(Mark One)
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[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly Period Ended September 30, 2013
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____ to _____
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Delaware
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25-0996816
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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INDEX
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Page
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||
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||
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||
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||
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||
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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||||||||||||
(In millions, except per share data)
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2013
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2012
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2013
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2012
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||||||||
Revenues and other income:
|
|
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|
|
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|
||||||||
Sales and other operating revenues, including related party
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$
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3,119
|
|
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$
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3,405
|
|
|
$
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9,978
|
|
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$
|
9,324
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Marketing revenues
|
668
|
|
|
631
|
|
|
1,597
|
|
|
2,237
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||||
Income from equity method investments
|
114
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|
|
122
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|
|
309
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|
|
260
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||||
Net gain (loss) on disposal of assets
|
(6
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)
|
|
(12
|
)
|
|
(4
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)
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|
126
|
|
||||
Other income
|
19
|
|
|
15
|
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38
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38
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||||
Total revenues and other income
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3,914
|
|
|
4,161
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|
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11,918
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|
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11,985
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||||
Costs and expenses:
|
|
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|||||
Production
|
575
|
|
|
601
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|
|
1,767
|
|
|
1,581
|
|
||||
Marketing, including purchases from related parties
|
664
|
|
|
629
|
|
|
1,588
|
|
|
2,238
|
|
||||
Other operating
|
126
|
|
|
112
|
|
|
323
|
|
|
311
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|
||||
Exploration
|
153
|
|
|
170
|
|
|
751
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|
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477
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||||
Depreciation, depletion and amortization
|
720
|
|
|
625
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|
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2,205
|
|
|
1,779
|
|
||||
Impairments
|
11
|
|
|
8
|
|
|
49
|
|
|
271
|
|
||||
Taxes other than income
|
91
|
|
|
55
|
|
|
268
|
|
|
178
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|
||||
General and administrative
|
152
|
|
|
179
|
|
|
490
|
|
|
499
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|
||||
Total costs and expenses
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2,492
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|
|
2,379
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|
|
7,441
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|
|
7,334
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||||
Income from operations
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1,422
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|
|
1,782
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4,477
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4,651
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|
||||
Net interest and other
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(66
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)
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(53
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)
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(209
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)
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(160
|
)
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||||
Income before income taxes
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1,356
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|
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1,729
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4,268
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4,491
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Provision for income taxes
|
787
|
|
|
1,279
|
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|
2,890
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|
|
3,231
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|
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Net income
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$
|
569
|
|
|
$
|
450
|
|
|
$
|
1,378
|
|
|
$
|
1,260
|
|
Per Share Data
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Income:
|
|
|
|
|
|
|
|
|
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||||
Basic
|
$
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0.80
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|
|
$
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0.64
|
|
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$
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1.95
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$
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1.79
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Diluted
|
$
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0.80
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|
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$
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0.63
|
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$
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1.94
|
|
|
$
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1.78
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Dividends paid
|
$
|
0.19
|
|
|
$
|
0.17
|
|
|
$
|
0.53
|
|
|
$
|
0.51
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|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
707
|
|
|
706
|
|
|
708
|
|
|
705
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|
||||
Diluted
|
711
|
|
|
709
|
|
|
712
|
|
|
709
|
|
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Three Months Ended
|
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Nine Months Ended
|
||||||||||||
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September 30,
|
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September 30,
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||||||||||||
(In millions)
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2013
|
|
2012
|
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2013
|
|
2012
|
||||||||
Net income
|
$
|
569
|
|
|
$
|
450
|
|
|
$
|
1,378
|
|
|
$
|
1,260
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Postretirement and postemployment plans
|
|
|
|
|
|
|
|
|
|
|
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||||
Change in actuarial loss and other
|
34
|
|
|
(90
|
)
|
|
180
|
|
|
(80
|
)
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||||
Income tax (provision) benefit on postretirement and
|
|
|
|
|
|
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|
|
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||||
postemployment plans
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(13
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)
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32
|
|
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(67
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)
|
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28
|
|
||||
Postretirement and postemployment plans, net of tax
|
21
|
|
|
(58
|
)
|
|
113
|
|
|
(52
|
)
|
||||
Derivative hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrecognized gain
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Income tax provision on derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Derivative hedges, net of tax
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Foreign currency translation and other
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain (loss)
|
1
|
|
|
—
|
|
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(3
|
)
|
|
—
|
|
||||
Income tax benefit on foreign currency translation and other
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Foreign currency translation and other, net of tax
|
1
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Other comprehensive income (loss)
|
22
|
|
|
(57
|
)
|
|
111
|
|
|
(51
|
)
|
||||
Comprehensive income
|
$
|
591
|
|
|
$
|
393
|
|
|
$
|
1,489
|
|
|
$
|
1,209
|
|
|
September 30,
|
|
December 31,
|
||||
(In millions, except per share data)
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
354
|
|
|
$
|
684
|
|
Receivables
|
2,562
|
|
|
2,418
|
|
||
Inventories
|
360
|
|
|
361
|
|
||
Other current assets
|
179
|
|
|
299
|
|
||
Total current assets
|
3,455
|
|
|
3,762
|
|
||
Equity method investments
|
1,216
|
|
|
1,279
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|
||
Property, plant and equipment, less accumulated depreciation,
|
|
|
|
|
|
||
depletion and amortization of $21,171 and $19,266
|
27,822
|
|
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28,272
|
|
||
Goodwill
|
499
|
|
|
525
|
|
||
Other noncurrent assets
|
2,784
|
|
|
1,468
|
|
||
Total assets
|
$
|
35,776
|
|
|
$
|
35,306
|
|
Liabilities
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Commercial paper
|
$
|
200
|
|
|
$
|
200
|
|
Accounts payable
|
2,406
|
|
|
2,324
|
|
||
Payroll and benefits payable
|
162
|
|
|
217
|
|
||
Accrued taxes
|
1,511
|
|
|
1,983
|
|
||
Other current liabilities
|
326
|
|
|
173
|
|
||
Long-term debt due within one year
|
68
|
|
|
184
|
|
||
Total current liabilities
|
4,673
|
|
|
5,081
|
|
||
Long-term debt
|
6,433
|
|
|
6,512
|
|
||
Deferred tax liabilities
|
2,481
|
|
|
2,432
|
|
||
Defined benefit postretirement plan obligations
|
713
|
|
|
856
|
|
||
Asset retirement obligations
|
2,027
|
|
|
1,749
|
|
||
Deferred credits and other liabilities
|
455
|
|
|
393
|
|
||
Total liabilities
|
16,782
|
|
|
17,023
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ Equity
|
|
|
|
|
|
||
Preferred stock – no shares issued or outstanding (no par value,
|
|
|
|
|
|
||
26 million shares authorized)
|
—
|
|
|
—
|
|
||
Common stock:
|
|
|
|
|
|
||
Issued – 770 million and 770 million shares (par value $1 per share,
|
|
|
|
||||
1.1 billion shares authorized)
|
770
|
|
|
770
|
|
||
Securities exchangeable into common stock – no shares issued or
|
|
|
|
|
|
||
outstanding (no par value, 29 million shares authorized)
|
—
|
|
|
—
|
|
||
Held in treasury, at cost – 74 million and 63 million shares
|
(2,949
|
)
|
|
(2,560
|
)
|
||
Additional paid-in capital
|
6,603
|
|
|
6,616
|
|
||
Retained earnings
|
14,892
|
|
|
13,890
|
|
||
Accumulated other comprehensive loss
|
(322
|
)
|
|
(433
|
)
|
||
Total stockholders' equity
|
18,994
|
|
|
18,283
|
|
||
Total liabilities and stockholders' equity
|
$
|
35,776
|
|
|
$
|
35,306
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Increase (decrease) in cash and cash equivalents
|
|
|
|
||||
Operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
1,378
|
|
|
$
|
1,260
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Deferred income taxes
|
17
|
|
|
(27
|
)
|
||
Depreciation, depletion and amortization
|
2,205
|
|
|
1,779
|
|
||
Impairments
|
49
|
|
|
271
|
|
||
Pension and other postretirement benefits, net
|
41
|
|
|
(56
|
)
|
||
Exploratory dry well costs and unproved property impairments
|
619
|
|
|
287
|
|
||
Net loss (gain) on disposal of assets
|
4
|
|
|
(126
|
)
|
||
Equity method investments, net
|
12
|
|
|
(14
|
)
|
||
Changes in:
|
|
|
|
|
|||
Current receivables
|
(151
|
)
|
|
(646
|
)
|
||
Inventories
|
(8
|
)
|
|
(6
|
)
|
||
Current accounts payable and accrued liabilities
|
(286
|
)
|
|
156
|
|
||
All other operating, net
|
161
|
|
|
(66
|
)
|
||
Net cash provided by operating activities
|
4,041
|
|
|
2,812
|
|
||
Investing activities:
|
|
|
|
|
|
||
Acquisitions, net of cash acquired
|
(74
|
)
|
|
(806
|
)
|
||
Additions to property, plant and equipment
|
(3,818
|
)
|
|
(3,509
|
)
|
||
Disposal of assets
|
402
|
|
|
193
|
|
||
Investments - return of capital
|
45
|
|
|
42
|
|
||
All other investing, net
|
34
|
|
|
49
|
|
||
Net cash used in investing activities
|
(3,411
|
)
|
|
(4,031
|
)
|
||
Financing activities:
|
|
|
|
|
|
||
Commercial paper, net
|
—
|
|
|
1,839
|
|
||
Debt issuance costs
|
—
|
|
|
(9
|
)
|
||
Debt repayments
|
(148
|
)
|
|
(111
|
)
|
||
Purchases of common stock
|
(500
|
)
|
|
—
|
|
||
Dividends paid
|
(376
|
)
|
|
(360
|
)
|
||
All other financing, net
|
70
|
|
|
26
|
|
||
Net cash (used in) provided by financing activities
|
(954
|
)
|
|
1,385
|
|
||
Effect of exchange rate changes on cash
|
(6
|
)
|
|
12
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(330
|
)
|
|
178
|
|
||
Cash and cash equivalents at beginning of period
|
684
|
|
|
493
|
|
||
Cash and cash equivalents at end of period
|
$
|
354
|
|
|
$
|
671
|
|
|
Three Months Ended September 30,
|
||||||||||||||
|
2013
|
|
2012
|
||||||||||||
(In millions, except per share data)
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income
|
$
|
569
|
|
|
$
|
569
|
|
|
$
|
450
|
|
|
$
|
450
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
707
|
|
|
707
|
|
|
706
|
|
|
706
|
|
||||
Effect of dilutive securities
|
—
|
|
|
4
|
|
|
—
|
|
|
3
|
|
||||
Weighted average common shares, including
|
|
|
|
|
|
|
|
||||||||
dilutive effect
|
707
|
|
|
711
|
|
|
706
|
|
|
709
|
|
||||
Per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
$0.80
|
|
|
|
$0.80
|
|
|
|
$0.64
|
|
|
|
$0.63
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
2013
|
|
2012
|
||||||||||||
(In millions, except per share data)
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income
|
$
|
1,378
|
|
|
$
|
1,378
|
|
|
$
|
1,260
|
|
|
$
|
1,260
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
708
|
|
|
708
|
|
|
705
|
|
|
705
|
|
||||
Effect of dilutive securities
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Weighted average common shares, including
|
|
|
|
|
|
|
|
||||||||
dilutive effect
|
708
|
|
|
712
|
|
|
705
|
|
|
709
|
|
||||
Per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
$1.95
|
|
$1.94
|
|
$1.79
|
|
$1.78
|
•
|
North America E&P ("N.A. E&P") – explores for, produces and markets liquid hydrocarbons and natural gas in North America;
|
•
|
International E&P ("Int'l E&P") – explores for, produces and markets liquid hydrocarbons and natural gas outside of North America and produces and markets products manufactured from natural gas, such as liquefied natural gas ("LNG")and methanol, in Equatorial Guinea; and
|
•
|
Oil Sands Mining (“OSM”) – mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil.
|
|
Three Months Ended September 30, 2013
|
||||||||||||||
(In millions)
|
N.A. E&P
|
|
Int'l E&P
|
|
OSM
|
|
Total
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales and other operating revenues
|
$
|
1,321
|
|
|
$
|
1,396
|
|
|
$
|
463
|
|
|
$
|
3,180
|
|
Marketing revenues
|
607
|
|
|
58
|
|
|
3
|
|
|
668
|
|
||||
Segment revenues
|
$
|
1,928
|
|
|
$
|
1,454
|
|
|
$
|
466
|
|
|
3,848
|
|
|
Unrealized loss on crude oil derivative instruments
|
|
|
|
|
|
|
(61
|
)
|
|||||||
Total revenues
|
|
|
|
|
|
|
$
|
3,787
|
|
||||||
Segment income
|
$
|
242
|
|
|
$
|
321
|
|
|
$
|
106
|
|
|
$
|
669
|
|
Income from equity method investments
|
—
|
|
|
114
|
|
|
—
|
|
|
114
|
|
||||
Depreciation, depletion and amortization
|
490
|
|
|
179
|
|
|
54
|
|
|
723
|
|
||||
Income tax provision
|
143
|
|
|
714
|
|
|
35
|
|
|
892
|
|
||||
Capital expenditures
|
831
|
|
|
254
|
|
|
65
|
|
|
1,150
|
|
|
Three Months Ended September 30, 2012
|
||||||||||||||
(In millions)
|
N.A. E&P
|
|
Int'l E&P
|
|
OSM
|
|
Total
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales and other operating revenues
|
$
|
993
|
|
|
$
|
1,907
|
|
|
$
|
460
|
|
|
$
|
3,360
|
|
Marketing revenues
|
548
|
|
|
73
|
|
|
10
|
|
|
631
|
|
||||
Segment revenues
|
$
|
1,541
|
|
|
$
|
1,980
|
|
|
$
|
470
|
|
|
3,991
|
|
|
Unrealized gain on crude oil derivative instruments
|
|
|
|
|
|
|
45
|
|
|||||||
Total revenues
|
|
|
|
|
|
|
$
|
4,036
|
|
||||||
Segment income
|
$
|
107
|
|
|
$
|
405
|
|
|
$
|
66
|
|
|
$
|
578
|
|
Income from equity method investments
|
1
|
|
|
121
|
|
|
—
|
|
|
122
|
|
||||
Depreciation, depletion and amortization
|
360
|
|
|
194
|
|
|
60
|
|
|
614
|
|
||||
Income tax provision
|
66
|
|
|
1,219
|
|
|
20
|
|
|
1,305
|
|
||||
Capital expenditures
|
1,045
|
|
|
229
|
|
|
41
|
|
|
1,315
|
|
|
Nine Months Ended September 30, 2013
|
||||||||||||||
(In millions)
|
N.A. E&P
|
|
Int'l E&P
|
|
OSM
|
|
Total
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales and other operating revenues
|
$
|
3,820
|
|
|
$
|
5,015
|
|
|
$
|
1,204
|
|
|
$
|
10,039
|
|
Marketing revenues
|
1,391
|
|
|
194
|
|
|
12
|
|
|
1,597
|
|
||||
Segment revenues
|
$
|
5,211
|
|
|
$
|
5,209
|
|
|
$
|
1,216
|
|
|
11,636
|
|
|
Unrealized loss on crude oil derivative instruments
|
|
|
|
|
|
|
(61
|
)
|
|||||||
Total revenues
|
|
|
|
|
|
|
$
|
11,575
|
|
||||||
Segment income
|
$
|
404
|
|
|
$
|
1,156
|
|
|
$
|
164
|
|
|
$
|
1,724
|
|
Income from equity method investments
|
—
|
|
|
309
|
|
|
—
|
|
|
309
|
|
||||
Depreciation, depletion and amortization
|
1,458
|
|
|
575
|
|
|
154
|
|
|
2,187
|
|
||||
Income tax provision
|
242
|
|
|
2,860
|
|
|
55
|
|
|
3,157
|
|
||||
Capital expenditures
|
2,705
|
|
|
720
|
|
|
207
|
|
|
3,632
|
|
|
Nine Months Ended September 30, 2012
|
||||||||||||||
(In millions)
|
N.A. E&P
|
|
Int'l E&P
|
|
OSM
|
|
Total
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales and other operating revenues
|
$
|
2,738
|
|
|
$
|
5,383
|
|
|
$
|
1,158
|
|
|
$
|
9,279
|
|
Marketing revenues
|
2,019
|
|
|
193
|
|
|
25
|
|
|
2,237
|
|
||||
Segment revenues
|
$
|
4,757
|
|
|
$
|
5,576
|
|
|
$
|
1,183
|
|
|
11,516
|
|
|
Unrealized gain on crude oil derivative instruments
|
|
|
|
|
|
|
45
|
|
|||||||
Total revenues
|
|
|
|
|
|
|
$
|
11,561
|
|
||||||
Segment income
|
$
|
281
|
|
|
$
|
1,185
|
|
|
$
|
154
|
|
|
$
|
1,620
|
|
Income from equity method investments
|
2
|
|
|
258
|
|
|
—
|
|
|
260
|
|
||||
Depreciation, depletion and amortization
|
964
|
|
|
622
|
|
|
159
|
|
|
1,745
|
|
||||
Income tax provision
|
166
|
|
|
3,260
|
|
|
50
|
|
|
3,476
|
|
||||
Capital expenditures
|
2,887
|
|
|
569
|
|
|
136
|
|
|
3,592
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Total revenues
|
$
|
3,787
|
|
$
|
4,036
|
|
$
|
11,575
|
|
$
|
11,561
|
|
Less: Marketing revenues
|
668
|
|
631
|
|
1,597
|
|
2,237
|
|
||||
Sales and other operating revenues, including related party
|
$
|
3,119
|
|
$
|
3,405
|
|
$
|
9,978
|
|
$
|
9,324
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Segment income
|
$
|
669
|
|
$
|
578
|
|
$
|
1,724
|
|
$
|
1,620
|
|
Items not allocated to segments, net of income taxes:
|
|
|
|
|
|
|
|
|
||||
Corporate and other unallocated items
|
(61
|
)
|
(146
|
)
|
(288
|
)
|
(294
|
)
|
||||
Unrealized gain (loss) on crude oil derivative instruments
|
(39
|
)
|
29
|
|
(39
|
)
|
29
|
|
||||
Net gain (loss) on dispositions
|
—
|
|
(11
|
)
|
(9
|
)
|
72
|
|
||||
Impairments
|
—
|
|
—
|
|
(10
|
)
|
(167
|
)
|
||||
Net income
|
$
|
569
|
|
$
|
450
|
|
$
|
1,378
|
|
$
|
1,260
|
|
|
Three Months Ended September 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Service cost
|
$
|
14
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
16
|
|
|
16
|
|
|
3
|
|
|
4
|
|
||||
Expected return on plan assets
|
(17
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
– prior service cost (credit)
|
2
|
|
|
2
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
– actuarial loss
|
9
|
|
|
12
|
|
|
—
|
|
|
—
|
|
||||
Net settlement loss
(a)
|
15
|
|
|
34
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
39
|
|
|
$
|
62
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
Nine months Ended September 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Service cost
|
$
|
42
|
|
|
$
|
37
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
47
|
|
|
48
|
|
|
9
|
|
|
11
|
|
||||
Expected return on plan assets
|
(50
|
)
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
– prior service cost (credit)
|
5
|
|
|
6
|
|
|
(5
|
)
|
|
(5
|
)
|
||||
– actuarial loss
|
38
|
|
|
37
|
|
|
—
|
|
|
—
|
|
||||
Net settlement loss
(a)
|
32
|
|
|
34
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
114
|
|
|
$
|
116
|
|
|
$
|
7
|
|
|
$
|
9
|
|
|
September 30,
|
|
December 31,
|
||||
(In millions)
|
2013
|
|
2012
|
||||
Liquid hydrocarbons, natural gas and bitumen
|
$
|
46
|
|
|
$
|
73
|
|
Supplies and other items
|
314
|
|
|
288
|
|
||
Inventories, at cost
|
$
|
360
|
|
|
$
|
361
|
|
|
September 30,
|
|
December 31,
|
||||
(In millions)
|
2013
|
|
2012
|
||||
North America E&P
|
$
|
25,858
|
|
|
$
|
23,748
|
|
International E&P
|
12,342
|
|
|
13,214
|
|
||
Oil Sands Mining
|
10,337
|
|
|
10,127
|
|
||
Corporate
|
456
|
|
|
449
|
|
||
Total property, plant and equipment
|
48,993
|
|
|
47,538
|
|
||
Less accumulated depreciation, depletion and amortization
|
(21,171
|
)
|
|
(19,266
|
)
|
||
Net property, plant and equipment
|
$
|
27,822
|
|
|
$
|
28,272
|
|
|
September 30, 2013
|
||||||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Collateral
|
|
Total
|
||||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Interest rate
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Foreign currency
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Derivative instruments, assets
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Foreign currency
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Derivative instruments, liabilities
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28
|
|
|
December 31, 2012
|
||||||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Collateral
|
|
Total
|
||||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity
|
$
|
—
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
53
|
|
Interest rate
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Foreign currency
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||
Derivative instruments, assets
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
92
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
2013
|
|
2012
|
||||||||||||
(In millions)
|
Fair Value
|
|
Impairment
|
|
Fair Value
|
|
Impairment
|
||||||||
Long-lived assets held for use
|
$
|
5
|
|
|
$
|
49
|
|
|
$
|
77
|
|
|
$
|
271
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||
|
Fair
|
|
Carrying
|
|
Fair
|
|
Carrying
|
||||||||
(In millions)
|
Value
|
|
Amount
|
|
Value
|
|
Amount
|
||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Other noncurrent assets
|
$
|
168
|
|
|
$
|
165
|
|
|
$
|
189
|
|
|
$
|
186
|
|
Total financial assets
|
168
|
|
|
165
|
|
|
189
|
|
|
186
|
|
||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current liabilities
|
13
|
|
|
13
|
|
|
13
|
|
|
13
|
|
||||
Long-term debt, including current portion
(a)
|
6,941
|
|
|
6,461
|
|
|
7,610
|
|
|
6,642
|
|
||||
Deferred credits and other liabilities
|
164
|
|
|
161
|
|
|
94
|
|
|
94
|
|
||||
Total financial liabilities
|
$
|
7,118
|
|
|
$
|
6,635
|
|
|
$
|
7,717
|
|
|
$
|
6,749
|
|
|
September 30, 2013
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset
|
|
Balance Sheet Location
|
||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
||||||
Foreign currency
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Other current assets
|
Interest rate
|
11
|
|
|
—
|
|
|
11
|
|
|
Other noncurrent assets
|
|||
Total Designated Hedges
|
12
|
|
|
—
|
|
|
12
|
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
5
|
|
|
—
|
|
|
5
|
|
|
Other current assets
|
|||
Total Not Designated as Hedges
|
5
|
|
|
—
|
|
|
5
|
|
|
|
|||
Total
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
|
|
September 30, 2013
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Liability
|
|
Balance Sheet Location
|
||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
||||||
Foreign currency
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
Other current liabilities
|
Total Designated Hedges
|
—
|
|
|
14
|
|
|
14
|
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
—
|
|
|
14
|
|
|
14
|
|
|
Other current liabilities
|
|||
Total Not Designated as Hedges
|
—
|
|
|
14
|
|
|
14
|
|
|
|
|||
Total
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
28
|
|
|
|
|
December 31, 2012
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset
|
|
Balance Sheet Location
|
||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
||||||
Foreign currency
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
Other current assets
|
Interest rate
|
21
|
|
|
—
|
|
|
21
|
|
|
Other noncurrent assets
|
|||
Total Designated Hedges
|
39
|
|
|
—
|
|
|
39
|
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
52
|
|
|
—
|
|
|
52
|
|
|
Other current assets
|
|||
Total Not Designated as Hedges
|
52
|
|
|
—
|
|
|
52
|
|
|
|
|||
Total
|
$
|
91
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
|
Maturity Dates
|
Aggregate Notional Amount
(in millions)
|
Weighted Average, LIBOR-Based, Floating Rate
|
|||
October 1, 2017
|
$
|
600
|
|
4.67
|
%
|
March 15, 2018
|
$
|
300
|
|
4.51
|
%
|
|
|
Gain (Loss)
|
||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
Income Statement Location
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Derivative
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
Net interest and other
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
(9
|
)
|
|
$
|
17
|
|
Foreign currency
|
Provision for income taxes
|
$
|
5
|
|
|
$
|
22
|
|
|
$
|
(41
|
)
|
|
$
|
(18
|
)
|
Hedged Item
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt
|
Net interest and other
|
$
|
(5
|
)
|
|
$
|
(6
|
)
|
|
$
|
9
|
|
|
$
|
(17
|
)
|
Accrued taxes
|
Provision for income taxes
|
$
|
(5
|
)
|
|
$
|
(22
|
)
|
|
$
|
41
|
|
|
$
|
18
|
|
Remaining Term
|
Bbls per Day
|
Weighted Average Price per Bbl
|
Benchmark
|
Swaps
|
|
|
|
October 2013 - December 2013
|
20,000
|
$96.29
|
West Texas Intermediate
|
October 2013 - December 2013
|
25,000
|
$109.19
|
Brent
|
Option Collars
|
|
|
|
October 2013 - December 2013
|
15,000
|
$90.00 floor / $101.17 ceiling
|
West Texas Intermediate
|
October 2013 - December 2013
|
15,000
|
$100.00 floor / $116.30 ceiling
|
Brent
|
|
|
Gain (Loss)
|
||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
Income Statement Location
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Commodity
|
Sales and other operating revenues, including related party
|
$
|
(86
|
)
|
|
$
|
45
|
|
|
$
|
(73
|
)
|
|
$
|
46
|
|
|
Stock Options
|
|
Restricted Stock
|
||||||||||
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Awards
|
|
Weighted
Average Grant
Date Fair Value
|
||||||
Outstanding at December 31, 2012
|
19,536,965
|
|
|
|
$26.19
|
|
|
4,177,884
|
|
|
|
$29.02
|
|
Granted
|
1,704,734
|
|
(a)
|
|
$33.30
|
|
|
1,254,935
|
|
|
|
$32.96
|
|
Options Exercised/Stock Vested
|
(2,098,887
|
)
|
|
|
$22.31
|
|
|
(1,609,730
|
)
|
|
|
$28.09
|
|
Canceled
|
(708,701
|
)
|
|
|
$34.01
|
|
|
(384,719
|
)
|
|
|
$29.91
|
|
Outstanding at September 30, 2013
|
18,434,111
|
|
|
|
$26.99
|
|
|
3,438,370
|
|
|
|
$30.80
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2013
|
|
2012
|
||||
Net cash provided from operating activities:
|
|
|
|
||||
Interest paid (net of amounts capitalized)
|
$
|
216
|
|
|
$
|
164
|
|
Income taxes paid to taxing authorities
|
3,218
|
|
|
3,457
|
|
||
Commercial paper, net:
|
|
|
|
|
|
||
Commercial paper - issuances
|
$
|
4,975
|
|
|
$
|
10,420
|
|
- repayments
|
(4,975
|
)
|
|
(8,581
|
)
|
||
Noncash investing activities:
|
|
|
|
|
|
||
Asset retirement costs capitalized
|
$
|
316
|
|
|
$
|
47
|
|
Debt payments made by United States Steel
|
—
|
|
|
19
|
|
||
Liabilities assumed in acquisition
|
—
|
|
|
85
|
|
||
Change in capital expenditure accrual
|
(129
|
)
|
|
170
|
|
||
Asset retirement obligations assumed by buyer
|
92
|
|
|
7
|
|
•
|
North America Exploration and Production ("E&P") – explores for, produces and markets liquid hydrocarbons and natural gas in North America;
|
•
|
International E&P – explores for, produces and markets liquid hydrocarbons and natural gas outside of North America and produces and markets products manufactured from natural gas, such as LNG and methanol, in Equatorial Guinea; and
|
•
|
Oil Sands Mining – mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil.
|
•
|
North America E&P net liquid hydrocarbon sales volumes
increase
d 35 percent over the same quarter of last year
|
•
|
Eagle Ford shale averaged net liquid hydrocarbon sales of 66 thousand barrels per day ("mbbld"), a 100 percent increase
|
•
|
Bakken shale averaged net liquid hydrocarbon sales of 36 mbbld, a 24 percent increase
|
•
|
Acquisition of 4,800 net acres in the core of the Eagle Ford shale in a transaction valued at $97 million including a carried interest
|
•
|
Labor strikes at Es Sider oil terminal in Libya since late July with no oil liftings in August or September
|
•
|
Norway turnaround completed in nine days, on time and on budget
|
•
|
Madagascar operated exploration well began drilling in deepwater Gulf of Mexico on De Soto Canyon Block 757
|
•
|
Agreement in principle reached to sell our working interest in Angola Block 32 with an anticipated transaction value of $590 million, excluding purchase price adjustments
|
•
|
First deepwater Gabon pre-salt discovery with the non-operated Diaman-1B exploration well
|
•
|
Dividend increased by 12 percent to 19 cents per share
|
•
|
14 million common shares repurchased for $500 million at an average price of $35.53 per share
|
•
|
Announced receipt of approval from the Kurdistan Regional Government for the first phase in the oil development of the Atrush Block in the Kurdistan Region of Iraq
|
•
|
Announced Mirawa-1 oil and natural gas discovery on our operated Harir block in the Kurdistan Region of Iraq
|
•
|
High bidder as operator on two deepwater blocks in the pre-salt play offshore Gabon: G13 and E12, which is subject to government approvals and negotiation of the exploration and production sharing contracts
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||
Benchmark
|
2013
|
2012
|
2013
|
2012
|
||||
West Texas Intermediate ("WTI") crude oil
(Dollars per barrel)
|
|
$105.81
|
|
|
$92.20
|
|
$98.20
|
$96.16
|
Brent (Europe) crude oil
(Dollars per barrel)
|
|
$110.27
|
|
|
$109.61
|
|
$108.45
|
$112.17
|
Henry Hub natural gas (
Dollars per million British thermal units ("mmbtu"
))
(a)
|
|
$3.58
|
|
|
$2.81
|
|
$3.65
|
$2.59
|
(a)
|
Settlement date average.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||
Benchmark
|
2013
|
2012
|
2013
|
2012
|
||||||
WTI crude oil
(Dollars per barrel)
|
|
$105.81
|
|
|
$92.20
|
|
$98.20
|
$96.16
|
||
WCS crude oil
(Dollars per barrel)
(a)
|
|
$88.35
|
|
|
$70.49
|
|
$75.27
|
|
$74.21
|
|
AECO natural gas sales index
(Dollars per mmbtu)
(b)
|
|
$2.35
|
|
|
$2.27
|
|
$2.99
|
|
$2.03
|
|
(a)
|
Monthly pricing based upon average WTI adjusted for differentials unique to western Canada.
|
(b)
|
Monthly average AECO day ahead index.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Sales and other operating revenues, including related party:
|
|
|
|
|
||||||||
North America E&P
|
$
|
1,321
|
|
$
|
993
|
|
$
|
3,820
|
|
$
|
2,738
|
|
International E&P
|
1,396
|
|
1,907
|
|
5,015
|
|
5,383
|
|
||||
Oil Sands Mining
|
463
|
|
460
|
|
1,204
|
|
1,158
|
|
||||
Segment sales and other operating revenues, including related party
|
$
|
3,180
|
|
$
|
3,360
|
|
$
|
10,039
|
|
$
|
9,279
|
|
Unrealized gain (loss) on crude oil derivative instruments
|
(61
|
)
|
45
|
|
(61
|
)
|
45
|
|
||||
Total sales and other operating revenues, including related party
|
$
|
3,119
|
|
$
|
3,405
|
|
$
|
9,978
|
|
$
|
9,324
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||
|
2013
|
2012
|
2013
|
2012
|
||||
North America E&P Operating Statistics
|
|
|
|
|
||||
Net liquid hydrocarbon sales volumes
(mbbld)
(a)
|
150
|
|
111
|
|
147
|
|
98
|
|
Liquid hydrocarbon average realizations
(per bbl)
(b) (c)
|
$90.49
|
$83.56
|
$87.09
|
$87.07
|
||||
Net crude oil and condensate sales volumes
(mbbld)
|
126
|
|
98
|
|
125
|
|
88
|
|
Crude oil and condensate average realizations
(per bbl)
(b)
|
$101.05
|
$89.89
|
$96.54
|
$92.00
|
||||
Net natural gas liquids sales volumes
(mbbld)
|
24
|
|
13
|
|
22
|
|
10
|
|
Natural gas liquids average realizations
(per bbl)
(b)
|
$35.01
|
$37.88
|
$34.06
|
$41.99
|
||||
|
|
|
|
|
||||
Net natural gas sales volumes
(mmcfd)
|
297
|
|
366
|
|
318
|
|
343
|
|
Natural gas average realizations
(per mcf)
(b)
|
$3.51
|
$3.61
|
$3.86
|
$3.73
|
(a)
|
Includes crude oil, condensate and natural gas liquids.
|
(b)
|
Excludes gains and losses on derivative instruments
|
(c)
|
Inclusion of realized gains (losses) on crude oil derivative instruments would have decreased average liquid hydrocarbon realizations by
$1.81
per bbl and
$0.30
per bbl for the
third quarter and first nine months of
of
2013
. There were no realized gains (losses) on crude oil derivative instruments in the
third quarter and first nine months of
of
2012
.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||
|
2013
|
2012
|
2013
|
2012
|
||||
International E&P Operating Statistics
|
|
|
|
|
||||
Net liquid hydrocarbon sales
volumes
(mbbld)
(a)
|
|
|
|
|
||||
Europe
|
81
|
|
94
|
|
91
|
|
97
|
|
Africa
|
57
|
|
88
|
|
73
|
|
73
|
|
Total International E&P
|
138
|
|
182
|
|
164
|
|
170
|
|
Liquid hydrocarbon average realizations
(per bbl)
|
|
|
|
|
||||
Europe
|
$113.73
|
$112.34
|
$112.12
|
$115.73
|
||||
Africa
|
$84.58
|
$98.65
|
$92.26
|
$97.00
|
||||
Total International E&P
|
$101.68
|
$105.71
|
$103.25
|
$107.69
|
||||
|
|
|
|
|
||||
Net natural gas sales volumes
(mmcfd)
|
|
|
|
|
||||
Europe
(b)
|
69
|
|
100
|
|
84
|
|
102
|
|
Africa
|
493
|
|
485
|
|
464
|
|
434
|
|
Total International E&P
|
562
|
|
585
|
|
548
|
|
536
|
|
Natural gas average realizations
(per mcf)
|
|
|
|
|
||||
Europe
|
$11.61
|
$10.10
|
$11.98
|
$10.05
|
||||
Africa
(c)
|
$0.59
|
$0.63
|
$0.53
|
$0.39
|
||||
Total International E&P
|
$1.95
|
$2.25
|
$2.29
|
$2.23
|
(a)
|
Includes crude oil, condensate and natural gas liquids. The amounts correspond with the basis for fiscal settlements with governments, representing equity tanker liftings and direct deliveries of liquid hydrocarbons.
|
(b)
|
Includes natural gas acquired for injection and subsequent resale of
4
mmcfd and
18
mmcfd for the
third quarter
s of
2013
and
2012
, and
8
mmcfd and
16
mmcfd for the
first nine months of
2013
and
2012
.
|
(c)
|
Primarily represents fixed prices under long-term contracts with Alba Plant LLC, AMPCO, and EGHoldings, equity method investees. We include our share of Alba Plant LLC's, AMPCO's and EGHoldings' income in our International E&P segment.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||
|
2013
|
2012
|
2013
|
2012
|
||||
Oil Sands Mining Operating Statistics
|
|
|
|
|
||||
Net synthetic crude oil sales volumes
(mbbld)
(a)
|
49
|
|
53
|
|
47
|
|
47
|
|
Synthetic crude oil average realizations
(per bbl)
|
$102.64
|
$81.13
|
$90.65
|
$83.58
|
(a)
|
Includes blendstocks.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
(In millions)
|
2013
|
2012
|
2013
|
2012
|
||||||||
Unproved property impairments
|
$
|
42
|
|
$
|
78
|
|
$
|
465
|
|
$
|
148
|
|
Dry well costs
|
83
|
|
35
|
|
154
|
|
139
|
|
||||
Geological and geophysical
|
9
|
|
30
|
|
48
|
|
104
|
|
||||
Other
|
19
|
|
27
|
|
84
|
|
86
|
|
||||
Total exploration expenses
|
$
|
153
|
|
$
|
170
|
|
$
|
751
|
|
$
|
477
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
($ per boe)
|
2013
|
2012
|
2013
|
2012
|
||||||||
DD&A rate
|
|
|
|
|
|
|
||||||
North America E&P
|
|
$27
|
|
|
$23
|
|
|
$27
|
|
|
$23
|
|
International E&P
|
|
$8
|
|
|
$8
|
|
|
$8
|
|
|
$9
|
|
Oil Sands Mining
|
|
$12
|
|
|
$13
|
|
|
$12
|
|
|
$13
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
North America E&P
|
$
|
242
|
|
|
$
|
107
|
|
|
$
|
404
|
|
|
$
|
281
|
|
International E&P
|
321
|
|
|
405
|
|
|
1,156
|
|
|
1,185
|
|
||||
Oil Sands Mining
|
106
|
|
|
66
|
|
|
164
|
|
|
154
|
|
||||
Segment income
|
669
|
|
|
578
|
|
|
1,724
|
|
|
1,620
|
|
||||
Items not allocated to segments, net of income taxes:
|
|
|
|
|
|
|
|
|
|
||||||
Corporate and other unallocated items
|
(61
|
)
|
|
(146
|
)
|
|
(288
|
)
|
|
(294
|
)
|
||||
Unrealized gain (loss) on crude oil derivative instruments
|
(39
|
)
|
|
29
|
|
|
(39
|
)
|
|
29
|
|
||||
Net gain (loss) on dispositions
|
—
|
|
|
(11
|
)
|
|
(9
|
)
|
|
72
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(167
|
)
|
||||
Net income
|
$
|
569
|
|
|
$
|
450
|
|
|
$
|
1,378
|
|
|
$
|
1,260
|
|
|
September 30,
|
|
December 31,
|
||||
(In millions)
|
2013
|
|
2012
|
||||
Commercial paper
|
$
|
200
|
|
|
$
|
200
|
|
Long-term debt due within one year
|
68
|
|
|
184
|
|
||
Long-term debt
|
6,433
|
|
|
6,512
|
|
||
Total debt
|
$
|
6,701
|
|
|
$
|
6,896
|
|
Cash
|
$
|
354
|
|
|
$
|
684
|
|
Equity
|
$
|
18,994
|
|
|
$
|
18,283
|
|
Calculation:
|
|
|
|
|
|
||
Total debt
|
$
|
6,701
|
|
|
$
|
6,896
|
|
Minus cash
|
354
|
|
|
684
|
|
||
Total debt minus cash
|
6,347
|
|
|
6,212
|
|
||
Total debt
|
6,701
|
|
|
6,896
|
|
||
Plus equity
|
18,994
|
|
|
18,283
|
|
||
Minus cash
|
354
|
|
|
684
|
|
||
Total debt plus equity minus cash
|
$
|
25,341
|
|
|
$
|
24,495
|
|
Cash-adjusted debt-to-capital ratio
|
25
|
%
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Incremental Change in IFO from a Hypothetical Price Increase of
|
|
Incremental Change in IFO from a Hypothetical Price Decrease of
|
||||||||||||
|
10%
|
|
25%
|
|
10%
|
|
25%
|
||||||||
Crude oil
|
|
|
|
|
|
|
|
||||||||
Swaps
|
$
|
43
|
|
|
$
|
108
|
|
|
$
|
(43
|
)
|
|
$
|
(108
|
)
|
Option Collars
|
(17
|
)
|
|
(55
|
)
|
|
14
|
|
|
50
|
|
||||
Total crude oil
|
$
|
26
|
|
|
$
|
53
|
|
|
$
|
(29
|
)
|
|
$
|
(58
|
)
|
(a)
|
Fair values of cash and cash equivalents, receivables, commercial paper, accounts payable and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table.
|
(b)
|
Fair value was based on market prices where available, or current borrowing rates for financings with similar terms and maturities.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In millions)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Segment Income
|
|
|
|
|
|
|
|
||||||||
North America E&P
|
$
|
242
|
|
|
$
|
107
|
|
|
$
|
404
|
|
|
$
|
281
|
|
International E&P
|
321
|
|
|
405
|
|
|
1,156
|
|
|
1,185
|
|
||||
Oil Sands Mining
|
106
|
|
|
66
|
|
|
164
|
|
|
154
|
|
||||
Segment income
|
669
|
|
|
578
|
|
|
1,724
|
|
|
1,620
|
|
||||
Items not allocated to segments, net of income taxes
|
(100
|
)
|
|
(128
|
)
|
|
(346
|
)
|
|
(360
|
)
|
||||
Net income
|
$
|
569
|
|
|
$
|
450
|
|
|
$
|
1,378
|
|
|
$
|
1,260
|
|
Capital Expenditures
(a)
|
|
|
|
|
|
|
|
|
|
||||||
North America E&P
|
$
|
831
|
|
|
$
|
1,045
|
|
|
$
|
2,705
|
|
|
$
|
2,887
|
|
International E&P
|
254
|
|
|
229
|
|
|
720
|
|
|
569
|
|
||||
Oil Sands Mining
|
65
|
|
|
41
|
|
|
207
|
|
|
136
|
|
||||
Corporate
|
12
|
|
|
24
|
|
|
57
|
|
|
87
|
|
||||
Total
|
$
|
1,162
|
|
|
$
|
1,339
|
|
|
$
|
3,689
|
|
|
$
|
3,679
|
|
Exploration Expenses
|
|
|
|
|
|
|
|
|
|
||||||
North America E&P
|
$
|
48
|
|
|
$
|
140
|
|
|
$
|
559
|
|
|
$
|
393
|
|
International E&P
|
105
|
|
|
30
|
|
|
192
|
|
|
84
|
|
||||
Total
|
$
|
153
|
|
|
$
|
170
|
|
|
$
|
751
|
|
|
$
|
477
|
|
(a)
|
Capital expenditures include changes in accruals.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
Net Sales Volumes
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
North America E&P
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Condensate
(mbbld)
|
126
|
|
|
98
|
|
|
125
|
|
|
88
|
|
Natural Gas Liquids
(mbbld)
|
24
|
|
|
13
|
|
|
22
|
|
|
10
|
|
Total Liquid Hydrocarbons
|
150
|
|
|
111
|
|
|
147
|
|
|
98
|
|
Natural Gas
(mmcfd)
|
297
|
|
|
366
|
|
|
318
|
|
|
343
|
|
Total North America E&P
(mboed)
|
200
|
|
|
172
|
|
|
200
|
|
|
155
|
|
|
|
|
|
|
|
|
|
||||
International E&P
|
|
|
|
|
|
|
|
|
|
||
Liquid Hydrocarbons
(mbbld)
|
|
|
|
|
|
|
|
||||
Europe
|
81
|
|
|
94
|
|
|
91
|
|
|
97
|
|
Africa
|
57
|
|
|
88
|
|
|
73
|
|
|
73
|
|
Total Liquid Hydrocarbons
|
138
|
|
|
182
|
|
|
164
|
|
|
170
|
|
Natural Gas
(mmcfd)
|
|
|
|
|
|
|
|
|
|||
Europe
(b)
|
69
|
|
|
100
|
|
|
84
|
|
|
102
|
|
Africa
|
493
|
|
|
485
|
|
|
464
|
|
|
434
|
|
Total Natural Gas
|
562
|
|
|
585
|
|
|
548
|
|
|
536
|
|
Total International E&P
(mboed)
|
231
|
|
|
280
|
|
|
255
|
|
|
259
|
|
|
|
|
|
|
|
|
|
||||
Oil Sands Mining
|
|
|
|
|
|
|
|
||||
Synthetic Crude Oil
(mbbld)
(c)
|
49
|
|
|
53
|
|
|
47
|
|
|
47
|
|
|
|
|
|
|
|
|
|
||||
Total Company
(mboed)
|
480
|
|
|
505
|
|
|
502
|
|
|
461
|
|
Net Sales Volumes of Equity Method Investees
|
|
|
|
|
|
|
|
|
|
||
LNG
(mtd)
|
7,302
|
|
|
7,065
|
|
|
6,638
|
|
|
6,277
|
|
Methanol
(mtd)
|
1,364
|
|
|
1,146
|
|
|
1,249
|
|
|
1,242
|
|
(b)
|
Includes natural gas acquired for injection and subsequent resale of
4
mmcfd and
18
mmcfd for the
third quarter
s of
2013
and
2012
, and
8
mmcfd and
16
mmcfd for the
first nine months of
2013
and
2012
.
|
(c)
|
Includes blendstocks.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
Average Realizations
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
North America E&P
|
|
|
|
|
|
|
|
||||
Crude Oil and Condensate
(per bbl)
|
|
$101.05
|
|
|
|
$89.89
|
|
|
$96.54
|
|
$92.00
|
Natural Gas Liquids
(per bbl)
|
|
$35.01
|
|
|
|
$37.88
|
|
|
$34.06
|
|
$41.99
|
Total Liquid Hydrocarbons
(d)
|
|
$90.49
|
|
|
|
$83.56
|
|
|
$87.09
|
|
$87.07
|
Natural Gas
(per mcf)
|
|
$3.51
|
|
|
|
$3.61
|
|
|
$3.86
|
|
$3.73
|
|
|
|
|
|
|
|
|
||||
International E&P
|
|
|
|
|
|
|
|
||||
Liquid Hydrocarbons
(per bbl)
|
|
|
|
|
|
|
|
||||
Europe
|
|
$113.73
|
|
|
|
$112.34
|
|
|
$112.12
|
|
$115.73
|
Africa
|
|
$84.58
|
|
|
|
$98.65
|
|
|
$92.26
|
|
$97.00
|
Total Liquid Hydrocarbons
|
|
$101.68
|
|
|
|
$105.71
|
|
|
$103.25
|
|
$107.69
|
Natural Gas
(per mcf)
|
|
|
|
|
|
|
|
||||
Europe
|
|
$11.61
|
|
|
|
$10.10
|
|
|
$11.98
|
|
$10.05
|
Africa
(e)
|
|
$0.59
|
|
|
|
$0.63
|
|
|
$0.53
|
|
$0.39
|
Total Natural Gas
|
|
$1.95
|
|
|
|
$2.25
|
|
|
$2.29
|
|
$2.23
|
|
|
|
|
|
|
|
|
||||
Oil Sands Mining
|
|
|
|
|
|
|
|
||||
Synthetic Crude Oil
(per bbl)
|
|
$102.64
|
|
|
|
$81.13
|
|
|
$90.65
|
|
$83.58
|
(d)
|
Inclusion of realized gains (losses) on crude oil derivative instruments would have decreased average liquid hydrocarbon realizations by
$1.81
per bbl and
$0.30
per bbl for the third quarter and
first nine months of
2013
. There were no realized gains (losses) on crude oil derivative instruments in the same periods of
2012
.
|
(e)
|
Primarily represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and Equatorial Guinea LNG Holdings Limited, which are equity method investees. We include our share of income from each of these equity method investees in our International E&P segment.
|
|
Column (a)
|
|
Column (b)
|
|
Column (c)
|
|
Column (d)
|
||
|
Total Number of
|
|
Average Price
|
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
|
||
Period
|
Shares Purchased
(a)(b)
|
|
Paid per Share
|
|
Plans or Programs
(c)
|
|
Plans or Programs
(c)
|
||
07/01/13 - 07/31/13
|
10,481
|
|
|
$35.24
|
|
—
|
|
|
$1,780,609,536
|
08/01/13 - 08/31/13
|
3,253
|
|
|
$37.18
|
|
—
|
|
|
$1,780,609,536
|
09/01/13 - 09/30/13
|
14,281,443
|
|
|
$35.53
|
|
14,066,840
|
|
|
$1,280,820,541
|
Total
|
14,295,177
|
|
|
$35.52
|
|
14,066,840
|
|
|
|
(a)
|
201,089 shares of restricted stock were delivered by employees to Marathon Oil, upon vesting, to satisfy tax withholding requirements.
|
(b)
|
In September 2013, 27,248 shares were repurchased in open-market transactions to satisfy the requirements for dividend reinvestment under the Marathon Oil Corporation Dividend Reinvestment and Direct Stock Purchase Plan (the “Dividend Reinvestment Plan”) by the administrator of the Dividend Reinvestment Plan. Shares needed to meet the requirements of the Dividend Reinvestment Plan are either purchased in the open market or issued directly by Marathon Oil.
|
(c)
|
We announced a share repurchase program in January 2006, and amended it several times in 2007 for a total authorized program of $5 billion. As of
September 30, 2013
, 92 million split-adjusted common shares had been acquired at a cost of $3,722 million, which includes transaction fees and commissions that are not reported in the table above. Of this total, 66 million shares had been acquired at a cost of $2,922 million prior to the spin-off of the downstream business.
|
|
|
|
|
Incorporated by Reference
|
|
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
SEC File No.
|
|
Filed Herewith
|
|
Furnished Herewith
|
10.1
|
|
Form of Initial CEO Option Grant Agreement granted under Marathon Oil Corporation’s 2012 Incentive Compensation Plan.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
10.2
|
|
Form of CEO Restricted Stock Agreement granted under Marathon Oil Corporation’s 2012 Incentive Compensation Plan (3-year prorata vesting).
|
|
|
|
|
|
|
|
|
|
X
|
|
|
10.3
|
|
Form of CEO Restricted Stock Award Agreement granted under Marathon Oil Corporation’s 2012 Incentive Compensation Plan (3-year cliff vesting).
|
|
|
|
|
|
|
|
|
|
X
|
|
|
10.4
|
|
Marathon Oil Corporation Bonus Agreement Upon Commencement of Employment for Lee M. Tillman.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
12.1
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
31.1
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
31.2
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
32.1
|
|
Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
32.2
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
November 6, 2013
|
|
MARATHON OIL CORPORATION
|
|
|
|
|
By:
|
/s/ Michael K. Stewart
|
|
|
Michael K. Stewart
|
|
|
Vice President, Finance and Accounting,
Controller and Treasurer
|
|
|
|
|
Incorporated by Reference
|
|
|
|
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
SEC File No.
|
|
Filed Herewith
|
|
Furnished Herewith
|
10.1
|
|
Form of Initial CEO Option Grant Agreement granted under Marathon Oil Corporation’s 2012 Incentive Compensation Plan.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
10.2
|
|
Form of CEO Restricted Stock Agreement granted under Marathon Oil Corporation’s 2012 Incentive Compensation Plan (3-year prorata vesting).
|
|
|
|
|
|
|
|
|
|
X
|
|
|
10.3
|
|
Form of CEO Restricted Stock Award Agreement granted under Marathon Oil Corporation’s 2012 Incentive Compensation Plan (3-year cliff vesting).
|
|
|
|
|
|
|
|
|
|
X
|
|
|
10.4
|
|
Marathon Oil Corporation Bonus Agreement Upon Commencement of Employment for Lee M. Tillman.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
12.1
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
31.1
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
31.2
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
32.1
|
|
Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
32.2
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
|
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X
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101.LAB
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XBRL Taxonomy Extension Label Linkbase.
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X
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase.
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X
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(i)
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the assignment to the Optionee of duties materially inconsistent with his position as President & Chief Executive Officer or a material diminution in the Optionee’s authority, duties, status or responsibilities, including a requirement that the Optionee report to a corporate officer or
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(ii)
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a material diminution by the Corporation in the Optionee’s rate of base salary;
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(iii)
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a material change in the geographic location at which the Optionee must perform services, specifically including the Corporation’s requirement that the Optionee to be based at a location in excess of fifty (50) miles from the location where the Optionee was based on the Grant Date; or
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(iv)
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a material diminution by the Corporation in the Optionee’s total compensation opportunity, including a material diminution resulting from the Optionee’s exclusion from or reduced participation in any of the Corporation’s employee benefit, incentive compensation, bonus, stock option and stock award plans, programs, policies, practices or arrangements in which officers of the Corporation participate, provided that no material diminution in the Optionee’s total compensation opportunity will be deemed to occur as long as the Optionee participates in such plans, programs, practices, policies or arrangements on the same level at which other corporate officers participate in such plans, programs, practices, policies or arrangements.
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1.
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Relationship to the Plan.
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2.
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Vesting and Forfeiture of Restricted Shares.
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(i)
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Participant’s termination of Employment due to death; or
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(ii)
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a Change in Control of the Corporation, provided that as of such Change in Control the Participant has been in continuous Employment since the Grant Date.
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(i)
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on or before the first anniversary of the Grant Date, then one-third of the Restricted Shares shall vest on the first anniversary of the Grant Date; one-third of the Restricted Shares shall vest on the second anniversary of the Grant Date; and all remaining Restricted Shares shall vest on the third anniversary of the Grant Date;
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(ii)
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after the first anniversary of the Grant Date but on or before the second anniversary of the Grant Date, then one-half of the remaining Restricted Shares shall vest on the second anniversary of the Grant Date; and all remaining Restricted Shares shall vest on the third anniversary of the Grant Date; or
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(iii)
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after the second anniversary of the Grant Date but on or before the third anniversary of the Grant Date, then all remaining Restricted Shares shall vest on the third anniversary of the Grant Date.
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(i)
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any person (as defined in Sections 13(d) and 14(d) of the Exchange Act) (a “Person”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation (not including in the amount of the securities beneficially owned by such person any such securities acquired directly from the Corporation or its affiliates) representing twenty percent (20%) or more of the combined voting power of the Corporation’s then outstanding voting securities; provided, however, that for purposes of this Plan the term “Person” shall not include (A) the Corporation or any of its subsidiaries,
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(ii)
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the following individuals cease for any reason to constitute a majority of the number of Directors then serving: individuals who, on the date hereof, constitute the Board and any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest including but not limited to a consent solicitation, relating to the election of Directors of the Corporation) whose appointment or election by the Board or nomination for election by the Corporation’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were Directors on the date hereof or whose appointment, election or nomination for election was previously so approved; or
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(iii)
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there is consummated a merger or consolidation of the Corporation or any direct or indirect subsidiary thereof with any other corporation, other than a merger or consolidation (an “Excluded Transaction”) which would result in the holders of the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving corporation or any parent thereof) at least 50% of the combined voting power of the voting securities of the entity surviving the merger or consolidation (or the parent of such surviving entity) immediately after such merger or consolidation, or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation, or there is consummated the sale or other disposition of all or substantially all of the Corporation’s assets.
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(i)
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the assignment to the Participant of duties materially inconsistent with his or her position as President & Chief Executive Officer or a material diminution in the Participant’s authority, duties, status or responsibilities, including a requirement that the Participant report to a corporate officer or employee instead of reporting directly to the Board;
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(ii)
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a material diminution by the Corporation in the Participant’s rate of base salary;
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(iii)
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a material change in the geographic location at which the Participant must perform services, specifically including a requirement that the Participant be based at a location in excess of fifty (50) miles from the location where the Participant was based on the Grant Date; or
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(iv)
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a material diminution by the Corporation in the Participant’s total compensation opportunity,
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1.
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Relationship to the Plan.
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2.
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Vesting and Forfeiture of Restricted Shares.
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(i)
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Participant’s termination of Employment due to death; or
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(ii)
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a Change in Control of the Corporation, provided that as of such Change in Control the Participant has been in continuous Employment since the Grant Date.
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(i)
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before the first anniversary of the Grant Date, then one-third of the Restricted Shares shall vest on the first anniversary of the Grant Date; one-third of the Restricted Shares shall vest on the second anniversary of the Grant Date; and all remaining Restricted Shares shall vest on the third anniversary of the Grant Date;
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(ii)
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on or after the first anniversary of the Grant Date but before the second anniversary of the Grant Date, on the effective date of the Participant’s Termination of Employment; one-half of the remaining Restricted Shares shall vest on the second anniversary of the Grant Date; and all remaining Restricted Shares shall vest on the third anniversary of the Grant Date; or
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(iii)
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on or after the second anniversary of the Grant Date but before the third anniversary of the Grant Date, then two-thirds of the Restricted Shares shall vest on the effective date of the Participant’s termination of Employment and all remaining Restricted Shares shall vest on the third anniversary of the Grant Date.
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(i)
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any person (as defined in Sections 13(d) and 14(d) of the Exchange Act) (a “Person”) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation (not including in the amount of the securities beneficially owned by such person any such securities acquired directly from the Corporation or its affiliates) representing twenty percent (20%) or more of the combined voting power of the Corporation’s then outstanding voting securities; provided, however, that for purposes of this Plan the term “Person” shall not include (A) the Corporation or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation; and provided, further, however, that for purposes of this paragraph (i), there shall be excluded any Person who becomes such a beneficial owner in connection with an Excluded Transaction (as defined in paragraph (iii) below);
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(ii)
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the following individuals cease for any reason to constitute a majority of the number of Directors then serving: individuals who, on the date hereof, constitute the Board and any
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(iii)
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there is consummated a merger or consolidation of the Corporation or any direct or indirect subsidiary thereof with any other corporation, other than a merger or consolidation (an “Excluded Transaction”) which would result in the holders of the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving corporation or any parent thereof) at least 50% of the combined voting power of the voting securities of the entity surviving the merger or consolidation (or the parent of such surviving entity) immediately after such merger or consolidation, or the stockholders of the Corporation approve a plan of complete liquidation of the Corporation, or there is consummated the sale or other disposition of all or substantially all of the Corporation’s assets.
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(i)
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the assignment to the Participant of duties materially inconsistent with his or her position as President & Chief Executive Officer or a material diminution in the Participant’s authority, duties, status or responsibilities, including a requirement that the Participant report to a corporate officer or employee instead of reporting directly to the Board;
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(ii)
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a material diminution by the Corporation in the Participant’s rate of base salary;
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(iii)
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a material change in the geographic location at which the Participant must perform services, specifically including a requirement that the Participant be based at a location in excess of fifty (50) miles from the location where the Participant was based on the Grant Date; or
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(iv)
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a material diminution by the Corporation in the Participant’s total compensation opportunity, including a material diminution resulting from the Participant’s exclusion from, or reduced participation in, any of the Corporation’s employee benefit, incentive compensation, bonus, stock option and stock award plans, programs, policies, practices or arrangements in which officers of the Corporation participate, provided that no material diminution in the Participant’s total compensation opportunity will be deemed to occur as long as the Participant participates in such plans, programs, practices, policies or arrangements on the same level at which other corporate officers participate in such plans, programs, practices, policies or arrangements.
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(i)
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prior to August 1, 2014, you will be obligated to repay the First Installment;
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(ii)
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prior to August 1, 2015, you will be obligated to repay the Second Installment and 50% of the First Installment; and
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(iii)
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prior to August 1, 2016, you will be obligated to repay the Third Installment.
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(i)
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your willful and continued failure to substantially perform your duties with Marathon (other than any such failure resulting from termination of your employment for Good Reason or any such failure resulting from your incapacity due to physical or mental illness), after a demand for substantial performance is delivered to you that specifically identifies the manner in which Marathon believes that you have not substantially performed your duties and you have failed to resume substantial performance of your duties on a continuous basis within fourteen (14) days of receiving such demand;
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(ii)
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your willfully engaging in conduct which is demonstrably and materially injurious to Marathon, monetarily or otherwise; or
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(iii)
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your conviction of a felony or conviction of a misdemeanor which impairs your ability substantially to perform your duties with Marathon. For purposes of this definition of Cause, no act, or failure to act, on your part shall be deemed “willful” unless done, or omitted to be done, by you not in good faith and without reasonable belief that the action or omission was in the best interest of Marathon.
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(i)
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the assignment to you of duties materially inconsistent with your position as President & Chief Executive Officer or a material diminution in your authority, duties, status or responsibilities, including a requirement that you report to a corporate officer or employee instead of reporting directly to the Board of Directors of Marathon;
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(ii)
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a material diminution by Marathon in your rate of base salary;
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(iii)
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a material change in the geographic location at which you must perform services, specifically including a requirement that you be based at a location in excess of fifty (50) miles from the location where you were based on August 1, 2013; or
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(iv)
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a material diminution by Marathon in your total compensation opportunity, including a material diminution resulting from your exclusion from, or reduced participation in, any of Marathon’s employee benefit, incentive compensation, bonus, stock option and stock award plans, programs, policies, practices or arrangements in which officers of Marathon participate, provided that no material diminution in your total compensation opportunity will be deemed to occur as long as you participate in such plans, programs, practices, policies or arrangements on the same level at which other corporate officers participate in such plans, programs, practices, policies or arrangements.
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Nine Months Ended
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(In millions)
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September 30,
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2013
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2012
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Portion of rentals representing interest,
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including discontinued operations
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$
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26
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$
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17
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Capitalized interest,
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including discontinued operations
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19
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52
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Other interest and fixed charges,
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including discontinued operations
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222
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172
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Total fixed charges (A)
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$
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267
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$
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241
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Earnings-pretax income with
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applicable adjustments (B)
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$
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4,541
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$
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4,705
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Ratio of (B) to (A)
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17.01
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19.52
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1.
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I have reviewed this report on Form 10-Q of Marathon Oil Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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November 6, 2013
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/s/ Lee M. Tillman
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Lee M. Tillman
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President and Chief Executive Officer
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1.
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I have reviewed this report on Form 10-Q of Marathon Oil Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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November 6, 2013
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/s/ John R. Sult
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John R. Sult
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Executive Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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November 6, 2013
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/s/ Lee M. Tillman
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Lee M. Tillman
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President and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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November 6, 2013
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/s/ John R. Sult
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John R. Sult
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Executive Vice President and Chief Financial Officer
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