OLD GREENWICH, Conn., Jan. 21 /PRNewswire-FirstCall/ --
Premcor Inc. (NYSE: PCO) today reported net earnings of $34.7 million, or
$.60 per share, in the fourth quarter of 2002 and a net loss of
$129.6 million, or $2.65 per share, for the full year ended December 31, 2002.
These results compare to a net loss of $44.5 million, or $1.40 per share, in
the fourth quarter of 2001 and net earnings of $142.6 million, or $4.13 per
share, for the full year ended December 31, 2001.
Excluding the effect of special items, the fourth quarter 2002 net
earnings of $34.7 million, or $.60 per share, compares to a net loss of
$35.0 million, equal to $1.10 per share for the fourth quarter of 2001.
Excluding the effect of special items for the full year results, the net loss
for the year ended December 31, 2002 was $10.5 million, or $.22 per share,
compared to net earnings of $237.5 million, or $6.88 per share, for the year
ended December 31, 2001. Special items are discussed below.
The company's customary quarterly conference call concerning the quarter's
results will not be held due to its pending equity offering.
Thomas D. O'Malley, Premcor's Chairman and Chief Executive Officer, said,
"During the fourth quarter, the company succeeded in producing good results
despite reduced throughputs due to hurricanes Isidore and Lili as well as
scheduled turnaround maintenance. Premcor's turnaround activity in 2003 will
be minimal, including that associated with the Memphis refinery, which we
expect to acquire during the first quarter of 2003."
O'Malley continued, "The fourth quarter represents the first quarter of
operations where a significant portion of our restructuring cost savings are
reflected, and where the expenses associated with the operation of the
Hartford refinery have for the most part been eliminated. Also during the
quarter, the company completed the formation of its management team when
Michael D. Gayda joined as general counsel."
For the fourth quarter of 2001, special items included an after-tax charge
of $9.5 million, equal to $.30 per share, related to reserves established in
connection with previously discontinued retail operations. There were no
special items in the fourth quarter of 2002.
For the twelve months of 2002, pre-tax special items of $192.4 million
included restructuring charges totaling $172.9 million and a $19.5 million
charge related to the early retirement of long-term debt. Restructuring
charges included $137.4 million related to the closure of the Hartford
refinery, $27.4 million primarily for severance and other charges related to
the restructuring of the company's Port
Arthur, Texas and Lima, Ohio refineries and the St. Louis general and
administrative operations, $2.5 million related to the PRG and Sabine
restructuring, $1.4 million for idled equipment, and $4.2 million related to
the write-off of the Clark Retail Enterprises minority interest. The after-tax
effect of these special items for the twelve months of 2002 was $119.1
million, or $2.43 per share. Pre-tax special items for the twelve months of
2001 included restructuring charges of $176.2 million related to the closure
of the Blue Island, Illinois refinery and the decommissioning of two coker
units at Port Arthur, and an $8.7 million gain associated with debt
repurchases. The after-tax effect of these items, along with an $18 million
after-tax charge relating to discontinued operations, partially offset by a
$30 million income tax benefit, was $94.9 million, or $2.75 per share.
Premcor Inc. is one of the largest independent petroleum refiners and
marketers of unbranded transportation fuels and heating oil in the United
States.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including the
company's current expectations with respect to future market conditions,
future operating results, the future performance of its refinery operations,
and future debt reductions. Words such as "expects," "intends," "plans,"
"projects," "believes," "estimates," "may," "will," "should," "shall," and
similar expressions typically identify such forward-looking statements. Even
though Premcor believes the expectations reflected in such forward-looking
statements are based on reasonable assumptions, it can give no assurance that
its expectations will be attained. Factors that could cause actual results to
differ materially from expectations include, but are not limited to,
operational difficulties, varying market conditions, potential changes in
gasoline, crude oil, distillate, and other commodity prices, government
regulations, and other factors contained from time to time in the reports
filed with the Securities and Exchange Commission by the company and its
subsidiaries, Premcor USA Inc. and The Premcor Refining Group Inc., including
the company's Form S-1 and the company's and its subsidiaries' quarterly
reports on Form 10-Q, reports on Form 8-K, and annual reports on Form 10-K.
Premcor Inc. and Subsidiaries
Earnings Release
Three months ended Twelve months ended
(dollars in millions December 31, December 31,
except per share amounts, unaudited) 2002 2001 2002 2001
Operating revenues $1,965.7 $1,246.6 $6,772.8 $6,417.5
Cost of sales 1,759.0 1,117.7 6,101.8 5,251.4
Gross margin 206.7 128.9 671.0 1,166.1
Operating expenses 94.0 111.9 432.2 467.7
General and administrative expenses 11.0 18.0 51.8 63.3
Stock option compensation expense 4.1 -- 14.0 --
Depreciation and amortization 24.0 24.2 88.9 91.9
Restructuring and other charges -- -- 172.9 176.2
Operating income (loss) 73.6 (25.2) (88.8) 367.0
Interest expense and
finance income, net (20.3) (33.2) (101.8) (139.5)
Gain (loss) on extinguishment
of long-term debt -- -- (19.5) 8.7
Income tax benefit (provision) (18.6) 26.3 81.3 (52.4)
Minority interest -- (0.4) 1.7 (12.8)
Income (loss) from
continuing operations 34.7 (32.5) (127.1) 171.0
Discontinued operations,
net of tax benefit -- (9.5) -- (18.0)
Preferred stock dividends -- (2.5) (2.5) (10.4)
Net income (loss) available to
common stockholders $34.7 $(44.5) $(129.6) $142.6
Net income (loss) per common share
(fully-diluted):
Income (loss) from continuing
operations $0.60 $(1.10) $(2.65) $4.65
Discontinued operations -- (0.30) -- (0.52)
Net income (loss) $0.60 $(1.40) $(2.65) $4.13
Weighted average common shares
outstanding (in millions) 58.1 31.8 49.0 34.5
December 31, December 31,
Summarized Balance Sheet Information 2002 2001
Cash and short-term investments:
Premcor Inc. $40.7 $2.1
Premcor USA Inc. 10.2 25.5
The Premcor Refining Group Inc. 121.4 484.2
Consolidated cash and
short-term investments 172.3 511.8
Cash restricted for debt service 61.7 30.8
Other working capital 55.6 (60.0)
Total assets 2,323.0 2,509.8
Long-term debt and
exchangeable preferred stock:
Premcor USA Inc. 40.1 239.2
The Premcor Refining Group Inc. 838.5 1,247.0
Consolidated long-term debt 878.6 1,486.2
Total common stockholders' equity 704.0 294.7
Premcor Inc. and Subsidiaries
Earnings Release
Three months Twelve months
ended ended
December 31, December 31,
(unaudited) 2002 2001 2002 2001
Selected Volumetric and Per Barrel Data
Production (Mbbls per day) 388.1 473.4 438.2 463.4
Crude oil throughput (Mbbls per day) 354.9 443.3 412.8 439.7
Per barrel of throughput:
Gross margin $6.33 $3.16 $4.45 $7.27
Operating expenses 2.88 2.74 2.87 2.91
Market Indicators (dollars per barrel)
West Texas Intermediate,
or "WTI" (sweet) $28.30 $20.32 $26.13 $25.96
Crack Spreads:*
Gulf Coast 3/2/1 3.72 1.94 3.13 4.22
Gulf Coast 2/1/1 3.61 2.08 2.72 3.92
Chicago 3/2/1 6.24 4.49 5.00 7.90
Crude Oil Differentials:
WTI less WTS (sour) 1.72 1.91 1.38 2.81
WTI less Maya (heavy sour) 6.14 6.33 5.21 8.76
WTI less Dated Brent (foreign) 1.46 0.87 1.12 1.48
Natural Gas (per mmbtu) 3.92 2.17 3.17 4.22
* Per barrel margin indicator for the conversion of crude oil into
finished products. The first number represents the number of barrels of
West Texas Intermediate crude oil, priced at Cushing, Oklahoma. The
second and third numbers represent the number of barrels of conventional
gasoline and high sulfur diesel fuel produced, priced in their
respective regional market.
Premcor Inc. and Subsidiaries
Earnings Release
Three months ended Three months ended
December 31, 2002 December 31, 2001
Port Hart- Port Sub- Hart-
Arthur Lima ford* Total Arthur total Lima ford
Selected Refinery
Data (unaudited)
Operating results
(dollars in millions):
Gross margin:
Gulf Coast 3/2/1 $72.6 $49.0 $-- $121.6 $43.5 $23.8 $11.9 $79.2
Chicago 3/2/1 vs.
Gulf Coast 3/2/1 -- 33.1 -- 33.1 -- 31.2 15.6 46.8
Crude oil
differentials
to benchmark 104.8 (7.2) -- 97.6 76.5 (32.9) 10.1 53.7
Product
differentials
to benchmark (46.3) 0.7 -- (45.6) (35.2) (4.3) (11.3) (50.8)
Realized gross
margin 131.1 75.6 -- 206.7 84.8 17.8 26.3 128.9
Operating
expenses 63.5 30.5 -- 94.0 63.8 29.7 18.4 111.9
Net refining
margin 67.6 45.1 -- 112.7 21.0 (11.9) 7.9 17.0
Depreciation and
amortization 15.5 6.2 -- 21.7 12.3 6.7 3.9 22.9
Per barrel of
throughput
(in dollars):
Gross margin:
Gulf Coast 3/2/1 $3.72 $3.72 $-- $3.72 $1.94 $1.94 $1.94 $1.94
Chicago 3/2/1 vs.
Gulf Coast 3/2/1 -- 2.52 -- 1.01 -- 2.55 2.55 1.15
Crude oil
differentials
to benchmark 5.37 (0.54) -- 3.00 3.41 (2.68) 1.65 1.32
Product
differentials
to benchmark (2.37) 0.05 -- (1.40) (1.56) (0.35) (1.84) (1.25)
Realized
gross margin 6.72 5.75 -- 6.33 3.79 1.46 4.30 3.16
Operating
expenses 3.25 2.32 -- 2.88 2.85 2.42 3.00 2.74
Net refining
margin 3.47 3.43 -- 3.45 0.94 (0.96) 1.30 0.42
Depreciation and
amortization 0.80 0.47 -- 0.66 0.55 0.55 0.64 0.56
Calculation methodology:
Although the Company manages its refinery business, including feedstock
acquisition and product marketing, on an integrated basis, for
analytical purposes, the business results shown here have been allocated
to the individual refineries. The foundation for determining realized
gross margin by refinery is a daily valuation of actual refinery
feedstocks at market and a daily valuation of actual refinery production
at market. The result of this calculation is a standard refinery gross
margin. Since it is not possible to ratably deliver daily priced
feedstocks to our refineries and since it is not possible to realize the
value of refinery production on the day it is produced, the actual
refinery gross margin differs from the standard. These differences
arise from the fact that crude oil is often purchased and priced well in
advance of the time that it is consumed and the value of refinery
production can be fixed before or after it is produced and is further
determined by the channel of trade through which it is marketed.
Inventory fluctuations and hedging activities with their attendant
product grade, location and time basis risks lead to further deviations
from the standard daily feedstock and product valuations. These
variations from the standard are allocated to each refinery on a
reasonable basis, usually driven by volume of crude input. As a result
of these allocations, the individual refinery realized gross margins
presented here do not reflect the results that would be reported if
separately accounted for in accordance with generally accepted
accounting principles.
* Closed September 2002
Premcor Inc. and Subsidiaries
Earnings Release
Three months ended Three months ended
December 31, 2002 December 31, 2001
Port Hart- Port Sub- Hart-
Arthur Lima ford* Total Arthur total Lima ford
Selected Volumetric Data
(in thousands of
barrels per day, unaudited)
Feedstocks:
Crude oil
throughput:
Sweet -- 138.6 -- 138.6 -- 131.1 2.6 133.7
Light/Medium
sour 18.9 4.4 -- 23.3 46.9 2.1 54.0 103.0
Heavy sour 193.0 -- -- 193.0 196.6 -- 10.0 206.6
Total crude
oil 211.9 143.0 -- 354.9 243.5 133.2 66.6 443.3
Unfinished and
blendstocks 17.7 (1.4) -- 16.3 12.4 1.9 5.5 19.8
Total
feedstocks 229.6 141.6 -- 371.2 255.9 135.1 72.1 463.1
Production:
Light products:
Conventional
gasoline 79.1 74.0 -- 153.1 85.8 71.8 33.7 191.3
Premium and
reformulated
gasoline 27.4 11.7 -- 39.1 23.7 9.5 5.5 38.7
Diesel fuel 67.5 23.9 -- 91.4 85.5 23.4 22.1 131.0
Jet fuel 23.1 22.4 -- 45.5 23.0 21.1 -- 44.1
Petrochemical
products 16.4 7.5 -- 23.9 16.2 7.1 3.0 26.3
Total light
products 213.5 139.5 -- 353.0 234.2 132.9 64.3 431.4
Petroleum coke
and sulfur 25.4 2.8 -- 28.2 25.9 2.5 3.1 31.5
Residual oil 5.3 1.6 -- 6.9 5.8 1.7 3.0 10.5
Total
production 244.2 143.9 -- 388.1 265.9 137.1 70.4 473.4
* Closed September 2002
Premcor Inc. and Subsidiaries
Earnings Release
Twelve months ended December 31, 2002
Port
Selected Refinery Data (unaudited) Arthur Lima Hartford* Total
Operating results (dollars in millions):
Gross margin:
Gulf Coast 3/2/1 $257.1 $161.9 $53.4 $472.4
Chicago 3/2/1 vs. Gulf Coast 3/2/1 -- 96.6 31.8 128.4
Crude oil differentials
to benchmark 354.4 (38.0) 35.4 351.8
Product differentials to benchmark (192.4) (25.2) (64.0) (281.6)
Realized gross margin 419.1 195.3 56.6 671.0
Operating expenses 261.7 114.0 56.5 432.2
Net refining margin 157.4 81.3 0.1 238.8
Depreciation and amortization 54.9 23.7 2.9 81.5
Per barrel of throughput (in dollars):
Gross margin:
Gulf Coast 3/2/1 $3.13 $3.13 $3.13 $3.13
Chicago 3/2/1 vs. Gulf Coast 3/2/1 -- 1.87 1.87 0.85
Crude oil differentials to benchmark 4.32 (0.74) 2.08 2.33
Product differentials to benchmark (2.34) (0.48) (3.76) (1.86)
Realized gross margin 5.11 3.78 3.32 4.45
Operating expenses 3.19 2.21 3.32 2.87
Net refining margin 1.92 1.57 (0.00) 1.58
Depreciation and amortization 0.67 0.46 0.17 0.54
Premcor Inc. and Subsidiaries
Earnings Release
Twelve months ended December 31, 2001
Port Blue
Selected Refinery Data Arthur Lima Hartford Island** Total
(unaudited)
Operating results
(dollars in millions):
Gross margin:
Gulf Coast 3/2/1 $353.7 $216.2 $100.9 $6.0 $676.8
Chicago 3/2/1 vs.
Gulf Coast 3/2/1 -- 188.7 88.0 5.2 281.9
Crude oil differentials
to benchmark 528.5 (102.2) 66.2 3.9 496.4
Product differentials
to benchmark (193.8) (29.7) (57.8) (7.7) (289.0)
Realized gross margin 688.4 273.0 197.3 7.4 1,166.1
Operating expenses 274.9 114.8 72.6 5.4 467.7
Net refining margin 413.5 158.2 124.7 2.0 698.4
Depreciation and amortization 47.3 23.0 15.7 1.1 87.1
Per barrel of throughput (in dollars):
Gross margin:
Gulf Coast 3/2/1 $4.22 $4.22 $4.22 $4.22 $4.22
Chicago 3/2/1 vs.
Gulf Coast 3/2/1 -- 3.68 3.68 3.68 1.76
Crude oil differentials
to benchmark 6.30 (1.99) 2.77 2.74 3.09
Product differentials
to benchmark (2.31) (0.59) (2.42) (5.41) (1.80)
Realized gross margin 8.21 5.32 8.25 5.23 7.27
Operating expenses 3.28 2.24 3.04 3.79 2.91
Net refining margin 4.93 3.08 5.21 1.43 4.36
Depreciation and amortization 0.56 0.45 0.66 0.77 0.54
Calculation methodology:
Although the Company manages its refinery business, including feedstock
acquisition and product marketing, on an integrated basis, for
analytical purposes, the business results shown here have been allocated
to the individual refineries. The foundation for determining realized
gross margin by refinery is a daily valuation of actual refinery
feedstocks at market and a daily valuation of actual refinery production
at market. The result of this calculation is a standard refinery gross
margin. Since it is not possible to ratably deliver daily priced
feedstocks to our refineries and since it is not possible to realize the
value of refinery production on the day it is produced, the actual
refinery gross margin differs from the standard. These differences
arise from the fact that crude oil is often purchased and priced well in
advance of the time that it is consumed and the value of refinery
production can be fixed before or after it is produced and is further
determined by the channel of trade through which it is marketed.
Inventory fluctuations and hedging activities with their attendant
product grade, location and time basis risks lead to further deviations
from the standard daily feedstock and product valuations. These
variations from the standard are allocated to each refinery on a
reasonable basis, usually driven by volume of crude input. As a result
of these allocations, the individual refinery realized gross margins
presented here do not reflect the results that would be reported if
separately accounted for in accordance with generally accepted
accounting principles.
* Closed September 2002
** Closed January 2001
Premcor Inc. and Subsidiaries
Earnings Release
Twelve months ended December 31, 2002
Port
Selected Volumetric Data Arthur Lima Hartford* Total
(in thousands of barrels
per day, unaudited)
Feedstocks:
Crude oil throughput:
Sweet -- 138.0 -- 138.0
Light/Medium sour 34.3 3.5 44.2 82.0
Heavy sour 190.4 -- 2.4 192.8
Total crude oil 224.7 141.5 46.6 412.8
Unfinished and blendstocks 8.7 (4.9) 3.2 7.0
Total feedstocks 233.4 136.6 49.8 419.8
Production:
Light products:
Conventional gasoline 82.4 73.3 22.3 178.0
Premium and reformulated gasoline 23.0 11.5 4.7 39.2
Diesel fuel 65.4 19.3 15.8 100.5
Jet fuel 26.5 22.2 -- 48.7
Petrochemical products 17.8 7.5 2.2 27.5
Total light products 215.1 133.8 45.0 393.9
Petroleum coke and sulfur 28.7 2.8 3.1 34.6
Residual oil 6.8 1.9 1.0 9.7
Total production 250.6 138.5 49.1 438.2
Premcor Inc. and Subsidiaries
Earnings Release
Twelve months ended December 31, 2001
Port Blue
Selected Volumetric Data Arthur Lima Hartford Island** Total
(in thousands of barrels
per day, unaudited)
Feedstocks:
Crude oil throughput:
Sweet -- 136.5 4.0 3.1 143.6
Light/Medium sour 48.3 4.0 54.6 0.8 107.7
Heavy sour 181.5 -- 6.9 -- 188.4
Total crude oil 229.8 140.5 65.5 3.9 439.7
Unfinished and blendstocks 11.4 (3.6) 2.4 0.4 10.6
Total feedstocks 241.2 136.9 67.9 4.3 450.3
Production:
Light products:
Conventional gasoline 82.9 71.2 30.5 0.2 184.8
Premium and reformulated
gasoline 24.4 11.5 6.5 2.5 44.9
Diesel fuel 77.2 21.3 22.1 1.1 121.7
Jet fuel 19.7 22.7 -- -- 42.4
Petrochemical products 18.3 7.0 3.1 0.1 28.5
Total light products 222.5 133.7 62.2 3.9 422.3
Petroleum coke and sulfur 26.5 2.8 3.8 -- 33.1
Residual oil 4.8 2.0 0.8 0.4 8.0
Total production 253.8 138.5 66.8 4.3 463.4
* Closed September 2002
** Closed January 2001
SOURCE Premcor Inc.
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Related links:
http://www.premcorinc.com
CONTACT:
Media & Investors - Joe Watson,
+1-203-698-7510; or Investors - Karen Davis, +1-314-854-1424, or
Michael Taylor, +1-314-719-2304, all of Premcor Inc.
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