EXHIBIT 99.1
NEWS RELEASE
Company Contacts:
Investors: Frank Hopkins
Media and Public Affairs: Susan Spratlen
(972) 444-9001
Pioneer Reports First Quarter 2006 Results
Sees early success in accelerated onshore North America
production growth program
Discovers two new fields in the Edwards Trend in South Texas
Dallas, Texas, May 9, 2006 -- Pioneer Natural Resources Company (NYSE:PXD) today
announced financial and operating results for the quarter ended March 31, 2006.
o Pioneer reported net income of $543 million, or $4.28 per diluted share
compared to net income for the same quarter last year of $85 million, or
$.58 per diluted share.
o First quarter oil and gas sales from continuing operations exceeded
guidance, averaging 95,250 barrels oil equivalent per day (BOEPD).
o North American production rose 6% from equivalent volumetric production
payment (VPP) adjusted 2005 first quarter levels, reflecting the initial
results from Pioneer's accelerated production growth program.
o North American fields represented 92% of first quarter oil and gas
sales from continuing operations.
o Production from Spraberry, Raton and Canadian fields continues to
increase.
o Drilling activity is expected to progressively increase throughout
the year.
o North American rig count grew to 25 during the first quarter with contracts
for 15 additional rigs by year end.
o Production growth is on track to meet or exceed targeted 2006 exit rate of
95,000 to 100,000 BOEPD.
o Two new fields discovered in the Edwards Trend are expected to provide 2006
production upside and substantial growth potential.
o Encouraging results to date indicate additional upside potential from
resource plays in the Rockies, Canada, Tunisia and other U.S. onshore Gulf
Coast areas.
o South Coast Gas and Oooguruk development projects are on schedule and
expected to add significant production volumes in 2007 and 2008,
respectively.
Net income for the first quarter of 2006 included an after-tax gain on the
disposition of deepwater Gulf of Mexico (GOM) assets of $472 million, or $3.72
per diluted share, which was included in income from discontinued operations.
Net income also included the following unusual items:
o incremental after-tax abandonment charge relating to a GOM shelf platform
destroyed by Hurricane Rita (East Cameron 322) of $27 million, or $.21 per
diluted share,
o after-tax gain related to business interruption insurance on East Cameron
322 and the Fain Gas Plant of $5 million, or $.04 per diluted share and
o valuation allowance of the income tax benefit related to the dry hole and
acreage costs of the Pina 1-X well in Nigeria of $17 million, or $.13 per
diluted share.
Pioneer closed the $1.3 billion divestiture of deepwater GOM assets during the
first quarter and closed the $675 million sale of its Argentine operations in
April. In addition to the gain on disposition of deepwater GOM assets, the
Company also reported after-tax income from discontinued operations of $72
million, or $.57 per diluted share, related to the operating income of the
divested proprties prior to closing.
Cash flow from operating activities for the first quarter was $303 million,
essentially unchanged from the same period in 2005. Having now released its
quarterly earnings, Pioneer expects to initiate the repurchase of outstanding
shares under the remaining $359 million repurchase program previously authorized
by its board of directors.
Operations Review
Scott D. Sheffield, Pioneer's Chairman and CEO, stated, "Our first quarter
achievements in accelerating field development, establishing new field
opportunities and progressing our longer-term projects support our confidence in
delivering double-digit compound average production growth over the next five
years."
Production from the Spraberry field has already begun to respond to the
accelerated drilling activity, rising 16% versus the prior year quarter to more
than 22 thousand BOEPD. Over the next 8 months, Pioneer plans to add at least 7
additional rigs to the 350-well Spraberry drilling program, bringing the total
rig count to at least 18 by year end. Through April, 76 wells had been drilled
in the field.
Production from the Company's Mid-Continent fields, Hugoton and West Panhandle,
exceeded expectations for the first quarter, rising slightly from the prior-year
period to 131 million cubic feet per day (MMcfpd) as the mild winter resulted in
less downtime.
In the Edwards Trend in South Texas, Pioneer has discovered 2 new fields which
are analogous to its 300-Bcf Pawnee field and the Washburn field. Four
successful wells have now been drilled in the first new field discovery in the
Sinor area that tested at between 2.5 and 3.2 MMcfpd before being stimulated.
These 4 wells are expected to be on production by the end of the second quarter,
and the full field development plan is being prepared. The second new field
discovery was drilled on the Stingray prospect approximately 90 miles northeast
of the Pawnee field. Early results indicate the new field could have significant
resource potential. Wells in this field are also anticipated to be online and
producing by late second quarter. Production from the new field discoveries was
not included in Pioneer's forecasted 2006 exit rates offering upside potential.
Three additional new-field prospects are scheduled to be drilled during the
second quarter to continue the Edwards resource play expansion along the trend.
Pioneer holds more than 200,000 gross acres in the trend area, has 4 rigs
currently dedicated to the resource play and is adding 2 rigs to the program
during 2006 and at least 1 rig during 2007. The Company plans to drill at least
35 Edwards development and exploration wells during 2006.
In the Rocky Mountains, first quarter coal bed methane (CBM) production from the
Raton field was up 6% from the prior year, meeting expectations. A pipeline
expansion and efforts to reduce wellhead and field pressure are expected to
enhance production along with the 330-well drilling program that Pioneer has
budgeted for the year. Through April, Pioneer had drilled 94 of the Raton wells
planned for 2006.
In northwest Colorado, Pioneer's programs to evaluate the CBM resource potential
at Lay Creek and Columbine Springs are progressing. At Lay Creek, the Company
has drilled 5 pilot wells and completed workovers on 2 wells drilled by the
previous operator. Results to date indicate that the coals are permeable and
thicker than expected. During the second half of 2006, Pioneer plans to drill 14
development wells and install the infrastructure to initiate sales by the end of
the year. Drilling on 2 additional pilot wells is expected to commence during
the second quarter. At Columbine Springs, Pioneer expects to complete its 7-well
extension pilot program by the end of July and have these and 23 existing wells
on production by the end of the third quarter to assess production potential and
water-handling requirements. Full-field development could begin in 2007. Pioneer
also plans to drill 5 wells to further evaluate its resource play at Castlegate
and to test its conventional Entrada gas play, both in the Uinta Basin in Utah.
In Canada, Pioneer drilled 44 Chinchaga winter-access development wells during
the first quarter with 90% success and expects to have all the wells online
during May. At Horseshoe Canyon, the Company drilled 18 wells during the first
quarter and is increasing its development program to 200 wells for 2006 with 2
rigs contracted to begin drilling after the weather-related road bans are
lifted. Pioneer also plans to drill two horizontal wells during the second
quarter to test the potential of Mannville CBM in the Bashaw area. First quarter
production from Canada rose 5% from the first quarter of 2005 and does not
reflect the impact of winter-drilling at Chinchaga or the increase in rig
activity at Horseshoe Canyon.
The Adam 4 well drilled during the first quarter in Tunisia was successful,
extending Pioneer's 100% success rate in the concession where a 2-rig drilling
program is underway. On the adjacent Jenein Nord block, Pioneer acquired the
remaining equity interest in February, becoming the operator of the block with
100% working interest and is currently acquiring 3-D seismic on both Jenein Nord
and Adam. A well is planned during the second quarter on the Borj El Khadra
block which is adjacent to the Adam Concession.
Significant progress was also made on Pioneer's two longer-term development
projects in South Africa and Alaska. Two development wells were drilled offshore
South Africa to progress the South Coast Gas project. Fabrication of the subsea
tie-back equipment also commenced with installation expected to be initiated by
year end. Four additional development wells are expected to be drilled over the
next 8 to 9 months to achieve first production from the project during the
second half of 2007.
On the Oooguruk development project on the North Slope of Alaska, Pioneer
completed the construction of the gravel drill site during April. Additional
work on the project scheduled for 2006 includes contouring and armoring the
drill site, fabricating equipment and modifying the drilling rig for
installation during 2007. The project is on schedule to achieve first oil
production in 2008.
Financial Review
First quarter oil sales averaged 24,896 barrels per day (BPD) and natural gas
liquids sales averaged 18,595 BPD. Gas sales in the first quarter averaged 311
MMcfpd. The reported price for oil was $60.01 per barrel and included $12.91 per
barrel related to deferred revenue from VPPs for which production is not
recorded. The price for natural gas liquids was $34.20 per barrel. The reported
price for gas was $6.72 per thousand cubic feet (Mcf) and included $.68 per Mcf
related to deferred revenue from VPPs for which production is not recorded.
First quarter production costs averaged $11.04 per barrel of oil equivalent
(BOE) reflecting the impact of the divestitures of lower-cost, lower-margin
fields in Argentina and lower-cost, short-lived fields in the deepwater GOM,
incremental workover costs to maximize production, an increase in pipeline
transportation costs and an increase in the VPP volumes for which costs are
included but production is not recorded. Exploration and abandonment costs were
$125 million for the quarter and included $42 million of incremental before-tax
cost to abandon the East Cameron 322 field as discussed previously, $33 million
of dry hole and acreage costs associated with the unsuccessful Pina 1-X well in
Nigeria, $31 million of geologic and geophysical expenses including seismic and
personnel costs and $19 million of other drilling and acreage costs.
Financial Outlook
The following statements are estimates based on current expectations. These
forward-looking statements are subject to a number of risks and uncertainties
that may cause the Company's actual results to differ materially from the
following statements. The last paragraph of this release addresses certain of
the risks and uncertainties to which the Company is subject.
Second quarter 2006 production is expected to average 93,000 to 98,000 BOEPD.
Second quarter production costs (including production and ad valorem taxes and
transportation costs) are expected to average $11.00 to $12.00 per BOE based on
current NYMEX strip prices for oil and gas. Depreciation, depletion and
amortization expense is expected to average $9.25 to $10.25 per BOE.
Total exploration and abandonment expense is expected to be $25 million to $55
million and includes $4 million to $30 million of carryover costs associated
with high-impact wells drilled in Alaska during the first quarter and lower-risk
resource plays in the Edwards Trend in South Texas and in Canada and Tunisia.
Exploration expense also includes $21 million to $25 million for seismic
investments and personnel, primarily related to the onshore resource plays
Pioneer is currently pursuing. General and administrative expense is expected to
be $31 million to $34 million. Interest expense is expected to be $24 million to
$27 million, offset by interest income of $3 million to $4 million. Accretion of
discount on asset retirement obligations is expected to be $1 million to $2
million.
Pioneer will record a nominal gain from the sale of its Argentine operations
during the second quarter, and Argentine operating income will be reflected in
discontinued operations. Incremental insurance recoveries related to Pioneer's
coverage for business interruption and damage related to the 2005 hurricanes are
expected to be reflected in future quarters.
The Company's second quarter effective income tax rate is expected to range from
35% to 45% based on current capital spending plans. Cash income taxes are
expected to range from $5 million to $15 million, principally related to
Tunisian income taxes and nominal alternative minimum tax in the U.S.
The Company's financial results and oil and gas hedges are outlined on the
attached schedules.
Earnings Conference Call
This morning at 10:00 a.m. Eastern, Pioneer will discuss its first quarter
financial and operating results with an accompanying presentation. The call will
be webcast on Pioneer's website, www.pxd.com. At the website, select 'INVESTOR'
at the top of the page. For those who cannot listen to the live broadcast, a
replay will be available shortly after the call. Or you may choose to dial (800)
946-0782 (confirmation code: 2474815) to listen to the call by telephone and
view the accompanying visual presentation at the website above. A telephone
replay will be available by dialing (888) 203-1112 (confirmation code: 2474815).
Pioneer is a large independent oil and gas exploration and production company,
headquartered in Dallas, with operations in the United States, Canada and
Africa. For more information, visit Pioneer's website at www.pxd.com.
Except for historical information contained herein, the statements in this News
Release are forward-looking statements that are made pursuant to the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995. Forward-
looking statements and the business prospects of Pioneer are subject to a number
of risks and uncertainties that may cause Pioneer's actual results in future
periods to differ materially from the forward-looking statements. These risks
and uncertainties include, among other things, volatility of oil and gas prices,
product supply and demand, competition, the ability to obtain environmental and
other permits and the timing thereof, other government regulation or action,
third party approvals, international operations and associated international
political and economic instability, litigation, the costs and results of
drilling and operations, availability of drilling equipment, Pioneer's ability
to replace reserves, implement its business plans (including its plan to
repurchase stock), or complete its development projects as scheduled, access to
and cost of capital, uncertainties about estimates of reserves, the assumptions
underlying production forecasts, quality of technical data, environmental and
weather risks, acts of war or terrorism. These and other risks are described in
Pioneer's 10-K and 10-Q Reports and other filings with the Securities and
Exchange Commission.
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2006 2005
----------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 42,982 $ 18,802
Accounts receivable, net 187,197 337,658
Inventories 89,942 79,659
Prepaid expenses 28,550 18,091
Deferred income taxes 111,644 158,878
Discontinued operations held for sale 733,409 -
Other current assets, net 18,914 10,716
---------- ----------
Total current assets 1,212,638 623,804
---------- ----------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful efforts
method of accounting 7,076,565 8,813,134
Accumulated depletion, depreciation and amortization (1,632,887) (2,577,946)
---------- ----------
Total property, plant and equipment 5,443,678 6,235,188
---------- ----------
Goodwill 311,603 311,651
Other assets, net 141,330 158,591
---------- ----------
$ 7,109,249 $ 7,329,234
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 237,402 $ 345,204
Interest payable 18,442 40,314
Income taxes payable 151,061 22,470
Deferred revenue 187,412 190,327
Discontinued operations held for sale 66,322 -
Other current liabilities 334,442 435,040
---------- ----------
Total current liabilities 995,081 1,033,355
---------- ----------
Long-term debt 1,159,763 2,058,412
Deferred income taxes 989,564 767,329
Deferred revenue 619,477 664,511
Other liabilities and minority interests 389,553 588,525
Stockholders' equity 2,955,811 2,217,102
---------- ----------
$ 7,109,249 $ 7,329,234
========== ==========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended
March 31,
--------------------------
2006 2005
---------- -----------
Revenues and other income:
Oil and gas $ 379,468 $ 323,115
Interest and other 17,111 2,306
Gain (loss) on disposition of assets, net (73) 2,141
--------- ---------
396,506 327,562
--------- ---------
Costs and expenses:
Oil and gas production 94,683 80,946
Depletion, depreciation and amortization 82,406 73,308
Impairment of long-lived assets - 152
Exploration and abandonments 124,642 53,829
General and administrative 32,247 27,488
Accretion of discount on asset retirement obligations 1,148 1,499
Interest 36,576 32,746
Other 5,054 8,841
--------- ---------
376,756 278,809
--------- ---------
Income from continuing operations before income taxes 19,750 48,753
Income tax provision (20,717) (21,762)
--------- ---------
Income (loss) from continuing operations (967) 26,991
Income from discontinued operations, net of tax 544,174 57,666
--------- ---------
Net income $ 543,207 $ 84,657
========= =========
Basic earnings per share:
Income (loss) from continuing operations $ (.01) $ .19
Income from discontinued operations, net of tax 4.29 .40
--------- ---------
Net income $ 4.28 $ .59
========= =========
Diluted earnings per share:
Income (loss) from continuing operations $ (.01) $ .19
Income from discontinued operations, net of tax 4.29 .39
--------- ---------
Net income $ 4.28 $ .58
========= =========
Weighted average shares outstanding:
Basic 126,944 142,898
========= =========
Diluted 126,944 147,345
========= =========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended
March 31,
-------------------------
2006 2005
---------- ----------
Cash flows from operating activities:
Net income $ 543,207 $ 84,657
Depletion, depreciation and amortization 82,406 73,308
Impairment of long-lived assets - 152
Exploration expenses, including dry holes 94,582 16,676
Deferred income taxes 16,961 15,197
Loss (gain) on disposition of assets, net 73 (2,141)
Accretion of discount on asset retirement obligations 1,148 1,499
Discontinued operations (539,653) 122,749
Interest expense 3,047 197
Commodity hedge related activity 508 (3,061)
Stock-based compensation 7,486 5,152
Amortization of deferred revenue (47,949) (11,625)
Other noncash items 3,714 4,146
Changes in operating assets and liabilities, net of
effects from acquisition:
Accounts receivable, net 126,115 (12,033)
Inventories (20,131) (1,315)
Prepaid expenses (12,264) 2,449
Other current assets, net 9,429 (198)
Accounts payable (93,648) 17,593
Interest payable (19,100) (16,259)
Income taxes payable 134,051 2,775
Other current liabilities 13,365 3,736
--------- ---------
Net cash provided by operating activities 303,347 303,654
Net cash provided by investing activities 621,755 393,129
Net cash used in financing activities (900,583) (688,202)
--------- ---------
Net increase in cash and cash equivalents 24,519 8,581
Effect of exchange rate changes on cash
and cash equivalents (339) 201
Cash and cash equivalents, beginning of period 18,802 7,257
--------- ---------
Cash and cash equivalents, end of period $ 42,982 $ 16,039
========= =========
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
(Unaudited)
Three months ended
March 31,
-----------------------
2006 2005
--------- ---------
Average Daily Sales Volumes from
Continuing Operations:
Oil (Bbls) - U.S. 16,965 22,522
Canada 277 161
Africa 7,654 11,967
--------- ---------
Worldwide 24,896 34,650
========= =========
Natural gas liquids (Bbls) - U.S. 18,176 17,489
Canada 419 417
--------- ---------
Worldwide 18,595 17,906
========= =========
Gas (Mcf) - U.S. 274,773 283,080
Canada 35,782 34,171
--------- ---------
Worldwide 310,555 317,251
========= =========
Average Daily Sales Volumes
from Discontinued Operations:
Oil (Bbls) - U.S. 9,732 6,201
Argentina 7,184 8,191
Canada - 69
--------- ---------
Worldwide 16,916 14,461
========= =========
Natural gas liquids (Bbls) - U.S. - 55
Argentina 1,296 1,572
Canada - 184
--------- ---------
Worldwide 1,296 1,811
========= =========
Gas (Mcf) - U.S. 145,002 255,205
Argentina 135,047 130,351
Canada - 15,375
--------- ---------
Worldwide 280,049 400,931
========= =========
Average Reported Price (a):
Oil (per Bbl) - U.S. $ 59.97 $ 29.94
Canada $ 67.11 $ 50.88
Africa $ 59.84 $ 44.28
Worldwide $ 60.01 $ 34.99
Natural gas liquids (per Bbl) - U.S. $ 33.74 $ 26.12
Canada $ 54.23 $ 37.97
Worldwide $ 34.20 $ 26.39
Gas (per Mcf) - U.S. $ 6.60 $ 6.01
Canada $ 7.65 $ 5.96
Worldwide $ 6.72 $ 6.01
<FN>
- ---------------
(a) Average prices are attributable to continuing operations and include the
results of hedging activities and amortization of VPP deferred revenue.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
EBITDAX and discretionary cash flow ("DCF") (as defined below) are
presented herein, and reconciled to the generally accepted accounting principle
("GAAP") measures of net income 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 DCF 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 DCF should not be considered as alternatives
to net income or net cash provided by operating activities, as defined by GAAP.
Three months ended
March 31,
---------------------------
2006 2005
----------- -----------
Net income $ 543,207 $ 84,657
Depletion, depreciation and amortization 82,406 73,308
Impairment of long-lived assets - 152
Exploration and abandonments 124,642 53,829
Accretion of discount on asset retirement obligations 1,148 1,499
Interest expense 36,576 32,746
Income tax provision 20,717 21,762
Loss (gain) on disposition of assets, net 73 (2,141)
Discontinued operations (538,142) 125,773
Current income taxes on discontinued operations 144,030 2,325
Commodity hedge related activity 508 (3,061)
Stock-based compensation 7,486 5,152
Amortization of deferred revenue (47,949) (11,625)
Other noncash items 3,714 4,146
--------- ---------
EBITDAX (a) 378,416 388,522
Less: Cash interest expense (33,529) (32,555)
Current income taxes (147,786) (8,891)
--------- ---------
Discretionary cash flow (b) 197,101 347,076
Less: Cash exploration expense (31,571) (40,170)
Changes in operating assets and liabilities 137,817 (3,252)
--------- ---------
Net cash provided by operating activities $ 303,347 $ 303,654
========== =========
<FN>
- -------------
(a) "EBITDAX" represents earnings before depletion, depreciation and
amortization expense; impairment of long-lived assets; exploration and
abandonments; accretion of discount on asset retirement obligations;
interest expense; income taxes; gain or loss on the disposition of assets;
noncash effects from discontinued operations; commodity hedge related
activity; amortization of stock-based compensation; amortization of
deferred revenue; and other noncash items.
(b) Discretionary cash flow equals cash flows from operating activities before
changes in operating assets and liabilities and before cash exploration
expense.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL INFORMATION
As of May 8, 2006
Open Commodity Hedge Positions
2006
----------------------------------------
Second Third Fourth
Quarter Quarter Quarter Year 2007 2008
-------- -------- -------- -------- -------- ----------
Average Daily Oil Production Hedged:
Swap Contracts:
Volume (Bbl) 5,989 5,000 5,000 5,327 10,000 10,000
NYMEX price (Bbl) $ 42.92 $ 37.20 $ 37.20 $ 39.33 $ 30.96 $ 30.62
Collar Contracts:
Volume (Bbl) 7,000 6,500 6,500 6,665 2,000 -
NYMEX price (Bbl)
Ceiling $ 68.45 $ 66.41 $ 66.41 $ 67.12 $ 89.50 $ -
Floor $ 42.50 $ 41.92 $ 41.92 $ 42.12 $ 50.00 $ -
Average Daily Gas Production Hedged:
Swap Contracts:
Volume (MMBtu) 73,790 73,880 73,984 73,885 24,195 -
NYMEX price (MMBtu) (a) $ 4.30 $ 4.30 $ 4.30 $ 4.30 $ 4.00 $ -
Collar Contracts:
Volume (MMBtu) 105,000 105,000 115,000 108,345 215,000 -
NYMEX price (MMBtu) (a):
Ceiling $ 14.95 $ 14.95 $ 15.15 $ 15.02 $ 11.95 $ -
Floor $ 6.95 $ 6.95 $ 6.95 $ 6.95 $ 6.70 $ -
<FN>
- ---------------
(a) Approximate, based on historical differentials to index prices.
</FN>
Amortization of Volumetric Production Payment Proceeds and Net Derivative Losses
(in thousands)
2006
----------------------------------------
Second Third Fourth
Quarter Quarter Quarter Year 2007 Thereafter Total
-------- -------- -------- -------- -------- ---------- ---------
VPP proceeds, net of
transaction costs $ 46,321 $ 45,838 $ 45,527 $137,686 $175,216 $ 460,322 $ 773,224
Net hedge obligations assigned 1,565 1,558 1,569 4,692 6,016 22,957 33,665
------- ------- ------- ------- ------- -------- --------
Total deferred revenue (a) 47,886 47,396 47,096 142,378 181,232 483,279 806,889
Less net derivative losses to be
recognized in pretax earnings (b) 30 274 (396) (92) (3,540) (17,117) (20,749)
------- ------- ------- ------- ------- -------- --------
Total VPP impact to pretax
earnings $ 47,916 $ 47,670 $ 46,700 $142,286 $177,692 $ 466,162 $ 786,140
======= ======= ======= ======= ======= ======== ========
<FN>
- --------------
(a) Deferred revenue will be amortized as increases to oil and gas revenues
during the indicated future periods.
(b) Represents the remaining pretax earnings impact of the derivatives assigned
in the VPPs.
</FN>