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NEW YORK, Jan. 28 /PRNewswire-FirstCall/ -- Amerada Hess Corporation (NYSE: AHC) reported net income of $68 million for the fourth quarter of 2003 compared with a net loss of $371 million for the fourth quarter of 2002. Results for the fourth quarter of 2002 included an after-tax impairment charge of $530 million ($706 million before income taxes). Net income was $643 million for the year 2003 compared with a loss of $218 million in the corresponding period of 2002. The after-tax results by major operating activity in 2003 and 2002 were as follows (in millions, except per share amounts):
Three months ended Year ended
December 31 December 31
2003* 2002*(a) 2003* 2002(a)
Exploration and production $83 $(375) $414 $(102)
Refining and marketing 55 20 327 85
Corporate (29) (7) (101) (63)
Interest expense (41) (38) (173) (165)
Income (loss) from continuing
operations 68 (400) 467 (245)
Discontinued operations
Net gains from asset
sales -- -- 116 --
Income from operations -- 29 53 27
Income from cumulative effect
of accounting change -- -- 7 --
Net income (loss) $68 $(371) $643 $(218)
Income (loss) per share from
continuing operations (diluted) $.71 $(4.52) $5.17 $(2.78)
Net income (loss) per share
(diluted) $.71 $(4.20) $7.11 $(2.48)
* Unaudited.
(a) Reclassified to conform with current period presentation.
The Corporation's oil and gas production, on a barrel-of-oil equivalent basis, was 356,000 barrels per day in the fourth quarter of 2003 compared to 434,000 barrels per day in the fourth quarter of 2002. Approximately seventy percent of the decline in production resulted from asset sales and exchanges in connection with the Corporation's initiatives to reshape its portfolio of producing properties. In the fourth quarter of 2003, the Corporation's average worldwide crude oil selling price, including the effect of hedging, was $25.34 per barrel, an increase of $.87 per barrel from the fourth quarter of 2002. The average crude oil selling price for the full year of 2003 was $24.80 per barrel, an increase of $.22 per barrel from 2002. The Corporation's average United States natural gas selling price, including the effect of hedging, was $3.96 per Mcf in the fourth quarter of 2003, a decrease of $.41 per Mcf from the fourth quarter of 2002. The average United States natural gas selling price for the full year of 2003 was $4.02 per Mcf, an increase of $.30 per Mcf from 2002.
Refining and marketing earnings increased in the fourth quarter and the year 2003 compared with the corresponding periods of 2002, reflecting higher refining earnings and increased income from retail gasoline station operations.
The following items, on an after-tax basis, are included in net income in the fourth quarter and year of 2003 and 2002 (in millions):
Three months ended Year ended
December 31 December 31
(unaudited) (unaudited)
2003 2002 2003 2002
Premiums on bond repurchases $(19) $(2) $(34) $(6)
Accrued severance and London
office
lease costs (9) -- (32) --
United States income tax
benefit -- -- 30 --
Asset impairments -- (530) -- (737)
Gains (losses) from asset sales
Exploration and production -- 13 31 33
Refining and marketing -- -- (20) 67
Charge for increase in United
Kingdom income tax rate -- -- -- (43)
Reduction in carrying value of
refining
and marketing intangible
assets and
accrued severance -- -- -- (22)
$(28) $(519) $(25) $(708)
Capital expenditures for the year 2003 amounted to $1,358 million of which $1,286 million related to exploration and production activities. Capital expenditures for the year 2002 amounted to $1,534 million, including $1,404 million for exploration and production.
Consolidated Financial Information
Three months ended Year ended
December 31 December 31
2003* 2002* 2003* 2002
(In millions, except per share amounts)
Sales and other operating
revenues $3,628 $3,207 $14,311 $11,551
Income (loss) from continuing
operations $68 $(400) $467 $(245)
Discontinued operations
Net gains from asset sales -- -- 116 --
Income from operations -- 29 53 27
Cumulative effect of accounting
change -- -- 7 --
Net income (loss) $68 $(371) $643 $(218)
Income (loss) per share from
continuing
operations (diluted) $.71 $(4.52) $5.17 $(2.78)
Net income (loss) per share
(diluted) $.71 $(4.20) $7.11 $(2.48)
Weighted average number of
shares 89.2 88.4** 90.3 88.2**
* Unaudited.
** 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. 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 items included in net income which are shown on an after-tax basis above (in millions):
Three months ended Year ended
December 31 December 31
2003 2002 2003 2002
Premiums on bond repurchases $(31) $(5) $(58) $(15)
Accrued severance and London
office
lease costs (15) -- (53) --
Asset impairments -- (706) -- (1,024)
Gains (losses) from asset
sales
Exploration and
production -- 13 47 41
Refining and marketing -- -- (9) 102
Reduction in carrying value of
refining
and marketing intangible
assets and
accrued severance -- -- -- (35)
$(46) $(698) $(73) $(931)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Fourth Fourth Third
Quarter Quarter Quarter
Line 2003 2002(*) 2003
No. (A) (B) (C)
Income Statement
Revenues and Non-
operating Income
1 Sales and other
operating revenues $3,628 $3,207 $3,230
Non-operating income
(expense)
2 Gain on asset
sales -- 13 --
3 Equity in income
of HOVENSA
L.L.C. 10 4 43
4 Other (30) 22 23
5 Total
revenues
and non-
operating
income 3,608 3,246 3,296
Costs and Expenses
6 Cost of products
sold 2,523 2,052 2,194
7 Production expenses 207 214 207
8 Marketing expenses 201 202 171
9 Exploration
expenses, including
dry holes
and lease
impairment 116 110 59
10 Other operating
expenses 49 43 44
11 General and
administrative
expenses 87 61 70
12 Interest expense 69 62 73
13 Depreciation,
depletion and
amortization 254 265 253
14 Asset impairment -- 706 --
15 Total costs
and
expenses 3,506 3,715 3,071
16 Income (loss) from
continuing
operations before
income taxes 102 (469) 225
17 Provision (benefit)
for income taxes 34 (69) 79
18 Income (loss) from
continuing
operations 68 (400) 146
Discontinued
operations
19 Net gain from
asset sales -- -- --
20 Income from
operations -- 29 --
21 Net income (loss) 68 (371) 146
22 Preferred stock
dividends 5 -- --
23 Net income (loss)
applicable to
common stockholders $63 $(371) $146
Segment Earnings Analysis
24 Exploration and
production $83 $(375) $124
25 Refining and
marketing 55 20 89
26 Corporate (29) (7) (25)
27 Interest expense (41) (38) (42)
28 Income (loss) from
continuing
operations 68 (400) 146
Discontinued
operations
29 Net gain from
asset sales -- -- --
30 Income from
operations -- 29 --
31 Net income (loss) $68 $(371) $146
32 Net Cash Provided by
Operating Activities (**) $423 $538 $99
Capital Expenditures
33 Exploration and
production $328 $303 $298
34 Refining and
marketing 14 23 9
35 Total
capital
expenditures $342 $326 $307
At End of Period
36 Total debt $3,941 $4,992 $4,490
37 Stockholders' equity $5,340 $4,249 $4,714
(*) Reclassified to conform with current period presentation.
(**) Includes changes in working capital.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)
(IN MILLIONS)
Year
Line 2003 2002(*)
No. Income Statement
Revenues and Non-
operating Income
1 Sales and other
operating revenues $14,311 $11,551
Non-operating income
(expense)
2 Gain on asset
sales 39 143
3 Equity in income
(loss) of HOVENSA
L.L.C. 117 (47)
4 Other 13 85
5 Total revenues
and non-
operating
income 14,480 11,732
Costs and Expenses
6 Cost of products sold 9,947 7,226
7 Production expenses 796 736
8 Marketing expenses 709 703
9 Exploration expenses,
including dry holes
and lease
impairment 369 316
10 Other operating
expenses 192 165
11 General and
administrative
expenses 340 253
12 Interest expense 293 256
13 Depreciation,
depletion and
amortization 1,053 1,118
14 Asset impairment -- 1,024
15 Total costs and
expenses 13,699 11,797
16 Income (loss) from
continuing
operations before
income taxes 781 (65)
17 Provision for income
taxes 314 180
18 Income (loss) from
continuing
operations 467 (245)
Discontinued
operations
19 Net gain from
asset sales 116 --
20 Income from
operations 53 27
21 Cumulative effect of
change in accounting
principle, net 7 --
22 Net income (loss) 643 (218)
23 Preferred stock
dividends 5 --
24 Net income (loss)
applicable to common
stockholders $638 $(218)
25 Net Cash Provided by
Operating Activities $1,581 $1,965
Capital Expenditures
26 Exploration and
production $1,286 $1,404
27 Refining and
marketing 72 130
28 Total capital
expenditures $1,358 $1,534
December 31 December 31
2003 2002
Balance Sheet Information
29 Current assets $3,186 $2,756
30 Investments 1,095 1,622
31 Property, plant and
equipment - net 7,978 7,032
32 Other assets 1,724 1,852
33 Total assets $13,983 $13,262
34 Current portion of
long-term debt $73 $16
35 Other current
liabilities 2,596 2,537
36 Long-term debt 3,868 4,976
37 Deferred liabilities
and credits 2,106 1,484
38 Stockholders' equity
excluding other
comprehensive loss 5,690 4,503
39 Accumulated other
comprehensive loss (350) (254)
40 Total
liabilities
and
stockholders'
equity $13,983 $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)
Fourth Fourth Third
Quarter Quarter Quarter
2003 2002 2003
Line (A) (B) (C)
No.
Operating Data
Net Production Per Day
Crude oil - barrels
1 United States 40 48 41
2 United Kingdom 79 110 78
3 Norway 27 25 22
4 Denmark 23 28 24
5 Algeria 19 18 23
6 Equatorial Guinea 18 30 21
7 Gabon 12 9 11
8 Azerbaijan 2 4 2
9 Indonesia 1 3 --
10 Colombia -- 20 --
11 Total 221 295 222
Natural gas liquids -
barrels
12 United States 10 11 12
13 United Kingdom 7 6 4
14 Norway 1 1 1
15 Indonesia and Thailand 2 2 2
16 Total 20 20 19
Natural gas - mcf
17 United States 213 320 216
18 United Kingdom 339 284 262
19 Norway 28 25 24
20 Denmark 23 39 30
21 Indonesia and Thailand 88 45 59
22 Total 691 713 591
23 Barrels of oil equivalent(*) 356 434 339
Average Selling Price
(including hedging)
Crude oil - per barrel
24 United States $25.06 $22.78 $24.33
25 Foreign 25.40 24.77 24.72
Natural gas liquids - per
barrel
26 United States $24.01 $20.99 $22.00
27 Foreign 24.71 21.80 23.33
Natural gas - per mcf
28 United States $3.96 $4.37 $3.53
29 Foreign 3.74 2.52 2.54
Marketing and Refining -
Barrels Per Day
30 Refined products sold 423 402 390
31 Refinery runs (net) 225 196 241
(*) Includes production from properties classified as discontinued
operations of 44 thousand barrels of oil equivalent per day
in the fourth quarter of 2002.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL OPERATING DATA
(IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Year
2003 2002
Line (A) (B)
No.
Operating Data
Net Production Per Day
Crude oil - barrels
1 United States 44 54
2 United Kingdom 89 112
3 Norway 24 24
4 Denmark 24 23
5 Algeria 19 15
6 Equatorial Guinea 22 37
7 Gabon 11 9
8 Azerbaijan 2 4
9 Indonesia 1 4
10 Colombia 3 22
11 Total 239 304
Natural gas liquids - barrels
12 United States 11 12
13 United Kingdom 6 6
14 Norway 1 1
15 Indonesia and Thailand 2 2
16 Total 20 21
Natural gas - mcf
17 United States 253 373
18 United Kingdom 312 277
19 Norway 26 25
20 Denmark 29 37
21 Indonesia and Thailand 63 42
22 Total 683 754
23 Barrels of oil equivalent (*) 373 451
Average Selling Price (including
hedging)
Crude oil - per barrel
24 United States $24.23 $24.04
25 Foreign 24.93 24.69
Natural gas liquids - per barrel
26 United States $23.74 $16.12
27 Foreign 24.09 19.09
Natural gas - per mcf
28 United States $4.02 $3.72
29 Foreign 3.01 2.26
Marketing and Refining -
Barrels Per Day
30 Refined products sold 419 383
31 Refinery runs (net) 220 181
(*) Includes production from properties classified as discontinued
operations of 13 and 51 thousand barrels of oil equivalent
per day in the years of 2003 and 2002, respectively.
Contact: Amerada Hess Corporation - J.R. Wilson (212) 536-8940
SOURCE Amerada Hess Corporation
CONTACT: J.R. Wilson of the Amerada Hess Corporation, +1-212-536-8940
(AHC)