CITGO Announces 2004 Second Quarter and Six Months Results
TULSA, Okla., Aug. 2, 2004 -- Luis Marin, CITGO Petroleum Corporation's President and CEO, today announced second quarter net income of $172-million and six months ended June 30 net income of $207-million. Net income during the second quarter and first six months of the year exceeded that of the same time periods in 2003 (excluding insurance recoveries) by $80-million and $51-million, respectively. This outstanding performance in 2004 exceeded 2003 results (excluding insurance recoveries) by 88-percent for the second quarter and 32-percent for the first six months of the year and also significantly exceeded budgeted expectations.
According to Marin, the company's outstanding performance was based on employees' efforts in accomplishing the following:
-- Strong cash flows permitted the repayment of the $200-million Senior
Secured Term Loan prior to its maturity, which was scheduled for
February 27, 2006. The $200-million Senior Secured Term Loan was
supported by the Company's equity interests in Colonial and Explorer
pipelines. Consequently, all of CITGO's remaining debt is unsecured
and future interest expense will be reduced.
-- CITGO was also successful in extending the maturities on $95-million
of outstanding Letters of Credit supporting various tax-exempt
industrial revenue bonds in the second quarter.
-- The second of two new gasoline hydrotreaters was completed and brought
on-line at the Lake Charles, La. refinery as part of the Tier II
gasoline program. These units help produce the environmentally
friendly gasoline that will aid in the improvement of air quality in
CITGO's marketing areas.
-- All of CITGO's refineries were recognized by the National
Petrochemical & Refiners Association (NPRA), receiving multiple awards
for outstanding safety performance.
-- Utilization of our light oils refineries was limited to 84-percent in
the first quarter due to an unusually heavy level of scheduled
turnarounds. Following completion of the first quarter turnarounds,
utilization in the second quarter increased to 99-percent, allowing us
to take advantage of strong market conditions during the period and
positioning us to take full advantage of market opportunities for the
balance of the year.
-- Overall, we had outstanding performance in the execution of our
turnarounds, which were completed on schedule and on budget. Total
turnaround expenses during the first half of the year, most of which
were incurred during the first quarter, approached $80-million, which
compares with a historical annual average of about $60-million.
-- The capital spending in 2004 associated with the implementation of the
Tier II environmental projects, the major expansion at Lake Charles,
and the replacement of coker drums at Lake Charles continued on budget
and on schedule.
"With the strong foundation built in the first half of this year, we expect continued improvement in our performance for the rest of 2004," concluded Marin.
EARNINGS CONFERENCE CALL
CITGO's executive team will conduct a conference call on Tuesday, August 3, 2004, at 12:30 p.m. (CDT) to discuss second quarter 2004 earnings. Interested parties inside the U.S. may access the call by dialing 800-450-0788. Interested parties outside the U.S. may access the call by dialing 800-553-0351.
A recorded playback of the conference call will be available beginning on August 3 at 5:45 p.m. (CDT) and ending on August 17 at 11:59 p.m. (CDT). To access the recording inside the U.S. dial 800-475-6701, access code: 740700. To access the recording outside the U.S. dial 320-365-3844, access code: 740700.
ABOUT CITGO
CITGO Petroleum Corporation is a leading refining and marketing company based in Tulsa, Okla., with approximately 4,000 employees and annual revenues of approximately $25 billion. CITGO's ultimate parent is Petroleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela and its largest supplier of crude oil.
CITGO operates fuels refineries in Lake Charles, La., Corpus Christi, Texas, and Lemont, Ill., and asphalt refineries in Paulsboro, NJ and Savannah, Ga. The company has long-term crude oil supply agreements with PDVSA for a portion of the crude oil requirements at these facilities. CITGO is also a 41-percent participant in LYONDELL-CITGO Refining LP, a joint venture fuels refinery located in Houston, Texas. CITGO's interests in these refineries result in a total crude oil capacity of approximately 865,000 barrels per day.
Serving nearly 14,000 branded, independently owned and operated retail locations, CITGO is also one of the five largest branded gasoline suppliers within the United States.
CITGO Petroleum Corporation and Subsidiaries
Statement of Income Data (Unaudited)
(Dollars in Millions)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
Net sales $8,065.2 $6,021.1 $14,720.4 $12,396.7
Cost of sales and operating
expenses 7,734.8 5,811.2 14,275.6 12,017.0
Gross margin 330.4 209.9 444.8 379.7
Equity in earnings of LCR 40.4 21.6 75.6 30.7
Equity in earnings of affiliates 8.8 9.4 19.6 13.9
Insurance recoveries --- 26.6 --- 144.3
Other income (expense) - net 0.9 0.8 0.6 15.7
Subtotal 380.5 268.3 540.6 584.3
Selling, general and
administrative 72.1 64.1 145.7 137.3
Operating income 308.4 204.2 394.9 447.0
Interest expense 39.5 34.3 71.8 58.7
Income before income taxes 268.9 169.9 323.1 388.3
Income taxes 96.8 61.2 116.3 139.8
Net Income $172.1 $108.7 $206.8 $248.5
CITGO Petroleum Corporation and Subsidiaries
Summarized Balance Sheet Data
(Dollars in Millions)
June 30, December 31,
2004 2003
(Unaudited)
Current assets $2,931.8 $2,379.3
Total assets 7,838.0 7,273.5
Current liabilities 2,207.8 1,716.0
Total debt 1,292.4 1,501.8
Total liabilities 5,128.4 4,772.0
Shareholder's equity 2,709.6 2,501.5
Total capitalization 4,002.0 4,003.3
CITGO Petroleum Corporation and Subsidiaries
Summarized Cash Flow Data (Unaudited)
(Dollars in Millions)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
Net Income $172.1 $108.7 $206.8 $248.5
Depreciation and amortization 93.1 83.7 179.8 162.8
Other adjustments to reconcile net
income to net cash provided by
operating activities 33.2 69.2 59.3 163.7
Changes in operating assets and
liabilities 41.7 (234.5) 103.4 (248.3)
Net cash provided by operating
activities 340.1 27.1 549.3 326.7
Capital expenditures (71.7) (118.2) (138.9) (208.7)
Other investing activities, net (1.5) (1.5) (9.1) (16.0)
Net cash used in investing activities (73.2) (119.7) (148.0) (224.7)
Net cash (used in) provided by
financing activities (201.8) (142.3) (211.2) 111.3
Increase (decrease) in cash and cash
equivalents $65.1 $(234.9) $190.1 $213.3
Market Indicators (Dollars per Barrel, except as otherwise indicated)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
West Texas Intermediate, "WTI"
(sweet) $38.28 $29.02 $36.80 $31.51
Crack Spreads:
Gulf Coast 3/2/1 8.98 3.56 7.60 4.51
Chicago 3/2/1 10.87 6.37 8.94 6.37
Crude Oil Differentials:
WTI less WTS (sour) 2.88 2.28 3.21 2.97
WTI less Maya (heavy sour) 8.70 7.17 9.07 7.37
WTI less Bow River (Canadian) 11.01 6.77 10.11 7.27
Natural Gas (per mmbtu) 6.16 5.74 5.94 5.83
Source for crude and product indicators is Platts using a business day
average.
Source for natural gas is NYMEX using a business day average.
CITGO Petroleum Corporation and Subsidiaries
Selected Feedstock, Utilization and Production Volumetric Data (Unaudited)
(Mbbls per day)
Three Months Ended Three Months Ended
June 30, 2004 June 30, 2003
Lake Corpus Lake Corpus
Charles Christi Lemont Total Charles Christi Lemont Total
Feedstocks:
Crude oil
throughput
Sweet (A) 113 10 --- 123 93 2 5 100
Light/Medium
sour (B) 18 2 82 102 33 10 83 126
Heavy sour (C) 23 26 81 130 51 6 74 131
Contract
(heavy sour) 158 122 --- 280 137 128 --- 265
Total crude
oil 312 160 163 635 314 146 162 622
Unfinished
feedstocks 36 69 18 123 55 66 14 135
Total
feedstocks 348 229 181 758 369 212 176 757
Rated crude
capacity at
period end 320 157 167 644 320 157 167 644
Utilization of
rated crude
capacity 98% 102% 98% 99% 98% 93% 97% 97%
Production:
Light fuels
Gasoline 185 86 95 366 183 93 92 368
Jet fuel 65 --- --- 65 61 --- 1 62
Diesel /
#2 fuel 55 69 43 167 56 52 41 149
Total light
fuels 305 155 138 598 300 145 134 579
Petrochemicals
and industrial
products 55 73 46 174 78 65 43 186
Total
production 360 228 184 772 378 210 177 765
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
Lake Corpus Lake Corpus
Charles Christi Lemont Total Charles Christi Lemont Total
Feedstocks:
Crude oil
throughput
Sweet (A) 102 4 --- 106 86 5 6 97
Light/Medium
sour (B) 17 3 80 100 51 10 76 137
Heavy sour (C) 26 16 79 121 45 18 78 141
Contract
(heavy sour) 164 96 --- 260 130 119 --- 249
Total crude
oil 309 119 159 587 312 152 160 624
Unfinished
feedstocks 29 79 18 126 55 64 14 133
Total
feedstocks 338 198 177 713 367 216 174 757
Rated crude
capacity at
period end 320 157 167 644 320 157 167 644
Utilization of
rated crude
capacity 97% 76% 95% 91% 98% 97% 96% 97%
Production:
Light fuels
Gasoline 176 81 94 351 183 94 92 369
Jet fuel 61 --- --- 61 64 --- 1 65
Diesel / #2
fuel 54 49 39 142 55 57 41 153
Total light
fuels 291 130 133 554 302 151 134 587
Petrochemicals
and industrial
products 57 66 44 167 77 64 41 182
Total
production 348 196 177 721 379 215 175 769
(A) Sweet crude has a sulfur content of .5% or less.
(B) Light sour crude has an average API gravity of more than 31 degrees.
Medium sour crude has an average API gravity of more than 25 degrees
up to 31 degrees.
(C) Heavy sour crude has an average API gravity of 25 degrees or less.
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