Rattler Midstream LP (NASDAQ: RTLR) (“Rattler” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback”), today announced financial and operating results for the fourth quarter and full year ended December 31, 2020.
FOURTH QUARTER 2020 HIGHLIGHTS
- Q4 2020 consolidated net income (including non-controlling interest) of $38.9 million
- Q4 2020 consolidated Adjusted EBITDA (as defined and reconciled below) of $77.6 million
- Board of Directors of Rattler’s general partner approved a cash distribution for the fourth quarter of 2020 of $0.20 per common unit ($0.80 annualized); implies a 7.5% annualized yield based on the February 23, 2021 closing unit price of $10.72
- Repurchased 1,650,000 common units at an average unit price of $8.93 for a total cost of $14.7 million
- Q4 2020 cash operated capital expenditures of $11.8 million
- Q4 2020 average produced water gathering and disposal volumes of 810 MBbl/d
- Q4 2020 average sourced water volumes of 287 MBbl/d; 8% of total sourced water volumes in Q4 2020 sourced from recycled produced water
- Q4 2020 average crude oil gathering volumes of 89 MBbl/d
- Q4 2020 average gas gathering volumes of 141 BBtu/d
FULL YEAR 2020 HIGHLIGHTS
- Full year 2020 consolidated net income (including non-controlling interest) of $144.7 million
- Full year 2020 consolidated Adjusted EBITDA (as defined and reconciled below) of $283.8 million; up 7% from full year 2019
- Full year 2020 operated capital expenditures of $136.8 million; down 43% from full year 2019
- Full year 2020 average produced water gathering and disposal volumes of 822 MBbl/d
- Full year 2020 average sourced water volumes of 254 MBbl/d
- Full year 2020 average crude oil gathering volumes of 92 MBbl/d
- Full year 2020 average gas gathering volumes of 122 BBtu/d
“Rattler’s performance in the fourth quarter of 2020 reflects our continued progress in reducing capital spend after Diamondback’s growth trajectory dramatically slowed in the second quarter of 2020. We are also near the end of our multi-year investment cycle in non-operated equity method investments, with distributions from equity method investments nearly reaching parity with contributions in the fourth quarter. In 2021, we expect distributions from these investments to significantly exceed remaining contributions. Also, as previously announced, operated capital expenditures are expected to decrease by ~50% from 2020 levels. With our operated volumes normalizing in the fourth quarter, cash flow from our fixed fee agreements combined with declining capital investment resulted in robust free cash flow generation that was returned to unitholders via our distribution and repurchase program,” stated Travis Stice, Chief Executive Officer of Rattler’s general partner.
Mr. Stice continued, “Looking forward to 2021, with Diamondback planning to keep fourth quarter 2020 oil production volumes relatively flat, Rattler’s 2021 guidance reflects a continuation of the strong results seen in the second half of 2020. The stable operated business, underpinned by Diamondback’s low-cost development of its top tier Permian assets, along with equity method distributions outpacing contributions, is expected to deliver increasing free cash flow to Rattler’s unitholders. Taken together with Rattler’s conservative leverage profile and visibility into Diamondback’s development plan, we believe Rattler presents a compelling story of financial strength and free cash flow generation with tangible returns to unitholders.”
OPERATIONS AND FINANCIAL UPDATE
During the fourth quarter of 2020, the Company recorded total operating income of $48.2 million, an increase of 9% compared to the third quarter of 2020. During the fourth quarter of 2020, the Company recorded consolidated net income (including non-controlling interest) of $38.9 million, flat from the third quarter of 2020. Fourth quarter 2020 Adjusted EBITDA (as defined and reconciled below) was $77.6 million, an increase of 9% from the third quarter of 2020.
Fourth quarter operated capital expenditures totaled $11.8 million, and aggregate contributions to equity method joint ventures were $12.7 million. Rattler also received proceeds of $12.3 million in distributions from equity method investments during the quarter.
The following table summarizes the Company’s throughput on its operated assets.
| Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||
| Crude oil gathering volumes (Bbl/d) | 88,634 | 98,725 | 92,056 | 85,164 | |||||||
| Natural gas gathering volumes (MMBtu/d) | 141,140 | 104,169 | 121,637 | 85,283 | |||||||
| Produced water gathering and disposal volumes (Bbl/d) | 810,493 | 894,693 | 821,543 | 806,078 | |||||||
| Sourced water gathering volumes (Bbl/d) | 287,255 | 478,232 | 253,907 | 415,939 | |||||||
CASH DISTRIBUTION
On February 17, 2021, the Board of Directors of Rattler’s general partner approved a cash distribution for the fourth quarter of 2020 of $0.20 per common unit, payable on March 15, 2021 to unitholders of record at the close of business on March 8, 2021.
COMMON UNIT REPURCHASE PROGRAM
On October 29, 2020, the Board of Directors of Rattler’s general partner approved a common unit repurchase program to acquire up to $100 million of our outstanding common units through December 31, 2021. Pursuant to this program, during the fourth quarter of 2020, the Company repurchased 1,650,000 common units at an average unit price of $8.93 per unit for a total cost of $14.7 million. From the end of the fourth quarter of 2020 through February 12, 2021, Rattler repurchased an additional 664,610 common units for a total cost of $6.6 million. In total through February 12, 2021, Rattler repurchased 2,314,610 common units for a total cost of $21.4 million, utilizing 21% of the $100 million approved by the Board for the repurchase program.
GUIDANCE UPDATE
Below is Rattler’s initial guidance for the full year 2021.
| Rattler Midstream LP Guidance | |
| 2021 | |
| Rattler Operated Volumes (a) | |
| Produced Water Gathering and Disposal Volumes (MBbl/d) | 800 – 900 |
| Sourced Water Volumes (MBbl/d) | 200 – 300 |
| Crude Oil Gathering Volumes (MBbl/d) | 75 – 85 |
| Gas Gathering Volumes (BBtu/d) | 120 – 140 |
| Financial Metrics ($ millions except per unit metrics) | |
| Net Income | $140 – $180 |
| Adjusted EBITDA | $280 – $320 |
| Operated Midstream Capex | $60 – $80 |
| Equity Method Investment Contributions(b) | $10 – $20 |
| Equity Method Investment Distributions(b) | $35 – $45 |
| Depreciation, Amortization & Accretion | $50 – $70 |
(a) Does not include any volumes from the EPIC, Gray Oak, Wink to Webster, OMOG and Amarillo Rattler joint ventures
(b) Includes the EPIC, Gray Oak, Wink to Webster, OMOG and Amarillo Rattler joint ventures
CONFERENCE CALL
Rattler will host a conference call and webcast for investors and analysts to discuss its results for the fourth quarter and full year of 2020 on Thursday, February 25, 2021 at 9:00 a.m. CT. Participants should call (877) 288-2756 (United States/Canada) or (470) 495-9481 (International) and use the confirmation code 5272909. A telephonic replay will be available from 12:00 p.m. CT on Thursday, February 25, 2021 through Thursday, March 4, 2021 at 12:00 p.m. CT. To access the replay, call (855) 859-2056 (United States/Canada) or (404) 537-3406 (International) and enter confirmation code 5272909. A live broadcast of the earnings conference call will also be available via the internet at www.rattlermidstream.com under the “Investors” section of the site. A replay will also be available on the website following the call.
About Rattler Midstream LP
Rattler Midstream LP is a Delaware limited partnership formed by Diamondback Energy to own, operate, develop and acquire midstream and energy-related infrastructure assets. Rattler owns crude oil, natural gas and water-related midstream assets in the Permian Basin that provide services to Diamondback Energy and third party customers under primarily long-term, fixed-fee contracts. For more information, please visit www.rattlermidstream.com.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that Rattler assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events, including specifically the statements regarding expectations of plans, strategies, objectives and anticipated financial and operating results of Rattler, including Rattler’s capital expenditure levels and other guidance discussed above. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Rattler. Information concerning these risks and other factors can be found in Rattler’s filings with the Securities and Exchange Commission (“SEC”), including its Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the SEC’s web site at http://www.sec.gov. Rattler undertakes no obligation to update or revise any forward-looking statement.
| Rattler Midstream LP | |||||||
| Consolidated Balance Sheets | |||||||
| (unaudited, in thousands) | |||||||
| December 31, | December 31, | ||||||
| 2020 | 2019 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash | $ | 23,927 | $ | 10,633 | |||
| Accounts receivable—related party | 57,447 | 50,270 | |||||
| Accounts receivable—third party, net | 5,658 | 9,071 | |||||
| Sourced water inventory | 10,108 | 14,325 | |||||
| Other current assets | 1,127 | 1,428 | |||||
| Total current assets | 98,267 | 85,727 | |||||
| Property, plant and equipment: | |||||||
| Land | 85,826 | 86,072 | |||||
| Property, plant and equipment | 1,012,777 | 930,768 | |||||
| Accumulated depreciation, amortization and accretion | (100,728 | ) | (61,132 | ) | |||
| Property, plant and equipment, net | 997,875 | 955,708 | |||||
| Right of use assets | 574 | 418 | |||||
| Equity method investments | 532,927 | 479,558 | |||||
| Real estate assets, net | 96,687 | 101,116 | |||||
| Intangible lease assets, net | 4,262 | 8,070 | |||||
| Deferred tax asset | 73,264 | — | |||||
| Other assets | 4,732 | 5,796 | |||||
| Total assets | $ | 1,808,588 | $ | 1,636,393 | |||
| Rattler Midstream LP | |||||||
| Consolidated Balance Sheets – Continued | |||||||
| (unaudited, in thousands, except unit amounts) | |||||||
| December 31, | December 31, | ||||||
| 2020 | 2019 | ||||||
| Liabilities and Unitholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 139 | $ | 147 | |||
| Accrued liabilities | 42,508 | 76,625 | |||||
| Taxes payable | 192 | 189 | |||||
| Short-term lease liability | 574 | 418 | |||||
| Asset retirement obligations | 35 | — | |||||
| Total current liabilities | 43,448 | 77,379 | |||||
| Long-term debt | 569,947 | 424,000 | |||||
| Asset retirement obligations | 15,093 | 11,347 | |||||
| Deferred income taxes | — | 7,827 | |||||
| Total liabilities | 628,488 | 520,553 | |||||
| Commitment and contingencies | |||||||
| Unitholders’ equity: | |||||||
| General partner—Diamondback | 899 | 979 | |||||
| Common units—public (42,356,637 units issued and outstanding as of December 31, 2020 and 43,700,000 units issued and outstanding as of December 31, 2019) | 385,189 | 737,777 | |||||
| Class B units—Diamondback (107,815,152 units issued and outstanding as of December 31, 2020 and as of December 31, 2019) | 899 | 979 | |||||
| Accumulated other comprehensive income (loss) | (123 | ) | (198 | ) | |||
| Total Rattler Midstream LP unitholders’ equity | 386,864 | 739,537 | |||||
| Non-controlling interest | 793,638 | 376,928 | |||||
| Non-controlling interest in accumulated other comprehensive income (loss) | (402 | ) | (625 | ) | |||
| Total equity | 1,180,100 | 1,115,840 | |||||
| Total liabilities and unitholders’ equity | $ | 1,808,588 | $ | 1,636,393 | |||
| Rattler Midstream LP | |||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||
| (unaudited, in thousands, except per unit data) | |||||||||||||||
| Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Revenues: | |||||||||||||||
| Revenues—related party | $ | 98,629 | $ | 112,612 | $ | 379,089 | $ | 409,120 | |||||||
| Revenues—third party | 7,620 | 8,919 | 31,124 | 24,324 | |||||||||||
| Rental income—related party | 2,394 | 1,401 | 7,495 | 4,771 | |||||||||||
| Rental income—third party | 687 | 1,891 | 5,340 | 7,890 | |||||||||||
| Other real estate income—related party | (12 | ) | 114 | 306 | 379 | ||||||||||
| Other real estate income—third party | (82 | ) | 371 | 551 | 1,189 | ||||||||||
| Total revenues | 109,236 | 125,308 | 423,905 | 447,673 | |||||||||||
| Costs and expenses: | |||||||||||||||
| Direct operating expenses | 29,968 | 29,930 | 131,393 | 106,311 | |||||||||||
| Cost of goods sold (exclusive of depreciation and amortization) | 11,002 | 16,604 | 38,370 | 62,856 | |||||||||||
| Real estate operating expenses | 549 | 680 | 2,361 | 2,643 | |||||||||||
| Depreciation, amortization and accretion | 17,527 | 10,538 | 53,123 | 42,336 | |||||||||||
| Impairment | 918 | — | 918 | — | |||||||||||
| General and administrative expenses | 4,538 | 4,986 | 16,367 | 12,663 | |||||||||||
| (Gain) loss on disposal of property, plant and equipment | (3,494 | ) | 1,528 | (729 | ) | 1,524 | |||||||||
| Total costs and expenses | 61,008 | 64,266 | 241,803 | 228,333 | |||||||||||
| Income (loss) from operations | 48,228 | 61,042 | 182,102 | 219,340 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest income (expense), net | (6,923 | ) | (401 | ) | (17,287 | ) | (1,039 | ) | |||||||
| Income (loss) from equity method investments | 29 | (5,634 | ) | (9,881 | ) | (6,329 | ) | ||||||||
| Total other income (expense), net | (6,894 | ) | (6,035 | ) | (27,168 | ) | (7,368 | ) | |||||||
| Net income (loss) before income taxes | 41,334 | 55,007 | 154,934 | 211,972 | |||||||||||
| Provision for (benefit from) income taxes | 2,475 | 3,403 | 10,229 | 26,253 | |||||||||||
| Net income (loss) | 38,859 | 51,604 | 144,705 | 185,719 | |||||||||||
| Less: Net income (loss) before initial public offering | — | — | — | 65,995 | |||||||||||
| Net income (loss) subsequent to initial public offering | 38,859 | 51,604 | 144,705 | 119,724 | |||||||||||
| Less: Net income (loss) attributable to non-controlling interest | 29,239 | 39,136 | 110,014 | 90,922 | |||||||||||
| Net income (loss) attributable to Rattler Midstream LP | $ | 9,620 | $ | 12,468 | $ | 34,691 | $ | 28,802 | |||||||
| Net income (loss) attributable to limited partners per common unit: | |||||||||||||||
| Basic | $ | 0.21 | $ | 0.27 | $ | 0.74 | $ | 0.64 | |||||||
| Diluted | $ | 0.21 | $ | 0.27 | $ | 0.74 | $ | 0.64 | |||||||
| Weighted average number of limited partner common units outstanding: | |||||||||||||||
| Basic | 43,448 | 43,700 | 43,739 | 43,622 | |||||||||||
| Diluted | 43,448 | 43,700 | 43,739 | 43,622 | |||||||||||
| Rattler Midstream LP | |||||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||||
| (unaudited, in thousands) | |||||||||||||||
| Three Months Ended December 31, 2020 |
Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net income (loss) | $ | 38,859 | $ | 51,604 | $ | 144,705 | $ | 185,719 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Provision for deferred income taxes | 2,475 | 3,403 | 10,229 | 26,253 | |||||||||||
| Depreciation, amortization and accretion | 17,527 | 10,538 | 53,123 | 42,336 | |||||||||||
| Unit-based compensation expense | 2,340 | 2,219 | 8,895 | 5,208 | |||||||||||
| Impairment | 918 | — | 918 | — | |||||||||||
| (Income) loss from equity method investments | (29 | ) | 5,634 | 9,881 | 6,329 | ||||||||||
| Other | (2,991 | ) | 1,528 | 241 | 1,524 | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||
| Accounts receivable—related party | (8,826 | ) | (19,735 | ) | (7,177 | ) | (65,032 | ) | |||||||
| Accounts payable, accrued liabilities and taxes payable | 2,625 | 3,508 | 2,742 | 34,299 | |||||||||||
| Other | (373 | ) | (4,370 | ) | 6,342 | (18,443 | ) | ||||||||
| Net cash provided by (used in) operating activities | 52,525 | 54,329 | 229,899 | 218,193 | |||||||||||
| Cash flows from investing activities: | |||||||||||||||
| Additions to property, plant and equipment | (11,831 | ) | (54,242 | ) | (136,820 | ) | (241,786 | ) | |||||||
| Contributions to equity method investments | (12,748 | ) | (260,460 | ) | (102,499 | ) | (336,601 | ) | |||||||
| Distributions from equity method investments | 12,277 | — | 39,767 | — | |||||||||||
| Proceeds from the sale of fixed assets | 18,701 | — | 18,743 | 18 | |||||||||||
| Net cash provided by (used in) investing activities | 6,399 | (314,702 | ) | (180,809 | ) | (578,369 | ) | ||||||||
| Cash flows from financing activities: | |||||||||||||||
| Proceeds from Note Offering | — | — | 500,000 | — | |||||||||||
| Proceeds from borrowings from credit facility | 32,000 | 351,000 | 211,000 | 463,000 | |||||||||||
| Payments on credit facility | (38,000 | ) | (30,000 | ) | (556,000 | ) | (39,000 | ) | |||||||
| Debt issuance costs | (9 | ) | (381 | ) | (10,023 | ) | (4,310 | ) | |||||||
| Net proceeds from initial public offering—public | — | 1 | — | 719,377 | |||||||||||
| Repurchased units as part of unit buyback | (14,741 | ) | — | (14,741 | ) | — | |||||||||
| Distribution to public | (8,802 | ) | (14,858 | ) | (46,906 | ) | (14,858 | ) | |||||||
| Distribution to Diamondback | (21,582 | ) | (36,678 | ) | (115,442 | ) | (763,191 | ) | |||||||
| Other | (439 | ) | (772 | ) | (3,684 | ) | 1,227 | ||||||||
| Net cash provided by (used in) financing activities | (51,573 | ) | 268,312 | (35,796 | ) | 362,245 | |||||||||
| Net increase (decrease) in cash | 7,351 | 7,939 | 13,294 | 2,069 | |||||||||||
| Cash at beginning of period | 16,576 | 2,694 | 10,633 | 8,564 | |||||||||||
| Cash at end of period | $ | 23,927 | $ | 10,633 | $ | 23,927 | $ | 10,633 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||
| Interest paid | $ | 612 | $ | 1,932 | $ | 7,381 | $ | 2,707 | |||||||
| Supplemental disclosure of non-cash financing activity: | |||||||||||||||
| Contributions from Diamondback | $ | — | $ | — | $ | — | $ | 456,055 | |||||||
| Supplemental disclosure of non-cash investing activity: | |||||||||||||||
| Increase in long-term assets and inventory due to contributions from Diamondback | $ | — | $ | — | $ | — | $ | 456,055 | |||||||
| Rattler Midstream LP | ||||||||
| Pipeline Infrastructure Assets | ||||||||
| (unaudited) | ||||||||
| As of December 31, 2020 | ||||||||
| (miles)(a) | Delaware Basin | Midland Basin | Permian Total | |||||
| Crude oil | 108 | 46 | 154 | |||||
| Natural gas | 155 | — | 155 | |||||
| Produced water | 269 | 248 | 517 | |||||
| Sourced water | 27 | 74 | 101 | |||||
| Total | 559 | 368 | 927 | |||||
(a) Does not include any assets of the EPIC, Gray Oak, Wink to Webster, Amarillo Rattler or OMOG joint ventures.
| Rattler Midstream LP | |||||||||||
| Capacity/Capability | |||||||||||
| (unaudited) | |||||||||||
| As of December 31, 2020 | |||||||||||
| (capacity/capability)(a) | Delaware Basin | Midland Basin | Permian Total | Utilization | |||||||
| Crude oil gathering (Bbl/d) | 210,000 | 65,000 | 275,000 | 36 | % | ||||||
| Natural gas compression (Mcf/d) | 151,000 | — | 151,000 | 60 | % | ||||||
| Natural gas gathering (Mcf/d) | 170,000 | — | 170,000 | 54 | % | ||||||
| Produced water gathering and disposal (Bbl/d) | 1,310,000 | 1,810,000 | 3,120,000 | 26 | % | ||||||
| Sourced water gathering (Bbl/d) | 120,000 | 455,000 | 575,000 | 44 | % | ||||||
(a) Does not include any assets of the EPIC, Gray Oak, Wink to Webster, Amarillo Rattler or OMOG joint ventures.
| Rattler Midstream LP | |||||||||||
| Throughput | |||||||||||
| (unaudited) | |||||||||||
| Three Months Ended December 31, |
Year Ended December 31, | ||||||||||
| (throughput)(a) | 2020 | 2019 | 2020 | 2019 | |||||||
| Crude oil gathering (Bbl/d) | 88,634 | 98,725 | 92,056 | 85,164 | |||||||
| Natural gas gathering (MMBtu/d) | 141,140 | 104,169 | 121,637 | 85,283 | |||||||
| Produced water gathering and disposal (Bbl/d) | 810,493 | 894,693 | 821,543 | 806,078 | |||||||
| Sourced water gathering (Bbl/d) | 287,255 | 478,232 | 253,907 | 415,939 | |||||||
(a) Does not include any volumes of the EPIC, Gray Oak, Wink to Webster, Amarillo Rattler or OMOG joint ventures.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA is a supplemental non-GAAP financial measure used by management and external users of its financial statements, such as industry analysts, investors, lenders and rating agencies. Management believes Adjusted EBITDA is useful because the measure allows it to more effectively evaluate the Company’s operating performance and compare the results of its operations period to period without regard to its financing methods or capital structure.
The Company defines Adjusted EBITDA as net income before income taxes, interest expense, net of amount capitalized, depreciation, amortization and accretion on assets and liabilities of Rattler Midstream Operating LLC, its proportional depreciation and interest expense related to equity method investments, its proportional impairments and abandonments related to equity method investments, non-cash general and administrative expense and other non-cash transactions. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA excludes some, but not all, items that affect net income, and these measures may vary from those of other companies. As a result, Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
The Company does not provide guidance on the reconciling items between forecasted Net Income and forecasted Adjusted EBITDA due to the uncertainty regarding timing and estimates of these items. Rattler provides a range for the forecasts of Net Income and Adjusted EBITDA to allow for the variability in timing and uncertainty of estimates of reconciling items between forecasted Net Income and forecasted Adjusted EBITDA. Therefore, the Company cannot reconcile forecasted Net Income to forecasted Adjusted EBITDA without unreasonable effort.
The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure for each of the periods indicated:
| Rattler Midstream LP | |||||||||||||||
| Adjusted EBITDA | |||||||||||||||
| (unaudited, in thousands) | |||||||||||||||
| Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||
| Net income | $ | 38,859 | $ | 51,604 | $ | 144,705 | $ | 185,719 | |||||||
| Interest expense, net of amount capitalized | 6,923 | 401 | 17,287 | 1,039 | |||||||||||
| Depreciation, amortization and accretion | 17,527 | 10,538 | 53,123 | 42,336 | |||||||||||
| Depreciation and interest expense related to equity method investments | 12,116 | 1,287 | 32,456 | 2,641 | |||||||||||
| Impairments and abandonments related to equity method investments | 28 | — | 16,543 | — | |||||||||||
| Non-cash general and administrative | 2,762 | 2,219 | 9,317 | 5,208 | |||||||||||
| Other non-cash transactions | (3,047 | ) | 1,528 | 189 | 1,528 | ||||||||||
| Provision for income taxes | 2,475 | 3,403 | 10,229 | 26,253 | |||||||||||
| Adjusted EBITDA | 77,643 | 70,980 | 283,849 | 264,724 | |||||||||||
| Less: Adjusted EBITDA prior to the IPO | — | — | — | 100,743 | |||||||||||
| Adjusted EBITDA subsequent to the IPO | 77,643 | 70,980 | 283,849 | 163,981 | |||||||||||
| Less: Adjusted EBITDA attributable to non-controlling interest | 55,411 | 50,508 | 201,994 | 116,685 | |||||||||||
| Adjusted EBITDA attributable to Rattler Midstream LP | $ | 22,232 | $ | 20,472 | $ | 81,855 | $ | 47,296 | |||||||
Adjusted net income is a supplemental non-GAAP financial measure equal to net income adjusted for impairments and abandonments related to equity method investments and related income tax adjustments. Management believes adjusted net income is useful because the measure provides useful information to analysts and investors for analysis of its operating results on a consistent, comparable basis from period to period. The Company’s computation of adjusted net income may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.
| Rattler Midstream LP | ||||||
| Adjusted Net Income | ||||||
| (unaudited, in thousands, except per unit data) | ||||||
| Three Months Ended December 31, 2020 |
Year Ended December 31, 2020 |
|||||
| Reconciliation of Net Income to Adjusted Net Income: | ||||||
| Net income | $ | 38,859 | $ | 144,705 | ||
| Impairments and abandonments related to equity method investments | 28 | 16,543 | ||||
| Adjusted income excluding above items | 38,887 | 161,248 | ||||
| Income tax adjustment for above items | (2 | ) | (1,132 | ) | ||
| Adjusted net income(1) | 38,885 | 160,116 | ||||
| Less: Adjusted net income attributable to non-controlling interest | 29,259 | 121,763 | ||||
| Adjusted net income attributable to Rattler Midstream LP | $ | 9,626 | $ | 38,353 | ||
| Adjusted net income attributable to limited partners per common unit | $ | 0.22 | $ | 0.83 | ||
(1) Adjusted net income was equal to net income for the three months and year ended December 31, 2019.
Investor Contact:
Adam Lawlis
+1 432.221.7467
IR@rattlermidstream.com
Source: Rattler Midstream LP; Diamondback Energy, Inc.
