United States securities and exchange commission logo
May 13, 2024
Douglas S. Aron
Chief Financial Officer
Archrock, Inc.
9807 Katy Freeway , Suite 100 ,
Houston, Texas 77024
Re: Archrock, Inc.
Form 10-K for
Fiscal Year Ended December 31, 2023
Filed February 21,
2024
Form 8-K filed on
May 1, 2024
File No. 001-33666
Dear Douglas S. Aron:
We have reviewed your
filing and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2023
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Non-GAAP Financial Measures, page 39
1. We note you present
"Gross Margin" as a non-GAAP measure and define it as total
revenue less cost of
sales (excluding depreciation and amortization). We also note that
you reconcile this
measure to net income. Please revise your reconciliation of this non-
GAAP measure to gross
margin as defined by GAAP, the most directly comparable
GAAP measure in
accordance with Item 10(e)(1)(i)(B) of Regulation S-K. If you do not
believe gross margin
that includes depreciation and amortization is the most directly
comparable GAAP
measure, please tell us why in your response. In addition, retitle this
measure throughout your
filings, including similar segment measures mentioned in Note
29 and information
provided in your press releases, to avoid confusion with the GAAP
measure of gross
margin.
Douglas S. Aron
Archrock, Inc.
May 13, 2024
Page 2
Form 8-K filed May 1, 2024
Exhibit 99.1 - Press release dated April 30, 2024, announcing Archrock, Inc.'s
results of
operations for the quarter ended March 31, 2024
Reconciliation of Net Cash Flows Provided By Operating Activities to Free Cash
Flow and Free
Cash Flow After Dividend, page 8
2. We note you define free cash flow as net cash provided by (used for)
operating activities
plus net cash provided by (used in) investing activities which differs
from the
typical calculation of this measure (i.e., cash flows from operations
less capital
expenditures). In future filings, please revise the titles of your
non-GAAP measures "free
cash flow" and "free cash flow after dividend" to alternative titles
in order to avoid
potential confusion. Refer to Question 102.07 of the SEC Staff's
Compliance
& Disclosure Interpretations on Non-GAAP Financial Measures.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Please contact Joanna Lam at 202-551-3476 or Craig Arakawa at
202-551-3650 if you
have questions regarding comments on the financial statements and related
matters.
FirstName LastNameDouglas S. Aron Sincerely,
Comapany NameArchrock, Inc.
Division of
Corporation Finance
May 13, 2024 Page 2 Office of Energy
& Transportation
FirstName LastName