-----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, F0PMco2iQOSLTO5JyFTFoOF9nmA/iaps1Ibrm3LD6rkpdYyu75vNCnO/RVdjmTIt ImdHK4mqMVm3jiWI4y0sQQ== 0001157523-07-000545.txt : 20070124 0001157523-07-000545.hdr.sgml : 20070124 20070124090617 ACCESSION NUMBER: 0001157523-07-000545 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070123 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070124 DATE AS OF CHANGE: 20070124 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: 07548234 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 a5316939.txt CONOCOPHILLIPS 8K 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): January 24, 2007 ConocoPhillips (Exact name of registrant as specified in its charter) Delaware 001-32395 01-0562944 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.) 600 North Dairy Ashford Houston, Texas 77079 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (281) 293-1000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General 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 January 24, 2007, ConocoPhillips issued a press release announcing the company's financial and operating results for the quarter ended December 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. 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 third-quarter 2006 charge from United Kingdom tax legislation in calculating our effective tax rate 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 with prior and future periods. Item 9.01 Financial Statements and Exhibits (d) Exhibits 99.1 -- Press release issued by ConocoPhillips on January 24, 2007. 99.2 -- Financial and operational tables. 99.3 -- Supplemental financial information. 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 January 24, 2007 EXHIBIT INDEX Exhibit No. Description 99.1 Press release issued by ConocoPhillips on January 24, 2007. 99.2 Financial and operational tables. 99.3 Supplemental financial information. EX-99.1 2 a5316939ex991.txt EXHIBIT 99.1 Exhibit 99.1 ConocoPhillips Reports Fourth-Quarter Net Income of $3.2 Billion or $1.91 Per Diluted Share Results include $0.17 per share reduction due to previously disclosed impairments HOUSTON--(BUSINESS WIRE)--Jan. 24, 2007--ConocoPhillips (NYSE:COP): Earnings at a glance Fourth Quarter Twelve Months - ---------------------------------------------------------------------- 2006 2005 2006 2005 - ---------------------------------------------------------------------- Income from continuing $3,197 3,782 $15,550 13,640 operations million million million million Income (loss) from discontinued operations $ - (15) $ - (23) Cumulative effect of changes in accounting principles $ - (88) $ - (88) Net income $3,197 3,679 $15,550 13,529 - ---------------------------------------------------------------------- Diluted income per share Income from continuing operations $1.91 2.69 $9.66 9.63 Net income $1.91 2.61 $9.66 9.55 - ---------------------------------------------------------------------- Revenues(a) $41.5 51.3 $183.7 179.4 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 fourth-quarter net income of $3,197 million, or $1.91 per share, which includes a $0.17 per share reduction due to previously disclosed impairments. This compares with $3,679 million, or $2.61 per share, for the same quarter in 2005. Revenues were $41.5 billion, versus $51.3 billion a year ago. "We continued to experience operational challenges in our upstream business during the quarter. While operations at the Prudhoe Bay oil field substantially recovered from third-quarter disruptions, we experienced weather-related transportation delays in Alaska that impacted fourth-quarter production. We also experienced unplanned downtime related to compressor maintenance at the Britannia field in the U.K. sector of the North Sea," said Jim Mulva, chairman and chief executive officer. "With respect to our upstream operations, we produced 2.49 million BOE per day, including an estimated 0.44 million BOE per day from our LUKOIL Investment segment. In our downstream business, the crude oil capacity utilization rate was 94 percent during the quarter, but we were impacted by significantly lower margins." Fourth-quarter net income was negatively impacted $0.17 per share by two previously disclosed impairments. Refining and Marketing results were impacted by an after-tax impairment of $192 million related to certain domestic marketing assets held for sale. Exploration and Production results included an after-tax asset impairment of $93 million due to declining well performance and drilling results in the Canadian Rockies Foothills area. "We ended the year with debt of $27.1 billion and a debt-to-capital ratio of 24 percent," said Mulva. "During the quarter, we generated $5.6 billion in cash from operations, funded $4.2 billion for our capital program, reduced debt by $700 million, paid $600 million in dividends, and repurchased $250 million of outstanding ConocoPhillips common stock. "For the year, we funded $16.3 billion for our capital program, reduced debt by $5.1 billion subsequent to the Burlington Resources acquisition, paid $2.3 billion in dividends, and repurchased $925 million of outstanding ConocoPhillips common stock. This was accomplished using $21.5 billion in cash from operations, $550 million in proceeds from asset sales, and other available cash." For the twelve months of 2006, net income was $15,550 million, or $9.66 per share, versus $13,529 million, or $9.55 per share, for 2005. Revenues were $183.7 billion, versus $179.4 billion a year ago. The results for ConocoPhillips' business segments follow. Exploration and Production (E&P) Fourth-quarter financial results: E&P net income was $2,087 million, up from $1,904 million in the third quarter of 2006 and down from $2,426 million in the fourth quarter of 2005. The increase from the previous quarter primarily was due to the negative impact of tax legislation on third-quarter results, higher crude oil sales volumes, and lower depreciation, depletion and amortization (DD&A) expense in the fourth quarter. This increase was partially offset by lower crude oil prices, increased exploration expense, and the Canadian asset impairment. The decrease from the fourth quarter of 2005 primarily was due to lower realized natural gas prices, increased exploration expense, and the Canadian asset impairment. The decrease from the fourth quarter of 2005 was partially offset by the inclusion of Burlington Resources' results and higher realized crude oil prices. Daily production from the E&P segment, including Canadian Syncrude and excluding the LUKOIL Investment segment, averaged 2.05 million barrels of oil equivalent (BOE) per day, which was similar to the average production in the previous quarter and up from 1.59 million BOE per day in the fourth quarter of 2005. The increase from the fourth quarter of 2005 primarily was due to the addition of 487,000 BOE per day from the Burlington Resources assets, which reflects downtime of 13,000 BOE per day in the Irish Sea. Other increases of 81,000 BOE per day related to Libya and the Timor Sea. These increases were partially offset by a decrease of 111,000 BOE per day, primarily from Alaska (45,000 BOE per day), the United Kingdom (34,000 BOE per day) and Vietnam (14,000 BOE per day). Before-tax exploration expenses were $391 million in the fourth quarter of 2006, versus $197 million in the previous quarter and $229 million in the fourth quarter of 2005. Twelve-months financial results: E&P net income for 2006 was $9,848 million, up from $8,430 million in 2005, primarily due to higher realized crude oil prices and the inclusion of Burlington Resources' results. This increase was partially offset by lower realized natural gas prices, tax legislation impacts, higher DD&A and operating expenses, asset impairments, and higher exploration expense. Midstream Fourth-quarter financial results: The Midstream segment includes the company's 50 percent interest in Duke Energy Field Services, LLC (DEFS), which effective January 1, 2007, changed its name to DCP Midstream, LLC. Midstream fourth-quarter net income was $89 million, down from $169 million in the previous quarter and $147 million in the fourth quarter of 2005. The decrease from the previous quarter primarily was due to lower natural gas liquids prices and the impact of a third-quarter 2006 tax adjustment for assets sold in 2005. The decrease from the fourth quarter of 2005 primarily was due to lower natural gas liquids prices. Twelve-months financial results: Midstream net income for 2006 decreased to $476 million, from $688 million in 2005. The decrease primarily was due to the 2005 restructuring of ConocoPhillips' ownership in DEFS, partially offset by higher 2006 natural gas liquids prices. Refining and Marketing (R&M) Fourth-quarter financial results: R&M net income was $919 million in the fourth quarter, down from $1,464 million in the previous quarter and $973 million in the fourth quarter of 2005. The decrease from the third quarter of 2006 primarily was due to lower worldwide refining and marketing margins, partially offset by $57 million in lower impairments on assets held for sale. In addition, third-quarter results included a $111 million benefit related to business interruption insurance. The decrease from the fourth quarter of 2005 primarily was due to lower worldwide refining and domestic marketing margins and the fourth-quarter 2006 impairment, partially offset by higher domestic refining volumes reflecting fourth-quarter 2005 hurricane impacts, lower utility costs, and a lower effective tax rate in the fourth quarter of 2006. Net income in the fourth quarter of 2005 also included a charge related to the cumulative effect of a change in accounting principle. The domestic refining crude oil capacity utilization rate for the fourth quarter remained at 96 percent. The international crude oil capacity utilization rate was 87 percent, compared with 89 percent in the previous quarter. The decrease primarily was due to planned downtime at the Wilhelmshaven, Germany, refinery. Worldwide, R&M's refining crude oil capacity utilization rate averaged 94 percent, compared with 95 percent in the previous quarter and up from 88 percent in the fourth quarter of 2005. Before-tax turnaround costs were $94 million in the fourth quarter of 2006, versus $42 million in the previous quarter and $86 million in the fourth quarter of 2005. Twelve-months financial results: R&M net income during 2006 was $4,481 million, compared with $4,173 million in 2005. The increase was due to higher domestic refining and marketing margins and domestic refining volumes, the business interruption insurance benefit, and the fourth-quarter 2005 charge related to the cumulative effect of a change in accounting principle. The increase was partially offset by $441 million after-tax in impairments on assets held for sale recognized in the third and fourth quarters of 2006, and higher depreciation expense. LUKOIL Investment Fourth-quarter financial results: LUKOIL Investment segment net income was $302 million, down from $487 million in the previous quarter and up from $189 million in the fourth quarter of 2005. The results include ConocoPhillips' estimated weighted-average equity share of OAO LUKOIL's (LUKOIL) income for the fourth quarter based on market indicators and historical production trends for LUKOIL. The company's equity ownership interest in LUKOIL at the end of the fourth quarter was 20 percent of LUKOIL's 851 million authorized and issued shares and 20.6 percent based on an estimated 826 million shares outstanding. The decrease in net income from the previous quarter primarily was due to lower estimated commodity prices, partially offset by a net benefit from alignment of the company's estimate of net income to LUKOIL's reported results. The increase from the fourth quarter of 2005 primarily was due to ConocoPhillips' increased equity ownership, higher estimated volumes, and a net benefit from alignment of the company's estimate of net income to LUKOIL's reported results. For the fourth quarter of 2006, ConocoPhillips estimated its equity share of LUKOIL production was 438,000 BOE per day and its share of LUKOIL daily refining crude oil throughput was 220,000 barrels per day. Twelve-months financial results: Net income for 2006 increased to $1,425 million, from $714 million in 2005. The increase primarily was due to ConocoPhillips' increased equity ownership, higher estimated prices and volumes, and a net benefit from alignment of the company's estimate of net income to LUKOIL's reported results. Chemicals Fourth-quarter financial results: The Chemicals segment, which includes the company's 50 percent interest in Chevron Phillips Chemical Company LLC, reported net income of $98 million, compared with $142 million in the third quarter of 2006 and $114 million in the fourth quarter of 2005. The decrease from the third quarter primarily was attributed to lower olefins and polyolefins margins and volumes and a $16 million asset retirement, partially offset by an increased business interruption insurance benefit. The decrease from the fourth quarter of 2005 was largely due to lower olefins and polyolefins margins and the asset retirement, partially offset by lower utility costs and a business interruption insurance benefit. Twelve-months financial results: Chemicals 2006 net income increased to $492 million, compared with $323 million in 2005. The increase primarily was due to higher olefins and polyolefins margins and volumes, lower utility costs, and business interruption insurance benefits. Emerging Businesses The Emerging Businesses segment had net income of $8 million in the fourth quarter of 2006, compared with $11 million in the third quarter of 2006 and a net loss of $5 million in the fourth quarter of 2005. Corporate and Other Fourth-quarter Corporate expenses, after tax, were $306 million, compared with $301 million in the previous quarter and up from $165 million in the fourth quarter of 2005. The increase from the fourth quarter of 2005 was largely attributed to higher interest expense due to higher debt, partially offset by favorable foreign exchange impacts. Total debt at the end of the fourth quarter was $27.1 billion, a reduction of $700 million from the end of the third quarter. The company's debt-to-capital ratio was 24 percent, compared to 25 percent at the end of the third quarter. The company's fourth-quarter tax provision was 46.0 percent. This is compared with 46.1 percent in the third quarter, excluding the one-time impact of U.K. tax legislation enacted in the same period, and 51.2 percent including this item. Outlook Mr. Mulva concluded: "We achieved another year of strong financial results that allowed us to provide value to our shareholders by selectively investing in projects to deliver energy to consumers worldwide, reducing debt, increasing dividends, and repurchasing our shares. "We are pleased to start 2007 with the closing of the transaction to create an integrated North American heavy oil business with EnCana. Integration efforts are progressing well, in line with our expectations. "Having completed our LUKOIL share purchase, we look forward to further strengthening our strategic relationship and continuing to develop joint opportunities beneficial to both companies. "Looking ahead to the first quarter, we anticipate the company's E&P segment production to be lower than the fourth quarter. Increased production from the upstream EnCana joint venture is expected to be offset by the effect of U.S. and Canadian asset dispositions. Continued improvement in production at Prudhoe Bay is expected to be offset by downtime in the North Sea and the early fourth-quarter completion of the recovery of underlifts in Libya. In addition, OPEC production quota reductions impacting Venezuela and Libya are expected to reduce first-quarter production. If the currently announced quotas continue through the first quarter, we anticipate first-quarter production will be negatively impacted by approximately 30,000 BOE per day. "In our downstream refining business, we expect crude oil capacity utilization to be in the mid-90-percent range in the first quarter. Our crude oil refining capacity as of January 1, 2007, is 2,729,000 barrels per day, down from 2,901,000 barrels per day, reflecting the contribution of our Wood River and Borger refineries to the downstream joint venture with EnCana. Turnaround costs are anticipated to be approximately $60 million for the quarter. "We recently announced a new $1 billion share repurchase program and anticipate first-quarter 2007 share repurchases to be approximately $750 million. The company expects to announce its total share repurchase plan for 2007 before the end of the first quarter. "Our asset rationalization efforts generated proceeds of approximately $0.5 billion in 2006 and a further $1 billion this month. The balance of our rationalization efforts remains on target. "We look forward to updating the investment community on the status of our financial and operating plans, as well as our continuing asset rationalization efforts, at our March 14 meeting in New York." ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 38,400 employees, $165 billion of assets, and $184 billion of revenues as of December 31, 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," and "resources" 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 Becky Johnson, 281-293-6743 (media) or Gary Russell, 212-207-1996 (investors) EX-99.2 3 a5316939ex992.txt EXHIBIT 99.2 Exhibit 99.2 CONOCOPHILLIPS HOUSTON, TEXAS 77079 FINANCIAL AND OPERATIONAL TABLES Preliminary FINANCIAL HIGHLIGHTS
Millions of Dollars Three Months Ended Twelve Months Ended December 31 December 31 2006 2005 2006 2005 ---- ---- ---- ---- Revenues and other income Sales and other operating revenues* $ 41,519 51,258 183,650 179,442 Equity in earnings of affiliates 868 831 4,188 3,457 Other income 148 84 685 465 ----------- ------ ------- ------- 42,535 52,173 188,523 183,364 ----------- ------ ------- ------- Costs and expenses Purchased crude oil, natural gas and products 25,445 36,322 118,899 124,925 Production and operating expenses 2,864 2,481 10,413 8,562 Selling, general and administrative expenses 650 557 2,476 2,247 Exploration expenses 391 229 834 661 Depreciation, depletion and amortization 2,002 1,178 7,284 4,253 Impairments 366 11 683 42 Taxes other than income taxes* 4,526 4,598 18,187 18,356 Accretion on discounted liabilities 74 58 281 193 Interest and debt expense 304 110 1,087 497 Foreign currency transaction losses (gains) (20) (4) (30) 48 Minority interests 16 12 76 33 ----------- ------ ------- ------- 36,618 45,552 160,190 159,817 ----------- ------ ------- ------- Income from continuing operations before income taxes 5,917 6,621 28,333 23,547 Provision for income taxes 2,720 2,839 12,783 9,907 ----------- ------ ------- ------- Income from continuing operations 3,197 3,782 15,550 13,640 Income (loss) from discontinued operations -- (15) -- (23) ----------- ------ ------- ------- Income before cumulative effect of changes in acccounting principles 3,197 3,767 15,550 13,617 Cumulative effect of changes in accounting principles -- (88) -- (88) ----------- ------ ------- ------- Net income $ 3,197 3,679 15,550 13,529 =========== ===== ====== ====== Income per share of common stock (dollars) Basic Continuing operations $ 1.94 2.73 9.80 9.79 Discontinued operations -- (0.01) -- (0.02) ----------- ------ ------- ------- Before cumulative effect of changes in acccounting principles 1.94 2.72 9.80 9.77 Cumulative effect of changes in accounting principles -- (0.06) -- (0.06) ----------- ------ ------- ------- Net income $ 1.94 2.66 9.80 9.71 =========== ==== ==== ==== Diluted Continuing operations $ 1.91 2.69 9.66 9.63 Discontinued operations -- (0.01) -- (0.02) ----------- ------ ------- ------- Before cumulative effect of changes in acccounting principles 1.91 2.68 9.66 9.61 Cumulative effect of changes in accounting principles -- (0.07) -- (0.06) ----------- ------ ------- ------- Net income $ 1.91 2.61 9.66 9.55 =========== ==== ==== ==== Average common shares outstanding (in thousands) Basic 1,649,960 1,385,034 1,585,982 1,393,371 Diluted 1,672,375 1,407,375 1,609,530 1,417,028 *Includes excise taxes on petroleum products sales: $ 4,062 4,252 16,072 17,037
1 CONOCOPHILLIPS HOUSTON, TEXAS 77079 Preliminary SELECTED FINANCIAL DATA
Millions of Dollars Three Months Ended Twelve Months Ended December 31 December 31 2006 2005 2006 2005 ---- ---- ---- ---- INCOME (LOSS) FROM CONTINUING OPERATIONS E&P United States $ 872 1,325 4,348 4,290 International 1,215 1,105 5,500 4,144 ------- ------- ------- ------- Total E&P 2,087 2,430 9,848 8,434 ------- ------- ------- ------- Midstream 89 147 476 688 ------- ------- ------- ------- R&M United States 741 805 3,915 3,407 International 178 251 566 849 ------- ------- ------- ------- Total R&M 919 1,056 4,481 4,256 ------- ------- ------- ------- LUKOIL Investment 302 189 1,425 714 Chemicals 98 114 492 323 Emerging Businesses 8 (4) 15 (20) Corporate and other (306) (150) (1,187) (755) ------- ------- ------- ------- Consolidated $ 3,197 3,782 15,550 13,640 ======= ======= ======= ======= INCOME (LOSS) FROM DISCONTINUED OPERATIONS Corporate and other $ -- (15) -- (23) CUMULATIVE EFFECT OF ACCOUNTING CHANGES E&P United States $ -- (2) -- (2) International -- (2) -- (2) ------- ------- ------- ------- Total E&P -- (4) -- (4) ------- ------- ------- ------- Midstream -- -- -- -- ------- ------- ------- ------- R&M United States -- (78) -- (78) International -- (5) -- (5) ------- ------- ------- ------- Total R&M -- (83) -- (83) ------- ------- ------- ------- LUKOIL Investment -- -- -- -- Chemicals -- -- -- -- Emerging Businesses -- (1) -- (1) Corporate and other -- -- -- -- ------- ------- ------- ------- Consolidated $ -- (88) -- (88) ======= ======= ======= ======= SUMMARY OF NET INCOME (LOSS) E&P United States $ 872 1,323 4,348 4,288 International 1,215 1,103 5,500 4,142 ------- ------- ------- ------- Total E&P 2,087 2,426 9,848 8,430 ------- ------- ------- ------- Midstream 89 147 476 688 ------- ------- ------- ------- R&M United States 741 727 3,915 3,329 International 178 246 566 844 ------- ------- ------- ------- Total R&M 919 973 4,481 4,173 ------- ------- ------- ------- LUKOIL Investment 302 189 1,425 714 Chemicals 98 114 492 323 Emerging Businesses 8 (5) 15 (21) Corporate and other (306) (165) (1,187) (778) ------- ------- ------- ------- Net Income $ 3,197 3,679 15,550 13,529 ======= ======= ======= =======
2 CONOCOPHILLIPS HOUSTON, TEXAS 77079 Preliminary SELECTED FINANCIAL DATA
Three Months Ended Twelve Months Ended December 31 December 31 2006 2005 2006 2005 ---- ---- ---- ---- INCOME FROM CONTINUING OPERATIONS Effective tax rate % 46.0 % 42.9 45.1 42.1 Millions of Dollars FOREIGN CURRENCY GAINS (LOSSES) AFTER-TAX E&P $ 3 1 (44) 7 Midstream -- -- -- 7 R&M 35 (3) 60 (52) LUKOIL Investment (2) -- -- (1) Chemicals -- -- -- -- Emerging Businesses 1 (1) 1 (1) Corporate and other 61 (15) 65 (42) ------- ------- ------- ------- $ 98 (18) 82 (82) ======= ======= ======= ======= CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 3,197 3,679 15,550 13,529 Depreciation, depletion and amortization 2,002 1,178 7,284 4,253 Impairments 366 11 683 42 Dry hole costs and leasehold impairments 210 138 351 349 Accretion on discounted liabilities 74 58 281 193 Deferred income taxes (56) 348 217 1,101 Undistributed equity earnings 62 (92) (945) (1,774) Net gain on asset dispositions (52) (14) (116) (278) Loss from discontinued operations -- 15 -- 23 Cumulative effect of changes in accounting principles -- 88 -- 88 Other 95 (140) (201) (139) Working capital adjustments (261) (595) (1,588) 246 ------- ------- ------- ------- Net cash provided by continuing operations 5,637 4,674 21,516 17,633 Net cash provided (used) by discontinued operations -- 1 -- (5) ------- ------- ------- ------- Net cash provided by operating activities $ 5,637 4,675 21,516 17,628 ======= ======= ======= ======= CAPITAL EXPENDITURES AND INVESTMENTS E&P United States $ 825 416 2,828 1,637 International 1,856 1,250 6,685 5,047 ------- ------- ------- ------- 2,681 1,666 9,513 6,684 Midstream 2 -- 4 839 R&M 532 663 3,016 1,738 LUKOIL Investment 753 637 2,715 2,160 Chemicals -- -- -- -- Emerging Businesses 37 -- 83 5 Corporate and other 78 81 265 194 ------- ------- ------- ------- $ 4,083 3,047 15,596 11,620 ======= ======= ======= ======= OTHER At December 31, 2006 At December 31, 2005 Total debt $ 27,134 12,516 Common stockholders' equity $ 82,646 52,731
3 CONOCOPHILLIPS HOUSTON, TEXAS 77079 Preliminary OPERATING HIGHLIGHTS BY SEGMENT
Three Months Ended Twelve Months Ended December 31 December 31 2006 2005 2006 2005 ---- ---- ---- ---- Thousands of Barrels Daily E&P Crude oil produced United States Alaska 257 291 263 294 Lower 48 113 54 104 59 ----- ----- ----- ----- 370 345 367 353 Norway 185 188 189 197 United Kingdom 56 62 56 60 Canada 27 22 25 23 China 36 23 33 23 Indonesia 10 13 12 15 Vietnam 23 37 25 29 Timor Sea 27 36 36 33 Libya 56 -- 50 -- Other 69 51 63 53 ----- ----- ----- ----- Total consolidated 859 777 856 786 Equity affiliates 113 116 116 121 ----- ----- ----- ----- Total Worldwide 972 893 972 907 ===== ===== ===== ===== Syncrude 26 20 21 19 ===== ===== ===== ===== Natural gas liquids produced United States Alaska* 17 21 17 20 Lower 48 72 31 62 30 ----- ----- ----- ----- 89 52 79 50 Norway 8 11 9 9 Canada 31 10 25 10 Timor Sea 15 19 18 16 Other 7 7 5 6 ----- ----- ----- ----- Total Worldwide 150 99 136 91 ===== ===== ===== ===== *Includes reinjected volumes sold lease-to-lease 11 13 11 9 Millions of Cubic Feet Daily Natural gas produced* United States Alaska 131 172 145 169 Lower 48 2,250 1,264 2,028 1,212 ----- ----- ----- ----- 2,381 1,436 2,173 1,381 Norway 291 264 270 272 United Kingdom 734 851 761 751 Canada 1,140 430 983 425 China 9 -- 7 -- Timor Sea 243 33 235 34 Indonesia 315 330 319 298 Vietnam 20 19 21 18 Libya 17 -- 4 -- Other 237 105 188 84 ----- ----- ----- ----- Total consolidated 5,387 3,468 4,961 3,263 Equity affiliates 7 3 9 7 ----- ----- ----- ----- Total Worldwide 5,394 3,471 4,970 3,270 ===== ===== ===== ===== *Represents quantities available for sale. Excludes gas equivalent of NGL shown above. Liquefied natural gas sales 470 118 423 117 LUKOIL Investment Production (MBOE/D)* 438 293 401 246 Refinery crude oil throughput (MB/D)* 220 156 179 122 *Represents our estimated net share of LUKOIL.
4 CONOCOPHILLIPS HOUSTON, TEXAS 77079 Preliminary OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended December 31 December 31 2006 2005 2006 2005 ---- ---- ---- ---- E&P Per Unit Average sales prices Crude oil (per barrel) United States Alaska $ 57.00 57.61 62.66 52.24 Lower 48 51.26 46.62 57.04 45.24 Total U.S. 55.26 55.86 61.09 51.09 International 58.06 54.49 63.38 52.27 Total consolidated 56.87 55.06 62.39 51.74 Equity affiliates* 41.79 38.90 46.01 37.79 Total Worldwide 55.10 53.05 60.37 49.87 Natural gas-lease (per MCF) United States Alaska 4.05 3.01 3.59 2.75 Lower 48 5.85 9.37 6.14 7.28 Total U.S. 5.84 9.17 6.11 7.12 International 6.38 7.19 6.27 5.78 Total consolidated 6.13 7.96 6.20 6.32 Equity affiliates* 0.32 0.28 0.30 0.26 Total Worldwide 6.12 7.94 6.19 6.30 *Excludes our equity share of LUKOIL reported in the LUKOIL Investment segment. Midstream Thousands of Barrels Daily Natural gas liquids extracted Consolidated United States 21 22 22 22 International -- -- -- 25 Equity affiliates United States** 181 172 181 142 International 7 6 6 6 --------- -------- ------- ------ 209 200 209 195 ========= ======== ======= ====== **Represents 30.3 percent interest in DCP Midstream (DCP), through June 30, 2005, and 50 percent interest beginning in July 2005. Per Barrel U.S. product prices Weighted average NGL*** Consolidated $ 37.41 42.70 40.22 36.68 DCP 36.34 41.84 39.45 35.52 ***Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural-gas-liquids component and location mix.
5 CONOCOPHILLIPS HOUSTON, TEXAS 77079 Preliminary OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended December 31 December 31 2006 2005 2006 2005 ---- ---- ---- ---- Thousands of Barrels Daily R&M United States Crude oil capacity 2,208 2,182 2,208 2,180 Crude oil runs 2,128 1,853 2,025 1,996 Refinery production 2,325 2,037 2,213 2,186 International* Crude oil capacity 693 428 651 428 Crude oil runs 605 435 591 424 Refinery production 633 458 618 439 U.S. petroleum products outside sales Automotive gasoline 1,416 1,368 1,336 1,374 Distillates 707 653 655 675 Aviation fuels 214 189 195 201 Other products 535 521 531 519 ----- ------ ----- ----- 2,872 2,731 2,717 2,769 International 720 490 759 482 ----- ----- ----- ----- 3,592 3,221 3,476 3,251 ===== ===== ===== ===== Per Gallon U.S. average sales prices** Automotive gasoline-wholesale $1.74 1.77 2.04 1.73 Automotive gasoline-retail 1.89 1.96 2.18 1.88 Distillates-wholesale 1.95 2.06 2.11 1.80
* 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 a5316939ex993.txt EXHIBIT 99.3 Exhibit 99.3 CONOCOPHILLIPS 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 1,300 995 872 4,348 International E&P 895 963 1,181 1,105 4,144 1,372 2,004 909 1,215 5,500 - ----------------------------------------------------------------------------------- ------------------------------------------ Total E&P 1,787 1,929 2,288 2,430 8,434 2,553 3,304 1,904 2,087 9,848 - ----------------------------------------------------------------------------------- ------------------------------------------ Midstream 385 68 88 147 688 110 108 169 89 476 - ----------------------------------------------------------------------------------- ------------------------------------------ U.S. R&M 570 936 1,096 805 3,407 297 1,433 1,444 741 3,915 International R&M 130 174 294 251 849 93 275 20 178 566 - ----------------------------------------------------------------------------------- ------------------------------------------ Total R&M 700 1,110 1,390 1,056 4,256 390 1,708 1,464 919 4,481 - ----------------------------------------------------------------------------------- ------------------------------------------ LUKOIL Investment 110 148 267 189 714 249 387 487 302 1,425 Chemicals 133 63 13 114 323 149 103 142 98 492 Emerging Businesses (8) (8) - (4) (20) 8 (12) 11 8 15 Corporate and Other (184) (179) (242) (150) (755) (168) (412) (301) (306) (1,187) - ----------------------------------------------------------------------------------- ------------------------------------------ Consolidated 2,923 3,131 3,804 3,782 13,640 3,291 5,186 3,876 3,197 15,550 =================================================================================== ========================================== 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 1,300 995 872 4,348 International E&P 895 963 1,181 1,103 4,142 1,372 2,004 909 1,215 5,500 - ----------------------------------------------------------------------------------- ------------------------------------------ Total E&P 1,787 1,929 2,288 2,426 8,430 2,553 3,304 1,904 2,087 9,848 - ----------------------------------------------------------------------------------- ------------------------------------------ Midstream 385 68 88 147 688 110 108 169 89 476 - ----------------------------------------------------------------------------------- ------------------------------------------ U.S. R&M 570 936 1,096 727 3,329 297 1,433 1,444 741 3,915 International R&M 130 174 294 246 844 93 275 20 178 566 - ----------------------------------------------------------------------------------- ------------------------------------------ Total R&M 700 1,110 1,390 973 4,173 390 1,708 1,464 919 4,481 - ----------------------------------------------------------------------------------- ------------------------------------------ LUKOIL Investment 110 148 267 189 714 249 387 487 302 1,425 Chemicals 133 63 13 114 323 149 103 142 98 492 Emerging Businesses (8) (8) - (5) (21) 8 (12) 11 8 15 Corporate and Other (195) (172) (246) (165) (778) (168) (412) (301) (306) (1,187) - ----------------------------------------------------------------------------------- ------------------------------------------ Consolidated 2,912 3,138 3,800 3,679 13,529 3,291 5,186 3,876 3,197 15,550 =================================================================================== ==========================================
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 1,598 1,380 6,893 International E&P 2,020 2,152 2,567 2,550 9,289 2,862 3,814 3,460 2,948 13,084 - -------------------------------------------------------------------------------- -------------------------------------------- Total E&P 3,408 3,656 4,295 4,569 15,928 4,715 5,876 5,058 4,328 19,977 - -------------------------------------------------------------------------------- -------------------------------------------- Midstream 449 107 138 208 902 173 187 214 150 724 - -------------------------------------------------------------------------------- -------------------------------------------- U.S. R&M 901 1,485 1,766 1,379 5,531 512 2,260 2,282 1,195 6,249 International R&M 160 203 368 330 1,061 112 343 107 222 784 - -------------------------------------------------------------------------------- -------------------------------------------- Total R&M 1,061 1,688 2,134 1,709 6,592 624 2,603 2,389 1,417 7,033 - -------------------------------------------------------------------------------- -------------------------------------------- LUKOIL Investment 115 153 275 196 739 257 398 496 311 1,462 Chemicals 187 84 (3) 148 416 209 134 191 128 662 Emerging Businesses (13) (13) (2) (10) (38) 9 (20) 14 11 14 Corporate and Other (267) (243) (283) (199) (992) (190) (496) (425) (428) (1,539) - -------------------------------------------------------------------------------- -------------------------------------------- Consolidated 4,940 5,432 6,554 6,621 23,547 5,797 8,682 7,937 5,917 28,333 ================================================================================ ============================================ 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% 37.7% 36.8% 36.9% International E&P 55.7% 55.3% 54.0% 56.7% 55.4% 52.1% 47.5% 73.7% 58.8% 58.0% - -------------------------------------------------------------------------------- -------------------------------------------- Total E&P 47.6% 47.2% 46.7% 46.8% 47.0% 45.9% 43.8% 62.4% 51.8% 50.7% - -------------------------------------------------------------------------------- -------------------------------------------- Midstream 14.3% 36.4% 36.2% 29.3% 23.7% 36.4% 42.2% 21.0% 40.7% 34.3% - -------------------------------------------------------------------------------- -------------------------------------------- U.S. R&M 36.7% 37.0% 37.9% 41.6% 38.4% 42.0% 36.6% 36.7% 38.0% 37.3% International R&M 18.8% 14.3% 20.1% 23.9% 20.0% 17.0% 19.8% 81.3% 19.8% 27.8% - -------------------------------------------------------------------------------- -------------------------------------------- Total R&M 34.0% 34.2% 34.9% 38.2% 35.4% 37.5% 34.4% 38.7% 35.1% 36.3% - -------------------------------------------------------------------------------- -------------------------------------------- LUKOIL Investment 4.3% 3.3% 2.9% 3.6% 3.4% 3.1% 2.8% 1.8% 2.9% 2.5% Chemicals 28.9% 25.0% -- 23.0% 22.4% 28.7% 23.1% 25.7% 23.4% 25.7% Emerging Businesses 38.5% 38.5% -- 60.0% 47.4% 11.1% 40.0% 21.4% 27.3% -7.1% Corporate and Other 31.1% 26.3% 14.5% 24.6% 23.9% 11.6% 16.9% 29.2% 28.5% 22.9% - -------------------------------------------------------------------------------- -------------------------------------------- Consolidated 40.8% 42.4% 42.0% 42.9% 42.1% 43.2% 40.3% 51.2% 46.0% 45.1% ================================================================================ ============================================
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 - 33 48 Impairments - - - - - - (26) - (10) (36) Insurance premium adjustments - (5) (4) (8) (17) (2) - (5) (4) (11) Pending claims and settlements - 15 - (23) (8) - - 18 - 18 Business interruption insurance claims recovery - - - - - - - 15 - 15 Enacted tax legislation - - - - - - 2 - - 2 - -------------------------------------------------------------------------------------- -------------------------------------- Total 90 10 (4) (31) 65 (2) (9) 28 19 36 - -------------------------------------------------------------------------------------- -------------------------------------- International E&P Gain (loss) on asset sales - 15 - - 15 - 25 - - 25 Insurance premium adjustments - (10) (12) (19) (41) (10) - (10) (8) (28) International tax law changes - - - 38 38 - 401 (270) (31) 100 Impairments - - - - - - - (4) (104) (108) Business interruption insurance claims recovery - - - - - - - 11 3 14 Pending claims and settlements - - - - - - - - 25 25 - -------------------------------------------------------------------------------------- -------------------------------------- Total - 5 (12) 19 12 (10) 426 (273) (115) 28 - -------------------------------------------------------------------------------------- -------------------------------------- Total E&P 90 15 (16) (12) 77 (12) 417 (245) (96) 64 - -------------------------------------------------------------------------------------- -------------------------------------- Midstream Impairments (6) (7) - - (13) - - - - - Business interruption insurance claims recovery - - - - - - - - 5 5 DCP Midstream's sale of TEPPCO general ptnr 306 - - - 306 - - 30 - 30 Enacted tax legislation - - - - - - (6) - - (6) - -------------------------------------------------------------------------------------- -------------------------------------- Total 300 (7) - - 293 - (6) 30 5 29 - -------------------------------------------------------------------------------------- -------------------------------------- U.S. R&M Gain (loss) on asset sales 31 - - - 31 - - - - - Impairments - - - - - - - (35) (192) (227) Insurance premium adjustments - (7) (9) (14) (30) (6) - (7) (6) (19) Discontinuation of a marketing incentive program - - (16) - (16) - - - - - Hurricanes impact on maintenance & repairs - - - (57) (57) - - - - - Business interruption insurance claims recovery - - - - - - - 111 - 111 Pending claims and settlements - - - - - - - - - - Enacted tax legislation - - - - - - 34 - - 34 - -------------------------------------------------------------------------------------- -------------------------------------- Total 31 (7) (25) (71) (72) (6) 34 69 (198) (101) - -------------------------------------------------------------------------------------- -------------------------------------- International R&M Gain (loss) on asset sales - 25 - - 25 - - - - - Impairments - - - - - - - (214) - (214) Insurance premium adjustments - - - - - (1) - (1) (1) (3) - -------------------------------------------------------------------------------------- -------------------------------------- Total - 25 - - 25 (1) - (215) (1) (217) - -------------------------------------------------------------------------------------- -------------------------------------- Total R&M 31 18 (25) (71) (47) (7) 34 (146) (199) (318) - -------------------------------------------------------------------------------------- -------------------------------------- LUKOIL Investment Ownership interest adjustment - - - - - - - 23 - 23 - -------------------------------------------------------------------------------------- -------------------------------------- Total - - - - - - - 23 - 23 - -------------------------------------------------------------------------------------- -------------------------------------- Chemicals Business interruption insurance claims recovery - - - - - - - 7 13 20 Asset retirements recorded by CPChem - - - - - - - - (16) (16) Enacted tax legislation - - - - - - (5) - - (5) - -------------------------------------------------------------------------------------- -------------------------------------- Total - - - - - - (5) 7 (3) (1) - -------------------------------------------------------------------------------------- -------------------------------------- Emerging Businesses Property write-down - - - - - - (14) - - (14) - -------------------------------------------------------------------------------------- -------------------------------------- Total - - - - - - (14) - - (14) - -------------------------------------------------------------------------------------- -------------------------------------- Corporate and Other Acquisition-related expenses - - - - - (5) (39) (32) (22) (98) 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) (32) (22) (123) - -------------------------------------------------------------------------------------- -------------------------------------- Total Company 413 26 (83) (125) 231 (39) 377 (363) (315) (340) ====================================================================================== ======================================
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 Net income 2,912 3,138 3,800 3,679 13,529 3,291 5,186 3,876 3,197 15,550 DD&A and impairments 1,063 994 1,049 1,189 4,295 1,180 2,015 2,404 2,368 7,967 Dry hole costs and leasehold impairments 109 47 55 138 349 38 47 56 210 351 Accretion on discounted liabilities 48 41 46 58 193 60 73 74 74 281 Deferred income taxes 123 369 261 348 1,101 168 (390) 495 (56) 217 Undistributed equity earnings (805) (414) (463) (92) (1,774) (67) (687) (253) 62 (945) Net gain on asset dispositions (177) (65) (22) (14) (278) (3) (53) (8) (52) (116) Loss from discontinued operations 11 (7) 4 15 23 - - - - - Cumulative effect of changes in acctg princ - - - 88 88 - - - - - Other (78) (113) 192 (140) (139) (203) 189 (282) 95 (201) Net working capital changes 888 (1,224) 1,177 (595) 246 336 (1,536) (127) (261) (1,588) 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 6,235 5,637 21,516 - ------------------------------------------------------------------------------------- ---------------------------------------- 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)(2,454) (2,681) (9,513) Midstream (1) - (838) - (839) (1) (1) - (2) (4) R&M (275) (360) (440) (663) (1,738) (1,635) (475) (374) (532) (3,016) LUKOIL Investment (324) (384) (815) (637) (2,160) (612) (648) (702) (753) (2,715) Chemicals - - - - - - - - - - Emerging Businesses 4 (7) (2) - (5) (12) (28) (6) (37) (83) Corporate and Other (20) (37) (56) (81) (194) (48) (78) (61) (78) (265) - ------------------------------------------------------------------------------------- ---------------------------------------- Total capital expend. & investments (1,822) (3,125) (3,626) (3,047) (11,620) (4,514) (3,402)(3,597) (4,083) (15,596) Acquisition of Burlington Resources Inc.* - - - - - (14,190) (94) (1) - (14,285) Proceeds from asset dispositions 87 221 300 160 768 5 68 173 299 545 Long-term advances to/collections from affiliates and other investments 25 4 (58) (135) (164) (115) (151) (251) (140) (657) Discontinued operations - - - - - - - - - - ------------------------------------------------------------------------------------- ---------------------------------------- Net Cash Used for Investing Activities (1,710) (2,900) (3,384) (3,022) (11,016) (18,814) (3,579)(3,676) (3,924) (29,993) - ------------------------------------------------------------------------------------- ---------------------------------------- Cash Flows from Financing Activities Net issuance (repayment) of debt (986) (13) (513) (1,038) (2,550) 15,324 (2,756)(1,630) (706) 10,232 Issuance of stock 155 108 114 25 402 40 64 41 75 220 Repurchase of stock (194) (382) (589) (759) (1,924) - (425) (250) (250) (925) Dividends (348) (432) (430) (429) (1,639) (496) (595) (593) (593) (2,277) Other 64 33 (10) (60) 27 (27) (20) (76) (62) (185) - ------------------------------------------------------------------------------------- ---------------------------------------- Net Cash Provided by (Used for) Financing Activities (1,309) (686) (1,428) (2,261) (5,684) 14,841 (3,732)(2,508) (1,536) 7,065 - ------------------------------------------------------------------------------------- ---------------------------------------- Effect of Exchange Rate Changes (36) (62) (22) 19 (101) (33) 113 (9) (56) 15 - ------------------------------------------------------------------------------------- ---------------------------------------- Net Change in Cash and Cash Equivalents 1,034 (880) 1,262 (589) 827 794 (2,354) 42 121 (1,397) Cash and cash equivalents at beginning of period 1,387 2,421 1,541 2,803 1,387 2,214 3,008 654 696 2,214 - ------------------------------------------------------------------------------------- ---------------------------------------- Cash and Cash Equivalents at End of Period 2,421 1,541 2,803 2,214 2,214 3,008 654 696 817 817 ===================================================================================== ======================================== * 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 1,904 2,087 9,848 ============================================================================= ============================================ Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 1,600 1,537 1,521 1,590 1,562 1,610 2,134 2,036 2,047 1,957 - ----------------------------------------------------------------------------- -------------------------------------------- E&P segment plus LUKOIL Investment segment: 1,801 1,760 1,787 1,883 1,808 1,932 2,537 2,472 2,485 2,358 - ----------------------------------------------------------------------------- -------------------------------------------- Crude Oil and Condensate (MB/D) Consolidated 822 780 766 777 786 777 924 865 859 856 Equity affiliates 120 123 124 116 121 126 121 104 113 116 - ----------------------------------------------------------------------------- -------------------------------------------- Total 942 903 890 893 907 903 1,045 969 972 972 ============================================================================= ============================================ Sales of crude oil produced (MB/D) 940 932 883 916 918 913 1,040 953 988 973 - ----------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids (MB/D) 94 80 92 99 91 97 152 146 150 136 - ----------------------------------------------------------------------------------------------------------------------------- Natural Gas (MMCF/D) Consolidated 3,295 3,191 3,099 3,468 3,263 3,554 5,498 5,379 5,387 4,961 Equity affiliates 5 7 10 3 7 11 10 8 7 9 - ----------------------------------------------------------------------------- -------------------------------------------- Total 3,300 3,198 3,109 3,471 3,270 3,565 5,508 5,387 5,394 4,970 ============================================================================= ============================================ Canadian Syncrude (MB/D) 14 21 21 20 19 16 19 23 26 21 - ----------------------------------------------------------------------------- -------------------------------------------- Industry Prices (Platt's) Crude Oil ($/bbl) WTI spot 49.70 53.03 63.05 59.99 56.44 63.28 70.40 70.38 59.94 66.00 Brent dated 47.50 51.59 61.54 56.90 54.38 61.75 69.62 69.49 59.68 65.14 Natural Gas ($/mmbtu) Henry Hub -- First of Month 6.27 6.74 8.53 13.00 8.64 9.01 6.80 6.58 6.56 7.24 - ----------------------------------------------------------------------------- -------------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated 44.89 48.88 58.49 55.06 51.74 58.97 65.89 67.37 56.87 62.39 Equity affiliates 30.38 36.11 45.25 38.90 37.79 43.38 52.28 46.98 41.79 46.01 Total 43.15 46.93 56.64 53.05 49.87 56.63 64.34 65.04 55.10 60.37 - ----------------------------------------------------------------------------- -------------------------------------------- Natural Gas Liquids ($/bbl) 33.44 35.10 41.54 42.75 38.32 43.13 41.75 43.62 38.23 41.50 - ----------------------------------------------------------------------------- -------------------------------------------- Natural Gas ($/mcf) Consolidated 5.24 5.53 6.40 7.96 6.32 7.26 5.86 5.92 6.13 6.20 Equity affiliates 0.25 0.32 0.20 0.28 0.26 0.23 0.36 0.32 0.32 0.30 Total 5.24 5.52 6.38 7.94 6.30 7.24 5.85 5.91 6.12 6.19 - ----------------------------------------------------------------------------- -------------------------------------------- Exploration Charges ($ Millions) Dry Holes 88 30 32 83 233 19 15 18 142 194 Lease Impairments 20 18 23 55 116 19 33 37 68 157 - ----------------------------------------------------------------------------- -------------------------------------------- Total Non-Cash Charges 108 48 55 138 349 38 48 55 210 351 Other (G&G and Lease Rentals) 63 73 85 91 312 74 86 142 181 483 - ----------------------------------------------------------------------------- -------------------------------------------- Total Exploration Charges 171 121 140 229 661 112 134 197 391 834 ============================================================================= ============================================ Depreciation, Depletion and Amortization (DD&A) ($ Millions) 819 755 823 915 3,312 910 1,659 1,860 1,703 6,132 - ----------------------------------------------------------------------------- --------------------------------------------
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 1,300 995 872 4,348 ============================================================================== ========================================== Alaska ($ Millions) 532 572 730 718 2,552 692 760 425 470 2,347 - ------------------------------------------------------------------------------ ------------------------------------------ Lower 48 ($ Millions) 360 394 377 605 1,736 489 540 570 402 2,001 - ------------------------------------------------------------------------------ ------------------------------------------ Production Total U.S. (MBOE/D) 648 631 617 636 633 636 894 846 856 808 - ------------------------------------------------------------------------------ ------------------------------------------ Crude Oil and Condensate (MB/D) Alaska 309 297 281 291 294 283 279 234 257 263 Lower 48 62 63 56 54 59 64 120 119 113 104 - ------------------------------------------------------------------------------ ------------------------------------------ Total 371 360 337 345 353 347 399 353 370 367 ============================================================================== ========================================== Sales of crude oil produced (MB/D) 386 352 352 337 357 363 398 355 371 371 - ------------------------------------------------------------------------------ ------------------------------------------ Natural Gas Liquids (MB/D)* Alaska 24 16 18 21 20 22 20 11 17 17 Lower 48 27 31 30 31 30 29 70 75 72 62 - ------------------------------------------------------------------------------ ------------------------------------------ Total 51 47 48 52 50 51 90 86 89 79 ============================================================================== ========================================== *Includes reinjection volumes sold lease-to-lease: 13 1 8 13 9 14 14 7 9 11 - ------------------------------------------------------------------------------ ------------------------------------------ Natural Gas (MMCF/D) Alaska 185 148 173 172 169 163 163 123 131 145 Lower 48 1,169 1,195 1,218 1,264 1,212 1,264 2,265 2,320 2,250 2,028 - ------------------------------------------------------------------------------ ------------------------------------------ Total 1,354 1,343 1,391 1,436 1,381 1,427 2,428 2,443 2,381 2,173 ============================================================================== ========================================== Average Realized Prices Crude Oil and Condensate ($/bbl) Alaska North Slope 38.93 43.92 53.30 52.34 46.95 52.92 59.89 62.85 51.11 58.43 - ------------------------------------------------------------------------------ ------------------------------------------ West Coast 44.15 49.22 58.70 57.61 52.24 58.87 66.02 69.66 57.00 62.66 - ------------------------------------------------------------------------------ ------------------------------------------ Lower 48 41.29 43.58 50.00 46.62 45.24 52.21 59.63 62.45 51.26 57.04 - ------------------------------------------------------------------------------ ------------------------------------------ Total U.S. 43.69 48.21 57.31 55.86 51.09 57.70 64.09 67.25 55.26 61.09 - ------------------------------------------------------------------------------ ------------------------------------------ Natural Gas Liquids ($/bbl) Alaska 44.33 49.20 57.11 57.58 51.30 58.88 65.25 67.12 57.03 61.06 - ------------------------------------------------------------------------------ ------------------------------------------ Lower 48 30.96 31.22 39.92 42.89 36.43 38.20 38.29 41.34 34.51 38.10 - ------------------------------------------------------------------------------ ------------------------------------------ Total U.S. 34.68 37.26 43.95 45.94 40.40 43.00 40.45 42.68 36.74 40.35 - ------------------------------------------------------------------------------ ------------------------------------------ Natural Gas ($/mcf) Alaska 2.96 2.49 2.57 3.01 2.75 3.58 3.42 3.36 4.05 3.59 - ------------------------------------------------------------------------------ ------------------------------------------ Lower 48 5.66 6.20 7.67 9.37 7.28 7.50 5.81 6.00 5.85 6.14 - ------------------------------------------------------------------------------ ------------------------------------------ Total U.S. 5.57 6.07 7.48 9.17 7.12 7.42 5.78 5.98 5.84 6.11 - ------------------------------------------------------------------------------ ------------------------------------------ Kenai, Alaska LNG Sales Volume (MMCF/D) 132 96 123 118 117 128 126 110 88 113 - ------------------------------------------------------------------------------ ------------------------------------------ Sales price per MCF 5.27 5.24 5.90 6.36 5.71 6.45 5.16 6.16 6.33 6.00 - ------------------------------------------------------------------------------ ------------------------------------------ U.S. Exploration Charges ($ Millions) Dry Holes 74 8 (2) 3 83 8 3 8 67 86 Lease Impairments 10 9 9 10 38 8 15 13 46 82 - ------------------------------------------------------------------------------ ------------------------------------------ - ------------------------------------------------------------------------------ ------------------------------------------ Total Non-Cash Charges 84 17 7 13 121 16 18 21 113 168 Other (G&G and Lease Rentals) 12 17 19 7 55 14 1 66 55 136 - ------------------------------------------------------------------------------ ------------------------------------------ Total U.S. Exploration Charges 96 34 26 20 176 30 19 87 168 304 ============================================================================== ========================================== Alaska Only 85 13 11 1 110 18 (7) 50 21 82 - ------------------------------------------------------------------------------ ------------------------------------------ DD&A ($ Millions) Alaska 133 134 126 142 535 132 135 137 151 555 Lower 48 219 172 243 231 865 251 634 784 623 2,292 - ------------------------------------------------------------------------------ ------------------------------------------ Total U.S. 352 306 369 373 1,400 383 769 921 774 2,847 ============================================================================== ==========================================
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 2,004 909 1,215 5,500 ================================================================================ ======================================== Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 952 906 904 954 929 974 1,240 1,190 1,191 1,149 - -------------------------------------------------------------------------------- ---------------------------------------- Crude Oil and Condensate (MB/D) Consolidated Norway 207 195 198 188 197 188 192 190 185 189 United Kingdom 61 60 56 62 60 62 57 50 56 56 Canada 23 23 22 22 23 22 27 26 27 25 China 22 25 22 23 23 25 34 36 36 33 Indonesia 21 16 10 13 15 14 14 11 10 12 Vietnam 27 26 30 37 29 31 22 24 23 25 Timor Sea 36 21 38 36 33 39 39 40 27 36 Libya - - - - - - 74 71 56 50 Other 54 54 53 51 53 49 66 64 69 63 Equity affiliates 120 123 124 116 121 126 121 104 113 116 - -------------------------------------------------------------------------------- ---------------------------------------- Total 571 543 553 548 554 556 646 616 602 605 ================================================================================ ======================================== Sales of crude oil produced (MB/D) 554 580 531 579 561 550 642 598 617 602 - -------------------------------------------------------------------------------- ---------------------------------------- Natural Gas Liquids (MB/D) Norway 10 9 10 11 9 11 8 9 8 9 Canada 10 10 10 10 10 9 30 28 31 25 Timor Sea 17 9 20 19 16 20 20 20 15 18 Other 6 5 4 7 6 6 4 3 7 5 - -------------------------------------------------------------------------------- ---------------------------------------- Total 43 33 44 47 41 46 62 60 61 57 ================================================================================ ======================================== Natural Gas (MMCF/D) Consolidated Norway 298 268 259 264 272 269 260 260 291 270 United Kingdom 824 741 588 851 751 851 796 665 734 761 Canada 417 422 429 430 425 424 1,204 1,154 1,140 983 China - - - - - - 10 8 9 7 Timor Sea 35 35 35 33 34 144 251 300 243 235 Indonesia 273 287 303 330 298 294 323 342 315 319 Vietnam 18 14 20 19 18 24 19 20 20 21 Libya - - - - - - - - 17 4 Other 76 81 74 105 84 121 207 187 237 188 Equity affiliates 5 7 10 3 7 11 10 8 7 9 - -------------------------------------------------------------------------------- ---------------------------------------- Total 1,946 1,855 1,718 2,035 1,889 2,138 3,080 2,944 3,013 2,797 ================================================================================ ======================================== Canadian Syncrude (MB/D) 14 21 21 20 19 16 19 23 26 21 - -------------------------------------------------------------------------------- ---------------------------------------- Darwin, Australia LNG Sales (MMCF/D) - - - - - 136 305 411 382 310 - -------------------------------------------------------------------------------- ----------------------------------------
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 ($/bbl) Consolidated Norway 45.52 50.21 60.42 56.36 53.18 61.36 68.64 68.48 60.07 64.61 United Kingdom 49.47 48.02 60.83 54.87 53.13 59.13 65.32 64.67 58.71 62.08 Canada 36.96 41.09 54.74 46.44 44.70 44.28 60.86 61.00 49.28 54.25 China 41.51 46.95 51.89 49.86 47.85 57.90 66.68 64.68 51.06 60.00 Indonesia 46.51 47.57 61.77 47.00 49.45 57.94 58.15 62.69 52.21 57.80 Vietnam 47.77 53.32 58.52 52.77 53.23 62.34 68.53 71.35 56.77 64.75 Timor Sea 47.99 50.90 59.03 52.90 52.95 60.37 66.98 66.84 57.27 63.21 Libya - - - - - - 68.07 67.75 58.19 65.11 Other 44.56 50.11 60.99 57.03 52.93 62.95 69.20 70.39 60.92 65.85 Equity affiliates 30.38 36.11 45.25 38.90 37.79 43.38 52.28 46.98 41.79 46.01 Total 42.77 46.16 56.19 51.41 49.09 55.92 64.50 63.73 55.00 59.92 - ----------------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids ($/bbl) Norway 30.63 28.20 37.29 33.81 32.45 42.55 40.99 43.91 39.46 41.61 Canada 37.37 37.66 44.22 49.63 42.20 46.21 46.73 46.16 43.87 45.62 Timor Sea 34.40 35.99 40.45 47.29 40.11 46.68 41.35 45.63 41.62 43.95 Other 21.34 22.30 26.63 20.30 22.17 27.16 33.82 26.79 19.33 26.23 Total 32.35 32.03 39.29 40.04 36.25 43.25 43.28 44.89 40.25 42.89 - ----------------------------------------------------------------------------------- ----------------------------------------- Natural Gas ($/mcf) Consolidated Norway 5.03 5.30 5.13 6.40 5.46 7.28 7.09 7.48 8.58 7.61 United Kingdom 5.54 5.01 4.92 7.64 5.89 8.81 6.84 7.08 8.52 7.85 Canada 5.33 6.14 7.54 9.86 7.25 6.28 5.47 5.43 5.91 5.67 China - - - - - - 1.90 4.11 2.80 2.87 Timor Sea 0.52 0.52 0.56 0.61 0.55 0.67 0.65 0.69 0.74 0.69 Indonesia 5.08 5.96 6.73 6.23 6.03 7.45 7.53 6.71 5.78 6.86 Vietnam 1.04 1.04 1.05 1.07 1.05 1.07 1.07 1.07 1.05 1.06 Libya - - - - - - - - 0.09 0.09 Other 0.70 0.59 0.66 0.72 0.67 0.82 2.57 2.04 2.02 1.98 Equity affiliates 0.25 0.32 0.20 0.28 0.26 0.23 0.36 0.32 0.32 0.30 Total 5.03 5.15 5.57 7.16 5.76 7.13 5.90 5.85 6.36 6.25 - ----------------------------------------------------------------------------------- ----------------------------------------- International Exploration Charges ($ Millions) Dry Holes 14 22 34 80 150 11 12 10 75 108 Lease Impairments 10 9 14 45 78 11 18 24 22 75 - ----------------------------------------------------------------------------------- ----------------------------------------- Total Non-Cash Charges 24 31 48 125 228 22 30 34 97 183 Other (G&G and Lease Rentals) 51 56 66 84 257 60 85 76 126 347 - ----------------------------------------------------------------------------------- ----------------------------------------- Total International Exploration Charges 75 87 114 209 485 82 115 110 223 530 =================================================================================== ========================================= DD&A ($ Millions) 467 449 454 542 1,912 527 890 939 929 3,285 - ----------------------------------------------------------------------------------- -----------------------------------------
Page 8 of 12 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 1,464 919 4,481 =================================================================================== ========================================= United States ($ Millions) 570 936 1,096 727 3,329 297 1,433 1,444 741 3,915 - ----------------------------------------------------------------------------------- ----------------------------------------- International ($ Millions) 130 174 294 246 844 93 275 20 178 566 - ----------------------------------------------------------------------------------- ----------------------------------------- Market Indicators U.S. East Coast Crack Spread ($/bbl) 6.40 8.80 14.81 9.32 9.83 7.52 15.21 10.54 7.86 10.28 U.S. Gulf Coast Crack Spread ($/bbl) 6.37 9.63 17.42 10.27 10.92 8.28 17.26 11.00 6.77 10.83 U.S. Group Central Crack Spread ($/bbl) 7.92 11.51 17.06 11.93 12.10 9.81 19.60 17.75 10.11 14.32 U.S. West Coast Crack Spread ($/bbl) 19.61 22.20 26.61 16.29 21.18 18.87 32.47 21.70 20.36 23.35 U.S. Weighted 3:2:1 Crack Spread ($/bbl) 9.24 12.35 18.51 11.69 12.95 10.56 20.39 14.86 10.49 14.07 NW Europe Crack Spread ($/bbl) 11.14 15.09 16.53 13.68 14.11 10.18 15.20 14.18 11.46 12.75 Singapore 3:1:2 Crack Spread ($/bbl) 13.23 13.95 16.70 12.43 14.08 10.58 19.30 15.13 11.03 14.01 U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.16 2.05 0.70 2.63 1.38 0.71 1.83 5.75 1.81 2.52 - ----------------------------------------------------------------------------------- ----------------------------------------- Realized Margins Refining Margin ($/bbl) U.S. 10.11 11.23 14.61 12.71 12.17 10.18 17.23 14.10 11.39 13.29 International 8.43 8.89 11.19 8.95 9.38 5.30 7.64 6.46 6.22 6.50 - ----------------------------------------------------------------------------------- ----------------------------------------- Marketing Margin ($/bbl)* U.S. 0.46 2.01 0.18 2.52 1.28 0.12 0.48 2.81 1.35 1.21 International 5.61 8.56 6.80 8.62 7.43 6.07 6.67 11.17 9.50 8.38 - ----------------------------------------------------------------------------------- ----------------------------------------- DD&A ($ Millions) 194 197 197 230 818 239 253 246 266 1,004 - ----------------------------------------------------------------------------------- ----------------------------------------- Turnaround Expense ($ Millions) 108 106 53 86 353 163 115 42 94 414 - ----------------------------------------------------------------------------------- ----------------------------------------- Eastern U.S. Crude Oil Charge Input (MB/D) 403 414 409 416 410 354 281 377 411 356 Total Charge Input (MB/D) 449 454 456 446 451 359 309 418 457 386 Crude Oil Capacity Utilization (%) 95% 98% 97% 98% 97% 84% 66% 89% 97% 84% Clean Product Yield (%) 92% 88% 89% 91% 90% 90% 87% 88% 90% 89% - ----------------------------------------------------------------------------------- ----------------------------------------- U.S. Gulf Coast Crude Oil Charge Input (MB/D) 659 715 596 397 591 529 681 730 737 670 Total Charge Input (MB/D) 733 835 674 467 676 587 777 822 812 750 Crude Oil Capacity Utilization (%) 92% 100% 83% 55% 83% 72% 93% 100% 101% 91% Clean Product Yield (%) 73% 79% 80% 80% 78% 74% 81% 83% 80% 80% - ----------------------------------------------------------------------------------- ----------------------------------------- Central U.S. Crude Oil Charge Input (MB/D) 538 594 620 619 594 571 619 600 583 593 Total Charge Input (MB/D) 577 625 653 666 630 613 663 638 621 634 Crude Oil Capacity Utilization (%) 84% 93% 97% 97% 93% 89% 97% 94% 91% 93% Clean Product Yield (%) 86% 84% 85% 85% 85% 84% 86% 85% 85% 85% - ----------------------------------------------------------------------------------- ----------------------------------------- Western U.S. Crude Oil Charge Input (MB/D) 357 410 415 421 401 386 419 420 397 406 Total Charge Input (MB/D) 382 431 439 445 425 419 443 446 426 433 Crude Oil Capacity Utilization (%) 90% 101% 102% 104% 100% 94% 101% 102% 96% 98% Clean Product Yield (%) 80% 82% 79% 79% 80% 79% 81% 80% 79% 80% - ----------------------------------------------------------------------------------- ----------------------------------------- TOTAL UNITED STATES Crude Oil Charge Input (MB/D) 1,957 2,133 2,040 1,853 1,996 1,840 2,000 2,127 2,128 2,025 Total Charge Input (MB/D) 2,141 2,345 2,222 2,024 2,182 1,978 2,192 2,324 2,316 2,203 Crude Oil Capacity Utilization (%) 90% 98% 93% 85% 92% 83% 91% 96% 96% 92% Clean Product Yield (%) 82% 83% 83% 84% 83% 81% 83% 84% 83% 83% - ----------------------------------------------------------------------------------- ----------------------------------------- Refined Products Production (MB/D) Gasoline 968 1,071 1,030 949 1,004 890 1,031 1,084 1,061 1,017 Distillates 599 655 640 583 619 538 601 655 657 613 Aviation Fuel 166 174 153 135 157 146 163 166 167 161 Other 414 449 400 370 406 414 403 429 440 422 - ----------------------------------------------------------------------------------- ----------------------------------------- Total 2,147 2,349 2,223 2,037 2,186 1,988 2,198 2,334 2,325 2,213 =================================================================================== ========================================= Petroleum Products Sales (MB/D) Gasoline 1,302 1,426 1,397 1,368 1,374 1,258 1,300 1,369 1,416 1,336 Distillates 642 680 725 653 675 626 620 668 707 655 Aviation Fuel 198 214 203 189 201 187 200 180 214 195 Other 461 566 526 521 519 517 555 519 535 531 - ----------------------------------------------------------------------------------- ----------------------------------------- Total 2,603 2,886 2,851 2,731 2,769 2,588 2,675 2,736 2,872 2,717 =================================================================================== ========================================= * Represents marketing sales price less product costs for all distribution channels other than commercial product supply.
Page 9 of 12 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) 294 259 289 291 283 357 505 474 461 450 Total Charge Input (MB/D) 307 266 305 310 297 369 550 503 494 479 Crude Oil Capacity Utilization (%) 101% 89% 99% 100% 97% 94% 92% 86% 83% 88% Clean Product Yield (%) 79% 76% 82% 82% 80% 71% 64% 69% 72% 69% - ------------------------------------------------------------------------------- --------------------------------------- International - Equity Affiliates - Net Share** Crude Oil Charge Input (MB/D) 134 143 142 144 141 133 144 143 144 141 Total Charge Input (MB/D) 137 147 145 145 144 137 149 149 147 145 Crude Oil Capacity Utilization (%) 98% 105% 105% 106% 103% 94% 102% 102% 102% 100% Clean Product Yield (%) 83% 82% 80% 83% 82% 82% 82% 81% 80% 81% - ------------------------------------------------------------------------------- --------------------------------------- TOTAL INTERNATIONAL Crude Oil Charge Input (MB/D) 428 402 431 435 424 490 649 617 605 591 Total Charge Input (MB/D) 444 413 450 455 441 506 699 652 641 624 Crude Oil Capacity Utilization (%) 100% 94% 101% 102% 99% 94% 94% 89% 87% 91% Clean Product Yield (%) 80% 78% 81% 82% 80% 74% 68% 72% 74% 72% - ------------------------------------------------------------------------------- --------------------------------------- Refined Products Production (MB/D) Gasoline 141 115 143 152 138 142 165 165 172 161 Distillates 186 178 191 191 186 215 284 271 277 262 Aviation Fuel 21 21 24 24 22 13 13 17 14 14 Other 95 96 90 91 93 130 233 190 170 181 - ------------------------------------------------------------------------------- --------------------------------------- Total 443 410 448 458 439 500 695 643 633 618 =============================================================================== ======================================= Petroleum Products Sales (MB/D) Gasoline 185 176 178 175 178 197 225 204 186 203 Distillates 221 212 216 224 218 319 379 352 380 358 Aviation Fuel 7 10 12 8 9 20 18 22 19 19 Other 82 79 64 83 77 159 249 171 135 179 - ------------------------------------------------------------------------------- --------------------------------------- Total 495 477 470 490 482 695 871 749 720 759 =============================================================================== ======================================= 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 2,744 2,733 2,616 Total Charge Input (MB/D) 2,585 2,758 2,672 2,479 2,623 2,484 2,891 2,976 2,957 2,827 Crude Oil Capacity Utilization (%) 92% 97% 95% 88% 93% 85% 91% 95% 94% 92% Clean Product Yield (%) 82% 82% 83% 84% 82% 79% 80% 81% 81% 80% - ------------------------------------------------------------------------------- --------------------------------------- - ------------------------------------------------------------------------------- --------------------------------------- Refined Products Production (MB/D) Gasoline 1,109 1,186 1,173 1,101 1,142 1,032 1,196 1,249 1,233 1,178 Distillates 785 833 831 774 805 753 885 926 934 875 Aviation Fuel 187 195 177 159 179 159 176 183 181 175 Other 509 545 490 461 499 544 636 619 610 603 - ------------------------------------------------------------------------------- --------------------------------------- Total 2,590 2,759 2,671 2,495 2,625 2,488 2,893 2,977 2,958 2,831 =============================================================================== ======================================= Petroleum Products Sales (MB/D) Gasoline 1,487 1,602 1,575 1,543 1,552 1,455 1,525 1,573 1,602 1,539 Distillates 863 892 941 877 893 945 999 1,020 1,087 1,013 Aviation Fuel 205 224 215 197 210 207 218 202 233 214 Other 543 645 590 604 596 676 804 690 670 710 - ------------------------------------------------------------------------------- --------------------------------------- Total 3,098 3,363 3,321 3,221 3,251 3,283 3,546 3,485 3,592 3,476 =============================================================================== ======================================= * 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 10 of 12 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) 110 148 267 189 714 249 387 487 302 1,425 ============================================================================= ========================================== Upstream Production* Net crude oil production (MB/D) 190 215 253 281 235 306 346 388 397 360 Net natural gas production (MMCF/D) 67 50 79 72 67 98 343 288 247 244 BOE Total (MBOE/D) 201 223 266 293 246 322 403 436 438 401 - ----------------------------------------------------------------------------------------------------------------------------- * Represents our estimated net share of LUKOIL's production. Industry Prices Crude Oil ($/bbl) Urals crude (CIF Mediterranean) 43.21 48.49 57.39 54.07 50.87 58.25 64.85 65.81 56.48 61.35 - ----------------------------------------------------------------------------- ------------------------------------------ Downstream Refinery Throughput* Crude Processed (MB/D) 92 101 138 156 122 163 168 164 220 179 - ----------------------------------------------------------------------------- ------------------------------------------ * Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM
2005 2006 -------------------------------------------- ----------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD -------------------------------------------- ----------------------------------------- Midstream Net Income ($ Millions) 385 68 88 147 688 110 108 169 89 476 =================================================================================== ========================================= U.S. Equity Affiliate ($ Millions)* 359 51 76 105 591 93 91 128 73 385 - ----------------------------------------------------------------------------------- ----------------------------------------- Natural Gas Liquids Extracted (MB/D) Consolidated United States 23 21 23 22 22 23 22 23 21 22 International 53 44 5 - 25 - - - - - Equity Affiliates United States* 110 112 171 172 142 178 183 180 181 181 International 6 6 6 6 6 6 6 7 7 6 - ----------------------------------------------------------------------------------- ----------------------------------------- Total 192 183 205 200 195 207 211 210 209 209 =================================================================================== ========================================= * Represents 30.3 percent interest in DCP Midstream through June 30, 2005, and 50 percent interest beginning in July 2005. Natural Gas Liquids Fractionated (MB/D) United States* 149 131 123 127 132 141 125 124 136 131 International 64 55 15 10 36 11 14 14 12 13 - ----------------------------------------------------------------------------------- ----------------------------------------- Total 213 186 138 137 168 152 139 138 148 144 =================================================================================== ========================================= * Excludes DCP Midstream Product Prices Weighted Average NGL ($/bbl)* Consolidated 31.95 32.49 39.60 42.70 36.68 37.64 41.73 44.10 37.41 40.22 DCP Midstream 30.61 31.33 38.31 41.84 35.52 37.29 41.18 43.00 36.34 39.45 - ----------------------------------------------------------------------------------- ----------------------------------------- * Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas liquids component and location mix. DD&A ($ Millions) 9 8 7 8 32 7 8 7 7 29 - ----------------------------------------------------------------------------------- -----------------------------------------
Page 11 of 12
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 13 114 323 149 103 142 98 492 ================================================================================= ========================================= Industry Margins (Cents/Lb)* Ethylene industry cash margin 18.1 12.8 8.8 21.1 15.2 20.5 14.3 17.0 16.0 17.0 HDPE industry contract sales margin 12.1 12.0 8.2 12.9 11.3 15.9 14.0 13.9 11.9 13.9 Styrene industry contract sales margin 13.9 13.6 12.4 12.3 13.1 12.5 11.9 11.3 11.5 11.8 - --------------------------------------------------------------------------------- ----------------------------------------- * 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) 11 8 15 ================================================================================= ========================================= Detail of Net Income (Loss) ($ Millions) Technology Solutions (2) (4) (5) (5) (16) (12) (4) (3) (4) (23) Gas-to-Liquids (7) (7) (4) (5) (23) (4) (3) (4) (2) (13) Power 2 9 17 15 43 31 3 26 22 82 Other (1) (6) (8) (10) (25) (7) (8) (8) (8) (31) - --------------------------------------------------------------------------------- ----------------------------------------- Total (8) (8) - (5) (21) 8 (12) 11 8 15 ================================================================================= ========================================= 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) (301) (306) (1,187) ================================================================================= ========================================= Detail of Net Income (Loss) ($ Millions) Net interest expense (106) (90) (139) (132) (467) (93) (267) (242) (268) (870) Corporate overhead (58) (46) (64) (15) (183) (26) (39) (35) (33) (133) Discontinued operations (11) 7 (4) (15) (23) - - - - - Acquisition-related expenses - - - - - (5) (39) (32) (22) (98) Accounting change - - - - - - - - - - Other (20) (43) (39) (3) (105) (44) (67) 8 17 (86) - --------------------------------------------------------------------------------- ----------------------------------------- Total (195) (172) (246) (165) (778) (168) (412) (301) (306) (1,187) ================================================================================= ========================================= Before-Tax Net Interest Expense ($ Millions) Interest expense (226) (219) (223) (224) (892) (226) (468) (417) (434) (1,545) Capitalized interest 88 91 102 114 395 111 107 110 130 458 Interest revenue 25 24 28 36 113 30 35 38 2 105 Receivables monetization related (1) - - - (1) - - - - - Premium on early debt retirement (9) - (50) (51) (110) - - - - - - --------------------------------------------------------------------------------- ----------------------------------------- (123) (104) (143) (125) (495) (85) (326) (269) (302) (982) ================================================================================= ========================================= Debt Total Debt ($ Millions) 14,012 14,013 13,497 12,516 12,516 32,193 29,510 27,807 27,134 27,134 Debt-to-Capital Ratio 23% 22% 21% 19% 19% 30% 27% 25% 24% 24% - --------------------------------------------------------------------------------- -----------------------------------------
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