Highlights HOUSTON, Oct. 25 /PRNewswire-FirstCall/ -- Lyondell
Chemical Company (NYSE:LYO) today announced income for the third
quarter 2007 of $206 million, or 78 cents per share on a fully
diluted basis. For the first nine months of 2007, income from
continuing operations was $483 million, or $1.83 per share on a
fully diluted basis. Comparisons with the prior quarter, third
quarter 2006 and first nine months of 2006 are available in the
following table. Table 1 - Lyondell Earnings Summary (a) 1st Nine
1st Nine Months Months Millions of dollars 3Q 2007 3Q 2006 2Q 2007
2007 2006 except per share amounts Sales and other operating
revenues $7,385 $5,815 $7,482 $20,656 $14,948 Income from
continuing operations 206 61 271 483 476 Net income 206 57 176 401
507 Income from continuing operations: Basic earnings per share
0.81 0.24 1.07 1.91 1.92 Diluted earnings per share 0.78 0.23 1.02
1.83 1.84 Net income: Basic earnings per share 0.81 0.23 0.69 1.59
2.05 Diluted earnings per share 0.78 0.22 0.66 1.52 1.96 Basic
weighted average shares outstanding (millions) 253.3 247.7 252.9
252.4 247.3 Diluted weighted average shares outstanding (millions)
(b) 266.3 260.5 265.7 265.2 260.0 (a) Results include 100% of the
operations of Houston Refining LP ("Houston Refining")
prospectively from August 16, 2006. Prior to August 16, 2006,
Lyondell's 58.75% interest in Houston Refining was accounted for as
an equity investment. (b) Includes the dilutive effect of the
convertible debentures, stock options and warrants. Third-quarter
2007 results from continuing operations declined versus the second
quarter 2007 primarily due to lower refining segment results.
Following a record second quarter, third-quarter refining results
remained good; however, industry margins narrowed earlier than
expected, ahead of the typical Labor Day pattern. Ethylene segment
results were relatively unchanged as significant product price
increases were only sufficient to offset raw material cost
increases, which finished the quarter at record levels. In the
propylene oxide segment, both chemical and fuel product (MTBE/ETBE)
results were relatively unchanged versus the second quarter.
Additionally, results reflect the following: Table 2 - Charges
(Benefits) Included in Lyondell's Results from Continuing
Operations 1st Nine 1st Nine Months Months Millions of dollars 3Q
2007 3Q 2006 2Q 2007 2007 2006 Pretax charges (benefits): Effect of
stock price increases on incentive compensation expense (a) $42 $13
$43 $123 $6 Foreign exchange (gains) losses on intercompany loans
(26) -- 1 (24) -- Insurance settlement (b) (30) -- -- (30) --
Merger-related expenses 11 -- -- 11 -- Net charges (benefits)
related to commercial disputes (c) 5 -- 10 77 (70) Debt retirement
charges 4 21 43 47 21 Lake Charles ethylene facility impairment (d)
-- 106 -- -- 106 Refining segment contract termination cost (e) --
176 -- -- 176 Mutual insurance consortia losses -- 10 -- -- 15
Texas Margin Tax credit, net of federal income tax -- -- (17) (17)
-- Other tax effects of net charges (13) (114) (34) (83) (89)
After-tax effect of net charges (benefits) (7) 212 46 104 165
Effect of net charges (benefits)on diluted earnings per share
(0.03) 0.81 0.17 0.39 0.63 (a) Increases in the market price of
Lyondell's common stock during the periods resulted in recognition
of incentive compensation expense in excess of the amounts of
expense that would have been recognized if the market price had not
increased. (b) Lyondell's pro rata share of the proceeds from final
settlement of Houston Refining LP("Houston Refining") insurance
claims related to Hurricane Rita in 2005. (c) Includes charges
associated with the 2005 shutdown of the Lake Charles toluene
diisocyanate ("TDI") facility, the resolution of various matters
among Houston Refining, its owners and their affiliates, and other
disputes. (d) Represents impairment of the carrying value of the
Lake Charles, Louisiana ethylene facility and related assets. (e)
Represents Lyondell's 58.75% share of the cost to terminate Houston
Refining's previous crude supply agreement. "Results across our
ethylene and propylene oxide segments were unchanged versus the
second quarter as raw material cost increases offset the benefits
of product price increases," said Dan F. Smith, chairman, president
and CEO of Lyondell Chemical Company. "Entering the quarter, we and
many others in the industry expected that crude oil and ethane
costs would plateau at then- current levels; however, they
continued to escalate. As a result, significant price increases
were required just to offset the cost increases, and margins did
not expand to levels that we believe reflect the supply/demand
balance. Refining results, while solid, reflected the fact that
industry spreads declined from very strong early-summer levels
earlier than usual. This occurred despite record low gasoline and
distillate inventories as measured by days of inventory.
"Unfortunately, crude oil and ethane prices have increased steadily
throughout the year, and a certain amount of time is needed to pass
increases of this magnitude through the chemical and polymer
markets. As a consequence, year-to-date results have not fully
reflected existing industry operating rates. Despite these industry
trends, we have generated strong results." OUTLOOK Thus far in the
fourth quarter, both crude oil and ethane price increases have
accelerated, setting new highs. Quarter to date, our refining
spreads are slightly less than the third-quarter average as our
heavy crude advantage has partially offset declines in base
refining margins. In the ethylene, co- products and derivatives
segment, record high raw material costs are offsetting the benefit
of recent price increases, necessitating further pricing
initiatives. In our propylene oxide and related products segment,
oxygenated fuel (MTBE/ETBE) margins have declined following typical
seasonal patterns. LYONDELL BUSINESS RESULTS DISCUSSION BY
REPORTING SEGMENT Lyondell operates in three segments: 1) Ethylene,
co-products and derivatives; 2) Propylene oxide (PO) and related
products; and 3) Refining. Inorganic chemicals is presented as a
discontinued operation due to the May 15 sale of this business.
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 3 - Ethylene, Co-Products & Derivatives Financial
Overview (a) 1st Nine 1st Nine Months Months Millions of dollars 3Q
2007 3Q 2006 2Q 2007 2007 2006 Sales and other operating revenues
$3,568 $3,586 $3,637 $10,173 $10,116 Operating income (b) 83 173 95
255 653 EBITDA (b)(c) 180 372 194 551 1,048 (a) See Table 6 for
additional financial information. (b) Operating income for the
third quarter and first nine months of 2006 included an impairment
charge of $106 million, which is excluded from EBITDA. (c) See
Table 9 for a reconciliation of segment EBITDA to income from
continuing operations. 3Q07 v. 2Q07 -- Ethylene and ethylene
derivative product sales volumes decreased by approximately 140
million pounds (approximately 4.5 percent) versus the second
quarter 2007 due to lower derivative sales. Compared with the
second quarter, our quarterly average prices for ethylene,
polyethylene and ethylene glycol increased by approximately 6
cents, 5 cents and 3 cents per pound, respectively. The company's
average cost-of-ethylene-production metric (COE) increased by
approximately 6 cents per pound versus the second quarter primarily
due to increased production costs from crude oil-based raw
materials. The cost of ethylene production from natural gas-based
raw materials also increased; however, the impact was somewhat
smaller within our portfolio. Acetyls results increased by
approximately $10 million as a result of higher product prices.
3Q07 v. 3Q06 -- Ethylene and ethylene derivative product sales
volumes increased by approximately 110 million pounds
(approximately 4 percent) versus the third quarter 2006. The
quarterly average prices for ethylene and polyethylene each
decreased by approximately 1 cent per pound, while our ethylene
glycol price increased by approximately 3 cents per pound. The
company's average COE metric increased by approximately 6.5 cents
per pound primarily due to increased costs from crude oil-based raw
materials. Acetyls results improved by approximately $10 million as
a result of increased acetic acid and vinyl acetate monomer prices.
Higher incentive-related compensation costs reduced the segment's
results by a total of approximately $25 million. 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, fuel products (methyl tertiary butyl ether [MTBE] and
ethyl tertiary butyl ether [ETBE]), isobutylene and toluene
diisocyanate (TDI). Table 4 - PO & Related Products Financial
Overview (a) 1st Nine 1st Nine Months Months Millions of dollars 3Q
2007 3Q 2006 2Q 2007 2007 2006 Sales and other operating revenues
$2,131 $1,900 $2,169 $6,058 $5,307 Operating income (b) 170 133 133
330 358 EBITDA (b)(c) 229 195 196 513 540 (a) See Table 6 for
additional financial information. (b) Includes pretax charges in
the third quarter, second quarter and first nine months of 2007 of
$5 million, $10 million and $77 million, respectively, related to
commercial disputes, including charges associated with the 2005
shutdown of the Lake Charles TDI facility. (c) See Table 9 for a
reconciliation of segment EBITDA to income from continuing
operations. 3Q07 v. 2Q07 -- Segment EBITDA increased by $33 million
versus the second quarter 2007. Among the chemical products, PO and
PO derivatives improved by approximately $10 million, and styrene
results improved $5 million. TDI results improved by approximately
$20 million primarily due to a combination of higher product
margins and the absence of second-quarter maintenance turnaround
impacts. A scheduled catalyst change at our Channelview facility
contributed to a slight $5 million decline in fuel-products
third-quarter results. 3Q07 v. 3Q06 -- Segment EBITDA increased by
$34 million versus the third quarter 2006. Higher incentive-related
compensation costs reduced the segment's results by a total of
approximately $15 million, but were more than offset by the
following net improvement in underlying operating results. Fuel
product results increased by approximately $40 million due to
higher margins. PO and PO derivative results decreased by
approximately $10 million primarily due to increased operating
costs, as price increases offset the impact of increased raw
material costs. TDI results increased by approximately $20 million
due to stronger margins, while styrene results improved $5 million.
Refining Segment -- Lyondell owned a 58.75 percent interest in
Houston Refining LP (formerly known as Lyondell-Citgo Refining LP)
prior to Aug. 16, 2006, at which time Lyondell purchased the
remaining 41.25 percent interest from CITGO Petroleum Corporation.
Prior to the purchase, Lyondell's interest was accounted for by the
equity method. As a result of the acquisition, Houston Refining's
operations are consolidated from Aug. 16. The following review is
on a 100-percent basis. Table 5 - Refining Financial Overview -
100% Basis (a) 1st Nine 1st Nine Months Months Millions of dollars
3Q 2007 3Q 2006 2Q 2007 2007 2006 Sales and other operating
revenues $2,799 $2,288 $2,793 $7,476 $6,793 Operating income (loss)
(b) 209 (98) 387 674 227 EBITDA (c) 275 (54) 451 859 333 (a) The
Refining segment information presented above represents the
historical operating results of Houston Refining on a 100% basis,
and reflects purchase accounting adjustments from August 16, 2006.
See Table 6 for additional financial information. (b) Operating
income for the first nine months of 2007 includes $30 million of
proceeds from final settlement of all Houston Refining insurance
claims related to Hurricane Rita in 2005 and for the first nine
months of 2006 includes a third quarter 2006 charge of $300 million
for the termination of the previous crude supply agreement with
Petroleos de Venezuela, S.A. ("PDVSA") and a second quarter 2006
charge of $8 million representing reimbursement to Lyondell of
legal fees and expenses paid by Lyondell on behalf of Houston
Refining related to a settlement. (c) See Table 9 for a
reconciliation of segment EBITDA to income from continuing
operations and, as appropriate, to net income of Houston Refining.
3Q07 v. 2Q07 -- Segment EBITDA declined by $176 million primarily
due to lower margins. Our refining spreads declined by
approximately $8 per barrel of crude processed consistent with the
decline in the reported industry Maya 2-1-1 spread. Crude volumes
processed were essentially unchanged. As anticipated, segment
results were negatively impacted by approximately $30 million due
to catalyst changes at two critical hydrodesulfurization (HDS)
units. Conversely, the third quarter benefited from strong fluid
catalytic cracker operations while the previous quarter was
negatively impacted by approximately $25 million associated with
maintenance. Additionally, the third quarter benefited by $30
million as the result of final settlement of our 2005 insurance
claim related to Hurricane Rita. 3Q07 v. 3Q06 -- Results increased
by $329 million primarily due to the absence of the $300 million
third-quarter 2006 charge related to cancelling the previous crude
supply agreement with PDVSA. Operationally, quarter-to- quarter
changes were minimal as both crude volumes and margins were
relatively unchanged. Aromatic and lube oil results improved by a
combined $15 million. The previously mentioned catalyst changes and
insurance settlement approximately offset each other. Cash
Distributions and Debt Reduction Equistar Chemicals, LP to Lyondell
Chemical Company (LCC) and Millennium Chemicals Inc. -- There were
no distributions during the quarter. Millennium to Lyondell
Chemical Company (LCC) -- There were no dividends paid by
Millennium to LCC during the third quarter. Debt Reduction --
During the third quarter, debt repayment, including scheduled
amortization of term loans, totaled $512 million, all at LCC. LCC
repaid the $500 million of debt called in July 2007. Receivable
Facilities Utilization -- As of Sept. 30, 2007, Lyondell's
receivable facility was unutilized and Equistar's receivable
facility was utilized by $40 million. CONFERENCE CALL Recorded
comments by Doug Pike, Vice President of Investor Relations, will
be available today, Oct. 25, 2007, beginning at 11:30 a.m. Eastern
Time (ET). The dial-in numbers are 800-568-6276 (U.S. - toll free)
and 402-344-6819 (international). The pass code for each is 5549.
Web replay of the recorded comments will be available beginning at
11:30 a.m. ET 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 Oct. 25 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 leading global manufacturer of chemicals and
plastics, a refiner of heavy, high-sulfur crude oil and a
significant producer of fuel products. Key products include
ethylene, polyethylene, styrene, propylene, propylene oxide,
gasoline, ultra low-sulfur diesel, MTBE and ETBE. 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, Lyondell's ability to implement its business
strategies, including the ability of Lyondell and Basell to
complete the proposed merger; availability, cost and price
volatility of raw materials and utilities; supply/demand balances;
industry production capacities and operating rates; uncertainties
associated with the U.S. and worldwide economies; legal, tax and
environmental proceedings; cyclical nature of the chemical and
refining industries; operating interruptions; current and potential
governmental regulatory actions; terrorist acts; international
political unrest; competitive products and pricing; technological
developments; risks of doing business outside of the U.S.; access
to capital markets; 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, 2006, Quarterly Reports on Form 10-Q for the
quarter ended June 30, 2007 and Quarterly Reports on Form 10-Q for
the quarter ended September 30, 2007 which will be filed with the
SEC in November 2007. Additional Information and Where to Find It
In connection with the solicitation of proxies by Lyondell Chemical
Company (the "Company") with respect to the meeting of its
stockholders regarding the proposed merger, the Company has filed a
definitive proxy statement with the Securities and Exchange
Commission (the "SEC"). A definitive proxy statement and a form of
proxy have been mailed to the stockholders of Lyondell.
STOCKHOLDERS OF THE COMPANY ARE ADVISED TO READ THE DEFINITIVE
PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION.
Stockholders may obtain a free-of-charge copy of the proxy
statement and other relevant documents filed with the SEC from the
SEC's web site at http://www.sec.gov/. Stockholders may also obtain
a free-of-charge copy of the proxy statement and other relevant
documents by directing a request by mail to Lyondell Chemical
Company, Investor Relations, 1221 McKinney Street, Suite 700,
Houston, Texas 77010, telephone (713) 309-4590, or from the
Company's web site at http://www.lyondell.com/. The Company and
certain of its directors and executive officers may, under the
rules of the SEC, be deemed to be "participants" in the
solicitation of proxies from its stockholders in connection with
the proposed merger. Information concerning the interests of the
persons who may be "participants" in the solicitation is set forth
in the Company's definitive proxy statement and annual reports on
Form 10-K (including any amendments thereto), previously filed with
the SEC. Table 6 - Selected Unaudited Financial Information For the
three For the nine months ended months ended September 30, June 30,
September 30, (Millions of dollars) 2007 2006 2007 2007 2006 Sales
and other operating revenues: (a)(b) Ethylene, Co-Products &
Derivatives $3,568 $3,586 $3,637 $10,173 $10,116 PO & Related
Products 2,131 1,900 2,169 6,058 5,307 Refining 2,799 2,288 2,793
7,476 6,793 Operating income (loss): (a) Ethylene, Co-Products
& Derivatives (c) $83 $173 $95 $255 $653 PO & Related
Products (d) 170 133 133 330 358 Refining (e) 209 (98) 387 674 227
Depreciation and amortization: (a) Ethylene, Co-Products &
Derivatives $96 $94 $96 $290 $288 PO & Related Products 59 57
59 177 172 Refining 66 44 64 185 106 EBITDA: (f) Ethylene,
Co-Products & Derivatives $180 $372 $194 $551 $1,048 PO &
Related Products (d) 229 195 196 513 540 Refining 275 (54) 451 859
333 Capital expenditures: (a) Ethylene, Co-Products &
Derivatives $65 $44 $53 $159 $110 PO & Related Products 25 21
19 53 54 Refining 25 61 28 143 170 Discontinued Operations -
Inorganic Chemicals: (g) Sales and other operating revenues $- $339
$181 $514 $1,035 Income (loss) from discontinued operations, net of
tax - (4) (95) (82) 31 Capital expenditures - 19 7 15 42 (a) See
Table 8 for a reconciliation of segment information for the three
and nine months ended September 30, 2007 and 2006 and the three
months ended June 30, 2007 to consolidated Lyondell financial
information. The Refining information presented above represents
operating results of Houston Refining on a 100% basis. Lyondell
acquired the remaining 41.25% of Houston Refining on August 16,
2006. From August 16, 2006, depreciation and amortization, as well
as operating income, reflect the effects of that acquisition. See
Table 13 for additional Houston Refining financial information. (b)
Sales include intersegment sales. (c) Includes a $106 million
charge for the three and nine months ended September 30, 2006 for
the impairment of the carrying value of the Lake Charles, Louisiana
ethylene facility. (d) Includes net pretax charges of $5 million,
$10 million and $77 million, respectively, in the three months
ended September 30, 2007, the three months ended June 30, 2007 and
the nine months ended September 30, 2007 related to commercial
disputes, including charges associated with the 2005 shutdown of
the Lake Charles TDI facility. (e) Includes a benefit for the three
and nine months ended September 30, 2007 of $30 million for
Lyondell's pro rata share of the proceeds from final settlement of
all Houston Refining insurance claims related to Hurricane Rita in
2005, a charge for the three and nine months ended September 30,
2006 of $300 million for the termination of Houston Refining's
previous crude supply agreement with PDVSA, a charge for the three
months ended June 30, 2006 and nine months ended September 30, 2006
of $8 million representing reimbursement to Lyondell of legal fees
and expenses paid by Lyondell on behalf of Houston Refining related
to a settlement of commercial disputes. (f) See Table 9 for a
reconciliation of segment EBITDA to income from continuing
operations. (g) On May 15, 2007, Lyondell completed the sale of its
worldwide inorganic chemicals business. Table 7 - Selected
Operating Information (a) For the three For the nine months ended
months ended June September 30, 30, September 30, 2007 2006 2007
2007 2006 Selected Segment Sales Volumes: Ethylene, Co-Products and
Derivatives (in millions) Ethylene and derivatives (pounds) 2,944
2,836 3,083 8,985 8,637 Polyethylene included above (pounds) 1,421
1,353 1,502 4,402 4,175 Co-products, nonaromatic (pounds) 1,951
2,171 2,009 5,985 6,291 Aromatics (gallons) 89 89 87 271 266 PO and
Related Products (in millions) PO and derivatives (pounds) 783 813
794 2,445 2,410 Co-products: Styrene monomer (pounds) 971 1,208 991
2,949 3,221 Fuel products and other TBA derivatives (gallons) 368
321 374 1,042 908 Refined products (thousand barrels per day) (b)
Gasoline 149 112 136 122 114 Diesel and heating oil 85 84 90 82 90
Jet fuel 17 22 22 20 14 Aromatics 7 7 8 7 7 Other refined products
118 112 121 127 115 Total refined products volumes 376 337 377 358
340 Refining Metrics: (b) Crude processing rates (thousand barrels
per day) 271 270 273 259 268 Throughput margin ($ per barrel) (c )
17.01 25.44 19.28 Market margins ($ per barrel): (d) WTI 2-1-1
12.41 21.67 14.46 WTI-Maya 12.00 10.00 11.58 Total 24.41 31.67
26.04 (a) Sales volumes include intersegment sales. (b) The
Refining information represents the operating results of Houston
Refining on a 100% basis. (c) As a result of Lyondell's acquisition
of 100% of Houston Refining, Lyondell is providing throughput
margin per barrel information for the refining segment. See Table
13 for calculation of throughput margin and reconciliation to
Refining segment operating income. The throughput margin is divided
by the number of barrels of crude oil processed in the period to
derive the margin per barrel. (d) Market margins are reported by
Platts, a division of The McGraw-Hill Companies. Table 8 -
Reconciliation of Segment Information to Consolidated Lyondell
Financial Information Sales Depreciation and other Operating and
Capital operating income amortiza- expendi- (Millions of dollars)
revenues (loss) tion tures For the three months ended September 30,
2007: Segment Data: Ethylene, Co-Products & Derivatives $3,568
$83 $96 $65 PO & Related Products 2,131 170 59 25 Refining (a)
2,799 209 66 25 Other (b) (1,113) (19) 2 3 Continuing Operations
$7,385 $443 $223 $118 For the three months ended September 30,
2006: Segment Data: Ethylene, Co-Products & Derivatives $3,586
$173 $94 $44 PO & Related Products 1,900 133 57 21 Refining (a)
1,083 81 28 29 Other (b) (754) 1 3 2 Continuing Operations $5,815
$388 $182 $96 For the three months ended June 30, 2007: Segment
Data: Ethylene, Co-Products & Derivatives $3,637 $95 $96 $53 PO
& Related Products 2,169 133 59 19 Refining (a) 2,793 387 64 28
Other (b) (1,117) (16) 7 1 Continuing Operations $7,482 $599 $226
$101 For the nine months ended September 30, 2007: Segment Data:
Ethylene, Co-Products & Derivatives $10,173 $255 $290 $159 PO
& Related Products 6,058 330 177 53 Refining (a) 7,476 674 185
143 Other (b) (3,051) (38) 10 5 Total $20,656 $1,221 $662 $360 For
the nine months ended September 30, 2006: Segment Data: Ethylene,
Co-Products & Derivatives $10,116 $653 $288 $110 PO &
Related Products 5,307 358 172 54 Refining (a) 1,083 81 28 29 Other
(b) (1,558) (1) 7 4 Total $14,948 $1,091 $495 $197 (a) The Refining
segment information reflects the consolidation of Houston Refining
prospectively from August 16, 2006. For periods prior to August 16,
2006, Houston Refining was accounted for as an equity investment.
(b) Includes items not allocated to segments or discontinued
operations and elimination of intersegment transactions between
segments and discontinued operations. Table 9 - Reconciliations
Segment EBITDA to Income from Continuing Operations For the three
For the nine months ended months ended September 30, June 30,
September 30, (Millions of dollars) 2007 2006 2007 2007 2006
LYONDELL Segment EBITDA: Ethylene, Co-Products & Derivatives
$180 $372 $194 $551 $1,048 PO & Related Products 229 195 196
513 540 Refining (a) 275 109 451 859 109 Other 10 5 (15) (7) 80
Add: Income (loss) from equity investment in Houston Refining (a) -
(104) - - 73 Deduct: Depreciation and amortization (223) (182)
(226) (662) (495) Interest expense, net (138) (156) (161) (473)
(432) Charges related to impairment of assets - (106) - - (106)
Provision for income taxes (123) (51) (125) (251) (320) Debt
prepayment premiums and charges (4) (21) (43) (47) (21) Lyondell
income from continuing operations $206 $61 $271 $483 $476 Houston
Refining EBITDA (b) $(54) $333 Deduct: Depreciation and
amortization (44) (106) Interest expense, net (17) (40) Income
taxes 8 - Houston Refining net income (loss) $(107) $187 (a) The
Refining segment information reflects the consolidation of Houston
Refining prospectively from August 16, 2006. For periods prior to
August 16, 2006, Houston Refining was accounted for as an equity
investment. (b) Represents operating results of Houston Refining on
a 100% basis. Table 10 - Lyondell Unaudited Income Statement
Information (a) For the three For the nine months ended months
ended September 30, June 30, September 30, (Millions of dollars,
except per share data) 2007 2006 2007 2007 2006 Sales and other
operating revenues $7,385 $5,815 $7,482 $20,656 $14,948 Cost of
sales (b) 6,736 5,172 6,675 18,853 13,321 Asset impairments (c) -
106 - - 106 Selling, general and administrative expenses 188 132
189 527 376 Research and development expenses 18 17 19 55 54
Operating income 443 388 599 1,221 1,091 Income (loss) from equity
investment in Houston Refining (d) - (104) - - 73 Income from other
equity investments - 2 - 2 4 Interest expense, net (138) (156)
(161) (473) (432) Other income (expense), net (e) 24 (18) (42) (16)
60 Income from continuing operations before income taxes 329 112
396 734 796 Provision for income taxes 123 51 125 251 320 Income
from continuing operations 206 61 271 483 476 Income (loss) from
discontinued operations, net of tax (f) - (4) (95) (82) 31 Net
income $206 $57 $176 $401 $507 Income from continuing operations:
Basic $0.81 $0.24 $1.07 $1.91 $1.92 Diluted $0.78 $0.23 $1.02 $1.83
$1.84 Net income: Basic $0.81 $0.23 $0.69 $1.59 $2.05 Diluted $0.78
$0.22 $0.66 $1.52 $1.96 Weighted average shares (in millions):
Basic 253.3 247.7 252.9 252.4 247.3 Diluted 266.3 260.5 265.7 265.2
260.0 (a) On May 15, 2007, Lyondell completed the sale of its
worldwide inorganic chemicals business. Results of operations
reflect the consolidation of Houston Refining prospectively from
August 16, 2006. For periods prior to August 16, 2006, Houston
Refining was accounted for as an equity investment. (b) Includes
net pretax charges of $5 million, $10 million and $77 million,
respectively, in the three months ended September 30, 2007, the
three months ended June 30, 2007 and the nine months ended
September 30, 2007 related to commercial disputes, including
charges associated with the 2005 shutdown of the Lake Charles TDI
facility. Also includes a benefit for the three and nine months
ended September 30, 2007 of $30 million for Lyondell's pro rata
share of the proceeds from final settlement of all Houston Refining
insurance claims related to Hurricane Rita in 2005. (c) Includes a
$106 million pretax charge for the three and nine months ended
September 30, 2006 for the impairment of the carrying value of the
Lake Charles, Louisiana ethylene facility and related assets. (d)
Includes a charge for the three and nine months ended September 30,
2006 of $176 million, representing Lyondell's pro rata share of a
$300 million charge for the termination of Houston Refining's
previous crude supply agreement with PDVSA and a charge for the
three months ended June 30, 2006 and the nine months ended
September 30, 2006 of $5 million, representing Lyondell's pro rata
share of an $8 million reimbursement to Lyondell of legal fees and
expenses paid by Lyondell on behalf of Houston Refining related to
the settlement. (e) Includes pretax charges related to the
prepayment of debt of $4 million, $43 million and $47 million,
respectively, in the three months ended September 30, 2007 and June
30, 2007 and nine months ended September 30, 2007 and $21 million
in the three and nine months ended September 30, 2006. Also
includes foreign exchange gains of $26 million and $24 million,
respectively, in the three and nine months ended September 30, 2007
and a loss of $1 million in the three months ended June 30, 2007
related to intercompany loans. The nine months ended September 30,
2006 also include a benefit from net payments of $74 million
related to the resolution of commercial disputes. (f) Includes a
$91 million after-tax loss in the three months ended June 30, 2007
and nine months ended September 30, 2007 related to the May 15,
2007 sale of the worldwide inorganic chemicals business. Table 11 -
Lyondell Unaudited Cash Flow Information (a) For the three For the
nine months ended months ended September 30, September 30,
(Millions of dollars) 2007 2006 2007 2006 Net income $206 $57 $401
$507 Loss (income) from discontinued operations, net of tax - 4 82
(31) Adjustments: Depreciation and amortization 223 182 662 495
Asset Impairments - 106 - 106 Equity investments - Amounts included
in net income - 102 (2) (77) Distributions of earnings - (49) 1 73
Deferred income taxes 44 9 184 115 Debt prepayment premiums and
charges 4 21 47 21 Changes in assets and liabilities: Accounts
receivable (139) (9) (489) (210) Inventories 1 (122) (12) (175)
Accounts payable 20 (260) 396 (120) Other, net (117) 83 (424) (123)
Cash provided by operating activities - continuing operations 242
124 846 581 Cash provided by (used in) operating activities -
discontinued operations - 57 (113) 38 Cash provided by operating
activities 242 181 733 619 Expenditures for property, plant and
equipment (118) (96) (360) (197) Payments and distributions from
(to) discontinued operations - 19 (97) (12) Acquisition of Houston
Refining LP and related parties - (2,413) (94) (2,413)
Contributions and advances to affiliates (8) (25) (34) (82)
Distributions from affiliates in excess of earnings - 117 2 117
Other 1 - 12 6 Cash used in investing activities - continuing
operations (125) (2,398) (571) (2,581) Net proceeds from sale of
discontinued operations - - 990 - Cash provided by (used in)
investing activities - discontinued operations - (38) 82 (30) Cash
provided by (used in) investing activities (125) (2,436) 501
(2,611) Repayment of long-term debt (b) (512) (1,652) (1,831)
(2,095) Issuance of long-term debt - 4,356 510 4,356 Dividends paid
(57) (56) (171) (167) Proceeds from and tax benefits of stock
option exercises 4 6 81 18 Other, net (13) - 7 (3) Cash provided by
(used in) financing activities - continuing operations (578) 2,654
(1,404) 2,109 Cash provided by (used in) financing activities -
discontinued operations - (18) 23 (13) Cash provided by (used in)
financing activities (578) 2,636 (1,381) 2,096 Effect of exchange
rate changes on cash 2 - 4 4 Increase (decrease) in cash and cash
equivalents $(459) $381 $(143) $108 (a) On May 15, 2007, Lyondell
completed the sale of its worldwide inorganic chemicals business.
Houston Refining became a wholly owned subsidiary as of August 16,
2006. Prior to August 16, 2006, Lyondell's investment in Houston
Refining was accounted for on an equity basis. (b) Includes
prepayment premiums of $63 million in the nine months ended
September 30, 2007 and $18 million and $27 million, respectively,
in the three and nine months ended September 20, 2006. Table 12 -
Lyondell Unaudited Balance Sheet Information (a) (Millions of
dollars, September 30, December 31, except share data) 2007 2006
Cash and cash equivalents $303 $401 Accounts receivable, net 2,485
1,932 Inventories 1,906 1,877 Prepaid expenses and other current
assets 155 147 Deferred tax assets 50 102 Current assets held for
sale - 687 Total current assets 4,899 5,146 Property, plant and
equipment, net 8,491 8,542 Investments and long-term receivables:
Investment in PO joint ventures 799 778 Other 100 115 Goodwill, net
1,373 1,332 Other assets, net 878 864 Long-term assets held for
sale - 1,069 Total assets $16,540 $17,846 Current maturities of
long-term debt $423 $18 Accounts payable 2,339 1,868 Accrued
liabilities 965 980 Current liabilities associated with assets held
for sale - 341 Total current liabilities 3,727 3,207 Long-term debt
6,226 7,936 Other liabilities 1,258 1,453 Deferred income taxes
1,678 1,537 Long-term liabilities associated with assets held for
sale - 391 Minority interests 121 134 Stockholders' equity
(253,615,364 and 248,970,570 shares outstanding at September 30,
2007 and December 31, 2006, respectively) 3,530 3,188 Total
liabilities and stockholders' equity $16,540 $17,846 (a) On May 15,
2007, Lyondell completed the sale of its worldwide inorganic
chemicals business. Table 13 - Refining Segment Throughput Margin
and Reconciliation to Unaudited Refining Segment Operating Income
For the three For the nine months ended months ended September 30,
June 30, September 30, (Millions of dollars) 2007 2007 2007
Refining Throughput Margin: Sales and other operating revenues (a)
$2,799 $2,793 $7,476 Crude oil and feedstock costs 2,375 2,161
6,113 Throughput margin 424 632 1,363 Operating expenses 209 238
672 Selling, general and administrative expense 6 7 17 Refining
operating income (a) $209 $387 $674 (a) See Table 8 for
reconciliation of Refining segment sales and other operating
revenues and operating income to Lyondell sales and other operating
revenues and operating income. Tables 14 through 19 represent
additional financial information for Equistar Chemicals, LP
(together with its consolidated subsidiaries, "Equistar") and
Millennium Chemicals Inc. (together with its consolidated
subsidiaries, "Millennium") Table 14 - Equistar Unaudited Income
Statement Information (a) For the three For the nine months ended
months ended September 30, June 30, September 30, (Millions of
dollars) 2007 2006 2007 2007 2006 Sales and other operating
revenues (b) $3,464 $3,480 $3,534 $9,867 $9,794 Cost of sales 3,314
3,151 3,362 9,414 8,849 Asset impairment (c) - 135 - - 135 Selling,
general and administrative expenses 71 54 72 202 163 Research and
development expenses 10 8 9 28 25 Operating income 69 132 91 223
622 Interest expense, net (47) (55) (50) (150) (160) Other income
(expense), net (d) - 1 (33) (32) - Net income (e) $22 $78 $8 $41
$462 (a) Represents information for Equistar on the basis reflected
in Equistar's financial statements as filed in its Annual Report on
Form 10-K. (b) Sales and other operating revenues include sales to
affiliates. (c) Includes a $135 million charge in the three and
nine months ended September 30, 2006 for impairment of the carrying
value of the Lake Charles, Louisiana ethylene facility and related
assets. (d) Includes $34 million of charges in the three month
period ended June 30, 2007 and nine month period ended September
30, 2007 related to the prepayment of debt. (e) As a partnership,
Equistar is not subject to federal income taxes. Table 15 -
Equistar Unaudited Balance Sheet Information (a) September 30,
December 31, (Millions of dollars) 2007 2006 Cash and cash
equivalents $25 $133 Accounts receivable, net 1,438 1,167
Inventories 679 809 Prepaid expenses and other current assets 38 49
Total current assets 2,180 2,158 Property, plant and equipment, net
2,814 2,846 Investments 51 59 Other assets, net 273 296 Total
assets $5,318 $5,359 Current maturities of long-term debt $400 $-
Accounts payable 1,080 905 Accrued liabilities 252 312 Notes
payable - Millennium (b) 515 - Total current liabilities 2,247
1,217 Long-term debt 1,153 2,160 Other liabilities and deferred
revenues 371 378 Partners' capital 1,547 1,604 Total liabilities
and partners' capital $5,318 $5,359 (a) Represents information for
Equistar on the basis reflected in Equistar's financial statements
as filed in its Annual Report on Form 10-K. (b) During the first
nine months of 2007, Equistar issued promissory notes to Millennium
and received proceeds of $515 million, which were primarily used to
repay debt. Table 16 - Equistar Unaudited Cash Flow Information (a)
For the three For the nine months ended months ended September 30,
September 30, (Millions of dollars) 2007 2006 2007 2006 Net income
$22 $78 $41 $462 Adjustments: Depreciation and amortization 81 79
243 243 Asset Impairment - 135 - 135 Debt prepayment charges and
premiums - - 34 - Changes in assets and liabilities: Accounts
receivable (111) (109) (271) (341) Inventories 25 (82) 130 (138)
Accounts payable 45 (62) 175 142 Other, net - (16) (99) (53) Cash
provided by operating activities 62 23 253 450 Expenditures for
property, plant and equipment (62) (42) (152) (105) Other - - 8 2
Cash used in investing activities (62) (42) (144) (103) Repayment
of long-term debt (b) - - (632) (150) Proceeds from notes payable
to Millennium (c) 15 - 515 - Distributions to owners - (75) (100)
(375) Other - - - 1 Cash provided by (used in) financing activities
15 (75) (217) (524) Increase (decrease) in cash and cash
equivalents $15 $(94) $(108) $(177) (a) Represents information for
Equistar on the basis reflected in Equistar's financial statements
as filed in its Annual Report on Form 10-K. (b) Includes prepayment
premiums of $32 million in the nine months ended September 30, 2007
related to the prepayment of debt. (c) During the nine months ended
September 30, 2007, Equistar issued promissory notes to Millennium
and received proceeds of $515 million, which were primarily used to
repay debt. Table 17 - Millennium Unaudited Income Statement
Information (a) (b) For the three For the nine months ended months
ended September 30, June 30, September 30, (Millions of dollars)
2007 2006 2007 2007 2006 Sales and other operating revenues (c)
$162 $157 $161 $475 $454 Cost of sales 136 138 142 400 418 Selling,
general and administrative expenses 15 10 22 49 32 Research and
development expenses 1 - 1 3 2 Operating income (loss) 10 9 (4) 23
2 Interest income (expense), net 5 (16) (13) (26) (45) Other income
(expense), net (d) 1 - (16) (15) (5) Income (loss) from continuing
operations before equity investment and income taxes 16 (7) (33)
(18) (48) Income from equity investment in Equistar 6 23 3 12 136
Income (loss) from continuing operations before income taxes 22 16
(30) (6) 88 Provision for (benefit from) income taxes 13 6 (13) 1 1
Income (loss) from continuing operations 9 10 (17) (7) 87 Income
from discontinued operations, net of tax (e) - 7 283 297 77 Net
income $9 $17 $266 $290 $164 (a) Represents information for
Millennium on the basis reflected in Millennium's financial
statements as filed in its Current Report on Form 8-K dated May 29,
2007. (b) On May 15, 2007, Millennium completed the sale of its
worldwide inorganic chemicals business. (c) Sales and other
operating revenues include sales to affiliates. (d) Other income
(expense), net, included charges related to debt prepayment of $14
million in the three months ended June 30, 2007 and the nine months
ended September 30, 2007 and $7 million in the nine months ended
September 30, 2006. (e) Income from discontinued operations, net of
tax, for the three months ended June 30, 2007 and nine months ended
September 30, 2007 included a $289 million after-tax gain related
to the sale of Millennium's worldwide inorganic chemicals business.
Table 18 - Millennium Unaudited Balance Sheet Information (a) (b)
September 30, December 31, (Millions of dollars) 2007 2006 Cash and
cash equivalents $29 $76 Accounts receivable, net 114 111
Inventories 88 87 Prepaid expenses and other current assets 27 13
Deferred tax assets 53 62 Notes receivable - Equistar (c) 515 -
Current assets held for sale - 661 Total current assets 826 1,010
Property, plant and equipment, net 123 129 Investments in Equistar
453 470 Goodwill, net 49 49 Other assets, net 74 62 Long-term
assets held for sale - 694 Total assets $1,525 $2,414 Accounts
payable $93 $102 Accrued liabilities 179 72 Current liabilities
associated with assets held for sale - 335 Total current
liabilities 272 509 Long-term debt 391 767 Other liabilities 242
381 Deferred income taxes 266 248 Long-term liabilities associated
with assets held for sale - 361 Minority interest 5 5 Stockholder's
equity (1,000 shares authorized; 661 shares issued at September 30,
2007 and December 31, 2006) 349 143 Total liabilities and
stockholder's equity $1,525 $2,414 (a) Represents information for
Millennium on the basis reflected in Millennium's financial
statements as filed in its Current Report on Form 8-K dated May 29,
2007. (b) On May 15, 2007, Millennium completed the sale of its
worldwide inorganic chemicals business. (c) During the first nine
months of 2007, Millennium received promissory notes from and
advanced $515 million to Equistar. Table 19 - Millennium Unaudited
Cash Flow Information (a) (b) For the three For the nine months
months ended ended September 30, September 30, (Millions of
dollars) 2007 2006 2007 2006 Net income $9 $17 $290 $164 Income
from discontinued operations - (7) (297) (77) Adjustments:
Depreciation and amortization 6 6 23 19 Equity investment in
Equistar - Amounts included in net income (6) (23) (12) (136)
Distributions of earnings 6 22 12 111 Debt prepayment charges and
premiums - - 14 7 Deferred income taxes (15) 9 23 (39) Changes in
assets and liabilities: Accounts receivable 14 (13) (3) (1)
Inventories 4 4 (1) 24 Accounts payable (9) (47) (10) (36) Other,
net 14 66 (115) 101 Cash provided by (used in) operating activities
- continuing operations 23 34 (76) 137 Cash provided by (used in)
operating activities - discontinued operations - 58 (120) 38 Cash
provided by (used in) operating activities 23 92 (196) 175
Expenditures for property, plant and equipment (6) (4) (12) (9)
Payments and distributions from (to) discontinued operations - 20
(104) (12) Distributions from Equistar in excess of earnings (6) -
18 - Advances under loan agreements to Equistar (c) (15) - (515) -
Other - - 3 1 Cash provided by (used in) investing activities -
continuing operations (27) 16 (610) (20) Net proceeds from sale of
discontinued operations - - 990 - Cash provided by (used in)
investing activities - discontinued operations - (39) 89 (30) Cash
provided by (used in) investing activities (27) (23) 469 (50)
Repayment of long-term debt (d) - - (390) (241) Other - (1) 1 (2)
Cash used in financing activities - continuing operations - (1)
(389) (243) Cash provided by (used in) financing activities -
discontinued operations - (18) 23 (13) Cash used in financing
activities - (19) (366) (256) Effect of exchange rate changes on
cash - - 1 2 Increase (decrease) in cash and cash equivalents $(4)
$50 $(92) $(129) (a) Represents information for Millennium on the
basis reflected in Millennium's financial statements as filed in
its Current Report on Form 8-K dated May 29, 2007. (b) On May 15,
2007, Millennium completed the sale of its worldwide inorganic
chemicals business. (c) During the first nine months of 2007,
Millennium received promissory notes from and advanced $515 million
to Equistar. (d) Includes prepayment premiums of $13 million and $7
million, respectively, in the nine months ended September 30, 2007
and 2006 related to the prepayment of debt. DATASOURCE: Lyondell
Chemical Company; Equistar Chemicals, LP; Millennium CONTACT:
Media, Susan Moore, +1-713-309-4645, or Investors, Doug Pike,
+1-713-309-4590, both of Lyondell Chemical Company Web site:
http://www.lyondell.com/
Copyright
Lyondell (NYSE:LYO)
Gráfica de Acción Histórica
De Ago 2024 a Sep 2024
Lyondell (NYSE:LYO)
Gráfica de Acción Histórica
De Sep 2023 a Sep 2024