Hess 2008 Annual Report Download - page 45

Cash Flows
The following table sets forth a summary of the Corporation’s cash flows:
2008 2007 2006
(Millions of dollars)
Net cash provided by (used in):
Operating activities ..................................... $ 4,567 $ 3,507 $ 3,491
Investing activities ...................................... (4,444) (3,474) (3,289)
Financing activities ..................................... 178 191 (134)
Net increase in cash and cash equivalents ..................... $ 301 $ 224 $ 68
Operating Activities: Net cash provided by operating activities, including changes in operating assets and
liabilities, increased to $4,567 million in 2008 from $3,507 million in 2007, reflecting increased earnings.
Operating cash flow was comparable in 2007 and 2006. The Corporation received cash distributions from
HOVENSA of $50 million in 2008, $300 million in 2007 and $400 million in 2006.
Investing Activities: The following table summarizes the Corporation’s capital expenditures:
2008 2007 2006
(Millions of dollars)
Exploration and Production
Exploration ........................................... $ 744 $ 371 $ 590
Production and development .............................. 2,523 2,605 2,164
Acquisitions (including leaseholds) ......................... 984 462 921
4,251 3,438 3,675
Marketing, Refining and Corporate ........................... 187 140 169
Total .............................................. $4,438 $3,578 $3,844
Capital expenditures in 2008 include leasehold acquisitions in the United States of $600 million and
$210 million for the acquisition of the remaining 22.5% interest in the Corporation’s Gabonese subsidiary. In
2008, the Corporation also selectively expanded its energy marketing business by acquiring fuel oil, natural gas, and
electricity customer accounts, and a terminal and related assets, for an aggregate of approximately $100 million. In
2007, capital expenditures include the acquisition of a 28% interest in the Genghis Khan Field in the deepwater Gulf
of Mexico for $371 million. In 2006, capital expenditures included payments of $359 million to re-enter the
Corporation’s former oil and gas production operations in the Waha concessions in Libya and $413 million to
acquire a 55% working interest in the West Med Block in Egypt.
In 2007, the Corporation received proceeds of $93 million for the sale of its interests in the Scott and Telford
fields located in the United Kingdom. Proceeds from asset sales in 2006 totaled $444 million, including the sale of
the Corporation’s interests in certain producing properties in the Permian Basin and onshore U.S. Gulf Coast.
Financing Activities: During 2008, net repayments of debt were $32 million compared with net borrowings
of $208 million in 2007. In 2006, the Corporation reduced debt by $13 million.
Total common and preferred stock dividends paid were $130 million, $127 million and $161 million in 2008,
2007 and 2006, respectively. The Corporation received net proceeds from the exercise of stock options, including
related income tax benefits, of $340 million, $110 million and $40 million in 2008, 2007 and 2006, respectively.
Future Capital Requirements and Resources
The Corporation anticipates $3.2 billion in capital and exploratory expenditures in 2009, of which $3.1 billion
relates to Exploration and Production operations. Of the total E&P amount, $1.4 billion is for production and
$900 million is for developments, with the remainder for exploration. The anticipated 2009 capital program
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