-----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, RwtYIrsVHJyKmC4w7TP067Uugx5aGZWKFY78J5hKM3Om9mIEJWn9MccNYIxh+vA2 QHCTpNtGwArsx0vDHP6k1A== 0001157523-06-004084.txt : 20060426 0001157523-06-004084.hdr.sgml : 20060426 20060426095118 ACCESSION NUMBER: 0001157523-06-004084 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060426 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060426 DATE AS OF CHANGE: 20060426 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: 06779739 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 a5132488.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): April 26, 2006 ConocoPhillips (Exact name of registrant as specified in its charter) Delaware 001-32395 01-0562944 (State or other jurisdiction (Commission (I.R.S. Employer of 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 April 26, 2006, ConocoPhillips issued a press release announcing the company's financial and operating results for the quarter ended March 31, 2006. 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 April 26, 2006. 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 April 26, 2006 3 EXHIBIT INDEX Exhibit No. Description - --- ----------- 99.1 Press release issued by ConocoPhillips on April 26, 2006. 99.2 Financial and operational tables. 99.3 Supplemental financial information. 4 EX-99.1 2 a5132488-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 ConocoPhillips Reports First-Quarter Net Income of $3.3 Billion or $2.34 Per Diluted Share; Effectively reinvested 141 percent of net income HOUSTON--(BUSINESS WIRE)--April 26, 2006--ConocoPhillips (NYSE:COP): Earnings at a glance First Quarter - --------------------------------------------------------------------- 2006 2005 - --------------------------------------------------------------------- Income from continuing operations $3,291 million 2,923 million Loss from discontinued operations $ - (11) Net income $3,291 2,912 - --------------------------------------------------------------------- Diluted income per share Income from continuing operations(a) $ 2.34 2.06 Net income(a) $ 2.34 2.05 - --------------------------------------------------------------------- Revenues $ 47.9 billion 38.9 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 first-quarter net income of $3,291 million, or $2.34 per share, compared to $2,912 million, or $2.05 per share, for the same quarter in 2005. Total revenues were $47.9 billion, versus $38.9 billion a year ago. During the quarter, the company reinvested 141 percent of its net income into the development of oil and gas resources and its global refining business, excluding the acquisition of Burlington Resources. "We ended the quarter by successfully completing the acquisition of Burlington Resources and are pleased with the progress toward integrating the combined companies," said Jim Mulva, chairman and chief executive officer. "This transaction establishes ConocoPhillips as the leading natural gas producer in North America, with a portfolio comprised mainly of high-quality, long-life natural gas reserves. "In addition, we finalized the acquisition of the Wilhelmshaven, Germany, refinery, in line with our strategy to expand our global refining presence. We also advanced plans to upgrade the refinery to allow it to process higher sulfur crude oil into an array of more valuable light-end products. "With respect to our upstream operating performance, we produced 1.93 million BOE per day, including 1.61 million BOE per day from our Exploration and Production segment and an estimated 0.32 million BOE per day from our LUKOIL Investment segment. E&P production was negatively impacted by unscheduled production shutdowns. These operating results do not reflect the acquisition of Burlington Resources, which was completed at the close of business on March 31. "In our downstream business, our worldwide refining crude oil capacity utilization rate was 85 percent. We experienced significant unplanned downtime and heavy refining turnaround activity, due in part to turnarounds we delayed in response to the 2005 hurricanes. "We ended the quarter with debt of $32.2 billion and a debt-to-capital ratio of 30 percent, due to the acquisition of Burlington Resources. Cash at the end of the quarter was $3.0 billion. During the quarter, we generated $4.8 billion in cash from operations; funded $4.6 billion in capital projects, investments and loans to affiliates, excluding the acquisition of Burlington Resources; and paid $496 million in dividends, which reflects a 16 percent increase to 36 cents per share." The results for ConocoPhillips' business segments follow. Exploration & Production (E&P) First-quarter financial results: E&P net income was $2,553 million, up from $2,426 million in the fourth quarter of 2005 and $1,787 million in the first quarter of 2005. The increase from the fourth quarter of 2005 primarily was due to the fourth-quarter negative impact of mark-to-market valuation of certain natural gas contracts in the United Kingdom and lower exploration expenses in the first quarter. These improvements were partially offset by lower crude oil and natural gas sales volumes, as a result of the first quarter being shorter than the fourth quarter by two days, as well as the timing of liftings. The impact of higher realized crude oil prices was offset by lower natural gas prices. Improved results from the first quarter of 2005 primarily were due to higher realized prices and lower dry hole exploration expenses. These improvements were partially offset by gains on asset sales recognized in the prior year, higher operating expenses, and higher depreciation, depletion and amortization. ConocoPhillips' E&P daily production, including Canadian Syncrude and excluding LUKOIL, averaged 1.61 million barrels of oil equivalent (BOE) per day, which is improved from 1.59 million BOE per day in the previous quarter and 1.60 million BOE per day in the first quarter of 2005. Compared with the previous quarter, increased production from the Timor Sea, Venezuela and the U.S. Lower 48 was partially offset by an unscheduled shutdown at Prudhoe Bay, as well as lower volumes from Canada, Vietnam and Indonesia. Results in the first quarter do not include Libyan production volumes, which the company began lifting in April. In addition, the Burlington Resources acquisition did not impact first-quarter operating statistics. Midstream First-quarter financial results: Midstream net income was $110 million, down from $147 million in the previous quarter and $385 million in the first quarter of 2005. The decrease from the previous quarter primarily was due to lower natural gas liquids prices. The decrease from the first quarter of 2005 primarily was due to higher first-quarter 2005 equity earnings from Duke Energy Field Services, LLC (DEFS), which included a gain from the sale of DEFS' interest in TEPPCO Partners, L.P. (TEPPCO). The net first-quarter 2005 impact to ConocoPhillips associated with the restructuring of its ownership in DEFS, including the sale of TEPPCO, was $300 million. This was partially offset by the impact of higher natural gas liquids prices and increased ownership in DEFS. Refining and Marketing (R&M) First-quarter financial results: R&M net income was $390 million, down from $973 million in the previous quarter and $700 million in the first quarter of 2005. The decrease from the fourth quarter of 2005 primarily was the result of lower worldwide refining and marketing margins and reduced volumes associated with turnaround activity and unplanned downtime. This was partially offset by lower maintenance expense primarily due to hurricane impacts in the previous quarter, as well as a previous quarter charge associated with the adoption of Financial Accounting Standards Board (FASB) Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143." The decrease from the first quarter of 2005 primarily was the result of reduced volumes associated with turnaround activity and unplanned downtime, lower international refining and U.S. marketing margins, and higher turnaround, maintenance and utility costs. Domestic first-quarter realized refining margins decreased relative to the fourth quarter, consistent with market conditions. In addition, the return to normal operations following damage caused by Hurricane Katrina at the 247,000-barrel-per-day Alliance refinery located in Belle Chasse, La., was more complex and time consuming than anticipated. The phased startup of certain processing units at the Alliance refinery primarily resulted in the production of lower value intermediates, rather than higher value finished products. Compared with the previous quarter, U.S. marketing results were significantly lower. U.S. refineries operated at 83 percent of crude oil capacity, mainly due to turnaround activity, the delayed startup of the Alliance refinery and unplanned downtime at the Lake Charles, Bayway, Trainer and Ferndale refineries. Planned turnarounds occurred at the Lake Charles, Borger, Trainer and Ferndale refineries. Turnarounds at the Sweeny and Ponca City refineries also occurred in the first quarter after being delayed by the company in response to the supply disruptions following the 2005 hurricanes. In addition, a first-quarter turnaround at the Bayway refinery, originally scheduled for the second and third quarters, was accelerated due to operational issues. International first-quarter realized refining margins were lower than the fourth quarter. Crude oil capacity utilization was 94 percent, which is lower than the previous quarter, primarily due to unplanned downtime at the Humber refinery in the United Kingdom. R&M results reflect one month of activity from the Wilhelmshaven, Germany, refinery. Worldwide, R&M's refining crude oil capacity utilization rate averaged 85 percent, compared with 88 percent in the previous quarter and 92 percent in the first quarter of 2005. Before-tax turnaround costs were $163 million in the first quarter of 2006, versus $86 million in the previous quarter and $108 million in the first quarter of 2005. LUKOIL Investment First-quarter financial results: Net income was $249 million, up from $189 million in the previous quarter and $110 million in the first quarter of 2005. This represents ConocoPhillips' estimate of the company's 16.6 percent weighted-average equity share of LUKOIL's income for the first quarter, based on market indicators and historical production trends for LUKOIL. The increases from the previous quarter and the first quarter of 2005 were attributable to higher price estimates and the company's increasing equity ownership position. At the end of the first quarter, the company's equity ownership in LUKOIL was 17.1 percent. For the first quarter of 2006, ConocoPhillips estimates its equity share of LUKOIL production was 322,000 BOE per day and its share of LUKOIL daily refining crude oil throughput was 163,000 barrels per day. Chemicals First-quarter financial results: The Chemicals segment, which includes the company's 50 percent interest in Chevron Phillips Chemical Company LLC (CPChem), reported net income of $149 million, compared with $114 million in the fourth quarter of 2005 and $133 million in the first quarter of 2005. Improved results from the previous quarter primarily were attributed to higher polyolefins margins and the recognition of a payment commitment towards a business interruption claim. In addition, olefins and polyolefins sales volumes recovered from hurricane impacts in the previous quarter. The increase from the first quarter of 2005 was largely due to improved margins from olefins and polyolefins and the recognition of the business interruption claim, partially offset by lower aromatics and styrenics margins. Emerging Businesses The Emerging Businesses segment had net income of $8 million in the first quarter of 2006, compared with a net loss of $5 million in the fourth quarter of 2005 and a net loss of $8 million in the first quarter of 2005. Corporate and Other First-quarter after-tax Corporate expenses were $168 million, compared with $165 million in the previous quarter and $195 million in the first quarter of 2005. The increased charges in the first quarter included higher benefit- and acquisition-related charges. Offsetting these increased charges were the absence of premiums incurred on the early retirement of debt and losses from discontinued operations in the previous quarter. The decreased charges from the first quarter of 2005 included reduced benefit-related charges, lower net interest expense and the absence of losses from discontinued operations, partially offset by negative foreign exchange impacts and acquisition-related charges. Due to the acquisition of Burlington Resources, total debt at the end of the first quarter was $32.2 billion, up approximately $19.7 billion from the end of 2005, while the company's debt-to-capital ratio was 30 percent, compared to 19 percent at the end of 2005. The cash balance was $3.0 billion at the end of the first quarter. The company's tax provision for the first quarter of 2006 was $2.5 billion, resulting in an effective tax rate of 43.2 percent. This is compared with 42.9 percent in the previous quarter and 40.8 percent in the first quarter of 2005. Outlook Mr. Mulva concluded: "We were pleased to start 2006 by enhancing both our upstream and downstream businesses through the completion of two significant strategic acquisitions. The integration efforts are progressing in line with our expectations due to the dedication of our global work force. A key aspect of the integration plan will be to improve financial results by capturing synergies and optimizing our portfolio. We also will continue to emphasize the importance of operating excellence and capital discipline. "As anticipated, we commenced production and completed initial deliveries of LNG from our facility near Darwin, Australia, during the quarter. We expect LNG deliveries of approximately 2 million tons in 2006, consistent with our plan. The facility performance continues to improve through the commissioning process and is expected to produce 3 million tons of LNG annually at normal operating capacity. "As previously communicated, we will begin recording our share of production from the Waha concession in Libya in April and anticipate substantial recovery of our underlift position by year-end. "In our downstream business, the Alliance refinery returned to normal operations in mid-April. Domestically, we anticipate another quarter of significant turnaround activity. Capacity utilization is expected to be in the mid-90 percent range with turnaround costs of approximately $100 million, before-tax, in the second quarter. Also, in the second quarter, we expect to complete our transition to ethanol-blended gasoline and preparations to comply with the new ultra-low sulfur diesel regulations. "Our total 2006 capital program, including Burlington Resources' remaining capital program and the acquisition and initial expenditures on the deep conversion of the Wilhelmshaven refinery, is now estimated to be approximately $18 billion. This includes loans to affiliates of $1 billion and the estimated investment necessary to bring our ownership in LUKOIL to 20 percent." ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 38,000 employees, $160 billion of assets, and $47.9 billion of revenues as of March 31, 2006. 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 including statements as to the expected benefits of the Burlington Resources acquisition such as efficiencies, cost savings, market profile and financial strength, and the competitive ability and position of the combined company, and other statements identified by words such as "estimates," "expects," "projects," "plans," and similar statements, such as "in line with our strategy to expand our global refining presence"; "We also advanced plans to upgrade the refinery to allow it to process higher sulfur crude oil into an array of more valuable light-end products"; "The integration efforts are progressing in line with our expectations due to the dedication of our global work force"; "We expect LNG deliveries of approximately 2 million tons in 2006, consistent with our plan"; "The facility performance continues to improve through the commissioning process and is expected to produce 3 million tons of LNG annually at normal operating capacity"; "we will begin recording our share of production from the Waha concession in Libya in April and anticipate substantial recovery of our underlift position by year-end"; "we anticipate another quarter of significant turnaround activity"; "Capacity utilization is expected to be in the mid-90 percent range with turnaround costs of approximately $100 million, before-tax, in the second quarter"; "Also, in the second quarter, we expect to complete our transition to ethanol-blended gasoline and preparations to comply with the new ultra-low sulfur diesel regulations"; and "Our total 2006 capital program, including Burlington Resources' remaining capital program and the acquisition and initial expenditures on the deep conversion of the Wilhelmshaven refinery, is now estimated to be approximately $18 billion", 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 a5132488-ex992.txt EXHIBIT 99.2 EXHIBIT 99.2
Preliminary FINANCIAL HIGHLIGHTS Millions of Dollars Three Months Ended March 31 2006 2005 Revenues and other income Sales and other operating revenues* $ 46,906 37,631 Equity in earnings of affiliates 960 1,053 Other income 61 234 ------------ ----------- 47,927 38,918 ------------ ----------- Costs and expenses Purchased crude oil, natural gas and products 33,455 25,572 Production and operating expenses 2,215 1,952 Selling, general and administrative expenses 566 539 Exploration expenses 112 171 Depreciation, depletion and amortization 1,180 1,041 Property impairments - 22 Taxes other than income taxes* 4,387 4,488 Accretion on discounted liabilities 60 48 Interest and debt expense 115 138 Foreign currency transaction losses (gains) 22 (3) Minority interests 18 10 ------------ ----------- 42,130 33,978 ------------ ----------- Income from continuing operations before income taxes 5,797 4,940 Provision for income taxes 2,506 2,017 ------------ ----------- Income from continuing operations 3,291 2,923 Loss from discontinued operations - (11) ------------ ----------- Net income $ 3,291 2,912 ============ =========== Income (loss) per share of common stock (dollars)** Basic Continuing operations $ 2.38 2.09 Discontinued operations - (0.01) ------------ ----------- Net income $ 2.38 2.08 ============ =========== Diluted Continuing operations $ 2.34 2.06 Discontinued operations - (0.01) ------------ ----------- Net income $ 2.34 2.05 ============ =========== Average common shares outstanding (in thousands)** Basic 1,382,925 1,397,893 Diluted 1,404,704 1,420,372 *Includes excise taxes on petroleum products sales: $3,990 4,155 **Per-share amounts and average number of shares outstanding in the 2005 quarter reflect a two-for-one stock split effected as a 100 percent stock dividend on June 1, 2005.
1-1
Preliminary SELECTED FINANCIAL DATA Millions of Dollars Three Months Ended March 31 2006 2005 INCOME (LOSS) FROM CONTINUING OPERATIONS E&P United States $ 1,181 892 International 1,372 895 ------------ ----------- Total E&P 2,553 1,787 ------------ ----------- Midstream 110 385 ------------ ----------- R&M United States 297 570 International 93 130 ------------ ----------- Total R&M 390 700 ------------ ----------- LUKOIL Investment 249 110 Chemicals 149 133 Emerging Businesses 8 (8) Corporate and other (168) (184) ------------ ----------- Consolidated $ 3,291 2,923 ============ =========== INCOME (LOSS) FROM DISCONTINUED OPERATIONS Corporate and other - (11) SUMMARY OF NET INCOME (LOSS) E&P United States $ 1,181 892 International 1,372 895 ------------ ----------- Total E&P 2,553 1,787 ------------ ----------- Midstream 110 385 ------------ ----------- R&M United States 297 570 International 93 130 ------------ ----------- Total R&M 390 700 ------------ ----------- LUKOIL Investment 249 110 Chemicals 149 133 Emerging Businesses 8 (8) Corporate and other (168) (195) ------------ ----------- Net Income $ 3,291 2,912 ============ ===========
1-2
Preliminary SELECTED FINANCIAL DATA Three Months Ended March 31 2006 2005 INCOME FROM CONTINUING OPERATIONS Effective tax rate % 43.2 % 40.8 Millions of Dollars FOREIGN CURRENCY GAINS (LOSSES) AFTER-TAX E&P $ 7 12 Midstream - - R&M 6 (18) LUKOIL Investment - - Chemicals - - Emerging Businesses - - Corporate and other (8) 7 ---------- ---------- $ 5 1 ========== ========== CASH FLOWS FROM OPERATING ACTIVITIES Income from continuing operations $ 3,291 2,923 Depreciation, depletion and amortization 1,180 1,041 Property impairments - 22 Dry hole costs and leasehold impairment 38 109 Accretion on discounted liabilities 60 48 Deferred income taxes 168 123 Undistributed equity earnings (67) (805) Net gain on asset dispositions (3) (177) Other (203) (78) Working capital changes 336 888 ---------- ---------- Net cash provided by continuing operations 4,800 4,094 Net cash provided by discontinued operations - (5) ---------- ---------- Net cash provided by operating activities $ 4,800 4,089 ========== ========== CAPITAL EXPENDITURES AND INVESTMENTS E&P United States $ 419 322 International 1,787 884 ---------- ---------- 2,206 1,206 Midstream 1 1 R&M 1,635 275 LUKOIL Investment 612 324 Chemicals - - Emerging Businesses 12 (4) Corporate and other 48 20 ---------- ---------- $ 4,514 1,822 ========== ========== OTHER At March 31, 2006 At December 31, 2005 Total debt $32,193 12,516 Common stockholders' equity $72,193 52,731
1-3
Preliminary OPERATING HIGHLIGHTS BY SEGMENT Three Months Ended March 31 2006 2005 Thousands of Barrels Daily E&P Crude oil produced United States Alaska 283 309 Lower 48 64 62 ------------- ------------ 347 371 Norway 188 207 United Kingdom 62 61 Canada 22 23 China 25 22 Indonesia 14 21 Vietnam 31 27 Timor Sea 39 36 Other 49 54 ------------- ------------ Total consolidated 777 822 Equity affiliates 126 120 ------------- ------------ Total Worldwide 903 942 ============= ============ Syncrude 16 14 ============= ============ Natural gas liquids produced United States Alaska* 22 24 Lower 48 29 27 ------------- ------------ 51 51 Norway 11 10 Canada 9 10 Timor Sea 20 17 Other 6 6 ------------- ------------ Total Worldwide 97 94 ============= ============ *Includes reinjected volumes sold lease-to-lease. 14 13 Millions of Cubic Feet Daily Natural gas produced* United States Alaska 163 185 Lower 48 1,264 1,169 ------------- ------------ 1,427 1,354 Norway 269 298 United Kingdom 851 824 Canada 424 417 Timor Sea 144 35 Indonesia 294 273 Vietnam 24 18 Other 121 76 ------------- ------------ Total consolidated 3,554 3,295 Equity affiliates 11 5 ------------- ------------ Total Worldwide 3,565 3,300 ============= ============ *Represents quantities available for sale. Excludes gas equivalent of NGL shown above. Liquefied natural gas sales 264 132 LUKOIL Investment Production (MBOE/D)* 322 201 Refinery crude oil throughput (MB/D)* 163 92 *Represents our estimated net share of LUKOIL
1-4
Preliminary OPERATING HIGHLIGHTS Three Months Ended March 31 2006 2005 E&P Per Unit Average sales prices Crude oil (per barrel) United States Alaska $ 58.87 44.15 Lower 48 52.21 41.29 Total U.S. 57.70 43.69 International 60.08 45.93 Total consolidated 58.97 44.89 Equity affiliates * 43.38 30.38 Total Worldwide 56.63 43.15 Natural gas-lease (per MCF) United States Alaska 3.58 2.96 Lower 48 7.50 5.66 Total U.S. 7.42 5.57 International 7.16 5.03 Total consolidated 7.26 5.24 Equity affiliates * 0.23 0.25 Total Worldwide 7.24 5.24 *Excludes our equity share of LUKOIL reported in the LUKOIL Investment segment Midstream Thousands of Barrels Daily Natural gas liquids extracted Consolidated United States 23 23 International - 53 Equity affiliates United States** 178 110 International 6 6 ----------- ----------- 207 192 =========== =========== **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 $ 37.64 31.95 DEFS 37.29 30.61 **Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by naural-gas-liquids component and location mix.
1-5
Preliminary OPERATING HIGHLIGHTS Three Months Ended March 31 2006 2005 Thousands of Barrels Daily R&M United States Crude oil capacity 2,208 2,173 Crude oil runs 1,840 1,957 Refinery production 1,988 2,147 International* Crude oil capacity 523 428 Crude oil runs 490 428 Refinery production 500 443 U.S. Petroleum products outside sales Gasoline 1,258 1,302 Distillates 626 642 Aviation fuels 187 198 Other products 517 461 ------------ ----------- 2,588 2,603 ------------ ----------- International 549 495 ------------ ----------- 3,137 3,098 ============ =========== Per Gallon U.S. Average sales prices** Automotive gasoline-wholesale $ 1.79 1.44 Automotive gasoline-retail 1.90 1.55 Distillates-wholesale 1.89 1.48 *Includes ConocoPhillips' share of equity affiliates. **Excludes excise taxes.
1-6 EX-99.3 4 a5132488-ex993.txt EXHIBIT 99.3 EXHIBIT 99.3
SUMMARY OF NET INCOME (LOSS) BY SEGMENT Millions of Dollars ------------------------------------------------------------------------------------ 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- Income (Loss) from Continuing Operations U.S. E&P 892 966 1,107 1,325 4,290 1,181 1,181 International E&P 895 963 1,181 1,105 4,144 1,372 1,372 - ---------------------------------------------------------------------------- ----------------------------------------- Total E&P 1,787 1,929 2,288 2,430 8,434 2,553 2,553 - ---------------------------------------------------------------------------- ----------------------------------------- Midstream 385 68 88 147 688 110 110 - ---------------------------------------------------------------------------- ----------------------------------------- U.S. R&M 570 936 1,096 805 3,407 297 297 International R&M 130 174 294 251 849 93 93 - ---------------------------------------------------------------------------- ----------------------------------------- Total R&M 700 1,110 1,390 1,056 4,256 390 390 - ---------------------------------------------------------------------------- ----------------------------------------- LUKOIL Investment 110 148 267 189 714 249 249 Chemicals 133 63 13 114 323 149 149 Emerging Businesses (8) (8) - (4) (20) 8 8 Corporate and Other (184) (179) (242) (150) (755) (168) (168) - ---------------------------------------------------------------------------- ----------------------------------------- Consolidated 2,923 3,131 3,804 3,782 13,640 3,291 3,291 ============================================================================ ========================================= Cumulative Effect of Accounting Changes U.S. E&P - - - (2) (2) - - International E&P - - - (2) (2) - - - ---------------------------------------------------------------------------- ----------------------------------------- Total E&P - - - (4) (4) - - - ---------------------------------------------------------------------------- ----------------------------------------- Midstream - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- U.S. R&M - - - (78) (78) - - International R&M - - - (5) (5) - - - ---------------------------------------------------------------------------- ----------------------------------------- Total R&M - - - (83) (83) - - - ---------------------------------------------------------------------------- ----------------------------------------- LUKOIL Investment - - - - - - - Chemicals - - - - - - - Emerging Businesses - - - (1) (1) - - Corporate and Other - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Consolidated - - - (88) (88) - - ============================================================================ ========================================= Income (Loss) from Discontinued Operations Corporate and Other (11) 7 (4) (15) (23) - - ============================================================================ ========================================= Net Income (Loss) U.S. E&P 892 966 1,107 1,323 4,288 1,181 1,181 International E&P 895 963 1,181 1,103 4,142 1,372 1,372 - ---------------------------------------------------------------------------- ----------------------------------------- Total E&P 1,787 1,929 2,288 2,426 8,430 2,553 2,553 - ---------------------------------------------------------------------------- ----------------------------------------- Midstream 385 68 88 147 688 110 110 - ---------------------------------------------------------------------------- ----------------------------------------- U.S. R&M 570 936 1,096 727 3,329 297 297 International R&M 130 174 294 246 844 93 93 - ---------------------------------------------------------------------------- ----------------------------------------- Total R&M 700 1,110 1,390 973 4,173 390 390 - ---------------------------------------------------------------------------- ----------------------------------------- LUKOIL Investment 110 148 267 189 714 249 249 Chemicals 133 63 13 114 323 149 149 Emerging Businesses (8) (8) - (5) (21) 8 8 Corporate and Other (195) (172) (246) (165) (778) (168) (168) - ---------------------------------------------------------------------------- ----------------------------------------- Consolidated 2,912 3,138 3,800 3,679 13,529 3,291 3,291 ============================================================================ =========================================
Page 1 of 11
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Millions of Dollars ------------------------------------------------------------------------------------ 2005 2006 ---------------------------------------- ----------------------------------------- 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 1,388 1,504 1,728 2,019 6,639 1,853 1,853 International E&P 2,020 2,152 2,567 2,550 9,289 2,862 2,862 - ---------------------------------------------------------------------------- ----------------------------------------- Total E&P 3,408 3,656 4,295 4,569 15,928 4,715 4,715 - ---------------------------------------------------------------------------- ----------------------------------------- Midstream 449 107 138 208 902 173 173 - ---------------------------------------------------------------------------- ----------------------------------------- U.S. R&M 901 1,485 1,766 1,379 5,531 512 512 International R&M 160 203 368 330 1,061 112 112 - ---------------------------------------------------------------------------- ----------------------------------------- Total R&M 1,061 1,688 2,134 1,709 6,592 624 624 - ---------------------------------------------------------------------------- ----------------------------------------- LUKOIL Investment 115 153 275 196 739 257 257 Chemicals 187 84 (3) 148 416 209 209 Emerging Businesses (13) (13) (2) (10) (38) 9 9 Corporate and Other (267) (243) (283) (199) (992) (190) (190) - ---------------------------------------------------------------------------- ----------------------------------------- Consolidated 4,940 5,432 6,554 6,621 23,547 5,797 5,797 ============================================================================ ========================================= Income from Continuing Operations Effective Tax Rates U.S. E&P 35.7% 35.8% 35.9% 34.4% 35.4% 36.3% 36.3% International E&P 55.7% 55.3% 54.0% 56.7% 55.4% 52.1% 52.1% - ---------------------------------------------------------------------------- ----------------------------------------- Total E&P 47.6% 47.2% 46.7% 46.8% 47.0% 45.9% 45.9% - ---------------------------------------------------------------------------- ----------------------------------------- Midstream 14.3% 36.4% 36.2% 29.3% 23.7% 36.4% 36.4% - ---------------------------------------------------------------------------- ----------------------------------------- U.S. R&M 36.7% 37.0% 37.9% 41.6% 38.4% 42.0% 42.0% International R&M 18.8% 14.3% 20.1% 23.9% 20.0% 17.0% 17.0% - ---------------------------------------------------------------------------- ----------------------------------------- Total R&M 34.0% 34.2% 34.9% 38.2% 35.4% 37.5% 37.5% - ---------------------------------------------------------------------------- ----------------------------------------- LUKOIL Investment 4.3% 3.3% 2.9% 3.6% 3.4% 3.1% 3.1% Chemicals 28.9% 25.0% -- 23.0% 22.4% 28.7% 28.7% Emerging Businesses 38.5% 38.5% -- 60.0% 47.4% 11.1% 11.1% Corporate and Other 31.1% 26.3% 14.5% 24.6% 23.9% 11.6% 11.6% - ---------------------------------------------------------------------------- ----------------------------------------- Consolidated 40.8% 42.4% 42.0% 42.9% 42.1% 43.2% 43.2% ============================================================================ =========================================
Page 2 of 11
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX) Millions of Dollars ------------------------------------------------------------------------------------ 2005 2006 ---------------------------------------- ----------------------------------------- 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 - - - - - - - Insurance premium adjustments - (5) (4) (8) (17) (2) (2) Pending claims and settlements - 15 - (23) (8) - - - ---------------------------------------------------------------------------- ----------------------------------------- Total 90 10 (4) (31) 65 (2) (2) - ---------------------------------------------------------------------------- ----------------------------------------- International E&P Gain (loss) on asset sales - 15 - - 15 - - Insurance premium adjustments - (10) (12) (19) (41) (10) (10) Canada tax law change - - - 38 38 - - Pending claims and settlements - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Total - 5 (12) 19 12 (10) (10) - ---------------------------------------------------------------------------- ----------------------------------------- Total E&P 90 15 (16) (12) 77 (12) (12) - ---------------------------------------------------------------------------- ----------------------------------------- Midstream Property impairments (6) (7) - - (13) - - DEFS' sale of TEPPCO general partnership 306 - - - 306 - - - ---------------------------------------------------------------------------- ----------------------------------------- Total 300 (7) - - 293 - - - ---------------------------------------------------------------------------- ----------------------------------------- U.S. R&M Gain (loss) on asset sales 31 - - - 31 - - Insurance premium adjustments - (7) (9) (14) (30) (6) (6) Discontinuation of a marketing incentive program - - (16) - (16) - - Hurricanes impact on maintenance & repairs - - - (57) (57) - - Pending claims and settlements - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Total 31 (7) (25) (71) (72) (6) (6) - ---------------------------------------------------------------------------- ----------------------------------------- International R&M Gain (loss) on asset sales - 25 - - 25 - - Property impairments - - - - - - - Insurance premium adjustments - - - - - (1) (1) - ---------------------------------------------------------------------------- ----------------------------------------- Total - 25 - - 25 (1) (1) - ---------------------------------------------------------------------------- ----------------------------------------- Total R&M 31 18 (25) (71) (47) (7) (7) - ---------------------------------------------------------------------------- ----------------------------------------- LUKOIL Investment - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Total - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Chemicals - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Total - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Emerging Businesses - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Total - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Corporate and Other Acquisition-related expenses - - - - - (5) (5) Premium on early debt retirement (8) - (42) (42) (92) - - Pending claims and settlements - - - - - (15) (15) - ---------------------------------------------------------------------------- ----------------------------------------- Total (8) - (42) (42) (92) (20) (20) - ---------------------------------------------------------------------------- ----------------------------------------- Total Company 413 26 (83) (125) 231 (39) (39) ============================================================================ =========================================
Page 3 of 11
CASH FLOW INFORMATION Millions of Dollars ------------------------------------------------------------------------------------ 2005 2006 ---------------------------------------- ----------------------------------------- 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 2,923 3,131 3,804 3,782 13,640 3,291 3,291 DD&A and property impairments 1,063 994 1,049 1,189 4,295 1,180 1,180 Dry hole costs and leasehold impairments 109 47 55 138 349 38 38 Accretion on discounted liabilities 48 41 46 58 193 60 60 Deferred income taxes 123 369 261 348 1,101 168 168 Undistributed equity earnings (805) (414) (463) (92) (1,774) (67) (67) Net (gain) loss on asset dispositions (177) (65) (22) (14) (278) (3) (3) Other (78) (113) 192 (140) (139) (203) (203) Net working capital changes 888 (1,224) 1,177 (595) 246 336 336 Discontinued operations (5) 2 (3) 1 (5) - - - ---------------------------------------------------------------------------- ----------------------------------------- Net Cash Provided by Operating Activities 4,089 2,768 6,096 4,675 17,628 4,800 4,800 - ---------------------------------------------------------------------------- ----------------------------------------- Cash Flows from Investing Activities Capital expenditures and investments*: E&P (1,206) (2,337) (1,475) (1,666) (6,684) (2,206) (2,206) Midstream (1) - (838) - (839) (1) (1) R&M (275) (360) (440) (663) (1,738) (1,635) (1,635) LUKOIL Investment (324) (384) (815) (637) (2,160) (612) (612) Chemicals - - - - - - - Emerging Businesses 4 (7) (2) - (5) (12) (12) Corporate and Other (20) (37) (56) (81) (194) (48) (48) - ---------------------------------------------------------------------------- ----------------------------------------- Total capital expend. & investments (1,822) (3,125) (3,626) (3,047) (11,620) (4,514) (4,514) Acquisition of Burlington Resources Inc.* - - - - - (14,190) (14,190) Proceeds from asset dispositions 87 221 300 160 768 5 5 Long-term advances to/collections from affiliates and other investments 25 4 (58) (135) (164) (115) (115) Discontinued operations - - - - - - - - ---------------------------------------------------------------------------- ----------------------------------------- Net Cash Used for Investing Activities (1,710) (2,900) (3,384) (3,022) (11,016) (18,814) (18,814) - ---------------------------------------------------------------------------- ----------------------------------------- Cash Flows from Financing Activities Net issuance (repayment) of debt (986) (13) (513) (1,038) (2,550) 15,324 15,324 Issuance of stock 155 108 114 25 402 40 40 Repurchase of stock (194) (382) (589) (759) (1,924) - - Dividends (348) (432) (430) (429) (1,639) (496) (496) Other 64 33 (10) (60) 27 (27) (27) - ---------------------------------------------------------------------------- ----------------------------------------- Net Cash Provided by (Used for) Financing Activities (1,309) (686) (1,428) (2,261) (5,684) 14,841 14,841 - ---------------------------------------------------------------------------- ----------------------------------------- Effect of Exchange Rate Changes (36) (62) (22) 19 (101) (33) (33) - ---------------------------------------------------------------------------- ----------------------------------------- Net Change in Cash and Cash Equivalents 1,034 (880) 1,262 (589) 827 794 794 Cash and cash equivalents at beginning of period 1,387 2,421 1,541 2,803 1,387 2,214 2,214 - ---------------------------------------------------------------------------- ----------------------------------------- Cash and Cash Equivalents at End of Period 2,421 1,541 2,803 2,214 2,214 3,008 3,008 ============================================================================ ========================================= * Net of cash acquired.
Page 4 of 11
TOTAL E&P 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- E&P Net Income ($ Millions) 1,787 1,929 2,288 2,426 8,430 2,553 2,553 ============================================================================ ========================================= Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 1,600 1,537 1,521 1,590 1,562 1,610 1,610 - ---------------------------------------------------------------------------- ----------------------------------------- E&P segment plus LUKOIL Investment segment: 1,801 1,760 1,787 1,883 1,808 1,932 1,932 - ---------------------------------------------------------------------------- ----------------------------------------- Crude Oil and Condensate (MB/D) Consolidated 822 780 766 777 786 777 777 Equity affiliates 120 123 124 116 121 126 126 - ---------------------------------------------------------------------------- ----------------------------------------- Total 942 903 890 893 907 903 903 ============================================================================ ========================================= Sales of crude oil produced (MB/D) 940 932 883 916 918 913 913 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids (MB/D) 94 80 92 99 91 97 97 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas (MMCF/D) Consolidated 3,295 3,191 3,099 3,468 3,263 3,554 3,554 Equity affiliates 5 7 10 3 7 11 11 - ---------------------------------------------------------------------------- ----------------------------------------- Total 3,300 3,198 3,109 3,471 3,270 3,565 3,565 ============================================================================ ========================================= Canadian Syncrude (MB/D) 14 21 21 20 19 16 16 - ---------------------------------------------------------------------------- ----------------------------------------- Industry Prices (Platt's) Crude Oil ($/bbl) WTI spot 49.70 53.03 63.05 59.99 56.44 63.28 63.28 Brent dated 47.50 51.59 61.54 56.90 54.38 61.75 61.75 Natural Gas ($/mmbtu) Henry Hub -- First of Month 6.27 6.74 8.53 13.00 8.64 9.01 9.01 - ---------------------------------------------------------------------------- ----------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated 44.89 48.88 58.49 55.06 51.74 58.97 58.97 Equity affiliates 30.38 36.11 45.25 38.90 37.79 43.38 43.38 Total 43.15 46.93 56.64 53.05 49.87 56.63 56.63 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids ($/bbl) 33.44 35.10 41.54 42.75 38.32 43.13 43.13 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas ($/mcf) Consolidated 5.24 5.53 6.40 7.96 6.32 7.26 7.26 Equity affiliates 0.25 0.32 0.20 0.28 0.26 0.23 0.23 Total 5.24 5.52 6.38 7.94 6.30 7.24 7.24 - ---------------------------------------------------------------------------- ----------------------------------------- Exploration Charges ($ Millions) Dry Holes 88 30 32 83 233 19 19 Lease Impairments 20 18 23 55 116 19 19 - ---------------------------------------------------------------------------- ----------------------------------------- Total Non-Cash Charges 108 48 55 138 349 38 38 Other (G&G and Lease Rentals) 63 73 85 91 312 74 74 - ---------------------------------------------------------------------------- ----------------------------------------- Total Exploration Charges 171 121 140 229 661 112 112 ============================================================================ ========================================= Depreciation, Depletion and Amortization (DD&A) ($ Millions) 819 755 823 915 3,312 910 910 - ---------------------------------------------------------------------------- -----------------------------------------
Page 5 of 11
U.S. E&P 2005 2006 ---------------------------------------- ----------------------------------------- 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) 892 966 1,107 1,323 4,288 1,181 1,181 ============================================================================ ========================================= Alaska ($ Millions) 532 572 730 718 2,552 692 692 - ---------------------------------------------------------------------------- ----------------------------------------- Lower 48 ($ Millions) 360 394 377 605 1,736 489 489 - ---------------------------------------------------------------------------- ----------------------------------------- Production Total U.S. (MBOE/D) 648 631 617 636 633 636 636 - ---------------------------------------------------------------------------- ----------------------------------------- Crude Oil and Condensate (MB/D) Alaska 309 297 281 291 294 283 283 Lower 48 62 63 56 54 59 64 64 - ---------------------------------------------------------------------------- ----------------------------------------- Total 371 360 337 345 353 347 347 ============================================================================ ========================================= Sales of crude oil produced (MB/D) 386 352 352 337 357 363 363 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids (MB/D)* Alaska 24 16 18 21 20 22 22 Lower 48 27 31 30 31 30 29 29 - ---------------------------------------------------------------------------- ----------------------------------------- Total 51 47 48 52 50 51 51 ============================================================================ ========================================= *Includes reinjection volumes sold lease-to-lease: 13 1 8 13 9 14 14 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas (MMCF/D) Alaska 185 148 173 172 169 163 163 Lower 48 1,169 1,195 1,218 1,264 1,212 1,264 1,264 - ---------------------------------------------------------------------------- ----------------------------------------- Total 1,354 1,343 1,391 1,436 1,381 1,427 1,427 ============================================================================ ========================================= Average Realized Prices Crude Oil and Condensate ($/bbl) Alaska North Slope 38.93 43.92 53.30 52.34 46.95 52.92 52.92 - ---------------------------------------------------------------------------- ----------------------------------------- West Coast 44.15 49.22 58.70 57.61 52.24 58.87 58.87 - ---------------------------------------------------------------------------- ----------------------------------------- Lower 48 41.29 43.58 50.00 46.62 45.24 52.21 52.21 - ---------------------------------------------------------------------------- ----------------------------------------- Total U.S. 43.69 48.21 57.31 55.86 51.09 57.70 57.70 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids ($/bbl) Alaska 44.33 49.20 57.11 57.58 51.30 58.88 58.88 - ---------------------------------------------------------------------------- ----------------------------------------- Lower 48 30.96 31.22 39.92 42.89 36.43 38.20 38.20 - ---------------------------------------------------------------------------- ----------------------------------------- Total U.S. 34.68 37.26 43.95 45.94 40.40 43.00 43.00 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas ($/mcf) Alaska 2.96 2.49 2.57 3.01 2.75 3.58 3.58 - ---------------------------------------------------------------------------- ----------------------------------------- Lower 48 5.66 6.20 7.67 9.37 7.28 7.50 7.50 - ---------------------------------------------------------------------------- ----------------------------------------- Total U.S. 5.57 6.07 7.48 9.17 7.12 7.42 7.42 - ---------------------------------------------------------------------------- ----------------------------------------- Kenai, Alaska LNG Sales Volume (MMCF/D) 132 96 123 118 117 128 128 - ---------------------------------------------------------------------------- ----------------------------------------- Sales price per MCF 5.27 5.24 5.90 6.36 5.71 6.45 6.45 - ---------------------------------------------------------------------------- ----------------------------------------- U.S. Exploration Charges ($ Millions) Dry Holes 74 8 (2) 3 83 8 8 Lease Impairments 10 9 9 10 38 8 8 - ---------------------------------------------------------------------------- ----------------------------------------- Total Non-Cash Charges 84 17 7 13 121 16 16 Other (G&G and Lease Rentals) 12 17 19 7 55 14 14 - ---------------------------------------------------------------------------- ----------------------------------------- Total U.S. Exploration Charges 96 34 26 20 176 30 30 ============================================================================ ========================================= Alaska Only 85 13 11 1 110 18 18 - ---------------------------------------------------------------------------- ----------------------------------------- DD&A ($ Millions) Alaska 133 134 126 142 535 132 132 Lower 48 219 172 243 231 865 251 251 - ---------------------------------------------------------------------------- ----------------------------------------- Total U.S. 352 306 369 373 1,400 383 383 ============================================================================ =========================================
Page 6 of 11
INTERNATIONAL E&P 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- International E&P Net Income ($ Millions) 895 963 1,181 1,103 4,142 1,372 1,372 ============================================================================ ========================================= Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 952 906 904 954 929 974 974 - ---------------------------------------------------------------------------- ----------------------------------------- Crude Oil and Condensate (MB/D) Consolidated Norway 207 195 198 188 197 188 188 United Kingdom 61 60 56 62 60 62 62 Canada 23 23 22 22 23 22 22 China 22 25 22 23 23 25 25 Indonesia 21 16 10 13 15 14 14 Vietnam 27 26 30 37 29 31 31 Timor Sea 36 21 38 36 33 39 39 Other 54 54 53 51 53 49 49 Equity affiliates 120 123 124 116 121 126 126 - ---------------------------------------------------------------------------- ----------------------------------------- Total 571 543 553 548 554 556 556 ============================================================================ ========================================= Sales of crude oil produced (MB/D) 554 580 531 579 561 550 550 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids (MB/D) Norway 10 9 10 11 9 11 11 Canada 10 10 10 10 10 9 9 Timor Sea 17 9 20 19 16 20 20 Other 6 5 4 7 6 6 6 - ---------------------------------------------------------------------------- ----------------------------------------- Total 43 33 44 47 41 46 46 ============================================================================ ========================================= Natural Gas (MMCF/D) Consolidated Norway 298 268 259 264 272 269 269 United Kingdom 824 741 588 851 751 851 851 Canada 417 422 429 430 425 424 424 Timor Sea 35 35 35 33 34 144 144 Indonesia 273 287 303 330 298 294 294 Vietnam 18 14 20 19 18 24 24 Other 76 81 74 105 84 121 121 Equity affiliates 5 7 10 3 7 11 11 - ---------------------------------------------------------------------------- ----------------------------------------- Total 1,946 1,855 1,718 2,035 1,889 2,138 2,138 ============================================================================ ========================================= Canadian Syncrude (MB/D) 14 21 21 20 19 16 16 - ---------------------------------------------------------------------------- ----------------------------------------- Darwin, Australia LNG Sales (MMCF/D) - - - - - 136 136 - ---------------------------------------------------------------------------- ----------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated Norway 45.52 50.21 60.42 56.36 53.18 61.36 61.36 United Kingdom 49.47 48.02 60.83 54.87 53.13 59.13 59.13 Canada 36.96 41.09 54.74 46.44 44.70 44.28 44.28 China 41.51 46.95 51.89 49.86 47.85 57.90 57.90 Indonesia 46.51 47.57 61.77 47.00 49.45 57.94 57.94 Vietnam 47.77 53.32 58.52 52.77 53.23 62.34 62.34 Timor Sea 47.99 50.90 59.03 52.90 52.95 60.37 60.37 Other 44.56 50.11 60.99 57.03 52.93 62.95 62.95 Equity affiliates 30.38 36.11 45.25 38.90 37.79 43.38 43.38 Total 42.77 46.16 56.19 51.41 49.09 55.92 55.92 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids ($/bbl) Norway 30.63 28.20 37.29 33.81 32.45 42.55 42.55 Canada 37.37 37.66 44.22 49.63 42.20 46.21 46.21 Timor Sea 34.40 35.99 40.45 47.29 40.11 46.68 46.68 Other 21.34 22.30 26.63 20.30 22.17 27.16 27.16 Total 32.35 32.03 39.29 40.04 36.25 43.25 43.25 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas ($/mcf) Consolidated Norway 5.03 5.30 5.13 6.40 5.46 7.28 7.28 United Kingdom 5.54 5.01 4.92 7.64 5.89 8.81 8.81 Canada 5.33 6.14 7.54 9.86 7.25 6.28 6.28 Timor Sea 0.52 0.52 0.56 0.61 0.55 0.67 0.67 Indonesia 5.08 5.96 6.73 6.23 6.03 7.45 7.45 Vietnam 1.04 1.04 1.05 1.07 1.05 1.07 1.07 Other 0.70 0.59 0.66 0.72 0.67 0.82 0.82 Equity affiliates 0.25 0.32 0.20 0.28 0.26 0.23 0.23 Total 5.03 5.15 5.57 7.16 5.76 7.13 7.13 - ---------------------------------------------------------------------------- ----------------------------------------- International Exploration Charges ($ Millions) Dry Holes 14 22 34 80 150 11 11 Lease Impairments 10 9 14 45 78 11 11 - ---------------------------------------------------------------------------- ----------------------------------------- Total Non-Cash Charges 24 31 48 125 228 22 22 Other (G&G and Lease Rentals) 51 56 66 84 257 60 60 - ---------------------------------------------------------------------------- ----------------------------------------- Total International Exploration Charges 75 87 114 209 485 82 82 ============================================================================ ========================================= DD&A ($ Millions) 467 449 454 542 1,912 527 527 - ---------------------------------------------------------------------------- -----------------------------------------
Page 7 of 11
R&M 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- R&M Net Income ($ Millions) 700 1,110 1,390 973 4,173 390 390 ============================================================================ ========================================= United States ($ Millions) 570 936 1,096 727 3,329 297 297 - ---------------------------------------------------------------------------- ----------------------------------------- International ($ Millions) 130 174 294 246 844 93 93 - ---------------------------------------------------------------------------- ----------------------------------------- Market Indicators U.S. East Coast Crack Spread ($/bbl) 6.40 8.80 14.81 9.32 9.83 7.52 7.52 U.S. Gulf Coast Crack Spread ($/bbl) 6.37 9.63 17.42 10.27 10.92 8.28 8.28 U.S. Group Central Crack Spread ($/bbl) 7.92 11.51 17.06 11.93 12.10 9.81 9.81 U.S. West Coast Crack Spread ($/bbl) 19.61 22.20 26.61 16.29 21.18 18.87 18.87 U.S. Weighted 3:2:1 Crack Spread ($/bbl) 9.24 12.35 18.51 11.69 12.95 10.56 10.56 NW Europe Crack Spread ($/bbl) 11.14 15.09 16.53 13.68 14.11 10.18 10.18 Singapore 3:2:1 Crack Spread ($/bbl) 13.23 13.95 16.70 12.43 14.08 10.58 10.58 U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.16 2.20 0.42 3.98 1.69 0.93 0.93 - ---------------------------------------------------------------------------- ----------------------------------------- Realized Margins Refining Margin ($/bbl) U.S. 10.11 11.23 14.61 12.71 12.17 10.18 10.18 International* 8.26 8.79 10.44 8.73 9.07 5.01 5.01 - ---------------------------------------------------------------------------- ----------------------------------------- Marketing Margin ($/bbl) U.S. 0.46 2.01 0.18 2.52 1.28 0.12 0.12 International 5.61 8.56 6.80 8.62 7.43 6.07 6.07 - ---------------------------------------------------------------------------- ----------------------------------------- * 2004 and first-quarter 2005 amounts restated to include equity affiliates. DD&A ($ Millions) 194 197 197 230 818 239 239 - ---------------------------------------------------------------------------- ----------------------------------------- Turnaround Expense ($ Millions) 108 106 53 86 353 163 163 - ---------------------------------------------------------------------------- ----------------------------------------- Eastern U.S. Crude Oil Charge Input (MB/D) 403 414 409 416 410 354 354 Total Charge Input (MB/D) 449 454 456 446 451 359 359 Crude Oil Capacity Utilization (%) 95% 98% 97% 98% 97% 84% 84% Clean Product Yield (%) 92% 88% 89% 91% 90% 90% 90% - ---------------------------------------------------------------------------- ----------------------------------------- U.S. Gulf Coast Crude Oil Charge Input (MB/D) 659 715 596 397 591 529 529 Total Charge Input (MB/D) 733 835 674 467 676 587 587 Crude Oil Capacity Utilization (%) 92% 100% 83% 55% 83% 72% 72% Clean Product Yield (%) 73% 79% 80% 80% 78% 74% 74% - ---------------------------------------------------------------------------- ----------------------------------------- Central U.S. Crude Oil Charge Input (MB/D) 538 594 620 619 594 571 571 Total Charge Input (MB/D) 577 625 653 666 630 613 613 Crude Oil Capacity Utilization (%) 84% 93% 97% 97% 93% 89% 89% Clean Product Yield (%) 86% 84% 85% 85% 85% 84% 84% - ---------------------------------------------------------------------------- ----------------------------------------- Western U.S. Crude Oil Charge Input (MB/D) 357 410 415 421 401 386 386 Total Charge Input (MB/D) 382 431 439 445 425 419 419 Crude Oil Capacity Utilization (%) 90% 101% 102% 104% 100% 94% 94% Clean Product Yield (%) 80% 82% 79% 79% 80% 79% 79% - ---------------------------------------------------------------------------- ----------------------------------------- TOTAL UNITED STATES Crude Oil Charge Input (MB/D) 1,957 2,133 2,040 1,853 1,996 1,840 1,840 Total Charge Input (MB/D) 2,141 2,345 2,222 2,024 2,182 1,978 1,978 Crude Oil Capacity Utilization (%) 90% 98% 93% 85% 92% 83% 83% Clean Product Yield (%) 82% 83% 83% 84% 83% 81% 81% - ---------------------------------------------------------------------------- ----------------------------------------- Refined Products Production (MB/D) Gasoline 968 1,071 1,030 949 1,004 890 890 Distillates 599 655 640 583 619 538 538 Aviation Fuel 166 174 153 135 157 146 146 Other 414 449 400 370 406 414 414 - ---------------------------------------------------------------------------- ----------------------------------------- Total 2,147 2,349 2,223 2,037 2,186 1,988 1,988 ============================================================================ ========================================= Petroleum Products Sales (MB/D) Gasoline 1,302 1,426 1,397 1,368 1,374 1,258 1,258 Distillates 642 680 725 653 675 626 626 Aviation Fuel 198 214 203 189 201 187 187 Other 461 566 526 521 519 517 517 - ---------------------------------------------------------------------------- ----------------------------------------- Total 2,603 2,886 2,851 2,731 2,769 2,588 2,588 ============================================================================ =========================================
Page 8 of 11
R&M (continued) 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- International - Consolidated* Crude Oil Charge Input (MB/D) 294 259 289 291 283 357 357 Total Charge Input (MB/D) 307 266 305 310 297 369 369 Crude Oil Capacity Utilization (%) 101% 89% 99% 100% 97% 94% 94% Clean Product Yield (%) 79% 76% 82% 82% 80% 71% 71% - ---------------------------------------------------------------------------- ----------------------------------------- International - Equity Affiliates - Net Share** Crude Oil Charge Input (MB/D) 134 143 142 144 141 133 133 Total Charge Input (MB/D) 137 147 145 145 144 137 137 Crude Oil Capacity Utilization (%) 98% 105% 105% 106% 103% 94% 94% Clean Product Yield (%) 83% 82% 80% 83% 82% 82% 82% - ---------------------------------------------------------------------------- ----------------------------------------- TOTAL INTERNATIONAL Crude Oil Charge Input (MB/D) 428 402 431 435 424 490 490 Total Charge Input (MB/D) 444 413 450 455 441 506 506 Crude Oil Capacity Utilization (%) 100% 94% 101% 102% 99% 94% 94% Clean Product Yield (%) 80% 78% 81% 82% 80% 74% 74% - ---------------------------------------------------------------------------- ----------------------------------------- Refined Products Production (MB/D) Gasoline 141 115 143 152 138 142 142 Distillates 186 178 191 191 186 215 215 Aviation Fuel 21 21 24 24 22 13 13 Other 95 96 90 91 93 130 130 - ---------------------------------------------------------------------------- ----------------------------------------- Total 443 410 448 458 439 500 500 ============================================================================ ========================================= Petroleum Products Sales (MB/D) Gasoline 185 176 178 175 178 171 171 Distillates 221 212 216 224 218 262 262 Aviation Fuel 7 10 12 8 9 7 7 Other 82 79 64 83 77 109 109 - ---------------------------------------------------------------------------- ----------------------------------------- Total 495 477 470 490 482 549 549 ============================================================================ ========================================= Worldwide - Including Net Share of Equity Affiliates Crude Oil Charge Input (MB/D) 2,385 2,535 2,471 2,288 2,420 2,330 2,330 Total Charge Input (MB/D) 2,585 2,758 2,672 2,479 2,623 2,484 2,484 Crude Oil Capacity Utilization (%) 92% 97% 95% 88% 93% 85% 85% Clean Product Yield (%) 82% 82% 83% 84% 82% 79% 79% - ---------------------------------------------------------------------------- ----------------------------------------- Refined Products Production (MB/D) Gasoline 1,109 1,186 1,173 1,101 1,142 1,032 1,032 Distillates 785 833 831 774 805 753 753 Aviation Fuel 187 195 177 159 179 159 159 Other 509 545 490 461 499 544 544 - ---------------------------------------------------------------------------- ----------------------------------------- Total 2,590 2,759 2,671 2,495 2,625 2,488 2,488 ============================================================================ ========================================= Petroleum Products Sales (MB/D) Gasoline 1,487 1,602 1,575 1,543 1,552 1,429 1,429 Distillates 863 892 941 877 893 888 888 Aviation Fuel 205 224 215 197 210 194 194 Other 543 645 590 604 596 626 626 - ---------------------------------------------------------------------------- ----------------------------------------- Total 3,098 3,363 3,321 3,221 3,251 3,137 3,137 ============================================================================ ========================================= * Represents our Humber refinery in the United Kingdom, the Whitegate refinery in Ireland, and, effective March 1, 2006, our Wilhelmshaven refinery in Germany. ** Represents 18.75 percent interest in a refinery complex in Karlsruhe, Germany; 16.33 percent interest in two refineries in Kralupy and Litvinov, Czech Republic; and 47 percent interest in a refinery in Melaka, Malaysia.
Page 9 of 11
LUKOIL INVESTMENT 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- LUKOIL Investment Net Income ($ Millions) 110 148 267 189 714 249 249 ============================================================================ ========================================= Upstream Production* Net crude oil production (MB/D) 190 215 253 281 235 306 306 Net natural gas production (MMCF/D) 67 50 79 72 67 98 98 BOE Total (MBOE/D) 201 223 266 293 246 322 322 - ---------------------------------------------------------------------------- ----------------------------------------- * Represents our estimated net share of LUKOIL's production. Industry Prices Crude Oil ($/bbl) Urals crude (CIF Mediterranean) 43.21 48.49 57.39 54.07 50.87 58.25 58.25 - ---------------------------------------------------------------------------- ----------------------------------------- Downstream Refinery Throughput* Crude Processed (MB/D) 92 101 138 156 122 163 163 - ---------------------------------------------------------------------------- ----------------------------------------- * Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- Midstream Net Income ($ Millions) 385 68 88 147 688 110 110 ============================================================================ ========================================= U.S. Equity Affiliate ($ Millions)* 359 51 76 105 591 93 93 - ---------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids Extracted (MB/D) Consolidated United States 23 21 23 22 22 23 23 International 53 44 5 - 25 - - Equity Affiliates United States* 110 112 171 172 142 178 178 International 6 6 6 6 6 6 6 - ---------------------------------------------------------------------------- ----------------------------------------- Total 192 183 205 200 195 207 207 ============================================================================ ========================================= * 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* 149 131 123 127 132 141 141 International 64 55 15 10 36 11 11 - ---------------------------------------------------------------------------- ----------------------------------------- Total 213 186 138 137 168 152 152 ============================================================================ ========================================= * Excludes DEFS. Product Prices Weighted Average NGL ($/bbl)* Consolidated 31.95 32.49 39.60 42.70 36.68 37.64 37.64 DEFS 30.61 31.33 38.31 41.84 35.52 37.29 37.29 - ---------------------------------------------------------------------------- ----------------------------------------- * Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas liquids component and location mix. DD&A ($ Millions) 9 8 7 8 32 7 7 - ---------------------------------------------------------------------------- -----------------------------------------
CHEMICALS 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- Chemicals Net Income (Loss) ($ Millions) 133 63 13 114 323 149 149 ============================================================================ ========================================= Industry Margins (Cents/Lb)* Ethylene industry cash margin 18.11 12.76 8.78 21.06 15.18 20.48 20.48 HDPE industry contract sales margin 12.09 12.01 8.16 12.90 11.29 15.91 15.91 Styrene industry contract sales margin 13.91 13.63 12.44 12.31 13.07 12.52 12.52 - ---------------------------------------------------------------------------- ----------------------------------------- * 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 2005 2006 ---------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ---------------------------------------- ----------------------------------------- Emerging Businesses Net Income (Loss) ($ Millions) (8) (8) - (5) (21) 8 8 ============================================================================ ========================================= Detail of Net Income (Loss) ($ Millions) Technology Solutions (2) (4) (5) (5) (16) (12) (12) Gas-to-Liquids (7) (7) (4) (5) (23) (4) (4) Power 2 9 17 15 43 31 31 Other (1) (6) (8) (10) (25) (7) (7) - ---------------------------------------------------------------------------- ----------------------------------------- Total (8) (8) - (5) (21) 8 8 ============================================================================ =========================================
CORPORATE AND OTHER 2005 2006 ---------------------------------------- ----------------------------------------- 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) (195) (172) (246) (165) (778) (168) (168) ============================================================================ ========================================= Detail of Net Income (Loss) ($ Millions) Net interest expense (101) (84) (123) (114) (422) (77) (77) Corporate overhead (58) (46) (64) (15) (183) (26) (26) Discontinued operations (11) 7 (4) (15) (23) - - Acquisition-related expenses - - - - - (5) (5) Accounting change - - - - - - - Other (25) (49) (55) (21) (150) (60) (60) - ---------------------------------------------------------------------------- ----------------------------------------- Total (195) (172) (246) (165) (778) (168) (168) ============================================================================ ========================================= Before-Tax Net Interest Expense ($ Millions) Interest expense (226) (219) (223) (224) (892) (226) (226) Capitalized interest 88 91 102 114 395 111 111 Interest revenue 25 24 28 36 113 30 30 Receivables monetization related (1) - - - (1) - - Premium on early debt retirement (9) - (50) (51) (110) - - - ---------------------------------------------------------------------------- ----------------------------------------- (123) (104) (143) (125) (495) (85) (85) ============================================================================ ========================================= Debt Total Debt ($ Millions) 14,012 14,013 13,497 12,516 12,516 32,193 32,193 Debt-to-Capital Ratio 23% 22% 21% 19% 19% 30% 30% - ---------------------------------------------------------------------------- -----------------------------------------
Page 11 of 11 -----END PRIVACY-ENHANCED MESSAGE-----