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» EQT Corporation CEO Discusses Q3 2011 Results - Earnings Call Transcript
As you already know, we successfully completed an IPO of EQT Midstream Partners earlier this month. Before we review this quarter’s results, I want to remind you that there was no impact to our second quarter results as the IPO did not close until July 2. next quarter, our EQT results will include the results of EQT Midstream Partners on a consolidated basis.Below in that income line in the statement of consolidated income, EQT will present the amount of net income attributable to the public unitholders under the caption “net income attributable to non-controlling interest”. Cash distributions from the partnership to the non-controlling interest will be reflected in the financing section of EQT’s statement of cash flows as a use of cash. The cash distributions to the non-controlling interest will not impact the consolidated cash flows provided by the operating activities or cash flows from investing activities. There will also be a separate press release, 10-Q and conference call to detail EQT Midstream Partners third quarter results. In just a moment, Phil will summarize our operational and financial results for the second quarter 2012, which were released this morning. Then Dave will provide an update on our strategic operational matters. Following Dave’s remarks, Dave, Phil, Randy, and Steve will all be available to answer your questions. But first, as usual, I’d like to remind you that today’s call may contain forward-looking statements related to future events and expectations. You can find factors that could cause the company’s actual results to differ materially from these forward-looking statements listed in today’s press release and under Risk Factors in the company’s Form 10-K for the year ended December 31, 2011 filed with the SEC, as updated by any subsequent Form 10-Qs, which are on file with the SEC and are available on our website.
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