-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SUwAx3NY50Z2c7NdSbjNRVSxlN446TROcK1F46b7gEdY88ee+V/8rplLGsj39EMA Cr2HlTGQQotYiCy1r0sPLw== 0001157523-05-009190.txt : 20051026 0001157523-05-009190.hdr.sgml : 20051026 20051026092021 ACCESSION NUMBER: 0001157523-05-009190 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051026 DATE AS OF CHANGE: 20051026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONOCOPHILLIPS CENTRAL INDEX KEY: 0001163165 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 010562944 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-32395 FILM NUMBER: 051155749 BUSINESS ADDRESS: STREET 1: CONOCOPHILLIPS STREET 2: 600 NORTH DAIRY ASHFORD ROAD CITY: HOUSTON STATE: TX ZIP: 77079 BUSINESS PHONE: 2812931000 MAIL ADDRESS: STREET 1: CONOCOPHILLIPS STREET 2: 600 NORTH DAIRY ASHFORD ROAD CITY: HOUSTON STATE: TX ZIP: 77079 FORMER COMPANY: FORMER CONFORMED NAME: CORVETTEPORSCHE CORP DATE OF NAME CHANGE: 20011204 8-K 1 a5003527.txt CONOCOPHILLIPS, 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): October 26, 2005 ConocoPhillips (Exact name of registrant as specified in its charter) Delaware 001-32395 01-0562944 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.) 600 North Dairy Ashford Houston, Texas 77079 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (281) 293-1000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| 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)) Item 2.02 Results of Operations and Financial Condition On October 26, 2005, ConocoPhillips issued a press release announcing the company's financial and operating results for the quarter ended September 30, 2005. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference. Additional financial and operating information about the quarter is furnished as Exhibits 99.2 and 99.3 hereto and incorporated herein by reference. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 -- Press release issued by ConocoPhillips on October 26, 2005. 99.2 -- Financial and operational tables. 99.3 -- Supplemental financial information. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONOCOPHILLIPS /s/ Rand C. Berney ------------------------------------ Rand C. Berney Vice President and Controller October 26, 2005 3 EXHIBIT INDEX Exhibit No. Description - --- ----------- 99.1 Press release issued by ConocoPhillips on October 26, 2005. 99.2 Financial and operational tables. 99.3 Supplemental financial information. 4 EX-99.1 2 a5003527ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 ConocoPhillips Reports Third-Quarter Net Income of $3.8 Billion HOUSTON--(BUSINESS WIRE)--Oct. 26, 2005--ConocoPhillips (NYSE:COP) Earnings at a glance Third Quarter Nine Months - ---------------------------------------------------------------------- 2005 2004 2005 2004 - ---------------------------------------------------------------------- Income from continuing operations $3,804 million 2,011 million $9,858 million 5,627 million Income from discontinued operations $ (4) (5) $ (8) 70 Net income $3,800 2,006 $9,850 5,697 - ---------------------------------------------------------------------- Diluted income per share Income from continuing operations (a) $2.68 1.43 $6.94 4.03 Net income(a) $2.68 1.43 $6.94 4.08 - ---------------------------------------------------------------------- Revenues $49.7 billion 34.7 billion $131.2 billion 96.8 billion - ---------------------------------------------------------------------- (a) Per-share amounts in all periods reflect the impact of a 2-for-1 stock split on June 1, 2005. ConocoPhillips (NYSE:COP) today reported third-quarter net income of $3,800 million, or $2.68 per share, compared with $2,006 million, or $1.43 per share, for the same quarter in 2004. Total revenues were $49.7 billion, versus $34.7 billion a year ago. Income from continuing operations for the third quarter was $3,804 million, or $2.68 per share, compared with $2,011 million, or $1.43 per share, for the same period a year ago. "During the quarter, our U.S. Gulf Coast operations were significantly impacted by Hurricanes Katrina, Rita and Dennis. Despite these impacts, our overall operating performance for the quarter was good, and we continued to benefit from the strong commodity price environment," said Jim Mulva, chairman and chief executive officer. "We produced 1.79 million BOE per day, including 1.52 million BOE per day from our Exploration and Production segment and an estimated 0.27 million BOE per day from our LUKOIL Investment segment. Worldwide refining crude oil capacity utilization rate was 95 percent. "Our financial position continues to steadily improve, and our return on capital employed remains strong and competitive. We ended the quarter with a debt-to-capital ratio of 21 percent. During the quarter, we generated $6.1 billion in cash from operations, spent $3.6 billion in capital projects and investments, paid $430 million in dividends, reduced debt by $516 million and repurchased $588 million of ConocoPhillips common stock." For the first nine months of 2005, net income was $9,850 million, or $6.94 per share, versus $5,697 million, or $4.08 per share, for 2004. Income from continuing operations was $9,858 million, or $6.94 per share, compared with $5,627 million, or $4.03 per share, for the same period a year ago. Total revenues were $131.2 billion, versus $96.8 billion a year ago. The results for ConocoPhillips' business segments follow. Exploration & Production (E&P) Third-quarter financial results: E&P income from continuing operations was $2,288 million, up from $1,929 million in the second quarter of 2005 and up from $1,420 million in the third quarter of 2004. The increase from the second quarter of 2005 and the third quarter of 2004 primarily was the result of higher realized crude oil and natural gas prices, partially offset by the impact of high natural gas prices on inventory positions, higher depreciation, depletion and amortization, hurricane impacts, and increased production taxes driven by high commodity prices. Third-quarter results also benefited from increased crude oil sales versus the same period last year. Daily production, including Canadian Syncrude and excluding the LUKOIL Investment segment, averaged 1.52 million barrels of oil equivalent (BOE) per day, slightly lower than the prior quarter and higher than the 1.48 million BOE per day in the third quarter of 2004. Compared with the previous quarter, the company experienced approximately 50,000 BOE per day of greater output from the Timor Sea, Magnolia and Vietnam. These increases were more than offset by 30,000 BOE per day of planned and unplanned downtime in the United Kingdom, 20,000 BOE per day of downtime as a result of Hurricanes Katrina, Rita and Dennis, and 10,000 BOE per day of normal seasonal decline as well as planned and unplanned downtime in Alaska. In addition, the impacts of production-sharing contracts in Indonesia, driven by higher prices, continued to lower production volumes, compared with the second quarter of 2005. The increase from the third quarter of 2004 was primarily due to less scheduled maintenance in Alaska and Norway, and greater output from Australia, Venezuela, Lower 48 and Indonesia, despite the impact of commodity prices on Indonesian production-sharing contracts. These increases were partially offset by downtime in the United Kingdom. Nine-months financial results: E&P income from continuing operations for the first nine months of 2005 was $6,004 million, up from $4,031 million in 2004, primarily due to higher realized crude oil and natural gas prices and oil sales volumes, partially offset by higher depreciation, depletion and amortization, the impact of higher commodity prices on production taxes, and reduced income tax benefits. Midstream Third-quarter financial results: Midstream income from continuing operations was $88 million, up from $68 million in the prior quarter and up from $38 million in the third quarter of 2004. The primary reasons for the improvement over the previous quarter were higher natural gas liquids prices and increased ownership interest in Duke Energy Field Services, LLC (DEFS). These improvements were partially offset by lower volumes due to the Canada Empress system disposition. The increase over the third quarter of 2004 primarily was due to higher natural gas liquids prices in both DEFS' and the company's consolidated operations, increased ownership in DEFS and the absence of impairments recorded in the third quarter of 2004. These improvements were partially offset by the Canada Empress system disposition. Nine-months financial results: Midstream income from continuing operations for the first nine months of 2005 increased to $541 million, from $135 million in 2004. The increase primarily was due to a net gain of $300 million to ConocoPhillips in the first quarter of 2005 associated with the DEFS restructuring, as well as the company's increased ownership in DEFS. In addition, natural gas liquids prices in both DEFS and the company's consolidated operations were higher in the first nine months of 2005, compared with the first nine months of 2004. Refining and Marketing (R&M) Third-quarter financial results: R&M income from continuing operations was $1,390 million, up from $1,110 million in the previous quarter and $708 million in the third quarter of 2004. The increase from the second quarter of 2005 and the third quarter of 2004 primarily was the result of improved worldwide refining margins, partially offset by lower worldwide marketing margins. Although industry crack spreads improved significantly during the quarter, realized margins do not reflect the full benefit of stronger gasoline spot prices as the company's refining configuration yields less gasoline than assumed in the market cracks. In addition, downtime at the company's three Gulf Coast refineries due to Hurricanes Katrina, Rita and Dennis resulted in lower U.S. refining throughput. The impact of the heavy-light crude oil differentials was similar to that of the second quarter of 2005, while energy costs increased from both the second quarter of 2005 and the third quarter of 2004. Worldwide marketing results declined sharply, mainly because the company's domestic wholesale and retail prices did not increase as rapidly as gasoline and diesel spot prices. Domestically, third-quarter realized refining margins significantly improved relative to the second quarter. U.S. refineries operated at 93 percent of crude oil capacity as hurricane-related downtime impaired third-quarter throughputs. Before-tax turnaround costs were $53 million in the third quarter, compared with $65 million in the previous quarter. In addition, realized U.S. wholesale marketing margins were significantly lower. U.S. marketing earnings were negatively affected by a $16 million impairment resulting from the discontinuation of a marketing incentive program. Internationally, third-quarter realized refining margins improved over the second quarter, while the refining crude oil capacity utilization rate increased by 7 percent. Lower marketing margins also impacted international results. Worldwide, R&M's refinery crude oil capacity utilization rate averaged 95 percent, compared with 97 percent in the previous quarter and 94 percent in the third quarter of 2004. Before-tax turnaround costs were $53 million in the third quarter of 2005, versus $106 million in the second quarter. Nine-months financial results: R&M income from continuing operations for the first nine months of 2005 increased to $3,200 million, compared with $1,990 million in the first nine months of 2004. The increased earnings were driven by higher worldwide refining margins, partially offset by higher utility costs, unfavorable inventory impacts, lower worldwide marketing margins, and foreign exchange losses. LUKOIL Investment Third-quarter financial results: Income from continuing operations in the third quarter of 2005 was $267 million, up from $148 million in the prior quarter. This represents ConocoPhillips' estimate of the company's 14.2 percent weighted average equity share of LUKOIL's income for the third quarter based on market indicators and historical production trends for LUKOIL. The improvement from the prior quarter was attributable to higher realized price estimates, an increased equity ownership position and an increase based on LUKOIL's reported second-quarter results. At the end of the third quarter, the company's equity ownership in LUKOIL was 14.8 percent. ConocoPhillips' equity share of LUKOIL's estimated BOE production was 266,000 per day and its share of estimated daily refining crude oil throughput was 138,000 barrels per day. Chemicals Third-quarter financial results: The Chemicals segment, which includes the company's 50 percent interest in Chevron Phillips Chemical Company LLC (CPChem), reported income from continuing operations of $13 million, compared with $63 million in the second quarter of 2005 and $81 million in the third quarter of 2004. The decrease from the second quarter was largely due to lower margins from olefins and polyolefins, the effects of hurricane-related plant shutdowns, and higher utility costs. The decrease from the third quarter of 2004 reflects higher utility and maintenance costs, the effects of hurricane-related plant shutdowns, and lower margins from aromatics and styrenics. Nine-months financial results: During the first nine months of 2005, the Chemicals segment had income from continuing operations of $209 million, compared with $166 million for the same period a year ago. The improvement primarily was due to higher margins in olefins and polyolefins, partially offset by higher utility costs, higher maintenance costs and lower overall volumes. Emerging Businesses The Emerging Businesses segment results from continuing operations were slightly positive in the third quarter of 2005, compared with losses of $8 million in the second quarter of 2005 and $27 million in the third quarter of 2004. Improved results from international and domestic power operations contributed to the improvement from second quarter and the reduced operating losses, compared with the third quarter of 2004. Corporate and Other Third-quarter after-tax Corporate expenses from continuing operations were $242 million, compared with $179 million in the previous quarter and $209 million in the third quarter of 2004. The increased charges in the third quarter primarily were driven by $42 million in after-tax premiums incurred on the early retirement of debt, as well as increased benefit-related charges and unfavorable foreign exchange impacts. The increase from the third quarter of 2004 primarily was the result of negative foreign exchange impacts and increased benefit-related charges, partially offset by lower net interest expense. Total debt at the end of the third quarter was $13.5 billion, down approximately $0.5 billion from the previous quarter and $1.5 billion below the year-end 2004 level. At the end of the third quarter, the company's debt-to-capital ratio was 21 percent, down from 22 percent at the end of the second quarter. The company's tax provision for the third quarter of 2005 was $2.8 billion, resulting in an effective tax rate of 42.0 percent. This is compared with 42.4 percent in the previous quarter and 45.1 percent in the third quarter of 2004. Discontinued Operations Third-quarter financial results: Third-quarter losses from discontinued operations were $4 million, compared with income of $7 million in the second quarter and losses of $5 million in the third quarter of 2004. Nine-months financial results: During the first nine months of 2005, discontinued operations had a loss of $8 million, compared with income of $70 million for the same period a year ago. The decrease is attributable primarily to 2004 asset sales. Outlook Mr. Mulva concluded: "Efforts to restore operations impacted by Hurricanes Katrina and Rita continue. The company-operated Magnolia field and the Sweeny refinery have returned to normal operations. The Lake Charles refinery is expected to return to normal operations by next week. The company-operated Green Canyon and partner-operated Ursa fields remain shut-in, pending full assessment and infrastructure coming back online. The company's Alliance refinery is expected to begin partial operation in December and return to full operation in early 2006. "We expect our production in the fourth quarter to increase and anticipate full-year daily BOE production to average about the same as 2004, excluding LUKOIL. "With respect to downstream, some turnaround activity has been rescheduled in an effort to help stabilize U.S. supply. Near-term Gulf Coast utilization rates are expected to return to pre-hurricane levels once operations are restored at the Alliance refinery. During the Alliance downtime, we will complete turnaround activity previously scheduled for 2006. Full-year turnaround costs are anticipated to be approximately $380 million. "We are facing significant short-term and long-term energy challenges in the United States. Industry must work proactively with consumers and the government to find solutions. ConocoPhillips continues to pursue opportunities for increasing domestic energy supply through various liquefied natural gas projects, Canadian Oil Sands projects and projects aimed at developing Alaska and Mackenzie Delta natural gas resources. Specifically, the company and the state of Alaska recently announced an agreement in principle on base fiscal terms for a natural gas pipeline contract that progresses the development of Alaska North Slope gas. Additionally, we are advancing our plans to expand our overall refining capacity and clean fuels capabilities. "We look forward to updating the financial community on the status of our business and operating plans at our November 16 analyst meeting in New York." ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 35,800 employees, $104 billion of assets, and $175 billion of annualized revenues as of September 30, 2005. For more information, go to www.conocophillips.com. ConocoPhillips' quarterly conference call is scheduled for 11 a.m. Eastern today. To listen to the conference call and to view related presentation materials, go to www.conocophillips.com and click on the "Investor Information" link. For financial and operational tables and detailed supplemental information, go to http://www.conocophillips.com/investor/reports/index.htm CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This update contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements, such as "Lake Charles is expected to return to normal operations by next week"; "the Company's Alliance refinery is expected to begin partial operation in December and return to full operation in early 2006"; "we expect our production in the fourth quarter to increase and anticipate full-year daily BOE production to average about the same as 2004, excluding LUKOIL"; "near-term Gulf Coast utilization rates are expected to return to pre-hurricane levels once operations are restored at the Alliance refinery"; "during the Alliance downtime, we will complete turnaround activity previously scheduled for 2006"; "full-year turnaround costs are anticipated to be approximately $380 million", involve certain risks, uncertainties and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Economic, business, competitive and regulatory factors that may affect ConocoPhillips' business are generally as set forth in ConocoPhillips' filings with the Securities and Exchange Commission (SEC). Unless legally required, ConocoPhillips undertakes no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise. Cautionary Note to U.S. Investors -- The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Production is distinguished from oil and gas production because SEC regulations define Syncrude as mining-related and not part of conventional oil and natural gas reserves. We use certain terms in this release, such as "including Canadian Syncrude" that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in the company's periodic filings with the SEC, available from the company at 600 North Dairy Ashford Road, Houston, Texas 77079 and the company's Web site at www.conocophillips.com/investor/sec. This information also can be obtained from the SEC by calling 1-800-SEC-0330. CONTACT: ConocoPhillips, Houston Laura Hopkins, 281-293-6030 (media) or Gary Russell, 212-207-1996 (investors) EX-99.2 3 a5003527ex99_2.txt EXHIBIT 99.2 Exhibit 99.2 ConocoPhillips Houston, Texas 77079 Preliminary FINANCIAL HIGHLIGHTS
Millions of Dollars Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 Revenues Sales and other operating revenues* $ 48,745 34,350 128,184 95,691 Equity in earnings of affiliates 872 389 2,626 980 Other income 42 2 381 173 --------- --------- --------- --------- 49,659 34,741 131,191 96,844 --------- --------- --------- --------- Costs and expenses Purchased crude oil, natural gas and products 34,508 23,100 88,603 63,198 Production and operating expenses 1,982 1,807 6,081 5,312 Selling, general and administrative expenses 612 529 1,690 1,513 Exploration expenses 140 205 432 511 Depreciation, depletion and amortization 1,049 938 3,075 2,768 Property impairments - 12 31 63 Taxes other than income taxes* 4,606 4,336 13,758 12,878 Accretion on discounted liabilities 46 49 135 126 Interest and debt expense 122 101 387 405 Foreign currency transaction losses (gains) 34 (4) 52 (53) Minority interests 6 8 21 29 --------- --------- --------- --------- 43,105 31,081 114,265 86,750 --------- --------- --------- --------- Income from continuing operations before income taxes 6,554 3,660 16,926 10,094 Provision for income taxes 2,750 1,649 7,068 4,467 --------- --------- --------- --------- Income from continuing operations 3,804 2,011 9,858 5,627 Income (loss) from discontinued operations (4) (5) (8) 70 --------- --------- --------- --------- Net income $ 3,800 2,006 9,850 5,697 ========= ========= ========= ========= Income per share of common stock (dollars)** Basic Continuing operations $ 2.73 1.45 7.06 4.08 Discontinued operations - - (0.01) 0.05 Net income $ 2.73 1.45 7.05 4.13 Diluted Continuing operations $ 2.68 1.43 6.94 4.03 Discontinued operations - - - 0.05 Net income $ 2.68 1.43 6.94 4.08 Average common shares outstanding (in thousands)** Basic 1,393,943 1,383,652 1,396,180 1,378,428 Diluted 1,417,796 1,403,432 1,419,898 1,397,038 * Includes excise, value added and other similar taxes on petroleum products sales: $ 4,292 4,079 12,785 12,073 ** Per-share amounts and average number of common shares outstanding in all periods reflect a two-for-one stock split effected as a 100 percent stock dividend on June 1, 2005.
1 ConocoPhillips Houston, Texas 77079 Preliminary SELECTED FINANCIAL DATA
Millions of Dollars Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 INCOME (LOSS) FROM CONTINUING OPERATIONS E&P United States $ 1,107 701 2,965 2,007 International 1,181 719 3,039 2,024 --------- --------- --------- --------- Total E&P 2,288 1,420 6,004 4,031 --------- --------- --------- --------- Midstream 88 38 541 135 --------- --------- --------- --------- R&M United States 1,096 505 2,602 1,642 International 294 203 598 348 --------- --------- --------- --------- Total R&M 1,390 708 3,200 1,990 --------- --------- --------- --------- LUKOIL Investment 267 - 525 - Chemicals 13 81 209 166 Emerging Businesses - (27) (16) (78) Corporate and other (242) (209) (605) (617) --------- --------- --------- --------- Consolidated $ 3,804 2,011 9,858 5,627 ========= ========= ========= ========= INCOME (LOSS) FROM DISCONTINUED OPERATIONS Corporate and other (4) (5) (8) 70 SUMMARY OF NET INCOME (LOSS) E&P United States $ 1,107 701 2,965 2,007 International 1,181 719 3,039 2,024 --------- --------- --------- --------- Total E&P 2,288 1,420 6,004 4,031 --------- --------- --------- --------- Midstream 88 38 541 135 --------- --------- --------- --------- R&M United States 1,096 505 2,602 1,642 International 294 203 598 348 --------- --------- --------- --------- Total R&M 1,390 708 3,200 1,990 --------- --------- --------- --------- LUKOIL Investment 267 - 525 - Chemicals 13 81 209 166 Emerging Businesses - (27) (16) (78) Corporate and other (246) (214) (613) (547) --------- --------- --------- --------- Net income $ 3,800 2,006 9,850 5,697 ========= ========= ========= =========
2 ConocoPhillips Houston, Texas 77079 Preliminary SELECTED FINANCIAL DATA
Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 INCOME FROM CONTINUING OPERATIONS Effective tax rate % 42.0 % 45.1 41.8 44.3 Millions of Dollars FOREIGN CURRENCY GAINS (LOSSES) AFTER-TAX E&P $ 2 (4) 6 15 Midstream - - 7 - R&M (13) (5) (49) 1 LUKOIL Investment (1) - (1) - Chemicals - - - - Emerging Businesses - (1) - - Corporate and other (23) 15 (27) 21 -------- -------- -------- -------- $ (35) 5 (64) 37 ======== ======== ======== ======== CASH FLOWS FROM OPERATING ACTIVITIES Income from continuing operations $ 3,804 2,011 9,858 5,627 Depreciation, depletion and amortization 1,049 938 3,075 2,768 Property impairments - 12 31 63 Dry hole costs and leasehold impairment 55 150 211 342 Accretion on discounted liabilities 46 49 135 126 Deferred income taxes 261 328 753 998 Undistributed equity earnings (463) (263) (1,682) (541) Net (gain) loss on asset dispositions (22) 6 (264) (82) Other 192 (30) 1 105 Working capital changes 1,177 1,267 841 (611) -------- -------- -------- -------- Net cash provided by continuing operations 6,099 4,468 12,959 8,795 Net cash provided by (used in) discontinued operations (3) (55) (6) (33) -------- -------- -------- -------- Net cash provided by operating activities $ 6,096 4,413 12,953 8,762 ======== ======== ======== ======== CAPITAL EXPENDITURES AND INVESTMENTS E&P United States $ 323 332 1,221 946 International 1,152 916 3,797 2,751 -------- -------- -------- -------- 1,475 1,248 5,018 3,697 Midstream 838 1 839 6 R&M 440 277 1,075 770 LUKOIL Investment 815 - 1,523 - Chemicals - - - - Emerging Businesses 2 19 5 74 Corporate and other* 56 49 113 112 -------- -------- -------- -------- $ 3,626 1,594 8,573 4,659 ======== ======== ======== ======== *Excludes discontinued operations OTHER At September 30, 2005 At December 31, 2004 Total debt $13,497 15,002 Common stockholders' equity $49,838 42,723
3 ConocoPhillips Houston, Texas 77079 Preliminary OPERATING HIGHLIGHTS BY SEGMENT
Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 Thousands of Barrels Daily E&P Crude oil produced United States Alaska 281 253 296 293 Lower 48 56 50 60 51 -------- -------- -------- -------- 337 303 356 344 Norway 198 189 200 205 United Kingdom 56 59 59 64 Canada 22 24 23 25 China 22 25 23 28 Indonesia 10 14 16 15 Vietnam 30 35 27 32 Timor Sea 38 29 32 17 Other 53 55 54 60 -------- -------- -------- -------- Total consolidated 766 733 790 790 Equity affiliates 124 111 122 109 -------- -------- -------- -------- Total Worldwide 890 844 912 899 ======== ======== ======== ======== Syncrude 21 22 19 22 ======== ======== ======== ======== Natural gas liquids produced United States Alaska* 18 19 19 23 Lower 48 30 26 30 25 -------- -------- -------- -------- 48 45 49 48 Norway 10 8 9 8 Canada 10 10 10 11 Timor Sea 20 14 15 6 Other 4 10 5 8 -------- -------- -------- -------- Total Worldwide 92 87 88 81 ======== ======== ======== ======== * Includes reinjected volumes sold lease-to-lease. 8 10 7 14 Millions of Cubic Feet Daily Natural gas produced* United States Alaska 173 164 169 166 Lower 48 1,218 1,220 1,194 1,226 -------- -------- -------- -------- 1,391 1,384 1,363 1,392 Norway 259 274 275 299 United Kingdom 588 720 717 807 Canada 429 425 422 430 Timor Sea 35 35 35 35 Indonesia 303 248 288 244 Vietnam 20 15 17 16 Other 74 78 77 75 -------- -------- -------- -------- Total consolidated 3,099 3,179 3,194 3,298 Equity affiliates 10 4 8 5 -------- -------- -------- -------- Total Worldwide 3,109 3,183 3,202 3,303 ======== ======== ======== ======== * Represents quantities available for sale. Excludes gas equivalent of NGL shown above. Liquefied natural gas sales 123 115 117 105 LUKOIL Investment Production (MBOE/D)* 266 - 231 - Refinery crude oil throughput (MB/D)* 138 - 110 - * Represents our estimated net share of LUKOIL.
4 ConocoPhillips Houston, Texas 77079 Preliminary OPERATING HIGHLIGHTS
Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 E&P Per Unit Average sales prices Crude oil (per barrel) United States Alaska $ 58.70 40.48 50.54 36.41 Lower 48 50.00 39.56 44.83 35.21 Total U.S. 57.31 40.33 49.59 36.23 International 59.52 40.47 51.46 35.64 Total consolidated 58.49 40.41 50.61 35.90 Equity affiliates 45.25 26.19 37.45 23.43 Total Worldwide 56.64 38.78 48.80 34.40 Natural gas-lease (per MCF) United States Alaska 2.57 2.22 2.66 2.38 Lower 48 7.67 5.29 6.53 5.26 Total U.S. 7.48 5.19 6.40 5.14 International 5.60 3.98 5.25 3.97 Total consolidated 6.40 4.48 5.71 4.44 Equity affiliates 0.20 0.31 0.25 2.59 Total Worldwide 6.38 4.48 5.70 4.44 Midstream Thousands of Barrels Daily Natural gas liquids extracted Consolidated United States 23 28 22 35 International 5 49 34 43 Equity affiliates United States* 171 111 131 111 International 6 6 6 6 --------- --------- --------- --------- 205 194 193 195 ========= ========= ========= ========= * Represents 30.3 percent interest in Duke Energy Field Services LLC (DEFS), through June 30, 2005, and 50 percent interest beginning in July 2005. Per Barrel U.S. product prices Weighted average NGL** Consolidated $ 39.60 31.03 34.68 27.71 DEFS 38.31 30.27 33.42 26.90 **Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural-gas-liquids component and location mix.
5 ConocoPhillips Houston, Texas 77079
Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 Thousands of Barrels Daily R&M United States Crude oil capacity 2,182 2,160 2,179 2,165 Crude oil runs 2,040 2,011 2,044 2,078 Refinery production 2,223 2,198 2,238 2,248 International* Crude oil capacity 428 428 428 441 Crude oil runs 431 425 420 381 Refinery production 448 439 434 389 U.S. Petroleum products outside sales Gasoline 1,397 1,366 1,376 1,337 Distillates 725 544 683 551 Aviation fuels 203 200 205 190 Other products 526 553 518 548 -------- -------- -------- -------- 2,851 2,663 2,782 2,626 International 470 472 481 470 -------- -------- -------- -------- 3,321 3,135 3,263 3,096 ======== ======== ======== ======== Per Gallon U.S. Average sales prices** Automotive gasoline-wholesale $ 2.00 1.37 1.71 1.31 Automotive gasoline-retail 2.14 1.51 1.86 1.48 Distillates-wholesale 1.97 1.30 1.71 1.18
* Includes ConocoPhillips' share of equity affiliates. ** Excludes excise taxes. 6 EX-99.3 4 a5003527ex99_3.txt EXHIBIT 99.3 Exhibit 99.3
SUMMARY OF NET INCOME (LOSS) BY SEGMENT Millions of Dollars ---------------------------------------------------------------------------------- 2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- Income (Loss) from Continuing Operations Before Accounting Changes U.S. E&P 635 671 701 935 2,942 892 966 1,107 2,965 International E&P 622 683 719 736 2,760 895 963 1,181 3,039 - -------------------------------------------------------------------------- --------------------------------------- Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 2,288 6,004 - -------------------------------------------------------------------------- --------------------------------------- Midstream 55 42 38 100 235 385 68 88 541 - -------------------------------------------------------------------------- --------------------------------------- U.S. R&M 403 734 505 484 2,126 570 936 1,096 2,602 International R&M 61 84 203 269 617 130 174 294 598 - -------------------------------------------------------------------------- --------------------------------------- Total R&M 464 818 708 753 2,743 700 1,110 1,390 3,200 - -------------------------------------------------------------------------- --------------------------------------- LUKOIL Investment - - - 74 74 110 148 267 525 Chemicals 39 46 81 83 249 133 63 13 209 Emerging Businesses (22) (29) (27) (24) (102) (8) (8) - (16) Corporate and Other (190) (218) (209) (177) (794) (184) (179) (242) (605) - -------------------------------------------------------------------------- --------------------------------------- Consolidated 1,603 2,013 2,011 2,480 8,107 2,923 3,131 3,804 9,858 ========================================================================== ======================================= Cumulative Effect of Accounting Changes U.S. E&P - - - - - - - - - International E&P - - - - - - - - - - -------------------------------------------------------------------------- --------------------------------------- Total E&P - - - - - - - - - - -------------------------------------------------------------------------- --------------------------------------- Midstream - - - - - - - - - - -------------------------------------------------------------------------- --------------------------------------- U.S. R&M - - - - - - - - - International R&M - - - - - - - - - - -------------------------------------------------------------------------- --------------------------------------- Total R&M - - - - - - - - - - -------------------------------------------------------------------------- --------------------------------------- LUKOIL Investment - - - - - - - - - Chemicals - - - - - - - - - Emerging Businesses - - - - - - - - - Corporate and Other - - - - - - - - - - -------------------------------------------------------------------------- --------------------------------------- Consolidated - - - - - - - - - ========================================================================== ======================================= Income (Loss) from Discontinued Operations Corporate and Other 13 62 (5) (48) 22 (11) 7 (4) (8) ========================================================================== ======================================= Net Income (Loss) U.S. E&P 635 671 701 935 2,942 892 966 1,107 2,965 International E&P 622 683 719 736 2,760 895 963 1,181 3,039 - -------------------------------------------------------------------------- --------------------------------------- Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 2,288 6,004 - -------------------------------------------------------------------------- --------------------------------------- Midstream 55 42 38 100 235 385 68 88 541 - -------------------------------------------------------------------------- --------------------------------------- U.S. R&M 403 734 505 484 2,126 570 936 1,096 2,602 International R&M 61 84 203 269 617 130 174 294 598 - -------------------------------------------------------------------------- --------------------------------------- Total R&M 464 818 708 753 2,743 700 1,110 1,390 3,200 - -------------------------------------------------------------------------- --------------------------------------- LUKOIL Investment - - - 74 74 110 148 267 525 Chemicals 39 46 81 83 249 133 63 13 209 Emerging Businesses (22) (29) (27) (24) (102) (8) (8) - (16) Corporate and Other (177) (156) (214) (225) (772) (195) (172) (246) (613) - -------------------------------------------------------------------------- --------------------------------------- Consolidated 1,616 2,075 2,006 2,432 8,129 2,912 3,138 3,800 9,850 ========================================================================== =======================================
Page 1 of 11
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Millions of Dollars ----------------------------------------------------------------------------------- 2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- Income from Continuing Operations Before Income Taxes U.S. E&P 987 1,049 1,057 1,433 4,526 1,388 1,504 1,728 4,620 International E&P 1,410 1,360 1,654 1,684 6,108 2,020 2,152 2,567 6,739 - --------------------------------------------------------------------------- --------------------------------------- Total E&P 2,397 2,409 2,711 3,117 10,634 3,408 3,656 4,295 11,359 - --------------------------------------------------------------------------- --------------------------------------- Midstream 86 66 62 158 372 449 107 138 694 - --------------------------------------------------------------------------- --------------------------------------- U.S. R&M 636 1,149 803 772 3,360 901 1,485 1,766 4,152 International R&M 79 111 268 356 814 160 203 368 731 - --------------------------------------------------------------------------- --------------------------------------- Total R&M 715 1,260 1,071 1,128 4,174 1,061 1,688 2,134 4,883 - --------------------------------------------------------------------------- --------------------------------------- LUKOIL Investment - - - 74 74 115 153 275 543 Chemicals 49 56 99 109 313 187 84 (3) 268 Emerging Businesses (34) (42) (44) (34) (154) (13) (13) (2) (28) Corporate and Other (249) (279) (239) (277) (1,044) (267) (243) (283) (793) - --------------------------------------------------------------------------- --------------------------------------- Consolidated 2,964 3,470 3,660 4,275 14,369 4,940 5,432 6,554 16,926 =========================================================================== ======================================= Income from Continuing Operations Effective Tax Rates U.S. E&P 35.7% 36.0% 33.7% 34.8% 35.0% 35.7% 35.8% 35.9% 35.8% International E&P 55.9% 49.8% 56.5% 56.3% 54.8% 55.7% 55.3% 54.0% 54.9% - --------------------------------------------------------------------------- --------------------------------------- Total E&P 47.6% 43.8% 47.6% 46.4% 46.4% 47.6% 47.2% 46.7% 47.1% - --------------------------------------------------------------------------- --------------------------------------- Midstream 36.0% 36.4% 38.7% 36.7% 36.8% 14.3% 36.4% 36.2% 22.0% - --------------------------------------------------------------------------- --------------------------------------- U.S. R&M 36.6% 36.1% 37.1% 37.3% 36.7% 36.7% 37.0% 37.9% 37.3% International R&M 22.8% 24.3% 24.3% 24.4% 24.2% 18.8% 14.3% 20.1% 18.2% - --------------------------------------------------------------------------- --------------------------------------- Total R&M 35.1% 35.1% 33.9% 33.2% 34.3% 34.0% 34.2% 34.9% 34.5% - --------------------------------------------------------------------------- --------------------------------------- LUKOIL Investment n/a n/a n/a 0.0% 0.0% 4.3% 3.3% 2.9% 3.3% Chemicals 20.4% 17.9% 18.2% 23.9% 20.4% 28.9% 25.0% -- 22.0% Emerging Businesses 35.3% 31.0% 38.6% 29.4% 33.8% 38.5% 38.5% -- 42.9% Corporate and Other 23.7% 21.9% 12.6% 36.1% 23.9% 31.1% 26.3% 14.5% 23.7% - --------------------------------------------------------------------------- --------------------------------------- Consolidated 45.9% 42.0% 45.1% 42.0% 43.6% 40.8% 42.4% 42.0% 41.8% =========================================================================== =======================================
Page 2 of 11
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX) Millions of Dollars ----------------------------------------------------------------------------------- 2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- U.S. E&P Gain (loss) on asset sales - - - - - 90 - - 90 Property impairments (3) - - (9) (12) - - - - Tax credit utilization - - 22 28 50 - - - - Insurance premium adjustment - - - (17) (17) - (5) (4) (9) Pending claims and settlements - - - - - - 15 - 15 - ----------------------------------------------------------------------------- --------------------------------------- Total (3) - 22 2 21 90 10 (4) 96 - ----------------------------------------------------------------------------- --------------------------------------- International E&P Gain (loss) on asset sales 56 (13) - - 43 - 15 - 15 Property impairments - - (1) (29) (30) - - - - Insurance premium adjustment - - - (17) (17) - (10) (12) (22) Canada tax law change - 31 - 41 72 - - - - Pending claims and settlements - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Total 56 18 (1) (5) 68 - 5 (12) (7) - ----------------------------------------------------------------------------- --------------------------------------- Total E&P 53 18 21 (3) 89 90 15 (16) 89 - ----------------------------------------------------------------------------- --------------------------------------- Midstream Property impairments (12) (10) - - (22) (6) (7) - (13) DEFS' sale of TEPPCO general partnership - - - - - 306 - - 306 - ----------------------------------------------------------------------------- --------------------------------------- Total (12) (10) - - (22) 300 (7) - 293 - ----------------------------------------------------------------------------- --------------------------------------- U.S. R&M Gain (loss) on asset sales - - - - - 31 - - 31 Property impairments (5) - (6) (28) (39) - - - - Insurance premium adjustment - - - (6) (6) - (7) (9) (16) Discontinuation of a marketing incentive program - - - - - - - (16) (16) Pending claims and settlements - - (34) - (34) - - - - - ----------------------------------------------------------------------------- --------------------------------------- Total (5) - (40) (34) (79) 31 (7) (25) (1) - ----------------------------------------------------------------------------- --------------------------------------- International R&M Gain (loss) on asset sales - - - - - - 25 - 25 Property impairments - - - - - - - - - Other - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Total - - - - - - 25 - 25 - ----------------------------------------------------------------------------- --------------------------------------- Total R&M (5) - (40) (34) (79) 31 18 (25) 24 - ----------------------------------------------------------------------------- --------------------------------------- LUKOIL Investment - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Total - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Chemicals - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Total - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Emerging Businesses - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Total - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Corporate and Other Property impairments - - - - - - - - - Merger-related expenses (14) - - - (14) - - - - Premium on early debt retirement - - (43) - (43) (8) - (42) (50) Other - - - - - - - - - - ----------------------------------------------------------------------------- --------------------------------------- Total (14) - (43) - (57) (8) - (42) (50) - ----------------------------------------------------------------------------- --------------------------------------- Total Company 22 8 (62) (37) (69) 413 26 (83) 356 ============================================================================= =======================================
Page 3 of 11 CASH FLOW INFORMATION
Millions of Dollars --------------------------------------------------------------------------------- 2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- Cash Flows from Operating Activities Income from continuing operations 1,603 2,013 2,011 2,480 8,107 2,923 3,131 3,804 9,858 DD&A and property impairments 949 932 950 1,131 3,962 1,063 994 1,049 3,106 Dry hole costs and leasehold impairments 87 105 150 75 417 109 47 55 211 Accretion on discounted liabilities 36 41 49 45 171 48 41 46 135 Deferred income taxes 360 310 328 27 1,025 123 369 261 753 Undistributed equity earnings (181) (97) (263) (236) (777) (805) (414) (463) (1,682) Net (gain) loss on asset dispositions (82) (6) 6 (34) (116) (177) (65) (22) (264) Other 70 65 (30) (295) (190) (78) (113) 192 1 Net working capital changes (777) (1,101) 1,267 10 (601) 888 (1,224) 1,177 841 Discontinued operations 8 14 (55) (6) (39) (5) 2 (3) (6) - ------------------------------------------------------------------------------------------ --------------------------------------- Net Cash Provided by Operating Activities 2,073 2,276 4,413 3,197 11,959 4,089 2,768 6,096 12,953 - ------------------------------------------------------------------------------------------ --------------------------------------- Cash Flows from Investing Activities Capital expenditures and investments: E&P (1,210) (1,239) (1,248) (1,552) (5,249) (1,206) (2,337)(1,475) (5,018) Midstream (3) (2) (1) (1) (7) (1) - (838) (839) R&M (215) (278) (277) (574) (1,344) (275) (360) (440) (1,075) LUKOIL Investment - - - (2,649) (2,649) (324) (384) (815) (1,523) Chemicals - - - - - - - - - Emerging Businesses (28) (27) (19) (1) (75) 4 (7) (2) (5) Corporate and Other (25) (38) (49) (60) (172) (20) (37) (56) (113) - ------------------------------------------------------------------------------------------ --------------------------------------- Total capital expend. & investments (1,481) (1,584) (1,594) (4,837) (9,496) (1,822) (3,125)(3,626) (8,573) Acquisitions - adoption & application of FIN 46 - - 11 - 11 - - - - Proceeds from asset dispositions 449 905 73 164 1,591 87 221 300 608 Long-term advances to/collections from affiliates and other investments (44) 9 30 112 107 25 4 (58) (29) Discontinued operations (1) (1) - 1 (1) - - - - - ------------------------------------------------------------------------------------------ --------------------------------------- Net Cash Used for Investing Activities (1,077) (671) (1,480) (4,560) (7,788) (1,710) (2,900)(3,384) (7,994) - ------------------------------------------------------------------------------------------ --------------------------------------- Cash Flows from Financing Activities Net issuance (repayment) of debt (722) (1,361) (221) (471) (2,775) (986) (13) (513) (1,512) Issuance of stock 112 95 62 161 430 155 108 114 377 Repurchase of stock - - - - - (194) (382) (588) (1,164) Dividends (294) (296) (296) (346) (1,232) (348) (432) (430) (1,210) Other 89 94 (66) 61 178 64 33 (11) 86 - ------------------------------------------------------------------------------------------ --------------------------------------- Net Cash Provided by (Used for) Financing Activities (815) (1,468) (521) (595) (3,399) (1,309) (686)(1,428) (3,423) - ------------------------------------------------------------------------------------------ --------------------------------------- Effect of Exchange Rate Changes (12) 8 47 82 125 (36) (62) (22) (120) - ------------------------------------------------------------------------------------------ --------------------------------------- Net Change in Cash and Cash Equivalents 169 145 2,459 (1,876) 897 1,034 (880) 1,262 1,416 Cash and cash equivalents at beginning of period 490 659 804 3,263 490 1,387 2,421 1,541 1,387 - ------------------------------------------------------------------------------------------ --------------------------------------- Cash and Cash Equivalents at End of Period 659 804 3,263 1,387 1,387 2,421 1,541 2,803 2,803 ========================================================================================== =======================================
Page 4 of 11 TOTAL E&P
2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- E&P Net Income ($ Millions) 1,257 1,354 1,420 1,671 5,702 1,787 1,929 2,288 6,004 ====================================================================================== ======================================= Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 1,611 1,563 1,484 1,596 1,563 1,600 1,537 1,521 1,553 - -------------------------------------------------------------------------------------- --------------------------------------- E&P segment plus LUKOIL Investment segment: 1,611 1,563 1,484 1,755 1,603 1,801 1,760 1,787 1,784 - -------------------------------------------------------------------------------------- --------------------------------------- Crude Oil and Condensate (MB/D) Consolidated 828 809 733 821 797 822 780 766 790 Equity affiliates 113 104 111 103 108 120 123 124 122 - -------------------------------------------------------------------------------------- --------------------------------------- Total 941 913 844 924 905 942 903 890 912 ====================================================================================== ======================================= Sales of crude oil produced (MB/D) 927 888 875 903 898 940 932 883 918 - -------------------------------------------------------------------------------------- --------------------------------------- Natural Gas Liquids (MB/D) 76 79 87 92 84 94 80 92 88 - -------------------------------------------------------------------------------------------------------------------------------- Natural Gas (MMCF/D) Consolidated 3,415 3,299 3,179 3,356 3,312 3,295 3,191 3,099 3,194 Equity affiliates 9 4 4 4 5 5 7 10 8 - -------------------------------------------------------------------------------------- --------------------------------------- Total 3,424 3,303 3,183 3,360 3,317 3,300 3,198 3,109 3,202 ====================================================================================== ======================================= Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 21 19 - -------------------------------------------------------------------------------------- --------------------------------------- Industry Prices (Platt's) Crude Oil ($/bbl) WTI spot 35.23 38.31 43.86 48.29 41.42 49.70 53.03 63.05 55.26 Brent dated 31.95 35.36 41.54 44.00 38.21 47.50 51.59 61.54 53.54 Natural Gas--Henry Hub 1st of month ($/mcf) 5.69 6.00 5.75 7.07 6.13 6.27 6.74 8.53 7.18 - -------------------------------------------------------------------------------------- --------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated 32.08 35.32 40.41 42.79 37.65 44.89 48.88 58.49 50.61 Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 45.25 37.45 Total 30.44 34.17 38.78 40.96 36.06 43.15 46.93 56.64 48.80 - -------------------------------------------------------------------------------------- --------------------------------------- Natural Gas Liquids ($/bbl) 25.43 26.71 30.73 35.37 30.02 33.44 35.10 41.54 36.76 - -------------------------------------------------------------------------------------- --------------------------------------- Natural Gas ($/mcf) Consolidated 4.41 4.43 4.48 5.13 4.62 5.24 5.53 6.40 5.71 Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.20 0.25 Total 4.41 4.43 4.48 5.13 4.61 5.24 5.52 6.38 5.70 - -------------------------------------------------------------------------------------- --------------------------------------- Exploration Charges ($ Millions) Dry Holes 67 42 82 51 242 88 30 32 150 Lease Impairments 20 63 68 24 175 20 18 23 61 - -------------------------------------------------------------------------------------- --------------------------------------- Total Non-Cash Charges 87 105 150 75 417 108 48 55 211 Other (G&G and Lease Rentals) 56 58 55 117 286 63 73 85 221 - -------------------------------------------------------------------------------------- --------------------------------------- Total Exploration Charges 143 163 205 192 703 171 121 140 432 ====================================================================================== ======================================= Depreciation, Depletion and Amortization (DD&A) ($ Millions) 704 720 711 783 2,918 819 755 823 2,397 - -------------------------------------------------------------------------------------- ---------------------------------------
Page 5 of 11 U.S. E&P
2004 2005 ---------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- --------------------------------------- U.S. E&P Net Income ($ Millions) 635 671 701 935 2,942 892 966 1,107 2,965 ========================================================================================== ======================================= Alaska ($ Millions) 403 397 451 581 1,832 532 572 730 1,834 - ------------------------------------------------------------------------------------------ --------------------------------------- Lower 48 ($ Millions) 232 274 250 354 1,110 360 394 377 1,131 - ------------------------------------------------------------------------------------------ --------------------------------------- Production Total U.S. (MBOE/D) 659 637 579 642 629 648 631 617 632 - ------------------------------------------------------------------------------------------ --------------------------------------- Crude Oil and Condensate (MB/D) Alaska 320 307 253 313 298 309 297 281 296 Lower 48 53 52 50 50 51 62 63 56 60 - ------------------------------------------------------------------------------------------ --------------------------------------- Total 373 359 303 363 349 371 360 337 356 ========================================================================================== ======================================= Sales of crude oil produced (MB/D) 373 354 312 356 349 386 352 352 363 - ------------------------------------------------------------------------------------------ --------------------------------------- Natural Gas Liquids (MB/D)* Alaska 26 23 19 24 23 24 16 18 19 Lower 48 24 26 26 26 26 27 31 30 30 - ------------------------------------------------------------------------------------------ --------------------------------------- Total 50 49 45 50 49 51 47 48 49 ========================================================================================== ======================================= *Includes reinjection volumes sold lease-to-lease: 16 15 10 14 14 13 1 8 7 - ------------------------------------------------------------------------------------------ --------------------------------------- Natural Gas (MMCF/D) Alaska 185 147 164 163 165 185 148 173 169 Lower 48 1,233 1,226 1,220 1,214 1,223 1,169 1,195 1,218 1,194 - ------------------------------------------------------------------------------------------ --------------------------------------- Total 1,418 1,373 1,384 1,377 1,388 1,354 1,343 1,391 1,363 ========================================================================================== ======================================= Average Realized Prices Crude Oil and Condensate ($/bbl) Alaska North Slope 28.00 31.69 35.66 39.53 33.61 38.93 43.92 53.30 45.24 - ------------------------------------------------------------------------------------------ --------------------------------------- West Coast 32.93 36.53 40.48 44.37 38.47 44.15 49.22 58.70 50.54 - ------------------------------------------------------------------------------------------ --------------------------------------- Lower 48 31.86 34.39 39.56 42.30 36.95 41.29 43.58 50.00 44.83 - ------------------------------------------------------------------------------------------ --------------------------------------- Total U.S. 32.78 36.22 40.33 44.08 38.25 43.69 48.21 57.31 49.59 - ------------------------------------------------------------------------------------------ --------------------------------------- Natural Gas Liquids ($/bbl) Alaska 32.93 36.38 40.52 43.78 38.64 44.33 49.20 57.11 49.86 - ------------------------------------------------------------------------------------------ --------------------------------------- Lower 48 24.19 25.82 29.40 32.80 28.14 30.96 31.22 39.92 34.16 - ------------------------------------------------------------------------------------------ --------------------------------------- Total U.S. 26.80 28.38 32.22 36.21 31.05 34.68 37.26 43.95 38.64 - ------------------------------------------------------------------------------------------ --------------------------------------- Natural Gas ($/mcf) Alaska 2.54 2.31 2.22 2.23 2.35 2.96 2.49 2.57 2.66 - ------------------------------------------------------------------------------------------ --------------------------------------- Lower 48 5.00 5.49 5.29 6.04 5.46 5.66 6.20 7.67 6.53 - ------------------------------------------------------------------------------------------ --------------------------------------- Total U.S. 4.88 5.35 5.19 5.92 5.33 5.57 6.07 7.48 6.40 - ------------------------------------------------------------------------------------------ --------------------------------------- Kenai, Alaska LNG Sales Volume (MMCF/D) 118 82 115 107 105 132 96 123 117 - ------------------------------------------------------------------------------------------ --------------------------------------- Sales price per MCF 4.51 4.80 5.06 5.25 4.90 5.27 5.24 5.90 5.48 - ------------------------------------------------------------------------------------------ --------------------------------------- U.S. Exploration Charges ($ Millions) Dry Holes 32 32 (5) - 59 74 8 (2) 80 Lease Impairments 11 11 10 10 42 10 9 9 28 - ------------------------------------------------------------------------------------------ --------------------------------------- Total Non-Cash Charges 43 43 5 10 101 84 17 7 108 Other (G&G and Lease Rentals) 15 19 15 37 86 12 17 19 48 - ------------------------------------------------------------------------------------------ --------------------------------------- Total U.S. Exploration Charges 58 62 20 47 187 96 34 26 156 ========================================================================================== ======================================= Alaska Only 17 43 7 14 81 85 13 11 109 - ------------------------------------------------------------------------------------------ --------------------------------------- DD&A ($ Millions) Alaska 119 125 122 144 510 133 134 126 393 Lower 48 146 145 157 150 598 219 172 243 634 - ------------------------------------------------------------------------------------------ --------------------------------------- Total U.S. 265 270 279 294 1,108 352 306 369 1,027 ========================================================================================== =======================================
Page 6 of 11 INTERNATIONAL E&P
2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- International E&P Net Income ($ Millions) 622 683 719 736 2,760 895 963 1,181 3,039 ======================================================================================= ======================================= Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 952 926 905 954 934 952 906 904 921 - --------------------------------------------------------------------------------------- --------------------------------------- Crude Oil and Condensate (MB/D) Consolidated Norway 215 212 189 211 207 207 195 198 200 United Kingdom 67 64 59 66 64 61 60 56 59 Canada 27 25 24 24 25 23 23 22 23 China 32 28 25 17 25 22 25 22 23 Indonesia 15 14 14 18 15 21 16 10 16 Vietnam 31 31 35 33 33 27 26 30 27 Timor Sea 5 15 29 34 21 36 21 38 32 Other 63 61 55 55 58 54 54 53 54 Equity affiliates 113 104 111 103 108 120 123 124 122 - --------------------------------------------------------------------------------------- --------------------------------------- Total 568 554 541 561 556 571 543 553 556 ======================================================================================= ======================================= Sales of crude oil produced (MB/D) 554 534 563 547 549 554 580 531 555 - --------------------------------------------------------------------------------------- --------------------------------------- Natural Gas Liquids (MB/D) Norway 9 8 8 9 8 10 9 10 9 Canada 10 10 10 11 10 10 10 10 10 Timor Sea - 4 14 16 9 17 9 20 15 Other 7 8 10 6 8 6 5 4 5 - --------------------------------------------------------------------------------------- --------------------------------------- Total 26 30 42 42 35 43 33 44 39 ======================================================================================= ======================================= Natural Gas (MMCF/D) Consolidated Norway 319 303 274 306 301 298 268 259 275 United Kingdom 879 821 720 852 818 824 741 588 717 Canada 428 437 425 442 433 417 422 429 422 Timor Sea 40 32 35 35 35 35 35 35 35 Indonesia 248 237 248 266 250 273 287 303 288 Vietnam 17 15 15 19 16 18 14 20 17 Other 66 81 78 59 71 76 81 74 77 Equity affiliates 9 4 4 4 5 5 7 10 8 - --------------------------------------------------------------------------------------- --------------------------------------- Total 2,006 1,930 1,799 1,983 1,929 1,946 1,855 1,718 1,839 ======================================================================================= ======================================= Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 21 19 - --------------------------------------------------------------------------------------- --------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated Norway 32.13 34.72 40.70 41.82 37.55 45.52 50.21 60.42 52.11 United Kingdom 31.27 34.19 39.57 44.79 37.00 49.47 48.02 60.83 52.30 Canada 28.95 30.58 36.16 38.44 32.92 36.96 41.09 54.74 44.12 China 29.91 33.02 37.99 32.87 33.31 41.51 46.95 51.89 47.15 Indonesia 32.21 36.20 42.71 45.43 39.21 46.51 47.57 61.77 50.20 Vietnam 31.76 36.42 41.36 42.94 38.31 47.77 53.32 58.52 53.45 Timor Sea 35.49 37.32 46.65 45.95 43.91 47.99 50.90 59.03 52.97 Other 30.89 34.87 39.54 39.28 36.05 44.56 50.11 60.99 51.63 Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 45.25 37.45 Total 28.86 32.81 37.92 38.93 34.67 42.77 46.16 56.19 48.28 - --------------------------------------------------------------------------------------- --------------------------------------- Natural Gas Liquids ($/bbl) Norway 24.34 24.22 27.79 37.64 28.92 30.63 28.20 37.29 31.91 Canada 26.38 28.58 31.15 36.61 30.77 37.37 37.66 44.22 39.73 Timor Sea - 29.13 33.96 37.11 34.94 34.40 35.99 40.45 37.37 Other 18.43 18.03 22.76 19.64 19.99 21.34 22.30 26.63 23.09 Total 23.53 24.69 29.53 34.59 28.96 32.35 32.03 39.29 34.78 - --------------------------------------------------------------------------------------- --------------------------------------- Natural Gas ($/mcf) Consolidated Norway 4.37 3.99 4.12 4.45 4.24 5.03 5.30 5.13 5.15 United Kingdom 4.04 3.47 3.79 4.76 4.03 5.54 5.01 4.92 5.18 Canada 4.88 5.01 4.64 5.43 5.00 5.33 6.14 7.54 6.36 Timor Sea 0.43 0.45 0.46 0.49 0.46 0.52 0.52 0.56 0.53 Indonesia 4.38 4.28 5.02 4.74 4.61 5.08 5.96 6.73 5.96 Vietnam 1.10 0.99 1.01 1.05 1.04 1.04 1.04 1.05 1.04 Other 0.66 0.59 0.62 0.97 0.69 0.70 0.59 0.66 0.65 Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.20 0.25 Total 4.11 3.81 3.98 4.63 4.14 5.03 5.15 5.57 5.24 - --------------------------------------------------------------------------------------- --------------------------------------- International Exploration Charges ($ Millions) Dry Holes 35 10 87 51 183 14 22 34 70 Lease Impairments 9 52 58 14 133 10 9 14 33 - --------------------------------------------------------------------------------------- --------------------------------------- Total Non-Cash Charges 44 62 145 65 316 24 31 48 103 Other (G&G and Lease Rentals) 41 39 40 80 200 51 56 66 173 - --------------------------------------------------------------------------------------- --------------------------------------- Total International Exploration Charges 85 101 185 145 516 75 87 114 276 ======================================================================================= ======================================= DD&A ($ Millions) 439 450 432 489 1,810 467 449 454 1,370 - --------------------------------------------------------------------------------------- ---------------------------------------
Page 7 of 11 R&M
2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- R&M Net Income ($ Millions) 464 818 708 753 2,743 700 1,110 1,390 3,200 ======================================================================================== ======================================= United States ($ Millions) 403 734 505 484 2,126 570 936 1,096 2,602 - ---------------------------------------------------------------------------------------- --------------------------------------- International ($ Millions) 61 84 203 269 617 130 174 294 598 - ---------------------------------------------------------------------------------------- --------------------------------------- Market Indicators U.S. East Coast Crack Spread ($/bbl) 6.87 9.14 7.00 5.73 7.19 6.40 8.80 14.81 10.00 U.S. Gulf Coast Crack Spread ($/bbl) 6.36 9.17 6.33 4.09 6.49 6.37 9.63 17.42 11.14 U.S. Group Central Crack Spread ($/bbl) 6.91 11.65 8.09 5.52 8.04 7.92 11.51 17.06 12.16 U.S. West Coast Crack Spread ($/bbl) 16.10 24.13 17.92 17.25 18.85 19.61 22.20 26.61 22.81 U.S. Weighted 3:2:1 Crack Spread ($/bbl) 8.39 12.60 9.10 7.24 9.33 9.24 12.35 18.51 13.37 NW Europe Crack Spread ($/bbl) 7.78 10.43 11.76 15.24 11.30 11.14 15.09 16.53 14.25 Singapore 3:2:1 Crack Spread ($/bbl) 10.33 9.48 13.11 17.22 12.54 13.23 13.95 16.70 14.63 U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.69 1.83 1.50 1.97 1.50 0.16 2.20 0.42 0.92 - ---------------------------------------------------------------------------------------- --------------------------------------- Realized Margins Refining Margin ($/bbl) U.S. 7.12 9.88 8.84 8.38 8.56 10.11 11.23 14.61 12.01 International* 4.51 6.57 8.36 10.03 7.56 8.26 8.79 10.44 9.19 - ---------------------------------------------------------------------------------------- --------------------------------------- Marketing Margin ($/bbl) U.S. 1.08 1.49 1.15 1.85 1.39 0.46 2.01 0.18 0.87 International 6.50 8.20 7.69 8.13 7.66 5.61 8.56 6.80 7.02 - ---------------------------------------------------------------------------------------- --------------------------------------- * 2004 and first-quarter 2005 amounts restated to include equity affiliates. DD&A ($ Millions) 186 172 202 212 772 194 197 197 588 - ---------------------------------------------------------------------------------------- --------------------------------------- Turnaround Expense ($ Millions) 59 78 57 73 267 108 106 53 267 - ---------------------------------------------------------------------------------------- --------------------------------------- Eastern U.S. Crude Oil Charge Input (MB/D) 413 375 368 346 375 403 414 409 409 Total Charge Input (MB/D) 440 421 415 407 421 449 454 456 453 Crude Oil Capacity Utilization (%) 96% 87% 87% 82% 88% 95% 98% 97% 97% Clean Product Yield (%) 87% 84% 87% 90% 87% 92% 88% 89% 90% - ---------------------------------------------------------------------------------------- --------------------------------------- U.S. Gulf Coast Crude Oil Charge Input (MB/D) 699 709 617 689 678 659 715 596 657 Total Charge Input (MB/D) 774 789 717 779 765 733 835 674 746 Crude Oil Capacity Utilization (%) 97% 99% 88% 98% 96% 92% 100% 83% 92% Clean Product Yield (%) 79% 75% 78% 82% 78% 73% 79% 80% 77% - ---------------------------------------------------------------------------------------- --------------------------------------- Central U.S. Crude Oil Charge Input (MB/D) 601 638 634 583 614 538 594 620 584 Total Charge Input (MB/D) 636 673 669 614 648 577 625 653 619 Crude Oil Capacity Utilization (%) 96% 102% 99% 91% 97% 84% 93% 97% 91% Clean Product Yield (%) 83% 83% 85% 84% 84% 86% 84% 85% 85% - ---------------------------------------------------------------------------------------- --------------------------------------- Western U.S. Crude Oil Charge Input (MB/D) 392 397 392 387 392 357 410 415 394 Total Charge Input (MB/D) 409 419 409 409 412 382 431 439 418 Crude Oil Capacity Utilization (%) 100% 101% 99% 98% 99% 90% 101% 102% 98% Clean Product Yield (%) 81% 81% 82% 83% 82% 80% 82% 79% 80% - ---------------------------------------------------------------------------------------- --------------------------------------- TOTAL UNITED STATES Crude Oil Charge Input (MB/D) 2,105 2,119 2,011 2,005 2,059 1,957 2,133 2,040 2,044 Total Charge Input (MB/D) 2,259 2,302 2,210 2,209 2,246 2,141 2,345 2,222 2,236 Crude Oil Capacity Utilization (%) 97% 98% 93% 93% 95% 90% 98% 93% 94% Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 83% 83% 83% - ---------------------------------------------------------------------------------------- --------------------------------------- Refined Products Production (MB/D) Gasoline 1,059 1,043 1,060 1,072 1,059 968 1,071 1,030 1,023 Distillates 604 591 574 619 597 599 655 640 631 Aviation Fuel 167 177 164 158 167 166 174 153 164 Other 415 489 400 383 422 414 449 400 420 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 2,245 2,300 2,198 2,232 2,245 2,147 2,349 2,223 2,238 ======================================================================================== ======================================= Petroleum Products Sales (MB/D) Gasoline 1,315 1,328 1,366 1,415 1,356 1,302 1,426 1,397 1,376 Distillates 570 538 544 562 553 642 680 725 683 Aviation Fuel 178 191 200 195 191 198 214 203 205 Other 517 573 553 613 564 461 566 526 518 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 2,580 2,630 2,663 2,785 2,664 2,603 2,886 2,851 2,782 ======================================================================================== =======================================
Page 8 of 11 R&M (continued)
2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- International - Consolidated - United Kingdom and Ireland Crude Oil Charge Input (MB/D) 289 197 291 298 269 294 259 289 280 Total Charge Input (MB/D) 299 216 300 308 280 307 266 305 293 Crude Oil Capacity Utilization (%) 94% 64% 100% 102% 90% 101% 89% 99% 96% Clean Product Yield (%) 84% 81% 83% 81% 82% 79% 76% 82% 79% - ---------------------------------------------------------------------------------------- --------------------------------------- International - Equity Affiliates - Net Share* Crude Oil Charge Input (MB/D) 120 112 134 140 127 134 143 142 140 Total Charge Input (MB/D) 121 113 138 145 130 137 147 145 143 Crude Oil Capacity Utilization (%) 87% 81% 99% 103% 92% 98% 105% 105% 103% Clean Product Yield (%) 82% 83% 81% 81% 82% 83% 82% 80% 81% - ---------------------------------------------------------------------------------------- --------------------------------------- TOTAL INTERNATIONAL Crude Oil Charge Input (MB/D) 409 309 425 438 396 428 402 431 420 Total Charge Input (MB/D) 420 329 438 453 410 444 413 450 436 Crude Oil Capacity Utilization (%) 92% 69% 99% 102% 91% 100% 94% 101% 98% Clean Product Yield (%) 84% 82% 82% 81% 82% 80% 78% 81% 80% - ---------------------------------------------------------------------------------------- --------------------------------------- Refined Products Production (MB/D) Gasoline 124 109 138 144 129 141 115 143 133 Distillates 181 136 190 190 174 186 178 191 185 Aviation Fuel 24 16 22 25 22 21 21 24 22 Other 81 57 89 94 80 95 96 90 94 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 410 318 439 453 405 443 410 448 434 ======================================================================================== ======================================= Petroleum Products Sales (MB/D) Gasoline 185 180 173 180 180 185 176 178 180 Distillates 228 184 207 222 210 221 212 216 216 Aviation Fuel 6 9 10 8 8 7 10 12 10 Other 82 67 82 83 79 82 79 64 75 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 501 440 472 493 477 495 477 470 481 ======================================================================================== ======================================= Worldwide - Including Net Share of Equity Affiliates Crude Oil Charge Input (MB/D) 2,514 2,428 2,436 2,443 2,455 2,385 2,535 2,471 2,464 Total Charge Input (MB/D) 2,679 2,631 2,648 2,662 2,656 2,585 2,758 2,672 2,672 Crude Oil Capacity Utilization (%) 96% 93% 94% 94% 94% 92% 97% 95% 95% Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 82% 83% 82% - ---------------------------------------------------------------------------------------- --------------------------------------- Refined Products Production (MB/D) Gasoline 1,183 1,152 1,198 1,216 1,188 1,109 1,186 1,173 1,156 Distillates 785 727 764 809 771 785 833 831 816 Aviation Fuel 191 193 186 183 189 187 195 177 186 Other 496 546 489 477 502 509 545 490 514 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 2,655 2,618 2,637 2,685 2,650 2,590 2,759 2,671 2,672 ======================================================================================== ======================================= Petroleum Products Sales (MB/D) Gasoline 1,500 1,508 1,539 1,595 1,536 1,487 1,602 1,575 1,556 Distillates 798 722 751 784 763 863 892 941 899 Aviation Fuel 184 200 210 203 199 205 224 215 215 Other 599 640 635 696 643 543 645 590 593 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 3,081 3,070 3,135 3,278 3,141 3,098 3,363 3,321 3,263 ================================================================================================================================== * Represents 18.75 percent interest in a refinery complex at Karlsruhe, Germany; 16.33 percent interest in two refineries in Kralupy and Litvinov, Czech Republic; and 47 percent interest in a refinery at Melaka, Malaysia.
Page 9 of 11 LUKOIL INVESTMENT
2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- LUKOIL Investment Net Income ($ Millions) - - - 74 74 110 148 267 525 ======================================================================================== ======================================= Upstream Production* Net crude oil production (MB/D) - - - 150 38 190 215 253 220 Net natural gas production (MMCF/D) - - - 51 13 67 50 79 65 BOE Total (MBOE/D) - - - 159 40 201 223 266 231 - ---------------------------------------------------------------------------------------------------------------------------------- * Represents our estimated net share of LUKOIL's production. Industry Prices Crude Oil ($/bbl) Urals crude (CIF Mediterranean) - - - 38.82 38.82 43.21 48.49 57.39 49.81 - ---------------------------------------------------------------------------------------- --------------------------------------- Downstream Refinery Throughput* Crude Processed (MB/D) - - - 77 19 92 102 138 110 - ---------------------------------------------------------------------------------------- --------------------------------------- * Represents our estimated net share of LUKOIL's crude processed. MIDSTREAM 2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- Midstream Net Income ($ Millions) 55 42 38 100 235 385 68 88 541 ======================================================================================== ======================================= U.S. Equity Affiliate ($ Millions)* 33 33 26 51 143 359 51 76 486 - ---------------------------------------------------------------------------------------- --------------------------------------- Natural Gas Liquids Extracted (MB/D) Consolidated United States 54 24 28 23 32 23 21 23 22 International 47 33 49 49 45 53 44 5 34 Equity Affiliates United States* 109 112 111 113 111 110 112 171 131 International 6 5 6 7 6 6 6 6 6 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 216 174 194 192 194 192 183 205 193 ======================================================================================== ======================================= * Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS), through June 30, 2005, and 50 percent interest beginning in July 2005. Natural Gas Liquids Fractionated (MB/D) United States* 158 144 145 140 147 149 131 123 135 International 63 43 62 62 58 64 55 15 44 - ---------------------------------------------------------------------------------------- --------------------------------------- Total 221 187 207 202 205 213 186 138 179 ======================================================================================== ======================================= * Excludes DEFS. Product Prices Weighted Average NGL ($/bbl)* Consolidated 25.68 26.42 31.03 34.40 29.38 31.95 32.49 39.60 34.68 DEFS 24.81 25.61 30.27 33.69 28.60 30.61 31.33 38.31 33.42 - ---------------------------------------------------------------------------------------- --------------------------------------- * Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas liquids component and location mix. DD&A ($ Millions) 13 9 11 10 43 9 8 7 24 - ---------------------------------------------------------------------------------------- --------------------------------------- CHEMICALS 2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- Chemicals Net Income (Loss) ($ Millions) 39 46 81 83 249 133 63 13 209 ======================================================================================== ======================================= Industry Margins (Cents/Lb)* Ethylene industry cash margin 9.38 10.70 8.27 12.22 10.14 18.11 12.76 8.78 13.22 HDPE industry contract sales margin 9.43 9.21 9.23 11.68 9.89 12.09 12.01 8.16 10.76 Styrene industry contract sales margin 13.06 13.33 13.73 13.40 13.38 13.91 13.63 12.44 13.33 - ---------------------------------------------------------------------------------------- --------------------------------------- * Prices, economics and views expressed by CMAI are strictly the opinion of CMAI and Purvin & Gertz and are based on information collected within the public sector and on assessments by CMAI and Purvin & Gertz staff utilizing reasonable care consistent with normal industry practice. CMAI and Purvin & Gertz make no guarantee or warranty and assume no liability as to their use.
Page 10 of 11 EMERGING BUSINESSES
2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- Emerging Businesses Net Income (Loss) ($ Millions) (22) (29) (27) (24) (102) (8) (8) - (16) ======================================================================================= ======================================= Detail of Net Income (Loss) ($ Millions) Technology Solutions (4) (4) (3) (7) (18) (2) (4) (5) (11) Gas-to-Liquids (9) (7) (9) (8) (33) (7) (7) (4) (18) Power (4) (16) (8) (3) (31) 2 9 17 28 Other (5) (2) (7) (6) (20) (1) (6) (8) (15) - --------------------------------------------------------------------------------------- --------------------------------------- Total (22) (29) (27) (24) (102) (8) (8) - (16) ======================================================================================= ======================================= CORPORATE AND OTHER 2004 2005 ----------------------------------------- --------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ----------------------------------------- --------------------------------------- Corporate and Other Net Income (Loss) ($ Millions) (177) (156) (214) (225) (772) (195) (172) (246) (613) ======================================================================================= ======================================= Detail of Net Income (Loss) ($ Millions) Net interest expense (113) (143) (149) (109) (514) (101) (84) (123) (308) Corporate overhead (48) (52) (51) (61) (212) (58) (46) (64) (168) Discontinued operations 13 62 (5) (48) 22 (11) 7 (4) (8) Merger-related costs (14) - - - (14) - - - - Accounting change - - - - - - - - - Other (15) (23) (9) (7) (54) (25) (49) (55) (129) - --------------------------------------------------------------------------------------- --------------------------------------- Total (177) (156) (214) (225) (772) (195) (172) (246) (613) ======================================================================================= ======================================= Before-Tax Net Interest Expense ($ Millions) Interest expense (260) (263) (222) (231) (976) (226) (219) (223) (668) Capitalized interest 115 104 121 90 430 88 91 102 281 Interest revenue 16 12 8 11 47 25 24 28 77 Receivables monetization related (1) (1) 3 1 2 (1) - - (1) Premium on early debt retirement - - (58) - (58) (9) - (50) (59) - --------------------------------------------------------------------------------------- --------------------------------------- (130) (148) (148) (129) (555) (123) (104) (143) (370) ======================================================================================= ======================================= Debt Total Debt ($ Millions) 17,109 15,619 15,486 15,002 15,002 14,012 14,013 13,497 13,497 Debt-to-Capital Ratio 32% 29% 28% 26% 26% 23% 22% 21% 21% - --------------------------------------------------------------------------------------- ---------------------------------------
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