Fleet and Operations - As of December 31, 2024, the total horsepower in the compression fleet was 3,862,102, with large-horsepower units (≥400 horsepower) representing 87.2% of the total fleet horsepower[34]. - The average age of the compression units in the fleet is approximately 12 years, with a useful life that could extend for decades when properly maintained[22]. - The compression units are designed for multiple compression stages, allowing operation across a broad range of conditions, which supports long-term contracts and reduces redeployment risk[22]. - The company has ordered 4 large-horsepower units, consisting of 10,000 horsepower, for expected delivery during 2025[35]. - The company’s compression services are critical for enhancing oil production from horizontal wells operating in tight shale plays[21]. - The company utilizes advanced monitoring systems for its compression units, which are designed to automatically shut down if operating conditions deviate from a pre-determined range[36]. - The company has not experienced any material supply problems to date, although lead-times for new engines and frames have varied between six months to over one year[43]. - Approximately 14% of the company's compression services on a revenue basis were provided on a month-to-month basis as of December 31, 2024[101]. Financial Performance and Capital Structure - The company requires available cash of $61.7 million per quarter, or $246.8 million per year, to maintain its current distribution rate of $0.525 per common unit per quarter[86]. - Preferred Unit distributions require $4.4 million quarterly, or $17.6 million annually, based on the number of Preferred Units outstanding as of February 6, 2025[87]. - The company's total debt as of December 31, 2024, was $2.5 billion, with $772.1 million outstanding under the Credit Agreement[102]. - The Credit Agreement has an aggregate commitment of $1.6 billion, with $827.1 million of remaining unused availability as of December 31, 2024[103]. - The company's leverage ratio under the Credit Agreement was 4.02x as of December 31, 2024, with a maximum allowable leverage ratio of 5.25 to 1.00[106]. - The company expects to fund expansion capital expenditures through borrowings under the Credit Agreement and the issuance of debt and equity securities, but may face challenges in obtaining favorable financing[114]. - A one percent increase in the effective interest rate would result in an annual increase in interest expense of approximately $7.7 million[107]. Customer Base and Revenue Concentration - Major customers include approximately 275 companies in the energy industry, with the top ten customers accounting for 41% of total revenues in 2024[41]. - The company's ten largest customers accounted for approximately 41%, 39%, and 38% of total revenues for the years ended December 31, 2024, 2023, and 2022, respectively[94]. - As of December 31, 2024, two customers accounted for 12% and 11% of the company's trade accounts receivable, indicating significant counterparty credit risk[123]. Environmental Regulations and Compliance - The company is subject to stringent federal, state, and local environmental regulations, which may lead to significant costs and liabilities[47]. - Compliance with the Clean Air Act and state laws imposes monitoring and reporting requirements for air emissions, potentially increasing project costs for customers[49]. - The company has implemented dual-drive technology in its natural gas compression services to reduce emissions of nitrogen oxides, carbon monoxide, carbon dioxide, and VOCs[63]. - The Inflation Reduction Act of 2022 imposes a methane emissions charge on facilities emitting 25,000 metric tons or more of carbon dioxide equivalent gas per year, but the company does not expect a material adverse effect on its operations[56]. - The company believes it is in substantial compliance with environmental laws, but future changes in regulations could increase compliance costs[48]. - The company has faced increased obligations to reduce air emissions, including new regulations from the EPA affecting internal combustion engines[50]. - Environmental regulations may increase costs and liabilities for the company and its customers, potentially decreasing demand for services[145]. - The company operates under stringent federal, state, and local environmental laws, which may impose significant compliance costs and operational restrictions[146]. - New regulations under the Clean Air Act could lead to increased compliance costs and negatively impact the company's financial condition[151]. Competition and Market Risks - The company faces significant competition that may cause it to lose market share and reduce cash available for distribution[80]. - The company relies on a limited number of suppliers for its natural gas compression equipment, which poses risks of product shortages and price increases[108]. - Stricter regulations on hydraulic fracturing could reduce natural gas production by customers, adversely affecting the company's revenue[165]. - Increased attention to ESG matters may lead to reduced demand for fossil fuels and negatively impact the company's services and profits[162]. Employee Relations and Safety - The company has 854 full-time employees as of December 31, 2024, and has begun utilizing services from Energy Transfer employees in certain departments[71]. - The company’s safety culture includes continuous training opportunities and a comprehensive program to promote operational excellence[75]. - The company’s employee relations are considered good, with no employees subject to collective bargaining agreements[71]. Legal and Tax Considerations - The company is subject to various claims, tax audits, and litigation that could materially affect its financial condition and results of operations[144]. - The IRS is currently examining the Partnership's U.S. Federal income tax returns for the years 2019 and 2020, which may impact cash available for distribution[208]. - Changes in state laws could subject the Partnership to additional entity-level taxation, potentially reducing cash available for distribution[200]. - If treated as a corporation for federal income tax purposes, the Partnership would face significant reductions in cash available for distribution[198]. - Unitholders are required to pay federal income taxes on their share of taxable income, regardless of cash distributions received[203]. Governance and Partnership Structure - Energy Transfer owns over 33.3% of the outstanding common units, limiting common unitholders' ability to remove the General Partner[170]. - The Partnership Agreement allows the General Partner to limit its liability, which may result in unitholders having reduced recourse against the General Partner[175]. - The General Partner has the authority to conduct business without unitholder approval, affecting cash distributions and capital expenditures[173]. - The Partnership Agreement permits the issuance of additional limited partner interests without unitholder approval, potentially diluting existing ownership[185]. - The NYSE does not require the Partnership to comply with certain corporate governance requirements, which may limit unitholder protections[195].

Financial Data and Key Metrics Changes - The company reported record revenues, adjusted gross margin, adjusted EBITDA, distributable cash flow, and average revenue per revenue-generating horsepower for Q4 2024 and the full year [8][21] - Q4 2024 net income was $25.4 million, operating income was $74.5 million, and net cash provided by operating activities was $130.2 million [22] - The leverage ratio declined to a record low of 4.02 times [22] Business Line Data and Key Metrics Changes - The average active horsepower reached an all-time high of 3.56 million, contributing to a revenue increase of 2% sequentially and 9% year-over-year [21] - The total fleet horsepower at the end of Q4 was approximately 3.9 million, flat compared to the prior quarter but up 4% year-over-year [23] Market Data and Key Metrics Changes - The company anticipates a 15% growth in overall U.S. natural gas demand over the next five years, driven by LNG growth and increased power demand [15] - The company is well-positioned in key markets, particularly the Permian Basin, which is expected to support near-term growth [14][16] Company Strategy and Development Direction - The company plans to focus on new unit deliveries and fleet enhancements in 2025, with a significant portion of growth capital allocated to these areas [10] - Organizational changes include moving headquarters from Austin to Dallas and adopting a shared service model with Energy Transfer, expected to yield at least $5 million in annualized savings [11] Management's Comments on Operating Environment and Future Outlook - Management remains bullish on the crude oil and natural gas macro backdrop, expecting continued support from the new administration for U.S. energy development [14] - The company is optimistic about the anticipated growth in natural gas demand and infrastructure build-out in the Permian Basin [15][16] Other Important Information - The company expects to see significant savings from shared services and is implementing an ERP system to improve business processes [11][10] - Expansion capital expenditures for Q4 2024 were $37.6 million, with maintenance capital expenditures at $8.2 million [24] Q&A Session Summary Question: CapEx and Growth Outlook - The company is maintaining a disciplined approach to leverage while planning for growth, with a focus on sustaining a lower leverage ratio [35] Question: 2025 Guidance Context - Q4 benefited from a net sales tax credit, but management is optimistic about maintaining margin and utilization trends into 2025 [46] Question: Adjacent Business Opportunities - The company is focusing on its third-party service division, which involves servicing customer-owned equipment [52] Question: Gross Margin and Pricing Trends - Customers are favoring longer contract renewals, and there is uncertainty regarding the impact of steel tariffs on costs [60][61] Question: Capital Allocation and Debt Management - The company aims to stop borrowing to fund distributions and is focused on managing debt measures relative to business capacity [81]

Earnings Presentation Fourth Quarter 2024 Forward-Looking Statements and Disclaimer Forward Looking Statements This presentation contains forward-looking statements related to the operations of the Partnership that are based on management's current expectations, estimates, and projections about its operations. You can identify many of these forward-looking statements by words such as "believe," "expect," "intend," "project," "anticipate," "estimate," "continue," "if," "outlook," "will," "could," "should," o ...

Financial Performance - Record total revenues of $245.9 million for Q4 2024, up from $225.0 million in Q4 2023, representing an increase of 9.8%[5] - Net income for Q4 2024 was $25.4 million, compared to $12.8 million in Q4 2023, reflecting a year-over-year increase of 98.4%[5] - Adjusted EBITDA reached $155.5 million in Q4 2024, an increase from $138.6 million in Q4 2023, marking a growth of 12.2%[5] - Operating income for Q4 2024 was $74.5 million, compared to $68.5 million in Q4 2023, reflecting an 8.9% year-over-year growth[33] - Net income attributable to common unitholders for the year ended December 31, 2024, was $82.0 million, significantly up from $20.5 million in 2023[33] - Adjusted EBITDA for the year ended December 31, 2024, reached $584.3 million, a 14.1% increase from $511.9 million in 2023[43] Cash Flow and Distributions - Distributable Cash Flow for Q4 2024 was $96.3 million, compared to $79.9 million in Q4 2023, indicating a rise of 20.5%[5] - Distributable Cash Flow for the year ended December 31, 2024, was projected at $341.3 million, compared to $271.9 million in 2023, indicating a 25.5% increase[37] - The company declared distributions of $0.525 per common unit for Q4 2024, consistent with the previous quarter[33] - Cash provided by operating activities for Q4 2024 was $130.2 million, compared to $91.6 million in Q4 2023, marking a 42.1% increase[37] - Net cash provided by operating activities for the year ended December 31, 2024, was $341.3 million, up from $271.9 million in 2023, representing a 25.5% growth[44] - The coverage ratio for Distributable Cash Flow was 1.56x for Q4 2024, compared to 1.48x in Q4 2023[44] Capital Expenditures - Expansion capital expenditures for Q4 2024 totaled $37.6 million, while maintenance capital expenditures were $8.2 million[4] - The company anticipates 2025 expansion capital expenditures in the range of $120 million to $140 million[4] - Maintenance capital expenditures for the year ended December 31, 2024, were $31.9 million, up from $25.2 million in 2023[44] Debt and Assets - As of December 31, 2024, the Partnership had outstanding borrowings of $772.1 million under its $1.6 billion revolving credit facility[11] - Total assets as of December 31, 2024, were $2.75 billion, with long-term debt amounting to $2.50 billion[35] - Interest expense for the year ended December 31, 2024, totaled $193.5 million, an increase from $169.9 million in 2023[43] - The company incurred a loss on extinguishment of debt amounting to $5.0 million due to the redemption of senior notes due 2026[45] Operational Metrics - Average revenue per revenue-generating horsepower per month was $20.85 in Q4 2024, up from $19.52 in Q4 2023, a growth of 6.8%[5] - Adjusted gross margin for Q4 2024 was $168.2 million, up from $151.9 million in Q4 2023, representing an increase of 10.7%[40] - Changes in operating assets and liabilities resulted in a cash inflow of $22.8 million in Q4 2024, contrasting with an outflow of $6.8 million in Q4 2023[44] Future Projections - The expected Adjusted EBITDA for full-year 2025 is projected between $590 million and $610 million[12] - Distributable Cash Flow for full-year 2025 is forecasted to be between $350 million and $370 million[12] - The company anticipates continued growth in Adjusted EBITDA and Distributable Cash Flow for the fiscal year 2025, although specific projections were not provided due to uncertainties[27] Compensation and Expenses - Unit-based compensation expense for Q4 2024 was $5.6 million, compared to $4.5 million in Q4 2023, indicating a 24.5% increase[44]

Group 1 - USA Compression Partners (USAC) shares increased by 8.5% to close at $27.76, with a notable trading volume compared to normal sessions, reflecting an 8.6% gain over the past four weeks [1][2] - The surge in USAC's stock price is attributed to strong natural gas demand from shale plays, leading to increased demand for its compression services, supported by a diversified and creditworthy customer base [2][3] - The company is expected to report quarterly earnings of $0.26 per share, representing a year-over-year increase of 160%, with revenues projected at $241.6 million, up 7.4% from the previous year [3][4] Group 2 - The consensus EPS estimate for USAC has been revised 1.5% higher in the last 30 days, indicating a positive trend that typically correlates with price appreciation [4] - USA Compression is part of the Zacks Oil and Gas - Mechanical and Equipment industry, where Nov Inc. (NOV) has seen a slight increase of 0.5% in its stock price, but has returned -1.4% over the past month [4] - In contrast, Nov Inc. has experienced a -5.1% change in its EPS estimate over the past month, reflecting a -35.2% change from the previous year, and currently holds a Zacks Rank of 5 (Strong Sell) [5]

Group 1 - USA Compression Partners, LP (USAC) has reached a key level of support and is showing potential for a bullish breakout due to a "golden cross" formation in its moving averages [1] - The golden cross indicates a trend reversal, starting from a downtrend, followed by a crossover of the shorter moving average above the longer one, and culminating in an upward price movement [2] - USAC has moved 12.3% higher over the last four weeks and currently holds a 2 (Buy) rating on the Zacks Rank, supported by a positive earnings outlook with no earnings estimates cut and an increase in the Zacks Consensus Estimate [3] Group 2 - Investors are encouraged to monitor USAC for potential gains due to its key technical level and favorable earnings estimate revisions [4]

USA Compression Partners (USAC) reported a third-quarter adjusted net profit of 13 cents per common unit, which missed the Zacks Consensus Estimate of 20 cents due to higher total costs and other expenses. However, the metric improved from the year-ago quarter's adjusted net profit of 9 cents per common unit on the back of a higher-than-expected revenue-generating capacity.The largest independent provider of natural gas compression services generated revenues of $240 million, improving 10.5% from the year-a ...

[Performance Overview](index=1&type=section&id=Performance%20Overview) USA Compression reported record revenues and Adjusted EBITDA for Q3 2024, driven by strong operational execution and higher pricing in a tightening market [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company achieved record total revenues of $240.0 million, a 10.5% increase year-over-year, with significant growth in Adjusted EBITDA and Distributable Cash Flow despite a slight decrease in net income Q3 2024 vs. Q3 2023 Financial Highlights | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $240.0 million | $217.1 million | +10.5% | | Net Income | $19.3 million | $20.9 million | -7.7% | | Adjusted EBITDA | $145.7 million | $130.2 million | +11.9% | | Distributable Cash Flow | $86.6 million | $71.6 million | +20.9% | | DCF Coverage | 1.41x | 1.39x | +0.02x | | Net Cash from Operations | $48.5 million | $50.1 million | -3.2% | [Operational Highlights](index=1&type=section&id=Operational%20Highlights) Operational metrics showed strong year-over-year improvement, with record average revenue-generating horsepower, increased revenue per horsepower per month, and improved utilization Q3 2024 vs. Q3 2023 Operational Highlights | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Avg. Revenue-Generating Horsepower | 3.56 million | 3.36 million | +6.0% | | Avg. Revenue per HP per Month | $20.60 | $19.10 | +7.9% | | Average Horsepower Utilization | 94.6% | 93.6% | +1.0 p.p. | [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO highlighted the record-setting quarter, attributing it to strong operational execution and a tightening market, leading to increased full-year 2024 expansion capital expenditure guidance - CEO Clint Green noted that record revenues and Adjusted EBITDA were driven by **record revenue-generating horsepower** and **pricing**, reflecting a tight compression services market expected to persist[4](index=4&type=chunk) - Full-year 2024 expansion capital expenditure guidance was increased to a range of **$240.0 million to $250.0 million**[5](index=5&type=chunk) [Financial Condition and Shareholder Returns](index=1&type=section&id=Financial%20Condition%20and%20Shareholder%20Returns) As of September 30, 2024, the Partnership maintained compliance with debt covenants, with substantial credit facility availability, and declared a consistent quarterly cash distribution [Liquidity and Long-Term Debt](index=3&type=section&id=Liquidity%20and%20Long-Term%20Debt) At the end of Q3 2024, the company maintained compliance with all debt covenants, with $641.8 million available on its revolving credit facility and $1.75 billion in senior notes outstanding - As of September 30, 2024, the Partnership was in compliance with all debt covenants[8](index=8&type=chunk) - Outstanding borrowings under the revolving credit facility were **$803.2 million**, with **$641.8 million** available to be drawn[8](index=8&type=chunk) - Total outstanding senior notes amounted to **$1.75 billion**, split between 6.875% notes due 2027 (**$750.0 million**) and 7.125% notes due 2029 (**$1.0 billion**)[8](index=8&type=chunk) [Capital Expenditures and Distributions](index=1&type=section&id=Capital%20Expenditures%20and%20Distributions) For Q3 2024, the company reported expansion and maintenance capital expenditures, alongside a consistent quarterly cash distribution of $0.525 per common unit Q3 2024 Expenditures and Distribution | Item | Amount | | :--- | :--- | | Expansion Capital Expenditures | $34.1 million | | Maintenance Capital Expenditures | $9.1 million | | Cash Interest Expense, net | $47.1 million | | Quarterly Cash Distribution per Unit | $0.525 | [Full-Year 2024 Outlook](index=3&type=section&id=Full-Year%202024%20Outlook) USA Compression confirmed its full-year 2024 guidance, projecting Net Income, Adjusted EBITDA, and Distributable Cash Flow within specified ranges Full-Year 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Income | $105.0 million to $125.0 million | | Adjusted EBITDA | $565.0 million to $585.0 million | | Distributable Cash Flow | $345.0 million to $365.0 million | [Financial Statements](index=6&type=section&id=Financial%20Statements) The condensed consolidated financial statements detail the company's performance, showing increased revenue but a slight net income decrease due to higher interest expense and derivative losses [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenues for Q3 2024 increased to $240.0 million, though net income decreased to $19.3 million, primarily impacted by higher interest expense and derivative losses Q3 2024 vs. Q3 2023 Statement of Operations (in thousands) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Revenues | $239,968 | $217,085 | | Operating Income | $75,676 | $60,954 | | Interest Expense, net | ($49,361) | ($43,257) | | Net Income | $19,327 | $20,902 | | Basic and Diluted EPS | $0.13 | $0.09 | [Selected Balance Sheet Data](index=7&type=section&id=Selected%20Balance%20Sheet%20Data) As of September 30, 2024, the company reported total assets of $2.80 billion, net long-term debt of $2.53 billion, and a total partners' deficit of $107.3 million Balance Sheet Data as of September 30, 2024 (in thousands) | Item | Amount | | :--- | :--- | | Total Assets | $2,803,627 | | Long-term Debt, net | $2,532,398 | | Total Partners' Deficit | ($107,254) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities slightly decreased to $48.5 million in Q3 2024, with net cash used in investing and financing activities at $28.4 million and $20.0 million respectively Q3 2024 vs. Q3 2023 Cash Flows (in thousands) | Activity | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $48,481 | $50,072 | | Net Cash used in Investing Activities | ($28,379) | ($48,082) | | Net Cash used in Financing Activities | ($20,032) | ($2,015) | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) The report utilizes non-GAAP measures like Adjusted EBITDA and Distributable Cash Flow, providing definitions and reconciliations to offer a comprehensive view of operational profitability and cash generation [Definitions of Non-GAAP Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company defines key non-GAAP metrics including Adjusted Gross Margin, Adjusted EBITDA, and Distributable Cash Flow, which provide supplemental information on operating profitability and distribution capacity - **Adjusted gross margin:** Defined as revenue less cost of operations, excluding depreciation and amortization[14](index=14&type=chunk) - **Adjusted EBITDA:** Used to assess financial performance without regard to financing methods, capital structure, or historical cost basis[17](index=17&type=chunk) - **Distributable Cash Flow (DCF):** An important measure of operating performance used to compare cash flows generated to cash distributions expected to be paid to common unitholders[22](index=22&type=chunk) [Reconciliation of Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Adjusted EBITDA for Q3 2024 was reconciled to $145.7 million from net income, with key adjustments for interest expense, depreciation, amortization, and derivative losses Reconciliation of Net Income to Adjusted EBITDA for Q3 2024 (in thousands) | Description | Amount | | :--- | :--- | | **Net Income** | **$19,327** | | Interest expense, net | $49,361 | | Depreciation and amortization | $67,237 | | Income tax expense | $793 | | **EBITDA** | **$136,718** | | Unit-based compensation expense | $2,669 | | Loss (gain) on derivative instrument | $6,218 | | Other adjustments | $85 | | **Adjusted EBITDA** | **$145,690** | [Other Information](index=3&type=section&id=Other%20Information) This section provides details for the investor conference call and includes standard forward-looking statement disclaimers outlining potential risks that could affect future results [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) A conference call was hosted on November 5, 2024, at 11:00 a.m. Eastern Time to discuss third-quarter results, accessible via webcast and phone - A conference call was scheduled for 11:00 a.m. Eastern Time on November 5, 2024, to discuss Q3 performance[10](index=10&type=chunk) - Access was provided via webcast on the company's investor relations website or by phone[11](index=11&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The release contains forward-looking statements, including the 2024 outlook, subject to various risks and uncertainties such as economic conditions, interest rate changes, and competitive pressures - The news release contains forward-looking statements, including the 'Full-Year 2024 Outlook,' which are not guarantees of future performance[26](index=26&type=chunk) - Known material risks include changes in economic conditions for crude oil and natural gas, interest rate changes, competitive conditions, and information technology risks like cyberattacks[26](index=26&type=chunk)

USA Compression Partners (USAC) is set to release third-quarter results on Nov. 5, 2024. The Zacks Consensus Estimate for earnings is pegged at 20 cents per share and that for revenues is pinned at $238.37 million.Let us delve into the factors that are likely to have influenced this oil and gas equipment and service provider’s performance in the to-be-reported quarter. But first, it is worth taking a look at USAC’s performance in the last reported quarter.Stay up-to-date with all quarterly releases: See Zac ...

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