Hess 2008 Annual Report Download - page 44

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Interest
After-tax interest expense was as follows:
2008 2007 2006
(Millions of dollars)
Total interest incurred ......................................... $274 $306 $301
Less capitalized interest........................................ 750 100
Interest expense before income taxes .............................. 267 256 201
Less income taxes ............................................ 100 96 74
After-tax interest expense ...................................... $167 $160 $127
The decrease in interest incurred in 2008 principally reflects lower average debt. The decrease in capitalized
interest in 2008 reflects the completion of several development projects in 2007 and 2006. Interest expense in each
period includes the cost of letters of credit primarily issued to counterparties in hedging and trading activities. After-
tax interest expense in 2009 is expected to be in the range of $230 to $240 million. See Future Capital Requirements
and Resources for discussion of a $1,250 million note issuance in the first quarter of 2009.
Sales and Other Operating Revenues
Sales and other operating revenues totaled $41,165 million in 2008, an increase of 30% compared with 2007.
In 2007, sales and other operating revenues totaled $31,647 million, an increase of 13% compared with 2006. The
increase in each year reflects higher selling prices and sales volumes of crude oil, higher refined product selling
prices and increased sales volumes of electricity.
The change in cost of goods sold in each year principally reflects the change in sales volumes and prices of
refined products and purchased natural gas and electricity.
Liquidity and Capital Resources
The following table sets forth certain relevant measures of the Corporation’s liquidity and capital resources as
of December 31:
2008 2007
(Millions of dollars)
Cash and cash equivalents ......................................... $ 908 $ 607
Current portion of long-term debt ................................... $ 143 $62
Total debt ..................................................... $ 3,955 $3,980
Stockholders’ equity ............................................. $12,307 $9,774
Debt to capitalization ratio* ....................................... 24.3% 28.9%
* Total debt as a percentage of the sum of total debt plus stockholders’ equity.
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