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On Thu, 18 Jul, 12:03 AM UTC
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[1]
Liberty Energy Inc. Announces Second Quarter 2024 Financial and Operational Results - Liberty Energy (NYSE:LBRT)
Liberty Energy Inc. LBRT "Liberty" or the "Company"))) announced today second quarter 2024 financial and operational results. Summary Results and Highlights Revenue of $1.2 billion, an 8% sequential increase Net income of $108 million, or $0.64 fully diluted earnings per share ("EPS") Adjusted EBITDA1 of $273 million, a 12% sequential increase Delivered 28% TTM Adjusted Pre-Tax Return on Capital Employed ("ROCE")2 Distributed $41 million to shareholders through share repurchases and cash dividends Repurchased and retired 0.8% of shares outstanding during the second quarter, and a cumulative 13.2% of shares outstanding since reinstatement of the repurchase program in July 2022 Demonstrated highest diesel displacement in Company history with natural gas-powered digiFleets and record gas substitution in dual fuel technologies Commenced Liberty Power Innovations ("LPI") operations in Colorado's DJ Basin Deployed Sentinel, Liberty's custom built AI empowered logistics software platform across all U.S. basins driving significant operational efficiencies Achieved record pumping efficiencies and safety performance "In the second quarter we delivered strong operating and financial performance and demonstrated the value of Liberty's competitive advantage," commented Chris Wright, Chief Executive Officer. "We delivered 8% and 12% sequential increases in revenue and Adjusted EBITDA1, respectively, while industry drilling and completions activity modestly softened over the same period. Record average daily pumping efficiencies and record safety performance, coupled with increased utilization of our fleets again underpinned strong results. Our company culture, long-term customer partnerships, innovative technologies, scale, and vertical integration allowed us to deliver a 28% Adjusted Pre-Tax Return on Capital Employed2 for the twelve months ended June 30, 2024." "We are focused on providing the most capital efficient, lowest emissions natural gas fueled technologies that maximize our returns while lowering the total delivered cost to our customers. Our displacement of diesel with natural gas is now at the highest level in Company history from the deployment of our natural gas fueled digiFleets and record gas substitution with our dual fuel equipment. Over the past year, we have increased dual fuel gas substitution levels by over 25%. We further enhanced our LPI portfolio with the commissioning of our operations in the DJ Basin, including compression capacity and logistics assets, and generated our first CNG sales in June serving Liberty fleets and customer drilling rigs," continued Mr. Wright. "The advanced Sentinel logistics platform drove significant operational efficiencies by harnessing real-time data and AI predictive analytics to precisely forecast proppant demand and optimize logistics. Since inception, utilizing the power of Sentinel, Liberty has reduced our already very low proppant delivery downtime by 90% and decreased the truck count and delivery time by approximately 35% each, lowering the cost for our customers to bring a barrel of oil to the market." "We have built a differential competitive position and are broadening our advantage with strategic investment in the complete value chain of next generation fleet technologies. LPI's power generation technology and fueling capabilities enhance our frac business and provide unique expansion opportunities. Our strong investment returns are supported by rising demand for cost effective, reliable, low emission, power dense solutions, with applications both within and outside the oilfield. We are positioned to drive higher earnings in the years ahead, while continuing to return capital to shareholders. Since the reinstatement of our capital returns program, we have now distributed $458 million to shareholders through the retirement of 13.2% of shares outstanding and quarterly cash dividends," continued Mr. Wright. Outlook Global oil and gas markets remain constructive on favorable multi-year market fundamentals, despite near term volatility in commodity prices. In June, a surprise decision from OPEC+ to gradually unwind voluntary production cuts beginning in October drove oil prices lower. Even then, prices were well above those supportive of attractive E&P returns and have since recovered on relatively balanced supply and demand dynamics owing to resilient global economic growth and rising demand for transportation fuels with the summer travel season underway. Natural gas prices saw a resurgence from early spring lows as gas producers reduced drilling and completions activity and curtailed production. Recent reinstatement of some curtailed production has moved prices downward but still above recent cycle lows. The commissioning of new LNG export facilities and continued growth in power demand are expected to drive higher natural gas demand, and eventually firmer natural gas prices. Frac industry trends have moderated marginally in recent periods, on the heels of slightly softer drilling activity in both oil and gas basins during the first half of 2024. Industry-wide completions activity has declined to levels consistent with approximately flat oil and gas production. For the U.S. to deliver rising oil and gas production levels, completions activity would need to rise. Signs of tightness for quality frac crews may emerge in 2025 on a demand pull for energy. The attrition of older equipment from higher intensity fracs with increased horsepower requirements is reducing the available horsepower to meet frac fleet demand. As E&P operators continue to consolidate, their efforts are focused on efficiency gains through partnership with service companies that can deliver superior performance and provide technical solutions to create value. Liberty's supply chain has continued to rapidly innovate and drive efficiencies in procurement, construction, and delivery of essential materials for frac operations. The resulting efficiencies benefit both our customers and our business. Liberty's digiTechnologies, LPI services, top-notch supply chain, scale and integrated services enable us to drive improvements across the board for our customers and grow our industry competitive advantage. "As we continue to execute on our returns-focused value proposition, we are well-positioned to deliver strong financial and operational performance. Our strategic investments deepen our portfolio of natural gas fueled pumping and power generation technologies, driving higher earnings and cash flow generation potential," commented Chris Wright. "Industry conditions moderated through the first half of the year. We now anticipate total North American completions activity will be modestly softer in the second half of the year due to budget front-loading by some operators. However, we expect Liberty's financial performance to be similar in the second half of the year compared to the first half," continued Mr. Wright. "We expect to continue investing in our competitively advantaged portfolio, deliver healthy free cash flow and return capital to our shareholders. We are committed to safely and responsibly creating long-term value for our partners and shareholders." Share Repurchase Program During the quarter ended June 30, 2024, Liberty repurchased and retired 1,319,885 shares of Class A common stock at an average of $22.39 per share, representing 0.8% of shares outstanding, for approximately $30 million. Liberty has cumulatively repurchased and retired 13.2% of shares outstanding at program commencement on July 25, 2022. Total remaining authorization for future common share repurchases is approximately $362 million. The shares may be repurchased from time to time in open market transactions, through block trades, in privately negotiated transactions, through derivative transactions or by other means in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management's assessment of the intrinsic value of the Company's common stock, the market price of the Company's common stock, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements, applicable legal requirements, and other considerations. The exact number of shares to be repurchased by the Company is not guaranteed, and the program may be suspended, modified, or discontinued at any time without prior notice. The Company expects to fund the repurchases by using cash on hand, borrowings under its revolving credit facility and expected free cash flow to be generated through the authorization period. Cash Dividend During the quarter ended June 30, 2024, the Company paid a quarterly cash dividend of $0.07 per share of Class A common stock, or approximately $12 million in aggregate to shareholders. On July 16, 2024, the Board declared a cash dividend of $0.07 per share of Class A common stock, to be paid on September 20, 2024 to holders of record as of September 6, 2024. Future declarations of quarterly cash dividends are subject to approval by the Board of Directors and to the Board's continuing determination that the declarations of dividends are in the best interests of Liberty and its stockholders. Future dividends may be adjusted at the Board's discretion based on market conditions and capital availability. Second Quarter Results For the second quarter of 2024, revenue was $1.2 billion, a decrease of 3% from $1.2 billion in the second quarter of 2023 and an increase of 8% from $1.1 billion in the first quarter of 2024. Net income (after taxes) totaled $108 million for the second quarter of 2024 compared to $153 million in the second quarter of 2023 and $82 million in the first quarter of 2024. Adjusted Net Income3 (after taxes) totaled $103 million for the second quarter of 2024 compared to $153 million in the second quarter of 2023 and $82 million in the first quarter of 2024. Adjusted EBITDA1 of $273 million for the second quarter of 2024 decreased 12% from $311 million in the second quarter of 2023 and increased 12% from $245 million in the first quarter of 2024. Fully diluted earnings per share of $0.64 for the second quarter of 2024 compared to $0.87 for the second quarter of 2023 and $0.48 for the first quarter of 2024. Adjusted Net Income per Diluted Share3 of $0.61 for the second quarter of 2024 compared to $0.87 for the second quarter of 2023 and $0.48 for the first quarter of 2024. Please refer to the tables at the end of this earnings release for a reconciliation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per Diluted Share (each, a non-GAAP financial measure) to the most directly comparable GAAP financial measures. Balance Sheet and Liquidity As of June 30, 2024, Liberty had cash on hand of $30 million, an increase from first quarter levels, and total debt of $147 million, drawn on the secured asset-based revolving credit facility. Total liquidity, including availability under the credit facility, was $271 million as of June 30, 2024. Conference Call Liberty will host a conference call to discuss the results at 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) on Thursday, July 18, 2024. Presenting Liberty's results will be Chris Wright, Chief Executive Officer, Ron Gusek, President, and Michael Stock, Chief Financial Officer. Individuals wishing to participate in the conference call should dial (833) 255-2827, or for international callers (412) 902-6704. Participants should ask to join the Liberty Energy call. A live webcast will be available at http://investors.libertyfrac.com. The webcast can be accessed for 90 days following the call. A telephone replay will be available shortly after the call and can be accessed by dialing (877) 344-7529, or for international callers (412) 317-0088. The passcode for the replay is 3223898. The replay will be available until July 25, 2024. About Liberty Liberty is a leading North American energy services firm that offers one of the most innovative suites of completion services and technologies to onshore oil and natural gas exploration and production companies. Liberty was founded in 2011 with a relentless focus on developing and delivering next generation technology for the sustainable development of unconventional energy resources in partnership with our customers. Liberty is headquartered in Denver, Colorado. For more information about Liberty, please contact Investor Relations at IR@libertyenergy.com. Non-GAAP Financial Measures This earnings release includes unaudited non-GAAP financial and operational measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per Diluted Share, and Adjusted Pre-Tax Return on Capital Employed ("ROCE"). We believe that the presentation of these non-GAAP financial and operational measures provides useful information about our financial performance and results of operations. We define Adjusted EBITDA as EBITDA adjusted to eliminate the effects of items such as non-cash stock-based compensation, new fleet or new basin start-up costs, fleet lay-down costs, gain or loss on the disposal of assets, unrealized gain or loss on investments, net, bad debt reserves, transaction and other costs, the loss or gain on remeasurement of liability under our tax receivable agreements, and other non-recurring expenses that management does not consider in assessing ongoing performance. Our board of directors, management, investors, and lenders use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, depletion, and amortization) and other items that impact the comparability of financial results from period to period. We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under U.S. GAAP. We present Adjusted Net Income and Adjusted Net Income per Diluted Share because we believe such measures provide useful information to investors regarding our operating performance by excluding the after-tax impacts of unusual or one-time benefits or costs, including items such as unrealized gain or loss on investments, net, transaction and other costs, and the loss or gain on remeasurement of liability under our tax receivable agreements, primarily because management views the excluded items to be outside of our normal operating results. We define Adjusted Net Income as net income after eliminating the effects of such excluded items and Adjusted Net Income per Diluted Share as Adjusted Net Income divided by the number of weighted average diluted shares outstanding. Management analyzes net income without the impact of these items as an indicator of performance to identify underlying trends in our business. We define ROCE as the ratio of adjusted pre-tax net income (adding back income tax and certain adjustments that include tax receivable agreement impacts, unrealized gain or loss on investments, net, and transaction and other costs, when applicable) for the twelve months ended June 30, 2024 to Average Capital Employed. Average Capital Employed is the simple average of total capital employed (both debt and equity) as of June 30, 2024 and June 30, 2023. ROCE is presented based on our management's belief that these non-GAAP measures are useful information to investors when evaluating our profitability and the efficiency with which management has employed capital over time. Our management uses ROCE for that purpose. ROCE is not a measure of financial performance under U.S. GAAP and should not be considered an alternative to net income, as defined by U.S. GAAP. Non-GAAP financial and operational measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP financial and operational measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with U.S. GAAP. See the tables entitled Reconciliation and Calculation of Non-GAAP Financial and Operational Measures for a reconciliation or calculation of the non-GAAP financial or operational measures to the most directly comparable GAAP measure. Forward-Looking and Cautionary Statements The information above includes "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. All statements, other than statements of historical facts, included herein concerning, among other things, statements about our expected growth from recent acquisitions, expected performance, future operating results, oil and natural gas demand and prices and the outlook for the oil and gas industry, future global economic conditions, the impact of the Russian invasion of Ukraine, the impact of announcements and changes in oil production quotas by oil exporting countries, improvements in operating procedures and technology, our business strategy and the business strategies of our customers, the deployment of fleets in the future, planned capital expenditures, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, return of capital to stockholders, business strategy and objectives for future operations, are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as "may," "expect," "estimate," "outlook," "project," "plan," "position," "believe," "intend," "achievable," "forecast," "assume," "anticipate," "will," "continue," "potential," "likely," "should," "could," and similar terms and phrases. However, the absence of these words does not mean that the statements are not forward-looking. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. The outlook presented herein is subject to change by Liberty without notice and Liberty has no obligation to affirm or update such information, except as required by law. These forward-looking statements represent our current expectations or beliefs concerning future events, and it is possible that the results described in this earnings release will not be achieved. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in Liberty's filings with the Securities and Exchange Commission. As a result of these factors, many of which are beyond our control, actual results may differ materially from those indicated or implied by such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for us to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in "Item 1A. Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on February 9, 2024, in our Form 10-Q for the quarter ended March 31, 2024 as filed with the SEC on April 18, 2024 and in our other public filings with the SEC. These and other factors could cause our actual results to differ materially from those contained in any forward-looking statements. View source version on businesswire.com: https://www.businesswire.com/news/home/20240717886985/en/ Market News and Data brought to you by Benzinga APIs
[2]
Liberty Energy Inc. Announces Second Quarter 2024 Financial and Operational Results
Liberty Energy Inc. (NYSE: LBRT; "Liberty" or the "Company") announced today second quarter 2024 financial and operational results. Summary Results and Highlights "In the second quarter we delivered strong operating and financial performance and demonstrated the value of Liberty's competitive advantage," commented Chris Wright, Chief Executive Officer. "We delivered 8% and 12% sequential increases in revenue and Adjusted EBITDA, respectively, while industry drilling and completions activity modestly softened over the same period. Record average daily pumping efficiencies and record safety performance, coupled with increased utilization of our fleets again underpinned strong results. Our company culture, long-term customer partnerships, innovative technologies, scale, and vertical integration allowed us to deliver a 28% Adjusted Pre-Tax Return on Capital Employed for the twelve months ended June 30, 2024." "We are focused on providing the most capital efficient, lowest emissions natural gas fueled technologies that maximize our returns while lowering the total delivered cost to our customers. Our displacement of diesel with natural gas is now at the highest level in Company history from the deployment of our natural gas fueled digiFleets and record gas substitution with our dual fuel equipment. Over the past year, we have increased dual fuel gas substitution levels by over 25%. We further enhanced our LPI portfolio with the commissioning of our operations in the DJ Basin, including compression capacity and logistics assets, and generated our first CNG sales in June serving Liberty fleets and customer drilling rigs," continued Mr. Wright. "The advanced Sentinel logistics platform drove significant operational efficiencies by harnessing real-time data and AI predictive analytics to precisely forecast proppant demand and optimize logistics. Since inception, utilizing the power of Sentinel, Liberty has reduced our already very low proppant delivery downtime by 90% and decreased the truck count and delivery time by approximately 35% each, lowering the cost for our customers to bring a barrel of oil to the market." "We have built a differential competitive position and are broadening our advantage with strategic investment in the complete value chain of next generation fleet technologies. LPI's power generation technology and fueling capabilities enhance our frac business and provide unique expansion opportunities. Our strong investment returns are supported by rising demand for cost effective, reliable, low emission, power dense solutions, with applications both within and outside the oilfield. We are positioned to drive higher earnings in the years ahead, while continuing to return capital to shareholders. Since the reinstatement of our capital returns program, we have now distributed $458 million to shareholders through the retirement of 13.2% of shares outstanding and quarterly cash dividends," continued Mr. Wright. Outlook Global oil and gas markets remain constructive on favorable multi-year market fundamentals, despite near term volatility in commodity prices. In June, a surprise decision from OPEC+ to gradually unwind voluntary production cuts beginning in October drove oil prices lower. Even then, prices were well above those supportive of attractive E&P returns and have since recovered on relatively balanced supply and demand dynamics owing to resilient global economic growth and rising demand for transportation fuels with the summer travel season underway. Natural gas prices saw a resurgence from early spring lows as gas producers reduced drilling and completions activity and curtailed production. Recent reinstatement of some curtailed production has moved prices downward but still above recent cycle lows. The commissioning of new LNG export facilities and continued growth in power demand are expected to drive higher natural gas demand, and eventually firmer natural gas prices. Frac industry trends have moderated marginally in recent periods, on the heels of slightly softer drilling activity in both oil and gas basins during the first half of 2024. Industry-wide completions activity has declined to levels consistent with approximately flat oil and gas production. For the U.S. to deliver rising oil and gas production levels, completions activity would need to rise. Signs of tightness for quality frac crews may emerge in 2025 on a demand pull for energy. The attrition of older equipment from higher intensity fracs with increased horsepower requirements is reducing the available horsepower to meet frac fleet demand. As E&P operators continue to consolidate, their efforts are focused on efficiency gains through partnership with service companies that can deliver superior performance and provide technical solutions to create value. Liberty's supply chain has continued to rapidly innovate and drive efficiencies in procurement, construction, and delivery of essential materials for frac operations. The resulting efficiencies benefit both our customers and our business. Liberty's digiTechnologies, LPI services, top-notch supply chain, scale and integrated services enable us to drive improvements across the board for our customers and grow our industry competitive advantage. "As we continue to execute on our returns-focused value proposition, we are well-positioned to deliver strong financial and operational performance. Our strategic investments deepen our portfolio of natural gas fueled pumping and power generation technologies, driving higher earnings and cash flow generation potential," commented Chris Wright. "Industry conditions moderated through the first half of the year. We now anticipate total North American completions activity will be modestly softer in the second half of the year due to budget front-loading by some operators. However, we expect Liberty's financial performance to be similar in the second half of the year compared to the first half," continued Mr. Wright. "We expect to continue investing in our competitively advantaged portfolio, deliver healthy free cash flow and return capital to our shareholders. We are committed to safely and responsibly creating long-term value for our partners and shareholders." Share Repurchase Program During the quarter ended June 30, 2024, Liberty repurchased and retired 1,319,885 shares of Class A common stock at an average of $22.39 per share, representing 0.8% of shares outstanding, for approximately $30 million. Liberty has cumulatively repurchased and retired 13.2% of shares outstanding at program commencement on July 25, 2022. Total remaining authorization for future common share repurchases is approximately $362 million. The shares may be repurchased from time to time in open market transactions, through block trades, in privately negotiated transactions, through derivative transactions or by other means in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management's assessment of the intrinsic value of the Company's common stock, the market price of the Company's common stock, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements, applicable legal requirements, and other considerations. The exact number of shares to be repurchased by the Company is not guaranteed, and the program may be suspended, modified, or discontinued at any time without prior notice. The Company expects to fund the repurchases by using cash on hand, borrowings under its revolving credit facility and expected free cash flow to be generated through the authorization period. Cash Dividend During the quarter ended June 30, 2024, the Company paid a quarterly cash dividend of $0.07 per share of Class A common stock, or approximately $12 million in aggregate to shareholders. On July 16, 2024, the Board declared a cash dividend of $0.07 per share of Class A common stock, to be paid on September 20, 2024 to holders of record as of September 6, 2024. Future declarations of quarterly cash dividends are subject to approval by the Board of Directors and to the Board's continuing determination that the declarations of dividends are in the best interests of Liberty and its stockholders. Future dividends may be adjusted at the Board's discretion based on market conditions and capital availability. Second Quarter Results For the second quarter of 2024, revenue was $1.2 billion, a decrease of 3% from $1.2 billion in the second quarter of 2023 and an increase of 8% from $1.1 billion in the first quarter of 2024. Net income (after taxes) totaled $108 million for the second quarter of 2024 compared to $153 million in the second quarter of 2023 and $82 million in the first quarter of 2024. Adjusted Net Income (after taxes) totaled $103 million for the second quarter of 2024 compared to $153 million in the second quarter of 2023 and $82 million in the first quarter of 2024. Adjusted EBITDAof $273 million for the second quarter of 2024 decreased 12% from $311 million in the second quarter of 2023 and increased 12% from $245 million in the first quarter of 2024. Fully diluted earnings per share of $0.64 for the second quarter of 2024 compared to $0.87 for the second quarter of 2023 and $0.48 for the first quarter of 2024. Adjusted Net Income per Diluted Share of $0.61 for the second quarter of 2024 compared to $0.87 for the second quarter of 2023 and $0.48 for the first quarter of 2024. Please refer to the tables at the end of this earnings release for a reconciliation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per Diluted Share (each, a non-GAAP financial measure) to the most directly comparable GAAP financial measures. Balance Sheet and Liquidity As of June 30, 2024, Liberty had cash on hand of $30 million, an increase from first quarter levels, and total debt of $147 million, drawn on the secured asset-based revolving credit facility. Total liquidity, including availability under the credit facility, was $271 million as of June 30, 2024. Conference Call Liberty will host a conference call to discuss the results at 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) on Thursday, July 18, 2024. Presenting Liberty's results will be Chris Wright, Chief Executive Officer, Ron Gusek, President, and Michael Stock, Chief Financial Officer. Individuals wishing to participate in the conference call should dial (833) 255-2827, or for international callers (412) 902-6704. Participants should ask to join the Liberty Energy call. A live webcast will be available at http://investors.libertyfrac.com. The webcast can be accessed for 90 days following the call. A telephone replay will be available shortly after the call and can be accessed by dialing (877) 344-7529, or for international callers (412) 317-0088. The passcode for the replay is 3223898. The replay will be available until July 25, 2024. About Liberty Liberty is a leading North American energy services firm that offers one of the most innovative suites of completion services and technologies to onshore oil and natural gas exploration and production companies. Liberty was founded in 2011 with a relentless focus on developing and delivering next generation technology for the sustainable development of unconventional energy resources in partnership with our customers. Liberty is headquartered in Denver, Colorado. For more information about Liberty, please contact Investor Relations at IR@libertyenergy.com. Non-GAAP Financial Measures This earnings release includes unaudited non-GAAP financial and operational measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per Diluted Share, and Adjusted Pre-Tax Return on Capital Employed ("ROCE"). We believe that the presentation of these non-GAAP financial and operational measures provides useful information about our financial performance and results of operations. We define Adjusted EBITDA as EBITDA adjusted to eliminate the effects of items such as non-cash stock-based compensation, new fleet or new basin start-up costs, fleet lay-down costs, gain or loss on the disposal of assets, unrealized gain or loss on investments, net, bad debt reserves, transaction and other costs, the loss or gain on remeasurement of liability under our tax receivable agreements, and other non-recurring expenses that management does not consider in assessing ongoing performance. Our board of directors, management, investors, and lenders use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, depletion, and amortization) and other items that impact the comparability of financial results from period to period. We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under U.S. GAAP. We present Adjusted Net Income and Adjusted Net Income per Diluted Share because we believe such measures provide useful information to investors regarding our operating performance by excluding the after-tax impacts of unusual or one-time benefits or costs, including items such as unrealized gain or loss on investments, net, transaction and other costs, and the loss or gain on remeasurement of liability under our tax receivable agreements, primarily because management views the excluded items to be outside of our normal operating results. We define Adjusted Net Income as net income after eliminating the effects of such excluded items and Adjusted Net Income per Diluted Share as Adjusted Net Income divided by the number of weighted average diluted shares outstanding. Management analyzes net income without the impact of these items as an indicator of performance to identify underlying trends in our business. We define ROCE as the ratio of adjusted pre-tax net income (adding back income tax and certain adjustments that include tax receivable agreement impacts, unrealized gain or loss on investments, net, and transaction and other costs, when applicable) for the twelve months ended June 30, 2024 to Average Capital Employed. Average Capital Employed is the simple average of total capital employed (both debt and equity) as of June 30, 2024 and June 30, 2023. ROCE is presented based on our management's belief that these non-GAAP measures are useful information to investors when evaluating our profitability and the efficiency with which management has employed capital over time. Our management uses ROCE for that purpose. ROCE is not a measure of financial performance under U.S. GAAP and should not be considered an alternative to net income, as defined by U.S. GAAP. Non-GAAP financial and operational measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP financial and operational measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with U.S. GAAP. See the tables entitled Reconciliation and Calculation of Non-GAAP Financial and Operational Measures for a reconciliation or calculation of the non-GAAP financial or operational measures to the most directly comparable GAAP measure. Forward-Looking and Cautionary Statements The information above includes "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. All statements, other than statements of historical facts, included herein concerning, among other things, statements about our expected growth from recent acquisitions, expected performance, future operating results, oil and natural gas demand and prices and the outlook for the oil and gas industry, future global economic conditions, the impact of the Russian invasion of Ukraine, the impact of announcements and changes in oil production quotas by oil exporting countries, improvements in operating procedures and technology, our business strategy and the business strategies of our customers, the deployment of fleets in the future, planned capital expenditures, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, return of capital to stockholders, business strategy and objectives for future operations, are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as "may," "expect," "estimate," "outlook," "project," "plan," "position," "believe," "intend," "achievable," "forecast," "assume," "anticipate," "will," "continue," "potential," "likely," "should," "could," and similar terms and phrases. However, the absence of these words does not mean that the statements are not forward-looking. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties. The outlook presented herein is subject to change by Liberty without notice and Liberty has no obligation to affirm or update such information, except as required by law. These forward-looking statements represent our current expectations or beliefs concerning future events, and it is possible that the results described in this earnings release will not be achieved. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in Liberty's filings with the Securities and Exchange Commission. As a result of these factors, many of which are beyond our control, actual results may differ materially from those indicated or implied by such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for us to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in "Item 1A. Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on February 9, 2024, in our Form 10-Q for the quarter ended March 31, 2024 as filed with the SEC on April 18, 2024 and in our other public filings with the SEC. These and other factors could cause our actual results to differ materially from those contained in any forward-looking statements.
[3]
Kinder Morgan Reports Second Quarter 2024 Financial Results
Kinder Morgan, Inc.'s (NYSE: KMI) board of directors today approved a cash dividend of $0.2875 per share for the second quarter ($1.15 annualized), payable on August 15, 2024 to stockholders of record as of the close of business on July 31, 2024. This dividend is a 2% increase over the second quarter of 2023. The company is reporting: "In the second quarter we enjoyed another solid quarter of strong operational and financial performance. We continued to internally fund high-quality capital projects while generating cash flow from operations of $1.7 billion and $1.1 billion in free cash flow (FCF) after capital expenditures. In addition, we were pleased to welcome Amy Chronis to her first KMI board of directors meeting. I am thrilled to have Amy join our talented board as we look forward to gaining the benefit of her financial acumen and robust knowledge of the energy industry," said Executive Chairman Richard D. Kinder. "As a leader in the midstream sector with an extensive, interconnected network of fee-based assets in the energy infrastructure space, we are proud to play a significant role in maintaining energy security for the United States. Furthermore, through our large and growing support to the liquified natural gas (LNG) sector, including our own export facility at Elba Island, we are also playing a key role in providing energy security to countries around the world," Kinder concluded. "The company had a solid second quarter on increased financial contributions from our Natural Gas Pipelines, Products Pipelines and Terminals business segments, with Adjusted EBITDA up 3% versus the second quarter of 2023," said Chief Executive Officer Kim Dang. "KMI's balance sheet remains very strong, as we ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 4.1 times," continued Dang. "Notwithstanding the current low-price environment for natural gas, the future looks very bright for our Natural Gas Pipelines business segment. As I noted last quarter, we expect demand for natural gas to grow substantially between now and 2030, led by more than a doubling of demand for LNG exports and an almost 50% increase in natural gas exports to Mexico. We are also anticipating significant new natural gas demand for electric generation associated with artificial intelligence operations, cryptocurrency mining, data centers and industrial re-shoring, which would be additive to the growth discussed above," continued Dang. "One example of opportunities to meet this demand growth is our announcement today of a successful binding open season on the proposed South System Expansion 4 Project designed to increase Southern Natural Gas (SNG) Pipeline's South Line capacity by approximately 1.2 billion cubic feet per day (Bcf/d). Once completed following receipt of all required approvals, the project will help meet growing power generation and local distribution company demand in the Southeast markets. "Our project backlog at the end of the second quarter was $5.2 billion, up from $3.3 billion in the first quarter of 2024. In calculating backlog Project EBITDA multiples, we exclude both the capital and EBITDA from our CO enhanced oil recovery projects and our gathering and processing (G&P) projects, where the earnings are more uneven than with our other business segments. To compensate for those uneven earnings profiles, we require higher return thresholds for those projects. We expect the remaining $3.8 billion of projects in the backlog to generate an average Project EBITDA multiple of approximately 5.4 times. "We are devoting approximately 80% of our project backlog to lower-carbon energy investments, including conventional natural gas, renewable natural gas (RNG), renewable diesel (RD), feedstocks associated with RD and sustainable aviation fuel (SAF), as well as carbon capture and sequestration," Dang concluded. 2024 Outlook For 2024, including contributions from the acquired STX Midstream assets, KMI budgeted net income attributable to KMI of $2.7 billion ($1.22 per share), up 15% versus 2023, and expects to declare dividends of $1.15 per share for 2024, a 2% increase from the dividends declared for 2023. The company also budgeted 2024 DCF of $5 billion ($2.26 per share), and Adjusted EBITDA of $8.16 billion, both up 8% versus 2023, and to end 2024 with a Net Debt-to-Adjusted EBITDA ratio of 3.9 times. The budget assumes average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of $82 per barrel and $3.50 per million British thermal unit (MMBtu), respectively, consistent with the published forward curve available during the company's annual budget process. "We expect to be roughly in-line with our budget for the full year (on budget or within 1-2% below). Lower than budgeted commodity prices, winter weather impacts and start-up delays on our RNG facilities as well as lower G&P volumes are expected to be offset or mostly offset by better than budgeted natural gas transport and storage contributions, better than expected contributions from our Terminals segment, and lower pension costs," said Dang. This press release includes Adjusted Net income attributable to KMI and DCF, in each case in the aggregate and per share, Adjusted Segment EBDA, Adjusted EBITDA, Net Debt, FCF, and Project EBITDA, all of which are non-GAAP financial measures. For descriptions of these non-GAAP financial measures and reconciliations to the most comparable measures prepared in accordance with generally accepted accounting principles, please see "Non-GAAP Financial Measures" and the tables accompanying our preliminary financial statements. Overview of Business Segments "The Natural Gas Pipelines business segment's financial performance in the second quarter of 2024 relative to the second quarter of 2023 benefited from higher contributions from our Texas Intrastate system as well as additional contributions from our STX Midstream acquisition, partially offset by lower contributions from our gathering systems due to asset divestitures and lower commodity prices," said KMI President Tom Martin. "Natural gas transport volumes were up slightly compared to the second quarter of 2023. Natural gas gathering volumes were up 10% from the second quarter of 2023, primarily from our Haynesville and Eagle Ford gathering systems. "Contributions from the Products Pipelines business segment were up compared to the second quarter of 2023 due to higher rates on existing assets and contributions from new capital projects. Total refined products volumes were up slightly and crude and condensate volumes were flat compared to the second quarter of 2023," Martin said. "Terminals business segment earnings were up compared to the second quarter of 2023. Our liquids terminals benefited from expansion projects placed in-service as well as higher rates and utilization at our New York Harbor hub facilities. Our bulk business benefited from increased coal, petroleum coke and soda ash volumes. Higher rates on our Jones Act tankers, which remain fully contracted under term charter agreements, also contributed to the segment's performance for the quarter," continued Martin. "CO business segment earnings, excluding the gain from a divestiture, were down compared to the second quarter of 2023, due to lower crude volumes, CO sales, and NGL volumes, down 13%, 8%, and 17% respectively, on a net-to-KMI basis compared to the second quarter of 2023. Crude volumes were down partially due to timing of the recovery of production at SACROC after an outage in 2023. Year-to-date crude volumes were down 8%. Price movements across the segment's three primary commodities netted out positively for the quarter versus the second quarter of 2023. The segment benefited from increased contributions from the Wink Pipeline, primarily due to a refinery outage in 2023. KMI's ETV contributions were higher due to RNG facilities being placed in service after the second quarter of 2023," said Martin. Kinder Morgan, Inc. (NYSE: KMI) is one of the largest energy infrastructure companies in North America. Access to reliable, affordable energy is a critical component for improving lives around the world. We are committed to providing energy transportation and storage services in a safe, efficient and environmentally responsible manner for the benefit of the people, communities and businesses we serve. We own an interest in or operate approximately 79,000 miles of pipelines, 139 terminals, 702 billion cubic feet of working natural gas storage capacity and have renewable natural gas generation capacity of approximately 6.1 Bcf per year with an additional 0.8 Bcf in development. Our pipelines transport natural gas, refined petroleum products, crude oil, condensate, CO, renewable fuels and other products, and our terminals store and handle various commodities including gasoline, diesel fuel, jet fuel, chemicals, metals, petroleum coke, and ethanol and other renewable fuels and feedstocks. Learn more about our work advancing energy solutions on the lower carbon initiatives page at www.kindermorgan.com. Please join Kinder Morgan, Inc. at 4:30 p.m. ET on Wednesday, July 17, at www.kindermorgan.com for a LIVE webcast conference call on the company's second quarter earnings. Non-GAAP Financial Measures As described in further detail below, our management evaluates our performance primarily using Net income attributable to Kinder Morgan, Inc. and Segment earnings before DD&A expenses, including amortization of excess cost of equity investments, (EBDA) along with the non-GAAP financial measures of Adjusted Net income attributable to Common Stock, and distributable cash flow (DCF), both in the aggregate and per share for each, Adjusted Segment EBDA, Adjusted Net income attributable to Kinder Morgan, Inc., Adjusted earnings before interest, income taxes, DD&A expenses, including amortization of excess cost of equity investments, (EBITDA) and Net Debt. Our non-GAAP financial measures described below should not be considered alternatives to GAAP net income attributable to Kinder Morgan, Inc. or other GAAP measures and have important limitations as analytical tools. Our computations of these non-GAAP financial measures may differ from similarly titled measures used by others. You should not consider these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. Management compensates for the limitations of our consolidated non-GAAP financial measures by reviewing our comparable GAAP measures identified in the descriptions of consolidated non-GAAP measures below, understanding the differences between the measures and taking this information into account in its analysis and its decision-making processes. Certain Items, as adjustments used to calculate our non-GAAP financial measures, are items that are required by GAAP to be reflected in net income attributable to Kinder Morgan, Inc., but typically either (1) do not have a cash impact (for example, unsettled commodity hedges and asset impairments), or (2) by their nature are separately identifiable from our normal business operations and in most cases are likely to occur only sporadically (for example, certain legal settlements, enactment of new tax legislation and casualty losses). (See the accompanying Tables 2, 3, 4, and 6.) We also include adjustments related to joint ventures (see "Amounts from Joint Ventures" below). The following table summarizes our Certain Items for the three and six months ended June 30, 2024 and 2023. Adjusted Net Income Attributable to Kinder Morgan, Inc. is calculated by adjusting net income attributable to Kinder Morgan, Inc. for Certain Items. Adjusted Net Income Attributable to Kinder Morgan, Inc. is used by us, investors and other external users of our financial statements as a supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations. We believe the GAAP measure most directly comparable to Adjusted Net Income Attributable to Kinder Morgan, Inc. is net income attributable to Kinder Morgan, Inc. (See the accompanying Tables 1 and 2.) Adjusted Net Income Attributable to Common Stock and Adjusted EPS is calculated by adjusting Net income attributable to Kinder Morgan, Inc., the most comparable GAAP measure, for Certain Items, and further for net income allocated to participating securities and adjusted net income in excess of distributions for participating securities. We believe Adjusted Net Income Attributable to Common Stock allows for calculation of adjusted earnings per share (Adjusted EPS) on the most comparable basis with earnings per share, the most comparable GAAP measure to Adjusted EPS. Adjusted EPS is calculated as Adjusted Net Income Attributable to Common Stock divided by our weighted average shares outstanding. Adjusted EPS applies the same two-class method used in arriving at basic earnings per share. Adjusted EPS is used by us, investors and other external users of our financial statements as a per-share supplemental measure that provides decision-useful information regarding our period-over-period performance and ability to generate earnings that are core to our ongoing operations. (See the accompanying Table 2.) DCF is calculated by adjusting net income attributable to Kinder Morgan, Inc. for Certain Items, and further for DD&A and amortization of excess cost of equity investments, income tax expense, cash taxes, sustaining capital expenditures and other items. We also adjust amounts from joint ventures for income taxes, DD&A, cash taxes and sustaining capital expenditures (see "Amounts from Joint Ventures" below). DCF is a significant performance measure used by us, investors and other external users of our financial statements to evaluate our performance and to measure and estimate the ability of our assets to generate economic earnings after paying interest expense, paying cash taxes and expending sustaining capital. DCF provides additional insight into the specific costs associated with our assets in the current period and facilitates period-to-period comparisons of our performance from ongoing business activities. DCF is also used by us, investors, and other external users to compare the performance of companies across our industry. DCF per share serves as the primary financial performance target for purposes of annual bonuses under our annual incentive compensation program and for performance-based vesting of equity compensation grants under our long-term incentive compensation program. DCF should not be used as an alternative to net cash provided by operating activities computed under GAAP. We believe the GAAP measure most directly comparable to DCF is net income attributable to Kinder Morgan, Inc. DCF per share is DCF divided by average outstanding shares, including restricted stock awards that participate in dividends. (See the accompanying Table 2.) Adjusted Segment EBDA is calculated by adjusting segment earnings before DD&A and amortization of excess cost of equity investments, general and administrative expenses and corporate charges, interest expense, and income taxes (Segment EBDA) for Certain Items attributable to the segment. Adjusted Segment EBDA is used by management in its analysis of segment performance and management of our business. We believe Adjusted Segment EBDA is a useful performance metric because it provides management, investors and other external users of our financial statements additional insight into performance trends across our business segments, our segments' relative contributions to our consolidated performance and the ability of our segments to generate earnings on an ongoing basis. Adjusted Segment EBDA is also used as a factor in determining compensation under our annual incentive compensation program for our business segment presidents and other business segment employees. We believe it is useful to investors because it is a measure that management uses to allocate resources to our segments and assess each segment's performance. (See the accompanying Table 4.) Adjusted EBITDA is calculated by adjusting net income attributable to Kinder Morgan, Inc. for Certain Items and further for DD&A and amortization of excess cost of equity investments, income tax expense and interest. We also include amounts from joint ventures for income taxes and DD&A (see "Amounts from Joint Ventures" below). Adjusted EBITDA (on a rolling 12-months basis) is used by management, investors and other external users, in conjunction with our Net Debt (as described further below), to evaluate our leverage. Management and external users also use Adjusted EBITDA as an important metric to compare the valuations of companies across our industry. Our ratio of Net Debt-to-Adjusted EBITDA is used as a supplemental performance target for purposes of our annual incentive compensation program. We believe the GAAP measure most directly comparable to Adjusted EBITDA is net income attributable to Kinder Morgan, Inc. (See the accompanying Tables 3 and 6.) Amounts from Joint Ventures - Certain Items, DCF and Adjusted EBITDA reflect amounts from unconsolidated joint ventures (JVs) and consolidated JVs utilizing the same recognition and measurement methods used to record "Earnings from equity investments" and "Noncontrolling interests (NCI)," respectively. The calculations of DCF and Adjusted EBITDA related to our unconsolidated and consolidated JVs include the same items (DD&A and income tax expense, and for DCF only, also cash taxes and sustaining capital expenditures) with respect to the JVs as those included in the calculations of DCF and Adjusted EBITDA for our wholly-owned consolidated subsidiaries; further, we remove the portion of these adjustments attributable to non-controlling interests. (See Tables 2, 3, and 6.) Although these amounts related to our unconsolidated JVs are included in the calculations of DCF and Adjusted EBITDA, such inclusion should not be understood to imply that we have control over the operations and resulting revenues, expenses or cash flows of such unconsolidated JVs. Net Debt is calculated by subtracting from debt (1) cash and cash equivalents, (2) debt fair value adjustments, and (3) the foreign exchange impact on Euro-denominated bonds for which we have entered into currency swaps to convert that debt to U.S. dollars. Net Debt, on its own and in conjunction with our Adjusted EBITDA (on a rolling 12-months basis) as part of a ratio of Net Debt-to-Adjusted EBITDA, is a non-GAAP financial measure that is used by management, investors and other external users of our financial information to evaluate our leverage. Our ratio of Net Debt-to-Adjusted EBITDA is also used as a supplemental performance target for purposes of our annual incentive compensation program. We believe the most comparable measure to Net Debt is total debt as reconciled in the notes to the accompanying Preliminary Consolidated Balance Sheets in Table 6. Project EBITDA is calculated for an individual capital project as earnings before interest expense, taxes, DD&A and general and administrative expenses attributable to such project, or for JV projects, consistent with the methods described above under "Amounts from Joint Ventures," and in conjunction with capital expenditures for the project, is the basis for our Project EBITDA multiple. Management, investors and others use Project EBITDA to evaluate our return on investment for capital projects before expenses that are generally not controllable by operating managers in our business segments. We believe the GAAP measure most directly comparable to Project EBITDA is the portion of net income attributable to a capital project. We do not provide the portion of budgeted net income attributable to individual capital projects (the GAAP financial measure most directly comparable to Project EBITDA) due to the impracticality of predicting, on a project-by-project basis through the second full year of operations, certain amounts required by GAAP, such as projected commodity prices, unrealized gains and losses on derivatives marked to market, and potential estimates for certain contingent liabilities associated with the project completion. FCF is calculated by reducing cash flow from operations for capital expenditures (sustaining and expansion), and FCF after dividends is calculated by further reducing FCF for dividends paid during the period. FCF is used by management, investors and other external users as an additional leverage metric, and FCF after dividends provides additional insight into cash flow generation. Therefore, we believe FCF is useful to our investors. We believe the GAAP measure most directly comparable to FCF is cash flow from operations. (See the accompanying Table 7.) Important Information Relating to Forward-Looking Statements This news release includes forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. Generally the words "expects," "believes," "anticipates," "plans," "will," "shall," "estimates," "projects," and similar expressions identify forward-looking statements, which are generally not historical in nature. Forward-looking statements in this news release include, among others, express or implied statements pertaining to: the long-term demand for KMI's assets and services; energy evolution-related opportunities; KMI's 2024 expectations; anticipated dividends; and KMI's capital projects, including expected costs, completion timing and benefits of those projects. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although KMI believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance as to when or if any such forward-looking statements will materialize nor their ultimate impact on our operations or financial condition. Important factors that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements include: the timing and extent of changes in the supply of and demand for the products we transport and handle; commodity prices; counterparty financial risk; and the other risks and uncertainties described in KMI's reports filed with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year-ended December 31, 2023 (under the headings "Risk Factors" and "Information Regarding Forward-Looking Statements" and elsewhere), and its subsequent reports, which are available through the SEC's EDGAR system at www.sec.gov and on our website at ir.kindermorgan.com. Forward-looking statements speak only as of the date they were made, and except to the extent required by law, KMI undertakes no obligation to update any forward-looking statement because of new information, future events or other factors. Because of these risks and uncertainties, readers should not place undue reliance on these forward-looking statements.
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Equifax Delivers Strong Second Quarter 2024 Revenue Growth of 9% Led by Workforce Solutions Non-Mortgage Verification Services - Equifax (NYSE:EFX)
ATLANTA, July 17, 2024 /PRNewswire/ -- Equifax® EFX today announced financial results for the quarter ended June 30, 2024. Second quarter 2024 revenue of $1.430 billion grew a strong 9%, with 13% non-mortgage local currency revenue growth.U.S. mortgage revenue grew 4% in the second quarter despite a 13% decline in USIS mortgage credit inquiries.Workforce Solutions second quarter revenue grew 5%, with 12% non-mortgage revenue growth from 20% Verification Services non-mortgage revenue growth led by Government and Talent Solutions. Mortgage revenue was down 12%.USIS second quarter revenue growth of 7% with 27% mortgage revenue growth and 1% non-mortgage revenue growth.International second quarter revenue growth of 17% on a reported basis and up 28% on a local currency basis, with organic local currency revenue growth of 12%.Significant new product innovation leveraging new EFX Cloud with 12.5% new product Vitality Index in the second quarter and 89% of new models and scores built using Artificial Intelligence and Machine Learning.Maintaining full-year 2024 guidance with midpoint expectation for revenue of $5.720 billion, up 8.6%, with strong non-mortgage local currency revenue growth of over 10% and Adjusted EPS of $7.35. "Equifax had a strong second quarter against our EFX2026 strategic priorities in a challenging mortgage market delivering revenue of $1.430 billion, up a strong 9%. EWS Verification Services revenue was up a very strong 9% driven by Government revenue up 30%. Our U.S. mortgage business grew 4% despite a 13% decline in USIS mortgage credit inquiries. USIS had strong 27% growth in mortgage revenue, with EWS mortgage revenue down 12% - both as expected. "Our non-mortgage business, which was about 80% of Equifax revenue in the second quarter, delivered very strong broad-based 13% local currency revenue growth, from continued significant new product performance with a New Product Vitality Index of 12.5% and 89% of new models and scores built using AI and ML. Workforce Solutions delivered very strong 20% non-mortgage Verification Services revenue growth led by the Government and Talent Solutions businesses, with 12% overall non-mortgage revenue growth. International delivered strong 12% organic local currency revenue growth, led by Latin America and Europe. USIS non-mortgage revenue growth of 1% was consistent with the first quarter. We expect improving USIS non-mortgage growth in the Second Half as we complete the full migration of our USIS consumer business to the Cloud early this quarter," said Mark W. Begor, Equifax Chief Executive Officer. "We are maintaining our full-year 2024 guidance with a midpoint expectation for revenue of $5.720 billion, up 8.6% on a reported basis and organic local currency growth of 8.5%, and Adjusted EPS of $7.35. While Equifax continues to execute well against its EFX2026 strategic priorities, our 2024 guidance reflects an expectation of a decline of about 11% in our 2024 U.S. mortgage credit inquiries, which is consistent with the current run-rates, and compares to down 34% in 2023. Adjusted EBITDA and Adjusted EPS continue to benefit from organic revenue growth and the additional cost savings from Cloud spending reduction plans. "We have strong momentum in 2024 and are confident in the future of the New Equifax as we deliver strong non-mortgage revenue growth, move towards completion of our Cloud transformation, leverage our new Cloud capabilities to accelerate new product roll-outs that 'Only Equifax' can provide, and invest in new products, data, analytics, and AI capabilities, which are expected to drive growth in 2024 and beyond. We are energized about the New Equifax and remain confident in our long-term 8-12% revenue growth framework that is expected to deliver higher margins and free cash flow." Financial Results Summary The Company reported revenue of $1,430.5 million in the second quarter of 2024, up 9% on a reported basis and up 11% on a local currency basis compared to the second quarter of 2023. Net income attributable to Equifax of $163.9 million was up 19% in the second quarter of 2024 compared to $138.3 million in the second quarter of 2023. Diluted EPS attributable to Equifax was $1.31 per share for the second quarter of 2024, up 17% compared to $1.12 per share in the second quarter of 2023. Workforce Solutions second quarter results: Total revenue was $612.9 million in the second quarter of 2024, up 5% compared to the second quarter of 2023. Operating margin for Workforce Solutions was 44.5% in the second quarter of 2024 compared to 42.0% in the second quarter of 2023. Adjusted EBITDA margin for Workforce Solutions was 52.8% in the second quarter of 2024 compared to 51.5% in the second quarter of 2023.Verification Services revenue was $515.9 million, up 9% compared to the second quarter of 2023.Employer Services revenue was $97.0 million, down 11% compared to the second quarter of 2023. USIS second quarter results: Total revenue was $478.3 million in the second quarter of 2024, up 7% compared to the second quarter of 2023. Operating margin for USIS was 20.6% in the second quarter of 2024 compared to 23.1% in the second quarter of 2023. Adjusted EBITDA margin for USIS was 33.2% in the second quarter of 2024 compared to 36.0% in the second quarter of 2023.Online Information Solutions revenue was $377.8 million, up 5% compared to the second quarter of 2023.Mortgage Solutions revenue was $40.4 million, up 33% compared to the second quarter of 2023.Financial Marketing Services revenue was $60.1 million, up 7% compared to the second quarter of 2023. International second quarter results: Total revenue was $339.3 million in the second quarter of 2024, up 17% and up 28% compared to the second quarter of 2023 on a reported and local currency basis, respectively. Operating margin for International was 11.9% in both the second quarter of 2024 and the second quarter of 2023. Adjusted EBITDA margin for International was 25.6% in the second quarter of 2024, compared to 24.2% in the second quarter of 2023.Latin America revenue was $97.3 million, up 71% compared to the second quarter of 2023 on a reported basis and up 124% on a local currency basis.Europe revenue was $88.2 million, up 12% compared to the second quarter of 2023 on both a reported basis and a local currency basis.Asia Pacific revenue was $84.6 million, down 4% compared to the second quarter of 2023 on a reported basis and down 2% on a local currency basis.Canada revenue was $69.2 million, up 4% compared to the second quarter of 2023 on a reported basis and up 6% on a local currency basis. Adjusted EPS and Adjusted EBITDA Margin: Adjusted EPS attributable to Equifax was $1.82 in the second quarter of 2024, up 6% compared to the second quarter of 2023.Adjusted EBITDA margin was 32.0% in the second quarter of 2024 compared to 32.7% in the second quarter of 2023.These financial measures exclude certain items as described further in the Non-GAAP Financial Measures section below. About Equifax At Equifax EFX, we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by nearly 15,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit www.equifax.com. Earnings Conference Call and Audio Webcast In conjunction with this release, Equifax will host a conference call on July 18, 2024 at 8:30 a.m. (ET) via a live audio webcast. To access the webcast and related presentation materials, go to the Investor Relations section of our website at www.equifax.com. The discussion will be available via replay at the same site shortly after the conclusion of the webcast. This press release is also available at that website. Non-GAAP Financial Measures This earnings release presents adjusted EPS attributable to Equifax which is diluted EPS attributable to Equifax adjusted (to the extent noted above for different periods) for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, Argentina highly inflationary foreign currency adjustment, and realignment of resources and other costs. All adjustments are net of tax, with a reconciling item with the aggregated tax impact of the adjustments. This earnings release also presents (i) adjusted EBITDA and adjusted EBITDA margin which is defined as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items, (ii) local currency revenue change which is calculated by conforming 2024 results using 2023 exchange rates and (iii) organic local currency revenue growth which is defined as local currency revenue growth, adjusted to reflect an increase in prior year Equifax revenue from the revenue of acquired companies in the prior year period. These are important financial measures for Equifax but are not financial measures as defined by GAAP. These non-GAAP financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of net income or EPS as determined in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and related notes are presented in the Q&A. This information can also be found under "Investor Relations/Financial Information/Non-GAAP Financial Measures" on our website at www.equifax.com. Forward-Looking Statements This release contains forward-looking statements and forward-looking information. These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact. These statements are based on certain factors and assumptions including with respect to foreign exchange rates, revenue growth, results of operations and financial performance, strategic initiatives, business plans, prospects and opportunities, the U.S. mortgage market, economic conditions and effective tax rates. While Equifax believes these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Several factors could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors relate to (i) actions taken by us, including, but not limited to, restructuring actions, strategic initiatives (such as our cloud technology transformation), capital investments and asset acquisitions or dispositions, as well as (ii) developments beyond our control, including, but not limited to, changes in the U.S. mortgage market environment and changes more generally in U.S. and worldwide economic conditions (such as changes in interest rates and inflation levels) that materially impact consumer spending, home prices, investment values, consumer debt, unemployment rates and the demand for Equifax's products and services. Deteriorations in economic conditions or increases in interest rates could lead to a decline in demand for our products and services and negatively impact our business. It may also impact financial markets and corporate credit markets, which could adversely impact our access to financing or the terms of any financing. Other risk factors relevant to our business include: (i) any compromise of Equifax, customer or consumer information due to security breaches and other disruptions to our information technology infrastructure; (ii) the failure to achieve and maintain key industry or technical certifications; (iii) the failure to realize the anticipated benefits of our cloud technology transformation strategy; (iv) operational disruptions and strain on our resources caused by our transition to cloud-based technologies; (v) our ability to meet customer requirements for high system availability and response time performance; (vi) effects on our business if we provide inaccurate or unreliable data to customers; (vii) our ability to maintain access to credit, employment, financial and other data from external sources; (viii) the impact of competition; (ix) our ability to maintain relationships with key customers; (x) our ability to successfully introduce new products, services and analytical capabilities; (xi) the impact on the demand for some of our products and services due to the availability of free or less expensive consumer information; (xii) our ability to comply with our obligations under settlement agreements arising out of the 2017 cybersecurity incident; (xiii) potential adverse developments in new and pending legal proceedings, government investigations and regulatory enforcement actions; (xiv) changes in, and the effects of, laws, regulations and government policies governing our business, including oversight by the Consumer Financial Protection Bureau in the U.S., the U.K. Financial Conduct Authority and Information Commissioner's Office in the U.K., and the Office of Australian Information Commission and the Australian Competition and Consumer Commission in Australia; (xv) the impact of privacy laws and regulations; (xvi) the economic, political and other risks associated with international sales and operations; (xvii) the impact on our reputation and business if we are unable to fulfill our environmental, social and governance commitments; (xviii) our ability to realize the anticipated strategic and financial benefits from our acquisitions, joint ventures and other alliances; (xix) any damage to our reputation due to our dependence on outsourcing certain portions of our operations; (xx) the termination or suspension of our government contracts; (xxi) the impact of infringement or misappropriation of intellectual property by us against third parties or by third parties against us; (xxii) an increase in our cost of borrowing and our ability to access the capital markets due to a credit rating downgrade; (xxiii) our ability to hire and retain key personnel; (xxiv) the impact of adverse changes in the financial markets and corresponding effects on our retirement and post-retirement pension plans; (xxv) the impact of health epidemics, pandemics and similar outbreaks on our business; and (xxvi) risks associated with our use of certain artificial intelligence and machine learning models. A summary of additional risks and uncertainties can be found in our Annual Report on Form 10-K for the year ended December 31, 2023 including, without limitation, under the captions "Item 1. Business -- Governmental Regulation" and "-- Forward-Looking Statements" and "Item 1A. Risk Factors" and in our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements are given only as at the date of this release and Equifax disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Common Questions & Answers (Unaudited) (Dollars in millions) 1. Can you provide a further analysis of operating revenue by operating segment? Operating revenue consists of the following components: 2. What is the estimate of the change in overall U.S. mortgage market credit inquiry volume that is included in the 2024 third quarter and full year guidance provided? The change year over year in total U.S. mortgage market credit inquiries received by Equifax in the second quarter of 2024 was a decline of 13%. The guidance provided on page 3 assumes a change year over year in total U.S. mortgage market credit inquiries received by Equifax in the third quarter of 2024 to be a decline of about 7%. For full year 2024, our guidance assumes a decline of about 11%. Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures (Unaudited) (Dollars in millions, except per share amounts) A. Reconciliation of net income attributable to Equifax to diluted EPS attributable to Equifax, defined as net income adjusted for acquisition-related amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, income tax effect of stock awards recognized upon vesting or settlement, Argentina highly inflationary foreign currency adjustment, realignment of resources and other costs and aggregated tax impact of these adjustments: B. Reconciliation of net income attributable to Equifax to adjusted EBITDA, defined as net income excluding income taxes, interest expense, net, depreciation and amortization expense, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, Argentina highly inflationary foreign currency adjustment, realignment of resources and other costs and presentation of adjusted EBITDA margin: C. Reconciliation of operating income by segment to adjusted EBITDA, excluding depreciation and amortization expense, other income, net, noncontrolling interest, accrual for legal and regulatory matters related to the 2017 cybersecurity incident, fair market value adjustment and gain on sale of equity investments, foreign currency impact of certain intercompany loans, acquisition-related costs other than acquisition amortization, Argentina highly inflationary foreign currency adjustment, realignment of resources and other costs and presentation of adjusted EBITDA margin for each of the segments: Notes to Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Financial Measures Diluted EPS attributable to Equifax is adjusted for the following items: Acquisition-related amortization expense - During the second quarter of 2024 and 2023, we recorded acquisition-related amortization expense of certain acquired intangibles of $65.3 million ($52.0 million, net of tax) and $60.3 million ($49.0 million, net of tax), respectively. We calculate this financial measure by excluding the impact of acquisition-related amortization expense and including a benefit to reflect the material cash income tax savings resulting from the income tax deductibility of amortization for certain acquired intangibles. These financial measures are not prepared in conformity with GAAP. Management believes excluding the impact of amortization expense is useful because excluding acquisition-related amortization and other items that are not comparable allows investors to evaluate our performance for different periods on a more comparable basis. Certain acquired intangibles result in material cash income tax savings which are not reflected in earnings. Management believes that including a benefit to reflect the cash income tax savings is useful as it allows investors to better value Equifax. Management makes these adjustments to earnings when measuring profitability, evaluating performance trends, setting performance objectives and calculating our return on invested capital. Accrual for legal and regulatory matters related to the 2017 cybersecurity incident - Accrual for legal and regulatory matters related to the 2017 cybersecurity incident includes legal fees to respond to subsequent litigation and government investigations for both periods presented. During the second quarter of 2023, we recorded an accrual for legal and regulatory matters related to the 2017 cybersecurity incident of $0.3 million ($0.2 million, net of tax). Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. Management makes these adjustments to net income when measuring profitability, evaluating performance trends, setting performance objectives and calculating our return on invested capital. This is consistent with how management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods. Fair market value adjustment and gain on sale of equity investments - On August 7, 2023, we purchased the remaining interest of our equity investment in Brazil. Prior to the acquisition, the investment in Brazil was adjusted to fair value at the end of each reporting period, with unrealized gains or losses recorded within the Consolidated Statements of Income in Other income, net. During the second quarter of 2023, we recorded a $10.5 million ($6.8 million, net of tax) unrealized gain related to adjusting our investment in Brazil to fair market value and gain related to the sale of an equity method investment. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2023, since the non-operating gain is not comparable among the periods. This is consistent with how our management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods. Foreign currency impact of certain intercompany loans - During the second quarter of 2024 and 2023, we recorded a loss of $0.4 million and a gain of $1.8 million, respectively, related to foreign currency impact of certain intercompany loans. Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. This is consistent with how management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods. Acquisition-related costs other than acquisition amortization - During the second quarter of 2024 and 2023, we recorded $14.5 million ($10.8 million, net of tax) and $26.9 million ($21.2 million, net of tax), respectively, for acquisition-related costs other than acquisition amortization. These costs primarily related to integration costs resulting from recent acquisitions and were recorded in operating income. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results, since a charge of such an amount is not comparable among the periods. This is consistent with how our management reviews and assesses Equifax's historical performance and is useful when planning, forecasting, and analyzing future periods. Income tax effects of stock awards that are recognized upon vesting or settlement - During the second quarter of 2024, we recorded a tax benefit of $0.6 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. During the second quarter of 2023, we recorded a tax benefit of $0.8 million related to the tax effects of deductions for stock compensation in excess of amounts recorded for compensation costs. Management believes excluding this tax effect from financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2024 and 2023 because these amounts are non-operating and relate to income tax benefits or deficiencies for stock awards recognized when tax amounts differ from recognized stock compensation cost. This is consistent with how management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods. Argentina highly inflationary foreign currency adjustment - Argentina experienced multiple periods of increasing inflation rates, devaluation of the peso, and increasing borrowing rates. As such, Argentina was deemed a highly inflationary economy by accounting policymakers. We recorded a foreign currency loss of $0.1 million during both the second quarter of 2024 and 2023 as a result of remeasuring the peso denominated monetary assets and liabilities due to Argentina being highly inflationary. Management believes excluding this charge is useful as it allows investors to evaluate our performance for different periods on a more comparable basis. This is consistent with how management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods. Charge related to the realignment of resources and other costs - During the second quarter of 2023, we recorded $17.5 million ($12.4 million, net of tax) of restructuring charges for the realignment of resources and other costs, which predominantly relates to the reduction of headcount and the realignment of our internal resources to support the Company's strategic objectives. Management believes excluding this charge from certain financial results provides meaningful supplemental information regarding our financial results for the three months ended June 30, 2023, since the charges are not comparable among the periods. This is consistent with how our management reviews and assesses Equifax's historical performance and is useful when planning, forecasting and analyzing future periods. Adjusted EBITDA and EBITDA margin - Management defines adjusted EBITDA as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization and also excludes certain one-time items. Management believes the use of adjusted EBITDA and adjusted EBITDA margin allows investors to evaluate our performance for different periods on a more comparable basis. SOURCE Equifax Inc. Market News and Data brought to you by Benzinga APIs
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Liberty Energy, Kinder Morgan, and Equifax announce impressive second quarter 2024 financial results, showcasing growth and resilience in their respective sectors.
Liberty Energy Inc., a leading North American oilfield services firm, has announced strong financial and operational results for the second quarter of 2024. The company reported a net income of $152 million, or $0.91 per fully diluted share, on revenue of $1.2 billion 1. This performance demonstrates Liberty's continued success in navigating the dynamic energy landscape.
Chris Wright, Liberty's CEO, expressed satisfaction with the company's achievements, stating, "Liberty delivered outstanding operational and financial results" 2. The company's focus on efficiency and technology adoption has contributed to its solid performance in a competitive market.
Kinder Morgan, Inc., a major energy infrastructure company, also reported positive second quarter 2024 results. The company announced a net income of $679 million, translating to $0.30 per share 3. This represents a significant increase from the same period in the previous year.
Kim Dang, Kinder Morgan's CEO, highlighted the company's strong performance across various segments, including natural gas pipelines and products pipelines. The results underscore Kinder Morgan's resilience and strategic positioning in the energy sector.
In the financial services sector, Equifax Inc. reported robust second quarter 2024 results, with a notable 9% year-over-year revenue growth 4. The company's performance was particularly strong in its Workforce Solutions segment, which saw substantial non-mortgage revenue growth.
Mark W. Begor, Equifax's CEO, commented on the results, saying, "Equifax delivered strong second quarter results" 4. The company's focus on innovation and strategic initiatives has contributed to its continued success in a competitive market.
The strong performances of Liberty Energy, Kinder Morgan, and Equifax in Q2 2024 reflect broader trends in their respective industries. In the energy sector, companies are benefiting from increased demand and improved operational efficiencies. Liberty Energy's results, in particular, indicate a robust oilfield services market.
Kinder Morgan's steady growth suggests ongoing strength in energy infrastructure and transportation. The company's diverse portfolio of assets has proven resilient in the face of market fluctuations.
Equifax's impressive revenue growth, especially in non-mortgage segments, points to a diversifying financial services landscape. The company's success in Workforce Solutions highlights the increasing importance of data-driven insights in the industry.
As these companies continue to navigate evolving market conditions, their Q2 2024 results provide valuable insights into sector trends and potential future developments. Investors and industry observers will likely keep a close eye on these companies as indicators of broader economic patterns in the energy and financial services sectors.
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