Amerada Hess Reports Results for the Third Quarter of 2003
October 29 2003 - 7:45AM
PR Newswire (US)
Amerada Hess Reports Results for the Third Quarter of 2003 NEW
YORK, Oct. 29 /PRNewswire-FirstCall/ -- Amerada Hess Corporation
reported net income of $146 million for the third quarter of 2003
compared with a net loss of $136 million for the third quarter of
2002. Results for the third quarter of 2002 included an after-tax
impairment charge of $207 million ($318 million before income
taxes). Net income was $574 million in the first nine months of
2003 compared with $153 million in the corresponding period of
2002. The after-tax results by major operating activity for the
three and nine month periods ended September 30, 2003 and 2002 were
as follows (in millions, except per share amounts): Three months
ended Nine months ended September 30 September 30 (unaudited)
(unaudited) 2003 2002(a) 2003 2002(a) Exploration and production
$124 $(116) $331 $273 Refining and marketing 89 70 272 65 Corporate
(25) (23) (73) (56) Interest expense (42) (36) (132) (127) Income
(loss) from continuing operations 146 (105) 398 155 Discontinued
operations Net gains from asset sales -- -- 116 -- Income (loss)
from operations -- (31) 53 (2) Income from cumulative effect of
accounting change -- -- 7 -- Net income (loss) $146 $(136) $574
$153 Income (loss) per share from continuing operations (diluted)
$1.64 $(1.19) $4.47 $1.73 Net income (loss) per share (diluted)
$1.64 $(1.54) $6.45 $1.72 (a) Reclassified to conform with current
period presentation. The Corporation's oil and gas production, on a
barrel-of-oil equivalent basis, was 339,000 barrels per day in the
third quarter of 2003 compared to 441,000 barrels per day in the
third quarter of 2002. Approximately one-half of the decline in
production resulted from asset sales in connection with the
Corporation's initiatives to reshape its portfolio of producing
properties. In the third quarter of 2003, the Corporation's average
worldwide crude oil selling price, including the effect of hedging,
was $24.65 per barrel, a decrease of $1.44 per barrel from the
third quarter of 2002. The Corporation's average United States
natural gas selling price, including the effect of hedging, was
$3.53 per Mcf in the third quarter of 2003, an increase of $.06 per
Mcf from the third quarter of 2002. Refining and marketing earnings
increased in the third quarter of 2003 compared with the third
quarter of 2002 reflecting higher refining margins and increased
earnings from retail gasoline station operations. Refining and
marketing earnings in the third quarter of 2002 included an
after-tax gain of $67 million ($102 million before income taxes)
from the sale of six United States flag tankers. Corporate expenses
in the first nine months of 2003 include $15 million of after-tax
expense ($27 million before income taxes) from early repayment of
debt. The amount in the corresponding period of 2002 was $4 million
($10 million before income taxes). The following items, on an
after-tax basis, are included in net income in the third quarter
and first nine months of 2003 and 2002 (in millions): Three months
ended Nine months ended September 30 September 30 (unaudited)
(unaudited) 2003 2002 2003 2002 United States income tax benefit
$30 $-- $30 $-- Accrued severance and London office lease costs --
-- (23) -- Asset impairment -- (207) -- (207) Gains (losses) from
asset sales Exploration and production -- (22) 31 20 Refining and
marketing -- 67 (20) 67 Charge for increase in United Kingdom
income tax rate -- (43) -- (43) Reduction in carrying value of
refining and marketing intangible assets and accrued severance --
-- -- (22) $30 $(205) $18 $(185) The third quarter 2003 income tax
benefit of $30 million reflects the recognition for United States
income tax purposes of certain prior year foreign exploration
expenses. Sales and other operating revenues in the third quarter
of 2003 amounted to $3,230 million compared with $2,724 million in
the third quarter of 2002. Capital expenditures in the third
quarter of 2003 amounted to $307 million of which $298 million
related to exploration and production activities. Capital
expenditures in the third quarter of 2002 amounted to $345 million,
including $323 million for exploration and production. Consolidated
Financial Information (unaudited) Three months ended Nine months
ended September 30 September 30 2003 2002 2003 2002 (In millions,
except per share amounts) Sales and other operating revenues $3,230
$2,724 $10,683 $8,345 Income (loss) from continuing operations $146
$(105) $398 $155 Discontinued operations Net gains from asset sales
-- -- 116 -- Income (loss) from operations -- (31) 53 (2)
Cumulative effect of accounting change -- -- 7 -- Net income (loss)
$146 $(136) $574 $153 Income (loss) per share from continuing
operations (diluted) $1.64 $(1.19) $4.47 $1.73 Net income (loss)
per share (diluted) $1.64 $(1.54) $6.45 $1.72 Weighted average
number of shares 89.1 88.3 (*) 89.1 89.3 (*) Represents basic
shares. In the preceding discussion, the financial effects of
certain transactions are disclosed on an after-tax basis.
Management reviews segment earnings on an after-tax basis and uses
after-tax amounts in its review of variances in segment earnings.
Such after-tax amounts may be considered to be non-GAAP financial
measures. Management believes that they are a preferable method of
explaining variances in earnings, since they show the entire effect
of a transaction rather than only the pre-tax amount. After-tax
amounts are determined by applying the appropriate income tax rate
in each tax jurisdiction to pre-tax amounts. The following table
contains the pre-tax amounts of items included in net income which
are shown on an after-tax basis above (in millions): Three months
ended Nine months ended September 30 September 30 (unaudited)
(unaudited) 2003 2002 2003 2002 United States income tax benefit $
-- $ -- $ -- $ -- Accrued severance and London office lease costs
-- -- (38) -- Asset impairment -- (318) -- (318) Gains (losses)
from asset sales Exploration and production -- (35) 47 27 Refining
and marketing -- 102 (9) 102 Charge for increase in United Kingdom
income tax rate -- -- -- -- Reduction in carrying value of refining
and marketing intangible assets and accrued severance -- -- -- (35)
$ -- $ (251) $ -- $ (224) AMERADA HESS CORPORATION AND CONSOLIDATED
SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS)
Third Third Second Quarter Quarter Quarter Line 2003 2002 (*) 2003
No. (A) (B) (C) Income Statement Revenues and Non-operating Income
1 Sales and other operating revenues $ 3,230 $2,724 $ 3,199
Non-operating income 2 Gain (loss) on asset sales -- 68 (9) 3
Equity in income (loss) of HOVENSA L.L.C. 43 (6) 15 4 Other 23 12 8
5 Total revenues and non-operating income 3,296 2,798 3,213 Costs
and Expenses 6 Cost of products sold 2,194 1,650 2,140 7 Production
expenses 207 197 191 8 Marketing expenses 171 144 167 9 Exploration
expenses, including dry holes and lease impairment 59 103 88 10
Other operating expenses 44 40 49 11 General and administrative
expenses 70 70 106 12 Interest expense 73 61 77 13 Depreciation,
depletion and amortization 253 274 270 14 Asset impairment -- 318
-- 15 Total costs and expenses 3,071 2,857 3,088 16 Income (loss)
from continuing operations before income taxes 225 (59) 125 17
Provision for income taxes 79 46 62 18 Income (loss) from
continuing operations 146 (105) 63 Discontinued operations 19 Net
gain from asset sales -- -- 175 20 Income (loss) from operations --
(31) 14 21 Net income (loss) $146 $(136) $252 Segment Earnings
Analysis 22 Exploration and production $124 $(116) $88 23 Refining
and marketing 89 70 46 24 Corporate (25) (23) (27) 25 Interest
expense (42) (36) (44) 26 Income (loss) from continuing operations
146 (105) 63 Discontinued operations 27 Net gain from asset sales
-- -- 175 28 Income (loss) from operations -- (31) 14 29 Net income
(loss) $146 $(136) $252 30 Net Cash Provided by Operating
Activities (**) $99 $433 $571 Capital Expenditures 31 Exploration
and production $298 $323 $339 32 Refining and marketing 9 22 28 33
Total capital expenditures $307 $345 $367 At End of Period 34 Total
debt $4,490 $5,083 $4,642 35 Stockholders' equity $4,714 $4,683
$4,573 (*) Reclassified to conform with current period
presentation. (**) Includes changes in working capital. AMERADA
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL
FINANCIAL DATA (UNAUDITED) (IN MILLIONS) Nine Months Line 2003 2002
(*) No. Income Statement (A) (B) Revenues and Non-operating Income
1 Sales and other operating revenues $10,683 $8,345 Non-operating
income 2 Gain on asset sales 39 129 3 Equity in income (loss) of
HOVENSA L.L.C. 108 (50) 4 Other 42 62 5 Total revenues and
non-operating income 10,872 8,486 Costs and Expenses 6 Cost of
products sold 7,423 5,175 7 Production expenses 589 522 8 Marketing
expenses 508 500 9 Exploration expenses, including dry holes and
lease impairment 253 206 10 Other operating expenses 144 122 11
General and administrative expenses 252 192 12 Interest expense 224
194 13 Depreciation, depletion and amortization 799 853 14 Asset
impairment -- 318 15 Total costs and expenses 10,192 8,082 16
Income from continuing operations before income taxes 680 404 17
Provision for income taxes 282 249 18 Income from continuing
operations 398 155 Discontinued operations 19 Net gain from asset
sales 116 -- 20 Income (loss) from operations 53 (2) 21 Cumulative
effect of change in accounting principle, net 7 -- 22 Net income
$574 $153 23 Net Cash Provided by Operating Activities $1,159
$1,427 Capital Expenditures 24 Exploration and production $958
$1,101 25 Refining and marketing 57 106 26 Total capital
expenditures $1,015 $1,207 September 30 December 31 2003 2002
Balance Sheet Information 27 Current assets $2,538 $2,756 28
Investments 1,048 1,622 29 Property, plant and equipment - net
7,942 7,032 30 Other assets 1,683 1,852 31 Total assets $13,211
$13,262 32 Current portion of long-term debt $189 $16 33 Other
current liabilities 1,986 2,537 34 Long-term debt 4,301 4,976 35
Deferred liabilities and credits 2,021 1,484 36 Stockholders'
equity excluding other comprehensive loss 4,998 4,503 37
Accumulated other comprehensive loss (284) (254) 38 Total
liabilities and stockholders' equity $13,211 $13,262 (*)
Reclassified to conform with current period presentation. AMERADA
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL
OPERATING DATA (IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Third Third Second Quarter Quarter Quarter 2003 2002 2003 Line (A)
(B) (C) No. Operating Data Net Production Per Day Crude oil -
barrels 1 United States 41 53 45 2 United Kingdom 78 112 96 3
Equatorial Guinea 21 39 24 4 Norway 22 26 24 5 Denmark 24 20 23 6
Algeria 23 15 15 7 Gabon 11 8 10 8 Indonesia -- 4 1 9 Azerbaijan 2
4 2 10 Colombia -- 21 -- 11 Total 222 302 240 Natural gas liquids -
barrels 12 United States 12 12 9 13 United Kingdom 4 5 8 14 Norway
1 1 1 15 Indonesia and Thailand 2 3 2 16 Total 19 21 20 Natural gas
- mcf 17 United States 216 355 264 18 United Kingdom 262 227 327 19
Denmark 30 30 28 20 Norway 24 28 28 21 Indonesia and Thailand 59 63
48 22 Total 591 703 695 23 Barrels of oil equivalent (*) 339 441
376 Average Selling Price (including hedging) Crude oil - per
barrel 24 United States $24.33 $26.19 $23.12 25 Foreign 24.72 26.08
24.31 Natural gas liquids - per barrel 26 United States $22.00
$16.08 $21.84 27 Foreign 23.33 19.73 19.44 Natural gas - per mcf 28
United States $3.53 $3.47 $4.09 29 Foreign 2.54 2.17 2.58 Marketing
and Refining - Barrels Per Day 30 Refined products sold 390 355 399
31 Refinery runs (net) 241 174 215 (*) Includes production from
properties classified as discontinued operations of 51 and 14
thousand barrels of oil equivalent per day in the third quarter of
2002 and the second quarter of 2003, respectively. AMERADA HESS
CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL OPERATING
DATA (IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES) Nine Months
2003 2002 Line (A) (B) No. Operating Data Net Production Per Day
Crude oil - barrels 1 United States 45 56 2 United Kingdom 92 113 3
Equatorial Guinea 24 39 4 Norway 23 24 5 Denmark 24 21 6 Algeria 19
14 7 Gabon 10 9 8 Indonesia 2 5 9 Azerbaijan 2 4 10 Colombia 4 22
11 Total 245 307 Natural gas liquids - barrels 12 United States 11
13 13 United Kingdom 6 5 14 Norway 1 1 15 Indonesia and Thailand 2
3 16 Total 20 22 Natural gas - mcf 17 United States 266 390 18
United Kingdom 303 275 19 Denmark 31 36 20 Norway 26 25 21
Indonesia and Thailand 54 42 22 Total 680 768 23 Barrels of oil
equivalent (*) 378 456 Average Selling Price (including hedging)
Crude oil - per barrel 24 United States $23.97 $24.41 25 Foreign
24.79 24.66 Natural gas liquids - per barrel 26 United States
$23.64 $14.73 27 Foreign 22.95 18.05 Natural gas - per mcf 28
United States $4.03 $3.54 29 Foreign 2.73 2.17 Marketing and
Refining - Barrels Per Day 30 Refined products sold 417 376 31
Refinery runs (net) 218 175 (*) Includes production from properties
classified as discontinued operations of 17 and 53 thousand barrels
of oil equivalent per day in the first nine months of 2003 and
2002, respectively. Contact: Amerada Hess Corporation - J. Wilson
(212) 536-8940 DATASOURCE: Amerada Hess Corporation CONTACT: J.
Wilson of Amerada Hess Corporation, +1-212-536-8940
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