| Document and Company Information (USD $) | ||
| 6 Months Ended
Jun. 30, 2009 | Jun. 30, 2008
| |
| Document and Company Information [Abstract] | ||
| Entity Registrant Name | Hess Corporation | |
| Entity Central Index Key | 0000004447 | |
| Document Type | 10-Q | |
| Document Period End Date | 2009-06-30 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Well-known Seasoned Issuer | Yes | |
| Entity Voluntary Filers | No | |
| Entity Current Reporting Status | Yes | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Public Float | $36,438,000,000 | |
| Entity Common Stock, Shares Outstanding (actual number) | 327,052,233 |
| Statement of Consolidated Income (USD $) | ||||
| In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| REVENUES AND NON-OPERATING INCOME | ||||
| Sales (excluding excise taxes) and other operating revenues | $6,751 | $11,711 | $13,666 | $22,358 |
| Equity in income (loss) of HOVENSA L.L.C. | (75) | (19) | (116) | (29) |
| Other, net | 79 | 37 | 77 | 100 |
| Total revenues and non-operating income | 6,755 | 11,729 | 13,627 | 22,429 |
| COSTS AND EXPENSES | ||||
| Cost of products sold (excluding items shown separately below) | 4,705 | 8,337 | 9,887 | 16,042 |
| Production expenses | 444 | 494 | 853 | 918 |
| Marketing expenses | 245 | 267 | 502 | 500 |
| Exploration expenses, including dry holes and lease impairment | 312 | 158 | 505 | 310 |
| Other operating expenses | 43 | 47 | 91 | 92 |
| General and administrative expenses | 136 | 156 | 296 | 308 |
| Interest expense | 95 | 65 | 172 | 132 |
| Depreciation, depletion and amortization | 558 | 482 | 1,044 | 934 |
| Total costs and expenses | 6,538 | 10,006 | 13,350 | 19,236 |
| INCOME BEFORE INCOME TAXES | 217 | 1,723 | 277 | 3,193 |
| Provision for income taxes | 115 | 812 | 192 | 1,530 |
| Net income | 102 | 911 | 85 | 1,663 |
| Less: Net income attributable to noncontrolling interests | 2 | 11 | 44 | 4 |
| NET INCOME ATTRIBUTABLE TO HESS CORPORATION | $100 | $900 | $41 | $1,659 |
| NET INCOME PER SHARE ATTRIBUTABLE TO HESS CORPORATION | ||||
| BASIC | 0.31 | 2.81 | 0.13 | 5.2 |
| DILUTED | 0.31 | 2.76 | 0.13 | 5.11 |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (DILUTED) | 325.8 | 326.2 | 325.7 | 325 |
| COMMON STOCK DIVIDENDS PER SHARE | 0.1 | 0.1 | 0.2 | 0.2 |
| Consolidated Balance Sheet (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| CURRENT ASSETS | ||
| Cash and cash equivalents | $1,063 | $908 |
| Accounts receivable | 4,097 | 4,297 |
| Inventories | 1,358 | 1,308 |
| Other current assets | 990 | 819 |
| Total current assets | 7,508 | 7,332 |
| INVESTMENTS IN AFFILIATES | ||
| HOVENSA L.L.C. | 804 | 919 |
| Other | 209 | 208 |
| Total investments in affiliates | 1,013 | 1,127 |
| PROPERTY, PLANT AND EQUIPMENT | ||
| Total - at cost | 28,387 | 27,437 |
| Less reserves for depreciation, depletion, amortization and lease impairment | 11,966 | 11,166 |
| Property, plant and equipment - net | 16,421 | 16,271 |
| GOODWILL | 1,225 | 1,225 |
| DEFERRED INCOME TAXES | 2,413 | 2,292 |
| OTHER ASSETS | 336 | 342 |
| TOTAL ASSETS | 28,916 | 28,589 |
| CURRENT LIABILITIES | ||
| Accounts payable | 5,331 | 5,045 |
| Accrued liabilities | 1,679 | 1,905 |
| Taxes payable | 468 | 637 |
| Current maturities of long-term debt | 135 | 143 |
| Total current liabilities | 7,613 | 7,730 |
| LONG-TERM DEBT | 4,178 | 3,812 |
| DEFERRED INCOME TAXES | 2,235 | 2,241 |
| ASSET RETIREMENT OBLIGATIONS | 1,249 | 1,164 |
| OTHER LIABILITIES | 1,263 | 1,251 |
| Total liabilities | 16,538 | 16,198 |
| Hess Corporation Stockholders' Equity | ||
| Common stock, par value $1.00; Authorized - 600,000 shares; Issued 327,052 shares at June 30, 2009; 326,133 shares at December 31, 2008 | 327 | 326 |
| Capital in excess of par value | 2,415 | 2,347 |
| Retained earnings | 11,617 | 11,642 |
| Accumulated other comprehensive income (loss) | (2,100) | (2,008) |
| Total Hess Corporation stockholders' equity | 12,259 | 12,307 |
| Noncontrolling interests | 119 | 84 |
| Total equity | 12,378 | 12,391 |
| TOTAL LIABILITIES AND EQUITY | $28,916 | $28,589 |
| Consolidated Balance Sheet (Parenthetical) (USD $) | ||
| Share data in Thousands | Jun. 30, 2009
| Dec. 31, 2008
|
| Common stock, par value | 1 | 1 |
| Common stock, shares authorized | 600,000 | 600,000 |
| Common stock, shares issued | 327,052 | 326,133 |
| Statement of Consolidated Cash Flows (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net income | $85 | $1,663 |
| Adjustments to reconcile net income to net cash provided by operating activities | ||
| Depreciation, depletion and amortization | 1,044 | 934 |
| Exploratory dry hole costs and lease impairment | 304 | 105 |
| Benefit for deferred income taxes | (304) | (112) |
| Equity in (income) loss of HOVENSA L.L.C., net of distributions | 116 | 79 |
| Changes in operating assets and liabilities and other | (4) | 246 |
| Net cash provided by operating activities | 1,241 | 2,915 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Capital expenditures | (1,389) | (2,005) |
| Other, net | 32 | 39 |
| Net cash used in investing activities | (1,357) | (1,966) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Net repayments of debt with maturities of 90 days or less | (850) | (3) |
| Debt with maturities of greater than 90 days | ||
| Borrowings | 1,247 | 0 |
| Repayments | (39) | (32) |
| Cash dividends paid | (98) | (97) |
| Distributions to noncontrolling interests | (1) | (48) |
| Employee stock options exercised, including income tax benefits | 12 | 103 |
| Net cash provided by (used in) financing activities | 271 | (77) |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 155 | 872 |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 908 | 607 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $1,063 | $1,479 |
| Basis of Presentation | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Basis of Presentation [Abstract] | |
| Basis of Presentation | 1. Basis of Presentation 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 Hess Corporations (the Corporation) consolidated financial position at June30, 2009 and December31, 2008 and the consolidated results of operations for the three and six-month periods ended June30, 2009 and 2008 and the consolidated cash flows for the six month periods ended June30, 2009 and 2008. The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year. The financial statements were prepared in accordance with the requirements of the Securities and Exchange Commission (SEC)for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by U.S. generally accepted accounting principles (GAAP)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 Corporations Form 10-K for the year ended December31, 2008. Effective January1, 2009, the Corporation adopted Financial Accounting Standards Board (FASB)Statement No.160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No.51 (FAS 160), which changes the accounting for and reporting of noncontrolling interests in a consolidated subsidiary. As required, the Corporation retrospectively applied the presentation and disclosure requirements of FAS 160. At June30, 2009 and December31, 2008 noncontrolling interests of $119million and $84million, respectively, have been classified as a component of equity. Previously the noncontrolling interests had been classified in other liabilities. Net income attributable to the noncontrolling interests of $2million for the three months ended and $44million for the six months ended June30, 2009 and $11million for the three months ended and $4million for the six months ended June30,2008 are included in net income. Certain amounts in the consolidated financial statements and footnotes have been reclassified to conform with the presentation requirements of FAS 160. Effective January1, 2009, the Corporation also adopted FASB Statement No.161, Disclosures about Derivative Instruments and Hedging Activities, which expands the disclosure requirements for an entitys use of derivative instruments. See Note 8, Derivative Instruments, Hedging, and Trading Activities, for these disclosures. The Corporation adopted FASB Staff Position FAS No.157-2, Effective Date of FASB Statement No.157, effective January1, 2009, which requires the application of the fair value measurement and disclosure provisions of FAS 157 to nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis. The impact of adoption was not material to the Corporations consolidated financial statements. Effective June30, 2009, the Corporation adopted FASB Statement No.165 (FAS 165), Subsequent Events. FAS 165 provides guidance on the |
| Inventories | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Inventories [Abstract] | |
| Inventories | 2. Inventories Inventories consist of the following (in millions): June 30, December 31, 2009 2008 Crude oil and other charge stocks $ 396 $ 383 Refined products and natural gas 1,193 988 Less: LIFO adjustment (664 ) (500 ) 925 871 Merchandise, materials and supplies 433 437 Total inventories $ 1,358 $ 1,308 |
| Refining Joint Venture | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Refining Joint Venture [Abstract] | |
| Refining Joint Venture | 3. Refining Joint Venture The Corporation accounts for its investment in HOVENSA L.L.C. (HOVENSA)using the equity method. Summarized financial information for HOVENSA follows (in millions): June 30, December 31, 2009 2008 Summarized balance sheet Cash and short-term investments $ 201 $ 75 Other current assets 683 664 Net fixed assets 2,089 2,136 Other assets 53 58 Current liabilities (996 ) (679 ) Long-term debt (356 ) (356 ) Deferred liabilities and credits (107 ) (104 ) Members equity $ 1,567 $ 1,794 Three months Six months ended June 30, ended June 30, 2009 2008 2009 2008 Summarized income statement Total revenues $ 2,640 $ 5,446 $ 4,663 $ 9,757 Cost and expenses (2,787 ) (5,482 ) (4,891 ) (9,811 ) Net loss $ (147 ) $ (36 ) $ (228 ) $ (54 ) Hess Corporations share, before income taxes $ (75 ) $ (19 ) $ (116 ) $ (29 ) During the first half of 2008, the Corporation received a cash distribution of $50 million from HOVENSA. |
| Capitalized Exploratory Well Costs | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Capitalized Exploratory Wells Costs [Abstract] | |
| Capitalized Exploratory Well Costs | 4. Capitalized Exploratory Well Costs The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves for the six months ended June30, 2009 (in millions): Beginning balance at January 1 $ 1,094 Additions to capitalized exploratory well costs pending the determination of proved reserves 162 Reclassifications to wells, facilities, and equipment based on the determination of proved reserves (10 ) Capitalized exploratory wells charged to expense (54 ) Ending balance at June30 $ 1,192 The preceding table excludes costs related to exploratory dry holes of $131million which were incurred and subsequently expensed in 2009. Capitalized exploratory well costs greater than one year old after completion of drilling were $665million as of June 30, 2009 and $381million as of December31, 2008. This increase is primarily related to the Pony and Tubular Bells projects in the deepwater Gulf of Mexico, where development options are being evaluated. |
| Long Term Debt | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Long Term Debts [Abstract] | |
| Long-Term Debt | 5. Long-Term Debt In February2009, the Corporation issued $250million of 5year senior unsecured notes with a coupon of 7% and $1billion of 10year senior unsecured notes with a coupon of 8.125%. The majority of the proceeds were used to repay revolving credit debt and outstanding borrowings on other credit facilities. |
| Foreign Currency | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Foreign Currency [Abstract] | |
| Foreign Currency | 6. Foreign Currency Pre-tax foreign currency gains amounted to the following (in millions): Three months Six months ended June 30, ended June 30, 2009 2008 2009 2008 Foreign currency gains $ 35 $ 11 $ 31 $ 44 The pre-tax amount of foreign currency gains is included in other, net within revenues and non-operating income. |
| Retirement Plans | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Retirement Plans [Abstract] | |
| Retirement Plans | 7. Retirement Plans Components of net periodic pension cost consisted of the following (in millions): Three months Six months ended June 30, ended June 30, 2009 2008 2009 2008 Service cost $ 10 $ 10 $ 20 $ 20 Interest cost 20 20 40 40 Expected return on plan assets (15 ) (20 ) (30 ) (40 ) Amortization of net loss 14 3 28 6 Pension expense $ 29 $ 13 $ 58 $ 26 In 2009, the Corporation expects to contribute approximately $100million to its pension plans. Through June30, 2009, the Corporation had contributed $43million to its pension plans. |
| Derivative Instruments, Hedging, and Trading Activities | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Derivative Instruments, Hedging, and Trading Activities [Abstract] | |
| Derivative Instruments, Hedging, and Trading Activities | 8. Derivative Instruments, Hedging, and Trading Activities The Corporation utilizes derivative instruments for both non-trading and trading activities. In non-trading activities, the Corporation uses futures, forwards, options and swaps individually or in combination, to mitigate its exposure to fluctuations in prices of crude oil, natural gas, refined products and electricity, and changes in foreign currency exchange rates. In trading activities, the Corporation, principally through a consolidated partnership (in which the Corporation has a 50% voting interest), trades energy commodities and energy derivatives, including futures, forwards, options and swaps, based on expectations of future market conditions. The following information includes 100% of the trading partnerships accounts. The Corporation maintains a control environment under the direction of its chief risk officer and through its corporate risk policy, which the Corporations senior management has approved. Controls include volumetric, term and value-at-risk limits. Risk limits are monitored daily and exceptions are reported to business units and to senior management. The Corporations risk management department also performs independent verifications of sources of fair values and validations of valuation models. These controls apply to all of the Corporations non-trading and trading activities, including the consolidated trading partnership. The table below shows the total volume of the Corporations trading and non-trading derivative instruments outstanding at June30, 2009: Volume* Commodity Contracts Crude oil, refined products, and natural gas liquids (millions of barrels) 2,149 Natural gas (millions of mcf) 9,282 Electricity (millions of megawatt hours) 191 Other Contracts Foreign exchange (millions of U.S. dollars) 2,116 * Gross notional amounts represent both long and short positions, including long and short positions that offset in a closed position that has not reached contractual maturity. Gross notional amounts do not quantify risk or represent assets or liabilities of the Corporation, but are used in the calculation of cash settlements under the contracts. The Corporation records all derivative instruments on the balance sheet at fair value (see Note 9, Fair Value Measurements). The table below reflects the gross and net fair values of the Corporations derivative instruments as of June30, 2009 (in millions): Accounts Accounts Receivable Payable Derivative contracts designated as hedging instruments Commodity $ 1,118 $ (1,940 ) Derivative contracts not designated as hedging instruments* Commodity 11,881 (13,106 ) Foreign exchange 78 (39 ) Other 12 (13 ) Total derivative contracts not designated as hedging instruments 11,971 (13,158 ) Gross fair value of derivative contracts 13,089 (15,098 ) Master netting arrangements (11,270 ) 11,270 |
| Fair Value Measurements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Fair Value Measurements [Abstract] | |
| Fair Value Measurements | 9. Fair Value Measurements The Corporation measures fair value in accordance with the provisions of FASB Statement No.157, Fair Value Measurements, (FAS 157). FAS 157 establishes a hierarchy for the inputs used to measure fair value based on the source of the input, which generally range from quoted prices for identical instruments in a principal trading market (Level 1) to estimates determined using related market data (Level 3). Multiple inputs may be used to measure fair value, however, the level of fair value for each financial asset or liability presented below is based on the lowest significant input level within this fair value hierarchy. The following table provides the fair value of the Corporations financial assets and (liabilities)based on this hierarchy (in millions): Collateral and Balance at counterparty June 30, Level 1 Level 2 Level 3 netting 2009 Supplemental pension plan investments $ 54 $ $ 14 $ $ 68 Derivative contracts Assets 160 1,338 468 (428 ) 1,538 Liabilities (166 ) (3,112 ) (697 ) 241 (3,734 ) The following table provides changes in financial assets and liabilities that are measured at fair value based on Level 3 inputs (in millions): Three months Six months ended June 30, ended June 30, 2009 2009 Balance at beginning of period $ (165 ) $ 149 Unrealized gains (losses) Included in earnings (12 ) 50 Included in other comprehensive income (loss) (19 ) (224 ) Purchases, sales or other settlements during the period 16 16 Net transfers in to (out of) Level 3 (35 ) (206 ) Balance at end of period $ (215 ) $ (215 ) The carrying amounts of the Corporations financial instruments generally approximate their fair values at June30, 2009 except fixed rate long term debt, which had a carrying value of $4,313million and a fair value of $4,611million. |
| Weighted Average Common Shares | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Weighted Average Common Shares [Abstract] | |
| Weighted Average Common Shares | 10. Weighted Average Common Shares The weighted average numbers of common shares used in the basic and diluted earnings per share computations are as follows (thousands of shares): Three months Six months ended June 30, ended June 30, 2009 2008 2009 2008 Common shares basic 323,975 320,936 323,676 319,167 Effect of dilutive securities Restricted common stock 986 1,515 1,128 1,945 Stock options 818 3,192 885 3,343 Convertible preferred stock 534 534 Common shares diluted 325,779 326,177 325,689 324,989 The Corporation issued 3,050,250 stock options and 1,022,050 shares of restricted stock in the first six months of 2009. The table above excludes the effect of out-of-the-money options on 3,546,000 shares and 4,073,000 shares for the quarter and six months ended June 30, 2009, respectively. |
| Comprehensive Income and Equity | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Comprehensive Income and Equity [Abstract] | |
| Comprehensive Income and Equity | 11. Equity and Comprehensive Income The table below summarizes changes in equity (amounts in millions): Hess Non- Stockholders Controlling Equity Interest Total Equity Balance January1, 2009 $ 12,307 $ 84 $ 12,391 Net Income 41 44 85 Deferred gains (losses)on cash flow hedges, after tax Effect of hedge losses recognized in income 419 419 Net change in fair value of cash flow hedges (532 ) (532 ) Change in foreign currency translation adjustments and other 2 (8 ) (6 ) Change in post retirement plan liabilities, after tax 19 19 Comprehensive income (loss) (51 ) 36 (15 ) Activity related to restricted common stock awards, net 27 27 Employee stock options, including income tax benefits 42 42 Cash dividends declared (66 ) (66 ) Distributions to non-controlling interests (1 ) (1 ) Balance June30, 2009 $ 12,259 $ 119 $ 12,378 Balance January1, 2008 $ 9,774 $ 226 $ 10,000 Net Income 1,659 4 1,663 Deferred gains (losses)on cash flow hedges, after tax Effect of hedge losses recognized in income 187 187 Net change in fair value of cash flow hedges (653 ) (653 ) Change in foreign currency translation adjustments and other 29 4 33 Change in post retirement plan liabilities, after tax 5 5 Comprehensive income (loss) 1,227 8 1,235 Activity related to restricted common stock awards, net 32 32 Employee stock options, including income tax benefits 130 130 Cash dividends declared (65 ) (65 ) Distributions to non-controlling interests (48 ) (48 ) Balance June30, 2008 $ 11,098 $ 186 $ 11,284 Comprehensive income was $248million ($239million attributable to Hess Corporation) for the three months ended June30, 2009 and $290million ($279million attributable to Hess Corporation) for the three months ended June30, 2008. |
| Segment Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Segment Information [Abstract] | |
| Segment Information | 12. Segment Information The Corporations results by operating segment were as follows (in millions): Three months Six months ended June 30, ended June 30, 2009 2008 2009 2008 Operating revenues Exploration and Production $ 1,825 $ 3,234 $ 3,027 $ 5,886 Marketing and Refining 4,952 8,558 10,693 16,621 Less: Transfers between affiliates (26 ) (81 ) (54 ) (149 ) Total* $ 6,751 $ 11,711 $ 13,666 $ 22,358 Net income (loss)attributable to Hess Corporation Exploration and Production $ 215 $ 1,025 $ 151 $ 1,849 Marketing and Refining (30 ) (52 ) 72 (36 ) Corporate, including interest (85 ) (73 ) (182 ) (154 ) Total $ 100 $ 900 $ 41 $ 1,659 * Operating revenues exclude excise and similar taxes of approximately $500million and $550million in the second quarter of 2009 and 2008, respectively, and $1,000million and $1,050million during the first half of 2009 and 2008, respectively. Identifiable assets by operating segment were as follows (in millions): June 30, December 31, 2009 2008 Identifiable assets Exploration and Production $ 20,637 $ 19,506 Marketing and Refining 6,371 6,680 Corporate 1,908 2,403 Total $ 28,916 $ 28,589 |
