AESI
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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☐ |
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Accelerated filer |
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☐ |
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☒ |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 30, 2023, the registrant had
Table of Contents
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PART I. |
1 |
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Item 1. |
1 |
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1 |
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2 |
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3 |
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5 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
6 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
27 |
Item 3. |
43 |
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Item 4. |
43 |
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PART II. |
44 |
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Item 1. |
44 |
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Item 1A. |
44 |
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Item 2. |
44 |
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Item 3. |
44 |
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Item 4. |
44 |
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Item 5. |
44 |
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Item 6. |
44 |
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46 |
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Atlas Energy Solutions Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
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September 30, |
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December 31, |
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2023 |
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2022 |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable |
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Accounts receivable - related parties |
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Inventories |
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Spare part inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Finance lease right-of-use assets |
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Operating lease right-of-use assets |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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Liabilities, redeemable noncontrolling interest, and stockholders' and members' equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accounts payable - related parties |
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Accrued liabilities |
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Current portion of long-term debt |
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Other current liabilities |
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Total current liabilities |
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Long-term debt, net of discount and deferred financing costs |
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Deferred tax liabilities |
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Other long-term liabilities |
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Total liabilities |
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Redeemable noncontrolling interest |
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Stockholders’ / members’ equity: |
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Members' equity |
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Preferred stock, $ |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in-capital |
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Accumulated deficit |
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( |
) |
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Total stockholders' and members' equity |
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( |
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Total liabilities, redeemable noncontrolling interest and stockholders’ and members’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
1
Atlas Energy Solutions Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Product sales |
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$ |
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$ |
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$ |
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$ |
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Service sales |
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Total sales |
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Cost of sales (excluding depreciation, depletion and accretion expense) |
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Depreciation, depletion and accretion expense |
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Gross profit |
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Selling, general and administrative expense (including stock and unit-based compensation expense of $ |
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Operating income |
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Interest expense, net |
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( |
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( |
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( |
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( |
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Other income |
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Income before income taxes |
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Income tax expense |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Less: Pre-IPO net income attributable to Atlas Sand Company, LLC |
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Less: Net income attributable to redeemable noncontrolling interest |
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Net income attributable to Atlas Energy Solutions, Inc. |
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$ |
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$ |
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Net income per Class A common share |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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Weighted average Class A common shares outstanding |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Atlas Energy Solutions Inc.
Condensed Consolidated Statements of Stockholders' and Members' Equity and Redeemable Noncontrolling Interest
(Unaudited)
(In thousands)
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Redeemable |
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Members' |
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Stockholders' |
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Noncontrolling |
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Equity |
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Class A |
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Class B |
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Additional |
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Accumulated |
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and Members' |
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Interest |
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Value |
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Shares |
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Value |
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Shares |
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Value |
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Paid-In-Capital |
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Deficit |
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Equity |
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Balance at December 31, 2022 |
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$ |
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$ |
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— |
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$ |
— |
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— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
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Member distributions |
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— |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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Net income prior |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Effect of Reorganization and reclassification to redeemable noncontrolling interest (Note 1) |
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( |
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( |
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— |
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( |
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Issuance of common stock in |
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— |
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— |
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— |
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— |
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— |
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Deferred tax liability arising |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net income after IPO |
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— |
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— |
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— |
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— |
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— |
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— |
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$ |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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$ |
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( |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Dividend equivalent rights ($ |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Other distributions to redeemable non-controlling interest unitholders |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Redemption of operating units of Atlas Sand Operating, LLC for Class A common stock |
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( |
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— |
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( |
) |
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( |
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— |
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Deferred tax liability arising |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Issuance of common stock upon vesting of RSUs, net of shares withheld for income taxes |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Adjustment of redeemable noncontrolling interest to redemption amount |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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( |
) |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
— |
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$ |
( |
) |
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$ |
( |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Atlas Energy Solutions Inc.
Condensed Consolidated Statements of Stockholders' and Members' Equity and Redeemable Noncontrolling Interest (Continued)
(Unaudited)
(In thousands)
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Redeemable |
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Members' |
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Noncontrolling |
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Equity |
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Class A |
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Class B |
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Additional |
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Accumulated |
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Stockholders' |
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Interest |
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Value |
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Shares |
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Value |
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Shares |
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Value |
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Paid-In-Capital |
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Deficit |
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and Members' |
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Balance at December 31, 2021 |
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$ |
— |
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$ |
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— |
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$ |
— |
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— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
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Member distributions |
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— |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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Unit-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at September 30, 2022 |
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$ |
— |
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$ |
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— |
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$ |
— |
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— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Atlas Energy Solutions Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
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Nine Months Ended |
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September 30, |
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2023 |
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2022 |
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Operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation, depletion and accretion expense |
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Amortization of debt discount |
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Amortization of deferred financing costs |
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Stock and unit-based compensation |
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Deferred income tax |
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Commodity derivatives gain |
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( |
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Settlements on commodity derivatives |
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Other |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
) |
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( |
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Accounts receivable - related party |
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Inventories |
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( |
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Spare part inventories |
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( |
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( |
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Prepaid expenses and other current assets |
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( |
) |
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Other long-term assets |
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( |
) |
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( |
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Accounts payable |
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Accounts payable - related parties |
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( |
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Deferred revenue |
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Accrued liabilities and other liabilities |
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Net cash provided by operating activities |
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Investing activities: |
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Purchases of property, plant and equipment |
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( |
) |
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( |
) |
Net cash used in investing activities |
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( |
) |
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( |
) |
Financing Activities: |
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Net proceeds from IPO |
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Payment of offering costs |
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( |
) |
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Member distributions prior to IPO |
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( |
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( |
) |
Principal payments on term loan borrowings |
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( |
) |
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( |
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Prepayment fee on 2021 Term Loan Credit Facility |
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( |
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Issuance costs associated with debt financing |
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( |
) |
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( |
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Payments under finance leases |
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( |
) |
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( |
) |
Dividends paid to Class A common stockholders |
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( |
) |
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Distributions paid to Atlas Sand Operating, LLC unitholders |
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( |
) |
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Net cash provided by (used in) financing activities |
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