Standard&Poor's Ratings Services is revising its margin assumptions for the oil and gas refining business in the U.S. and Europe, to reflect a more cautious view of industry conditions. By using 2004 benchmark margins--more appropriate under our current market outlook--to approximate refining companies' financial performance under midcycle conditions, we are taking a less optimistic path than in our previous base case, which used average margins over the past five years as a benchmark. We use these base-case assumptions to model refining companies' financial performance and intend them as starting points for conservative credit analysis rather than as forecasts. Using 2004 as representative of midcycle conditions in our base case should give our assumptions some independence from near-term market
