Shoals Technologies Group Inc

Previous wording

We are a leading provider of electrical balance of systems (“EBOS”) solutions and components for solar, battery storage and electrical vehicle (“EV”) charging applications, selling to customers primarily in the United States as well as internationally. EBOS encompasses all of the components that are necessary to carry the electric current produced by solar panels to an inverter and ultimately to the power grid. EBOS components are mission-critical products that have a high consequence of failure, including lost revenue, equipment damage, fire damage, and even serious injury or death. As a result, we generally believe customers prioritize reliability and safety over price when selecting EBOS solutions.

Current wording

We are a leading provider of electrical balance of systems (“EBOS”) solutions for the energy transition market. EBOS encompasses all of the components that are necessary to carry the electric current produced by solar panels to an inverter and ultimately to the power grid. EBOS components are mission-critical products that have a high consequence of failure, including lost revenue, equipment damage, fire damage, and even serious injury or death. As a result, we generally believe customers prioritize reliability and safety over price when selecting EBOS solutions.

Previous wording

Throughout the first quarter of 2024, we have maintained focus on our growth strategy and continued strengthening our leadership position in the industry. We believe that as of March 31, 2024, we have worked with 14 of the top 15 solar EPCs, per Wood Mackenzie data from 2019-2023, and 12 of those EPCs used our combine-as-you-go system on their projects.

Current wording

Throughout the first two quarters of 2024, we have maintained focus on our growth strategy and continued strengthening our leadership position in the industry. We believe that as of June 30, 2024, we have worked with 13 of the top 15 U.S. solar EPCs, per Wood Mackenzie data from 2022-2024, and 11 of those EPCs used our combine-as-you-go system on their projects.

Previous wording

We derived 71.6% of our revenue from the sale of system solutions for the three months ended March 31, 2024. For the same period, we derived substantially all of our revenue from customers in the U.S. As of March 31, 2024, we had $615.2 million of backlog and awarded orders, backlog of $196.2 million represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders of $419.0 million are orders we are in the process of documenting a contract for but for which a contract has not yet been signed. As of March 31, 2024, we believe approximately $196.2 million of backlog and $214.6 million of awarded orders have delivery dates in 2024. The remaining $204.4 million have planned delivery dates beyond 2024. Additionally, more than 12% of our March 31, 2024 backlog and awarded orders related to international projects. As of March 31, 2024, backlog and awarded orders increased by 17% relative to the same date last year and decreased by 3% relative to December 31, 2023.

Current wording

We derived 76.0% of our revenue from the sale of system solutions for the six months ended June 30, 2024. For the same period, we derived substantially all of our revenue from customers in the U.S. As of June 30, 2024, we had $642.3 million of backlog and awarded orders, backlog of $206.7 million represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders of $435.6 million are orders we are in the process of documenting a contract for but for which a contract has not yet been signed. As of June 30, 2024, we believe approximately $206.1 million of backlog and $259.5 million of awarded orders have delivery dates in the next twelve months. Additionally, more than 12% of our June 30, 2024 backlog and awarded orders related to international projects. As of June 30, 2024, backlog and awarded orders increased by 18% relative to the same date last year and increased by 4% relative to March 31, 2024.

Previous wording

Global inflationary pressures are expected to persist during the remainder of 2024. As a result, increased energy prices, freight premiums, and other operating costs continued in the first quarter of 2024 and are expected to persist during the rest of 2024. Increased interest rates also continued to result in higher interest rates associated with our Senior Secured Credit Agreement in the three months ended March 31, 2024. Additional increases will have a corresponding increase in the interest rates charged under our Senior Secured Credit Agreement. The eventual implications of higher government deficits and debt, tighter monetary policy, and potentially higher long-term interest rates may drive a higher cost of capital during our forecasted period.

Current wording

Global inflationary pressures are expected to persist to a lesser extent during the remainder of 2024. As a result of such inflationary pressures, increased energy prices, freight premiums, and other operating costs continued in the first two quarters of 2024 and are expected to persist during the rest of 2024. Increased interest rates also continued to result in generally higher interest rates associated with our Senior Secured Credit Agreement in the three and six months ended June 30, 2024. The eventual implications of higher government deficits and debt, tighter monetary policy, and potentially high interest rates may drive a higher cost of capital during our forecasted period.

Previous wording

While the delays in securing raw materials have abated since the highs in 2022, our ability to obtain raw materials required to manufacture our components and system solutions from domestic and international suppliers, as well as our ability to secure inbound logistics to and from our facilities, were still impacted in 2023 and the first quarter of 2024. The Company does not directly source a significant amount of raw materials from Europe. However, the Russia-Ukraine war has reduced the availability of certain materials that can be sourced in Europe and, as a result, increased global logistics costs for the procurement of some inputs and materials used in our products. We expect these trends to persist throughout 2024.

Current wording

Our ability to obtain raw materials required to manufacture our components and system solutions from domestic and international suppliers, as well as our ability to secure inbound logistics to and from our facilities, were still impacted in 2023 and the first two quarters of 2024. The Company does not directly source a significant amount of raw materials from Europe. However, the Russia-Ukraine war has reduced the availability of certain materials that can be sourced in Europe and, as a result, increased global logistics costs for the procurement of some inputs and materials used in our products. We expect these trends to persist throughout the remainder of 2024.

Previous wording

In addition, changes over the last few years in the international relations and tariff regimes between the U.S. and China in response to various political issues and heightened uncertainty regarding China-Taiwan relations could significantly adversely impact the availability of parts and components to us, and, correspondingly, our ability to produce our components at targeted levels, although we did not experience such negative effects during the first quarter of 2024. We are continuously monitoring the condition of our supply chain and evaluating our procurement strategy to reduce any negative impact on our business, financial condition, and results of operations.

Current wording

In addition, changes over the last few years in the international relations and tariff regimes between the U.S. and China in response to various political issues and heightened uncertainty regarding China-Taiwan relations could significantly adversely impact the availability of parts and components to us, and, correspondingly, our ability to produce our components at targeted levels, although we did not experience such negative effects during the first two quarters of 2024. We continue to monitor the condition of our supply chain and evaluate our procurement strategy to reduce any negative impact on our business, financial condition, and results of operations. During the three and six months ended June 30, 2024 we continued to monitor and reduce our inventory levels.

Previous wording

During 2023 and continuing in the first quarter in 2024, the domestic utility scale solar market experienced project delays that have pushed projects out from the first half of 2024. Additionally, in 2023, the domestic utility scale solar market started experiencing slowing growth, which is expected to persist in the near term. These trends are the result of the costs of permitting issues, project financing, lingering uncertainty about the application of the Inflation Reduction Act of 2022 to solar projects, supply chain constraints and interconnection complications. We expect these trends to persist throughout 2024. These project slowdowns and delays have impacted our results, though we expect this trend to reverse over time. However, even though we expect our growth rate to decline from the very high levels of the last few years, we believe that our domestic utility scale business will continue growing at an attractive rate.

Current wording

During 2023 and continuing in the first two quarters in 2024, the domestic utility scale solar market experienced project delays that have pushed projects out from the first half of 2024. Additionally, in 2023, the domestic utility scale solar market started experiencing slowing growth, which is expected to persist in the near term. These trends are the result of the costs of permitting issues; project financing; lingering uncertainty about the application of the Inflation Reduction Act of 2022 to solar projects; uncertainty regarding changes in the U.S. trade environment, including the imposition of trade restrictions, import tariffs, anti-dumping and countervailing duties; supply chain constraints; and interconnection complications. We expect these trends to persist throughout the remainder of 2024. These project slowdowns and delays have impacted our results, though we expect this trend to reverse over time. However, even though we expect our growth rate to decline from the very high levels of the last few years, we believe that our domestic utility scale business will continue growing at an attractive rate.

Previous wording

As of March 31, 2024, other than increased interest rates and project pushouts, which resulted in increased interest expense and decreased revenue, respectively, we did not experience material adverse effects on our financial results from the events and trends discussed above.

Current wording

As of June 30, 2024, other than project pushouts, which resulted in decreased revenue, we did not experience material adverse effects on our financial results from the events and trends discussed above.

Previous wording

Operating expenses consist of general and administrative expenses as well as depreciation and amortization expense. Personnel-related costs are the most significant component of our operating expenses and include salaries, equity-based compensation, benefits, payroll taxes and commissions. The number of full-time employees in our general and administrative departments increased from 115 to 159 from March 31, 2023 to March 31, 2024, and we expect to hire new employees in the future to support our growth. The timing of these additional hires could materially affect our operating expenses in any particular period, both in absolute dollars and as a percentage of revenue.

Current wording

Operating expenses consist of general and administrative expenses as well as depreciation and amortization expense. Personnel-related costs are the most significant component of our operating expenses and include salaries, equity-based compensation, benefits, payroll taxes and commissions. The number of full- time employees in our general and administrative departments increased from 121 to 155 from June 30, 2023 to June 30, 2024, and we expect to hire new employees in the future to support our growth. The timing of these additional hires could materially affect our operating expenses in any particular period, both in absolute dollars and as a percentage of revenue.

Previous wording

Revenue decreased by $14.3 million, or 14%, for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, driven by lower sales volumes resulting from fewer production days, as well as solar project delays that have pushed projects out from the first half of 2024.

Current wording

Revenue decreased by $20.0 million, or 17%, for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, driven by lower sales volumes primarily resulting from lower demand as a result of solar project delays that have pushed projects out from the first half of 2024.

Previous wording

Cost of revenue decreased by $2.5 million, or 4%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, driven by the decrease in revenue. Gross profit as a percentage of revenue was 40.2% during three months ended March 31, 2024, and 45.9% during the three months ended March 31, 2023. The decrease in gross profit as a percentage of revenue was driven by product mix, an increase in labor costs, and a reduction in leverage on fixed costs.

Current wording

Cost of revenue decreased by $9.4 million, or 14%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, driven by the decrease in revenue. Gross profit as a percentage of revenue was 40.3% during three months ended June 30, 2024, and 42.4% during the three months ended June 30, 2023. The decrease in gross profit as a percentage of revenue was driven by an increase in labor costs, and a reduction in leverage on fixed costs.

Previous wording

Depreciation and amortization expenses decreased $0.1 million, or 3%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The decrease in depreciation and amortization was due to a reduction in amortization expense related to definite lived intangible assets that became fully amortized during 2023. This decrease is offset by an increase in depreciation expense related to additional purchases of plant, property and equipment to support our growth initiatives.

Current wording

Depreciation and amortization expenses increased by less than $0.1 million, or 2%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The increase in depreciation and amortization was due to an increase in depreciation expense related to additional purchases of PP&E to support our growth initiatives. This increase was offset by a decrease in depreciation and amortization resulting from definite lived intangible assets that became fully amortized during 2023.

Previous wording

General and administrative expenses increased $2.8 million, or 14%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in general and administrative expenses was the result of an increase in professional fees of $3.7 million, primarily related to legal fees incurred in connection with the ongoing patent infringement and wire insulation shrinkback litigation, as well as an increase in wages and related taxes of $1.2 million due to increased employee headcount to support our growth initiatives. This increase is offset by a decrease of $2.5 million in equity-based compensation, which is attributable to the termination of our former CEO’s employment for disability during March 2023.

Current wording

General and administrative expenses increased $5.3 million, or 14%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The increase in general and administrative expenses was the result of an increase in professional fees of $5.1 million primarily related to legal fees incurred in connection with the ongoing patent infringement and wire insulation shrinkback litigation, as well as an increase in wages and related taxes of $2.2 million due to increased employee headcount to support our growth. These increases are offset by a decrease in equity-based compensation of $2.8 million mainly related to termination of our former CEO’s employment for disability during the six months ended June 30, 2023.

Previous wording

Interest expense, net decreased by $1.6 million or 27%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This decrease was due to a write-off of $2.5 million of unamortized deferred interest as a result of voluntary prepayments made on, and the payoff of, the Term Loan Facility during the three months ended March 31, 2024, as well as a decrease in the total weighted average outstanding balance of the Term Loan Facility and Revolving Credit Facility (as defined in Note 9 - Long-Term Debt) during the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was offset by a write-off of $2.3 million of unamortized deferred financing costs as a result of voluntary prepayments made on, and the payoff of, the Term Loan Facility during the three months ended March 31, 2024, as well as an increase in borrowing rates.

Current wording

Interest expense, net decreased by $5.1 million, or 41%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This decrease was due to a write-off of $2.5 million of unamortized deferred interest as a result of voluntary prepayments made on, and the payoff of, the Term Loan Facility during the six months ended June 30, 2024, as well as a decrease in the total weighted average outstanding balance of the Term Loan Facility and Revolving Credit Facility (as defined in Note 9 - Long-Term Debt) during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, and a decrease in borrowing rates as a result of the amendment to the Senior Secured Credit Agreement. The decrease was offset by a write-off of $2.3 million of unamortized deferred financing costs as a result of voluntary prepayments made on, and the payoff of, the Term Loan Facility during the six months ended June 30, 2024.

Previous wording

Income tax expense totaled $2.4 million for the three months ended March 31, 2024, as compared to income tax expense of $3.1 million for the three months ended March 31, 2023. Our effective income tax rate for the three months ended March 31, 2024 and 2023 was 33.9% and 15.5%, respectively. The increase in our effective income tax rate for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was due to a reduction in favorable permanent differences related to net income attributable to non-controlling interests and discrete tax adjustments related to RSU and PSU vestings during the three months ended March 31, 2024.

Current wording

Income tax expense was $6.2 million for the six months ended June 30, 2024 as compared to income tax expense of $9.3 million for the six months ended June 30, 2023. Our effective income tax rate for the six months ended June 30, 2024 and 2023 was 27.1% and 20.6%, respectively. The increase in the effective tax rate was due to a reduction in favorable permanent differences as a result of net income attributable to non-controlling interests and discrete tax adjustments related to RSU and PSU vestings during the six months ended June 30, 2024.

Previous wording

(a)For the three months ended March 31, 2023, represents $2.0 million of inventory write-downs of defective wire in connection with the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback. We consider expenses incurred in connection with the identification, repair and replacement of the impacted wire harnesses distinct from normal, ongoing service identification, repair and replacement expenses that would be reflected under ongoing warranty expenses within the operation of our business, which we do not exclude from our non-GAAP measures. In the future, we also intend to exclude from our non-GAAP measures the benefit of liability releases, if any. We believe excluding expenses from these discrete liability events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 8 - Warranty Liability, in our condensed consolidated financial statements included in this Form 10-Q for more information.

Current wording

(a)For the six months ended June 30, 2024, represents (i) $0.5 million of inventory write-downs of wire in connection with the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback. For the six months ended June 30, 2023, represents (i) $8.9 million of wire insulation shrinkback warranty expenses related to the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback, recorded during the three months ended June 30, 2023 and (ii) $2.6 million of inventory write-downs of defective wire in connection with the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback, including $2.0 million and $0.6 million, respectively, recorded during the three months ended March 31, 2023 and June 30, 2023. We consider expenses incurred in connection with the identification, repair and replacement of the impacted wire harnesses distinct from normal, ongoing service identification, repair and replacement expenses that would be reflected under ongoing warranty expenses within the operation of our business, which we do not exclude from our non-GAAP measures. In the future, we also intend to exclude from our non-GAAP measures the benefit of liability releases, if any. We believe excluding expenses from these discrete liability events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 8 - Warranty Liability, in our condensed consolidated financial statements included in this Form 10-Q for more information.

Previous wording

(b)For the three months ended March 31, 2024, represents $0.8 million of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. We consider this litigation distinct from ordinary course legal matters given the expected magnitude of the expenses, the nature of the allegations in the Company’s complaint, the amount of damages sought, and the impact of the matter underlying the litigation on the Company’s financial results. In the future, we also intend to exclude from our non-GAAP measures the benefit of recovery, if any. We believe excluding expenses from these discrete litigation events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 14 - Commitments and Contingencies, in our condensed consolidated financial statements included in this Form 10-Q for more information.

Current wording

(b)For the three and six months ended June 30, 2024, represents $1.4 million and $2.2 million, respectively, of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. We consider this litigation distinct from ordinary course legal matters given the expected magnitude of the expenses, the nature of the allegations in the Company’s complaint, the amount of damages sought, and the impact of the matter underlying the litigation on the Company’s financial results. In the future, we also intend to exclude from our non-GAAP measures the benefit of recovery, if any. We believe excluding expenses from these discrete litigation events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 13 -

Previous wording

(c)Reflects net income to Class A common stock from assumed exchange of corresponding shares of our Class B common stock held by our founder and management.

Current wording

(c)Reflects net income to Class A common stock from assumed exchange of corresponding shares of our Class B common stock formerly held by our founder and management.

Previous wording

(d)Shoals Technologies Group, Inc. is subject to U.S. Federal income taxes, in addition to state and local taxes. The adjustment to the provision for income tax reflects the effective tax rates below, assuming Shoals Technologies Group, Inc. owned 100% of the units in Shoals Parent LLC prior to March 10, 2023.

Current wording

(d)Shoals Technologies Group, Inc. is subject to U.S. Federal income taxes, in addition to state and local taxes. The adjustment to the provision for income tax reflects the effective tax rates below, and for the period prior to March 10, 2023, assumes Shoals Technologies Group, Inc. owned 100% of the units in Shoals Parent LLC.

Previous wording

Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding (in thousands, except per share):

Current wording

Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding (in thousands, except per share amounts):

Previous wording

We generated cash from operating activities of $12.9 million during the three months ended March 31, 2024, as compared to cash provided by operating activities of $9.9 million during the three months ended March 31, 2023. As of March 31, 2024, our cash and cash equivalents were $15.2 million, a decrease from $22.7 million as of December 31, 2023. As of March 31, 2024 we had outstanding borrowings of $168.8 million, a decrease from $183.8 million as of December 31, 2023. As of March 31, 2024, we also had $31.0 million available for additional borrowings under our $200.0 million Revolving Credit Facility.

Current wording

30, 2023. As of June 30, 2024, our cash and cash equivalents were $3.2 million, a decrease from $22.7 million as of December 31, 2023. As of June 30, 2024 we had outstanding borrowings of $146.8 million, a decrease from $183.8 million as of December 31, 2023. As of June 30, 2024, we also had $52.9 million available for additional borrowings under our $200.0 million Revolving Credit Facility.

Previous wording

During the three months ended March 31, 2024, we also used approximately $3.7 million of cash to pay for expenses related to the identification, repair and replacement of the wire harnesses impacted in connection with the wire insulation shrinkback matter. We expect to continue spending significant amounts of cash in connection thereof. For more information, see Note 8 - Warranty Liability in our condensed consolidated financial statements.

Current wording

During the six months ended June 30, 2024, we also used approximately $9.0 million of cash to pay for expenses related to the identification, repair and replacement of the wire harnesses impacted in connection with the wire insulation shrinkback matter. We expect to continue spending significant amounts of cash in connection thereof. For more information, see Note 8 - Warranty Liability in our condensed consolidated financial statements.

Previous wording

For the three months ended March 31, 2024, cash provided by operating activities was $12.9 million, primarily due to operating results that included $4.8 million of net income, which included $13.7 million of non-cash expense, along with a decrease in accounts receivable and unbilled receivables of $20.4 million. These cash inflows were offset by a decrease of $12.1 million in accounts payable and accrued expenses, an increase of $6.8 million in inventory, cash outflows of $3.7 million related to the warranty liability, and a decrease of $0.4 million in deferred revenue.

Current wording

For the six months ended June 30, 2024, cash provided by operating activities was $50.7 million, primarily due to operating results that included $16.6 million of net income, which included $26.5 million of non-cash expense, along with a decrease in accounts receivable and unbilled receivables of $38.0 million. These cash inflows were offset by a decrease of $11.9 million in accounts payable and accrued expenses driven by payment of 2023 bonuses during March 2024 and a reduction in accrued interest, cash outflows of $9.0 million related to the warranty liability, an increase of $7.7 million in inventory, and a decrease of $1.0 million in deferred revenue.

Previous wording

For the three months ended March 31, 2023, cash provided by operating activities was $9.9 million, primarily due to operating results that included $17.0 million of net income, which included $16.0 million of non-cash expense, along with an increase of $11.3 in accounts payable and accrued expenses. These cash inflows were partially offset by an increase in accounts receivable and unbilled receivables of $28.1 million, which was primarily driven by an increase in revenues, a $3.2 million increase in inventory as a result of increasing our raw materials inventory to support growth and reduce the likelihood of supply chain issues from our raw materials suppliers, and an increase of $3.3 million in other assets, which is primarily related to prepayment of a directors and officers insurance policy.

Current wording

For the six months ended June 30, 2023, cash provided by operating activities was $37.8 million, primarily due to operating results that included $35.9 million of net income, which included $39.5 million of non-cash expense, along with an increase of $8.0 million in deferred revenue and an increase of $6.8 million in accounts payable and accrued expenses. These cash inflows were partially offset by an increase in accounts receivable and unbilled receivables of $51.8 million.

Previous wording

For the three months ended March 31, 2023, net cash used in investing activities was $2.0 million, all of which was attributable to the purchase of property and equipment.

Current wording

For the six months ended June 30, 2024, net cash used in investing activities was $4.5 million, which was primarily attributable to the purchase of property and equipment.

Previous wording

For the three months ended March 31, 2024, net cash used in investing activities was $2.5 million, all of which was attributable to the purchase of property and equipment.

Current wording

For the six months ended June 30, 2023, net cash used in investing activities was $4.4 million, all of which was attributable to the purchase of property and equipment.

Previous wording

For the three months ended March 31, 2024, net cash used in financing activities was $17.8 million, primarily due to $143.8 million in voluntary prepayments on, and the payoff of, the Term Loan Facility, $2.0 million of deferred financing costs paid in connection with the amendment of the Senior Secured Credit Facility on March 19, 2024, and $0.8 million in taxes related to net share settled equity awards. These cash outflows were offset by $128.8 million in net borrowings on the Revolving Credit Facility.

Current wording

For the six months ended June 30, 2024, net cash used in financing activities was $65.7 million, primarily due to $143.8 million in principal payments on the Term Loan Facility, $25.2 million paid to repurchase the Company’s Class A Common Stock under the ASR, $2.6 million of deferred financing costs paid in connection with the amendment to the Senior Secured Credit Agreement, and $0.9 million in taxes related to net share settled equity awards. These cash outflows are offset by $106.8 million in net proceeds on the Revolving Credit Facility.

Previous wording

For the three months ended March 31, 2023, net cash used in financing activities was $10.2 million, primarily due to $3.6 million in taxes related to net share settled equity awards, $3.0 million in net payments on the Revolving Credit Facility, and $2.6 million in distributions to our non-controlling interest holders.

Current wording

For the six months ended June 30, 2023, net cash used in financing activities was $36.4 million, primarily due to $3.6 million in taxes related to net share settled equity awards, $28.0 million in net payments on the Revolving Credit Facility, $1.0 million in principal payments on the Term Loan Facility, and $2.6 million in distributions to our non-controlling interest holders.