Cabot Oil & Gas Corporation Reports Fourth Quarter and Full-Year 2020 Results, Provides Updated Capital Return Framework
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 CO(2)e 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 Twelve Months Ended
December 31,
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 Twelve Months Ended
December 31,
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, December 31,
2020 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 Twelve Months Ended
December 31,
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 Twelve Months Ended
December 31,
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 Twelve Months Ended
December 31,
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 Twelve Months Ended
December 31,
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, December 31,
2020 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 Twelve Months Ended
December 31,
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
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SOURCE Cabot Oil & Gas Corporation
