ARCHROCK, INC. INVESTOR PRESENTATION MAY 2019 ARCHROCK, INC. (NYSE:AROC)
Archrock Company Overview Growth and returns oriented energy infrastructure company Natural gas compression CCorp based in Houston, Texas NYSE: AROC Largest outsourced compression provider in U.S.(1) Market Cap: 1.3 billion(2)(3)…
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 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 Hanover Compressor Exterran formed by merger Archrock is the…
An Attractive Energy Infrastructure Investment Archrock Investment Highlights Gathering focus; a leading provider of large HP, 72% of fleet(1) Midstream / Compression is a mustrun service for gas transportation Large HP Focus…
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 28% Small HP 72% 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 38% 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 The Shale Revolution Total gas 52.6 50.9 55.2 65.8 80.7 96.8 Shale gas 2.2 2.8 7.5 28.3 50.4 67.0 The U.S. has experienced 50.4 48.2 47.7 37.6…
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 U.S. Natural Gas Demand Growth(1) 0.5 94.1 95 1.7 0.7 0.7 LNG Exports 5.2 90 85.3 85 80 75 70 Residential & 2018 LNG…
FINANCIALS ARCHROCK, INC. (NYSE:AROC)
Prudent Stewards of Capital Capital policy based on balancing three objectives 1 2018 simplification accelerates path to…
Solid Profitability Through Cycle A resilient business model tied to production, not commodity prices Adjusted EBITDA margin (%)(1) Oil 26% 28% 35% 35% 38% 41% 35% 39% Gas /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 232 233 236 227 209 212…
Recent Financial Highlights (1Q 2019) Solid financial and operational performance in 1Q 2019 In 000s, unless noted(1) 1Q 2018 4Q 2018 1Q 2019 Revenue 212,040 233,159 236,159 Net income 2,069 12,968 19,456 Adjusted EBITDA 80,539…
Solid Balance Sheet Position Achieving balance sheet targets while selffunding growth Balance Sheet & Funding Overview Debt Maturity Schedule(1) (MM) No nearterm debt maturities 500 A 6% senior notes due October 2022 Completed…
Executing on Balance Sheet Goals On target to…
Financial Guidance Robust market backdrop supports attractive 2019 forecast 2019 Guidance Longterm Targets Net Income: 73 103 < 4.0x Adjusted EBITDA: (1) 370 400 Leverage in 2020 Cash Available for Dividend: (1) 174 194…
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)
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…
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 Reconciliation of Net Income (Loss) to Gross Margin (in thousands) Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 9,974 12,968 19,456 Loss from…
Archrock Addendum I-D Reconciliation of Net Income (Loss) to Adjusted EBITDA ( in thousands) Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 9,974 12,968 19,456 Loss from…
Archrock Addendum I-E Reconciliation of Net Income (Loss) to Adjusted EBITDA ( 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…
Archrock Addendum I-F Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend ( in thousands) Q118 Q218 Q318 Q418 2018 Q119 Net income 2,069 4,149 9,974 12,968 29,160 19,456 Loss from discontinued…
Archrock Addendum I-F (cont.) Reconciliation of Cash Flows from Operating Activities to Cash Available for Dividend ( in thousands) Q118 Q218 Q318 Q418 2018 Q119 Cash flows from operating activities 62,455 42,760 65,490 55,242 225,947…
Archrock Addendum I-G FullYear 2019 Guidance ( 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…
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) (5) 174,000 194,000 Segment Contract operations revenue…
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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