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): October 27, 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
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 27, 2004, ConocoPhillips issued a press release announcing
the company's financial and operating results for the quarter ended September
30, 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 hereto and incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 -- Press release issued by ConocoPhillips on
October 27, 2004.
99.2 -- Financial and operational tables.
99.3 -- Supplemental financial information.
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
October 27, 2004
EXHIBIT INDEX
Exhibit
No. Description
- -------- -----------
99.1 Press release issued by ConocoPhillips on October 27, 2004.
99.2 Financial and operational tables.
99.3 Supplemental financial information.
Exhibit 99.1
ConocoPhillips Reports Third Quarter Net Income of $2.0 Billion
HOUSTON--(BUSINESS WIRE)--Oct. 27, 2004--ConocoPhillips (NYSE:COP)
Earnings at a glance
Third Quarter Nine Months
- ----------------------------------------------------------------------
2004 2003 2004 2003
- ----------------------------------------------------------------------
Income
from
continuing
opera-
tions $2,011 million $1,249 million $5,627 million $3,608 million
Income
(loss)
from
discontinued
operations $ (5) $ 57 $ 70 $ 201
Cumulative
effect
of
changes
in
accounting
prin-
ciples $ - $ - $ - $ (95)
Net income $2,006 $1,306 $5,697 $3,714
- ----------------------------------------------------------------------
Diluted
income
per share
Income
from
continuing
opera-
tions $2.87 $1.82 $8.06 $5.28
Net
income $2.86 $1.90 $8.16 $5.43
- ----------------------------------------------------------------------
Revenues $34.7 billion $26.5 billion $96.8 billion $79.1 billion
- ----------------------------------------------------------------------
ConocoPhillips (NYSE:COP) today reported third quarter net income
of $2,006 million, an increase of 54 percent compared with $1,306
million for the same quarter in 2003. Net income per share for the
third quarter was $2.86, versus $1.90 for the same period a year ago.
Total revenues were $34.7 billion, versus $26.5 billion a year ago.
Income from continuing operations for the third quarter was $2,011
million, an increase of 61 percent compared with $1,249 million for
the same period a year ago. Income from continuing operations per
share for the third quarter of 2004 was $2.87, compared with $1.82 for
the third quarter of 2003.
"We had a good quarter," said Jim Mulva, chairman and chief
executive officer. "Upstream, we ran well, producing 1.48 million
barrels of oil equivalent per day. Downstream, our refineries ran at
94 percent of capacity, slightly higher than last quarter. At the same
time, we completed significant planned maintenance in our upstream
business and elected to accelerate turnarounds at two refineries.
During the quarter, we recognized higher exploration expenses, as well
as certain refining and marketing contingency accruals and
impairments. Our quarterly results continued to benefit from the
strong commodity price environment.
"Our financial position continues to steadily improve, and our
return on capital employed remains strong and competitive. We ended
the quarter with a debt-to-capital ratio of 28 percent. During the
quarter, we generated $4.4 billion in cash from operations, invested
$1.6 billion in capital projects, paid $296 million in dividends, and
increased our cash balance to approximately $3.3 billion in
anticipation of the capital investment in the LUKOIL strategic
alliance."
For the first nine months of 2004, net income was $5,697 million,
a 53 percent improvement when compared with $3,714 million for 2003.
Net income per share was $8.16 for the first nine months of 2004,
versus $5.43 for the 2003 period. Income from continuing operations
was $5,627 million, a 56 percent increase over $3,608 million for the
same period a year ago. Income from continuing operations per share
for the first nine months of 2004 was $8.06, compared with $5.28 for
the first nine months of 2003. Total revenues were $96.8 billion,
versus $79.1 billion a year ago.
The results of ConocoPhillips' business segments follow.
Exploration & Production (E&P)
Third quarter financial results: E&P income from continuing
operations in the third quarter was $1,420 million, up from $1,354
million in the second quarter of 2004 and up from $967 million in the
third quarter of 2003. The increase from the second quarter was
primarily the result of higher crude oil prices, as the impact of
reduced production was mostly offset by sales volumes, which exceeded
production by 19,000 barrels per day. The increased earnings were
partially offset by the impact of reduced benefits from tax law
changes in the second quarter and reduced foreign exchange gains
during the third quarter. In addition, third quarter results were
impacted by higher pre-tax exploration expenses totaling $205 million,
which included the write-off of the Zafar-Mashal well, as well as
certain leasehold impairments. Improved results from the third quarter
of 2003 were primarily due to higher crude oil and natural gas prices,
partially offset by reduced gains on asset sales and lower volumes.
ConocoPhillips' daily production for the quarter averaged 1.48
million barrels of oil equivalent (BOE) per day, including Canadian
Syncrude. When compared with the second quarter, increased output from
Bayu-Undan in the Timor Sea was more than offset by the impact of
scheduled maintenance in Alaska and the North Sea, as well as normal
seasonal declines. While the company's production volumes declined by
5 percent from the prior quarter, sales volumes experienced only a
slight decline. When compared with the third quarter of 2003, volumes
were lower, primarily due to asset sales and scheduled maintenance,
partially offset by increased production from Bayu-Undan and Vietnam.
Nine months financial results: E&P income from continuing
operations for the first nine months of 2004 was $4,031 million, up
from $3,169 million in 2003, primarily due to higher realized
worldwide crude oil and natural gas prices, partially offset by lower
volumes largely associated with asset sales, higher exploration costs,
and reduced gains on asset sales.
Midstream
Third quarter financial results: Midstream income from continuing
operations was $38 million, down from $42 million in the second
quarter of 2004 and up from $31 million in the third quarter of 2003.
Contributing to the decrease from the prior quarter were $12 million
in impairment charges at Duke Energy Field Services, LLC (DEFS),
related to assets held for sale and certain other impairments. The
increase over the third quarter of 2003 was primarily due to higher
natural gas liquids prices for both DEFS and the company's
consolidated operations, partially offset by lower volumes in the
company's consolidated operations associated with asset sales and
increased impairments in DEFS.
Nine months financial results: Midstream operating results
increased to $135 million, from $87 million in 2003. The increase was
primarily the result of higher natural gas liquids prices in both DEFS
and the company's consolidated operations, partially offset by lower
volumes associated with asset sales and inventory impacts in the
company's consolidated operations.
Refining and Marketing (R&M)
Third quarter financial results: R&M income from continuing
operations was $708 million, down from $818 million in the previous
quarter and up from $485 million in the third quarter of 2003. The
decrease in third quarter R&M earnings, compared with the second
quarter of 2004, was primarily driven by lower U.S. refining margins,
and worldwide marketing margins, partially offset by improved
international refining volumes and margins, as well as favorable U.S.
inventory impacts. In addition, third quarter results were negatively
impacted approximately $40 million, after-tax, by certain contingency
and impairment charges.
Overall, the company's third quarter refinery crude oil capacity
utilization rate averaged 94 percent, compared with 93 percent last
quarter. Driving this increase was the improvement in international
utilization rates to 99 percent from 69 percent. The U.S. utilization
rate was 93 percent, despite the impact of accelerated turnarounds at
the Bayway and Sweeny refineries, and a planned crude unit turnaround
at the Lake Charles refinery. Third quarter turnaround costs of $57
million, before-tax, were higher than expected due to accelerated
turnarounds, but lower than the $78 million in the second quarter of
2004.
Contributing to the improved results over the third quarter of
2003 were higher worldwide refining margins, partially offset by lower
worldwide marketing margins, and increased contingency and impairment
charges, as well as turnaround and energy costs.
Nine months financial results: R&M income from continuing
operations for the first nine months of 2004 increased to $1,990
million, compared with $1,195 million in the same period a year ago.
Contributing to the increased earnings were higher worldwide refining
margins, partially offset by lower worldwide marketing margins, and
increased contingency and impairment charges, as well as turnaround
and energy costs.
Chemicals
Third quarter financial results: The Chemicals segment, which
includes the company's 50 percent interest in Chevron Phillips
Chemical Company LLC, reported income from continuing operations of
$81 million, compared with $46 million in the second quarter of 2004
and $7 million in the third quarter of 2003. The improvement from the
second quarter was largely due to improved margins, particularly in
the international aromatics and styrenics business line, as well as
lower maintenance costs. The increase from the third quarter of 2003
reflects improved margins and volumes in olefins and polyolefins, as
well as improved margins in the aromatics and styrenics business line.
Nine months financial results: During the first nine months of
2004, the Chemicals segment had income from continuing operations of
$166 million, compared with a loss of $4 million for the same period a
year ago. The increase is primarily attributable to higher margins and
volumes in the olefins and polyolefins business lines, as well as
improved margins in the aromatics and styrenics business line.
Emerging Businesses
The Emerging Businesses segment had a loss from continuing
operations of $27 million in the third quarter of 2004, compared with
losses of $29 million in the second quarter of 2004 and $18 million in
the third quarter of 2003. The higher losses from the third quarter of
2003 were primarily attributable to lower U.S. power margins and
increased costs associated with the commissioning and operation of the
Immingham combined heat and power plant in the United Kingdom.
Corporate and Other
Third quarter after-tax Corporate expenses from continuing
operations were $209 million, compared with $218 million in the
previous quarter and $223 million in the third quarter of 2003. The
decrease over the second quarter was primarily driven by lower net
interest expense, and increased foreign exchange gains, partially
offset by approximately $43 million after-tax of increased early
retirement of debt premiums paid during the quarter. The decrease from
the third quarter of 2003 was primarily the result of reduced
merger-related costs and higher foreign exchange gains, partially
offset by the increased early retirement of debt premiums paid during
the third quarter of 2004.
Total debt at the end of the third quarter was $15.5 billion,
compared with $15.6 billion at the end of the previous quarter and
$2.3 billion below year-end 2003. At the end of the third quarter, the
company's debt-to-capital ratio was 28 percent, down from 29 percent
at the end of the second quarter. The company increased its cash
balance from $804 million to $3.3 billion in anticipation of the
capital investment in the LUKOIL strategic alliance.
The company's third quarter effective tax rate of 45 percent was
higher than that of the second quarter, primarily due to a higher
proportion of income in high-rate tax jurisdictions, generally
associated with the company's international upstream operations.
Discontinued Operations
Third quarter financial results: Third quarter losses from
discontinued operations were $5 million, compared with income of $62
million in the second quarter of 2004 and income of $57 million in the
third quarter of 2003. The decreases in both periods were primarily
related to the impacts of asset sales.
Nine months financial results: During the first nine months of
2004, income from discontinued operations was $70 million, compared
with $201 million for the same period a year ago. The decrease is
primarily attributable to the impacts of asset sales.
Outlook
Mr. Mulva concluded:
"Execution of the 2004 operating plan by our major business
segments during a period of high commodity prices resulted in another
quarter of strong earnings and cash flow. We have made significant
progress on our 2004 objectives and continue to apply capital and cost
discipline, regardless of the price environment. Capital spending
associated with our major projects continues as planned. In addition,
we recently announced a 16 percent increase in our quarterly dividend
rate.
"As we announced in late September, the strategic alliance with
LUKOIL, a leading international integrated oil and gas company in
Russia, represents an important step for our company. This transaction
is consistent with our E&P strategy of increasing reserves and
production growth in new legacy areas at attractive costs, and is
expected to provide access to possible substantial future reserve
additions.
"We expect our production in the fourth quarter to increase as
startup of the Hamaca upgrader has begun, and as the Magnolia project
begins production later in the quarter. We anticipate full-year daily
production to average about 1.56 million BOE.
"The size and scope of our downstream asset base allows us to
optimize planned downtime and stage projects to best use our
resources, which is particularly important in the environment of
strong margins. We have planned extensive crude unit turnaround
activity during the fourth quarter, but expect our overall refinery
crude oil capacity utilization rate to remain in the mid 90-percent
range. In addition, we will continue to focus on our five-year, $2
billion clean fuels program.
"We look forward to updating the financial community on the status
of our business and operating plans at our November 17 analyst meeting
in New York."
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had
approximately 35,800 employees, $89 billion of assets, and $129
billion of annualized revenues as of Sept. 30, 2004. For more
information, go to www.conocophillips.com.
ConocoPhillips' quarterly conference call is scheduled for 10 a.m.
Central today.
To listen to the conference call and to view related presentation
materials, go to www.conocophillips.com and click on the "Third
Quarter Earnings" link.
For financial and operational tables, go to
www.conocophillips.com/news/nr/earnings/highlights/3q04earnings.html
For detailed supplemental information, go to
www.conocophillips.com/news/nr/earnings/detail/3q04summary.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 "(the
strategic alliance with LUKOIL) ... is expected to provide access to
possible substantial future reserve additions"; "we expect our
production in the fourth quarter to increase as startup of the Hamaca
upgrader has begun, and as the Magnolia project begins production
later in the quarter"; "we anticipate full-year daily production to
average about 1.56 million BOE"; and "we have planned extensive crude
unit turnaround activity during the fourth quarter, but expect our
overall refinery crude oil capacity utilization rate to remain in the
mid 90-percent range" 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 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, Houston, Texas 77079 or on the company's Web site at
www.conocophillips.com. This information can also be obtained from the
SEC by calling 1-800-SEC-0330 or on the SEC's Web site at www.sec.gov.
CONTACT: ConocoPhillips, Houston
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 Nine Months Ended
September 30 September 30
------------------------- ---------------------
2004 2003** 2004 2003**
------------ ---------- -------- ---------
REVENUES
Sales and other operating revenues* $ 34,337 26,105 95,652 78,366
Equity in earnings of affiliates 389 186 980 391
Other income 15 202 212 378
--------- -------- -------- --------
34,741 26,493 96,844 79,135
--------- -------- -------- -------
COSTS AND EXPENSES
Purchased crude oil and products 23,100 16,826 63,198 50,884
Production and operating expenses 1,811 1,725 5,323 5,225
Selling, general and administrative expenses 525 551 1,502 1,601
Exploration expenses 205 132 511 390
Depreciation, depletion and amortization 938 858 2,768 2,574
Property impairments 12 18 63 192
Taxes other than income taxes* 4,336 3,807 12,878 10,853
Accretion on discounted liabilities 49 39 126 107
Interest and debt expense 101 190 405 647
Foreign currency transaction (gains) losses (4) 34 (53) 14
Minority interests 8 3 29 16
--------- -------- -------- -------
31,081 24,183 86,750 72,503
--------- -------- -------- -------
Income from continuing operations before income
taxes and subsidiary equity transactions 3,660 2,310 10,094 6,632
Gain on subsidiary equity transactions -- -- -- 28
--------- -------- -------- -------
Income from continuing operations before income
taxes 3,660 2,310 10,094 6,660
Provision for income taxes 1,649 1,061 4,467 3,052
--------- -------- -------- -------
INCOME FROM CONTINUING OPERATIONS 2,011 1,249 5,627 3,608
Income (loss) from discontinued operations (5) 57 70 201
--------- -------- -------- -------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES 2,006 1,306 5,697 3,809
Cumulative effect of changes in accounting principles -- -- -- (95)
--------- -------- -------- -------
NET INCOME $ 2,006 1,306 5,697 3,714
========= ======== ======== =======
INCOME (LOSS) PER SHARE OF COMMON STOCK
Basic
Continuing operations $ 2.91 1.84 8.16 5.30
Discontinued operations (0.01) 0.08 0.11 0.30
Before cumulative effect of changes in accounting
principles 2.90 1.92 8.27 5.60
Cumulative effect of changes in accounting principles -- -- -- (0.14)
Net income $ 2.90 1.92 8.27 5.46
Diluted
Continuing operations $ 2.87 1.82 8.06 5.28
Discontinued operations (0.01) 0.08 0.10 0.29
Before cumulative effect of changes in accounting
principles 2.86 1.90 8.16 5.57
Cumulative effect of changes in accounting principles -- -- -- (0.14)
Net income $ 2.86 1.90 8.16 5.43
AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
Basic 691,826 680,689 689,214 680,089
Diluted 701,716 686,263 698,519 684,248
*Includes excise taxes on petroleum products sales: $ 4,079 3,580 12,073 10,115
**Restated for adoption of FIN 46 and reclassified to conform to current year presentation.
1-1
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
Three Months Ended Nine Months Ended
September 30 September 30
------------------- -------------------
2004 2003 2004 2003
-------- -------- ------ --------
INCOME/(LOSS) FROM CONTINUING OPERATIONS
E&P
United States $ 701 546 2,007 1,741
International 719 421 2,024 1,428
------- ----- ------ ------
Total E&P 1,420 967 4,031 3,169
------- ----- ------ ------
Midstream 38 31 135 87
------- ----- ------ ------
R&M
United States 505 416 1,642 939
International 203 69 348 256
------- ----- ------ ------
Total R&M 708 485 1,990 1,195
------- ----- ------ ------
Chemicals 81 7 166 (4)
Emerging Businesses (27) (18) (78) (75)
Corporate and other (209) (223) (617) (764)
------- ----- ------ ------
Consolidated $ 2,011 1,249 5,627 3,608
======= ===== ====== =======
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/(LOSS) FROM DISCONTINUED OPERATIONS
Corporate and other (5) 57 70 201
SUMMARY OF NET INCOME/(LOSS)
E&P
United States $ 701 546 2,007 1,883
International 719 421 2,024 1,428
------- ----- ------ ------
Total E&P 1,420 967 4,031 3,311
------- ----- ------ ------
Midstream 38 31 135 87
------- ----- ------ ------
R&M
United States 505 416 1,642 814
International 203 69 348 256
------- ----- ------ ------
Total R&M 708 485 1,990 1,070
------- ----- ------ ------
Chemicals 81 7 166 (4)
Emerging Businesses (27) (18) (78) (75)
Corporate and other (214) (166) (547) (675)
------- ----- ------ ------
Net income $ 2,006 1,306 5,697 3,714
======= ===== ====== ======
1-2
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
2004 2003 2004 2003
INCOME FROM CONTINUING OPERATIONS
Effective tax rate % 45.1% 45.9 44.3 45.8
Millions of Dollars
FOREIGN CURRENCY GAINS/(LOSSES)
AFTER-TAX
E&P $ (4) (12) 15 (28)
Midstream -- -- -- --
R&M (5) (7) 1 4
Chemicals -- -- -- --
Emerging Businesses (1) (1) -- (1)
Corporate and other 15 2 21 21
------- ------- ------ ------
$ 5 (18) 37 (4)
======= ======= ====== ======
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $ 2,011 1,249 5,627 3,608
Depreciation, depletion and amortization 938 858 2,768 2,574
Property impairments 12 18 63 192
Dry hole costs and leasehold impairment 150 75 342 169
Accretion on discounted liabilities 49 39 126 107
Deferred income taxes 328 80 998 333
Undistributed equity earnings (263) (143) (541) (191)
Net (gain) loss on asset dispositions 6 (142) (82) (226)
Other (30) (88) 105 (126)
Working capital changes 1,267 51 (611) 703
------- ------- ------ ------
Net cash provided by continuing operations 4,468 1,997 8,795 7,143
Net cash provided by (used in) discontinued
operations (55) 61 (33) 181
------- ------- ------ ------
Net cash provided by operating activities $ 4,413 2,058 8,762 7,324
======= ======= ====== ======
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $ 332 353 946 1,060
International 916 756 2,751 2,228
------- ------- ------ ------
1,248 1,109 3,697 3,288
Midstream 1 2 6 6
R&M 277 302 770 750
Chemicals -- -- -- --
Emerging Businesses 19 60 74 224
Corporate and other* 49 47 112 117
------- ------- ------ ------
$ 1,594 1,520 4,659 4,385
======= ======= ====== ======
*Excludes discontinued operations
OTHER
At September 30, 2004 At December 31, 2003
Total debt $15,486 17,780
Common stockholders' equity $39,767 34,366
1-3
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended Nine Months Ended
September 30 September 30
------------------- -----------------
2004 2003 2004 2003
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 253 314 293 327
Lower 48 50 51 51 56
-------- ----- --- -----
303 365 344 383
Norway 189 207 205 215
United Kingdom 59 67 64 79
Canada 24 29 25 31
China 25 25 28 25
Indonesia 14 16 15 18
Vietnam 35 11 32 14
Timor Sea 29 3 17 3
Other 55 70 60 73
-------- ----- --- -----
Total consolidated 733 793 790 841
Equity affiliates 111 120 109 97
-------- ----- --- -----
Total Worldwide 844 913 899 938
======== ====== === =====
Syncrude 22 22 22 19
======= ====== === =====
Natural gas liquids produced
United States
Alaska* 19 19 23 22
Lower 48 26 25 25 24
-------- ----- --- -----
45 44 48 46
Norway 8 7 8 8
Canada 10 9 11 10
Other 24 2 14 4
-------- ----- --- -----
Total Worldwide 87 62 81 68
======== ===== === =====
*Includes reinjected volumes sold lease-to-lease. 10 13 14 14
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 164 180 166 177
Lower 48 1,220 1,271 1,226 1,306
-------- ----- ----- -----
1,384 1,451 1,392 1,483
Norway 274 216 299 265
United Kingdom 720 853 807 935
Canada 425 448 430 436
Timor Sea 35 61 35 61
Indonesia 248 275 244 248
Vietnam 15 -- 16 --
Other 78 69 75 59
-------- ----- ----- -----
Total consolidated 3,179 3,373 3,298 3,487
Equity affiliates 4 11 5 11
-------- ----- ----- -----
Total Worldwide 3,183 3,384 3,303 3,498
======== ===== ===== ======
*Represents quantities available for sale.
Excludes gas equivalent of NGL shown above.
Liquefied natural gas sales 115 121 105 114
1-4
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ---------------------
2004 2003 2004 2003
------- ------ ---- ----
E&P (continued)
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $ 40.48 28.31 36.41 28.99
Lower 48 39.56 27.94 35.21 28.98
Total U.S. 40.33 28.26 36.23 28.99
International 40.47 28.05 35.64 28.22
Total consolidated 40.41 28.15 35.90 28.57
Equity affiliates 25.86 19.90 22.93 18.84
Total Worldwide 38.77 27.00 34.34 27.55
Natural gas-lease (per MCF)
United States
Alaska 2.22 1.33 2.38 1.71
Lower 48 5.29 4.61 5.26 4.98
Total U.S. 5.19 4.45 5.14 4.83
International 3.98 3.42 3.97 3.63
Total consolidated 4.48 3.84 4.44 4.11
Equity affiliates 0.31 4.12 2.59 4.61
Total Worldwide 4.48 3.84 4.44 4.12
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 28 50 35 51
International 49 47 43 44
Equity affiliates
United States* 111 111 111 111
International 6 7 6 7
------- ------ ---- ----
194 215 195 213
======= ====== ==== ====
*Represents 30.3 percent interest in Duke Energy Field Services LLC (DEFS).
Per Barrel
U.S. product prices
Weighted average NGL**
Consolidated $ 31.03 20.94 27.71 22.51
DEFS 30.27 20.67 26.90 21.91
**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.
1-5
ConocoPhillips
Houston, Texas 77079
Three Months Ended Nine Months Ended
September 30 September 30
--------------------- ---------------------
2004 2003 2004 2003
---- ---- ---- ----
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,160 2,168 2,165 2,168
Crude oil runs 2,011 2,083 2,078 2,073
Refinery production 2,198 2,322 2,248 2,311
International*
Crude oil capacity 428 442 441 442
Crude oil runs 425 417 381 430
Refinery production 439 413 389 419
U.S. Petroleum products outside sales
Gasoline 1,366 1,398 1,337 1,370
Distillates 544 580 551 590
Aviation fuels 200 197 190 176
Other products 553 497 548 499
------- ------ ------ ------
2,663 2,672 2,626 2,635
International 472 441 470 439
------- ------ ------ ------
3,135 3,113 3,096 3,074
======= ====== ====== ======
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $ 1.37 1.09 1.31 1.07
Automotive gasoline-retail 1.51 1.42 1.48 1.38
Distillates-wholesale 1.30 0.88 1.18 0.93
*Includes ConocoPhillips' share of equity affiliates.
**Excludes excise taxes.
1-6
Exhibit 99.3
CONOCOPHILLIPS
SUMMARY OF NET INCOME (LOSS) BY SEGMENT
Millions of Dollars
------------------------------------------------------------------------------------
2003 2004
------------------------------------------ ----------------------------------------
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 678 517 546 491 2,232 635 671 701 2,007
International E&P 447 560 421 500 1,928 622 683 719 2,024
- ---------------------------------------------------------------------------- ----------------------------------------
Total E&P 1,125 1,077 967 991 4,160 1,257 1,354 1,420 4,031
- ---------------------------------------------------------------------------- ----------------------------------------
Midstream 31 25 31 43 130 55 42 38 135
- ---------------------------------------------------------------------------- ----------------------------------------
U.S. R&M 275 248 416 176 1,115 403 734 505 1,642
International R&M 114 73 69 26 282 61 84 203 348
- ---------------------------------------------------------------------------- ----------------------------------------
Total R&M 389 321 485 202 1,397 464 818 708 1,990
- ---------------------------------------------------------------------------- ----------------------------------------
Chemicals (23) 12 7 11 7 39 46 81 166
Emerging Businesses (34) (23) (18) (24) (99) (22) (29) (27) (78)
Corporate and Other (225) (316) (223) (238) (1,002) (190) (218) (209) (617)
- ---------------------------------------------------------------------------- ----------------------------------------
Consolidated 1,263 1,096 1,249 985 4,593 1,603 2,013 2,011 5,627
============================================================================ ========================================
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 62 (5) 70
============================================================================ ========================================
Net Income (Loss)
U.S. E&P 820 517 546 491 2,374 635 671 701 2,007
International E&P 447 560 421 500 1,928 622 683 719 2,024
- ---------------------------------------------------------------------------- ----------------------------------------
Total E&P 1,267 1,077 967 991 4,302 1,257 1,354 1,420 4,031
- ---------------------------------------------------------------------------- ----------------------------------------
Midstream 31 25 31 43 130 55 42 38 135
- ---------------------------------------------------------------------------- ----------------------------------------
U.S. R&M 150 248 416 176 990 403 734 505 1,642
International R&M 114 73 69 26 282 61 84 203 348
- ---------------------------------------------------------------------------- ----------------------------------------
Total R&M 264 321 485 202 1,272 464 818 708 1,990
- ---------------------------------------------------------------------------- ----------------------------------------
Chemicals (23) 12 7 11 7 39 46 81 166
Emerging Businesses (34) (23) (18) (24) (99) (22) (29) (27) (78)
Corporate and Other (284) (225) (166) (202) (877) (177) (156) (214) (547)
- ---------------------------------------------------------------------------- ----------------------------------------
Consolidated 1,221 1,187 1,306 1,021 4,735 1,616 2,075 2,006 5,697
============================================================================ ========================================
Page 1 of 10
CONOCOPHILLIPS
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
Millions of Dollars
------------------------------------------------------------------------------------
2003 2004
------------------------------------------ ----------------------------------------
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 1,050 803 853 757 3,463 987 1,049 1,057 3,093
International E&P 1,260 967 1,029 941 4,197 1,410 1,360 1,654 4,424
- ---------------------------------------------------------------------------- ----------------------------------------
Total E&P 2,310 1,770 1,882 1,698 7,660 2,397 2,409 2,711 7,517
- ---------------------------------------------------------------------------- ----------------------------------------
Midstream 51 42 50 70 213 86 66 62 214
- ---------------------------------------------------------------------------- ----------------------------------------
U.S. R&M 453 396 639 279 1,767 636 1,149 803 2,588
International R&M 150 94 86 16 346 79 111 268 458
- ---------------------------------------------------------------------------- ----------------------------------------
Total R&M 603 490 725 295 2,113 715 1,260 1,071 3,046
- ---------------------------------------------------------------------------- ----------------------------------------
Chemicals (44) 15 10 14 (5) 49 56 99 204
Emerging Businesses (51) (34) (29) (36) (150) (34) (42) (44) (120)
Corporate and Other (300) (502) (328) (364) (1,494) (249) (279) (239) (767)
- ---------------------------------------------------------------------------- ----------------------------------------
Consolidated 2,569 1,781 2,310 1,677 8,337 2,964 3,470 3,660 10,094
============================================================================ ========================================
Income from Continuing Operations
Effective Tax Rates
U.S. E&P 35.4% 35.6% 36.0% 35.1% 35.5% 35.7% 36.0% 33.7% 35.1%
International E&P 64.5% 42.1% 59.1% 46.9% 54.1% 55.9% 49.8% 56.5% 54.2%
- ---------------------------------------------------------------------------- ----------------------------------------
Total E&P 51.3% 39.2% 48.6% 41.6% 45.7% 47.6% 43.8% 47.6% 46.4%
- ---------------------------------------------------------------------------- ----------------------------------------
Midstream 39.2% 40.5% 38.0% 38.6% 39.0% 36.0% 36.4% 38.7% 36.9%
- ---------------------------------------------------------------------------- ----------------------------------------
U.S. R&M 39.3% 37.4% 34.9% 36.9% 36.9% 36.6% 36.1% 37.1% 36.6%
International R&M 24.0% 22.3% 19.8% -62.5% 18.5% 22.8% 24.3% 24.3% 24.0%
- ---------------------------------------------------------------------------- ----------------------------------------
Total R&M 35.5% 34.5% 33.1% 31.5% 33.9% 35.1% 35.1% 33.9% 34.7%
- ---------------------------------------------------------------------------- ----------------------------------------
Chemicals 47.7% 20.0% 30.0% 21.4% 240.0% 20.4% 17.9% 18.2% 18.6%
Emerging Businesses 33.3% 32.4% 37.9% 33.3% 34.0% 35.3% 31.0% 38.6% 35.0%
Corporate and Other 25.0% 37.1% 32.0% 34.6% 32.9% 23.7% 21.9% 12.6% 19.6%
- ---------------------------------------------------------------------------- ----------------------------------------
Consolidated 50.8% 38.5% 45.9% 41.3% 44.9% 45.9% 42.0% 45.1% 44.3%
============================================================================ ========================================
Page 2 of 10
CONOCOPHILLIPS
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX)
Millions of Dollars
------------------------------------------------------------------------------------
2003 2004
------------------------------------------ ----------------------------------------
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 - (14) (10) (18) (42) (3) - - (3)
Tax credit utilization - - - - - - - 22 22
Pending claims and settlements - (20) - - (20) - - - -
- ---------------------------------------------------------------------------- ----------------------------------------
Total - (18) 55 (18) 19 (3) - 22 19
- ---------------------------------------------------------------------------- ----------------------------------------
International E&P
Gain (loss) on asset sales - - 33 - 33 56 (13) - 43
Property impairments (12) (32) - (18) (62) - - (1) (1)
Canada tax law change - - - 95 95 - 31 - 31
Norway Removal Grant Act (1986) repeal* - 87 - - 87 - - - -
Bayu-Undan ownership realignment - 51 - - 51 - - - -
Angola leasehold impairment - - - 12 12 - - - -
- ---------------------------------------------------------------------------- ----------------------------------------
Total (12) 106 33 89 216 56 18 (1) 73
- ---------------------------------------------------------------------------- ----------------------------------------
Total E&P (12) 88 88 71 235 53 18 21 92
- ---------------------------------------------------------------------------- ----------------------------------------
Midstream
Property impairments - - - - - (12) (10) - (22)
- ---------------------------------------------------------------------------- ----------------------------------------
Total - - - - - (12) (10) - (22)
- ---------------------------------------------------------------------------- ----------------------------------------
U.S. R&M
Gain (loss) on asset sales - - - - - - - - -
Property impairments - - - (1) (1) (5) - (6) (11)
Pending claims and settlements - - - - - - - (34) (34)
- ---------------------------------------------------------------------------- ----------------------------------------
Total - - - (1) (1) (5) - (40) (45)
- ---------------------------------------------------------------------------- ----------------------------------------
International R&M
Gain (loss) on asset sales - - - - - - - - -
Property impairments - - - - - - - - -
Other - - - - - - - - -
- ---------------------------------------------------------------------------- ----------------------------------------
Total - - - - - - - - -
- ---------------------------------------------------------------------------- ----------------------------------------
Total R&M - - - (1) (1) (5) - (40) (45)
- ---------------------------------------------------------------------------- ----------------------------------------
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) - - (14)
Premium on early debt retirement (10) (9) - (34) (53) - - (43) (43)
Other - - - - - - - - -
- ---------------------------------------------------------------------------- ----------------------------------------
Total (3) (127) (41) (74) (245) (14) - (43) (57)
- ---------------------------------------------------------------------------- ----------------------------------------
Total Company (15) (39) 47 (4) (11) 22 8 (62) (32)
======================================================================================================================
* Net of $21 million of property impairments.
Page 3 of 10
CONOCOPHILLIPS
CASH FLOW INFORMATION
Millions of Dollars
------------------------------------------------------------------------------------
2003 2004
------------------------------------------ ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------ ----------------------------------------
Cash Flows from Operating Activities
Income from continuing operations 1,263 1,096 1,249 985 4,593 1,603 2,013 2,011 5,627
DD&A and property impairments 887 1,003 876 971 3,737 949 932 950 2,831
Dry hole costs and
leasehold impairment 40s 54 75 131 300 87 105 150 342
Accretion on discounted liabilities 33 35 39 38 145 36 41 49 126
Deferred income taxes 243 10 80 68 401 360 310 328 998
Undistributed equity earnings 18 (66) (143) 132 (59) (181) (97) (263) (541)
Net (gain) loss on asset
dispositions (56) (28) (142) 15 (211) (82) (6) 6 (82)
Other 56 (94) (88) (202) (328) 70 65 (30) 105
Net working capital changes 636 16 51 (114) 589 (777) (1,101) 1,267 (611)
Discontinued operations - 120 61 8 189 8 14 (55) (33)
- ---------------------------------------------------------------------------- ----------------------------------------
Net Cash Provided by
Operating Activities 3,120 2,146 2,058 2,032 9,356 2,073 2,276 4,413 8,762
- ---------------------------------------------------------------------------- ----------------------------------------
Cash Flows from Investing Activities
Capital expenditures
and investments:
E&P (1,012) (1,167) (1,109) (1,220) (4,508) (1,210) (1,239) (1,248) (3,697)
Midstream (2) (2) (2) (4) (10) (3) (2) (1) (6)
R&M (203) (245) (302) (429) (1,179) (215) (278) (277) (770)
Chemicals - - - - - - - - -
Emerging Businesses (66) (98) (60) (60) (284) (28) (27) (19) (74)
Corporate and Other (25) (45) (47) (71) (188) (25) (38) (49) (112)
- ---------------------------------------------------------------------------- ----------------------------------------
Total capital expenditures
& invesments (1,308) (1,557) (1,520) (1,784) (6,169) (1,481) (1,584) (1,594) (4,659)
Acquisitions, net of
cash acquired - - - - - - - - -
Acquisitions - adoption of FIN 46 225 - - - 225 - - 11 11
Proceeds from asset dispositions 125 466 913 1,155 2,659 449 905 73 1,427
Long-term advances to affiliates
and other investments (28) (8) 38 21 23 (44) 9 30 (5)
Discontinued operations (26) (5) (28) (177) (236) (1) (1) - (2)
- ---------------------------------------------------------------------------- ----------------------------------------
Net Cash Used for Investing
Activities (1,012) (1,104) (597) (785) (3,498) (1,077) (671) (1,480) (3,228)
- ---------------------------------------------------------------------------- ----------------------------------------
Cash Flows from Financing Activities
Net issuance (repayment) of debt (1,569) (709) (1,514) (1,019) (4,811) (722) (1,361) (221) (2,304)
Issuance of stock 19 14 20 55 108 112 95 62 269
Dividends (271) (272) (272) (292) (1,107) (294) (296) (296) (886)
Other (8) 19 64 36 111 89 94 (66) 117
- ---------------------------------------------------------------------------- ----------------------------------------
Net Cash Provided by (Used for)
Financing Activities (1,829) (948) (1,702) (1,220) (5,699) (815) (1,468) (521) (2,804)
- ---------------------------------------------------------------------------- ----------------------------------------
Effect of Exchange Rate Changes 57 13 (26) (20) 24 (12) 8 47 43
- ---------------------------------------------------------------------------- ----------------------------------------
Net Change in Cash
and Cash Equivalents 336 107 (267) 7 183 169 145 2,459 2,773
Cash and cash equivalents
at beginning of period 307 643 750 483 307 490 659 804 490
- ---------------------------------------------------------------------------- ----------------------------------------
Cash and Cash Equivalents
at End of Period 643 750 483 490 490 659 804 3,263 3,263
============================================================================ ========================================
Page 4 of 10
CONOCOPHILLIPS
TOTAL E&P
2003 2004
------------------------------------------ ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------ ----------------------------------------
E&P Net Income ($ Millions) 1,267 1,077 967 991 4,302 1,257 1,354 1,420 4,031
============================================================================ ========================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 1,626 1,641 1,561 1,611 1,609 1,611 1,563 1,484 1,553
- ---------------------------------------------------------------------------- ----------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated 880 850 793 806 832 828 809 733 790
Equity affiliates 55 117 120 116 102 113 104 111 109
- ---------------------------------------------------------------------------- ----------------------------------------
Total 935 967 913 922 934 941 913 844 899
============================================================================ ========================================
Sales of crude oil produced (MB/D) 911 996 917 921 936 928 888 873 896
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids (MB/D) 71 72 62 72 69 76 79 87 81
- ----------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 3,605 3,485 3,373 3,581 3,510 3,415 3,299 3,179 3,298
Equity affiliates 12 11 11 12 12 9 4 4 5
- ---------------------------------------------------------------------------- ----------------------------------------
Total 3,617 3,496 3,384 3,593 3,522 3,424 3,303 3,183 3,303
============================================================================ ========================================
Canadian Syncrude (MB/D) 17 19 22 18 19 23 20 22 22
- ---------------------------------------------------------------------------- ----------------------------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 34.06 29.02 30.18 31.17 31.11 35.23 38.31 43.86 39.13
Brent dated 31.51 26.03 28.41 29.42 28.84 31.95 35.36 41.54 36.28
Natural Gas--Henry Hub
1st of month ($/mcf) 6.58 5.40 4.97 4.60 5.39 5.69 6.00 5.75 5.81
- ---------------------------------------------------------------------------- ----------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated 31.27 26.33 28.15 28.43 28.54 32.08 35.32 40.41 35.90
Equity affiliates 20.97 16.85 19.90 17.86 18.58 18.68 25.00 25.86 22.93
Total 30.73 25.19 27.00 27.24 27.47 30.35 34.11 38.77 34.34
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids ($/bbl) 24.65 19.73 20.10 23.36 21.95 25.43 26.71 30.73 27.94
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas ($/mcf)*
Consolidated 4.50 3.99 3.84 3.99 4.08 4.41 4.43 4.48 4.44
Equity affiliates 4.82 4.89 4.12 3.96 4.44 3.91 0.31 0.31 2.59
Total 4.50 3.99 3.84 3.99 4.08 4.41 4.43 4.48 4.44
- ---------------------------------------------------------------------------- ----------------------------------------
* Certain amounts in 2003 and first two quarters of 2004 restated to conform to current period presentation.
Exploration Charges ($ Millions)
Dry Holes 20 30 39 78 167 67 42 82 191
Lease Impairments 20 24 36 53 133 20 63 68 151
- ---------------------------------------------------------------------------- ----------------------------------------
Total Non-Cash Charges 40 54 75 131 300 87 105 150 342
Other (G&G and Lease Rentals) 76 88 57 80 301 56 58 55 169
- ---------------------------------------------------------------------------- ----------------------------------------
Total Exploration Charges 116 142 132 211 601 143 163 205 511
============================================================================ ========================================
Depreciation, Depletion and
Amortization ($ Millions) 662 652 653 695 2,662 704 720 711 2,135
- ---------------------------------------------------------------------------- ----------------------------------------
Page 5 of 10
CONOCOPHILLIPS
U.S. E&P
2003 2004
------------------------------------------ ----------------------------------------
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) 820 517 546 491 2,374 635 671 701 2,007
============================================================================ ========================================
Alaska ($ Millions) 508 302 302 333 1,445 403 397 451 1,251
- ---------------------------------------------------------------------------- ----------------------------------------
Lower 48 ($ Millions) 312 215 244 158 929 232 274 250 756
- ---------------------------------------------------------------------------- ----------------------------------------
Production
Total U.S. (MBOE/D) 700 683 651 664 674 659 637 579 624
- ---------------------------------------------------------------------------- ----------------------------------------
Crude Oil and Condensate (MB/D)
Alaska 337 331 314 318 325 320 307 253 293
Lower 48 60 57 51 50 54 53 52 50 51
- ---------------------------------------------------------------------------- ----------------------------------------
Total 397 388 365 368 379 373 359 303 344
============================================================================ ========================================
Sales of crude oil produced (MB/D) 391 389 369 372 380 373 354 312 346
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids (MB/D)*
Alaska 26 23 19 24 23 26 23 19 23
Lower 48 22 26 25 27 25 24 26 26 25
- ---------------------------------------------------------------------------- ----------------------------------------
Total 48 49 44 51 48 50 49 45 48
============================================================================ ========================================
*Includes reinjection volumes sold
lease-to-lease: 15 14 13 16 15 16 15 10 14
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas (MMCF/D)
Alaska 189 162 180 205 184 185 147 164 166
Lower 48 1,338 1,311 1,271 1,264 1,295 1,233 1,226 1,220 1,226
- ---------------------------------------------------------------------------- ----------------------------------------
Total 1,527 1,473 1,451 1,469 1,479 1,418 1,373 1,384 1,392
============================================================================ ========================================
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Alaska
North Slope 25.95 21.70 22.82 23.17 23.41 28.00 31.69 35.66 31.54
- ---------------------------------------------------------------------------- ----------------------------------------
West Coast 31.47 27.19 28.31 28.51 28.87 32.93 36.53 40.48 36.41
- ---------------------------------------------------------------------------- ----------------------------------------
Lower 48 31.48 27.34 27.94 28.02 28.76 31.86 34.39 39.56 35.21
- ---------------------------------------------------------------------------- ----------------------------------------
Total U.S. 31.47 27.21 28.26 28.45 28.85 32.78 36.22 40.33 36.23
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids ($/bbl)
Alaska 31.32 27.24 28.42 28.82 29.04 32.93 36.38 40.52 36.45
- ---------------------------------------------------------------------------- ----------------------------------------
Lower 48 22.13 17.77 19.71 20.81 20.02 24.19 25.82 29.40 26.55
- ---------------------------------------------------------------------------- ----------------------------------------
Total U.S. 24.96 20.25 21.31 22.85 22.30 26.80 28.38 32.22 29.18
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas ($/mcf)*
Alaska 1.97 1.88 1.33 1.88 1.76 2.54 2.31 2.22 2.38
- ---------------------------------------------------------------------------- ----------------------------------------
Lower 48 5.53 4.77 4.61 4.32 4.81 5.00 5.49 5.29 5.26
- ---------------------------------------------------------------------------- ----------------------------------------
Total U.S. 5.40 4.63 4.45 4.18 4.67 4.88 5.35 5.19 5.14
- ---------------------------------------------------------------------------- ----------------------------------------
* Certain amounts in 2003 and first two quarters of 2004 restated to conform to current period presentation.
Kenai, Alaska LNG Sales
Volume (MMCF/D) 130 91 121 140 121 118 82 115 105
- ---------------------------------------------------------------------------- ----------------------------------------
Sales price per MCF 4.38 4.56 4.46 4.44 4.45 4.51 4.80 5.06 4.78
- ---------------------------------------------------------------------------- ----------------------------------------
U.S. Exploration Charges ($ Millions)
Dry Holes 16 3 9 48 76 32 32 (5) 59
Lease Impairments 13 12 10 12 47 11 11 10 32
- ---------------------------------------------------------------------------- ----------------------------------------
Total Non-Cash Charges 29 15 19 60 123 43 43 5 91
Other (G&G and Lease Rentals) 28 22 23 8 81 15 19 15 49
- ---------------------------------------------------------------------------- ----------------------------------------
Total U.S. Exploration Charges 57 37 42 68 204 58 62 20 140
============================================================================ ========================================
Alaska Only 25 10 11 9 55 17 43 7 67
- ---------------------------------------------------------------------------- ----------------------------------------
Depreciation, Depletion and
Amortization ($ Millions)
Alaska 124 135 130 127 516 119 125 122 366
Lower 48 151 150 156 134 591 146 145 157 448
- ---------------------------------------------------------------------------- ----------------------------------------
Total U.S. 275 285 286 261 1,107 265 270 279 814
============================================================================ ========================================
Page 6 of 10
CONOCOPHILLIPS
INTERNATIONAL E&P
2003 2004
------------------------------------------ ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------ ----------------------------------------
International E&P
Net Income ($ Millions) 447 560 421 500 1,928 622 683 719 2,024
============================================================================ ========================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 926 958 910 947 935 952 926 905 929
- ---------------------------------------------------------------------------- ----------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated
Norway 226 214 207 205 213 215 212 189 205
United Kingdom 87 82 67 72 77 67 64 59 64
Canada 33 31 29 28 30 27 25 24 25
China 23 27 25 28 26 32 28 25 28
Indonesia 21 17 16 10 16 15 14 14 15
Vietnam 16 15 11 22 16 31 31 35 32
Timor Sea 3 3 3 3 3 5 15 29 17
Other 74 73 70 70 72 63 61 55 60
Equity affiliates 55 117 120 116 102 113 104 111 109
- ---------------------------------------------------------------------------- ----------------------------------------
Total 538 579 548 554 555 568 554 541 555
============================================================================ ========================================
Sales of crude oil produced (MB/D) 520 607 548 549 556 555 534 561 550
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids (MB/D)
Norway 8 7 7 8 7 9 8 8 8
Canada 11 11 9 10 10 10 10 10 11
Other 4 5 2 3 4 7 12 24 14
- ---------------------------------------------------------------------------- ----------------------------------------
Total 23 23 18 21 21 26 30 42 33
============================================================================ ========================================
Natural Gas (MMCF/D)
Consolidated
Norway 305 273 216 307 275 319 303 274 299
United Kingdom 1,002 952 853 954 940 879 821 720 807
Canada 436 424 448 431 435 428 437 425 430
Timor Sea 61 61 61 56 60 40 32 35 35
Indonesia 224 246 275 275 255 248 237 248 244
Vietnam - - - 12 3 17 15 15 16
Other 50 56 69 77 63 66 81 78 75
Equity affiliates 12 11 11 12 12 9 4 4 5
- ---------------------------------------------------------------------------- ----------------------------------------
Total 2,090 2,023 1,933 2,124 2,043 2,006 1,930 1,799 1,911
============================================================================ ========================================
Canadian Syncrude (MB/D) 17 19 22 18 19 23 20 22 22
- ---------------------------------------------------------------------------- ----------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
Norway 32.72 26.28 29.08 29.08 29.24 32.13 34.72 40.70 36.03
United Kingdom 30.11 24.34 28.32 28.29 27.70 31.27 34.19 39.57 34.86
Canada 28.40 23.61 24.15 23.71 25.06 28.95 30.58 36.16 31.81
China 28.87 26.51 26.38 28.56 27.55 29.91 33.02 37.99 33.40
Indonesia 29.35 24.54 26.32 26.52 26.88 32.21 36.20 42.71 37.05
Vietnam 30.26 27.54 27.12 30.88 29.21 31.76 36.42 41.36 36.70
Timor Sea 32.43 27.38 28.25 29.75 29.37 35.49 37.32 46.65 42.37
Other 30.16 25.44 27.42 27.94 27.68 30.89 34.87 39.54 35.06
Equity affiliates 20.97 16.85 19.90 17.86 18.58 18.68 25.00 25.86 22.93
Total 30.17 23.90 26.15 26.42 26.53 28.71 32.72 37.90 33.15
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids ($/bbl)
Norway 21.85 18.13 18.50 22.96 20.27 24.34 24.22 27.79 25.63
Canada 26.11 20.78 23.55 25.27 23.93 26.38 28.58 31.15 28.69
Other 23.40 16.73 14.18 25.13 16.48 18.43 21.24 29.50 25.65
Total 24.22 18.96 18.23 24.35 21.39 23.53 24.69 29.53 26.61
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas ($/mcf)
Consolidated
Norway 3.66 3.86 4.21 4.09 3.94 4.37 3.99 4.12 4.16
United Kingdom* 3.52 3.33 2.98 4.13 3.50 4.04 3.47 3.79 3.77
Canada 5.42 4.34 4.17 4.02 4.48 4.88 5.01 4.64 4.85
Timor Sea 0.43 0.42 0.45 0.42 0.43 0.43 0.45 0.46 0.45
Indonesia 4.66 4.16 4.35 4.21 4.33 4.38 4.28 5.02 4.56
Vietnam - - - 1.04 1.04 1.10 0.99 1.01 1.03
Other 0.54 0.54 0.54 0.68 0.58 0.66 0.59 0.62 0.62
Equity affiliates 4.82 4.89 4.12 3.96 4.44 3.91 0.31 0.31 2.59
Total* 3.90 3.56 3.42 3.87 3.69 4.11 3.81 3.98 3.97
- ---------------------------------------------------------------------------- ----------------------------------------
* 2003 and first two quarters of 2004 restated to conform to current period presentation.
International Exploration Charges ($ Millions)
Dry Holes 4 27 30 30 91 35 10 87 132
Lease Impairments 7 12 26 41 86 9 52 58 119
- ---------------------------------------------------------------------------- ----------------------------------------
Total Non-Cash Charges 11 39 56 71 177 44 62 145 251
Other (G&G and Lease Rentals) 48 66 34 72 220 41 39 40 120
- ---------------------------------------------------------------------------- ----------------------------------------
Total International
Exploration Charges 59 105 90 143 397 85 101 185 371
============================================================================ ========================================
Depreciation, Depletion and
Amortization ($ Millions) 387 367 367 434 1,555 439 450 432 1,321
- ---------------------------------------------------------------------------- ----------------------------------------
Page 7 of 10
CONOCOPHILLIPS
R&M
2003 2004
------------------------------------------ ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------ ----------------------------------------
R&M Net Income ($ Millions) 264 321 485 202 1,272 464 818 708 1,990
============================================================================ ========================================
United States ($ Millions) 150 248 416 176 990 403 734 505 1,642
- ---------------------------------------------------------------------------- ----------------------------------------
International ($ Millions) 114 73 69 26 282 61 84 203 348
- ---------------------------------------------------------------------------- ----------------------------------------
Market Indicators
U.S. East Coast Crack Spread ($/bbl) 6.16 3.46 6.37 4.98 5.24 6.87 9.14 7.00 7.67
U.S. Gulf Coast Crack Spread ($/bbl) 5.64 3.65 5.38 3.72 4.60 6.36 9.17 6.33 7.29
U.S. Group Central Crack
Spread ($/bbl) 6.12 6.96 8.32 5.34 6.69 6.91 11.65 8.09 8.88
U.S. West Coast Crack
Spread ($/bbl) 12.79 11.39 14.00 11.44 12.41 16.10 24.13 17.92 19.38
U.S. Weighted 3:2:1 Crack
Spread ($/bbl) 6.99 5.86 7.84 5.67 6.59 8.39 12.60 9.10 10.03
NW Europe Crack Spread ($/bbl) 5.68 3.17 3.11 3.20 3.79 2.56 5.13 3.90 3.86
Singapore 3:2:1Crack Spread ($/bbl) 8.16 4.65 5.64 7.12 6.39 10.33 9.48 13.11 10.97
U.S. Wholesale Gasoline Mktg
Mrgn ($/bbl) 1.53 2.36 2.15 1.45 1.87 0.69 1.83 1.50 1.34
- ---------------------------------------------------------------------------- ----------------------------------------
Realized Margins
Refining Margin ($/bbl)
U.S. 6.46 5.34 6.39 5.56 5.93 7.12 9.88 8.84 8.62
International 6.00 3.67 4.38 3.61 4.44 5.51 7.24 9.01 7.37
- ---------------------------------------------------------------------------- ----------------------------------------
Marketing Margin ($/bbl)
U.S. 1.86 2.62 2.17 1.75 2.10 1.08 1.49 1.15 1.24
International 7.09 9.06 7.82 6.41 7.59 6.50 8.20 7.69 7.49
- ---------------------------------------------------------------------------- ----------------------------------------
Depreciation, Depletion and
Amortization ($ Millions) 167 174 174 174 689 186 172 202 560
- ---------------------------------------------------------------------------- ----------------------------------------
Turnaround Expense ($ Millions) 60 38 19 63 180 59 78 57 194
- ---------------------------------------------------------------------------- ----------------------------------------
Eastern U.S.
Crude Oil Charge Input (MB/D) 415 435 428 421 425 413 375 368 385
Total Charge Input (MB/D) 466 488 468 442 466 440 421 415 425
Crude Oil Capacity Utilization (%) 97% 101% 100% 98% 99% 96% 87% 87% 90%
Clean Product Yield (%) 88% 84% 86% 88% 86% 87% 84% 87% 86%
- ---------------------------------------------------------------------------- ----------------------------------------
U.S. Gulf Coast
Crude Oil Charge Input (MB/D) 668 702 708 680 690 699 709 617 675
Total Charge Input (MB/D) 771 797 803 782 788 774 789 717 761
Crude Oil Capacity Utilization (%) 93% 98% 99% 95% 96% 97% 99% 88% 95%
Clean Product Yield (%) 82% 78% 80% 78% 79% 79% 75% 78% 77%
- ---------------------------------------------------------------------------- ----------------------------------------
Central U.S.
Crude Oil Charge Input (MB/D) 573 632 556 584 586 601 638 634 625
Total Charge Input (MB/D) 601 654 584 614 613 636 673 669 659
Crude Oil Capacity Utilization (%) 91% 101% 88% 93% 93% 96% 102% 99% 99%
Clean Product Yield (%) 84% 82% 81% 86% 83% 83% 83% 85% 84%
- ---------------------------------------------------------------------------- ----------------------------------------
Western U.S.
Crude Oil Charge Input (MB/D) 352 359 391 389 373 392 397 392 393
Total Charge Input (MB/D) 365 374 408 410 390 409 419 409 412
Crude Oil Capacity Utilization (%) 90% 91% 100% 99% 95% 100% 101% 99% 100%
Clean Product Yield (%) 82% 81% 83% 83% 82% 81% 81% 82% 81%
- ---------------------------------------------------------------------------- ----------------------------------------
TOTAL UNITED STATES
Crude Oil Charge Input (MB/D) 2,008 2,128 2,083 2,074 2,074 2,105 2,119 2,011 2,078
Total Charge Input (MB/D) 2,203 2,313 2,263 2,248 2,257 2,259 2,302 2,210 2,257
Crude Oil Capacity Utilization (%) 93% 98% 96% 96% 96% 97% 98% 93% 96%
Clean Product Yield (%) 84% 81% 82% 83% 82% 82% 80% 82% 82%
- ---------------------------------------------------------------------------- ----------------------------------------
Refined Products Production (MB/D)
Gasoline 1,060 1,077 1,070 1,061 1,067 1,059 1,043 1,060 1,054
Distillates 590 615 591 591 597 604 591 574 590
Aviation Fuel 190 173 200 195 189 167 177 164 170
Other 414 492 461 423 448 415 489 400 434
- ---------------------------------------------------------------------------- ----------------------------------------
Total 2,254 2,357 2,322 2,270 2,301 2,245 2,300 2,198 2,248
============================================================================ ========================================
Petroleum Products Sales (MB/D)
Gasoline 1,331 1,381 1,398 1,365 1,369 1,315 1,328 1,366 1,337
Distillates 600 590 580 530 575 570 538 544 551
Aviation Fuel 164 164 197 193 180 178 191 200 190
Other 509 493 497 474 492 517 573 553 548
- ---------------------------------------------------------------------------- ----------------------------------------
Total 2,604 2,628 2,672 2,562 2,616 2,580 2,630 2,663 2,626
============================================================================ ========================================
Page 8 of 10
CONOCOPHILLIPS
R&M (continued)
2003 2004
------------------------------------------ ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------ ----------------------------------------
International - Consolidated - United Kingdom and Ireland
Crude Oil Charge Input (MB/D)** 299 280 288 269 283 289 197 291 259
Total Charge Input (MB/D) 301 286 296 280 291 299 216 300 272
Crude Oil Capacity Utilization (%)** 98% 92% 94% 88% 93% 94% 64% 100% 85%
Clean Product Yield (%) 84% 83% 84% 84% 84% 84% 81% 83% 83%
- ---------------------------------------------------------------------------- ----------------------------------------
International - Equity Affiliates - Net Share*
Crude Oil Charge Input (MB/D) 134 132 129 128 131 120 112 134 122
Total Charge Input (MB/D) 137 135 134 131 134 121 113 138 124
Crude Oil Capacity Utilization (%) 98% 97% 95% 94% 96% 87% 81% 99% 89%
Clean Product Yield (%) 82% 83% 81% 82% 82% 82% 83% 81% 82%
- ---------------------------------------------------------------------------- ----------------------------------------
TOTAL INTERNATIONAL
Crude Oil Charge Input (MB/D)** 433 412 417 397 414 409 309 425 381
Total Charge Input (MB/D) 438 421 430 411 425 420 329 438 396
Crude Oil Capacity Utilization (%)** 98% 93% 94% 90% 94% 92% 69% 99% 86%
Clean Product Yield (%) 83% 83% 83% 84% 83% 84% 82% 82% 83%
- ---------------------------------------------------------------------------- ----------------------------------------
Refined Products Production (MB/D)
Gasoline 142 132 139 125 134 124 109 138 124
Distillates 183 177 185 154 175 181 136 190 169
Aviation Fuel 24 15 19 21 20 24 16 22 20
Other 87 83 70 95 83 81 57 89 76
- ---------------------------------------------------------------------------- ----------------------------------------
Total 436 407 413 395 412 410 318 439 389
============================================================================ ========================================
Petroleum Products Sales (MB/D)
Gasoline 202 190 181 171 186 185 180 173 179
Distillates 181 199 192 172 186 228 184 207 206
Aviation Fuel 5 7 14 7 8 6 9 10 8
Other 40 52 54 53 50 82 67 82 77
- ---------------------------------------------------------------------------- ----------------------------------------
Total 428 448 441 403 430 501 440 472 470
============================================================================ ========================================
Worldwide - Including Net Share of Equity Affiliates
Crude Oil Charge Input (MB/D)** 2,441 2,540 2,500 2,471 2,488 2,514 2,428 2,436 2,459
Total Charge Input (MB/D) 2,641 2,734 2,693 2,659 2,682 2,679 2,631 2,648 2,653
Crude Oil Capacity Utilization (%)** 94% 97% 96% 95% 95% 96% 93% 94% 94%
Clean Product Yield (%) 84% 81% 82% 83% 83% 82% 80% 82% 82%
- ---------------------------------------------------------------------------- ----------------------------------------
Refined Products Production (MB/D)
Gasoline 1,202 1,209 1,209 1,186 1,201 1,183 1,152 1,198 1,178
Distillates 773 792 776 745 772 785 727 764 759
Aviation Fuel 214 188 219 216 209 191 193 186 190
Other 501 575 531 518 531 496 546 489 510
- ---------------------------------------------------------------------------- ----------------------------------------
Total 2,690 2,764 2,735 2,665 2,713 2,655 2,618 2,637 2,637
============================================================================ ========================================
Petroleum Products Sales (MB/D)
Gasoline 1,533 1,571 1,579 1,536 1,555 1,500 1,508 1,539 1,516
Distillates 781 789 772 702 761 798 722 751 757
Aviation Fuel 169 171 211 200 188 184 200 210 198
Other 549 545 551 527 542 599 640 635 625
- ---------------------------------------------------------------------------- ----------------------------------------
Total 3,032 3,076 3,113 2,965 3,046 3,081 3,070 3,135 3,096
============================================================================ ========================================
* 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.
** 2003 and first two quarters of 2004 restated to conform to current period presentation.
Page 9 of 10
CONOCOPHILLIPS
MIDSTREAM
2003 2004
------------------------------------------ ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------ ----------------------------------------
Midstream Net Income ($ Millions) 31 25 31 43 130 55 42 38 135
============================================================================ ========================================
U.S. Equity Affiliate ($ Millions)* 13 23 18 18 72 33 33 26 92
- ---------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States 51 53 50 54 52 54 24 28 35
International 47 35 47 50 45 47 33 49 43
Equity Affiliates
United States* 114 110 111 110 111 109 112 111 111
International** 7 7 7 6 7 6 5 6 6
- ---------------------------------------------------------------------------- ----------------------------------------
Total 219 205 215 220 215 216 174 194 195
============================================================================ ========================================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
** 2003 and first two quarters of 2004 restated to conform to current period presentation.
Natural Gas Liquids Fractionated (MB/D)
United States* 168 158 172 168 167 158 144 145 149
International 59 49 60 62 57 63 43 62 56
- ---------------------------------------------------------------------------- ----------------------------------------
Total 227 207 232 230 224 221 187 207 205
============================================================================ ========================================
* Excludes DEFS.
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 25.59 20.99 20.94 23.14 22.67 25.68 26.42 31.03 27.71
DEFS 24.53 20.53 20.67 22.76 22.12 24.81 25.61 30.27 26.90
- ---------------------------------------------------------------------------- ----------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas
liquids component and location mix.
Depreciation, Depletion and
Amortization ($ Millions) 14 14 13 13 54 13 9 11 33
- ---------------------------------------------------------------------------- ----------------------------------------
EMERGING BUSINESSES
2003 2004
------------------------------------------ ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------ ----------------------------------------
Emerging Businesses
Net Income (Loss) ($ Millions) (34) (23) (18) (24) (99) (22) (29) (27) (78)
============================================================================ ========================================
Detail of Net Income (Loss) ($ Millions)
Technology Solutions (5) (6) (5) (4) (20) (4) (4) (3) (11)
Gas-to-Liquids (20) (13) (7) (10) (50) (9) (7) (9) (25)
Power 1 (1) (3) (2) (5) (4) (16) (8) (28)
Other (10) (3) (3) (8) (24) (5) (2) (7) (14)
- ---------------------------------------------------------------------------- ----------------------------------------
Total (34) (23) (18) (24) (99) (22) (29) (27) (78)
============================================================================ ========================================
CORPORATE AND OTHER
2003 2004
------------------------------------------ ----------------------------------------
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) (284) (225) (166) (202) (877) (177) (156) (214) (547)
============================================================================ ========================================
Detail of Net Income (Loss) ($ Millions)
Net interest expense (190) (145) (134) (163) (632) (104) (119) (120) (343)
Corporate overhead (30) (43) (33) (67) (173) (55) (54) (51) (160)
Discontinued operations 53 91 57 36 237 13 62 (5) 70
Merger-related costs (27) (115) (41) (40) (223) (14) - - (14)
Accounting change (112) - - - (112) - - - -
Other 22 (13) (15) 32 26 (17) (45) (38) (100)
- ---------------------------------------------------------------------------- ----------------------------------------
Total (284) (225) (166) (202) (877) (177) (156) (214) (547)
============================================================================ ========================================
Before-Tax Net Interest Expense ($ Millions)
Interest and financing expense (339) (306) (314) (287) (1,246) (279) (283) (227) (789)
Capitalized interest 73 78 98 77 326 115 104 121 340
Interest revenue 29 31 27 17 104 34 31 16 81
Premium on early debt retirement (12) (11) - (45) (68) - - (58) (58)
- ---------------------------------------------------------------------------- ----------------------------------------
(249) (208) (189) (238) (884) (130) (148) (148) (426)
============================================================================ ========================================
Debt
Total Debt ($ Millions) 21,007 20,254 18,739 17,780 17,780 17,109 15,619 15,486 15,486
Debt-to-Capital Ratio 40% 38% 36% 34% 34% 32% 29% 28% 28%
- ---------------------------------------------------------------------------- ----------------------------------------
Page 10 of 10