Date of Report (Date of Earliest Event Reported): | October 15, 2014 |
Delaware | 1-5153 | 25-0996816 |
_____________________ (State or other jurisdiction | _____________ (Commission | ______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
5555 San Felipe Street, Houston, Texas | 77056-2723 | |
_________________________________ (Address of principal executive offices) | ___________ (Zip Code) | |
Registrant’s telephone number, including area code: | (713) 629-6600 |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Number | Exhibit | ||
99.1 | Unaudited Pro Forma Consolidated Financial Statements of Marathon Oil Corporation |
Date: October 31, 2014 | MARATHON OIL CORPORATION | ||
By: | /s/ John R. Sult | ||
Name: John R. Sult | |||
Title: Executive Vice President and Chief Financial Officer |
Number | Exhibit | ||
99.1 | Unaudited Pro Forma Consolidated Financial Statements of Marathon Oil Corporation |
• | An adjustment to interest expense associated with amounts capitalized to Norway long-term capital projects; |
• | An adjustment to reflect the net cash proceeds and gain from the sale of MONAS; |
• | An adjustment to reflect cash of the Norway business after settlement of intercompany balances; |
• | An adjustment to reflect previously recorded intercompany balances which became third party upon completion of the sale of MONAS; |
• | An adjustment to remove the U.S. deferred tax asset associated with Norway operations upon the disposition of MONAS; |
• | An adjustment to reflect accrued liabilities for estimated professional fees and closing costs related to the sale of MONAS; |
• | An adjustment to remove the losses in accumulated other comprehensive income related to Norway. |
MARATHON OIL CORPORATION | |||||||||||||||
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (Unaudited) | |||||||||||||||
For the Year ended December 31, 2013 | |||||||||||||||
Pro Forma | |||||||||||||||
(In millions, except per share data) | Historical | Disposition | Adjustments | Pro Forma | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues, including related party | $ | 12,419 | $ | (3,172 | ) | $ | — | $ | 9,247 | ||||||
Marketing revenues | 2,082 | (4 | ) | — | 2,078 | ||||||||||
Income from equity method investments | 423 | — | — | 423 | |||||||||||
Net loss on disposal of assets | (29 | ) | — | — | (29 | ) | |||||||||
Other income | 64 | — | — | 64 | |||||||||||
Total revenues and other income | 14,959 | (3,176 | ) | — | 11,783 | ||||||||||
Costs and expenses: | |||||||||||||||
Production | 2,331 | (174 | ) | — | 2,157 | ||||||||||
Marketing, including purchases from related parties | 2,072 | 3 | — | 2,075 | |||||||||||
Other operating | 439 | (51 | ) | — | 388 | ||||||||||
Exploration | 988 | (97 | ) | — | 891 | ||||||||||
Depreciation, depletion and amortization | 2,790 | (289 | ) | — | 2,501 | ||||||||||
Impairments | 96 | — | — | 96 | |||||||||||
Taxes other than income | 352 | (7 | ) | — | 345 | ||||||||||
General and administrative | 687 | (28 | ) | 659 | |||||||||||
Total costs and expenses | 9,755 | (643 | ) | — | 9,112 | ||||||||||
Income from operations | 5,204 | (2,533 | ) | — | 2,671 | ||||||||||
Net interest and other | (274 | ) | (4 | ) | (9 | ) | (a) | (287 | ) | ||||||
Income from continuing operations before income taxes | 4,930 | (2,537 | ) | (9 | ) | 2,384 | |||||||||
Provision for income taxes | 3,337 | (1,875 | ) | (3 | ) | (b) | 1,459 | ||||||||
Income from continuing operations | $ | 1,593 | $ | (662 | ) | $ | (6 | ) | $ | 925 | |||||
Per Share Data | |||||||||||||||
Income from continuing operations | |||||||||||||||
Basic | $ | 2.26 | $ | 1.31 | |||||||||||
Diluted | $ | 2.24 | $ | 1.30 | |||||||||||
Shares outstanding | |||||||||||||||
Basic | 705 | 705 | |||||||||||||
Diluted | 709 | 709 | |||||||||||||
See accompanying notes to the unaudited pro forma consolidated financial statements. |
MARATHON OIL CORPORATION | |||||||||||||||
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (Unaudited) | |||||||||||||||
For the Year ended December 31, 2012 | |||||||||||||||
Pro Forma | |||||||||||||||
(In millions, except per share data) | Historical | Disposition | Adjustments | Pro Forma | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues, including related party | $ | 12,963 | $ | (3,726 | ) | $ | — | $ | 9,237 | ||||||
Marketing revenues | 2,729 | — | — | 2,729 | |||||||||||
Income from equity method investments | 370 | — | — | 370 | |||||||||||
Net gain on disposal of assets | 127 | — | — | 127 | |||||||||||
Other income | 32 | (9 | ) | — | 23 | ||||||||||
Total revenues and other income | 16,221 | (3,735 | ) | — | 12,486 | ||||||||||
Costs and expenses: | |||||||||||||||
Production | 2,202 | (123 | ) | — | 2,079 | ||||||||||
Marketing, including purchases from related parties | 2,744 | (10 | ) | — | 2,734 | ||||||||||
Other operating | 425 | (61 | ) | — | 364 | ||||||||||
Exploration | 706 | (21 | ) | — | 685 | ||||||||||
Depreciation, depletion and amortization | 2,477 | (468 | ) | — | 2,009 | ||||||||||
Impairments | 371 | — | — | 371 | |||||||||||
Taxes other than income | 248 | (5 | ) | — | 243 | ||||||||||
General and administrative | 699 | (24 | ) | 675 | |||||||||||
Total costs and expenses | 9,872 | (712 | ) | — | 9,160 | ||||||||||
Income from operations | 6,349 | (3,023 | ) | — | 3,326 | ||||||||||
Net interest and other | (219 | ) | (3 | ) | (3 | ) | (a) | (225 | ) | ||||||
Income from continuing operations before income taxes | 6,130 | (3,026 | ) | (3 | ) | 3,101 | |||||||||
Provision for income taxes | 4,517 | (2,269 | ) | (1 | ) | (b) | 2,247 | ||||||||
Income from continuing operations | $ | 1,613 | $ | (757 | ) | $ | (2 | ) | $ | 854 | |||||
Per Share Data | |||||||||||||||
Income from continuing operations | |||||||||||||||
Basic | $ | 2.28 | $ | 1.21 | |||||||||||
Diluted | $ | 2.27 | $ | 1.20 | |||||||||||
Shares outstanding | |||||||||||||||
Basic | 706 | 706 | |||||||||||||
Diluted | 710 | 710 | |||||||||||||
See accompanying notes to the unaudited pro forma consolidated financial statements. |
MARATHON OIL CORPORATION | |||||||||||||||
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (Unaudited) | |||||||||||||||
For the Year ended December 31, 2011 | |||||||||||||||
Pro Forma | |||||||||||||||
(In millions, except per share data) | Historical | Disposition | Adjustments | Pro Forma | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues, including related party | $ | 10,750 | $ | (3,576 | ) | $ | — | $ | 7,174 | ||||||
Marketing revenues | 3,919 | — | — | 3,919 | |||||||||||
Income from equity method investments | 462 | — | — | 462 | |||||||||||
Net gain on disposal of assets | 103 | (3 | ) | — | 100 | ||||||||||
Other income | 48 | (10 | ) | — | 38 | ||||||||||
Total revenues and other income | 15,282 | (3,589 | ) | — | 11,693 | ||||||||||
Costs and expenses: | |||||||||||||||
Production | 1,951 | (117 | ) | — | 1,834 | ||||||||||
Marketing, including purchases from related parties | 3,898 | — | — | 3,898 | |||||||||||
Other operating | 533 | (67 | ) | — | 466 | ||||||||||
Exploration | 641 | (76 | ) | — | 565 | ||||||||||
Depreciation, depletion and amortization | 2,263 | (502 | ) | — | 1,761 | ||||||||||
Impairments | 310 | — | — | 310 | |||||||||||
Taxes other than income | 193 | (5 | ) | — | 188 | ||||||||||
General and administrative | 663 | (21 | ) | 642 | |||||||||||
Total costs and expenses | 10,452 | (788 | ) | — | 9,664 | ||||||||||
Income from operations | 4,830 | (2,801 | ) | — | 2,029 | ||||||||||
Net interest and other | (386 | ) | (28 | ) | (2 | ) | (a) | (416 | ) | ||||||
Income from continuing operations before income taxes | 4,444 | (2,829 | ) | (2 | ) | 1,613 | |||||||||
Provision for income taxes | 2,726 | (1,578 | ) | (1 | ) | (b) | 1,147 | ||||||||
Income from continuing operations | $ | 1,718 | $ | (1,251 | ) | $ | (1 | ) | $ | 466 | |||||
Per Share Data | |||||||||||||||
Income from continuing operations | |||||||||||||||
Basic | $ | 2.42 | $ | 0.66 | |||||||||||
Diluted | $ | 2.41 | $ | 0.65 | |||||||||||
Shares outstanding | |||||||||||||||
Basic | 710 | 710 | |||||||||||||
Diluted | 714 | 714 | |||||||||||||
See accompanying notes to the unaudited pro forma consolidated financial statements. |
MARATHON OIL CORPORATION | |||||||||||
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) | |||||||||||
As of June 30, 2014 | |||||||||||
(In millions, except per share data) | Historical | Disposition | Pro Forma | ||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | 1,169 | $ | 2,079 | (c) | ||||||
— | (237 | ) | (d) | $ | 3,011 | ||||||
Receivables | 2,042 | 198 | (e) | 2,240 | |||||||
Inventories | 404 | — | 404 | ||||||||
Other current assets | 211 | — | 211 | ||||||||
Current assets held for sale | 392 | (392 | ) | (f) | — | ||||||
Total current assets | 4,218 | 1,648 | 5,866 | ||||||||
Equity method investments | 1,184 | — | 1,184 | ||||||||
Property, plant and equipment less accumulated depreciation, depletion and amortization of $20,207 | 27,824 | — | 27,824 | ||||||||
Goodwill | 457 | — | 457 | ||||||||
Other noncurrent assets | 1,088 | (462 | ) | (g) | 626 | ||||||
Noncurrent assets held for sale | 1,164 | (1,164 | ) | (f) | — | ||||||
Total assets | $ | 35,935 | $ | 22 | $ | 35,957 | |||||
Liabilities | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 2,439 | $ | 198 | (e) | $ | 2,637 | ||||
Accrued taxes | 193 | — | 193 | ||||||||
Other current liabilities | 268 | 7 | (h) | 275 | |||||||
Long-term debt due within one year | 68 | — | 68 | ||||||||
Current liabilities held for sale | 1,006 | (1,006 | ) | (f) | — | ||||||
Total current liabilities | 3,974 | (801 | ) | 3,173 | |||||||
Long-term debt | 6,362 | — | 6,362 | ||||||||
Deferred tax liabilities | 2,525 | — | 2,525 | ||||||||
Defined benefit postretirement plan obligations | 668 | — | 668 | ||||||||
Asset retirement obligations | 1,804 | — | 1,804 | ||||||||
Deferred credits and other liabilities | 392 | — | 392 | ||||||||
Noncurrent liabilities held for sale | 342 | (342 | ) | (f) | — | ||||||
Total liabilities | 16,067 | (1,143 | ) | 14,924 | |||||||
Commitments and contingencies | |||||||||||
Stockholders' Equity | |||||||||||
Preferred Stock - no shares issued and outstanding (no par value, 26 million shares authorized) | — | — | — | ||||||||
Common stock: | — | ||||||||||
Issued - 770 million shares (par value $1 per share, 1.1 billion shares authorized) | 770 | — | 770 | ||||||||
Securities exchangeable into common stock - no shares issued or outstanding (no par value, 29 million shares authorized) | — | — | — | ||||||||
Held in treasury, at cost - 97 million shares | (3,718 | ) | — | (3,718 | ) | ||||||
Additional paid-in-capital | 6,530 | — | 6,530 | ||||||||
Retained earnings | 16,564 | 1,149 | (i) | 17,713 | |||||||
Accumulated other comprehensive loss | (278 | ) | 16 | (j) | (262 | ) | |||||
Total stockholders' equity | 19,868 | 1,165 | 21,033 | ||||||||
Total liabilities and stockholders' equity | $ | 35,935 | $ | 22 | $ | 35,957 | |||||
See accompanying notes to the unaudited pro forma consolidated financial statements. |
(a) | Represents the adjustment to interest expense for amounts capitalized to Norway long-term capital projects. |
(b) | Represents the tax effect of the pro forma adjustment to income using a statutory rate of 36% for all periods. |
(c) | Represents net cash proceeds from the sale of MONAS of $2,079M purchase price plus accrued interest. |
(d) | Represents cash of the Norway business after settlement of intercompany balances. |
(e) | Represents previously recorded intercompany balances which became third party upon completion of the sale of MONAS. |
(f) | Represents the removal of the assets and liabilities held for sale from the balance sheet. |
(g) | Represents the removal of the U.S. deferred tax asset associated with Norway operations upon the sale of MONAS. |
(h) | Represents accrued liabilities for estimated professional fees and closing costs related to the sale of MONAS. |
(i) | Represents the gain on sale that would have been recorded as of June 30, 2014. We will utilize foreign tax credits and therefore not pay cash taxes on the gain from the sale of MONAS. |
(j) | Represents an adjustment to the loss on foreign currency cash flow hedges on the Norwegian Kroner and the actuarial loss on a pension plan for our Norway employees. |