-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XZnJVT64ds0boe9DT6IbuS3NpK5eGSr1PF59FYsji/9zwwkesLx5Hq2rTJyVErPz alcLDE4zmp9Vb1Lfkk37IA== 0000060512-95-000010.txt : 19950517 0000060512-95-000010.hdr.sgml : 19950516 ACCESSION NUMBER: 0000060512-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOUISIANA LAND & EXPLORATION CO CENTRAL INDEX KEY: 0000060512 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 720244700 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00959 FILM NUMBER: 95538160 BUSINESS ADDRESS: STREET 1: 909 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045666500 MAIL ADDRESS: STREET 1: P O BOX 60350 CITY: NEW ORLEANS STATE: LA ZIP: 70160 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1995 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ............to............ Commission file number 1-959 THE LOUISIANA LAND AND EXPLORATION COMPANY Exact name of registrant as specified in its charter MARYLAND 72-0244700 State or other jurisdiction of I.R.S. Employer incorporation or organization Identification No. 909 POYDRAS STREET, NEW ORLEANS, LA. 70112 Address of principal executive offices Zip Code Registrant's telephone number, including area code 504-566-6500 NO CHANGE Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at Class May 1, 1995 CAPITAL STOCK, $.15 PAR VALUE 33,414,202 SHARES THE LOUISIANA LAND AND EXPLORATION COMPANY INDEX Page Number _________________________________________________________________ PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: (The March 31, 1995 and 1994 consolidated financial statements included in this filing on Form 10-Q have been reviewed by KPMG Peat Marwick LLP, independent auditors, in accordance with established professional standards and procedures for such a review. The report of KPMG Peat Marwick LLP commenting upon their review is included herein.) Consolidated Balance Sheets - March 31, 1995 and December 31, 1994............................. 3 Consolidated Statements of Earnings - three months ended March 31, 1995 and 1994................. 4 Consolidated Statements of Cash Flows - three months ended March 31, 1995 and 1994................. 5 Notes to Consolidated Financial Statements........ 6-7 Independent Auditors' Report...................... 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................... 9-10 Petroleum Segment Information......................... 11 Operating Data........................................ 12-13 PART II. OTHER INFORMATION: Item 4. Submission of Matters to a Vote of Security Holders.................................. 14 Item 6. Exhibits and Reports on Form 8-K............ 14 Part I. FINANCIAL INFORMATION Item 1. Financial Statements. THE LOUISIANA LAND AND EXPLORATION COMPANY CONSOLIDATED BALANCE SHEETS (UNAUDITED) CURRENT ASSETS: Cash, including cash equivalents (March 31, 1995-$3.5; December 31, 1994-$8.6) $ 12.3 12.5 Accounts and notes receivable, principally trade 97.4 126.4 Income taxes receivable 1.1 1.9 Inventories 24.4 31.8 Prepaid expenses 6.9 8.9 Deferred income taxes 2.6 2.6 _____________________________________________________________________________________ TOTAL CURRENT ASSETS 144.7 184.1 _____________________________________________________________________________________ Investments in affiliates 25.4 23.4 Property, plant and equipment 3,078.8 3,049.9 Less accumulated depletion, depreciation and amortization (1,844.8) (1,809.5) _____________________________________________________________________________________ NET PROPERTY, PLANT AND EQUIPMENT 1,234.0 1,240.4 _____________________________________________________________________________________ Other assets 34.5 30.2 _____________________________________________________________________________________ $ 1,438.6 1,478.1 _____________________________________________________________________________________ LIABILITIES AND STOCKHOLDERS' EQUITY _____________________________________________________________________________________ CURRENT LIABILITIES: Accounts payable and accrued expenses 142.4 187.7 Income taxes payable 2.4 2.8 _____________________________________________________________________________________ TOTAL CURRENT LIABILITIES 144.8 190.5 _____________________________________________________________________________________ Deferred income taxes 40.0 40.0 Long-term debt 742.3 739.5 Other liabilities 156.0 155.7 _____________________________________________________________________________________ STOCKHOLDERS' EQUITY: Capital stock 5.7 5.7 Additional paid-in capital 87.6 87.3 Retained earnings 425.7 424.2 _____________________________________________________________________________________ 519.0 517.2 Loans to ESOP (4.4) (5.2) Cost of capital stock in treasury (159.1) (159.6) _____________________________________________________________________________________ TOTAL STOCKHOLDERS' EQUITY 355.5 352.4 _____________________________________________________________________________________ $ 1,438.6 1,478.1 _____________________________________________________________________________________ See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (Millions, except per share data)
Three months ended March 31, 1995 1994 _____________________________________________________________________________________ REVENUES: Oil and gas $109.1 103.8 Refined products 82.2 96.7 Gain on sale of oil and gas properties - 4.7 Other 1.8 1.5 _____________________________________________________________________________________ 193.1 206.7 _____________________________________________________________________________________ COSTS AND EXPENSES: Lease operating and facility expenses 29.5 31.8 Refinery cost of sales and operating expenses 79.6 94.5 Dry holes and exploratory charges 15.2 9.3 Depletion, depreciation and amortization 36.9 49.3 Taxes, other than on earnings 6.4 6.7 General, administrative and other expenses 10.7 10.1 Interest and debt expenses 9.4 6.1 Reversal of litigation accrual - (10.0) _____________________________________________________________________________________ 187.7 197.8 _____________________________________________________________________________________ Earnings before income taxes 5.4 8.9 Income tax expense 1.9 2.7 _____________________________________________________________________________________ NET EARNINGS $ 3.5 6.2 _____________________________________________________________________________________ EARNINGS PER SHARE $ 0.11 0.19 _____________________________________________________________________________________ AVERAGE SHARES 33.5 33.3 _____________________________________________________________________________________ CASH DIVIDENDS PER SHARE $ 0.06 0.25 _____________________________________________________________________________________ See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of dollars)
Three months ended March 31, 1995 1994 _____________________________________________________________________________________ CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 3.5 6.2 Adjustments to reconcile to cash flows from operations: Gain on sale of oil and gas properties - (4.7) Depletion, depreciation and amortization 36.9 49.3 Deferred income taxes - (3.5) Dry holes and impairment charges 8.5 4.8 Other (1.6) (2.3) _____________________________________________________________________________________ 47.3 49.8 Changes in operating assets and liabilities: Net decrease in receivables 28.2 17.2 Net decrease in inventories 7.4 1.1 Net (increase) decrease in prepaid items 2.0 (4.3) Net decrease in payables (36.2) (21.5) Other (3.0) (2.4) _____________________________________________________________________________________ NET CASH FLOWS FROM OPERATING ACTIVITIES 45.7 39.9 _____________________________________________________________________________________ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (52.3) (51.4) Proceeds from asset sales 2.7 10.0 Other (2.1) (14.5) _____________________________________________________________________________________ Net cash flows from investing activities (51.7) (55.9) _____________________________________________________________________________________ CASH FLOWS FROM FINANCING ACTIVITIES: Additions to long-term debt 12.3 126.0 Repayments of long-term debt (9.5) (134.3) Advances against cash surrender value 9.0 34.4 Dividends (2.0) (8.3) Repayment of loans to ESOP .8 .7 Other (4.8) (4.9) _____________________________________________________________________________________ NET CASH FLOWS FROM FINANCING ACTIVITIES 5.8 13.6 _____________________________________________________________________________________ DECREASE IN CASH AND CASH EQUIVALENTS $ (.2) (2.4) _____________________________________________________________________________________ See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of March 31, 1995, and the results of operations and cash flows for the three-month periods ended March 31, 1995 and 1994. Certain amounts have been reclassified to conform with the current period's presentation. 2. For the three months ended March 31, 1995 and 1994, interest costs incurred were $13.6 million and $11.9 million, respectively, of which $4.2 million and $5.8 million, respectively, were capitalized as part of the cost of property, plant and equipment. 3. Earnings per share are calculated on the weighted average number of shares outstanding during each period for capital stock and, when dilutive, capital stock equivalents, which assumes exercise of stock options. 4. In accordance with Regulation S-X, Rule 3-09, the audited consolidated financial statements of the Company's 50%-owned affiliate, MaraLou Netherlands Partnership (MaraLou) and its wholly-owned consolidated subsidiary, CLAM Petroleum Company (CLAM), were filed with the Company's Annual Report on Form 10-K for the year ended December 31, 1994. Accordingly, the following unaudited summarized consolidated income statement information for MaraLou and its consolidated subsidiary, CLAM, for the three-month periods ended March 31, 1995 and 1994 are presented in accordance with Regulation S-X, Rule 10-01(b).
(Unaudited) Three months ended March 31, 1995 1994 _________________________________________________________________________________ Gross revenues $ 25.0 16.8 _________________________________________________________________________________ Operating profit 12.5 11.6 _________________________________________________________________________________ Net earnings (loss) 5.4 3.9 _________________________________________________________________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 5. As explained in Note 15 of "Notes to Consolidated Financial Statements" in the Company's 1994 Annual Report to Shareholders, the Company has been notified by the U.S. Environmental Protection Agency that it is one of many Potentially Responsible Parties (PRP) at three National Priorities List sites. Based on its evaluation of the total cleanup costs, its estimate of its potential exposure, and the viability of the other PRP's, the Company believes that any costs ultimately required to be borne by it at these sites will not have a material adverse effect on the results of operations, cash flow or financial position of the Company. The Company is subject to other legal proceedings, claims and liabilities which arise in the ordinary course of its business. In the opinion of Management, the amount of ultimate liability with respect to these actions will not have a material adverse effect on results of operations, cash flow or financial position of the Company. INDEPENDENT AUDITORS' REPORT The Board of Directors The Louisiana Land and Exploration Company: We have reviewed the consolidated balance sheet of The Louisiana Land and Exploration Company and subsidiaries as of March 31, 1995, and the related consolidated statements of earnings and cash flows for the three-month periods ended March 31, 1995 and 1994. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of The Louisiana Land and Exploration Company and subsidiaries as of December 31, 1994, and the related consolidated statements of earnings (loss), stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 3, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /KPMG PEAT MARWICK LLP KPMG PEAT MARWICK LLP New Orleans, Louisiana May 12, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. REVIEW OF OPERATIONS Pretax earnings totaled $5.4 million in the first quarter of 1995, compared to $8.9 million in the first quarter of 1994 which included nearly $15 million of nonrecurring gains. Excluding the impact of the 1994 nonrecurring gains, operating results improved significantly in the first quarter of 1995 due to higher production volumes, improved crude oil prices, lower operating costs and expenses and improved refinery operating profit. Pretax earnings for the 1994 quarter included a $10 million pretax gain related to the reversal of a litigation accrual and a $4.7 million pretax gain on the sale of oil and gas properties. OIL AND GAS OPERATIONS Revenues from the Company's oil and gas operations were up $5 million from the first quarter of 1994. Liquids revenues were up $22 million due to the effect of higher worldwide crude oil prices ($14 million) and increased crude oil volumes ($5 million). Natural gas revenues, however, were down $15 million as a result of lower domestic deliveries ($2 million) and prices ($18 million). The decline in domestic natural gas revenues was partially offset by higher North Sea natural gas production ($4 million) and prices ($2 million). Crude oil volumes were 3500 barrels per day (BPD) higher than first quarter 1994 volumes. North Sea operations were up 7400 BPD primarily due to new wells coming onstream at Brae Field and T-Block. Domestic and other foreign operations were down 2600 BPD and 1300 BPD, respectively, primarily due to natural declines at mature properties. Natural gas deliveries were up 26 million cubic feet per day from the prior year first quarter primarily due to the late-1994 initiation of gas sales through the SAGE Pipeline System in the North Sea. Also contributing to the increase in natural gas deliveries were new domestic and North Sea wells onstream and the return to production of domestic wells which were shut-in for repairs and maintenance during the prior year. The domestic increases were offset by the effects of natural declines at mature producing properties, the voluntary curtailment of natural gas deliveries due to low prices, and the sale of certain oil and gas properties since the 1994 quarter. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. (Continued) Costs and expenses were reduced during the first quarter of 1995. Lease operating and facility expenses (LOE) were down due to reductions in operating expenses, workover costs, repair charges and facilities expenses. Depletion, depreciation and amortization (DD&A) declined over $12 million as a result of the 1994 write-down of petroleum assets ($13 million) and natural production declines on mature producing properties ($8 million). These reductions in DD&A were partially offset by the DD&A associated with new wells onstream ($9 million). Dry holes and exploratory charges increased due to the write-off of unsuccessful exploratory wells and higher seismic costs incurred. Interest and debt expenses increased due to higher revolving debt and interest rates and lower interest capitalized on qualifying projects. REFINING OPERATIONS Refining operations resulted in a $1.4 million pretax operating profit for the first quarter of 1995, which was up from the $1.1 million reported in the comparable 1994 quarter. The favorable impact of higher product prices ($6 million) and lower crude oil feedstock costs ($13 million) more than offset the effect of lower revenues due to a decline in sales volumes ($18 million). LIQUIDITY AND CAPITAL RESOURCES In the first quarter of 1995, the Company generated approximately $46 million in cash from operations. However, cash and equivalents were essentially unchanged from the December 31, 1994 level primarily as the result of expenditures for capital projects ($52 million) and dividends paid ($2 million). The Company's cash position was supplemented with net increases in long-term debt ($3 million), the proceeds from assets sales ($3 million) and advances against cash surrender values of life insurance policies ($9 million). The Company expects to fund its 1995 expenditures, including capital and exploration expenditures of approximately $214 million, primarily from operating cash flows and the proceeds from sales of nonstrategic assets. The Company does not expect to realize any significant losses from these sales. However, the Company expects to supplement its working capital, from time-to-time, through its commercial paper program and its existing revolving credit facility. NOTE: The accompanying consolidated financial statements and notes thereto included in Item 1. of this Form 10-Q and the petroleum segment information and operating data following this Item 2. are an integral part of this discussion and analysis and should be read in conjunction herewith. THE LOUISIANA LAND AND EXPLORATION COMPANY PETROLEUM SEGMENT INFORMATION (Millions of dollars)
Three months ended March 31, 1995 1994 _____________________________________________________________________________________ Sales to unaffiliated customers: Domestic $152.6 187.3 North Sea 34.9 12.9 Other foreign 3.8 5.0 _____________________________________________________________________________________ 191.3 205.2 Interest and other income 1.8 1.5 _____________________________________________________________________________________ Total revenues $193.1 206.7 _____________________________________________________________________________________ Earnings (loss) before income taxes: Operating profit (loss): Domestic 18.7 19.9 North Sea 10.4 (1.2) Other foreign (3.7) (3.2) _____________________________________________________________________________________ 25.4 15.5 Other income (expense), net (20.0) (6.6) _____________________________________________________________________________________ Earnings before income taxes $ 5.4 8.9 _____________________________________________________________________________________ Capital expenditures: Exploration: Domestic 11.7 10.8 North Sea - .4 Other foreign 3.9 4.5 _____________________________________________________________________________________ 15.6 15.7 _____________________________________________________________________________________ Development: Domestic 12.3 17.7 North Sea 2.7 3.7 Other foreign 3.8 2.0 _____________________________________________________________________________________ 18.8 23.4 _____________________________________________________________________________________ 34.4 39.1 Refining and marketing 1.1 2.8 _____________________________________________________________________________________ 35.5 41.9 Capitalized interest 4.2 5.8 Other 1.5 .7 _____________________________________________________________________________________ $ 41.2 48.4 _____________________________________________________________________________________
THE LOUISIANA LAND AND EXPLORATION COMPANY OPERATING DATA
Three months ended March 31, 1995 1994 _____________________________________________________________________________________ OIL AND GAS OPERATIONS1 CRUDE AND CONDENSATE2 Production (thousands of barrels per day): Domestic 21.6 24.2 North Sea 17.8 10.4 Other foreign 3.1 4.4 _____________________________________________________________________________________ 42.5 39.0 _____________________________________________________________________________________ Average price received (per barrel): Domestic $17.88 13.90 North Sea 17.27 13.49 Other foreign 12.94 10.97 Consolidated 17.27 13.46 _____________________________________________________________________________________ PLANT PRODUCTS Production (thousands of barrels per day): Domestic 3.4 2.3 North Sea 1.0 .3 _____________________________________________________________________________________ 4.4 2.6 _____________________________________________________________________________________ Average price received (per barrel): Domestic $11.26 8.87 North Sea 15.89 11.02 Consolidated 12.34 9.10 _____________________________________________________________________________________ NATURAL GAS Production (millions of cubic feet per day): Domestic 232.8 243.4 North Sea 27.4 .2 Other foreign 2.4 3.3 CLAM Petroleum Company 53.6 43.2 _____________________________________________________________________________________ 316.2 290.1 _____________________________________________________________________________________ Average price received (per MCF): Domestic $ 1.51 2.38 North Sea 2.38 1.69 Other foreign .72 2.02 CLAM Petroleum Company 2.49 2.11 Consolidated 1.75 2.33 _____________________________________________________________________________________ 1 Includes the Company's 50% equity interest in its unconsolidated affiliate, CLAM Petroleum Company. 2 Before the elimination of intercompany transfers.
THE LOUISIANA LAND AND EXPLORATION COMPANY OPERATING DATA (CONTINUED)
Three months ended March 31, (Millions of dollars) 1995 1994 ____________________________________________________________________________________ REFINING OPERATIONS Refining Operating Profit (Loss): Revenues: Refined products* $ 90.5 102.5 Other - .5 ____________________________________________________________________________________ 90.5 103.0 ____________________________________________________________________________________ Cost and expenses: Cost of sales* 78.0 91.1 Operating expenses 9.9 9.2 Depreciation .4 .8 Taxes, other than income .8 .8 ____________________________________________________________________________________ 89.1 101.9 ____________________________________________________________________________________ $ 1.4 1.1 ____________________________________________________________________________________ *Before the elimination of intercompany transfers to the Company's refinery $ 8.3 5.8 ____________________________________________________________________________________ Sales (thousands of barrels per day) 49.5 59.8 ____________________________________________________________________________________ Average price received (per barrel) $20.31 19.04 ____________________________________________________________________________________ ____________________________________________________________________________________ GROSS WELLS DRILLED Working Interest Exploratory: Oil - 1 Gas 7 5 Dry 1 4 ____________________________________________________________________________________ 8 10 ____________________________________________________________________________________ Development: Oil 2 1 Gas 2 1 Dry - - ____________________________________________________________________________________ 4 2 ____________________________________________________________________________________ Total working interest 12 12 Royalty Interest 5 6 ____________________________________________________________________________________ Total wells 17 18 ____________________________________________________________________________________ NET WELLS DRILLED Exploratory: Oil - .5 Gas 3.3 3.0 Dry .7 2.1 ____________________________________________________________________________________ 4.0 5.6 ____________________________________________________________________________________ Development: Oil .4 .3 Gas .5 .2 Dry - - ____________________________________________________________________________________ .9 .5 ____________________________________________________________________________________ Total net wells 4.9 6.1 ____________________________________________________________________________________
PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. At the Annual Meeting of Stockholders held on May 11, 1995, The Louisiana Land and Exploration Company 1995 Stock Option Plan for Non- Employee Directors was approved by a stockholder vote of: For - 27,152,443; Against - 1,995,462. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K: A Current Report on Form 8-K was filed on January 30, 1995 containing the press release relating to the unaudited financial results for the Registrant's fiscal quarter ended December 31, 1994. SIGNATURE 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. THE LOUISIANA LAND AND EXPLORATION COMPANY (REGISTRANT) By: /s/ Jerry D. Carlisle ___________________________________________ JERRY D. CARLISLE VICE PRESIDENT AND CONTROLLER (PRINCIPAL ACCOUNTING OFFICER) Dated: May 12, 1995 -----END PRIVACY-ENHANCED MESSAGE-----