þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-1204
DELAWARE
(State or other jurisdiction of incorporation or
organization)
13-4921002
(I.R.S. employer identification number)
1185 AVENUE OF THE AMERICAS, NEW YORK, N.Y.
(Address of principal executive offices)
10036
(Zip Code)
(Registrant's telephone number, including area code is (212) 997-8500)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
| Three months | Six months | ||||||||||||||||||
| ended June 30, | ended June 30, | ||||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | ||||||||||||||||
|
REVENUES
|
|||||||||||||||||||
|
Sales (excluding excise taxes) and other
operating revenues
|
$ | 2,796 | $ | 3,461 | $ | 5,818 | $ | 7,644 | |||||||||||
|
Non-operating income
|
|||||||||||||||||||
|
Equity in income (loss) of HOVENSA
L.L.C.
|
(18 | ) | 51 | (44 | ) | 66 | |||||||||||||
|
Other
|
16 | 53 | 77 | 84 | |||||||||||||||
|
Total revenues
|
2,794 | 3,565 | 5,851 | 7,794 | |||||||||||||||
|
COSTS AND EXPENSES
|
|||||||||||||||||||
|
Cost of products sold
|
1,563 | 2,236 | 3,486 | 5,168 | |||||||||||||||
|
Production expenses
|
184 | 173 | 367 | 326 | |||||||||||||||
|
Marketing expenses
|
197 | 152 | 357 | 305 | |||||||||||||||
|
Exploration expenses, including dry holes and
lease impairment
|
50 | 73 | 104 | 157 | |||||||||||||||
|
Other operating expenses
|
46 | 54 | 97 | 110 | |||||||||||||||
|
General and administrative expenses
|
60 | 58 | 123 | 123 | |||||||||||||||
|
Interest expense
|
70 | 41 | 140 | 81 | |||||||||||||||
|
Depreciation, depletion and amortization
|
368 | 229 | 670 | 410 | |||||||||||||||
|
Total costs and expenses
|
2,538 | 3,016 | 5,344 | 6,680 | |||||||||||||||
|
Income before income taxes
|
256 | 549 | 507 | 1,114 | |||||||||||||||
|
Provision for income taxes
|
107 | 192 | 218 | 420 | |||||||||||||||
|
NET INCOME
|
$ | 149 | $ | 357 | $ | 289 | $ | 694 | |||||||||||
|
NET INCOME PER SHARE
|
|||||||||||||||||||
|
BASIC
|
$ | 1.68 | $ | 4.03 | $ | 3.28 | $ | 7.86 | |||||||||||
|
DILUTED
|
$ | 1.66 | $ | 3.98 | $ | 3.25 | $ | 7.77 | |||||||||||
|
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING
|
89.5 | 89.6 | 89.1 | 89.3 | |||||||||||||||
|
COMMON STOCK DIVIDENDS PER SHARE
|
$ | .30 | $ | .30 | $ | .60 | $ | .60 | |||||||||||
See accompanying notes to consolidated financial statements.
1
PART I — FINANCIAL INFORMATION (CONT’D.)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
| June 30, | December 31, | ||||||||||
| 2002 | 2001 | ||||||||||
| ASSETS | |||||||||||
|
CURRENT ASSETS
|
|||||||||||
|
Cash and cash equivalents
|
$ | 35 | $ | 37 | |||||||
|
Accounts receivable
|
1,535 | 2,962 | |||||||||
|
Inventories
|
531 | 550 | |||||||||
|
Other current assets
|
272 | 397 | |||||||||
|
Total current assets
|
2,373 | 3,946 | |||||||||
|
INVESTMENTS AND ADVANCES
|
|||||||||||
|
HOVENSA L.L.C.
|
845 | 889 | |||||||||
|
Other
|
737 | 747 | |||||||||
|
Total investments and advances
|
1,582 | 1,636 | |||||||||
|
PROPERTY, PLANT AND EQUIPMENT
|
|||||||||||
|
Total — at cost
|
17,512 | 16,627 | |||||||||
|
Less reserves for depreciation,
depletion, amortization and lease impairment |
9,197 | 8,462 | |||||||||
|
Property, plant and equipment — net
|
8,315 | 8,165 | |||||||||
|
NOTE RECEIVABLE
|
371 | 395 | |||||||||
|
GOODWILL
|
982 | 982 | |||||||||
|
DEFERRED INCOME TAXES AND OTHER
ASSETS
|
239 | 245 | |||||||||
|
TOTAL ASSETS
|
$ | 13,862 | $ | 15,369 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
|
CURRENT LIABILITIES
|
|||||||||||
|
Accounts payable — trade
|
$ | 1,046 | $ | 1,807 | |||||||
|
Accrued liabilities
|
785 | 1,115 | |||||||||
|
Taxes payable
|
370 | 414 | |||||||||
|
Notes payable
|
3 | 106 | |||||||||
|
Current maturities of long-term debt
|
14 | 276 | |||||||||
|
Total current liabilities
|
2,218 | 3,718 | |||||||||
|
LONG-TERM DEBT
|
5,285 | 5,283 | |||||||||
|
DEFERRED LIABILITIES AND CREDITS
|
|||||||||||
|
Deferred income taxes
|
1,137 | 1,111 | |||||||||
|
Other
|
273 | 350 | |||||||||
|
Total deferred liabilities and credits
|
1,410 | 1,461 | |||||||||
|
STOCKHOLDERS’ EQUITY
|
|||||||||||
|
Preferred stock, par value $1.00, 20,000 shares
authorized 3% cumulative convertible series
Authorized — 330 shares |
|||||||||||
|
Issued — 327 shares ($16 million
liquidation preference)
|
— | — | |||||||||
|
Common stock, par value $1.00
Authorized — 200,000 shares |
|||||||||||
|
Issued — 89,234 shares at June 30,
2002; 88,757 shares at December 31, 2001 |
89 | 89 | |||||||||
|
Capital in excess of par value
|
934 | 903 | |||||||||
|
Retained earnings
|
4,042 | 3,807 | |||||||||
|
Accumulated other comprehensive income (loss)
|
(116 | ) | 108 | ||||||||
|
Total stockholders’ equity
|
4,949 | 4,907 | |||||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
|
$ | 13,862 | $ | 15,369 | |||||||
See accompanying notes to consolidated financial statements.
2
PART I — FINANCIAL INFORMATION (CONT’D.)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
| 2002 | 2001 | ||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|||||||||||
|
Net income
|
$ | 289 | $ | 694 | |||||||
|
Adjustments to reconcile net income to net cash
provided by operating activities |
|||||||||||
|
Depreciation, depletion and amortization
|
670 | 410 | |||||||||
|
Exploratory dry hole costs
|
34 | 82 | |||||||||
|
Lease impairment
|
21 | 14 | |||||||||
|
Gain on asset sales
|
(41 | ) | — | ||||||||
|
Provision (benefit) for deferred income taxes
|
(5 | ) | 58 | ||||||||
|
Undistributed earnings of affiliates
|
46 | (57 | ) | ||||||||
| 1,014 | 1,201 | ||||||||||
|
Changes in operating assets and liabilities
|
(20 | ) | (204 | ) | |||||||
|
Net cash provided by operating activities
|
994 | 997 | |||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|||||||||||
|
Capital expenditures
|
(877 | ) | (1,467 | ) | |||||||
|
Payment received on note
|
24 | 24 | |||||||||
|
Proceeds from asset sales and other
|
235 | (55 | ) | ||||||||
|
Net cash used in investing activities
|
(618 | ) | (1,498 | ) | |||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|||||||||||
|
Increase (decrease) in notes payable
|
(103 | ) | 1 | ||||||||
|
Long-term borrowings
|
597 | 282 | |||||||||
|
Repayment of long-term debt
|
(820 | ) | (5 | ) | |||||||
|
Cash dividends paid
|
(80 | ) | (67 | ) | |||||||
|
Common stock acquired
|
— | (20 | ) | ||||||||
|
Stock options exercised
|
28 | 56 | |||||||||
|
Net cash provided by (used in) financing
activities
|
(378 | ) | 247 | ||||||||
|
NET DECREASE IN CASH AND CASH
EQUIVALENTS
|
(2 | ) | (254 | ) | |||||||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR
|
37 | 312 | |||||||||
|
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
|
$ | 35 | $ | 58 | |||||||
See accompanying notes to consolidated financial statements.
3
PART I — FINANCIAL INFORMATION (CONT’D.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Note 1 | The financial statements included in this report reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Corporation’s consolidated financial position at June 30, 2002 and December 31, 2001, and the consolidated results of operations for the three- and six-month periods ended June 30, 2002 and 2001 and the consolidated cash flows for the six-month periods ended June 30, 2002 and 2001. The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year. | |||
| Certain notes and other information have been condensed or omitted from these interim financial statements. These statements, therefore, should be read in conjunction with the consolidated financial statements and related notes included in the 2001 Annual Report to Stockholders, which have been incorporated by reference in the Corporation’s Form 10-K for the year ended December 31, 2001. | ||||
| Note 2 | Inventories consist of the following (in millions): |
| June 30, | December 31, | ||||||||
| 2002 | 2001 | ||||||||
Crude oil and other charge stocks |
$ | 121 | $ | 108 | |||||
Refined and other finished products |
431 | 440 | |||||||
Less: LIFO adjustment |
(174 | ) | (111 | ) | |||||
| 378 | 437 | ||||||||
Materials and supplies |
153 | 113 | |||||||
Total inventories |
$ | 531 | $ | 550 | |||||
| Note 3 | The Corporation accounts for its investment in HOVENSA L.L.C. using the equity method. Summarized financial information for HOVENSA follows (in millions): |
| At | At | |||||||||
| June 30, | December 31, | |||||||||
| Balance sheet | 2002 | 2001 | ||||||||
Assets |
||||||||||
Current assets |
$ | 442 | $ | 491 | ||||||
Net fixed assets |
1,904 | 1,846 | ||||||||
Other assets |
32 | 35 | ||||||||
Total assets |
$ | 2,378 | $ | 2,372 | ||||||
Liabilities and partners’ equity |
||||||||||
Current liabilities |
312 | 294 | ||||||||
Short-term debt |
42 | — | ||||||||
Long-term debt |
382 | 365 | ||||||||
Deferred liabilities and credits |
32 | 23 | ||||||||
Partners’ equity |
1,610 | 1,690 | ||||||||
Total liabilities and partners’ equity |
$ | 2,378 | $ | 2,372 | ||||||
4
PART I — FINANCIAL INFORMATION (CONT’D.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| Three months | Six months | ||||||||||||||||
| ended June 30 | ended June 30 | ||||||||||||||||
| Income statement | 2002 | 2001 | 2002 | 2001 | |||||||||||||
Total revenues |
$ | 789 | $ | 1,230 | $ | 1,568 | $ | 2,345 | |||||||||
Costs and expenses |
824 | 1,126 | 1,655 | 2,212 | |||||||||||||
Net income (loss) |
$ | (35 | ) | $ | 104 | $ | (87 | ) | $ | ||||||||