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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2005

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _____ to _____

Commission File Number 1-16619


KERR-McGEE CORPORATION
(Exact Name of Registrant as Specified in its Charter)



Delaware
73-1612389
(State or Other Jurisdiction of
(I.R.S. Employer
Incorporation or Organization)
Identification No.)


Kerr-McGee Center, Oklahoma City, Oklahoma 73125
(Address of Principal Executive Offices and Zip Code)

Registrant's telephone number, including area code (405) 270-1313


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x    No o 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x    No o 

Number of shares of common stock, $1.00 par value, outstanding as of April 30, 2005: 161,567,286.









 
KERR-McGEE CORPORATION
  
     
 
INDEX
  
   
PAGE
PART I - FINANCIAL INFORMATION
  
     
Item 1. Financial Statements
  
 
    
 
Condensed Consolidated Statement of Income for the Three Months Ended March 31, 2005 and 2004
1
 
    
 
Condensed Consolidated Balance Sheet at March 31, 2005 and December 31, 2004
2
 
    
 
Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2005 and 2004
3
 
    
 
Condensed Consolidated Statement of Comprehensive Income (Loss) and Stockholders’ Equity for the Three Months Ended March 31, 2005 and 2004
4
     
 
Notes to Condensed Consolidated Financial Statements
5
     
Item 2. Management's Discussion and Analysis of Financial Condition
           and Results of Operations
27
 
 
  
Item 3. Quantitative and Qualitative Disclosures about Market Risk
41
 
 
  
Item 4. Controls and Procedures
44
     
Forward-Looking Information
44
   
   
PART II - OTHER INFORMATION
  
 
 
  
Item 1. Legal Proceedings
44
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
45
   
Item 6. Exhibits
46
 
 
  
SIGNATURE
46
 
 
  
   



PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)


   
Three Months Ended
  
   
March 31,
  
(Millions of dollars, except per-share amounts)
  
2005
  
2004
  
           
Revenues
  
$
1,717
  
$
1,109
  
               
Costs and Expenses
              
Costs and operating expenses
    
521
    
395
  
Selling, general and administrative expenses
    
92
    
81
  
Shipping and handling expenses
    
48
    
38
  
Depreciation and depletion
    
310
    
190
  
Accretion expense
    
9
    
7
  
Asset impairments
    
4
    
13
  
(Gain) loss associated with assets held for sale
    
(22
)
  
3
  
       Exploration, including dry hole and amortization of undeveloped leases     63      51  
Taxes, other than income taxes
    
47
    
28
  
Provision for environmental remediation and restoration, net of reimbursements
    
24
    
(1
)
Interest and debt expense
    
61
    
57
  
Total Costs and Expenses
    
1,157
    
862
  
               
     
560
    
247
  
Other Income (Expense)
    
(1
)
  
-
  
               
Income from Continuing Operations before Income Taxes
    
559
    
247
  
Provision for Income Taxes
    
(204
)
  
(92
)
               
Income from Continuing Operations
    
355
    
155
  
Loss from Discontinued Operations (net of income tax benefit of $1)
    
-
    
(3
)
               
Net Income
 
$
355
  
$
152
  
               
Income (Loss) per Common Share
              
Basic -
              
Continuing operations
  
$
2.29
  
$
1.55
  
Discontinued operations
    
-
    
(.03
)
Net income
  
$
2.29
  
$
1.52
  
               
Diluted -
              
Continuing operations
  
$
2.20
  
$
1.44
  
Discontinued operations
    
-
    
(.03
)
Net income
  
$
2.20
  
$
1.41
  
               
Dividends Declared per Common Share
  
$
.45
  
$
.45
  
               
               



The accompanying notes are an integral part of this statement.

- 1 -

KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)

   
March 31,
 
December 31,
 
(Millions of dollars)
  
2005
  
2004
  
   
 
  
 
  
ASSETS
  
Current Assets
    
   
 
Cash and cash equivalents
  
$
201
  
$
76
  
Accounts receivable
    
890
    
963
  
Inventories
    
364
    
329
  
Derivatives and other current assets
    
205
    
195
  
Deferred income taxes
    
397
    
324
  
Total Current Assets
    
2,057
    
1,887
  
               
Property, Plant and Equipment
    
19,297
    
18,984
  
Less reserves for depreciation, depletion and amortization
    
(8,430
)
  
(8,157
)
     
10,867
    
10,827
  
               
Investments, Derivatives and Other Assets
    
546
    
508
  
Goodwill and Other Intangible Assets
    
1,284
    
1,288
  
Long-Term Assets Associated with Properties Held for Disposal
    
4
    
8
  
               
Total Assets
  
$
14,758
  
$
14,518
  

LIABILITIES AND STOCKHOLDERS' EQUITY
  
Current Liabilities
          
Accounts payable
  
$
628