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Amerada Hess Reports Estimated Results for the Third Quarter of 2005
10/26/2005
NEW YORK, Oct 26, 2005 (BUSINESS WIRE) -- Amerada Hess Corporation (NYSE: AHC) reported net income of $272 million for the third quarter of 2005 compared with income of $178 million for the third 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 Nine months ended
September 30 September 30
(unaudited) (unaudited)
------------------ ------------------
2005 2004 2005 2004
-------- -------- -------- --------
(In millions, except per share amounts)
Exploration and production $ 235 $ 155 $ 760 $ 544
Refining and marketing 125 85 286 358
Corporate (54) (23) (151) (49)
Interest expense (34) (39) (105) (112)
-------- -------- -------- --------
Net income from continuing
operations $ 272 $ 178 $ 790 $ 741
Discontinued operations - - - 7
-------- -------- -------- --------
Net income $ 272 $ 178 $ 790 $ 748
======== ======== ======== ========
Net income per share (diluted) $ 2.60 $ 1.74 $ 7.61 $ 7.34
======== ======== ======== ========
Weighted average number of shares
(diluted) 104.4 102.4 103.8 101.8
======== ======== ======== ========
Exploration and production earnings were $235 million in the third quarter of 2005 compared with $155 million in the third quarter of 2004. The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 312,000 barrels per day in the third quarter of 2005 compared with 323,000 barrels per day in the third quarter of 2004. Hurricane activity in the Gulf of Mexico reduced third quarter 2005 production by approximately 9,000 barrels of oil equivalent per day. This decrease is estimated to have reduced third quarter exploration and production earnings by approximately $25 million. The Corporation also incurred incremental third quarter expenses related to the hurricanes of $14 million, after income taxes.
In the third quarter of 2005, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was $35.74 per barrel, an increase of $9.01 per barrel from the third quarter of 2004. The Corporation's average United States natural gas selling price was $8.53 per Mcf in the third quarter of 2005, an increase of $4.13 per Mcf from the third quarter of 2004.
Refining and marketing earnings were $125 million in the third quarter of 2005 compared with $85 million in the third quarter of 2004. The increase in refining and marketing earnings was due to higher refining earnings, reflecting improved margins, partially offset by lower marketing results.
The following items, on an after-tax basis, are included in net income in the third quarter and first nine months of 2005 and 2004 (in millions):
Three months ended Nine months ended
September 30 September 30
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Exploration and production
--------------------------
Hurricane related costs $ (14) $ - $ (14) $ -
Income tax adjustments - - 11 -
Gains from asset sales - - 11 34
Legal settlement - - 11 -
Corporate
---------
Premiums on bond repurchases - - (7) -
Income tax adjustments (31) - (72) 13
--------- -------- -------- --------
$ (45) $ - $ (60) $ 47
========= ======== ======== ========
The corporate tax charges in the third quarter and first nine months of 2005 represent income tax provisions related to the repatriation of foreign earnings under the American Jobs Creation Act of 2004.
Capital and exploratory expenditures in the third quarter of 2005 amounted to $699 million compared with $381 million in the third quarter of 2004. Of these amounts, $674 million and $363 million in the third quarter of 2005 and 2004, respectively, related to exploration and production activities.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Third Third Second
Quarter Quarter Quarter
2005 2004 2005
-------- -------- --------
Income Statement
----------------
Revenues and Non-operating Income
Sales and other operating revenues $ 5,769 $ 3,830 $ 4,963
Non-operating income
Equity in income of HOVENSA L.L.C. 151 75 108
Other 36 25 11
-------- -------- --------
Total revenues and non-
operating income 5,956 3,930 5,082
-------- -------- --------
Costs and Expenses
Cost of products sold 4,424 2,742 3,621
Production expenses 256 202 242
Marketing expenses 202 186 205
Exploration expenses, including dry
holes and lease impairment 91 64 87
Other operating expenses 31 52 38
General and administrative expenses 83 81 86
Interest expense 54 62 54
Depreciation, depletion and amortization 251 230 261
-------- -------- --------
Total costs and expenses 5,392 3,619 4,594
-------- -------- --------
Income before income taxes 564 311 488
Provision for income taxes 292 133 189
-------- -------- --------
Net income $ 272 $ 178 $ 299
======== ======== ========
Preferred stock dividends 12 12 12
-------- -------- --------
Net income applicable to common
stockholders $ 260 $ 166 $ 287
======== ======== ========
Supplemental Income Statement Information
-----------------------------------------
Foreign currency gains, after-tax $ 2 $ 4 $ 8
Capitalized interest 22 12 22
Cash Flow Information
---------------------
Net cash provided by operating
activities (*) $ 484 $ 817 $ 606
Capital and Exploratory Expenditures
------------------------------------
Exploration and Production
United States $ 74 $ 100 $ 93
International 600 263 414
-------- -------- --------
Total Exploration and Production 674 363 507
Refining and Marketing 25 18 20
-------- -------- --------
Total Capital and Exploratory
Expenditures $ 699 $ 381 $ 527
======== ======== ========
Exploration expenses charged to income
included above
United States $ 30 $ 31 $ 23
International 12 (6) 11
-------- -------- --------
$ 42 $ 25 $ 34
======== ======== ========
(*) Includes changes in working capital
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Nine Months
-----------------
2005 2004
-------- --------
Income Statement
----------------
Revenues and Non-operating Income
Sales and other operating revenues $15,688 $12,120
Non-operating income
Equity in income of HOVENSA L.L.C. 309 223
Gain on asset sales 18 23
Other 93 63
-------- --------
Total revenues and non-
operating income 16,108 12,429
-------- --------
Costs and Expenses
Cost of products sold 11,674 8,650
Production expenses 722 586
Marketing expenses 604 537
Exploration expenses, including dry holes
and lease impairment 310 204
Other operating expenses 100 147
General and administrative expenses 254 253
Interest expense 169 179
Depreciation, depletion and amortization 767 695
-------- --------
Total costs and expenses 14,600 11,251
-------- --------
Income from continuing operations before income
taxes 1,508 1,178
Provision for income taxes 718 437
-------- --------
Income from continuing operations 790 741
Discontinued operations -- 7
-------- --------
Net income $ 790 $ 748
======== ========
Preferred stock dividends 36 36
-------- --------
Net income applicable to common stockholders $ 754 $ 712
======== ========
Supplemental Income Statement Information
-----------------------------------------
Foreign currency gains, after-tax $ 16 $ 7
Capitalized interest 57 41
Cash Flow Information
---------------------
Net cash provided by operating activities (*) $ 1,551 $ 1,649
Capital and Exploratory Expenditures
------------------------------------
Exploration and Production
United States $ 258 $ 323
International 1,377 805
-------- --------
Total Exploration and Production 1,635 1,128
Refining and Marketing 73 45
-------- --------
Total Capital and Exploratory
Expenditures $ 1,708 $ 1,173
======== ========
Exploration expenses charged to income included
above
United States $ 61 $ 58
International 31 23
-------- --------
$ 92 $ 81
======== ========
(*) Includes changes in working capital
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
September December
30 31
2005 2004
---------- ----------
Balance Sheet Information
-------------------------
Cash and short-term investments $ 760 $ 877
Other current assets 4,703 3,458
Investments 1,303 1,254
Property, plant and equipment - net 9,143 8,505
Other assets 2,946 2,218
---------- ----------
Total assets $ 18,855 $ 16,312
========== ==========
Current portion of long-term debt $ 78 $ 50
Other current liabilities 7,092 4,647
Long-term debt 3,709 3,785
Deferred liabilities and credits 2,452 2,233
Stockholders' equity excluding other
comprehensive income (loss) 7,385 6,621
Accumulated other comprehensive income (loss) (1,861) (1,024)
---------- ----------
Total liabilities and
stockholders' equity $ 18,855 $ 16,312
========== ==========
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
Third Quarter 2005
-------------------------------
United
States International Total
-------- -------------- -------
Sales and other operating revenues $275 $767 $1,042
Non-operating income (expenses) -- 16 16
-------- -------------- -------
Total revenues 275 783 1,058
-------- -------------- -------
Costs and expenses
Production expenses, including
related taxes 76 180 256
Exploration expenses, including dry
holes and lease impairment 40 51 91
General, administrative and other
expenses 13 19 32
Depreciation, depletion and
amortization 36 200 236
-------- -------------- -------
Total costs and expenses 165 450 615
-------- -------------- -------
Results of operations before income
taxes 110 333 443
Provision for income taxes 41 167 208
-------- -------------- -------
Results of operations $69 $166 $235
======== ============== =======
Third Quarter 2004
-------------------------------
United
States International Total
-------- -------------- -------
Sales and other operating revenues $220 $567 $787
Non-operating income (expenses) 3 8 11
-------- -------------- -------
Total revenues 223 575 798
-------- -------------- -------
Costs and expenses
Production expenses, including
related taxes 55 147 202
Exploration expenses, including dry
holes and lease impairment 38 26 64
General, administrative and other
expenses 13 17 30
Depreciation, depletion and
amortization 31 186 217
-------- -------------- -------
Total costs and expenses 137 376 513
-------- -------------- -------
Results of operations before income
taxes 86 199 285
Provision for income taxes 33 97 130
-------- -------------- -------
Results of operations $53 $102 $155
======== ============== =======
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
======== ============== =======
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)
(IN MILLIONS)
Nine Months 2005
------------------------------
United
States International Total
------- -------------- -------
Sales and other operating revenues $823 $2,287 $3,110
Non-operating income (expenses) (4) 67 63
------- -------------- -------
Total revenues 819 2,354 3,173
------- -------------- -------
Costs and expenses
Production expenses, including related
taxes 183 539 722
Exploration expenses, including dry
holes and lease impairment 200 110 310
General, administrative and other
expenses 51 49 100
Depreciation, depletion and
amortization 122 602 724
------- -------------- -------
Total costs and expenses 556 1,300 1,856
------- -------------- -------
Results of operations before income
taxes 263 1,054 1,317
Provision for income taxes 98 459 557
------- -------------- -------
Results of operations $165 $595 $760
======= ============== =======
Nine Months 2004
------------------------------
United
States International Total
------- -------------- -------
Sales and other operating revenues $631 $1,856 $2,487
Non-operating income (expenses) (2) 44 42
------- -------------- -------
Total revenues 629 1,900 2,529
------- -------------- -------
Costs and expenses
Production expenses, including related
taxes 144 442 586
Exploration expenses, including dry
holes and lease impairment 101 103 204
General, administrative and other
expenses 48 65 113
Depreciation, depletion and
amortization 95 561 656
------- -------------- -------
Total costs and expenses 388 1,171 1,559
------- -------------- -------
Results of operations before income
taxes 241 729 970
Provision for income taxes 90 336 426
------- -------------- -------
Results of operations $151 $393 $544
======= ============== =======
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Third Third Second
Quarter Quarter Quarter
2005 2004 2005
------- ------- -------
Operating Data
--------------
Net Production Per Day
----------------------
Crude oil - barrels
United States 42 44 47
Europe 102 109 117
Africa, Asia and other 74 66 75
------- ------- -------
Total 218 219 239
======= ======= =======
Natural gas liquids - barrels
United States 11 12 14
Europe 2 6 5
------- ------- -------
Total 13 18 19
======= ======= =======
Natural gas - mcf
United States 125 164 148
Europe 218 270 289
Africa, Asia and other 141 82 138
------- ------- -------
Total 484 516 575
======= ======= =======
Barrels of oil equivalent 312 323 355
======= ======= =======
Average Selling Price (including hedging)
-----------------------------------------
Crude oil - per barrel
United States $34.86 $28.26 $32.44
Europe 34.59 26.07 33.22
Africa, Asia and other 37.75 26.69 31.10
Natural gas liquids - per barrel
United States $40.90 $31.73 $34.98
Europe 36.77 24.17 35.49
Natural gas - per mcf
United States $8.53 $4.40 $6.47
Europe 4.12 3.58 4.60
Africa, Asia and other 4.12 3.86 3.95
Average Selling Price (excluding hedging)
-----------------------------------------
Crude oil - per barrel
United States $58.32 $40.53 $47.83
Europe 59.47 42.09 50.10
Africa, Asia and other 59.56 39.50 47.78
Natural gas liquids - per barrel
United States $40.90 $31.73 $34.98
Europe 36.77 24.17 35.49
Natural gas - per mcf
United States $8.53 $5.13 $6.47
Europe 4.12 3.58 4.60
Africa, Asia and other 4.12 3.86 3.95
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Nine Months
---------------
2005 2004
------- -------
Operating Data
--------------
Net Production Per Day
----------------------
Crude oil - barrels
United States 46 41
Europe 113 122
Africa, Asia and other 73 64
------- -------
Total 232 227
======= =======
Natural gas liquids - barrels
United States 12 12
Europe 5 6
------- -------
Total 17 18
======= =======
Natural gas - mcf
United States 146 169
Europe 281 321
Africa, Asia and other 127 85
------- -------
Total 554 575
======= =======
Barrels of oil equivalent 341 340
======= =======
Average Selling Price (including hedging)
-----------------------------------------
Crude oil - per barrel
United States $33.10 $26.41
Europe 33.00 26.24
Africa, Asia and other 33.35 26.91
Natural gas liquids - per barrel
United States $35.98 $28.03
Europe 34.40 24.08
Natural gas - per mcf
United States $6.94 $4.95
Europe 4.79 3.80
Africa, Asia and other 4.01 3.81
Average Selling Price (excluding hedging)
-----------------------------------------
Crude oil - per barrel
United States $50.16 $36.68
Europe 51.93 36.01
Africa, Asia and other 50.87 35.56
Natural gas liquids - per barrel
United States $35.98 $28.03
Europe 34.40 24.08
Natural gas - per mcf
United States $6.94 $5.35
Europe 4.79 3.80
Africa, Asia and other 4.01 3.81
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
HEDGED PRICES AND VOLUMES
WTI Brent
---------------------------- ----------------------------
Average Thousands of Average Thousands of
Selling barrels per Selling barrels per
Maturity Price day Price day
------------ --------------- ---------------------------- ------------
2005
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 $45 million as of September 30 included in accumulated other comprehensive income (loss). These after-tax losses will reduce income in the fourth quarter. There were no natural gas hedges outstanding at September 30.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
REFINING AND MARKETING SUPPLEMENTAL FINANCIAL AND OPERATING DATA
Third Third Second
Quarter Quarter Quarter
2005 2004 2005
-------- -------- --------
Financial Information (in millions)
-----------------------------------
Refining and Marketing Earnings
-------------------------------
Income before income taxes $ 202 $ 118 $ 151
Provision for income taxes 77 33 53
-------- -------- --------
Refining and Marketing
Earnings $ 125 $ 85 $ 98
======== ======== ========
Summary of Refining and Marketing
Earnings
---------------------------------
Refining $ 144 $ 68 $ 77
Marketing (22) 6 14
Trading 3 11 7
-------- -------- --------
Total Refining and Marketing
Earnings $ 125 $ 85 $ 98
======== ======== ========
----------------------------------------------------------------------
Operating Data (in thousands unless noted)
------------------------------------------
Refined Product Sales (barrels per day)
---------------------------------------
Gasoline 226 198 227
Distillates 104 116 104
Residuals 43 44 59
Other 37 36 45
-------- -------- --------
Total 410 394 435
======== ======== ========
Refinery Throughput (barrels per day)
-------------------------------------
HOVENSA - Crude runs 413 480 500
HOVENSA - AHC 50% share 206 240 250
Port Reading 62 40 58
-----------------
Refinery Utilization Refinery Capacity
-------------------- -----------------
(thousands of
HOVENSA barrels per day)
Crude 500 82.5%* 95.9% 100.1%
FCC 150 89.7% 93.9% 93.3%
Coker 58 92.4% 94.1% 100.9%
Port Reading 65 95.5% 64.2%** 89.2%
-----------------
* Reflects reduced utilization from scheduled maintenance.
** Represents a storm-related interruption.
Retail Marketing
----------------
Number of retail stations (a) 1,358 1,238 1,352
Convenience store revenue
(in millions) (b) $ 260 $ 249 $ 254
Average gasoline volume per
station (gallons per month) (b) 211 192 213
(a) Includes company operated, branded/dealer and Wilco-Hess.
(b) Company operated only.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
REFINING AND MARKETING SUPPLEMENTAL FINANCIAL AND OPERATING DATA
Nine Months
-----------------------
2005 2004
----------- -----------
Financial Information (in millions)
-----------------------------------
Refining and Marketing Earnings
-------------------------------
Income before income taxes $ 455 $ 470
Provision for income taxes 169 112
----------- -----------
Refining and Marketing Earnings $ 286 $ 358
=========== ===========
Summary of Refining and Marketing Earnings
------------------------------------------
Refining $ 263 $ 265
Marketing 5 49
Trading 18 44
----------- -----------
Total Refining and Marketing Earnings $ 286 $ 358
=========== ===========
----------------------------------------------------------------------
Operating Data (in thousands unless noted)
------------------------------------------
Refined Product Sales (barrels per day)
---------------------------------------
Gasoline 211 197
Distillates 125 136
Residuals 59 59
Other 40 35
----------- -----------
Total 435 427
=========== ===========
Refinery Throughput (barrels per day)
-------------------------------------
HOVENSA - Crude runs 454 488
HOVENSA - AHC 50% share 227 244
Port Reading 52 51
-----------------
Refinery Utilization Refinery Capacity
-------------------- -----------------
(thousands of
HOVENSA barrels per day)
Crude 500 90.8%* 97.5%
FCC 150 80.2%* 95.2%
Coker 58 95.4% 98.0%
Port Reading 65 80.4%* 81.5%**
-----------------
* Reflects reduced utilization from scheduled maintenance.
** Represents a storm-related interruption.
Retail Marketing
----------------
Number of retail stations (a) 1,358 1,238
Convenience store revenue
(in millions) (b) $ 732 $ 704
Average gasoline volume per station
(gallons per month) (b) 206 191
(a) Includes company operated, branded/dealer and Wilco-Hess.
(b) Company operated only.
SOURCE: Amerada Hess Corporation
Amerada Hess Corporation
J.R. Wilson, 212-536-8940