JPMorgan - KASE

$35.0 million for 1999. On a per barrel basis, general and administrative expenses decreased from
$1.45 per barrel in 1999 to $0.99 per barrel in 2000.
Interest and Financing Costs
Interest and financing costs relate to the debt and accrued interest arising from our issuance of
the 11% senior unsecured notes due 2002 (Canadian Notes) and the 11 3 / 4 % notes due 2004 (U.S.
Notes). During 2000, we repaid $203.6 million to the noteholders and annual interest costs fell
from $23.9 million in 1999 compared to $18.7 million in 2000.
Depletion and Depreciation
Depletion and depreciation increased $9.7 million in 2000. The addition of HOP, the transfer of
assets to the category of developed producing and the increase in production led to the majority
of this increase with Downstream accounting for $7.0 million of the increase and the transfer of
assets to the depletable pool accounting for $3.1 million. On a per barrel basis for Upstream,
depletion and depreciation increased from $0.12 in 1999 to $0.25 in 2000.
Unusual Items
In 1999, we recorded a gain on sale of assets of $12.8 million, attributable to the divestiture of
certain Upstream assets. No waiver fees on debt restructuring costs were paid in 1999.
Income Before Income Taxes
As a result of the foregoing factors, we had income before income taxes of $264.6 million for the
year ended December 31, 2000, as compared to $26.2 million for the year ended December 31,
1999.
Income Taxes
The total income tax charges for each of the years ended December 31, 2000 and 1999 are set out
below.
2000 1999
($000’s)
Upstream .............................................................. 55,576 18,166
Downstream ........................................................... 40,371 —
Corporate ............................................................. 3,710 (495)
Total.................................................................. 99,657 17,671
In 2000, there was a charge of $3.0 million for a tax audit of Hurricane Overseas Services for
previous years, and current taxes paid by HOSI.
Net Income
As a result of the foregoing factors, we had net income for the year ended December 31, 2000 of
$154.9 million compared to net income of $8.5 million for the year ended December 31, 1999.
Liquidity and Capital Resources
The levels of our cash, current assets and current liabilities at the balance sheet dates for the last
three financial years and the nine month period ended September 30, 2002 are set out below.
September 30,
2002
December 31,
2001 2000 1999
($000’s)
Cash and short-term deposits ...................... 162,246 64,812 59,298 30,748
Totalcurrentassets(excludingcash)................ 171,308 105,318 71,292 20,834
Total current liabilities ........................... 164,792 108,737 96,782 227,978
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