EOG Resources 2004 Annual Report to Shareholders

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Management’s Discussion and Analysis

Management’s Responsibility for Financial Reporting

Report of Independent Registered Public Accountanting Firm

Consolidated Statements of Income & Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Supplemental Information to Consolidated Financial Statements

Selected Financial Data

Quarterly Stock Data and Related Shareholder Matters

Reconciliation Schedules

Certifications & Glossary of Terms

Officers and Directors

Shareholder Information

7. COMMITMENTS AND CONTINGENCIES
Letters Of Credit. At December 31, 2004 and 2003, EOG had standby letters of credit and guarantees outstanding totaling approximately $433 million and $266 million, respectively. Of these amounts, $370 million and $220 million, respectively, represent guarantees of subsidiary indebtedness included under Note 2 “Long-Term Debt” while $63 million and $46 million, respectively, primarily represent guarantees of payment obligations on behalf of subsidiaries. As of February 25, 2005, there were no demands for payment under these guarantees.
Minimum Commitments. At December 31, 2004, total minimum commitments from long-term non-cancelable operating leases, drilling rig commitments, seismic purchase and other purchase obligations, and pipeline transportation service commitments, based on current transportation rates and the foreign currency exchange rates at December 31, 2004, are as follows (in thousands):

Included in the table above are leases for buildings, facilities and equipment with varying expiration dates through 2015. Rental expenses associated with these leases amounted to $26 million, $22 million and $21 million for 2004, 2003 and 2002, respectively.
Contingencies. There are various suits and claims against EOG that have arisen in the ordinary course of business. Management believes that the chance that these suits and claims will individually or in the aggregate have a material adverse effect on the financial condition or results of operations of EOG is remote. When necessary, EOG has made accruals in accordance with SFAS No. 5 - “Accounting for Contingencies,” in order to provide for these matters.

8. NET INCOME PER SHARE AVAILABLE TO COMMON
The following table sets forth the computation of Net Income Per Share Available to Common for the years ended December 31 (in thousands, except per share amounts):

9. SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and income taxes was as follows for the years ended December 31 (in thousands):

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