ARCHROCK, INC. JP Morgan HY & Leverage Finance Conference FEBRUARY 25, 2019
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: 1.4 billion(2)…
The Leader in U.S. Natural Gas Compression Leading contract compression position supplemented by AMS capabilities Total Compression Outsourced Owned Market 30% of market 70% of market Contract Operations(1) Aftermarket Services…
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 Compression Hanover Compressor founded Exterran formed by merger of…
We Are an Energy Infrastructure Company A unique combination of attractive attributes Energy Infrastructure Oilfield Services Attributes Provide services to oil & gas Provide services to oil & gas Service provider to energy…
Archrock Investment Highlights AROC represents an attractive energy infrastructure investment Gathering focus; a leading provider of large HP, 71% of fleet(1) Midstream / Large HP Focus Compression is a mustrun service for gas…
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 Benefits to customer of outsourcing systems to…
Archrocks Focus on Midstream Our midstream focus results in greater stability UPSTREAM MIDSTREAM DOWNSTREAM Drilling Completions Gathering Processing Large Pipeline/ Refining Marketing Storage Archrocks Compression Focus We…
A Market Leader in Large Horsepower Leveraging the growing industry trend towards larger HP units 29%, Small HP 71%, Large HP Fleet Allocation(1) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Drivers of Large HP Demand Lower…
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 production Marcellus / Utica Niobrara basins Largest U.S. provider…
Contract Operations Customer Base Strong relationships with toptier energy companies Major Customers Revenue 38% % of total revenue from top 10 Diversification customers(1) Longterm 15 years Avg. relationship length with top…
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 Total gas 52.6 50.9 55.2 65.8 80.7 94.8 The Shale Revolution Shale gas 2.2 2.8 7.5 28.3 50.4 65.0 The U.S. has experienced significant growth…
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 U.S. Natural Gas Demand Growth(1) 100 1.9 94.6 LNG Exports 95 2.2 2.2 90 4.1 5.8 85 80 78.4 75 Residential & 70 Commercial…
FINANCIALS ARCHROCK, INC. (NYSE:AROC)
Prudent Stewards of Capital Capital policy based on balancing three objectives…
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% 39% Oil Gas /bbl /MMBtu Track record of generating 120 6 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 227 232 233 209 212 59%…
Recent Financial Highlights (Q4 2018) Strong financial and operational performance in Q4 2018 In 000s, unless noted(1) Q4 2018 Q3 2018 Q4 2017 Revenue 233,159 232,372 209,934 Adjusted EBITDA 97,557 89,466 74,277 Cash available for…
Solid Balance Sheet Position Solid liquidity and balance sheet; selffunding growth capex Debt Maturity Schedule(1) (MM) Balance Sheet & Funding Overview 6% senior notes due April 2021 395 No nearterm debt maturities A B 6% senior…
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 27 ARCHROCK, INC. (NYSE:AROC)
APPENDIX ARCHROCK, INC. (NYSE:AROC)
2019 Guidance FullYear 2019 Guidance in thousands Low High Net income (1) 73,000 103,000 Adjusted EBITDA (2) (3) 370,000 400,000 Cash available for dividend (3) (4) 174,000 194,000 Segment Contract operations revenue 730,000…
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…
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 Addendum IA 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.…
AROC Addendum IC (in thousands) Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 9,974 12,968 Selling, general and administrative 27,553 25,162 29,108 29,660 27,508 26,649 26,298…
AROC Addendum ID ( in thousands) Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 9,974 12,968 Loss from discontinued operations, net of tax 54 Depreciation and amortization…
AROC Addendum IE ( in thousands) 2011 2012 2013 2014 2015 2016 2017 2018 Net income (loss) (355,308) (37,696) 126,606 88,661 (125,697) (65,243) 18,410 29,160 (Income) loss from discontinued operations, net 242,605 (96,966) (129,654)…
AROC Addendum IF ( in thousands) Q118 Q218 Q318 Q418 2018 Net income 2,069 4,149 9,974 12,968 29,160 Depreciation and amortization 44,455 43,331 43,779 43,381 174,946 Longlived asset impairment 4,710 6,953 6,660 9,804 28,127…
AROC Addendum IF (cont.) ( in thousands) Q118 Q218 Q318 Q418 2018 Cash flows from operating activities 62,455 42,760 65,490 55,242 225,947 Inventory write downs (465) (553) (167) (429) (1,614) Provision for doubtful accounts (620)…
AROC Addendum IG Annual Guidance Range ( in thousands) 2019 Low High Net income (1) 73,000 103,000 Depreciation and amortization 180,000 180,000 Interest expense 103,000 103,000 Stockbased compensation expense 9,000 9,000…
CONTACT US Investor Relations Paul Burkhart (Treasurer & VP of Investor Relations) (281) 8368688 investor.relationsarchrock.com www.archrock.com/aroc Corporate Headquarters 9807 Katy Freeway Suite 100 Houston, TX 77024…
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