Diversified Energy : DRS/A – Draft registration statement submitted by Emerging Growth Company under Securities Act Section 6(e) or by Foreign Private Issuer under Division of Corporation Finance policy

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As confidentially submitted to the Securities and Exchange Commission on September 12, 2023.

Registration No. 333-            ​

​

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Confidential Submission No. 7

to

FORM F-1

• England and Wales
• (State or Other Jurisdiction of Incorporation or Organization)​

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933​

Diversified Energy Company plc

(Exact Name of Registrant as Specified in its Charter)

Not Applicable

		(Translation of Registrant's name into English)​
​	​	1311	​	​	Not Applicable	​
​	​	(Primary Standard Industrial	​	​	(I.R.S. Employer	​
		Classification Code Number)​			Identification No.)

1600 Corporate Drive

Birmingham, Alabama 35242

Tel: [phone]

(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)​

Benjamin Sullivan

Diversified Energy Company plc

1600 Corporate Drive

Birmingham, Alabama 35242

Tel: [phone]

		(Name, address, including zip code, and telephone number, including area code, of agent for service)​
				Copies to:
​	David J. Miller	​ ​	James Inness	​ ​		Douglas V. Getten	​ ​	Derek Jones	​
	Ryan J. Lynch		Latham & Watkins (London) LLP			Preston Bernhisel		Baker Botts (UK) LLP
	Latham & Watkins LLP		99 Bishopsgate			Garrett H. Hughey		Level 30, 20 Fenchurch Street
	300 Colorado Street, Suite 2400		London EC2M 3XF			Baker Botts L.L.P.		London EC3M 3BY
	Austin, Texas 78701		United Kingdom		910 Louisiana Street, Suite 3200		United Kingdom
	[phone]		[phone]			Houston, Texas 77002		[phone]
						[phone]

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

• The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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statement filed with	offer to buy such securities
until the registration	it is not soliciting an
sell the securities described herein	an offer to sell such securities and
The information in this preliminary prospectus is not complete and may be changed. We may not	theSecurities and Exchange Commission is declared effective. This preliminary prospectus is not inany jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED                     , 2023

P R E L I M I N A R Y     P R O S P E C T U S

                Ordinary Shares

$            per ordinary share

This is the initial public offering of our ordinary shares in the United States. We currently expect the initial public offering price to be between $            and $            per ordinary share.

We intend to apply to list our ordinary shares on the New York Stock Exchange ("NYSE") under the symbol "DEC." Our ordinary shares are admitted to the premium segment of the Official List of the Financial Conduct Authority and are admitted to trading on the Main Market of the London Stock Exchange ("LSE"), under the symbol "DEC." On                 , 2023, the last reported sale price of our ordinary shares on the LSE was £            per ordinary share (equivalent to $            per share based on an assumed exchange rate of £1.00 to $            ). The initial public offering price for our ordinary shares will be determined through discussions between us and the representatives of the underwriters and will take into consideration, among other factors, the closing price of our ordinary shares on the LSE on the day of pricing.

We are both an "emerging growth company" and a "foreign private issuer" as defined under the U.S. federal securities laws and, as such, are subject to reduced public company disclosure requirements. See the subsections titled "Prospectus Summary-Implications of Being an Emerging Growth Company and a Foreign Private Issuer" on page 13and "Risk Factors-Risks Relating to Our Ordinary Shares and This Offering-We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company." on page 43for additional information.

Investing in our ordinary shares involves risks. See the section titled "Risk Factors" beginning on page 21of this prospectus.

Neither the U.S. Securities and Exchange Commission (the "SEC") nor any U.S. state securities commission has

approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

​	​ ​ Per Share	​	​	Total	​
Public offering price	​ ​​$                    ​​	​​$	​
Underwriting discounts and commissions(1)	​ ​​$	​​	​​$		​
Proceeds to Diversified Energy Company plc (before expenses)	​ ​​$	​​	​​$		​

1. We have agreed to reimburse the underwriters for certain expenses incurred in this offering. See the section titled "Underwriting."

The underwriters have the option to purchase up to an additional                ordinary shares from us at the initial public offering price, less the underwriting discounts and commissions, for 30 days after the date of this prospectus.

The underwriters expect to deliver the ordinary shares to purchasers on or about           , 2023 through the book- entry facilities of the Depository Trust Company.

Citigroup

                    , 2023

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COMMONLY USED DEFINED TERMS

ABOUT THIS PROSPECTUS

PRESENTATION OF FINANCIAL INFORMATION

MARKET AND INDUSTRY DATA

PROSPECTUS SUMMARY

RISK FACTORS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

USE OF PROCEEDS

DIVIDEND POLICY

CAPITALIZATION

DILUTION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

BUSINESS

MANAGEMENT

PRINCIPAL SHAREHOLDERS

RELATED PARTY TRANSACTIONS

DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION

SHARES ELIGIBLE FOR FUTURE SALE

MATERIAL TAX CONSIDERATIONS

UNDERWRITING

EXPENSES OF THE OFFERING

LEGAL MATTERS

EXPERTS

SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES

WHERE YOU CAN FIND ADDITIONAL INFORMATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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For investors outside the United States: neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our ordinary shares and the distribution of this prospectus outside the United States.

Neither we nor the underwriters have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, any amendment or supplement to this prospectus, or in any free writing prospectus we have prepared, and neither we nor the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information others may give you. Neither we nor the underwriters are making an offer to sell, or seeking offers to buy, these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date on the cover page of this prospectus, regardless of the time of delivery of this prospectus or the sale of ordinary shares. Our business, financial condition, results of operations and prospects may have changed since the date on the cover page of this prospectus. We will update this prospectus as required by law, including with respect to any material change affecting us or our business prior to the completion of this offering.

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COMMONLY USED DEFINED TERMS

The following are abbreviations and definitions of certain terms used in this document, which are commonly used in the natural gas and oil industry:

"Basin." A large natural depression on the earth's surface in which sediments accumulate.

"Bbl." Barrel or barrels of oil or natural gas liquids.

"Boe." Barrel of oil equivalent, determined by using the ratio of one Bbl of oil or NGLs to six Mcf of natural gas. The ratio of one barrel of oil or NGLs to six Mcf of natural gas is commonly used in the industry and represents the approximate energy equivalence of oil or NGLs to natural gas, and does not represent the economic equivalency of oil and NGLs to natural gas. The sales price of a barrel of oil or NGLs is considerably higher than the sales price of six Mcf of natural gas.

"Boepd." Barrel of oil equivalent per day.

"Btu or British Thermal Unit." A British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit.

"Development wells." Wells drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

"Drilling." means any activity related to drilling pad make-ready costs, rig mobilization and creating a wellbore in order to facilitate the ultimate production of hydrocarbons.

"Dry hole." A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production would exceed production expenses, taxes and the royalty burden.

"E&P." Exploration and production of natural gas, NGLs and oil.

"Field." An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

"Formation." A layer of rock which has distinct characteristics that differs from nearby rock.

"Gross acres or gross wells." The total acres or wells, as the case may be, in which a working interest is owned.

"Henry Hub." A natural gas pipeline delivery point that serves as the benchmark natural gas price underlying NYMEX natural gas futures contracts.

"Horizontal drilling." A drilling technique used in certain formations where a well is drilled vertically to a certain depth and then drilled at a high angle to vertical (which can be greater than 90 degrees) in order to stay with a specified interval.

"Hydraulic fracturing." The technique of improving a well's production or injection rates by pumping a mixture of fluids into the formation and rupturing the rock, creating an artificial channel. As part of this technique, sand or other material may also be injected into the formation to keep the channel open, so that fluids or natural gases may more easily flow through the formation.

"IFRS." International Financial Reporting Standards, as issued by the International Accounting Standards Board.

"IASB." The International Accounting Standards Board.

"LIBOR." London Inter-bank Offered Rate, which is a market rate of interest.

"MBbls." One thousand barrels of oil, condensate or NGL.

"Mboe." One thousand Boe.

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"Mboepd." One thousand Boe per day.

"Mcf." One thousand cubic feet of natural gas.

"Mcfe." One thousand cubic feet of natural gas equivalent.

"MMBoe." One million Boe.

"MMBtu." One million British Thermal Units.

"MMcf." One million cubic feet of natural gas.

"MMcfe." One million cubic feet of natural gas equivalent.

"MMcfepd." One million cubic feet of natural gas equivalent per day.

"Mont Belvieu." A mature trading hub with a high level of liquidity and transparency that sets spot and futures prices for NGLs.

"MtCO2e." Metric tons of carbon dioxide equivalent.

"Net acres or net wells." The sum of the fractional working interest owned in gross acres or gross wells, as the case may be. For example, an owner who has a 50% interest in 100 acres owns 50 net acres and an owner who has a 50% interest in 100 wells owns 50 net wells.

"NGL or NGLs." Natural gas liquids, such as ethane, propane, butane and natural gasoline that are extracted from natural gas production streams.

"NYMEX." The New York Mercantile Exchange.

"Oil." Includes crude oil and condensate.

"OPEC." The Organization of the Petroleum Exporting Countries.

"Possible reserves." Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.

1. When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates.
2. Possible reserves may be assigned to areas of a reservoir adjacent to probable reserves where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir by a defined project.
3. Possible reserves also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves.
4. The proved plus probable and proved plus probable plus possible reserves estimates must be based on reasonable alternative technical and commercial interpretations within the reservoir or subject project that are clearly documented, including comparisons to results in successful similar projects.
5. Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the registrant believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.

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1. Where direct observation has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties and pressure gradient interpretations.

"Probable Reserves." Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.

1. When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates.
2. Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir.
3. Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.

"Productive well." A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the production exceed production expenses and taxes.

"Proved developed reserves." Reserves of any category that can be expected to be recovered through:

1. existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and
2. installed extraction equipment and infrastructure operation at the time of the reserve estimate if the extraction is by means not involving a well.

"Proved reserves." Those quantities of natural gas, NGLs and oil, which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible-from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations-prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonable certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

1. The area of reservoir considered as proved includes:
2. 1. the area identified by drilling and limited by fluid contacts, if any, and
   2. adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible natural gas, NGLs or oil on the basis of available geosciences and engineering data.
3. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons ("LKH") as seen in a well penetration unless geosciences, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
4. Where direct observation from well penetrations has defined a highest known oil ("HKO") elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geosciences, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.

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1. Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:
2. 1. successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and
   2. the project has been approved for development by all necessary parties and entities, including governmental entities.
3. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

"Proved undeveloped reserves" or "PUDs." Proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances. Undrilled locations can be classified as having proved undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances justify a longer time. Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty.

"Recompletion." The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas, NGLs or oil, in the case of a dry hole, the reporting of abandonment to the appropriate agency.

"Reservoir." A porous and permeable underground formation containing a natural accumulation of producible natural gas, NGLs and/or oil that is confined by impermeable rock or water barriers and is separate from other reservoirs.

"Spacing." The distance between wells producing from the same reservoir. Spacing is expressed in terms of acres, e.g., 40-acre spacing, and is established by regulatory agencies.

"SOFR." The Secured Overnight Financing Rate, or SOFR.

"Standardized measure." The year-end present value (discounted at an annual rate of 10%) of estimated future net cash flows to be generated from the production of proved reserves net of estimated income taxes associated with such net cash flows, as determined in accordance with FASB guidelines, without giving effect to non-property related expenses such as indirect general and administrative expenses and debt service or to depreciation, depletion and amortization. Standardized measure does not give effect to derivative transactions.

"Undeveloped acreage." Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of natural gas, NGLs and oil regardless of whether such acreage contains proved reserves.

"Unit." The joining of all or substantially all interests in a reservoir or field, rather than a single tract, to provide for development and operation without regard to separate property interests. Also, the area covered by a unitization agreement.

"U.S. GAAP." Accounting principles generally accepted in the United States of America.

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"Wellbore" or "well." The hole drilled by the bit that is equipped for natural gas, NGLs or oil production on a completed well. Also called a well or borehole.

"Working interest." The right granted to the lessee of a property to explore for and to produce and own natural gas, NGLs, oil or other minerals. The working interest owners bear the exploration, development and operating costs on either a cash, penalty or carried basis.

"Workover." Operations on a producing well to restore or increase production.

"WTI." West Texas Intermediate grade crude oil, used as a pricing benchmark for sales contracts and NYMEX oil futures contracts.

Unless another date is specified or the context otherwise requires, all acreage, well count, hedging and reserve data presented in this prospectus is as of December 31, 2022.

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ABOUT THIS PROSPECTUS

Except where the context otherwise requires or where otherwise indicated, the terms "Diversified Energy," the "Company," "DEC," "we," "us," "our company" and "our business" refer to Diversified Energy Company plc, formerly Diversified Gas & Oil plc, together with its consolidated subsidiaries.

For the convenience of the reader, in this prospectus, unless otherwise indicated, translations from pound sterling into U.S. dollars were made at the rate of £1.00 to $            , which was the noon buying rate of the Federal Reserve Bank of New York on                    , 2023. Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon exchange of pound sterling at the dates indicated or any other date.

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PRESENTATION OF FINANCIAL INFORMATION

This prospectus includes our audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021, as well as our unaudited interim condensed consolidated financial statements as of June 30, 2023 and for the six months ended June 30, 2023 and 2022, which have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"), which differ in certain significant respects from generally accepted accounting principles in the United States ("U.S. GAAP"). None of our financial statements were prepared in accordance with U.S. GAAP.

Our financial information is presented in U.S. dollars. Our fiscal year begins on January 1 and ends on December 31 of the same year. Certain amounts and percentages included in this prospectus have been rounded. Accordingly, in certain instances, the sum of the numbers in a column of a table may not exactly equal the total figure for that column.

All references in this prospectus to "$" mean U.S. dollars and all references to "£" and "GBP" mean pound sterling. We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Use of Non-IFRS Measures

Certain key operating metrics that are not defined under IFRS (alternative performance measures) are included in this prospectus. These non-IFRS measures are used by us to monitor the underlying business performance of the Company from period to period and to facilitate comparison with our peers. Since not all companies calculate these or other non-IFRS metrics in the same way, the manner in which we have chosen to calculate the non-IFRS metrics presented herein may not be compatible with similarly defined terms used by other companies. The non-IFRS metrics should not be considered in isolation of, or viewed as substitutes for, the financial information prepared in accordance with IFRS. Certain of the key operating metrics set forth below are based on information derived from our regularly maintained records and accounting and operating systems. See the subsection titled "Prospectus Summary-Other Financial Data and Key Ratios- Non-IFRS Financial Measures" in this prospectus for reconciliations of such measures to the most directly comparable IFRS measures and reasons for the use of such non-IFRS measures.

Average Quarterly Dividend per Ordinary Share. Average Quarterly Dividend per Ordinary Share is reflective of the average of the dividends per ordinary share declared throughout the applicable fiscal year which gives consideration to changes in dividend rates and changes in the amount of shares outstanding. We use Average Quarterly Dividend per Ordinary Share as we seek to pay a consistent and reliable dividend to shareholders.

Adjusted EBITDA. As used herein, EBITDA represents earnings before interest, taxes, depletion, depreciation and amortization. Adjusted EBITDA includes adjusting for items that are not comparable period over period, namely, accretion of asset retirement obligation, other (income) expense, loss on joint and working interest owners receivable, gain on bargain purchase, (gain) loss on fair value adjustments of unsettled financial instruments, (gain) loss on natural gas and oil property and equipment, costs associated with acquisitions, other adjusting costs, non-cash equity compensation, (gain) loss on foreign currency hedge, net (gain) loss on interest rate swaps and items of a similar nature.

Adjusted EBITDA should not be considered in isolation or as a substitute for operating profit or loss, net income or loss, or cash flows provided by operating, investing and financing activities. However, we believe such measure is useful to an investor in evaluating DEC's financial performance because it (1) is widely used by investors in the natural gas and oil industry as an indicator of underlying business performance; (2) helps investors to more meaningfully evaluate and compare the results of DEC's operations from period to period by removing the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement; (3) is used in the calculation of a key metric in our revolving credit facility by and among Diversified Gas & Oil Corporation, as borrower, KeyBank National Association, as administrative agent, the guarantors party thereto and the lenders party thereto (the "Credit Facility") financial covenants; and (4) is used by the Company as a performance measure in determining executive compensation. When evaluating this measure, we believe investors also commonly find it useful to evaluate

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