ARCHROCK, INC. BARCLAYS MIDSTREAM AND INFRASTRUCTURE CORPORATE ACCESS DAY MARCH 3, 2020 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: 1.1 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…
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…
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…
Compelling Dividend Profile Stable and growing dividend with competitive yield versus S&P 500 constituents Dividend Yield: AROC vs. S&P 500 Constituents AROC Dividend Details 102 Dividend: 0.145/quarter 101 101 Yield: 8%(1) YoY…
Top-Tier Metrics Vs. Compression Peers A unique combination of attractive attributes and valuation Peer A Peer B AROC AROC 2020 Targets 2018-2020 Adjusted EBTIDA(1) 11% CAGR 10% 2018-2020 Adjusted EBITDA CAGR at guidance midpoint…
Recent Acquisition & Divestitures Transactions Further Standardize Archrocks Fleet Archrock acquired Elite Compression Services on August 1, 2019 Approximately 430,000 of primarily large compression horsepower(1) 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…
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…
Enhancing The Earnings Power of Our Fleet Consistent fleet high-grading and operational efficiency gains Fleet 19% Contract Operations Gross Margin(1) Standardization Reduction in unit configurations since 2017 61.5-63% 61%…
Contract Operations Customer Base Strong relationships with top-tier energy companies Revenue 36% Major Customers Diversification % of total revenue from 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 53 51 55 66 92 101 Shale gas 2 3 8 28 61 71 The U.S. has experienced 51 48 47 38 31 30 significant growth in…
Compression Benefiting from Stable Natural Gas Prices Historically low and stable U.S. natural gas prices providing reliable and affordable feedstock 14 Natural gas prices averaged 2-5/mmbtu for the Trailing 75D Avg. 12 past decade,…
Key Natural Gas Demand Drivers Robust demand drivers led by natural gas export opportunities Bcf/d U.S. Natural Gas Demand Growth(1) 105 4 -2 LNG Exports 101 100 4 95 5 90 90 85 80 Residential & 2019 LNG Exports Net Pipeline…
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 target…
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% 43% Oil Gas /bbl /MMBtu 120 6 Track record of generating 100 5…
Financial & Operational Momentum Improving profitability trend and fleet utilization benefiting the company Revenue (MM) Gross Margin(1)% Contract Operations Aftermarket Services 238 245 246 Contract Operations AMS Total 232 233…
Recent Financial Highlights Strong financial and operational performance in 4Q 2019 In 000s, except dividend coverage and 4Q 2018 3Q 2019 4Q 2019 horsepower utilization Revenue 233,159 244,949 245,987 Net income 12,968 20,407…
Solid Balance Sheet Position Achieving balance sheet targets while pushing out debt maturities Balance Sheet & Funding Overview Debt Maturity Schedule(1) (MM) No near-term debt maturities A Revolving credit facility due November…
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 Strong visibility into attractive 2020 forecast 2019 2020 Guidance(1) 2020 Targets Net Income: 97 67 102 10-15% Adjusted EBITDA: (2) 415 450 Annual dividend growth 417 through 2020 Selling, general &…
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 34 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 Q4-19 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149 9,974…
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 Q4-19 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069 4,149…
Archrock Addendum I-E Reconciliation of Net Income (Loss) to Adjusted EBITDA ( in thousands) 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net income (loss) (355,308) (37,696) 126,606 88,661 (125,697) (65,243) 18,410 29,160 97,330…
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 Q4-19 2019 Net income 2,069 4,149 9,974 12,968 29,160 19,456…
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 Q4-19 2019 Cash flows from operating activities 62,455…
Archrock Addendum I-G Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend Full-Year 2020 Guidance (1) Low High Net income (2) 67,000 102,000 Depreciation and amortization 198,000 198,000 Interest…
2020 Guidance Full-Year 2020 Guidance (1) in thousands Low High Net income (2) 67,000 102,000 Adjusted EBITDA (3) (4) 415,000 450,000 Cash available for dividend (4) (5) 223,000 248,000 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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