USA Compression Partners, LP (NYSE: USAC) (“USA Compression” or
the “Partnership”) announced today its financial and operating
results for the first quarter 2022.
First Quarter 2022 Highlights
- Total revenues were $163.4 million for the first quarter 2022,
compared to $157.5 million for the first quarter 2021.
- Net income was $3.3 million for the first quarter 2022,
compared to $0.4 million for the first quarter 2021.
- Net cash provided by operating activities was $35.1 million for
the first quarter 2022, compared to $39.6 million for the first
quarter 2021.
- Adjusted EBITDA was $98.4 million for the first quarter 2022,
compared to $99.6 million for the first quarter 2021.
- Distributable Cash Flow was $50.1 million for the first quarter
2022, compared to $52.6 million for the first quarter 2021.
- Announced cash distribution of $0.525 per common unit for the
first quarter 2022, consistent with the first quarter 2021.
- Distributable Cash Flow Coverage was 0.98x for the first
quarter 2022, compared to 1.03x for the first quarter 2021.
“During the first quarter, we started to realize the anticipated
pick-up in demand for our contract compression services,” commented
Eric D. Long, USA Compression’s President and Chief Executive
Officer. “The strong levels of quote activity we saw prior to the
Russian invasion of Ukraine on February 24th have continued to
increase – leading to top-line growth, with increases in total
revenue, active horsepower, horsepower utilization and pricing.
Average active horsepower increased by approximately 28,000
horsepower throughout the first quarter. By the end of the period,
horsepower utilization had increased to 86.1%, up from 82.7% at the
end of 2021. And average pricing per month increased to $16.87, up
from $16.62 during the fourth quarter of 2021.”
“While supply chain bottlenecks are evident across all facets of
the energy industry, USA Compression is able to quickly and cost
effectively redeploy high quality, recent vintage equipment from
our idle fleet to meet the growing demands of our long time
infrastructure oriented customers. We currently expect our fleet
utilization to continue to increase during the balance of the year.
Expansion capital for the quarter was approximately $20 million,
divided roughly evenly between reconfiguration of existing units
and new unit purchases and start-ups. Due to strong demand from
some of our largest customers, in early 2022 we committed to
purchase an additional 20 large horsepower compression units, which
brings our committed new unit order for 2022 to 30 units, for a
total of 75,000 horsepower. By locking in delivery slots that now
approach a full year, we expect to secure multi-year contracts with
our customers for late 2022 and early 2023 deployment.”
“Lastly, the time and effort we’ve invested in the Dual Drive
offering has begun to bear fruit, with the recent execution of our
first multi-year contract for a series of large horsepower units
with an existing customer. This achievement helps validate our
belief that Dual Drive represents an attractive service offering
for our customers – the ability to deploy electric compression that
significantly reduces emissions while at the same time maintaining
reliability from the redundancy of natural gas compression. USA
Compression customers will improve their environmental footprint
from this hybrid technology. We are optimistic that with these
units on the ground and operating, we’ll be able to continue to
deploy additional Dual Drive units over the course of 2022 and
beyond.”
Expansion capital expenditures were $20.1 million, maintenance
capital expenditures were $5.8 million and cash interest expense,
net was $30.0 million for the first quarter 2022.
On April 14, 2022, the Partnership announced a first quarter
cash distribution of $0.525 per common unit, which corresponds to
an annualized distribution rate of $2.10 per common unit. The
distribution will be paid on May 6, 2022 to common unitholders of
record as of the close of business on April 25, 2022.
On April 27, 2022, a tranche of warrants with the right to
purchase 5,000,000 common units was exercised in full by the
holders. The exercise of the warrants was net settled by the
Partnership for a total of approximately 534,000 common units.
These warrants were part of the preferred equity financing
undertaken in 2018 for the CDM Acquisition.
Operational and Financial
Data
Three Months Ended
March 31, 2022
December 31,
2021
March 31, 2021
Operational data:
Fleet horsepower (at period end) (1)
3,687,518
3,689,018
3,720,745
Revenue generating horsepower (at period
end) (2)
2,987,624
2,964,206
2,987,627
Average revenue generating horsepower
(3)
2,978,422
2,950,623
2,994,418
Revenue generating compression units (at
period end)
3,949
3,942
3,942
Horsepower utilization (at period end)
(4)
86.1
%
82.7
%
83.1
%
Average horsepower utilization (for the
period) (4)
84.9
%
82.9
%
83.1
%
Financial data ($ in thousands, except
per horsepower data):
Revenue
$
163,412
$
159,943
$
157,513
Average revenue per revenue generating
horsepower per month (5)
$
16.87
$
16.62
$
16.60
Net income
$
3,254
$
3,105
$
371
Operating income
$
35,098
$
36,336
$
32,760
Net cash provided by operating
activities
$
35,054
$
81,057
$
39,612
Gross margin
$
50,616
$
49,698
$
47,855
Adjusted gross margin (6)
$
109,680
$
108,945
$
108,885
Adjusted gross margin percentage (7)
67.1
%
68.1
%
69.1
%
Adjusted EBITDA (6)
$
98,423
$
99,205
$
99,553
Adjusted EBITDA percentage (7)
60.2
%
62.0
%
63.2
%
Distributable Cash Flow (6)
$
50,146
$
52,039
$
52,580
____________________________________
(1)
Fleet horsepower is horsepower
for compression units that have been delivered to the Partnership
(and excludes units on order). As of March 31, 2022, the
Partnership had 75,000 large horsepower on order for delivery, all
of which is expected to be delivered within the next twelve months
and 50,000 horsepower of which we expect to be delivered in the
remainder of 2022.
(2)
Revenue generating horsepower is
horsepower under contract for which the Partnership is billing a
customer.
(3)
Calculated as the average of the
month-end revenue generating horsepower for each of the months in
the period.
(4)
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 81.0%, 80.4%
and 80.3% at March 31, 2022, December 31, 2021 and March 31, 2021,
respectively.
Average horsepower utilization
based on revenue generating horsepower and fleet horsepower was
80.7%, 80.0% and 80.4% for the three months ended March 31, 2022,
December 31, 2021 and March 31, 2021, respectively.
(5)
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.
(6)
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.
(7)
Adjusted gross margin percentage
and Adjusted EBITDA percentage are calculated as a percentage of
revenue.
Liquidity and Long-Term
Debt
As of March 31, 2022, the Partnership was in compliance with all
covenants under its $1.6 billion revolving credit facility. As of
March 31, 2022, the Partnership had outstanding borrowings under
the revolving credit facility of $565.5 million, $1.0 billion of
borrowing base availability and, subject to compliance with the
applicable financial covenants, available borrowing capacity of
$224.4 million. As of March 31, 2022, 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 2022 Outlook
USA Compression is confirming its full-year 2022 guidance as
follows:
- Net income range of $33.0 million to $53.0 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 $406.0 million to $426.0 million;
and
- Distributable Cash Flow range of $213.0 million to $233.0
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 first
quarter 2022 performance. The call will be broadcast live over the
Internet. Investors may participate either by phone or audio
webcast.
By Phone:
Dial 888-394-8218 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 323-701-0225. The conference ID for both is
8248631.
A replay of the call will be
available through May 13, 2022. 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 8248631.
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 (benefit). 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 2022 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 2022 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 the severity and duration of
world health events, including the COVID-19 pandemic, related
economic repercussions, actions taken by governmental authorities
and other third parties in response to such events and the
resulting disruption in the oil and gas industry and impact on
demand for oil and gas;
- changes in general economic conditions, including inflation or
supply chain disruptions, and changes in economic conditions of the
crude oil and natural gas industries, including any impact from the
military conflict involving Russia and Ukraine;
- competitive conditions in the Partnership’s industry, including
competition for employees in a tight labor market;
- renegotiation of material terms of customer contracts;
- actions taken by the Partnership’s customers, competitors and
third-party operators;
- changes in the availability and cost of capital, including
changes to interest rates;
- operating hazards, natural disasters, epidemics, pandemics
(such as COVID-19), weather-related impacts, casualty losses and
other matters beyond the Partnership’s control;
- operational challenges relating to COVID-19 and efforts to
mitigate the spread of the virus, including logistical challenges,
protecting the health and well-being of the Partnership’s
employees, remote work arrangements, performance of contracts and
supply chain disruptions;
- the deterioration of the financial condition of the
Partnership’s customers, which may result in the initiation of
bankruptcy proceedings with respect to customers;
- 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
cyberattacks;
- the effects of existing and future laws and governmental
regulations;
- the effects of future litigation;
- the Partnership’s ability to realize the anticipated benefits
of acquisitions;
- 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, 2021, which was filed with the Securities and Exchange
Commission (the “SEC”) on February 15, 2022, 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
March 31, 2022
December 31,
2021
March 31, 2021
Revenues:
Contract operations
$
157,668
$
153,503
$
152,525
Parts and service
1,926
3,250
2,038
Related party
3,818
3,190
2,950
Total revenues
163,412
159,943
157,513
Costs and expenses:
Cost of operations, exclusive of
depreciation and amortization
53,732
50,998
48,628
Depreciation and amortization
59,064
59,247
61,030
Selling, general and administrative
15,265
13,470
13,800
Gain on disposition of assets
(179
)
(276
)
(1,255
)
Impairment of compression equipment
432
168
2,550
Total costs and expenses
128,314
123,607
124,753
Operating income
35,098
36,336
32,760
Other income (expense):
Interest expense, net
(31,838
)
(32,966
)
(32,288
)
Other
20
19
25
Total other expense
(31,818
)
(32,947
)
(32,263
)
Net income before income tax expense
3,280
3,389
497
Income tax expense
26
284
126
Net income
3,254
3,105
371
Less: distributions on Preferred Units
(12,187
)
(12,187
)
(12,187
)
Net loss attributable to common
unitholders’ interests
$
(8,933
)
$
(9,082
)
$
(11,816
)
Weighted average common units outstanding
– basic and diluted
97,365
97,151
96,989
Basic and diluted net loss per common
unit
$
(0.09
)
$
(0.09
)
$
(0.12
)
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)
March 31, 2022
Selected Balance Sheet data:
Total assets
$
2,736,952
Long-term debt, net
$
2,023,183
Total partners’ capital
$
41,618
Common units outstanding
97,377,355
USA COMPRESSION PARTNERS,
LP
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands —
Unaudited)
Three Months Ended
March 31, 2022
December 31,
2021
March 31, 2021
Net cash provided by operating
activities
$
35,054
$
81,057
$
39,612
Net cash used in investing activities
(19,714
)
(15,522
)
(4,206
)
Net cash used in financing activities
(15,325
)
(65,785
)
(35,309
)
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
March 31, 2022
December 31,
2021
March 31, 2021
Total revenues
$
163,412
$
159,943
$
157,513
Cost of operations, exclusive of
depreciation and amortization
(53,732
)
(50,998
)
(48,628
)
Depreciation and amortization
(59,064
)
(59,247
)
(61,030
)
Gross margin
$
50,616
$
49,698
$
47,855
Depreciation and amortization
59,064
59,247
61,030
Adjusted gross margin
$
109,680
$
108,945
$
108,885
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
March 31, 2022
December 31,
2021
March 31, 2021
Net income
$
3,254
$
3,105
$
371
Interest expense, net
31,838
32,966
32,288
Depreciation and amortization
59,064
59,247
61,030
Income tax expense
26
284
126
EBITDA
$
94,182
$
95,602
$
93,815
Interest income on capital lease
—
—
48
Unit-based compensation expense (1)
3,710
3,599
4,182
Transaction expenses (2)
27
34
—
Severance charges
251
78
213
Gain on disposition of assets
(179
)
(276
)
(1,255
)
Impairment of compression equipment
(3)
432
168
2,550
Adjusted EBITDA
$
98,423
$
99,205
$
99,553
Interest expense, net
(31,838
)
(32,966
)
(32,288
)
Non-cash interest expense
1,822
2,899
2,281
Income tax expense
(26
)
(284
)
(126
)
Interest income on capital lease
—
—
(48
)
Transaction expenses
(27
)
(34
)
—
Severance charges
(251
)
(78
)
(213
)
Other
(704
)
(241
)
(1,349
)
Changes in operating assets and
liabilities
(32,345
)
12,556
(28,198
)
Net cash provided by operating
activities
$
35,054
$
81,057
$
39,612
____________________________________
(1)
For the three months ended March
31, 2022, December 31, 2021 and March 31, 2021, unit-based
compensation expense included $1.1 million, $1.0 million and $1.1
million, respectively, of cash payments related to quarterly
payments of distribution equivalent rights on outstanding phantom
unit awards and $0, $0.3 million, and less than $0.1 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
March 31, 2022
December 31,
2021
March 31, 2021
Net income
$
3,254
$
3,105
$
371
Non-cash interest expense
1,822
2,899
2,281
Depreciation and amortization
59,064
59,247
61,030
Non-cash income tax expense (benefit)
(204
)
59
(99
)
Unit-based compensation expense (1)
3,710
3,599
4,182
Transaction expenses (2)
27
34
—
Severance charges
251
78
213
Gain on disposition of assets
(179
)
(276
)
(1,255
)
Impairment of compression equipment
(3)
432
168
2,550
Distributions on Preferred Units
(12,187
)
(12,187
)
(12,187
)
Maintenance capital expenditures (4)
(5,844
)
(4,687
)
(4,506
)
Distributable Cash Flow
$
50,146
$
52,039
$
52,580
Maintenance capital expenditures
5,844
4,687
4,506
Transaction expenses
(27
)
(34
)
—
Severance charges
(251
)
(78
)
(213
)
Distributions on Preferred Units
12,187
12,187
12,187
Other
(500
)
(300
)
(1,250
)
Changes in operating assets and
liabilities
(32,345
)
12,556
(28,198
)
Net cash provided by operating
activities
$
35,054
$
81,057
$
39,612
Distributable Cash Flow
$
50,146
$
52,039
$
52,580
Distributions for Distributable Cash Flow
Coverage Ratio (5)
$
51,123
$
51,106
$
50,937
Distributable Cash Flow Coverage Ratio
0.98x
1.02x
1.03x
____________________________________
(1)
For the three months ended March
31, 2022, December 31, 2021 and March 31, 2021, unit-based
compensation expense included $1.1 million, $1.0 million and $1.1
million, respectively, of cash payments related to quarterly
payments of distribution equivalent rights on outstanding phantom
unit awards and $0, $0.3 million, and less than $0.1 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 2022 ADJUSTED EBITDA
AND DISTRIBUTABLE CASH FLOW GUIDANCE RANGE
RECONCILIATION TO NET
INCOME
(Unaudited)
Guidance
Net income
$33.0 million to $53.0
million
Plus: Interest expense, net
129.0 million
Plus: Depreciation and amortization
229.0 million
Plus: Income tax expense
1.0 million
EBITDA
$392.0 million to $412.0
million
Plus: Unit-based compensation expense and
other (1)
14.0 million
Adjusted EBITDA
$406.0 million to $426.0
million
Less: Cash interest expense
120.0 million
Less: Current income tax expense
1.0 million
Less: Maintenance capital expenditures
23.0 million
Less: Distributions on Preferred Units
49.0 million
Distributable Cash Flow
$213.0 million to $233.0
million
____________________________________
(1)
Unit-based compensation expense
is based on the Partnership’s closing per unit price of $17.61 on
March 31, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503005383/en/
Investor Contacts: USA Compression Partners, LP
Matthew C. Liuzzi Chief Financial Officer 512-369-1624
ir@usacompression.com
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