Archrock Partners, L.P. (NASDAQ:APLP) Q4 2016 Earnings Conference Call - Final Transcript
Feb 23, 2017 • 11:00 am ET
Good morning. Welcome to the Archrock Inc. and Archrock Partners LP Fourth Quarter 2016 Conference Call. Today, Archrock and Archrock Partners released their results for the fourth quarter of 2016. If you have not received a copy, you can find the information on the company's website at www.archrock.com. During today's call, Archrock Inc. may be referred to as Archrock or AROC and Archrock Partners as either Archrock Partners or APLP. Because APLP's financial results and position are consolidated into Archrock, any discussion of Archrock's financial results will include Archrock Partners unless otherwise noted. I want to remind listeners that the news releases issued today by Archrock and Archrock Partners, the company's prepared remarks on this conference call and the related question-and-answer session include forward-looking statements.
These forward-looking statements include projections and expectations of the company's performance and represent the company's current beliefs. Various factors could cause results to differ materially from those projected in the forward-looking statements. Information concerning the risk factors, challenges, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements can be found in the company's press releases as well as in the Archrock's Annual Report on Form 10-KA for the year-ended December 31, 2015 and Archrock Partners Annual Report on Form 10-K for the year-ended December 31, 2015.
And those set forth from time to time in Archrock and Archrock Partners filings with the Securities and Exchange Commission which are currently available at www.archrock.com. Except as required by law, the Companies expressly disclaims any intention or obligation to revise or update any forward-looking statements. In addition, our discussion today will include non-GAAP financial measures including EBITDA as adjusted, gross margin, gross margin percentage, cash availability for dividend, and distributable cash flow. For reconciliations of our non-GAAP financial measures to our GAAP financial results, please see today's press releases and our Form 8-K furnished to the SEC. Today's host for this morning's call is Brad Childers, President and CEO of Archrock.
And I would now like to turn the call over to Mr. Childers. You may begin.
Thank you, operator. Good morning everyone. With me today is David Miller, CFO of Archrock and Archrock Partners. Let me start by saying that I'm pleased with Archrock and Archrock Partners performance in 2016 and in the fourth quarter. Highlights from the fourth quarter include that we continue to see the improved bookings and horsepower stability that we experienced in the third quarter. We generated EBITDA as adjusted of $75 million which includes $4 million of other income and $194 million of revenue. SG&A was $27 million, which on a run rate basis is a 23% reduction from Q1 2016. And from a balance sheet perspective, we reduced debt by $30 million in the fourth quarter which includes a $28 million reduction at Archrock Partners.
For the year we completed several strategic and structural actions. First, we completed the operational separation from Exterran corporation. We reduced headcount by 25%. We executed the dropdown of 147,000