Adjusted EBITDA Reconciliation
This press release includes the non-GAAP financial measure of Adjusted EBITDA. We believe Adjusted EBITDA helps us evaluate our operating performance and compare our results of operation from period to period without regard to our financing methods or capital structure. We define Adjusted EBITDA as earnings before interest expense, income taxes, depletion, depreciation and amortization, accretion of asset retirement obligations, property impairments, unrealized derivative gains and losses, certain other non-cash items and non-cash stock-based compensation expense, including stock option and grant expense and restricted stock and restricted stock units expense, and net gain or loss on asset sales and inventory impairment. Adjusted EBITDA is not a measure of net (loss) income or cash flows as determined by GAAP. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity.
The following table presents our calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income (loss) and net cash provided by operating activities, respectively, that are of a historical nature. Where references are forward-looking or prospective in nature, and not based on historical fact, the table does not provide a reconciliation. We could not provide such reconciliations without undue hardship because the Adjusted EBITDA numbers included in this press release are estimations, approximations and/or ranges. In addition, it would be difficult for us to present a detailed reconciliation on account of many unknown variables for the reconciling items.
|Year Ended December 31,|
|Unaudited Adjusted EBITDA reconciliation to Net Income (Loss):|
|Net (loss) income||($300||)||$||103,878||($14,425||)||$||6,377||($10,309||)|
|Total income tax provision (benefit)||-||20,023||(9,925||)||3,521||(5,521||)|
|Depletion, depreciation and amortization||7,889||12,127||10,743||15,596||31,754|
|Accretion of asset retirement obligations||70||92||137||155||209|
|Full-cost ceiling impairment||-||22,195||25,244||-||35,673|
|Unrealized loss (gain) on derivatives||211||(3,592||)||2,375||(3,139||)||(5,138||)|
|Stock option and grant expense||205||605||622||824||2,362|
|Restricted stock grants||15||60||34||74||44|
|Net loss (gain) on asset sales and inventory impairment||-||(136,977||)||379||224||154|
|Year Ended December 31,|
Unaudited Adjusted EBITDA reconciliation to Net Cash Provided by Operating Activities:
|Net cash provided by operating activities||$||7,881||$||25,851||$||1,791||$||27,273||$||61,868|
|Net change in operating assets and liabilities||209||(17,888||)||15,717||(2,230||)||(12,594||)|
|Current income tax provision (benefit)||-||10,448||(2,324||)||(1,411||)||(46||)|
Forward-Looking StatementsThis press release 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. "Forward-looking statements" are statements related to future, not past, events. Forward-looking statements are based on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "could," "believe," "would," "anticipate," "intend," "estimate," "expect," "may," "should," "continue," "plan," "predict," "potential," "project" and similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Actual results and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, the following risks related to financial and operational performance: general economic conditions; our ability to execute our business plan, including whether our drilling program is successful; changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural gas and natural gas liquids; ability to replace reserves and efficiently develop current reserves; costs of operations; delays and other difficulties related to producing oil, natural gas and natural gas liquids; ability to make acquisitions on economically acceptable terms; availability of sufficient capital to execute our business plan, including from future cash flows, increases in borrowing base and otherwise; weather and environmental concerns; and other important factors which could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. For further discussions of risks and uncertainties, you should refer to Matador's SEC filings, including the "Risk Factors" section of Matador's Annual Report on Form 10-K for the year ended December 31, 2011. Matador undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release, except as required by law. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.