Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 05, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Securities Act File Number | 001-40955 | |
Entity Registrant Name | Aris Water Solutions, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-1022110 | |
Entity Address, Address Line One | 9651 Katy Freeway | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77024 | |
City Area Code | 832 | |
Local Phone Number | 304-7003 | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value per share | |
Trading Symbol | ARIS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001865187 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 30,567,279 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 27,543,565 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Cash | $ 11,526 | $ 5,063 |
Other Receivables | 13,432 | 12,767 |
Prepaids and Deposits | 5,389 | 8,364 |
Total Current Assets | 123,788 | 108,550 |
Fixed Assets | ||
Property, Plant and Equipment | 1,116,165 | 1,041,703 |
Accumulated Depreciation | (141,019) | (121,989) |
Total Property, Plant and Equipment, Net | 975,146 | 919,714 |
Intangible Assets, Net | 213,750 | 232,277 |
Goodwill | 34,585 | 34,585 |
Deferred Income Tax Assets, Net | 18,510 | 22,634 |
Right-of-Use Assets | 15,839 | 16,726 |
Other Assets | 5,445 | 5,995 |
Total Assets | 1,387,063 | 1,340,481 |
Liabilities and Stockholders' Equity | ||
Insurance Premium Financing Liability | 1,855 | 5,463 |
Accrued and Other Current Liabilities | 50,261 | 64,416 |
Total Current Liabilities | 94,907 | 96,698 |
Long-Term Debt, Net of Debt Issuance Costs | 444,727 | 421,792 |
Asset Retirement Obligations | 20,904 | 19,030 |
Tax Receivable Agreement Liability | 98,274 | 98,274 |
Other Long-Term Liabilities | 16,071 | 16,794 |
Total Liabilities | 674,883 | 652,588 |
Commitments and Contingencies (see Note 10) | ||
Stockholders' Equity | ||
Preferred Stock $0.01 par value, 50,000,000 authorized. None issued or outstanding as of June 30, 2024 and December 31, 2023 | ||
Treasury Stock (at Cost), 551,288 shares as of June 30, 2024; 418,319 shares as of December 31, 2023 | (6,730) | (5,133) |
Additional Paid-in-Capital | 335,183 | 328,543 |
Retained Earnings (Accumulated Deficit) | 7,235 | (87) |
Total Stockholders' Equity Attributable to Aris Water Solutions, Inc. | 336,273 | 323,904 |
Noncontrolling Interest | 375,907 | 363,989 |
Total Stockholders' Equity | 712,180 | 687,893 |
Total Liabilities and Stockholders' Equity | 1,387,063 | 1,340,481 |
Class A Common Stock | ||
Stockholders' Equity | ||
Common stock value | 310 | 306 |
Class B Common Stock | ||
Stockholders' Equity | ||
Common stock value | 275 | 275 |
Nonrelated Party | ||
Assets | ||
Accounts Receivable, Net | 64,309 | 59,393 |
Liabilities and Stockholders' Equity | ||
Accounts Payable | 42,112 | 25,925 |
Related Party | ||
Assets | ||
Accounts Receivable, Net | 29,132 | 22,963 |
Liabilities and Stockholders' Equity | ||
Accounts Payable | $ 679 | $ 894 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Treasury Stock (in shares) | 551,288 | 418,319 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 31,104,226 | 30,669,932 |
Common stock, outstanding (in shares) | 30,552,938 | 30,251,613 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 180,000,000 | 180,000,000 |
Common stock, issued (in shares) | 27,543,565 | 27,543,565 |
Common stock, outstanding (in shares) | 27,543,565 | 27,543,565 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue | ||||
Total Revenue | $ 101,117 | $ 96,633 | $ 204,523 | $ 188,204 |
Cost of Revenue | ||||
Direct Operating Costs | 40,194 | 44,446 | 79,840 | 88,291 |
Depreciation, Amortization and Accretion | 19,707 | 19,086 | 39,128 | 37,692 |
Total Cost of Revenue | 59,901 | 63,532 | 118,968 | 125,983 |
Operating Costs and Expenses | ||||
General and Administrative | 16,037 | 12,682 | 30,538 | 24,481 |
Research and Development Expense | 1,128 | 650 | 2,193 | 1,058 |
Other Operating Expense (Income), Net | 132 | (192) | 1,047 | 25 |
Total Operating Expenses | 17,297 | 13,140 | 33,778 | 25,564 |
Operating Income | 23,919 | 19,961 | 51,777 | 36,657 |
Other Expense | ||||
Interest Expense, Net | 8,813 | 7,971 | 17,251 | 15,632 |
Other | 1 | |||
Total Other Expense | 8,813 | 7,971 | 17,252 | 15,632 |
Income Before Income Taxes | 15,106 | 11,990 | 34,525 | 21,025 |
Income Tax Expense | 1,994 | 1,559 | 4,583 | 2,886 |
Net Income | 13,112 | 10,431 | 29,942 | 18,139 |
Net Income Attributable to Noncontrolling Interest | 7,147 | 5,733 | 16,354 | 10,063 |
Net Income Attributable to Aris Water Solutions, Inc. | $ 5,965 | $ 4,698 | $ 13,588 | $ 8,076 |
Net Income Per Share of Class A Common Stock | ||||
Basic (in dollars per share) | $ 0.18 | $ 0.15 | $ 0.41 | $ 0.25 |
Diluted (in dollars per share) | $ 0.18 | $ 0.15 | $ 0.41 | $ 0.25 |
Weighted Average Shares of Class A Common Stock Outstanding | ||||
Basic (in shares) | 30,549,092 | 30,036,593 | 30,451,553 | 29,985,869 |
Diluted (in shares) | 30,589,997 | 30,036,593 | 30,472,005 | 29,985,869 |
Other Revenue | ||||
Revenue | ||||
Total Revenue | $ 440 | $ 645 | $ 969 | $ 1,110 |
Nonrelated Party | Produced Water Handling | ||||
Revenue | ||||
Total Revenue | 54,815 | 49,716 | 113,921 | 95,816 |
Nonrelated Party | Water Solutions | ||||
Revenue | ||||
Total Revenue | 13,795 | 14,928 | 25,497 | 28,810 |
Related Party | ||||
Revenue | ||||
Total Revenue | 32,000 | 31,300 | 64,100 | 62,500 |
Related Party | Produced Water Handling | ||||
Revenue | ||||
Total Revenue | 28,614 | 23,181 | 55,441 | 46,321 |
Related Party | Water Solutions | ||||
Revenue | ||||
Total Revenue | $ 3,453 | $ 8,163 | $ 8,695 | $ 16,147 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash Flow from Operating Activities | ||
Net Income | $ 29,942 | $ 18,139 |
Adjustments to reconcile Net Income to Net Cash provided by Operating Activities: | ||
Deferred Income Tax Expense | 3,770 | 2,837 |
Depreciation, Amortization and Accretion | 39,128 | 37,692 |
Stock-Based Compensation | 8,214 | 5,585 |
Abandoned Well Costs | 310 | |
Loss on Disposal of Assets, Net | 114 | 57 |
Abandoned Projects | 745 | 128 |
Amortization of Debt Issuance Costs, Net | 1,436 | 1,041 |
Other | 735 | 376 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | (5,524) | 15,097 |
Accounts Receivable from Affiliate | (6,169) | 18,308 |
Other Receivables | (665) | (4,005) |
Prepaids and Deposits | 2,975 | 1,583 |
Accounts Payable | 1,818 | (1,001) |
Payables to Affiliate | (215) | (578) |
Accrued Liabilities and Other | (18,467) | 1,208 |
Net Cash Provided by Operating Activities | 58,147 | 96,467 |
Cash Flow from Investing Activities | ||
Property, Plant and Equipment Expenditures | (56,879) | (77,981) |
Deposit on Assets Held for Sale | 1,750 | |
Proceeds from the Sale of Property, Plant and Equipment | 94 | |
Net Cash Used in Investing Activities | (56,785) | (76,231) |
Cash Flow from Financing Activities | ||
Dividends and Distributions Paid | (11,817) | (10,743) |
Repurchase of Shares | (1,326) | (599) |
Repayment of Credit Facility | (15,000) | (36,000) |
Proceeds from Credit Facility | 37,000 | 30,000 |
Payment of Insurance Premium Financing | (3,756) | |
Net Cash Provided by (Used in) Financing Activities | 5,101 | (17,342) |
Net Increase in Cash | 6,463 | 2,894 |
Cash, Beginning of Period | 5,063 | 1,122 |
Cash, End of Period | 11,526 | 4,016 |
Supplementary Cash Flow Data | ||
Cash Paid for Interest | 16,805 | 17,413 |
Cash Paid for Income Taxes | $ 561 | $ 80 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' and Members' Equity - USD ($) $ in Thousands | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings (Accumulated Deficit) | Non-controlling Interest | Class A Common Stock | Class B Common Stock | Total |
Beginning Balance at Dec. 31, 2022 | $ 300 | $ 276 | $ 319,545 | $ (2,891) | $ (7,722) | $ 347,579 | $ 657,087 | ||
Beginning Balance (in shares) at Dec. 31, 2022 | 30,115,979 | 27,575,519 | |||||||
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2022 | 196,762 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Redemption of Class B Shares for Class A Shares | 267 | (267) | |||||||
Redemption of Class B Shares for Class A Shares (in shares) | 20,953 | (20,953) | |||||||
Stock-based Compensation Expense | $ 2 | 2,383 | 83 | 2,468 | |||||
Stock-based Compensation Expense (in shares) | 175,717 | ||||||||
Increase in TRA Liability Related to Share Redemption, Net | (110) | (110) | |||||||
Deferred Tax Assets (Liabilities) Acquired | 82 | 82 | |||||||
Dividends and Distributions (in dollars per share) | (2,826) | (2,588) | (5,414) | ||||||
Purchase of Treasury Stock | $ (599) | (599) | |||||||
Purchase of Treasury Stock (in shares) | 42,293 | ||||||||
Net Income | 3,378 | 4,330 | 7,708 | ||||||
Ending Balance at Mar. 31, 2023 | $ 302 | $ 276 | 322,167 | $ (3,490) | (7,170) | 349,137 | 661,222 | ||
Ending Balance (in shares) at Mar. 31, 2023 | 30,312,649 | 27,554,566 | |||||||
Treasury Stock, Ending Balance (in shares) at Mar. 31, 2023 | 239,055 | ||||||||
Beginning Balance at Dec. 31, 2022 | $ 300 | $ 276 | 319,545 | $ (2,891) | (7,722) | 347,579 | 657,087 | ||
Beginning Balance (in shares) at Dec. 31, 2022 | 30,115,979 | 27,575,519 | |||||||
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2022 | 196,762 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Redemption of Class B Shares for Class A Shares (in shares) | 21,477 | ||||||||
Net Income | 18,139 | ||||||||
Ending Balance at Jun. 30, 2023 | $ 302 | $ 276 | 323,799 | $ (3,490) | (5,291) | 353,770 | 669,366 | ||
Ending Balance (in shares) at Jun. 30, 2023 | 30,313,173 | 27,554,042 | |||||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2023 | 239,055 | ||||||||
Beginning Balance at Mar. 31, 2023 | $ 302 | $ 276 | 322,167 | $ (3,490) | (7,170) | 349,137 | 661,222 | ||
Beginning Balance (in shares) at Mar. 31, 2023 | 30,312,649 | 27,554,566 | |||||||
Treasury Stock, Beginning Balance (in shares) at Mar. 31, 2023 | 239,055 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Redemption of Class B Shares for Class A Shares | 7 | (7) | |||||||
Redemption of Class B Shares for Class A Shares (in shares) | 524 | (524) | |||||||
Stock-based Compensation Expense | 1,626 | 1,491 | 3,117 | ||||||
Increase in TRA Liability Related to Share Redemption, Net | (3) | (3) | |||||||
Deferred Tax Assets (Liabilities) Acquired | 2 | 2 | |||||||
Dividends and Distributions (in dollars per share) | (2,819) | (2,584) | (5,403) | ||||||
Net Income | 4,698 | 5,733 | 10,431 | ||||||
Ending Balance at Jun. 30, 2023 | $ 302 | $ 276 | 323,799 | $ (3,490) | (5,291) | 353,770 | 669,366 | ||
Ending Balance (in shares) at Jun. 30, 2023 | 30,313,173 | 27,554,042 | |||||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2023 | 239,055 | ||||||||
Beginning Balance at Dec. 31, 2023 | $ 306 | $ 275 | 328,543 | $ (5,133) | (87) | 363,989 | $ 687,893 | ||
Beginning Balance (in shares) at Dec. 31, 2023 | 30,669,932 | 27,543,565 | 30,251,613 | 27,543,565 | |||||
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2023 | 418,319 | 418,319 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based Compensation Expense | $ 4 | 4,503 | (986) | $ 3,521 | |||||
Stock-based Compensation Expense (in shares) | 428,044 | ||||||||
Deferred Tax Assets (Liabilities) Acquired | 224 | 224 | |||||||
Dividends and Distributions (in dollars per share) | (2,884) | (2,601) | (5,485) | ||||||
Purchase of Treasury Stock | (18) | $ (1,581) | 18 | (1,581) | |||||
Purchase of Treasury Stock (in shares) | 131,921 | ||||||||
Net Income | 7,623 | 9,207 | 16,830 | ||||||
Ending Balance at Mar. 31, 2024 | $ 310 | $ 275 | 333,252 | $ (6,714) | 4,652 | 369,627 | 701,402 | ||
Ending Balance (in shares) at Mar. 31, 2024 | 31,097,976 | 27,543,565 | |||||||
Treasury Stock, Ending Balance (in shares) at Mar. 31, 2024 | 550,240 | ||||||||
Beginning Balance at Dec. 31, 2023 | $ 306 | $ 275 | 328,543 | $ (5,133) | (87) | 363,989 | $ 687,893 | ||
Beginning Balance (in shares) at Dec. 31, 2023 | 30,669,932 | 27,543,565 | 30,251,613 | 27,543,565 | |||||
Treasury Stock, Beginning Balance (in shares) at Dec. 31, 2023 | 418,319 | 418,319 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Redemption of Class B Shares for Class A Shares (in shares) | 0 | ||||||||
Net Income | $ 29,942 | ||||||||
Ending Balance at Jun. 30, 2024 | $ 310 | $ 275 | 335,183 | $ (6,730) | 7,235 | 375,907 | $ 712,180 | ||
Ending Balance (in shares) at Jun. 30, 2024 | 31,104,226 | 27,543,565 | 30,552,938 | 27,543,565 | |||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2024 | 551,288 | 551,288 | |||||||
Beginning Balance at Mar. 31, 2024 | $ 310 | $ 275 | 333,252 | $ (6,714) | 4,652 | 369,627 | $ 701,402 | ||
Beginning Balance (in shares) at Mar. 31, 2024 | 31,097,976 | 27,543,565 | |||||||
Treasury Stock, Beginning Balance (in shares) at Mar. 31, 2024 | 550,240 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock-based Compensation Expense | 2,509 | 2,184 | 4,693 | ||||||
Stock-based Compensation Expense (in shares) | 6,250 | ||||||||
Deferred Tax Assets (Liabilities) Acquired | (578) | (578) | |||||||
Dividends and Distributions (in dollars per share) | (3,382) | (3,051) | (6,433) | ||||||
Purchase of Treasury Stock | $ (16) | (16) | |||||||
Purchase of Treasury Stock (in shares) | 1,048 | ||||||||
Net Income | 5,965 | 7,147 | 13,112 | ||||||
Ending Balance at Jun. 30, 2024 | $ 310 | $ 275 | $ 335,183 | $ (6,730) | $ 7,235 | $ 375,907 | $ 712,180 | ||
Ending Balance (in shares) at Jun. 30, 2024 | 31,104,226 | 27,543,565 | 30,552,938 | 27,543,565 | |||||
Treasury Stock, Ending Balance (in shares) at Jun. 30, 2024 | 551,288 | 551,288 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' and Members' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Stockholders' and Members' Equity | ||||
Dividends and Distributions Declared (in dollars per share) | $ 0.105 | $ 0.09 | $ 0.09 | $ 0.09 |
Organization and Background of
Organization and Background of Business | 6 Months Ended |
Jun. 30, 2024 | |
Organization and Background of Business | |
Organization and Background of Business | 1. Aris Water Solutions, Inc. (“Aris Inc.,” the “Company,” “we,” “our,” or “us”) is an independent, environmentally-focused company headquartered in Houston, Texas, that, through its controlling interest in Solaris Midstream Holdings, LLC, a Delaware limited liability company (“Solaris LLC”), provides sustainability-enhancing services to oil and natural gas operators. We strive to build long-term value through the development, construction and operation of integrated produced water handling and recycling infrastructure that provides high-capacity, comprehensive produced water management, recycling and supply solutions for operators in the Permian Basin. We are the parent holding company of Solaris LLC. As the sole managing member of Solaris LLC, we operate and control the business and affairs of Solaris LLC, and through Solaris LLC and its subsidiaries, conduct our business. We consolidate the financial results of Solaris LLC and report a noncontrolling interest related to the portion of Solaris LLC units not owned by us. These unaudited condensed consolidated financial statements reflect the financial statements of the consolidated Company including Aris Inc., Solaris LLC and Solaris LLC’s subsidiaries. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2024 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation All dollar amounts, except per share/unit amounts, in the condensed consolidated financial statements and tables in the notes are stated in thousands of dollars unless otherwise indicated. Interim Financial Statements These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These financial statements have not been audited by our independent registered public accounting firm. These condensed consolidated financial statements include the adjustments and accruals, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 . Consolidation We have determined that the members with equity at risk in Solaris LLC lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact Solaris LLC’s economic performance; therefore, Solaris LLC is considered a variable interest entity. As the managing member of Solaris LLC, we operate and control all of the business and affairs of Solaris LLC, as well as have the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate Solaris LLC . Noncontrolling Interest As of June 30, 2024, we own approximately 53% of Solaris LLC. Our condensed consolidated financial statements include a noncontrolling interest representing the percentage of Solaris LLC units not held by us . Use of Estimates Management has made certain estimates and assumptions that affect reported amounts in these condensed consolidated financial statements and disclosures of contingencies. These estimates include, among others, determining the fair values of assets acquired, liabilities assumed, and/or contingent consideration paid in acquisitions or nonmonetary exchanges or disposed of through sale, determining the fair value and related impairment of long-lived assets, determining the fair value of performance-based restricted stock units (“PSUs”), useful lives of property, plant and equipment and amortizable intangible assets, goodwill impairment testing, the fair value of asset retirement obligations, accruals for environmental matters, the income tax provision, valuation allowances for deferred tax assets and our Tax Receivable Agreement (“TRA”) liability. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including current economic and industry conditions. Actual results could differ from management’s estimates as additional information or actual results become available in the future, and those differences could be material. Reclassification of Prior Year Presentation Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Significant Accounting Policies See Note 2. Significant Accounting Policies Fair Value Information The fair value of our 7.625% Senior Sustainability-Linked Notes (the “Notes”), which are fixed-rate debt, is estimated based on the published market prices for the same or similar issues. Management has designated this measurement as a Level 2 fair value measurement. The fair value of our Credit Facility (as defined below) approximates carrying value as the debt bears interest at a variable rate which is reflective of current rates otherwise available to us. Management has designated this measurement as Level 3. Fair value information regarding our debt is as follows: (in thousands) June 30, 2024 December 31, 2023 Carrying Fair Carrying Fair Amount Value Amount Value Senior Sustainability-Linked Notes $ 400,000 $ 401,500 $ 400,000 $ 405,090 Credit Facility $ 48,000 $ 48,000 $ 26,000 $ 26,000 The carrying values of our other financial instruments, consisting of cash, accounts receivable, accounts payable and our insurance premium financing liability, approximate their fair values due to the short maturity of such instruments . Intangible Assets Intangible assets are net of accumulated amortization of $152.9 million and $134.4 million at June 30, 2024 and December 31, 2023, respectively . Related Parties We and ConocoPhillips, one of our principal owners, are parties to a long-term water gathering and handling agreement, pursuant to which ConocoPhillips dedicates all the produced water generated from its current and future acreage in a defined area of mutual interest in New Mexico and Texas. As of June 30 , 2024 and December 31, 2023, we had receivables of $29.1 million and $23.0 million, respectively, from ConocoPhillips that were recorded in “Accounts Receivable from Affiliate” on the condensed consolidated balance sheet. As of June 30 , 2024 and December 31, 2023, we had payables of $0.7 million and $0.9 million, respectively, to ConocoPhillips that were recorded in “Payables to Affiliate” on the condensed consolidated balance sheet. Revenues related to ConocoPhillips were $32.0 million and $64.1 million, respectively, for the three and six months ended June 30 , 2024. Revenues related to ConocoPhillips were $31.3 million and $62.5 million, respectively, for the three and six months ended June 30 , 202 3 . Collaborative Arrangements We have a beneficial reuse strategic agreement (the “Joint Industry Project” or “JIP”) with Chevron U.S.A. Inc., ConocoPhillips and Exxon Mobil Corporation (collectively with us, the “alliance members”) to develop and pilot technologies and processes to treat produced water for potential beneficial reuse opportunities. We previously referred to this agreement as the Beneficial Reuse Strategic Agreement. We account for reimbursements of research and development costs under the JIP as contra-expenses in the period such expenses are incurred. This reflects the joint risk sharing nature of these activities within the collaborative arrangement. We classify advance billings or receivables recorded as “Accrued and Other Current Liabilities” or “Other Receivables,” respectively, on our condensed consolidated balance sheet. For the three and six months ended June 30, 2024, we incurred $2.6 million and $5.2 million, respectively, in total research and development expenses relating to the JIP, which was offset by $1.9 million and $3.9 million, respectively, in amounts due from the other alliance members for reimbursement of these shared costs. For the three and six months ended June 30, 2023, we incurred $2.0 million and $2.1 million, respectively, in total research and development expenses relating to the JIP, which was offset by $1.5 million and $1.6 million, respectively, in amounts due from the other alliance members for reimbursement of these shared costs. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “ The amendments in this ASU primarily relate to the rate reconciliation and income taxes paid disclosures and improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and may be applied prospectively or retrospectively. Other than the required disclosures, we do not expect a material impact on our condensed consolidated financial statements and related disclosures upon adoption. In November 2023, the FASB issued ASU 2023-07, “ .” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU require disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. This ASU is effective for annual periods beginning after December 15, 2024 and should be applied prospectively. Other than the required disclosures, we do not expect a material impact on our condensed consolidated financial statements and related disclosures upon adoption. |
Additional Financial Statement
Additional Financial Statement Information | 6 Months Ended |
Jun. 30, 2024 | |
Additional Financial Statement Information | |
Additional Financial Statement Information | 3. Balance Sheet Other balance sheet information is as follows: (in thousands) June 30, December 31, 2024 2023 Other Receivables Insurance and Third Party Receivables for Remediation Expenses $ 4,342 $ 4,064 Reimbursable Research and Development Receivable — 1,450 Property Insurance Receivable 2,337 4,000 Reimbursable Projects 6,753 3,253 Total Other Receivables $ 13,432 $ 12,767 Prepaids and Deposits Prepaid Insurance $ 2,071 $ 5,494 Other Prepaids and Deposits 3,318 2,870 Total Prepaids and Deposits $ 5,389 $ 8,364 Accrued and Other Current Liabilities Accrued Operating Expense $ 19,675 $ 33,491 Accrued Capital Costs 7,500 3,812 Accrued Interest 8,260 8,510 Accrued Compensation 6,066 10,118 Sales Tax Payable 2,949 1,645 Lease Liabilities 1,763 1,676 Contingent Consideration Liability 1,078 1,221 Other 2,970 3,943 Total Accrued and Other Current Liabilities $ 50,261 $ 64,416 Other Long-Term Liabilities Noncurrent Lease Liabilities $ 14,242 $ 14,716 Contingent Consideration Liability 1,829 2,078 Total Other Long-Term Liabilities $ 16,071 $ 16,794 Statement of Operations Other statement of operations information is as follows: (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Depreciation, Amortization and Accretion Expense Depreciation - Property, Plant and Equipment $ 10,105 $ 9,335 $ 19,944 $ 18,197 Amortization - Intangible Assets 9,264 9,451 18,527 18,903 Accretion of Asset Retirement Obligations 338 300 657 592 Total Depreciation, Amortization and Accretion Expense $ 19,707 $ 19,086 $ 39,128 $ 37,692 Other Operating Expense (Income), Net Loss on Disposal of Assets, Net $ 168 $ 70 $ 114 $ 57 Abandoned Projects 16 128 745 128 Abandoned Well Costs (25) — 310 — Transaction Costs 89 100 96 145 Other (116) (490) (218) (305) Other Operating Expense (Income), Net $ 132 $ (192) $ 1,047 $ 25 Interest Expense Interest on Debt Instruments $ 8,596 $ 8,543 $ 16,897 $ 17,104 Amortization of Debt Issuance Costs 763 608 1,529 1,218 Total Interest Expense 9,359 9,151 18,426 18,322 Less: Capitalized Interest (546) (1,180) (1,175) (2,690) Total Interest Expense, Net $ 8,813 $ 7,971 $ 17,251 $ 15,632 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment. | |
Property, Plant and Equipment | 4. Property, plant and equipment (“PP&E”) is stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful service life of the asset. PP&E consists of the following: (in thousands) June 30, December 31, 2024 2023 Wells, Facilities, Water Ponds and Related Equipment $ 599,218 $ 561,059 Pipelines 451,999 427,528 Vehicles, Equipment, Computers and Office Furniture 25,527 24,496 Assets Subject to Depreciation 1,076,744 1,013,083 Land 463 463 Projects and Construction in Progress 38,958 28,157 Total Property, Plant and Equipment 1,116,165 1,041,703 Accumulated Depreciation (141,019) (121,989) Total Property, Plant and Equipment, Net $ 975,146 $ 919,714 Accrued PP&E additions totaled $31.2 million and $13.1 million at June 30, 2024 and December 31, 2023, respectively. Abandoned Projects During the first quarter of 2024, we recorded $0.7 million in abandoned project expense related to the write-off of permits for water handling facilities and right-of-way easements that either expired prior to use or that we no longer planned to use for future projects. During the second quarter of 2023, we recorded $0.1 million in abandoned project expense. Abandoned project expense is recorded in “Other Operating Expense (Income), Net” in the condensed consolidated statements of operations. Assets Held for Sale During the second quarter of 2023, management entered into a letter of intent with a third party to sell certain of our assets. These assets met the criteria for classification as assets held for sale as of June 30, 2023, and we received a $1.8 million deposit related to the anticipated sale. We closed the sale of these assets during the third quarter of 2023. |
Tax Receivable Agreement Liabil
Tax Receivable Agreement Liability | 6 Months Ended |
Jun. 30, 2024 | |
Tax Receivable Agreement Liability | |
Tax Receivable Agreement Liability | 5. Our tax receivable agreement (“TRA”) with the legacy owners of Solaris LLC units (each such person, a “TRA Holder,” and together, the “TRA Holders”) generally provides for the payment by us to each TRA Holder of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that we actually realize (computed by simplifying assumptions to address the impact of state and local taxes) or, are deemed to realize in certain circumstances, in periods after our initial public offering (the “IPO”) as a result of certain increases in tax basis that occur as a result of our acquisition or Solaris LLC’s redemption, respectively, of all or a portion of such TRA Holder’s Solaris LLC units in connection with the IPO or pursuant to the exercise of a redemption right or call right. We retain the remaining 15% of these cash savings. The future benefit of these cash savings is included, alongside other tax attributes, in our total deferred income tax asset balance at June 30, 2024. As of June 30, 2024 and December 31, 2023, the TRA liability totaled $98.3 million. If we experience a change of control (as defined under the TRA, which includes certain mergers, asset sales and other forms of business combinations and change of control events) or the TRA terminates early (at our election or as a result of our breach), we could be required to make an immediate lump-sum payment (or “early termination payment”) under the terms of the TRA, which can be significantly impacted by the closing price of our Class A shares on the applicable redemption date. We currently do not anticipate experiencing a change of control or an early termination of the TRA. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt | |
Debt | 6. Our debt consists of the following: (in thousands) June 30, December 31, 2024 2023 7.625% Senior Sustainability-Linked Notes $ 400,000 $ 400,000 Credit Facility 48,000 26,000 Total Long-Term Debt 448,000 426,000 Less: Unamortized Debt Issuance Costs (3,273) (4,208) Total Long-Term Debt, Net of Debt Issuance Costs $ 444,727 $ 421,792 Insurance Premium Financing Liability $ 1,855 $ 5,463 Total Debt $ 446,582 $ 427,255 (1) Credit Facility borrowings bore weighted average interest rates of 8.165% and 8.276% at June 30, 2024 and December 31, 2023, respectively. Senior Sustainability-Linked Notes Our 7.625% Senior Sustainability-Linked Notes (the “Notes”) are due April 1, 2026. The Notes are unsecured and effectively subordinated to the Credit Facility to the extent of the value of the collateral securing the Credit Facility (see below). The Notes are guaranteed on a senior unsecured basis by our wholly-owned subsidiaries. Interest on the Notes is payable on April 1 and October 1 of each year. We may redeem all or part of the Notes at any time at redemption prices ranging from 103.8125% through March 31, 2025 to 100% on or after April 1, 2025. If we undergo a change of control, we may be required to repurchase all or a portion of the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued interest. Credit Facility Our amended and restated credit agreement (as it may be amended and/or restated from time to time, the “Credit Agreement”) provides for, among other things, (i) commitments of $350.0 million, (ii) a maturity date of October 12, 2027, with a springing maturity of 91 days ahead of the Notes’ due date of April 1, 2026 in the event the Notes are voluntarily redeemed, repurchased, refinanced or otherwise retired in full prior to such springing maturity date, (iii) loans made under our revolving credit facility (the “Credit Facility”) and unused commitment fees to be determined based on a leverage ratio ranging from 3.00:1.00 to 4.50:1.00, (iv) an accordion feature permitting the Company to seek an increase of the Credit Facility of up to $150.0 million, subject to certain conditions, (v) a leverage ratio covenant which comprises a maximum total funded debt to EBITDA ratio, net of $40.0 million of unrestricted cash and cash equivalents if the facility is drawn, and net of all unrestricted cash and cash equivalents if the facility is undrawn, (vi) a leverage ratio covenant test level which is currently 4.50 to 1.00 and (vii) a secured leverage covenant of 2.50 to 1.00. The Credit Facility provides for: i. Base rate borrowings that bear interest at the highest of (a) the prime rate, (b) the federal funds effective rate plus 0.50% and (c) Term SOFR for an interest period of one month plus 1.00% ; plus a margin that ranges from 175 basis points to 275 basis points, depending upon our leverage ratio; or ii. SOFR borrowings that bear interest at Term SOFR plus SOFR Adjustment of 0.10% plus a margin that ranges from 275 basis points to 375 basis points, depending upon our leverage ratio. In addition, the Credit Facility provides for commitment fee rates that range from 37.5 basis points to 50.0 basis points, depending upon our leverage ratio. As of June 30, 2024, we had $3.3 million in letters of credit outstanding and $298.7 million in revolving commitments available. The Credit Facility is secured by all the real and material personal property owned by Solaris LLC or any of its subsidiaries, other than certain excluded assets. As of June 30, 2024, we were in compliance with all covenants contained in the Credit Facility. Insurance Premium Financing In the fourth quarter of 2023, we entered into a short-term agreement with a third-party to finance certain insurance premiums for an aggregate amount of $6.6 million. The insurance premium financing is repayable in monthly installments of principal and interest through September 2024. As of June 30, 2024, the remaining balance was $1.9 million and is included in “Insurance Premium Financing Liability” on the condensed consolidated balance sheet. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
Leases | |
Leases | 7. In the normal course of business, we enter into operating lease agreements to support our operations. Our leased assets include right-of-way easements for our wells and facilities, office space and other assets. We currently have no finance leases. Balance Sheet Information The following table provides supplemental consolidated balance sheet information related to leases: (in thousands) June 30, December 31, Classification 2024 2023 Assets Right-of-Use Assets Right-of-Use Assets $ 15,839 $ 16,726 Liabilities Current Lease Liabilities Accrued and Other Current Liabilities $ 1,763 $ 1,676 Noncurrent Lease Liabilities Other Long-Term Liabilities 14,242 14,716 Statement of Operations Information The following table provides the components of lease cost, excluding lease costs related to short-term leases: (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Direct Operating Costs $ 340 $ 310 $ 676 $ 603 General and Administrative 517 177 1,034 397 Total Lease Cost $ 857 $ 487 $ 1,710 $ 1,000 Short-Term Leases Our short-term lease costs, which consisted primarily of field equipment rentals, totaled $3.7 million and $3.2 million for the three months ended June 30, 2024 and 2023, respectively, and $6.8 million and $7.7 million for the six months ended June 30, 2024 and 2023, respectively. Cash Flow Information The following table summarizes supplemental cash flow information related to leases: (in thousands) Six Months Ended June 30, 2024 2023 Cash Paid for Amounts Included in Lease Liabilities $ 1,209 $ 625 Right-of-Use Assets Obtained in Exchange for Operating Lease Liabilities, Net 333 1,415 Lease Terms and Discount Rates The following table provides lease terms and discount rates related to leases: June 30, 2024 December 31, 2023 Weighted Average Remaining Lease Term (Years) 7.2 7.6 Weighted Average Discount Rate 6.34% 6.30% Annual Lease Maturities The following table provides maturities of lease liabilities at : (in thousands) Remainder of 2024 $ 1,300 2025 2,210 2026 1,941 2027 3,182 2028 2,748 Thereafter 8,941 Total Lease Payments 20,322 Less: Interest (4,317) Present Value of Lease Liabilities $ 16,005 Subleases During the fourth quarter of 2023, we entered into two subleases related to our previous office space in Houston, Texas. The subtenants are responsible for monthly fixed rent and certain operating expenses associated with the office building, including utilities, which are considered variable lease payments. The sublease income is recorded as a reduction of rent expense under our head lease and is included in “General and Administrative” expense on the consolidated statements of operations. During the three and six months ended June 30, 2024, we recognized total sublease income of $0.1 million and $0.3 million, respectively, including variable lease payments. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Taxes | |
Income Taxes | 8. Our predecessor, Solaris LLC, is a Delaware limited liability company treated as a partnership for federal income tax purposes and, therefore, has not been subject to U.S. federal income tax at an entity level. As a result, the consolidated net income (loss) in our historical financial statements does not reflect the tax expense (benefit) we would have incurred if we were subject to U.S. federal income tax at an entity level during periods prior to the IPO. Solaris LLC continues to be treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to U.S. federal income tax. Instead, taxable income is allocated to members, including Aris Inc., and except for Texas franchise tax, any taxable income of Solaris LLC is reported in the respective tax returns of its members. Income Tax Expense We recorded income tax expense of $2.0 million and $4.6 million for the three and six months ended June 30, 2024, respectively, of which $0.3 million and $0.8 million was current, respectively, and the remainder was deferred. We recorded income tax expense of $1.6 million and $2.9 million for the three and six months ended June 30, 2023, respectively, substantially all of which was deferred. Effective Tax Rate We record our income tax expense using an estimated annual effective tax rate (“ETR”) and recognize specific events discretely as they occur. The ETR for the six months ended June 30, 2024 and 2023 was 13.3% and 13.7%, respectively. The difference between the federal statutory rate and our estimated annual ETR is primarily due to the impact of the noncontrolling interest. Deferred Tax Assets We regularly evaluate the realizable tax benefits of deferred tax assets and record a valuation allowance, if required, based on an estimate of the amount of deferred tax assets that we believe does not meet the more-likely-than-not criteria of being realized. The balance of our “Deferred Income Tax Assets, Net” on the condensed consolidated balance sheet decreased $4.1 million during the six months ended June 30, 2024, primarily as a result of net income during the period. Tax Examinations Solaris LLC files income tax returns in the U.S. federal jurisdiction and various states. There are currently no federal or state income tax examinations underway for these jurisdictions. Its federal and state returns remain open to examination for tax years 2019 through 2023. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity | |
Stockholders' Equity | 9. Redemptions During the six months ended June 30, 2024 and 2023, zero and 21,477 Solaris LLC units, respectively, together with an equal number of shares of our Class B common stock, were redeemed for shares of our Class A common stock on a one-for-one basis. Dividends and Distributions Our Board of Directors declared a dividend of $0.09 per share and $0.105 per share for the first and second quarters of 2024, respectively, on our Class A common stock. In conjunction with the dividend payments, a distribution of $0.09 per unit and $0.105 per unit was paid to unit holders of Solaris LLC for the first and second quarters of 2024, respectively, subject to the same payment and record dates. Our Board of Directors declared a dividend on our Class A common stock for the third quarter of 2024 of $0.105 per share. In conjunction with the dividend payment, a distribution of $0.105 per unit will be paid to unit holders of Solaris LLC. The dividend will be paid on September 19, 2024 to holders of record of our Class A common stock as of the close of business on September 5, 2024. The distribution to unit holders of Solaris LLC will be subject to the same payment and record dates. Treasury Stock During the six months ended June 30, 2024 and 2023, 109,862 shares and 42,293 shares, respectively, of our Class A common stock were withheld for the payment of taxes due on shares of common stock issued to employees under our 2021 Equity Incentive Plan. In connection with an asset acquisition in 2022, certain shares of our Class A common stock issued to the seller were held in escrow and could be released to the Company under certain conditions, including for the reimbursement of certain post-acquisition workover costs pursuant to the terms of the asset purchase agreement. During the first quarter of 2024, 23,107 of these escrow shares were released and returned to the Company for reimbursement of such workover costs and are included in “Treasury Stock” at a value of $0.3 million, which was their fair market value at the date of receipt. The receipt of these shares was recorded as a non-cash treasury stock transaction, with an allocation of the difference between the contractually ascribed value of the shares per the asset purchase agreement and the cost of the shares at the date of receipt recorded against the workover costs in the amount of $0.1 million. As of March 31, 2024, there were no remaining shares left in escrow. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 10. In the normal course of business, we are subject to various claims, legal actions, contract negotiations and disputes. We provide for losses, if any, in the period in which they become probable and can be reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying consolidated financial statements. Delivery Commitment We have an agreement with an unaffiliated water disposal company to dispose of a minimum volume of produced water. As of June 30, 2024, the remaining term of this commitment was 6.0 years with a remaining minimum commitment of $23.3 million, undiscounted. Purchase Obligations In the normal course of business, we enter into short-term purchase obligations for products and services, primarily related to purchases of pipe, pumps and other components. As of June 30, 2024, we had purchase obligations and commitments of approximately $14.8 million due in the next twelve months. Environmental We are also subject to various federal, state and local laws and regulations relating to the protection of the environment. For the three and six months ended June 30, 2024, we recognized $0.3 million and $0.7 million of expense, respectively, related to environmental matters that were recorded in “Direct Operating Costs” in the condensed consolidated statements of operations. For the three and six months ended June 30, 2023, the expense related to environmental matters was $1.5 million and $2.9 million, respectively. As of June 30, 2024, we accrued insurance proceeds and third-party receivables of $5.9 million, of which $4.3 million are included in “Other Receivables” and $1.6 million are included in “Other Assets.” As of December 31, 2023, we accrued insurance proceeds and third-party receivables of $5.7 million, of which $4.1 million are included in “Other Receivables” and $1.6 million are included in “Other Assets.” We believe these proceeds are probable to collect and are reasonably estimable. Although we believe these estimates are reasonable, actual results could differ from these estimates. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. Earnings Per Share Net Income Per Share Basic and diluted net income per share attributable to our Class A common stock is computed by dividing net income attributable to Aris Water Solutions, Inc. by the weighted average number of shares of Class A common stock outstanding for the same period, including shares of restricted stock and restricted stock units (“RSUs”), which receive nonforfeitable dividends. Shares issued during the period are weighted for the portion of the period in which the shares were outstanding. The following table sets forth the computation of basic and diluted net income per share attributable to our Class A common stock for the periods indicated: (in thousands, except for share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net Income Attributable to Stockholders' Equity $ 13,112 $ 10,431 $ 29,942 $ 18,139 Less: Net Income Attributable to Noncontrolling Interest 7,147 5,733 16,354 10,063 Net Income Attributable to Aris Water Solutions, Inc. 5,965 4,698 13,588 8,076 Participating Basic Earnings (1) (460) (300) (991) (498) Basic Net Income Attributable to Aris Water Solutions, Inc. $ 5,505 $ 4,398 $ 12,597 $ 7,578 Reallocation of Participating Net Income - - - - Diluted Net Income Attributable to Aris Water Solutions, Inc. $ 5,505 $ 4,398 $ 12,597 $ 7,578 Basic Weighted Average Shares Outstanding 30,549,092 30,036,593 30,451,553 29,985,869 Dilutive Performance-Based Stock Units 40,905 - 20,452 - Dilutive Weighted Average Shares Outstanding 30,589,997 30,036,593 30,472,005 29,985,869 Basic Net Income Per Share of Class A Common Stock $ 0.18 $ 0.15 $ 0.41 $ 0.25 Diluted Net Income Per Share of Class A Common Stock $ 0.18 $ 0.15 $ 0.41 $ 0.25 (1) Unvested shares of restricted stock and RSUs represent participating securities because they participate in nonforfeitable dividends or distributions with the common equity holders of the Company. Participating earnings represent the distributed and undistributed earnings of the Company attributable to participating securities. Unvested RSUs do not participate in undistributed net losses as they are not contractually obligated to do so. Shares of Class B common stock are considered potentially dilutive shares of Class A common stock because they may be redeemed for shares of Class A common stock on a one-for-one basis. A total of 27,543,565 weighted average shares of Class B common stock outstanding for the three and six months ended June 30, 2024 were determined to be antidilutive and were excluded from the computation of diluted earnings per share of Class A common stock. In addition, zero and 11,525 PSUs were determined to be antidilutive for the three and six months ended June 30, 2024, respectively, and were excluded from the computation of diluted earnings per share for those periods. A total of 27,554,393 weighted average shares and 27,561,348 weighted average shares of Class B common stock outstanding for the three and six months ended June 30, 2023, respectively, were determined to be antidilutive and were excluded from the computation of diluted earnings per share of Class A common stock. In addition, all PSUs were determined to be antidilutive for each period and were excluded from the computation of diluted earnings per share for those periods. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2024 | |
Stock-Based Compensation | |
Stock-Based Compensation | 12. Our 2021 Equity Incentive Plan allows for the grant of, among other types of awards, stock options; restricted stock; RSUs; and PSUs. Restricted Stock and Restricted Stock Units RSU activity during the period was as follows: RSUs Weighted-Average Grant Date Fair Value Outstanding at December 31, 2023 1,606,303 $ 11.72 Granted 1,437,739 12.08 Forfeited (63,432) 11.90 Vested (434,294) 11.74 Outstanding at June 30, 2024 2,546,316 $ 11.91 The RSUs generally vest in the following installments: (i) one-third one-third one-third roximately $ million of compensation cost related to unvested shares of restricted stock and RSUs remained to be recognized. The cost is expected to be recognized over a weighted-average period of years. Performance-Based Restricted Stock Units PSU activity during the period was as follows: PSUs Weighted-Average Grant Date Fair Value Outstanding at December 31, 2023 404,993 $ 13.06 Granted 281,527 29.38 Forfeited (9,957) 14.23 Outstanding at June 30, 2024 676,563 $ 19.83 The PSUs granted in 2024 were granted to management under the 2021 Plan and have the following performance criteria: ● Relative PSUs: 50% of the PSUs are based on total shareholder return relative to the total shareholder return of a predetermined group of peer companies. This relative total shareholder return is calculated at the end of the performance periods stipulated in the PSU agreement. ● Absolute PSUs: 50% of the PSUs have a performance criteria of absolute total shareholder return calculated at the end of the performance period stipulated in the PSU agreement. The vesting and payout of the PSUs occur when the related service condition is completed, which is approximately three years after the grant date regardless of the duration of the stipulated performance period. The PSUs can be paid out in either Class A common stock or cash, at our election. Dividends accrue on PSUs and are paid upon vesting. As of , approximately $ million of compensation cost related to unvested PSUs remained to be recognized. The cost is expected to be recognized over a weighted-average period of years. The grant date fair value was determined using the Monte Carlo simulation method and is expensed ratably over the service period. Expected volatilities used in the fair value simulation were estimated using historical periods consistent with the remaining performance periods. The risk-free rate was based on the U.S. Treasury rate for a term commensurate with the expected life of the grant. We used the following assumptions to estimate the fair value of PSUs granted during the six months ended June 30, 2024: Assumptions Risk-free Interest Rate 4.67% Volatility Range 17.04% - 61.19% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 5,965 | $ 4,698 | $ 13,588 | $ 8,076 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation All dollar amounts, except per share/unit amounts, in the condensed consolidated financial statements and tables in the notes are stated in thousands of dollars unless otherwise indicated. |
Interim Financial Statements | Interim Financial Statements These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These financial statements have not been audited by our independent registered public accounting firm. These condensed consolidated financial statements include the adjustments and accruals, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 . |
Consolidation | Consolidation We have determined that the members with equity at risk in Solaris LLC lack the authority, through voting rights or similar rights, to direct the activities that most significantly impact Solaris LLC’s economic performance; therefore, Solaris LLC is considered a variable interest entity. As the managing member of Solaris LLC, we operate and control all of the business and affairs of Solaris LLC, as well as have the obligation to absorb losses or the right to receive benefits that could be potentially significant to us. Therefore, we are considered the primary beneficiary and consolidate Solaris LLC . |
Noncontrolling Interest | Noncontrolling Interest As of June 30, 2024, we own approximately 53% of Solaris LLC. Our condensed consolidated financial statements include a noncontrolling interest representing the percentage of Solaris LLC units not held by us . |
Use of Estimates | Use of Estimates Management has made certain estimates and assumptions that affect reported amounts in these condensed consolidated financial statements and disclosures of contingencies. These estimates include, among others, determining the fair values of assets acquired, liabilities assumed, and/or contingent consideration paid in acquisitions or nonmonetary exchanges or disposed of through sale, determining the fair value and related impairment of long-lived assets, determining the fair value of performance-based restricted stock units (“PSUs”), useful lives of property, plant and equipment and amortizable intangible assets, goodwill impairment testing, the fair value of asset retirement obligations, accruals for environmental matters, the income tax provision, valuation allowances for deferred tax assets and our Tax Receivable Agreement (“TRA”) liability. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including current economic and industry conditions. Actual results could differ from management’s estimates as additional information or actual results become available in the future, and those differences could be material. |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Significant Accounting Policies | Significant Accounting Policies See Note 2. Significant Accounting Policies |
Fair Value Information | Fair Value Information The fair value of our 7.625% Senior Sustainability-Linked Notes (the “Notes”), which are fixed-rate debt, is estimated based on the published market prices for the same or similar issues. Management has designated this measurement as a Level 2 fair value measurement. The fair value of our Credit Facility (as defined below) approximates carrying value as the debt bears interest at a variable rate which is reflective of current rates otherwise available to us. Management has designated this measurement as Level 3. Fair value information regarding our debt is as follows: (in thousands) June 30, 2024 December 31, 2023 Carrying Fair Carrying Fair Amount Value Amount Value Senior Sustainability-Linked Notes $ 400,000 $ 401,500 $ 400,000 $ 405,090 Credit Facility $ 48,000 $ 48,000 $ 26,000 $ 26,000 The carrying values of our other financial instruments, consisting of cash, accounts receivable, accounts payable and our insurance premium financing liability, approximate their fair values due to the short maturity of such instruments . |
Intangible Assets | Intangible Assets Intangible assets are net of accumulated amortization of $152.9 million and $134.4 million at June 30, 2024 and December 31, 2023, respectively . |
Related Parties | Related Parties We and ConocoPhillips, one of our principal owners, are parties to a long-term water gathering and handling agreement, pursuant to which ConocoPhillips dedicates all the produced water generated from its current and future acreage in a defined area of mutual interest in New Mexico and Texas. As of June 30 , 2024 and December 31, 2023, we had receivables of $29.1 million and $23.0 million, respectively, from ConocoPhillips that were recorded in “Accounts Receivable from Affiliate” on the condensed consolidated balance sheet. As of June 30 , 2024 and December 31, 2023, we had payables of $0.7 million and $0.9 million, respectively, to ConocoPhillips that were recorded in “Payables to Affiliate” on the condensed consolidated balance sheet. Revenues related to ConocoPhillips were $32.0 million and $64.1 million, respectively, for the three and six months ended June 30 , 2024. Revenues related to ConocoPhillips were $31.3 million and $62.5 million, respectively, for the three and six months ended June 30 , 202 3 . |
Collaborative Arrangements | Collaborative Arrangements We have a beneficial reuse strategic agreement (the “Joint Industry Project” or “JIP”) with Chevron U.S.A. Inc., ConocoPhillips and Exxon Mobil Corporation (collectively with us, the “alliance members”) to develop and pilot technologies and processes to treat produced water for potential beneficial reuse opportunities. We previously referred to this agreement as the Beneficial Reuse Strategic Agreement. We account for reimbursements of research and development costs under the JIP as contra-expenses in the period such expenses are incurred. This reflects the joint risk sharing nature of these activities within the collaborative arrangement. We classify advance billings or receivables recorded as “Accrued and Other Current Liabilities” or “Other Receivables,” respectively, on our condensed consolidated balance sheet. For the three and six months ended June 30, 2024, we incurred $2.6 million and $5.2 million, respectively, in total research and development expenses relating to the JIP, which was offset by $1.9 million and $3.9 million, respectively, in amounts due from the other alliance members for reimbursement of these shared costs. For the three and six months ended June 30, 2023, we incurred $2.0 million and $2.1 million, respectively, in total research and development expenses relating to the JIP, which was offset by $1.5 million and $1.6 million, respectively, in amounts due from the other alliance members for reimbursement of these shared costs. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “ The amendments in this ASU primarily relate to the rate reconciliation and income taxes paid disclosures and improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 and may be applied prospectively or retrospectively. Other than the required disclosures, we do not expect a material impact on our condensed consolidated financial statements and related disclosures upon adoption. In November 2023, the FASB issued ASU 2023-07, “ .” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU require disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. This ASU is effective for annual periods beginning after December 15, 2024 and should be applied prospectively. Other than the required disclosures, we do not expect a material impact on our condensed consolidated financial statements and related disclosures upon adoption. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Basis of Presentation and Significant Accounting Policies | |
Schedule of fair value information of debt | (in thousands) June 30, 2024 December 31, 2023 Carrying Fair Carrying Fair Amount Value Amount Value Senior Sustainability-Linked Notes $ 400,000 $ 401,500 $ 400,000 $ 405,090 Credit Facility $ 48,000 $ 48,000 $ 26,000 $ 26,000 |
Additional Financial Statemen_2
Additional Financial Statement Information (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Additional Financial Statement Information | |
Schedule of Other Balance Sheet information | (in thousands) June 30, December 31, 2024 2023 Other Receivables Insurance and Third Party Receivables for Remediation Expenses $ 4,342 $ 4,064 Reimbursable Research and Development Receivable — 1,450 Property Insurance Receivable 2,337 4,000 Reimbursable Projects 6,753 3,253 Total Other Receivables $ 13,432 $ 12,767 Prepaids and Deposits Prepaid Insurance $ 2,071 $ 5,494 Other Prepaids and Deposits 3,318 2,870 Total Prepaids and Deposits $ 5,389 $ 8,364 Accrued and Other Current Liabilities Accrued Operating Expense $ 19,675 $ 33,491 Accrued Capital Costs 7,500 3,812 Accrued Interest 8,260 8,510 Accrued Compensation 6,066 10,118 Sales Tax Payable 2,949 1,645 Lease Liabilities 1,763 1,676 Contingent Consideration Liability 1,078 1,221 Other 2,970 3,943 Total Accrued and Other Current Liabilities $ 50,261 $ 64,416 Other Long-Term Liabilities Noncurrent Lease Liabilities $ 14,242 $ 14,716 Contingent Consideration Liability 1,829 2,078 Total Other Long-Term Liabilities $ 16,071 $ 16,794 |
Schedule of Other Statement of Operations information | (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Depreciation, Amortization and Accretion Expense Depreciation - Property, Plant and Equipment $ 10,105 $ 9,335 $ 19,944 $ 18,197 Amortization - Intangible Assets 9,264 9,451 18,527 18,903 Accretion of Asset Retirement Obligations 338 300 657 592 Total Depreciation, Amortization and Accretion Expense $ 19,707 $ 19,086 $ 39,128 $ 37,692 Other Operating Expense (Income), Net Loss on Disposal of Assets, Net $ 168 $ 70 $ 114 $ 57 Abandoned Projects 16 128 745 128 Abandoned Well Costs (25) — 310 — Transaction Costs 89 100 96 145 Other (116) (490) (218) (305) Other Operating Expense (Income), Net $ 132 $ (192) $ 1,047 $ 25 Interest Expense Interest on Debt Instruments $ 8,596 $ 8,543 $ 16,897 $ 17,104 Amortization of Debt Issuance Costs 763 608 1,529 1,218 Total Interest Expense 9,359 9,151 18,426 18,322 Less: Capitalized Interest (546) (1,180) (1,175) (2,690) Total Interest Expense, Net $ 8,813 $ 7,971 $ 17,251 $ 15,632 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment. | |
Schedule of PP&E | (in thousands) June 30, December 31, 2024 2023 Wells, Facilities, Water Ponds and Related Equipment $ 599,218 $ 561,059 Pipelines 451,999 427,528 Vehicles, Equipment, Computers and Office Furniture 25,527 24,496 Assets Subject to Depreciation 1,076,744 1,013,083 Land 463 463 Projects and Construction in Progress 38,958 28,157 Total Property, Plant and Equipment 1,116,165 1,041,703 Accumulated Depreciation (141,019) (121,989) Total Property, Plant and Equipment, Net $ 975,146 $ 919,714 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt | |
Schedule of debt instruments | (in thousands) June 30, December 31, 2024 2023 7.625% Senior Sustainability-Linked Notes $ 400,000 $ 400,000 Credit Facility 48,000 26,000 Total Long-Term Debt 448,000 426,000 Less: Unamortized Debt Issuance Costs (3,273) (4,208) Total Long-Term Debt, Net of Debt Issuance Costs $ 444,727 $ 421,792 Insurance Premium Financing Liability $ 1,855 $ 5,463 Total Debt $ 446,582 $ 427,255 (1) Credit Facility borrowings bore weighted average interest rates of 8.165% and 8.276% at June 30, 2024 and December 31, 2023, respectively. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases | |
Summary of supplemental consolidated balance sheet information | (in thousands) June 30, December 31, Classification 2024 2023 Assets Right-of-Use Assets Right-of-Use Assets $ 15,839 $ 16,726 Liabilities Current Lease Liabilities Accrued and Other Current Liabilities $ 1,763 $ 1,676 Noncurrent Lease Liabilities Other Long-Term Liabilities 14,242 14,716 |
Summary of supplemental statement of operation information | (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Direct Operating Costs $ 340 $ 310 $ 676 $ 603 General and Administrative 517 177 1,034 397 Total Lease Cost $ 857 $ 487 $ 1,710 $ 1,000 |
Summary of supplemental statement of cash flow information | (in thousands) Six Months Ended June 30, 2024 2023 Cash Paid for Amounts Included in Lease Liabilities $ 1,209 $ 625 Right-of-Use Assets Obtained in Exchange for Operating Lease Liabilities, Net 333 1,415 |
Summary of lease terms and discount rates | June 30, 2024 December 31, 2023 Weighted Average Remaining Lease Term (Years) 7.2 7.6 Weighted Average Discount Rate 6.34% 6.30% |
Summary of annual operating lease maturities | (in thousands) Remainder of 2024 $ 1,300 2025 2,210 2026 1,941 2027 3,182 2028 2,748 Thereafter 8,941 Total Lease Payments 20,322 Less: Interest (4,317) Present Value of Lease Liabilities $ 16,005 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net income per share | (in thousands, except for share and per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net Income Attributable to Stockholders' Equity $ 13,112 $ 10,431 $ 29,942 $ 18,139 Less: Net Income Attributable to Noncontrolling Interest 7,147 5,733 16,354 10,063 Net Income Attributable to Aris Water Solutions, Inc. 5,965 4,698 13,588 8,076 Participating Basic Earnings (1) (460) (300) (991) (498) Basic Net Income Attributable to Aris Water Solutions, Inc. $ 5,505 $ 4,398 $ 12,597 $ 7,578 Reallocation of Participating Net Income - - - - Diluted Net Income Attributable to Aris Water Solutions, Inc. $ 5,505 $ 4,398 $ 12,597 $ 7,578 Basic Weighted Average Shares Outstanding 30,549,092 30,036,593 30,451,553 29,985,869 Dilutive Performance-Based Stock Units 40,905 - 20,452 - Dilutive Weighted Average Shares Outstanding 30,589,997 30,036,593 30,472,005 29,985,869 Basic Net Income Per Share of Class A Common Stock $ 0.18 $ 0.15 $ 0.41 $ 0.25 Diluted Net Income Per Share of Class A Common Stock $ 0.18 $ 0.15 $ 0.41 $ 0.25 (1) Unvested shares of restricted stock and RSUs represent participating securities because they participate in nonforfeitable dividends or distributions with the common equity holders of the Company. Participating earnings represent the distributed and undistributed earnings of the Company attributable to participating securities. Unvested RSUs do not participate in undistributed net losses as they are not contractually obligated to do so. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Stock-Based Compensation | |
Schedule of RSU activity | RSUs Weighted-Average Grant Date Fair Value Outstanding at December 31, 2023 1,606,303 $ 11.72 Granted 1,437,739 12.08 Forfeited (63,432) 11.90 Vested (434,294) 11.74 Outstanding at June 30, 2024 2,546,316 $ 11.91 |
Schedule of PSU activity | PSUs Weighted-Average Grant Date Fair Value Outstanding at December 31, 2023 404,993 $ 13.06 Granted 281,527 29.38 Forfeited (9,957) 14.23 Outstanding at June 30, 2024 676,563 $ 19.83 |
Schedule of assumptions to estimate the fair value of PSUs | Assumptions Risk-free Interest Rate 4.67% Volatility Range 17.04% - 61.19% |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Noncontrolling Interest, Goodwill (Details) | Jun. 30, 2024 |
Solaris LLC | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Ownership percentage | 53% |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Senior Sustainability-Linked Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate (as a percent) | 7.625% | 7.625% |
Carrying Amount | Senior Sustainability-Linked Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | $ 400,000 | $ 400,000 |
Carrying Amount | Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 48,000 | 26,000 |
Fair Value | Level 2 | Senior Sustainability-Linked Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | 401,500 | 405,090 |
Fair Value | Level 3 | Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | $ 48,000 | $ 26,000 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Basis of Presentation and Significant Accounting Policies | ||
Accumulated amortization of intangible assets | $ 152.9 | $ 134.4 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | |||||
Total Revenue | $ 101,117 | $ 96,633 | $ 204,523 | $ 188,204 | |
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Accounts Receivable, Net | $ 29,132 | $ 29,132 | $ 22,963 | ||
Accounts Receivable, after Allowance for Credit Loss, Current, Related Party, Name [Extensible Enumeration] | aris:ConocoPhillipsMember | aris:ConocoPhillipsMember | aris:ConocoPhillipsMember | ||
Accounts Payable | $ 679 | $ 679 | $ 894 | ||
Total Revenue | $ 32,000 | $ 31,300 | $ 64,100 | $ 62,500 | |
Revenue, Related Party, Name [Extensible Enumeration] | aris:ConocoPhillipsMember | aris:ConocoPhillipsMember | aris:ConocoPhillipsMember | aris:ConocoPhillipsMember | |
Related Party | ConocoPhillips | |||||
Related Party Transaction [Line Items] | |||||
Accounts Payable | $ 700 | $ 700 | $ 900 |
Basis of Presentation and Sig_8
Basis of Presentation and Significant Accounting Policies - Collaborative Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Collaborative Agreements | ||||
Research and Development Expense | $ 1,128 | $ 650 | $ 2,193 | $ 1,058 |
Beneficial Of Reuse Strategic Agreement | ||||
Collaborative Agreements | ||||
Research and Development Expense | 2,600 | 2,000 | 5,200 | 2,100 |
Reimbursable shared costs under collaborative agreement | $ 1,900 | $ 1,500 | $ 3,900 | $ 1,600 |
Additional Financial Statemen_3
Additional Financial Statement Information - Other Balance Sheet information (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Other Receivables | ||
Insurance and Third Party Receivables for Remediation Expenses | $ 4,342 | $ 4,064 |
Reimbursable Research and Development Receivable | 1,450 | |
Property Insurance Receivable | 2,337 | 4,000 |
Reimbursable Projects | 6,753 | 3,253 |
Total Other Receivables | 13,432 | 12,767 |
Prepaids and Deposits | ||
Prepaid Insurance | 2,071 | 5,494 |
Other Prepaids and Deposits | 3,318 | 2,870 |
Total Prepaids and Deposits | 5,389 | 8,364 |
Accrued and Other Current Liabilities | ||
Accrued Operating Expense | 19,675 | 33,491 |
Accrued Capital Costs | 7,500 | 3,812 |
Accrued Interest | 8,260 | 8,510 |
Accrued Compensation | 6,066 | 10,118 |
Sales Tax Payable | 2,949 | 1,645 |
Lease Liabilities | $ 1,763 | $ 1,676 |
Current Lease Liabilities, Classification | Total Accrued and Other Current Liabilities | Total Accrued and Other Current Liabilities |
Contingent Consideration Liability | $ 1,078 | $ 1,221 |
Other | 2,970 | 3,943 |
Total Accrued and Other Current Liabilities | 50,261 | 64,416 |
Other Long-Term Liabilities | ||
Noncurrent Lease Liabilities | $ 14,242 | $ 14,716 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Total Other Long-Term Liabilities | Total Other Long-Term Liabilities |
Contingent Consideration Liability | $ 1,829 | $ 2,078 |
Total Other Long-Term Liabilities | $ 16,071 | $ 16,794 |
Additional Financial Statemen_4
Additional Financial Statement Information - Other Statement of Operations information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Depreciation, Amortization and Accretion Expense | |||||
Depreciation - Property, Plant and Equipment | $ 10,105 | $ 9,335 | $ 19,944 | $ 18,197 | |
Amortization - Intangible Assets | 9,264 | 9,451 | 18,527 | 18,903 | |
Accretion of Asset Retirement Obligations | 338 | 300 | 657 | 592 | |
Total Depreciation, Amortization and Accretion Expense | 19,707 | 19,086 | 39,128 | 37,692 | |
Other Operating Expense (Income), Net | |||||
Loss on Disposal of Assets, Net | 168 | 70 | 114 | 57 | |
Abandoned Projects | 16 | $ 700 | 128 | 745 | 128 |
Abandoned Well Costs | (25) | 310 | |||
Transaction Costs | 89 | 100 | 96 | 145 | |
Other | (116) | (490) | (218) | (305) | |
Other Operating Expense (Income), Net | 132 | (192) | 1,047 | 25 | |
Interest Expense | |||||
Interest on Debt Instruments | 8,596 | 8,543 | 16,897 | 17,104 | |
Amortization of Debt Issuance Costs | 763 | 608 | 1,529 | 1,218 | |
Total Interest Expense | 9,359 | 9,151 | 18,426 | 18,322 | |
Less: Capitalized Interest | (546) | (1,180) | (1,175) | (2,690) | |
Total Interest Expense, Net | $ 8,813 | $ 7,971 | $ 17,251 | $ 15,632 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | ||||||
Assets Subject to Depreciation | $ 1,076,744 | $ 1,076,744 | $ 1,013,083 | |||
Land | 463 | 463 | 463 | |||
Projects and Construction in Progress | 38,958 | 38,958 | 28,157 | |||
Total Property, Plant and Equipment | 1,116,165 | 1,116,165 | 1,041,703 | |||
Accumulated Depreciation | (141,019) | (141,019) | (121,989) | |||
Total Property, Plant and Equipment, Net | 975,146 | 975,146 | 919,714 | |||
Accrued PP&E additions | 31,200 | 13,100 | ||||
Abandoned Projects | 16 | $ 700 | $ 128 | 745 | $ 128 | |
Deposit received | $ 1,800 | $ 1,800 | ||||
Wells, Facilities, Water Ponds, and Related Equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Assets Subject to Depreciation | 599,218 | 599,218 | 561,059 | |||
Pipelines | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Assets Subject to Depreciation | 451,999 | 451,999 | 427,528 | |||
Vehicles, Equipment, Computers and Office Furniture | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Assets Subject to Depreciation | $ 25,527 | $ 25,527 | $ 24,496 |
Tax Receivable Agreement Liab_2
Tax Receivable Agreement Liability (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
TRA Liability | $ 98,274 | $ 98,274 |
Tax Receivable Agreement | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payment of net cash saving, percent | 85% | |
Retention of net cash saving, percent | 15% | |
TRA Liability | $ 98,300 | $ 98,300 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Total Long-Term Debt | $ 448,000 | $ 426,000 |
Less: Unamortized Debt Issuance Costs | (3,273) | (4,208) |
Total Long-Term Debt, Net of Debt Issuance Costs | 444,727 | 421,792 |
Total Debt | $ 446,582 | $ 427,255 |
Senior Sustainability-Linked Notes | ||
Debt Instrument [Line Items] | ||
Interest rate (as a percent) | 7.625% | 7.625% |
Total Long-Term Debt | $ 400,000 | $ 400,000 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Total Long-Term Debt | $ 48,000 | $ 26,000 |
Weighted average interest rate | 8.165% | 8.276% |
Insurance Premium Financing | ||
Debt Instrument [Line Items] | ||
Insurance Premium Financing | $ 1,855 | $ 5,463 |
Debt - Senior Sustainability-Li
Debt - Senior Sustainability-Linked Notes (Details) - Senior Sustainability-Linked Notes | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||
Interest rate (as a percent) | 7.625% | 7.625% |
Redemption when there is change in control | ||
Debt Instrument [Line Items] | ||
Percentage of principal redemption | 101% | |
Through March 31, 2025 | ||
Debt Instrument [Line Items] | ||
Redemption price percentage | 103.8125% | |
On or after April 1, 2025 | ||
Debt Instrument [Line Items] | ||
Redemption price percentage | 100% |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Credit Facility | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 350 |
Leverage ratio | 4.50 |
Unrestricted cash and cash equivalents | $ 40 |
Incremental revolving facility | $ 150 |
Secured leverage ratio | 2.50 |
Commitments available | $ 298.7 |
Credit Facility | Minimum | |
Line of Credit Facility [Line Items] | |
Leverage ratio | 3 |
Commitment fee percentage | 0.375% |
Credit Facility | Maximum | |
Line of Credit Facility [Line Items] | |
Leverage ratio | 4.50 |
Commitment fee percentage | 0.50% |
Base Rate Borrowings | Federal funds | |
Line of Credit Facility [Line Items] | |
Variable rate (as a percent) | 0.50% |
Base Rate Borrowings | SOFR | |
Line of Credit Facility [Line Items] | |
Variable rate (as a percent) | 1% |
Base Rate Borrowings | SOFR | Minimum | |
Line of Credit Facility [Line Items] | |
Additional Interest Margin Based On Leverage Ratio | 1.75% |
Base Rate Borrowings | SOFR | Maximum | |
Line of Credit Facility [Line Items] | |
Additional Interest Margin Based On Leverage Ratio | 2.75% |
SOFR Borrowings | SOFR | |
Line of Credit Facility [Line Items] | |
Variable rate (as a percent) | 0.10% |
SOFR Borrowings | SOFR | Minimum | |
Line of Credit Facility [Line Items] | |
Additional Interest Margin Based On Leverage Ratio | 2.75% |
SOFR Borrowings | SOFR | Maximum | |
Line of Credit Facility [Line Items] | |
Additional Interest Margin Based On Leverage Ratio | 3.75% |
Letters of Credit | |
Line of Credit Facility [Line Items] | |
Letter of credits outstanding | $ 3.3 |
Debt - Insurance Premium Financ
Debt - Insurance Premium Financing (Details) - Insurance Premium Financing - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Jun. 30, 2024 | |
Debt Instrument [Line Items] | ||
Aggregate amount of short-term borrowings available | $ 6,600 | |
Insurance Premium Financing | $ 5,463 | $ 1,855 |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Leases | ||
Right-of-Use Assets | $ 15,839 | $ 16,726 |
Current Lease Liabilities | $ 1,763 | $ 1,676 |
Current Lease Liabilities, Classification | Accrued and Other Current Liabilities | Accrued and Other Current Liabilities |
Noncurrent Lease Liabilities | $ 14,242 | $ 14,716 |
Noncurrent Lease Liabilities, Classification | Other Long-Term Liabilities | Other Long-Term Liabilities |
Leases - Operations Information
Leases - Operations Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Leases | ||||
Direct Operating Costs | $ 340 | $ 310 | $ 676 | $ 603 |
General and Administrative | 517 | 177 | 1,034 | 397 |
Total Lease Cost | 857 | 487 | 1,710 | 1,000 |
Short term lease cost | $ 3,700 | $ 3,200 | $ 6,800 | $ 7,700 |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Leases | ||
Cash Paid for Amounts Included in Lease Liabilities | $ 1,209 | $ 625 |
Right-of-Use Assets Obtained in Exchange for Operating Lease Liabilities, Net | $ 333 | $ 1,415 |
Leases - Lease Terms and Discou
Leases - Lease Terms and Discount Rates (Details) | Dec. 31, 2023 |
Leases | |
Weighted Average Remaining Lease Term (Years) | 7 years 7 months 6 days |
Weighted Average Discount Rate | 6.30% |
Leases - Annual Lease Maturitie
Leases - Annual Lease Maturities (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Leases | |
Remainder of 2024 | $ 1,300 |
2025 | 2,210 |
2026 | 1,941 |
2027 | 3,182 |
2028 | 2,748 |
Thereafter | 8,941 |
Total Lease Payments | 20,322 |
Less: Interest | (4,317) |
Presents Value of Lease Liabilities | $ 16,005 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent, Accrued And Other Liabilities, Current |
Leases - Subleases (Details)
Leases - Subleases (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 USD ($) | Dec. 31, 2023 lease | Jun. 30, 2024 USD ($) | |
Leases | |||
Number of subleases entered | lease | 2 | ||
Sublease Income | $ | $ 0.1 | $ 0.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Taxes | ||||
Income Tax Expense | $ 1,994 | $ 1,559 | $ 4,583 | $ 2,886 |
Current income tax expense | $ 300 | $ 800 | ||
Effective Tax Rate | 13.30% | 13.70% | ||
Decrease in deferred income tax assets, net | $ (4,100) |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Sep. 30, 2024 $ / shares | Jun. 30, 2024 $ / shares | Mar. 31, 2024 USD ($) $ / shares shares | Jun. 30, 2023 $ / shares shares | Mar. 31, 2023 $ / shares shares | Jun. 30, 2024 shares | Jun. 30, 2023 shares | |
Stockholders' and Members' Equity | |||||||
Conversion ratio | 1 | 1 | |||||
Dividend declared (in dollars per share) | $ 0.105 | $ 0.09 | $ 0.09 | $ 0.09 | |||
Shares withheld for the payment of taxes | shares | 109,862 | 42,293 | |||||
Eddy And Lea County Asset Acquisition | |||||||
Stockholders' and Members' Equity | |||||||
Escrow shares released | shares | 23,107 | ||||||
Non-cash treasury stock transaction in connections with assets acquired | $ | $ 0.3 | ||||||
Workover costs from assets acquired | $ | $ 0.1 | ||||||
First Quarter 2024 Dividend | |||||||
Stockholders' and Members' Equity | |||||||
Dividend declared (in dollars per share) | $ 0.09 | ||||||
Second Quarter 2024 Dividend | |||||||
Stockholders' and Members' Equity | |||||||
Dividend declared (in dollars per share) | 0.105 | ||||||
Third Quarter 2024 Dividend | Subsequent Event | |||||||
Stockholders' and Members' Equity | |||||||
Dividend declared (in dollars per share) | $ 0.105 | ||||||
Date dividend is payable | Sep. 19, 2024 | ||||||
Date of stockholders of record | Sep. 05, 2024 | ||||||
Common Stock | Class A Common Stock | |||||||
Stockholders' and Members' Equity | |||||||
Exchange of Class B Shares for Class A Shares (in shares) | shares | 524 | 20,953 | 0 | 21,477 | |||
Common Stock | Class B Common Stock | |||||||
Stockholders' and Members' Equity | |||||||
Exchange of Class B Shares for Class A Shares (in shares) | shares | (524) | (20,953) | |||||
Solaris LLC | First Quarter 2024 Dividend | |||||||
Stockholders' and Members' Equity | |||||||
Dividend distribution paid (in dollars per share) | $ 0.09 | ||||||
Solaris LLC | Second Quarter 2024 Dividend | |||||||
Stockholders' and Members' Equity | |||||||
Dividend distribution paid (in dollars per share) | $ 0.105 | ||||||
Solaris LLC | Third Quarter 2024 Dividend | Subsequent Event | |||||||
Stockholders' and Members' Equity | |||||||
Dividend distribution paid (in dollars per share) | $ 0.105 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Commitments and Contingencies | |||||
Environmental expenses | $ 300 | $ 1,500 | $ 700 | $ 2,900 | |
Environmental Remediation Expense, before Recovery, Statement of Income or Comprehensive Income [Extensible Enumeration] | Direct Operating Costs | Direct Operating Costs | Direct Operating Costs | Direct Operating Costs | |
Accrued insurance proceeds and third-party receivables | $ 5,900 | $ 5,900 | $ 5,700 | ||
Insurance proceeds and third-party receivables included in Other Receivables | 4,342 | 4,342 | 4,064 | ||
Insurance proceeds and third-party receivables included in Other Assets | 1,600 | $ 1,600 | $ 1,600 | ||
Delivery Commitment | |||||
Commitments and Contingencies | |||||
Remaining commitment agreement term | 6 years | ||||
Remaining minimum commitment | 23,300 | $ 23,300 | |||
Purchase Obligations | |||||
Commitments and Contingencies | |||||
Purchase obligations and commitments | $ 14,800 | $ 14,800 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Net Income Per Share (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 USD ($) $ / shares shares | Mar. 31, 2024 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Net Income Attributable to Stockholders' Equity | $ 13,112 | $ 16,830 | $ 10,431 | $ 7,708 | $ 29,942 | $ 18,139 |
Less: Net Income (Loss) Attributable to Noncontrolling Interest | 7,147 | 5,733 | 16,354 | 10,063 | ||
Net Income Attributable to Aris Water Solutions, Inc. | 5,965 | 4,698 | 13,588 | 8,076 | ||
Participating Basic Earnings | (460) | (300) | (991) | (498) | ||
Basic Net Income Attributable to Aris Water Solutions, Inc. | 5,505 | 4,398 | 12,597 | 7,578 | ||
Diluted Net Income Attributable to Aris Water Solutions, Inc | $ 5,505 | $ 4,398 | $ 12,597 | $ 7,578 | ||
Basic Weighted Average Shares Outstanding | shares | 30,549,092 | 30,036,593 | 30,451,553 | 29,985,869 | ||
Dilutive Performance-Based Stock Units | shares | 40,905 | 20,452 | ||||
Dilutive Weighted Average Shares Outstanding | shares | 30,589,997 | 30,036,593 | 30,472,005 | 29,985,869 | ||
Basic Net Income Per Share of Class A Common Stock | $ / shares | $ 0.18 | $ 0.15 | $ 0.41 | $ 0.25 | ||
Diluted Net Income Per Share of Class A Common Stock | $ / shares | $ 0.18 | $ 0.15 | $ 0.41 | $ 0.25 | ||
Conversion ratio | 1 | 1 | ||||
PSUs | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares excluded from computation of diluted net earnings per share | shares | 0 | 11,525 | ||||
Class B Common Stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Shares excluded from computation of diluted net earnings per share | shares | 27,543,565 | 27,554,393 | 27,543,565 | 27,561,348 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock and Restricted Stock Units (Details) - 2021 Plan - RSUs $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) $ / shares shares | |
RSUs and PSUs | |
Outstanding at beginning period (in share) | shares | 1,606,303 |
Granted (in share) | shares | 1,437,739 |
Forfeited (in share) | shares | (63,432) |
Vested (in share) | shares | (434,294) |
Outstanding at ending period (in share) | shares | 2,546,316 |
Weighted-Average Grant Date Fair Value | |
Outstanding at beginning period (in dollars per share) | $ / shares | $ 11.72 |
Granted (in dollars per share) | $ / shares | 12.08 |
Forfeited (in dollars per share) | $ / shares | 11.90 |
Vested (in dollars per share) | $ / shares | 11.74 |
Outstanding at ending period (in dollars per share) | $ / shares | $ 11.91 |
Compensation cost remaining to be recognized | $ | $ 22.9 |
Weighted-average period of recognition | 1 year 3 months 18 days |
First anniversary of the award date | |
Weighted-Average Grant Date Fair Value | |
Vesting percentage | 33.33% |
Second anniversary of the award date | |
Weighted-Average Grant Date Fair Value | |
Vesting percentage | 33.33% |
Third anniversary of the award date | |
Weighted-Average Grant Date Fair Value | |
Vesting percentage | 33.33% |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-Based Restricted Stock (Details) - 2021 Plan $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) $ / shares shares | |
PSUs | |
RSUs and PSUs | |
Outstanding at beginning period (in share) | shares | 404,993 |
Granted (in share) | shares | 281,527 |
Forfeited (in share) | shares | (9,957) |
Outstanding at ending period (in share) | shares | 676,563 |
Weighted-Average Grant Date Fair Value | |
Outstanding at beginning period (in dollars per share) | $ / shares | $ 13.06 |
Granted (in dollars per share) | $ / shares | 29.38 |
Forfeited (in dollars per share) | $ / shares | 14.23 |
Outstanding at ending period (in dollars per share) | $ / shares | $ 19.83 |
Vesting period | 3 years |
Compensation cost remaining to be recognized | $ | $ 9.6 |
Weighted-average period of recognition | 1 year 9 months 18 days |
Risk-free Interest Rate (as percentage) | 4.67% |
Volatility Range, minimum (as percentage) | 17.04% |
Volatility Range, maximum (as percentage) | 61.19% |
Relative PSUs | |
Weighted-Average Grant Date Fair Value | |
Percentage of performance criteria | 50% |
Absolute PSUs | |
Weighted-Average Grant Date Fair Value | |
Percentage of performance criteria | 50% |