The standardized measure of discounted future net cash flows relating to proved oil and gas reserves required to be disclosed by FAS No. 69 is based on assumptions and judgements. As a result, the future net cash flow estimates are highly subjective and could be materially different if other assumptions were used. Therefore, caution should be exercised in the use of the data presented below. Future net cash flows are calculated by applying year-end oil and gas selling prices (adjusted for price changes provided by contractual arrangements) to estimated future production of proved oil and gas reserves, less estimated future devel- opment and production costs, which are based on year-end costs and existing economic assumptions. Future income tax expenses are computed by applying the appropriate year-end statutory tax rates to the pre-tax net cash flows relating to the Corporation’s proved oil and gas reserves. Future net cash flows are discounted at the prescribed rate of 10%. No recognition is given in the discounted future net cash flow estimates to depreciation, depletion, amortization and lease impairment, exploration expenses, interest expense, corporate general and administrative expenses and changes in future prices and costs. The selling prices of crude oil and natural gas are highly volatile. The year-end prices, which are required to be used for the discounted future net cash flows and do not include the effects of hedges, may not be representative of future selling prices. STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS RELATING TO PROVED OIL AND GAS RESERVES 62 United Africa, Asia At December 31 (Millions of dollars) Total States Europe and other 2003 Future revenues $27,649 $5,742 $12,417 $9,490 Less: Future development and production costs 10,065 1,546 5,181 3,338 Future income tax expenses 5,848 1,299 3,496 1,053 15,913 2,845 8,677 4,391 Future net cash flows 11,736 2,897 3,740 5,099 Less: Discount at 10% annual rate 4,719 1,062 1,333 2,324 Standardized measure of discounted future net cash flows $ 7,017 $1,835 $ 2,407 $2,775 2002 Future revenues $27,994 $6,219 $13,203 $8,572 Less: Future development and production costs 10,133 1,843 4,863 3,427 Future income tax expenses 6,661 1,228 4,042 1,391 16,794 3,071 8,905 4,818 Future net cash flows 11,200 3,148 4,298 3,754 Less: Discount at 10% annual rate 4,115 1,178 1,441 1,496 Standardized measure of discounted future net cash flows $ 7,085 $1,970 $ 2,857 $2,258 Share of equity investees’ standardized measure $ 587 $ GLYPH<209> $ 23 $ 564 2001 Future revenues $22,666 $4,884 $10,569 $7,213 Less: Future development and production costs 10,335 1,817 4,889 3,629 Future income tax expenses 3,989 686 2,495 808 14,324 2,503 7,384 4,437 Future net cash flows 8,342 2,381 3,185 2,776 Less: Discount at 10% annual rate 3,286 809 1,132 1,345 Standardized measure of discounted future net cash flows $ 5,056 $1,572 $ 2,053 $1,431 Share of equity investees’ standardized measure $ 543 $ GLYPH<209> $ 28 $ 515