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 USA Compression Partners, LP Reports Fourth Quarter and Full-Year 2014 Results; Achieves Record Revenues, Adjusted EBITDA and Adjusted Distributable Cash Flow; Provides 2015 Outlook
   Tuesday, February 17, 2015 6:00:21 AM ET

USA Compression Partners, LP (USAC ) ("USA Compression" or the "Partnership"), announced today its financial and operating results for the fourth quarter and full-year 2014.

Fourth Quarter and Full-Year 2014 Summary Results

-- Record levels of revenues; fourth quarter 2014 up 25.4% over fourth quarter 2013 and full-year 2014 up 44.9% over full-year 2013

-- Record levels of Adjusted EBITDA; fourth quarter 2014 up 29.9% over fourth quarter 2013 and full-year 2014 up 41.0% over full-year 2013

-- Record levels of adjusted distributable cash flow; fourth quarter 2014 up 38.7% over fourth quarter 2013 and full-year 2014 up 52.9% over full-year 2013

-- Fourth quarter 2014 quarterly cash distribution of $0.51 per common unit, an increase of 6.3% over fourth quarter 2013

-- Fleet horsepower for fourth quarter 2014 increased by 28.8% over fourth quarter 2013

-- Average revenue generating horsepower for fourth quarter 2014 increased 25.2% over fourth quarter 2013

-- Adjusted distributable cash flow coverage of 1.11x for the fourth quarter 2014

-- Cash coverage of 2.70x for fourth quarter 2014

                                                                                                                                                                
                                                                                                                                       Three Months Ended                                                                                                           Year Ended
                                                                                             ------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------
                                                                                                 December 31,          September 30,         December 31,                                                                    December 31,
                                                                                                     2014                                     2014                                     2013                                                       2014               2013
                                                                                             --------------------                     --------------------                     --------------------                                          ---------------------------------- ---------------------
Operational Data                                                                                                                                                                                                                                            
--------------------------------------------------
Fleet Horsepower at period end                                                                    1,549,020                                1,452,833                                1,202,374                                                  1,549,020                               1,202,374
Revenue Generating Horsepower at period end                                                       1,351,052                                1,259,387                                1,070,457                                                  1,351,052                               1,070,457
Average Revenue Generating Horsepower                                                             1,324,983                                1,224,938                                1,058,213                                                  1,200,851                                 902,168
Revenue Generating Compression Units at period end                                                    2,651                                    2,488                                    2,137                                                      2,651                                   2,137
Horsepower Utilization at period end(1)                                                                93.6 %                                   93.5 %                                   94.1 %                                                     93.6 %                                  94.1 %
Average Horsepower Utilization for the period(1)                                                       93.3 %                                   94.0 %                                   94.2 %                                                     94.0 %                                  93.8 %
                                                                                                                                                                                                                                                                                 
Financial Data ($ in thousands, except per
horsepower)
--------------------------------------------------
Revenue                                                                                         $    60,995                              $    57,045                              $    48,643                                                $   221,509                             $   152,918
Average Revenue Per Horsepower Per Month(2)                                                     $     15.82                              $     15.67                              $     15.36                                                $     15.57                             $     14.15
Gross Operating Margin                                                                          $    42,105                              $    37,615                              $    33,019                                                $   147,474                             $   104,821
Gross Operating Margin Percentage                                                                      69.0 %                                   65.9 %                                   67.9 %                                                     66.6 %                                  68.5 %
Adjusted EBITDA                                                                                 $    33,024                              $    29,327                              $    25,413                                                $   114,409                             $    81,130
Adjusted EBITDA Percentage                                                                             54.1 %                                   51.4 %                                   52.2 %                                                     51.6 %                                  53.1 %
Adjusted Distributable Cash Flow                                                                $    26,275                              $    22,955                              $    18,943                                                $    85,927                             $    56,210
(1)     Horsepower utilization is calculated as (i)(a) revenue generating
                                              horsepower plus (b) horsepower in the Partnership’s fleet that is
                                              under contract, but is not yet generating revenue plus (c)
                                              horsepower not yet in the Partnership’s fleet that is under contract
                                              not yet generating revenue and that is subject to a purchase order,
                                              divided by (ii) total available horsepower less idle horsepower that
                                              is under repair. Horsepower utilization based on revenue generating
                                              horsepower and fleet horsepower at each applicable period end was
                                              87.2%, 86.7% and 89.0% for the quarters ended December 31, 2014,
                                              September 30, 2014 and December 31, 2013, respectively. Average
                                              horsepower utilization was 87.0%, 87.5% and 89.0% for the quarters
                                              ended December 31, 2014, September 30, 2014 and December 31, 2013,
                                              respectively, and 87.3% for the years ended December 31, 2014 and
                                              2013.
                                               
(2)                                           Calculated using average revenue generating horsepower.
                                               

Fourth Quarter 2014 Financial and Operating Performance

Revenues in the fourth quarter of 2014 rose 25.4% to $61.0 million as compared to $48.6 million for the same period in 2013. This was primarily the result of a 26.7% increase in contract operations revenues (excluding retail parts and services) to $60.0 million in the fourth quarter of 2014, compared to $47.4 million in the fourth quarter of 2013. This increase was driven primarily by organic growth in revenue generating horsepower. Adjusted EBITDA rose 29.9% to $33.0 million in the fourth quarter of 2014 as compared to $25.4 million for the fourth quarter of 2013. Adjusted distributable cash flow increased 38.7% to $26.3 million in the fourth quarter of 2014, compared to $18.9 million in the fourth quarter of last year. Net income was $8.5 million in the fourth quarter of 2014, compared with net income of $4.4 million for the fourth quarter of 2013.

"We are reporting another quarter of record revenues, adjusted EBITDA and adjusted distributable cash flow for the fourth quarter of 2014," said Eric D. Long, USA Compression’s President and Chief Executive Officer. "As a result of our solid performance, we announced our seventh consecutive quarterly distribution increase since our IPO, to $0.51 for the fourth quarter of 2014.

"We have, at this time, ordered approximately 230,000 horsepower of new compression units for delivery in 2015, which primarily will be delivered over the first three quarters of 2015," he said. "In addition to the stability of our current operations, the Partnership is experiencing solid demand for new compression units to be delivered throughout 2015."

Average revenue generating horsepower increased 25.2% to 1,324,983 for the fourth quarter of 2014 as compared to 1,058,213 for the fourth quarter of 2013, primarily due to organic growth across our compression fleet. Average revenue per revenue generating horsepower per month increased 3.0% to $15.82 for the fourth quarter of 2014 as compared to $15.36 for the fourth quarter of 2013.

Gross operating margin increased 27.5% to $42.1 million for the fourth quarter of 2014 as compared to $33.0 million for the fourth quarter of 2013. Gross operating margin as a percentage of total revenues increased to 69.0% for the fourth quarter of 2014 from 67.9% in the fourth quarter of 2013.

Expansion capital expenditures (used primarily to purchase new compression units) were $109.3 million, maintenance capital expenditures totaled $3.4 million and cash interest expense, net was $3.0 million for the fourth quarter of 2014.

On January 22, 2015, the Partnership announced a cash distribution of $0.51 per unit on its common and subordinated units. This fourth quarter distribution corresponds to an annualized distribution rate of $2.04 per unit. The distribution was paid on February 13, 2015 to unitholders of record as of the close of business on February 3, 2015. USA Compression Holdings, LLC, the owner of 42.0% of the Partnership’s outstanding limited partnership units, and Argonaut Private Equity, L.L.C. and certain other related unitholders, the owners of 16.3% of the Partnership’s outstanding limited partnership units, elected to reinvest all of this distribution with respect to their units pursuant to the Partnership’s Distribution Reinvestment Plan. Adjusted distributable cash flow coverage for the fourth quarter of 2014 was 1.11x and the cash coverage ratio was 2.70x.

Liquidity and Credit Facility

On January 6, 2015, the Partnership closed the Second Amendment to its Fifth Amended and Restated Credit Agreement (the "revolving credit facility"). The amendment provided for an increase in the facility capacity from $850 million to $1.1 billion and an extension of the maturity to 2020. The revolving credit facility contains an accordion feature whereby it can be expanded to $1.3 billion under certain conditions. In addition, the amendment also provided additional flexibility under the financial covenants. As of December 31, 2014, the outstanding balance under the revolving credit facility was approximately $595 million, compared to approximately $510 million as of September 30, 2014.

Full-Year 2015 Outlook

USA Compression is providing the following full-year 2015 guidance:

-- Adjusted EBITDA range of $130.0 million to $140.0 million;

-- distributable cash flow range of $91.3 million to $102.3 million; and

-- expansion capital expenditures range of $250 million to $270 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 its fourth quarter 2014 performance. The call will be broadcast live over the Internet. Investors may participate either by phone or audio webcast.

By Phone:       Dial 888-523-1228 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
                                                      719-325-2244. The conference ID for both is 6085302.
                                                       
                                                      A replay of the call will be available through February 28, 2015.
                                                      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 passcode for both is 6085302.
                                                       
By Webcast:                                           Connect to the webcast via the "Events" page of USA Compression’s
                                                      Investor Relations website at http://investors.usacpartners.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 compression services in terms of total compression fleet horsepower. The company partners with a broad customer base composed of producers, processors, gatherers and transporters of natural gas and crude oil. USA Compression focuses on providing compression services to infrastructure applications primarily in high-volume gathering systems, processing facilities and transportation applications. More information is available at www.usacpartners.com.

This news release includes the non-GAAP financial measures of Adjusted EBITDA, gross operating margin, distributable cash flow and adjusted distributable cash flow.

The Partnership’s management views Adjusted EBITDA as one of its primary financial measures in evaluating the results of the Partnership’s business, 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 and prior year, and to budget. Adjusted EBITDA is defined as EBITDA plus impairment of compression equipment, interest income, unit-based compensation expense, loss (gain) on sale of assets and transaction expenses. Adjusted EBITDA is used as a supplemental financial measure by the Partnership’s 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 to make 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.

The Partnership 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. The Partnership 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, operating income, 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, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies.

Gross operating margin, a non-GAAP financial measure, is defined as revenues less cost of operations, exclusive of depreciation and amortization expense. The Partnership’s management believes that gross operating margin is useful as a supplemental measure of the Partnership’s operating profitability. Gross operating 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. Gross operating margin should not be considered an alternative to, or more meaningful than, operating income or any other measure of financial performance presented in accordance with GAAP. Moreover, gross operating 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 gross operating margin as a measure of the Partnership’s performance, the Partnership’s management believes that it is important to consider operating income determined under GAAP, as well as gross operating margin, to evaluate the Partnership’s operating profitability.

Distributable cash flow, a non-GAAP measure, is defined as net income plus non-cash interest expense, depreciation and amortization expense, unit-based compensation expense and impairment of compression equipment, less maintenance capital expenditures. Adjusted distributable cash flow is distributable cash flow plus certain transaction fees and loss (gain) on sale of equipment. The Partnership’s management believes distributable cash flow and adjusted distributable cash flow are important measures of operating performance because such measures allow management, investors and others to compare basic cash flows the Partnership generates (prior to the establishment of any retained cash reserves by the Partnership’s general partner and the effect of the Partnership’s Distribution Reinvestment Plan) to the cash distributions the Partnership expects to pay its unitholders.

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 2015 fiscal year. A reconciliation of Adjusted EBITDA and distributable cash flow to 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 amounts, 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.

See "Reconciliation of Non-GAAP Financial Measures" for Adjusted EBITDA reconciled to net income and net cash provided by operating activities, and net income reconciled to distributable cash flow and adjusted distributable cash flow.

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," or other similar words, and include the Partnership’s expectation of future performance contained herein, including as described under "Full-Year 2015 Outlook." These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other "forward-looking" information. These forward-looking statements 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 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. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this news release. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Known material factors that could cause the Partnership’s actual results to differ materially from the results contemplated by such forward-looking statements are 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, 2014, which it expects to file on or before the filing deadline, and include:

-- changes in general economic conditions and changes in economic conditions of the crude oil and natural gas industry specifically;

-- competitive conditions in the industry;

-- changes in the long-term supply of and demand for natural gas and crude oil;

-- our ability to realize the anticipated benefits of acquisitions and to integrate the acquired assets with our existing fleet;

-- actions taken by the Partnership’s customers, competitors and third-party operators;

-- changes in the availability and cost of capital;

-- operating hazards, natural disasters, weather related delays, casualty losses and other matters beyond the Partnership’s control;

-- the effects of existing and future laws and governmental regulations;

-- the effects of future litigation; and

-- other factors discussed in the Partnership’s filings with the Securities and Exchange Commission.

All forward-looking statements 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 AND SUBSIDIARIES
                                                                                                                                                                                                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                                                                                                                                 (In thousands, except for unit amounts - Unaudited)
                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                           Three Months Ended                                                                                                                                                                                                Years Ended
                                                                                                                ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          -------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    December 31,                                           September 30,                                          December 31,                                                                                   December 31,                                           December 31,
                                                                                                                                        2014                                                                      2014                                                                      2013                                                                                           2014                                                                      2013
                                                                                                                -----------------------------------------------------                     -----------------------------------------------------                     -----------------------------------------------------                                          -----------------------------------------------------                     -----------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Revenues:
     Contract operations                                                                                                           $     60,045                                                              $     55,293                                                              $     47,395                                                                                   $    217,361                                                              $    150,360
     Parts and service                                                                                                   950                               1,752                               1,248                                                    4,148                               2,558  
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
          Total revenues                                                                                                                 60,995                                                                    57,045                                                                    48,643                                                                                        221,509                                                                   152,918
Cost of operations, exclusive of depreciation and amortization                                                        18,890                              19,430                              15,624                                                   74,035                              48,097  
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
          Gross operating margin                                                                                                         42,105                                                                    37,615                                                                    33,019                                                                                        147,474                                                                   104,821
Other operating and administrative costs and expenses:
     Selling, general and administrative                                                                                                  9,620                                                                    10,443                                                                     8,830                                                                                         38,718                                                                    27,587
     Depreciation and amortization                                                                                                       19,631                                                                    18,261                                                                    15,690                                                                                         71,156                                                                    52,917
     Loss (Gain) on sale of assets                                                                                                           (4 )                                                                      63                                                                       231                                                                                         (2,233 )                                                                     284
     Impairment of compression equipment                                                                               1,102                               1,163                                 203                                                    2,266                                 203  
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
          Total other operating and administrative costs and expenses                                                 30,349                              29,930                              24,954                                                  109,907                              80,991  
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
          Operating income                                                                                                               11,756                                                                     7,685                                                                     8,065                                                                                         37,567                                                                    23,830
Other Income (Expense)
     Interest expense                                                                                                                    (3,260 )                                                                  (2,677 )                                                                  (3,525 )                                                                                      (12,529 )                                                                 (12,488 )
     Other                                                                                                                 5                                   5                                   1                                                       11                                   9  
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
          Total other expense                                                                                         (3,255 )                                               (2,672 )                                               (3,524 )                                                                   (12,518 )                                              (12,479 )
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
Net income before income tax expense                                                                                                      8,501                                                                     5,013                                                                     4,541                                                                                         25,049                                                                    11,351
Income tax expense                                                                                                         -                                   -                                 104                                                      103                                 280  
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
Net Income                                                                                                                         $      8,501                                           $      5,013                                           $      4,437                                                                $     24,946                                           $     11,071  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Less:
Earnings allocated to general partner prior to initial public                                                                      $          -                                                              $          -                                                              $          -                                                                                   $          -                                                              $          5
offering on January 18, 2013
Earnings available for limited partners prior to initial public                                                                    $          -                                           $          -                                           $          -                                                                $          -                                           $        530  
offering on January 18, 2013
                                                                                                                -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                      -------------------- ---------- --------------------
Net income subsequent to initial public offering on January 18, 2013                                                               $      8,501                                           $      5,013                                           $      4,437                                                                $     24,946                                           $     10,536  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net Income subsequent to initial public offering allocated to:
     General partner’s interest in net income                                                                                      $        288                                                              $        194                                                              $         89                                                                                   $        760                                                              $        211
     Common units interest in net income                                                                                           $      5,698                                                              $      3,338                                                              $      2,714                                                                                   $     16,811                                                              $      5,805
     Subordinated units interest in net income                                                                                     $      2,515                                                              $      1,481                                                              $      1,634                                                                                   $      7,375                                                              $      4,520
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Weighted average common units outstanding:
   Basic                                                                                                          31,022,878                          30,460,239                          23,330,238                                               28,087,498                          18,043,075  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
   Diluted                                                                                                        31,063,948                          30,517,689                          23,409,476                                               28,146,446                          18,086,745  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Weighted average subordinated units outstanding:
   Basic and diluted                                                                                              14,048,588                          14,048,588                          14,048,588                                               14,048,588                          14,048,588  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net income per common unit:
   Basic                                                                                                                           $       0.18                                           $       0.11                                           $       0.12                                                                $       0.60                                           $       0.32  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
   Diluted                                                                                                                         $       0.18                                           $       0.11                                           $       0.12                                                                $       0.60                                           $       0.32  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Net income per subordinated unit:
   Basic and diluted                                                                                                               $       0.18                                           $       0.11                                           $       0.12                                                                $       0.52                                           $       0.32  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                              
Distributions declared per limited partner unit in respective periods                                                              $       0.51                                           $      0.505                                           $       0.48                                                                $       2.01                                           $       1.73  
                                                                                                                ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                                           ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

USA COMPRESSION PARTNERS, LP AND SUBSIDIARIES 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                                                                                                                                                 Year Ended
                                                                                ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          -------------------------------------------------------------------------------------------------------------------------
                                                                                                  December 31,                                       September 30,                                      December 31,                                                                                                                   December 31,
                                                                                                      2014                                                                  2014                                                                  2013                                                                                        2014                                                2013
                                                                                -------------------------------------------------                     -------------------------------------------------                     -------------------------------------------------                                          --------------------------------------------------                     --------------------------------------------------
Net income                                                                                         $  8,501                                                              $  5,013                                                              $  4,437                                                                                   $  24,946                                                              $  11,071
        Interest expense                                                                              3,260                                                                 2,677                                                                 3,525                                                                                      12,529                                                                 12,488
        Depreciation and amortization                                                                19,631                                                                18,261                                                                15,690                                                                                      71,156                                                                 52,917
        Income taxes                                                                   -                               -                             104                                                   103                              280  
                                                                                -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
        EBITDA                                                                                     $ 31,392                                           $ 25,951                                           $ 23,756                                                                $ 108,734                                           $  76,756  
                                                                                -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
        Impairment of compression equipment                                                           1,102                                                                 1,163                                                                   203                                                                                       2,266                                                                    203
        Interest income on capital lease                                                                439                                                                   433                                                                     -                                                                                       1,274                                                                      -
        Unit-based compensation expense(1)                                                               77                                                                   855                                                                   438                                                                                       3,034                                                                  1,343
        Riverstone management fee(2)                                                                      -                                                                     -                                                                     -                                                                                           -                                                                     49
        Transaction expenses for acquisitions(3)                                                         18                                                                   862                                                                   661                                                                                       1,299                                                                  2,142
        Loss (gain) on sale of assets and other                                       (4 )                                               63                             355                                                (2,198 )                                               637  
                                                                                -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
        Adjusted EBITDA                                                                            $ 33,024                                           $ 29,327                                           $ 25,413                                                                $ 114,409                                           $  81,130  
                                                                                -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
        Interest expense                                                                             (3,260 )                                                              (2,677 )                                                              (3,525 )                                                                                   (12,529 )                                                              (12,488 )
        Income tax expense                                                                                -                                                                     -                                                                  (104 )                                                                                      (103 )                                                                 (280 )
        Interest income on capital lease                                                               (439 )                                                                (433 )                                                                   -                                                                                      (1,274 )                                                                    -
        Riverstone management fee                                                                         -                                                                     -                                                                     -                                                                                           -                                                                    (49 )
        Transaction expenses for acquisitions                                                           (18 )                                                                (862 )                                                                (661 )                                                                                    (1,299 )                                                               (2,142 )
        Amortization of deferred financing costs and other                                              307                                                                    43                                                                   672                                                                                       1,189                                                                  1,840
        Changes in operating assets and liabilities                                1,676                          13,534                           4,717                                                 1,498                              180  
                                                                                -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
        Net cash provided by operating activities                                                  $ 31,290                                           $ 38,932                                           $ 26,512                                                                $ 101,891                                           $  68,190  
                                                                                ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
(1)     For the quarters ended December 31, 2014 and September 30, 2014,
                                              unit-based compensation expense included $0.2 million of cash
                                              payments related to quarterly payments of distribution equivalent
                                              rights on outstanding phantom unit awards. For the year ended
                                              December 31, 2014, unit-based compensation expense included $0.5
                                              million of cash payments related to quarterly payments of
                                              distribution equivalent rights on outstanding phantom unit awards
                                              and $0.3 million related to the cash portion of any settlement of
                                              phantom unit awards upon vesting. The remainder of the unit-based
                                              compensation expense for 2014 is related to non-cash adjustments to
                                              the unit-based compensation liability, and for 2013 to the non-cash
                                              amortization of unit-based compensation in equity.
(2)                                           Represents management fees paid to Riverstone for services performed
                                              during 2013 prior to the Partnership’s initial public offering. As
                                              these fees were not paid by the Partnership as a public company, the
                                              Partnership believes it is useful to investors to view its results
                                              excluding these fees.
(3)                                           Represents certain transaction expenses related to acquisitions,
                                              potential acquisitions and other items. The Partnership believes it
                                              is useful to investors to view its results excluding these fees.
                                               
                                               

USA COMPRESSION PARTNERS, LP AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES NET INCOME TO DISTRIBUTABLE CASH FLOW, ADJUSTED DISTRIBUTABLE CASH FLOW AND NET CASH PROVIDED BY OPERATING ACTIVITIES (In thousands, except for per unit amounts - Unaudited)

The following table reconciles distributable cash flow and adjusted distributable cash flow to net income and net cash provided by operating activities, their most directly comparable GAAP financial measures, for each of the periods presented:

                                                                                                                                                      Three Months Ended                                                                                                                                                 Year Ended
                                                                                                       ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          -------------------------------------------------------------------------------------------------------------------------
                                                                                                                         December 31,                                       September 30,                                      December 31,                                                                                                                   December 31,
                                                                                                                             2014                                                                  2014                                                                  2013                                                                                        2014                                                2013
                                                                                                       -------------------------------------------------                     -------------------------------------------------                     -------------------------------------------------                                          --------------------------------------------------                     --------------------------------------------------
Net income                                                                                                                $  8,501                                                              $  5,013                                                              $  4,437                                                                                   $  24,946                                                              $  11,071
      Plus: Non-cash interest expense                                                                                          307                                                                    43                                                                   805                                                                                       1,224                                                                  2,201
      Plus: Depreciation and amortization                                                                                   19,631                                                                18,261                                                                15,690                                                                                      71,156                                                                 52,917
      Plus: Unit based compensation(1)                                                                                          77                                                                   855                                                                   438                                                                                       3,034                                                                  1,343
      Plus: Impairment of compression equipment                                                                              1,102                                                                 1,163                                                                   203                                                                                       2,266                                                                    203
      Less: Maintenance capital expenditures(2)                                                          (3,357 )                                           (3,305 )                                           (3,646 )                                                                (15,800 )                                           (14,304 )
                                                                                                       -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
Distributable cash flow                                                                                                   $ 26,261                                           $ 22,030                                           $ 17,927                                                                $  86,826                                           $  53,431  
                                                                                                       -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
Transaction expenses for acquisitions(3)                                                                                        18                                                                   862                                                                   661                                                                                       1,299                                                                  2,142
Loss (gain) on sale of equipment and other                                                                   (4 )                                               63                             355                                                (2,198 )                                               637  
                                                                                                       -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
Adjusted distributable cash flow                                                                                          $ 26,275                                           $ 22,955                                           $ 18,943                                                                $  85,927                                           $  56,210  
                                                                                                       -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
      Plus: Maintenance capital expenditures                                                                                 3,357                                                                 3,305                                                                 3,646                                                                                      15,800                                                                 14,304
      Plus: Change in operating assets and liabilities                                                                       1,676                                                                13,534                                                                 4,717                                                                                       1,498                                                                    180
      Less: Transaction expenses for acquisitions                                                                              (18 )                                                                (862 )                                                                (661 )                                                                                    (1,299 )                                                               (2,142 )
      Less: Other                                                                                             -                               -                            (133 )                                                                    (35 )                                              (362 )
                                                                                                       -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
Net cash provided by operating activities                                                                                 $ 31,290                                           $ 38,932                                           $ 26,512                                                                $ 101,891                                           $  68,190  
                                                                                                       ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      
Adjusted distributable cash flow                                                                                            26,275                                                                22,955                                                                18,943                                                                                      85,927                                                                 56,210
GP interest in adjusted distributable cash flow                                                                                546                                                                   506                                                                   368                                                                                       1,947                                                                  1,188
Pre-IPO distributable cash flow                                                                               -                               -                               -                                                     -                            2,323  
                                                                                                       -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                                           -------------------- ------- --------------------                      -------------------- ------- --------------------
Adjusted distributable cash flow attributable to LP interest                                                              $ 25,729                                           $ 22,449                                           $ 18,575                                                                $  83,980                                           $  52,699  
                                                                                                       ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      
Distributions for coverage ratio(4)                                                                                       $ 23,131                                           $ 22,606                                           $ 18,055                                                                $  85,098                                           $  55,961  
                                                                                                       ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      
Distributions reinvested in the DRIP(5)                                                                                   $ 13,600                                           $ 13,148                                           $ 12,637                                                                $  52,556                                           $  36,694  
                                                                                                       ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      
Distributions for cash coverage ratio(6)                                                                                  $  9,531                                           $  9,458                                           $  5,418                                                                $  32,542                                           $  19,267  
                                                                                                       ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      
Adjusted distributable cash flow coverage ratio                                                            1.11                            0.99                            1.03                                                  0.99                             0.94  
                                                                                                       ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      
Cash coverage ratio                                                                                        2.70                            2.37                            3.43                                                  2.58                             2.74  
                                                                                                       ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                                           ==================== ======= ====================                      ==================== ======= ====================
(1)     For the quarters ended December 31, 2014 and September 30, 2014,
                                              unit-based compensation expense included $0.2 million of cash
                                              payments related to quarterly payments of distribution equivalent
                                              rights on outstanding phantom unit awards. For the year ended
                                              December 31, 2014, unit-based compensation expense included $0.5
                                              million of cash payments related to quarterly payments of
                                              distribution equivalent rights on outstanding phantom unit awards
                                              and $0.3 million related to the cash portion of any settlement of
                                              phantom unit awards upon vesting. The remainder of the unit-based
                                              compensation expense for 2014 is related to non-cash adjustments to
                                              the unit-based compensation liability, and for 2013 to the non-cash
                                              amortization of unit-based compensation in equity.
(2)                                           Reflects actual maintenance capital expenditures for the period
                                              presented. Maintenance capital expenditures are capital expenditures
                                              made to replace partially or fully depreciated assets, to maintain
                                              the operating capacity of the Partnership’s assets and extend their
                                              useful lives, or other capital expenditures that are incurred in
                                              maintaining the Partnership’s existing business and related cash
                                              flow.
(3)                                           Represents certain transaction expenses related to acquisitions,
                                              potential acquisitions and other items. The Partnership believes it
                                              is useful to investors to view its results excluding these fees.
(4)                                           Calculation reflects the value of the distribution for the weighted
                                              average common units outstanding for the years ended December 31,
                                              2014 and 2013. The adjusted distributable cash flow coverage ratio
                                              based on units outstanding at the record dates for each of the
                                              periods are 0.97x and 0.91x. For the year ended December 31, 2013,
                                              pre-IPO distributable cash flow was not included in the calculation
                                              for the coverage ratio.
(5)                                           Represents distribution to holders enrolled in the Partnership’s
                                              Distribution Reinvestment Plan ("DRIP") as of the record date for
                                              each period.
(6)                                           Calculation reflects the value of cash distributions declared for
                                              the weighted average of common and subordinated units not
                                              participating in the Partnership’s DRIP for the year ended December
                                              31, 2014. The cash coverage ratio based on units outstanding at the
                                              record date for the period is 2.46x. For the year ended December 31,
                                              2013, pre-IPO distributable cash flow was not included in the
                                              calculation for the coverage ratio.
                                               
                                                                                          
                                       USA COMPRESSION PARTNERS, LP AND SUBSIDIARIES
                                FULL-YEAR 2015 ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW
                                                      GUIDANCE RANGE
                                               RECONCILIATION TO NET INCOME
                                          (In millions - Unaudited)
                                                                                          
                                                                                                     Guidance
                                                                                         --------------------------------
Net income                                                                                 $13.1 million to $24.1 million
Plus: Interest expense                                                                     $17.6 million to $18.6 million
Plus: Depreciation and amortization                                                                         $92.0 million
Plus: Income taxes                                                                                           $0.2 million
                                                                                         --------------------------------
EBITDA                                                                                   $123.9 million to $133.9 million
                                                                                         --------------------------------
Plus: Interest income on capital lease                                                                       $1.6 million
Plus: Unit-based compensation expense(1)                                                                     $4.5 million
                                                                                         --------------------------------
Adjusted EBITDA                                                                          $130.0 million to $140.0 million
                                                                                         --------------------------------
Less: Cash interest expense                                                                $17.5 million to $18.5 million
Less: Income tax provision                                                                                   $0.2 million
Less: Maintenance capital expenditures                                                                      $20.0 million
                                                                                         --------------------------------
Distributable cash flow                                                                   $91.3 million to $102.3 million
                                                                                         ================================
                                                                                          
              (1) Based on the Partnership’s unit closing price as of December 31,
                                                           2014.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20150217005275r1&sid=cmtx6&distro=nx&lang=en

SOURCE: USA Compression Partners, LP

USA Compression Partners, LP 
Matthew C. Liuzzi, 512-369-1624 
Chief Financial Officer 
mliuzzi@usacompression.com 
or 
Mike Lenox, 512-369-1632 
VP of Finance 
mlenox@usacompression.com


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