SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 28, 2003
MURPHY OIL CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 1-8590 | 71-0361522 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 200 Peach Street P.O. Box 7000, El Dorado, Arkansas |
71731-7000 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code 870-862-6411
Not applicable
(Former Name of Former Address, if Changed Since Last Report
| Item 9. | Regulation FD Disclosure and Item 12. Results of Operations and Financial Condition |
The following information is furnished pursuant to Item 9, “Regulation FD Disclosure” and Item 12, “Results of Operations and Financial Condition.”
On October 28, 2003, Murphy Oil Corporation issued a press release announcing its earnings for the third quarter and first nine months that ended on September 30, 2003. A copy of this press release is attached hereto as Exhibit 99. This press release includes certain non-GAAP financial measures, which are reconciled within the release to the most directly related comparable GAAP measure.
Exhibit Index
| 99 | Press release dated October 28, 2003, as issued by Murphy Oil Corporation. | |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MURPHY OIL CORPORATION | ||
| By: | /s/ John W. Eckart | |
| John W. Eckart Controller | ||
Date: October 29, 2003
Exhibit 99
MURPHY OIL ANNOUNCES QUARTERLY EARNINGS
EL DORADO, Arkansas, October 28, 2003 – Murphy Oil Corporation (NYSE: MUR) announced today that net income in the third quarter of 2003 was $73.1 million, $.79 per diluted share, compared to income of $37.4 million, $.41 per diluted share, in the third quarter of 2002. The current period includes special items that increased net income by $9.4 million, $.10 per share. Special items were an $11.4 million income tax benefit in Malaysia and $5.4 million of foreign currency gains, partially offset by additional after-tax costs of $5.1 million related to a fire at the Company’s Meraux, Louisiana refinery on June 10, 2003, and a $2.3 million after-tax charge for impairment of Gulf of Mexico assets. Special items in the third quarter of 2002 increased net income by $7.9 million, $.09 per share. Income excluding special items was $63.7 million, $.69 per share, in the just completed quarter compared to $29.5 million, $.32 per share, in the same 2002 quarter.
Reviewing quarterly results by type of business, the Company’s income contribution from exploration and production operations was $71.9 million in the third quarter of 2003 compared to $54.9 million in the same quarter of 2002. Excluding special items in both periods, current quarterly earnings were $62.5 million in 2003 and $47 million in 2002. The income improvement in the just completed quarter was due to higher oil sales volume and a higher average North American natural gas sales price, partially offset by lower natural gas production, lower realized oil sales prices and higher exploration expenses. The Company’s worldwide crude oil and condensate sales prices averaged $24.80 per barrel for the current quarter compared to $25.45 per barrel in the third quarter of 2002. Total crude oil and gas liquids production was a Company-record 84,871 barrels per day in the third quarter of 2003 compared to 70,569 barrels per day in the 2002 quarter, with the net increase primarily attributable to new production at West Patricia, at Block SK 309 in shallow-water Malaysia. North American natural gas sales prices averaged $4.60 per thousand cubic feet (MCF) in the most recent quarter compared to $2.80 per MCF in the same quarter of 2002. Natural gas sales volumes declined from 288 million cubic feet per day in the third quarter of 2002 to 203 million cubic feet per day in the just completed quarter, primarily due to lower production from the Ladyfern field in western Canada. The Company’s 2003 hedging program reduced the average third quarter worldwide crude oil sales price and North American natural gas sales price by $1.78 per barrel and $.12 per MCF, respectively.
The Company’s refining and marketing operations generated a profit of $4.9 million in the most recent quarter compared to a loss of $13.8 million in the 2002 quarter. Excluding special items, these worldwide operations earned $10.3 million in the third quarter 2003, with the improvement due to significantly better North American refining and marketing margins, and also improved margins for the U.K. operations.
The after-tax costs of corporate functions, excluding special items, were $9.1 million in the 2003 quarter compared to $4.7 million in the 2002 quarter. In the 2003 period, lower income tax benefits and higher retirement plan costs were partially offset by lower net interest expense.
For the first nine months of 2003, net income totaled $239.9 million, $2.59 per share, compared to $53.9 million, $.59 per share, for the 2002 period. Excluding special items, the Company earned $195.7 million, $2.11 per share, in the first nine months of 2003 compared to $46 million, $.50 per share, in the same period of 2002. Both exploration and production and refining and marketing businesses showed a marked improvement in results in the first nine months of 2003. The Company’s exploration and production operations earned $203 million, excluding special items, in the first nine months of 2003 compared to $96.1 million in the same period of 2002. Higher oil and natural gas sales prices, new production from
West Patricia, at Block SK 309, Malaysia, and lower exploration expenses in deepwater Malaysia were the primary reason for better 2003 upstream earnings. Crude oil and gas liquids production for the first nine months of 2003 averaged 81,065 barrels per day compared to 74,290 barrels per day in 2002. Natural gas sales were down from 311 million cubic feet per day in 2002 to 221 million cubic feet per day in 2003. Crude oil and condensate prices averaged $25.10 per barrel in the 2003 period compared to $22.83 per barrel in 2002. North American natural gas sold for $4.96 per MCF in 2003, up from $2.72 in 2002. The Company’s refining and marketing operations generated a profit of $19.5 million, excluding special items, in the first nine months of 2003 but incurred a loss of $35.5 million in 2002. The improved current-year result was based on stronger margins in both the North American and U.K. businesses. Corporate after-tax costs, excluding special items, increased from $16.8 million in 2002 to $26.8 million in 2003, primarily due to lower income tax benefits in the latter period.
Claiborne P. Deming, President and Chief Executive Officer, commented, “Our first two deepwater Gulf of Mexico fields begin production in the fourth quarter. The Medusa field in Mississippi Canyon Blocks 538/582 (60%) will commence production in November and the Habanero field (33.75%) in Garden Banks Block 341 begins production in December. Our current estimate of fourth quarter 2003 production is 125,000 barrel equivalents per day. Sales volumes should approximate this total. The Meraux refinery is back online after repairs resulting from the fire and a scheduled plant-wide turnaround. We currently expect earnings in the fourth quarter to be in the range of $.60 to $.80 per share, depending on the results of exploration drilling.”
The public is invited to access the Company’s conference call to discuss third quarter 2003 results on Wednesday, October 29, at 1:00 p.m. CST either via the Internet through the Investor Relations section of Murphy Oil’s website at http://www.murphyoilcorp.com/ir or via the telephone by dialing 1-800-240-2430. The telephone reservation number for the call is 555527. Replays of the call will be available through the same address on Murphy Oil’s website, and a recording of the call will be available through November 2 by calling 1-800-405-2236.
Summary financial data and operating statistics for the third quarter and first nine months of 2003 with comparisons to 2002 are contained in the attached tables.
The forward-looking statements reflected in this release are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. No assurance can be given that the results discussed herein will be attained, and certain important factors that may cause actual results to differ materially are contained in Murphy’s January 15, 1997 Form 8-K report on file with the U.S. Securities and Exchange Commission.
#####
MURPHY OIL CORPORATION
FUNCTIONAL RESULTS OF OPERATIONS (Unaudited)
(Millions of dollars)
| Three Months Ended September 30, 2003 |
Three Months Ended September 30, 2002* |
||||||||||||
| Revenues |
Income |
Revenues |
Income |
||||||||||
| Exploration and production |
|||||||||||||
| United States |
$ | 45.3 | (.2 | ) | 50.0 | 10.0 | |||||||
| Canada |
170.6 | 49.3 | 119.7 | 28.4 | |||||||||
| United Kingdom |
27.5 | 10.0 | 38.8 | 11.2 | |||||||||
| Ecuador |
9.5 | 3.7 | 11.5 | 5.4 | |||||||||
| Malaysia |
40.7 | 10.9 | — | 1.1 | |||||||||
| Other |
0.5 | (1.8 | ) | .4 | (1.2 | ) | |||||||
| 294.1 | 71.9 | 220.4 | 54.9 | ||||||||||
| Refining and marketing |
|||||||||||||
| North America |
910.7 | 3.8 | 756.5 | (13.1 | ) | ||||||||
| United Kingdom |
119.6 | 1.1 | 98.0 | (.7 | ) | ||||||||
| 1,030.3 | 4.9 | 854.5 | (13.8 | ) | |||||||||
| 1,324.4 | 76.8 | 1,074.9 | 41.1 | ||||||||||
| Intersegment transfers elimination |
(29.1 | ) | — | (27.1 | ) | — | |||||||
| 1,295.3 | 76.8 | 1,047.8 | 41.1 | ||||||||||
| Corporate |
1.2 | (3.7 | ) | 2.4 | (4.7 | ) | |||||||
| Revenues/income from continuing operations |
1,296.5 | 73.1 | 1,050.2 | 36.4 | |||||||||
| Discontinued operations, net of taxes |
— | — | — | 1.0 | |||||||||
| Total revenues/net income |
$ | 1,296.5 | 73.1 | 1,050.2 | 37.4 | ||||||||
| Nine Months Ended September 30, 2003 |
Nine Months Ended September 30, 2002* |
||||||||||||
| Revenues |
Income |
Revenues |
Income |
||||||||||
| Exploration and production |
|||||||||||||
| United States |
$ | 145.9 | 15.4 | 119.2 | 2.1 | ||||||||
| Canada |
510.9 | 147.7 | 422.0 | 100.2 | |||||||||
| United Kingdom |
177.1 | 76.5 | 123.3 | 33.6 | |||||||||
| Ecuador |
25.6 | 10.0 | 25.0 | 9.5 | |||||||||
| Malaysia |
40.7 | .1 | — | (39.0 | ) | ||||||||
| Other |
2.8 | (3.2 | ) | 1.5 | (2.4 | ) | |||||||
| 903.0 | 246.5 | 691.0 | 104.0 | ||||||||||
| Refining and marketing |
|||||||||||||
| North America |
2,686.4 | (4.1 | ) | 1,929.8 | (34.4 | ) | |||||||
| United Kingdom |
358.0 | 5.8 | 278.7 | (1.1 | ) | ||||||||
| 3,044.4 | 1.7 | 2,208.5 | (35.5 | ) | |||||||||
| 3,947.4 | 248.2 | 2,899.5 | 68.5 | ||||||||||
| Intersegment transfers elimination |
(54.4 | ) | — | (62.6 | ) | — | |||||||
| 3,893.0 | 248.2 | 2,836.9 | 68.5 | ||||||||||
| Corporate |
3.4 | (1.3 | ) | 4.4 | (16.8 | ) | |||||||
| Revenues/income from continuing operations |
3,896.4 | 246.9 | 2,841.3 | 51.7 | |||||||||
| Discontinued operations, net of taxes |
— | — | — | 2.2 | |||||||||
| Revenues/income before cumulative effect of accounting change |
3,896.4 | 246.9 | 2,841.3 | 53.9 | |||||||||
| Cumulative effect of accounting change, net of taxes |
— | (7.0 | ) | — | — | ||||||||
| Total revenues/net income |
$ | 3,896.4 | 239.9 | 2,841.3 | 53.9 | ||||||||
*Restated to conform to current presentation.
MURPHY OIL CORPORATION
RECONCILIATION OF NET INCOME TO
INCOME BEFORE SPECIAL ITEMS (Unaudited)
(Millions of dollars)
| Third Quarter 2003 |
Nine Months Ended September 30, 2003 |
||||||||||||||||||||||||
| Income as Reported |
Special Items |
Income Before Special Items |
Income as Reported |
Special Items |
Income Before Special Items |
||||||||||||||||||||
| Exploration and production |
|||||||||||||||||||||||||
| United States |
$ | (.2 | ) | (2.0 | ) | (a | ) | 1.8 | 15.4 | (2.0 | ) | (a | ) | 17.4 | |||||||||||
| Canada |
49.3 | 49.3 | 147.7 | 147.7 | |||||||||||||||||||||
| United Kingdom |
10.0 | 10.0 | 76.5 | 34.1 | (e | ) | 42.4 | ||||||||||||||||||
| Ecuador |
3.7 | 3.7 | 10.0 | 10.0 | |||||||||||||||||||||
| Malaysia |
10.9 | 11.4 | (b | ) | (.5 | ) | .1 | 11.4 | (b | ) | (11.3 | ) | |||||||||||||
| Other |
(1.8 | ) | (1.8 | ) | (3.2 | ) | (3.2 | ) | |||||||||||||||||
| 71.9 | 62.5 | 246.5 | 203.0 | ||||||||||||||||||||||
| Refining and marketing |
|||||||||||||||||||||||||
| North America |
3.8 | (5.4 | ) | (c | ) | 9.2 | (4.1 | ) | (17.8 | ) | (f | ) | 13.7 | ||||||||||||
| United Kingdom |
1.1 | 1.1 | 5.8 | 5.8 | |||||||||||||||||||||
| 4.9 | 10.3 | 1.7 | 19.5 | ||||||||||||||||||||||
| 76.8 | 72.8 | 248.2 | 222.5 | ||||||||||||||||||||||
| Corporate |
(3.7 | ) | 5.4 | (d | ) | (9.1 | ) | (1.3 | ) | 25.5 | (g | ) | (26.8 | ) | |||||||||||
| Income before cumulative effect of accounting change |
73.1 | 63.7 | 246.9 | 195.7 | |||||||||||||||||||||
| Cumulative effect of accounting change |
— | — | (7.0 | ) | (7.0 | ) | (h | ) | — | ||||||||||||||||
| Total |
$ | 73.1 | 9.4 | 63.7 | 239.9 | 44.2 | 195.7 | ||||||||||||||||||
| Diluted earnings per share |
$ | .79 | .10 | .69 | 2.59 | .48 | 2.11 | ||||||||||||||||||
| (a) | Represents a loss on asset impairment. |
| (b) | Represents recognition of income tax benefits that had previously not been recognized related to shallow-water Malaysia. |
| (c) | Represents a charge related to a fire at the Meraux refinery of $5.1 million and a loss on asset impairment of $.3 million. |
| (d) | Represents foreign currency gains. |
| (e) | Represents a gain on sale of Ninian and Columba fields in the U.K. North Sea. |
| (f) | Represents charges related to a fire at the Meraux refinery of $17.5 million and a loss on asset impairment of $.3 million. |
| (g) | Represents a $20.1 million benefit related to resolution of prior years’ U.S. income tax matters and a $5.4 million foreign currency transaction gain. |
| (h) | Represents a one-time, noncash charge to adopt SFAS No. 143, Accounting for Asset Retirement Obligations, effective January 1, 2003. This one-time charge is required to recognize the effects of this accounting rule as if the Company had used this method since inception. |
| Note: | The Company’s results of operations often include transactions which can affect underlying trends of operating results and comparability between years. Therefore, management uses a measure called “income before special items”, which excludes those transactions. Although income before special items is a non-GAAP measure and is not considered to be an alternative to net income as reported under generally accepted accounting principles, this is the method used by management and certain analysts to evaluate the Company’s operating results and, therefore, management believes that such information is useful to investors and analysts that want to compare the Company’s earnings performance between periods and with other companies in our industry. The Company has had gains on sale of assets, asset impairments, charges related to refinery fires, foreign currency gains and losses, and gains and losses on income tax matters in the past and they may occur in the future. |
MURPHY OIL CORPORATION
RECONCILIATION OF NET INCOME TO
INCOME BEFORE SPECIAL ITEMS (Unaudited)
(Millions of dollars)
| Third Quarter 2002 |
Nine Months Ended September 30, 2002 |
||||||||||||||||||
| Income as Reported |
Special Items |
Income Before Special Items |
Income as Reported |
Special Items |
Income Before Special Items |
||||||||||||||
| Exploration and production |
|||||||||||||||||||
| United States |
$ | 10.0 | 7.9 | (a) | 2.1 | 2.1 | 7.9 | (a) | (5.8 | ) | |||||||||
| Canada |
28.4 | 28.4 | 100.2 | 100.2 | |||||||||||||||
| United Kingdom |
11.2 | 11.2 | 33.6 | 33.6 | |||||||||||||||
| Ecuador |
5.4 | 5.4 | 9.5 | 9.5 | |||||||||||||||
| Malaysia |
1.1 | 1.1 | (39.0 | ) | (39.0 | ) | |||||||||||||
| Other |
(1.2 | ) | (1.2 | ) | (2.4 | ) | (2.4 | ) | |||||||||||
| 54.9 | 47.0 | 104.0 | 96.1 | ||||||||||||||||
| Refining and marketing |
|||||||||||||||||||
| North America |
(13.1 | ) | (13.1 | ) | (34.4 | ) | (34.4 | ) | |||||||||||
| United Kingdom |
(.7 | ) | (.7 | ) | (1.1 | ) | (1.1 | ) | |||||||||||
| (13.8 | ) | (13.8 | ) | (35.5 | ) | (35.5 | ) | ||||||||||||
| 41.1 | 33.2 | 68.5 | 60.6 | ||||||||||||||||
| Corporate |
(4.7 | ) | (4.7 | ) | (16.8 | ) | (16.8 | ) | |||||||||||
| Income from continuing operations |
36.4 | 28.5 | 51.7 | 43.8 | |||||||||||||||
| Discontinued operations |
1.0 | 1.0 | 2.2 | 2.2 | |||||||||||||||
| Total |
$ | 37.4 | 7.9 | 29.5 | 53.9 | 7.9 | 46.0 | ||||||||||||
| Diluted earnings per share |
$ | .41 | .09 | .32 | .59 | .09 | .50 | ||||||||||||
| (a) | Represents a gain on settlement of tax matters, $14.7 million; a gain on sale of assets, $2.3 million; a loss on property impairment, $5.9 million; and a loss on storm damages not covered by insurance, $3.2 million. |
| Note: | The Company's results of operations often include transactions which can affect underlying trends of operating results and comparability between years. Therefore, management uses a measure called "income before special items", which excludes those transactions. Although income before special items is a non-GAAP measure and is not considered to be an alternative to net income as reported under generally accepted accounting principles, this is the method used by management and certain analysts to evaluate the Company's operating results and, therefore, management believes that such information is useful to investors and analysts that want to compare the Company's earnings performance between periods and with other companies in our industry. The Company has had settlements of tax matters, gains on sale of assets, asset impairments, and loss on storm damages in the past and they may occur in the future. |
MURPHY OIL CORPORATION
OIL AND GAS OPERATING RESULTS (Unaudited)
| (Millions of dollars) | United States |
Canada |
United dom |
Ecuador |
Malaysia |
Other |
Synthetic Oil – Canada |
Total | ||||||||||||||
| Three Months Ended September 30, 2003 |
||||||||||||||||||||||
| Oil and gas sales and other operating revenues |
$ | 45.3 | 143.9 | 27.5 | 9.5 | 40.7 | .5 | 26.7 | 294.1 | |||||||||||||
| Production expenses |
10.7 | 21.3 | 3.6 | 3.7 | 5.1 | — | 16.5 | 60.9 | ||||||||||||||
| Depreciation, depletion and amortization |
8.8 | 40.1 | 5.2 | 1.9 | 9.8 | .1 | 2.4 | 68.3 | ||||||||||||||
| Accretion on discounted liabilities |
.8 | 1.3 | .6 | — | .1 | .1 | .1 | 3.0 | ||||||||||||||
| Property impairments |
3.0 | — | — | — | — | — | — | 3.0 | ||||||||||||||
| Exploration expenses |
||||||||||||||||||||||
| Dry holes |
12.8 | 3.9 | (.1 | ) | — | 13.3 | — | — | 29.9 | |||||||||||||
| Geological and geophysical |
1.2 | 4.1 | — | — | 5.2 | .4 | — | 10.9 | ||||||||||||||
| Other |
.6 | .2 | — | — | — | .1 | — | .9 | ||||||||||||||
| 14.6 | 8.2 | (.1 | ) | — | 18.5 | .5 | — | 41.7 | ||||||||||||||
| Undeveloped lease amortization |
3.1 | 3.9 | .1 | — | — | — | — | 7.1 | ||||||||||||||
| Total exploration expenses |
17.7 | 12.1 | — | — | 18.5 | .5 | — | 48.8 | ||||||||||||||
| Selling and general expenses |
4.6 | 7.3 | .7 | .2 | .6 | 1.6 | .1 | 15.1 | ||||||||||||||
| Income tax provisions (benefits) |
(.1 | ) | 20.7 | 7.4 | — | (4.3 | ) | — | (.6 | ) | 23.1 | |||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | (.2 | ) | 41.1 | 10.0 | 3.7 | 10.9 | (1.8 | ) | 8.2 | 71.9 | |||||||||||
| Three Months Ended September 30, 2002* |
||||||||||||||||||||||
| Oil and gas sales and other operating revenues |
$ | 50.0 | 86.8 | 38.8 | 11.5 | — | .4 | 32.9 | 220.4 | |||||||||||||
| Production expenses |
10.1 | 18.5 | 6.7 | 4.2 | — | — | 12.1 | 51.6 | ||||||||||||||
| Costs to repair storm damages |
5.0 | — | — | — | — | — | — | 5.0 | ||||||||||||||
| Depreciation, depletion and amortization |
8.7 | 31.9 | 8.3 | 1.7 | .2 | .1 | 2.3 | 53.2 | ||||||||||||||
| Property impairments |
9.1 | — | — | — | — | — | — | 9.1 | ||||||||||||||
| Exploration expenses |
||||||||||||||||||||||
| Dry holes |
3.3 | .9 | 3.2 | — | (1.8 | ) | — | — | 5.6 | |||||||||||||
| Geological and geophysical |
1.7 | 1.4 | — | — | .4 | .3 | — | 3.8 | ||||||||||||||
| Other |
1.2 | .6 | .2 | — | .1 | — | — | 2.1 | ||||||||||||||
| 6.2 | 2.9 | 3.4 | — | (1.3 | ) | .3 | — | 11.5 | ||||||||||||||
| Undeveloped lease amortization |
2.7 | 3.4 | — | — | — | — | — | 6.1 | ||||||||||||||
| Total exploration expenses |
8.9 | 6.3 | 3.4 | — | (1.3 | ) | .3 | — | 17.6 | |||||||||||||
| Selling and general expenses |
3.4 | 3.7 | .8 | .2 | — | 1.7 | .1 | 9.9 | ||||||||||||||
| Income tax provisions (benefits) |
(5.2 | ) | 10.4 | 8.4 | — | — | (.5 | ) | 6.0 | 19.1 | ||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 10.0 | 16.0 | 11.2 | 5.4 | 1.1 | (1.2 | ) | 12.4 | 54.9 | ||||||||||||
| Nine Months Ended September 30, 2003 |
||||||||||||||||||||||
| Oil and gas sales and other operating revenues |
$ | 145.9 | 437.3 | 177.1 | 25.6 | 40.7 | 2.8 | 73.6 | 903.0 | |||||||||||||
| Production expenses |
27.4 | 60.6 | 24.4 | 10.7 | 5.1 | — | 45.8 | 174.0 | ||||||||||||||
| Depreciation, depletion and amortization |
26.3 | 122.8 | 23.2 | 4.5 | 10.3 | .2 | 6.7 | 194.0 | ||||||||||||||
| Accretion on discounted liabilities |
2.4 | 3.8 | 2.3 | — | .2 | .3 | .3 | 9.3 | ||||||||||||||
| Property impairments |
3.0 | — | — | — | — | — | — | 3.0 | ||||||||||||||
| Exploration expenses |
||||||||||||||||||||||
| Dry holes |
32.2 | 9.0 | (.1 | ) | — | 13.3 | (.1 | ) | — | 54.3 | ||||||||||||
| Geological and geophysical |
7.0 | 6.0 | — | — | 12.7 | .4 | — | 26.1 | ||||||||||||||
| Other |
2.9 | 1.4 | .4 | — | .5 | .2 | — | 5.4 | ||||||||||||||
| 42.1 | 16.4 | .3 | — | 26.5 | .5 | – | 85.8 | |||||||||||||||
| Undeveloped lease amortization |
8.5 | 11.7 | .1 | — | — | — | — | 20.3 | ||||||||||||||
| Total exploration expenses |
50.6 | 28.1 | .4 | — | 26.5 | .5 | — | 106.1 | ||||||||||||||
| Selling and general expenses |
12.5 | 15.8 | 2.3 | .4 | 2.8 | 4.8 | .4 | 39.0 | ||||||||||||||
| Income tax provisions (benefits) |
8.3 | 75.3 | 48.0 | — | (4.3 | ) | .2 | 3.6 | 131.1 | |||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 15.4 | 130.9 | 76.5 | 10.0 | .1 | (3.2 | ) | 16.8 | 246.5 | ||||||||||||
| Nine Months Ended September 30, 2002* |
||||||||||||||||||||||
| Oil and gas sales and other operating revenues |
$ | 119.2 | 346.5 | 123.3 | 25.0 | — | 1.5 | 75.5 | 691.0 | |||||||||||||
| Production expenses |
35.2 | 64.0 | 26.5 | 10.6 | — | — | 36.1 | 172.4 | ||||||||||||||
| Costs to repair storm damages |
5.0 | — | — | — | — | — | — | 5.0 | ||||||||||||||
| Depreciation, depletion and amortization |
26.3 | 116.7 | 26.2 | 4.3 | .7 | .2 | 6.5 | 180.9 | ||||||||||||||
| Property impairments |
9.1 | — | — | — | — | — | — | 9.1 | ||||||||||||||
| Exploration expenses |
||||||||||||||||||||||
| Dry holes |
25.8 | 14.3 | 3.2 | — | 35.1 | — | — | 78.4 | ||||||||||||||
| Geological and geophysical |
5.0 | 10.5 | — | — | 1.0 | .2 | — | 16.7 | ||||||||||||||
| Other |
3.4 | 1.6 | .7 | — | 2.2 | — | — | 7.9 | ||||||||||||||
| 34.2 | 26.4 | 3.9 | — | 38.3 | .2 | — | 103.0 | |||||||||||||||
| Undeveloped lease amortization |
7.9 | 10.5 | — | — | — | — | — | 18.4 | ||||||||||||||
| Total exploration expenses |
42.1 | 36.9 | 3.9 | — | 38.3 | .2 | — | 121.4 | ||||||||||||||
| Selling and general expenses |
9.5 | 10.6 | 2.4 | .6 | — | 4.3 | .2 | 27.6 | ||||||||||||||
| Income tax provisions (benefits) |
(10.1 | ) | 40.1 | 30.7 | — | — | (.8 | ) | 10.7 | 70.6 | ||||||||||||
| Results of operations (excluding corporate overhead and interest) |
$ | 2.1 | 78.2 | 33.6 | 9.5 | (39.0 | ) | (2.4 | ) | 22.0 | 104.0 | |||||||||||
*Restated to conform to current presentation.
MURPHY OIL CORPORATION
SUMMARIZED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Thousands of dollars, except per share amounts)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
| 2003 |
2002* |
2003 |
2002* |
||||||||||
| Revenues |
$ | 1,296,504 | 1,050,210 | 3,896,393 | 2,841,261 | ||||||||
| Costs and expenses |
|||||||||||||
| Crude oil and product purchases |
884,693 | 748,328 | 2,629,125 | 1,915,163 | |||||||||
| Operating expenses |
137,908 | 135,189 | 454,506 | 399,338 | |||||||||
| Exploration expenses |
48,811 | 17,619 | 106,079 | 121,407 | |||||||||
| Selling and general expenses |
31,862 | 23,166 | 91,615 | 68,657 | |||||||||
| Depreciation, depletion and amortization |
83,994 | 66,581 | 237,725 | 219,744 | |||||||||
| Impairment of long-lived assets |
3,488 | 9,154 | 3,488 | 9,154 | |||||||||
| Accretion on discounted liabilities |
3,041 | — | 9,326 | — | |||||||||
| Interest expense |
14,455 | 13,961 | 42,688 | 36,790 | |||||||||
| Interest capitalized |
(10,027 | ) | (7,172 | ) | (29,675 | ) | (16,596 | ) | |||||
| 1,198,225 | 1,006,826 | 3,544,877 | 2,753,657 | ||||||||||
| Income from continuing operations before income taxes |
98,279 | 43,384 | 351,516 | 87,604 | |||||||||
| Income tax expense |
25,142 | 6,892 | 104,588 | 35,864 | |||||||||
| Income from continuing operations |
73,137 | 36,492 | 246,928 | 51,740 | |||||||||
| Discontinued operations, net of tax |
— | 916 | — | 2,131 | |||||||||
| Income before cumulative effect of change in accounting principle |
73,137 | 37,408 | 246,928 | 53,871 | |||||||||
| Cumulative effect of change in accounting principle |
— | — | (6,993 | ) | — | ||||||||
| Net income |
$ | 73,137 | 37,408 | 239,935 | 53,871 | ||||||||
| Per Common share—Basic |
|||||||||||||
| Continuing operations |
$ | .80 | .40 | 2.69 | .57 | ||||||||
| Discontinued operations |
— | .01 | — | .02 | |||||||||
| Cumulative effect of change in accounting principle |
— | — | (.08 | ) | — | ||||||||
| Net income |
$ | .80 | .41 | 2.61 | .59 | ||||||||
| Per Common share—Diluted |
|||||||||||||
| Continuing operations |
$ | .79 | .40 | 2.67 | .57 | ||||||||
| Discontinued operations |
— | .01 | — | .02 | |||||||||
| Cumulative effect of change in accounting principle |
— | — | (.08 | ) | – | ||||||||
| Net income |
$ | .79 | .41 | 2.59 | .59 | ||||||||
| Cash dividends per Common share |
$ | .20 | .20 | .60 | .575 | ||||||||
| Average Common shares outstanding (thousands) |
|||||||||||||
| Basic |
91,850 | 91,639 | 91,800 | 91,382 | |||||||||
| Diluted |
92,848 | 92,147 | 92,613 | 92,089 | |||||||||
*Restated to conform to current presentation.
MURPHY OIL CORPORATION
SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Thousands of dollars)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
| 2003 |
2002* |
2003 |
2002* |
||||||||||
| Operating Activities |
|||||||||||||
| Income from continuing operations |
$ | 73,137 | 36,492 | 246,928 | 51,740 | ||||||||
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities |
|||||||||||||
| Depreciation, depletion and amortization |
83,994 | 66,581 | 237,725 | 219,744 | |||||||||
| Provisions for major repairs |
4,857 | 5,488 | 20,687 | 14,820 | |||||||||
| Expenditures for major repairs and dismantlement costs |
(34,579 | ) | (2,016 | ) | (60,914 | ) | (11,821 | ) | |||||
| Dry holes |
29,835 | 5,529 | 54,266 | 78,373 | |||||||||
| Amortization of undeveloped leases |
7,082 | 6,102 | 20,261 | 18,369 | |||||||||
| Impairment of long-lived assets |
3,488 | 9,154 | 3,488 | 9,154 | |||||||||
| Accretion expense |
3,041 | — | 9,326 | — | |||||||||
| Deferred and noncurrent income tax benefits |
(7,982 | ) | (8,301 | ) | (3,652 | ) | 2,914 | ||||||
| Pretax (gains) losses from dispositions of assets |
(10,353 | ) | (3,500 | ) | (59,651 | ) | (9,200 | ) | |||||
| Net (increase) decrease in operating working capital other than cash and cash equivalents |
40,548 | (21,827 | ) | 69,408 | (118,191 | ) | |||||||
| Other |
11,088 | 884 | 5,416 | 6,233 | |||||||||
| Net cash provided by continuing operations |
204,156 | 94,586 | 543,288 | 262,135 | |||||||||
| Net cash provided by discontinued operations |
— | 2,131 | — | 5,554 | |||||||||
| Net cash provided by operating activities |
204,156 | 96,717 | 543,288 | 267,689 | |||||||||
| Investing Activities |
|||||||||||||
| Property additions and dry holes |
(251,967 | ) | (198,658 | ) | (705,202 | ) | (614,631 | ) | |||||
| Proceeds from sale of assets |
8,864 | 26,735 | 77,899 | 55,383 | |||||||||
| Other—net |
180 | (79 | ) | 260 | (77 | ) | |||||||
| Investing activities of discontinued operations |
— | (178 | ) | — | (444 | ) | |||||||
| Net cash required by investing activities |
(242,923 | ) | (172,180 | ) | (627,043 | ) | (559,769 | ) | |||||
| Financing Activities |
|||||||||||||
| Increase in notes payable |
78,201 | 84,855 | 227,689 | 382,967 | |||||||||
| Decrease in nonrecourse debt of a subsidiary |
(6,247 | ) | (7,936 | ) | (30,699 | ) | (21,565 | ) | |||||
| Proceeds received from exercise of stock options and employee stock purchase plan |
531 | 464 | 2,879 | 23,488 | |||||||||
| Cash dividends paid |
(18,372 | ) | (18,330 | ) | (55,090 | ) | (52,563 | ) | |||||
| Other |
— | (162 | ) | (72 | ) | (2,688 | ) | ||||||
| Net cash provided by financing activities |
54,113 | 58,891 | 144,707 | 329,639 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents |
1,497 | 1,962 | 11,202 | 6,165 | |||||||||
| Net increase in cash and cash equivalents |
16,843 | (14,610 | ) | 72,154 | 43,724 | ||||||||
| Cash and cash equivalents at beginning of period |
220,268 | 140,986 | 164,957 | 82,652 | |||||||||
| Cash equivalents at end of period |
$ | 237,111 | 126,376 | 237,111 | 126,376 | ||||||||
*Restated to conform to current presentation.
MURPHY OIL CORPORATION
OTHER FINANCIAL DATA
(Unaudited, except for December 31, 2002)
(Millions of dollars)
| Sept. 30, 2003 |
Dec. 31, 2002 | ||||
| Working capital |
$ | 133.6 | 136.3 | ||
| Total assets |
4,625.1 | 3,885.8 | |||
| Long-term debt |
|||||
| Notes payable |
1,014.7 | 788.6 | |||
| Nonrecourse debt |
43.4 | 74.2 | |||
| Stockholders’ equity |
1,901.6 | 1,593.6 | |||
| Three Months Ended |
Nine Months Ended | ||||||||
| Sept. 30, 2003 |
Sept. 30, 2002 |
Sept. 30, 2003 |
Sept. 30, 2002 | ||||||
| Capital expenditures |
|||||||||
| Continuing operations |
|||||||||
| Exploration and production |
|||||||||
| United States |
$ | 71.4 | 40.3 | 228.2 | 162.9 | ||||
| Canada |
55.6 | 45.5 | 168.2 | 173.6 | |||||
| Other |
92.4 | 52.8 | 185.9 | 127.2 | |||||
| 219.4 | 138.6 | 582.3 | 463.7 | ||||||
| Refining and marketing |
|||||||||
| North America |
43.2 | 65.6 | 148.3 | 173.9 | |||||
| United Kingdom |
1.0 | .3 | 5.3 | 1.1 | |||||
| 44.2 | 65.9 | 153.6 | 175.0 | ||||||
| Corporate |
.2 | .1 | .8 | .6 | |||||
| 263.8 | 204.6 | 736.7 | 639.3 | ||||||
| Discontinued operations |
— | .2 | — | .4 | |||||
| Total capital expenditures |
263.8 | 204.8 | 736.7 | 639.7 | |||||
| Charged to exploration expenses* |
|||||||||
| United States |
14.6 | 6.2 | 42.1 | 34.2 | |||||
| Canada |
8.2 | 2.9 | 16.4 | 26.4 | |||||
| Other international |
18.9 | 2.4 | 27.3 | 42.4 | |||||
| Total charged to exploration expenses |
41.7 | 11.5 | 85.8 | 103.0 | |||||
| Total capitalized |
$ | 222.1 | 193.3 | 650.9 | 536.7 | ||||
| *Excludes amortization of undeveloped leases of |
$ | 7.1 | 6.1 | 20.3 | 18.4 | ||||
MURPHY OIL CORPORATION
STATISTICAL SUMMARY
| Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||
| 2003 |
2002 |
2003 |
2002 | |||||
| Net crude oil, condensate and gas liquids produced—barrels per day |
84,871 | 70,569 | 81,065 | 74,290 | ||||
| Continuing operations |
84,871 | 69,364 | 81,065 | 73,074 | ||||
| Crude oil and condensate |
||||||||
| United States |
3,828 | 3,571 | 3,617 | 4,120 | ||||
| Canada—light |
1,023 | 1,992 | 1,560 | 2,205 | ||||
| —heavy |
10,170 | 9,298 | 9,643 | 9,495 | ||||
| —offshore |
26,700 | 20,725 | 28,408 | 22,271 | ||||
| —synthetic |
12,009 | 12,922 | 10,604 | 11,036 | ||||
| United Kingdom |
11,494 | 14,710 | 15,460 | 17,745 | ||||
| Ecuador |
5,365 | 4,771 | 3,950 | 4,575 | ||||
| Malaysia |
12,712 | — | 6,168 | — | ||||
| Natural gas liquids |
||||||||
| United States |
183 | 235 | 157 | 314 | ||||
| Canada |
1,245 | 1,040 | 1,334 | 1,194 | ||||
| United Kingdom |
142 | 100 | 164 | 119 | ||||
| Discontinued operations |
— | 1,205 | — | 1,216 | ||||
| Net crude oil, condensate and gas liquids sold—barrels per day |
87,734 | 57,717 | 80,128 | 73,663 | ||||
| Continuing operations |
87,734 | 56,512 | 80,128 | 72,447 | ||||
| Crude oil and condensate |
||||||||
| United States |
3,828 | 3,571 | 3,617 | 4,120 | ||||
| Canada—light |
1,023 | 1,992 | 1,560 | 2,205 | ||||
| —heavy |
10,170 | 9,298 | 9,643 | 9,495 | ||||
| —offshore |
29,119 | 6,875 | 28,948 | 20,887 | ||||
| —synthetic |
12,009 | 12,922 | 10,604 | 11,036 | ||||
| United Kingdom |
9,257 | 14,751 | 14,738 | 18,336 | ||||
| Ecuador |
4,823 | 5,728 | 4,001 | 4,744 | ||||
| Malaysia |
15,962 | — | 5,379 | — | ||||
| Natural gas liquids |
||||||||
| United States |
183 | 235 | 157 | 314 | ||||
| Canada |
1,245 | 1,040 | 1,334 | 1,194 | ||||
| United Kingdom |
115 | 100 | 147 | 116 | ||||
| Discontinued operations |
— | 1,205 | — | 1,216 | ||||
| Net natural gas sold—thousands of cubic feet per day |
203,162 | 288,439 | 220,703 | 311,151 | ||||
| Continuing operations |
203,162 | 283,607 | 220,703 | 306,881 | ||||
| United States |
85,071 | 86,072 | 82,220 | 92,862 | ||||
| Canada |
111,861 | 192,591 | 130,000 | 207,718 | ||||
| United Kingdom |
6,230 | 4,944 | 8,483 | 6,301 | ||||
| Discontinued operations |
— | 4,832 | — | 4,270 | ||||
| Total net hydrocarbons produced—equivalent barrels per day* |
118,731 | 118,642 | 117,849 | 126,149 | ||||
| Total net hydrocarbons sold—equivalent barrels per day* |
121,594 | 105,790 | 116,912 | 125,522 | ||||
*Natural gas converted on an energy equivalent basis of 6:1.
MURPHY OIL CORPORATION
STATISTICAL SUMMARY (Continued)
| Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||
| 2003 |
2002 |
2003 |
2002 | ||||||||
| Weighted average sales prices |
|||||||||||
| Crude oil and condensate – dollars per barrel (1) |
|||||||||||
| United States |
$ | 23.88 | (3) | 26.20 | 24.43 | (3) | 23.35 | ||||
| Canada (2) – light |
24.92 | 25.24 | 27.09 | 21.88 | |||||||
| – heavy |
13.08 | (3) | 19.92 | 12.66 | (3) | 16.91 | |||||
| – offshore |
27.08 | (3) | 27.00 | 26.70 | (3) | 24.45 | |||||
| – synthetic |
23.95 | (3) | 27.73 | 25.33 | (3) | 25.09 | |||||
| United Kingdom |
28.80 | 27.52 | 29.43 | 23.57 | |||||||
| Ecuador |
21.40 | 21.65 | 23.42 | 19.35 | |||||||
| Malaysia |
27.66 | — | 27.66 | — | |||||||
| Natural gas liquids – dollars per barrel (1) |
|||||||||||
| United States |
$ | 22.14 | 17.96 | 23.17 | 16.49 | ||||||
| Canada (2) |
22.59 | 17.14 | 24.23 | 15.15 | |||||||
| United Kingdom |
20.19 | 18.97 | 22.32 | 16.37 | |||||||
| Natural gas – dollars per thousand cubic feet |
|||||||||||
| United States (1) |
$ | 4.94 | (3) | 3.34 | 5.48 | (3) | 3.13 | ||||
| Canada (2) |
4.34 | (3) | 2.56 | 4.63 | (3) | 2.53 | |||||
| United Kingdom (2) |
2.28 | 1.81 | 3.11 | 2.62 | |||||||
| Refinery inputs – barrels per day |
72,484 | 144,895 | 123,400 | 153,552 | |||||||
| North America |
39,356 | 111,913 | 88,738 | 117,712 | |||||||
| United Kingdom |
33,128 | 32,982 | 34,662 | 35,840 | |||||||
| Petroleum products sold – barrels per day |
255,662 | 212,757 | 252,754 | 206,339 | |||||||
| North America |
220,543 | 180,570 | 218,105 | 172,568 | |||||||
| Gasoline |
167,752 | 117,840 | 155,084 | 109,208 | |||||||
| Kerosine |
293 | 3,900 | 4,572 | 5,628 | |||||||
| Diesel and home heating oils |
34,070 | 32,279 | 38,825 | 35,679 | |||||||
| Residuals |
4,629 | 11,849 | 10,575 | 13,067 | |||||||
| Asphalt, LPG and other |
13,799 | 14,702 | 9,049 | 8,986 | |||||||
| United Kingdom |
35,119 | 32,187 | 34,649 | 33,771 | |||||||
| Gasoline |
14,112 | 10,076 | 11,879 | 11,919 | |||||||
| Kerosine |
1,725 | 2,656 | 2,383 | 2,583 | |||||||
| Diesel and home heating oils |
13,596 | 13,866 | 13,754 | 14,333 | |||||||
| Residuals |
3,748 | 2,594 | 3,785 | 2,939 | |||||||
| LPG and other |
1,938 | 2,995 | 2,848 | 1,997 | |||||||
(1) Includes intracompany transfers at market prices.
(2) U.S. dollar equivalent.
(3) Includes the effect of the Company's 2003 hedging program.