QEP Resources, Inc.

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SEC Filings

8-K
QEP RESOURCES, INC. filed this Form 8-K on 07/25/2018
Entire Document
 


Adjusted Net Income (Loss)

This release contains references to the non-GAAP measure of Adjusted Net Income (Loss). Management defines Adjusted Net Income (Loss) as earnings excluding gains and losses from asset sales, unrealized gains and losses on derivative contracts, asset impairments and certain other items. Management uses Adjusted Net Income (Loss) to evaluate QEP’s financial performance and trends, make operating decisions, and allocate resources. Management believes the measure is useful supplemental information for investors because it eliminates the impact of certain nonrecurring, non-cash and/or other items that management does not consider as indicative of QEP’s performance from period to period. QEP’s Adjusted Net Income (Loss) may be determined or calculated differently than similarly titled measures of other companies in our industry, which would reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies.

Below is a reconciliation of Net Income (Loss) (a GAAP measure) to Adjusted Net Income (Loss). This non-GAAP measure should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP.

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
(in millions, except earnings per share)
Net income (loss)
$
(336.0
)
 
$
45.4

 
$
(389.6
)
 
$
122.3

Adjustments to net income (loss)
 
 
 
 
 
 
 
Unrealized (gains) losses on derivative contracts
33.6

 
(100.3
)
 
43.6

 
(277.6
)
Income taxes on unrealized (gains) losses on derivative contracts(1)
(7.0
)
 
37.2

 
(10.3
)
 
103.5

Net (gain) loss from asset sales, inclusive of restructuring costs
3.9

 
(19.8
)
 
0.4

 
(19.8
)
Income taxes on net (gain) loss from asset sales, inclusive of restructuring costs(1)
(0.8
)
 
7.3

 
(0.1
)
 
7.4

Impairment
403.7

 

 
404.4

 
0.1

Income taxes on impairment(1)
(83.6
)
 

 
(95.4
)
 

Total after tax adjustments to net income
349.8


(75.6
)
 
342.6

 
(186.4
)
Adjusted Net Income (Loss)
$
13.8


$
(30.2
)
 
$
(47.0
)
 
$
(64.1
)
 
 
 
 
 
 
 
 
Earnings (Loss) per Common Share
 
 
 
 
 
 
 
Diluted earnings per share
$
(1.42
)
 
$
0.19

 
$
(1.63
)
 
$
0.51

Diluted after-tax adjustments to net income (loss) per share
1.48

 
(0.31
)
 
1.43

 
(0.78
)
Diluted Adjusted Net Income per share
$
0.06

 
$
(0.12
)
 
$
(0.20
)
 
$
(0.27
)
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding
 
 
 
 
 
 
 
Diluted
237.0

 
240.6

 
238.9

 
240.5

____________________________
(1) 
Income tax impact of adjustments is calculated using QEP’s statutory rate of 20.7% and 37.1% for the three months ended June 30, 2018 and 2017, respectively and QEP's effective tax rate of 23.6% and 37.3% for the six months ended June 30, 2018 and 2017, respectively.

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