(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
Exhibit Number | Description | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
USA COMPRESSION PARTNERS, LP | |||
By: | USA Compression GP, LLC, | ||
its General Partner | |||
Date: | February 18, 2020 | By: | /s/ Christopher W. Porter |
Christopher W. Porter | |||
Vice President, General Counsel and Secretary |
Exhibit 99.1 | |
News Release | |
USA Compression Partners, LP | |
111 Congress Avenue, Suite 2400 | |
Austin, Texas 78701 | |
usacompression.com |
• | Total revenues were $178.2 million for the fourth quarter 2019, compared to $172.0 million for the fourth quarter 2018. |
• | Net income was $9.3 million for the fourth quarter 2019, compared to $10.2 million for the fourth quarter 2018. |
• | Net cash provided by operating activities was $91.7 million for the fourth quarter 2019, compared to $93.1 million for the fourth quarter 2018. |
• | Adjusted EBITDA was $109.2 million for the fourth quarter 2019, compared to $103.3 million for the fourth quarter 2018. |
• | Distributable Cash Flow was $58.0 million for the fourth quarter 2019, compared to $56.4 million for the fourth quarter 2018. |
• | Announced cash distribution of $0.525 per common unit for the fourth quarter 2019, consistent with the fourth quarter 2018. |
• | Distributable Cash Flow Coverage was 1.14x for the fourth quarter 2019, compared to 1.19x for the fourth quarter 2018. |
Three Months Ended | Year Ended | ||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | December 31, 2019 | ||||||||||||
Operational data: | |||||||||||||||
Fleet horsepower (at period end) | 3,682,968 | 3,678,804 | 3,597,097 | 3,682,968 | |||||||||||
Revenue generating horsepower (at period end) | 3,310,024 | 3,278,947 | 3,262,470 | 3,310,024 | |||||||||||
Average revenue generating horsepower | 3,308,392 | 3,258,125 | 3,274,201 | 3,279,374 | |||||||||||
Revenue generating compression units (at period end) | 4,559 | 4,546 | 4,629 | 4,559 | |||||||||||
Horsepower utilization (at period end) (1) | 93.7 | % | 93.7 | % | 94.0 | % | 93.7 | % | |||||||
Average horsepower utilization (for the period) (1) | 93.9 | % | 93.9 | % | 93.8 | % | 94.1 | % | |||||||
Financial data ($ in thousands, except per horsepower data): | |||||||||||||||
Revenue | $ | 178,188 | $ | 175,756 | $ | 171,977 | $ | 698,365 | |||||||
Average revenue per revenue generating horsepower per month (2) | $ | 16.82 | $ | 16.73 | $ | 16.42 | $ | 16.65 | |||||||
Net income | $ | 9,281 | $ | 13,315 | $ | 10,185 | $ | 39,132 | |||||||
Operating income | $ | 43,801 | $ | 46,164 | $ | 36,567 | $ | 168,384 | |||||||
Net cash provided by operating activities | $ | 91,700 | $ | 61,294 | $ | 93,140 | $ | 300,580 | |||||||
Gross operating margin (3) | $ | 121,578 | $ | 118,333 | $ | 116,430 | $ | 471,062 | |||||||
Gross operating margin percentage | 68.2 | % | 67.3 | % | 67.7 | % | 67.5 | % | |||||||
Adjusted EBITDA (3) | $ | 109,228 | $ | 104,327 | $ | 103,256 | $ | 419,640 | |||||||
Adjusted EBITDA percentage | 61.3 | % | 59.4 | % | 60.0 | % | 60.1 | % | |||||||
Distributable Cash Flow (3) | $ | 58,021 | $ | 54,933 | $ | 56,421 | $ | 221,868 |
(1) | Horsepower utilization is calculated as (i) the sum of (a) revenue generating horsepower; (b) horsepower in the Partnership’s fleet that is under contract but is not yet generating revenue; and (c) horsepower not yet in the Partnership’s fleet that is under contract, not yet generating revenue and that is subject to a purchase order, divided by (ii) total available horsepower less idle horsepower that is under repair. |
(2) | Calculated as the average of the result of dividing the contractual monthly rate for all units at the end of each month in the period by the sum of the revenue generating horsepower at the end of each month in the period. |
(3) | Gross operating margin, Adjusted EBITDA and Distributable Cash Flow are all non-U.S. generally accepted accounting principles (“Non-GAAP”) financial measures. For the definition of each measure, as well as reconciliations of each measure to its most directly comparable financial measures calculated and presented in accordance with GAAP, see “Non-GAAP Financial Measures” below. |
• | Net income range of $40.0 million to $60.0 million; |
• | A forward-looking estimate of net cash provided by operating activities is not provided because the items necessary to estimate net cash provided by operating activities, in particular the change in operating assets and liabilities, are not accessible or estimable at this time. The Partnership does not anticipate the changes in operating assets and liabilities to be material, but changes in accounts receivable, accounts payable, accrued liabilities and deferred revenue could be significant, such that the amount of net cash provided by operating activities would vary substantially from the amount of projected Adjusted EBITDA and Distributable Cash Flow; |
• | Adjusted EBITDA range of $415.0 million to $435.0 million; and |
• | Distributable Cash Flow range of $210.0 million to $230.0 million. |
By Phone: | Dial 800-367-2403 inside the U.S. and Canada at least 10 minutes before the call and ask for the USA Compression Partners Earnings Call. Investors outside the U.S. and Canada should dial 334-777-6978. The conference ID for both is 3058537. | |
A replay of the call will be available through February 28, 2020. Callers inside the U.S. and Canada may access the replay by dialing 888-203-1112. Investors outside the U.S. and Canada should dial 719-457-0820. The conference ID for both is 3058537. | ||
By Webcast: | Connect to the webcast via the “Events” page of USA Compression’s Investor Relations website at http://investors.usacompression.com. Please log in at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
• | the financial performance of the Partnership’s assets without regard to the impact of financing methods, capital structure or historical cost basis of the Partnership’s assets; |
• | the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; |
• | the ability of the Partnership’s assets to generate cash sufficient to make debt payments and pay distributions; and |
• | the Partnership’s operating performance as compared to those of other companies in its industry without regard to the impact of financing methods and capital structure. |
• | changes in general economic conditions and changes in economic conditions of the crude oil and natural gas industries specifically; |
• | competitive conditions in the industry; |
• | changes in the long-term supply of and demand for crude oil and natural gas; |
• | actions taken by the Partnership’s customers, competitors and third-party operators; |
• | the deterioration of the financial condition of the Partnership’s customers; |
• | changes in the availability and cost of capital; |
• | the Partnership’s ability to realize the anticipated benefits of acquisitions; |
• | operating hazards, natural disasters, weather-related delays, casualty losses, equipment defects and other matters beyond the Partnership’s control; |
• | the restrictions on the Partnership’s business that are imposed under the Partnership’s long-term debt agreements; |
• | information technology risks including the risk from cyberattack; |
• | the effects of existing and future laws and governmental regulations; |
• | the effects of future litigation; and |
• | other factors discussed in the Partnership’s filings with the Securities and Exchange Commission. |
Three Months Ended | Year Ended | ||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | December 31, 2019 | ||||||||||||
Revenues: | |||||||||||||||
Contract operations | $ | 171,052 | $ | 166,197 | $ | 163,164 | $ | 664,162 | |||||||
Parts and service | 2,692 | 4,460 | 4,566 | 14,236 | |||||||||||
Related party | 4,444 | 5,099 | 4,247 | 19,967 | |||||||||||
Total revenues | 178,188 | 175,756 | 171,977 | 698,365 | |||||||||||
Cost of operations, exclusive of depreciation and amortization | 56,610 | 57,423 | 55,547 | 227,303 | |||||||||||
Gross operating margin | 121,578 | 118,333 | 116,430 | 471,062 | |||||||||||
Other operating and administrative costs and expenses: | |||||||||||||||
Selling, general and administrative | 15,561 | 16,631 | 16,104 | 64,397 | |||||||||||
Depreciation and amortization | 58,227 | 57,513 | 56,749 | 231,447 | |||||||||||
Loss (gain) on disposition of assets | 1,329 | (1,975 | ) | 636 | 940 | ||||||||||
Impairment of compression equipment | 2,660 | — | 6,374 | 5,894 | |||||||||||
Total other operating and administrative costs and expenses | 77,777 | 72,169 | 79,863 | 302,678 | |||||||||||
Operating income | 43,801 | 46,164 | 36,567 | 168,384 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (32,984 | ) | (32,626 | ) | (27,252 | ) | (127,146 | ) | |||||||
Other | 27 | 21 | 20 | 80 | |||||||||||
Total other expense | (32,957 | ) | (32,605 | ) | (27,232 | ) | (127,066 | ) | |||||||
Net income before income tax expense (benefit) | 10,844 | 13,559 | 9,335 | 41,318 | |||||||||||
Income tax expense (benefit) | 1,563 | 244 | (850 | ) | 2,186 | ||||||||||
Net income | 9,281 | 13,315 | 10,185 | 39,132 | |||||||||||
Less: distributions on Preferred Units | (12,187 | ) | (12,188 | ) | (12,188 | ) | (48,750 | ) | |||||||
Net income (loss) attributable to common and Class B unitholders’ interests | $ | (2,906 | ) | $ | 1,127 | $ | (2,003 | ) | $ | (9,618 | ) | ||||
Net income (loss) attributable to: | |||||||||||||||
Common units | $ | (2,817 | ) | $ | 2,084 | $ | 1,267 | $ | (1,774 | ) | |||||
Class B Units | $ | (89 | ) | $ | (957 | ) | $ | (3,270 | ) | $ | (7,844 | ) | |||
Weighted average common units outstanding – basic | 96,658 | 94,625 | 89,993 | 92,911 | |||||||||||
Weighted average common units outstanding – diluted | 96,658 | 94,846 | 89,993 | 92,911 | |||||||||||
Weighted average Class B Units outstanding – basic and diluted | — | 2,017 | 6,398 | 3,681 | |||||||||||
Basic and diluted net income (loss) per common unit | $ | (0.03 | ) | $ | 0.02 | $ | 0.01 | $ | (0.02 | ) | |||||
Basic and diluted net loss per Class B Unit | $ | — | $ | (0.47 | ) | $ | (0.51 | ) | $ | (2.13 | ) | ||||
Distributions declared per common unit | $ | 0.525 | $ | 0.525 | $ | 0.525 | $ | 2.10 |
December 31, 2019 | |||
Selected Balance Sheet data: | |||
Total assets | $ | 3,730,407 | |
Long-term debt, net | $ | 1,852,360 | |
Total partners’ capital | $ | 1,180,598 | |
Common units outstanding | 96,631,976 |
Three Months Ended | Year Ended | ||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | December 31, 2019 | ||||||||||||
Net cash provided by operating activities | $ | 91,700 | $ | 61,294 | $ | 93,140 | $ | 300,580 | |||||||
Net cash used in investing activities | (36,263 | ) | (32,278 | ) | (63,814 | ) | (144,490 | ) | |||||||
Net cash used in financing activities | (55,429 | ) | (29,016 | ) | (32,057 | ) | (156,179 | ) |
Three Months Ended | Year Ended | ||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | December 31, 2019 | ||||||||||||
Net income | $ | 9,281 | $ | 13,315 | $ | 10,185 | $ | 39,132 | |||||||
Interest expense, net | 32,984 | 32,626 | 27,252 | 127,146 | |||||||||||
Depreciation and amortization | 58,227 | 57,513 | 56,749 | 231,447 | |||||||||||
Income tax expense (benefit) | 1,563 | 244 | (850 | ) | 2,186 | ||||||||||
EBITDA | $ | 102,055 | $ | 103,698 | $ | 93,336 | $ | 399,911 | |||||||
Interest income on capital lease | 142 | 159 | 211 | 672 | |||||||||||
Unit-based compensation expense (1) | 2,884 | 2,090 | 849 | 10,814 | |||||||||||
Transaction expenses (2) | 23 | 4 | 61 | 578 | |||||||||||
Severance charges | 135 | 351 | 1,789 | 831 | |||||||||||
Loss (gain) on disposition of assets | 1,329 | (1,975 | ) | 636 | 940 | ||||||||||
Impairment of compression equipment (3) | 2,660 | — | 6,374 | 5,894 | |||||||||||
Adjusted EBITDA | $ | 109,228 | $ | 104,327 | $ | 103,256 | $ | 419,640 | |||||||
Interest expense, net | (32,984 | ) | (32,626 | ) | (27,252 | ) | (127,146 | ) | |||||||
Non-cash interest expense | 1,987 | 1,965 | 1,525 | 7,607 | |||||||||||
Income tax (expense) benefit | (1,563 | ) | (244 | ) | 850 | (2,186 | ) | ||||||||
Interest income on capital lease | (142 | ) | (159 | ) | (211 | ) | (672 | ) | |||||||
Transaction expenses | (23 | ) | (4 | ) | (61 | ) | (578 | ) | |||||||
Severance charges | (135 | ) | (351 | ) | (1,789 | ) | (831 | ) | |||||||
Other | 1,774 | 152 | (800 | ) | 2,426 | ||||||||||
Changes in operating assets and liabilities | 13,558 | (11,766 | ) | 17,622 | 2,320 | ||||||||||
Net cash provided by operating activities | $ | 91,700 | $ | 61,294 | $ | 93,140 | $ | 300,580 |
(1) | For the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, unit-based compensation expense included $0.6 million, $0.6 million and $0.5 million, respectively, of cash payments related to quarterly payments of distribution equivalent rights on outstanding phantom unit awards and $0, $0.1 million and $0, respectively, related to the cash portion of any settlement of phantom unit awards upon vesting. For the year ended December 31, 2019, unit-based compensation expense included $2.5 million of cash payments related to quarterly payments of distribution equivalent rights on outstanding phantom unit awards and $0.6 million related to the cash portion of any settlement of phantom unit awards upon vesting. The remainder of the unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability. |
(2) | Represents certain expenses related to potential and completed transactions and other items. The Partnership believes it is useful to investors to exclude these fees. |
(3) | Represents non-cash charges incurred to write down long-lived assets with recorded values that are not expected to be recovered through future cash flows. |
Three Months Ended | Year Ended | ||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | December 31, 2019 | ||||||||||||
Net income | $ | 9,281 | $ | 13,315 | $ | 10,185 | $ | 39,132 | |||||||
Non-cash interest expense | 1,987 | 1,965 | 1,525 | 7,607 | |||||||||||
Depreciation and amortization | 58,227 | 57,513 | 56,749 | 231,447 | |||||||||||
Non-cash income tax expense (benefit) | 1,024 | 151 | (800 | ) | 1,376 | ||||||||||
Unit-based compensation expense (1) | 2,884 | 2,090 | 849 | 10,814 | |||||||||||
Transaction expenses (2) | 23 | 4 | 61 | 578 | |||||||||||
Severance charges | 135 | 351 | 1,789 | 831 | |||||||||||
Loss (gain) on disposition of assets | 1,329 | (1,975 | ) | 636 | 940 | ||||||||||
Impairment of compression equipment (3) | 2,660 | — | 6,374 | 5,894 | |||||||||||
Distributions on Preferred Units | (12,187 | ) | (12,188 | ) | (12,188 | ) | (48,750 | ) | |||||||
Proceeds from insurance recovery | 427 | 737 | 156 | 1,591 | |||||||||||
Maintenance capital expenditures (4) | (7,769 | ) | (7,030 | ) | (8,915 | ) | (29,592 | ) | |||||||
Distributable Cash Flow | $ | 58,021 | $ | 54,933 | $ | 56,421 | $ | 221,868 | |||||||
Maintenance capital expenditures | 7,769 | 7,030 | 8,915 | 29,592 | |||||||||||
Transaction expenses | (23 | ) | (4 | ) | (61 | ) | (578 | ) | |||||||
Severance charges | (135 | ) | (351 | ) | (1,789 | ) | (831 | ) | |||||||
Distributions on Preferred Units | 12,187 | 12,188 | 12,188 | 48,750 | |||||||||||
Other | 323 | (736 | ) | (156 | ) | (541 | ) | ||||||||
Changes in operating assets and liabilities | 13,558 | (11,766 | ) | 17,622 | 2,320 | ||||||||||
Net cash provided by operating activities | $ | 91,700 | $ | 61,294 | $ | 93,140 | $ | 300,580 | |||||||
Distributable Cash Flow | $ | 58,021 | $ | 54,933 | $ | 56,421 | $ | 221,868 | |||||||
Distributions for Distributable Cash Flow Coverage Ratio (5) | $ | 50,732 | $ | 50,723 | $ | 47,241 | $ | 196,144 | |||||||
Distributable Cash Flow Coverage Ratio | 1.14x | 1.08x | 1.19x | 1.13x |
(1) | For the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, unit-based compensation expense included $0.6 million, $0.6 million and $0.5 million, respectively, of cash payments related to quarterly payments of distribution equivalent rights on outstanding phantom unit awards and $0, $0.1 million and $0, respectively, related to the cash portion of any settlement of phantom unit awards upon vesting. For the year ended December 31, 2019, unit-based compensation expense included $2.5 million of cash payments related to quarterly payments of distribution equivalent rights on outstanding phantom unit awards and $0.6 million related to the cash portion of any settlement of phantom unit awards upon vesting. The remainder of the unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability. |
(2) | Represents certain expenses related to potential and completed transactions and other items. The Partnership believes it is useful to investors to exclude these fees. |
(3) | Represents non-cash charges incurred to write down long-lived assets with recorded values that are not expected to be recovered through future cash flows. |
(4) | Reflects actual maintenance capital expenditures for the periods presented. Maintenance capital expenditures are capital expenditures made to maintain the operating capacity of the Partnership’s assets and extend their useful lives, replace partially or fully depreciated assets, or other capital expenditures that are incurred in maintaining the Partnership’s existing business and related cash flow. |
(5) | Represents distributions to the holders of the Partnership’s common units as of the record date. |
Guidance | |
Net income | $40.0 million to $60.0 million |
Plus: Interest expense, net | 131.5 million |
Plus: Depreciation and amortization | 231.0 million |
Plus: Income tax expense | 0.5 million |
EBITDA | $403.0 million to $423.0 million |
Plus: Interest income on capital lease | 0.5 million |
Plus: Unit-based compensation expense | 11.5 million |
Adjusted EBITDA | $415.0 million to $435.0 million |
Less: Cash interest expense | 123.5 million |
Less: Current income tax expense | 0.5 million |
Less: Maintenance capital expenditures | 32.0 million |
Less: Distributions on Preferred Units | 49.0 million |
Distributable Cash Flow | $210.0 million to $230.0 million |