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NEW YORK--(BUSINESS WIRE)--Jan. 26, 2005--Amerada Hess Corporation (NYSE: AHC) reported net income of $229 million for the fourth quarter of 2004 compared with income of $68 million for the fourth quarter of 2003. For the full year, net income was $977 million compared with income of $643 million in 2003. See the following page for a table of items affecting the comparability of earnings between periods. The after-tax results by major operating activity in 2004 and 2003 are as follows:
Three months ended Year ended
December 31 December 31
------------------- ---------------
2004* 2003* 2004* 2003
--------- -------- -------- ------
(In millions, except per share amounts)
Exploration and production $211 $83 $755 $414
Refining and marketing 93 55 451 327
Corporate (36) (29) (85) (101)
Interest expense (39) (41) (151) (173)
--------- -------- -------- ------
Income from continuing operations 229 68 970 467
Discontinued operations
Net gains from asset sales - - - 116
Income from operations - - 7 53
Income from cumulative effect of
accounting change - - - 7
--------- -------- -------- ------
Net income $229 $68 $977 $643
========= ======== ======== ======
Income per share from continuing
operations (diluted) $2.22 $.71 $9.50 $5.17
========= ======== ======== ======
Net income per share (diluted) $2.22 $.71 $9.57 $7.11
========= ======== ======== ======
* Unaudited
Exploration and production earnings were $211 million in the fourth quarter of 2004 compared with $83 million in the fourth quarter of 2003. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 346,000 barrels per day in the fourth quarter of 2004, a decrease of 3% from the fourth quarter of 2003. In the fourth quarter of 2004, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was $27.15 per barrel, an increase of $1.81 per barrel from the fourth quarter of 2003. The Corporation's average United States natural gas selling price was $5.83 per Mcf in the fourth quarter of 2004, an increase of $1.87 per Mcf from the fourth quarter of 2003.
The Corporation has two exploration wells currently drilling in the Gulf of Mexico that have been capitalized on its balance sheet at December 31, 2004. The accounting treatment for these costs will be determined when drilling is completed, which is currently anticipated prior to the filing of the Corporation's Form 10-K in March. If either or both of these wells are unsuccessful, the applicable well costs through December 31, 2004 will be expensed, reducing exploration and production earnings up to $35 million, after-tax.
Refining and marketing earnings were $93 million in the fourth quarter of 2004 compared with $55 million in the fourth quarter of 2003. The increase is primarily due to higher refining margins and increased earnings from retail marketing operations.
The following items, on an after-tax basis, are included in net income in the fourth quarter and full year of 2004 and 2003 (in millions):
Three months ended Year ended
December 31 December 31
------------------ -------------
2004 2003 2004 2003
---------- ------- ------- -----
Gains (losses) from asset sales:
Exploration and production $21 $- $54 $31
Refining and marketing - - - (20)
Income tax adjustments 19 - 32 30
LIFO inventory liquidation 12 - 12 -
Corporate insurance accrual (13) - (13) -
Accrued severance and office costs - (9) (9) (32)
Premiums on bond repurchases - (19) - (34)
---------- ------- ------- -----
$39 $(28) $76 $(25)
========== ======= ======= =====
The fourth quarter 2004 asset sale reflects the disposal of two mature Gulf of Mexico properties. Exploration and production earnings also include foreign income tax benefits in the fourth quarter of 2004 resulting from a change in tax law and a tax settlement. Refining and marketing results include income in the fourth quarter as a result of a partial liquidation of prior year LIFO inventories.
Capital expenditures for the year 2004 amounted to $1,521 million of which $1,434 million related to exploration and production activities. Capital expenditures for the year 2003 amounted to $1,358 million, including $1,286 million for exploration and production.
Consolidated Financial Information (unaudited)
Three months ended Year ended
December 31 December 31
-------------------- -------------------
2004* 2003* 2004* 2003
---------- --------- ---------- --------
Income Statement Information (In millions, except per share amounts)
------------------------------
Sales and other operating
revenues $4,612 $3,628 $16,733 $14,311
========== ========= ========== ========
Income from continuing
operations $229 $68 $970 $467
Discontinued operations
Net gains from asset
sales - - - 116
Income from operations - - 7 53
Cumulative effect of
accounting change - - - 7
---------- --------- ---------- --------
Net income $229 $68 $977 $643
========== ========= ========== ========
Income per share from
continuing operations
(diluted) $2.22 $.71 $9.50 $5.17
========== ========= ========== ========
Net income per share
(diluted) $2.22 $.71 $9.57 $7.11
========== ========= ========== ========
Weighted average number
of shares (diluted) 103.0 89.2 102.1 90.3
========== ========= ========== ========
* Unaudited
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Fourth Fourth Third
Quarter Quarter Quarter
2004 2003 2004
Line ----------- ---------- --------
No. (A) (B) (C)
---
Income Statement
---------------------------
Revenues and Non-operating
Income
1 Sales and other operating
revenues $ 4,612 $ 3,628 $ 3,830
Non-operating income
2 Gain on asset sales 32 -- --
3 Equity in income of
HOVENSA L.L.C. 21 10 75
4 Other 32 (30) 25
----------- ---------- --------
5 Total revenues and non-
operating income 4,697 3,608 3,930
----------- ---------- --------
Costs and Expenses
6 Cost of products sold 3,321 2,523 2,742
7 Production expenses 239 207 202
8 Marketing expenses 200 201 186
9 Exploration expenses,
including dry holes
and lease impairment 83 116 64
10 Other operating expenses 48 49 52
11 General and administrative
expenses 90 87 81
12 Interest expense 62 69 62
13 Depreciation, depletion
and amortization 275 254 230
----------- ---------- --------
14 Total costs and
expenses 4,318 3,506 3,619
----------- ---------- --------
15 Income before income
taxes 379 102 311
16 Provision for income
taxes 150 34 133
----------- ---------- --------
17 Net income $ 229 $ 68 $ 178
=========== ========== ========
18 Preferred stock dividends 12 5 12
----------- ---------- --------
19 Net income applicable to
common stockholders $ 217 $ 63 $ 166
=========== ========== ========
Segment Earnings Analysis
---------------------------
20 Exploration and
production $ 211 $ 83 $ 155
21 Refining and marketing 93 55 85
22 Corporate (36) (29) (23)
23 Interest expense (39) (41) (39)
----------- ---------- --------
24 Net income $ 229 $ 68 $ 178
=========== ========== ========
25 Net Cash Provided by
Operating Activities (*) $ 254 $ 423 $ 817
--------------------------- =========== ========== ========
Capital Expenditures
---------------------------
26 Exploration and
production $ 387 $ 328 $ 338
27 Refining and marketing 42 14 18
----------- ---------- --------
28 Total capital
expenditures $ 429 $ 342 $ 356
=========== ========== ========
At End of Period
---------------------------
29 Total debt $ 3,835 $ 3,941 $ 3,836
=========== ========== ========
30 Stockholders' equity $ 5,597 $ 5,340 $ 5,261
=========== ========== ========
(*) Includes changes in working capital.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Year
--------------------
2004 2003
Line -------- ----------
No. Income Statement (A) (B)
--- ---------------------------------------
Revenues and Non-operating Income
1 Sales and other operating revenues $16,733 $ 14,311
Non-operating income
2 Gain on asset sales 55 39
3 Equity in income of HOVENSA L.L.C. 244 117
4 Other 94 13
-------- ----------
5 Total revenues and non-operating
income 17,126 14,480
-------- ----------
Costs and Expenses
6 Cost of products sold 11,971 9,947
7 Production expenses 825 796
8 Marketing expenses 737 709
9 Exploration expenses, including dry
holes and lease impairment 287 369
10 Other operating expenses 195 192
11 General and administrative expenses 342 340
12 Interest expense 241 293
13 Depreciation, depletion and
amortization 970 1,053
-------- ----------
14 Total costs and expenses 15,568 13,699
-------- ----------
15 Income from continuing operations
before income taxes 1,558 781
16 Provision for income taxes 588 314
-------- ----------
17 Income from continuing operations 970 467
18 Discontinued operations 7 169
19 Cumulative effect of change in
accounting principle, net -- 7
-------- ----------
20 Net income $ 977 $ 643
======== ==========
21 Preferred stock dividends 48 5
-------- ----------
22 Net income applicable to common
stockholders $ 929 $ 638
======== ==========
23 Net Cash Provided by Operating
Activities (*) $ 1,903 $ 1,581
--------------------------------------- ======== ==========
Capital Expenditures
---------------------------------------
24 Exploration and production $ 1,434 $ 1,286
25 Refining and marketing 87 72
-------- ----------
26 Total capital expenditures $ 1,521 $ 1,358
======== ==========
December December
31 31
2004 2003
-------- ----------
Balance Sheet Information
---------------------------------------
27 Current assets $ 4,411 $ 3,186
28 Investments 1,254 1,095
29 Property, plant and equipment - net 8,505 7,978
30 Other assets 2,217 1,724
-------- ----------
31 Total assets $16,387 $ 13,983
======== ==========
32 Current portion of long-term debt $ 50 $ 73
33 Other current liabilities 4,723 2,596
34 Long-term debt 3,785 3,868
35 Deferred liabilities and credits 2,232 2,106
36 Stockholders' equity excluding other
comprehensive income (loss) 6,621 5,690
37 Accumulated other comprehensive
income (loss) (1,024) (350)
-------- ----------
38 Total liabilities and stockholders'
equity $16,387 $ 13,983
======== ==========
(*) Includes changes in working capital.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Fourth Fourth Third
Quarter Quarter Quarter
2004 2003 2004
------- ------- -------
Line (A) (B) (C)
No. Operating Data
--- -------------------------------------
Net Production Per Day
------------------------------------
Crude oil - barrels
1 United States 50 40 44
2 United Kingdom 61 79 66
3 Norway 29 27 23
4 Equatorial Guinea 26 18 28
5 Algeria 25 19 22
6 Denmark 24 23 20
7 Gabon 11 12 12
8 Azerbaijan 2 2 2
9 Indonesia -- 1 --
------- ------- -------
10 Total 228 221 217
======= ======= =======
Natural gas liquids - barrels
11 United States 14 10 12
12 United Kingdom 5 7 5
13 Norway 1 1 1
14 Indonesia and Thailand 2 2 2
------- ------- -------
15 Total 22 20 20
======= ======= =======
Natural gas - mcf
16 United States 178 213 164
17 United Kingdom 262 339 224
18 Norway 28 28 25
19 Denmark 26 23 21
20 Indonesia and Thailand 82 88 82
------- ------- -------
21 Total 576 691 516
======= ======= =======
22 Barrels of oil equivalent 346 356 323
======= ======= =======
Average Selling Price (including
hedging)
------------------------------------
Crude oil - per barrel
23 United States $29.92 $25.06 $28.26
24 Foreign 26.38 25.40 26.16
Natural gas liquids - per barrel
25 United States $33.31 $24.01 $31.73
26 Foreign 38.53 24.71 29.04
Natural gas - per mcf
27 United States $5.83 $3.96 $4.40
28 Foreign 4.37 3.74 3.65
Marketing and Refining -
------------------------
Barrels Per Day
---------------
29 Refined products sold 430 423 394
======= ======= =======
30 Refinery runs (net) 236 225 240
======= ======= =======
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Year
----------------
2004 2003
------- -------
Line (A) (B)
No. Operating Data
--- --------------------------------------------
Net Production Per Day
------------------------------------------
Crude oil - barrels
1 United States 44 44
2 United Kingdom 70 89
3 Norway 27 24
4 Equatorial Guinea 26 22
5 Algeria 23 19
6 Denmark 22 24
7 Gabon 12 11
8 Azerbaijan 2 2
9 Indonesia -- 1
10 Colombia -- 3
------- -------
11 Total 226 239
======= =======
Natural gas liquids - barrels
12 United States 12 11
13 United Kingdom 5 6
14 Norway 1 1
15 Indonesia and Thailand 2 2
------- -------
16 Total 20 20
======= =======
Natural gas - mcf
17 United States 171 253
18 United Kingdom 268 312
19 Norway 27 26
20 Denmark 24 29
21 Indonesia and Thailand 85 63
------- -------
22 Total 575 683
======= =======
23 Barrels of oil equivalent (*) 342 373
======= =======
Average Selling Price (including hedging)
-----------------------------------------
Crude oil - per barrel
24 United States $27.42 $24.23
25 Foreign 26.40 24.93
Natural gas liquids - per barrel
26 United States $29.50 $23.74
27 Foreign 30.02 24.09
Natural gas - per mcf
28 United States $5.18 $4.02
29 Foreign 3.94 3.01
Marketing and Refining -
------------------------
Barrels Per Day
---------------
30 Refined products sold 428 419
======= =======
31 Refinery runs (net) 242 220
======= =======
(*) Includes production from properties classified as discontinued
operations of 13 thousand barrels of oil equivalent per day in the
year of 2003.
Amerada Hess Corporation
Table of Pre-Tax Items
In the table on page 2, 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. Management believes that after-tax amounts 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 the applicable items included in net income which are shown on an after-tax basis on page 2 (in millions):
Three months ended Year ended
December 31 December 31
------------------- -------------
2004 2003 2004 2003
------------ ------ ------- -----
Gains (losses) from asset sales:
Exploration and production $32 $- $55 $47
Refining and marketing - - - (9)
LIFO inventory liquidation 20 - 20 -
Corporate insurance accrual (20) - (20) -
Accrued severance and office costs - (15) (15) (53)
Premiums on bond repurchases - (31) - (58)
------------ ------ ------- -----
$32 $(46) $40 $(73)
============ ====== ======= =====
CONTACT:
Amerada Hess Corporation
J.R. Wilson, 212/536-8940
SOURCE: Amerada Hess Corporation