Exhibit 99.1
| | |
| FOR RELEASE | | FOR MORE INFORMATION CONTACT |
| February 16, 2006 | | Scott Schroeder (281) 589-4993 |
Cabot Oil & Gas Corporation Establishes New Records
2005 Net Income, Cash Flow Metrics and Reserves Surpass 2004 Record Levels
HOUSTON, February 16, 2006—Cabot Oil & Gas Corporation (NYSE: COG) today released year-end financial results including net income of $148.4 million, or $3.04 per share, cash flow from operations of $364.6 million and discretionary cash flow of $374.4 million. All of these figures were significantly above the levels recorded for 2004, the previous benchmark for financial success in the Company. The comparison levels for 2004 include $88.4 million, or $1.81 per share, for net income (all 2004 per share data has been adjusted for the 3-for-2 stock split in March 2005), $273.0 million for cash flow from operations and discretionary cash flow of $294.3 million.
“It is no secret that commodity prices were the key drivers for Cabot and many of its peers reporting such robust results,” stated Dan O. Dinges, Chairman, President and Chief Executive Officer. “Even with a portion of the upside hedged away, the cash generated provided funding for Cabot’s largest ever organic capital program.”
For the full year, natural gas price realizations were $6.74 per Mcf, compared to $5.20 per Mcf in 2004. The Company also experienced an increase in oil prices, recording $44.19 per barrel in 2005 versus $31.55 per barrel in 2004. “Expense inflation occurs as the industry reacts to higher prices by increasing its activity levels and its demand for services,” commented Dinges. “In 2005, our expenses increased over 2004, with the largest percent increases coming from exploration expense, stock compensation, and other taxes.”
For the year, Cabot reported 84.4 Bcfe of production, down less than one percent versus 2004’s 84.8 Bcfe. “Deferred volumes the last four months of the year from hurricanes Katrina and Rita are estimated at 1.4 Bcfe,” said Dinges. “This highlights how close we are in transitioning to and establishing a growing production profile from an organic program.” Dinges added, “Reinforcing this point are two important facts: (1) we continue to grow our natural gas production, and (2) our equivalent fourth quarter 2005 production volumes increased versus the comparable quarter in 2004.”
Fourth Quarter
The Company set a new quarterly high in the fourth quarter of 2005, reporting net income of $58.5 million, or $1.20 per share, compared to $32.2 million, or $.66 per share, in 2004. Quarterly cash flow comparisons were just as robust, with cash flow from operations of $117.4 million, more than doubling last year’s figure of $57.1 million, and discretionary cash flow of $119.3 million, up 44 percent. Higher realized prices and production more than offset the increase in expense levels.
Selected Items
The selected items that impacted the quarter and full year earnings figures, but had no impact on cash flow related items, included a gain on sale of assets, an unrealized change in derivative fair value, and an impairment of oil and gas properties in the 2004 full year period. Taking these into account the net income comparison for 2005 versus 2004 is $144.3 million, or $2.95 per share, versus $91.8 million, or $1.88 per share. The quarter comparison for net income is $53.1 million, or $1.09 per share, and $25.3 million, or $.52 per share.
Balance Sheet
Long-term debt increased over last year as the Company used its credit facility to fund about $70 million in acquisitions. During the course of the year, but predominately in the fourth quarter, the Company repurchased 452,300 shares of its common stock at a weighted average purchase price of $42.41. “With the inherent value in Cabot’s capital program, we recommenced buying shares in late November and early December with the market pull back,” stated Dinges. “We still see a lot of merit and long-term value for the shareholders in looking at COG stock as an investment alternative.”
Reserves
Cabot increased reserves by 10.7% in 2005, bringing year-end total proved reserves to 1,330.9 Bcfe – the highest level ever for the Company. To accomplish this, Cabot grew reserves in each of its operating regions and replaced 252% of 2005 production. The Company’s 2005 drilling program added 187.9 Bcfe, a limited acquisition program added 20.1 Bcfe, and the Company had a 4.9 Bcfe positive revision. The all-in finding cost was $1.91 per Mcfe.
“With the high demand for materials and services in our industry and the resulting inflationary pressure we have experienced during the year, I am very pleased with our overall reserve and finding cost for 2005,” said Dinges. “I am particularly happy with the drilling only finding cost of $1.77 per Mcfe, while replacing 223% of production. I should add that these figures reflect a proven, undeveloped (PUD) component consistent with historical levels.”
Outlook
For 2006, Cabot once again is expanding its drilling program. “We have secured the rigs necessary to complete our program, a program that focuses on more development activity and less risk,” said Dinges. “The current forecasted activity level calls for 391 wells, with increased activity in each region including expanded drilling on each of the acquisition plays purchased in 2005.”
Given the current outlook on prices and the hedge philosophy for 2006 of wide range collars, Cabot is well positioned to participate more fully in any up market for 2006 commodity prices. On a weighted average basis, Cabot’s natural gas collars range from $8.25 to $12.74 per Mcf while its oil collar ranges from $50.00 to $76.00 per barrel. These derivatives cover 34% of anticipated 2006 equivalent production.
Conference Call
Listen in live to Cabot Oil & Gas Corporation’s 2005 year-end/fourth quarter financial and operating results discussion with financial analysts on Friday, February 17, 2006 at 9:30 AM EST (8:30 AM CST) atwww.cabotog.com. A teleconference replay will also be available at (800) 642-1687, (U.S./Canada) or (706) 645-9291 (International), passcode: 4293569. A replay will be available from Friday, February 17 through Friday, February 24, 2006. The latest financial guidance, including the Company’s hedge positions, along with a replay of the webcast, which will be archived for one year, are available in the investor relations section of the Company’s website atwww.cabotog.com.
* * *
Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading North American exploration and production independent. The Company’s reserves are focused in both conventional and unconventional basins including the East, the West (Rocky Mountain and Mid-Continent), the Gulf Coast (South and East Texas to North Louisiana) and Canada. For additional information, visit the Company’s Internet homepage atwww.cabotog.com.
Forward-Looking Statements
The statements regarding future financial performance and results and the other statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, market factors, the market price (including regional basis differentials) of natural gas and oil, results of future drilling and marketing activity, future production and costs, and other factors detailed in the Company’s Securities and Exchange Commission filings.
CABOT OIL & GAS RESULTS — Page 4
OPERATING DATA
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31,
| | | Twelve Months Ended
December 31,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
PRODUCED NATURAL GAS (Bcf) & OIL (MBbl) | | | | | | | | | | | | | | | | |
Natural Gas | | | | | | | | | | | | | | | | |
Gulf Coast | | | 7.1 | | | | 7.7 | | | | 28.1 | | | | 31.3 | |
West | | | 5.9 | | | | 5.6 | | | | 23.2 | | | | 21.9 | |
East | | | 5.7 | | | | 5.1 | | | | 21.4 | | | | 19.4 | |
Canada | | | 0.4 | | | | 0.2 | | | | 1.2 | | | | 0.2 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total | | | 19.1 | | | | 18.6 | | | | 73.9 | | | | 72.8 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Crude/Condensate/Ngl | | | | | | | | | | | | | | | | |
Gulf Coast | | | 339 | | | | 411 | | | | 1,530 | | | | 1,809 | |
West | | | 45 | | | | 40 | | | | 172 | | | | 163 | |
East | | | 7 | | | | 7 | | | | 27 | | | | 27 | |
Canada | | | 4 | | | | 2 | | | | 18 | | | | 3 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total | | | 395 | | | | 460 | | | | 1,747 | | | | 2,002 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Equivalent Production (Bcfe) | | | 21.5 | | | | 21.3 | | | | 84.4 | | | | 84.8 | |
| | | | |
PRICES | | | | | | | | | | | | | | | | |
Average Produced Gas Sales Price ($/Mcf) | | | | | | | | | | | | | | | | |
Gulf Coast | | $ | 6.73 | | | $ | 5.55 | | | $ | 6.38 | | | $ | 5.27 | |
West | | $ | 7.82 | | | $ | 4.83 | | | $ | 6.00 | | | $ | 4.75 | |
East | | $ | 11.06 | | | $ | 6.13 | | | $ | 8.02 | | | $ | 5.60 | |
Canada | | $ | 8.89 | | | $ | 4.69 | | | $ | 6.79 | | | $ | 4.69 | |
Total(1) | | $ | 8.42 | | | $ | 5.49 | | | $ | 6.74 | | | $ | 5.20 | |
| | | | |
Crude/Condensate Price ($/Bbl) | | | | | | | | | | | | | | | | |
Gulf Coast | | $ | 43.13 | | | $ | 30.52 | | | $ | 42.81 | | | $ | 30.67 | |
West | | $ | 58.70 | | | $ | 47.18 | | | $ | 55.37 | | | $ | 40.29 | |
East | | $ | 56.36 | | | $ | 44.95 | | | $ | 53.84 | | | $ | 38.28 | |
Canada | | $ | 47.08 | | | $ | 37.93 | | | $ | 43.39 | | | $ | 37.93 | |
Total(1) | | $ | 45.09 | | | $ | 32.18 | | | $ | 44.19 | | | $ | 31.55 | |
| | | | |
WELLS DRILLED | | | | | | | | | | | | | | | | |
Gross | | | 87 | | | | 51 | | | | 316 | | | | 256 | |
Net | | | 70 | | | | 41 | | | | 247 | | | | 220 | |
Gross Success Rate | | | 94 | % | | | 90 | % | | | 95 | % | | | 95 | % |
| (1) | These realized prices include the realized impact of derivative instruments. |
CABOT OIL & GAS RESULTS — Page 5
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
| | | | | | | | | | | | | | |
| | | Quarter Ended
December 31,
| | | Twelve Months Ended
December 31,
| |
| | | 2005
| | 2004
| | | 2005
| | 2004
| |
Operating Revenues | | | | | | | | | | | | | | |
Natural Gas Production(1) | | $ | 161,611 | | $ | 103,143 | | | $ | 499,177 | | $ | 379,661 | |
Brokered Natural Gas | | | 37,837 | | | 24,005 | | | | 98,605 | | | 84,416 | |
Crude Oil and Condensate(1) | | | 25,098 | | | 25,189 | | | | 82,348 | | | 60,022 | |
Other | | | 536 | | | 2,302 | | | | 2,667 | | | 6,309 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
| | | | 225,082 | | | 154,639 | | | | 682,797 | | | 530,408 | |
Operating Expenses | | | | | | | | | | | | | | |
Brokered Natural Gas Cost | | | 33,634 | | | 21,273 | | | | 87,183 | | | 75,217 | |
Direct Operations - Field and Pipeline | | | 18,579 | | | 15,092 | | | | 61,750 | | | 53,581 | |
Exploration | | | 14,444 | | | 15,439 | | | | 61,840 | | | 48,130 | |
Depreciation, Depletion and Amortization | | | 30,932 | | | 28,538 | | | | 121,424 | | | 113,488 | |
Impairment of Oil & Gas Properties | | | — | | | — | | | | — | | | 3,458 | |
General and Administrative (excluding Stock-Based Compensation) | | | 7,518 | | | 8,512 | | | | 28,028 | | | 28,198 | |
Stock-Based Compensation(2) | | | 2,793 | | | 924 | | | | 9,622 | | | 6,537 | |
Taxes Other Than Income | | | 17,240 | | | 10,884 | | | | 54,293 | | | 41,022 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
| | | | 125,140 | | | 100,662 | | | | 424,140 | | | 369,631 | |
(Loss) / Gain on Sale of Assets | | | — | | | (131 | ) | | | 74 | | | (124 | ) |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Income from Operations | | | 99,942 | | | 53,846 | | | | 258,731 | | | 160,653 | |
Interest Expense and Other | | | 7,036 | | | 5,630 | | | | 22,497 | | | 22,029 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Income Before Income Taxes | | | 92,906 | | | 48,216 | | | | 236,234 | | | 138,624 | |
Income Tax Expense | | | 34,401 | | | 15,989 | | | | 87,789 | | | 50,246 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Net Income | | $ | 58,505 | | $ | 32,227 | | | $ | 148,445 | | $ | 88,378 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Net Earnings Per Share - Basic(3) | | $ | 1.20 | | $ | 0.66 | | | $ | 3.04 | | $ | 1.81 | |
Weighted Average Common Shares Outstanding(3) | | | 48,831 | | | 48,722 | | | | 48,856 | | | 48,733 | |
| (1) | See the “Impact of Mark-to-Market Accounting Requirements” table for additional information. |
| (2) | Includes the impact of the Company’s performance share mark-to-market requirement and restricted stock amortization. |
| (3) | Reflects the 3-for-2 split of the Company’s Common Stock on March 31, 2005. |
CABOT OIL & GAS RESULTS — Page 6
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands)
| | | | | | |
| | | December 31,
2005
| | December 31,
2004
|
Assets | | | | | | |
Current Assets | | $ | 230,312 | | $ | 194,679 |
Property, Equipment and Other Assets | | | 1,245,471 | | | 1,001,422 |
Deferred Income Taxes | | | 19,587 | | | 14,855 |
| | |
|
| |
|
|
Total Assets | | $ | 1,495,370 | | $ | 1,210,956 |
| | |
|
| |
|
|
Liabilities and Stockholders’ Equity | | | | | | |
Current Liabilities | | $ | 218,584 | | $ | 196,889 |
Long-Term Debt | | | 320,000 | | | 250,000 |
Deferred Income Taxes | | | 289,381 | | | 247,376 |
Other Liabilities | | | 67,194 | | | 61,029 |
Stockholders’ Equity | | | 600,211 | | | 455,662 |
| | |
|
| |
|
|
Total Liabilities and Stockholders’ Equity | | $ | 1,495,370 | | $ | 1,210,956 |
| | |
|
| |
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(In thousands)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31,
| | | Twelve Months Ended
December 31,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Cash Flows From Operating Activities | | | | | | | | | | | | | | | | |
Net Income | | $ | 58,505 | | | $ | 32,227 | | | $ | 148,445 | | | $ | 88,378 | |
Unrealized Change in Derivative Fair Value | | | (8,677 | ) | | | (11,292 | ) | | | (6,626 | ) | | | 2,003 | |
Impairment of Oil & Gas Properties | | | — | | | | — | | | | — | | | | 3,458 | |
Income Charges Not Requiring Cash | | | 33,581 | | | | 29,234 | | | | 131,227 | | | | 119,448 | |
Loss / (Gain) on Sale of Assets | | | — | | | | 131 | | | | (74 | ) | | | 124 | |
Deferred Income Tax Expense | | | 21,403 | | | | 17,264 | | | | 39,628 | | | | 32,713 | |
Changes in Assets and Liabilities | | | (1,807 | ) | | | (25,908 | ) | | | (9,880 | ) | | | (21,232 | ) |
Exploration Expense | | | 14,444 | | | | 15,439 | | | | 61,840 | | | | 48,130 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Cash Provided by Operations | | | 117,449 | | | | 57,095 | | | | 364,560 | | | | 273,022 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash Flows From Investing Activities | | | | | | | | | | | | | | | | |
Capital Expenditures | | | (109,802 | ) | | | (49,599 | ) | | | (351,306 | ) | | | (207,346 | ) |
Proceeds from Sale of Assets | | | — | | | | (67 | ) | | | 996 | | | | 119 | |
Exploration Expense | | | (14,444 | ) | | | (15,439 | ) | | | (61,840 | ) | | | (48,130 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Cash Used by Investing | | | (124,246 | ) | | | (65,105 | ) | | | (412,150 | ) | | | (255,357 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Cash Flows From Financing Activities | | | | | | | | | | | | | | | | |
Sale of Common Stock Proceeds | | | 498 | | | | 1,351 | | | | 4,586 | | | | 12,474 | |
Net Increase in Debt | | | 60,000 | | | | — | | | | 70,000 | | | | — | |
Decrease in Book Overdrafts | | | (25,691 | ) | | | — | | | | — | | | | — | |
Purchase of Treasury Stock | | | (18,612 | ) | | | (6,899 | ) | | | (19,183 | ) | | | (15,631 | ) |
Dividends Paid | | | (1,959 | ) | | | (1,300 | ) | | | (7,213 | ) | | | (5,206 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Cash Provided / (Used) by Financing | | | 14,236 | | | | (6,848 | ) | | | 48,190 | | | | (8,363 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Increase / (Decrease) in Cash and Cash Equivalents | | $ | 7,439 | | | $ | (14,858 | ) | | $ | 600 | | | $ | 9,302 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
CABOT OIL & GAS RESULTS — Page 7
Selected Item Review and Reconciliation of Net Income and Earnings Per Share
(In thousands, except per share amounts)
| | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31,
| | | Twelve Months Ended
December 31,
|
| | | 2005
| | | 2004
| | | 2005
| | | 2004
|
As Reported - Net Income | | $ | 58,505 | | | $ | 32,227 | | | $ | 148,445 | | | $ | 88,378 |
Reversal of Selected Items, Net of Tax: | | | | | | | | | | | | | | | |
Impairment of Oil & Gas Properties | | | — | | | | — | | | | — | | | | 2,139 |
Loss / (Gain) on Sale of Assets | | | — | | | | 81 | | | | (46 | ) | | | 77 |
Unrealized Change in Derivative Fair Value | | | (5,374 | ) | | | (6,985 | ) | | | (4,108 | ) | | | 1,239 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
Net Income Including Reversal of Selected Items | | $ | 53,131 | | | $ | 25,323 | | �� | $ | 144,291 | | | $ | 91,833 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
As Reported - Net Earnings Per Share | | $ | 1.20 | | | $ | 0.66 | | | $ | 3.04 | | | $ | 1.81 |
Per Share Impact of Reversing Selected Items | | | (0.11 | ) | | | (0.14 | ) | | | (0.09 | ) | | | 0.07 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
Net Earnings Per Share Including Reversal of Selected Items | | $ | 1.09 | | | $ | 0.52 | | | $ | 2.95 | | | $ | 1.88 |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
Weighted Average Common Shares Outstanding | | | 48,831 | | | | 48,722 | | | | 48,856 | | | | 48,733 |
Discretionary Cash Flow Calculation and Reconciliation
(In thousands)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31,
| | | Twelve Months Ended
December 31,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Discretionary Cash Flow | | | | | | | | | | | | | | | | |
As Reported - Net Income | | $ | 58,505 | | | $ | 32,227 | | | $ | 148,445 | | | $ | 88,378 | |
Plus: | | | | | | | | | | | | | | | | |
Unrealized Change in Derivative Fair Value | | | (8,677 | ) | | | (11,292 | ) | | | (6,626 | ) | | | 2,003 | |
Impairment of Oil & Gas Properties | | | — | | | | — | | | | — | | | | 3,458 | |
Income Charges Not Requiring Cash | | | 33,581 | | | | 29,234 | | | | 131,227 | | | | 119,448 | |
Loss / (Gain) on Sale of Assets | | | — | | | | 131 | | | | (74 | ) | | | 124 | |
Deferred Income Tax Expense | | | 21,403 | | | | 17,264 | | | | 39,628 | | | | 32,713 | |
Exploration Expense | | | 14,444 | | | | 15,439 | | | | 61,840 | | | | 48,130 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Discretionary Cash Flow | | | 119,256 | | | | 83,003 | | | | 374,440 | | | | 294,254 | |
Plus: Changes in Assets and Liabilities | | | (1,807 | ) | | | (25,908 | ) | | | (9,880 | ) | | | (21,232 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Cash Provided by Operations | | $ | 117,449 | | | $ | 57,095 | | | $ | 364,560 | | | $ | 273,022 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Debt Reconciliation
(In thousands)
| | | | | | | | |
| | | December 31,
2005
| | | December 31,
2004
| |
Current Portion of Long-Term Debt | | $ | 20,000 | | | $ | 20,000 | |
Long-Term Debt | | | 320,000 | | | | 250,000 | |
| | |
|
|
| |
|
|
|
Total Debt | | $ | 340,000 | | | $ | 270,000 | |
Stockholders’ Equity | | | 600,211 | | | | 455,662 | |
| | |
|
|
| |
|
|
|
Total Capitalization | | $ | 940,211 | | | $ | 725,662 | |
| | |
Total Debt | | $ | 340,000 | | | $ | 270,000 | |
Less: Cash and Cash Equivalents | | | (10,626 | ) | | | (10,026 | ) |
| | |
|
|
| |
|
|
|
Net Debt | | $ | 329,374 | | | $ | 259,974 | |
| | |
Net Debt | | $ | 329,374 | | | $ | 259,974 | |
Stockholders’ Equity | | | 600,211 | | | | 455,662 | |
| | |
|
|
| |
|
|
|
Total Adjusted Capitalization | | $ | 929,585 | | | $ | 715,636 | |
| | |
Total Debt to Total Capitalization Ratio | | | 36.2 | % | | | 37.2 | % |
Less: Impact of Cash and Cash Equivalents | | | 0.8 | % | | | 0.9 | % |
| | |
|
|
| |
|
|
|
Net Debt to Adjusted Capitalization Ratio | | | 35.4 | % | | | 36.3 | % |
CABOT OIL & GAS RESULTS — Page 8
Impact of Mark-to-Market Accounting Requirements
(In thousands)
| | | | | | | | | | | | | | | | |
| | | Quarter Ended
December 31,
| | | Twelve Months
Ended December 31,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Unrealized Gain / (Loss) on Derivatives(1) | | | | | | | | | | | | | | | | |
Natural Gas | | $ | 1,300 | | | $ | 983 | | | $ | 1,114 | | | $ | 914 | |
Crude Oil | | | 7,377 | | | | 10,309 | | | | 5,512 | | | | (2,917 | ) |
| | | | |
Incentive Stock Compensation Expense(2) | | | | | | | | | | | | | | | | |
Performance Shares | | | (785 | ) | | | (26 | ) | | | (3,357 | ) | | | (3,184 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Mark-to-Market Impact, Before Income Tax | | $ | 7,892 | | | $ | 11,266 | | | $ | 3,269 | | | $ | (5,187 | ) |
Mark-to-Market Impact, Income Tax | | | (2,999 | ) | | | (4,297 | ) | | | (1,242 | ) | | | 1,978 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Mark-to-Market Impact on Net Income | | $ | 4,893 | | | $ | 6,969 | | | $ | 2,027 | | | $ | (3,209 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| (1) | These amounts represent the unrealized gain / (loss) associated with the mark-to-market valuation of open positions which do not qualify for hedge accounting or are ineffective. These amounts are reflected in the respective line items of Operating Revenues. Therefore, the computation of our reported realized commodity prices can be obtained by adding the loss or subtracting the gain from the respective Operating Revenues line item and dividing by reported production. |
| (2) | This amount relates to the mark-to-market valuation of the Company’s performance share incentive stock compensation awards that is reflected in general and administrative expense. At December 31, 2005 the Company recognized stock compensation expense based on Cabot’s ranking against a predetermined peer group based on total shareholder return. Cabot must calculate its liability at the balance sheet date under the assumption that its relative ranking remains constant throughout the measurement period, creating an assumed ultimate liability which is then amortized over the measurement period (percent payout multiplied by shares multiplied by stock price at reported balance sheet date multiplied by the pro-rata time expired in the measurement period). Expense recognition will fluctuate between reporting periods due to the valuation of the performance shares at the reported balance sheet date. |
