Balancing dual priorities of debt reduction and
managing productive capacity
Southwestern Energy Company (NYSE: SWN) today announced
financial and operating results for the third quarter ended
September 30, 2023.
- Generated $45 million net income, $106 million adjusted net
income (non-GAAP), $513 million adjusted EBITDA (non-GAAP), $477
million net cash provided by operating activities and $23 million
free cash flow (non-GAAP)
- Quarter-end total debt $4.1 billion, down from $4.4 billion at
year-end 2022
- Reported total net production of 425 Bcfe, or 4.6 Bcfe per day,
including 4.0 Bcf per day of gas and 104 MBbls per day of
liquids
- Invested $454 million of capital and placed 23 wells to sales,
including 15 in Appalachia and 8 in Haynesville
- Released its 10th annual Corporate Responsibility report,
highlighting sustainability initiatives and progress, including a
17% reduction in Scope 1 GHG emissions intensity and a 20%
reduction in methane intensity in 2022 compared to 2021
“During the third quarter, the Company continued its disciplined
approach of optimizing free cash flow generation and activity. This
approach balances our dual priorities of debt reduction and
managing the productive capacity of the Company in the structurally
improving natural gas environment. As we look ahead to next year,
Southwestern Energy is well positioned with its deep inventory,
firm transportation portfolio and market access to benefit from the
expected growing demand from LNG facilities along the Gulf Coast,”
said Bill Way, Southwestern Energy President and Chief Executive
Officer.
Financial Results
For the three months ended
For the nine months ended
September 30,
September 30,
(in millions)
2023
2022
2023
2022
Net income (loss)
$
45
$
450
$
2,215
$
(1,052
)
Adjusted net income (non-GAAP)
$
106
$
360
$
547
$
1,175
Diluted earnings (loss) per share
$
0.04
$
0.40
$
2.01
$
(0.94
)
Adjusted diluted earnings per share
(non-GAAP)
$
0.10
$
0.32
$
0.50
$
1.05
Adjusted EBITDA (non-GAAP)
$
513
$
824
$
1,796
$
2,551
Net cash provided by operating
activities
$
477
$
797
$
2,039
$
2,196
Net cash flow (non-GAAP)
$
477
$
765
$
1,694
$
2,380
Total capital investments (1)
$
454
$
543
$
1,714
$
1,672
Free cash flow (deficit) (non-GAAP)
$
23
$
222
$
(20
)
$
708
(1)
Capital investments include a decrease of
$94 million and $33 million for the three months ended September
30, 2023 and 2022, respectively, and a decrease of $122 million and
an increase of $44 million for the nine months ended September 30,
2023 and 2022, respectively, relating to the change in accrued
expenditures between periods.
For the quarter ended September 30, 2023, Southwestern Energy
recorded net income of $45 million, or $0.04 per diluted share,
including a loss on mark-to-market of unsettled derivatives.
Excluding this and other one-time items, adjusted net income
(non-GAAP) was $106 million, or $0.10 per diluted share, and
adjusted EBITDA (non-GAAP) was $513 million. Net cash provided by
operating activities was $477 million, net cash flow (non-GAAP) was
$477 million and free cash flow (non-GAAP) was $23 million.
As of September 30, 2023, Southwestern Energy had total debt of
$4.1 billion and net debt to adjusted EBITDA (non-GAAP) of 1.6x. At
the end of the quarter, the Company had $388 million of borrowings
under its revolving credit facility and no outstanding letters of
credit. Subsequent to quarter end, the Company’s elected
commitments and borrowing base were reaffirmed as part of its
regularly scheduled fall redetermination at the elected $2.0
billion and $3.5 billion, respectively.
As indicated in the table below, third quarter 2023 weighted
average realized price was $2.05 per Mcfe, excluding the impact of
derivatives and net of $0.24 per Mcfe of transportation expenses.
Including derivatives, weighted average realized price for the
third quarter was down 21% from $3.06 per Mcfe in 2022 to $2.43 per
Mcfe in 2023 primarily due to lower commodity prices including a
69% decrease in NYMEX Henry Hub and a 10% decrease in WTI.
Realized Prices
For the three months ended
For the nine months ended
(includes transportation costs)
September 30,
September 30,
2023
2022
2023
2022
Natural Gas Price:
NYMEX Henry Hub price ($/MMBtu) (1)
$
2.55
$
8.20
$
2.69
$
6.77
Discount to NYMEX (2)
(0.89
)
(0.78
)
(0.59
)
(0.62
)
Average realized gas price, excluding
derivatives ($/Mcf)
$
1.66
$
7.42
$
2.10
$
6.15
Gain on settled financial basis
derivatives ($/Mcf)
0.13
0.10
0.01
0.06
Gain (loss) on settled commodity
derivatives ($/Mcf)
0.34
(4.71
)
0.23
(3.38
)
Average realized gas price, including
derivatives ($/Mcf)
$
2.13
$
2.81
$
2.34
$
2.83
Oil Price:
WTI oil price ($/Bbl) (3)
$
82.26
$
91.56
$
77.39
$
98.09
Discount to WTI (4)
(11.17
)
(7.22
)
(10.79
)
(7.39
)
Average realized oil price, excluding
derivatives ($/Bbl)
$
71.09
$
84.34
$
66.60
$
90.70
Average realized oil price, including
derivatives ($/Bbl)
$
56.60
$
49.06
$
57.21
$
52.29
NGL Price:
Average realized NGL price, excluding
derivatives ($/Bbl)
$
20.53
$
33.33
$
21.19
$
37.50
Average realized NGL price, including
derivatives ($/Bbl)
$
21.41
$
26.55
$
22.28
$
27.64
Percentage of WTI, excluding
derivatives
25
%
36
%
27
%
38
%
Total Weighted Average Realized
Price:
Excluding derivatives ($/Mcfe)
$
2.05
$
7.33
$
2.45
$
6.32
Including derivatives ($/Mcfe)
$
2.43
$
3.06
$
2.65
$
3.11
(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 September 30, 2023
was 425 Bcfe, of which 86% was natural gas, 12% NGLs and 2% oil.
Capital investments totaled $454 million for the third quarter of
2023 with 24 wells drilled, 25 wells completed and 23 wells placed
to sales.
For the three months ended
For the nine months ended
September 30,
September 30,
2023
2022
2023
2022
Production
Natural gas production (Bcf)
368
389
1,086
1,148
Oil production (MBbls)
1,310
1,173
4,169
3,806
NGL production (MBbls)
8,228
7,788
24,715
22,445
Total production (Bcfe)
425
443
1,259
1,306
Average unit costs per Mcfe
Lease operating expenses (1)
$
1.06
$
1.02
$
1.04
$
0.98
General & administrative expenses
(2)
$
0.10
$
0.08
$
0.10
$
0.08
Taxes, other than income taxes
$
0.15
$
0.17
$
0.15
$
0.15
Full cost pool amortization
$
0.78
$
0.66
$
0.77
$
0.65
(1)
Includes post-production costs such as
gathering, processing, fractionation and compression.
(2)
Excludes $27 million in merger-related
expenses for the nine months ended September 30, 2022.
Appalachia – In the third quarter, total production was
262 Bcfe, with NGL production of 90 MBbls per day and oil
production of 14 MBbls per day. The Company drilled 12 wells,
completed 15 wells and placed 15 wells to sales with an average
lateral length of 16,231 feet.
Haynesville – In the third quarter, total production was
163 Bcfe. There were 12 wells drilled, 10 wells completed and 8
wells placed to sales in the quarter with an average lateral length
of 9,082 feet.
E&P Division Results
For the three months ended
September 30, 2023
For the nine months ended
September 30, 2023
Appalachia
Haynesville
Appalachia
Haynesville
Natural gas production (Bcf)
205
163
597
489
Liquids production
Oil (MBbls)
1,303
6
4,146
21
NGL (MBbls)
8,226
2
24,707
7
Production (Bcfe)
262
163
770
489
Capital investments (in
millions)
Drilling and completions, including
workovers
$
181
$
187
$
619
$
838
Land acquisition and other
21
2
74
5
Capitalized interest and expense
31
19
91
58
Total capital investments
$
233
$
208
$
784
$
901
Gross operated well activity
summary
Drilled
12
12
51
42
Completed
15
10
58
49
Wells to sales
15
8
56
53
Total weighted average realized price
per Mcfe, excluding derivatives
$
1.91
$
2.28
$
2.46
$
2.43
Wells to sales summary
For the three months ended
September 30, 2023
Gross wells to sales
Average lateral length (ft)
Appalachia
Super Rich Marcellus
6
18,198
Rich Marcellus
5
12,791
Dry Gas Utica(1)
2
14,813
Dry Gas Marcellus
2
20,353
Haynesville
8
9,082
Total
23
(1)
Ohio Utica
Fourth Quarter 2023 Guidance
Based on current market conditions, Southwestern expects fourth
quarter production and price differentials to be within the
following ranges. Additionally, the Company updates full year oil
differential guidance to $10 to $13 per barrel discount to WTI.
PRODUCTION
For the quarter ended December
31, 2023
Gas production (Bcf)
344 – 361
Liquids (% of production)
~14.0%
Total (Bcfe)
400 – 420
PRICING
Natural gas discount to NYMEX including
transportation (1)
$0.58 – $0.70 per Mcf
Oil discount to West Texas Intermediate
(WTI) including transportation
$11.50 – $13.50 per Bbl
Natural gas liquids realization as a % of
WTI including transportation
22% – 30%
(1)
Includes impact of transportation costs
and expected $0.06 – $0.09 per Mcf gain in Q4 2023 from financial
basis hedges.
Conference Call
Southwestern Energy will host a conference call and webcast on
Friday, November 3, 2023 at 10:00 a.m. Central to discuss third
quarter 2023 results. To participate, dial US toll-free
877-883-0383, or international 412-902-6506 and enter access code
4941446. The conference call will webcast live at www.swn.com.
A replay will also be available on SWN’s website at www.swn.com
following the call.
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.swncrreport.com.
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 (including the number of rigs
and frac crews to be used), estimated reserves and inventory
duration, projected production and sales volume and growth rates,
projected commodity prices, basis and average differential, impact
of commodity prices on our business, projected average well costs,
generation of free cash flow, our return of capital strategy,
including the amount and timing of any redemptions, repayments or
repurchases of our common stock, outstanding debt securities or
other debt instruments, leverage targets, our ability to maintain
or improve our credit ratings, our ability to achieve our debt
reduction plan, leverage levels and financial profile, our hedging
strategy, our environmental, social and governance (ESG)
initiatives and our ability to achieve anticipated results of such
initiatives, expected benefits from acquisitions, potential
acquisitions, divestitures, potential divestitures 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, the costs and
results of drilling and operations, lack of availability of
drilling and production equipment and services, the ability to add
proved reserves in the future, 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, the quality of technical
data, cash flow and access to capital, the timing of development
expenditures, a change in our credit rating, an increase in
interest rates, our ability to achieve our debt reduction plan, our
ability to increase commitments under our revolving credit
facility, our hedging and other financial contracts, 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, including as a
result of financial or banking failures, 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,
divestitures, and strategic transactions, our ability to achieve
our GHG emission reduction goals and the costs associated
therewith, and any other factors described or referenced 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,
2022.
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
For the nine months ended
September 30,
September 30,
(in millions, except share/per share
amounts)
2023
2022
2023
2022
Operating Revenues:
Gas sales
$
627
$
2,884
$
2,323
$
7,061
Oil sales
94
100
281
349
NGL sales
169
260
523
842
Marketing
553
1,298
1,707
3,371
Other
—
(1
)
(4
)
(1
)
1,443
4,541
4,830
11,622
Operating Costs and Expenses:
Marketing purchases
545
1,289
1,693
3,366
Operating expenses
444
423
1,280
1,206
General and administrative expenses
46
41
133
120
Merger-related expenses
—
—
—
27
Depreciation, depletion and
amortization
338
298
979
861
Taxes, other than income taxes
63
76
189
198
1,436
2,127
4,274
5,778
Operating Income
7
2,414
556
5,844
Interest Expense:
Interest on debt
61
77
184
218
Other interest charges
3
3
9
10
Interest capitalized
(28
)
(30
)
(87
)
(89
)
36
50
106
139
Gain (Loss) on Derivatives
93
(1,903
)
1,811
(6,709
)
Loss on Early Extinguishment of
Debt
—
—
(19
)
(6
)
Other Income (Loss), Net
2
—
1
(1
)
Income (Loss) Before Income
Taxes
66
461
2,243
(1,011
)
Provision for Income Taxes:
Current
—
11
—
41
Deferred
21
—
28
—
21
11
28
41
Net Income (Loss)
$
45
$
450
$
2,215
$
(1,052
)
Earnings (Loss) Per Common
Share:
Basic
$
0.04
$
0.41
$
2.01
$
(0.94
)
Diluted
$
0.04
$
0.40
$
2.01
$
(0.94
)
Weighted Average Common Shares
Outstanding:
Basic
1,101,231,113
1,110,259,907
1,100,895,642
1,113,705,502
Diluted
1,104,027,634
1,112,522,861
1,102,867,675
1,113,705,502
SOUTHWESTERN ENERGY COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
December 31,
2023
2022
ASSETS
(in millions)
Current assets:
Cash and cash equivalents
$
26
$
50
Accounts receivable, net
602
1,401
Derivative assets
336
145
Other current assets
78
68
Total current assets
1,042
1,664
Natural gas and oil properties, using the
full cost method
37,349
35,763
Other
555
527
Less: Accumulated depreciation, depletion
and amortization
(26,381
)
(25,387
)
Total property and equipment, net
11,523
10,903
Operating lease assets
163
177
Long-term derivative assets
153
72
Other long-term assets
92
110
Total long-term assets
408
359
TOTAL ASSETS
$
12,973
$
12,926
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
1,317
$
1,835
Taxes payable
135
136
Interest payable
26
86
Derivative liabilities
219
1,317
Current operating lease liabilities
44
42
Other current liabilities
17
65
Total current liabilities
1,758
3,481
Long-term debt
4,114
4,392
Long-term operating lease liabilities
116
133
Long-term derivative liabilities
186
378
Other long-term liabilities
262
218
Total long-term liabilities
4,678
5,121
Commitments and contingencies
Equity:
Common stock, $0.01 par value;
2,500,000,000 shares authorized; issued 1,163,077,745 shares as of
September 30, 2023 and 1,161,545,588 shares as of December 31,
2022
12
12
Additional paid-in capital
7,185
7,172
Accumulated deficit
(324
)
(2,539
)
Accumulated other comprehensive income
(loss)
(9
)
6
Common stock in treasury, 61,614,693
shares as of September 30, 2023 and December 31, 2022
(327
)
(327
)
Total equity
6,537
4,324
TOTAL LIABILITIES AND EQUITY
$
12,973
$
12,926
SOUTHWESTERN ENERGY COMPANY
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
For the nine months ended
September 30,
(in millions)
2023
2022
Cash Flows From Operating
Activities:
Net income (loss)
$
2,215
$
(1,052
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, depletion and
amortization
979
861
Amortization of debt issuance costs
5
8
Deferred income taxes
28
—
(Gain) loss on derivatives, unsettled
(1,562
)
2,524
Stock-based compensation
7
4
Loss on early extinguishment of debt
19
6
Other
3
2
Change in assets and liabilities:
Accounts receivable
799
(602
)
Accounts payable
(362
)
506
Taxes payable
(2
)
28
Interest payable
(33
)
(22
)
Inventories
(15
)
(8
)
Other assets and liabilities
(42
)
(59
)
Net cash provided by operating
activities
2,039
2,196
Cash Flows From Investing
Activities:
Capital investments
(1,833
)
(1,623
)
Proceeds from sale of property and
equipment
123
15
Net cash used in investing activities
(1,710
)
(1,608
)
Cash Flows From Financing
Activities:
Payments on current portion of long-term
debt
—
(205
)
Payments on long-term debt
(437
)
(71
)
Payments on revolving credit facility
(3,044
)
(10,341
)
Borrowings under revolving credit
facility
3,182
10,061
Change in bank drafts outstanding
(50
)
62
Proceeds from exercise of common stock
options
—
7
Purchase of treasury stock
—
(100
)
Debt issuance/amendment costs
—
(14
)
Cash paid for tax withholding
(4
)
(4
)
Net cash used in financing activities
(353
)
(605
)
Decrease in cash and cash equivalents
(24
)
(17
)
Cash and cash equivalents at beginning of
year
50
28
Cash and cash equivalents at end of
period
$
26
$
11
Hedging Summary
A detailed breakdown of derivative financial instruments and
financial basis positions as of September 30, 2023, including the
remainder of 2023 and excluding those positions that settled in the
first, second and third quarters, 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 more information on the
Company’s commodity and basis protection.
Weighted Average Price per
MMBtu
Volume (Bcf)
Swaps
Sold Puts
Purchased Puts
Sold Calls
Natural gas
2023
Fixed price swaps
179
$
3.28
$
—
$
—
$
—
Two-way costless collars
32
—
—
2.88
3.29
Three-way costless collars
47
—
2.08
2.50
2.91
Total
258
2024
Fixed price swaps
528
$
3.54
$
—
$
—
$
—
Two-way costless collars
44
—
—
3.07
3.53
Three-way costless collars
77
—
2.46
3.19
3.99
Total
649
2025
Two-way costless collars
73
$
—
$
—
$
3.50
$
5.40
Three-way costless collars
106
—
2.50
3.75
5.69
Total
179
Natural gas financial basis
positions
Volume
Basis Differential
(Bcf)
($/MMBtu)
Q4 2023
Dominion South
33
$
(0.75
)
TCO
20
$
(0.61
)
TETCO M3
15
$
(0.18
)
Trunkline Zone 1A
3
$
(0.29
)
Total
71
$
(0.57
)
2024
Dominion South
46
$
(0.71
)
2025
Dominion South
9
$
(0.64
)
Call Options – Natural Gas
(Net)
Volume
Weighted Average Strike
Price
(Bcf)
($/MMBtu)
2023
15
$
2.97
2024
82
6.56
2025
73
7.00
2026
73
7.00
Total
243
Weighted Average Price per
Bbl
Volume (MBbls)
Swaps
Sold Puts
Purchased Puts
Sold Calls
Oil
2023
Fixed price swaps
733
$
67.34
$
—
$
—
$
—
Two-way costless collars
147
—
—
70.00
80.58
Three-way costless collars
291
—
34.36
46.05
55.96
Total
1,171
2024
Fixed price swaps
1,571
$
71.06
$
—
$
—
$
—
Two-way costless collars
512
—
—
70.00
85.63
Total
2,083
2025
Fixed price swaps
41
$
77.66
$
—
$
—
$
—
Ethane
2023
Fixed price swaps
2,254
$
10.99
$
—
$
—
$
—
2024
Fixed price swaps
3,429
$
10.84
$
—
$
—
$
—
Propane
2023
Fixed price swaps
1,782
$
30.44
$
—
$
—
$
—
2024
Fixed price swaps
3,254
$
31.78
$
—
$
—
$
—
2025
Fixed price swaps
63
$
26.46
$
—
$
—
$
—
Normal Butane
2023
Fixed price swaps
198
$
40.96
$
—
$
—
$
—
2024
Fixed price swaps
329
$
40.74
$
—
$
—
$
—
Natural Gasoline
2023
Fixed price swaps
171
$
63.74
$
—
$
—
$
—
2024
Fixed price swaps
329
$
64.37
$
—
$
—
$
—
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 (deficit), net debt, adjusted
net income, adjusted diluted earnings per share, adjusted EBITDA
and net debt to adjusted EBITDA, all of 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.
Three Months Ended September
30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Adjusted net income:
(in millions)
Net income (loss)
$
45
$
450
$
2,215
$
(1,052
)
Add back (deduct):
Merger-related expenses
—
—
—
27
(Gain) loss on unsettled derivatives
(1)
69
14
(1,562
)
2,524
Loss on early extinguishment of debt
—
—
19
6
Other (2)
3
—
10
1
Adjustments due to discrete tax items
(3)
6
(100
)
(488
)
285
Tax impact on adjustments
(17
)
(4)
353
(616
)
Adjusted net income
$
106
$
360
$
547
$
1,175
(1)
Includes ($4) million of non-performance
risk adjustment to derivative activities for the nine months ended
September 30, 2023, and ($2) million and $7 million of
non-performance risk adjustment to derivative activities for the
three and nine months ended September 30, 2022, respectively.
(2)
Includes $2 million and $7 million for the
three and nine months ended September 30, 2023, respectively, of
G&A related to the development of enterprise resource
technology, expensed in the period incurred per GAAP.
(3)
The Company’s 2023 income tax rate is
23.0% before the impacts of any valuation allowance.
Three Months Ended September
30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Adjusted diluted earnings per
share:
Diluted earnings (loss) per share
$
0.04
$
0.40
$
2.01
$
(0.94
)
Add back (deduct):
Merger-related expenses
—
—
—
0.02
(Gain) loss on unsettled derivatives
(1)
0.07
0.01
(1.42
)
2.27
Loss on early extinguishment of debt
—
—
0.02
0.00
Other (2)
0.00
—
0.01
0.00
Adjustments due to discrete tax items
(3)
0.01
(0.09
)
(0.44
)
0.25
Tax impact on adjustments
(0.02
)
(0.00
)
0.32
(0.55
)
Adjusted diluted earnings per share
$
0.10
$
0.32
$
0.50
$
1.05
(1)
Includes ($4) million of non-performance
risk adjustment to derivative activities for the nine months ended
September 30, 2023, and ($2) million and $7 million of
non-performance risk adjustment to derivative activities for the
three and nine months ended September 30, 2022, respectively.
(2)
Includes $2 million and $7 million for the
three and nine months ended September 30, 2023, respectively, of
G&A related to the development of enterprise resource
technology, expensed in the period incurred per GAAP.
(3)
The Company’s 2023 income tax rate is
23.0% before the impacts of any valuation allowance.
Three Months Ended September
30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net cash flow:
(in millions)
Net cash provided by operating
activities
$
477
$
797
$
2,039
$
2,196
Add back (deduct):
Changes in operating assets and
liabilities
—
(32
)
(345
)
157
Merger-related expenses
—
—
—
27
Net cash flow
$
477
$
765
$
1,694
$
2,380
Three Months Ended September
30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Free cash flow (deficit):
(in millions)
Net cash flow
$
477
$
765
$
1,694
$
2,380
Subtract:
Total capital investments
(454
)
(543
)
(1,714
)
(1,672
)
Free cash flow (deficit)
$
23
$
222
$
(20
)
$
708
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Adjusted EBITDA:
(in millions)
Net income (loss)
$
45
$
450
$
2,215
$
(1,052
)
Add back (deduct):
Interest expense
36
50
106
139
Income tax expense
21
11
28
41
Depreciation, depletion and
amortization
338
298
979
861
Merger-related expenses
—
—
—
27
(Gain) loss on unsettled derivatives
(1)
69
14
(1,562
)
2,524
Loss on early extinguishment of debt
—
—
19
6
Other
2
—
4
1
Stock-based compensation expense
2
1
7
4
Adjusted EBITDA
$
513
$
824
$
1,796
$
2,551
(1)
Includes ($4) million of non-performance
risk adjustment to derivative activities for the nine months ended
September 30, 2023, and ($2) million and $7 million of
non-performance risk adjustment to derivative activities for the
three and nine months ended September 30, 2022, respectively.
12 Months Ended September 30,
2023
Adjusted EBITDA:
(in millions)
Net income
$
5,116
Add back (deduct):
Interest expense
151
Income tax expense
38
Depreciation, depletion and
amortization
1,292
Gain on unsettled derivatives (1)
(4,110
)
Loss on early extinguishment of debt
27
Stock-based compensation expense
7
Other
7
Adjusted EBITDA
$
2,528
(1)
Includes ($11) million of non-performance
risk adjustment for the twelve months ended September 30, 2023.
September 30, 2023
Net debt:
(in millions)
Total debt (1)
$
4,131
Subtract:
Cash and cash equivalents
26
Net debt
$
4,105
(1)
Does not include $17 million of
unamortized debt premium and issuance expense.
September 30, 2023
Net debt to Adjusted EBITDA:
(in millions)
Net debt
$
4,105
Adjusted EBITDA
$
2,528
Net debt to Adjusted EBITDA
1.6x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102519816/en/
Investor Contact Brittany Raiford Vice President,
Investor Relations (832) 796-7906 brittany_raiford@swn.com
Southwestern Energy (NYSE:SWN)
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