ARCHROCK, INC. INVESTOR PRESENTATION AUGUST 2018 ARCHROCK, INC. (NYSE:AROC)
Archrock Company Overview Growth and returns oriented energy infrastructure company Natural gas compression company based in Houston, Texas NYSE: AROC Largest outsourced compression provider in U.S.(1) Market Cap: 1.7 billion(2)…
Our Rich Company Legacy Successful 60+ year company history with proven success over time South Coast Gas 1950s 1990 2006 2007 2014 2015 Current South Coast Gas Hanover Compressor Exterran formed by merger Archrock is the…
Simplification Overview & Rationale Merger transaction positions Archrock for the future On April 26, 2018, AROC completed a merger in which it acquired all outstanding common units of Archrock Partners (APLP) it did not already own…
We are an Energy Infrastructure Company A unique combination of attractive attributes Energy Infrastructure Oilfield Services Attributes Service provider to energy Provide services to oil Provide services to oil & industry & gas…
Archrock Investment Highlights AROC represents an attractive energy infrastructure investment Gathering focus; a leading provider of large HP, 70% of fleet(1) Midstream / Compression is a mustrun service for gas transportation…
OPERATIONS ARCHROCK, INC. (NYSE:AROC)
Compression 101 What Do we Do Compression increases pressure within a pipeline to transport natural gas A MustRun Service Equipment that moves natural gas through infrastructure systems to consuming Benefits to customer of…
Archrocks Focus on Midstream Our midstream focus results in greater stability UPSTREAM MIDSTREAM DOWNSTREAM Large Pipeline/ Drilling Completions Gathering Processing Refining Marketing Storage Archrocks Compression Focus We…
A Market Leader in Large Horsepower Leveraging the growing industry trend towards larger HP units 30% Small HP 70% Large HP Fleet Allocation(1) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Drivers of Large HP Demand Lower initial…
Diversified Platform Across Key Shale Basins Stability and growth opportunity across U.S. production basins Material presence and scale in all major U.S. shale Marcellus / Utica production basins Niobrara Largest U.S. provider…
Contract Operations Customer Base Strong relationships with toptier energy companies Revenue 43% Major Customers % of total revenue from Diversification top 10 customers(1) Longterm 15 years Relationships Avg. relationship…
Aftermarket Services Capabilities Growing opportunities to service customerowned compressors Ability to serve the entire U.S. compression market Margin contribution from customers with their own compression solutions Leverages…
FUNDAMENTALS ARCHROCK, INC. (NYSE:AROC)
Abundant U.S. Natural Gas Supply The shale revolution has transformed natural gas supply Bcf/d Total gas 52.6 51.0 55.2 65.9 73.6 92.8 The Shale Revolution Shale gas 2.2 2.8 7.5 28.3 40.5 58.8 The U.S. has experienced significant…
Structural Shift in Demand Sources The shale revolution has structurally shifted & revolutionized natural gas demand Abundant U.S. Natural Gas Supply Stable Pricing LongTerm Projects Significant Exports Significant growth in U.S.…
Key Natural Gas Demand Drivers Robust demand drivers led by natural gas export opportunities Bcf/d 100.0 U.S. Natural Gas Demand Growth(1) 93.9 95.0 1.8 2.0 LNG Exports 3.9 2.1 90.0 5.7 85.0 78.4 80.0 75.0 70.0…
The Leader in U.S. Natural Gas Compression Leading contract compression position supplemented by AMS capabilities Total Compression Market Outsourced Owned 30% of market 70% of market Contract Compression(1) Aftermarket Services…
FINANCIALS ARCHROCK, INC. (NYSE:AROC)
Solid Profitability Through Cycle A resilient business model tied to production, not commodity prices Adjusted EBITDA margin (%)(1) 26% 28% 35% 35% 38% 41% 35% 38% Gas Oil /bbl /MMBtu 120 6 Track record of generating attractive…
Financial & Operational Momentum Improving profitability trend and fleet utilization benefiting the company Revenue (MM) Gross Margin % Contract Operations Aftermarket Services Contract Operations AMS Total 227 209 212 60% 198 198…
Recent Financial Highlights (Q2 2018) Solid financial and operational performance in Q2 2018 In 000s(1) Q2 2018 Q1 2018 Q2 2017 Revenue 226,870 212,040 197,982 Adjusted EBITDA 84,694 80,539 74,182 Cash available for dividend…
Improving Balance Sheet Position Solid liquidity; improving balance sheet; 100% selffunding growth capex Balance Sheet & Funding Overview Debt Maturity Schedule(1) (MM) No nearterm debt maturities A 6% senior notes due April 2021…
Prudent Stewards of Capital Capital policy based on balancing three objectives 1 Recent simplification accelerates path to…
Key Takeaways We are the leader in U.S. natural gas compression Midstream / Resilience Visible, Long Solid Financial Proactive Large HP Focus Through Cycles Term Growth Position Leadership 26 ARCHROCK, INC. (NYSE:AROC)
APPENDIX ARCHROCK, INC. (NYSE:AROC)
Management Overview Highly qualified and experienced management team D. Bradley Childers, President and Chief Executive Officer Brad Childers is President, Chief Executive Officer and a director of Archrock, Inc. Previously, he served…
AROC Trading Correlation AROC stock performance vs. benchmarks AROC: Trailing 200day Correlation(1) AROC: Average Correlation(2) 1.0 AMEI OSX Gas Oil 0.8 Avg. 0.81 0.68 0.47 0.49 High 0.98 0.95 0.98 0.89 0.6 Low 0.49 (0.01)…
Archrock Addendum I-A Archrock, Inc. Gross margin, a nonGAAP measure, is defined as total revenue less cost of sales (excluding depreciation and amortization). Gross margin percentage is defined as gross margin divided by revenue.…
Archrock Addendum I-C (in thousands) Q117 Q217 Q317 Q417 Q118 Q218 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 Selling, general and administrative 27,553 25,162 29,108 29,660 27,508 26,649 Depreciation and…
Archrock Addendum I-D ( in thousands) Q117 Q217 Q317 Q417 Q118 Q218 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 Loss from discontinued operations, net of tax 54 Depreciation and amortization 47,772 47,248…
Archrock Addendum I-E ( in thousands) 2011 2012 2013 2014 2015 2016 2017 Net income (loss) (355,308) (37,696) 126,606 88,661 (125,697) (65,243) 18,410 (Income) loss from discontinued operations, net 242,605 (96,966) (129,654) (105,774)…
Archrock Addendum I-F Reconciliation of Archrock, Inc. Net Income to Cash Available for Dividend ( in thousands) Q118 Q218 Net income 2,069 4,149 Depreciation and amortization 44,455 43,331 Longlived asset impairment 4,710…
Archrock Addendum I-F (cont.) Reconciliation of Archrock, Inc. Cash Flows from Operations to Cash Available for Dividend ( in thousands) Q118 Q218 Cash flows from operating activities 62,455 42,760 Inventory write downs (465)…
CONTACT US Investor Relations Paul Burkhart (Vice President, Finance) (281) 8368688 investor.relationsarchrock.com www.archrock.com/aroc Corporate Headquarters 9807 Katy Freeway Suite 100 Houston, TX 77024 ARCHROCK, INC.…
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