Adjusted net loss for full-year 2012 – also a non-GAAP financial measure – was $46 million, or $0.27 per diluted share, compared to net income of $20 million, or $0.12 per diluted share for full-year 2011. Including the impact of non-cash impairments and other non-operational items, the net loss for full-year 2012 was $2.5 billion, or $14.61 per diluted share compared to net income of $90 million, or $0.52 per diluted share for full-year 2011.

The presentation of quarterly and full-year results are preliminary as the company continues to analyze the non-cash accounting treatment of its hedge portfolio and deferred tax balances. The company expects to issue its final results for the year and quarters upon completion of that undertaking.

Impairments and Non-operational Items Included in Fourth-Quarter and Full-Year 2012 Results

Quicksilver's fourth-quarter 2012 results include a $1.2 billion non-cash ceiling test impairment, of which 63% is attributable to a change in accounting policy. The company elected at year-end to discontinue hedge accounting to improve the comparability of financial results to its peers, and consequently, the value of the hedge portfolio based on SEC reserve pricing can no longer be included as part of the full-cost ceiling test. The book value of Quicksilver's derivative portfolio at December 31, 2012 was $201 million.

The remaining 37% of the impairment is attributable to 2012 reserve revisions related to price, performance and the reclassification of existing proved undeveloped reserves (PUD) that are not expected to be developed within the SEC's prescribed five-year timeframe due to a reduction in drilling activity amid depressed natural gas and NGL prices.

Fourth-quarter 2012 results also include a $326 million non-cash valuation allowance of U.S. deferred tax assets related to the likelihood of recoverability of future tax assets, which is driven by the continued generation of net-operating losses as a result of the non-cash impairments.

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