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Non-GAAP Financial Measures
TETRA occasionally uses numerical measures in investor presentations, earnings conference calls and other forums which are or may be considered Non-GAAP Financial Measures. We have provided below for your reference supplemental financial disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation. This supplemental financial disclosure should be considered within the context of our complete audited financial results for the given period, which are available on the SEC Filings page of our website.

Capitalization
Enterprise Value
Free Cash Flow
Market Capitalization
Net Capital Employed
Adjusted Net Income Per Share

Capitalization
Capitalization is defined as total stockholders' equity plus long-term debt and the current portion of long-term debt. A reconciliation as of June 30, 2008, and December 31, 2007, and 2006, is shown below:


  June 30, 2008

Dec. 31, 2007

Dec. 31, 2006  
  (In Thousands)  

Total stockholders' equity

$401,309

 

$447,919

 

$420,380

 

Long-term debt

390,297

 

358,024

 

336,381

 

Current portion of long-term debt

-

 

-

 

167

 

Capitalization

$791,606

 

$805,943

 

$756,928

 

 

 

 

 

 

 



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Enterprise Value
Enterprise Value is defined as market capitalization plus long-term debt and the current portion of long-term debt, less cash (other than restricted cash). Conceptually, Enterprise Value is a measure of the market value of a company if it were free of debt. A reconciliation as of June 30, 2008, and December 31, 2007, and 2006, is shown below:


  June 30, 2008

Dec. 31, 2007

Dec. 31, 2006  
  (In Thousands)  

Market capitalization

$1,792,666

 

$1,182,090

 

$1,913,998

 

Long-term debt

390,297

 

358,024

 

336,381

 

Current portion of long-term debt

 

 

167

 

Cash

(33,848

)

(21,833

)

(5,535 )

Enterprise value

$2,149,115

 

$1,518,281

 

$2,245,011

 

 

 

 

 

 

 

 



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Free Cash Flow
Free Cash Flow is defined as net cash provided by operating activities minus net cash used in investing activities (from the consolidated statements of cash flows). Net cash provided by operating activities consists of net income, plus depreciation, depletion and amortization, plus the change in deferred income taxes, plus other non-cash items, plus changes in working capital, plus other changes in current operating assets and liabilities. Net cash used in investing activities includes capital expenditures, acquisitions, and other cash used in investing activities. Management views Free Cash Flow, a non-GAAP measure, as a measure of TETRA's after-tax cash flow available to reduce debt, add to cash balances, pay dividends, repurchase stock, and fund other financing activities. A reconciliation of net cash provided by operating activities to Free Cash Flow for the six months ended June 30, 2008, and for the years ended December 31, 2007, and 2006, is shown below:


  6 Mos Ended June 30, 2008

Year Ended Dec. 31, 2007

 Year Ended Dec. 31, 2006  
  (In Thousands)  

Net cash provided by operating activities

$114,102

  

$209,039

 

$47,781

 

Net cash used in investing activities

(133,362

)

(235,178

)

(241,892

Free cash flow

$(19,260

)

$(26,139

)

$(194,111

 

 

 

 

 

 

 



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Market Capitalization
Market Capitalization is defined as the price per share of stock at the end of a period multiplied by the average number of fully diluted shares outstanding, as reported in the Company's most recently filed Form 10-K or 10-Q. A reconciliation as of June 30, 2008, and December 31, 2007,  and 2006, is shown below:


  June 30, 2008

Dec. 31, 2007

Dec. 31, 2006  
  (In Thousands, Except Per Share Amounts)  

Stock price per share at end of period

$23.71

 

$15.57

 

$25.58

 

Average number of fully diluted shares outstanding

75,608

 

75,921

 

74,824

 

Market capitalization

$1,792,666

 

$1,182,090

 

$1,913,998

 

 

 

 

 

 

 

 



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Net Capital Employed
Net Capital Employed is defined as total stockholders' equity plus long-term debt and the current portion of long-term debt, less cash (other than restricted cash). A reconciliation as of June 30, 2008, and December 31, 2007, and 2006, is shown below:


  June 30, 2008

Dec. 31, 2007

Dec. 31, 2006
(In Thousands)

Total stockholders' equity

$401,309

 

$447,919

 

$420,380

Long-term debt

390,297

 

358,024

 

336,381

Current portion of long-term debt

 

 

167

Cash

(33,848

)

(21,833

)

(5,535)

Net capital employed

$757,758

 

$784,110

 

$751,393

 

 

 

 

 

 



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Adjusted Net Income Per Share
GAAP net income per diluted share is reconciled to the non-GAAP measure "adjusted net income per diluted share" for the fourth quarter and year 2007, as those terms are used in our February 26, 2008 press release.

Please click here to view the financial table.



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