UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2014
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 001-32395
ConocoPhillips
(Exact name of registrant as specified in its charter)
Delaware | 01-0562944 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
600 North Dairy Ashford, Houston, TX 77079 | ||
(Address of principal executive offices) (Zip Code) |
281-293-1000
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The registrant had 1,230,912,872 shares of common stock, $.01 par value, outstanding at September 30, 2014.
TABLE OF CONTENTS
Consolidated Income Statement | ConocoPhillips |
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Revenues and Other Income |
||||||||||||||||
Sales and other operating revenues |
$ | 12,080 | 13,643 | 41,316 | 41,159 | |||||||||||
Equity in earnings of affiliates |
764 | 709 | 2,008 | 1,565 | ||||||||||||
Gain on dispositions |
4 | 1,069 | 20 | 1,222 | ||||||||||||
Other income |
69 | 49 | 322 | 317 | ||||||||||||
|
||||||||||||||||
Total Revenues and Other Income |
12,917 | 15,470 | 43,666 | 44,263 | ||||||||||||
|
||||||||||||||||
Costs and Expenses |
||||||||||||||||
Purchased commodities |
4,703 | 5,708 | 17,325 | 17,063 | ||||||||||||
Production and operating expenses |
2,041 | 1,962 | 5,966 | 5,321 | ||||||||||||
Selling, general and administrative expenses |
203 | 249 | 603 | 607 | ||||||||||||
Exploration expenses |
459 | 313 | 1,272 | 911 | ||||||||||||
Depreciation, depletion and amortization |
2,096 | 1,902 | 6,058 | 5,541 | ||||||||||||
Impairments |
108 | 1 | 126 | 31 | ||||||||||||
Taxes other than income taxes |
493 | 664 | 1,756 | 2,198 | ||||||||||||
Accretion on discounted liabilities |
120 | 106 | 357 | 317 | ||||||||||||
Interest and debt expense |
149 | 151 | 475 | 420 | ||||||||||||
Foreign currency transaction (gains) losses |
(8 | ) | 9 | 17 | (34 | ) | ||||||||||
|
||||||||||||||||
Total Costs and Expenses |
10,364 | 11,065 | 33,955 | 32,375 | ||||||||||||
|
||||||||||||||||
Income from continuing operations before income taxes |
2,553 | 4,405 | 9,711 | 11,888 | ||||||||||||
Provision for income taxes |
904 | 1,966 | 3,880 | 5,359 | ||||||||||||
|
||||||||||||||||
Income From Continuing Operations |
1,649 | 2,439 | 5,831 | 6,529 | ||||||||||||
Income from discontinued operations* |
1,078 | 57 | 1,131 | 183 | ||||||||||||
|
||||||||||||||||
Net income |
2,727 | 2,496 | 6,962 | 6,712 | ||||||||||||
Less: net income attributable to noncontrolling interests |
(23 | ) | (16 | ) | (54 | ) | (43 | ) | ||||||||
|
||||||||||||||||
Net Income Attributable to ConocoPhillips |
$ | 2,704 | 2,480 | 6,908 | 6,669 | |||||||||||
|
||||||||||||||||
Amounts Attributable to ConocoPhillips Common Shareholders: |
||||||||||||||||
Income from continuing operations |
$ | 1,626 | 2,423 | 5,777 | 6,486 | |||||||||||
Income from discontinued operations |
1,078 | 57 | 1,131 | 183 | ||||||||||||
|
||||||||||||||||
Net income |
$ | 2,704 | 2,480 | 6,908 | 6,669 | |||||||||||
|
||||||||||||||||
Net Income Attributable to ConocoPhillips Per Share of Common Stock (dollars) |
||||||||||||||||
Basic |
||||||||||||||||
Continuing operations |
$ | 1.31 | 1.96 | 4.67 | 5.26 | |||||||||||
Discontinued operations |
0.87 | 0.05 | 0.91 | 0.15 | ||||||||||||
|
||||||||||||||||
Net Income Attributable to ConocoPhillips Per Share of Common Stock |
$ | 2.18 | 2.01 | 5.58 | 5.41 | |||||||||||
|
||||||||||||||||
Diluted |
||||||||||||||||
Continuing operations |
$ | 1.31 | 1.95 | 4.63 | 5.23 | |||||||||||
Discontinued operations |
0.86 | 0.05 | 0.91 | 0.15 | ||||||||||||
|
||||||||||||||||
Net Income Attributable to ConocoPhillips Per Share of Common Stock |
$ | 2.17 | 2.00 | 5.54 | 5.38 | |||||||||||
|
||||||||||||||||
Dividends Paid Per Share of Common Stock (dollars) |
$ | 0.73 | 0.69 | 2.11 | 2.01 | |||||||||||
|
||||||||||||||||
Average Common Shares Outstanding (in thousands) |
||||||||||||||||
Basic |
1,238,234 | 1,231,054 | 1,236,431 | 1,230,027 | ||||||||||||
Diluted |
1,247,436 | 1,240,365 | 1,246,788 | 1,238,943 | ||||||||||||
|
||||||||||||||||
*Net of provision (benefit) for income taxes on discontinued operations of: | $ | (6 | ) | 136 | 16 | 215 |
See Notes to Consolidated Financial Statements.
1
Consolidated Statement of Comprehensive Income | ConocoPhillips |
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Net Income |
$ | 2,727 | 2,496 | 6,962 | 6,712 | |||||||||||
Other comprehensive income (loss) |
||||||||||||||||
Defined benefit plans |
||||||||||||||||
Reclassification adjustment for amortization of prior service credit included in net income |
(2 | ) | (1 | ) | (5 | ) | (4 | ) | ||||||||
Net actuarial gain arising during the period |
| 301 | | 302 | ||||||||||||
Reclassification adjustment for amortization of net actuarial losses included in net income |
32 | 106 | 98 | 220 | ||||||||||||
Nonsponsored plans* |
| | 5 | 1 | ||||||||||||
Income taxes on defined benefit plans |
(11 | ) | (155 | ) | (34 | ) | (197 | ) | ||||||||
|
||||||||||||||||
Defined benefit plans, net of tax |
19 | 251 | 64 | 322 | ||||||||||||
|
||||||||||||||||
Foreign currency translation adjustments |
(1,947 | ) | 623 | (1,501 | ) | (1,705 | ) | |||||||||
Reclassification adjustment for loss included in net income |
| | | (4 | ) | |||||||||||
Income taxes on foreign currency translation adjustments |
15 | (2 | ) | 20 | 12 | |||||||||||
|
||||||||||||||||
Foreign currency translation adjustments, net of tax |
(1,932 | ) | 621 | (1,481 | ) | (1,697 | ) | |||||||||
|
||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax |
(1,913 | ) | 872 | (1,417 | ) | (1,375 | ) | |||||||||
|
||||||||||||||||
Comprehensive Income |
814 | 3,368 | 5,545 | 5,337 | ||||||||||||
Less: comprehensive income attributable to noncontrolling interests |
(23 | ) | (16 | ) | (54 | ) | (43 | ) | ||||||||
|
||||||||||||||||
Comprehensive Income Attributable to ConocoPhillips |
$ | 791 | 3,352 | 5,491 | 5,294 | |||||||||||
|
*Plans for which ConocoPhillips is not the primary obligorprimarily those administered by equity affiliates.
See Notes to Consolidated Financial Statements.
2
Consolidated Balance Sheet | ConocoPhillips |
Millions of Dollars | ||||||||
September 30 | December 31 | |||||||
2014 | 2013 | |||||||
|
|
|||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 5,408 | 6,246 | |||||
Short-term investments* |
374 | 272 | ||||||
Accounts and notes receivable (net of allowance of $5 million in 2014 |
7,255 | 8,273 | ||||||
Accounts and notes receivablerelated parties |
198 | 214 | ||||||
Inventories |
1,330 | 1,194 | ||||||
Prepaid expenses and other current assets |
1,688 | 2,824 | ||||||
|
||||||||
Total Current Assets |
16,253 | 19,023 | ||||||
Investments and long-term receivables |
24,615 | 23,907 | ||||||
Loans and advancesrelated parties |
1,202 | 1,357 | ||||||
Net properties, plants and equipment (net of accumulated depreciation, depletion and amortization of $70,117 million in 2014 and $65,321 million in 2013) |
75,790 | 72,827 | ||||||
Other assets |
1,126 | 943 | ||||||
|
||||||||
Total Assets |
$ | 118,986 | 118,057 | |||||
|
||||||||
Liabilities |
||||||||
Accounts payable |
$ | 8,647 | 9,250 | |||||
Accounts payablerelated parties |
45 | 64 | ||||||
Short-term debt |
1,688 | 589 | ||||||
Accrued income and other taxes |
1,655 | 2,713 | ||||||
Employee benefit obligations |
713 | 842 | ||||||
Other accruals |
1,393 | 1,671 | ||||||
|
||||||||
Total Current Liabilities |
14,141 | 15,129 | ||||||
Long-term debt |
19,499 | 21,073 | ||||||
Asset retirement obligations and accrued environmental costs |
9,803 | 9,883 | ||||||
Deferred income taxes |
16,084 | 15,220 | ||||||
Employee benefit obligations |
2,219 | 2,459 | ||||||
Other liabilities and deferred credits |
1,579 | 1,801 | ||||||
|
||||||||
Total Liabilities |
63,325 | 65,565 | ||||||
|
||||||||
Equity |
||||||||
Common stock (2,500,000,000 shares authorized at $.01 par value) |
||||||||
Issued (20141,773,143,545 shares; 20131,768,169,906 shares) |
||||||||
Par value |
18 | 18 | ||||||
Capital in excess of par |
46,000 | 45,690 | ||||||
Treasury stock (at cost: 2014542,230,673 shares; 2013542,230,673 shares) |
(36,780 | ) | (36,780 | ) | ||||
Accumulated other comprehensive income |
585 | 2,002 | ||||||
Retained earnings |
45,451 | 41,160 | ||||||
|
||||||||
Total Common Stockholders Equity |
55,274 | 52,090 | ||||||
Noncontrolling interests |
387 | 402 | ||||||
|
||||||||
Total Equity |
55,661 | 52,492 | ||||||
|
||||||||
Total Liabilities and Equity |
$ | 118,986 | 118,057 | |||||
|
||||||||
*Includes marketable securities of: | $ | | 135 |
See Notes to Consolidated Financial Statements.
3
Consolidated Statement of Cash Flows | ConocoPhillips |
Millions of Dollars | ||||||||
Nine Months Ended September 30 |
||||||||
2014 | 2013 | |||||||
|
|
|||||||
Cash Flows From Operating Activities |
||||||||
Net income |
$ | 6,962 | 6,712 | |||||
Adjustments to reconcile net income to net cash provided by operating activities |
||||||||
Depreciation, depletion and amortization |
6,058 | 5,541 | ||||||
Impairments |
126 | 31 | ||||||
Dry hole costs and leasehold impairments |
668 | 345 | ||||||
Accretion on discounted liabilities |
357 | 317 | ||||||
Deferred taxes |
1,024 | 1,142 | ||||||
Undistributed equity earnings |
334 | (585 | ) | |||||
Gain on dispositions |
(20 | ) | (1,222 | ) | ||||
Income from discontinued operations |
(1,131 | ) | (183 | ) | ||||
Other |
(536 | ) | (280 | ) | ||||
Working capital adjustments |
||||||||
Decrease in accounts and notes receivable |
634 | 822 | ||||||
Increase in inventories |
(162 | ) | (301 | ) | ||||
Increase in prepaid expenses and other current assets |
(189 | ) | (172 | ) | ||||
Increase (decrease) in accounts payable |
(187 | ) | 324 | |||||
Increase (decrease) in taxes and other accruals |
57 | (550 | ) | |||||
|
||||||||
Net cash provided by continuing operating activities |
13,995 | 11,941 | ||||||
Net cash provided by discontinued operations |
143 | 235 | ||||||
|
||||||||
Net Cash Provided by Operating Activities |
14,138 | 12,176 | ||||||
|
||||||||
Cash Flows From Investing Activities |
||||||||
Capital expenditures and investments |
(12,729 | ) | (11,281 | ) | ||||
Proceeds from asset dispositions |
1,434 | 3,175 | ||||||
Net sales (purchases) of short-term investments |
(109 | ) | 1 | |||||
Collection of advances/loansrelated parties |
143 | 130 | ||||||
Other |
(454 | ) | (51 | ) | ||||
|
||||||||
Net cash used in continuing investing activities |
(11,715 | ) | (8,026 | ) | ||||
Net cash used in discontinued operations |
(59 | ) | (540 | ) | ||||
|
||||||||
Net Cash Used in Investing Activities |
(11,774 | ) | (8,566 | ) | ||||
|
||||||||
Cash Flows From Financing Activities |
||||||||
Repayment of debt |
(505 | ) | (946 | ) | ||||
Change in restricted cash |
| 748 | ||||||
Issuance of company common stock |
27 | 12 | ||||||
Dividends paid |
(2,618 | ) | (2,481 | ) | ||||
Other |
(20 | ) | (593 | ) | ||||
|
||||||||
Net cash used in continuing financing activities |
(3,116 | ) | (3,260 | ) | ||||
Net cash used in discontinued operations |
| | ||||||
|
||||||||
Net Cash Used in Financing Activities |
(3,116 | ) | (3,260 | ) | ||||
|
||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
(86 | ) | (85 | ) | ||||
|
||||||||
Net Change in Cash and Cash Equivalents |
(838 | ) | 265 | |||||
Cash and cash equivalents at beginning of period |
6,246 | 3,618 | ||||||
|
||||||||
Cash and Cash Equivalents at End of Period |
$ | 5,408 | 3,883 | |||||
|
See Notes to Consolidated Financial Statements.
4
Notes to Consolidated Financial Statements | ConocoPhillips |
Note 1Basis of Presentation
The interim-period financial information presented in the financial statements included in this report is unaudited and, in the opinion of management, includes all known accruals and adjustments necessary for a fair presentation of the consolidated financial position of ConocoPhillips and its results of operations and cash flows for such periods. All such adjustments are of a normal and recurring nature unless otherwise disclosed. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2013 Annual Report on Form 10-K.
Effective April 1, 2014, the Other International segment was restructured to focus on enhancing our capability to operate in emerging and new country business units. As a result, we moved the Latin America and Poland businesses from the historically presented Lower 48 and Latin America segment and the Europe segment to the Other International segment. Certain financial information has been revised for all prior periods presented to reflect the change in the composition of our operating segments. For additional information, see Note 18Segment Disclosures and Related Information.
The results of operations for our interest in the North Caspian Sea Production Sharing Agreement (Kashagan) and our Algeria and Nigeria businesses have been classified as discontinued operations for all periods presented. See Note 2Discontinued Operations, for additional information. Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates to our continuing operations.
Note 2Discontinued Operations
As part of our asset disposition program, we agreed to sell our interest in Kashagan and our Algeria and Nigeria businesses (collectively, the Disposition Group). The Disposition Group was previously part of the Other International operating segment. We completed the sales of Kashagan and our Algeria business in the fourth quarter of 2013 and the sale of our Nigeria business in the third quarter of 2014.
On December 20, 2012, we entered into agreements with affiliates of Oando PLC to sell our Nigeria business. The transaction originally included our upstream affiliates and Phillips (Brass) Limited, which owned a 17 percent interest in the Brass LNG Project. On July 30, 2014, we completed the sale of the upstream affiliates for $1,359 million, inclusive of $550 million deposits previously received. The deposits had been included in the Other accruals line on our consolidated balance sheet and in the Other line of cash flows from investing activities on our consolidated statement of cash flows. The deposits received included $435 million in 2012, $15 million in 2013, and $100 million in 2014. At closing we also received a $33 million short-term promissory note. We recognized a before-tax gain of $1,052 million, which is included in the Income from discontinued operations line on the consolidated income statement. At the time of disposition, the net carrying value of the upstream assets was $307 million, which included $233 million of other current assets, $1,211 million of properties, plants and equipment (PP&E), $298 million of other current liabilities, $14 million of asset retirement obligations (ARO), and $825 million of deferred taxes.
In the first quarter of 2014, we and Oando agreed to terminate the sales agreement for Phillips (Brass) Limited. In July 2014 we transferred our interest in the Brass LNG Project to the remaining shareholders in Brass LNG Limited. The financial impact of the transfer was recorded in the second quarter of 2014 and did not have a material effect on our consolidated financial statements.
5
The carrying amounts of the major classes of assets and liabilities associated with the Disposition Group as of December 31, 2013, were as follows:
Millions of Dollars | ||||
Assets |
||||
Accounts and notes receivable |
$ | 376 | ||
Inventories |
9 | |||
Prepaid expenses and other current assets |
72 | |||
|
||||
Total current assets of discontinued operations |
457 | |||
Investments and long-term receivables |
60 | |||
Loans and advancesrelated parties |
7 | |||
Net properties, plants and equipment |
1,154 | |||
Other assets |
1 | |||
|
||||
Total assets of discontinued operations |
$ | 1,679 | ||
|
||||
Liabilities |
||||
Accounts payable |
$ | 419 | ||
Accrued income and other taxes |
72 | |||
|
||||
Total current liabilities of discontinued operations |
491 | |||
Asset retirement obligations and accrued environmental costs |
14 | |||
Deferred income taxes |
765 | |||
|
||||
Total liabilities of discontinued operations |
$ | 1,270 | ||
|
Sales and other operating revenues and income from discontinued operations related to the Disposition Group were as follows:
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Sales and other operating revenues from discontinued operations |
$ | 161 | 353 | 480 | 892 | |||||||||||
|
||||||||||||||||
Income from discontinued operations before-tax |
$ | 1,072 | 193 | 1,147 | 398 | |||||||||||
Income tax expense (benefit) |
(6 | ) | 136 | 16 | 215 | |||||||||||
|
||||||||||||||||
Income from discontinued operations |
$ | 1,078 | 57 | 1,131 | 183 | |||||||||||
|
Note 3Variable Interest Entities (VIEs)
We hold variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. Information on our significant VIEs follows:
Freeport LNG Development, L.P. (Freeport LNG)
We have an agreement with Freeport LNG to participate in a liquefied natural gas (LNG) receiving terminal in Quintana, Texas. We have no ownership in Freeport LNG; however, we own a 50 percent interest in Freeport LNG GP, Inc. (Freeport GP), which serves as the general partner managing the venture. We entered into a credit agreement with Freeport LNG, whereby we agreed to provide loan financing for the construction of the terminal. We also entered into a long-term agreement with Freeport LNG to use 0.9 billion cubic feet per day of regasification capacity, which expires in 2033. When the terminal became operational in June 2008, we began making payments under the terminal use agreement. At September 30, 2014, the prepaid balance of the terminal use agreement was $318 million, which is primarily reflected in the Other assets line on our consolidated
6
balance sheet. Freeport LNG began making loan repayments in September 2008, and the loan balance outstanding was $460 million at September 30, 2014, and $506 million at December 31, 2013.
In July 2013 we reached an agreement with Freeport LNG to terminate our long-term agreement at the Freeport LNG Terminal, subject to Freeport LNG obtaining regulatory approval and project financing for an LNG liquefaction and export facility in Texas, in which we are not a participant. In July 2014 Freeport LNG received conditional approval from the Federal Energy Regulatory Commission (FERC), and in October 2014, Freeport LNG received FERCs permission to construct the facility. Upon satisfaction of their project financing conditions, currently expected to occur in the fourth quarter of 2014, we will pay Freeport LNG a termination fee of approximately $520 million. Freeport LNG will repay the outstanding ConocoPhillips loan used by Freeport LNG to partially fund the original construction of the terminal. These transactions, plus miscellaneous items, will result in a one-time net cash outflow of approximately $50 million for us. When the agreement becomes effective, we expect to recognize an after-tax charge to earnings of approximately $520 million. At that time, our terminal regasification capacity will be reduced from 0.9 billion cubic feet per day to 0.4 billion cubic feet per day, until July 1, 2016, at which time it will be reduced to zero.
Freeport LNG is a VIE because Freeport GP holds no equity in Freeport LNG, and the limited partners of Freeport LNG do not have any substantive decision making ability. Since we do not have the unilateral power to direct the key activities which most significantly impact its economic performance, we are not the primary beneficiary of Freeport LNG. These key activities primarily involve or relate to operating and maintaining the terminal. We also performed an analysis of the expected losses and determined we are not the primary beneficiary. This expected loss analysis took into account that the credit support arrangement requires Freeport LNG to maintain sufficient commercial insurance to mitigate any loan losses. The loan to Freeport LNG is accounted for as a financial asset, and our investment in Freeport GP is accounted for as an equity method investment.
Australia Pacific LNG Pty Ltd (APLNG)
APLNG is considered a VIE, as it has entered into certain contractual arrangements that provide it with additional forms of subordinated financial support. We are not the primary beneficiary of APLNG because we share with Origin Energy and China Petrochemical Corporation (Sinopec) the power to direct the key activities of APLNG that most significantly impact its economic performance, which involve activities related to the production and commercialization of coalbed methane, as well as LNG processing and export marketing. As a result, we do not consolidate APLNG, and it is accounted for as an equity method investment.
As of September 30, 2014, we have not provided any financial support to APLNG other than amounts previously contractually required. Unless we elect otherwise, we have no requirement to provide liquidity or purchase the assets of APLNG. See Note 5Investments, Loans and Long-Term Receivables, and Note 10Guarantees, for additional information.
Note 4Inventories
Inventories consisted of the following:
Millions of Dollars | ||||||||
September 30 2014 |
December 31 2013 |
|||||||
|
|
|||||||
Crude oil and natural gas |
$ | 536 | 452 | |||||
Materials, supplies and other |
794 | 742 | ||||||
|
||||||||
$ | 1,330 | 1,194 | ||||||
|
Inventories valued on the last-in, first-out (LIFO) basis totaled $430 million and $343 million at September 30, 2014 and December 31, 2013, respectively. The estimated excess of current replacement cost over LIFO cost
7
of inventories was approximately $80 million and $160 million at September 30, 2014 and December 31, 2013, respectively.
Note 5Investments, Loans and Long-Term Receivables
APLNG
APLNGs $8.5 billion project finance facility consists of financing agreements executed by APLNG with the Export-Import Bank of the United States for approximately $2.9 billion, the Export-Import Bank of China for approximately $2.7 billion, and a syndicate of Australian and international commercial banks for approximately $2.9 billion. At September 30, 2014, $8.0 billion had been drawn from the facility. In connection with the execution of the project financing, we provided a completion guarantee for our pro-rata share of the project finance facility until the project achieves financial completion. See Note 10Guarantees, for additional information.
APLNG is considered a VIE, as it has entered into certain contractual arrangements that provide it with additional forms of subordinated financial support. See Note 3Variable Interest Entities (VIEs), for additional information.
At September 30, 2014, the book value of our equity method investment in APLNG was $12,299 million, which included $829 million of cumulative translation effects due to strengthening of the Australian dollar relative to the U.S. dollar over time, and is included in the Investments and long-term receivables line on our consolidated balance sheet.
FCCL
In the first quarter of 2014, we received a $1.3 billion distribution from FCCL Partnership, our 50 percent owned business venture with Cenovus Energy Inc., which is included in the Undistributed equity earnings line on our consolidated statement of cash flows.
Loans and Long-Term Receivables
As part of our normal ongoing business operations and consistent with industry practice, we enter into numerous agreements with other parties to pursue business opportunities. Included in such activity are loans made to certain affiliated and non-affiliated companies. Significant loans to affiliated companies at September 30, 2014, included the following:
| $460 million in loan financing to Freeport LNG. See Note 3Variable Interest Entities (VIEs), for additional information. |
| $909 million in project financing to Qatar Liquefied Gas Company Limited (3) (QG3). |
The long-term portion of these loans is included in the Loans and advancesrelated parties line on our consolidated balance sheet, while the short-term portion is in Accounts and notes receivablerelated parties.
Note 6Suspended Wells and Wells in Progress
The capitalized cost of suspended wells at September 30, 2014, was $1,285 million, an increase of $291 million from $994 million at year-end 2013. No suspended wells were charged to dry hole expense during the first nine months of 2014 relating to exploratory well costs capitalized for a period greater than one year as of December 31, 2013.
In November 2014 we will plug and abandon the Kamoxi-1 exploration well, located in Block 36 offshore Angola. The cost of the well, which totaled $183 million pre-tax at September 30, 2014, will be expensed as a dry hole in the fourth quarter of 2014.
8
Note 7Impairments
During the three- and nine-month periods ended September 30, 2014 and 2013, we recognized before-tax impairment charges within the following segments:
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Alaska |
$ | 3 | | 3 | | |||||||||||
Lower 48 |
102 | | 119 | | ||||||||||||
Europe |
1 | | 1 | 28 | ||||||||||||
Asia Pacific and Middle East |
| 1 | | 3 | ||||||||||||
Corporate and Other |
2 | | 3 | | ||||||||||||
|
||||||||||||||||
$ | 108 | 1 | 126 | 31 | ||||||||||||
|
The three- and nine-month periods of 2014 included an impairment in our Lower 48 segment of $102 million, primarily as a result of reduced volume forecasts. We also recorded a $138 million impairment for the undeveloped leasehold costs associated with the same properties, which was included in the Exploration expenses line on our consolidated income statement.
The nine-month period of 2013 included an impairment in our Europe segment of $28 million, primarily due to increases in the ARO for the U.K. Don Field, which has ceased production.
In June 2014 we decided not to pursue future development of the Amauligak discovery at this time. Accordingly, we recorded a $145 million before-tax property impairment for the carrying value of capitalized undeveloped leasehold costs associated with our Amauligak, Arctic Islands and other Beaufort properties, located offshore Canada. This impairment is also included in the Exploration expenses line on our consolidated income statement.
Note 8Debt
In June 2014 we refinanced our revolving credit facility from a total of $7.5 billion to $7.0 billion, with a new expiration date of June 2019. Our revolving credit facility may be used for direct bank borrowings, for the issuance of letters of credit totaling up to $500 million, or as support for our commercial paper programs. The revolving credit facility is broadly syndicated among financial institutions and does not contain any material adverse change provisions or any covenants requiring maintenance of specified financial ratios or credit ratings. The facility agreement contains a cross-default provision relating to the failure to pay principal or interest on other debt obligations of $200 million or more by ConocoPhillips, or any of its consolidated subsidiaries.
Credit facility borrowings may bear interest at a margin above rates offered by certain designated banks in the London interbank market as administered by ICE Benchmark Administration or at a margin above the overnight federal funds rate or prime rates offered by certain designated banks in the United States. The agreement calls for commitment fees on available, but unused, amounts. The agreement also contains early termination rights if our current directors or their approved successors cease to be a majority of the Board of Directors.
9
We have two commercial paper programs supported by our $7.0 billion revolving credit facility: the ConocoPhillips $6.1 billion program, primarily a funding source for short-term working capital needs, and the ConocoPhillips Qatar Funding Ltd. $900 million program, which is used to fund commitments relating to QG3. Commercial paper maturities are generally limited to 90 days.
At September 30, 2014 and December 31, 2013, we had no direct outstanding borrowings under the revolving credit facility, with no letters of credit as of September 30, 2014 or December 31, 2013. In addition, under the ConocoPhillips Qatar Funding Ltd. commercial paper program, there was $860 million of commercial paper outstanding at September 30, 2014, compared with $961 million at December 31, 2013. Since we had $860 million of commercial paper outstanding and had issued no letters of credit, we had access to $6.1 billion in borrowing capacity under our revolving credit facility at September 30, 2014.
At September 30, 2014, we classified $752 million of short-term debt as long-term debt, based on our ability and intent to refinance the obligation on a long-term basis under our revolving credit facility.
During the first nine months of 2014, we repaid at maturity the aggregate principal amount of our $400 million 4.75% Notes due 2014. In October 2014 we notified holders of the outstanding $1.5 billion 4.60% Notes due January 2015 that early redemption will occur in November 2014.
During 2013 a lease of a semi-submersible floating production system (FPS) commenced for the Gumusut development, located in Malaysia, in which we are a co-venturer. As of September 30, 2014, the value of the capital lease asset and associated obligation for our proportionate interest in the FPS was $930 million. Following the startup of the FPS, which occurred in October 2014, the capital lease asset will be depreciated over a period consistent with the estimated proved reserves of Gumusut using the unit-of-production method with the associated depreciation included in the Depreciation, depletion and amortization line on our consolidated income statement.
Note 9Noncontrolling Interests
Activity attributable to common stockholders equity and noncontrolling interests for the first nine months of 2014 and 2013 was as follows:
Millions of Dollars | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Common Stockholders Equity |
Non- Controlling Interest |
Total Equity |
Common Stockholders Equity |
Non- Controlling Interest |
Total Equity |
|||||||||||||||||||
|
|
|||||||||||||||||||||||
Balance at January 1 |
$ | 52,090 | 402 | 52,492 | 47,987 | 440 | 48,427 | |||||||||||||||||
Net income |
6,908 | 54 | 6,962 | 6,669 | 43 | 6,712 | ||||||||||||||||||
Dividends |
(2,618 | ) | | (2,618 | ) | (2,481 | ) | | (2,481 | ) | ||||||||||||||
Distributions to noncontrolling interests |
| (69 | ) | (69 | ) | | (59 | ) | (59 | ) | ||||||||||||||
Other changes, net* |
(1,106 | ) | | (1,106 | ) | (1,062 | ) | | (1,062 | ) | ||||||||||||||
|
||||||||||||||||||||||||
Balance at September 30 |
$ | 55,274 | 387 | 55,661 | 51,113 | 424 | 51,537 | |||||||||||||||||
|
*Includes components of other comprehensive income, which are disclosed separately in the Consolidated Statement of Comprehensive Income.
10
Note 10Guarantees
At September 30, 2014, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantees and expect future performance to be either immaterial or have only a remote chance of occurrence.
APLNG Guarantees
At September 30, 2014, we have outstanding multiple guarantees in connection with our 37.5 percent ownership interest in APLNG. The following is a description of the guarantees with values calculated utilizing September 2014 exchange rates:
| We have guaranteed APLNGs performance with regard to a construction contract executed in connection with APLNGs issuance of the Train 1 and Train 2 Notices to Proceed. We estimate the remaining term of this guarantee is three years. Our maximum potential amount of future payments related to this guarantee is approximately $110 million and would become payable if APLNG cancels the applicable construction contract and does not perform with respect to the amounts owed to the contractor. |
| We have issued a construction completion guarantee related to the third-party project financing secured by APLNG. Our maximum potential amount of future payments under the guarantee is estimated to be $3.2 billion, which could be payable if the full debt financing capacity is utilized and completion of the project is not achieved. Our guarantee of the project financing will be released upon meeting certain completion tests with milestones, which we estimate would occur beginning in 2016. Our maximum exposure at September 30, 2014, is approximately $3.0 billion based upon our pro-rata share of the facility used at that date. At September 30, 2014, the carrying value of this guarantee is $114 million. |
| In conjunction with our original acquisition of an ownership interest in APLNG in October 2008, we agreed to guarantee an existing obligation of APLNG to deliver natural gas under several sales agreements with remaining terms of 2 to 27 years. Our maximum potential amount of future payments, or cost of volume delivery, under these guarantees is estimated to be $1.4 billion (approximately $2.4 billion in the event of intentional or reckless breach), and would become payable if APLNG fails to meet its obligations under these agreements and the obligations cannot otherwise be mitigated. Future payments are considered unlikely, as the payments, or cost of volume delivery, would only be triggered if APLNG does not have enough natural gas to meet these sales commitments and if the co-venturers do not make necessary equity contributions into APLNG. |
| We have guaranteed the performance of APLNG with regard to certain other contracts executed in connection with the projects continued development. The guarantees have remaining terms of up to 31 years or the life of the venture. Our maximum potential amount of future payments related to these guarantees is approximately $190 million and would become payable if APLNG does not perform. |
Other Guarantees
We have other guarantees with maximum future potential payment amounts totaling approximately $200 million, which consist primarily of guarantees of the residual value of leased corporate aircraft, guarantees to fund the short-term cash liquidity deficit of two joint ventures, a guarantee for our portion of a joint ventures debt obligations and a guarantee of minimum charter revenue for an LNG vessel. These guarantees have remaining terms of up to 10 years or the life of the venture and would become payable if, upon sale, certain asset values are lower than guaranteed amounts, business conditions decline at guaranteed entities, or as a result of non-performance of contractual terms by guaranteed parties.
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Indemnifications
Over the years, we have entered into agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to qualifying indemnifications. These agreements include indemnifications for taxes, environmental liabilities, employee claims, and litigation. The terms of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, the term is generally indefinite and the maximum amount of future payments is generally unlimited. The carrying amount recorded for these indemnifications at September 30, 2014, was approximately $100 million. We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information the liability is essentially relieved or amortize the liability over an appropriate time period as the fair value of our indemnification exposure declines. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. Included in the recorded carrying amount at September 30, 2014, were approximately $50 million of environmental accruals for known contamination that are included in the Asset retirement obligations and accrued environmental costs line on our consolidated balance sheet. For additional information about environmental liabilities, see Note 11Contingencies and Commitments.
On April 30, 2012, the separation of our downstream businesses was completed, creating two independent energy companies: ConocoPhillips and Phillips 66. In connection with the separation, we entered into an Indemnification and Release Agreement, which provides for cross-indemnities between Phillips 66 and us and established procedures for handling claims subject to indemnification and related matters. We evaluated the impact of the indemnifications given and the Phillips 66 indemnifications received as of the separation date and concluded those fair values were immaterial.
Note 11Contingencies and Commitments
A number of lawsuits involving a variety of claims arising in the ordinary course of business have been made against ConocoPhillips. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we accrue receivables for probable insurance or other third-party recoveries. With respect to income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.
Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.
Environmental
We are subject to international, federal, state and local environmental laws and regulations. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on managements best estimates, using all information that is available at the time. We measure estimates and base liabilities on
12
currently available facts, existing technology, and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies cleanup experience, and data released by the U.S. Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable.
Although liability of those potentially responsible for environmental remediation costs is generally joint and several for federal sites and frequently so for other sites, we are usually only one of many companies cited at a particular site. Due to the joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites at which we are potentially responsible are still under investigation by the EPA or the agency concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit and some of the indemnifications are subject to dollar limits and time limits.
We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state and international sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those acquired in a purchase business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated. At September 30, 2014, our balance sheet included a total environmental accrual of $366 million, compared with $348 million at December 31, 2013, for remediation activities in the United States and Canada. We expect to incur a substantial amount of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.
Legal Proceedings
We are subject to various lawsuits and claims including but not limited to matters involving oil and gas royalty and severance tax payments, gas measurement and valuation methods, contract disputes, environmental damages, personal injury, and property damage. Our primary exposures for such matters relate to alleged royalty underpayments on certain federal, state and privately owned properties and claims of alleged environmental contamination from historic operations. We will continue to defend ourselves vigorously in these matters.
Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.
Other Contingencies
We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not
13
utilized. In addition, at September 30, 2014, we had performance obligations secured by letters of credit of $700 million (issued as direct bank letters of credit) related to various purchase commitments for materials, supplies, commercial activities and services incident to the ordinary conduct of business.
In 2007 we announced we had been unable to reach agreement with respect to our migration to an empresa mixta structure mandated by the Venezuelan governments Nationalization Decree. As a result, Venezuelas national oil company, Petróleos de Venezuela S.A. (PDVSA), or its affiliates, directly assumed control over ConocoPhillips interests in the Petrozuata and Hamaca heavy oil ventures and the offshore Corocoro development project. In response to this expropriation, we filed a request for international arbitration on November 2, 2007, with the World Banks International Centre for Settlement of Investment Disputes (ICSID). An arbitration hearing was held before an ICSID tribunal during the summer of 2010. On September 3, 2013, an ICSID arbitration tribunal held that Venezuela unlawfully expropriated ConocoPhillips significant oil investments in June 2007. A separate arbitration phase is currently proceeding to determine the damages owed to ConocoPhillips for Venezuelas actions. On October 10, 2014, we filed a separate arbitration under the rules of the International Chamber of Commerce against PDVSA for contractual compensation related to the Petrozuata and Hamaca heavy crude oil projects.
In 2008 Burlington Resources, Inc., a wholly owned subsidiary of ConocoPhillips, initiated arbitration before ICSID against The Republic of Ecuador, as a result of the newly enacted Windfall Profits Tax Law and government-mandated renegotiation of our production sharing contracts. Despite a restraining order issued by the ICSID tribunal, Ecuador confiscated the crude oil production of Burlington and its co-venturer and sold the seized crude oil. In 2009 Ecuador took over operations in Blocks 7 and 21, fully expropriating our assets. In June 2010, the ICSID tribunal concluded it has jurisdiction to hear the expropriation claim. On April 24, 2012, Ecuador filed supplemental counterclaims asserting environmental damages, which we believe are not material. The ICSID tribunal issued a decision on liability on December 14, 2012, in favor of Burlington, finding that Ecuadors seizure of Blocks 7 and 21 was an unlawful expropriation in violation of the Ecuador-U.S. Bilateral Investment Treaty. An additional arbitration phase is currently proceeding to determine the damages owed to ConocoPhillips for Ecuadors actions and to address Ecuadors counterclaims.
ConocoPhillips served a Notice of Arbitration on the Timor-Leste Minister of Finance in October 2012 for outstanding disputes related to a series of tax assessments. As of September 2014 ConocoPhillips paid, under protest, tax assessments totaling approximately $237 million, which are primarily recorded in the Investments and long-term receivables line on our consolidated balance sheet. The arbitration hearing was conducted in Singapore in June 2014 under the United Nations Commission on International Trade Laws (UNCITRAL) arbitration rules, pursuant to the terms of the Tax Stability Agreement with the Timor-Leste government. Post-hearing briefs from both parties were filed in August 2014. We are now awaiting the Tribunals decision. Future impacts on our business are not known at this time.
Note 12Derivative and Financial Instruments
Derivative Instruments
We use futures, forwards, swaps and options in various markets to meet our customer needs and capture market opportunities. Our commodity business primarily consists of natural gas, crude oil, bitumen, LNG and natural gas liquids.
Our derivative instruments are held at fair value on our consolidated balance sheet. Where these balances have the right of setoff, they are presented on a net basis. Related cash flows are recorded as operating activities on the consolidated statement of cash flows. On our consolidated income statement, realized and unrealized gains and losses are recognized either on a gross basis if directly related to our physical business or a net basis if held for trading. Gains and losses related to contracts that meet and are designated with the normal purchase normal sale exception are recognized upon settlement. We generally apply this exception to eligible crude contracts. We do not use hedge accounting for our commodity derivatives.
14
The following table presents the gross fair values of our commodity derivatives, excluding collateral, and the line items where they appear on our consolidated balance sheet:
Millions of Dollars | ||||||||
September 30 2014 |
December 31 2013 |
|||||||
|
|
|||||||
Assets |
||||||||
Prepaid expenses and other current assets |
$ | 1,003 | 871 | |||||
Other assets |
79 | 64 | ||||||
Liabilities |
||||||||
Other accruals |
1,006 | 890 | ||||||
Other liabilities and deferred credits |
71 | 58 | ||||||
|
The gains (losses) from commodity derivatives incurred, and the line items where they appear on our consolidated income statement were:
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Sales and other operating revenues |
$ | (185 | ) | 61 | 236 | (122 | ) | |||||||||
Other income |
1 | | 3 | 3 | ||||||||||||
Purchased commodities |
163 | (68 | ) | (221 | ) | 103 | ||||||||||
|
The table below summarizes our material net exposures resulting from outstanding commodity derivative contracts:
Open Position Long/(Short) |
||||||||
September 30 2014 |
December 31 2013 |
|||||||
|
|
|||||||
Commodity |
||||||||
Natural gas and power (billions of cubic feet equivalent) |
||||||||
Fixed price |
(17 | ) | (18 | ) | ||||
Basis |
24 | (10 | ) | |||||
|
Foreign Currency Exchange Derivatives
We have foreign currency exchange rate risk resulting from international operations. Our foreign currency exchange derivative activity primarily consists of transactions designed to mitigate our cash-related and foreign currency exchange rate exposures, such as firm commitments for capital programs or local currency tax payments, dividends, and cash returns from net investments in foreign affiliates. We do not elect hedge accounting on our foreign currency exchange derivatives.
15
The following table presents the gross fair values of our foreign currency exchange derivatives, excluding collateral, and the line items where they appear on our consolidated balance sheet:
Millions of Dollars | ||||||||
September 30 2014 |
December 31 2013 |
|||||||
|
|
|||||||
Assets |
||||||||
Prepaid expenses and other current assets |
$ | 2 | 1 | |||||
|
The (gains) losses from foreign currency exchange derivatives incurred, and the line item where they appear on our consolidated income statement were:
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|||||||||||||||
Foreign currency transaction (gains) losses |
$ | 5 | (57 | ) | (2 | ) | | |||||||||
|
We had the following net notional position of outstanding foreign currency exchange derivatives:
In Millions Notional Currency |
||||||||||
September 30 2014 |
December 31 2013 |
|||||||||
|
||||||||||
Buy U.S. dollar, sell other currencies* |
USD | 36 | 6 | |||||||
Buy British pound, sell euro |
GBP | 50 | 17 | |||||||
|
*Primarily Canadian dollar and Norwegian krone.
Financial Instruments
We have certain financial instruments on our consolidated balance sheet related to interest bearing time deposits and commercial paper. These held-to-maturity financial instruments are included in Cash and cash equivalents on our consolidated balance sheet if the maturities at the time we made the investments were 90 days or less; otherwise, these investments are included in Short-term investments on our consolidated balance sheet.
Millions of Dollars | ||||||||||||||||
Carrying Amount | ||||||||||||||||
Cash and Cash Equivalents | Short-Term Investments | |||||||||||||||
September 30 2014 |
December 31 2013 |
September 30 2014 |
December 31 2013 |
|||||||||||||
|
|
|
|
|||||||||||||
Cash |
$ | 713 | 636 | | | |||||||||||
Money Market Funds |
300 | | | | ||||||||||||
Time deposits |
||||||||||||||||
Remaining maturities from 1 to 90 days |
3,752 | 5,336 | 374 | 137 | ||||||||||||
Commercial paper |
||||||||||||||||
Remaining maturities from 1 to 90 days |
643 | 274 | | 135 | ||||||||||||
|
||||||||||||||||
$ | 5,408 | 6,246 | 374 | 272 | ||||||||||||
|
16
Credit Risk
Financial instruments potentially exposed to concentrations of credit risk consist primarily of cash equivalents, short-term investments, over-the-counter (OTC) derivative contracts and trade receivables. Our cash equivalents and short-term investments are placed in high-quality commercial paper, money market funds, government debt securities and time deposits with major international banks and financial institutions.
The credit risk from our OTC derivative contracts, such as forwards and swaps, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared with an exchange clearinghouse and subject to mandatory margin requirements until settled; however, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements.
Our trade receivables result primarily from our petroleum operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less, and we continually monitor this exposure and the creditworthiness of the counterparties. We do not generally require collateral to limit the exposure to loss; however, we will sometimes use letters of credit, prepayments and master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due us.
Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if we fall below investment grade. Cash is the primary collateral in all contracts; however, many also permit us to post letters of credit as collateral, such as transactions administered through the New York Mercantile Exchange or IntercontinentalExchange.
The aggregate fair value of all derivative instruments with such credit-risk-related contingent features that were in a liability position on September 30, 2014 and December 31, 2013, was $81 million and $57 million, respectively. For these instruments, no collateral was posted as of September 30, 2014 or December 31, 2013. If our credit rating had been lowered one level from its A rating (per Standard and Poors) on September 30, 2014, we would be required to post $1 million of additional collateral to our counterparties. If we had been downgraded below investment grade, we would be required to post $81 million of additional collateral, either with cash or letters of credit.
Note 13Fair Value Measurement
We carry a portion of our assets and liabilities at fair value that are measured at a reporting date using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability) and disclosed according to the quality of valuation inputs under the following hierarchy:
| Level 1: Quoted prices (unadjusted) in an active market for identical assets or liabilities. |
| Level 2: Inputs other than quoted prices that are directly or indirectly observable. |
| Level 3: Unobservable inputs that are significant to the fair value of assets or liabilities. |
The classification of an asset or liability is based on the lowest level of input significant to its fair value. Those that are initially classified as Level 3 are subsequently reported as Level 2 when the fair value derived from
17
unobservable inputs is inconsequential to the overall fair value, or if corroborated market data becomes available. Assets and liabilities that are initially reported as Level 2 are subsequently reported as Level 3 if corroborated market data is no longer available. Transfers occur at the end of the reporting period. There were no material transfers in or out of Level 1 during 2014 or 2013.
Recurring Fair Value Measurement
Financial assets and liabilities reported at fair value on a recurring basis primarily include commodity derivatives and certain investments to support nonqualified deferred compensation plans. The deferred compensation investments are measured at fair value using unadjusted prices available from national securities exchanges; therefore, these assets are categorized as Level 1 in the fair value hierarchy. Level 1 derivative assets and liabilities primarily represent exchange-traded futures and options that are valued using unadjusted prices available from the underlying exchange. Level 2 derivative assets and liabilities primarily represent OTC swaps, options and forward purchase and sale contracts that are valued using adjusted exchange prices, prices provided by brokers or pricing service companies that are all corroborated by market data. Level 3 derivative assets and liabilities consist of OTC swaps, options and forward purchase and sale contracts that are long term in nature and where a significant portion of fair value is calculated from underlying market data that is not readily available. The derived value uses industry standard methodologies that may consider the historical relationships among various commodities, modeled market prices, time value, volatility factors and other relevant economic measures. The use of these inputs results in managements best estimate of fair value. Level 3 activity was not material for all periods presented.
The following table summarizes the fair value hierarchy for gross financial assets and liabilities (i.e., unadjusted where the right of setoff exists for commodity derivatives accounted for at fair value on a recurring basis):
Millions of Dollars | ||||||||||||||||||||||||||||||||
September 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Deferred compensation investments |
$ | 300 | | | 300 | 306 | | | 306 | |||||||||||||||||||||||
Commodity derivatives |
873 | 197 | 12 | 1,082 | 744 | 177 | 10 | 931 | ||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total assets |
$ | 1,173 | 197 | 12 | 1,382 | 1,050 | 177 | 10 | 1,237 | |||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Commodity derivatives |
$ | 871 | 190 | 16 | 1,077 | 765 | 172 | 7 | 944 | |||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total liabilities |
$ | 871 | 190 | 16 | 1,077 | 765 | 172 | 7 | 944 | |||||||||||||||||||||||
|
18
The following table summarizes those commodity derivative balances subject to the right of setoff as presented on our consolidated balance sheet. We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists.
Millions of Dollars | ||||||||||||||||||||||||
Gross Amounts Recognized |
Gross Amounts Offset |
Net Amounts Presented |
Cash Collateral |
Gross Amounts without Right of Setoff |
Net Amounts |
|||||||||||||||||||
|
|
|||||||||||||||||||||||
September 30, 2014 |
||||||||||||||||||||||||
Assets |
$ | 1,082 | 955 | 127 | 2 | 15 | 110 | |||||||||||||||||
Liabilities |
1,077 | 955 | 122 | 10 | 13 | 99 | ||||||||||||||||||
|
||||||||||||||||||||||||
December 31, 2013 |
||||||||||||||||||||||||
Assets |
$ | 931 | 827 | 104 | 6 | 12 | 86 | |||||||||||||||||
Liabilities |
944 | 827 | 117 | 26 | 9 | 82 | ||||||||||||||||||
|
At September 30, 2014 and December 31, 2013, we did not present any amounts gross on our consolidated balance sheet where we had the right of setoff.
Non-Recurring Fair Value Measurement
The following table shows the values of assets, by major category, measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition:
Millions of Dollars | ||||||||||||
Fair Value Measurements Using |
||||||||||||
Fair Value | Level 3 Inputs |
Before-Tax Loss |
||||||||||
September 30, 2014 |
||||||||||||
Net PP&E (held for use) |
$ | 12 | 12 | 102 | ||||||||
Net PP&E (unproved property) |
38 | 38 | 138 | |||||||||
|
Net PP&E held for use was written down to fair value, less costs to sell. The fair value was determined by internal discounted cash flow models using estimates of future production, prices from futures exchanges and pricing service companies, costs and a discount rate believed to be consistent with those used by principal market participants.
Net PP&E unproved property was written down to fair value less costs to sell based on a risk-weighted assessment of indicative offers received.
Reported Fair Values of Financial Instruments
We used the following methods and assumptions to estimate the fair value of financial instruments:
| Cash and cash equivalents and short-term investments: The carrying amount reported on the balance sheet approximates fair value. |
| Accounts and notes receivable (including long-term and related parties): The carrying amount reported on the balance sheet approximates fair value. The valuation technique and methods used to estimate the fair value of the current portion of fixed-rate related party loans is consistent with Loans and advancesrelated parties. |
19
| Loans and advancesrelated parties: The carrying amount of floating-rate loans approximates fair value. The fair value of fixed-rate loan activity is measured using market observable data and is categorized as Level 2 in the fair value hierarchy. See Note 5Investments, Loans and Long-Term Receivables, for additional information. |
| Accounts payable (including related parties) and floating-rate debt: The carrying amount of accounts payable and floating-rate debt reported on the balance sheet approximates fair value. |
| Fixed-rate debt: The estimated fair value of fixed-rate debt is measured using prices available from a pricing service that is corroborated by market data; therefore, these liabilities are categorized as Level 2 in the fair value hierarchy. |
The following table summarizes the net fair value of financial instruments (i.e., adjusted where the right of setoff exists for commodity derivatives):
Millions of Dollars | ||||||||||||||||
Carrying Amount | Fair Value | |||||||||||||||
September 30 2014 |
December 31 2013 |
September 30 2014 |
December 31 2013 |
|||||||||||||
|
|
|
|
|||||||||||||
Financial assets |
||||||||||||||||
Deferred compensation investments |
$ | 300 | 306 | 300 | 306 | |||||||||||
Commodity derivatives |
125 | 99 | 125 | 99 | ||||||||||||
Total loans and advancesrelated parties |
1,376 | 1,528 | 1,509 | 1,680 | ||||||||||||
Financial liabilities |
||||||||||||||||
Total debt, excluding capital leases |
20,221 | 20,740 | 23,672 | 23,553 | ||||||||||||
Commodity derivatives |
112 | 92 | 112 | 92 | ||||||||||||
|
Note 14Accumulated Other Comprehensive Income
Accumulated other comprehensive income in the equity section of our consolidated balance sheet included:
Millions of Dollars | ||||||||||||
Defined Benefit Plans |
Foreign Currency Translation |
Accumulated Other Comprehensive Income (Loss) |
||||||||||
|
|
|||||||||||
December 31, 2013 |
$ | (824 | ) | 2,826 | 2,002 | |||||||
Other comprehensive income (loss) |
64 | (1,481 | ) | (1,417 | ) | |||||||
|
||||||||||||
September 30, 2014 |
$ | (760 | ) | 1,345 | 585 | |||||||
|
There were no items within accumulated other comprehensive income related to noncontrolling interests.
The following table summarizes reclassifications out of accumulated other comprehensive income:
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Defined benefit plans |
$ | 19 | 65 | 59 | 133 | |||||||||||
|
||||||||||||||||
Above amounts are included in the computation of net periodic benefit cost and are presented net of tax expense of: | $ | 11 | 40 | 34 | 83 |
See Note 16Employee Benefit Plans, for additional information.
20
Note 15Cash Flow Information
Millions of Dollars | ||||||||
Nine Months Ended September 30 |
||||||||
2014 | 2013 | |||||||
|
|
|||||||
Cash Payments |
||||||||
Interest |
$ | 491 | 448 | |||||
Income taxes |
3,359 | 4,050 | ||||||
|
||||||||
Net Sales (Purchases) of Short-Term Investments |
||||||||
Short-term investments purchased |
$ | (876 | ) | (97 | ) | |||
Short-term investments sold |
767 | 98 | ||||||
|
||||||||
$ | (109 | ) | 1 | |||||
|
Note 16Employee Benefit Plans
Pension and Postretirement Plans
Millions of Dollars | ||||||||||||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
U.S. | Intl. | U.S. | Intl. | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Components of Net Periodic Benefit Cost |
||||||||||||||||||||||||
Three Months Ended September 30 |
||||||||||||||||||||||||
Service cost |
$ | 31 | 27 | 35 | 25 | 1 | | |||||||||||||||||
Interest cost |
42 | 42 | 35 | 35 | 8 | 8 | ||||||||||||||||||
Expected return on plan assets |
(53 | ) | (45 | ) | (47 | ) | (40 | ) | | | ||||||||||||||
Amortization of prior service cost (credit) |
1 | (2 | ) | 2 | (2 | ) | (1 | ) | (1 | ) | ||||||||||||||
Recognized net actuarial loss (gain) |
19 | 14 | 38 | 18 | (1 | ) | | |||||||||||||||||
Settlements |
| | 50 | | | | ||||||||||||||||||
|
||||||||||||||||||||||||
Net periodic benefit cost |
$ | 40 | 36 | 113 | 36 | 7 | 7 | |||||||||||||||||
|
||||||||||||||||||||||||
Nine Months Ended September 30 | ||||||||||||||||||||||||
Service cost |
$ | 93 | 83 | 104 | 76 | 2 | 2 | |||||||||||||||||
Interest cost |
124 | 126 | 107 | 108 | 22 | 20 | ||||||||||||||||||
Expected return on plan assets |
(159 | ) | (137 | ) | (140 | ) | (120 | ) | | | ||||||||||||||
Amortization of prior service cost (credit) |
4 | (6 | ) | 5 | (6 | ) | (3 | ) | (3 | ) | ||||||||||||||
Recognized net actuarial loss (gain) |
57 | 43 | 113 | 55 | (2 | ) | 2 | |||||||||||||||||
Settlements |
| | 50 | | | | ||||||||||||||||||
|
||||||||||||||||||||||||
Net periodic benefit cost |
$ | 119 | 109 | 239 | 113 | 19 | 21 | |||||||||||||||||
|
During the first nine months of 2014, we contributed $304 million to our domestic benefit plans and $111 million to our international benefit plans. In 2014 we expect to contribute approximately $320 million to our domestic qualified and nonqualified pension and postretirement benefit plans and $210 million to our international qualified and nonqualified pension and postretirement benefit plans.
During the three months ended September 30, 2013, we concluded that lump-sum benefit payments would exceed the sum of service and interest costs for the plan year for the U.S. qualified pension plan. As a result, we recognized a proportionate share of prior actuarial losses, or pension settlement expense, of $50 million. In
21
conjunction with the recognition of pension settlement expense, the assets and pension benefit obligation of the U.S. qualified pension plan were remeasured. At the measurement date, the net pension liability decreased $301 million to $725 million, resulting in a corresponding increase to other comprehensive income.
Note 17Related Party Transactions
We consider our equity method investments to be related parties. Significant transactions with related parties were:
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Operating revenues and other income |
$ | 32 | 35 | 89 | 74 | |||||||||||
Purchases |
47 | 48 | 147 | 138 | ||||||||||||
Operating expenses and selling, general and administrative expenses* |
21 | 10 | 53 | 25 | ||||||||||||
Net interest (income) expense** |
(12 | ) | 6 | (36 | ) | 22 | ||||||||||
|
*2013 has been restated to eliminate certain non-related party transactions.
**We paid interest to, or received interest from, various affiliates. See Note 5Investments, Loans and Long-Term Receivables, for additional information on loans to affiliated companies.
Note 18Segment Disclosures and Related Information
We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and natural gas liquids on a worldwide basis. We manage our operations through six operating segments, which are primarily defined by geographic region: Alaska, Lower 48, Canada, Europe, Asia Pacific and Middle East, and Other International.
Effective April 1, 2014, the Other International segment was restructured to focus on enhancing our capability to operate in emerging and new country business units. As a result, we moved the Latin America and Poland businesses from the historically presented Lower 48 and Latin America segment and the Europe segment to the Other International segment. Results of operations for the Lower 48, Europe and Other International segments have been revised for all periods presented. There was no impact on our consolidated financial statements, and the impact on our segment presentation was immaterial.
In 2012 we agreed to sell our Nigeria and Algeria businesses and our interest in Kashagan. We sold our Nigeria business in the third quarter of 2014, and we sold Kashagan and our Algeria business in the fourth quarter of 2013. Results for the Disposition Group have been reported as discontinued operations in all periods presented. For additional information, see Note 2Discontinued Operations.
Corporate and Other represents costs not directly associated with an operating segment, such as most interest expense, corporate overhead and certain technology activities, including licensing revenues. Corporate assets include all cash and cash equivalents and short-term investments.
We evaluate performance and allocate resources based on net income attributable to ConocoPhillips. Intersegment sales are at prices that approximate market.
22
Analysis of Results by Operating Segment
Millions of Dollars | ||||||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
|
|
|
|
|||||||||||||
Sales and Other Operating Revenues |
||||||||||||||||
Alaska |
$ | 2,094 | 2,102 | 6,687 | 6,375 | |||||||||||
|
||||||||||||||||
Lower 48 |
5,082 | 4,938 | 17,196 | 14,661 | ||||||||||||
Intersegment eliminations |
(28 | ) | (24 | ) | (88 | ) | (79 | ) | ||||||||
|
||||||||||||||||
Lower 48 |
5,054 | 4,914 | 17,108 | 14,582 | ||||||||||||
|
||||||||||||||||
Canada |
1,086 | 1,264 | 4,113 | 3,924 | ||||||||||||
Intersegment eliminations |
(128 | ) | (135 | ) | (618 | ) | (448 | ) | ||||||||
|
||||||||||||||||
Canada |
958 | 1,129 | 3,495 | 3,476 | ||||||||||||
|
||||||||||||||||
Europe |
2,241 | 3,024 | 8,195 | 8,885 | ||||||||||||
Intersegment eliminations |
(3 | ) | | (47 | ) | | ||||||||||
|
||||||||||||||||
Europe |
2,238 | 3,024 | 8,148 | 8,885 | ||||||||||||
|
||||||||||||||||
Asia Pacific and Middle East |
1,658 | 2,196 | 5,758 | 6,500 | ||||||||||||
Other International |
60 | 262 | 65 | 1,202 | ||||||||||||
Corporate and Other |
18 | 16 | 55 | 139 | ||||||||||||
|
||||||||||||||||
Consolidated sales and other operating revenues |
$ | 12,080 | 13,643 | 41,316 | 41,159 | |||||||||||
|
||||||||||||||||
Net Income Attributable to ConocoPhillips |
||||||||||||||||
Alaska |
$ | 473 | 494 | 1,698 | 1,719 | |||||||||||
Lower 48 |
32 | 209 | 621 | 547 | ||||||||||||
Canada |
307 | 642 | 845 | 780 | ||||||||||||
Europe |
213 | 288 | 819 | 1,005 | ||||||||||||
Asia Pacific and Middle East |
749 | 741 | 2,336 | 2,676 | ||||||||||||
Other International |
(18 | ) | 283 | 74 | 328 | |||||||||||
Corporate and Other |
(130 | ) | (234 | ) | (616 | ) | (569 | ) | ||||||||
Discontinued operations |
1,078 | 57 | 1,131 | 183 | ||||||||||||
|
||||||||||||||||
Consolidated net income attributable to ConocoPhillips |
$ | 2,704 | 2,480 | 6,908 | 6,669 | |||||||||||
|
Millions of Dollars | ||||||||
September 30 2014 |
December 31 2013 |
|||||||
|
|
|||||||
Total Assets |
||||||||
Alaska |
$ | 12,667 | 11,662 | |||||
Lower 48 |
30,749 | 29,552 | ||||||
Canada |
21,963 | 22,394 | ||||||
Europe |
16,968 | 17,223 | ||||||
Asia Pacific and Middle East |
26,276 | 25,473 | ||||||
Other International |
2,190 | 1,705 | ||||||
Corporate and Other |
8,062 | 8,367 | ||||||
Discontinued operations |
111 | 1,681 | ||||||
|
||||||||
Consolidated total assets |
$ | 118,986 | 118,057 | |||||
|
23
Note 19Income Taxes
Our effective tax rates from continuing operations for the third quarter and first nine months of 2014 were 35 percent and 40 percent, respectively, compared with 45 percent for the same periods of 2013. The lower rates were primarily due to a smaller proportion of income in higher tax jurisdictions in 2014 and the election of the fair market value method of apportioning interest expense in the United States. The effective tax rate for the first nine months of 2013 was favorably impacted by the tax resolution associated with the sale of certain western Canada properties which occurred in a prior year.
For the first nine months of 2014, the effective tax rate in excess of the domestic federal statutory rate of 35 percent was primarily due to foreign taxes.
Note 20New Accounting Standards
In May 2014 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU supersedes the revenue recognition requirements in FASB Accounting Standards Codification (ASC) Topic 605, Revenue Recognition, and most industry-specific guidance. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity will be required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The ASU is effective for interim and annual periods beginning after December 15, 2016. Early adoption is not permitted. Entities may choose to adopt the standard using either a full retrospective approach or a modified retrospective approach. We are currently evaluating the impact of the adoption of this ASU.
24
Supplementary InformationCondensed Consolidating Financial Information
We have various cross guarantees among ConocoPhillips, ConocoPhillips Company and ConocoPhillips Canada Funding Company I, with respect to publicly held debt securities. ConocoPhillips Company is 100 percent owned by ConocoPhillips. ConocoPhillips Canada Funding Company I is an indirect, 100 percent owned subsidiary of ConocoPhillips Company. ConocoPhillips and ConocoPhillips Company have fully and unconditionally guaranteed the payment obligations of ConocoPhillips Canada Funding Company I, with respect to its publicly held debt securities. Similarly, ConocoPhillips has fully and unconditionally guaranteed the payment obligations of ConocoPhillips Company with respect to its publicly held debt securities. In addition, ConocoPhillips Company has fully and unconditionally guaranteed the payment obligations of ConocoPhillips with respect to its publicly held debt securities. All guarantees are joint and several. The following condensed consolidating financial information presents the results of operations, financial position and cash flows for:
| ConocoPhillips, ConocoPhillips Company and ConocoPhillips Canada Funding Company I (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting). |
| All other nonguarantor subsidiaries of ConocoPhillips. |
| The consolidating adjustments necessary to present ConocoPhillips results on a consolidated basis. |
During 2013 ConocoPhillips Australia Funding Companys guaranteed, publicly held debt was repaid. Beginning in the first quarter of 2014, financial information for ConocoPhillips Australia Funding Company is presented in the All Other Subsidiaries column of our condensed consolidating financial information.
In April 2014 ConocoPhillips received a $32 billion dividend from ConocoPhillips Company to settle certain accumulated intercompany balances. This consisted of a $15 billion distribution of earnings and a $17 billion return of capital. The transaction was reflected in the second quarter 2014 Condensed Consolidating Financial Information for ConocoPhillips and ConocoPhillips Company and had no impact on our consolidated financial statements.
This condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and notes.
25
Millions of Dollars | ||||||||||||||||||||||||
Three Months Ended September 30, 2014 | ||||||||||||||||||||||||
Income Statement | ConocoPhillips | ConocoPhillips Company |
ConocoPhillips Canada Funding Company I |
All Other Subsidiaries |
Consolidating Adjustments |
Total Consolidated |
||||||||||||||||||
Revenues and Other Income |
||||||||||||||||||||||||
Sales and other operating revenues |
$ | | 4,672 | | 7,408 | | 12,080 | |||||||||||||||||
Equity in earnings of affiliates |
1,722 | 2,098 | | 975 | (4,031 | ) | 764 | |||||||||||||||||
Gain on dispositions |
| 2 | | 2 | | 4 | ||||||||||||||||||
Other income |
1 | 15 | | 53 | | 69 | ||||||||||||||||||
Intercompany revenues |
20 | 104 | 72 | 1,444 | (1,640 | ) | | |||||||||||||||||
|
||||||||||||||||||||||||
Total Revenues and Other Income |
1,743 | 6,891 | 72 | 9,882 | (5,671 | ) | 12,917 | |||||||||||||||||
|
||||||||||||||||||||||||
Costs and Expenses |
||||||||||||||||||||||||
Purchased commodities |
| 4,036 | | 2,139 | (1,472 | ) | 4,703 | |||||||||||||||||
Production and operating expenses |
| 414 | | 1,617 | 10 | 2,041 | ||||||||||||||||||
Selling, general and administrative expenses |
2 | 136 | 1 | 65 | (1 | ) | 203 | |||||||||||||||||
Exploration expenses |
| 331 | | 128 | | 459 | ||||||||||||||||||
Depreciation, depletion and amortization |
| 273 | | 1,823 | | 2,096 | ||||||||||||||||||
Impairments |
| 104 | | 4 | | 108 | ||||||||||||||||||
Taxes other than income taxes |
| 69 | | 424 | | 493 | ||||||||||||||||||
Accretion on discounted liabilities |
| 14 | | 106 | | 120 | ||||||||||||||||||
Interest and debt expense |
134 | 77 | 58 | 57 | (177 | ) | 149 | |||||||||||||||||
Foreign currency transaction (gains) losses |
33 | 3 | (208 | ) | 164 | | (8 | ) | ||||||||||||||||
|
||||||||||||||||||||||||
Total Costs and Expenses |
169 | 5,457 | (149 | ) | 6,527 | (1,640 | ) | 10,364 | ||||||||||||||||
|
||||||||||||||||||||||||
Income from continuing operations before income taxes |
1,574 | 1,434 | 221 | 3,355 | (4,031 | ) | 2,553 | |||||||||||||||||
Provision (benefit) for income taxes |
(52 | ) | (288 | ) | 9 | 1,235 | | 904 | ||||||||||||||||
|
||||||||||||||||||||||||
Income From Continuing Operations |
1,626 | 1,722 | 212 | 2,120 | (4,031 | ) | 1,649 | |||||||||||||||||
Income from discontinued operations |
1,078 | 1,078 | | 61 | (1,139 | ) | 1,078 | |||||||||||||||||
|
||||||||||||||||||||||||
Net income |
2,704 | 2,800 | 212 | 2,181 | (5,170 | ) | 2,727 | |||||||||||||||||
Less: net income attributable to noncontrolling interests |
| | | (23 | ) | | (23 | ) | ||||||||||||||||
|
||||||||||||||||||||||||
Net Income Attributable to ConocoPhillips |
$ | 2,704 | 2,800 | 212 | 2,158 | (5,170 | ) | 2,704 | ||||||||||||||||
|
||||||||||||||||||||||||
Comprehensive Income Attributable to ConocoPhillips |
$ | 791 | 887 | 29 | 255 | (1,171 | ) | 791 | ||||||||||||||||
|
Millions of Dollars | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2013 | ||||||||||||||||||||||||||||
Income Statement | ConocoPhillips | ConocoPhillips Company |
ConocoPhillips Australia Funding Company |
ConocoPhillips Canada Funding Company I |
All Other Subsidiaries |
Consolidating Adjustments |
Total Consolidated |
|||||||||||||||||||||
Revenues and Other Income |
||||||||||||||||||||||||||||
Sales and other operating revenues |
$ | | 4,625 | | | 9,018 | | 13,643 | ||||||||||||||||||||
Equity in earnings of affiliates* |
2,502 | 2,548 | | | 647 | (4,988 | ) | 709 | ||||||||||||||||||||
Gain on dispositions |
| 418 | | | 651 | | 1,069 | |||||||||||||||||||||
Other income |
| 29 | | | 20 | | 49 | |||||||||||||||||||||
Intercompany revenues* |
21 | 106 | | 75 | 1,338 | (1,540 | ) | | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Revenues and Other Income |
2,523 | 7,726 | | 75 | 11,674 | (6,528 | ) | 15,470 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Costs and Expenses |
||||||||||||||||||||||||||||
Purchased commodities |
| 3,993 | | | 3,047 | (1,332 | ) | 5,708 | ||||||||||||||||||||
Production and operating expenses |
| 385 | | | 1,580 | (3 | ) | 1,962 | ||||||||||||||||||||
Selling, general and administrative expenses |
3 | 193 | | 1 | 53 | (1 | ) | 249 | ||||||||||||||||||||
Exploration expenses |
| 158 | | | 155 | | 313 | |||||||||||||||||||||
Depreciation, depletion and amortization |
| 245 | | | 1,657 | | 1,902 | |||||||||||||||||||||
Impairments |
| | | | 1 | | 1 | |||||||||||||||||||||
Taxes other than income taxes |
| 55 | | | 609 | | 664 | |||||||||||||||||||||
Accretion on discounted liabilities |
| 14 | | | 92 | | 106 | |||||||||||||||||||||
Interest and debt expense* |
156 | 86 | | 58 | 55 | (204 | ) | 151 | ||||||||||||||||||||
Foreign currency transaction (gains) losses |
(15 | ) | (1 | ) | | 72 | (47 | ) | | 9 | ||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Costs and Expenses |
144 | 5,128 | | 131 | 7,202 | (1,540 | ) | 11,065 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes |
2,379 | 2,598 | | (56 | ) | 4,472 | (4,988 | ) | 4,405 | |||||||||||||||||||
Provision (benefit) for income taxes |
(44 | ) | 96 | | 7 | 1,907 | | 1,966 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Income (Loss) From Continuing Operations |
2,423 | 2,502 | | (63 | ) | 2,565 | (4,988 | ) | 2,439 | |||||||||||||||||||
Income from discontinued operations |
57 | 57 | | | 57 | (114 | ) | 57 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Net income (loss) |
2,480 | 2,559 | | (63 | ) | 2,622 | (5,102 | ) | 2,496 | |||||||||||||||||||
Less: net income attributable to noncontrolling interests |
| | | | (16 | ) | | (16 | ) | |||||||||||||||||||
|
||||||||||||||||||||||||||||
Net Income (Loss) Attributable to ConocoPhillips |
$ | 2,480 | 2,559 | | (63 | ) | 2,606 | (5,102 | ) | 2,480 | ||||||||||||||||||
|
||||||||||||||||||||||||||||
Comprehensive Income Attributable to ConocoPhillips |
$ | 3,352 | 3,431 | | 17 | 3,212 | (6,660 | ) | 3,352 | |||||||||||||||||||
|
*Interest and debt expense for ConocoPhillips was revised to reflect contractually agreed interest rates, with offsetting adjustments in the Equity in earnings of affiliates and Intercompany revenues lines for ConocoPhillips, ConocoPhillips Company and All Other Subsidiaries. There was no impact to Total Consolidated balances.
26
Millions of Dollars | ||||||||||||||||||||||||
Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||
Income Statement | ConocoPhillips | ConocoPhillips Company |
ConocoPhillips Canada Funding Company I |
All Other Subsidiaries |
Consolidating Adjustments |
Total Consolidated |
||||||||||||||||||
Revenues and Other Income |
||||||||||||||||||||||||
Sales and other operating revenues |
$ | | 15,920 | | 25,396 | | 41,316 | |||||||||||||||||
Equity in earnings of affiliates |
6,053 | 7,063 | | 2,235 | (13,343 | ) | 2,008 | |||||||||||||||||
Gain on dispositions |
| 3 | | 17 | | 20 | ||||||||||||||||||
Other income |
1 | 60 | | 261 | | 322 | ||||||||||||||||||
Intercompany revenues |
59 | 369 | 214 | 4,685 | (5,327 | ) | | |||||||||||||||||
|
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Total Revenues and Other Income |
6,113 | 23,415 | 214 | 32,594 | (18,670 | ) | 43,666 | |||||||||||||||||
|
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Costs and Expenses |
||||||||||||||||||||||||
Purchased commodities |
| 13,984 | | 8,060 | (4,719 | ) | 17,325 | |||||||||||||||||
Production and operating expenses |
| 1,255 | | 4,751 | (40 | ) | 5,966 | |||||||||||||||||
Selling, general and administrative expenses |
8 | 416 | 1 | 193 | (15 | ) | 603 | |||||||||||||||||
Exploration expenses |
| 713 | | 559 | | 1,272 | ||||||||||||||||||
Depreciation, depletion and amortization |
| 776 | | 5,282 | | 6,058 | ||||||||||||||||||
Impairments |
| 122 | | 4 | | 126 | ||||||||||||||||||
Taxes other than income taxes |
| 233 | | 1,523 | | 1,756 | ||||||||||||||||||
Accretion on discounted liabilities |
| 43 | | 314 | | 357 | ||||||||||||||||||
Interest and debt expense |
441 | 209 | 174 | 204 | (553 | ) | 475 | |||||||||||||||||
Foreign currency transaction (gains) losses |
36 | 5 | (196 | ) | 172 | | 17 | |||||||||||||||||
|
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Total Costs and Expenses |
485 | 17,756 | (21 | ) | 21,062 | (5,327 | ) | 33,955 | ||||||||||||||||
|
||||||||||||||||||||||||
Income from continuing operations before income taxes |
5,628 | 5,659 | 235 | 11,532 | (13,343 | ) | 9,711 | |||||||||||||||||
Provision (benefit) for income taxes |
(149 | ) | (394 | ) | 7 | 4,416 | | 3,880 | ||||||||||||||||
|
||||||||||||||||||||||||
Income From Continuing Operations |
5,777 | 6,053 | 228 | 7,116 | (13,343 | ) | 5,831 | |||||||||||||||||
Income from discontinued operations |
1,131 | 1,131 | | 114 | (1,245 | ) | 1,131 | |||||||||||||||||
|
||||||||||||||||||||||||
Net income |
6,908 | 7,184 | 228 | 7,230 | (14,588 | ) | 6,962 | |||||||||||||||||
Less: net income attributable to noncontrolling interests |
| | | (54 | ) | | (54 | ) | ||||||||||||||||
|
||||||||||||||||||||||||
Net Income Attributable to ConocoPhillips |
$ | 6,908 | 7,184 | 228 | 7,176 | (14,588 | ) | 6,908 | ||||||||||||||||
|
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Comprehensive Income Attributable to ConocoPhillips |
$ | 5,491 | 5,767 | 24 | 5,730 | (11,521 | ) | 5,491 | ||||||||||||||||
|
Millions of Dollars | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2013 | ||||||||||||||||||||||||||||
Income Statement | ConocoPhillips | ConocoPhillips Company |
ConocoPhillips Australia Funding Company |
ConocoPhillips Canada Funding Company I |
All Other Subsidiaries |
Consolidating Adjustments |
Total Consolidated |
|||||||||||||||||||||
Revenues and Other Income |
||||||||||||||||||||||||||||
Sales and other operating revenues |
$ | | 13,710 | | | 27,449 | | 41,159 | ||||||||||||||||||||
Equity in earnings of affiliates* |
6,771 | 7,234 | | | 1,803 | (14,243 | ) | 1,565 | ||||||||||||||||||||
Gain on dispositions |
| 419 | | | 803 | | 1,222 | |||||||||||||||||||||
Other income |
1 | 237 | | | 79 | | 317 | |||||||||||||||||||||
Intercompany revenues* |
62 | 341 | 13 | 229 | 3,723 | (4,368 | ) | | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Revenues and Other Income |
6,834 | 21,941 | 13 | 229 | 33,857 | (18,611 | ) | 44,263 | ||||||||||||||||||||
|
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Costs and Expenses |
||||||||||||||||||||||||||||
Purchased commodities |
| 11,901 | | | 8,868 | (3,706 | ) | 17,063 | ||||||||||||||||||||
Production and operating expenses |
| 1,106 | | | 4,238 | (23 | ) | 5,321 | ||||||||||||||||||||
Selling, general and administrative expenses |
9 | 443 | | 1 | 173 | (19 | ) | 607 | ||||||||||||||||||||
Exploration expenses |
| 491 | | | 420 | | 911 | |||||||||||||||||||||
Depreciation, depletion and amortization |
| 674 | | | 4,867 | | 5,541 | |||||||||||||||||||||
Impairments |
| | | | 31 | | 31 | |||||||||||||||||||||
Taxes other than income taxes |
| 180 | | | 2,018 | | 2,198 | |||||||||||||||||||||
Accretion on discounted liabilities |
| 42 | | | 275 | | 317 | |||||||||||||||||||||
Interest and debt expense* |
467 | 246 | 12 | 176 | 139 | (620 | ) | 420 | ||||||||||||||||||||
Foreign currency transaction (gains) losses |
26 | 8 | | (209 | ) | 141 | | (34 | ) | |||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Costs and Expenses |
502 | 15,091 | 12 | (32 | ) | 21,170 | (4,368 | ) | 32,375 | |||||||||||||||||||
|
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Income from continuing operations before income taxes |
6,332 | 6,850 | 1 | 261 | 12,687 | (14,243 | ) | 11,888 | ||||||||||||||||||||
Provision (benefit) for income taxes |
(154 | ) | 79 | | 28 | 5,406 | | 5,359 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Income From Continuing Operations |
6,486 | 6,771 | 1 | 233 | 7,281 | (14,243 | ) | 6,529 | ||||||||||||||||||||
Income from discontinued operations |
183 | 183 | | | 183 | (366 | ) | 183 | ||||||||||||||||||||
|
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Net income |
6,669 | 6,954 | 1 | 233 | 7,464 | (14,609 | ) | 6,712 | ||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
| | | | (43 | ) | | (43 | ) | |||||||||||||||||||
|
||||||||||||||||||||||||||||
Net Income Attributable to ConocoPhillips |
$ | 6,669 | 6,954 | 1 | 233 | 7,421 | (14,609 | ) | 6,669 | |||||||||||||||||||
|
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Comprehensive Income Attributable to ConocoPhillips |
$ | 5,294 | 5,579 | 1 | 88 | 5,747 | (11,415 | ) | 5,294 | |||||||||||||||||||
|
*Interest and debt expense for ConocoPhillips was revised to reflect contractually agreed interest rates, with offsetting adjustments in the Equity in earnings of affiliates and Intercompany revenues lines for ConocoPhillips, ConocoPhillips Company and All Other Subsidiaries. There was no impact to Total Consolidated balances.
27
Millions of Dollars | ||||||||||||||||||||||||
September 30, 2014 | ||||||||||||||||||||||||
Balance Sheet | ConocoPhillips | ConocoPhillips Company |
ConocoPhillips Canada Funding Company I |
All Other Subsidiaries |
Consolidating Adjustments |
Total Consolidated |
||||||||||||||||||
Assets |
||||||||||||||||||||||||
Cash and cash equivalents |
$ | | 1,182 | 239 | 3,987 | | 5,408 | |||||||||||||||||
Short-term investments |
| | | 374 | | 374 | ||||||||||||||||||
Accounts and notes receivable |
22 | 3,102 | 17 | 7,266 | (2,954 | ) | 7,453 | |||||||||||||||||
Inventories |
| 248 | | 1,082 | | 1,330 | ||||||||||||||||||
Prepaid expenses and other current assets |
11 | 626 | 12 | 1,086 | (47 | ) | 1,688 | |||||||||||||||||
|
||||||||||||||||||||||||
Total Current Assets |
33 | 5,158 | 268 | 13,795 | (3,001 | ) | 16,253 | |||||||||||||||||
Investments, loans and long-term receivables* |
60,564 | 75,338 | 4,105 | 36,674 | (150,864 | ) | 25,817 | |||||||||||||||||
Net properties, plants and equipment |
| 9,554 | | 66,236 | | 75,790 | ||||||||||||||||||
Other assets |
42 | 289 | 144 | 1,419 | (768 | ) | 1,126 | |||||||||||||||||
|
||||||||||||||||||||||||
Total Assets |
$ | 60,639 | 90,339 | 4,517 | 118,124 | (154,633 | ) | 118,986 | ||||||||||||||||
|
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Liabilities and Stockholders Equity |
||||||||||||||||||||||||
Accounts payable |
$ | 1 | 4,114 | 6 | 7,525 | (2,954 | ) | 8,692 | ||||||||||||||||
Short-term debt |
1,498 | 6 | 6 | 178 | | 1,688 | ||||||||||||||||||
Accrued income and other taxes |
| 83 | | 1,572 | | 1,655 | ||||||||||||||||||
Employee benefit obligations |
| 496 | | 217 | | 713 | ||||||||||||||||||
Other accruals |
115 | 330 | 99 | 896 | (47 | ) | 1,393 | |||||||||||||||||
|
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Total Current Liabilities |
1,614 | 5,029 | 111 | 10,388 | (3,001 | ) | 14,141 | |||||||||||||||||
Long-term debt |
7,539 | 5,204 | 2,976 | 3,780 | | 19,499 | ||||||||||||||||||
Asset retirement obligations and accrued environmental costs |
| 1,330 | | 8,473 | | 9,803 | ||||||||||||||||||
Deferred income taxes |
| 663 | | 15,429 | (8 | ) | 16,084 | |||||||||||||||||
Employee benefit obligations |
| 1,639 | | 580 | | 2,219 | ||||||||||||||||||
Other liabilities and deferred credits* |
2,770 | 10,942 | 1,454 | 19,443 | (33,030 | ) | 1,579 | |||||||||||||||||
|
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Total Liabilities |
11,923 | 24,807 | 4,541 | 58,093 | (36,039 | ) | 63,325 | |||||||||||||||||
Retained earnings |
38,930 | 23,893 | (1,272 | ) | 19,326 | (35,426 | ) | 45,451 | ||||||||||||||||
Other common stockholders equity |
9,786 | 41,639 | 1,248 | 40,318 | (83,168 | ) | 9,823 | |||||||||||||||||
Noncontrolling interests |
| | | 387 | | 387 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total Liabilities and Stockholders Equity |
$ | 60,639 | 90,339 | 4,517 | 118,124 | (154,633 | ) | 118,986 | ||||||||||||||||
|
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*Includes intercompany loans. |
Millions of Dollars | ||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||
Balance Sheet | ConocoPhillips | ConocoPhillips Company |
ConocoPhillips Australia Funding Company |
ConocoPhillips Canada Funding Company I |
All Other Subsidiaries |
Consolidating Adjustments |
Total Consolidated |
|||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||
Cash and cash equivalents |
$ | | 2,434 | | 229 | 3,583 | | 6,246 | ||||||||||||||||||||
Short-term investments |
| | | | 272 | | 272 | |||||||||||||||||||||
Accounts and notes receivable |
73 | 2,122 | 2 | | 9,267 | (2,977 | ) | 8,487 | ||||||||||||||||||||
Inventories |
| 174 | | | 1,020 | | 1,194 | |||||||||||||||||||||
Prepaid expenses and other current assets |
20 | 535 | | 35 | 2,311 | (77 | ) | 2,824 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Current Assets |
93 | 5,265 | 2 | 264 | 16,453 | (3,054 | ) | 19,023 | ||||||||||||||||||||
Investments, loans and long-term receivables* |
86,836 | 100,052 | | 4,259 | 34,795 | (200,678 | ) | 25,264 | ||||||||||||||||||||
Net properties, plants and equipment |
| 9,313 | | | 63,514 | | 72,827 | |||||||||||||||||||||
Other assets |
38 | 260 | | 103 | 1,394 | (852 | ) | 943 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Assets |
$ | 86,967 | 114,890 | 2 | 4,626 | 116,156 | (204,584 | ) | 118,057 | |||||||||||||||||||
|
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Liabilities and Stockholders Equity |
||||||||||||||||||||||||||||
Accounts payable |
$ | | 3,388 | | 4 | 8,899 | (2,977 | ) | 9,314 | |||||||||||||||||||
Short-term debt |
395 | 4 | | 5 | 185 | | 589 | |||||||||||||||||||||
Accrued income and other taxes |
| 223 | | | 2,517 | (27 | ) | 2,713 | ||||||||||||||||||||
Employee benefit obligations |
| 566 | | | 276 | | 842 | |||||||||||||||||||||
Other accruals |
210 | 639 | | 81 | 790 | (49 | ) | 1,671 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Current Liabilities |
605 | 4,820 | | 90 | 12,667 | (3,053 | ) | 15,129 | ||||||||||||||||||||
Long-term debt |
9,047 | 5,208 | | 2,980 | 3,838 | | 21,073 | |||||||||||||||||||||
Asset retirement obligations and accrued environmental costs |
| 1,289 | | | 8,594 | | 9,883 | |||||||||||||||||||||
Deferred income taxes |
94 | 557 | | | 14,569 | | 15,220 | |||||||||||||||||||||
Employee benefit obligations |
| 1,791 | | | 668 | | 2,459 | |||||||||||||||||||||
Other liabilities and deferred credits* |
31,693 | 9,422 | | 1,603 | 22,204 | (63,121 | ) | 1,801 | ||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Liabilities |
41,439 | 23,087 | | 4,673 | 62,540 | (66,174 | ) | 65,565 | ||||||||||||||||||||
Retained earnings |
34,636 | 31,835 | | (1,500 | ) | 12,848 | (36,659 | ) | 41,160 | |||||||||||||||||||
Other common stockholders equity |
10,892 | 59,968 | 2 | 1,453 | 40,366 | (101,751 | ) | 10,930 | ||||||||||||||||||||
Noncontrolling interests |
| | | | 402 | | 402 | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total Liabilities and Stockholders Equity |
$ | 86,967 | 114,890 | 2 | 4,626 | 116,156 | (204,584 | ) | 118,057 | |||||||||||||||||||
|
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*Includes intercompany loans. |
28
Millions of Dollars | ||||||||||||||||||||||||
Nine Months Ended September 30, 2014 | ||||||||||||||||||||||||
Statement of Cash Flows | ConocoPhillips | ConocoPhillips Company |
ConocoPhillips Canada Funding Company I |
All Other Subsidiaries |
Consolidating Adjustments |
Total Consolidated |
||||||||||||||||||
Cash Flows From Operating Activities |
||||||||||||||||||||||||
Net cash provided by (used in) continuing operating activities |
$ | 14,722 | (146 | ) | 10 | 14,423 | (15,014 | ) | 13,995 | |||||||||||||||
Net cash provided by discontinued operations |
| 202 | | 394 | (453 | ) | 143 | |||||||||||||||||
|
||||||||||||||||||||||||
Net Cash Provided by Operating Activities |
14,722 | 56 | 10 | 14,817 | (15,467 | ) | 14,138 | |||||||||||||||||
|
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Cash Flows From Investing Activities |
||||||||||||||||||||||||
Capital expenditures and investments |
| (3,235 | ) | | (11,132 | ) | 1,638 | (12,729 | ) | |||||||||||||||
Proceeds from asset dispositions |
16,912 | 1,386 | | 105 | (16,969 | ) | 1,434 | |||||||||||||||||
Net purchases of short-term investments |
| | | (109 | ) | | (109 | ) | ||||||||||||||||
Long-term advances/loansrelated parties |
| (635 | ) | | (7 | ) | 642 | | ||||||||||||||||
Collection of advances/loansrelated parties |
| 47 |