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): April 25, 2007
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware 001-32395 01-0562944
(State or other jurisdiction (Commission (I.R.S. Employer
of 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 April 25, 2007, ConocoPhillips issued a press release announcing the
company's financial and operating results for the quarter ended March 31, 2007.
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
(d) Exhibits
99.1 -- Press release issued by ConocoPhillips on April 25, 2007.
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
April 25, 2007
3
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
99.1 Press release issued by ConocoPhillips on April 25, 2007.
99.2 Financial and operational tables.
99.3 Supplemental financial information.
4
Exhibit 99.1
ConocoPhillips Reports First-Quarter Net Income
of $3.5 Billion or $2.12 Per Diluted Share
HOUSTON--(BUSINESS WIRE)--April 25, 2007--ConocoPhillips
(NYSE:COP):
Earnings at a glance
- ---------------------------------------------------------------------
First Quarter
- ---------------------------------------------------------------------
2007 2006
- ---------------------------------------------------------------------
Net income $3,546 million 3,291 million
- ---------------------------------------------------------------------
Diluted net income per share $2.12 2.34
- ---------------------------------------------------------------------
Revenues(1) $41.3 billion 46.9 billion
- ---------------------------------------------------------------------
(1) Effective April 1, 2006, revenues no longer include the sales
portion of buy/sell contracts, reflecting the adoption of EITF No.
04-13, "Accounting for Purchases and Sales of Inventory with the
Same Counterparty."
ConocoPhillips (NYSE:COP) today reported first-quarter net income
of $3,546 million, or $2.12 per share. This compares with $3,291
million, or $2.34 per share, for the same quarter in 2006. Revenues
were $41.3 billion, versus $46.9 billion a year ago.
"Operating performance for the quarter was consistent with our
plans and we continued to progress the execution of our financial
strategy," said Jim Mulva, chairman and chief executive officer. "With
respect to our upstream operations, we produced 2.47 million BOE per
day, including an estimated 0.45 million BOE per day from our LUKOIL
Investment segment. In our downstream business, the crude oil capacity
utilization rate was 94 percent during the quarter.
"We continued to strengthen our financial position by lowering our
debt balance to $23.7 billion and improving our debt-to-capital ratio
to 22 percent. During the quarter, we funded $3 billion of our capital
program, reduced debt by $3.5 billion, repurchased $1 billion of
ConocoPhillips common stock, and paid $0.7 billion in dividends. This
was accomplished using $6.9 billion of cash generated from operations
and $1.3 billion in proceeds from asset dispositions."
First-quarter net income included a net benefit of $0.29 per share
associated with the company's asset disposition efforts.
The results for ConocoPhillips' business segments follow.
Exploration and Production (E&P)
First-quarter financial results: E&P net income was $2,329
million, up from $2,087 million in the fourth quarter of 2006 and down
from $2,553 million in the first quarter of 2006. The increase from
the previous quarter primarily was due to a $355 million net benefit
associated with first-quarter 2007 asset rationalization efforts,
lower asset impairments, and higher natural gas prices. The increased
net income was partially offset by lower sales volumes and crude oil
prices. The decrease from the first quarter of 2006 primarily was due
to lower commodity prices, higher taxes, and higher operating costs.
This decrease was partially offset by the current year net benefit
from asset rationalization efforts and higher volumes. The increase in
volumes reflected the inclusion of Burlington Resources' results,
partially offset by normal field decline and OPEC reductions.
Daily production from the E&P segment, including Canadian Syncrude
and excluding the LUKOIL Investment segment, averaged 2.02 million
barrels of oil equivalent (BOE) per day, a slight decline from 2.05
million BOE per day in the previous quarter and up from 1.61 million
BOE per day in the first quarter of 2006. Compared to the fourth
quarter of 2006, first-quarter 2007 production increased due to lower
unplanned downtime in Alaska and the U.K. North Sea and volumes from
the recently formed upstream business venture with EnCana. This
increase was more than offset by the effect of asset dispositions,
OPEC reductions in Venezuela and Libya, normal field decline,
completion of recovery of the company's underlift in Libya during the
previous quarter, and production sharing contract impacts.
The increase from the first quarter of 2006 primarily was due to
the addition of the Burlington Resources assets, Libya volumes and the
upstream business venture with EnCana. The increased production was
partially offset by normal field decline, production sharing contract
impacts, OPEC reductions, and the effect of asset dispositions.
Before-tax exploration expenses were $262 million in the first
quarter of 2007, versus $391 million in the previous quarter and $112
million in the first quarter of 2006.
Midstream
First-quarter financial results: The Midstream segment includes
the company's 50 percent interest in DCP Midstream, LLC. Midstream
first-quarter net income was $85 million, down from $89 million in the
previous quarter and $110 million in the first quarter of 2006. The
decrease from the previous quarter primarily was due to lower volumes,
partially offset by higher natural gas liquids prices. The decrease
from the first quarter of 2006 primarily was due to lower volumes and
natural gas liquids prices.
Refining and Marketing (R&M)
First-quarter financial results: R&M net income was $1,136 million
in the first quarter, up from $919 million in the previous quarter and
$390 million in the first quarter of 2006. Held-for-sale asset
impairments were $192 million in the previous quarter. In the first
quarter of 2007, previously reported held-for-sale asset impairments
were reduced to reflect asset values consistent with finalized sales
agreements. This resulted in a net benefit of $135 million in the
first quarter.
Operationally, first-quarter 2007 realized refining margins were
higher than the previous period. Although domestic WTI-based market
crack spreads improved significantly during the quarter, realized
margins only improved slightly. This primarily was due to narrowing
crude differentials, the periodic pricing of Brent and other crudes at
a premium to WTI during the quarter, and the company's refining
configuration. Internationally, the increase in market crack spreads
was offset by lower trading results. In addition, lower refining
volumes, largely due to fewer days in the quarter, and lower marketing
margins more than offset the benefit from higher realized refining
margins. The increase from the first quarter of 2006 primarily was due
to higher worldwide refining and marketing margins, higher worldwide
refining volumes, the first-quarter 2007 reduction in previously
reported impairments, and lower turnaround costs.
ConocoPhillips' crude oil refining capacity as of January 1, 2007,
was 2,729,000 barrels per day, down from 2,901,000 barrels per day at
year-end 2006, reflecting the contribution of the company's Wood River
(Roxana, Ill.) and Borger (Texas) refineries to the downstream
business venture with EnCana. The domestic refining crude oil capacity
utilization rate for the first quarter was 95 percent, compared with
96 percent in the previous quarter. The international crude oil
capacity utilization rate was 90 percent, compared with 87 percent in
the previous quarter.
Worldwide, R&M's refining crude oil capacity utilization rate of
94 percent remained unchanged from the previous quarter and was up
from 85 percent in the first quarter of 2006. The first-quarter 2006
rate was impacted by turnaround activity and unplanned downtime at a
number of the company's domestic refineries. Before-tax turnaround
costs were $75 million in the first quarter of 2007, versus $94
million in the previous quarter and $163 million in the first quarter
of 2006.
LUKOIL Investment
First-quarter financial results: LUKOIL Investment segment net
income was $256 million, down from $302 million in the previous
quarter and up from $249 million in the first quarter of 2006. The
results include ConocoPhillips' estimated equity share of OAO LUKOIL's
(LUKOIL) income for the first quarter based on market indicators and
historical production trends for LUKOIL. The company's equity
ownership interest in LUKOIL at the end of the first quarter was 20.6
percent based on an estimated 826 million shares outstanding.
The decrease in net income from the previous quarter primarily was
due to a fourth-quarter net benefit from alignment of the company's
estimate of net income and ownership interest to LUKOIL's reported
results, partially offset by estimated price and volume impacts. The
increase from the first quarter of 2006 primarily was due to higher
estimated volumes and ConocoPhillips' increased equity ownership,
partially offset by the net impact from the alignment of estimated net
income to LUKOIL's reported results and lower estimated commodity
prices.
For the first quarter of 2007, ConocoPhillips estimated its equity
share of LUKOIL production was 445,000 BOE per day and its share of
LUKOIL daily refining crude oil throughput was 219,000 barrels per
day.
Chemicals
First-quarter financial results: The Chemicals segment, which
includes the company's 50 percent interest in Chevron Phillips
Chemical Company LLC, reported net income of $82 million, down from
$98 million in the fourth quarter of 2006 and $149 million in the
first quarter of 2006. The decrease from the previous quarter
primarily was due to a business interruption insurance benefit
recognized in the fourth quarter of 2006, lower margins, and higher
turnaround costs. The decrease in net income was partially offset by a
fourth-quarter 2006 asset retirement expense that did not recur in the
first quarter. The decrease from the first quarter of 2006 was largely
due to lower olefins and polyolefins margins and a business
interruption insurance benefit recorded in the first quarter of 2006.
Emerging Businesses
The Emerging Businesses segment had a net loss of $1 million in
the first quarter of 2007, compared with net income of $8 million in
the previous quarter and net income of $8 million in the first quarter
of 2006. Results were impacted by lower power generation earnings
during the first quarter of 2007.
Corporate and Other
First-quarter Corporate expenses were $341 million, after tax, up
from $306 million in the previous quarter and $168 million in the
first quarter of 2006. The increase from the previous quarter was
largely attributable to a $14 million foreign exchange loss in the
first quarter of 2007, compared to a $61 million foreign exchange gain
in the fourth quarter of 2006 and a $14 million premium on the early
retirement of debt paid in the first quarter of 2007. The increase in
Corporate expenses was partially offset by lower net interest expense
and Burlington Resources acquisition-related charges. The increase
from the first quarter of 2006 primarily was due to higher net
interest expense, acquisition-related charges, and the premium paid on
the early retirement of debt.
Total debt at the end of the first quarter was $23.7 billion, a
reduction of $3.5 billion during the quarter. The company's
debt-to-capital ratio was 22 percent, compared to 24 percent at the
end of 2006.
ConocoPhillips' first-quarter effective tax rate was 41.5 percent.
This is compared with 46.0 percent in the fourth quarter of 2006. The
lower effective tax rate for the first quarter of 2007 was primarily
the result of the company's asset rationalizations.
Outlook
Mr. Mulva concluded:
"We achieved another quarter of strong financial results, and we
continue to build shareholder value through operating excellence and
project execution, capital discipline, debt reduction, and increased
share repurchases and dividends.
"We are continuing to advance our Canadian heavy oil projects with
the implementation of the business ventures with EnCana in the first
quarter and the ongoing development of Surmont Phase I. In our
downstream business, we continue to make progress on the capital
investments in the Wood River and Borger refineries.
"Consistent with our plans, we anticipate the company's
second-quarter E&P segment production to be lower due to scheduled
maintenance, normal seasonality in Alaska, our exit from Dubai and
asset dispositions.
"In our downstream refining business, we expect crude oil capacity
utilization to be in the mid-90-percent range in the second quarter.
Turnaround costs are anticipated to be approximately $60 million for
the quarter.
"ConocoPhillips recently announced its support for a mandatory
national framework to address greenhouse gas emissions and has joined
the U.S. Climate Action Partnership. The company also announced the
formation of a strategic alliance with Tyson Foods, Inc. to produce
and market the next generation of renewable diesel fuel. In addition,
ConocoPhillips established an eight-year, $22.5 million research
program at Iowa State University dedicated to developing technologies
that produce biorenewable fuels.
"Meeting the twin challenges of taking action on climate change
and providing adequate and reliable supplies of energy will require
technical innovation, resource commitments and responsible stewardship
by energy producers and consumers alike. ConocoPhillips intends to
meet these challenges."
ConocoPhillips is an integrated petroleum company with interests
around the world. Headquartered in Houston, the company had
approximately 38,700 employees, $173 billion of assets, and $165
billion of annualized revenues as of March 31, 2007. For more
information, go to www.conocophillips.com.
ConocoPhillips' quarterly conference call is scheduled for 11 a.m.
Eastern time 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 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 press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended, which
are intended to be covered by the safe harbors created thereby.
Forward-looking statements relate to future events and anticipated
results of operations, business strategies, and other aspects of our
operations or operating results. In many cases you can identify
forward-looking statements by terminology such as "anticipate,"
"estimate," "believe," "continue," "could," "intend," "may," "plan,"
"potential," "predict," "should," "will," "expect," "objective,"
"projection," "forecast," "goal," "guidance," "outlook," "effort,"
"target" and other similar words. However, the absence of these words
does not mean that the statements are not forward-looking. Where, in
any forward-looking statement, the company expresses an expectation or
belief as to future results, such expectation or belief is expressed
in good faith and believed to have a reasonable basis. However, there
can be no assurance that such expectation or belief will result or be
achieved. The actual results of operations can and will be affected by
a variety of risks and other matters including, but not limited to,
crude oil and natural gas prices; refining and marketing margins;
potential failure to achieve, and potential delays in achieving
expected reserves or production levels from existing and future oil
and gas development projects due to operating hazards, drilling risks,
and the inherent uncertainties in interpreting engineering data
relating to underground accumulations of oil and gas; unsuccessful
exploratory drilling activities; lack of exploration success;
potential disruption or unexpected technical difficulties in
developing new products and manufacturing processes; potential failure
of new products to achieve acceptance in the market; unexpected cost
increases or technical difficulties in constructing or modifying
company manufacturing or refining facilities; unexpected difficulties
in manufacturing, transporting or refining synthetic crude oil;
international monetary conditions and exchange controls; potential
liability for remedial actions under existing or future environmental
regulations; potential liability resulting from pending or future
litigation; general domestic and international economic and political
conditions, as well as changes in tax and other laws applicable to our
business. Other factors that could cause actual results to differ
materially from those described in the forward-looking statements
include other economic, business, competitive and/or regulatory
factors affecting our business generally as set forth in our filings
with the Securities and Exchange Commission (SEC). Unless legally
required, ConocoPhillips undertakes no obligation to update publicly
any 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. The company uses certain terms in this release,
such as "including Canadian Syncrude," and "resources" that the SEC's
guidelines strictly prohibit us from including in filings with the
SEC. U.S. investors are urged to consider closely the disclosures 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
Gary Russell, 212-207-1996 (investors)
or
Becky Johnson, 281-293-6743 (media)
Exhibit 99.2
Conoco Phillips
Houston, Texas 77079
Preliminary
FINANCIAL HIGHLIGHTS
Millions of Dollars
Three Months Ended
March 31
2007 2006
------------------ -----------------
Revenues and other income
Sales and other operating revenues* $ 41,320 46,906
Equity in earnings of affiliates 929 960
Other income 618 61
------------------ -----------------
42,867 47,927
------------------ -----------------
Costs and expenses
Purchased crude oil, natural gas and products 26,715 33,455
Production and operating expenses 2,492 2,215
Selling, general and administrative expenses 527 566
Exploration expenses 262 112
Depreciation, depletion and amortization 2,024 1,180
Impairments (1) -
Taxes other than income taxes* 4,374 4,387
Accretion on discounted liabilities 79 60
Interest and debt expense 307 115
Foreign currency transaction losses 1 22
Minority interests 21 18
------------------ -----------------
36,801 42,130
------------------ -----------------
Income before income taxes 6,066 5,797
Provision for income taxes 2,520 2,506
------------------ -----------------
Net income 3,546 3,291
================== =================
Net income per share of common stock (dollars)
Basic $ 2.15 2.38
================== =================
Diluted $ 2.12 2.34
================== =================
Average common shares outstanding (in thousands)
Basic 1,647,352 1,382,925
Diluted 1,668,847 1,404,704
*Includes excise taxes on petroleum products
sales: $ 3,717 3,990
1
Conoco Phillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
Three Months Ended
March 31
2007 2006
------------------ -----------------
SUMMARY OF NET INCOME (LOSS)
E&P
United States $ 916 1,181
International 1,413 1,372
------------------ -----------------
Total E&P 2,329 2,553
------------------ -----------------
Midstream 85 110
------------------ -----------------
R&M
United States 896 297
International 240 93
------------------ -----------------
Total R&M 1,136 390
------------------ -----------------
LUKOIL Investment 256 249
Chemicals 82 149
Emerging Businesses (1) 8
Corporate and other (341) (168)
------------------ -----------------
Consolidated $ 3,546 3,291
================== =================
2
Conoco Phillips
Houston, Texas 77079
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended
March 31
2007 2006
------------------ -----------------
Effective tax rate % 41.5 % 43.2
Millions of Dollars
FOREIGN CURRENCY GAINS (LOSSES)
AFTER-TAX
E&P $ 17 7
Midstream - -
R&M - 6
LUKOIL Investment - -
Chemicals - -
Emerging Businesses - -
Corporate and other (14) (8)
------------------ -----------------
$ 3 5
================== =================
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 3,546 3,291
Depreciation, depletion and amortization 2,024 1,180
Impairments (1) -
Dry hole costs and leasehold impairments 148 38
Accretion on discounted liabilities 79 60
Deferred taxes 77 168
Undistributed equity earnings (557) (67)
Net gain on asset dispositions (499) (3)
Other (94) (203)
Working capital adjustments 2,150 336
------------------ -----------------
Net cash provided by operating activities $ 6,873 4,800
================== =================
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $ 843 419
International 1,727 1,787
------------------ -----------------
2,570 2,206
Midstream - 1
R&M 205 1,635
LUKOIL Investment - 612
Chemicals - -
Emerging Businesses 31 12
Corporate and other 41 48
------------------ -----------------
$ 2,847 4,514
================== =================
OTHER
March 31, 2007 December 31, 2006
------------------ -----------------
Total debt $ 23,668 27,134
Common stockholders' equity $ 84,782 82,646
3
Conoco Phillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended
March 31
2007 2006
------------------ -----------------
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 276 283
Lower 48 104 64
------------------ -----------------
380 347
Norway 179 188
United Kingdom 55 62
Canada 21 22
China 38 25
Indonesia 13 14
Vietnam 23 31
Timor Sea 24 39
Libya 45 -
Other 62 49
------------------ -----------------
Total consolidated 840 777
Equity affiliates
Canada 23 -
Russia 15 16
Venezuela 82 110
------------------ -----------------
Total Worldwide 960 903
================== =================
Syncrude 23 16
================== =================
Natural gas liquids produced
United States
Alaska* 22 22
Lower 48 68 29
------------------ -----------------
90 51
Norway 8 11
Canada 31 9
Timor Sea 12 20
Other 9 6
------------------ -----------------
Total Worldwide 150 97
================== =================
*Includes reinjected volumes sold lease-to-lease. 16 14
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 122 163
Lower 48 2,190 1,264
------------------ -----------------
2,312 1,427
Norway 247 269
United Kingdom 785 851
Canada 1,152 424
China 11 -
Timor Sea 243 144
Indonesia 331 294
Vietnam 15 24
Libya 5 -
Other 212 121
------------------ -----------------
Total consolidated 5,313 3,554
Equity affiliates
Venezuela 9 11
------------------ -----------------
Total Worldwide 5,322 3,565
================== =================
*Represents quantities available for sale.
Excludes gas equivalent of NGL shown above.
Liquefied natural gas sales 492 264
LUKOIL Investment
Production (MBOE/D)* 445 322
Refinery crude oil throughput (MB/D)* 219 163
*Represents our estimated net share of LUKOIL.
4
Conoco Phillips
Houston, Texas 77079
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended
March 31
2007 2006
------------------ -----------------
E&P
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $ 55.50 58.87
Lower 48 49.32 52.21
Total U.S. 53.78 57.70
International 56.29 60.08
Total consolidated 55.17 58.97
Equity affiliates* 40.02 43.38
Total Worldwide 53.38 56.63
Natural gas (per MCF)
United States
Alaska 4.19 3.58
Lower 48 6.21 7.50
Total U.S. 6.19 7.42
International 6.49 7.16
Total consolidated 6.36 7.26
Equity affiliates* 0.48 0.23
Total Worldwide 6.35 7.24
*Excludes our equity share of LUKOIL reported in the LUKOIL Investment segment.
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 15 23
International - -
Equity affiliates
United States 174 178
International 8 6
------------------ -----------------
197 207
================== =================
Per Barrel
U.S. product prices
Weighted average NGL**
Consolidated $ 37.73 37.64
DCP 36.55 37.29
**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
Conoco Phillips
Houston, Texas 77079
Three Months Ended
March 31
2007 2006
------------------ -----------------
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,033 2,208
Crude oil runs 1,938 1,840
Refinery production 2,152 1,988
International*
Crude oil capacity 696 523
Crude oil runs 623 490
Refinery production 644 500
U.S. petroleum products outside sales
Gasoline 1,258 1,258
Distillates 862 813
Other products 480 517
------------------ -----------------
2,600 2,588
International 713 695
------------------ -----------------
3,313 3,283
================== =================
Per Gallon
U.S. average sales prices**
Gasoline-wholesale $ 1.86 1.79
Gasoline-retail 2.03 1.90
Distillates-wholesale 1.94 1.89
*Includes ConocoPhillips' share of equity affiliates, except for our share of LUKOIL,
which is reported in the LUKOIL Investment segment.
**Excludes excise taxes.
6
Exhibit 99.3
SUMMARY OF NET INCOME (LOSS) BY SEGMENT
Millions of Dollars
----------------------------------------------------------------------------------------------------
2006 2007
------------------------------------------------- --------------------------------------------------
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 1,181 1,300 995 872 4,348 916 916
International E&P 1,372 2,004 909 1,215 5,500 1,413 1,413
- ------------------------------------------------------------------------------- --------------------------------------------------
Total E&P 2,553 3,304 1,904 2,087 9,848 2,329 2,329
- ------------------------------------------------------------------------------- --------------------------------------------------
Midstream 110 108 169 89 476 85 85
- ------------------------------------------------------------------------------- --------------------------------------------------
U.S. R&M 297 1,433 1,444 741 3,915 896 896
International R&M 93 275 20 178 566 240 240
- ------------------------------------------------------------------------------- --------------------------------------------------
Total R&M 390 1,708 1,464 919 4,481 1,136 1,136
- ------------------------------------------------------------------------------- --------------------------------------------------
LUKOIL Investment 249 387 487 302 1,425 256 256
Chemicals 149 103 142 98 492 82 82
Emerging Businesses 8 (12) 11 8 15 (1) (1)
Corporate and Other (168) (412) (301) (306) (1,187) (341) (341)
- ------------------------------------------------------------------------------- --------------------------------------------------
Consolidated 3,291 5,186 3,876 3,197 15,550 3,546 3,546
=============================================================================== ==================================================
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 - - - - - - -
=============================================================================== ==================================================
Net Income (Loss)
U.S. E&P 1,181 1,300 995 872 4,348 916 916
International E&P 1,372 2,004 909 1,215 5,500 1,413 1,413
- ------------------------------------------------------------------------------- --------------------------------------------------
Total E&P 2,553 3,304 1,904 2,087 9,848 2,329 2,329
- ------------------------------------------------------------------------------- --------------------------------------------------
Midstream 110 108 169 89 476 85 85
- ------------------------------------------------------------------------------- --------------------------------------------------
U.S. R&M 297 1,433 1,444 741 3,915 896 896
International R&M 93 275 20 178 566 240 240
- ------------------------------------------------------------------------------- --------------------------------------------------
Total R&M 390 1,708 1,464 919 4,481 1,136 1,136
- ------------------------------------------------------------------------------- --------------------------------------------------
LUKOIL Investment 249 387 487 302 1,425 256 256
Chemicals 149 103 142 98 492 82 82
Emerging Businesses 8 (12) 11 8 15 (1) (1)
Corporate and Other (168) (412) (301) (306) (1,187) (341) (341)
- ------------------------------------------------------------------------------- --------------------------------------------------
Consolidated 3,291 5,186 3,876 3,197 15,550 3,546 3,546
=============================================================================== ==================================================
Page 1 of 12
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
Millions of Dollars
----------------------------------------------------------------------------------------------------
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
Income from Continuing
Operations
Before Income Taxes
U.S. E&P 1,853 2,062 1,598 1,380 6,893 1,425 1,425
International E&P 2,862 3,814 3,460 2,948 13,084 2,894 2,894
- ------------------------------------------------------------------------------- --------------------------------------------------
Total E&P 4,715 5,876 5,058 4,328 19,977 4,319 4,319
- ------------------------------------------------------------------------------- --------------------------------------------------
Midstream 173 187 214 150 724 132 132
- ------------------------------------------------------------------------------- --------------------------------------------------
U.S. R&M 512 2,260 2,282 1,195 6,249 1,400 1,400
International R&M 112 343 107 222 784 218 218
- ------------------------------------------------------------------------------- --------------------------------------------------
Total R&M 624 2,603 2,389 1,417 7,033 1,618 1,618
- ------------------------------------------------------------------------------- --------------------------------------------------
LUKOIL Investment 257 398 496 311 1,462 262 262
Chemicals 209 134 191 128 662 107 107
Emerging Businesses 9 (20) 14 11 14 (3) (3)
Corporate and Other (190) (496) (425) (428) (1,539) (369) (369)
- ------------------------------------------------------------------------------- --------------------------------------------------
Consolidated 5,797 8,682 7,937 5,917 28,333 6,066 6,066
=============================================================================== ==================================================
Income from Continuing
Operations
Effective Tax Rates
U.S. E&P 36.3% 37.0% 37.7% 36.8% 36.9% 35.7% 35.7%
International E&P 52.1% 47.5% 73.7% 58.8% 58.0% 51.2% 51.2%
- ------------------------------------------------------------------------------- --------------------------------------------------
Total E&P 45.9% 43.8% 62.4% 51.8% 50.7% 46.1% 46.1%
- ------------------------------------------------------------------------------- --------------------------------------------------
Midstream 36.4% 42.2% 21.0% 40.7% 34.3% 35.6% 35.6%
- ------------------------------------------------------------------------------- --------------------------------------------------
U.S. R&M 42.0% 36.6% 36.7% 38.0% 37.3% 36.0% 36.0%
International R&M 17.0% 19.8% 81.3% 19.8% 27.8% -10.1% -10.1%
- ------------------------------------------------------------------------------- --------------------------------------------------
Total R&M 37.5% 34.4% 38.7% 35.1% 36.3% 29.8% 29.8%
- ------------------------------------------------------------------------------- --------------------------------------------------
LUKOIL Investment 3.1% 2.8% 1.8% 2.9% 2.5% 2.3% 2.3%
Chemicals 28.7% 23.1% 25.7% 23.4% 25.7% 23.4% 23.4%
Emerging Businesses 11.1% 40.0% 21.4% 27.3% -7.1% 66.7% 66.7%
Corporate and Other 11.6% 16.9% 29.2% 28.5% 22.9% 7.6% 7.6%
- ------------------------------------------------------------------------------- --------------------------------------------------
Consolidated 43.2% 40.3% 51.2% 46.0% 45.1% 41.5% 41.5%
=============================================================================== ==================================================
Page 2 of 12
CERTAIN ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS (AFTER-TAX)
Millions of Dollars
----------------------------------------------------------------------------------------------------
2006 2007
------------------------------------------------- --------------------------------------------------
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 - 15 - 33 48 36 36
Impairments - (26) - (10) (36) - -
Insurance premium adjustments (2) - (5) (4) (11) - -
Pending claims and
settlements - - 18 - 18 - -
Business interruption
insurance claims recovery - - 15 - 15 - -
Enacted tax legislation - 2 - - 2 - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total (2) (9) 28 19 36 36 36
- ------------------------------------------------------------------------------- --------------------------------------------------
International E&P
Gain (loss) on asset sales - 25 - - 25 407 407
Insurance premium adjustments (10) - (10) (8) (28) - -
International tax law changes - 401 (270) (31) 100 38 38
Impairments - - (4) (104) (108) (88) (88)
Business interruption
insurance claims recovery - - 11 3 14 - -
Pending claims and
settlements - - - 25 25 - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total (10) 426 (273) (115) 28 357 357
- ------------------------------------------------------------------------------- --------------------------------------------------
Total E&P (12) 417 (245) (96) 64 393 393
- ------------------------------------------------------------------------------- --------------------------------------------------
Midstream
Business interruption
insurance claims recovery - - - 5 5 - -
DCP Midstream's sale of TEPPCO
general ptnr - - 30 - 30 - -
Enacted tax legislation - (6) - - (6) - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total - (6) 30 5 29 - -
- ------------------------------------------------------------------------------- --------------------------------------------------
U.S. R&M
Impairments - - (35) (192) (227) (13) (13)
Insurance premium adjustments (6) - (7) (6) (19) - -
Business interruption
insurance claims recovery - - 111 - 111 - -
Enacted tax legislation - 34 - - 34 - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total (6) 34 69 (198) (101) (13) (13)
- ------------------------------------------------------------------------------- --------------------------------------------------
International R&M
Impairments - - (214) - (214) 148 148
Insurance premium adjustments (1) - (1) (1) (3) - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total (1) - (215) (1) (217) 148 148
- ------------------------------------------------------------------------------- --------------------------------------------------
Total R&M (7) 34 (146) (199) (318) 135 135
- ----------------------------------------------------------------------------------------------------------------------------------
LUKOIL Investment
Ownership interest adjustment - - 23 - 23 - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total - - 23 - 23 - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Chemicals
Business interruption
insurance claims recovery - - 7 13 20 - -
Asset retirements recorded by
CPChem - - - (16) (16) - -
Enacted tax legislation - (5) - - (5) - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total - (5) 7 (3) (1) - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Emerging Businesses
Property write-down - (14) - - (14) - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total - (14) - - (14) - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Corporate and Other
Acquisition-related expenses (5) (39) (32) (22) (98) (13) (13)
Premium on early debt
retirement - - - - - (14) (14)
Pending claims and
settlements (15) - - - (15) - -
Canada tax law change - (10) - - (10) - -
- ------------------------------------------------------------------------------- --------------------------------------------------
Total (20) (49) (32) (22) (123) (27) (27)
- ------------------------------------------------------------------------------- --------------------------------------------------
Total Company (39) 377 (363) (315) (340) 501 501
=============================================================================== ==================================================
Page 3 of 12
CASH FLOW INFORMATION
Millions of Dollars
----------------------------------------------------------------------------------------------------
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
Cash Flows from Operating
Activities
Net income 3,291 5,186 3,876 3,197 15,550 3,546 3,546
DD&A and impairments 1,180 2,015 2,404 2,368 7,967 2,023 2,023
Dry hole costs and leasehold
impairments 38 47 56 210 351 148 148
Accretion on discounted
liabilities 60 73 74 74 281 79 79
Deferred income taxes 168 (390) 495 (56) 217 77 77
Undistributed equity
earnings (67) (687) (253) 62 (945) (557) (557)
Net gain on asset
dispositions (3) (53) (8) (52) (116) (499) (499)
Other (203) 189 (282) 95 (201) (94) (94)
Net working capital changes 336 (1,536) (127) (261) (1,588) 2,150 2,150
- ------------------------------------------------------------------------------- --------------------------------------------------
Net Cash Provided by
Operating Activities 4,800 4,844 6,235 5,637 21,516 6,873 6,873
- ------------------------------------------------------------------------------- --------------------------------------------------
Cash Flows from Investing
Activities
Capital expenditures and
investments*:
E&P (2,206) (2,172) (2,454) (2,681) (9,513) (2,570) (2,570)
Midstream (1) (1) - (2) (4) - -
R&M (1,635) (475) (374) (532) (3,016) (205) (205)
LUKOIL Investment (612) (648) (702) (753) (2,715) - -
Chemicals - - - - - - -
Emerging Businesses (12) (28) (6) (37) (83) (31) (31)
Corporate and Other (48) (78) (61) (78) (265) (41) (41)
- ------------------------------------------------------------------------------- --------------------------------------------------
Total capital expend. &
investments (4,514) (3,402) (3,597) (4,083) (15,596) (2,847) (2,847)
Acquisition of Burlington
Resources Inc.* (14,190) (94) (1) - (14,285) - -
Proceeds from asset
dispositions 5 68 173 299 545 1,343 1,343
Long-term advances
to/collections from
affiliates and other
investments (115) (151) (251) (140) (657) (144) (144)
- ------------------------------------------------------------------------------- --------------------------------------------------
Net Cash Used for Investing
Activities (18,814) (3,579) (3,676) (3,924) (29,993) (1,648) (1,648)
- ------------------------------------------------------------------------------- --------------------------------------------------
Cash Flows from Financing
Activities
Net issuance (repayment) of
debt 15,324 (2,756) (1,630) (706) 10,232 (3,491) (3,491)
Issuance of stock 40 64 41 75 220 40 40
Repurchase of stock - (425) (250) (250) (925) (1,000) (1,000)
Dividends (496) (595) (593) (593) (2,277) (674) (674)
Other (27) (20) (76) (62) (185) (49) (49)
- ------------------------------------------------------------------------------- --------------------------------------------------
Net Cash Provided by (Used
for)
Financing Activities 14,841 (3,732) (2,508) (1,536) 7,065 (5,174) (5,174)
- ------------------------------------------------------------------------------- --------------------------------------------------
Effect of Exchange Rate
Changes (33) 113 (9) (56) 15 (8) (8)
- ------------------------------------------------------------------------------- --------------------------------------------------
Net Change in Cash
and Cash Equivalents 794 (2,354) 42 121 (1,397) 43 43
Cash and cash equivalents
at beginning of period 2,214 3,008 654 696 2,214 817 817
- ------------------------------------------------------------------------------- --------------------------------------------------
Cash and Cash Equivalents
at End of Period 3,008 654 696 817 817 860 860
=============================================================================== ==================================================
* Net of cash acquired.
Page 4 of 12
TOTAL E&P
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
E&P Net Income ($ Millions) 2,553 3,304 1,904 2,087 9,848 2,329 2,329
=============================================================================== ==================================================
Production
Total, Including Equity
Affiliates
and Canadian Syncrude
(MBOE/D) 1,610 2,134 2,036 2,047 1,957 2,020 2,020
- ------------------------------------------------------------------------------- --------------------------------------------------
E&P segment plus LUKOIL
Investment segment: 1,932 2,537 2,472 2,485 2,358 2,465 2,465
- ------------------------------------------------------------------------------- --------------------------------------------------
Crude Oil and Condensate
(MB/D)
Consolidated 777 924 865 859 856 840 840
Equity affiliates 126 121 104 113 116 120 120
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 903 1,045 969 972 972 960 960
=============================================================================== ==================================================
Sales of crude oil produced
(MB/D) 913 1,040 953 988 973 949 949
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas Liquids (MB/D) 97 152 146 150 136 150 150
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas (MMCF/D)
Consolidated 3,554 5,498 5,379 5,387 4,961 5,313 5,313
Equity affiliates 11 10 8 7 9 9 9
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 3,565 5,508 5,387 5,394 4,970 5,322 5,322
==================================================================================================================================
Canadian Syncrude (MB/D) 16 19 23 26 21 23 23
- ------------------------------------------------------------------------------- --------------------------------------------------
Industry Prices (Platt's)
Crude Oil ($/bbl)
WTI spot 63.28 70.40 70.38 59.94 66.00 57.99 57.99
Brent dated 61.75 69.62 69.49 59.68 65.14 57.76 57.76
Natural Gas ($/mmbtu)
Henry Hub -- First of
Month 9.01 6.80 6.58 6.56 7.24 6.77 6.77
- ------------------------------------------------------------------------------- --------------------------------------------------
Average Realized Prices
Crude Oil and Condensate
($/bbl)
Consolidated 58.97 65.89 67.37 56.87 62.39 55.17 55.17
Equity affiliates 43.38 52.28 46.98 41.79 46.01 40.02 40.02
Total 56.63 64.34 65.04 55.10 60.37 53.38 53.38
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas Liquids ($/bbl) 43.13 41.75 43.62 38.23 41.50 38.56 38.56
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas ($/mcf)
Consolidated 7.26 5.86 5.92 6.13 6.20 6.36 6.36
Equity affiliates 0.23 0.36 0.32 0.32 0.30 0.48 0.48
Total 7.24 5.85 5.91 6.12 6.19 6.35 6.35
- ------------------------------------------------------------------------------- --------------------------------------------------
Exploration Charges ($
Millions)
Dry Holes 19 15 18 142 194 62 62
Lease Impairments 19 33 37 68 157 86 86
- ------------------------------------------------------------------------------- --------------------------------------------------
Total Non-Cash Charges 38 48 55 210 351 148 148
Other (G&G and Lease
Rentals) 74 86 142 181 483 114 114
- ------------------------------------------------------------------------------- --------------------------------------------------
Total Exploration Charges 112 134 197 391 834 262 262
=============================================================================== ==================================================
Depreciation, Depletion and
Amortization (DD&A) ($
Millions) 910 1,659 1,860 1,703 6,132 1,802 1,802
- ------------------------------------------------------------------------------- --------------------------------------------------
Page 5 of 12
U.S. E&P
2006 2007
------------------------------------------------- --------------------------------------------------
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) 1,181 1,300 995 872 4,348 916 916
=============================================================================== ==================================================
Alaska ($ Millions) 692 760 425 470 2,347 507 507
- ------------------------------------------------------------------------------- --------------------------------------------------
Lower 48 ($ Millions) 489 540 570 402 2,001 409 409
- ------------------------------------------------------------------------------- --------------------------------------------------
Production
Total U.S. (MBOE/D) 636 894 846 856 808 855 855
- ------------------------------------------------------------------------------- --------------------------------------------------
Crude Oil and Condensate
(MB/D)
Alaska 283 279 234 257 263 276 276
Lower 48 64 120 119 113 104 104 104
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 347 399 353 370 367 380 380
=============================================================================== ==================================================
Sales of crude oil produced
(MB/D) 363 398 355 371 371 372 372
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas Liquids (MB/D)*
Alaska 22 20 11 17 17 22 22
Lower 48 29 70 75 72 62 68 68
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 51 90 86 89 79 90 90
=============================================================================== ==================================================
*Includes reinjection volumes
sold lease-to-lease: 14 14 7 9 11 16 16
- ----------------------------------------------------------------------------------------------------------------------------------
Natural Gas (MMCF/D)
Alaska 163 163 123 131 145 122 122
Lower 48 1,264 2,265 2,320 2,250 2,028 2,190 2,190
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 1,427 2,428 2,443 2,381 2,173 2,312 2,312
=============================================================================== ==================================================
Average Realized Prices
Crude Oil and Condensate
($/bbl)
Alaska
North Slope 52.92 59.89 62.85 51.11 58.43 48.83 48.83
- ------------------------------------------------------------------------------- --------------------------------------------------
West Coast 58.87 66.02 69.66 57.00 62.66 55.50 55.50
- ------------------------------------------------------------------------------- --------------------------------------------------
Lower 48 52.21 59.63 62.45 51.26 57.04 49.32 49.32
- ------------------------------------------------------------------------------- --------------------------------------------------
Total U.S. 57.70 64.09 67.25 55.26 61.09 53.78 53.78
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas Liquids ($/bbl)
Alaska 58.88 65.25 67.12 57.03 61.06 55.27 55.27
- ------------------------------------------------------------------------------- --------------------------------------------------
Lower 48 38.20 38.29 41.34 34.51 38.10 36.46 36.46
- ------------------------------------------------------------------------------- --------------------------------------------------
Total U.S. 43.00 40.45 42.68 36.74 40.35 37.86 37.86
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas ($/mcf)
Alaska 3.58 3.42 3.36 4.05 3.59 4.19 4.19
- ------------------------------------------------------------------------------- --------------------------------------------------
Lower 48 7.50 5.81 6.00 5.85 6.14 6.21 6.21
- ------------------------------------------------------------------------------- --------------------------------------------------
Total U.S. 7.42 5.78 5.98 5.84 6.11 6.19 6.19
- ------------------------------------------------------------------------------- --------------------------------------------------
Kenai, Alaska LNG Sales
Volume (MMCF/D) 128 126 110 88 113 104 104
- ------------------------------------------------------------------------------- --------------------------------------------------
Sales price per MCF 6.45 5.16 6.16 6.33 6.00 5.83 5.83
- ------------------------------------------------------------------------------- --------------------------------------------------
U.S. Exploration Charges ($
Millions)
Dry Holes 8 3 8 67 86 13 13
Lease Impairments 8 15 13 46 82 43 43
- ------------------------------------------------------------------------------- --------------------------------------------------
Total Non-Cash Charges 16 18 21 113 168 56 56
Other (G&G and Lease
Rentals) 14 1 66 55 136 26 26
- ------------------------------------------------------------------------------- --------------------------------------------------
Total U.S. Exploration
Charges 30 19 87 168 304 82 82
=============================================================================== ==================================================
Alaska Only 18 (7) 50 21 82 17 17
- ------------------------------------------------------------------------------- --------------------------------------------------
DD&A ($ Millions)
Alaska 132 135 137 151 555 168 168
Lower 48 251 634 784 623 2,292 618 618
- ------------------------------------------------------------------------------- --------------------------------------------------
Total U.S. 383 769 921 774 2,847 786 786
=============================================================================== ==================================================
Page 6 of 12
INTERNATIONAL E&P
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
International E&P
Net Income ($ Millions) 1,372 2,004 909 1,215 5,500 1,413 1,413
=============================================================================== ==================================================
Production
Total, Including Equity
Affiliates
and Canadian Syncrude
(MBOE/D) 974 1,240 1,190 1,191 1,149 1,165 1,165
- ------------------------------------------------------------------------------- --------------------------------------------------
Crude Oil and Condensate
(MB/D)
Consolidated
Norway 188 192 190 185 189 179 179
United Kingdom 62 57 50 56 56 55 55
Canada 22 27 26 27 25 21 21
China 25 34 36 36 33 38 38
Indonesia 14 14 11 10 12 13 13
Vietnam 31 22 24 23 25 23 23
Timor Sea 39 39 40 27 36 24 24
Libya - 74 71 56 50 45 45
Other 49 66 64 69 63 62 62
Equity affiliates
Canada - - - - - 23 23
Russia 16 15 15 14 15 15 15
Venezuela 110 106 89 99 101 82 82
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 556 646 616 602 605 580 580
=============================================================================== ==================================================
Sales of crude oil produced
(MB/D) 550 642 598 617 602 577 577
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas Liquids (MB/D)
Norway 11 8 9 8 9 8 8
Canada 9 30 28 31 25 31 31
Timor Sea 20 20 20 15 18 12 12
Other 6 4 3 7 5 9 9
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 46 62 60 61 57 60 60
=============================================================================== ==================================================
Natural Gas (MMCF/D)
Consolidated
Norway 269 260 260 291 270 247 247
United Kingdom 851 796 665 734 761 785 785
Canada 424 1,204 1,154 1,140 983 1,152 1,152
China - 10 8 9 7 11 11
Timor Sea 144 251 300 243 235 243 243
Indonesia 294 323 342 315 319 331 331
Vietnam 24 19 20 20 21 15 15
Libya - - - 17 4 5 5
Other 121 207 187 237 188 212 212
Equity affiliates
Canada - - - - - - -
Russia - - - - - - -
Venezuela 11 10 8 7 9 9 9
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 2,138 3,080 2,944 3,013 2,797 3,010 3,010
=============================================================================== ==================================================
Canadian Syncrude (MB/D) 16 19 23 26 21 23 23
- ------------------------------------------------------------------------------- --------------------------------------------------
Darwin, Australia LNG Sales
(MMCF/D) 136 305 411 382 310 388 388
- ------------------------------------------------------------------------------- --------------------------------------------------
Page 7 of 12
INTERNATIONAL E&P (continued)
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
Average Realized Prices
Crude Oil and Condensate
($/bbl)
Consolidated
Norway 61.36 68.64 68.48 60.07 64.61 57.36 57.36
United Kingdom 59.13 65.32 64.67 58.71 62.08 55.52 55.52
Canada 44.28 60.86 61.00 49.28 54.25 48.70 48.70
China 57.90 66.68 64.68 51.06 60.00 54.93 54.93
Indonesia 57.94 58.15 62.69 52.21 57.80 54.66 54.66
Vietnam 62.34 68.53 71.35 56.77 64.75 57.88 57.88
Timor Sea 60.37 66.98 66.84 57.27 63.21 59.15 59.15
Libya - 68.07 67.75 58.19 65.11 56.19 56.19
Other 62.95 69.20 70.39 60.92 65.85 55.73 55.73
Equity affiliates
Canada - - - - - 32.46 32.46
Russia 40.86 46.87 48.29 36.86 43.20 37.92 37.92
Venezuela 43.71 53.03 46.78 42.48 46.40 42.54 42.54
Total 55.92 64.50 63.73 55.00 59.92 53.12 53.12
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas Liquids ($/bbl)
Norway 42.55 40.99 43.91 39.46 41.61 38.82 38.82
Canada 46.21 46.73 46.16 43.87 45.62 41.15 41.15
Timor Sea 46.68 41.35 45.63 41.62 43.95 44.13 44.13
Other 27.16 33.82 26.79 19.33 26.23 27.18 27.18
Total 43.25 43.28 44.89 40.25 42.89 39.38 39.38
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas ($/mcf)
Consolidated
Norway 7.28 7.09 7.48 8.58 7.61 7.00 7.00
United Kingdom 8.81 6.84 7.08 8.52 7.85 8.14 8.14
Canada 6.28 5.47 5.43 5.91 5.67 6.38 6.38
China - 1.90 4.11 2.80 2.87 2.64 2.64
Timor Sea 0.67 0.65 0.69 0.74 0.69 0.76 0.76
Indonesia 7.45 7.53 6.71 5.78 6.86 6.04 6.04
Vietnam 1.07 1.07 1.07 1.05 1.06 1.10 1.10
Libya - - - 0.09 0.09 0.07 0.07
Other 0.82 2.57 2.04 2.02 1.98 2.71 2.71
Equity affiliates
Canada - - - - - - -
Russia - - - - - - -
Venezuela 0.23 0.36 0.32 0.32 0.30 0.29 0.29
Total 7.13 5.90 5.85 6.36 6.25 6.47 6.47
- ------------------------------------------------------------------------------- --------------------------------------------------
International Exploration
Charges ($ Millions)
Dry Holes 11 12 10 75 108 49 49
Lease Impairments 11 18 24 22 75 43 43
- ------------------------------------------------------------------------------- --------------------------------------------------
Total Non-Cash Charges 22 30 34 97 183 92 92
Other (G&G and Lease
Rentals) 60 85 76 126 347 88 88
- ------------------------------------------------------------------------------- --------------------------------------------------
Total International
Exploration Charges 82 115 110 223 530 180 180
=============================================================================== ==================================================
DD&A ($ Millions) 527 890 939 929 3,285 1,016 1,016
- ------------------------------------------------------------------------------- --------------------------------------------------
Page 8 of 12
R&M
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
R&M Net Income ($ Millions) 390 1,708 1,464 919 4,481 1,136 1,136
=============================================================================== ==================================================
United States ($ Millions) 297 1,433 1,444 741 3,915 896 896
- ------------------------------------------------------------------------------- --------------------------------------------------
International ($ Millions) 93 275 20 178 566 240 240
- ------------------------------------------------------------------------------- --------------------------------------------------
Market Indicators
U.S. East Coast Crack Spread
($/bbl) 7.52 15.21 10.54 7.86 10.28 11.81 11.81
U.S. Gulf Coast Crack Spread
($/bbl) 8.28 17.26 11.00 6.77 10.83 10.06 10.06
U.S. Group Central Crack
Spread ($/bbl) 9.81 19.60 17.75 10.11 14.32 14.84 14.84
U.S. West Coast Crack Spread
($/bbl) 18.87 32.47 21.70 20.36 23.35 28.68 28.68
U.S. Weighted 3:2:1 Crack
Spread ($/bbl) 10.56 20.39 14.86 10.49 14.07 15.30 15.30
NW Europe Crack Spread
($/bbl) 10.18 15.20 14.18 11.46 12.75 12.06 12.06
Singapore 3:1:2 Crack Spread
($/bbl) 10.58 19.30 15.13 11.03 14.01 14.06 14.06
U.S. Wholesale Gasoline Mktg
Mrgn ($/bbl) 0.71 1.83 5.75 1.81 2.52 1.15 1.15
- ------------------------------------------------------------------------------- --------------------------------------------------
Realized Margins
Refining Margin ($/bbl)
U.S. 10.18 17.23 14.10 11.39 13.29 11.87 11.87
International 5.30 7.64 6.46 6.22 6.50 5.06 5.06
- ------------------------------------------------------------------------------- --------------------------------------------------
Marketing Margin ($/bbl)*
U.S. 0.12 0.48 2.92 1.34 1.23 1.31 1.31
International 6.07 6.67 11.17 9.50 8.38 7.08 7.08
- ------------------------------------------------------------------------------- --------------------------------------------------
DD&A ($ Millions) 239 253 246 266 1,004 191 191
- ------------------------------------------------------------------------------- --------------------------------------------------
Turnaround Expense ($
Millions) 163 115 42 94 414 75 75
- ------------------------------------------------------------------------------- --------------------------------------------------
Eastern U.S.
Crude Oil Charge Input (MB/D) 354 281 377 411 356 411 411
Total Charge Input (MB/D) 359 309 418 457 386 460 460
Crude Oil Capacity
Utilization (%) 84% 66% 89% 97% 84% 97% 97%
Clean Product Yield (%) 90% 87% 88% 90% 89% 89% 89%
- ------------------------------------------------------------------------------- --------------------------------------------------
U.S. Gulf Coast
Crude Oil Charge Input (MB/D) 529 681 730 737 670 744 744
Total Charge Input (MB/D) 587 777 822 812 750 823 823
Crude Oil Capacity
Utilization (%) 72% 93% 100% 101% 91% 102% 102%
Clean Product Yield (%) 74% 81% 83% 80% 80% 81% 81%
- ------------------------------------------------------------------------------- --------------------------------------------------
Western U.S.
Crude Oil Charge Input (MB/D) 386 419 420 397 406 333 333
Total Charge Input (MB/D) 419 443 446 426 433 375 375
Crude Oil Capacity
Utilization (%) 94% 101% 102% 96% 98% 81% 81%
Clean Product Yield (%) 79% 81% 80% 79% 80% 79% 79%
- ------------------------------------------------------------------------------- --------------------------------------------------
Central U.S. - Consolidated
Crude Oil Charge Input (MB/D) 571 619 600 583 593 185 185
Total Charge Input (MB/D) 613 663 638 621 634 188 188
Crude Oil Capacity
Utilization (%) 89% 97% 94% 91% 93% 99% 99%
Clean Product Yield (%) 84% 86% 85% 85% 85% 88% 88%
- ------------------------------------------------------------------------------- --------------------------------------------------
Central U.S. - Equity
Affiliates - Net Share**
Crude Oil Charge Input (MB/D) - - - - - 265 265
Total Charge Input (MB/D) - - - - - 288 288
Crude Oil Capacity
Utilization (%) - - - - - 96% 96%
Clean Product Yield (%) - - - - - 82% 82%
- ------------------------------------------------------------------------------- --------------------------------------------------
TOTAL UNITED STATES
Crude Oil Charge Input (MB/D) 1,840 2,000 2,127 2,128 2,025 1,938 1,938
Total Charge Input (MB/D) 1,978 2,192 2,324 2,316 2,203 2,134 2,134
Crude Oil Capacity
Utilization (%) 83% 91% 96% 96% 92% 95% 95%
Clean Product Yield (%) 81% 83% 84% 83% 83% 83% 83%
- ------------------------------------------------------------------------------- --------------------------------------------------
Refined Products Production
(MB/D)
Gasoline 890 1,031 1,084 1,061 1,017 962 962
Distillates 684 764 821 824 774 762 762
Other 414 403 429 440 422 428 428
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 1,988 2,198 2,334 2,325 2,213 2,152 2,152
=============================================================================== ==================================================
Petroleum Products Sales
(MB/D)
Gasoline 1,258 1,300 1,369 1,416 1,336 1,258 1,258
Distillates 813 820 848 921 850 862 862
Other 517 555 519 535 531 480 480
- ----------------------------------------------------------------------------------------------------------------------------------
Total 2,588 2,675 2,736 2,872 2,717 2,600 2,600
==================================================================================================================================
* Represents marketing sales price less product costs for all distribution channels other than commercial product supply.
** Represents a 50 percent and 85 percent interest in the Wood River and Borger refineries, respectively. These refineries
were contributed to a business venture with EnCana, effective January 1, 2007.
Page 9 of 12
R&M (continued)
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
International - Consolidated*
Crude Oil Charge Input (MB/D) 357 505 474 461 450 503 503
Total Charge Input (MB/D) 369 550 503 494 479 532 532
Crude Oil Capacity
Utilization (%) 94% 92% 86% 83% 88% 91% 91%
Clean Product Yield (%) 71% 64% 69% 72% 69% 68% 68%
- ------------------------------------------------------------------------------- --------------------------------------------------
International - Equity
Affiliates - Net Share**
Crude Oil Charge Input (MB/D) 133 144 143 144 141 120 120
Total Charge Input (MB/D) 137 149 149 147 145 121 121
Crude Oil Capacity
Utilization (%) 94% 102% 102% 102% 100% 83% 83%
Clean Product Yield (%) 82% 82% 81% 80% 81% 77% 77%
- ------------------------------------------------------------------------------- --------------------------------------------------
TOTAL INTERNATIONAL
Crude Oil Charge Input (MB/D) 490 649 617 605 591 623 623
Total Charge Input (MB/D) 506 699 652 641 624 653 653
Crude Oil Capacity
Utilization (%) 94% 94% 89% 87% 91% 90% 90%
Clean Product Yield (%) 74% 68% 72% 74% 72% 70% 70%
- ------------------------------------------------------------------------------- --------------------------------------------------
Refined Products Production
(MB/D)
Gasoline 142 165 165 172 161 160 160
Distillates 228 297 288 291 276 289 289
Other 130 233 190 170 181 195 195
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 500 695 643 633 618 644 644
=============================================================================== ==================================================
Petroleum Products Sales
(MB/D)
Gasoline 197 225 204 186 203 176 176
Distillates 339 397 374 399 377 381 381
Other 159 249 171 135 179 156 156
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 695 871 749 720 759 713 713
=============================================================================== ==================================================
Worldwide - Including Net
Share of Equity Affiliates
Crude Oil Charge Input (MB/D) 2,330 2,649 2,744 2,733 2,616 2,561 2,561
Total Charge Input (MB/D) 2,484 2,891 2,976 2,957 2,827 2,787 2,787
Crude Oil Capacity
Utilization (%) 85% 91% 95% 94% 92% 94% 94%
Clean Product Yield (%) 79% 80% 81% 81% 80% 80% 80%
- ------------------------------------------------------------------------------- --------------------------------------------------
Refined Products Production
(MB/D)
Gasoline 1,032 1,196 1,249 1,233 1,178 1,122 1,122
Distillates 912 1,061 1,109 1,115 1,050 1,051 1,051
Other 544 636 619 610 603 623 623
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 2,488 2,893 2,977 2,958 2,831 2,796 2,796
=============================================================================== ==================================================
Petroleum Products Sales
(MB/D)
Gasoline 1,455 1,525 1,573 1,602 1,539 1,434 1,434
Distillates 1,152 1,217 1,222 1,320 1,227 1,243 1,243
Other 676 804 690 670 710 636 636
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 3,283 3,546 3,485 3,592 3,476 3,313 3,313
=============================================================================== ==================================================
* Represents our Humber refinery in the United Kingdom, the Whitegate refinery in Ireland, and, effective March 1, 2006, our
Wilhelmshaven refinery in Germany.
** Represents 18.75 percent interest in a refinery complex in Karlsruhe, Germany; 16.33 percent interest in two refineries in
Kralupy and Litvinov, Czech Republic; and 47 percent interest in a refinery in Melaka, Malaysia.
Page 10 of 12
LUKOIL INVESTMENT
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
LUKOIL Investment
Net Income ($ Millions) 249 387 487 302 1,425 256 256
=============================================================================== ==================================================
Upstream
Production*
Net crude oil production
(MB/D) 306 346 388 397 360 393 393
Net natural gas production
(MMCF/D) 98 343 288 247 244 309 309
BOE Total (MBOE/D) 322 403 436 438 401 445 445
- ------------------------------------------------------------------------------- --------------------------------------------------
* Represents our estimated net share of LUKOIL's production.
Industry Prices
Crude Oil ($/bbl)
Urals crude (CIF
Mediterranean) 58.25 64.85 65.81 56.48 61.35 53.96 53.96
- ------------------------------------------------------------------------------- --------------------------------------------------
Downstream
Refinery Throughput*
Crude Processed (MB/D) 163 168 164 220 179 219 219
- ------------------------------------------------------------------------------- --------------------------------------------------
* Represents our estimated net share of LUKOIL's crude processed.
MIDSTREAM
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
Midstream Net Income ($
Millions) 110 108 169 89 476 85 85
=============================================================================== ==================================================
U.S. Equity Affiliate ($
Millions)* 93 91 128 73 385 50 50
- ------------------------------------------------------------------------------- --------------------------------------------------
Natural Gas Liquids Extracted
(MB/D)
Consolidated
United States 23 22 23 21 22 15 15
International - - - - - - -
Equity Affiliates
United States* 178 183 180 181 181 174 174
International 6 6 7 7 6 8 8
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 207 211 210 209 209 197 197
=============================================================================== ==================================================
* Represents 50 percent interest in DCP Midstream.
Natural Gas Liquids
Fractionated (MB/D)
United States* 141 125 124 136 131 161 161
International 11 14 14 12 13 13 13
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 152 139 138 148 144 174 174
=============================================================================== ==================================================
* Excludes DCP Midstream
Product Prices
Weighted Average NGL ($/bbl)*
Consolidated 37.64 41.73 44.10 37.41 40.22 37.73 37.73
DCP Midstream 37.29 41.18 43.00 36.34 39.45 36.55 36.55
- ------------------------------------------------------------------------------- --------------------------------------------------
* Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by natural gas liquids
component and location mix.
DD&A ($ Millions) 7 8 7 7 29 4 4
- ------------------------------------------------------------------------------- --------------------------------------------------
Page 11 of 12
CHEMICALS
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
Chemicals
Net Income (Loss) ($
Millions) 149 103 142 98 492 82 82
=============================================================================== ==================================================
Industry Margins (Cents/Lb)*
Ethylene industry cash margin 20.5 14.3 17.0 16.0 17.0 11.1 11.1
HDPE industry contract sales
margin 15.9 14.0 13.9 11.9 13.9 13.5 13.5
Styrene industry contract
sales margin 12.5 11.9 11.3 11.5 11.8 11.1 11.1
- ----------------------------------------------------------------------------------------------------------------------------------
* 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.
EMERGING BUSINESSES
2006 2007
------------------------------------------------- --------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
------------------------------------------------- --------------------------------------------------
Emerging Businesses
Net Income (Loss) ($
Millions) 8 (12) 11 8 15 (1) (1)
=============================================================================== ==================================================
Detail of Net Income (Loss)
($ Millions)
Power 31 3 26 22 82 13 13
Technology Solutions (12) (4) (3) (4) (23) (3) (3)
Other (11) (11) (12) (10) (44) (11) (11)
- ------------------------------------------------------------------------------- --------------------------------------------------
Total 8 (12) 11 8 15 (1) (1)
=============================================================================== ==================================================
CORPORATE AND OTHER
2006 2007
------------------------------------------------- --------------------------------------------------
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) (168) (412) (301) (306) (1,187) (341) (341)
=============================================================================== ==================================================
Detail of Net Income (Loss)
($ Millions)
Net interest expense (93) (267) (242) (268) (870) (244) (244)
Corporate overhead (26) (39) (35) (33) (133) (23) (23)
Acquisition-related expenses (5) (39) (32) (22) (98) (13) (13)
Other (44) (67) 8 17 (86) (61) (61)
- ------------------------------------------------------------------------------- --------------------------------------------------
Total (168) (412) (301) (306) (1,187) (341) (341)
=============================================================================== ==================================================
Before-Tax Net Interest
Expense ($ Millions)
Interest expense (226) (468) (417) (434) (1,545) (395) (395)
Capitalized interest 111 107 110 130 458 135 135
Interest revenue 30 35 38 2 105 31 31
Premium on early debt
retirement - - - - - (17) (17)
- ------------------------------------------------------------------------------- --------------------------------------------------
(85) (326) (269) (302) (982) (246) (246)
=============================================================================== ==================================================
Debt
Total Debt ($ Millions) 32,193 29,510 27,807 27,134 27,134 23,668 23,668
Debt-to-Capital Ratio 30% 27% 25% 24% 24% 22% 22%
- ------------------------------------------------------------------------------- --------------------------------------------------
Page 12 of 12
