Archrock, Inc. (NYSE:AROC) today reported a net loss from
continuing operations of $45.7 million in the fourth
quarter of 2016, compared to a net loss from continuing operations
of $10.0 million in the third quarter of 2016 and a
net loss from continuing operations of $151.9 million in the
fourth quarter of 2015. Net loss was $46.1 million in the
fourth quarter of 2016, compared to net loss of $10.1
million in the third quarter of 2016 and net loss of $142.8
million in the fourth quarter of 2015. Net loss from
continuing operations was $64.8 million for 2016, compared to net
loss from continuing operations of $159.4 million for 2015. Net
loss was $65.2 million for 2016, compared to a net loss of $125.7
million for 2015.
EBITDA, as adjusted (as defined below), was $75.2 million for
the fourth quarter 2016, compared to $80.4 million for the third
quarter of 2016 and $86.0 million for the fourth quarter of 2015.
Other income was $4.0 million in the fourth quarter of 2016,
compared to $2.5 million in the third quarter of 2016 and $1.2
million for the fourth quarter of 2015. EBITDA, as adjusted, was
$318.8 million for 2016, compared to $373.2 million for 2015. Other
income was $8.6 million for 2016, compared to $2.1 million for
2015.
Contract operations revenue was $152.0 million in the fourth
quarter of 2016, compared to $156.6 million in the third quarter of
2016 and $189.0 million in the fourth quarter of 2015. Contract
operations gross margin was $91.8 million, or 60% of revenue, in
the fourth quarter of 2016, compared to $96.8 million, or 62% of
revenue, in the third quarter of 2016 and $111.4 million, or 59% of
revenue, in the fourth quarter of 2015.
Aftermarket services revenue was $41.8 million in the fourth
quarter of 2016 compared to $39.3 million in the third quarter of
2016 and $52.4 million in the fourth quarter of 2015.
Aftermarket services gross margin was $6.3 million, or 15% of
revenue, in the fourth quarter of 2016 compared to $6.5 million, or
17% of revenue, in the third quarter of 2016 and $8.8 million, or
17% of revenue, in the fourth quarter of 2015.
Selling, general and administrative expenses (“SG&A”)
were $26.7 million in the fourth quarter of 2016 compared
to $25.4 million in the third quarter of 2016.
“Archrock delivered strong gross margins and maintained reduced
SG&A and capital expenditure levels in the fourth quarter of
2016,” said Brad Childers, Archrock’s President and Chief Executive
Officer. “The work we accomplished in 2016, including improvements
in field operating efficiencies, a 23% reduction in run-rate
SG&A from the first quarter of 2016, and over $135 million in
consolidated debt reduction, has positioned us to take advantage of
growth opportunities in 2017 and beyond.”
“We believe the market is showing signs of a cyclical recovery
in our business,” continued Childers. “Industry conditions are
improving and we expect to leverage higher customer activity levels
to drive increased orders in 2017. As a later cycle participant, we
believe 2017 will be a transition year and we expect that our
earnings will stabilize in the first part of the year and begin to
recover in the later part of the year.”
“We continue to expect to benefit from the increasing demand for
natural gas from LNG and pipeline exports, petrochemical feedstock
and power generation. Our existing idle capacity as well as
investment in our compression fleet will enable us to capitalize on
opportunities as the predicted growth in U.S. natural gas
production occurs,” concluded Childers.
Cash available for dividend was $11.5 million in the fourth
quarter of 2016 compared to $17.2 million in the third quarter of
2016 and $14.9 million in the fourth quarter of 2015. Cash
available for dividend coverage was 1.36x in the fourth quarter of
2016 compared to 2.04x in the third quarter of 2016 and 1.14x in
the fourth quarter of 2015. Cash available for dividend was $59.5
million for 2016, and cash available for dividend coverage was
1.96x for 2016.
The cash distribution received by Archrock based on its limited
partner and general partner interests in Archrock Partners, L.P.
was $8.7 million for the fourth quarter 2016, compared to $7.1
million for the third quarter 2016 and $18.9 million for the fourth
quarter 2015. The cash distribution received by Archrock for 2016
based on its limited partner and general partner interests in
Archrock Partners, L.P. was $29.9 million, compared to $72.0
million for 2015.
On January 25, 2017, pursuant to the separation agreement
entered into in connection with the Spin-off of Exterran
Corporation (“Exterran”), Exterran’s subsidiary transferred to a
subsidiary of Archrock approximately $19.7 million, an amount equal
to the payment received by an Exterran subsidiary from Petróleos de
Venezuela Gas, S.A. (“PDVSA Gas”) for the sale of Exterran’s
subsidiaries’ and joint ventures’ previously nationalized
Venezuelan assets.
Net loss attributable to Archrock stockholders for the fourth
quarter of 2016 was $38.6 million, or $0.56 per diluted common
share. Net loss from continuing operations attributable to Archrock
stockholders, excluding the items listed in the following sentence,
for the fourth quarter of 2016 was $4.1 million, or $0.06
per diluted common share. Excluded items consisted of a non-cash
long-lived asset impairment charge of $47.1 million,
restatement charges of $12.6 million, loss from discontinued
operations net of tax of $0.4 million, net tax indemnification
income of $0.2 million, and restructuring and other charges of $1.1
million. Net loss attributable to Archrock stockholders for the
third quarter of 2016 was $9.6 million, or $0.14 per diluted common
share. Net income from continuing operations attributable to
Archrock stockholders, excluding the items listed in the following
sentence, for the third quarter of 2016 was $0.5 million,
or $0.01 per diluted common share. Excluded items
consisted of a non-cash long-lived asset impairment charge
of $16.7 million, restatement charges of $0.4 million, net tax
indemnification expense of $0.1 million, and restructuring charges
and other charges of $4.7 million. Net loss attributable to
Archrock stockholders for the fourth quarter of 2015 was $129.5
million, or $1.89 per diluted common share. Net income from
continuing operations attributable to Archrock stockholders,
excluding the items listed in the following sentence, for the
fourth quarter 2015 was $7.8 million, or $0.08 per
diluted common share. Excluded items consisted of income from
discontinued operations net of tax of $9.1 million, a federal and
state tax credit write-off and valuation allowance of $6.5 million,
a foreign tax credit write-off and valuation allowance of $86.0
million, a non-cash long-lived asset impairment charge
of $87.4 million, restructuring and other charges of $3.3
million, a goodwill impairment of $3.7 million, and debt
extinguishment costs of $9.2 million.
Net loss attributable to Archrock stockholders for 2016 was
$54.6 million, or $0.80 per diluted common share. Net income from
continuing operations attributable to Archrock stockholders,
excluding the items listed in the following sentence, for 2016
was $2.2 million, or $0.02 per diluted common share.
Excluded items consisted of non-cash long-lived asset impairment
charges of $87.4 million, restatement charges $13.5 million,
loss from discontinued operations net of tax of $0.4 million, net
tax indemnification income of $2.6 million, and restructuring and
other charges of $17.1 million. Net loss attributable to
Archrock stockholders for 2015 was $132.5 million, or $1.94 per
diluted common share. Net loss from continuing operations
attributable to Archrock stockholders, excluding the items listed
in the following sentence, for 2015 was $0.1 million, or
$0.01 per diluted common share. Excluded items consisted of
income from discontinued operations net of tax of $33.7 million, a
federal and state tax credit write-off and valuation allowance of
$6.5 million, a foreign tax credit write-off and valuation
allowance of $86.0 million, non-cash long-lived asset impairment
charges of $125.0 million, goodwill impairment of $3.7
million, debt extinguishment charges of $9.2 million, and
restructuring and other charges of $5.0 million.
On February 9, 2017 Archrock, Inc. completed the restatement of
its historical financial statements with the filing of its 2015
Annual Report on Form 10-K/A as well as its quarterly reports for
the first, second, and third quarters of 2016 on Form 10-Q with the
Securities and Exchange Commission (“SEC”). Archrock, Inc. is now
current with its SEC and New York Stock Exchange filing
requirements.
Conference Call Details
Archrock, Inc. and Archrock Partners, L.P. will host a joint
conference call on Thursday, Feb. 23, 2017, to discuss their fourth
quarter 2016 financial results. The call will begin at 11:00 a.m.
Eastern Time.
To listen to the call via a live webcast, please visit
Archrock’s website at www.archrock.com. The call will also be
available by dialing 1-800-447-0521 in the United States and Canada
or +1-847-413-3238 for international calls. Please call
approximately 15 minutes prior to the scheduled start time and
reference Archrock conference call number 4419 4861.
A replay of the conference call will be available on Archrock’s
website for approximately seven days. Also, a replay may be
accessed by dialing 1-888-843-7419 in the United States and Canada,
or +1-630-652-3042 for international calls. The access code is 4419
4861#.
EBITDA, as adjusted, a non-GAAP measure, is defined as net
income (loss) excluding income (loss) from discontinued operations
(net of tax), cumulative effect of accounting changes (net of tax),
income taxes, interest expense (including debt extinguishment costs
and gain or loss on termination of interest rate swaps),
depreciation and amortization expense, impairment charges,
restructuring and other charges, expensed acquisition costs,
restatement charges, and other items. A reconciliation of EBITDA,
as adjusted, to net income (loss), the most directly comparable
GAAP measure, appears below.
Gross Margin, a non-GAAP measure, is defined as total revenue
less cost of sales (excluding depreciation and amortization
expense). Gross margin percentage is defined as gross margin
divided by revenue. A reconciliation of gross margin to income
(loss) from continuing operations, the most directly comparable
GAAP measure, appears below.
Cash available for dividend, a non-GAAP measure, is defined as
distributions received by us from Archrock Partners, L.P., plus our
deconsolidated gross margin, less the following deconsolidated
items: maintenance and other capital expenditures, cash selling,
general and administrative expense, cash interest expense
associated with our debt, cash tax and (gain) loss on sale of
property, plant and equipment. Cash available for dividend coverage
is defined as cash available for dividend divided by total
dividends. A reconciliation of cash available for dividend to
income (loss) from continuing operations, the most directly
comparable GAAP measure, appears below.
About Archrock
Archrock, Inc. (NYSE:AROC) is a pure-play U.S. natural gas
contract compression services business and a leading supplier of
aftermarket services to customers that own compression equipment in
the United States. Archrock, Inc. holds interests in Archrock
Partners, L.P. (NASDAQ:APLP), a master limited partnership and the
leading provider of natural gas compression services to customers
in the oil and natural gas industry throughout the United States.
Archrock is headquartered in Houston, Texas, operating in the major
oil and gas producing regions in the United States, with
approximately 1,700 employees. For more information, visit
www.archrock.com.
Forward-Looking Statements
All statements in this release (and oral statements made
regarding the subjects of this release) other than historical facts
are forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended. These
forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of
uncertainties and factors, many of which are outside Archrock’s
control, which could cause actual results to differ materially from
such statements. Forward-looking information includes, but is not
limited to: statements about Archrock’s dividends; Archrock’s
financial and operational strategies and ability to successfully
effect those strategies; expenditures relating to the restatement
of Archrock’s financial statements, including sharing a portion of
costs incurred by Exterran Corporation with respect to such
matters, as well as reviews, investigations or proceedings by
government authorities, stockholders or other parties; Archrock’s
expectations regarding future commodity prices, demand for natural
gas and economic and market conditions; expectations regarding
Archrock’s ability to utilize its idle fleet and invest in its
compression fleet to capitalize on anticipated future
opportunities; demand for Archrock’s services; Archrock’s cost
reduction plans; and Archrock’s financial and operational outlook
and ability to fulfill that outlook.
While Archrock believes that the assumptions concerning future
events are reasonable, it cautions that there are inherent
difficulties in predicting certain important factors that could
impact the future performance or results of its business. Among the
factors that could cause results to differ materially from those
indicated by such forward-looking statements are: local, regional
and national economic conditions and the impact they may have on
Archrock and its customers; changes in tax laws that impact master
limited partnerships; conditions in the oil and gas industry,
including a sustained decrease in the level of supply or demand for
oil or natural gas or a sustained decrease in the price of oil or
natural gas; the financial condition of Archrock’s customers; any
non-performance by customers of their contractual obligations;
changes in safety, health, environmental and other regulations; the
results of any reviews, investigations or other proceedings by
government authorities; the results of any shareholder actions that
may be filed relating to the restatement of Archrock’s financial
statements; the potential additional costs relating to Archrock’s
restatement, cost-sharing with Exterran Corporation and to
addressing any reviews, investigations or other proceedings by
government authorities or shareholder actions; and the performance
of Archrock Partners.
These forward-looking statements are also affected by the risk
factors, forward-looking statements and challenges and
uncertainties described in the Archrock Annual Report on Form
10-K/A for the year ended December 31, 2015, and those set forth
from time to time in Archrock’s filings with the Securities and
Exchange Commission, which are available at www.archrock.com.
Except as required by law, Archrock expressly disclaims any
intention or obligation to revise or update any forward-looking
statements whether as a result of new information, future events or
otherwise.
ARCHROCK, INC. |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Contract
operations |
|
$ |
152,017 |
|
|
$ |
156,599 |
|
|
$ |
188,954 |
|
|
$ |
647,828 |
|
|
$ |
781,166 |
|
|
Aftermarket services |
|
|
41,763 |
|
|
|
39,250 |
|
|
|
52,356 |
|
|
|
159,241 |
|
|
|
216,942 |
|
|
|
|
|
193,780 |
|
|
|
195,849 |
|
|
|
241,310 |
|
|
|
807,069 |
|
|
|
998,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales (excluding depreciation and amortization expense): |
|
|
|
|
|
|
|
|
|
|
|
Contract
operations |
|
|
60,219 |
|
|
|
59,776 |
|
|
|
77,574 |
|
|
|
247,040 |
|
|
|
319,401 |
|
|
Aftermarket services |
|
|
35,414 |
|
|
|
32,750 |
|
|
|
43,587 |
|
|
|
132,879 |
|
|
|
175,645 |
|
|
Selling,
general and administrative |
|
|
26,725 |
|
|
|
25,448 |
|
|
|
35,373 |
|
|
|
114,470 |
|
|
|
131,919 |
|
|
Depreciation and amortization |
|
|
51,095 |
|
|
|
52,068 |
|
|
|
56,488 |
|
|
|
208,986 |
|
|
|
229,127 |
|
|
Long-lived asset impairment |
|
|
47,054 |
|
|
|
16,713 |
|
|
|
87,383 |
|
|
|
87,435 |
|
|
|
124,979 |
|
|
Restatement Charges |
|
|
12,610 |
|
|
|
426 |
|
|
|
— |
|
|
|
13,470 |
|
|
|
— |
|
|
Restructuring and other charges |
|
|
1,143 |
|
|
|
4,689 |
|
|
|
3,263 |
|
|
|
16,901 |
|
|
|
4,745 |
|
|
Goodwill
impairment |
|
|
— |
|
|
|
— |
|
|
|
3,738 |
|
|
|
— |
|
|
|
3,738 |
|
|
Interest
expense |
|
|
21,057 |
|
|
|
21,365 |
|
|
|
24,751 |
|
|
|
83,899 |
|
|
|
107,617 |
|
|
Debt
extinguishment costs |
|
|
— |
|
|
|
— |
|
|
|
9,201 |
|
|
|
— |
|
|
|
9,201 |
|
|
Other
income, net |
|
|
(3,950 |
) |
|
|
(2,470 |
) |
|
|
(1,202 |
) |
|
|
(8,590 |
) |
|
|
(2,079 |
) |
|
|
|
|
251,367 |
|
|
|
210,765 |
|
|
|
340,156 |
|
|
|
896,490 |
|
|
|
1,104,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes |
|
|
(57,587 |
) |
|
|
(14,916 |
) |
|
|
(98,846 |
) |
|
|
(89,421 |
) |
|
|
(106,185 |
) |
|
Provision for (benefit
from) income taxes |
|
|
(11,892 |
) |
|
|
(4,878 |
) |
|
|
53,091 |
|
|
|
(24,604 |
) |
|
|
53,189 |
|
|
Loss from continuing
operations |
|
|
(45,695 |
) |
|
|
(10,038 |
) |
|
|
(151,937 |
) |
|
|
(64,817 |
) |
|
|
(159,374 |
) |
|
Income (loss) from
discontinued operations, net of tax |
|
|
(384 |
) |
|
|
(16 |
) |
|
|
9,107 |
|
|
|
(426 |
) |
|
|
33,677 |
|
|
Net loss |
|
|
(46,079 |
) |
|
|
(10,054 |
) |
|
|
(142,830 |
) |
|
|
(65,243 |
) |
|
|
(125,697 |
) |
|
Less: Net
(income) loss attributable to the noncontrolling interest |
|
|
7,468 |
|
|
|
406 |
|
|
|
13,340 |
|
|
|
10,688 |
|
|
|
(6,852 |
) |
|
Net loss attributable
to Archrock stockholders |
|
$ |
(38,611 |
) |
|
$ |
(9,648 |
) |
|
$ |
(129,490 |
) |
|
$ |
(54,555 |
) |
|
$ |
(132,549 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per
common share (1): |
|
|
|
|
|
|
|
|
|
|
|
Loss from
continuing operations attributable to Archrock common
stockholders |
|
$ |
(0.56 |
) |
|
$ |
(0.14 |
) |
|
$ |
(2.03 |
) |
|
$ |
(0.79 |
) |
|
$ |
(2.44 |
) |
|
Income
(loss) from discontinued operations attributable to Archrock common
stockholders |
|
|
— |
|
|
|
— |
|
|
|
0.14 |
|
|
|
(0.01 |
) |
|
|
0.50 |
|
|
Net loss
attributable to Archrock common stockholders |
|
$ |
(0.56 |
) |
|
$ |
(0.14 |
) |
|
$ |
(1.89 |
) |
|
$ |
(0.80 |
) |
|
$ |
(1.94 |
) |
|
Diluted income (loss)
per common share (1): |
|
|
|
|
|
|
|
|
|
|
|
Loss from
continuing operations attributable to Archrock common
stockholders |
|
$ |
(0.56 |
) |
|
$ |
(0.14 |
) |
|
$ |
(2.03 |
) |
|
$ |
(0.79 |
) |
|
$ |
(2.44 |
) |
|
Income
(loss) from discontinued operations attributable to Archrock common
stockholders |
|
|
— |
|
|
|
— |
|
|
|
0.14 |
|
|
|
(0.01 |
) |
|
|
0.50 |
|
|
Net loss
attributable to Archrock common stockholders |
|
$ |
(0.56 |
) |
|
$ |
(0.14 |
) |
|
$ |
(1.89 |
) |
|
$ |
(0.80 |
) |
|
$ |
(1.94 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding used in income (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
69,142 |
|
|
|
69,064 |
|
|
|
68,431 |
|
|
|
68,993 |
|
|
|
68,433 |
|
|
Diluted |
|
|
69,142 |
|
|
|
69,064 |
|
|
|
68,431 |
|
|
|
68,993 |
|
|
|
68,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared and
paid per common share |
|
$ |
0.1200 |
|
|
$ |
0.0950 |
|
|
$ |
0.1500 |
|
|
$ |
0.4975 |
|
|
$ |
0.6000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Basic and diluted net loss attributable to Archrock common
stockholders per common share was computed using the two-class
method to determine the net loss per share for each class of common
stock and participating security (restricted stock and certain of
our stock settled restricted stock units) according to dividends
declared and participation rights in undistributed earnings.
Accordingly, we have excluded net income attributable to
participating securities from our calculation of basic and diluted
net loss attributable to Archrock common stockholders per common
share. |
|
|
|
ARCHROCK, INC. |
|
UNAUDITED SUPPLEMENTAL
INFORMATION |
|
(In thousands, except
percentages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Contract
operations |
|
$ |
152,017 |
|
|
$ |
156,599 |
|
|
$ |
188,954 |
|
|
$ |
647,828 |
|
|
$ |
781,166 |
|
|
Aftermarket services |
|
|
41,763 |
|
|
|
39,250 |
|
|
|
52,356 |
|
|
|
159,241 |
|
|
|
216,942 |
|
|
|
|
$ |
193,780 |
|
|
$ |
195,849 |
|
|
$ |
241,310 |
|
|
$ |
807,069 |
|
|
$ |
998,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin (1): |
|
|
|
|
|
|
|
|
|
|
|
Contract
operations |
|
$ |
91,798 |
|
|
$ |
96,823 |
|
|
$ |
111,380 |
|
|
$ |
400,788 |
|
|
$ |
461,765 |
|
|
Aftermarket services |
|
|
6,349 |
|
|
|
6,500 |
|
|
|
8,769 |
|
|
|
26,362 |
|
|
|
41,297 |
|
|
Total |
|
$ |
98,147 |
|
|
$ |
103,323 |
|
|
$ |
120,149 |
|
|
$ |
427,150 |
|
|
$ |
503,062 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and
Administrative |
|
$ |
26,725 |
|
|
$ |
25,448 |
|
|
$ |
35,373 |
|
|
$ |
114,470 |
|
|
$ |
131,919 |
|
|
% of
revenue |
|
|
14 |
% |
|
|
13 |
% |
|
|
15 |
% |
|
|
14 |
% |
|
|
13 |
% |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
EBITDA, as adjusted
(1) |
|
$ |
75,171 |
|
|
$ |
80,407 |
|
|
$ |
85,978 |
|
|
$ |
318,849 |
|
|
$ |
373,222 |
|
|
% of
revenue |
|
|
39 |
% |
|
|
41 |
% |
|
|
36 |
% |
|
|
40 |
% |
|
|
37 |
% |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Gross Margin
Percentage: |
|
|
|
|
|
|
|
|
|
|
|
Contract
operations |
|
|
60 |
% |
|
|
62 |
% |
|
|
59 |
% |
|
|
62 |
% |
|
|
59 |
% |
|
Aftermarket services |
|
|
15 |
% |
|
|
17 |
% |
|
|
17 |
% |
|
|
17 |
% |
|
|
19 |
% |
|
Total |
|
|
51 |
% |
|
|
53 |
% |
|
|
50 |
% |
|
|
53 |
% |
|
|
50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Available
Horsepower (at period end) (2) |
|
|
3,819 |
|
|
|
3,984 |
|
|
|
4,011 |
|
|
|
3,819 |
|
|
|
4,011 |
|
|
Total Operating
Horsepower (at period end) (3) |
|
|
3,115 |
|
|
|
3,153 |
|
|
|
3,493 |
|
|
|
3,115 |
|
|
|
3,493 |
|
|
Average Operating
Horsepower |
|
|
3,138 |
|
|
|
3,151 |
|
|
|
3,535 |
|
|
|
3,234 |
|
|
|
3,620 |
|
|
Horsepower Utilization
(at period end) |
|
|
82 |
% |
|
|
79 |
% |
|
|
87 |
% |
|
|
82 |
% |
|
|
87 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet: |
|
|
|
|
|
|
|
|
|
|
|
Debt -
Parent level |
|
$ |
99,000 |
|
|
$ |
101,000 |
|
|
$ |
166,500 |
|
|
$ |
99,000 |
|
|
$ |
166,500 |
|
|
Debt -
Archrock Partners, L.P., net |
|
|
1,342,724 |
|
|
|
1,370,382 |
|
|
|
1,410,382 |
|
|
|
1,342,724 |
|
|
|
1,410,382 |
|
|
Total
consolidated debt (4), net |
|
$ |
1,441,724 |
|
|
$ |
1,471,382 |
|
|
$ |
1,576,882 |
|
|
$ |
1,441,724 |
|
|
$ |
1,576,882 |
|
|
Archrock
stockholders' equity |
|
$ |
718,966 |
|
|
$ |
745,493 |
|
|
$ |
733,910 |
|
|
$ |
718,966 |
|
|
$ |
733,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Management believes gross margin and EBITDA, as adjusted provide
useful information to investors because these non-GAAP measures,
when viewed with our GAAP results and accompanying reconciliations,
provide a more complete understanding of our performance than GAAP
results alone. Management uses these non-GAAP measures as
supplemental measures to review current period operating
performance, comparability measures and performance measures for
period to period comparisons. |
|
|
|
(2)
Available horsepower is defined as idle and operating horsepower.
New units completed by a third party manufacturer that have been
delivered to us are included in the fleet. |
|
|
|
(3)
Operating horsepower is defined as horsepower that is operating
under contract and horsepower that is idle but under contract and
generating revenue such as standby revenue. |
|
|
|
(4)
Carrying values are shown net of unamortized debt discounts and
unamortized deferred financing costs. |
|
|
|
ARCHROCK, INC. |
UNAUDITED SUPPLEMENTAL
INFORMATION |
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP Financial Information: |
|
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(46,079 |
) |
|
$ |
(10,054 |
) |
|
$ |
(142,830 |
) |
|
$ |
(65,243 |
) |
|
$ |
(125,697 |
) |
Less:
Income (loss) from discontinued operations, net of tax |
|
|
(384 |
) |
|
|
(16 |
) |
|
|
9,107 |
|
|
|
(426 |
) |
|
|
33,677 |
|
Loss from
continuing operations |
|
|
(45,695 |
) |
|
|
(10,038 |
) |
|
|
(151,937 |
) |
|
|
(64,817 |
) |
|
|
(159,374 |
) |
Depreciation and amortization |
|
|
51,095 |
|
|
|
52,068 |
|
|
|
56,488 |
|
|
|
208,986 |
|
|
|
229,127 |
|
Long-lived asset impairment |
|
|
47,054 |
|
|
|
16,713 |
|
|
|
87,383 |
|
|
|
87,435 |
|
|
|
124,979 |
|
Restatement charges |
|
|
12,610 |
|
|
|
426 |
|
|
|
— |
|
|
|
13,470 |
|
|
|
— |
|
Restructuring and other charges |
|
|
1,143 |
|
|
|
4,689 |
|
|
|
3,263 |
|
|
|
16,901 |
|
|
|
4,745 |
|
Goodwill
impairment |
|
|
— |
|
|
|
— |
|
|
|
3,738 |
|
|
|
— |
|
|
|
3,738 |
|
Interest
expense |
|
|
21,057 |
|
|
|
21,365 |
|
|
|
24,751 |
|
|
|
83,899 |
|
|
|
107,617 |
|
Tax
indemnification (income) expense, net |
|
|
(201 |
) |
|
|
62 |
|
|
|
— |
|
|
|
(2,593 |
) |
|
|
— |
|
Expensed
acquisitions costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
172 |
|
|
|
Debt
extinguishment costs |
|
|
— |
|
|
|
— |
|
|
|
9,201 |
|
|
|
— |
|
|
|
9,201 |
|
Provision
for (benefit from) income taxes |
|
|
(11,892 |
) |
|
|
(4,878 |
) |
|
|
53,091 |
|
|
|
(24,604 |
) |
|
|
53,189 |
|
EBITDA,
as adjusted (1) |
|
|
75,171 |
|
|
|
80,407 |
|
|
|
85,978 |
|
|
|
318,849 |
|
|
|
373,222 |
|
Selling,
general and administrative |
|
|
26,725 |
|
|
|
25,448 |
|
|
|
35,373 |
|
|
|
114,470 |
|
|
|
131,919 |
|
Tax
indemnification (income) expense, net |
|
|
201 |
|
|
|
(62 |
) |
|
|
— |
|
|
|
2,593 |
|
|
|
— |
|
Expensed
acquisitions costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(172 |
) |
|
|
— |
|
Other
income, net |
|
|
(3,950 |
) |
|
|
(2,470 |
) |
|
|
(1,202 |
) |
|
|
(8,590 |
) |
|
|
(2,079 |
) |
Gross
Margin (1) |
|
$ |
98,147 |
|
|
$ |
103,323 |
|
|
$ |
120,149 |
|
|
$ |
427,150 |
|
|
$ |
503,062 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to Archrock stockholders |
|
$ |
(38,611 |
) |
|
$ |
(9,648 |
) |
|
|
(129,490 |
) |
|
|
(54,555 |
) |
|
|
(132,549 |
) |
(Income)
loss from discontinued operations, net of tax |
|
|
384 |
|
|
|
16 |
|
|
|
(9,107 |
) |
|
|
426 |
|
|
|
(33,677 |
) |
Federal
& state tax credit write-off and valuation allowance |
|
|
— |
|
|
|
— |
|
|
|
6,468 |
|
|
|
— |
|
|
|
6,468 |
|
Foreign
tax credit write-off and valuation allowance |
|
|
— |
|
|
|
— |
|
|
|
86,003 |
|
|
|
— |
|
|
|
86,003 |
|
Items,
after-tax: |
|
|
|
|
|
|
|
|
|
|
Long-lived asset impairment |
|
|
47,054 |
|
|
|
16,713 |
|
|
|
87,383 |
|
|
|
87,435 |
|
|
|
124,979 |
|
Restatement charges |
|
|
12,610 |
|
|
|
426 |
|
|
|
— |
|
|
|
13,470 |
|
|
|
— |
|
Restructuring and other charges |
|
|
1,143 |
|
|
|
4,689 |
|
|
|
3,263 |
|
|
|
16,901 |
|
|
|
4,745 |
|
Tax
indemnification (income) expense, net |
|
|
(201 |
) |
|
|
62 |
|
|
|
— |
|
|
|
(2,593 |
) |
|
|
— |
|
Goodwill
impairment |
|
|
— |
|
|
|
— |
|
|
|
3,738 |
|
|
|
— |
|
|
|
3,738 |
|
Debt
extinguishment costs |
|
|
— |
|
|
|
— |
|
|
|
9,201 |
|
|
|
— |
|
|
|
9,201 |
|
Noncontrolling interest |
|
|
(13,566 |
) |
|
|
(5,865 |
) |
|
|
(17,942 |
) |
|
|
(31,625 |
) |
|
|
(26,013 |
) |
Tax
effect on items (2) |
|
|
(12,928 |
) |
|
|
(5,906 |
) |
|
|
(31,689 |
) |
|
|
(27,400 |
) |
|
|
(43,274 |
) |
Expensed
acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
172 |
|
|
|
302 |
|
Net
income (loss) from continuing operations attributable to Archrock
stockholders, excluding items |
|
$ |
(4,115 |
) |
|
$ |
487 |
|
|
$ |
7,828 |
|
|
$ |
2,231 |
|
|
$ |
(77 |
) |
|
|
|
|
|
|
|
|
|
|
|
Diluted
loss from continuing operations attributable to Archrock common
stockholders |
|
$ |
(0.56 |
) |
|
$ |
(0.14 |
) |
|
$ |
(2.03 |
) |
|
$ |
(0.79 |
) |
|
$ |
(2.44 |
) |
Adjustment for items, after-tax, per common share (3) |
|
|
0.50 |
|
|
|
0.15 |
|
|
|
2.11 |
|
|
|
0.81 |
|
|
|
2.43 |
|
Diluted
net income (loss) from continuing operations attributable to
Archrock common stockholders per common share, excluding items
(1)(3) |
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
|
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
(1) Management believes EBITDA, as adjusted, gross
margin and diluted net income (loss) from continuing operations
attributable to Archrock common stockholders per common share,
excluding items provides useful information to investors because
these non-GAAP measures, when viewed with our GAAP results and
accompanying reconciliation, provides a more complete understanding
of our performance than GAAP results alone. Management uses
these non-GAAP measures as supplemental measures to review current
period operating performance, comparability measures and
performance measures for period to period comparisons. |
|
(2) The
tax effect is computed by applying the appropriate tax rate to each
adjustment and then allocating the tax impact between controlling
and non-controlling interests. |
|
(3)
Diluted net income (loss) from continuing operations attributable
to Archrock common stockholders per common share, excluding items,
was computed using the two-class method to determine the net income
(loss) per share for each class of common stock and participating
security (restricted stock and certain of our stock settled
restricted stock units) according to dividends declared and
participation rights in undistributed earnings. Accordingly, we
have excluded net income from continuing operations attributable to
participating securities, excluding items, of $0.2 million, $0.1
million, and $2.1 million for the three months ended December 31,
2016, September 30, 2016 and December 31, 2015, respectively, and
$0.6 million and $0.5 million for the years ended December 31, 2016
and 2015, respectively, from our calculation of diluted net income
(loss) from continuing operations attributable to Exterran common
stockholders per common share, excluding items. |
|
ARCHROCK, INC. |
UNAUDITED SUPPLEMENTAL
INFORMATION |
(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
|
2016 |
|
2016 |
|
2015 |
|
2016 |
|
|
|
|
|
|
|
|
|
Reconciliation
of Archrock, Inc. Net Loss from Continuing Operations to Cash
Available for Dividend |
|
|
|
|
|
|
|
|
Net loss
from continuing operations |
|
$ |
(45,695 |
) |
|
$ |
(10,038 |
) |
|
$ |
(151,937 |
) |
|
$ |
(64,817 |
) |
Less:
Archrock Partners net loss, excluding goodwill impairment |
|
|
(14,021 |
) |
|
|
(567 |
) |
|
|
(10,178 |
) |
|
|
(10,757 |
) |
Deconsolidated net loss from continuing operations |
|
|
(31,674 |
) |
|
|
(9,471 |
) |
|
|
(141,759 |
) |
|
|
(54,060 |
) |
Declared
LP distributions to Archrock, Inc. |
|
|
8,283 |
|
|
|
6,721 |
|
|
|
13,501 |
|
|
|
28,446 |
|
Declared
GP and IDR distributions to Archrock, Inc. |
|
|
378 |
|
|
|
346 |
|
|
|
5,445 |
|
|
|
1,417 |
|
Goodwill
impairment |
|
|
— |
|
|
|
— |
|
|
|
3,738 |
|
|
|
— |
|
Debt
extinguishment costs |
|
|
— |
|
|
|
— |
|
|
|
9,201 |
|
|
|
— |
|
Deconsolidated items: |
|
|
|
|
|
|
|
|
Restatement Charges |
|
|
12,610 |
|
|
|
426 |
|
|
|
— |
|
|
|
13,470 |
|
Restructuring and other charges |
|
|
1,127 |
|
|
|
2,743 |
|
|
|
3,263 |
|
|
|
9,592 |
|
Depreciation and amortization |
|
|
13,305 |
|
|
|
13,981 |
|
|
|
16,556 |
|
|
|
55,245 |
|
Provision
for (benefit) from income taxes |
|
|
(12,835 |
) |
|
|
(5,066 |
) |
|
|
52,758 |
|
|
|
(26,016 |
) |
Cash tax
refund |
|
|
115 |
|
|
|
— |
|
|
|
10 |
|
|
|
3,920 |
|
Maintenance and other capital expenditures |
|
|
(2,716 |
) |
|
|
(486 |
) |
|
|
(11,612 |
) |
|
|
(15,026 |
) |
Long-lived asset impairment |
|
|
23,303 |
|
|
|
8,804 |
|
|
|
60,869 |
|
|
|
41,177 |
|
Non-cash
selling, general and administrative expense |
|
|
1,463 |
|
|
|
1,580 |
|
|
|
3,123 |
|
|
|
7,766 |
|
Non-cash
interest expense |
|
|
486 |
|
|
|
512 |
|
|
|
1,094 |
|
|
|
2,021 |
|
Gain on
sale of property, plant and equipment |
|
|
(968 |
) |
|
|
(1,267 |
) |
|
|
(351 |
) |
|
|
(2,414 |
) |
Other
income, net |
|
|
(1,336 |
) |
|
|
(1,580 |
) |
|
|
(929 |
) |
|
|
(5,996 |
) |
Cash Available for Dividend
(1) |
|
$ |
11,541 |
|
|
$ |
17,243 |
|
|
$ |
14,907 |
|
|
$ |
59,542 |
|
|
|
|
|
|
|
|
|
|
Dividend
declared for the period per share |
|
$ |
0.1200 |
|
|
$ |
0.1200 |
|
|
$ |
0.1875 |
|
|
$ |
0.4300 |
|
Dividend
declared for the period to all shareholders |
|
$ |
8,495 |
|
|
$ |
8,459 |
|
|
$ |
13,052 |
|
|
$ |
30,363 |
|
Cash
available for dividend coverage (2) |
|
1.36x |
|
2.04x |
|
1.14x |
|
1.96x |
|
|
|
|
|
|
|
|
|
Archrock, Inc.
Cash Available for Dividend |
|
|
|
|
|
|
|
|
Declared
LP distributions to Archrock, Inc. |
|
$ |
8,283 |
|
|
$ |
6,721 |
|
|
$ |
13,501 |
|
|
$ |
28,446 |
|
Declared
GP and IDR distributions to Archrock Inc. |
|
|
378 |
|
|
|
346 |
|
|
|
5,445 |
|
|
|
1,417 |
|
Total
distributions received |
|
|
8,661 |
|
|
|
7,067 |
|
|
|
18,946 |
|
|
|
29,863 |
|
Deconsolidated items: |
|
|
|
|
|
|
|
|
Contract
operations gross margin (1) (3) |
|
|
7,779 |
|
|
|
12,199 |
|
|
|
13,466 |
|
|
|
47,839 |
|
Aftermarket services gross margin (1) (3) |
|
|
6,349 |
|
|
|
6,500 |
|
|
|
8,769 |
|
|
|
26,362 |
|
Selling,
general and administrative |
|
|
(8,345 |
) |
|
|
(7,531 |
) |
|
|
(12,406 |
) |
|
|
(34,753 |
) |
Non-cash
selling, general and administrative |
|
|
1,463 |
|
|
|
1,580 |
|
|
|
3,123 |
|
|
|
7,766 |
|
Maintenance and other capital expenditures |
|
|
(2,716 |
) |
|
|
(486 |
) |
|
|
(11,612 |
) |
|
|
(15,026 |
) |
Cash
interest expense |
|
|
(797 |
) |
|
|
(819 |
) |
|
|
(5,038 |
) |
|
|
(4,015 |
) |
Gain on
sale of property, plant and equipment |
|
|
(968 |
) |
|
|
(1,267 |
) |
|
|
(351 |
) |
|
|
(2,414 |
) |
Cash tax
refund |
|
|
115 |
|
|
|
— |
|
|
|
10 |
|
|
|
3,920 |
|
Cash Available for Dividend
(1) |
|
$ |
11,541 |
|
|
$ |
17,243 |
|
|
$ |
14,907 |
|
|
$ |
59,542 |
|
|
|
|
|
|
|
|
|
|
Dividend
declared for the period per share |
|
$ |
0.1200 |
|
|
$ |
0.1200 |
|
|
$ |
0.1875 |
|
|
$ |
0.4300 |
|
Dividend
declared for the period to all shareholders |
|
$ |
8,495 |
|
|
$ |
8,459 |
|
|
$ |
13,052 |
|
|
$ |
30,363 |
|
Cash
available for dividend coverage (2) |
|
1.36x |
|
2.04x |
|
1.14x |
|
1.96x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cash
available for dividend, a non-GAAP measure, is defined as
distributions received by us from Archrock Partners, L.P., plus our
deconsolidated gross margin, less the following deconsolidated
items: maintenance and other capital expenditures, cash selling,
general and administrative expense, cash interest expense
associated with our debt, cash taxes and (gain) loss on sale of
property, plant and equipment. Management uses cash available for
dividend, as a supplemental performance measure. Using this metric,
management can quickly compute the coverage ratio of estimated cash
flows to planned dividends. |
|
(2) Defined as cash available for dividend for the
period divided by dividend declared for the period to all
shareholders. |
|
(3) Management believes gross margin provides useful
information to investors because this non-GAAP measure, when viewed
with our GAAP results and accompanying reconciliations, provide a
more complete understanding of our performance than GAAP results
alone. Management uses this non-GAAP measures as a
supplemental measure to review current period operating
performance, comparability measures and performance measures for
period to period comparisons. |
For information, contact:
David Skipper, 281-836-8155
Archrock (NYSE:AROC)
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