-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O+Jhm/vClFNdkG+TJADzNwBdiEeVrLmZ/v3BOdg+QzNXAFxD6SBLRaL01pLv3EkX LhtlW57eiXjm9r65qRkpVw== /in/edgar/work/0000950123-00-009687/0000950123-00-009687.txt : 20001026 0000950123-00-009687.hdr.sgml : 20001026 ACCESSION NUMBER: 0000950123-00-009687 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001025 ITEM INFORMATION: FILED AS OF DATE: 20001025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERADA HESS CORP CENTRAL INDEX KEY: 0000004447 STANDARD INDUSTRIAL CLASSIFICATION: [2911 ] IRS NUMBER: 134921002 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-01204 FILM NUMBER: 745203 BUSINESS ADDRESS: STREET 1: 1185 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2129978500 FORMER COMPANY: FORMER CONFORMED NAME: AMERADA PETROLEUM CORP DATE OF NAME CHANGE: 19690727 8-K 1 y41596e8-k.txt AMERADA HESS CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) IS OCTOBER 25, 2000 AMERADA HESS CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) COMMISSION FILE NUMBER 1-1204 13-4921002 (I.R.S. employer identification number) 1185 AVENUE OF THE AMERICAS, NEW YORK, NY (Address of principal executive offices) 10036 (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE, IS (212) 997-8500 2 ITEM 9. REGULATION FD DISCLOSURE. The following information will be discussed in a teleconference to be held at 1 p.m. on October 25, 2000. The teleconference will discuss the Registrant's operating results for the third quarter of 2000 and will be open to the public. Certain items discussed in the teleconference, including references to the Corporation's future results of operations and financial position, future costs and expenditures and future production are forward-looking. Forward-looking disclosures are based on the Corporation's current assessments and reasonable assumptions about the future. Actual results may differ because of changes in market conditions, government actions and other factors. 3 AMERADA HESS CORPORATION THIRD QUARTER ANALYSTS' CONFERENCE CALL OVERVIEW - - The Corporation's earnings for the third quarter of 2000 amounted to $257 million or $2.86 per share - the highest operating earnings of any quarter in the Corporation's history. Earnings in the first nine months of 2000 were $683 million or $7.57 per share - higher than any full year in the Corporation's history. The balance sheet is stronger as a result of significantly increased income and reduced debt. The Corporation also continues to execute its previously announced $300 million stock repurchase program. CONSOLIDATED INCOME AND CASH FLOW - - Third quarter operating earnings of $257 million increased by 27% compared with $202 million in the second quarter of 2000 and were approximately five times higher than the $52 million in the third quarter of 1999. - - Nine month operating earnings of $683 million compared with $131 million in the first nine months of 1999. - - Cash flow from operations amounted to $530 million in the third quarter of 2000 and $1,422 million in the first nine months of the year. - - The principal uses of cash in the third quarter and first nine months of 2000 were as follows:
Third quarter Nine months ------------- ----------- Debt repayment $ 118 $ 411 Capital expenditures 205 610 Stock repurchases* 126 188 Increase in cash and equivalents** 81 218
* As of September 30, 2,957,000 shares have been repurchased for $188 million. This represents approximately 3% of the Corporation's outstanding shares and an average price per share of $63.41. ** The September 30 cash balance was $259 million. - - At September 30, the Corporation's debt to capitalization ratio was 36% compared with 43% at December 31, 1999 and 50% at December 31, 1998. EXPLORATION AND PRODUCTION - - Exploration and production earnings increased by $60 million or 34% in the third quarter of 2000 compared with the second quarter. The increase compared with the third quarter of 1999 was $167 million (235%). 4 AMERADA HESS CORPORATION THIRD QUARTER ANALYSTS' CONFERENCE CALL - - The increase in the third quarter of 2000 over the second quarter can be summarized as follows: Higher crude oil selling prices (including hedging) of approximately $2.00 per barrel $ 22 Increased natural gas selling prices 19 Crude oil and natural gas volume changes, net of related production and DD&A costs 9 Lower after-tax exploration expenses 17 All other (7) ------- $ 60 =======
- - As a result of higher prices, the after tax impact of hedging in the third quarter of 2000 was an opportunity cost of approximately $50 million compared with $25 million in the second quarter. The after-tax hedge impact per barrel of oil sold was $2.20 per barrel in the third quarter of 2000 and $1.15 per barrel in the second quarter. - - At September 30, deferred hedging costs on crude oil production (after income taxes) amounted to approximately $190 million.
% Deferred Hedged Hedge Losses ------ ------------- Fourth quarter 2000 25% $ 65 million Year 2001 35% $ 125 million
- - As you will note on page 5 of our press release crude oil production increased in the third quarter of 2000 over the second quarter by 7%. This increase was primarily due to increased production from the Bittern Field, an increased interest in the Ivanhoe/Rob Roy Field, both in the U.K. North Sea, and the return to production of the South Arne Field in Denmark after a temporary interruption in the second quarter. - - Page 5 also shows that gas production compared to the second quarter was down by 9%. United Kingdom natural gas production was lower in the current quarter due to maintenance and the predictable lower seasonal demand. - - The Corporation's pre-tax exploration expense of $65 million in the third quarter and $217 million in the first nine months was in line with our budget and the expected full year expenditure is estimated to be approximately $280 million. 5 AMERADA HESS CORPORATION THIRD QUARTER ANALYSTS' CONFERENCE CALL - - The effective income tax rate for exploration and production activities in the third quarter of 2000 was 42% consistent with our estimate of the year as a whole. REFINING, MARKETING AND SHIPPING - - Refining and marketing earnings amounted to $62 million in the third quarter of 2000 compared with $64 million in the second quarter of 2000 and $22 million in the third quarter of 1999. - - For the nine-month periods, refining and marketing earnings were $174 million in 2000 compared with $94 million in 1999. - - R&M earnings include interest on the PDVSA note of $13 million in the third quarter and $38 million in the year to date results. These amounts are comparable to the 1999 amounts. The balance of the PDVSA note at September 30 was $538.5 million. PDVSA paid $48 million in principal on the note on October 12, 2000 and, therefore, the interest rate reverted to 8.46% from 9.46%. Principal and interest payments are current. Total cash payments to date, including interest, amount to $228 million. - - The Corporation's share of HOVENSA earnings amounted to $24 million in the third quarter of 2000 compared with $41 million in the second quarter. The decrease in HOVENSA results was primarily due to lower margins on gasolines (reflecting higher Brent based crude oil costs) and lower charge rates which were due to Hurricane Debby and scheduled maintenance. HOVENSA earnings in the third quarter and nine-months of 2000 exceeded results from a year ago because of improved refining margins in 2000. - - Retail margins were flat in the third quarter compared with the second quarter. In both periods, retail margins were constrained by the inability to pass along higher product costs to consumers. - - Energy marketing results were comparable in the third and second quarters of 2000. - - After-tax trading income in the third quarter of 2000 was $5 million compared with breakeven results in the second quarter. CORPORATE - - Net Corporate expenses were comparable in the third and second quarters of 2000 and the third quarter of 1999. 6 AMERADA HESS CORPORATION THIRD QUARTER ANALYSTS' CONFERENCE CALL - - You will note in the press release that Corporate expenses of $32 million for the first nine months of 2000 exceed the comparable 1999 period by $6 million. Administrative expenses for the two periods were comparable, however, operating earnings of an insurance subsidiary and dividends from reinsurers were lower by $12 million pre-tax ($8 million after-tax). - - In summary, we had quite a good third quarter. Operating earnings exceeded those of the second quarter and were five times better than operating earnings from the third quarter of 1999. MISCELLANEOUS ITEMS - - The foreign currency impact in the third and second quarters of 2000 were relatively minor and, after-tax, amounted to less than $1 million and $(2) million, respectively. As noted in the press release and 10-Q for last year's third quarter, exploration and production earnings in last years' third quarter included net nonrecurring expense of $29 million, principally from foreign currency translation adjustments. - - There was no capitalized interest in either the third or second quarters of 2000. 7 NEWS RELEASE FOR IMMEDIATE RELEASE NEW YORK, NEW YORK....OCTOBER 25, 2000....AMERADA HESS CORPORATION REPORTED OPERATING EARNINGS OF $257 MILLION FOR THE THIRD QUARTER OF 2000 COMPARED WITH EARNINGS OF $52 MILLION FOR THE THIRD QUARTER OF 1999. OPERATING EARNINGS IN THE FIRST NINE MONTHS OF 2000 WERE $683 MILLION COMPARED WITH EARNINGS OF $131 MILLION IN THE FIRST NINE MONTHS OF 1999. THE AFTER-TAX RESULTS BY MAJOR OPERATING ACTIVITY FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999 WERE AS FOLLOWS (IN MILLIONS, EXCEPT PER SHARE AMOUNTS):
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 (UNAUDITED) SEPTEMBER 30 (UNAUDITED) ------------------------ ------------------------ 2000 1999 2000 1999 ------ ------ ------ ------ EXPLORATION AND PRODUCTION $ 238 $ 71 $ 634 $ 149 REFINING, MARKETING AND SHIPPING 62 22 174 94 CORPORATE (10) (11) (32) (26) INTEREST EXPENSE (33) (30) (93) (86) ------ ------ ------ ------ OPERATING EARNINGS 257 52 683 131 GAINS ON ASSET SALES - 106 - 176 ------ ------ ------ ------ NET INCOME $ 257 $ 158 $ 683 $ 307 ====== ====== ====== ====== NET INCOME PER SHARE (DILUTED) $ 2.86 $ 1.75 $ 7.57 $ 3.40 ====== ====== ====== ======
THE CORPORATION'S AVERAGE WORLDWIDE CRUDE OIL SELLING PRICE IN THE THIRD QUARTER OF 2000 WAS APPROXIMATELY $26.00 PER BARREL, AN INCREASE OF $6.00 FROM THE THIRD QUARTER OF 1999. THE CORPORATION'S OIL AND GAS PRODUCTION, ON A BARREL-OF-OIL EQUIVALENT BASIS, WAS 367,000 BARRELS PER DAY IN THE THIRD QUARTER OF 2000, AN INCREASE OF 10% OVER THE THIRD QUARTER OF 1999. 8 INCREASED REFINING, MARKETING AND SHIPPING RESULTS IN THE THIRD QUARTER OF 2000, COMPARED WITH THE THIRD QUARTER OF 1999, REFLECT IMPROVED REFINING MARGINS AND HIGHER EARNINGS FROM RETAIL OPERATIONS. SALES AND OTHER OPERATING REVENUES AMOUNTED TO $2,833 MILLION IN THE THIRD QUARTER OF 2000 COMPARED WITH $1,802 MILLION IN THE THIRD QUARTER OF 1999. THE INCREASE PRINCIPALLY REFLECTS SIGNIFICANTLY HIGHER CRUDE OIL AND REFINED PRODUCT SELLING PRICES. CAPITAL EXPENDITURES IN THE THIRD QUARTER OF 2000 WERE $205 MILLION OF WHICH $170 MILLION RELATED TO EXPLORATION AND PRODUCTION ACTIVITIES. CAPITAL EXPENDITURES IN THE THIRD QUARTER OF 1999 AMOUNTED TO $197 MILLION INCLUDING $177 MILLION FOR EXPLORATION AND PRODUCTION. CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 -------------------------- -------------------------- 2000 1999 2000 1999 --------- --------- --------- --------- (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) SALES AND OTHER OPERATING REVENUES $ 2,833 $ 1,802 $ 8,308 $ 4,770 NET INCOME $ 257 $ 158(a) $ 683 $ 307(a) NET INCOME PER SHARE (DILUTED) $ 2.86 $ 1.75(a) $ 7.57 $ 3.40(a) WEIGHTED AVERAGE NUMBER OF SHARES 89.8 90.5 90.2 90.2
(a) INCLUDES GAINS ON ASSET SALES OF $106 MILLION ($1.17 PER SHARE) AND $176 MILLION ($1.95 PER SHARE) IN THE THIRD QUARTER AND FIRST NINE MONTHS OF 1999, RESPECTIVELY. 2 9 AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS)
Third Third Second Quarter Quarter Quarter 2000 1999 2000 ------- ------- ------- (A) (B) (C) Line INCOME STATEMENT No. ---------------- - ---- REVENUES 1 Sales and other operating revenues $ 2,833 $ 1,802 $ 2,644 Non-operating income 2 Gains on asset sales - - 165 - - 3 Equity in income of HOVENSA L.L C. 24 7 41 4 Other 30 3 29 ------- ------- ------- 5 Total revenues 2,887 1,977 2,714 ------- ------- ------- COSTS AND EXPENSES 6 Cost of products sold 1,768 1,073 1,717 7 Production expenses 139 111 129 8 Marketing expenses 157 108 122 9 Other operating expenses 60 52 51 Exploration expenses, including dry holes 10 and lease impairment 65 45 90 11 General and administrative expenses 50 70 51 12 Interest expense 42 39 39 13 Depreciation, depletion and amortization 176 159 167 ------- ------- ------- 14 Total costs and expenses 2,457 1,657 2,366 ------- ------- ------- 15 Income before income taxes 430 320 348 16 Provision for income taxes 173 162 146 ------- ------- ------- 17 NET INCOME $ 257 $ 158 $ 202 ======= ======= ======= SEGMENT ANALYSIS ---------------- 18 Exploration and production $ 238 $ 71 $ 178 19 Refining, marketing and shipping 62 22 64 20 Corporate (10) (11) (10) 21 Interest expense (33) (30) (30) ------- ------- ------- 22 Operating earnings 257 52 202 23 Gains on asset sales - - 106 - - ------- ------- ------- 24 NET INCOME $ 257 $ 158 $ 202 ======= ======= ======= 25 CASH FLOW FROM OPERATIONS (*) $ 530 $ 246 $ 437 ----------------------------- ======= ======= ======= CAPITAL EXPENDITURES -------------------- 26 Exploration and production $ 170 $ 177 $ 194 27 Refining, marketing and shipping 35 20 49 ------- ------- ------- 28 Total capital expenditures $ 205 $ 197 $ 243 ======= ======= ======= AT END OF PERIOD ---------------- 29 Total debt $ 1,999 $ 2,401 $ 2,114 ======= ======= ======= 30 Stockholders' equity $ 3,543 $ 2,927 $ 3,408 ======= ======= =======
(*) Net income adjusted for depreciation and amortization, exploratory dry holes, deferred income taxes, undistributed earnings of affiliates and gains on asset sales. 3 10 AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL FINANCIAL DATA (UNAUDITED) (IN MILLIONS)
Nine Months -------------------- 2000 1999 ------ ------ (A) (B) INCOME STATEMENT Line ---------------- No. REVENUES - ---- 1 Sales and other operating revenues $8,308 $4,770 Non-operating income 2 Gains on asset sales - - 273 3 Equity in income of HOVENSA L.L.C 76 24 4 Other 87 95 ------ ------ 5 Total revenues 8,471 5,162 ------ ------ COSTS AND EXPENSES 6 Cost of products sold 5,361 2,935 7 Production expenses 401 327 8 Marketing expenses 385 288 9 Other operating expenses 168 168 Exploration expenses, including dry holes 10 and lease impairment 217 186 11 General and administrative expenses 152 184 12 Interest expense 119 116 13 Depreciation, depletion and amortization 516 434 ------ ------ 14 Total costs and expenses 7,319 4,638 ------ ------ 15 Income before income taxes 1,152 524 16 Provision for income taxes 469 217 ------ ------ 17 NET INCOME $ 683 $ 307 ====== ====== 18 CASH FLOW FROM OPERATIONS (*) $1,422 $ 564 ----------------------------- ====== ====== CAPITAL EXPENDITURES -------------------- 19 Exploration and production $ 492 $ 560 20 Refining, marketing and shipping 118 57 ------ ------ 21 Total capital expenditures $ 610 $ 617 ====== ======
(*) Net income adjusted for depreciation and amortization, exploratory dry holes, deferred income taxes, undistributed earnings of affiliates and gains on asset sales. 4 11 AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL OPERATING DATA (IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Third Third Second Quarter Quarter Quarter 2000 1999 2000 ------- ------- ------- (A) (B) (C) OPERATING DATA Line -------------- No. NET PRODUCTION PER DAY - ----- ---------------------- Crude oil - barrels 1 United States 56 57 55 2 United Kingdom 123 111 112 3 Norway 23 26 27 4 Denmark 26 7 19 5 Gabon 7 10 7 6 Indonesia and Azerbaijan 8 4 7 ------- ------- ------- 7 Total 243 215 227 ======= ======= ======= Natural gas liquids - barrels 8 United States 13 12 12 9 United Kingdom 6 4 7 10 Norway 1 2 2 11 Thailand 1 1 1 ------- ------- ------- 12 Total 21 19 22 ======= ======= ======= Natural gas - mcf 13 United States 282 346 298 14 United Kingdom 239 219 299 15 Norway 21 31 24 16 Denmark 45 -- 25 17 Indonesia and Thailand 29 12 33 ------- ------- ------- 18 Total 616 608 679 ======= ======= ======= 19 Barrels of oil equivalent 367 335 362 ======= ======= ======= AVERAGE SELLING PRICE --------------------- Crude oil - per barrel 20 United States $ 24.40 $ 18.93 $ 24.46 21 Foreign 26.55 20.47 24.09 Natural gas liquids - per barrel 22 United States $ 23.81 $ 14.42 $ 18.69 23 Foreign 24.54 16.44 20.64 Natural gas - per mcf 24 United States $ 3.98 $ 2.39 $ 3.37 25 Foreign 2.16 1.60 2.10 MARKETING AND REFINING - ---------------------- BARRELS PER DAY --------------- 26 Refined products sold 314 310 352 ======= ======= ======= 27 Refinery runs (net) 203 198 223 ======= ======= =======
5 12 AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES SUPPLEMENTAL OPERATING DATA (IN THOUSANDS, EXCEPT FOR AVERAGE SELLING PRICES)
Nine Months -------------------------- 2000 1999 -------- -------- (A) (B) OPERATING DATA Line -------------- No. NET PRODUCTION PER DAY - ---- ---------------------- Crude oil - barrels 1 United States 54 53 2 United Kingdom 116 108 3 Norway 24 25 4 Denmark 25 2 5 Gabon 8 11 6 Indonesia and Azerbaijan 7 4 -------- -------- 7 Total 234 203 ======== ======== Natural gas liquids - barrels 8 United States 13 9 9 United Kingdom 6 6 10 Norway 2 1 11 Thailand 1 -- -------- -------- 12 Total 22 16 ======== ======== Natural gas - mcf 13 United States 292 338 14 United Kingdom 294 242 15 Norway 23 31 16 Denmark 35 -- 17 Indonesia and Thailand 33 6 -------- -------- 18 Total 677 617 ======== ======== 19 Barrels of oil equivalent 369 322 ======== ======== AVERAGE SELLING PRICE --------------------- Crude oil - per barrel 20 United States $ 23.84 $ 15.10 21 Foreign 25.72 15.64 Natural gas liquids - per barrel 22 United States $ 21.22 $ 11.76 23 Foreign 22.50 12.02 Natural gas - per mcf 24 United States $ 3.26 $ 2.07 25 Foreign 2.12 1.79 MARKETING AND REFINING - ---------------------- BARRELS PER DAY --------------- 26 Refined products sold 356 340 ======== ======== 27 Refinery runs (net) 209 214 ======== ========
CONTACT: AMERADA HESS CORPORATION - C. T. TURSI (212) 536-8593 6 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMERADA HESS CORPORATION (REGISTRANT) By s/s John Y. Schreyer --------------------------------------- John Y. Schreyer Executive Vice President and Chief Financial Officer Date: October 25, 2000 -----END PRIVACY-ENHANCED MESSAGE-----