ARCHROCK, INC. INVESTOR PRESENTATION NOVEMBER 5, 2019 ARCHROCK, INC. (NYSE:AROC)
Archrock Company Overview Growth and returns oriented energy infrastructure company Natural gas compression C-Corp based in Houston, Texas NYSE: AROC Largest outsourced compression provider in U.S.(1) Market Cap: 1.5 billion(2)…
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…
Recent Acquisition & Divestitures Transactions Further Standardize Archrocks Fleet Archrock acquired Elite Compression Services on August 1, 2019 Approximately 430,000 of primarily large compression horsepower1 Approximately 55…
Acquisition Strategic Rationale Key Transaction Benefits Midstream Focus Predominantly large HP fleet focused on supporting midstream infrastructure with Blue Chip 90% utilization since inception driven by stable production-driven…
An Attractive Energy Infrastructure Investment Archrock Investment Highlights Gathering focus; a leading provider of large HP, 74% of fleet(1) Midstream / Compression is a must-run 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 Must-Run 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 26% Small HP 74% 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 top-tier energy companies Revenue 39% Major Customers % of total revenue from Diversification top 10 customers(1) Long-term 15 years Relationships Avg. relationship…
Aftermarket Services Capabilities Growing opportunities to service customer-owned 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 83.4 96.6 Shale gas 2.2 2.8 7.5 28.3 53.1 67.0 The U.S. has experienced 50.4 48.2 47.7 37.6…
Compression Benefiting from Stable Natural Gas Prices Historically low and stable U.S. natural gas prices providing supportive backdrop 14 Natural gas prices averaged 2-5/mmbtu for the Trailing 75D Avg. 12 (1) past decade, with…
Key Natural Gas Demand Drivers Robust demand drivers led by natural gas export opportunities Bcf/d U.S. Natural Gas Demand Growth(1) 100 3.4 1.6 -1.4 96.6 LNG Exports 3.5 95 6.1 90 83.4 85 80 75 70 Residential & 2018 LNG Net…
ESG ARCHROCK, INC. (NYSE:AROC)
Archrock: A Responsible Company Making the difference where it matters ENVIRONMENTAL SOCIAL GOVERNANCE Dedicated focus on air Full range of employee 7 of 9 directors are quality and health benefits independent Continuous fleet…
FINANCIALS ARCHROCK, INC. (NYSE:AROC)
Prudent Stewards of Capital Capital policy based on balancing three objectives 1 2018 simplification accelerated 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 245 Contract Operations AMS Total 227 232 233 236 238…
Recent Financial Highlights Strong financial and operational performance in 3Q 2019 In 000s, unless noted(1) 3Q 2018 2Q 2019 3Q 2019 Revenue 232,372 238,390 244,949 Net income 9,974 11,423 20,407 Adjusted EBITDA 89,466 100,664…
Solid Balance Sheet Position Achieving balance sheet targets Balance Sheet & Funding Overview Debt Maturity Schedule (MM) No near-term debt maturities A 6% senior notes due October 2022 Ample liquidity with 246 million at B…
Executing on Balance Sheet Goals Reducing Leverage to strengthen balance sheet A B Achieving leverage reduction via On target to achieve target leverage of consistent growth in Adjusted…
Financial Guidance Robust market backdrop supports attractive 2019 forecast 2019 Guidance (MM) (1) Long-term Targets Net Income 70 80 < 4.0x Adjusted EBITDA(2) 400 410 Leverage in 2020 Cash Available for Dividend(2) 210 220…
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 31 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…
Archrock Addendum I-A Archrock, Inc. Gross margin, a non-GAAP 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) Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 9,974 12,968…
Archrock Addendum I-D Reconciliation of Net Income (Loss) to Adjusted EBITDA ( in thousands) Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 9,974…
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 from…
Archrock Addendum I-F Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend ( in thousands) Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2-19 Q3-19 Net income 2,069 4,149 9,974 12,968 29,160 19,456 11,423 20,407…
Archrock Addendum I-F (cont.) Reconciliation of Cash Flows from Operating Activities to Cash Available for Dividend ( in thousands) Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2-19 Q3-19 Cash flows from operating activities 62,455 42,760…
Archrock Addendum I-G Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend Full-Year 2019 Guidance (1) Low High Net income (2) 70,000 80,000 Depreciation and amortization 188,000 188,000 Interest…
2019 Guidance Full-Year 2019 Guidance (1) in thousands Low High (2) Net income 70,000 80,000 Adjusted EBITDA (3) (4) 400,000 410,000 (4) (5) (6) Cash available for dividend 210,000 220,000 Segment Contract operations revenue…
CONTACT US Investor Relations Megan Repine (VP of Investor Relations) (281) 836-8360 investor.relationsarchrock.com www.archrock.com/aroc Corporate Headquarters 9807 Katy Freeway Suite 100 Houston, TX 77024 ARCHROCK, INC.…
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