• Archrock Reports First Quarter 2024 Results

    Source: Nasdaq GlobeNewswire / 30 Apr 2024 16:32:59   America/New_York

    HOUSTON, April 30, 2024 (GLOBE NEWSWIRE) -- Archrock, Inc. (NYSE: AROC) (“Archrock”,” the “Company,” “we,” “us,” “our”) today reported results for the first quarter 2024.

    First Quarter 2024 Highlights

    • Revenue for the first quarter of 2024 was $268.5 million compared to $229.8 million in the first quarter of 2023.
    • Net income for the first quarter of 2024 was $40.5 million compared to $16.5 million in the first quarter of 2023.
    • Adjusted EBITDA (a non-GAAP measure defined below) for the first quarter of 2024 was $131.0 million compared to $97.2 million in the first quarter of 2023.
    • Leverage ratio at the end of the first quarter of 2024 was 3.2x compared to 4.1x at the end of the first quarter of 2023.
    • Declared a quarterly dividend of $0.165 per common share for the first quarter of 2024, 10% higher compared to the first quarter of 2023, resulting in dividend coverage of 3.2x.
    • Raised 2024 Adjusted EBITDA guidance to a range of $510 million to $540 million from $500 million to $530 million.

    Management Commentary and Outlook

    “Momentum in Archrock’s earnings power is carrying into 2024, reflecting our excellent operating execution, high-quality asset base and innovative processes and technology,” said Brad Childers, Archrock’s President and Chief Executive Officer. “We continued to deliver meaningful growth in quarterly revenue, gross margin and adjusted EBITDA. In addition, strong cash flow is funding high-return investment in our fleet and increased return of capital to investors, while we also continue to maintain a sector-leading balance sheet and excellent financial flexibility.

    “As we look to the balance of 2024, we expect to sustain historically high levels of utilization, pricing and profitability. Confidence in our business and the opportunity-rich market are enabling us to raise the midpoint of our Adjusted EBITDA guidance for the full year.

    “Expanding on the favorable and durable macro environment, strong oil prices are driving sustainable compression demand in our key associated gas markets, led by the Permian Basin. In addition, Archrock as well as producers, midstreamers and others in the compression industry continue to demonstrate prudent capital discipline. Longer term, we believe natural gas has tremendous potential to meet growing energy needs, particularly for LNG exports and domestic power generation and we are excited to be a crucial part of the value chain to provide cleaner, affordable and reliable energy to the U.S. and the world,” concluded Childers.

    First Quarter 2024 Financial Results

    Archrock’s first quarter 2024 net income of $40.5 million included a non-cash long-lived and other asset impairment of $2.6 million. Archrock’s first quarter 2023 net income of $16.5 million included a non-cash long-lived and other asset impairment of $2.6 million and restructuring charges of $1.0 million.

    Adjusted EBITDA for the first quarter of 2024 and 2023 included $2.4 million and $3.6 million, respectively, in net gains related to the sale of compression and other assets.

    Contract Operations

    For the first quarter of 2024, contract operations segment revenue totaled $223.1 million, an increase of 19% compared to $187.7 million in the first quarter of 2023. Gross margin (a non-GAAP measure defined below) was $145.3 million for the first quarter of

    2024, up 34% from $108.3 million in the first quarter of 2023. Gross margin percentage was 65% for the first quarter of 2024, compared to 58% in the first quarter of 2023. Total operating horsepower at the end of the first quarter of 2024 was 3.6 million compared to 3.5 million at the end of the first quarter of 2023. Utilization at the end of the first quarter of 2024 was 95%, compared to 94% at the end of the first quarter of 2023.

    On a sequential basis, first quarter 2024 exit utilization was down slightly as we took delivery of new build units totaling 19,500 horsepower in March 2024 that were included in total available horsepower but not reflected in total operating horsepower as the units did not begin generating revenue until April 2024.

    Aftermarket Services

    For the first quarter of 2024, aftermarket services segment revenue totaled $45.4 million, compared to $42.1 million in the first quarter of 2023. Gross margin of $10.4 million for the first quarter of 2024 increased 27% compared to $8.2 million in the first quarter of 2023. Gross margin percentage was 23% for the first quarter of 2024, compared to 19% for the first quarter of 2023.

    Balance Sheet

    Long-term debt was $1.6 billion at March 31, 2024 and our available liquidity totaled $477.7 million. Our leverage ratio was 3.2x, compared to 4.1x as of March 31, 2023.

    Shareholder Returns

    Quarterly Dividend

    Our Board of Directors recently declared a quarterly dividend of $0.165 per share of common stock, or $0.66 per share on an annualized basis. Dividend coverage in the first quarter of 2024 was 3.2x. The first quarter 2024 dividend will be paid on May 14, 2024 to stockholders of record at the close of business on May 7, 2024.

    Share Repurchase Program

    During the quarter ended March 31, 2024, Archrock repurchased 82,972 common shares at an average price of $14.83 per share, for an aggregate of approximately $1.2 million. Through March 31, 2024, the Company has repurchased 833,346 common shares at an average price of $12.11 per share for an aggregate of $10.1 million.  

    The Board of Directors approved an extension of the Company’s share repurchase program (“Share Repurchase Program”) upon expiry of the previous authorization on April 27, 2024, for an additional 24-month period. In connection with the extension, the Board of Directors replenished the amount of shares authorized for repurchase under the Share Repurchase Program, resulting in available capacity of $50 million.

    2024 Annual Guidance

    Archrock is providing updated annual guidance as listed below. All figures are in thousands, except percentages and ratios:

            
      Full Year 2024 Guidance 
       Low  High 
    Net income (1)  $144,000 $174,000 
    Adjusted EBITDA(2)  510,000  540,000 
    Cash available for dividend(3)(4)  300,000  320,000 
            
    Segment       
    Contract operations revenue $890,000 $915,000 
    Contract operations gross margin percentage  65% 66%
    Aftermarket services revenue $175,000 $185,000 
    Aftermarket services gross margin percentage  20% 21%
            
    Selling, general and administrative $124,000 $120,000 
            
    Capital expenditures       
    Growth capital expenditures $190,000 $190,000 
    Maintenance capital expenditures  80,000  85,000 
    Other capital expenditures  20,000  25,000 


    (1)   2024 annual guidance for net income includes $3.0 million of long-lived and other asset impairment as of March 31, 2024, but does not include the impact of any such future costs, because due to its nature, it cannot be accurately forecasted. Long-lived and other asset impairment does not impact Adjusted EBITDA or cash available for dividend, however it is a reconciling item between these measures and net income. Long-lived and other asset impairment for the years 2023 and 2022 was $12.0 million and $21.4 million, respectively.
    (2)   Management believes Adjusted EBITDA provides useful information to investors because this non-GAAP measure, when viewed with our GAAP results and accompanying reconciliations, provides a more complete understanding of our performance than GAAP results alone. Management uses this non-GAAP measure as a supplemental measure to review current period operating performance, comparability measure and performance measure for period-to-period comparisons.
    (3)   Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends.
    (4)   A forward-looking estimate of cash provided by operating activities is not provided because certain items necessary to estimate cash provided by operating activities, including changes in assets and liabilities, are not estimable at this time. Changes in assets and liabilities were $(28.0) million and $(24.5) million for 2023 and 2022, respectively.


    Summary Metrics

    (in thousands, except percentages, per share amounts and ratios)

               
      Three Months Ended  
      March 31,  December 31,  March 31,  
         2024    2023    2023 
    Net income $40,532 $33,002 $16,485 
    Adjusted EBITDA $131,024 $120,263 $97,199 
               
    Contract operations revenue $223,051 $213,022 $187,745 
    Contract operations gross margin $145,308 $137,062 $108,263 
    Contract operations gross margin percentage  65%   64%   58%
               
    Aftermarket services revenue $45,437 $46,571 $42,089 
    Aftermarket services gross margin $10,437 $10,239 $8,181 
    Aftermarket services gross margin percentage  23%   22%   19%
               
    Selling, general, and administrative $31,665 $33,007 $26,425 
               
    Net cash provided by operating activities $137,702 $71,719 $87,856 
    Cash available for dividend $82,026 $71,484 $46,247 
    Cash available for dividend coverage  3.2x 2.8x 2.0x
               
    Free cash flow $51,779 $47,385 $30,190 
    Free cash flow after dividend $25,779 $23,195 $6,338 
               
    Total available horsepower (at period end)  3,780  3,759  3,729 
    Total operating horsepower (at period end)  3,593  3,607  3,504 
    Horsepower utilization spot (at period end)  95.0%   96.0%   94.0%


    Conference Call Details

    Archrock will host a conference call on Wednesday, May 1, 2024, to discuss first quarter 2024 financial results. The call will begin at 12:00 p.m. Eastern Time.

    To listen to the call via a live webcast, please visit Archrock’s website at www.archrock.com. The call will also be available by dialing 1 (800) 715-9871 in the United States or 1 (646) 307-1963 for international calls. The access code is 4749623.

    A replay of the webcast will be available on Archrock’s website for 90 days following the event.

    *****

    Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) excluding interest expense, income taxes, depreciation and amortization, long-lived and other asset impairment, unrealized change in fair value of investment in unconsolidated affiliate, restructuring charges, non-cash stock-based compensation expense, amortization of capitalized implementation costs and other items. A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, and a reconciliation of our full year 2024 Adjusted EBITDA guidance to net income appear below.

    Gross margin, a non–GAAP measure, is defined as revenue less cost of sales (excluding depreciation and amortization). Gross margin percentage is defined as gross margin divided by revenue. A reconciliation of gross margin to net income, the most directly comparable GAAP measure, appears below.

    Cash available for dividend, a non-GAAP measure, is defined as net income (loss) excluding interest expense, income taxes, depreciation and amortization, long-lived and other asset impairment, unrealized change in fair value of investment in unconsolidated affiliate, restructuring charges, non-cash stock-based compensation expense, amortization of capitalized implementation costs and other items, less maintenance capital expenditures, other capital expenditures, cash taxes and cash interest expense. Reconciliations of cash available for dividend to net income and net cash provided by operating activities, the most directly comparable GAAP measures, and a reconciliation of our updated full year 2024 cash available for dividend guidance to net income appear below.

    Free cash flow, a non-GAAP measure, is defined as net cash provided by operating activities plus net cash provided by (used in) investing activities. A reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP measure, appears below.

    Free cash flow after dividend, a non-GAAP measure, is defined as net cash provided by operating activities plus net cash provided by (used in) investing activities less dividends paid to stockholders. A reconciliation of free cash flow after dividend to net cash provided by operating activities, the most directly comparable GAAP measure, appears below.

    About Archrock

    Archrock is an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping its customers produce, compress and transport natural gas in a safe and environmentally responsible way. Headquartered in Houston, Texas, Archrock is a premier provider of natural gas compression services to customers in the energy industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment. For more information on how Archrock embodies its purpose, WE POWER A CLEANER AMERICA, visit www.archrock.com.

    Forward-Looking Statements

    All statements in this release (and oral statements made regarding the subjects of this release) other than historical facts are forward–looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward–looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors that could cause actual results to differ materially from such statements, many of which are outside the control of Archrock, Inc. Forward–looking information includes, but is not limited to statements regarding: guidance or estimates related to Archrock’s results of operations or of financial condition; fundamentals of Archrock’s industry, including the attractiveness of returns and valuation, stability of cash flows, demand dynamics and overall outlook, and Archrock’s ability to realize the benefits thereof; Archrock’s expectations regarding future economic, geopolitical and market conditions and trends; Archrock’s operational and financial strategies, including planned growth, coverage and leverage reduction strategies, Archrock’s ability to successfully effect those strategies, and the expected results therefrom; Archrock’s financial and operational outlook; demand and growth opportunities for Archrock’s services; structural and process improvement initiatives, the expected timing thereof, Archrock’s ability to successfully effect those initiatives and the expected results therefrom; the operational and financial synergies provided by Archrock’s size; and statements regarding Archrock’s dividend policy.

    While Archrock believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. The factors that could cause results to differ materially from those indicated by such forward-looking statements include, but are not limited to: risks related to pandemics and other public health crises; an increase in inflation; ongoing international conflicts and tensions; risks related to our operations; competitive pressures; inability to make acquisitions on economically acceptable terms; uncertainty to pay dividends in the future; risks related to a substantial amount of debt and our debt agreements; inability to access the capital and credit markets or borrow on affordable terms to obtain additional capital; inability to fund purchases of additional compression equipment; vulnerability to interest rate increases; uncertainty relating to the phasing out of London Interbank Offered Rate; erosion of the financial condition of our customers; risks related to the loss of our most significant customers; uncertainty of the renewals for our contract operations service agreements; risks related to losing management or operational personnel; dependence on particular suppliers and vulnerability to product shortages and price increases; information technology and cybersecurity risks; tax-related risks; legal and regulatory risks, including climate-related and environmental, social and governance risks.

    These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Archrock’s Annual Report on Form 10-K for the year ended December 31, 2023, Archrock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and those set forth from time to time in Archrock’s filings with the Securities and Exchange Commission, which are available at www.archrock.com. Except as required by law, Archrock expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

    SOURCE: Archrock, Inc.

    For information, contact:

    Megan Repine
    VP of Investor Relations
    281-836-8360
    investor.relations@archrock.com



    Archrock, Inc.
    Unaudited Condensed Consolidated Statements of Operations
    (in thousands, except per share amounts)
              
      Three Months Ended
      March 31,  December 31,  March 31, 
         2024    2023    2023
    Revenue:         
    Contract operations $223,051  $213,022  $187,745 
    Aftermarket services  45,437   46,571   42,089 
    Total revenue  268,488   259,593   229,834 
              
    Cost of sales (excluding depreciation and amortization):            
    Contract operations  77,743   75,960   79,482 
    Aftermarket services  35,000   36,332   33,908 
    Total cost of sales (excluding depreciation and amortization)  112,743   112,292   113,390 
              
    Selling, general and administrative  31,665   33,007   26,425 
    Depreciation and amortization  42,835   42,695   40,181 
    Long-lived and other asset impairment  2,568   3,658   2,569 
    Restructuring charges     221   1,047 
    Interest expense  27,334   27,938   26,581 
    Gain on sale of assets, net  (2,381)  (2,181)  (3,605)
    Other (income) expense, net  139   (745)  603 
    Income before income taxes  53,585   42,708   22,643 
    Provision for income taxes  13,053   9,706   6,158 
    Net income $40,532  $33,002  $16,485 
              
    Basic and diluted net income per common share (1) $0.26  $0.21  $0.10 
              
    Weighted average common shares outstanding:            
    Basic  154,187   153,876   154,116 
    Diluted  154,501   154,177   154,281 

       (1) Basic and diluted net income per common share is computed using the two-class method to determine the net income per share for each class of common stock and participating security (restricted stock and stock-settled restricted stock units that have non-forfeitable rights to receive dividends or dividend equivalents) according to dividends declared and participation rights in undistributed earnings. Accordingly, we have excluded net income attributable to participating securities from our calculation of basic and diluted net income per common share.



    Archrock, Inc.
    Unaudited Supplemental Information
    (in thousands, except percentages, per share amounts and ratios)
               
      Three Months Ended  
      March 31,  December 31,  March 31,  
      2024 2023 2023 
    Revenue:          
    Contract operations $223,051  $213,022  $187,745  
    Aftermarket services  45,437   46,571   42,089  
    Total revenue $268,488  $259,593  $229,834  
               
    Gross margin (1):          
    Contract operations $145,308  $137,062  $108,263  
    Aftermarket services  10,437   10,239   8,181  
    Total gross margin $155,745  $147,301  $116,444  
               
    Gross margin percentage:          
    Contract operations  65%  64%  58% 
    Aftermarket services  23%  22%  19% 
    Total gross margin percentage  58%  57%  51% 
               
    Selling, general and administrative $31,665  $33,007  $26,425  
    % of revenue  12%  13%  11% 
               
    Adjusted EBITDA (1) $131,024  $120,263  $97,199  
    % of revenue  49%  46%  42% 
               
    Capital expenditures $99,755  $36,655  $84,392  
    Proceeds from sale of property, plant and equipment and other assets  (13,844)  (17,543)  (28,726) 
    Net capital expenditures $85,911  $19,112  $55,666  
               
    Total available horsepower (at period end) (2)  3,780   3,759   3,729  
    Total operating horsepower (at period end) (3)  3,593   3,607   3,504  
    Average operating horsepower  3,606   3,607   3,475  
    Horsepower utilization:          
    Spot (at period end)  95.0%  96.0%  94.0% 
    Average  95.6%  95.7%  93.3% 
               
    Dividend declared for the period per share $0.165  $0.165  $0.150  
    Dividend declared for the period to all shareholders $25,978  $25,913  $23,504  
    Cash available for dividend coverage (4)  3.2x  2.8x  2.0x 
               
    Free cash flow (1) $51,779  $47,385  $30,190  
    Free cash flow after dividend (1) $25,779  $23,195  $6,338  

    (1) Management believes gross margin, Adjusted EBITDA, free cash flow and free cash flow after dividend provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period-to-period comparisons.
    (2) Defined as idle and operating horsepower and includes new compressor units completed by a third party manufacturer that have been delivered to us.
    (3) Defined as horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue.
    (4) Defined as cash available for dividend divided by dividends declared for the period.

              
      March 31,  December 31,  March 31, 
         2024    2023    2023
    Balance Sheet            
    Long-term debt (1) $1,566,566 $1,584,869 $1,547,274
    Total equity  882,080  871,021  853,050

       (1) Carrying values are shown net of unamortized premium and deferred financing costs.




    Archrock, Inc.
    Unaudited Supplemental Information
    Reconciliation of Net Income to Adjusted EBITDA and Gross Margin
    (in thousands)
              
      Three Months Ended
      March 31,  December 31,  March 31, 
         2024    2023    2023
    Net income $40,532  $33,002  $16,485 
    Depreciation and amortization  42,835   42,695   40,181 
    Long-lived and other asset impairment  2,568   3,658   2,569 
    Unrealized change in fair value of investment in unconsolidated affiliate     (1,023)  254 
    Restructuring charges     221   1,047 
    Interest expense  27,334   27,938   26,581 
    Stock-based compensation expense  3,964   3,283   3,327 
    Amortization of capitalized implementation costs  738   783   597 
    Provision for income taxes  13,053   9,706   6,158 
    Adjusted EBITDA (1)  131,024   120,263   97,199 
    Selling, general and administrative  31,665   33,007   26,425 
    Stock-based compensation expense  (3,964)  (3,283)  (3,327)
    Amortization of capitalized implementation costs  (738)  (783)  (597)
    Unrealized change in fair value of investment in unconsolidated affiliate     1,023   (254)
    Gain on sale of assets, net  (2,381)  (2,181)  (3,605)
    Other (income) expense, net  139   (745)  603 
    Gross margin (1) $155,745  $147,301  $116,444 

       (1) Management believes Adjusted EBITDA and gross margin provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period-to-period comparisons.



    Archrock, Inc.
    Unaudited Supplemental Information
    Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend
    (in thousands)
              
      Three Months Ended
      March 31,  December 31,  March 31, 
         2024    2023    2023
    Net income $40,532  $33,002  $16,485 
    Depreciation and amortization  42,835   42,695   40,181 
    Long-lived and other asset impairment  2,568   3,658   2,569 
    Unrealized change in fair value of investment in unconsolidated affiliate     (1,023)  254 
    Restructuring charges     221   1,047 
    Interest expense  27,334   27,938   26,581 
    Stock-based compensation expense  3,964   3,283   3,327 
    Amortization of capitalized implementation costs  738   783   597 
    Provision for income taxes  13,053   9,706   6,158 
    Adjusted EBITDA (1)  131,024   120,263   97,199 
    Less: Maintenance capital expenditures  (19,525)  (18,156)  (22,562)
    Less: Other capital expenditures  (2,920)  (3,193)  (2,578)
    Less: Cash tax (payment) refund  89   (120)  (18)
    Less: Cash interest expense  (26,642)  (27,310)  (25,794)
    Cash available for dividend (2) $82,026  $71,484  $46,247 

       (1) Management believes Adjusted EBITDA provides useful information to investors because this non-GAAP measure, when viewed with our GAAP results and accompanying reconciliations, provides a more complete understanding of our performance than GAAP results alone. Management uses this non-GAAP measure as a supplemental measure to review current period operating performance, comparability measure and performance measure for period-to-period comparisons.
       (2) Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends.



    Archrock, Inc.
    Unaudited Supplemental Information
    Reconciliation of Net Cash Flows Provided by Operating Activities to Cash Available for Dividend
    (in thousands)
              
      Three Months Ended
      March 31,  December 31,  March 31, 
         2024    2023    2023
    Net cash provided by operating activities $137,702  $71,719  $87,856 
    Inventory write-downs  (199)  (164)  (216)
    Provision for (benefit from) credit losses  75   (458)  340 
    Gain on sale of assets, net  2,381   2,181   3,605 
    Current income tax provision  593   459   277 
    Cash tax (payment) refund  89   (120)  (18)
    Amortization of operating lease ROU assets  (947)  (831)  (823)
    Amortization of contract costs  (5,768)  (5,653)  (5,090)
    Deferred revenue recognized in earnings  2,859   5,421   4,476 
    Cash restructuring charges     211   120 
    Changes in assets and liabilities  (32,314)  20,068   (19,140)
    Maintenance capital expenditures  (19,525)  (18,156)  (22,562)
    Other capital expenditures  (2,920)  (3,193)  (2,578)
    Cash available for dividend (1) $82,026  $71,484  $46,247 

     

       (1) Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends.



    Archrock, Inc.
    Unaudited Supplemental Information
    Reconciliation of Net Cash Flows Provided By Operating Activities to Free Cash Flow and Free Cash Flow After Dividend
    (in thousands)
              
      Three Months Ended
      March 31,  December 31,  March 31, 
         2024    2023    2023
    Net cash provided by operating activities $137,702  $71,719  $87,856 
    Net cash used in investing activities  (85,923)  (24,334)  (57,666)
    Free cash flow (1)  51,779   47,385   30,190 
    Dividends paid to stockholders  (26,000)  (24,190)  (23,852)
    Free cash flow after dividend (1) $25,779  $23,195  $6,338 

       (1) Management believes free cash flow and free cash flow after dividend provide useful information to investors because these non-GAAP measures, when viewed with our GAAP results and accompanying reconciliations, provide a more complete understanding of our performance than GAAP results alone. Management uses these non-GAAP measures as supplemental measures to review current period operating performance, comparability measures and performance measures for period-to-period comparisons.



    Archrock, Inc.
    Unaudited Supplemental Information
    Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend
    (in thousands)
           
      Annual Guidance Range
      2024
         Low    High
    Net income (1) $144,000  $174,000 
    Interest expense  110,000   110,000 
    Provision for income taxes  58,000   58,000 
    Depreciation and amortization  177,000   177,000 
    Stock-based compensation expense  14,000   14,000 
    Long-lived and other asset impairment  3,000   3,000 
    Amortization of capitalized implementation costs  4,000   4,000 
    Adjusted EBITDA (2)  510,000   540,000 
    Less: Maintenance capital expenditures  (80,000)  (85,000)
    Less: Other capital expenditures  (20,000)  (25,000)
    Less: Cash tax expense  (2,000)  (2,000)
    Less: Cash interest expense  (108,000)  (108,000)
    Cash available for dividend (3)(4) $300,000  $320,000 

    (1)   2024 annual guidance for net income includes $3.0 million of long-lived and other asset impairment as of March 31, 2024, but does not include the impact of any such future costs, because due to its nature, it cannot be accurately forecasted. Long-lived and other asset impairment does not impact Adjusted EBITDA or cash available for dividend, however it is a reconciling item between these measures and net income. Long-lived and other asset impairment for the years 2023 and 2022 was $12.0 million and $21.4 million, respectively.
    (2)   Management believes Adjusted EBITDA provides useful information to investors because this non-GAAP measure, when viewed with our GAAP results and accompanying reconciliations, provides a more complete understanding of our performance than GAAP results alone. Management uses this non-GAAP measure as a supplemental measure to review current period operating performance, comparability measure and performance measure for period-to-period comparisons.
    (3)   Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends.
    (4)   A forward-looking estimate of cash provided by operating activities is not provided because certain items necessary to estimate cash provided by operating activities, including changes in assets and liabilities, are not estimable at this time. Changes in assets and liabilities were $(28.0) million and $(24.5) million for the years 2023 and 2022, respectively.


    Primary Logo

Share on,