California Resources Earnings Reflect ‘Fresh Start Accounting’

California Resources Corp. reported its fourth quarter earnings on Thursday after emerging from Chapter 11 bankruptcy in October.The Santa Clarita oil and gas production company entered Chapter 11 bankruptcy in August and emerged88 days later. As a result, the quarterly report includes both the “before” and “after” company, because “under fresh start accounting, the reorganized entity is considered a new reporting entity,” according to the company. Also, California Resources received $4.4 billion through a debt-to-equity swap, an amount considered income during the quarter.As a result of the financial reorganization, the company reported a net income of $3.86 billon ($8 a share) on revenue of only $301 million for the quarter ending Dec. 31.For the full year, CRC reported an adjusted net loss of $257 million (-34 cents a share) on revenue of $1.56 billion.Longtime Chief Executive Todd Stevens officially left the company on Dec. 31 and was replaced first by James Chapman as interim chief executive, then by Chief Executive Mac McFarland.“We continued our strategic repositioning efforts, making progress on sustainable cost reductions and resuming prudent capital and maintenance spending,” McFarland said in a statement. “CRC will host a Strategy Day on March 18, 2021, and we look forward to providing further details of our full-scale business review and our strategic re-alignment at that time.”Shares of California Resources (CRC) dropped Friday 63 cents, or 2.4 percent, to $25.66 on the Nasdaq on a day that market closed down a fraction of a percent.