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): July 27, 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 July 27, 2005, ConocoPhillips issued a press release announcing the
company's financial and operating results for the quarter ended June 30, 2005. 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 July 27, 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
July 27, 2005
3
EXHIBIT INDEX
Exhibit
No. Description
99.1 Press release issued by ConocoPhillips on July 27, 2005.
99.2 Financial and operational tables.
99.3 Supplemental financial information.
4
Exhibit 99.1
ConocoPhillips Reports Second Quarter Net Income of $3.1 Billion
HOUSTON--(BUSINESS WIRE)--July 27, 2005--ConocoPhillips (NYSE:COP)
Earnings at a glance
Second Quarter Six Months
- ----------------------------------------------------------------------
2005 2004 2005 2004
- ----------------------------------------------------------------------
Income from
continuing
operations $3,131 million 2,013 million $6,054 million 3,616 million
Income from
discontinued
opera-
tions $ 7 62 $ (4) 75
Net income $3,138 2,075 $6,050 3,691
- ----------------------------------------------------------------------
Diluted
income per
share
Income from
continuing
opera-
tions(a) $2.21 1.44 $4.26 2.60
Net
income(a) $2.21 1.48 $4.26 2.65
- ----------------------------------------------------------------------
Revenues $42.6 billion 31.9 billion $81.5 billion 62.1 billion
- ----------------------------------------------------------------------
(a) Per-share amounts in all periods reflect the impact of a 2-for-1
stock split on June 1, 2005.
ConocoPhillips (NYSE:COP) today reported second-quarter net income
of $3,138 million, or $2.21 per share, compared with $2,075 million,
or $1.48 per share, for the same quarter in 2004. Total revenues were
$42.6 billion, versus $31.9 billion a year ago.
Income from continuing operations for the second quarter was
$3,131 million, or $2.21 per share, compared with $2,013 million, or
$1.44 per share, for the same period a year ago.
"We had a strong quarter," said Jim Mulva, chairman and chief
executive officer. "Upstream, we ran as expected. The total company
produced 1.76 million BOE per day, including 1.54 million BOE per day
from our Exploration and Production segment and an estimated 0.22
million BOE per day from our LUKOIL Investment segment. At the same
time, we completed planned and unplanned maintenance in our E&P
business and finalized the formation of the Naryanmarneftegaz joint
venture to develop resources in the Timan-Pechora region of Russia.
"Downstream benefited from a strong market environment in
refining, partially offset by narrowing light-heavy differentials.
Worldwide crude oil capacity utilization was at 97 percent, as
expected, with our U.S. refining system running near stated capacity.
In addition, worldwide marketing margins improved over the previous
quarter.
"Our financial position continues to improve, and our return on
capital employed remains strong and competitive. We ended the quarter
with a debt-to-capital ratio of 22 percent. During the quarter, we
generated $2.8 billion in cash from operations, invested $3.1 billion
in capital projects and investments, paid $432 million in dividends
and repurchased $382 million of ConocoPhillips common stock. In
addition, the previously announced 24 percent dividend increase and
2-for-1 stock split occurred during the second quarter."
For the first six months of 2005, net income was $6,050 million,
or $4.26 per share, versus $3,691 million, or $2.65 per share, for
2004. Income from continuing operations was $6,054 million, or $4.26
per share, compared with $3,616 million, or $2.60 per share, for the
same period a year ago. Total revenues were $81.5 billion, versus
$62.1 billion a year ago.
The results for ConocoPhillips' business segments follow.
Exploration & Production (E&P)
Second-quarter financial results: E&P income from continuing
operations was $1,929 million, up from $1,787 million in the first
quarter of 2005 and up from $1,354 million in the second quarter of
2004. The increase from the first quarter was primarily the result of
higher realized prices, partially offset by lower volumes and lower
gains on asset sales. In addition, second-quarter results benefited
from lower exploration expenses. Improved results from the second
quarter of 2004 were due primarily to higher realized crude oil and
natural gas prices, partially offset by benefits last year from
Canadian tax law changes, higher production taxes in a higher price
environment and reduced foreign exchange gains.
As expected, ConocoPhillips' E&P daily production, including
Canadian Syncrude and excluding the LUKOIL Investment segment,
averaged 1.54 million barrels of oil equivalent (BOE) per day, down
from 1.60 million BOE per day for the first quarter and down slightly
from 1.56 million BOE per day in the second quarter of 2004. Compared
with the previous quarter, the company experienced greater output
during the second quarter of 2005 from the Lower 48, Canada and
Venezuela. These increases were more than offset by approximately
45,000 BOE per day of planned downtime, primarily in the Timor Sea,
Alaska and Norway, as well as approximately 25,000 BOE per day of
unscheduled downtime in Norway, Alaska and the United Kingdom. The
decrease from the second quarter of 2004 was due primarily to lower
production in the North Sea and Alaska partially offset by increased
production in Venezuela, the Timor Sea and the Lower 48.
During the quarter, ConocoPhillips completed the acquisition of a
30 percent interest in the Naryanmarneftegaz joint venture to develop
resources in the Timan-Pechora region of Russia. The amount incurred
to complete the transaction was approximately $512 million.
Six months financial results: E&P income from continuing
operations for the first six months of 2005 was $3,716 million, up
from $2,611 million in 2004, primarily due to higher realized crude
oil and natural gas prices, partially offset by higher depreciation,
depletion and amortization, higher production taxes and last year's
benefits from tax law changes.
Midstream
Second-quarter financial results: Midstream income from continuing
operations was $68 million, down from $385 million in the first
quarter of 2005 and up from $42 million in the second quarter of 2004.
The decrease from the previous quarter was primarily the result of the
first-quarter net benefit to ConocoPhillips associated with a
restructuring of its ownership in Duke Energy Field Services, LLC
(DEFS), including DEFS' sale of its interest in TEPPCO. The increase
over the second quarter of 2004 was due primarily to higher natural
gas liquids prices in both DEFS and the company's consolidated
operations.
Six months financial results: Midstream income from continuing
operations for the first six months of 2005 increased to $453 million,
from $97 million in 2004. The increase was due primarily to higher
equity earnings from DEFS, which included the first-quarter benefit to
ConocoPhillips associated with the restructuring of its ownership in
DEFS. In addition, natural gas liquids prices in both DEFS and the
company's consolidated operations were higher in the first six months
of 2005, compared with the first six months of 2004.
Refining and Marketing (R&M)
Second-quarter financial results: R&M income from continuing
operations was $1,110 million, up from $700 million in the previous
quarter and $818 million in the second quarter of 2004. The increase
in second-quarter 2005 R&M earnings over the previous quarter was
primarily the result of higher U.S. refining market cracks driven by
higher gasoline and distillate demand, as well as increased
throughput. Although light-heavy crude differentials remain strong,
they decreased from high first-quarter levels. Worldwide marketing
margins and sales volumes also improved over the previous quarter. The
improved results from the second quarter of 2004 were due primarily to
increased worldwide refining margins and volumes, and increased U.S.
marketing margins, partially offset by higher turnaround and utility
costs.
Domestically, second-quarter 2005 realized refining margins
improved 11 percent over the first quarter, while the refineries ran
at 98 percent of crude oil capacity. Successful completion of
first-quarter turnaround activity benefited second-quarter throughputs
while unplanned downtime remained flat quarter-over-quarter.
Turnaround costs were 39 percent lower in the second quarter, compared
with the previous quarter. Marketing margins and volumes also
increased from the previous quarter primarily due to a return to
positive margins on the West Coast during the early part of the second
quarter.
Internationally, second-quarter 2005 marketing margins and sales
volumes improved over the previous quarter. While northwest Europe
refining market cracks were higher, the turnaround activity at the
Humber refinery during the second quarter did not allow the company to
fully benefit from the favorable market. As a result, international
crude oil capacity utilization was down 6 percent to 94 percent.
Overall, R&M's refinery crude oil capacity utilization rate
averaged 97 percent, compared with 92 percent in the previous quarter
and 93 percent in the second quarter of 2004. Before-tax turnaround
costs were $106 million, versus $108 million in the first quarter of
2005.
Six months financial results: R&M income from continuing
operations for the first six months of 2005 increased to $1,810
million, compared with $1,282 million in the first half of 2004. The
increased earnings were driven by higher worldwide refining margins,
partially offset by higher turnaround activity and utility costs.
LUKOIL Investment
Second-quarter financial results: Income from continuing
operations in the second quarter of 2005 was $148 million, up from
$110 million in the prior quarter. This represents ConocoPhillips'
estimate of the company's 11.9 percent weighted average equity share
of LUKOIL's income for the second quarter based on market indicators
and historical production trends for LUKOIL. The increase from the
prior quarter was attributable to higher realized price estimates and
an increased equity ownership position. At the end of the second
quarter of 2005, the company's equity ownership in LUKOIL was 12.6
percent.
ConocoPhillips' share of estimated BOE production was 223,000 per
day and its share of estimated daily refining crude oil throughput was
102,000 barrels per day.
Chemicals
Second-quarter financial results: The Chemicals segment, which
includes the company's 50 percent interest in Chevron Phillips
Chemical Company LLC (CPChem), reported income from continuing
operations of $63 million, compared with $133 million in the first
quarter of 2005 and $46 million in the second quarter of 2004. The
decrease from the first quarter was largely due to lower margins from
olefins and polyolefins, as well as lower margins and volumes from
aromatics and styrenics. In addition, second-quarter results were
impacted by higher utility costs due to higher natural gas prices. The
increase from the second quarter of 2004 reflects higher margins from
olefins and polyolefins, partially offset by lower margins and volumes
from aromatics and styrenics, as well as higher utility costs.
Six months financial results: During the first six months of 2005,
the Chemicals segment had income from continuing operations of $196
million, compared with $85 million for the same period a year ago. The
improvement was due primarily to higher margins in olefins and
polyolefins.
Emerging Businesses
The Emerging Businesses segment incurred a loss from continuing
operations of $8 million in the second quarter of 2005, compared with
losses of $8 million in the first quarter of 2005 and $29 million in
the second quarter of 2004. Improved international and domestic power
operations and the timing of certain expenses contributed to the
reduced operating losses compared with the second quarter of 2004.
Corporate and Other
Second-quarter after-tax Corporate expenses from continuing
operations were $179 million, compared with $184 million in the
previous quarter and $218 million in the second quarter of 2004. The
improvement from the first quarter was driven primarily by lower net
interest charges and lower benefit-related charges, partially offset
by reduced foreign exchange gains. The decrease in second-quarter net
interest charges was due primarily to lower average debt levels and an
early debt retirement premium paid during the first quarter. The
improvement from the second quarter of 2004 was primarily the result
of reduced net interest expense, partially offset by foreign exchange
losses.
Total debt at the end of the second quarter was $14.0 billion,
unchanged from the previous quarter and $1.0 billion below year-end
2004. At the end of the second quarter, the company's debt-to-capital
ratio was 22 percent, down from 23 percent at the end of the first
quarter.
The company's tax provision for the second quarter of 2005 was
$2.3 billion, resulting in an effective tax rate of 42 percent. This
is compared with 41 percent in the previous quarter and 42 percent in
the second quarter of 2004.
Discontinued Operations
Second-quarter financial results: Second-quarter 2005 earnings
from discontinued operations were $7 million, compared with an $11
million loss in the first quarter and income of $62 million in the
second quarter of 2004. The improvement from the first quarter is
related primarily to higher margins and the impacts of asset sales.
The decrease from the second quarter of 2004 is related primarily to
the impacts of asset sales.
Six months financial results: During the first six months of 2005,
discontinued operations had a loss of $4 million, compared with income
of $75 million for the same period a year ago. The decrease is
attributable primarily to the impacts of asset sales.
Outlook
Mr. Mulva concluded:
"Our operating performance, combined with above-average crude oil
and natural gas prices and strong refining margins, contributed to
strong earnings and cash flows.
"The company continues to grow its asset base through disciplined
capital spending. Compared with our peers, we are redeploying a higher
proportion of our cash flows into projects. These investments are made
possible due to our portfolio of attractive investment opportunities.
Some of these projects are in emerging areas that have high reserve
potential and the possibility to provide long-term value accretion for
our shareholders. One such example is the completion of our E&P joint
venture with LUKOIL in the Timan-Pechora region late in the second
quarter.
"We expect stronger oil and gas production in the second half of
2005, with full-year production to be approximately 3 percent higher
than that of 2004, excluding the impacts of LUKOIL.
"As announced earlier this month, we increased our ownership in
DEFS from 30.3 percent to 50 percent. This increase in our strategic
interest emphasizes our commitment, along with Duke Energy, to make
DEFS the industry's top performing U.S. midstream gas company.
"With respect to downstream, we expect a strong margin environment
and continued high utilization rates in the near term. Our focus is on
continuous improvement and execution of our five-year, $2 billion
clean fuels program. In addition, the five-year, $3 billion
incremental refining investment program that we announced in the first
quarter will result in expanded capacity, stronger processing
flexibility and higher clean product yields throughout our domestic
and international refining network."
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had
approximately 36,100 employees, $97 billion of assets, and $163
billion of annualized revenues as of June 30, 2005. For more
information, go to www.conocophillips.com.
ConocoPhillips' quarterly conference call is scheduled for 10:00
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 "Second-Quarter Earnings" link.
For financial and operational tables, go to
www.conocophillips.com/news/nr/earnings/highlights/2q05earnings.html
For detailed supplemental information, go to
www.conocophillips.com/news/nr/earnings/detail/2q05summary.xls
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This update contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements, such as "we expect
stronger oil and gas production in the second half of 2005, with full
year production to be approximately 3 percent higher than that of
2004, excluding the impacts of LUKOIL"; "with respect to downstream,
we expect a strong margin environment and continued high utilization
rates in the near term"; "our focus is on continuous improvement and
execution of our five-year, $2 billion clean fuels program"; and "the
five-year, $3 billion incremental refining investment program that we
announced in the first quarter will result in expanded capacity,
stronger processing flexibility and higher clean product yields
throughout our domestic and international refining network" 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 Road, Houston, Texas 77079. This information can also be
obtained from the SEC by calling 1-800-SEC-0330.
CONTACT: ConocoPhillips, Houston
Laura Hopkins, 281-293-6030 (media)
or
Gary Russell, 212-207-1996 (investors)
Exhibit 99.2
ConocoPhillips
Houston, Texas 77079
Preliminary
FINANCIAL HIGHLIGHTS
Millions of Dollars
---------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
----------------------- -----------------------
2005 2004 2005 2004
---------- ---------- --------- ---------
Revenues
Sales and other operating revenues* $ 41,808 31,528 79,439 61,341
Equity in earnings of affiliates 701 322 1,754 591
Other income 105 36 339 171
---------- ------ ------ ------
42,614 31,886 81,532 62,103
---------- ------ ------ ------
Costs and expenses
Purchased crude oil, natural gas and products 28,523 20,363 54,095 40,098
Production and operating expenses 2,147 1,840 4,099 3,505
Selling, general and administrative expenses 539 516 1,078 984
Exploration expenses 121 163 292 306
Depreciation, depletion and amortization 985 912 2,026 1,830
Property impairments 9 20 31 51
Taxes other than income taxes* 4,664 4,428 9,152 8,542
Accretion on discounted liabilities 41 41 89 77
Interest and debt expense 127 159 265 304
Foreign currency transaction losses (gains) 21 (33) 18 (49)
Minority interests 5 7 15 21
---------- ------ ------ ------
37,182 28,416 71,160 55,669
---------- ------ ------ ------
Income from continuing operations before income taxes 5,432 3,470 10,372 6,434
Provision for income taxes 2,301 1,457 4,318 2,818
---------- ------ ------ ------
Income from continuing operations 3,131 2,013 6,054 3,616
Income (loss) from discontinued operations 7 62 (4) 75
---------- ------ ------ ------
Net income $ 3,138 2,075 6,050 3,691
========== ====== ====== ======
Income per share of common stock (dollars)**
Basic
Continuing operations $ 2.24 1.46 4.33 2.63
Discontinued operations 0.01 0.04 -- 0.05
Net income $ 2.25 1.50 4.33 2.68
Diluted
Continuing operations $ 2.21 1.44 4.26 2.60
Discontinued operations -- 0.04 -- 0.05
Net income $ 2.21 1.48 4.26 2.65
Average common shares outstanding (in thousands)**
Basic 1,396,724 1,379,380 1,397,305 1,375,788
Diluted 1,419,288 1,398,022 1,420,022 1,393,528
*Includes excise, value added and other
similar taxes on petroleum products sales: $ 4,338 4,172 8,493 7,994
** Per-share amounts and average number of common shares outstanding in all periods
reflect a two-for-one stock split effected as a 100 percent stock dividend on June 1, 2005.
1
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
---------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
--------------------- -----------------
2005 2004 2005 2004
INCOME (LOSS) FROM CONTINUING OPERATIONS
E&P
United States $ 966 671 1,858 1,306
International 963 683 1,858 1,305
------- ----- ----- -----
Total E&P 1,929 1,354 3,716 2,611
------- ----- ----- -----
Midstream 68 42 453 97
------- ----- ----- -----
R&M
United States 936 734 1,506 1,137
International 174 84 304 145
------- ----- ----- -----
Total R&M 1,110 818 1,810 1,282
------- ----- ----- -----
LUKOIL Investment 148 -- 258 --
Chemicals 63 46 196 85
Emerging Businesses (8) (29) (16) (51)
Corporate and other (179) (218) (363) (408)
------- ----- ----- -----
Consolidated $ 3,131 2,013 6,054 3,616
======= ===== ===== =====
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Corporate and other 7 62 (4) 75
SUMMARY OF NET INCOME (LOSS)
E&P
United States $ 966 671 1,858 1,306
International 963 683 1,858 1,305
------- ----- ----- -----
Total E&P 1,929 1,354 3,716 2,611
------- ----- ----- -----
Midstream 68 42 453 97
------- ----- ----- -----
R&M
United States 936 734 1,506 1,137
International 174 84 304 145
------- ----- ----- -----
Total R&M 1,110 818 1,810 1,282
------- ----- ----- -----
LUKOIL Investment 148 -- 258 --
Chemicals 63 46 196 85
Emerging Businesses (8) (29) (16) (51)
Corporate and other (172) (156) (367) (333)
------- ----- ----- -----
Net income $ 3,138 2,075 6,050 3,691
======= ===== ===== =====
2
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended Six Months Ended
June 30 June 30
------------------ ------------------
2005 2004 2005 2004
------- ------ ----- ----
INCOME (LOSS) FROM CONTINUING
OPERATIONS
Effective tax rate % 42.4 % 42.0 41.6 43.8
Millions of Dollars
FOREIGN CURRENCY GAINS (LOSSES)
AFTER-TAX
E&P $ (8) 14 4 19
Midstream 7 -- 7 --
R&M (18) 5 (36) 6
LUKOIL Investment -- -- -- --
Chemicals -- -- -- --
Emerging Businesses -- 1 -- 1
Corporate and other (11) -- (4) 6
-------- ----- ----- -----
$ (30) 20 (29) 32
======== ===== ===== =====
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $ 3,131 2,013 6,054 3,616
Depreciation, depletion and amortization 985 912 2,026 1,830
Property impairments 9 20 31 51
Dry hole costs and leasehold impairment 47 105 156 192
Accretion on discounted liabilities 41 41 89 77
Deferred income taxes 369 310 492 670
Undistributed equity earnings (414) (97) (1,219) (278)
Net (gain) loss on asset dispositions (65) (6) (242) (88)
Other (113) 65 (191) 135
Working capital changes (1,224) (1,101) (336) (1,878)
-------- ----- ----- -----
Net cash provided by continuing operations 2,766 2,262 6,860 4,327
Net cash provided by discontinued operations 2 14 (3) 22
-------- ----- ----- -----
Net cash provided by operating activities $ 2,768 2,276 6,857 4,349
======== ===== ===== =====
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $ 576 308 898 614
International 1,761 931 2,645 1,835
-------- ----- ----- -----
2,337 1,239 3,543 2,449
Midstream -- 2 1 5
R&M 360 278 635 493
LUKOIL Investment 384 -- 708 --
Chemicals -- -- -- --
Emerging Businesses 7 27 3 55
Corporate and other* 37 38 57 63
-------- ----- ----- -----
$ 3,125 1,584 4,947 3,065
======== ===== ===== =====
*Excludes discontinued operations
OTHER
At June 30, 2005 At December 31, 2004
Total debt $ 14,013 15,002
Common stockholders' equity $ 47,300 42,723
3
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
2005 2004 2005 2004
---- ---- ---- ----
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 297 307 303 314
Lower 48 63 52 62 52
--- --- --- ---
360 359 365 366
Norway 195 212 201 213
United Kingdom 60 64 60 66
Canada 23 25 23 26
China 25 28 24 30
Indonesia 16 14 19 15
Vietnam 26 31 26 31
Timor Sea 21 15 29 10
Other 54 61 54 61
--- --- --- ---
Total consolidated 780 809 801 818
Equity affiliates 123 104 122 109
--- --- --- ---
Total Worldwide 903 913 923 927
=== === === ===
Syncrude 21 20 18 22
=== === === ===
Natural gas liquids produced
United States
Alaska* 16 23 20 25
Lower 48 31 26 29 25
--- --- --- ---
47 49 49 50
Norway 9 8 9 8
Canada 10 10 10 10
Timor Sea 9 4 13 2
Other 5 8 6 8
--- --- --- ---
Total Worldwide 80 79 87 78
=== === === ===
*Includes reinjected volumes sold lease-to-lease 1 15 7 15
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 148 147 166 166
Lower 48 1,195 1,226 1,182 1,229
----- ----- ----- -----
1,343 1,373 1,348 1,395
Norway 268 303 283 312
United Kingdom 741 821 782 850
Canada 422 437 420 432
Timor Sea 35 32 35 36
Indonesia 287 237 280 243
Vietnam 14 15 16 16
Other 81 81 78 73
----- ----- ----- -----
Total consolidated 3,191 3,299 3,242 3,357
Equity affiliates 7 4 7 6
----- ----- ----- -----
Total Worldwide 3,198 3,303 3,249 3,363
===== ===== ===== =====
*Represents quantities available for sale
Excludes gas equivalent of NGL shown above
Liquefied natural gas sales 96 82 114 100
LUKOIL Investment
Production (MBOE/D)* 223 -- 213 --
Refinery crude oil throughput (MB/D)* 102 -- 97 --
*Represents our estimated net share of LUKOIL
4
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Six Months Ended
June 30 June 30
--------------------- ---------------------
2005 2004 2005 2004
---- ---- ---- ----
E&P
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $ 49.22 36.53 46.55 34.68
Lower 48 43.58 34.39 42.45 33.11
Total U.S. 48.21 36.22 45.86 34.45
International 49.41 34.58 47.68 33.02
Total consolidated 48.88 35.32 46.85 33.68
Equity affiliates 36.11 25.48 33.59 22.17
Total Worldwide 46.93 34.17 45.04 32.27
Natural gas-lease (per MCF)
United States
Alaska 2.49 2.31 2.72 2.43
Lower 48 6.20 5.49 5.93 5.25
Total U.S. 6.07 5.35 5.83 5.11
International 5.16 3.81 5.10 3.96
Total consolidated 5.53 4.43 5.38 4.42
Equity affiliates 0.32 0.31 0.30 3.14
Total Worldwide 5.52 4.43 5.38 4.42
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 21 24 22 38
International 44 33 48 40
Equity affiliates
United States* 112 112 111 111
International 6 5 6 6
------ ----- ---- ---
183 174 187 195
====== ===== ==== ===
*Represents 30.3 percent interest in Duke Energy Field Services LLC (DEFS).
Per Barrel
U.S. product prices
Weighted average NGL**
Consolidated $ 32.49 26.42 32.22 26.05
DEFS 31.33 25.61 30.97 25.21
**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.
5
ConocoPhillips
Houston, Texas 77079
Three Months Ended Six Months Ended
June 30 June 30
------------------------- -----------------------
2005 2004 2005 2004
-------- ------- ------- ------
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,182 2,168 2,178 2,168
Crude oil runs 2,133 2,119 2,046 2,112
Refinery production 2,349 2,300 2,247 2,273
International*
Crude oil capacity 428 447 428 447
Crude oil runs 402 309 415 359
Refinery production 410 318 427 364
U.S. Petroleum products outside sales
Automotive Gasoline 1,426 1,328 1,364 1,321
Distillates 680 538 662 554
Aviation fuels 214 191 206 185
Other products 566 573 514 545
------ ----- ------ -----
2,886 2,630 2,746 2,605
International 477 440 486 472
------ ----- ------ -----
3,363 3,070 3,232 3,077
====== ===== ====== =====
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $ 1.67 1.40 1.56 1.28
Automotive gasoline-retail 1.85 1.61 1.70 1.47
Distillates-wholesale 1.66 1.17 1.57 1.09
*Includes ConocoPhillips' share of equity affiliates except LUKOIL.
**Excludes excise taxes.
6
Exhibit 99.3
[LOGO CONOCOPHILLIPS]
SUMMARY OF NET INCOME (LOSS) BY SEGMENT
Millions of Dollars
----------------------------------------------------------------------------------
2004 2005
----------------------------------------- ---------------------------------------
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 635 671 701 935 2,942 892 966 1,858
International E&P 622 683 719 736 2,760 895 963 1,858
-------------------------------------------------------------------------- ---------------------------------------
Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 3,716
-------------------------------------------------------------------------- ---------------------------------------
Midstream 55 42 38 100 235 385 68 453
-------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 403 734 505 484 2,126 570 936 1,506
International R&M 61 84 203 269 617 130 174 304
-------------------------------------------------------------------------- ---------------------------------------
Total R&M 464 818 708 753 2,743 700 1,110 1,810
-------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 110 148 258
Chemicals 39 46 81 83 249 133 63 196
Emerging Businesses (22) (29) (27) (24) (102) (8) (8) (16)
Corporate and Other (190) (218) (209) (177) (794) (184) (179) (363)
-------------------------------------------------------------------------- ---------------------------------------
Consolidated 1,603 2,013 2,011 2,480 8,107 2,923 3,131 6,054
========================================================================== =======================================
Cumulative Effect of Accounting Changes
U.S. E&P - - - - - - - -
International E&P - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total E&P - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Midstream - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
U.S. R&M - - - - - - - -
International R&M - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total R&M - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - - - - - -
Chemicals - - - - - - - -
Emerging Businesses - - - - - - - -
Corporate and Other - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Consolidated - - - - - - - -
========================================================================== =======================================
Income (Loss) from Discontinued Operations
Corporate and Other 13 62 (5) (48) 22 (11) 7 (4)
========================================================================== =======================================
Net Income (Loss)
U.S. E&P 635 671 701 935 2,942 892 966 1,858
International E&P 622 683 719 736 2,760 895 963 1,858
-------------------------------------------------------------------------- ---------------------------------------
Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 3,716
-------------------------------------------------------------------------- ---------------------------------------
Midstream 55 42 38 100 235 385 68 453
-------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 403 734 505 484 2,126 570 936 1,506
International R&M 61 84 203 269 617 130 174 304
-------------------------------------------------------------------------- ---------------------------------------
Total R&M 464 818 708 753 2,743 700 1,110 1,810
-------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 110 148 258
Chemicals 39 46 81 83 249 133 63 196
Emerging Businesses (22) (29) (27) (24) (102) (8) (8) (16)
Corporate and Other (177) (156) (214) (225) (772) (195) (172) (367)
-------------------------------------------------------------------------- ---------------------------------------
-------------------------------------------------------------------------- ---------------------------------------
Consolidated 1,616 2,075 2,006 2,432 8,129 2,912 3,138 6,050
========================================================================== =======================================
Page 1 of 11
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
Millions of Dollars
----------------------------------------------------------------------------------
2004 2005
----------------------------------------- ---------------------------------------
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 987 1,049 1,057 1,433 4,526 1,388 1,504 2,892
International E&P 1,410 1,360 1,654 1,684 6,108 2,020 2,152 4,172
-------------------------------------------------------------------------- ---------------------------------------
Total E&P 2,397 2,409 2,711 3,117 10,634 3,408 3,656 7,064
-------------------------------------------------------------------------- ---------------------------------------
Midstream 86 66 62 158 372 449 107 556
-------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 636 1,149 803 772 3,360 901 1,485 2,386
International R&M 79 111 268 356 814 160 203 363
-------------------------------------------------------------------------- ---------------------------------------
Total R&M 715 1,260 1,071 1,128 4,174 1,061 1,688 2,749
-------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 115 153 268
Chemicals 49 56 99 109 313 187 84 271
Emerging Businesses (34) (42) (44) (34) (154) (13) (13) (26)
Corporate and Other (249) (279) (239) (277) (1,044) (267) (243) (510)
-------------------------------------------------------------------------- ---------------------------------------
Consolidated 2,964 3,470 3,660 4,275 14,369 4,940 5,432 10,372
========================================================================== =======================================
Income from Continuing Operations
Effective Tax Rates
U.S. E&P 35.7% 36.0% 33.7% 34.8% 35.0% 35.7% 35.8% 35.8%
International E&P 55.9% 49.8% 56.5% 56.3% 54.8% 55.7% 55.3% 55.5%
-------------------------------------------------------------------------- ---------------------------------------
Total E&P 47.6% 43.8% 47.6% 46.4% 46.4% 47.6% 47.2% 47.4%
-------------------------------------------------------------------------- ---------------------------------------
Midstream 36.0% 36.4% 38.7% 36.7% 36.8% 14.3% 36.4% 18.5%
-------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 36.6% 36.1% 37.1% 37.3% 36.7% 36.7% 37.0% 36.9%
International R&M 22.8% 24.3% 24.3% 24.4% 24.2% 18.8% 14.3% 16.3%
-------------------------------------------------------------------------- ---------------------------------------
Total R&M 35.1% 35.1% 33.9% 33.2% 34.3% 34.0% 34.2% 34.2%
-------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment n/a n/a n/a 0.0% 0.0% 4.3% 3.3% 3.7%
Chemicals 20.4% 17.9% 18.2% 23.9% 20.4% 28.9% 25.0% 27.7%
Emerging Businesses 35.3% 31.0% 38.6% 29.4% 33.8% 38.5% 38.5% 38.5%
Corporate and Other 23.7% 21.9% 12.6% 36.1% 23.9% 31.1% 26.3% 28.8%
-------------------------------------------------------------------------- ---------------------------------------
Consolidated 45.9% 42.0% 45.1% 42.0% 43.6% 40.8% 42.4% 41.6%
========================================================================== =======================================
Page 2 of 11
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX)
Millions of Dollars
----------------------------------------------------------------------------------
2004 2005
----------------------------------------- ---------------------------------------
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 - - - - - 90 - 90
Property impairments (3) - - (9) (12) - - -
Tax credit utilization - - 22 28 50 - - -
Insurance premium adjustment - - - (17) (17) - (5) (5)
Pending claims and settlements - - - - - - 15 15
-------------------------------------------------------------------------- ---------------------------------------
Total (3) - 22 2 21 90 10 100
-------------------------------------------------------------------------- ---------------------------------------
International E&P
Gain (loss) on asset sales 56 (13) - - 43 - 15 15
Property impairments - - (1) (29) (30) - - -
Insurance premium adjustment - - - (17) (17) - (10) (10)
Canada tax law change - 31 - 41 72 - - -
Pending claims and settlements - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total 56 18 (1) (5) 68 - 5 5
-------------------------------------------------------------------------- ---------------------------------------
Total E&P 53 18 21 (3) 89 90 15 105
-------------------------------------------------------------------------- ---------------------------------------
Midstream
Property impairments (12) (10) - - (22) (6) (7) (13)
DEFS' sale of TEPPCO general
partnership - - - - - 306 - 306
-------------------------------------------------------------------------- ---------------------------------------
Total (12) (10) - - (22) 300 (7) 293
-------------------------------------------------------------------------- ---------------------------------------
U.S. R&M
Gain (loss) on asset sales - - - - - 31 - 31
Property impairments (5) - (6) (28) (39) - - -
Insurance premium adjustment - - - (6) (6) - (7) (7)
Pending claims and settlements - - (34) - (34) - - -
-------------------------------------------------------------------------- ---------------------------------------
Total (5) - (40) (34) (79) 31 (7) 24
-------------------------------------------------------------------------- ---------------------------------------
International R&M
Gain (loss) on asset sales - - - - - - 25 25
Property impairments - - - - - - - -
Other - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total - - - - - - 25 25
-------------------------------------------------------------------------- ---------------------------------------
Total R&M (5) - (40) (34) (79) 31 18 49
-------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment
- - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Chemicals
- - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Emerging Businesses
- - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Corporate and Other
Property impairments - - - - - - - -
Merger-related expenses (14) - - - (14) - - -
Premium on early debt retirement - - (43) - (43) (8) - (8)
Other - - - - - - - -
-------------------------------------------------------------------------- ---------------------------------------
Total (14) - (43) - (57) (8) - (8)
-------------------------------------------------------------------------- ---------------------------------------
Total Company 22 8 (62) (37) (69) 413 26 439
========================================================================== =======================================
Page 3 of 11
CASH FLOW INFORMATION
Millions of Dollars
----------------------------------------------------------------------------------
2004 2005
---------------------------------------- ---------------------------------------
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 1,603 2,013 2,011 2,480 8,107 2,923 3,131 6,054
DD&A and property impairments 949 932 950 1,131 3,962 1,063 994 2,057
Dry hole costs and leasehold impairments 87 105 150 75 417 109 47 156
Accretion on discounted liabilities 36 41 49 45 171 48 41 89
Deferred income taxes 360 310 328 27 1,025 123 369 492
Undistributed equity earnings (181) (97) (263) (236) (777) (805) (414) (1,219)
Net (gain) loss on asset dispositions (82) (6) 6 (34) (116) (177) (65) (242)
Other 70 65 (30) (295) (190) (78) (113) (191)
Net working capital changes (777) (1,101) 1,267 10 (601) 888 (1,224) (336)
Discontinued operations 8 14 (55) (6) (39) (5) 2 (3)
------------------------------------------------------------------------------------- ---------------------------------------
Net Cash Provided by
Operating Activities 2,073 2,276 4,413 3,197 11,959 4,089 2,768 6,857
------------------------------------------------------------------------------------- ---------------------------------------
Cash Flows from Investing Activities
Capital expenditures and investments:
E&P (1,210) (1,239) (1,248) (1,552) (5,249) (1,206) (2,337) (3,543)
Midstream (3) (2) (1) (1) (7) (1) - (1)
R&M (215) (278) (277) (574) (1,344) (275) (360) (635)
LUKOIL Investment - - - (2,649) (2,649) (324) (384) (708)
Chemicals - - - - - - - -
Emerging Businesses (28) (27) (19) (1) (75) 4 (7) (3)
Corporate and Other (25) (38) (49) (60) (172) (20) (37) (57)
------------------------------------------------------------------------------------- ---------------------------------------
Total capital expend. & investments (1,481) (1,584) (1,594) (4,837) (9,496) (1,822) (3,125) (4,947)
Acquisitions - adoption &
application of FIN 46 - - 11 - 11 - - -
Proceeds from asset dispositions 449 905 73 164 1,591 87 221 308
Long-term advances to/collections from
affiliates and other investments (44) 9 30 112 107 25 4 29
Discontinued operations (1) (1) - 1 (1) - - -
------------------------------------------------------------------------------------- ---------------------------------------
Net Cash Used for Investing Activities (1,077) (671) (1,480) (4,560) (7,788) (1,710) (2,900) (4,610)
------------------------------------------------------------------------------------- ---------------------------------------
Cash Flows from Financing Activities
Net issuance (repayment) of debt (722) (1,361) (221) (471) (2,775) (986) (13) (999)
Issuance of stock 112 95 62 161 430 155 108 263
Repurchase of stock - - - - - (194) (382) (576)
Dividends (294) (296) (296) (346) (1,232) (348) (432) (780)
Other 89 94 (66) 61 178 64 33 97
------------------------------------------------------------------------------------- ---------------------------------------
Net Cash Provided by (Used for)
Financing Activities (815) (1,468) (521) (595) (3,399) (1,309) (686) (1,995)
------------------------------------------------------------------------------------- ---------------------------------------
Effect of Exchange Rate Changes (12) 8 47 82 125 (36) (62) (98)
------------------------------------------------------------------------------------- ---------------------------------------
Net Change in Cash
and Cash Equivalents 169 145 2,459 (1,876) 897 1,034 (880) 154
Cash and cash equivalents
at beginning of period 490 659 804 3,263 490 1,387 2,421 1,387
------------------------------------------------------------------------------------- ---------------------------------------
Cash and Cash Equivalents
at End of Period 659 804 3,263 1,387 1,387 2,421 1,541 1,541
===================================================================================== =======================================
Page 4 of 11
TOTAL E&P
2004 2005
----------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ---------------------------------------
E&P Net Income ($ Millions) 1,257 1,354 1,420 1,671 5,702 1,787 1,929 3,716
========================================================================== =======================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 1,611 1,563 1,484 1,596 1,563 1,600 1,537 1,570
-------------------------------------------------------------------------- ---------------------------------------
E&P segment plus LUKOIL
Investment Segment: 1,611 1,563 1,484 1,755 1,603 1,801 1,760 1,783
-------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated 828 809 733 821 797 822 780 801
Equity affiliates 113 104 111 103 108 120 123 122
-------------------------------------------------------------------------- ---------------------------------------
Total 941 913 844 924 905 942 903 923
========================================================================== =======================================
Sales of crude oil produced (MB/D) 927 888 875 903 898 940 932 936
-------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D) 76 79 87 92 84 94 80 87
-------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 3,415 3,299 3,179 3,356 3,312 3,295 3,191 3,242
Equity affiliates 9 4 4 4 5 5 7 7
-------------------------------------------------------------------------- ---------------------------------------
Total 3,424 3,303 3,183 3,360 3,317 3,300 3,198 3,249
========================================================================== =======================================
Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 18
-------------------------------------------------------------------------- ---------------------------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 35.23 38.31 43.86 48.29 41.42 49.70 53.03 51.37
Brent dated 31.95 35.36 41.54 44.00 38.21 47.50 51.59 49.55
Natural Gas--Henry
Hub 1st of month ($/MCF) 5.69 6.00 5.75 7.07 6.13 6.27 6.74 6.51
-------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated 32.08 35.32 40.41 42.79 37.65 44.89 48.88 46.85
Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 33.59
Total 30.44 34.17 38.78 40.96 36.06 43.15 46.93 45.04
-------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl) 25.43 26.71 30.73 35.37 30.02 33.44 35.10 34.26
-------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated 4.41 4.43 4.48 5.13 4.62 5.24 5.53 5.38
Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.30
Total 4.41 4.43 4.48 5.13 4.61 5.24 5.52 5.38
-------------------------------------------------------------------------- ---------------------------------------
Exploration Charges ($ Millions)
Dry Holes 67 42 82 51 242 88 30 118
Lease Impairments 20 63 68 24 175 20 18 38
-------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 87 105 150 75 417 108 48 156
Other (G&G and Lease Rentals) 56 58 55 117 286 63 73 136
-------------------------------------------------------------------------- ---------------------------------------
Total Exploration Charges 143 163 205 192 703 171 121 292
========================================================================== =======================================
Depreciation, Depletion and
Amortization (DD&A) ($ Millions) 704 720 711 783 2,918 819 755 1,574
-------------------------------------------------------------------------- ---------------------------------------
Page 5 of 11
U.S. E&P
2004 2005
----------------------------------------- ----------------------------------------
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) 635 671 701 935 2,942 892 966 1,858
================================================================================== ========================================
Alaska ($ Millions) 403 397 451 581 1,832 532 572 1,104
---------------------------------------------------------------------------------- ----------------------------------------
Lower 48 ($ Millions) 232 274 250 354 1,110 360 394 754
---------------------------------------------------------------------------------- ----------------------------------------
Production
Total U.S. (MBOE/D) 659 637 579 642 629 648 631 639
---------------------------------------------------------------------------------- ----------------------------------------
Crude Oil and Condensate (MB/D)
Alaska 320 307 253 313 298 309 297 303
Lower 48 53 52 50 50 51 62 63 62
---------------------------------------------------------------------------------- ----------------------------------------
Total 373 359 303 363 349 371 360 365
================================================================================== ========================================
Sales of crude oil produced (MB/D) 373 354 312 356 349 386 352 369
---------------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids (MB/D)*
Alaska 26 23 19 24 23 24 16 20
Lower 48 24 26 26 26 26 27 31 29
---------------------------------------------------------------------------------- ----------------------------------------
Total 50 49 45 50 49 51 47 49
================================================================================== ========================================
*Includes reinjection volumes
sold lease-to-lease: 16 15 10 14 14 13 1 7
---------------------------------------------------------------------------------- ----------------------------------------
Natural Gas (MMCF/D)
Alaska 185 147 164 163 165 185 148 166
Lower 48 1,233 1,226 1,220 1,214 1,223 1,169 1,195 1,182
---------------------------------------------------------------------------------- ----------------------------------------
Total 1,418 1,373 1,384 1,377 1,388 1,354 1,343 1,348
================================================================================== ========================================
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Alaska
North Slope 28.00 31.69 35.66 39.53 33.61 38.93 43.92 41.30
---------------------------------------------------------------------------------- ----------------------------------------
West Coast 32.93 36.53 40.48 44.37 38.47 44.15 49.22 46.55
---------------------------------------------------------------------------------- ----------------------------------------
Lower 48 31.86 34.39 39.56 42.30 36.95 41.29 43.58 42.45
---------------------------------------------------------------------------------- ----------------------------------------
Total U.S. 32.78 36.22 40.33 44.08 38.25 43.69 48.21 45.86
---------------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids ($/bbl)
Alaska 32.93 36.38 40.52 43.78 38.64 44.33 49.20 47.24
---------------------------------------------------------------------------------- ----------------------------------------
Lower 48 24.19 25.82 29.40 32.80 28.14 30.96 31.22 31.10
---------------------------------------------------------------------------------- ----------------------------------------
Total U.S. 26.80 28.38 32.22 36.21 31.05 34.68 37.26 36.11
---------------------------------------------------------------------------------- ----------------------------------------
Natural Gas ($/mcf)
Alaska 2.54 2.31 2.22 2.23 2.35 2.96 2.49 2.72
---------------------------------------------------------------------------------- ----------------------------------------
Lower 48 5.00 5.49 5.29 6.04 5.46 5.66 6.20 5.93
---------------------------------------------------------------------------------- ----------------------------------------
Total U.S. 4.88 5.35 5.19 5.92 5.33 5.57 6.07 5.83
---------------------------------------------------------------------------------- ----------------------------------------
Kenai, Alaska LNG Sales
Volume (MMCF/D) 118 82 115 107 105 132 96 114
---------------------------------------------------------------------------------- ----------------------------------------
Sales price per MCF 4.51 4.80 5.06 5.25 4.90 5.27 5.24 5.26
---------------------------------------------------------------------------------- ----------------------------------------
U.S. Exploration Charges ($ Millions)
Dry Holes 32 32 (5) - 59 74 8 82
Lease Impairments 11 11 10 10 42 10 9 19
---------------------------------------------------------------------------------- ----------------------------------------
Total Non-Cash Charges 43 43 5 10 101 84 17 101
Other (G&G and Lease Rentals) 15 19 15 37 86 12 17 29
---------------------------------------------------------------------------------- ----------------------------------------
Total U.S. Exploration Charges 58 62 20 47 187 96 34 130
================================================================================== ========================================
Alaska Only 17 43 7 14 81 85 13 98
---------------------------------------------------------------------------------- ----------------------------------------
DD&A ($ Millions)
Alaska 119 125 122 144 510 133 134 267
Lower 48 146 145 157 150 598 219 172 391
---------------------------------------------------------------------------------- ----------------------------------------
Total U.S. 265 270 279 294 1,108 352 306 658
================================================================================== ========================================
Page 6 of 11
INTERNATIONAL E&P
2004 2005
----------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ---------------------------------------
International E&P
Net Income ($ Millions) 622 683 719 736 2,760 895 963 1,858
========================================================================== =======================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 952 926 905 954 934 952 906 931
-------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated
Norway 215 212 189 211 207 207 195 201
United Kingdom 67 64 59 66 64 61 60 60
Canada 27 25 24 24 25 23 23 23
China 32 28 25 17 25 22 25 24
Indonesia 15 14 14 18 15 21 16 19
Vietnam 31 31 35 33 33 27 26 26
Timor Sea 5 15 29 34 21 36 21 29
Other 63 61 55 55 58 54 54 54
Equity affiliates 113 104 111 103 108 120 123 122
-------------------------------------------------------------------------- ---------------------------------------
Total 568 554 541 561 556 571 543 558
========================================================================== =======================================
Sales of crude oil produced (MB/D) 554 534 563 547 549 554 580 567
-------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D)
Norway 9 8 8 9 8 10 9 9
Canada 10 10 10 11 10 10 10 10
Timor Sea - 4 14 16 9 17 9 13
Other 7 8 10 6 8 6 5 6
-------------------------------------------------------------------------- ---------------------------------------
Total 26 30 42 42 35 43 33 38
========================================================================== =======================================
Natural Gas (MMCF/D)
Consolidated
Norway 319 303 274 306 301 298 268 283
United Kingdom 879 821 720 852 818 824 741 782
Canada 428 437 425 442 433 417 422 420
Timor Sea 40 32 35 35 35 35 35 35
Indonesia 248 237 248 266 250 273 287 280
Vietnam 17 15 15 19 16 18 14 16
Other 66 81 78 59 71 76 81 78
Equity affiliates 9 4 4 4 5 5 7 7
-------------------------------------------------------------------------- ---------------------------------------
Total 2,006 1,930 1,799 1,983 1,929 1,946 1,855 1,901
========================================================================== =======================================
Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 18
-------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
Norway 32.13 34.72 40.70 41.82 37.55 45.52 50.21 48.14
United Kingdom 31.27 34.19 39.57 44.79 37.00 49.47 48.02 48.96
Canada 28.95 30.58 36.16 38.44 32.92 36.96 41.09 39.02
China 29.91 33.02 37.99 32.87 33.31 41.51 46.95 44.74
Indonesia 32.21 36.20 42.71 45.43 39.21 46.51 47.57 46.94
Vietnam 31.76 36.42 41.36 42.94 38.31 47.77 53.32 50.46
Timor Sea 35.49 37.32 46.65 45.95 43.91 47.99 50.90 49.17
Other 30.89 34.87 39.54 39.28 36.05 44.56 50.11 47.52
Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 33.59
Total 28.86 32.81 37.92 38.93 34.67 42.77 46.16 44.51
-------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl)
Norway 24.34 24.22 27.79 37.64 28.92 30.63 28.20 29.44
Canada 26.38 28.58 31.15 36.61 30.77 37.37 37.66 37.51
Timor Sea - 29.13 33.96 37.11 34.94 34.40 35.99 34.92
Other 18.43 18.03 22.76 19.64 19.99 21.34 22.30 21.79
Total 23.53 24.69 29.53 34.59 28.96 32.35 32.03 32.21
-------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated
Norway 4.37 3.99 4.12 4.45 4.24 5.03 5.30 5.16
United Kingdom 4.04 3.47 3.79 4.76 4.03 5.54 5.01 5.29
Canada 4.88 5.01 4.64 5.43 5.00 5.33 6.14 5.74
Timor Sea 0.43 0.45 0.46 0.49 0.46 0.52 0.52 0.52
Indonesia 4.38 4.28 5.02 4.74 4.61 5.08 5.96 5.53
Vietnam 1.10 0.99 1.01 1.05 1.04 1.04 1.04 1.04
Other 0.66 0.59 0.62 0.97 0.69 0.70 0.59 0.64
Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.30
Total 4.11 3.81 3.98 4.63 4.14 5.03 5.15 5.09
-------------------------------------------------------------------------- ---------------------------------------
International Exploration Charges ($ Millions)
Dry Holes 35 10 87 51 183 14 22 36
Lease Impairments 9 52 58 14 133 10 9 19
-------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 44 62 145 65 316 24 31 55
Other (G&G and Lease Rentals) 41 39 40 80 200 51 56 107
-------------------------------------------------------------------------- ---------------------------------------
Total International Exploration
Charges 85 101 185 145 516 75 87 162
========================================================================== =======================================
DD&A ($ Millions) 439 450 432 489 1,810 467 449 916
-------------------------------------------------------------------------- ---------------------------------------
Page 7 of 11
R&M
2004 2005
----------------------------------------- ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ----------------------------------------
R&M Net Income ($ Millions) 464 818 708 753 2,743 700 1,110 1,810
===================================================================================== ========================================
United States ($ Millions) 403 734 505 484 2,126 570 936 1,506
------------------------------------------------------------------------------------- ----------------------------------------
International ($ Millions) 61 84 203 269 617 130 174 304
------------------------------------------------------------------------------------- ----------------------------------------
Market Indicators
U.S. East Coast Crack Spread ($/bbl) 6.87 9.14 7.00 5.73 7.19 6.40 8.80 7.60
U.S. Gulf Coast Crack Spread ($/bbl) 6.36 9.17 6.33 4.09 6.49 6.37 9.63 8.00
U.S. Group Central Crack Spread ($/bbl) 6.91 11.65 8.09 5.52 8.04 7.92 11.51 9.72
U.S. West Coast Crack Spread ($/bbl) 16.10 24.13 17.92 17.25 18.85 19.61 22.20 20.90
U.S. Weighted 3:2:1 Crack Spread ($/bbl) 8.39 12.60 9.10 7.24 9.33 9.24 12.35 10.80
NW Europe Crack Spread ($/bbl) 7.78 10.43 11.76 15.24 11.30 11.14 15.09 13.12
Singapore 3:2:1 Crack Spread ($/bbl) 10.33 9.48 13.11 17.22 12.54 13.23 13.95 13.59
U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.69 1.83 1.50 1.97 1.50 0.16 2.20 1.18
------------------------------------------------------------------------------------- ----------------------------------------
Realized Margins
Refining Margin ($/bbl)
U.S. 7.12 9.88 8.84 8.38 8.56 10.11 11.23 10.70
International* 4.51 6.57 8.36 10.03 7.56 8.26 8.79 8.52
------------------------------------------------------------------------------------- ----------------------------------------
Marketing Margin ($/bbl)
U.S. 1.08 1.49 1.15 1.85 1.39 0.46 2.01 1.23
International 6.50 8.20 7.69 8.13 7.66 5.61 8.56 7.14
------------------------------------------------------------------------------------- ----------------------------------------
* 2004 and first-quarter 2005 amounts restated to include equity affiliates.
DD&A ($ Millions) 186 172 202 212 772 194 197 391
------------------------------------------------------------------------------------- ----------------------------------------
Turnaround Expense ($ Millions) 59 78 57 73 267 108 106 214
------------------------------------------------------------------------------------- ----------------------------------------
Eastern U.S.
Crude Oil Charge Input (MB/D) 413 375 368 346 375 403 414 408
Total Charge Input (MB/D) 440 421 415 407 421 449 454 452
Crude Oil Capacity Utilization (%) 96% 87% 87% 82% 88% 95% 98% 97%
Clean Product Yield (%) 87% 84% 87% 90% 87% 92% 88% 90%
------------------------------------------------------------------------------------- ----------------------------------------
U.S. Gulf Coast
Crude Oil Charge Input (MB/D) 699 709 617 689 678 659 715 688
Total Charge Input (MB/D) 774 789 717 779 765 733 835 783
Crude Oil Capacity Utilization (%) 97% 99% 88% 98% 96% 92% 100% 96%
Clean Product Yield (%) 79% 75% 78% 82% 78% 73% 79% 76%
------------------------------------------------------------------------------------- ----------------------------------------
Central U.S.
Crude Oil Charge Input (MB/D) 601 638 634 583 614 538 594 566
Total Charge Input (MB/D) 636 673 669 614 648 577 625 601
Crude Oil Capacity Utilization (%) 96% 102% 99% 91% 97% 84% 93% 89%
Clean Product Yield (%) 83% 83% 85% 84% 84% 86% 84% 85%
------------------------------------------------------------------------------------- ----------------------------------------
Western U.S.
Crude Oil Charge Input (MB/D) 392 397 392 387 392 357 410 384
Total Charge Input (MB/D) 409 419 409 409 412 382 431 407
Crude Oil Capacity Utilization (%) 100% 101% 99% 98% 99% 90% 101% 96%
Clean Product Yield (%) 81% 81% 82% 83% 82% 80% 82% 81%
------------------------------------------------------------------------------------- ----------------------------------------
TOTAL UNITED STATES
Crude Oil Charge Input (MB/D) 2,105 2,119 2,011 2,005 2,059 1,957 2,133 2,046
Total Charge Input (MB/D) 2,259 2,302 2,210 2,209 2,246 2,141 2,345 2,243
Crude Oil Capacity Utilization (%) 97% 98% 93% 93% 95% 90% 98% 94%
Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 83% 82%
------------------------------------------------------------------------------------- ----------------------------------------
Refined Products Production (MB/D)
Gasoline 1,059 1,043 1,060 1,072 1,059 968 1,071 1,019
Distillates 604 591 574 619 597 599 655 627
Aviation Fuel 167 177 164 158 167 166 174 170
Other 415 489 400 383 422 414 449 431
------------------------------------------------------------------------------------- ----------------------------------------
Total 2,245 2,300 2,198 2,232 2,245 2,147 2,349 2,247
===================================================================================== ========================================
Petroleum Products Sales (MB/D)
Gasoline 1,315 1,328 1,366 1,415 1,356 1,302 1,426 1,364
Distillates 570 538 544 562 553 642 680 662
Aviation Fuel 178 191 200 195 191 198 214 206
Other 517 573 553 613 564 461 566 514
------------------------------------------------------------------------------------- ----------------------------------------
Total 2,580 2,630 2,663 2,785 2,664 2,603 2,886 2,746
===================================================================================== ========================================
Page 8 of 11
R&M (continued)
2004 2005
--------------------------------------- --------------------------------------
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) 289 197 291 298 269 294 259 277
Total Charge Input (MB/D) 299 216 300 308 280 307 266 286
Crude Oil Capacity Utilization (%) 94% 64% 100% 102% 90% 101% 89% 95%
Clean Product Yield (%) 84% 81% 83% 81% 82% 79% 76% 78%
- ---------------------------------------------------------------------------------------- --------------------------------------
International - Equity Affiliates - Net Share*
Crude Oil Charge Input (MB/D) 120 112 134 140 127 134 143 138
Total Charge Input (MB/D) 121 113 138 145 130 137 147 142
Crude Oil Capacity Utilization (%) 87% 81% 99% 103% 92% 98% 105% 102%
Clean Product Yield (%) 82% 83% 81% 81% 82% 83% 82% 82%
----------------------------------------------------------------------------------------- --------------------------------------
TOTAL INTERNATIONAL
Crude Oil Charge Input (MB/D) 409 309 425 438 396 428 402 415
Total Charge Input (MB/D) 420 329 438 453 410 444 413 428
Crude Oil Capacity Utilization (%) 92% 69% 99% 102% 91% 100% 94% 97%
Clean Product Yield (%) 84% 82% 82% 81% 82% 80% 78% 79%
----------------------------------------------------------------------------------------- --------------------------------------
Refined Products Production (MB/D)
Gasoline 124 109 138 144 129 141 115 128
Distillates 181 136 190 190 174 186 178 182
Aviation Fuel 24 16 22 25 22 21 21 21
Other 81 57 89 94 80 95 96 96
----------------------------------------------------------------------------------------- --------------------------------------
Total 410 318 439 453 405 443 410 427
========================================================================================= ======================================
Petroleum Products Sales (MB/D)
Gasoline 185 180 173 180 180 185 176 181
Distillates 228 184 207 222 210 221 212 217
Aviation Fuel 6 9 10 8 8 7 10 8
Other 82 67 82 83 79 82 79 80
----------------------------------------------------------------------------------------- --------------------------------------
Total 501 440 472 493 477 495 477 486
========================================================================================= ======================================
Worldwide - Including Net Share of Equity Affiliates
Crude Oil Charge Input (MB/D) 2,514 2,428 2,436 2,443 2,455 2,385 2,535 2,461
Total Charge Input (MB/D) 2,679 2,631 2,648 2,662 2,656 2,585 2,758 2,671
Crude Oil Capacity Utilization (%) 96% 93% 94% 94% 94% 92% 97% 94%
Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 82% 82%
----------------------------------------------------------------------------------------- --------------------------------------
Refined Products Production (MB/D)
Gasoline 1,183 1,152 1,198 1,216 1,188 1,109 1,186 1,147
Distillates 785 727 764 809 771 785 833 809
Aviation Fuel 191 193 186 183 189 187 195 191
Other 496 546 489 477 502 509 545 527
----------------------------------------------------------------------------------------- --------------------------------------
Total 2,655 2,618 2,637 2,685 2,650 2,590 2,759 2,674
========================================================================================= ======================================
Petroleum Products Sales (MB/D)
Gasoline 1,500 1,508 1,539 1,595 1,536 1,487 1,602 1,545
Distillates 798 722 751 784 763 863 892 879
Aviation Fuel 184 200 210 203 199 205 224 214
Other 599 640 635 696 643 543 645 594
----------------------------------------------------------------------------------------- --------------------------------------
Total 3,081 3,070 3,135 3,278 3,141 3,098 3,363 3,232
========================================================================================= ======================================
* 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
2004 2005
----------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ---------------------------------------
LUKOIL Investment
Net Income ($ Millions) - - - 74 74 110 148 258
========================================================================== =======================================
Upstream
Production*
Net crude oil production (MB/D) - - - 150 38 190 215 203
Net natural gas production (MMCF/D) - - - 51 13 67 50 58
BOE Total (MBOE/D) - - - 159 40 201 223 213
-------------------------------------------------------------------------------------------------------------------
* Represents our estimated net share of LUKOIL's production.
Industry Prices
Crude Oil ($/bbl)
Urals crude (CIF Mediterranean) - - - 38.82 38.82 43.21 48.49 45.87
-------------------------------------------------------------------------- ---------------------------------------
Downstream
Refinery Throughput*
Crude Processed (MB/D) - - - 77 19 92 102 97
-------------------------------------------------------------------------------------------------------------------
* Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM
2004 2005
----------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ---------------------------------------
Midstream Net Income ($ Millions) 55 42 38 100 235 385 68 453
========================================================================== =======================================
U.S. Equity Affiliate ($ Millions)* 33 33 26 51 143 359 51 410
-------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States 54 24 28 23 32 23 21 22
International 47 33 49 49 45 53 44 48
Equity Affiliates
United States* 109 112 111 113 111 110 112 111
International 6 5 6 7 6 6 6 6
-------------------------------------------------------------------------- ---------------------------------------
Total 216 174 194 192 194 192 183 187
========================================================================== =======================================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
Natural Gas Liquids Fractionated (MB/D)
United States* 158 144 145 140 147 149 131 140
International 63 43 62 62 58 64 55 59
-------------------------------------------------------------------------- ---------------------------------------
Total 221 187 207 202 205 213 186 199
========================================================================== =======================================
* Excludes DEFS.
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 25.68 26.42 31.03 34.40 29.38 31.95 32.49 32.22
DEFS 24.81 25.61 30.27 33.69 28.60 30.61 31.33 30.97
-------------------------------------------------------------------------- ---------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted
by natural gas liquids component and location mix.
DD&A ($ Millions) 13 9 11 10 43 9 8 17
-------------------------------------------------------------------------- ---------------------------------------
CHEMICALS
2004 2005
----------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ---------------------------------------
Chemicals
Net Income (Loss) ($ Millions) 39 46 81 83 249 133 63 196
========================================================================== =======================================
Industry Margins (Cents/Lb)*
Ethylene industry cash margin 9.38 10.70 8.27 12.22 10.14 18.11 12.76 15.44
HDPE industry contract sales margin 9.43 9.21 9.23 11.68 9.89 12.09 12.01 12.05
Styrene industry contract sales
margin 13.06 13.33 13.73 13.40 13.38 13.91 13.63 13.77
-------------------------------------------------------------------------------------------------------------------
* 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
2004 2005
----------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ---------------------------------------
Emerging Businesses
Net Income (Loss) ($ Millions) (22) (29) (27) (24) (102) (8) (8) (16)
========================================================================== =======================================
Detail of Net Income (Loss) ($ Millions)
Technology Solutions (4) (4) (3) (7) (18) (2) (4) (6)
Gas-to-Liquids (9) (7) (9) (8) (33) (7) (7) (14)
Power (4) (16) (8) (3) (31) 2 9 11
Other (5) (2) (7) (6) (20) (1) (6) (7)
-------------------------------------------------------------------------- ---------------------------------------
Total (22) (29) (27) (24) (102) (8) (8) (16)
========================================================================== =======================================
CORPORATE AND OTHER
2004 2005
----------------------------------------- ---------------------------------------
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) (177) (156) (214) (225) (772) (195) (172) (367)
========================================================================== =======================================
Detail of Net Income (Loss) ($ Millions)
Net interest expense (113) (143) (149) (109) (514) (101) (84) (185)
Corporate overhead (48) (52) (51) (61) (212) (58) (46) (104)
Discontinued operations 13 62 (5) (48) 22 (11) 7 (4)
Merger-related costs (14) - - - (14) - - -
Accounting change - - - - - - - -
Other (15) (23) (9) (7) (54) (25) (49) (74)
-------------------------------------------------------------------------- ---------------------------------------
Total (177) (156) (214) (225) (772) (195) (172) (367)
========================================================================== =======================================
Before-Tax Net Interest Expense ($ Millions)
Interest expense (260) (263) (222) (231) (976) (226) (219) (445)
Capitalized interest 115 104 121 90 430 88 91 179
Interest revenue 16 12 8 11 47 25 24 49
Receivables monetization related (1) (1) 3 1 2 (1) - (1)
Premium on early debt retirement - - (58) - (58) (9) - (9)
-------------------------------------------------------------------------- ---------------------------------------
(130) (148) (148) (129) (555) (123) (104) (227)
========================================================================== =======================================
Debt
Total Debt ($ Millions) 17,109 15,619 15,486 15,002 15,002 14,012 14,013 14,013
Debt-to-Capital Ratio 32% 29% 28% 26% 26% 23% 22% 22%
-------------------------------------------------------------------------- ---------------------------------------
Page 11 of 11