0000912057-01-536777.txt : 20011030
0000912057-01-536777.hdr.sgml : 20011030
ACCESSION NUMBER: 0000912057-01-536777
CONFORMED SUBMISSION TYPE: 6-K
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011025
FILED AS OF DATE: 20011026
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUNCOR ENERGY INC
CENTRAL INDEX KEY: 0000311337
STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911]
STATE OF INCORPORATION: A0
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 6-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-12384
FILM NUMBER: 1767877
BUSINESS ADDRESS:
STREET 1: 112 4TH AVENUE SW PO BOX 38
STREET 2: CALGARY ALBERTA
CITY: CANADA T2P 2V5
STATE: A0
BUSINESS PHONE: 4032698100
MAIL ADDRESS:
STREET 1: 112 FOURTH AVE SW BOX 38
STREET 2: CALGARY ALBERTA
CITY: CANADA T2P 2V5
FORMER COMPANY:
FORMER CONFORMED NAME: GREAT CANADIAN OIL SANDS & SUN OIL CO LTD
DATE OF NAME CHANGE: 19791129
FORMER COMPANY:
FORMER CONFORMED NAME: SUNCOR INC
DATE OF NAME CHANGE: 19970430
6-K
1
a2061916z6-k.txt
FORM 6-K
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of: October 2001 Commission File Number: 1-12384
SUNCOR ENERGY INC.
(Name of registrant)
112 FOURTH AVENUE S.W.
P.O. BOX 38
CALGARY, ALBERTA, CANADA, T2P 2V5
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F Form 40-F X
------- -------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the SEC
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
------- -------
If "Yes" is marked, indicate the number assigned to the registrant in connection
with Rule 12g3-2(b):
N/A
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT
--------------------------------------------------------------------------------
EXHIBIT 1 3RD QUARTER REPORT TO SHAREHOLDERS, INCLUDING THE
INTERIM MANAGEMENT'S DISCUSSION AND ANALYSIS AND
FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER
30, 2001
EXHIBIT 1
FOR IMMEDIATE RELEASE
OCTOBER 24, 2001
Third Quarter 2001 (For the period ended September 30, 2001)
SUNCOR ENERGY GROWTH STRATEGY ON TRACK
PROJECT MILLENNIUM PRODUCES OIL
THIRD QUARTER SUMMARY
ALL FINANCIAL FIGURES ARE IN CANADIAN DOLLARS UNLESS NOTED OTHERWISE. NATURAL
GAS CONVERTS TO BARRELS OF OIL EQUIVALENT AT A 6:1 RATIO (SIX MILLION CUBIC
FEET OF NATURAL GAS CONVERTS TO ONE BARREL OF OIL EQUIVALENT). THE FOLLOWING
SUMMARY IS QUALIFIED BY THE MANAGEMENT'S DISCUSSION & ANALYSIS.
- Third quarter net earnings were $73 million, up from $50 million in the
third quarter of 2000. Cash flow from operations for the quarter was $177
million, compared with $229 million during the same period last year.
- Net earnings for the first nine months of 2001 were $362 million, compared
with net earnings of $266 million for the same period in 2000. Cash flow
from operations for the first nine months of 2001 was $698 million,
compared with $742 million during the same period in 2000.
- Suncor's production during the third quarter averaged 149,700 barrels of
oil equivalent (BOE) per day, compared with 153,900 BOE per day during the
same period last year. The nine-month production average was 146,400 BOE
per day, compared with 157,800 BOE per day during the same period in 2000.
- Project Millennium construction is nearly complete and commissioning of all
the new facilities is on schedule.
- On October 17 oil was produced for the first time from the new upgrader.
This marked an important milestone in the commissioning of the project and
Suncor's goal to increase oil production capacity to 225,000 barrels per
day by year-end.
- During the quarter Suncor issued $500 million of 10-year Medium Term Notes,
which was applied to repay existing borrowings.
DECLINING COMMODITY PRICES IMPACTS THIRD QUARTER OPERATIONAL EARNINGS
Suncor Energy Inc. reported third quarter net earnings of $73 million, up from
$50 million in the third quarter of 2000. Operational earnings for the quarter
were $100 million, compared to operational earnings of $111 million in the third
quarter of 2000.
Cash flow from operations for the quarter was $177 million, compared with $229
million during the same period last year. Operational cash flow in the quarter
was $238 million compared to $252 million during the third quarter of 2000.
Net earnings for the first nine months of 2001 were $362 million, compared with
net earnings of $266 million for the same period in 2000. Year-to-date
operational earnings were $363 million compared to operational earnings of $306
million for the same period last year.
Cash flow from operations for the first nine months of 2001 was $698 million,
compared with $742 million during the same period last year. Year-to-date
operational cash flow was $819 million, compared to $773 million for the same
period last year.
Suncor's production during the third quarter averaged 149,700 barrels of oil
equivalent (BOE) per day, compared with 153,900 BOE per day the year before. The
nine-month production average for 2001 was 146,400 BOE per day, compared with
157,800 BOE per day during the same period in 2000. The decline in production
was due to a nine-day maintenance shutdown at Oil Sands during the second
quarter and property divestments in Natural Gas last year.
"The decline in commodity prices can be seen in our operational earnings for the
quarter," said Rick George, president and chief executive officer. "But Suncor
is focused on a strategy to deliver shareholder value for the long term. Through
increased production and lower operating costs our plan is to consistently
deliver improved results even through changes in market cycles."
PROJECT MILLENNIUM PRODUCES OIL
Suncor's growth plan hit a significant milestone on October 17 when portions of
the new upgrader, built as part of Project Millennium, produced oil for the
first time.
"During the past three months, Suncor reached a variety of operational
achievements almost every day. Mining and extraction were the first to cross the
finish line when our new plants processed the first oil sands ore from the
Millennium mine," said George. "But it was when we produced the first oil from
the upgrading plants' cokers that we celebrated that Project Millennium's
construction phase had nearly ended and a new beginning of expanded production
for Suncor was underway."
Project Millennium commissioning will continue for the balance of the year with
a goal of increasing production capacity to 225,000 barrels per day by 2002.
"Although first oil production is an important step, we're still focused on
wrapping up construction and working towards completing all plant
commissioning," said George. "Steady, reliable production is our goal as we work
to provide an additional 40 million barrels per year of oil to the North
American energy market.
"Over the next few months we can expect some challenges and most likely, some
volatility in production. However, we're on the home stretch for achieving our
growth plans and our vision of doubling oil production."
2
MANAGEMENT'S DISCUSSION AND ANALYSIS - SEPTEMBER 30, 2001
ALL FINANCIAL FIGURES ARE IN CANADIAN DOLLARS UNLESS NOTED OTHERWISE. NATURAL
GAS CONVERTS TO BARRELS OF OIL EQUIVALENT AT A 6:1 RATIO (SIX MILLION CUBIC FEET
OF NATURAL GAS CONVERTS TO ONE BARREL OF OIL EQUIVALENT).
This Management Discussion and Analysis should be read in conjunction with the
attached September 30, 2001 unaudited consolidated statements of earnings,
consolidated statements of changes in shareholders' equity, consolidated balance
sheets, consolidated statements of cash flows and notes to the consolidated
financial statements. Readers should also refer to Suncor's 2000 Management's
Discussion and Analysis ("Annual MD&A") on pages 28-53 of Suncor's 2000 Annual
Report, Suncor's 2000 Annual Information Form ("2000 AIF") and the first and
second quarter shareholder reports issued this year.
---------------------------------------------------------------------------------------------------------------------
Industry Indicators 3 MONTHS ENDED 3 months 9 MONTHS ENDED 9 months
(Average for the period) SEPT. 2001 ended Sept. 30, SEPT. 30, 2001 ended Sept. 30,
2000 2000
---------------------------------------------------------------------------------------------------------------------
West Texas Intermediate (WTI) 26.50 31.60 27.70 29.65
crude oil U.S.$/barrel at
Cushing
---------------------------------------------------------------------------------------------------------------------
Light/heavy crude oil 6.90 5.40 9.75 4.80
differential U.S.$/barrel -
WTI @ Cushing/Bow River @
Hardisty
---------------------------------------------------------------------------------------------------------------------
Natural gas U.S.$/thousand 3.00 4.30 5.00 3.40
cubic feet @ Henry Hub
---------------------------------------------------------------------------------------------------------------------
Natural gas (Alberta spot) 3.70 5.00 6.90 3.00
Cdn$/thousand cubic feet @
Empress
---------------------------------------------------------------------------------------------------------------------
New York Harbour 3-2-1 crack* 3.85 5.70 5.10 5.35
U.S.$/barrel
---------------------------------------------------------------------------------------------------------------------
Exchange rate: Cdn$:U.S.$ 0.65 0.68 0.65 0.68
---------------------------------------------------------------------------------------------------------------------
* New York Harbour 3-2-1 crack is an industry indicator measuring the margin on a barrel of oil for
gasoline and distillate.
---------------------------------------------------------------------------------------------------------------------
Suncor's future financial performance is closely linked to the above price and
exchange factors. Suncor cannot control the above price and exchange factors and
as such cannot predict any future changes. Future financial performance may be
volatile.
3
ANALYSIS OF CONSOLIDATED STATEMENTS OF EARNINGS AND CASH FLOW
Net earnings for the quarter were $73 million, compared to $50 million for the
third quarter of 2000. Operational earnings for the quarter were $100 million,
compared to operational earnings of $111 million during the third quarter of
2000. The $11 million decrease in operational earnings was primarily due to
weaker commodity prices and margins that reduced earnings in all of Suncor's
operating businesses. The weakening demand for oil and natural gas along with
higher supply have reduced commodity prices and downstream margins. In addition,
lower foreign exchange gains and higher operating costs also had an unfavourable
impact on earnings.
The negative impact of lower commodity prices was partially offset by lower
hedging losses, lower Alberta crown royalties with respect to Oil Sands sales
and a weaker Canadian dollar versus the U.S. dollar.
Operational cash flow in the third quarter was $238 million, compared to $252
million in the same period of 2000. The decrease was primarily due to reduced
earnings.
Net earnings for the first nine months of 2001 were $362 million, compared to
$266 million for the same nine-month period in 2000. Year-to-date operational
earnings in 2001 were $363 million, compared to $306 million during the first
nine months of 2000. The $57 million increase in operational earnings in the
first nine months of 2001 was primarily due to improved commodity prices and
margins, lower crude oil hedging losses, lower exploration expenses, lower
Alberta crown royalties and a weaker Canadian dollar versus the U.S. dollar.
Partially offsetting these factors were lower upstream sales volumes, higher
operating expenses, widening of light/heavy crude oil differential, lower
foreign exchange gains and higher interest expenses.
Year-to-date operational cash flow was $819 million, compared to $773 million
for the same period of 2000. Year-to-date operational cash flow for 2001 was
higher compared to 2000 because of increased earnings and the favourable income
tax impact as a result of the sale of the company's interest in the Stuart Oil
Shale Project. These benefits were partially reduced by the recognition of the
estimated payment in 2002 under Suncor's long-term employee compensation
programs. The final payout under these compensation programs will be based on
the market price of Suncor's shares in 2002 and in some cases, achieving certain
performance targets in 2001. As such, the final payout is subject to measurement
uncertainty and volatility in both earnings and the ultimate cash payment. For
reporting purposes the payouts have been allocated among the company's business
units, with the exception of the estimated payouts to senior executives that
have been allocated to the Corporate segment.
4
----------------------------------------------------------------------------------------------------------------------
Income Tax rate Changes - 2001
----------------------------------------------------------------------------------------------------------------------
Impact of income tax rate reductions for Oil Sands Natural Gas Sunoco Corporate Total
the third quarter and year-to-date
($ millions)
----------------------------------------------------------------------------------------------------------------------
Adjustment related to revaluation of future
tax balances and reflected in current year
earnings (recorded in the second quarter) 31 9 10 (7) 43
Rate change impact on current year earnings
- recorded in the second quarter 4 3 - (1) 6
- recorded in the third quarter 3 1 - (1) 3
----------------------------------------------------------------------------------------------------------------------
TOTAL 38 13 10 (9) 52
----------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
NET EARNINGS COMPONENTS
($ millions after income taxes)
---------------------------------------------------------------------------------------------------------------------
3 MONTHS ENDED 3 months ended 9 MONTHS ENDED 9 months ended
SEPTEMBER 30, September 30, SEPTEMBER 30, September 30,
2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------------
Operational earnings 100 111 363 306
NATURAL GAS
Asset divestments - 35 - 69
Restructuring costs 1 (10) 1 (30)
OIL SANDS
Start-up expenses -- (28) (6) (42) (6)
Project Millennium
STUART OIL SHALE
Asset write-down - (80) (3) (80)
ADJUSTMENT RELATED TO
REVALUATION OF FUTURE
INCOME TAX BALANCES - - 43 7
---------------------------------------------------------------------------------------------------------------------
NET EARNINGS 73 50 362 266
---------------------------------------------------------------------------------------------------------------------
5
---------------------------------------------------------------------------------------------------------------------
CASH FLOW FROM OPERATIONS COMPONENTS
($ millions)
---------------------------------------------------------------------------------------------------------------------
3 MONTHS ENDED 3 months ended 9 MONTHS ENDED 9 months ended
SEPTEMBER 30, September 30, SEPTEMBER 30, September 30,
2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------------
Operational cash flow 238 252 819 773
NATURAL GAS
Restructuring costs (1) (1) (1) (9)
OIL SANDS
Start-up expenses (42) (10) (65) (10)
Overburden removal for (18) (12) (55) (12)
Project Millennium
-------------------------------------------------------------------------------------------------------------------
Cash flow from operations 177 229 698 742
-------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
CRUDE OIL HEDGING LOSSES
($ million after tax)
---------------------------------------------------------------------------------------------------------------------
3 MONTHS ENDED 3 months ended 9 MONTHS ENDED 9 months ended
SEPTEMBER 30, 2001 September 30, 2000 SEPTEMBER 30, 2001 September, 2000
---------------------------------------------------------------------------------------------------------------------
40 69 134 171
---------------------------------------------------------------------------------------------------------------------
SEGMENTED EARNINGS AND CASH FLOW ANALYSIS
OIL SANDS
Oil Sands recorded third quarter net earnings of $69 million, compared with $76
million earned during the third quarter of 2000.
6
Operational earnings in the quarter were $97 million, which excludes $28 million
in Project Millennium start-up costs. Operational earnings in the third quarter
of 2000 were $82 million, which excluded $6 million in Project Millennium
start-up costs. Operational earnings were higher by $15 million due to higher
sales volumes and lower royalty and income tax rates. The lower royalties
reflect both lower prices as well as a decreased Alberta crown royalty rate
(effective January 1, 2001), which was reduced to one per cent of gross revenues
compared to five per cent in the same period last year.
These positive factors were partially offset by lower crude prices and higher
operating expenses. The impact of lower benchmark crude oil prices was also
exacerbated in both the quarter and on a year-to-date basis due to the widening
of the light/heavy crude oil differential compared to prices received last year.
The impact of these pricing factors was partially dampened by a weaker Canadian
dollar versus the U.S. dollar.
Cash flow from operations for the quarter was $139 million, compared to $156
million during the third quarter of 2000.
Operational cash flow in the quarter was $199 million, which excludes $60
million in Project Millennium start-up costs. For the same period in 2000
operational cash flow was $178 million, which excludes $22 million in start-up
costs. The increase in operational cash flow primarily reflects the higher
earnings level.
Year-to-date net earnings for the first nine months of 2001 were $246 million,
compared to the $247 million earned during the first nine months of 2000.
Year-to-date operational earnings in 2001 of $257 million exclude Project
Millennium start-up costs and a $31 million favourable adjustment to future
income tax balances. Operational earnings in 2000 of $253 million also exclude
start-up costs. Factors positively impacting 2001 operational earnings were the
lower Alberta crown royalty rate, the reduced income tax rate and a favourable
$12 million (after-tax) impact of a pricing adjustment calculated retroactively
to the third quarter of 1999, related to a large supply contract. These factors
were partially offset by lower sales volumes, which reflect the impact of a
nine-day planned maintenance shutdown in the second quarter and higher operating
costs.
Year-to-date cash flow from operations for 2001 was $396 million compared to
$536 million in the same period last year.
Year-to-date operational cash flow was $516 million compared to $558 million in
2000. The decrease primarily reflects higher reclamation spending and the
recognition of estimated employee long-term compensation program payments (as
described above).
Oil Sands production during the third quarter averaged 116,500 barrels of oil
per day, higher than the 114,200 barrels of oil per day achieved during the same
period last year. Sales during the quarter averaged 117,800 barrels per day,
compared with 112,900 barrels per day during the third quarter of 2000.
Year-to-date production for Oil Sands averaged 113,200 barrels per day, a
decrease from the 115,300 barrels of oil averaged during the first nine months
of 2000. The decline in production was due to a nine-day maintenance shutdown in
the second quarter.
7
OUTLOOK
Commissioning and start-up remains on schedule to increase production capacity
to 225,000 barrels per day by year-end. Suncor has revised the fourth quarter
production estimate to be 155,000 to 165,000 barrels per day due to an
unscheduled outage at Oil Sands which occurred in October. Due to the
anticipated volatility in production during the fourth quarter, the company will
provide an update on this production forecast in late November. The impact of
this month's base plant maintenance shutdown will also be included in the
November update.
Oil Sands base plant cash operating costs for the year currently average $13.00
per barrel as compared to $11.90 per barrel in the same period last year. The
increase is primarily due to higher energy costs and increased estimated
employee short-term and long-term compensation program costs and lower sales.
---------------------------------------------------------------------------------------------------------------------
OIL SANDS CASH OPERATING COST
(dollars per sales barrel)
---------------------------------------------------------------------------------------------------------------------
3 MONTHS ENDED 3 months ended 9 MONTHS ENDED 9 months ended
SEPTEMBER 30, September 30, SEPTEMBER 30, September 30,
2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------------
Base plant 12.75 12.40 13.00 11.90
Project Millennium
start up expenses 5.50 2.10 3.85 0.65
---------------------------------------------------------------------------------------------------------------------
Total cash operating 18.25 14.50 16.85 12.55
costs
---------------------------------------------------------------------------------------------------------------------
During the third quarter, Oil Sands made significant progress toward
commissioning Project Millennium and increasing the production capacity of the
plant to 225,000 barrels per day. The hydrogen plant went into production and
significant portions of the extraction facilities, the cokers, sulphur trains,
the naphtha hydrotreater and supporting utilities were commissioned.
By October 15, Millennium extraction operations had successfully produced about
two million barrels of bitumen. On October 17 oil production occurred for the
first time from the Millennium upgrader. Project Millennium commissioning will
continue during the balance of the year.
NATURAL GAS
Natural Gas recorded third quarter net earnings of $13 million, compared with
$43 million earned during the third quarter of 2000.
Operational earnings in the quarter were $12 million, compared to $18 million in
the third quarter of 2000. The $6 million decrease was due to lower commodity
prices, with natural gas prices 16 per cent lower than the third quarter of
2000, and lower production. Partially offsetting these unfavourable factors were
lower expenses reflecting last year's restructuring and divestment activities.
8
Natural gas prices have declined from the first half of this year, due to higher
supply and weaker demand in the North American natural gas market.
Cash flow from operations for the third quarter of 2001 was $42 million, down
from the $64 million reported in the third quarter of 2000. The decrease was
primarily due to lower production volumes and commodity prices.
Year-to-date net earnings were $105 million, compared to the $67 million earned
during the first nine months of 2000.
Year-to-date operational earnings in 2001 were $95 million (excluding a $9
million favourable adjustment to future income tax balances and $1 million from
restructuring). This compares to $28 million in operational earnings for the
first nine months of 2000. This $67 million increase was primarily due to higher
natural gas prices, a weaker Canadian dollar and lower expenses reflecting last
year's restructuring and divestment activities. Natural gas prices were higher
due to strong supply and demand fundamentals and significant exposure to the
high value California market. Earnings were also favourably impacted by a $4
million benefit associated with the reduction in the Alberta income tax rate in
2001.
Cash flow from operations for the first nine months of the year was $245
million, up from the $154 million reported in the same period in 2000. The
increase primarily reflects higher commodity prices partially offset by lower
volumes and the recognition of estimated employee long-term compensation program
payments (as described above).
Production averaged 33,200 BOE per day in the third quarter compared with 39,700
BOE per day during the third quarter last year. Natural gas production in the
third quarter of 2001 averaged 176 million cubic feet (mmcf) per day down from
200 mmcf per day in the third quarter of 2000. Natural gas production during the
first nine months of 2001 averaged 176 mmcf per day down from 206 mmcf per day
in the first nine months of 2000. This decrease in production was due to
property divestments that occurred in 2000.
SUNOCO
Sunoco's third quarter net earnings were $12 million, compared with $19 million
in the same quarter of 2000.
Sunoco's Rack-Back business reported earnings for the third quarter of $8
million compared to $21 million in the same quarter of 2000. The earnings
decline was primarily attributable to softening product demand.
Refining margins weakened during the third quarter due to declining product
demand. Refining margins fell to an average of 4.3 cents per litre (cpl) in the
third quarter, compared to 6.1 cpl in the same period last year.
9
Sunoco's Rack-Forward business reported earnings of $4 million compared to a
loss of $2 million in the third quarter of 2000. The improvement was primarily
attributable to higher retail natural gas margins due to the restructuring of
customer contracts and improved margins in the industrial/commercial sales
channel. Partially offsetting these favourable factors were lower retail
gasoline margins. The ongoing competitiveness of the market saw retail gasoline
margins decline to an average of 5.9 cpl in the third quarter of 2001 compared
with 6.4 cpl in the same period last year.
Sunoco's cash flow from operations for the quarter decreased to $30 million for
the quarter compared with $49 million in the same period last year. The decline
primarily reflects the lower refining margins received.
Sunoco reported net earnings of $80 million for the first nine months of 2001,
compared to $58 million in the same period in 2000.
Sunoco's year-to-date operational earnings of $70 million exclude a $10 million
favourable income tax rate adjustment. Operational earnings for the same period
in 2000 were $51 million, which excludes a $7 million favourable income tax rate
adjustment.
Year-to-date Rack Back operational earnings totalled $55 million compared with
$53 million in the same period of 2000. Higher refining margins and volumes had
a positive impact on Rack Back earnings in the first nine months of 2001.
However, increased cash operating expenses offset most of the favourable margin
and volume impact. Refinery fuel costs were higher due primarily to increased
natural gas costs and higher consumption. In addition, higher repair and
maintenance costs at the Sarnia Refinery were incurred in the first quarter due
to an unplanned outage of the catalytic cracker.
Rack Forward operational earnings were $15 million for the first nine months of
2001, compared with a loss of $2 million recorded in the same period last year.
The higher earnings were driven by improved margins and volumes on retail
natural gas sales and higher margins received from the industrial/commercial
sales channel. Retail gasoline margins in the first nine-months of this year
averaged 6.5 cpl, the same as the margins received in the same period last year.
Sunoco's year-to-date cash flow from operation increased to $147 million
compared with $133 million in the same period in 2000. The increase reflects the
higher earnings, partially offset by the recognition of the estimated payment
expected in 2002 with respect to Suncor's employee long-term compensation
programs (as described above).
CORPORATE
Corporate after tax costs during the third quarter were $21 million, compared to
$88 million for the third quarter in 2000. The third quarter of 2000 included an
$80 million write-down of oil shale assets. Excluding this write-down, corporate
costs were $13 million higher primarily due to lower foreign exchange gains and
research and development costs with respect to new technology assessments.
The cash flow from operations deficit in the quarter was $34 million compared to
$40 million in the third quarter of 2000. The decrease primarily reflects lower
estimated income tax payments.
10
Year-to-date after tax costs were $69 million compared to $106 million in 2000.
The improvement year-over-year is primarily for the same reasons for the
quarter-over-quarter improvement noted above, partially offset by the $9 million
impact associated with a reduction of income tax rates.
The year-to-date cash flow from operations deficit was $90 million compared to
$81 million in the same period of 2000. The increase reflects the recognition of
the estimated long-term compensation program payments (as described above) and
costs associated with the research and development assessments. These factors
were partially offset by the favourable income tax impact as a result of the
sale of the company's interest in the Stuart Oil Shale Project.
ANALYSIS OF FINANCIAL CONDITION
Excluding cash and cash equivalents, short-term borrowings and the current
portion of long-term borrowings, Suncor had a working capital deficiency of $34
million at the end of the third quarter. This is unchanged from the end of the
second quarter of this year and down from a deficiency of $128 million at the
end of 2000. The decrease primarily reflects a decline in accounts receivable
due to lower commodity prices, a reduction of outstanding liabilities reflecting
lower Project Millennium obligations, lower hedging losses and a lower level of
investment spending. Partially offsetting these favourable factors was an
increase in inventory levels from low year-end levels and an increase in
anticipation of a planned maintenance shutdown of a portion of the Sarnia
Refinery in the fourth quarter of this year.
At the end of the third quarter of 2001, net debt had risen to $2.897 billion
from $2.236 billion at the end of 2000. The increase of the net debt in the
current year primarily reflects the ongoing investing activity associated with
Project Millennium. Suncor has in place sufficient lines of credit to cover
working capital requirements and will continue to monitor the debt capital
markets for opportunities to refinance bank debt with longer-term debt. Suncor's
undrawn lines of credit as of September 30, 2001 were approximately $675
million, compared to $460 million at the end of June 2001.
In August, Suncor issued $500 million of 10-year Medium Term Notes. The funds
were added to the general funds of Suncor and have been applied principally to
repay commercial paper and bank borrowings.
11
LEGAL NOTICE - FORWARD-LOOKING INFORMATION
Certain statements in this quarterly report are forward-looking, including
statements about Suncor's strategy for growth, expected expenditures, commodity
prices, costs, schedules and operating or financial results. These statements
may be identified by words like "expects," "anticipates," "plans," "believes,"
"scheduled," "projects," "objective" and similar expressions. These statements
are not guarantees of future performance as they are based on a current facts
and assumptions and involve risks and uncertainties. Suncor's actual results may
differ materially from those expressed or implied by its forward looking
statements as a result of known and unknown risks, uncertainties and other
factors. These include: changes in the general economic, market and business
conditions; fluctuations in supply and demand for Suncor's products;
fluctuations in commodity prices; fluctuations in currency exchange rates;
Suncor's ability to respond to changing markets and access the capital markets;
the ability of Suncor to receive timely regulatory approvals; the successful and
timely implementation of its growth projects including Project Millennium; the
integrity and reliability of Suncor's capital assets; the cumulative impact of
other resource development projects; Suncor's ability to comply with current and
future environmental laws; the accuracy of Suncor's production estimates and
production levels and its success at exploration and development drilling and
related activities; the maintenance of satisfactory relationships with unions,
employee associations, joint venturers, suppliers and customers; competitive
actions of other companies, including increased competition from other oil and
gas companies or from companies which provide alternative sources of energy; the
uncertainties resulting from potential delays or changes in plans with respect
to exploration or development projects or capital expenditures; actions by
governmental authorities including increasing taxes, changes in environmental
and other regulations; the ability and willingness of parties with whom Suncor
has material relationships to perform their obligations to Suncor; and the
occurrence of unexpected events such as fires, blowouts, freeze-ups, equipment
failures and other similar events affecting Suncor or other parties whose
operations or assets directly or indirectly affect Suncor. See Suncor's current
Annual Information Form, Annual Report and Interim Reports and other documents
Suncor files with securities regulatory authorities, for further details.
- 30 -
Media & Investor Inquiries:
John Rogers
(403) 269-8670
For more information about Suncor Energy, visit our web site at www.suncor.com
SUNCOR ENERGY
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
Nine months
Third quarter ended September 30
---------------- ------------------
($ millions) 2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------
REVENUES (note 2) 1,013 862 3,112 2,461
----- ----- ----- -----
EXPENSES
Purchases of crude oil and products (note 2) 391 212 1 100 575
Operating, selling and general 250 211 737 647
Exploration 2 6 7 41
Royalties 24 48 119 134
Taxes other than income taxes 95 94 274 269
Depreciation, depletion and amortization 85 91 259 271
(Gain) loss on disposal of assets - (74) 2 (149)
Start-up expenses - Project Millennium (note 3) 42 10 65 10
Write off of oil shale assets (note 5) - 125 48 125
Restructuring (2) 22 (2) 65
Interest 6 6 15 6
----- ----- ----- -----
893 751 2 624 1 994
----- ----- ----- -----
EARNINGS BEFORE INCOME TAXES 120 111 488 467
----- ----- ----- -----
PROVISION FOR INCOME TAXES
Current 13 19 16 38
Future (note 6) 34 42 110 163
----- ----- ----- -----
47 61 126 201
----- ----- ----- -----
NET EARNINGS 73 50 362 266
Dividends on preferred securities (8) (6) (21) (19)
----- ----- ----- -----
Net earnings attributable to common shareholders 65 44 341 247
----- ----- ----- -----
PER COMMON SHARE (dollars)
Net earnings attributable to common shareholders (Note 7)
- basic 0.30 0.20 1.53 1.12
----- ----- ----- -----
- diluted 0.29 0.20 1.51 1.11
----- ----- ----- -----
Cash dividends 0.085 0.085 0.255 0.255
----- ----- ----- -----
(See accompanying notes)
13
SUNCOR ENERGY INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
SEPTEMBER 30 December 31
($ millions) 2001 2000
-----------------------------------------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents 1 21
Accounts receivable 348 407
Income taxes recoverable 8 -
Future income taxes 50 45
Inventories 239 192
----- -----
Total current assets 646 665
----- -----
Capital assets, net 6 829 5 883
Deferred charges and other 176 166
Future income taxes 145 119
----- -----
Total assets 7 796 6 833
----- -----
----- -----
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings 22 64
Accounts payable 370 424
Accrued liabilities 269 285
Income taxes payable - 15
Future income taxes 10 9
Taxes other than income taxes 30 39
Current portion of long-term borrowings - 1
----- -----
Total current liabilities 701 837
----- -----
Long-term borrowings 2 876 2 192
Accrued liabilities and other 224 252
Future income taxes 1 223 1 080
Shareholders' equity (see below) 2 772 2 472
----- -----
Total liabilities and shareholders' equity 7 796 6 833
----- -----
----- -----
Shareholders' equity: Number Number
----------- -----------
Preferred securities 17 540 000 514 17 540 000 514
Share capital 222 860 258 553 221 900 579 537
Retained earnings 1 705 1 421
----- -----
2 772 2 472
----- -----
----- -----
(See accompanying notes)
14
SUNCOR ENERGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine months
Third quarter ended September 30
--------------------------------------
($ millions) 2001 2000 2001 2000
---------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Cash flow provided from operations (1), (2) 177 229 698 742
Decrease (increase) in operating working capital
Accounts receivable 46 (30) 59 (112)
Inventories (38) - (47) -
Accounts payable and accrued liabilities 44 19 (16) 17
Taxes payable (50) 16 (70) 11
---- ---- ------ ------
CASH PROVIDED FROM OPERATING ACTIVITIES 179 234 624 658
---- ---- ------ ------
CASH USED IN INVESTING ACTIVITIES (2) (409) (390) (1 280) (1 066)
---- ---- ------ ------
NET CASH DEFICIENCY BEFORE
FINANCING ACTIVITIES (230) (156) (656) (408)
---- ---- ------ ------
FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings (32) 11 (42) (7)
Proceeds from issuance of long-term borrowings (Note 8) 500 - 500 -
Net increase (decrease) in long-term borrowings (216) 291 255 617
Issuance of common shares under stock option plan 6 3 14 8
Dividends paid on preferred securities (3) (12) (12) (36) (35)
Dividends paid on common shares (19) (17) (55) (54)
---- ---- ------ ------
CASH PROVIDED FROM FINANCING ACTIVITIES 227 276 636 529
---- ---- ------ ------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (3) 120 (20) 121
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4 6 21 5
---- ---- ------ ------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD 1 126 1 126
---- ---- ------ ------
---- ---- ------ ------
PER COMMON SHARE (dollars)
(1) Cash flow provided from operations 0.80 1.03 3.14 3.35
(3) Dividends paid on preferred securities (pre-tax) 0.06 0.05 0.16 0.16
---- ---- ------ ------
Cash flow provided from operations after deducting
dividends paid on preferred securities 0.74 0.98 2.98 3.19
---------------------------------------------------------------------------------------------------
(2) See Schedules of Segmented Data
(See accompanying notes)
15
SUNCOR ENERGY INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
Preferred Share Retained
($ millions) Securities Capital Earnings
------------------------------------------------------------------------------------
AT DECEMBER 31, 1999 514 524 1 070
Net earnings - - 266
Dividends paid on preferred securities - - (19)
Dividends paid on common shares - - (54)
Issued for cash under stock option plan - 8 -
Issued under dividend reinvestment plan - 2 (2)
Income taxes - impact of new standard - - 57
--- --- -----
AT SEPTEMBER 30, 2000 514 534 1 318
--- --- -----
AT DECEMBER 31, 2000 514 537 1 421
Net earnings - - 362
Dividends paid on preferred securities - - (21)
Dividends paid on common shares - - (55)
Issued for cash under stock option plan - 14 -
Issued under dividend reinvestment plan - 2 (2)
--- --- -----
AT SEPTEMBER 30, 2001 514 553 1 705
--- --- -----
(See accompanying notes)
16
2001 2000
-------------------------------------------------------------------------------------------------------
COMMON SHARE INFORMATION
For the nine months ended September 30
Average number outstanding, weighted
monthly (thousands) 222 391 221 301
--------- ---------
--------- ---------
As at September 30
Share price at end of trading
Toronto Stock Exchange - $Canadian 44.00 33.20
--------- ---------
--------- ---------
New York Stock Exchange - $U.S. 27.88 22.15
--------- ---------
--------- ---------
Book value per common share - $Canadian 10.14 8.36
--------- ---------
--------- ---------
- $U.S. 6.42 5.57
--------- ---------
--------- ---------
Common share options outstanding 6 011 294 5 999 137
--------- ---------
--------- ---------
RATIOS
(unaudited)
As at September 30
Debt to debt plus shareholders' equity (%) 51.1 46.4
--------- ---------
--------- ---------
Net tangible asset coverage on long-term debt (times)
Before deduction of future income taxes 2.3 2.6
--------- ---------
--------- ---------
After deduction of future income taxes 2.0 2.1
--------- ---------
--------- ---------
For the twelve months ended September 30
Debt to cash flow provided from operations (times) 3.2 2.0
--------- ---------
--------- ---------
Interest coverage on long-term debt (times)
Net income 4.7 6.2
--------- ---------
--------- ---------
Cash flow from operations 6.6 10.0
--------- ---------
--------- ---------
17
SUNCOR ENERGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. ACCOUNTING POLICIES
These financial statements follow the same accounting policies and methods of
computation as, and should be read in conjunction with, the most recent annual
financial statements, with the exception to the elimination of intercompany
sales as discussed in note 2.
2. ELIMINATION OF INTERCOMPANY SALES
During the first quarter of 2001, the company changed the methodology of
accounting for sales from its upstream operations (Oil Sands and Natural Gas) to
its downstream operations (Sunoco) from a deeming concept to the actual tracking
of product shipped. This change was made to better reflect the current
operational activities within the company. This prospective change increased
sales and other operating revenues and purchases of crude oil by $134 million
for the quarter and $345 million year to date and has no impact on consolidated
and segmented net earnings in the accompanying financial statements.
3. START-UP EXPENSES
Start-up expenses represent pre-operating costs incurred in the commissioning of
the company's Oil Sands Project Millenium.
4. SUPPLEMENTAL INFORMATION
Nine months ended September 30
-------------------------------------
($ millions) 2001 2000
----------------------------------------------------------------------------------------------------
Interest paid 111 81
--- ---
Income taxes paid 23 15
--- ---
Interest expense
Long term interest cost 107 78
Capitalized interest (92) (72)
--- ---
15 6
--- ---
--- ---
Third quarter
-------------------------------------
($ millions) 2001 2000
----------------------------------------------------------------------------------------------------
Interest paid 41 37
--- ---
Income taxes paid (refunded) - (1)
--- ---
Interest expense
Long term interest cost 37 30
Capitalized interest (31) (24)
--- ---
6 6
--- ---
--- ---
18
HEDGE POSITION UPDATE AS AT SEPTEMBER 30
-------------------------------------------------------------------------------------------------------
QUANTITY $US (WTI) $CDN
-------------------------------------------------------------------------------------------------------
2001
-------------------------------------------------------------------------------------------------------
Crude Oil 47,500 bbl/day @ $18.75 $29.61 *
-------------------------------------------------------------------------------------------------------
10,000 bbl/day @ $26.00 - $31.88 $41.05 - $50.34 *
(costless collar) (costless collar)
-------------------------------------------------------------------------------------------------------
2002
-------------------------------------------------------------------------------------------------------
Crude Oil 41,000 bbl/day @ $20.06 $31.67 *
-------------------------------------------------------------------------------------------------------
10,000 bbl/day @ $21.00 - $26.19 $33.16 - $41.35 *
(costless collar) (costless collar)
-------------------------------------------------------------------------------------------------------
12,000 bbl/day @ $22.00 - $26.28 $34.74 - $41.50*
(costless collar) (costless collar)
-------------------------------------------------------------------------------------------------------
18,000 bbl/day @ $23.00 - $27.59 $36.32 - $43.56 *
(costless collar) (costless collar)
-------------------------------------------------------------------------------------------------------
3,000 bbl/day @ $23.50 - $28.15 $37.11 - $44.45 *
(costless collar) (costless collar)
-------------------------------------------------------------------------------------------------------
2003
-------------------------------------------------------------------------------------------------------
Crude Oil 44,000 bbl/day @ $21.00 - $25.74 $33.16 - $40.64 *
(costless collar) (costless collar)
-------------------------------------------------------------------------------------------------------
2004
-------------------------------------------------------------------------------------------------------
Crude Oil 11,000 bbl/day @ $21.00 - $23.65 $33.16 - $37.34 *
(costless collar) (costless collar)
-------------------------------------------------------------------------------------------------------
2005
-------------------------------------------------------------------------------------------------------
Crude Oil 10,000 bbl/day @ $21.57 $34.06 *
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
* For presentation purposes, these $US hedges have been converted to a $CDN
equivalent based on the month end $US/$CDN exchange rate of 1.5790.
-------------------------------------------------------------------------------
For 2001 and 2002, Suncor has in place U.S. dollar swaps in the amount of U.S.
$312 million and $314 million respectively, at an exchange rate of Canadian$ to
U.S.$ of $0.71.
5. OIL SHALE PROJECT
Effective April 5, 2001, the company sold its interest in the Stuart Oil Shale
Project to joint venture co-owners Southern Pacific Petroleum NL and Central
Pacific Minerals NL(SPP/CPM). Under the terms of the purchase, the company
retains a 5% royalty interest in Stage 1 of the project and SPP/CPM and Suncor
retain world wide rights to the ATP technology. The company made total payments
as part of the transaction in the amount of $5 million (AUD$7 million), which
SPP/CPM will use to fund Stage 1 operating, capital and transition costs. The
company received 2.5 million SPP shares and 0.926 million CPM shares in
consideration. SPP/CPM issued the company 12.5 million SPP share options and 4.6
million CPM share options, exercisable over five years at a strike price of
AUD$1.25 per SPP share and AUD$3.38 per CPM share. Suncor has agreed to
surrender its partly paid Restricted Class shares (SPP 57 million and CPM 18.85
million) which were acquired in 1997.
During the second quarter of 2001, the company wrote off the carrying value of
the capital assets and extinguished the long-term borrowings and accrued
interest. The earnings impact of the sale of our remaining interest in the
project was $48 million pre-tax, $3 million after-tax.
19
6. INCOME TAX RATE REDUCTION
Effective April 1, 2001, the Alberta and Ontario governments passed legislation
that reduced the provincial income tax rates. The future tax balances for the
company have been revalued at the new rates resulting in a cumulative future tax
recovery of $43 million. The new rates are reflected in the tax provisions for
the current period. The income tax rate reduction does not affect the company's
cash flow or liquidity.
7. EARNINGS PER COMMON SHARE
The following table provides a reconciliation between basic and diluted earnings
per common share:
Third quarter Nine months ended September 30
------------------------------------------------------------------
($ MILLIONS) 2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------
Net earnings attributable to common
shareholders 65 44 341 247
Dividends on preferred securities - ** - ** 21 - ****
---- ---- ---- ----
Net earnings before deducting dividends on
preferred securities 65 ** 44 ** 362 *** 247 ****
---- ---- ---- ----
---- ---- ---- ----
(MILLIONS OF COMMON SHARES)
---------------------------------------------------------------------------------------------------------------
Weighted-average number of common shares 223 221 222 221
Dilutive securities:
Options/shares issued under long term
incentive plan 3 2 3 2
Preferred securities converted - ** - ** 14 - ****
---- ---- ---- ----
Weighted-average number of diluted common
shares 226 223 239 223
---- ---- ---- ----
---- ---- ---- ----
(DOLLARS PER COMMON SHARE)
---------------------------------------------------------------------------------------------------------------
Basic earnings per share 0.30 * 0.20 * 1.53 * 1.12 *
Diluted earnings per share 0.29 ** 0.20 ** 1.51 *** 1.11 ****
* Basic earnings per share is the net earnings attributable to common
shareholders divided by the weighted average number of common shares.
** For the quarters ended September 30, 2001 and 2000, diluted earnings per
share is the net earnings attributable to common shareholders divided by the
weighted average number of diluted common shares. Dividends on preferred
securities of $8 million in 2001 ($6 million in 2000), and preferred
securities converted of 13 million shares in 2001 (15 million shares in 2000)
have an anti-dilutive impact, therefore they are not included in the
calculation of diluted earnings per share.
*** For the nine months ended September 30, 2001, diluted earnings per share
is the net earnings before deducting dividends on preferred securities
divided by the weighted average number of diluted common shares.
20
**** For the nine months ended September 30, 2000, diluted earnings per share
is the net earnings attributable to common shareholders divided by the
weighted average number of diluted common shares. Dividends on preferred
securities of $19 million and preferred securities converted of 17 million
shares have an anti-dilutive impact, therefore they are not included in the
calculation of diluted earnings per share.
8. ISSUANCE OF MEDIUM TERM NOTES
On August 21, 2001, the company issued $500 million of Series 2 Medium Term
Notes at an interest rate of 6.7%, which is payable semi-annually. The net
proceeds received were used to repay commercial paper and bank borrowings.
These notes will mature August 22, 2011.
9. RESTRUCTURING
In 2000, the carrying value of certain assets of the company's Natural Gas
business were written down to their net estimated recoverable amount and a
provision for estimated restructuring costs was recorded.
In the third quarter of 2001, some of these properties that were previously
written down were sold, realizing a gain before tax of $3 million. Provisions
for estimated restructuring costs were also increased by $1 million before
tax to reflect increased employee termination costs.
21
SUNCOR ENERGY INC.
SCHEDULES OF SEGMENTED DATA
(unaudited)
Corporate
Oil Sands Natural Gas Sunoco and eliminations Total
---------------------------------------------------------------------------------------
($ millions) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------------------------
EARNINGS
Nine months ended September 30
REVENUES
Sales and other operating revenues 929 422 152 157 2 027 1 880 - - 3 108 2 459
Intersegment revenues 124 590 234 120 3 0 (361) (710) - -
Interest 0 0 0 0 0 0 4 2 4 2
----- ----- --- ---- ----- ----- ---- ---- ----- -----
1 053 1 012 386 277 2 030 1 880 (357) (708) 3 112 2 461
EXPENSES
Purchases of crude oil and products 90 2 0 0 1 366 1 278 (356) (705) 1 100 575
Operating, selling and general 366 336 46 53 252 218 73 40 737 647
Exploration - - 7 41 - - - - 7 41
Royalties 25 73 94 61 - - - - 119 134
Taxes other than income taxes 9 9 2 3 262 257 1 - 274 269
Depreciation, depletion and
amortization 166 170 52 60 41 41 - - 259 271
(Gain) loss on disposal of assets 1 - 1 (148) - (1) - - 2 (149)
Start-up expenses - Project Millennium 65 10 - - - - - - 65 10
Write off of oil shale assets - - - - - - 48 125 48 125
Restructuring - - (2) 65 - - - - (2) 65
Interest - - - - - - 15 6 15 6
----- ----- --- ---- ----- ----- ---- ---- ----- -----
722 600 200 135 1 921 1 793 (219) (534) 2 624 1 994
----- ----- --- ---- ----- ----- ---- ---- ----- -----
EARNINGS (LOSS) BEFORE INCOME TAXES 331 412 186 142 109 87 (138) (174) 488 467
Provision for income taxes (85) (165) (81) (75) (29) (29) 69 68 (126) (201)
----- ----- --- ---- ----- ----- ---- ---- ----- -----
NET EARNINGS (LOSS) 246 247 105 67 80 58 (69) (106) 362 266
----- ----- --- ---- ----- ----- ---- ---- ----- -----
----- ----- --- ---- ----- ----- ---- ---- ----- -----
CAPITAL EMPLOYED
As at September 30 1 382 1 366 300 462 506 445 20 (7) 2 208 2 266
----- ----- --- ---- ----- ----- ---- ---- ----- -----
----- ----- --- ---- ----- ----- ---- ---- ----- -----
Twelve months ended September 30
RETURN ON AVERAGE
CAPITAL EMPLOYED (%) 22.8 24.1 35.8 12.3 21.7 14.1 - - 21.5 14.8
----- ----- --- ---- ----- ----- ---- ---- ----- -----
----- ----- --- ---- ----- ----- ---- ---- ----- -----
RETURN ON AVERAGE
CAPITAL EMPLOYED (%)* 7.6 12.1 35.8 12.3 21.7 14.1 - - 9.6 9.0
----- ----- --- ---- ----- ----- ---- ---- ----- -----
----- ----- --- ---- ----- ----- ---- ---- ----- -----
* The company's definition of capital employed excludes capitalized costs
related to major projects in progress. If capital employed were to include
these capitalized costs, the return on average capital employed would be as
stated on this line.
22
SUNCOR ENERGY INC.
SCHEDULES OF SEGMENTED DATA (cont'd)
(unaudited)
Corporate
Oil Sands Natural Gas Sunoco and eliminations Total
---------------------------------------------------------------------------------------
($ millions) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------------------------
CASH FLOW BEFORE
FINANCING ACTIVITIES
Nine months ended September 30
CASH PROVIDED FROM (USED IN)
OPERATING ACTIVITIES:
Cash flow provided from (used in)
operations
Net earnings (loss) 246 247 105 67 80 58 (69) (106) 362 266
Exploration expenses
Cash - - 4 10 - - - - 4 10
Dry hole costs - - 3 31 - - - - 3 31
Non-cash items included in earnings
Depreciation, depletion and
amortization 166 170 52 60 41 41 - - 259 271
Future income taxes 72 153 79 74 (4) 4 (37) (68) 110 163
Current income tax provision
allocated to Corporate 13 12 2 1 33 25 (48) (38) - -
(Gain) loss on disposal of assets 1 - 1 (148) - (1) - - 2 (149)
Write off of oil shale assets - - - - - - 48 125 48 125
Restructuring - - (3) 56 - - - - (3) 56
Other (9) 3 2 2 2 6 5 (8) - 3
Overburden removal outlays (23) (34) - - - - - - (23) (34)
Overburden removal outlays - Project
Millennium (55) (12) - - - - - - (55) (12)
Increase (decrease) in deferred
credits and other (15) (3) - 1 (5) - 11 14 (9) 12
------ ------ --- --- --- --- ---- --- ------ ------
Total cash flow provided from
(used in) operations 396 536 245 154 147 133 (90) (81) 698 742
Decrease (increase) in operating
working capital (54) (151) 52 42 (32) (17) (40) 42 (74) (84)
------ ------ --- --- --- --- ---- --- ------ ------
Total cash provided from (used in)
operating activities 342 385 297 196 115 116 (130) (39) 624 658
------ ------ --- --- --- --- ---- --- ------ ------
CASH PROVIDED FROM (USED IN)
INVESTING ACTIVITIES:
Capital and exploration expenditures (1 166) (1 328) (84) (95) (26) (30) (8) (10) (1 284) (1 463)
Deferred maintenance shutdown
expenditures (4) (1) (2) - - (9) - - (6) (10)
Deferred outlays and other
investments (2) (5) (1) - - (6) (6) 1 (9) (10)
Proceeds from disposals 10 101 9 314 - 2 - - 19 417
------ ------ --- --- --- --- ---- --- ------ ------
Total cash provided from (used in)
investing activities (1 162) (1 233) (78) 219 (26) (43) (14) (9) (1 280) (1 066)
------ ------ --- --- --- --- ---- --- ------ ------
NET CASH SURPLUS (DEFICIENCY)
BEFORE FINANCING ACTIVITIES (820) (848) 219 415 89 73 (144) (48) (656) (408)
------ ------ --- --- --- --- ---- --- ------ ------
23
SUNCOR ENERGY INC.
SCHEDULES OF SEGMENTED DATA
(unaudited)
Corporate
Oil Sands Natural Gas Sunoco and eliminations Total
---------------------------------------------------------------------------------------
($ millions) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------------------------
EARNINGS
Third quarter
REVENUES
Sales and other operating revenues 335 140 25 62 650 659 - - 1 010 861
Intersegment revenues 38 196 49 43 3 - (90) (239) - -
Interest - - - - - - 3 1 3 1
--- --- --- --- --- --- --- ---- ----- ---
373 336 74 105 653 659 (87) (238) 1 013 862
EXPENSES
Purchases of crude oil and products 31 - - - 450 451 (90) (239) 391 212
Operating, selling and general 126 111 15 16 85 72 24 12 250 211
Exploration - - 2 6 - - - - 2 6
Royalties 7 23 17 25 - - - - 24 48
Taxes other than income taxes 3 4 1 1 90 89 1 - 95 94
Depreciation, depletion and
amortization 55 57 17 19 13 15 - - 85 91
(Gain) loss on disposal of assets 1 - (1) (74) - - - - - (74)
Start-up expenses - Project Millennium 42 10 - - - - - - 42 10
Write off of oil shale assets - - - - - - - 125 - 125
Restructuring - - (2) 22 - - - - (2) 22
Interest - - - - - - 6 6 6 6
--- --- --- --- --- --- --- ---- ----- ---
265 205 49 15 638 627 (59) (96) 893 751
--- --- --- --- --- --- --- ---- ----- ---
EARNINGS (LOSS) BEFORE INCOME TAXES 108 131 25 90 15 32 (28) (142) 120 111
Income taxes (39) (55) (12) (47) (3) (13) 7 54 (47) (61)
--- --- --- --- --- --- --- ---- ----- ---
NET EARNINGS (LOSS) 69 76 13 43 12 19 (21) (88) 73 50
--- --- --- --- --- --- --- ---- ----- ---
24
SUNCOR ENERGY INC.
SCHEDULES OF SEGMENTED DATA (cont'd)
(unaudited)
Corporate
Oil Sands Natural Gas Sunoco and eliminations Total
---------------------------------------------------------------------------------------
($ millions) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
---------------------------------------------------------------------------------------------------------------------------------
CASH FLOW BEFORE
FINANCING ACTIVITIES
Third quarter
CASH PROVIDED FROM (USED IN)
OPERATING ACTIVITIES:
Cash flow provided from (used in)
operations
Net earnings (loss) 69 76 13 43 12 19 (21) (88) 73 50
Exploration expenses
Cash - - 1 3 - - - - 1 3
Dry hole costs - - 1 3 - - - - 1 3
Non-cash items included in earnings
Depreciation, depletion and
amortization 55 57 17 19 13 15 - - 85 91
Future income taxes 30 51 11 47 3 1 (10) (57) 34 42
Current income tax provision
allocated to Corporate 9 4 1 - - 12 (10) (16) - -
(Gain) loss on disposal of assets 1 - (1) (74) - - - - - (74)
Write off of oil shale assets - - - - - - - 125 - 125
Restructuring - - (3) 21 - - - - (3) 21
Other 1 - 1 1 1 3 3 (10) 6 (6)
Overburden removal outlays (8) (15) - - - - - - (8) (15)
Overburden removal outlays--Project
Millennium (18) (12) - - - - - - (18) (12)
Increase (decrease) in deferred
credits and other - (5) 1 1 1 (1) 4 6 6 1
---- ---- --- --- --- --- --- --- ---- ----
Total cash flow provided from
(used in) operations 139 156 42 64 30 49 (34) (40) 177 229
Decrease (increase) in operating
working capital (10) 14 9 (12) (5) (13) 8 16 2 5
---- ---- --- --- --- --- --- --- ---- ----
Total cash provided from (used in)
operating activities 129 170 51 52 25 36 (26) (24) 179 234
---- ---- --- --- --- --- --- --- ---- ----
CASH PROVIDED FROM (USED IN)
INVESTING ACTIVITIES:
Capital and exploration expenditures (384) (475) (24) (22) (13) (13) (5) 3 (426) (507)
Deferred maintenance shutdown
expenditures (2) - - - - (1) - - (2) (1)
Deferred outlays and other
investments (2) 4 (1) - 1 - 2 - - 4
Proceeds from disposals 10 - 9 113 - 1 - - 19 114
---- ---- --- --- --- --- --- --- ---- ----
Total cash provided from (used in)
investing activities (378) (471) (16) 91 (12) (13) (3) 3 (409) (390)
---- ---- --- --- --- --- --- --- ---- ----
NET CASH SURPLUS (DEFICIENCY)
BEFORE FINANCING ACTIVITIES (249) (301) 35 143 13 23 (29) (21) (230) (156)
---- ---- --- --- --- --- --- --- ---- ----
25
SUNCOR ENERGY INC.
QUARTERLY OPERATING SUMMARY
(unaudited)
Nine months Total
For the quarter ended ended year
----------------------------------------------------------------------------
SEPT 30 June 30 Mar 31 Dec 31 Sept 30 SEPT 30 Sept 30
2001 2001 2001 2000 2000 2001 2000 2000
---------------------------------------------------------------------------------------------------------------------------
OIL SANDS
PRODUCTION (a) 116.5 109.7 113.4 110.0 114.2 113.2 115.3 113.9
SALES (a)
- light sweet crude oil 54.2 55.0 53.0 64.0 61.4 54.0 64.4 64.3
- diesel 15.0 15.2 13.5 11.0 8.9 14.6 8.7 9.3
- light sour crude oil 40.6 31.5 31.4 27.5 35.6 34.5 38.8 35.8
- bitumen 8.0 13.0 8.6 11.0 7.0 9.9 4.4 6.2
----- ----- ----- ----- ----- ----- ----- -----
117.8 114.7 106.5 113.5 112.9 113.0 116.3 115.6
----- ----- ----- ----- ----- ----- ----- -----
AVERAGE SALES PRICE (b)
- light sweet crude oil 35.20 36.05 36.09 37.22 36.21 35.78 34.68 35.31
- other (diesel, light sour
crude oil and bitumen) 28.21 27.12 25.66 23.71 27.84 27.08 28.17 27.09
- total 31.43 31.40 30.84 31.33 32.39 31.24 31.78 31.67
- total * 37.37 38.35 38.17 43.27 43.41 37.95 40.64 41.29
CASH OPERATING COSTS (1), (c) 18.25 17.00 15.40 16.40 14.50 16.85 12.55 13.55
TOTAL OPERATING COSTS (2), (c) 20.95 19.65 18.60 19.50 18.55 19.70 16.85 17.25
NATURAL GAS
GROSS PRODUCTION **
Conventional
- natural gas (d) 176 177 177 183 200 176 206 200
- natural gas liquids (a) 2.4 2.3 2.3 2.5 2.8 2.4 3.1 3.0
- crude oil (a) *** 1.5 1.5 1.7 1.6 3.6 1.5 5.1 4.2
- total (e) 33.2 33.3 33.5 34.6 39.7 33.2 42.5 40.5
AVERAGE SALES PRICE
- natural gas (f) 3.90 6.78 10.73 8.02 4.63 7.12 3.74 4.72
- natural gas (f) * 3.90 6.82 10.81 8.05 4.62 7.16 3.74 4.73
- natural gas liquids (b) 30.26 39.32 45.07 43.00 39.56 38.05 34.94 36.66
- crude oil - conventional (b) 33.17 36.75 37.35 36.01 33.09 35.78 28.79 29.50
- crude oil - conventional (b) * 37.86 42.30 42.12 44.35 42.31 40.77 39.31 39.80
NET WELLS DRILLED
Conventional - exploratory **** 1 3 2 4 1 6 12 16
- development 7 3 2 4 5 12 15 19
----- ----- ----- ----- ----- ----- ----- -----
8 6 4 8 6 18 27 35
----- ----- ----- ----- ----- ----- ----- -----
26
SUNCOR ENERGY INC.
QUARTERLY OPERATING SUMMARY
(unaudited)
Nine months Total
For the quarter ended ended year
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SEPT 30 June 30 Mar 31 Dec 31 Sept 30 SEPT 30 Sept 30
2001 2001 2001 2000 2000 2001 2000 2000
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SUNOCO
REFINED PRODUCT SALES (g)
Transportation fuels
Gasoline - retail ***** 4.4 4.3 4.1 4.4 4.2 4.3 4.1 4.2
- other 4.6 4.5 4.0 4.1 4.1 4.4 4.0 4.0
Jet fuel 0.7 0.7 1.1 1.0 1.1 0.8 1.1 1.1
Diesel 3.0 3.5 3.1 3.3 3.0 3.1 3.1 3.1
---- ---- ---- ---- ---- ---- ---- ----
12.7 13.0 12.3 12.8 12.4 12.6 12.3 12.4
Petrochemicals 0.6 0.6 0.5 0.6 0.3 0.6 0.6 0.6
Heating oils 0.2 0.3 0.8 0.6 0.2 0.4 0.4 0.4
Heavy fuel oils 0.9 0.8 0.9 0.7 0.5 0.9 0.6 0.6
Other 0.7 0.6 0.4 0.5 0.6 0.6 0.6 0.6
---- ---- ---- ---- ---- ---- ---- ----
15.1 15.3 14.9 15.2 14.0 15.1 14.5 14.6
---- ---- ---- ---- ---- ---- ---- ----
NATURAL GAS SALES (d ) 95 102 92 95 74 96 79 83
---- ---- ---- ---- ---- ---- ---- ----
MARGINS (h)
Refining (3) 4.3 8.1 6.2 5.8 6.1 6.3 6.0 5.9
Retail (4) 5.9 7.6 6.1 7.0 6.4 6.5 6.5 6.6
CRUDE OIL SUPPLY AND REFINING
Processed at Suncor refinery (g) 11.0 10.9 9.8 10.5 10.7 10.6 11.0 10.9
Utilization of refining capacity (%) 99 98 88 95 96 95 99 98
* Excludes the impact of hedging activities.
** Currently all Natural Gas production is located in the Western Canada
Sedimentary Basin.
*** Before deducting third quarter 2001 Alberta Crown royalty of 0.3 thousand
barrels per day (third quarter 2000 - 0.5 thousand barrels per day).
**** Excludes exploratory wells in progress.
*****Excludes sales through joint venture interests.
(a) thousands of barrels per day (d) millions of cubic feet per day (g) thousands of cubic metres per day
(b) dollars per barrel (e) BOE (6:1 basis) per day (h) cents per litre
(c) dollars per barrel rounded to the nearest $0.05 (f) dollars per thousand cubic feet
DEFINITIONS
(1) Cash operating costs - operating, selling and general expenses, taxes other
than income taxes and overburden cash expenditures
for the period
(2) Total operating costs - cash and non-cash operating costs (total Oil Sands
expenses less purchases of crude oil and products
and royalties in Schedules of Segmented Data).
(3) Refining margin - average wholesale unit price from all products
minus average unit cost of crude oil.
(4) Retail margin - average street price of Sunoco branded retail
gasoline minus refining gasoline price.
METRIC CONVERSION
Crude oil, refined products, etc. 1m3 (cubic metre) = approx. 6.29 barrels
Natural gas 1m3 (cubic metre) = approx. 35.49 cubic feet
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUNCOR ENERGY INC.
Date: October 25, 2001 By: /s/ JANICE B. ODEGAARD
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JANICE B. ODEGAARD
Associate General Counsel and
Assistant Secretary