<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
COMMISSION FILE NUMBER 1-1204
----------------
AMERADA HESS CORPORATION
(Exact name of registrant as specified in its charter)
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
--- ---
At June 30, 1998, 90,957,905 shares of Common Stock were outstanding.
================================================================================
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
---------------------------- ----------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Sales (excluding excise taxes) and
other operating revenues $ 1,617,254 $ 1,833,960 $ 3,443,043 $ 4,230,790
Non-operating revenues
Asset sales -- 16,463 80,321 16,463
Other 27,072 28,401 43,948 47,669
----------- ----------- ----------- -----------
Total revenues 1,644,326 1,878,824 3,567,312 4,294,922
----------- ----------- ----------- -----------
COSTS AND EXPENSES
Cost of products sold and operating expenses 1,198,111 1,361,763 2,609,484 3,233,837
Exploration expenses, including dry holes
and lease impairment 92,859 91,157 197,326 152,945
Selling, general and administrative expenses 180,826 155,056 359,312 300,380
Interest expense 33,329 33,755 67,317 67,407
Depreciation, depletion and amortization 160,048 160,892 321,817 349,354
Provision for income taxes 872 34,544 46,369 144,754
----------- ----------- ----------- -----------
Total costs and expenses 1,666,045 1,837,167 3,601,625 4,248,677
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (21,719) $ 41,657 $ (34,313) $ 46,245
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE -
BASIC AND DILUTED $ (.24) $ .45 $ (.38) $ .50
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 89,904 91,787 89,982 92,206
COMMON STOCK DIVIDENDS PER SHARE $ .15 $ .15 $ .30 $ .30
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE> 3
PART I - FINANCIAL INFORMATION (CONT'D.)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
ASSETS
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 40,894 $ 91,154
Accounts receivable 656,053 993,098
Inventories 826,004 937,949
Other current assets 199,594 181,431
------------ ------------
Total current assets 1,722,545 2,203,632
------------ ------------
INVESTMENTS AND ADVANCES 262,810 250,458
------------ ------------
PROPERTY, PLANT AND EQUIPMENT
Total - at cost 13,125,318 12,621,635
Less reserves for depreciation, depletion,
amortization and lease impairment 7,689,270 7,430,841
------------ ------------
Property, plant and equipment - net 5,436,048 5,190,794
------------ ------------
DEFERRED INCOME TAXES AND OTHER ASSETS 356,485 289,735
------------ ------------
TOTAL ASSETS $ 7,777,888 $ 7,934,619
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 588,111 $ 752,576
Accrued liabilities 445,378 513,389
Deferred revenue 71,185 175,684
Taxes payable 150,518 195,692
Notes payable 76,300 17,825
Current maturities of long-term debt 139,685 84,685
------------ ------------
Total current liabilities 1,471,177 1,739,851
------------ ------------
LONG-TERM DEBT 2,132,484 1,975,281
------------ ------------
CAPITALIZED LEASE OBLIGATIONS 15,707 27,752
------------ ------------
DEFERRED LIABILITIES AND CREDITS
Deferred income taxes 567,945 562,371
Other 459,057 413,665
------------ ------------
Total deferred liabilities and credits 1,027,002 976,036
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00
Authorized - 20,000,000 shares for issuance in series -- --
Common stock, par value $1.00
Authorized - 200,000,000 shares
Issued - 90,957,905 shares at June 30, 1998;
91,451,205 shares at December 31, 1997 90,958 91,451
Capital in excess of par value 770,018 774,631
Retained earnings 2,379,764 2,463,005
Equity adjustment from foreign currency translation (109,222) (113,388)
------------ ------------
Total stockholders' equity 3,131,518 3,215,699
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,777,888 $ 7,934,619
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 4
PART I - FINANCIAL INFORMATION (CONT'D.)
AMERADA HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
SIX MONTHS ENDED JUNE 30
(IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (34,313) $ 46,245
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation, depletion and amortization 321,817 349,354
Exploratory dry hole costs and lease impairment 131,699 94,938
Pre-tax gain on asset sales (80,321) (16,463)
Changes in operating assets and liabilities 38,791 343,315
Deferred income taxes and other items (16,403) (25,640)
--------- ---------
Net cash provided by operating activities 361,270 791,749
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (709,098) (611,958)
Proceeds from asset sales and other 108,267 59,873
--------- ---------
Net cash used in investing activities (600,831) (552,085)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in notes payable 58,458 137,000
Long-term borrowings 515,000 29,000
Repayment of long-term debt and capitalized lease obligations (313,222) (205,910)
Cash dividends paid (41,115) (41,637)
Common stock acquired (28,473) (81,965)
--------- ---------
Net cash provided by (used in) financing activities 190,648 (163,512)
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,347) (1,717)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (50,260) 74,435
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 91,154 112,522
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 40,894 $ 186,957
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
PART I - FINANCIAL INFORMATION (CONT'D.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands)
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 Company's
consolidated financial position at June 30, 1998 and December 31,
1997, and the consolidated results of operations for the three and
six-month periods ended June 30, 1998 and 1997 and the
consolidated cash flows for the six-month periods ended June 30,
1998 and 1997. 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 1997 Annual
Report to Stockholders, which have been incorporated by reference
in the Corporation's Form 10-K for the year ended December 31,
1997.
Note 2 - On January 1, 1998, the Corporation began capitalizing the costs
of internal use software in accordance with AICPA Statement of
Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. This accounting change
increased net income for the six months ended June 30, 1998 by
$6,422 ($.07 per share).
Note 3 - Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
<S> <C> <C>
Crude oil and other charge stocks $247,177 $269,783
Refined and other finished products 476,450 564,973
Materials and supplies 102,377 103,193
-------- --------
Total inventories $826,004 $937,949
======== ========
</TABLE>
Note 4 - The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
Three months Six months
ended June 30 ended June 30
------------------------- -------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Current $ (5,299) $ 44,620 $ 46,966 $ 145,406
Deferred 6,171 (10,076) (597) (652)
--------- --------- --------- ---------
Total $ 872 $ 34,544 $ 46,369 $ 144,754
========= ========= ========= =========
</TABLE>
4
<PAGE> 6
PART I - FINANCIAL INFORMATION (CONT'D.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands)
Note 5 - Foreign currency exchange transactions are reflected in selling,
general and administrative expenses. The net effect, after
applicable income taxes, amounted to gains of $593 and $315,
respectively, for the three and six-month periods ended June 30,
1998 compared to losses of $1,832 and $449 for the corresponding
periods of 1997.
Note 6 - The weighted average number of common shares used in the basic and
diluted earnings per share computations are as follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30 ended June 30
----------------- -----------------
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Common shares - basic 89,904 91,387 89,982 91,810
Effect of dilutive securities
(equivalent shares)
Nonvested common stock -- 376 -- 361
Stock options -- 24 -- 35
------ ------ ------ ------
Common shares - diluted 89,904 91,787 89,982 92,206
====== ====== ====== ======
</TABLE>
The antidilutive effects of 656 nonvested common shares and 127
stock options and 626 common shares and 120 stock options are
excluded in the three months and six months ended June 30, 1998,
respectively.
Note 7 - The Corporation uses futures, forwards, options and swaps to
reduce the impact of fluctuations in the prices of crude oil,
natural gas and refined products. These contracts correlate to
movements in the value of inventory and the prices of crude oil
and natural gas, and as hedges, any resulting gains or losses are
recorded as part of the hedged transaction. Net deferred gains
resulting from the Corporation's petroleum hedging activities were
approximately $16,000 at June 30, 1998, including $15,000 of
unrealized gains.
Note 8 - Interest costs related to certain long-term construction projects
have been capitalized in accordance with FAS No. 34. During the
three and six-month periods ended June 30, 1998, interest costs of
$7,603 and $13,196, respectively, were capitalized compared to
$1,770 and $3,287 for the corresponding periods of 1997.
Note 9 - Comprehensive income, which includes net income and the effects of
foreign currency translation recorded directly in stockholders'
equity, is as follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30 ended June 30
---------------------- ----------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Comprehensive income (loss) $(30,760) $ 53,833 $(30,147) $ 17,984
======== ======== ======== ========
</TABLE>
5
<PAGE> 7
PART I - FINANCIAL INFORMATION (CONT'D.)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
RESULTS OF OPERATIONS
The results of operations for the second quarter of 1998
amounted to a net loss of $22 million compared with net income of
$42 million in the second quarter of 1997. The net loss for the
first half of 1998 amounted to $34 million compared with net
income of $46 million in the first half of 1997. Excluding gains
on asset sales, the loss in the first half of 1998 was $90 million
compared with income of $35 million in the first half of 1997.
The after-tax results by major operating activity for the
three and six-month periods ended June 30, 1998 and 1997 were as
follows (in millions, except per share data):
<TABLE>
<CAPTION>
Three months Six months
ended June 30 ended June 30
---------------- ----------------
1998 1997 1998 1997
----- ----- ----- -----
<S> <C> <C> <C> <C>
Exploration and production $ (6) $ 64 $ 2 $ 161
Refining, marketing and shipping 18 3 (15) (53)
Corporate (6) (7) (20) (14)
Interest expense (28) (29) (57) (59)
----- ----- ----- -----
Income (loss) excluding asset sales (22) 31 (90) 35
Gains on asset sales -- 11 56 11
----- ----- ----- -----
Net income (loss) $ (22) $ 42 $ (34) $ 46
===== ===== ===== =====
Net income (loss)
per share (diluted) $(.24) $ .45 $(.38) $ .50
===== ===== ===== =====
</TABLE>
The net gain on asset sales in 1998 of $56 million reflects
the sale of three oil and gas properties in the United States and
Norway. The 1997 asset sale represents the sale of a United States
natural gas property.
Exploration and Production
Excluding gains on asset sales, earnings from exploration
and production activities decreased by $70 million in the second
quarter of 1998 and $159 million in the first half of 1998,
compared with the corresponding periods of 1997. The decreases
were primarily due to lower worldwide crude oil selling prices
and lower United Kingdom crude oil sales volumes. Exploration
expenses were higher, particularly in the first quarter of 1998.
6
<PAGE> 8
PART I - FINANCIAL INFORMATION (CONT'D.)
RESULTS OF OPERATIONS (CONTINUED)
The Corporation's average selling prices, including the
effects of hedging, were as follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30 ended June 30
-------------------- --------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Crude oil and natural gas liquids
(per barrel)
United States $ 11.82 $ 17.92 $ 12.86 $ 19.29
Foreign 13.79 17.66 14.18 19.61
Natural gas (per Mcf)
United States 2.10 2.24 2.16 2.47
Foreign 2.34 2.32 2.41 2.34
</TABLE>
The Corporation's net daily worldwide production was as
follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30 ended June 30
------------------- -------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Crude oil and natural gas liquids
(barrels per day)
United States 44,211 43,158 44,516 43,018
Foreign 159,237 164,867 161,751 178,297
------- ------- ------- -------
Total 203,448 208,025 206,267 221,315
======= ======= ======= =======
Natural gas (Mcf per day)
United States 287,447 313,570 293,133 319,728
Foreign 302,798 250,823 293,182 286,857
------- ------- ------- -------
Total 590,245 564,393 586,315 606,585
======= ======= ======= =======
</TABLE>
The decrease in foreign crude oil production reflects
natural decline and temporary production interruptions in several
United Kingdom fields. The decrease in United States natural gas
production was due to natural decline and the effect of asset
sales. The increase in foreign natural gas production principally
reflects higher demand in the United Kingdom. The Corporation has
several development projects which are anticipated to increase
net production of crude oil in the second half of the year.
7
<PAGE> 9
PART I - FINANCIAL INFORMATION (CONT'D.)
RESULTS OF OPERATIONS (CONTINUED)
Depreciation, depletion and amortization charges were
comparable in the second quarter of 1998 and 1997, but were lower
in the first half of 1998 reflecting lower production volumes in
the early part of the year. The Corporation also had positive oil
and gas reserve revisions at the end of 1997, which reduced
depreciation and related charges in 1998. Exploration expenses
were comparable in the second quarter of each year, but were
higher in the first half of 1998 reflecting increased activity in
the United States and United Kingdom in the first quarter.
Exploration expenses for the full year of 1998 are expected to be
lower than the 1997 level. Exploration and production selling,
general and administrative expenses were higher in the second
quarter and first half of 1998, reflecting increased activity in
new international areas and the expansion of natural gas marketing
activities in the United Kingdom.
The effective income tax rate on exploration and production
earnings was higher in 1998 than in 1997, reflecting a higher
effective tax rate in the United Kingdom, principally due to the
increased impact of non-deductible items at lower earnings levels
and the accrual of an ACT refund in 1997. The effective rate in
both years was also affected by exploration expenses in certain
international areas outside of the North Sea for which full income
tax benefits have not been recorded.
The Corporation's exploration and production earnings are
very sensitive to crude oil selling prices and the Corporation
cannot predict how long prices will remain at current low levels.
Refining, Marketing and Shipping
Refining, marketing and shipping operations had income of
$18 million in the second quarter of 1998 compared with $3 million
in the second quarter of 1997. Results for the first half of 1998
amounted to a loss of $15 million compared with a loss of $53
million in the first half of 1997. Refined product margins in 1998
improved somewhat from the 1997 levels in spite of continued low
selling prices for gasoline and other refined products. The
results, particularly in the early part of each year, were
negatively impacted by relatively mild weather which depressed
margins for distillates and residual fuel oils.
Refined product sales volumes amounted to 93 million barrels
in the first half of 1998 compared with 95 million barrels in the
first half of 1997. Marketing selling, general and administrative
expenses were higher in 1998, reflecting an emphasis on expanding
retail activity including the costs of operating the chain of 66
retail marketing properties in Florida which was acquired in June
1997. In 1998 and 1997, income taxes or benefits were not recorded
on the results of the Corporation's Virgin Islands subsidiary due
to available loss carryforwards. The absence of income tax
provisions increases the volatility of reported refining and
marketing results.
8
<PAGE> 10
PART I - FINANCIAL INFORMATION (CONT'D.)
RESULTS OF OPERATIONS (CONTINUED)
In February 1998, the Corporation announced an agreement in
principle with Petroleos de Venezuela, S.A. (PDVSA) to form a
joint venture, 50% owned by each party, to own and operate the
Corporation's Virgin Islands refinery. In May, the third extension
and amendment to the refinery's concession agreement in the Virgin
Islands was signed into law extending it to the joint venture
effective upon closing. Work is continuing on the underlying joint
venture agreements with closing anticipated by year-end. Upon
closing, the Corporation will receive the first installment of
$62.5 million on a ten-year, $625 million note. The joint venture
will also purchase the crude oil and refined product inventories
and other working capital of the refinery. The Corporation
estimates that at closing it will record a reserve of
approximately $125 million for a note, payment of which is
contingent on the future cash flow of the joint venture.
Corporate and Interest
Net corporate expenses were comparable in the second
quarters of 1998 and 1997, but increased by $6 million in the
first half of 1998 compared with the first half of 1997. The
change includes the effects of timing of accruals for anticipated
expenditures and variations in tax provisions related to foreign
source income.
After-tax interest expense was comparable in 1998 and 1997.
For the full year of 1998, interest expense is anticipated to be
somewhat higher than in 1997, reflecting increased borrowing to
fund capital expenditures related to oil and gas development
projects.
Consolidated Revenues
Sales and other operating revenues decreased by 12% and 19%
in the second quarter and first half of 1998, respectively,
compared with the comparable periods of 1997. The decreases were
primarily due to lower crude oil and refined product selling
prices. Crude oil sales volumes were also lower in 1998. Refined
product sales volumes increased slightly in the second quarter of
1998 but were lower in the first half of 1998 compared with 1997
sales volumes.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities, including changes
in operating assets and liabilities, amounted to $361 million in
the first half of 1998 compared with $792 million in the first
half of 1997. The decrease was primarily due to changes in working
capital items, including inventories. Cash flow, excluding special
items and changes in working capital components, amounted to $322
million in 1998 and $448 million in 1997. The difference largely
resulted from changes in operating income. The sale of three oil
and gas properties in the United States and Norway generated
proceeds of $98 million in 1998.
9
<PAGE> 11
PART 1 - FINANCIAL INFORMATION (CONT'D.)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Total debt was $2,388 million at June 30, 1998 compared with
$2,127 million at December 31, 1997, resulting in debt to total
capitalization ratios of 43.3% and 39.8%, respectively. At June
30, 1998, floating rate debt amounted to 41% of total debt,
including the effect of interest rate conversion (swap)
agreements. At June 30, 1998, the Corporation had $745 million of
additional borrowing capacity available under its revolving credit
agreement and additional unused lines of credit under uncommitted
arrangements with banks for $408 million. Debt is expected to
increase in the third quarter due to exploration and production
capital expenditures, but is anticipated to decline in the fourth
quarter from the application of proceeds to be received on the
closing of the refining joint venture.
In August, the Corporation completed private placements of
$225 million of fixed rate debt with three insurance companies.
The weighted average maturity of the three notes is 7.4 years. In
addition, the Corporation has entered into a 364-day revolving
credit facility of $300 million. The Corporation also plans to
sell and lease back its interests in two Gulf of Mexico oil and
gas production platforms for approximately $180 million.
In August 1996, the Corporation's Board of Directors
approved a two-year, $250 million stock repurchase program.
Through June 30, 1998, 3,004,600 shares have been purchased at a
cost of approximately $160 million. In August 1998, the Board
extended the term of the repurchase program to March 31, 1999.
Futures, forwards, options and swaps are used to reduce the
effects of changes in the selling prices of crude oil, natural gas
and refined products. These instruments are used to set the
selling prices of the Corporation's products and the related gains
or losses are an integral part of the Corporation's selling
prices. At June 30, 1998, the Corporation had open hedge positions
equal to 3% of its estimated worldwide crude oil production over
the next twelve months. The Corporation also had open contracts
equal to 14% of its estimated United States natural gas production
over the next twelve months and approximately 2% of its production
for the succeeding twelve months. In addition, the Corporation had
hedges covering 17% of its refining and marketing inventories and
had additional short positions, primarily crack spreads,
approximating 5% of refined products to be manufactured in the
next twelve months. As market conditions change, the Corporation
will adjust its hedge positions.
Capital expenditures in the first half of 1998 amounted to
$709 million compared with $612 million in the first half of 1997.
Capital expenditures for exploration and production activities
were $659 million in the first half of 1998 compared with $507
million in the first six months of 1997. Capital expenditures in
1998 included significant expenditures for oil and gas field
developments and $50 million for an increased interest in a
consolidated subsidiary with proved crude oil reserves and
exploration licenses in Gabon.
10
<PAGE> 12
PART 1 - FINANCIAL INFORMATION (CONT'D.)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
In the second quarter of 1998, the Corporation reached
agreement, subject to existing preemptive rights, to acquire
various interests in three companies operating in Azerbaijan with
production sharing contracts covering developed and undeveloped
oil and gas reserves, exploration prospects and transportation
rights. The cost to the Corporation of this acquisition, which is
scheduled to close in the third quarter, is expected to be
approximately $100 million.
Capital expenditures for the remainder of 1998 including the
pending oil and gas reserve acquisition described above, are
expected to be approximately $750 million and will be financed by
internally generated funds and external borrowings.
The Corporation continues its program of identifying and
modifying computer programs and systems that otherwise would not
properly function in the year 2000. The Corporation expenses year
2000 remediation costs as incurred and expects that total future
costs of this program will be approximately $15 million, a
portion of which is included in its normal information technology
budget.
11
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
The Annual Meeting of Stockholders of the Registrant was
held on May 6, 1998. The Inspectors of Election reported that
77,787,522 shares of Common Stock of the Registrant were
represented in person or by proxy at the meeting, constituting
85.12% of the votes entitled to be cast. At the meeting,
stockholders voted upon the election of five nominees for the
Board of Directors for the three-year term expiring in 2001 and
the ratification of the selection by the Board of Directors of
Ernst & Young LLP as the independent auditors of the Registrant
for the fiscal year ended December 31, 1998.
With respect to the election of directors, the inspectors
of election reported as follows:
<TABLE>
<CAPTION>
For Withhold Authority to Vote
Name Nominee Listed For Nominee Listed
---- -------------- ------------------
<S> <C> <C>
Nicholas F. Brady 76,807,873 979,649
J. Barclay Collins 76,644,696 1,142,826
Leon Hess 76,624,828 1,162,694
Thomas H. Kean 76,653,251 1,134,271
Frank A. Olson 76,788,686 998,836
</TABLE>
The inspectors further reported that 77,639,405 votes were
cast for the ratification of the selection of Ernst & Young LLP as
independent auditors for the fiscal year ending December 31, 1998,
65,819 votes were cast against said ratification and holders of
82,298 votes abstained.
There were no broker non-votes with respect to the election
of directors or the ratification of the selection of independent
auditors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K
The Registrant filed no report on Form 8-K during the three
months ended June 30, 1998.
12
<PAGE> 14
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 thereunto duly authorized.
AMERADA HESS CORPORATION
(REGISTRANT)
By s/s John B. Hess
----------------------------
JOHN B. HESS
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
By s/s John Y. Schreyer
----------------------------
JOHN Y. SCHREYER
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Date: August 10, 1998
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 40,894
<SECURITIES> 0
<RECEIVABLES> 656,053
<ALLOWANCES> 0
<INVENTORY> 826,004
<CURRENT-ASSETS> 1,722,545
<PP&E> 13,125,318
<DEPRECIATION> 7,689,270
<TOTAL-ASSETS> 7,777,888
<CURRENT-LIABILITIES> 1,471,177
<BONDS> 2,132,484
0
0
<COMMON> 90,958
<OTHER-SE> 3,040,560
<TOTAL-LIABILITY-AND-EQUITY> 7,777,888
<SALES> 3,443,043
<TOTAL-REVENUES> 3,567,312
<CGS> 2,609,484
<TOTAL-COSTS> 2,609,484
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67,317
<INCOME-PRETAX> 12,056
<INCOME-TAX> 46,369
<INCOME-CONTINUING> (34,313)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34,313)
<EPS-PRIMARY> (.38)
<EPS-DILUTED> (.38)
</TABLE>
