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Bill Barrett Corp. Reports Operating Results (10-K)

February 23, 2012 | About:
10qk

10qk

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Bill Barrett Corp. (BBG) filed Annual Report for the period ended 2011-12-31.

Bill Barrett Cp has a market cap of $1.39 billion; its shares were traded at around $27.7 with a P/E ratio of 20.5 and P/S ratio of 2. Bill Barrett Cp had an annual average earning growth of 19.7% over the past 5 years.
This is the annual revenues and earnings per share of BBG over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of BBG.


Highlight of Business Operations:

Income Tax Expense. Income tax expense totaled $17.7 million and $48.0 million for the years ended December 31, 2011 and 2010, resulting in effective tax rates of 36.5% and 37.3% in 2011 and 2010, respectively. Our effective tax rate differs from the federal statutory rate primarily because we recorded stock-based compensation expense and other operating expenses that are not deductible for income tax purposes as well as the effect of state income taxes. The effective tax rate decrease from 2010 to 2011 was primarily the result of a net reduction in permanent differences affecting the tax rate calculation, principally the increase in tax deductible compensation related to incentive stock options. Additionally, a greater proportion of our operating revenue was attributable to lower tax rate jurisdictions, thereby decreasing the overall statutory tax rate. The effect of this rate decrease on our prior year net deferred tax liability was included in income tax expense for 2011. At December 31, 2011, we had approximately $125.3 million of federal tax net operating loss carryforwards, or “NOLs”, which expire through 2031. We also had a federal alternative minimum tax credit carryforward of $0.1 million, which has no expiration date. We believe it is more likely than not that we will use these tax attributes to

also included a decrease of $3.4 million primarily related to a surplus of ad valorem taxes withheld from 2008 based on the estimated mill levy rates compared to the actual rates. Production taxes as a percentage of oil and natural gas sales before hedging adjustments was 6.0% for the year ended December 31, 2010, which included a reduction of 0.4% related to the nonrecurring item associated with the Utah severance tax. For the year ended December 31, 2009, production taxes as a percentage of oil and natural gas sales before hedging adjustments was 3.6%, which included a reduction of 2.3% related to these nonrecurring items associated with the Colorado severance and ad valorem taxes.

Income Tax Expense. Income tax expense totaled $48.0 million for the year ended December 31, 2010 and $38.0 million for the year ended December 31, 2009, resulting in effective tax rates of 37.3% and 43.0% in 2010 and 2009, respectively. Our effective tax rate differs from the federal statutory rate primarily because we recorded stock-based compensation expense and other operating expenses that are not deductible for income tax purposes as well as the effect of state income taxes. The effective tax rate decrease from 2009 to 2010 was primarily the result of a net reduction in permanent differences affecting the tax rate calculation, principally the increase in tax deductible compensation related to incentive stock options. Additionally, a greater proportion of our operating revenue was attributable to lower tax rate jurisdictions, thereby decreasing the overall statutory tax rate. The effect of this rate decrease on our prior year net deferred tax liability was included in income tax expense for 2010. At December 31, 2010, we had approximately $94.8 million of federal tax net operating loss carryforwards, or “NOLs”, which expire through 2029. We also had a federal alternative minimum tax credit carryforward of $0.1 million, which has no expiration date. We believe it is more likely than not that we will use these tax attributes to offset and reduce current tax liabilities in future years.

At December 31, 2011, the estimated fair value of all of our commodity derivative instruments was a net asset of $83.3 million, comprised of current and noncurrent assets and liabilities, including a fair value liability of $7.6 million for basis only swaps and a fair value liability of $0.02 million for NGL swaps. We will reclassify the appropriate cash flow hedge amounts from AOCI to gains and losses included in natural gas and oil production operating revenues as the hedged production quantities are produced. Based on current projected market prices, the net amount of existing unrealized after-tax income relating to cash flow hedges as of December 31, 2011 to be reclassified from AOCI to earnings in the next 12 months would be a gain of approximately $50.8 million. Any actual increase or decrease in revenues will depend upon market conditions over the period during which the forecasted transactions occur. We anticipate that all originally forecasted transactions related to our derivatives that continue to be accounted for as cash flow hedges will occur by the end of the originally specified time periods.

As a result of the various swap and collar contracts that settled during the years ended December 31, 2011, 2010 and 2009, the Company recognized a net increase in natural gas production revenues of $73.9 million, $133.2 million and $265.1 million for the years ended December 31, 2011, 2010 and 2009, respectively. The Company also recognized a decrease in oil production revenues related to these contracts of $2.0 million for the year ended December 31, 2011 and increases of $2.2 million and $6.7 million during the years ended December 31, 2010 and 2009, respectively.

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