Archrock (AROC) Financial Report Summaries

Risks

• Pandemics and other public health crises may negatively affect demand for our services, and may have a material adverse impact on our financial condition, results of operations and cash flows.
• Our operations entail inherent risks that may result in substantial liability. We do not insure against all potential losses and could be seriously harmed by unexpected liabilities.
• We face significant competitive pressures that may cause us to lose market share and harm our financial performance.
• If we do not make acquisitions on economically acceptable terms, our future growth could be limited.
• While we paid quarterly dividends to holders of our common stock during the year ended December 31, 2023, there can be no assurance that we will pay dividends in the future.
• We have a substantial amount of debt that could limit our ability to fund future growth and operations and increase our exposure to risk during adverse economic conditions.
• Covenants in our Debt Agreements may impair our ability to operate our business.
• We may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require.
• Our inability to fund purchases of additional compression equipment could adversely impact our financial results.
• We may be vulnerable to interest rate increases due to our variable rate debt obligations.
• Uncertainty relating to the phasing out of LIBOR may adversely affect the market value of our current or future debt obligations, including our Credit Facility.
• The erosion of the financial condition of our customers could adversely affect our business.
• The loss of any of our most significant customers would result in a decline in our revenue and cash available to pay dividends to our common stockholders.
• Many of our contract operations service agreements have short initial terms and are cancelable on short notice after the initial term, and we cannot be sure that such contracts will be extended or renewed after the end of the initial contractual term. Any such nonrenewals, or renewals at reduced rates or the loss of contracts with any significant customer could adversely impact our results of operations.
• Our ability to manage and grow our business effectively may be adversely affected if we lose management or operational personnel.
• We may not realize the intended benefits of our process and technology transformation project, which could have an adverse effect on our business.
• Threats of cyber-attacks or terrorism could affect our business.
• Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.
• Our ability to use NOLs and interest expense limitation carryovers to offset future income may be limited.
• From time to time, we are subject to various claims, tax audits, litigation and other proceedings that could ultimately be resolved against us and require material future cash payments or charges, which could impair our financial condition or results of operations.
• New regulations, proposed regulations and proposed modifications to existing regulations under the CAA, if implemented, could result in increased compliance costs.
• We are subject to a variety of governmental regulations; failure to comply with these regulations may result in administrative, civil and criminal enforcement measures and changes in these regulations could increase our costs or liabilities.
• Climate change legislation, regulatory initiatives and stakeholder pressures could result in increased compliance costs, financial risks and potential reduction in demand for our services.