EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
CITGO Announces 2004 Third Quarter and Nine Months Results
HOUSTON, Nov. 2, 2004 -- Luis Marin, CITGO Petroleum Corporation's President and
CEO, today announced third quarter net income of $205 million, almost double the
2003 third quarter net income of $103 million. For the nine months ended Sept.
30, net income was $430 million, up 22 percent from the same time period in
2003.
According to Marin, several factors contributed to CITGO's outstanding
results for this quarter:
o Demonstrated by continuing excellence in our safety performance and
environmental stewardship, CITGO employees remain committed to safe
and environmentally friendly operations in all areas of the business.
o With CITGO's refineries configured to process heavy crudes, the
company took full advantage of the opportunity presented by the record
low market price of heavy crude relative to light crude during the
third quarter. The average utilization rate of CITGO's three fuels
refineries averaged 97 percent for the quarter.
o As the price of heating oil relative to WTI crude exceeded the price
of gasoline relative to WTI crude, distillate production in the third
quarter increased by 18 percent over the same quarter last year.
o Asphalt sales volumes remained strong, up 27 percent from third
quarter 2003 levels. For the first nine months of this year, asphalt
sales volume increased 43 percent over the same time frame in 2003.
o Sales volumes for petrochemicals and industrial products increased 19
percent for the third quarter and 16 percent for the first nine months
of 2004 relative to the same time periods in 2003.
o Lubricants and waxes sales volumes increased for both the third
quarter and the first nine months of the year when compared with the
same time periods in 2003.
In addition to these factors, other significant events include:
o On Oct. 22, 2004, CITGO issued $250 million of 6 percent unsecured
senior notes due Oct. 15, 2011. With these proceeds and available cash
on hand, CITGO repurchased
approximately $540 million principal amount of its 11 -3/8 percent
senior notes due 2011.
o Both Moody's Investors Service and Fitch Ratings upgraded CITGO's
senior unsecured debt ratings to Ba2 and BB, respectively.
o During one of the most active hurricane seasons in history, CITGO, a
major supplier of transportation fuel to the state of Florida, was
recognized by Gov. Jeb Bush for the company's outstanding efforts in
maintaining supply.
o The crude vacuum expansion project at the Lake Charles, La. refinery
is proceeding ahead of schedule with anticipated start-up in the first
quarter of 2005.
o CITGO completed negotiations with the U.S. Environmental Protection
Agency (EPA) with regard to the New Source Review regulations under
the Clean Air Act and has agreed to implement environmental
improvement projects over the next four years with a capital cost of
approximately $320 million.
"CITGO's operational performance in the third quarter as well as the first
nine months of the year has been excellent," stated Marin. "As a result, our
profitability and available cash has improved significantly, allowing us to
repay debt and improve our credit ratings. With these results we expect that
investor confidence in CITGO will continue to grow."
EARNINGS CONFERENCE CALL
CITGO's executive team will conduct a conference call on Wednesday,
Nov. 3, 2004, at 1 p.m. (CST) to discuss third quarter 2004 earnings. Interested
parties inside the U.S. may access the call by dialing 800-288-8967. Interested
parties outside the U.S. may access the call by dialing 800-553-0273. A recorded
playback of the conference call will be available beginning on Nov. 3 at 4:30
p.m. (CST) and ending on Nov. 17 at 11:59 p.m. (CST). To access the recording
inside the U.S. dial 800-475-6701, access code: 753718. To access the recording
outside the U.S. dial 320-365-3844, access code: 753718.
ABOUT CITGO
CITGO Petroleum Corporation is a leading refining and marketing company
based in Houston, 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, N.J. 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. 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.
CITGO PETROLEUM CORPORATION AND SUBSIDIARIES
STATEMENT OF INCOME DATA (UNAUDITED)
(DOLLARS IN MILLIONS)
<Table>
<Caption>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
----------------------------- -----------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Net sales $ 8,879.3 $ 6,502.3 $ 23,599.7 $ 18,899.1
Cost of sales and operating expenses 8,532.0 6,267.0 22,792.6 18,284.0
------------- ------------- ------------- -------------
Gross margin 347.3 235.3 807.1 615.1
Equity in earnings of LCR 58.3 25.9 133.9 56.6
Equity in earnings of affiliates 12.7 9.5 32.3 23.4
Insurance recoveries -- 1.9 -- 146.2
Other income (expense) - net 1.5 1.2 2.1 16.9
------------- ------------- ------------- -------------
Subtotal 419.8 273.8 975.4 858.2
Selling, general and administrative 78.2 80.8 218.8 218.2
------------- ------------- ------------- -------------
Operating income 341.6 193.0 756.6 640.0
Interest expense 29.4 32.3 101.2 90.9
------------- ------------- ------------- -------------
Income before income taxes 312.2 160.7 655.4 549.1
Income taxes 107.2 57.8 225.1 197.7
------------- ------------- ------------- -------------
Net Income $ 205.0 $ 102.9 $ 430.3 $ 351.4
============= ============= ============= =============
</Table>
CITGO PETROLEUM CORPORATION AND SUBSIDIARIES
SUMMARIZED BALANCE SHEET DATA
(DOLLARS IN MILLIONS)
<Table>
<Caption>
SEPTEMBER 30, DECEMBER 31,
2004 2003
(UNAUDITED)
------------- -------------
Current assets $ 3,069.8 $ 2,379.3
Total assets 7,970.6 7,273.5
Current liabilities 2,115.1 1,716.0
Total debt 1,340.3 1,501.8
Total liabilities 5,037.4 4,772.0
Shareholder's equity 2,933.2 2,501.5
Total capitalization 4,273.5 4,003.3
</Table>
CITGO PETROLEUM CORPORATION AND SUBSIDIARIES
SUMMARIZED CASH FLOW DATA (UNAUDITED)
(DOLLARS IN MILLIONS)
<Table>
<Caption>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------------ ------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Net Income $ 205.0 $ 102.9 $ 430.3 $ 351.4
Depreciation and amortization 90.4 82.6 270.2 245.4
Other adjustments to reconcile net income to
net cash provided by operating activities 29.6 16.5 88.9 180.2
Changes in operating assets and liabilities (177.3) 317.7 (92.4) 69.4
------------- ------------- ------------- -------------
Net cash provided by operating activities 147.7 519.7 697.0 846.4
------------- ------------- ------------- -------------
Capital expenditures (87.6) (106.4) (226.5) (315.1)
Other investing activities, net (6.9) (0.9) (16.0) (16.9)
------------- ------------- ------------- -------------
Net cash used in investing activities (94.5) (107.3) (242.5) (332.0)
------------- ------------- ------------- -------------
Net cash provided by (used in) financing activities 24.7 (527.6) (186.5) (416.3)
------------- ------------- ------------- -------------
Increase (decrease) in cash and cash equivalents $ 77.9 $ (115.2) $ 268.0 $ 98.1
============= ============= ============= =============
</Table>
MARKET INDICATORS (DOLLARS PER BARREL, EXCEPT AS OTHERWISE INDICATED)
<Table>
<Caption>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
----------------------------- -----------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
West Texas Intermediate, "WTI" (sweet) $ 43.88 $ 30.19 $ 39.16 $ 31.07
Crack Spreads:
Gulf Coast 3/2/1 6.16 5.21 7.12 4.75
Chicago 3/2/1 7.30 7.91 8.39 6.89
Crude Oil Differentials:
WTI less WTS (sour) 3.87 2.63 3.43 2.85
WTI less Maya (heavy sour) 11.76 5.78 9.97 6.81
WTI less Bow River (Canadian) 12.13 8.09 10.78 7.54
Natural Gas (per mmbtu) 5.58 4.90 5.82 5.52
</Table>
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)
<Table>
<Caption>
THREE MONTHS ENDED SEPTEMBER 30, 2004 THREE MONTHS ENDED SEPTEMBER 30, 2003
---------------------------------------- ----------------------------------------
LAKE CORPUS LAKE CORPUS
CHARLES CHRISTI LEMONT TOTAL CHARLES CHRISTI LEMONT TOTAL
------- ------- ------- ------- ------- ------- ------- -------
FEEDSTOCKS:
Crude oil throughput
Sweet (1) 119 -- -- 119 83 5 1 89
Light/Medium sour (2) 35 17 80 132 39 16 65 120
Heavy sour (3) 41 9 79 129 69 7 97 173
Contract (heavy sour) 119 128 -- 247 122 129 -- 251
------- ------- ------- ------- ------- ------- ------- -------
Total crude oil 314 154 159 627 313 157 163 633
Unfinished feedstocks 49 61 23 133 66 60 13 139
------- ------- ------- ------- ------- ------- ------- -------
Total feedstocks 363 215 182 760 379 217 176 772
======= ======= ======= ======= ======= ======= ======= =======
Rated crude capacity at period end 320 157 167 644 320 157 167 644
Utilization of rated crude capacity 98% 98% 95% 97% 98% 100% 98% 98%
PRODUCTION:
Light fuels
Gasoline 183 82 93 358 182 95 89 366
Jet fuel 66 -- -- 66 70 -- -- 70
Diesel / #2 fuel 45 65 44 154 23 62 46 131
------- ------- ------- ------- ------- ------- ------- -------
Total light fuels 294 147 137 578 275 157 135 567
Petrochemicals and industrial products 76 66 44 186 113 59 42 214
------- ------- ------- ------- ------- ------- ------- -------
Total production 370 213 181 764 388 216 177 781
======= ======= ======= ======= ======= ======= ======= =======
</Table>
<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30, 2004 NINE MONTHS ENDED SEPTEMBER 30, 2003
---------------------------------------- ----------------------------------------
LAKE CORPUS LAKE CORPUS
CHARLES CHRISTI LEMONT TOTAL CHARLES CHRISTI LEMONT TOTAL
------- ------- ------- ------- ------- ------- ------- -------
FEEDSTOCKS:
Crude oil throughput
Sweet (1) 108 2 -- 110 85 5 5 95
Light/Medium sour (2) 23 7 80 110 47 12 65 124
Heavy sour (3) 31 14 79 124 53 15 91 159
Contract (heavy sour) 149 107 -- 256 127 122 -- 249
------- ------- ------- ------- ------- ------- ------- -------
Total crude oil 311 130 159 600 312 154 161 627
Unfinished feedstocks 36 73 20 129 58 63 14 135
------- ------- ------- ------- ------- ------- ------- -------
Total feedstocks 347 203 179 729 370 217 175 762
======= ======= ======= ======= ======= ======= ======= =======
Rated crude capacity at period end 320 157 167 644 320 157 167 644
Utilization of rated crude capacity 97% 83% 95% 93% 98% 98% 96% 97%
PRODUCTION:
Light fuels
Gasoline 178 81 93 352 183 94 91 368
Jet fuel 63 -- -- 63 66 -- -- 66
Diesel / #2 fuel 51 55 41 147 44 59 43 146
------- ------- ------- ------- ------- ------- ------- -------
Total light fuels 292 136 134 562 293 153 134 580
Petrochemicals and industrial products 64 66 45 175 89 63 41 193
------- ------- ------- ------- ------- ------- ------- -------
Total production 356 202 179 737 382 216 175 773
======= ======= ======= ======= ======= ======= ======= =======
</Table>
(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.