UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 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 October 26, 2005, ConocoPhillips issued a press release announcing the
company's financial and operating results for the quarter ended September 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 October 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
October 26, 2005
3
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99.1 Press release issued by ConocoPhillips on October 26, 2005.
99.2 Financial and operational tables.
99.3 Supplemental financial information.
4
Exhibit 99.1
ConocoPhillips Reports Third-Quarter Net Income of $3.8 Billion
HOUSTON--(BUSINESS WIRE)--Oct. 26, 2005--ConocoPhillips (NYSE:COP)
Earnings at a glance
Third Quarter Nine Months
- ----------------------------------------------------------------------
2005 2004 2005 2004
- ----------------------------------------------------------------------
Income from
continuing
operations $3,804 million 2,011 million $9,858 million 5,627 million
Income from
discontinued
operations $ (4) (5) $ (8) 70
Net income $3,800 2,006 $9,850 5,697
- ----------------------------------------------------------------------
Diluted
income per
share
Income from
continuing
operations
(a) $2.68 1.43 $6.94 4.03
Net
income(a) $2.68 1.43 $6.94 4.08
- ----------------------------------------------------------------------
Revenues $49.7 billion 34.7 billion $131.2 billion 96.8 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 third-quarter net income
of $3,800 million, or $2.68 per share, compared with $2,006 million,
or $1.43 per share, for the same quarter in 2004. Total revenues were
$49.7 billion, versus $34.7 billion a year ago.
Income from continuing operations for the third quarter was $3,804
million, or $2.68 per share, compared with $2,011 million, or $1.43
per share, for the same period a year ago.
"During the quarter, our U.S. Gulf Coast operations were
significantly impacted by Hurricanes Katrina, Rita and Dennis. Despite
these impacts, our overall operating performance for the quarter was
good, and we continued to benefit from the strong commodity price
environment," said Jim Mulva, chairman and chief executive officer.
"We produced 1.79 million BOE per day, including 1.52 million BOE per
day from our Exploration and Production segment and an estimated 0.27
million BOE per day from our LUKOIL Investment segment. Worldwide
refining crude oil capacity utilization rate was 95 percent.
"Our financial position continues to steadily improve, and our
return on capital employed remains strong and competitive. We ended
the quarter with a debt-to-capital ratio of 21 percent. During the
quarter, we generated $6.1 billion in cash from operations, spent $3.6
billion in capital projects and investments, paid $430 million in
dividends, reduced debt by $516 million and repurchased $588 million
of ConocoPhillips common stock."
For the first nine months of 2005, net income was $9,850 million,
or $6.94 per share, versus $5,697 million, or $4.08 per share, for
2004. Income from continuing operations was $9,858 million, or $6.94
per share, compared with $5,627 million, or $4.03 per share, for the
same period a year ago. Total revenues were $131.2 billion, versus
$96.8 billion a year ago.
The results for ConocoPhillips' business segments follow.
Exploration & Production (E&P)
Third-quarter financial results: E&P income from continuing
operations was $2,288 million, up from $1,929 million in the second
quarter of 2005 and up from $1,420 million in the third quarter of
2004. The increase from the second quarter of 2005 and the third
quarter of 2004 primarily was the result of higher realized crude oil
and natural gas prices, partially offset by the impact of high natural
gas prices on inventory positions, higher depreciation, depletion and
amortization, hurricane impacts, and increased production taxes driven
by high commodity prices. Third-quarter results also benefited from
increased crude oil sales versus the same period last year.
Daily production, including Canadian Syncrude and excluding the
LUKOIL Investment segment, averaged 1.52 million barrels of oil
equivalent (BOE) per day, slightly lower than the prior quarter and
higher than the 1.48 million BOE per day in the third quarter of 2004.
Compared with the previous quarter, the company experienced
approximately 50,000 BOE per day of greater output from the Timor Sea,
Magnolia and Vietnam. These increases were more than offset by 30,000
BOE per day of planned and unplanned downtime in the United Kingdom,
20,000 BOE per day of downtime as a result of Hurricanes Katrina, Rita
and Dennis, and 10,000 BOE per day of normal seasonal decline as well
as planned and unplanned downtime in Alaska. In addition, the impacts
of production-sharing contracts in Indonesia, driven by higher prices,
continued to lower production volumes, compared with the second
quarter of 2005.
The increase from the third quarter of 2004 was primarily due to
less scheduled maintenance in Alaska and Norway, and greater output
from Australia, Venezuela, Lower 48 and Indonesia, despite the impact
of commodity prices on Indonesian production-sharing contracts. These
increases were partially offset by downtime in the United Kingdom.
Nine-months financial results: E&P income from continuing
operations for the first nine months of 2005 was $6,004 million, up
from $4,031 million in 2004, primarily due to higher realized crude
oil and natural gas prices and oil sales volumes, partially offset by
higher depreciation, depletion and amortization, the impact of higher
commodity prices on production taxes, and reduced income tax benefits.
Midstream
Third-quarter financial results: Midstream income from continuing
operations was $88 million, up from $68 million in the prior quarter
and up from $38 million in the third quarter of 2004. The primary
reasons for the improvement over the previous quarter were higher
natural gas liquids prices and increased ownership interest in Duke
Energy Field Services, LLC (DEFS). These improvements were partially
offset by lower volumes due to the Canada Empress system disposition.
The increase over the third quarter of 2004 primarily was due to
higher natural gas liquids prices in both DEFS' and the company's
consolidated operations, increased ownership in DEFS and the absence
of impairments recorded in the third quarter of 2004. These
improvements were partially offset by the Canada Empress system
disposition.
Nine-months financial results: Midstream income from continuing
operations for the first nine months of 2005 increased to $541
million, from $135 million in 2004. The increase primarily was due to
a net gain of $300 million to ConocoPhillips in the first quarter of
2005 associated with the DEFS restructuring, as well as the company's
increased ownership in DEFS. In addition, natural gas liquids prices
in both DEFS and the company's consolidated operations were higher in
the first nine months of 2005, compared with the first nine months of
2004.
Refining and Marketing (R&M)
Third-quarter financial results: R&M income from continuing
operations was $1,390 million, up from $1,110 million in the previous
quarter and $708 million in the third quarter of 2004. The increase
from the second quarter of 2005 and the third quarter of 2004
primarily was the result of improved worldwide refining margins,
partially offset by lower worldwide marketing margins. Although
industry crack spreads improved significantly during the quarter,
realized margins do not reflect the full benefit of stronger gasoline
spot prices as the company's refining configuration yields less
gasoline than assumed in the market cracks.
In addition, downtime at the company's three Gulf Coast refineries
due to Hurricanes Katrina, Rita and Dennis resulted in lower U.S.
refining throughput. The impact of the heavy-light crude oil
differentials was similar to that of the second quarter of 2005, while
energy costs increased from both the second quarter of 2005 and the
third quarter of 2004. Worldwide marketing results declined sharply,
mainly because the company's domestic wholesale and retail prices did
not increase as rapidly as gasoline and diesel spot prices.
Domestically, third-quarter realized refining margins
significantly improved relative to the second quarter. U.S. refineries
operated at 93 percent of crude oil capacity as hurricane-related
downtime impaired third-quarter throughputs. Before-tax turnaround
costs were $53 million in the third quarter, compared with $65 million
in the previous quarter. In addition, realized U.S. wholesale
marketing margins were significantly lower. U.S. marketing earnings
were negatively affected by a $16 million impairment resulting from
the discontinuation of a marketing incentive program.
Internationally, third-quarter realized refining margins improved
over the second quarter, while the refining crude oil capacity
utilization rate increased by 7 percent. Lower marketing margins also
impacted international results.
Worldwide, R&M's refinery crude oil capacity utilization rate
averaged 95 percent, compared with 97 percent in the previous quarter
and 94 percent in the third quarter of 2004. Before-tax turnaround
costs were $53 million in the third quarter of 2005, versus $106
million in the second quarter.
Nine-months financial results: R&M income from continuing
operations for the first nine months of 2005 increased to $3,200
million, compared with $1,990 million in the first nine months of
2004. The increased earnings were driven by higher worldwide refining
margins, partially offset by higher utility costs, unfavorable
inventory impacts, lower worldwide marketing margins, and foreign
exchange losses.
LUKOIL Investment
Third-quarter financial results: Income from continuing operations
in the third quarter of 2005 was $267 million, up from $148 million in
the prior quarter. This represents ConocoPhillips' estimate of the
company's 14.2 percent weighted average equity share of LUKOIL's
income for the third quarter based on market indicators and historical
production trends for LUKOIL. The improvement from the prior quarter
was attributable to higher realized price estimates, an increased
equity ownership position and an increase based on LUKOIL's reported
second-quarter results. At the end of the third quarter, the company's
equity ownership in LUKOIL was 14.8 percent.
ConocoPhillips' equity share of LUKOIL's estimated BOE production
was 266,000 per day and its share of estimated daily refining crude
oil throughput was 138,000 barrels per day.
Chemicals
Third-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 $13 million, compared with $63 million in the second
quarter of 2005 and $81 million in the third quarter of 2004. The
decrease from the second quarter was largely due to lower margins from
olefins and polyolefins, the effects of hurricane-related plant
shutdowns, and higher utility costs. The decrease from the third
quarter of 2004 reflects higher utility and maintenance costs, the
effects of hurricane-related plant shutdowns, and lower margins from
aromatics and styrenics.
Nine-months financial results: During the first nine months of
2005, the Chemicals segment had income from continuing operations of
$209 million, compared with $166 million for the same period a year
ago. The improvement primarily was due to higher margins in olefins
and polyolefins, partially offset by higher utility costs, higher
maintenance costs and lower overall volumes.
Emerging Businesses
The Emerging Businesses segment results from continuing operations
were slightly positive in the third quarter of 2005, compared with
losses of $8 million in the second quarter of 2005 and $27 million in
the third quarter of 2004. Improved results from international and
domestic power operations contributed to the improvement from second
quarter and the reduced operating losses, compared with the third
quarter of 2004.
Corporate and Other
Third-quarter after-tax Corporate expenses from continuing
operations were $242 million, compared with $179 million in the
previous quarter and $209 million in the third quarter of 2004. The
increased charges in the third quarter primarily were driven by $42
million in after-tax premiums incurred on the early retirement of
debt, as well as increased benefit-related charges and unfavorable
foreign exchange impacts. The increase from the third quarter of 2004
primarily was the result of negative foreign exchange impacts and
increased benefit-related charges, partially offset by lower net
interest expense.
Total debt at the end of the third quarter was $13.5 billion, down
approximately $0.5 billion from the previous quarter and $1.5 billion
below the year-end 2004 level. At the end of the third quarter, the
company's debt-to-capital ratio was 21 percent, down from 22 percent
at the end of the second quarter.
The company's tax provision for the third quarter of 2005 was $2.8
billion, resulting in an effective tax rate of 42.0 percent. This is
compared with 42.4 percent in the previous quarter and 45.1 percent in
the third quarter of 2004.
Discontinued Operations
Third-quarter financial results: Third-quarter losses from
discontinued operations were $4 million, compared with income of $7
million in the second quarter and losses of $5 million in the third
quarter of 2004.
Nine-months financial results: During the first nine months of
2005, discontinued operations had a loss of $8 million, compared with
income of $70 million for the same period a year ago. The decrease is
attributable primarily to 2004 asset sales.
Outlook
Mr. Mulva concluded:
"Efforts to restore operations impacted by Hurricanes Katrina and
Rita continue. The company-operated Magnolia field and the Sweeny
refinery have returned to normal operations. The Lake Charles refinery
is expected to return to normal operations by next week. The
company-operated Green Canyon and partner-operated Ursa fields remain
shut-in, pending full assessment and infrastructure coming back
online. The company's Alliance refinery is expected to begin partial
operation in December and return to full operation in early 2006.
"We expect our production in the fourth quarter to increase and
anticipate full-year daily BOE production to average about the same as
2004, excluding LUKOIL.
"With respect to downstream, some turnaround activity has been
rescheduled in an effort to help stabilize U.S. supply. Near-term Gulf
Coast utilization rates are expected to return to pre-hurricane levels
once operations are restored at the Alliance refinery. During the
Alliance downtime, we will complete turnaround activity previously
scheduled for 2006. Full-year turnaround costs are anticipated to be
approximately $380 million.
"We are facing significant short-term and long-term energy
challenges in the United States. Industry must work proactively with
consumers and the government to find solutions. ConocoPhillips
continues to pursue opportunities for increasing domestic energy
supply through various liquefied natural gas projects, Canadian Oil
Sands projects and projects aimed at developing Alaska and Mackenzie
Delta natural gas resources. Specifically, the company and the state
of Alaska recently announced an agreement in principle on base fiscal
terms for a natural gas pipeline contract that progresses the
development of Alaska North Slope gas. Additionally, we are advancing
our plans to expand our overall refining capacity and clean fuels
capabilities.
"We look forward to updating the financial community on the status
of our business and operating plans at our November 16 analyst meeting
in New York."
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had
approximately 35,800 employees, $104 billion of assets, and $175
billion of annualized revenues as of September 30, 2005. For more
information, go to www.conocophillips.com.
ConocoPhillips' quarterly conference call is scheduled for 11 a.m.
Eastern today. To listen to the conference call and to view related
presentation materials, go to www.conocophillips.com and click on the
"Investor Information" link.
For financial and operational tables and detailed supplemental
information, go to
http://www.conocophillips.com/investor/reports/index.htm
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 "Lake
Charles is expected to return to normal operations by next week"; "the
Company's Alliance refinery is expected to begin partial operation in
December and return to full operation in early 2006"; "we expect our
production in the fourth quarter to increase and anticipate full-year
daily BOE production to average about the same as 2004, excluding
LUKOIL"; "near-term Gulf Coast utilization rates are expected to
return to pre-hurricane levels once operations are restored at the
Alliance refinery"; "during the Alliance downtime, we will complete
turnaround activity previously scheduled for 2006"; "full-year
turnaround costs are anticipated to be approximately $380 million",
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). Unless
legally required, ConocoPhillips undertakes 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 and the company's Web site at
www.conocophillips.com/investor/sec. This information also can 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 Nine Months Ended
September 30 September 30
2005 2004 2005 2004
Revenues
Sales and other operating revenues* $ 48,745 34,350 128,184 95,691
Equity in earnings of affiliates 872 389 2,626 980
Other income 42 2 381 173
--------- --------- --------- ---------
49,659 34,741 131,191 96,844
--------- --------- --------- ---------
Costs and expenses
Purchased crude oil, natural gas and products 34,508 23,100 88,603 63,198
Production and operating expenses 1,982 1,807 6,081 5,312
Selling, general and administrative expenses 612 529 1,690 1,513
Exploration expenses 140 205 432 511
Depreciation, depletion and amortization 1,049 938 3,075 2,768
Property impairments - 12 31 63
Taxes other than income taxes* 4,606 4,336 13,758 12,878
Accretion on discounted liabilities 46 49 135 126
Interest and debt expense 122 101 387 405
Foreign currency transaction losses (gains) 34 (4) 52 (53)
Minority interests 6 8 21 29
--------- --------- --------- ---------
43,105 31,081 114,265 86,750
--------- --------- --------- ---------
Income from continuing operations before income taxes 6,554 3,660 16,926 10,094
Provision for income taxes 2,750 1,649 7,068 4,467
--------- --------- --------- ---------
Income from continuing operations 3,804 2,011 9,858 5,627
Income (loss) from discontinued operations (4) (5) (8) 70
--------- --------- --------- ---------
Net income $ 3,800 2,006 9,850 5,697
========= ========= ========= =========
Income per share of common stock (dollars)**
Basic
Continuing operations $ 2.73 1.45 7.06 4.08
Discontinued operations - - (0.01) 0.05
Net income $ 2.73 1.45 7.05 4.13
Diluted
Continuing operations $ 2.68 1.43 6.94 4.03
Discontinued operations - - - 0.05
Net income $ 2.68 1.43 6.94 4.08
Average common shares outstanding (in thousands)**
Basic 1,393,943 1,383,652 1,396,180 1,378,428
Diluted 1,417,796 1,403,432 1,419,898 1,397,038
* Includes excise, value added and other similar taxes on petroleum
products sales: $ 4,292 4,079 12,785 12,073
** 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 Nine Months Ended
September 30 September 30
2005 2004 2005 2004
INCOME (LOSS) FROM CONTINUING OPERATIONS
E&P
United States $ 1,107 701 2,965 2,007
International 1,181 719 3,039 2,024
--------- --------- --------- ---------
Total E&P 2,288 1,420 6,004 4,031
--------- --------- --------- ---------
Midstream 88 38 541 135
--------- --------- --------- ---------
R&M
United States 1,096 505 2,602 1,642
International 294 203 598 348
--------- --------- --------- ---------
Total R&M 1,390 708 3,200 1,990
--------- --------- --------- ---------
LUKOIL Investment 267 - 525 -
Chemicals 13 81 209 166
Emerging Businesses - (27) (16) (78)
Corporate and other (242) (209) (605) (617)
--------- --------- --------- ---------
Consolidated $ 3,804 2,011 9,858 5,627
========= ========= ========= =========
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Corporate and other (4) (5) (8) 70
SUMMARY OF NET INCOME (LOSS)
E&P
United States $ 1,107 701 2,965 2,007
International 1,181 719 3,039 2,024
--------- --------- --------- ---------
Total E&P 2,288 1,420 6,004 4,031
--------- --------- --------- ---------
Midstream 88 38 541 135
--------- --------- --------- ---------
R&M
United States 1,096 505 2,602 1,642
International 294 203 598 348
--------- --------- --------- ---------
Total R&M 1,390 708 3,200 1,990
--------- --------- --------- ---------
LUKOIL Investment 267 - 525 -
Chemicals 13 81 209 166
Emerging Businesses - (27) (16) (78)
Corporate and other (246) (214) (613) (547)
--------- --------- --------- ---------
Net income $ 3,800 2,006 9,850 5,697
========= ========= ========= =========
2
ConocoPhillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
INCOME FROM CONTINUING OPERATIONS
Effective tax rate % 42.0 % 45.1 41.8 44.3
Millions of Dollars
FOREIGN CURRENCY GAINS (LOSSES)
AFTER-TAX
E&P $ 2 (4) 6 15
Midstream - - 7 -
R&M (13) (5) (49) 1
LUKOIL Investment (1) - (1) -
Chemicals - - - -
Emerging Businesses - (1) - -
Corporate and other (23) 15 (27) 21
-------- -------- -------- --------
$ (35) 5 (64) 37
======== ======== ======== ========
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $ 3,804 2,011 9,858 5,627
Depreciation, depletion and amortization 1,049 938 3,075 2,768
Property impairments - 12 31 63
Dry hole costs and leasehold impairment 55 150 211 342
Accretion on discounted liabilities 46 49 135 126
Deferred income taxes 261 328 753 998
Undistributed equity earnings (463) (263) (1,682) (541)
Net (gain) loss on asset dispositions (22) 6 (264) (82)
Other 192 (30) 1 105
Working capital changes 1,177 1,267 841 (611)
-------- -------- -------- --------
Net cash provided by continuing operations 6,099 4,468 12,959 8,795
Net cash provided by (used in) discontinued
operations (3) (55) (6) (33)
-------- -------- -------- --------
Net cash provided by operating activities $ 6,096 4,413 12,953 8,762
======== ======== ======== ========
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $ 323 332 1,221 946
International 1,152 916 3,797 2,751
-------- -------- -------- --------
1,475 1,248 5,018 3,697
Midstream 838 1 839 6
R&M 440 277 1,075 770
LUKOIL Investment 815 - 1,523 -
Chemicals - - - -
Emerging Businesses 2 19 5 74
Corporate and other* 56 49 113 112
-------- -------- -------- --------
$ 3,626 1,594 8,573 4,659
======== ======== ======== ========
*Excludes discontinued operations
OTHER
At September 30, 2005 At December 31, 2004
Total debt $13,497 15,002
Common stockholders' equity $49,838 42,723
3
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 281 253 296 293
Lower 48 56 50 60 51
-------- -------- -------- --------
337 303 356 344
Norway 198 189 200 205
United Kingdom 56 59 59 64
Canada 22 24 23 25
China 22 25 23 28
Indonesia 10 14 16 15
Vietnam 30 35 27 32
Timor Sea 38 29 32 17
Other 53 55 54 60
-------- -------- -------- --------
Total consolidated 766 733 790 790
Equity affiliates 124 111 122 109
-------- -------- -------- --------
Total Worldwide 890 844 912 899
======== ======== ======== ========
Syncrude 21 22 19 22
======== ======== ======== ========
Natural gas liquids produced
United States
Alaska* 18 19 19 23
Lower 48 30 26 30 25
-------- -------- -------- --------
48 45 49 48
Norway 10 8 9 8
Canada 10 10 10 11
Timor Sea 20 14 15 6
Other 4 10 5 8
-------- -------- -------- --------
Total Worldwide 92 87 88 81
======== ======== ======== ========
* Includes reinjected volumes sold lease-to-lease. 8 10 7 14
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 173 164 169 166
Lower 48 1,218 1,220 1,194 1,226
-------- -------- -------- --------
1,391 1,384 1,363 1,392
Norway 259 274 275 299
United Kingdom 588 720 717 807
Canada 429 425 422 430
Timor Sea 35 35 35 35
Indonesia 303 248 288 244
Vietnam 20 15 17 16
Other 74 78 77 75
-------- -------- -------- --------
Total consolidated 3,099 3,179 3,194 3,298
Equity affiliates 10 4 8 5
-------- -------- -------- --------
Total Worldwide 3,109 3,183 3,202 3,303
======== ======== ======== ========
* Represents quantities available for sale. Excludes gas equivalent of NGL
shown above.
Liquefied natural gas sales 123 115 117 105
LUKOIL Investment
Production (MBOE/D)* 266 - 231 -
Refinery crude oil throughput (MB/D)* 138 - 110 -
* Represents our estimated net share of LUKOIL.
4
ConocoPhillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
E&P
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $ 58.70 40.48 50.54 36.41
Lower 48 50.00 39.56 44.83 35.21
Total U.S. 57.31 40.33 49.59 36.23
International 59.52 40.47 51.46 35.64
Total consolidated 58.49 40.41 50.61 35.90
Equity affiliates 45.25 26.19 37.45 23.43
Total Worldwide 56.64 38.78 48.80 34.40
Natural gas-lease (per MCF)
United States
Alaska 2.57 2.22 2.66 2.38
Lower 48 7.67 5.29 6.53 5.26
Total U.S. 7.48 5.19 6.40 5.14
International 5.60 3.98 5.25 3.97
Total consolidated 6.40 4.48 5.71 4.44
Equity affiliates 0.20 0.31 0.25 2.59
Total Worldwide 6.38 4.48 5.70 4.44
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 23 28 22 35
International 5 49 34 43
Equity affiliates
United States* 171 111 131 111
International 6 6 6 6
--------- --------- --------- ---------
205 194 193 195
========= ========= ========= =========
* Represents 30.3 percent interest in Duke Energy Field Services LLC (DEFS),
through June 30, 2005, and 50 percent interest beginning in July 2005.
Per Barrel
U.S. product prices Weighted average NGL**
Consolidated $ 39.60 31.03 34.68 27.71
DEFS 38.31 30.27 33.42 26.90
**Prices are based on index prices from the Mont Belvieu and Conway market hubs
that are weighted by natural-gas-liquids component and location mix.
5
ConocoPhillips
Houston, Texas 77079
Three Months Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,182 2,160 2,179 2,165
Crude oil runs 2,040 2,011 2,044 2,078
Refinery production 2,223 2,198 2,238 2,248
International*
Crude oil capacity 428 428 428 441
Crude oil runs 431 425 420 381
Refinery production 448 439 434 389
U.S. Petroleum products outside sales
Gasoline 1,397 1,366 1,376 1,337
Distillates 725 544 683 551
Aviation fuels 203 200 205 190
Other products 526 553 518 548
-------- -------- -------- --------
2,851 2,663 2,782 2,626
International 470 472 481 470
-------- -------- -------- --------
3,321 3,135 3,263 3,096
======== ======== ======== ========
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $ 2.00 1.37 1.71 1.31
Automotive gasoline-retail 2.14 1.51 1.86 1.48
Distillates-wholesale 1.97 1.30 1.71 1.18
* Includes ConocoPhillips' share of equity affiliates.
** Excludes excise taxes.
6
Exhibit 99.3
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 1,107 2,965
International E&P 622 683 719 736 2,760 895 963 1,181 3,039
- -------------------------------------------------------------------------- ---------------------------------------
Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 2,288 6,004
- -------------------------------------------------------------------------- ---------------------------------------
Midstream 55 42 38 100 235 385 68 88 541
- -------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 403 734 505 484 2,126 570 936 1,096 2,602
International R&M 61 84 203 269 617 130 174 294 598
- -------------------------------------------------------------------------- ---------------------------------------
Total R&M 464 818 708 753 2,743 700 1,110 1,390 3,200
- -------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 110 148 267 525
Chemicals 39 46 81 83 249 133 63 13 209
Emerging Businesses (22) (29) (27) (24) (102) (8) (8) - (16)
Corporate and Other (190) (218) (209) (177) (794) (184) (179) (242) (605)
- -------------------------------------------------------------------------- ---------------------------------------
Consolidated 1,603 2,013 2,011 2,480 8,107 2,923 3,131 3,804 9,858
========================================================================== =======================================
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) (8)
========================================================================== =======================================
Net Income (Loss)
U.S. E&P 635 671 701 935 2,942 892 966 1,107 2,965
International E&P 622 683 719 736 2,760 895 963 1,181 3,039
- -------------------------------------------------------------------------- ---------------------------------------
Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 2,288 6,004
- -------------------------------------------------------------------------- ---------------------------------------
Midstream 55 42 38 100 235 385 68 88 541
- -------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 403 734 505 484 2,126 570 936 1,096 2,602
International R&M 61 84 203 269 617 130 174 294 598
- -------------------------------------------------------------------------- ---------------------------------------
Total R&M 464 818 708 753 2,743 700 1,110 1,390 3,200
- -------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 110 148 267 525
Chemicals 39 46 81 83 249 133 63 13 209
Emerging Businesses (22) (29) (27) (24) (102) (8) (8) - (16)
Corporate and Other (177) (156) (214) (225) (772) (195) (172) (246) (613)
- -------------------------------------------------------------------------- ---------------------------------------
Consolidated 1,616 2,075 2,006 2,432 8,129 2,912 3,138 3,800 9,850
========================================================================== =======================================
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 1,728 4,620
International E&P 1,410 1,360 1,654 1,684 6,108 2,020 2,152 2,567 6,739
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P 2,397 2,409 2,711 3,117 10,634 3,408 3,656 4,295 11,359
- --------------------------------------------------------------------------- ---------------------------------------
Midstream 86 66 62 158 372 449 107 138 694
- --------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 636 1,149 803 772 3,360 901 1,485 1,766 4,152
International R&M 79 111 268 356 814 160 203 368 731
- --------------------------------------------------------------------------- ---------------------------------------
Total R&M 715 1,260 1,071 1,128 4,174 1,061 1,688 2,134 4,883
- --------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 115 153 275 543
Chemicals 49 56 99 109 313 187 84 (3) 268
Emerging Businesses (34) (42) (44) (34) (154) (13) (13) (2) (28)
Corporate and Other (249) (279) (239) (277) (1,044) (267) (243) (283) (793)
- --------------------------------------------------------------------------- ---------------------------------------
Consolidated 2,964 3,470 3,660 4,275 14,369 4,940 5,432 6,554 16,926
=========================================================================== =======================================
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% 35.9% 35.8%
International E&P 55.9% 49.8% 56.5% 56.3% 54.8% 55.7% 55.3% 54.0% 54.9%
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P 47.6% 43.8% 47.6% 46.4% 46.4% 47.6% 47.2% 46.7% 47.1%
- --------------------------------------------------------------------------- ---------------------------------------
Midstream 36.0% 36.4% 38.7% 36.7% 36.8% 14.3% 36.4% 36.2% 22.0%
- --------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 36.6% 36.1% 37.1% 37.3% 36.7% 36.7% 37.0% 37.9% 37.3%
International R&M 22.8% 24.3% 24.3% 24.4% 24.2% 18.8% 14.3% 20.1% 18.2%
- --------------------------------------------------------------------------- ---------------------------------------
Total R&M 35.1% 35.1% 33.9% 33.2% 34.3% 34.0% 34.2% 34.9% 34.5%
- --------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment n/a n/a n/a 0.0% 0.0% 4.3% 3.3% 2.9% 3.3%
Chemicals 20.4% 17.9% 18.2% 23.9% 20.4% 28.9% 25.0% -- 22.0%
Emerging Businesses 35.3% 31.0% 38.6% 29.4% 33.8% 38.5% 38.5% -- 42.9%
Corporate and Other 23.7% 21.9% 12.6% 36.1% 23.9% 31.1% 26.3% 14.5% 23.7%
- --------------------------------------------------------------------------- ---------------------------------------
Consolidated 45.9% 42.0% 45.1% 42.0% 43.6% 40.8% 42.4% 42.0% 41.8%
=========================================================================== =======================================
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) (4) (9)
Pending claims and settlements - - - - - - 15 - 15
- ----------------------------------------------------------------------------- ---------------------------------------
Total (3) - 22 2 21 90 10 (4) 96
- ----------------------------------------------------------------------------- ---------------------------------------
International E&P
Gain (loss) on asset sales 56 (13) - - 43 - 15 - 15
Property impairments - - (1) (29) (30) - - - -
Insurance premium adjustment - - - (17) (17) - (10) (12) (22)
Canada tax law change - 31 - 41 72 - - - -
Pending claims and settlements - - - - - - - - -
- ----------------------------------------------------------------------------- ---------------------------------------
Total 56 18 (1) (5) 68 - 5 (12) (7)
- ----------------------------------------------------------------------------- ---------------------------------------
Total E&P 53 18 21 (3) 89 90 15 (16) 89
- ----------------------------------------------------------------------------- ---------------------------------------
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) (9) (16)
Discontinuation of a marketing
incentive program - - - - - - - (16) (16)
Pending claims and settlements - - (34) - (34) - - - -
- ----------------------------------------------------------------------------- ---------------------------------------
Total (5) - (40) (34) (79) 31 (7) (25) (1)
- ----------------------------------------------------------------------------- ---------------------------------------
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 (25) 24
- ----------------------------------------------------------------------------- ---------------------------------------
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) - (42) (50)
Other - - - - - - - - -
- ----------------------------------------------------------------------------- ---------------------------------------
Total (14) - (43) - (57) (8) - (42) (50)
- ----------------------------------------------------------------------------- ---------------------------------------
Total Company 22 8 (62) (37) (69) 413 26 (83) 356
============================================================================= =======================================
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 3,804 9,858
DD&A and property impairments 949 932 950 1,131 3,962 1,063 994 1,049 3,106
Dry hole costs and leasehold impairments 87 105 150 75 417 109 47 55 211
Accretion on discounted liabilities 36 41 49 45 171 48 41 46 135
Deferred income taxes 360 310 328 27 1,025 123 369 261 753
Undistributed equity earnings (181) (97) (263) (236) (777) (805) (414) (463) (1,682)
Net (gain) loss on asset dispositions (82) (6) 6 (34) (116) (177) (65) (22) (264)
Other 70 65 (30) (295) (190) (78) (113) 192 1
Net working capital changes (777) (1,101) 1,267 10 (601) 888 (1,224) 1,177 841
Discontinued operations 8 14 (55) (6) (39) (5) 2 (3) (6)
- ------------------------------------------------------------------------------------------ ---------------------------------------
Net Cash Provided by
Operating Activities 2,073 2,276 4,413 3,197 11,959 4,089 2,768 6,096 12,953
- ------------------------------------------------------------------------------------------ ---------------------------------------
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)(1,475) (5,018)
Midstream (3) (2) (1) (1) (7) (1) - (838) (839)
R&M (215) (278) (277) (574) (1,344) (275) (360) (440) (1,075)
LUKOIL Investment - - - (2,649) (2,649) (324) (384) (815) (1,523)
Chemicals - - - - - - - - -
Emerging Businesses (28) (27) (19) (1) (75) 4 (7) (2) (5)
Corporate and Other (25) (38) (49) (60) (172) (20) (37) (56) (113)
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total capital expend. & investments (1,481) (1,584) (1,594) (4,837) (9,496) (1,822) (3,125)(3,626) (8,573)
Acquisitions - adoption & application of FIN 46 - - 11 - 11 - - - -
Proceeds from asset dispositions 449 905 73 164 1,591 87 221 300 608
Long-term advances to/collections from
affiliates and other investments (44) 9 30 112 107 25 4 (58) (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)(3,384) (7,994)
- ------------------------------------------------------------------------------------------ ---------------------------------------
Cash Flows from Financing Activities
Net issuance (repayment) of debt (722) (1,361) (221) (471) (2,775) (986) (13) (513) (1,512)
Issuance of stock 112 95 62 161 430 155 108 114 377
Repurchase of stock - - - - - (194) (382) (588) (1,164)
Dividends (294) (296) (296) (346) (1,232) (348) (432) (430) (1,210)
Other 89 94 (66) 61 178 64 33 (11) 86
- ------------------------------------------------------------------------------------------ ---------------------------------------
Net Cash Provided by (Used for)
Financing Activities (815) (1,468) (521) (595) (3,399) (1,309) (686)(1,428) (3,423)
- ------------------------------------------------------------------------------------------ ---------------------------------------
Effect of Exchange Rate Changes (12) 8 47 82 125 (36) (62) (22) (120)
- ------------------------------------------------------------------------------------------ ---------------------------------------
Net Change in Cash
and Cash Equivalents 169 145 2,459 (1,876) 897 1,034 (880) 1,262 1,416
Cash and cash equivalents
at beginning of period 490 659 804 3,263 490 1,387 2,421 1,541 1,387
- ------------------------------------------------------------------------------------------ ---------------------------------------
Cash and Cash Equivalents
at End of Period 659 804 3,263 1,387 1,387 2,421 1,541 2,803 2,803
========================================================================================== =======================================
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 2,288 6,004
====================================================================================== =======================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 1,611 1,563 1,484 1,596 1,563 1,600 1,537 1,521 1,553
- -------------------------------------------------------------------------------------- ---------------------------------------
E&P segment plus LUKOIL Investment segment: 1,611 1,563 1,484 1,755 1,603 1,801 1,760 1,787 1,784
- -------------------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated 828 809 733 821 797 822 780 766 790
Equity affiliates 113 104 111 103 108 120 123 124 122
- -------------------------------------------------------------------------------------- ---------------------------------------
Total 941 913 844 924 905 942 903 890 912
====================================================================================== =======================================
Sales of crude oil produced (MB/D) 927 888 875 903 898 940 932 883 918
- -------------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D) 76 79 87 92 84 94 80 92 88
- --------------------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 3,415 3,299 3,179 3,356 3,312 3,295 3,191 3,099 3,194
Equity affiliates 9 4 4 4 5 5 7 10 8
- -------------------------------------------------------------------------------------- ---------------------------------------
Total 3,424 3,303 3,183 3,360 3,317 3,300 3,198 3,109 3,202
====================================================================================== =======================================
Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 21 19
- -------------------------------------------------------------------------------------- ---------------------------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 35.23 38.31 43.86 48.29 41.42 49.70 53.03 63.05 55.26
Brent dated 31.95 35.36 41.54 44.00 38.21 47.50 51.59 61.54 53.54
Natural Gas--Henry Hub 1st of month ($/mcf) 5.69 6.00 5.75 7.07 6.13 6.27 6.74 8.53 7.18
- -------------------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated 32.08 35.32 40.41 42.79 37.65 44.89 48.88 58.49 50.61
Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 45.25 37.45
Total 30.44 34.17 38.78 40.96 36.06 43.15 46.93 56.64 48.80
- -------------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl) 25.43 26.71 30.73 35.37 30.02 33.44 35.10 41.54 36.76
- -------------------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated 4.41 4.43 4.48 5.13 4.62 5.24 5.53 6.40 5.71
Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.20 0.25
Total 4.41 4.43 4.48 5.13 4.61 5.24 5.52 6.38 5.70
- -------------------------------------------------------------------------------------- ---------------------------------------
Exploration Charges ($ Millions)
Dry Holes 67 42 82 51 242 88 30 32 150
Lease Impairments 20 63 68 24 175 20 18 23 61
- -------------------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 87 105 150 75 417 108 48 55 211
Other (G&G and Lease Rentals) 56 58 55 117 286 63 73 85 221
- -------------------------------------------------------------------------------------- ---------------------------------------
Total Exploration Charges 143 163 205 192 703 171 121 140 432
====================================================================================== =======================================
Depreciation, Depletion and
Amortization (DD&A) ($ Millions) 704 720 711 783 2,918 819 755 823 2,397
- -------------------------------------------------------------------------------------- ---------------------------------------
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 1,107 2,965
========================================================================================== =======================================
Alaska ($ Millions) 403 397 451 581 1,832 532 572 730 1,834
- ------------------------------------------------------------------------------------------ ---------------------------------------
Lower 48 ($ Millions) 232 274 250 354 1,110 360 394 377 1,131
- ------------------------------------------------------------------------------------------ ---------------------------------------
Production
Total U.S. (MBOE/D) 659 637 579 642 629 648 631 617 632
- ------------------------------------------------------------------------------------------ ---------------------------------------
Crude Oil and Condensate (MB/D)
Alaska 320 307 253 313 298 309 297 281 296
Lower 48 53 52 50 50 51 62 63 56 60
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total 373 359 303 363 349 371 360 337 356
========================================================================================== =======================================
Sales of crude oil produced (MB/D) 373 354 312 356 349 386 352 352 363
- ------------------------------------------------------------------------------------------ ---------------------------------------
Natural Gas Liquids (MB/D)*
Alaska 26 23 19 24 23 24 16 18 19
Lower 48 24 26 26 26 26 27 31 30 30
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total 50 49 45 50 49 51 47 48 49
========================================================================================== =======================================
*Includes reinjection volumes sold lease-to-lease: 16 15 10 14 14 13 1 8 7
- ------------------------------------------------------------------------------------------ ---------------------------------------
Natural Gas (MMCF/D)
Alaska 185 147 164 163 165 185 148 173 169
Lower 48 1,233 1,226 1,220 1,214 1,223 1,169 1,195 1,218 1,194
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total 1,418 1,373 1,384 1,377 1,388 1,354 1,343 1,391 1,363
========================================================================================== =======================================
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Alaska
North Slope 28.00 31.69 35.66 39.53 33.61 38.93 43.92 53.30 45.24
- ------------------------------------------------------------------------------------------ ---------------------------------------
West Coast 32.93 36.53 40.48 44.37 38.47 44.15 49.22 58.70 50.54
- ------------------------------------------------------------------------------------------ ---------------------------------------
Lower 48 31.86 34.39 39.56 42.30 36.95 41.29 43.58 50.00 44.83
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total U.S. 32.78 36.22 40.33 44.08 38.25 43.69 48.21 57.31 49.59
- ------------------------------------------------------------------------------------------ ---------------------------------------
Natural Gas Liquids ($/bbl)
Alaska 32.93 36.38 40.52 43.78 38.64 44.33 49.20 57.11 49.86
- ------------------------------------------------------------------------------------------ ---------------------------------------
Lower 48 24.19 25.82 29.40 32.80 28.14 30.96 31.22 39.92 34.16
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total U.S. 26.80 28.38 32.22 36.21 31.05 34.68 37.26 43.95 38.64
- ------------------------------------------------------------------------------------------ ---------------------------------------
Natural Gas ($/mcf)
Alaska 2.54 2.31 2.22 2.23 2.35 2.96 2.49 2.57 2.66
- ------------------------------------------------------------------------------------------ ---------------------------------------
Lower 48 5.00 5.49 5.29 6.04 5.46 5.66 6.20 7.67 6.53
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total U.S. 4.88 5.35 5.19 5.92 5.33 5.57 6.07 7.48 6.40
- ------------------------------------------------------------------------------------------ ---------------------------------------
Kenai, Alaska LNG Sales
Volume (MMCF/D) 118 82 115 107 105 132 96 123 117
- ------------------------------------------------------------------------------------------ ---------------------------------------
Sales price per MCF 4.51 4.80 5.06 5.25 4.90 5.27 5.24 5.90 5.48
- ------------------------------------------------------------------------------------------ ---------------------------------------
U.S. Exploration Charges ($ Millions)
Dry Holes 32 32 (5) - 59 74 8 (2) 80
Lease Impairments 11 11 10 10 42 10 9 9 28
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total Non-Cash Charges 43 43 5 10 101 84 17 7 108
Other (G&G and Lease Rentals) 15 19 15 37 86 12 17 19 48
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total U.S. Exploration Charges 58 62 20 47 187 96 34 26 156
========================================================================================== =======================================
Alaska Only 17 43 7 14 81 85 13 11 109
- ------------------------------------------------------------------------------------------ ---------------------------------------
DD&A ($ Millions)
Alaska 119 125 122 144 510 133 134 126 393
Lower 48 146 145 157 150 598 219 172 243 634
- ------------------------------------------------------------------------------------------ ---------------------------------------
Total U.S. 265 270 279 294 1,108 352 306 369 1,027
========================================================================================== =======================================
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 1,181 3,039
======================================================================================= =======================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 952 926 905 954 934 952 906 904 921
- --------------------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated
Norway 215 212 189 211 207 207 195 198 200
United Kingdom 67 64 59 66 64 61 60 56 59
Canada 27 25 24 24 25 23 23 22 23
China 32 28 25 17 25 22 25 22 23
Indonesia 15 14 14 18 15 21 16 10 16
Vietnam 31 31 35 33 33 27 26 30 27
Timor Sea 5 15 29 34 21 36 21 38 32
Other 63 61 55 55 58 54 54 53 54
Equity affiliates 113 104 111 103 108 120 123 124 122
- --------------------------------------------------------------------------------------- ---------------------------------------
Total 568 554 541 561 556 571 543 553 556
======================================================================================= =======================================
Sales of crude oil produced (MB/D) 554 534 563 547 549 554 580 531 555
- --------------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D)
Norway 9 8 8 9 8 10 9 10 9
Canada 10 10 10 11 10 10 10 10 10
Timor Sea - 4 14 16 9 17 9 20 15
Other 7 8 10 6 8 6 5 4 5
- --------------------------------------------------------------------------------------- ---------------------------------------
Total 26 30 42 42 35 43 33 44 39
======================================================================================= =======================================
Natural Gas (MMCF/D)
Consolidated
Norway 319 303 274 306 301 298 268 259 275
United Kingdom 879 821 720 852 818 824 741 588 717
Canada 428 437 425 442 433 417 422 429 422
Timor Sea 40 32 35 35 35 35 35 35 35
Indonesia 248 237 248 266 250 273 287 303 288
Vietnam 17 15 15 19 16 18 14 20 17
Other 66 81 78 59 71 76 81 74 77
Equity affiliates 9 4 4 4 5 5 7 10 8
- --------------------------------------------------------------------------------------- ---------------------------------------
Total 2,006 1,930 1,799 1,983 1,929 1,946 1,855 1,718 1,839
======================================================================================= =======================================
Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 21 19
- --------------------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
Norway 32.13 34.72 40.70 41.82 37.55 45.52 50.21 60.42 52.11
United Kingdom 31.27 34.19 39.57 44.79 37.00 49.47 48.02 60.83 52.30
Canada 28.95 30.58 36.16 38.44 32.92 36.96 41.09 54.74 44.12
China 29.91 33.02 37.99 32.87 33.31 41.51 46.95 51.89 47.15
Indonesia 32.21 36.20 42.71 45.43 39.21 46.51 47.57 61.77 50.20
Vietnam 31.76 36.42 41.36 42.94 38.31 47.77 53.32 58.52 53.45
Timor Sea 35.49 37.32 46.65 45.95 43.91 47.99 50.90 59.03 52.97
Other 30.89 34.87 39.54 39.28 36.05 44.56 50.11 60.99 51.63
Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 45.25 37.45
Total 28.86 32.81 37.92 38.93 34.67 42.77 46.16 56.19 48.28
- --------------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl)
Norway 24.34 24.22 27.79 37.64 28.92 30.63 28.20 37.29 31.91
Canada 26.38 28.58 31.15 36.61 30.77 37.37 37.66 44.22 39.73
Timor Sea - 29.13 33.96 37.11 34.94 34.40 35.99 40.45 37.37
Other 18.43 18.03 22.76 19.64 19.99 21.34 22.30 26.63 23.09
Total 23.53 24.69 29.53 34.59 28.96 32.35 32.03 39.29 34.78
- --------------------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated
Norway 4.37 3.99 4.12 4.45 4.24 5.03 5.30 5.13 5.15
United Kingdom 4.04 3.47 3.79 4.76 4.03 5.54 5.01 4.92 5.18
Canada 4.88 5.01 4.64 5.43 5.00 5.33 6.14 7.54 6.36
Timor Sea 0.43 0.45 0.46 0.49 0.46 0.52 0.52 0.56 0.53
Indonesia 4.38 4.28 5.02 4.74 4.61 5.08 5.96 6.73 5.96
Vietnam 1.10 0.99 1.01 1.05 1.04 1.04 1.04 1.05 1.04
Other 0.66 0.59 0.62 0.97 0.69 0.70 0.59 0.66 0.65
Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.20 0.25
Total 4.11 3.81 3.98 4.63 4.14 5.03 5.15 5.57 5.24
- --------------------------------------------------------------------------------------- ---------------------------------------
International Exploration Charges ($ Millions)
Dry Holes 35 10 87 51 183 14 22 34 70
Lease Impairments 9 52 58 14 133 10 9 14 33
- --------------------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 44 62 145 65 316 24 31 48 103
Other (G&G and Lease Rentals) 41 39 40 80 200 51 56 66 173
- --------------------------------------------------------------------------------------- ---------------------------------------
Total International Exploration Charges 85 101 185 145 516 75 87 114 276
======================================================================================= =======================================
DD&A ($ Millions) 439 450 432 489 1,810 467 449 454 1,370
- --------------------------------------------------------------------------------------- ---------------------------------------
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 1,390 3,200
======================================================================================== =======================================
United States ($ Millions) 403 734 505 484 2,126 570 936 1,096 2,602
- ---------------------------------------------------------------------------------------- ---------------------------------------
International ($ Millions) 61 84 203 269 617 130 174 294 598
- ---------------------------------------------------------------------------------------- ---------------------------------------
Market Indicators
U.S. East Coast Crack Spread ($/bbl) 6.87 9.14 7.00 5.73 7.19 6.40 8.80 14.81 10.00
U.S. Gulf Coast Crack Spread ($/bbl) 6.36 9.17 6.33 4.09 6.49 6.37 9.63 17.42 11.14
U.S. Group Central Crack Spread ($/bbl) 6.91 11.65 8.09 5.52 8.04 7.92 11.51 17.06 12.16
U.S. West Coast Crack Spread ($/bbl) 16.10 24.13 17.92 17.25 18.85 19.61 22.20 26.61 22.81
U.S. Weighted 3:2:1 Crack Spread ($/bbl) 8.39 12.60 9.10 7.24 9.33 9.24 12.35 18.51 13.37
NW Europe Crack Spread ($/bbl) 7.78 10.43 11.76 15.24 11.30 11.14 15.09 16.53 14.25
Singapore 3:2:1 Crack Spread ($/bbl) 10.33 9.48 13.11 17.22 12.54 13.23 13.95 16.70 14.63
U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.69 1.83 1.50 1.97 1.50 0.16 2.20 0.42 0.92
- ---------------------------------------------------------------------------------------- ---------------------------------------
Realized Margins
Refining Margin ($/bbl)
U.S. 7.12 9.88 8.84 8.38 8.56 10.11 11.23 14.61 12.01
International* 4.51 6.57 8.36 10.03 7.56 8.26 8.79 10.44 9.19
- ---------------------------------------------------------------------------------------- ---------------------------------------
Marketing Margin ($/bbl)
U.S. 1.08 1.49 1.15 1.85 1.39 0.46 2.01 0.18 0.87
International 6.50 8.20 7.69 8.13 7.66 5.61 8.56 6.80 7.02
- ---------------------------------------------------------------------------------------- ---------------------------------------
* 2004 and first-quarter 2005 amounts restated to include equity affiliates.
DD&A ($ Millions) 186 172 202 212 772 194 197 197 588
- ---------------------------------------------------------------------------------------- ---------------------------------------
Turnaround Expense ($ Millions) 59 78 57 73 267 108 106 53 267
- ---------------------------------------------------------------------------------------- ---------------------------------------
Eastern U.S.
Crude Oil Charge Input (MB/D) 413 375 368 346 375 403 414 409 409
Total Charge Input (MB/D) 440 421 415 407 421 449 454 456 453
Crude Oil Capacity Utilization (%) 96% 87% 87% 82% 88% 95% 98% 97% 97%
Clean Product Yield (%) 87% 84% 87% 90% 87% 92% 88% 89% 90%
- ---------------------------------------------------------------------------------------- ---------------------------------------
U.S. Gulf Coast
Crude Oil Charge Input (MB/D) 699 709 617 689 678 659 715 596 657
Total Charge Input (MB/D) 774 789 717 779 765 733 835 674 746
Crude Oil Capacity Utilization (%) 97% 99% 88% 98% 96% 92% 100% 83% 92%
Clean Product Yield (%) 79% 75% 78% 82% 78% 73% 79% 80% 77%
- ---------------------------------------------------------------------------------------- ---------------------------------------
Central U.S.
Crude Oil Charge Input (MB/D) 601 638 634 583 614 538 594 620 584
Total Charge Input (MB/D) 636 673 669 614 648 577 625 653 619
Crude Oil Capacity Utilization (%) 96% 102% 99% 91% 97% 84% 93% 97% 91%
Clean Product Yield (%) 83% 83% 85% 84% 84% 86% 84% 85% 85%
- ---------------------------------------------------------------------------------------- ---------------------------------------
Western U.S.
Crude Oil Charge Input (MB/D) 392 397 392 387 392 357 410 415 394
Total Charge Input (MB/D) 409 419 409 409 412 382 431 439 418
Crude Oil Capacity Utilization (%) 100% 101% 99% 98% 99% 90% 101% 102% 98%
Clean Product Yield (%) 81% 81% 82% 83% 82% 80% 82% 79% 80%
- ---------------------------------------------------------------------------------------- ---------------------------------------
TOTAL UNITED STATES
Crude Oil Charge Input (MB/D) 2,105 2,119 2,011 2,005 2,059 1,957 2,133 2,040 2,044
Total Charge Input (MB/D) 2,259 2,302 2,210 2,209 2,246 2,141 2,345 2,222 2,236
Crude Oil Capacity Utilization (%) 97% 98% 93% 93% 95% 90% 98% 93% 94%
Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 83% 83% 83%
- ---------------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 1,059 1,043 1,060 1,072 1,059 968 1,071 1,030 1,023
Distillates 604 591 574 619 597 599 655 640 631
Aviation Fuel 167 177 164 158 167 166 174 153 164
Other 415 489 400 383 422 414 449 400 420
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 2,245 2,300 2,198 2,232 2,245 2,147 2,349 2,223 2,238
======================================================================================== =======================================
Petroleum Products Sales (MB/D)
Gasoline 1,315 1,328 1,366 1,415 1,356 1,302 1,426 1,397 1,376
Distillates 570 538 544 562 553 642 680 725 683
Aviation Fuel 178 191 200 195 191 198 214 203 205
Other 517 573 553 613 564 461 566 526 518
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 2,580 2,630 2,663 2,785 2,664 2,603 2,886 2,851 2,782
======================================================================================== =======================================
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) 289 197 291 298 269 294 259 289 280
Total Charge Input (MB/D) 299 216 300 308 280 307 266 305 293
Crude Oil Capacity Utilization (%) 94% 64% 100% 102% 90% 101% 89% 99% 96%
Clean Product Yield (%) 84% 81% 83% 81% 82% 79% 76% 82% 79%
- ---------------------------------------------------------------------------------------- ---------------------------------------
International - Equity Affiliates - Net Share*
Crude Oil Charge Input (MB/D) 120 112 134 140 127 134 143 142 140
Total Charge Input (MB/D) 121 113 138 145 130 137 147 145 143
Crude Oil Capacity Utilization (%) 87% 81% 99% 103% 92% 98% 105% 105% 103%
Clean Product Yield (%) 82% 83% 81% 81% 82% 83% 82% 80% 81%
- ---------------------------------------------------------------------------------------- ---------------------------------------
TOTAL INTERNATIONAL
Crude Oil Charge Input (MB/D) 409 309 425 438 396 428 402 431 420
Total Charge Input (MB/D) 420 329 438 453 410 444 413 450 436
Crude Oil Capacity Utilization (%) 92% 69% 99% 102% 91% 100% 94% 101% 98%
Clean Product Yield (%) 84% 82% 82% 81% 82% 80% 78% 81% 80%
- ---------------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 124 109 138 144 129 141 115 143 133
Distillates 181 136 190 190 174 186 178 191 185
Aviation Fuel 24 16 22 25 22 21 21 24 22
Other 81 57 89 94 80 95 96 90 94
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 410 318 439 453 405 443 410 448 434
======================================================================================== =======================================
Petroleum Products Sales (MB/D)
Gasoline 185 180 173 180 180 185 176 178 180
Distillates 228 184 207 222 210 221 212 216 216
Aviation Fuel 6 9 10 8 8 7 10 12 10
Other 82 67 82 83 79 82 79 64 75
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 501 440 472 493 477 495 477 470 481
======================================================================================== =======================================
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 2,471 2,464
Total Charge Input (MB/D) 2,679 2,631 2,648 2,662 2,656 2,585 2,758 2,672 2,672
Crude Oil Capacity Utilization (%) 96% 93% 94% 94% 94% 92% 97% 95% 95%
Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 82% 83% 82%
- ---------------------------------------------------------------------------------------- ---------------------------------------
Refined Products Production (MB/D)
Gasoline 1,183 1,152 1,198 1,216 1,188 1,109 1,186 1,173 1,156
Distillates 785 727 764 809 771 785 833 831 816
Aviation Fuel 191 193 186 183 189 187 195 177 186
Other 496 546 489 477 502 509 545 490 514
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 2,655 2,618 2,637 2,685 2,650 2,590 2,759 2,671 2,672
======================================================================================== =======================================
Petroleum Products Sales (MB/D)
Gasoline 1,500 1,508 1,539 1,595 1,536 1,487 1,602 1,575 1,556
Distillates 798 722 751 784 763 863 892 941 899
Aviation Fuel 184 200 210 203 199 205 224 215 215
Other 599 640 635 696 643 543 645 590 593
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 3,081 3,070 3,135 3,278 3,141 3,098 3,363 3,321 3,263
==================================================================================================================================
* 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 74 110 148 267 525
======================================================================================== =======================================
Upstream
Production*
Net crude oil production (MB/D) - - - 150 38 190 215 253 220
Net natural gas production (MMCF/D) - - - 51 13 67 50 79 65
BOE Total (MBOE/D) - - - 159 40 201 223 266 231
- ----------------------------------------------------------------------------------------------------------------------------------
* Represents our estimated net share of LUKOIL's production.
Industry Prices
Crude Oil ($/bbl)
Urals crude (CIF Mediterranean) - - - 38.82 38.82 43.21 48.49 57.39 49.81
- ---------------------------------------------------------------------------------------- ---------------------------------------
Downstream
Refinery Throughput*
Crude Processed (MB/D) - - - 77 19 92 102 138 110
- ---------------------------------------------------------------------------------------- ---------------------------------------
* Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM
2004 2005
----------------------------------------- ---------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ---------------------------------------
Midstream Net Income ($ Millions) 55 42 38 100 235 385 68 88 541
======================================================================================== =======================================
U.S. Equity Affiliate ($ Millions)* 33 33 26 51 143 359 51 76 486
- ---------------------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States 54 24 28 23 32 23 21 23 22
International 47 33 49 49 45 53 44 5 34
Equity Affiliates
United States* 109 112 111 113 111 110 112 171 131
International 6 5 6 7 6 6 6 6 6
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 216 174 194 192 194 192 183 205 193
======================================================================================== =======================================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS),
through June 30, 2005, and 50 percent interest beginning in July 2005.
Natural Gas Liquids Fractionated (MB/D)
United States* 158 144 145 140 147 149 131 123 135
International 63 43 62 62 58 64 55 15 44
- ---------------------------------------------------------------------------------------- ---------------------------------------
Total 221 187 207 202 205 213 186 138 179
======================================================================================== =======================================
* Excludes DEFS.
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 25.68 26.42 31.03 34.40 29.38 31.95 32.49 39.60 34.68
DEFS 24.81 25.61 30.27 33.69 28.60 30.61 31.33 38.31 33.42
- ---------------------------------------------------------------------------------------- ---------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway market hubs
that are weighted by natural gas liquids component and location mix.
DD&A ($ Millions) 13 9 11 10 43 9 8 7 24
- ---------------------------------------------------------------------------------------- ---------------------------------------
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 13 209
======================================================================================== =======================================
Industry Margins (Cents/Lb)*
Ethylene industry cash margin 9.38 10.70 8.27 12.22 10.14 18.11 12.76 8.78 13.22
HDPE industry contract sales margin 9.43 9.21 9.23 11.68 9.89 12.09 12.01 8.16 10.76
Styrene industry contract sales margin 13.06 13.33 13.73 13.40 13.38 13.91 13.63 12.44 13.33
- ---------------------------------------------------------------------------------------- ---------------------------------------
* 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) (5) (11)
Gas-to-Liquids (9) (7) (9) (8) (33) (7) (7) (4) (18)
Power (4) (16) (8) (3) (31) 2 9 17 28
Other (5) (2) (7) (6) (20) (1) (6) (8) (15)
- --------------------------------------------------------------------------------------- ---------------------------------------
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) (246) (613)
======================================================================================= =======================================
Detail of Net Income (Loss) ($ Millions)
Net interest expense (113) (143) (149) (109) (514) (101) (84) (123) (308)
Corporate overhead (48) (52) (51) (61) (212) (58) (46) (64) (168)
Discontinued operations 13 62 (5) (48) 22 (11) 7 (4) (8)
Merger-related costs (14) - - - (14) - - - -
Accounting change - - - - - - - - -
Other (15) (23) (9) (7) (54) (25) (49) (55) (129)
- --------------------------------------------------------------------------------------- ---------------------------------------
Total (177) (156) (214) (225) (772) (195) (172) (246) (613)
======================================================================================= =======================================
Before-Tax Net Interest Expense ($ Millions)
Interest expense (260) (263) (222) (231) (976) (226) (219) (223) (668)
Capitalized interest 115 104 121 90 430 88 91 102 281
Interest revenue 16 12 8 11 47 25 24 28 77
Receivables monetization related (1) (1) 3 1 2 (1) - - (1)
Premium on early debt retirement - - (58) - (58) (9) - (50) (59)
- --------------------------------------------------------------------------------------- ---------------------------------------
(130) (148) (148) (129) (555) (123) (104) (143) (370)
======================================================================================= =======================================
Debt
Total Debt ($ Millions) 17,109 15,619 15,486 15,002 15,002 14,012 14,013 13,497 13,497
Debt-to-Capital Ratio 32% 29% 28% 26% 26% 23% 22% 21% 21%
- --------------------------------------------------------------------------------------- ---------------------------------------
Page 11 of 11