USAC

USAC is a capital-intensive natural-gas compression MLP affiliated with Energy Transfer that has delivered five consecutive years of revenue and earnings growth — from $633M/$10M in FY2021 to $998M/$111M in FY2025 — with operating margin holding at 30.7% and operating cash flow of $394M, well above the $117M of capex (down 42.8% YoY). Management's own MD&A confirms the 2025 plan landed comfortably above target: Adjusted EBITDA of $613.76M (102.3% of the $600M target) and DCF of $385.68M (104.4% of the $360M target), both producing above-1.0x bonus payout factors — i.e., the business hit its operating cadence, not just GAAP.

The balance sheet is the catch. Total liabilities ($2.73B) exceed total assets ($2.62B), long-term debt sits at $2.52B against just $8.56M of cash, and the 10-K exhibit list shows a 7.125% senior note due 2029 — high-coupon paper that frames future refi risk. Share count rose 23.4% YoY to 145M, almost certainly tied to the November 2025 Stock Purchase Agreement with J-W Power (Exhibit 2.3 — $2.5B compression M&A in size), which is strategically sensible for fleet scale but immediately dilutive. The Risk Factors also flag persistent related-party dealings with Energy Transfer, which the Audit Committee pre-blesses on 'arms-length' terms — a governance overhang for unitholders.