-----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, OQ+AxMa5upZBMGjYrxwkIeQrFrNopmbDFrVaZj6bGkTDa0/UWErqC42ah1/32D2E oca1N00LAHdi1hqJJfOIkQ== 0001047469-03-001967.txt : 20030121 0001047469-03-001967.hdr.sgml : 20030120 20030121150533 ACCESSION NUMBER: 0001047469-03-001967 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030131 FILED AS OF DATE: 20030121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNCOR ENERGY INC CENTRAL INDEX KEY: 0000311337 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 000000000 STATE OF INCORPORATION: A0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12384 FILM NUMBER: 03519462 BUSINESS ADDRESS: STREET 1: 112 4TH AVENUE SW PO BOX 38 STREET 2: CALGARY CITY: ALBERTA CANADA STATE: A0 ZIP: T2P 2V5 BUSINESS PHONE: 4032698100 MAIL ADDRESS: STREET 1: 112 FOURTH AVE SW BOX 38 STREET 2: CALGARY CITY: ALBERTA CANADA ZIP: T2P 2V5 FORMER COMPANY: FORMER CONFORMED NAME: GREAT CANADIAN OIL SANDS & SUN OIL CO LTD DATE OF NAME CHANGE: 19791129 FORMER COMPANY: FORMER CONFORMED NAME: SUNCOR INC DATE OF NAME CHANGE: 19970430 6-K 1 a2101210z6-k.txt FORM 6-K FORM 6-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the month of: January 2003 Commission File Number: 1-12384 SUNCOR ENERGY INC. (Name of registrant) 112 FOURTH AVENUE S.W. P.O. BOX 38 CALGARY, ALBERTA CANADA, T2P 2V5 Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F Form 40-F X --------- --------- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the SEC pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: Yes No X --------- --------- If "Yes" is marked, indicate the number assigned to the registrant in connection with Rule 12g3-2(b): N/A EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT - -------------------------------------------------------------------------------- 1 EARNINGS RELEASE DATED JANUARY 21, 2003 RE: 2002 FOURTH QUARTER RESULTS
EXHIBIT 1 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, thereunto duly authorized. SUNCOR ENERGY INC. Date: January 21, 2003 By: "JANICE B. ODEGAARD" ------------------------------------ JANICE B. ODEGAARD Vice President, Associate General Counsel and Corporate Secretary FOR IMMEDIATE RELEASE JANUARY 21, 2003 PRODUCTION INCREASE OF 53% BOOSTS FINANCIAL PERFORMANCE AT SUNCOR ENERGY COMPANY SETS NEW RECORDS, EXCEEDS BILLION DOLLAR MARK FOR CASH FLOW ALL FINANCIAL FIGURES ARE UNAUDITED AND IN CANADIAN DOLLARS UNLESS NOTED OTHERWISE. NATURAL GAS CONVERTS TO BARRELS OF OIL EQUIVALENT AT A 6:1 RATIO (SIX MILLION CUBIC FEET OF NATURAL GAS CONVERTS TO ONE THOUSAND BARRELS OF OIL EQUIVALENT). CALGARY, ALBERTA - Suncor Energy Inc. announced today that it boosted production by 53 per cent in 2002, a key contributor to generating record financial performance for the company. In 2002 net earnings were $761 million ($1.64 per common share), compared to the company's previous record of $388 million ($0.79 per common share) in 2001. For the first time in the company's history, cash flow provided from operations exceeded the billion dollar mark, increasing to $1.44 billion ($3.11 per common share) in 2002, compared to $831 million ($1.76 per common share) in 2001. Excluding a non-recurring gain on the sale of the company's retail natural gas marketing business, a positive future tax revaluation, and the effects of foreign currency translation on U.S. dollar denominated long-term debt and preferred securities, 2002 net earnings were $708 million ($1.52 per common share). It was Suncor's expanded oil sands operations, buoyed by rising commodity prices, which enabled record breaking financial performance. Total company production for the year averaged 239,500 barrels of oil equivalent (BOE) per day, up from the 156,600 BOE per day average recorded in 2001. Suncor's oil sands facility generated the largest part of this total, averaging 205,800 barrels per day during 2002, compared to production of 123,200 barrels per day in 2001. "We ended the year with strong operational performance. For the first time in the company's history, we exceeded the billion dollar mark for cash flow, generating record-setting financial results for our shareholders," said Rick George, president and chief executive officer. "The goal now is to carry that momentum into 2003, increasing oil sands production while reducing operating costs and positioning the company for future growth." In 2002, cash operating costs at Suncor's oil sands operation averaged $13.20 per barrel (excluding start-up costs). Suncor expects the 2003 average to be reduced to $12.50 per barrel (excluding start-up costs), which takes into account a 30-day maintenance shutdown of one of the company's two oil sands upgraders during the second quarter. "We're going to be relentless in our drive to bring down costs with a goal of exiting 2003 with cash operating costs at $10 to $11 per barrel," said George. 1 Suncor's total production plan for 2003 is about 250,000 BOE per day. This represents average production of 215,000 barrels per day from the company's oil sands operation and about 35,000 BOE per day from Suncor's natural gas business. Growth projects continue to be a focus for the company, as Suncor's Firebag In-situ Oil Sands Project and vacuum tower expansion remain on budget and on schedule. Together, these two projects are expected to increase production at Suncor's oil sands operation to an average of 260,000 barrels per day in 2005. "Suncor is going into 2003 with four key priorities. In the next twelve months we will focus on reducing costs and increasing production from our existing oil sands assets, while continuing to build the foundation for the next stages of our oil sands growth strategy," said George. "At the same time, we plan to continue to direct part of our cash flow to reducing Suncor's net debt." In 2002, the company paid down more than $450 million of its net debt. As of December 31, 2002 the company's net debt was $2.7 billion. Suncor is targetting to reduce that to $2.4 billion by the end of 2003. FOURTH QUARTER, 2002 Net earnings for the fourth quarter of 2002 were $258 million ($0.56 per common share), compared to $26 million ($0.04 per common share) in the fourth quarter of 2001. Suncor's cash flow provided from operations for the fourth quarter was $460 million ($1.00 per common share), compared with $133 million ($0.27 per common share) during the same period last year. Excluding the effects of foreign currency translation on the company's U.S. dollar denominated long-term debt and preferred securities, 2002 fourth quarter net earnings were $256 million ($0.55 per common share). Suncor's production for the fourth quarter of 2002 averaged 261,800 BOE per day, compared with 186,700 BOE per day during the same period in 2001. The higher production numbers reflect increased capacity at Suncor's oil sands business where fourth quarter production exceeded design capacity, averaging 227,600 barrels per day, up from the 153,000 barrels per day the operation generated during the fourth quarter of 2001. A planned nine-day maintenance shutdown on one of two sets of hydrotreaters in November did not impact total production, but did reduce the proportion of higher value sweet crude in Suncor's sales mix for the quarter. In the fourth quarter, Suncor realized after-tax crude oil and foreign exchange hedging losses of approximately $55 million. For 2002, hedging losses were $160 million after-tax, compared to $148 million in 2001.
- ------------------------------------------------------------------------------------------------------------------------ Oil Sands Cash Operating Costs (dollars per sales barrel) - ------------------------------------------------------------------------------------------------------------------------ Year ended Year ended Three months ended, Three months ended, December 31, 2002 December 31, 2001 December 31, 2002 December 31, 2001 - ------------------------------------------------------------------------------------------------------------------------ Cash operating costs 13.20 11.90 12.45 9.35 - ------------------------------------------------------------------------------------------------------------------------ Project start-up costs 0.05 5.10 0.05 8.10 - ------------------------------------------------------------------------------------------------------------------------ Total cash operating costs 13.25 17.00 12.50 17.45 - ------------------------------------------------------------------------------------------------------------------------ Non cash operating costs 3.90 2.60 4.05 1.95 - ------------------------------------------------------------------------------------------------------------------------ Total operating costs 17.15 19.60 16.55 19.40 - ------------------------------------------------------------------------------------------------------------------------
2 OUTLOOK FOR THE FIRST QUARTER AND FULL-YEAR, 2003 Suncor's outlook for the first quarter of 2003 and full year provides disclosure to investors and potential investors of expected outcomes and ensures they receive access to the same information at the same time. An update to this outlook will be provided shortly after the end of the first quarter when a Guidance Report is issued. Suncor's financial results for the first quarter will be finalized and publicly released on April 24, 2003.
- -------------------------------------------------------------------------------------------------------------------- Q1 2003 OUTLOOK 2003 FULL YEAR OUTLOOK - -------------------------------------------------------------------------------------------------------------------- OIL SANDS Production (bpd) 220,000 to 225,000 215,000* Sales total (bpd) 220,000 to 225,000 215,000 / / Light sweet 51% 51% / / Diesel 11% 11% / / Light sour / bitumen 38% 38% Realization on crude sales basket WTI @ Cushing less CDN$4.00 to WTI @ Cushing less CDN$4.00 to $4.50 per barrel $4.50 per barrel Cash operating costs $13.25 to $13.75 per barrel $12.50 per barrel (excluding project start-up costs) - -------------------------------------------------------------------------------------------------------------------- NATURAL GAS Natural gas (mmcf per day) 180 to 185 185 to 190 Natural gas liquids (bpd) 1,900 2,000 Crude oil (bpd) 1,300 1,300 Annual production (BOE/day) 35,000 - -------------------------------------------------------------------------------------------------------------------- * Production at Suncor's oil sands operation will be lower than capacity as a result of a 30-day maintenance shutdown, scheduled to start April 28. The maintenance work, done every four to five years, will result in the shutdown of one of the company's two oil sands upgraders. Production at the oil sands operation is expected to average 110,000 barrels per day during the maintenance period. - --------------------------------------------------------------------------------------------------------------------
Factors that could potentially impact the first quarter, 2003 include: / / Suncor's future financial performance is closely linked to oil and natural gas prices and exchange factors. Volatility may impact results. The volatility in natural gas prices can also impact the costs of Suncor's Oil Sands and Energy Marketing and Refining segments. / / Extreme cold weather, which can have an impact on oil sands mining, upgrading and transportation of products, is possible in the first quarter. / / Refining margins are currently between 5.3 cents per litre (cpl) and 5.5 cpl, compared to 6.6 cpl in the fourth quarter of 2002. Retail margins are currently between 7.0 cpl and 7.2 cpl, compared to 6.5 cpl in the fourth quarter of 2002. / / The realization on the crude sales basket can be impacted by Suncor's sales mix as well as general market conditions, which can impact differentials. 3 Suncor Energy is an integrated Canadian energy company. Suncor's oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets custom-blended refinery feedstock and diesel fuel. Suncor is also a conventional natural gas producer in Western Canada, and operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. As Suncor meets today's energy needs, the company invests in renewable energy for the future. Suncor's common shares (symbol: SU) and preferred securities are listed on the Toronto and New York stock exchanges. LEGAL NOTICE - FORWARD-LOOKING INFORMATION THIS NEWS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT ARE BASED ON SUNCOR'S CURRENT EXPECTATIONS, ESTIMATES, PROJECTIONS AND ASSUMPTIONS MADE IN LIGHT OF ITS EXPERIENCE AND ITS PERCEPTION OF HISTORICAL TRENDS. THE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE HEREOF, AND SUNCOR UNDERTAKES NO DUTY TO UPDATE THESE STATEMENTS TO REFLECT SUBSEQUENT CHANGES IN ASSUMPTIONS (OR THE TRENDS OR FACTORS UNDERLYING THEM) OR ACTUAL EVENTS OR EXPERIENCE. ALL STATEMENTS THAT ADDRESS EXPECTATIONS OR PROJECTIONS ABOUT THE FUTURE, INCLUDING STATEMENTS ABOUT SUNCOR'S STRATEGY FOR GROWTH, EXPECTED AND FUTURE PRODUCTION VOLUMES, OPERATING AND FINANCIAL RESULTS, ARE FORWARD-LOOKING STATEMENTS. SOME OF THE FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY WORDS LIKE "GOAL," EXPECTS," AND SIMILAR EXPRESSIONS. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AS THEY ARE BASED ON CURRENT FACTS AND ASSUMPTIONS AND INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES, SOME THAT ARE SIMILAR TO OTHER OIL AND GAS COMPANIES AND SOME THAT ARE UNIQUE TO SUNCOR. SUNCOR'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY ITS FORWARD-LOOKING STATEMENTS AS A RESULT OF KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS, SUCH AS CHANGES IN THE GENERAL ECONOMIC, MARKET AND BUSINESS CONDITIONS; FLUCTUATIONS IN SUPPLY AND DEMAND FOR SUNCOR'S PRODUCTS; FLUCTUATIONS IN COMMODITY PRICES; FLUCTUATIONS IN CURRENCY EXCHANGE RATES; SUNCOR'S ABILITY TO RESPOND TO CHANGING MARKETS AND ACCESS THE CAPITAL MARKETS; THE ABILITY OF SUNCOR TO RECEIVE TIMELY REGULATORY APPROVALS; THE SUCCESSFUL AND TIMELY IMPLEMENTATION OF ITS GROWTH PROJECTS INCLUDING THE FIREBAG IN-SITU OIL SANDS PROJECT AND VOYAGEUR; THE INTEGRITY AND RELIABILITY OF SUNCOR'S CAPITAL ASSETS; THE CUMULATIVE IMPACT OF OTHER RESOURCE DEVELOPMENT PROJECTS; SUNCOR'S ABILITY TO COMPLY WITH CURRENT AND FUTURE ENVIRONMENTAL LAWS; THE ACCURACY OF SUNCOR'S PRODUCTION ESTIMATES AND PRODUCTION LEVELS AND ITS SUCCESS AT EXPLORATION AND DEVELOPMENT DRILLING AND RELATED ACTIVITIES; THE MAINTENANCE OF SATISFACTORY RELATIONSHIPS WITH UNIONS, EMPLOYEE ASSOCIATIONS, JOINT VENTURERS, SUPPLIERS AND CUSTOMERS; COMPETITIVE ACTIONS OF OTHER COMPANIES, INCLUDING INCREASED COMPETITION FROM OTHER OIL AND GAS COMPANIES OR FROM COMPANIES WHICH PROVIDE ALTERNATIVE SOURCES OF ENERGY; THE UNCERTAINTIES RESULTING FROM POTENTIAL DELAYS OR CHANGES IN PLANS WITH RESPECT TO EXPLORATION OR DEVELOPMENT PROJECTS OR CAPITAL EXPENDITURES; ACTIONS BY GOVERNMENTAL AUTHORITIES INCLUDING INCREASING TAXES, CHANGES IN ENVIRONMENTAL AND OTHER REGULATIONS; THE ABILITY AND WILLINGNESS OF PARTIES WITH WHOM SUNCOR HAS MATERIAL RELATIONSHIPS TO PERFORM THEIR OBLIGATIONS TO SUNCOR; AND THE OCCURRENCE OF UNEXPECTED EVENTS SUCH AS FIRES, BLOWOUTS, FREEZE-UPS, EQUIPMENT FAILURES AND OTHER SIMILAR EVENTS AFFECTING SUNCOR OR OTHER PARTIES WHOSE OPERATIONS OR ASSETS DIRECTLY OR INDIRECTLY AFFECT SUNCOR. SEE SUNCOR'S CURRENT ANNUAL INFORMATION FORM, ANNUAL REPORT AND QUARTERLY REPORTS TO SHAREHOLDERS AND OTHER DOCUMENTS SUNCOR FILES WITH SECURITIES REGULATORY AUTHORITIES, FOR FURTHER DETAILS. - 30 - Media & Investor Inquiries: John Rogers, vice president, Investor Relations (403) 269-8670 Fourth quarter financial statements (unaudited) can be obtained at www.suncor.com or by calling (403) 205-6963. 4 SUNCOR ENERGY INC. CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
- ------------------------------------------------------------------------------------------------------------- Fourth quarter Years ended December 31 - ------------------------------------------------------------------------------------------------------------- ($ millions) 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------- REVENUES (note 8) 1 368 905 4 904 4 199 - ------------------------------------------------------------------------------------------------------------- EXPENSES Purchases of crude oil and products 310 313 1 298 1 595 Operating, selling and general 335 274 1 292 1 012 Depreciation, depletion and amortization 162 101 585 360 Exploration 11 15 26 22 Royalties 28 15 98 134 Taxes other than income taxes 99 93 374 367 (Gain) on disposal of assets (1) (9) (2) (7) (Gain) on sale of retail natural gas marketing business (note 9) (1) - (38) - Project start-up costs 1 76 3 141 Write-off of oil shale assets - - - 48 Restructuring - - - (2) Financing expenses (notes 2 and 3) 28 2 124 16 - ------------------------------------------------------------------------------------------------------------- 972 880 3 760 3 686 - ------------------------------------------------------------------------------------------------------------- EARNINGS BEFORE INCOME TAXES 396 25 1 144 513 - ------------------------------------------------------------------------------------------------------------- PROVISION FOR INCOME TAXES Current 39 (12) 74 4 Future (notes 2 and 6) 99 11 309 121 - ------------------------------------------------------------------------------------------------------------- 138 (1) 383 125 - ------------------------------------------------------------------------------------------------------------- NET EARNINGS 258 26 761 388 Dividends on preferred securities, net of tax (7) (5) (28) (26) Revaluation of US$ preferred securities, net of tax (note 2) - (1) 1 (11) - ------------------------------------------------------------------------------------------------------------- Net earnings attributable to common shareholders (note 2) 251 20 734 351 - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- PER COMMON SHARE (dollars) Net earnings attributable to common shareholders (notes 2 and 5) - basic 0.56 0.04 1.64 0.79 - ------------------------------------------------------------------------------------------------------------- - diluted 0.55 0.04 1.61 0.78 - ------------------------------------------------------------------------------------------------------------- Cash dividends 0.0425 0.0425 0.17 0.17 - -------------------------------------------------------------------------------------------------------------
See accompanying notes. SUNCOR ENERGY INC. CONSOLIDATED BALANCE SHEETS (unaudited)
- --------------------------------------------------------------------------------------------------------------------------- DECEMBER 31 December 31 ($ millions) 2002 2001 - --------------------------------------------------------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents 15 1 Accounts receivable 403 306 Inventories 266 258 Income taxes recoverable - 28 Future income taxes 38 29 - --------------------------------------------------------------------------------------------------------------------------- Total current assets 722 622 Property, plant and equipment, net 7 641 7 141 Deferred charges and other 185 199 Future income taxes 135 132 - --------------------------------------------------------------------------------------------------------------------------- Total assets 8 683 8 094 - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term debt - 31 Accounts payable and accrued liabilities 716 672 Income taxes payable 34 - Taxes other than income taxes 37 42 Future income taxes 10 28 - --------------------------------------------------------------------------------------------------------------------------- Total current liabilities 797 773 Long-term debt (note 4) 2 686 3 113 Accrued liabilities and other 226 251 Future income taxes (note 2) 1 516 1 177 Shareholders' equity (see below) 3 458 2 780 - --------------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity 8 683 8 094 - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY NUMBER Number - --------------------------------------------------------------------------------------------------------------------------- Preferred securities (note 2) 17 540 000 523 17 540 000 525 Share capital 448 971 453 578 445 956 490 555 Retained earnings (note 2) 2 357 1 700 - --------------------------------------------------------------------------------------------------------------------------- 3 458 2 780 - --------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------
See accompanying notes. SUNCOR ENERGY INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
- ---------------------------------------------------------------------------------------------------------------------------- Fourth quarter Years ended December 31 - ---------------------------------------------------------------------------------------------------------------------------- ($ millions) 2002 2001 2002 2001 - ---------------------------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Cash flow provided from operations 460 133 1 440 831 Decrease (increase) in operating working capital Accounts receivable (43) 42 (97) 101 Inventories - (19) (8) (66) Accounts payable and accrued liabilities 184 33 44 (37) Taxes payable 34 (1) 77 (17) - ---------------------------------------------------------------------------------------------------------------------------- Cash provided from operating activities 635 188 1 456 812 - ---------------------------------------------------------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES (298) (400) (861) (1 680) - ---------------------------------------------------------------------------------------------------------------------------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES 337 (212) 595 (868) - ---------------------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Increase (decrease) in short-term debt - 9 (31) (33) Proceeds from issuance of long-term debt (note 4) - - 797 500 Net increase (decrease) in other long-term debt (295) 231 (1 245) 486 Issuance of common shares under stock option plan 3 1 19 15 Dividends paid on preferred securities (12) (12) (48) (48) Dividends paid on common shares (19) (17) (73) (72) - ---------------------------------------------------------------------------------------------------------------------------- Cash provided from (used in) financing activities (323) 212 (581) 848 - ---------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 14 - 14 (20) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1 1 1 21 - ---------------------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD 15 1 15 1 - ---------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------
See accompanying notes. SUNCOR ENERGY INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
- ------------------------------------------------------------------------------------------------------------------------ Preferred Share Retained ($ millions) Securities Capital Earnings - ------------------------------------------------------------------------------------------------------------------------ AT DECEMBER 31, 2000, AS PREVIOUSLY REPORTED 514 537 1 421 Retroactive adjustment for change in accounting policy, net of tax (note 2) (4) - 3 - ------------------------------------------------------------------------------------------------------------------------ AT DECEMBER 31, 2000, AS RESTATED 510 537 1 424 Net earnings - - 388 Dividends paid on preferred securities, net of tax - - (26) Dividends paid on common shares - - (72) Issued for cash under stock option plan - 15 - Issued under dividend reinvestment plan - 3 (3) Revaluation of US$ preferred securities (note 2) 15 - (11) - ------------------------------------------------------------------------------------------------------------------------ AT DECEMBER 31, 2001, AS RESTATED 525 555 1 700 Net earnings - - 761 Dividends paid on preferred securities, net of tax - - (28) Dividends paid on common shares - - (73) Issued for cash under stock option plan - 19 - Issued under dividend reinvestment plan - 4 (4) Revaluation of US$ preferred securities (note 2) (2) - 1 - ------------------------------------------------------------------------------------------------------------------------ AT DECEMBER 31, 2002 523 578 2 357 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------
See accompanying notes. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. ACCOUNTING POLICIES These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual financial statements, with the exception of the change in accounting with respect to the translation of Foreign Currency discussed in note 2. 2. CHANGE IN ACCOUNTING POLICY Effective January 1, 2002, the company retroactively adopted the new Canadian accounting standard for Foreign Currency Translation, and as a result, all prior periods have been restated. This new standard applies to the company's foreign-currency denominated preferred securities and long-term debt (see note 4). The impact of this new standard on the consolidated balance sheets and statements of earnings is as follows: CHANGE IN CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------------------------------------- December 31 ($ millions, increase/(decrease)) 2002 2001 - ------------------------------------------------------------------------------------------------------------------------- Future income taxes - long-term liabilities 3 (4) Preferred securities (2) 15 Retained earnings 9 (11) - -------------------------------------------------------------------------------------------------------------------------
CHANGE IN CONSOLIDATED STATEMENTS OF EARNINGS
- ------------------------------------------------------------------------------------------------------------------------ fourth quarter years ended Dec 31 - ------------------------------------------------------------------------------------------------------------------------ ($ millions, increase/(decrease)) 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------------ Financing expenses (3) - (10) - Future income taxes 1 - 2 - Net earnings 2 - 8 - Revaluation of US$ preferred securities, net of tax - (1) 1 (11) Net earnings attributable to common shareholders 2 (1) 9 (11) Per common share - basic and diluted (dollars) - - $0.02 $(0.02) - ------------------------------------------------------------------------------------------------------------------------
3. FINANCING EXPENSES
- ------------------------------------------------------------------------------------------------------------------------ fourth quarter years ended Dec 31 - ------------------------------------------------------------------------------------------------------------------------ ($ millions) 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------------ Interest on debt 37 36 155 143 Capitalized interest (7) (33) (22) (125) - ------------------------------------------------------------------------------------------------------------------------ Net interest expense 30 3 133 18 Foreign exchange (gain) on long-term debt and other (2) (1) (9) (2) - ------------------------------------------------------------------------------------------------------------------------ Total financing expenses 28 2 124 16 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------
4. ISSUANCE OF 7.15% NOTES On January 29, 2002, the company issued 7.15% Notes with a principal amount of $US500 million (CDN$ equivalent of $790 million at December 31, 2002). These notes bear interest, payable semi-annually, and mature on February 1, 2032. The net proceeds received were used to repay commercial paper and bank borrowings. 5. RECONCILIATION OF BASIC AND DILUTED EARNINGS PER COMMON SHARE
- --------------------------------------------------------------------------------------------------------------------------------- fourth quarter years ended Dec 31 - --------------------------------------------------------------------------------------------------------------------------------- ($ millions) 2002 2001 2002 2001 - --------------------------------------------------------------------------------------------------------------------------------- Net earnings attributable to common shareholders 251 20 734 351 Dividends on preferred securities, net of tax 7 -(a) 28 -(a) Revaluation of US$ preferred securities, net of tax - -(a) (1) -(a) - --------------------------------------------------------------------------------------------------------------------------------- Net earnings before deducting dividends on preferred securities and before revaluation of US$ preferred securities 258 20 761 351 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- (millions of common shares) Weighted-average number of common shares 449 446 448 445 Dilutive securities Options/shares issued under long term incentive plans 5 6 5 6 Redemption of preferred securities by the issuance of common shares 19 -(a) 20 -(a) - --------------------------------------------------------------------------------------------------------------------------------- Weighted-average number of diluted common shares 473 452 473 451 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- (dollars per common share) Basic earnings per share (b) 0.56 0.04 1.64 0.79 Diluted earnings per share 0.55(c) 0.04(a) 1.61(c) 0.78(a) - --------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------
Common share and earnings per common share amounts in the above table reflect a two-for-one share split effective May 15, 2002. (a) For the fourth quarter and year ended December 31, 2001, diluted earnings per share is the net earnings attributable to common shareholders divided by the weighted-average number of diluted common shares. Dividends on preferred securities, the revaluation of US$ preferred securities and the redemption of preferred securities by the issuance of common shares have an anti-dilutive impact, therefore they are not included in the calculation of diluted earnings per share. (b) Basic earnings per share is the net earnings attributable to common shareholders divided by the weighted-average number of common shares. (c) Diluted earnings per share is the net earnings before deducting dividends on preferred securities and revaluation of US$ preferred securities, divided by the weighted-average number of diluted common shares. 6. INCOME TAXES During 2002, the Alberta government enacted legislation that resulted in a decrease of 0.5% in the Alberta corporate income tax rate. This reduction, combined with a deferral in the Ontario corporate income tax rate reduction, required revaluation of the future tax balances for the company resulting in an aggregate future income tax recovery of $10 million. (In 2001, Alberta and Ontario rate changes resulted in an aggregate future income tax recovery of $43 million). The new rates are reflected in the tax provision for the current year. The income tax rate changes did not affect the company's current cash flow or liquidity. 7. STOCK-BASED COMPENSATION - -------------------------------------------------------------------------------- A STOCK OPTION GIVES THE HOLDER THE RIGHT, BUT NOT THE OBLIGATION, TO PURCHASE COMMON SHARES AT A PREDETERMINED PRICE OVER A SPECIFIED PERIOD OF TIME. AFTER THE DATE OF GRANT, EMPLOYEES THAT HOLD OPTIONS MUST EARN THE RIGHTS TO EXERCISE THEM. THIS IS DONE BY THE EMPLOYEE FULFILLING A TIME REQUIREMENT FOR SERVICE TO THE COMPANY, AND WITH RESPECT TO CERTAIN OPTIONS, IS SUBJECT TO ACCELERATED VESTING SHOULD THE COMPANY MEET PREDETERMINED PERFORMANCE CRITERIA. ONCE THIS RIGHT HAS BEEN EARNED, THESE OPTIONS ARE CONSIDERED VESTED. OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS VEST AND ARE EXERCISABLE IMMEDIATELY. THE PREDETERMINED PRICE AT WHICH AN OPTION CAN BE EXERCISED IS EQUAL TO OR GREATER THAN THE MARKET PRICE OF THE COMMON SHARES ON THE DATE THE OPTIONS ARE GRANTED. SEE BELOW FOR MORE TECHNICAL DETAILS AND NUMBERS ON THE COMPANY'S STOCK OPTION PLANS: - -------------------------------------------------------------------------------- On April 30, 2002, the company granted 8,334,240 options to all eligible permanent full-time and part-time employees, both executive and non-executive, under its new employee stock option incentive plan ("SunShare"). Under SunShare, meeting specified performance targets may accelerate the vesting of some or all options, such that 20% of outstanding options may vest as early as 2004, up to an additional 20% of outstanding options may vest as early as 2005 and the remaining 60% of outstanding options may vest on April 30, 2008. All unvested options which have not previously expired or been cancelled will automatically vest on January 1, 2012. During 2002, in addition to the initial grant, 603,752 SunShare options were granted to new employees, of which 262,262 were granted in the fourth quarter. Under the company's other plans, 3,450 options were granted in the fourth quarter of 2002 (1,805,450 options were granted during the year ended December 31, 2002). In 2001, 2,500 options were granted in the fourth quarter (2,180,720 options were granted during the year ended December 31, 2001). The fair values of all common share options granted during the period are estimated as at the grant date using the Black-Scholes option-pricing model. The weighted-average fair values of the options granted during the year and the weighted-average assumptions used in their determination are as noted below:
- ------------------------------------------------------------------------------------------------------------------------------ fourth quarter years ended Dec 31 - ------------------------------------------------------------------------------------------------------------------------------ 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------ Weighted-average fair value per option $12.43 $6.79 $12.08 $6.41 Annual dividend per share $0.17 $0.17 $0.17 $0.17 Risk-free interest rate 4.85% 4.41% 5.39% 5.07% Expected life 8 YEARS 5 years 8 YEARS 5 years Expected volatility 32% 30% 31% 35% - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------
The company does not recognize any compensation expense related to stock options granted to employees and non-employee directors. Had compensation expense been determined based on the fair values at the grant dates, the cost of which is recognized over the estimated vesting periods of the options granted, the company's net earnings and earnings per share would have been reduced to the amounts below:
- ------------------------------------------------------------------------------------------------------------------------------ fourth quarter years ended Dec 31 - ------------------------------------------------------------------------------------------------------------------------------ ($ millions, except per share amounts) 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------ Compensation expense 6 - 32 9 Net earnings attributable to common shareholders As reported 251 20 734 351 Pro forma 245 20 702 342 Basic earnings per share As reported 0.56 0.04 1.64 0.79 Pro forma 0.55 0.04 1.57 0.77 Diluted earnings per share As reported 0.55 0.04 1.61 0.78 Pro forma 0.54 0.04 1.54 0.76
All option amounts stated above have been adjusted as appropriate to reflect the May 15, 2002 two-for-one share split. 8. SUPPLEMENTAL INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------ fourth quarter years ended Dec 31 - ------------------------------------------------------------------------------------------------------------------------------ ($ millions) 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------ Interest paid 11 18 134 129 Income taxes paid (refunded) (3) - (8) 23 - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------
CRUDE OIL HEDGES AT DECEMBER 31, 2002
- ------------------------------------------------------------------------------------------------------------------------------ QUANTITY PRICE - US$ PRICE - CDN$* (BBL/DAY) (WTI) - ------------------------------------------------------------------------------------------------------------------------------ 2002 Crude oil swaps 57 000 $20.42 $32.26 Costless collars 10 000 $21.00 - $26.19 $33.17 - $41.37 Costless collars 12 000 $22.00 - $26.28 $34.75 - $41.51 Costless collars 18 000 $23.00 - $27.59 $36.33 - $43.58 Costless collars 3 000 $23.50 - $28.15 $37.12 - $44.47 2003 Crude oil swaps ** 10 000 $30.10 $47.55 Crude oil swaps 15 000 $24.46 $38.64 Costless collars 44 000 $21.00 - $25.74 $33.17 - $40.66 Costless collars 16 000 $22.00 - $25.07 $34.75 - $39.60 2004 Crude oil swaps 25 000 $22.85 $36.09 Costless collars 11 000 $21.00 - $23.65 $33.17 - $37.36 2005 Crude oil swaps 21 000 $21.85 $34.51 - ------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------
During 2002, the company had in place U.S. dollar swaps in the amount of US$314 million, at an exchange rate of CDN$/US$ of $0.705. MARGIN HEDGES AT DECEMBER 31, 2002
- -------------------------------------------------------------------------------------------------------------------- QUANTITY AVERAGE MARGIN AVERAGE MARGIN (BBL/DAY) US$/BBL CDN$/BBL* - -------------------------------------------------------------------------------------------------------------------- Refined product sale and crude purchase swaps*** 20 700 $4.61 $7.28 - -------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------
* Translated to CDN$ at the year-end exchange rate of 1.5796. ** For the period January to April, 2003 inclusive. All other crude oil positions are for the full year. *** For the period January and February 2003. 9. SALE OF THE RETAIL NATURAL GAS MARKETING BUSINESS Effective May 2, 2002, the company sold its retail natural gas marketing business in the Energy Marketing and Refining segment for proceeds of $62 million, net of related closing costs and adjustments of $4 million. The pre-tax earnings impact of the sale was $38 million ($35 million after-tax). Proceeds from the sale decreased cash used in investing activities. 10. GOODWILL Effective January 1, 2002, the company adopted the new Canadian accounting standard for Goodwill and Other Intangible Assets. Accordingly, goodwill is no longer amortized to earnings but periodically tested for impairment. As at December 31, 2002, the annual assessment of goodwill impairment has been completed and no reduction of the carrying value of $14 million was required. Excluding goodwill amortization from prior period results does not significantly impact net earnings or earnings per share. 11. COMPARATIVE FIGURES Prior period comparative figures have been reclassified to conform to the current period presentation. SUNCOR ENERGY INC. SCHEDULES OF SEGMENTED DATA (unaudited)
Fourth quarter - -------------------------------------------------------------------------------------------------------------------------------- Energy Marketing and Corporate and Oil Sands Natural Gas Refining Eliminations Total - -------------------------------------------------------------------------------------------------------------------------------- ($ millions) 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 - -------------------------------------------------------------------------------------------------------------------------------- EARNINGS REVENUES Operating revenues 679 298 61 48 626 558 1 - 1 367 904 Intersegment revenues 128 34 32 15 - - (160) (49) - - Interest - - - - - - 1 1 1 1 - -------------------------------------------------------------------------------------------------------------------------------- 807 332 93 63 626 558 (158) (48) 1 368 905 - -------------------------------------------------------------------------------------------------------------------------------- EXPENSES Purchases of crude oil and products 69 9 - - 391 355 (150) (51) 310 313 Operating, selling and general 211 115 17 18 99 98 8 43 335 274 Depreciation, depletion and amortization 127 67 20 18 14 15 1 1 162 101 Exploration 9 - 2 15 - - - - 11 15 Royalties 8 5 20 10 - - - - 28 15 Taxes other than income taxes 6 3 1 1 92 89 - - 99 93 (Gain) loss on disposal of assets 2 - (3) (9) - - - - (1) (9) (Gain) on sale of retail natural gas marketing business - - - - (1) - - - (1) - Project start-up costs 1 76 - - - - - - 1 76 Financing expenses - - - - - - 28 2 28 2 - -------------------------------------------------------------------------------------------------------------------------------- 433 275 57 53 595 557 (113) (5) 972 880 - -------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES 374 57 36 10 31 1 (45) (43) 396 25 Income taxes (128) (20) (19) 2 (12) (1) 21 20 (138) 1 - -------------------------------------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) 246 37 17 12 19 - (24) (23) 258 26 - -------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------
SUNCOR ENERGY INC. SCHEDULES OF SEGMENTED DATA (continued) (unaudited)
Fourth quarter - --------------------------------------------------------------------------------------------------------------------------------- Energy Marketing and Corporate and Oil Sands Natural Gas Refining Eliminations Total - --------------------------------------------------------------------------------------------------------------------------------- ($ millions) 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 - --------------------------------------------------------------------------------------------------------------------------------- CASH FLOW BEFORE FINANCING ACTIVITIES CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES: Cash flow provided from (used in) operations Net earnings (loss) 246 37 17 12 19 - (24) (23) 258 26 Exploration expenses Cash - - 2 8 - - - - 2 8 Dry hole costs - - - 7 - - - - - 7 Non-cash items included in earnings Depreciation, depletion and amortization 127 67 20 18 14 15 1 1 162 101 Future income taxes 123 17 18 (3) (26) 22 (16) (25) 99 11 Current income tax provision allocated to Corporate 5 4 1 1 38 (21) (44) 16 - - (Gain) loss on disposal of assets 2 - (3) (9) - - - - (1) (9) (Gain) on sale of retail natural gas marketing business - - - - (1) - - - (1) - Other (3) 4 (1) 1 2 - (4) 3 (6) 8 Overburden removal outlays (42) (8) - - - - - - (42) (8) Overburden removal outlays - Project Millenium (start-up period) - (33) - - - - - - - (33) Increase (decrease) in deferred credits and other (3) 2 (1) - 1 2 (8) 18 (11) 22 - --------------------------------------------------------------------------------------------------------------------------------- Total cash flow provided from (used in) operations 455 90 53 35 47 18 (95) (10) 460 133 Decrease (increase) in operating working capital 59 19 14 (8) 20 49 82 (5) 175 55 - --------------------------------------------------------------------------------------------------------------------------------- Total cash provided from (used in) operating activities 514 109 67 27 67 67 (13) (15) 635 188 - --------------------------------------------------------------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES: Capital and exploration expenditures (201) (313) (34) (48) (31) (28) (31) (5) (297) (394) Deferred maintenance shutdown expenditures (4) (1) - - - (9) - - (4) (10) Deferred outlays and other investments - - - - (1) (9) (1) (1) (2) (10) Proceeds from disposals - - 4 13 1 1 - - 5 14 - --------------------------------------------------------------------------------------------------------------------------------- Total cash used in investing activities (205) (314) (30) (35) (31) (45) (32) (6) (298) (400) - --------------------------------------------------------------------------------------------------------------------------------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES 309 (205) 37 (8) 36 22 (45) (21) 337 (212) - --------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------
SUNCOR ENERGY INC. SCHEDULES OF SEGMENTED DATA (continued) (unaudited)
Years ended Dec 31 - -------------------------------------------------------------------------------------------------------------------------------- Energy Marketing and Corporate and Oil Sands Natural Gas Refining Eliminations Total - -------------------------------------------------------------------------------------------------------------------------------- ($ millions) 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 - -------------------------------------------------------------------------------------------------------------------------------- EARNINGS REVENUES Operating revenues 2 284 1 227 255 382 2 361 2 585 2 - 4 902 4 194 Intersegment revenues 375 158 60 76 - 3 (435) (237) - - Interest - - - - - - 2 5 2 5 - -------------------------------------------------------------------------------------------------------------------------------- 2 659 1 385 315 458 2 361 2 588 (431) (232) 4 904 4 199 - -------------------------------------------------------------------------------------------------------------------------------- EXPENSES Purchases of crude oil and products 149 99 16 9 1 564 1 721 (431) (234) 1 298 1 595 Operating, selling and general 806 481 69 64 352 350 65 117 1 292 1 012 Depreciation, depletion and amortization 450 233 75 70 58 56 2 1 585 360 Exploration 9 - 17 22 - - - - 26 22 Royalties 33 30 65 104 - - - - 98 134 Taxes other than income taxes 23 12 2 3 348 351 1 1 374 367 (Gain) loss on disposal of assets 2 1 (4) (8) - - - - (2) (7) (Gain) on sale of retail natural gas marketing business - - - - (38) - - - (38) - Project start-up costs 3 141 - - - - - - 3 141 Write-off of oil shale assets - - - - - - - 48 - 48 Restructuring - - - (2) - - - - - (2) Financing expenses - - - - - - 124 16 124 16 - -------------------------------------------------------------------------------------------------------------------------------- 1 475 997 240 262 2 284 2 478 (239) (51) 3 760 3 686 - -------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES 1 184 388 75 196 77 110 (192) (181) 1 144 513 Income taxes (391) (105) (40) (79) (16) (30) 64 89 (383) (125) - -------------------------------------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) 793 283 35 117 61 80 (128) (92) 761 388 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- As at December 31 TOTAL ASSETS 6 896 6 409 765 722 968 934 54 29 8 683 8 094 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- CAPITAL EMPLOYED* 4 540 1 398 449 317 491 483 154 33 5 634 2 231 - -------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------
* Excludes capitalized costs related to major projects in progress. SUNCOR ENERGY INC. SCHEDULES OF SEGMENTED DATA (continued) (unaudited)
Years ended Dec 31 - -------------------------------------------------------------------------------------------------------------------------------- Energy Marketing and Corporate and Oil Sands Natural Gas Refining Eliminations Total - -------------------------------------------------------------------------------------------------------------------------------- ($ millions) 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 - -------------------------------------------------------------------------------------------------------------------------------- CASH FLOW BEFORE FINANCING ACTIVITIES CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES: Cash flow provided from (used in) operations Net earnings (loss) 793 283 35 117 61 80 (128) (92) 761 388 Exploration expenses Cash - - 6 12 - - - - 6 12 Dry hole costs - - 11 10 - - - - 11 10 Non-cash items included in earnings Depreciation, depletion and amortization 450 233 75 70 58 56 2 1 585 360 Future income taxes 379 89 37 76 (35) 18 (72) (62) 309 121 Current income tax provision allocated to Corporate 12 17 3 3 51 12 (66) (32) - - (Gain) loss on disposal of assets 2 1 (4) (8) - - - - (2) (7) (Gain) on sale of retail natural gas marketing business - - - - (38) - - - (38) - Write-off of oil shale assets - - - - - - - 48 - 48 Restructuring - - - (3) - - - - - (3) Other 12 (5) 2 3 9 2 (3) 8 20 8 Overburden removal outlays (160) (31) - - - - - - (160) (31) Overburden removal outlays - Project Millenium (start-up period) - (88) - - - - - - - (88) Increase (decrease) in deferred credits and other (8) (13) (1) - 1 (3) (44) 29 (52) 13 - -------------------------------------------------------------------------------------------------------------------------------- Total cash flow provided from (used in) operations 1 480 486 164 280 107 165 (311) (100) 1 440 831 Decrease (increase) in operating working capital (121) (35) 22 44 (10) 17 125 (45) 16 (19) - -------------------------------------------------------------------------------------------------------------------------------- Total cash provided from (used in) operating activities 1 359 451 186 324 97 182 (186) (145) 1 456 812 - -------------------------------------------------------------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES: Capital and exploration expenditures (617) (1 479) (163) (132) (60) (54) (37) (13) (877) (1 678) Deferred maintenance shutdown expenditures (9) (5) - (2) (18) (9) - - (27) (16) Deferred outlays and other investments (4) (2) - (1) (18) (9) (2) (7) (24) (19) Proceeds from disposals - 10 5 22 62 1 - - 67 33 - -------------------------------------------------------------------------------------------------------------------------------- Total cash used in investing activities (630) (1 476) (158) (113) (34) (71) (39) (20) (861) (1 680) - -------------------------------------------------------------------------------------------------------------------------------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES 729 (1 025) 28 211 63 111 (225) (165) 595 (868) - -------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------
SUNCOR ENERGY INC. HIGHLIGHTS (unaudited)
- -------------------------------------------------------------------------------------------------------------------------------- 2002 2001 - -------------------------------------------------------------------------------------------------------------------------------- CASH FLOW PROVIDED FROM OPERATIONS (4) (dollars per common share) For the years ended December 31 Cash flow provided from operations 3.22 1.87 Dividends paid on preferred securities (pre-tax) 0.11 0.11 - -------------------------------------------------------------------------------------------------------------------------------- Cash flow provided from operations after deducting dividends paid on preferred securities 3.11 1.76 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- For the quarters ended December 31 Cash flow provided from operations 1.03 0.30 Dividends paid on preferred securities (pre-tax) 0.03 0.03 - -------------------------------------------------------------------------------------------------------------------------------- Cash flow provided from operations after deducting dividends paid on preferred securities 1.00 0.27 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- RATIOS For the years ended December 31 Return on average capital employed (%) (1) 14.6 17.8 Return on average capital employed (%) (2) 13.8 7.5 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- Net debt to cash flow provided from operations (times) 1.9 3.8 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- Interest coverage on long-term debt (times) Net earnings 8.2 3.7 Cash flow provided from operations 10.6 5.9 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- As at December 31 Debt to debt plus shareholders' equity (%) 43.7 53.1 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- COMMON SHARE INFORMATION (4) As at December 31 Share price at end of trading Toronto Stock Exchange - $Canadian 24.70 26.20 New York Stock Exchange - $US 15.67 16.45 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- Book value per common share - $Canadian 7.70 6.23 - $US (3) 4.88 3.91 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- Common share options outstanding (thousands) 20 326 11 768 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- For the years ended December 31 Average number outstanding, weighted monthly (thousands) 447 794 445 030 - -------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------
(1) Capital employed - the total of shareholders' equity and debt (short-term debt and current and long-term portions of long-term debt), less capitalized costs related to major projects in progress. (2) If capital employed were to include capitalized costs related to major projects in progress, the return on average capital employed would be as stated on this line. (3) Translated to US$ at the year end exchange rate. (4) Reflects a two-for-one share split effective May 15, 2002. SUNCOR ENERGY INC. QUARTERLY OPERATING SUMMARY (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------ For the quarter ended Years ended - ------------------------------------------------------------------------------------------------------------------------------------ DEC 31 Sept 30 June 30 Mar 31 Dec 31 DEC 31 Dec 31 2002 2002 2002 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ OIL SANDS PRODUCTION (a) 227.6 207.9 207.6 179.3 153.0 205.8 123.2 SALES (a) - - light sweet crude oil 116.7 114.1 90.8 96.8 62.4 104.7 56.2 - - diesel 25.6 22.4 23.8 20.2 15.3 23.0 14.8 - - light sour crude oil 73.9 54.8 73.8 70.8 64.3 68.3 42.0 - - bitumen 12.2 15.4 8.9 0.3 4.3 9.3 8.5 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL SALES 228.4 206.7 197.3 188.1 146.3 205.3 121.5 - ------------------------------------------------------------------------------------------------------------------------------------ AVERAGE SALES PRICE (b) - - light sweet crude oil 39.02 39.80 37.07 33.55 30.22 37.56 34.17 - - other (diesel, light sour crude oil and bitumen) 31.04 30.86 30.33 25.53 20.12 29.58 24.86 - - total 35.12 35.79 33.43 29.66 24.43 33.65 29.17 - - total * 39.11 40.40 36.68 30.62 25.65 36.94 34.21 CASH OPERATING COSTS (1), (c) 12.50 12.05 12.60 16.35 17.45 13.25 17.00 TOTAL OPERATING COSTS (2), (c) 16.55 16.55 16.65 19.05 19.40 17.15 19.60 - ----------------------------------------------------------------------------------------------------- (For the period ended) CAPITAL EMPLOYED (3) (i) 4 540 4 720 4 833 4 946 1 398 (for the twelve months ended) RETURN ON AVERAGE CAPITAL EMPLOYED (3) (j) 16.8 14.6 13.4 14.2 20.1 RETURN ON AVERAGE CAPITAL EMPLOYED (4) (j) 15.6 11.8 8.7 6.9 6.4 - ----------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ NATURAL GAS GROSS PRODUCTION ** Conventional - - natural gas (d) 182 181 179 175 180 179 177 - - natural gas liquids (a) 2.4 2.3 2.5 2.5 2.4 2.4 2.4 - - crude oil (a) 1.5 1.3 1.7 1.4 1.3 1.5 1.5 - - total gross production (e) 34.2 33.8 34.0 33.0 33.7 33.7 33.4 AVERAGE SALES PRICE - - natural gas (f) 4.91 3.56 3.92 3.21 3.10 3.91 6.09 - - natural gas (f) * 4.91 3.56 3.92 3.21 3.09 3.91 6.12 - - natural gas liquids (b) 35.14 31.66 28.25 22.53 23.47 29.35 34.38 - - crude oil - conventional(b) 33.20 33.57 30.99 29.15 27.17 31.72 33.92 - - crude oil - conventional(b) * 39.37 40.30 34.82 30.50 28.60 36.24 38.14 NET WELLS DRILLED Conventional - exploratory *** 4 3 - 14 14 21 20 - development 6 2 5 9 6 22 18 - ------------------------------------------------------------------------------------------------------------------------------------ 10 5 5 23 20 43 38 - ------------------------------------------------------------------------------------------------------------------------------------ - ----------------------------------------------------------------------------------------------------- (For the period ended) CAPITAL EMPLOYED (i) 449 467 473 363 317 (for the twelve months ended) RETURN ON AVERAGE CAPITAL EMPLOYED (3) (j) 9.2 7.7 10.4 20.0 32.1 - ----------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------
SUNCOR INC. QUARTERLY OPERATING SUMMARY (continued) (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------ For the quarter ended Years ended - ------------------------------------------------------------------------------------------------------------------------------------ DEC 31 Sept 30 June 30 Mar 31 Dec 31 DEC 31 Dec 31 2002 2002 2002 2002 2001 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY MARKETING AND REFINING REFINED PRODUCT SALES (g) Transportation fuels Gasoline - retail **** 4.5 4.6 4.5 4.3 4.5 4.5 4.3 - other 5.0 4.3 4.2 4.0 4.3 4.4 4.4 Jet fuel 0.5 0.4 0.4 0.3 0.4 0.4 0.7 Diesel 3.2 2.8 3.1 2.4 2.9 2.9 3.1 - ------------------------------------------------------------------------------------------------------------------------------------ Total transportation fuel sales 13.2 12.1 12.2 11.0 12.1 12.2 12.5 Petrochemicals 0.7 0.6 0.8 0.6 0.4 0.6 0.5 Heating oils 0.6 0.1 0.4 0.7 0.4 0.4 0.4 Heavy fuel oils 0.7 0.5 0.6 0.6 0.6 0.6 0.8 Other 0.6 0.8 0.9 0.6 0.5 0.7 0.6 - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL REFINED PRODUCT SALES 15.8 14.1 14.9 13.5 14.0 14.5 14.8 - ------------------------------------------------------------------------------------------------------------------------------------ MARGINS (h) Refining (5) 6.6 4.4 3.8 4.1 3.7 4.8 5.7 Retail (6) 6.5 6.9 6.8 6.1 6.9 6.6 6.6 CRUDE OIL SUPPLY AND REFINING Processed at Suncor refinery (g) 12.0 11.1 7.8 11.3 9.2 10.6 10.2 Utilization of refining capacity (%) 108 100 70 102 83 95 92 - ------------------------------------------------------------------------------------------------------- (For the period ended) CAPITAL EMPLOYED (i) 491 503 524 502 483 (for the twelve months ended) RETURN ON AVERAGE CAPITAL EMPLOYED (3) (j) 12.5 8.3 8.6 12.6 18.4 - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------
* Excludes the impact of hedging activities. ** Currently all Natural Gas production is located in the Western Canada Sedimentary Basin. *** Excludes exploratory wells in progress. **** Excludes sales through joint venture interests. DEFINITIONS (1) Cash operating costs - operating, selling and general expenses, taxes other than income taxes and overburden cash expenditures for the period. (2) Total operating costs - cash and non-cash operating costs (total Oil Sands expenses less purchases of crude oil and products, royalties and exploration expenses and (gain)/loss on disposal of assets in Schedules of Segmented Data) (3) Capital employed - the total of shareholders' equity and debt (short-term debt and current and long-term portions of long-term debt), less capitalized costs related to major projects in progress. (4) If capital employed were to include capitalized costs related to major projects in progress, the return on average capital employed would be as stated on this line. (5) Refining margin - average wholesale unit price from all products less average unit cost of crude oil. (6) Retail margin - average street price of Sunoco branded retail gasoline net of federal excise tax and other adjustments less refining gasoline price. (a) thousands of barrels per day (d) millions of cubic feet per day (g) thousands of cubic metres per day (b) dollars per barrel (e) thousands of barrels of oil (h) cents per litre (c) dollars per barrel sold rounded equivalent per day (i) $ millions to the nearest $0.05 (f) dollars per thousand cubic feet (j) percentage
METRIC CONVERSION Crude oil, refined products, etc. 1m3 (cubic metre) = approx. 6.29 barrels -----END PRIVACY-ENHANCED MESSAGE-----