Fourth Quarter and Full Year 2019 Results
- Achieved record net income and adjusted EBITDA for the full year 2019.
- Net income for the fourth quarter was
$46.0 million compared to$13.0 million in the fourth quarter of 2018. - Adjusted EBITDA (a non-GAAP measure defined below) for the fourth quarter of 2019 was
$112.5 million compared to$97.6 million in the fourth quarter of 2018. - Previously declared quarterly dividend of
$0.145 per common share for the fourth quarter of 2019 was 10% higher compared to the fourth quarter of 2018. - Dividend coverage was 2.8x for 2019; the leverage ratio was 4.2x at year end.
Fourth quarter 2019 net income of
Adjusted EBITDA for the fourth quarter of 2019 was
Management Commentary and Outlook
“Archrock’s solid operational momentum continued through the end of 2019 as we delivered a sequential increase in utilization and gross margin in our contract operations segment during the fourth quarter,” said Brad Childers, Archrock’s President and Chief Executive Officer. “We performed well against our 2019 annual targets and remain on track to meet our three-year capital allocation objectives. This includes dividend growth of between 10% and 15%, dividend coverage above 2.0x, as well as leverage below 4.0x in 2020.”
“I am proud of our team for achieving several milestones in 2019,” continued Childers. “We completed an accretive acquisition, reduced the age of our fleet, drove substantial profitability improvements and advanced our leverage reduction while eliminating our need for external financing for at least five years. Together, these successes enhance our position as the leader in
“U.S. natural gas production is expected to reach record levels for the fourth year in a row in 2020, although the annual growth rate is expected to decelerate. Against this backdrop, we expect consistent demand for our natural gas compression services, particularly for the large horsepower class where we strategically focus and deploy capital.”
“Our production-oriented business, aggressive cost management and customer commitments provide us with good visibility into our outlook in the coming year, even as industry activity moderates. Archrock’s 2020 plan aligns investment with the market environment and highlights our focus on free cash flow generation. Our fleet is highly competitive and our business has proved resilient through prior commodity cycles. This, combined with the Company’s solid financial position, gives me confidence in our ability to achieve differentiated performance within the compression industry and broader energy landscape today, and well into the future,” concluded Childers.
Contract Operations
For the fourth quarter of 2019, contract operations segment revenue totaled
For the full year 2019, contract operations segment revenue totaled
Aftermarket Services
For the fourth quarter of 2019, aftermarket services segment revenue totaled
For the full year 2019, aftermarket services segment revenue totaled
Balance Sheet
Long-term debt as of
We amended our
On December 20, 2019, we completed a private offering of $500 million of 6.25% senior unsecured notes due 2028. Net proceeds were used to repay outstanding borrowings under our revolving credit facility.
Quarterly Dividend
Archrock’s Board of Directors recently declared a quarterly dividend of
2020 Annual Guidance
Full-Year 2020 Guidance | |||||||
Low | High | ||||||
Net income (1) | $ | 67,000 | $ | 102,000 | |||
Adjusted EBITDA (2) | 415,000 | 450,000 | |||||
Cash available for dividend (3) (4) | 223,000 | 248,000 | |||||
Segment | |||||||
Contract operations revenue | $ | 800,000 | $ | 825,000 | |||
Contract operations gross margin percentage | 61.5 | % | 63.0 | % | |||
Aftermarket services revenue | $ | 195,000 | $ | 210,000 | |||
Aftermarket services gross margin percentage | 17.0 | % | 19.0 | % | |||
Selling, general and administrative | $ | 120,000 | $ | 125,000 | |||
Capital expenditures | |||||||
Growth capital expenditures | $ | 80,000 | $ | 100,000 | |||
Maintenance capital expenditures | 57,000 | 63,000 | |||||
Other capital expenditures | 28,000 | 32,000 | |||||
Dividend growth | 10-15% | ||||||
Leverage | <4.0x | ||||||
Cash available for dividend coverage | >2.0x |
(1) 2020 annual guidance for net income does not include the impact of long-lived asset impairment because due to its nature it cannot be accurately forecasted. Long-lived 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 asset impairment for the years ended 2019 and 2018 was
(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
Summary Metrics
(in thousands, except percentages and ratios) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Net income | $ | 46,044 | $ | 20,407 | $ | 12,968 | $ | 97,330 | $ | 29,160 | |||||||||
Net income attributable to | $ | 46,044 | $ | 20,407 | $ | 12,968 | $ | 97,330 | $ | 21,063 | |||||||||
Adjusted EBITDA | 112,512 | 112,133 | 97,557 | 416,505 | 352,256 | ||||||||||||||
Contract operations revenue | $ | 204,437 | $ | 198,337 | $ | 176,380 | $ | 771,539 | $ | 672,536 | |||||||||
Contract operations gross margin | $ | 128,374 | $ | 122,396 | $ | 104,827 | $ | 474,279 | $ | 399,523 | |||||||||
Contract operations gross margin percentage | 63 | % | 62 | % | 59 | % | 61 | % | 59 | % | |||||||||
Aftermarket services revenue | $ | 41,550 | $ | 46,612 | $ | 56,779 | $ | 193,946 | $ | 231,905 | |||||||||
Aftermarket services gross margin | $ | 6,314 | $ | 8,987 | $ | 8,598 | $ | 34,968 | $ | 40,551 | |||||||||
Aftermarket services gross margin percentage | 15 | % | 19 | % | 15 | % | 18 | % | 17 | % | |||||||||
Selling, general, and administrative | $ | 30,594 | $ | 29,526 | $ | 21,108 | $ | 117,727 | $ | 101,563 | |||||||||
Cash available for dividend | $ | 64,213 | $ | 68,306 | $ | 58,647 | $ | 236,284 | $ | 201,384 | |||||||||
Cash available for dividend coverage | 2.9x | 3.1x | 3.4x | 2.8x | 3.0x | ||||||||||||||
Total available horsepower (at period end) | 4,395 | 4,441 | 3,963 | ||||||||||||||||
Total operating horsepower (at period end) | 3,926 | 3,916 | 3,530 | ||||||||||||||||
Horsepower utilization spot (at period end) | 89 | % | 88 | % | 89 | % |
Conference Call Details
A replay of the conference call will be available on Archrock’s website for approximately seven days. Also, a replay may be accessed by dialing 1-844-512-2921 in
*****
Adjusted EBITDA, a non-GAAP measure, is defined as net income (loss) excluding interest expense, income taxes, depreciation and amortization, long-lived asset impairment, restatement and other charges, debt extinguishment loss, transaction-related costs, stock-based compensation expense, indemnification (income) expense, net and other items. A reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP measure, and a reconciliation of our full-year 2020 adjusted EBITDA guidance to net income appear below.
Gross margin, a non-GAAP measure, is defined as total 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 asset impairment, restatement and other charges, debt extinguishment loss, transaction-related costs, stock-based compensation expense and indemnification (income) expense, net less maintenance capital expenditures, other capital expenditures, cash taxes and cash interest expense. Reconciliations of cash available for dividend to net income and cash flows from operating activities, the most directly comparable GAAP measures, appear below.
About
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
While
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
SOURCE:
For information, contact:
VP of Investor Relations
281-836-8360
investor.relations@archrock.com
UNAUDITED SUPPLEMENTAL INFORMATION
(in thousands, except per share amounts)
Three Months Ended | Year Ended | ||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Revenue: | |||||||||||||||||||
Contract operations | $ | 204,437 | $ | 198,337 | $ | 176,380 | $ | 771,539 | $ | 672,536 | |||||||||
Aftermarket services | 41,550 | 46,612 | 56,779 | 193,946 | 231,905 | ||||||||||||||
Total revenue | 245,987 | 244,949 | 233,159 | 965,485 | 904,441 | ||||||||||||||
Cost of sales (excluding depreciation and amortization): | |||||||||||||||||||
Contract operations | 76,063 | 75,941 | 71,553 | 297,260 | 273,013 | ||||||||||||||
Aftermarket services | 35,236 | 37,625 | 48,181 | 158,978 | 191,354 | ||||||||||||||
Total cost of sales (excluding depreciation and amortization) | 111,299 | 113,566 | 119,734 | 456,238 | 464,367 | ||||||||||||||
Selling, general and administrative | 30,594 | 29,526 | 21,108 | 117,727 | 101,563 | ||||||||||||||
Depreciation and amortization | 50,087 | 48,409 | 43,381 | 188,084 | 174,946 | ||||||||||||||
Long-lived asset impairment | 25,842 | 7,097 | 9,804 | 44,663 | 28,127 | ||||||||||||||
Restatement and other charges | — | — | 214 | 445 | 19 | ||||||||||||||
Interest expense | 27,709 | 27,401 | 23,926 | 104,681 | 93,328 | ||||||||||||||
Debt extinguishment loss | — | — | — | 3,653 | 2,450 | ||||||||||||||
Transaction-related costs | 441 | 4,905 | 169 | 8,213 | 10,162 | ||||||||||||||
Gain on sale of assets, net | (6,372 | ) | (7,859 | ) | (2,766 | ) | (16,016 | ) | (5,674 | ) | |||||||||
Other (income) loss, net | (280 | ) | 49 | 384 | (661 | ) | (157 | ) | |||||||||||
Income before income taxes | 6,667 | 21,855 | 17,205 | 58,458 | 35,310 | ||||||||||||||
Provision for (benefit from) income taxes | (39,377 | ) | 1,448 | 4,237 | (39,145 | ) | 6,150 | ||||||||||||
Income from continuing operations | 46,044 | 20,407 | 12,968 | 97,603 | 29,160 | ||||||||||||||
Loss from discontinued operations, net of tax | — | — | — | (273 | ) | — | |||||||||||||
Net income | 46,044 | 20,407 | 12,968 | 97,330 | 29,160 | ||||||||||||||
Less: Net income attributable to the noncontrolling interest | — | — | — | — | (8,097 | ) | |||||||||||||
Net income attributable to | $ | 46,044 | $ | 20,407 | $ | 12,968 | $ | 97,330 | $ | 21,063 | |||||||||
Basic and diluted net income per common share attributable to | $ | 0.30 | $ | 0.14 | $ | 0.10 | $ | 0.70 | $ | 0.19 | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic | 150,426 | 142,931 | 128,036 | 137,492 | 109,305 | ||||||||||||||
Diluted | 150,465 | 142,965 | 128,133 | 137,528 | 109,421 |
——————
(1) Basic and diluted net income per common share attributable to
UNAUDITED SUPPLEMENTAL INFORMATION
(in thousands, except percentages, per share amounts and ratios)
Three Months Ended | Year Ended | ||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Revenue: | |||||||||||||||||||
Contract operations | $ | 204,437 | $ | 198,337 | $ | 176,380 | $ | 771,539 | $ | 672,536 | |||||||||
Aftermarket services | 41,550 | 46,612 | 56,779 | 193,946 | 231,905 | ||||||||||||||
Total revenue | $ | 245,987 | $ | 244,949 | $ | 233,159 | $ | 965,485 | $ | 904,441 | |||||||||
Gross margin (1): | |||||||||||||||||||
Contract operations | $ | 128,374 | $ | 122,396 | $ | 104,827 | $ | 474,279 | $ | 399,523 | |||||||||
Aftermarket services | 6,314 | 8,987 | 8,598 | 34,968 | 40,551 | ||||||||||||||
Total gross margin | $ | 134,688 | $ | 131,383 | $ | 113,425 | $ | 509,247 | $ | 440,074 | |||||||||
Gross margin percentage: | |||||||||||||||||||
Contract operations | 63 | % | 62 | % | 59 | % | 61 | % | 59 | % | |||||||||
Aftermarket services | 15 | % | 19 | % | 15 | % | 18 | % | 17 | % | |||||||||
Total gross margin percentage | 55 | % | 54 | % | 49 | % | 53 | % | 49 | % | |||||||||
Selling, general and administrative | $ | 30,594 | 29,526 | $ | 21,108 | $ | 117,727 | $ | 101,563 | ||||||||||
% of revenue | 12 | % | 12 | % | 9 | % | 12 | % | 11 | % | |||||||||
Adjusted EBITDA (1) | $ | 112,512 | $ | 112,133 | $ | 97,557 | $ | 416,505 | $ | 352,256 | |||||||||
% of revenue | 46 | % | 46 | % | 42 | % | 43 | % | 39 | % | |||||||||
Capital expenditures | $ | 81,731 | $ | 68,495 | $ | 77,919 | $ | 385,198 | $ | 319,102 | |||||||||
Less: Proceeds from sale of property, plant and equipment | (25,287 | ) | (33,720 | ) | (9,866 | ) | (80,961 | ) | (33,927 | ) | |||||||||
Net capital expenditures | $ | 56,444 | $ | 34,775 | $ | 68,053 | $ | 304,237 | $ | 285,175 | |||||||||
Total available horsepower (at period end) (2) | 4,395 | 4,441 | 3,963 | 4,395 | 3,963 | ||||||||||||||
Total operating horsepower (at period end) (3) | 3,926 | 3,916 | 3,530 | 3,926 | 3,530 | ||||||||||||||
Average operating horsepower | 3,920 | 3,770 | 3,502 | 3,708 | 3,386 | ||||||||||||||
Horsepower utilization: | |||||||||||||||||||
Spot (at period end) | 89 | % | 88 | % | 89 | % | 89 | % | 89 | % | |||||||||
Average | 88 | % | 88 | % | 88 | % | 88 | % | 87 | % | |||||||||
Dividend declared for the period per share | $ | 0.145 | $ | 0.145 | $ | 0.132 | $ | 0.567 | $ | 0.516 | |||||||||
Dividend declared for the period to all shareholders | $ | 22,183 | $ | 22,051 | $ | 17,261 | $ | 83,482 | $ | 67,024 | |||||||||
Cash available for dividend coverage (4) | 2.9x | 3.1x | 3.4x | 2.8x | 3.0x |
——————
(1) Management believes gross margin and adjusted EBITDA 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. New compressor units completed by a third party manufacturer that have been delivered to us are included in the fleet.
(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.
2019 | 2019 | 2018 | |||||||||
Balance Sheet | |||||||||||
Long-term debt (1) | $ | 1,842,549 | $ | 1,825,475 | $ | 1,529,501 | |||||
1,085,963 | 1,057,018 | 841,574 |
——————
(1) Carrying values are shown net of unamortized debt discounts and unamortized deferred financing costs.
UNAUDITED SUPPLEMENTAL INFORMATION
(in thousands)
Three Months Ended | Year Ended | ||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA and Gross Margin | |||||||||||||||||||
Net income | $ | 46,044 | $ | 20,407 | $ | 12,968 | $ | 97,330 | $ | 29,160 | |||||||||
Less: Loss from discontinued operations, net of tax | — | — | — | (273 | ) | — | |||||||||||||
Income from continuing operations | 46,044 | 20,407 | 12,968 | 97,603 | 29,160 | ||||||||||||||
Depreciation and amortization | 50,087 | 48,409 | 43,381 | 188,084 | 174,946 | ||||||||||||||
Long-lived asset impairment | 25,842 | 7,097 | 9,804 | 44,663 | 28,127 | ||||||||||||||
Restatement and other charges | — | — | 214 | 445 | 19 | ||||||||||||||
Interest expense | 27,709 | 27,401 | 23,926 | 104,681 | 93,328 | ||||||||||||||
Debt extinguishment loss | — | — | — | 3,653 | 2,450 | ||||||||||||||
Transaction-related costs | 441 | 4,905 | 169 | 8,213 | 10,162 | ||||||||||||||
Stock-based compensation expense | 1,960 | 2,276 | 1,821 | 8,105 | 7,388 | ||||||||||||||
Indemnification (income) expense, net (1) | (194 | ) | 190 | 1,037 | 203 | 526 | |||||||||||||
Provision for (benefit from) income taxes | (39,377 | ) | 1,448 | 4,237 | (39,145 | ) | 6,150 | ||||||||||||
Adjusted EBITDA(2) | 112,512 | 112,133 | 97,557 | 416,505 | 352,256 | ||||||||||||||
Selling, general and administrative | 30,594 | 29,526 | 21,108 | 117,727 | 101,563 | ||||||||||||||
Stock-based compensation expense | (1,960 | ) | (2,276 | ) | (1,821 | ) | (8,105 | ) | (7,388 | ) | |||||||||
Indemnification income (expense), net (1) | 194 | (190 | ) | (1,037 | ) | (203 | ) | (526 | ) | ||||||||||
Gain on sale of assets, net | (6,372 | ) | (7,859 | ) | (2,766 | ) | (16,016 | ) | (5,674 | ) | |||||||||
Other (income) loss, net | (280 | ) | 49 | 384 | (661 | ) | (157 | ) | |||||||||||
Gross margin (2) | $ | 134,688 | $ | 131,383 | $ | 113,425 | $ | 509,247 | $ | 440,074 |
——————
(1) Represents net (income) expense incurred pursuant to indemnification provisions of our separation and distribution and tax matters agreements with Exterran Corporation.
(2) 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.
UNAUDITED SUPPLEMENTAL INFORMATION
(in thousands)
Three Months Ended | Year Ended | ||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend | |||||||||||||||||||
Net income | $ | 46,044 | $ | 20,407 | $ | 12,968 | $ | 97,330 | $ | 29,160 | |||||||||
Loss from discontinued operations, net of tax | — | — | — | 273 | — | ||||||||||||||
Depreciation and amortization | 50,087 | 48,409 | 43,381 | 188,084 | 174,946 | ||||||||||||||
Long-lived asset impairment | 25,842 | 7,097 | 9,804 | 44,663 | 28,127 | ||||||||||||||
Restatement and other charges | — | — | 214 | 445 | 19 | ||||||||||||||
Interest expense | 27,709 | 27,401 | 23,926 | 104,681 | 93,328 | ||||||||||||||
Debt extinguishment loss | — | — | — | 3,653 | 2,450 | ||||||||||||||
Transaction-related costs | 441 | 4,905 | 169 | 8,213 | 10,162 | ||||||||||||||
Stock-based compensation expense | 1,960 | 2,276 | 1,821 | 8,105 | 7,388 | ||||||||||||||
Indemnification (income) expense, net | (194 | ) | 190 | 1,037 | 203 | 526 | |||||||||||||
Provision for (benefit from) income taxes | (39,377 | ) | 1,448 | 4,237 | (39,145 | ) | 6,150 | ||||||||||||
Adjusted EBITDA (1) | 112,512 | 112,133 | 97,557 | 416,505 | 352,256 | ||||||||||||||
Less: Maintenance capital expenditures | (12,748 | ) | (14,145 | ) | (12,924 | ) | (58,592 | ) | (49,733 | ) | |||||||||
Less: Other capital expenditures | (10,005 | ) | (5,566 | ) | (3,975 | ) | (26,151 | ) | (17,815 | ) | |||||||||
Less: Cash tax refund | 288 | 1,514 | 91 | 1,973 | 2,131 | ||||||||||||||
Less: Cash interest expense | (25,834 | ) | (25,630 | ) | (22,102 | ) | (97,451 | ) | (85,455 | ) | |||||||||
Cash available for dividend (2) | $ | 64,213 | $ | 68,306 | $ | 58,647 | $ | 236,284 | $ | 201,384 |
——————
(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.
UNAUDITED SUPPLEMENTAL INFORMATION
(in thousands)
Three Months Ended | Year Ended | ||||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Reconciliation of Cash Flows from Operations to Cash Available for Dividend | |||||||||||||||||||
Cash flows provided by operating activities | $ | 66,522 | $ | 74,962 | $ | 55,242 | $ | 290,147 | $ | 225,947 | |||||||||
Cash flows used in discontinued operations | — | 269 | — | 269 | — | ||||||||||||||
Inventory write-downs | (282 | ) | (170 | ) | (429 | ) | (944 | ) | (1,614 | ) | |||||||||
Provision for doubtful accounts | (1,588 | ) | (644 | ) | (133 | ) | (2,567 | ) | (1,677 | ) | |||||||||
Gain on sale of assets, net | 6,372 | 7,859 | 2,780 | 16,016 | 5,674 | ||||||||||||||
Current income tax provision (benefit) | (110 | ) | (41 | ) | 513 | 452 | 912 | ||||||||||||
Cash tax refund | 288 | 1,514 | 91 | 1,973 | 2,131 | ||||||||||||||
Amortization of operating lease ROU assets | (780 | ) | (726 | ) | — | (2,931 | ) | — | |||||||||||
Amortization of contract costs | (6,496 | ) | (6,110 | ) | (4,607 | ) | (23,330 | ) | (14,939 | ) | |||||||||
Deferred revenue recognized in earnings | 8,730 | 8,311 | 11,008 | 42,268 | 28,428 | ||||||||||||||
Restatement and other charges | — | — | 214 | 445 | 19 | ||||||||||||||
Transaction-related costs | 441 | 4,905 | 169 | 8,213 | 10,162 | ||||||||||||||
Indemnification (income) expense, net | (194 | ) | 190 | 1,037 | 203 | 526 | |||||||||||||
Changes in assets and liabilities | 14,006 | (2,625 | ) | 9,410 | (10,367 | ) | 13,173 | ||||||||||||
Maintenance capital expenditures | (12,748 | ) | (14,145 | ) | (12,924 | ) | (58,592 | ) | (49,733 | ) | |||||||||
Other capital expenditures | (10,005 | ) | (5,566 | ) | (3,975 | ) | (26,151 | ) | (17,815 | ) | |||||||||
Proceeds from settlement of interest rate swaps that include financing elements | 57 | 323 | 251 | 1,180 | 190 | ||||||||||||||
Cash available for dividend (1) | $ | 64,213 | $ | 68,306 | $ | 58,647 | $ | 236,284 | $ | 201,384 |
——————
(1) Management uses cash available for dividend as a supplemental performance measure to compute the coverage ratio of estimated cash flows to planned dividends.
UNAUDITED FOWARD-LOOKING SUPPLEMENTAL INFORMATION
(in thousands)
Annual | |||||||
2020 | |||||||
Low | High | ||||||
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend | |||||||
Net income (1) | 67,000 | 102,000 | |||||
Depreciation and amortization | 198,000 | 198,000 | |||||
Interest expense | 116,000 | 116,000 | |||||
Stock-based compensation expense | 11,000 | 11,000 | |||||
Provision for income taxes | 23,000 | 23,000 | |||||
Adjusted EBITDA (2) | 415,000 | 450,000 | |||||
Less: Maintenance capital expenditures | (57,000 | ) | (63,000 | ) | |||
Less: Other capital expenditures | (28,000 | ) | (32,000 | ) | |||
Less: Cash tax payments | (1,000 | ) | (1,000 | ) | |||
Less: Cash interest expense | (106,000 | ) | (106,000 | ) | |||
Cash available for dividend (3) (4) | $ | 223,000 | $ | 248,000 |
——————
(1) 2020 annual guidance for net income does not include the impact of long-lived asset impairment because due to its nature it cannot be accurately forecasted. Long-lived 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 asset impairment for the years ended 2019 and 2018 was
(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
Source:
2020 GlobeNewswire, Inc., source