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Amerada Hess Reports Estimated Results for the Second Quarter of 2005
07/27/2005
NEW YORK, Jul 27, 2005 (BUSINESS WIRE) -- Amerada Hess Corporation (NYSE: AHC) reported net income of $299 million for the second quarter of 2005 compared with income of $288 million for the second quarter of 2004. 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 2005 and 2004 were as follows:
Three months ended Six months ended
June 30 (unaudited) June 30 (unaudited)
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
(In millions, except per share amounts)
Exploration and production $ 263 $ 182 $ 526 $ 389
Refining and marketing 98 160 161 272
Corporate (28) (24) (97) (26)
Interest expense (34) (37) (72) (73)
--------- --------- --------- ---------
Net income from continuing
operations $ 299 $ 281 $ 518 $ 562
Discontinued operations - 7 - 7
--------- --------- --------- ---------
Net income $ 299 $ 288 $ 518 $ 569
========= ========= ========= =========
Net income per share (diluted) $ 2.89 $ 2.84 $ 5.01 $ 5.61
========= ========= ========= =========
Weighted average number of
shares (diluted) 103.7 101.4 103.5 101.5
========= ========= ========= =========
Exploration and production earnings were $263 million in the second quarter of 2005 compared with $182 million in the second quarter of 2004. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 355,000 barrels per day in the second quarter of 2005 compared with 351,000 barrels per day in the second quarter of 2004. In the second quarter of 2005, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was $32.47 per barrel, an increase of $6.71 per barrel from the second quarter of 2004. The Corporation's average United States natural gas selling price was $6.47 per Mcf in the second quarter of 2005, an increase of $1.24 per Mcf from the second quarter of 2004.
Refining and marketing earnings were $98 million in the second quarter of 2005 compared with $160 million in the second quarter of 2004. The decrease in refining and marketing earnings was primarily due to lower refining results and reduced income from trading activities.
The following items, on an after-tax basis, are included in net income in the second quarter and first half of 2005 and 2004 (in millions):
Three months ended Six months ended
June 30 June 30
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Exploration and production
--------------------------
Income tax adjustments $ 11 $ - $ 11 $ -
Gains from asset sales - 15 11 34
Legal settlement - - 11 -
Corporate
---------
Premiums on bond repurchases (7) - (7) -
Income tax adjustments - - (41) 13
--------- --------- --------- ---------
$ 4 $ 15 $ (15) $ 47
========= ========= ========= =========
The exploration and production income tax benefits in the second quarter reflect the effect on deferred income taxes of a reduction in the income tax rate in Denmark and a tax settlement in the United Kingdom.
Capital and exploratory expenditures in the second quarter of 2005 amounted to $527 million compared with $398 million in the second quarter of 2004. Of these amounts, $507 million and $383 million in the second quarter of 2005 and 2004, respectively, related to exploration and production activities.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Second Second First
Quarter Quarter Quarter
2005 2004 2005
--------- --------- ---------
Income Statement
----------------
Revenues and Non-operating Income
Sales and other operating revenues $ 4,963 $ 3,803 $ 4,957
Non-operating income
Equity in income of HOVENSA L.L.C. 108 97 50
Gain on asset sales -- 3 18
Other 11 33 45
--------- --------- ---------
Total revenues and
non-operating income 5,082 3,936 5,070
--------- --------- ---------
Costs and Expenses
Cost of products sold 3,621 2,618 3,628
Production expenses 242 197 225
Marketing expenses 205 174 197
Exploration expenses, including dry
holes and lease impairment 87 63 133
Other operating expenses 38 47 31
General and administrative expenses 86 96 85
Interest expense 54 60 61
Depreciation, depletion and
amortization 261 239 254
--------- --------- ---------
Total costs and expenses 4,594 3,494 4,614
--------- --------- ---------
Income from continuing operations
before income taxes 488 442 456
Provision for income taxes 189 161 237
--------- --------- ---------
Income from continuing operations 299 281 219
Discontinued operations -- 7 --
--------- --------- ---------
Net income $ 299 $ 288 $ 219
========= ========= =========
Preferred stock dividends 12 12 12
--------- --------- ---------
Net income applicable to common
stockholders $ 287 $ 276 $ 207
========= ========= =========
Supplemental Income Statement
Information
-----------------------------
Foreign currency gains, after-tax $ 8 $ 11 $ 6
Capitalized interest 22 13 14
Cash Flow Information
---------------------
Net cash provided by operating
activities (a) $ 606 $ 438 $ 461
Capital and Exploratory Expenditures
------------------------------------
Exploration and Production
United States $ 93 $ 83 $ 91
International 414 300 364
--------- --------- ---------
Total Exploration and Production 507 383 455
Refining and Marketing 20 15 28
--------- --------- ---------
Total Capital and Exploratory
Expenditures $ 527 $ 398 $ 483
========= ========= =========
Exploration expenses charged to income
included above
United States $ 23 $ 13 $ 8
International 11 13 8
--------- --------- ---------
$ 34 $ 26 $ 16
========= ========= =========
(a) Includes changes in working capital
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
First Half
-------------------
2005 2004
--------- ---------
Income Statement
----------------
Revenues and Non-operating Income
Sales and other operating revenues $ 9,920 $ 8,291
Non-operating income
Equity in income of HOVENSA L.L.C. 158 148
Gain on asset sales 18 23
Other 56 36
--------- ---------
Total revenues and non-operating income 10,152 8,498
--------- ---------
Costs and Expenses
Cost of products sold 7,250 5,906
Production expenses 466 384
Marketing expenses 402 351
Exploration expenses, including dry holes and
lease impairment 220 141
Other operating expenses 69 95
General and administrative expenses 171 172
Interest expense 115 117
Depreciation, depletion and amortization 515 465
--------- ---------
Total costs and expenses 9,208 7,631
--------- ---------
Income from continuing operations before
income taxes 944 867
Provision for income taxes 426 305
--------- ---------
Income from continuing operations 518 562
Discontinued operations -- 7
--------- ---------
Net income $ 518 $ 569
========= =========
Preferred stock dividends 24 24
--------- ---------
Net income applicable to common stockholders $ 494 $ 545
========= =========
Supplemental Income Statement Information
-----------------------------------------
Foreign currency gains, after-tax $ 14 $ 4
Capitalized interest 36 29
Cash Flow Information
---------------------
Net cash provided by operating activities (a) $ 1,067 $ 832
Capital and Exploratory Expenditures
------------------------------------
Exploration and Production
United States $ 183 $ 222
International 778 543
--------- ---------
Total Exploration and Production 961 765
Refining and Marketing 48 27
--------- ---------
Total Capital and Exploratory Expenditures $ 1,009 $ 792
========= =========
Exploration expenses charged to income included
above
United States $ 31 $ 26
International 19 30
--------- ---------
$ 50 $ 56
========= =========
(a) Includes changes in working capital
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
June 30 December 31
2005 2004
------------ ------------
Balance Sheet Information (unaudited)
-------------------------
Cash and short-term investments $ 916 $ 877
Other current assets 3,574 3,458
Investments 1,305 1,254
Property, plant and equipment - net 8,780 8,505
Other assets 2,884 2,218
------------ ------------
Total assets $ 17,459 $ 16,312
============ ============
Current portion of long-term debt $ 25 $ 50
Other current liabilities 6,078 4,647
Long-term debt 3,761 3,785
Deferred liabilities and credits 2,328 2,233
Stockholders' equity excluding other
comprehensive income (loss) 7,134 6,621
Accumulated other comprehensive income
(loss) (1,867) (1,024)
------------ ------------
Total liabilities and stockholders'
equity $ 17,459 $ 16,312
============ ============
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
Second Quarter 2005
----------------------------------
United
States International Total
--------- -------------- ---------
Sales and other operating revenues $ 269 $ 769 $ 1,038
Non-operating income (expenses) (3) 2 (1)
--------- -------------- ---------
Total revenues 266 771 1,037
--------- -------------- ---------
Costs and expenses
Production expenses, including
related taxes 58 184 242
Exploration expenses, including
dry holes and lease impairment 51 36 87
General, administrative and other
expenses 18 17 35
Depreciation, depletion and
amortization 42 205 247
--------- -------------- ---------
Total costs and
expenses 169 442 611
--------- -------------- ---------
Results of operations before
income taxes 97 329 426
Provision for income taxes 34 129 163
--------- -------------- ---------
Results of operations $ 63 $ 200 $ 263
========= ============== =========
Second Quarter 2004
----------------------------------
United
States International Total
--------- -------------- ---------
Sales and other operating revenues $ 201 $ 631 $ 832
Non-operating income (expenses) (8) 27 19
--------- -------------- ---------
Total revenues 193 658 851
--------- -------------- ---------
Costs and expenses
Production expenses, including
related taxes 49 148 197
Exploration expenses, including
dry holes and lease impairment 24 39 63
General, administrative and other
expenses 19 27 46
Depreciation, depletion and
amortization 35 191 226
--------- -------------- ---------
Total costs and
expenses 127 405 532
--------- -------------- ---------
Results of operations before
income taxes 66 253 319
Provision for income taxes 25 112 137
--------- -------------- ---------
Results of operations $ 41 $ 141 $ 182
======== ======== ========
First Quarter 2005
----------------------------------
United
States International Total
--------- -------------- ---------
Sales and other operating revenues $ 279 $ 751 $ 1,030
Non-operating income (expenses) (2) 49 47
--------- -------------- ---------
Total revenues 277 800 1,077
--------- -------------- ---------
Costs and expenses
Production expenses, including
related taxes 49 176 225
Exploration expenses, including
dry holes and lease impairment 109 24 133
General, administrative and other
expenses 19 10 29
Depreciation, depletion and
amortization 44 197 241
--------- -------------- ---------
Total costs and
expenses 221 407 628
--------- -------------- ---------
Results of operations before
income taxes 56 393 449
Provision for income taxes 22 164 186
--------- -------------- ---------
Results of operations $ 34 $ 229 $ 263
========= ============== =========
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
First Half 2005
----------------------------------
United
States International Total
--------- -------------- ---------
Sales and other operating revenues $ 548 $ 1,520 $ 2,068
Non-operating income (expenses) (4) 50 46
--------- -------------- ---------
Total revenues 544 1,570 2,114
--------- -------------- ---------
Costs and expenses
Production expenses, including
related taxes 107 359 466
Exploration expenses, including
dry holes and lease impairment 160 60 220
General, administrative and other
expenses 38 28 66
Depreciation, depletion and
amortization 86 402 488
--------- -------------- ---------
Total costs and expenses 391 849 1,240
--------- -------------- ---------
Results of operations before
income taxes 153 721 874
Provision for income taxes 57 291 348
--------- -------------- ---------
Results of operations $ 96 $ 430 $ 526
========= ============== =========
First Half 2004
----------------------------------
United
States International Total
--------- -------------- ---------
Sales and other operating revenues $ 411 $ 1,289 $ 1,700
Non-operating income (expenses) (4) 35 31
--------- -------------- ---------
Total revenues 407 1,324 1,731
--------- -------------- ---------
Costs and expenses
Production expenses, including
related taxes 89 295 384
Exploration expenses, including
dry holes and lease impairment 63 78 141
General, administrative and other
expenses 36 46 82
Depreciation, depletion and
amortization 64 375 439
--------- -------------- ---------
Total costs and expenses 252 794 1,046
--------- -------------- ---------
Results of operations before
income taxes 155 530 685
Provision for income taxes 57 239 296
--------- -------------- ---------
Results of operations $ 98 $ 291 $ 389
========= ============== =========
AMERADA HESS CORPORATION AND CONSILIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Second Second First
Quarter Quarter Quarter
2005 2004 2005
-------- -------- --------
Operating Data
--------------
Net Production Per Day
----------------------
Crude oil - barrels
United States 47 41 49
Europe 117 127 120
Africa, Asia and other 75 66 69
-------- -------- --------
Total 239 234 238
======== ======== ========
Natural gas liquids - barrels
United States 14 12 13
Europe 5 5 7
-------- -------- --------
Total 19 17 20
======== ======== ========
Natural gas - mcf
United States 148 160 165
Europe 289 358 336
Africa, Asia and other 138 83 103
-------- -------- --------
Total 575 601 604
======== ======== ========
Barrels of oil equivalent 355 351 358
======== ======== ========
Average Selling Price (including hedging)
-----------------------------------------
Crude oil - per barrel
United States $ 32.44 $ 25.27 $ 32.18
Europe 33.22 25.39 31.21
Africa, Asia and other 31.10 27.47 30.92
Natural gas liquids - per barrel
United States $ 34.98 $ 26.33 $ 32.83
Europe 35.49 27.33 31.69
Natural gas - per mcf
United States $ 6.47 $ 5.23 $ 6.15
Europe 4.60 3.47 5.41
Africa, Asia and other 3.95 3.85 3.93
Average Selling Price (excluding hedging)
-----------------------------------------
Crude oil - per barrel
United States $ 47.83 $ 35.54 $ 45.18
Europe 50.10 35.39 46.82
Africa, Asia and other 47.78 35.04 44.87
Natural gas liquids - per barrel
United States $ 34.98 $ 26.33 $ 32.83
Europe 35.49 27.33 31.69
Natural gas - per mcf
United States $ 6.47 $ 5.76 $ 6.15
Europe 4.60 3.47 5.41
Africa, Asia and other 3.95 3.85 3.93
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
First Half
-------------------
2005 2004
-------- --------
Operating Data
--------------
Net Production Per Day
----------------------
Crude oil - barrels
United States 48 40
Europe 118 127
Africa, Asia and other 73 64
-------- --------
Total 239 231
======== ========
Natural gas liquids - barrels
United States 13 12
Europe 6 6
-------- --------
Total 19 18
======== ========
Natural gas - mcf
United States 156 171
Europe 312 346
Africa, Asia and other 121 85
-------- --------
Total 589 602
======== ========
Barrels of oil equivalent 356 349
======== ========
Average Selling Price (including hedging)
-----------------------------------------
Crude oil - per barrel
United States $ 32.31 $ 25.38
Europe 32.30 26.31
Africa, Asia and other 31.00 27.23
Natural gas liquids - per barrel
United States $ 33.94 $ 26.06
Europe 33.69 24.05
Natural gas - per mcf
United States $ 6.30 $ 5.22
Europe 5.03 3.89
Africa, Asia and other 3.95 3.78
Average Selling Price (excluding hedging)
-----------------------------------------
Crude oil - per barrel
United States $ 46.49 $ 34.55
Europe 48.60 33.76
Africa, Asia and other 46.22 33.12
Natural gas liquids - per barrel
United States $ 33.94 $ 26.06
Europe 33.69 24.05
Natural gas - per mcf
United States $ 6.30 $ 5.45
Europe 5.03 3.89
Africa, Asia and other 3.95 3.78
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
HEDGED PRICES AND VOLUMES
WTI Brent
--------------------------- ---------------------------
Average Thousands Average Thousands
Selling of barrels Selling of barrels
Maturity Price per day Price per day
-------------- ------------- ------------- ------------- -------------
2005
3rd Quarter $32.65 28 $30.82 118
4th Quarter 32.16 28 30.37 118
2006 - - 28.10 30
2007 - - 25.85 24
2008 - - 25.56 24
2009 - - 25.54 24
2010 - - 25.78 24
2011 - - 26.37 24
2012 - - 26.90 24
Note: In addition to the income statement effects of the open hedge positions indicated above, the Corporation has after-tax deferred realized losses of $93 million as of June 30 included in accumulated other comprehensive income (loss). These after-tax losses will reduce 2005 income as follows: third quarter - $48 million and fourth quarter - $45 million. There were no natural gas hedges outstanding at June 30.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
REFINING AND MARKETING SUPPLEMENTAL FINANCIAL AND OPERATING DATA
Second Second First
Quarter Quarter Quarter
2005 2004 2005
-------- -------- --------
Financial Information
(in millions)
---------------------
Refining and Marketing
Earnings
----------------------
Income before income taxes $ 151 $ 215 $ 102
Provision for income taxes 53 55 39
-------- -------- --------
Refining and Marketing
Earnings $ 98 $ 160 $ 63
======== ======== ========
Summary of Refining and
Marketing Earnings
-----------------------
Refining $ 77 $ 123 $ 42
Marketing 14 19 13
Trading 7 18 8
-------- -------- --------
Total Refining and
Marketing Earnings $ 98 $ 160 $ 63
======== ======== ========
----------------------------------------------------------------------
Operating Data
(in thousands unless noted)
----------------------------
Refined Product Sales
(barrels per day)
---------------------
Gasoline 227 205 181
Distillates 104 113 166
Residuals 59 51 74
Other 45 35 41
-------- -------- --------
Total 435 404 462
======== ======== ========
Refinery Throughput
(barrels per day)
-------------------
HOVENSA - Crude runs 500 489 449
HOVENSA - AHC 50% share 250 245 225
Port Reading 58 55 35
Refinery
Refinery Utilization Capacity
-------------------- ----------
HOVENSA (thousands
of barrels
per day)
Crude 500 100.1% 97.7% 89.8%
FCC 150 93.3% 95.5% 57.2%(a)
Coker 58 100.9% 100.2% 92.9%
Port Reading 65 89.2% 89.2% 56.5%(a)
----------
Retail Marketing
----------------
Number of retail
stations (b) 1,352 1,242 1,250
Convenience store revenue
(in millions) (c) $ 254 $ 242 $ 218
Average gasoline volume
per station (gallons per
month) (c) 213 197 195
(a) The fluid catalytic cracking units at HOVENSA and Port Reading
were each shutdown for approximately 30 days for scheduled
maintenance in the first quarter of 2005.
(b) Includes company operated, branded/dealer and Wilco-Hess.
(c) Company operated only.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
REFINING AND MARKETING SUPPLEMENTAL FINANCIAL AND OPERATING DATA
First Half
--------------------
2005 2004
-------- --------
Financial Information (in millions)
-----------------------------------
Refining and Marketing Earnings
---------------------------------
Income before income taxes $ 253 $ 352
Provision for income taxes 92 80
-------- --------
Refining and Marketing
Earnings $ 161 $ 272
======== ========
Summary of Refining and Marketing
Earnings
---------------------------------
Refining $ 119 $ 198
Marketing 27 42
Trading 15 32
-------- --------
Total Refining and Marketing
Earnings $ 161 $ 272
======== ========
----------------------------------------------------------------------
Operating Data
(in thousands unless noted)
----------------------------
Refined Product Sales
(barrels per day)
---------------------
Gasoline 204 197
Distillates 135 146
Residuals 67 66
Other 42 35
-------- --------
Total 448 444
======== ========
Refinery Throughput
(barrels per day)
-------------------
HOVENSA - Crude runs 475 492
HOVENSA - AHC 50% share 238 246
Port Reading 47 56
Refinery
Refinery Utilization Capacity
-------------------- -----------
HOVENSA (thousands
of barrels
per day)
Crude 500 95.0% 98.3%
FCC 150 75.3%(a) 95.9%
Coker 58 96.9% 100.0%
Port Reading 65 72.8%(a) 90.2%
-----------
Retail Marketing
----------------
Number of retail stations (b) 1,352 1,242
Convenience store revenue (in
millions) (c) $ 472 $ 455
Average gasoline volume per
station (gallons per
month) (c) 204 190
(a) The fluid catalytic cracking units at HOVENSA and Port Reading
were each shutdown for approximately 30 days for scheduled
maintenance in the first quarter of 2005.
(b) Includes company operated, branded/dealer and Wilco-Hess.
(c) Company operated only.
SOURCE: Amerada Hess Corporation
Amerada Hess Corporation
J.R. Wilson, 212-536-8940