Canadian Natural Resources Limited Announces 2002 Third Quarter Results, Part 2 of 2; Canadian Natural Announces Record Quarterly Cash Flow.Part 2 CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--Nov. 6, 2002 Taxes other than income tax consist of current and deferred petroleum revenue tax, other international taxes and provincial Provincial has several meanings and may refer to:
North Sea current income tax expense for the nine months ended September September: see month. 30, 2002 decreased from the comparable period in 2001 due to decreased earnings before taxes. Current income tax in the North Sea also decreased due to the UK Government increasing the first year capital allowance rate for plant and machinery expenditures to 100% from the previous rate of 25% during the second quarter of 2002. Current income tax expense in the third quarter 2002 increased from the prior quarter due to higher taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . Offshore West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. current income tax increased from the comparable periods due to increased production and higher worldwide oil prices. Large Corporations Tax increased from the comparable periods due to the higher taxable capital base as a result of increased debt levels and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. . Future income tax expense decreased from the prior quarter as a result of the inclusion in the second quarter 2002 of the effects of increased tax rates on profits from North Sea oil and natural gas production. A 10% supplementary charge, in addition to the current corporate tax rate of 30%, took effect April 17, 2002 and excludes any deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. for financing costs. The implementation of the supplementary charge resulted in a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. increase in the UK future income tax liability of $34 million in the second quarter of 2002. The increase in future income tax expense in the second quarter of 2002 was partially offset by a $21 million reduction in the future income tax liability as a result of a decrease in a Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. province's corporate income tax rate. The Company's future income taxes payable and property, plant and equipment have been increased by $39 million to provide for the exchange of non-tax base assets in the North Sea for the first nine months of 2002.
THREE MONTHS ENDED NINE MONTHS ENDED
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SEP 30 JUN 30 SEP 30 SEP 30 SEP 30
2002 2002 2001(1) 2002 2001(1)
-------------------------------------------------
CAPITAL EXPENDITURES ($ millions)
Acquisition of
Rio Alto $2,308.7 $ - $ - $2,308.7 $ -
-------------------------------------------------
Expenditures on property,
plant and equipment
Net property
acquisitions $ 333.3 $ 33.1 $ 24.6 $ 401.7 $ 270.8
Land acquisition and
retention 48.4 19.2 35.8 95.4 85.0
Seismic evaluations 4.9 14.6 8.6 44.3 65.8
Well drilling,
completion
and equipping 144.1 135.9 148.6 486.8 528.8
Pipeline and
production
facilities 56.5 66.6 109.7 247.4 326.1
-------------------------------------------------
Total net reserve
replacement
expenditures 587.2 269.4 327.3 1,275.6 1,276.5
Project Horizon 9.9 16.6 1.9 48.8 15.8
Midstream - 5.2 16.1 14.8 51.8
Abandonments 19.8 11.9 5.0 38.5 6.0
Head office 3.9 1.7 1.8 6.7 4.7
-------------------------------------------------
Total net capital
expenditures $ 620.8 $ 304.8 $ 352.1 $1,384.4 $1,354.8
-------------------------------------------------
By segment (excluding
Acquisition
of Rio Alto)
North America $ 331.8 $ 232.5 $ 280.9 $ 984.4 $1,078.7
North Sea 230.2 13.2 32.2 212.0 63.5
Offshore West Africa 58.8 53.9 22.9 173.2 160.8
Midstream - 5.2 16.1 14.8 51.8
-------------------------------------------------
Total $ 620.8 $ 304.8 $ 352.1 $1,384.4 $1,354.8
----------------------------------------------------------------------
-- (1) Certain figures provided for prior periods have been
reclassified to conform to the presentation adopted in 2002.
North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. capital expenditures during the third quarter 2002 include the acquisition of Rio Alto Rio Alto (Portuguese for High River) is a small river in the Portuguese municipality of Póvoa de Varzim, whose source is located at the foot of São Félix Hill (in Laundos Parish). The river empties at Estela parish in Rio Alto Beach. and additional producing and non-producing heavy oil properties, primarily in the Lindbergh area of eastern Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. . The Rio Alto acquisition provides the Company with a new core area for natural gas exploration and exploitation Exploitation See also Opportunism. Barnum, P. T. (1810–1891) circus impressario famous for his saying, “Never give a sucker an even break.” [Am. Hist. activities in western Canada
Western Canada, commonly referred to as the West . Capital expenditures for the nine months ended September 30, 2002, include the drilling of 150 net natural gas wells and 248 net oil wells. North Sea capital expenditures for the three months ended September 30, 2002, include the consolidation of interests in the Ninian Ninian refers to a variety of different people and locations: People
British geologist whose Principles of Geology (1830-1833) opposed the catastrophic theory of geologic change. A leading proponent of uniformitarianism, he is considered one of the founders of modern geology. and Columba Co·lum·ba n. A constellation in the Southern Hemisphere near Caelum and Puppis. Also called Dove. [Latin columba, dove.] Noun 1. fields. The Company also acquired an interest in the Strathspey strath·spey n. 1. A Scottish dance, slower than a reel, for two dancers. 2. The music for this dance. [After Strath Spey, valley of the river Spey in Scotland. field, 12 licences covering 20 exploration blocks and part blocks, and additional equity interests in the Brent Brent, outer borough (1991 pop. 226,100) of Greater London, SE England. The area is a rail and industrial center. Its manufactures include automobile parts, clocks and watches, and electrical equipment. and Ninian pipelines and the Sullom Voe Sullom Voe is an inlet between North Mainland and Northmavine on Shetland in Scotland, and an oil terminal sited on its shore. The Voe, the longest in Shetland, and partially sheltered by the island of Yell was used as a military base during World War II both by the Terminal. The acquisition consideration includes a cash payment of US $120.0 million and the Company's 5% interest in the Harding field. Capital expenditures for the nine months ended September 30, 2002, also include the consolidation of the Company's ownership interests in the Ninian, Banff Banff, former county, Scotland Banff, former county, Scotland: see Banffshire. Banff (bămf, bănf), town (1991 pop. 5,688), SW Alta., Canada, in the Rocky Mts., on the Bow River and the Trans-Canada Highway. and Kyle fields History The beginning In the fall of 1904, Edwin Jackson Kyle, an 1899 graduate of Texas A&M and professor of horticulture, was named president of the General Athletics Association. Kyle wanted to secure and develop an athletic field to promote the school's athletics. in exchange for its interests in the Pierce Pierce may refer to: Places
''This article or section is being rewritten at One derivation of the surname is from the Scottish Highland word caol, 'channel', or 'strait'. There are other possible derivations (see below). and Columba E fields, as well as the ongoing infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. drilling program in the Ninian field. Offshore West Africa capital expenditures include the continued development of the Espoir field. During the third quarter 2002, a third producer well was completed in mid-July n. 1. the middle part of July. Noun 1. mid-July - the middle part of July period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" . The Company plans to drill two additional wells as part of the first development phase in the fourth quarter of 2002. In the third quarter 2002, the Company also entered into a production sharing agreement Production sharing agreements (PSAs) are used primarily to determine the share a private company will receive of the natural resources (usually oil) extracted from a particular country. ("PSA (Professional Services Automation) An information system designed to organize, track and manage all opportunities, work, resources, costs, revenues and invoices to improve the productivity and efficiency of the workforce. ") for Block 16, offshore Angola Angola (ăng-gō`lə), officially Republic of Angola (2005 est. pop. 11,191,000), including the exclave of Cabinda, 481,351 sq mi (1,246,700 sq km), SW Africa. . The Company will operate the block and retain a 50% working interest. The PSA was effective September 1, 2002 for an initial four-year exploration phase.
SEP 30 JUN 30 DEC 31 SEP 30
2002 2002 2001(1) 2001(1)
-----------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
($ millions, except ratios)
Working capital deficit $ 364.4 $ 128.9 $ 5.6 $ 154.1
Long-term debt 4,169.6 2,404.4 2,669.2 2,311.8
-----------------------------------------------
Total $ 4,534.0 $ 2,533.3 $ 2,674.8 $ 2,465.9
-----------------------------------------------
Shareholders' equity
Preferred securities $ 126.9 $ 121.5 $ 127.4 $ 126.3
Share capital 2,289.0 1,756.2 1,698.3 1,693.9
Retained earnings 2,222.7 2,122.0 1,908.5 1,867.6
Foreign currency
translation adjustment 22.7 30.3 72.8 -
-----------------------------------------------
Total $ 4,661.3 $ 4,030.0 $ 3,807.0 $ 3,687.8
-----------------------------------------------
Debt to cash flow(2) 2.3x 1.5x 1.4x 1.1x
Debt to book
capitalization 47.2% 37.4% 41.2% 38.5%
Debt to market
capitalization 37.9% 27.1% 34.9% 32.4%
After tax return on
average common
shareholders' equity(2) 10.6% 10.3% 18.7% 24.9%
After tax return on
average capital
employed(2) 7.3% 7.2% 12.2% 15.5%
----------------------------------------------------------------------
-- (1) Restated for change in accounting policy (see consolidated
financial statements note 2). (2) Based on trailing 12-month
period and do not include amounts related to acquired assets
for the period prior to June 30, 2002.
The ratios above have been calculated with the outstanding preferred securities of the Company classified as equity. If the preferred securities were classified as long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , debt to cash flow for the trailing 12-month period ended September 30, 2002, would be 2.4x (June June: see month. 30, 2002 - 1.6x, December December: see month. 31, 2001 - 1.5x, September 30, 2001 - 1.1x). Debt to book capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. would be 48.7% at September 30, 2002 (June 30, 2002 - 39.3%, December 31, 2001 - 43.2%, September 30, 2001 - 40.6%) had the preferred securities been classified as long-term debt, while debt to market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. would be 39.0%, 28.5%, 36.6% and 34.2%, respectively. SENSITIVITY ANALYSIS (1) Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. sensitivities to certain factors, which would influence the Company's financial results, are estimated as follows:
Cash flow Cash flow
from from Net Net
operations(2) operations(2) earnings(2) earnings(2)
(per share) (per share)
($ millions) (basic) ($ millions) (basic)
------------------------------------------------------
Price changes
Oil - WTI
US $1.00/bbl(3)
Excluding
financial
derivatives $108 $0.81 $80 $0.60
Including
financial
derivatives $49-$52 $0.36-$0.39 $36-$39 $0.27-$0.29
Natural gas - AECO
Cdn $0.10/mcf(3)
Excluding
financial
derivatives $40 $0.30 $24 $0.18
Including
financial
derivatives $35 $0.26 $22 $0.16
Volume changes
Oil - 10,000 bbls/d $60 $0.45 $14 $0.10
Natural gas - 10 mmcf/d $7 $0.05 $1 $0.01
Foreign currency
rate change
$0.01 change in Cdn $
in relation to US $(3)
Excluding
financial
derivatives $58 $0.43 $36 $0.27
Including
financial
derivatives $50-$55 $0.38-$0.41 $31-$34 $0.23-$0.25
Interest rate
change - 1% $22 $0.17 $14 $0.10
----------------------------------------------------------------------
-- (1) The sensitivities are calculated based on 2002 third
quarter results.
-- (2) Attributable to common shareholders.
-- (3) For details of financial instruments in place, see
consolidated financial statement note 8.
OTHER OPERATING HIGHLIGHTS
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------------------------
SEP 30 JUNE 30 SEP 30 SEP 30 SEP 30
2002 2002 2001(1) 2002 2001(1)
----------------------------------------------
NETBACK ANALYSIS ($/boe, except daily production)
Daily production (boe/d) 479,949 369,022 361,029 404,745 356,905
Sales price $ 26.26 $ 25.29 $ 24.25 $ 24.57 $ 29.76
Royalties 3.80 3.79 3.14 3.49 5.10
Production expense 6.01 5.76 5.47 5.85 5.75
----------------------------------------------
Netback 16.45 15.74 15.64 15.23 18.91
Midstream contribution (0.23) (0.30) (0.11) (0.25) (0.15)
Administration 0.40 0.37 0.28 0.39 0.26
Interest 1.11 0.85 0.97 0.96 1.09
Realized foreign exchange
(gain) loss (0.04) 0.03 0.02 0.01 0.02
Taxes other than
income tax (current) 0.29 0.35 0.64 0.35 0.61
Current income
tax (North Sea) 0.07 0.07 0.49 0.15 0.53
Current income tax
(Offshore West Africa) 0.08 0.03 - 0.05 -
Current income tax
(Large Corporations Tax) 0.13 0.14 0.10 0.13 0.11
----------------------------------------------
Cash flow $ 14.64 $ 14.20 $ 13.25 $ 13.44 $ 16.44
----------------------------------------------------------------------
-- (1) Restated for change in accounting policy (see consolidated
financial statement notes 1 and 2).
NINE MONTHS ENDED SEPTEMBER 30, 2002
-------------------------------------------
North North Offshore
America Sea West Africa Total
-------------------------------------------
SEGMENTED NETBACK
Oil and liquids ($/bbl, except daily production)
Daily production (bbls/d) 165,608 34,629 6,585 206,822
Sales price $ 26.85 $ 38.77 $ 38.95 $ 29.23
Royalties 3.28 2.06 1.36 3.01
Production expense 6.50 15.25 13.60 8.19
-------------------------------------------
Netback(1) $ 17.07 $ 21.46 $ 23.99 $ 18.03
-------------------------------------------
Natural gas ($/mcf, except daily production)
Daily production (mmcf/d) 1,162 25 1 1,188
Sales price $ 3.29 $ 2.56 $ 4.97 $ 3.28
Royalties 0.68 - 0.15 0.67
Production expense 0.54 1.65 1.77 0.57
-------------------------------------------
Netback(1) $ 2.07 $ 0.91 $ 3.05 $ 2.04
-------------------------------------------
Barrels of oil equivalent ($/boe, except daily production)
Daily production (boe/d) 359,161 38,846 6,738 404,745
Sales price $ 23.05 $ 36.27 $ 38.74 $ 24.57
Royalties 3.71 1.83 1.34 3.49
Production expense 4.76 14.67 13.54 5.85
-------------------------------------------
Netback(1) $ 14.58 $ 19.77 $ 23.86 $ 15.23
----------------------------------------------------------------------
-- (1) Netbacks do not include midstream operations.
SEPTEMBER 30 DECEMBER 31
2002 2001
-----------------------------
CONSOLIDATED BALANCE SHEETS (millions of Canadian dollars) (unaudited)
ASSETS
Current assets
Cash $ 15.2 $ 15.0
Accounts receivable and other 659.6 509.0
-----------------------------
674.8 524.0
Property, plant and equipment (net) 12,481.5 8,442.9
Deferred charges (note 4) 58.3 -
-----------------------------
$ 13,214.6 $ 8,966.9
----------------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable $ 354.1 $ 249.5
Accrued liabilities 659.2 264.2
Current portion of long-term debt (note 5) 25.9 15.9
-----------------------------
1,039.2 529.6
Long-term debt (note 5) 4,169.6 2,669.2
Future site restoration 365.5 193.8
Future income tax 2,979.0 1,767.3
-----------------------------
8,553.3 5,159.9
-----------------------------
SHAREHOLDERS' EQUITY
Preferred securities (note 2) 126.9 127.4
Share capital (note 6) 2,289.0 1,698.3
Retained earnings 2,222.7 1,908.5
Foreign currency translation adjustment 22.7 72.8
-----------------------------
4,661.3 3,807.0
-----------------------------
$ 13,214.6 $ 8,966.9
----------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------------------------
2002 2001 2002 2001
-------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
(millions of Canadian dollars, except per share amounts) (unaudited)
Revenue (note 10) $ 1,172.6 $ 810.5 $ 2,752.9 $ 2,922.4
Less: royalties (167.7) (104.2) (386.0) (497.1)
-------------------------------------------
1,004.9 706.3 2,366.9 2,425.3
-------------------------------------------
Expenses
Production 268.4 183.1 656.2 568.5
Depletion, depreciation
and amortization 403.0 236.2 928.1 661.4
Administration 17.8 9.4 43.6 25.6
Interest 48.9 32.2 106.2 106.4
Foreign exchange loss
(gain) (note 2) 40.2 57.3 (33.2) 62.4
-------------------------------------------
778.3 518.2 1,700.9 1,424.3
-------------------------------------------
Earnings Before Taxes 226.6 188.1 666.0 1,001.0
Taxes other than income tax 13.6 19.8 41.9 58.0
Current income tax 12.3 19.7 36.0 61.9
Future income tax 76.4 61.0 222.6 280.7
-------------------------------------------
Net Earnings 124.3 87.6 365.5 600.4
Dividend on preferred
securities (net of tax) (1.5) (1.4) (4.5) (4.3)
Revaluation of preferred
securities (note 2) (5.4) (4.9) 0.5 (6.4)
-------------------------------------------
Net Earnings Attributable
to Common Shareholders $ 117.4 $ 81.3 $ 361.5 $ 589.7
-------------------------------------------
Net Earnings per Common
Share Attributable to
Common Shareholders
(note 7)
Basic $ 0.88 $ 0.67 $ 2.87 $ 4.86
Diluted $ 0.86 $ 0.66 $ 2.78 $ 4.72
----------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30
--------------------------------
2002 2001
--------------------------------
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(millions of Canadian dollars) (unaudited)
Balance - Beginning of Period as
Previously Reported $ 1,979.5 $ 1,406.0
Change in accounting policy -
foreign exchange (note 2) (71.0) (15.4)
--------------------------------
Balance - Beginning of Period as Restated 1,908.5 1,390.6
Net earnings 365.5 600.4
Dividend on common shares (note 6) (47.3) (36.5)
Dividend on preferred securities (net of tax) (4.5) (4.3)
Revaluation of preferred securities (note 2) 0.5 (6.4)
Purchase of common shares (note 6) - (76.2)
--------------------------------
Balance - End of Period $ 2,222.7 $ 1,867.6
----------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------------------------------
2002 2001 2002 2001
----------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions of Canadian dollars) (unaudited)
Operating Activities
Net earnings $ 124.3 $ 87.6 $ 365.5 $ 600.4
Non-cash items
Depletion,
depreciation and
amortization 403.0 236.2 928.1 661.4
Deferred petroleum
revenue tax 0.6 (1.3) 3.6 (1.2)
Future income tax 76.4 61.0 222.6 280.7
Unrealized foreign
exchange loss (gain) 42.1 56.5 (34.6) 60.7
----------------------------------------------
Cash flow provided
from operations 646.4 440.0 1,485.2 1,602.0
Deferred charges (58.3) - (58.3) -
Net change in non-cash
working capital (34.1) 16.7 (46.3) (9.6)
----------------------------------------------
554.0 456.7 1,380.6 1,592.4
----------------------------------------------
Financing Activities
Repay bank
credit facilities (326.7) (709.8) (1,149.2) (792.9)
Issue of US
debt securities 1,107.8 615.2 1,749.3 615.2
Repay senior
unsecured notes (15.9) - (15.9) -
Repay lease obligations (1.9) - (1.9) -
Repay limited
recourse loan - - - (11.8)
Issue of capital stock 10.4 16.0 69.3 38.3
Purchase of common shares - (18.7) - (113.3)
Dividend on common shares (15.4) (12.1) (42.8) (24.3)
Dividend on
preferred securities (2.6) (2.6) (7.8) (7.7)
Net change in non-cash
working capital (17.4) 8.3 (17.6) 7.5
----------------------------------------------
738.3 (103.7) 583.4 (289.0)
----------------------------------------------
Investing Activities
Acquisition of Rio Alto,
net of cash acquired
(note 3) (843.2) - (843.2) -
Expenditures on property,
plant and equipment (635.7) (354.0) (1,457.4) (1,369.2)
Net proceeds on sale of
property, plant
and equipment 14.9 1.9 73.0 14.4
----------------------------------------------
Net expenditures on
property, plant and
equipment (1,464.0) (352.1) (2,227.6) (1,354.8)
Investment in Rio Alto
International Inc. (15.7) - (15.7) -
Net change in non-cash
working capital 201.4 2.1 279.5 58.4
----------------------------------------------
(1,278.3) (350.0) (1,963.8) (1,296.4)
----------------------------------------------
Increase in Cash 14.0 3.0 0.2 7.0
Cash - Beginning
of Period 1.2 32.0 15.0 28.0
----------------------------------------------
Cash - End of Period $ 15.2 $ 35.0 $ 15.2 $ 35.0
----------------------------------------------------------------------
-- For supplementary information, see note 9.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (tabular tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. amounts in millions of Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents ) 1. ACCOUNTING POLICIES The consolidated financial statements of Canadian Natural Resources Limited Canadian Natural Resources Limited TSX: CNQ NYSE: CNQ is an oil and natural gas exploration, development and production company based in Calgary, Alberta. Operations are focused in Western Canada, the North Sea and offshore West Africa. (the "Company") include the Company and all of its subsidiaries and partnerships, and have been prepared following the same accounting policies and methods of computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. as the audited consolidated financial statements of the Company as at December 31, 2001, except as described below and in note 2. The interim consolidated financial statements contain disclosures that are supplemental to the Company's annual consolidated financial statements. Certain disclosures that are normally required to be included in the notes to the annual consolidated financial statements have been condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. . These financial statements should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the Company's audited consolidated financial statements and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. for the year ended December 31, 2001. Hedge hedge, ornamental or protective barrier composed of shrubs or small trees growing in close rows. The plants may be allowed to grow naturally or may be trimmed to various heights and shapes (see topiary work). of net investment in self-sustaining self-sus·tain·ing adj. Able to sustain oneself or itself independently. self  -sus·tain foreign operationsEffective July July: see month. 1, 2002, the Company designated a portion of its US dollar denominated debt as a hedge against its net investment in US dollar based self-sustaining foreign operations. Accordingly, translation gains and losses on this portion of the US dollar denominated debt are included in the foreign currency translation adjustment in shareholders' equity in the consolidated balance sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. . The effect of this hedge was to reduce foreign exchange losses and decrease the foreign currency translation adjustment by $41.7 million for the three months ended September 30, 2002. Midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. operations As a result of the Company's increasing midstream activities, the Company determined that effective January January: see month. 1, 2002, the midstream activities within North America constitute a distinct operating segment. The Company carries its midstream assets at the lower of capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. cost and net recoverable amount. Midstream assets are depreciated Depreciated may refer to:
Comparative figures Certain figures provided for prior periods have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the presentation adopted in 2002. 2. CHANGE IN ACCOUNTING POLICY Foreign currency translation Effective January 1, 2002, the Company retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin adopted the Canadian Institute of Chartered Accountants' new accounting standard with respect to foreign currency translation. As a result of adopting this new standard, gains or losses on the translation of long-term debt denominated in US dollars are no longer deferred and amortized over the term of the debt, but are recognized in net earnings immediately. This new standard has been adopted retroactively and prior periods have been restated. The new standard affects the Company's accounting for US denominated long-term debt and preferred securities. Adoption of the new accounting policy had the following effects on the Company's consolidated financial statements:
YEAR
THREE MONTHS ENDED NINE MONTHS ENDED ENDED
----------------------------------------------
SEP 30 SEP 30 SEP 30 SEP 30 DEC 31
2002 2001 2002 2001 2001
----------------------------------------------
Decrease deferred
foreign exchange
loss $ - $ (63.9) $ - $ (63.9) $ (61.9)
Increase (decrease)
preferred securities $ 5.4 $ 8.1 $ (0.5) $ 8.1 $ 9.1
Increase (decrease)
opening retained
earnings $ 12.1 $ (20.9) $ (71.0) $ (15.4) $ (15.4)
Foreign exchange
loss (gain) $ 69.7 $ 46.1 $ (7.5) $ 50.1 $ 48.1
Revaluation of
preferred securities $ 5.4 $ 4.9 $ (0.5) $ 6.4 $ 7.4
---------------------------------------------------------------------
3. ACQUISITION OF RIO ALTO EXPLORATION LTD LTD 1 Laron-type dwarfism 2 Leukotriene D 3 Long-term depression, see there 4. Long-term disability . Effective July 1, 2002, the Company paid cash of $850.0 million and issued 10,008,000 common shares with an attributed value of $522.4 million to acquire all of the issued and outstanding common shares of Rio Alto Exploration Ltd. ("Rio Alto") by way of a plan of arrangement (the "Plan of Arrangement"). Rio Alto was engaged in the exploration for and production of oil and natural gas in western Canada and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . Under the Plan of Arrangement, Rio See RapidIO and MP3. Alto's South American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of properties were sold to a new company, Rio Alto Resources International Inc. ("Rio Alto International"), and each shareholder of Rio Alto received one share of Rio Alto International. The acquisition of Rio Alto has strengthened the Company's exposure to natural gas production in western Canada and will provide additional cash flow to fund future capital projects. The acquisition was accounted for based on the purchase method. Results from Rio Alto are consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: with the results of the Company effective July 1, 2002. The preliminary estimate of the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of the purchase price to assets acquired and liabilities assumed based on their fair values is set out in the following table:
JULY 1
2002
------------
Purchase price:
Share consideration $ 522.4
Cash consideration 850.0
------------
Total consideration 1,372.4
Long-term debt assumed 936.3
------------
Total purchase price $ 2,308.7
------------
Net assets acquired:
Property, plant and equipment $ 3,383.9
Future income tax (975.1)
Future site restoration (35.9)
Cash 6.8
Non-cash working capital (71.0)
------------
Total net assets acquired $ 2,308.7
------------------------------------------------------------------
The purchase price allocation is based on preliminary estimates of the fair values of the assets acquired, the liabilities assumed and the costs to complete the acquisition. The preliminary allocation is subject to change as actual amounts are determined. 4. DEFERRED CHARGES The deferred charges relate to settlement payments made to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. natural gas contracts and financial contracts. The deferred charges are recognized against revenue over the original term of the contracts. 5. LONG-TERM DEBT
SEPTEMBER 30 DECEMBER 31
2002 2001
-----------------------------
Bank credit facilities
Canadian dollar debt $ 891.2 $ 1,003.4
US dollar debt (2002 - US $100
million, 2001 - US $296 million) 158.6 471.4
Medium-term notes 250.0 250.0
US debt securities (2002 - US $1,500
million, 2001 - US $400 million) 2,378.7 637.0
Senior unsecured notes (2002 - US $318
million, 2001 - US $203 million) 499.8 323.3
Obligations under capital leases 17.2 -
-----------------------------
4,195.5 2,685.1
Current portion of long-term debt (25.9) (15.9)
-----------------------------
$ 4,169.6 $ 2,669.2
---------------------------------------------------------------------
Bank credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities At September 30, 2002, the Company had unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. bank credit facilities of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3,100 million comprised of a $100 million operating demand facility, a revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. and term loan facility of $1,500 million, a revolving credit and term loan facility of US $150 million, a $500 million acquisition term credit facility repayable re·pay v. re·paid , re·pay·ing, re·pays v.tr. 1. To pay back: repaid a debt. 2. July 3, 2004 and a $725 million revolving credit and term loan facility. The $725 million credit and term loan facility was repaid and cancelled can·cel v. can·celed also can·celled, can·cel·ing also can·cel·ling, can·cels also can·cels v.tr. 1. To cross out with lines or other markings. See Synonyms at erase. 2. in October October: see month. 2002. At September 30, 2002, in conjunction with certain borrowings under its credit agreements, the Company irrevocably ir·rev·o·ca·ble adj. Impossible to retract or revoke: an irrevocable decision. ir·rev placed $140 million in escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. to be used solely for the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of those borrowings. This transaction was recognized as an in-substance defeasance In-substance defeasance Process through which debt is removed from the balance sheet but not canceled. and the debt was considered to be extinguished ex·tin·guish tr.v. ex·tin·guished, ex·tin·guish·ing, ex·tin·guish·es 1. To put out (a fire, for example); quench. 2. To put an end to (hopes, for example); destroy. See Synonyms at abolish. 3. as at September 30, 2002. Debt under the bank credit facilities totaling $100 million is subject to an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. that fixes the rate at 5.08% plus a stamping stamp v. stamped, stamp·ing, stamps v.tr. 1. To bring down (the foot) forcibly. 2. To bring the foot down onto (an object or surface) forcibly. 3. fee (note 8). In addition to the outstanding debt, letters of credit aggregating $31.3 million have been issued. US debt securities On January 23, 2002, the Company issued US $400 million of US debt securities, maturing January 15, 2032, bearing interest at 7.20%. Proceeds from the notes issued were used to repay bankers' acceptances A bankers' acceptance, or BA, is a time draft drawn on and accepted by a bank. Before acceptance, the draft is not an obligation of the bank; it is merely an order by the drawer to the bank to pay a specified sum of money on a specified date to a named person or to the under the Company's bank credit facilities. Subsequently, the Company entered into interest rate swap contracts that convert the fixed rate interest coupon A certificate evidencing the obligation to pay an installment of interest or a dividend that must be cut and presented to its issuer for payment when it is due. Coupons are usually attached to a document, such as a promissory note, bond, share of stock, or a bearer into a floating interest rate for a portion of the term (note 8). On August 16, 2002, the Company filed a short form shelf prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. allowing for the issue of debt securities up to an aggregate principal amount of US $1 billion. On September 16, 2002, the Company issued US $350 million of US debt securities maturing October 1, 2012, bearing interest at 5.45% and US $350 million of US debt securities maturing June 30, 2033, bearing interest at 6.45%. Proceeds from the notes issued were used to repay bankers' acceptances under the Company's bank credit facilities. Senior unsecured notes On July 1, 2002, the Company assumed US $125 million of senior notes maturing December 19, 2005, bearing interest at 7.69%. Through a currency swap Currency Swap A swap that involves the exchange of principal and interest in one currency for the same in another currency. Notes: Currency swaps were originally done to get around the problem of exchange controls. , the interest and principal repayment amounts are fixed at 7.30% and $193.7 million, respectively (note 8). Obligations under capital leases The obligations under capital leases bear interest at an average interest rate of 6.90% and are secured by the related assets. 6. SHARE CAPITAL
Issued
SEPTEMBER 30, 2002
------------------------------
Number of shares Amount
(thousands)
------------------------------
Common shares
Balance - January 1, 2002 121,201 $ 1,698.3
Issued to acquire Rio Alto 10,008 522.4
Exercise of stock options 2,083 67.0
Issue of flow-through
shares (net of tax) 60 1.3
------------------------------
Balance - September 30, 2002 133,352 $ 2,289.0
--------------------------------------------------------------
On July 1, 2002, the Company issued 10,008,000 common shares at an attributed value of $522.4 million as part of the consideration to acquire Rio Alto (note 3). In January 2002, the Company issued 60,000 flow-through common shares to a director of the Company at a price of $39.00 per common share, for total proceeds of $2.3 million. The value of the common shares was determined as the closing market price on The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. on the day prior to the allotment A portion, share, or division. The proportionate distribution of shares of stock in a corporation. The partition and distribution of land. ALLOTMENT. Distribution by lot; partition. Merl. Rep. h.t. of the common shares. Normal course issuer bid On January 17, 2001, the Company announced its intention to make a Normal Course Issuer Bid through the facilities of The Toronto Stock Exchange and the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. to purchase up to 6,114,726 common shares or 5% of the common shares outstanding of the Company on the date of announcement during the 12-month period beginning January 22, 2001 and ending January 21, 2002. As at January 21, 2002, the Company had purchased 2,537,800 common shares for a total cost of $113.3 million. The excess cost over book value of the shares purchased was applied to contributed surplus and retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . In January 2002, the Company renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. its Normal Course Issuer Bid, allowing the Company to purchase up to 6,060,180 common shares or 5% of the Company's common shares outstanding on the date of announcement, during the 12-month period beginning January 23, 2002 and ending January 22, 2003. As at September 30, 2002, no common shares had been purchased under the renewed Normal Course Issuer Bid. Dividend policy On January 17, 2001, the Company announced a dividend policy to pay regular quarterly dividends of $0.10 per common share payable in January, April, July and October of each year. In February February: see month. 2002, the Board of Directors increased the Company's regular quarterly dividend to $0.125 per common share commencing with the April 1, 2002 payment.
Stock options
SEPTEMBER 30, 2002
------------------------------------
Stock options Weighted average
(thousands) exercise price
------------------------------------
Outstanding - January 1, 2002 12,051 $ 34.77
Granted 3,174 41.88
Exercised (2,083) 32.15
Forfeited (353) 38.77
------------------------------------
Outstanding - September 30, 2002 12,789 $ 36.85
------------------------------------
Exercisable - September 30, 2002 3,683 $ 32.60
-------------------------------------------------------------------
Stock-based compensation costs
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------
2002 2001 2002 2001
------------------------------------------
Stock-based
compensation costs $ 6.6 $ 4.9 $ 18.1 $ 13.7
Net earnings
attributable to
common shareholders
As reported $ 117.4 $ 81.3 $ 361.5 $ 589.7
Pro forma $ 110.8 $ 76.4 $ 343.4 $ 576.0
Net earnings per
common share
attributable to
common shareholders
Basic
As reported $ 0.88 $ 0.67 $ 2.87 $ 4.86
Pro forma $ 0.83 $ 0.63 $ 2.73 $ 4.75
Diluted
As reported $ 0.86 $ 0.66 $ 2.78 $ 4.72
Pro forma $ 0.81 $ 0.62 $ 2.64 $ 4.62
--------------------------------------------------------------
-- The pro forma amounts shown above do not include the
compensation costs associated with stock options granted prior
to January 1, 2000.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------
2002 2001 2002 2001
------------------------------------------
Fair value of options
granted (per common
share)
Directors, officers
and executives $ - $ - $ 14.70 $ 16.52
Other employees $ 13.17 $ 13.72 $ 12.36 $ 13.69
Risk-free
interest rate 3.3% 5.3% 3.7% 5.2%
Expected life (years)
Directors, officers
and executives - - 5.5 5.5
Other employees 3.6 3.6 3.6 3.6
Expected volatility 35% 34% 37% 39%
Expected dividend yield 1.1% 0.9% 1.2% 1.0%
--------------------------------------------------------------
7. NET EARNINGS AND CASH FLOW FROM OPERATIONS PER COMMON SHARE
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------------------------
2002 2001 2002 2001
------------------------------------------
Weighted average
common shares
outstanding
(thousands)
Basic 133,201 120,815 125,950 121,349
Effect of dilutive
stock options 3,507 2,638 3,095 2,979
Assumed settlement
of preferred
securities with
common shares(1) - - 2,609 2,759
------------------------------------------
Diluted 136,708 123,453 131,654 127,087
------------------------------------------
Net earnings
attributable to
common
shareholders $ 117.4 $ 81.3 $ 361.5 $ 589.7
Dividend on
preferred
securities(1) - - 4.5 4.3
Revaluation of
preferred
securities(1) - - (0.5) 6.4
------------------------------------------
Diluted net earnings
attributable to
common
shareholders $ 117.4 $ 81.3 $ 365.5 $ 600.4
------------------------------------------
Net earnings per
common share
attributable to
common shareholders
Basic $ 0.88 $ 0.67 $ 2.87 $ 4.86
Diluted $ 0.86 $ 0.66 $ 2.78 $ 4.72
Cash flow from
operations
attributable
to common
shareholders $ 643.8 $ 437.4 $ 1,477.4 $ 1,594.3
Dividend on
preferred
securities(1) - - 7.8 7.7
------------------------------------------
Diluted cash flow
from operations
attributable to
common
shareholders $ 643.8 $ 437.4 $ 1,485.2 $ 1,602.0
------------------------------------------
Cash flow from
operations per
common share
attributable to
common
shareholders
Basic $ 4.83 $ 3.62 $ 11.73 $ 13.14
Diluted $ 4.71 $ 3.54 $ 11.28 $ 12.61
--------------------------------------------------------------
-- (1) Preferred securities are anti-dilutive for the three
months ended September 30, 2002 and September 30, 2001, but
are dilutive for the nine months ended September 30, 2002 and
September 30, 2001.
8. FINANCIAL INSTRUMENTS The Company uses certain derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. financial instruments to manage its commodity prices, foreign currency and interest rate exposures. These financial instruments are entered into solely for hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. purposes and are not used for trading or other speculative Speculative Securities that involve a high level of risk. speculative Of or relating to an asset or a group of assets with uncertain returns. The greater the degree of uncertainty the more speculative the asset. purposes. The Company has the following financial derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. outstanding as at the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" :
Remaining Term Volume Average Price Index
---------------------------------------------------------------------
Oil
Brent differential
swaps
Oct. 2002-Dec. 2002 20,000 bbls/d US $1.28 Dated Brent/
WTI
Jan. 2003-Dec. 2003 15,000 bbls/d US $1.00 Dated Brent/
WTI
Oil price collars
Oct. 2002-Dec. 2002 153,500 bbls/d US $21.92-US $26.94 WTI
Jan. 2003-Jun. 2003 104,000 bbls/d US $22.09-US $27.26 WTI
Jul. 2003-Aug. 2003 60,000 bbls/d US $23.00-US $27.85 WTI
Oil price fixed
Oct. 2002-Dec. 2002 7,000 bbls/d US $22.13 WTI
-----------------------------------------------------------------------
Remaining Term Volume Average Price Index
---------------------------------------------------------------------
Natural Gas
NYMEX fixed
Oct. 2002 90,000 mmbtu/d US $2.85 NYMEX
Nov. 2002-Dec. 2002 30,000 mmbtu/d US $3.27 NYMEX
NYMEX collar
Nov. 2002-Oct. 2003 30,000 mmbtu/d US $2.88-US $6.12 NYMEX
Sumas fixed
Oct. 2002-Oct. 2003 10,000 mmbtu/d Cdn $2.85 Sumas
AECO collars
Oct. 2002-Dec. 2002 100,000 GJ/d Cdn $4.25-Cdn $6.03 AECO
Nov. 2002-Mar. 2003 30,000 GJ/d Cdn $4.00-Cdn $8.43 AECO
Nov. 2002-Oct. 2003 40,000 GJ/d Cdn $3.50-Cdn $5.38 AECO
AECO fixed
Oct. 2002 5,000 GJ/d Cdn $2.71 AECO
-----------------------------------------------------------------------
Remaining Term Amount Average
Exchange Rate
($ millions) (US $/Cdn $)
-------------------------------------------------
Foreign Currency
Currency fixed Oct. 2002 US $0.4/month 1.37
Currency collars Oct. 2002-May 2003 US $4.2/month 1.43 - 1.53
Oct. 2002-Aug. 2004 US $25.0/month 1.51 - 1.59
----------------------------------------------------------------------
Remaining Term Amount Exchange Interest Interest
Rate Rate Rate
($ millions) (US $/Cdn $) (US $) (Cdn $)
------------------------------------------------------------
Currency
swap Oct. 2002-Dec. 2005 US $125 1.55 7.69% 7.30%
----------------------------------------------------------------------
Remaining Term Amount Fixed Floating
Rate Rate
($ millions)
------------------------------------------------------------
Interest Rate
Swaps - fixed to
Floating Oct. 2002-Jul. 2004 US $200 6.70% LIBOR + 2.09%
Oct. 2002-Jul. 2006 US $200 6.70% LIBOR + 1.58%
Oct. 2002-Jan. 2005 US $200 7.20% LIBOR + 3.00%
Oct. 2002-Jan. 2007 US $200 7.20% LIBOR + 2.23%
Swap - floating
to fixed Oct. 2002-Mar. 2004 Cdn $100 5.08%
---------------------------------------------------------------------
9. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------------------------
2002 2001 2002 2001
----------------------------------------
Interest paid $ 56.5 $ 25.8 $ 103.8 $ 99.0
Taxes paid $ 28.9 $ 37.8 $ 92.5 $ 118.5
--------------------------------------------------------------------
10. SEGMENTED INFORMATION
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------------------------
2002 2001 2002 2001
----------------------------------------
Revenue
North America $ 936.6 $ 651.6 $2,259.7 $2,456.3
North Sea 186.2 141.7 384.7 407.8
Offshore West Africa 36.5 12.2 71.3 35.8
Midstream 13.3 5.0 37.2 22.5
----------------------------------------
$1,172.6 $ 810.5 $2,752.9 $2,922.4
----------------------------------------
Net Earnings
North America $ 112.9 $ 74.8 $ 387.8 $ 503.5
North Sea (0.1) 15.6 (20.1) 94.9
Offshore West Africa 6.7 (4.4) (14.8) (4.6)
Midstream 4.8 1.6 12.6 6.6
----------------------------------------
124.3 87.6 365.5 600.4
Dividend on preferred
securities (net of tax) (1.5) (1.4) (4.5) (4.3)
Revaluation of
preferred securities (5.4) (4.9) 0.5 (6.4)
----------------------------------------
Net Earnings Attributable to
Common Shareholders $ 117.4 $ 81.3 $ 361.5 $ 589.7
----------------------------------------
Additions to Property,
Plant and Equipment
(excluding Acquisition
of Rio Alto)
North America $ 331.8 $ 280.9 $ 984.4 $1,164.8
North Sea 295.6 32.2 251.4 63.5
Offshore West Africa 58.7 22.9 173.1 160.8
Midstream - 16.1 14.8 51.8
----------------------------------------
$ 686.1 $ 352.1 $1,423.7 $1,440.9
--------------------------------------------------------------------
Property, plant and equipment and future income taxes payable have been increased by $39.3 million (2001 increased by $86.1 million) to provide for the tax effect of the sale and acquisition of assets Acquisition of assets A merger or consolidation in which an acquirer purchases the selling firm's assets. in the North Sea and North America with a tax basis that differs from the purchase and sale price.
PROPERTY, PLANT AND EQUIPMENT TOTAL ASSETS
--------------------------------------------------------
SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30 DECEMBER 31
2002 2001 2002 2001
---------------------------------------------------------
Segmented Assets
North America $ 10,644.8 $ 6,984.0 $ 11,256.4 $ 7,392.5
North Sea 1,140.5 866.2 1,219.2 941.6
Offshore West
Africa 508.3 409.9 534.6 433.2
Midstream 187.9 182.8 204.4 199.6
---------------------------------------------------------
$ 12,481.5 $ 8,442.9 $ 13,214.6 $ 8,966.9
----------------------------------------------------------------------
INTEREST COVERAGE RATIOS The following financial ratios are provided in connection with the Company's continuous offering of medium-term notes Medium-term note (MTN) A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc. pursuant to the short form prospectus dated July 24, 2001. These ratios are based on the Company's consolidated financial statements that are prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of .
Interest coverage ratios for the 12-month period ended September 30,
2002:
Interest coverage (times)
Net earnings 6.1(1)
Cash flow from operations attributable
to common shareholders 14.5(2)
---------------------------------------------------------------------
-- (1) Net earnings plus income taxes and interest expense;
divided by interest expense.
-- (2) Cash flow from operations attributable to common
shareholders plus current income taxes and interest expense;
divided by interest expense.
The interest coverage ratios have been calculated without including the annual carrying charges Payments made to satisfy expenses incurred as a result of ownership of property, such as land taxes and mortgage payments. Disbursements paid to creditors, in addition to interest, for extending credit. Consumer Protection laws require full disclosure of all carrying charges. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the outstanding preferred securities of the Company. If the preferred securities were classified as long-term debt, these annual carrying charges would be included in interest. If these annual carrying charges had been included in the calculations, the net earnings coverage ratio for the 12-month period ended September 30, 2002, would be 5.6x and the cash flow coverage ratio Cash flow coverage ratio The number of times that financial obligations (for interest, principal payments, preferred stock dividends, and rental payments) are covered by earnings before interest, taxes, rental payments, and depreciation. for the 12-month period ended September 30, 2002 would be 13.5x. CONFERENCE CALL A conference call will be held at 9:00 a.m. Mountain Standard Time, 11:00 a.m. Eastern Standard Time, on Wednesday Wednesday: see week. , November November: see month. 6, 2002. The North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. conference call number is 1-888-424-1091 and the outside North America conference call number is 1-416-641-6662. Please call in about 10 minutes before the starting time Noun 1. starting time - the time at which something is supposed to begin; "they got an early start"; "she knew from the get-go that he was the man for her" commencement, get-go, offset, outset, showtime, start, kickoff, beginning, first in order to be patched patch 1 n. 1. a. A small piece of material affixed to another, larger piece to conceal, reinforce, or repair a worn area, hole, or tear. b. A small piece of cloth used for patchwork. 2. into the call. Should you experience difficulty in connecting to the call, those in North America should please call 1-800-473-0602. Those outside North America should please call 1-905-502-3723. Media are invited to participate in listen-only mode. Replay: A taped rebroadcast will be available until November 13, 2002, inclusive (theory) inclusive - In domain theory, a predicate P : D -> Bool is inclusive iff For any chain C, a subset of D, and for all c in C, P(c) => P(lub C) In other words, if the predicate holds for all elements of an increasing sequence then it holds for their least upper . To access postview in North America, dial 1-800-558-5253 and enter the passcode 20848655. Those outside of North America dial 1-416-626-4100 and enter the passcode number 20847905. 2002 YEAR END RESULTS 2002 year end results are scheduled for release Wednesday, February 26, 2003. A conference call will be held at 9:00 a.m. Mountain Standard Time, 11:00 a.m. Eastern Standard Time. Certain information regarding the Company contained herein may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in the forward-looking statements. |
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