0001537054false00015370542024-02-282024-02-280001537054us-gaap:PreferredStockMember2024-02-282024-02-280001537054us-gaap:CommonStockMember2024-02-282024-02-28

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 28, 2024

GOGO INC.
(Exact name of registrant as specified in its charter)

Delaware		001-35975		27-1650905
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

105 Edgeview Dr., Suite 300 Broomfield, CO		80021
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code:

303-301-3271

 

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, par value $0.0001 per share	GOGO	NASDAQ Global Select Market
Preferred Stock Purchase Rights	GOGO	NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

---

 

Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On February 28, 2024, Gogo Inc. issued a press release announcing its results of operations for the fourth quarter ended December 31, 2023. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.		Description
99.1		Press Release dated February 28, 2024.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

---

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

GOGO INC.

 

 

 

By: /s/ Jessica G. Betjemann

Jessica G. Betjemann
Executive Vice President and

Chief Financial Officer

 

Date: February 28, 2024

 

---

 

Investor Relations Contact:	Media Relations Contact:
Will Davis	Dave Mellin
+1 917-519-6994	+1 303-301-3606
wdavis@gogoair.com	pr@gogoair.com

Gogo Announces Fourth Quarter and 2023 Results

 

Provides 2024 Financial Guidance and Updates Long-Term Targets

Total Revenue of $97.8 million, down 10% Year-over-Year; Record Fourth Quarter Service Revenue of $80.9 million, up 5% Year-over-Year

 

Q4 Net Income of $14.5 million; Adjusted EBITDA(1) of $35.1 million

 

BROOMFIELD, CO - February 28, 2024 – Gogo Inc. (NASDAQ: GOGO) (“Gogo” or the “Company”), the world’s largest provider of broadband connectivity services for the business aviation market, today announced its financial results for the quarter ended December 31, 2023.

Q4 2023 Highlights

---

Full Year 2023 Highlights

 

“The launches of Gogo Galileo and Gogo 5G later this year will provide order-of-magnitude improvements in the network speeds we deliver to customers and significantly increase our global total addressable market,” said Oakleigh Thorne, Chairman and CEO. “And our LTE replacement program will drive conversion of our Classic product customers to our AVANCE platform, which will provide them with easy upgrade pathways to 5G and Galileo in the future.”

 

"Gogo’s ability to reiterate its $150 million to $200 million Free Cash Flow target in 2025 and target long-term revenue growth of approximately 15-17% from 2023-2028 is supported by our upcoming product roll outs, Gogo Galileo and Gogo 5G,” said Jessi Betjemann, Executive Vice President and CFO. "Gogo’s strategic investments will decline significantly after 2024, allowing for further flexibility for the return of capital to shareholders.”

 

2024 Financial Guidance and Long-Term Financial Targets

The Company provides the following guidance for 2024, which includes the impact of the Federal Communications Commission's Secure and Trusted Communications Networks Reimbursement Program ("FCC Reimbursement Program").

The Company provides the following long-term financial targets:

---

 

Conference Call

 

The Company will host its fourth quarter conference call on February 28, 2024 at 8:30 a.m. ET. A live webcast of the conference call, as well as a replay, will be available online on the Investor Relations section of the Company’s investor website at http://ir.gogoair.com.

Participants can also join the call by dialing +1 844-543-0451 (within the United States and Canada). Please use the below link to retrieve your unique conference ID to use to access the earnings call.

 

https://register.vevent.com/register/BI3011162f8c914b139642ae3b02fcf993

 

 

 

Non-GAAP Financial Measures

We report certain non-GAAP financial measurements, including Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow in the discussion above. Management uses Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow for business planning purposes, including managing our business against internally projected results of operations and measuring our performance and liquidity. These supplemental performance measures also provide another basis for comparing period-to-period results by excluding potential differences caused by non-operational and unusual or non-recurring items. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow are not recognized measurements under accounting principles generally accepted in the United States, or GAAP. When analyzing our performance with Adjusted EBITDA or Adjusted EBITDA Margin or liquidity with Free Cash Flow, as applicable, investors should (i) evaluate each adjustment in our reconciliation to the corresponding GAAP measure, and the explanatory footnotes regarding those adjustments, (ii) use Adjusted EBITDA and Adjusted EBITDA Margin in addition to, and not as an alternative to, net income (loss) attributable to common stock as a measure of operating results, and (iii) use Free Cash Flow in addition to, and not as an alternative to, consolidated net cash provided by (used in) operating activities when evaluating our liquidity. No reconciliation of the forecasted amounts of Adjusted EBITDA for fiscal 2024, Adjusted EBITDA Margin for fiscal 2028 or Free Cash Flow for fiscal 2025 is included in this release because we are unable to quantify certain amounts that would be required to be included in the corresponding GAAP measure without unreasonable efforts, due to high variability and complexity with respect to estimating certain forward-looking amounts, and we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors.

Cautionary Note Regarding Forward-Looking Statements

Certain disclosures in this press release and related comments by our management include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding our business outlook, industry, business strategy, plans, goals and expectations concerning our market position, international expansion, future technologies, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this press release. Forward-looking statements are based on our current expectations regarding future events, results or outcomes. These

---

expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: our ability to continue to generate revenue from the provision of our connectivity services; our reliance on our key OEMs and dealers for equipment sales; the impact of competition; our reliance on third parties for equipment components and services; the impact of global supply chain and logistics issues and inflationary trends; our ability to expand our business outside of the United States; our ability to recruit, train and retain highly skilled employees; the impact of pandemics or other outbreaks of contagious diseases, and the measures implemented to combat them; the impact of adverse economic conditions; our ability to fully utilize portions of our deferred tax assets; the impact of increased attention to climate change, ESG matters and conservation measures; our ability to evaluate or pursue strategic opportunities; our ability to develop and deploy Gogo 5G, Gogo Galileo or other next generation technologies; our ability to maintain our rights to use our licensed 3Mhz of ATG spectrum in the United States and obtain rights to additional spectrum if needed; the impact of service interruptions or delays, technology failures, equipment damage or system disruptions or failures; the impact of assertions by third parties of infringement, misappropriation or other violations; our ability to innovate and provide products and services; our ability to protect our intellectual property rights; the impact of our use of open-source software; the impact of equipment failure or material defects or errors in our software; our ability to comply with applicable foreign ownership limitations; the impact of government regulation of communication networks, and the internet; our possession and use of personal information; risks associated with participation in the FCC Reimbursement Program; our ability to comply with anti-bribery, anti-corruption and anti-money laundering laws; the extent of expenses, liabilities or business disruptions resulting from litigation; the impact of global climate change and legal, regulatory or market responses to it; the impact of our substantial indebtedness;

our ability to obtain additional financing to refinance or repay our existing indebtedness; the impact of restrictions and limitations in the agreements and instruments governing our debt; the impact of increases in interest rates; the impact of a substantial portion of our indebtedness being secured by substantially all of our assets; the impact of a downgrade, suspension or withdrawal of the rating assigned by a rating agency; the volatility of our stock price; our ability to fully utilize our tax losses; the dilutive impact of future stock issuances; the impact of our stockholder concentration and of our CEO and Chair of the Board being a significant stockholder; our ability to fulfill our obligations associated with being a public company; and the impact of anti-takeover provisions, ownership provisions and certain other provisions in our charter, our bylaws, Delaware law, and our existing and any future credit facilities.

Additional information concerning these and other factors can be found under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2024 and in our subsequent quarterly reports on Form 10-Q as filed with the SEC.

Any one of these factors or a combination of these factors could materially affect our financial condition or future results of operations and could influence whether any forward-looking statements contained in this report ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

---

About Gogo

Gogo is the world’s largest provider of broadband connectivity services for the business aviation market. We offer a customizable suite of smart cabin systems for highly integrated connectivity, inflight entertainment and voice solutions. Gogo’s products and services are installed on thousands of business aircraft of all sizes and mission types from turboprops to the largest global jets, and are utilized by the largest fractional ownership operators, charter operators, corporate flight departments and individuals.

 

As of December 31, 2023, Gogo reported 3,976 business aircraft flying with Gogo’s AVANCE L5 or L3 system installed, 7,205 aircraft flying with its broadband ATG systems onboard, and 4,341 aircraft with narrowband satellite connectivity installed. Connect with us at business.gogoair.com.

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

		For the Three Months Ended December 31,								For the Years Ended December 31,
		2023				2022				2023				2022
Revenue:
Service revenue		$	80,908			$	77,346			$	318,015			$	296,329
Equipment revenue			16,902				30,817				79,562				107,738
Total revenue			97,810				108,163				397,577				404,067
Operating expenses:
Cost of service revenue (exclusive of items shown below)			17,836				16,744				69,568				64,427
Cost of equipment revenue (exclusive of items shown below)			15,400				21,063				63,383				71,473
Engineering, design and development			10,424				8,241				36,683				29,587
Sales and marketing			8,049				6,932				29,797				25,471
General and administrative			16,546				13,914				57,280				58,203
Depreciation and amortization			4,679				2,574				16,701				12,580
Total operating expenses			72,934				69,468				273,412				261,741
Operating income			24,876				38,695				124,165				142,326
Other expense (income):
Interest income			(1,894	)			(1,455	)			(7,403	)			(2,386	)
Interest expense			8,249				9,430				33,056				38,872
Loss on extinguishment of debt			—				—				2,224				—
Other (income) expense, net			(582	)			11				(1,315	)			123
Total other expense			5,773				7,986				26,562				36,609
Income before income taxes			19,103				30,709				97,603				105,717
Income tax (benefit) provision			4,636				3,039				(48,075	)			13,658
Net income		$	14,467			$	27,670			$	145,678			$	92,059
Net income attributable to common stock per share:
Basic		$	0.11			$	0.22			$	1.12			$	0.75
Diluted		$	0.11			$	0.21			$	1.09			$	0.71
Weighted average number of shares
Basic			130,061				128,447				129,753				123,268
Diluted			132,931				133,053				133,283				133,923

 

 

 

---

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

		December 31,				December 31,
		2023				2022
Assets
Current assets:
Cash and cash equivalents		$	139,036			$	150,550
Short-term investments			-				24,796
Total cash, cash-equivalents and short-term investments			139,036				175,346
Accounts receivable, net of allowances of $2,091 and $1,778, respectively			48,233				54,210
Inventories			63,187				49,493
Prepaid expenses and other current assets			64,138				45,100
Total current assets			314,594				324,149
Non-current assets:
Property and equipment, net			98,129				104,595
Intangible assets, net			55,647				49,509
Operating lease right-of-use assets			70,552				75,261
Other non-current assets, net of allowances of $591 and $501, respectively			25,979				43,355
Deferred income taxes			216,638				162,657
Total non-current assets			466,945				435,377
Total assets		$	781,539			$	759,526
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable		$	16,094			$	13,646
Accrued liabilities			47,649				60,056
Deferred revenue			1,003				3,418
Current portion of long-term debt			7,250				7,250
Total current liabilities			71,996				84,370
Non-current liabilities:
Long-term debt			587,501				690,173
Non-current operating lease liabilities			73,047				79,241
Other non-current liabilities			8,270				7,611
Total non-current liabilities			668,818				777,025
Total liabilities			740,814				861,395
Stockholders’ equity (deficit)
Common stock			14				14
Additional paid-in capital			1,402,003				1,385,933
Accumulated other comprehensive income			15,796				30,128
Treasury stock, at cost			(163,197	)			(158,375	)
Accumulated deficit			(1,213,891	)			(1,359,569	)
Total stockholders’ equity (deficit)			40,725				(101,869	)
Total liabilities and stockholders’ equity (deficit)		$	781,539			$	759,526

 

 

---

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

		For the Years Ended December 31,
		2023				2022
Operating activities:
Net income		$	145,678			$	92,059
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			16,701				12,580
Loss on asset disposals, abandonments and write-downs			362				1,577
Provision for expected credit losses			1,233				1,047
Deferred income taxes			(49,172	)			13,170
Stock-based compensation expense			21,288				19,065
Amortization of deferred financing costs and interest rate caps			3,894				3,215
Accretion of debt discount			403				456
Gain on sale of equity investment			(1,343	)			—
Loss on extinguishment of debt			2,224				—
Changes in operating assets and liabilities:
Accounts receivable			4,833				(17,482	)
Inventories			(13,694	)			(15,517	)
Prepaid expenses and other current assets			(49,891	)			8,351
Contract assets			3,217				(2,164	)
Accounts payable			3,658				(2,540	)
Accrued liabilities			4,351				(12,031	)
Deferred revenue			(2,411	)			1,589
Accrued interest			(9,409	)			3,647
Other non-current assets and liabilities			(2,952	)			(3,617	)
Net cash provided by operating activities			78,970				103,405
Investing activities:
Purchases of property and equipment			(16,267	)			(43,914	)
Acquisition of intangible assets—capitalized software			(7,821	)			(6,000	)
Proceeds from FCC Reimbursement Program for property, equipment and intangibles			1,130				—
Proceeds from interest rate caps			26,675				4,292
Redemptions of short-term investments			74,179				—
Purchases of short-term investments			(49,383	)			(24,796	)
Purchase of equity investment			(5,000	)			—
Proceeds from sale of equity investment			6,343				—
Net cash provided by (used in) investing activities			29,856				(70,418	)
Financing activities:
Repurchases of common stock			(4,822	)			(18,375	)
Payments on term loan			(107,250	)			(7,250	)
Payments on finance leases			(132	)			(184	)
Stock-based compensation activity			(8,230	)			(2,579	)
Net cash used in financing activities			(120,434	)			(28,388	)
Effect of foreign exchange rate changes on cash			94				13
(Decrease) increase in cash, cash equivalents and restricted cash			(11,514	)			4,612
Cash, cash equivalents and restricted cash at beginning of period			150,880				146,268
Cash, cash equivalents and restricted cash at end of period		$	139,366			$	150,880
Cash, cash equivalents and restricted cash at end of period		$	139,366			$	150,880
Less: current restricted cash			—				—
Less: non-current restricted cash			330				330
Cash and cash equivalents at end of period		$	139,036			$	150,550
Supplemental cash flow information:
Cash paid for interest		$	68,145			$	41,209
Cash paid for taxes			1,004				377
Non-cash investing activities:
Purchases of property and equipment in current liabilities		$	4,801			$	10,688

 

---

Gogo Inc. and Subsidiaries

Supplemental Information – Key Operating Metrics

		For the Three Months Ended December 31,								For the Years Ended December 31,
		2023				2022				2023				2022
Aircraft online (at period end)
ATG AVANCE			3,976				3,279				3,976				3,279
Gogo Biz			3,229				3,656				3,229				3,656
Total ATG			7,205				6,935				7,205				6,935
Narrowband satellite			4,341				4,475				4,341				4,475
Average monthly connectivity service revenue per aircraft online
ATG		$	3,387			$	3,370			$	3,380			$	3,349
Narrowband satellite			301				284				298				268
Units sold
ATG			202				390				894				1,334
Narrowband satellite			42				62				174				206
Average equipment revenue per unit sold (in thousands)
ATG		$	69			$	67			$	72			$	68
Narrowband satellite			38				44				46				49

 

 

 

 

 

 

 

 

 

 

---

Gogo Inc. and Subsidiaries

Supplemental Information – Revenue and Cost of Revenue

(in thousands, unaudited)

		For the Three Months Ended December 31,								% Change				For the Years Ended December 31,								% Change
		2023				2022				2023 over 2022				2023				2022				2023 over 2022
Service revenue		$	80,908			$	77,346				4.6	%		$	318,015			$	296,329				7.3	%
Equipment revenue			16,902				30,817				(45.2	)%			79,562				107,738				(26.2	)%
Total revenue		$	97,810			$	108,163				(9.6	)%		$	397,577			$	404,067				(1.6	)%
		For the Three Months Ended December 31,								% Change				For the Years Ended December 31,								% Change
		2023				2022				2023 over 2022				2023				2022				2023 over 2022
Cost of service revenue (1)		$	17,836			$	16,744				6.5	%		$	69,568			$	64,427				8.0	%
Cost of equipment revenue (1)		$	15,400			$	21,063				(26.9	)%		$	63,383			$	71,473				(11.3	)%

 

 

Gogo Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, unaudited)

		For the Three Months Ended December 31,								For the Years Ended December 31,								For the Three Months Ended September 30,
		2023				2022				2023				2022				2023
Adjusted EBITDA:
Net income attributable to common stock (GAAP)		$	14,467			$	27,670			$	145,678			$	92,059			$	20,913
Interest expense			8,249				9,430				33,056				38,872				8,025
Interest income			(1,894	)			(1,455	)			(7,403	)			(2,386	)			(1,622	)
Income tax provision (benefit)			4,636				3,039				(48,075	)			13,658				6,728
Depreciation and amortization			4,679				2,574				16,701				12,580				4,692
EBITDA			30,137				41,258				139,957				154,783				38,736
Stock-based compensation expense			5,559				4,964				21,288				19,065				5,235
Loss on extinguishment of debt			—				—				2,224				—				—
Gain on sale of equity investment			(570	)			—				(1,343	)			—				(773	)
Adjusted EBITDA		$	35,126			$	46,222			$	162,126			$	173,848			$	43,198
Free Cash Flow:
Net cash provided by operating activities (GAAP) (1)		$	26,152			$	31,466			$	78,970			$	103,405			$	18,677
Consolidated capital expenditures (1)			(5,371	)			(9,982	)			(24,088	)			(49,914	)			(5,355	)
Proceeds from FCC Reimbursement Program for property, equipment and intangibles (1)			1,127				—				1,130				—				3
Proceeds from interest rate caps (1)			6,510				3,489				26,675				4,292				7,676
Free cash flow		$	28,418			$	24,973			$	82,687			$	57,783			$	21,001

 

 

 

 

 

 

 

 

 

 

 

 

 

---

Gogo Inc. and Subsidiaries

Reconciliation of Estimated Full-Year GAAP Net Cash

Provided by Operating Activities to Non-GAAP Measures

(in millions, unaudited)

	FY 2024 Range
	Low				High
Free Cash Flow:
Net cash provided by operating activities (GAAP)	$	37			$	57
Consolidated capital expenditures		(45	)			(45	)
Proceeds from FCC Reimbursement Program for property, equipment and intangibles		8				8
Proceeds from interest rate caps		20				20
Free cash flow	$	20			$	40

 

 

Definition of Non-GAAP Measures

EBITDA represents net income attributable to common stock before interest expense, interest income, income taxes and depreciation and amortization expense.

Adjusted EBITDA represents EBITDA adjusted for (i) stock-based compensation expense, (ii) loss on extinguishment of debt and (iii) gain on sale of equity investment . Our management believes that the use of Adjusted EBITDA eliminates items that management believes have less bearing on our operating performance, thereby highlighting trends in our core business which may not otherwise be apparent. It also provides an assessment of controllable expenses, which are indicators management uses to determine whether current spending decisions need to be adjusted in order to meet financial goals and achieve optimal financial performance.

We believe that the exclusion of stock-based compensation expense from Adjusted EBITDA provides a clearer view of the operating performance of our business and is appropriate given that grants made at a certain price and point in time do not necessarily reflect how our business is performing at any particular time. While we believe that investors should have information about any dilutive effect of outstanding options and the cost of that compensation, we also believe that stockholders should have the ability to consider our performance using a non-GAAP financial measure that excludes these costs and that management uses to evaluate our business.

We believe it is useful for an understanding of our operating performance to exclude the gain on sale of equity investment from Adjusted EBITDA because this activity is not related to our operating performance.

We believe it is useful for an understanding of our operating performance to exclude the loss on extinguishment of debt from Adjusted EBITDA because of the infrequently occurring nature of this activity.

We also present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides investors, securities analysts and other users of our consolidated financial statements with important supplemental information with which to evaluate our performance and to enable them to assess our performance on the same basis as management.

Adjusted EBITDA Margin represents Adjusted EBITDA divided by total revenue. We present Adjusted EBITDA Margin as a supplemental performance measure because we believe that it provides meaningful information regarding our operating efficiency.

Free Cash Flow represents net cash provided by operating activities, plus the proceeds received from the FCC Reimbursement Program and the interest rate caps, less purchases of property and equipment and the acquisition of intangible assets. We believe that Free Cash Flow provides meaningful information regarding our liquidity. Management believes that Free Cash Flow is useful for investors because it provides them with an important perspective on the cash available for strategic measures, after making necessary capital investments in property and equipment to support the Company’s ongoing business operations and provides them with the same measures that management uses as the basis of making capital allocation decisions.

 

---