Talisman’s net income for the year was $1 billion or $7.65 per share. During 2003, the Company generated $2.7 billion in cash flow ($21.21 per share), which was used to fund $2.2 billion of exploration and development expenditures. The Company also paid dividends of $90 million ($0.70 per share) to common shareholders during the year.

Exploration and Development Expenditures

Talisman’s exploration and development expenditures were $2.2 billion in 2003. North America accounted for $1.1 billion of the year’s capital expenditures. The Company’s North Sea operations spent $496 million on exploration and development. The Malaysian and Vietnam capital spending primarily related to the Company’s offshore development project that straddles the border of the two countries which came on stream in 2003. An offshore development in Trinidad, which is scheduled to startup in 2005, accounts for the majority of Talisman’s spending in that country. Examples of capital spending include drilling oil and natural gas wells, land purchases, the expansion or building of infrastructure facilities such as pipelines, pumping stations and offshore production platforms.

Remuneration

Talisman also contributes to the communities in which it works through employee remuneration including salary, benefits and bonuses (see page 22 for more information). Total remuneration provided to permanent employees in 2003 was approximately $250 million.

Community Contributions

Talisman maintains a corporate contributions program focused in the areas of health and welfare, education, the arts, the environment and community causes. As previously described on page 16, the Company contributed approximately $5.1 million to several hundred community projects across our global operations.

Financial and Operating Statistics (millions of dollars unless otherwise stated)
	Production (mboe/d)		Gross Sales Revenue1		Exploration and Development Expenditures		Employee Remuneration
	2003	2002	2003	2002	2003	2002	20033	2002
Canada	193.5	199	2,526	2,008	1,047	792	187	112
US	10.0	0.4	177	6	62	30	1	—
North America	203.5	199.4	2,703	2,014	1,109	822	188	112
United Kingdom	126.7	145.6	1,678	1,945	481	417	40	32
Norway	2.8	—	37	—	12	—	4	—
Netherlands	1.8	2.2	23	26	3	14	0.5	—
North Sea	131.3	147.8	1,738	1,971	496	431	45	32
Indonesia	34.4	32.6	417	408	26	73	2	10
Malaysia	9.0	5.1	125	71	275	190	14	12
Vietnam	0.5	0.5	14	7	15	6	—	—
Southeast Asia	43.9	38.2	556	486	316	269	16	22
Algeria	6.6	—	89	—	34	107	—	—
Sudan	13.0	60	209	828	2	98	—	10
Trinidad	—	—	—	—	130	78	—	—
Colombia	—	—	—	—	21	21	—	—
Qatar	—	—	—	—	4	—	—	—
Other2	—	—	—	—	68	22	—	—
Rest of world	—	—	—	—	223	121	—	—
Total company	398.3	445.4	5,295	5,299	2,180	1,848	249	176
1 Gross sales revenue from oil, natural gas and natural gas liquids before royalties. 2 The majority of E&D expenditures in Other relates to Frontier North America and unallocated head office exploration costs. 3 For Indonesia, Sudan, Trinidad and Qatar, expatriate remuneration is included in the home country totals for 2003, resulting in significant change from 2002. Where remuneration is not reported, contractors are compensated through third parties.

Operating Statistics (millions of dollars unless otherwise stated)
	Fiscal Contributions to Host Governments						Community Contributions
	Royalties1		Taxes2		Total
	2003	2002	2003	2002	2003	2002	2003	2002
Canada	562	372	18	(21)	580	351	1.60	1.26
US	25	1	3	1	28	2	0.05	—
North America	587	373	21	(20)	608	353	1.65	1.26
United Kingdom	8	96	167	220	175	316	0.66	0.80
Norway	—	—	(6)	—	(6)	—	—	—
Netherlands	—	—	7	—	7	—	—	—
North Sea	8	96	168	220	176	316	0.66	0.80
Indonesia	113	107	83	76	196	183	0.75	0.61
Malaysia	40	22	1	2	41	24	0.01	0.024
Vietnam	3	1	3	1	6	2	0.01	—
Southeast Asia	156	130	87	79	243	209	0.77	0.63
Algeria	46	—	—	—	46	—	0.09	—
Sudan	97	328	17	68	114	396	1.49	6.62
Trinidad	—	—	—	—	—	—	0.27	0.08
Colombia	—	—	—	—	—	—	0.11	0.34
Qatar	—	—	—	—	—	—	—	—
Other3	—	—	8	3	8	3	—	—
Rest of world	—	—	8	3	8	3	0.38	0.42
Total company	894	927	301	350	1,195	1,277	5.045	9.73
1 Royalties represent cash payments, and in certain foreign operations, the entitlement of the respective governments to a    portion of Talisman’s share of production. 2 Current tax expense and current Production Revenue Taxes. 3 The majority of current tax expense in Other represents payment of Swedish taxes. 4 Total contributions in Malaysia and Vietnam were approximately $20,000 in 2002. 5 The discrepency between this total and the total on page 16 is due to rounding.

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