1
Non-GAAP Financial Measures
Cash Interest Reconciliation
Cash Interest is a supplemental non-GAAP financial measure that is used by management and external users of the Company’s
financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Cash Interest as
interest expense plus capitalized interest less amortization and write-offs of deferred financing costs and debt discounts
included in interest expense. Cash Interest is not a measure of interest expense as determined by United States generally
accepted accounting principles, or GAAP.
The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial
measure of Cash Interest for the periods presented:
Three Months Ended September 30,
Nine Months Ended September 30,
2018
2017
2018
2017
(In thousands)
Interest expense
$
39,560
$
37,389
$
117,616
$
110,548
Capitalized interest
4,531
3,137
13,209
8,773
Amortization of deferred financing costs
(1,813
)
(1,729
)
(5,511
)
(5,128
)
Amortization of debt discount
(2,852
)
(2,591
)
(8,201
)
(7,426
)
Cash Interest
$
39,426
$
36,206
$
117,113
$
106,767
Adjusted EBITDA and Free Cash Flow Reconciliations
Adjusted EBITDA and Free Cash Flow are supplemental non-GAAP financial measures that are used by management and
external users of the Company’s financial statements, such as industry analysts, investors, lenders and rating agencies. The
Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, depletion, amortization,
exploration expenses and other similar non-cash or non-recurring charges. The Company defines Free Cash Flow as Adjusted
EBITDA less Cash Interest and CapEx, excluding capitalized interest. Adjusted EBITDA and Free Cash Flow are not measures
of net income (loss) or cash flows as determined by GAAP.
2
The following table presents reconciliations of the GAAP financial measures of net income (loss) including non-controlling
interests and net cash provided by (used in) operating activities to the non-GAAP financial measures of Adjusted EBITDA and
Free Cash Flow for the periods presented:
Three Months Ended September 30,
Nine Months Ended September 30,
2018
2017
2018
2017
(In thousands)
Net income (loss) including non-controlling interests
$
66,223
$
(41,064
)
$
(246,366
)
$
(671
)
Gain on sale of properties
(36,869
)
—
(38,823
)
—
Loss on extinguishment of debt
47
—
13,698
—
Net (gain) loss on derivative instruments
48,544
54,310
239,945
(52,297
)
Derivative settlements
(1)
(65,190
)
8,095
(162,013
)
(804
)
Interest expense, net of capitalized interest
39,560
37,389
117,616
110,548
Depreciation, depletion and amortization
162,984
132,289
465,819
384,246
Impairment
—
139
384,228
6,021
Exploration expenses
22,315
854
23,701
4,010
Equity-based compensation expenses
7,456
6,628
21,586
20,451
Income tax (benefit) expense
24,782
(18,846
)
(75,391
)
(470
)
Other non-cash adjustments
574
(208
)
557
491
Adjusted EBITDA
270,426
179,586
744,557
471,525
Adjusted EBITDA attributable to non-controlling interests
5,194
190
14,647
190
Adjusted EBITDA attributable to Oasis
265,232
179,396
729,910
471,335
Cash Interest
(39,426
)
(36,206
)
(117,113
)
(106,767
)
Capital expenditures
(2)
(372,343
)
(240,373
)
(1,898,105
)
(523,143
)
Capitalized interest
4,531
3,137
13,209
8,773
Free Cash Flow
$
(142,006
)
$
(94,046
)
$
(1,272,099
)
$
(149,802
)
Net cash provided by operating activities
$
229,985
$
88,876
$
762,001
$
298,737
Derivative settlements
(1)
(65,190
)
8,095
(162,013
)
(804
)
Interest expense, net of capitalized interest
39,560
37,389
117,616
110,548
Exploration expenses
22,315
854
23,701
4,010
Deferred financing costs amortization and other
(9,556
)
(3,795
)
(20,074
)
(12,666
)
Current tax expense
(93
)
—
27
—
Changes in working capital
52,831
48,375
22,742
71,209
Other non-cash adjustments
574
(208
)
557
491
Adjusted EBITDA
270,426
179,586
744,557
471,525
Adjusted EBITDA attributable to non-controlling interests
5,194
190
14,647
190
Adjusted EBITDA attributable to Oasis
265,232
179,396
729,910
471,335
Cash Interest
(39,426
)
(36,206
)
(117,113
)
(106,767
)
Capital expenditures
(2)
(372,343
)
(240,373
)
(1,898,105
)
(523,143
)
Capitalized interest
4,531
3,137
13,209
8,773
Free Cash Flow
$
(142,006
)
$
(94,046
)
$
(1,272,099
)
$
(149,802
)
3
___________________
(1) Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods
presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were
settled.
(2) Capital expenditures (including acquisitions) reflected in the table above differ from the amounts shown in the
statements of cash flows in our condensed consolidated financial statements because amounts reflected in the table
include changes in accrued liabilities from the previous reporting period for capital expenditures, while the amounts
presented in the statement of cash flows are presented on a cash basis. Acquisitions totaled $55.6 million and $1.1
million for the three months ended September 30, 2018 and 2017, respectively, and $950.1 million and $5.9 million for
the nine months ended September 30, 2018 and 2017, respectively.
Segment Adjusted EBITDA Reconciliations
The following tables present reconciliations of the GAAP financial measure of income (loss) before income taxes including
non-controlling interests to the non-GAAP financial measure of Adjusted EBITDA for our three reportable business segments
on a gross basis for the periods presented:
Exploration and Production
Three Months Ended September 30,
Nine Months Ended September 30,
2018
2017
2018
2017
(In thousands)
Income (loss) before income taxes including non-
controlling interests
$
59,375
$
(88,835
)
$
(423,470
)
$
(71,999
)
Gain on sale of properties
(46,459
)
—
(48,413
)
—
Loss on extinguishment of debt
47
—
13,698
—
Net (gain) loss on derivative instruments
48,544
54,310
239,945
(52,297
)
Derivative settlements
(1)
(65,190
)
8,095
(162,013
)
(804
)
Interest expense, net of capitalized interest
39,398
37,369
117,009
110,528
Depreciation, depletion and amortization
158,630
129,626
453,083
376,818
Impairment
—
139
384,228
6,021
Exploration expenses
22,315
854
23,701
4,010
Equity-based compensation expenses
7,102
6,344
20,565
19,741
Other non-cash adjustments
574
(208
)
557
491
Adjusted EBITDA
$
224,336
$
147,694
$
618,890
$
392,509
___________________
(1) Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods
presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were
settled.
4
Midstream Services
Three Months Ended September 30,
Nine Months Ended September 30,
2018
2017
2018
2017
(In thousands)
Income before income taxes including non-controlling
interests
$
30,959
$
25,179
$
100,754
$
69,046
Loss on sale of properties
9,590
—
9,590
—
Interest expense, net of capitalized interest
162
20
607
20
Depreciation, depletion and amortization
7,373
4,163
20,902
11,375
Equity-based compensation expenses
442
392
1,222
1,104
Adjusted EBITDA
$
48,526
$
29,754
$
133,075
$
81,545
Well Services
Three Months Ended September 30,
Nine Months Ended September 30,
2018
2017
2018
2017
(In thousands)
Income before income taxes including non-controlling
interests
$
9,158
$
10,832
$
25,316
$
9,195
Depreciation, depletion and amortization
3,940
3,196
11,560
9,417
Equity-based compensation expenses
354
281
1,149
1,015
Adjusted EBITDA
$
13,452
$
14,309
$
38,025
$
19,627
5
Adjusted Net Income (Loss) Attributable to Oasis and
Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share
Adjusted Net Income (Loss) Attributable to Oasis and Adjusted Diluted Earnings (Loss) Attributable to Oasis Per Share are
supplemental non-GAAP financial measures that are used by management and external users of the Company’s financial
statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income (Loss)
Attributable to Oasis as net income (loss) after adjusting first for (1) the impact of certain non-cash items, including non-cash
changes in the fair value of derivative instruments, impairment, and other similar non-cash charges, or non-recurring items, (2)
the impact of net income attributable to non-controlling interests and (3) the non-cash and non-recurring items’ impact on taxes
based on the Company’s effective tax rate applicable to those adjusting items in the same period. Adjusted Net Income (Loss)
Attributable to Oasis is not a measure of net income (loss) as determined by GAAP. The Company defines Adjusted Diluted
Earnings (Loss) Attributable to Oasis Per Share as Adjusted Net Income (Loss) Attributable to Oasis divided by diluted
weighted average shares outstanding.
The following table presents reconciliations of the GAAP financial measure of net income (loss) attributable to Oasis to the
non-GAAP financial measure of Adjusted Net Income (Loss) Attributable to Oasis and the GAAP financial measure of diluted
earnings (loss) attributable to Oasis per share to the non-GAAP financial measure of Adjusted Diluted Earnings (Loss)
Attributable to Oasis Per Share for the periods presented:
6
Three Months Ended September 30,
Nine Months Ended September 30,
2018
2017
2018
2017
(In thousands, except per share data)
Net income (loss) attributable to Oasis
$
62,341
$
(41,214
)
$
(257,273
)
$
(821
)
Gain on sale of properties
(36,869
)
—
(38,823
)
—
Loss on extinguishment of debt
47
—
13,698
—
Net (gain) loss on derivative instruments
48,544
54,310
239,945
(52,297
)
Derivative settlements
(1)
(65,190
)
8,095
(162,013
)
(804
)
Impairment
—
139
384,228
6,021
Amortization of deferred financing costs
1,814
1,728
5,512
5,127
Amortization of debt discount
2,852
2,591
8,201
7,426
Other non-cash adjustments
574
(208
)
557
491
Tax impact
(2)
11,449
(24,941
)
(107,140
)
12,735
Adjusted Net Income (Loss) Attributable to Oasis
$
25,562
$
500
$
86,892
$
(22,122
)
Diluted earnings (loss) attributable to Oasis per share
$
0.20
$
(0.18
)
$
(0.84
)
$
0.00
Gain on sale of properties
(0.12
)
—
(0.13
)
—
Loss on extinguishment of debt
—
—
0.04
—
Net (gain) loss on derivative instruments
0.15
0.23
0.78
(0.22
)
Derivative settlements
(1)
(0.21
)
0.03
(0.52
)
—
Impairment
—
—
1.24
0.03
Amortization of deferred financing costs
0.01
0.01
0.02
0.02
Amortization of debt discount
0.01
0.01
0.03
0.03
Other non-cash adjustments
—
—
—
—
Tax impact
(2)
0.04
(0.10
)
(0.34
)
0.05
Adjusted Diluted Earnings (Loss) Attributable to Oasis Per
Share
$
0.08
$
0.00
$
0.28
$
(0.09
)
Diluted weighted average shares outstanding
(3)
316,387
234,041
308,985
233,248
Effective tax rate applicable to adjustment items
23.7
%
37.4
%
23.7
%
37.4
%
___________________
(1) Cash settlements represent the cumulative gains and losses on the Company’s derivative instruments for the periods
presented and do not include a recovery of costs that were paid to acquire or modify the derivative instruments that were
settled.
(2) The tax impact is computed utilizing the Company’s effective tax rate applicable to the adjustments for certain non-cash
and non-recurring items.
(3) The Company included 3,220,000 and 3,452,000 of unvested stock awards for the three and nine months ended
September 30, 2018, respectively, and 652,000 of unvested stock awards for the three months ended September 30,
2017 in computing Adjusted Diluted Income Attributable to Oasis Per Share due to the dilutive effect under the treasury
stock method. No unvested stock awards were included in computing Adjusted Diluted Loss Attributable to Oasis Per
Share for the nine months ended September 30, 2017 because the effect was anti-dilutive due to Adjusted Net Loss
Attributable to Oasis.
