Today’s call may also contain certain non-GAAP financial measures, please refer to this morning’s press release for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measure.
I’d now like to turn the call over to Phil Conti. Phil?
Philip P. Conti
Thanks, Pat, and good morning, everyone. As you read in the press release this morning, EQT announced second quarter 2012 earnings of $0.21 per diluted share, a $0.30 decrease from adjusted EPS in the second quarter 2011. Two price related items together reduced EQT production revenues by $15.3 million or $0.07 per share this quarter, one item was related to gas price put that should have been recognized in 2010 and 2011 resulting in a non-cash revenue reduction of $8.2 million in the second quarter of 2012.The other was a $7.1 million increase in third-party gathering, processing and transmission revenue deductions, from the sale of unused firm capacity at rates below what we are paying, and I will give you some more on that in a minute. Operating cash flow in the quarter of approximately $160 million decreased by 14% versus cash flow in the second quarter of 2011. Other than that, the operating results this quarter are fairly straightforward. In short, we had another strong operating quarter at EQT. Production and sales volumes were 28% higher than last year and a 11% higher than in the first quarter this year. NGL volumes were 10% higher than the last year and 8% higher than in the first quarter, and midstream gathering volumes were 24% higher than last year and 9% higher than in the first quarter. However, commodity prices were significantly lower than last year and that more than overwhelmed our operational progress. I would discuss that in a bit more detail in the segment results starting with EQT Production, where sales volumes continued to grow as planned. As I mentioned, production volumes were 28% higher and that growth was driven by a 74% increase in sales from our Marcellus Shale play. Read the rest of this transcript for free on seekingalpha.com