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Southwestern Energy Announces Third Quarter 2020 Results

Operational and financial achievements with disciplined acquisition accelerating momentum into a rising price environment; increasing estimated 2021 free cash flow to $300 million

SPRING, Texas--(BUSINESS WIRE)--Southwestern Energy Company (NYSE: SWN) today announced financial and operating results for the third quarter ended September 30, 2020.


  • Increasing 2021 free cash flow estimate due to improved current strip and continuing capital and operational efficiencies; investment to be limited to maintenance capital;
  • At-market acquisition of Montage Resources expected to close following Montage shareholder vote on November 12; on track for $30 million acquisition synergies;
  • Borrowing base reaffirmed at $1.8 billion; increases to $2.0 billion following acquisition closing; asset coverage from combined portfolio exceeds borrowing base;
  • Peer leading maturity runway maintained through equity and senior notes issuance; Montage senior notes called subject to closing;
  • Continuous innovation driving record low single-well cost of $491 per lateral foot; second half average expected to be below $650 per lateral foot;
  • Total production of 221 Bcfe; includes 1.9 Bcf per day of gas and 87 MBbls per day of liquids;
  • Realized $97 million in cash derivative settlements bringing year-to-date total to $310 million from rigorous hedging program; and
  • Published 7th Annual Corporate Responsibility report for 2019. Key environmental highlights include:

­ Reported lowest GHG intensity among AXPC peers in annual EHS Survey

­ Methane intensity 85% better than the target set by ONE Future

­ Fresh water neutral for the fourth year in a row; 100% of fresh water usage offset through recycling and conservation projects

“We have executed a disciplined repositioning strategy back to free cash flow in 2021 by decreasing debt, maintaining strong liquidity and leading maturity runway, reducing structural costs and improving capital efficiency,” said Bill Way, Southwestern Energy President and Chief Executive Officer.

“Further building on the Company’s strengths, our attention is focused on optimizing free cash flow generation and further debt reduction. These plans are underpinned by a returns-driven investment strategy at maintenance capital benefiting from innovation and technology to drive further well performance improvements and cost efficiencies, all while dynamically hedging, realizing the full synergies of a value-adding acquisition and driving enhanced returns for shareholders,” continued Way.

Financial Results
For the quarter ended September 30, 2020, Southwestern Energy recorded a net loss of $593 million, or ($1.04) per diluted share, including $361 million of non-cash impairments and a $289 million non-cash loss on unsettled mark-to-market derivatives due to rising prices in future periods. This compares to net income of $49 million, or $0.09 per diluted share in the third quarter of 2019.

Adjusted net income (non-GAAP), which excludes the non-cash items noted above, was $47 million, or $0.08 per diluted share in the third quarter of 2020, compared to adjusted net income of $44 million, or $0.08 per diluted share for the prior year period, as decreased revenues due to lower prices were offset by decreased depreciation, depletion and amortization expense. Adjusted EBITDA (non-GAAP) was $154 million, net cash provided by operating activities was $153 million and net cash flow (non-GAAP) was $135 million.

FINANCIAL STATISTICS

 

For the three months ended

 

For the nine months ended

 

 

September 30,

 

September 30,

(in millions)

 

2020

 

2019

 

2020

 

2019

Net income (loss)

 

$

(593

)

 

$

49

 

 

$

(3,020

)

 

$

781

 

Adjusted net income (non-GAAP)

 

$

47

 

 

$

44

 

 

$

102

 

 

$

229

 

Diluted earnings (loss) per share

 

$

(1.04

)

 

$

0.09

 

 

$

(5.48

)

 

$

1.44

 

Adjusted diluted earnings per share (non-GAAP)

 

$

0.08

 

 

$

0.08

 

 

$

0.18

 

 

$

0.42

 

Adjusted EBITDA (non-GAAP)

 

$

154

 

 

$

202

 

 

$

466

 

 

$

707

 

Net cash provided by operating activities

 

$

153

 

 

$

196

 

 

$

407

 

 

$

739

 

Net cash flow (non-GAAP)

 

$

135

 

 

$

185

 

 

$

413

 

 

$

667

 

Total capital investments (1)

 

$

223

 

 

$

240

 

 

$

705

 

 

$

933

 

(1) Capital investments on the cash flow statement include decreases of $7 million and $53 million for the three months ended September 30, 2020 and 2019, respectively, and increases of $1 million and $52 million for the nine months ended September 30, 2020 and 2019, respectively, relating to the change in accrued expenditures between periods.

As indicated in the table below, third quarter 2020 weighted average realized price, including $0.35 per Mcfe of transportation expenses, was $1.34 per Mcfe before the impact of derivatives, down 22% from $1.72 per Mcfe in the prior year period. The decrease was primarily due to an 11% decrease in NYMEX Henry Hub and a 27% decrease in West Texas Intermediate (WTI). Third quarter 2020 weighted average realized price before transportation expenses was $1.69 per Mcfe.

The Company realized $97 million in cash-settled derivative gains during the third quarter, a $0.44 per Mcfe uplift, bringing year-to-date gains to $310 million. Included in the third quarter settled derivative gains is a $20 million gain related to natural gas basis hedges, which protected the Company from widening basis differentials in the Appalachia basin.

During the third quarter, the Company completed two capital market transactions related to the announced acquisition of Montage Resources. Net proceeds of $152 million from the issuance of 63.25 million shares of common stock and $350 million of 8.375% Senior Notes due 2028 will be used to fund a redemption of outstanding Montage Senior Notes due 2023 upon the anticipated close of the acquisition in the fourth quarter.

As of September 30, 2020, Southwestern Energy had total debt of $2.47 billion and a cash balance of $95 million, with a leverage ratio of 3.2x. At the end of the third quarter, the Company had no borrowings under its revolving credit facility with $203 million in outstanding letters of credit. In October, the Company announced its borrowing base had been reaffirmed at $1.8 billion, with commitments to increase to $2.0 billion upon the closing of the Montage acquisition.

Realized Prices

 

For the three months ended

 

For the nine months ended

(includes transportation costs)

 

September 30,

 

September 30,

 

 

2020

 

2019

 

2020

 

2019

Natural Gas Price:

 

 

 

 

 

 

 

 

NYMEX Henry Hub price ($/MMBtu) (1)

 

$

1.98

 

 

$

2.23

 

 

$

1.88

 

 

$

2.67

 

Discount to NYMEX (2)

 

(0.89

)

 

(0.78

)

 

(0.68

)

 

(0.63

)

Realized gas price per Mcf, excluding derivatives

 

$

1.09

 

 

$

1.45

 

 

$

1.20

 

 

$

2.04

 

Gain (loss) on settled financial basis derivatives ($/Mcf)

 

0.12

 

 

(0.01

)

 

0.06

 

 

(0.02

)

Gain on settled commodity derivatives ($/Mcf)

 

0.31

 

 

0.43

 

 

0.39

 

 

0.18

 

Realized gas price per Mcf, including derivatives

 

$

1.52

 

 

$

1.87

 

 

$

1.65

 

 

$

2.20

 

Oil Price, per Bbl:

 

 

 

 

 

 

 

 

WTI oil price

 

$

40.93

 

 

$

56.45

 

 

$

38.32

 

 

$

57.06

 

Discount to WTI

 

(11.47

)

 

(9.91

)

 

(10.12

)

 

(9.92

)

Realized oil price, excluding derivatives

 

$

29.46

 

 

$

46.54

 

 

$

28.20

 

 

$

47.14

 

Realized oil price, including derivatives

 

$

46.69

 

 

$

49.67

 

 

$

44.97

 

 

$

49.74

 

NGL Price, Per Bbl:

 

 

 

 

 

 

 

 

Realized NGL price, excluding derivatives

 

$

10.34

 

 

$

8.89

 

 

$

8.37

 

 

$

11.24

 

Realized NGL price, including derivatives

 

$

10.50

 

 

$

11.93

 

 

$

9.85

 

 

$

13.18

 

Percentage of WTI, excluding derivatives

 

25

%

 

16

%

 

22

%

 

20

%

Total Weighted Average Realized Price:

 

 

 

 

 

 

 

 

Excluding derivatives ($/Mcfe)

 

$

1.34

 

 

$

1.72

 

 

$

1.36

 

 

$

2.21

 

Including derivatives ($/Mcfe)

 

$

1.78

 

 

$

2.16

 

 

$

1.86

 

 

$

2.41

 

(1) Based on last day monthly futures settlement prices.

(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.

Operational Results
Total production for the quarter ended September 30, 2020 was 221 Bcfe, comprised of 78% natural gas, 18% NGLs and 4% oil. Capital investments totaled $223 million for the third quarter, with 16 wells drilled, 25 wells completed and 30 wells placed to sales. Third quarter wells to sales averaged $664 per lateral foot. During the quarter, the Company continued to progress operational efficiencies and drive further cost reductions, including averaging 15 stages completed per day on a 7-well pad. As a result of these improvements, the Company is on track to deliver well costs below the targets announced in the second quarter.

Operating Statistics

 

For the three months ended

 

For the nine months ended

 

 

 

September 30,

 

September 30,

 

 

 

2020

 

2019

 

2020

 

2019

 

Production

 

 

 

 

 

 

 

 

 

Gas production (Bcf)

 

173

 

 

158

 

 

487

 

 

449

 

 

Oil production (MBbls)

 

1,294

 

 

1,419

 

 

3,776

 

 

3,210

 

 

NGL production (MBbls)

 

6,687

 

 

5,911

 

 

18,926

 

 

17,011

 

 

Total production (Bcfe)

 

221

 

 

202

 

 

623

 

 

570

 

 

 

 

 

 

 

 

 

 

 

 

Division Production

 

 

 

 

 

 

 

 

 

Northeast Appalachia (Bcf)

 

121

 

 

118

 

 

348

 

 

343

 

 

Southwest Appalachia (Bcfe)

 

100

 

 

84

 

 

275

 

 

227

 

 

 

 

 

 

 

 

 

 

 

 

Average unit costs per Mcfe

 

 

 

 

 

 

 

 

 

Lease operating expenses

 

$

0.91

 

 

$

0.94

 

 

$

0.93

 

 

$

0.92

 

 

General & administrative expenses

 

$

0.12

 

(1)

$

0.15

 

(2)

$

0.13

 

(1)

$

0.17

 

(2)

Taxes, other than income taxes

 

$

0.07

 

 

$

0.08

 

 

$

0.06

 

 

$

0.09

 

 

Full cost pool amortization

 

$

0.29

 

 

$

0.58

 

 

$

0.40

 

 

$

0.57

 

 

(1) Excludes $3 million in Montage acquisition-related expenses for the three and nine months ended September 30, 2020 and $12 million in restructuring charges for the nine months ended September 30, 2020.

(2) Excludes $4 million and $9 million of restructuring charges for the three and nine months ended September 30, 2019, respectively. Excludes a $6 million residual value guarantee short-fall payment to the previous lessor of our headquarters building and $3 million of legal settlement charges for the three and nine months ended September 30, 2019.

Southwest Appalachia – In the third quarter, total production was 100 Bcfe, with liquids production of 87 MBbls per day. The Company drilled seven wells, completed 12 wells and placed 12 wells to sales. The average lateral length of wells to sales was 13,206 feet, and included six wells in the rich area and six wells in the super rich area. All six of the rich wells were online for at least 30 days and had an average 30-day rate of 25.0 MMcfe per day, and all six of the super rich wells were online for at least 30 days and had an average 30-day rate of 14.5 MMcfe per day, including 63% liquids.

Northeast Appalachia – Third quarter production was 121 Bcf. There were nine wells drilled, 13 wells completed and 18 wells put to sales with an average lateral length of 9,455 feet. The 17 wells that were online for at least 30 days were all Lower Marcellus wells, with an average 30-day rate of 15.0 MMcf per day.

E&P Division Results

For the three months ended
September 30, 2020

 

 

For the nine months ended
September 30, 2020

 

 

Northeast

 

 

Southwest

 

 

Northeast

 

 

Southwest

 

Gas production (Bcf)

 

121

 

 

 

52

 

 

 

348

 

 

 

139

 

Liquids production

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil (MBbls)

 

 

 

 

1,290

 

 

 

 

 

 

3,764

 

NGL (MBbls)

 

 

 

 

6,687

 

 

 

 

 

 

18,924

 

Production (Bcfe)

 

121

 

 

 

100

 

 

 

348

 

 

 

275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross operated production September 2020 (MMcfe/d)

 

1,630

 

 

 

1,850

 

 

 

 

 

 

 

 

 

Net operated production September 2020 (MMcfe/d)

 

1,334

 

 

 

1,147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital investments ($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drilling and completions, including workovers

$

82

 

 

$

78

 

 

$

268

 

 

$

275

 

Land acquisition and other

 

9

 

 

 

9

 

 

 

14

 

 

 

22

 

Capitalized interest and expense

 

7

 

 

 

30

 

 

 

17

 

 

 

89

 

Total capital investments

$

98

 

 

$

117

 

 

$

299

 

 

$

386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross operated well activity summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drilled

 

9

 

 

 

7

 

 

 

45

 

 

 

39

 

Completed

 

13

 

 

 

12

 

 

 

37

 

 

 

41

 

Wells to sales

 

18

 

 

 

12

 

 

 

34

 

 

 

39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average well cost on wells to sales (in millions)

$

6.6

 

 

$

8.3

 

 

$

6.6

 

 

$

8.7

 

Average lateral length (in ft)

 

9,455

 

 

 

13,206

 

 

 

9,464

 

 

 

12,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total weighted average realized price per Mcfe, excluding derivatives

$

1.09

 

 

$

1.65

 

 

$

1.27

 

 

$

1.47

 

Conference Call
Southwestern Energy will host a conference call on Friday, October 30, 2020 at 9:30 a.m. Central to discuss third quarter 2020 results. To participate, dial US toll-free 877-883-0383, or international 412-902-6506 and enter access code 7104794. A live webcast will be available at ir.swn.com and a replay will be archived following the call.

To listen to a replay of the call, dial 877-344-7529, International 412-317-0088, or Canada Toll Free 855-669-9658. Enter replay access code 10148744. The replay will be available until November 30, 2020.

About Southwestern Energy
Southwestern Energy Company is an independent energy company engaged in natural gas, natural gas liquids and oil exploration, development, production and marketing. For additional information, visit our website www.swn.com.

Forward Looking Statement
Certain statements and information herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “attempt,” “appears,” “forecast,” “outlook,” “estimate,” “project,” “potential,” “may,” “will,” “are likely,” “guidance,” “goal,” “model,” “target,” “budget” and other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. Statements may be forward looking even in the absence of these particular words. Examples of forward-looking statements include, but are not limited to, statements regarding generation of free cash flow and synergies upon closing of the acquisition (“Proposed Transaction”) of Montage Resources Corporation (“Montage”). These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. The forward-looking statements contained in this document are largely based on our expectations for the future, which reflect certain estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions, operating trends, and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. As such, management’s assumptions about future events may prove to be inaccurate. For a more detailed description of the risks and uncertainties involved, see “Risk Factors” in our most recently filed Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other SEC filings. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events, changes in circumstances, or otherwise. These cautionary statements qualify all forward-looking statements attributable to us, or persons acting on our behalf. Management cautions you that the forward looking statements contained herein 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. Factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements herein include, but are not limited to: the timing and extent of changes in market conditions and prices for natural gas, oil and natural gas liquids (“NGLs”), including regional basis differentials and the impact of reduced demand for our production and products in which our production is a component due to governmental and societal actions taken in response to the COVID-19 pandemic; our ability to fund our planned capital investments; a change in our credit rating, an increase in interest rates and any adverse impacts from the discontinuation of the London Interbank Offered Rate; the extent to which lower commodity prices impact our ability to service or refinance our existing debt; the impact of volatility in the financial markets or other global economic factors, including the impact of COVID-19; difficulties in appropriately allocating capital and resources among our strategic opportunities; the timing and extent of our success in discovering, developing, producing and estimating reserves; our ability to maintain leases that may expire if production is not established or profitably maintained; our ability to realize the expected benefits from the Proposed Transaction; the consummation of or failure to consummate the Proposed Transaction and the timing thereof; costs in connection with the Proposed Transaction; integration of operations and results subsequent to the Proposed Transaction; our ability to transport our production to the most favorable markets or at all; the impact of government regulation, including changes in law, the ability to obtain and maintain permits, any increase in severance or similar taxes, and legislation or regulation relating to hydraulic fracturing, climate and over-the-counter derivatives; 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; 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; and any other factors listed in the reports we have filed and may file with the SEC that are incorporated by reference herein. 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)

 

2020

 

2019

 

2020

 

2019

Operating Revenues:

 

 

 

 

 

 

 

 

Gas sales

 

$

199

 

 

$

238

 

 

$

611

 

 

$

943

 

Oil sales

 

40

 

 

67

 

 

111

 

 

153

 

NGL sales

 

68

 

 

52

 

 

158

 

 

191

 

Marketing

 

219

 

 

279

 

 

645

 

 

1,004

 

Other

 

1

 

 

 

 

4

 

 

2

 

 

 

527

 

 

636

 

 

1,529

 

 

2,293

 

Operating Costs and Expenses:

 

 

 

 

 

 

 

 

Marketing purchases

 

226

 

 

288

 

 

675

 

 

1,022

 

Operating expenses

 

202

 

 

189

 

 

577

 

 

523

 

General and administrative expenses

 

31

 

 

42

 

 

89

 

 

119

 

Montage acquisition-related expenses

 

3

 

 

 

 

3

 

 

 

Restructuring charges

 

 

 

4

 

 

12

 

 

9

 

Loss on sale of operating assets

 

 

 

 

 

 

 

3

 

Depreciation, depletion and amortization

 

70

 

 

125

 

 

267

 

 

352

 

Impairments

 

361

 

 

2

 

 

2,495

 

 

8

 

Taxes, other than income taxes

 

15

 

 

15

 

 

38

 

 

51

 

 

 

908

 

 

665

 

 

4,156

 

 

2,087

 

Operating Income (Loss)

 

(381

)

 

(29

)

 

(2,627

)

 

206

 

Interest Expense:

 

 

 

 

 

 

 

 

Interest on debt

 

43

 

 

42

 

 

123

 

 

125

 

Other interest charges

 

2

 

 

2

 

 

7

 

 

5

 

Interest capitalized

 

(23

)

 

(27

)

 

(67

)

 

(84

)

 

 

22

 

 

17

 

 

63

 

 

46

 

 

 

 

 

 

 

 

 

 

Gain (Loss) on Derivatives

 

(192

)

 

100

 

 

38

 

 

220

 

Gain on Early Extinguishment of Debt

 

 

 

7

 

 

35

 

 

7

 

Other Income (Loss), Net

 

2

 

 

(2

)

 

3

 

 

(7

)

 

 

 

 

 

 

 

 

 

Income (Loss) Before Income Taxes

 

(593

)

 

59

 

 

(2,614

)

 

380

 

Provision (Benefit) for Income Taxes:

 

 

 

 

 

 

 

 

Current

 

 

 

(1

)

 

(2

)

 

(1

)

Deferred

 

 

 

11

 

 

408

 

 

(400

)

 

 

 

 

10

 

 

406

 

 

(401

)

Net Income (Loss)

 

$

(593

)

 

$

49

 

 

$

(3,020

)

 

$

781

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Common Share:

 

 

 

 

 

 

 

 

Basic

 

$

(1.04

)

 

$

0.09

 

 

$

(5.48

)

 

$

1.45

 

Diluted

 

$

(1.04

)

 

$

0.09

 

 

$

(5.48

)

 

$

1.44

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

Basic

 

571,872,413

 

 

539,221,101

 

 

551,162,559

 

 

539,315,170

 

Diluted

 

571,872,413

 

 

540,038,187

 

 

551,162,559

 

 

540,442,649

 

SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

September 30,
2020

 

December 31,
2019

ASSETS

 

(in millions)

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

95

 

 

$

5

 

Accounts receivable, net

 

239

 

 

345

 

Derivative assets

 

238

 

 

278

 

Other current assets

 

41

 

 

51

 

Total current assets

 

613

 

 

679

 

Natural gas and oil properties, using the full cost method, including $1,379 million as of September 30, 2020 and $1,506 million as of December 31, 2019 excluded from amortization

 

25,969

 

 

25,250

 

Other

 

500

 

 

520

 

Less: Accumulated depreciation, depletion and amortization

 

(23,247

)

 

(20,503

)

Total property and equipment, net

 

3,222

 

 

5,267

 

Operating lease assets

 

145

 

 

159

 

Deferred tax assets

 

 

 

407

 

Other long-term assets

 

177

 

 

205

 

Total long-term assets

 

322

 

 

771

 

TOTAL ASSETS

 

$

4,157

 

 

$

6,717

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

416

 

 

$

525

 

Taxes payable

 

47

 

 

59

 

Interest payable

 

56

 

 

51

 

Derivative liabilities

 

287

 

 

125

 

Current operating lease liabilities

 

33

 

 

34

 

Other current liabilities

 

30

 

 

54

 

Total current liabilities

 

869

 

 

848

 

Long-term debt

 

2,450

 

 

2,242

 

Long-term operating lease liabilities

 

107

 

 

119

 

Long-term derivative liabilities

 

188

 

 

111

 

Pension and other postretirement liabilities

 

35

 

 

43

 

Other long-term liabilities

 

124

 

 

108

 

Total long-term liabilities

 

2,904

 

 

2,623

 

Commitments and contingencies

 

 

 

 

Equity:

 

 

 

 

Common stock, $0.01 par value; 1,250,000,000 shares authorized; issued 649,899,653 shares as of September 30, 2020 and 585,555,923 shares as of December 31, 2019

 

7

 

 

6

 

Additional paid-in capital

 

4,882

 

 

4,726

 

Accumulated deficit

 

(4,271

)

 

(1,251

)

Accumulated other comprehensive loss

 

(32

)

 

(33

)

Common stock in treasury, 44,353,224 shares as of September 30, 2020 and December 31, 2019

 

(202

)

 

(202

)

Total equity

 

384

 

 

3,246

 

TOTAL LIABILITIES AND EQUITY

 

$

4,157

 

 

$

6,717

 

 

SOUTHWESTERN ENERGY COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

For the nine months ended

 

 

September 30,

(in millions)

 

2020

 

2019

Cash Flows From Operating Activities:

 

 

 

 

Net income (loss)

 

$

(3,020

)

 

$

781

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

Depreciation, depletion and amortization

 

267

 

 

352

 

Amortization of debt issuance costs

 

6

 

 

5

 

Impairments

 

2,495

 

 

8

 

Deferred income taxes

 

408

 

 

(400

)

(Gain) loss on derivatives, unsettled

 

272

 

 

(108

)

Stock-based compensation

 

2

 

 

6

 

Gain on early extinguishment of debt

 

(35

)

 

(7

)

Loss on sale of assets

 

 

 

3

 

Other

 

3

 

 

11

 

Change in assets and liabilities

 

 

 

 

 

 

Accounts receivable

 

106

 

 

257

 

Accounts payable

 

(129

)

 

(124

)

Taxes payable

 

(12

)

 

(3

)

Interest payable

 

3

 

 

2

 

Inventories

 

3

 

 

(2

)

Other assets and liabilities

 

38

 

 

(42

)

Net cash provided by operating activities

 

407

 

 

739

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

Capital investments

 

(700

)

 

(877

)

Proceeds from sale of property and equipment

 

2

 

 

42

 

Net cash used in investing activities

 

(698

)

 

(835

)

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

Payments on long-term debt

 

(72

)

 

(43

)

Payments on revolving credit facility

 

(1,449

)

 

 

Borrowings under revolving credit facility

 

1,415

 

 

 

Change in bank drafts outstanding

 

(9

)

 

(11

)

Proceeds from issuance of long-term debt

 

350

 

 

 

Debt issuance costs

 

(5

)

 

 

Purchase of treasury stock

 

 

 

(21

)

Proceeds from issuance of common stock

 

152

 

 

 

Cash paid for tax withholding

 

(1

)

 

(1

)

Net cash provided by (used in) financing activities

 

381

 

 

(76

)

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

90

 

 

(172

)

Cash and cash equivalents at beginning of year

 

5

 

 

201

 

Cash and cash equivalents at end of period

 

$

95

 

 

$

29

 

 

Hedging Summary
A detailed breakdown of derivative financial instruments and financial basis positions as of September 30, 2020, including the remainder of 2020 and excluding those positions that settled in the first, second and third quarters, is shown below.


Contacts

Investor Contact
Brittany Raiford
Director, Investor Relations
(832) 796-7906
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Bernadette Butler
Investor Relations Advisor
(832) 796-6079
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Corporate Offices

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8502 SW Kansas Ave
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Phone: +1 772.221.7720

 

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