VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
REVENUES:
Oil, condensate and NGL
sales $136,382 $105,269 $367,320 $323,806
Gas sales 49,158 25,282 127,284 86,545
Sulfur sales 234 440 949 1,305
Gas marketing 17,897 15,445 50,131 59,978
--------- --------- --------- ---------
Total revenues 203,671 146,436 545,684 471,634
--------- --------- --------- ---------
COSTS AND EXPENSES:
Production costs 34,335 33,266 105,379 91,329
Transportation and storage
costs 3,318 1,761 7,500 5,120
Production and ad valorem
taxes 5,732 3,997 16,557 12,756
Export taxes 12,778 7,409 25,691 25,814
Exploration costs 12,435 6,061 21,000 17,395
Gas marketing 16,857 14,798 47,409 58,093
General and administrative 12,806 11,848 41,723 34,667
Stock compensation 1,153 1,861 7,091 4,295
Depreciation, depletion and
amortization 26,720 21,392 72,687 65,463
Impairment of proved oil and
gas properties - - 3,915 -
Accretion 1,685 1,523 4,932 4,422
Other operating (income)
expense 1,671 (701) (1,933) 941
--------- --------- --------- ---------
Total costs and expenses 129,490 103,215 351,951 320,295
--------- --------- --------- ---------
OPERATING INCOME 74,181 43,221 193,733 151,339
--------- --------- --------- ---------
OTHER (INCOME) EXPENSE:
Interest expense 12,625 17,818 39,321 54,328
Loss on early extinguishment
of debt - - 9,903 1,426
(Gain) loss on disposition
of assets (17) - (72) 667
Foreign currency exchange
(gain) loss (285) (915) (1,112) 6,653
Other non-operating expense 15,721 818 15,991 41
--------- --------- --------- --------
Net other expense 28,044 17,721 64,031 63,115
--------- --------- --------- ---------
Income from continuing
operations before income
taxes and cumulative effect
of change in accounting
principle 46,137 25,500 129,702 88,224
--------- --------- --------- ---------
INCOME TAX PROVISION (BENEFIT):
Current 15,701 5,128 44,114 39,609
Deferred 3,024 5,034 5,115 (2,057)
--------- --------- --------- --------
Total income tax
provision 18,725 10,162 49,229 37,552
--------- --------- --------- ---------
Income from continuing
operations before
cumulative effect of change
in accounting principle 27,412 15,338 80,473 50,672
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, net of income tax
provision (benefit) of
$(184), $221, $130 and
$25,480, respectively (397) (3,583) 3,086 (14,042)
--------- --------- --------- --------
Income before cumulative
effect of change in
accounting principle 27,015 11,755 83,559 36,630
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING
PRINCIPLE, net of income tax
provision of $4,104 - - - 7,119
--------- --------- --------- ---------
NET INCOME $27,015 $11,755 $83,559 $43,749
========= ========= ========= =========
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED CONSOLIDATED STATEMENTS OF OPERATIONS
(Continued)
(In thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
--------------- ---------------
2004 2003 2004 2003
------- ------- ------- -------
BASIC INCOME (LOSS) PER SHARE:
Income from continuing operations
before cumulative effect of change
in accounting principle $0.42 $0.24 $1.24 $0.79
Income (loss) from discontinued
operations (0.01) (0.06) 0.05 (0.22)
------- ------- ------- -------
Income before cumulative effect of
change in accounting principle 0.41 0.18 1.29 0.57
Cumulative effect of change in
accounting principle - - - 0.11
------- ------- ------- -------
Net income $0.41 $0.18 $1.29 $0.68
======= ======= ======= =======
DILUTED INCOME (LOSS) PER SHARE:
Income from continuing operations
before cumulative effect of change
in accounting principle $0.42 $0.24 $1.23 $0.79
Income (loss) from discontinued
operations (0.01) (0.06) 0.05 (0.22)
------- ------- ------- -------
Income before cumulative effect of
change in accounting principle 0.41 0.18 1.28 0.57
Cumulative effect of change in
accounting principle - - - 0.11
------- ------- ------- -------
Net income $0.41 $0.18 $1.28 $0.68
======= ======= ======= =======
Weighted average common shares
outstanding:
Basic 65,283 64,228 64,786 63,938
Diluted 66,043 64,767 65,521 64,292
Certain 2003 amounts have been reclassified to conform with the 2004
presentation. These reclassifications had no effect on the Company's
net income.
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per share amounts)
(Unaudited)
ASSETS
September December
30, 31,
2004 2003
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $46,012 $32,264
Accounts receivable -
Oil and gas sales 115,861 78,321
Joint operations 8,616 7,480
Deferred income taxes 21,513 -
Prepaids and other current assets 10,638 6,660
Assets of discontinued operations 253,387 224,321
----------- -----------
Total current assets 456,027 349,046
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Oil and gas properties, successful efforts
method 2,023,933 1,835,588
Oil and gas gathering systems and plants 23,890 23,344
Other 27,903 26,334
----------- -----------
2,075,726 1,885,266
Less: Accumulated depreciation, depletion
and amortization 908,462 829,055
----------- -----------
Total property, plant and equipment, net 1,167,264 1,056,211
----------- -----------
DEFERRED INCOME TAXES 14,558 -
----------- -----------
OTHER ASSETS, net 42,513 41,581
----------- -----------
$1,680,362 $1,446,838
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revenue payable $37,541 $22,641
Accounts payable - trade 53,578 48,548
Current income taxes payable 21,815 17,316
Derivative financial instruments payable 59,968 7,551
Other payables and accrued liabilities 88,796 54,852
Liabilities of discontinued operations 79,454 46,093
----------- -----------
Total current liabilities 341,152 197,001
----------- -----------
LONG-TERM DEBT 676,547 699,943
----------- -----------
DEFERRED INCOME TAXES 85,214 54,311
----------- -----------
LONG-TERM LIABILITY FOR ASSET RETIREMENT
OBLIGATIONS 77,577 72,158
----------- -----------
DERIVATIVE FINANCIAL INSTRUMENTS PAYABLE
AND OTHER 16,338 939
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par, 5,000,000
shares authorized, zero shares issued and
outstanding - -
Common stock, $0.005 par, 160,000,000
shares authorized, 66,181,811 and
64,720,975 shares issued and 65,657,693 and
64,281,199 outstanding, respectively 331 324
Capital in excess of par value 354,217 337,080
Retained earnings 96,974 22,844
Accumulated other comprehensive income 40,293 70,482
----------- -----------
491,815 430,730
Less treasury stock, at cost, 524,118 and
439,776 shares 4,319 3,117
Less unamortized cost of restricted stock
awards 3,962 5,127
----------- -----------
Total stockholders' equity 483,534 422,486
----------- -----------
$1,680,362 $1,446,838
=========== ===========
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
-------------------
2004 2003
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $83,559 $43,749
Adjustments to reconcile net income to cash
provided by operating activities -
Income from discontinued operations, net of
tax (3,086) 14,042
Cumulative effect of change in accounting
principle, net of tax - (7,119)
Depreciation, depletion and amortization 72,687 65,463
Impairment of proved oil and gas properties 3,915 -
Accretion 4,932 4,422
Exploration costs 16,733 9,910
Provision (benefit) for deferred income
taxes 5,115 (2,057)
Foreign currency exchange loss (1,112) 6,653
(Gain) loss on dispositions of assets (72) 667
Loss on early extinguishment of debt 9,903 1,426
Stock compensation 7,091 4,295
Other non-cash items included in net income 15,785 2,644
Increase in receivables (5,532) (2,100)
Increase in payables and accrued
liabilities 9,923 9,490
Other working capital changes 1,727 4,265
--------- ---------
Cash provided by continuing operations 221,568 155,750
Cash provided by discontinued operations 34,646 16,406
--------- ---------
Cash provided by operating
activities 256,214 172,156
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures -
Oil and gas properties (159,538) (100,041)
Gathering systems and other (2,132) (3,232)
Proceeds from sale of oil and gas properties 67 29,980
Purchase of company, net of cash acquired (26,757) -
Proceeds from sale of company, net of cash sold - 116,107
Other 2,454 (4,153)
--------- ---------
Cash provided (used) by investing
activities - continuing operations (185,906) 38,661
Cash provided (used) by investing
activities - discontinued operations (23,785) 8,311
--------- ---------
Cash provided (used) by investing
activities (209,691) 46,972
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 11,218 1,122
Purchase of treasury stock (1,202) (3,013)
Redemption of 9 3/4% Senior Subordinated Notes
due 2009 (157,313) -
Redemption of 9% Senior Subordinated Notes due
2005 - (50,750)
Advance on revolving credit facility and other
borrowings 370,100 115,400
Payments on revolving credit facility and other
borrowings (243,500) (151,017)
Dividends paid (9,042) (7,971)
Other (3,668) 1
--------- ---------
Cash used by financing activities (33,407) (96,228)
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 632 480
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 13,748 123,380
CASH AND CASH EQUIVALENTS, beginning of period 32,264 8,128
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $46,012 $131,508
========= =========
VINTAGE PETROLEUM, INC. AND SUBSIDIARIES
REVISED NON-GAAP FINANCIAL MEASURES
Cash flow, a non-GAAP measure, represents cash provided by operating
activities before the impact of all exploration costs, changes in
working capital items related to operating activities and current
taxes on property sales. It includes cash flow from Canada (now
classified as a discontinued operation) in all periods presented but
excludes the cash used by discontinued operations related to Ecuador
which was sold in 2003 and thus no comparable amounts exist for the
periods in 2004. Cash flow is presented because management believes it
is a useful adjunct to cash provided by operating activities under
accounting principles generally accepted in the United States
("GAAP"). Cash flow is widely accepted as a financial indicator of an
oil and gas company's ability to generate cash which is used to
internally fund exploration and development activities and to service
debt. Cash flow is not a measure of financial performance under GAAP
and should not be considered as an alternative to cash provided (used)
by operating, investing, or financing activities as an indicator of
cash flows, or as a measure of liquidity.
EBITDAX is also presented below because of its wide acceptance by the
investment community as a financial indicator of a company's ability
to internally fund exploration and development activities and to
service or incur debt. Management also views the non-GAAP measure of
EBITDAX as a useful tool for comparison of the company's financial
indicator with those of peer companies. EBITDAX should not be
considered as an alternative to net income or cash provided by
operating activities, as defined by GAAP. The following table
reconciles cash provided by operating activities to cash flow and
EBITDAX (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ --------------------
2004 2003 2004 2003
--------- -------- --------- ----------
Cash provided by operating
activities (GAAP measure) $114,006 $78,041 $256,214 $172,156
Adjustments to remove the
impact of:
Changes in working capital
items related to operating
activities (a) (16,605) (25,475) (1,904) (1,279)
Exploration geological and
geophysical costs (b) 1,526 5,037 5,268 10,128
Current tax provision
associated with property
sales - 1,725 - 6,933
Cash used by Ecuador
discontinued operations - 9,441 - 30,370
--------- -------- --------- ---------
Cash flow (non-GAAP measure) 98,927 68,769 259,578 218,308
Current taxes (c) 17,862 2,752 44,027 30,764
Interest expense 12,625 17,818 39,321 54,328
--------- -------- --------- ---------
EBITDAX (non-GAAP measure) $129,414 $89,339 $342,926 $303,400
========= ======== ========= =========
(a) Includes changes in working capital items related to operating
activities for Canada (a discontinued operation) of $266,
$(7,400), $4,214 and $10,376 for the three months ended September
30, 2004 and 2003 and the nine months ended September 30, 2004 and
2003, respectively.
(b) Includes exploration, geological and geophysical costs related to
Canada operations of $140, $809, $1,000 and $2,644 for the three
months ended September 30, 2004 and 2003 and the nine months ended
September 30, 2004 and 2003, respectively.
(c) Includes a current tax provision (benefit) related to Canadian
operations of $2,161, $(650), $(87) and $(1,912) for the three
months ended September 30, 2004 and 2003 and the nine months ended
September 30, 2004 and 2003, respectively.
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