Strategically advantaged to deliver more
resilient and increased cash flow
Southwestern Energy Company (NYSE: SWN) today announced
financial and operating results for the first quarter ended March
31, 2022.
- Generated $972 million net cash provided by operating
activities, $861 million net cash flow (non-GAAP) and $317 million
free cash flow (non-GAAP)
- Reduced debt by $508 million, consistent with disciplined
capital allocation framework, utilizing free cash flow and seasonal
working capital changes
- Reported total production of 425 Bcfe, or 4.7 Bcfe per day,
including 4.2 Bcf per day of gas and 91 MBbls per day of
liquids
- Operational performance on track; invested $544 million of
capital consistent with front-end loaded plan to bring 32 wells to
sales during the quarter
- Completed responsibly sourced gas well certifications of all
Appalachia production; Haynesville certifications expected to be
complete by year-end; progressing continuous monitoring project
across the portfolio
- In April, announced Amended and Restated Credit Agreement;
becomes unsecured upon receipt of an investment grade rating,
maturity extended to 2027 and borrowing base increased to $3.5
billion while retaining elected commitments of $2.0 billion
“Southwestern Energy delivered another strong quarter following
the timely and successful integration of our Haynesville assets,
highlighting the strength of the Company’s strategically positioned
business. Our amended and restated credit agreement is evidence of
our progress to achieving investment grade. We believe our
increasing and more resilient free cash flow generation capability
coupled with our improved business and financial risk profile has
created real value for our shareholders,” said Bill Way,
Southwestern Energy President and Chief Executive Officer.
“Recent global events underscore the importance of energy
security and highlight the vital role of US natural gas, both
domestically and globally. Today, SWN is differentially positioned
to help meet the growing global demand for US natural gas as the
second largest natural gas-focused producer in the US, already
delivering 1.5 Bcf per day directly to LNG. Our strategically
advantaged transportation portfolio enables the Company to reach
diversified premium markets, including the capability of delivering
approximately 65% of natural gas production to the LNG corridor and
Gulf Coast. This marketing advantage is complemented by our deep
Tier 1 inventory, strong and improving financial and credit
profile, and an enterprise-wide commitment to RSG,” continued
Way.
Financial Results
For the three months ended
March 31,
(in millions)
2022
2021
Net income (loss)
$
(2,675
)
$
80
Adjusted net income (non-GAAP)
$
447
$
196
Diluted earnings (loss) per share
$
(2.40
)
$
0.12
Adjusted diluted earnings per share
(non-GAAP)
$
0.40
$
0.29
Adjusted EBITDA (non-GAAP)
$
905
$
382
Net cash provided by operating
activities
$
972
$
347
Net cash flow (non-GAAP)
$
861
$
354
Total capital investments (1)
$
544
$
266
Free cash flow (non-GAAP)
$
317
$
88
(1)
Capital investments include increases of
$43 million and $38 million for the three months ended March 31,
2022 and 2021, respectively, relating to the change in capital
accruals between periods.
For the quarter ended March 31, 2022, Southwestern Energy
recorded a net loss of $2.7 billion, or ($2.40) per diluted share,
primarily due to the mark-to-market of unsettled derivatives.
Excluding this and other one-time items, adjusted net income
(non-GAAP) was $447 million, or $0.40 per diluted share, and
Adjusted EBITDA (non-GAAP) was $905 million. Net cash provided by
operating activities was $972 million, net cash flow (non-GAAP) was
$861 million and free cash flow (non-GAAP) was $317 million.
The Company utilized free cash flow generated in the first
quarter of 2022 for debt reduction. In January, the Company retired
the remaining $201 million of senior notes due March 2022. As of
March 31, 2022, Southwestern Energy had total debt of $4.9 billion
and net debt to adjusted EBITDA (non-GAAP) of 1.7x. At the end of
the quarter, the Company had access to $1.7 billion of liquidity,
with $174 million of borrowings under its revolving credit facility
and $147 million in outstanding letters of credit. In January 2022,
the Company received an upgrade to its long-term debt issuer rating
from S&P to BB+, placing the Company one notch below investment
grade credit rating.
In April 2022, the Company announced an Amended and Restated
Credit Agreement that extended the maturity date of its existing
credit facility by three years to April 2027 with an aggregate
maximum revolving credit amount and borrowing base of $3.5 billion,
and no change to elected commitments of $2.0 billion. The Agreement
provides for the release of subsidiary guarantors and collateral,
as well as other terms consistent with standard “fall away”
provisions, upon receipt of an investment grade rating from either
S&P or Moody’s and the satisfaction of certain other
conditions. Furthermore, upon receipt of two investment grade
ratings from S&P, Moody’s or Fitch, the Agreement provides for
terms consistent with investment grade peers, including the
replacement of all financial covenants with a debt to
capitalization financial covenant. Returning to investment grade
remains a key financial objective for the Company, aligned with its
strategic priorities.
As indicated in the table below, first quarter 2022 weighted
average realized price, including $0.25 per Mcfe of transportation
expenses, was $4.88 per Mcfe excluding the impact of derivatives.
Including derivatives, weighted average realized price (including
transportation) for the first quarter was up 28% from $2.54 per
Mcfe in 2021 to $3.24 per Mcfe in 2022 primarily due to higher
commodity prices including an 84% increase in NYMEX Henry Hub and a
63% increase in WTI. First quarter 2022 weighted average realized
price before transportation expense and excluding the impact of
derivatives was $5.13 per Mcfe.
Realized Prices
For the three months ended
(includes transportation costs)
March 31,
2022
2021
Natural Gas Price:
NYMEX Henry Hub price ($/MMBtu) (1)
$
4.95
$
2.69
Discount to NYMEX (2)
(0.45
)
(0.58
)
Average realized gas price per Mcf,
excluding derivatives
$
4.50
$
2.11
Gain on settled financial basis
derivatives ($/Mcf)
0.01
0.19
Gain (loss) on settled commodity
derivatives ($/Mcf)
(1.51
)
0.03
Average realized gas price, including
derivatives ($/Mcf)
$
3.00
$
2.33
Oil Price:
WTI oil price ($/Bbl) (3)
$
94.29
$
57.84
Discount to WTI (4)
(7.99
)
(9.70
)
Average realized oil price, excluding
derivatives ($/Bbl)
$
86.30
$
48.14
Average realized oil price, including
derivatives ($/Bbl)
$
50.29
$
36.97
NGL Price:
Average realized NGL price, excluding
derivatives ($/Bbl)
$
39.33
$
22.86
Average realized NGL price, including
derivatives ($/Bbl)
$
27.08
$
16.11
Percentage of WTI, excluding
derivatives
42
%
40
%
Total Weighted Average Realized
Price:
Excluding derivatives ($/Mcfe)
$
4.88
$
2.62
Including derivatives ($/Mcfe)
$
3.24
$
2.54
(1)
Based on last day settlement prices from
monthly futures contracts.
(2)
This discount includes a basis
differential, a heating content adjustment, physical basis sales,
third-party transportation charges and fuel charges, and excludes
financial basis derivatives.
(3)
Based on the average daily settlement
price of the nearby month futures contract over the period.
(4)
This discount primarily includes location
and quality adjustments.
Operational Results
Total net production for the quarter ended March 31, 2022 was
425 Bcfe, of which 88% was natural gas, 10% NGLs and 2% oil.
Capital investments totaled $544 million for the first quarter of
2022, consistent with the Company’s front-end loaded capital
program, with 33 wells drilled, 37 wells completed and 32 wells
placed to sales.
For the three months ended
March 31,
2022
2021
Production
Natural gas production (Bcf)
376
214
Oil production (MBbls)
1,270
1,662
NGL production (MBbls)
6,919
7,578
Total production (Bcfe)
425
269
Average unit costs per Mcfe
Lease operating expenses (1)
$
0.94
$
0.93
General & administrative expenses
(2,3)
$
0.09
$
0.13
Taxes, other than income taxes
$
0.13
$
0.09
Full cost pool amortization
$
0.63
$
0.33
(1)
Includes post-production costs such as
gathering, processing, fractionation and compression.
(2)
Excludes $25 million in merger-related
expenses for the three months ended March 31, 2022.
(3)
Excludes $6 million in restructuring
charges and $1 million in merger-related expenses for the three
months ended March 31, 2021.
Appalachia – In the first quarter, total production was
259 Bcfe, with NGL production of 77 MBbls per day and oil
production of 14 MBbls per day. The Company drilled 18 wells,
completed 17 wells and placed 11 wells to sales with an average
lateral length of 12,667 feet.
Haynesville – In the first quarter, total production was
166 Bcf. There were 15 wells drilled, 20 wells completed and 21
wells placed to sales in the quarter with an average lateral length
of 8,215 feet.
E&P Division Results
For the three months ended
March 31, 2022
Appalachia
Haynesville
Gas production (Bcf)
210
166
Liquids production
Oil (MBbls)
1,263
4
NGL (MBbls)
6,919
—
Production (Bcfe)
259
166
Capital investments (in
millions)
Drilling and completions, including
workovers
$
181
$
279
Land acquisition and other
21
6
Capitalized interest and expense
33
21
Total capital investments
$
235
$
306
Gross operated well activity
summary
Drilled
18
15
Completed
17
20
Wells to sales
11
21
Total weighted average realized price
per Mcfe, excluding derivatives
$
5.09
$
4.55
Wells to sales summary
For the three months ended March
31, 2022
Gross wells to sales
Average lateral length
Appalachia
Super Rich Marcellus
6
12,839
Dry Gas Utica
4
12,967
Dry Gas Marcellus
1
10,437
Haynesville(1)
21
8,215
Total
32
(1)
Includes wells drilled and completed by
Indigo and GEP Haynesville.
Second Quarter 2022 Guidance Update
Based on current market conditions, Southwestern expects second
quarter production and price differentials to be within the
following ranges.
PRODUCTION
For the quarter ended June 30,
2022
Gas production (Bcf)
370 – 382
Liquids (% of production)
11.5% – 12.0%
Total (Bcfe)
418 – 434
Total (Bcfe/day)
~4.7
PRICING
Natural gas discount to NYMEX including
transportation (1)
$0.65 – $0.75 per Mcf
Oil discount to West Texas Intermediate
(WTI) including transportation
$7.50 – $9.50 per Bbl
Natural gas liquids realization as a % of
WTI including transportation
34% – 42%
(1)
Includes an estimated $0.03 to $0.05 per
Mcf gain on basis hedges.
Conference Call
Southwestern Energy will host a conference call and webcast on
Friday, April 29, 2022 at 9:30 a.m. Central to discuss first
quarter 2022 results. To participate, dial US toll-free
877-883-0383, or international 412-902-6506 and enter access code
6924406. The conference call will webcast live at www.swn.com.
To listen to a replay of the call, dial 877-344-7529,
International 412-317-0088, or Canada Toll Free 855-669-9658. Enter
replay access code 3957714. The replay will be available until May
6, 2022.
About Southwestern Energy
Southwestern Energy Company (NYSE: SWN) is a leading U.S.
producer and marketer of natural gas and natural gas liquids
focused on responsibly developing large-scale energy assets in the
nation’s most prolific shale gas basins. SWN’s returns-driven
strategy strives to create sustainable value for its stakeholders
by leveraging its scale, financial strength and operational
execution. For additional information, please visit www.swn.com and
www.swn.com/responsibility.
Forward Looking Statement
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act of 1934, as amended.
These statements are based on current expectations. The words
“anticipate,” “intend,” “plan,” “project,” “estimate,” “continue,”
“potential,” “should,” “could,” “may,” “will,” “objective,”
“guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,”
“budget,” “projection,” “goal,” “forecast,” “model,” “target”,
“seek”, “strive,” “would,” “approximate,” and similar words are
intended to identify forward-looking statements. Statements may be
forward looking even in the absence of these particular words.
Examples of forward-looking statements include, but are not
limited to, the expectations of plans, business strategies,
objectives and growth and anticipated financial and operational
performance, including guidance regarding our strategy to develop
reserves, drilling plans and programs, estimated reserves and
inventory duration, projected production and sales volume and
growth rates, commodity prices, projected average well costs,
generation of free cash flow, expected benefits from acquisitions,
potential acquisitions and strategic transactions, the timing
thereof and our ability to achieve the intended operational,
financial and strategic benefits of any such transactions or other
initiatives. These forward-looking statements are based on
management’s current beliefs, based on currently available
information, as to the outcome and timing of future events. All
forward-looking statements speak only as of the date of this news
release. The estimates and assumptions upon which forward-looking
statements are based are inherently uncertain and involve a number
of risks that are beyond our control. Although we believe the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance, and we cannot assure you that such statements
will be realized or that the events and circumstances they describe
will occur. Therefore, you should not place undue reliance on any
of the forward-looking statements contained herein.
Factors that could cause our actual results to differ materially
from those indicated in any forward-looking statement are subject
to all of the risks and uncertainties incident to the exploration
for and the development, production, gathering and sale of natural
gas, NGLs and oil, most of which are difficult to predict and many
of which are beyond our control. These risks include, but are not
limited to, commodity price volatility, inflation, lack of
availability of drilling and production equipment and services,
environmental risks, drilling and other operating risks,
legislative and regulatory changes, the uncertainty inherent in
estimating natural gas and oil reserves and in projecting future
rates of production, cash flow and access to capital, the timing of
development expenditures, a change in our credit rating and an
increase in interest rates, our ability to maintain leases that may
expire if production is not established or profitably maintained,
our ability to transport our production to the most favorable
markets or at all, any increase in severance or similar taxes, the
impact of the adverse outcome of any material litigation against us
or judicial decisions that affect us or our industry generally, the
effects of weather or power outages, increased competition, the
financial impact of accounting regulations and critical accounting
policies, the comparative cost of alternative fuels, credit risk
relating to the risk of loss as a result of non-performance by our
counterparties, impacts of world health events, including the
COVID-19 pandemic, cybersecurity risks, geopolitical and business
conditions in key regions of the world, our ability to realize the
expected benefits from acquisitions, including our mergers with GEP
Haynesville, LLC, Montage Resources Corporation and Indigo Natural
Resources LLC, and any other factors described under Item 7.
“Management's Discussion and Analysis of Financial Condition and
Results of Operations” and under Item 1A. “Risk Factors” of our
Annual Report on Form 10-K for the year ended December 31,
2021.
We have no obligation and make no undertaking to publicly update
or revise any forward-looking statements, except as required by
applicable law. All written and oral forward-looking statements
attributable to us are expressly qualified in their entirety by
this cautionary statement.
SOUTHWESTERN ENERGY COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
For the three months ended
March 31,
(in millions, except share/per share
amounts)
2022
2021
Operating Revenues:
Gas sales
$
1,692
$
464
Oil sales
111
81
NGL sales
272
173
Marketing
866
352
Other
2
2
2,943
1,072
Operating Costs and Expenses:
Marketing purchases
862
356
Operating expenses
381
250
General and administrative expenses
44
38
Merger-related expenses
25
1
Restructuring charges
—
6
Depreciation, depletion and
amortization
275
96
Taxes, other than income taxes
57
24
1,644
771
Operating Income
1,299
301
Interest Expense:
Interest on debt
68
50
Other interest charges
3
3
Interest capitalized
(30
)
(22
)
41
31
Loss on Derivatives
(3,927
)
(191
)
Loss on Early Extinguishment of
Debt
(2
)
—
Other Income, Net
—
1
Income (Loss) Before Income
Taxes
(2,671
)
80
Provision (Benefit) for Income
Taxes:
Current
4
—
Deferred
—
—
4
—
Net Income (Loss)
$
(2,675
)
$
80
Earnings (Loss) Per Common
Share:
Basic
$
(2.40
)
$
0.12
Diluted
$
(2.40
)
$
0.12
Weighted Average Common Shares
Outstanding:
Basic
1,114,610,964
675,385,145
Diluted
1,114,610,964
679,867,825
SOUTHWESTERN ENERGY COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, 2022
December 31, 2021
ASSETS
(in millions)
Current assets:
Cash and cash equivalents
$
21
$
28
Accounts receivable, net
1,071
1,160
Derivative assets
103
183
Other current assets
43
42
Total current assets
1,238
1,413
Natural gas and oil properties, using the
full cost method
34,184
33,631
Other
513
509
Less: Accumulated depreciation, depletion
and amortization
(24,482
)
(24,202
)
Total property and equipment, net
10,215
9,938
Operating lease assets
186
187
Long-term derivative assets
126
226
Other long-term assets
82
84
Total long-term assets
394
497
TOTAL ASSETS
$
11,847
$
11,848
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt
$
5
$
206
Accounts payable
1,488
1,282
Taxes payable
80
93
Interest payable
49
75
Derivative liabilities
3,940
1,279
Current operating lease liabilities
44
42
Other current liabilities
64
75
Total current liabilities
5,670
3,052
Long-term debt
4,895
5,201
Long-term operating lease liabilities
139
142
Long-term derivative liabilities
1,023
632
Pension and other postretirement
liabilities
25
23
Other long-term liabilities
214
251
Total long-term liabilities
6,296
6,249
Commitments and contingencies
Equity / (deficit):
Common stock, $0.01 par value;
2,500,000,000 shares authorized; issued 1,160,451,456 shares as of
March 31, 2022 and 1,158,672,666 shares as of December 31, 2021
12
12
Additional paid-in capital
7,159
7,150
Accumulated deficit
(7,063
)
(4,388
)
Accumulated other comprehensive loss
(25
)
(25
)
Common stock in treasury, 44,353,224
shares as of March 31, 2022 and December 31, 2021
(202
)
(202
)
Total equity / (deficit)
(119
)
2,547
TOTAL LIABILITIES AND EQUITY
$
11,847
$
11,848
SOUTHWESTERN ENERGY COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
For the three months ended
March 31,
(in millions)
2022
2021
Cash Flows From Operating
Activities:
Net income (loss)
$
(2,675
)
$
80
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, depletion and
amortization
275
96
Amortization of debt issuance costs
2
2
Loss on derivatives, unsettled
3,232
169
Stock-based compensation
1
—
Loss on early extinguishment of debt
2
—
Other
(1
)
—
Change in assets and liabilities,
excluding impact from acquisitions:
Accounts receivable
89
(33
)
Accounts payable
126
33
Taxes payable
(13
)
(8
)
Interest payable
(16
)
(2
)
Inventories
4
9
Other assets and liabilities
(54
)
1
Net cash provided by operating
activities
972
347
Cash Flows From Investing
Activities:
Capital investments
(500
)
(227
)
Proceeds from sale of property and
equipment
—
1
Other
—
(1
)
Net cash used in investing activities
(500
)
(227
)
Cash Flows From Financing
Activities:
Payments on current portion of long-term
debt
(202
)
—
Payments on long-term debt
(21
)
—
Payments on revolving credit facility
(2,803
)
(923
)
Borrowings under revolving credit
facility
2,517
790
Change in bank drafts outstanding
34
7
Cash paid for tax withholding
(4
)
(3
)
Net cash used in financing activities
(479
)
(129
)
Decrease in cash and cash equivalents
(7
)
(9
)
Cash and cash equivalents at beginning of
year
28
13
Cash and cash equivalents at end of
period
$
21
$
4
Hedging Summary
A detailed breakdown of derivative financial instruments and
financial basis positions as of March 31, 2022, including the
remainder of 2022 and excluding those positions that settled in the
first quarter, is shown below. Please refer to the Company’s
quarterly report on Form 10-Q to be filed with the Securities and
Exchange Commission for complete information on the Company’s
commodity, basis and interest rate protection.
Weighted Average Price per
MMBtu
Volume (Bcf)
Swaps
Sold Puts
Purchased Puts
Sold Calls
Natural gas
2022
Fixed price swaps
627
$
3.04
$
—
$
—
$
—
Two-way costless collars
78
—
—
2.53
2.92
Three-way costless collars
277
—
2.03
2.48
2.88
Total
982
2023
Fixed price swaps
504
$
3.08
$
—
$
—
$
—
Two-way costless collars
219
—
—
3.03
3.55
Three-way costless collars
215
—
2.09
2.54
3.00
Total
938
2024
Fixed price swaps
224
$
2.96
$
—
$
—
$
—
Two-way costless collars
44
—
—
3.07
3.53
Three-way costless collars
11
—
2.25
2.80
3.54
Total
279
Call Options – Natural Gas
(Net)
Volume
Weighted Average Strike
Price
(Bcf)
($/MMBtu)
2022
63
$
3.01
2023
46
$
2.94
2024
9
$
3.00
Total
118
Natural gas financial basis
positions
Volume
Basis Differential
(Bcf)
($/MMBtu)
Q2 2022
Dominion South
39
$
(0.65
)
TCO
28
$
(0.57
)
TETCO M3
24
$
(0.48
)
Columbia Gulf Mainline
7
$
(0.24
)
Total
98
$
(0.55
)
Q3 2022
Dominion South
40
$
(0.65
)
TCO
28
$
(0.58
)
TETCO M3
24
$
(0.49
)
Columbia Gulf Mainline
7
$
(0.24
)
Total
99
$
(0.56
)
Q4 2022
Dominion South
30
$
(0.65
)
TCO
26
$
(0.57
)
TETCO M3
19
$
(0.14
)
Columbia Gulf Mainline
6
$
(0.24
)
Total
81
$
(0.47
)
2023
Dominion South
129
$
(0.73
)
TCO
59
$
(0.55
)
TETCO M3
62
$
0.15
Total
250
$
(0.47
)
Weighted Average Price per
Bbl
Volume (MBbls)
Swaps
Sold Puts
Purchased Puts
Sold Calls
Oil
2022
Fixed price swaps
2,376
$
53.32
$
—
$
—
$
—
Three-way costless collars
1,037
—
39.83
50.17
57.01
Total
3,413
2023
Fixed price swaps
846
$
55.98
$
—
$
—
$
—
Three-way costless collars
1,268
—
33.97
45.51
56.12
Total
2,114
2024
Fixed price swaps
603
$
68.68
$
—
$
—
$
—
Ethane
2022
Fixed price swaps
4,142
$
11.27
$
—
$
—
$
—
2023
Fixed price swaps
1,308
$
11.91
$
—
$
—
$
—
Propane
2022
Fixed price swaps
4,643
$
31.09
$
—
$
—
$
—
Three-way costless collars
230
—
16.80
21.00
31.92
Total
4,873
2023
Fixed price swaps
1,066
$
37.15
$
—
$
—
$
—
Normal Butane
2022
Fixed price swaps
1,388
$
36.22
$
—
$
—
$
—
2023
Fixed price swaps
329
$
40.64
$
—
$
—
$
—
Natural Gasoline
2022
Fixed price swaps
1,497
$
55.78
$
—
$
—
$
—
2023
Fixed price swaps
359
$
66.00
$
—
$
—
$
—
Explanation and Reconciliation of Non-GAAP
Financial Measures
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). However, management believes certain non-GAAP
performance measures may provide financial statement users with
additional meaningful comparisons between current results, the
results of the Company’s peers and of prior periods.
One such non-GAAP financial measure is net cash flow. Management
presents this measure because (i) it is accepted as an indicator of
an oil and gas exploration and production company’s ability to
internally fund exploration and development activities and to
service or incur additional debt, (ii) changes in operating assets
and liabilities relate to the timing of cash receipts and
disbursements which the Company may not control and (iii) changes
in operating assets and liabilities may not relate to the period in
which the operating activities occurred.
Additional non-GAAP financial measures the Company may present
from time to time are free cash flow, net debt, adjusted net
income, adjusted diluted earnings per share and adjusted EBITDA,
all which exclude certain charges or amounts. Management presents
these measures because (i) they are consistent with the manner in
which the Company’s position and performance are measured relative
to the position and performance of its peers, (ii) these measures
are more comparable to earnings estimates provided by securities
analysts, and (iii) charges or amounts excluded cannot be
reasonably estimated and guidance provided by the Company excludes
information regarding these types of items. These adjusted amounts
are not a measure of financial performance under GAAP.
3 Months Ended March
31,
2022
2021
Adjusted net income:
(in millions)
Net income (loss)
$
(2,675
)
$
80
Add back (deduct):
Merger-related expenses
25
1
Restructuring charges
—
6
Loss on unsettled derivatives (1)
3,232
169
Loss on early extinguishment of debt
2
—
Other gain
—
(1
)
Adjustments due to discrete tax items
(2)
648
(18
)
Tax impact on adjustments
(785
)
(41
)
Adjusted net income
$
447
$
196
(1)
Includes $5 million of non-performance
risk adjustment related to our derivative activities for the three
months ended March 31, 2022.
(2)
The Company’s 2022 income tax rate is
24.1% before the impacts of any valuation allowance.
3 Months Ended March
31,
2022
2021
Adjusted diluted earnings per
share:
Diluted earnings (loss) per share
$
(2.40
)
$
0.12
Add back (deduct):
Merger-related expenses
0.02
0.00
Restructuring charges
—
0.01
Loss on unsettled derivatives (1)
2.89
0.25
Loss on early extinguishment of debt
0.00
—
Other gain
—
(0.00
)
Adjustments due to discrete tax items
(2)
0.58
(0.03
)
Tax impact on adjustments
(0.69
)
(0.06
)
Adjusted diluted earnings per share
$
0.40
$
0.29
(1)
Includes $5 million of non-performance
risk adjustment related to our derivative activities for the three
months ended March 31, 2022.
(2)
The Company’s 2022 income tax rate is
24.1% before the impacts of any valuation allowance.
3 Months Ended March
31,
2022
2021
Net cash flow:
(in millions)
Net cash provided by operating
activities
$
972
$
347
Add back (deduct):
Changes in operating assets and
liabilities
(136
)
—
Merger-related expenses
25
1
Restructuring charges
—
6
Net cash flow
$
861
$
354
3 Months Ended March
31,
2022
2021
Free cash flow:
(in millions)
Net cash flow
$
861
$
354
Subtract:
Total capital investments
(544
)
(266
)
Free cash flow
$
317
$
88
3 Months Ended March
31,
2022
2021
Adjusted EBITDA:
(in millions)
Net income (loss)
$
(2,675
)
$
80
Add back (deduct):
Interest expense
41
31
Income tax expense (benefit)
4
—
Depreciation, depletion and
amortization
275
96
Merger-related expenses
25
1
Restructuring charges
—
6
Loss on unsettled derivatives (1)
3,232
169
Loss on early extinguishment of debt
2
—
Stock-based compensation expense
1
—
Other
—
(1
)
Adjusted EBITDA
$
905
$
382
(1)
Includes $5 million of non-performance
risk adjustment for the three months ended March 31, 2022.
12 Months Ended March 31,
2022
Adjusted EBITDA:
(in millions)
Net income (loss)
$
(2,780
)
Add back (deduct):
Interest expense
146
Income tax expense (benefit)
4
Depreciation, depletion and
amortization
725
Merger-related expenses
100
Impairments
6
Restructuring charges
1
Loss on unsettled derivatives (1)
4,007
Loss on early extinguishment of debt
95
Stock-based compensation expense
3
Other
(5
)
Adjusted EBITDA
$
2,302
(1)
Includes $6 million of non-performance
risk adjustment for the twelve months ended March 31, 2022.
March 31, 2022
Net debt:
(in millions)
Total debt (1)
$
4,932
Subtract:
Cash and cash equivalents
(21
)
Net debt
$
4,911
(1)
Does not include $32 million of
unamortized debt premium/discount and issuance expense.
March 31, 2022
Net debt to Adjusted EBITDA:
(in millions)
Net debt
$
4,911
Adjusted EBITDA (1)
$
2,940
Net debt to Adjusted EBITDA
1.7x
(1)
Adjusted EBITDA for the twelve months
ended March 31, 2022 includes $242 million of Adjusted EBITDA
generated by Indigo Natural Resources prior to the September 2021
acquisition and $396 million of Adjusted EBITDA generated by GEP
Haynesville prior to the December 2021 acquisition.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220428006036/en/
Investor Contact Brittany Raiford Director, Investor
Relations (832) 796-7906 brittany_raiford@swn.com
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