EXHIBIT 99.1
[CITGO LOGO]
NEWS RELEASE
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CITGO PETROLEUM CORPORATION, P.O. BOX 3758, TULSA, OK 74102
KATE ROBBINS 918/495-5764 JENNIFER HILL 918/495-4260
FACSIMILE 918/495-5269
FOR IMMEDIATE RELEASE:
CITGO Announces 2004 Second Quarter and Six Months Results
TULSA, Okla., August 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 $25 billion. CITGO's ultimate parent is Petroleos de
Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of
Venezuela and its largest supplier of crude oil. CITGO operates fuels refineries
in Lake Charles, La., Corpus Christi, Texas, and Lemont, Ill., and asphalt
refineries in Paulsboro, NJ and Savannah, Ga. The company has long-term crude
oil supply agreements with PDVSA for a portion of the crude oil requirements at
these facilities. CITGO is also a 41-percent participant in LYONDELL-CITGO
Refining LP, a joint venture fuels refinery located in Houston, Texas. CITGO's
interests in these refineries result in a total crude oil capacity of
approximately 865,000 barrels per day. Serving nearly 14,000 branded,
independently owned and operated retail locations, CITGO is also one of the five
largest branded gasoline suppliers within the United States.
FORWARD LOOKING STATEMENTS
Except for the historical information contained in this release,
certain of the matters discussed in this release may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such
as "anticipate," "estimate," "expect," "project," "believe" and similar
expressions generally identify a forward-looking statement. The factors that
could cause actual results to differ materially from the forward-looking
statements include general economic activity, developments in international and
domestic petroleum markets, refinery turnarounds and operations as well as the
other factors identified in our filings with the U.S. Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which apply only as of the date of this release. We
disclaim any duty to update any forward-looking statements.
[NET INCOME BAR GRAPH]
NET INCOME
1Q 2Q
US$ IN MILLIONS
2003 Net Income (excluding
insurance recoveries) 64 92
2003 Insurance Recoveries (net of tax) 76 17
2004 Net Income 35 172
[OPERATING INCOME BAR GRAPH]
OPERATING INCOME
(INCOME BEFORE INTEREST AND INCOME TAXES)
1Q 2Q
US$ IN MILLIONS
2003 Operating Income (excluding
insurance recoveries) 125 177
2003 Insurance Recoveries
(before tax) 118 27
2004 Operating Income 86 308
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)
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 JUNE 30, 2004 THREE MONTHS ENDED JUNE 30, 2003
----------------------------------- -------------------------------------
LAKE CORPUS LAKE CORPUS
CHARLES CHRISTI LEMONT TOTAL CHARLES CHRISTI LEMONT TOTAL
------- ------- ------ ----- ------- ------- ------ -----
FEEDSTOCKS:
Crude oil throughput
Sweet (1) 113 10 -- 123 93 2 5 100
Light/Medium sour (2) 18 2 82 102 33 10 83 126
Heavy sour (3) 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 JUNE 30, 2004 SIX MONTHS ENDED JUNE 30, 2003
------------------------------------ ------------------------------------
LAKE CORPUS LAKE CORPUS
CHARLES CHRISTI LEMONT TOTAL CHARLES CHRISTI LEMONT TOTAL
------- ------- ------ ----- ------- ------- ------ -----
FEEDSTOCKS:
Crude oil throughput
Sweet (1) 102 4 -- 106 86 5 6 97
Light/Medium sour (2) 17 3 80 100 51 10 76 137
Heavy sour (3) 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
==== ==== ==== ==== ==== ==== ==== ====
(1) Sweet crude has a sulfur content of .5% or less.
(2) 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.
(3) Heavy sour crude has an average API gravity of 25 degrees or less.