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Denbury Resources Inc. (NYSE: DNR) ("Denbury" or the "Company") today announced its second quarter 2011 financial and operating results.
The Company recognized net income during the second quarter of 2011 of $259.2 million, or $0.65 per basic common share, as compared to net income of $135.4 million, or $0.34 per basic common share, in the second quarter of 2010. Net income, as adjusted to exclude non-cash derivative gains and other non-cash or unusual items, was approximately $146.7 million, or $0.37 per basic common share, in the second quarter of 2011 versus $72.9 million, or $0.18 per basic common share, in the prior year second quarter. The primary non-cash item included in second quarter of 2011 and 2010 results was a $183.8 million ($114.0 million net of taxes) and $125.9 million ($78.0 million net of taxes), respectively, non-cash gain on the change in the fair value of derivatives.
See the accompanying schedules for a reconciliation of “net income” as defined by generally accepted accounting principles (“GAAP”) to the non-GAAP measure “adjusted net income.” The Company completed the acquisition of Encore on March 9, 2010; therefore, the operating results for the comparative first six months of 2010 only include amounts associated with Encore for the period from March 9, 2010 to June 30, 2010.
Adjusted cash flow from operations (cash flow from operations before changes in assets and liabilities, a non-GAAP measure) for the second quarter of 2011 was a Company quarterly record of $344.1 million, as compared to adjusted cash flow from operations of $240.9 million in the second quarter of 2010, with the increase due primarily to higher oil prices during the second quarter of 2011. Cash flow from operations, the GAAP measure, totaled $398.5 million during the second quarter of 2011, compared to $271.1 million during the second quarter of 2010. Adjusted cash flow from operations and cash flow from operations differ in that the latter measure includes the changes in receivables, accounts payable and accrued liabilities during the quarter (see the accompanying schedules for a reconciliation of the GAAP measure “net cash flow from operations,” to “adjusted cash flow from operations,” which is the non-GAAP measure discussed above). Net decreases in operating assets and liabilities of $54.5 million during the second quarter of 2011 were primarily due to increases in accounts payable and accrued liabilities, and an increase in oil and gas production payable due to higher oil prices.