Cash Flow represents net income before exploration costs, DD&A, impairment, deferred taxes and other non-cash expenses. Cash flow is used by the Company to assess operating results between years and between peer companies using different accounting policies. Cash flow should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities or net income as determined in accordance with IFRS as an indicator of the Company's performance or liquidity.
The company's 2013 cash provided by operating activities is expected to be $1.8 billion.
Capital (or "capital spend" or "exploration and development spending") is calculated by adjusting the capital expenditure per the financial statements for exploration costs that were expensed as incurred, including the capital spend of the jointly controlled entities of the company.
------------------------------------------------------------------- Year Ended-------------------------------------------------------------------(US$ millions) December 31, 2012--------------------------------------------------------------------------------------------------------------------------------------Exploration, development and other 3,658-------------------------------------------------------------------Exploration expensed 346-------------------------------------------------------------------Capital 4,004-------------------------------------------------------------------
The company's 2013 estimated capital expenditure, pursuant to IFRS, is expected to be $2 billion.
Forecasted Cash Flow and Forecasted Free Cash Flow:
This news release also contains discussions of anticipated cash flow and anticipated free cash flow both on an aggregate and per share basis. The material assumptions used in determining estimates of cash flow are: the anticipated production volumes; estimates of realized sales prices, which are in turn driven by benchmark prices, quality differentials and the impact of exchange rates; estimated royalty rates; estimated operating expenses; estimated transportation expenses; estimated general and administrative expenses; estimated interest expense, including the level of capitalized interest; and the anticipated amount of cash income tax and petroleum revenue tax. The amount of is inherently difficult to predict.
Anticipated production volumes are, in turn, based on the midpoint of the estimated production range and do not reflect the impact of any potential asset dispositions or acquisitions. The completion of any contemplated asset acquisitions or dispositions is contingent on various factors including favourable market conditions, the ability of the Company to negotiate acceptable terms of sale and receipt of any required approvals for such acquisitions or dispositions.
In addition to the assumptions that underpin forecasted cash flow, forecasted free cash flow also includes assumptions around capital investments and financing activities.
Contacts:
Talisman Energy Inc. - Media and General Inquiries
Phoebe Buckland
Manager, External Communications
403-237-1657
tlm@talisman-energy.com
Talisman Energy Inc. - Shareholder and Investor Inquiries
Lyle McLeod
Vice-President, Investor Relations
403-767-5732
tlm@talisman-energy.com
www.talisman-energy.com
