ConocoPhillips · NYSE:COP
ConocoPhillips — Q2 2006 Earnings Presentation
20 slides from ConocoPhillips's earnings presentation, Jul 26, 2006
Slide 1: 2nd Quarter Earnings Conference Call
2nd Quarter Earnings Conference Call James J. Mulva July 26, 2006
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The following presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities E
Slide 3: Highlights
Highlights Net Income $5.2 B 2.13 MMBOED E&P Production Excl. LUKOIL 0.40 MMBOED from LUKOIL Cash From Operations Burlington Integration $4.8 B 91% Refining Utilization 97% YTD Reinvestment Rate Debt-to-Cap 27% Page 3
Slide 4: Total Company Net Income
Total Company Net Income 2Q06 vs. 1Q06 $MM 376 523 287 1,304 146 1,171 5,186 3,291 1Q06 Prices, Margins Volumes Tax Legislation DD&A Operating Costs Other 2Q06 & Other Market Impacts Page 4
Slide 5: Total Company Cash Flow
Total Company Cash Flow 2Q06 $MM 3,008 3,579 Beginning Cash 595 4,844 2,683 CFOA 425 84 654 Available Cash Capex & Dividends Debt Reduction Share Other Ending Cash Investing Repurchase Balance Activities Page 5
Slide 6: Debt Ratio
Debt Ratio 100 40 50 43 79 32.2 80 40 73 30 29.5 34 30 60 22.6 30 27 54 26 20 17.8 44 40 15.0 20 19 35 30 12.5 10 20 10 0 0 0 1/1/03 2003 2004 2005 1Q06 2Q06 1/1/03 2003 2004 2005 1Q06 2Q06 1/1/03 2003 2004 2005 1Q06 2Q06 Equity * $B Balance Sheet Debt-to-Capital Debt $B Ratio % * Includes minority
Slide 7: Exploration & Production
Exploration & Production 2Q06 vs. 1Q06 • Higher crude oil prices • Lower natural gas prices • Higher worldwide production – addition of Burlington Resources assets – initial Libya crude oil liftings Page 7
Slide 8: Total Company Production
Total Company Production 2Q06 vs. 1Q06 MBOED 403 74 17 22 10 18 483 2,537 2,134 1,610 1Q06 E&P BR Libya Timor Sea UK Vietnam Other 2Q06 E&P LUKOIL 2Q06 Page 8
Slide 9: E&P Net Income
E&P Net Income 2Q06 vs. 1Q06 $MM 363 54 385 19 76 3,304 2,553 1Q06 Prices & Other BR Sales Tax Other 2Q06 Market Impacts Acquisition Volume* Legislation * Excludes BR volume impact Page 9
Slide 10: Refining and Marketing
Refining and Marketing 2Q06 vs. 1Q06 • Higher worldwide refining margins • Higher capacity utilization rate • Lower turnaround activity and costs Page 10
Slide 11: R&M Net Income
R&M Net Income 2Q06 vs. 1Q06 $MM 34 17 160 1,107 1,708 390 1Q06 Prices, Margins & Volume Tax Legislation Other 2Q06 Other Market Impacts Page 11
Slide 12: LUKOIL Investment
LUKOIL Investment • 18.0% ownership at end of second quarter • Second-quarter weighted-average ownership of 17.5% • Estimated earnings of $387 MM Page 12
Slide 13: Midstream, Chemicals and Emerging Businesses
Midstream, Chemicals and Emerging Businesses 2Q06 vs. 1Q06 • Midstream ($108MM vs. $110MM) • Chemicals ($103MM vs. $149MM) - lower olefins & polyolefins margins • Emerging Businesses ($-12MM vs. $8MM) Page 13
Slide 14: Corporate
Corporate 2Q06 vs. 1Q06 $MM (168) (412) (166) (34) (44) 1Q06 Net Interest BR Transition Cost Other 2Q06 Page 14
Slide 15: Return on Capital Employed
Return on Capital Employed 25% Peer Group COP 20% 15% 22% 10% 20% 19% 15% 5% 10% 0% 2003 2004 2005 1Q06 2Q06 Annualized* Annualized Peer group adjusted to reflect all major combinations on a purchase-accounting basis, see Table 1 of Appendix All companies adjusted to exclude certain non-core-earning
Slide 16: Outlook
Outlook • Burlington Resources integration • Tax legislation • Asset disposition program • Saudi Arabia and U.A.E. opportunities Page 16
Slide 17: 2nd Quarter Earnings Conference Call
2nd Quarter Earnings Conference Call James J. Mulva July 26, 2006
Slide 18: Appendix
ConocoPhillips Appendix
Slide 19: Peer Capital Employed
Peer Capital Employed XOM CVX BP TOT** Equity issued for purchase* 72,795 35,690 49,091 65,055 Less: Equity of companies acquired (19,015) (14,330) (15,682) (20,458) Excess Capital Employed under 53,780 21,360 33,409 44,597 Purchase Accounting * Based on the number of shares issued in the transactio
Slide 20: Financial Analysis Assumptions
Financial Analysis Assumptions 2006 2007 EPS Estimated First Call COP pre-acquisition 15,439 13,750 Estimated First Call BR pre-acquisition 2,013 2,844 After Tax Incremental DD&A (587) (783) After Tax Incremental Interest Expense (351) (309) After Tax Synergies ** - 305 COP First Call earnings* 16,5