Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Revenue was lower than both the prior quarter and the same quarter last year, but operating cash flow improved sharply, driving a large increase in free cash flow and free cash flow margin. The filing notes increased volumes due to producer activity and highlights the company's primarily fee-based earnings structure.
- Cash conversion strengthened as operating cash flow rose while capital expenditure decreased relative to the prior quarter, and compared to the year-ago quarter, operating cash flow increased substantially with only a modest rise in capital expenditure, resulting in a much higher free cash flow and margin.
- Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher. Compared to the same quarter last year, revenue was lower but operating cash flow and free cash flow were substantially higher, and free cash flow margin improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$2.4B
Trailing twelve-month free cash flow.
Quarter free cash flow
$932.0M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.2B
Cash generated by operations before capital spending.
CapEx
$289.0M
Capital spending and related asset purchases.
FCF margin
20.6%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-06-30 | $6.0B | $787.0M | $302.0M | $485.0M | 8.1% |
| 2022-09-30 | $5.9B | $616.0M | $327.0M | $289.0M | 4.9% |
| 2022-12-31 | $5.0B | $1.0B | $316.0M | $724.0M | 14.4% |
| 2023-03-31 | $4.5B | $1.2B | $289.0M | $932.0M | 20.6% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 88.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 6.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Improvement
Operating cash flow increased while revenue declined, indicating a strong shift in cash generation efficiency. This was the primary factor behind the rise in free cash flow and margin.
The higher free cash flow provides increased financial flexibility.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Cash conversion strengthened as operating cash flow rose while capital expenditure decreased relative to the prior quarter, and compared to the year-ago quarter, operating cash flow increased substantially with only a modest rise in capital expenditure, resulting in a much higher free cash flow and margin.
Compared to the prior quarter, revenue was lower but operating cash flow and free cash flow were higher. Compared to the same quarter last year, revenue was lower but operating cash flow and free cash flow were substantially higher, and free cash flow margin improved.
Monitor the remaining commodity price exposure in the Natural Gas Gathering and Processing segment, as the filing notes that approximately 70% of such exposure is hedged.