<PAGE>
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: April 2000 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
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF EXHIBIT
- --------- -------------------------------------------------
<S> <C>
EXHIBIT 1 1ST QUARTER REPORT TO SHAREHOLDERS FOR THE PERIOD
ENDED MARCH 31, 2000
</TABLE>
<PAGE>
EXHIBIT 1
<PAGE>
FIRST QUARTER 2000
[LOGO]
Report to shareholders for the
period ended March 31, 2000
Suncor Reports Record Quarterly Earnings
RECORD OIL SANDS PRODUCTION, HIGHER COMMODITY PRICES AND IMPROVED REFINING
MARGINS CONTRIBUTE TO SUNCOR'S EARNINGS IMPROVEMENT
FIRST QUARTER HIGHLIGHTS
(All financial figures are in Canadian dollars unless noted otherwise)
- - Suncor Energy Inc.'s first quarter earnings for 2000 rose to a record $105
million ($0.89 per common share), up from $11 million ($0.09 per common
share) in the first quarter of 1999. The improvement was primarily a result
of increased commodity prices, record oil sands production and higher
downstream refining margins.
- - During the first quarter, cash flow from operations was a record $269
million ($2.33 per common share), compared with $93 million ($0.84 per
common share) in the first quarter of 1999. Revenue for the quarter was
$779 million compared with $469 million during the same period in 1999.
Cash flow and revenue rose mainly as a result of the same factors that
affected earnings.
- - Partially offsetting the benefits of higher crude prices was a $51 million
loss during the quarter as a result of Suncor's hedging program. This
compares with a $10 million hedging gain in the first quarter of 1999.
- - Total production of conventional and synthetic crude oil, natural gas and
natural gas liquids reached a record 148,600 barrels of oil equivalent
(BOE) per day, an increase from the 1999 first quarter average of 133,900
BOE per day. The increase was due to an average quarterly production record
at Oil Sands of 114,800 barrels per day, which was partially offset by
lower conventional production.
[GRAPH]
- - The $2 billion Project Millennium oil sands expansion made significant
advances during the quarter, including the installation of major equipment
such as the four coke drums and fractionator used in the new upgrader. By
the end of the quarter, about 22% of the site construction and 89% of the
engineering work had been completed.
- - Project Millennium is under some cost pressure. The $2 billion project
budget has increased by $150 million due to design changes to improve
reliability and provide for the potential of increased production. In
addition, overall costs could increase by 5 to 15% as a result of the
strong Alberta economy.
- - Suncor's Oil Sands business remains on track to achieve projected growth in
production. Daily production is targeted to average 115,000 barrels per
day in 2000, 130,000 barrels per day in 2001, 210,000 barrels per day in
2002 and 225,000 barrels per day in 2003.
- - Suncor announced plans to reposition its natural gas business to improve
profitability. The unit has set a goal of reducing annual expenses by $18 -
$20 million by the end of the year and achieving a 10% return on capital
within five years.
- - Sunoco's net earnings rose to a first quarter record $19 million from $5
million in the first quarter of 1999 as a result of improved refinery
earnings.
- - The commissioning of the Stuart Oil Shale project in Australia remains
behind schedule. Work to resolve technical issues continues, and a decision
as to the technical and operational viability of the project is expected to
be made later this year.
[GRAPH]
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website: www.suncom
<PAGE>
2 SUNCOR ENERGY INC. - FIRST QUARTER 2000
"Record Oil Sands production and a significant improvement in Sunoco's
refinery margins during the quarter played a big role in driving us to our
best quarter ever."
RICHARD L. GEORGE,
President and Chief Executive Officer
[GRAPH]
RECORD FIRST QUARTER EARNINGS REFLECT OPERATIONAL STRENGTHS
Higher commodity prices played an important role in Suncor's record $105
million first quarter earnings, which were also strongly bolstered by
excellent operating performance, says Rick George, president and chief
executive officer. "Record Oil Sands production and a significant improvement
in Sunoco's refinery margins during the quarter played a big role in driving
us to our best quarter ever," says George.
The benefits of high crude prices where partially offset by a $51
million hedging loss during the quarter. "Suncor pre-sells a portion of its
future production at pre-set prices to reduce our exposure to low crude oil
prices," says George. "This hedging program helps protect Suncor's ability to
finance Project Millennium without having to issue equity and dilute our
shareholders' interest in the company, and it has served our needs very
well," says George. "Once this large capital project is complete, we plan to
have a much less aggressive hedge position."
SUNCOR ANNOUNCES PLANS TO REPOSITION EXPLORATION AND PRODUCTION
On the day of the release of Suncor's first quarter results, the company also
announced plans to reposition Exploration and Production into a natural gas
business with a sharper focus on improved profitability. "We have been
increasing our emphasis on natural gas for years now," says George. "But you
are now going to see a real change in focus for us. Our plan calls for
reducing annual expenses in this business by $18 to $20 million by the end of
the year and achieving a 10% return on capital within the next five years."
Suncor's natural gas business will concentrate on building competitive
operating areas, improving base business efficiency and creating new
low-capital businesses.
[GRAPH]
"These changes do not come without an impact on people," says George.
"We will lose about 85 employees as we restructure the business. We are
working to minimize this number by finding opportunities to place people
within Suncor's other businesses."
QUARTER SEES PROGRESS ON GROWTH PROJECTS
The first quarter saw Suncor moving forward on a number of fronts.
Construction work progressed on Project Millennium. By the end of the
quarter, 89% of the engineering and 22% of site construction was completed,
with most of the major equipment on site. The project remains on schedule,
with commissioning activities planned for the second half of 2001.
Project Millennium is under some cost pressure. "We have made some
design changes to increase long-term reliability, with
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website: www.suncor.com
<PAGE>
3 SUNCOR ENERGY INC. - FIRST QUARTER 2000
"Project Millennium is designed to make Suncor the lowest cost supplier of crude
in North America, and we're still very much on track to achieve our goal."
RICHARD L. GEORGE,
President and Chief Executive Officer
the potential for increased production from parts of the plant," says George.
This change in scope is estimated to add $150 million to the project cost.
"In addition we also have concerns about the strong Alberta economy, which
could increase the overall project cost by 5 to 15%."
George says these increases in Millennium costs are not expected to have
a material impact on the project's return on capital or cash cost per barrel.
"Project Millennium is designed to make Suncor the lowest cost supplier of
crude in North America, and we're still very much on track to achieve our
goal."
Suncor's Oil Sands business continues to target average daily production
of 115,000 barrels per day in 2000, 130,000 barrels per day in 2001, 210,000
barrels per day in 2002, and 225,000 barrels per day in 2003.
During the quarter, Suncor announced intentions to invest a total of
$750 million to increase Oil Sands upgrading capacity and to develop a
commercial scale, in-situ bitumen recovery project on its Firebag properties,
40 kilometres northeast of the Oil Sands plant. Construction of the in-situ
facility is expected to begin in 2001, pending regulatory and board of
directors' approval. If approved, Oil Sands production is expected to
increase to 260,000 barrels per day by the end of 2004.
Suncor continues to assess integration opportunities to expand the
company's reach into the North American refining market with potential joint
ventures, acquisitions and other special long-term supply agreements with
U.S. refiners. "Our work on downstream integration is an effort to drive
additional synergistic value between our oil sands operation and the ultimate
customer," says George.
During the first quarter Suncor also announced plans to invest $100
million over the next five years in alternative and renewable energy. "This
has the potential to be a viable, money-making business for Suncor, which can
add value to the company," says George. "At the same time, we have an
opportunity to enter a business that will benefit the environment and improve
our quality of life."
CONSOLIDATED FINANCIAL RESULTS
Consolidated earnings for 2000 were $105 million ($0.89 per common share),
compared with earnings of $11 million ($0.09 per share) in the first quarter
of 1999.
The increase in earnings was primarily a result of a more than a
doubling of the benchmark WTI crude oil price, record Oil Sands production,
higher natural gas prices, improved refining margins and lower interest
expenses. These favourable factors were partially offset by hedging losses of
$51 million in the
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website:www.suncor.com
<PAGE>
4 SUNCOR ENERGY INC. - FIRST QUARTER 2000
[GRAPH]
quarter (compared to a gain of $10 million in the first quarter of 1999),
lower retail gasoline margins and higher non cash costs associated with
overburden removal and depreciation at the Oil Sands operations.
Cash flow from operations was $269 million ($2.33 per common share)
compared to $93 million ($0.84 per common share) in the first quarter of
1999. The increase is primarily due to the same factors that increased
earnings.
BUSINESS UNIT PERFORMANCE
OIL SANDS SETS RECORD QUARTERLY PRODUCTION RATE, EARNINGS AND CASH FLOW
Oil Sands earnings rose to $90 million in the first quarter of 2000 compared
with earnings of $17 million in the first quarter of 1999. Cash flow from
operations rose to $199 million, up from $53 million in the first quarter of
1999. Higher crude oil prices, increased production and sales volumes and
lower per-barrel cash operating costs contributed to the improved results.
These positive factors were partially offset by crude oil hedging losses and
higher non-cash charges.
Oil Sands achieved a new production record, averaging 114,800 barrels
per day in the first quarter of 2000, up 20% from the same period in 1999
when production was halted by an eight-day unplanned production outage. Oil
Sands is targeting average annual production of 115,000 barrels per day for
2000. Sales in the quarter averaged 117,900 barrels per day compared to
91,300 barrels per day in the first quarter of 1999.
[GRAPH]
Cash operating costs per barrel declined to an average of $11.10
compared with cash operating costs of $12.55 in the first quarter of 1999.
Higher sales volumes contributed to the improvement in cash operating costs.
Oil Sands is targeting cash operating costs to average $11.50 for 2000.
A fatal accident occurred on February 22 when two employees of a
sub-contractor working on Project Millennium were in a truck explosion. One
person was killed and another seriously injured. The accident is currently
under investigation. "This incident has left all of us at Suncor deeply
saddened," says Rick George. "The safety of everyone on this site is our
highest priority. Our condolences go out to the family and friends of both
men."
SUNOCO EARNINGS STRENGTH DRIVEN BY STRONG REFINING MARGINS
Sunoco's first quarter earnings were $19 million, compared with earnings of
$5 million in the first quarter of 1999. Cash flow from operations was $46
million for the quarter compared with $23 million in the first quarter of
1999.
Refining earnings were $16 million in the first quarter compared with a
loss of $1 million for the same quarter last year.
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website:www.suncor.com
<PAGE>
5 SUNCOR ENERGY INC. - FIRST QUARTER 2000
[GRAPH]
The improvement is due to higher refining margins, which were influenced by
strong seasonal North American distillate and gasoline margins, historically
low gasoline inventories and a tight North American supply market.
Sunoco's retail marketing earnings were $4 million, compared with
earnings of $7 million in the first quarter of last year. Retail volumes were
slightly ahead of last year. However, earnings declined as a result of lower
retail margins as wholesale prices rose more quickly than they could be fully
recovered at the retail outlets. The decline was partially offset by an
improvement in non-gasoline revenues, including car wash and merchandise
revenues at Sunoco service stations.
Sunoco's Integrated Energy Solutions (IES) business had a loss of $1
million for the quarter compared with a loss of $1 million in the first
quarter of 1999.
EXPLORATION AND PRODUCTION CONTINUES STRATEGIC RE-POSITIONING
Exploration and Production's (E&P) earnings increased to $8 million in the
first quarter, up from $3 million in first quarter of 1999. The increase is
attributable to higher crude prices and higher natural gas prices, which
averaged $2.96 per million cubic feet (mcf) for the quarter, compared with
$2.18 per mcf in the 1999 first quarter. Partially offsetting these
favourable factors were higher crude oil hedging losses, lower production
levels and higher royalties due to the improvement in commodity prices.
Conventional production declined by 4,600 barrels per day during the
first quarter, averaging 33,800 BOE per day compared with 38,400 BOE per day
during the first quarter last year. The main factors contributing to the
production decline are the impacts from 1999 property divestments and poor
drilling results. E&P plans to pursue its property divestment program with a
focus on selling oil properties. Property divestments planned for 2000 could
generate over $250 million in proceeds, including the sale of Suncor's Burnt
Lake property. Subsequent to the end of the quarter E&P completed the sale of
a package of properties that generated $135 million in proceeds. The annual
impact of the sale of these properties represents approximately 4,500 BOE of
daily production. Due to the increased scope and acceleration of property
divestments, conventional production for the year is now expected to average
about 27,000 BOE per day as compared to E&P's original target of 30,000.
Cash flow from operations for the quarter was $48 million compared with
$42 million achieved in the 1999 first quarter.
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website:www.suncor.com
<PAGE>
6 SUNCOR ENERGY INC. - FIRST QUARTER 2000
"[Alternative and renewable energy] has the potential to be a viable,
money-making business for Suncor, which can add value to the company. At the
same time, we have an opportunity to enter a business that will benefit the
environment and improve our quality of life."
RICHARD L. GEORGE,
President and Chief Executive Officer
STUART OIL SHALE PROJECT
While commissioning remains behind schedule on Stage 1 of the Stuart Oil
Shale Project, hot commissioning trials have demonstrated that oil can be
produced from oil shale, but further assessment is required to determine
whether the technology is viable. A decision as to the technical and
operational viability of the project is expected to be made later this year.
George says if Suncor decides not to proceed with further development the
company would face a $55 million to $65 million write-off.
SUNCOR ENERGY IS AN INTEGRATED CANADIAN ENERGY COMPANY WITH A LEADING
POSITION IN CANADA'S OIL SANDS INDUSTRY. SUNCOR IS ALSO A CONVENTIONAL
NATURAL GAS AND OIL PRODUCER IN WESTERN CANADA, OPERATES A REFINING AND
MARKETING BUSINESS IN ONTARIO UNDER THE SUNOCO BRAND, AND IS PURSUING
INTERNATIONAL GROWTH WITH AN OIL SHALE DEVELOPMENT PROJECT IN AUSTRALIA. AT
THE SAME TIME AS SUNCOR MEETS TODAY'S ENERGY NEEDS, THE COMPANY IS ALSO
INVESTING IN ALTERNATIVE AND RENEWABLE ENERGY FOR THE FUTURE. SUNCOR ENERGY
COMMON SHARES AND PREFERRED SECURITIES ARE LISTED FOR TRADING ON THE TORONTO
AND NEW YORK STOCK EXCHANGES (SYMBOL SU).
Note: This news release contains forward-looking information. Actual future
results may differ materially. The risks, uncertainties and other factors that
could influence actual results are described in Suncor Energy's annual report to
shareholders and other documents filed with regulatory authorities.
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website:www.suncor.com
<PAGE>
7 SUNCOR ENERGY INC. - FIRST QUARTER 2000
Consolidated Statements of Earnings
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31
($ millions) 2000 1999
- -------------------------------------------------------------------------------------------------
REVENUES 779 469
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
EXPENSES
Purchases of crude oil and products 155 79
Operating, selling and general 217 178
Exploration 10 14
Royalties 43 16
Taxes other than income taxes 84 77
Depreciation, depletion and amortization 91 75
Gain on disposal of assets (1) --
Interest -- 12
- -------------------------------------------------------------------------------------------------
599 451
- -------------------------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 180 18
- -------------------------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES
Current 7 4
Future 68 3
- -------------------------------------------------------------------------------------------------
75 7
- -------------------------------------------------------------------------------------------------
NET EARNINGS 105 11
Dividends on preferred securities (6) (1)
- -------------------------------------------------------------------------------------------------
Net earnings attributable to common shareholders 99 10
- -------------------------------------------------------------------------------------------------
PER COMMON SHARE (dollars)
Net earnings 0.95 0.10
Dividends on preferred securities 0.06 0.01
- -------------------------------------------------------------------------------------------------
Net earnings attributable to common shareholders
Basic 0.89 0.09
Diluted 0.87 0.09
- -------------------------------------------------------------------------------------------------
Cash dividends 0.17 0.17
- -------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website: www.suncor.com
<PAGE>
8 SUNCOR ENERGY INC. - FIRST QUARTER 2000
Consolidated Balance Sheets
(unaudited)
<TABLE>
<CAPTION>
March 31 December 31
($ millions) 2000 1999
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents 3 5
Accounts receivable 342 277
Future income taxes 53 14
Inventories 169 161
- -----------------------------------------------------------------------------------------------
Total current assets 567 457
- -----------------------------------------------------------------------------------------------
Capital assets, net 4 909 4 528
Deferred charges and other 177 191
- -----------------------------------------------------------------------------------------------
Total assets 5 653 5 176
- -----------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings 15 32
Accounts payable 324 277
Accrued liabilities 256 339
Income taxes 5 15
Taxes other than income taxes 40 46
Current portion of long-term borrowings 1 1
- -----------------------------------------------------------------------------------------------
Total current liabilities 641 710
- -----------------------------------------------------------------------------------------------
Long-term borrowings 1 661 1 306
Accrued liabilities and other 246 236
Future income taxes 859 816
Shareholders' equity (see below) 2 246 2 108
- -----------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity 5 653 5 176
- -----------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
Number Number
- -----------------------------------------------------------------------------------------------
Preferred securities 17 540 000 514 17 540 000 514
Share capital 110 565 389 525 110 516 119 524
Retained earnings 1 207 1 070
- -----------------------------------------------------------------------------------------------
2 246 2 108
- -----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website: www.suncor.com
<PAGE>
9 SUNCOR ENERGY INC. - FIRST QUARTER 2000
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31
($ millions) 2000 1999
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Cash flow provided from operations (1), (2) 269 93
Increase in operating working capital
Accounts receivable (65) (22)
Inventories (8) (8)
Accounts payable and accrued liabilities (36) (18)
Taxes payable (16) (13)
- -----------------------------------------------------------------------------------------------------
CASH PROVIDED FROM OPERATING ACTIVITIES 144 32
- -----------------------------------------------------------------------------------------------------
CASH USED IN INVESTING ACTIVITIES (2) (460) (184)
- -----------------------------------------------------------------------------------------------------
NET CASH DEFICIENCY BEFORE FINANCING ACTIVITIES (316) (152)
- -----------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings (17) 1
Issuance of preferred securities -- 507
Stuart oil shale project borrowings -- 4
Repayment of commercial paper borrowings -- (491)
Net increase in other long-term borrowings 360 179
Issuance of common shares under stock option plan 1 1
Dividends paid on preferred securities (3) (11) (1)
Dividends paid on common shares (19) (19)
- -----------------------------------------------------------------------------------------------------
CASH PROVIDED FROM FINANCING ACTIVITIES 314 181
- -----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2) 29
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5 26
- -----------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 3 55
- -----------------------------------------------------------------------------------------------------
PER COMMON SHARE (dollars)
(1) Cash flow provided from operations 2.44 0.85
(3) Dividends paid on preferred securities (pre-tax) 0.11 (0.01)
- -----------------------------------------------------------------------------------------------------
Cash flow provided from operations after
deducting dividends paid on preferred securities 2.33 0.84
- -----------------------------------------------------------------------------------------------------
</TABLE>
(2) See Schedules of Segmented Data
See accompanying notes.
Consolidated Statements of Changes in Shareholders' Equity
(unaudited)
<TABLE>
<CAPTION>
Preferred Share Retained
($ millions) Securities Capital Earnings
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AT DECEMBER 31, 1998 -- 518 981
Net earnings -- -- 11
Dividends paid -- -- (20)
Issuance of preferred securities 507 -- --
Issued for cash under stock option plan -- 1 --
- -------------------------------------------------------------------------------------------------------------------
AT MARCH 31, 1999 507 519 972
- -------------------------------------------------------------------------------------------------------------------
AT DECEMBER 31, 1999 514 524 1 070
Net earnings -- -- 105
Dividends paid -- -- (25)
Issued for cash under stock option plan -- 1 --
Income taxes - impact of new standard (note 1b) -- -- 57
- -------------------------------------------------------------------------------------------------------------------
AT MARCH 31, 2000 514 525 1 207
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website: www.suncor.com
<PAGE>
10 SUNCOR ENERGY INC. - FIRST QUARTER 2000
Common Share Information
<TABLE>
<CAPTION>
2000 1999
- --------------------------------------------------------------------------------------
<S> <C> <C>
for the quarter ended March 31
Average number outstanding, weighted monthly (thousands) 110 532 110 233
- --------------------------------------------------------------------------------------
as at March 31
Share price at end of trading
Toronto Stock Exchange - $Canadian 62.85 50.75
New York Stock Exchange - $U.S. 42.50 33.50
- --------------------------------------------------------------------------------------
Book value per common share - $Canadian 15.67 13.52
- $U.S. 10.78 8.95
- --------------------------------------------------------------------------------------
Common share options outstanding 3 309 854 3 125 440
- --------------------------------------------------------------------------------------
Ratios
(unaudited)
- --------------------------------------------------------------------------------------
as at March 31
Debt to debt plus shareholders' equity (%) 42.7 33.5
- --------------------------------------------------------------------------------------
Net tangible asset coverage on long-term debt (times)
Before deduction of future income taxes 2.7 3.6
- --------------------------------------------------------------------------------------
After deduction of future income taxes 2.2 2.8
for the twelve months ended March 31
Debt to cash flow provided from operations (times) 1.8 1.8
- --------------------------------------------------------------------------------------
Interest coverage on long-term debt (times)
Net income 6.7 3.4
- --------------------------------------------------------------------------------------
Cash flow from operations 10.7 7.5
- --------------------------------------------------------------------------------------
</TABLE>
Notes to the Consolidated Financial Statements
(unaudited)
1. ADOPTION OF NEW ACCOUNTING STANDARDS
a) Employee future benefits
Effective January 1, 2000, the company adopted new recommendations issued by
the Accounting Standards Board of the Canadian Institute of Chartered
Accountants for the recognition, measurement and disclosure of the cost of
employee future benefits. Under this standard, a liability and an expense is
recognized for all employee future benefits in the reporting period in which
an employee has provided the service that gives rise to the benefits. The
recommendations were adopted in a manner that produces recognized and
unrecognized amounts for all of its benefit plans the same as those
determined by application of accounting principles generally accepted in the
United States.
The new recommendations, which will not affect the company's cash flows
or liquidity, have been adopted retroactively and prior periods' results have
been restated. As a result, retained earnings were decreased by $34 million,
accrued liabilities and other were increased by $57 million and future income
taxes were decreased by $23 million at January 1, 2000. The impact of the new
recommendations for the first quarter of 2000 was to increase operating,
selling and general expenses by $3 million and decrease net earnings by $2
million after income tax credits of $1 million (1999 - increase operating,
selling and general expenses by $6 million and decrease net earnings by $4
million after income tax credits of $2 million).
b) Income taxes
Effective January 1, 2000, the company adopted new recommendations issued by
the Accounting Standards Board of the Canadian Institute of Chartered
Accountants dealing with the accounting for income taxes. This standard
requires the use of the asset and liability method for computing future
income taxes. Under this method, future income taxes are recognized for the
future income tax consequences attributable to differences between the
financial statement carrying value and their respective income tax bases
(temporary differences). Future income tax assets and liabilities are
measured using enacted income tax rates expected to apply to taxable income
in the years in which temporary differences are expected to be recovered or
settled. The effect on future income tax assets and liabilities of a change
in tax rates is included in net earnings in the period that includes the
enactment date. Material changes in tax rates could result in volatility in
net earnings in the periods affected. The amount of future income tax assets
recognized is limited to the amount that is more likely than not to be
recognized. Previously, the company followed the deferral method of
accounting for income taxes, which was based on differences in the timing of
reporting income and expenses in financial statements and tax returns.
The new recommendations, which will not affect the company's cash flows
or liquidity, have been adopted retroactively without restating prior
periods. The cumulative effect at January 1, 2000 is to decrease future
income taxes and increase retained earnings by $57 million. The new
recommendations had no impact on net earnings for the first quarter of 2000.
2. COMPARATIVE FIGURES
In addition to the restatement of prior periods' results for comparative
purposes identified in note 1, adoption of the new accounting standards has
resulted in changes to prior periods' capital employed, return on capital
employed, affected ratios and indicators, and certain per common share
calculations.
3. SUPPLEMENTAL INFORMATION
<TABLE>
<CAPTION>
Three months ended March 31
($ millions) 2000 1999
- ----------------------------------------------------------------
<S> <C> <C>
Interest paid 28 26
- ----------------------------------------------------------------
Income taxes paid 16 3
- ----------------------------------------------------------------
Interest expense
Long-term interest cost 22 20
Capitalized interest (22) (8)
- ----------------------------------------------------------------
-- 12
- ----------------------------------------------------------------
</TABLE>
<PAGE>
11 SUNCOR ENERGY INC. - FIRST QUARTER 2000
Schedules of Segmented Data
(unaudited)
<TABLE>
<CAPTION>
Exploration Corporate
Oil Sands and Production Sunoco and Eliminations Total
($ millions) 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Three months ended March 31
REVENUES
Sales and other operating revenues 151 99 46 20 581 349 -- -- 778 468
Intersegment revenues 191 65 44 50 -- -- (235) (115) -- --
Interest -- -- -- -- -- -- 1 1 1 1
- ----------------------------------------------------------------------------------------------------------------------------
342 164 90 70 581 349 (234) (114) 779 469
EXPENSES
Purchases of crude oil and products -- 3 -- -- 382 184 (227) (108) 155 79
Operating, selling and general 109 86 23 19 73 69 12 4 217 178
Exploration -- -- 10 14 -- -- -- -- 10 14
Royalties 25 7 18 9 -- -- -- -- 43 16
Taxes other than income taxes 3 2 -- 1 81 74 -- -- 84 77
Depreciation, depletion and amortization 55 38 23 24 13 13 -- -- 91 75
Gain on disposal of assets -- -- (1) -- -- -- -- -- (1) --
Interest -- -- -- -- -- -- -- 12 -- 12
- ----------------------------------------------------------------------------------------------------------------------------
192 136 73 67 549 340 (215) (92) 599 451
- ----------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) BEFORE INCOME TAXES 150 28 17 3 32 9 (19) (22) 180 18
Income taxes (60) (11) (9) -- (13) (4) 7 8 (75) (7)
- ----------------------------------------------------------------------------------------------------------------------------
NET EARNINGS (LOSS) 90 17 8 3 19 5 (12) (14) 105 11
- ----------------------------------------------------------------------------------------------------------------------------
CAPITAL EMPLOYED
as at March 31 1 520 1 324 709 784 469 537 (66) (70) 2 632 2 575
- ----------------------------------------------------------------------------------------------------------------------------
RETURN ON AVERAGE CAPITAL EMPLOYED (%)
Twelve months ended March 31 17.2 11.4 6.4 3.1 8.6 6.6 -- -- 11.4 7.3
- ----------------------------------------------------------------------------------------------------------------------------
CASH FLOW BEFORE FINANCING ACTIVITIES
three months ended March 31
CASH PROVIDED FROM (USED IN)
OPERATING ACTIVITIES:
Cash flow provided from
(used in) operations
Net earnings (loss) 90 17 8 3 19 5 (12) (14) 105 11
Exploration expenses
Cash -- -- 4 6 -- -- -- -- 4 6
Dry hole costs -- -- 6 8 -- -- -- -- 6 8
Non-cash items included in earnings
Depreciation, depletion
and amortization 55 38 23 24 13 13 -- -- 91 75
Future income taxes 57 10 (4) -- 6 -- 9 (7) 68 3
Current income tax provision
allocated to Corporate 3 1 13 -- 7 4 (23) (5) -- --
Gain on disposal of assets -- -- (1) -- -- -- -- -- (1) --
Other 3 (1) (1) 1 1 1 (4) 2 (1) 3
Overburden removal outlays (8) (12) -- -- -- -- -- -- (8) (12)
Increase (decrease) in deferred credits
and other (1) -- -- -- -- -- 6 (1) 5 (1)
- ----------------------------------------------------------------------------------------------------------------------------
Total cash flow provided from
(used in) operations 199 53 48 42 46 23 (24) (25) 269 93
Decrease (increase) in operating
working capital (93) (44) (20) 6 (25) (39) 13 16 (125) (61)
- ----------------------------------------------------------------------------------------------------------------------------
Total cash provided from
(used in) operating activities 106 9 28 48 21 (16) (11) (9) 144 32
- ----------------------------------------------------------------------------------------------------------------------------
CASH USED IN INVESTING ACTIVITIES:
Capital and exploration expenditures (406) (109) (40) (59) (5) (3) (6) (14) (457) (185)
Deferred maintenance
shutdown expenditures -- (2) -- -- -- -- -- -- -- (2)
Deferred outlays and other
investments (3) -- -- -- (3) -- -- (1) (6) (1)
Proceeds from disposals -- -- 3 4 -- -- -- -- 3 4
- ----------------------------------------------------------------------------------------------------------------------------
Total cash used in
investing activities (409) (111) (37) (55) (8) (3) (6) (15) (460) (184)
- ----------------------------------------------------------------------------------------------------------------------------
NET CASH SURPLUS (DEFICIENCY) BEFORE
FINANCING ACTIVITIES (303) (102) (9) (7) 13 (19) (17) (24) (316) (152)
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
For more information please contact: Media Inquiries: Ron Shewchuk (403)
269-8655 Investor Relations: John Rogers (403) 269-8670
Visit Suncor's website: www.suncor.com
<PAGE>
12 SUNCOR ENERGY INC. - FIRST QUARTER 2000
Quarterly Operating Summary
(unaudited)
<TABLE>
<CAPTION>
For the quarter ended Total Year
- -----------------------------------------------------------------------------------------------------------------------------
MAR 31 Dec 31 Sept 30 June 30 Mar 31
2000 1999 1999 1999 1999 1999
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OIL SANDS
PRODUCTION (a) 114.8 113.2 101.5 112.0 95.5 105.6
SALES (a)
- - light sweet crude oil 67.7 62.8 52.1 41.3 54.6 52.7
- - diesel 8.7 9.5 8.4 6.8 7.9 8.2
- - light sour crude oil 41.5 35.1 47.5 54.8 28.8 41.3
- -----------------------------------------------------------------------------------------------------------------------------
117.9 107.4 108.0 102.9 91.3 102.2
- -----------------------------------------------------------------------------------------------------------------------------
AVERAGE SALES PRICE (b)
- - light sweet crude oil 34.35 30.81 27.23 24.47 20.55 26.06
- - other (diesel and light sour crude oil) 28.46 25.91 21.45 19.60 19.18 21.48
- - total 31.84 28.77 24.24 21.57 20.00 23.84
- - total* 39.19 33.72 27.56 22.29 18.52 25.89
CASH OPERATING COSTS (1),(c) 11.10 11.15 12.35 10.90 12.55 11.70
TOTAL OPERATING COSTS (2),(c) 15.50 15.10 15.30 14.30 15.60 15.05
EXPLORATION AND PRODUCTION
GROSS PRODUCTION**
Conventional
- - crude oil (a) *** 8.1 7.9 8.4 9.7 10.8 9.2
- - natural gas liquids (a) 3.5 4.0 4.1 4.1 4.7 4.2
- - natural gas (d) 222 219 231 225 229 226
- - total (e) 33.8 33.8 35.6 36.3 38.4 36.0
Non-conventional
- - crude oil (a) *** 1.4 1.3 1.0 1.2 1.3 1.2
Total production (e) 35.2 35.1 36.6 37.5 39.7 37.2
AVERAGE SALES PRICE
- - crude oil - conventional (b) 26.30 25.21 20.55 20.48 18.48 20.94
- - crude oil - non-conventional (b) 26.91 20.89 21.46 13.55 9.87 16.27
- - total crude oil (b) 26.39 24.61 20.65 19.70 17.57 20.40
- - total crude oil (b)* 36.58 31.08 27.30 20.95 15.60 23.12
- - natural gas liquids (b) 33.16 27.12 22.81 16.70 11.88 19.32
- - natural gas (f) 2.96 2.96 2.48 2.15 2.18 2.44
- - natural gas (f)* 2.97 3.11 2.58 2.17 2.10 2.48
NET WELLS DRILLED
Conventional - exploratory **** 2 10 6 1 2 19
- development 4 4 1 2 -- 7
- -----------------------------------------------------------------------------------------------------------------------------
6 14 7 3 2 26
- -----------------------------------------------------------------------------------------------------------------------------
SUNOCO
REFINED PRODUCT SALES (g)
Transportation fuels
Gasoline - retail ***** 4.0 4.3 4.0 4.2 4.0 4.1
- other 3.8 3.8 3.8 3.9 3.3 3.7
Jet fuel 1.1 0.9 1.2 1.0 1.1 1.1
Other 2.8 2.9 2.8 2.7 2.3 2.7
- -----------------------------------------------------------------------------------------------------------------------------
11.7 11.9 11.8 11.8 10.7 11.6
Petrochemicals 0.6 0.8 0.8 0.7 0.6 0.7
Heating oils 0.7 0.5 0.1 0.3 0.8 0.4
Heavy fuel oils 0.7 0.5 0.4 0.6 0.5 0.5
Other 0.6 0.5 0.8 0.7 0.5 0.6
- -----------------------------------------------------------------------------------------------------------------------------
14.3 14.2 13.9 14.1 13.1 13.8
- -----------------------------------------------------------------------------------------------------------------------------
NATURAL GAS SALES (d) 84 90 87 86 93 89
- -----------------------------------------------------------------------------------------------------------------------------
MARGINS (h)
Refining (3) 5.4 4.3 4.8 3.3 3.4 4.0
Retail (4) 6.8 7.2 6.9 7.6 7.9 7.4
CRUDE OIL SUPPLY AND REFINING
Processed at Suncor refinery (g) 11.4 10.2 11.2 10.4 10.8 10.6
Utilization of refining capacity (%) 102 92 100 93 97 95
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Excludes the impact of hedging activities.
** Currently all E&P production is located in the Western Canada Sedimentary
Basin.
*** Before deducting first quarter 2000 Alberta Crown royalty of 1.0 thousand
barrels per day (first quarter 1999 - 0.6 thousand barrels per day).
**** Excludes exploratory wells in progress.
***** Excludes sales through joint venture interests.
(a) thousands of barrels per day
(b) dollars per barrel
(c) dollars per barrel rounded to the nearest $0.05
(d) millions of cubic feet per day
(e) BOE per day
(f) dollars per thousand cubic feet
(g) thousands of cubic metres per day
(h) cents per litre
DEFINITIONS
(1) Cash operating costs - operating, selling and general expenses, crude oil
and products purchases, 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 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. - 1 m3 (cubic metre) = approx. 6.29 barrels
Natural gas - 1 m3 (cubic metre) = approx. 35.49 cubic feet
<PAGE>
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.
By:
Date: April 20, 2000 "JANICE B. ODEGAARD"
------------------------------------
JANICE B. ODEGAARD
Assistant Secretary
