Item 2.02   Results of Operations and Financial Condition.
On July 30, 2020, we issued a press release with respect to our 2020 second
quarter earnings. The press release is furnished as Exhibit 99.1 to this Current
Report. The press release contains certain measures (discussed below) which may
be deemed "non-GAAP financial measures" as defined in Item 10 of Regulation S-K
of the Securities Exchange Act of 1934, as amended (the Exchange Act). In each
case, the most directly comparable GAAP financial measure and information
reconciling the GAAP and non-GAAP measures is also included in the press
release.
Exhibit 99.1 shall not be deemed to be "filed" for the purposes of Section 18 of
the Exchange Act, and will not be incorporated by reference into any
registration statement filed under the Securities Act of 1933, as amended,
unless specifically identified as being incorporated therein by reference.
From time to time management discloses Return on Capital Employed, Discretionary
Cash Flow, Free Cash Flow, EBITDAX, Adjusted Net Income, Adjusted Earnings per
Share, Earnings per Share Excluding Selected Items and Net Debt calculations and
ratios. These non-GAAP financial measures, to the extent included in
Exhibit 99.1, are reconciled to the most comparable GAAP financial measures in
Exhibit 99.1.
Return on Capital Employed (ROCE) is defined as Adjusted Net Income (defined
below) plus after-tax net interest expense divided by average capital employed,
which is defined as total debt plus stockholders' equity. ROCE is presented
based on management's belief that this non-GAAP measure is useful information to
investors when evaluating our profitability and the efficiency with which
management has employed capital over time. ROCE is not a measure of financial
performance under GAAP and should not be considered an alternative to net
income, as defined by GAAP.
Discretionary Cash Flow is defined as net cash provided by operating activities
excluding changes in assets and liabilities. Discretionary Cash Flow is widely
accepted as a financial indicator of an oil and gas company's ability to
generate cash which is used to internally fund exploration and development
activities, return capital to shareholders through dividends and share
repurchases, and service debt. Discretionary Cash Flow is presented based on
management's belief that this non-GAAP measure is useful information to
investors when comparing our cash flows with the cash flows of other companies
that use the full cost method of accounting for oil and gas producing activities
or have different financing and capital structures or tax rates. Discretionary
Cash Flow is not a measure of financial performance under GAAP and should not be
considered as an alternative to cash flows from operating activities or net
income, as defined by GAAP, or as a measure of liquidity.
Free Cash Flow is defined as Discretionary Cash Flow (defined above) less
capital expenditures and investment in equity method investments. Free Cash Flow
is an indicator of a company's ability to generate cash flow after spending the
money required to maintain or expand its asset base. Free Cash Flow is presented
based on management's belief that this non-GAAP measure is useful information to
investors when comparing our cash flows with the cash flows of other companies.
Free Cash Flow is not a measure of financial performance under GAAP and should
not be considered as an alternative to cash flows from operating activities or
net income, as defined by GAAP, or as a measure of liquidity.
EBITDAX is defined as net income plus interest expense, other expense, income
tax expense, depreciation, depletion and amortization (including impairments),
exploration expense, gain and loss on sale of assets, non-cash gain and loss on
derivative instruments, earnings and loss on equity method investments, cash
distributions received from equity method investments and stock-based
compensation expense. EBITDAX is presented based on management's belief that
this non-GAAP measure is useful information to investors when evaluating our
ability to internally fund exploration and development activities and to service
or incur debt without regard to financial or capital structure. EBITDAX is not a
measure of financial performance under GAAP and should not be considered as an
alternative to cash flows from operating activities or net income, as defined by
GAAP, or as a measure of liquidity.
Adjusted Net Income and Adjusted Earnings per Share are presented based on
management's belief that these non-GAAP measures enable a user of the financial
information to understand the impact of these items on reported results.
Adjusted Net Income is defined as net income plus gain and loss on sale of
assets, gain and loss on derivative instruments, stock-based compensation
expense, severance expense, interest expense related to income tax reserves and
tax effect on selected items. Additionally, this presentation provides a
beneficial comparison to similarly adjusted measurements of prior
periods. Adjusted Net Income and Adjusted Earnings per Share are not measures of
financial performance under GAAP and should not be considered as an alternative
to net income and earnings per share, as defined by GAAP.
The total debt to total capitalization ratio is calculated by dividing total
debt by the sum of total debt and total stockholders' equity. This ratio is a
measurement which is presented in our annual and interim filings and management
believes this ratio is useful to investors in determining our leverage. Net Debt
is calculated by subtracting cash and cash equivalents from total debt. Net Debt
and the Net Debt to Adjusted Capitalization ratio are non-GAAP measures which
management believes are also useful to investors since we have the ability to
and may decide to use a portion of our cash and cash

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equivalents to retire debt. Additionally, as we may incur additional expenditures without increasing debt, it is appropriate to apply cash and cash equivalents to debt in calculating the Net Debt to Adjusted Capitalization ratio.


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Item 9.01                      Financial Statements and Exhibits.
(d)                 Exhibits

99.1 Press release issued by Cabot Oil & Gas Corporation dated July 30, 2020 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


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