UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 26, 2005
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 001-32395 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 January 26, 2005, ConocoPhillips issued a press release announcing
the company's financial and operating results for the quarter ended December 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 hereto and incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 -- Press release issued by ConocoPhillips on January 26, 2005.
99.2 -- Financial and operational tables.
99.3 -- Supplemental financial information.
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
January 26, 2005
3
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99.1 Press release issued by ConocoPhillips on January 26, 2005.
99.2 Financial and operational tables.
99.3 Supplemental financial information.
4
Exhibit 99.1
ConocoPhillips Reports Fourth-Quarter Net Income of $2.4 Billion;
Full-Year 2004 Net Income Totals $8.1 Billion
HOUSTON--(BUSINESS WIRE)--Jan. 26, 2005--ConocoPhillips (NYSE:COP)
Earnings at a glance
Fourth Quarter Twelve Months
- ----------------------------------------------------------------------
2004 2003 2004 2003
- ----------------------------------------------------------------------
Income from continuing
operations $2,480 $985 $8,107 $4,593
million million million million
Income (loss) from
discontinued operations $ (48) $ 36 $ 22 $ 237
Cumulative effect of changes
in accounting principles $ - $ - $ - $ (95)
Net income $2,432 $1,021 $8,129 $4,735
- ----------------------------- --------- --------- --------- ----------
Diluted income per share
Income from continuing
operations $ 3.51 $ 1.43 $11.57 $ 6.70
Net income $ 3.44 $ 1.48 $11.60 $ 6.91
- ----------------------------- --------- --------- --------- ----------
Revenues $ 40.1 $ 26.0 $136.9 $105.1
billion billion billion billion
- ----------------------------- --------- --------- --------- ----------
ConocoPhillips (NYSE:COP) today reported fourth-quarter net income
of $2,432 million, compared with $1,021 million for the same quarter
in 2003. Net income per share for the fourth quarter was $3.44, versus
$1.48 for the same period a year ago. Total revenues were $40.1
billion, versus $26.0 billion a year ago. Income from continuing
operations for the fourth quarter was $2,480 million, compared with
$985 million for the same period a year ago. Income from continuing
operations per share for the fourth quarter of 2004 was $3.51,
compared with $1.43 for the fourth quarter of 2003. The quarter's net
income included $74 million, or $0.10 per share, from the company's
equity investment in LUKOIL.
"Operationally, we performed very well during the fourth quarter,"
said Jim Mulva, chairman and chief executive officer. "Overall, our
upstream operations ran well, enabling us to benefit from the strong
commodity price environment. The total company produced 1.75 million
barrels of oil equivalent per day, including 1.60 million BOE per day
from our Exploration and Production segment and an estimated 150,000
barrels of oil per day from our LUKOIL equity investment. Downstream,
our domestic operations benefited from improved heavy-light crude oil
differentials, and our international refineries ran well, with strong
capacity utilization rates. Worldwide, our refineries ran at 94
percent of capacity, excluding the impact of LUKOIL.
"Our financial position continues to steadily improve, and our
return on capital employed remains strong and competitive. We ended
the year with a debt-to-capital ratio of 26 percent. For the full
year, we generated $12.0 billion in cash from operations, spent $9.5
billion on capital projects and investments, including the purchase of
approximately 10 percent of LUKOIL, and paid $1.2 billion in
dividends."
For the twelve months of 2004, net income was $8,129 million, a 72
percent improvement when compared with $4,735 million for 2003. Net
income per share was $11.60 for the full year 2004, versus $6.91 for
2003. Income from continuing operations was $8,107 million, a 77
percent increase over $4,593 million for the same period a year ago.
Income from continuing operations per share for the twelve months of
2004 was $11.57, compared with $6.70 for the same period in 2003.
Total revenues were $136.9 billion, versus $105.1 billion a year ago.
As of the end of 2004, ConocoPhillips owned about 10 percent of
LUKOIL. ConocoPhillips' equity share of LUKOIL's operational and
financial information has been estimated and reported in the LUKOIL
Investment segment. In addition to the company's proportionate share
of LUKOIL's earnings, this segment also reflects the amortization of
the estimated basis difference between ConocoPhillips' equity interest
in the net assets of LUKOIL and the historical cost of the company's
investment in LUKOIL. As expected, during the Jan. 24, 2005,
extraordinary general meeting of LUKOIL shareholders, all charter
amendments reflected in the shareholder agreement were passed and
ConocoPhillips' nominee was elected to LUKOIL's board of directors.
The results of ConocoPhillips' business segments follow. Results
from the company's equity investment in LUKOIL are reported separately
in the LUKOIL Investment segment.
Exploration & Production (E&P)
Fourth-quarter financial results: E&P income from continuing
operations in the fourth quarter was $1,671 million, up from $1,420
million in the third quarter of 2004 and up from $991 million in the
fourth quarter of 2003. The increase from the third quarter was
primarily the result of higher crude oil and natural gas prices, as
well as higher production, partially offset by certain impairments.
Improved results from the fourth quarter of 2003 were primarily due to
higher crude oil and natural gas prices, partially offset by the
reduced impact of international tax benefits.
ConocoPhillips' E&P daily production for the quarter averaged 1.60
million barrels of oil equivalent (BOE) per day, including Canadian
Syncrude. This excludes the estimated 150,000 barrels per day (BPD) of
oil reported in the LUKOIL Investment segment below. When compared
with the third quarter, increased E&P output was primarily the result
of the completion of third-quarter scheduled maintenance in Alaska and
the North Sea, partially offset by the adverse impact of approximately
15,000 BOE per day due to the change in the Venezuelan governmental
royalty rate. When compared with the fourth quarter of 2003, adjusted
for the disposition of Petrovera, production for the fourth quarter of
2004 was flat, as increased production from Bayu-Undan, Vietnam and
Hamaca offset other asset sales and natural decline.
Twelve months financial results: E&P income from continuing
operations for the twelve months of 2004 was $5,702 million, up from
$4,160 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. As expected, production,
including Canadian Syncrude, for the full year averaged 1.56 million
BOE per day, which is slightly higher than that of the previous year
when adjusted for dispositions.
Midstream
Fourth-quarter financial results: Midstream income from continuing
operations was $100 million, up from $38 million in the third quarter
of 2004 and up from $43 million in the fourth quarter of 2003.
Contributing to the increase over the prior quarter were higher
natural gas liquids prices for both Duke Energy Field Services, LLC
(DEFS) and the company's consolidated operations, and reduced asset
impairments in DEFS. The increase over the fourth quarter of 2003 was
primarily the result of higher natural gas liquids prices in both
DEFS' and the company's consolidated operations.
Twelve months financial results: Midstream operating results
increased to $235 million, from $130 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
increased impairment charges in DEFS.
Refining and Marketing (R&M)
Fourth-quarter financial results: R&M income from continuing
operations was $753 million, up from $708 million in the previous
quarter and up from $202 million in the fourth quarter of 2003. The
increase in fourth-quarter R&M earnings, compared with the third
quarter of 2004, was due to improved realized international refining
margins. Improved results over the fourth quarter of 2003 were
primarily due to higher worldwide refining margins.
During the fourth quarter, the company's domestic refinery crude
oil capacity utilization rate was 93 percent. Although realized
refining margins were lower than those of the third quarter, they were
not as low as would have been expected from market-indicator crack
spreads due to the impact of wider heavy-light crude oil differentials
and improved product yields. In addition, U.S. marketing results were
lower due to inventory impacts, partially offset by improved margins.
Internationally, a 3 percent increase in the company's refinery
crude oil capacity utilization rate and improved refining optimization
contributed to improved refining margins. International marketing
margins also were improved over the previous quarter.
Overall, R&M's fourth-quarter refinery crude oil capacity
utilization rate averaged 94 percent, the same as last quarter. R&M's
total refining throughput for the quarter was 2.7 million BPD, which
excludes the estimated 77,000 BPD shown in the LUKOIL Investment
segment below. Fourth-quarter turnaround costs were $73 million
before-tax, compared with $57 million in the third quarter of 2004.
Twelve months financial results: R&M income from continuing
operations for the twelve months of 2004 increased to $2,743 million,
compared with $1,397 million in the same period a year ago. The
increase was primarily the result of higher worldwide refining
margins, and was partially offset by lower U.S. marketing margins and
increased turnaround, energy, impairment and contingency costs.
Full-year turnaround costs, before-tax, were $267 million.
LUKOIL Investment
Fourth-quarter financial results: Income from continuing
operations in the fourth quarter was $74 million. This represents
ConocoPhillips' estimate of the company's weighted average equity
share of LUKOIL's income for the fourth quarter based on market
indicators and historical production trends of LUKOIL. This segment
also includes the amortization of the estimated basis difference
between ConocoPhillips' equity interest in the net assets of LUKOIL
and the historical cost of the company's investment in LUKOIL.
ConocoPhillips' share of estimated crude oil production was
150,000 BPD. The company's share of estimated daily refining crude oil
throughput was 77,000 BPD.
Chemicals
Fourth-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
$83 million, compared with $81 million in the third quarter of 2004
and $11 million in the fourth quarter of 2003. The increase from the
third quarter was largely due to higher margins, particularly in the
olefins and polyolefins business line, partially offset by higher
utility costs. The increase over the fourth quarter of 2003 reflects
improved margins and volumes in olefins and polyolefins, as well as
improved margins in the aromatics and styrenics business line.
Twelve months financial results: During the twelve months of 2004,
the Chemicals segment had income from continuing operations of $249
million, compared with $7 million for the same period a year ago.
Contributing to the increase were higher margins and volumes in both
the olefins and polyolefins, and aromatics and styrenics business
lines.
Emerging Businesses
Fourth-quarter financial results: The Emerging Businesses segment
had a loss from continuing operations of $24 million in the fourth
quarter of 2004, compared with losses of $27 million in the third
quarter of 2004 and $24 million in the fourth quarter of 2003.
Corporate and Other
Fourth-quarter financial results: After-tax Corporate expenses
from continuing operations were $177 million, compared with $209
million in the previous quarter and $238 million in the fourth quarter
of 2003. The decrease from the third quarter was primarily driven by a
reduction in net interest charges largely associated with the early
debt retirement premium paid during the third quarter. Contributing to
the decrease from the fourth quarter of 2003 were lower net interest
expense and reduced merger-related costs, partially offset by reduced
foreign currency gains.
Total debt at the end of the fourth quarter was $15.0 billion,
compared with $15.5 billion at the end of the previous quarter and
$2.8 billion below year-end 2003. At the end of the fourth quarter,
the company's debt-to-capital ratio was 26 percent, down from 28
percent at the end of the third quarter.
The company's fourth-quarter effective tax rate of 42 percent was
lower than that of the third quarter, primarily due to a lower
proportion of income from international upstream operations located in
higher tax-rate jurisdictions.
Discontinued Operations
Fourth-quarter financial results: Fourth-quarter losses from
discontinued operations were $48 million, compared with a loss of $5
million in the third quarter of 2004 and income of $36 million in the
fourth quarter of 2003. The losses in the fourth quarter were
primarily related to asset sales.
Twelve months financial results: During the twelve months of 2004,
income from discontinued operations was $22 million, compared with
$237 million for the same period a year ago. The decrease is primarily
attributable to the impacts of asset sales.
Outlook
Mr. Mulva concluded:
"We had another good quarter, which contributed to a strong year
in terms of operating performance and market conditions, enabling us
to achieve strong financial results. We are delivering on our
commitments, and remain focused on continuous improvement in all of
our operations.
"We expect 2005 production, including Canadian Syncrude, to
increase to approximately 1.62 million BOE per day, excluding the
impacts of LUKOIL. Production increases are anticipated through the
continued ramp-up of Magnolia, Hamaca, Bayu-Undan and Belanak. Further
increases also are expected as expansion projects in the United
Kingdom and Alaska are completed during the year.
"Downstream, we remain committed to cost and capital discipline,
executing projects well, and leveraging our refining technologies and
position. Looking forward, we anticipate maintaining a high capacity
utilization rate, while successfully executing our extensive 2005
clean-fuels program and increased turnaround activity, all of which
will help ensure that we maximize the availability of high-quality
clean fuels to the market.
"Our 2005 cash capital budget is approximately $6.9 billion. These
expenditures will be directed toward our existing portfolio and the
development of additional legacy assets, which is expected to bolster
future growth. This cash capital budget excludes capitalized interest
and minority interests, and certain expenditures associated with the
LUKOIL strategic alliance. We anticipate additional capital
expenditures of approximately $500 million related to the closing of
our Timan-Pechora joint venture with LUKOIL, as well as discretionary
investment to increase the company's equity ownership in LUKOIL."
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had
approximately 35,800 employees, $93 billion of assets, and $136.9
billion of revenues as of Dec. 31, 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
"Fourth-Quarter Earnings" link.
For financial and operational tables, go to
www.conocophillips.com/news/nr/earnings/highlights/4q04earnings.html.
For detailed supplemental information, go to
www.conocophillips.com/news/nr/earnings/detail/4q04summary.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 "(w)e
expect 2005 production, including Canadian Syncrude, to increase to
approximately 1.62 million BOE per day, excluding the impacts of
LUKOIL"; "(p)roduction increases are anticipated through the continued
ramp-up of Magnolia, Hamaca, Bayu-Undan and Belanak"; "(f)urther
increases also are expected as expansion projects in the United
Kingdom and Alaska are completed during the year"; "(w)e anticipate
maintaining a high capacity utilization rate, while successfully
executing our extensive 2005 clean-fuels program and increased
turnaround activity"; and "(w)e anticipate additional capital
expenditures of approximately $500 million related to the closing of
our Timan-Pechora joint venture with LUKOIL, as well as discretionary
investment to increase the company's equity ownership in LUKOIL"
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)
Clayton Reasor, 212-207-1996 (investors)
Exhibit 99.2
ConocoPhillips
Houston, Texas 77079
Preliminary
FINANCIAL HIGHLIGHTS
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003** 2004 2003**
Revenues
Sales and other operating revenues* $39,385 25,845 135,076 104,246
Equity in earnings of affiliates 555 151 1,535 542
Other income (loss) 132 (34) 305 309
--------- ---------- --------- -----------
40,072 25,962 136,916 105,097
--------- ---------- --------- -----------
Costs and expenses
Purchased crude oil and products 26,984 16,591 90,182 67,475
Production and operating expenses 2,060 1,929 7,372 7,144
Selling, general and administrative expenses 615 568 2,128 2,179
Exploration expenses 192 211 703 601
Depreciation, depletion and amortization 1,030 911 3,798 3,485
Property impairments 101 60 164 252
Taxes other than income taxes* 4,609 3,826 17,487 14,679
Accretion on discounted liabilities 45 38 171 145
Interest and debt expense 141 197 546 844
Foreign currency transaction (gains) losses 17 (50) (36) (36)
Minority interests 3 4 32 20
--------- ---------- --------- -----------
35,797 24,285 122,547 96,788
--------- ---------- --------- -----------
Income from continuing operations before income
taxes and subsidiary equity transactions 4,275 1,677 14,369 8,309
Gain on subsidiary equity transactions - - - 28
--------- ---------- --------- -----------
Income from continuing operations before income
taxes 4,275 1,677 14,369 8,337
Provision for income taxes 1,795 692 6,262 3,744
--------- ---------- --------- -----------
Income from continuing operations 2,480 985 8,107 4,593
Income (loss) from discontinued operations (48) 36 22 237
--------- ---------- --------- -----------
Income before cumulative effect of changes in
accounting principles 2,432 1,021 8,129 4,830
Cumulative effect of changes in accounting
principles - - - (95)
--------- ---------- --------- -----------
Net income $2,432 1,021 8,129 4,735
========= ========== ========= ===========
Income (loss) per share of common stock
Basic
Continuing operations $3.57 1.45 11.74 6.75
Discontinued operations (0.07) 0.05 0.03 0.35
Before cumulative effect of changes in
accounting
principles 3.50 1.50 11.77 7.10
Cumulative effect of changes in accounting
principles - - - (0.14)
Net income $3.50 1.50 11.77 6.96
Diluted
Continuing operations $3.51 1.43 11.57 6.70
Discontinued operations (0.07) 0.05 0.03 0.35
Before cumulative effect of changes in
accounting
principles 3.44 1.48 11.60 7.05
Cumulative effect of changes in accounting
principles - - - (0.14)
Net income $3.44 1.48 11.60 6.91
Average common shares outstanding (in thousands)
Basic 695,458 681,681 690,784 680,490
Diluted 706,334 688,516 700,650 685,433
*Includes excise taxes on petroleum products
sales: $4,284 3,590 16,357 13,705
**Reclassified to conform to current year presentation.
1-1
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
INCOME/(LOSS) FROM CONTINUING OPERATIONS
E&P
United States $935 491 2,942 2,232
International 736 500 2,760 1,928
---------- --------- --------- ---------
Total E&P 1,671 991 5,702 4,160
---------- --------- --------- ---------
Midstream 100 43 235 130
---------- --------- --------- ---------
R&M
United States 484 176 2,126 1,115
International 269 26 617 282
---------- --------- --------- ---------
Total R&M 753 202 2,743 1,397
---------- --------- --------- ---------
LUKOIL Investment 74 - 74 -
Chemicals 83 11 249 7
Emerging Businesses (24) (24) (102) (99)
Corporate and other (177) (238) (794) (1,002)
---------- --------- --------- ---------
Consolidated $2,480 985 8,107 4,593
========== ========= ========= =========
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)
---------- --------- --------- ---------
LUKOIL Investment - - - -
Chemicals - - - -
Emerging Businesses - - - -
Corporate and other - - - (112)
---------- --------- --------- ---------
Consolidated $- - - (95)
========== ========= ========= =========
INCOME/(LOSS) FROM DISCONTINUED OPERATIONS
Corporate and other (48) 36 22 237
SUMMARY OF NET INCOME/(LOSS)
E&P
United States $935 491 2,942 2,374
International 736 500 2,760 1,928
---------- --------- --------- ---------
Total E&P 1,671 991 5,702 4,302
---------- --------- --------- ---------
Midstream 100 43 235 130
---------- --------- --------- ---------
R&M
United States 484 176 2,126 990
International 269 26 617 282
---------- --------- --------- ---------
Total R&M 753 202 2,743 1,272
---------- --------- --------- ---------
LUKOIL Investment 74 - 74 -
Chemicals 83 11 249 7
Emerging Businesses (24) (24) (102) (99)
Corporate and other (225) (202) (772) (877)
---------- --------- --------- ---------
Net income $2,432 1,021 8,129 4,735
========== ========= ========= =========
1-2
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
INCOME FROM CONTINUING OPERATIONS
Effective tax rate % 42.0 % 41.3 43.6 44.9
Millions of Dollars
FOREIGN CURRENCY GAINS/(LOSSES)
AFTER-TAX
E&P $(28) (22) (13) (50)
Midstream (1) - (1) -
R&M 11 14 12 18
LUKOIL Investment - - - -
Chemicals - - - -
Emerging Businesses - - - (1)
Corporate and other 23 46 44 67
---------- ---------- ---------- ----------
$5 38 42 34
========== ========== ========== ==========
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $2,480 985 8,107 4,593
Depreciation, depletion and amortization 1,030 911 3,798 3,485
Property impairments 101 60 164 252
Dry hole costs and leasehold impairments 75 131 417 300
Accretion on discounted liabilities 45 38 171 145
Deferred income taxes 90 68 1,088 401
Undistributed equity earnings (236) 132 (777) (59)
Net (gain) loss on asset dispositions (34) 15 (116) (211)
Other (295) (202) (190) (328)
Net working capital changes (69) (114) (680) 589
---------- ---------- ---------- ----------
Net cash provided by continuing
operations 3,187 2,024 11,982 9,167
Net cash provided by (used in)
discontinued operations 10 8 (23) 189
---------- ---------- ---------- ----------
Net cash provided by operating
activities $3,197 2,032 11,959 9,356
========== ========== ========== ==========
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $368 358 1,314 1,418
International 1,184 862 3,935 3,090
---------- ---------- ---------- ----------
1,552 1,220 5,249 4,508
Midstream 1 4 7 10
R&M 574 429 1,344 1,179
LUKOIL Investment 2,649 - 2,649 -
Chemicals - - - -
Emerging Businesses 1 60 75 284
Corporate and other* 60 71 172 188
---------- ---------- ---------- ----------
$4,837 1,784 9,496 6,169
========== ========== ========== ==========
*Excludes discontinued operations
OTHER
At December 31, 2004 At December 31, 2003
Total debt $15,002 17,780
Common stockholders' equity $42,723 34,366
1-3
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 313 318 298 325
Lower 48 50 50 51 54
--------- --------- ---------- --------
363 368 349 379
Norway 211 205 207 213
United Kingdom 66 72 64 77
Canada 24 28 25 30
China 17 28 25 26
Indonesia 18 10 15 16
Vietnam 33 22 33 16
Timor Sea 34 3 21 3
Other 55 70 58 72
--------- --------- ---------- --------
Total consolidated 821 806 797 832
Equity affiliates 103 116 108 102
--------- --------- ---------- --------
Total Worldwide 924 922 905 934
========= ========= ========== ========
Syncrude 20 18 21 19
========= ========= ========== ========
Natural gas liquids produced
United States
Alaska* 24 24 23 23
Lower 48 26 27 26 25
--------- --------- ---------- --------
50 51 49 48
Norway 9 8 8 7
Canada 11 10 10 10
Other 22 3 17 4
--------- --------- ---------- --------
Total Worldwide 92 72 84 69
========= ========= ========== ========
*Includes reinjected volumes sold lease-
to-lease. 14 16 14 15
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 163 205 165 184
Lower 48 1,214 1,264 1,223 1,295
--------- --------- ---------- --------
1,377 1,469 1,388 1,479
Norway 306 307 301 275
United Kingdom 852 954 818 940
Canada 442 431 433 435
Timor Sea 35 56 35 60
Indonesia 266 275 250 255
Vietnam 19 12 16 3
Other 59 77 71 63
--------- --------- ---------- --------
Total consolidated 3,356 3,581 3,312 3,510
Equity affiliates 4 12 5 12
--------- --------- ---------- --------
Total Worldwide 3,360 3,593 3,317 3,522
========= ========= ========== ========
*Represents quantities available for sale. Excludes gas equivalent of NGL shown above.
Liquefied natural gas sales 107 140 105 121
LUKOIL Investment
Production (MB/D)* 150 - 38 -
Refinery Crude Oil Throughput* 77 - 19 -
*Represents our estimated net share of LUKOIL
1-4
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
E&P
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $44.37 28.51 38.47 28.87
Lower 48 42.30 28.02 36.95 28.76
Total U.S. 44.08 28.45 38.25 28.85
International 41.75 28.42 37.18 28.27
Total consolidated 42.79 28.43 37.65 28.54
Equity affiliates 26.55 18.14 24.18 19.01
Total Worldwide 40.96 27.27 36.06 27.52
Natural gas-lease (per MCF)
United States
Alaska 2.23 1.88 2.35 1.76
Lower 48 6.04 4.32 5.46 4.81
Total U.S. 5.92 4.18 5.33 4.67
International 4.63 3.87 4.14 3.69
Total consolidated 5.13 3.99 4.62 4.08
Equity affiliates 0.25 3.96 2.19 4.44
Total Worldwide 5.13 3.99 4.61 4.08
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 23 54 32 52
International 49 50 45 45
Equity affiliates
United States* 113 110 111 111
International 7 6 6 7
---------- ----------- ---------- -----------
192 220 194 215
========== =========== ========== ===========
*Represents 30.3 percent interest in Duke Energy Field Services LLC
(DEFS).
Per Barrel
U.S. product prices
Weighted average NGL**
Consolidated $34.40 23.14 29.38 22.67
DEFS 33.69 22.76 28.60 22.12
**Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural-gas-liquids
component and location mix.
1-5
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,160 2,168 2,164 2,168
Crude oil runs 2,005 2,074 2,059 2,074
Refinery production 2,232 2,270 2,245 2,301
International*
Crude oil capacity 428 442 437 442
Crude oil runs 438 397 396 414
Refinery production 453 395 405 412
U.S. Petroleum products outside sales
Gasoline 1,415 1,365 1,356 1,369
Distillates 562 530 553 575
Aviation fuels 195 193 191 180
Other products 613 474 564 492
---------- ----------- ---------- -------------
2,785 2,562 2,664 2,616
International 493 403 477 430
---------- ----------- ---------- -------------
3,278 2,965 3,141 3,046
========== =========== ========== =============
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $1.40 1.00 1.33 1.05
Automotive gasoline-retail 1.62 1.25 1.52 1.35
Distillates-wholesale 1.41 0.92 1.24 0.92
*Includes ConocoPhillips' 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 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 2,232 635 671 701 935 2,942
International E&P 447 560 421 500 1,928 622 683 719 736 2,760
- -----------------------------------------------------------------------------------------------------------------------------
Total E&P 1,125 1,077 967 991 4,160 1,257 1,354 1,420 1,671 5,702
- -----------------------------------------------------------------------------------------------------------------------------
Midstream 31 25 31 43 130 55 42 38 100 235
- -----------------------------------------------------------------------------------------------------------------------------
U.S. R&M 275 248 416 176 1,115 403 734 505 484 2,126
International R&M 114 73 69 26 282 61 84 203 269 617
- -----------------------------------------------------------------------------------------------------------------------------
Total R&M 389 321 485 202 1,397 464 818 708 753 2,743
- -----------------------------------------------------------------------------------------------------------------------------
Lukoil Investment - - - - - - - - 74 74
Chemicals (23) 12 7 11 7 39 46 81 83 249
Emerging Businesses (34) (23) (18) (24) (99) (22) (29) (27) (24) (102)
Corporate and Other (225) (316) (223) (238)(1,002) (190) (218) (209) (177) (794)
- -----------------------------------------------------------------------------------------------------------------------------
Consolidated 1,263 1,096 1,249 985 4,593 1,603 2,013 2,011 2,480 8,107
=============================================================================================================================
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) - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Lukoil Investment - - - - - - - - - -
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) (48) 22
=============================================================================================================================
Net Income (Loss)
U.S. E&P 820 517 546 491 2,374 635 671 701 935 2,942
International E&P 447 560 421 500 1,928 622 683 719 736 2,760
- -----------------------------------------------------------------------------------------------------------------------------
Total E&P 1,267 1,077 967 991 4,302 1,257 1,354 1,420 1,671 5,702
- -----------------------------------------------------------------------------------------------------------------------------
Midstream 31 25 31 43 130 55 42 38 100 235
- -----------------------------------------------------------------------------------------------------------------------------
U.S. R&M 150 248 416 176 990 403 734 505 484 2,126
International R&M 114 73 69 26 282 61 84 203 269 617
- -----------------------------------------------------------------------------------------------------------------------------
Total R&M 264 321 485 202 1,272 464 818 708 753 2,743
- -----------------------------------------------------------------------------------------------------------------------------
Lukoil Investment - - - - - - - - 74 74
Chemicals (23) 12 7 11 7 39 46 81 83 249
Emerging Businesses (34) (23) (18) (24) (99) (22) (29) (27) (24) (102)
Corporate and Other (284) (225) (166) (202) (877) (177) (156) (214) (225) (772)
- -----------------------------------------------------------------------------------------------------------------------------
Consolidated 1,221 1,187 1,306 1,021 4,735 1,616 2,075 2,006 2,432 8,129
=============================================================================================================================
Page 1 of 11
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 1,433 4,526
International E&P 1,260 967 1,029 941 4,197 1,410 1,360 1,654 1,684 6,108
- -----------------------------------------------------------------------------------------------------------------------------
Total E&P 2,310 1,770 1,882 1,698 7,660 2,397 2,409 2,711 3,117 10,634
- -----------------------------------------------------------------------------------------------------------------------------
Midstream 51 42 50 70 213 86 66 62 158 372
- -----------------------------------------------------------------------------------------------------------------------------
U.S. R&M 453 396 639 279 1,767 636 1,149 803 772 3,360
International R&M 150 94 86 16 346 79 111 268 356 814
- -----------------------------------------------------------------------------------------------------------------------------
Total R&M 603 490 725 295 2,113 715 1,260 1,071 1,128 4,174
- -----------------------------------------------------------------------------------------------------------------------------
Lukoil Investment - - - - - - - - 74 74
Chemicals (44) 15 10 14 (5) 49 56 99 109 313
Emerging Businesses (51) (34) (29) (36) (150) (34) (42) (44) (34) (154)
Corporate and Other (300) (502) (328) (364)(1,494) (249) (279) (239) (277)(1,044)
- -----------------------------------------------------------------------------------------------------------------------------
Consolidated 2,569 1,781 2,310 1,677 8,337 2,964 3,470 3,660 4,275 14,369
=============================================================================================================================
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% 34.8% 35.0%
International E&P 64.5% 42.1% 59.1% 46.9% 54.1% 55.9% 49.8% 56.5% 56.3% 54.8%
- -----------------------------------------------------------------------------------------------------------------------------
Total E&P 51.3% 39.2% 48.6% 41.6% 45.7% 47.6% 43.8% 47.6% 46.4% 46.4%
- -----------------------------------------------------------------------------------------------------------------------------
Midstream 39.2% 40.5% 38.0% 38.6% 39.0% 36.0% 36.4% 38.7% 36.7% 36.8%
- -----------------------------------------------------------------------------------------------------------------------------
U.S. R&M 39.3% 37.4% 34.9% 36.9% 36.9% 36.6% 36.1% 37.1% 37.3% 36.7%
International R&M 24.0% 22.3% 19.8% -62.5% 18.5% 22.8% 24.3% 24.3% 24.4% 24.2%
- -----------------------------------------------------------------------------------------------------------------------------
Total R&M 35.5% 34.5% 33.1% 31.5% 33.9% 35.1% 35.1% 33.9% 33.2% 34.3%
- -----------------------------------------------------------------------------------------------------------------------------
Lukoil Investment n/a n/a n/a n/a n/a n/a n/a n/a 0.0% 0.0%
Chemicals 47.7% 20.0% 30.0% 21.4% 240.0% 20.4% 17.9% 18.2% 23.9% 20.4%
Emerging Businesses 33.3% 32.4% 37.9% 33.3% 34.0% 35.3% 31.0% 38.6% 29.4% 33.8%
Corporate and Other 25.0% 37.1% 32.0% 34.6% 32.9% 23.7% 21.9% 12.6% 36.1% 23.9%
- -----------------------------------------------------------------------------------------------------------------------------
Consolidated 50.8% 38.5% 45.9% 41.3% 44.9% 45.9% 42.0% 45.1% 42.0% 43.6%
=============================================================================================================================
Page 2 of 11
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) - - (9) (12)
Tax credit utilization - - - - - - - 22 28 50
Insurance premium adjustment - - - - - - - - (17) (17)
Pending claims and settlements - (20) - - (20) - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Total - (18) 55 (18) 19 (3) - 22 2 21
- -----------------------------------------------------------------------------------------------------------------------------
International E&P
Gain (loss) on asset sales - - 33 - 33 56 (13) - - 43
Property impairments (12) (32) - (18) (62) - - (1) (29) (30)
Insurance premium adjustment - - - - - - - - (17) (17)
Canada tax law change - - - 95 95 - 31 - 41 72
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) (5) 68
- -----------------------------------------------------------------------------------------------------------------------------
Total E&P (12) 88 88 71 235 53 18 21 (3) 89
- -----------------------------------------------------------------------------------------------------------------------------
Midstream
Property impairments - - - - - (12) (10) - - (22)
- -----------------------------------------------------------------------------------------------------------------------------
Total - - - - - (12) (10) - - (22)
- -----------------------------------------------------------------------------------------------------------------------------
U.S. R&M
Property impairments - - - (1) (1) (5) - (6) (28) (39)
Insurance premium adjustment - - - - - - - - (6) (6)
Pending claims and settlements - - - - - - - (34) - (34)
- -----------------------------------------------------------------------------------------------------------------------------
Total - - - (1) (1) (5) - (40) (34) (79)
- -----------------------------------------------------------------------------------------------------------------------------
International R&M
Gain (loss) on asset sales - - - - - - - - - -
Property impairments - - - - - - - - - -
Other - - - - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Total - - - - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Total R&M - - - (1) (1) (5) - (40) (34) (79)
- -----------------------------------------------------------------------------------------------------------------------------
Lukoil Investment
- - - - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Total - - - - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
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) (37) (69)
=============================================================================================================================
* Net of $21 million of property impairments.
Page 3 of 11
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 2,480 8,107
DD&A and property impairments 887 1,003 876 971 3,737 949 932 950 1,131 3,962
Dry hole costs and leasehold impairments 40 54 75 131 300 87 105 150 75 417
Accretion on discounted liabilities 33 35 39 38 145 36 41 49 45 171
Deferred income taxes 243 10 80 68 401 360 310 328 90 1,088
Undistributed equity earnings 18 (66) (143) 132 (59) (181) (97) (263) (236) (777)
Net (gain) loss on asset dispositions (56) (28) (142) 15 (211) (82) (6) 6 (34) (116)
Other 56 (94) (88) (202) (328) 70 65 (30) (295) (190)
Net working capital changes 636 16 51 (114) 589 (777) (1,101) 1,267 (69) (680)
Discontinued operations - 120 61 8 189 8 14 (55) 10 (23)
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by
Operating Activities 3,120 2,146 2,058 2,032 9,356 2,073 2,276 4,413 3,197 11,959
- -----------------------------------------------------------------------------------------------------------------------------
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) (1,552)(5,249)
Midstream (2) (2) (2) (4) (10) (3) (2) (1) (1) (7)
R&M (203) (245) (302) (429)(1,179) (215) (278) (277) (574)(1,344)
Lukoil Investment - - - - - - - - (2,649)(2,649)
Chemicals - - - - - - - - - -
Emerging Businesses (66) (98) (60) (60) (284) (28) (27) (19) (1) (75)
Corporate and Other (25) (45) (47) (71) (188) (25) (38) (49) (60) (172)
- -----------------------------------------------------------------------------------------------------------------------------
Total capital expend. & investments (1,308) (1,557) (1,520) (1,784)(6,169) (1,481) (1,584) (1,594) (4,837)(9,496)
Acquisitions - adoption & application of
FIN 46 225 - - - 225 - - 11 - 11
Proceeds from asset dispositions 125 466 913 1,155 2,659 449 905 73 164 1,591
Long-term advances to/collections from
affiliates and other investments (28) (8) 38 21 23 (44) 9 30 112 107
Discontinued operations (26) (5) (28) (177) (236) (1) (1) - 1 (1)
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Used for Investing Activities (1,012) (1,104) (597) (785)(3,498) (1,077) (671) (1,480) (4,560)(7,788)
- -----------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Net issuance (repayment) of debt (1,569) (709) (1,514) (1,019)(4,811) (722) (1,361) (221) (471)(2,775)
Issuance of stock 19 14 20 55 108 112 95 62 161 430
Dividends (271) (272) (272) (292)(1,107) (294) (296) (296) (346)(1,232)
Other (8) 19 64 36 111 89 94 (66) 61 178
- -----------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used for)
Financing Activities (1,829) (948) (1,702) (1,220)(5,699) (815) (1,468) (521) (595)(3,399)
- -----------------------------------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes 57 13 (26) (20) 24 (12) 8 47 82 125
- -----------------------------------------------------------------------------------------------------------------------------
Net Change in Cash
and Cash Equivalents 336 107 (267) 7 183 169 145 2,459 (1,876) 897
Cash and cash equivalents
at beginning of period 307 643 750 483 307 490 659 804 3,263 490
- -----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents
at End of Period 643 750 483 490 490 659 804 3,263 1,387 1,387
=============================================================================================================================
Page 4 of 11
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 1,671 5,702
=============================================================================================================================
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 1,596 1,563
- -----------------------------------------------------------------------------------------------------------------------------
E&P segment plus Lukoil Investment segment: 1,626 1,641 1,561 1,611 1,609 1,611 1,563 1,484 1,746 1,601
- -----------------------------------------------------------------------------------------------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated 880 850 793 806 832 828 809 733 821 797
Equity affiliates 55 117 120 116 102 113 104 111 103 108
- -----------------------------------------------------------------------------------------------------------------------------
Total 935 967 913 922 934 941 913 844 924 905
=============================================================================================================================
Sales of crude oil produced (MB/D) 913 996 914 921 936 927 888 875 903 898
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas Liquids (MB/D) 71 72 62 72 69 76 79 87 92 84
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 3,605 3,485 3,373 3,581 3,510 3,415 3,299 3,179 3,356 3,312
Equity affiliates 12 11 11 12 12 9 4 4 4 5
- -----------------------------------------------------------------------------------------------------------------------------
Total 3,617 3,496 3,384 3,593 3,522 3,424 3,303 3,183 3,360 3,317
=============================================================================================================================
Canadian Syncrude (MB/D) 17 19 22 18 19 23 20 22 20 21
- -----------------------------------------------------------------------------------------------------------------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 34.06 29.02 30.18 31.17 31.11 35.23 38.31 43.86 48.29 41.42
Brent dated 31.51 26.03 28.41 29.42 28.84 31.95 35.36 41.54 44.00 38.21
Natural Gas--Henry Hub 1st of month ($/mcf) 6.58 5.40 4.97 4.60 5.39 5.69 6.00 5.75 7.07 6.13
- -----------------------------------------------------------------------------------------------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated 31.27 26.33 28.15 28.43 28.54 32.08 35.32 40.41 42.79 37.65
Equity affiliates* 20.69 17.36 20.63 18.14 19.01 19.27 25.48 26.19 26.55 24.18
Total* 30.69 25.25 27.12 27.27 27.52 30.44 34.17 38.78 40.96 36.06
- -----------------------------------------------------------------------------------------------------------------------------
* Certain amounts in 2003 and first three quarters of 2004 restated to conform to current period presentation.
Natural Gas Liquids ($/bbl) 24.65 19.73 20.10 23.36 21.95 25.43 26.71 30.73 35.37 30.02
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas ($/mcf)
Consolidated 4.50 3.99 3.84 3.99 4.08 4.41 4.43 4.48 5.13 4.62
Equity affiliates 4.82 4.89 4.12 3.96 4.44 3.91 0.31 0.31 0.25 2.19
Total 4.50 3.99 3.84 3.99 4.08 4.41 4.43 4.48 5.13 4.61
- -----------------------------------------------------------------------------------------------------------------------------
Exploration Charges ($ Millions)
Dry Holes 20 30 39 78 167 67 42 82 51 242
Lease Impairments 20 24 36 53 133 20 63 68 24 175
- -----------------------------------------------------------------------------------------------------------------------------
Total Non-Cash Charges 40 54 75 131 300 87 105 150 75 417
Other (G&G and Lease Rentals) 76 88 57 80 301 56 58 55 117 286
- -----------------------------------------------------------------------------------------------------------------------------
Total Exploration Charges 116 142 132 211 601 143 163 205 192 703
=============================================================================================================================
Depreciation, Depletion and
Amortization ($ Millions) 662 652 653 695 2,662 704 720 711 783 2,918
- -----------------------------------------------------------------------------------------------------------------------------
Page 5 of 11
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 2,374 635 671 701 935 2,942
=============================================================================================================================
Alaska ($ Millions) 508 302 302 333 1,445 403 397 451 581 1,832
- -----------------------------------------------------------------------------------------------------------------------------
Lower 48 ($ Millions) 312 215 244 158 929 232 274 250 354 1,110
- -----------------------------------------------------------------------------------------------------------------------------
Production
Total U.S. (MBOE/D) 700 683 651 664 674 659 637 579 642 629
- -----------------------------------------------------------------------------------------------------------------------------
Crude Oil and Condensate (MB/D)
Alaska 337 331 314 318 325 320 307 253 313 298
Lower 48 60 57 51 50 54 53 52 50 50 51
- -----------------------------------------------------------------------------------------------------------------------------
Total 397 388 365 368 379 373 359 303 363 349
=============================================================================================================================
Sales of crude oil produced (MB/D) 391 389 369 372 380 373 354 312 356 349
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas Liquids (MB/D)*
Alaska 26 23 19 24 23 26 23 19 24 23
Lower 48 22 26 25 27 25 24 26 26 26 26
- -----------------------------------------------------------------------------------------------------------------------------
Total 48 49 44 51 48 50 49 45 50 49
=============================================================================================================================
*Includes reinjection volumes sold lease-to-
lease: 15 14 13 16 15 16 15 10 14 14
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Alaska 189 162 180 205 184 185 147 164 163 165
Lower 48 1,338 1,311 1,271 1,264 1,295 1,233 1,226 1,220 1,214 1,223
- -----------------------------------------------------------------------------------------------------------------------------
Total 1,527 1,473 1,451 1,469 1,479 1,418 1,373 1,384 1,377 1,388
=============================================================================================================================
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Alaska
North Slope 25.95 21.70 22.82 23.17 23.41 28.00 31.69 35.66 39.53 33.61
- -----------------------------------------------------------------------------------------------------------------------------
West Coast 31.47 27.19 28.31 28.51 28.87 32.93 36.53 40.48 44.37 38.47
- -----------------------------------------------------------------------------------------------------------------------------
Lower 48 31.48 27.34 27.94 28.02 28.76 31.86 34.39 39.56 42.30 36.95
- -----------------------------------------------------------------------------------------------------------------------------
Total U.S. 31.47 27.21 28.26 28.45 28.85 32.78 36.22 40.33 44.08 38.25
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas Liquids ($/bbl)
Alaska 31.32 27.24 28.42 28.82 29.04 32.93 36.38 40.52 43.78 38.64
- -----------------------------------------------------------------------------------------------------------------------------
Lower 48 22.13 17.77 19.71 20.81 20.02 24.19 25.82 29.40 32.80 28.14
- -----------------------------------------------------------------------------------------------------------------------------
Total U.S. 24.96 20.25 21.31 22.85 22.30 26.80 28.38 32.22 36.21 31.05
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas ($/mcf)
Alaska 1.97 1.88 1.33 1.88 1.76 2.54 2.31 2.22 2.23 2.35
- -----------------------------------------------------------------------------------------------------------------------------
Lower 48 5.53 4.77 4.61 4.32 4.81 5.00 5.49 5.29 6.04 5.46
- -----------------------------------------------------------------------------------------------------------------------------
Total U.S. 5.40 4.63 4.45 4.18 4.67 4.88 5.35 5.19 5.92 5.33
- -----------------------------------------------------------------------------------------------------------------------------
Kenai, Alaska LNG Sales
Volume (MMCF/D) 130 91 121 140 121 118 82 115 107 105
- -----------------------------------------------------------------------------------------------------------------------------
Sales price per MCF 4.38 4.56 4.46 4.44 4.45 4.51 4.80 5.06 5.25 4.90
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Exploration Charges ($ Millions)
Dry Holes 16 3 9 48 76 32 32 (5) - 59
Lease Impairments 13 12 10 12 47 11 11 10 10 42
- -----------------------------------------------------------------------------------------------------------------------------
Total Non-Cash Charges 29 15 19 60 123 43 43 5 10 101
Other (G&G and Lease Rentals) 28 22 23 8 81 15 19 15 37 86
- -----------------------------------------------------------------------------------------------------------------------------
Total U.S. Exploration Charges 57 37 42 68 204 58 62 20 47 187
=============================================================================================================================
Alaska Only 25 10 11 9 55 17 43 7 14 81
- -----------------------------------------------------------------------------------------------------------------------------
Depreciation, Depletion and
Amortization ($ Millions)
Alaska 124 135 130 127 516 119 125 122 144 510
Lower 48 151 150 156 134 591 146 145 157 150 598
- -----------------------------------------------------------------------------------------------------------------------------
Total U.S. 275 285 286 261 1,107 265 270 279 294 1,108
=============================================================================================================================
Page 6 of 11
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 1,928 622 683 719 736 2,760
=============================================================================================================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 926 958 910 947 935 952 926 905 954 934
- -----------------------------------------------------------------------------------------------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated
Norway 226 214 207 205 213 215 212 189 211 207
United Kingdom 87 82 67 72 77 67 64 59 66 64
Canada 33 31 29 28 30 27 25 24 24 25
China 23 27 25 28 26 32 28 25 17 25
Indonesia 21 17 16 10 16 15 14 14 18 15
Vietnam 16 15 11 22 16 31 31 35 33 33
Timor Sea 3 3 3 3 3 5 15 29 34 21
Other 74 73 70 70 72 63 61 55 55 58
Equity affiliates 55 117 120 116 102 113 104 111 103 108
- -----------------------------------------------------------------------------------------------------------------------------
Total 538 579 548 554 555 568 554 541 561 556
=============================================================================================================================
Sales of crude oil produced (MB/D) 522 607 545 549 556 554 534 563 547 549
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas Liquids (MB/D)
Norway 8 7 7 8 7 9 8 8 9 8
Canada 11 11 9 10 10 10 10 10 11 10
Other 4 5 2 3 4 7 12 24 22 17
- -----------------------------------------------------------------------------------------------------------------------------
Total 23 23 18 21 21 26 30 42 42 35
=============================================================================================================================
Natural Gas (MMCF/D)
Consolidated
Norway 305 273 216 307 275 319 303 274 306 301
United Kingdom 1,002 952 853 954 940 879 821 720 852 818
Canada 436 424 448 431 435 428 437 425 442 433
Timor Sea 61 61 61 56 60 40 32 35 35 35
Indonesia 224 246 275 275 255 248 237 248 266 250
Vietnam - - - 12 3 17 15 15 19 16
Other 50 56 69 77 63 66 81 78 59 71
Equity affiliates 12 11 11 12 12 9 4 4 4 5
- -----------------------------------------------------------------------------------------------------------------------------
Total 2,090 2,023 1,933 2,124 2,043 2,006 1,930 1,799 1,983 1,929
=============================================================================================================================
Canadian Syncrude (MB/D) 17 19 22 18 19 23 20 22 20 21
- -----------------------------------------------------------------------------------------------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
Norway 32.72 26.28 29.08 29.08 29.24 32.13 34.72 40.70 41.82 37.55
United Kingdom 30.11 24.34 28.32 28.29 27.70 31.27 34.19 39.57 44.79 37.00
Canada 28.40 23.61 24.15 23.71 25.06 28.95 30.58 36.16 38.44 32.92
China 28.87 26.51 26.38 28.56 27.55 29.91 33.02 37.99 32.87 33.31
Indonesia 29.35 24.54 26.32 26.52 26.88 32.21 36.20 42.71 45.43 39.21
Vietnam 30.26 27.54 27.12 30.88 29.21 31.76 36.42 41.36 42.94 38.31
Timor Sea 32.43 27.38 28.25 29.75 29.37 35.49 37.32 46.65 45.95 43.91
Other 30.16 25.44 27.42 27.94 27.68 30.89 34.87 39.54 39.28 36.05
Equity affiliates* 20.69 17.36 20.63 18.14 19.01 19.27 25.48 26.19 26.55 24.18
Total* 30.11 23.99 26.35 26.47 26.61 28.86 32.81 37.92 38.93 34.67
- -----------------------------------------------------------------------------------------------------------------------------
* 2003 and first three quarters of 2004 restated to conform to current period presentation.
Natural Gas Liquids ($/bbl)
Norway 21.85 18.13 18.50 22.96 20.27 24.34 24.22 27.79 37.64 28.92
Canada 26.11 20.78 23.55 25.27 23.93 26.38 28.58 31.15 36.61 30.77
Other 23.40 16.73 14.18 25.13 16.48 18.43 21.24 29.50 32.17 27.79
Total 24.22 18.96 18.23 24.35 21.39 23.53 24.69 29.53 34.59 28.96
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas ($/mcf)
Consolidated
Norway 3.66 3.86 4.21 4.09 3.94 4.37 3.99 4.12 4.45 4.24
United Kingdom 3.52 3.33 2.98 4.13 3.50 4.04 3.47 3.79 4.76 4.03
Canada 5.42 4.34 4.17 4.02 4.48 4.88 5.01 4.64 5.43 5.00
Timor Sea 0.43 0.42 0.45 0.42 0.43 0.43 0.45 0.46 0.49 0.46
Indonesia 4.66 4.16 4.35 4.21 4.33 4.38 4.28 5.02 4.74 4.61
Vietnam - - - 1.04 1.04 1.10 0.99 1.01 1.05 1.04
Other 0.54 0.54 0.54 0.68 0.58 0.66 0.59 0.62 0.97 0.69
Equity affiliates 4.82 4.89 4.12 3.96 4.44 3.91 0.31 0.31 0.25 2.19
Total 3.90 3.56 3.42 3.87 3.69 4.11 3.81 3.98 4.63 4.14
- -----------------------------------------------------------------------------------------------------------------------------
International Exploration Charges ($ Millions)
Dry Holes 4 27 30 30 91 35 10 87 51 183
Lease Impairments 7 12 26 41 86 9 52 58 14 133
- -----------------------------------------------------------------------------------------------------------------------------
Total Non-Cash Charges 11 39 56 71 177 44 62 145 65 316
Other (G&G and Lease Rentals) 48 66 34 72 220 41 39 40 80 200
- -----------------------------------------------------------------------------------------------------------------------------
Total International Exploration Charges 59 105 90 143 397 85 101 185 145 516
=============================================================================================================================
Depreciation, Depletion and
Amortization ($ Millions) 387 367 367 434 1,555 439 450 432 489 1,810
- -----------------------------------------------------------------------------------------------------------------------------
Page 7 of 11
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 1,272 464 818 708 753 2,743
=============================================================================================================================
United States ($ Millions) 150 248 416 176 990 403 734 505 484 2,126
- -----------------------------------------------------------------------------------------------------------------------------
International ($ Millions) 114 73 69 26 282 61 84 203 269 617
- -----------------------------------------------------------------------------------------------------------------------------
Market Indicators
U.S. East Coast Crack Spread ($/bbl) 6.16 3.46 6.37 4.98 5.24 6.87 9.14 7.00 5.73 7.19
U.S. Gulf Coast Crack Spread ($/bbl) 5.64 3.65 5.38 3.72 4.60 6.36 9.17 6.33 4.09 6.49
U.S. Group Central Crack Spread ($/bbl) 6.12 6.96 8.32 5.34 6.69 6.91 11.65 8.09 5.52 8.04
U.S. West Coast Crack Spread ($/bbl) 12.79 11.39 14.00 11.44 12.41 16.10 24.13 17.92 17.25 18.85
U.S. Weighted 3:2:1 Crack Spread ($/bbl) 6.99 5.86 7.84 5.67 6.59 8.39 12.60 9.10 7.24 9.33
NW Europe Crack Spread ($/bbl) 5.68 3.17 3.11 3.20 3.79 2.56 5.13 3.90 3.90 3.87
Singapore 3:2:1Crack Spread ($/bbl) 8.16 4.65 5.64 7.12 6.39 10.33 9.48 13.11 17.22 12.54
U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 1.53 2.36 2.15 1.45 1.87 0.69 1.83 1.50 1.97 1.50
- -----------------------------------------------------------------------------------------------------------------------------
Realized Margins
Refining Margin ($/bbl)
U.S. 6.46 5.34 6.39 5.56 5.93 7.12 9.88 8.84 8.38 8.56
International 6.00 3.67 4.38 3.61 4.44 5.51 7.24 9.01 10.78 8.40
- -----------------------------------------------------------------------------------------------------------------------------
Marketing Margin ($/bbl)
U.S. 1.86 2.62 2.17 1.75 2.10 1.08 1.49 1.15 1.85 1.24
International 7.09 9.06 7.82 6.41 7.59 6.50 8.20 7.69 8.13 7.66
- -----------------------------------------------------------------------------------------------------------------------------
Depreciation, Depletion and
Amortization ($ Millions) 167 174 174 174 689 186 172 202 212 772
- -----------------------------------------------------------------------------------------------------------------------------
Turnaround Expense ($ Millions) 60 38 19 63 180 59 78 57 73 267
- -----------------------------------------------------------------------------------------------------------------------------
Eastern U.S.
Crude Oil Charge Input (MB/D) 415 435 428 421 425 413 375 368 346 375
Total Charge Input (MB/D) 466 488 468 442 466 440 421 415 407 421
Crude Oil Capacity Utilization (%) 97% 101% 100% 98% 99% 96% 87% 87% 82% 88%
Clean Product Yield (%) 88% 84% 86% 88% 86% 87% 84% 87% 90% 87%
- -----------------------------------------------------------------------------------------------------------------------------
U.S. Gulf Coast
Crude Oil Charge Input (MB/D) 668 702 708 680 690 699 709 617 689 678
Total Charge Input (MB/D) 771 797 803 782 788 774 789 717 779 765
Crude Oil Capacity Utilization (%) 93% 98% 99% 95% 96% 97% 99% 88% 98% 96%
Clean Product Yield (%) 82% 78% 80% 78% 79% 79% 75% 78% 82% 78%
- -----------------------------------------------------------------------------------------------------------------------------
Central U.S.
Crude Oil Charge Input (MB/D) 573 632 556 584 586 601 638 634 583 614
Total Charge Input (MB/D) 601 654 584 614 613 636 673 669 614 648
Crude Oil Capacity Utilization (%) 91% 101% 88% 93% 93% 96% 102% 99% 91% 97%
Clean Product Yield (%) 84% 82% 81% 86% 83% 83% 83% 85% 84% 84%
- -----------------------------------------------------------------------------------------------------------------------------
Western U.S.
Crude Oil Charge Input (MB/D) 352 359 391 389 373 392 397 392 387 392
Total Charge Input (MB/D) 365 374 408 410 390 409 419 409 409 412
Crude Oil Capacity Utilization (%) 90% 91% 100% 99% 95% 100% 101% 99% 98% 99%
Clean Product Yield (%) 82% 81% 83% 83% 82% 81% 81% 82% 83% 82%
- -----------------------------------------------------------------------------------------------------------------------------
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 2,005 2,059
Total Charge Input (MB/D) 2,203 2,313 2,263 2,248 2,257 2,259 2,302 2,210 2,209 2,246
Crude Oil Capacity Utilization (%) 93% 98% 96% 96% 96% 97% 98% 93% 93% 95%
Clean Product Yield (%) 84% 81% 82% 83% 82% 82% 80% 82% 84% 82%
- -----------------------------------------------------------------------------------------------------------------------------
Refined Products Production (MB/D)
Gasoline 1,060 1,077 1,070 1,061 1,067 1,059 1,043 1,060 1,072 1,059
Distillates 590 615 591 591 597 604 591 574 619 597
Aviation Fuel 190 173 200 195 189 167 177 164 158 167
Other 414 492 461 423 448 415 489 400 383 422
- -----------------------------------------------------------------------------------------------------------------------------
Total 2,254 2,357 2,322 2,270 2,301 2,245 2,300 2,198 2,232 2,245
=============================================================================================================================
Petroleum Products Sales (MB/D)
Gasoline 1,331 1,381 1,398 1,365 1,369 1,315 1,328 1,366 1,415 1,356
Distillates 600 590 580 530 575 570 538 544 562 553
Aviation Fuel 164 164 197 193 180 178 191 200 195 191
Other 509 493 497 474 492 517 573 553 613 564
- -----------------------------------------------------------------------------------------------------------------------------
Total 2,604 2,628 2,672 2,562 2,616 2,580 2,630 2,663 2,785 2,664
=============================================================================================================================
Page 8 of 11
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) 299 280 288 269 283 289 197 291 298 269
Total Charge Input (MB/D) 301 286 296 280 291 299 216 300 308 280
Crude Oil Capacity Utilization (%) 98% 92% 94% 88% 93% 94% 64% 100% 102% 90%
Clean Product Yield (%) 84% 83% 84% 84% 84% 84% 81% 83% 81% 82%
- -----------------------------------------------------------------------------------------------------------------------------
International - Equity Affiliates - Net Share*
Crude Oil Charge Input (MB/D) 134 132 129 128 131 120 112 134 140 127
Total Charge Input (MB/D) 137 135 134 131 134 121 113 138 145 130
Crude Oil Capacity Utilization (%) 98% 97% 95% 94% 96% 87% 81% 99% 103% 92%
Clean Product Yield (%) 82% 83% 81% 82% 82% 82% 83% 81% 81% 82%
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INTERNATIONAL
Crude Oil Charge Input (MB/D) 433 412 417 397 414 409 309 425 438 396
Total Charge Input (MB/D) 438 421 430 411 425 420 329 438 453 410
Crude Oil Capacity Utilization (%) 98% 93% 94% 90% 94% 92% 69% 99% 102% 91%
Clean Product Yield (%) 83% 83% 83% 84% 83% 84% 82% 82% 81% 82%
- -----------------------------------------------------------------------------------------------------------------------------
Refined Products Production (MB/D)
Gasoline 142 132 139 125 134 124 109 138 144 129
Distillates 183 177 185 154 175 181 136 190 190 174
Aviation Fuel 24 15 19 21 20 24 16 22 25 22
Other 87 83 70 95 83 81 57 89 94 80
- -----------------------------------------------------------------------------------------------------------------------------
Total 436 407 413 395 412 410 318 439 453 405
=============================================================================================================================
Petroleum Products Sales (MB/D)
Gasoline 202 190 181 171 186 185 180 173 180 180
Distillates 181 199 192 172 186 228 184 207 222 210
Aviation Fuel 5 7 14 7 8 6 9 10 8 8
Other 40 52 54 53 50 82 67 82 83 79
- -----------------------------------------------------------------------------------------------------------------------------
Total 428 448 441 403 430 501 440 472 493 477
=============================================================================================================================
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 2,443 2,455
Total Charge Input (MB/D) 2,641 2,734 2,693 2,659 2,682 2,679 2,631 2,648 2,662 2,656
Crude Oil Capacity Utilization (%) 94% 97% 96% 95% 95% 96% 93% 94% 94% 94%
Clean Product Yield (%) 84% 81% 82% 83% 83% 82% 80% 82% 84% 82%
- -----------------------------------------------------------------------------------------------------------------------------
Refined Products Production (MB/D)
Gasoline 1,202 1,209 1,209 1,186 1,201 1,183 1,152 1,198 1,216 1,188
Distillates 773 792 776 745 772 785 727 764 809 771
Aviation Fuel 214 188 219 216 209 191 193 186 183 189
Other 501 575 531 518 531 496 546 489 477 502
- -----------------------------------------------------------------------------------------------------------------------------
Total 2,690 2,764 2,735 2,665 2,713 2,655 2,618 2,637 2,685 2,650
=============================================================================================================================
Petroleum Products Sales (MB/D)
Gasoline 1,533 1,571 1,579 1,536 1,555 1,500 1,508 1,539 1,595 1,536
Distillates 781 789 772 702 761 798 722 751 784 763
Aviation Fuel 169 171 211 200 188 184 200 210 203 199
Other 549 545 551 527 542 599 640 635 696 643
- -----------------------------------------------------------------------------------------------------------------------------
Total 3,032 3,076 3,113 2,965 3,046 3,081 3,070 3,135 3,278 3,141
=============================================================================================================================
* 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 11
LUKOIL INVESTMENT
2003 2004
--------------------------------------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
--------------------------------------------------------------------------------
LUKOIL Investment
Net Income ($ Millions) - - - - - - - - 74 74
=============================================================================================================================
Upstream
Production*
Total (MB/D) - - - - - - - - 150 38
- -----------------------------------------------------------------------------------------------------------------------------
* Represents our estimated net share of LUKOIL's production.
Industry Prices
Crude Oil ($/bbl)
Urals crude (CIF Medium) - - - - - - - - 38.82 38.82
- -----------------------------------------------------------------------------------------------------------------------------
Downstream
Refinery Throughput*
Crude Processed (MB/D) - - - - - - - - 77 19
- -----------------------------------------------------------------------------------------------------------------------------
* Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM
2003 2004
--------------------------------------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
--------------------------------------------------------------------------------
Midstream Net Income ($ Millions) 31 25 31 43 130 55 42 38 100 235
=============================================================================================================================
U.S. Equity Affiliate ($ Millions)* 13 23 18 18 72 33 33 26 51 143
- -----------------------------------------------------------------------------------------------------------------------------
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States 51 53 50 54 52 54 24 28 23 32
International 47 35 47 50 45 47 33 49 49 45
Equity Affiliates
United States* 114 110 111 110 111 109 112 111 113 111
International 7 7 7 6 7 6 5 6 7 6
- -----------------------------------------------------------------------------------------------------------------------------
Total 219 205 215 220 215 216 174 194 192 194
=============================================================================================================================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
Natural Gas Liquids Fractionated (MB/D)
United States* 168 158 172 168 167 158 144 145 140 147
International 59 49 60 62 57 63 43 62 62 58
- -----------------------------------------------------------------------------------------------------------------------------
Total 227 207 232 230 224 221 187 207 202 205
=============================================================================================================================
* Excludes DEFS.
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 25.59 20.99 20.94 23.14 22.67 25.68 26.42 31.03 34.40 29.38
DEFS 24.53 20.53 20.67 22.76 22.12 24.81 25.61 30.27 33.69 28.60
- -----------------------------------------------------------------------------------------------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas liquids
component and location mix.
Depreciation, Depletion and
Amortization ($ Millions) 14 14 13 13 54 13 9 11 10 43
- -----------------------------------------------------------------------------------------------------------------------------
CHEMICALS
2003 2004
--------------------------------------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
--------------------------------------------------------------------------------
Chemicals
Net Income (Loss) ($ Millions) (23) 12 7 11 7 39 46 81 83 249
=============================================================================================================================
Industry Margins (Cents/Lb)*
Ethylene industry cash margin 5.31 12.50 8.00 6.44 8.06 9.38 10.70 8.27 12.22 10.14
HDPE industry contract sales margin 5.28 6.59 7.83 10.16 7.46 9.43 9.21 9.23 11.68 9.89
Styrene industry contract sales margin 10.47 12.57 13.32 13.21 12.39 13.06 13.33 13.73 13.40 13.38
- -----------------------------------------------------------------------------------------------------------------------------
* Prices, economics and views expressed by CMAI are strictly the opinion of CMAI and Purvin & Gertz and are based on
information collected within the public sector and on assessments by CMAI and Purvin & Gertz staff utilizing reasonable
care consistent with normal industry practice. CMAI and Purvin & Gertz make no guarantee or warranty and assume no
liability as to their use.
Page 10 of 11
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) (24) (102)
=============================================================================================================================
Detail of Net Income (Loss) ($ Millions)
Technology Solutions (5) (6) (5) (4) (20) (4) (4) (3) (7) (18)
Gas-to-Liquids (20) (13) (7) (10) (50) (9) (7) (9) (8) (33)
Power 1 (1) (3) (2) (5) (4) (16) (8) (3) (31)
Other (10) (3) (3) (8) (24) (5) (2) (7) (6) (20)
- -----------------------------------------------------------------------------------------------------------------------------
Total (34) (23) (18) (24) (99) (22) (29) (27) (24) (102)
=============================================================================================================================
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) (225) (772)
=============================================================================================================================
Detail of Net Income (Loss) ($ Millions)
Net interest expense* (190) (145) (134) (163) (632) (113) (143) (149) (109) (514)
Corporate overhead* (30) (43) (33) (67) (173) (48) (52) (51) (61) (212)
Discontinued operations 53 91 57 36 237 13 62 (5) (48) 22
Merger-related costs (27) (115) (41) (40) (223) (14) - - - (14)
Accounting change (112) - - - (112) - - - - -
Other* 22 (13) (15) 32 26 (15) (23) (9) (7) (54)
- -----------------------------------------------------------------------------------------------------------------------------
Total (284) (225) (166) (202) (877) (177) (156) (214) (225) (772)
=============================================================================================================================
* Certain amounts reclassified between these line items in 1st, 2nd, and 3rd quarters of 2004 to conform to 4th quarter 2004
presentation.
Before-Tax Net Interest Expense ($ Millions)
Interest expense (319) (286) (290) (273)(1,168) (260) (263) (222) (231) (976)
Capitalized interest 73 78 98 77 326 115 104 121 90 430
Interest revenue 15 17 13 11 56 16 12 8 11 47
Receivables monetization related (6) (6) (10) (8) (30) (1) (1) 3 1 2
Premium on early debt retirement (12) (11) - (45) (68) - - (58) - (58)
- -----------------------------------------------------------------------------------------------------------------------------
(249) (208) (189) (238) (884) (130) (148) (148) (129) (555)
=============================================================================================================================
Debt
Total Debt ($ Millions) 21,007 20,254 18,739 17,780 17,780 17,109 15,619 15,486 15,002 15,002
Debt-to-Capital Ratio 40% 38% 36% 34% 34% 32% 29% 28% 26% 26%
- -----------------------------------------------------------------------------------------------------------------------------
Page 11 of 11