ARCHROCK, INC. INVESTOR PRESENTATION SEPTEMBER 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: 1.0 billion(2)…
An Attractive Energy Infrastructure Investment Archrock Investment Highlights Gathering focus; a leading provider of large HP, 76% of fleet(1) Midstream / Compression is a must-run service for gas transportation Large HP Focus…
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…
Inflection Point in Free Cash Generation in 2020 De-emphasizing growth at this point of the cycle Completion of 3-year growth strategy drives free cash flow generation beginning in 2020 Reduced capital spending in 2020 as existing…
Reliable and Competitive Dividend Prioritizing shareholder returns through the downturn Cash Available for Dividend Coverage(1) Relative resilience and stability of cash flows 3.0x 2.8x 2.8x 2.6x support continued return of excess…
Top-Tier Metrics Vs. Peers & Yield-Oriented Sectors A unique combination of attractive attributes and valuation Dividend Yield(1) Leverage Ratio(2) EV/EBITDA(1) (3) 18.6% 6.4x 12.2x 14.7% 5.1x 5.2x 9.7x 4.9x 5.0x 8.4x 8.6x…
OPERATIONS ARCHROCK, INC. (NYSE:AROC)
A Market Leader in Large Horsepower Leveraging the growing industry trend towards larger HP units 24% Small HP 76% Large HP Fleet Allocation(1) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Drivers of Large HP Demand Drilling…
Contract Operations Customer Base Strong relationships with top-tier energy companies Revenue 37% Major Customers % of revenue from top 10 Diversification customers(1) Long-term 15 years Relationships Avg. relationship…
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 63-65% Accretive…
Aftermarket Services Capabilities Opportunities to service customer-owned compressors Ability to serve the entire U.S. compression market Margin contribution from customers with their own compression solutions Minimal capital…
ESG ARCHROCK, INC. (NYSE:AROC)
Natural Gas Critical Role in a Greener Economy Natural gas is abundant, reliable and cleaner-burning U.S. Cumulative CO2 Emissions Reductions from Coal to Gas Switching(1) 75% 3000 U.S. CO2 emissions reductions from coal to…
Advancing Sustainability Performance and Disclosure Committed to transparency and a sustainable future Issued first annual Corporate Responsibility Report Continued Industry-Leading Safety Performance Improved Compression Engine…
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% 39% 43% Oil Gas /bbl /MMBtu 120 6 Track record of generating 100 5…
Executing on Balance Sheet Goals Reducing leverage to strengthen balance sheet A B Debt repayment in 2020 will partially offset Achieved leverage reduction via Adjusted EBITDA declines consistent growth in Adjusted EBITDA…
Key Takeaways We are the leader in U.S. natural gas compression Structural, Midstream / Resilience Long-Term Solid Financial Proactive Large HP Focus Through Cycles Demand Drivers Position Leadership 22 ARCHROCK, INC.…
APPENDIX ARCHROCK, INC. (NYSE:AROC)
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…
Proactive Cost Saving Initiatives Swift action to adjust to market downturn and enhance cash flow 75-85MM in Annualized Cash Savings Reduced 2020 capex budget over 60% vs. 2019 Other, 6% No new equipment capex in 2H20 SG&A, 13%…
Diversified Platform Across Key Shale Basins Stability and growth opportunity across U.S. production basins Marcellus / Utica Material presence and scale Niobrara in all major U.S. shale production basins Largest U.S. provider…
U.S. Natural Gas Supply Manageable declines expected following years of record production U.S. gas The U.S. experienced over 25% growth in U.S. Bcf/d 53 51 55 66 73 92 84 natural gas production from 2016-2019 2000 2004 2008 2012 2016…
Natural Gas Demand Relatively Resilient Revised near-term natural gas demand outlook remains above 3-year average US Energy Consumption Natural gas demand expected to remain above 2020 vs. 2019 2017-2019 average 0% Electric…
Recent Financial Highlights Impressive performance in 2Q 2020 In 000s, except dividend coverage and 2Q 2019 1Q 2020 2Q 2020 horsepower utilization Revenue 238,390 249,697 220,316 Net income (loss) 11,423 (61,187) (30,381)…
Financial & Operational Momentum Improving profitability trend and fleet utilization benefiting the company Revenue (MM) Gross Margin(1)% Contract Operations Aftermarket Services 245 246 250 Contract Operations AMS Total 232 233 236…
Solid Balance Sheet Position Manageable leverage and no near-term debt maturities Balance Sheet & Funding Overview Debt Maturity Schedule(1) (MM) No near-term debt maturities A Revolving credit facility due November 2024 A…
Revised Financial Guidance Updated forecast reflects business resiliency and additional capital discipline Revised 2019 (MM) 2020 Guidance(1) (MM) Net Income (Loss): 97 (77) (37) Adjusted EBITDA: (2) 417 380 420 Selling,…
Long-Term Secular 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…
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…
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…
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 Q1-20 Q2-20 Net income (loss) (14,013) (4,036) (12,683) 49,142 2,069…
Q2-20 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 Q1-20 Q2-20 Net income (loss) (14,013) (4,036) (12,683)…
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 Q1-20 Q2-20 Net income 2,069 4,149 9,974 12,968 29,160…
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 Q1-20 Q2-20 Cash flows from operating…
Archrock Addendum I-G Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Dividend Full Year 2020 Guidance (1) Low High Net loss (2) (77,000) (37,000) Depreciation and amortization 190,000 190,000 Interest…
2020 Guidance Full Year 2020 Guidance (1) in thousands Low High Net loss (2) (77,000) (37,000) Adjusted EBITDA (3) (4) 380,000 420,000 Cash available for dividend (4) (5) 221,000 251,000 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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