Usa Compression Partners, Lp · NYSE:USAC
Usa Compression Partners, Lp — J.P. Morgan Global High Yield & Leveraged Finance Conference 2023
24 slides from Usa Compression Partners, Lp's conference presentation, Mar 7, 2023
Slide 1: USA Compression Partners, LP
USA Compression Partners, LP J.P. Morgan Global High Yield & Leveraged Finance Conference March 7-8, 2023
Slide 2: Forward-Looking Statements and Ownership Structure
Forward-Looking Statements and Ownership Structure This presentation contains forward-looking statements related to the operations of USA Compression Partners, LP (the “Partnership”) that are based on management’s current expectations, estimates, and projections about its operations. You can identif
Slide 3: USAC Overview
USAC Overview Large-Horsepower Strategy Vital to Natural Gas Infrastructure, Production, and Delivery to Market Centers; Focused on Long-Term, Fixed-Fee, Take-or-Pay Contracts Business / Strategy Overview USAC Market Statistics ● Compression services provided across • IPO: 1/2013 (NYSE: USAC) geogra
Slide 4: Fourth-Quarter Highlights
Fourth-Quarter Highlights Operational and Financial Accomplishments ✓ 40 consecutive quarters of distributions (USAC has never cut its distribution) Horsepower Record Utilization Revenues ✓ Returned ~$1.5 billion in cash to unitholders since IPO 91.8% $190.1 MM ✓ Improving distribution coverage ✓ Q-
Slide 5: Stable Cash Flows Backed by Capital Discipline
Stable Cash Flows Backed by Capital Discipline Large-Horsepower Focus Mission-critical infrastructure-oriented assets that feature long-term, fixed-fee contracts with creditworthy counterparties and accretive returns Operations Operational Excellence Increasing utilization with consistent and attrac
Slide 6: History of Managing Leverage Through Cycles
History of Managing Leverage Through Cycles USAC’s Asset Base Supports Leverage Stability • Ability to moderate capital spending has allowed us to maintain relatively stable leverage • Starting in 2022, leverage has come down each consecutive quarter and we see 2022 as a starting point for further l
Slide 7: Large HP = Stable Cash Flows and Controllable Capital Spending
Large HP = Stable Cash Flows and Controllable Capital Spending • Large-HP focus provides highest returns on invested capital and durable cash flows throughout the production cycle • Large-HP focus drives opportunistic and accretive organic expansion during periods of production growth with the flexi
Slide 8: Stable Cash Flows Throughout Commodity Cycles
Stable Cash Flows Throughout Commodity Cycles Adjusted EBITDA ($MM) Pre-CDM Acquisition Non-Predecessor1 Post-CDM Acquisition2 Horsepower Nominal pandemic- HH Nat Gas Utilization induced utilization $/MMBTU 100.0% decline and swift $10 recovery thereafter 90.0% $9 Horsepower Stability through 80.0%
Slide 9: USAC Capitalization
USAC Capitalization Capitalization as of December 31, 2022 Maturity Profile $1.6B Revolving Credit Facility due 2026; drawn as of 12/31/22 3 ($MM) % of cap 6.875% Senior Unsecured Notes due 2026 6.875% Senior Unsecured Notes due 2027 Cash and cash equivalents $- 9.75% Series A Preferred Equity (conv
Slide 10: Compression is Vital to Natural Gas Infrastructure
Compression is Vital to Natural Gas Infrastructure USAC Focus on Midstream Applications: Provides Operational / Cash Flow Stability with Strong Counterparties Wellhead (Gas & Oil) Midstream Downstream Uses: Gas Lift Regional Gathering Interstate Pipelines Gas Reinjection Central Delivery Point Trunk
Slide 11: Large-Horsepower Gas Applications Drive Revenue Stability
Large-Horsepower Gas Applications Drive Revenue Stability Compression Unit Size Matters USAC Focus: Gas Compression Industry: Key Characteristics by Size1 Small - Large X Large XX Large XXX Large Commentary Medium Compression More 400 – 1,000 – 1,500 – 2,300 – Unit 0 – 400 HP horsepower HP Range 1,0
Slide 12: Dual-Drive Natural Gas Compression
Dual-Drive Natural Gas Compression Natural Gas Compression Powered by Natural Gas or Electricity in a Single Unit Dual-Drive Compression Delivers: ✓ Lower invested capital with attractive returns ✓ Lower operating expenses ✓ 99% runtime ✓ Lower CO2 and methane emissions USAC currently only provider
Slide 13: Appendix
Appendix k—— COMPRESSION
Slide 14: Transition to Electrification Will Not Be Easy
Transition to Electrification Will Not Be Easy The EV Example: Supply Chain and Electric-Grid Infrastructure are not Ready for Transition EV Supply Chain1 Electric Grid Infrastructure2 Batteries • Underdeveloped and complex supply chain • Inadequate supply of affordable raw materials • Mining and re
Slide 15: U.S. LNG is a Decarbonization Solution
U.S. LNG is a Decarbonization Solution The U.S. has a Unique Opportunity to Lead the Way in Decarbonization through Natural Gas Natural Gas Switching is a Proven Model1 U.S. Natural Gas can Decarbonize Internationally ✓ Coal-to-natural gas switching results in a ~57% reduction in CO2 emissions Coa
Slide 16: History of Stable Distributions and Strong Returns to Unitholders
History of Stable Distributions and Strong Returns to Unitholders History of stable distributions paid through commodity price cycles Pre-CDM Acquisition Non-Predecessor1 Post-CDM Acquisition1 $2.20 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.08 $1.98 $2.00 $1.80 $1.60 $1.40 $1.20 $1.00 2014 2015 2
Slide 17: Critical Assets with Supportive Fundamentals
Critical Assets with Supportive Fundamentals Natural Gas is a Long-Term Fuel; Compression Remains Critical ● Robust global demand for natural gas Supportive ● LNG exports, petchem feedstock and power gen driving continued natural gas Macro: Gas Isn’t Going Anywhere usage ● Natural gas demand/product
Slide 18: USAC Customer Overview
USAC Customer Overview Top 20 Customers: Diverse Counterparties and Long-Term Relationships % of Length of % of Length of Customer Rev1 relationship Total HP Customer Rev1 relationship Total HP Independent Public E&P 8% > 20 Years 266K Independent Public E&P 2% > 15 Years 79K Major O&G 7% > 10 Years
Slide 19: Operational and Financial Performance
Operational and Financial Performance Average Revenue-generating HP (000s) Revenue ($MM) Pre-CDM Acquisition Non-Predecessor1 Post-CDM Acquisition1,2 Pre-CDM Acquisition Non-Predecessor1 Post-CDM Acquisition1,2 4,000 $800 $698 $705 3,279 $668 3,140 3,067 $633 2,951 $584 3,000 2,760 $600 2,000 $400 1
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2022 $ in thousands Full Year Q4 Q3 Q2 Q1 Total revenues $ 704,598 $ 190,112 $ 179,613 $ 171,461 $ 163,412 Cost of operations, exclusive of depreciation and amortization (234,336) (65,993) (59,453) (55,158) (53,732) Depreciation and amortization (236,677) (59,882) (58,772) (
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Post-CDM Acquisition Pre-CDM Acquisition Non-Predecessor Years Ended December 31, $ in thousands 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Net income (loss) $ 30,318 $ 10,279 $ (594,732) $ 39,132 $ (10,551) $ 11,440 $ 12,935 $ (154,273) $ 24,946 $ 11,071 Interest exp
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2022 $ in thousands Full Year Q4 Q3 Q2 Q1 Net income $ 30,318 $ 8,366 $ 9,612 $ 9,086 $ 3,254 Non-cash interest expense 7,265 1,814 1,814 1,815 1,822 Depreciation and amortization 236,677 59,882 58,772 58,959 59,064 Non-cash income tax expense (benefit) (151) 65 (33) 21 (204
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2023 Guidance Δ to 2023 Guidance 2023 Guidance 2022 Actual Midpoint Δ% Net income $75.0 to $95.0 million Plus: Interest expense, net 162.0 million Plus: Depreciation and amortization 237.0 million Plus: Income tax expense 1.0 million EBITDA $475.0 million to $495.0 million P
Slide 24: Basis of Presentation; Explanation of Non-GAAP Financial Measures
Basis of Presentation; Explanation of Non-GAAP Financial Measures This presentation includes the non-GAAP financial measures of Adjusted gross margin, Adjusted EBITDA, Distributable Cash Flow, and Distributable Cash Flow Coverage Ratio. Adjusted gross margin, a non-GAAP measure, is defined as revenu
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