Exhibit 99.1
Unocal Corporation
2141 Rosecrans Avenue, Suite 4000
El Segundo, California 90245
[UNOCAL 76 LOGO]
NEWS RELEASE
Contact: Barry Lane (Media)
310-726-7731
Robert Wright (Investors)
310-726-7665
Unocal 3Q 2003 net earnings up 54% from year earlier; 9-months up 97% over 2002
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El Segundo, Calif. Oct. 30, 2003 - Unocal Corporation (NYSE: UCL) today
reported net earnings in the third quarter of $152 million, or 58 cents per
share (diluted). This compares with net earnings of $99 million, or 41 cents
per share (diluted), in the same period a year ago and $177 million, or 68 cents
per share (diluted), in the second quarter 2003.
Unocal's adjusted after-tax earnings for the third quarter 2003 were $190
million, or 72 cents per share (diluted). This compares with the Thomson/First
Call consensus (published Oct. 26, 2003) of 68 cents per share. Unocal's
adjusted after-tax earnings were $126 million, or 52 cents per share (diluted),
in the third quarter 2002, and $191 million, or 73 cents per share (diluted), in
the second quarter 2003. Adjusted after-tax earnings are net earnings excluding
special items, earnings from discontinued operations and cumulative effects of
accounting changes.
CONSOLIDATED RESULTS (UNAUDITED) 3rd Q 2nd Q 3rd Q
-------------------------------------
Millions of dollars except per share amounts 2003 2003 2002
- --------------------------------------------------------------------------------
Earnings from continuing operations $ 152 $ 169 $ 99
Earnings from discontinued operations - 8 -
Cumulative effects of accounting changes - - -
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Net earnings 152 177 99
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Less: Earnings from discontinued operations - 8 -
Less: Cumulative effects of accounting changes - - -
Less: Special items (38) (22) (27)
- --------------------------------------------------------------------------------
Adjusted after-tax earnings $ 190 $ 191 $ 126
================================================================================
DILUTED EARNINGS PER SHARE DATA (UNAUDITED)
Net earnings per share:
Continuing operations $ 0.58 $ 0.65 $ 0.41
Discontinued operations - 0.03 -
Cumulative effects of accounting changes - - -
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Total net earnings per share $ 0.58 $ 0.68 $ 0.41
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Adjusted after-tax earnings per share $ 0.72 $ 0.73 $ 0.52
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REVENUES FROM CONTINUING OPERATIONS (UNAUDITED) $ 1,541 $ 1,620 $ 1,297
================================================================================
-2-
In the third quarter 2003, special items included $23 million in net
after-tax gains on asset sales (due to the sale of Tom Brown, Inc., common
stock), a net after-tax charge of $32 million for impairments on assets held for
sale and an additional $6 million after-tax charge associated with the company's
2003 restructuring plan. In addition, the current quarter included $23 million
in net after-tax provisions for environmental and litigation matters related
primarily to formerly operated sites or sites previously sold with retained
liabilities. All of the special items are detailed in the Adjusted After-tax
Earnings table.
Unocal's third quarter 2003 earnings (compared with 3Q 2002) reflected
higher natural gas and liquids prices, increased earnings from geothermal and
power operations, and lower exploration expenses (including dry hole costs).
The positive factors were offset partially by lower North America natural
gas and liquids production, reduced earnings from the company's minerals
operations, increased administrative and general expense due principally to
higher pension-related costs, and higher outside litigation support costs. The
lower North America production in the third quarter was due principally to
natural reservoir declines and the impact of asset dispositions during the first
nine months of 2003.
Third-quarter total revenues were $1.54 billion, up from $1.30 billion in
the third quarter 2002, primarily due to higher commodity prices for natural gas
and liquids.
Unocal's EBITDAX for the third quarter 2003 was $711 million, or $2.61
per share (diluted). This compares with $602 million, or $2.46 per share
(diluted), for the same period in 2002. EBITDAX is net earnings before interest,
taxes, depreciation, depletion and amortization, asset impairments, exploration
expenses, dry hole costs, special items, earnings from discontinued operations
and cumulative effects of accounting changes. EBITDAX is commonly used by
investors and analysts to facilitate comparison of companies like Unocal that
use the "successful efforts" accounting method with other exploration and
production companies that use the "full-cost" method.
Worldwide, Unocal's consolidated net daily production in the third
quarter 2003 averaged 441,000 barrels of oil equivalent (BOE) per day, compared
with 466,000 BOE per day a year ago. The decline in North America production was
partially offset by increases in International natural gas and liquids
production.
Unocal's worldwide average liquids price, including hedging, was $27.28
per barrel, up from $24.81 in the third quarter 2002. The company's average
worldwide realized price for natural gas, including hedging, was $3.60 per
thousand cubic feet (mcf), compared with $2.79 per mcf a year ago. Hedging
activities in the third quarter lowered worldwide liquids realizations by 6
cents per barrel, while hedging activities had no impact on natural gas
realizations.
-3-
Nine-months results
- -------------------
Net earnings for the first nine months of 2003 were $463 million, or
$1.78 per share (diluted). This compares with $235 million, or 96 cents per
share (diluted) for the same period a year ago.
Unocal's adjusted after-tax earnings for the first nine months were $610
million, or $2.32 per share (diluted). This compares with $303 million, or $1.24
per share (diluted), for the first nine months of 2002. The special items are
detailed in the Adjusted After-tax Earnings table included with this news
release.
Total revenues for the year-to-date were $4.95 billion, up from $3.71
billion last year.
For the Nine Months
CONSOLIDATED RESULTS (UNAUDITED) Ended September 30,
--------------------------
Millions of dollars except per share amounts 2003 2002
- --------------------------------------------------------------------------------
Earnings from continuing operations $ 538 $ 234
Earnings from discontinued operations 8 1
Cumulative effects of accounting changes (83) -
- --------------------------------------------------------------------------------
Net earnings 463 235
- --------------------------------------------------------------------------------
Less: Earnings from discontinued operations 8 1
Less: Cumulative effects of accounting changes (83) -
Less: Special items (72) (69)
- --------------------------------------------------------------------------------
Adjusted after-tax earnings $ 610 $ 303
================================================================================
DILUTED EARNINGS PER SHARE DATA (UNAUDITED)
Net earnings per share:
Continuing operations $ 2.05 $ 0.96
Discontinued operations 0.03 -
Cumulative effects of accounting changes (0.30) -
- --------------------------------------------------------------------------------
Total net earnings per share $ 1.78 $ 0.96
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Adjusted after-tax earnings per share $ 2.32 $ 1.24
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REVENUES FROM CONTINUING OPERATIONS (UNAUDITED) $ 4,950 $ 3,714
================================================================================
Unocal's EBITDAX for the nine months of 2003 was $2.26 billion, or $8.30
per share (diluted), compared with $1.69 billion, or $6.90 per share (diluted),
for the same period in 2002.
Financial condition
- -------------------
Cash flow from operating activities for the nine months ended Sept. 30,
2003, was $1.65 billion, compared with $1.23 billion for the comparable period
of 2002.
Capital spending was $1.30 billion for the nine months 2003, versus $1.25
billion in the same period a year ago.
Pretax proceeds from asset sales were $152 million in the third quarter,
bringing the total for the year to date to $343 million. Third quarter
dispositions included the sale of the majority of the company's common stock
holding in Tom Brown, Inc. Proceeds from the sale of assets in 2003 will be used
mainly to reduce debt and other financings.
The company's total consolidated long-term debt (including current
maturities) was $3.12 billion at Sept. 30, 2003, compared with $3.0 billion at
year-end 2002. Cash and cash-equivalents were $485 million at Sept. 30, 2003,
compared with $168 million at December 31, 2002. During the third quarter, as a
result of the Financial Accounting Standards Board's
-4-
Interpretation No. 46 dealing with "Variable Interest Entities," the company
consolidated $78 million in long-term debt of an affiliate that operates
geothermal steam-fired power plants in Indonesia.
In the first nine months of 2003, the company retired more than $400
million in debt and other long-term financings. In addition, the company
purchased more than $280 million of its outstanding debt securities through a
tender offer and open market purchases in October.
Fourth quarter 2003 outlook
- ---------------------------
For the fourth quarter 2003, Unocal is forecasting adjusted after-tax
earnings of 55 to 65 cents per share (diluted). This forecast compares with the
Thomson/First Call consensus (published Oct. 26, 2003) of 58 cents per share for
the quarter. The fourth quarter forecast assumes average NYMEX benchmark prices
of $30.00 per barrel of crude oil and $5.00 per million British thermal units
(mmBtu) for North America natural gas for the period.
Unocal's fourth quarter adjusted after-tax earnings are expected to
change $8 million for every $1 change in its average worldwide realized price
for crude oil and $3.5 million for every 10-cent change in its average realized
North America natural gas price, excluding the effect of hedging activities. The
forecast also assumes pretax dry hole costs in the fourth quarter of $50 to $65
million.
The company's current estimate for fourth quarter 2003 production is
between 430,000 and 440,000 BOE per day.
Unocal's total actual production could also be impacted by cost recovery
volume fluctuations under its various foreign production-sharing contracts due
to changes in commodity prices, the rate of ramp-up of production at the West
Seno field offshore Indonesia, changes in demand for gas in Thailand, and
production and exploration performance in the Gulf of Mexico.
The fourth-quarter adjusted after-tax earnings forecast excludes special
items. Because of the inherent uncertainty related to special items, determining
whether or when they will occur and quantifying their dollar impact, Unocal does
not forecast net earnings.
About Unocal Corporation
- ------------------------
Unocal is one of the world's leading independent natural gas and crude
oil exploration and production companies. The company's principal oil and gas
activities are in North America and Asia.
Conference call/financial database
- ----------------------------------
Unocal will webcast its quarterly earnings conference call today at 1
p.m.PST (4 p.m. EST) over the Internet. To listen to the live webcast, go to the
Investor Presentations section of the Unocal web site, www.unocal.com. Replays
of the conference call, including questions and answers, will be available.
-5-
Complete detailed financial tables for the third quarter 2003 and the
comparable prior periods are available in the "Quarterly Fact Book," which is
posted in the Data Warehouse in the Investor Information section of the
company's web site. The Quarterly Fact Book is also available upon request from
Unocal Investor Relations.
* * * * *
This news release contains certain forward-looking statements about expected
adjusted after-tax earnings, production rates, commodity prices, and dry hole
costs. These statements are not guarantees of future performance. The statements
are based upon Unocal's current expectations and beliefs and are subject to a
number of known and unknown risks and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. Actual results could differ materially as a result of changes in
commodity prices; the levels of the company's oil and gas production; the extent
of the company's operating cash flow and other capital resources available to
fund its capital expenditures; regulatory, geological, operating and economic
considerations; and other factors discussed in Unocal's 2002 Annual Report on
Form 10-K and subsequent reports filed with the U.S. Securities and Exchange
Commission. Unocal undertakes no obligation to update the information in this
news release.
Investors are urged to consider closely the disclosure in Unocal's 2002 Annual
Report on Form 10-K and other reports filed with the SEC (SEC File No. 1-8483).
Copies of the company's SEC filings are available from the company by calling
800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also
available on the Unocal web site, www.unocal.com.
* * * * *
-6-
CONSOLIDATED EARNINGS (UNAUDITED) UNOCAL CORPORATION
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------------------------------------
Millions of dollars
except per share amounts 2003 2002 2003 2002
- --------------------------------------------------------------------------------
Revenues
Sales and operating revenues $ 1,478 $ 1,299 $ 4,817 $ 3,695
Interest, dividends
and miscellaneous income (loss) (2) (3) 18 17
Gain on sales of assets 65 1 115 2
- --------------------------------------------------------------------------------
Total revenues 1,541 1,297 4,950 3,714
Costs and other deductions
Crude oil, natural gas
and product purchases 447 401 1,629 1,124
Operating expense 346 326 965 949
Administrative and general expense 61 34 199 114
Depreciation, depletion and amortization 231 245 746 724
Asset impairments 83 6 86 27
Dry hole costs 14 40 95 81
Exploration expense 39 60 182 180
Interest expense 45 40 119 134
Property and other operating taxes 18 7 61 41
Distributions on convertible preferred
securities of subsidiary trust 8 8 24 24
- --------------------------------------------------------------------------------
Total costs and other deductions 1,292 1,167 4,106 3,398
Earnings from equity investments 54 35 150 123
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Earnings from continuing operations
before income taxes
and minority interests 303 165 994 439
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Income taxes 147 68 448 203
Minority interests 4 (2) 8 2
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Earnings from continuing operations 152 99 538 234
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Earnings from discontinued operations - - 8 1
Cumulative effects of
accounting changes (a) - - (83) -
- --------------------------------------------------------------------------------
Net earnings $ 152 $ 99 $ 463 $ 235
================================================================================
Basic earnings per share
of common stock (b)
Continuing operations $ 0.59 $ 0.41 $ 2.08 $ 0.96
Net earnings $ 0.59 $ 0.41 $ 1.79 $ 0.96
Diluted earnings per share
of common stock (c)
Continuing operations $ 0.58 $ 0.41 $ 2.05 $ 0.96
Net earnings $ 0.58 $ 0.41 $ 1.78 $ 0.96
Cash dividends declared per share
of common stock $ 0.20 $ 0.20 $ 0.60 $ 0.60
- --------------------------------------------------------------------------------
<FN>
(a) Net of tax (benefit) $ - $ - $ (48) $ -
(b) Basic weighted average shares
outstanding (in thousands) 258,525 244,664 258,244 244,503
(c) Diluted weighted average shares
outstanding (in thousands) 272,691 245,226 272,172 245,378
</FN>
-7-
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) UNOCAL CORPORATION
At September 30, At December 31,
Millions of dollars 2003 2002
- --------------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 485 $ 168
Other current assets - net 1,252 1,207
Investments and long-term receivables - net 903 1,044
Properties - net 8,492 7,879
Goodwill 129 122
Other assets 407 340
- --------------------------------------------------------------------------------
Total assets $ 11,668 $ 10,760
================================================================================
Liabilities and Stockholders' Equity
Current liabilities (a) $ 1,900 $ 1,632
Long-term debt and capital leases 2,868 3,002
Deferred income taxes 709 593
Accrued abandonment, restoration
and environmental liabilities 912 622
Other deferred credits and liabilities 915 816
Minority interests 28 275
Convertible preferred securities
of a subsidiary trust 522 522
Stockholders' equity 3,814 3,298
- --------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 11,668 $ 10,760
================================================================================
<FN>
(a) Includes current portion of LTD of: 249 6
</FN>
-8-
CONSOLIDATED CASH FLOWS (UNAUDITED) UNOCAL CORPORATION
For the Nine Months
Ended September 30,
----------------------
Millions of dollars 2003 2002
- --------------------------------------------------------------------------------
Cash Flows from Operating Activities
Net earnings $ 463 $ 235
Adjustments to reconcile net earnings to
net cash provided by operating activities
Depreciation, depletion and amortization 746 724
Asset impairments 86 27
Dry hole costs 95 81
Amortization of exploratory leasehold costs 88 74
Deferred income taxes 102 25
Gain on sales of assets (115) (2)
Gain on disposal of discontinued operations (13) (2)
Pension expense 65 17
Restructuring provisions net of payments 22 14
Cumulative effect of accounting changes 83 -
Other 5 (85)
Working capital and other changes related to operations 20 124
- --------------------------------------------------------------------------------
Net cash provided by operating activities 1,647 1,232
- --------------------------------------------------------------------------------
Cash Flows from Investing Activities
Capital expenditures (includes dry hole costs) (1,296) (1,248)
Proceeds from sales of assets 343 61
Proceeds from sale of discontinued operations 11 3
- --------------------------------------------------------------------------------
Net cash used in investing activities (942) (1,184)
- --------------------------------------------------------------------------------
Cash Flows from Financing Activities
Long-term borrowings 154 437
Reduction of long-term debt
and capital lease obligations (156) (267)
Minority interests (257) (6)
Proceeds from issuance of common stock 21 19
Dividends paid on common stock (155) (147)
Other 5 1
- --------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (388) 37
- --------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 317 85
- --------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year 168 190
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 485 $ 275
================================================================================
-9-
NET EARNINGS AND ADJUSTED AFTER-TAX EARNINGS
BY BUSINESS SEGMENT
(UNAUDITED)
3rd Q 2003 2nd Q 2003
-------------------------------------------------
Adjusted Adjusted
Net After-Tax Net After-Tax
Millions of dollars Earnings Earnings (a) Earnings Earnings (a)
- --------------------------------------------------------------------------------
Exploration & Production
North America
U.S. Lower 48 (b) $ 77 $ 85 $ 89 $ 70
Alaska 12 12 14 14
Canada 15 15 8 6
International
Far East 115 115 116 116
Other 21 21 29 29
Trade 3 3 4 4
Midstream 16 17 18 18
Geothermal and Power Operations 19 19 7 7
Corporate and Other
Administrative and General (21) (21) (22) (22)
Interest Expense - Net (32) (32) (28) (28)
Environmental and Litigation (33) (15) (28) (2)
Other (a) (40) (29) (38) (21)
- --------------------------------------------------------------------------------
After-tax earnings (loss)
from continuing operations 152 190 169 191
After-tax earnings from
discontinued operations - - 8 -
Cumulative effects of
accounting changes - - - -
- --------------------------------------------------------------------------------
After-tax earnings (loss) $ 152 $ 190 $ 177 $ 191
================================================================================
<FN>
(a) For a reconciliation to net earnings, see the Adjusted After-Tax Earnings
table.
(b) Includes earnings (loss) from:
Onshore / Shelf 85 93 118 99
Deep water (8) (8) (29) (29)
</FN>
-10-
NET EARNINGS AND ADJUSTED AFTER-TAX EARNINGS
BY BUSINESS SEGMENT
(UNAUDITED)
3rd Q 2003 3rd Q 2002
-------------------------------------------------
Adjusted Adjusted
Net After-Tax Net After-Tax
Millions of dollars Earnings Earnings (a) Earnings Earnings (a)
- --------------------------------------------------------------------------------
Exploration & Production
North America
U.S. Lower 48 (b) $ 77 $ 85 $ 13 $ 13
Alaska 12 12 10 10
Canada 15 15 (2) 3
International
Far East 115 115 120 120
Other 21 21 16 16
Trade 3 3 (1) (1)
Midstream 16 17 17 17
Geothermal and Power Operations 19 19 5 5
Corporate and Other
Administrative and General (21) (21) (21) (21)
Interest Expense - Net (32) (32) (28) (28)
Environmental and Litigation (33) (15) (14) (3)
Other (a) (40) (29) (16) (5)
- --------------------------------------------------------------------------------
After-tax earnings (loss)
from continuing operations 152 190 99 126
After-tax earnings from
discontinued operations - - - -
Cumulative effects of
accounting changes - - - -
- --------------------------------------------------------------------------------
After-tax earnings (loss) $ 152 $ 190 $ 99 $ 126
================================================================================
<FN>
(a) For a reconciliation to net earnings, see the Adjusted After-Tax Earnings
table.
(b) Includes earnings (loss) from:
Onshore / Shelf 85 93 23 23
Deep water (8) (8) (10) (10)
</FN>
-11-
NET EARNINGS AND ADJUSTED AFTER-TAX EARNINGS
BY BUSINESS SEGMENT
(UNAUDITED) For the Nine Months Ended September 30,
-------------------------------------------------
2003 2003 2002 2002
-------------------------------------------------
Adjusted Adjusted
Net After-Tax Net After-Tax
Millions of dollars Earnings Earnings (a) Earnings Earnings (a)
- --------------------------------------------------------------------------------
Exploration & Production
North America
U.S. Lower 48 (b) $ 277 $ 266 $ 37 $ 46
Alaska 41 41 (1) (1)
Canada 47 43 (5) -
International
Far East 352 352 323 323
Other 71 71 40 40
Trade (2) (2) 1 1
Midstream 52 53 59 59
Geothermal and Power Operations 38 38 25 25
Corporate and Other
Administrative and General (66) (66) (64) (64)
Interest Expense - Net (91) (91) (93) (93)
Environmental and Litigation (78) (20) (50) (6)
Other (a) (103) (75) (38) (27)
- --------------------------------------------------------------------------------
After-tax earnings (loss)
from continuing operations 538 610 234 303
After-tax earnings from
discontinued operations 8 - 1 -
Cumulative effects of
accounting changes (83) - - -
- --------------------------------------------------------------------------------
After-tax earnings (loss) $ 463 $ 610 $ 235 $ 303
================================================================================
<FN>
(a) For a reconciliation to net earnings, see the Adjusted After-Tax Earnings
table.
(b) Includes earnings (loss) from:
Onshore / Shelf 345 334 65 74
Deep water (68) (68) (28) (28)
</FN>
-12-
OPERATING HIGHLIGHTS UNOCAL CORPORATION
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-----------------------------------------
2003 2002 2003 2002
- --------------------------------------------------------------------------------
North America Net Daily Production
Liquids (thousand barrels)
U.S. Lower 48 (a) (b) 42 52 45 54
Alaska 21 24 22 25
Canada 17 16 17 17
- --------------------------------------------------------------------------------
Total liquids 80 92 84 96
Natural gas - dry basis (million cubic feet)
U.S. Lower 48 (a) (b) 595 716 650 740
Alaska 49 61 59 79
Canada 90 90 91 91
- --------------------------------------------------------------------------------
Total natural gas 734 867 800 910
North America Average Prices (excluding hedging activities) (c)
Liquids (per barrel)
U. S. Lower 48 $ 27.92 $ 24.85 $ 28.04 $ 22.24
Alaska $ 29.39 $ 26.10 $ 29.87 $ 23.36
Canada $ 24.02 $ 22.70 $ 25.37 $ 20.29
Average $ 27.47 $ 24.79 $ 27.96 $ 22.18
Natural gas (per mcf)
U. S. Lower 48 $ 4.78 $ 2.95 $ 5.39 $ 2.78
Alaska $ 1.46 $ 1.20 $ 1.27 $ 1.48
Canada $ 4.96 $ 2.08 $ 5.24 $ 2.38
Average $ 4.57 $ 2.73 $ 5.05 $ 2.62
- --------------------------------------------------------------------------------
North America Average Prices (including hedging activities) (c)
Liquids (per barrel)
U. S. Lower 48 $ 27.71 $ 24.84 $ 27.37 $ 22.28
Alaska $ 29.39 $ 26.10 $ 29.87 $ 23.36
Canada $ 24.02 $ 22.70 $ 25.37 $ 20.29
Average $ 27.36 $ 24.78 $ 27.59 $ 22.20
Natural gas (per mcf)
U. S. Lower 48 $ 4.82 $ 2.97 $ 5.11 $ 2.87
Alaska $ 1.46 $ 1.20 $ 1.27 $ 1.48
Canada $ 4.64 $ 2.10 $ 4.93 $ 2.44
Average $ 4.57 $ 2.75 $ 4.79 $ 2.69
- --------------------------------------------------------------------------------
<FN>
(a)Includes proportional interests in production of equity investees.
(b)Includes minority interests of :
Liquids - 8 1 8
Natural gas - 94 7 96
Barrels oil equivalent - 24 2 24
(c)Excludes gains/losses on derivative positions not accounted for as
hedges and ineffective portions of hedges.
</FN>
-13-
OPERATING HIGHLIGHTS (CONTINUED) UNOCAL CORPORATION
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-----------------------------------------
2003 2002 2003 2002
- --------------------------------------------------------------------------------
International Net Daily Production (d)
Liquids (thousand barrels)
Far East 59 52 58 53
Other (a) 20 20 20 20
- --------------------------------------------------------------------------------
Total liquids 79 72 78 73
Natural gas - dry basis (million cubic feet)
Far East 883 859 888 855
Other (a) 74 83 91 79
- --------------------------------------------------------------------------------
Total natural gas 957 942 979 934
International Average Prices (d) (e)
Liquids (per barrel)
Far East $26.65 $23.99 $26.92 $21.95
Other $29.19 $26.94 $27.74 $24.62
Average $27.20 $24.84 $27.11 $22.62
Natural gas (per mcf)
Far East $2.86 $2.84 $2.79 $2.74
Other $2.93 $2.80 $2.88 $2.70
Average $2.87 $2.83 $2.80 $2.74
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Worldwide Net Daily Production (a) (b) (d)
Liquids (thousand barrels) 159 164 162 169
Natural gas - dry basis (million cubic feet) 1,691 1,809 1,779 1,844
Barrels oil equivalent (thousands) 441 466 458 476
Worldwide Average Prices (excluding hedging activities) (c)
Liquids (per barrel) $27.34 $24.82 $27.55 $22.37
Natural gas (per mcf) $3.60 $2.78 $3.79 $2.68
Worldwide Average Prices (including hedging activities) (c) (e)
Liquids (per barrel) $27.28 $24.81 $27.36 $22.38
Natural gas (per mcf) $3.60 $2.79 $3.68 $2.72
- --------------------------------------------------------------------------------
<FN>
(a)Includes proportional interests in production of equity investees.
(b)Includes minority interests of :
Liquids - 8 1 8
Natural gas - 94 7 96
Barrels oil equivalent - 24 2 24
(c)Excludes gains/losses on derivative positions not accounted for as
hedges and ineffective portions of hedges.
(d)International production is presented utilizing the economic interest method.
(e)International did not have any hedging activities.
</FN>
-14-
ADJUSTED AFTER-TAX EARNINGS (UNAUDITED)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------------------
Millions of dollars
except per share amounts 2003 2002 2003 2002
- --------------------------------------------------------------------------------
Net earnings $ 152 $ 99 $ 463 $ 235
- --------------------------------------------------------------------------------
Less:
Earnings from discontinued operations - - 8 1
Cumulative effects of accounting changes - - (83) -
- --------------------------------------------------------------------------------
Earnings from continuing operations 152 99 538 234
- --------------------------------------------------------------------------------
Less: Special items
E&P - North America - U.S. Lower 48
Asset sales 23 - 43 2
Assets held for sale-impairments (31) - (31) -
Environmental and
litigation provisions - - (1) 1
Restructuring - - - (12)
E&P - North America - Canada
Trading derivatives-non-hedging - (5) 4 (5)
Midstream
Assets held for sale-impairments (1) - (1) -
Corporate & Other
Environmental and
litigation provisions (23) (22) (63) (57)
Insurance settlements - - - 2
Restructuring (6) - (23) -
Total special items (38) (27) (72) (69)
- --------------------------------------------------------------------------------
Adjusted after-tax earnings $ 190 $ 126 $ 610 $ 303
================================================================================
Adjusted after-tax
diluted earnings per share $ 0.72 $ 0.52 $ 2.32 $ 1.24
================================================================================
The preceding table reconciles adjusted after-tax earnings to net earnings.
Special items represent certain significant matters which positively or
negatively impact net earnings that management determines to be not
representative of the company's ongoing operations. Examples of such items which
have generally been excluded in determining adjusted after-tax earnings include:
gain/loss from major asset sales; environmental remediation costs primarily
related to inactive, closed or previously owned company facilities and third
party sites; costs or settlements associated with major restructuring plans;
litigation settlement costs primarily associated with former company operations
or closed/inactive facilities; significant asset impairments due to changes in
commodity prices; material damage to company facilities or operations due to
fire, explosion, earthquakes, storms or other 'acts of god' not covered by
insurance; certain costs associated with major acquisitions including litigation
and significant trading derivatives; insurance recoveries associated with former
company operations or for costs incurred in prior years. Other companies may
define special items differently; hence, we cannot assure that adjusted
after-tax earnings are comparable with similarly titled amounts reported by
other companies.
EBITDAX (UNAUDITED)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
- --------------------------------------------------------------------------------
Millions of dollars 2003 2002 2003 2002
- --------------------------------------------------------------------------------
Net Earnings $ 152 $ 99 $ 463 $ 235
Less:
Earnings from discontinued operations - - 8 1
Cumulative effects of
accounting changes - - (83) -
Special items (38) (27) (72) (69)
- --------------------------------------------------------------------------------
Adjusted after-tax earnings 190 126 610 303
Add-backs to adjusted after-tax earnings:
Depreciation, depletion
and amortization 231 245 746 724
Asset impairments 31 6 34 27
Dry hole costs 14 40 95 81
Exploration expenses (including
amortization of undeveloped
leasehold costs) 39 60 182 180
Current income taxes 64 27 302 179
Deferred income taxes 97 58 171 65
Interest expense (a) 45 40 119 134
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EBITDAX $ 711 $ 602 $2,259 $1,693
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EBITDAX per share (diluted) $2.61 $2.46 $ 8.30 $ 6.90
<FN>
(a) Net of capitalized interest of: 11 14 46 33
</FN>
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