10-QPeriod: Q1 FY2012

CONOCOPHILLIPS Quarterly Report for Q1 Ended Mar 31, 2012

Filed April 30, 2012For Securities:COP

Summary

ConocoPhillips reported solid financial results for the first quarter of 2012, with net income attributable to ConocoPhillips of $2.937 billion, a slight decrease from $3.028 billion in the prior year's quarter. This performance was driven by a strong contribution from the Exploration and Production (E&P) segment, which accounted for 87% of earnings, benefiting from higher crude oil and LNG prices. Despite increased impairments and lower natural gas prices impacting overall profitability, the company demonstrated resilience through a significant gain on asset dispositions, notably the sale of its Vietnam E&P business. The company is strategically preparing for the separation of its downstream businesses into a new entity, Phillips 66, expected to be completed on April 30, 2012. This move aims to create two distinct, focused companies. ConocoPhillips also announced a substantial increase in capital expenditures, particularly in its E&P segment, reflecting ongoing investments in key development projects. The company maintained its quarterly dividend and continued its share repurchase program, signaling confidence in its financial health and commitment to returning value to shareholders.

Financial Highlights

45 data points
Beta

Revenue

$14.59B

Net Income

$2.94B

20.1% Net Margin

EPS (Diluted)

$2.27

Total Assets

$162.88B

Cash & Equivalents

$3.71B

Free Cash Flow

$4.18B

Financial Statements
Beta
Revenue$14.59B
SG&A Expenses$326.00M
Operating Expenses$11.82B
Operating Income$2.16B
Net Income$2.94B
EPS (Basic)$2.29
EPS (Diluted)$2.27
Shares Outstanding (Basic)1.28M
Shares Outstanding (Diluted)1.29M

Key Highlights

  • 1Net income attributable to ConocoPhillips was $2.937 billion for Q1 2012, a slight decrease from $3.028 billion in Q1 2011.
  • 2The Exploration and Production (E&P) segment was the primary earnings driver, contributing $2.548 billion, up from $2.352 billion in the prior year.
  • 3The company recorded a significant gain on dispositions of $942 million, largely from the sale of its Vietnam E&P business for $1.1 billion.
  • 4Selling, general, and administrative expenses increased by 37%, primarily due to costs associated with the planned separation of the downstream business into Phillips 66.
  • 5Capital expenditures and investments increased significantly to $4.260 billion in Q1 2012 from $2.884 billion in Q1 2011, with E&P being the largest area of investment.
  • 6ConocoPhillips announced the planned separation of its downstream businesses into Phillips 66, to be completed on April 30, 2012, via a stock dividend.
  • 7Cash provided by operating activities more than doubled to $4.182 billion from $1.947 billion in the prior year's quarter.

Frequently Asked Questions

The Exploration and Production (E&P) segment was the primary driver of ConocoPhillips' financial performance in the first quarter of 2012, contributing significantly to net income due to higher crude oil and LNG prices. Additionally, a substantial gain from asset dispositions, particularly the sale of the Vietnam E&P business, positively impacted the results.

ConocoPhillips' Board of Directors approved the separation of its downstream businesses into a stand-alone, publicly traded corporation named Phillips 66. The separation was planned to occur via a tax-free distribution on April 30, 2012, with ConocoPhillips shareholders receiving one share of Phillips 66 for every two shares of ConocoPhillips held.

Capital expenditures and investments increased significantly to $4.260 billion in the first quarter of 2012, up from $2.884 billion in the same period of 2011. The majority of this increase was in the E&P segment, reflecting investments in exploration and development activities across various regions.

The company expects its 2012 E&P production to be approximately 1.55 to 1.60 million BOE per day, subject to asset dispositions. Cash provided by operating activities saw a substantial increase in Q1 2012 compared to Q1 2011, driven by lower inventory builds and strong E&P performance. However, future cash flows remain sensitive to volatile commodity prices and refining margins.