31, 2005:
Segment Data
Ethylene, Co-Products &
Derivatives $3,380 $337 $102 $52
PO & Related Products 1,645 35 58 8
Inorganic Chemicals 355 (3) 22 21
Other (A) (380) (6) 2 3
Total $5,000 $363 $184 $84
(A) Includes elimination of intersegment sales and items not allocated
to segments.
Table 9 - Reconciliation of Segment EBITDA to Net Income
For the three months ended
March 31, Dec. 31,
(Millions of dollars) 2006 2005 2005
LYONDELL
Segment EBITDA:
Ethylene, Co-Products & Derivatives $397 $486 $438
PO & Related Products 175 146 104
Inorganic Chemicals 44 47 26
Other (B) 72 (11) (20)
Add:
Income (loss) from equity
investment in LCR 91 67 (16)
Deduct:
Depreciation and amortization (181) (178) (184)
Charges related to impairment
of assets (2) (2) (7)
Interest expense, net (128) (158) (141)
Provision for income taxes (178) (143) (59)
Lyondell net income $290 $254 $141
Refining EBITDA (A) $193 $146 $7
Deduct:
Depreciation and amortization (31) (28) (30)
Interest expense, net (11) (8) (12)
LCR net income (loss) $151 $110 $(35)
(A) The Refining information presented represents the operating results
of LCR on a 100% basis. See Tables 20 through 22 for additional LCR
financial information.
(B) Includes $74 million representing the net payments received by
Lyondell in resolution of various matters among Lyondell, CITGO and
Petroleos de Venezuela, S.A. and their respective
affiliates for the three months ended March 31, 2006.
Table 10 - Lyondell Unaudited Income Statement Information
For the three months ended
March 31, Dec. 31,
(Millions of dollars, except per
share data) 2006 2005 2005
Sales and other operating revenues $4,757 $4,440 $5,000
Cost of sales 4,171 3,784 4,469
Charges related to toluene
diisocyanate plant --- --- 24
Selling, general and administrative
expenses 131 132 121
Research and development expenses 23 23 23
Operating income 432 501 363
Income (loss) from equity
investment in LCR 91 67 (16)
Income (loss) from other equity
investments (1) 1 (1)
Interest expense, net (128) (158) (141)
Other income (expense), net 74 (14) (5)
Income before income taxes 468 397 200
Provision for income taxes 178 143 59
Net income $290 $254 $141
Basic earnings per share: $1.18 $1.04 $0.57
Diluted earnings per share: $1.12 $0.98 $0.54
Weighted average shares (in millions):
Basic 246.9 244.5 246.7
Diluted 259.3 259.8 260.3
Table 11 - Lyondell Unaudited Cash Flow Information
For the three months ended
March 31,
(Millions of dollars) 2006 2005
Net income $290 $254
Adjustments:
Depreciation and amortization 181 178
Income from equity investments (90) (68)
Distributions of earnings from affiliates 70 67
Deferred income taxes 77 115
Debt prepayment charges and premiums --- 12
Changes in assets and liabilities:
Accounts receivable 46 (332)
Inventories (187) (136)
Accounts payable (47) 130
Other, net (77) (59)
Cash provided by operating activities 263 161
Expenditures for property, plant and equipment (48) (55)
Distributions from affiliates in excess
of earnings --- 35
Contributions and advances to affiliates (37) (30)
Other --- 3
Cash used in investing activities (85) (47)
Repayment of long-term debt (A) (446) (211)
Dividends paid (56) (55)
Proceeds from stock option exercises 2 34
Other 2 (2)
Cash used in financing activities (498) (234)
Effect of exchange rate changes on cash 2 5
Decrease in cash and cash equivalents $(318) $(115)
(A) Includes prepayment premiums in the three months ended March 31, 2006
and 2005 of $9 million and $10 million, respectively.
Table 12 - Lyondell Unaudited Balance Sheet Information
March 31, Dec. 31,
(Millions of dollars) 2006 2005
Cash and cash equivalents $275 $593
Accounts receivable, net 1,656 1,677
Inventories 1,865 1,657
Prepaid expenses and other current assets 131 176
Deferred tax assets 346 198
Total current assets 4,273 4,301
Property, plant and equipment, net 6,494 6,530
Investments and long-term receivables:
Investment in PO joint ventures 786 776
Investment in and receivable from LCR 233 186
Other investments and long-term
receivables 110 114
Goodwill, net 2,230 2,245
Other assets, net 802 828
Total assets $14,928 $14,980
Current maturities of long-term debt $21 $319
Accounts payable 1,426 1,453
Accrued liabilities 753 797
Total current liabilities 2,200 2,569
Long-term debt 5,814 5,974
Other liabilities 1,836 1,786
Deferred income taxes 1,618 1,463
Minority interest 163 180
Stockholders' equity (247,313,692
and 247,050,234 shares outstanding
at March 31, 2006 and December 31, 2005,
respectively) 3,297 3,008
Total liabilities and stockholders'
equity $14,928 $14,980
Table 13 - Lyondell Selected Equity Investment Activity
For the three For the twelve
months ended months ended
March 31, December 31,
(Millions of dollars) 2006 2005
Investment in LCR, beginning of period $(90) $(37)
Lyondell's share of LCR net income 91 123
Cash distributions from LCR (70) (303)
Cash contributions to LCR 23 128
Other --- (1)
Investment in LCR, end of period $(46) $(90)
March 31, December 31,
Investment in and receivable from LCR 2006 2005
Investment in LCR $(46) $(90)
Note receivable from LCR 229 229
Interest receivable on Note 50 47
Total $233 $186
Tables 14 through 22 represent additional financial information
on a 100% basis for Equistar, Millennium and LCR.
Table 14 - Equistar Unaudited Income Statement Information (A)
For the three months ended
March 31,
(Millions of dollars) 2006 2005
Sales and other operating revenues (B) $3,036 $2,861
Cost of sales 2,670 2,417
Selling, general and administrative
expenses 48 50
Research and development expenses 8 8
Operating income 310 386
Interest expense, net (53) (54)
Other expense, net (1) ---
Net income (C) $256 $332
(A) Represents information for Equistar on a stand-alone basis and does
not reflect purchase accounting adjustments.
(B) Sales and other operating revenues include sales to affiliates.
(C) As a partnership, Equistar is not subject to federal income taxes.
Table 15 - Equistar Unaudited Balance Sheet Information (A)
March 31, December 31,
(Millions of dollars) 2006 2005
Cash and cash equivalents $33 $215
Accounts receivable, net 892 924
Inventories 801 657
Prepaid expenses and other current assets 43 53
Total current assets 1,769 1,849
Property, plant and equipment, net 3,022 3,063
Investments 57 58
Other assets, net 334 350
Total assets $5,182 $5,320
Current maturities of long-term debt $--- $150
Accounts payable 782 735
Accrued liabilities 182 275
Total current liabilities 964 1,160
Long-term debt 2,160 2,161
Other liabilities and deferred revenues 419 416
Partners' capital 1,639 1,583
Total liabilities and partners' capital $5,182 $5,320
(A) Represents information for Equistar on a stand-alone basis and does
not reflect purchase accounting adjustments.
Table 16 - Equistar Unaudited Cash Flow Information (A)
For the three months ended
March 31,
(Millions of dollars) 2006 2005
Net income $256 $332
Adjustments:
Depreciation and amortization 82 79
Changes in assets and liabilities:
Accounts receivable 35 (268)
Inventories (144) (71)
Accounts payable 46 149
Other, net (86) (87)
Cash provided by operating activities 189 134
Expenditures for property, plant and
equipment (22) (35)
Proceeds from sales of assets --- 3
Cash used in investing activities (22) (32)
Repayment of long-term debt (150) (1)
Distributions to owners (200) ---
Other 1 ---
Cash used in financing activities (349) (1)
Increase (decrease) in cash and
cash equivalents $(182) $101
(A) Represents information for Equistar on a stand-alone basis and does
not reflect purchase accounting adjustments.
Table 17 - Millennium Unaudited Income Statement Information (A)
For the three months ended
March 31, March 31,
(Millions of dollars) 2006 2005
Sales and other operating revenues (B) $484 $453
Cost of sales 438 365
Selling, general and administrative expenses 36 43
Research and development expenses 6 6
Asset impairments 2 2
Operating income (loss) 2 37
Interest expense, net (32) (24)
Other income (expense), net (9) (9)
Income (loss) before equity investment,
minority interest and income taxes (39) 4
Income from equity investment in Equistar 75 98
Income before income taxes and minority
interest 36 102
Provision for income taxes 2 37
Income (loss) before minority interest 34 65
Minority interest (1) (1)
Net income (loss) $33 $64
(A) Represents information for Millennium on a stand-alone basis and does
not reflect purchase accounting adjustments.
(B) Sales and other operating revenues include sales to affiliates.
Table 18 - Millennium Unaudited Balance Sheet Information (A)
March 31, December 31,
(Millions of dollars) 2006 2005
Cash and cash equivalents $99 $279
Accounts receivable, net 366 361
Inventories 427 429
Prepaid expenses and other current assets 107 79
Total current assets 999 1,148
Property, plant and equipment, net 649 647
Investments in Equistar 480 464
Goodwill 104 104
Other assets, net 105 110
Total assets $2,337 $2,473
Current maturities of long-term debt $21 $169
Accounts payable 342 367
Accrued liabilities 169 156
Total current liabilities 532 692
Long-term debt 873 966
Other liabilities 647 644
Deferred income taxes 229 167
Minority interest 46 42
Stockholder's equity (deficit)
(100,000,000 shares authorized;
66,135,186 shares outstanding at
March 31, 2006 and December 31, 2005) 10 (38)
Total liabilities and stockholders'
equity $2,337 $2,473
(A) Represents information for Millennium on a stand-alone basis and does
not reflect purchase accounting adjustments.
Table 19 - Millennium Unaudited Cash Flow Information (A)
For the three months ended
March 31,
(Millions of dollars) 2006 2005
Net income $33 $64
Adjustments:
Asset impairments 2 2
Depreciation and amortization 27 26
Debt prepayment charges and premiums 7 ---
Deferred income taxes --- 9
Income from equity investment
in Equistar (75) (98)
Distributions of earnings
from Equistar 59 ---
Changes in assets and liabilities:
Accounts receivable (2) (14)
Inventories 7 (64)
Accounts payable (30) 24
Other, net 44 21
Cash provided by (used in)
operating activities 72 (30)
Expenditures for property, plant
and equipment (11) (9)
Cash used in investing activities (11) (9)
Repayment of long-term debt (244) ---
Contribution from Lyondell --- 6
Other 2 ---
Cash provided by (used in)
financing activities (242) 6
Effect of exchange rate changes on cash 1 (2)
Decrease in cash and cash equivalents $(180) $(35)
(A) Represents information for Millennium on a stand-alone basis and does
not reflect purchase accounting adjustments.
Table 20 - LCR Unaudited Income Statement Information
For the three months ended
March 31, December 31,
(Millions of dollars) 2006 2005 2005
Sales and other operating revenues (A) $2,094 $1,536 $1,440
Cost of sales 1,915 1,406 1,446
Selling, general and administrative
expenses 17 12 17
Operating income (loss) 162 118 (23)
Interest expense, net (11) (8) (12)
Net income (loss) (B) $151 $110 $(35)
EBITDA (C) $193 $146 $7
(A) Sales and other operating revenues include sales to affiliates.
(B) As a partnership, LCR is not subject to federal income taxes.
(C) See Table 9 for reconciliation of LCR's net income to EBITDA.
Table 21 - LCR Unaudited Balance Sheet Information
March 31, December 31,
(Millions of dollars) 2006 2005
Total current assets $458 $418
Property, plant and equipment, net 1,359 1,328
Other assets, net 81 86
Total assets $1,898 $1,832
Current maturities of long-term debt $5 $5
Other current liabilities 860 800
Long-term debt 438 439
Loans payable to partners 264 264
Other liabilities 115 113
Partners' capital 216 211
Total liabilities and partners' capital $1,898 $1,832
Table 22 - LCR Unaudited Cash Flow Information
For the three months ended
March 31,
(Millions of dollars) 2006 2005
Cash flow from operations $192 $240
Capital expenditures 60 34
Depreciation and amortization 31 28
SOURCE: Lyondell Chemical Company; Equistar Chemicals, LP; Millennium
CONTACT: media, Susan Moore, +1-713-309-4645, or investors, Doug Pike,
+1-713-309-7141, both of Lyondell Chemical Company
Web site: http://www.lyondell.com/
http://www.lyondell.com/earnings
