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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): November 5, 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. ☐

 

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Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On November 5, 2024, Gogo Inc. issued a press release announcing its results of operations for the third quarter ended September 30, 2024. 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 November 5, 2024.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

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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: November 5, 2024

 

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Press Release
For Immediate Release

 

 

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

Gogo Announces Third Quarter Results

 

Total Revenue of $100.5 million, up 3% Year-over-Year; Third Quarter Service Revenue of $81.9 million, up 3% Year-over-Year

 

Q3 Net Income of $10.6 million; Adjusted EBITDA(1) of $34.8 million

 

Updates 2024 Guidance

 

Recent Strategic Galileo HDX wins with Textron Aviation and Wheels Up

 

BROOMFIELD, Colo. - November 5, 2024 – Gogo Inc. (NASDAQ: GOGO) (“Gogo” or the “Company”), a leading global provider of broadband connectivity services for the business aviation market, today announced its financial results for the quarter ended September 30, 2024.

Q3 2024 Highlights

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Recent Company Highlights

“Our Satcom Direct acquisition will turbo-charge Gogo Galileo penetration of the global underpenetrated Business Aviation and Military/Government markets,” said Oakleigh Thorne, Gogo’s Chairman and CEO. “Unprecedented demand for both Galileo and Gogo 5G will drive equipment revenue in 2025, and growth in profitable recurring service revenue beginning in 2026.”

 

"Strong third quarter results across the board drove upside to our 2024 Adjusted EBITDA and Free Cash Flow guidance,” said Jessi Betjemann, Gogo’s Executive Vice President and CFO. “We expect the Satcom Direct acquisition to be accretive day one and expect to reach our net leverage target of 2.5x-3.5x within 1-2 years after closing.”

 

 

 

 

 

 

 

 

 

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Financial Guidance

 

The Company includes below its revised 2024 guidance, which includes the impact of the Federal Communications Commission's Secure and Trusted Communications Networks Reimbursement Program ("FCC Reimbursement Program") and excludes the impact of the closing of the Satcom Direct transaction.

 

Due to the pending acquisition of Satcom Direct, the Company is withdrawing its multi-year long-term financial targets previously provided on August 7, 2024.

 

2024 Financial Guidance

 

 

Conference Call

 

The Company will host its third quarter conference call on November 5, 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 https://ir.gogoair.com.

3Q Earnings Call Webcast Link:

https://edge.media-server.com/mmc/p/r7xg4923

Participants can use the below link to retrieve your unique conference ID to use to access the conference call.
https://register.vevent.com/register/BI9f9348b06a694d9a9f21c0b7ecda8a5d

 

 

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

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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 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 and/or integrate them into our business; our ongoing delay and the risk of future delays in deploying 5G, and 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

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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.

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About Gogo

Gogo, a leading global 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 September 30, 2024, Gogo reported 7,016 business aircraft flying with its broadband ATG systems onboard, 4,379 of which are flying with a Gogo AVANCE L5 or L3 system; and 4,180 aircraft with narrowband satellite connectivity installed. Connect with us at www.gogoair.com.

Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
Revenue:
Service revenue		$	81,857			$	79,546			$	245,459			$	237,107
Equipment revenue			18,672				18,403				61,451				62,660
Total revenue			100,529				97,949				306,910				299,767
Operating expenses:
Cost of service revenue (exclusive of amounts shown below)			19,051				18,116				55,793				51,732
Cost of equipment revenue (exclusive of amounts shown below)			15,165				12,320				47,383				47,983
Engineering, design and development			9,759				9,154				29,279				26,259
Sales and marketing			8,551				7,015				25,870				21,748
General and administrative			24,917				13,336				61,416				40,734
Depreciation and amortization			4,015				4,692				11,743				12,022
Total operating expenses			81,458				64,633				231,484				200,478
Operating income			19,071				33,316				75,426				99,289
Other expense (income):
Interest income			(2,419	)			(1,622	)			(6,587	)			(5,509	)
Interest expense			9,670				8,025				26,193				24,807
Loss on extinguishment of debt			—				—				—				2,224
Other expense (income), net			(332	)			(728	)			1,286				(733	)
Total other expense			6,919				5,675				20,892				20,789
Income before income taxes			12,152				27,641				54,534				78,500
Income tax provision (benefit)			1,522				6,728				12,575				(52,711	)
Net income		$	10,630			$	20,913			$	41,959			$	131,211
Net income attributable to common stock per share:
Basic		$	0.08			$	0.16			$	0.33			$	1.01
Diluted		$	0.08			$	0.16			$	0.32			$	0.98
Weighted average number of shares:
Basic			127,918				129,951				128,513				129,632
Diluted			130,389				133,320				131,538				133,382

 

 

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Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

		September 30,				December 31,
		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	176,678			$	139,036
Accounts receivable, net of allowances of $2,807 and $2,091, respectively			45,875				48,233
Inventories			74,848				63,187
Prepaid expenses and other current assets			50,013				64,138
Total current assets			347,414				314,594
Non-current assets:
Property and equipment, net			93,830				98,129
Intangible assets, net			64,888				55,647
Operating lease right-of-use assets			67,171				70,552
Investment in convertible note			3,761				—
Other non-current assets, net of allowances of $720 and $591, respectively			24,229				25,979
Deferred income taxes			209,444				216,638
Total non-current assets			463,323				466,945
Total assets		$	810,737			$	781,539
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	26,445			$	16,094
Accrued liabilities			61,476				47,649
Deferred revenue			1,843				1,003
Current portion of long-term debt			7,250				7,250
Total current liabilities			97,014				71,996
Non-current liabilities:
Long-term debt			583,864				587,501
Non-current operating lease liabilities			68,005				73,047
Other non-current liabilities			9,130				8,270
Total non-current liabilities			660,999				668,818
Total liabilities			758,013				740,814
Stockholders’ equity
Common stock			14				14
Additional paid-in capital			1,413,842				1,402,003
Accumulated other comprehensive income			4,959				15,796
Treasury stock, at cost			(194,159	)			(163,197	)
Accumulated deficit			(1,171,932	)			(1,213,891	)
Total stockholders’ equity			52,724				40,725
Total liabilities and stockholders’ equity		$	810,737			$	781,539

 

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Gogo Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

		For the Nine Months Ended September 30,
		2024				2023
Operating activities:
Net income		$	41,959			$	131,211
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			11,743				12,022
Loss on asset disposals, abandonments and write-downs			101				285
Provision for expected credit losses			1,310				541
Deferred income taxes			10,740				(53,255	)
Stock-based compensation expense			14,755				15,729
Amortization of deferred financing costs and interest rate caps			3,785				2,671
Accretion of debt discount			309				304
Loss on extinguishment of debt			—				2,224
Change in fair value of convertible note and equity investment			1,239				(773	)
Changes in operating assets and liabilities:
Accounts receivable			1,177				4,356
Inventories			(11,661	)			(13,299	)
Prepaid expenses and other current assets			(13,605	)			(37,454	)
Contract assets			(4,313	)			2,822
Accounts payable			9,750				2,526
Accrued liabilities			12,956				(5,091	)
Deferred revenue			844				(1,708	)
Accrued interest			(316	)			(9,565	)
Other non-current assets and liabilities			(1,033	)			(728	)
Net cash provided by operating activities			79,740				52,818
Investing activities:
Purchases of property and equipment			(9,254	)			(14,006	)
Acquisition of intangible assets—capitalized software			(9,640	)			(4,711	)
Proceeds from FCC Reimbursement Program for property, equipment and intangibles			1,215				3
Proceeds from interest rate caps			19,454				20,165
Redemptions of short-term investments			—				49,524
Purchases of short-term investments			—				(49,383	)
Purchases of convertible note and equity investments			(5,000	)			(5,000	)
Net cash used in investing activities			(3,225	)			(3,408	)
Financing activities:
Payments on term loan			(5,438	)			(105,438	)
Repurchases of common stock			(30,763	)			—
Payments on financing leases			(8	)			(117	)
Stock-based compensation activity			(2,693	)			(8,326	)
Net cash used in financing activities			(38,902	)			(113,881	)
Effect of exchange rate changes on cash			29				78
Increase (decrease) in cash, cash equivalents and restricted cash			37,642				(64,393	)
Cash, cash equivalents and restricted cash at beginning of period			139,366				150,880
Cash, cash equivalents and restricted cash at end of period		$	177,008			$	86,487
Cash, cash equivalents and restricted cash at end of period		$	177,008			$	86,487
Less: non-current restricted cash			330				330
Cash and cash equivalents at end of period		$	176,678			$	86,157
Supplemental cash flow information:
Cash paid for interest		$	42,893			$	53,911
Cash paid for taxes			2,264				429
Non-cash investing activities:
Purchases of property and equipment in current liabilities		$	5,658			$	5,425

 

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Gogo Inc. and Subsidiaries

Supplemental Information – Key Operating Metrics

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
Aircraft online (at period end)
ATG AVANCE			4,379				3,784				4,379				3,784
Gogo Biz			2,637				3,366				2,637				3,366
Total ATG			7,016				7,150				7,016				7,150
Narrowband satellite			4,180				4,395				4,180				4,395
Average monthly connectivity service revenue per aircraft online
ATG		$	3,497			$	3,373			$	3,474			$	3,378
Narrowband satellite			332				294				319				297
Units sold
ATG			214				192				703				692
Narrowband satellite			39				40				132				132
Average equipment revenue per unit sold (in thousands)
ATG		$	75			$	77			$	75			$	73
Narrowband satellite			46				39				43				48

 

 

 

 

 

 

 

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Gogo Inc. and Subsidiaries

Supplemental Information – Revenue and Cost of Revenue

(in thousands, unaudited)

		For the Three Months Ended September 30,								% Change				For the Nine Months Ended September 30,								% Change
		2024				2023				2024 over 2023				2024				2023				2024 over 2023
Service revenue		$	81,857			$	79,546				2.9	%		$	245,459			$	237,107				3.5	%
Equipment revenue			18,672				18,403				1.5	%			61,451				62,660				(1.9	)%
Total revenue		$	100,529			$	97,949				2.6	%		$	306,910			$	299,767				2.4	%
		For the Three Months Ended September 30,								% Change				For the Nine Months Ended September 30,								% Change
		2024				2023				2024 over 2023				2024				2023				2024 over 2023
Cost of service revenue (1)		$	19,051			$	18,116				5.2	%		$	55,793			$	51,732				7.9	%
Cost of equipment revenue (1)		$	15,165			$	12,320				23.1	%		$	47,383			$	47,983				(1.3	)%

 

 

Gogo Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, unaudited)

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,								For the Three Months Ended June 30,
		2024				2023				2024				2023				2024
Adjusted EBITDA:
Net income attributable to common stock (GAAP)		$	10,630			$	20,913			$	41,959			$	131,211			$	839
Interest expense			9,670				8,025				26,193				24,807				8,113
Interest income			(2,419	)			(1,622	)			(6,587	)			(5,509	)			(2,120	)
Income tax provision (benefit)			1,522				6,728				12,575				(52,711	)			132
Depreciation and amortization			4,015				4,692				11,743				12,022				3,887
EBITDA			23,418				38,736				85,883				109,820				10,851
Stock-based compensation expense			5,030				5,235				14,755				15,729				4,885
Acquisition-related costs			6,654				—				6,654				—				—
Loss on extinguishment of debt			—				—				—				2,224				—
Change in fair value of convertible note and equity investments			(323	)			(773	)			1,239				(773	)			14,694
Adjusted EBITDA		$	34,779			$	43,198			$	108,531			$	127,000			$	30,430
Free Cash Flow:
Net cash provided by operating activities (GAAP) (1)		$	25,134			$	18,677			$	79,740			$	52,818			$	24,949
Consolidated capital expenditures (1)			(8,196	)			(5,355	)			(18,894	)			(18,717	)			(6,527	)
Proceeds from FCC Reimbursement Program for property, equipment and intangibles (1)			1,120				3				1,215				3				67
Proceeds from interest rate caps (1)			6,536				7,676				19,454				20,165				6,379
Free cash flow		$	24,594			$	21,001			$	81,515			$	54,269			$	24,868

 

 

 

 

 

 

 

 

 

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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)	$	59			$	67
Consolidated capital expenditures		(30	)			(30	)
Proceeds from FCC Reimbursement Program for property, equipment and intangibles		3				5
Proceeds from interest rate caps		23				23
Free cash flow	$	55			$	65

 

 

 

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) acquisition-related costs, (iii) change in fair value of convertible note and equity investment and (iv) loss on extinguishment of debt. 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.

Acquisition-related costs include direct transaction costs, such as due diligence and advisory fees. We believe it is useful for an understanding of our operating performance to exclude acquisition-related costs from Adjusted EBITDA because they are infrequent and do not reflect our operating performance.

We believe it is useful for an understanding of our operating performance to exclude from Adjusted EBITDA the changes in fair value of convertible note and an equity investment 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

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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.

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