USA Compression Partners, LP (NYSE: USAC) (“USA Compression” or
the “Partnership”) announced today its financial and operating
results for the third quarter 2021.
Third Quarter 2021 Highlights
- Total revenues were $158.6 million for the third quarter 2021,
compared to $161.7 million for the third quarter 2020.
- Net income was $4.1 million for the third quarter 2021,
compared to $6.5 million for the third quarter 2020.
- Net cash provided by operating activities was $45.3 million for
the third quarter 2021, compared to $48.2 million for the third
quarter 2020.
- Adjusted EBITDA was $99.6 million for the third quarter 2021,
compared to $103.9 million for the third quarter 2020.
- Distributable Cash Flow was $52.0 million for the third quarter
2021, compared to $56.9 million for the third quarter 2020.
- Announced cash distribution of $0.525 per common unit for the
third quarter 2021, consistent with the third quarter 2020.
- Distributable Cash Flow Coverage was 1.02x for the third
quarter 2021, compared to 1.12x for the third quarter 2020.
“USA Compression continued the positive momentum of stable
financial and operational results in the third quarter. We’ve seen
our customers’ activity levels continue to improve, supported in
part by strong commodity prices, which resulted in an increase in
horsepower utilization at the end of the third quarter,” commented
Eric D. Long, USA Compression’s President and Chief Executive
Officer. “We also saw pricing improvements during the quarter, as
we were able to selectively push through rate increases, as well as
take advantage of market scarcity of the extra-large horsepower for
which USA Compression is known. The strong industry fundamentals
underpinning our compression services business model continue to
improve: strong commodity prices, tight supply/demand balances and
the return of growth capital spending, all of which are expected to
benefit USA Compression as we finish the year and enter 2022.”
“The most recent quarter has highlighted the importance of
natural gas, not just here in the United States, but across the
globe. As the worldwide economic activity continues to grow, we are
seeing that the demand for all sources of energy – including
natural gas – remains strong, even in the face of growing use of
renewable energy. Demand for energy worldwide continues to outpace
supplies, as evidenced by the recent energy crises in California,
Europe, and China. Worldwide oil and gas supply remains constrained
due to recent historically low levels of capital investment. Recent
press reports point out that global upstream capital expenditures
averaged between $320 billion and $350 billion in 2020 and 2021.
This is reported to be half the level of 2011–2014 and 25% short of
what is needed to hold oil production steady at 100 million barrels
per day, the level global demand has now surpassed as mobility
restrictions ease.”
“Natural gas serves as a reliable, abundant, cost-efficient fuel
for power generation and industrial manufacturing. As we head into
the winter heating season, with tight supply/demand and storage
balances, domestic and worldwide natural gas prices are at high
levels and expected to continue well into 2022. We believe the
importance of natural gas cannot be understated, and USA
Compression’s compression services are crucial to moving that
natural gas to where it needs to go.”
“We continue to aggressively manage our key supply chain
relationships, working to mitigate to a large degree any material
impact on our operating margins. Further, we prudently limited
overall capital spending in the business during the quarter. By
doing so, we achieved coverage and leverage metrics consistent with
the previous quarter. We will continue to focus our efforts on
redeploying existing idle assets during 2022 and expect the
constructive backdrop for natural gas infrastructure will
positively impact our business as we move forward towards 2022 and
beyond.”
Expansion capital expenditures were $13.5 million, maintenance
capital expenditures were $5.3 million and cash interest expense,
net was $29.9 million for the third quarter 2021.
On October 14, 2021, the Partnership announced a third quarter
cash distribution of $0.525 per common unit, which corresponds to
an annualized distribution rate of $2.10 per common unit. The
distribution will be paid on November 5, 2021 to common unitholders
of record as of the close of business on October 25, 2021.
Operational and Financial
Data
Three Months Ended
September 30,
2021
June 30, 2021
September 30,
2020
Operational data:
Fleet horsepower (at period end)
3,687,601
3,686,584
3,725,053
Revenue generating horsepower (at period
end)
2,919,362
2,912,628
3,009,773
Average revenue generating horsepower
2,914,100
2,944,909
3,042,786
Revenue generating compression units (at
period end)
3,928
3,934
3,984
Horsepower utilization (at period end)
(1)
83.0
%
81.9
%
83.2
%
Average horsepower utilization (for the
period) (1)
82.3
%
82.4
%
83.9
%
Financial data ($ in thousands, except
per horsepower data):
Revenue
$
158,627
$
156,562
$
161,666
Average revenue per revenue generating
horsepower per month (2)
$
16.62
$
16.55
$
16.62
Net income
$
4,115
$
2,688
$
6,519
Operating income
$
36,631
$
35,145
$
38,771
Net cash provided by operating
activities
$
45,297
$
99,459
$
48,219
Gross margin
$
50,203
$
51,731
$
54,879
Adjusted gross margin (3)
$
109,468
$
110,958
$
114,951
Adjusted gross margin percentage
69.0
%
70.9
%
71.1
%
Adjusted EBITDA (3)
$
99,634
$
99,988
$
103,940
Adjusted EBITDA percentage
62.8
%
63.9
%
64.3
%
Distributable Cash Flow (3)
$
51,973
$
52,536
$
56,911
____________________________________
(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 but 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.
Horsepower utilization based on revenue
generating horsepower and fleet horsepower was 79.2%, 79.0% and
80.8% at September 30, 2021, June 30, 2021 and September 30, 2020,
respectively.
Average horsepower utilization based on
revenue generating horsepower and fleet horsepower was 79.0%, 79.6%
and 81.7% for the three months ended September 30, 2021, June 30,
2021 and September 30, 2020, respectively.
(2)
Calculated as the average of the result of
dividing the contractual monthly rate, excluding standby or other
temporary rates, 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)
Adjusted gross 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.
Liquidity and Long-Term
Debt
As of September 30, 2021, the Partnership was in compliance with
all covenants under its $1.6 billion revolving credit facility. As
of September 30, 2021, the Partnership had outstanding borrowings
under the revolving credit facility of $505.7 million, $1.1 billion
of borrowing base availability and, subject to compliance with the
applicable financial covenants, available borrowing capacity of
$114.3 million. As of September 30, 2021, the outstanding aggregate
principal amount of the Partnership’s 6.875% senior notes due 2026
and 6.875% senior notes due 2027 was $725.0 million and $750.0
million, respectively.
Full-Year 2021 Outlook
USA Compression is updating its full-year 2021 guidance as
follows:
- Net income range of $5.0 million to $15.0 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 $390.0 million to $400.0 million;
and
- Distributable Cash Flow range of $200.0 million to $210.0
million.
Conference Call
The Partnership will host a conference call today beginning at
11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss third
quarter 2021 performance. The call will be broadcast live over the
Internet. Investors may participate either by phone or audio
webcast.
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
6819739.
A replay of the call will be available
through November 12, 2021. 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 6819739.
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.
About USA Compression Partners,
LP
USA Compression Partners, LP is a growth-oriented Delaware
limited partnership that is one of the nation’s largest independent
providers of natural gas compression services in terms of total
compression fleet horsepower. USA Compression partners with a broad
customer base composed of producers, processors, gatherers and
transporters of natural gas and crude oil. USA Compression focuses
on providing natural gas compression services to infrastructure
applications primarily in high-volume gathering systems, processing
facilities and transportation applications. More information is
available at usacompression.com.
Non-GAAP Financial
Measures
This news release includes the Non-GAAP financial measures of
Adjusted gross margin, Adjusted EBITDA, Distributable Cash Flow and
Distributable Cash Flow Coverage Ratio.
Adjusted gross margin is defined as revenue less cost of
operations, exclusive of depreciation and amortization expense.
Management believes that Adjusted gross margin is useful as a
supplemental measure to investors of the Partnership’s operating
profitability. Adjusted gross margin is impacted primarily by the
pricing trends for service operations and cost of operations,
including labor rates for service technicians, volume and per unit
costs for lubricant oils, quantity and pricing of routine
preventative maintenance on compression units and property tax
rates on compression units. Adjusted gross margin should not be
considered an alternative to, or more meaningful than, gross
margin, its most directly comparable GAAP financial measure, or any
other measure of financial performance presented in accordance with
GAAP. Moreover, Adjusted gross margin as presented may not be
comparable to similarly titled measures of other companies. Because
the Partnership capitalizes assets, depreciation and amortization
of equipment is a necessary element of its costs. To compensate for
the limitations of Adjusted gross margin as a measure of the
Partnership’s performance, management believes that it is important
to consider gross margin determined under GAAP, as well as Adjusted
gross margin, to evaluate the Partnership’s operating
profitability.
Management views Adjusted EBITDA as one of its primary tools for
evaluating the Partnership’s results of operations, and the
Partnership tracks this item on a monthly basis both as an absolute
amount and as a percentage of revenue compared to the prior month,
year-to-date, prior year and budget. The Partnership defines EBITDA
as net income (loss) before net interest expense, depreciation and
amortization expense, and income tax expense. The Partnership
defines Adjusted EBITDA as EBITDA plus impairment of compression
equipment, impairment of goodwill, interest income on capital
lease, unit-based compensation expense (benefit), severance
charges, certain transaction expenses, loss (gain) on disposition
of assets and other. Adjusted EBITDA is used as a supplemental
financial measure by management and external users of its financial
statements, such as investors and commercial banks, to assess:
- 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.
Management believes that Adjusted EBITDA provides useful
information to investors because, when viewed with GAAP results and
the accompanying reconciliations, it provides a more complete
understanding of the Partnership’s performance than GAAP results
alone. Management also believes that external users of its
financial statements benefit from having access to the same
financial measures that management uses in evaluating the results
of the Partnership’s business.
Adjusted EBITDA should not be considered an alternative to, or
more meaningful than, net income (loss), operating income (loss),
cash flows from operating activities or any other measure of
financial performance or liquidity presented in accordance with
GAAP as measures of operating performance and liquidity. Moreover,
Adjusted EBITDA as presented may not be comparable to similarly
titled measures of other companies.
Distributable Cash Flow is defined as net income (loss) plus
non-cash interest expense, non-cash income tax expense (benefit),
depreciation and amortization expense, unit-based compensation
expense (benefit), impairment of compression equipment, impairment
of goodwill, certain transaction expenses, severance charges, loss
(gain) on disposition of assets, proceeds from insurance recovery
and other, less distributions on the Partnership’s Series A
Preferred Units (“Preferred Units”) and maintenance capital
expenditures.
Distributable Cash Flow should not be considered as an
alternative to, or more meaningful than, net income (loss),
operating income (loss), cash flows from operating activities or
any other measure of financial performance presented in accordance
with GAAP as measures of operating performance and liquidity.
Moreover, the Partnership’s Distributable Cash Flow as presented
may not be comparable to similarly titled measures of other
companies.
Management believes Distributable Cash Flow is an important
measure of operating performance because it allows management,
investors and others to compare basic cash flows the Partnership
generates (after distributions on the Partnership’s Preferred Units
but prior to any retained cash reserves established by the
Partnership’s general partner and the effect of the Distribution
Reinvestment Plan) to the cash distributions the Partnership
expects to pay its common unitholders.
Distributable Cash Flow Coverage Ratio is defined as
Distributable Cash Flow divided by distributions declared to common
unitholders in respect of such period. Management believes
Distributable Cash Flow Coverage Ratio is an important measure of
operating performance because it allows management, investors and
others to gauge the Partnership’s ability to pay distributions to
common unitholders using the cash flows the Partnership generates.
The Partnership’s Distributable Cash Flow Coverage Ratio as
presented may not be comparable to similarly titled measures of
other companies.
This news release also contains a forward-looking estimate of
Adjusted EBITDA and Distributable Cash Flow projected to be
generated by the Partnership in its 2021 fiscal year. A
forward-looking estimate of net cash provided by operating
activities and reconciliations of the forward-looking estimates of
Adjusted EBITDA and Distributable Cash Flow to net cash provided by
operating activities are 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.
See “Reconciliation of Non-GAAP Financial Measures” for Adjusted
gross margin reconciled to gross margin, Adjusted EBITDA reconciled
to net income (loss) and net cash provided by operating activities,
and net income (loss) and net cash provided by operating activities
reconciled to Distributable Cash Flow and Distributable Cash Flow
Coverage Ratio.
Forward-Looking
Statements
Some of the information in this news release may contain
forward-looking statements. These statements can be identified by
the use of forward-looking terminology including “may,” “believe,”
“expect,” “intend,” “anticipate,” “estimate,” “continue,” “if,”
“project,” “outlook,” “will,” “could,” “should,” or other similar
words or the negatives thereof, and include the Partnership’s
expectation of future performance contained herein, including as
described under “Full-Year 2021 Outlook.” These statements discuss
future expectations, contain projections of results of operations
or of financial condition, or state other “forward-looking”
information. You are cautioned not to place undue reliance on any
forward-looking statements, which can be affected by assumptions
used or by known risks or uncertainties. Consequently, no
forward-looking statements can be guaranteed. When considering
these forward-looking statements, you should keep in mind the risk
factors noted below and other cautionary statements in this news
release. The risk factors and other factors noted throughout this
news release could cause actual results to differ materially from
those contained in any forward-looking statement. Known material
factors that could cause the Partnership’s actual results to differ
materially from the results contemplated by such forward-looking
statements include:
- changes in the long-term supply of and demand for crude oil and
natural gas, including as a result of uncertainty regarding the
length of time it will take for the U.S. and the rest of the world
to slow the spread of COVID-19 to the point where applicable
authorities are comfortable continuing to ease, or declining to
reinstate certain restrictions on various commercial and economic
activities; such restrictions are designed to protect public health
but also have the effect of reducing demand for crude oil and
natural gas;
- the severity and duration of world health events, including the
COVID-19 outbreak, related economic repercussions, actions taken by
governmental authorities and other third parties in response to the
pandemic, which has caused and may in the future cause disruptions
in the oil and gas industry and negatively impact demand for oil
and gas;
- changes in general economic conditions, including inflation,
and changes in economic conditions of the crude oil and natural gas
industries specifically, including the ability of members of the
Organization of the Petroleum Exporting Countries (“OPEC”) and
Russia (together with OPEC and other allied producing countries,
“OPEC+”) to agree on and comply with supply limitations;
- uncertainty regarding the timing, pace and extent of an
economic recovery in the U.S. and elsewhere, which in turn will
likely affect demand for crude oil and natural gas and therefore
the demand for the compression and treating services we provide and
the commercial opportunities available to us;
- the deterioration of the financial condition of our customers,
which may result in the initiation of bankruptcy proceedings with
respect to customers;
- renegotiation of material terms of customer contracts;
- competitive conditions in our industry, including competition
for employees in a tight labor market;
- our ability to realize the anticipated benefits of
acquisitions;
- actions taken by our customers, competitors and third-party
operators;
- changes in the availability and cost of capital, including
changes to interest rates under the Partnership’s revolving credit
facility;
- operating hazards, natural disasters, epidemics, pandemics
(such as COVID-19), weather-related delays, casualty losses and
other matters beyond our control;
- operational challenges relating to the COVID-19 pandemic and
efforts to mitigate the spread of the virus, including logistical
challenges, protecting the health and well-being of our employees,
remote work arrangements, performance of contracts and supply chain
disruptions;
- the restrictions on our business that are imposed under our
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;
- factors described in Part I, Item 1A (“Risk Factors”) of the
Partnership’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, which was filed with the Securities and Exchange
Commission (the “SEC”) on February 16, 2021, and subsequently filed
reports; and
- other factors discussed in the Partnership’s filings with the
SEC.
All forward-looking statements speak only as of the date of this
news release and are expressly qualified in their entirety by the
foregoing cautionary statements. Unless legally required, the
Partnership undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. Unpredictable or unknown factors not
discussed herein also could have material adverse effects on
forward-looking statements.
USA COMPRESSION PARTNERS,
LP
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except for per
unit amounts – Unaudited)
Three Months Ended
September 30,
2021
June 30, 2021
September 30,
2020
Revenues:
Contract operations
$
151,622
$
151,800
$
156,632
Parts and service
4,122
1,818
1,986
Related party
2,883
2,944
3,048
Total revenues
158,627
156,562
161,666
Costs and expenses:
Cost of operations, exclusive of
depreciation and amortization
49,159
45,604
46,715
Depreciation and amortization
59,265
59,227
60,072
Selling, general and administrative
13,524
15,288
12,716
Loss (gain) on disposition of assets
48
(1,105
)
1,686
Impairment of compression equipment
—
2,403
1,706
Total costs and expenses
121,996
121,417
122,895
Operating income
36,631
35,145
38,771
Other income (expense):
Interest expense, net
(32,222
)
(32,350
)
(32,004
)
Other
18
45
20
Total other expense
(32,204
)
(32,305
)
(31,984
)
Net income before income tax expense
4,427
2,840
6,787
Income tax expense
312
152
268
Net income
4,115
2,688
6,519
Less: distributions on Preferred Units
(12,188
)
(12,188
)
(12,188
)
Net loss attributable to common
unitholders’ interests
$
(8,073
)
$
(9,500
)
$
(5,669
)
Weighted average common units outstanding
– basic and diluted
97,085
97,044
96,882
Basic and diluted net loss per common
unit
$
(0.08
)
$
(0.10
)
$
(0.06
)
Distributions declared per common unit
$
0.525
$
0.525
$
0.525
USA COMPRESSION PARTNERS,
LP
SELECTED BALANCE SHEET
DATA
(In thousands, except unit
amounts – Unaudited)
September 30,
2021
Selected Balance Sheet data:
Total assets
$
2,796,551
Long-term debt, net
$
1,961,697
Total partners’ capital
$
157,525
Common units outstanding
97,096,137
USA COMPRESSION PARTNERS,
LP
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands —
Unaudited)
Three Months Ended
September 30,
2021
June 30, 2021
September 30,
2020
Net cash provided by operating
activities
$
45,297
$
99,459
$
48,219
Net cash used in investing activities
(13,397
)
(6,063
)
(30,394
)
Net cash used in financing activities
(31,652
)
(93,493
)
(17,825
)
USA COMPRESSION PARTNERS,
LP
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
ADJUSTED GROSS MARGIN TO GROSS
MARGIN
(In thousands —
Unaudited)
The following table reconciles Adjusted
gross margin to gross margin, its most directly comparable GAAP
financial measure, for each of the periods presented:
Three Months Ended
September 30,
2021
June 30, 2021
September 30,
2020
Total revenues
$
158,627
$
156,562
$
161,666
Cost of operations, exclusive of
depreciation and amortization
(49,159
)
(45,604
)
(46,715
)
Depreciation and amortization
(59,265
)
(59,227
)
(60,072
)
Gross margin
$
50,203
$
51,731
$
54,879
Depreciation and amortization
59,265
59,227
60,072
Adjusted gross margin
$
109,468
$
110,958
$
114,951
USA COMPRESSION PARTNERS,
LP
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
ADJUSTED EBITDA TO NET INCOME
AND NET CASH PROVIDED BY OPERATING ACTIVITIES
(In thousands —
Unaudited)
The following table reconciles Adjusted
EBITDA to net income and net cash provided by operating activities,
its most directly comparable GAAP financial measures, for each of
the periods presented:
Three Months Ended
September 30,
2021
June 30, 2021
September 30,
2020
Net income
$
4,115
$
2,688
$
6,519
Interest expense, net
32,222
32,350
32,004
Depreciation and amortization
59,265
59,227
60,072
Income tax expense
312
152
268
EBITDA
$
95,914
$
94,417
$
98,863
Interest income on capital lease
—
—
87
Unit-based compensation expense (1)
3,482
4,260
1,332
Transaction expenses (2)
—
—
136
Severance charges
190
13
130
Loss (gain) on disposition of assets
48
(1,105
)
1,686
Impairment of compression equipment
(3)
—
2,403
1,706
Adjusted EBITDA
$
99,634
$
99,988
$
103,940
Interest expense, net
(32,222
)
(32,350
)
(32,004
)
Non-cash interest expense
2,288
2,297
2,167
Income tax expense
(312
)
(152
)
(268
)
Interest income on capital lease
—
—
(87
)
Transaction expenses
—
—
(136
)
Severance charges
(190
)
(13
)
(130
)
Other
(1,118
)
(34
)
78
Changes in operating assets and
liabilities
(22,783
)
29,723
(25,341
)
Net cash provided by operating
activities
$
45,297
$
99,459
$
48,219
____________________________________
(1)
For the three months ended September 30,
2021, June 30, 2021 and September 30, 2020, unit-based compensation
expense included $1.0 million, $1.1 million and $0.7 million,
respectively, of cash payments related to quarterly payments of
distribution equivalent rights on outstanding phantom unit awards
and $0, $0.2 million, and $0.0 million, respectively, 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
expenses.
(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.
USA COMPRESSION PARTNERS,
LP
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
DISTRIBUTABLE CASH FLOW TO NET
INCOME AND NET CASH PROVIDED BY OPERATING ACTIVITIES
(Dollars in thousands —
Unaudited)
The following table reconciles
Distributable Cash Flow to net income and net cash provided by
operating activities, its most directly comparable GAAP financial
measures, for each of the periods presented:
Three Months Ended
September 30,
2021
June 30, 2021
September 30,
2020
Net income
$
4,115
$
2,688
$
6,519
Non-cash interest expense
2,288
2,297
2,167
Depreciation and amortization
59,265
59,227
60,072
Non-cash income tax expense (benefit)
32
(34
)
78
Unit-based compensation expense (1)
3,482
4,260
1,332
Transaction expenses (2)
—
—
136
Severance charges
190
13
130
Loss (gain) on disposition of assets
48
(1,105
)
1,686
Impairment of compression equipment
(3)
—
2,403
1,706
Distributions on Preferred Units
(12,188
)
(12,188
)
(12,188
)
Maintenance capital expenditures (4)
(5,259
)
(5,025
)
(4,727
)
Distributable Cash Flow
$
51,973
$
52,536
$
56,911
Maintenance capital expenditures
5,259
5,025
4,727
Transaction expenses
—
—
(136
)
Severance charges
(190
)
(13
)
(130
)
Distributions on Preferred Units
12,188
12,188
12,188
Other
(1,150
)
—
—
Changes in operating assets and
liabilities
(22,783
)
29,723
(25,341
)
Net cash provided by operating
activities
$
45,297
$
99,459
$
48,219
Distributable Cash Flow
$
51,973
$
52,536
$
56,911
Distributions for Distributable Cash Flow
Coverage Ratio (5)
$
50,975
$
50,960
$
50,874
Distributable Cash Flow Coverage Ratio
1.02 x
1.03 x
1.12 x
____________________________________
(1)
For the three months ended September 30,
2021, June 30, 2021 and September 30, 2020, unit-based compensation
expense included $1.0 million, $1.1 million and $0.7 million,
respectively, of cash payments related to quarterly payments of
distribution equivalent rights on outstanding phantom unit awards
and $0, $0.2 million, and $0.0 million, respectively, 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
expenses.
(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.
USA COMPRESSION PARTNERS,
LP
FULL-YEAR 2021 ADJUSTED EBITDA
AND DISTRIBUTABLE CASH FLOW GUIDANCE RANGE
RECONCILIATION TO NET
INCOME
(Unaudited)
Guidance
Net income
$5.0 million to $15.0 million
Plus: Interest expense, net
130.0 million
Plus: Depreciation and amortization
241.0 million
Plus: Income tax expense
1.0 million
EBITDA
$377.0 million to $387.0
million
Plus: Unit-based compensation expense and
other (1)
13.0 million
Adjusted EBITDA
$390.0 million to $400.0
million
Less: Cash interest expense
120.5 million
Less: Current income tax expense
0.5 million
Less: Maintenance capital expenditures
20.0 million
Less: Distributions on Preferred Units
49.0 million
Distributable Cash Flow
$200.0 million to $210.0
million
____________________________________
(1)
Unit-based compensation expense is based
on our closing per unit price of $16.57 on September 30, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211102005460/en/
Investor Contacts: USA Compression Partners, LP
Matthew C. Liuzzi Chief Financial Officer 512-369-1624
ir@usacompression.com
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