This report includes the non-GAAP financial measure of free cash flow, as described below. This non-GAAP measure is intended to provide additional information only and should not be considered as an alternative to, or more meaningful than, net cash provided by operating activities, or any other measure calculated in accordance with GAAP. Certain items excluded from this non-GAAP measure are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital, tax structure, and historic costs of depreciable assets.
Free cash flow is defined as adjusted operating cash flow less accrual-based capital expenditures and capital contributions to equity method investments. Adjusted operating cash flow is defined as net cash provided by operating activities less changes in other assets and liabilities. Adjusted operating cash flow and free cash flow are non-GAAP supplemental financial measures used by the company’s management to assess liquidity, including the company’s ability to generate cash flow in excess of its capital requirements and return cash to shareholders. The company’s management believes that these measures provide useful information to external users of the company’s consolidated financial statements, such as industry analysts, lenders, and ratings agencies. Free cash flow should not be considered as an alternative to net cash provided by operating activities or any other measure of liquidity presented in accordance with GAAP.
The table below reconciles free cash flow with net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP, as derived from the Statements of Consolidated Cash Flows included in the company’s Annual Report on Form 10-K for the years presented. As a result of the completion of the Equitrans Midstream acquisition during 2024, the company adjusted its non-GAAP measure for free cash flow. In particular, free cash flow has been changed to exclude capital contributions to equity method investments.
Years Ended December 31 (Thousands)
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|---|---|
| Net cash provided by operating activities | $2,826,973 | $3,178,850 | $3,465,560 | $1,662,448 | $1,537,701 | $1,851,704 |
| Decrease (increase) in changes in other assets and liabilities | $281,805 | ($383,632) | ($99,229) | $366,708 | ($139,178) | ($19,536) |
| Adjusted operating cash flow | $3,108,778 | $2,795,218 | $3,366,331 | $2,029,156 | $1,398,523 | $1,832,168 |
| Less: capital expenditures | ($2,265,948) | ($1,925,243) | ($1,440,112) | ($1,104,114) | ($1,078,788) | ($1,772,479) |
| Less: capital contributions to equity method investments | ($148,049) | ($12,092) | ($1,394) | ($386) | — | — |
| Free cash flow | $694,781 | $857,883 | $1,924,825 | $924,656 | $319,735 | $59,689 |
