SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2004
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
Commission file number 1-10447
CABOT OIL & GAS CORPORATION
(Exact name of registrant as specified in its charter)
| DELAWARE | 04-3072771 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
1200 Enclave Parkway, Houston, Texas 77077
(Address of principal executive offices including Zip Code)
(281) 589-4600
(Registrant’s telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨
As of August 5, 2004, there were 33,047,521 shares of Common Stock, Par Value $.10 Per Share, outstanding.
INDEX TO FINANCIAL STATEMENTS
2
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In Thousands, Except Per Share Amounts)
| Three-Months Ended June 30, |
Six-Months Ended June 30, |
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| 2004 |
2003 |
2004 |
2003 |
||||||||||||
| NET OPERATING REVENUES |
|||||||||||||||
| Natural Gas Production |
$ | 90,028 | $ | 80,576 | $ | 180,407 | $ | 158,287 | |||||||
| Brokered Natural Gas |
15,628 | 23,370 | 47,187 | 55,220 | |||||||||||
| Crude Oil and Condensate |
13,552 | 20,550 | 26,319 | 43,642 | |||||||||||
| Other |
534 | 2,260 | 2,433 | 5,523 | |||||||||||
| 119,742 | 126,756 | 256,346 | 262,672 | ||||||||||||
| OPERATING EXPENSES |
|||||||||||||||
| Brokered Natural Gas Cost |
13,596 | 21,539 | 42,317 | 49,800 | |||||||||||
| Direct Operations - Field and Pipeline |
13,114 | 13,825 | 25,192 | 24,751 | |||||||||||
| Exploration |
9,568 | 15,663 | 25,712 | 29,054 | |||||||||||
| Depreciation, Depletion and Amortization |
24,622 | 23,764 | 48,851 | 47,271 | |||||||||||
| Impairment of Unproved Properties |
2,728 | 2,337 | 5,311 | 4,674 | |||||||||||
| Impairment of Long-Lived Assets (Note 2) |
— | — | — | 87,926 | |||||||||||
| General and Administrative |
9,582 | 6,172 | 16,298 | 12,767 | |||||||||||
| Taxes Other Than Income |
9,921 | 8,651 | 20,023 | 18,875 | |||||||||||
| 83,131 | 91,951 | 183,704 | 275,118 | ||||||||||||
| Gain (Loss) on Sale of Assets |
(172 | ) | 45 | (113 | ) | 605 | |||||||||
| INCOME (LOSS) FROM OPERATIONS |
36,439 | 34,850 | 72,529 | (11,841 | ) | ||||||||||
| Interest Expense and Other |
5,445 | 5,952 | 10,822 | 11,577 | |||||||||||
| Income (Loss) Before Income Taxes and Cumulative Effect of Accounting Change |
30,994 | 28,898 | 61,707 | (23,418 | ) | ||||||||||
| Income Tax Expense (Benefit) |
11,676 | 10,994 | 23,378 | (8,946 | ) | ||||||||||
| NET INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE |
19,318 | 17,904 | 38,329 | (14,472 | ) | ||||||||||
| CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 9) |
— | — | — | (6,847 | ) | ||||||||||
| NET INCOME (LOSS) |
$ | 19,318 | $ | 17,904 | $ | 38,329 | $ | (21,319 | ) | ||||||
| Basic Earnings (Loss) Per Share - Before Accounting Change |
$ | 0.59 | $ | 0.56 | $ | 1.18 | $ | (0.45 | ) | ||||||
| Diluted Earnings (Loss) Per Share - Before Accounting Change |
$ | 0.59 | $ | 0.55 | $ | 1.17 | $ | (0.45 | ) | ||||||
| Basic Earnings (Loss) Per Share - Accounting Change |
$ | — | $ | — | $ | — | $ | (0.22 | ) | ||||||
| Diluted Earnings (Loss) Per Share - Accounting Change |
$ | — | $ | — | $ | — | $ | (0.22 | ) | ||||||
| Basic Earnings (Loss) Per Share |
$ | 0.59 | $ | 0.56 | $ | 1.18 | $ | (0.67 | ) | ||||||
| Diluted Earnings (Loss) Per Share |
$ | 0.59 | $ | 0.55 | $ | 1.17 | $ | (0.67 | ) | ||||||
| Average Common Shares Outstanding |
32,526 | 31,980 | 32,462 | 31,909 | |||||||||||
| Diluted Common Shares (Note 5) |
32,929 | 32,477 | 32,862 | 31,909 | |||||||||||
The accompanying notes are an intergral part of these condensed consolidated financial statements.
- 3 -
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In Thousands, Except Share Amounts)
| June 30, 2004 |
December 31, 2003 |
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| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and Cash Equivalents |
$ | 21,429 | $ | 724 | ||||
| Accounts Receivable |
89,495 | 87,425 | ||||||
| Inventories |
9,519 | 18,241 | ||||||
| Deferred Income Taxes |
30,709 | 21,935 | ||||||
| Other |
16,023 | 15,006 | ||||||
| Total Current Assets |
167,175 | 143,331 | ||||||
| Properties and Equipment, Net (Successful Efforts Method) |
949,310 | 895,955 | ||||||
| Deferred Income Taxes |
14,266 | 8,920 | ||||||
| Other Assets |
6,672 | 6,850 | ||||||
| $ | 1,137,423 | $ | 1,055,056 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current Liabilities |
||||||||
| Accounts Payable |
$ | 93,863 | $ | 84,943 | ||||
| Accrued Liabilities |
92,746 | 71,584 | ||||||
| Total Current Liabilities |
186,609 | 156,527 | ||||||
| Long-Term Debt |
270,000 | 270,000 | ||||||
| Deferred Income Taxes |
219,229 | 208,955 | ||||||
| Other Liabilities |
69,566 | 54,377 | ||||||
| Commitments and Contingencies (Note 6) |
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| Stockholders’ Equity |
||||||||
| Common Stock: |
||||||||
| Authorized – 80,000,000 Shares of $.10 Par Value Issued and Outstanding – 33,022,845 Shares and 32,538,255 Shares in 2004 and 2003, Respectively |
3,303 | 3,254 | ||||||
| Additional Paid-in Capital |
376,076 | 361,699 | ||||||
| Retained Earnings |
63,490 | 27,763 | ||||||
| Accumulated Other Comprehensive Loss |
(41,124 | ) | (23,135 | ) | ||||
| Less Treasury Stock, at Cost: |
||||||||
| 460,700 and 302,600 Shares in 2004 and 2003, Respectively |
(9,726 | ) | (4,384 | ) | ||||
| Total Stockholders’ Equity |
392,019 | 365,197 | ||||||
| $ | 1,137,423 | $ | 1,055,056 | |||||
The accompanying notes are an integral part of these consolidated financial statements.
- 4 -
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In Thousands)
| Six-Months Ended June 30, |
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| 2004 |
2003 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net Income (Loss) |
$ | 38,329 | $ | (21,319 | ) | |||
| Adjustments to Reconcile Net Income (Loss) to Cash Provided by Operating Activities: |
||||||||
| Cumulative Effect of Accounting Change |
— | 6,847 | ||||||
| Depletion, Depreciation and Amortization |
48,851 | 47,271 | ||||||
| Impairment of Unproved Properties |
5,311 | 4,674 | ||||||
| Impairment of Long-Lived Assets |
— | 87,926 | ||||||
| Deferred Income Taxes |
7,181 | (25,248 | ) | |||||
| (Gain) Loss on Sale of Assets |
113 | (605 | ) | |||||
| Exploration Expense |
25,712 | 29,054 | ||||||
| Change in Derivative Fair Value |
6,272 | 1,194 | ||||||
| Other |
721 | 333 | ||||||
| Changes in Assets and Liabilities: |
||||||||
| Accounts Receivable |
(2,070 | ) | (15,130 | ) | ||||
| Inventories |
8,722 | 5,292 | ||||||
| Other Current Assets |
(1,017 | ) | (5,612 | ) | ||||
| Other Assets |
178 | 214 | ||||||
| Accounts Payable and Accrued Liabilities |
3,573 | 25,110 | ||||||
| Other Liabilities |
1,425 | (197 | ) | |||||
| Net Cash Provided by Operating Activities |
143,301 | 139,804 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Capital Expenditures |
(102,430 | ) | (51,399 | ) | ||||
| Proceeds from Sale of Assets |
22 | 2,360 | ||||||
| Exploration Expense |
(25,712 | ) | (29,054 | ) | ||||
| Net Cash Used by Investing Activities |
(128,120 | ) | (78,093 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
| Increase in Debt |
28,000 | 131,000 | ||||||
| Decrease in Debt |
(28,000 | ) | (192,000 | ) | ||||
| Sale of Common Stock Proceeds |
13,468 | 2,458 | ||||||
| Purchase of Treasury Stock |
(5,342 | ) | — | |||||
| Dividends Paid |
(2,602 | ) | (2,468 | ) | ||||