Hess 2002 Annual Report Download - page 38

During 2002, the Corporation refinanced existing debt by the issuance
of $600 million of public debentures bearing interest at 7.125%, due
in 2033.At December 31, 2002, the Corporation’s public fixed rate
debentures have a face value of $4,255 million ($4,237 million net
of unamortized discount). Borrowings are due commencing in 2004
and extend through 2033. Interest rates on the debentures range
from 5.3% to 7.9% and have a weighted average rate of 6.9%.
In connection with the sale of the Corporation’s interest in the
Trans Alaska Pipeline in January 2003, $20 million of Marine
Terminal Revenue Bonds have been assumed by the purchaser.
The Corporation has a $1.5 billion revolving credit agreement,
which was unutilized at December 31 and expires in January 2006.
Borrowings under the facility bear interest at .725% above the
London Interbank Offered Rate. A facility fee of .15% per annum is
currently payable on the amount of the credit line. The interest rate
and facility fee would be increased if the Corporation’s public debt
rating is lowered.
In 2002, 2001 and 2000, the Corporation capitalized interest
of $101 million, $44 million and $3 million, respectively, on major
development projects. The total amount of interest paid (net of
amounts capitalized), principally on short-term and long-term debt,
in 2002, 2001 and 2000 was $274 million, $121 million and
$168 million, respectively.
9. Stock Based Compensation Plans
The Corporation has outstanding stock options and nonvested
common stock under its Amended and Restated 1995 Long-Term
Incentive Plan. Generally, stock options vest one year from the date
of grant and the exercise price equals or exceeds the market price
on the date of grant. Nonvested common stock vests five years from
the date of grant.
8. Long-Term Debt
Long-term debt at December 31 consists of the following:
Millions of dollars 2002 2001
Fixed rate debentures,
weighted average rate 6.9%,
due through 2033 $4,237 $3,986
6.1% Marine Terminal Revenue
Bonds
— Series 1994 —
City of Valdez, Alaska,
due 2024 20 20
Pollution Control Revenue Bonds,
weighted average rate 5.9%,
due through 2032 53 53
Fixed rate notes, payable principally
to insurance companies,
weighted average rate 8.4%,
due through 2014 450 645
Revolving Credit Facility with banks
— 32
Commercial paper — 539
Project lease financing, weighted
average rate 5.1%, due
through 2014 169 174
Notes payable for asset purchases
— 98
Capitalized lease obligations,
weighted average rate 6.5%,
due through 2009 56 7
Other loans, weighted average rate
9.2%, due through 2019 55
4,990 5,559
Less amount included in
current maturities 14 276
Total $4,976 $5,283
The aggregate long-term debt maturing during the next five years is
as follows (in millions): 2003
— $14 (included in current liabilities);
2004 — $465; 2005 — $158; 2006 — $536 and 2007 — $290.
The Corporation’s long-term debt agreements contain restrictions
on the amount of total borrowings and cash dividends allowed.
At December 31, 2002, the Corporation is permitted to borrow
an additional $1.9 billion for the construction or acquisition
of assets.At year-end, the amount that can be borrowed for the
payment of dividends is $720 million.
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