Hess 2011 Annual Report Download - page 56

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The Corporation’s future M&R earnings may be impacted by supply and demand factors, volatility in
margins, credit risks, the effects of weather, competitive industry conditions, political risk, environmental risk
and catastrophic risk. For a more comprehensive description of the risks that may affect the Corporation’s M&R
business, see Item 1A. Risk Factors Related to Our Business and Operations.
Corporate
The following table summarizes corporate expenses for the years ended December 31:
2011 2010 2009
(Millions of dollars)
Corporate expenses (excluding items affecting comparability) ......... $ 260 $ 256 $227
Incometaxes(benefits) ........................................ (106) (104) (82)
Netcorporateexpenses ...................................... 154 152 145
Items affecting comparability between periods, after-tax ............. —760
Totalcorporateexpenses,after-tax ............................. $154 $159 $205
Excluding items affecting comparability between periods, net corporate expenses were comparable in 2011
and 2010. The increase in net corporate expenses in 2010 compared with 2009 primarily reflects higher employee
and insurance costs and bank facility fees. After-tax corporate expenses in 2012 are estimated to be in the range
of $160 million to $170 million.
In 2010, the Corporation recorded a pre-tax charge of $11 million ($7 million after income taxes) related to
the repurchase of the remaining $116 million of fixed-rate public notes that were scheduled to mature in 2011. In
2009, the Corporation recorded pre-tax charges of $54 million ($34 million after income taxes) related to the
repurchase of $546 million in fixed-rate public notes that were scheduled to mature in 2011 and $42 million ($26
million after income taxes) relating to retirement benefits and employee severance costs. The pre-tax charges in
connection with the debt repurchases were recorded in Other, net, and the pre-tax amounts of the retirement
benefits and severance costs were recorded in General and administrative expenses in the Statement of
Consolidated Income.
Interest
Interest expense was as follows for the years ended December 31:
2011 2010 2009
(Millions of dollars)
Totalinterestincurred ..................................... $ 396 $ 366 $ 366
Capitalizedinterest ....................................... (13) (5) (6)
Interest expense before income taxes ....................... 383 361 360
Incometaxes(benefits) .................................... (149) (140) (136)
After-taxinterestexpense ................................ $ 234 $ 221 $ 224
The increase in interest expense in 2011 compared to 2010 primarily reflects higher average borrowings
following the issuance of $1.25 billion of 30-year fixed-rate public notes in August 2010. Capitalized interest
increased in 2011 due to the sanctioning of the Tubular Bells project. Interest expense was comparable in 2010
and 2009. After-tax interest expense in 2012 is expected to be in the range of $245 million to $255 million.
Consolidated Sales and Cost of Products Sold
Sales and other operating revenues totaled $38,466 million in 2011, $33,862 million in 2010 and
$29,614 million in 2009. The increase in Sales and other operating revenues of 14% year-on-year from 2009 to
2011 is primarily due to higher crude oil and refined petroleum product selling prices, partially offset by lower
crude oil and refined petroleum product sales volumes.
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