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## Consolidated Results of Operations 

Income from continuing operations was $467 million in 2003 compared with a loss of $245 million, including impair- ments, in 2002 and income of $816 million in 2001. Including income from discontinued operations, net income for 2003 was $643 million, compared with a net loss of $218 million in 2002 and net income of $914 million in 2001. 

The after-tax results by major operating activity for 2003, 2002 and 2001 are summarized below: 

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In the discussion which follows, the financial effects of cer- tain transactions are disclosed on an after-tax basis. Man- agement reviews segment earnings on an after-tax basis and uses after-tax amounts in its review of variances in seg- ment earnings. Management believes that after-tax amounts are a preferable method of explaining variances in earnings, since they show the entire effect of a transaction rather than only the pre-tax amount. After-tax amounts are determined by applying the appropriate income tax rate in each tax jurisdiction to pre-tax amounts. 

The following items, on an after-tax basis, are included in income from continuing operations for the years 2003, 2002 and 2001: 

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The items in the table above are explained on pages 18, 19 and 20. The pre-tax amounts are shown on pages 18 and 20. 

## Comparison of Results 

Exploration and Production: After considering the explo- ration and production items in the preceding table (described on page 18), the remaining changes in explo- ration and production earnings are primarily attributable to changes in selling prices, production volumes and operating costs and exploration expenses, as discussed below. 

Selling prices: Higher average selling prices of crude oil, natural gas liquids and natural gas increased exploration and production revenues from continuing operations by approximately $170 million in 2003 compared with 2002. In 2002, the change in average selling prices did not significantly affect revenues compared with 2001. The Cor- poration’s average selling prices from continuing opera- tions, including the effects of hedging, were as follows: 

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