UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 25, 2006
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 001-32395 01-0562944
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
600 North Dairy Ashford
Houston, Texas 77079
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (281) 293-1000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On January 25, 2006, ConocoPhillips issued a press release announcing the
company's financial and operating results for the quarter ended December 31,
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 January 25, 2006.
99.2 -- Financial and operational tables.
99.3 -- Supplemental financial information.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONOCOPHILLIPS
/s/ Rand C. Berney
-------------------------------------------
Rand C. Berney
Vice President and Controller
January 25, 2006
3
EXHIBIT INDEX
Exhibit
No. Description
- --- -----------
99.1 Press release issued by ConocoPhillips on January 25, 2006.
99.2 Financial and operational tables.
99.3 Supplemental financial information.
4
Exhibit 99.1
ConocoPhillips Reports Fourth-Quarter
Net Income of $3.7 Billion; Income from continuing operations of $3.8
billion, or $2.69 per diluted share; Effectively reinvested 86 percent
of 2005 net income
HOUSTON--(BUSINESS WIRE)--Jan. 25, 2006--ConocoPhillips
(NYSE:COP):
Earnings at a glance
Fourth Quarter Twelve Months
- ----------------------------------------------------------------------
2005 2004 2005 2004
- ----------------------------------------------------------------------
Income from continuing
operations $3,782 2,480 $13,640 8,107
million million million million
Income (loss) from
discontinued operations $ (15) (48) $ (23) 22
Cumulative effect of changes
in accounting principles $ (88) - $ (88) -
Net income $3,679 2,432 $13,529 8,129
- ----------------------------------------------------------------------
Diluted income per share
Income from continuing
operations(a) $2.69 1.76 $9.63 5.79
Net income(a) $2.61 1.72 $9.55 5.80
- ----------------------------------------------------------------------
Revenues $52.2 40.1 $183.4 136.9
billion billion billion 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 fourth-quarter net income
of $3,679 million, or $2.61 per share, compared to $2,432 million, or
$1.72 per share, for the same quarter in 2004. Total revenues were
$52.2 billion, versus $40.1 billion a year ago.
Income from continuing operations for the fourth quarter was
$3,782 million, or $2.69 per share, compared to $2,480 million, or
$1.76 per share, for the same period a year ago.
"During the fourth quarter, our Gulf Coast operations continued to
be impacted due to effects from the hurricanes. Otherwise, our
operations ran well," said Jim Mulva, chairman and chief executive
officer. "We produced 1.88 million BOE per day, including 1.59 million
BOE per day from our Exploration and Production segment and an
estimated 0.29 million BOE per day from our LUKOIL Investment segment.
Our worldwide refining crude oil capacity utilization rate was 88
percent, as the Alliance refinery remained shut down due to Hurricane
Katrina and the Lake Charles refinery returned to normal operations
following Hurricane Rita.
"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 19 percent. During the
quarter, we generated $4.7 billion in cash from operations, spent $3.0
billion in capital projects and investments, paid $429 million in
dividends, reduced debt by $981 million, and repurchased $759 million
of ConocoPhillips common stock.
"For the year, we spent $11,620 million on capital expenditures
and investments, which effectively reflects an 86 percent reinvestment
of 2005 net income. This represents a significant reinvestment into
the growth and development of our businesses. In addition, we paid
$1,639 million in dividends, reduced debt by $2,486 million and
repurchased $1,924 million of ConocoPhillips common stock."
For the twelve months of 2005, net income was $13,529 million, or
$9.55 per share, versus $8,129 million, or $5.80 per share, for 2004.
Income from continuing operations was $13,640 million, or $9.63 per
share, compared with $8,107 million, or $5.79 per share, for the same
period a year ago. Total revenues were $183.4 billion, versus $136.9
billion a year ago.
The results for ConocoPhillips' business segments follow.
Exploration & Production (E&P)
Fourth-quarter financial results: E&P income from continuing
operations was $2,430 million, up from $2,288 million in the third
quarter of 2005 and $1,671 million in the fourth quarter of 2004. The
increase from the third quarter of 2005 primarily was the result of
higher realized natural gas prices and higher volumes, partially
offset by lower realized crude oil prices; higher exploration
expenses; higher depreciation, depletion and amortization; and higher
operating expenses. Improved results from the fourth quarter of 2004
primarily were due to higher crude oil and natural gas prices,
partially offset by the negative impact of mark-to-market valuation on
certain natural gas contracts in the United Kingdom; higher
depreciation, depletion and amortization; higher exploration expenses;
and the impact of higher commodity prices on production taxes.
As expected, ConocoPhillips' E&P daily production, including
Canadian Syncrude and excluding LUKOIL, averaged 1.59 million barrels
of oil equivalent (BOE) per day, up from 1.52 million BOE per day in
the prior quarter. Compared with the previous quarter, output from the
United Kingdom and Alaska was approximately 66,000 BOE per day
greater, primarily due to less maintenance and seasonality. Production
in the fourth quarter of 2005 was relatively flat compared to the
fourth quarter of 2004.
Twelve-months financial results: E&P income from continuing
operations in 2005 was $8,434 million, up from $5,702 million in 2004.
This primarily was due to higher realized prices, partially offset by
higher operating expenses; higher depreciation, depletion and
amortization; the negative impact of mark-to-market valuation on
certain natural gas contracts in the United Kingdom; and reduced
income tax benefits.
Midstream
Fourth-quarter financial results: Midstream income from continuing
operations was $147 million, up from $88 million in the prior quarter
and up from $100 million in the fourth quarter of 2004. The primary
reasons for the improvement over the previous quarter were higher
natural gas liquids prices and the associated impact on inventory.
Operating expenses also were lower for the quarter. The increase over
the fourth quarter of 2004 primarily was due to higher natural gas
liquids prices and increased ownership in DEFS, partially offset by
the impact of the disposition of the Canadian Empress system.
Twelve-months financial results: Midstream income from continuing
operations in 2005 increased to $688 million, from $235 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
and higher natural gas prices. This increase was partially offset by
the impact of the disposition of the Canadian Empress system.
Refining and Marketing (R&M)
Fourth-quarter financial results: R&M income from continuing
operations was $1,056 million, down from $1,390 million in the
previous quarter and up from $753 million in the fourth quarter of
2004. The decrease from the third quarter of 2005 primarily was the
result of lower worldwide refining margins; continued
hurricane-related volume and cost impacts; higher utility and
turnaround costs; and increased taxes, partially offset by higher
worldwide marketing results. The increase from the fourth quarter of
2004 primarily was a result of improved refining margins and marketing
results, partially offset by ongoing hurricane-related volume and cost
impacts, as well as higher utility costs.
Domestic fourth-quarter refining market crack spreads decreased
relative to the third quarter, moderated by the company's refining
configuration, which is more heavily weighted toward distillates. U.S.
refineries operated at 85 percent of crude oil capacity utilization as
hurricane-related downtime impaired fourth-quarter throughputs.
Excluding the Alliance and Lake Charles refineries in Louisiana, the
company's domestic crude oil capacity utilization rate improved 2
percent. Compared with the prior quarter, U.S. marketing results
improved. U.S. marketing margins for the quarter were slightly higher
than pre-hurricane levels.
International fourth-quarter realized refining margins were lower,
while crude oil capacity utilization was slightly improved from the
prior quarter.
Worldwide, R&M's refining crude oil capacity utilization rate
averaged 88 percent, compared with 95 percent in the previous quarter
and 94 percent in the fourth quarter of 2004. Before-tax turnaround
costs were $86 million in the fourth quarter of 2005, versus $53
million in the previous quarter and $73 million in the fourth quarter
of 2004. Fourth-quarter hurricane-related maintenance expenditures
were $90 million, before-tax, reduced for accrued insurance
recoveries.
The 247,000-barrel-per-day Alliance refinery has restored partial
operations, with full operations expected around the end of the first
quarter.
Twelve-months financial results: R&M income from continuing
operations in 2005 increased to $4,256 million, compared with $2,743
million in 2004. The increased earnings were driven by higher
worldwide refining margins, partially offset by hurricane-related
volume and cost impacts, higher utility costs, and foreign exchange
losses.
LUKOIL Investment
Fourth-quarter financial results: Income from continuing
operations in the fourth quarter of 2005 was $189 million, down from
$267 million in the prior quarter. This represents ConocoPhillips'
estimate of the company's 15.5 percent weighted average equity share
of LUKOIL's income for the fourth quarter, based on market indicators
and historical production trends for LUKOIL. The decrease from the
prior quarter was attributable to lower realized price estimates,
partially offset by an increased equity ownership position. At the end
of the fourth quarter, the company's equity ownership in LUKOIL was
16.1 percent.
For the fourth quarter of 2005, ConocoPhillips estimates its
equity share of LUKOIL production was 293,000 BOE per day and its
share of LUKOIL daily refining crude oil throughput was 156,000
barrels per day.
Chemicals
Fourth-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 $114 million, compared with $13 million in the third
quarter of 2005 and $83 million in the fourth quarter of 2004.
Improved results in the fourth quarter largely were due to higher
margins, primarily from olefins and polyolefins, as well as recovery
from hurricane-related impacts in the third quarter. All CPChem
hurricane-affected facilities resumed normal operations during the
quarter, with all but two of the facilities fully operational in the
first week of October. The increase from the fourth quarter of 2004
also reflects higher margins, mainly from olefins and polyolefins,
partially offset by higher utility costs and higher maintenance costs.
Twelve-months financial results: During 2005, the Chemicals
segment had income from continuing operations of $323 million,
compared with $249 million for the same period a year ago. The
improvement primarily was due to higher margins, primarily from
olefins and polyolefins, partially offset by higher utility costs,
higher maintenance costs and lower overall volumes.
Emerging Businesses
The Emerging Businesses segment incurred a loss from continuing
operations of $4 million in the fourth quarter of 2005, compared with
slightly positive results in the third quarter of 2005 and a loss of
$24 million in the fourth quarter of 2004.
Corporate and Other
Fourth-quarter after-tax Corporate expenses from continuing
operations were $150 million, compared with $242 million in the
previous quarter and $177 million in the fourth quarter of 2004. The
decreased charges in the fourth quarter primarily were driven by
reduced benefit-related charges, lower net interest expense and
positive foreign exchange impacts. The decrease from the fourth
quarter of 2004 primarily was the result of reduced benefit-related
charges, partially offset by negative foreign exchange impacts.
Total debt at the end of the fourth quarter was $12.5 billion,
down approximately $1.0 billion from the previous quarter and $2.5
billion below the year-end 2004 level. At the end of the fourth
quarter, the company's debt-to-capital ratio was 19 percent, down from
21 percent at the end of the third quarter.
The company's tax provision for the fourth quarter of 2005 was
$2.8 billion, resulting in an effective tax rate of 42.9 percent. This
is compared with 42.0 percent in the previous quarter and fourth
quarter of 2004.
Discontinued Operations
Fourth-quarter financial results: Fourth-quarter losses from
discontinued operations were $15 million, compared with losses of $4
million in the third quarter and $48 million in the fourth quarter of
2004.
Twelve-months financial results: During 2005, discontinued
operations had a loss of $23 million, compared with income of $22
million for the same period a year ago. The decrease is attributable
primarily to 2004 asset sales.
Cumulative Effect of Change in Accounting Principle
Net income in the fourth quarter of 2005 includes a $88 million
charge related to the cumulative effect of a change in accounting
principle associated with the adoption of Financial Accounting
Standards Board (FASB) Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations, an interpretation of FASB
Statement No. 143."
Outlook
Mr. Mulva concluded:
"We had another good quarter, which contributed to a solid year in
terms of operating performance. This performance, combined with
favorable commodity prices and margins, enabled us to achieve strong
financial results.
"We are very pleased to have reached an agreement with Burlington
Resources and are confident in the opportunities it provides our
respective companies and shareholders. Integration teams composed of
employees from both companies currently are working transition
details, and we anticipate completing the transaction in the first
half of 2006. With this transaction, ConocoPhillips will expand its
portfolio of high-quality, low-risk, long-lived gas reserves and
become a leading producer of natural gas in North America.
Additionally, the transaction enhances ConocoPhillips' North American
natural gas supply position in projects involving conventional and
unconventional resources, as well as long-term LNG and Arctic gas
projects.
"We also are pleased to resume our productive partnership with the
people and state of Libya. This relationship provides a strong basis
for us to invest in our aligned goals for increased reserves and
production, and in the training and development of our Libyan work
force.
"In December, we announced our participation in the Qatargas 3 LNG
project. When fully operational, this 7.8-million-gross-tons-per-annum
facility will help us meet the growing global energy demand. This
project comprises upstream production facilities to produce
approximately 1.4 billion gross cubic feet per day of natural gas,
containing an average of approximately 70,000 gross barrels per day of
liquids.
"The Darwin LNG plant has commenced production and is on target
for its initial LNG delivery in the first quarter of 2006. This
facility is anticipated to meet gross contracted sales of
approximately 3 million tons of LNG per year for a period of 17 years.
"In downstream, we expect worldwide utilization rates in the first
quarter to be consistent with the previous quarter due to scheduled
turnaround activity. Our incremental U.S. investment program of $4
billion to $5 billion over the next five to six years will result in
expanded capacity and increased refining flexibility. In addition, the
recently announced acquisition of the Wilhelmshaven refinery in
Germany, which is anticipated to close in the first quarter, provides
a unique opportunity to further enhance our strategic position in
Europe and strengthens the company's ability to supply products to key
export markets.
"We continue to grow and develop the business lines of our company
with plans to invest approximately $14 billion in 2006, including the
investment necessary to bring our ownership in LUKOIL to 20 percent.
We have positioned ourselves to provide long-term value for our
shareholders."
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had
approximately 35,600 employees, $107 billion of assets, and $183
billion of revenues as of Dec. 31, 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 including
statements as to the expected benefits of the Burlington Resources
acquisition such as efficiencies, cost savings, market profile and
financial strength, and the competitive ability and position of the
combined company, and other statements identified by words such as
"estimates," "expects," "projects," "plans," and similar statements,
such as "The 247,000-barrel-per-day Alliance refinery has restored
partial operations, with full operations expected around the end of
the first quarter"; "we anticipate completing the (Burlington
Resources) transaction in the first half of 2006"; "when fully
operational, this 7.8-million-gross-tons-per-annum facility will help
us meet the growing global energy demand"; "This project comprises
upstream production facilities to produce approximately 1.4 billion
gross cubic feet per day of natural gas, containing an average of
approximately 70,000 gross barrels per day of liquids"; "The Darwin
LNG plant has commenced production and is on target for its initial
LNG delivery in the first quarter of 2006"; "This facility is
anticipated to meet gross contracted sales of approximately 3 million
tons of LNG per year for a period of 17 years"; "In downstream, we
expect worldwide utilization rates in the first quarter to be
consistent with the previous quarter due to scheduled turnaround
activity"; "the recently announced acquisition of the Wilhelmshaven
refinery in Germany, which is anticipated to close in the first
quarter"; "We continue to grow and develop the business lines of our
company with plans to invest approximately $14 billion in 2006,
including the investment necessary to bring our ownership in LUKOIL to
20 percent", 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.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
ConocoPhillips will file a Form S-4, Burlington Resources will
file a proxy statement and both companies will file other relevant
documents concerning the proposed merger transaction with the
Securities and Exchange Commission (SEC). INVESTORS ARE URGED TO READ
THE FORM S-4 AND PROXY STATEMENT WHEN THEY BECOME AVAILABLE AND ANY
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. You will be able to obtain the documents free
of charge at the Web site maintained by the SEC at www.sec.gov. In
addition, you may obtain documents filed with the SEC by
ConocoPhillips free of charge by contacting ConocoPhillips Shareholder
Relations Department at 281-293-6800, P.O. Box 2197, Houston, Texas,
77079-2197. You may obtain documents filed with the SEC by Burlington
Resources free of charge by contacting Burlington Resources Investor
Relations Department at 800-262-3456, 717 Texas Avenue, Suite 2100,
Houston, Texas 77002, e-mail: IR@br-inc.com.
ConocoPhillips, Burlington Resources and their respective
directors and executive officers, may be deemed to be participants in
the solicitation of proxies from Burlington Resources' stockholders in
connection with the merger. Information about the directors and
executive officers of ConocoPhillips and their ownership of
ConocoPhillips stock will be set forth in the proxy statement for
ConocoPhillips' 2006 Annual Shareholders Meeting. Information about
the directors and executive officers of Burlington Resources and their
ownership of Burlington Resources stock is set forth in the proxy
statement for Burlington Resources' 2005 Annual Meeting of
Stockholders. Investors may obtain additional information regarding
the interests of such participants by reading the Form S-4 and proxy
statement for the merger when they become available.
Investors should read the Form S-4 and proxy statement carefully
when they become available before making any voting or investment
decisions.
CONTACT: ConocoPhillips, Houston
Laura Hopkins, 281-293-6030 (media)
or
Gary Russell, 212-207-1996 (investors)
Exhibit 99.2
Preliminary
FINANCIAL HIGHLIGHTS
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2005 2004 2005 2004
Revenues
Sales and other operating revenues* $ 51,258 39,385 179,442 135,076
Equity in earnings of affiliates 831 555 3,457 1,535
Other income 84 132 465 305
----------- ----------- ----------- -----------
52,173 40,072 183,364 136,916
----------- ----------- ----------- -----------
Costs and expenses
Purchased crude oil, natural gas and products 36,322 26,984 124,925 90,182
Production and operating expenses 2,481 2,060 8,562 7,372
Selling, general and administrative expenses 557 615 2,247 2,128
Exploration expenses 229 192 661 703
Depreciation, depletion and amortization 1,178 1,030 4,253 3,798
Property impairments 11 101 42 164
Taxes other than income taxes* 4,598 4,609 18,356 17,487
Accretion on discounted liabilities 58 45 193 171
Interest and debt expense 110 141 497 546
Foreign currency transaction losses (gains) (4) 17 48 (36)
Minority interests 12 3 33 32
----------- ----------- ----------- -----------
45,552 35,797 159,817 122,547
----------- ----------- ----------- -----------
Income from continuing operations before income
taxes 6,621 4,275 23,547 14,369
Provision for income taxes 2,839 1,795 9,907 6,262
----------- ----------- ----------- -----------
Income from continuing operations 3,782 2,480 13,640 8,107
Income (loss) from discontinued operations (15) (48) (23) 22
----------- ----------- ----------- -----------
Income before cumulative effect of changes in
acccounting principles 3,767 2,432 13,617 8,129
Cumulative effect of changes in accounting principles (88) - (88) -
----------- ----------- ----------- -----------
Net Income $ 3,679 2,432 13,529 8,129
=========== =========== =========== ===========
Income (loss) per share of common stock (dollars)**
Basic
Continuing operations $ 2.73 1.78 9.79 5.87
Discontinued operations (0.01) (0.03) (0.02) 0.01
----------- ----------- ----------- -----------
Before cumulative effect of changes in acccounting
principles 2.72 1.75 9.77 5.88
Cumulative effect of changes in accounting
principles (0.06) - (0.06) -
----------- ----------- ----------- -----------
Net income $ 2.66 1.75 9.71 5.88
=========== =========== =========== ===========
Diluted
Continuing operations $ 2.69 1.76 9.63 5.79
Discontinued operations (0.01) (0.04) (0.02) 0.01
----------- ----------- ----------- -----------
Before cumulative effect of changes in acccounting
principles 2.68 1.72 9.61 5.80
Cumulative effect of changes in accounting
principles (0.07) - (0.06) -
----------- ----------- ----------- -----------
Net income $ 2.61 1.72 9.55 5.80
=========== =========== =========== ===========
Average common shares outstanding (in thousands)**
Basic 1,385,034 1,390,916 1,393,371 1,381,568
Diluted 1,407,375 1,412,668 1,417,028 1,401,300
*Includes excise, value added and other similar taxes
on petroleum products sales: $ 4,252 4,284 17,037 16,357
** 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
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2005 2004 2005 2004
INCOME (LOSS) FROM CONTINUING OPERATIONS
E&P
United States $ 1,325 935 4,290 2,942
International 1,105 736 4,144 2,760
----------- ----------- ----------- -----------
Total E&P 2,430 1,671 8,434 5,702
----------- ----------- ----------- -----------
Midstream 147 100 688 235
----------- ----------- ----------- -----------
R&M
United States 805 484 3,407 2,126
International 251 269 849 617
----------- ----------- ----------- -----------
Total R&M 1,056 753 4,256 2,743
----------- ----------- ----------- -----------
LUKOIL Investment 189 74 714 74
Chemicals 114 83 323 249
Emerging Businesses (4) (24) (20) (102)
Corporate and other (150) (177) (755) (794)
----------- ----------- ----------- -----------
Consolidated $ 3,782 2,480 13,640 8,107
=========== =========== =========== ===========
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
E&P
United States $ (2) - $ (2) -
International (2) - (2) -
----------- ----------- ----------- -----------
Total E&P (4) - (4) -
----------- ----------- ----------- -----------
Midstream - - - -
----------- ----------- ----------- -----------
R&M
United States (78) - (78) -
International (5) - (5) -
----------- ----------- ----------- -----------
Total R&M (83) - (83) -
----------- ----------- ----------- -----------
LUKOIL Investment - - - -
Chemicals - - - -
Emerging Businesses (1) - (1) -
Corporate and other - - - -
----------- ----------- ----------- -----------
Consolidated $ (88) - $ (88) -
=========== =========== =========== ===========
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Corporate and other (15) (48) (23) 22
SUMMARY OF NET INCOME (LOSS)
E&P
United States $ 1,323 935 4,288 2,942
International 1,103 736 4,142 2,760
----------- ----------- ----------- -----------
Total E&P 2,426 1,671 8,430 5,702
----------- ----------- ----------- -----------
Midstream 147 100 688 235
----------- ----------- ----------- -----------
R&M
United States 727 484 3,329 2,126
International 246 269 844 617
----------- ----------- ----------- -----------
Total R&M 973 753 4,173 2,743
----------- ----------- ----------- -----------
LUKOIL Investment 189 74 714 74
Chemicals 114 83 323 249
Emerging Businesses (5) (24) (21) (102)
Corporate and other (165) (225) (778) (772)
----------- ----------- ----------- -----------
Net income $ 3,679 2,432 13,529 8,129
=========== =========== =========== ===========
2
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended Twelve Months Ended
December 31 December 31
2005 2004 2005 2004
INCOME FROM CONTINUING OPERATIONS
Effective tax rate % 42.9 % 42.0 42.1 43.6
Millions of Dollars
FOREIGN CURRENCY GAINS (LOSSES)
AFTER-TAX
E&P $ 1 (28) 7 (13)
Midstream - (1) 7 (1)
R&M (3) 11 (52) 12
LUKOIL Investment - - (1) -
Chemicals - - - -
Emerging Businesses (1) - (1) -
Corporate and other (15) 23 (42) 44
----------- ----------- ----------- -----------
$ (18) 5 (82) 42
=========== =========== =========== ===========
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $ 3,782 2,480 13,640 8,107
Depreciation, depletion and amortization 1,178 1,030 4,253 3,798
Property impairments 11 101 42 164
Dry hole costs and leasehold impairment 138 75 349 417
Accretion on discounted liabilities 58 45 193 171
Deferred income taxes 348 27 1,101 1,025
Undistributed equity earnings (92) (236) (1,774) (777)
Net (gain) loss on asset dispositions (14) (34) (278) (116)
Other (140) (295) (139) (190)
Working capital changes (595) 10 246 (601)
----------- ----------- ----------- -----------
Net cash provided by continuing operations 4,674 3,203 17,633 11,998
Net cash provided by (used in) discontinued
operations 1 (6) (5) (39)
----------- ----------- ----------- -----------
Net cash provided by operating activities $ 4,675 3,197 17,628 11,959
=========== =========== =========== ===========
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $ 416 368 1,637 1,314
International 1,250 1,184 5,047 3,935
----------- ----------- ----------- -----------
1,666 1,552 6,684 5,249
Midstream - 1 839 7
R&M 663 574 1,738 1,344
LUKOIL Investment 637 2,649 2,160 2,649
Chemicals - - - -
Emerging Businesses - 1 5 75
Corporate and other* 81 60 194 172
----------- ----------- ----------- -----------
$ 3,047 4,837 11,620 9,496
=========== =========== =========== ===========
*Excludes discontinued operations
OTHER
At December 31, 2005 At December 31, 2004
Total debt $ 12,516 15,002
Common stockholders' equity $ 52,731 42,723
3
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended Twelve Months Ended
December 31 December 31
2005 2004 2005 2004
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 291 313 294 298
Lower 48 54 50 59 51
----------- ----------- ----------- -----------
345 363 353 349
Norway 188 211 197 207
United Kingdom 62 66 60 64
Canada 22 24 23 25
China 23 17 23 25
Indonesia 13 18 15 15
Vietnam 37 33 29 33
Timor Sea 36 34 33 21
Other 51 55 53 58
----------- ----------- ----------- -----------
Total consolidated 777 821 786 797
Equity affiliates 116 103 121 108
----------- ----------- ----------- -----------
Total Worldwide 893 924 907 905
=========== =========== =========== ===========
Syncrude 20 20 19 21
=========== =========== =========== ===========
Natural gas liquids produced
United States
Alaska* 21 24 20 23
Lower 48 31 26 30 26
----------- ----------- ----------- -----------
52 50 50 49
Norway 11 9 9 8
Canada 10 11 10 10
Timor Sea 19 16 16 9
Other 7 6 6 8
----------- ----------- ----------- -----------
Total Worldwide 99 92 91 84
=========== =========== =========== ===========
* Includes reinjected volumes sold lease-to-lease. 13 13 9 13
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 172 163 169 165
Lower 48 1,264 1,214 1,212 1,223
----------- ----------- ----------- -----------
1,436 1,377 1,381 1,388
Norway 264 306 272 301
United Kingdom 851 852 751 818
Canada 430 442 425 433
Timor Sea 33 35 34 35
Indonesia 330 266 298 250
Vietnam 19 19 18 16
Other 105 59 84 71
----------- ----------- ----------- -----------
Total consolidated 3,468 3,356 3,263 3,312
Equity affiliates 3 4 7 5
----------- ----------- ----------- -----------
Total Worldwide 3,471 3,360 3,270 3,317
=========== =========== =========== ===========
* Represents quantities available for sale. Excludes gas equivalent of
NGL shown above.
Liquefied natural gas sales 118 107 117 105
LUKOIL Investment
Production (MBOE/D)* 293 159 246 40
Refinery crude oil throughput (MB/D)* 156 77 122 19
* Represents our estimated net share of LUKOIL.
4
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
2005 2004 2005 2004
E&P
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $ 57.61 44.37 52.24 38.47
Lower 48 46.62 42.30 45.24 36.95
Total U.S. 55.86 44.08 51.09 38.25
International 54.49 41.75 52.27 37.18
Total consolidated 55.06 42.79 51.74 37.65
Equity affiliates 38.90 26.55 37.79 24.18
Total Worldwide 53.05 40.96 49.87 36.06
Natural gas-lease (per MCF)
United States
Alaska 3.01 2.23 2.75 2.35
Lower 48 9.37 6.04 7.28 5.46
Total U.S. 9.17 5.92 7.12 5.33
International 7.19 4.63 5.78 4.14
Total consolidated 7.96 5.13 6.32 4.62
Equity affiliates 0.28 0.25 0.26 2.19
Total Worldwide 7.94 5.13 6.30 4.61
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 22 23 22 32
International - 49 25 45
Equity affiliates
United States* 172 113 142 111
International 6 7 6 6
----------- ----------- ----------- -----------
200 192 195 194
=========== =========== =========== ===========
* 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 $ 42.70 34.40 36.68 29.38
DEFS 41.84 33.69 35.52 28.60
** Prices are based on index prices from the Mont Belvieu and Conway market
hubs that are weighted by natural-gas-liquids component and location mix.
5
Three Months Ended Twelve Months Ended
December 31 December 31
2005 2004 2005 2004
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,182 2,160 2,180 2,164
Crude oil runs 1,853 2,005 1,996 2,059
Refinery production 2,037 2,232 2,186 2,245
International*
Crude oil capacity 428 428 428 437
Crude oil runs 435 438 424 396
Refinery production 458 453 439 405
U.S. Petroleum products outside sales
Gasoline 1,368 1,415 1,374 1,356
Distillates 653 562 675 553
Aviation fuels 189 195 201 191
Other products 521 613 519 564
----------- ----------- ----------- -----------
2,731 2,785 2,769 2,664
International 490 493 482 477
----------- ----------- ----------- -----------
3,221 3,278 3,251 3,141
=========== =========== =========== ===========
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $ 1.77 1.40 1.73 1.33
Automotive gasoline-retail 1.96 1.62 1.88 1.52
Distillates-wholesale 2.06 1.41 1.80 1.24
* 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
U.S. E&P 635 671 701 935 2,942 892 966 1,107 1,325 4,290
International E&P 622 683 719 736 2,760 895 963 1,181 1,105 4,144
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 2,288 2,430 8,434
- --------------------------------------------------------------------------- ---------------------------------------
Midstream 55 42 38 100 235 385 68 88 147 688
- --------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 403 734 505 484 2,126 570 936 1,096 805 3,407
International R&M 61 84 203 269 617 130 174 294 251 849
- --------------------------------------------------------------------------- ---------------------------------------
Total R&M 464 818 708 753 2,743 700 1,110 1,390 1,056 4,256
- --------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 110 148 267 189 714
Chemicals 39 46 81 83 249 133 63 13 114 323
Emerging Businesses (22) (29) (27) (24) (102) (8) (8) - (4) (20)
Corporate and Other (190) (218) (209) (177) (794) (184) (179) (242) (150) (755)
- --------------------------------------------------------------------------- ---------------------------------------
Consolidated 1,603 2,013 2,011 2,480 8,107 2,923 3,131 3,804 3,782 13,640
=========================================================================== =======================================
Cumulative Effect of Accounting Changes
U.S. E&P - - - - - - - - (2) (2)
International E&P - - - - - - - - (2) (2)
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P - - - - - - - - (4) (4)
- --------------------------------------------------------------------------- ---------------------------------------
Midstream - - - - - - - - - -
- --------------------------------------------------------------------------- ---------------------------------------
U.S. R&M - - - - - - - - (78) (78)
International R&M - - - - - - - - (5) (5)
- --------------------------------------------------------------------------- ---------------------------------------
Total R&M - - - - - - - - (83) (83)
- --------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - - - - - - - -
Chemicals - - - - - - - - - -
Emerging Businesses - - - - - - - - (1) (1)
Corporate and Other - - - - - - - - - -
- --------------------------------------------------------------------------- ---------------------------------------
Consolidated - - - - - - - - (88) (88)
=========================================================================== =======================================
Income (Loss) from Discontinued Operations
Corporate and Other 13 62 (5) (48) 22 (11) 7 (4) (15) (23)
=========================================================================== =======================================
Net Income (Loss)
U.S. E&P 635 671 701 935 2,942 892 966 1,107 1,323 4,288
International E&P 622 683 719 736 2,760 895 963 1,181 1,103 4,142
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P 1,257 1,354 1,420 1,671 5,702 1,787 1,929 2,288 2,426 8,430
- --------------------------------------------------------------------------- ---------------------------------------
Midstream 55 42 38 100 235 385 68 88 147 688
- --------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 403 734 505 484 2,126 570 936 1,096 727 3,329
International R&M 61 84 203 269 617 130 174 294 246 844
- --------------------------------------------------------------------------- ---------------------------------------
Total R&M 464 818 708 753 2,743 700 1,110 1,390 973 4,173
- --------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 110 148 267 189 714
Chemicals 39 46 81 83 249 133 63 13 114 323
Emerging Businesses (22) (29) (27) (24) (102) (8) (8) - (5) (21)
Corporate and Other (177) (156) (214) (225) (772) (195) (172) (246) (165) (778)
- --------------------------------------------------------------------------- ---------------------------------------
Consolidated 1,616 2,075 2,006 2,432 8,129 2,912 3,138 3,800 3,679 13,529
=========================================================================== =======================================
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 2,019 6,639
International E&P 1,410 1,360 1,654 1,684 6,108 2,020 2,152 2,567 2,550 9,289
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P 2,397 2,409 2,711 3,117 10,634 3,408 3,656 4,295 4,569 15,928
- --------------------------------------------------------------------------- ---------------------------------------
Midstream 86 66 62 158 372 449 107 138 208 902
- --------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 636 1,149 803 772 3,360 901 1,485 1,766 1,379 5,531
International R&M 79 111 268 356 814 160 203 368 330 1,061
- --------------------------------------------------------------------------- ---------------------------------------
Total R&M 715 1,260 1,071 1,128 4,174 1,061 1,688 2,134 1,709 6,592
- --------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment - - - 74 74 115 153 275 196 739
Chemicals 49 56 99 109 313 187 84 (3) 148 416
Emerging Businesses (34) (42) (44) (34) (154) (13) (13) (2) (10) (38)
Corporate and Other (249) (279) (239) (277) (1,044) (267) (243) (283) (199) (992)
- --------------------------------------------------------------------------- ---------------------------------------
Consolidated 2,964 3,470 3,660 4,275 14,369 4,940 5,432 6,554 6,621 23,547
=========================================================================== =======================================
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% 34.4% 35.4%
International E&P 55.9% 49.8% 56.5% 56.3% 54.8% 55.7% 55.3% 54.0% 56.7% 55.4%
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P 47.6% 43.8% 47.6% 46.4% 46.4% 47.6% 47.2% 46.7% 46.8% 47.0%
- --------------------------------------------------------------------------- ---------------------------------------
Midstream 36.0% 36.4% 38.7% 36.7% 36.8% 14.3% 36.4% 36.2% 29.3% 23.7%
- --------------------------------------------------------------------------- ---------------------------------------
U.S. R&M 36.6% 36.1% 37.1% 37.3% 36.7% 36.7% 37.0% 37.9% 41.6% 38.4%
International R&M 22.8% 24.3% 24.3% 24.4% 24.2% 18.8% 14.3% 20.1% 23.9% 20.0%
- --------------------------------------------------------------------------- ---------------------------------------
Total R&M 35.1% 35.1% 33.9% 33.2% 34.3% 34.0% 34.2% 34.9% 38.2% 35.4%
- --------------------------------------------------------------------------- ---------------------------------------
LUKOIL Investment n/a n/a n/a 0.0% 0.0% 4.3% 3.3% 2.9% 3.6% 3.4%
Chemicals 20.4% 17.9% 18.2% 23.9% 20.4% 28.9% 25.0% -- 23.0% 22.4%
Emerging Businesses 35.3% 31.0% 38.6% 29.4% 33.8% 38.5% 38.5% -- 60.0% 47.4%
Corporate and Other 23.7% 21.9% 12.6% 36.1% 23.9% 31.1% 26.3% 14.5% 24.6% 23.9%
- --------------------------------------------------------------------------- ---------------------------------------
Consolidated 45.9% 42.0% 45.1% 42.0% 43.6% 40.8% 42.4% 42.0% 42.9% 42.1%
=========================================================================== =======================================
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 adjustments - - - (17) (17) - (5) (4) (8) (17)
Pending claims and settlements - - - - - - 15 - (23) (8)
- --------------------------------------------------------------------------- ---------------------------------------
Total (3) - 22 2 21 90 10 (4) (31) 65
- --------------------------------------------------------------------------- ---------------------------------------
International E&P
Gain (loss) on asset sales 56 (13) - - 43 - 15 - - 15
Property impairments - - (1) (29) (30) - - - - -
Insurance premium adjustments - - - (17) (17) - (10) (12) (19) (41)
Canada tax law change - 31 - 41 72 - - - 38 38
Pending claims and settlements - - - - - - - - - -
- --------------------------------------------------------------------------- ---------------------------------------
Total 56 18 (1) (5) 68 - 5 (12) 19 12
- --------------------------------------------------------------------------- ---------------------------------------
Total E&P 53 18 21 (3) 89 90 15 (16) (12) 77
- --------------------------------------------------------------------------- ---------------------------------------
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 adjustments - - - (6) (6) - (7) (9) (14) (30)
Discontinuation of a marketing
incentive program - - - - - - - (16) - (16)
Hurricanes impact on maintenance &
repairs - - - - - - - - (57) (57)
Pending claims and settlements - - (34) - (34) - - - - -
- --------------------------------------------------------------------------- ---------------------------------------
Total (5) - (40) (34) (79) 31 (7) (25) (71) (72)
- --------------------------------------------------------------------------- ---------------------------------------
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) (71) (47)
- --------------------------------------------------------------------------- ---------------------------------------
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) (42) (92)
Other - - - - - - - - - -
- --------------------------------------------------------------------------- ---------------------------------------
Total (14) - (43) - (57) (8) - (42) (42) (92)
- --------------------------------------------------------------------------- ---------------------------------------
Total Company 22 8 (62) (37) (69) 413 26 (83) (125) 231
=========================================================================== =======================================
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 3,782 13,640
DD&A and property impairments 949 932 950 1,131 3,962 1,063 994 1,049 1,189 4,295
Dry hole costs and leasehold impairments 87 105 150 75 417 109 47 55 138 349
Accretion on discounted liabilities 36 41 49 45 171 48 41 46 58 193
Deferred income taxes 360 310 328 27 1,025 123 369 261 348 1,101
Undistributed equity earnings (181) (97) (263) (236) (777) (805) (414) (463) (92) (1,774)
Net (gain) loss on asset dispositions (82) (6) 6 (34) (116) (177) (65) (22) (14) (278)
Other 70 65 (30) (295) (190) (78) (113) 192 (140) (139)
Net working capital changes (777) (1,101) 1,267 10 (601) 888 (1,224) 1,177 (595) 246
Discontinued operations 8 14 (55) (6) (39) (5) 2 (3) 1 (5)
- --------------------------------------------------------------------------------------- -----------------------------------------
Net Cash Provided by
Operating
Activities 2,073 2,276 4,413 3,197 11,959 4,089 2,768 6,096 4,675 17,628
- --------------------------------------------------------------------------------------- -----------------------------------------
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) (1,666) (6,684)
Midstream (3) (2) (1) (1) (7) (1) - (838) - (839)
R&M (215) (278) (277) (574) (1,344) (275) (360) (440) (663) (1,738)
LUKOIL Investment - - - (2,649) (2,649) (324) (384) (815) (637) (2,160)
Chemicals - - - - - - - - - -
Emerging Businesses (28) (27) (19) (1) (75) 4 (7) (2) - (5)
Corporate and Other (25) (38) (49) (60) (172) (20) (37) (56) (81) (194)
- --------------------------------------------------------------------------------------- -----------------------------------------
Total capital expend. & investments (1,481) (1,584) (1,594) (4,837) (9,496) (1,822) (3,125) (3,626) (3,047) (11,620)
Acquisitions - adoption & application of
FIN 46 - - 11 - 11 - - - - -
Proceeds from asset dispositions 449 905 73 164 1,591 87 221 300 160 768
Long-term advances to/collections from
affiliates and other investments (44) 9 30 112 107 25 4 (58) (135) (164)
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) (3,022) (11,016)
- --------------------------------------------------------------------------------------- -----------------------------------------
Cash Flows from Financing Activities
Net issuance (repayment) of debt (722) (1,361) (221) (471) (2,775) (986) (13) (513) (1,038) (2,550)
Issuance of stock 112 95 62 161 430 155 108 114 25 402
Repurchase of stock - - - - - (194) (382) (589) (759) (1,924)
Dividends (294) (296) (296) (346) (1,232) (348) (432) (430) (429) (1,639)
Other 89 94 (66) 61 178 64 33 (10) (60) 27
- --------------------------------------------------------------------------------------- -----------------------------------------
Net Cash Provided by (Used for)
Financing
Activities (815) (1,468) (521) (595) (3,399) (1,309) (686) (1,428) (2,261) (5,684)
- --------------------------------------------------------------------------------------- -----------------------------------------
Effect of Exchange Rate Changes (12) 8 47 82 125 (36) (62) (22) 19 (101)
- --------------------------------------------------------------------------------------- -----------------------------------------
Net Change in Cash
and Cash Equivalents 169 145 2,459 (1,876) 897 1,034 (880) 1,262 (589) 827
Cash and cash equivalents
at beginning of period 490 659 804 3,263 490 1,387 2,421 1,541 2,803 1,387
- --------------------------------------------------------------------------------------- -----------------------------------------
Cash and Cash Equivalents
at End of Period 659 804 3,263 1,387 1,387 2,421 1,541 2,803 2,214 2,214
======================================================================================= =========================================
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 2,426 8,430
=========================================================================== =======================================
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 1,590 1,562
- --------------------------------------------------------------------------- ---------------------------------------
E&P segment plus LUKOIL Investment
segment: 1,611 1,563 1,484 1,755 1,603 1,801 1,760 1,787 1,883 1,808
- --------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated 828 809 733 821 797 822 780 766 777 786
Equity affiliates 113 104 111 103 108 120 123 124 116 121
- --------------------------------------------------------------------------- ---------------------------------------
Total 941 913 844 924 905 942 903 890 893 907
=========================================================================== =======================================
Sales of crude oil produced (MB/D) 927 888 875 903 898 940 932 883 916 918
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D) 76 79 87 92 84 94 80 92 99 91
- ---------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 3,415 3,299 3,179 3,356 3,312 3,295 3,191 3,099 3,468 3,263
Equity affiliates 9 4 4 4 5 5 7 10 3 7
- --------------------------------------------------------------------------- ---------------------------------------
Total 3,424 3,303 3,183 3,360 3,317 3,300 3,198 3,109 3,471 3,270
=========================================================================== =======================================
Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 21 20 19
- --------------------------------------------------------------------------- ---------------------------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 35.23 38.31 43.86 48.29 41.42 49.70 53.03 63.05 59.99 56.44
Brent dated 31.95 35.36 41.54 44.00 38.21 47.50 51.59 61.54 56.90 54.38
Natural Gas ($/mmbtu)
Henry Hub -- First of Month 5.69 6.00 5.75 7.07 6.13 6.27 6.74 8.53 13.00 8.64
- --------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated 32.08 35.32 40.41 42.79 37.65 44.89 48.88 58.49 55.06 51.74
Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 45.25 38.90 37.79
Total 30.44 34.17 38.78 40.96 36.06 43.15 46.93 56.64 53.05 49.87
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl) 25.43 26.71 30.73 35.37 30.02 33.44 35.10 41.54 42.75 38.32
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated 4.41 4.43 4.48 5.13 4.62 5.24 5.53 6.40 7.96 6.32
Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.20 0.28 0.26
Total 4.41 4.43 4.48 5.13 4.61 5.24 5.52 6.38 7.94 6.30
- --------------------------------------------------------------------------- ---------------------------------------
Exploration Charges ($ Millions)
Dry Holes 67 42 82 51 242 88 30 32 83 233
Lease Impairments 20 63 68 24 175 20 18 23 55 116
- --------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 87 105 150 75 417 108 48 55 138 349
Other (G&G and Lease Rentals) 56 58 55 117 286 63 73 85 91 312
- --------------------------------------------------------------------------- ---------------------------------------
Total Exploration Charges 143 163 205 192 703 171 121 140 229 661
=========================================================================== =======================================
Depreciation, Depletion and
Amortization (DD&A) ($ Millions) 704 720 711 783 2,918 819 755 823 915 3,312
- --------------------------------------------------------------------------- ---------------------------------------
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 1,323 4,288
=========================================================================== =======================================
Alaska ($ Millions) 403 397 451 581 1,832 532 572 730 718 2,552
- --------------------------------------------------------------------------- ---------------------------------------
Lower 48 ($ Millions) 232 274 250 354 1,110 360 394 377 605 1,736
- --------------------------------------------------------------------------- ---------------------------------------
Production
Total U.S. (MBOE/D) 659 637 579 642 629 648 631 617 636 633
- --------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Alaska 320 307 253 313 298 309 297 281 291 294
Lower 48 53 52 50 50 51 62 63 56 54 59
- --------------------------------------------------------------------------- ---------------------------------------
Total 373 359 303 363 349 371 360 337 345 353
=========================================================================== =======================================
Sales of crude oil produced (MB/D) 373 354 312 356 349 386 352 352 337 357
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D)*
Alaska 26 23 19 24 23 24 16 18 21 20
Lower 48 24 26 26 26 26 27 31 30 31 30
- --------------------------------------------------------------------------- ---------------------------------------
Total 50 49 45 50 49 51 47 48 52 50
=========================================================================== =======================================
*Includes reinjection volumes sold
lease-to-lease: 16 15 10 13 13 13 1 8 13 9
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas (MMCF/D)
Alaska 185 147 164 163 165 185 148 173 172 169
Lower 48 1,233 1,226 1,220 1,214 1,223 1,169 1,195 1,218 1,264 1,212
- --------------------------------------------------------------------------- ---------------------------------------
Total 1,418 1,373 1,384 1,377 1,388 1,354 1,343 1,391 1,436 1,381
=========================================================================== =======================================
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Alaska
North Slope 28.00 31.69 35.66 39.53 33.61 38.93 43.92 53.30 52.34 46.95
- --------------------------------------------------------------------------- ---------------------------------------
West Coast 32.93 36.53 40.48 44.37 38.47 44.15 49.22 58.70 57.61 52.24
- --------------------------------------------------------------------------- ---------------------------------------
Lower 48 31.86 34.39 39.56 42.30 36.95 41.29 43.58 50.00 46.62 45.24
- --------------------------------------------------------------------------- ---------------------------------------
Total U.S. 32.78 36.22 40.33 44.08 38.25 43.69 48.21 57.31 55.86 51.09
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl)
Alaska 32.93 36.38 40.52 43.78 38.64 44.33 49.20 57.11 57.58 51.30
- --------------------------------------------------------------------------- ---------------------------------------
Lower 48 24.19 25.82 29.40 32.80 28.14 30.96 31.22 39.92 42.89 36.43
- --------------------------------------------------------------------------- ---------------------------------------
Total U.S. 26.80 28.38 32.22 36.21 31.05 34.68 37.26 43.95 45.94 40.40
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Alaska 2.54 2.31 2.22 2.23 2.35 2.96 2.49 2.57 3.01 2.75
- --------------------------------------------------------------------------- ---------------------------------------
Lower 48 5.00 5.49 5.29 6.04 5.46 5.66 6.20 7.67 9.37 7.28
- --------------------------------------------------------------------------- ---------------------------------------
Total U.S. 4.88 5.35 5.19 5.92 5.33 5.57 6.07 7.48 9.17 7.12
- --------------------------------------------------------------------------- ---------------------------------------
Kenai, Alaska LNG Sales
Volume (MMCF/D) 118 82 115 107 105 132 96 123 118 117
- --------------------------------------------------------------------------- ---------------------------------------
Sales price per MCF 4.51 4.80 5.06 5.25 4.90 5.27 5.24 5.90 6.36 5.71
- --------------------------------------------------------------------------- ---------------------------------------
U.S. Exploration Charges ($ Millions)
Dry Holes 32 32 (5) - 59 74 8 (2) 3 83
Lease Impairments 11 11 10 10 42 10 9 9 10 38
- --------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 43 43 5 10 101 84 17 7 13 121
Other (G&G and Lease Rentals) 15 19 15 37 86 12 17 19 7 55
- --------------------------------------------------------------------------- ---------------------------------------
Total U.S. Exploration Charges 58 62 20 47 187 96 34 26 20 176
=========================================================================== =======================================
Alaska Only 17 43 7 14 81 85 13 11 1 110
- --------------------------------------------------------------------------- ---------------------------------------
DD&A ($ Millions)
Alaska 119 125 122 144 510 133 134 126 142 535
Lower 48 146 145 157 150 598 219 172 243 231 865
- --------------------------------------------------------------------------- ---------------------------------------
Total U.S. 265 270 279 294 1,108 352 306 369 373 1,400
=========================================================================== =======================================
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 1,103 4,142
=========================================================================== =======================================
Production
Total, Including Equity Affiliates
and Canadian Syncrude (MBOE/D) 952 926 905 954 934 952 906 904 954 929
- --------------------------------------------------------------------------- ---------------------------------------
Crude Oil and Condensate (MB/D)
Consolidated
Norway 215 212 189 211 207 207 195 198 188 197
United Kingdom 67 64 59 66 64 61 60 56 62 60
Canada 27 25 24 24 25 23 23 22 22 23
China 32 28 25 17 25 22 25 22 23 23
Indonesia 15 14 14 18 15 21 16 10 13 15
Vietnam 31 31 35 33 33 27 26 30 37 29
Timor Sea 5 15 29 34 21 36 21 38 36 33
Other 63 61 55 55 58 54 54 53 51 53
Equity affiliates 113 104 111 103 108 120 123 124 116 121
- --------------------------------------------------------------------------- ---------------------------------------
Total 568 554 541 561 556 571 543 553 548 554
=========================================================================== =======================================
Sales of crude oil produced (MB/D) 554 534 563 547 549 554 580 531 579 561
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids (MB/D)
Norway 9 8 8 9 8 10 9 10 11 9
Canada 10 10 10 11 10 10 10 10 10 10
Timor Sea - 4 14 16 9 17 9 20 19 16
Other 7 8 10 6 8 6 5 4 7 6
- --------------------------------------------------------------------------- ---------------------------------------
Total 26 30 42 42 35 43 33 44 47 41
=========================================================================== =======================================
Natural Gas (MMCF/D)
Consolidated
Norway 319 303 274 306 301 298 268 259 264 272
United Kingdom 879 821 720 852 818 824 741 588 851 751
Canada 428 437 425 442 433 417 422 429 430 425
Timor Sea 40 32 35 35 35 35 35 35 33 34
Indonesia 248 237 248 266 250 273 287 303 330 298
Vietnam 17 15 15 19 16 18 14 20 19 18
Other 66 81 78 59 71 76 81 74 105 84
Equity affiliates 9 4 4 4 5 5 7 10 3 7
- --------------------------------------------------------------------------- ---------------------------------------
Total 2,006 1,930 1,799 1,983 1,929 1,946 1,855 1,718 2,035 1,889
=========================================================================== =======================================
Canadian Syncrude (MB/D) 23 20 22 20 21 14 21 21 20 19
- --------------------------------------------------------------------------- ---------------------------------------
Average Realized Prices
Crude Oil and Condensate ($/bbl)
Consolidated
Norway 32.13 34.72 40.70 41.82 37.55 45.52 50.21 60.42 56.36 53.18
United Kingdom 31.27 34.19 39.57 44.79 37.00 49.47 48.02 60.83 54.87 53.13
Canada 28.95 30.58 36.16 36.44 32.92 36.96 41.09 54.74 46.44 44.70
China 29.91 33.02 37.99 32.87 33.31 41.51 46.95 51.89 49.86 47.85
Indonesia 32.21 36.20 42.71 45.43 39.21 46.51 47.57 61.77 47.00 49.45
Vietnam 31.76 36.42 41.36 42.94 38.31 47.77 53.32 58.52 52.77 53.23
Timor Sea 35.49 37.32 46.65 45.95 43.91 47.99 50.90 59.03 52.90 52.95
Other 30.89 34.87 39.54 39.28 36.05 44.56 50.11 60.99 57.03 52.93
Equity affiliates 19.27 25.48 26.19 26.55 24.18 30.38 36.11 45.25 38.90 37.79
Total 28.86 32.81 37.92 38.93 34.67 42.77 46.16 56.19 51.41 49.09
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas Liquids ($/bbl)
Norway 24.34 24.22 27.79 37.64 28.92 30.63 28.20 37.29 33.81 32.45
Canada 26.38 28.58 31.15 36.61 30.77 37.37 37.66 44.22 49.63 42.20
Timor Sea - 29.13 33.96 37.11 34.94 34.40 35.99 40.45 47.29 40.11
Other 18.43 18.03 22.76 19.64 19.99 21.34 22.30 26.63 20.30 22.17
Total 23.53 24.69 29.53 34.59 28.96 32.35 32.03 39.29 40.04 36.25
- --------------------------------------------------------------------------- ---------------------------------------
Natural Gas ($/mcf)
Consolidated
Norway 4.37 3.99 4.12 4.45 4.24 5.03 5.30 5.13 6.40 5.46
United Kingdom 4.04 3.47 3.79 4.76 4.03 5.54 5.01 4.92 7.64 5.89
Canada 4.88 5.01 4.64 5.43 5.00 5.33 6.14 7.54 9.86 7.25
Timor Sea 0.43 0.45 0.46 0.49 0.46 0.52 0.52 0.56 0.61 0.55
Indonesia 4.38 4.28 5.02 4.74 4.61 5.08 5.96 6.73 6.23 6.03
Vietnam 1.10 0.99 1.01 1.05 1.04 1.04 1.04 1.05 1.07 1.05
Other 0.66 0.59 0.62 0.97 0.69 0.70 0.59 0.66 0.72 0.67
Equity affiliates 3.91 0.31 0.31 0.25 2.19 0.25 0.32 0.20 0.28 0.26
Total 4.11 3.81 3.98 4.63 4.14 5.03 5.15 5.57 7.16 5.76
- --------------------------------------------------------------------------- ---------------------------------------
International Exploration Charges ($ Millions)
Dry Holes 35 10 87 51 183 14 22 34 80 150
Lease Impairments 9 52 58 14 133 10 9 14 45 78
- --------------------------------------------------------------------------- ---------------------------------------
Total Non-Cash Charges 44 62 145 65 316 24 31 48 125 228
Other (G&G and Lease Rentals) 41 39 40 80 200 51 56 66 84 257
- --------------------------------------------------------------------------- ---------------------------------------
Total International Exploration
Charges 85 101 185 145 516 75 87 114 209 485
=========================================================================== =======================================
DD&A ($ Millions) 439 450 432 489 1,810 467 449 454 542 1,912
- --------------------------------------------------------------------------- ---------------------------------------
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 1,390 973 4,173
===================================================================================== ========================================
United States ($ Millions) 403 734 505 484 2,126 570 936 1,096 727 3,329
- ------------------------------------------------------------------------------------- ----------------------------------------
International ($ Millions) 61 84 203 269 617 130 174 294 246 844
- ------------------------------------------------------------------------------------- ----------------------------------------
Market Indicators
U.S. East Coast Crack Spread ($/bbl) 6.87 9.14 7.00 5.73 7.19 6.40 8.80 14.81 9.32 9.83
U.S. Gulf Coast Crack Spread ($/bbl) 6.36 9.17 6.33 4.09 6.49 6.37 9.63 17.42 10.27 10.92
U.S. Group Central Crack Spread ($/bbl) 6.91 11.65 8.09 5.52 8.04 7.92 11.51 17.06 11.93 12.10
U.S. West Coast Crack Spread ($/bbl) 16.10 24.13 17.92 17.25 18.85 19.61 22.20 26.61 16.29 21.18
U.S. Weighted 3:2:1 Crack Spread ($/bbl) 8.39 12.60 9.10 7.24 9.33 9.24 12.35 18.51 11.69 12.95
NW Europe Crack Spread ($/bbl) 7.78 10.43 11.76 15.24 11.30 11.14 15.09 16.53 13.68 14.11
Singapore 3:2:1 Crack Spread ($/bbl) 10.33 9.48 13.11 17.22 12.54 13.23 13.95 16.70 12.43 14.08
U.S. Wholesale Gasoline Mktg Mrgn ($/bbl) 0.69 1.83 1.50 1.97 1.50 0.16 2.20 0.42 3.98 1.69
- ------------------------------------------------------------------------------------- ----------------------------------------
Realized Margins
Refining Margin ($/bbl)
U.S. 7.12 9.88 8.84 8.38 8.56 10.11 11.23 14.61 12.71 12.17
International* 4.51 6.57 8.36 10.03 7.56 8.26 8.79 10.44 8.73 9.07
- ------------------------------------------------------------------------------------- ----------------------------------------
Marketing Margin ($/bbl)
U.S. 1.08 1.49 1.15 1.85 1.39 0.46 2.01 0.18 2.52 1.28
International 6.50 8.20 7.69 8.13 7.66 5.61 8.56 6.80 8.62 7.43
- ------------------------------------------------------------------------------------- ----------------------------------------
* 2004 and first-quarter 2005 amounts restated to include equity affiliates.
DD&A ($ Millions) 186 172 202 212 772 194 197 197 230 818
- ------------------------------------------------------------------------------------- ----------------------------------------
Turnaround Expense ($ Millions) 59 78 57 73 267 108 106 53 86 353
- ------------------------------------------------------------------------------------- ----------------------------------------
Eastern U.S.
Crude Oil Charge Input (MB/D) 413 375 368 346 375 403 414 409 416 410
Total Charge Input (MB/D) 440 421 415 407 421 449 454 456 446 451
Crude Oil Capacity Utilization (%) 96% 87% 87% 82% 88% 95% 98% 97% 98% 97%
Clean Product Yield (%) 87% 84% 87% 90% 87% 92% 88% 89% 91% 90%
- ------------------------------------------------------------------------------------- ----------------------------------------
U.S. Gulf Coast
Crude Oil Charge Input (MB/D) 699 709 617 689 678 659 715 596 397 591
Total Charge Input (MB/D) 774 789 717 779 765 733 835 674 467 676
Crude Oil Capacity Utilization (%) 97% 99% 88% 98% 96% 92% 100% 83% 55% 83%
Clean Product Yield (%) 79% 75% 78% 82% 78% 73% 79% 80% 80% 78%
- ------------------------------------------------------------------------------------- ----------------------------------------
Central U.S.
Crude Oil Charge Input (MB/D) 601 638 634 583 614 538 594 620 619 594
Total Charge Input (MB/D) 636 673 669 614 648 577 625 653 666 630
Crude Oil Capacity Utilization (%) 96% 102% 99% 91% 97% 84% 93% 97% 97% 93%
Clean Product Yield (%) 83% 83% 85% 84% 84% 86% 84% 85% 85% 85%
- ------------------------------------------------------------------------------------- ----------------------------------------
Western U.S.
Crude Oil Charge Input (MB/D) 392 397 392 387 392 357 410 415 421 401
Total Charge Input (MB/D) 409 419 409 409 412 382 431 439 445 425
Crude Oil Capacity Utilization (%) 100% 101% 99% 98% 99% 90% 101% 102% 104% 100%
Clean Product Yield (%) 81% 81% 82% 83% 82% 80% 82% 79% 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 1,853 1,996
Total Charge Input (MB/D) 2,259 2,302 2,210 2,209 2,246 2,141 2,345 2,222 2,024 2,182
Crude Oil Capacity Utilization (%) 97% 98% 93% 93% 95% 90% 98% 93% 85% 92%
Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 83% 83% 84% 83%
- ------------------------------------------------------------------------------------- ----------------------------------------
Refined Products Production (MB/D)
Gasoline 1,059 1,043 1,060 1,072 1,059 968 1,071 1,030 949 1,004
Distillates 604 591 574 619 597 599 655 640 583 619
Aviation Fuel 167 177 164 158 167 166 174 153 135 157
Other 415 489 400 383 422 414 449 400 370 406
- ------------------------------------------------------------------------------------- ----------------------------------------
Total 2,245 2,300 2,198 2,232 2,245 2,147 2,349 2,223 2,037 2,186
===================================================================================== ========================================
Petroleum Products Sales (MB/D)
Gasoline 1,315 1,328 1,366 1,415 1,356 1,302 1,426 1,397 1,368 1,374
Distillates 570 538 544 562 553 642 680 725 653 675
Aviation Fuel 178 191 200 195 191 198 214 203 189 201
Other 517 573 553 613 564 461 566 526 521 519
- ------------------------------------------------------------------------------------- ----------------------------------------
Total 2,580 2,630 2,663 2,785 2,664 2,603 2,886 2,851 2,731 2,769
===================================================================================== ========================================
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) 289 197 291 298 269 294 259 289 291 283
Total Charge Input (MB/D) 299 216 300 308 280 307 266 305 310 297
Crude Oil Capacity Utilization (%) 94% 64% 100% 102% 90% 101% 89% 99% 100% 97%
Clean Product Yield (%) 84% 81% 83% 81% 82% 79% 76% 82% 82% 80%
- ------------------------------------------------------------------------------------- ----------------------------------------
International - Equity Affiliates - Net Share*
Crude Oil Charge Input (MB/D) 120 112 134 140 127 134 143 142 144 141
Total Charge Input (MB/D) 121 113 138 145 130 137 147 145 145 144
Crude Oil Capacity Utilization (%) 87% 81% 99% 103% 92% 98% 105% 105% 106% 103%
Clean Product Yield (%) 82% 83% 81% 81% 82% 83% 82% 80% 83% 82%
- ------------------------------------------------------------------------------------- ----------------------------------------
TOTAL INTERNATIONAL
Crude Oil Charge Input (MB/D) 409 309 425 438 396 428 402 431 435 424
Total Charge Input (MB/D) 420 329 438 453 410 444 413 450 455 441
Crude Oil Capacity Utilization (%) 92% 69% 99% 102% 91% 100% 94% 101% 102% 99%
Clean Product Yield (%) 84% 82% 82% 81% 82% 80% 78% 81% 82% 80%
- ------------------------------------------------------------------------------------- ----------------------------------------
Refined Products Production (MB/D)
Gasoline 124 109 138 144 129 141 115 143 152 138
Distillates 181 136 190 190 174 186 178 191 191 186
Aviation Fuel 24 16 22 25 22 21 21 24 24 22
Other 81 57 89 94 80 95 96 90 91 93
- ------------------------------------------------------------------------------------- ----------------------------------------
Total 410 318 439 453 405 443 410 448 458 439
===================================================================================== ========================================
Petroleum Products Sales (MB/D)
Gasoline 185 180 173 180 180 185 176 178 175 178
Distillates 228 184 207 222 210 221 212 216 224 218
Aviation Fuel 6 9 10 8 8 7 10 12 8 9
Other 82 67 82 83 79 82 79 64 83 77
- ------------------------------------------------------------------------------------- ----------------------------------------
Total 501 440 472 493 477 495 477 470 490 482
===================================================================================== ========================================
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 2,288 2,420
Total Charge Input (MB/D) 2,679 2,631 2,648 2,662 2,656 2,585 2,758 2,672 2,479 2,623
Crude Oil Capacity Utilization (%) 96% 93% 94% 94% 94% 92% 97% 95% 88% 93%
Clean Product Yield (%) 82% 80% 82% 84% 82% 82% 82% 83% 84% 82%
- ------------------------------------------------------------------------------------- ----------------------------------------
Refined Products Production (MB/D)
Gasoline 1,183 1,152 1,198 1,216 1,188 1,109 1,186 1,173 1,101 1,142
Distillates 785 727 764 809 771 785 833 831 774 805
Aviation Fuel 191 193 186 183 189 187 195 177 159 179
Other 496 546 489 477 502 509 545 490 461 499
- ------------------------------------------------------------------------------------- ----------------------------------------
Total 2,655 2,618 2,637 2,685 2,650 2,590 2,759 2,671 2,495 2,625
===================================================================================== ========================================
Petroleum Products Sales (MB/D)
Gasoline 1,500 1,508 1,539 1,595 1,536 1,487 1,602 1,575 1,543 1,552
Distillates 798 722 751 784 763 863 892 941 877 893
Aviation Fuel 184 200 210 203 199 205 224 215 197 210
Other 599 640 635 696 643 543 645 590 604 596
- ------------------------------------------------------------------------------------- ----------------------------------------
Total 3,081 3,070 3,135 3,278 3,141 3,098 3,363 3,321 3,221 3,251
===================================================================================== ========================================
* 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 74 110 148 267 189 714
====================================================================================== ========================================
Upstream
Production*
Net crude oil production (MB/D) - - - 150 38 190 215 253 281 235
Net natural gas production (MMCF/D) - - - 51 13 67 50 79 72 67
BOE Total (MBOE/D) - - - 159 40 201 223 266 293 246
- --------------------------------------------------------------------------------------------------------------------------------
* Represents our estimated net share of LUKOIL's production.
Industry Prices
Crude Oil ($/bbl)
Urals crude (CIF Mediterranean) - - - 38.82 38.82 43.21 48.49 57.39 54.07 50.87
- -------------------------------------------------------------------------------------- ----------------------------------------
Downstream
Refinery Throughput*
Crude Processed (MB/D) - - - 77 19 92 101 138 156 122
- -------------------------------------------------------------------------------------- ----------------------------------------
* Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM
2004 2005
----------------------------------------- ----------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
----------------------------------------- ----------------------------------------
Midstream Net Income ($ Millions) 55 42 38 100 235 385 68 88 147 688
====================================================================================== ========================================
U.S. Equity Affiliate ($ Millions)* 33 33 26 51 143 359 51 76 105 591
- -------------------------------------------------------------------------------------- ----------------------------------------
Natural Gas Liquids Extracted (MB/D)
Consolidated
United States 54 24 28 23 32 23 21 23 22 22
International 47 33 49 49 45 53 44 5 - 25
Equity Affiliates
United States* 109 112 111 113 111 110 112 171 172 142
International 6 5 6 7 6 6 6 6 6 6
- -------------------------------------------------------------------------------------- ----------------------------------------
Total 216 174 194 192 194 192 183 205 200 195
====================================================================================== ========================================
* Represents 30.3 percent interest in Duke Energy Field Services, LLC
(DEFS), through June 30, 2005, and 50 percent interest beginning in
July 2005.
Natural Gas Liquids Fractionated (MB/D)
United States* 158 144 145 140 147 149 131 123 127 132
International 63 43 62 62 58 64 55 15 10 36
- -------------------------------------------------------------------------------------- ----------------------------------------
Total 221 187 207 202 205 213 186 138 137 168
====================================================================================== ========================================
* Excludes DEFS.
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 25.68 26.42 31.03 34.40 29.38 31.95 32.49 39.60 42.70 36.68
DEFS 24.81 25.61 30.27 33.69 28.60 30.61 31.33 38.31 41.84 35.52
- -------------------------------------------------------------------------------------- ----------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway
market hubs that are weighted by natural gas liquids component and
location mix.
DD&A ($ Millions) 13 9 11 10 43 9 8 7 8 32
- -------------------------------------------------------------------------------------- ----------------------------------------
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 13 114 323
====================================================================================== ========================================
Industry Margins (Cents/Lb)*
Ethylene industry cash margin 9.38 10.70 8.27 12.22 10.14 18.11 12.76 8.78 21.06 15.18
HDPE industry contract sales margin 9.43 9.21 9.23 11.68 9.89 12.09 12.01 8.16 12.90 11.29
Styrene industry contract sales margin 13.06 13.33 13.73 13.40 13.38 13.91 13.63 12.44 12.31 13.07
- -------------------------------------------------------------------------------------- ----------------------------------------
* 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) - (5) (21)
====================================================================================== ========================================
Detail of Net Income (Loss) ($ Millions)
Technology Solutions (4) (4) (3) (7) (18) (2) (4) (5) (5) (16)
Gas-to-Liquids (9) (7) (9) (8) (33) (7) (7) (4) (5) (23)
Power (4) (16) (8) (3) (31) 2 9 17 15 43
Other (5) (2) (7) (6) (20) (1) (6) (8) (10) (25)
- -------------------------------------------------------------------------------------- ----------------------------------------
Total (22) (29) (27) (24) (102) (8) (8) - (5) (21)
====================================================================================== ========================================
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) (165) (778)
====================================================================================== ========================================
Detail of Net Income (Loss) ($ Millions)
Net interest expense (113) (143) (149) (109) (514) (101) (84) (123) (114) (422)
Corporate overhead (48) (52) (51) (61) (212) (58) (46) (64) (15) (183)
Discontinued operations 13 62 (5) (48) 22 (11) 7 (4) (15) (23)
Merger-related costs (14) - - - (14) - - - - -
Accounting change - - - - - - - - - -
Other (15) (23) (9) (7) (54) (25) (49) (55) (21) (150)
- -------------------------------------------------------------------------------------- ----------------------------------------
Total (177) (156) (214) (225) (772) (195) (172) (246) (165) (778)
====================================================================================== ========================================
Before-Tax Net Interest Expense ($ Millions)
Interest expense (260) (263) (222) (231) (976) (226) (219) (223) (224) (892)
Capitalized interest 115 104 121 90 430 88 91 102 114 395
Interest revenue 16 12 8 11 47 25 24 28 36 113
Receivables monetization related (1) (1) 3 1 2 (1) - - - (1)
Premium on early debt retirement - - (58) - (58) (9) - (50) (51) (110)
- -------------------------------------------------------------------------------------- ----------------------------------------
Total (130) (148) (148) (129) (555) (123) (104) (143) (125) (495)
====================================================================================== ========================================
Debt
Total Debt ($ Millions) 17,109 15,619 15,486 15,002 15,002 14,012 14,013 13,497 12,516 12,516
Debt-to-Capital Ratio 32% 29% 28% 26% 26% 23% 22% 21% 19% 19%
- -------------------------------------------------------------------------------------- ----------------------------------------
Page 11 of 11