EX-1 3 j9800_ex1.htm EX-1

EXHIBIT 1

 

Interim Unaudited Financial Statements of Suncor Energy Inc. for the first fiscal
quarter ended March 31, 2003

 



 

CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)

 

 

Three months ended March 31

 

($ millions)

 

2003

 

2002

 

 

 

 

 

 

 

REVENUES (note 7)

 

1 676

 

1 078

 

EXPENSES

 

 

 

 

 

Purchases of crude oil and products

 

411

 

278

 

Energy marketing and trading activities

 

26

 

17

 

Transportation and other costs (note 7)

 

34

 

27

 

Operating, selling and general

 

366

 

343

 

Depreciation, depletion and amortization

 

155

 

133

 

Exploration

 

17

 

5

 

Royalties

 

42

 

20

 

Taxes other than income taxes

 

89

 

88

 

(Gain) on disposal of assets

 

(1

)

 

Project start-up costs

 

2

 

 

Financing expenses (note 3)

 

(22

)

31

 

 

 

1 119

 

942

 

EARNINGS BEFORE INCOME TAXES

 

557

 

136

 

Provision for income taxes

 

 

 

 

 

Current

 

21

 

11

 

Future

 

168

 

35

 

 

 

189

 

46

 

NET EARNINGS

 

368

 

90

 

Dividends on preferred securities, net of tax

 

(7

)

(7

)

Revaluation of US$ preferred securities, net of tax

 

14

 

 

Net earnings attributable to common shareholders

 

375

 

83

 

 

 

PER COMMON SHARE (dollars)

Net earnings attributable to common shareholders (note 4)

 

 

See accompanying notes.

 

2



 

CONSOLIDATED BALANCE SHEETS
(unaudited)

 

 

($ millions)

 

March 31
2003

 

December 31
2002

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

7

 

15

 

Accounts receivable

 

517

 

403

 

Inventories

 

298

 

266

 

Future income taxes

 

41

 

38

 

Total current assets

 

863

 

722

 

Property, plant and equipment, net

 

7 830

 

7 641

 

Deferred charges and other

 

171

 

185

 

Future income taxes

 

138

 

135

 

Total assets

 

9 002

 

8 683

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Short-term debt

 

4

 

 

Accounts payable and accrued liabilities

 

848

 

716

 

Income taxes payable

 

25

 

34

 

Taxes other than income taxes

 

41

 

37

 

Future income taxes

 

11

 

10

 

Total current liabilities

 

929

 

797

 

Long-term debt

 

2 332

 

2 686

 

Accrued liabilities and other

 

246

 

226

 

Future income taxes

 

1 694

 

1 516

 

Shareholders’ equity (see below)

 

3 801

 

3 458

 

Total liabilities and shareholders’ equity

 

9 002

 

8 683

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

Number

 

 

 

Number

 

 

 

Preferred securities

 

17 540 000

 

505

 

17 540 000

 

523

 

Share capital

 

449 406 496

 

583

 

448 971 543

 

578

 

Retained earnings

 

 

 

2 713

 

 

 

2 357

 

 

 

 

 

3 801

 

 

 

3 458

 

 

See accompanying notes.

 

 

3



 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

 

($ millions)

 

Three months ended March 31

 

2003

 

2002

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

Cash flow from operations

 

613

 

181

 

Decrease (increase) in operating working capital

 

 

 

 

 

Accounts receivable

 

(114

)

(89

)

Inventories

 

(32

)

6

 

Accounts payable and accrued liabilities

 

132

 

18

 

Taxes payable

 

 

10

 

Cash flow from operating activities

 

599

 

126

 

CASH USED IN INVESTING ACTIVITIES

 

(301

)

(221

)

NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES

 

298

 

(95

)

FINANCING ACTIVITIES

 

 

 

 

 

Increase (decrease) in short-term debt

 

4

 

(22

)

Proceeds from issuance of long-term debt

 

 

797

 

Net (decrease) in other long-term debt

 

(284

)

(651

)

Issuance of common shares under stock option plan

 

4

 

5

 

Dividends paid on preferred securities

 

(12

)

(12

)

Dividends paid on common shares

 

(18

)

(18

)

Cash from (used in) financing activities

 

(306

)

99

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

(8

)

4

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

15

 

1

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

7

 

5

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(unaudited)

 

($ millions)

 

Preferred
Securities

 

Share
Capital

 

Retained
Earnings

 

 

 

 

 

 

 

 

 

At December 31, 2001

 

525

 

555

 

1 700

 

Net earnings

 

 

 

90

 

Dividends paid on preferred securities, net of tax

 

 

 

(7

)

Dividends paid on common shares

 

 

 

(18

)

Issued for cash under stock option plan

 

 

5

 

 

Issued under dividend reinvestment plan

 

 

2

 

(2

)

At March 31, 2002

 

525

 

562

 

1 763

 

At December 31, 2002

 

523

 

578

 

2 357

 

Net earnings

 

 

 

368

 

Dividends paid on preferred securities, net of tax

 

 

 

(7

)

Dividends paid on common shares

 

 

 

(18

)

Issued for cash under stock option plan

 

 

4

 

 

Issued under dividend reinvestment plan

 

 

1

 

(1

)

Revaluation of US$ preferred securities

 

(18

)

 

14

 

At March 31, 2003

 

505

 

583

 

2 713

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

4



 

SCHEDULES OF SEGMENTED DATA

(unaudited)

 

 

 

 

 

 

 

 

 

Three months ended March 31

 

 

 

Oil Sands

 

Natural Gas

 

Energy Marketing and Refining

 

Corporate and Eliminations

 

Total

 

($ millions)

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

EARNINGS
Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

757

 

447

 

136

 

64

 

758

 

549

 

 

 

1 651

 

1 060

 

Energy marketing and trading activities

 

 

 

 

 

25

 

17

 

 

 

25

 

17

 

Intersegment revenues

 

108

 

72

 

7

 

11

 

 

 

(115

)

(83

)

 

 

Interest

 

 

 

 

 

 

 

 

1

 

 

1

 

 

 

865

 

519

 

143

 

75

 

783

 

566

 

(115

)

(82

)

1 676

 

1 078

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of crude oil and products

 

2

 

 

 

7

 

527

 

356

 

(118

)

(85

)

411

 

278

 

Energy marketing and trading activities

 

 

 

 

 

26

 

17

 

 

 

26

 

17

 

Transportation and other costs

 

28

 

21

 

6

 

6

 

 

 

 

 

34

 

27

 

Operating, selling and general

 

230

 

218

 

19

 

17

 

100

 

85

 

17

 

23

 

366

 

343

 

Depreciation, depletion and amortization

 

118

 

99

 

21

 

18

 

15

 

15

 

1

 

1

 

155

 

133

 

Exploration

 

9

 

 

8

 

5

 

 

 

 

 

17

 

5

 

Royalties

 

10

 

8

 

32

 

12

 

 

 

 

 

42

 

20

 

Taxes other than income taxes

 

6

 

6

 

 

1

 

83

 

81

 

 

 

89

 

88

 

(Gain) on disposal of assets

 

 

 

 

 

(1

)

 

 

 

(1

)

 

Project start-up costs

 

2

 

 

 

 

 

 

 

 

2

 

 

Financing expenses

 

 

 

 

 

 

 

(22

)

31

 

(22

)

31

 

 

 

405

 

352

 

86

 

66

 

750

 

554

 

(122

)

(30

)

1 119

 

942

 

Earnings (loss) before income taxes

 

460

 

167

 

57

 

9

 

33

 

12

 

7

 

(52

)

557

 

136

 

Income taxes

 

(154

)

(56

)

(29

)

(4

)

(12

)

(5

)

6

 

19

 

(189

)

(46

)

Net earnings (loss)

 

306

 

111

 

28

 

5

 

21

 

7

 

13

 

(33

)

368

 

90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at March 31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

7 138

 

6 567

 

822

 

767

 

979

 

932

 

63

 

68

 

9 002

 

8 334

 

CAPITAL EMPLOYED(1)

 

4 395

 

4 946

 

434

 

363

 

470

 

502

 

192

 

68

 

5 491

 

5 879

 

 


(1) Excludes capitalized costs related to major projects in progress.

 

 

5



 

SCHEDULES OF SEGMENTED DATA (continued)
(unaudited)

 

 

 

 

 

 

 

 

 

Three months ended March 31

 

 

 

Oil Sands

 

Natural Gas

 

Energy Marketing and Refining

 

Corporate and Eliminations

 

Total

 

($ millions)

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

CASH FLOW BEFORE FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow from (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow from (used in) operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

306

 

111

 

28

 

5

 

21

 

7

 

13

 

(33

)

368

 

90

 

Exploration expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

 

4

 

1

 

 

 

 

 

4

 

1

 

Dry hole costs

 

 

 

4

 

4

 

 

 

 

 

4

 

4

 

Non-cash items included in earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

118

 

99

 

21

 

18

 

15

 

15

 

1

 

1

 

155

 

133

 

Future income taxes

 

151

 

54

 

28

 

4

 

(3

)

 

(8

)

(23

)

168

 

35

 

Current income tax provision allocated to Corporate

 

3

 

2

 

1

 

1

 

15

 

5

 

(19

)

(8

)

 

 

(Gain) on disposal of assets

 

 

 

 

 

(1

)

 

 

 

(1

)

 

Other

 

4

 

5

 

1

 

1

 

2

 

1

 

(53

)

(1

)

(46

)

6

 

Overburden removal outlays

 

(44

)

(53

)

 

 

 

 

 

 

(44

)

(53

)

Increase (decrease) in deferred credits and other

 

3

 

(5

)

1

 

 

 

 

1

 

(30

)

5

 

(35

)

Total cash flow from (used in) operations

 

541

 

213

 

88

 

34

 

49

 

28

 

(65

)

(94

)

613

 

181

 

Decrease (increase) in operating working capital

 

25

 

(56

)

(9

)

(19

)

18

 

(25

)

(48

)

45

 

(14

)

(55

)

Total cash flow from (used in) operating activities

 

566

 

157

 

79

 

15

 

67

 

3

 

(113

)

(49

)

599

 

126

 

Cash from (used in) investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital and exploration expenditures

 

(241

)

(152

)

(39

)

(57

)

(13

)

(5

)

(2 

)

(2 

(295

(216

Deferred maintenance shutdown expenditures

 

(9

)

(2

)

 

 

 

(1

)

 

 

(9

)

(3

)

Deferred outlays and other investments

 

 

 

 

 

 

(2

)

 

 

 

(2

)

Proceeds from disposals

 

 

 

2

 

 

1

 

 

 

 

3

 

 

Total cash (used in) investing activities

 

(250

)

(154

)

(37

)

(57

)

(12

)

(8

)

(2

)

(2

)

(301

)

(221

)

Net cash surplus (deficiency) before financing activities

 

316

 

3

 

42

 

(42

55

 

(5

)

(115

(51

)

298

 

(95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6



 

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.

 

In the opinion of management, these interim consolidated financial statements contain all adjustments of a normal and recurring nature necessary to present fairly Suncor Energy Inc’s (Suncor) financial position at March 31, 2003 and the results of its operations and its cash flows for the three months ended March 31, 2003 and 2002. The results of operations and cash flows are not necessarily indicative of the results of operations or cash flows to be expected for the year ending December 31, 2003.

 

2. Energy Marketing and Trading Activities

 

In November of 2002, Suncor commenced energy trading activities. In addition to those financial derivatives used for hedging activities, the company also uses energy derivatives, including physical and financial swaps, forwards and options to gain market information and to earn trading revenues. These energy trading activities are accounted for using the mark-to-market method and as such physical and financial energy contracts are recorded at fair value at each balance sheet date. The net pre-tax loss of $2 million from the revaluation of these contracts is reported in the Statement of Earnings for the period ended March 31, 2003.

 

The fair value of unsettled (unrealized) energy trading assets and liabilities is as follows:

 

($ millions)

 

March 31
2003

 

December 31
2002

 

Energy trading assets

 

1

 

2

 

Energy trading liabilities

 

2

 

2

 

 

The source of the valuations of the above contracts is based on actively quoted prices.

 

 

3. Financing Expenses

 

 

Three months ended March 31

 

($ millions)

 

2003

 

2002

 

Interest on debt

 

36

 

38

 

Capitalized interest

 

(10

)

(4

)

Net interest expense

 

26

 

34

 

Unrealized foreign exchange (gain) on long-term debt

 

(55

)

(3

)

Other foreign exchange

 

7

 

 

Total financing expenses

 

(22

)

31

 

 

 

7



 

4. Reconciliation of Basic and Diluted Earnings Per Common Share

 

 

 

Three months ended March 31

 

($ millions)

 

2003

 

2002

 

Net earnings attributable to common shareholders

 

375

 

83

 

Dividends on preferred securities, net of tax

 

7

 

(a)

Revaluation of US$ preferred securities, net of tax

 

(14

)

(a)

Adjusted net earnings attributable to common shareholders

 

368

 

83

 

 

(millions of common shares)

 

 

 

 

 

Weighted-average number of common shares

 

449

 

446

 

Dilutive securities:

 

 

 

 

 

Options issued under stock-based compensation plans

 

5

 

8

 

Redemption of preferred securities by the issuance of common shares

 

22

 

(a)

 

 

 

 

 

 

Weighted-average number of diluted common shares

 

476

 

454

 

 

 

 

 

 

 

(dollars per common share)

 

 

 

 

 

Basic earnings per share(b)

 

0.84

 

0.18

 

Diluted earnings per share

 

0.77

(c)

0.18

(a)

 


Note: An option will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the option.

 

(a)   For the first quarter ended March 31, 2002, 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 adjusted net earnings attributable to common shareholders, divided by the weighted-average number of diluted common shares.

 

5. 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 amounts on the company’s stock option plans:

 

The company granted 253,338 SunShare options to new employees in the first quarter of 2003.

 

Under the company’s other plans, 1,720,780 options were granted in the first three months of 2003 (1,659,020 options were granted during the first quarter of 2002).

 

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:

 

 

 

Three months ended March 31

 

 

 

2003

 

2002

 

Annual dividend per share

 

0.17

 

0.17

 

Risk-free interest rate

 

4.37

%

5.58

%

Expected life

 

6 years

 

6 years

 

Expected volatility

 

33

%

34

%

Weighted-average fair value per option

 

$

10.10

 

$

6.70

 

 

 

8



 

The company does not recognize any compensation expense related to stock options granted to employees and non-employee directors. Compensation expense for all new and previously granted options has 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:

 

 

 

Three months ended March 31

 

($ millions, except per share amounts)

 

2003

 

2002

 

Net earnings attributable to common shareholders — as reported

 

375

 

83

 

Less: compensation cost under the fair value method

 

14

 

10

 

Pro forma net earnings attributable to common shareholders

 

361

 

73

 

Basic earnings per share

 

 

 

 

 

As reported

 

0.84

 

0.18

 

Pro forma

 

0.81

 

0.16

 

Diluted earnings per share

 

 

 

 

 

As reported

 

0.77

 

0.18

 

Pro forma

 

0.74

 

0.16

 

 

6. Supplemental Information

 

 

 

Three months ended March 31

 

($ millions)

 

2003

 

2002

 

Interest paid

 

62

 

45

 

Income taxes paid

 

25

 

9

 

 

Crude oil hedges at March 31, 2003

 

 

 

Quantity
(bbl/day)

 

Average Price
(US$/bbl)(a)

 

Revenue Hedged
(Cdn$ millions) (b)

 

Hedge
Period(d)

 

Swaps

 

10 000

 

30.10

 

13

 

2003

(c)

Swaps

 

15 000

 

24.46

 

148

 

2003

 

Costless collars

 

60 000

 

21.27 - 25.56

 

516 - 620

 

2003

 

 

 

 

 

 

 

 

 

 

 

Swaps

 

25 000

 

22.85

 

306

 

2004

 

Costless collars

 

11 000

 

21.00 - 23.65

 

124 - 140

 

2004

 

Swap/call(e)

 

30 000

 

24.36

 

392

 

2004

 

 

 

 

 

 

 

 

 

 

 

Swaps

 

21 000

 

21.85

 

246

 

2005

 

 

Margin hedges at March 31, 2003

 

Refined product and crude swaps

 

Quantity
(bbl/day)

 

Average Margin
(US$/bbl)

 

Margin Hedged
(Cdn$ millions)(b)

 

Hedge
Period (d)

 

 

 

13 000

 

5.70

 

30

 

2003

 

 

 

6 600

 

5.25

 

3

 

2004

(f)

 

Natural gas hedges at March 31, 2003

 

 

 

Quantity
(GJ/day)

 

Average Price
(Cdn$/GJ)

 

Revenue Hedged
(Cdn$ millions) (b)

 

Hedge
Period(g)

 

Swaps

 

10 000

 

$6.43

 

14

 

2003

 

Costless collars

 

15 000

 

$5.85 - $7.01

 

19 - 22

 

2003

 

 


(a)   Average price for crude oil swaps is WTI per barrel at Cushing, Oklahoma.

 

(b)   The revenue and margin hedged is translated to Cdn$ at the March 31 exchange rate and is subject to change as the Cdn$/US$ exchange rate fluctuates during the hedge period.

 

(c)   For the period January to April 2003, inclusive.

 

(d)   For the full year unless otherwise noted.

 

(e)   These hedging instruments provide for a minimum price of US$24.36 per barrel with the company realizing additional revenue when prices exceed US$29.67 per barrel.

 

(f)    For the period January and February 2004, inclusive.

 

(g)   For the period April to October 2003, inclusive.

 

 

9



 

7. Transportation Costs and Other Comparative Figures

 

Effective January 2003, transportation costs billed to customers are classified as revenues with the related transportation costs classified as Transportation and Other Costs in the Statement of Earnings. Previously, these costs were netted against revenue. Prior period amounts have been reclassified for comparative purposes.

 

Certain other prior period comparative figures have also been reclassified to conform to the current period presentation.

 

8. Event Subsequent to March 31, 2003

 

On April 14, 2003, the company entered into an agreement to acquire a refinery and related assets in Denver, Colorado for cash and other consideration of US$150 million (Cdn$220 million). The agreement is subject to a number of closing conditions including approval of the U.S. Federal Trade Commission and other regulatory authorities. The closing is currently expected to occur in the third quarter of 2003.

 

 

10



 

H I G H L I G H T S

(unaudited)

 

 

 

2003

 

2002

 

CASH FLOW FROM OPERATIONS(3)

 

 

 

 

 

(dollars per common share)

 

 

 

 

 

For the three months ended March 31

 

 

 

 

 

Cash flow from operations

 

1.37

 

0.41

 

Dividends paid on preferred securities (pre-tax)

 

0.03

 

0.03

 

Cash flow from operations after deducting dividends paid on preferred securities

 

1.34

 

0.38

 

 

 

 

 

 

 

RATIOS

 

 

 

 

 

For the twelve months ended March 31

 

 

 

 

 

Return on capital employed (%)(1)

 

19.1

 

11.7

 

Return on capital employed (%)(2)

 

17.7

 

6.8

 

Net debt to cash flow from operations (times)

 

1.3

 

4.4

 

Interest coverage on long-term debt (times)

 

 

 

 

 

Net earnings

 

11.0

 

3.3

 

Cash flow from operations

 

13.5

 

5.3

 

 

 

 

 

 

 

As at March 31

 

 

 

 

 

Debt to debt plus shareholders’ equity (%)

 

38.1

 

53.5

 

 

 

 

 

 

 

COMMON SHARE INFORMATION(3)

 

 

 

 

 

As at March 31

 

 

 

 

 

Share price at end of trading

 

 

 

 

 

Toronto Stock Exchange — Cdn$

 

25.61

 

28.75

 

New York Stock Exchange — US$

 

17.47

 

18.08

 

Common share options outstanding (thousands)

 

21 872

 

12 803

 

 

 

 

 

 

 

For the three months ended March 31

 

 

 

 

 

Average number outstanding, weighted monthly (thousands)

 

449 187

 

446 270

 

 


(1)   Return on capital employed — net earnings adjusted for after-tax financing expenses, divided by average capital employed. Average capital employed is the total of shareholders’ equity and short-term and long-term debt, less capitalized costs related to major projects in progress (as applicable), at the beginning and end of the period, divided by two.

 

(2)   If capital employed were to include capitalized costs related to major projects in progress, the return on capital employed would be as stated on this line.

 

(3)   Comparative figures reflect a two-for-one share split in May 2002.

 

 

11



 

QUARTERLY OPERATING SUMMARY

(unaudited)

 

 

 

For the quarter ended

 

Total year

 

 

 

Mar 31
2003

 

Dec 31
2002

 

Sept 30
2002

 

June 30
2002

 

Mar 31
2002

 

2002

 

OIL SANDS

 

 

 

 

 

 

 

 

 

 

 

 

 

Production(a)

 

211.1

 

227.6

 

207.9

 

207.6

 

179.3

 

205.8

 

Sales(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Light sweet crude oil

 

120.7

 

116.7

 

114.1

 

90.8

 

96.8

 

104.7

 

Diesel

 

30.1

 

25.6

 

22.4

 

23.8

 

20.2

 

23.0

 

Light sour crude oil

 

60.4

 

73.9

 

54.8

 

73.8

 

70.8

 

68.3

 

Bitumen

 

 

12.2

 

15.4

 

8.9

 

0.3

 

9.3

 

Total sales

 

211.2

 

228.4

 

206.7

 

197.3

 

188.1

 

205.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average sales price(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

Light sweet crude oil

 

46.69

 

39.02

 

39.80

 

37.07

 

33.55

 

37.56

 

Other (diesel, light sour crude oil and bitumen)

 

40.62

 

31.04

 

30.86

 

30.33

 

25.53

 

29.58

 

Total

 

44.09

 

35.12

 

35.79

 

33.43

 

29.66

 

33.65

 

Total *

 

48.77

 

39.11

 

40.40

 

36.68

 

30.62

 

36.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH OPERATING COSTS AND TOTAL OPERATING COSTS

 

 

 

 

 

 

 

 

 

New definition:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash costs

 

9.20

 

8.30

 

9.35

 

9.50

 

11.25

 

9.50

 

Natural gas

 

3.10

 

1.75

 

1.05

 

1.40

 

2.25

 

1.55

 

Imported bitumen

 

0.10

 

0.15

 

 

 

 

0.05

 

Cash operating costs(1),(c)

 

12.40

 

10.20

 

10.40

 

10.90

 

13.50

 

11.10

 

Depreciation, depletion and amortization

 

6.20

 

6.05

 

6.25

 

5.50

 

6.15

 

6.00

 

Total operating costs(2),(c)

 

18.60

 

16.25

 

16.65

 

16.40

 

19.65

 

17.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As previously defined:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash costs

 

9.35

 

8.70

 

9.15

 

9.40

 

11.05

 

9.45

 

Natural gas

 

3.10

 

1.75

 

1.05

 

1.45

 

2.15

 

1.60

 

Cash overburden spending

 

2.30

 

2.00

 

1.75

 

1.75

 

3.15

 

2.10

 

Imported bitumen

 

0.10

 

 

 

 

 

0.05

 

Project start-up costs

 

0.10

 

0.05

 

0.10

 

 

 

0.05

 

Cash operating costs(3),(c)

 

14.95

 

12.50

 

12.05

 

12.60

 

16.35

 

13.25

 

Depreciation, depletion and amortization
(net of cash overburden spending)

 

3.90

 

4.05

 

4.50

 

4.05

 

2.70

 

3.90

 

Total operating costs(4),(c)

 

18.85

 

16.55

 

16.55

 

16.65

 

19.05

 

17.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(for the period ended)

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital employed(i)

 

4 395

 

4 540

 

4 720

 

4 833

 

4 946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(for the twelve months ended)

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on capital employed(j)

 

21.2

 

16.8

 

14.6

 

13.4

 

14.2

 

 

 

Return on capital employed(j) ****

 

19.3

 

15.6

 

11.8

 

8.7

 

6.9

 

 

 

 

 

12



 

QUARTERLY OPERATING SUMMARY (continued)
(unaudited)

 

 

 

For the quarter ended

 

Total year

 

 

 

Mar 31
2003

 

Dec 31
2002

 

Sept 30
2002

 

June 30
2002

 

Mar 31
2002

 

2002

 

NATURAL GAS

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross production **

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas(d)

 

184

 

182

 

181

 

179

 

175

 

179

 

Natural gas liquids(a)

 

2.4

 

2.4

 

2.3

 

2.5

 

2.5

 

2.4

 

Crude oil(a)

 

1.4

 

1.5

 

1.3

 

1.7

 

1.4

 

1.5

 

Total gross production(e)

 

34.5

 

34.2

 

33.8

 

34.0

 

33.0

 

33.7

 

Average sales price

 

 

 

 

 

 

 

 

 

 

 

 

 

Natural gas(f)

 

7.54

 

4.91

 

3.56

 

3.92

 

3.21

 

3.91

 

Natural gas(f) *

 

7.59

 

4.91

 

3.56

 

3.92

 

3.21

 

3.91

 

Natural gas liquids(b)

 

41.65

 

35.14

 

31.66

 

28.25

 

22.53

 

29.35

 

Crude oil — Conventional(b)

 

47.75

 

33.20

 

33.57

 

30.99

 

29.15

 

31.72

 

Crude oil — Conventional(b) *

 

47.75

 

39.37

 

40.30

 

34.82

 

30.50

 

36.24

 

Net wells drilled

 

 

 

 

 

 

 

 

 

 

 

 

 

Conventional

— Exploratory ***

 

3

 

4

 

3

 

 

14

 

21

 

 

— Development

 

5

 

6

 

2

 

5

 

9

 

22

 

 

 

8

 

10

 

5

 

5

 

23

 

43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(for the period ended)

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital employed(i)

 

434

 

449

 

467

 

473

 

363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(for the twelve months ended)

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on capital employed(j)

 

14.6

 

9.2

 

7.7

 

10.4

 

20.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ENERGY MARKETING AND REFINING

 

 

 

 

 

 

 

 

 

 

 

 

 

Refined product sales(g)

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation fuels

 

 

 

 

 

 

 

 

 

 

 

 

 

Gasoline

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

4.4

 

4.5

 

4.6

 

4.5

 

4.3

 

4.5

 

Other

 

4.2

 

5.0

 

4.3

 

4.2

 

4.0

 

4.4

 

Jet fuel

 

0.7

 

0.5

 

0.4

 

0.4

 

0.3

 

0.4

 

Diesel

 

3.0

 

3.2

 

2.8

 

3.1

 

2.4

 

2.9

 

Total transportation fuel sales

 

12.3

 

13.2

 

12.1

 

12.2

 

11.0

 

12.2

 

Petrochemicals

 

1.0

 

0.7

 

0.6

 

0.8

 

0.6

 

0.6

 

Heating oils

 

0.8

 

0.6

 

0.1

 

0.4

 

0.7

 

0.4

 

Heavy fuel oils

 

0.7

 

0.7

 

0.5

 

0.6

 

0.6

 

0.6

 

Other

 

0.9

 

0.6

 

0.8

 

0.9

 

0.6

 

0.7

 

Total refined product sales

 

15.7

 

15.8

 

14.1

 

14.9

 

13.5

 

14.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margins(h)

 

 

 

 

 

 

 

 

 

 

 

 

 

Refining(5)

 

7.8

 

6.6

 

4.4

 

3.8

 

4.1

 

4.8

 

Retail(6)

 

7.0

 

6.5

 

6.9

 

6.8

 

6.1

 

6.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil supply and refining

 

 

 

 

 

 

 

 

 

 

 

 

 

Processed at Suncor refinery(g)

 

11.5

 

12.0

 

11.1

 

7.8

 

11.3

 

10.6

 

Utilization of refining capacity(j)

 

103

 

108

 

100

 

70

 

102

 

95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(for the period ended)

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital employed(i)

 

470

 

491

 

503

 

524

 

502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(for the twelve months ended)

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on capital employed(j)

 

15.5

 

12.5

 

8.3

 

8.6

 

12.6

 

 

 

 

 

13



 

QUARTERLY OPERATING SUMMARY (continued)

 

Definitions

 

(1)

Cash operating costs

Include cash costs that are defined as operating, selling and general expenses (excluding inventory changes), and taxes other than income taxes. Per barrel amounts are based on production volumes.

 

 

 

 

(2)

Total operating costs

Include cash operating costs as defined above and non-cash operating costs. Per barrel amounts are based on production volumes.

 

 

 

 

(3)

Cash operating costs
(as previously defined)

Include cash costs that were defined as operating, selling and general expenses (including inventory changes), certain financing expenses, taxes other income taxes and cash overburden spending. Per barrel amounts were based on sales volumes.

 

 

 

 

(4)

Total operating costs
(as previously defined)

Include cash operating costs as defined in (3) above and non-cash operating costs. Per barrel amounts were based on sales volumes.

 

 

 

 

(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.

 

Explanatory Notes

 

*

Excludes the impact of hedging activities.

**

Currently all Natural Gas production is located in the Western Canada Sedimentary Basin.

***

Excludes exploratory wells in progress.

****

If capital employed were to include capitalized costs related to major projects in progress, the return on capital employed would be as stated on this line.

 

(a)

thousands of barrels per day

(e)

thousands of barrels of oil equivalent per day

(i)

$ millions

 

 

 

 

 

 

(b)

dollars per barrel

(f)

dollars per thousand cubic feet

(j)

percentage

 

 

 

 

 

 

(c)

dollars per barrel rounded to the nearest $0.05

(g)

thousands of cubic metres per day

 

 

 

 

 

 

 

 

(d)

millions of cubic feet per day

(h)

cents per litre

 

 

 

Metric conversion

 

Crude oil, refined products, etc.

 

1m3 (cubic metre) = approx. 6.29 barrels

 

 

14