{ "docId": "019dd923-622c-750b-8b9c-3c8a15220fd2", "docSlug": "348f49356270", "documentTitle": "Hess Corporation (HES)", "authorId": "02_Elliott_Management", "authorName": "Elliott Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2013-04-15 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 82, "pageCount": 161, "prevPage": 81, "nextPage": 83, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses a series of pull-quotes from various investment banks to establish a pattern of poor management judgment.", "elementsJson": [ "headline_text", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9c-3c8a15220fd2/82", "deckHref": "/decks/019dd923-622c-750b-8b9c-3c8a15220fd2", "deckJsonHref": "/decks/019dd923-622c-750b-8b9c-3c8a15220fd2.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9c-3c8a15220fd2#slide-82", "components": [ { "bbox": { "h": 0.08, "w": 0.7, "x": 0.15, "y": 0.12 }, "kind": "quote", "text": "The continued string of negative news has left management with some work to do to rebuild investor confidence.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "46a66d23-59d7-44da-9a33-8483cd848bf5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.7, "x": 0.15, "y": 0.51 }, "kind": "quote", "text": "While investors remain worried over the management's seemingly sloppy attitude to shareholders' equity...We are increasingly concerned over Hess's continuing ability to generate these 'non recurring' charges ...Carelessness with shareholders equity is a worrying trait in any corporation.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6b02d81c-544d-4c37-b911-173c7a8b8405", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.7, "x": 0.15, "y": 0.64 }, "kind": "quote", "text": "We believe even if the disposal program is completed the portfolio improvement is unlikely to be sufficient to result in returns in excess of Hess's cost of capital.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6c87acf5-d363-42a8-9e47-f4eb4159cd28", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.7, "x": 0.15, "y": 0.79 }, "kind": "quote", "text": "Hess's stock fell 12% today on the back of a downgrade to 2003 and 2004 production expectations and a further write-down of the LLOG properties. While neither of these things is devastating to the company's value, we believe that management credibility at Hess has been stretched very thin...This charge will be seen by investors as a continuation of a disturbing pattern of special charges at Hess...again calling into question the company's judgment.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9a705ec5-e02c-427f-8ee7-3680140679d6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.7, "x": 0.15, "y": 0.3 }, "kind": "quote", "text": "Credibility matters, and Hess has little of it left.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a53fe0b4-2baa-4467-ad39-dc31e3becc06", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.7, "x": 0.15, "y": 0.73 }, "kind": "quote", "text": "Production forecasts were revised lower supporting concerns that we have had regarding economic value creation...", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d6ea2c8b-fafe-4d75-8399-02ccaf2e1fbf", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.7, "x": 0.15, "y": 0.35 }, "kind": "quote", "text": "REITERATE UNDERPERFORM; E&P DETERIORATION A SERIOUS ISSUE There is no change to our Underperform rating for Hess despite the continued slide in its shares. We believe large write downs at its LLOG and Triton acquisitions coupled with continued erosion in its base E&P properties point to serious problems with the company's exploration and production business.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "eeb232ec-5de6-44f5-9db6-9e75d357d785", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.7, "x": 0.15, "y": 0.21 }, "kind": "quote", "text": "We believe Hess should trade at a 5%-10% discount to the Domestic Oils based on...[and 3] Damaged management credibility.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fb7b86d3-494b-40a1-b04b-d4283a0784ed", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"The continued string of negative news has left management with some work to do to rebuild investor confidence.\" — Bank of America Credit Research (January 31, 2003); \"We believe Hess should trade at a 5%-10% discount to the Domestic Oils based on...[and 3] Damaged management credibility.\" — JP Morgan (January 30, 2003); \"Credibility matters, and Hess has little of it left.\" — Credit Suisse (January 30, 2003); \"REITERATE UNDERPERFORM; E&P DETERIORATION A SERIOUS ISSUE There is no change to our Underperform rating for Hess despite the continued slide in its shares. We believe large write downs at its LLOG and Triton acquisitions coupled with continued erosion in its base E&P properties point to serious problems with the company's exploration and production business.\" — Goldman Sachs (January 30, 2003); \"...While investors remain worried over the management's seemingly sloppy attitude to shareholders...We are increasingly concerned over Hess's continuing ability to generate these 'non recurring' charges ...Carelessness with shareholders equity is a worrying trait in any corporation.\" — Credit Suisse (January 30, 2003); \"...We believe even if the disposal program is completed the portfolio improvement is unlikely to be sufficient to result in returns in excess of Hess's cost of capital.\" — UBS Warburg (November 5, 2002); \"...Production forecasts were revised lower supporting concerns that we have had regarding economic value creation...\" — Morgan Stanley (October 25, 2002); \"Hess's stock fell 12% today on the back of a downgrade to 2003 and 2004 production expectations and a further write-down of the LLOG properties. While neither of these things is devastating to the company's value, we believe that management credibility at Hess has been stretched very thin...This charge will be seen by investors as a continuation of a disturbing pattern of special charges at Hess...again calling into question the company's judgment...\" — Credit Suisse (October 24, 2002).", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-f5d2-7501-bd98-638691662f94", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.7, "x": 0.15, "y": 0.95 }, "kind": "source-note", "text": "Note: For all reports prior to May 2006, Amerada Hess or AHC, was changed name to Hess or HES", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c8de4369-0f47-4f50-9d5a-79006b91277c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.7, "x": 0.15, "y": 0.05 }, "kind": "title", "text": "...Back into the Early Part of the Last Decade", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cfd46f0e-6f9b-4010-ab9f-86fe41a886a7", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "authority-citation", "slug": null, "matchId": "a41fba8d-fe48-4903-aa48-32e5e26f647a", "evidence": "Uses analyst reports to build a case against management credibility.", "confidence": 0.9 } ], "arcBeats": [ { "to": 84, "from": 77, "beatId": "e0b1ade6-05ea-43bb-b076-9aa676d6ed58", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Cite Precedent", "beatSlug": null, "evidence": "The presentation cites historical precedent for acknowledging Hess's problems", "position": 2, "confidence": 0.9, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 84, "from": 76, "name": "The Reveal", "slug": "05-the-reveal", "bestFor": "Product launches, strategic pivots, unexpected findings", "matchId": "7c02518c-0b5e-4a3e-a160-1848e5662700", "evidence": "The presentation reveals the extent of Hess's problems and the need for change", "position": 1, "objective": "Reveal the extent of Hess's problems and the need for change", "structure": "Setup the Question -> Build Suspense -> The Big Reveal", "confidence": 0.8, "description": "Build mystery and anticipation, then deliver a surprising or powerful conclusion" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }