Net income in the fourth quarter of 2010 was $706 million, or $0.99 per diluted share, but included income from the Refining, Marketing and Transportation business, which was spun off June 30, 2011 and is now reported as discontinued operations. As a result, income from continuing operations is best suited for comparison. For the fourth quarter of 2011, adjusted income from continuing operations was $552 million, or $0.78 per diluted share, compared to adjusted income from continuing operations of $494 million, or $0.70 per diluted share, for the fourth quarter 2010.
Marathon reported full-year 2011 net income of $2.946 billion, or $4.13 per diluted share. Net income in 2010 was $2.568 billion, or $3.61 per diluted share. For the full-year 2011, adjusted income from continuing operations was $2.293 billion, or $3.21 per diluted share, compared to adjusted income from continuing operations of $1.891 billion, or $2.66 per diluted share, for full-year 2010.
"2011 was truly a landmark year for Marathon Oil. We completed the spin-off of our downstream business into an independent company and closed a major acquisition giving us a top-five acreage position in the core of the Eagle Ford Shale, the premier U.S. liquids resource play. With our highest level of rig activity in many years, Upstream production available for sale increased 7 percent year over year, excluding Libya. We replaced 212 percent of our 2011 total production from Exploration and Production (E&P) and Oil Sands Mining (OSM), increasing our total proved reserves to 1.8 billion barrels of oil equivalent (boe), up from 1.6 billion boe at year end 2010. For the E&P segment alone, 2011 reserve replacement was 185 percent including acquisitions, 102 percent excluding acquisitions. Importantly, we achieved these strong operational results while keeping capital spending below our original estimate, excluding acquisitions. Furthermore, full-year adjusted income from continuing operations increased 20 percent and cash flow from continuing operations increased approximately 30 percent over last year - due in large part to Marathon Oil's strong portfolio leveraged to liquid hydrocarbons," said Clarence P. Cazalot Jr., Marathon Oil's chairman, president and CEO.
"Marathon Oil begins 2012 as a strong independent E&P company. Our base assets continue to generate significant cash flow and our well-positioned growth assets in liquids-rich U.S. resource plays are expected to drive 5 to 7 percent compound average production growth, 80 percent of which is estimated to be liquids, from 2010 to 2016. With a continued focus on capital discipline, we remain committed to delivering top quartile total shareholder returns," Cazalot said.
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