EX-99 6 a06-9807_1ex99.htm EX-99
Exhibit 99
 
Unaudited Pro Forma Combined Statement of Income
 

The following unaudited pro forma financial statement combines the unaudited, historical consolidated statements of income of ConocoPhillips and Burlington Resources Inc. (BR), giving effect to the acquisition using the purchase method of accounting. The unaudited pro forma combined statement of income assumes the acquisition was effected on January 1, 2006. The accounting policies of ConocoPhillips and BR are comparable.

 

The unaudited pro forma combined statement of income is for illustrative purposes only. The financial results may have been different had the companies always been combined. Further, the unaudited pro forma combined statement of income does not reflect anticipated synergies resulting from the acquisition. You should not rely on the pro forma combined statement of income as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that ConocoPhillips will experience.

 

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UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME

 

 

 

Millions of Dollars

 

Three Months Ended March 31, 2006

 

ConocoPhillips

 

BR

 

Pro Forma
Adjustments

 

ConocoPhillips
and BR
Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

Revenues and Other Income

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

46,906

 

2,124

 

(219

)(a)

48,811

 

Equity in earnings of affiliates

 

960

 

1

 

—

 

961

 

Other income

 

61

 

50

 

—

 

111

 

Total Revenues and Other Income

 

47,927

 

2,175

 

(219

)

49,883

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

Purchased crude oil, natural gas and products

 

33,455

 

—

 

(219

)(a)

33,236

 

Production and operating expenses

 

2,215

 

336

 

—

 

2,551

 

Selling, general and administrative expenses

 

566

 

79

 

—

 

645

 

Exploration expenses

 

112

 

67

 

—

 

179

 

Depreciation, depletion and amortization

 

1,180

 

390

 

256

(b)

1,826

 

Property impairments

 

—

 

—

 

—

 

—

 

Taxes other than income taxes

 

4,387

 

112

 

—

 

4,499

 

Accretion on discounted liabilities

 

60

 

9

 

—

 

69

 

Interest and debt expense

 

115

 

72

 

159

(c)

346

 

Foreign currency transaction losses (gains)

 

22

 

(2

)

—

 

20

 

Minority interests

 

18

 

—

 

—

 

18

 

Total Costs and Expenses

 

42,130

 

1,063

 

196

 

43,389

 

Income from continuing operations before income taxes

 

5,797

 

1,112

 

(415

)

6,494

 

Provision for income taxes

 

2,506

 

368

 

(126

)(d)

2,748

 

Income From Continuing Operations

 

3,291

 

744

 

(289

)

3,746

 

 

 

 

 

 

 

 

 

 

 

Income From Continuing Operations Per Share of Common Stock (dollars)

 

 

 

 

 

 

 

 

 

Basic

 

2.38

 

 

 

 

 

2.27

 

Diluted

 

2.34

 

 

 

 

 

2.23

 

Average Common Shares Outstanding
(in thousands)

 

 

 

 

 

 

 

 

 

Basic

 

1,382,925

 

 

 

 

 

1,653,313

(e)

Diluted

 

 

1,404,704

 

 

 

 

 

1,677,839

(e)

 

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Notes to Unaudited Pro Forma Combined Condensed Financial Statements

 

(a)                                  Reflects the elimination of sales from BR to ConocoPhillips.

 

(b)                                 Reflects increased depreciation, depletion and amortization related to the “step-up” of properties, plants and equipment to their estimated fair value. Producing properties, grouped at a BR divisional level in the United States and by country internationally, were assigned first-year unit-of-production depreciation rates ranging from 5 percent to 25 percent, while pooled leaseholds and corporate assets were assigned straight-line depreciation rates ranging from five to 25 years.

 

(c)                                  Reflects: 1) the increase in long-term debt to fund the cash portion of the purchase price at ConocoPhillips’ current borrowing interest rate of 5.05 percent, and 2) the restatement of BR’s debt to fair value as of March 31, 2006, and the corresponding reduction in interest expense as the resulting $442 million premium is amortized over a weighted-average effective yield period of 12 years. A one-eighth percent increase in the average borrowing rate would increase before-tax pro-forma-basis interest expense for the quarter by $4 million.

 

(d)                                 The pro forma adjustment to income tax reflects the statutory federal and state income tax impacts of the pro forma adjustments to BR’s pretax income, and also includes the estimated effect of the acquisition on ConocoPhillips’ interest expense allocated to foreign sources.

 

(e)                                  Reflects the exchange of outstanding BR stock, the issuance of 270.4 million shares of ConocoPhillips common stock (including 32.1 million treasury shares) to be issued to BR stockholders as consideration in the merger, and, for diluted average common shares outstanding, the effect of ConocoPhillips stock options issued in the exchange to BR stock option holders, as well as non-vested restricted stock.

 

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