UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 2, 2003
THE HOUSTON EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 001-11899 22-2674487
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1100 LOUISIANA, SUITE 2000 77002-5215
HOUSTON, TEXAS (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (713) 830-6800
EXPLANATORY NOTE
This Form 8-K/A amends the Form 8-K filed on June 3, 2003 (the "Original Form
8-K").
This Current Report on Form 8-K/A is being filed solely to correctly describe
the non-GAAP financial measure used. Otherwise, the financial information
contained in the Original Form 8-K remains unchanged. Item 5 of the Original
Form 8-K is hereby deleted in its entirety and replaced with the following
Item 5:
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
The following table shows selected historical financial data derived
from our audited, consolidated financial statements for each of the five years
in the period ended December 31, 2002.
YEARS ENDED DECEMBER 31,
------------------------------------------------------------
1998 1999 2000 2001 2002
-------- -------- -------- -------- --------
(IN THOUSANDS)
INCOME STATEMENT DATA:
Net income (loss) plus interest expense (net
of amounts capitalized), income taxes,
depreciation, depletion and amortization
(including the writedown in carrying value
of oil and gas properties, if any), asset
retirement obligation accretion and
cumulative effect of change in accounting
principle (for the interim period ended
March 31, 2003, only)(1) ......................... 100,995 123,727 228,343 327,302 288,594
Net income (loss) plus interest expense (net
of amounts capitalized), income taxes,
depreciation, depletion and amortization
(including the writedown in carrying value
of oil and gas properties, if any), asset
retirement obligation accretion and
cumulative effect of change in accounting
principle (for the interim period ended
March 31, 2003, only) to gross interest
expense(2) ....................................... 7.0x 4.9x 9.1x 21.8x 18.8x
Total indebtedness to Net income (loss) plus
interest expense (net of amounts
capitalized), income taxes, depreciation,
depletion and amortization (including the
writedown in carrying value of oil and gas
properties, if any), asset retirement
obligation accretion and cumulative effect
of change in accounting principle (for the
interim period ended March 31, 2003, only)(3) .... 3.1x 2.3x 1.1x 0.7x 0.9x
2
The following table shows selected historical financial data derived
from our unaudited, consolidated financial statements for the three months ended
March 31, 2002 and 2003.
THREE MONTHS ENDED
MARCH 31,
-------------------------
2002 2003
---------- ----------
(IN THOUSANDS)
INCOME STATEMENT DATA:
Net income (loss) plus interest expense (net of amounts capitalized),
income taxes, depreciation, depletion and amortization (including the
writedown in carrying value of oil and gas properties, if any), asset
retirement obligation accretion and cumulative effect of change in
accounting principle (for the interim period ended March 31, 2003,
only)(1) ............................................................... 60,195 117,254
Net income (loss) plus interest expense (net of amounts capitalized),
income taxes, depreciation, depletion and amortization (including the
writedown in carrying value of oil and gas properties, if any), asset
retirement obligation accretion and cumulative effect of change in
accounting principle (for the interim period ended March 31, 2003,
only) to gross interest expense (2) .................................... 16.8x 32.2x
----------
(1) Net income (loss) plus interest expense (net of amounts capitalized),
income taxes, depreciation, depletion and amortization (including the
writedown in carrying value of oil and gas properties, if any), asset
retirement obligation accretion and cumulative effect of change in
accounting principle (for the interim period ended March 31, 2003,
only) should not be considered as an alternative to income (loss) from
operations or net income (loss), as determined in accordance with
generally accepted accounting principles (GAAP) in the United States,
as a measure of our operating performance or to net cash provided by
operating, investing and financing activities, as determined in
accordance with GAAP, as a measure of our ability to meet cash needs.
Net income (loss) plus interest expense (net of amounts capitalized),
income taxes, depreciation, depletion and amortization (including the
writedown in carrying value of oil and gas properties, if any), asset
retirement obligation accretion and cumulative effect of change in
accounting principle (for the interim period ended March 31, 2003,
only) is a non-GAAP liquidity measure commonly used in our industry and
we believe that it is useful adjunct to net income under GAAP and is a
financial indicator of our ability to internally fund our exploration
and development activities and to service debt. Amounts presented may
not be comparable to similar measures disclosed by other companies.
(2) Gross interest is defined as the total amount of interest incurred on
our obligations, prior to any amounts capitalized.
(3) Total indebtedness is defined as total long-term debt and notes.
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Reconciliation of Net income (loss) plus interest expense (net of amounts
capitalized), income taxes, depreciation, depletion and amortization (including
the writedown in carrying value of oil and gas properties, if any), asset
retirement obligation accretion and cumulative effect of change in accounting
principle (for the interim period ended March 31, 2003, only) to Net Cash
Provided by Operating Activities:
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1998 1999 2000 2001 2002
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
Net income (loss) plus interest expense (net of
amounts capitalized), income taxes, depreciation,
depletion and amortization (including the writedown
in carrying value of oil and gas properties, if any),
asset retirement obligation accretion and cumulative
effect of change in accounting principle (for
the interim period ended March 31, 2003, only) .......... $ 100,995 $ 123,727 $ 228,343 $ 327,302 $ 288,594
Less: Interest expense, net ............................. 4,597 13,307 11,361 2,992 7,398
Current income tax provision (benefit) ............ (1,040) (961) (818) (840) (768)
Add back: Stock compensation expense .................... -- -- -- 64 85
Changes in operating assets and
liabilities ................................. 4,940 (1,309) (17,009) 32,818 (38,180)
---------- ---------- ---------- ---------- ----------
Net cash provided by operating activities ............... $ 102,378 $ 110,072 $ 200,791 $ 358,032 $ 243,869
========== ========== ========== ========== ==========
THREE MONTHS ENDED MARCH 31 2002 AND 2003
Reconciliation of Net income (loss) plus interest expense (net of amounts
capitalized), income taxes, depreciation, depletion and amortization (including
the writedown in carrying value of oil and gas properties, if any), asset
retirement obligation accretion and cumulative effect of change in accounting
principle (for the interim period ended March 31, 2003, only) to Net Cash
Provided by Operating Activities:
THREE MONTHS ENDED
MARCH 31,
--------------------------
2002 2003
---------- ----------
(IN THOUSANDS)
Net income (loss) plus interest expense (net of amounts capitalized),
income taxes, depreciation, depletion and amortization (including the
writedown in carrying value of oil and gas properties, if any), asset
retirement obligation accretion and cumulative effect of change in
accounting principle (for the interim period ended March 31, 2003,
only) .................................................................... $ 60,195 $ 117,254
Less: Interest expense, net ............................................. 1,410 2,266
Current income tax provision (benefit) ............................ (192) 58
Add back: Stock compensation expense ..................................... 21 35
Changes in operating assets and liabilities .................... (25,554) (51,984)
---------- ----------
Net cash provided by operating activities ................................ $ 33,444 $ 62,981
========== ==========
RECENT DEVELOPMENT
At March 31, 2003, $130 million in borrowings were outstanding under
our revolving credit facility and $15.5 million was outstanding in letter of
credit obligations. Subsequent to March 31, 2003, we repaid a net $55.0 million
under the facility and reduced our letter of credit obligations to $13.4
million. As of May 30, 2003, outstanding borrowings and letter of credit
obligations under our revolving credit facility totaled $88.4 million.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE HOUSTON EXPLORATION COMPANY
By: /s/ James F. Westmoreland
-------------------------------------------
James F. Westmoreland
Vice President and Chief Accounting Officer
Dated: December 4, 2003
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