UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 28, 2004
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 000-49987 01-0562944
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
600 North Dairy Ashford
Houston, Texas 77079
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (281) 293-1000
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 -- Press release issued by ConocoPhillips on January 28, 2004.
99.2 -- Financial and operational tables.
99.3 -- Supplemental financial information.
Item 12. Results of Operations and Financial Condition
On January 28, 2004, ConocoPhillips issued a press release announcing
the company's financial and operating results for the quarter ended December 31,
2003. A copy of the press release is furnished as Exhibit 99.1 hereto and
incorporated herein by reference. Additional financial and operating information
about the quarter is furnished as Exhibits 99.2 and 99.3 to this report and
incorporated by reference herein.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONOCOPHILLIPS
/s/ John A.Carrig
-------------------------------
John A. Carrig
Executive Vice President, Finance, and
Chief Financial Officer
January 28, 2004
3
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
99.1 -- Press release issued by ConocoPhillips on January 28, 2004.
99.2 -- Financial and operational tables.
99.3 -- Supplemental financial information.
4
Exhibit 99.1
ConocoPhillips Reports Fourth Quarter Net Income of $1.0 Billion;
Full Year 2003 Net Income Totals $4.7 Billion
HOUSTON--(BUSINESS WIRE)--Jan. 28, 2004--ConocoPhillips
(NYSE:COP):
Earnings at a glance
Fourth Quarter Twelve Months
- ----------------------------------------------------------------------
2003 2002 2003 2002
- ----------------------------------------------------------------------
Income from continuing
operations $985 $558 $4,593 $698
million million million million
Income (loss) from
discontinued
operations 36 (986) 237 (993)
Cumulative effect
of changes in
accounting principles - - (95) -
Net income (loss) 1,021 (428) 4,735 (295)
- ----------------------------------------------------------------------
Diluted income per share
Income from continuing
operations $1.43 $0.82 $6.70 $1.44
Net income (loss) 1.48 (0.63) 6.91 (0.61)
- ----------------------------------------------------------------------
Revenues $26.0 $23.5 $105.1 $57.2
billion billion billion billion
- ----------------------------------------------------------------------
ConocoPhillips (NYSE:COP) today reported fourth quarter net income
of $1,021 million, or $1.48 per share, compared with a net loss of
$428 million, or 63 cents per share, for the same quarter in 2002.
Total revenues were $26.0 billion, versus $23.5 billion a year ago.
Income from continuing operations for the fourth quarter was $985
million, or $1.43 per share, compared with $558 million, or 82 cents
per share, for the same period a year ago.
"Operationally, we performed well overall during the fourth
quarter, and there remains opportunity for improvement," said Jim
Mulva, president and chief executive officer. "We produced 1.61
million barrels-of-oil-equivalent per day and ran our refineries at 94
percent of capacity. Compared with last quarter, lower U.S. refining
margins combined with higher turnaround expenses significantly reduced
downstream earnings.
"We continue to make progress toward strengthening our financial
flexibility. For the full year of 2003, we generated net cash from
operating activities of $9.3 billion, and an additional $2.7 billion
from asset sales. Our disciplined focus enabled us to fund $6.2
billion in capital expenditures, reduce debt by $4.8 billion, improve
our debt-to-capital ratio to 34 percent, and pay $1.1 billion in
dividends to our shareholders."
For the twelve months of 2003, net income was $4,735 million, or
$6.91 per share, compared with a net loss of $295 million, or 61 cents
per share, for the corresponding period in 2002. Income from
continuing operations was $4,593 million, or $6.70 per share, versus
$698 million, or $1.44 per share, for the same period a year ago.
Total revenues were $105.1 billion, versus $57.2 billion a year ago.
The ConocoPhillips merger was consummated on Aug. 30, 2002, and
used purchase accounting to recognize the fair value of the Conoco
assets and liabilities. Results for the twelve months of 2002 include
eight months' activity for Phillips and four months of activity for
ConocoPhillips.
The results of ConocoPhillips' business segments follow.
Exploration & Production (E&P)
Fourth quarter financial results: E&P income from continuing
operations in the fourth quarter was $991 million, up from $967
million in the third quarter of 2003 and up from $808 million in the
fourth quarter of 2002. The increase from the third quarter was
primarily the result of impacts from international tax benefits in the
fourth quarter, increased international natural gas prices, and
increased production. These improvements were partially offset by
lower gains on asset sales and increased exploration costs. Improved
results from the fourth quarter of 2002 were primarily due to higher
realized crude oil and natural gas prices, and the impact from
international tax benefits in 2003, partially offset by lower equity
earnings and lease impairments.
ConocoPhillips' daily production for the quarter was higher than
that of the third quarter, averaging 1.61 million
barrels-of-oil-equivalent (BOE), including Canadian Syncrude.
Increased production was primarily due to normal seasonality, higher
production in Vietnam and improved operations in the U.K. North Sea,
partially offset by operating interruptions in Venezuela, Alaska and
Indonesia. Disposition proceeds of approximately $275 million during
the fourth quarter brought total E&P asset sales during 2003 to
approximately $1 billion. These dispositions were producing
approximately 22,000 BOE per day when sold, contributing approximately
13,000 BOE per day to fourth quarter average production.
ConocoPhillips' fourth quarter 2003 average worldwide crude oil
sales price was $27.24 per barrel, up from $27.00 in the third quarter
of 2003. Realized crude oil prices did not rise as rapidly as the
industry's market indicators (e.g., West Texas Intermediate) due to
widening price differentials and the lag effect of Alaska North Slope
pricing. The company's U.S. Lower 48 and worldwide natural gas prices
averaged $4.27 and $4.07 per thousand cubic feet, respectively,
compared with $4.56 and $3.80 in the third quarter of 2003. Lower U.S.
natural gas market prices were more than offset by higher prices in
the United Kingdom.
During the fourth quarter, the company realized international tax
benefits, including a $95 million net income benefit from tax rate
reductions enacted by the Canadian Parliament and Alberta provincial
government.
Twelve months financial results: E&P income from continuing
operations for the twelve months of 2003 was $4,160 million, up from
$1,749 million in 2002, primarily due to additional volumes from the
Conoco operations, higher realized worldwide crude oil and natural gas
prices, and the impact of various international tax benefits.
ConocoPhillips' average worldwide crude oil price was $27.47 per
barrel for the twelve months of 2003, compared with $24.07 for the
same period in 2002. The company's U.S. Lower 48 and worldwide natural
gas prices averaged $4.76 and $4.07 per thousand cubic feet,
respectively, versus $2.79 and $2.77 in 2002.
Midstream
Fourth quarter financial results: Midstream income from continuing
operations was $43 million, up from $31 million in the third quarter
of 2003 and up from $20 million in the fourth quarter of 2002. The
increase from the third quarter of 2003 was due primarily to improved
natural gas liquids sales prices. The increase over the fourth quarter
of 2002 was primarily due to higher natural gas liquids sales prices
and increased equity earnings from Duke Energy Field Services, LLC
(DEFS).
Twelve months financial results: Midstream operating results
increased to $130 million, from $55 million in 2002. Contributing to
the increase were higher equity earnings from DEFS and the addition of
the Conoco midstream operations.
Refining and Marketing (R&M)
Fourth quarter financial results: R&M income from continuing
operations was $202 million, down from $485 million in the previous
quarter and up from $105 million in the fourth quarter of 2002.
The decline from the third quarter of 2003 was primarily driven by
lower worldwide refining and marketing margins and increased
turnaround activity. Fourth quarter 2003 results also were negatively
impacted by extended downtime at the Humber refinery in the United
Kingdom and unplanned maintenance at the Alliance refinery in
Louisiana. The improved results over the fourth quarter of 2002 were
attributable to higher refining and marketing margins, and lower
impairment charges, partially offset by higher turnaround activity.
For the fourth quarter, the company's crude oil capacity
utilization rate averaged 94 percent, compared with 95 percent last
quarter and 89 percent in the fourth quarter of 2002. After-tax
turnaround costs were $42 million and $13 million in the fourth
quarter and third quarter of 2003, respectively.
Twelve months financial results: R&M income from continuing
operations for the twelve months of 2003 increased to $1,397 million,
compared with $143 million for the twelve months of 2002. Increased
refining and marketing margins, as well as the addition of the Conoco
assets, contributed to the increase.
Chemicals
Fourth quarter financial results: The Chemicals segment, which
reflects the company's 50 percent interest in Chevron Phillips
Chemical Company LLC, reported income from continuing operations of
$11 million, compared with $7 million in the third quarter of 2003 and
a loss of $13 million in the fourth quarter of 2002.
Twelve months financial results: During the twelve months of 2003,
the Chemicals segment had income from continuing operations of $7
million, compared with a loss of $14 million for the same period a
year ago. The increase was primarily due to improved results from the
aromatics and styrenics product line.
Emerging Businesses
The Emerging Businesses segment had a loss from continuing
operations of $24 million in the fourth quarter of 2003, compared with
losses of $18 million in the third quarter of 2003 and $40 million in
the fourth quarter of 2002. The increased loss from the third quarter
was primarily associated with the operating costs of a newly
operational gas-to-liquids demonstration plant. The lower losses from
the fourth quarter of 2002 primarily resulted from reduced costs
associated with the company's carbon fibers assets, as well as reduced
construction costs in connection with the company's gas-to-liquids
operations.
Corporate and Other
Fourth quarter after-tax Corporate expenses from continuing
operations were $238 million, compared with $223 million in the
previous quarter and $322 million in the fourth quarter of 2002. The
increased charges from the third quarter were primarily attributable
to losses on the early retirement of debt and increased
benefit-related charges, partially offset by higher currency
transaction gains. The decrease from the fourth quarter of 2002
primarily resulted from lower merger-related expenses and higher
currency transaction gains in the fourth quarter of 2003.
The company's balance sheet debt level at the end of the fourth
quarter was approximately $17.8 billion. This includes debt reduction
of over $900 million during the quarter and $4.8 billion for the
entire year, including accounting changes implemented during the third
quarter.
The company's fourth quarter effective tax rate of 41 percent was
lower than that of the third quarter primarily due to international
tax benefits, partially offset by a higher proportion of income in
higher-tax-rate jurisdictions.
Discontinued Operations
Fourth quarter 2003 earnings from discontinued operations were $36
million, compared with $57 million in the third quarter and a loss of
$986 million in the fourth quarter of 2002. The decrease from the
third quarter of 2003 was primarily related to decreased volumes due
to asset sales, while the improvement from the fourth quarter of 2002
was primarily related to a 2002 after-tax impairment charge associated
with the company's planned disposition of certain marketing assets.
Outlook
Mr. Mulva concluded:
"We had a good year in terms of operating performance and market
conditions, enabling us to deliver strong financial results. We have
delivered on our commitments, including synergy targets, and are
dedicated to improving total shareholder return through our
disciplined strategy.
"Upstream, we continue to move forward with our legacy projects.
Our Bayu-Undan project in the Timor Sea is set to begin producing
liquids in early 2004, and the start up of the Hamaca upgrader in
Venezuela is expected later this year. We are progressing the
development of our liquefied natural gas business, including our
announced participation in a Freeport, Texas, regasification project.
We also have committed to a development plan for production of heavy
oil from the Surmont project in Alberta, Canada. In addition, we are
continuing to expand our portfolio of legacy projects, with
developments in the Caspian, Middle East and Asia-Pacific regions.
"Downstream, the optimization of spending related to clean fuels
project initiatives will be an important focus area during 2004. We
expect turnaround activity in the first quarter to be higher than that
of the fourth quarter. In addition, we anticipate our crude oil
capacity utilization rate will be slightly lower. We continue to make
good progress toward completing our planned asset disposition program.
"We are focused on creating value for shareholders through
improved return on capital employed, an enhanced upstream portfolio,
and building financial strength."
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had
approximately 39,000 employees, $82.5 billion of assets, and $105
billion of revenues as of Dec. 31, 2003. For more information, go to
www.conocophillips.com.
ConocoPhillips' quarterly conference call is scheduled for noon
Central today. To listen to the conference call and to view related
presentation materials, go to www.conocophillips.com and click on the
"Fourth Quarter Earnings" link.
For financial and operational tables, go to
www.conocophillips.com/news/nr/earnings/highlights/4q03earnings.html.
For detailed supplemental information, go to
www.conocophillips.com/news/nr/earnings/detail/4q03summary.xls.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This update contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements, such as: "our
Bayu-Undan project in the Timor Sea is set to begin producing liquids
in early 2004"; "the start up of the Hamaca upgrader in Venezuela is
expected later this year"; "we expect turnaround activity in the first
quarter to be higher than that of the fourth quarter"; and "we
anticipate our crude oil capacity utilization rate will be slightly
lower." Further, certain forward-looking statements are based on
assumptions as to future events that may not prove to be accurate.
Therefore, actual outcomes and results may differ materially from what
is expressed or forecast in such forward-looking statements. Economic,
business, competitive and regulatory factors that may affect
ConocoPhillips' business are generally as set forth in ConocoPhillips'
filings with the Securities and Exchange Commission (SEC).
ConocoPhillips is under no obligation (and expressly disclaims any
such obligation) to update or alter its forward-looking statements
whether as a result of new information, future events or otherwise.
Cautionary Note to U.S. Investors -- The SEC permits oil and gas
companies, in their filings with the SEC, to disclose only proved
reserves that a company has demonstrated by actual production or
conclusive formation tests to be economically and legally producible
under existing economic and operating conditions. Production is
distinguished from oil and gas production because SEC regulations
define Syncrude as mining-related and not part of conventional oil and
natural gas reserves. We use certain terms in this release, such as
"including Canadian Syncrude" that the SEC's guidelines strictly
prohibit us from including in filings with the SEC. U.S. investors are
urged to consider closely the disclosure in the company's periodic
filings with the SEC, available from the company at 600 North Dairy
Ashford Road, Houston, Texas 77079. This information can also be
obtained from the SEC by calling 1-800-SEC-0330.
CONTACT: ConocoPhillips, Houston
Kristi DesJarlais, 281-293-4595 (media)
or
Clayton Reasor, 212-207-1996 (investors)
www.conocophillips.com
Exhibit 99.2
Preliminary
FINANCIAL HIGHLIGHTS
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Revenues
Sales and other operating revenues* $25,830 23,346 104,196 56,748
Equity in earnings of affiliates 151 123 542 261
Other income (19) 56 359 192
--------- ---------- --------- ----------
25,962 23,525 105,097 57,201
--------- ---------- --------- ----------
Costs and expenses
Purchased crude oil and products 16,577 15,126 67,424 37,823
Production and operating expenses 1,946 1,696 7,208 4,698
Selling, general and administrative expenses 565 684 2,166 1,950
Exploration expenses 211 277 601 592
Depreciation, depletion and amortization 911 884 3,485 2,223
Property impairments 60 151 252 177
Taxes other than income taxes* 3,826 3,313 14,679 6,937
Accretion on discounted liabilities 38 5 145 22
Interest and debt expense 197 219 844 566
Foreign currency transaction (gains)/losses (50) 35 (36) 24
Minority interests and preferred dividend
requirements
of capital trusts 4 14 20 48
--------- ---------- --------- ----------
24,285 22,404 96,788 55,060
--------- ---------- --------- ----------
Income from continuing operations before income
taxes and subsidiary equity transactions 1,677 1,121 8,309 2,141
Gain on subsidiary equity transactions - - 28 -
--------- ---------- --------- ----------
Income from continuing operations before
income taxes 1,677 1,121 8,337 2,141
Provision for income taxes 692 563 3,744 1,443
--------- ---------- --------- ----------
Income from continuing operations 985 558 4,593 698
Income (loss) from discontinued operations before
cumulative effect of changes in accounting
principles 36 (986) 237 (993)
--------- ---------- --------- ----------
Income (loss) before cumulative effect of changes
in accounting principles 1,021 (428) 4,830 (295)
Cumulative effect of changes in accounting
principles - - (95) -
--------- ---------- --------- ----------
Net income (Loss) $1,021 (428) 4,735 (295)
========= ========== ========= ==========
Income (loss) per share of common stock
Basic
Continuing operations $1.45 0.82 6.75 1.45
Discontinued operations 0.05 (1.45) 0.35 (2.06)
Before cumulative effect of changes in accounting
principles 1.50 (0.63) 7.10 (0.61)
Cumulative effect of changes in accounting
principles - - (0.14) -
Net income (loss) $1.50 (0.63) 6.96 (0.61)
Diluted
Continuing operations $1.43 0.82 6.70 1.44
Discontinued operations 0.05 (1.45) 0.35 (2.05)
Before cumulative effect of changes in accounting
principles 1.48 (0.63) 7.05 (0.61)
Cumulative effect of changes in accounting
principles - - (0.14) -
Net income (loss) $1.48 (0.63) 6.91 (0.61)
Average common shares outstanding (in thousands)
Basic 681,681 678,431 680,490 482,082
Diluted 688,516 681,525 685,195 485,505
*Includes excise taxes on petroleum products sales: $3,590 3,093 13,705 6,236
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
INCOME/(LOSS) FROM CONTINUING OPERATIONS
BEFORE ACCOUNTING CHANGE
E&P
United States $491 415 2,232 1,156
International 500 393 1,928 593
---------- ----------- ---------- -----------
Total E&P 991 808 4,160 1,749
---------- ----------- ---------- -----------
Midstream 43 20 130 55
---------- ----------- ---------- -----------
R&M
United States 176 113 1,115 138
International 26 (8) 282 5
---------- ----------- ---------- -----------
Total R&M 202 105 1,397 143
---------- ----------- ---------- -----------
Chemicals 11 (13) 7 (14)
Emerging Businesses (24) (40) (99) (310)
Corporate and other (238) (322) (1,002) (925)
---------- ----------- ---------- -----------
Consolidated $985 558 4,593 698
========== =========== ========== ===========
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
E&P
United States $- - 142 -
International - - - -
---------- ----------- ---------- -----------
Total E&P - - 142 -
---------- ----------- ---------- -----------
Midstream - - - -
---------- ----------- ---------- -----------
R&M
United States - - (125) -
International - - - -
---------- ----------- ---------- -----------
Total R&M - - (125) -
---------- ----------- ---------- -----------
Chemicals - - - -
Emerging Businesses - - -
Corporate and other - - (112) -
---------- ----------- ---------- -----------
Consolidated $- - (95) -
========== =========== ========== ===========
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Corporate and other 36 (986) 237 (993)
SUMMARY OF NET INCOME/(LOSS)
E&P
United States $491 415 2,374 1,156
International 500 393 1,928 593
---------- ----------- ---------- -----------
Total E&P 991 808 4,302 1,749
---------- ----------- ---------- -----------
Midstream 43 20 130 55
---------- ----------- ---------- -----------
R&M
United States 176 113 990 138
International 26 (8) 282 5
---------- ----------- ---------- -----------
Total R&M 202 105 1,272 143
---------- ----------- ---------- -----------
Chemicals 11 (13) 7 (14)
Emerging Businesses (24) (40) (99) (310)
Corporate and other (202) (1,308) (877) (1,918)
---------- ----------- ---------- -----------
Net income/(loss) $1,021 (428) 4,735 (295)
========== =========== ========== ===========
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
INCOME/(LOSS) FROM CONTINUING
OPERATIONS
Effective tax rate % 41.3 % 50.2 44.9 67.4
Millions of Dollars
FOREIGN CURRENCY GAINS/(LOSSES)
AFTER-TAX
E&P $(22) (23) (50) (34)
Midstream - - - -
R&M 14 1 18 9
Chemicals - - - -
Emerging Businesses - - (1) -
Corporate and other 46 8 67 21
---------- ---------- ---------- ----------
$38 (14) 34 (4)
========== ========== ========== ==========
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from continuing operations $985 558 4,593 698
Depreciation, depletion and amortization 911 884 3,485 2,223
Property impairments 60 151 252 177
Dry hole costs and leasehold impairment 131 146 300 307
Accretion on discounted liabilities 38 5 145 22
In-process research and development - - - 246
Deferred taxes 84 97 417 142
Undistributed equity earnings 132 46 (59) 18
Net (gain)/loss on asset dispositions 15 (15) (211) (7)
Other (264) (109) (390) (32)
Working capital changes (79) 146 624 982
---------- ---------- ---------- ----------
Net cash provided by continuing operations 2,013 1,909 9,156 4,776
Net cash provided by discontinued operations 8 84 189 202
---------- ---------- ---------- ----------
Net cash provided by operating activities $2,021 1,993 9,345 4,978
========== ========== ========== ==========
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $358 449 1,418 1,204
International 851 894 3,079 2,072
---------- ---------- ---------- ----------
1,209 1,343 4,497 3,276
Midstream 4 3 10 5
R&M 429 415 1,179 840
Chemicals - 31 - 60
Emerging Businesses 60 87 284 122
Corporate and other* 71 30 188 85
---------- ---------- ---------- ----------
$1,773 1,909 6,158 4,388
========== ========== ========== ==========
*Excludes discontinued operations
OTHER
At December 31, 2003 At December 31, 2002
Total debt $17,780 19,766
Common stockholders' equity $34,366 29,517
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 318 323 325 331
Lower 48 50 58 54 40
----------- ----------- ----------- ----------
368 381 379 371
Norway 205 233 213 157
United Kingdom 72 86 77 39
Canada 28 37 30 13
Nigeria 35 38 37 29
China 28 11 26 12
Indonesia 10 13 16 5
Other 60 55 54 21
----------- ----------- ----------- ----------
Total consolidated 806 854 832 647
Equity affiliates 116 87 102 35
----------- ----------- ----------- ----------
Total Worldwide 922 941 934 682
=========== =========== =========== ==========
Syncrude 18 22 19 8
=========== =========== =========== ==========
Natural gas liquids produced
United States
Alaska* 24 24 23 24
Lower 48 27 21 25 8
----------- ----------- ----------- ----------
51 45 48 32
Norway 8 7 7 6
Canada 10 14 10 4
Other 3 4 4 4
----------- ----------- ----------- ----------
Total Worldwide 72 70 69 46
=========== =========== =========== ==========
*Includes reinjected volumes sold lease-to-lease: 16 15 15 14
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 205 186 184 175
Lower 48 1,264 1,362 1,295 928
----------- ----------- ----------- ----------
1,469 1,548 1,479 1,103
Norway 307 232 275 171
United Kingdom 954 975 940 424
Canada 431 442 435 165
Indonesia 275 220 255 72
Other 145 112 126 108
----------- ----------- ----------- ----------
Total consolidated 3,581 3,529 3,510 2,043
Equity affiliates 12 13 12 4
----------- ----------- ----------- ----------
Total Worldwide 3,593 3,542 3,522 2,047
=========== =========== =========== ==========
*Represents quantities available for sale. Excludes gas equivalent of NGL shown above.
Liquefied natural gas sales 140 128 121 122
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
E&P (continued)
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $28.51 26.43 28.87 23.75
Lower 48 28.02 26.00 28.76 24.48
Total U.S. 28.45 26.36 28.85 23.83
International 28.42 25.93 28.27 25.14
Total consolidated 28.43 26.12 28.54 24.38
Equity affiliates 17.86 17.50 18.58 18.41
Total Worldwide 27.24 25.31 27.47 24.07
Natural gas--lease (per MCF)
United States
Alaska 1.88 1.95 1.76 1.85
Lower 48 4.27 3.43 4.76 2.79
Total U.S. 4.13 3.38 4.62 2.75
International 4.03 3.20 3.71 2.79
Total consolidated 4.07 3.27 4.07 2.77
Equity affiliates 3.96 3.00 4.44 2.71
Total Worldwide 4.07 3.27 4.07 2.77
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 54 56 52 19
International 50 45 45 15
Equity affiliates
United States* 110 119 111 119
International 11 10 11 3
---------- ----------- ---------- -----------
225 230 219 156
========== =========== ========== ===========
*Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
Per Barrel
U.S. product prices
Weighted average NGL**
Consolidated $23.14 19.24 22.67 19.07
DEFS 22.76 18.95 22.12 15.92
**Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted
by natural-gas-liquids component and location mix.
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,168 2,166 2,168 1,829
Crude oil runs 2,074 2,004 2,074 1,661
Refinery production 2,270 2,279 2,301 1,847
International*
Crude oil capacity 442 440 442 195
Crude oil runs 381 307 385 152
Refinery production 395 348 412 164
U.S. Petroleum products outside sales
Automotive gasoline 1,365 1,478 1,369 1,230
Distillates 530 692 575 502
Aviation fuels 193 172 180 185
Other products 474 403 492 372
---------- ----------- ---------- --------------------
2,562 2,745 2,616 2,289
International 403 340 430 162
---------- ----------- ---------- --------------------
2,965 3,085 3,046 2,451
========== =========== ========== ====================
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $1.00 0.92 1.05 0.96
Automotive gasoline-retail 1.25 1.02 1.35 1.03
Distillates-wholesale 0.92 0.86 0.92 0.77
*Includes ConocoPhillips' share of equity affiliates.
**Excludes excise taxes.
Exhibit 99.3
SUMMARY OF NET INCOME (LOSS) BY SEGMENT
Millions of Dollars
------------------------------------------------------------------------------
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Income (Loss) from Continuing Operations
Before Accounting Changes
U.S. E&P 155 280 306 415 1,156 678 517 546 491 2,232
International E&P (13) 59 154 393 593 447 560 421 500 1,928
------------------------------------------------------------------------------- ---------------------------------------
Total E&P 142 339 460 808 1,749 1,125 1,077 967 991 4,160
------------------------------------------------------------------------------- ---------------------------------------
Midstream 12 12 11 20 55 31 25 31 43 130
------------------------------------------------------------------------------- ---------------------------------------
U.S. R&M (92) 73 44 113 138 275 248 416 176 1,115
International R&M 5 (5) 13 (8) 5 114 73 69 26 282
------------------------------------------------------------------------------- ---------------------------------------
Total R&M (87) 68 57 105 143 389 321 485 202 1,397
------------------------------------------------------------------------------- ---------------------------------------
Chemicals (11) 7 3 (13) (14) (23) 12 7 11 7
Emerging Businesses (5) (3) (262) (40) (310) (34) (23) (18) (24) (99)
Corporate and Other (149) (111) (343) (322) (925) (225) (316) (223) (238)(1,002)
------------------------------------------------------------------------------- ---------------------------------------
Consolidated (98) 312 (74) 558 698 1,263 1,096 1,249 985 4,593
=============================================================================== =======================================
Cumulative Effect of Accounting Changes
U.S. E&P - - - - - 142 - - - 142
International E&P - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total E&P - - - - - 142 - - - 142
------------------------------------------------------------------------------- ---------------------------------------
Midstream - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
U.S. R&M - - - - - (125) - - - (125)
International R&M - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total R&M - - - - - (125) - - - (125)
------------------------------------------------------------------------------- ---------------------------------------
Chemicals - - - - - - - - - -
Emerging Businesses - - - - - - - - - -
Corporate and Other - - - - - (112) - - - (112)
------------------------------------------------------------------------------- ---------------------------------------
Consolidated - - - - - (95) - - - (95)
=============================================================================== =======================================
Income (Loss) from Discontinued Operations
Corporate and Other (4) 39 (42) (986) (993) 53 91 57 36 237
=============================================================================== =======================================
Net Income (Loss)
U.S. E&P 155 280 306 415 1,156 820 517 546 491 2,374
International E&P (13) 59 154 393 593 447 560 421 500 1,928
------------------------------------------------------------------------------- ---------------------------------------
Total E&P 142 339 460 808 1,749 1,267 1,077 967 991 4,302
------------------------------------------------------------------------------- ---------------------------------------
Midstream 12 12 11 20 55 31 25 31 43 130
------------------------------------------------------------------------------- ---------------------------------------
U.S. R&M (92) 73 44 113 138 150 248 416 176 990
International R&M 5 (5) 13 (8) 5 114 73 69 26 282
------------------------------------------------------------------------------- ---------------------------------------
Total R&M (87) 68 57 105 143 264 321 485 202 1,272
------------------------------------------------------------------------------- ---------------------------------------
Chemicals (11) 7 3 (13) (14) (23) 12 7 11 7
Emerging Businesses (5) (3) (262) (40) (310) (34) (23) (18) (24) (99)
Corporate and Other (153) (72) (385) (1,308)(1,918) (284) (225) (166) (202) (877)
------------------------------------------------------------------------------- ---------------------------------------
Consolidated (102) 351 (116) (428) (295) 1,221 1,187 1,306 1,021 4,735
=============================================================================== =======================================
Page 1 of 13
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
Millions of Dollars
------------------------------------------------------------------------------
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Income from Continuing Operations
Before Income Taxes
U.S. E&P 223 419 450 536 1,628 1,050 803 853 757 3,463
International E&P 167 260 555 949 1,931 1,260 967 1,029 941 4,197
------------------------------------------------------------------------------- ---------------------------------------
Total E&P 390 679 1,005 1,485 3,559 2,310 1,770 1,882 1,698 7,660
------------------------------------------------------------------------------- ---------------------------------------
Midstream 20 20 23 35 98 51 42 50 70 213
------------------------------------------------------------------------------- ---------------------------------------
U.S. R&M (140) 118 75 175 228 453 396 639 279 1,767
International R&M 5 (5) 19 (25) (6) 150 94 86 16 346
------------------------------------------------------------------------------- ---------------------------------------
Total R&M (135) 113 94 150 222 603 490 725 295 2,113
------------------------------------------------------------------------------- ---------------------------------------
Chemicals (18) 3 (1) (16) (32) (44) 15 10 14 (5)
Emerging Businesses (8) (5) (274) (62) (349) (51) (34) (29) (36) (150)
Corporate and Other (198) (153) (535) (471)(1,357) (300) (502) (328) (364)(1,494)
------------------------------------------------------------------------------- ---------------------------------------
Consolidated 51 657 312 1,121 2,141 2,569 1,781 2,310 1,677 8,337
=============================================================================== =======================================
Income from Continuing Operations
Effective Tax Rates
U.S. E&P 30.5% 33.2% 32.0% 22.6% 29.0% 35.4% 35.6% 36.0% 35.1% 35.5%
International E&P 107.8% 77.3% 72.3% 58.6% 69.3% 64.5% 42.1% 59.1% 46.9% 54.1%
------------------------------------------------------------------------------- ---------------------------------------
Total E&P 63.6% 50.1% 54.2% 45.6% 50.9% 51.3% 39.2% 48.6% 41.6% 45.7%
------------------------------------------------------------------------------- ---------------------------------------
Midstream 40.0% 40.0% 52.2% 42.9% 43.9% 39.2% 40.5% 38.0% 38.6% 39.0%
------------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 34.3% 38.1% 41.3% 35.4% 39.5% 39.3% 37.4% 34.9% 36.9% 36.9%
International R&M 0.0% 0.0% 31.6% 68.0% 183.3% 24.0% 22.3% 19.8% -62.5% 18.5%
------------------------------------------------------------------------------- ---------------------------------------
Total R&M 35.6% 39.8% 39.4% 30.0% 35.6% 35.5% 34.5% 33.1% 31.5% 33.9%
------------------------------------------------------------------------------- ---------------------------------------
Chemicals 38.9% -133.3% 400.0% 18.8% 56.3% 47.7% 20.0% 30.0% 21.4% 240.0%
Emerging Businesses 37.5% 40.0% 4.4% 35.5% 11.2% 33.3% 32.4% 37.9% 33.3% 34.0%
Corporate and Other 24.7% 27.5% 35.9% 31.6% 31.8% 25.0% 37.1% 32.0% 34.6% 32.9%
------------------------------------------------------------------------------- ---------------------------------------
Consolidated 292.2% 52.5% 123.7% 50.2% 67.4% 50.8% 38.5% 45.9% 41.3% 44.9%
=============================================================================== =======================================
Page 2 of 13
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX)
Millions of Dollars
------------------------------------------------------------------------------
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
U.S. E&P
Gain (loss) on asset sales - - - - - - 16 65 - 81
Property impairments - (3) (5) - (8) - (14) (10) (18) (42)
Pending claims and settlements - - - - - - (20) - - (20)
------------------------------------------------------------------------------- ---------------------------------------
Total - (3) (5) - (8) - (18) 55 (18) 19
------------------------------------------------------------------------------- ---------------------------------------
International E&P
Gain (loss) on asset sales - - - 17 17 - - 33 - 33
Property impairments (7) (3) - (14) (24) (12) (32) - (18) (62)
U.K. tax law change - - (24) - (24) - - - - -
Canada tax law change - - - - - - - - 95 95
Norway Removal Grant Act (1986) repeal* - - - - - - 87 - - 87
Bayu-Undan ownership realignment - - - - - - 51 - - 51
Angola leasehold impairment (77) - - - (77) - - - 12 12
------------------------------------------------------------------------------- ---------------------------------------
Total (84) (3) (24) 3 (108) (12) 106 33 89 216
------------------------------------------------------------------------------- ---------------------------------------
Total E&P (84) (6) (29) 3 (116) (12) 88 88 71 235
------------------------------------------------------------------------------- ---------------------------------------
Midstream
- - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
U.S. R&M
Gain (loss) on asset sales - - - - - - - - - -
Property impairments - - - (83) (83) - - - (1) (1)
Other - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total - - - (83) (83) - - - (1) (1)
------------------------------------------------------------------------------- ---------------------------------------
International R&M
Gain (loss) on asset sales - - - - - - - - - -
Property impairments - - - - - - - - - -
Other - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total R&M - - - (83) (83) - - - (1) (1)
------------------------------------------------------------------------------- ---------------------------------------
Chemicals
- - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Emerging Businesses
Write-off of in-process R&D - - (246) - (246) - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total - - (246) - (246) - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Corporate and Other
Insurance demutualization benefits - - - - - 34 - - - 34
Property impairments - - - - - - (3) - - (3)
Merger-related expenses (2) (1) (221) (83) (307) (27) (115) (41) (40) (223)
Premium on early debt retirement - (15) - (1) (16) (10) (9) - (34) (53)
Other - - - - - - - - - -
------------------------------------------------------------------------------- ---------------------------------------
Total (2) (16) (221) (84) (323) (3) (127) (41) (74) (245)
------------------------------------------------------------------------------- ---------------------------------------
Total Company (86) (22) (496) (164) (768) (15) (39) 47 (4) (11)
=======================================================================================================================
* Net of $21 million of property impairments.
Page 3 of 13
CASH FLOW INFORMATION
Millions of Dollars
------------------------------------------------------------------------------
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Cash Flows from Operating Activities
Income (loss) from continuing
operations (98) 312 (74) 558 698 1,263 1,096 1,249 985 4,593
DD&A and property impairments 406 403 556 1,035 2,400 887 1,003 876 971 3,737
Dry hole costs and leasehold
impairments 109 32 20 146 307 40 54 75 131 300
Accretion on discounted liabilities 5 6 6 5 22 33 35 39 38 145
In-process R&D write-off - - 246 - 246 - - - - -
Deferred taxes (81) 146 (20) 97 142 243 10 80 84 417
Undistributed equity earnings 23 6 (57) 46 18 18 (66) (143) 132 (59)
Net (gain) loss on asset dispositions - (3) 11 (15) (7) (56) (28) (142) 15 (211)
Other 125 (30) (18) (109) (32) 58 (97) (87) (264) (390)
Net working capital changes 84 (385) 1,137 146 982 636 16 51 (79) 624
Discontinued operations 7 43 68 84 202 - 120 61 8 189
------------------------------------------------------------------------------- ---------------------------------------
Net Cash Provided by
Operating Activities 580 530 1,875 1,993 4,978 3,122 2,143 2,059 2,021 9,345
------------------------------------------------------------------------------- ---------------------------------------
Cash Flows from Investing Activities
Capital expenditures and investments:
E&P (517) (701) (715) (1,343)(3,276) (1,012) (1,167) (1,109) (1,209)(4,497)
Midstream - (1) (1) (3) (5) (2) (2) (2) (4) (10)
R&M (104) (129) (192) (415) (840) (203) (245) (302) (429)(1,179)
Chemicals (10) (9) (10) (31) (60) - - - - -
Emerging Businesses - - (35) (87) (122) (66) (98) (60) (60) (284)
Corporate and Other (14) (34) (7) (30) (85) (25) (45) (47) (71) (188)
------------------------------------------------------------------------------- ---------------------------------------
Total capital expend. & investments (645) (874) (960) (1,909)(4,388) (1,308) (1,557) (1,520) (1,773)(6,158)
Acquisitions, net of cash acquired - - 1,242 (62) 1,180 - - - - -
Acquisitions - adoption of FIN 46 - - - - - 225 - - - 225
Proceeds from asset dispositions 45 36 19 715 815 125 466 913 1,155 2,659
Long-term advances to affiliates and
other investments (12) 14 (83) (11) (92) (28) (8) 38 21 23
Discontinued operations (12) (12) (22) (53) (99) (26) (5) (28) (177) (236)
------------------------------------------------------------------------------- ---------------------------------------
Net Cash Used for Investing Activities (624) (836) 196 (1,320)(2,584) (1,012) (1,104) (597) (774)(3,487)
------------------------------------------------------------------------------- ---------------------------------------
Cash Flows from Financing Activities
Net issuance (repayment) of debt 204 725 (1,432) (587)(1,090) (1,569) (709) (1,514) (1,019)(4,811)
Redemption of preferred stock - (300) - - (300) - - - - -
Dividends (138) (137) (138) (271) (684) (271) (272) (272) (292)(1,107)
Other 7 (7) (131) (15) (146) 11 33 84 91 219
------------------------------------------------------------------------------- ---------------------------------------
Net Cash Provided by (Used for)
Financing Activities 73 281 (1,701) (873)(2,220) (1,829) (948) (1,702) (1,220)(5,699)
------------------------------------------------------------------------------- ---------------------------------------
Effect of Exchange Rate Changes (1) - 2 (10) (9) 55 16 (27) (20) 24
------------------------------------------------------------------------------- ---------------------------------------
Net Change in Cash
and Cash Equivalents 28 (25) 372 (210) 165 336 107 (267) 7 183
Cash and cash equivalents
at beginning of period 142 170 145 517 142 307 643 750 483 307
------------------------------------------------------------------------------- ---------------------------------------
Cash and Cash Equivalents
at End of Period 170 145 517 307 307 643 750 483 490 490
=============================================================================== =======================================
Page 4 of 13
TOTAL E&P
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
E&P Net Income ($ Millions) 142 339 460 808 1,749 1,267 1,077 967 991 4,302
=============================================================================== =======================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 833 798 1,046 1,623 1,077 1,626 1,641 1,561 1,611 1,609
------------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated 566 546 620 854 647 880 850 793 806 832
Equity affiliates 5 4 44 87 35 55 117 120 116 102
------------------------------------------------------------------------------- ---------------------------------------
Total 571 550 664 941 682 935 967 913 922 934
=============================================================================== =======================================
Sales of crude oil produced (MB/D) 566 557 664 918 677 911 996 917 921 936
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D) 37 34 43 70 46 71 72 62 72 69
-----------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 1,349 1,286 1,982 3,529 2,043 3,605 3,485 3,373 3,581 3,510
Equity affiliates - - 4 13 4 12 11 11 12 12
------------------------------------------------------------------------------- ---------------------------------------
Total 1,349 1,286 1,986 3,542 2,047 3,617 3,496 3,384 3,593 3,522
=============================================================================== =======================================
Canadian Syncrude (MB/D) - - 8 22 8 17 19 22 18 19
------------------------------------------------------------------------------- ---------------------------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 21.56 26.27 28.31 28.20 26.09 34.06 29.02 30.18 31.17 31.11
Brent dated 21.14 25.04 26.94 26.78 24.98 31.51 26.03 28.41 29.42 28.84
Natural Gas--Henry Hub 1st of month
($/mcf) 2.34 3.38 3.16 3.97 3.21 6.58 5.40 4.97 4.60 5.39
------------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated 19.41 24.46 26.38 26.12 24.38 31.27 26.33 28.15 28.43 28.54
Equity affiliates 15.86 21.06 20.29 17.50 18.41 20.97 16.85 19.90 17.86 18.58
Total 19.37 24.44 25.97 25.31 24.07 30.73 25.19 27.00 27.24 27.47
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl) 16.00 20.36 19.42 19.32 18.93 24.65 19.73 20.10 23.36 21.95
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated 2.15 2.40 2.49 3.27 2.77 4.49 3.92 3.80 4.07 4.07
Equity affiliates - - 1.78 3.00 2.71 4.82 4.89 4.12 3.96 4.44
Total 2.15 2.40 2.49 3.27 2.77 4.49 3.93 3.80 4.07 4.07
------------------------------------------------------------------------------- ---------------------------------------
Exploration Charges ($ Millions)
Dry Holes 16 17 4 124 161 20 30 39 77 166
Lease Impairments 93 16 15 22 146 20 24 36 53 133
------------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 109 33 19 146 307 40 54 75 130 299
Other (G&G and Lease Rentals) 54 34 66 131 285 76 88 57 81 302
------------------------------------------------------------------------------- ---------------------------------------
Total Exploration Charges 163 67 85 277 592 116 142 132 211 601
=============================================================================== =======================================
Depreciation, Depletion & Amortization
Producing operations ($ Millions) 274 278 398 666 1,616 643 630 636 666 2,575
------------------------------------------------------------------------------- ---------------------------------------
Page 5 of 13
U.S. E&P
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
U.S. E&P Net Income ($ Millions) 155 280 306 415 1,156 820 517 546 491 2,374
=============================================================================== =======================================
Alaska ($ Millions) 123 223 246 278 870 508 302 302 333 1,445
------------------------------------------------------------------------------- ---------------------------------------
Lower 48 ($ Millions) 32 57 60 137 286 312 215 244 158 929
------------------------------------------------------------------------------- ---------------------------------------
Production
Total U.S. (MBOE/D) 564 538 562 684 587 700 683 651 664 674
------------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Alaska 353 339 310 323 331 337 331 314 318 325
Lower 48 33 31 38 58 40 60 57 51 50 54
------------------------------------------------------------------------------- ---------------------------------------
Total 386 370 348 381 371 397 388 365 368 379
=============================================================================== =======================================
Sales of crude oil produced (MB/D) 383 374 360 370 372 391 389 369 372 380
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D)*
Alaska 27 25 21 24 24 26 23 19 24 23
Lower 48 1 1 9 21 8 22 26 25 27 25
------------------------------------------------------------------------------- ---------------------------------------
Total 28 26 30 45 32 48 49 44 51 48
=============================================================================== =======================================
*Includes reinjection volumes sold
lease-to-lease: 15 14 13 15 14 15 14 13 16 15
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas (MMCF/D)
Alaska 168 160 183 186 175 189 162 180 205 184
Lower 48 734 689 922 1,362 928 1,338 1,311 1,271 1,264 1,295
------------------------------------------------------------------------------- ---------------------------------------
Total 902 849 1,105 1,548 1,103 1,527 1,473 1,451 1,469 1,479
=============================================================================== =======================================
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Alaska
North Slope 13.58 18.96 20.42 21.10 18.42 25.95 21.70 22.82 23.17 23.41
------------------------------------------------------------------------------- ---------------------------------------
West Coast 18.72 24.40 25.83 26.43 23.75 31.47 27.19 28.31 28.51 28.87
------------------------------------------------------------------------------- ---------------------------------------
Lower 48 18.86 24.53 26.87 26.00 24.48 31.48 27.34 27.94 28.02 28.76
------------------------------------------------------------------------------- ---------------------------------------
Total U.S. 18.73 24.41 25.94 26.36 23.83 31.47 27.21 28.26 28.45 28.85
------------------------------------------------------------------------------- ---------------------------------------
. . . .
Natural Gas Liquids ($/bbl)
Alaska 18.67 24.40 25.68 26.48 23.48 31.32 27.24 28.42 28.82 29.04
------------------------------------------------------------------------------- ---------------------------------------
Lower 48 12.75 16.74 14.62 16.17 15.66 22.13 17.77 19.71 20.81 20.02
------------------------------------------------------------------------------- ---------------------------------------
Total U.S. 18.13 23.61 20.17 19.27 20.00 24.96 20.25 21.31 22.85 22.30
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Alaska 2.13 1.80 1.58 1.95 1.85 1.97 1.88 1.33 1.88 1.76
------------------------------------------------------------------------------- ---------------------------------------
Lower 48 1.99 2.56 2.65 3.43 2.79 5.47 4.72 4.56 4.27 4.76
------------------------------------------------------------------------------- ---------------------------------------
Total U.S. 1.99 2.51 2.60 3.38 2.75 5.34 4.58 4.41 4.13 4.62
------------------------------------------------------------------------------- ---------------------------------------
Kenai, Alaska LNG Sales
Volume (MMCF/D) 117 114 128 128 122 130 91 121 140 121
------------------------------------------------------------------------------- ---------------------------------------
Sales price per MCF 4.00 3.74 4.21 4.30 4.07 4.38 4.56 4.46 4.44 4.45
------------------------------------------------------------------------------- ---------------------------------------
U.S. Exploration Charges ($ Millions)
Dry Holes 14 3 1 61 79 16 3 9 47 75
Lease Impairments 13 12 10 14 49 13 12 10 12 47
------------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 27 15 11 75 128 29 15 19 59 122
Other (G&G and Lease Rentals) 17 10 20 39 86 28 22 23 9 82
------------------------------------------------------------------------------- ---------------------------------------
Total U.S. Exploration Charges 44 25 31 114 214 57 37 42 68 204
=============================================================================== =======================================
Alaska Only 27 12 11 45 95 25 10 11 9 55
------------------------------------------------------------------------------- ---------------------------------------
Depreciation, Depletion & Amortization
Producing Operations ($ Millions)
Alaska 156 157 136 140 589 113 124 118 113 468
Lower 48 54 48 93 149 344 148 148 153 133 582
------------------------------------------------------------------------------- ---------------------------------------
Total U.S. 210 205 229 289 933 261 272 271 246 1,050
=============================================================================== =======================================
Page 6 of 13
INTERNATIONAL E&P
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
International E&P
Net Income (Loss) ($ Millions) (13) 59 154 393 593 447 560 421 500 1,928
=============================================================================== =======================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 269 261 484 939 490 926 958 910 947 935
------------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated
Norway 118 119 156 233 157 226 214 207 205 213
United Kingdom 17 18 35 86 39 87 82 67 72 77
Canada 1 1 14 37 13 33 31 29 28 30
Nigeria 27 23 29 38 29 38 39 36 35 37
China 13 11 12 11 12 23 27 25 28 26
Indonesia - - 6 13 5 21 17 16 10 16
Other 4 4 20 55 21 55 52 48 60 54
Equity affiliates 5 4 44 87 35 55 117 120 116 102
------------------------------------------------------------------------------- ---------------------------------------
Total 185 180 316 560 311 538 579 548 554 555
=============================================================================== =======================================
Sales of crude oil produced (MB/D) 183 183 304 548 306 520 607 548 549 556
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D)
Norway 5 4 6 7 6 8 7 7 8 7
Canada - - 3 14 4 11 11 9 10 10
Other 4 4 4 4 4 4 5 2 3 4
------------------------------------------------------------------------------- ---------------------------------------
Total 9 8 13 25 14 23 23 18 21 21
=============================================================================== =======================================
Natural Gas (MMCF/D)
Consolidated
Norway 135 131 183 232 171 305 273 216 307 275
United Kingdom 173 189 349 975 424 1,002 952 853 954 940
Canada 19 22 172 442 165 436 424 448 431 435
Indonesia - - 68 220 72 224 246 275 275 255
Other 120 95 105 112 108 111 117 130 145 126
Equity affiliates - - 4 13 4 12 11 11 12 12
------------------------------------------------------------------------------- ---------------------------------------
Total 447 437 881 1,994 944 2,090 2,023 1,933 2,124 2,043
=============================================================================== =======================================
Canadian Syncrude (MB/D) - - 8 22 8 17 19 22 18 19
------------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
Norway 21.04 24.49 27.19 26.35 25.21 32.72 26.28 29.08 29.08 29.24
United Kingdom 21.21 24.14 26.88 25.98 25.33 30.11 24.34 28.32 28.29 27.70
Canada 20.03 24.85 27.20 21.26 22.87 28.40 23.61 24.15 23.71 25.06
Nigeria 21.14 24.95 27.51 26.97 25.37 31.94 26.35 28.48 29.72 28.99
China 19.57 25.27 26.31 29.64 25.03 28.87 26.51 26.38 28.56 27.55
Indonesia - - 24.89 30.59 28.10 29.35 24.54 26.32 26.52 26.88
Other 15.00 25.18 25.75 25.18 24.94 29.10 25.38 26.58 27.80 27.25
Equity affiliates 15.86 21.06 20.29 17.50 18.41 20.97 16.85 19.90 17.86 18.58
Total 20.71 24.51 26.01 24.60 24.36 30.17 23.90 26.15 26.42 26.53
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl)
Norway 12.88 15.48 15.64 20.69 16.51 21.85 18.13 18.50 22.96 20.27
Canada - - 29.12 18.42 20.39 26.11 20.78 23.55 25.27 23.93
Other 12.58 13.29 13.74 20.51 15.29 23.40 16.73 14.18 25.13 16.48
Total 12.76 14.58 18.42 19.39 17.47 24.22 18.96 18.23 24.35 21.39
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated
Norway 3.22 3.02 3.16 3.33 3.20 3.66 3.86 4.21 4.09 3.94
United Kingdom 3.18 2.55 2.22 3.20 2.92 3.55 3.17 2.88 4.48 3.54
Canada 2.23 2.21 2.32 3.37 3.03 5.42 4.34 4.17 4.02 4.48
Indonesia - - 4.18 4.11 4.12 4.66 4.16 4.35 4.21 4.33
Other 0.41 0.39 0.41 0.45 0.42 0.48 0.48 0.50 0.61 0.52
Equity affiliates - - 1.78 3.00 2.71 4.82 4.89 4.12 3.96 4.44
Total 2.41 2.20 2.37 3.20 2.79 3.92 3.48 3.38 4.03 3.71
------------------------------------------------------------------------------- ---------------------------------------
International Exploration Charges ($ Millions)
Dry Holes 2 14 3 63 82 4 27 30 30 91
Lease Impairments 80 4 5 8 97 7 12 26 41 86
------------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 82 18 8 71 179 11 39 56 71 177
Other (G&G and Lease Rentals) 37 24 46 92 199 48 66 34 72 220
------------------------------------------------------------------------------- ---------------------------------------
Total International Exploration Charges 119 42 54 163 378 59 105 90 143 397
=============================================================================== =======================================
Depreciation, Depletion & Amortization
Producing operations ($ Millions) 64 73 169 377 683 383 358 364 420 1,525
------------------------------------------------------------------------------- ---------------------------------------
Page 7 of 13
R&M
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
R&M Net Income (Loss) ($ Millions) (87) 68 57 105 143 264 321 485 202 1,272
=============================================================================== =======================================
United States ($ Millions) (92) 73 44 113 138 150 248 416 176 990
------------------------------------------------------------------------------- ---------------------------------------
International ($ Millions) 5 (5) 13 (8) 5 114 73 69 26 282
------------------------------------------------------------------------------- ---------------------------------------
Market Indicators
U.S. East Coast Crack Spread ($/bbl) 2.90 2.86 3.06 4.58 3.35 6.16 3.46 6.37 4.98 5.24
U.S. Gulf Coast Crack Spread ($/bbl) 2.78 3.70 2.79 3.74 3.25 5.64 3.65 5.38 3.72 4.60
U.S. Group Central Crack Spread ($/bbl) 3.88 5.07 5.16 5.69 4.95 6.12 6.96 8.32 5.34 6.69
U.S. West Coast Crack Spread ($/bbl) 9.67 9.53 8.58 8.40 9.04 12.79 11.39 14.00 11.44 12.41
U.S. Weighted 3:2:1 Crack Spread ($/bbl) 4.49 5.01 4.60 5.24 4.83 6.99 5.86 7.84 5.67 6.59
NW Europe Crack Spread ($/bbl) 0.74 1.38 1.70 2.72 1.64 5.68 3.17 3.11 3.20 3.79
------------------------------------------------------------------------------- ---------------------------------------
Realized Margins
Refining Margin ($/bbl)
U.S. n/a n/a n/a 5.07 n/a 6.50 5.34 6.39 5.58 5.94
International n/a n/a n/a 2.96 n/a 6.00 3.67 4.38 3.61 4.44
------------------------------------------------------------------------------- ---------------------------------------
Marketing Margin ($/gal)
U.S. n/a n/a n/a 0.04 n/a 0.04 0.06 0.05 0.04 0.05
International n/a n/a n/a 0.16 n/a 0.17 0.22 0.19 0.15 0.18
------------------------------------------------------------------------------- ---------------------------------------
Depreciation, Depletion &
Amortization ($ Millions) 102 98 119 167 486 167 174 174 176 691
------------------------------------------------------------------------------- ---------------------------------------
Turnaround Expense ($ Millions) 71 29 47 29 176 60 38 19 63 180
------------------------------------------------------------------------------- ---------------------------------------
Consolidated
EASTERN U.S.
Charge Barrels Input (MB/D)
Crude Oil 348 404 338 399 372 415 435 428 421 425
Other Feed and Blending Stocks 53 47 16 61 44 51 53 40 21 41
------------------------------------------------------------------------------- ---------------------------------------
Total 401 451 354 460 416 466 488 468 442 466
=============================================================================== =======================================
Percentage Utilization 81% 94% 79% 93% 87% 97% 101% 100% 98% 99%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 214 247 187 260 227 244 249 243 247 245
Distillates 111 114 88 116 107 138 131 117 108 124
Aviation Fuel 35 37 37 37 36 32 29 37 40 34
Other 46 52 36 51 47 55 85 75 43 65
------------------------------------------------------------------------------- ---------------------------------------
Total 406 450 348 464 417 469 494 472 438 468
=============================================================================== =======================================
U.S. GULF COAST
Charge Barrels Input (MB/D)
Crude Oil 414 428 509 652 501 668 702 708 680 690
Other Feed and Blending Stocks 80 67 87 101 85 103 95 95 102 98
------------------------------------------------------------------------------- ---------------------------------------
Total 494 495 596 753 586 771 797 803 782 788
=============================================================================== =======================================
Percentage Utilization 90% 92% 93% 91% 92% 93% 98% 99% 95% 96%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 213 211 236 300 240 289 277 288 264 280
Distillates 146 144 172 247 177 242 249 265 250 251
Aviation Fuel 37 39 52 62 48 70 63 71 68 68
Other 102 116 148 181 137 221 242 228 234 231
------------------------------------------------------------------------------- ---------------------------------------
Total 498 510 608 790 602 822 831 852 816 830
=============================================================================== =======================================
CENTRAL U.S.
Charge Barrels Input (MB/D)
Crude Oil 348 424 466 633 469 631 663 618 639 638
Other Feed and Blending Stocks 34 32 39 46 37 32 24 33 35 31
------------------------------------------------------------------------------- ---------------------------------------
Total 382 456 505 679 506 663 687 651 674 669
=============================================================================== =======================================
Percentage Utilization 84% 98% 90% 92% 91% 92% 96% 90% 93% 93%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 200 235 269 389 274 367 375 367 379 372
Distillates 64 74 76 148 91 144 152 123 141 140
Aviation Fuel 50 49 58 64 55 59 57 64 61 60
Other 61 98 99 91 87 96 110 102 92 100
------------------------------------------------------------------------------- ---------------------------------------
Total 375 456 502 692 507 666 694 656 673 672
=============================================================================== =======================================
n/a = not available.
Page 8 of 13
R&M (continued)
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
WESTERN U.S.
Charge Barrels Input (MB/D)
Crude Oil 306 320 330 320 319 294 328 329 334 321
Other Feed and Blending Stocks (3) 16 13 16 11 9 13 12 16 13
------------------------------------------------------------------------------- ---------------------------------------
Total 303 336 343 336 330 303 341 341 350 334
=============================================================================== =======================================
Percentage Utilization 92% 96% 99% 96% 96% 88% 99% 99% 100% 96%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 137 148 175 174 159 160 176 172 171 170
Distillates 71 77 78 81 77 66 83 86 92 82
Aviation Fuel 27 31 33 30 30 29 24 28 26 27
Other 61 60 51 48 55 42 55 56 54 52
------------------------------------------------------------------------------- ---------------------------------------
Total 296 316 337 333 321 297 338 342 343 331
=============================================================================== =======================================
TOTAL UNITED STATES
Charge Barrels Input (MB/D)
Crude Oil 1,416 1,576 1,643 2,004 1,661 2,008 2,128 2,083 2,074 2,074
Other Feed and Blending Stocks 164 162 155 224 177 195 185 180 174 183
------------------------------------------------------------------------------- ---------------------------------------
Total 1,580 1,738 1,798 2,228 1,838 2,203 2,313 2,263 2,248 2,257
=============================================================================== =======================================
Percentage Utilization 86% 95% 90% 93% 91% 93% 98% 96% 96% 96%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 764 841 867 1,123 900 1,060 1,077 1,070 1,061 1,067
Distillates 392 409 414 592 452 590 615 591 591 597
Aviation Fuel 149 156 180 193 169 190 173 200 195 189
Other 270 326 334 371 326 414 492 461 423 448
------------------------------------------------------------------------------- ---------------------------------------
Total 1,575 1,732 1,795 2,279 1,847 2,254 2,357 2,322 2,270 2,301
=============================================================================== =======================================
UNITED KINGDOM and IRELAND
Charge Barrels Input (MB/D)
Crude Oil 65 67 126 177 109 262 244 258 253 254
Other Feed and Blending Stocks - - 15 30 11 39 42 38 27 37
------------------------------------------------------------------------------- ---------------------------------------
Total 65 67 141 207 120 301 286 296 280 291
=============================================================================== =======================================
Percentage Utilization 90% 92% 85% 58% 73% 86% 80% 84% 83% 83%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 15 16 42 64 34 99 91 99 85 93
Distillates 26 26 56 76 46 125 118 128 100 118
Aviation Fuel - - 4 6 3 14 7 10 12 11
Other 21 21 32 77 38 54 59 45 71 57
------------------------------------------------------------------------------- ---------------------------------------
Total 62 63 134 223 121 292 275 282 268 279
=============================================================================== =======================================
Equity Affiliates - Net Share
International*
Charge Barrels Input (MB/D)
Crude Oil - - 42 130 43 134 132 129 128 131
Other Feed and Blending Stocks - - 1 3 1 2 3 5 3 3
------------------------------------------------------------------------------- ---------------------------------------
Total - - 43 133 44 136 135 134 131 134
=============================================================================== =======================================
Percentage Utilization - - 95% 95% 95% 98% 97% 95% 94% 96%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline - - 13 41 14 43 41 40 40 41
Distillates - - 18 58 19 58 59 57 54 57
Aviation Fuel - - 4 7 3 10 8 9 9 9
Other - - 9 19 7 33 24 25 24 26
------------------------------------------------------------------------------- ---------------------------------------
Total - - 44 125 43 144 132 131 127 133
=============================================================================== =======================================
* Represents 18.75 percent interest in a refinery complex at Karlsruhe, Germany; 16.33 percent interest in two
refineries in Kralupy and Litvinov, Czech Republic; and 47 percent interest in a refinery at Melaka, Malaysia.
Page 9 of 13
R&M (continued)
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Worldwide - Including Share of Equity Affiliates
Charge Barrels Input (MB/D)
Crude Oil 1,481 1,643 1,811 2,311 1,813 2,404 2,504 2,470 2,455 2,459
Other Feed and Blending Stocks 164 162 171 257 189 236 230 223 204 223
------------------------------------------------------------------------------- ---------------------------------------
Total 1,645 1,805 1,982 2,568 2,002 2,640 2,734 2,693 2,659 2,682
=============================================================================== =======================================
Percentage Utilization 86% 95% 90% 89% 90% 92% 96% 95% 94% 94%
------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 779 857 922 1,228 948 1,202 1,209 1,209 1,186 1,201
Distillates 418 435 488 726 517 773 792 776 745 772
Aviation Fuel 149 156 188 206 175 214 188 219 216 209
Other 291 347 375 467 371 501 575 531 518 531
------------------------------------------------------------------------------- ---------------------------------------
Total 1,637 1,795 1,973 2,627 2,011 2,690 2,764 2,735 2,665 2,713
=============================================================================== =======================================
U.S. PETROLEUM PRODUCTS SALES (MB/D)*
Gasoline 1,084 1,159 1,195 1,478 1,230 1,331 1,381 1,398 1,365 1,369
Distillates 439 424 449 692 502 600 590 580 530 575
Aviation Fuel 162 185 219 172 185 164 164 197 193 180
Other 398 341 350 403 372 509 493 497 474 492
------------------------------------------------------------------------------- ---------------------------------------
Total 2,083 2,109 2,213 2,745 2,289 2,604 2,628 2,672 2,562 2,616
=============================================================================== =======================================
*2002 amounts restated.
INTERNATIONAL PETROLEUM PRODUCTS SALES (MB/D)
Gasoline 12 12 78 163 67 202 190 181 171 186
Distillates 20 21 84 147 69 181 199 192 172 186
Aviation Fuel - - 2 6 2 5 7 14 7 8
Other 22 17 37 24 24 40 52 54 53 50
------------------------------------------------------------------------------- ---------------------------------------
Total 54 50 201 340 162 428 448 441 403 430
=============================================================================== =======================================
SPECIALTIES
Base Oil Production(MB/D)
United States - Equity Affiliate - - 3 10 3 10 7 11 11 10
------------------------------------------------------------------------------- ---------------------------------------
Petroleum Coke Sales (MMT)*
United States
Fuel coke 297 311 500 565 1,673 683 653 653 640 2,629
Specialty coke 56 57 196 292 601 276 282 253 290 1,101
------------------------------------------------------------------------------- ---------------------------------------
International
Fuel coke - - 12 54 66 57 50 35 50 192
Specialty coke - - 68 180 248 176 180 171 128 655
------------------------------------------------------------------------------- ---------------------------------------
Finished Lubes Sales (MB/D)*
United States 8 9 9 10 9 11 10 11 10 10
------------------------------------------------------------------------------- ---------------------------------------
International - - - 1 - 1 - 1 1 1
------------------------------------------------------------------------------- ---------------------------------------
*Included in "Other" in the petroleum products sales statistics above.
Page 10 of 13
MIDSTREAM
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Midstream Net Income ($ Millions) 12 12 11 20 55 31 25 31 43 130
=============================================================================== =======================================
U.S. Equity Affiliate ($ Millions)* 5 7 6 5 23 13 23 18 18 72
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States - - 19 56 19 51 53 50 54 52
International - - 15 45 15 47 35 47 50 45
Equity Affiliates
United States* 117 119 119 119 119 114 110 111 110 111
International - - 3 10 3 10 11 12 11 11
------------------------------------------------------------------------------- ---------------------------------------
Total 117 119 156 230 156 222 209 220 225 219
=============================================================================== =======================================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
Natural Gas Liquids Fractionated (MB/D)
United States 107 104 139 179 133 168 158 172 168 167
------------------------------------------------------------------------------- ---------------------------------------
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated - - 18.57 19.24 19.07 25.59 20.99 20.94 23.14 22.67
DEFS 12.83 15.59 16.32 18.95 15.92 24.53 20.53 20.67 22.76 22.12
------------------------------------------------------------------------------- ---------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas
liquids component and location mix.
Depreciation, Depletion &
Amortization ($ Millions) 1 - 5 13 19 14 14 13 13 54
------------------------------------------------------------------------------- ---------------------------------------
EMERGING BUSINESSES
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Emerging Businesses
Net Income (Loss) ($ Millions)* (5) (3) (262) (40) (310) (34) (23) (18) (24) (99)
=============================================================================== =======================================
Detail of Net Income (Loss) ($ Millions)
Technology Solutions (5) (3) (4) (4) (16) (5) (6) (5) (4) (20)
Gas-to-Liquids* - - (253) (20) (273) (20) (13) (7) (10) (50)
Power - - (1) (2) (3) 1 (1) (3) (2) (5)
Other - - (4) (14) (18) (10) (3) (3) (8) (24)
------------------------------------------------------------------------------- ---------------------------------------
Total (5) (3) (262) (40) (310) (34) (23) (18) (24) (99)
=============================================================================== =======================================
* Third quarter 2002 results include a $246 million write down of acquired in-process R&D.
CORPORATE AND OTHER
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Corporate and Other
Net Income (Loss) ($ Millions) (153) (72) (385) (1,308)(1,918) (284) (225) (166) (202) (877)
=============================================================================== =======================================
Detail of Net Income (Loss) ($ Millions)
Net interest expense (78) (91) (83) (160) (412) (190) (145) (134) (163) (632)
Corporate overhead (47) (27) (32) (67) (173) (30) (43) (33) (67) (173)
Discontinued operations (4) 39 (42) (986) (993) 53 91 57 36 237
Merger-related costs (2) (1) (221) (83) (307) (27) (115) (41) (40) (223)
Accounting change - - - - - (112) - - - (112)
Other (22) 8 (7) (12) (33) 22 (13) (15) 32 26
------------------------------------------------------------------------------- ---------------------------------------
Total (153) (72) (385) (1,308)(1,918) (284) (225) (166) (202) (877)
=============================================================================== =======================================
Before-Tax Net Interest Expense ($ Millions)
Interest and financing expense (158) (157) (193) (291) (799) (339) (306) (314) (287)(1,246)
Capitalized interest 51 51 59 72 233 73 78 98 77 326
Interest revenue 4 2 13 21 40 29 31 27 17 104
Premium on early debt retirement - (21) - (3) (24) (12) (11) - (45) (68)
------------------------------------------------------------------------------- ---------------------------------------
(103) (125) (121) (201) (550) (249) (208) (189) (238) (884)
=============================================================================== =======================================
Debt
Total Debt ($ Millions)* 8,902 9,635 20,453 19,766 19,766 21,007 20,254 18,739 17,780 17,780
Debt-to-Capital Ratio* 38% 39% 40% 39% 39% 40% 38% 36% 34% 34%
------------------------------------------------------------------------------- ---------------------------------------
* 2003 amounts reflect the January 1, 2003, adoption of FIN 46.
Page 11 of 13
SELECTED PRO FORMA STATISTICS (E&P)
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
E&P
E&P Production
Total Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 1,676 1,619 1,546 1,623 1,616 1,626 1,641 1,561 1,611 1,609
------------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated
U.S. 424 406 370 381 395 397 388 365 368 379
Norway 200 208 219 233 215 226 214 207 205 213
United Kingdom 81 78 63 86 77 87 82 67 72 77
Canada 46 45 42 37 42 33 31 29 28 30
Nigeria 40 34 35 38 37 38 39 36 35 37
China 13 11 12 11 12 23 27 25 28 26
Indonesia 26 23 22 13 21 21 17 16 10 16
Other 52 50 48 55 51 55 52 48 60 54
Equity affiliates 91 84 104 87 92 55 117 120 116 102
------------------------------------------------------------------------------- ---------------------------------------
Total 973 939 915 941 942 935 967 913 922 934
=============================================================================== =======================================
Natural Gas Liquids (MB/D)
U.S. 48 46 42 45 45 48 49 44 51 48
International 24 22 24 25 24 23 23 18 21 21
------------------------------------------------------------------------------- ---------------------------------------
Total 72 68 66 70 69 71 72 62 72 69
=============================================================================== =======================================
Natural Gas (MMCF/D)
Consolidated
U.S. 1,635 1,566 1,578 1,548 1,581 1,527 1,473 1,451 1,469 1,479
Norway 291 290 252 232 266 305 273 216 307 275
United Kingdom 869 856 603 975 826 1,002 952 853 954 940
Canada 548 565 512 442 517 436 424 448 431 435
Indonesia 179 169 189 220 189 224 246 275 275 255
Other 120 95 105 112 108 111 117 130 145 126
Equity affiliates 12 13 13 13 13 12 11 11 12 12
------------------------------------------------------------------------------- ---------------------------------------
Total 3,654 3,554 3,252 3,542 3,500 3,617 3,496 3,384 3,593 3,522
=============================================================================== =======================================
Canadian Syncrude (MB/D) 22 20 23 22 22 17 19 22 18 19
------------------------------------------------------------------------------- ---------------------------------------
E&P Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
U.S. 18.66 24.33 25.85 26.36 23.69 31.47 27.21 28.26 28.45 28.85
Norway 20.77 24.42 26.78 26.35 24.61 32.72 26.28 29.08 29.08 29.24
United Kingdom 19.78 23.69 26.15 25.98 23.99 30.11 24.34 28.32 28.29 27.70
Canada 19.39 21.79 24.96 21.26 21.82 28.40 23.61 24.15 23.71 25.06
Nigeria 21.33 25.16 27.40 26.97 25.12 31.94 26.35 28.48 29.72 28.99
China 19.57 25.27 26.31 29.64 25.03 28.87 26.51 26.38 28.56 27.55
Indonesia 19.38 24.46 24.21 30.59 23.51 29.35 24.54 26.32 26.52 26.88
Other 19.39 24.66 25.55 25.18 23.58 29.10 25.38 26.58 27.80 27.25
Equity affiliates 13.40 18.26 19.06 17.50 17.14 20.97 16.85 19.90 17.86 18.58
Total 18.93 23.71 25.24 25.31 23.26 30.73 25.19 27.00 27.24 27.47
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl)
U.S. 12.92 17.05 16.78 19.27 16.44 24.96 20.25 21.31 22.85 22.30
International 9.86 15.62 18.56 19.39 15.95 24.22 18.96 18.23 24.35 21.39
Total 11.67 16.49 17.57 19.32 16.24 24.65 19.73 20.10 23.36 21.95
------------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated
U.S. 2.26 2.80 2.71 3.38 2.78 5.34 4.58 4.41 4.13 4.62
Norway 3.20 2.99 3.26 3.33 3.19 3.66 3.86 4.21 4.09 3.94
United Kingdom 3.43 2.37 1.95 3.20 2.81 3.55 3.17 2.88 4.48 3.54
Canada 1.74 2.50 2.13 3.37 2.40 5.42 4.34 4.17 4.02 4.48
Indonesia 3.16 4.13 4.13 4.11 3.89 4.66 4.16 4.35 4.21 4.33
Other 0.41 0.39 0.41 0.45 0.42 0.48 0.48 0.50 0.61 0.52
Equity affiliates 2.17 2.60 1.78 3.00 2.39 4.82 4.89 4.12 3.96 4.44
Total 2.53 2.66 2.52 3.27 2.75 4.49 3.93 3.80 4.07 4.07
------------------------------------------------------------------------------- ---------------------------------------
Note: Pro forma information derived by summing the historical Phillips and Conoco data for the period indicated.
Page 12 of 13
SELECTED PRO FORMA STATISTICS (Midstream and R&M)
2002 2003
-------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
-------------------------------------- ---------------------------------------
Midstream
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States 49 52 50 56 52 51 53 50 54 52
International 42 42 46 45 44 47 35 47 50 45
Equity Affiliates
United States* 117 119 119 119 119 114 110 111 110 111
International 9 9 9 10 9 10 11 12 11 11
------------------------------------------------------------------------------- ---------------------------------------
Total 217 222 224 230 223 222 209 220 225 219
=============================================================================== =======================================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
Natural Gas Liquids Fractionated (MB/D)
United States 166 159 177 179 170 168 158 172 168 167
------------------------------------------------------------------------------- ---------------------------------------
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 13.23 15.99 16.69 19.24 16.31 25.59 20.99 20.94 23.14 22.67
DEFS 12.83 15.59 16.32 18.95 15.92 24.53 20.53 20.67 22.76 22.12
------------------------------------------------------------------------------- ---------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas
liquids component and location mix.
R&M
Charge Barrels Input (MB/D)
Eastern U.S.
Crude Oil 348 404 338 399 372 415 435 428 421 425
Other Feed and Blending Stocks 53 47 16 61 44 51 53 40 21 41
------------------------------------------------------------------------------- ---------------------------------------
Total 401 451 354 460 416 466 488 468 442 466
=============================================================================== =======================================
Percentage Utilization 81% 94% 79% 93% 87% 97% 101% 100% 98% 99%
------------------------------------------------------------------------------- ---------------------------------------
U.S. Gulf Coast
Crude Oil 648 669 675 652 661 668 702 708 680 690
Other Feed and Blending Stocks 116 96 90 101 101 103 95 95 102 98
------------------------------------------------------------------------------- ---------------------------------------
Total 764 765 765 753 762 771 797 803 782 788
=============================================================================== =======================================
Percentage Utilization 91% 94% 94% 91% 93% 93% 98% 99% 95% 96%
------------------------------------------------------------------------------- ---------------------------------------
Central U.S.
Crude Oil 568 664 624 633 622 631 663 618 639 638
Other Feed and Blending Stocks 25 23 22 46 29 32 24 33 35 31
------------------------------------------------------------------------------- ---------------------------------------
Total 593 687 646 679 651 663 687 651 674 669
=============================================================================== =======================================
Percentage Utilization 85% 96% 91% 92% 91% 92% 96% 90% 93% 93%
------------------------------------------------------------------------------- ---------------------------------------
Western U.S.
Crude Oil 306 320 330 320 319 294 328 329 334 321
Other Feed and Blending Stocks (3) 16 13 16 11 9 13 12 16 13
------------------------------------------------------------------------------- ---------------------------------------
Total 303 336 343 336 330 303 341 341 350 334
=============================================================================== =======================================
Percentage Utilization 92% 96% 99% 96% 96% 88% 99% 99% 100% 96%
------------------------------------------------------------------------------- ---------------------------------------
Total U.S.
Crude Oil 1,870 2,057 1,967 2,004 1,975 2,008 2,128 2,083 2,074 2,074
Other Feed and Blending Stocks 191 182 141 224 184 195 185 180 174 183
------------------------------------------------------------------------------- ---------------------------------------
Total 2,061 2,239 2,108 2,228 2,159 2,203 2,313 2,263 2,248 2,257
=============================================================================== =======================================
Percentage Utilization 87% 95% 91% 93% 92% 93% 98% 96% 96% 96%
------------------------------------------------------------------------------- ---------------------------------------
United Kingdom and Ireland
Crude Oil 279 260 273 177 247 262 244 258 253 254
Other Feed and Blending Stocks 18 27 43 30 30 39 42 38 27 37
------------------------------------------------------------------------------- ---------------------------------------
Total 297 287 316 207 277 301 286 296 280 291
=============================================================================== =======================================
Percentage Utilization 92% 86% 90% 58% 81% 86% 80% 84% 83% 83%
------------------------------------------------------------------------------- ---------------------------------------
Equity Affiliates -- Net Share -- International*
Crude Oil 119 127 127 130 126 134 132 129 128 131
Other Feed and Blending Stocks 4 6 4 3 4 2 3 5 3 3
------------------------------------------------------------------------------- ---------------------------------------
Total 123 133 131 133 130 136 135 134 131 134
=============================================================================== =======================================
Percentage Utilization 88% 93% 93% 94% 92% 98% 97% 95% 94% 96%
------------------------------------------------------------------------------- ---------------------------------------
* Represents 18.75 percent interest in a refinery complex at Karlsruhe, Germany; 16.33 percent interest in two
refineries in Kralupy and Litvinov, Czech Republic; and 47 percent interest in a refinery at Melaka, Malaysia.
Worldwide -- Including Net Share of Equity Affiliates
Crude Oil 2,268 2,444 2,367 2,311 2,348 2,404 2,504 2,470 2,455 2,459
Other Feed and Blending Stocks 213 215 188 257 218 236 230 223 204 223
------------------------------------------------------------------------------- ---------------------------------------
Total 2,481 2,659 2,555 2,568 2,566 2,640 2,734 2,693 2,659 2,682
=============================================================================== =======================================
Percentage Utilization 88% 94% 91% 89% 90% 92% 96% 95% 94% 94%
------------------------------------------------------------------------------- ---------------------------------------
U.S. Petroleum Products Sales (MB/D)
Gasoline 1,375 1,461 1,417 1,478 1,433 1,331 1,381 1,398 1,365 1,369
Distillates 653 650 602 692 649 600 590 580 530 575
Aviation Fuel 231 259 268 172 232 164 164 197 193 180
Other 524 479 456 403 465 509 493 497 474 492
------------------------------------------------------------------------------- ---------------------------------------
Total 2,783 2,849 2,743 2,745 2,780 2,604 2,628 2,672 2,562 2,616
=============================================================================== =======================================
Note: Pro forma information derived by summing the historical Phillips and Conoco data for the period indicated.
Page 13 of 13