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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