HOUSTON, Feb. 23, 2021 /PRNewswire/ -- Cabot Oil & Gas
Corporation (NYSE: COG) ("Cabot"
or the "Company") today reported financial and operating results
for the fourth quarter and full-year 2020 and provided its updated
capital return framework.
"Our results in 2020 demonstrated Cabot's ability to continue to generate
profitability and positive free cash flow, even in the face of
historically low natural gas prices, which is a testament to the
tireless work of our dedicated employees who continue to deliver
strong results from our safe, responsible, and sustainable
operations in northeast Pennsylvania," stated Dan O. Dinges, Chairman, President and Chief
Executive Officer. "Strong secular tailwinds from an improving
natural gas supply and demand outlook are expected to drive a
significant improvement in our financial performance in 2021, as we
continue to focus on improving our financial returns, increasing
our positive free cash flow generation, and further enhancing our
capital return to shareholders."
Fourth Quarter 2020 Financial Results
Fourth quarter 2020 daily production was 2,375 million cubic
feet equivalent (Mmcfe) per day (100 percent natural gas),
exceeding the high-end of the Company's guidance range. During the
fourth quarter of 2020, the Company drilled 15.0 net wells,
completed 15.0 net wells, and placed 7.0 net wells on
production.
Fourth quarter 2020 net income was $131.2
million, or $0.33 per share,
compared to $146.9 million, or
$0.36 per share, in the prior-year
period. Fourth quarter 2020 adjusted net income (non-GAAP) was
$104.7 million, or $0.26 per share, compared to $120.8 million, or $0.30 per share, in the prior-year period. Fourth
quarter 2020 EBITDAX (non-GAAP) was $229.8
million, compared to $300.3
million in the prior-year period.
Fourth quarter 2020 net cash provided by operating activities
was $307.8 million, compared to
$263.0 million in the prior-year
period. Fourth quarter 2020 discretionary cash flow (non-GAAP) was
$220.3 million, compared to
$277.5 million in the prior-year
period. Fourth quarter 2020 free cash flow (non-GAAP) was
$122.9 million, compared to
$109.5 million in the prior-year
period.
Fourth quarter 2020 natural gas price realizations, including
the impact of derivatives, were $1.90
per thousand cubic feet (Mcf), a decrease of 12 percent compared to
the prior-year period. Excluding the impact of derivatives, fourth
quarter 2020 natural gas price realizations were $1.89 per Mcf, representing a $0.77 discount to NYMEX settlement prices. "While
a warmer start to the winter heating season and higher storage
levels resulted in wider than anticipated differentials across the
Appalachian Basin during the fourth quarter, we remain optimistic
that the improving outlook for lower end-of-season inventories will
provide tailwinds for regional natural gas prices during 2021,"
commented Dinges. Fourth quarter 2020 operating expenses (including
interest expense) decreased to $1.39
per thousand cubic feet equivalent (Mcfe), a three percent
improvement compared to the prior-year period.
Cabot incurred a total of
$105.8 million of capital
expenditures in the fourth quarter of 2020 including $97.6 million of drilling and facilities capital,
$2.6 million of leasehold acquisition
capital, and $5.6 million of other
capital.
See the supplemental tables at the end of this press release for
a reconciliation of non-GAAP measures including adjusted net
income, discretionary cash flow, EBITDAX, free cash flow, net debt
to adjusted capitalization ratio, and return on capital employed
(ROCE).
Full-Year 2020 Financial Results
Full-year 2020 daily production was 2,344 Mmcfe per day (100
percent natural gas), exceeding the Company's full-year guidance
range. The Company drilled 64.3 net wells, completed 77.3 net
wells, and placed 69.2 net wells on production for the full-year
2020.
Full-year 2020 net income was $200.5
million, or $0.50 per share,
compared to $681.1 million, or
$1.64 per share, for the prior-year
period. Adjusted net income (non-GAAP) for the full-year 2020 was
$214.0 million, or $0.54 per share, compared to $698.8 million, or $1.68 per share, for the prior-year period.
Full-year 2020 EBITDAX (non-GAAP) was $719.3
million, compared to $1,408.6
million for the prior-year period.
For the full-year 2020, net cash provided by operating
activities was $778.2 million,
compared to $1,445.8 million for the
prior-year period. Full-year 2020 discretionary cash flow
(non-GAAP) was $685.0 million,
compared to $1,360.8 million for the
prior-year period. Full-year 2020 free cash flow (non-GAAP) was
$109.1 million, compared to
$563.1 million for the prior-year
period. Full-year 2020 ROCE (non-GAAP) was 7.6 percent, compared to
22.2 percent for the prior-year period.
Full-year 2020 natural gas price realizations, including the
impact of derivatives, were $1.68 per
Mcf, a decrease of 31 percent compared to the prior-year period.
Excluding the impact of derivatives, full-year 2020 natural gas
price realizations were $1.64 per
Mcf, representing a $0.44 discount to
NYMEX settlement prices. Full-year 2020 operating expenses
(including interest expense) decreased to $1.43 per Mcfe, a one percent improvement
compared to the prior-year period.
Cabot incurred a total of
$569.8 million of capital
expenditures in 2020 including $546.7
million of drilling and facilities capital, $5.8 million of leasehold acquisition capital,
and $17.3 million of other
capital.
Financial Position and Liquidity
As of December 31, 2020,
Cabot had total debt of
$1.1 billion and cash on hand of
$140.1 million. The Company's net
debt-to-adjusted capitalization ratio and net debt-to-trailing
twelve months EBITDAX ratio were 31.0 percent and 1.4x,
respectively, compared to 32.2 percent and 0.7x as of December 31, 2019. The Company currently
has no debt outstanding under its credit facility, resulting in
approximately $1.6 billion of
liquidity.
Subsequent to the end of the year, the Company repaid
$88.0 million of 5.42% senior notes
that matured in January 2021.
2020 Emissions Intensity Reduction
"We are proud of our position as a leading supplier of natural
gas, focused on supporting the goal of reducing total greenhouse
gas (GHG) emissions while achieving energy independence in
the United States. As the world
moves to a low-carbon electric economy, the importance of natural
gas—which is 100 percent of our production—should continue to
steadily rise," noted Dinges. "From 2019 to 2020, we realized a 58
percent reduction in our GHG emissions intensity from 3.12 to 1.31
metric tons of CO2e per thousand barrels of oil
equivalent (Mboe) and a 70 percent reduction in our methane
emissions intensity from 0.083 to 0.025 percent, highlighting our
industry-leading efficiency."
Capital Return Framework
Cabot also announced its
updated capital return framework. The Company intends to implement
a "base plus supplemental" dividend approach. Under this updated
capital return framework, Cabot
plans to continue to deliver its regular quarterly base dividend on
the Company's common stock and to supplement its regular quarterly
base dividends with an annual supplemental dividend to achieve its
minimum capital return target of 50 percent of annual free cash
flow. Any supplemental dividend is expected to be declared and paid
annually, with the first payment expected to occur in the fourth
quarter of 2021. Any excess free cash flow above the minimum
capital return target of 50 percent of annual free cash flow will
be utilized for balance sheet enhancement, additional supplemental
dividends, or opportunistic share repurchases, depending on market
conditions. In 2021, Cabot plans
to retire its $188 million of current
debt maturities (including the $88
million tranche that was repaid in January) with a portion
of its excess free cash flow.
"Our capital return framework reaffirms our commitment to
returning a significant portion of our free cash flow to
shareholders, while also preserving our balance sheet strength,"
said Dinges. "The supplemental component of this dividend approach
allows us to focus on sustainable capital return that is
appropriately tailored for where we are in the natural gas price
cycle. We also expect to continue to grow our base dividend over
time, as we have done five times since 2017. Our track record of
generating positive free cash flow for the last five years, while
far exceeding our annual target of returning at least 50 percent of
free cash flow to shareholders, highlights our continued focus on
disciplined capital allocation and enhancing returns to
shareholders over time."
2021 Guidance
Cabot today reaffirmed its
recently announced guidance for 2021. The Company's operating plan
for the year is expected to deliver an average net production rate
of 2,350 Mmcfe per day from a capital program of $530 to $540
million, representing a six percent reduction in capital
spending year-over-year at the midpoint of the range. Cabot has also reaffirmed its first quarter
2021 production guidance range of 2,250 to 2,300 Mmcfe per day.
Conference Call Webcast
A conference call is scheduled for Wednesday, February 24, 2021, at 11:00 a.m. Eastern Time to discuss fourth quarter
and full-year 2020 financial and operating results. To access the
live audio webcast, please visit the Investor Relations section of
the Company's website. A replay of the call will also be available
on the Company's website.
Cabot Oil & Gas Corporation, headquartered in Houston, Texas, is a leading independent
natural gas producer with its entire resource base located in the
continental United States. For
additional information, visit the Company's website at
www.cabotog.com.
This press release includes forward–looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The statements regarding future financial and operating
performance and results, returns to shareholders, strategic
pursuits and goals, market prices, future hedging and risk
management activities, and other statements that are not historical
facts contained in this report are forward-looking statements. The
words "expect", "project", "estimate", "believe", "anticipate",
"intend", "budget", "plan", "forecast", "outlook", "predict",
"may", "should", "could", "will" and similar expressions are also
intended to identify forward-looking statements. Such statements
involve risks and uncertainties, including, but not limited to, the
continuing effects of the COVID-19 pandemic and the impact thereof
on the Company's business, financial condition and results of
operations, the availability of cash on hand and other sources of
liquidity to fund our capital expenditures, the repayment of our
debt maturities and our dividends, actions by, or disputes among or
between, the Organization of Petroleum Exporting Countries and
other producer countries, market factors, market prices (including
geographic basis differentials) of natural gas and crude oil,
results of future drilling and marketing activity, future
production and costs, pipeline projects, legislative and regulatory
initiatives, electronic, cyber or physical security breaches and
other factors detailed herein and in our other Securities and
Exchange Commission (SEC) filings. In addition, the declaration and
payment of any future dividends, whether regular quarterly base
dividends or annual supplemental dividends, will depend on the
Company's financial results, cash requirements, future prospects
and other factors deemed relevant by the Board. See "Risk Factors"
in Item 1A of the Company's most recent Annual Report on Form 10-K
and subsequent Quarterly Reports on Form 10-Q for additional
information about these risks and uncertainties. Should one or more
of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual outcomes may vary materially
from those indicated. Any forward-looking statement speaks
only as of the date on which such statement is made, and the
Company does not undertake any obligation to correct or update any
forward-looking statement, whether as the result of new
information, future events or otherwise, except as required by
applicable law.
OPERATING
DATA
|
|
|
Quarter Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
PRODUCTION
VOLUMES
|
|
|
|
|
|
|
|
Natural gas
(Bcf)
|
218.5
|
|
|
226.1
|
|
|
857.7
|
|
|
865.3
|
|
Equivalent production
(Bcfe)
|
218.5
|
|
|
226.1
|
|
|
857.7
|
|
|
865.3
|
|
Daily equivalent
production (Mmcfe/day)
|
2,375
|
|
|
2,457
|
|
|
2,344
|
|
|
2,371
|
|
|
|
|
|
|
|
|
|
AVERAGE SALES
PRICE
|
|
|
|
|
|
|
|
Natural gas, including
hedges ($/Mcf)
|
$
|
1.90
|
|
|
$
|
2.15
|
|
|
$
|
1.68
|
|
|
$
|
2.45
|
|
Natural gas, excluding
hedges ($/Mcf)
|
$
|
1.89
|
|
|
$
|
2.05
|
|
|
$
|
1.64
|
|
|
$
|
2.29
|
|
|
|
|
|
|
|
|
|
AVERAGE UNIT COSTS
($/Mcfe)(1)
|
|
|
|
|
|
|
|
Direct
operations
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
Transportation and
gathering
|
0.67
|
|
|
0.66
|
|
|
0.67
|
|
|
0.66
|
|
Taxes other than
income
|
0.02
|
|
|
0.01
|
|
|
0.02
|
|
|
0.02
|
|
Exploration
|
0.02
|
|
|
0.02
|
|
|
0.02
|
|
|
0.02
|
|
Depreciation,
depletion and amortization
|
0.44
|
|
|
0.47
|
|
|
0.46
|
|
|
0.47
|
|
General and
administrative (excluding stock-based compensation)
|
0.08
|
|
|
0.07
|
|
|
0.07
|
|
|
0.07
|
|
Stock-based
compensation
|
0.03
|
|
|
0.03
|
|
|
0.05
|
|
|
0.04
|
|
Interest
expense
|
0.05
|
|
|
0.06
|
|
|
0.06
|
|
|
0.06
|
|
|
$
|
1.39
|
|
|
$
|
1.43
|
|
|
$
|
1.43
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WELLS
DRILLED(2)
|
|
|
|
|
|
|
|
Gross
|
19
|
|
|
25
|
|
|
74
|
|
|
96
|
|
Net
|
15.0
|
|
|
23.0
|
|
|
64.3
|
|
|
94.0
|
|
|
|
|
|
|
|
|
|
WELLS
COMPLETED(2)
|
|
|
|
|
|
|
|
Gross
|
15
|
|
|
28
|
|
|
86
|
|
|
99
|
|
Net
|
15.0
|
|
|
26.0
|
|
|
77.3
|
|
|
97.0
|
|
|
|
|
(1)
|
Total unit cost
may differ from the sum of the individual costs due to
rounding.
|
(2)
|
Wells drilled
represents wells drilled to total depth during the period. Wells
completed includes wells completed during the period, regardless of
when they were drilled.
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
|
|
|
Quarter Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(In thousands,
except per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
OPERATING
REVENUES
|
|
|
|
|
|
|
|
Natural gas
|
$
|
413,107
|
|
|
$
|
463,451
|
|
|
$
|
1,404,989
|
|
|
$
|
1,985,240
|
|
Gain (loss) on
derivative instruments
|
43,621
|
|
|
(2,158)
|
|
|
61,404
|
|
|
80,808
|
|
Other
|
50
|
|
|
75
|
|
|
231
|
|
|
229
|
|
|
456,778
|
|
|
461,368
|
|
|
1,466,624
|
|
|
2,066,277
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
Direct
operations
|
18,539
|
|
|
21,350
|
|
|
73,403
|
|
|
76,958
|
|
Transportation and
gathering
|
145,539
|
|
|
149,974
|
|
|
571,102
|
|
|
574,677
|
|
Taxes other than
income
|
3,675
|
|
|
2,959
|
|
|
14,380
|
|
|
17,053
|
|
Exploration
|
4,750
|
|
|
5,241
|
|
|
15,419
|
|
|
20,270
|
|
Depreciation,
depletion and amortization
|
96,497
|
|
|
106,439
|
|
|
390,903
|
|
|
405,733
|
|
General and
administrative (excluding stock-based compensation)
|
17,313
|
|
|
15,692
|
|
|
62,214
|
|
|
64,090
|
|
Stock-based
compensation(1)
|
7,221
|
|
|
6,808
|
|
|
43,177
|
|
|
30,780
|
|
|
293,534
|
|
|
308,463
|
|
|
1,170,598
|
|
|
1,189,561
|
|
Earnings (loss) on
equity method investments
|
—
|
|
|
69,302
|
|
|
(59)
|
|
|
80,496
|
|
(Loss) gain on sale
of assets
|
(352)
|
|
|
2
|
|
|
(491)
|
|
|
(1,462)
|
|
INCOME FROM
OPERATIONS
|
162,892
|
|
|
222,209
|
|
|
295,476
|
|
|
955,750
|
|
Interest expense,
net
|
10,981
|
|
|
14,650
|
|
|
54,124
|
|
|
54,952
|
|
Other
expense
|
58
|
|
|
144
|
|
|
229
|
|
|
574
|
|
Income before income
taxes
|
151,853
|
|
|
207,415
|
|
|
241,123
|
|
|
900,224
|
|
Income tax
expense
|
20,647
|
|
|
60,475
|
|
|
40,594
|
|
|
219,154
|
|
NET
INCOME
|
$
|
131,206
|
|
|
$
|
146,940
|
|
|
$
|
200,529
|
|
|
$
|
681,070
|
|
Earnings per share -
Basic
|
$
|
0.33
|
|
|
$
|
0.36
|
|
|
$
|
0.50
|
|
|
$
|
1.64
|
|
Weighted-average
common shares outstanding
|
398,583
|
|
|
404,581
|
|
|
398,521
|
|
|
415,514
|
|
|
|
|
(1)
|
Includes the
impact of our performance share awards and restricted
stock.
|
CONDENSED
CONSOLIDATED BALANCE SHEET (Unaudited)
|
|
(In
thousands)
|
December
31, 2020
|
|
December
31, 2019
|
ASSETS
|
|
|
|
Current
assets
|
$
|
415,715
|
|
|
$
|
568,248
|
|
Properties and
equipment, net (Successful efforts method)
|
4,044,606
|
|
|
3,855,706
|
|
Other
assets
|
63,211
|
|
|
63,291
|
|
|
$
|
4,523,532
|
|
|
$
|
4,487,245
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
$
|
202,226
|
|
|
$
|
241,034
|
|
Current portion of
long-term debt
|
188,000
|
|
|
87,000
|
|
Long-term debt, net
(excluding current maturities)
|
945,924
|
|
|
1,133,025
|
|
Deferred income
taxes
|
774,195
|
|
|
702,104
|
|
Other
liabilities
|
197,480
|
|
|
172,595
|
|
Stockholders'
equity
|
2,215,707
|
|
|
2,151,487
|
|
|
$
|
4,523,532
|
|
|
$
|
4,487,245
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
|
|
|
Quarter Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(In
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net income
|
$
|
131,206
|
|
|
$
|
146,940
|
|
|
$
|
200,529
|
|
|
$
|
681,070
|
|
Depreciation,
depletion and amortization
|
96,497
|
|
|
106,439
|
|
|
390,903
|
|
|
405,733
|
|
Deferred income tax
expense
|
25,264
|
|
|
55,421
|
|
|
71,777
|
|
|
244,418
|
|
Loss (gain) on sale
of assets
|
352
|
|
|
(2)
|
|
|
491
|
|
|
1,462
|
|
Exploratory dry hole
cost
|
1,621
|
|
|
2,220
|
|
|
3,632
|
|
|
2,236
|
|
(Gain) loss on
derivative instruments
|
(43,621)
|
|
|
2,158
|
|
|
(61,404)
|
|
|
(80,808)
|
|
Net cash received in
settlement of derivative instruments
|
1,689
|
|
|
23,519
|
|
|
35,218
|
|
|
138,450
|
|
Distribution of
earnings from equity method investments
|
—
|
|
|
3,115
|
|
|
—
|
|
|
15,725
|
|
Stock-based
compensation and other
|
6,592
|
|
|
6,289
|
|
|
40,796
|
|
|
29,009
|
|
Income charges not
requiring cash
|
727
|
|
|
(68,555)
|
|
|
3,020
|
|
|
(76,530)
|
|
Changes in assets and
liabilities
|
87,515
|
|
|
(14,564)
|
|
|
93,273
|
|
|
85,026
|
|
Net cash provided by
operating activities
|
307,842
|
|
|
262,980
|
|
|
778,235
|
|
|
1,445,791
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Capital
expenditures
|
(97,425)
|
|
|
(167,672)
|
|
|
(575,847)
|
|
|
(788,368)
|
|
Proceeds from sale of
assets
|
493
|
|
|
199
|
|
|
828
|
|
|
2,600
|
|
Investment in equity
method investments
|
—
|
|
|
(361)
|
|
|
(35)
|
|
|
(9,338)
|
|
Distribution of
investment from equity method investments
|
—
|
|
|
72
|
|
|
—
|
|
|
1,728
|
|
Proceeds from sale of
equity method investments
|
—
|
|
|
249,463
|
|
|
(9,424)
|
|
|
249,463
|
|
Net cash provided by
(used in) investing activities
|
(96,932)
|
|
|
81,701
|
|
|
(584,478)
|
|
|
(543,915)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Net borrowings
(repayments) of debt
|
(28,000)
|
|
|
—
|
|
|
(87,000)
|
|
|
(7,000)
|
|
Treasury stock
repurchases
|
—
|
|
|
(172,417)
|
|
|
—
|
|
|
(519,863)
|
|
Dividends
paid
|
(39,858)
|
|
|
(40,793)
|
|
|
(159,390)
|
|
|
(145,515)
|
|
Tax withholding on
vesting of stock awards
|
(3,109)
|
|
|
(3)
|
|
|
(9,459)
|
|
|
(10,590)
|
|
Capitalized debt
issuance costs
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(7,412)
|
|
Net cash used in
financing activities
|
(70,967)
|
|
|
(213,214)
|
|
|
(255,849)
|
|
|
(690,380)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
$
|
139,943
|
|
|
$
|
131,467
|
|
|
$
|
(62,092)
|
|
|
$
|
211,496
|
|
Explanation and Reconciliation of Non-GAAP
Financial Measures
We report our financial results in accordance with accounting
principles generally accepted in the
United States (GAAP). However, we believe certain non-GAAP
performance measures may provide financial statement users with
additional meaningful comparisons between current results and
results of prior periods. In addition, we believe these measures
are used by analysts and others in the valuation, rating and
investment recommendations of companies within the oil and natural
gas exploration and production industry. See the reconciliations
throughout this release of GAAP financial measures to non-GAAP
financial measures for the periods indicated.
We have also included herein certain forward-looking non-GAAP
financial measures. Due to the forward-looking nature of these
non-GAAP financial measures, we cannot reliably predict certain of
the necessary components of the most directly comparable
forward-looking GAAP measures, such as future impairments and
future changes in capital. Accordingly, we are unable to present a
quantitative reconciliation of such forward-looking non-GAAP
financial measures to their most directly comparable
forward-looking GAAP financial measures. Reconciling items in
future periods could be significant.
Reconciliation of Net Income to Adjusted Net
Income and Adjusted Earnings Per Share
Adjusted Net Income and Adjusted Earnings per Share are
presented based on our belief that these non-GAAP measures enable a
user of the financial information to understand the impact of these
items on reported results. Adjusted Net Income is defined as net
income plus gain and loss on sale of assets, gain and loss on
derivative instruments, gain and loss on sale of equity method
investment, stock-based compensation expense, severance expense,
interest expense related to income tax reserves and tax effect on
selected items. Additionally, this presentation provides a
beneficial comparison to similarly adjusted measurements of prior
periods. Adjusted Net Income and Adjusted Earnings per Share
are not measures of financial performance under GAAP and should not
be considered as alternatives to net income and earnings per share,
as defined by GAAP.
|
Quarter Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(In thousands,
except per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As reported - net
income
|
$
|
131,206
|
|
|
$
|
146,940
|
|
|
$
|
200,529
|
|
|
$
|
681,070
|
|
Reversal of selected
items:
|
|
|
|
|
|
|
|
Loss (gain) on sale of
assets
|
352
|
|
|
(2)
|
|
|
491
|
|
|
1,462
|
|
(Gain) loss on
derivative instruments(1)
|
(41,932)
|
|
|
25,677
|
|
|
(26,186)
|
|
|
57,642
|
|
(Gain) loss on sale of
equity method investment
|
—
|
|
|
(66,412)
|
|
|
24
|
|
|
(66,412)
|
|
Stock-based
compensation expense
|
7,221
|
|
|
6,808
|
|
|
43,177
|
|
|
30,780
|
|
Severance
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
2,521
|
|
Interest expense
related to income tax reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,052)
|
|
Tax effect on selected
items
|
7,825
|
|
|
7,739
|
|
|
(4,000)
|
|
|
(5,233)
|
|
Adjusted net
income
|
$
|
104,672
|
|
|
$
|
120,750
|
|
|
$
|
214,035
|
|
|
$
|
698,778
|
|
As reported -
earnings per share
|
$
|
0.33
|
|
|
$
|
0.36
|
|
|
$
|
0.50
|
|
|
$
|
1.64
|
|
Per share impact of
selected items
|
(0.07)
|
|
|
(0.06)
|
|
|
0.04
|
|
|
0.04
|
|
Adjusted earnings per
share
|
$
|
0.26
|
|
|
$
|
0.30
|
|
|
$
|
0.54
|
|
|
$
|
1.68
|
|
Weighted-average
common shares outstanding
|
398,583
|
|
|
404,581
|
|
|
398,521
|
|
|
415,514
|
|
|
|
|
(1)
|
This amount
represents the non-cash mark-to-market changes of our commodity
derivative instruments recorded in Gain (loss) on derivative
instruments in the Condensed Consolidated Statement of
Operations.
|
Return on Capital Employed
Return on Capital Employed (ROCE) is defined as Adjusted Net
Income (defined above) plus after-tax net interest expense divided
by average capital employed, which is defined as total debt plus
stockholders' equity. ROCE is presented based on our belief that
this non-GAAP measure is useful information to investors when
evaluating our profitability and the efficiency with which we have
employed capital over time. ROCE is not a measure of financial
performance under GAAP and should not be considered an alternative
to net income, as defined by GAAP.
|
|
Twelve Months
Ended December 31,
|
(In
thousands)
|
|
2020
|
|
2019
|
Interest expense,
net
|
|
$
|
54,124
|
|
|
$
|
54,952
|
|
Interest expense
related to income tax reserves (1)
|
|
—
|
|
|
3,052
|
|
Tax
benefit
|
|
(12,367)
|
|
|
(13,241)
|
|
After-tax interest
expense, net (A)
|
|
41,757
|
|
|
44,763
|
|
|
|
|
|
|
As reported - net
income
|
|
200,529
|
|
|
681,070
|
|
Adjustments to as
reported - net income, net of tax
|
|
13,506
|
|
|
17,708
|
|
Adjusted net income
(B)
|
|
214,035
|
|
|
698,778
|
|
|
|
|
|
|
Adjusted net income
before interest expense, net (A + B)
|
|
$
|
255,792
|
|
|
$
|
743,541
|
|
|
|
|
|
|
Total debt -
beginning
|
|
$
|
1,220,025
|
|
|
$
|
1,226,104
|
|
Stockholders' equity
- beginning
|
|
2,151,487
|
|
|
2,088,159
|
|
Capital employed -
beginning
|
|
3,371,512
|
|
|
3,314,263
|
|
|
|
|
|
|
Total debt -
ending
|
|
1,133,924
|
|
|
1,220,025
|
|
Stockholders' equity
- ending
|
|
2,215,707
|
|
|
2,151,487
|
|
Capital employed -
ending
|
|
3,349,631
|
|
|
3,371,512
|
|
|
|
|
|
|
Average capital
employed (C)
|
|
$
|
3,360,572
|
|
|
$
|
3,342,888
|
|
|
|
|
|
|
Return on average
capital employed (ROCE) (A + B) / C
|
|
7.6
|
%
|
|
22.2
|
%
|
|
|
|
(1)
|
Interest expense
related to income tax reserves is included in the adjustments to as
reported - net income, net of tax.
|
Discretionary Cash Flow and Free Cash Flow
Calculation and Reconciliation
Discretionary Cash Flow is defined as net cash provided by
operating activities excluding changes in assets and
liabilities. Discretionary Cash Flow is widely accepted as a
financial indicator of an oil and gas company's ability to generate
cash which is used to internally fund exploration and development
activities, pay dividends and service debt. Discretionary Cash
Flow is presented based on our belief that this non-GAAP measure is
useful information to investors when comparing our cash flows with
the cash flows of other companies that use the full cost method of
accounting for oil and gas producing activities or have different
financing and capital structures or tax rates. Discretionary
Cash Flow is not a measure of financial performance under GAAP and
should not be considered as an alternative to cash flows from
operating activities, as defined by GAAP, or as a measure of
liquidity, or an alternative to net income, as defined by GAAP.
Free Cash Flow is defined as Discretionary Cash Flow (defined
above) less capital expenditures and investment in equity method
investments. Free Cash Flow is an indicator of a company's ability
to generate cash flow after spending the money required to maintain
or expand its asset base. Free Cash Flow is presented based on our
belief that this non-GAAP measure is useful information to
investors when comparing our cash flows with the cash flows of
other companies. Free Cash Flow is not a measure of financial
performance under GAAP and should not be considered as an
alternative to cash flows from operating activities, as defined by
GAAP, or as a measure of liquidity, or an alternative to net
income, as defined by GAAP.
|
|
Quarter
Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(In
thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
|
$
|
307,842
|
|
|
$
|
262,980
|
|
|
$
|
778,235
|
|
|
$
|
1,445,791
|
|
Changes in assets and
liabilities
|
|
(87,515)
|
|
|
14,564
|
|
|
(93,273)
|
|
|
(85,026)
|
|
Discretionary cash
flow
|
|
220,327
|
|
|
277,544
|
|
|
684,962
|
|
|
1,360,765
|
|
Capital
expenditures
|
|
(97,425)
|
|
|
(167,672)
|
|
|
(575,847)
|
|
|
(788,368)
|
|
Investment in equity
method investments
|
|
—
|
|
|
(361)
|
|
|
(35)
|
|
|
(9,338)
|
|
Free cash
flow
|
|
$
|
122,902
|
|
|
$
|
109,511
|
|
|
$
|
109,080
|
|
|
$
|
563,059
|
|
EBITDAX Calculation and Reconciliation
EBITDAX is defined as net income plus interest expense, other
expense, income tax expense, depreciation, depletion and
amortization (including impairments), exploration expense, gain and
loss on sale of assets, non-cash gain and loss on derivative
instruments, earnings and loss on equity method investments, cash
distributions received from equity method investments, and
stock-based compensation expense. EBITDAX is presented based on our
belief that this non-GAAP measure is useful information to
investors when evaluating our ability to internally fund
exploration and development activities and to service or incur debt
without regard to financial or capital structure. EBITDAX is not a
measure of financial performance under GAAP and should not be
considered as an alternative to cash flows from operating
activities or net income, as defined by GAAP, or as a measure of
liquidity.
|
Quarter
Ended December 31,
|
|
Twelve Months Ended
December 31,
|
(In
thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$
|
131,206
|
|
|
$
|
146,940
|
|
|
$
|
200,529
|
|
|
$
|
681,070
|
|
Plus
(less):
|
|
|
|
|
|
|
|
Interest expense,
net
|
10,981
|
|
|
14,650
|
|
|
54,124
|
|
|
54,952
|
|
Other
expense
|
58
|
|
|
144
|
|
|
229
|
|
|
574
|
|
Income tax
expense
|
20,647
|
|
|
60,475
|
|
|
40,594
|
|
|
219,154
|
|
Depreciation,
depletion and amortization
|
96,497
|
|
|
106,439
|
|
|
390,903
|
|
|
405,733
|
|
Exploration
|
4,750
|
|
|
5,241
|
|
|
15,419
|
|
|
20,270
|
|
Loss (gain) on sale of
assets
|
352
|
|
|
(2)
|
|
|
491
|
|
|
1,462
|
|
Non-cash (gain) loss
on derivative instruments
|
(41,932)
|
|
|
25,677
|
|
|
(26,186)
|
|
|
57,642
|
|
(Earnings) loss on
equity method investments
|
—
|
|
|
(69,302)
|
|
|
59
|
|
|
(80,496)
|
|
Equity method
investment distributions
|
—
|
|
|
3,187
|
|
|
—
|
|
|
17,453
|
|
Stock-based
compensation
|
7,221
|
|
|
6,808
|
|
|
43,177
|
|
|
30,780
|
|
EBITDAX
|
$
|
229,780
|
|
|
$
|
300,257
|
|
|
$
|
719,339
|
|
|
$
|
1,408,594
|
|
Net Debt Reconciliation
The total debt to total capitalization ratio is calculated by
dividing total debt by the sum of total debt and total
stockholders' equity. This ratio is a measurement which is
presented in our annual and interim filings and we believe this
ratio is useful to investors in determining our leverage. Net Debt
is calculated by subtracting cash and cash equivalents from total
debt. Net Debt and the Net Debt to Adjusted Capitalization
ratio are non-GAAP measures which we believe are also useful to
investors since we have the ability to and may decide to use a
portion of our cash and cash equivalents to retire debt.
Additionally, as we may incur additional expenditures without
increasing debt, it is appropriate to apply cash and cash
equivalents to debt in calculating the Net Debt to Adjusted
Capitalization ratio.
(In
thousands)
|
December
31, 2020
|
|
December
31, 2019
|
Current portion of
long-term debt
|
$
|
188,000
|
|
|
$
|
87,000
|
|
Long-term debt,
net
|
945,924
|
|
|
1,133,025
|
|
Total debt
|
$
|
1,133,924
|
|
|
$
|
1,220,025
|
|
Stockholders'
equity
|
2,215,707
|
|
|
2,151,487
|
|
Total
capitalization
|
$
|
3,349,631
|
|
|
$
|
3,371,512
|
|
|
|
|
|
Total debt
|
$
|
1,133,924
|
|
|
$
|
1,220,025
|
|
Less: Cash and cash
equivalents
|
(140,113)
|
|
|
(200,227)
|
|
Net debt
|
$
|
993,811
|
|
|
$
|
1,019,798
|
|
|
|
|
|
Net debt
|
$
|
993,811
|
|
|
$
|
1,019,798
|
|
Stockholders'
equity
|
2,215,707
|
|
|
2,151,487
|
|
Total adjusted
capitalization
|
$
|
3,209,518
|
|
|
$
|
3,171,285
|
|
|
|
|
|
Total debt to total
capitalization ratio
|
33.9
|
%
|
|
36.2
|
%
|
Less: Impact of cash
and cash equivalents
|
2.9
|
%
|
|
4.0
|
%
|
Net debt to adjusted
capitalization ratio
|
31.0
|
%
|
|
32.2
|
%
|
Capital
Expenditures
|
|
|
|
Quarter Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
(In
thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash paid for capital
expenditures
|
|
$
|
97,425
|
|
|
$
|
167,672
|
|
|
$
|
575,847
|
|
|
$
|
788,368
|
|
Change in accrued
capital costs
|
|
10,022
|
|
|
(4,306)
|
|
|
(2,465)
|
|
|
(2,870)
|
|
Exploratory dry hole
cost
|
|
(1,621)
|
|
|
(2,220)
|
|
|
(3,632)
|
|
|
(2,236)
|
|
Capital
expenditures
|
|
$
|
105,826
|
|
|
$
|
161,146
|
|
|
$
|
569,750
|
|
|
$
|
783,262
|
|
View original
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SOURCE Cabot Oil & Gas Corporation