XTO Energy Announces Earnings, Production and Cash Flow for 4Q; Reports Record Earnings, Production and Cash Flow for 2009
FORT WORTH, Texas, Feb. 17 /PRNewswire-FirstCall/ -- XTO Energy Inc. (NYSE: XTO) today reported record production for fourth quarter 2009 of 2.88 billion cubic feet equivalent (Bcfe) per day, up 9% from the fourth quarter 2008 level of 2.64 Bcfe per day. Total revenues for the fourth quarter were a record $2.34 billion, a 19% increase from $1.96 billion the prior year. Earnings for the quarter were $537 million, or $0.92 per share ($0.92 diluted), a 53% increase from fourth quarter 2008 earnings of $351 million, or $0.61 per share ($0.61 diluted). After adjusting for an $8 million ($5 million after tax) non-cash derivative fair value loss, adjusted earnings for fourth quarter 2009 were $542 million, or $0.93 per share ($0.93 diluted). Fourth quarter 2008 adjusted earnings were $393 million, or $0.68 per share ($0.68 diluted).(1)
Operating income for the quarter was $989 million, a 39% increase from fourth quarter 2008 operating income of $709 million. Operating cash flow was a record $1.69 billion, up 28% from 2008 fourth quarter comparable operating cash flow of $1.32 billion.(1)
Fourth quarter daily gas production averaged 2.37 billion cubic feet (Bcf), up 9% from fourth quarter 2008 daily production of 2.17 Bcf. Daily oil production for the fourth quarter was 64.6 thousand barrels, a 2% increase from the fourth quarter 2008 level of 63.5 thousand barrels. During the fourth quarter, natural gas liquids production was 21.2 thousand barrels per day, a 37% increase from the fourth quarter 2008 rate of 15.4 thousand barrels per day.
The average realized gas price for the quarter was $7.29 per thousand cubic feet (Mcf), 7% higher than the fourth quarter 2008 average price of $6.79 per Mcf. The fourth quarter average oil price increased 30% to $110.85 per barrel from the fourth quarter 2008 average price of $85.19 per barrel. Natural gas liquids prices averaged $39.07 per barrel for the quarter, a 33% increase from the 2008 fourth quarter average price of $29.46.
For the year, the Company reported record earnings of $2.02 billion, or $3.48 per share ($3.46 diluted), compared with earnings of $1.91 billion, or $3.58 per share ($3.54 diluted) for 2008. After adjusting for a $130 million ($83 million after tax) non-cash derivative fair value loss and a $17 million ($11 million after tax) gain on extinguishment of debt, 2009 adjusted earnings were $2.09 billion, or $3.60 per share ($3.58 diluted) compared to 2008 adjusted earnings of $1.95 billion, or $3.64 per share ($3.60 diluted).(1) Operating cash flow in 2009 was a record $6.25 billion, up 22% from the prior year level of $5.13 billion.(1) Total revenues for 2009 were a record $9.06 billion, an 18% increase from revenues of $7.70 billion for 2008. Operating income for the year was $3.69 billion, a 5% increase from $3.51 billion for 2008.
Gas production for the year was a record 2.34 Bcf per day, up 23% from 2008 daily production of 1.91 Bcf. Oil production for 2009 was a record 66.3 thousand barrels per day, an 18% increase from 2008 production of 56.0 thousand barrels per day. Natural gas liquids production for 2009 was a record 20.6 thousand barrels per day, a 32% increase from 2008 production of 15.6 thousand barrels per day.
The average realized gas price for 2009 was $7.13 per Mcf, 9% lower than the 2008 average price of $7.81 per Mcf. The average oil price for the year was $107.65 per barrel, a 23% increase from the 2008 average price of $87.59 per barrel. Natural gas liquids averaged $30.03 per barrel, or 38% lower than the 2008 average of $48.76 per barrel.
XTO Energy Inc. is a domestic energy producer engaged in the acquisition, development and discovery of quality, long-lived oil and natural gas properties in the United States.
(1) Adjusted earnings and operating cash flow are non-GAAP financial measures. See the end of this release for further explanation and reconciliation of these measures.
Contacts: |
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Louis G. Baldwin |
Gary D. Simpson |
Thomas E. Covington |
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Executive Vice President |
Senior Vice President |
Vice President |
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& Chief Financial Officer |
Investor Relations & Finance |
Investor Relations |
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XTO Energy Inc. |
XTO Energy Inc. |
XTO Energy Inc. |
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817/870-2800 |
817/870-2800 |
817/870-2800 |
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Statements made in this news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in the Company's filings with the Securities and Exchange Commission, which are incorporated by this reference as though fully set forth herein.
XTO ENERGY INC.
Consolidated Income Statements
(in millions, except production, per share and per unit data)
Three Months Ended Year Ended
December 31, December 31,
-------------- --------------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
REVENUES
Gas and natural gas liquids $1,663 $1,395 $6,322 $5,728
Oil and condensate 658 498 2,605 1,796
Gas gathering, processing and
marketing 16 65 125 168
Other 5 3 12 3
--------- --------- --------- ---------
Total Revenues 2,342 1,961 9,064 7,695
--------- --------- --------- ---------
EXPENSES
Production 248 272 999 942
Taxes, transportation and other 176 149 678 703
Exploration (a) 13 26 77 88
Depreciation, depletion and
amortization (b) 786 731 3,079 2,025
Accretion of discount in asset
retirement obligation 10 10 40 31
Gas gathering and processing 32 31 124 101
General and administrative (c) 81 121 356 382
Derivative fair value (gain)
loss (d) 7 (88) 24 (85)
--------- --------- --------- ---------
Total Expenses 1,353 1,252 5,377 4,187
--------- --------- --------- ---------
OPERATING INCOME 989 709 3,687 3,508
--------- --------- --------- ---------
OTHER EXPENSE
Interest expense, net (e) 136 157 524 482
--------- --------- --------- ---------
INCOME BEFORE INCOME TAX 853 552 3,163 3,026
--------- --------- --------- ---------
INCOME TAX
Current (f) (5) (15) 333 140
Deferred 321 216 811 974
--------- --------- --------- ---------
Total Income Tax Expense 316 201 1,144 1,114
--------- --------- --------- ---------
NET INCOME $537 $351 $2,019 $1,912
========= ========= ========= =========
EARNINGS PER COMMON SHARE (g)
Basic $0.92 $0.61 $3.48 $3.58
========= ========= ========= =========
Diluted $0.92 $0.61 $3.46 $3.54
========= ========= ========= =========
Average Daily Production
Gas (Mcf) 2,367,289 2,165,959 2,342,488 1,905,443
Natural Gas Liquids (Bbls) 21,159 15,434 20,560 15,624
Oil (Bbls) 64,563 63,545 66,297 56,025
Natural Gas Equivalents
(Mcfe) 2,881,618 2,639,831 2,863,631 2,335,336
Average Sales Prices (h)
Gas (per Mcf) $7.29 $6.79 $7.13 $7.81
Natural Gas Liquids (per Bbl) $39.07 $29.46 $30.03 $48.76
Oil (per Bbl) $110.85 $85.19 $107.65 $87.59
Natural Gas Equivalents
(per Mcfe) $8.76 $7.79 $8.54 $8.80
XTO ENERGY INC.
Consolidated Statements of Cash Flows
(in millions) Three Months Ended Year Ended
December 31, December 31,
----------------- -------------------
2009 2008 2009 2008
------- ------- -------- --------
(Unaudited) (Unaudited)
OPERATING ACTIVITIES
Net income $537 $351 $2,019 $1,912
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation, depletion and
amortization 786 731 3,079 2,025
Accretion of discount in
asset retirement obligation 10 10 40 31
Non-cash incentive
compensation 28 60 137 170
Dry hole expense 9 15 44 22
Deferred income tax 321 216 811 974
Non-cash derivative fair
value (gain) loss 8 (61) 130 (72)
Gain on extinguishment of
debt - - (17) -
Other non-cash items (12) (10) (24) 2
Changes in operating assets and
liabilities net of the effects
of acquisition of
corporation(1) (973) 173 (265) 171
------ ------ ------- ------
Cash Provided by Operating
Activities 714 1,485 5,954 5,235
------ ------ ------- ------
INVESTING ACTIVITIES
Proceeds from sale of property
and equipment - 24 3 24
Property acquisitions, including
acquisition of corporation (65) (835) (264) (8,456)
Development costs, capitalized
exploration costs
and dry hole expense (625) (1,167) (3,190) (3,661)
Other property and asset
additions (113) (276) (606) (913)
------ ------ ------- ------
Cash Used by Investing
Activities (803) (2,254) (4,057) (13,006)
------ ------ ------- ------
FINANCING ACTIVITIES
Proceeds from long-term debt 1,684 6,079 7,730 19,560
Payments on long-term debt (1,582) (5,239) (9,183) (14,250)
Dividends (72) (69) (287) (250)
Debt costs - - (2) (32)
Net proceeds from common stock
offerings - - - 2,612
Proceeds from exercise of
stock options and warrants 14 - 23 23
Payments upon exercise of
stock options (20) - (23) (70)
Excess tax benefit on exercise
of stock options
or vesting of stock awards 15 - 20 64
Other, primarily increase
(decrease) in cash overdrafts 35 4 (191) 139
------ ------ ------- ------
Cash Provided (Used) by
Financing Activities 74 775 (1,913) 7,796
------ ------ ------- ------
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (15) 6 (16) 25
Cash and Cash Equivalents,
Beginning of Period 24 19 25 -
------ ------ ------- ------
Cash and Cash Equivalents, End of
Period $9 $25 $9 $25
====== ====== ======= ======
(1) Changes in Operating Assets
and Liabilities
Accounts receivable $(151) $219 $258 $(151)
Other current assets (121) (91) (71) (32)
Other operating assets
and liabilities (4) (2) (21) (7)
Current liabilities 7 (406) 22 (92)
Change in current assets
from early settlement
of hedges, net of
amortization (704) 453 (453) 453
------ ------ ------- ------
$(973) $173 $(265) $171
====== ====== ======= ======
XTO ENERGY INC.
Consolidated Balance Sheets
(in millions, except shares) December 31, December 31,
2009 2008
------------ ------------
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $9 $25
Accounts receivable, net 965 1,217
Derivative fair value 1,222 2,735
Current income tax receivable 170 57
Other 182 224
---------- ----------
Total Current Assets 2,548 4,258
---------- ----------
Property and Equipment, at cost -
successful efforts method:
Proved properties 34,180 30,994
Unproved properties 3,691 3,907
Other 2,810 2,239
---------- ----------
Total Property and Equipment 40,681 37,140
Accumulated depreciation, depletion
and amortization (8,747) (5,859)
---------- ----------
Net Property and Equipment 31,934 31,281
---------- ----------
Other Assets:
Derivative fair value 68 1,023
Acquired gas gathering contracts,
net of accumulated amortization 97 105
Goodwill 1,475 1,447
Other 133 140
---------- ----------
Total Other Assets 1,773 2,715
---------- ----------
TOTAL ASSETS $36,255 $38,254
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $1,482 $1,912
Payable to royalty trusts 28 13
Current maturities of long-term debt 250 -
Derivative fair value 167 35
Deferred income tax payable 342 940
Other 32 30
---------- ----------
Total Current Liabilities 2,301 2,930
---------- ----------
Long-term Debt 10,237 11,959
---------- ----------
Other Liabilities:
Derivative fair value 6 -
Deferred income taxes payable 5,522 5,200
Asset retirement obligation 783 735
Other 80 83
---------- ----------
Total Other Liabilities 6,391 6,018
---------- ----------
Commitments and Contingencies
Stockholders' Equity:
Common stock ($.01 par value,
1,000,000,000 shares authorized,
589,361,021 and 585,094,847 shares issued) 6 6
Additional paid-in capital 8,471 8,315
Treasury stock, at cost (6,345,697 and
5,563,247 shares) (177) (147)
Retained earnings 8,317 6,588
Accumulated other comprehensive
income (loss) 709 2,585
---------- ----------
Total Stockholders' Equity 17,326 17,347
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $36,255 $38,254
========== ==========
(a) Includes geological and geophysical costs, as well as dry hole costs
of $9 million in the three-month 2009 period and $44 million for the
year 2009, and $15 million in the three-month 2008 period and $22
million for the year 2008.
(b) Includes impairment of proved properties of $128 million in both the
three-month and twelve-month 2008 periods.
(c) Includes non-cash incentive award compensation of $28 million in the
three-month 2009 period and $137 million for the year 2009, and
$60 million in the three-month 2008 period and $170 million for the
year 2008.
(d) The derivative fair value (gain) loss comprises the change in fair
value of the following derivative financial instruments not providing
effective hedges (in millions):
Three Months Ended Year Ended
December 31, December 31,
-------------- --------------
2009 2008 2009 2008
----- ----- ----- -----
Other non-hedge derivatives $11 $(79) $49 $(84)
Ineffective portion of hedge
derivatives (4) (9) (25) (1)
----- ----- ----- -----
Total derivative fair value
(gain) loss $7 $(88) $24 $(85)
===== ===== ===== =====
(e) Net of capitalized interest of $10 million in the three-month 2009
period and $42 million for the year 2009, and $13 million in the
three-month 2008 period and $39 million for the year 2008. Also
includes gain on extinguishment of debt of $17 million for the year
2009.
(f) The current income tax provision generally exceeds cash tax expense by
the benefit realized upon exercise of stock options or vesting of
stock awards in excess of amounts expensed in the financial
statements. This benefit, which is recorded in additional paid-in
capital, was $15 million in the three-month 2009 period, $20 million
for the year 2009 and $69 million for the year 2008. For the three-
month 2008 period, the current income tax provision was less than cash
tax expense by $2 million.
(g) The following reconciles earnings and shares used in the computation
of basic and diluted earnings per common share (in millions, except
per share data):
Three Months Ended December 31,
---------------------------------------------------------
2009 2008
----------------------------- ---------------------------
Earnings Earnings
per per
Earnings Shares Share Earnings Shares Share
-------- ------ ------- -------- ------ -------
Total $537 581.0 $351 577.8
Attributable to
participating
securities (4) (4.6) (2) (3.4)
--- ---- --- ----
Basic $533 576.4 $0.92 $349 574.4 $0.61
===== =====
Effect of dilutive
securities:
Stock options - 3.6 - 1.4
Warrants - 1.2 - 1.0
--- --- --- ---
Diluted $533 581.2 $0.92 $349 576.8 $0.61
==== ===== ===== ==== ===== =====
Year Ended December 31,
-------------------------------------------------------
2009 2008
---------------------------- -------------------------
Earnings Earnings
per per
Earnings Shares Share Earnings Shares Share
-------- ------ ------- -------- ------ -------
Total $2,019 580.2 $1,912 534.4
Attributable to
participating
securities (16) (4.6) (10) (2.8)
--- ---- --- ----
Basic $2,003 575.6 $3.48 $1,902 531.6 $3.58
===== =====
Effect of dilutive
securities:
Stock options - 2.7 - 4.4
Warrants - 1.1 - 1.5
--- --- --- ---
Diluted $2,003 579.4 $3.46 $1,902 537.5 $3.54
====== ===== ===== ====== ===== =====
Effective January 1, 2009, we adopted the authoritative guidance for
earnings per share as it relates to determining whether instruments
granted in share-based payment transactions are participating
securities. As a result of adoption, we retrospectively adjusted the
calculation of our 2008 earnings per share on a basis consistent with
2009. The previously reported earnings per share for fourth quarter
2008 were $0.61 basic and $0.61 diluted and for the year 2008 were
$3.60 basic and $3.56 diluted.
(h) Average sales prices include realized gains and losses upon cash
settlement of hedge derivatives.
Realized gains and losses on non-hedge derivatives and on the
ineffective portion of hedge derivatives are recorded as a component
of derivative fair value (gain) loss (see (d) above). These non-hedge
and ineffective derivative gains and losses are primarily related to
certain of our crude oil swap agreements that did not qualify for
hedge accounting, and the timing of entering basis swap agreements and
designating them as hedges associated with NYMEX swaps. Had realized
non-hedge and ineffective gains and losses, attributable to fourth
quarter and year-end production, been recorded as gas, natural gas
liquids and oil revenue, the average gas, natural gas liquids and oil
prices would have been:
Three Months Ended Year Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
------- ------ ------ -----
Gas (per Mcf) $7.37 $6.82 $7.21 $7.80
Natural gas liquids (per Bbl) 39.07 29.46 30.03 48.83
Oil (per Bbl) 108.07 88.71 109.10 88.60
Non-GAAP Financial Measures
Adjusted Earnings
Adjusted earnings, a non-GAAP financial measure, excludes certain items
that management believes affect the comparability of operating results.
The Company discloses adjusted earnings as a useful adjunct to GAAP net
income because:
– Management uses adjusted earnings to evaluate the Company's operational
trends and performance relative to other oil and gas producing
companies.
– Adjusted earnings are more comparable to earnings estimates provided by
securities analysts.
– Items excluded generally are items whose timing or amount cannot be
reasonably estimated. Accordingly, any guidance provided by the
Company generally excludes information regarding these types of items.
The following reconciles GAAP net income to adjusted earnings:
(in millions, except Three Months Ended Year Ended
per share data) December 31, December 31,
--------------- ----------------
(Unaudited) 2009 2008 2009 2008
---- ---- ---- ----
Net income $537 $351 $2,019 $1,912
Adjustments, net of tax:
Non-cash derivative fair value
(gain) loss 5 (39) 83 (46)
Gain on extinguishment of debt - 81 (11) 81
--- --- --- ---
Adjusted earnings $542 $393 $2,091 $1,947
==== ==== ====== ======
Adjusted earnings per common share:
Basic $0.93 $0.68 $3.60 $3.64
===== ===== ===== =====
Diluted $0.93 $0.68 $3.58 $3.60
===== ===== ===== =====
Operating Cash Flow
Operating cash flow, a non-GAAP financial measure, is defined as cash
provided by operating activities before changes in operating assets and
liabilities, exploration expense and significant cash flow effects of
earnings adjustments. Because of these adjustments, this cash flow
statistic is different from cash provided by operating activities, as
disclosed under GAAP. Management believes operating cash flow is a better
liquidity indicator for oil and gas producers because of the adjustments
made to cash provided by operating activities, explained as follows:
– Adjustment for changes in operating assets and liabilities eliminates
fluctuations primarily related to the timing of cash receipts and
disbursements, which can vary from period-to-period because of
conditions the Company cannot control (for example, the day of the week
on which the last day of the period falls), and results in attributing
cash flow to operations of the period that provided the cash flow.
– Adjustment for exploration expense is to provide an amount comparable
to operating cash flow for full cost companies and to eliminate the
effect of a discretionary expenditure that is part of the Company's
capital budget.
– Adjustment for the significant cash flow effects of earnings
adjustments (see "Adjusted Earnings" above) so that operating cash is
reported on a basis comparable to adjusted earnings.
Management uses operating cash flow not only for measuring the Company's
cash flow and liquidity, but also in evaluating the Company against other
oil and gas producing companies and valuing potential producing property
acquisitions.
The following reconciles cash provided by operating activities, the GAAP
cash flow measure, to operating cash flow:
Three Months Ended Year Ended
(in millions) December 31, December 31,
--------------- --------------
(Unaudited) 2009 2008 2009 2008
---- ---- ---- ----
Cash Provided by Operating
Activities $714 $1,485 $5,954 $5,235
Changes in operating assets and
liabilities 973 (173) 265 (171)
Exploration expense,
excluding dry hole expense 4 11 33 66
--- --- --- ---
Operating Cash Flow $1,691 $1,323 $6,252 $5,130
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SOURCE XTO Energy Inc.
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