Coterra Energy Inc. (NYSE: CTRA) (“Coterra” or the
“Company”) today reported first-quarter 2023 financial and
operating results. Thomas E. Jorden, Chairman, Chief Executive
Officer and President, commented, “Coterra delivered strong first
quarter results, driven by solid execution, and is well positioned
to meet or exceed 2023 guidance. Our operating teams continue to
generate competitive returns across each of our three regions.
Coterra’s portfolio, with its equal weighting to both liquids and
natural gas, provides numerous benefits to our Company and
shareholders by delivering a more consistent cash flow profile
through commodity price cycles. As we look ahead, Coterra will
remain disciplined and focused on value creation through
consistent, profitable growth.”
First-Quarter 2023 Highlights
- Net Income (GAAP) totaled $677 million, or $0.88 per share.
Adjusted Net Income (non-GAAP) was $661 million, or $0.87 per
share.
- Cash Flow From Operating Activities (GAAP) totaled $1,494
million. Discretionary Cash Flow (non-GAAP) totaled $1,039
million.
- Cash capital expenditures for drilling, completion and other
fixed asset additions (GAAP) totaled $483 million. Accrued capital
expenditures totaled $569 million, in line with our 1H23-weighted
capital program.
- Free Cash Flow (non-GAAP) equaled $556 million.
- Total equivalent production of 635 MBoepd (thousand barrels of
oil equivalent per day), exceeded the high-end of guidance, driven
by strong well performance and improved cycle times. Oil production
averaged 92.2 MBopd (thousand barrels of oil per day), exceeding
the high-end of guidance. Natural gas production averaged 2,757
MMcfpd (million cubic feet per day), exceeding the high-end of
guidance.
- Realized average prices:
- Oil: $74.03 per barrel (Bbl), excluding the effect of commodity
derivatives, and $74.09 per Bbl of oil, including the effect of
commodity derivatives
- Natural Gas: $3.31 per thousand cubic feet (Mcf), excluding the
effect of commodity derivatives, and $3.72 per Mcf of natural gas,
including the effect of commodity derivatives
- Natural Gas Liquids (NGLs): $23.66 per barrel of natural gas
liquids
First-Quarter 2023 Shareholder Return Highlights
Jorden noted, “Based on first quarter results, Coterra will
return $420 million to shareholders, which equals 76% of the
company’s Free Cash Flow. The return will include $152 million from
our recently increased base dividend ($0.20 per quarter, $0.80
annum) and $268 million via share buybacks. We reiterate our
commitment to return 50%+ of Free Cash Flow to shareholders, with
an emphasis on the base dividend and buybacks, in the
near-term.”
- On May 3, 2023, Coterra's Board of Directors (the "Board")
approved a quarterly base dividend of $0.20 per share, which will
be paid on June 9, 2023 to holders of record on May 26, 2023.
- During the quarter, the Company repurchased 11 million shares
for $268 million, averaging $24.36 per share and leaving $1,732
million remaining on the $2.0 billion share repurchase
authorization as of March 31, 2023.
Guidance Update and Activity Outlook:
2023 cash flow guidance updates include:
- Estimate full-year 2023 Discretionary Cash Flow of
approximately $3.6 billion, at recent strip prices
- 2023 capital budget remains unchanged at $2.0-2.2 billion
(accrued); see potential for 2H23 deflation
- Estimate 2023 Free Cash Flow of approximately $1.6 billion at
recent strip prices
- 2023 oil production range increasing by 1.0 MBopd, to 87.0-93.0
MBopd
2023 cash unit cost mid-point remains unchanged at
$7.35-$9.55/Boe, with a few updates listed below:
- LOE updated to $1.75-$2.25/Boe, with the high-end of the range
up by $0.25/Boe, driven primarily by a reclassification of expenses
from G&A to LOE
- Production tax expense updated to $1.20-$1.50/Boe, with both
ends of the range shifting downward by $0.10/Boe
- Exploration expense updated to $0.05-$0.15/Boe, with the
low-end of the range down by $0.05/Boe
Second-quarter 2023 production and capital guidance:
- Production volumes are expected to average between 620 and 650
MBoepd, with oil estimated between 88.5 and 91.5 MBopd and natural
gas volumes estimated between 2,750 and 2,850 MMcfpd.
- Expect capital expenditures (accrued) during 2Q23 between $510
– $570 million.
Coterra is currently running six rigs and two completion crews
in the Permian Basin, two rigs in the Anadarko Basin, and three
rigs and two completion crew in the Marcellus. The Company plans to
drop to 2 rigs and 1 crew in the Marcellus during 2Q23, as expected
in our original plan.
See “Supplemental non-GAAP Financial Measures” below for
descriptions of the above non-GAAP measures as well as
reconciliations of these measures to the associated GAAP
measures.
Strong Financial Position
Coterra maintains a strong financial position with an
investment-grade credit rating and approximately $2.5 billion of
liquidity. As of March 31, 2023, Coterra had total long-term debt
of $2.2 billion with a principal amount of $2.1 billion. The
Company exited the quarter with a cash balance of $973 million, no
debt outstanding under its new $1.5 billion five-year revolving
credit facility, and no near-term debt maturities. Coterra's net
debt to Adjusted EBITDAX ratio (non-GAAP) at March 31, 2023 was
0.2x.
Committed to Sustainability and ESG Leadership
Coterra is committed to environmental stewardship, sustainable
practices, and strong corporate governance. The Company's
sustainability report can be found under "A Sustainable Future" on
www.coterra.com. Coterra plans to publish its 2023 Sustainability
Report in the fourth-quarter of 2023.
First-Quarter 2023 Conference Call
Coterra will host a conference call tomorrow, Friday, May 5,
2023, at 9:00 AM CT (10:00 AM ET), to discuss first-quarter 2023
financial and operating results.
Conference Call Information
Date: May 5, 2023
Time: 10:00 AM ET / 9:00 AM CT
Dial-in (for callers in the U.S. and Canada): (888) 550-5424
International dial-in: (646) 960-0819
Conference ID: 3813676
The live audio webcast and related earnings presentation can be
accessed on the "Events & Presentations" page under the
"Investors" section of the Company's website at www.coterra.com.
The webcast will be archived and available at the same location
after the conclusion of the live event.
About Coterra Energy
Coterra is a premier exploration and production company based in
Houston, Texas with focused operations in the Permian Basin,
Marcellus Shale, and Anadarko Basin. We strive to be a leading
energy producer, delivering sustainable returns through the
efficient and responsible development of our diversified asset
base. Learn more about us at www.coterra.com.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains certain forward-looking statements
within the meaning of federal securities laws. Forward-looking
statements are not statements of historical fact and reflect
Coterra's current views about future events. Such forward-looking
statements include, but are not limited to, statements about
returns to shareholders, enhanced shareholder value, reserves
estimates, future financial and operating performance and goals and
commitment to sustainability and ESG leadership, strategic pursuits
and goals, including with respect to the publication of Coterra's
first Sustainability Report, and other statements that are not
historical facts contained in this press release. The words
"expect," "project," "estimate," "believe," "anticipate," "intend,"
"budget," "plan," "predict," "potential," "possible," "may,"
"should," "could," "would," "will," "strategy," "outlook" and
similar expressions are also intended to identify forward-looking
statements. We can provide no assurance that the forward-looking
statements contained in this press release will occur as projected
and actual results may differ materially from those projected.
Forward-looking statements are based on current expectations,
estimates and assumptions that involve a number of risks and
uncertainties that could cause actual results to differ materially
from those projected. These risks and uncertainties include,
without limitation, the risk that the combined businesses will not
be integrated successfully; the risk that the cost savings and any
other synergies from the Merger may not be fully realized or may
take longer to realize than expected; the volatility in commodity
prices for crude oil and natural gas; cost increases; supply chain
disruptions; the effect of future regulatory or legislative
actions, including the risk of new restrictions with respect to
well spacing, hydraulic fracturing, natural gas flaring,
seismicity, produced water disposal, or other oil and natural gas
development activities; disruption from the Merger making it more
difficult to maintain relationships with customers, employees or
suppliers; the diversion of management time on integration-related
issues; the potential effects of further developments to the
long-term impact of the COVID-19 pandemic and variants thereof on
Coterra’s business, financial condition and results of operations;
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 oil and natural gas; impacts of inflation; labor shortages and
economic disruption (including as a result of the pandemic or
geopolitical disruptions such as the war in Ukraine); determination
of reserves estimates, adjustments or revisions, including factors
impacting such determination such as commodity prices, well
performance, operating expenses and completion of Coterra's annual
PUD reserves process, as well as the impact on our financial
statements resulting therefrom; the presence or recoverability of
estimated reserves; the ability to replace reserves; environmental
risks; drilling and operating risks; exploration and development
risks; competition; the ability of management to execute its plans
to meet its goals; and other risks inherent in Coterra's
businesses. In addition, the declaration and payment of any future
dividends, whether regular base quarterly dividends, variable
dividends or special dividends, will depend on Coterra's financial
results, cash requirements, future prospects and other factors
deemed relevant by Coterra's Board. While the list of factors
presented here is considered representative, no such list should be
considered to be a complete statement of all potential 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. For
additional information about other factors that could cause actual
results to differ materially from those described in the
forward-looking statements, please refer to Coterra's annual report
on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and other filings with the SEC, which are available on
Coterra's website at www.coterra.com.
Forward-looking statements are based on the estimates and
opinions of management at the time the statements are made. Except
to the extent required by applicable law, Coterra does not
undertake any obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place
undue reliance on these forward-looking statements that speak only
as of the date hereof.
Operational Data
The tables below provide a summary of
production volumes, price realizations and operational activity by
region and units costs for the Company for the periods
indicated:
Three Months Ended
March 31,
2023
2022
PRODUCTION VOLUMES
Marcellus Shale
Natural gas (Bcf)
192.1
203.8
Equivalent production (MMBoe)
32.0
34.0
Daily equivalent production (MBoepd)
355.7
377.5
Permian Basin
Natural gas (Bcf)
38.5
37.5
Oil (MMBbl)
7.6
6.9
NGL (MMBbl)
5.8
4.8
Equivalent production (MMBoe)
19.8
18.0
Daily equivalent production (MBoepd)
219.6
199.8
Anadarko Basin
Natural gas (Bcf)
17.5
15.0
Oil (MMBbl)
0.7
0.6
NGL (MMBbl)
1.7
1.6
Equivalent production (MMBoe)
5.4
4.7
Daily equivalent production (MBoepd)
59.6
52.1
Total Company
Natural gas (Bcf)
248.1
256.4
Oil (MMBbl)
8.3
7.5
NGL (MMBbl)
7.5
6.5
Equivalent production (MMBoe)
57.2
56.7
Daily equivalent production (MBoepd)
635.0
629.9
AVERAGE SALES PRICE (excluding
hedges)
Marcellus Shale
Natural gas ($/Mcf)
$
3.71
$
4.27
Permian Basin
Natural gas ($/Mcf)
$
1.40
$
4.47
Oil ($/Bbl)
$
73.96
$
93.43
NGL ($/Bbl)
$
22.46
$
37.08
Anadarko Basin
Natural gas ($/Mcf)
$
3.14
$
4.87
Oil ($/Bbl)
$
74.75
$
93.80
NGL ($/Bbl)
$
27.63
$
40.21
Total Company
Natural gas ($/Mcf)
$
3.31
$
4.33
Oil ($/Bbl)
$
74.03
$
93.45
NGL ($/Bbl)
$
23.66
$
37.87
Three Months Ended
March 31,
2023
2022
AVERAGE SALES PRICE (including
hedges)
Total Company
Natural gas ($/Mcf)
$
3.72
$
4.17
Oil ($/Bbl)
$
74.09
$
76.15
NGL ($/Bbl)
$
23.66
$
37.87
Three Months Ended
March 31,
2023
2022
WELLS DRILLED(1)
Gross wells
Marcellus Shale
20
22
Permian Basin
39
29
Anadarko Basin
6
3
65
54
Net wells
Marcellus Shale
20.0
22.0
Permian Basin
16.6
18.0
Anadarko Basin
3.3
1.4
39.9
41.4
TURN IN LINES
Gross wells
Marcellus Shale
25
12
Permian Basin
45
31
Anadarko Basin
4
7
74
50
Net wells
Marcellus Shale
25.0
9.1
Permian Basin
23.1
15.9
Anadarko Basin
0.1
—
48.2
25.0
Three Months Ended
March 31,
2023
2022
AVERAGE UNIT COSTS ($/Boe)(2)
Direct operations
$
2.34
$
1.76
Transportation, processing and
gathering
4.13
4.11
Taxes other than income
1.50
1.34
Exploration
0.07
0.11
Depreciation, depletion and
amortization
6.45
6.35
General and administrative (excluding
stock-based compensation and merger-related expense)
0.93
1.06
Stock-based compensation
0.28
0.41
Merger-related expense
—
0.12
Interest expense
0.09
0.37
Severance expense
0.12
0.42
$
15.91
$
16.05
_______________________________________________________________________________
(1)
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.
(2)
Total unit costs may differ from the sum
of the individual costs due to rounding.
Derivatives
Information
As of March 31, 2023, the Company had the
following outstanding financial commodity derivatives:
2023
Natural Gas
Second Quarter
Third Quarter
Fourth Quarter
Waha gas collars
Volume (MMBtu)
8,190,000
8,280,000
8,280,000
Weighted average floor ($/MMBtu)
$
3.03
$
3.03
$
3.03
Weighted average ceiling ($/MMBtu)
$
5.39
$
5.39
$
5.39
NYMEX collars
Volume (MMBtu)
31,850,000
32,200,000
29,150,000
Weighted average floor ($/MMBtu)
$
4.07
$
4.07
$
4.03
Weighted average ceiling ($/MMBtu)
$
6.78
$
6.78
$
6.61
2023
Oil
Second Quarter
WTI oil collars
Volume (MBbl)
1,365
Weighted average floor ($/Bbl)
$
70.00
Weighted average ceiling ($/Bbl)
$
116.03
WTI Midland oil basis swaps
Volume (MBbl)
1,365
Weighted average differential ($/Bbl)
$
0.63
In April 2023, the Company entered into
the following financial commodity derivatives:
2023
Oil
Second Quarter
Third Quarter
Fourth Quarter
WTI oil collars
Volume (MBbl)
910
920
920
Weighted average floor ($/Bbl)
$
65.00
$
65.00
$
65.00
Weighted average ceiling ($/Bbl)
$
89.66
$
89.66
$
89.66
WTI Midland oil basis swaps
Volume (MBbl)
910
920
920
Weighted average differential ($/Bbl)
$
1.01
$
1.01
$
1.01
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
(In millions,
except per share amounts)
2023
2022
OPERATING REVENUES
Natural gas
$
822
$
1,111
Oil
615
699
NGL
177
245
Gain (loss) on derivative instruments
138
(391
)
Other
25
15
1,777
1,679
OPERATING EXPENSES
Direct operations
134
100
Transportation, processing and
gathering
236
233
Taxes other than income
86
76
Exploration
4
6
Depreciation, depletion and
amortization
369
360
General and administrative (excluding
stock-based compensation and merger-related costs)
53
53
Stock-based compensation(1)
16
23
Merger-related expense
—
7
Severance expense
7
24
905
882
Gain on sale of assets
5
2
INCOME FROM OPERATIONS
877
799
Interest expense
17
21
Interest income
(12
)
—
Income before income taxes
872
778
Income tax expense
195
170
NET INCOME
$
677
$
608
Earnings per share - Basic
$
0.88
$
0.75
Weighted-average common shares
outstanding
764
810
_______________________________________________________________________________
(1)
Includes the impact of our performance
share awards and restricted stock.
CONDENSED CONSOLIDATED BALANCE
SHEET (Unaudited)
(In
millions)
March 31, 2023
December 31,
2022
ASSETS
Current assets
$
2,005
$
2,211
Properties and equipment, net (successful
efforts method)
17,682
17,479
Other assets
452
464
$
20,139
$
20,154
LIABILITIES, REDEEMABLE PREFERRED STOCK
AND STOCKHOLDERS' EQUITY
Current liabilities
$
1,209
$
1,193
Long-term debt, net (excluding current
maturities)
2,176
2,181
Deferred income taxes
3,362
3,339
Other long term liabilities
741
771
Cimarex redeemable preferred stock
8
11
Stockholders’ equity
12,643
12,659
$
20,139
$
20,154
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
(In
millions)
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
677
$
608
Depreciation, depletion and
amortization
369
360
Deferred income tax expense
23
36
Gain on sale of assets
(5
)
(2
)
(Gain) loss on derivative instruments
(138
)
391
Net cash received (paid) in settlement of
derivative instruments
100
(171
)
Stock-based compensation and other
17
20
Income charges not requiring cash
(4
)
(10
)
Changes in assets and liabilities
455
90
Net cash provided by operating
activities
1,494
1,322
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures for drilling,
completion and other fixed asset additions
(483
)
(270
)
Capital expenditures for leasehold and
property acquisitions
(1
)
(1
)
Proceeds from sale of assets
5
2
Net cash used in investing activities
(479
)
(269
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Repayment of finance leases
(2
)
(2
)
Common stock repurchases
(268
)
(184
)
Dividends paid
(436
)
(456
)
Tax withholding on vesting of stock
awards
(1
)
(6
)
Capitalized debt issuance costs
(7
)
—
Cash received for stock option
exercises
—
6
Cash paid for conversion of redeemable
preferred stock
(1
)
—
Net cash used in financing activities
(715
)
(642
)
Net increase in cash, cash equivalents and
restricted cash
$
300
$
411
Supplemental Non-GAAP Financial Measures
(Unaudited)
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 below that compare 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.
Present Value of Investment (PVI10) is often used by management
as a return-on-investment metric and defined as the estimated net
present value (using a 10% discount rate) of the future net cash
flows from such reserves (for which we utilize certain assumptions
regarding future commodity prices and operating costs), adding back
our direct net costs incurred in drilling and adding back our
completing, constructing facilities, and flowing back such wells,
and then dividing that sum by our direct net costs incurred in
drilling, completing, constructing facilities, and flowing back
such wells.
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 management's belief that these non-GAAP
measures enable a user of financial information to understand the
impact of identified adjustments on reported results. Adjusted Net
Income is defined as net income plus gain and loss on sale of
assets, non-cash gain and loss on derivative instruments,
stock-based compensation expense, severance expense, merger-related
expenses and tax effect on selected items. Adjusted Earnings per
Share is defined as Adjusted Net Income divided by weighted-average
common shares outstanding. Additionally, we believe these measures
provide beneficial comparisons to similarly adjusted measurements
of prior periods and use these measures for that purpose. 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.
Three Months Ended
March 31,
(In millions,
except per share amounts)
2023
2022
As reported - net income
$
677
$
608
Reversal of selected items:
Gain on sale of assets
(5
)
(2
)
(Gain) loss on derivative
instruments(1)
(38
)
220
Stock-based compensation expense
16
23
Merger-related expense
—
7
Severance expense
7
24
Tax effect on selected items
4
(62
)
Adjusted net income
$
661
$
818
As reported - earnings per share
$
0.88
$
0.75
Per share impact of selected items
(0.01
)
0.26
Adjusted earnings per share
$
0.87
$
1.01
Weighted-average common shares
outstanding
764
810
_______________________________________________________________________________
(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.
Reconciliation of Discretionary Cash Flow
and Free Cash Flow
Discretionary Cash Flow is defined as cash flow from 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 available cash to
internally fund exploration and development activities, return
capital to shareholders through dividends and share repurchases,
and service debt and is used by our management for that purpose.
Discretionary Cash Flow is presented based on our management’s
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 or net income, as defined by GAAP, or as a measure of
liquidity.
Free Cash Flow is defined as Discretionary Cash Flow less cash
paid for capital expenditures. 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, and is used by our
management for that purpose. Free Cash Flow is presented based on
our management’s 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 or net income,
as defined by GAAP, or as a measure of liquidity.
Three Months Ended
March 31,
(In
millions)
2023
2022
Cash flow from operating activities
$
1,494
$
1,322
Changes in assets and liabilities
(455
)
(90
)
Discretionary cash flow
1,039
1,232
Cash paid for capital expenditures for
drilling, completion and other fixed asset additions
(483
)
(270
)
Free cash flow
$
556
$
962
Capital Expenditures
Three Months Ended
March 31,
(In
millions)
2023
2022
Cash paid for capital expenditures for
drilling, completion and other fixed asset additions
$
483
$
270
Capital expenditures for leasehold and
property acquisitions
1
1
Change in accrued capital costs
85
55
Capital expenditures
$
569
$
326
Reconciliation of Adjusted EBITDAX
Adjusted 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, stock-based compensation expense, severance expense
and merger-related expense. Adjusted EBITDAX is presented on our
management’s 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. Our
management uses Adjusted EBITDAX for that purpose. Adjusted 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.
Three Months Ended
March 31,
(In
millions)
2023
2022
Net income
$
677
$
608
Plus (less):
Interest expense, net
5
21
Income tax expense
195
170
Depreciation, depletion and
amortization
369
360
Exploration
4
6
Gain on sale of assets
(5
)
(2
)
Non-cash (gain) loss on derivative
instruments
(38
)
220
Merger-related expense
—
7
Severance expense
7
24
Stock-based compensation
16
23
Adjusted EBITDAX
$
1,230
$
1,437
Reconciliation of Net Debt
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 our management
believes this ratio is useful to investors in assessing our
leverage. Net Debt is calculated by subtracting cash and cash
equivalents from total debt. The Net Debt to Adjusted
Capitalization ratio is calculated by dividing Net Debt by the sum
of Net Debt and total stockholders’ equity. Net Debt and the Net
Debt to Adjusted Capitalization ratio are non-GAAP measures which
our management believes are also useful to investors when assessing
our leverage since we have the ability to and may decide to use a
portion of our cash and cash equivalents to retire debt. Our
management uses these measures for that purpose. Additionally, as
our planned expenditures are not expected to result in additional
debt, our management believes it is appropriate to apply cash and
cash equivalents to reduce debt in calculating the Net Debt to
Adjusted Capitalization ratio.
(In
millions)
March 31, 2023
December 31,
2022
Long-term debt, net
2,176
2,181
Stockholders’ equity
12,643
12,659
Total capitalization
$
14,819
$
14,840
Total debt
$
2,176
$
2,181
Less: Cash and cash equivalents
(973
)
(673
)
Net debt
$
1,203
$
1,508
Net debt
$
1,203
$
1,508
Stockholders’ equity
12,643
12,659
Total adjusted capitalization
$
13,846
$
14,167
Total debt to total capitalization
ratio
14.7
%
14.7
%
Less: Impact of cash and cash
equivalents
6.0
%
4.1
%
Net debt to adjusted capitalization
ratio
8.7
%
10.6
%
Reconciliation of Net Debt to Adjusted
EBITDAX
Total debt to net income is defined as total debt divided by net
income. Net debt to Adjusted EBITDAX is defined as net debt divided
by trailing twelve month Adjusted EBITDAX. Net debt to Adjusted
EBITDAX is a non-GAAP measure which our management believes is
useful to investors when assessing our credit position and
leverage.
(In
millions)
March 31, 2023
December 31,
2022
Total debt
$
2,176
$
2,181
Net income
4,134
4,065
Total debt to net income ratio
0.5 x
0.5 x
Net debt
$
1,203
$
1,508
Adjusted EBITDAX (Trailing twelve
months)
6,523
6,730
Net debt to Adjusted EBITDAX
0.2 x
0.2 x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005389/en/
Investor Contact Daniel Guffey - Vice President of
Finance, Planning & Analysis and Investor Relations
281.589.4875 Hannah Stuckey - Investor Relations Manager
281.589.4983
Coterra Energy (NYSE:CTRA)
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