EXHIBIT 99.5
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
On December 5, 2001, Burlington Resources Inc. ("BR") acquired all of the
outstanding common stock of Canadian Hunter Exploration Ltd. ("Hunter") for cash
consideration of C$53 per share representing an aggregate value of approximately
U.S. $2.1 billion. The acquisition was funded primarily with the proceeds from
the issuance of $1.5 billion of fixed-rate notes and $400 million of commercial
paper. The acquisition was accounted for under the purchase method in accordance
with SFAS No. 141, Business Combinations.
The following unaudited pro forma combined statements of income are
presented to give effect to the acquisition of Hunter by BR under the purchase
method of accounting. The unaudited pro forma combined statements of income for
the year ended December 31, 2000 and the nine months ended September 30, 2001
assume that the transaction had been consummated on January 1, 2000. The
unaudited pro forma combined statements of income do not reflect any cost
savings or other synergies which may result from the transaction and are not
necessarily indicative of future results of operations. These unaudited pro
forma combined statements of income are presented in accordance with accounting
principles generally accepted in the United States of America ("U.S. GAAP")
under the successful efforts method of accounting for oil and gas properties.
The unaudited pro forma combined statements of income should be read in
conjunction with the historical consolidated financial statements of BR and
Hunter, including the notes thereto, included in this Form 10-K and Exhibits
99.3 and 99.4 to this Form 10-K, respectively.
1
EXHIBIT 99.5
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30, 2001
--------------------------------------------------
HUNTER
HISTORICAL PRO FORMA
BR U.S. GAAP ADJUSTMENTS PRO FORMA
HISTORICAL (NOTE 1) (NOTE 2) COMBINED
---------- ---------- ----------- ---------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
REVENUES............................................ $2,715 $525 $ -- $3,240
------ ---- ----- ------
COSTS AND EXPENSES
Taxes Other Than Income Taxes..................... 130 2 -- 132
Transportation Expense............................ 191 31 -- 222
Production and Processing......................... 368 36 -- 404
Depreciation, Depletion and Amortization.......... 527 127 (5)(2a) 649
Exploration Costs................................. 201 1 23(2b) 245
20(2e)
Administrative.................................... 119 12 4(2c) 135
------ ---- ----- ------
Total Costs and Expenses............................ 1,536 209 42 1,787
------ ---- ----- ------
Operating Income.................................... 1,179 316 (42) 1,453
Interest Expense.................................... 132 2 82(2d) 216
Other Expense (Income) - Net........................ 4 (3) -- 1
------ ---- ----- ------
Income from Continuing Operations Before Income
Taxes............................................. 1,043 317 (124) 1,236
Income Tax Expense (Benefit)........................ 406 124 (82)(2f) 448
------ ---- ----- ------
Income from Continuing Operations................... $ 637 $193 $ (42) $ 788
====== ==== ===== ======
BASIC EARNINGS PER COMMON SHARE..................... $ 3.05 $ 3.77
======
DILUTED EARNINGS PER COMMON SHARE................... $ 3.04 $ 3.75
====== ======
Weighted Average Number of Common Shares
Outstanding....................................... 209 209
====== ======
Weighted Average Number of Common Shares
Outstanding, Including Dilution................... 210 210
====== ======
</Table>
See accompanying Notes to Unaudited Pro Forma Combined Statements of Income.
2
EXHIBIT 99.5
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
<Table>
<Caption>
YEAR ENDED DECEMBER 31, 2000
--------------------------------------------------
HUNTER
HISTORICAL PRO FORMA
BR U.S. GAAP ADJUSTMENTS PRO FORMA
HISTORICAL (NOTE 1) (NOTE 2) COMBINED
---------- ---------- ----------- ---------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
REVENUES............................................ $3,147 $501 $ -- $3,648
------ ---- ------ ------
COST AND EXPENSES...................................
Taxes Other than Income Taxes....................... 147 2 149
Transportation Expense.............................. 240 23 263
Production and Processing........................... 463 36 499
Depreciation, Depletion and Amortization............ 704 130 8(2a) 842
Exploration Costs................................... 237 1 19(2b) 283
26(2e)
Administrative...................................... 165 15 8(2c) 188
------ ---- ------ ------
Total Costs and Expenses............................ 1,956 207 61 2,224
------ ---- ------ ------
Operating Income.................................... 1,191 294 (61) 1,424
Interest Expense.................................... 197 44 109(2d) 350
Other Expense (Income) - Net........................ 27 1 -- 28
------ ---- ------ ------
Income Before Income Taxes.......................... 967 249 (170) 1,046
Income Tax Expense (Benefit)........................ 292 108 (111)(2f) 289
------ ---- ------ ------
Income from Continuing Operations................... $ 675 $141 $ (59) $ 757
====== ==== ====== ======
BASIC EARNINGS PER COMMON SHARE..................... $ 3.13 $ 3.51
====== ======
DILUTED EARNINGS PER COMMON SHARE................... $ 3.12 $ 3.50
====== ======
Weighted Average Number of Common Shares
Outstanding....................................... 216 216
====== ======
Weighted Average Number of Common Shares
Outstanding, Including Dilution................... 216 216
====== ======
</Table>
See accompanying Notes to Unaudited Pro Forma Combined Statements of Income.
3
EXHIBIT 99.5
PRO FORMA STATEMENTS OF INCOME
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
1. CONVERSION OF HUNTER TO U.S. GAAP AND U.S. DOLLARS
The historical consolidated financial statements of Hunter were prepared
under Canadian GAAP and in Canadian dollars. For these unaudited pro forma
combined financial statements, the historical financial information of Hunter
has been converted to U.S. GAAP using the full cost method of accounting for oil
and gas properties and converted to U.S. dollars using the average exchange
rates for the nine months ended September 30, 2001 (.6506) and the year ended
December 31, 2000 (.6737).
U.S. GAAP STATEMENTS OF INCOME -- HUNTER
<Table>
<Caption>
PERIOD ENDED SEPTEMBER 30, 2001
--------------------------------------------------------------------
HUNTER HUNTER HUNTER
HISTORICAL U.S. HISTORICAL HISTORICAL
CANADIAN GAAP CONFORMING U.S. U.S. GAAP
GAAP ADJUSTMENTS ADJUSTMENTS GAAP U.S. $
---------- ----------- ----------- ---------- ----------
(IN MILLIONS)
REVENUES............................. C$759 C$48(a) C$-- C$810 $527
----- ---- ---- ----- ----
3(g)
COSTS AND EXPENSES
Production and Processing.......... 57 (2)(c) 55 36
Taxes Other than Income Taxes...... 2(c) 2 2
Transportation Expense............. 48(a) 48 31
General and Administrative......... 20 (1)(d) 19 12
Interest and Other Financing
Charges......................... 3 (3)(e) -- --
Exploration Costs.................. 1(d) 1 1
Depreciation, Depletion and
Amortization.................... 196 196 127
Other.............................. (1) 1(b) -- --
Minority Interest.................. -- -- --
----- ---- ---- ----- ----
Total Costs and Expenses............. 275 48 (2) 321 209
----- ---- ---- ----- ----
Operating Income (Loss).............. 484 3 2 489 318
Interest Expense..................... -- -- 3(e) 3 2
Other Expense (Income) - Net......... -- (1)(b) (1) (1)
----- ---- ---- ----- ----
Income Before Income Taxes........... 484 3 -- 487 317
Income Tax Expense................... 190 2(f) -- 192 124
----- ---- ---- ----- ----
NET INCOME........................... C$294 C $1 C$-- C$295 $193
===== ==== ==== ===== ====
</Table>
4
EXHIBIT 99.5
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME -- (CONTINUED)
<Table>
<Caption>
YEAR ENDED DECEMBER 31, 2000
-------------------------------------------------------------------------
HUNTER HUNTER HUNTER
HISTORICAL U.S. HISTORICAL HISTORICAL
CANADIAN GAAP CONFORMING U.S. U.S. GAAP
GAAP ADJUSTMENTS ADJUSTMENTS GAAP U.S. $
---------- ----------- ----------- ---------- ----------
(IN MILLIONS)
REVENUES........................ C$709 C$34(a) C$-- C$743 $501
----- ---- ---- ----- ----
COSTS AND EXPENSES
Production and Processing..... 56 (3)(c) 53 36
Taxes Other than Income
Taxes...................... -- 3(c) 3 2
Transportation Expense........ -- 34(a) 34 23
Administrative................ 24 (2)(d) 22 15
Interest and Other Financing
Charges.................... 65 (65)(e) --
Exploration Costs............. -- 2(d) 2 1
Depreciation, Depletion and
Amortization............... 193 193 130
Other......................... 2 (2)(b) -- --
Minority Interest............. -- -- -- --
----- ---- ---- ----- ----
Total Costs and Expenses........ 340 34 (67) 307 207
----- ---- ---- ----- ----
Operating Income................ 369 -- 67 436 294
Interest Expense................ -- -- 65(e) 65 44
Other Expense (Income) - Net.... -- -- 2(b) 2 1
----- ---- ---- ----- ----
Income Before Income Taxes...... 369 -- -- 369 249
Income Tax Expense.............. 161 -- -- 161 108
----- ---- ---- ----- ----
NET INCOME...................... C$208 C$-- C$-- C$208 $141
===== ==== ==== ===== ====
</Table>
(a) Reflects reclassification of transportation expenses from revenues to
production and processing in accordance with U.S. GAAP.
(b) Reclassify other expenses from operating expense to non-operating expense
to conform to BR's presentation.
(c) Reclassify production taxes included in production and processing costs to
conform to BR's presentation.
(d) Reclassify certain costs included in general and administrative expense to
exploration expense to conform to BR's presentation.
(e) Reclassify interest expense from operating expense to non-operating expense
to conform to BR's presentation.
(f) To adjust income taxes related to U.S. GAAP adjustment using a blended
statutory tax rate of 43%.
(g) Reflects recognition of unrealized gains on derivative financial
instruments in accordance with U.S. GAAP.
2. PRO FORMA ADJUSTMENTS
(a) To adjust depreciation, depletion and amortization ("DD&A") expense for
Hunter based on the step-up to estimated fair value of the assets assuming
the acquisition occurred on January 1, 2000 and to record DD&A at a field
level under successful efforts method of accounting. The Company's pro
forma depreciation, depletion and amortization per mcfe equivalent is $.818
for the year ended December 31, 2000 and for the nine months ended
September 30, 2001.
(b) Reflects the increase in exploration expense for the recognition of
geological and geophysical expenses, lease rentals and exploratory dry hole
costs previously capitalized under the full cost method of accounting for
oil and gas properties used by Hunter prior to the acquisition.
5
EXHIBIT 99.5
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME -- (CONTINUED)
(c) Reflects increase due to recognition of general and administrative costs
under the successful efforts method of accounting for oil and gas
properties to conform to BR's accounting policies. These costs were
capitalized under the full cost method of accounting for oil and gas
properties used by Hunter prior to the acquisition.
(d) Reflects additional pro forma interest expense related to $1.5 billion of
fixed rate debt and $400 million of commercial paper issued to fund the
Hunter acquisition. It is assumed that the borrowings occurred on January
1, 2000. Interest expense was computed using weighted average interest
rates of 6.5% and 2.5% on the fixed rate debt and commercial paper,
respectively. A .125 percent change in interest rates would impact pro
forma interest expense by approximately $500 thousand and $375 thousand for
the year ended December 31, 2000, and the nine months ended September 30,
2001, respectively.
(e) Reflects impairment of unproved leasehold costs acquired under the
successful efforts method of accounting.
(f) To reflect the tax effect of the pro forma adjustments. The tax effect was
calculated using a blended statutory tax rate of 43% for cost and expense
items except for interest expense, which was calculated using a blended
statutory tax rate of 79% reflecting the deductibility of interest expense
in both Canada and the U.S.
6