-----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, NZ6EUBAawY4GdbCDDQXbEvHfOqZpo6ord0eQVeGuohkD1XniuLjByibDJTo6hzFV GNdPEpmO/uVIYGbKIrOuUA== 0001157523-07-004013.txt : 20070425 0001157523-07-004013.hdr.sgml : 20070425 20070425094215 ACCESSION NUMBER: 0001157523-07-004013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070425 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070425 DATE AS OF CHANGE: 20070425 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: 07786253 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 a5385814.txt CONOCOPHILLIPS 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): April 25, 2007 ConocoPhillips (Exact name of registrant as specified in its charter) Delaware 001-32395 01-0562944 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 600 North Dairy Ashford Houston, Texas 77079 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (281) 293-1000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On April 25, 2007, ConocoPhillips issued a press release announcing the company's financial and operating results for the quarter ended March 31, 2007. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference. Additional financial and operating information about the quarter is furnished as Exhibits 99.2 and 99.3 hereto and incorporated herein by reference. Item 9.01 Financial Statements and Exhibits (d) Exhibits 99.1 -- Press release issued by ConocoPhillips on April 25, 2007. 99.2 -- Financial and operational tables. 99.3 -- Supplemental financial information. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONOCOPHILLIPS /s/ Rand C. Berney ---------------------------------------- Rand C. Berney Vice President and Controller April 25, 2007 3 EXHIBIT INDEX Exhibit No. Description - ------- ----------- 99.1 Press release issued by ConocoPhillips on April 25, 2007. 99.2 Financial and operational tables. 99.3 Supplemental financial information. 4 EX-99.1 2 a5385814ex991.txt EXHIBIT 99.1 Exhibit 99.1 ConocoPhillips Reports First-Quarter Net Income of $3.5 Billion or $2.12 Per Diluted Share HOUSTON--(BUSINESS WIRE)--April 25, 2007--ConocoPhillips (NYSE:COP): Earnings at a glance - --------------------------------------------------------------------- First Quarter - --------------------------------------------------------------------- 2007 2006 - --------------------------------------------------------------------- Net income $3,546 million 3,291 million - --------------------------------------------------------------------- Diluted net income per share $2.12 2.34 - --------------------------------------------------------------------- Revenues(1) $41.3 billion 46.9 billion - --------------------------------------------------------------------- (1) 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 first-quarter net income of $3,546 million, or $2.12 per share. This compares with $3,291 million, or $2.34 per share, for the same quarter in 2006. Revenues were $41.3 billion, versus $46.9 billion a year ago. "Operating performance for the quarter was consistent with our plans and we continued to progress the execution of our financial strategy," said Jim Mulva, chairman and chief executive officer. "With respect to our upstream operations, we produced 2.47 million BOE per day, including an estimated 0.45 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. "We continued to strengthen our financial position by lowering our debt balance to $23.7 billion and improving our debt-to-capital ratio to 22 percent. During the quarter, we funded $3 billion of our capital program, reduced debt by $3.5 billion, repurchased $1 billion of ConocoPhillips common stock, and paid $0.7 billion in dividends. This was accomplished using $6.9 billion of cash generated from operations and $1.3 billion in proceeds from asset dispositions." First-quarter net income included a net benefit of $0.29 per share associated with the company's asset disposition efforts. The results for ConocoPhillips' business segments follow. Exploration and Production (E&P) First-quarter financial results: E&P net income was $2,329 million, up from $2,087 million in the fourth quarter of 2006 and down from $2,553 million in the first quarter of 2006. The increase from the previous quarter primarily was due to a $355 million net benefit associated with first-quarter 2007 asset rationalization efforts, lower asset impairments, and higher natural gas prices. The increased net income was partially offset by lower sales volumes and crude oil prices. The decrease from the first quarter of 2006 primarily was due to lower commodity prices, higher taxes, and higher operating costs. This decrease was partially offset by the current year net benefit from asset rationalization efforts and higher volumes. The increase in volumes reflected the inclusion of Burlington Resources' results, partially offset by normal field decline and OPEC reductions. Daily production from the E&P segment, including Canadian Syncrude and excluding the LUKOIL Investment segment, averaged 2.02 million barrels of oil equivalent (BOE) per day, a slight decline from 2.05 million BOE per day in the previous quarter and up from 1.61 million BOE per day in the first quarter of 2006. Compared to the fourth quarter of 2006, first-quarter 2007 production increased due to lower unplanned downtime in Alaska and the U.K. North Sea and volumes from the recently formed upstream business venture with EnCana. This increase was more than offset by the effect of asset dispositions, OPEC reductions in Venezuela and Libya, normal field decline, completion of recovery of the company's underlift in Libya during the previous quarter, and production sharing contract impacts. The increase from the first quarter of 2006 primarily was due to the addition of the Burlington Resources assets, Libya volumes and the upstream business venture with EnCana. The increased production was partially offset by normal field decline, production sharing contract impacts, OPEC reductions, and the effect of asset dispositions. Before-tax exploration expenses were $262 million in the first quarter of 2007, versus $391 million in the previous quarter and $112 million in the first quarter of 2006. Midstream First-quarter financial results: The Midstream segment includes the company's 50 percent interest in DCP Midstream, LLC. Midstream first-quarter net income was $85 million, down from $89 million in the previous quarter and $110 million in the first quarter of 2006. The decrease from the previous quarter primarily was due to lower volumes, partially offset by higher natural gas liquids prices. The decrease from the first quarter of 2006 primarily was due to lower volumes and natural gas liquids prices. Refining and Marketing (R&M) First-quarter financial results: R&M net income was $1,136 million in the first quarter, up from $919 million in the previous quarter and $390 million in the first quarter of 2006. Held-for-sale asset impairments were $192 million in the previous quarter. In the first quarter of 2007, previously reported held-for-sale asset impairments were reduced to reflect asset values consistent with finalized sales agreements. This resulted in a net benefit of $135 million in the first quarter. Operationally, first-quarter 2007 realized refining margins were higher than the previous period. Although domestic WTI-based market crack spreads improved significantly during the quarter, realized margins only improved slightly. This primarily was due to narrowing crude differentials, the periodic pricing of Brent and other crudes at a premium to WTI during the quarter, and the company's refining configuration. Internationally, the increase in market crack spreads was offset by lower trading results. In addition, lower refining volumes, largely due to fewer days in the quarter, and lower marketing margins more than offset the benefit from higher realized refining margins. The increase from the first quarter of 2006 primarily was due to higher worldwide refining and marketing margins, higher worldwide refining volumes, the first-quarter 2007 reduction in previously reported impairments, and lower turnaround costs. ConocoPhillips' crude oil refining capacity as of January 1, 2007, was 2,729,000 barrels per day, down from 2,901,000 barrels per day at year-end 2006, reflecting the contribution of the company's Wood River (Roxana, Ill.) and Borger (Texas) refineries to the downstream business venture with EnCana. The domestic refining crude oil capacity utilization rate for the first quarter was 95 percent, compared with 96 percent in the previous quarter. The international crude oil capacity utilization rate was 90 percent, compared with 87 percent in the previous quarter. Worldwide, R&M's refining crude oil capacity utilization rate of 94 percent remained unchanged from the previous quarter and was up from 85 percent in the first quarter of 2006. The first-quarter 2006 rate was impacted by turnaround activity and unplanned downtime at a number of the company's domestic refineries. Before-tax turnaround costs were $75 million in the first quarter of 2007, versus $94 million in the previous quarter and $163 million in the first quarter of 2006. LUKOIL Investment First-quarter financial results: LUKOIL Investment segment net income was $256 million, down from $302 million in the previous quarter and up from $249 million in the first quarter of 2006. The results include ConocoPhillips' estimated equity share of OAO LUKOIL's (LUKOIL) income for the first quarter based on market indicators and historical production trends for LUKOIL. The company's equity ownership interest in LUKOIL at the end of the first quarter was 20.6 percent based on an estimated 826 million shares outstanding. The decrease in net income from the previous quarter primarily was due to a fourth-quarter net benefit from alignment of the company's estimate of net income and ownership interest to LUKOIL's reported results, partially offset by estimated price and volume impacts. The increase from the first quarter of 2006 primarily was due to higher estimated volumes and ConocoPhillips' increased equity ownership, partially offset by the net impact from the alignment of estimated net income to LUKOIL's reported results and lower estimated commodity prices. For the first quarter of 2007, ConocoPhillips estimated its equity share of LUKOIL production was 445,000 BOE per day and its share of LUKOIL daily refining crude oil throughput was 219,000 barrels per day. Chemicals First-quarter financial results: The Chemicals segment, which includes the company's 50 percent interest in Chevron Phillips Chemical Company LLC, reported net income of $82 million, down from $98 million in the fourth quarter of 2006 and $149 million in the first quarter of 2006. The decrease from the previous quarter primarily was due to a business interruption insurance benefit recognized in the fourth quarter of 2006, lower margins, and higher turnaround costs. The decrease in net income was partially offset by a fourth-quarter 2006 asset retirement expense that did not recur in the first quarter. The decrease from the first quarter of 2006 was largely due to lower olefins and polyolefins margins and a business interruption insurance benefit recorded in the first quarter of 2006. Emerging Businesses The Emerging Businesses segment had a net loss of $1 million in the first quarter of 2007, compared with net income of $8 million in the previous quarter and net income of $8 million in the first quarter of 2006. Results were impacted by lower power generation earnings during the first quarter of 2007. Corporate and Other First-quarter Corporate expenses were $341 million, after tax, up from $306 million in the previous quarter and $168 million in the first quarter of 2006. The increase from the previous quarter was largely attributable to a $14 million foreign exchange loss in the first quarter of 2007, compared to a $61 million foreign exchange gain in the fourth quarter of 2006 and a $14 million premium on the early retirement of debt paid in the first quarter of 2007. The increase in Corporate expenses was partially offset by lower net interest expense and Burlington Resources acquisition-related charges. The increase from the first quarter of 2006 primarily was due to higher net interest expense, acquisition-related charges, and the premium paid on the early retirement of debt. Total debt at the end of the first quarter was $23.7 billion, a reduction of $3.5 billion during the quarter. The company's debt-to-capital ratio was 22 percent, compared to 24 percent at the end of 2006. ConocoPhillips' first-quarter effective tax rate was 41.5 percent. This is compared with 46.0 percent in the fourth quarter of 2006. The lower effective tax rate for the first quarter of 2007 was primarily the result of the company's asset rationalizations. Outlook Mr. Mulva concluded: "We achieved another quarter of strong financial results, and we continue to build shareholder value through operating excellence and project execution, capital discipline, debt reduction, and increased share repurchases and dividends. "We are continuing to advance our Canadian heavy oil projects with the implementation of the business ventures with EnCana in the first quarter and the ongoing development of Surmont Phase I. In our downstream business, we continue to make progress on the capital investments in the Wood River and Borger refineries. "Consistent with our plans, we anticipate the company's second-quarter E&P segment production to be lower due to scheduled maintenance, normal seasonality in Alaska, our exit from Dubai and asset dispositions. "In our downstream refining business, we expect crude oil capacity utilization to be in the mid-90-percent range in the second quarter. Turnaround costs are anticipated to be approximately $60 million for the quarter. "ConocoPhillips recently announced its support for a mandatory national framework to address greenhouse gas emissions and has joined the U.S. Climate Action Partnership. The company also announced the formation of a strategic alliance with Tyson Foods, Inc. to produce and market the next generation of renewable diesel fuel. In addition, ConocoPhillips established an eight-year, $22.5 million research program at Iowa State University dedicated to developing technologies that produce biorenewable fuels. "Meeting the twin challenges of taking action on climate change and providing adequate and reliable supplies of energy will require technical innovation, resource commitments and responsible stewardship by energy producers and consumers alike. ConocoPhillips intends to meet these challenges." ConocoPhillips is an integrated petroleum company with interests around the world. Headquartered in Houston, the company had approximately 38,700 employees, $173 billion of assets, and $165 billion of annualized revenues as of March 31, 2007. 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 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, Houston Gary Russell, 212-207-1996 (investors) or Becky Johnson, 281-293-6743 (media) EX-99.2 3 a5385814ex992.txt EXHIBIT 99.2 Exhibit 99.2 Conoco Phillips Houston, Texas 77079
Preliminary FINANCIAL HIGHLIGHTS Millions of Dollars Three Months Ended March 31 2007 2006 ------------------ ----------------- Revenues and other income Sales and other operating revenues* $ 41,320 46,906 Equity in earnings of affiliates 929 960 Other income 618 61 ------------------ ----------------- 42,867 47,927 ------------------ ----------------- Costs and expenses Purchased crude oil, natural gas and products 26,715 33,455 Production and operating expenses 2,492 2,215 Selling, general and administrative expenses 527 566 Exploration expenses 262 112 Depreciation, depletion and amortization 2,024 1,180 Impairments (1) - Taxes other than income taxes* 4,374 4,387 Accretion on discounted liabilities 79 60 Interest and debt expense 307 115 Foreign currency transaction losses 1 22 Minority interests 21 18 ------------------ ----------------- 36,801 42,130 ------------------ ----------------- Income before income taxes 6,066 5,797 Provision for income taxes 2,520 2,506 ------------------ ----------------- Net income 3,546 3,291 ================== ================= Net income per share of common stock (dollars) Basic $ 2.15 2.38 ================== ================= Diluted $ 2.12 2.34 ================== ================= Average common shares outstanding (in thousands) Basic 1,647,352 1,382,925 Diluted 1,668,847 1,404,704 *Includes excise taxes on petroleum products sales: $ 3,717 3,990
1 Conoco Phillips Houston, Texas 77079
Preliminary SELECTED FINANCIAL DATA Millions of Dollars Three Months Ended March 31 2007 2006 ------------------ ----------------- SUMMARY OF NET INCOME (LOSS) E&P United States $ 916 1,181 International 1,413 1,372 ------------------ ----------------- Total E&P 2,329 2,553 ------------------ ----------------- Midstream 85 110 ------------------ ----------------- R&M United States 896 297 International 240 93 ------------------ ----------------- Total R&M 1,136 390 ------------------ ----------------- LUKOIL Investment 256 249 Chemicals 82 149 Emerging Businesses (1) 8 Corporate and other (341) (168) ------------------ ----------------- Consolidated $ 3,546 3,291 ================== =================
2 Conoco Phillips Houston, Texas 77079
Preliminary SELECTED FINANCIAL DATA Three Months Ended March 31 2007 2006 ------------------ ----------------- Effective tax rate % 41.5 % 43.2 Millions of Dollars FOREIGN CURRENCY GAINS (LOSSES) AFTER-TAX E&P $ 17 7 Midstream - - R&M - 6 LUKOIL Investment - - Chemicals - - Emerging Businesses - - Corporate and other (14) (8) ------------------ ----------------- $ 3 5 ================== ================= CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 3,546 3,291 Depreciation, depletion and amortization 2,024 1,180 Impairments (1) - Dry hole costs and leasehold impairments 148 38 Accretion on discounted liabilities 79 60 Deferred taxes 77 168 Undistributed equity earnings (557) (67) Net gain on asset dispositions (499) (3) Other (94) (203) Working capital adjustments 2,150 336 ------------------ ----------------- Net cash provided by operating activities $ 6,873 4,800 ================== ================= CAPITAL EXPENDITURES AND INVESTMENTS E&P United States $ 843 419 International 1,727 1,787 ------------------ ----------------- 2,570 2,206 Midstream - 1 R&M 205 1,635 LUKOIL Investment - 612 Chemicals - - Emerging Businesses 31 12 Corporate and other 41 48 ------------------ ----------------- $ 2,847 4,514 ================== ================= OTHER March 31, 2007 December 31, 2006 ------------------ ----------------- Total debt $ 23,668 27,134 Common stockholders' equity $ 84,782 82,646
3 Conoco Phillips Houston, Texas 77079
Preliminary OPERATING HIGHLIGHTS BY SEGMENT Three Months Ended March 31 2007 2006 ------------------ ----------------- Thousands of Barrels Daily E&P Crude oil produced United States Alaska 276 283 Lower 48 104 64 ------------------ ----------------- 380 347 Norway 179 188 United Kingdom 55 62 Canada 21 22 China 38 25 Indonesia 13 14 Vietnam 23 31 Timor Sea 24 39 Libya 45 - Other 62 49 ------------------ ----------------- Total consolidated 840 777 Equity affiliates Canada 23 - Russia 15 16 Venezuela 82 110 ------------------ ----------------- Total Worldwide 960 903 ================== ================= Syncrude 23 16 ================== ================= Natural gas liquids produced United States Alaska* 22 22 Lower 48 68 29 ------------------ ----------------- 90 51 Norway 8 11 Canada 31 9 Timor Sea 12 20 Other 9 6 ------------------ ----------------- Total Worldwide 150 97 ================== ================= *Includes reinjected volumes sold lease-to-lease. 16 14 Millions of Cubic Feet Daily Natural gas produced* United States Alaska 122 163 Lower 48 2,190 1,264 ------------------ ----------------- 2,312 1,427 Norway 247 269 United Kingdom 785 851 Canada 1,152 424 China 11 - Timor Sea 243 144 Indonesia 331 294 Vietnam 15 24 Libya 5 - Other 212 121 ------------------ ----------------- Total consolidated 5,313 3,554 Equity affiliates Venezuela 9 11 ------------------ ----------------- Total Worldwide 5,322 3,565 ================== ================= *Represents quantities available for sale. Excludes gas equivalent of NGL shown above. Liquefied natural gas sales 492 264 LUKOIL Investment Production (MBOE/D)* 445 322 Refinery crude oil throughput (MB/D)* 219 163 *Represents our estimated net share of LUKOIL.
4 Conoco Phillips Houston, Texas 77079
Preliminary OPERATING HIGHLIGHTS Three Months Ended March 31 2007 2006 ------------------ ----------------- E&P Per Unit Average sales prices Crude oil (per barrel) United States Alaska $ 55.50 58.87 Lower 48 49.32 52.21 Total U.S. 53.78 57.70 International 56.29 60.08 Total consolidated 55.17 58.97 Equity affiliates* 40.02 43.38 Total Worldwide 53.38 56.63 Natural gas (per MCF) United States Alaska 4.19 3.58 Lower 48 6.21 7.50 Total U.S. 6.19 7.42 International 6.49 7.16 Total consolidated 6.36 7.26 Equity affiliates* 0.48 0.23 Total Worldwide 6.35 7.24 *Excludes our equity share of LUKOIL reported in the LUKOIL Investment segment. Midstream Thousands of Barrels Daily Natural gas liquids extracted Consolidated United States 15 23 International - - Equity affiliates United States 174 178 International 8 6 ------------------ ----------------- 197 207 ================== ================= Per Barrel U.S. product prices Weighted average NGL** Consolidated $ 37.73 37.64 DCP 36.55 37.29 **Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural-gas-liquids component and location mix.
5 Conoco Phillips Houston, Texas 77079
Three Months Ended March 31 2007 2006 ------------------ ----------------- Thousands of Barrels Daily R&M United States Crude oil capacity 2,033 2,208 Crude oil runs 1,938 1,840 Refinery production 2,152 1,988 International* Crude oil capacity 696 523 Crude oil runs 623 490 Refinery production 644 500 U.S. petroleum products outside sales Gasoline 1,258 1,258 Distillates 862 813 Other products 480 517 ------------------ ----------------- 2,600 2,588 International 713 695 ------------------ ----------------- 3,313 3,283 ================== ================= Per Gallon U.S. average sales prices** Gasoline-wholesale $ 1.86 1.79 Gasoline-retail 2.03 1.90 Distillates-wholesale 1.94 1.89 *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 a5385814ex993.txt EXHIBIT 99.3 Exhibit 99.3
SUMMARY OF NET INCOME (LOSS) BY SEGMENT Millions of Dollars ---------------------------------------------------------------------------------------------------- 2006 2007 ------------------------------------------------- -------------------------------------------------- 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 1,181 1,300 995 872 4,348 916 916 International E&P 1,372 2,004 909 1,215 5,500 1,413 1,413 - ------------------------------------------------------------------------------- -------------------------------------------------- Total E&P 2,553 3,304 1,904 2,087 9,848 2,329 2,329 - ------------------------------------------------------------------------------- -------------------------------------------------- Midstream 110 108 169 89 476 85 85 - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. R&M 297 1,433 1,444 741 3,915 896 896 International R&M 93 275 20 178 566 240 240 - ------------------------------------------------------------------------------- -------------------------------------------------- Total R&M 390 1,708 1,464 919 4,481 1,136 1,136 - ------------------------------------------------------------------------------- -------------------------------------------------- LUKOIL Investment 249 387 487 302 1,425 256 256 Chemicals 149 103 142 98 492 82 82 Emerging Businesses 8 (12) 11 8 15 (1) (1) Corporate and Other (168) (412) (301) (306) (1,187) (341) (341) - ------------------------------------------------------------------------------- -------------------------------------------------- Consolidated 3,291 5,186 3,876 3,197 15,550 3,546 3,546 =============================================================================== ================================================== Cumulative Effect of Accounting Changes U.S. E&P - - - - - - - International E&P - - - - - - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total E&P - - - - - - - - ------------------------------------------------------------------------------- -------------------------------------------------- Midstream - - - - - - - - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. R&M - - - - - - - International R&M - - - - - - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total R&M - - - - - - - - ------------------------------------------------------------------------------- -------------------------------------------------- LUKOIL Investment - - - - - - - Chemicals - - - - - - - Emerging Businesses - - - - - - - Corporate and Other - - - - - - - - ------------------------------------------------------------------------------- -------------------------------------------------- Consolidated - - - - - - - =============================================================================== ================================================== Income (Loss) from Discontinued Operations Corporate and Other - - - - - - - =============================================================================== ================================================== Net Income (Loss) U.S. E&P 1,181 1,300 995 872 4,348 916 916 International E&P 1,372 2,004 909 1,215 5,500 1,413 1,413 - ------------------------------------------------------------------------------- -------------------------------------------------- Total E&P 2,553 3,304 1,904 2,087 9,848 2,329 2,329 - ------------------------------------------------------------------------------- -------------------------------------------------- Midstream 110 108 169 89 476 85 85 - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. R&M 297 1,433 1,444 741 3,915 896 896 International R&M 93 275 20 178 566 240 240 - ------------------------------------------------------------------------------- -------------------------------------------------- Total R&M 390 1,708 1,464 919 4,481 1,136 1,136 - ------------------------------------------------------------------------------- -------------------------------------------------- LUKOIL Investment 249 387 487 302 1,425 256 256 Chemicals 149 103 142 98 492 82 82 Emerging Businesses 8 (12) 11 8 15 (1) (1) Corporate and Other (168) (412) (301) (306) (1,187) (341) (341) - ------------------------------------------------------------------------------- -------------------------------------------------- Consolidated 3,291 5,186 3,876 3,197 15,550 3,546 3,546 =============================================================================== ================================================== Page 1 of 12
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Millions of Dollars ---------------------------------------------------------------------------------------------------- 2006 2007 ------------------------------------------------- -------------------------------------------------- 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 1,853 2,062 1,598 1,380 6,893 1,425 1,425 International E&P 2,862 3,814 3,460 2,948 13,084 2,894 2,894 - ------------------------------------------------------------------------------- -------------------------------------------------- Total E&P 4,715 5,876 5,058 4,328 19,977 4,319 4,319 - ------------------------------------------------------------------------------- -------------------------------------------------- Midstream 173 187 214 150 724 132 132 - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. R&M 512 2,260 2,282 1,195 6,249 1,400 1,400 International R&M 112 343 107 222 784 218 218 - ------------------------------------------------------------------------------- -------------------------------------------------- Total R&M 624 2,603 2,389 1,417 7,033 1,618 1,618 - ------------------------------------------------------------------------------- -------------------------------------------------- LUKOIL Investment 257 398 496 311 1,462 262 262 Chemicals 209 134 191 128 662 107 107 Emerging Businesses 9 (20) 14 11 14 (3) (3) Corporate and Other (190) (496) (425) (428) (1,539) (369) (369) - ------------------------------------------------------------------------------- -------------------------------------------------- Consolidated 5,797 8,682 7,937 5,917 28,333 6,066 6,066 =============================================================================== ================================================== Income from Continuing Operations Effective Tax Rates U.S. E&P 36.3% 37.0% 37.7% 36.8% 36.9% 35.7% 35.7% International E&P 52.1% 47.5% 73.7% 58.8% 58.0% 51.2% 51.2% - ------------------------------------------------------------------------------- -------------------------------------------------- Total E&P 45.9% 43.8% 62.4% 51.8% 50.7% 46.1% 46.1% - ------------------------------------------------------------------------------- -------------------------------------------------- Midstream 36.4% 42.2% 21.0% 40.7% 34.3% 35.6% 35.6% - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. R&M 42.0% 36.6% 36.7% 38.0% 37.3% 36.0% 36.0% International R&M 17.0% 19.8% 81.3% 19.8% 27.8% -10.1% -10.1% - ------------------------------------------------------------------------------- -------------------------------------------------- Total R&M 37.5% 34.4% 38.7% 35.1% 36.3% 29.8% 29.8% - ------------------------------------------------------------------------------- -------------------------------------------------- LUKOIL Investment 3.1% 2.8% 1.8% 2.9% 2.5% 2.3% 2.3% Chemicals 28.7% 23.1% 25.7% 23.4% 25.7% 23.4% 23.4% Emerging Businesses 11.1% 40.0% 21.4% 27.3% -7.1% 66.7% 66.7% Corporate and Other 11.6% 16.9% 29.2% 28.5% 22.9% 7.6% 7.6% - ------------------------------------------------------------------------------- -------------------------------------------------- Consolidated 43.2% 40.3% 51.2% 46.0% 45.1% 41.5% 41.5% =============================================================================== ================================================== Page 2 of 12
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX) Millions of Dollars ---------------------------------------------------------------------------------------------------- 2006 2007 ------------------------------------------------- -------------------------------------------------- 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 - 15 - 33 48 36 36 Impairments - (26) - (10) (36) - - Insurance premium adjustments (2) - (5) (4) (11) - - Pending claims and settlements - - 18 - 18 - - Business interruption insurance claims recovery - - 15 - 15 - - Enacted tax legislation - 2 - - 2 - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total (2) (9) 28 19 36 36 36 - ------------------------------------------------------------------------------- -------------------------------------------------- International E&P Gain (loss) on asset sales - 25 - - 25 407 407 Insurance premium adjustments (10) - (10) (8) (28) - - International tax law changes - 401 (270) (31) 100 38 38 Impairments - - (4) (104) (108) (88) (88) Business interruption insurance claims recovery - - 11 3 14 - - Pending claims and settlements - - - 25 25 - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total (10) 426 (273) (115) 28 357 357 - ------------------------------------------------------------------------------- -------------------------------------------------- Total E&P (12) 417 (245) (96) 64 393 393 - ------------------------------------------------------------------------------- -------------------------------------------------- Midstream Business interruption insurance claims recovery - - - 5 5 - - DCP Midstream's sale of TEPPCO general ptnr - - 30 - 30 - - Enacted tax legislation - (6) - - (6) - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total - (6) 30 5 29 - - - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. R&M Impairments - - (35) (192) (227) (13) (13) Insurance premium adjustments (6) - (7) (6) (19) - - Business interruption insurance claims recovery - - 111 - 111 - - Enacted tax legislation - 34 - - 34 - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total (6) 34 69 (198) (101) (13) (13) - ------------------------------------------------------------------------------- -------------------------------------------------- International R&M Impairments - - (214) - (214) 148 148 Insurance premium adjustments (1) - (1) (1) (3) - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total (1) - (215) (1) (217) 148 148 - ------------------------------------------------------------------------------- -------------------------------------------------- Total R&M (7) 34 (146) (199) (318) 135 135 - ---------------------------------------------------------------------------------------------------------------------------------- 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) (13) (13) Premium on early debt retirement - - - - - (14) (14) Pending claims and settlements (15) - - - (15) - - Canada tax law change - (10) - - (10) - - - ------------------------------------------------------------------------------- -------------------------------------------------- Total (20) (49) (32) (22) (123) (27) (27) - ------------------------------------------------------------------------------- -------------------------------------------------- Total Company (39) 377 (363) (315) (340) 501 501 =============================================================================== ================================================== Page 3 of 12
CASH FLOW INFORMATION Millions of Dollars ---------------------------------------------------------------------------------------------------- 2006 2007 ------------------------------------------------- -------------------------------------------------- 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 3,291 5,186 3,876 3,197 15,550 3,546 3,546 DD&A and impairments 1,180 2,015 2,404 2,368 7,967 2,023 2,023 Dry hole costs and leasehold impairments 38 47 56 210 351 148 148 Accretion on discounted liabilities 60 73 74 74 281 79 79 Deferred income taxes 168 (390) 495 (56) 217 77 77 Undistributed equity earnings (67) (687) (253) 62 (945) (557) (557) Net gain on asset dispositions (3) (53) (8) (52) (116) (499) (499) Other (203) 189 (282) 95 (201) (94) (94) Net working capital changes 336 (1,536) (127) (261) (1,588) 2,150 2,150 - ------------------------------------------------------------------------------- -------------------------------------------------- Net Cash Provided by Operating Activities 4,800 4,844 6,235 5,637 21,516 6,873 6,873 - ------------------------------------------------------------------------------- -------------------------------------------------- Cash Flows from Investing Activities Capital expenditures and investments*: E&P (2,206) (2,172) (2,454) (2,681) (9,513) (2,570) (2,570) Midstream (1) (1) - (2) (4) - - R&M (1,635) (475) (374) (532) (3,016) (205) (205) LUKOIL Investment (612) (648) (702) (753) (2,715) - - Chemicals - - - - - - - Emerging Businesses (12) (28) (6) (37) (83) (31) (31) Corporate and Other (48) (78) (61) (78) (265) (41) (41) - ------------------------------------------------------------------------------- -------------------------------------------------- Total capital expend. & investments (4,514) (3,402) (3,597) (4,083) (15,596) (2,847) (2,847) Acquisition of Burlington Resources Inc.* (14,190) (94) (1) - (14,285) - - Proceeds from asset dispositions 5 68 173 299 545 1,343 1,343 Long-term advances to/collections from affiliates and other investments (115) (151) (251) (140) (657) (144) (144) - ------------------------------------------------------------------------------- -------------------------------------------------- Net Cash Used for Investing Activities (18,814) (3,579) (3,676) (3,924) (29,993) (1,648) (1,648) - ------------------------------------------------------------------------------- -------------------------------------------------- Cash Flows from Financing Activities Net issuance (repayment) of debt 15,324 (2,756) (1,630) (706) 10,232 (3,491) (3,491) Issuance of stock 40 64 41 75 220 40 40 Repurchase of stock - (425) (250) (250) (925) (1,000) (1,000) Dividends (496) (595) (593) (593) (2,277) (674) (674) Other (27) (20) (76) (62) (185) (49) (49) - ------------------------------------------------------------------------------- -------------------------------------------------- Net Cash Provided by (Used for) Financing Activities 14,841 (3,732) (2,508) (1,536) 7,065 (5,174) (5,174) - ------------------------------------------------------------------------------- -------------------------------------------------- Effect of Exchange Rate Changes (33) 113 (9) (56) 15 (8) (8) - ------------------------------------------------------------------------------- -------------------------------------------------- Net Change in Cash and Cash Equivalents 794 (2,354) 42 121 (1,397) 43 43 Cash and cash equivalents at beginning of period 2,214 3,008 654 696 2,214 817 817 - ------------------------------------------------------------------------------- -------------------------------------------------- Cash and Cash Equivalents at End of Period 3,008 654 696 817 817 860 860 =============================================================================== ================================================== * Net of cash acquired. Page 4 of 12
TOTAL E&P 2006 2007 ------------------------------------------------- -------------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ------------------------------------------------- -------------------------------------------------- E&P Net Income ($ Millions) 2,553 3,304 1,904 2,087 9,848 2,329 2,329 =============================================================================== ================================================== Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 1,610 2,134 2,036 2,047 1,957 2,020 2,020 - ------------------------------------------------------------------------------- -------------------------------------------------- E&P segment plus LUKOIL Investment segment: 1,932 2,537 2,472 2,485 2,358 2,465 2,465 - ------------------------------------------------------------------------------- -------------------------------------------------- Crude Oil and Condensate (MB/D) Consolidated 777 924 865 859 856 840 840 Equity affiliates 126 121 104 113 116 120 120 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 903 1,045 969 972 972 960 960 =============================================================================== ================================================== Sales of crude oil produced (MB/D) 913 1,040 953 988 973 949 949 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas Liquids (MB/D) 97 152 146 150 136 150 150 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas (MMCF/D) Consolidated 3,554 5,498 5,379 5,387 4,961 5,313 5,313 Equity affiliates 11 10 8 7 9 9 9 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 3,565 5,508 5,387 5,394 4,970 5,322 5,322 ================================================================================================================================== Canadian Syncrude (MB/D) 16 19 23 26 21 23 23 - ------------------------------------------------------------------------------- -------------------------------------------------- Industry Prices (Platt's) Crude Oil ($/bbl) WTI spot 63.28 70.40 70.38 59.94 66.00 57.99 57.99 Brent dated 61.75 69.62 69.49 59.68 65.14 57.76 57.76 Natural Gas ($/mmbtu) Henry Hub -- First of Month 9.01 6.80 6.58 6.56 7.24 6.77 6.77 - ------------------------------------------------------------------------------- -------------------------------------------------- Average Realized Prices Crude Oil and Condensate ($/bbl) Consolidated 58.97 65.89 67.37 56.87 62.39 55.17 55.17 Equity affiliates 43.38 52.28 46.98 41.79 46.01 40.02 40.02 Total 56.63 64.34 65.04 55.10 60.37 53.38 53.38 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas Liquids ($/bbl) 43.13 41.75 43.62 38.23 41.50 38.56 38.56 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas ($/mcf) Consolidated 7.26 5.86 5.92 6.13 6.20 6.36 6.36 Equity affiliates 0.23 0.36 0.32 0.32 0.30 0.48 0.48 Total 7.24 5.85 5.91 6.12 6.19 6.35 6.35 - ------------------------------------------------------------------------------- -------------------------------------------------- Exploration Charges ($ Millions) Dry Holes 19 15 18 142 194 62 62 Lease Impairments 19 33 37 68 157 86 86 - ------------------------------------------------------------------------------- -------------------------------------------------- Total Non-Cash Charges 38 48 55 210 351 148 148 Other (G&G and Lease Rentals) 74 86 142 181 483 114 114 - ------------------------------------------------------------------------------- -------------------------------------------------- Total Exploration Charges 112 134 197 391 834 262 262 =============================================================================== ================================================== Depreciation, Depletion and Amortization (DD&A) ($ Millions) 910 1,659 1,860 1,703 6,132 1,802 1,802 - ------------------------------------------------------------------------------- -------------------------------------------------- Page 5 of 12
U.S. E&P 2006 2007 ------------------------------------------------- -------------------------------------------------- 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) 1,181 1,300 995 872 4,348 916 916 =============================================================================== ================================================== Alaska ($ Millions) 692 760 425 470 2,347 507 507 - ------------------------------------------------------------------------------- -------------------------------------------------- Lower 48 ($ Millions) 489 540 570 402 2,001 409 409 - ------------------------------------------------------------------------------- -------------------------------------------------- Production Total U.S. (MBOE/D) 636 894 846 856 808 855 855 - ------------------------------------------------------------------------------- -------------------------------------------------- Crude Oil and Condensate (MB/D) Alaska 283 279 234 257 263 276 276 Lower 48 64 120 119 113 104 104 104 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 347 399 353 370 367 380 380 =============================================================================== ================================================== Sales of crude oil produced (MB/D) 363 398 355 371 371 372 372 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas Liquids (MB/D)* Alaska 22 20 11 17 17 22 22 Lower 48 29 70 75 72 62 68 68 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 51 90 86 89 79 90 90 =============================================================================== ================================================== *Includes reinjection volumes sold lease-to-lease: 14 14 7 9 11 16 16 - ---------------------------------------------------------------------------------------------------------------------------------- Natural Gas (MMCF/D) Alaska 163 163 123 131 145 122 122 Lower 48 1,264 2,265 2,320 2,250 2,028 2,190 2,190 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 1,427 2,428 2,443 2,381 2,173 2,312 2,312 =============================================================================== ================================================== Average Realized Prices Crude Oil and Condensate ($/bbl) Alaska North Slope 52.92 59.89 62.85 51.11 58.43 48.83 48.83 - ------------------------------------------------------------------------------- -------------------------------------------------- West Coast 58.87 66.02 69.66 57.00 62.66 55.50 55.50 - ------------------------------------------------------------------------------- -------------------------------------------------- Lower 48 52.21 59.63 62.45 51.26 57.04 49.32 49.32 - ------------------------------------------------------------------------------- -------------------------------------------------- Total U.S. 57.70 64.09 67.25 55.26 61.09 53.78 53.78 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas Liquids ($/bbl) Alaska 58.88 65.25 67.12 57.03 61.06 55.27 55.27 - ------------------------------------------------------------------------------- -------------------------------------------------- Lower 48 38.20 38.29 41.34 34.51 38.10 36.46 36.46 - ------------------------------------------------------------------------------- -------------------------------------------------- Total U.S. 43.00 40.45 42.68 36.74 40.35 37.86 37.86 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas ($/mcf) Alaska 3.58 3.42 3.36 4.05 3.59 4.19 4.19 - ------------------------------------------------------------------------------- -------------------------------------------------- Lower 48 7.50 5.81 6.00 5.85 6.14 6.21 6.21 - ------------------------------------------------------------------------------- -------------------------------------------------- Total U.S. 7.42 5.78 5.98 5.84 6.11 6.19 6.19 - ------------------------------------------------------------------------------- -------------------------------------------------- Kenai, Alaska LNG Sales Volume (MMCF/D) 128 126 110 88 113 104 104 - ------------------------------------------------------------------------------- -------------------------------------------------- Sales price per MCF 6.45 5.16 6.16 6.33 6.00 5.83 5.83 - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. Exploration Charges ($ Millions) Dry Holes 8 3 8 67 86 13 13 Lease Impairments 8 15 13 46 82 43 43 - ------------------------------------------------------------------------------- -------------------------------------------------- Total Non-Cash Charges 16 18 21 113 168 56 56 Other (G&G and Lease Rentals) 14 1 66 55 136 26 26 - ------------------------------------------------------------------------------- -------------------------------------------------- Total U.S. Exploration Charges 30 19 87 168 304 82 82 =============================================================================== ================================================== Alaska Only 18 (7) 50 21 82 17 17 - ------------------------------------------------------------------------------- -------------------------------------------------- DD&A ($ Millions) Alaska 132 135 137 151 555 168 168 Lower 48 251 634 784 623 2,292 618 618 - ------------------------------------------------------------------------------- -------------------------------------------------- Total U.S. 383 769 921 774 2,847 786 786 =============================================================================== ================================================== Page 6 of 12
INTERNATIONAL E&P 2006 2007 ------------------------------------------------- -------------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ------------------------------------------------- -------------------------------------------------- International E&P Net Income ($ Millions) 1,372 2,004 909 1,215 5,500 1,413 1,413 =============================================================================== ================================================== Production Total, Including Equity Affiliates and Canadian Syncrude (MBOE/D) 974 1,240 1,190 1,191 1,149 1,165 1,165 - ------------------------------------------------------------------------------- -------------------------------------------------- Crude Oil and Condensate (MB/D) Consolidated Norway 188 192 190 185 189 179 179 United Kingdom 62 57 50 56 56 55 55 Canada 22 27 26 27 25 21 21 China 25 34 36 36 33 38 38 Indonesia 14 14 11 10 12 13 13 Vietnam 31 22 24 23 25 23 23 Timor Sea 39 39 40 27 36 24 24 Libya - 74 71 56 50 45 45 Other 49 66 64 69 63 62 62 Equity affiliates Canada - - - - - 23 23 Russia 16 15 15 14 15 15 15 Venezuela 110 106 89 99 101 82 82 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 556 646 616 602 605 580 580 =============================================================================== ================================================== Sales of crude oil produced (MB/D) 550 642 598 617 602 577 577 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas Liquids (MB/D) Norway 11 8 9 8 9 8 8 Canada 9 30 28 31 25 31 31 Timor Sea 20 20 20 15 18 12 12 Other 6 4 3 7 5 9 9 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 46 62 60 61 57 60 60 =============================================================================== ================================================== Natural Gas (MMCF/D) Consolidated Norway 269 260 260 291 270 247 247 United Kingdom 851 796 665 734 761 785 785 Canada 424 1,204 1,154 1,140 983 1,152 1,152 China - 10 8 9 7 11 11 Timor Sea 144 251 300 243 235 243 243 Indonesia 294 323 342 315 319 331 331 Vietnam 24 19 20 20 21 15 15 Libya - - - 17 4 5 5 Other 121 207 187 237 188 212 212 Equity affiliates Canada - - - - - - - Russia - - - - - - - Venezuela 11 10 8 7 9 9 9 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 2,138 3,080 2,944 3,013 2,797 3,010 3,010 =============================================================================== ================================================== Canadian Syncrude (MB/D) 16 19 23 26 21 23 23 - ------------------------------------------------------------------------------- -------------------------------------------------- Darwin, Australia LNG Sales (MMCF/D) 136 305 411 382 310 388 388 - ------------------------------------------------------------------------------- -------------------------------------------------- Page 7 of 12
INTERNATIONAL E&P (continued) 2006 2007 ------------------------------------------------- -------------------------------------------------- 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 ($/bbl) Consolidated Norway 61.36 68.64 68.48 60.07 64.61 57.36 57.36 United Kingdom 59.13 65.32 64.67 58.71 62.08 55.52 55.52 Canada 44.28 60.86 61.00 49.28 54.25 48.70 48.70 China 57.90 66.68 64.68 51.06 60.00 54.93 54.93 Indonesia 57.94 58.15 62.69 52.21 57.80 54.66 54.66 Vietnam 62.34 68.53 71.35 56.77 64.75 57.88 57.88 Timor Sea 60.37 66.98 66.84 57.27 63.21 59.15 59.15 Libya - 68.07 67.75 58.19 65.11 56.19 56.19 Other 62.95 69.20 70.39 60.92 65.85 55.73 55.73 Equity affiliates Canada - - - - - 32.46 32.46 Russia 40.86 46.87 48.29 36.86 43.20 37.92 37.92 Venezuela 43.71 53.03 46.78 42.48 46.40 42.54 42.54 Total 55.92 64.50 63.73 55.00 59.92 53.12 53.12 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas Liquids ($/bbl) Norway 42.55 40.99 43.91 39.46 41.61 38.82 38.82 Canada 46.21 46.73 46.16 43.87 45.62 41.15 41.15 Timor Sea 46.68 41.35 45.63 41.62 43.95 44.13 44.13 Other 27.16 33.82 26.79 19.33 26.23 27.18 27.18 Total 43.25 43.28 44.89 40.25 42.89 39.38 39.38 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas ($/mcf) Consolidated Norway 7.28 7.09 7.48 8.58 7.61 7.00 7.00 United Kingdom 8.81 6.84 7.08 8.52 7.85 8.14 8.14 Canada 6.28 5.47 5.43 5.91 5.67 6.38 6.38 China - 1.90 4.11 2.80 2.87 2.64 2.64 Timor Sea 0.67 0.65 0.69 0.74 0.69 0.76 0.76 Indonesia 7.45 7.53 6.71 5.78 6.86 6.04 6.04 Vietnam 1.07 1.07 1.07 1.05 1.06 1.10 1.10 Libya - - - 0.09 0.09 0.07 0.07 Other 0.82 2.57 2.04 2.02 1.98 2.71 2.71 Equity affiliates Canada - - - - - - - Russia - - - - - - - Venezuela 0.23 0.36 0.32 0.32 0.30 0.29 0.29 Total 7.13 5.90 5.85 6.36 6.25 6.47 6.47 - ------------------------------------------------------------------------------- -------------------------------------------------- International Exploration Charges ($ Millions) Dry Holes 11 12 10 75 108 49 49 Lease Impairments 11 18 24 22 75 43 43 - ------------------------------------------------------------------------------- -------------------------------------------------- Total Non-Cash Charges 22 30 34 97 183 92 92 Other (G&G and Lease Rentals) 60 85 76 126 347 88 88 - ------------------------------------------------------------------------------- -------------------------------------------------- Total International Exploration Charges 82 115 110 223 530 180 180 =============================================================================== ================================================== DD&A ($ Millions) 527 890 939 929 3,285 1,016 1,016 - ------------------------------------------------------------------------------- -------------------------------------------------- Page 8 of 12
R&M 2006 2007 ------------------------------------------------- -------------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ------------------------------------------------- -------------------------------------------------- R&M Net Income ($ Millions) 390 1,708 1,464 919 4,481 1,136 1,136 =============================================================================== ================================================== United States ($ Millions) 297 1,433 1,444 741 3,915 896 896 - ------------------------------------------------------------------------------- -------------------------------------------------- International ($ Millions) 93 275 20 178 566 240 240 - ------------------------------------------------------------------------------- -------------------------------------------------- Market Indicators U.S. East Coast Crack Spread ($/bbl) 7.52 15.21 10.54 7.86 10.28 11.81 11.81 U.S. Gulf Coast Crack Spread ($/bbl) 8.28 17.26 11.00 6.77 10.83 10.06 10.06 U.S. Group Central Crack Spread ($/bbl) 9.81 19.60 17.75 10.11 14.32 14.84 14.84 U.S. West Coast Crack Spread ($/bbl) 18.87 32.47 21.70 20.36 23.35 28.68 28.68 U.S. Weighted 3:2:1 Crack Spread ($/bbl) 10.56 20.39 14.86 10.49 14.07 15.30 15.30 NW Europe Crack Spread ($/bbl) 10.18 15.20 14.18 11.46 12.75 12.06 12.06 Singapore 3:1:2 Crack Spread ($/bbl) 10.58 19.30 15.13 11.03 14.01 14.06 14.06 U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.71 1.83 5.75 1.81 2.52 1.15 1.15 - ------------------------------------------------------------------------------- -------------------------------------------------- Realized Margins Refining Margin ($/bbl) U.S. 10.18 17.23 14.10 11.39 13.29 11.87 11.87 International 5.30 7.64 6.46 6.22 6.50 5.06 5.06 - ------------------------------------------------------------------------------- -------------------------------------------------- Marketing Margin ($/bbl)* U.S. 0.12 0.48 2.92 1.34 1.23 1.31 1.31 International 6.07 6.67 11.17 9.50 8.38 7.08 7.08 - ------------------------------------------------------------------------------- -------------------------------------------------- DD&A ($ Millions) 239 253 246 266 1,004 191 191 - ------------------------------------------------------------------------------- -------------------------------------------------- Turnaround Expense ($ Millions) 163 115 42 94 414 75 75 - ------------------------------------------------------------------------------- -------------------------------------------------- Eastern U.S. Crude Oil Charge Input (MB/D) 354 281 377 411 356 411 411 Total Charge Input (MB/D) 359 309 418 457 386 460 460 Crude Oil Capacity Utilization (%) 84% 66% 89% 97% 84% 97% 97% Clean Product Yield (%) 90% 87% 88% 90% 89% 89% 89% - ------------------------------------------------------------------------------- -------------------------------------------------- U.S. Gulf Coast Crude Oil Charge Input (MB/D) 529 681 730 737 670 744 744 Total Charge Input (MB/D) 587 777 822 812 750 823 823 Crude Oil Capacity Utilization (%) 72% 93% 100% 101% 91% 102% 102% Clean Product Yield (%) 74% 81% 83% 80% 80% 81% 81% - ------------------------------------------------------------------------------- -------------------------------------------------- Western U.S. Crude Oil Charge Input (MB/D) 386 419 420 397 406 333 333 Total Charge Input (MB/D) 419 443 446 426 433 375 375 Crude Oil Capacity Utilization (%) 94% 101% 102% 96% 98% 81% 81% Clean Product Yield (%) 79% 81% 80% 79% 80% 79% 79% - ------------------------------------------------------------------------------- -------------------------------------------------- Central U.S. - Consolidated Crude Oil Charge Input (MB/D) 571 619 600 583 593 185 185 Total Charge Input (MB/D) 613 663 638 621 634 188 188 Crude Oil Capacity Utilization (%) 89% 97% 94% 91% 93% 99% 99% Clean Product Yield (%) 84% 86% 85% 85% 85% 88% 88% - ------------------------------------------------------------------------------- -------------------------------------------------- Central U.S. - Equity Affiliates - Net Share** Crude Oil Charge Input (MB/D) - - - - - 265 265 Total Charge Input (MB/D) - - - - - 288 288 Crude Oil Capacity Utilization (%) - - - - - 96% 96% Clean Product Yield (%) - - - - - 82% 82% - ------------------------------------------------------------------------------- -------------------------------------------------- TOTAL UNITED STATES Crude Oil Charge Input (MB/D) 1,840 2,000 2,127 2,128 2,025 1,938 1,938 Total Charge Input (MB/D) 1,978 2,192 2,324 2,316 2,203 2,134 2,134 Crude Oil Capacity Utilization (%) 83% 91% 96% 96% 92% 95% 95% Clean Product Yield (%) 81% 83% 84% 83% 83% 83% 83% - ------------------------------------------------------------------------------- -------------------------------------------------- Refined Products Production (MB/D) Gasoline 890 1,031 1,084 1,061 1,017 962 962 Distillates 684 764 821 824 774 762 762 Other 414 403 429 440 422 428 428 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 1,988 2,198 2,334 2,325 2,213 2,152 2,152 =============================================================================== ================================================== Petroleum Products Sales (MB/D) Gasoline 1,258 1,300 1,369 1,416 1,336 1,258 1,258 Distillates 813 820 848 921 850 862 862 Other 517 555 519 535 531 480 480 - ---------------------------------------------------------------------------------------------------------------------------------- Total 2,588 2,675 2,736 2,872 2,717 2,600 2,600 ================================================================================================================================== * Represents marketing sales price less product costs for all distribution channels other than commercial product supply. ** Represents a 50 percent and 85 percent interest in the Wood River and Borger refineries, respectively. These refineries were contributed to a business venture with EnCana, effective January 1, 2007. Page 9 of 12
R&M (continued) 2006 2007 ------------------------------------------------- -------------------------------------------------- 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) 357 505 474 461 450 503 503 Total Charge Input (MB/D) 369 550 503 494 479 532 532 Crude Oil Capacity Utilization (%) 94% 92% 86% 83% 88% 91% 91% Clean Product Yield (%) 71% 64% 69% 72% 69% 68% 68% - ------------------------------------------------------------------------------- -------------------------------------------------- International - Equity Affiliates - Net Share** Crude Oil Charge Input (MB/D) 133 144 143 144 141 120 120 Total Charge Input (MB/D) 137 149 149 147 145 121 121 Crude Oil Capacity Utilization (%) 94% 102% 102% 102% 100% 83% 83% Clean Product Yield (%) 82% 82% 81% 80% 81% 77% 77% - ------------------------------------------------------------------------------- -------------------------------------------------- TOTAL INTERNATIONAL Crude Oil Charge Input (MB/D) 490 649 617 605 591 623 623 Total Charge Input (MB/D) 506 699 652 641 624 653 653 Crude Oil Capacity Utilization (%) 94% 94% 89% 87% 91% 90% 90% Clean Product Yield (%) 74% 68% 72% 74% 72% 70% 70% - ------------------------------------------------------------------------------- -------------------------------------------------- Refined Products Production (MB/D) Gasoline 142 165 165 172 161 160 160 Distillates 228 297 288 291 276 289 289 Other 130 233 190 170 181 195 195 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 500 695 643 633 618 644 644 =============================================================================== ================================================== Petroleum Products Sales (MB/D) Gasoline 197 225 204 186 203 176 176 Distillates 339 397 374 399 377 381 381 Other 159 249 171 135 179 156 156 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 695 871 749 720 759 713 713 =============================================================================== ================================================== Worldwide - Including Net Share of Equity Affiliates Crude Oil Charge Input (MB/D) 2,330 2,649 2,744 2,733 2,616 2,561 2,561 Total Charge Input (MB/D) 2,484 2,891 2,976 2,957 2,827 2,787 2,787 Crude Oil Capacity Utilization (%) 85% 91% 95% 94% 92% 94% 94% Clean Product Yield (%) 79% 80% 81% 81% 80% 80% 80% - ------------------------------------------------------------------------------- -------------------------------------------------- Refined Products Production (MB/D) Gasoline 1,032 1,196 1,249 1,233 1,178 1,122 1,122 Distillates 912 1,061 1,109 1,115 1,050 1,051 1,051 Other 544 636 619 610 603 623 623 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 2,488 2,893 2,977 2,958 2,831 2,796 2,796 =============================================================================== ================================================== Petroleum Products Sales (MB/D) Gasoline 1,455 1,525 1,573 1,602 1,539 1,434 1,434 Distillates 1,152 1,217 1,222 1,320 1,227 1,243 1,243 Other 676 804 690 670 710 636 636 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 3,283 3,546 3,485 3,592 3,476 3,313 3,313 =============================================================================== ================================================== * 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 2006 2007 ------------------------------------------------- -------------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ------------------------------------------------- -------------------------------------------------- LUKOIL Investment Net Income ($ Millions) 249 387 487 302 1,425 256 256 =============================================================================== ================================================== Upstream Production* Net crude oil production (MB/D) 306 346 388 397 360 393 393 Net natural gas production (MMCF/D) 98 343 288 247 244 309 309 BOE Total (MBOE/D) 322 403 436 438 401 445 445 - ------------------------------------------------------------------------------- -------------------------------------------------- * Represents our estimated net share of LUKOIL's production. Industry Prices Crude Oil ($/bbl) Urals crude (CIF Mediterranean) 58.25 64.85 65.81 56.48 61.35 53.96 53.96 - ------------------------------------------------------------------------------- -------------------------------------------------- Downstream Refinery Throughput* Crude Processed (MB/D) 163 168 164 220 179 219 219 - ------------------------------------------------------------------------------- -------------------------------------------------- * Represents our estimated net share of LUKOIL's crude processed. MIDSTREAM 2006 2007 ------------------------------------------------- -------------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ------------------------------------------------- -------------------------------------------------- Midstream Net Income ($ Millions) 110 108 169 89 476 85 85 =============================================================================== ================================================== U.S. Equity Affiliate ($ Millions)* 93 91 128 73 385 50 50 - ------------------------------------------------------------------------------- -------------------------------------------------- Natural Gas Liquids Extracted (MB/D) Consolidated United States 23 22 23 21 22 15 15 International - - - - - - - Equity Affiliates United States* 178 183 180 181 181 174 174 International 6 6 7 7 6 8 8 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 207 211 210 209 209 197 197 =============================================================================== ================================================== * Represents 50 percent interest in DCP Midstream. Natural Gas Liquids Fractionated (MB/D) United States* 141 125 124 136 131 161 161 International 11 14 14 12 13 13 13 - ------------------------------------------------------------------------------- -------------------------------------------------- Total 152 139 138 148 144 174 174 =============================================================================== ================================================== * Excludes DCP Midstream Product Prices Weighted Average NGL ($/bbl)* Consolidated 37.64 41.73 44.10 37.41 40.22 37.73 37.73 DCP Midstream 37.29 41.18 43.00 36.34 39.45 36.55 36.55 - ------------------------------------------------------------------------------- -------------------------------------------------- * Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas liquids component and location mix. DD&A ($ Millions) 7 8 7 7 29 4 4 - ------------------------------------------------------------------------------- -------------------------------------------------- Page 11 of 12
CHEMICALS 2006 2007 ------------------------------------------------- -------------------------------------------------- 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD ------------------------------------------------- -------------------------------------------------- Chemicals Net Income (Loss) ($ Millions) 149 103 142 98 492 82 82 =============================================================================== ================================================== Industry Margins (Cents/Lb)* Ethylene industry cash margin 20.5 14.3 17.0 16.0 17.0 11.1 11.1 HDPE industry contract sales margin 15.9 14.0 13.9 11.9 13.9 13.5 13.5 Styrene industry contract sales margin 12.5 11.9 11.3 11.5 11.8 11.1 11.1 - ---------------------------------------------------------------------------------------------------------------------------------- * 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 2006 2007 ------------------------------------------------- -------------------------------------------------- 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 (12) 11 8 15 (1) (1) =============================================================================== ================================================== Detail of Net Income (Loss) ($ Millions) Power 31 3 26 22 82 13 13 Technology Solutions (12) (4) (3) (4) (23) (3) (3) Other (11) (11) (12) (10) (44) (11) (11) - ------------------------------------------------------------------------------- -------------------------------------------------- Total 8 (12) 11 8 15 (1) (1) =============================================================================== ================================================== CORPORATE AND OTHER 2006 2007 ------------------------------------------------- -------------------------------------------------- 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) (168) (412) (301) (306) (1,187) (341) (341) =============================================================================== ================================================== Detail of Net Income (Loss) ($ Millions) Net interest expense (93) (267) (242) (268) (870) (244) (244) Corporate overhead (26) (39) (35) (33) (133) (23) (23) Acquisition-related expenses (5) (39) (32) (22) (98) (13) (13) Other (44) (67) 8 17 (86) (61) (61) - ------------------------------------------------------------------------------- -------------------------------------------------- Total (168) (412) (301) (306) (1,187) (341) (341) =============================================================================== ================================================== Before-Tax Net Interest Expense ($ Millions) Interest expense (226) (468) (417) (434) (1,545) (395) (395) Capitalized interest 111 107 110 130 458 135 135 Interest revenue 30 35 38 2 105 31 31 Premium on early debt retirement - - - - - (17) (17) - ------------------------------------------------------------------------------- -------------------------------------------------- (85) (326) (269) (302) (982) (246) (246) =============================================================================== ================================================== Debt Total Debt ($ Millions) 32,193 29,510 27,807 27,134 27,134 23,668 23,668 Debt-to-Capital Ratio 30% 27% 25% 24% 24% 22% 22% - ------------------------------------------------------------------------------- -------------------------------------------------- Page 12 of 12
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