Hess 2014 Annual Report Download - page 81

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66
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
66
At December 31, 2014, the Corporation’s fixed rate public notes have a principal amount of $5,650 million ($5,625 million net of
unamortized discount). Interest rates on the outstanding fixed rate public notes have a weighted average rate of 6.4%.
The aggregate long-term debt maturing during the next five years is as follows (in millions): 2015—$68; 2016—$71; 2017—$373;
2018—$78 and 2019—$1,070.
The Corporation’s long-term debt agreements, including the revolving credit facility, contain financial covenants that restrict the
amount of total borrowings and secured debt. The most restrictive of these covenants allow the Corporation to borrow up to an
additional $5.6 billion of secured debt at December 31, 2014.
Outstanding letters of credit at December 31 were as follows:
2014 2013
(In millions)
Committed lines* .............................................................................................................................................. $ 25 $ 274
Uncommitted lines* .......................................................................................................................................... 372 136
Total ............................................................................................................................................................. $ 397 $ 410
* Committed and uncommitted lines have expiration dates through 2016.
Of the $397 million of letters of credit outstanding at December 31, 2014, $54 million relates to contingent liabilities and the
remaining $343 million relates to liabilities recorded in the Consolidated Balance Sheet.
The total amount of interest paid (net of amounts capitalized) was $326 million, $408 million and $419 million in 2014, 2013 and
2012, respectively. The Corporation capitalized interest of $76 million, $60 million and $28 million in 2014, 2013 and 2012,
respectively.
11. Share-based Compensation
The Corporation granted restricted common shares, performance share units (PSUs) and stock options to employees under its 2008
Long-term Incentive Plan (LTIP), as amended. Outstanding restricted stock and PSUs generally vest three years from the date of
grant. Outstanding stock options vest over three years from the date of grant and have a 10-year term and an exercise price equal to
the market price on the date of grant.
The number of shares of common stock to be issued under the PSU agreement is based on a comparison of the Corporation’s total
shareholder return (TSR) to the TSR of a predetermined group of peer companies over a three-year performance period ending
December 31 of the year prior to settlement of the grant. Payouts of the performance share awards will range from 0% to 200% of the
target awards based on the Corporation’s TSR ranking within the peer group. Dividend equivalents for the performance period will
accrue on performance shares, but will only be paid out on earned shares after the performance period.
Share-based compensation expense consisted of the following:
Before Income Taxes After Income Taxes
2014 2013 2012 2014 2013 2012
(In millions)
Restricted stock ........................................................... $ 62 $ 31 $ 57 $ 39 $ 19 $ 35
Stock options............................................................... 2 13 34 1 8 21
Performance share units .............................................. 19 10 8 12 6 5
Total* ................................................................ $ 83 $ 54 $ 99 $ 52 $ 33 $ 61
* Includes pre-tax share-based compensation expense included in Income from continuing operations of approximately $87 million, $60 million and $83 million for
2014, 2013 and 2012, respectively.
The Corporation reversed share-based compensation expenses totaling $33 million ($25 million for restricted stock, $7 million for
PSUs and $1 million for stock options) in 2013 for grants that were not expected to vest as a result of the Corporation’s transformation
to a pure play E&P company.
Based on share-based compensation awards outstanding at December 31, 2014, unearned compensation expense, before income
taxes, will be recognized in future years as follows (in millions): 2015—$66, 2016—$39 and 2017—$7.