30 Reconciliation of Adjusted Return on Capital Return on capital, excluding growth investments is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because it provides greater insight with respect to the underlying operating performance of the company’s productive assets. The company has significant growth investments underway in its upstream and downstream businesses, as previously noted, with expected completion dates over the next several years. As these investments generally require a period of time before they are productive, management believes that a return on capital measure excluding these growth investments is more representative of current operating performance. 2Q'06 1Q'06 4Q'05 3Q'05 2Q'05 2006 YTD Bloomberg 2Q'06 Bloomberg 1Q'06 Bloomberg Bloomberg Bloomberg In Millions Annlzd Method Annlzd Method Annlzd Method Method Method Numerator (Sum Total) $3,435 $2,501 $3,754 $2,159 $3,116 $1,753 $1,767 $1,748 Russia & Bohai Net Loss ($99) ($78) ($88) ($86) ($110) ($71) ($48) ($41) Adjusted Net Income $3,534 $2,579 $3,841 $2,245 $3,226 $1,824 $1,815 $1,789 Average Balances Denominator (Sum Total) $22,331 $22,427 $23,013 $22,247 $21,968 $21,153 $21,185 $20,968 Capital Projects in Progress, Russia & Bohai Capital Base $3,057 $2,330 $3,220 $2,139 $2,892 $1,981 $1,736 $1,539 Adjusted Capital Base $19,274 $20,097 $19,792 $20,108 $19,076 $19,172 $19,449 $19,429 Return on Capital Excluding Growth Investments 18.3% 12.8% 19.4% 11.2% 16.9% 9.5% 9.3% 9.2% |
