Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

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112 Denbury Resources Inc. 2009 Annual ReportNote 17. Unaudited Quarterly InformationIn thousands, except per share amounts March 31 June 30 September 30 December 312009Revenues $ 171,821 $ 215,362 $ 225,415 $ 269,895Expenses (1) 202,734 358,060 185,987 264,558Net income (loss) (18,297) (87,240) 26,885 3,496Net income (loss) per share:Basic (0.07) (0.35) 0.11 0.01Diluted (0.07) (0.35) 0.11 0.01Cash flow from operations 112,619 148,170 145,645 124,165Cash flow used for investing activities (2) (509,539) (65,301) (161,550) (233,324)Cash flow provided by (used for) financing activities (3) 398,058 (41,117) (22,365) 108,0612008Revenues $ 317,255 $ 417,049 $ 407,474 $ 223,924Expenses (4) 201,446 234,310 156,537 154,535Net income 73,002 114,053 157,548 43,793Net income per share:Basic 0.30 0.47 0.64 0.18Diluted 0.29 0.45 0.63 0.18Cash flow from operations 206,257 164,072 262,442 141,748Cash flow used for investing activities (5) (163,688) (218,384) (235,605) (376,982)Cash flow provided by (used for) financing activities (6) (28,637) 127,282 1,464 76,993(1) Includes commodity derivative expense (income) of $20.5 million during the first quarter of 2009, $152.8 million during the second quarter of 2009, $3.7 millionduring the third quarter of 2009, and $59.2 million during the fourth quarter of 2009. Also includes expenses related to the incentive compensation awards for themanagement of Genesis in the amount of $14.2 million in 2009 (see Note 3, “Related Party Transactions – Genesis.”). In June 2009, we expensed a $10.0 million($3.65 million in cash and $6.35 million of the Company’s 9.75% Senior Subordinated Notes due 2016) compensation charge associated with retirement of GarethRoberts as CEO and President of the Company. During the fourth quarter of 2009, we incurred $8.7 million in expenses related to the Encore acquisition (see Note 2,“Acquisitions and Divestitures.”)(2) During the first quarter of 2009, we made cash payments of approximately $197.9 million associated with the Hasting Field Acquisition. During June and July of 2009,we received cash payments of approximately $197.5 million and $62.3 million, respectively, for the sale of 60% of our Barnett Shale natural gas assets. During thefourth quarter of 2009, we received cash payments of approximately $210.0 million for the sale of our remaining 40% interests in our Barnett Shale natural gasassets. During the fourth quarter of 2009, we acquired Conroe Field for a cash payment of approximately $254.2 million and 11,620,000 shares of Denbury commonstock (see Note 2, “Acquisitions and Divestitures.”)(3) In the first quarter of 2009, we issued $420 million of 9.75% Senior Subordinated Notes due 2016, and received net proceeds of $381.4 million (see Note 6,“Long-term Debt.”)(4) Includes commodity derivative expense (income) of $46.8 million in the first quarter of 2008, $58.8 million in the second quarter of 2008, ($62.0) million in the thirdquarter of 2008, and ($243.6) million in the fourth quarter of 2008. We had a full cost ceiling write-down of $226 million during the fourth quarter of 2008. In addition,during the third quarter of 2008, we expensed approximately $30 million associated with a non-refundable deposit on a cancelled acquisition.(5) In December 2007 and February 2008, we received cash proceeds of $108.6 million and $48.9 million, respectively, for the sale of our Louisiana natural gas assets(see Note 2, “Acquisitions and Divestitures.”)(6) In the second quarter of 2008, we received $225 million in cash from two financing leases entered into with Genesis (see Note 3, “Related Party Transactions —Genesis”). Also during 2008, we had net borrowings of $75 million during the fourth quarter, and net payments of $39 million during the first quarter, and$111 million in the second quarter, all under our senior bank loan.Form 10-K Part IINotes to Consolidated Financial Statements
Denbury Resources Inc. 2009 Annual Report 113Item 9. Changes in and Disagreements with Accountantson Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresAs of the end of the period covered by this report, an evaluation of the effectiveness of the design and operation ofthe Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) wasperformed under the supervision and with the participation of the Company’s management, including our ChiefExecutive Officer and our Chief Financial Officer. Based on that evaluation, the Company’s Chief Executive Officer andour Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as ofDecember 31, 2009 to ensure: that information required to be disclosed in the reports it files and submits under theSecurities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periodsspecified in the SEC’s rules and forms; and that information that is required to be disclosed under the Exchange Actis accumulated and communicated to the Company’s management, including our Chief Executive Officer and our ChiefFinancial Officer, as appropriate to allow timely decisions regarding required disclosure.Evaluation of Changes in Internal Control over Financial ReportingUnder the supervision and with the participation of our management, including our Chief Executive Officer and ourChief Financial Officer, we have determined that, during the fourth quarter of fiscal 2009, there were no changes in ourinternal control over financial reporting that have materially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.Management’s Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reportingas defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Under the supervisionand with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer,we assessed the effectiveness of our internal control over financial reporting as of the end of the period covered by thisreport based on the framework in “Internal Control—Integrated Framework” issued by the Committee of SponsoringOrganizations of the Treadway Commission. Based on that assessment, our Chief Executive Officer and our ChiefFinancial Officer concluded that our internal control over financial reporting was effective to provide reasonableassurance regarding the reliability of our financial reporting and the preparation of our financial statements for externalpurposes in accordance with U.S. generally accepted accounting principles.The effectiveness of the Company’s internal control over financial reporting as of December 31, 2009, has beenaudited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their reportwhich appears herein.Important ConsiderationsThe effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subjectto various inherent limitations, including cost limitations, judgments used in decision making, assumptions about thelikelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may becomeinadequate because of changes in conditions and the risk that the degree of compliance with policies or proceduresmay deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosurecontrols and procedures or internal control over financial reporting will be successful in preventing all errors or fraud orin making all material information known in a timely manner to the appropriate levels of management.Item 9B. Other InformationNone.Form 10-K Part II
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Interactive 2009 Annual Report (PDF 7.56 MB) - Denbury Resources ...

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