Business Wire News

SAN ANTONIO--(BUSINESS WIRE)--NuStar Energy L.P. (NYSE: NS) announced today that members of management will participate in meetings with members of the investment community at the Barclays Select Series: Midstream Corporate Access Day on Monday, February 27, 2023. The materials to be discussed in the meetings will be available on the partnership’s website by 8:30 a.m. Eastern Time, Monday, February 27, 2023.


NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, Texas, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids. The partnership’s combined system has approximately 49 million barrels of storage capacity, and NuStar has operations in the United States and Mexico. For more information, visit NuStar Energy L.P.’s website at www.nustarenergy.com and its Sustainability page at https://sustainability.nustarenergy.com/.


Contacts

Investors, Pam Schmidt, Vice President, Investor Relations
Investor Relations: 210-918-INVR (4687)
or
Media, Mary Rose Brown, Executive Vice President and Chief Administrative Officer,
Corporate Communications: 210-918-2314

TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today announced that it intends to call for redemption, all $203,400,000 aggregate outstanding principal amount of its 7.5% Senior Notes due 2023 (the “Notes”). On March 31, 2023 (the “Redemption Date”), registered holders of such Notes will receive a redemption payment of equal to 100% of the principal amount of such Notes; and accrued and unpaid interest on such Notes, if any, to the Redemption Date.


Upon payment in full on the Redemption Date (the “Redemption Payment”), interest on the Notes will cease to accrue on and after the Redemption Date. Following the payment on the Redemption Date, there will be no Notes that remain outstanding.

Forward-Looking Statements

This press release includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes such forward-looking statements are reasonable, NGL cannot assure they will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

NGL provides Adjusted EBITDA guidance that does not include certain charges and costs, which in future periods are generally expected to be similar to the kinds of charges and costs excluded from Adjusted EBITDA in prior periods, such as income taxes, interest and other non-operating items, depreciation and amortization, net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, equity-based compensation expense, acquisition expense, revaluation of liabilities and items that are unusual in nature or infrequently occurring. The exclusion of these charges and costs in future periods will have a significant impact on the Partnership’s Adjusted EBITDA, and the Partnership is not able to provide a reconciliation of its Adjusted EBITDA guidance to net income (loss) without unreasonable efforts due to the uncertainty and variability of the nature and amount of these future charges and costs and the Partnership believes that such reconciliation, if possible, would imply a degree of precision that would be potentially confusing or misleading to investors.

About NGL Energy Partners LP

NGL Energy Partners LP, a Delaware limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process. For further information, visit the Partnership’s website at www.nglenergypartners.com.


Contacts

David Sullivan, 918-481-1119
Vice President - Finance
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SCHAUMBURG, Ill.--(BUSINESS WIRE)--#SEKOLogistics--SEKO Logistics (SEKO), a leading global logistics provider, has announced its appointment of Alfred Hofmann as Senior Vice President, Global Ocean Freight. In this role, Hofmann will lead SEKO’s global ocean freight team in advancing and executing division and overall company strategies. Under his leadership, he will provide guidance on business goals and implementation plans, help maintain relationships with SEKO’s network of global ocean carriers and have profit and loss (P&L) operating authority.



An esteemed veteran of the logistics industry, Hofmann joins SEKO after a 36-year-long tenure at Kuehne+Nagel, a global freight and logistics company based in Switzerland, where he served in many leadership roles. Among other positions, Hofmann served as executive vice president of Ocean Freight APAC and president of South Asia Pacific. In those roles, he led the expansion of all business units in the region. Most recently, he served as an executive advisor and consultant to Kuehne+Nagel and was actively involved in carrier relationships. In 2015, attesting to his expertise in the region, Hofmann received well-earned recognition when he was inducted into the Supply Chain Asia Awards Hall of Fame.

“I am beyond thrilled that Alfred is joining the SEKO team in this role,” said Steen Christensen, chief operating officer, International at SEKO. “He is a highly recognized leader in global logistics and is known by many for his expansive expertise in ocean freight. Alfred’s deep understanding of the APAC region, in particular, brings a valuable benefit to our customers and partners as we continue to strengthen our ocean freight forwarding offerings and capabilities.”

SEKO’s ocean logistics, global sea freight and shipping network encompasses more than 40 countries worldwide, including all of the world’s major seaports. A Non-Vessel Operating Common Carrier (NVOCC), SEKO is not locked into strict sailing schedules providing the flexibility to schedule ocean freight on a variety of steamship lines to work within any schedule and budget. Strong working relationships with the largest ocean carriers in the world enables SEKO to offer flexible routing and multiple ocean transportation options for both part container (LCL) and full container (FCL) movements. SEKO also boasts sophisticated tracking and tracing capability thanks to MySEKO, an exclusive online customer portal and software for freight rate management. MySEKO allows customers to track ocean and sea freight from origin to destination, providing access to view and upload all necessary documentation, and to receive status updates via email and configurable reports.

“SEKO has become a trailblazer not only in the logistics industry, but particularly in ocean freight forwarding, and I have been long impressed with their growth and constant dedication to their customers. I am very excited to join the team and get started advancing their Ocean Freight strategies,” said Hofmann.

Hofmann is based in SEKO’s APAC regional headquarters in Hong Kong and reports to Christensen, as well as James Gagne, CEO of SEKO.

To learn more about SEKO Logistics, visit: www.sekologistics.com.

About SEKO Logistics

Built on nearly 50 years of logistics expertise, SEKO Logistics is the no-nonsense global end-to-end logistics partner – from shipper to consumer. SEKO delivers client-first service, expert reliability and tech-driven shipping solutions that turn customers’ supply chains into a competitive advantage. With over 150 offices in more than 60 countries, SEKO helps you move at the speed of global commerce. Learn more at www.sekologistics.com.


Contacts

Kellie Clock
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231-571-0718

OMAHA, Neb.--(BUSINESS WIRE)--Green Plains Inc. (NASDAQ:GPRE) today announced that it will participate in two upcoming conferences: Credit Suisse 28th Annual Energy Summit, February 27 and 28; and Bank of America 2023 Global Agriculture and Materials Conference, March 2.


In addition, Green Plains President and CEO Todd Becker will participate in a fireside chat at the Bank of America 2023 Global Agriculture and Materials Conference, at 3:50 p.m. Eastern Time, March 2.

Materials used for the conferences, along with webcast links if applicable, will be available on the Investors page of Green Plains’ website at https://investor.gpreinc.com/events-presentations.

About Green Plains Inc.

Green Plains Inc. (NASDAQ:GPRE) is a leading biorefining company focused on the development and utilization of fermentation, agricultural and biological technologies in the processing of annually renewable crops into sustainable value-added ingredients. This includes the production of cleaner low carbon biofuels, renewable feedstocks for advanced biofuels and high purity alcohols for use in cleaners and disinfectants. Green Plains is an innovative producer of Ultra-High Protein and novel ingredients for animal and aquaculture diets to help satisfy a growing global appetite for sustainable protein. The Company also owns a 48.8% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. For more information, visit www.gpreinc.com.


Contacts

Green Plains Inc.
Investors: Phil Boggs | Executive Vice President, Investor Relations | 402.884.8700 | This email address is being protected from spambots. You need JavaScript enabled to view it.
Media: Lisa Gibson | Communications Manager | 402.952.4971 | This email address is being protected from spambots. You need JavaScript enabled to view it.

EWING, N.J.--(BUSINESS WIRE)--$OLED #OLED--Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today announced that its Board of Directors approved an increased cash dividend of $0.35 per share on the Company's common stock for the first quarter, up from the previous quarter’s dividend of $0.30 per share. The dividend is payable on March 31, 2023, to shareholders of record on March 17, 2023. The dividend reflects our expected continued cash flow generation, and commitment to return capital to our shareholders. Future dividends will be subject to Board approval.


About Universal Display Corporation

Universal Display Corporation (Nasdaq: OLED) is a leader in the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. Founded in 1994 and with subsidiaries and offices around the world, the Company currently owns, exclusively licenses or has the sole right to sublicense more than 5,500 patents issued and pending worldwide. Universal Display licenses its proprietary technologies, including its breakthrough high-efficiency UniversalPHOLED® phosphorescent OLED technology that can enable the development of energy-efficient and eco-friendly displays and solid-state lighting. The Company also develops and offers high-quality, state-of-the-art UniversalPHOLED materials that are recognized as key ingredients in the fabrication of OLEDs with peak performance. In addition, Universal Display delivers innovative and customized solutions to its clients and partners through technology transfer, collaborative technology development and on-site training. To learn more about Universal Display Corporation, please visit https://oled.com/.

Universal Display Corporation and the Universal Display Corporation logo are trademarks or registered trademarks of Universal Display Corporation. All other company, brand or product names may be trademarks or registered trademarks.

All statements in this document that are not historical, such as those relating to the projected adoption, development and advancement of the Company’s technologies, and the Company’s expected results and future declaration of dividends, as well as the growth of the OLED market and the Company’s opportunities in that market, are forward-looking financial statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this document, as they reflect Universal Display Corporation’s current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties are discussed in greater detail in Universal Display Corporation’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, in particular, the section entitled “Risk Factors” in Universal Display Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.

Follow Universal Display Corporation

Twitter
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(OLED-C)


Contacts

Universal Display Contact:
Darice Liu
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+1 609-964-5123

Reduced debt by over $1.0 billion in 2022, improving financial strength and enhancing resilience through commodity cycles

SPRING, Texas--(BUSINESS WIRE)--Southwestern Energy Company (NYSE: SWN) (the “Company” or “Southwestern Energy”) today announced financial and operating results for the fourth quarter and full-year 2022 and provided 2023 guidance.


“In 2022, the Company delivered results that both strengthened its financial position and demonstrated the tangible benefits of its expanded and improved asset base. Financially, we repaid over $1 billion of debt, lowering leverage into our target range, and secured upgrades to one-notch below investment grade from all three agencies while also initiating a share repurchase program. Operationally, we delivered results above plan including successful integration of our Haynesville assets and performance improvements in our first year of operations,” said Bill Way, Southwestern Energy President and Chief Executive Officer.

“Given near-term market conditions, we have proactively moderated activity, resulting in slightly lower expected production for 2023, and have the flexibility and optionality in our business to adjust as needed. In addition, we expect to drive improved capital efficiency and cost reductions across our operations. We believe the Company’s deep, high-quality inventory, advantaged access to growing demand centers including LNG, and financial strength position it to capitalize on structurally supportive longer-term natural gas fundamentals and generate sustainable free cash flow through the cycle,” continued Way.

2022 Highlights

  • Generated $3.2 billion net cash provided by operating activities, $1.8 billion net income and $1.5 billion adjusted net income (non-GAAP)
    - Adjusted EBITDA (non-GAAP) of $3.3 billion and free cash flow (non-GAAP) of $848 million
  • Reduced total debt by over $1.0 billion, including the repayment of Term Loan B in December 2022, lowering leverage to 1.3x net debt to adjusted EBITDA (non-GAAP)
  • Repurchased $125 million of common stock
  • Received ratings upgrades to one-notch below investment grade from all three credit agencies; positive outlook by Fitch in August 2022 and S&P in January 2023
  • Reported proved reserves of 21.6 Tcfe; post-tax PV-10 of $37.6 billion and pre-tax PV-10 (non-GAAP) of $46.4 billion using SEC prices
  • Produced 1.7 Tcfe, or 4.7 Bcfe per day, including 4.2 Bcf per day of natural gas and 97 MBbls per day of liquids
  • Successfully integrated Haynesville acquisitions and delivered performance improvements in first year of operations
  • Announced a longer-term GHG reduction target and achieved responsibly sourced gas certification for all production

2023 Guidance

The Company’s 2023 plan continues to optimize economic returns and cash flow and maintain financial strength through the cycle. The Company expects to deliver further operational efficiencies and cost reductions to partially offset the anticipated inflationary environment. Highlights are presented below; full guidance is available in the attachments to this press release and on the Company’s website.

  • Production of approximately 4.6 Bcfe per day, including approximately 4.0 Bcf per day of natural gas and 100 MBbls per day of liquids
  • Capital investment of $2.2 to $2.5 billion inclusive of $200 to $220 million in capitalized interest and expense
  • Expect to average 10 – 11 rigs and 4 – 5 frac fleets, down from 13 rigs and 5 fleets in 2022
  • Estimate 138 to 148 gross operated wells to sales including 70 to 75 in the Haynesville with an average lateral length of approximately 8,500 feet and 68 to 73 in Appalachia with an average lateral length of greater than 15,000 feet
  • Basis protected for approximately 90% of expected natural gas production
    -
    Haynesville protected through firm sales and transportation to Gulf Coast and LNG corridor
    -
    Appalachia natural gas basis protected from in-basin basis exposure through transportation portfolio, firm sales agreements, and financial basis hedges

2022 Fourth Quarter and Full Year Results

Results include the impacts of the Indigo and GEP acquisitions, which closed on September 1, 2021 and December 31, 2021, respectively.

FINANCIAL STATISTICS

 

For the three months ended

 

For the years ended

 

 

December 31,

 

December 31,

(in millions)

 

2022

 

2021

 

2022

 

2021

Net income (loss)

 

$

2,901

 

 

$

2,361

 

 

$

1,849

 

 

$

(25

)

Adjusted net income (non-GAAP)

 

$

287

 

 

$

318

 

 

$

1,479

 

 

$

831

 

Diluted earnings (loss) per share

 

$

2.63

 

 

$

2.31

 

 

$

1.66

 

 

$

(0.03

)

Adjusted diluted earnings per share (non-GAAP)

 

$

0.26

 

 

$

0.31

 

 

$

1.33

 

 

$

1.05

 

Adjusted EBITDA (non-GAAP)

 

$

732

 

 

$

671

 

 

$

3,283

 

 

$

1,779

 

Net cash provided by operating activities

 

$

958

 

 

$

533

 

 

$

3,154

 

 

$

1,363

 

Net cash flow (non-GAAP)

 

$

677

 

 

$

633

 

 

$

3,057

 

 

$

1,655

 

Total capital investments (1)

 

$

537

 

 

$

292

 

 

$

2,209

 

 

$

1,108

 

Free cash flow (non-GAAP)

 

$

140

 

 

$

341

 

 

$

848

 

 

$

547

 

(1)

Capital investments on the cash flow statement include an increase of $44 million and an increase of $7 million for the three months ended December 31, 2022 and 2021, respectively, and an increase of $88 million and an increase of $70 million for the years ended December 31, 2022 and 2021, respectively, relating to the change in accrued expenditures between periods.

Fourth Quarter 2022 Financial Results

For the quarter ended December 31, 2022, Southwestern Energy recorded net income of $2.9 billion, or $2.63 per diluted share. Adjusting for the impact of the Company’s unsettled derivatives, tax valuation allowance and other one-time items, adjusted net income (non-GAAP) was $287 million, or $0.26 per diluted share, and adjusted EBITDA (non-GAAP) was $732 million. Net cash provided by operating activities was $958 million, net cash flow (non-GAAP) was $677 million, and free cash flow (non-GAAP) was $140 million.

As indicated in the table below, fourth quarter 2022 weighted average realized price, including $0.26 per Mcfe of transportation expenses, was $5.45 per Mcfe, excluding the impact of derivatives. Including derivatives, the weighted average realized price for the quarter was up 2% from $2.81 per Mcfe in 2021 to $2.88 per Mcfe in 2022 primarily due to higher commodity prices, including a 7% increase in NYMEX and a 7% increase in WTI, partially offset by the impact of settled derivatives. Fourth quarter 2022 weighted average realized price before transportation expense and excluding derivatives was $5.71 per Mcfe.

Full Year 2022 Financial Results

For the year ended December 31, 2022, the Company recorded net income of $1,849 million, or $1.66 per diluted share. Adjusting for the impact of the Company’s tax valuation allowance and other one-time items, adjusted net income (non-GAAP) was $1,479 million, or $1.33 per diluted share, and adjusted EBITDA (non-GAAP) was $3,283 million. Net cash provided by operating activities was $3,154 million, net cash flow (non-GAAP) was $3,057 million, and free cash flow (non-GAAP) was $848 million.

In 2022, the Company primarily utilized free cash flow generated to reduce its debt balance. As of December 31, 2022, Southwestern Energy had total debt of $4.4 billion and net debt to adjusted EBITDA (non-GAAP) of 1.3x. This compares to total debt of $5.4 billion as of December 31, 2021. At the end of 2022, the Company had $250 million of borrowings under its revolving credit facility and $110 million in outstanding letters of credit.

On December 30, 2022, the Company repaid its Term Loan B using cash on hand and borrowings on its revolving credit facility. On January 27, 2023 the Company delivered notice to the holders of its 7.75% Senior Notes due 2027 that it intends to redeem such notes on February 26, 2023, utilizing cash on hand and borrowings under its revolving credit facility.

The Company is currently one-notch below an investment grade credit rating by all three credit agencies. In January 2023, S&P updated Southwestern Energy to positive outlook, joining Fitch, which updated the Company to positive outlook in August 2022.

In 2022, the Company repurchased 17.3 million shares of its common stock for a total cost of approximately $125 million. In the fourth quarter of 2022, the Company repurchased 3.6 million shares of its common stock for a total cost of approximately $25 million.

As indicated in the table below, for the full year 2022, weighted average realized price, including $0.25 per Mcfe of transportation expenses, was $6.10 per Mcfe, excluding the impact of derivatives. Including derivatives, the weighted average realized price for the quarter was up 21% from $2.53 per Mcfe in 2021 to $3.06 per Mcfe in 2022 primarily due to higher commodity prices, including a 73% increase in NYMEX and a 39% increase in WTI, partially offset by the impact of settled derivatives. In 2022, the weighted average realized price before transportation expense and excluding derivatives was $6.35 per Mcfe.

Realized Prices

 

For the three months ended

 

For the years ended

(includes transportation costs)

 

December 31,

 

December 31,

 

 

2022

 

2021

 

2022

 

2021

Natural Gas Price:

 

 

 

 

 

 

 

 

NYMEX Henry Hub price ($/MMBtu) (1)

 

$

6.26

 

 

$

5.83

 

 

$

6.64

 

 

$

3.84

 

Discount to NYMEX (2)

 

(0.79

)

 

(0.73

)

 

(0.66

)

 

(0.53

)

Realized gas price, excluding derivatives ($/Mcf)

 

$

5.47

 

 

$

5.10

 

 

$

5.98

 

 

$

3.31

 

Gain on settled financial basis derivatives ($/Mcf)

 

0.17

 

 

0.05

 

 

0.08

 

 

0.09

 

Loss on settled commodity derivatives ($/Mcf)

 

(2.98

)

 

(2.55

)

 

(3.27

)

 

(1.12

)

Realized gas price, including derivatives ($/Mcf)

 

$

2.66

 

 

$

2.60

 

 

$

2.79

 

 

$

2.28

 

Oil Price:

 

 

 

 

 

 

 

 

WTI oil price ($/Bbl) (3)

 

$

82.65

 

 

$

77.19

 

 

$

94.23

 

 

$

67.92

 

Discount to WTI (4)

 

(7.71

)

 

(8.27

)

 

(7.28

)

 

(9.12

)

Realized oil price, excluding derivatives ($/Bbl)

 

$

74.94

 

 

$

68.92

 

 

$

86.95

 

 

$

58.80

 

Realized oil price, including derivatives ($/Bbl)

 

$

46.15

 

 

$

42.03

 

 

$

50.83

 

 

$

40.48

 

NGL Price, per Bbl:

 

 

 

 

 

 

 

 

Realized NGL price, excluding derivatives ($/Bbl)

 

$

25.52

 

 

$

36.79

 

 

$

34.35

 

 

$

28.72

 

Realized NGL price, including derivatives ($/Bbl)

 

$

23.40

 

 

$

21.44

 

 

$

26.52

 

 

$

18.20

 

Percentage of WTI, excluding derivatives

 

31

%

 

48

%

 

36

%

 

42

%

Total Weighted Average Realized Price:

 

 

 

 

 

 

 

 

Excluding derivatives ($/Mcfe)

 

$

5.45

 

 

$

5.36

 

 

$

6.10

 

 

$

3.74

 

Including derivatives ($/Mcfe)

 

$

2.88

 

 

$

2.81

 

 

$

3.06

 

 

$

2.53

 

(1)

Based on last day settlement prices from monthly futures contracts.

(2)

This discount includes a basis differential, a heating content adjustment, physical basis sales, third-party transportation charges and fuel charges, and excludes financial basis derivatives.

(3)

Based on the average daily settlement price of the nearby month futures contract over the period.

(4)

This discount primarily includes location and quality adjustments.

Operational Results

Total production for the quarter ended December 31, 2022 was 427 Bcfe, comprised of 87% natural gas, 11% NGLs and 2% oil. Production totaled 1.7 Tcfe for the year ended December 31, 2022.

Capital investments in the fourth quarter of 2022 were $537 million, bringing full year capital investment to $2,209 million. The Company brought 133 wells to sales, drilled 138 wells and completed 139 wells during the year.

 

 

For the three months ended

 

For the years ended

 

 

December 31,

 

December 31,

 

 

2022

 

2021

 

2022

 

2021

Production

 

 

 

 

 

 

 

 

Gas production (Bcf)

 

372

 

 

331

 

 

1,520

 

 

1,015

 

Oil production (MBbls)

 

1,187

 

 

1,388

 

 

4,993

 

 

6,610

 

NGL production (MBbls)

 

8,001

 

 

7,685

 

 

30,446

 

 

30,940

 

Total production (Bcfe)

 

427

 

 

385

 

 

1,733

 

 

1,240

 

 

 

 

 

 

 

 

 

 

Average unit costs per Mcfe

 

 

 

 

 

 

 

 

Lease operating expenses (1)

 

$

1.00

 

 

$

0.96

 

 

$

0.98

 

 

$

0.95

 

General & administrative expenses (2)(3)

 

$

0.10

 

 

$

0.08

 

 

$

0.09

 

 

$

0.10

 

Taxes, other than income taxes

 

$

0.16

 

 

$

0.12

 

 

$

0.15

 

 

$

0.11

 

Full cost pool amortization

 

$

0.72

 

 

$

0.53

 

 

$

0.67

 

 

$

0.42

 

(1)

Includes post-production costs such as gathering, processing, fractionation and compression.

(2)

Excludes $27 million in merger-related expenses for the year ended December 31, 2022.

(3)

Excludes $37 million and $76 million in merger-related expenses for the three months and year ended December 31, 2021, respectively. Excludes $7 million in restructuring charges for the year ended December 31, 2021.

Appalachia – In the fourth quarter, total production was 259 Bcfe, with NGL production of 87 MBbls per day and oil production of 13 MBbls per day. The Company drilled 15 wells, completed 12 wells, and placed 15 wells to sales with an average lateral length of 16,081 feet and average well cost of $857 per lateral foot.

In 2022, Appalachia’s total production was 1.1 Tcfe, including 97 MBbls per day of liquids. During 2022, the Company drilled 67 wells, completed 67 wells, and placed 63 wells to sales, with an average lateral length of 14,587 feet. At year-end, the Company had 24 drilled but uncompleted wells in Appalachia. During 2022, Appalachia well costs averaged $821 per lateral foot for wells placed to sales.

Haynesville – In the fourth quarter, total production was 168 Bcf. There were 18 wells drilled, 19 wells completed, and 13 wells placed to sales in the quarter with an average lateral length of 9,065 feet and average well cost of $1,927 per lateral foot.

Production for the year was 679 Bcf in Haynesville. The Company drilled 71 wells, completed 72 wells, and brought 70 wells to sales, with an average lateral length of 8,984 feet. The Company had 29 drilled but uncompleted wells at year-end. During 2022, Haynesville well costs averaged $1,758 per lateral foot for wells placed to sales.

E&P Division Results

For the three months ended
December 31, 2022

For the year ended
December 31, 2022

 

Appalachia

Haynesville

Appalachia

 

Haynesville

Gas production (Bcf)

 

204

 

168

 

841

 

679

Liquids production

 

 

 

 

Oil (MBbls)

 

1,181

 

5

 

4,967

 

20

NGL (MBbls)

 

8,001

 

 

30,445

 

Production (Bcfe)

 

259

 

168

 

1,054

 

679

 

 

 

 

 

Capital investments ($ in millions)

 

 

 

 

Drilling and completions, including workovers

$

181

$

262

$

758

$

1,130

Land acquisition and other

 

23

 

6

 

68

 

20

Capitalized interest and expense

 

33

 

19

 

127

 

79

Total capital investments

$

237

$

287

$

953

$

1,229

 

 

 

 

 

Gross operated well activity summary

 

 

 

 

Drilled

 

15

 

18

 

67

 

71

Completed

 

12

 

19

 

67

 

72

Wells to sales

 

15

 

13

 

63

 

70

 

 

 

 

 

Total weighted average realized price per Mcfe, excluding derivatives

$

5.19

$

5.85

$

5.99

$

6.27

Wells to sales summary

For the three months ended
December 31, 2022

 

For the year ended
December 31, 2022

 

Gross wells
to sales

Average
lateral length

 

Gross wells
to sales

Average
lateral length

Appalachia

 

 

 

 

Super Rich Marcellus

3

18,900

20

15,198

Rich Marcellus

7

14,711

17

12,983

Dry Gas Utica

2

12,366

12

12,665

Dry Gas Marcellus

3

18,935

14

17,311

Haynesville(1)

13

9,065

70

8,984

Total

28

 

133

 

(1)

Gross wells to sales and average lateral length for the year ended December 31, 2022 includes wells drilled and completed by previous operators.

2022 Proved Reserves

The Company increased its total proved reserves to 21.6 Tcfe at year-end 2022, up from 21.1 Tcfe at year-end 2021. The increase was primarily related to extensions, discoveries and other additions, partially offset by production.

The after-tax PV-10 (standardized measure) of the Company’s reserves was $37.6 billion. The PV-10 value before the impact of taxes (non-GAAP) was $46.4 billion, including $31.4 billion from Appalachia and $15.0 billion from Haynesville. SEC prices used for the Company’s reported 2022 reserves were $6.36 per Mcf NYMEX Henry Hub, $93.67 per Bbl WTI, and $34.35 per Bbl NGLs.

Proved Reserves Summary

For the years ended December 31,

 

2022

 

2021

Proved reserves (in Bcfe)

 

21,625

 

 

 

21,148

 

 

 

 

 

 

 

PV-10: (in millions)

 

 

 

 

 

Pre-tax

$

46,435

 

 

$

22,420

 

PV of taxes

 

(8,847

)

 

 

(3,689

)

After-tax (in millions)

$

37,588

 

 

$

18,731

 

 

 

 

 

 

 

Percent of estimated proved reserves that are:

 

 

 

 

 

Natural gas

 

80

%

 

 

82

%

NGLs and oil

 

20

%

 

 

18

%

Proved developed

 

56

%

 

 

54

%

2022 Proved Reserves by Division (Bcfe)

 

Appalachia

 

Haynesville

 

Total

 

 

 

 

 

 

 

Proved reserves, beginning of year

 

15,527

 

 

5,621

 

 

21,148

 

Price revisions

 

(4

)

 

59

 

 

55

 

 

 

 

 

 

 

 

Performance revisions

 

381

 

 

136

 

 

517

 

Infill revisions

 

577

 

 

 

 

577

 

Changes in development plan

 

(991

)

 

(333

)

 

(1,324

)

Performance and production revisions

 

(33

)

 

(197

)

 

(230

)

 

 

 

 

 

 

 

Extensions, discoveries and other additions

 

1,273

 

 

1,155

 

 

2,428

 

Production

 

(1,054

)

 

(679

)

 

(1,733

)

Acquisition of reserves in place

 

 

 

 

 

 

Disposition of reserves in place

 

(43

)

 

 

 

(43

)

Proved reserves, end of year

 

15,666

 

 

5,959

 

 

21,625

 

The Company reported 2022 proved developed finding and development (“PD F&D”) costs of $0.75 per Mcfe when excluding the impact of capitalized interest and portions of capitalized G&A costs in accordance with the full cost method of accounting. The 2022 PD F&D for Appalachia was $0.50 per Mcfe and Haynesville was $1.17 per Mcfe.

Proved Developed Finding and Development (1)

12 Months Ended
December 31,

Total PD Adds (Bcfe):

2022

New PD adds

 

406

 

PUD conversions

 

2,160

 

Total PD Adds

 

2,566

 

 

 

 

Costs Incurred (in millions):

 

 

Unproved property acquisition costs

$

202

 

Exploration costs

 

 

Development costs

 

2,021

 

Capitalized Costs Incurred

$

2,223

 

 

 

 

Subtract (in millions):

 

 

Proved property acquisition costs

$

 

Unproved property acquisition costs

 

(202

)

Capitalized interest and expense associated with development and exploration (2)

 

(85

)

PD Costs Incurred

$

1,936

 

 

 

 

PD F&D (PD Cost Incurred / Total PD Adds)

$

0.75

 

Note: Amounts may not add due to rounding

(1)

Includes Appalachia and Haynesville.

(2)

Adjusting for the impacts of the full cost accounting method for comparability.

Conference Call

Southwestern Energy will host a conference call and webcast on Friday, February 24, 2023 at 10:00 a.m. Central to discuss fourth quarter and fiscal year 2022 results. To participate, dial US toll-free 877-883-0383, or international 412-902-6506 and enter access code 1822604. The conference call will webcast live at www.swn.com.

A replay will also be available on SWN’s website at www.swn.com following the call.

About Southwestern Energy

Southwestern Energy Company (NYSE: SWN) is a leading U.S. producer and marketer of natural gas and natural gas liquids focused on responsibly developing large-scale energy assets in the nation’s most prolific shale gas basins. SWN’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. For additional information, please visit www.swn.com and www.swncrreport.com.

Forward Looking Statement

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. These statements are based on current expectations. The words “anticipate,” “intend,” “plan,” “project,” “estimate,” “continue,” “potential,” “should,” “could,” “may,” “will,” “objective,” “guidance,” “outlook,” “effort,” “expect,” “believe,” “predict,” “budget,” “projection,” “goal,” “forecast,” “model,” “target”, “seek”, “strive,” “would,” “approximate,” and similar words are intended to identify forward-looking statements. Statements may be forward looking even in the absence of these particular words.

Examples of forward-looking statements include, but are not limited to, the expectations of plans, business strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop reserves, drilling plans and programs (including the number of rigs and frac crews to be used), estimated reserves and inventory duration, projected production and sales volume and growth rates, projected commodity prices, basis and average differential, impact of commodity prices on our business, projected average well costs, generation of free cash flow, our return of capital strategy, including the amount and timing of any redemptions, repayments or repurchases of our common stock, outstanding debt securities or other debt instruments, leverage targets, our ability to maintain or improve our credit ratings, leverage levels and financial profile, our hedging strategy, our environmental, social and governance (ESG) initiatives and our ability to achieve anticipated results of such initiatives, expected benefits from acquisitions, potential acquisitions and strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits of any such transactions or other initiatives. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. All forward-looking statements speak only as of the date of this news release. The estimates and assumptions upon which forward-looking statements are based are inherently uncertain and involve a number of risks that are beyond our control. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and we cannot assure you that such statements will be realized or that the events and circumstances they describe will occur. Therefore, you should not place undue reliance on any of the forward-looking statements contained herein.

Factors that could cause our actual results to differ materially from those indicated in any forward-looking statement are subject to all of the risks and uncertainties incident to the exploration for and the development, production, gathering and sale of natural gas, NGLs and oil, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, the costs and results of drilling and operations, lack of availability of drilling and production equipment and services, the ability to add proved reserves in the future, environmental risks, drilling and other operating risks, legislative and regulatory changes, the uncertainty inherent in estimating natural gas and oil reserves and in projecting future rates of production, the quality of technical data, cash flow and access to capital, the timing of development expenditures, a change in our credit rating, an increase in interest rates, our ability to increase commitments under our revolving credit facility, our hedging and other financial contracts, our ability to maintain leases that may expire if production is not established or profitably maintained, our ability to transport our production to the most favorable markets or at all, any increase in severance or similar taxes, the impact of the adverse outcome of any material litigation against us or judicial decisions that affect us or our industry generally, the effects of weather or power outages, increased competition, the financial impact of accounting regulations and critical accounting policies, the comparative cost of alternative fuels, credit risk relating to the risk of loss as a result of non-performance by our counterparties, impacts of world health events, including the COVID-19 pandemic, cybersecurity risks, geopolitical and business conditions in key regions of the world, our ability to realize the expected benefits from acquisitions and strategic transactions, our ability to achieve our GHG emission reduction goals and the costs associated therewith, and any other factors described or referenced under Item 7.


Contacts

Investor Contact
Brittany Raiford
Director, Investor Relations
(832) 796-7906
This email address is being protected from spambots. You need JavaScript enabled to view it.


Read full story here

OMAHA, Neb.--(BUSINESS WIRE)--Werner Enterprises, Inc. (Nasdaq: WERN), a premier transportation and logistics provider, announced today that its Board of Directors appointed Christopher D. Wikoff to serve as Executive Vice President, Treasurer and Chief Financial Officer (“CFO”) effective April 18, 2023. Mr. Wikoff succeeds John J. Steele, who announced his retirement plans last August.


Mr. Wikoff, 48, has over 20 years of finance leadership and business transformation experience with public and private multinational companies. Prior to joining Werner, Mr. Wikoff served as Executive Vice President and Treasurer of West Technology Group, formerly Intrado Corporation, a cloud-based, global technology partner, where he was responsible for Accounting, Treasury, Tax, Investor/Lender Relations and Financial Shared Services. During this time, Mr. Wikoff was integral in leading West’s finance and business transformation, in addition to numerous capital market transactions, acquisitions and divestitures.

Prior to West, Mr. Wikoff served as Vice President, Finance and Treasurer at CommScope (Nasdaq: COMM), a Fortune 1000 network infrastructure provider, from 2003 to 2015, where he served as a corporate finance leader during a period of significant global growth and transformation. Prior to CommScope, Mr. Wikoff served in several corporate and divisional finance leadership roles with Avaya from 2000 to 2003.

“We are excited to welcome Chris to our executive team and to Werner at this exciting time in our history. An accomplished and strategic finance leader, Chris shares our company values and brings a growth mindset and deep experience in technology, operational process, treasury and investor relations,” said Derek J. Leathers, Werner’s Chairman, President and Chief Executive Officer. “Chris will be integral in ensuring continued financial discipline and focus in support of our DRIVE strategy and value delivery to our customers, associates and shareholders. I am eager to have Chris on board, bringing to bear his experience, strategy and vision to help move Werner forward.”

“I am honored and excited to join a very talented and experienced team at Werner,” said incoming CFO Chris Wikoff. “The Company is a premier transportation and logistics company and I look forward to building on an already strong foundation to drive value for all our stakeholders, as well as partnering with Derek and the rest of the leadership team to further elevate our financial rigor while ensuring continued customer excellence.”

“On behalf of the entire Werner organization, I would like to thank John for his 33 years of dedication and contributions to Werner’s success and for his commitment to ensuring a seamless transition. We wish John only the best in his retirement,” concluded Mr. Leathers.

About Werner Enterprises

Werner Enterprises, Inc. (Nasdaq: WERN) delivers superior truckload transportation and logistics services across the United States, Mexico and Canada. With 2022 revenues of $3.3 billion, an industry-leading modern truck and trailer fleet, over 14,000 talented associates and our innovative Werner EDGE technology, we are an essential solutions provider for customers who value the integrity of their supply chain and require safe and exceptional on-time service. Werner provides Dedicated and One-Way Truckload services as well as Logistics services that include truckload brokerage, freight management, intermodal and final mile. As an industry leader, Werner is deeply committed to promoting sustainability and supporting diversity, equity and inclusion.

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are based on information presently available to the Company’s management and are current only as of the date made. Actual results could also differ materially from those anticipated as a result of a number of factors, including, but not limited to, those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and subsequently filed Quarterly Reports on From 10-Q.

For those reasons, undue reliance should not be placed on any forward-looking statement. The Company assumes no duty to update or revise any forward-looking statement, although it may do so from time to time as management believes is warranted or as may be required by applicable securities law. Any such updates or revisions may be made by filing reports with the U.S. Securities and Exchange Commission (“SEC”), through the issuance of press releases or by other methods of public disclosure.


Contacts

Derek J. Leathers
Chairman, President
and Chief Executive Officer
(402) 894-3529

ALEXANDRIA, Va.--(BUSINESS WIRE)--VSE Corporation (NASDAQ: VSEC), a leading provider of aftermarket distribution and maintenance, repair and overhaul (MRO) services for land, sea and air transportation assets supporting commercial and government markets, today announced that it will issue fourth quarter and full-year 2022 results after market close on Wednesday, March 8, 2023. A conference call will be held Thursday, March 9, 2023 at 8:30 A.M. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session.


A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of VSE’s website at https://ir.vsecorp.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.

To participate in the live teleconference on March 9, 2023:

Domestic Live:

(877) 407-0789

International Live:

(201) 689-8562

Web link:

Click Here

 

 

To listen to a replay of the teleconference through March 23, 2023:

Domestic Replay:

(844) 512-2921

International Replay:

(412) 317-6671

Replay PIN Number:

13735917

ABOUT VSE CORPORATION

VSE is a leading provider of aftermarket distribution and repair services for land, sea and air transportation assets for commercial and government markets. Core services include MRO services, parts distribution, supply chain management and logistics, engineering support, and consulting and training services for global commercial, federal, military and defense customers. VSE also provides information technology and energy consulting services. For additional information regarding VSE’s services and products, visit www.vsecorp.com.

FORWARD-LOOKING STATEMENTS

This release contains statements that, to the extent they are not recitations of historical fact, constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All such statements are intended to be subject to the safe harbor protection provided by applicable securities laws. For discussions identifying some important factors that could cause actual VSE results to differ materially from those anticipated in the forward-looking statements in this news release, see VSE’s public filings with the Securities and Exchange Commission. The forward-looking statements included herein are only made as of the date hereof, and VSE specifically disclaims any obligation to update these statements in the future.


Contacts

INVESTOR RELATIONS CONTACT:
Noel Ryan | Phone: 720.778.2415 | This email address is being protected from spambots. You need JavaScript enabled to view it.

  • 4Q22 diluted GAAP EPS of $0.47, diluted non-GAAP(1) EPS of $0.93, on revenue of $624.2 million
  • 4Q22 net income of $43.0 million, adjusted EBITDA(1) of $130.1 million
  • 2022 diluted GAAP EPS of $2.60, diluted non-GAAP(1) EPS of $3.13, on revenue of $2.23 billion
  • 2022 net income of $238.6 million, adjusted EBITDA(1) of $439.4 million
  • 2022 operating cash flow of $244.7 million, free cash flow(1) of $46.4 million
  • Initiates 2023 guidance in-line with prior outlook commentary
  • Increases quarterly cash dividend to $0.23 per share

LYNCHBURG, Va.--(BUSINESS WIRE)--$BWXT #earnings--BWX Technologies, Inc. (NYSE: BWXT) ("BWXT", "we", "us" or the "Company") reported fourth-quarter and full-year 2022 results. A reconciliation of non-GAAP results are detailed in Exhibit 1.


“As we expected, BWXT closed out 2022 with solid fourth quarter financial results," said Rex D. Geveden, president and chief executive officer. “We benefited from our balanced and growing portfolio this year as strong performance in Commercial Operations largely offset headwinds in the Government Operations segment owing to a tough labor market. Operating performance outpaced macroeconomic and accounting headwinds, including lower pension income and increasing interest rates, resulting in high-single digit underlying EBITDA and positive earnings per share growth for the year.”

“We continue to face labor pressures and expect that to detract from our full potential in 2023 because our growth will likely be muted by attrition and the availability of qualified workers. Despite these macroeconomic headwinds, I am energized about the expected future trajectory of BWXT because we see increasing demand in every market in which we participate. We see near-term opportunity in space-based microreactors, DOE services, commercial small modular reactors, nuclear medicine, and potential new demand related to the AUKUS trilateral security agreement. Accordingly, we expect 2023 to shape up as another strategic milestone year as we continue to drive top-line gains, accelerate EBITDA growth, and inflect free cash flow,” said Geveden.

Financial Results Summary

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2022

 

2021

 

$ Change

 

% Change

 

2022

 

2021

 

$ Change

 

% Change

 

 

(Unaudited)

(In millions, except per share amounts)

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Operations

 

$

517.6

 

 

$

479.2

 

 

$

38.5

 

 

8%

 

$

1,808.5

 

 

$

1,725.1

 

 

$

83.4

 

 

5%

Commercial Operations

 

$

107.1

 

 

$

114.5

 

 

$

(7.4

)

 

(6)%

 

$

427.4

 

 

$

407.1

 

 

$

20.3

 

 

5%

Consolidated

 

$

624.2

 

 

$

592.0

 

 

$

32.2

 

 

5%

 

$

2,232.8

 

 

$

2,124.1

 

 

$

108.8

 

 

5%

Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Operations

 

$

102.8

 

 

$

90.9

 

 

$

11.9

 

 

13%

 

$

336.5

 

 

$

329.5

 

 

$

7.0

 

 

2%

Commercial Operations

 

$

3.7

 

 

$

18.4

 

 

$

(14.6

)

 

(80)%

 

$

27.4

 

 

$

35.2

 

 

$

(7.8

)

 

(22)%

Unallocated Corporate (Expense)

 

$

(4.6

)

 

$

(7.1

)

 

$

2.4

 

 

NM

 

$

(15.3

)

 

$

(18.9

)

 

$

3.6

 

 

NM

Consolidated

 

$

101.9

 

 

$

102.2

 

 

$

(0.3

)

 

—%

 

$

348.6

 

 

$

345.8

 

 

$

2.7

 

 

1%

Consolidated non-GAAP(1)

 

$

111.1

 

 

$

104.6

 

 

$

6.5

 

 

6%

 

$

365.6

 

 

$

349.0

 

 

$

16.6

 

 

5%

EPS (Diluted)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

$

0.47

 

 

$

1.26

 

 

$

(0.79

)

 

(63)%

 

$

2.60

 

 

$

3.24

 

 

$

(0.64

)

 

(20)%

Non-GAAP(1)

 

$

0.93

 

 

$

0.95

 

 

$

(0.02

)

 

(2)%

 

$

3.13

 

 

$

3.06

 

 

$

0.07

 

 

2%

Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

$

43.0

 

 

$

116.9

 

 

$

(73.9

)

 

(63)%

 

$

238.6

 

 

$

306.3

 

 

$

(67.7

)

 

(22)%

Non-GAAP(1)

 

$

85.7

 

 

$

88.2

 

 

$

(2.5

)

 

(3)%

 

$

287.5

 

 

$

289.6

 

 

$

(2.2

)

 

(1)%

Adjusted EBITDA(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Operations

 

$

115.8

 

 

$

102.9

 

 

$

12.8

 

 

12%

 

$

386.5

 

 

$

372.2

 

 

$

14.3

 

 

4%

Commercial Operations

 

$

13.6

 

 

$

23.9

 

 

$

(10.3

)

 

(43)%

 

$

53.9

 

 

$

56.0

 

 

$

(2.1

)

 

(4)%

Corporate

 

$

0.7

 

 

$

(3.7

)

 

$

4.3

 

 

NM

 

$

(1.1

)

 

$

(10.2

)

 

$

9.1

 

 

NM

Consolidated

 

$

130.1

 

 

$

123.2

 

 

$

6.9

 

 

6%

 

$

439.4

 

 

$

418.1

 

 

$

21.3

 

 

5%

Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Cash Flow(2)

 

$

107.7

 

 

$

160.4

 

 

$

(52.8

)

 

(33)%

 

$

244.7

 

 

$

386.0

 

 

$

(141.3

)

 

(37)%

Capital Expenditures(2)

 

$

63.7

 

 

$

74.4

 

 

$

(10.7

)

 

(14)%

 

$

198.3

 

 

$

311.1

 

 

$

(112.7

)

 

(36)%

Free Cash Flow(1)

 

$

43.9

 

 

$

86.1

 

 

$

(42.1

)

 

(49)%

 

$

46.4

 

 

$

75.0

 

 

$

(28.6

)

 

(38)%

Share Repurchases(2)

 

$

 

 

$

40.0

 

 

$

(40.0

)

 

NM

 

$

20.0

 

 

$

225.8

 

 

$

(205.8

)

 

(91)%

Dividends Paid(2)

 

$

20.2

 

 

$

19.4

 

 

$

0.8

 

 

4%

 

$

81.1

 

 

$

79.7

 

 

$

1.4

 

 

2%

NM = Not Meaningful

(2) Items named in the Financial Results Summary differ from names in BWXT Financial Statement. Operating Cash Flow = Net Cash Provided by Operating Activities; Capital Expenditures = Purchases of Property, Plant and Equipment; Share Repurchases = Repurchases of Common Stock; Dividends Paid = Dividends Paid to Common Shareholders

Revenue

The fourth quarter consolidated revenue increase resulted from higher revenue in Government Operations partially offset by lower revenue in Commercial Operations. The Government Operations increase was driven by higher microreactor volume, uranium processing and the DCL/Cunico acquisition, partially offset by lower long-lead material production. The Commercial Operations decrease resulted from lower commercial nuclear power, primarily fuel volume, partially offset by increased medical sales.

The full year consolidated revenue increase was driven by growth in both operating segments. The Government Operations increase was driven by higher microreactor volume, naval reactors, uranium processing, long-lead material production and the DCL/Cunico acquisition, partially offset by lower missile tube production. The Commercial Operations increase resulted from higher commercial nuclear power, primarily field services, as well as higher medical sales.

Operating Income and Adjusted EBITDA(1)

Fourth quarter consolidated operating income was about flat compared with the prior-year period, as higher operating income in Government Operations and lower unallocated corporate expense was offset by lower operating income in Commercial Operations. The Government Operations increase resulted from higher income in joint venture projects, microreactors and more favorable contract adjustments on missile tubes, partially offset by decreased labor and cost efficiencies that resulted in fewer favorable contract adjustments, lower recoverable CAS pension income, and higher depreciation and acquisition amortization. The Commercial Operations decrease was driven by lower commercial nuclear power, primarily fuel volume. Lower unallocated corporate expense was driven by decreases in healthcare costs and stock-based compensation.

The fourth quarter total adjusted EBITDA(1) increase was driven primarily by the reasons noted above as higher Government Operations adjusted EBITDA(1) and lower unallocated corporate expense was partially offset by lower Commercial Operations adjusted EBITDA(1).

The 2022 consolidated operating income increase was driven by higher operating income in Government Operations and lower unallocated corporate expense, which was offset by lower operating income in Commercial Operations. The Government Operations increase was driven by higher income from joint venture projects, uranium processing, microreactors and long-lead material production, partially offset by decreased labor and cost efficiencies that resulted in fewer favorable contract adjustments, lower recoverable CAS pension income, and higher depreciation and acquisition amortization. The Commercial Operations decrease was driven by a less favorable business mix and the absence of CEWS COVID-19 wage subsidy. Lower unallocated corporate expense was driven by a decrease in healthcare costs and lower compensation related expense inclusive of stock-based compensation.

The 2022 total adjusted EBITDA(1) increase was driven primarily by the reasons noted above as higher Government Operations adjusted EBITDA(1) and lower unallocated corporate expense was partially offset by lower Commercial Operations adjusted EBITDA(1).

EPS

The fourth quarter GAAP EPS decrease was driven primarily by the absence of gains associated with the mark-to-market of the pension that occurred in the fourth quarter 2021, higher interest expense, a higher effective tax rate and lower FAS/CAS pension income, partially offset by better operational performance and a lower share count. The fourth quarter non-GAAP EPS decrease was driven by the items above excluding mark-to-market pension gains and losses and restructuring and other costs and other one-time items.

The 2022 GAAP EPS decrease was driven primarily by the absence of gains associated with the mark-to-market of the pension that occurred in the fourth quarter 2021, higher interest expense, a higher effective tax rate and lower FAS/CAS pension income, partially offset by better operational performance and a lower share count. The 2022 non-GAAP EPS(1) increase was driven by the items above excluding mark-to-market pension gains and losses and restructuring costs and other one-time items.

Cash Flows

The fourth quarter operating cash flow decrease was driven by increases in working capital, primarily accounts payable. Lower fourth quarter capital expenditures resulted from lower spending on the two major growth capital campaigns for U.S. naval nuclear reactors and medical radioisotopes that are nearing completion, partially offset by an increase in capital expenditures for microreactors.

The 2022 operating cash flow decrease was driven by the absence of large payment that occurred in 2021, higher cash taxes for R&D amortization and an increase in working capital. Lower 2022 capital expenditures were driven by less spending on two major growth capital campaigns for U.S. naval nuclear reactors and medical radioisotopes that are nearing completion.

Dividend

BWXT paid $20.2 million, or $0.22 per common share, to shareholders in the fourth-quarter 2022 and paid $81.1 million to shareholders for the full-year 2022. On February 22, 2023, the BWXT Board of Directors declared an increase of $0.01 to the quarterly cash dividend. A $0.23 cash dividend per common share will be payable on March 28, 2023, to shareholders of record on March 10, 2023.

2023 Guidance

BWXT announced its expectations for fiscal year 2023 financial results, providing the following guidance:

(In millions, except per share amounts)

 

Year Ended

 

Year Ending

 

 

December 31, 2022

 

December 31, 2023

 

 

Results

 

Guidance

Revenue

 

$2,233

 

~$2,400

Adjusted EBITDA(1)

 

$439

 

~$475

Adjusted Pre-tax Income(1)

 

$378

 

~$350

Non-GAAP(1) Earnings Per Share

 

$3.13

 

$2.80 - $3.00

Free Cash Flow(1)

 

$46

 

~$200

Additional information can be found in the 2022 fourth quarter earnings call presentation on the BWXT investor relations website at www.bwxt.com/investors. The Company does not provide GAAP guidance because it is unable to reliably forecast most of the items that are excluded from GAAP to calculate non-GAAP results. These items could cause GAAP results to differ materially from non-GAAP results.

Conference Call to Discuss Fourth-Quarter and Full-Year 2022 Results

Date:

Thursday, February 23, 2023, at 5:00 p.m. EST

Live Webcast:

Investor Relations section of website at www.bwxt.com

Full Earnings Release Available on BWXT Website

A full version of this earnings release is available on our Investor Relations website at http://investors.bwxt.com/4Q2022-release

BWXT may use its website (www.bwxt.com) as a channel of distribution of material Company information. Financial and other important information regarding BWXT is routinely accessible through and posted on our website. In addition, you may elect to automatically receive e-mail alerts and other information about BWXT by enrolling through the “Email Alerts” section of our website at http://investors.bwxt.com.

Non-GAAP Measures

BWXT uses and makes reference to adjusted EBITDA, free cash flow and free cash flow conversion, which are not recognized measures under GAAP. BWXT is providing these non-GAAP measures to supplement the results provided in accordance with GAAP and it should not be considered superior to, or as a substitute for, the comparable GAAP measures. BWXT believes the non-GAAP measures provide meaningful insight and transparency into the Company’s operational performance and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding BWXT's ongoing operations. Definitions for the non-GAAP measures are provided below and reconciliations are detailed in Exhibit 1, except that reconciliations of forward-looking GAAP measures are not provided because the company is unable to reliably forecast most of the items that are excluded from GAAP to calculate non-GAAP results. Other companies may define these measures differently or may utilize different non-GAAP measures, thus impacting comparability.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is calculated using non-GAAP net income, plus provision for income taxes, less other – net, less interest income, plus interest expense, plus depreciation and amortization.

Adjusted pre-tax income is non-GAAP income before provision for income taxes.

Free Cash Flow (FCF) is calculated using net income to derive net cash provided by (used in) operating activities less purchases of property, plant and equipment.

Free Cash Flow conversion is free cash flow divided by net income.

Forward-Looking Statements

BWXT cautions that this release contains forward-looking statements, including, without limitation, statements relating to backlog, to the extent they may be viewed as an indicator of future revenues; our plans and expectations for each of our reportable segments, including the expectations, timing and revenue of our strategic initiatives, such as medical radioisotopes, small modular reactor components and recent acquisitions; disruptions to our supply chain and/or operations, changes in government regulations and other factors, including any such impacts of, or actions in response to the COVID-19 health crisis; and our expectations and guidance for 2023 and beyond. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, our ability to execute contracts in backlog; the lack of, or adverse changes in, federal appropriations to government programs in which we participate; the demand for and competitiveness of nuclear products and services; capital priorities of power generating utilities and other customers; the timing of technology development; the potential recurrence of subsequent waves or strains of COVID-19 or similar diseases; adverse changes in the industries in which we operate; and delays, changes or termination of contracts in backlog. If one or more of these risks or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see BWXT’s filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2022. BWXT cautions not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

About BWXT

At BWX Technologies, Inc. (NYSE: BWXT), we are People Strong, Innovation Driven. Headquartered in Lynchburg, Va. BWXT is a Fortune 1000 and Defense News Top 100 manufacturing and engineering innovator that provides safe and effective nuclear solutions for global security, clean energy, environmental remediation, nuclear medicine and space exploration. With approximately 7,000 employees, BWXT has 14 major operating sites in the U.S., Canada and the U.K. In addition, BWXT joint ventures provide management and operations at a dozen U.S. Department of Energy and NASA facilities. Follow us on Twitter at @BWXT and learn more at www.bwxt.com

(1) A reconciliation of non GAAP results are detailed in Exhibit 1. Additional information can be found in the materials on the BWXT investor relations website at www.bwxt.com/investors.

EXHIBIT 1

BWX TECHNOLOGIES, INC.

RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3)

(In millions, except per share amounts)

 

Three Months Ended December 31, 2022

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
Costs

 

Acquisition
-related Costs

 

Loss on Asset
Disposal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

101.9

 

 

$

 

 

$

2.6

 

 

$

0.3

 

 

$

6.2

 

 

 

$

111.1

 

Other Income (Expense)

 

(45.1

)

 

 

46.6

 

 

 

0.0

 

 

 

 

 

 

 

 

 

 

1.6

 

Income before Provision for Income Taxes

 

56.8

 

 

 

46.6

 

 

 

2.7

 

 

 

0.3

 

 

 

6.2

 

 

 

 

112.6

 

Provision for Income Taxes

 

(13.8

)

 

 

(10.9

)

 

 

(0.6

)

 

 

(0.0

)

 

 

(1.6

)

 

 

 

(26.9

)

Net Income

 

43.0

 

 

 

35.7

 

 

 

2.1

 

 

 

0.3

 

 

 

4.7

 

 

 

 

85.7

 

Net Income Attributable to Noncontrolling Interest

 

(0.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.1

)

Net Income Attributable to BWXT

$

43.0

 

 

$

35.7

 

 

$

2.1

 

 

$

0.3

 

 

$

4.7

 

 

 

$

85.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

91.8

 

 

 

 

 

 

 

 

 

 

 

 

91.8

 

Diluted Earnings per Common Share

$

0.47

 

 

$

0.39

 

 

$

0.02

 

 

$

0.00

 

 

$

0.05

 

 

 

$

0.93

 

Effective Tax Rate

 

24.3

%

 

 

 

 

 

 

 

 

 

 

 

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Operations Operating Income

$

102.8

 

 

$

 

 

$

 

 

$

0.3

 

 

$

 

 

 

$

103.1

 

Commercial Operations Operating Income

$

3.7

 

 

$

 

 

$

(0.7

)

 

$

 

 

$

6.2

 

 

 

$

9.3

 

Unallocated Corporate Operating Income

$

(4.6

)

 

$

 

 

$

3.3

 

 

$

0.0

 

 

$

 

 

 

$

(1.3

)

 

Three Months Ended December 31, 2021

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
and Other Costs

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

102.2

 

 

$

 

 

$

2.4

 

 

 

 

 

 

 

$

104.6

 

Other Income (Expense)

 

44.9

 

 

 

(39.6

)

 

 

 

 

 

 

 

 

 

 

5.3

 

Income before Provision for Income Taxes

 

147.1

 

 

 

(39.6

)

 

 

2.4

 

 

 

 

 

 

 

 

109.9

 

Provision for Income Taxes

 

(30.2

)

 

 

9.1

 

 

 

(0.6

)

 

 

 

 

 

 

 

(21.7

)

Net Income

 

116.9

 

 

 

(30.5

)

 

 

1.8

 

 

 

 

 

 

 

 

88.2

 

Net Income Attributable to Noncontrolling Interest

 

(0.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.0

)

Net Income Attributable to BWXT

$

116.9

 

 

$

(30.5

)

 

$

1.8

 

 

 

 

 

 

 

$

88.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

92.5

 

 

 

 

 

 

 

 

 

 

 

 

92.5

 

Diluted Earnings per Common Share

$

1.26

 

 

$

(0.33

)

 

$

0.02

 

 

 

 

 

 

 

$

0.95

 

Effective Tax Rate

 

20.5

%

 

 

 

 

 

 

 

 

 

 

 

19.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Operations Operating Income

$

90.9

 

 

$

 

 

$

 

 

 

 

 

 

 

$

90.9

 

Commercial Operations Operating Income

$

18.4

 

 

$

 

 

$

0.6

 

 

 

 

 

 

 

$

19.0

 

Unallocated Corporate Operating Income

$

(7.1

)

 

$

 

 

$

1.8

 

 

 

 

 

 

 

$

(5.3

)

EXHIBIT 1 (continued)

BWX TECHNOLOGIES, INC.

RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3)

(In millions, except per share amounts)

 

Year Ended December 31, 2022

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
Costs

 

Acquisition-
related Costs

 

Loss on Asset
Disposal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

348.6

 

 

$

 

 

$

8.2

 

 

$

2.6

 

 

$

6.2

 

 

 

$

365.6

 

Other Income (Expense)

 

(34.2

)

 

 

46.6

 

 

 

0.0

 

 

 

 

 

 

 

 

 

 

12.4

 

Income before Provision for Income Taxes

 

314.4

 

 

 

46.6

 

 

 

8.2

 

 

 

2.6

 

 

 

6.2

 

 

 

 

378.0

 

Provision for Income Taxes

 

(75.8

)

 

 

(10.9

)

 

 

(1.9

)

 

 

(0.4

)

 

 

(1.6

)

 

 

 

(90.5

)

Net Income

 

238.6

 

 

 

35.7

 

 

 

6.3

 

 

 

2.2

 

 

 

4.7

 

 

 

 

287.5

 

Net Income Attributable to Noncontrolling Interest

 

(0.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.4

)

Net Income Attributable to BWXT

$

238.2

 

 

$

35.7

 

 

$

6.3

 

 

$

2.2

 

 

$

4.7

 

 

 

$

287.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

91.7

 

 

 

 

 

 

 

 

 

 

 

 

91.7

 

Diluted Earnings per Common Share

$

2.60

 

 

$

0.39

 

 

$

0.07

 

 

$

0.02

 

 

$

0.05

 

 

 

$

3.13

 

Effective Tax Rate

 

24.1

%

 

 

 

 

 

 

 

 

 

 

 

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Operations Operating Income

$

336.5

 

 

$

 

 

$

1.2

 

 

$

0.8

 

 

$

 

 

 

$

338.6

 

Commercial Operations Operating Income

$

27.4

 

 

$

 

 

$

1.5

 

 

$

 

 

$

6.2

 

 

 

$

35.1

 

Unallocated Corporate Operating Income

$

(15.3

)

 

$

 

 

$

5.4

 

 

$

1.8

 

 

$

 

 

 

$

(8.1

)

 

Year Ended December 31, 2021

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
and Other Costs

 

Costs
Associated With
Early Bond
Redemption

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

$

345.8

 

 

$

 

 

$

3.1

 

 

$

 

 

 

 

 

$

349.0

 

Other Income (Expense)

 

49.9

 

 

 

(39.6

)

 

 

 

 

 

15.0

 

 

 

 

 

 

25.3

 

Income before Provision for Income Taxes

 

395.7

 

 

 

(39.6

)

 

 

3.1

 

 

 

15.0

 

 

 

 

 

 

374.3

 

Provision for Income Taxes

 

(89.4

)

 

 

9.1

 

 

 

(0.8

)

 

 

(3.5

)

 

 

 

 

 

(84.6

)

Net Income

 

306.3

 

 

 

(30.5

)

 

 

2.4

 

 

 

11.5

 

 

 

 

 

 

289.6

 

Net Income Attributable to Noncontrolling Interest

 

(0.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.4

)

Net Income Attributable to BWXT

$

305.9

 

 

$

(30.5

)

 

$

2.4

 

 

$

11.5

 

 

 

 

 

$

289.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Shares Outstanding

 

94.5

 

 

 

 

 

 

 

 

 

 

 

 

94.5

 

Diluted Earnings per Common Share

$

3.24

 

 

$

(0.32

)

 

$

0.03

 

 

$

0.12

 

 

 

 

 

$

3.06

 

Effective Tax Rate

 

22.6

%

 

 

 

 

 

 

 

 

 

 

 

22.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Operations Operating Income

$

329.5

 

 

$

 

 

$

0.2

 

 

$

 

 

 

 

 

$

329.7

 

Commercial Operations Operating Income

$

35.2

 

 

$

 

 

$

0.9

 

 

$

 

 

 

 

 

$

36.2

 

Unallocated Corporate Operating Income

$

(18.9

)

 

$

 

 

$

2.1

 

 

$

 

 

 

 

 

$

(16.9

)

EXHIBIT 1 (continued)

RECONCILIATION OF CONSOLIDATED ADJUSTED EBITDA(1)(2)(3)

(In millions)

 

Three Months Ended December 31, 2022

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
Costs

 

Acquisition-
related Costs

 

Loss on Asset
Disposal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

43.0

 

 

$

35.7

 

 

$

2.1

 

 

$

0.3

 

$

4.7

 

 

$

85.7

 

Provision for Income Taxes

 

13.8

 

 

 

10.9

 

 

 

0.6

 

 

 

0.0

 

 

1.6

 

 

 

26.9

 

Other – net

 

33.9

 

 

 

(46.6

)

 

 

 

 

 

 

 

 

 

 

(12.6

)

Interest Expense

 

11.4

 

 

 

 

 

 

(0.0

)

 

 

 

 

 

 

 

11.4

 

Interest Income

 

(0.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.3

)

Depreciation & Amortization

 

19.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19.0

 

Adjusted EBITDA

$

120.9

 

 

$

 

 

$

2.6

 

 

$

0.3

 

$

6.2

 

 

$

130.1

 

Three Months Ended December 31, 2021

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
and Other Costs

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

116.9

 

 

$

(30.5

)

 

$

1.8

 

 

 

 

 

$

88.2

 

Provision for Income Taxes

 

30.2

 

 

 

(9.1

)

 

 

0.6

 

 

 

 

 

 

21.7

 

Other – net

 

(51.9

)

 

 

39.6

 

 

 

 

 

 

 

 

 

(12.3

)

Interest Expense

 

7.0

 

 

 

 

 

 

 

 

 

 

 

 

7.0

 

Interest Income

 

(0.0

)

 

 

 

 

 

 

 

 

 

 

 

(0.0

)

Depreciation & Amortization

 

18.6

 

 

 

 

 

 

 

 

 

 

 

 

18.6

 

Adjusted EBITDA

$

120.8

 

 

$

 

 

$

2.4

 

 

 

 

 

$

123.2

 

Year Ended December 31, 2022

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
Costs

 

Acquisition-

related Costs

 

Loss on Asset
Disposal

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

238.6

 

 

$

35.7

 

 

$

6.3

 

 

$

2.2

 

$

4.7

 

 

$

287.5

 

Provision for Income Taxes

 

75.8

 

 

 

10.9

 

 

 

1.9

 

 

 

0.4

 

 

1.6

 

 

 

90.5

 

Other – net

 

(1.5

)

 

 

(46.6

)

 

 

 

 

 

 

 

 

 

 

(48.0

)

Interest Expense

 

36.4

 

 

 

 

 

 

(0.0

)

 

 

 

 

 

 

 

36.4

 

Interest Income

 

(0.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.8

)

Depreciation & Amortization

 

73.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

73.8

 

Adjusted EBITDA

$

422.4

 

 

$

 

 

$

8.2

 

 

$

2.6

 

$

6.2

 

 

$

439.4

 

Year Ended December 31, 2021

 

 

GAAP

 

Pension &
OPEB MTM
(Gain) / Loss

 

Restructuring
and Other Costs

 

Costs
Associated With
Early Bond
Redemption

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

$

306.3

 

 

$

(30.5

)

 

$

2.4

 

$

11.5

 

 

 

 

 

$

289.6

 

Provision for Income Taxes

 

89.4

 

 

 

(9.1

)

 

 

0.8

 

 

3.5

 

 

 

 

 

 

84.6

 

Other – net

 

(85.2

)

 

 

39.6

 

 

 

 

 

(10.8

)

 

 

 

 

 

(56.4

)

Interest Expense

 

35.8

 

 

 

 

 

 

 

 

(4.2

)

 

 

 

 

 

31.5

 

Interest Income

 

(0.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.4

)

Depreciation & Amortization

 

69.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

69.1

 

Adjusted EBITDA

$

414.9

 

 

$

 

 

$

3.1

 

$

 

 

 

 

 

$

418.1

 

EXHIBIT 1 (continued)

RECONCILIATION OF REPORTING SEGMENT ADJUSTED EBITDA(1)(2)(3)

(In millions)

 

Three Months Ended December 31, 2022

 

 

Operating Income
(GAAP)

 

Non-GAAP
Adjustments(4)

 

Depreciation &
Amortization

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Government Operations

$

102.8

 

$

0.3

 

$

12.7

 

$

115.8

Commercial Operations

$

3.7

 

$

5.6

 

$

4.3

 

$

13.6

 

Three Months Ended December 31, 2021

 

 

Operating Income
(GAAP)

 

Non-GAAP
Adjustments(4)

 

Depreciation &
Amortization

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Government Operations

$

90.9

 

$

 

$

12.1

 

$

102.9

Commercial Operations

$

18.4

 

$

0.6

 

$

4.9

 

$

23.9

 

Year Ended December 31, 2022

 

 

Operating Income
(GAAP)

 

Non-GAAP
Adjustments(4)

 

Depreciation &
Amortization

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Government Operations

$

336.5

 

$

2.1

 

$

48.0

 

$

386.5

Commercial Operations

$

27.4

 

$

7.7

 

$

18.8

 

$

53.9

 

Year Ended December 31, 2021

 

 

Operating Income
(GAAP)

 

Non-GAAP
Adjustments(4)

 

Depreciation &
Amortization

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Government Operations

$

329.5

 

$

0.2

 

$

42.5

 

$

372.2

Commercial Operations

$

35.2

 

$

0.9

 

$

19.9

 

$

56.0


Contacts

Investor Contact:
Mark Kratz
Vice President, Investor Relations
980-365-4300
This email address is being protected from spambots. You need JavaScript enabled to view it.

Media Contact:
Jud Simmons
Director, Media and Public Relations
434-522-6462
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Read full story here

VANCOUVER, British Columbia & CHILLIWACK, British Columbia--(BUSINESS WIRE)--$LPEN--Loop EnergyTM (TSX: LPEN), a designer and manufacturer of hydrogen fuel cell solutions, has delivered the first three fuel cell systems to H2 Portable, a Canadian developer of hydrogen-electric mobile power solutions. The fuel cells will be integrated into hydrogen-electric gensets designed to provide clean, reliable, on-demand power to movie sets, construction sites and other locations with limited grid power access.


Located in Chilliwack, BC, H2 Portable is focused on developing market opportunities for its next-generation hydrogen-electric gensets. H2 Portable has a strategic product development and manufacturing partnership with TYCROP Manufacturing, one of BC’s leading industrial manufacturing companies.

Following the delivery of the T505 (50 kW) fuel cell systems, the gensets are expected to begin field testing in 2023. H2 Portable and TYCROP will aim to scale production starting in 2024 to satisfy the growing demand for hydrogen-electric power systems across industries in Canada and the United States.

H2 Portable selected Loop Energy as its technology provider following a tender process, which highlighted the enhanced fuel efficiency of its fuel cells. By lowering fuel consumption, H2 Portable can reduce its customers’ operating costs. Loop Energy’s Global Technical Services team is working alongside H2 Portable and TYCROP to optimize and commercially scale its technology.

“H2 Portable is developing solutions for a market that is primed to use hydrogen as a solution to decarbonize a broad range of industries,” said Loop Energy President & CEO, Ben Nyland. “We’re excited to see these generators produce zero-emission power across a diverse range of industries.”

Dag Hinrichs, President of H2 Portable added “Customers want a clean power solution that is reliable, safe and scalable. Partnering with Loop Energy and TYCROP provides the technology and manufacturing required to deliver a strong business case for our customers.”

The market for zero-emission gensets and power systems continues to grow globally due to hydrogen’s ability to provide reliable power to supplement the existing electrical infrastructure and deliver clean power to industries operating outside of the grid.

About H2 Portable Power Corp.

H2 Portable Power Corp is a Chilliwack-based provider of portable hydrogen-electric generators. Using its experience developing hydrogen technology, H2 Portable’s mission is to deliver Clean Power Anywhere.

About TYCROP Manufacturing

TYCROP Manufacturing has been Bringing IDEAS to Life for over 4 decades. TYCROP specializes in innovating, designing, engineering, actualizing and supporting the deployment of industrial equipment solutions for specialized markets around the world. Learn more at http://www.tycrop.com.

About Loop Energy Inc.

Loop Energy is a leading designer and manufacturer of fuel cell systems targeted for the electrification of commercial vehicles, including light commercial vehicles, transit buses and medium and heavy-duty trucks. Loop Energy’s products feature the company’s proprietary eFlow™ technology in the fuel cell stack’s bipolar plates. eFlow is designed to enable commercial customers to achieve performance maximization and cost minimization. Loop Energy works with OEMs and major vehicle sub-system suppliers to enable the production of hydrogen fuel cell electric vehicles. For more information about how Loop Energy is driving towards a zero-emissions future, visit www.loopenergy.com.

Forward Looking Warning

This press release contains forward-looking information within the meaning of applicable securities legislation, which reflect management’s current expectations and projections regarding future events. Particularly, statements regarding the Company’s expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information, including without limitation, purchase orders, cost reduction, profitability and revenue targets; our future growth prospects and business outlook including without limitation the expected demand for our products, the allocation of resources and funds, the expected timeline for profitability, the planned growth of our customer base and the expected growth of our operations globally. Forward-looking information is based on a number of assumptions (including without limitation assumptions with respect the current and future performance of the Company’s products, growth in demand for the Company’s products, the Company’s ability to execute on its strategy, achieve its targets and progress existing and future customers through the Customer Adoption Cycle in a timely way, and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control and could cause actual results and events to vary materially from those that are disclosed, or implied, by such forward‐looking information. Such risks and uncertainties include, but are not limited to, the realization of electrification of transportation and hydrogen adoption rates, the elimination of diesel fuel and ongoing government support of such developments, the expected growth in demand for fuel cells for the commercial transportation market, our ability to obtain future patent grants for our proprietary technology and the effectiveness of current and future patents in protecting our technology and the factors discussed under “Risk Factors” in the Company’s Annual Information Form dated March 23, 2022. Loop disclaims any obligation to update these forward-looking statements.


Contacts

Investor Inquiries:
Natalie Arseneau | Tel: +1 604.222.3400 Ext. 418 | This email address is being protected from spambots. You need JavaScript enabled to view it.

Sales Inquiries:
Thomas Rost | Tel: +1 317.260.0502 | This email address is being protected from spambots. You need JavaScript enabled to view it.

Media Inquiries:
Lucas Schmidt | Tel: +1.778.791.8756 | This email address is being protected from spambots. You need JavaScript enabled to view it.

H2 Portable Inquiries:
Dag Hinrichs | Tel: +1 503.686.3341 | This email address is being protected from spambots. You need JavaScript enabled to view it.

TYCROP Manufacturing Inquiries:
Scott Mason | Tel: +1.604.794.7078 | This email address is being protected from spambots. You need JavaScript enabled to view it.

EWING, N.J.--(BUSINESS WIRE)--$OLED #OLED--Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today reported financial results for the fourth quarter and full year ended December 31, 2022.


“We ended 2022 strongly with record revenues and earnings,” said Brian Millard, Vice President and Chief Financial Officer of Universal Display Corporation. “As we look to 2023, while macro uncertainties persist, we are continuing to build upon our leadership position in the OLED ecosystem. This includes continued discovery and development of next-generation phosphorescent materials, progress on the development of our commercial phosphorescent blue and groundbreaking OVJP (organic vapor jet printing) manufacturing platform, as well as investing in our infrastructure and capabilities. We believe that these initiatives and the industry’s advancing roadmap for medium- and large-area OLED displays are setting the stage for 2024 to be a pivotal year for the commencement of a new OLED adoption cycle and investment wave.”

Financial Highlights for the Fourth Quarter of 2022

  • Total revenue in the fourth quarter of 2022 was $169.0 million as compared to $146.2 million in the fourth quarter of 2021. We continue to expect the near-term weakness in the overall global market economy to have an impact on forecasted demand for OLED products utilizing our emitter material over the remaining life of certain customers’ contracts compared to prior estimates, resulting in us recording a positive cumulative catch-up adjustment to total revenue during the fourth quarter of 2022 of $13.0 million arising from changes in estimates of transaction price.
  • Revenue from material sales was $88.3 million in the fourth quarter of 2022 as compared to $85.8 million in the fourth quarter of 2021. This increase was primarily the result of higher unit volume.
  • Revenue from royalty and license fees was $75.6 million in the fourth quarter of 2022 as compared to $56.0 million in the fourth quarter of 2021. The increase was primarily due to the cumulative catch-up adjustment as well as higher unit material volume.
  • Cost of material sales was $26.6 million in the fourth quarter of 2022 as compared to $29.2 million in the fourth quarter of 2021. Fourth quarter cost of material sales decreased due to favorable product mix, partially offset by underutilization costs associated with our manufacturing facility in Shannon, Ireland, which commenced manufacturing in mid-2022.
  • Total gross margin was 82% in the fourth quarter of 2022 as compared to 78% in the fourth quarter of 2021.
  • Operating income was $83.1 million in the fourth quarter of 2022 as compared to $56.5 million in the fourth quarter of 2021.
  • Net income was $65.1 million or $1.36 per diluted share in the fourth quarter of 2022 as compared to $45.9 million or $0.96 per diluted share in the fourth quarter of 2021.

Revenue Comparison

($ in thousands)

 

Three Months Ended December 31,

 

 

 

2022

 

 

2021

 

Material sales

 

$

88,339

 

 

$

85,768

 

Royalty and license fees

 

 

75,585

 

 

 

55,995

 

Contract research services

 

 

5,108

 

 

 

4,484

 

Total revenue

 

$

169,032

 

 

$

146,247

 

Cost of Materials Comparison

($ in thousands)

 

Three Months Ended December 31,

 

 

 

2022

 

 

2021

 

Material sales

 

$

88,339

 

 

$

85,768

 

Cost of material sales

 

 

26,603

 

 

 

29,199

 

Gross margin on material sales

 

 

61,736

 

 

 

56,569

 

Gross margin as a % of material sales

 

 

70

%

 

 

66

%

Financial Highlights for the Full Year 2022

  • Total revenue for the full year 2022 was $616.6 million as compared to $553.5 million for the full year 2021. We continue to expect the near-term weakness in the overall global market economy to have an impact on forecasted demand for OLED products utilizing our emitter material over the remaining life of certain customers’ contracts compared to prior estimates, resulting in us recording a positive cumulative catch-up adjustment to total revenue during the full year 2022 of $30.3 million arising from changes in estimates of transaction price.
  • Revenue from material sales was $331.1 million for the full year 2022 as compared to $318.6 million for the full year 2021. This increase was primarily the result of higher unit volume.
  • Revenue from royalty and license fees was $267.1 million for the full year 2022 as compared to $219.0 million for the full year 2021. The increase was primarily due to the cumulative catch-up adjustment as well as higher unit material volume.
  • Cost of material sales was $115.6 million for the full year 2022 as compared to $104.4 million for the full year 2021. The increase was due to higher unit material volumes as well as underutilization costs associated with our Shannon facility in the full year 2022 of $7.9 million.
  • Total gross margin was 79% for both the full years 2022 and 2021.
  • Operating income was $267.1 million for the full year 2022 as compared to $227.6 million for the full year 2021.
  • Net income was $210.1 million or $4.40 per diluted share for the full year 2022 as compared to $184.2 million or $3.87 per diluted share for the full year 2021.

Revenue Comparison

($ in thousands)

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Material sales

 

$

331,081

 

 

$

318,623

 

Royalty and license fees

 

 

267,115

 

 

 

219,032

 

Contract research services

 

 

18,423

 

 

 

15,870

 

Total revenue

 

$

616,619

 

 

$

553,525

 

Cost of Materials Comparison

($ in thousands)

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

Material sales

 

$

331,081

 

 

$

318,623

 

Cost of material sales

 

 

115,602

 

 

 

104,397

 

Gross margin on material sales

 

 

215,479

 

 

 

214,226

 

Gross margin as a % of material sales

 

 

65

%

 

 

67

%

2023 Guidance
The Company believes that its 2023 revenue will be the range of $550 million to $600 million. The OLED industry remains at a stage where many variables can have a material impact on results, and the Company thus caveats its financial guidance accordingly.

Dividend
The Company also announced a first quarter cash dividend of $0.35 per share on the Company’s common stock. The dividend is payable on March 31, 2023 to all shareholders of record on March 17, 2023.

Conference Call Information
In conjunction with this release, Universal Display will host a conference call on Thursday, February 23, 2023 at 5:00 p.m. Eastern Time. The live webcast of the conference call can be accessed under the events page of the Company's Investor Relations website at ir.oled.com. Those wishing to participate in the live call should dial 1-877-524-8416 (toll-free) or 1-412-902-1028. Please dial in 5-10 minutes prior to the scheduled conference call time. An online archive of the webcast will be available within two hours of the conclusion of the call.

About Universal Display Corporation
Universal Display Corporation (Nasdaq: OLED) is a leader in the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. Founded in 1994 and with subsidiaries and offices around the world, the Company currently owns, exclusively licenses or has the sole right to sublicense more than 5,500 patents issued and pending worldwide. Universal Display licenses its proprietary technologies, including its breakthrough high-efficiency UniversalPHOLED® phosphorescent OLED technology that can enable the development of energy-efficient and eco-friendly displays and solid-state lighting. The Company also develops and offers high-quality, state-of-the-art UniversalPHOLED materials that are recognized as key ingredients in the fabrication of OLEDs with peak performance. In addition, Universal Display delivers innovative and customized solutions to its clients and partners through technology transfer, collaborative technology development and on-site training. To learn more about Universal Display Corporation, please visit https://oled.com/.

Universal Display Corporation and the Universal Display Corporation logo are trademarks or registered trademarks of Universal Display Corporation. All other company, brand or product names may be trademarks or registered trademarks.

All statements in this document that are not historical, such as those relating to the projected adoption, development and advancement of the Company’s technologies, and the Company’s expected results and future declaration of dividends, as well as the growth of the OLED market and the Company’s opportunities in that market, are forward-looking financial statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this document, as they reflect Universal Display Corporation’s current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties are discussed in greater detail in Universal Display Corporation’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, in particular, the section entitled “Risk Factors” in Universal Display Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.

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UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

 

 

December 31, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

93,430

 

 

$

311,993

 

Short-term investments

 

 

484,345

 

 

 

351,194

 

Accounts receivable

 

 

92,664

 

 

 

107,639

 

Inventory

 

 

183,220

 

 

 

134,160

 

Other current assets

 

 

45,791

 

 

 

20,948

 

Total current assets

 

 

899,450

 

 

 

925,934

 

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $117,118 and $92,461

 

 

143,445

 

 

 

128,832

 

ACQUIRED TECHNOLOGY, net of accumulated amortization of $189,671 and $173,635

 

 

38,382

 

 

 

49,668

 

OTHER INTANGIBLE ASSETS, net of accumulated amortization of $8,989 and $7,565

 

 

8,247

 

 

 

9,711

 

GOODWILL

 

 

15,535

 

 

 

15,535

 

INVESTMENTS

 

 

259,861

 

 

 

168,076

 

DEFERRED INCOME TAXES

 

 

58,161

 

 

 

33,453

 

OTHER ASSETS

 

 

109,739

 

 

 

135,710

 

TOTAL ASSETS

 

$

1,532,820

 

 

$

1,466,919

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

9,519

 

 

$

14,955

 

Accrued expenses

 

 

51,002

 

 

 

45,474

 

Deferred revenue

 

 

45,599

 

 

 

120,864

 

Other current liabilities

 

 

29,577

 

 

 

6,645

 

Total current liabilities

 

 

135,697

 

 

 

187,938

 

DEFERRED REVENUE

 

 

18,279

 

 

 

36,217

 

RETIREMENT PLAN BENEFIT LIABILITY

 

 

59,790

 

 

 

66,773

 

OTHER LIABILITIES

 

 

43,685

 

 

 

76,077

 

Total liabilities

 

 

257,451

 

 

 

367,005

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

Preferred Stock, par value $0.01 per share, 5,000,000 shares authorized, 200,000 shares of Series A Nonconvertible Preferred Stock issued and outstanding (liquidation value of $7.50 per share or $1,500)

 

 

2

 

 

 

2

 

Common Stock, par value $0.01 per share, 200,000,000 shares authorized, 49,136,030 and 49,065,924 shares issued, and 47,770,382 and 47,700,276 shares outstanding at December 31, 2022 and December 31, 2021, respectively

 

 

491

 

 

 

491

 

Additional paid-in capital

 

 

681,335

 

 

 

658,728

 

Retained earnings

 

 

653,277

 

 

 

500,212

 

Accumulated other comprehensive loss

 

 

(18,452

)

 

 

(18,235

)

Treasury stock, at cost (1,365,648 shares at December 31, 2022 and December 31, 2021)

 

 

(41,284

)

 

 

(41,284

)

Total shareholders’ equity

 

 

1,275,369

 

 

 

1,099,914

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

1,532,820

 

 

$

1,466,919

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share data)

 

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUE:

 

(Unaudited)

 

 

 

 

 

 

 

Material sales

 

$

88,339

 

 

$

85,768

 

 

$

331,081

 

 

$

318,623

 

Royalty and license fees

 

 

75,585

 

 

 

55,995

 

 

 

267,115

 

 

 

219,032

 

Contract research services

 

 

5,108

 

 

 

4,484

 

 

 

18,423

 

 

 

15,870

 

Total revenue

 

 

169,032

 

 

 

146,247

 

 

 

616,619

 

 

 

553,525

 

COST OF SALES

 

 

30,098

 

 

 

32,243

 

 

 

127,896

 

 

 

114,991

 

Gross margin

 

 

138,934

 

 

 

114,004

 

 

 

488,723

 

 

 

438,534

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

31,906

 

 

 

26,940

 

 

 

117,062

 

 

 

99,673

 

Selling, general and administrative

 

 

18,513

 

 

 

22,769

 

 

 

77,886

 

 

 

80,372

 

Amortization of acquired technology and other intangible assets

 

 

2,897

 

 

 

5,504

 

 

 

17,459

 

 

 

21,994

 

Patent costs

 

 

2,254

 

 

 

2,157

 

 

 

8,329

 

 

 

8,160

 

Royalty and license expense

 

 

281

 

 

 

172

 

 

 

877

 

 

 

691

 

Total operating expenses

 

 

55,851

 

 

 

57,542

 

 

 

221,613

 

 

 

210,890

 

OPERATING INCOME

 

 

83,083

 

 

 

56,462

 

 

 

267,110

 

 

 

227,644

 

Interest income, net

 

 

3,505

 

 

 

160

 

 

 

7,811

 

 

 

505

 

Other (loss) income, net

 

 

(5,942

)

 

 

(80

)

 

 

(6,691

)

 

 

98

 

Interest and other income, net

 

 

(2,437

)

 

 

80

 

 

 

1,120

 

 

 

603

 

INCOME BEFORE INCOME TAXES

 

 

80,646

 

 

 

56,542

 

 

 

268,230

 

 

 

228,247

 

INCOME TAX EXPENSE

 

 

(15,512

)

 

 

(10,666

)

 

 

(58,169

)

 

 

(44,034

)

NET INCOME

 

$

65,134

 

 

$

45,876

 

 

$

210,061

 

 

$

184,213

 

NET INCOME PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

$

1.37

 

 

$

0.96

 

 

$

4.41

 

 

$

3.87

 

DILUTED

 

$

1.36

 

 

$

0.96

 

 

$

4.40

 

 

$

3.87

 

WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 

47,402,007

 

 

 

47,324,718

 

 

 

47,390,352

 

 

 

47,296,447

 

DILUTED

 

 

47,492,560

 

 

 

47,387,469

 

 

 

47,468,507

 

 

 

47,365,435

 

CASH DIVIDEND DECLARED PER COMMON SHARE

 

$

0.30

 

 

$

0.20

 

 

$

1.20

 

 

$

0.80

 

UNIVERSAL DISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income

 

$

210,061

 

 

 

184,213

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

24,815

 

 

 

19,968

 

Amortization of intangibles

 

 

17,459

 

 

 

21,994

 

Amortization of premium and discount on investments, net

 

 

(6,461

)

 

 

(373

)

Impairment of minority investments

 

 

6,962

 

 

 

 

Stock-based compensation to employees

 

 

28,380

 

 

 

34,871

 

Stock-based compensation to Board of Directors and Scientific Advisory Board

 

 

1,566

 

 

 

1,404

 

Deferred income tax (benefit) expense

 

 

(26,946

)

 

 

1,748

 

Retirement plan expense

 

 

5,276

 

 

 

8,875

 

Decrease (increase) in assets:

 

 

 

 

 

 

Accounts receivable

 

 

14,975

 

 

 

(25,378

)

Inventory

 

 

(49,060

)

 

 

(42,569

)

Other current assets

 

 

(24,843

)

 

 

(202

)

Other assets

 

 

25,971

 

 

 

(32,369

)

Increase (decrease) in liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

3,338

 

 

 

1,902

 

Other current liabilities

 

 

20,917

 

 

 

2,105

 

Deferred revenue

 

 

(93,203

)

 

 

(5,220

)

Other liabilities

 

 

(32,392

)

 

 

20,136

 

Net cash provided by operating activities

 

 

126,815

 

 

 

191,105

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(42,497

)

 

 

(43,161

)

Purchase of intangibles

 

 

(4,709

)

 

 

(394

)

Purchases of investments

 

 

(701,993

)

 

 

(642,180

)

Proceeds from sale and maturity of investments

 

 

468,456

 

 

 

227,984

 

Net cash used in investing activities

 

 

(280,743

)

 

 

(457,751

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

1,570

 

 

 

1,507

 

Payment of withholding taxes related to stock-based compensation to employees

 

 

(9,209

)

 

 

(14,949

)

Cash dividends paid

 

 

(56,996

)

 

 

(37,931

)

Net cash used in financing activities

 

 

(64,635

)

 

 

(51,373

)

DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(218,563

)

 

 

(318,019

)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

 

 

311,993

 

 

 

630,012

 

CASH AND CASH EQUIVALENTS, END OF YEAR

 

$

93,430

 

 

$

311,993

 

The following non-cash activities occurred:

 

 

 

 

 

 

Unrealized loss on available-for-sale securities

 

$

(8,100

)

 

$

(295

)

Common stock issued to Board of Directors and Scientific Advisory Board that was earned and accrued for in a previous period

 

 

300

 

 

 

300

 

Net change in accounts payable and accrued expenses related to purchases of property and equipment

 

 

3,069

 

 

 

(3,526

)

Cash paid for income tax

 

 

72,347

 

 

 

52,650

 

 


Contacts

Universal Display Contact:
Darice Liu
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+1 609-964-5123

All financial figures are in Canadian dollars unless otherwise noted. This news release refers to certain financial measures and ratios that are not specified, defined or determined in accordance with Generally Accepted Accounting Principles ("GAAP"), including net revenue; adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"); adjusted cash flow from operating activities; and adjusted cash flow from operating activities per common share. For more information see "Non-GAAP and Other Financial Measures" herein.



CALGARY, Alberta--(BUSINESS WIRE)--Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA) announced today its financial and operating results for the fourth quarter and full year 2022.

Highlights

  • Record Results - reported record 2022 full year earnings of $2,971 million and record full year adjusted EBITDA of $3,746 million, exceeding the high end of the Company's revised guidance range. Reported fourth quarter earnings of $243 million and fourth quarter adjusted EBITDA of $925 million.
  • Redwater Expansion - sanctioned a $460 million expansion at its Redwater Complex to service growing customer demand and high utilization rates across the industry.
  • Strategy - Pembina outlines a renewed long-term strategy that continues to build upon its core business while capitalizing on opportunities arising from the transition to a lower-carbon economy.
  • Board of Directors Appointment - Mr. Andy Mah has been selected by the board of directors to join the board effective February 24, 2023.
  • Quarterly Common Share Dividend - the board of directors has declared a common share cash dividend for the first quarter of 2023 of $0.6525 per share to be paid, subject to applicable law, on March 31, 2023, to shareholders of record on March 15, 2023.

Financial and Operational Overview

 

3 Months Ended December 31

12 Months Ended December 31

($ millions, except where noted)

2022

2021

2022

2021

Revenue

2,699

2,560

11,611

8,627

Net revenue(1)

1,043

1,084

4,247

3,938

Gross profit

681

785

3,123

2,647

Earnings

243

80

2,971

1,242

Earnings per common share – basic (dollars)

0.39

0.08

5.14

2.00

Earnings per common share – diluted (dollars)

0.39

0.08

5.12

1.99

Cash flow from operating activities

947

697

2,929

2,650

Cash flow from operating activities per common share – basic (dollars)

1.72

1.27

5.30

4.82

Adjusted cash flow from operating activities(1)

690

734

2,661

2,640

Adjusted cash flow from operating activities per common share – basic (dollars)(1)

1.25

1.33

4.82

4.80

Common share dividends declared

359

346

1,409

1,386

Dividends per common share (dollars)

0.65

0.63

2.55

2.52

Capital expenditures

143

176

605

658

Total volumes (mboe/d)(2)

3,392

3,437

3,383

3,456

Adjusted EBITDA(1)

925

970

3,746

3,433

(1)

Refer to "Non-GAAP and Other Financial Measures".

(2)

Total revenue volumes. Revenue volumes are physical volumes plus volumes recognized from take-or-pay commitments. Volumes are stated in thousand barrels of oil equivalent per day ("mboe/d"), with natural gas volumes converted to mboe/d from millions of cubic feet per day ("MMcf/d") at a 6:1 ratio.

 

Financial and Operational Overview by Division

 

3 Months Ended December 31

12 Months Ended December 31

 

2022

2021

2022

2021

($ millions, except where noted)

Volumes(1)

Reportable
Segment
Earnings
(Loss)
Before Tax

Adjusted
EBITDA(2)

Volumes(1)

Reportable
Segment
Earnings
(Loss) Before Tax

Adjusted
EBITDA(2)

Volumes(1)

Reportable
Segment
Earnings
(Loss)
Before Tax

Adjusted
EBITDA(2)

Volumes(1)

Reportable
Segment
Earnings
(Loss)
Before Tax

Adjusted
EBITDA(2)

Pipelines

2,593

295

548

2,571

(70)

548

2,524

1,415

2,127

2,586

917

2,102

Facilities

799

145

288

866

164

285

859

1,804

1,137

870

732

1,097

Marketing & New Ventures(3)

96

171

220

183

708

721

374

420

Corporate

(206)

(82)

(181)

(46)

(708)

(239)

(358)

(186)

Total

3,392

330

925

3,437

133

970

3,383

3,219

3,746

3,456

1,665

3,433

(1)

Volumes for Pipelines and Facilities divisions are revenue volumes, which are physical volumes plus volumes recognized from take-or-pay commitments. Volumes are stated in mboe/d, with natural gas volumes converted to mboe/d from MMcf/d at a 6:1 ratio.

(2)

Refer to "Non-GAAP and Other Financial Measures".

(3)

Marketed natural gas liquids ("NGL") volumes are excluded from Volumes to avoid double counting. Refer to "Marketing & New Ventures Division" in Pembina's Management's Discussion and Analysis dated February 23, 2023 for the year ended December 31, 2022 for further information.

 

For further details on the Company's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's Annual Information Form for the year ended December 31, 2022 filed at www.sedar.com (filed with the U.S. Securities and Exchange Commission at www.sec.gov under Form 40-F) and on Pembina's website at www.pembina.com.

Financial & Operational Highlights

Adjusted EBITDA

Pembina reported fourth quarter adjusted EBITDA of $925 million and record full year adjusted EBITDA of $3,746 million. This represents a $45 million or five percent decrease, and a $313 million or nine percent increase, respectively, over the same periods in the prior year.

For both the fourth quarter and full year, adjusted EBITDA was positively impacted by higher volumes on the Peace Pipeline system and Cochin Pipeline; higher tolls due to inflation; the joint venture transaction to create Pembina Gas Infrastructure Inc. ("PGI") (the "PGI Transaction"); and stronger performance from certain gas processing assets, including the Hythe Gas Plant, the Dawson Assets, the Cutbank Complex, and the Resthaven Facility. Both periods were negatively impacted by a lower contribution from Ruby and higher integrity costs.

Fourth quarter adjusted EBITDA was also negatively impacted by lower margins on NGL sales, partially offset by higher margins on crude oil sales; a lower contribution from Aux Sable; lower revenue related to recoverable costs on the Horizon Pipeline system; and higher general and administrative expense, largely due to higher long-term incentive costs driven by the change in Pembina's share price and its share price performance relative to a peer group, combined with higher consulting fees. The fourth quarter was positively impacted by a realized gain on commodity-related derivatives, compared to a loss in the fourth quarter of 2021, and the impact of a higher U.S. dollar exchange rate.

Full year adjusted EBITDA was also positively impacted by higher margins on crude oil and natural gas sales, partially offset by lower margins on NGL sales; lower realized losses on commodity-related derivatives; and higher contributions from Alliance and Aux Sable. The full year was negatively impacted by higher general and administrative expense, largely due to higher long-term incentive costs as described above, as well as higher consulting fees, salaries and wages, and legal fees. The full year was also negatively impacted by lower contracted volumes on the Nipisi and Mitsue Pipeline systems.

Earnings

Pembina reported fourth quarter earnings of $243 million and full year earnings of $2,971 million. This represents a $163 million or 204 percent increase, and a $1,729 million or 139 percent increase, respectively, over the same periods in the prior year.

In the fourth quarter, in addition to the factors impacting adjusted EBITDA, as noted above, earnings were positively impacted by lower impairment expense, lower restructuring costs, and a higher unrealized gain on commodity-related derivatives. These factors were partially offset by a Ruby Pipeline settlement provision.

For the full year, in addition to the factors impacting adjusted EBITDA, as noted above, earnings were positively impacted by the recognized $1.1 billion gain on the PGI Transaction compared to the receipt of the $350 million termination fee associated with Pembina’s proposed acquisition of Inter Pipeline Ltd. in 2021, net of related tax and associated expenses; a higher unrealized gain on commodity-related derivatives; lower impairment expense; and lower income tax expense, primarily as a result of the PGI Transaction, net of a deferred tax recovery related to prior year impairments. These factors were partially offset by increased finance costs due to foreign exchange losses compared to gains in 2021, higher interest on long-term debt, and lower interest income.

Cash Flow From Operating Activities

Cash flow from operating activities of $947 million for the fourth quarter and $2,929 million for the full year represent an increase of 36 percent and 11 percent, respectively, over the same periods in the prior year.

The increase in the fourth quarter was primarily driven by an increase in the change in non-cash working capital, higher distributions from equity accounted investees, and a decrease in taxes paid, partially offset by lower operating results and an increase in net interest paid.

The full year increase was primarily driven by an increase in the change in non-cash working capital, higher distributions from equity accounted investees, higher operating results net of the $350 million Arrangement Termination Payment received in the third quarter of 2021, and a decrease in taxes paid, partially offset by an increase in net interest paid and share-based compensation payments.

On a per share (basic) basis, cash flow from operating activities was $1.72 per share for the fourth quarter and $5.30 per share for the full year. This represents increases of 35 percent and 10 percent, respectively, compared to the same periods in the prior year.

Adjusted Cash Flow From Operating Activities

Fourth quarter and full year adjusted cash flow from operating activities of $690 million and $2,661 million, represent a six percent decrease and one percent increase, respectively, over the same periods in the prior year.

The fourth quarter decrease was largely due to lower operating results and an increase in accrued share-based payments, partially offset by higher distributions from equity accounted investees and lower current tax expense.

The full year increase was primarily due to the same items impacting cash flow from operating activities, discussed above, net of the change in non-cash working capital, taxes paid, and share-based compensation payments, combined with lower current tax expense and preferred share dividends paid, largely offset by an increase in accrued share-based payments.

On a per share (basic) basis, adjusted cash flow from operating activities was $1.25 per share for the fourth quarter and $4.82 per share for the full year. This represents a decrease of six percent and an increase of less than one percent, respectively, compared to the same periods in the prior year.

Volumes

Total volumes of 3,392 mboe/d for the fourth quarter and 3,383 mboe/d for the full year represent decreases of approximately one percent and two percent, respectively, over the same periods in the prior year. In both periods, volume decreases were attributable to both the Pipelines and Facilities divisions, including most notably the Nipisi and Mitsue pipeline system, the Ruby Pipeline, and the disposition of the E1 and E6 assets, as described below. Divisional volumes are discussed in further detail below.

Excluding the volume impact of the Nipisi and Mitsue pipelines, the disposition of the E1 and E6 assets, and the Ruby Pipeline fourth quarter and full year volumes would have increased approximately four percent and three percent, respectively, over the same periods in the prior year.

Divisional Highlights

  • Pipelines reported adjusted EBITDA of $548 million for the fourth quarter, and $2,127 million for the full year 2022, which represent no change and a one percent increase, respectively, compared to the same periods in the prior year. Both periods were positively impacted by higher volumes on the Peace Pipeline and the Cochin Pipeline, higher tolls due to inflation, and the impact of the higher U.S. dollar exchange rate. Both periods were negatively impacted by a lower contribution from Ruby, higher general and administrative expense due to long-term incentives, and higher integrity costs. In addition, the fourth quarter was negatively impacted by lower revenue related to recoverable costs on the Horizon Pipeline system. The full year was also positively impacted by higher contributions from Alliance and negatively impacted by the expiration of contracts on the Nipisi and Mitsue Pipeline systems.

    Pipelines had fourth quarter reportable segment earnings before tax of $295 million compared to a loss of $70 million in the same period in the prior year. For the full year, Pipelines had reportable segment earnings before tax of $1,415 compared to $917 million in the same period in the prior year. In addition to the factors impacting adjusted EBITDA, as noted above, excluding the lower contribution from Ruby, the increase in both periods was largely due to a $437 million impairment recognized in the fourth quarter of 2021 associated with certain oil sands assets, partially offset by the Ruby settlement provision recognized in the fourth quarter of 2022. In addition, the full year was impacted by lower depreciation expense and higher legal costs.

    Pipelines volumes of 2,593 mboe/d in the fourth quarter and 2,524 mboe/d for the full year, represent a one percent increase and a two percent decrease, respectively, compared to the same periods in the prior year. Volumes for both the fourth quarter and full year were impacted by higher volumes on the Peace Pipeline system and Cochin Pipeline, partially offset by lower volumes on the Ruby Pipeline. In addition, the fourth quarter was positively impacted by higher recognition of deferred take-or-pay revenue volumes in the fourth quarter of 2022 compared to the prior period and higher volumes on AEGS due to third-party outages and planned turnarounds in the fourth quarter of 2021. The full year was also impacted by contract expirations on the Nipisi and Mitsue Pipeline systems, and higher volumes on the Drayton Valley Pipeline.

    Excluding the volume impact of the Nipisi and Mitsue pipeline systems and Ruby Pipeline, fourth quarter and full year Pipelines volumes would have increased approximately four percent and three percent, respectively, over the same periods in the prior year.

  • Facilities reported adjusted EBITDA of $288 million for the fourth quarter and $1,137 million for the full year, which represent a one percent and four percent increase, respectively, over the same periods in the prior year.

    Both periods were positively impacted by the PGI Transaction and stronger performance from certain gas processing assets, including the Hythe Gas Plant, the Dawson Assets, the Cutbank Complex and the Resthaven Facility. In addition, full year adjusted EBITDA benefited from higher realized gains on commodity-related derivatives, partially offset by higher integrity costs.

    Facilities had reportable segment earnings before tax of $145 million for the fourth quarter and $1,804 million for the full year, representing a decrease of 12 percent and an increase of 146 percent, respectively, over the same periods in the prior year. In addition to the factors impacting adjusted EBITDA, as noted above, both periods were positively impacted by higher unrealized gains on commodity-related derivatives. In addition, in the fourth quarter, the positive impacts captured in the adjusted EBITDA from PGI were offset by interest expense on long-term debt, income tax expense, and depreciation resulting from the PGI assets recorded at fair value, and an unrealized loss on commodity-related derivatives, which are all included in share of profit from PGI following the PGI Transaction. Full year segment earnings before tax were positively impacted by the $1.1 billion gain recognized on the PGI Transaction in the third quarter of 2022, and lower impairments recognized in 2022 compared to the prior year.

    Facilities volumes of 799 mboe/d in the fourth quarter and 859 mboe/d for the full year, represent decreases of eight percent and one percent, respectively, compared to the same periods in the prior year. The quarterly and full year decreases were primarily due to the disposition of Pembina’s interest in the E1 and E6 assets at Empress, as described further below, partially offset by the impact of the PGI Transaction, higher volumes at the Hythe Gas Plant and Dawson Assets, and higher volumes at the Younger facility. The fourth quarter was also impacted by higher volumes at the Redwater Complex due to a third-party outage in the fourth quarter of 2021. Excluding the impact of the disposition of Pembina’s interest in the E1 and E6 assets, fourth quarter and full year Facilities volumes would have increased by five percent and two percent, respectively, compared to the same periods in the prior year.

  • Marketing & New Ventures reported adjusted EBITDA of $171 million for the fourth quarter and $721 million for the full year, which represent a seven percent decrease and a 72 percent increase, respectively, compared to the same periods in the prior year. The fourth quarter was negatively impacted by a lower contribution from Aux Sable; lower margins on NGL sales, partially offset by higher margins on crude oil sales; and a realized gain on commodity-related derivatives, compared to a loss in the prior period. The full year was positively impacted by higher margins on crude oil and natural gas sales and a higher contribution from Aux Sable, partially offset by lower margins on NGL sales and lower realized losses on commodity-related derivatives.

    Marketing & New Ventures had reportable segment earnings before tax of $96 million for the fourth quarter and $708 million for the full year, representing a decrease of 56 percent and an increase of 89 percent, respectively, over the same periods in the prior year. In addition to the factors impacting adjusted EBITDA, as noted above, the fourth quarter was impacted by an unrealized loss on commodity-related derivatives compared to a gain in the prior period. The full year was impacted by a higher unrealized gain on commodity-related derivatives and higher net finance costs related to foreign exchange losses in the period compared to gains in 2021.

    Marketed NGL volumes of 193 mboe/d in the fourth quarter and 190 mboe/d for the full year, represent no change compared to the same periods in the prior year.

Quarterly Common Share Dividend

Pembina's board of directors has declared a common share cash dividend for the first quarter of 2023 of $0.6525 per share to be paid, subject to applicable law, on March 31, 2023, to shareholders of record on March 15, 2023. The common share dividends are designated as "eligible dividends" for Canadian income tax purposes. For non-resident shareholders, Pembina's common share dividends should be considered "qualified dividends" and may be subject to Canadian withholding tax.

For shareholders receiving their common share dividends in U.S. funds, the cash dividend is expected to be approximately U.S. $0.4818 per share (before deduction of any applicable Canadian withholding tax) based on a currency exchange rate of 0.7384. The actual U.S. dollar dividend will depend on the Canadian/U.S. dollar exchange rate on the payment date and will be subject to applicable withholding taxes.

Quarterly dividend payments are expected to be made on the last business day of March, June, September and December to shareholders of record on the 15th day of the corresponding month, if, as and when declared by the board of directors. Should the record date fall on a weekend or on a statutory holiday, the record date will be the next succeeding business day following the weekend or statutory holiday.

Board of Directors Appointment

Pembina is pleased to announce that Mr. Andy Mah has been selected by the board of directors to join the board effective February 24, 2023.

Mr. Mah has over 40 years of experience in the oil and gas industry and was the Chief Executive Officer of Advantage Energy Ltd. ("Advantage") from January 2009 until his retirement on December 31, 2021. Mr. Mah has developed and transformed corporations, led large successful capital investment programs and has completed numerous corporate and asset level mergers, acquisitions and divestments. He also energized excellence in operational, financial, safety and environmental performance throughout his career in multinational, intermediate and junior oil and gas companies. Prior to his career at Advantage, he held leadership positions at Ketch Resources Trust, Unocal Corporation, Northrock Resources Ltd., and BP Canada. Mr. Mah also serves on the board of Advantage.

"I am thrilled to welcome Andy to the board of directors and look forward to working with him. Given his extensive and relevant experience, he will make a meaningful contribution to the board and support Pembina's continued success," said Henry Sykes, Chair of the Board.

Executive Overview and Business Update

Strong 2022 Results

2022 was a record financial year with Pembina generating adjusted EBITDA of $3.746 billion, a nine percent increase over 2021, driven by growing volumes on key systems and a strong performance from the marketing business.

Benefiting from a post-COVID recovery and strong commodity prices, volumes on Pembina's conventional pipeline systems, which generally serve as a good proxy for Pembina's broader business and activity in the Western Canadian Sedimentary Basin ("WCSB"), were approximately six percent higher in 2022 than in 2021. As well, volumes on the Cochin Pipeline increased approximately nine percent over the prior year and the Alliance Pipeline was highly utilized given prevailing global energy supply/demand dynamics and the Chicago-AECO natural gas price differential.

Within the gas processing business, excluding the impact of changing ownership interests resulting from the PGI Transaction, Pembina benefited from stronger underlying performance throughout 2022 from a number of gas processing assets, including the Hythe Gas Plant, Dawson Assets, the Cutbank Complex, and the Resthaven Facility.

In the marketing business, Pembina benefited from a favorable crude oil price environment and certain price differentials, including a wider Chicago-AECO gas price differential and a wider condensate price differential between western Canada and the U.S. Gulf Coast.

Strong financial results allowed Pembina to generate substantial free cash flow, which was allocated to strengthening the balance sheet and returning capital to shareholders. In 2022, Pembina raised the common share dividend by 3.6 percent, reached its target to repurchase $350 million of common shares, redeemed $300 million of preferred shares, and reduced leverage to the low end of the target range.

Pembina Gas Infrastructure

A milestone achievement in 2022 was the creation of PGI. PGI brought together three complementary platforms to create a premier, highly competitive western Canadian gas processing entity with the ability to serve customers from north central Alberta to northeast British Columbia ("NEBC") and to pursue future growth opportunities in a capital efficient manner.

Since closing the PGI transaction, integration activities have progressed well and operations have performed as expected, with no major interruptions to service. Commercially, we have successfully secured incremental volumes through fee-for-service, firm contracts with a number of existing customers at both the K3 and Wapiti facilities.


Contacts

Investor Relations
(403) 231-3156
1-855-880-7404
e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
www.pembina.com


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– Fourth Quarter Adjusted EBITDA Growth of 13%, Normalized for the Divestiture of the Storage Tanks Business

– Strong Fourth Quarter Pricing Gains within Construction Products Offset Volume Declines

– Booked Orders of $371 Million for Wind Towers and $134 Million for Barge During the Quarter

– Net Debt to Adjusted EBITDA of 1.2x at Year End Provides Balance Sheet Flexibility For Disciplined Capital Allocation

DALLAS--(BUSINESS WIRE)--Arcosa, Inc. (NYSE: ACA) (“Arcosa,” the “Company,” “We,” or “Our”), a provider of infrastructure-related products and solutions, today announced results for the fourth quarter and full year ended December 31, 2022.

On October 3, 2022, the Company completed the divestiture of its storage tanks business. Financial results for the storage tanks business are included in the Engineered Structures segment as part of continuing operations to the date of sale. The tables below include additional financial information to facilitate the comparison to prior year's results.

Fourth Quarter Highlights

 

Three Months Ended December 31,

 

 

2022

 

 

 

2021

 

 

% Change

 

($ in millions, except
per share amounts)

 

 

Revenues

$

500.3

 

 

$

521.8

 

 

(4)%

Revenues, excluding impact from divested business(1)

$

499.0

 

 

$

460.2

 

 

8%

Net income

$

154.6

 

 

$

9.2

 

 

N.M.

Adjusted Net Income(2)

$

11.4

 

 

$

19.2

 

 

(41)%

Diluted EPS

$

3.18

 

 

$

0.19

 

 

N.M.

Adjusted Diluted EPS(2)

$

0.24

 

 

$

0.40

 

 

(40)%

Adjusted EBITDA(2)

$

61.7

 

 

$

65.9

 

 

(6)%

Adjusted EBITDA Margin(2)

 

12.3

%

 

 

12.6

%

 

(30 bps)

Adjusted EBITDA, excluding impact from divested business(1)(2)

$

61.3

 

 

$

54.4

 

 

13%

Adjusted EBITDA Margin, excluding impact from divested business(1)(2)

 

12.3

%

 

 

11.8

%

 

50 bps

Net cash provided by operating activities

$

(8.3

)

 

$

89.7

 

 

N.M.

Free Cash Flow(2)

$

(60.4

)

 

$

65.4

 

 

N.M.

Full Year Highlights

 

Year Ended December 31,

 

 

2022

 

 

 

2021

 

 

% Change

 

($ in millions, except
per share amounts)

 

 

Revenues

$

2,242.8

 

 

$

2,036.4

 

 

10%

Revenues, excluding impact from divested business(1)

$

2,241.5

 

 

$

1,974.8

 

 

14%

Net income

$

245.8

 

 

$

69.6

 

 

N.M.

Adjusted Net Income(2)

$

106.8

 

 

$

93.9

 

 

14%

Diluted EPS

$

5.05

 

 

$

1.42

 

 

N.M.

Adjusted Diluted EPS(2)

$

2.19

 

 

$

1.93

 

 

13%

Adjusted EBITDA(2)

$

325.1

 

 

$

283.3

 

 

15%

Adjusted EBITDA Margin(2)

 

14.5

%

 

 

13.9

%

 

60 bps

Adjusted EBITDA, excluding impact from divested business(1)(2)

$

324.7

 

 

$

271.8

 

 

19%

Adjusted EBITDA Margin, excluding impact from divested business(1)(2)

 

14.5

%

 

 

13.8

%

 

70 bps

Net cash provided by operating activities

$

174.3

 

 

$

166.5

 

 

5%

Free Cash Flow(2)

$

36.3

 

 

$

81.4

 

 

(55) %

N.M. - not meaningful for the period

bps - basis points

 

(1) Excludes the fourth quarter impact of the storage tanks business for all periods presented.

(2) Non-GAAP financial measure. See reconciliation tables included in this release.

Commenting on the annual results, Antonio Carrillo, President and Chief Executive Officer, noted, “Arcosa achieved significant progress in 2022, as we advanced our strategy and generated solid financial performance while navigating a challenging environment. I am proud of the entire Arcosa team, which executed consistently throughout the year to accomplish our strategic and operational objectives. Despite headwinds in our cyclical businesses, Arcosa reported full-year double digit revenue and Adjusted EBITDA growth and expanded Adjusted EBITDA margins by 70 basis points, after normalizing for the impact of the sale of the storage tanks business.

“Throughout the year, our growth businesses in Construction Products and Engineered Structures implemented proactive pricing actions to combat inflationary cost pressures. These successful efforts increased combined Adjusted EBITDA for these businesses by 20% in 2022.

“Our cyclical businesses exceeded our annual expectations as we effectively managed costs and improved operating efficiencies, despite the lower level of production. While earnings from our cyclical businesses declined year-over-year, we received large orders for both wind towers and barges during the fourth quarter, supporting our positive outlook for these businesses.”

Carrillo continued, “The divestiture of our storage tanks business in October represented an important milestone in our ongoing commitment to simplify our portfolio. By allocating a portion of the sale proceeds to pay off our revolver, we strengthened our balance sheet and ended the year with Net Debt to Adjusted EBITDA of 1.2x. Our balance sheet provides ample liquidity and flexibility during this time of macro-economic uncertainty to support our disciplined approach to capital allocation.”

2023 Outlook and Guidance

Arcosa announced the following total Company guidance for full year 2023:

  • Consolidated revenues of $2.15 billion to $2.25 billion, compared to $2.05 billion in 2022, excluding $188.9 million from the storage tanks business
  • Consolidated Adjusted EBITDA of $310 million to $340 million, compared to $278.2 million in 2022, excluding $46.9 million from the storage tanks business
  • Adjusted EBITDA guidance includes an approximate $22 million gain on the sale of land with depleted reserves within our Construction Products segment that will be recognized in the first quarter

Commenting on the outlook, Carrillo noted, “Looking ahead, we expect to continue our profitable growth trajectory in 2023. We anticipate positive catalysts from increased infrastructure spending across our businesses as we remain focused on our long-term vision to grow in attractive markets and reduce the complexity and cyclicality of our portfolio.

“In Construction Products, our strong pricing gains in 2022 will carry forward to 2023. We expect that increased funding for infrastructure projects and healthy demand for multi-family and non-residential construction to lessen the impact from the affordability-driven weakness in single-family housing starts.

“We are encouraged by the recent orders in our wind tower and barge businesses. In January 2023, we received additional wind tower orders of approximately $45 million, essentially filling our planned production for this year. From an earnings standpoint, we anticipate 2023 will be a transition year as the wind industry supply chain takes time to ramp up following the passage of the Inflation Reduction Act. We expect to continue to build our production backlog throughout the year for both our wind tower and barge businesses as well as ramp up our manufacturing capacity to prepare for the expected multi-year recovery in 2024 and beyond.”

Carrillo concluded, “Arcosa remains well-positioned for long-term growth given the diverse nature of our businesses, end markets, and geographies. In addition, the strength of our balance sheet and cash flow enable us to strategically invest in our portfolio, pursue opportunistic acquisitions, and enhance our operational efficiency. We remain committed to driving sustainable earnings growth and cash flow to build long-term shareholder value.”

Fourth Quarter 2022 Results and Commentary

Construction Products

  • Revenues increased 5% to $221.9 million primarily due to strong organic pricing across our businesses that offset overall volume declines as well as the addition of RAMCO, the Southern California recycled aggregates producer acquired in May 2022.
  • Wet and extreme cold weather during the quarter impacted volumes along with a continued deceleration in new single-family residential construction activity.
  • Inflationary cost pressures related to higher diesel, cement, and process fuels increased cost of revenues by approximately $8 million, or 5%.
  • Adjusted Segment EBITDA increased 6% to $49.6 million, slightly ahead of revenues.
  • Adjusted Segment EBITDA Margin increased to 22.4% compared to 22.2% in the prior year.

Engineered Structures

  • Results for the segment were impacted by the divestiture of our storage tanks business. Fourth quarter revenues and Adjusted EBITDA for the storage tanks business were $1.3 million and $0.4 million, respectively, compared to $61.6 million and $11.5 million, respectively, in the prior period.
  • In addition, the Company recognized a pretax gain on the sale of $189.0 million ($147.3 million after tax), which has been excluded from Adjusted Segment EBITDA.
  • Revenues for utility, wind, and related structures increased 18% driven by higher pricing due to elevated steel prices, partially offset by lower volumes.
  • Excluding the impact of the storage tanks business, Adjusted Segment EBITDA increased 2% to $17.1 million and margins decreased 130 basis points to 8.4%.
  • The decline in Adjusted Segment EBITDA margins primarily resulted from product mix and production inefficiencies in our utility structures business.
  • We received wind tower orders of $371 million during the quarter, which extends our backlog with a base level of production into 2025.
  • At the end of the fourth quarter, the combined backlog for utility, wind, and related structures was $671.3 million compared to $437.5 million at the end of the fourth quarter of 2021.

Transportation Products

  • Revenues were $72.5 million, down 4%. Barge revenues declined 24% driven by lower barge deliveries as historically high steel prices have impacted customer demand. Conversely, steel components revenues increased 36% due to higher deliveries resulting from improving market fundamentals in the North American railcar market.
  • Adjusted Segment EBITDA increased $4.7 million, or 131%, to $8.3 million, representing an 11.4% margin compared to 4.8% in the prior period. The increase in Adjusted Segment EBITDA margins was driven by improvements in both the steel components and barge businesses.
  • During the quarter, we received orders of approximately $134 million in our barge business, representing a book-to-bill of 3.5. These orders are primarily for hopper barges to be delivered in 2023 and substantially fill our planned production capacity for the year.
  • Barge backlog at the end of the quarter was $225.1 million compared to $92.7 million at the end of the fourth quarter of 2021. We expect to deliver all of our current backlog in 2023.

Corporate and Other Financial Notes

  • Excluding acquisition and divestiture-related costs and an $8.7 million legal settlement recognized in the prior year, both of which have been excluded from Adjusted EBITDA, corporate expenses were $15.0 million in the fourth quarter compared to $14.2 million in the prior year.
  • The increase in corporate expenses was driven by higher compensation costs.
  • Acquisition and divestiture-related costs were $5.4 million in the fourth quarter compared to $1.5 million in the prior year.
  • The effective tax rate for the fourth quarter was 22.7% compared to (12.2)% in the prior year. The increase in the tax rate was primarily due to non-recurring tax benefits that reduced the rate in the prior period.

Cash Flow and Liquidity

  • Operating cash flow was $(8.3) million during the fourth quarter, a decrease of $(98.0) million year-over-year.
  • Working capital was a $31.1 million use of cash for the quarter compared to the prior year's $36.4 million source of cash, primarily driven by higher accounts receivables and a reduction in accrued liabilities.
  • Capital expenditures in the fourth quarter were $52.1 million, up from $24.3 million in the prior year, as progress continued on organic growth projects underway in Construction Products and Engineered Structures. Free Cash Flow for the quarter was $(60.4) million, down from $65.4 million in the prior year.
  • In October 2022, the Company used $155.0 million of the cash proceeds from the sale of the storage tanks business to pay down the outstanding borrowings under its revolving credit facility.
  • We ended the quarter with total liquidity of $635.1 million, including $160.4 million of cash, and net debt to Adjusted EBITDA was 1.2X for the trailing twelve months.

Non-GAAP Financial Information

This earnings release contains financial measures that have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the accompanying tables to this earnings release.

Conference Call Information

A conference call is scheduled for 8:30 a.m. Eastern Time on February 24, 2023 to discuss fourth quarter and full year 2022 results. To listen to the conference call webcast, please visit the Investor Relations section of Arcosa’s website at https://ir.arcosa.com. A slide presentation for this conference call will be posted on the Company’s website in advance of the call at https://ir.arcosa.com. The audio conference call number is 800-343-1703 for domestic callers and 785-424-1226 for international callers. The conference ID is ARCOSA and the passcode is 36952. An audio playback will be available through 11:59 p.m. Eastern Time on March 10, 2023, by dialing 877-856-8966 for domestic callers and 402-220-1610 for international callers. A replay of the webcast will be available for one year on Arcosa’s website at https://ir.arcosa.com/news-events/events-presentations.

About Arcosa

Arcosa, Inc. (NYSE:ACA), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading positions in construction, engineered structures, and transportation markets. Arcosa reports its financial results in three principal business segments: Construction Products, Engineered Structures, and Transportation Products. For more information, visit www.arcosa.com.

Some statements in this release, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Arcosa’s estimates, expectations, beliefs, intentions or strategies for the future. Arcosa uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “guidance,” “outlook,” “strategy,” “plans,” and similar expressions to identify these forward-looking statements. Forward-looking statements speak only as of the date of this release, and Arcosa expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, except as required by federal securities laws. Forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to assumptions, risks and uncertainties regarding the impact of the COVID-19 pandemic, or other similar outbreaks, on Arcosa’s business; assumptions, risks and uncertainties regarding achievement of the expected benefits of Arcosa’s spin-off from Trinity; tax treatment of the spin-off; failure to successfully integrate acquisitions or divest any business, or failure to achieve the expected benefits of acquisitions or divestitures; market conditions and customer demand for Arcosa’s business products and services; the cyclical nature of, and seasonal or weather impact on, the industries in which Arcosa competes; competition and other competitive factors; governmental and regulatory factors; changing technologies; availability of growth opportunities; market recovery; ability to improve margins; the impact of inflation and costs of materials; and Arcosa’s ability to execute its long-term strategy, and such forward-looking statements are not guarantees of future performance. For further discussion of such risks and uncertainties, see "Risk Factors" and the "Forward-Looking Statements" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Arcosa's Form 10-K for the year ended December 31, 2022 to be filed on or about February 24, 2023, and as may be revised and updated by Arcosa's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

TABLES TO FOLLOW

Arcosa, Inc.

Condensed Consolidated Statements of Operations

(in millions, except per share amounts)

(unaudited)

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

Revenues

$

500.3

 

 

$

521.8

 

 

$

2,242.8

 

 

$

2,036.4

Operating costs:

 

 

 

 

 

 

 

Cost of revenues

 

415.1

 

 

 

432.6

 

 

 

1,820.0

 

 

 

1,670.2

Selling, general, and administrative expenses

 

66.1

 

 

 

70.7

 

 

 

262.8

 

 

 

256.0

Gain on sale of storage tanks business

 

(189.0

)

 

 

 

 

 

(189.0

)

 

 

Impairment charge

 

 

 

 

2.9

 

 

 

 

 

 

2.9

 

 

292.2

 

 

 

506.2

 

 

 

1,893.8

 

 

 

1,929.1

Operating profit

 

208.1

 

 

 

15.6

 

 

 

349.0

 

 

 

107.3

 

 

 

 

 

 

 

 

Interest expense

 

7.5

 

 

 

7.4

 

 

 

31.0

 

 

 

23.4

Other, net (income) expense

 

0.7

 

 

 

 

 

 

1.8

 

 

 

0.3

 

 

8.2

 

 

 

7.4

 

 

 

32.8

 

 

 

23.7

Income before income taxes

 

199.9

 

 

 

8.2

 

 

 

316.2

 

 

 

83.6

Provision for income taxes

 

45.3

 

 

 

(1.0

)

 

 

70.4

 

 

 

14.0

Net income

$

154.6

 

 

$

9.2

 

 

$

245.8

 

 

$

69.6

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

Basic

$

3.20

 

 

$

0.19

 

 

$

5.08

 

 

$

1.44

Diluted

$

3.18

 

 

$

0.19

 

 

$

5.05

 

 

$

1.42

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

48.2

 

 

 

48.2

 

 

 

48.2

 

 

 

48.1

Diluted

 

48.4

 

 

 

48.6

 

 

 

48.5

 

 

 

48.6

Arcosa, Inc.

Condensed Segment Data

(in millions)

(unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

Revenues:

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Aggregates and specialty materials

$

200.5

 

 

$

192.5

 

 

$

821.4

 

 

$

711.6

 

Construction site support

 

21.4

 

 

 

19.2

 

 

 

102.1

 

 

 

85.2

 

Construction Products

 

221.9

 

 

 

211.7

 

 

 

923.5

 

 

 

796.8

 

 

 

 

 

 

 

 

 

Utility, wind, and related structures

 

204.6

 

 

 

172.9

 

 

 

813.1

 

 

 

717.9

 

Storage tanks(1)

 

1.3

 

 

 

61.6

 

 

 

188.9

 

 

 

216.2

 

Engineered Structures

 

205.9

 

 

 

234.5

 

 

 

1,002.0

 

 

 

934.1

 

 

 

 

 

 

 

 

 

Inland barges

 

38.2

 

 

 

50.4

 

 

 

189.9

 

 

 

215.7

 

Steel components

 

34.3

 

 

 

25.2

 

 

 

127.4

 

 

 

89.9

 

Transportation Products

 

72.5

 

 

 

75.6

 

 

 

317.3

 

 

 

305.6

 

 

 

 

 

 

 

 

 

Segment Totals before Eliminations

 

500.3

 

 

 

521.8

 

 

 

2,242.8

 

 

 

2,036.5

 

Eliminations

 

 

 

 

 

 

 

 

 

 

(0.1

)

Consolidated Total

$

500.3

 

 

$

521.8

 

 

$

2,242.8

 

 

$

2,036.4

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

Operating profit (loss):

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Construction Products

$

24.1

 

 

$

22.7

 

 

$

96.5

 

 

$

83.2

 

Engineered Structures(1)

 

200.1

 

 

 

17.8

 

 

 

307.0

 

 

 

88.0

 

Transportation Products

 

4.3

 

 

 

(0.5

)

 

 

11.5

 

 

 

6.4

 

Segment Totals before Corporate Expenses

 

228.5

 

 

 

40.0

 

 

 

415.0

 

 

 

177.6

 

Corporate

 

(20.4

)

 

 

(24.4

)

 

 

(66.0

)

 

 

(70.3

)

Consolidated Total

$

208.1

 

 

$

15.6

 

 

$

349.0

 

 

$

107.3

 

Backlog:

December 31,
2022

 

December 31,
2021

Engineered Structures:

 

 

 

Utility, wind, and related structures

$

671.3

 

$

437.5

Storage tanks(1)

$

 

$

22.0

Transportation Products:

 

 

 

Inland barges

$

225.1

 

$

92.7

(1) On October 3, 2022, the Company sold the storage tanks business and its related backlog. In the fourth quarter, we recognized a gain on the sale of $189.0 million, which is included in operating profit.

Arcosa, Inc.

Condensed Consolidated Balance Sheets

(in millions)

(unaudited)

 

 

December 31, 2022

 

December 31, 2021

Current assets:

 

 

 

Cash and cash equivalents

$

160.4

 

 

$

72.9

 

Receivables, net of allowance

 

334.2

 

 

 

310.8

 

Inventories

 

315.8

 

 

 

324.5

 

Other

 

46.4

 

 

 

59.7

 

Total current assets

 

856.8

 

 

 

767.9

 

 

 

 

 

Property, plant, and equipment, net

 

1,199.6

 

 

 

1,201.9

 

Goodwill

 

958.5

 

 

 

934.9

 

Intangibles, net

 

256.1

 

 

 

220.3

 

Deferred income taxes

 

9.6

 

 

 

13.2

 

Other assets

 

60.0

 

 

 

49.9

 

 

$

3,340.6

 

 

$

3,188.1

 

Current liabilities:

 

 

 

Accounts payable

$

190.7

 

 

$

184.7

 

Accrued liabilities

 

121.8

 

 

 

145.9

 

Advance billings

 

40.5

 

 

 

18.6

 

Current portion of long-term debt

 

14.7

 

 

 

14.8

 

Total current liabilities

 

367.7

 

 

 

364.0

 

 

 

 

 

Debt

 

535.9

 

 

 

664.7

 

Deferred income taxes

 

175.6

 

 

 

134.0

 

Other liabilities

 

77.0

 

 

 

72.1

 

 

 

1,156.2

 

 

 

1,234.8

 

Stockholders' equity:

 

 

 

Common stock

 

0.5

 

 

 

0.5

 

Capital in excess of par value

 

1,684.1

 

 

 

1,692.6

 

Retained earnings

 

515.5

 

 

 

279.5

 

Accumulated other comprehensive loss

 

(15.7

)

 

 

(19.3

)

Treasury stock

 

 

 

 

 

 

 

2,184.4

 

 

 

1,953.3

 

 

$

3,340.6

 

 

$

3,188.1

 

Arcosa, Inc.

Consolidated Statements of Cash Flows

(in millions)

(unaudited)

 

 

Year Ended
December 31,

 

 

2022

 

 

 

2021

 

Operating activities:

 

 

 

Net income

$

245.8

 

 

$

69.6

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation, depletion, and amortization

 

154.1

 

 

 

144.3

 

Impairment charge

 

 

 

 

2.9

 

Stock-based compensation expense

 

19.1

 

 

 

18.0

 

Provision for deferred income taxes

 

44.8

 

 

 

11.9

 

Gains on disposition of property and other assets

 

(11.7

)

 

 

(10.3

)

Gain on sale of storage tanks business

 

(189.0

)

 

 

 

(Increase) decrease in other assets

 

(3.8

)

 

 

5.2

 

Increase (decrease) in other liabilities

 

(16.0

)

 

 

(22.6

)

Other

 

(3.7

)

 

 

(2.2

)

Changes in current assets and liabilities:

 

 

 

(Increase) decrease in receivables

 

(65.9

)

 

 

(25.9

)

(Increase) decrease in inventories

 

(26.7

)

 

 

(24.6

)

(Increase) decrease in other current assets

 

(8.5

)

 

 

(13.3

)

Increase (decrease) in accounts payable

 

27.0

 

 

 

34.7

 

Increase (decrease) in advance billings

 

21.9

 

 

 

(26.1

)

Increase (decrease) in accrued liabilities

 

(13.1

)

 

 

4.9

 

Net cash provided by operating activities

 

174.3

 

 

 

166.5

 

Investing activities:

 

 

 

Proceeds from disposition of property and other assets

 

32.2

 

 

 

20.0

 

Capital expenditures

 

(138.0

)

 

 

(85.1

)

Acquisitions, net of cash acquired

 

(75.1

)

 

 

(523.4

)

Proceeds from divestitures

 

271.6

 

 

 

18.2

 

Net cash provided (required) by investing activities

 

90.7

 

 

 

(570.3

)

Financing activities:

 

 

 

Payments to retire debt

 

(220.2

)

 

 

(83.2

)

Proceeds from issuance of debt

 

80.0

 

 

 

500.0

 

Shares repurchased

 

(15.0

)

 

 

(9.4

)

Dividends paid to common stockholders

 

(9.8

)

 

 

(9.8

)

Purchase of shares to satisfy employee tax on vested stock

 

(12.5

)

 

 

(10.1

)

Debt issuance costs

 

 

 

 

(6.6

)

Net cash (required) provided by financing activities

 

(177.5

)

 

 

380.9

 

Net increase (decrease) in cash and cash equivalents

 

87.5

 

 

 

(22.9

)

Cash and cash equivalents at beginning of period

 

72.9

 

 

 

95.8

 

Cash and cash equivalents at end of period

$

160.4

 

 

$

72.9

 

Arcosa, Inc.

Reconciliation of Adjusted Net Income and Adjusted Diluted EPS

(unaudited)

 

GAAP does not define “Adjusted Net Income” and it should not be considered as an alternative to earnings measures defined by GAAP, including net income. We use this metric to assess the operating performance of our consolidated business. We adjust net income for certain items that are not reflective of the normal operations of our business to provide investors with what we believe is a more consistent comparison of earnings performance from period to period.

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2022

 

 

 

2021

 

 

2022

 

 

 

2021

 

(in millions)

Net Income

$

154.6

 

 

$

9.2

 

$

245.8

 

 

$

69.6

Gain on sale of storage tanks business, net of tax

 

(147.3

)

 

 

 

 

(147.3

)

 

 

Impact of acquisition and divestiture-related expenses, net of tax(1)

 

4.1

 

 

 

1.1

 

 

8.3

 

 

 

15.4

Impairment charge, net of tax

 

 

 

 

2.2

 

 

 

 

 

2.2

Legal settlement, net of tax

 

 

 

 

6.7

 

 

 

 

 

6.7

Adjusted Net Income

$

11.4

 

 

$

19.2

 

$

106.8

 

 

$

93.9

GAAP does not define “Adjusted Diluted EPS” and it should not be considered as an alternative to earnings measures defined by GAAP, including diluted EPS. We use this metric to assess the operating performance of our consolidated business. We adjust diluted EPS for certain items that are not reflective of the normal operations of our business to provide investors with what we believe is a more consistent comparison of earnings performance from period to period.

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2022

 

 

 

2021

 

 

2022

 

 

 

2021

 

(in dollars per share)

Diluted EPS

$

3.18

 

 

$

0.19

 

$

5.05

 

 

$

1.42

Gain on sale of storage tanks business

 

(3.03

)

 

 

 

 

(3.03

)

 

 

Impact of acquisition and divestiture-related expenses(1)

 

0.09

 

 

 

0.02

 

 

0.17

 

 

 

0.32

Impairment charge

 

 

 

 

0.05

 

 

 

 

 

0.05

Legal settlement

 

 

 

 

0.14

 

 

 

 

 

0.14

Adjusted Diluted EPS

$

0.24

 

 

$

0.40

 

$

2.19

 

 

$

1.93


Contacts

INVESTOR CONTACTS
Gail M. Peck
Chief Financial Officer

Erin Drabek
Director of Investor Relations

T 972.942.6500
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David Gold
ADVISIRY Partners

T 212.661.2220
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MEDIA CONTACT
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HOUSTON--(BUSINESS WIRE)--Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported net income of $23.1 million, or $0.23 per share, on revenue of $536 million for the three months ended December 31, 2022. Adjusted net income was $6.4 million, or $0.06 per share, reflecting the impact of $0.2 million of pre-tax adjustments associated with foreign exchange losses recognized during the quarter and $(16.6) million of discrete tax adjustments, primarily due to changes in valuation allowances and certain adjustments to prior year taxes.


During the prior quarter ended September 30, 2022, Oceaneering reported net income of $18.3 million, or $0.18 per share, on revenue of $560 million. Adjusted net income was $23.7 million, or $0.23 per share, reflecting the impact of $1.1 million of pre-tax adjustments associated with foreign exchange losses recognized during the quarter and $4.4 million of discrete tax adjustments, primarily due to changes in valuation allowances and uncertain tax positions.

Adjusted operating income (loss), operating margins, net income (loss) and earnings (loss) per share; EBITDA and adjusted EBITDA (as well as EBITDA and adjusted EBITDA margins); and free cash flow are non-GAAP measures that exclude the impacts of certain identified items. Reconciliations to the corresponding GAAP measures are shown in the tables Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS), EBITDA and Adjusted EBITDA and Margins, Free Cash Flow, 2023 Adjusted EBITDA and Free Cash Flow Estimates, Adjusted Operating Income (Loss) and Margins by Segment, and EBITDA and Adjusted EBITDA and Margins by Segment. These tables are included below under the caption Reconciliations of Non-GAAP to GAAP Financial Information.

Summary of Results

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

Dec 31,

 

Sep 30,

 

Dec 31,

 

 

 

 

 

 

 

 

 

2022

 

2021

 

2022

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

536,223

 

$

466,709

 

 

$

559,671

 

$

2,066,084

 

$

1,869,275

 

Gross Margin

 

 

90,102

 

 

79,163

 

 

 

95,754

 

 

307,377

 

 

264,065

 

Income (Loss) from Operations

 

 

42,177

 

 

(12,572

)

 

 

46,875

 

 

110,863

 

 

39,799

 

Net Income (Loss)

 

 

23,128

 

 

(38,813

)

 

 

18,303

 

 

25,941

 

 

(49,307

)

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings (Loss) Per Share

 

$

0.23

 

$

(0.39

)

 

$

0.18

 

$

0.26

 

$

(0.49

)

For the fourth quarter of 2022:

  • Net income was $23.1 million and consolidated adjusted EBITDA was $70.0 million
  • Consolidated operating income was $42.2 million
  • Remotely Operated Vehicles (ROV) fleet count was 250, Q4 utilization was 62%, and Q4 average revenue per day on hire was $8,967
  • Cash flow provided by operating activities was $159 million and free cash flow was $134 million, with an ending cash position of $569 million
  • Secured consolidated order intake with expected contract value of $771 million

As of December 31, 2022:

  • Manufactured Products backlog was $467 million
  • Consolidated backlog was $1,947 million

Guidance for 2023:

  • Net income is expected in the range of $75 million to $90 million and consolidated adjusted EBITDA is expected in the range of $260 million to $310 million
  • Free cash flow generation is expected in the range of $75 million to $125 million
  • Capital expenditures are expected in the range of $90 million to $110 million
  • First quarter consolidated adjusted EBITDA is expected in the range of $40 million to $50 million

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "2022 marked our fourth consecutive year of improved adjusted EBITDA performance. In our offshore energy markets, the year unfolded generally as we expected, with seasonally lower activity levels and increased preparation costs during the first half of the year progressing into higher activity levels and increased margins during the second half of the year. Our consolidated adjusted EBITDA of $233 million was above the midpoint of our guidance range, and year-over-year adjusted EBITDA growth was led by significant improvement in our Subsea Robotics (SSR) and Offshore Projects Group (OPG) segment results. We delivered $121 million of cash flow from operations, spent $81.0 million on capital expenditures, and increased our cash position by $30.6 million to $569 million on December 31, 2022. We are encouraged by our strong order intake during the second half of 2022, improving pricing, and an expanding sales pipeline. We expect these positive fundamentals to drive improved financial performance in 2023.

“Our fourth quarter 2022 performance produced consolidated adjusted EBITDA of $70.0 million. Although we experienced typical seasonality, it is worth noting that the combined revenue and adjusted EBITDA levels in our SSR and OPG segments during the fourth quarter of 2022 were significantly greater than the corresponding quarter in 2021. We see this as a positive indicator for prospects in our energy businesses in 2023. Our fourth quarter 2022 results also included accrual releases resulting from more efficient personnel and inventory management that occurred throughout the year and primarily benefited our SSR and Integrity Management and Digital Solutions (IMDS) segments. Consolidated revenue of $536 million was 4% lower than in the third quarter, with revenue increases in our Manufactured Products and Aerospace and Defense Technologies (ADTech) segments being more than offset by revenue decreases in our other operating segments, particularly OPG.

Segment Results

"Our fourth quarter 2022 SSR operating income improved sequentially, despite marginally lower revenue. Activity levels in our ROV, tooling and survey businesses were generally consistent with expectations. As mentioned, SSR’s results included accrual adjustments resulting from personnel and inventory efficiencies recognized in the fourth quarter. As a result, SSR EBITDA margin of 35% during the fourth quarter was above the 31% achieved during the third quarter of 2022. Without the benefit of these releases, SSR's fourth quarter 2022 EBITDA margin would have been relatively consistent with the margin achieved in the prior quarter.

"Fourth quarter 2022 ROV days on hire declined 7% as compared to the third quarter 2022 with all of the decline coming from vessel-based days as a result of seasonality. Our fleet use during the quarter was 65% in drill support and 35% in vessel-based services, compared to 60% and 40%, respectively, during the third quarter. Fleet utilization declined to 62% in the fourth quarter of 2022 from 67% in the third quarter of 2022. Fourth quarter 2022 average ROV revenue per day on hire of $8,967 was 6% higher than in the third quarter of 2022.

"Manufactured Products fourth quarter 2022 revenue of $100 million was 7% higher than in the third quarter of 2022. Operating income of $6.1 million and operating income margin of 6% were sequentially higher due to favorable project mix. Our Manufactured Products backlog on December 31, 2022 was $467 million, compared to our September 30, 2022 backlog of $365 million. Our book-to-bill ratio was 1.39 for the full year of 2022, as compared with the trailing 12-month book-to-bill of 1.08 on September 30, 2022.

"Sequentially, our fourth quarter 2022 OPG operating income declined on lower revenue. Revenue was 20% lower primarily due to seasonality in the Gulf of Mexico (GoM). Fourth quarter 2022 operating income margin of 9% declined from 13% in the third quarter of 2022. This decline was due to lower-than-anticipated vessel utilization resulting from project schedules shifting into mid-2023 and higher-than-expected vessel demobilization expenses.

"IMDS fourth quarter 2022 operating income improved sequentially on 5% lower revenue. Operating income margin for the fourth quarter improved to 9% from 5% in the third quarter of 2022. The margin improvement was largely due to contract repricing and the benefit associated with efficient personnel management in the year.

"ADTech fourth quarter operating income declined from the third quarter of 2022 on a 7% increase in revenue. ADTech operating income margin declined as expected, to 11%, due to changes in project mix.

"At the corporate level, fourth quarter 2022 Unallocated Expenses of $33.6 million were higher than the third quarter of 2022 due to a combination of increased accruals for incentive-based compensation and increased information technology costs.

Full Year 2022 Results

"For the full year 2022, consolidated operating income improved significantly on higher revenue as compared to 2021 consolidated adjusted operating income. Our improved results in 2022 were due primarily to positive energy markets that spurred increased offshore activity in our SSR and OPG segments, which in turn resulted in improved pricing and increased utilization in the second half of the year. Impacts from the U.S. government’s Continuing Resolution in the early part of 2022 resulted in lower revenue and lower operating income from our ADTech segment.

"Compared to 2021, our 2022 consolidated revenue increased 11% to $2.1 billion, with revenue growth in our OPG, SSR, and Manufactured Products segments partially offset by revenue declines in our IMDS and ADTech segments. Consolidated 2022 operating income and adjusted EBITDA improved, with significant gains in our SSR and OPG segments being partially offset by declines in our ADTech, IMDS, and Manufactured Products segments. We generated $121 million in cash provided from operations and invested $81.0 million in capital expenditures. For the full year 2022, we generated $39.8 million of free cash flow and increased our cash balance by $30.6 million to $569 million.

Full Year 2023 Guidance

"Based on 2022 year-end backlog, the expected meaningful increase in backlog conversion, anticipated 2023 order intake, and current market fundamentals, we are projecting our 2023 consolidated revenue to grow by more than 10%, with increased revenue in each of our operating segments, led by Manufactured Products and SSR. We expect sequential improvement in our 2023 financial results based on our expectations for: higher operating income and higher margins in our SSR, OPG, and Manufactured Products segments; slightly higher operating income and stable margins in our ADTech segment; and relatively stable operating income and margins in our IMDS segment. For the full year 2023, we anticipate generating $260 million to $310 million of EBITDA, with the incremental improvement over 2022 coming primarily from our SSR and OPG segments. At the midpoint of this range, our 2023 EBITDA would represent a 23% increase over 2022 adjusted EBITDA. We anticipate our full year 2023 to yield positive free cash flow of $75 million to $125 million. Based on current market conditions, we expect good opportunities for improved pricing and margins in our energy-focused businesses and stable pricing and margins in our government-focused businesses.

"For SSR, our expectation for improved results is based on increased ROV days on hire, and higher tooling activity, minor favorable shifts in geographic mix, and continued pricing improvements. Survey results are projected to improve as well, with both geophysical and survey and positioning businesses seeing increased international activity. We expect revenue growth in the low-double-digit range and EBITDA margins to average in the low- to mid-30% range for the full year.

"We forecast Manufactured Products results to improve on a significant increase in revenue, primarily based on 2022 order intake in our energy businesses. Bidding activity in our energy businesses remains robust and we expect this to continue during 2023. We are seeing growing interest in our mobility solutions business as highlighted by our recently announced contracts to deliver 85 MaxMoverTM autonomous counterbalance forklift systems in 2023 and 2024, increasing activity from our mobility solutions businesses in 2023. We forecast Manufactured Products operating income margins to average in the mid-single-digit range for the year with the project mix within our umbilical business shifting to more traditional manufacturing activities.

"OPG operating results are forecast to improve in 2023 on a modest increase in revenue. These projections are based on improved vessel utilization in the Gulf of Mexico and increased international activity in installation, intervention and diving, most notably in the second and third quarters. Overall, we expect OPG operating income margins to average in the mid-teens range for the year.

"IMDS operating results are forecast to be relatively flat in 2023 on slightly higher revenue. We see global opportunities for contract renewals and growth, especially in areas where we believe we can leverage digital and robotic capabilities. Operating income margin is expected to remain in the mid-single-digit range for the year.

"Our 2023 ADTech revenue and operating results are expected to be higher than those in 2022. We anticipate growth in all three of our government-focused businesses which secured several key contract awards during the second half of 2022. Operating income margins are expected to average in the low-teens range for the year.

"For 2023, we anticipate Unallocated Expenses to average in the mid- to high-$30 million range per quarter.

"Considering our meaningful cash balance and rising interest rates, we forecast our 2023 interest expense, net of interest income, to decline to approximately $28 million. We expect our 2023 cash tax payments to be in the range of $60 million to $65 million.

First Quarter 2023 Guidance

"Given the higher cost of performing offshore work over the past several years, customers are increasingly planning their work to avoid periods of higher weather risk. As a result, we anticipate a first quarter seasonal impact, particularly in our OPG business. Considering this and anticipated project timing leading to higher levels of utilization in the second and third quarters, we are forecasting our first quarter 2023 adjusted EBITDA to be in the range of $40 million to $50 million. At the respective midpoints, our first quarter guidance represents a 43% increase over the comparable period in 2022 and is expected to represent a percentage of our annual EBITDA similar to the prior year. Sequentially, we project higher revenue and operating results in our Manufactured Products segment; lower revenue and operating results in our SSR, IMDS, and ADTech segments; and lower revenue and significantly lower operating results in our OPG segment.

Optimism with Continued Discipline

"Moving into 2023, our year-end backlog and positive market dynamics support growth in each of our segments and we are excited for the opportunity to further improve our financial performance. We continue to focus on growing our businesses and expanding our margins by increasing utilization and improving pricing. With this optimism comes our firm commitment to maintain our financial and capital discipline. We forecast our capital expenditures will total between $90 million to $110 million in 2023. Safety remains our top priority as we continue to focus on generating significant free cash flow, spending capital prudently to leverage our core competencies in new and existing markets, and managing our 2024 debt maturity. We believe that Oceaneering’s core robotics expertise positions our shareholders for strong returns through our participation in traditional and renewable energy markets, mobile robotics markets, and aerospace and defense markets."

This release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs, future expected business and financial performance and prospects of Oceaneering. More specifically, the forward-looking statements in this press release include the statements concerning Oceaneering’s: forecasted ranges for full year and first quarter 2023 consolidated EBITDA and adjusted EBITDA guidance ranges, full-year 2023 free cash flow generation, and capital expenditures; expectations regarding seasonal impacts to offshore activity in the first quarter 2023 and future project mix; expectations regarding market fundamentals’ impact on 2023 financial performance; backlog, backlog conversion, anticipated 2023 order intake, current market fundamentals, and vessel utilization, to the extent such items may be indicators of future revenue or profitability; estimated SSR fourth quarter 2022 EBITDA margin, if adjustments had been spread throughout 2022; forecasted range of first quarter 2023 consolidated EBITDA and revenue, and direction of each segment's revenue and operating results; forecasted range of first quarter 2023 Unallocated Expenses; forecasted guidance ranges for full-year 2023 cash income tax payments; anticipated sequentially comparative full-year 2023 activity and operating performance across each operating segment; anticipated outcomes from stated priorities and focus areas; including aspects of our business and financial strategy; belief that its core robotics expertise positions shareholders for strong returns; and characterization of market fundamentals, conditions and dynamics, offshore energy activity levels, outlook, performance, opportunities, results, and financials as positive, meaningful, improving, seasonal, strong, supportive, robust, significant, substantial, good, or healthy.

The forward-looking statements included in this release are based on our current expectations and are subject to certain risks, assumptions, trends, and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Among the factors that could cause actual results to differ materially include: factors affecting the level of activity in the oil and gas industry, including worldwide demand for and prices of oil and natural gas, oil and natural gas production growth and the supply and demand of offshore drilling rigs; actions by members of OPEC and other oil exporting countries; decisions about offshore developments to be made by oil and gas exploration, development and production companies; the use of subsea completions and our ability to capture associated market share; general economic and business conditions and industry trends; the strength of the industry segments in which we are involved; the continuing effects of the COVID-19 pandemic and variants thereof, and the governmental, customer, supplier, and other responses thereto; cancellations of contracts, change orders and other contractual modifications, force majeure declarations and the exercise of contractual suspension rights and the resulting adjustments to our backlog; collections from our customers; our future financial performance, including as a result of the availability, terms and deployment of capital; the consequences of significant changes in currency exchange rates; the volatility and uncertainties of credit markets; changes in tax laws, regulations and interpretation by taxing authorities; changes in, or our ability to comply with, other laws and governmental regulations, including those relating to the environment; the continued availability of qualified personnel; our ability to obtain raw materials and parts on a timely basis and, in some cases, from limited sources; operating risks normally incident to offshore exploration, development and production operations; hurricanes and other adverse weather and sea conditions; cost and time associated with drydocking of our vessels; the highly competitive nature of our businesses; adverse outcomes from legal or regulatory proceedings; the risks associated with integrating businesses we acquire; rapid technological changes; and social, political, military and economic situations in foreign countries where we do business and the possibilities of civil disturbances, war, other armed conflicts or terrorist attacks. For a more complete discussion of these and other risk factors, please see Oceaneering’s latest annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements. Except to the extent required by applicable law, Oceaneering undertakes no obligation to update or revise any forward-looking statement.

Oceaneering is a global technology company delivering engineered services and products and robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries.

For more information on Oceaneering, please visit www.oceaneering.com.

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec 31, 2022

 

Dec 31, 2021

 

 

 

 

 

 

 

(in thousands)

ASSETS

 

 

 

 

Current assets (including cash and cash equivalents of $568,745 and $538,114)

 

$

1,297,060

 

 

$

1,188,003

 

Net property and equipment

 

 

438,449

 

 

 

489,596

 

Other assets

 

 

296,174

 

 

 

285,260

 

Total Assets

 

$

2,031,683

 

 

$

1,962,859

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities

 

$

568,414

 

 

$

501,161

 

Long-term debt

 

 

700,973

 

 

 

702,067

 

Other long-term liabilities

 

 

236,492

 

 

 

248,607

 

Equity

 

 

525,804

 

 

 

511,024

 

Total Liabilities and Equity

 

$

2,031,683

 

 

$

1,962,859

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

Dec 31, 2022

 

Dec 31, 2021

 

Sep 30, 2022

 

Dec 31, 2022

 

Dec 31, 2021

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

Revenue

$

536,223

 

 

$

466,709

 

 

$

559,671

 

 

$

2,066,084

 

 

$

1,869,275

 

Cost of services and products

 

446,121

 

 

 

387,546

 

 

 

463,917

 

 

 

1,758,707

 

 

 

1,605,210

 

Gross margin

 

90,102

 

 

 

79,163

 

 

 

95,754

 

 

 

307,377

 

 

 

264,065

 

Selling, general and administrative expense

 

47,925

 

 

 

91,735

 

 

 

48,879

 

 

 

196,514

 

 

 

224,266

 

Income (loss) from operations

 

42,177

 

 

 

(12,572

)

 

 

46,875

 

 

 

110,863

 

 

 

39,799

 

Interest income

 

2,749

 

 

 

613

 

 

 

1,396

 

 

 

5,708

 

 

 

2,477

 

Interest expense

 

(9,601

)

 

 

(9,058

)

 

 

(9,552

)

 

 

(38,215

)

 

 

(38,810

)

Equity in income (losses) of unconsolidated affiliates

 

599

 

 

 

(507

)

 

 

496

 

 

 

1,707

 

 

 

594

 

Other income (expense), net

 

(816

)

 

 

(5,547

)

 

 

(1,222

)

 

 

(1,011

)

 

 

(9,769

)

Income (loss) before income taxes

 

35,108

 

 

 

(27,071

)

 

 

37,993

 

 

 

79,052

 

 

 

(5,709

)

Provision (benefit) for income taxes

 

11,980

 

 

 

11,742

 

 

 

19,690

 

 

 

53,111

 

 

 

43,598

 

Net Income (Loss)

$

23,128

 

 

$

(38,813

)

 

$

18,303

 

 

$

25,941

 

 

$

(49,307

)

 

 

 

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

101,597

 

 

 

99,799

 

 

 

101,310

 

 

 

101,447

 

 

 

99,706

 

Diluted earnings (loss) per share

$

0.23

 

 

$

(0.39

)

 

$

0.18

 

 

$

0.26

 

 

$

(0.49

)

 

 

 

 

 

 

 

 

 

 

The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations should be read in conjunction with the Company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

SEGMENT INFORMATION

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

Dec 31, 2022

 

Dec 31, 2021

 

Sep 30, 2022

 

Dec 31, 2022

 

Dec 31, 2021

 

 

($ in thousands)

Subsea Robotics

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

167,387

 

 

$

134,315

 

 

$

169,422

 

 

$

621,921

 

 

$

538,515

 

Gross margin

 

$

54,013

 

 

$

28,199

 

 

$

47,552

 

 

$

160,527

 

 

$

112,962

 

Operating income (loss)

 

$

43,689

 

 

$

21,012

 

 

$

37,069

 

 

$

118,248

 

 

$

76,874

 

Operating income (loss) %

 

 

26

%

 

 

16

%

 

 

22

%

 

 

19

%

 

 

14

%

ROV days available

 

 

23,000

 

 

 

23,021

 

 

 

23,000

 

 

 

91,250

 

 

 

91,242

 

ROV days utilized

 

 

14,350

 

 

 

12,747

 

 

 

15,408

 

 

 

56,231

 

 

 

53,113

 

ROV utilization

 

 

62

%

 

 

55

%

 

 

67

%

 

 

62

%

 

 

58

%

 

 

 

 

 

 

 

 

 

 

 

Manufactured Products

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

100,174

 

 

$

102,940

 

 

$

94,039

 

 

$

382,361

 

 

$

344,251

 

Gross margin

 

$

14,744

 

 

$

36,516

 

 

$

12,170

 

 

$

45,834

 

 

$

63,455

 

Operating income (loss)

 

$

6,132

 

 

$

(20,228

)

 

$

4,282

 

 

$

11,692

 

 

$

(15,876

)

Operating income (loss) %

 

 

6

%

 

 

(20

)%

 

 

5

%

 

 

3

%

 

 

(5

)%

Backlog at end of period

 

$

467,000

 

 

$

318,000

 

 

$

365,000

 

 

$

467,000

 

 

$

318,000

 

 

 

 

 

 

 

 

 

 

 

 

Offshore Projects Group

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

122,476

 

 

$

85,356

 

 

$

152,987

 

 

$

489,317

 

 

$

378,121

 

Gross margin

 

$

17,548

 

 

$

12,846

 

 

$

27,647

 

 

$

78,373

 

 

$

56,338

 

Operating income (loss)

 

$

10,745

 

 

$

6,754

 

 

$

20,310

 

 

$

49,256

 

 

$

31,197

 

Operating income (loss) %

 

 

9

%

 

 

8

%

 

 

13

%

 

 

10

%

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

Integrity Management & Digital Solutions

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

55,411

 

 

$

60,469

 

 

$

58,465

 

 

$

229,884

 

 

$

241,393

 

Gross margin

 

$

9,932

 

 

$

12,416

 

 

$

8,371

 

 

$

36,724

 

 

$

42,417

 

Operating income (loss)

 

$

4,866

 

 

$

6,015

 

 

$

3,091

 

 

$

14,901

 

 

$

18,572

 

Operating income (loss) %

 

 

9

%

 

 

10

%

 

 

5

%

 

 

6

%

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

Aerospace and Defense Technologies

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

90,775

 

 

$

83,629

 

 

$

84,758

 

 

$

342,601

 

 

$

366,995

 

Gross margin

 

$

16,402

 

 

$

15,863

 

 

$

19,431

 

 

$

68,447

 

 

$

82,595

 

Operating income (loss)

 

$

10,320

 

 

$

10,562

 

 

$

13,043

 

 

$

44,168

 

 

$

60,992

 

Operating income (loss) %

 

 

11

%

 

 

13

%

 

 

15

%

 

 

13

%

 

 

17

%

 

 

 

 

 

 

 

 

 

 

 

Unallocated Expenses

 

 

 

 

 

 

 

 

 

 

Gross margin

 

$

(22,537

)

 

$

(26,677

)

 

$

(19,417

)

 

$

(82,528

)

 

$

(93,702

)

Operating income (loss)

 

$

(33,575

)

 

$

(36,687

)

 

$

(30,920

)

 

$

(127,402

)

 

$

(131,960

)

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

536,223

 

 

$

466,709

 

 

$

559,671

 

 

$

2,066,084

 

 

$

1,869,275

 

Gross margin

 

$

90,102

 

 

$

79,163

 

 

$

95,754

 

 

$

307,377

 

 

$

264,065

 

Operating income (loss)

 

$

42,177

 

 

$

(12,572

)

 

$

46,875

 

 

$

110,863

 

 

$

39,799

 

Operating income (loss) %

 

 

8

%

 

 

(3

)%

 

 

8

%

 

 

5

%

 

 

2

%

 

The above Segment Information does not include adjustments for non-recurring transactions. See the tables below under the caption "Reconciliations of Non-GAAP to GAAP Financial Information" for financial measures that our management considers in evaluating our ongoing operations.


Contacts

Mark Peterson
Vice President, Corporate Development and Investor Relations
Oceaneering International, Inc.
713-329-4507
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  • Full year gross profit of $1.1 billion, up 38% vs prior year
  • Net income of $21 million for the quarter and $114 million for the year
  • GAAP diluted earnings per share of $0.33 for the quarter and $1.82 for the year
  • Adjusted diluted earnings per share of $0.54 for the quarter and $2.04 for the year, up 50% vs prior year
  • Full year Adjusted EBITDA increased 60% to $380 million vs prior year
  • Annual capital return to shareholders of nearly $80 million through share repurchases and dividends

MIAMI--(BUSINESS WIRE)--World Fuel Services Corporation (NYSE: INT) today reported financial results for the fourth quarter and full year 2022.


Results compared with the same period last year are as follows (unaudited - in millions, except per share data):

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2022

 

2021

 

Change

 

2022

 

2021

 

Change

Volume (1)

 

 

4,574.5

 

 

4,336.1

 

5

%

 

 

18,331.4

 

 

15,981.7

 

15

%

Revenue

 

$

13,877.7

 

$

9,942.7

 

40

%

 

 

59,043.1

 

 

31,337.0

 

88

%

Gross profit

 

 

282.4

 

 

215.2

 

31

%

 

 

1,089.1

 

 

788.2

 

38

%

Income from operations

 

 

78.8

 

 

32.3

 

144

%

 

 

273.2

 

 

142.6

 

92

%

Income from operations as a percentage of gross profit

 

 

28%

 

 

15%

 

 

 

 

25%

 

 

18%

 

 

Adjusted income from operations

 

 

80.3

 

 

35.4

 

127

%

 

 

275.8

 

 

160.4

 

72

%

Adjusted income from operations as a percentage of gross profit

 

 

28%

 

 

16%

 

 

 

 

25%

 

 

20%

 

 

Diluted earnings (loss) per common share

 

$

0.33

 

$

0.25

 

35

%

 

$

1.82

 

$

1.16

 

56

%

Adjusted diluted earnings (loss) per common share

 

$

0.54

 

$

0.28

 

93

%

 

$

2.04

 

$

1.36

 

50

%

(1)

Includes gallons and gallon equivalents, converted as described in the tables below.

 

“The adaptability of our diversified portfolio of complementary businesses enabled us to successfully navigate an increasingly turbulent market in 2022 to produce a solid full year result,” stated Michael J. Kasbar, chairman and chief executive officer. “We have established a strong foundation for ratable growth and will leverage our global expertise to provide an expanding suite of products and services, including our evolving sustainability offerings, to deliver long-term value to our customers, suppliers and shareholders.”

“In 2022, our Adjusted EBITDA improved significantly year-over-year,” said Ira M. Birns, executive vice president and chief financial officer. “Despite higher energy prices in 2022, our strong EBITDA performance further enhanced our liquidity profile which provides greater capacity to invest in growth opportunities, while also continuing to return capital to shareholders through share buybacks and dividends.”

Fourth Quarter 2022 Compared to 2021

Highlights

  • Revenue of $13.9 billion, an increase of 40% year-over-year
  • Gross profit of $282.4 million, an increase of 31% year-over-year
  • Net income of $20.9 million, an increase of 36% year-over-year
  • Adjusted EBITDA of $106.5 million, an increase of 93% year-over-year

Segment Profitability

  • Aviation – Gross profit of $110.6 million, an increase of 1% year-over-year with the benefit of volume increases principally offset by lower average margins, driven primarily by sales mix.
  • Land – Gross profit of $115.8 million, an increase of 54% year-over-year, principally attributable to the Flyers Energy acquisition and stronger performance in our North American fuels business as well as growth in our European power and sustainability businesses.
  • Marine – Gross profit of $56.0 million, an increase of 85% year-over-year, primarily driven by higher bunker fuel prices, interest rates and related market volatility.

Full Year 2022 Compared to 2021

Highlights

  • Revenue of $59.0 billion, an increase of 88% year-over-year
  • Gross profit of $1.1 billion, an increase of 38% year-over-year
  • Net income of $114.1 million, an increase of 55% year-over-year
  • Adjusted EBITDA of $380.3 million, an increase of 60% year-over-year

Segment Profitability

  • Aviation – Gross profit of $357.2 million, a decrease of 8% year-over-year, principally due to inventory losses driven by extreme backwardation experienced during the first half of 2022, together with the reduction in our government-related activity in Afghanistan, partially offset by profits from increased volume in our commercial, private and corporate aviation fueling activities.
  • Land – Gross profit of $475.9 million, an increase of 58% year-over-year, principally related to the Flyers Energy acquisition and stronger performance in our North American fuels business and our European power business, offset in part by the reduction in government-related activity in Afghanistan.
  • Marine – Gross profit of $256.0 million, an increase of 155% year-over-year, primarily attributable to the impact of higher bunker fuel prices and rising interest rates, leading to an increasingly constrained credit environment, as well as higher market volatility.

Earnings Conference Call

An investor conference call will be held today, February 23, 2023 at 5:00 PM Eastern Time to discuss fourth quarter and full year results. Participants can access the live webcast or participate by phone by visiting the company’s website at https://ir.wfscorp.com/events. To join the conference call by phone, participants must pre-register and will then receive dial-in information and a PIN enabling access to the call. A replay of the webcast will be available and can be accessed in the same manner as the live webcast on the Company’s website through March 9, 2023.

About World Fuel Services Corporation

Headquartered in Miami, Florida, World Fuel Services is a global energy management company involved in providing energy procurement and related services, as well as transaction and payment management solutions to commercial and industrial customers, principally in the aviation, marine and land transportation industries. World Fuel Services also offers natural gas and electricity, as well as energy advisory services, including programs for sustainability solutions and renewable energy alternatives. World Fuel Services sells fuel and delivers services to its clients at more than 8,000 locations in more than 200 countries and territories worldwide.

For more information, visit www.wfscorp.com.

Definitions and Non-GAAP Financial Measures

This press release makes reference to "Net income." Net income means Net income attributable to World Fuel as presented in the Statements of Income and Comprehensive Income.

This press release contains non-GAAP financial measures (collectively, the “Non-GAAP Measures”), including the following:

  • adjusted income from operations;
  • adjusted income from operations as a percentage of gross profit;
  • adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”);
  • adjusted net income attributable to World Fuel; and
  • adjusted diluted earnings per common share.

The Non-GAAP Measures exclude acquisition and divestiture related expenses, restructuring charges, impairments, gains or losses on the extinguishment of debt and gains or losses on sale of businesses, primarily because we do not believe they are reflective of our core operating results. Beginning with the period ending March 31, 2022, the Non-GAAP Measures exclude integration costs associated with our acquisitions and, since the fourth quarter of 2022, also exclude non-operating legal settlements related to a claim which resulted from a financing arrangement between a supplier and its bank. No changes to the comparable period were made as a result of the changes to the definition during the year ended December 31, 2022 as we did not incur integration costs or have non-operating settlements in 2021.

We believe that the Non-GAAP Measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful to investors to further aid in evaluating the ongoing financial performance of the Company and to provide greater transparency as supplemental information to our GAAP results.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In addition, our presentation of the Non-GAAP Measures may not be comparable to the presentation of such metrics by other companies.

Adjusted net income attributable to World Fuel is defined as net income (loss) attributable to World Fuel excluding the impact of acquisition and divestiture related expenses, restructuring charges, impairments, gains or losses on the extinguishment of debt, gains or losses on sale of businesses, integration costs, and non-operating legal settlements.

Adjusted diluted earnings per common share is computed by dividing adjusted net income attributable to World Fuel and available to common shareholders by the sum of the weighted average number of shares of common stock, stock units, restricted stock entitled to dividends not subject to forfeiture and vested restricted stock units outstanding during the period and the number of additional shares of common stock that would have been outstanding if our outstanding potentially dilutive securities had been issued.

Adjusted EBITDA is defined as net income (loss) excluding the impact of interest, income taxes, and depreciation and amortization, in addition to acquisition and divestiture related expenses, restructuring charges, impairments, gains or losses on sale of businesses, integration costs, and non-operating legal settlements. As the GAAP measure most comparable to Adjusted EBITDA is net income, the reconciliation was updated in the first quarter of 2022 to start with net income.

Adjusted income from operations is defined as Income from operations excluding the impact of acquisition and divestiture related expenses, restructuring charges, impairments, and integration costs. Adjusted income from operations as a percentage of gross profit is computed by dividing adjusted income from operations by gross profit.

Investors are encouraged to review the reconciliation of these Non-GAAP Measures to their most directly comparable GAAP financial measures in this press release and on our website.

Information Relating to Forward-Looking Statements

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our beliefs and expectations about our ability to leverage our global expertise to deliver long-term value to our customers, suppliers and shareholders, our expectations regarding returning capital to shareholders and our capacity for investment in growth opportunities. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the Company’s Securities and Exchange Commission (“SEC”) filings, including the Company’s most recent Annual Report on Form 10-K filed with the SEC. Actual results may differ materially from any forward-looking statements due to risks and uncertainties, including, but not limited to: customer and counterparty creditworthiness and our ability to collect accounts receivable and settle derivative contracts; sudden changes in the market price of fuel or extremely high or low fuel prices that continue for an extended period of time; adverse conditions in the industries in which our customers operate; our ability to effectively integrate and derive benefits from acquired businesses; our inability to effectively mitigate certain financial risks and other risks associated with derivatives and our physical fuel products; changes in the political, economic or regulatory environment generally and in the markets in which we operate, such as the current conflict in Eastern Europe; greenhouse gas reduction programs and other environmental and climate change legislation adopted by governments around the world, including cap and trade regimes, carbon taxes, increased efficiency standards and mandates for renewable energy, each of which could increase our operating and compliance costs as well as adversely impact our sales of fuel products; changes in credit terms extended to us from our suppliers; non-performance of suppliers on their sale commitments and customers on their purchase commitments; non-performance of third-party service providers; our ability to meet financial forecasts associated with our operating plan; lower than expected cash flows and revenues, which could impair our ability to realize the value of recorded intangible assets and goodwill; the availability of cash and sufficient liquidity to fund our working capital and strategic investment needs; currency exchange fluctuations; inflationary pressures and their impact on our customers or the global economy, including sudden or significant increases in interest rates or a global recession; failure to meet fuel and other product specifications agreed with our customers; environmental and other risks associated with the storage, transportation and delivery of petroleum products; reputational harm from adverse publicity arising out of spills, environmental contamination or public perception about the impacts on climate change by us or other companies in our industry; risks associated with operating in high-risk locations, including supply disruptions, border closures and other logistical difficulties that arise when working in these areas; uninsured or underinsured losses; seasonal variability that adversely affects our revenues and operating results, as well as the impact of natural disasters, such as earthquakes, hurricanes and wildfires; declines in the value and liquidity of cash equivalents and investments; relationships with our employees and potential labor disputes associated with employees covered by collective bargaining agreements; our failure to comply with restrictions and covenants governing our senior revolving credit facility and our senior term loan, including our financial covenants; the impact of cyber and other information security-related incidents; changes in U.S. or foreign tax laws, interpretations of such laws, changes in the mix of taxable income among different tax jurisdictions, or adverse results of tax audits, assessments, or disputes; our failure to generate sufficient future taxable income in jurisdictions with material deferred tax assets and net operating loss carryforwards; the impact of the U.K.'s exit from the European Union, known as Brexit, on our business, operations and financial condition; our ability to comply with U.S. and international laws and regulations, including those related to anti-corruption, economic sanction programs and environmental matters; global health developments and economic uncertainty following the COVID-19 pandemic; the outcome of litigation and other proceedings, including the costs associated in defending any actions; and other risks detailed from time to time in our SEC filings. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in expectations, future events, or otherwise, except as required by law.

-- Some amounts in this press release may not add due to rounding. All percentages have been calculated using unrounded amounts --

 
 

WORLD FUEL SERVICES CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited - In millions, except per share data)

 

 

 

December 31, 2022

 

December 31, 2021

Assets:

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

298.4

 

 

$

652.2

 

Accounts receivable, net of allowance for credit losses of $14.1 million and $26.1 million as of December 31, 2022 and 2021, respectively

 

 

3,294.1

 

 

 

2,355.3

 

Inventories

 

 

779.9

 

 

 

477.9

 

Prepaid expenses

 

 

83.6

 

 

 

59.2

 

Short-term derivative assets, net

 

 

302.1

 

 

 

169.2

 

Other current assets

 

 

479.9

 

 

 

305.9

 

Total current assets

 

 

5,238.1

 

 

 

4,019.7

 

Property and equipment, net

 

 

484.2

 

 

 

348.9

 

Goodwill

 

 

1,233.0

 

 

 

861.9

 

Identifiable intangible assets, net

 

 

336.2

 

 

 

189.1

 

Other non-current assets

 

 

873.2

 

 

 

522.8

 

Total assets

 

$

8,164.6

 

 

$

5,942.4

 

Liabilities:

 

 

 

 

Current liabilities:

 

 

 

 

Current maturities of long-term debt

 

$

15.8

 

 

$

30.6

 

Accounts payable

 

 

3,529.5

 

 

 

2,399.6

 

Short-term derivative liabilities, net

 

 

325.2

 

 

 

168.4

 

Customer deposits

 

 

268.9

 

 

 

205.5

 

Accrued expenses and other current liabilities

 

 

469.3

 

 

 

292.7

 

Total current liabilities

 

 

4,608.6

 

 

 

3,096.7

 

Long-term debt

 

 

829.9

 

 

 

478.1

 

Non-current income tax liabilities, net

 

 

212.7

 

 

 

213.9

 

Other long-term liabilities

 

 

522.5

 

 

 

236.8

 

Total liabilities

 

 

6,173.8

 

 

 

4,025.6

 

Commitments and contingencies

 

 

 

 

Equity:

 

 

 

 

World Fuel shareholders' equity:

 

 

 

 

Preferred stock, $1.00 par value; 0.1 shares authorized, none issued

 

 

 

 

 

 

Common stock, $0.01 par value; 100.0 shares authorized, 62.0 and 61.7 issued and outstanding as of December 31, 2022 and 2021, respectively

 

 

0.6

 

 

 

0.6

 

Capital in excess of par value

 

 

182.4

 

 

 

168.1

 

Retained earnings

 

 

1,962.5

 

 

 

1,880.6

 

Accumulated other comprehensive income (loss)

 

 

(160.6

)

 

 

(136.7

)

Total World Fuel shareholders' equity

 

 

1,984.9

 

 

 

1,912.7

 

Noncontrolling interest

 

 

5.9

 

 

 

4.1

 

Total equity

 

 

1,990.7

 

 

 

1,916.8

 

Total liabilities and equity

 

$

8,164.6

 

 

$

5,942.4

 

 
 
 
 

WORLD FUEL SERVICES CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited – In millions, except per share data) 

 

 

 

For the Three Months Ended

December 31,

 

For the Year Ended

December 31,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

 

$

13,877.7

 

 

$

9,942.7

 

 

$

59,043.1

 

 

$

31,337.0

 

Cost of revenue

 

 

13,595.4

 

 

 

9,727.5

 

 

 

57,954.1

 

 

 

30,548.8

 

Gross profit

 

 

282.4

 

 

 

215.2

 

 

 

1,089.1

 

 

 

788.2

 

Operating expenses:

 

 

 

 

 

 

 

 

Compensation and employee benefits

 

 

133.1

 

 

 

112.9

 

 

 

507.4

 

 

 

386.7

 

General and administrative

 

 

69.9

 

 

 

70.3

 

 

 

308.7

 

 

 

247.6

 

Asset impairments

 

 

0.6

 

 

 

 

 

 

0.6

 

 

 

4.7

 

Restructuring charges

 

 

 

 

 

(0.2

)

 

 

(0.8

)

 

 

6.6

 

Total operating expenses

 

 

203.5

 

 

 

182.9

 

 

 

815.8

 

 

 

645.6

 

Income from operations

 

 

78.8

 

 

 

32.3

 

 

 

273.2

 

 

 

142.6

 

Non-operating income (expenses), net:

 

 

 

 

 

 

 

 

Interest expense and other financing costs, net

 

 

(35.8

)

 

 

(11.0

)

 

 

(110.6

)

 

 

(40.2

)

Other income (expense), net

 

 

(15.6

)

 

 

(0.8

)

 

 

(17.5

)

 

 

(2.3

)

Total non-operating income (expense), net

 

 

(51.4

)

 

 

(11.8

)

 

 

(128.1

)

 

 

(42.5

)

Income (loss) before income taxes

 

 

27.4

 

 

 

20.5

 

 

 

145.1

 

 

 

100.0

 

Provision for income taxes

 

 

6.5

 

 

 

5.1

 

 

 

29.2

 

 

 

25.8

 

Net income (loss) including noncontrolling interest

 

 

20.9

 

 

 

15.5

 

 

 

115.9

 

 

 

74.2

 

Net income (loss) attributable to noncontrolling interest

 

 

 

 

 

0.1

 

 

 

1.7

 

 

 

0.5

 

Net income (loss) attributable to World Fuel

 

$

20.9

 

 

$

15.4

 

 

$

114.1

 

 

$

73.7

 

Basic earnings (loss) per common share

 

$

0.34

 

 

$

0.25

 

 

$

1.83

 

 

$

1.17

 

Basic weighted average common shares

 

 

62.1

 

 

 

62.2

 

 

 

62.3

 

 

 

62.9

 

Diluted earnings (loss) per common share

 

$

0.33

 

 

$

0.25

 

 

$

1.82

 

 

$

1.16

 

Diluted weighted average common shares

 

 

62.5

 

 

 

62.4

 

 

 

62.7

 

 

 

63.3

 

Comprehensive income:

 

 

 

 

 

 

 

 

Net income (loss) including noncontrolling interest

 

$

20.9

 

 

$

15.5

 

 

$

115.9

 

 

$

74.2

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

Foreign currency translation adjustments.

 

 

31.9

 

 

 

(3.1

)

 

 

(45.5

)

 

 

(13.7

)

Cash flow hedges, net of income tax expense (benefit) of ($0.6) and $3.4 for the three months ended December 31, 2022 and 2021, respectively, and net of income tax expense (benefit) of $7.6 and $3.3 for the year ended December 31, 2022 and 2021, respectively

 

 

(1.3

)

 

 

10.0

 

 

 

21.6

 

 

 

9.6

 

Total other comprehensive income (loss)

 

 

30.6

 

 

 

7.0

 

 

 

(24.0

)

 

 

(4.1

)

Comprehensive income (loss) including noncontrolling interest

 

 

51.5

 

 

 

22.4

 

 

 

91.9

 

 

 

70.1

 

Comprehensive income (loss) attributable to noncontrolling interest

 

 

 

 

 

0.1

 

 

 

1.7

 

 

 

0.5

 

Comprehensive income (loss) attributable to World Fuel

 

$

51.5

 

 

$

22.4

 

 

$

90.2

 

 

$

69.6

 

 
 
 
 

WORLD FUEL SERVICES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - In millions) 

 

 

 

For the Three Months Ended

December 31,

 

For the Year Ended

December 31,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss) including noncontrolling interest

 

$

20.9

 

 

$

15.5

 

 

$

115.9

 

 

$

74.2

 

Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Unrealized (gain) loss on derivatives

 

 

91.9

 

 

 

5.2

 

 

 

179.9

 

 

 

14.5

 

Depreciation and amortization

 

 

27.6

 

 

 

20.8

 

 

 

107.8

 

 

 

81.0

 

Provision for credit losses

 

 

1.6

 

 

 

3.4

 

 

 

7.7

 

 

 

6.3

 

Share-based payment award compensation costs

 

 

3.5

 

 

 

4.2

 

 

 

17.6

 

 

 

19.6

 

Deferred income tax expense (benefit)

 

 

(10.5

)

 

 

10.5

 

 

 

(18.5

)

 

 

(7.6

)

Unrealized foreign currency (gains) losses, net

 

 

6.0

 

 

 

2.8

 

 

 

21.7

 

 

 

(7.8

)

Loss (gain) on sale of business

 

 

7.7

 

 

 

(0.2

)

 

 

7.7

 

 

 

1.5

 

Other

 

 

(1.2

)

 

 

(2.5

)

 

 

(0.8

)

 

 

4.6

 

Changes in assets and liabilities, net of acquisitions and divestitures:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(72.1

)

 

 

(324.6

)

 

 

(870.7

)

 

 

(1,132.6

)

Inventories

 

 

(44.9

)

 

 

(42.7

)

 

 

(252.1

)

 

 

(135.2

)

Prepaid expenses

 

 

2.7

 

 

 

16.4

 

 

 

(25.2

)

 

 

(10.5

)

Short-term derivative assets, net

 

 

95.1

 

 

 

(28.5

)

 

 

(351.2

)

 

 

(89.5

)

Other current assets

 

 

(37.7

)

 

 

(78.1

)

 

 

(121.8

)

 

 

(32.1

)

Cash collateral with counterparties

 

 

(329.7

)

 

 

(84.9

)

 

 

(252.9

)

 

 

22.9

 

Other non-current assets

 

 

98.6

 

 

 

0.5

 

 

 

(133.9

)

 

 

(89.9

)

Accounts payable

 

 

249.8

 

 

 

359.8

 

 

 

1,060.7

 

 

 

1,143.8

 

Customer deposits

 

 

(59.5

)

 

 

43.9

 

 

 

67.3

 

 

 

52.0

 

Short-term derivative liabilities, net

 

 

(96.4

)

 

 

3.2

 

 

 

370.6

 

 

 

114.8

 

Accrued expenses and other current liabilities

 

 

17.8

 

 

 

24.1

 

 

 

78.2

 

 

 

64.2

 

Non-current income tax, net and other long-term liabilities

 

 

(62.3

)

 

 

1.1

 

 

 

130.6

 

 

 

79.0

 

Net cash provided by (used in) operating activities

 

 

(90.8

)

 

 

(50.1

)

 

 

138.5

 

 

 

173.2

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of business, net of cash acquired

 

 

(2.2

)

 

 

(37.1

)

 

 

(643.9

)

 

 

(37.1

)

Proceeds from sale of business, net of divested cash

 

 

 

 

 

 

 

 

 

 

 

25.0

 

Capital expenditures

 

 

(22.4

)

 

 

(10.8

)

 

 

(78.6

)

 

 

(39.2

)

Other investing activities, net

 

 

(1.2

)

 

 

(0.6

)

 

 

(2.5

)

 

 

(7.1

)

Net cash provided by (used in) investing activities

 

 

(25.7

)

 

 

(48.5

)

 

 

(724.9

)

 

 

(58.3

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

706.7

 

 

 

 

 

 

6,944.9

 

 

 

0.3

 

Repayments of debt

 

 

(572.5

)

 

 

(7.7

)

 

 

(6,611.2

)

 

 

(24.2

)

Dividends paid on common stock

 

 

(8.6

)

 

 

(7.5

)

 

 

(31.0

)

 

 

(28.7

)

Repurchases of common stock

 

 

 

 

 

(26.1

)

 

 

(48.7

)

 

 

(50.5

)

Other financing activities, net

 

 

(3.3

)

 

 

(2.0

)

 

 

(16.6

)

 

 

(10.5

)

Net cash provided by (used in) financing activities

 

 

122.3

 

 

 

(43.3

)

 

 

237.3

 

 

 

(113.6

)

Effect of exchange rate changes on cash and cash equivalents

 

 

12.3

 

 

 

(1.8

)

 

 

(4.7

)

 

 

(7.8

)

Net increase (decrease) in cash and cash equivalents

 

 

18.1

 

 

 

(143.7

)

 

 

(353.8

)

 

 

(6.6

)

Cash and cash equivalents, as of the beginning of the period

 

 

280.3

 

 

 

796.0

 

 

 

652.2

 

 

 

658.8

 

Cash and cash equivalents, as of the end of the period

 

$

298.4

 

 

$

652.2

 

 

$

298.4

 

 

$

652.2

 

 
 
 
 

WORLD FUEL SERVICES CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited - In millions, except per share data) 

Reconciliation of GAAP to Non-GAAP financial measures:

 

For the Three Months Ended December 31,

 

For the Year Ended December 31,

 

2022

 

2021

 

2022

 

2021

 

Net

Income

 

Earnings

per Share

 

Net

Income

 

Earnings

per Share

 

Net

Income

 

Earnings

per Share

 

Net

Income

 

Earnings

per Share

Net income and Diluted earnings per common share

 

$

20.9

 

 

$

0.33

 

 

$

15.4

 

 

$

0.25

 

 

$

114.1

 

 

$

1.82

 

 

$

73.7

 

 

$

1.16

 

Acquisition and divestiture related expenses

 

 

0.9

 

 

$

0.01

 

 

 

3.3

 

 

$

0.05

 

 

 

1.4

 

 

$

0.02

 

 

 

6.6

 

 

$

0.10

 

Loss (gain) on sale of business

 

 

7.7

 

 

$

0.12

 

 

 

(0.2

)

 

$

 

 

 

7.7

 

 

$

0.12

 

 

 

(0.9

)

 

$

(0.01

)

Asset impairments

 

 

0.6

 

 

$

0.01

 

 

 

 

 

$

 

 

 

0.6

 

 

$

0.01

 

 

 

4.7

 

 

$

0.07

 

Integration costs

 

 

 

 

$

 

 

 

 

 

$

 

 

 

1.4

 

 

$

0.02

 

 

 

 

 

$

 

Restructuring charges

 

 

 

 

$

 

 

 

(0.2

)

 

$

 

 

 

(0.8

)

 

$

(0.01

)

 

 

6.6

 

 

$

0.10

 

Non-operating legal settlements

 

 

6.5

 

 

$

0.10

 

 

 

 

 

$

 

 

 

6.5

 

 

$

0.10

 

 

 

 

 

$

 

Loss on debt extinguishment

 

 

 

 

$

 

 

 

 

 

$

 

 

 

0.7

 

 

$

0.01

 

 

 

 

 

$

 

Income tax impacts

 

 

(3.1

)

 

$

(0.05

)

 

 

(0.7

)

 

$

(0.01

)

 

 

(3.6

)

 

$

(0.06

)

 

 

(4.6

)

 

$

(0.07

)

Adjusted net income and Adjusted diluted earnings per common share

 

$

33.5

 

 

$

0.54

 

 

$

17.6

 

 

$

0.28

 

 

$

127.9

 

 

$

2.04

 

 

$

86.0

 

 

$

1.36

 


Contacts

Ira M. Birns, Executive Vice President & Chief Financial Officer
Glenn Klevitz, Vice President, Treasurer & Investor Relations
(305) 428-8000
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Read full story here

Promotions to new roles of President, Chief Product & Marketing Officer, Chief People Officer, and Chief Information Officer


CALGARY, Canada--(BUSINESS WIRE)--$BLN #TSX--Blackline Safety Corp. (TSX: BLN), a global leader in connected safety technology, today announced the following key promotions and changes to its executive leadership team:

  • Chief Growth Officer Sean Stinson is promoted to the additional role of President. With this appointment, Stinson will assume the leadership of software and professional service offerings, including Blackline Vision custom analytics. He will continue to lead all revenue generating activities, including sales, customer success and channel management. Stinson joined Blackline in 2013 and has held progressively senior roles at the Company, including sales, product, data services, user experience, client success and customer care. Prior to Blackline, Stinson held leadership roles in engineering and project management at BW Technologies and Honeywell.
  • Chief Marketing Officer Christine Gillies will expand her responsibilities to include Product Management in the newly expanded role of Chief Product & Marketing Officer. Having joined Blackline two years ago, Gillies has successfully led global marketing initiatives including brand, product marketing, demand generation and corporate communications. Prior to joining Blackline, Gillies developed a proven track record in product management at SMART Technologies and Thor Technologies (Oracle) and has established herself as a dedicated, market focused leader who is well positioned to continue to develop Blackline’s innovative lifesaving connected safety solutions.
  • Vice President of People Services Meaghan Whitney is promoted to the role of Chief People Officer. In her new role, Whitney will be responsible for all aspects of human resources, including health and safety, talent acquisition, employee engagement, benefits, and learning and development. She will work closely with the Executive team to develop and implement strategic initiatives to support the Company’s growth and culture. With more than 13 years of Human Resource experience, Whitney is a Chartered Professional in Human Resources and is a Certified Professional in the Society of Human Resource Management.
  • Co-founder, Brendon Cook, will take on the new role of Chief Information Officer. He will oversee information, computing and systems technologies across the company, with a focus on improving processes and efficiencies through technology. Working with compliance, security and privacy teams, Brendon will also support teams who focus on certifications and quality standards.

In addition to executive promotions, Blackline’s Chief Technology Officer (CTO) Brian Sweeney has departed the Company, effective February 23, 2023. With Sweeney’s departure, his duties and teams have been re-aligned within the new leadership structure. Specifically, CEO and Chair Cody Slater is taking direct oversight of the firmware and hardware teams, areas where Slater has more than 30 years of experience. The Company expects to incur modest one-time exit costs in the fiscal second quarter, with longer-term cost savings thereafter with the consolidation of the CTO role.

“I am delighted to announce the well-deserved promotions of Sean, Christine, Meaghan and Brendon,” said Slater. “As accomplished high-impact leaders in their respective fields with proven track records at Blackline, they bring a complementary combination of strategy, technological expertise and leadership skills. These promotions reflect our culture of rewarding and growing talent at Blackline and I look forward to their continued contributions to the Company.”

“In addition, I’d like to thank Brian for his contribution to Blackline over the last two years. We will continue to leverage the processes and discipline that Brian brought to the technology teams, while realigning the technology functions that Brian lead within our existing leadership team, including myself. We have a deep and strong culture of technological innovation and expect to continue our industry leadership in connected safety solutions as we progress on our focused path towards profitability,” added Slater.

About Blackline Safety

Blackline Safety is a technology leader driving innovation in the industrial workforce through IoT (Internet of Things). With connected safety devices and predictive analytics, Blackline Safety enables companies to drive towards zero safety incidents and improved operational performance. Blackline Safety provides wearable devices, personal and area gas monitoring, cloud-connected software and data analytics to meet demanding safety challenges and enhance overall productivity for organizations with coverage in more than 100 countries. Armed with cellular and satellite connectivity, Blackline Safety provides a lifeline to tens of thousands of people, having reported over 200 billion data-points and initiated over five million emergency alerts. For more information, visit BlacklineSafety.com and connect with us on Facebook, Twitter, LinkedIn and Instagram.


Contacts

Blackline Safety
Christine Gillies, CMO
This email address is being protected from spambots. You need JavaScript enabled to view it.
+1 403-629-9434

VERNAL, Utah--(BUSINESS WIRE)--Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or “Company”), a designer and manufacturer of drilling tool technologies, today announced that it will release its fourth quarter and full year 2022 financial results before the opening of financial markets on Friday, March 10 2023.


The Company will host a conference call and webcast that day to review the financial and operating results and discuss its corporate strategy and outlook. A question-and-answer session will follow.

Fourth Quarter and Full Year 2022 Conference Call
Friday, March 10 2023
10:00 a.m. Mountain Time (12:00 p.m. Eastern Time)
Phone: (201) 689-8470
Internet Webcast and accompanying slide presentation: www.sdpi.com

A telephonic replay will be available from 1:00 p.m. MT (3:00 p.m. ET) the day of the teleconference until Friday, March 17, 2023. To listen to the archived call, dial (412) 317-6671 and enter conference
ID number 13735236, or access the webcast replay via the Company’s website at www.sdpi.com, where a transcript will be posted once available.

About Superior Drilling Products, Inc.

Superior Drilling Products, Inc. is an innovative, cutting-edge drilling tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. The Company designs, manufactures, repairs and sells drilling tools. SDP drilling solutions include the patented Drill-N-Ream® well bore conditioning tool and the patented Strider™ oscillation system technology. In addition, SDP is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for a leading oil field service company. SDP operates a state-of-the-art drill tool fabrication facility, where it manufactures its solutions for the drilling industry, as well as customers’ custom products. The Company’s strategy for growth is to leverage its expertise in drill tool technology and innovative, precision machining in order to broaden its product offerings and solutions for the oil and gas industry.

Additional information about the Company can be found at: www.sdpi.com.


Contacts

For more information, contact investor relations:

Deborah K. Pawlowski
Kei Advisors LLC
(716) 843-3908
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Nearly 2,200 crew members continue to work; focusing on areas with the most significant damage 

Video footage of crews restoring outages: https://vimeo.com/801771302/8e4be1c7b6

CHICAGO--(BUSINESS WIRE)--#ComEd--ComEd has restored power to approximately 204,700 customers throughout the communities it serves, or more than 88 percent of customers affected by severe ice storms that moved through northern Illinois Wednesday and Thursday. Icy conditions followed by high winds damaged trees and equipment, causing power outages for approximately 231,000 customers.

Nearly 2,200 ComEd and contractor crew members have been working around the clock to restore power to customers. This includes 900 additional crew members from utilities from across the region who arrived Thursday to support ComEd’s safe and swift recovery efforts.

“We recognize any outage is frustrating to our customers and we thank them for their patience as crews work in challenging conditions to restore service as quickly as we can,” said Terence R. Donnelly, president and COO of ComEd. “This storm left significant damage to counties west of Chicago and along the Illinois-Wisconsin border. As we continue to restore power to customers in the hardest-hit communities, the safety of our customers and our crews remains our top priority.”

The combination of widespread ice and high winds has led to a multi-day recovery effort to restore all the customers affected by this storm. Layers of ice on trees, roads and equipment create additional hazards for utility crews leading to additional outages and longer restoration times well after the storm has passed. While a majority of impacted customers have been restored, a small number of customer outages in pockets with the most significant damage may last until late Saturday night, Feb. 25. As of 8 p.m. Thursday, Feb. 23, approximately 26,000 customers remain without service.

ComEd has been investing in power grid upgrades and tree trimming to minimize the impact of storms. Since smart grid upgrades began in 2011, ComEd has avoided more than 19 million power outages – saving more than $3.3 billion in outage-related costs – and improved overall reliability by more than 80 percent. In 2022, ComEd delivered its best reliability ever and was recognized with the ReliabilityOne Award for having the most resilient power grid in the U.S.

ComEd prioritizes attention on repairs that will bring back the greatest number of customers, and focuses on critical services, such as law enforcement, fire departments, hospitals and senior centers. Crews then move to restoration of individual outages.

The following tips and information encourage customers to stay safe following severe weather:

  • If you encounter a downed power line, immediately call ComEd at 1-800-EDISON-1 (1-800-334-7661).
  • Spanish-speaking customers should call 1-800-95-LUCES (1-800-955-8237).
  • Never approach a downed power line. Always assume a power line is energized and extremely dangerous.
  • Check on elderly and other family members and neighbors to ensure their safety and make alternate arrangements in the event of an outage.

Customers can sign up for Outage Alerts at ComEd.com/Alerts or text OUT to 26633 to report their outage and receive restoration information about when their power may be restored.

ComEd also offers a mobile app for iPhone® and Android™® smart phones that gives customers the ability to report power outages and manage their accounts. In addition, customers can report outages through ComEd’s Facebook and Twitter pages.

ComEd is a unit of Chicago-based Exelon Corporation (NASDAQ: EXC), a Fortune 200 energy company with approximately 10 million electricity and natural gas customers – the largest number of customers in the U.S. ComEd powers the lives of more than 4 million customers across northern Illinois, or 70 percent of the state’s population. For more information visit ComEd.com and connect with the company on Facebook, Twitter, Instagram and YouTube.


Contacts

ComEd Media Relations
​312-394-3500​

FOURTH QUARTER HIGHLIGHTS


  • Production of 78,854 Boe per day (59.5% oil), a 23% increase from the fourth quarter of the prior year.
  • GAAP cash flow from operations of $287.4 million. Excluding changes in net working capital, cash flow from operations was $234.4 million, an increase of 48% from the fourth quarter of the prior year.
  • Capital expenditures of $142.9 million, excluding previously-announced non-budgeted acquisitions.
  • Increased Free Cash Flow (non-GAAP) by 23% to $87.1 million from the fourth quarter of the prior year. See “Non-GAAP Financial Measures” below.
  • Closed on three major Permian acquisitions for approximately $400 million in total value.
  • Closed upsized MPDC acquisition in the Midland Basin in January 2023 for $320.0 million in cash.
  • Increased Revolving Credit Facility borrowing base to $1.6 billion from $1.3 billion.
  • Issued $500 million of 3.65% Senior Unsecured Convertible Notes due 2029.
  • Exercised the mandatory conversion rights under the Series A Preferred Stock.

SHAREHOLDER RETURN HIGHLIGHTS

  • Declared $0.34 per share common dividend for the first quarter of 2023, an increase of 13% from the fourth quarter of the prior year.
  • Declared $0.30 per share common dividend for the fourth quarter of 2022, an increase of 20% from the third quarter.
  • Repurchased $25.8 million principal amount of 8.125% Senior Unsecured Notes at an average price of 96.7% of par value during 2022.
  • Reduced common shares outstanding at year-end by approximately 5% through repurchases of common and preferred stock during 2022.

MINNEAPOLIS--(BUSINESS WIRE)--Northern Oil and Gas, Inc. (NYSE: NOG) (“NOG”) today announced the company’s fourth quarter and full year 2022 results and provided 2023 guidance.

MANAGEMENT COMMENTS

“2022 was a defining year for our Company,” commented Nick O’Grady, NOG’s Chief Executive Officer. “NOG generated record production, Adjusted EBITDA and Free Cash Flow enabling a 275% increase in its common dividend. The $927 million of M&A announced in 2022 will directly contribute to our estimated 23% production growth in 2023.”

Mr. O’Grady continued, “We start 2023 with increased scale and superior technical underwriting ability in the non-operated space. Through our consistent and disciplined strategy, we have established NOG as the preferred, most reliable and well-capitalized counterparty for both our operating and non-operating partners. The Company continues to develop a well-balanced portfolio of assets, delivering steady profit growth and shareholder returns, with significant opportunities for further growth still ahead of us.”

FINANCIAL RESULTS

Oil and natural gas sales for the fourth quarter were $445.6 million, an increase of 34% over the prior year period. Fourth quarter GAAP net income was $133.3 million or $1.63 per diluted share. Fourth quarter Adjusted Net Income was $122.5 million or $1.43 per diluted share, an increase of $35.5 million or $0.37 per diluted share over the prior year period. Adjusted EBITDA in the fourth quarter was $264.8 million, an increase of 51% over the prior year period. (See “Non-GAAP Financial Measures” below.)

Oil and natural gas sales for full year 2022 were $2.0 billion, an increase of 104% over full year 2021. Full year 2022 GAAP net income was $727.7 million or $8.92 per diluted share. Full year 2022 Adjusted Net Income was $565.6 million or $6.53 per diluted share. Full year 2022 Adjusted EBITDA was $1.1 billion, an increase of 100% over the prior year. (See “Non-GAAP Financial Measures” below.)

PRODUCTION

Fourth quarter production was 78,854 Boe per day, a 23% increase from the prior year period. Oil represented 59.5% of production in the fourth quarter. NOG had 19.9 net wells turned in line during the fourth quarter, compared to 16.2 net wells turned in line in the third quarter of 2022. NOG saw production outperform internal expectations for the first two months of the fourth quarter, but experienced significant weather related disruptions in December 2022. Full year 2022 production was 75,511 Boe per day, within NOG’s 2022 guidance.

PRICING

During the fourth quarter, NYMEX West Texas Intermediate (“WTI”) crude oil averaged $82.65 per Bbl, and NYMEX natural gas at Henry Hub averaged $6.10 per Mcf. NOG’s unhedged net realized oil price in the fourth quarter was $80.23 per Bbl, representing a $2.42 differential to WTI prices. NOG’s fourth quarter unhedged net realized gas price was $5.64 per Mcf, representing approximately 92% realizations compared with Henry Hub pricing.

For full year 2022, NOG’s realized oil price differential was $2.73 per Bbl. NOG’s full year unhedged net realized gas price was $7.43 per Mcf, representing approximately 113% realizations compared with Henry Hub pricing.

OPERATING COSTS

Lease operating costs were $73.0 million in the fourth quarter of 2022, or $10.06 per Boe, an increase of 6.9% on a per unit basis compared to the third quarter. The increase in unit costs was primarily driven by modest operating cost inflation, the natural aging of wells, and fixed cost absorption from the weather disruptions. NOG expects seasonal normalization for unit costs in 2023 as storm-related production was restored.

Fourth quarter general and administrative (“G&A”) costs totaled $15.0 million, which includes non-cash stock-based compensation. Cash G&A costs totaled $13.6 million or $1.87 per Boe in the fourth quarter, which included certain significant legal, advisory and diligence costs associated with the Permian acquisitions. Excluding approximately $6.3 million of transaction costs, remaining cash G&A was $7.3 million, or $1.01 per Boe.

CAPITAL EXPENDITURES AND ACQUISITIONS

Capital spending for the fourth quarter, excluding non-budgeted acquisitions, was $142.9 million, down approximately $9.6 million from the prior quarter. This was comprised of $118.3 million of organic drilling and completion (“D&C”) capital and $24.6 million of total acquisition spending, inclusive of ground game D&C spending. NOG had 19.9 net wells turned in line in the fourth quarter. Wells in process totaled 55.4 net wells as of December 31, 2022. On the ground game acquisition front, NOG closed on four transactions during the fourth quarter totaling 1.2 net wells and 127 net acres. Total 2022 capital expenditures, excluding non-budgeted acquisitions were $511.1 million, slightly above NOG’s guidance for 2022 driven by significant ground game opportunities executed and an acceleration of completion activity in the third and fourth quarters.

LIQUIDITY, CAPITAL RESOURCES, AND RECENT ACQUISITIONS

As of December 31, 2022, NOG had $2.5 million in cash and $319.0 million of borrowings outstanding on its revolving credit facility. NOG had total liquidity of $683.5 million as of December 31, 2022, consisting of cash and committed borrowing availability under the revolving credit facility. Additionally, NOG had $43.0 million in an escrow account as of December 31, 2022, as a deposit on the MPDC Mascot acquisition that was signed in October 2022 and closed in January 2023.

In October 2022, NOG executed a convertible senior debt offering. NOG issued $500.0 million principal amount of 3.625% Senior Unsecured Convertible Notes due 2029 (the “Convertible Notes”). NOG also purchased a forward “Capped Call” which boosted the conversion price to a 75% premium to the offering price, and additionally the Company repurchased 1.0 million shares of common stock simultaneously with the pricing of the offering. With the net proceeds from the offering, NOG retired debt under its existing revolving credit facility and, ultimately, closed on the subsequent acquisitions described below.

On January 5, 2023, NOG closed on its previously announced acquisition of non-operated interests in the Mascot Project from Midland Petro D.C. Partners, LLC (“MPDC”). At closing, NOG acquired a 39.958% working interest in the Mascot Project. The initial closing settlement was $320.0 million in cash, which included a $43.0 million deposit paid at signing in October 2022.

On December 16, 2022, NOG closed its previously announced acquisition of Delaware Basin properties from a private seller. The closing settlement was $131.6 million in cash.

On December 1, 2022, NOG closed its previously announced acquisition of properties from Alpha Energy Partners. The closing settlement was $155.1 million in cash.

On October 3, 2022, NOG closed its previously announced acquisition of non-operated properties in the Midland Basin. The closing settlement was $110.1 million in cash.

SHAREHOLDER RETURNS

In February 2023, NOG’s Board of Directors declared a regular quarterly cash dividend for NOG’s common stock of $0.34 per share for stockholders of record as of March 30, 2023, which will be paid on April 28, 2023. This represented a 13% increase from the fourth quarter.

In November 2022, NOG’s Board of Directors declared a regular quarterly cash dividend for NOG’s common stock of $0.30 per share for stockholders of record as of December 29, 2022, which was paid on January 31, 2023. This represented a 20% increase from the third quarter.

During the fourth quarter of 2022, the Company repurchased 1,103,178 shares of common stock at an average price of $29.92 per share. For the full year 2022, the Company repurchased 1.91 million common shares at an average price of $28.55 per share, for a total of $54.5 million. Additionally, the Company repurchased and retired $57.5 million of its Series A Perpetual Preferred Stock during 2022, with all remaining shares fully converted to common stock during the fourth quarter. The Preferred Stock repurchases reduced the fully diluted share count by 2.6 million shares, based on the final conversion ratio. On a combined basis, common and preferred stock repurchases reduced the fully diluted share count by 4.5 million shares in 2022, or approximately 5% of the current shares outstanding. The Company has $95.5 million of availability remaining on its existing common stock repurchase authorization.

As of December 31, 2022, the Company has retired $25.8 million of its 8.125% Senior Unsecured Notes (the “Notes”) at an average of 96.7% of par value. There were $724.2 million par value of Notes outstanding at year-end with $24.2 million of capacity remaining on the Company’s existing notes repurchase authorization.

2023 ANNUAL GUIDANCE

NOG anticipates approximately 91,000 - 96,000 Boe per day of production in 2023, an increase of approximately 23% at the midpoint from 2022 levels. NOG currently expects total capital spending in the range of $737 - $778 million for 2023 with approximately 46% of its 2023 budget to be spent on the Williston, 53% on the Permian, and de minimis capital on the Appalachian and other.

 

2023 Guidance

Annual Production (Boe per day)

91,000 - 96,000

Oil as a Percentage of Sales Volumes

62.0 - 64.0%

Total Capital Expenditures ($ in millions)

$737 - $778

Net Wells Added to Production

80 - 85

Operating Expenses and Differentials

 

Production Expenses (per Boe)

$9.25 - $9.50

Production Taxes (as a percentage of Oil & Gas Sales)

8.0 - 9.0%

Average Differential to NYMEX WTI (per Bbl)

($3.50) - ($4.50)

Average Realization as a Percentage of NYMEX Henry Hub (per Mcf)

75% - 85%

General and Administrative Expense (per Boe):

 

Non-Cash

$0.20 - $0.30

Cash (excluding transaction costs on non-budgeted acquisitions)

$0.80 - $0.90

PROVED RESERVES AS OF DECEMBER 31, 2022

Total proved reserves at December 31, 2022, increased 15% from year-end 2021 to 330.8 million barrels of oil equivalent (65% proved developed) with an associated pre-tax PV-10 value of $7.9 billion (71% proved developed) at SEC Pricing. These amounts do not include the MPDC Mascot transaction, which closed in January 2023. The reserves are calculated under SEC guidelines relating to both commodity price assumptions and a maximum five year drill schedule. See “Non-GAAP Financial Measures” below regarding PV-10 value.

 

SEC Pricing Proved Reserves(1)

 

Reserve Volumes

 

PV-10(3)

Reserve Category

Oil

(MBbls)

 

Natural Gas

(MMcf)

 

Total

(MBoe)(2)

 

%

 

Amount

(In thousands)

 

%

PDP Properties

109,498

 

604,303

 

210,215

 

64

 

$

5,434,411

 

69

PDNP Properties

3,128

 

7,552

 

4,387

 

1

 

 

159,541

 

2

PUD Properties

50,115

 

396,551

 

116,207

 

35

 

 

2,308,202

 

29

Total

162,741

 

1,008,406

 

330,809

 

100

 

$

7,902,154

 

100

____________

(1)

The SEC Pricing Proved Reserves table above values oil and natural gas reserve quantities and related discounted future net cash flows as of December 31, 2022, based on average prices of $93.67 per barrel of oil and $6.36 per MMbtu of natural gas. Under SEC guidelines, these prices represent the average prices per barrel of oil and per MMbtu of natural gas at the beginning of each month in the 12-month period prior to the end of the reporting period. The average resulting price used as of December 31, 2022, after adjustment to reflect applicable transportation and quality differentials, was $91.95 per barrel of oil and $7.43 per Mcf of natural gas.

(2)

Boe are computed based on a conversion ratio of one Boe for each barrel of oil and one Boe for every 6,000 cubic feet (i.e., 6 Mcf) of natural gas.

(3)

Pre-tax PV10%, or “PV-10,” may be considered a non-GAAP financial measure as defined by the SEC. See “Non-GAAP Financial Measures” below.

FOURTH QUARTER 2022 RESULTS

The following table sets forth selected operating and financial data for the periods indicated.

 

Three Months Ended

December 31,

 

 

2022

 

 

 

2021

 

 

% Change

Net Production:

 

 

 

 

 

Oil (Bbl)

 

4,314,547

 

 

 

3,492,556

 

 

24

%

Natural Gas and NGLs (Mcf)

 

17,640,202

 

 

 

14,458,119

 

 

22

%

Total (Boe)

 

7,254,581

 

 

 

5,902,243

 

 

23

%

 

 

 

 

 

 

Average Daily Production:

 

 

 

 

 

Oil (Bbl)

 

46,897

 

 

 

37,963

 

 

24

%

Natural Gas and NGL (Mcf)

 

191,741

 

 

 

157,153

 

 

22

%

Total (Boe)

 

78,854

 

 

 

64,155

 

 

23

%

 

 

 

 

 

 

Average Sales Prices:

 

 

 

 

 

Oil (per Bbl)

$

80.23

 

 

$

71.67

 

 

12

%

Effect of Gain (Loss) on Settled Derivatives on Average Price (per Bbl)

 

(12.03

)

 

 

(15.71

)

 

 

Oil Net of Settled Derivatives (per Bbl)

 

68.20

 

 

 

55.96

 

 

22

%

 

 

 

 

 

 

Natural Gas and NGLs (per Mcf)

 

5.64

 

 

 

5.68

 

 

(1

) %

Effect of Gain (Loss) on Settled Derivatives on Average Price (per Mcf)

 

(0.63

)

 

 

(1.33

)

 

 

Natural Gas Net of Settled Derivatives (per Mcf)

 

5.01

 

 

 

4.35

 

 

15

%

 

 

 

 

 

 

Realized Price on a Boe Basis Excluding Settled Commodity Derivatives

 

61.43

 

 

 

56.31

 

 

9

%

Effect of Gain (Loss) on Settled Commodity Derivatives on Average Price (per Boe)

 

(8.69

)

 

 

(12.60

)

 

 

Realized Price on a Boe Basis Including Settled Commodity Derivatives

 

52.74

 

 

 

43.72

 

 

21

%

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses (per Boe):

 

 

 

 

 

Production Expenses

$

10.06

 

 

$

8.57

 

 

17

%

Production Taxes

 

5.16

 

 

 

4.25

 

 

21

%

General and Administrative Expense

 

2.07

 

 

 

1.77

 

 

17

%

Depletion, Depreciation, Amortization and Accretion

 

10.66

 

 

 

7.25

 

 

47

%

 

 

 

 

 

 

Net Producing Wells at Period End

 

799.3

 

 

 

680.8

 

 

17

%

FULL YEAR 2022 RESULTS

The following table sets forth selected operating and financial data for the periods indicated.

 

Years Ended December 31,

 

 

2022

 

 

 

2021

 

 

% Change

Net Production:

 

 

 

 

 

Oil (Bbl)

 

16,090,072

 

 

 

12,288,358

 

 

31

%

Natural Gas and NGLs (Mcf)

 

68,829,142

 

 

 

44,073,941

 

 

56

%

Total (Boe)

 

27,561,596

 

 

 

19,634,015

 

 

40

%

 

 

 

 

 

 

Average Daily Production:

 

 

 

 

 

Oil (Bbl)

 

44,082

 

 

 

33,667

 

 

31

%

Natural Gas and NGL (Mcf)

 

188,573

 

 

 

120,751

 

 

56

%

Total (Boe)

 

75,511

 

 

 

53,792

 

 

40

%

 

 

 

 

 

 

Average Sales Prices:

 

 

 

 

 

Oil (per Bbl)

$

91.65

 

 

$

62.94

 

 

46

%

Effect of Gain (Loss) on Settled Oil Derivatives on Average Price (per Bbl)

 

(22.05

)

 

 

(10.17

)

 

 

Oil Net of Settled Oil Derivatives (per Bbl)

 

69.60

 

 

 

52.77

 

 

32

%

 

 

 

 

 

 

Natural Gas and NGLs (per Mcf)

 

7.43

 

 

 

4.57

 

 

63

%

Effect of Gain (Loss) on Settled Natural Gas Derivatives on Average Price (per Mcf)

 

(1.60

)

 

 

(0.92

)

 

 

Natural Gas and NGLs Net of Settled Natural Gas Derivatives (per Mcf)

 

5.83

 

 

 

3.65

 

 

60

%

 

 

 

 

 

 

Realized Price on a Boe Basis Excluding Settled Commodity Derivatives

 

72.05

 

 

 

49.66

 

 

45

%

Effect of Gain (Loss) on Settled Commodity Derivatives on Average Price (per Boe)

 

(16.52

)

 

 

(8.45

)

 

 

Realized Price on a Boe Basis Including Settled Commodity Derivatives

 

55.53

 

 

 

41.21

 

 

35

%

 

 

 

 

 

 

Costs and Expenses (per Boe):

 

 

 

 

 

Production Expenses

$

9.46

 

 

$

8.70

 

 

9

%

Production Taxes

 

5.74

 

 

 

3.92

 

 

46

%

General and Administrative Expenses

 

1.71

 

 

 

1.55

 

 

10

%

Depletion, Depreciation, Amortization and Accretion

 

9.12

 

 

 

7.17

 

 

27

%

 

 

 

 

 

 

Net Producing Wells at Period-End

 

799.3

 

 

 

680.8

 

 

17

%

HEDGING

NOG hedges portions of its expected production volumes to increase the predictability of its cash flow and to help maintain a strong financial position. The following table summarizes NOG’s open crude oil commodity derivative swap contracts scheduled to settle after December 31, 2022.

 

 

Crude Oil Commodity Derivative Swaps(1)

 

Crude Oil Commodity Derivative Collars - Calls and Puts

Contract
Period

 

Volume
(Bbls/Day)

 

Weighted
Average Price
($/Bbl)

 

Collar Call
Volume
(Bbls/Day)

 

Weighted
Average Collar
Call Prices
($/Bbl)

 

Collar Put
Volume
(Bbls/Day)

 

Weighted
Average Collar
Put Prices
($/Bbl)

2023(1):

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

22,450

 

$72.39

 

12,575

 

$92.00

 

11,075

 

$76.68

Q2

 

23,750

 

$75.85

 

11,500

 

$89.76

 

9,750

 

$73.85

Q3

 

19,375

 

$77.17

 

17,750

 

$87.63

 

13,750

 

$72.73

Q4

 

18,750

 

$76.10

 

18,350

 

$86.77

 

14,250

 

$72.63

2024(1):

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

7,075

 

$78.10

 

8,975

 

$85.82

 

9,375

 

$70.53

Q2

 

7,050

 

$77.04

 

11,125

 

$84.69

 

9,375

 

$69.60

Q3

 

6,875

 

$75.34

 

5,125

 

$84.87

 

5,375

 

$69.53

Q4

 

2,825

 

$69.63

 

4,875

 

$85.99

 

4,625

 

$69.86

2025(1):

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

 

 

6,950

 

$80.77

 

1,500

 

$70.00

Q2

 

 

 

4,400

 

$77.94

 

1,500

 

$70.00

Q3

 

 

 

3,750

 

$76.01

 

1,250

 

$70.00

Q4

 

 

 

3,250

 

$78.02

 

1,000

 

$70.00

____________

(1)

This table does not include volumes subject to swaptions and call options, which are crude oil derivative contracts NOG has entered into which may increase swapped volumes at the option of NOG’s counterparties. For additional information, see Note 12 to our financial statements included in our Form 10-K filed with the SEC for the year ended December 31, 2022.

The following table summarizes NOG’s open natural gas commodity derivative swap contracts scheduled to settle after December 31, 2022.

 

 

Natural Gas Commodity Derivative Swaps(1)

 

Natural Gas Commodity Derivative Collars

Contract
Period

 

Volume
(MMBTU/Day)

 

Weighted
Average Price
($/MMBTU)

 

Collar Call
Volume
(MMBTU/Day)

 

Weighted
Average Collar
Call Prices
($/MMBTU)

 

Collar Put
Volume
(MMBTU/Day)

 

Weighted
Average Collar
Put Prices
($/MMBTU)

 

 

 

 

 

 

 

 

 

 

 

 

 

2023(1):

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

80,944

 

$4.11

 

35,000

 

$6.96

 

35,000

 

$4.14

Q2

 

54,088

 

$4.59

 

52,500

 

$6.58

 

52,500

 

$4.19

Q3

 

53,500

 

$4.63

 

55,000

 

$6.67

 

55,000

 

$4.18

Q4

 

43,935

 

$4.66

 

68,315

 

$6.90

 

68,315

 

$4.13

2024(1):

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

30,000

 

$4.46

 

17,500

 

$7.92

 

17,500

 

$4.00

Q2

 

27,297

 

$4.07

 

2,500

 

$8.70

 

2,500

 

$4.00

Q3

 

27,000

 

$4.07

 

 

 

 

Q4

 

14,587

 

$4.05

 

 

 

 

____________

(1)

This table does not include basis swaps. For additional information, see Note 12 to our financial statements included in our Form 10-K filed with the SEC for the year ended December 31, 2022.

The following table presents NOG’s settlements on commodity derivative instruments and unsettled gains and losses on open commodity derivative instruments for the periods presented, which is included in the revenue section of NOG’s statement of operations:

 

Three Months Ended
December 31,

 

Twelve Months Ended
December 31,

(In thousands)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cash Received (Paid) on Settled Derivatives

$

(63,064

)

 

$

(74,353

)

 

$

(455,450

)

 

$

(165,823

)

Non-Cash Mark-to-Market Gain (Loss) on Derivatives

 

(12,203

)

 

 

61,170

 

 

 

40,187

 

 

 

(312,370

)

Gain (Loss) on Commodity Derivatives, Net

$

(75,268

)

 

$

(13,183

)

 

$

(415,262

)

 

$

(478,193

)

CAPITAL EXPENDITURES & DRILLING ACTIVITY

(In millions, except for net well data)

 

Three Months Ended
December 31, 2022

 

Year Ended
December 31, 2022

Capital Expenditures Incurred:

 

 

 

 

Organic Drilling and Development Capital Expenditures

 

$118.3

 

$411.0

Ground Game Drilling and Development Capital Expenditures

 

$21.2

 

$60.2

Ground Game Acquisition Capital Expenditures

 

$3.5

 

$39.8

Other

 

$2.3

 

$8.1

Non-Budgeted Acquisitions

 

$399.5

 

$955.3

 

 

 

 

 

Net Wells Turned In Line

 

19.9

 

56.8

 

 

 

 

 

Net Producing Wells (Period-End)

 

 

 

799.3

 

 

 

 

 

Net Wells in Process (Period-End)

 

 

 

55.4

Change in Wells in Process over Prior Period

 

(6.1)

 

12.9

 

 

 

 

 

Weighted Average AFE for Wells Elected to

 

$9.0

 

$8.0

Capitalized costs are a function of the number of net well additions during the period, and changes in wells in process from the prior year-end. Capital expenditures attributable to the increase of 12.9 in net wells in process during the year ended December 31, 2022 are reflected in the annual amounts incurred for drilling and development capital expenditures.

ACREAGE

As of December 31, 2022, NOG controlled leasehold of approximately 258,970 net acres in the Williston, Permian and Appalachian Basins in the United States, and approximately 89% of this total acreage position was developed, held by production, or held by operations.

FOURTH QUARTER 2022 EARNINGS RELEASE CONFERENCE CALL

In conjunction with NOG’s release of its financial and operating results, investors, analysts and other interested parties are invited to listen to a conference call with management on Friday, February 24, 2023 at 10:00 a.m. Central Time.

Those wishing to listen to the conference call may do so via the company’s website, www.northernoil.com, or by phone as follows:

Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=MiCttrvQ
Dial-In Number: (866) 373-3407 (US/Canada) and (412) 902-1037 (International)
Conference ID: 13736011 - Fourth Quarter and Year-End 2022 Earnings Conference Call
Replay Dial-In Number: (877) 660-6853 (US/Canada) and (201) 612-7415 (International)
Replay Access Code: 13736011 - Replay will be available through April 25, 2023

ABOUT NORTHERN OIL AND GAS

NOG is a company with a primary strategy of investing in non-operated minority working and mineral interests in oil & gas properties, with a core area of focus in the premier basins within the United States. More information about NOG can be found at www.northernoil.com.

SAFE HARBOR

This press release contains forward-looking statements regarding future events and future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). All statements other than statements of historical facts included in this release regarding NOG’s financial position, operating and financial performance, business strategy, dividend plans and practices, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this release, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about actual or potential future production and sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond NOG’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: changes in crude oil and natural gas prices, the pace of drilling and completions activity on NOG’s current properties and properties pending acquisition, infrastructure constraints and related factors affecting NOG’s properties; cost inflation or supply chain disruptions, ongoing legal disputes over and potential shutdown of the Dakota Access Pipeline; NOG’s ability to acquire additional development opportunities, potential or pending acquisition transactions, the projected capital efficiency savings and other operating efficiencies and synergies resulting from NOG’s acquisition transactions, integration and benefits of property acquisitions, or the effects of such acquisitions on NOG’s cash position and levels of indebtedness; changes in NOG’s reserves estimates or the value thereof, disruption to NOG’s business due to acquisitions and other significant transactions; general economic or industry conditions, nationally and/or in the communities in which NOG conducts business; changes in the interest rate environment, legislation or regulatory requirements; conditions of the securities markets; risks associated with NOG’s Convertible Notes, including the potential impact that the Convertible Notes may have NOG’s financial position and liquidity, potential dilution, and that provisions of the Convertible Notes could delay or prevent a beneficial takeover of NOG; the potential impact of the capped call transaction undertaken in tandem with the Convertible Notes issuance, including counterparty risk; increasing attention to environmental, social and governance matters; NOG’s ability to consummate any pending acquisition transactions; other risks and uncertainties related to the closing of pending acquisition transactions; NOG’s ability to raise or access capital; cyber-incidents could have a material adverse effect NOG’s business, financial condition or results of operations; changes in accounting principles, policies or guidelines; events beyond NOG’s control, including a global or domestic health crisis, acts of terrorism, political or economic instability or armed conflict in oil and gas producing regions; and other economic, competitive, governmental, regulatory and technical factors affecting NOG’s operations, products and prices.


Contacts

Evelyn Infurna
Vice President of Investor Relations
952-476-9800
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HALIFAX, Nova Scotia--(BUSINESS WIRE)--Today Emera (TSX: EMA) reported 2022 fourth quarter and annual financial results.


Highlights

  • Quarterly adjusted earnings per share (“EPS”) (1) of $0.93 increased $0.29 compared to $0.64 in Q4 2021, with $0.17 of the increase attributable to the recognition of a litigation award received in the quarter. Excluding the impact of the litigation award, quarterly adjusted EPS (1) increased $0.12 or 19% to $0.76 compared to $0.64 in Q4 2021. Quarterly reported EPS increased $0.56 to $1.80 in Q4 2022 compared to $1.24 in Q4 2021 primarily due to higher mark-to-market (“MTM”) gains in 2022.
  • For the year, adjusted EPS (1) of $3.20 increased $0.39 compared to $2.81 in 2021. Excluding the impact of the litigation award recognized in the fourth quarter, adjusted EPS (1) increased $0.22 or 8% to $3.03 compared to $2.81 in 2021. Year-to-date reported EPS increased by $1.58 to $3.56 from $1.98 in 2021 primarily due to MTM gains in 2022 versus losses in the prior year.
  • Adjusted EPS (1) contributions from regulated utilities increased 14% for the quarter and 12% year-to-date primarily driven by higher earnings contributions from Tampa Electric, New Mexico Gas (“NMGC”) and Peoples Gas (“PGS”), and a weaker Canadian dollar, partially offset by lower contributions from Nova Scotia Power (“NSPI”). Higher marketing and trading margin, at Emera Energy Services (“EES”), increased adjusted EPS(1) by $0.09 for the quarter and $0.06 year-to-date due to higher natural gas prices and volatility. These increases were partially offset by higher corporate costs, and a higher share count.
  • Deployed $2.6 billion of rate base investment in 2022, including the completion of the Big Bend modernization project safely, on time and on budget.

“In 2022, we continued our track record of delivering for both our customers and shareholders. We successfully executed a $2.6 billion capital plan focused on delivering cleaner and more reliable energy for our customers, leading to strong earnings growth and supporting continued dividend increases for our shareholders” said Scott Balfour, President and CEO of Emera Inc. “In 2023, we will remain focused on leading a balanced energy transition at a pace that is as cost effective as possible for customers and supports system reliability.”

Q4 2022 Financial Results

Q4 2022 reported net income was $483 million, or $1.80 per common share, compared with net income of $324 million, or $1.24 per common share, in Q4 2021. Reported net income included a $307 million after-tax MTM gain, primarily at EES, compared to a $156 million gain in Q4 2021 and a $73 million non-cash impairment charge related to Grand Bahama Power Company (“GBPC”).

Q4 2022 adjusted net income (1) was $249 million, or $0.93 per common share, compared with $168 million, or $0.64 per common share, in Q4 2021. The increase was primarily due to the litigation award in Q4 2022; higher earnings contribution from Tampa Electric, EES and NMGC; and the impact of a weaker Canadian dollar (“CAD”). These were partially offset by lower earnings contribution from NSPI and increased corporate operating, maintenance and general expenses (“OM&G”) due to the timing of long-term compensation and related hedges and higher corporate interest expense.

Annual Financial Results

2022 reported net income was $945 million or $3.56 per common share, compared with a net income of $510 million or $1.98 per common share in 2021. 2022 reported net income included a $175 million after-tax MTM gain primarily at EES, compared to $213 million loss in 2021, a $73 million non-cash impairment charge related to GBPC and $7 million of NSP Maritime Link Inc. (“NSPML”) unrecoverable costs.

2022 adjusted net income (1) was $850 million or $3.20 per common share, compared with $723 million or $2.81 per common share in 2021.

Growth in 2022 adjusted net income1 was primarily due to higher earnings contributions from Tampa Electric, EES, and PGS; the litigation award in Q4 2022; and the impact of a weaker CAD. These were partially offset by increased corporate OM&G due to the timing of long-term compensation and related hedges, higher corporate interest expense, realized gains on corporate FX hedges in 2021, increased preferred stock dividends and lower earnings contribution from NSPI.

The impact of the weakening CAD, partially offset by the unrealized losses on FX hedges increased reported net income by $42 million in Q4 2022 and $30 million for the year ended December 31 2022, compared to the same periods in 2021. Weakening of the CAD increased adjusted net income1 by $14 million in Q4 2022 and $28 million for the year ended December 31, 2022, compared to the same periods in 2021. The impacts of the weakening CAD include the realized impacts of corporate FX hedges in the Other segment.

(1) See “Non-GAAP Financial Measures and Ratios” noted below and “Segment Results and Non-GAAP Reconciliation” below for reconciliation to nearest GAAP measure.

Consolidated Financial Review

The following table highlights significant changes in adjusted net income attributable to common shareholders from 2021 to 2022.

 

 

 

 

 

 

For the

Three months ended

Year ended

millions of Canadian dollars

December 31

December 31

Adjusted net income – 2021 1,2

$

168

$

723

Operating Unit Performance

 

 

 

 

Increased earnings at Tampa Electric due to higher revenues as a result of rate increases effective January 2022, customer growth and the impact of a weakening CAD. These were partially offset by higher OM&G, increased interest expense and higher depreciation. Year-over-year also increased due to favourable weather

 

39

 

134

Increased earnings at EES due to favourable market conditions

 

21

 

21

Increased earnings at PGS due to higher off-system sales and customer growth, partially offset by higher OM&G. Year-over-year also increased due to reversal of accumulated depreciation as a result of the rate case settlement

 

2

 

10

Increased earnings at Seacoast due to commencement of a 34-year pipeline lateral lease in 2022

 

2

 

9

Increased earnings at NMGC due to higher asset optimization revenues. Year-over-year increased earnings were partially offset by higher OM&G and increased depreciation

 

11

 

4

Decreased earnings at NSPI due to higher OM&G primarily due to increased costs for storm restoration, information technology, power generation, regulatory affairs and higher depreciation. This was partially offset by higher sales volumes. Quarter-over-quarter also decreased due to unfavourable weather

 

(20)

 

(10)

Corporate

TGH award, after tax and legal costs, in Q4 2022

 

 

45

 

 

45

Increased income tax recovery primarily due to increased losses before provision for income taxes

 

17

 

34

Increased OM&G, pre-tax, due to the timing of long-term compensation and related hedges

 

(19)

 

(55)

Increased FX loss, pre-tax, primarily due to realized gains in 2021 on FX hedges entered into to hedge USD denominated operating unit earnings exposure

 

(9)

 

(28)

Increased interest expense, pre-tax, due to higher interest rates and increased total debt

 

(17)

 

(27)

Increased preferred stock dividends due to issuance of preferred shares in 2021

 

(2)

 

(13)

Other Variances

 

11

 

3

Adjusted net income – 2022 1,2

$

249

$

850

1 See “Non-GAAP Financial Measures and Ratios” noted below and “Segment Results and Non-GAAP Reconciliation" for reconciliation to nearest GAAP measure.
2 Excludes the effect of MTM adjustments, net of tax, impairment charges and the impact of the NSPML unrecoverable costs.

Segment Results and Non-GAAP Reconciliation

For the

 

Three months ended December 31

Year ended

December 31

millions of Canadian dollars (except per share amounts)

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Adjusted net income 1,2

 

 

 

 

 

 

 

 

Florida Electric Utility

$

124

$

85

$

596

$

462

Canadian Electric Utilities3

 

46

 

67

 

222

 

241

Gas Utilities and Infrastructure

 

72

 

55

 

221

 

198

Other Electric Utilities4

 

8

 

5

 

29

 

20

Other 5

 

(1)

 

(44)

 

(218)

 

(198)

Adjusted net income1,2

$

249

$

168

$

850

$

723

MTM gain, after-tax6

 

307

 

156

 

175

 

(213)

Impairment charge

 

(73)

 

-

 

(73)

 

-

NSPML unrecoverable costs7

 

-

 

-

 

(7)

 

-

Net income attributable to common shareholders

$

 

483

$

324

$

 

945

$

510

EPS (basic)

$

1.80

$

1.24

$

3.56

$

1.98

Adjusted EPS (basic) 1,2

$

0.93

$

0.64

$

3.20

$

2.81

1 See “Non-GAAP Financial Measures and Ratios” noted below.
2 Excludes the effect of MTM adjustments, GBPC impairment charge and the impact of the NSPML unrecoverable costs.
3 Excludes the impact of the NSPML unrecoverable costs.
4 Excludes the effect of the GBPC impairment charge and MTM adjustments.
5 Excludes the effect of MTM adjustments. Primarily due to timing of long-term compensation and related hedges, higher FX expense largely driven by realized gains on FX hedges in 2021, increased preferred share financing costs and higher interest expense.
6 Net of income tax expense of $124 million for the three months ended December 31, 2022 (2021 – $63 million expense) and $73 million expense for the year ended December 31, 2022 (2021 – $86 million recovery).
7 After-tax unrecoverable costs were recorded in “Income from equity investments” on Emera’s Consolidated Statements of Income

1 Non-GAAP Financial Measures and Ratios

Emera uses financial measures that do not have standardized meaning under USGAAP and may not be comparable to similar measures presented by other entities. Emera calculates the non-GAAP measures and ratios by adjusting certain GAAP measures for specific items. Management believes excluding these items better distinguishes the ongoing operations of the business. For further information on the non-GAAP financial measure, adjusted net income, and the non-GAAP ratio, adjusted earnings per common share – basic, refer to the "Non-GAAP Financial Measures and Ratios" section of the Emera’s Q4 2022 MD&A which is incorporated herein by reference and can be found on SEDAR at www.sedar.com. Reconciliation to the nearest GAAP measure is included in “Segment Results and Non-GAAP Reconciliation” above.

Forward Looking Information

This news release contains forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information requires Emera to make assumptions and is subject to inherent risks and uncertainties. These statements reflect Emera management’s current beliefs and are based on information currently available to Emera management. There is a risk that predictions, forecasts, conclusions and projections that constitute forward-looking information will not prove to be accurate, that Emera’s assumptions may not be correct and that actual results may differ materially from such forward-looking information. Additional detailed information about these assumptions, risks and uncertainties is included in Emera’s securities regulatory filings, including under the heading “Business Risks and Risk Management” in Emera’s annual Management’s Discussion and Analysis, and under the heading “Principal Risks and Uncertainties” in the notes to Emera’s annual and interim financial statements, which can be found on SEDAR at www.sedar.com.

Teleconference Call

The company will be hosting a teleconference today, Thursday, February 23, at 9:30 a.m. Atlantic (8:30 a.m. Eastern) to discuss the Q4 2022 financial results.

Analysts and other interested parties in North America are invited to participate by dialing 1-888-886-7786. International parties are invited to participate by dialing 1-416-764-8658. Participants should dial in at least 10 minutes prior to the start of the call. No pass code is required.

A live and archived audio webcast of the teleconference will be available on the Company's website, www.emera.com. A replay of the teleconference will be available on the Company’s website two hours after the conclusion of the call.

About Emera

Emera Inc. is a geographically diverse energy and services company headquartered in Halifax, Nova Scotia, with approximately $40 billion in assets and 2022 revenues of more than $7.5 billion. The company primarily invests in regulated electricity generation and electricity and gas transmission and distribution with a strategic focus on transformation from high carbon to low carbon energy sources. Emera has investments in Canada, the United States and in three Caribbean countries. Emera’s common and preferred shares are listed on the Toronto Stock Exchange and trade respectively under the symbol EMA, EMA.PR.A, EMA.PR.B, EMA.PR.C, EMA.PR.E, EMA.PR.F, EMA.PR.H, EMA.PR.J and EMA.PR.L. Depositary receipts representing common shares of Emera are listed on the Barbados Stock Exchange under the symbol EMABDR and on The Bahamas International Securities Exchange under the symbol EMAB. Additional information can be accessed at www.emera.com or at www.sedar.com.


Contacts

Emera Inc.
Investor Relations
Dave Bezanson, VP, Investor Relations & Pensions
902-474-2126
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Arianne Amirkhalkhali, Manager, Investor Relations
902-425-8130
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Media
902-222-2683
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