EX-99 8 a07-4741_1ex99.htm EX-99
Exhibit 99
Unaudited Pro Forma Combined Statement of Income

On March 31, 2006, ConocoPhillips completed the acquisition of Burlington Resources Inc. (BR).  The following unaudited pro forma financial statement combines the unaudited, historical consolidated statement of income of Burlington Resources for the three months ended March 31, 2006, with the audited, historical consolidated statement of income of ConocoPhillips for the year ended December 31, 2006, 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 were 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

 

Year Ended December 31, 2006

 

ConocoPhillips

 

BR

*

Pro Forma
Adjustments

 

ConocoPhillips
and BR
Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

Revenues and Other Income

 

 

 

 

 

 

 

 

 

Sales and other operating revenues

 

$

183,650

 

2,124

 

(219

)(a)

185,555

 

Equity in earnings of affiliates

 

4,188

 

1

 

 

4,189

 

Other income

 

685

 

50

 

 

735

 

Total Revenues and Other Income

 

188,523

 

2,175

 

(219

)

190,479

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

Purchased crude oil, natural gas and products

 

118,899

 

 

(219

)(a)

118,680

 

Production and operating expenses

 

10,413

 

336

 

 

10,749

 

Selling, general and administrative expenses

 

2,476

 

79

 

 

2,555

 

Exploration expenses

 

834

 

67

 

 

901

 

Depreciation, depletion and amortization

 

7,284

 

390

 

335

(b)

8,009

 

Property impairments

 

683

 

 

 

683

 

Taxes other than income taxes

 

18,187

 

112

 

 

18,299

 

Accretion on discounted liabilities

 

281

 

9

 

 

290

 

Interest and debt expense

 

1,087

 

72

 

173

(c)

1,332

 

Foreign currency transaction losses (gains)

 

(30

)

(2

)

 

(32

)

Minority interests

 

76

 

 

 

76

 

Total Costs and Expenses

 

160,190

 

1,063

 

289

 

161,542

 

Income from continuing operations before income taxes

 

28,333

 

1,112

 

(508

)

28,937

 

Provision for income taxes

 

12,783

 

368

 

(159

)(d)

12,992

 

Income From Continuing Operations

 

15,550

 

744

 

(349

)

15,945

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

9.80

 

 

 

 

 

9.65

 

Diluted

 

9.66

 

 

 

 

 

9.51

 

Average Common Shares Outstanding (in thousands)

 

 

 

 

 

 

 

 

 

Basic

 

1,585,982

 

 

 

 

 

1,652,656

(e)

Diluted

 

1,609,530

 

 

 

 

 

1,676,904

(e)

*Three months ended March 31, 2006.

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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 approximately 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 5.56 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 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) 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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