ANNUAL REPORT 2005 - Lukoil

FINANCIAL ACCOUNTS
OAO LUKOIL
Consolidated Statements of Cash Flows
For the years ended December 31, 2005, 2004 and 2003
(Millions of US dollars)
Cash flows from operating activities
Note 2005 2004 2003
Net income 6,443 4,248 3,701
Adjustments for non-cash items:
Cumulative effect of change in accounting principle - - (132)
Depreciation, depletion and amortization 1,315 1,075 920
Equity share in income of affiliates (397) (169) (122)
Gain from sale of interest in Azeri Chirag Guneshli 10 - - (1,130)
Dry hole costs 170 42 48
(Gain) loss on disposals and impairments of assets (52) 213 69
Deferred income taxes 166 146 68
Non-cash currency translation (gain) loss (26) (4) 17
Non-cash investing activities (133) (123) (64)
All other items – net 151 97 32
Changes in operating assets and liabilities:
Accounts and notes receivable (1,314) (694) (797)
Short-term loans receivable of a banking subsidiary (23) (101) (223)
Customer deposits placed in a banking subsidiary 49 (90) 341
Inventories (735) (571) (153)
Accounts payable 245 306 186
Taxes payable 705 310 284
Other current assets and liabilities (467) (505) (109)
Net cash provided by operating activities 6,097 4,180 2,936
Cash flows from investing activities
Capital expenditures (3,982) (3,248) (2,881)
Proceeds from sale of property, plant and equipment 51 99 62
Purchases of investments (242) (540) (459)
Proceeds from sale of investments 234 242 374
Proceeds from sale of interest in Azeri Chirag Guneshli 10 - - 1,337
Sale of interests in subsidiaries and affiliated companies 588 183 -
Acquisitions of subsidiaries and minority shareholding
interest (including advances related to these acquisitions),
net of cash acquired (2,874) (477) (1,225)
Net cash used in investing activities (6,225) (3,741) (2,792)
The accompanying notes are an integral part of these consolidated financial statements.
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