ConocoPhillips · NYSE:COP
ConocoPhillips — Q2 2012 Earnings Presentation
25 slides from ConocoPhillips's earnings presentation, Jul 25, 2012
Slide 1: 2nd Quarter 2012 Conference Call
2nd Quarter 2012 Conference Call Ryan Lance, Chairman and CEO Jeff Sheets, EVP, Finance and CFO July 25, 2012
Slide 2: Cautionary Statement
Cautionary Statement The following presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and results may di
Slide 3: Second-Quarter Highlights
Second-Quarter Highlights Completed spinoff of downstream businesses Strategic Generated $0.5 billion proceeds from dispositions Progressed conventional/unconventional exploration Met production estimate of 1.54 MMBOED Operational Continued production ramp up from shale plays/oil sands Advanced majo
Slide 4: State of the Business
State of the Business Business is running well – growth on target Unconventional programs continue to perform well Major projects on schedule Planned maintenance activities on track Exploration activities gaining momentum Focused on completing non-core asset sales program Marketing efforts
Slide 5: 2012 – 2013 Investment Priorities and Actions
2012 – 2013 Investment Priorities and Actions Sources of Cash Uses of Cash by Priority June 2012 Total Cash Annual Dividend $6 billion1 ~$3 billion Annual Capital Program Cash From Operations ~$15 billion ’12 / ’13 Asset Dispositions Debt Reduction $8 - $10 billion Maintain “A” Credit Rating Share R
Slide 6: 2Q12 Adjusted Earnings Key Drivers
2Q12 Adjusted Earnings Key Drivers Commodity prices trended lower Sales and production volumes as planned Solid performance across the portfolio Significant tri-annual maintenance cycle Lower North American natural gas Operating costs as expected Progressed portfolio rationalization 6
Slide 7: Volume and Realized Price Overview
Volume and Realized Price Overview 2Q12 Sales Volume Mix Realized Prices 2Q11 1Q12 2Q12 N.A. (WTI) $99 $98 $88 Crude ($/Bbl) N.A. Nat Intl & Alaskan Intl & $115 $116 $110 Gas Crude ($/Bbl) Alaskan Crude 25% N.A. Nat Gas 32% $4.04 $2.44 $1.93 ($/Mcf) Intl Nat Gas $10.00 $11.30 $11.69 ($/Mcf) Intl Nat
Slide 8: 2Q12 Performance – Production
2Q12 Performance – Production O T H MBOED E R 34 111 37 33 105 1,640 1,542 2Q11 Vietnam & N.A. Natural Downtime Decline Growth & 2Q12 N. Sea Gas Other Dispositions 8
Slide 9: 2Q12 Performance – Adjusted Earnings
2Q12 Performance – Adjusted Earnings Adjusted Earnings ($MM) 2,311 North America adversely impacted by commodity prices compared to a 1,841 year ago 1,535 Natural gas prices down by more than 50% NGL prices down by more than 20% Bitumen prices lower by 20% Europe underlying earnings impacted b
Slide 10: Alaska Segment Overview
Alaska Segment Overview Production (MBOED) Liquids Gas 233 237 236 Important source of earnings and 208 215 production performance from legacy asset base Planned turnarounds continuing into third quarter Pursuing additional exploitation 2Q11 3Q11 4Q11 1Q12 2Q12 opportunities to limit decline rates A
Slide 11: Lower 48 & Latin America Segment Overview
Lower 48 & Latin America Segment Overview Production (MBOED) Liquids Gas 425 434 444 451 441 Continued success in ramping up production from Lower 48 shale plays 2Q12 financial results lower due to significant drop in natural gas prices and NGL prices Adjusted investment plans to 2Q11 3Q11 4Q11 1Q12
Slide 12: Canada Segment Overview
Canada Segment Overview Production (MBOED) Liquids Gas Growth in liquids production 262 256 264 266 268 Financial results adversely impacted by low natural gas prices and high crude differentials Developing Surmont Phase II and additional FCCL expansions 2Q11 3Q11 4Q11 1Q12 2Q12 Adjusted Earnings ($
Slide 13: Europe Segment Overview
Europe Segment Overview Production (MBOED) Liquids Gas Production down due to 278 277 271 maintenance downtime and asset 245 236 sales Segment benefits from a more favorable commodity price environment than North America 2Q11 3Q11 4Q11 1Q12 2Q12 Projects in the U.K. and Norway on Adjusted Earnings (
Slide 14: Asia Pacific & Middle East Segment Overview
Asia Pacific & Middle East Segment Overview Production (MBOED) Liquids Gas 354 312 Peng Lai produced 30 MBOED net at 302 290 270 end 2Q12 Vietnam disposition at end of 1Q12 Completed major turnaround in Bayu-Undan and Darwin LNG; resumed production at end of 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 Adjusted Ea
Slide 15: Other International Segment Overview
Other International Segment Overview Production (MBOED) Liquids Gas Segment includes assets in Russia, 110 112 Caspian and Africa 88 83 85 Recent production improvements as Libyan operations return to normal 2Q12 earnings impacted by 2Q11 3Q11 4Q11 1Q12 2Q12 commodity prices and foreign exchange imp
Slide 16: Corporate and Other Segment Overview
Corporate and Other Segment Overview Adjusted Earnings ($MM) Segment includes: Net interest expenses Corporate G&A expenses Environmental costs associated with former businesses Certain foreign exchange (203) transaction gains/losses (214) (215) (225) (281) Emerging technologies/licensing
Slide 17: Operating Segments Margin and Returns
Operating Segments Margin and Returns Income per BOE ($) Cash Contribution per BOE ($) 30 30 25 25 20 20 15 15 10 10 17 15 16 14 13 29 27 27 25 24 5 5 0 0 2Q11 3Q11 4Q11 1Q12 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 Return on Capital Employed Cash Return on Capital Employed 30% 30% 25% 25% 20% 20% 15% 15% 10%
Slide 18: 2012 YTD Company Cash Flow
2012 YTD Company Cash Flow 2Q12 $B Debt = $23.0 B Cash = $6.0 B 1.6 Debt/Cap = 33% 7.0 0.6 5.7 0.7 8.2 4.9 6.4 1.7 6.0 2012 Cont. CFO Cont. Proceeds Capital Dividends Net Spinoff Share Debt & June 2012 Beginning excl. Working from Program Impact Repurchase Other Ending Cash Cash & Working Capi
Slide 19: Summary – Plans Remain on Track
Summary – Plans Remain on Track Completed spinoff of Phillips 66 Strong operational quarter Focused on executing major projects, exploration programs, and asset sales Managing through commodity price volatility Our long-term value proposition remains unchanged Sector-leading distributions 3 – 5%
Slide 20: 2nd Quarter 2012 Conference Call
2nd Quarter 2012 Conference Call July 25, 2012
Slide 21: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations Reconciliation of Earnings to Adjusted Earnings Millions of dollars, except per share amounts 2011 2012 2Q 3Q 4Q 1Q 2Q Consolidated Earnings $3,402 2,616 3,390 2,937 2,267 Adjustments: Impairments - - 649 520 30 Cancelled projects 54 - - - - Net (gain)/loss on asset sale
Slide 22: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations Reconciliation of Earnings to Adjusted Earnings Millions of dollars, except per share amounts 2011 2012 2Q 3Q 4Q 1Q 2Q Canada Earnings (loss) $ 101 73 (110) (549) (94) Adjustments: Impairments - - 190 520 - Net (gain)/loss on asset sales (19) - 12 - - Adjusted earnings (
Slide 23: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations ROCE Operating Segments 2Q11 3Q11 4Q11 1Q12 2Q12 Numerator ($MM) Net Income (Loss) Attributable to ConocoPhillips 3,402 2,616 3,390 2,937 2,267 Adjustment to exclude special items (1,091) (704) (1,276) (1,096) (732) Exclude adjusted earnings for Corporate and Other 214 2
Slide 24: COP Non-GAAP Reconciliations
COP Non-GAAP Reconciliations CROCE Operating Segments 2Q11 3Q11 4Q11 1Q12 2Q12 Numerator ($MM) Net Income (Loss) Attributable to ConocoPhillips 3,402 2,616 3,390 2,937 2,267 Adjustment to exclude special items (1,091) (704) (1,276) (1,096) (732) Exclude adjusted earnings for Corporate and Other 214
Slide 25: COP Non-GAAP Reconciliations & Other
COP Non-GAAP Reconciliations & Other Earnings and Cash per BOE - Operating Segments 2Q11 3Q11 4Q11 1Q12 2Q12 $ Millions, except per BOE amounts Net Income (Loss) Attributable to ConocoPhillips 3,402 2,616 3,390 2,937 2,267 Adjustment to exclude special items (1,091) (704) (1,276) (1,096) (732) Exclu