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. 3 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. 4 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 5