-----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, K8bC824qay/ijUESauE8bTIB9f9PW6JBk//r0GcXqKjFkKyTfRUOCaB50ETuYBnD CUZitjtl1xdHb86uo9WCKA== 0001157523-06-007333.txt : 20060726 0001157523-06-007333.hdr.sgml : 20060726 20060726095228 ACCESSION NUMBER: 0001157523-06-007333 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060726 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060726 DATE AS OF CHANGE: 20060726 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: 06980540 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 a5195970.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): July 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 Instructions 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 July 26, 2006, ConocoPhillips issued a press release announcing the company's financial and operating results for the quarter ended June 30, 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. The press release contains a measure, "effective tax rate," that is not calculated in accordance with U.S. generally accepted accounting principles (GAAP). We have included this non-GAAP financial measure because, in management's opinion, excluding the favorable impact from certain tax legislation changes in Canada and Texas in calculating our effective tax rate for the second quarter of 2006 is a better indicator of the company's ongoing effective tax rate and is therefore more useful in comparing the Company's effective tax rate for the second quarter of 2006 with prior and future periods. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 -- Press release issued by ConocoPhillips on July 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 July 26, 2006 3 EXHIBIT INDEX Exhibit No. Description - --- ----------- 99.1 Press release issued by ConocoPhillips on July 26, 2006. 99.2 Financial and operational tables. 99.3 Supplemental financial information. 4 EX-99.1 2 a5195970ex991.txt EXHIBIT 99.1 Exhibit 99.1 ConocoPhillips Reports Second-Quarter Net Income of $5.2 Billion or $3.09 Per Diluted Share; Effectively Reinvested 97 Percent of Net Income Year-to-Date HOUSTON--(BUSINESS WIRE)--July 26, 2006--ConocoPhillips (NYSE:COP): Earnings at a glance Second Quarter Six Months - ---------------------------------------------------------------------- 2006 2005 2006 2005 - ---------------------------------------------------------------------- Income from continuing operations $5,186 3,131 $8,477 6,054 million million million million Income (loss) from discontinued operations $ - 7 $ - (4) Net income $5,186 3,138 $8,477 6,050 - ---------------------------------------------------------------------- Diluted income per share Income from continuing operations $ 3.09 2.21 $ 5.49 4.26 Net income $ 3.09 2.21 $ 5.49 4.26 - ---------------------------------------------------------------------- Revenues(a) $ 47.1 41.8 $ 94.1 79.4 billion billion billion billion - ---------------------------------------------------------------------- a) Effective April 1, 2006, revenues no longer include the sales portion of buy/sell contracts, reflecting the adoption of EITF No. 04-13, "Accounting for Purchases and Sales of Inventory with the Same Counterparty." ConocoPhillips (NYSE:COP) today reported second-quarter net income of $5,186 million, or $3.09 per share, compared to $3,138 million, or $2.21 per share, for the same quarter in 2005. Revenues were $47.1 billion, versus $41.8 billion a year ago. Year-to-date excluding the first-quarter acquisition of Burlington Resources, the company reinvested 97 percent of its net income into the growth and development of oil and gas resources and its global refining business. "We delivered solid results in the second quarter and are pleased with the progress made integrating the Burlington Resources operations with ConocoPhillips' global portfolio," said Jim Mulva, chairman and chief executive officer. "However, we experienced unplanned downtime in both our upstream and downstream businesses, which impacted our operating performance. "With respect to our upstream operating performance, we produced 2.54 million BOE per day, including an estimated 0.40 million BOE per day from our LUKOIL Investment segment. In our downstream business, the worldwide refining crude oil capacity utilization rate of 91 percent reflects the impact of an extended full plant turnaround at the Trainer, Pa., refinery and other unplanned downtime. "We ended the quarter with debt of $29.5 billion and a debt-to-capital ratio of 27 percent. During the quarter, we generated $4.8 billion in cash from operations; funded $3.6 billion in capital projects, investments and loans to affiliates; paid $0.6 billion in dividends; reduced debt by $2.7 billion; and repurchased $0.4 billion of ConocoPhillips common stock." For the first six months of 2006, net income was $8,477 million, or $5.49 per share, versus $6,050 million, or $4.26 per share, for the same period a year ago. Revenues were $94.1 billion, versus $79.4 billion a year ago. The results for ConocoPhillips' business segments follow. Exploration and Production (E&P) Second-quarter financial results: E&P net income was $3,304 million, up from $2,553 million in the first quarter of 2006 and $1,929 million in the second quarter of 2005. The increase from the first quarter of 2006 primarily was due to the inclusion of Burlington Resources' results and benefits associated with new tax legislation in Canada, partially offset by a new production tax enacted in Venezuela. Higher realized crude oil prices, partially offset by lower realized natural gas prices, also contributed to higher earnings. Improved results from the second quarter of 2005 primarily were due to higher realized crude oil prices, the inclusion of Burlington Resources' results and net benefits associated with recently enacted tax legislation. Daily production from the E&P segment, including Canadian Syncrude and excluding the LUKOIL Investment segment, averaged 2.13 million barrels of oil equivalent (BOE) per day, improved from 1.61 million BOE per day in the previous quarter and 1.54 million BOE per day in the second quarter of 2005. The increase from the first quarter of 2006 primarily was due to the addition of the Burlington Resources assets and initial crude oil liftings from Libya, partially offset by lower volumes from the United Kingdom due to planned maintenance. The increase from the second quarter of 2005 primarily was due to the addition of the Burlington Resources assets, initial crude oil liftings from Libya and higher production from the Timor Sea, partially offset by lower production in Alaska due to unplanned downtime at Prudhoe Bay. Before-tax exploration expenses were $134 million in the second quarter of 2006, versus $112 million in the previous quarter and $121 million in the second quarter of 2005. Six months financial results: E&P net income for the first six months of 2006 was $5,857 million, up from $3,716 million in 2005, primarily from higher realized crude oil and natural gas prices, the inclusion of Burlington Resources' results and net benefits associated with recently enacted tax legislation. Midstream Second-quarter financial results: The Midstream segment, which includes the company's 50 percent interest in Duke Energy Field Services, LLC (DEFS), reported net income of $108 million, down from $110 million in the previous quarter and up from $68 million in the second quarter of 2005. The decrease from the previous quarter primarily was due to a reduction of the gain on a third-quarter 2005 Canadian asset sale and negative impacts from recent tax legislation, partially offset by higher natural gas liquids prices. The increase from the second quarter of 2005 primarily was due to higher natural gas liquids prices and increased ownership in DEFS, partially offset by a reduction of the gain on a third-quarter 2005 Canadian asset sale and negative impacts from recent tax legislation. Six months financial results: Midstream net income for the first six months of 2006 decreased to $218 million, from $453 million in 2005. The decrease primarily was due to the 2005 restructuring of ConocoPhillips' ownership in DEFS and negative impacts from recent tax legislation, partially offset by higher natural gas liquids prices. Refining and Marketing (R&M) Second-quarter financial results: R&M net income was $1,708 million, up from $390 million in the previous quarter and $1,110 million in the second quarter of 2005. The increase from the first quarter of 2006 primarily was the result of higher worldwide refining margins, higher domestic refining volumes due to lower turnaround activity and unplanned downtime, lower turnaround costs and benefits associated with tax law changes recently enacted by the state of Texas. The increase from the second quarter of 2005 primarily was the result of higher domestic refining margins, partially offset by lower worldwide marketing margins. The domestic refining crude oil capacity utilization rate for the second quarter was 91 percent, 8 percentage points higher than the previous quarter primarily due to significant turnaround activity and unplanned downtime in the first quarter, as well as the mid-April return to normal operations of the Alliance refinery in Belle Chasse, La. Crude oil capacity utilization for the second quarter was impacted by an extended full plant turnaround at the Trainer, Pa., refinery and unplanned downtime at the Lake Charles refinery in Westlake, La. International crude oil capacity utilization, which was impacted by unplanned downtime at the Humber refinery in the United Kingdom, was 94 percent, the same as the previous quarter. Worldwide, R&M's refining crude oil capacity utilization rate averaged 91 percent, compared with 85 percent in the previous quarter and 97 percent in the second quarter of 2005. Before-tax turnaround costs were $115 million in the second quarter of 2006, versus $163 million in the previous quarter and $106 million in the second quarter of 2005. Six months financial results: R&M net income for the first half of 2006 increased to $2,098 million, compared with $1,810 million for the first half of 2005. The increased earnings were due to higher domestic refining margins, partially offset by lower domestic refining volumes, lower worldwide marketing margins, higher turnaround and utility costs, and higher routine and hurricane-related maintenance. Results for the first six months of 2006 also did not benefit from the gain on asset sales that improved the results for the first six months of 2005. LUKOIL Investment Second-quarter financial results: Net income was $387 million, up from $249 million in the previous quarter and $148 million in the second quarter of 2005. This included ConocoPhillips' estimated 17.5 percent weighted-average equity share of OAO LUKOIL's (LUKOIL) income for the second quarter, based on market indicators and historical production trends for LUKOIL. The increase from the previous quarter and the second quarter of 2005 was mainly due to a $78 million benefit recognized in the second quarter of 2006 that aligned the company's estimate of LUKOIL's fourth-quarter 2005 and first-quarter 2006 net income to actual results. In addition, higher estimated prices and volumes and the company's increasing equity ownership position contributed to the improved results. For the second quarter of 2006, ConocoPhillips estimated its equity share of LUKOIL production was 403,000 BOE per day and its share of LUKOIL daily refining crude oil throughput was 168,000 barrels per day. Six months financial results: Net income for the first six months of 2006 increased to $636 million, from $258 million in 2005. The increase primarily was due to the company's increasing equity ownership, higher estimated prices and volumes, and a $78 million benefit recognized in the first half of 2006 that aligned the company's estimate of LUKOIL's fourth-quarter 2005 net income to actual results. ConocoPhillips' ownership in LUKOIL was 18.0 percent at the end of the second quarter based on the company's holdings of 153 million of LUKOIL's 850 million total shares issued. Chemicals Second-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 $103 million, compared with $149 million in the first quarter of 2006 and $63 million in the second quarter of 2005. The decrease from the previous quarter primarily was attributed to lower olefins and polyolefins margins, a first-quarter accrual related to a payment commitment on a business interruption claim and negative impacts in the second quarter from recent tax legislation, partially offset by lower utility costs. The increase from the second quarter of 2005 was largely due to higher olefins and polyolefins margins and volumes, partially offset by negative impacts from recent tax legislation. Six months financial results: Chemicals net income for the first six months of 2006 increased to $252 million, compared with $196 million in the first half of 2005. The increased earnings primarily were due to higher olefins and polyolefins margins and volumes, and payments received in 2006 related to a business interruption claim, partially offset by lower margins from aromatics and styrenics, higher utility costs, and negative impacts from recent tax legislation. Emerging Businesses The Emerging Businesses segment had a net loss of $12 million in the second quarter of 2006, compared with net income of $8 million in the first quarter of 2006 and a net loss of $8 million in the second quarter of 2005. The second quarter of 2006 was impacted by a domestic power asset write-down and decreased international power margins, partially offset by the early-May return to normal operations of the Immingham combined heat and power plant in the United Kingdom. Corporate and Other Second-quarter Corporate expenses, after tax, were $412 million, up from $168 million in the previous quarter and $172 million in the second quarter of 2005. The second quarter of 2006 reflected higher interest expense, higher acquisition-related charges and negative foreign exchange impacts. Total debt at the end of the second quarter was $29.5 billion, a reduction of $2.7 billion from the end of the first quarter. The company's debt-to-capital ratio was 27 percent, compared to 30 percent at the end of the first quarter. The cash balance was $0.7 billion at the end of the second quarter. The company's tax provision, excluding the $0.4 billion favorable impact from new tax legislation in Canada and Texas, was $3.9 billion, resulting in an effective tax rate of 45.1 percent without the new legislation and 40.3 percent with such changes. This is compared with 43.2 percent in the previous quarter and 42.4 percent in the second quarter of 2005. Outlook Mr. Mulva concluded: "We recently signed an agreement with the Saudi Arabian Oil Company to conduct a detailed evaluation for the proposed development of a 400,000 barrel-per-day, full-conversion refinery in Yanbu, Saudi Arabia. In addition, we recently signed an agreement with the International Petroleum Investment Company (IPIC) to study the development of a 500,000 barrel-per-day refinery in Fujairah, United Arab Emirates. Both ventures fit well with the company's overall strategy to invest in projects that expand our global refining presence, and provide significant new supplies of refined products to help meet growing requirements around the world. A second agreement signed with IPIC allows us to work together in identifying new downstream, as well as upstream, opportunities for joint investment. "Looking ahead to the third quarter, upstream production will be impacted by seasonal maintenance scheduled in Alaska, the United Kingdom and Venezuela. Downstream, we expect lower turnaround activity, with turnaround costs of approximately $50 million, before tax. "In July, the United Kingdom enacted higher income tax rates retroactive to the beginning of the year. In addition to the ongoing impact of the rate change, we anticipate a one-time, third-quarter charge of about $400 million, which includes approximately $125 million related to the company's operations for the first six months of 2006. "Our recently announced asset rationalization program is progressing as planned. We expect to finalize the listing of assets to be sold and to begin actively marketing them in the third quarter. "ConocoPhillips is committed to working proactively with consumers and governments around the world to find solutions to both short-term and long-term energy challenges. During the past three years, we have invested more capital into energy development than we have earned in net income. Our 2006 $18 billion capital program represents a 50 percent increase from last year, and it is three times what we spent just three years ago. This level of capital investment will enable us to develop new oil and natural gas supplies, expand our refining capabilities, and bring to fruition such major new projects as Arctic gas pipelines and liquefied natural gas production and transportation - -- projects that will help address the world's future energy needs." ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 38,000 employees, $162 billion of assets, and $188 billion of annualized revenues as of June 30, 2006. For more information, go to www.conocophillips.com. ConocoPhillips' quarterly conference call is scheduled for 11 a.m. Eastern time 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 press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Forward-looking statements relate to future events and anticipated results of operations, business strategies, and other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking. Where, in any forward-looking statement, the company expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that such expectation or belief will result or be achieved. The actual results of operations can and will be affected by a variety of risks and other matters including, but not limited to, crude oil and natural gas prices; refining and marketing margins; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas; unsuccessful exploratory drilling activities; lack of exploration success; potential disruption or unexpected technical difficulties in developing new products and manufacturing processes; potential failure of new products to achieve acceptance in the market; unexpected cost increases or technical difficulties in constructing or modifying company manufacturing or refining facilities; unexpected difficulties in manufacturing, transporting or refining synthetic crude oil; international monetary conditions and exchange controls; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation; general domestic and international economic and political conditions, as well as changes in tax and other laws applicable to our business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting our business generally as set forth in our filings with the Securities and Exchange Commission (SEC). Unless legally required, ConocoPhillips undertakes no obligation to update publicly any 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. The company uses 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 disclosures 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 Kristi DesJarlais, 281-293-4595 (media) or Gary Russell, 212-207-1996 (investors) EX-99.2 3 a5195970ex992.txt EXHIBIT 99.2 Exhibit 99.2 FINANCIAL AND OPERATIONAL TABLES
Preliminary FINANCIAL HIGHLIGHTS Millions of Dollars Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 ---- ---- ---- ---- Revenues and other income Sales and other operating revenues* $ 47,149 41,808 94,055 79,439 Equity in earnings of affiliates 1,164 701 2,124 1,754 Other income 163 105 224 339 ---------- ------ ------ ------ 48,476 42,614 96,403 81,532 ---------- ------ ------ ------ Costs and expenses Purchased crude oil, natural gas and products 29,448 28,523 62,903 54,095 Production and operating expenses 2,694 2,147 4,909 4,099 Selling, general and administrative expenses 610 539 1,176 1,078 Exploration expenses 134 121 246 292 Depreciation, depletion and amortization 1,965 985 3,145 2,026 Property impairments 50 9 50 31 Taxes other than income taxes* 4,421 4,664 8,808 9,152 Accretion on discounted liabilities 73 41 133 89 Interest and debt expense 360 127 475 265 Foreign currency transaction losses 18 21 40 18 Minority interests 21 5 39 15 ---------- ------ ------ ------ 39,794 37,182 81,924 71,160 ---------- ------ ------ ------ Income from continuing operations before income taxes 8,682 5,432 14,479 10,372 Provision for income taxes 3,496 2,301 6,002 4,318 ---------- ------ ------ ------ Income from continuing operations 5,186 3,131 8,477 6,054 Income (loss) from discontinued operations -- 7 -- (4) ---------- ------ ------ ------ Net income $ 5,186 3,138 8,477 6,050 ========== ===== ===== ===== Income per share of common stock (dollars) Basic Continuing operations $ 3.13 2.24 5.58 4.33 Discontinued operations -- 0.01 -- -- Net income $ 3.13 2.25 5.58 4.33 Diluted Continuing operations $ 3.09 2.21 5.49 4.26 Discontinued operations -- -- -- -- Net income $ 3.09 2.21 5.49 4.26 Average common shares outstanding (in thousands) Basic 1,654,758 1,396,724 1,519,593 1,397,305 Diluted 1,678,445 1,419,288 1,542,752 1,420,022 *Includes excise taxes on petroleum products sales: 3,922 4,338 7,912 8,493
1 Preliminary SELECTED FINANCIAL DATA
Millions of Dollars Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 ---- ---- ---- ---- INCOME (LOSS) FROM CONTINUING OPERATIONS E&P United States $ 1,300 $ 966 2,481 1,858 International 2,004 963 3,376 1,858 ------- ------- ----- ----- Total E&P 3,304 1,929 5,857 3,716 ------- ------- ----- ----- Midstream 108 68 218 453 ------- ------- ----- ----- R&M United States 1,433 936 1,730 1,506 International 275 174 368 304 ------- ------- ----- ----- Total R&M 1,708 1,110 2,098 1,810 ------- ------- ----- ----- LUKOIL Investment 387 148 636 258 Chemicals 103 63 252 196 Emerging Businesses (12) (8) (4) (16) Corporate and other (412) (179) (580) (363) ------- ------- ----- ----- Consolidated $ 5,186 $ 3,131 8,477 6,054 ======= ======= ===== ===== INCOME (LOSS) FROM DISCONTINUED OPERATIONS Corporate and other $ -- 7 -- (4) SUMMARY OF NET INCOME (LOSS) E&P United States $ 1,300 $ 966 2,481 1,858 International 2,004 963 3,376 1,858 ------- ------- ----- ----- Total E&P 3,304 1,929 5,857 3,716 ------- ------- ----- ----- Midstream 108 68 218 453 ------- ------- ----- ----- R&M United States 1,433 936 1,730 1,506 International 275 174 368 304 ------- ------- ----- ----- Total R&M 1,708 1,110 2,098 1,810 ------- ------- ----- ----- LUKOIL Investment 387 148 636 258 Chemicals 103 63 252 196 Emerging Businesses (12) (8) (4) (16) Corporate and other (412) (172) (580) (367) ------- ------- ----- ----- Net Income $ 5,186 $ 3,138 8,477 6,050 ======= ======= ===== =====
2 Preliminary SELECTED FINANCIAL DATA
Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 ---- ---- ---- ---- INCOME FROM CONTINUING OPERATIONS Effective tax rate % 40.3 % 42.4 41.5 41.6 Millions of Dollars FOREIGN CURRENCY GAINS (LOSSES) AFTER-TAX E&P $ (34) (8) (27) 4 Midstream -- 7 -- 7 R&M 25 (18) 31 (36) LUKOIL Investment 1 -- 1 -- Chemicals -- -- -- -- Emerging Businesses -- -- -- -- Corporate and other (36) (11) (44) (4) ------- ----- ----- ----- $ (44) (30) (39) (29) ======= ===== ===== ===== CASH FLOWS FROM OPERATING ACTIVITIES Income from continuing operations $ 5,186 3,131 8,477 6,054 Depreciation, depletion and amortization 1,965 985 3,145 2,026 Property impairments 50 9 50 31 Dry hole costs and leasehold impairments 47 47 85 156 Accretion on discounted liabilities 73 41 133 89 Deferred taxes (390) 369 (222) 492 Undistributed equity earnings (687) (414) (754) (1,219) Net gain on asset dispositions (53) (65) (56) (242) Other 189 (113) (14) (191) Working capital adjustments (1,536) (1,224) (1,200) (336) ------- ----- ----- ----- Net cash provided by continuing operations 4,844 2,766 9,644 6,860 Net cash provided by discontinued operations -- 2 -- (3) ------- ----- ----- ----- Net cash provided by operating activities $ 4,844 2,768 9,644 6,857 ======= ===== ===== ===== CAPITAL EXPENDITURES AND INVESTMENTS E&P United States $ 756 576 1,175 898 International 1,416 1,761 3,203 2,645 ------- ----- ----- ----- 2,172 2,337 4,378 3,543 Midstream 1 -- 2 1 R&M 475 360 2,110 635 LUKOIL Investment 648 384 1,260 708 Chemicals -- -- -- -- Emerging Businesses 28 7 40 3 Corporate and other 78 37 126 57 ------- ----- ----- ----- $ 3,402 3,125 7,916 4,947 ======= ======= ===== =====
OTHER At June 30, 2006 At December 31, 2005 Total debt $29,510 12,516 Common stockholders' equity $77,377 52,731
3 Preliminary OPERATING HIGHLIGHTS BY SEGMENT
Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 ---- ---- ---- ---- Thousands of Barrels Daily E&P Crude oil produced United States Alaska 279 297 281 303 Lower 48 120 63 92 62 ----- --- --- --- 399 360 373 365 Norway 192 195 190 201 United Kingdom 57 60 59 60 Canada 27 23 25 23 China 34 25 30 24 Indonesia 14 16 14 19 Vietnam 22 26 26 26 Timor Sea 39 21 39 29 Libya 74 -- 37 -- Other 66 54 58 54 ----- --- --- --- Total consolidated 924 780 851 801 Equity affiliates 121 123 123 122 ----- --- --- --- Total Worldwide 1,045 903 974 923 ===== === === === Syncrude 19 21 18 18 ===== === === === Natural gas liquids produced United States Alaska* 20 16 21 20 Lower 48 70 31 50 29 ----- --- --- --- 90 47 71 49 Norway 8 9 9 9 Canada 30 10 20 10 Timor Sea 20 9 20 13 Other 4 5 5 6 ----- --- --- --- Total Worldwide 152 80 125 87 ===== === === === *Includes reinjected volumes sold lease-to-lease 14 1 14 7 Millions of Cubic Feet Daily Natural gas produced* United States Alaska 163 148 163 166 Lower 48 2,265 1,195 1,767 1,182 ----- ----- ----- ----- 2,428 1,343 1,930 1,348 Norway 260 268 265 283 United Kingdom 796 741 823 782 Canada 1,204 422 816 420 China 10 -- 5 -- Timor Sea 251 35 198 35 Indonesia 323 287 309 280 Vietnam 19 14 22 16 Other 207 81 164 78 ----- ----- ----- ----- Total consolidated 5,498 3,191 4,532 3,242 Equity affiliates 10 7 10 7 ----- ----- ----- ----- Total Worldwide 5,508 3,198 4,542 3,249 *Represents quantities available for sale. Excludes gas equivalent of NGL shown above. Liquefied natural gas sales 432 96 349 114 LUKOIL Investment Production (MBOE/D)* 403 223 363 213 Refinery crude oil throughput (MB/D)* 168 101 165 96 *Represents our estimated net share of LUKOIL.
4 Preliminary OPERATING HIGHLIGHTS
Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 E&P Per Unit Average sales prices Crude oil (per barrel) United States Alaska $ 66.02 49.22 62.33 46.55 Lower 48 59.63 43.58 57.08 42.45 Total U.S. 64.09 48.21 61.06 45.86 International 67.27 49.41 64.12 47.68 Total consolidated 65.89 48.88 62.75 46.85 Equity affiliates * 52.28 36.11 47.53 33.59 Total Worldwide 64.34 46.93 60.76 45.04 Natural gas-lease (per MCF) United States Alaska 3.42 2.49 3.50 2.72 Lower 48 5.81 6.20 6.41 5.93 Total U.S. 5.78 6.07 6.37 5.83 International 5.92 5.16 6.43 5.10 Total consolidated 5.86 5.53 6.40 5.38 Equity affiliates * 0.36 0.32 0.29 0.30 Total Worldwide 5.85 5.52 6.39 5.38 *Excludes our equity share of LUKOIL reported in the LUKOIL Investment segment Midstream Thousands of Barrels Daily Natural gas liquids extracted Consolidated United States 22 21 22 22 International - 44 - 48 Equity affiliates United States** 183 112 181 111 International 6 6 6 6 ----- ----- ----- ----- 211 183 209 187 **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 $ 41.73 32.49 39.69 32.22 DEFS 41.18 31.33 39.24 30.97 **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.
5
Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 Thousands of Barrels Daily R&M United States Crude oil capacity 2,208 2,182 2,208 2,178 Crude oil runs 2,000 2,133 1,921 2,046 Refinery production 2,198 2,349 2,093 2,247 International* Crude oil capacity 693 428 608 428 Crude oil runs 649 402 570 415 Refinery production 695 410 599 427 U.S. Petroleum products outside sales Automotive gasoline 1,300 1,426 1,279 1,364 Distillates 620 680 623 662 Aviation fuels 200 214 194 206 Other products 555 566 536 514 ----- ----- ----- ----- 2,675 2,886 2,632 2,746 International 871 477 784 486 ----- ----- ----- ----- 3,546 3,363 3,416 3,232 ===== ===== ===== ===== Per Gallon U.S. Average sales prices** Automotive gasoline-wholesale $ 2.32 1.67 2.06 1.56 Automotive gasoline-retail 2.47 1.85 2.19 1.70 Distillates-wholesale 2.24 1.66 2.08 1.57 *Includes ConocoPhillips' share of equity affiliates, except for our share of LUKOIL, which is reported in the LUKOIL Investment segment. **Excludes excise taxes.
6 EX-99.3 4 a5195970ex993.txt EXHIBIT 99.3 Exhibit 99.3 SUPPLEMENTAL FINANCIAL INFORMATION 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 1,300 2,481 International E&P 895 963 1,181 1,105 4,144 1,372 2,004 3,376 - --------------------------------------------------------------------------------- -------------------------------------------- Total E&P 1,787 1,929 2,288 2,430 8,434 2,553 3,304 5,857 - --------------------------------------------------------------------------------- -------------------------------------------- Midstream 385 68 88 147 688 110 108 218 - --------------------------------------------------------------------------------- -------------------------------------------- U.S. R&M 570 936 1,096 805 3,407 297 1,433 1,730 International R&M 130 174 294 251 849 93 275 368 - --------------------------------------------------------------------------------- -------------------------------------------- Total R&M 700 1,110 1,390 1,056 4,256 390 1,708 2,098 - --------------------------------------------------------------------------------- -------------------------------------------- LUKOIL Investment 110 148 267 189 714 249 387 636 Chemicals 133 63 13 114 323 149 103 252 Emerging Businesses (8) (8) - (4) (20) 8 (12) (4) Corporate and Other (184) (179) (242) (150) (755) (168) (412) (580) - --------------------------------------------------------------------------------- -------------------------------------------- Consolidated 2,923 3,131 3,804 3,782 13,640 3,291 5,186 8,477 ================================================================================= ============================================ 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 1,300 2,481 International E&P 895 963 1,181 1,103 4,142 1,372 2,004 3,376 - --------------------------------------------------------------------------------- -------------------------------------------- Total E&P 1,787 1,929 2,288 2,426 8,430 2,553 3,304 5,857 - --------------------------------------------------------------------------------- -------------------------------------------- Midstream 385 68 88 147 688 110 108 218 - --------------------------------------------------------------------------------- -------------------------------------------- U.S. R&M 570 936 1,096 727 3,329 297 1,433 1,730 International R&M 130 174 294 246 844 93 275 368 - --------------------------------------------------------------------------------- -------------------------------------------- Total R&M 700 1,110 1,390 973 4,173 390 1,708 2,098 - --------------------------------------------------------------------------------- -------------------------------------------- LUKOIL Investment 110 148 267 189 714 249 387 636 Chemicals 133 63 13 114 323 149 103 252 Emerging Businesses (8) (8) - (5) (21) 8 (12) (4) Corporate and Other (195) (172) (246) (165) (778) (168) (412) (580) - --------------------------------------------------------------------------------- -------------------------------------------- Consolidated 2,912 3,138 3,800 3,679 13,529 3,291 5,186 8,477 ================================================================================= ============================================
Page 1 of 12 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 2,062 3,915 International E&P 2,020 2,152 2,567 2,550 9,289 2,862 3,814 6,676 - --------------------------------------------------------------------------------- -------------------------------------------- Total E&P 3,408 3,656 4,295 4,569 15,928 4,715 5,876 10,591 - --------------------------------------------------------------------------------- -------------------------------------------- Midstream 449 107 138 208 902 173 187 360 - --------------------------------------------------------------------------------- -------------------------------------------- U.S. R&M 901 1,485 1,766 1,379 5,531 512 2,260 2,772 International R&M 160 203 368 330 1,061 112 343 455 - --------------------------------------------------------------------------------- -------------------------------------------- Total R&M 1,061 1,688 2,134 1,709 6,592 624 2,603 3,227 - --------------------------------------------------------------------------------- -------------------------------------------- LUKOIL Investment 115 153 275 196 739 257 398 655 Chemicals 187 84 (3) 148 416 209 134 343 Emerging Businesses (13) (13) (2) (10) (38) 9 (20) (11) Corporate and Other (267) (243) (283) (199) (992) (190) (496) (686) - --------------------------------------------------------------------------------- -------------------------------------------- Consolidated 4,940 5,432 6,554 6,621 23,547 5,797 8,682 14,479 ================================================================================= ============================================ Income from Continuing Operations Effective Tax Rates U.S. E&P 35.7% 35.8% 35.9% 34.4% 35.4% 36.3% 37.0% 36.6% International E&P 55.7% 55.3% 54.0% 56.7% 55.4% 52.1% 47.5% 49.4% - --------------------------------------------------------------------------------- -------------------------------------------- Total E&P 47.6% 47.2% 46.7% 46.8% 47.0% 45.9% 43.8% 44.7% - --------------------------------------------------------------------------------- -------------------------------------------- Midstream 14.3% 36.4% 36.2% 29.3% 23.7% 36.4% 42.2% 39.4% - --------------------------------------------------------------------------------- -------------------------------------------- U.S. R&M 36.7% 37.0% 37.9% 41.6% 38.4% 42.0% 36.6% 37.6% International R&M 18.8% 14.3% 20.1% 23.9% 20.0% 17.0% 19.8% 19.1% - --------------------------------------------------------------------------------- -------------------------------------------- Total R&M 34.0% 34.2% 34.9% 38.2% 35.4% 37.5% 34.4% 35.0% - --------------------------------------------------------------------------------- -------------------------------------------- LUKOIL Investment 4.3% 3.3% 2.9% 3.6% 3.4% 3.1% 2.8% 2.9% Chemicals 28.9% 25.0% -- 23.0% 22.4% 28.7% 23.1% 26.5% Emerging Businesses 38.5% 38.5% -- 60.0% 47.4% 11.1% 40.0% 63.6% Corporate and Other 31.1% 26.3% 14.5% 24.6% 23.9% 11.6% 16.9% 15.5% - --------------------------------------------------------------------------------- -------------------------------------------- Consolidated 40.8% 42.4% 42.0% 42.9% 42.1% 43.2% 40.3% 41.5% ================================================================================= ============================================
Page 2 of 12
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 - 15 15 Property impairments - - - - - - (26) (26) Insurance premium adjustments - (5) (4) (8) (17) (2) - (2) Pending claims and settlements - 15 - (23) (8) - - - Enacted tax legislation - - - - - - 2 2 - --------------------------------------------------------------------------------- -------------------------------------------- Total 90 10 (4) (31) 65 (2) (9) (11) - --------------------------------------------------------------------------------- -------------------------------------------- International E&P Gain (loss) on asset sales - 15 - - 15 - 25 25 Insurance premium adjustments - (10) (12) (19) (41) (10) - (10) Canada tax law change - - - 38 38 - 401 401 Pending claims and settlements - - - - - - - - - --------------------------------------------------------------------------------- -------------------------------------------- Total - 5 (12) 19 12 (10) 426 416 - --------------------------------------------------------------------------------- -------------------------------------------- Total E&P 90 15 (16) (12) 77 (12) 417 405 - --------------------------------------------------------------------------------- -------------------------------------------- Midstream Property impairments (6) (7) - - (13) - - - DEFS' sale of TEPPCO general partnership 306 - - - 306 - - - Enacted tax legislation - - - - - - (6) (6) - --------------------------------------------------------------------------------- -------------------------------------------- Total 300 (7) - - 293 - (6) (6) - --------------------------------------------------------------------------------- -------------------------------------------- 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 - - - - - - - - Enacted tax legislation - - - - - - 34 34 - --------------------------------------------------------------------------------- -------------------------------------------- Total 31 (7) (25) (71) (72) (6) 34 28 - --------------------------------------------------------------------------------- -------------------------------------------- International R&M Gain (loss) on asset sales - 25 - - 25 - - - Insurance premium adjustments - - - - - (1) - (1) - --------------------------------------------------------------------------------- -------------------------------------------- Total - 25 - - 25 (1) - (1) - --------------------------------------------------------------------------------- -------------------------------------------- Total R&M 31 18 (25) (71) (47) (7) 34 27 - --------------------------------------------------------------------------------- -------------------------------------------- LUKOIL Investment - - - - - - - - - --------------------------------------------------------------------------------- -------------------------------------------- Total - - - - - - - - - --------------------------------------------------------------------------------- -------------------------------------------- Chemicals Enacted tax legislation - - - - - - (5) (5) - --------------------------------------------------------------------------------- -------------------------------------------- Total - - - - - - (5) (5) - --------------------------------------------------------------------------------- -------------------------------------------- Emerging Businesses Property write-down - - - - - - (14) (14) - --------------------------------------------------------------------------------- -------------------------------------------- Total - - - - - - (14) (14) - --------------------------------------------------------------------------------- -------------------------------------------- Corporate and Other Acquisition-related expenses - - - - - (5) (39) (44) Premium on early debt retirement (8) - (42) (42) (92) - - - Pending claims and settlements - - - - - (15) - (15) Canada tax law change - - - - - - (10) (10) - --------------------------------------------------------------------------------- -------------------------------------------- Total (8) - (42) (42) (92) (20) (49) (69) - --------------------------------------------------------------------------------- -------------------------------------------- Total Company 413 26 (83) (125) 231 (39) 377 338 ================================================================================= ============================================
Page 3 of 12 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 5,186 8,477 DD&A and property impairments 1,063 994 1,049 1,189 4,295 1,180 2,015 3,195 Dry hole costs and leasehold impairment 109 47 55 138 349 38 47 85 Accretion on discounted liabilities 48 41 46 58 193 60 73 133 Deferred income taxes 123 369 261 348 1,101 168 (390) (222) Undistributed equity earnings (805) (414) (463) (92) (1,774) (67) (687) (754) Net (gain) loss on asset dispositions (177) (65) (22) (14) (278) (3) (53) (56) Other (78) (113) 192 (140) (139) (203) 189 (14) Net working capital changes 888 (1,224) 1,177 (595) 246 336 (1,536) (1,200) 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 4,844 9,644 - --------------------------------------------------------------------------------- -------------------------------------------- Cash Flows from Investing Activities Capital expenditures and investments*: E&P (1,206) (2,337) (1,475) (1,666) (6,684) (2,206) (2,172) (4,378) Midstream (1) - (838) - (839) (1) (1) (2) R&M (275) (360) (440) (663) (1,738) (1,635) (475) (2,110) LUKOIL Investment (324) (384) (815) (637) (2,160) (612) (648) (1,260) Chemicals - - - - - - - - Emerging Businesses 4 (7) (2) - (5) (12) (28) (40) Corporate and Other (20) (37) (56) (81) (194) (48) (78) (126) - --------------------------------------------------------------------------------- -------------------------------------------- Total capital expend. & investments (1,822) (3,125) (3,626) (3,047) (11,620) (4,514) (3,402) (7,916) Acquisition of Burlington Resources Inc.* - - - - - (14,190) (94) (14,284) Proceeds from asset dispositions 87 221 300 160 768 5 68 73 Long-term advances to/collections from affiliates and other investments 25 4 (58) (135) (164) (115) (151) (266) Discontinued operations - - - - - - - - - --------------------------------------------------------------------------------- -------------------------------------------- Net Cash Used for Investing Activities (1,710) (2,900) (3,384) (3,022) (11,016) (18,814) (3,579) (22,393) - --------------------------------------------------------------------------------- -------------------------------------------- Cash Flows from Financing Activities Net issuance (repayment) of debt (986) (13) (513) (1,038) (2,550) 15,324 (2,756) 12,568 Issuance of stock 155 108 114 25 402 40 64 104 Repurchase of stock (194) (382) (589) (759) (1,924) - (425) (425) Dividends (348) (432) (430) (429) (1,639) (496) (595) (1,091) Other 64 33 (10) (60) 27 (27) (20) (47) - --------------------------------------------------------------------------------- -------------------------------------------- Net Cash Provided by (Used for) Financing Activities (1,309) (686) (1,428) (2,261) (5,684) 14,841 (3,732) 11,109 - --------------------------------------------------------------------------------- -------------------------------------------- Effect of Exchange Rate Changes (36) (62) (22) 19 (101) (33) 113 80 - --------------------------------------------------------------------------------- -------------------------------------------- Net Change in Cash and Cash Equivalents 1,034 (880) 1,262 (589) 827 794 (2,354) (1,560) Cash and cash equivalents at beginning of period 1,387 2,421 1,541 2,803 1,387 2,214 3,008 2,214 - --------------------------------------------------------------------------------- -------------------------------------------- Cash and Cash Equivalents at End of Period 2,421 1,541 2,803 2,214 2,214 3,008 654 654 ================================================================================= ============================================ * Net of cash acquired.
Page 4 of 12 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 3,304 5,857 ================================================================================= ============================================ Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 1,600 1,537 1,521 1,590 1,562 1,610 2,134 1,874 - --------------------------------------------------------------------------------- -------------------------------------------- E&P segment plus LUKOIL Investment segment: 1,801 1,760 1,787 1,883 1,808 1,932 2,537 2,237 - --------------------------------------------------------------------------------- -------------------------------------------- Crude Oil and Condensate (MB/D) Consolidated 822 780 766 777 786 777 924 851 Equity affiliates 120 123 124 116 121 126 121 123 - --------------------------------------------------------------------------------- -------------------------------------------- Total 942 903 890 893 907 903 1,045 974 ================================================================================= ============================================ Sales of crude oil produced (MB/D) 940 932 883 916 918 913 1,040 976 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids (MB/D) 94 80 92 99 91 97 152 125 - ------------------------------------------------------------------------------------------------------------------------------- Natural Gas (MMCF/D) Consolidated 3,295 3,191 3,099 3,468 3,263 3,554 5,498 4,532 Equity affiliates 5 7 10 3 7 11 10 10 - --------------------------------------------------------------------------------- -------------------------------------------- Total 3,300 3,198 3,109 3,471 3,270 3,565 5,508 4,542 ================================================================================= ============================================ Canadian Syncrude (MB/D) 14 21 21 20 19 16 19 18 - --------------------------------------------------------------------------------- -------------------------------------------- Industry Prices (Platt's) Crude Oil ($/bbl) WTI spot 49.70 53.03 63.05 59.99 56.44 63.28 70.40 66.84 Brent dated 47.50 51.59 61.54 56.90 54.38 61.75 69.62 65.69 Natural Gas ($/mmbtu) Henry Hub -- First of Month 6.27 6.74 8.53 13.00 8.64 9.01 6.80 7.91 - --------------------------------------------------------------------------------- -------------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated 44.89 48.88 58.49 55.06 51.74 58.97 65.89 62.75 Equity affiliates 30.38 36.11 45.25 38.90 37.79 43.38 52.28 47.53 Total 43.15 46.93 56.64 53.05 49.87 56.63 64.34 60.76 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids ($/bbl) 33.44 35.10 41.54 42.75 38.32 43.13 41.75 42.25 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas ($/mcf) Consolidated 5.24 5.53 6.40 7.96 6.32 7.26 5.86 6.40 Equity affiliates 0.25 0.32 0.20 0.28 0.26 0.23 0.36 0.29 Total 5.24 5.52 6.38 7.94 6.30 7.24 5.85 6.39 - --------------------------------------------------------------------------------- -------------------------------------------- Exploration Charges ($ Millions) Dry Holes 88 30 32 83 233 19 15 34 Lease Impairments 20 18 23 55 116 19 33 52 - --------------------------------------------------------------------------------- -------------------------------------------- Total Non-Cash Charges 108 48 55 138 349 38 48 86 Other (G&G and Lease Rentals) 63 73 85 91 312 74 86 160 - --------------------------------------------------------------------------------- -------------------------------------------- Total Exploration Charges 171 121 140 229 661 112 134 246 ================================================================================= ============================================ Depreciation, Depletion and Amortization (DD&A) ($ Millions) 819 755 823 915 3,312 910 1,659 2,569 - --------------------------------------------------------------------------------- --------------------------------------------
Page 5 of 12 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 1,300 2,481 ================================================================================= ============================================ Alaska ($ Millions) 532 572 730 718 2,552 692 760 1,452 - --------------------------------------------------------------------------------- -------------------------------------------- Lower 48 ($ Millions) 360 394 377 605 1,736 489 540 1,029 - --------------------------------------------------------------------------------- -------------------------------------------- Production Total U.S. (MBOE/D) 648 631 617 636 633 636 894 766 - --------------------------------------------------------------------------------- -------------------------------------------- Crude Oil and Condensate (MB/D) Alaska 309 297 281 291 294 283 279 281 Lower 48 62 63 56 54 59 64 120 92 - --------------------------------------------------------------------------------- -------------------------------------------- Total 371 360 337 345 353 347 399 373 ================================================================================= ============================================ Sales of crude oil produced (MB/D) 386 352 352 337 357 363 398 380 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids (MB/D)* Alaska 24 16 18 21 20 22 20 21 Lower 48 27 31 30 31 30 29 70 50 - --------------------------------------------------------------------------------- -------------------------------------------- Total 51 47 48 52 50 51 90 71 ================================================================================= ============================================ *Includes reinjection volumes sold lease-to-lease: 13 8 13 9 14 14 14 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas (MMCF/D) Alaska 185 148 173 172 169 163 163 163 Lower 48 1,169 1,195 1,218 1,264 1,212 1,264 2,265 1,767 - --------------------------------------------------------------------------------- -------------------------------------------- Total 1,354 1,343 1,391 1,436 1,381 1,427 2,428 1,930 ================================================================================= ============================================ Average Realized Prices Crude Oil and Condensate ($/bbl) Alaska North Slope 38.93 43.92 53.30 52.34 46.95 52.92 59.89 56.29 - --------------------------------------------------------------------------------- -------------------------------------------- West Coast 44.15 49.22 58.70 57.61 52.24 58.87 66.02 62.33 - --------------------------------------------------------------------------------- -------------------------------------------- Lower 48 41.29 43.58 50.00 46.62 45.24 52.21 59.63 57.08 - --------------------------------------------------------------------------------- -------------------------------------------- Total U.S. 43.69 48.21 57.31 55.86 51.09 57.70 64.09 61.06 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids ($/bbl) Alaska 44.33 49.20 57.11 57.58 51.30 58.88 65.25 61.54 - --------------------------------------------------------------------------------- -------------------------------------------- Lower 48 30.96 31.22 39.92 42.89 36.43 38.20 38.29 38.26 - --------------------------------------------------------------------------------- -------------------------------------------- Total U.S. 34.68 37.26 43.95 45.94 40.40 43.00 40.45 41.28 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas ($/mcf) Alaska 2.96 2.49 2.57 3.01 2.75 3.58 3.42 3.50 - --------------------------------------------------------------------------------- -------------------------------------------- Lower 48 5.66 6.20 7.67 9.37 7.28 7.50 5.81 6.41 - --------------------------------------------------------------------------------- -------------------------------------------- Total U.S. 5.57 6.07 7.48 9.17 7.12 7.42 5.78 6.37 - --------------------------------------------------------------------------------- -------------------------------------------- Kenai, Alaska LNG Sales Volume (MMCF/D) 132 96 123 118 117 128 126 127 - --------------------------------------------------------------------------------- -------------------------------------------- - --------------------------------------------------------------------------------- -------------------------------------------- Sales price per MCF 5.27 5.24 5.90 6.36 5.71 6.45 5.16 5.81 - --------------------------------------------------------------------------------- -------------------------------------------- - --------------------------------------------------------------------------------- -------------------------------------------- U.S. Exploration Charges ($ Millions) Dry Holes 74 8 (2) 3 83 8 3 11 Lease Impairments 10 9 9 10 38 8 15 23 - --------------------------------------------------------------------------------- -------------------------------------------- Total Non-Cash Charges 84 17 7 13 121 16 18 34 Other (G&G and Lease Rentals) 12 17 19 7 55 14 1 15 - --------------------------------------------------------------------------------- -------------------------------------------- Total U.S. Exploration Charges 96 34 26 20 176 30 19 49 ================================================================================= ============================================ Alaska Only 85 13 11 1 110 18 (7) 11 - --------------------------------------------------------------------------------- -------------------------------------------- DD&A ($ Millions) Alaska 133 134 126 142 535 132 135 267 Lower 48 219 172 243 231 865 251 634 885 - --------------------------------------------------------------------------------- -------------------------------------------- Total U.S. 352 306 369 373 1,400 383 769 1,152 ================================================================================= ============================================
Page 6 of 12
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 2,004 3,376 ================================================================================= ============================================ Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 952 906 904 954 929 974 1,240 1,108 - --------------------------------------------------------------------------------- -------------------------------------------- Crude Oil and Condensate (MB/D) Consolidated Norway 207 195 198 188 197 188 192 190 United Kingdom 61 60 56 62 60 62 57 59 Canada 23 23 22 22 23 22 27 25 China 22 25 22 23 23 25 34 30 Indonesia 21 16 10 13 15 14 14 14 Vietnam 27 26 30 37 29 31 22 26 Timor Sea 36 21 38 36 33 39 39 39 Libya - - - - - - 74 37 Other 54 54 53 51 53 49 66 58 Equity affiliates 120 123 124 116 121 126 121 123 - --------------------------------------------------------------------------------- -------------------------------------------- Total 571 543 553 548 554 556 646 601 ================================================================================= ============================================ Sales of crude oil produced (MB/D) 554 580 531 579 561 550 642 596 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids (MB/D) Norway 10 9 10 11 9 11 8 9 Canada 10 10 10 10 10 9 30 20 Timor Sea 17 9 20 19 16 20 20 20 Other 6 5 4 7 6 6 4 5 - --------------------------------------------------------------------------------- -------------------------------------------- Total 43 33 44 47 41 46 62 54 ================================================================================= ============================================ Natural Gas (MMCF/D) Consolidated Norway 298 268 259 264 272 269 260 265 United Kingdom 824 741 588 851 751 851 796 823 Canada 417 422 429 430 425 424 1,204 816 China - - - - - - 10 5 Timor Sea 35 35 35 33 34 144 251 198 Indonesia 273 287 303 330 298 294 323 309 Vietnam 18 14 20 19 18 24 19 22 Other 76 81 74 105 84 121 207 164 Equity affiliates 5 7 10 3 7 11 10 10 - --------------------------------------------------------------------------------- -------------------------------------------- Total 1,946 1,855 1,718 2,035 1,889 2,138 3,080 2,612 ================================================================================= ============================================ Canadian Syncrude (MB/D) 14 21 21 20 19 16 19 18 - --------------------------------------------------------------------------------- -------------------------------------------- Darwin, Australia LNG Sales (MMCF/D) - - - - - 136 305 221 - --------------------------------------------------------------------------------- --------------------------------------------
Page 7 of 12
INTERNATIONAL E&P (continued) 2005 2006 --------------------------------------------- -------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD --------------------------------------------- -------------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated Norway 45.52 50.21 60.42 56.36 53.18 61.36 68.64 65.00 United Kingdom 49.47 48.02 60.83 54.87 53.13 59.13 65.32 63.13 Canada 36.96 41.09 54.74 46.44 44.70 44.28 60.86 53.34 China 41.51 46.95 51.89 49.86 47.85 57.90 66.68 63.12 Indonesia 46.51 47.57 61.77 47.00 49.45 57.94 58.15 58.05 Vietnam 47.77 53.32 58.52 52.77 53.23 62.34 68.53 65.00 Timor Sea 47.99 50.90 59.03 52.90 52.95 60.37 66.98 63.52 Libya - - - - - - 68.07 68.07 Other 44.56 50.11 60.99 57.03 52.93 62.95 69.20 66.45 Equity affiliates 30.38 36.11 45.25 38.90 37.79 43.38 52.28 47.53 Total 42.77 46.16 56.19 51.41 49.09 55.92 64.50 60.56 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids ($/bbl) Norway 30.63 28.20 37.29 33.81 32.45 42.55 40.99 41.79 Canada 37.37 37.66 44.22 49.63 42.20 46.21 46.73 46.61 Timor Sea 34.40 35.99 40.45 47.29 40.11 46.68 41.35 43.82 Other 21.34 22.30 26.63 20.30 22.17 27.16 33.82 30.28 Total 32.35 32.03 39.29 40.04 36.25 43.25 43.28 43.27 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas ($/mcf) Consolidated Norway 5.03 5.30 5.13 6.40 5.46 7.28 7.09 7.19 United Kingdom 5.54 5.01 4.92 7.64 5.89 8.81 6.84 7.85 Canada 5.33 6.14 7.54 9.86 7.25 6.28 5.47 5.68 China - - - - - - 1.90 1.90 Timor Sea 0.52 0.52 0.56 0.61 0.55 0.67 0.65 0.66 Indonesia 5.08 5.96 6.73 6.23 6.03 7.45 7.53 7.49 Vietnam 1.04 1.04 1.05 1.07 1.05 1.07 1.07 1.07 Other 0.70 0.59 0.66 0.72 0.67 0.82 2.57 1.93 Equity affiliates 0.25 0.32 0.20 0.28 0.26 0.23 0.36 0.29 Total 5.03 5.15 5.57 7.16 5.76 7.13 5.90 6.41 - --------------------------------------------------------------------------------- -------------------------------------------- International Exploration Charges ($ Millions) Dry Holes 14 22 34 80 150 11 12 23 Lease Impairments 10 9 14 45 78 11 18 29 - --------------------------------------------------------------------------------- -------------------------------------------- Total Non-Cash Charges 24 31 48 125 228 22 30 52 Other (G&G and Lease Rentals) 51 56 66 84 257 60 85 145 - --------------------------------------------------------------------------------- -------------------------------------------- Total International Exploration Charges 75 87 114 209 485 82 115 197 ================================================================================= ============================================ DD&A ($ Millions) 467 449 454 542 1,912 527 890 1,417 - --------------------------------------------------------------------------------- --------------------------------------------
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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 1,708 2,098 ================================================================================= ============================================ United States ($ Millions) 570 936 1,096 727 3,329 297 1,433 1,730 - --------------------------------------------------------------------------------- -------------------------------------------- International ($ Millions) 130 174 294 246 844 93 275 368 - --------------------------------------------------------------------------------- -------------------------------------------- Market Indicators U.S. East Coast Crack Spread ($/bbl) 6.40 8.80 14.81 9.32 9.83 7.52 15.21 11.36 U.S. Gulf Coast Crack Spread ($/bbl) 6.37 9.63 17.42 10.27 10.92 8.28 17.26 12.77 U.S. Group Central Crack Spread ($/bbl) 7.92 11.51 17.06 11.93 12.10 9.81 19.60 14.71 U.S. West Coast Crack Spread ($/bbl) 19.61 22.20 26.61 16.29 21.18 18.87 32.47 25.67 U.S. Weighted 3:2:1 Crack Spread ($/bbl) 9.24 12.35 18.51 11.69 12.95 10.56 20.39 15.47 NW Europe Crack Spread ($/bbl) 11.14 15.09 16.53 13.68 14.11 10.18 15.20 12.69 Singapore 3:1:2 Crack Spread ($/bbl) 13.23 13.95 16.70 12.43 14.08 10.58 19.30 14.94 U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.16 2.05 0.70 2.63 1.38 0.71 1.83 1.27 - --------------------------------------------------------------------------------- -------------------------------------------- Realized Margins Refining Margin ($/bbl) U.S. 10.11 11.23 14.61 12.71 12.17 10.18 17.23 13.91 International 8.43 8.89 11.19 8.95 9.38 5.30 7.64 6.67 - --------------------------------------------------------------------------------- -------------------------------------------- Marketing Margin ($/bbl) U.S. 0.46 2.01 0.18 2.52 1.28 0.12 0.48 0.31 International 5.61 8.56 6.80 8.62 7.43 6.07 6.67 6.38 - --------------------------------------------------------------------------------- -------------------------------------------- DD&A ($ Millions) 194 197 197 230 818 239 253 492 - --------------------------------------------------------------------------------- -------------------------------------------- Turnaround Expense ($ Millions) 108 106 53 86 353 163 115 278 - --------------------------------------------------------------------------------- -------------------------------------------- Eastern U.S. Crude Oil Charge Input (MB/D) 403 414 409 416 410 354 281 318 Total Charge Input (MB/D) 449 454 456 446 451 359 309 334 Crude Oil Capacity Utilization (%) 95% 98% 97% 98% 97% 84% 66% 75% Clean Product Yield (%) 92% 88% 89% 91% 90% 90% 87% 89% - --------------------------------------------------------------------------------- -------------------------------------------- U.S. Gulf Coast Crude Oil Charge Input (MB/D) 659 715 596 397 591 529 681 606 Total Charge Input (MB/D) 733 835 674 467 676 587 777 683 Crude Oil Capacity Utilization (%) 92% 100% 83% 55% 83% 72% 93% 83% Clean Product Yield (%) 73% 79% 80% 80% 78% 74% 81% 78% - --------------------------------------------------------------------------------- -------------------------------------------- Central U.S. Crude Oil Charge Input (MB/D) 538 594 620 619 594 571 619 595 Total Charge Input (MB/D) 577 625 653 666 630 613 663 638 Crude Oil Capacity Utilization (%) 84% 93% 97% 97% 93% 89% 97% 93% Clean Product Yield (%) 86% 84% 85% 85% 85% 84% 86% 85% - --------------------------------------------------------------------------------- -------------------------------------------- Western U.S. Crude Oil Charge Input (MB/D) 357 410 415 421 401 386 419 403 Total Charge Input (MB/D) 382 431 439 445 425 419 443 431 Crude Oil Capacity Utilization (%) 90% 101% 102% 104% 100% 94% 101% 98% Clean Product Yield (%) 80% 82% 79% 79% 80% 79% 81% 80% - --------------------------------------------------------------------------------- -------------------------------------------- TOTAL UNITED STATES Crude Oil Charge Input (MB/D) 1,957 2,133 2,040 1,853 1,996 1,840 2,000 1,921 Total Charge Input (MB/D) 2,141 2,345 2,222 2,024 2,182 1,978 2,192 2,086 Crude Oil Capacity Utilization (%) 90% 98% 93% 85% 92% 83% 91% 87% Clean Product Yield (%) 82% 83% 83% 84% 83% 81% 83% 82% - --------------------------------------------------------------------------------- -------------------------------------------- Refined Products Production (MB/D) Gasoline 968 1,071 1,030 949 1,004 890 1,031 961 Distillates 599 655 640 583 619 538 601 569 Aviation Fuel 166 174 153 135 157 146 163 155 Other 414 449 400 370 406 414 403 408 - --------------------------------------------------------------------------------- -------------------------------------------- Total 2,147 2,349 2,223 2,037 2,186 1,988 2,198 2,093 ================================================================================= ============================================ Petroleum Products Sales (MB/D) Gasoline 1,302 1,426 1,397 1,368 1,374 1,258 1,300 1,279 Distillates 642 680 725 653 675 626 620 623 Aviation Fuel 198 214 203 189 201 187 200 194 Other 461 566 526 521 519 517 555 536 - --------------------------------------------------------------------------------- -------------------------------------------- Total 2,603 2,886 2,851 2,731 2,769 2,588 2,675 2,632 ================================================================================= ============================================
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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) 294 259 289 291 283 357 253 261 Total Charge Input (MB/D) 307 266 305 310 297 369 550 460 Crude Oil Capacity Utilization (%) 101% 89% 99% 100% 97% 94% 92% 92% Clean Product Yield (%) 79% 76% 82% 82% 80% 71% 64% 67% - --------------------------------------------------------------------------------- -------------------------------------------- International - Equity Affiliates - Net Share** Crude Oil Charge Input (MB/D) 134 143 142 144 141 133 144 138 Total Charge Input (MB/D) 137 147 145 145 144 137 149 143 Crude Oil Capacity Utilization (%) 98% 105% 105% 106% 103% 94% 102% 98% Clean Product Yield (%) 83% 82% 80% 83% 82% 82% 82% 82% - --------------------------------------------------------------------------------- -------------------------------------------- TOTAL INTERNATIONAL Crude Oil Charge Input (MB/D) 428 402 431 435 424 490 649 570 Total Charge Input (MB/D) 444 413 450 455 441 506 699 603 Crude Oil Capacity Utilization (%) 100% 94% 101% 102% 99% 94% 94% 94% Clean Product Yield (%) 80% 78% 81% 82% 80% 74% 68% 71% - --------------------------------------------------------------------------------- -------------------------------------------- Refined Products Production (MB/D) Gasoline 141 115 143 152 138 142 165 154 Distillates 186 178 191 191 186 215 284 250 Aviation Fuel 21 21 24 24 22 13 13 13 Other 95 96 90 91 93 130 233 182 - --------------------------------------------------------------------------------- -------------------------------------------- Total 443 410 448 458 439 500 695 599 ================================================================================= ============================================ Petroleum Products Sales (MB/D) Gasoline 185 176 178 175 178 197 225 211 Distillates 221 212 216 224 218 319 379 349 Aviation Fuel 7 10 12 8 9 20 18 19 Other 82 79 64 83 77 159 249 205 - --------------------------------------------------------------------------------- -------------------------------------------- Total 495 477 470 490 482 695 871 784 ================================================================================= ============================================ 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 2,649 2,491 Total Charge Input (MB/D) 2,585 2,758 2,672 2,479 2,623 2,484 2,891 2,689 Crude Oil Capacity Utilization (%) 92% 97% 95% 88% 93% 85% 91% 88% Clean Product Yield (%) 82% 82% 83% 84% 82% 79% 80% 80% - --------------------------------------------------------------------------------- -------------------------------------------- Refined Products Production (MB/D) Gasoline 1,109 1,186 1,173 1,101 1,142 1,032 1,196 1,115 Distillates 785 833 831 774 805 753 885 819 Aviation Fuel 187 195 177 159 179 159 176 168 Other 509 545 490 461 499 544 636 590 - --------------------------------------------------------------------------------- -------------------------------------------- Total 2,590 2,759 2,671 2,495 2,625 2,488 2,893 2,692 ================================================================================= ============================================ Petroleum Products Sales (MB/D) Gasoline 1,487 1,602 1,575 1,543 1,552 1,455 1,525 1,490 Distillates 863 892 941 877 893 945 999 972 Aviation Fuel 205 224 215 197 210 207 218 213 Other 543 645 590 604 596 676 804 741 - --------------------------------------------------------------------------------- -------------------------------------------- Total 3,098 3,363 3,321 3,221 3,251 3,283 3,546 3,416 ================================================================================= ============================================ * 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.
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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) 110 148 267 189 714 249 387 636 ================================================================================= ============================================ Upstream Production* Net crude oil production (MB/D) 190 215 253 281 235 306 346 326 Net natural gas production (MMCF/D) 67 50 79 72 67 98 343 221 BOE Total (MBOE/D) 201 223 266 293 246 322 403 363 - ------------------------------------------------------------------------------------------------------------------------------- * Represents our estimated net share of LUKOIL's production. Industry Prices Crude Oil ($/bbl) Urals crude (CIF Mediterranean) 43.21 48.49 57.39 54.07 50.87 58.25 64.85 61.53 - --------------------------------------------------------------------------------- -------------------------------------------- Downstream Refinery Throughput* Crude Processed (MB/D) 92 101 138 156 122 163 168 165 - --------------------------------------------------------------------------------- -------------------------------------------- * Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM 2005 2006 --------------------------------------------- -------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD --------------------------------------------- -------------------------------------------- Midstream Net Income ($ Millions) 385 68 88 147 688 110 108 218 ================================================================================= ============================================ U.S. Equity Affiliate ($ Millions)* 359 51 76 105 591 93 91 184 - --------------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids Extracted (MB/D) Consolidated United States 23 21 23 22 22 23 22 22 International 53 44 5 - 25 - - - Equity Affiliates United States* 110 112 171 172 142 178 183 181 International 6 6 6 6 6 6 6 6 - --------------------------------------------------------------------------------- -------------------------------------------- Total 192 183 205 200 195 207 211 209 ================================================================================= ============================================ * 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* 149 131 123 127 132 141 125 134 International 64 55 15 10 36 11 14 12 - --------------------------------------------------------------------------------- -------------------------------------------- Total 213 186 138 137 168 152 139 146 ================================================================================= ============================================ * Excludes DEFS. Product Prices Weighted Average NGL ($/bbl)* Consolidated 31.95 32.49 39.60 42.70 36.68 37.64 41.73 39.69 DEFS 30.61 31.33 38.31 41.84 35.52 37.29 41.18 39.24 - --------------------------------------------------------------------------------- -------------------------------------------- * Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas liquids component and location mix. DD&A ($ Millions) 9 8 7 8 32 7 8 15 - --------------------------------------------------------------------------------- --------------------------------------------
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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 13 114 323 149 103 252 ================================================================================= ============================================ Industry Margins (Cents/Lb)* Ethylene industry cash margin 18.1 12.8 8.8 21.1 15.2 20.5 14.3 17.4 HDPE industry contract sales margin 12.1 12.0 8.2 12.9 11.3 15.9 14.0 15.0 Styrene industry contract sales margin 13.9 13.6 12.4 12.3 13.1 12.5 11.9 12.2 - --------------------------------------------------------------------------------- -------------------------------------------- * 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.
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 (12) (4) ================================================================================= ============================================ Detail of Net Income (Loss) ($ Millions) Technology Solutions (2) (4) (5) (5) (16) (12) (4) (16) Gas-to-Liquids (7) (7) (4) (5) (23) (4) (3) (7) Power 2 9 17 15 43 31 3 34 Other (1) (6) (8) (10) (25) (7) (8) (15) - --------------------------------------------------------------------------------- -------------------------------------------- Total (8) (8) - (5) (21) 8 (12) (4) ================================================================================= ============================================
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) (412) (580) ================================================================================= ============================================ Detail of Net Income (Loss) ($ Millions) Net interest expense (101) (84) (123) (114) (422) (77) (243) (320) Corporate overhead (58) (46) (64) (15) (183) (26) (39) (65) Discontinued operations (11) 7 (4) (15) (23) - - - Acquisition-related expenses - - - - - (5) (39) (44) Accounting change - - - - - - - - Other (25) (49) (55) (21) (150) (60) (91) (151) - --------------------------------------------------------------------------------- -------------------------------------------- Total (195) (172) (246) (165) (778) (168) (412) (580) ================================================================================= ============================================ Before-Tax Net Interest Expense ($ Millions) Interest expense (226) (219) (223) (224) (892) (226) (468) (694) Capitalized interest 88 91 102 114 395 111 107 218 Interest revenue 25 24 28 36 113 30 35 65 Receivables monetization related (1) - - - (1) - - - Premium on early debt retirement (9) - (50) (51) (110) - - - - --------------------------------------------------------------------------------- -------------------------------------------- (123) (104) (143) (125) (495) (85) (326) (411) ================================================================================= ============================================ Debt Total Debt ($ Millions) 14,012 14,013 13,497 12,516 12,516 32,193 29,510 29,510 Debt-to-Capital Ratio 23% 22% 21% 19% 19% 30% 27% 27% - --------------------------------------------------------------------------------- --------------------------------------------
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