Usa Compression Partners, Lp · NYSE:USAC
Usa Compression Partners, Lp — Energy Infrastructure Council CEO & Investor Conference 2023
25 slides from Usa Compression Partners, Lp's conference presentation, May 23, 2023
Slide 1: USA Compression Partners, LP
USA Compression Partners, LP Energy Infrastructure Council CEO & Investor Conference May 23-24, 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: First-Quarter Highlights
First-Quarter Highlights Operational and Financial Accomplishments ✓ 41 consecutive quarters of distributions (USAC has never cut its distribution) Horsepower Record Utilization Revenues ✓ Returned ~$1.6 billion in cash to unitholders since IPO 92.7% $197.1 MM ✓ Improving distribution coverage ✓ Q-o
Slide 5: Stable Cash Flows Backed by Capital Discipline
Stable Cash Flows Backed by Capital Discipline Large-Horsepower Focus Mission-critical infrastructure-oriented assets that feature long-term, fixed-fee contracts that generate attractive returns Operations Operational Excellence Increasing utilization with consistent and attractive operating margins
Slide 6: History of Managing Leverage Through Cycles
History of Managing Leverage Through Cycles USAC’s Asset Base Supports Leverage Stability • Ability to moderate capital spending enables stable leverage • Consecutive-quarter leverage reductions throughout 2022 and into 2023 USAC Historical Leverage 1 Cumulative Pre-CDM Acquisition Non-Predecessor2
Slide 7: Large HP = Stable Cash Flows and Controllable Capital Spending
Large HP = Stable Cash Flows and Controllable Capital Spending • Large-HP focus provides highest returns on invested capital and the most durable cash flows throughout the production cycle • Large-HP focus drives opportunistic and accretive organic expansion during periods of production growth with
Slide 8: Stable Cash Flows Throughout Commodity Cycles
Stable Cash Flows Throughout Commodity Cycles Adjusted EBITDA ($MM) Pre-CDM Acquisition Non-Predecessor1 Post-CDM Acquisition2 Horsepower Nominal pandemic- HH Nat Gas Utilization Growth during up induced utilization $/MMBTU cycles 100.0% decline and swift $10 recovery thereafter 90.0% $9 Horsepower
Slide 9: USAC Capitalization
USAC Capitalization Capitalization as of March 31, 2023 Maturity Profile $1.6B Revolving Credit Facility due 2026; drawn as of 3/31/23 3 ($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 (converti
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% average runtime ✓ Lower CO2 and methane emissions USAC currently only p
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 $2.09 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.01 $2.00 $1.80 $1.60 $1.40 $1.20 $1.00 2014
Slide 17: Critical Assets with Supportive Fundamentals
Critical Assets with Supportive Fundamentals Natural Gas is a Long-Term Fuel; Compression Remains Critical ● Robust global demand for natural gas Supportive ● LNG exports, industrial feedstock, and power gen driving continued natural gas Macro: Gas Isn’t Going Anywhere usage ● Natural gas demand/pro
Slide 18: USAC Customer Overview
USAC Customer Overview Top 20 Customers: Diverse Counterparties and Long-Term Relationships % of Length of % of Length of Customer Rev1 relationship Total HP2 Customer Rev1 relationship Total HP2 Major O&G 9% > 10 Years 225K Independent Public E&P 2% > 20 Years 72K Independent Public E&P 7% > 20 Yea
Slide 19: Operational and Financial Performance
Operational and Financial Performance Average Revenue-generating HP (000s) Revenue ($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 3,241 $668 3,140 3,067 $633 2,951 $584 3,000 2,760 $600 2,000
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted gross margin ($ in thousands) Q1 2023 Q4 2022 Δ% Total revenues $ 197,124 $ 190,112 3.7% Cost of operations, exclusive of depreciation and amortization (66,665) (65,993) Depreciation and amortization (59,486) (59,882) Gross margin $ 70,973 $ 64,237 10.5% Depreciatio
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 Distributable Cash Flow ($ in thousands) Q1 2023 Q4 2022 Δ% Net income $ 10,941 $ 8,366 30.8% Non-cash interest expense 1,822 1,814 Depreciation and amortization 59,486 59,882 Non-cash income tax expense (benefit) (15) 65 Unit-based compensation expense 6,779 6,178 Severance
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: Investor Relations Contact Information
Investor Relations Contact Information • Mike Pearl, CFO • (832) 823-7306 • Julie McEwen, Controller • (512) 369-1389 • IR@usacompression.com 23 © 2023 USA COMPRESSION PARTNERS, LP | CONFIDENTIAL
Slide 25: 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
USA Compression Partners — Energy Infrastructure Council CEO & Investor Conference 2023 on 6ix