- Reported second quarter net income of $1.29 billion and EBITDA1 of
$1.86 billion
- Exceptional health, safety and environmental performance
- Record-setting refinery utilization and throughput
- Received two AFPM Safety Achievement awards
- Received ILTA Safety Excellence award
HOUSTON, Aug. 11, 2022 /PRNewswire/ -- CITGO
Petroleum reported a second quarter net income of $1.29 billion and EBITDA of $1.86 billion compared to net income of
$245 million and EBITDA of
$518 million in the first quarter of
2022.
"Reliable and safe operations helped us capitalize on favorable
market conditions that were supported by excellent product
cracks, high refinery utilization and lean global inventories,"
said CITGO President and CEO Carlos
Jordá. "I am enormously proud of what we accomplished this
quarter; not only has our work produced outstanding financial
results thanks in large part to exceptional reliability and
utilization rates at our refineries, our Health, Safety and
Environmental performance was similarly excellent, as evidenced by
multiple safety awards at CITGO refineries and terminals."
Q2 2022 Highlights:
Strategic and Operational
- Throughput – Total throughput for the second quarter of 2022
was 837,000 barrels-per-day (bpd), of which crude runs were 776,000
bpd and intermediate feedstocks were 61,000 bpd. Refinery assets
delivered strong reliability results – the best quarterly results
in the last five years – with overall crude runs exceeding
nameplate capacity and resulting in 101% utilization, marking three
consecutive quarters above 94%. The Lake Charles refinery set a new
quarterly crude throughput record of 436,000 bpd, significantly
surpassing the previous record of 411,000 bpd set in third quarter
of 2018.
- Operational Excellence – Health, Safety and Environmental (HSE)
performance was exceptional, and the Company is on pace for
record-setting occupational safety, process safety and
environmental performance for 2022. CITGO was also recognized
during the quarter with AFPM's Safety Achievement Award for both
the Lemont and Corpus Christi
refineries, and ILTA's Safety Excellence Award for terminals.
- Commercial Excellence – We continued growing our exposure into
South America, with refined
product exports increasing to an average of 195,000 bpd from
157,000 bpd in the first quarter of 2022.
Financial
- For capital spending, we invested $76
million on turnarounds and catalysts and another
$59 million on capital projects.
- Under the CITGO Holding debt agreements, certain Excess Cash
Flow (ECF) offers are required to be made to the CITGO Holding Term
Loan B lenders and the CITGO Holding noteholders based on 50% of
excess cash flow. CITGO Petroleum intends to dividend to CITGO
Holding the amounts necessary to make prepayments of CITGO Holding
debt pursuant to the ECF offers. Further details regarding the ECF
offers are contained in the separate press release issued today,
which is available here.
1 EBITDA/Adjusted EBITDA are non-GAAP
financial measures. See page 3 of this release for additional
information regarding EBITDA and Adjusted EBITDA and the
reconciliations to the most directly comparable GAAP financial
measure included with this release.
|
"Our second quarter results are the best in the history of the
company," continued Jordá, "and the opportunity to reduce our debt
will help us further strengthen the company as we continue
supplying our customers through safe, reliable and responsible
operations."
About CITGO
Headquartered in Houston, Texas, CITGO Petroleum
Corporation is a recognized leader in the refining industry and
operates under the well-known CITGO brand. CITGO operates three
refineries located in Lake Charles, La.; Lemont, Ill.;
and Corpus Christi, Texas, and wholly and/or jointly owns
38 active terminals, six pipelines and three lubricants blending
and packaging plants. With approximately 3,300 employees and a
combined crude capacity of approximately 769,000 barrels-per-day
(bpd), CITGO ranks as the fifth-largest and is one of the most
complex independent refiners in the United States. CITGO
transports and markets transportation fuels, lubricants,
petrochemicals and other industrial products, and supplies a
network of approximately 4,300 locally owned and operated branded
retail outlets, all located east of the Rocky Mountains. CITGO
Petroleum Corporation is owned by CITGO Holding, Inc.
ADDITIONAL INFORMATION
General:
CITGO publishes financial and other information on its website,
including reports of quarterly and annual results of operations and
financial condition. While CITGO's historical financial information
is presented in accordance with U.S. generally accepted accounting
principles ("GAAP"), except for certain non-GAAP financial measures
(see below), CITGO is not an SEC reporting company and does not
report all information required of SEC reporting companies.
Forward-Looking Statements:
This press release contains "forward-looking statements"
regarding financial and operating items relating to the CITGO
business. These forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties many
of which are beyond CITGO's control, that could result in
expectations not being realized or could otherwise materially and
adversely affect CITGO's business, financial condition, results of
operations and cash flows. This press release may also contain
estimates and projections regarding market and industry data that
were obtained from internal company estimates, as well as
third-party sources believed to be generally reliable. However,
market data is subject to change and cannot always be verified with
complete certainty due to limits on the availability and
reliability of raw data and other limitations and uncertainties
inherent in any statistical survey, interpretation or presentation
of market data and management's estimates and projections. The
forward-looking statements contained in this press release are made
only as of the date of this press release. CITGO disclaims any duty
to update any forward-looking statements.
Non-GAAP Financial Measures:
This press release also contains operational metrics and
non-GAAP information, including EBITDA and Adjusted EBITDA, that
have not been audited and are based on management's estimates,
which may be difficult to verify. These non-GAAP financial measures
are in addition to, and not a substitute for or superior to,
measures of financial performance prepared in accordance with U.S.
GAAP and may differ from non-GAAP measures used by other companies
in our industry. We consider these non-GAAP financial measures to
be important because we believe they provide useful supplemental
measures of the operating performance of the Company, exclusive of
unusual events, as well as factors that do not directly affect what
we consider to be our core operating performance. These non-GAAP
financial measures should not be considered a substitute for
financial information presented in accordance with GAAP. Please see
the reconciliation of EBITDA and Adjusted EBITDA to the most
directly comparable GAAP measure set forth on page [4] of this
press release.
Refinery EBITDA Estimates:
The estimates of Refinery EBITDA presented in this press release
are calculated as refinery hydrocarbon gross margin minus refinery
operating expenses and non-operating and income/(expense) items,
plus depreciation and amortization. Our estimates of Refinery
EBITDA are intended as estimates of our refineries' earnings before
taxes and interest and depreciation and amortization. Shown in the
table on page [5] of this press release is a reconciliation of our
estimates of Refinery of EBITDA (on an individual and total
refinery basis) to EBITDA for our consolidated operations for the
respective periods presented therein. In addition, we summarize
below the methodologies and assumptions we utilize in connection
with our estimates of the various components of Refinery
EBITDA.
With respect to these components of Refinery EBITDA, we define
refinery hydrocarbon gross margin as the estimated value of a
refinery's production less the cost of hydrocarbons and
intermediate feedstocks used by that refinery. The estimated values
of production are not calculated in the same way as revenues for
U.S. GAAP purposes, and these values would not be eligible for
revenue recognition under U.S. GAAP. Under U.S. GAAP, we recognize
revenues at the time products are sold, whereas the estimated
values are based on production dates, which may not be the same as
the market values at the time of sale. In addition, our U.S. GAAP
revenues are based on the actual sales prices of products, while
the estimated values are based on selected market indexes. As a
result, the actual revenues realized for the sale of products may
vary based on the timing, location or actual realized sales price.
The cost of hydrocarbons and intermediate feedstocks used to
calculate refinery hydrocarbon gross margin are the acquisition
costs of these inputs used by a refinery. Costs relating to these
items are included as part of cost of sales and operating expenses
on our consolidated statements of income and comprehensive income
under U.S. GAAP. However, for purposes of calculating refinery
hydrocarbon gross margin, these costs are not calculated in the
same way that we calculate amounts included in cost of sales under
U.S. GAAP, and the amounts reflected in refinery hydrocarbon gross
margin may materially understate or overstate the corresponding
U.S. GAAP amounts.
In addition, refinery operating expenses reflect estimates of
the direct costs and expenses associated with operating the
refineries, such as labor and related burden energy, maintenance
and materials, and depreciation and amortization. Costs and
expenses relating to these items are included as part of other
expenses or cost of sales and operating expenses on our
consolidated statements of income and comprehensive income under
U.S. GAAP, along with other expenses. The amounts allocated to our
refineries for certain of these costs and expenses for purposes of
our estimates of Refinery EBITDA do not necessarily reflect the
full amounts of such costs, or may materially overstate or
understate such costs.
Further, other miscellaneous costs and indirect expenses
associated with operating the refineries include certain overhead
expenses for crude supply and trading, industrial products and
petrochemicals, as well as certain refinery-related equity in the
investments of affiliates and insurance proceeds. These items
reflect amounts included as part of cost of sales and operating
expenses and other income, other expenses, insurance recoveries and
equity in earnings of affiliates on our consolidated statements of
income and comprehensive income, along with other expenses. The
amounts allocated to our refineries for certain of these costs and
expenses for purposes of our estimates of Refinery EBITDA do not
necessarily reflect the full amounts of such costs, or may
materially overstate or understate such costs.
Reconciliation of
net income to Adjusted EBITDA
(unaudited, in millions
of U.S. dollars)
|
|
Three Months
Ended
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
2022
|
|
2022
|
|
2021
|
Net income
(loss)
|
1,286
|
|
245
|
|
3
|
Plus (less)
|
|
|
|
|
|
Interest expense,
including finance lease
|
57
|
|
57
|
|
59
|
Income tax expense
(benefit)
|
369
|
|
71
|
|
2
|
Depreciation and
amortization
|
150
|
|
145
|
|
150
|
EBITDA
|
1,862
|
|
518
|
|
214
|
Plus
|
|
|
|
|
|
Hurricane Laura costs,
net of insurance recoveries
|
nm
|
|
nm
|
|
4
|
Charitable
contributions
|
—
|
|
—
|
|
1
|
Winter Storm Uri
costs, net of insurance recoveries
|
—
|
|
—
|
|
(11)
|
Adjusted
EBITDA
|
1,862
|
|
518
|
|
208
|
|
nm: not
meaningful
|
Reconciliation of
Refinery EBITDA Estimates to Consolidated
EBITDA1
(unaudited, in millions
of U.S. dollars)
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Refinery
EBITDA:
|
|
|
|
|
|
|
|
|
|
Lake
Charles
|
1,009
|
|
339
|
|
44
|
|
1,348
|
|
57
|
Corpus
Christi
|
464
|
|
99
|
|
(9)
|
|
563
|
|
(108)
|
Lemont
|
465
|
|
128
|
|
108
|
|
593
|
|
160
|
Total Refinery EBITDA
Estimate
|
1,938
|
|
566
|
|
143
|
|
2,504
|
|
109
|
Supply
|
(36)
|
|
(39)
|
|
(6)
|
|
(75)
|
|
12
|
Marketing
|
30
|
|
26
|
|
48
|
|
56
|
|
80
|
Lubricants
|
9
|
|
13
|
|
9
|
|
22
|
|
16
|
Corporate and
other
|
(79)
|
|
(48)
|
|
20
|
|
(127)
|
|
(24)
|
Consolidated
EBITDA
|
1,862
|
|
518
|
|
214
|
|
2,380
|
|
193
|
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SOURCE CITGO Corporation