|BLACK STONE MINERALS, L.P. filed this Form 10-Q on 11/07/2017|
expenditures. Net working interest capital expenditures consist of all capital expenditures related to working interest wells less the recoupment of working interest expenditures under our farmout agreement.
Adjusted EBITDA, distributable cash flow, and distributable cash flow after net working interest capital expenditures should not be considered an alternative to, or more meaningful than, net income (loss), income (loss) from operations, cash flows from operating activities, or any other measure of financial performance presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) as measures of our financial performance.
Adjusted EBITDA, distributable cash flow, and distributable cash flow after net working interest capital expenditures have important limitations as analytical tools because they exclude some but not all items that affect net income (loss), the most directly comparable U.S. GAAP financial measure. Our computation of Adjusted EBITDA, distributable cash flow, and distributable cash flow after net working interest capital expenditures may differ from computations of similarly titled measures of other companies.
The following table presents a reconciliation of Adjusted EBITDA, distributable cash flow and distributable cash flow after net working interest capital expenditures to net income (loss), the most directly comparable U.S. GAAP financial measure, for the periods indicated:
Three Months Ended September 30,
Nine Months Ended September 30,
Net income (loss)
Adjustments to reconcile to Adjusted EBITDA:
Depreciation, depletion and amortization
Impairment of oil and natural gas properties
Accretion of asset retirement obligations
Unrealized (gain) loss on commodity derivative instruments
Adjustments to reconcile to distributable cash flow:
Change in deferred revenue
Cash interest expense
(Gain) loss on sales of assets, net
Estimated replacement capital expenditures2
Cash paid to noncontrolling interests
Redeemable preferred unit distributions
Distributable Cash Flow
Net working interest capital expenditures
Distributable cash flow after net working interest capital expenditures
1 On April 25, 2016, the Compensation Committee of the Board approved a resolution to change the settlement feature of certain employee long-term incentive
compensation plans from cash to equity. As a result of the modification, $10.1 million of cash-settled liabilities were reclassified to equity-settled liabilities
during the second quarter of 2016.
2On August 3, 2016, the Board of Directors of our general partner (the “Board”) established a replacement capital expenditure estimate of $15.0 million for the period of April 1, 2016 to March 31, 2017. There was no established estimate of replacement capital expenditures prior to this period. On June 8, 2017, the Board established a replacement capital expenditure estimate of $13.0 million for the period of April 1, 2017 to March 31, 2018.