Hess 2014 Annual Report Download - page 48

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33 33
Corporate, Interest and Other
The following table summarizes corporate, interest and other expenses:
2014 2013 2012
(In millions)
Corporate and Other expenses (excluding items affecting comparability) .......
.
$ 217 $ 263 $ 267
Interest expense ................................................................................................
.
399 466 447
Less: Capitalized interest ..................................................................................
.
(76 ) (60) (28)
Interest expense, net ........................................................................................
.
323 406 419
Corporate, Interest and Other expenses before income taxes ...........................
.
540 669 686
Income taxes (benefits) ...................................................................................
.
(208 ) (252) (264)
N
et Corporate, Interest and Other expenses after income taxes .......................
.
332 417 422
Items affecting comparability of earnings between periods, after-tax ............
.
74 26 —
Total Corporate, Interest and Other expenses after income taxes .....................
.
$ 406 $ 443 $ 422
Corporate expenses were lower in 2014 compared to 2013, reflecting lower employee related costs, contract labor and
professional fees. Corporate expenses were comparable in 2013 and 2012. After-tax corporate expenses in 2015 are
estimated to be in the range of $120 million to $130 million, compared with after-tax corporate expenses of $134 million,
excluding items affecting comparability of earnings between periods in 2014.
Interest expense, net was lower in 2014 compared to 2013, reflecting lower average outstanding debt, lower letter of credit
fees and higher capitalized interest. The decrease in 2013 interest expense, net compared with 2012 primarily reflects higher
capitalized interest related to the Tubular Bells and North Malay Basin projects. After-tax interest expense in 2015 is
expected to be in the range of $205 million to $215 million, compared with after-tax interest expenses of $202 million in
2014.
Items Affecting Comparability of Earnings Between Periods: Reported Corporate, interest and other expenses included
the following items affecting comparability of income (expense) before and after income taxes:
Before Income Taxes After Income Taxes
2014 2013 2012 2014 2013 2012
(In millions)
Write down of equity investment ........................... $ (84) $ —$ —$ (52)
$ —$ —
Employee severance ............................................... (19) (21) —
(12) (13) —
Facility and other exit costs ................................... (15) (19) —
(10) (13) —
$ (118) $ (40) $ — $ (74)
$ (26) $ —
The Corporation recorded a charge of $84 million ($52 million after income taxes) to reduce the carrying value of its
investment in the Bayonne Energy Center to fair value. The Corporation recorded net pre-tax severance charges related to
the Corporation’s transformation into a pure play E&P company of $19 million ($12 million after income taxes) in 2014 and
$21 million ($13 million after income taxes) in 2013. In addition, the Corporation recorded pre-tax charges of $15 million
($10 million after income taxes) in 2014 and pre-tax charges of $19 million ($13 million after income taxes) in 2013 for exit
related costs, including costs for cessation of leased office space in 2013.
Discontinued Operations
Discontinued operations attributable to Hess Corporation had income of $625 million in 2014, $1,192 million in 2013, and
$235 million in 2012 which comprised the Corporation’s retail, energy marketing, terminal, energy trading and refining
operations. Excluding items affecting comparability of earnings between periods provided below, discontinued operations
generated adjusted net income of $84 million in 2014, $117 million in 2013, and $164 million in 2012. Discontinued
operations results reflect ownership of its energy trading partnership through December 2014, retail marketing through
September 2014, terminals through December 2013, energy marketing through November 2013 and Port Reading refining
activities through the date it was permanently shut down in February 2013.