UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-40955

Aris Water Solutions, Inc.

(Exact name of registrant as specified in its charter)


Delaware	87-1022110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9651 Katy Freeway, Suite 400

Houston, Texas

77024

(Address of principal executive offices)

(Zip Code)

(832) 304-7003

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	ARIS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 5, 2024, the registrant had 30,567,279 shares of Class A common stock, $0.01 par value per share, and 27,543,565 shares of Class B common stock, $0.01 par value per share, outstanding.

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TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Cautionary Note Regarding Forward Looking Statements		3
Item 1.	Financial Statements (unaudited)	5
Condensed Consolidated Balance Sheets		5
Condensed Consolidated Statements of Operations		6
Condensed Consolidated Statements of Cash Flows		7
Condensed Consolidated Statements of Stockholders’ Equity		8
Notes to Unaudited Condensed Consolidated Financial Statements		9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.	Controls and Procedures	34
PART II. OTHER INFORMATION		35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
Signatures		38

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Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10‑Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report, including, without limitation, statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “guidance,” “preliminary,” “project,” “estimate,” “outlook,” “expect,” “continue,” “will,” “intend,” “plan,” “targets,” “believe,” “forecast,” “future,” “potential,” “should,” “may,” “possible,” “could” and variations of such words or similar expressions.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (our “2023 Annual Report”) and found elsewhere in this Quarterly Report, including, but not limited to, the following:

●

the impact of the ongoing Russia-Ukraine and Middle Eastern conflicts on the global economy, including the impact on financial markets and the energy industry;

●

the level of capital spending and development by oil and gas companies, including potential reductions in capital expenditures by oil and gas producers in response to commodity price volatility and/or reduced demand;

●

our reliance on a limited number of customers and a particular region for substantially all of our revenues;

●

the impact of competition on our operations, including our ability to renew or replace expiring contracts on acceptable terms;

●

the degree to which our exploration and production customers may elect to operate their water-management services in-house rather than outsource these services to companies like us;

●

our customers’ ability to complete and produce new wells;

●

risks related to acquisitions and organic growth projects, including our ability to realize their expected benefits;

●

capacity constraints on regional oil, natural gas and water gathering, processing and pipeline systems that result in a slowdown or delay in drilling and completion activity, and thus a slowdown or delay in the demand for our services;

●

our ability to retain key management and employees and to hire and retain skilled labor;

●

our health, safety and environmental performance;

●

the impact of current and future laws, rulings and federal and state governmental regulations, including those related to hydraulic fracturing, accessing water, handling of produced water, carbon

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pricing, taxation of emissions, seismic activity, drilling and right-of-way access on governmental lands and various other matters;

●

delays or restrictions in obtaining, utilizing or maintaining permits and/or rights-of-way by us or our customers;

●

advances in technologies or practices that reduce the amount of water used or produced in the oil and gas production process, thereby reducing demand for our services;

●

changes in global political or economic conditions, both generally, and in the specific markets we serve, such as economic slowdown or recession, or uncertainty regarding the timing, pace and extent of an economic recovery;

●

adverse results from litigation and the use of financial resources to defend ourselves;

●

physical, electronic and cybersecurity breaches; and

●

the other risks described in our 2023 Annual Report filed with the United States Securities and Exchange Commission (“SEC”).

Many of the factors that will determine our future results are beyond the ability of management to control or predict. Should one or more of the risks or uncertainties described in this Quarterly Report or in our 2023 Annual Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, are expressly qualified in their entirety by this cautionary statement. We do not undertake to update any forward-looking statement that we may make from time to time except as required by applicable law.

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PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

Aris Water Solutions, Inc.

Condensed Consolidated Balance Sheets

(unaudited)


(in thousands, except for share and per share amounts)	June 30,		December 31,
	2024		2023
Assets
Cash	$	11,526	$	5,063
Accounts Receivable, Net		64,309		59,393
Accounts Receivable from Affiliate		29,132		22,963
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
Accounts Payable	$	42,112	$	25,925
Payables to Affiliate		679		894
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		—		—
Class A Common Stock $0.01 par value, 600,000,000 authorized, 31,104,226 issued and 30,552,938 outstanding as of June 30, 2024; 30,669,932 issued and 30,251,613 outstanding as of December 31, 2023		310		306
Class B Common Stock $0.01 par value, 180,000,000 authorized, 27,543,565 issued and outstanding as of June 30, 2024 and December 31, 2023		275		275
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

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Condensed Consolidated Statements of Operations

(unaudited)


	Three Months Ended				Six Months Ended
(in thousands, except for share and per share amounts)	June 30,				June 30,
	2024		2023		2024		2023
Revenue
Produced Water Handling	$	54,815	$	49,716	$	113,921	$	95,816
Produced Water Handling — Affiliate		28,614		23,181		55,441		46,321
Water Solutions		13,795		14,928		25,497		28,810
Water Solutions — Affiliate		3,453		8,163		8,695		16,147
Other Revenue		440		645		969		1,110
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	$	0.18	$	0.15	$	0.41	$	0.25
Diluted	$	0.18	$	0.15	$	0.41	$	0.25
Weighted Average Shares of Class A Common Stock Outstanding
Basic		30,549,092		30,036,593		30,451,553		29,985,869
Diluted		30,589,997		30,036,593		30,472,005		29,985,869

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


(in thousands)	Six Months Ended June 30,
	2024		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

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)


		Three and Six Months Ended June 30, 2024
(in thousands, except for share and per share amounts)		Class A			Class B			Additional					Retained Earnings				Non-			Total
		Common Stock			Common Stock			Paid-in		Treasury Stock			(Accumulated			controlling			Stockholders'
	Amount			Shares	Amount		Shares	Capital		Amount		Shares		Deficit)			Interest			Equity
Balance at January 1, 2024		$	306	30,669,932	$	275	27,543,565	$	328,543	$	(5,133)	418,319		$	(87)		$	363,989		$	687,893
Stock-Based Compensation Expense			4	428,044		-	-		4,503		-	-			-			(986)			3,521
Deferred Tax Assets Acquired			-	-		-	-		224		-	-			-			-			224
Dividends and Distributions ($0.09 per share or unit)			-	-		-	-		-		-	-			(2,884)			(2,601)			(5,485)
Purchase of Treasury Stock			-	-		-	-		(18)		(1,581)	131,921			-			18			(1,581)
Net Income			-	-		-	-		-		-	-			7,623			9,207			16,830
Balance at March 31, 2024		$	310	31,097,976	$	275	27,543,565	$	333,252	$	(6,714)	550,240		$	4,652		$	369,627		$	701,402
Stock-based Compensation Expense			-	6,250		-	-		2,509		-	-			-			2,184			4,693
Deferred Tax Liabilities Acquired			-	-		-	-		(578)		-	-			-			-			(578)
Dividends and Distributions ($0.105 per share or unit)			-	-		-	-		-		-	-			(3,382)			(3,051)			(6,433)
Purchase of Treasury Stock			-	-		-	-		-		(16)	1,048			-			-			(16)
Net Income			-	-		-	-		-		-	-			5,965			7,147			13,112
Balance at June 30, 2024		$	310	31,104,226	$	275	27,543,565	$	335,183	$	(6,730)	551,288		$	7,235		$	375,907		$	712,180


		Three and Six Months Ended June 30, 2023
(in thousands, except for share and per share amounts)		Class A			Class B			Additional									Non-			Total
		Common Stock			Common Stock			Paid-in		Treasury Stock			Accumulated			controlling			Stockholders'
	Amount			Shares	Amount		Shares	Capital		Amount		Shares		Deficit			Interest			Equity
Balance at January 1, 2023		$	300	30,115,979	$	276	27,575,519	$	319,545	$	(2,891)	196,762		$	(7,722)		$	347,579		$	657,087
Redemption of Class B Shares for Class A Shares			-	20,953		-	(20,953)		267		-	-			-			(267)			-
Stock-Based Compensation Expense			2	175,717		-	-		2,383		-	-			-			83			2,468
Increase in TRA Liability Related to Share Redemption			-	-		-	-		(110)		-	-			-			-			(110)
Deferred Tax Assets Acquired			-	-		-	-		82		-	-			-			-			82
Dividends and Distributions ($0.09 per share or unit)			-	-		-	-		-		-	-			(2,826)			(2,588)			(5,414)
Purchase of Treasury Stock			-	-		-	-		-		(599)	42,293			-			-			(599)
Net Income			-	-		-	-		-		-	-			3,378			4,330			7,708
Balance at March 31, 2023		$	302	30,312,649	$	276	27,554,566	$	322,167	$	(3,490)	239,055		$	(7,170)		$	349,137		$	661,222
Redemption of Class B Shares for Class A Shares			-	524		-	(524)		7		-	-			-			(7)			-
Stock-based Compensation Expense			-	-		-	-		1,626		-	-			-			1,491			3,117
Increase in TRA Liability Related to Share Redemption			-	-		-	-		(3)		-	-			-			-			(3)
Deferred Tax Assets Acquired			-	-		-	-		2		-	-			-			-			2
Dividends and Distributions ($0.09 per share or unit)			-	-		-	-		-		-	-			(2,819)			(2,584)			(5,403)
Net Income			-	-		-	-		-		-	-			4,698			5,733			10,431
Balance at June 30, 2023		$	302	30,313,173	$	276	27,554,042	$	323,799	$	(3,490)	239,055		$	(5,291)		$	353,770		$	669,366

The accompanying notes are an integral part of these condensed consolidated financial statements

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Aris Water Solutions, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(unaudited)

1.Organization and Background of Business

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.

2.Basis of Presentation and Significant Accounting Policies

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.

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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 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 for the discussion of our significant accounting policies. There were no significant updates or revisions to our accounting policies during the six months ended June 30, 2024.

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.

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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, 2023.

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, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” 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, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” 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,

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we do not expect a material impact on our condensed consolidated financial statements and related disclosures upon adoption.

3.Additional Financial Statement Information

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

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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