Chord Energy : 2025 1Q Non GAAP Reconciliation
CHRD
Published on 05/07/2025 at 04:12
The following are non-GAAP financial measures not prepared in accordance with GAAP that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company believes that the foregoing are useful supplemental measures that provide an indication of the results generated by the Company's principal business activities. However, these measures are not recognized by GAAP and do not have a standardized meaning prescribed by GAAP. Therefore, these measures may not be comparable to similar measures provided by other issuers. From time to time, the Company provides forward-looking forecasts of these measures; however, the Company is unable to provide a quantitative reconciliation of the forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measures because management cannot reliably quantify certain of the necessary components of such forward-looking GAAP measures. The reconciling items in future periods could be significant. To see how the Company reconciles its historical presentations of these non-GAAP financial measures to the most directly comparable GAAP measures, please visit the Investors-Documents & Disclosures-Non-GAAP Reconciliation page on the Company's website at https:// ir.chordenergy.com/non-gaap.
The Company defines Cash GPT as total GPT expenses less non-cash valuation charges on pipeline imbalances and non-cash mark-to-market adjustments on transportation contracts accounted for as derivative instruments. Cash GPT is not a measure of GPT expenses as determined by GAAP. Management believes that the presentation of Cash GPT provides useful additional information to investors and analysts to assess the cash costs incurred to market and transport the Company's commodities from the wellhead to delivery points for sale without regard to the change in value of its pipeline imbalances, which vary monthly based on commodity prices, and without regard to the non-cash mark-to-market adjustments on transportation contracts classified as derivative instruments.
The following table presents a reconciliation of the GAAP financial measure of GPT expenses to the non-GAAP financial measure of Cash GPT for the periods presented:
GPT
$ 73,314
$ 53,984
Pipeline imbalances
549
(194)
Loss on derivative transportation contract(1)
-
(3,229)
Cash GPT
$ 73,863
$ 50,561
(1) The Company had a buy/sell transportation contract that qualified as a derivative. The changes in the fair value of this contract was recorded to GPT expense. As of June 30, 2024, the term of this contract expired.
The Company defines Cash G&A as total G&A expenses less G&A expenses directly attributable to certain merger and acquisition activity, non-cash equity-based compensation expenses and other non-cash charges. Cash G&A is not a measure of G&A expenses as determined by GAAP. Management believes that the presentation of Cash G&A provides useful additional information to investors and analysts to assess the Company's operating costs in comparison to peers without regard to the aforementioned charges, which can vary substantially from company to company.
The following table presents a reconciliation of the GAAP financial measure of G&A expenses to the non-GAAP financial measure of Cash G&A for the periods presented:
General and administrative expenses
$ 38,377
$ 25,712
Merger costs(1)
(5,135)
(8,107)
Equity-based compensation expenses
(6,876)
(4,771)
Other non-cash adjustments
1,983
1,660
Cash G&A
$ 28,349
$ 14,494
(1) Includes costs directly attributable to the arrangement with Enerplus for the three months ended March 31, 2025 and 2024.
The Company defines Cash Interest as interest expense plus capitalized interest less amortization of deferred financing costs. Cash Interest is not a measure of interest expense as determined by GAAP. Management believes that the presentation of Cash Interest provides useful additional information to investors and analysts for assessing the interest charges incurred on the Company's debt to finance its operating activities and the Company's ability to maintain compliance with its debt covenants.
The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial measure of Cash Interest for the periods presented:
Interest expense
$ 15,818
$ 7,592
Capitalized interest
1,079
710
Amortization of deferred financing costs
(1,270)
(892)
Cash Interest
$ 15,627
$ 7,410
The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, depletion and amortization ("DD&A"), merger costs, exploration expenses, impairment expenses, loss on debt extinguishment and other similar non-cash or non-recurring charges. The Company defines Adjusted Free Cash Flow as Adjusted EBITDA less Cash Interest and E&P and other capital expenditures (excluding capitalized interest and acquisition capital).
Adjusted EBITDA and Adjusted Free Cash Flow are not measures of net income or cash flows from operating activities as determined by GAAP. Management believes that the presentation of Adjusted EBITDA and Adjusted Free Cash Flow provides useful additional information to investors and analysts for assessing the Company's results of operations, financial performance, ability to generate cash from its business operations without regard to its financing methods or capital structure and the Company's ability to maintain compliance with its debt covenants.
The following table presents reconciliations of the GAAP financial measures of net income and net cash provided by operating activities to the non-GAAP financial measures of Adjusted EBITDA and Adjusted Free Cash Flow for the periods presented:
Net income
$ 219,837
$ 199,353
Interest expense, net of capitalized interest
15,818
7,592
Loss on debt extinguishment
3,494
-
Income tax expense
73,165
57,539
Depreciation, depletion and amortization
349,809
168,894
Merger costs(1)
5,135
8,107
Exploration and impairment expenses
1,983
6,154
Gain on sale of assets
(5,516)
(1,302)
Net loss on derivative instruments
20,281
27,577
Realized loss on commodity price derivative contracts
(251)
(1,361)
Net (gain) loss from investment in unconsolidated affiliate
4,900
(16,296)
Distributions from investment in unconsolidated affiliate
2,359
2,287
Equity-based compensation expenses
6,876
4,771
Other non-cash adjustments
(2,379)
1,464
Adjusted EBITDA
695,511
464,779
Cash Interest
(15,627)
(7,410)
E&P and other capital expenditures
(355,439)
(257,748)
Cash taxes paid
(33,949)
-
Adjusted Free Cash Flow
$ 290,496
$ 199,621
Net cash provided by operating activities
$ 656,893
$ 406,698
Changes in working capital
(37,209)
9,847
Interest expense, net of capitalized interest
15,818
7,592
Current income tax expense
43,400
30,573
Merger costs(1)
5,135
8,107
Exploration expenses
1,982
2,235
Realized loss on commodity price derivative contracts
(251)
(1,361)
Distributions from investment in unconsolidated affiliate
2,359
2,287
Deferred financing costs amortization and other
9,763
(2,663)
Other non-cash adjustments
(2,379)
1,464
Adjusted EBITDA
695,511
464,779
Cash Interest
(15,627)
(7,410)
E&P and other capital expenditures
(355,439)
(257,748)
Cash taxes paid
(33,949)
-
Adjusted Free Cash Flow
$ 290,496
$ 199,621
(1) Includes costs directly attributable to the arrangement with Enerplus for the three months ended March 31, 2025 and 2024.
Adjusted Net Income and Adjusted Diluted Earnings Per Share are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income as net income after adjusting for (1) the impact of certain non-cash items, including non-cash changes in the fair value of derivative instruments, non-cash changes in the fair value of the Company's investment in an unconsolidated affiliate, impairment, loss on debt extinguishment and other similar non-cash charges (2) merger costs and (3) the impact of taxes based on an estimated tax rate applicable to those adjusting items in the same period. Adjusted Net Income is not a measure of net income as determined by GAAP.
The Company calculates earnings per share under the two-class method in accordance with GAAP. The two-class method is an earnings allocation formula that computes earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Adjusted Diluted Earnings Per Share is calculated as (i) Adjusted Net Income (ii) less distributed and undistributed earnings allocated to participating securities (iii) divided by the weighted average number of diluted shares outstanding for the periods presented.
The following table presents reconciliations of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted Net Income and the GAAP financial measure of diluted earnings per share to the non-GAAP financial measure of Adjusted Diluted Earnings Per Share for the periods presented:
Net income
$ 219,837
$ 199,353
Net loss on derivative instruments
20,281
27,577
Realized loss on commodity price derivative contracts
(251)
(1,361)
Net (gain) loss from investment in unconsolidated affiliate
4,900
(16,296)
Distributions from investment in unconsolidated affiliate
2,359
2,287
Impairment
1
3,919
Merger costs(1)
5,135
8,107
Gain on sale of assets, net
(5,516)
(1,302)
Amortization of deferred financing costs
1,270
892
Loss on debt extinguishment
3,494
-
Other non-cash adjustments
(2,379)
1,464
Tax impact(2)
(6,889)
(5,664)
Adjusted net income
242,242
218,976
Distributed and undistributed earnings allocated to participating securities
(1,351)
(856)
Adjusted net income attributable to common stockholders
$ 240,891
$ 218,120
Diluted earnings per share
$ 3.68
$ 4.66
Net loss on derivative instruments
0.34
0.65
Realized loss on commodity price derivative contracts
-
(0.03)
Net (gain) loss from investment in unconsolidated affiliate
0.08
(0.38)
Distributions from investment in unconsolidated affiliate
0.04
0.05
Impairment
-
0.09
Merger costs(1)
0.09
0.19
Gain on sale of assets, net
(0.09)
(0.03)
Amortization of deferred financing costs
0.02
0.02
Loss on debt extinguishment
0.06
-
Other non-cash adjustments
(0.04)
0.03
Tax impact(2)
(0.12)
(0.13)
Adjusted Diluted Earnings Per Share
4.06
5.12
Less: Distributed and undistributed earnings allocated to participating securities
(0.02)
(0.02)
Adjusted Diluted Earnings Per Share
$ 4.04
$ 5.10
Diluted weighted average shares outstanding (in thousands) 59,665 42,747
Tax rate applicable to adjustment items(2)23.5 % 22.4 %
Includes costs directly attributable to the arrangement with Enerplus for the three months ended March 31, 2025 and 2024.
The tax impact is computed by applying an estimated tax rate to the adjustments for certain non-cash and non-recurring items.
Disclaimer
Chord Energy Corporation published this content on May 06, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2025 at 07:46 UTC.