EX-99.3 4 d96948dex993.htm EX-99.3 EX-99.3

Exhibit 99.3

Non-GAAP Financial Measures

Adjusted Net Income is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles) which excludes certain non-cash mark-to-market derivative financial instruments. Adjusted income from continuing operations further excludes impairment losses, income associated with certain divestments, gains and losses on disposal of discontinued operations and income and losses from discontinued operations. Energen believes that excluding the impact of these items is more useful to analysts and investors in comparing the results of operations and operational trends between reporting periods and relative to other oil and gas producing companies.

 

     Quarter Ended 9/30/2015  

Energen Net Income ($ in millions except per share data)

    Net Income     Per Diluted
Share		  

Net Income (Loss) All Operations (GAAP)

      (227.9 )      (2.89 ) 

Non-cash mark-to-market losses (net of $0.4 tax)

      0.8        0.01   

Asset impairment, other (net of $144.2 tax)

      255.7        3.25   

Loss associated w/ San Juan Basin divestment (net of $0.0 tax)

      0.0        0.00   
  

 

 

    

 

 

  

Adjusted Income from Continuing Operations (Non-GAAP)

      28.6        0.36   
  

 

 

    

 

 

  

 

     Quarter Ended 9/30/2014  

Energen Net Income ($ in millions except per share data)

    Net Income     Per Diluted
Share		  

Net Income (Loss) All Operations (GAAP)

      457.3        6.22   

Non-cash mark-to-market gains (net of $53.1 tax)

      (94.1 )      (1.28 ) 

Asset impairment, other (net of $67.6 tax)

      118.8        1.62   

Income associated w/ San Juan Basin divestment (net of $3.6 tax)

      (6.4 )      (0.09 ) 
  

 

 

    

 

 

  

Adjusted Net Income from All Operations (Non-GAAP)

      475.5        6.47   
  

 

 

    

 

 

  

Loss from discontinued operations (net of $2.5 tax)

      3.5        0.05   

Gain from discontinued operations (net of $286.3 tax)

      (440.1 )      (5.99 ) 
  

 

 

    

 

 

  

Adjusted Income from Continuing Operations (Non-GAAP)

      38.9        0.53   
  

 

 

    

 

 

  

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

Earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses (EBITDAX) is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Adjusted EBITDAX from continuing operations further excludes income associated with certain divestments, impairment losses, certain non-cash mark-to-market derivative financial instruments, income and losses from discontinued operations and gains and losses on disposal of discontinued operations. Energen believes these measures allow analysts and investors to understand the financial performance of the company from core business operations, without including the effects of capital structure, tax rates and depreciation. Further, this measure is useful in comparing the company and other oil and gas producing companies.

 

Reconciliation To GAAP Information    Quarter Ended 9/30  

($ in millions)

    2015     2014  

Energen Net Income (Loss) (GAAP)

      (227.9 )      457.3   

(Income) Loss associated w/ San Juan Basin divestment, net of tax

      0.0        (6.4 ) 
  

 

 

    

 

 

  

Adjusted Net Income from Continuing Operations (Non-GAAP)

      (227.9 )      450.8   
  

 

 

    

 

 

  

Interest expense

      10.1        11.5   

Income tax expense (benefit) *

      (130.3 )      12.5   

Depreciation, depletion and amortization *

      149.8        123.9   

Accretion expense *

      1.7        1.5   

Exploration expense *

      0.0        (2.9 ) 

Dry hole expense *

      0.5        7.5   

Adjustment for asset impairment

      399.4        178.9   

Adjustment for mark-to-market (gains) losses *

      1.2        (147.3 ) 

Adjustment for loss from discontinued operations, net of tax

      0.0        3.5   

Adjustment for gain on disposal from discontinued operations, net of tax

      0.0        (440.1 ) 
  

 

 

    

 

 

  

Energen Adjusted EBITDAX from Continuing Operations (Non-GAAP)

      204.4        199.9   
  

 

 

    

 

 

  

Note: Amounts may not sum due to rounding

 

*

Amount adjusted to exclude San Juan Basin divestment in either current or prior period. See reconciliation to GAAP Information for the Quarter Ended 9/30/2015 and 9/30/2014.

Non-GAAP Financial Measures

The consolidated statement of income excluding certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding information associated with the divestment of assets held in the San Juan Basin provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this information is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

 

Energen Net Income (Loss) Excluding San Juan Divestment

Reconciliation to GAAP Information

    Quarter Ended
September 30, 2015		  
(in thousands except per share and production data)    GAAP     $/BOE      San Juan Basin     $/BOE      Non-GAAP     $/BOE  

Revenues

               

Oil, natural gas liquids and natural gas sales

    $ 188,398         $ (2 )       $ 188,400     

Gain (loss) on derivative instruments

      107,173           —             107,173     
  

 

 

       

 

 

       

 

 

    

Total Revenues

      295,571           (2 )         295,573     
  

 

 

       

 

 

       

 

 

    

Operating Costs and Expenses

               

Oil, natural gas liquids & natural gas production

      54,598      $ 9.26         4      $ 0.00         54,594      $ 9.26   

Production and ad valorem taxes

      13,366      $ 2.27         80      $ 0.00         13,286      $ 2.25   

O&G Depreciation, depletion and amortization

      148,298      $ 25.17         —        $ 0.00         148,298      $ 25.17   

FF&E Depreciation, depletion and amortization

      1,483      $ 0.25         —        $ 0.00         1,483      $ 0.25   

Asset impairment

      399,394           —             399,394     

Exploration

      493           —             493     

General and administrative

      23,631      $ 4.01         —        $ 0.00         23,631      $ 4.01   

Accretion of discount on asset retirement obligations

      1,700           —             1,700     

(Gain) loss on sale of assets and other

      822           (22 )         844     
  

 

 

       

 

 

       

 

 

    

Total costs and expenses

      643,785           62           643,723     
  

 

 

       

 

 

       

 

 

    

Operating Income (Loss)

      (348,214 )         (64 )         (348,150 )   
  

 

 

       

 

 

       

 

 

    

Other Income/(Expense)

               

Interest Expense

      (10,084 )         —             (10,084 )   

Other income

      56           —             56     
  

 

 

       

 

 

       

 

 

    

Total other expense

      (10,028 )         —             (10,028 )   
  

 

 

       

 

 

       

 

 

    

Income (Loss) from Continuing Operations Before

               

Income Taxes

      (358,242 )         (64 )         (358,178 )   

Income tax expense (benefit)

      (130,338 )         (23 )         (130,315 )   
  

 

 

       

 

 

       

 

 

    

Income (Loss) From Continuing Operations

      (227,904 )         (41 )         (227,863 )   
  

 

 

       

 

 

       

 

 

    

Discontinued Operations, net of tax

               

Income (loss) from discontinued operations

      —             —             —       

Gain on Disposal of discontinued ops

      —             —             —       
  

 

 

       

 

 

       

 

 

    

Income from discontinued ops

      —             —             —       
  

 

 

       

 

 

       

 

 

    

Net Income (Loss)

    $ (227,904 )       $ (41 )       $ (227,863 )   
  

 

 

       

 

 

       

 

 

    

Diluted Earnings Per Average Common Share

               

Continuing Operations

    $ (2.89 )       $ —           $ (2.89 )   

Discontinued Operations

    $ —           $ —           $ —       
  

 

 

       

 

 

       

 

 

    

Net Income (Loss)

    $ (2.89 )       $ —           $ (2.89 )   
  

 

 

       

 

 

       

 

 

    

Basic earning Per Average Common Share

               

Continuing Operations

    $ (2.89 )       $ —           $ (2.89 )   

Discontinued Operations

    $ —           $ —           $ —       
  

 

 

       

 

 

       

 

 

    

Net Income (Loss)

    $ (2.89 )       $ —           $ (2.89 )   
  

 

 

       

 

 

       

 

 

    

Oil

      3,610           —             3,610     

NGL

      1,056           —             1,056     

Natural Gas

      1,227           —             1,227     
  

 

 

       

 

 

       

 

 

    

Total Production (mboe)

      5,893           —             5,893     
  

 

 

       

 

 

       

 

 

    

Total Production (boepd)

      64,054           —             64,054     
  

 

 

       

 

 

       

 

 

    

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

The consolidated statement of income excluding certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding information associated with the divestment of assets held in the San Juan Basin provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this information is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

 

Energen Net Income (Loss) Excluding San Juan Divestment

Reconciliation to GAAP Information

    Quarter Ended
September 30, 2014		  
(in thousands except per share and production data)    GAAP     $/BOE      San Juan Basin     $/BOE     Non-GAAP     $/BOE  

Revenues

              

Oil, natural gas liquids and natural gas sales

    $ 350,773         $ 43,205        $ 307,568     

Gain (loss) on derivative instruments

      147,735           5,525          142,210     
  

 

 

       

 

 

      

 

 

    

Total Revenues

      498,508           48,730          449,778     
  

 

 

       

 

 

      

 

 

    

Operating Costs and Expenses

              

Oil, natural gas liquids & natural gas production

      67,720      $ 10.18         15,887      $ 9.05        51,833      $ 10.59   

Production and ad valorem taxes

      25,729      $ 3.87         4,034      $ 2.30        21,695      $ 4.43   

O&G Depreciation, depletion and amortization

      137,773      $ 20.71         15,128      $ 8.62        122,645      $ 25.05   

FF&E Depreciation, depletion and amortization

      1,331      $ 0.20         49      $ 0.03        1,282      $ 0.26   

Asset impairment

      178,912           —            178,912     

Exploration

      8,417           3,848          4,569     

General and administrative

      27,784      $ 4.18         (606 )    ($ 0.35 )      28,390      $ 5.80   

Accretion of discount on asset retirement obligations

      1,924           394          1,530     

(Gain) loss on sale of assets and other

      747           —            747     
  

 

 

       

 

 

      

 

 

    

Total costs and expenses

      450,337           38,734          411,603     
  

 

 

       

 

 

      

 

 

    

Operating Income (Loss)

      48,171           9,996          38,175     
  

 

 

       

 

 

      

 

 

    

Other Income/(Expense)

              

Interest Expense

      (11,522 )         —            (11,522 )   

Other income

      37           —            37     
  

 

 

       

 

 

      

 

 

    

Total other expense

      (11,485 )         —            (11,485 )   
  

 

 

       

 

 

      

 

 

    

Income (Loss) from Continuing Operations Before

              

Income Taxes

      36,686           9,996          26,690     

Income tax expense (benefit)

      16,055           3,553          12,502     
  

 

 

       

 

 

      

 

 

    

Income (Loss) From Continuing Operations

      20,631           6,443          14,188     
  

 

 

       

 

 

      

 

 

    

Discontinued Operations, net of tax

              

Income (Loss) from discontinued operations

      (3,485 )         —            (3,485 )   

Gain on Disposal of discontinued ops

      440,105           —            440,105     
  

 

 

       

 

 

      

 

 

    

Income from discontinued ops

      436,620           —            436,620     
  

 

 

       

 

 

      

 

 

    

Net Income (Loss)

    $ 457,251         $ 6,443        $ 450,808     
  

 

 

       

 

 

      

 

 

    

Diluted Earnings Per Average Common Share

              

Continuing Operations

    $ 0.28         $ 0.09        $ 0.19     

Discontinued Operations

    $ 5.94         $ —          $ 5.94     
  

 

 

       

 

 

      

 

 

    

Net Income (Loss)

    $ 6.22         $ 0.09        $ 6.13     
  

 

 

       

 

 

      

 

 

    

Basic earning Per Average Common Share

              

Continuing Operations

    $ 0.28         $ 0.09        $ 0.19     

Discontinued Operations

    $ 5.98         $ 0.01        $ 5.97     
  

 

 

       

 

 

      

 

 

    

Net Income (Loss)

    $ 6.26         $ 0.10        $ 6.16     
  

 

 

       

 

 

      

 

 

    

Oil

      3,017           6          3,011     

NGL

      1,108           218          890     

Natural Gas

      2,526           1,531          995     
  

 

 

       

 

 

      

 

 

    

Total Production (mboe)

      6,651           1,755          4,896     
  

 

 

       

 

 

      

 

 

    

Total Production (boepd)

      72,293           19,076          53,217     
  

 

 

       

 

 

      

 

 

    

Note: Amounts may not sum due to rounding

Non-GAAP Financial Measures

Excluding production associated with certain divestments is a Non-GAAP financial measure (GAAP refers to generally accepted accounting principles). Energen believes excluding data associated with the divestment of assets held in the San Juan Basin provides analysts and investors useful information to understand the financial performance of the company from ongoing business operations. Further, this measure is useful in comparing the company and other oil and gas producing companies operating primarily in the Permian Basin.

 

Energen Production Excluding San Juan Divestment

Reconciliation to GAAP Information

    Quarter Ended
June 30, 2015		  
     GAAP      San Juan Basin     Non-GAAP  

Oil

      3,594         (1 )      3,595   

NGL

      1,070         10        1,060   

Natural Gas

      1,189         38        1,151   
  

 

 

     

 

 

    

 

 

  

Total Production (mboe)

      5,853         47        5,806   
  

 

 

     

 

 

    

 

 

  

Total Production (boepd)

      64,319         516        63,802   
  

 

 

     

 

 

    

 

 

  

 

Energen Production Excluding San Juan Divestment

Reconciliation to GAAP Information

    Year-to-Date Ended
December 31, 2014		  
     GAAP      San Juan Basin      Non-GAAP  

Oil

      11,814         16         11,798   

NGL

      4,103         695         3,408   

Natural Gas

      9,767         5,876         3,891   
  

 

 

     

 

 

     

 

 

  

Total Production (mboe)

      25,684         6,587         19,097   
  

 

 

     

 

 

     

 

 

  

Total Production (boepd)

      70,367         18,047         52,320   
  

 

 

     

 

 

     

 

 

  

Note: Amounts may not sum due to rounding