EXHIBIT 99.2
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2003 2002
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 12,651 $ 8,490
Accounts receivable, net 97,627 98,222
Inventories 19,054 10,648
Deferred income taxes 39,500 13,900
Other current assets, net 26,906 15,833
---------- ----------
Total current assets 195,738 147,093
---------- ----------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful efforts
method of accounting 4,949,710 4,471,970
Accumulated depletion, depreciation and amortization (1,555,709) (1,303,541)
---------- ----------
3,394,001 3,168,429
---------- ----------
Noncurrent deferred income taxes 188,712 76,840
Other assets, net 63,159 62,754
---------- ----------
$ 3,841,610 $ 3,455,116
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 141,674 $ 124,774
Interest payable 38,039 37,458
Income taxes payable 3,916 -
Other current liabilities 139,202 112,360
---------- ----------
Total current liabilities 322,831 274,592
---------- ----------
Long-term debt 1,621,364 1,668,536
Noncurrent deferred income taxes 12,713 8,760
Other noncurrent liabilities 168,797 128,331
Stockholders' equity 1,715,905 1,374,897
---------- ----------
$ 3,841,610 $ 3,455,116
========== ==========
PIONEER NATURAL RESOURCES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues and other income:
Oil and gas $ 332,515 $ 168,317 $ 953,625 $ 506,286
Interest and other 348 7,083 4,321 9,089
Gain on disposition of assets, net 46 3,353 1,576 4,374
-------- -------- -------- --------
332,909 178,753 959,522 519,749
-------- -------- -------- --------
Costs and expenses:
Oil and gas production 71,806 49,970 205,387 150,705
Depletion, depreciation and amortization 103,534 54,748 274,142 156,081
Exploration and abandonments 24,516 18,324 107,430 57,304
General and administrative 15,207 12,466 44,332 35,142
Accretion of discount on asset retirement
obligations 1,327 - 3,656 -
Interest 23,212 20,347 69,526 71,405
Other 1,389 21,599 12,205 37,603
-------- -------- -------- --------
240,991 177,454 716,678 508,240
-------- -------- -------- --------
Income before income taxes and cumulative
effect of change in accounting principle 91,918 1,299 242,844 11,509
Income tax benefit (provision) 99,895 (2,189) 94,961 (3,216)
-------- -------- -------- --------
Income (loss) before cumulative effect of change
in accounting principle 191,813 (890) 337,805 8,293
Cumulative effect of change in accounting
principle, net of tax - - 15,413 -
-------- -------- -------- --------
Net income (loss) $ 191,813 $ (890) $ 353,218 $ 8,293
======== ======== ======== ========
Net income (loss) per share:
Basic:
Income (loss) before cumulative effect of
change in accounting principle $ 1.64 $ (.01) $ 2.89 $ .07
Cumulative effect of change in accounting
principle, net of tax - - .13 -
-------- -------- -------- --------
Net income (loss) $ 1.64 $ (.01) $ 3.02 $ .07
======== ======== ======== ========
Diluted:
Income (loss) before cumulative effect of
change in accounting principle $ 1.62 $ (.01) $ 2.86 $ .07
Cumulative effect of change in accounting
principle, net of tax - - .13 -
-------- -------- -------- --------
Net income (loss) $ 1.62 $ (.01) $ 2.99 $ .07
======== ======== ======== ========
Weighted average shares outstanding:
Basic 117,216 116,193 116,990 111,227
======== ======== ======== ========
Diluted 118,457 116,193 118,283 112,889
======== ======== ======== ========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
----------------------- -----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Cash flows from operations:
Net income (loss) $ 191,813 $ (890) $ 353,218 $ 8,293
Depletion, depreciation and amortization 103,534 54,748 274,142 156,081
Exploration expenses, including dry holes 15,677 12,589 83,204 43,437
Deferred income taxes (103,691) 1,512 (103,938) 1,617
Gain on disposition of assets, net (46) (3,353) (1,576) (4,374)
Accretion of discount on asset retirement
obligations 1,327 - 3,656 -
Interest related amortization (4,781) (19) (13,960) (1,660)
Commodity hedge related amortization (18,132) 6,184 (54,119) 20,307
Cumulative effect of change in accounting
principle, net of tax - - (15,413) -
Other noncash items 1,598 16,093 8,580 28,337
Changes in operating assets and liabilities:
Accounts receivable, net 17,932 6,153 3,287 (4,715)
Inventories (4,678) 69 (8,895) 4,052
Other current assets, net (1,610) (851) (11,680) (928)
Accounts payable 23,281 (3,907) 28,951 (18,056)
Interest payable 850 (384) 581 183
Income taxes payable 1,740 - 3,916 -
Other current liabilities (2,349) (290) (3,278) (4,320)
--------- --------- --------- ---------
Net cash provided by operating activities 222,465 87,654 546,676 228,254
Net cash used in investing activities (127,409) (169,220) (495,149) (379,437)
Net cash provided by (used in) financing activities (94,388) 90,403 (48,641) 163,844
--------- --------- --------- ---------
Net increase in cash and cash equivalents 668 8,837 2,886 12,661
Effect of exchange rate changes on cash
and cash equivalents (173) (63) 1,275 (1,493)
Cash and cash equivalents, beginning
of period 12,156 16,728 8,490 14,334
--------- --------- --------- ---------
Cash and cash equivalents, end of period $ 12,651 $ 25,502 $ 12,651 $ 25,502
========= ========= ========= =========
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
Three months ended Nine months ended
September 30, September 30,
--------------------- --------------------
2003 2002 2003 2002
--------- --------- --------- --------
Average Daily Production:
Oil (Bbls) - U.S. 24,130 21,787 24,128 23,583
Argentina 9,126 7,655 8,200 7,926
Canada 93 169 118 137
Tunisia 211 - 71 -
--------- --------- --------- --------
Total 33,560 29,611 32,517 31,646
Natural gas liquids (Bbls) - U.S. 20,254 21,070 20,157 20,377
Argentina 1,584 680 1,387 654
Canada 820 943 907 976
--------- --------- --------- --------
Total 22,658 22,693 22,451 22,007
Gas (Mcf) - U.S. 487,000 230,589 435,275 218,648
Argentina 114,326 105,406 94,916 83,662
Canada 41,253 48,827 42,468 49,578
--------- --------- --------- --------
Total 642,579 384,822 572,659 351,888
Total Production:
Oil (MBbls) 3,088 2,724 8,877 8,639
Natural gas liquids (MBbls) 2,085 2,088 6,129 6,008
Gas (MMcf) 59,117 35,404 156,336 96,065
Total equivalent barrels (MBOE) 15,025 10,713 41,062 30,658
Average Reported Prices*:
Oil (per Bbl) - U.S. $ 25.04 $ 22.28 $ 25.06 $ 23.74
Argentina $ 26.10 $ 20.25 $ 25.31 $ 20.27
Canada $ 28.97 $ 24.67 $ 28.67 $ 21.32
Tunisia $ 26.94 $ - $ 26.94 $ -
Worldwide $ 25.35 $ 21.77 $ 25.14 $ 22.86
Natural gas liquids (per Bbl) - U.S. $ 18.29 $ 14.12 $ 18.98 $ 13.05
Argentina $ 21.63 $ 12.73 $ 22.86 $ 13.12
Canada $ 23.62 $ 14.57 $ 26.10 $ 15.85
Worldwide $ 18.71 $ 14.10 $ 19.51 $ 13.17
Gas (per Mcf) - U.S. $ 4.38 $ 3.08 $ 4.64 $ 3.12
Argentina $ .54 $ .42 $ .55 $ .49
Canada $ 3.57 $ 2.31 $ 4.00 $ 2.41
Worldwide $ 3.64 $ 2.25 $ 3.91 $ 2.39
<FN>
* Average prices include the results of hedging activities.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
EBITDAX and discretionary cash flow (as defined below) are presented
herein, and reconciled to the generally accepted accounting principle ("GAAP")
measures of net income (loss) and net cash provided by operating activities
because of their wide acceptance by the investment community as financial
indicators of a company's ability to internally fund exploration and development
activities and to service or incur debt. The Company also views the non-GAAP
measures of EBITDAX and discretionary cash flow as useful tools for comparisons
of the Company's financial indicators with those of peer companies that follow
the full cost method of accounting. EBITDAX and discretionary cash flow should
not be considered as alternatives to net income (loss) or net cash provided by
operating activities, as defined by GAAP.
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net income (loss) $ 191,813 $ (890) $ 353,218 $ 8,293
Depletion, depreciation and amortization 103,534 54,748 274,142 156,081
Exploration and abandonments 24,516 18,324 107,430 57,304
Accretion of discount on asset retirement
obligations 1,327 - 3,656 -
Interest expense 23,212 20,347 69,526 71,405
Income taxes (99,895) 2,189 (94,961) 3,216
Gain on disposition of assets, net (46) (3,353) (1,576) (4,374)
Commodity hedge related amortization (18,132) 6,184 (54,119) 20,307
Cumulative effect of change in accounting
principle, net of tax - - (15,413) -
Other noncash items 1,598 21,669 8,580 33,913
-------- -------- -------- --------
EBITDAX * 227,927 119,218 650,483 346,145
Less: Noncash other income - (5,576) - (5,576)
Cash interest expense (27,993) (20,366) (83,486) (73,065)
Current income taxes (3,796) (677) (8,977) (1,599)
-------- -------- -------- --------
Discretionary cash flow ** 196,138 92,599 558,020 265,905
Less: Cash operating exploration expense (8,839) (5,735) (24,226) (13,867)
Changes in operating assets and liabilities 35,166 790 12,882 (23,784)
-------- -------- -------- --------
Net cash provided by operating activities $ 222,465 $ 87,654 $ 546,676 $ 228,254
======== ======== ======== ========
<FN>
- -------------
* "EBITDAX" represents earnings before depletion, depreciation and
amortization expense; impairment of oil and gas properties; exploration and
abandonments; accretion of discount on asset retirement obligations;
interest expense; income taxes; gain or loss on the disposition of assets;
commodity hedge related amortization; cumulative effect of change in
accounting principle, net of tax; and, other noncash items.
** Discretionary cash flow equals cash flows from operations before working
capital changes and before cash exploration costs.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL HEDGE INFORMATION
As of October 29, 2003
Open Oil Hedge Positions
------------------------
2003 2004 2005 2008
-------- -------- -------- --------
Fourth
Quarter
--------
Average Daily Oil Production:
Swap Contracts:
Volume (Bbl).......................... 20,315 18,227 12,000 4,000
NYMEX price........................... $ 26.58 $ 25.70 $ 24.44 $ 26.05
Open Gas Hedge Positions
------------------------
2003 2004 2005 2006 2007
-------- -------- -------- -------- --------
Fourth
Quarter
--------
Average Daily Gas Production:
Swap Contracts:
Volume (Mcf).......................... 310,000 280,000 60,000 70,000 20,000
NYMEX Price* (MMBtu).................. $ 4.45 $ 4.10 $ 4.30 $ 4.25 $ 3.75
Deferred Gains (Losses) on Terminated Hedges (in thousands)
-----------------------------------------------------------
2003
--------
Fourth
Quarter 2004 2005 Thereafter Total
-------- -------- -------- ---------- ----------
Commodity hedge gains (losses)** $ (5,141) $ 43,865 $ 1,249 $ - $ 39,973
Debt hedge gains (losses)*** 7,948 23,299 10,799 (7,329) 34,717
------- ------- ------- ------- --------
Total deferred gains (losses) $ 2,807 $ 67,164 $ 12,048 $ (7,329) $ 74,690
======= ======= ======= ======== ========
<FN>
* Approximate, based on historical differentials to index prices.
** Includes the following deferred commodity hedge gains and losses for which
cash settlements have been deferred until the indicated future periods: (i)
$22.8 million of net deferred losses due during the fourth quarter of 2003,
(ii) $1.2 million of net deferred losses due during 2004 and (iii) $209
thousand of net deferred gains to be received during 2005. Deferred
commodity hedge gains will be amortized as increases to oil and gas
revenues and deferred commodity hedge losses will be amortized as decreases
to oil and gas revenues during the indicated future periods.
*** Deferred debt hedge gains will be amortized as decreases to interest
expense and deferred debt hedge losses will be amortized as increases to
interest expense during the indicated future periods.
</FN>