Kerr-McGee Reports First-Quarter Earnings

Apr 25, 2001, 01:00 ET from Kerr-McGee Corp.

    OKLAHOMA CITY, April 25 /PRNewswire/ -- Kerr-McGee Corp. (NYSE:   KMG)
 reports net income of $335 million ($3.21 per share - diluted) in the first
 quarter of 2001, compared with net income of $185 million ($1.94 per share) in
 the 2000 first quarter.  Excluding special items and the cumulative effect of
 a change in accounting principle, net income increased 41% to $253 million
 ($2.45 per share) in the first quarter, compared with $180 million ($1.89 per
 share) in the prior-year period.  After-tax foreign currency gains were
 approximately $3 million (3 cents per share) for the 2001 quarter versus
 $5 million (5 cents per share) in the 2000 quarter.
     "The continuation of strong oil and gas commodity prices this year has
 helped to further strengthen our financial position," said Luke R. Corbett,
 Kerr-McGee chairman and chief executive officer.  "Our net debt as a
 percentage of total capitalization has been reduced to 42% as of the end of
 the quarter.  We have also internally funded our capital expenditures during
 the quarter, which have increased primarily due to the Nansen and Boomvang
 developments in the Gulf of Mexico and the Leadon and Skene developments in
 the North Sea.  Based on our expectation of continued strength in the price of
 oil and gas this year, we are reviewing opportunities to increase our oil and
 gas expenditures this year from our original budget of $1 billion."
 
     Operating Profit
     First-quarter 2001 operating profit, excluding special items, was up
 36% to $449 million, compared with $330 million a year ago.  Exploration and
 production operating profit surged to $411 million, compared with $293 million
 in the 2000 quarter, based on significantly higher natural gas realizations,
 which averaged $6.58 per thousand cubic feet, partially offset by higher
 exploration costs, lower oil prices, and lower oil and gas sales volumes.
     Chemical operating profit was $38 million in the 2001 quarter, compared
 with $36 million in the 2000 quarter.  The increase resulted from the Savannah
 and Botlek titanium dioxide pigment facilities acquired in the second quarter
 of 2000, higher European pigment sales realizations, and improved results from
 the integrated titanium dioxide joint venture in Australia.  These were
 partially offset by higher fuel costs at the Hamilton pigment plant and lower
 forest products results.
 
     Nonoperating Expenses
     Net nonoperating expenses, excluding special items, totaled $41 million
 for the current-year period, compared with $48 million a year ago.  The
 decrease in the 2001 quarter is due primarily to a $10 million decrease in net
 interest expense as the company's debt levels are substantially lower than a
 year ago.  Nearly $1 billion of debt has been repaid since the first quarter
 of 2000.  Partially offsetting the decline in interest expense is a reduction
 in income from equity affiliates and lower foreign exchange gains.  Also
 included in first-quarter 2001 nonoperating items is $7 million of income
 associated with the change in values of derivatives and Devon stock.
 
     Accounting Change and Special Items
     The company adopted a new standard for derivative accounting effective
 Jan. 1, 2001, as required by the Financial Accounting Standards Board for all
 U.S. reporting companies.  This resulted in a cumulative effect of a change in
 accounting principle and a special item that together increased net income by
 $98 million.  The cumulative effect reduced net income by $20 million and was
 more than offset by an after-tax special gain of $118 million associated with
 the reclassification of 85% of the company's investment in Devon Energy
 Corporation common stock to "trading" from "available for sale."  In addition,
 the company also recorded an after-tax special charge of $16 million for the
 termination of manganese metal production at its Hamilton, Miss., electrolytic
 chemical facility.  The charge primarily related to plant and equipment
 write-offs and other closing costs, including severance.
 
     Crude Oil, Natural Gas Volumes and Prices
     Kerr-McGee's average daily oil production for the first quarter of 2001
 was 201,800 barrels, compared with 213,000 barrels a year ago.  Crude oil
 prices averaged $25.06 per barrel, a 5% decrease from the prior year's first
 quarter.
     Daily natural gas sales volumes were 512 million cubic feet per day,
 compared with 534 million cubic feet per day in the prior-year quarter.
 Natural gas sales prices averaged $6.58 per thousand cubic feet for the 2001
 quarter, an increase of $3.96 per thousand cubic feet from the 2000 first
 quarter.
 
     Sales and Capital Expenditures
     First-quarter sales were $1.1 billion, compared with $887 million in the
 prior-year quarter, a 19% increase.
     Capital expenditures, excluding acquisitions, were $372 million, compared
 with $67 million in the 2000 first quarter.
     Kerr-McGee is an Oklahoma City-based energy and chemical company with
 worldwide operations and $7.9 billion in assets.
 
     (Statements in this news release regarding the company or management's
 intentions, beliefs or expectations are "forward-looking statements" within
 the meaning of the Securities Litigation Reform Act.  Future results and
 developments discussed in these statements may be affected by numerous factors
 such as the accuracy of the assumptions that underlie the statements, the
 success of the oil and gas exploration and production program, drilling risks,
 the market value of Kerr-McGee's products, uncertainties in interpreting
 engineering data, demand for consumer products for which Kerr-McGee's
 businesses supply raw materials, general economic conditions, and other
 factors and risks discussed in the company's SEC filings.  Actual results and
 developments may differ materially from those expressed or implied in this
 news release.)
 
 
                     KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                       (Unaudited)
 
                                                         Three Months Ended
          (Millions of dollars, except                        March 31,
           per-share amounts)                          2001            2000 (*)
 
           Consolidated Statement of Income
           Sales                                    $1,057.5            $886.5
           Costs and Expenses -
               Costs and operating expenses            307.2             266.4
               General and administrative expenses      84.7              71.5
               Depreciation and depletion              177.3             170.6
               Exploration, including dry
                holes and amortization of
                undeveloped leases                      50.2              44.0
               Taxes, other than income taxes           33.0              30.2
               Interest and debt expense                44.4              57.2
                   Total Costs and Expenses            696.8             639.9
                                                       360.7             246.6
           Other Income                                204.1              28.6
           Income before Income Taxes                  564.8             275.2
           Taxes on Income                            (209.8)            (90.0)
           Income before Change in
            Accounting Principle                       355.0             185.2
           Cumulative Effect of Change in
            Accounting Principle, net of taxes         (20.3)              ---
           Net Income                                 $334.7            $185.2
 
           Net Income per Common Share -
               Basic -
                  Income before accounting change
                   excluding special items             $2.68             $1.98
                  Income before accounting change       3.75              2.04
                  Accounting change                    (0.21)              ---
                  Net income                            3.54              2.04
               Diluted -
                  Income before accounting change
                   excluding special items              2.45              1.89
                  Income before accounting change       3.40              1.94
                  Accounting change                    (0.19)              ---
                  Net income                           $3.21             $1.94
 
           Thousands of Common Shares Outstanding -
               End of period                          94,773            94,136
               Average                                94,665            90,739
               Average - including dilution          106,506            98,088
 
           Foreign Currency Gains before Taxes          $2.7              $4.8
 
           Selected Balance Sheet Information
           Cash                                        235.9             724.9
           Current Assets                            1,374.9           1,637.4
           Total Assets                              7,881.9           7,194.6
           Current Liabilities                       1,486.8             979.1
           Total Debt                                2,218.2           3,142.1
           Stockholders' Equity                      2,767.8           2,053.1
 
           Selected Cash Flow Information
           Cash Provided by Operating Activities       543.0             246.6
           Depreciation, Depletion and
            Amortization                               191.0             184.3
           Dividends Paid                               42.5              38.9
           Capital Expenditures (including
            dry hole expense) -
               Exploration and production              360.7              68.8
               Chemicals - Pigment                      27.7              10.6
               Chemicals - Other                         2.6               2.3
                                                       391.0              81.7
               All other                                 1.1               2.5
                   Total                              $392.1             $84.2
 
           (*) Certain prior year amounts have been restated to conform with
               the current year's presentation.
 
 
                     KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                       (Unaudited)
 
                                                         Three Months Ended
                                                              March 31,
           (Millions of dollars)                       2001            2000 (*)
           Segment Information Excluding Special Items
           Sales
               Exploration and production             $762.2           $641.0
               Chemicals - Pigment                     248.2            191.2
               Chemicals - Other                        47.1             54.3
                   Total                            $1,057.5           $886.5
 
           Operating Profit
               Exploration and production -
                  Domestic                            $325.7           $156.3
                  North Sea                            121.3            168.9
                  Other International                   14.2             12.0
                     Total Production Operations       461.2            337.2
                  Exploration Expense                  (50.2)           (44.0)
                                                       411.0            293.2
               Chemicals -
                  Pigment                               36.4             32.3
                  Other                                  1.8              4.0
                                                        38.2             36.3
                     Total                             449.2            329.5
           Net Interest Expense                        (37.4)           (47.1)
           Income from Equity Affiliates                 1.6              5.6
           Other Expense                                (5.1)            (6.2)
           Taxes on Income                            (155.0)          (101.8)
           Income before Special Items and
            Change in Accounting Principle             253.3            180.0
           Special Items, net of taxes                 101.7              5.2
           Cumulative Effect of Change in
            Accounting Principle, net of taxes         (20.3)             ---
           Net Income                                 $334.7           $185.2
 
           Net Operating Profit
               Exploration and production             $256.0           $187.7
               Chemicals - Pigment                      23.7             19.4
               Chemicals - Other                         1.1              2.6
                   Total                               280.8            209.7
           Net Interest Expense                        (23.1)           (31.7)
           Income from Equity Affiliates                 1.0              3.7
           Other Expense                                (5.4)            (1.7)
           Special Items, net of taxes                 101.7              5.2
           Cumulative Effect of Change in
            Accounting Principle, net of taxes         (20.3)             ---
           Net Income                                 $334.7           $185.2
 
           Selected Exploration and Production Information
           Depreciation and depletion                 $136.5           $151.1
           Dry hole expense                             20.3             17.1
           Production costs -
               Lease operating expense                  92.9             86.9
               Abandonment                               9.6              9.6
               Production taxes                         21.8             23.2
                   Total                              $124.3           $119.7
 
           Special Items, Net of Income Taxes
           Unrealized gain on stock
            reclassified to trading securities        $117.9             $---
           Closure of Hamilton manganese plant         (16.2)             ---
           Other                                         ---              5.2
                   Total                              $101.7             $5.2
 
           (*) Certain prior year amounts have been restated to conform with
               the current year's presentation.
 
 
                     KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                       (Unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                      2001             2000 (*)
 
           Crude oil & condensate production
            (thousands of bbls/day)
                 Domestic -
                    Offshore                           56.3              57.6
                    Onshore                            19.7              17.6
                 North Sea                            109.3             124.0
                 Other International                   16.5              13.8
                    Total                             201.8             213.0
 
           Average price of crude oil sold (per bbl)
                 Domestic -
                    Offshore                         $25.03            $25.78
                    Onshore                           27.57             27.71
                 North Sea                            24.91             26.47
                 Other International                  23.18             24.22
                 Average                             $25.06            $26.25
 
           Natural gas sold (MMCF/day)
                 Domestic -
                    Offshore                            281               294
                    Onshore                             163               169
                 North Sea                               68                71
                    Total                               512               534
 
           Average price of natural gas sold (per MCF)
                 Domestic -
                    Offshore                          $7.07             $2.62
                    Onshore                            7.12              2.84
                 North Sea                             3.22              2.09
                 Average                              $6.58             $2.62
 
           Gross worldwide titanium
            dioxide pigment production
            (thousands of metric tonnes)                132                89
 
           (*) Certain prior year amounts have been restated to conform with
               the current year's presentation.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X06487602
 
 

SOURCE Kerr-McGee Corp.
    OKLAHOMA CITY, April 25 /PRNewswire/ -- Kerr-McGee Corp. (NYSE:   KMG)
 reports net income of $335 million ($3.21 per share - diluted) in the first
 quarter of 2001, compared with net income of $185 million ($1.94 per share) in
 the 2000 first quarter.  Excluding special items and the cumulative effect of
 a change in accounting principle, net income increased 41% to $253 million
 ($2.45 per share) in the first quarter, compared with $180 million ($1.89 per
 share) in the prior-year period.  After-tax foreign currency gains were
 approximately $3 million (3 cents per share) for the 2001 quarter versus
 $5 million (5 cents per share) in the 2000 quarter.
     "The continuation of strong oil and gas commodity prices this year has
 helped to further strengthen our financial position," said Luke R. Corbett,
 Kerr-McGee chairman and chief executive officer.  "Our net debt as a
 percentage of total capitalization has been reduced to 42% as of the end of
 the quarter.  We have also internally funded our capital expenditures during
 the quarter, which have increased primarily due to the Nansen and Boomvang
 developments in the Gulf of Mexico and the Leadon and Skene developments in
 the North Sea.  Based on our expectation of continued strength in the price of
 oil and gas this year, we are reviewing opportunities to increase our oil and
 gas expenditures this year from our original budget of $1 billion."
 
     Operating Profit
     First-quarter 2001 operating profit, excluding special items, was up
 36% to $449 million, compared with $330 million a year ago.  Exploration and
 production operating profit surged to $411 million, compared with $293 million
 in the 2000 quarter, based on significantly higher natural gas realizations,
 which averaged $6.58 per thousand cubic feet, partially offset by higher
 exploration costs, lower oil prices, and lower oil and gas sales volumes.
     Chemical operating profit was $38 million in the 2001 quarter, compared
 with $36 million in the 2000 quarter.  The increase resulted from the Savannah
 and Botlek titanium dioxide pigment facilities acquired in the second quarter
 of 2000, higher European pigment sales realizations, and improved results from
 the integrated titanium dioxide joint venture in Australia.  These were
 partially offset by higher fuel costs at the Hamilton pigment plant and lower
 forest products results.
 
     Nonoperating Expenses
     Net nonoperating expenses, excluding special items, totaled $41 million
 for the current-year period, compared with $48 million a year ago.  The
 decrease in the 2001 quarter is due primarily to a $10 million decrease in net
 interest expense as the company's debt levels are substantially lower than a
 year ago.  Nearly $1 billion of debt has been repaid since the first quarter
 of 2000.  Partially offsetting the decline in interest expense is a reduction
 in income from equity affiliates and lower foreign exchange gains.  Also
 included in first-quarter 2001 nonoperating items is $7 million of income
 associated with the change in values of derivatives and Devon stock.
 
     Accounting Change and Special Items
     The company adopted a new standard for derivative accounting effective
 Jan. 1, 2001, as required by the Financial Accounting Standards Board for all
 U.S. reporting companies.  This resulted in a cumulative effect of a change in
 accounting principle and a special item that together increased net income by
 $98 million.  The cumulative effect reduced net income by $20 million and was
 more than offset by an after-tax special gain of $118 million associated with
 the reclassification of 85% of the company's investment in Devon Energy
 Corporation common stock to "trading" from "available for sale."  In addition,
 the company also recorded an after-tax special charge of $16 million for the
 termination of manganese metal production at its Hamilton, Miss., electrolytic
 chemical facility.  The charge primarily related to plant and equipment
 write-offs and other closing costs, including severance.
 
     Crude Oil, Natural Gas Volumes and Prices
     Kerr-McGee's average daily oil production for the first quarter of 2001
 was 201,800 barrels, compared with 213,000 barrels a year ago.  Crude oil
 prices averaged $25.06 per barrel, a 5% decrease from the prior year's first
 quarter.
     Daily natural gas sales volumes were 512 million cubic feet per day,
 compared with 534 million cubic feet per day in the prior-year quarter.
 Natural gas sales prices averaged $6.58 per thousand cubic feet for the 2001
 quarter, an increase of $3.96 per thousand cubic feet from the 2000 first
 quarter.
 
     Sales and Capital Expenditures
     First-quarter sales were $1.1 billion, compared with $887 million in the
 prior-year quarter, a 19% increase.
     Capital expenditures, excluding acquisitions, were $372 million, compared
 with $67 million in the 2000 first quarter.
     Kerr-McGee is an Oklahoma City-based energy and chemical company with
 worldwide operations and $7.9 billion in assets.
 
     (Statements in this news release regarding the company or management's
 intentions, beliefs or expectations are "forward-looking statements" within
 the meaning of the Securities Litigation Reform Act.  Future results and
 developments discussed in these statements may be affected by numerous factors
 such as the accuracy of the assumptions that underlie the statements, the
 success of the oil and gas exploration and production program, drilling risks,
 the market value of Kerr-McGee's products, uncertainties in interpreting
 engineering data, demand for consumer products for which Kerr-McGee's
 businesses supply raw materials, general economic conditions, and other
 factors and risks discussed in the company's SEC filings.  Actual results and
 developments may differ materially from those expressed or implied in this
 news release.)
 
 
                     KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                       (Unaudited)
 
                                                         Three Months Ended
          (Millions of dollars, except                        March 31,
           per-share amounts)                          2001            2000 (*)
 
           Consolidated Statement of Income
           Sales                                    $1,057.5            $886.5
           Costs and Expenses -
               Costs and operating expenses            307.2             266.4
               General and administrative expenses      84.7              71.5
               Depreciation and depletion              177.3             170.6
               Exploration, including dry
                holes and amortization of
                undeveloped leases                      50.2              44.0
               Taxes, other than income taxes           33.0              30.2
               Interest and debt expense                44.4              57.2
                   Total Costs and Expenses            696.8             639.9
                                                       360.7             246.6
           Other Income                                204.1              28.6
           Income before Income Taxes                  564.8             275.2
           Taxes on Income                            (209.8)            (90.0)
           Income before Change in
            Accounting Principle                       355.0             185.2
           Cumulative Effect of Change in
            Accounting Principle, net of taxes         (20.3)              ---
           Net Income                                 $334.7            $185.2
 
           Net Income per Common Share -
               Basic -
                  Income before accounting change
                   excluding special items             $2.68             $1.98
                  Income before accounting change       3.75              2.04
                  Accounting change                    (0.21)              ---
                  Net income                            3.54              2.04
               Diluted -
                  Income before accounting change
                   excluding special items              2.45              1.89
                  Income before accounting change       3.40              1.94
                  Accounting change                    (0.19)              ---
                  Net income                           $3.21             $1.94
 
           Thousands of Common Shares Outstanding -
               End of period                          94,773            94,136
               Average                                94,665            90,739
               Average - including dilution          106,506            98,088
 
           Foreign Currency Gains before Taxes          $2.7              $4.8
 
           Selected Balance Sheet Information
           Cash                                        235.9             724.9
           Current Assets                            1,374.9           1,637.4
           Total Assets                              7,881.9           7,194.6
           Current Liabilities                       1,486.8             979.1
           Total Debt                                2,218.2           3,142.1
           Stockholders' Equity                      2,767.8           2,053.1
 
           Selected Cash Flow Information
           Cash Provided by Operating Activities       543.0             246.6
           Depreciation, Depletion and
            Amortization                               191.0             184.3
           Dividends Paid                               42.5              38.9
           Capital Expenditures (including
            dry hole expense) -
               Exploration and production              360.7              68.8
               Chemicals - Pigment                      27.7              10.6
               Chemicals - Other                         2.6               2.3
                                                       391.0              81.7
               All other                                 1.1               2.5
                   Total                              $392.1             $84.2
 
           (*) Certain prior year amounts have been restated to conform with
               the current year's presentation.
 
 
                     KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                       (Unaudited)
 
                                                         Three Months Ended
                                                              March 31,
           (Millions of dollars)                       2001            2000 (*)
           Segment Information Excluding Special Items
           Sales
               Exploration and production             $762.2           $641.0
               Chemicals - Pigment                     248.2            191.2
               Chemicals - Other                        47.1             54.3
                   Total                            $1,057.5           $886.5
 
           Operating Profit
               Exploration and production -
                  Domestic                            $325.7           $156.3
                  North Sea                            121.3            168.9
                  Other International                   14.2             12.0
                     Total Production Operations       461.2            337.2
                  Exploration Expense                  (50.2)           (44.0)
                                                       411.0            293.2
               Chemicals -
                  Pigment                               36.4             32.3
                  Other                                  1.8              4.0
                                                        38.2             36.3
                     Total                             449.2            329.5
           Net Interest Expense                        (37.4)           (47.1)
           Income from Equity Affiliates                 1.6              5.6
           Other Expense                                (5.1)            (6.2)
           Taxes on Income                            (155.0)          (101.8)
           Income before Special Items and
            Change in Accounting Principle             253.3            180.0
           Special Items, net of taxes                 101.7              5.2
           Cumulative Effect of Change in
            Accounting Principle, net of taxes         (20.3)             ---
           Net Income                                 $334.7           $185.2
 
           Net Operating Profit
               Exploration and production             $256.0           $187.7
               Chemicals - Pigment                      23.7             19.4
               Chemicals - Other                         1.1              2.6
                   Total                               280.8            209.7
           Net Interest Expense                        (23.1)           (31.7)
           Income from Equity Affiliates                 1.0              3.7
           Other Expense                                (5.4)            (1.7)
           Special Items, net of taxes                 101.7              5.2
           Cumulative Effect of Change in
            Accounting Principle, net of taxes         (20.3)             ---
           Net Income                                 $334.7           $185.2
 
           Selected Exploration and Production Information
           Depreciation and depletion                 $136.5           $151.1
           Dry hole expense                             20.3             17.1
           Production costs -
               Lease operating expense                  92.9             86.9
               Abandonment                               9.6              9.6
               Production taxes                         21.8             23.2
                   Total                              $124.3           $119.7
 
           Special Items, Net of Income Taxes
           Unrealized gain on stock
            reclassified to trading securities        $117.9             $---
           Closure of Hamilton manganese plant         (16.2)             ---
           Other                                         ---              5.2
                   Total                              $101.7             $5.2
 
           (*) Certain prior year amounts have been restated to conform with
               the current year's presentation.
 
 
                     KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
                                       (Unaudited)
 
                                                        Three Months Ended
                                                             March 31,
                                                      2001             2000 (*)
 
           Crude oil & condensate production
            (thousands of bbls/day)
                 Domestic -
                    Offshore                           56.3              57.6
                    Onshore                            19.7              17.6
                 North Sea                            109.3             124.0
                 Other International                   16.5              13.8
                    Total                             201.8             213.0
 
           Average price of crude oil sold (per bbl)
                 Domestic -
                    Offshore                         $25.03            $25.78
                    Onshore                           27.57             27.71
                 North Sea                            24.91             26.47
                 Other International                  23.18             24.22
                 Average                             $25.06            $26.25
 
           Natural gas sold (MMCF/day)
                 Domestic -
                    Offshore                            281               294
                    Onshore                             163               169
                 North Sea                               68                71
                    Total                               512               534
 
           Average price of natural gas sold (per MCF)
                 Domestic -
                    Offshore                          $7.07             $2.62
                    Onshore                            7.12              2.84
                 North Sea                             3.22              2.09
                 Average                              $6.58             $2.62
 
           Gross worldwide titanium
            dioxide pigment production
            (thousands of metric tonnes)                132                89
 
           (*) Certain prior year amounts have been restated to conform with
               the current year's presentation.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X06487602
 
 SOURCE  Kerr-McGee Corp.