UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 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 April 28, 2004.
99.2 -- Financial and operational tables.
99.3 -- Supplemental financial information.
Item 12. Results of Operations and Financial Condition
On April 28, 2004, ConocoPhillips issued a press release announcing the
company's financial and operating results for the quarter ended March 31, 2004.
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/ Rand C. Berney
------------------------------------------
Rand C. Berney
Vice President and Controller
April 28, 2004
3
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99.1 -- Press release issued by ConocoPhillips on April 28, 2004.
99.2 -- Financial and operational tables.
99.3 -- Supplemental financial information.
4
Exhibit 99.1
ConocoPhillips Reports First Quarter Net Income of $1.6 Billion
HOUSTON--(BUSINESS WIRE)--April 28, 2004--ConocoPhillips
(NYSE:COP)
Earnings at a glance
First Quarter
- ---------------------------------------------------------------------
2004 2003
- ---------------------------------------------------------------------
Income from continuing operations $1,603 million $1,263 million
Income from discontinued operations 13 53
Cumulative effect of changes in
accounting principles - (95)
Net income 1,616 1,221
- ---------------------------------------------------------------------
Diluted income per share
Income from continuing
operations $2.31 $1.85
Net income 2.33 1.79
- ---------------------------------------------------------------------
Revenues $30.2 billion $27.1 billion
- ---------------------------------------------------------------------
ConocoPhillips (NYSE:COP) today reported first quarter net income
of $1,616 million, or $2.33 per share, compared with $1,221 million,
or $1.79 per share, for the same quarter in 2003. Total revenues were
$30.2 billion, versus $27.1 billion a year ago.
Income from continuing operations for the first quarter was $1,603
million, or $2.31 per share, compared with $1,263 million, or $1.85
per share, for the same period a year ago.
"Our operations turned in another quarter of solid performance,"
said Jim Mulva, president and chief executive officer. "Our oil and
gas production was 1.61 million barrels-of-oil-equivalent (BOE) per
day, and our refining crude oil capacity utilization rate was 95
percent. In addition, favorable commodity prices and margins, along
with further synergy capture, helped income from continuing operations
grow 25 percent per share on a diluted basis over the first quarter of
2003, and provided significant improvement over the previous quarter.
We also experienced good results from our Midstream segment, and our
chemicals joint venture continued to improve its performance.
"We made further progress in strengthening our balance sheet, with
our debt-to-capital ratio declining from 34 percent to 32 percent
during the quarter. In addition to operating cash flows of $2.1
billion, we received proceeds of $449 million from asset sales. This
cash generation allowed us to invest $1.5 billion in capital spending,
pay $294 million in dividends, and reduce balance sheet debt by
approximately $700 million."
The results of ConocoPhillips' business segments follow.
Exploration & Production (E&P)
E&P income from continuing operations in the first quarter was
$1,257 million, up from $991 million in the fourth quarter of 2003 and
from $1,125 million in the first quarter of 2003. Improvement from the
fourth quarter of 2003 primarily came from higher realized crude oil
and natural gas prices, higher gains from asset sales, and lower
exploration costs, partially offset by a reduction of income tax
benefits from various international tax jurisdictions experienced
during the fourth quarter. Improved results from the first quarter of
2003 primarily were due to higher realized U.S. crude oil prices and
gains on the sale of assets, partially offset by higher dry hole
expenses.
ConocoPhillips' daily production, including Canadian Syncrude,
averaged 1.61 million BOE for both the first quarter of 2004 and the
fourth quarter of 2003, and 1.63 million BOE for the first quarter of
2003. Improvements during the first quarter of 2004 from Norway and
Vietnam were offset by decreased production in the United Kingdom and
the impact of asset sales, primarily in Canada. The decrease from the
first quarter of 2003 was primarily due to asset dispositions and
lower production in the United Kingdom, partially offset by a full
quarter of production from Venezuela.
ConocoPhillips' first quarter 2004 average worldwide crude oil
sales price was $30.35 per barrel, up from $27.24 in the fourth
quarter of 2003. The company's U.S. Lower 48 and worldwide natural gas
prices averaged $4.91 and $4.48 per thousand cubic feet, respectively,
compared with $4.27 and $4.07 in the fourth quarter of 2003.
Midstream
Midstream income from continuing operations was $55 million, up
from $43 million in the fourth quarter of 2003 and $31 million in the
first quarter of 2003. The improvement from the fourth quarter was due
primarily to higher equity earnings from Duke Energy Field Services,
LLC (DEFS), partially offset by an impairment of approximately $12
million on an asset package held for sale. The increase over the first
quarter of 2003 was primarily due to higher equity earnings from DEFS
and higher natural gas liquids prices and volumes, partially offset by
the previously mentioned impairment from consolidated operations.
Refining and Marketing (R&M)
R&M income from continuing operations was $464 million, up from
$202 million in the previous quarter and $389 million in the first
quarter of 2003.
Improvements over the fourth quarter of 2003 were primarily driven
by higher refining margins. These improvements were partially offset
by lower U.S. retail and wholesale marketing margins, as well as
higher energy costs. The improved results from the first quarter of
2003 were attributable to higher U.S. refining margins and volumes,
partially offset by lower U.S. retail and wholesale marketing margins.
The refinery crude oil capacity utilization rate for the total
company averaged 95 percent, compared with 94 percent in the previous
quarter and 92 percent in the first quarter of 2003. Turnaround costs,
before tax, were approximately $59 million, versus $63 million in the
fourth quarter of 2003. These costs were lower in the first quarter in
part due to the late first quarter start-up of a turnaround at the
Alliance refinery, which will shift costs to the second quarter.
Chemicals
The Chemicals segment, which reflects the company's 50 percent
interest in Chevron Phillips Chemical Company LLC, reported income
from continuing operations of $39 million. This is compared with
income of $11 million in the fourth quarter of 2003 and a loss of $23
million in the first quarter of 2003. Contributing to the increase
from the fourth quarter were improved ethylene margins. Improvements
from the first quarter of 2003 were primarily driven by higher
ethylene and polyethylene margins and lower utility costs.
Emerging Businesses
The Emerging Businesses segment had a loss from continuing
operations of $22 million in the first quarter of 2004, compared with
losses of $24 million in the fourth quarter of 2003 and $34 million in
the first quarter of 2003. The decreased costs from the first quarter
of 2003 resulted from reduced gas-to-liquids plant construction costs
in 2004.
Corporate and Other
Corporate expenses from continuing operations during the first
quarter were $190 million, compared with $238 million in the previous
quarter and $225 million in the first quarter of 2003. Contributing to
the decrease from the fourth quarter were lower merger-related
expenses, lower interest expense, and the absence of costs associated
with the early retirement of debt, partially offset by a decrease in
foreign currency gains. The decrease from the first quarter of 2003 is
attributable to lower interest and lower merger-related expenses,
partially offset by insurance demutualization benefits recorded in
2003.
Total balance sheet debt at the end of the first quarter was $17.1
billion, down approximately $700 million from the end of the previous
quarter. This improvement resulted from higher cash flows due to
strong earnings, as well as from disciplined capital spending. At the
end of March 2004, the company's debt-to-capital ratio was 32 percent,
down from 34 percent at the end of the fourth quarter of 2003.
The company's effective tax rate was 46 percent in the first
quarter, compared with 41 percent in the previous quarter and 51
percent in the first quarter of 2003. The increase from the fourth
quarter of 2003 was due to a reduction of income tax benefits from
various international tax jurisdictions experienced during the fourth
quarter. The decrease from the first quarter of 2003 is due to a
higher proportion of income from lower tax-rate jurisdictions.
Discontinued Operations
First quarter 2004 earnings from discontinued operations were $13
million, compared with $36 million in the fourth quarter of 2003 and
$53 million in the first quarter of 2003. These decreases are
primarily due to the completion of various refining and marketing
asset sales during 2003.
Outlook
Mr. Mulva concluded:
"Our first quarter results have provided a good start to 2004. We
expect to continue realizing business improvements in our segments as
we execute our operating plan. We remain focused on our disciplined
approach to improving our operations and financial flexibility as we
manage operating costs and capital spending.
"Our asset sales program is nearing completion. Since the merger,
we have realized approximately $3.8 billion in proceeds from asset
sales. Through the remainder of 2004, we expect to close additional
dispositions, primarily midstream and marketing assets, completing our
asset disposition program.
"Liquids production from the Bayu-Undan project began in February
2004, and we anticipate start-up of the Hamaca upgrader later this
year. Although production for the second and third quarters of 2004 is
expected to be lower than that of the first quarter due to planned
downtime and seasonality, overall production for 2004 is expected to
be near 1.56 million BOE per day, as previously stated.
"The entire company continues to operate well under favorable
market conditions. However, we do not anticipate increasing our
previously announced capital program, which is directed toward
progressing our legacy projects and clean fuels initiatives, in
response to such conditions."
ConocoPhillips is an integrated oil company with interests around
the world. Headquartered in Houston, the company had approximately
37,200 employees and $84 billion of assets as of March 31, 2004. 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 "First
Quarter Earnings" link.
For financial and operational tables, go to
www.conocophillips.com/news/nr/earnings/highlights/1q04earnings.html
For detailed supplemental information, go to
www.conocophillips.com/news/nr/earnings/detail/1q04summary.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, "we
expect to continue realizing business improvements in our segments as
we execute our operating plan"; "we expect to close additional
dispositions, primarily midstream and marketing assets, completing our
asset disposition program"; "we anticipate start up of the Hamaca
upgrader later this year"; "although production for the second and
third quarters of 2004 is expected to be lower than that of the first
quarter due to planned downtime and seasonality, overall production
for 2004 is expected to be near 1.56 million BOE per day, as
previously stated"; and "we do not anticipate increasing our
previously announced capital program which is directed toward
progressing our legacy projects and clean fuels initiatives, in
response to such conditions," involve certain risks, uncertainties and
assumptions that are difficult to predict. 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 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
Kristi DesJarlais, 281-293-4595 (media)
or
Clayton Reasor, 212-207-1996 (investors)
Exhibit 99.2
ConocoPhillips
Houston, Texas 77079
Preliminary
FINANCIAL HIGHLIGHTS
Millions of Dollars
Three Months Ended
March 31
2004 2003
Revenues
Sales and other operating revenues* $29,800 26,940
Equity in earnings of affiliates 269 49
Other income 148 79
---------- -----------
30,217 27,068
---------- -----------
Costs and expenses
Purchased crude oil and products 19,685 17,672
Production and operating expenses 1,719 1,670
Selling, general and administrative
expenses 464 447
Exploration expenses 143 116
Depreciation, depletion and amortization 918 859
Property impairments 31 28
Taxes other than income taxes* 4,114 3,422
Accretion on discounted liabilities 36 33
Interest and debt expense 145 239
Foreign currency transaction losses
(gains) (16) 6
Minority interests 14 7
---------- -----------
27,253 24,499
---------- -----------
Income from continuing operations before income
taxes 2,964 2,569
Provision for income taxes 1,361 1,306
---------- -----------
Income from continuing operations 1,603 1,263
Income from discontinued operations 13 53
---------- -----------
Income before cumulative effect of changes in
accounting principles 1,616 1,316
Cumulative effect of changes in accounting
principles - (95)
---------- -----------
Net income $1,616 1,221
========== ===========
Income per share of common stock
Basic
Continuing operations $2.34 1.86
Discontinued operations 0.02 0.08
Before cumulative effect of changes in accounting
principles 2.36 1.94
Cumulative effect of changes in accounting
principles - (0.14)
Net income $2.36 1.80
Diluted
Continuing operations $2.31 1.85
Discontinued operations 0.02 0.08
Before cumulative effect of changes in accounting
principles 2.33 1.93
Cumulative effect of changes in accounting
principles - (0.14)
Net income $2.33 1.79
Average common shares outstanding (in thousands)
Basic 685,541 679,538
Diluted 694,498 682,744
*Includes excise taxes on petroleum products sales 3,822 3,148
1-1
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
Three Months Ended
March 31
2004 2003
INCOME/(LOSS) FROM CONTINUING OPERATIONS
E&P
United States $635 678
International 622 447
---------- ----------
Total E&P 1,257 1,125
---------- ----------
Midstream 55 31
---------- ----------
R&M
United States 403 275
International 61 114
---------- ----------
Total R&M 464 389
---------- ----------
Chemicals 39 (23)
Emerging Businesses (22) (34)
Corporate and other (190) (225)
---------- ----------
Consolidated $1,603 1,263
========== ==========
CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES
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 FROM DISCONTINUED OPERATIONS
Corporate and other 13 53
SUMMARY OF NET INCOME/(LOSS)
E&P
United States $635 820
International 622 447
---------- ----------
Total E&P 1,257 1,267
---------- ----------
Midstream 55 31
---------- ----------
R&M
United States 403 150
International 61 114
---------- ----------
Total R&M 464 264
---------- ----------
Chemicals 39 (23)
Emerging Businesses (22) (34)
Corporate and other (177) (284)
---------- ----------
Net Income/(loss) $1,616 1,221
========== ==========
1-2
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended
March 31
2004 2003
INCOME FROM CONTINUING OPERATIONS
Effective tax rate % 45.9 % 50.8
Millions of Dollars
FOREIGN CURRENY GAINS (LOSSES) AFTER-TAX
E&P $5 10
Midstream - -
R&M 1 1
Chemicals - -
Emerging Businesses - (1)
Corporate and other 6 1
---------- -----------
$12 11
========== ===========
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $1,603 1,263
Depreciation, depletion and amortization 918 859
Property impairments 31 28
Dry hole costs and leasehold impairment 87 40
Accretion on discounted liabilities 36 33
Deferred taxes 360 243
Undistributed equity earnings (181) 18
Net gain on asset dispositions (82) (56)
Other 70 56
Working capital changes (777) 636
---------- -----------
Net cash provided by continuing
operations 2,065 3,120
Net cash provided by discontinued
operations 8 -
---------- -----------
Net cash provided by operating activities $2,073 3,120
========== ===========
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $306 326
Foreign 904 686
---------- -----------
1,210 1,012
Midstream 3 2
R&M 215 203
Chemicals - -
Emerging Businesses 28 66
Corporate and other* 25 25
---------- -----------
$1,481 1,308
========== ===========
*Excludes discontinued operations
OTHER
At March 31, 2004 At December 31, 2003
Total debt $17,109 17,780
Common stockholders' equity $35,820 34,366
1-3
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended
March 31
2004 2003
Thousands of Barrels
Daily
E&P
Crude oil produced
United States
Alaska 320 337
Lower 48 53 60
---------- ----------
373 397
Norway 215 226
United Kingdom 67 87
Canada 27 33
China 32 23
Indonesia 15 21
Vietnam 31 16
Timor Sea 5 3
Other 63 74
---------- ----------
Total consolidated 828 880
Equity affiliates 113 55
---------- ----------
Total Worldwide 941 935
========== ==========
Syncrude 23 17
========== ==========
Natural gas liquids produced
United States
Alaska* 26 26
Lower 48 24 22
---------- ----------
50 48
Norway 9 8
Canada 10 11
Other 7 4
---------- ----------
Total Worldwide 76 71
========== ==========
*Includes reinjected volumes sold lease-to-
lease. 16 15
Millions of Cubic Feet
Daily
Natural gas produced*
United States
Alaska 185 189
Lower 48 1,233 1,338
---------- ----------
1,418 1,527
Norway 319 305
United Kingdom 879 1,002
Canada 428 436
Timor Sea 40 61
Indonesia 248 224
Vietnam 17 -
Other 66 50
---------- ----------
Total consolidated 3,415 3,605
Equity affiliates 9 12
---------- ----------
Total Worldwide 3,424 3,617
========== ==========
*Represents quantities available for sale. Excludes gas equivalent of NGL shown
above.
Liquefied natural gas sales 118 130
1-4
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended
March 31
2004 2003
E&P (continued)
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $32.93 31.47
Lower 48 31.86 31.48
Total U.S. 32.78 31.47
International 31.48 31.10
Total consolidated 32.08 31.27
Equity affiliates 18.68 20.97
Worldwide 30.35 30.73
Natural gas-lease (per MCF)
United States
Alaska 2.54 1.97
Lower 48 4.91 5.47
Total U.S. 4.79 5.34
International 4.28 3.92
Total consolidated 4.48 4.49
Equity affiliates 3.91 4.82
Total Worldwide 4.48 4.49
Midstream
Thousands of Barrels
Daily
Natural gas liquids extracted
Consolidated
United States 54 51
International 46 47
Equity affiliates
United States* 109 114
International 12 10
---------- -----------
221 222
========== ===========
*Represents 30.3 percent interest in Duke Energy Field Services LLC
(DEFS).
Per Barrel
U.S. product prices
Weighted average NGL**
Consolidated $25.68 25.59
DEFS 24.81 24.53
** Prices are based on index prices from the Mont Belvieu and Conway market
hubs that are weighted by DEFS' naural-gas-liquids component and location
mix.
1-5
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended
March 31
2004 2003
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,168 2,167
Crude oil runs 2,105 2,008
Refinery production 2,255 2,254
International*
Crude oil capacity 447 442
Crude oil runs 374 396
Refinery production 410 436
U.S. Petroleum products outside sales
Automotive gasoline 1,315 1,331
Distillates 570 600
Aviation fuels 178 164
Other products 517 509
---------- ----------
2,580 2,604
---------- ----------
International 501 428
---------- ----------
3,081 3,032
========== ==========
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $1.16 1.10
Automotive gasoline-retail 1.32 1.37
Distillates-wholesale 1.02 1.05
* Includes ConocoPhillps' share of equity affiliates.
** Excludes excise taxes.
1-6
Exhibit 99.3
SUMMARY OF NET INCOME (LOSS) BY SEGMENT
Millions of Dollars
------------------------------------------------------
2003 2004
------------------------------- ----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
------------------------------- ----------------------
Income (Loss) from Continuing Operations
Before Accounting Changes
U.S. E&P 678 517 546 491 2,232 635
International E&P 447 560 421 500 1,928 622
- ------------------------------------------------------------------------------------------------- ----------------------
Total E&P 1,125 1,077 967 991 4,160 1,257
- ------------------------------------------------------------------------------------------------- ----------------------
Midstream 31 25 31 43 130 55
- ------------------------------------------------------------------------------------------------- ----------------------
U.S. R&M 275 248 416 176 1,115 403
International R&M 114 73 69 26 282 61
- ------------------------------------------------------------------------------------------------- ----------------------
Total R&M 389 321 485 202 1,397 464
- ------------------------------------------------------------------------------------------------- ----------------------
Chemicals (23) 12 7 11 7 39
Emerging Businesses (34) (23) (18) (24) (99) (22)
Corporate and Other (225) (316) (223) (238)(1,002) (190)
- ------------------------------------------------------------------------------------------------- ----------------------
Consolidated 1,263 1,096 1,249 985 4,593 1,603
================================================================================================= ======================
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 53 91 57 36 237 13
================================================================================================= ======================
Net Income (Loss)
U.S. E&P 820 517 546 491 2,374 635
International E&P 447 560 421 500 1,928 622
- ------------------------------------------------------------------------------------------------- ----------------------
Total E&P 1,267 1,077 967 991 4,302 1,257
- ------------------------------------------------------------------------------------------------- ----------------------
Midstream 31 25 31 43 130 55
- ------------------------------------------------------------------------------------------------- ----------------------
U.S. R&M 150 248 416 176 990 403
International R&M 114 73 69 26 282 61
- ------------------------------------------------------------------------------------------------- ----------------------
Total R&M 264 321 485 202 1,272 464
- ------------------------------------------------------------------------------------------------- ----------------------
Chemicals (23) 12 7 11 7 39
Emerging Businesses (34) (23) (18) (24) (99) (22)
Corporate and Other (284) (225) (166) (202) (877) (177)
- ------------------------------------------------------------------------------------------------- ----------------------
Consolidated 1,221 1,187 1,306 1,021 4,735 1,616
================================================================================================= ======================
Page 1 of 10
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
Millions of Dollars
------------------------------------------------------
2003 2004
------------------------------- ----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
------------------------------- ----------------------
Income from Continuing Operations
Before Income Taxes
U.S. E&P 1,050 803 853 757 3,463 987
International E&P 1,260 967 1,029 941 4,197 1,410
- ------------------------------------------------------------------------------------------------- ----------------------
Total E&P 2,310 1,770 1,882 1,698 7,660 2,397
- ------------------------------------------------------------------------------------------------- ----------------------
Midstream 51 42 50 70 213 86
- ------------------------------------------------------------------------------------------------- ----------------------
U.S. R&M 453 396 639 279 1,767 636
International R&M 150 94 86 16 346 79
- ------------------------------------------------------------------------------------------------- ----------------------
Total R&M 603 490 725 295 2,113 715
- ------------------------------------------------------------------------------------------------- ----------------------
Chemicals (44) 15 10 14 (5) 49
Emerging Businesses (51) (34) (29) (36) (150) (34)
Corporate and Other (300) (502) (328) (364)(1,494) (249)
- ------------------------------------------------------------------------------------------------- ----------------------
Consolidated 2,569 1,781 2,310 1,677 8,337 2,964
================================================================================================= ======================
Income from Continuing Operations
Effective Tax Rates
U.S. E&P 35.4% 35.6% 36.0% 35.1% 35.5% 35.7%
International E&P 64.5% 42.1% 59.1% 46.9% 54.1% 55.9%
- ------------------------------------------------------------------------------------------------- ----------------------
Total E&P 51.3% 39.2% 48.6% 41.6% 45.7% 47.6%
- ------------------------------------------------------------------------------------------------- ----------------------
Midstream 39.2% 40.5% 38.0% 38.6% 39.0% 36.0%
- ------------------------------------------------------------------------------------------------- ----------------------
U.S. R&M 39.3% 37.4% 34.9% 36.9% 36.9% 36.6%
International R&M 24.0% 22.3% 19.8%-62.5% 18.5% 22.8%
- ------------------------------------------------------------------------------------------------- ----------------------
Total R&M 35.5% 34.5% 33.1% 31.5% 33.9% 35.1%
- ------------------------------------------------------------------------------------------------- ----------------------
Chemicals 47.7% 20.0% 30.0% 21.4% 240.0% 20.4%
Emerging Businesses 33.3% 32.4% 37.9% 33.3% 34.0% 35.3%
Corporate and Other 25.0% 37.1% 32.0% 34.6% 32.9% 23.7%
- ------------------------------------------------------------------------------------------------- ----------------------
Consolidated 50.8% 38.5% 45.9% 41.3% 44.9% 45.9%
================================================================================================= ======================
Page 2 of 10
Page 2
of 10
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX)
Millions of Dollars
--------------------------------------------
2003 2004
----------------------- --------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
----------------------- --------------------
U.S. E&P
Gain (loss) on asset sales - 16 65 - 81 -
Property impairments - (14) (10)(18) (42) (3)
Pending claims and settlements - (20) - - (20) -
- --------------------------------------------------------------------------------------------------- --------------------
Total - (18) 55 (18) 19 (3)
- --------------------------------------------------------------------------------------------------- --------------------
International E&P
Gain (loss) on asset sales - - 33 - 33 56
Property impairments (12) (32) - (18) (62) -
Canada tax law change - - - 95 95 -
Norway Removal Grant Act (1986) repeal* - 87 - - 87 -
Bayu-Undan ownership realignment - 51 - - 51 -
Angola leasehold impairment, net of taxes - - - 12 12 -
- --------------------------------------------------------------------------------------------------- --------------------
Total (12) 106 33 89 216 56
- --------------------------------------------------------------------------------------------------- --------------------
Total E&P (12) 88 88 71 235 53
- --------------------------------------------------------------------------------------------------- --------------------
Midstream
Property impairments - - - - - (12)
- --------------------------------------------------------------------------------------------------- --------------------
Total - - - - - (12)
- --------------------------------------------------------------------------------------------------- --------------------
U.S. R&M
Gain (loss) on asset sales - - - - - 2
Property impairments - - - (1) (1) (5)
Other - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Total - - - (1) (1) (3)
- --------------------------------------------------------------------------------------------------- --------------------
International R&M
Gain (loss) on asset sales - - - - - -
Property impairments - - - - - -
Other - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Total - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Total R&M - - - (1) (1) (3)
- --------------------------------------------------------------------------------------------------- --------------------
Chemicals - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Total - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Emerging Businesses - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Total - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Corporate and Other
Insurance demutualization benefits 34 - - - 34 -
Property impairments - (3) - - (3) -
Merger-related expenses (27)(115) (41)(40)(223) (14)
Premium on early debt retirement (10) (9) - (34) (53) -
Other - - - - - -
- --------------------------------------------------------------------------------------------------- --------------------
Total (3)(127) (41)(74)(245) (14)
- --------------------------------------------------------------------------------------------------- --------------------
Total Company (15) (39) 47 (4) (11) 24
=================================================================================================== ====================
* Net of $21 million of property impairments.
Page 3 of 10
CASH FLOW INFORMATION
Millions of Dollars
-----------------------------------------------------------
2003 2004
----------------------------------- -----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
----------------------------------- -----------------------
Cash Flows from Operating Activities
Income from continuing operations 1,263 1,096 1,249 985 4,593 1,603
DD&A and property impairments 887 1,003 876 971 3,737 949
Dry hole costs and leasehold impairments 40 54 75 131 300 87
Accretion on discounted liabilities 33 35 39 38 145 36
Deferred taxes 243 10 80 68 401 360
Undistributed equity earnings 18 (66) (143) 132 (59) (181)
Net (gain) loss on asset dispositions (56) (28) (142) 15 (211) (82)
Other 56 (94) (88) (202) (328) 70
Net working capital changes 636 16 51 (114) 589 (777)
Discontinued operations - 120 61 8 189 8
- ------------------------------------------------------------------------------------------------ -----------------------
Net Cash Provided by
Operating Activities 3,120 2,146 2,058 2,032 9,356 2,073
- ------------------------------------------------------------------------------------------------ -----------------------
Cash Flows from Investing Activities
Capital expenditures and investments:
E&P (1,012)(1,167)(1,109)(1,220)(4,508) (1,210)
Midstream (2) (2) (2) (4) (10) (3)
R&M (203) (245) (302) (429)(1,179) (215)
Chemicals - - - - - -
Emerging Businesses (66) (98) (60) (60) (284) (28)
Corporate and Other (25) (45) (47) (71) (188) (25)
- ------------------------------------------------------------------------------------------------ -----------------------
Total capital expend. & investments (1,308)(1,557)(1,520)(1,784)(6,169) (1,481)
Acquisitions, net of cash acquired - - - - - -
Acquisitions - adoption of FIN 46 225 - - - 225 -
Proceeds from asset dispositions 125 466 913 1,155 2,659 449
Long-term advances to affiliates and
other investments (28) (8) 38 21 23 (44)
Discontinued operations (26) (5) (28) (177) (236) (1)
- ------------------------------------------------------------------------------------------------ -----------------------
Net Cash Used for Investing Activities (1,012)(1,104) (597) (785)(3,498) (1,077)
- ------------------------------------------------------------------------------------------------ -----------------------
Cash Flows from Financing Activities
Net issuance (repayment) of debt (1,569) (709)(1,514)(1,019)(4,811) (722)
Issuance of stock 19 14 20 55 108 112
Dividends (271) (272) (272) (292)(1,107) (294)
Other (8) 19 64 36 111 89
- ------------------------------------------------------------------------------------------------ -----------------------
Net Cash Provided by (Used for)
Financing Activities (1,829) (948)(1,702)(1,220)(5,699) (815)
- ------------------------------------------------------------------------------------------------ -----------------------
Effect of Exchange Rate Changes 57 13 (26) (20) 24 (12)
- ------------------------------------------------------------------------------------------------ -----------------------
Net Change in Cash
and Cash Equivalents 336 107 (267) 7 183 169
Cash and cash equivalents
at beginning of period 307 643 750 483 307 490
- ------------------------------------------------------------------------------------------------ -----------------------
Cash and Cash Equivalents
at End of Period 643 750 483 490 490 659
================================================================================================ =======================
Page 4 of 10
TOTAL E&P
2003 2004
------------------------------ ----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
------------------------------ ----------------------
E&P Net Income ($ Millions) 1,267 1,077 967 991 4,302 1,257
================================================================================================= ======================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 1,626 1,641 1,561 1,611 1,609 1,611
- ------------------------------------------------------------------------------------------------- ----------------------
Crude Oil and Condensate (MB/D)
Consolidated 880 850 793 806 832 828
Equity affiliates 55 117 120 116 102 113
- ------------------------------------------------------------------------------------------------- ----------------------
Total 935 967 913 922 934 941
================================================================================================= ======================
Sales of crude oil produced (MB/D) 911 996 917 921 936 928
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas Liquids (MB/D) 71 72 62 72 69 76
- ------------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 3,605 3,485 3,373 3,581 3,510 3,415
Equity affiliates 12 11 11 12 12 9
- ------------------------------------------------------------------------------------------------- ----------------------
Total 3,617 3,496 3,384 3,593 3,522 3,424
================================================================================================= ======================
Canadian Syncrude (MB/D) 17 19 22 18 19 23
- ------------------------------------------------------------------------------------------------- ----------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 34.06 29.02 30.18 31.17 31.11 35.23
Brent dated 31.51 26.03 28.41 29.42 28.84 31.95
Natural Gas--Henry Hub 1st of month ($/mcf) 6.58 5.40 4.97 4.60 5.39 5.69
- ------------------------------------------------------------------------------------------------- ----------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated 31.27 26.33 28.15 28.43 28.54 32.08
Equity affiliates 20.97 16.85 19.90 17.86 18.58 18.68
Total 30.73 25.19 27.00 27.24 27.47 30.35
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas Liquids ($/bbl) 24.65 19.73 20.10 23.36 21.95 25.43
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas ($/mcf)
Consolidated 4.49 3.92 3.80 4.07 4.07 4.48
Equity affiliates 4.82 4.89 4.12 3.96 4.44 3.91
Total 4.49 3.93 3.80 4.07 4.07 4.48
- ------------------------------------------------------------------------------------------------- ----------------------
Exploration Charges ($ Millions)
Dry Holes 20 30 39 78 167 67
Lease Impairments 20 24 36 53 133 20
- ------------------------------------------------------------------------------------------------- ----------------------
Total Non-Cash Charges 40 54 75 131 300 87
Other (G&G and Lease Rentals) 76 88 57 80 301 56
- ------------------------------------------------------------------------------------------------- ----------------------
Total Exploration Charges 116 142 132 211 601 143
================================================================================================= ======================
Depreciation, Depletion and
Amortization ($ Millions) 662 652 653 695 2,662 704
- ------------------------------------------------------------------------------------------------- ----------------------
Page 5 of 10
U.S. E&P
2003 2004
------------------------------ ----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
------------------------------ ----------------------
U.S. E&P Net Income ($ Millions) 820 517 546 491 2,374 635
================================================================================================= ======================
Alaska ($ Millions) 508 302 302 333 1,445 403
- ------------------------------------------------------------------------------------------------- ----------------------
Lower 48 ($ Millions) 312 215 244 158 929 232
- ------------------------------------------------------------------------------------------------- ----------------------
Production
Total U.S. (MBOE/D) 700 683 651 664 674 659
- ------------------------------------------------------------------------------------------------- ----------------------
Crude Oil and Condensate (MB/D)
Alaska 337 331 314 318 325 320
Lower 48 60 57 51 50 54 53
- ------------------------------------------------------------------------------------------------- ----------------------
Total 397 388 365 368 379 373
================================================================================================= ======================
Sales of crude oil produced (MB/D) 391 389 369 372 380 373
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas Liquids (MB/D)*
Alaska 26 23 19 24 23 26
Lower 48 22 26 25 27 25 24
- ------------------------------------------------------------------------------------------------- ----------------------
Total 48 49 44 51 48 50
================================================================================================= ======================
*Includes reinjection volumes sold lease-to-lease: 15 14 13 16 15 16
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas (MMCF/D)
Alaska 189 162 180 205 184 185
Lower 48 1,338 1,311 1,271 1,264 1,295 1,233
- ------------------------------------------------------------------------------------------------- ----------------------
Total 1,527 1,473 1,451 1,469 1,479 1,418
================================================================================================= ======================
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Alaska
North Slope 25.95 21.70 22.82 23.17 23.41 28.00
- ------------------------------------------------------------------------------------------------- ----------------------
West Coast 31.47 27.19 28.31 28.51 28.87 32.93
- ------------------------------------------------------------------------------------------------- ----------------------
Lower 48 31.48 27.34 27.94 28.02 28.76 31.86
- ------------------------------------------------------------------------------------------------- ----------------------
Total U.S. 31.47 27.21 28.26 28.45 28.85 32.78
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas Liquids ($/bbl)
Alaska 31.32 27.24 28.42 28.82 29.04 32.93
- ------------------------------------------------------------------------------------------------- ----------------------
Lower 48 22.13 17.77 19.71 20.81 20.02 24.19
- ------------------------------------------------------------------------------------------------- ----------------------
Total U.S. 24.96 20.25 21.31 22.85 22.30 26.80
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas ($/mcf)
Alaska 1.97 1.88 1.33 1.88 1.76 2.54
- ------------------------------------------------------------------------------------------------- ----------------------
Lower 48 5.47 4.72 4.56 4.27 4.76 4.91
- ------------------------------------------------------------------------------------------------- ----------------------
Total U.S. 5.34 4.58 4.41 4.13 4.62 4.79
- ------------------------------------------------------------------------------------------------- ----------------------
Kenai, Alaska LNG Sales
Volume (MMCF/D) 130 91 121 140 121 118
- ------------------------------------------------------------------------------------------------- ----------------------
Sales price per MCF 4.38 4.56 4.46 4.44 4.45 4.51
- ------------------------------------------------------------------------------------------------- ----------------------
U.S. Exploration Charges ($ Millions)
Dry Holes 16 3 9 48 76 32
Lease Impairments 13 12 10 12 47 11
- ------------------------------------------------------------------------------------------------- ----------------------
Total Non-Cash Charges 29 15 19 60 123 43
Other (G&G and Lease Rentals) 28 22 23 8 81 15
- ------------------------------------------------------------------------------------------------- ----------------------
Total U.S. Exploration Charges 57 37 42 68 204 58
================================================================================================= ======================
Alaska Only 25 10 11 9 55 17
- ------------------------------------------------------------------------------------------------- ----------------------
Depreciation, Depletion and
Amortization ($ Millions)
Alaska 124 135 130 127 516 119
Lower 48 151 150 156 134 591 146
- ------------------------------------------------------------------------------------------------- ----------------------
Total U.S. 275 285 286 261 1,107 265
================================================================================================= ======================
Page 6 of 10
INTERNATIONAL E&P
2003 2004
------------------------------ ----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
------------------------------ ----------------------
International E&P
Net Income ($ Millions) 447 560 421 500 1,928 622
================================================================================================= ======================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 926 958 910 947 935 952
- ------------------------------------------------------------------------------------------------- ----------------------
Crude Oil and Condensate (MB/D)
Consolidated
Norway 226 214 207 205 213 215
United Kingdom 87 82 67 72 77 67
Canada 33 31 29 28 30 27
China 23 27 25 28 26 32
Indonesia 21 17 16 10 16 15
Vietnam 16 15 11 22 16 31
Timor Sea 3 3 3 3 3 5
Other 74 73 70 70 72 63
Equity affiliates 55 117 120 116 102 113
- ------------------------------------------------------------------------------------------------- ----------------------
Total 538 579 548 554 555 568
================================================================================================= ======================
Sales of crude oil produced (MB/D) 520 607 548 549 556 555
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas Liquids (MB/D)
Norway 8 7 7 8 7 9
Canada 11 11 9 10 10 10
Other 4 5 2 3 4 7
- ------------------------------------------------------------------------------------------------- ----------------------
Total 23 23 18 21 21 26
================================================================================================= ======================
Natural Gas (MMCF/D)
Consolidated
Norway 305 273 216 307 275 319
United Kingdom 1,002 952 853 954 940 879
Canada 436 424 448 431 435 428
Timor Sea 61 61 61 56 60 40
Indonesia 224 246 275 275 255 248
Vietnam - - - 12 3 17
Other 50 56 69 77 63 66
Equity affiliates 12 11 11 12 12 9
- ------------------------------------------------------------------------------------------------- ----------------------
Total 2,090 2,023 1,933 2,124 2,043 2,006
================================================================================================= ======================
Canadian Syncrude (MB/D) 17 19 22 18 19 23
- ------------------------------------------------------------------------------------------------- ----------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
Norway 32.72 26.28 29.08 29.08 29.24 32.13
United Kingdom 30.11 24.34 28.32 28.29 27.70 31.27
Canada 28.40 23.61 24.15 23.71 25.06 28.95
China 28.87 26.51 26.38 28.56 27.55 29.91
Indonesia 29.35 24.54 26.32 26.52 26.88 32.21
Vietnam 30.26 27.54 27.12 30.88 29.21 31.76
Timor Sea 32.43 27.38 28.25 29.75 29.37 35.49
Other 30.16 25.44 27.42 27.94 27.68 30.89
Equity affiliates 20.97 16.85 19.90 17.86 18.58 18.68
Total 30.17 23.90 26.15 26.42 26.53 28.71
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas Liquids ($/bbl)
Norway 21.85 18.13 18.50 22.96 20.27 24.34
Canada 26.11 20.78 23.55 25.27 23.93 26.38
Other 23.40 16.73 14.18 25.13 16.48 18.43
Total 24.22 18.96 18.23 24.35 21.39 23.53
- ------------------------------------------------------------------------------------------------- ----------------------
Natural Gas ($/mcf)
Consolidated
Norway 3.66 3.86 4.21 4.09 3.94 4.37
United Kingdom 3.55 3.17 2.88 4.48 3.54 4.43
Canada 5.42 4.34 4.17 4.02 4.48 4.88
Timor Sea 0.43 0.42 0.45 0.42 0.43 0.43
Indonesia 4.66 4.16 4.35 4.21 4.33 4.38
Vietnam - - - 1.04 1.04 1.10
Other 0.54 0.54 0.54 0.68 0.58 0.66
Equity affiliates 4.82 4.89 4.12 3.96 4.44 3.91
Total 3.92 3.48 3.38 4.03 3.71 4.28
- ------------------------------------------------------------------------------------------------- ----------------------
International Exploration Charges ($ Millions)
Dry Holes 4 27 30 30 91 35
Lease Impairments 7 12 26 41 86 9
- ------------------------------------------------------------------------------------------------- ----------------------
Total Non-Cash Charges 11 39 56 71 177 44
Other (G&G and Lease Rentals) 48 66 34 72 220 41
- ------------------------------------------------------------------------------------------------- ----------------------
Total International Exploration Charges 59 105 90 143 397 85
================================================================================================= ======================
Depreciation, Depletion and
Amortization ($ Millions) 387 367 367 434 1,555 439
- ------------------------------------------------------------------------------------------------- ----------------------
Page 7 of 10
R&M
2003 2004
------------------------------ ----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
------------------------------ ----------------------
R&M Net Income ($ Millions) 264 321 485 202 1,272 464
================================================================================================= ======================
United States ($ Millions) 150 248 416 176 990 403
- ------------------------------------------------------------------------------------------------- ----------------------
International ($ Millions) 114 73 69 26 282 61
- ------------------------------------------------------------------------------------------------- ----------------------
Market Indicators
U.S. East Coast Crack Spread ($/bbl) 6.16 3.46 6.37 4.98 5.24 6.87
U.S. Gulf Coast Crack Spread ($/bbl) 5.64 3.65 5.38 3.72 4.60 6.36
U.S. Group Central Crack Spread ($/bbl) 6.12 6.96 8.32 5.34 6.69 6.91
U.S. West Coast Crack Spread ($/bbl) 12.79 11.39 14.00 11.44 12.41 16.10
U.S. Weighted 3:2:1 Crack Spread ($/bbl) 6.99 5.86 7.84 5.67 6.59 8.39
NW Europe Crack Spread ($/bbl) 5.68 3.17 3.11 3.20 3.79 2.56
Singapore 3:2:1Crack Spread ($/bbl) 8.16 4.65 5.64 7.12 6.39 10.33
U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 1.53 2.36 2.15 1.45 1.87 0.69
- ------------------------------------------------------------------------------------------------- ----------------------
Realized Margins
Refining Margin ($/bbl)
U.S. 6.50 5.34 6.39 5.58 5.94 7.30
International 6.00 3.67 4.38 3.61 4.44 5.51
- ------------------------------------------------------------------------------------------------- ----------------------
Marketing Margin ($/bbl)
U.S. 1.86 2.62 2.17 1.75 2.10 1.08
International 7.09 9.06 7.82 6.41 7.59 6.50
- ------------------------------------------------------------------------------------------------- ----------------------
Depreciation, Depletion and
Amortization ($ Millions) 167 174 174 174 689 186
- ------------------------------------------------------------------------------------------------- ----------------------
Turnaround Expense ($ Millions) 60 38 19 63 180 59
- ------------------------------------------------------------------------------------------------- ----------------------
Eastern U.S.
Crude Oil Charge Input (MB/D) 415 435 428 421 425 413
Total Charge Input (MB/D) 466 488 468 442 466 438
Crude Oil Capacity Utilization (%) 97% 101% 100% 98% 99% 96%
Clean Product Yield (%) 88% 84% 86% 88% 86% 87%
- ------------------------------------------------------------------------------------------------- ----------------------
U.S. Gulf Coast
Crude Oil Charge Input (MB/D) 668 702 708 680 690 699
Total Charge Input (MB/D) 771 797 803 782 788 774
Crude Oil Capacity Utilization (%) 93% 98% 99% 95% 96% 97%
Clean Product Yield (%) 82% 78% 80% 78% 79% 79%
- ------------------------------------------------------------------------------------------------- ----------------------
Central U.S.
Crude Oil Charge Input (MB/D) 573 632 556 584 586 601
Total Charge Input (MB/D) 601 654 584 614 613 633
Crude Oil Capacity Utilization (%) 91% 101% 88% 93% 93% 96%
Clean Product Yield (%) 84% 82% 81% 86% 83% 83%
- ------------------------------------------------------------------------------------------------- ----------------------
Western U.S.
Crude Oil Charge Input (MB/D) 352 359 391 389 373 392
Total Charge Input (MB/D) 365 374 408 410 390 409
Crude Oil Capacity Utilization (%) 90% 91% 100% 99% 95% 100%
Clean Product Yield (%) 82% 81% 83% 83% 82% 81%
- ------------------------------------------------------------------------------------------------- ----------------------
TOTAL UNITED STATES
Crude Oil Charge Input (MB/D) 2,008 2,128 2,083 2,074 2,074 2,105
Total Charge Input (MB/D) 2,203 2,313 2,263 2,248 2,257 2,254
Crude Oil Capacity Utilization (%) 93% 98% 96% 96% 96% 97%
Clean Product Yield (%) 84% 81% 82% 83% 82% 82%
- ------------------------------------------------------------------------------------------------- ----------------------
Refined Products Production (MB/D)
Gasoline 1,060 1,077 1,070 1,061 1,067 1,054
Distillates 590 615 591 591 597 604
Aviation Fuel 190 173 200 195 189 168
Other 414 492 461 423 448 429
- ------------------------------------------------------------------------------------------------- ----------------------
Total 2,254 2,357 2,322 2,270 2,301 2,255
================================================================================================= ======================
Petroleum Products Sales (MB/D)
Gasoline 1,331 1,381 1,398 1,365 1,369 1,315
Distillates 600 590 580 530 575 570
Aviation Fuel 164 164 197 193 180 178
Other 509 493 497 474 492 517
- ------------------------------------------------------------------------------------------------- ----------------------
Total 2,604 2,628 2,672 2,562 2,616 2,580
================================================================================================= ======================
Page 8 of 10
R&M (continued)
2003 2004
------------------------------ ----------------------
1st 2nd 3rd 4th YTD 1st 2nd 3rd 4th YTD
Qtr Qtr Qtr Qtr Qtr Qtr Qtr Qtr
------------------------------ ----------------------
International - Consolidated - United Kingdom and Ireland
Crude Oil Charge Input (MB/D) 262 244 258 253 254 254
Total Charge Input (MB/D) 301 286 296 280 291 299
Crude Oil Capacity Utilization (%) 86% 80% 84% 83% 83% 82%
Clean Product Yield (%) 84% 83% 84% 84% 84% 84%
- ------------------------------------------------------------------------------------------------- ----------------------
International - Equity Affiliates - Net Share*
Crude Oil Charge Input (MB/D) 134 132 129 128 131 120
Total Charge Input (MB/D) 137 135 134 131 134 121
Crude Oil Capacity Utilization (%) 98% 97% 95% 94% 96% 87%
Clean Product Yield (%) 82% 83% 81% 82% 82% 82%
- ------------------------------------------------------------------------------------------------- ----------------------
TOTAL INTERNATIONAL
Crude Oil Charge Input (MB/D) 396 376 387 381 385 374
Total Charge Input (MB/D) 438 421 430 411 425 420
Crude Oil Capacity Utilization (%) 90% 85% 88% 86% 87% 84%
Clean Product Yield (%) 83% 83% 83% 84% 83% 84%
- ------------------------------------------------------------------------------------------------- ----------------------
Refined Products Production (MB/D)
Gasoline 142 132 139 125 134 124
Distillates 183 177 185 154 175 181
Aviation Fuel 24 15 19 21 20 24
Other 87 83 70 95 83 81
- ------------------------------------------------------------------------------------------------- ----------------------
Total 436 407 413 395 412 410
================================================================================================= ======================
Petroleum Products Sales (MB/D)
Gasoline 202 190 181 171 186 185
Distillates 181 199 192 172 186 228
Aviation Fuel 5 7 14 7 8 6
Other 40 52 54 53 50 82
- ------------------------------------------------------------------------------------------------- ----------------------
Total 428 448 441 403 430 501
================================================================================================= ======================
Worldwide - Including Net Share of Equity Affiliates
Crude Oil Charge Input (MB/D) 2,404 2,504 2,470 2,455 2,459 2,479
Total Charge Input (MB/D) 2,641 2,734 2,693 2,659 2,682 2,674
Crude Oil Capacity Utilization (%) 92% 96% 95% 94% 94% 95%
Clean Product Yield (%) 84% 81% 82% 83% 83% 82%
- ------------------------------------------------------------------------------------------------- ----------------------
Refined Products Production (MB/D)
Gasoline 1,202 1,209 1,209 1,186 1,201 1,178
Distillates 773 792 776 745 772 785
Aviation Fuel 214 188 219 216 209 192
Other 501 575 531 518 531 510
- ------------------------------------------------------------------------------------------------- ----------------------
Total 2,690 2,764 2,735 2,665 2,713 2,665
================================================================================================= ======================
Petroleum Products Sales (MB/D)
Gasoline 1,533 1,571 1,579 1,536 1,555 1,500
Distillates 781 789 772 702 761 798
Aviation Fuel 169 171 211 200 188 184
Other 549 545 551 527 542 599
- ------------------------------------------------------------------------------------------------- ----------------------
Total 3,032 3,076 3,113 2,965 3,046 3,081
================================================================================================= ======================
* 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 10
MIDSTREAM
2003 2004
----------------------------------- -----------------------
1st Qtr2nd Qtr3rd Qtr4th Qtr YTD 1st Qtr2nd 3rd 4th YTD
Qtr Qtr Qtr
----------------------------------- -----------------------
Midstream Net Income ($ Millions) 31 25 31 43 130 55
=============================================================================================== =======================
U.S. Equity Affiliate ($ Millions)* 13 23 18 18 72 33
- ----------------------------------------------------------------------------------------------- -----------------------
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States 51 53 50 54 52 54
International 47 35 47 50 45 46
Equity Affiliates
United States* 114 110 111 110 111 109
International 10 11 12 11 11 12
- ----------------------------------------------------------------------------------------------- -----------------------
Total 222 209 220 225 219 221
=============================================================================================== =======================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
Natural Gas Liquids Fractionated (MB/D)
United States 168 158 172 168 167 158
- ----------------------------------------------------------------------------------------------- -----------------------
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 25.59 20.99 20.94 23.14 22.67 25.68
DEFS 24.53 20.53 20.67 22.76 22.12 24.81
- ----------------------------------------------------------------------------------------------- -----------------------
* Prices are based on index prices from the Mont Belvieu and Conway market
hubs that are weighted by natural gas liquids component and location mix.
Depreciation, Depletion and
Amortization ($ Millions) 14 14 13 13 54 13
- ----------------------------------------------------------------------------------------------- -----------------------
EMERGING BUSINESSES
2003 2004
----------------------------------- -----------------------
1st Qtr2nd Qtr3rd Qtr4th Qtr YTD 1st Qtr2nd 3rd 4th YTD
Qtr Qtr Qtr
----------------------------------- -----------------------
Emerging Businesses
Net Income (Loss) ($ Millions)* (34) (23) (18) (24) (99) (22)
=============================================================================================== =======================
Detail of Net Income (Loss) ($ Millions)
Technology Solutions (5) (6) (5) (4) (20) (4)
Gas-to-Liquids (20) (13) (7) (10) (50) (9)
Power 1 (1) (3) (2) (5) (4)
Other (10) (3) (3) (8) (24) (5)
- ----------------------------------------------------------------------------------------------- -----------------------
Total (34) (23) (18) (24) (99) (22)
=============================================================================================== =======================
CORPORATE AND OTHER
2003 2004
----------------------------------- -----------------------
1st Qtr2nd Qtr3rd Qtr4th Qtr YTD 1st Qtr2nd 3rd 4th YTD
Qtr Qtr Qtr
----------------------------------- -----------------------
Corporate and Other
Net Income (Loss) ($ Millions) (284) (225) (166) (202) (877) (177)
=============================================================================================== =======================
Detail of Net Income (Loss) ($ Millions)
Net interest expense (190) (145) (134) (163) (632) (104)
Corporate overhead (30) (43) (33) (67) (173) (55)
Discontinued operations 53 91 57 36 237 13
Merger-related costs (27) (115) (41) (40) (223) (14)
Accounting change (112) - - - (112) -
Other 22 (13) (15) 32 26 (17)
- ----------------------------------------------------------------------------------------------- -----------------------
Total (284) (225) (166) (202) (877) (177)
=============================================================================================== =======================
Before-Tax Net Interest Expense ($ Millions)
Interest and financing expense (339) (306) (314) (287)(1,246) (279)
Capitalized interest 73 78 98 77 326 115
Interest revenue 29 31 27 17 104 34
Premium on early debt retirement (12) (11) - (45) (68) -
- ----------------------------------------------------------------------------------------------- -----------------------
(249) (208) (189) (238) (884) (130)
=============================================================================================== =======================
Debt
Total Debt ($ Millions) 21,007 20,254 18,739 17,780 17,780 17,109
Debt-to-Capital Ratio 40% 38% 36% 34% 34% 32%
- ----------------------------------------------------------------------------------------------- -----------------------
Page 10 of 10