Exhibit 99.2
Preliminary
FINANCIAL HIGHLIGHTS
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Revenues
Sales and other operating revenues* $25,830 23,346 104,196 56,748
Equity in earnings of affiliates 151 123 542 261
Other income (19) 56 359 192
--------- ---------- --------- ----------
25,962 23,525 105,097 57,201
--------- ---------- --------- ----------
Costs and expenses
Purchased crude oil and products 16,577 15,126 67,424 37,823
Production and operating expenses 1,946 1,696 7,208 4,698
Selling, general and administrative expenses 565 684 2,166 1,950
Exploration expenses 211 277 601 592
Depreciation, depletion and amortization 911 884 3,485 2,223
Property impairments 60 151 252 177
Taxes other than income taxes* 3,826 3,313 14,679 6,937
Accretion on discounted liabilities 38 5 145 22
Interest and debt expense 197 219 844 566
Foreign currency transaction (gains)/losses (50) 35 (36) 24
Minority interests and preferred dividend
requirements
of capital trusts 4 14 20 48
--------- ---------- --------- ----------
24,285 22,404 96,788 55,060
--------- ---------- --------- ----------
Income from continuing operations before income
taxes and subsidiary equity transactions 1,677 1,121 8,309 2,141
Gain on subsidiary equity transactions - - 28 -
--------- ---------- --------- ----------
Income from continuing operations before
income taxes 1,677 1,121 8,337 2,141
Provision for income taxes 692 563 3,744 1,443
--------- ---------- --------- ----------
Income from continuing operations 985 558 4,593 698
Income (loss) from discontinued operations before
cumulative effect of changes in accounting
principles 36 (986) 237 (993)
--------- ---------- --------- ----------
Income (loss) before cumulative effect of changes
in accounting principles 1,021 (428) 4,830 (295)
Cumulative effect of changes in accounting
principles - - (95) -
--------- ---------- --------- ----------
Net income (Loss) $1,021 (428) 4,735 (295)
========= ========== ========= ==========
Income (loss) per share of common stock
Basic
Continuing operations $1.45 0.82 6.75 1.45
Discontinued operations 0.05 (1.45) 0.35 (2.06)
Before cumulative effect of changes in accounting
principles 1.50 (0.63) 7.10 (0.61)
Cumulative effect of changes in accounting
principles - - (0.14) -
Net income (loss) $1.50 (0.63) 6.96 (0.61)
Diluted
Continuing operations $1.43 0.82 6.70 1.44
Discontinued operations 0.05 (1.45) 0.35 (2.05)
Before cumulative effect of changes in accounting
principles 1.48 (0.63) 7.05 (0.61)
Cumulative effect of changes in accounting
principles - - (0.14) -
Net income (loss) $1.48 (0.63) 6.91 (0.61)
Average common shares outstanding (in thousands)
Basic 681,681 678,431 680,490 482,082
Diluted 688,516 681,525 685,195 485,505
*Includes excise taxes on petroleum products sales: $3,590 3,093 13,705 6,236
Preliminary
SELECTED FINANCIAL DATA
Millions of Dollars
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
INCOME/(LOSS) FROM CONTINUING OPERATIONS
BEFORE ACCOUNTING CHANGE
E&P
United States $491 415 2,232 1,156
International 500 393 1,928 593
---------- ----------- ---------- -----------
Total E&P 991 808 4,160 1,749
---------- ----------- ---------- -----------
Midstream 43 20 130 55
---------- ----------- ---------- -----------
R&M
United States 176 113 1,115 138
International 26 (8) 282 5
---------- ----------- ---------- -----------
Total R&M 202 105 1,397 143
---------- ----------- ---------- -----------
Chemicals 11 (13) 7 (14)
Emerging Businesses (24) (40) (99) (310)
Corporate and other (238) (322) (1,002) (925)
---------- ----------- ---------- -----------
Consolidated $985 558 4,593 698
========== =========== ========== ===========
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
E&P
United States $- - 142 -
International - - - -
---------- ----------- ---------- -----------
Total E&P - - 142 -
---------- ----------- ---------- -----------
Midstream - - - -
---------- ----------- ---------- -----------
R&M
United States - - (125) -
International - - - -
---------- ----------- ---------- -----------
Total R&M - - (125) -
---------- ----------- ---------- -----------
Chemicals - - - -
Emerging Businesses - - -
Corporate and other - - (112) -
---------- ----------- ---------- -----------
Consolidated $- - (95) -
========== =========== ========== ===========
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
Corporate and other 36 (986) 237 (993)
SUMMARY OF NET INCOME/(LOSS)
E&P
United States $491 415 2,374 1,156
International 500 393 1,928 593
---------- ----------- ---------- -----------
Total E&P 991 808 4,302 1,749
---------- ----------- ---------- -----------
Midstream 43 20 130 55
---------- ----------- ---------- -----------
R&M
United States 176 113 990 138
International 26 (8) 282 5
---------- ----------- ---------- -----------
Total R&M 202 105 1,272 143
---------- ----------- ---------- -----------
Chemicals 11 (13) 7 (14)
Emerging Businesses (24) (40) (99) (310)
Corporate and other (202) (1,308) (877) (1,918)
---------- ----------- ---------- -----------
Net income/(loss) $1,021 (428) 4,735 (295)
========== =========== ========== ===========
Preliminary
SELECTED FINANCIAL DATA
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
INCOME/(LOSS) FROM CONTINUING
OPERATIONS
Effective tax rate % 41.3 % 50.2 44.9 67.4
Millions of Dollars
FOREIGN CURRENCY GAINS/(LOSSES)
AFTER-TAX
E&P $(22) (23) (50) (34)
Midstream - - - -
R&M 14 1 18 9
Chemicals - - - -
Emerging Businesses - - (1) -
Corporate and other 46 8 67 21
---------- ---------- ---------- ----------
$38 (14) 34 (4)
========== ========== ========== ==========
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) from continuing operations $985 558 4,593 698
Depreciation, depletion and amortization 911 884 3,485 2,223
Property impairments 60 151 252 177
Dry hole costs and leasehold impairment 131 146 300 307
Accretion on discounted liabilities 38 5 145 22
In-process research and development - - - 246
Deferred taxes 84 97 417 142
Undistributed equity earnings 132 46 (59) 18
Net (gain)/loss on asset dispositions 15 (15) (211) (7)
Other (264) (109) (390) (32)
Working capital changes (79) 146 624 982
---------- ---------- ---------- ----------
Net cash provided by continuing operations 2,013 1,909 9,156 4,776
Net cash provided by discontinued operations 8 84 189 202
---------- ---------- ---------- ----------
Net cash provided by operating activities $2,021 1,993 9,345 4,978
========== ========== ========== ==========
CAPITAL EXPENDITURES AND INVESTMENTS
E&P
United States $358 449 1,418 1,204
International 851 894 3,079 2,072
---------- ---------- ---------- ----------
1,209 1,343 4,497 3,276
Midstream 4 3 10 5
R&M 429 415 1,179 840
Chemicals - 31 - 60
Emerging Businesses 60 87 284 122
Corporate and other* 71 30 188 85
---------- ---------- ---------- ----------
$1,773 1,909 6,158 4,388
========== ========== ========== ==========
*Excludes discontinued operations
OTHER
At December 31, 2003 At December 31, 2002
Total debt $17,780 19,766
Common stockholders' equity $34,366 29,517
Preliminary
OPERATING HIGHLIGHTS
BY SEGMENT
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Thousands of Barrels Daily
E&P
Crude oil produced
United States
Alaska 318 323 325 331
Lower 48 50 58 54 40
----------- ----------- ----------- ----------
368 381 379 371
Norway 205 233 213 157
United Kingdom 72 86 77 39
Canada 28 37 30 13
Nigeria 35 38 37 29
China 28 11 26 12
Indonesia 10 13 16 5
Other 60 55 54 21
----------- ----------- ----------- ----------
Total consolidated 806 854 832 647
Equity affiliates 116 87 102 35
----------- ----------- ----------- ----------
Total Worldwide 922 941 934 682
=========== =========== =========== ==========
Syncrude 18 22 19 8
=========== =========== =========== ==========
Natural gas liquids produced
United States
Alaska* 24 24 23 24
Lower 48 27 21 25 8
----------- ----------- ----------- ----------
51 45 48 32
Norway 8 7 7 6
Canada 10 14 10 4
Other 3 4 4 4
----------- ----------- ----------- ----------
Total Worldwide 72 70 69 46
=========== =========== =========== ==========
*Includes reinjected volumes sold lease-to-lease: 16 15 15 14
Millions of Cubic Feet Daily
Natural gas produced*
United States
Alaska 205 186 184 175
Lower 48 1,264 1,362 1,295 928
----------- ----------- ----------- ----------
1,469 1,548 1,479 1,103
Norway 307 232 275 171
United Kingdom 954 975 940 424
Canada 431 442 435 165
Indonesia 275 220 255 72
Other 145 112 126 108
----------- ----------- ----------- ----------
Total consolidated 3,581 3,529 3,510 2,043
Equity affiliates 12 13 12 4
----------- ----------- ----------- ----------
Total Worldwide 3,593 3,542 3,522 2,047
=========== =========== =========== ==========
*Represents quantities available for sale. Excludes gas equivalent of NGL shown above.
Liquefied natural gas sales 140 128 121 122
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
E&P (continued)
Per Unit
Average sales prices
Crude oil (per barrel)
United States
Alaska $28.51 26.43 28.87 23.75
Lower 48 28.02 26.00 28.76 24.48
Total U.S. 28.45 26.36 28.85 23.83
International 28.42 25.93 28.27 25.14
Total consolidated 28.43 26.12 28.54 24.38
Equity affiliates 17.86 17.50 18.58 18.41
Total Worldwide 27.24 25.31 27.47 24.07
Natural gas--lease (per MCF)
United States
Alaska 1.88 1.95 1.76 1.85
Lower 48 4.27 3.43 4.76 2.79
Total U.S. 4.13 3.38 4.62 2.75
International 4.03 3.20 3.71 2.79
Total consolidated 4.07 3.27 4.07 2.77
Equity affiliates 3.96 3.00 4.44 2.71
Total Worldwide 4.07 3.27 4.07 2.77
Midstream
Thousands of Barrels Daily
Natural gas liquids extracted
Consolidated
United States 54 56 52 19
International 50 45 45 15
Equity affiliates
United States* 110 119 111 119
International 11 10 11 3
---------- ----------- ---------- -----------
225 230 219 156
========== =========== ========== ===========
*Represents 30.3 percent interest in Duke Energy Field Services, LLC (DEFS).
Per Barrel
U.S. product prices
Weighted average NGL**
Consolidated $23.14 19.24 22.67 19.07
DEFS 22.76 18.95 22.12 15.92
**Prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted
by natural-gas-liquids component and location mix.
Preliminary
OPERATING HIGHLIGHTS
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Thousands of Barrels Daily
R&M
United States
Crude oil capacity 2,168 2,166 2,168 1,829
Crude oil runs 2,074 2,004 2,074 1,661
Refinery production 2,270 2,279 2,301 1,847
International*
Crude oil capacity 442 440 442 195
Crude oil runs 381 307 385 152
Refinery production 395 348 412 164
U.S. Petroleum products outside sales
Automotive gasoline 1,365 1,478 1,369 1,230
Distillates 530 692 575 502
Aviation fuels 193 172 180 185
Other products 474 403 492 372
---------- ----------- ---------- --------------------
2,562 2,745 2,616 2,289
International 403 340 430 162
---------- ----------- ---------- --------------------
2,965 3,085 3,046 2,451
========== =========== ========== ====================
Per Gallon
U.S. Average sales prices**
Automotive gasoline-wholesale $1.00 0.92 1.05 0.96
Automotive gasoline-retail 1.25 1.02 1.35 1.03
Distillates-wholesale 0.92 0.86 0.92 0.77
*Includes ConocoPhillips' share of equity affiliates.
**Excludes excise taxes.