SEC Comment Letter 0000000000-24-005392 to Archrock, Inc. (AROC) (CIK 0001389050) (AROC)
Archrock, Inc. (AROC) (CIK 0001389050)
Date: May 13, 2024 · CIK: 0001389050 · Accession: 0000000000-24-005392
AI Filing Summary & Sentiment
File numbers found in text: 001-33666
Letter
United States securities and exchange commission logo May 13, 2024 Douglas S. Aron Chief Financial Officer Archrock, Inc. 9807 Katy Freeway , Suite 100 , Houston, Texas 77024 Re:Archrock, Inc. Form 10-K for Fiscal Year Ended December 31, 2023 Filed February 21, 2024 Form 8-K filed on May 1, 2024 File No. 001-33666 Dear Douglas S. Aron: We have reviewed your filing and have the following comments. Please respond to this letter within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe a comment applies to your facts and circumstances, please tell us why in your response. After reviewing your response to this letter, we may have additional comments. Form 10-K for Fiscal Year Ended December 31, 2023 Management's Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measures, page 39 1.We note you present "Gross Margin" as a non-GAAP measure and define it as total revenue less cost of sales (excluding depreciation and amortization). We also note that you reconcile this measure to net income. Please revise your reconciliation of this non- GAAP measure to gross margin as defined by GAAP, the most directly comparable GAAP measure in accordance with Item 10(e)(1)(i)(B) of Regulation S-K. If you do not believe gross margin that includes depreciation and amortization is the most directly comparable GAAP measure, please tell us why in your response. In addition, retitle this measure throughout your filings, including similar segment measures mentioned in Note 29 and information provided in your press releases, to avoid confusion with the GAAP measure of gross margin.
FirstName LastNameDouglas S. Aron Comapany NameArchrock, Inc. May 13, 2024 Page 2 FirstName LastName Douglas S. Aron Archrock, Inc. May 13, 2024 Page 2 Form 8-K filed May 1, 2024 Exhibit 99.1 - Press release dated April 30, 2024, announcing Archrock, Inc.'s results of operations for the quarter ended March 31, 2024 Reconciliation of Net Cash Flows Provided By Operating Activities to Free Cash Flow and Free Cash Flow After Dividend, page 8 2.We note you define free cash flow as net cash provided by (used for) operating activities plus net cash provided by (used in) investing activities which differs from the typical calculation of this measure (i.e., cash flows from operations less capital expenditures). In future filings, please revise the titles of your non-GAAP measures "free cash flow" and "free cash flow after dividend" to alternative titles in order to avoid potential confusion. Refer to Question 102.07 of the SEC Staff's Compliance & Disclosure Interpretations on Non-GAAP Financial Measures. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. Please contact Joanna Lam at 202-551-3476 or Craig Arakawa at 202-551-3650 if you have questions regarding comments on the financial statements and related matters. Sincerely, Division of Corporation Finance Office of Energy & Transportation
Show Raw Text
United States securities and exchange commission logo
May 13, 2024
Douglas S. Aron
Chief Financial Officer
Archrock, Inc.
9807 Katy Freeway , Suite 100 ,
Houston, Texas 77024
Re:Archrock, Inc.
Form 10-K for Fiscal Year Ended December 31, 2023
Filed February 21, 2024
Form 8-K filed on May 1, 2024
File No. 001-33666
Dear Douglas S. Aron:
We have reviewed your filing and have the following comments.
Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
After reviewing your response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2023
Management's Discussion and Analysis of Financial Condition and Results of Operations
Non-GAAP Financial Measures, page 39
1.We note you present "Gross Margin" as a non-GAAP measure and define it as total
revenue less cost of sales (excluding depreciation and amortization). We also note that
you reconcile this measure to net income. Please revise your reconciliation of this non-
GAAP measure to gross margin as defined by GAAP, the most directly comparable
GAAP measure in accordance with Item 10(e)(1)(i)(B) of Regulation S-K. If you do not
believe gross margin that includes depreciation and amortization is the most directly
comparable GAAP measure, please tell us why in your response. In addition, retitle this
measure throughout your filings, including similar segment measures mentioned in Note
29 and information provided in your press releases, to avoid confusion with the GAAP
measure of gross margin.
FirstName LastNameDouglas S. Aron
Comapany NameArchrock, Inc.
May 13, 2024 Page 2
FirstName LastName
Douglas S. Aron
Archrock, Inc.
May 13, 2024
Page 2
Form 8-K filed May 1, 2024
Exhibit 99.1 - Press release dated April 30, 2024, announcing Archrock, Inc.'s results of
operations for the quarter ended March 31, 2024
Reconciliation of Net Cash Flows Provided By Operating Activities to Free Cash Flow and Free
Cash Flow After Dividend, page 8
2.We note you define free cash flow as net cash provided by (used for) operating activities
plus net cash provided by (used in) investing activities which differs from the
typical calculation of this measure (i.e., cash flows from operations less capital
expenditures). In future filings, please revise the titles of your non-GAAP measures "free
cash flow" and "free cash flow after dividend" to alternative titles in order to avoid
potential confusion. Refer to Question 102.07 of the SEC Staff's Compliance
& Disclosure Interpretations on Non-GAAP Financial Measures.
We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
Please contact Joanna Lam at 202-551-3476 or Craig Arakawa at 202-551-3650 if you
have questions regarding comments on the financial statements and related matters.
Sincerely,
Division of Corporation Finance
Office of Energy & Transportation