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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2018	Nov. 02, 2018
Entity Registrant Name	USA Compression Partners, LP
Entity Central Index Key	0001522727
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Common units
Units outstanding		89,966,676
Class B Units
Units outstanding		6,397,965

Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 2,830	$ 4,013
Accounts receivable, net:
Trade, net	89,010	32,696
Other	3,753
Related party receivables	46,712	45
Inventory, net	83,043	33,221
Prepaid expenses and other assets	4,195	4,209
Total current assets	229,543	74,184
Property and equipment, net	2,541,343	1,192,921
Installment receivable	7,544
Identifiable intangible assets, net	398,788	198,215
Goodwill	619,411	253,428
Other assets	17,423	205
Total assets	3,814,052	1,718,953
Current liabilities:
Accounts payable	52,681	1,383
Related party payables		1,977
Accrued liabilities	86,542	41,513
Deferred revenue	34,238	2,220
Total current liabilities	173,461	47,093
Long-term debt, net	1,730,763
Other liabilities	5,759	6,990
Total Liabilities	1,909,983	54,083
Preferred Units	$ 477,309
Partners' capital:
Warrants	13,979
Total partners’ capital and predecessor parent company net investment	$ 1,426,760	1,664,870
Total liabilities, partners’ capital and predecessor parent company net investment	3,814,052	1,718,953
Class B Units
Partners' capital:
Limited partner interest	78,416
Warrants
Partners' capital:
Limited partner interest	13,979
Limited partner \| Common units
Partners' capital:
Limited partner interest	1,334,365
Limited partner \| Class B Units
Partners' capital:
Limited partner interest	78,416
Predecessor
Accounts receivable, net:
Goodwill	$ 366,000
Partners' capital:
Total partners’ capital and predecessor parent company net investment		$ 1,664,870

Condensed Consolidated Balance Sheets (Parenthetical) shares in Thousands	Sep. 30, 2018 shares
Common units
Limited partner units issued (in shares)	89,967
Limited partner units outstanding (in shares)	89,967
Class B Units
Limited partner units issued (in shares)	6,398
Limited partner units outstanding (in shares)	6,398

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Contract operations	$ 158,664	$ 62,645	$ 383,732	$ 182,737
Parts and service	6,012	4,061	15,836	8,070
Related party	4,271	4,383	12,807	12,925
Total revenues	168,947	71,089	412,375	203,732
Costs and expenses:
Cost of operations, exclusive of depreciation and amortization	64,309	31,667	159,177	90,556
Selling, general, and administrative	17,753	6,766	52,891	18,885
Depreciation and amortization	59,403	42,535	156,943	122,914
Loss (gain) on disposition of assets	1,250	521	12,328	(155)
Impairment of compression equipment	2,292		2,292
Total costs and expenses	145,007	81,489	383,631	232,200
Operating income (loss)	23,940	(10,400)	28,744	(28,468)
Other income (expense):
Interest expense, net	(25,443)		(51,125)
Other	22	(51)	21	(96)
Total other expense	(25,421)	(51)	(51,104)	(96)
Net loss before income tax expense (benefit)	(1,481)	(10,451)	(22,360)	(28,564)
Income tax expense (benefit)	(918)	1,904	(1,624)	3,954
Net loss	(563)	(12,355)	(20,736)	(32,518)
Less: Preferred Unit distributions	(12,188)		(24,242)
Net loss attributable to Common and Class B unitholders' interests	$ (12,751)	$ (12,355)	$ (44,978)	$ (32,518)
Weighted average units outstanding:
Distributions declared per common unit for respective periods	$ 0.525		$ 1.050
Common units
Net loss attributable to:
Common and Class B units	$ (8,768)		$ (33,185)
Weighted average units outstanding:
Basic and diluted (in units)	89,973		69,253
Basic and diluted net loss per common unit and Class B Unit (in dollars per unit)	$ (0.10)		$ (0.48)
Class B Units
Net loss attributable to:
Common and Class B units	$ (3,983)		$ (11,793)
Weighted average units outstanding:
Basic and diluted (in units)	6,398		6,398
Basic and diluted net loss per common unit and Class B Unit (in dollars per unit)	$ (0.62)		$ (1.84)

Condensed Consolidated Statements of Changes in Partners' Capital - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands	Common units Limited partner	Class B Units Limited partner	Class B Units	Warrants	Predecessor Parent Company Net Investment	Total
Limited Partners' Capital Account at Dec. 31, 2017
Partners' capital (Predecessor) at Dec. 31, 2017						$ 1,664,870
Partners' capital at Dec. 31, 2017					$ 1,664,870	1,664,870
Increase (Decrease) in Partners' Capital
Net income \| Predecessor					(23,370)	(23,370)
Net income						(20,736)
Contribution from parent \| Predecessor					26,730	26,730
Allocation of Predecessor parent company net investment \| Predecessor	1,668,230				(1,668,230)
Deemed distribution for additional interest in USA Compression Predecessor	(37,178)					(37,178)
Purchase Price Adjustment for USA Compression Partners, LP	(654,340)					(654,340)
Issuance of common units for the Equity Restructuring	135,440					135,440
Issuance of common units for the CDM Acquisition	324,910					324,910
Issuance of units			86,125
Issuance of Warrants				13,979		13,979
Vesting of phantom units	5,230					5,230
Distributions and distribution equivalent rights	(94,452)					(94,452)
Issuance of common units under the DRIP	424					424
Net loss for the period April 2, 2018 to September 30, 2018	(13,899)		(7,709)			(21,608)
Limited Partners' Capital Account at Sep. 30, 2018	$ 1,334,365	$ 78,416	$ 78,416	$ 13,979
Partners' capital at Sep. 30, 2018						$ 1,426,760

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net loss	$ (20,736)	$ (32,518)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	156,943	122,914
Bad debt expense (recovery)	633	(1,837)
Amortization of debt issue costs	3,555
Unit-based compensation expense	10,891	3,195
Deferred income tax expense (benefit)	(1,863)	3,954
Loss (gain) on disposition of assets	12,328	(155)
Impairment of compression equipment	2,292
Changes in assets and liabilities, net of effects of business combination:
Accounts receivable, net	(63,576)	(8,996)
Inventory, net	(764)
Prepaid expenses and other current assets	6,520	5,213
Other noncurrent assets	(58)
Accounts payable and related party payables	(4,751)	(15,053)
Other current liabilities	(4,879)	21,023
Accrued liabilities and deferred revenue	36,665	(455)
Net cash provided by operating activities	133,200	97,285
Cash flows from investing activities:
Capital expenditures, net	(200,932)	(112,624)
Proceeds from disposition of property and equipment	6,870	14,326
Proceeds from insurance recovery	253
Acquisition of USA Compression Predecessor	(1,232,546)
Assumed cash acquired in business combination of USA Compression Partners, LP	710,506
Net cash used in investing activities	(715,849)	(98,298)
Cash flows from financing activities:
Proceeds from revolving credit facility	482,414
Payments on revolving credit facility	(279,651)
Proceeds from issuance of Preferred Units and Warrants, net	479,100
Cash paid related to net settlement of unit-based awards	(4,447)
Financing costs	(17,615)
Contributions to Parent		(7,154)
Contributions from Parent	28,520
Net cash provided by (used in) financing activities	581,466	(7,154)
Decrease in cash and cash equivalents	(1,183)	(8,167)
Cash and cash equivalents, beginning of period	4,013	14,181
Cash and cash equivalents, end of period	2,830	6,014
Supplemental cash flow information:
Cash paid for interest, net of capitalized amounts	47,972
Cash paid for taxes	183
Supplemental non-cash transactions:
Non-cash distributions to certain common unitholders (DRIP)	424
Predecessor's Non-cash contribution (to) from Predecessor's Parent	(1,790)	3,196
Transfers to inventory from property and equipment	(9,533)
Transfer from long term installment receivable to short-term	(2,190)
Transfer from long-term liabilities to short-term	609
Change in capital expenditures included in accounts payable and accrued liabilities	(5,885)	$ 15,465
Issuance of common units for the Equity Restructuring	135,440
Common units
Cash flows from financing activities:
Cash distributions on units	(94,801)
Supplemental non-cash transactions:
Issuance of units for the CDM Acquisition	324,910
Class B Units
Supplemental non-cash transactions:
Issuance of units for the CDM Acquisition	86,125
Preferred Units
Cash flows from financing activities:
Cash distributions on units	$ (12,054)

Organization and Description of the Business	9 Months Ended
Organization and Description of the Business	Sep. 30, 2018
Organization and Description of the Business
Organization and Description of the Business	(1) Organization and Description of Business Unless the context otherwise requires or where otherwise indicated, the terms “our,” “we,” “us,” “the Partnership” and similar language when used in the present or future tense and for periods on and subsequent to April 2, 2018 (the “Transactions Date”) refer to USA Compression Partners, LP, collectively with its consolidated operating subsidiaries, including the USA Compression Predecessor. Unless the context otherwise requires or where otherwise indicated, the term “USA Compression Predecessor,” as well as the terms “our,” “we,” “us” and “its” when used in an historical context or in reference to periods prior to the Transactions Date, refers to CDM Resource Management LLC (“CDM Resource”) and CDM Environmental & Technical Services LLC (“CDM E&T”) collectively, which has been deemed to be the predecessor of the Partnership for financial reporting purposes. We are a Delaware limited partnership. Through our operating subsidiaries, we provide compression services under fixed-term contracts with customers in the natural gas and crude oil industries, using natural gas compression packages that we design, engineer, own, operate and maintain. We primarily provide compression services in a number of shale plays throughout the United States, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara and Fayetteville shales. USA Compression GP, LLC, a Delaware limited liability company, serves as our general partner and is referred to herein as the “General Partner.” Our General Partner was wholly owned by Energy Transfer Equity, L.P. (“ETE”), through its wholly owned subsidiary, Energy Transfer Partners, L.L.C. (“ETP LLC”). In October 2018, ETE and Energy Transfer Partners, L.P. (“ETP”) completed the merger of ETP with a wholly owned subsidiary of ETE in a unit-for-unit exchange (the “ETE Merger”). Following the closing of the ETE Merger, ETE changed its name to “Energy Transfer LP” and ETP changed its name to “Energy Transfer Operating, L.P.” Upon the closing of the ETE Merger, ETE contributed to ETP 100% of the limited liability company interests in our General Partner. References herein to “ETP” refer to Energy Transfer Partners, L.P. for periods prior to the ETE Merger and Energy Transfer Operating, L.P. following the ETE Merger, and references to “ETE” refer to Energy Transfer Equity, L.P. for periods prior to the ETE Merger and Energy Transfer LP following the ETE Merger. The USA Compression Predecessor owned and operated a fleet of compressors used to provide natural gas compression services for customer specific systems. The USA Compression Predecessor also owned and operated a fleet of equipment used to provide treating services, such as carbon dioxide and hydrogen sulfide removal, natural gas cooling, and dehydration. The USA Compression Predecessor had operations located in Texas, Oklahoma, Louisiana, Arkansas, Pennsylvania, New Mexico, Colorado, Ohio, and West Virginia. CDM Acquisition On the Transactions Date, we consummated the transactions contemplated by the Contribution Agreement dated January 15, 2018, pursuant to which, among other things, we acquired all of the issued and outstanding membership interests of the USA Compression Predecessor from ETP (the “CDM Acquisition”) in exchange for aggregate consideration of approximately $1.7 billion, consisting of (i) 19,191,351 common units representing limited partner interests in us (the “common units”), (ii) 6,397,965 Class B units representing limited partner interests in us (“Class B Units”) and (iii) $1.232 billion in cash (including estimated customary closing adjustments). General Partner Purchase Agreement On the Transactions Date, and in connection with the closing of the CDM Acquisition, we consummated the transactions contemplated by the Purchase Agreement dated January 15, 2018, by and among ETE, ETP LLC, USA Compression Holdings, LLC (“USA Compression Holdings”) and, solely for certain purposes therein, R/C IV USACP Holdings, L.P. and ETP, pursuant to which, among other things, ETE acquired from USA Compression Holdings (i) all of the outstanding limited liability company interests in the General Partner and (ii) 12,466,912 common units for cash consideration paid by ETE to USA Compression Holdings equal to $250.0 million (the “GP Purchase”). Upon the closing of the ETE Merger, ETE contributed all of the interests in the General Partner and the 12,466,912 common units to ETP. Equity Restructuring Agreement On the Transactions Date, and in connection with the closing of the CDM Acquisition, we consummated the transactions contemplated by the Equity Restructuring Agreement dated January 15, 2018, pursuant to which, among other things, the Partnership, the General Partner and ETE agreed to cancel the Partnership’s Incentive Distribution Rights (“IDRs”) and convert the General Partner Interest (as defined in the Equity Restructuring Agreement) into a non-economic general partner interest, in exchange for the Partnership’s issuance of 8,000,000 common units to the General Partner (the “Equity Restructuring”). The CDM Acquisition, GP Purchase and Equity Restructuring are collectively referred to as the “Transactions.”

Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

(2) Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Partnership

The unaudited condensed consolidated financial statements give effect to the business combination and the Transactions discussed above under the acquisition method of accounting, and the business combination has been accounted for in accordance with the applicable reverse merger accounting guidance. ETE acquired a controlling financial interest in us through the acquisition of our General Partner. As a result, the USA Compression Predecessor is deemed to be the accounting acquirer of the Partnership because its ultimate parent company obtained control of the Partnership through its control of the General Partner. Consequently, the USA Compression Predecessor is deemed to be the predecessor of the Partnership for financial reporting purposes, and the historical financial statements of the Partnership now reflect the USA Compression Predecessor for all periods prior to the closing of the Transactions. The closing of the Transactions occurred on the Transactions Date.

The USA Compression Predecessor’s assets and liabilities retained their historical carrying values. Additionally, the Partnership’s assets acquired and liabilities assumed by the USA Compression Predecessor in the business combination have been recorded at their fair values measured as of the Transactions Date. The excess of the assumed purchase price of the Partnership over the estimated fair values of the Partnership’s net assets acquired has been recorded as goodwill. The assumed purchase price and fair value of the Partnership has been determined using acceptable fair value methods. Additionally, because the USA Compression Predecessor is reflected at ETE’s historical cost, the difference between the $1.7 billion in consideration paid by the Partnership and ETE’s historical carrying values (net book value) at the Transactions Date has been recorded as a decrease to partners’ capital in the amount of $37.2 million.

Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As noted above, the historical condensed consolidated financial statements of the Partnership now reflect the historical condensed consolidated financial statements of the USA Compression Predecessor in accordance with the applicable accounting and financial reporting guidance. Therefore, the historical condensed consolidated financial statements are comprised of the balance sheet and statement of operations of the USA Compression Predecessor as of and for periods prior to the Transactions Date. The historical condensed consolidated financial statements are also comprised of the condensed consolidated balance sheet and statement of operations of the Partnership, which includes the USA Compression Predecessor, as of and for all periods subsequent to the Transactions Date.

In the opinion of our management, such financial information reflects all normal recurring adjustments necessary for a fair presentation of these interim unaudited condensed consolidated financial statements in accordance with GAAP. Operating results for the three months and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, 2017 filed on February 13, 2018 (our “2017 Annual Report”) and the audited consolidated financial statements of the USA Compression Predecessor filed as Exhibit 99.1 to our Current Report on Form 8-K filed on November 2, 2018.

USA Compression Predecessor

ETP allocated various corporate overhead expenses to the USA Compression Predecessor based on a percentage of assets, net income (loss), or adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). These allocations are not necessarily indicative of the cost that the USA Compression Predecessor would have incurred had it operated as an independent standalone entity. The USA Compression Predecessor also historically relied upon ETP for funding operating and capital expenditures as necessary. As a result, the historical financial statements of the USA Compression Predecessor may not fully reflect or be necessarily indicative of what the USA Compression Predecessor’s balance sheet, results of operations and cash flows would have been or will be in the future.

Certain expenses incurred by ETP are only indirectly attributable to the USA Compression Predecessor. As a result, certain assumptions and estimates are made in order to allocate a reasonable share of such expenses to the USA Compression Predecessor, so that the accompanying financial statements reflect substantially all costs of doing business. The allocations and related estimates and assumptions are described more fully in Note 14.

Certain amounts of the USA Compression Predecessor’s revenues are derived from related party transactions, as described more fully in Note 14.

Significant Accounting Policies

Use of Estimates

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that existed at the date of the unaudited condensed consolidated financial statements. Although these estimates were based on management’s available knowledge of current and expected future events, actual results could differ from these estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of all cash balances. We consider investments in highly liquid financial instruments purchased with an original maturity of 90 days or less to be cash equivalents.

Inventory

Inventory consists of serialized and non-serialized parts used primarily in the repair of compression units. All inventory is stated at the lower of cost or net realizable value. The cost of serialized parts inventory is determined using the specific identification cost method, while the cost of non-serialized parts inventory is determined using the weighted average cost method. Purchases of these assets are considered operating activities on the Unaudited Condensed Consolidated Statements of Cash Flows.

Identifiable Intangible Assets

Identifiable intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives, which is the period over which the assets are expected to contribute directly or indirectly to our future cash flows. The estimated useful lives of our intangible assets range from 9 to 20 years.

We assess identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Neither we nor the USA Compression Predecessor recorded any impairment of identifiable intangible assets during the three and nine months ended September 30, 2018 and 2017, respectively.

Property and Equipment

Property and equipment are carried at cost except for (i) certain acquired assets which are recorded at fair value on their respective acquisition dates and (ii) impaired assets which are recorded at fair value on the last impairment evaluation date for which an adjustment was required. Overhauls and major improvements that increase the value or extend the life of compression equipment are capitalized and depreciated over 3 to 5 years. Ordinary maintenance and repairs are charged to cost of operations, exclusive of depreciation and amortization.

When property and equipment is retired or sold, its carrying value and the related accumulated depreciation are removed from our accounts and any associated gains or losses are recorded on our statements of operations in the period of sale or disposition.

Capitalized interest is calculated by multiplying the Partnership’s monthly effective interest rate on outstanding debt by the amount of qualifying costs, which include upfront payments to acquire certain compression units. Capitalized interest was $0.2 million and $0.3 million for the three and nine months ended September 30, 2018, respectively. The USA Compression Predecessor had no capitalized interest for the three and nine months ended September 30, 2017, as it did not hold any debt during either period.

Impairment of Long-Lived Assets

Long-lived assets with recorded values that are not expected to be recovered through future cash flows are written-down to estimated fair value. We test long-lived assets for impairment when events or circumstances indicate that the assets’ carrying value may not be recoverable or will no longer be utilized in the operating fleet. The most common circumstance requiring compression units to be evaluated for impairment is when idle units do not meet the desired performance characteristics of our active revenue generating horsepower.

During the three and nine months ended September 30, 2018, we evaluated the future deployment of our idle fleet under then-current market conditions and determined to retire, sell or re-utilize key components of 18 compressor units, or approximately 5,800 horsepower, that were previously used to provide services in our business. As a result, we recorded $2.3 million in impairment of compression equipment for the three and nine months ended September 30, 2018. The primary causes for this impairment were: (i) units were not considered marketable in the foreseeable future, (ii) units were subject to excessive maintenance costs or (iii) units were unlikely to be accepted by customers due to certain performance characteristics of the unit, such as the inability to meet then-current quoting criteria without excessive retrofitting costs. These compression units were written down to their respective estimated salvage values, if any.

The USA Compression Predecessor did not record any impairment of long-lived assets during the three and nine months ended September 30, 2017.

Goodwill

Goodwill represents consideration paid in excess of the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized, but is reviewed for impairment annually based on the carrying values as of October 1, or more frequently if impairment indicators arise that suggest the carrying value of goodwill may not be recovered.

Neither we nor the USA Compression Predecessor recorded any impairment of goodwill during the three and nine months ended September 30, 2018 and 2017, respectively.

Pass Through Taxes

Sales taxes incurred on behalf of, and passed through to, customers are accounted for on a net basis.

Fair Value Measurements

Accounting standards on fair value measurements establish a framework for measuring fair value and stipulate disclosures about fair value measurements. The standards apply to recurring and non-recurring financial and non-financial assets and liabilities that require or permit fair value measurements. Among the required disclosures is the fair value hierarchy of inputs we use to value an asset or a liability. The three levels of the fair value hierarchy are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

As of September 30, 2018, our financial instruments consisted primarily of cash and cash equivalents, trade accounts receivable, trade accounts payable and long-term debt. The book values of cash and cash equivalents, trade accounts receivable and trade accounts payable are representative of fair value due to their short-term maturities. The carrying amount of our revolving credit facility approximates fair value due to the floating interest rates associated with the debt.

The fair value of our 6.875% Senior Notes due 2026 (the “Senior Notes”) was estimated using quoted prices in inactive markets and is considered a Level 2 measurement. The following table summarizes the carrying amount and fair value of these assets and liabilities (in thousands):


	September 30, 2018		December 31, 2017
Assets (Liabilities)	Level 2		Level 2
Carrying amount of Senior Notes (1)	$	708,939	$	—
Fair value of Senior Notes		748,563		—

(1)

Carrying amount is shown net of unamortized deferred financing costs. As of September 30, 2018, the outstanding aggregate principal amount of our Senior Notes was $725.0 million. See Note 10 for further details.

As of December 31, 2017, the USA Compression Predecessor did not have financial instruments with fair values determined using available market information and valuation methodologies. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value due to their short-term maturities.

Operating Segment

We operate in a single business segment, the compression services business.

Parent Company Net Investment

The USA Compression Predecessor participated in a centralized cash management function managed by ETP. Balances payable to or due from ETP generated under this arrangement are reflected as equity on the books and records of the USA Compression Predecessor.

ETP’s net investment in the operations of the USA Compression Predecessor is presented as Predecessor parent company net investment within the unaudited condensed consolidated balance sheets. Parent company net investment represents the accumulated net earnings of the operations of the USA Compression Predecessor and accumulated net contributions from ETP. Net contributions for the period January 1, 2018 to April 1, 2018 were primarily comprised of intercompany operations and expense, cash clearing and other financing activities, and general and administrative cost allocations to the USA Compression Predecessor.

Acquisitions

9 Months Ended

Sep. 30, 2018

Acquisitions

Acquisitions

(3) Acquisitions

The USA Compression Predecessor is deemed to be the accounting acquirer of the Partnership in the business combination because its ultimate parent company obtained control of the Partnership through its control of the General Partner. Consequently, the USA Compression Predecessor’s assets and liabilities retained their historical carrying values. The Partnership’s assets acquired and liabilities assumed by the USA Compression Predecessor have been recorded at their fair values measured as of the Transactions Date. The excess of the assumed purchase price of the Partnership over the estimated fair values of the Partnership’s net assets acquired has been recorded as goodwill. The assumed purchase price and fair value of the Partnership was determined using a combination of an income and cost valuation methodology, the fair value of the Partnership’s common units as of the Transactions Date and the consideration paid by ETE for the General Partner and IDRs. The valuation and purchase price allocation is considered final.

The property and equipment of the USA Compression Predecessor is reflected at historical carrying value, which is less than the consideration paid for the business. The excess of the consideration paid over the historical carrying value was $37.2 million and is reflected as a decrease to partners’ capital.

The Partnership incurred $21.7 million in transaction-related expenses prior to the Transactions Date, which were recognized by the Partnership when incurred in the periods prior to the Transactions Date, and therefore are not included within the results of operations presented within the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2018.

For the period from April 2, 2018 to September 30, 2018, we recognized $177.0 million in revenues and $10.8 million in net income attributable to the Partnership’s historical assets.

The following table summarizes the assumed purchase price and fair value and the allocation to the assets acquired and liabilities assumed (in thousands):


Assumed purchase price allocation to USA Compression Partners, LP
Current assets	$	786,258
Fixed assets		1,331,850
Other long-term assets		15,018
Customer relationships		221,500
Total identifiable assets acquired		2,354,626
Current liabilities		(110,465)
Long-term debt		(1,526,865)
Other long-term liabilities		(1,538)
Total liabilities assumed		(1,638,868)
Net identifiable assets acquired		715,758
Goodwill (1)		365,983
Net assets acquired	$	1,081,741

April 2, 2018 Transactions:
Cash used in the CDM Acquisition		(710,506)
Issuance of Preferred Units		(465,121)
Issuance of Class B Units for the CDM Acquisition		(86,125)
Issuance of Warrants		(13,979)
Issuance of common units for the Equity Restructuring		(135,440)
Issuance of common units for the CDM Acquisition		(324,910)
Purchase Price Adjustment for USA Compression Partners, LP	$	(654,340)

(1)

Goodwill recognized from the business combination primarily relates to the value attributed to additional growth opportunities, synergies and operating leverage within the Partnership’s areas of operation. The valuation of goodwill recognized from the business combination is final.

Transition Services Agreement

In connection with the closing of the Transactions, we entered into an agreement with the USA Compression Predecessor and ETP pursuant to which ETP and its affiliates provided certain services to us with respect to the business and operations of the USA Compression Predecessor’s existing assets, including information technology, accounting and emissions testing services, for a period of three months following the closing of the Transactions. Expenses associated with the transition services agreement were $0.7 million for the nine months ended September 30, 2018.

Unaudited Pro Forma Financial Information

The following unaudited pro forma condensed financial information for the three and nine months ended September 30, 2018 and 2017 gives effect to the Transactions as if they had occurred on January 1, 2017. The unaudited pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Transactions taken place on the dates indicated and is not intended to be a projection of future events. The pro forma adjustments for the periods presented consist of (i) adjustments to combine the USA Compression Predecessor’s and the Partnership’s historical results of operations for the periods, (ii) adjustments to interest expense to include interest expense for additional revolving credit facility borrowings and include the interest expense associated with our Senior Notes (see Note 10), (iii) adjustments to depreciation and amortization expense attributable to adjustments recorded as a result of the purchase price allocation to the Partnership’s assets and liabilities and (iv) adjustments to net loss attributable to common units and Class B Units attributable to distributions on the Partnership’s Series A Preferred Units (the “Preferred Units”).

The following table presents the unaudited pro forma revenues, net loss and basic and diluted net loss per unit information for each period:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Total revenues	$	168,947	$	139,223	$	490,114	$	417,670
Net loss	$	(563)	$	(86,249)	$	(53,839)	$	(258,746)
Net loss attributable to common and Class B unitholders' interests	$	(12,751)	$	(98,436)	$	(90,269)	$	(295,309)
Basic and diluted net loss per common unit and Class B Unit	$	(0.72)	$	(1.03)	$	(0.95)	$	(3.10)

The pro forma net loss for the three and nine months ended September 30, 2018 includes expenses that were a direct result of the Transactions, including $1.0 million in employee severance charges attributable to employees not retained by the Partnership subsequent to the Transactions and $21.7 million in transaction expenses, including advisory, audit and legal fees. These expenses were recognized by the Partnership as they were incurred during the period from January 1, 2018 to April 1, 2018, but because the USA Compression Predecessor’s historical condensed consolidated financial statements are now reflected for that period, the condensed consolidated financial statements presented in accordance with GAAP for the nine months ended September 30, 2018 do not reflect such expenses incurred as a direct result of the Transactions.

Trade Accounts Receivable	9 Months Ended
Trade Accounts Receivable	Sep. 30, 2018
Trade Accounts Receivable
Trade Accounts Receivable	(4) Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts, which was $1.7 million and $0.8 million at September 30, 2018 and December 31, 2017, respectively, is our best estimate of the amount of probable credit losses included in our existing accounts receivable. We determine the allowance based upon historical write-off experience and specific customer circumstances. The determination of the allowance for doubtful accounts requires us to make estimates and judgments regarding our customers’ ability to pay amounts due. We continuously evaluate the financial strength of our customers based on payment history, the overall business climate in which our customers operate and specific identification of customer bad debt and make adjustments to the allowance as necessary. Our evaluation of our customers’ financial strength is based on the aging of their respective receivables balance, customer correspondence, financial information and third-party credit ratings. Our evaluation of the business climate in which our customers operate is based on a review of various publicly available materials regarding our customers’ industries, including the solvency of various companies in the industry. During the three and nine months ended September 30, 2018, we increased our allowance for doubtful accounts by $0.5 million and $0.9 million, respectively, due primarily to estimated uncollectible amounts from customers of the USA Compression Predecessor. The USA Compression Predecessor determined its allowance for doubtful accounts based upon historical write-off experience and specific identification of unrecoverable amounts. The USA Compression Predecessor reduced its allowance for doubtful accounts by $0.2 million and $3.7 million during the three and nine months ended September 30, 2017, respectively, due to write-offs of receivables and collections on accounts previously reserved.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Inventory

9 Months Ended

Sep. 30, 2018

Inventory

Inventory

(5) Inventory

Components of inventory are as follows (in thousands):


	September 30, 2018		December 31, 2017
Serialized parts	$	40,997	$	—
Non-serialized parts		42,327		34,335
Total Inventory, gross		83,324		34,335
Less: obsolete and slow moving reserve		(281)		(1,114)
Total Inventory, net	$	83,043	$	33,221

Property And Equipment, Identifiable Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2018

Property And Equipment, Identifiable Intangible Assets and Goodwill

Property And Equipment, Identifiable Intangible Assets and Goodwill

(6) Property and Equipment, Identifiable Intangible Assets and Goodwill

Property and Equipment

Property and equipment consisted of the following (in thousands):


	September 30, 2018		December 31, 2017
Compression and treating equipment	$	3,224,882	$	1,799,151
Furniture and fixtures		1,114		780
Automobiles and vehicles		48,319		41,796
Computer equipment		51,896		25,049
Buildings		9,335		13,891
Land		77		77
Leasehold improvements		5,264		2,051
Total Property and equipment, gross		3,340,887		1,882,795
Less: accumulated depreciation and amortization		(799,544)		(689,874)
Total Property and equipment, net	$	2,541,343	$	1,192,921

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets as follows:


Compression equipment, acquired new		25 years
Compression equipment, acquired used		5 - 25 years
Furniture and fixtures		3 - 10 years
Vehicles and computer equipment		1 - 10 years
Buildings		5 years
Leasehold improvements		5 years

Depreciation expense on property and equipment was $51.5 million and $136.0 million for the three and nine months ended September 30, 2018, respectively. The USA Compression Predecessor recognized $37.4 million and $107.5 million of depreciation expense on property and equipment for the three and nine months ended September 30, 2017, respectively.

The Partnership implemented a change in the estimated useful lives of the USA Compression Predecessor’s property and equipment to conform with the Partnership’s historical asset lives, which is accounted for as a change in accounting estimate beginning on the Transactions Date on a prospective basis. This change resulted in an $11.3 million and $22.5 million increase to both operating income and net income for the three and nine months ended September 30, 2018, respectively, and a $0.12 and $0.30 increase to both basic and diluted earnings per common unit and Class B Unit for the three and nine months ended September 30, 2018, respectively.

As of September 30, 2018 and December 31, 2017, there was $34.2 million and $14.6 million, respectively, of property and equipment purchases in accounts payable and accrued liabilities.

During the three and nine months ended September 30, 2018, there were net losses on the disposition of assets of $1.3 million and $12.3 million, respectively. The net loss for the nine months ended September 30, 2018 was primarily attributable to disposals of various property and equipment by the USA Compression Predecessor. During the three and nine months ended September 30, 2017, the USA Compression Predecessor recognized a $0.5 million net loss and $0.2 million net gain on disposition of assets, respectively.

Identifiable Intangible Assets

Identifiable intangible assets, net consisted of the following (in thousands):


	Customer
	Relationships		Trade Names		Total
Net Balance at December 31, 2017	$	157,551	$	40,664	$	198,215
Additions (1)		221,500		—		221,500
Amortization expense		(18,471)		(2,456)		(20,927)
Net Balance at September 30, 2018	$	360,580	$	38,207	$	398,788

(1)

Identifiable intangible assets were determined as part of the purchase price allocation to the Partnership’s assets acquired by the USA Compression Predecessor.

Accumulated amortization of intangible assets was $151.8 million and $130.9 million as of September 30, 2018 and December 31, 2017, respectively. The expected amortization of the intangible assets for each of the five succeeding years is $31.6 million.

Goodwill

As of September 30, 2018, the Partnership recognized $619.4 million of goodwill, of which $366.0 million was determined as part of the purchase price allocation to the Partnership’s assets acquired by the USA Compression Predecessor.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. Also the disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Installment Receivable	9 Months Ended
Installment Receivable	Sep. 30, 2018
Installment Receivable
Installment Receivable	(7) Installment Receivable On June 30, 2014, we entered into a FMV Bargain Purchase Option Grant Agreement (the “BPO Capital Lease Transaction”) with a customer, pursuant to which we granted a bargain purchase option to the customer with respect to certain compressor packages leased to the customer. The bargain purchase option provides the customer with an option to acquire the equipment at a value significantly less than the fair market value at the end of the lease term, which is seven years. The BPO Capital Lease Transaction was accounted for as a sales type lease resulting in a current installment receivable included in other accounts receivable of $3.5 million and a long-term installment receivable of $7.5 million as of September 30, 2018. The USA Compression Predecessor had no capital lease installment receivables as of December 31, 2017. Revenue and interest income related to the capital lease is recognized over the lease term. We recognize maintenance revenue within Contract operations revenue and interest income within Interest expense, net. Maintenance revenue was $0.3 million and $0.6 million for the three and nine months ended September 30, 2018, respectively. Interest income was $0.2 million and $0.5 million for the three and nine months ended September 30, 2018, respectively. The USA Compression Predecessor had no capital lease revenue or maintenance revenue related to capital leases for the three and nine months ended September 30, 2017, respectively.

Accrued Liabilities	9 Months Ended
Accrued Liabilities	Sep. 30, 2018
Accrued Liabilities
Accrued Liabilities	(8) Accrued Liabilities As of September 30, 2018, accrued liabilities included $44.9 million of accrued sales tax contingency (Note 16), $13.2 million of accrued property taxes and $11.3 million of accrued payroll and benefits. As of December 31, 2017, the USA Compression Predecessor recognized $27.8 million of accrued equipment and other asset purchases, $8.3 million of accrued payroll and benefits and $0.7 million of accrued property taxes.

Income Taxes

9 Months Ended

Sep. 30, 2018

Income Taxes

Income taxes

(9) Income Taxes

We, including the USA Compression Predecessor, are subject to the Revised Texas Franchise Tax (“Texas Margin Tax”). We do not conduct business in any other state where a similar tax is applied. The Texas Margin Tax requires certain forms of legal entities, including limited partnerships, to pay a tax of 0.75% on its “margin,” as defined in the law, based on annual results. The tax base to which the margin tax is applied is the least of (1) 70% of total revenues for federal income tax purposes, (2) total revenue less cost of goods sold or (3) total revenue less compensation for federal income tax purposes.

Components of our income tax expense (benefit) related to the Texas Margin Tax are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Current tax expense	$	120	$	(42)	$	239	$	—
Deferred tax expense (benefit)	$	(1,038)	$	1,946	$	(1,863)	$	3,954
Total income tax expense (benefit)	$	(918)	$	1,904	$	(1,624)	$	3,954

Deferred income tax balances are the direct effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the taxes are actually paid or recovered. The tax effects of temporary differences that give rise to deferred tax liabilities are as follows (in thousands):


	September 30, 2018		December 31, 2017
Deferred tax liability - Property and equipment	$	3,340	$	3,791

The Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 740 Income Taxes (“ASC Topic 740”) provides guidance on measurement and recognition in accounting for income tax uncertainties and provides related guidance on derecognition, classification, disclosure, interest and penalties. As of September 30, 2018 and December 31, 2017, neither we nor the USA Compression Predecessor had any material unrecognized tax benefits (as defined in ASC Topic 740). We do not expect to incur interest charges or penalties related to our tax positions, but if such charges or penalties are incurred, our policy is to account for interest charges as Interest expense, net and penalties as Income tax expense.

The Bipartisan Budget Act of 2015 provides that any tax adjustments (including any applicable penalties and interest) resulting from partnership audits will generally be determined at the partnership level for tax years beginning after December 31, 2017. To the extent possible under the new rules, our General Partner may elect to either pay the taxes (including any applicable penalties and interest) directly to the Internal Revenue Service or, if we are eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return. The Bipartisan Budget Act of 2015 allows a partnership to elect to apply these provisions to any return of the partnership filed for partnership taxable years beginning after the date of enactment, November 2, 2015. We do not intend to elect to apply these provisions for any tax return filed for partnership taxable years beginning before January 1, 2018.

Long-Term Debt

9 Months Ended

Sep. 30, 2018

Long-Term Debt

Long-Term Debt

(10) Long-Term Debt

Our long-term debt, of which there is no current portion, consisted of the following (in thousands):


	September 30, 2018		December 31, 2017
Revolving credit facility	$	1,021,824	$	—
Senior Notes, aggregate principal		725,000		—
Less: deferred financing costs, net of amortization		(16,061)		—
Senior Notes, net		708,939		—
Total long-term debt, net	$	1,730,763	$	—

Revolving Credit Facility

On April 2, 2018, we entered into the Sixth Amended and Restated Credit Agreement (the “Sixth A&R Credit Agreement”) by and among the Partnership, as borrower, USAC OpCo 2, LLC, USAC Leasing 2, LLC, USA Compression Partners, LLC, USAC Leasing, LLC, CDM Resource, CDM E&T and USA Compression Finance Corp. (“Finance Corp”), the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as agent and an LC issuer, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Regions Capital Markets, a division of Regions Bank, RBC Capital Markets and Wells Fargo Bank, N.A., as joint lead arrangers and joint book runners, Barclays Bank PLC, Regions Bank, RBC Capital Markets and Wells Fargo Bank, N.A., as syndication agents, and MUFG Union Bank, N.A., SunTrust Bank and The Bank of Nova Scotia, as senior managing agents.

The Sixth A&R Credit Agreement has an aggregate commitment of $1.6 billion (subject to availability under our borrowing base), with a further potential increase of $400 million, and has a maturity date of April 2, 2023.

The Sixth A&R Credit Agreement permits us to make distributions of available cash to unitholders so long as (a) no default under the facility has occurred, is continuing or would result from the distribution, (b) immediately prior to and after giving effect to such distribution, we are in compliance with the facility’s financial covenants and (c) immediately after giving effect to such distribution, we have availability under the revolving credit facility of at least $100 million. In addition, the revolving credit facility contains various covenants that may limit, among other things, our ability to (subject to exceptions):

grant liens;

make certain loans or investments;

incur additional indebtedness or guarantee other indebtedness;

enter into transactions with affiliates;

merge or consolidate;

sell our assets; or

make certain acquisitions.

The revolving credit facility also contains various financial covenants, including covenants requiring us to maintain:

a minimum EBITDA to interest coverage ratio of 2.5 to 1.0, determined as of the last day of each fiscal quarter; and

a maximum funded debt to EBITDA ratio, determined as of the last day of each fiscal quarter, for the annualized trailing three months of (a) 5.75 to 1.0 through the end of the fiscal quarter ending March 31, 2019, (b) 5.5 to 1.0 through the end of the fiscal quarter ending December 31, 2019 and (c) 5.00 to 1.0 thereafter, in each case subject to a provision for increases to such thresholds by 0.5 in connection with certain future acquisitions for the six consecutive month period following the period in which any such acquisition occurs.

If a default exists under the Sixth A&R Credit Agreement, the lenders will be able to accelerate the maturity on the amount then outstanding and exercise other rights and remedies.

In connection with entering into the Sixth A&R Credit Agreement, we paid certain upfront fees and arrangement fees to the arrangers, syndication agents and senior managing agents of the Sixth A&R Credit Agreement in the amount of $14.3 million during the nine months ended September 30, 2018. These fees were capitalized to loan costs and will be amortized through April 2023. Amounts borrowed and repaid under the Sixth A&R Credit Agreement may be re-borrowed.

As of September 30, 2018, we were in compliance with all of our covenants under the Sixth A&R Credit Agreement.

As of September 30, 2018, we had outstanding borrowings under the Sixth A&R Credit Agreement of $1.0 billion, $578.2 million of borrowing base availability and, subject to compliance with the applicable financial covenants, available borrowing capacity of $309.7 million. Our interest rate in effect for all borrowings under the Sixth A&R Credit Agreement as of September 30, 2018 was 4.68% with a weighted average interest rate of 4.65% for the three months ended September 30, 2018 and 4.60% for the period from the Transactions Date to September 30, 2018. There were no letters of credit issued as of September 30, 2018.

The Sixth A&R Credit Agreement matures in April 2023 and we expect to maintain it for the term. The facility is a “revolving credit facility” that includes a lock box arrangement, whereby remittances from customers are forwarded to a bank account controlled by the administrative agent and are applied to reduce borrowings under the facility.

Senior Notes

On March 23, 2018, the Partnership and its wholly owned finance subsidiary, Finance Corp, co-issued $725.0 million aggregate principal amount of the Senior Notes that mature on April 1, 2026. The Senior Notes accrue interest from March 23, 2018 at the rate of 6.875% per year. Interest on the Senior Notes is payable semi-annually in arrears on each of April 1 and October 1, commencing on October 1, 2018.

Prior to April 1, 2021, we may redeem up to 35% of the aggregate principal amount of the Senior Notes at a redemption price equal to 106.875% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, in an amount not greater than the net proceeds from one or more equity offerings, provided that at least 65% of the aggregate principal amount of the Senior Notes remains outstanding immediately after the occurrence of such redemption (excluding Senior Notes held by us and our subsidiaries) and redemption occurs within 180 days of the date of the closing of such equity offering. Prior to April 1, 2021, we may redeem all or a part of the Senior Notes at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) a make-whole premium at the redemption date, plus accrued and unpaid interest, if any, to the redemption date. On or after April 1, 2021, we may redeem all or a part of the Senior Notes at redemption prices (expressed as percentages of the principal amount) equal to 105.156% for the twelve-month period beginning on April 1, 2021, 103.438% for the twelve-month period beginning on April 1, 2022, 101.719% for the twelve-month period beginning on April 1, 2023 and 100.00% beginning on April 1, 2024 and at any time thereafter, plus accrued and unpaid interest, if any, to the applicable redemption date. If we experience a change of control followed by a ratings decline, unless we have previously exercised or concurrently exercise the right to redeem the Senior Notes (as described above), we may be required to offer to repurchase the Senior Notes at a purchase price equal to 101% of the principal amount repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

There are no financial maintenance covenants associated with the Senior Notes.

In connection with issuing the Senior Notes, we incurred certain issuance costs in the amount of $17.3 million which is amortized over the term of the Senior Notes using the effective interest method.

The Senior Notes are fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, on a senior unsecured basis by all of our existing subsidiaries (other than Finance Corp), and will be fully and unconditionally guaranteed, jointly and severally, by each of our future restricted subsidiaries that either borrows under, or guarantees, our revolving credit facility or guarantees certain of our other indebtedness (collectively, the “Guarantors”). The Senior Notes and the Guarantees are general unsecured obligations and rank equally in right of payment with all of the Guarantors’ and our existing and future senior indebtedness and senior to the Guarantors’ and our future subordinated indebtedness, if any. The Senior Notes and the Guarantees are effectively subordinated in right of payment to all of the Guarantors and our existing and future secured debt, including debt under our revolving credit facility and guarantees thereof, to the extent of the value of the assets securing such debt, and are structurally subordinated to all indebtedness of any of our subsidiaries that do not guarantee the Senior Notes.

We have no assets or operations independent of our subsidiaries, and there are no significant restrictions upon our ability to obtain funds from our subsidiaries by dividend or loan. Each of the Guarantors is 100% owned by us. None of the assets of our subsidiaries represent restricted net assets pursuant to Rule 4-08(e)(3) of Regulation S-X under the Securities Act of 1933, as amended.

The Senior Notes were issued in a private placement on March 23, 2018, and the Partnership has agreed to register the Senior Notes with the SEC by March 23, 2019 or be subject to certain penalties.

Subsidiary Guarantors

On April 20, 2017, the Partnership filed a Registration Statement on Form S-3 (the “Registration Statement”) with the SEC to register the issuance and sale of, among other securities, debt securities, which may be co-issued by Finance Corp (together with the Partnership, the “Issuers”) and fully and unconditionally guaranteed on a joint and several basis by the Partnership’s operating subsidiaries for the benefit of each Holder and the Trustee. Such guarantees will be subject to release, subject to certain limitations, as follows (i) upon the sale, exchange or transfer, by way of a merger or otherwise, to any Person that is not our Affiliate, of all of our direct or indirect limited partnership or other equity interest in such Subsidiary Guarantor; or (ii) upon delivery by an Issuer of a written notice to the Trustee of the release or discharge of all guarantees by such Subsidiary Guarantor of any Debt of the Issuers other than obligations arising under the indenture governing such debt and any debt securities issued under such indenture, except a discharge or release by or as a result of payment under such guarantees. Capitalized terms used but not defined in this paragraph are defined in the Form of Indenture filed as Exhibit 4.1 to the Registration Statement.

The USA Compression Predecessor did not hold any debt as of December 31, 2017.

Partners' Capital

9 Months Ended

Sep. 30, 2018

Partners' Capital.

Partners' Capital

(11) Partners’ Capital

Class B Units

As of September 30, 2018, we had 6,397,965 Class B Units outstanding which represent limited partner interests in the Partnership, all of which were held by ETP. Each Class B Unit will automatically be converted into one common unit following the record date attributable to the quarter ending June 30, 2019. Each Class B Unit has all of the rights and obligations of a common unit except the right to participate in distributions made prior to conversion into common units.

Common Units

As of September 30, 2018, we had 89,966,676 common units outstanding. As of September 30, 2018, ETE held 20,466,912 common units, including 8,000,000 common units held by the General Partner and controlled by ETE, and ETP held 19,191,351 common units. Subsequent to the ETE Merger, ETP holds 39,658,263 common units, including 8,000,000 common units held by the General Partner and controlled by ETP.

USA Compression Holdings, which controlled our General Partner and its IDRs until April 2, 2018, sold all of its remaining common units during the three months ended September 30, 2018.

Cash Distributions

We have declared quarterly distributions per unit to limited partner unitholders of record, including holders of common and phantom units, and distributions paid to the General Partner, including distributions on the General Partner Interest and IDRs, as follows (in millions, except distributions per unit):


	Distribution per		Amount Paid to		Amount Paid to		Amount Paid to
	Limited Partner		Common		General		Phantom		Total
Payment Date	Unit		Unitholders		Partner		Unitholders		Distribution
August 11, 2017	$	0.525	$	32.3	$	0.8	$	0.6	$	33.7
November 10, 2017	$	0.525	$	32.6	$	0.8	$	0.5	$	33.9
February 14, 2018	$	0.525	$	32.7	$	0.8	$	0.8	$	34.3
May 11, 2018	$	0.525	$	47.2	$	—	$	0.4	$	47.6
August 10, 2018	$	0.525	$	47.2	$	—	$	0.4	$	47.6

With the closing of the Transactions on April 2, 2018 and effective beginning with the May 11, 2018 distribution, the General Partner no longer receives distributions on the General Partner Interest or IDRs.

Announced Quarterly Distribution

On October 18, 2018, we announced a cash distribution of $0.525 per unit on our common units. The distribution will be paid on November 9, 2018 to common unitholders of record as of the close of business on October 29, 2018.

Distribution Reinvestment Plan

During the nine months ended September 30, 2018, distributions of $0.4 million were reinvested under the Distribution Reinvestment Plan (“DRIP”) resulting in the issuance of 24,261 common units.

Earnings Per Unit

The computation of earnings per unit is based on the weighted average number of participating securities outstanding during the applicable period. Basic earnings per unit is determined by dividing net income (loss) allocated to participating securities after deducting the amount distributed on Preferred Units, by the weighted average number of participating securities outstanding during the period. Net income (loss) is allocated to participating securities based on their respective shares of the distributed and undistributed earnings for the period. To the extent cash distributions exceed net income (loss) for the period, the excess distributions are allocated to all participating securities outstanding based on their respective ownership percentages. Diluted earnings per unit are computed using the treasury stock method, which considers the potential issuance of limited partner units associated with our long-term incentive plan and warrants. The classes of participating securities include common units, Class B Units, and certain equity-based compensation awards. Unvested phantom units and unexercised warrants are not included in basic earnings per unit, as they are not considered to be participating securities, but are included in the calculation of diluted earnings per unit to the extent that they are dilutive. For the three and nine months ended September 30, 2018, approximately 156,000 and 52,000 incremental unvested phantom units, respectively, and 0 and 31,000 incremental warrants were excluded from the calculation of diluted earnings per unit because the impact was anti-dilutive. Earnings per unit is not applicable to the USA Compression Predecessor as the USA Compression Predecessor had no outstanding common units prior to the Transactions.

Preferred Units and Warrants

9 Months Ended

Sep. 30, 2018

Preferred Units and Warrants

Preferred Units and Warrants

(12) Preferred Units and Warrants

Series A Preferred Unit and Warrant Private Placement

On April 2, 2018, we completed a private placement of $500 million in the aggregate of (i) newly established Preferred Units and (ii) warrants to purchase common units (the “Warrants”) pursuant to a Series A Preferred Unit and Warrant Purchase Agreement dated January 15, 2018, with certain investment funds managed or advised by EIG Global Energy Partners (collectively, the “Preferred Unitholders”). We issued 500,000 Preferred Units with a face value of $1,000 per Preferred Unit and issued two tranches of Warrants to the Preferred Unitholders, which included Warrants to purchase 5,000,000 common units with a strike price of $17.03 per unit and 10,000,000 common units with a strike price of $19.59 per unit. The Warrants may be exercised by the holders thereof at any time beginning April 2, 2019 and before April 2, 2028.

The Preferred Units rank senior to the common units with respect to distributions and rights upon liquidation. The Preferred Unitholders are entitled to receive cumulative quarterly distributions equal to $24.375 per Preferred Unit and which may be paid in cash or, subject to certain limits, a combination of cash and additional Preferred Units as determined by the General Partner with respect to any quarter ending on or prior to June 30, 2019. For the three months ended June 30, 2018, the distribution was pro-rated for the period the Preferred Units were outstanding, which resulted in an initial distribution of $24.107 per Preferred Unit which was paid on August 10, 2018. The distribution attributable to the quarter ended September 30, 2018 will be paid on November 9, 2018 to Preferred Unitholders of record as of the close of business on October 29, 2018.

The Preferred Units are convertible, at the option of the Preferred Unitholders, into common units as follows: one third on or after April 2, 2021, two thirds on or after April 2, 2022, and the remainder on or after April 2, 2023. On or after April 2, 2023, we have the option to redeem all or any portion of the Preferred Units then outstanding. On or after April 2, 2028, the Preferred Unitholders have the right to require us to redeem all or a portion of the Preferred Units then outstanding, the purchase price for which we may elect to pay up to 50% in common units, subject to certain additional limits.

We determined that pursuant to ASC Topic 480 and ASC Topic 815, the Preferred Units meet the requirement to be classified between liabilities and equity as “mezzanine equity” and the Warrants meet the requirement to be classified as equity. The Warrants were valued using the Black-Scholes-Merton model. The Preferred Units have been recorded at their issuance date fair value, net of issuance cost. Net income allocations increase the carrying value and declared distributions decrease the carrying value of the Preferred Units. As the Preferred Units are not currently redeemable and it is not probable that they will become redeemable, adjustment to the initial carrying amount is not necessary and would only be required if it becomes probable that the Preferred Units would become redeemable.

The changes in the Preferred Units balance from December 31, 2017 through September 30, 2018 are summarized below (in thousands):


	Preferred Units
Balance at December 31, 2017	$	—
Issuance of Preferred Units on April 2, 2018, net		465,121
Net income allocated for April 2, 2018 through September 30, 2018		24,242
Distributions received by Preferred Unitholders		(12,054)
Balance at September 30, 2018	$	477,309

Revenue Recognition

9 Months Ended

Sep. 30, 2018

Revenue Recognition

Revenue Recognition

(13) Revenue Recognition

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of our services or goods. Revenue is measured at the amount of consideration we expect to receive in exchange for providing services or transferring goods. Sales taxes incurred on behalf of, and passed through to, customers are excluded from revenue. Incidental items, if any, that are immaterial in the context of the contract are recognized as expense.

Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

On January 1, 2018, we adopted ASC Topic 606 Revenue from Contracts with Customers (“ASC Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605.

We identified no material impact on our historical revenues upon initial application of ASC Topic 606, and as such have not recognized any cumulative catch-up effect to the opening balance of our partners’ capital as of January 1, 2018. Additionally, the application of ASC Topic 606 has no material impact on any current financial statement line items.

The following table disaggregates our revenue by type of service (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017 (1)		2018		2017 (1)
Contract operations revenue	$	162,895	$	66,914	$	396,134	$	195,320
Retail parts and services revenue		4,763		—		10,884		—
Station installations revenue		1,289		4,175		5,357		8,412
Total revenues	$	168,947	$	71,089	$	412,375	$	203,732

(1)

As noted above, prior period amounts have not been adjusted under the modified retrospective method of ASC Topic 606.

The following table disaggregates our revenue by timing of provision of services or transfer of goods (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017 (1)		2018		2017 (1)
Services provided or goods transferred at a point in time	$	4,763	$	—	$	10,884	$	—
Services provided over time:
Recurring term contracts:
Primary term		84,620		32,672		199,027		101,060
Month-to-month		78,275		34,242		197,107		94,260
Non-recurring term contracts:
Station installations		1,289		4,175		5,357		8,412
Total revenues	$	168,947	$	71,089	$	412,375	$	203,732

(1)

As noted above, prior period amounts have not been adjusted under the modified retrospective method of ASC Topic 606.

Contract operations revenue

Revenue from contracted compression, station, gas treating and maintenance services is recognized ratably under our fixed-fee contracts over the term of the contract as services are provided to our customers. Initial contract terms typically range from six months to five years, however we usually continue to provide compression services at a specific location beyond the initial contract term, either through contract renewal or on a month-to-month or longer basis. We primarily enter into fixed-fee contracts whereby our customers are required to pay our monthly fee even during periods of limited or disrupted throughput. Services are generally billed monthly, one month in advance of the commencement of the service month, except for certain customers who are billed at the beginning of the service month, and payment is generally due 30 days after receipt of our invoice. Amounts invoiced in advance are recorded as deferred revenue until earned, at which time they are recognized as revenue. The amount of consideration we receive and revenue we recognize is based upon the fixed fee rate stated in each service contract.

Variable consideration exists in select contracts when billing rates vary based on actual equipment availability or volume of total installed horsepower.

Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenues to each performance obligation based on its relative standalone service fee. We generally determine standalone service fees based on the service fees charged to customers or use expected cost plus margin.

The majority of our service performance obligations are satisfied over time as services are rendered at selected customer locations on a monthly basis and based upon specific performance criteria identified in the applicable contract. The monthly service for each location is substantially the same service month to month and is promised consecutively over the service contract term. We measure progress and performance of the service consistently using a straight-line, time-based method as each month passes, because our performance obligations are satisfied evenly over the contract term as the customer simultaneously receives and consumes the benefits provided by our service. If variable consideration exists, it is allocated to the distinct monthly service within the series to which such variable consideration relates. We have elected to apply the invoicing practical expedient to recognize revenue for such variable consideration, as the invoice corresponds directly to the value transferred to the customer based on our performance completed to date.

There are typically no material obligations for returns or refunds. Our standard contracts do not usually include material non-cash consideration.

Retail parts and services revenue

Retail parts and services revenue is earned primarily on freight and crane charges that are directly reimbursable by our customers and maintenance work on units at our customers’ locations that are outside the scope of our core maintenance activities. Revenue from retail parts and services is recognized at the point in time the part is transferred or service is provided and control is transferred to the customer. At such time, the customer has the ability to direct the use of the benefits of such part or service after we have performed our services. We bill upon completion of the service or transfer of the parts, and payment is generally due 30 days after receipt of our invoice. The amount of consideration we receive and revenue we recognize is based upon the invoice amount. There are typically no material obligations for returns, refunds, or warranties. Our standard contracts do not usually include material variable or non-cash consideration.

Station installations revenue

Revenue from station installations is earned on stations we build on behalf of, and sell to, our customers and such revenue is recognized over time as services are provided. A station typically consists of compressor equipment combined with other equipment ancillary to compression, such as slug catchers, pipe racks, tanks, dehydration units, valves, and control rooms, which together assist in the treating, processing, pressurization and transportation of natural gas. Our performance enhances an asset that the customer controls and does not create an asset with alternative use to us. Revenue is recognized over time based on the progress-toward-completion method and progress is measured using the efforts-expended input method. In applying the efforts-expended input method, we use the percentage of total completed workflows to date relative to estimated total workflows to determine the amount of revenue and profit to recognize for each contract. The amount of consideration we receive and revenue we recognize varies in accordance with each contractual agreement we negotiate with our customers.

The progress-toward-completion method of revenue recognition requires us to make estimates of contract revenues and costs to complete our projects. In making such estimates, management judgments are required to evaluate significant assumptions including the cost of materials and labor, expected labor productivity, the impact of potential variances in schedule completion, the amount of net contract revenues and the impact of any penalties, claims, change orders or performance incentives.

Our payment terms vary in accordance with each contractual agreement we negotiate with our customers. The term between invoicing and when payment is due is not significant. We retain the right to payment for performance completed to date at any point during the contract term. There are no material obligations for returns, refunds or warranties.

Contract assets and trade accounts receivable

We record contract assets when we have completed performance under a contract but our right to consideration is not yet unconditional. We had no contract assets as of September 30, 2018 and the USA Compression Predecessor had no contract assets as of December 31, 2017. Trade accounts receivable are recorded when our right to consideration becomes unconditional and increased by $36.2 million during the nine months ended September 30, 2018 as a result of the USA Compression Predecessor’s acquisition of the Partnership for financial reporting purposes. There were no significant changes to our trade accounts receivable balances due to contract modifications or adjustments, or changes in time frame for a right to consideration to become unconditional during the period.

Deferred revenue

We record deferred revenue when cash payments are received or due in advance of our performance. The increase in the deferred revenue balance for the nine months ended September 30, 2018 is primarily driven by cash payments received or due in advance of satisfying our performance obligations under a contract and the addition of $31.0 million of deferred revenue from the USA Compression Predecessor’s acquisition of the Partnership, offset by $1.0 million of revenues recognized that were included in the deferred revenue balance of the USA Compression Predecessor as of December 31, 2017. There was no significant change to our deferred revenue balance as a result of changes in time frame for a performance obligation to be satisfied during the period.

Practical expedients and exemptions

We have elected to apply the practical expedient in ASC 606-10-50-14 and as such do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Costs to fulfill a contract

We sometimes incur non-reimbursable costs for loading, transporting and unloading equipment to and from our storage locations and customer locations. We defer and amortize these costs using the straight-line method over the life of the contract. We recognized $0.1 million of costs to fulfill a contract within Prepaid expenses on the Unaudited Condensed Consolidated Balance Sheets as of September 30, 2018 and $0.1 million in amortization expense of costs to fulfill a contract within Cost of operations, exclusive of depreciation and amortization on the Unaudited Condensed Consolidated Statements of Operations for both the three and nine months ended September 30, 2018. The USA Compression Predecessor had no costs to fulfill a contract as of December 31, 2017 and amortization expense was zero for the three and nine months ended September 30, 2017.

Transactions with Related Parties	9 Months Ended
Transactions with Related Parties	Sep. 30, 2018
Transactions with Related Parties
Transactions with Related Parties	(14) Transactions with Related Parties We provide compression services to entities affiliated with ETP, which as of September 30, 2018, owned 26.6% of our limited partner interests, including all of the Class B Units. During the three and nine months ended September 30, 2018, we recognized $4.3 million and $12.8 million, respectively, in revenue from such affiliated entities and we had $1.8 million in receivables as of September 30, 2018 from such affiliated entities. Additionally, the Partnership had a $44.9 million related party receivable from ETP as of September 30, 2018 related to indemnification for sales tax contingencies incurred by the USA Compression Predecessor. See Note 16 for more information related to such sales tax contingencies. The USA Compression Predecessor also provided compression services to entities affiliated with ETP. During the three and nine months ended September 30, 2017, the USA Compression Predecessor recognized $4.4 million and $12.9 million, respectively, in revenue from such affiliated entities. As of December 31, 2017, the USA Compression Predecessor recognized $45,000 in related party receivables from such affiliated entities and $2.0 million in related party payables to such affiliated entities. Accounts receivable and payable that related to revenues and expenses between the USA Compression Predecessor and ETP were reclassified to Predecessor parent company net investment as there was no expectation that those amounts would be settled in cash. ETP provided certain benefits to the USA Compression Predecessor employees which did not continue following the Transactions Date. ETP provided medical, dental and other healthcare benefits to the USA Compression Predecessor employees. The total amount incurred by ETP for the benefit of the USA Compression Predecessor employees for the three and nine months ended September 30, 2018 and the three and nine months ended September 30, 2017 was $0, $1.9 million, $3.8 million and $5.5 million, respectively, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate. ETP also provided a matching contribution to the USA Compression Predecessor employees’ 401(k) accounts. The total amount of matching contributions incurred for the benefit of the USA Compression Predecessor employees for the three and nine months ended September 30, 2018 and the three and nine months ended September 30, 2017 was $0, $0.9 million, $1.6 million and $2.3 million, respectively, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate. ETP also provided a 3% profit sharing contribution to the 401(k) accounts for all USA Compression Predecessor employees with base compensation below a specified threshold. The contribution was in addition to the 401(k) matching contribution and employees became vested in the profit sharing contribution based on years of service. ETP allocated certain overhead costs associated with general and administrative services, including salaries and benefits, facilities, insurance, information services, human resources and other support departments to the USA Compression Predecessor which did not continue following the Transactions Date. Where costs incurred on the USA Compression Predecessor’s behalf could not be determined by specific identification, the costs were primarily allocated to the USA Compression Predecessor based on an average percentage of fixed assets, net income (loss) and adjusted EBITDA. The USA Compression Predecessor believes these allocations were a reasonable reflection of the utilization of services provided. However, the allocations may not fully reflect the expenses that would have been incurred had the USA Compression Predecessor been a standalone company during the periods presented. During the three and nine months ended September 30, 2018, ETP allocated general and administrative expenses of $0 million and $1.8 million, respectively, to the USA Compression Predecessor. During the three and nine months ended September 30, 2017, ETP allocated general and administrative expenses of $1.2 million and $3.2 million, respectively, to the USA Compression Predecessor.

Unit-based Compensation	9 Months Ended
Unit-based Compensation	Sep. 30, 2018
Unit-based Compensation
Unit-based Compensation	(15) Unit-Based Compensation Phantom Units Accelerated Vesting On April 2, 2018 and in connection with the closing of the CDM Acquisition, and pursuant to the change in control provisions of our outstanding phantom unit awards, all of the performance-based phantom units granted during 2018, 2017 and 2016 and outstanding as of April 2, 2018, vested immediately upon the change in control event at 100% of the target level. In addition, all outstanding time-based phantom units held by our CEO vested immediately upon the change in control event. As such, 563,544 outstanding phantom units vested resulting in $6.8 million of compensation expense recognized during the nine months ended September 30, 2018. During the three and nine months ended September 30, 2018, the Partnership granted 23,600 and 314,095 phantom units to employees. Unit-based compensation expense was $1.9 million and $10.9 million for the three and nine months ended September 30, 2018, respectively. All employees with phantom units have a portion of their award settled in cash and a portion settled in common units upon vesting. The amount that can be settled in cash is in excess of the employee’s minimum statutory tax-withholding rate. ASC Topic 718 Compensation-Stock Compensation, requires the entire amount of an award with such features to be accounted for as a liability. Under the liability method of accounting for unit-based compensation, we re-measure the fair value of the award at each financial statement date until the award vests or is cancelled. ETP had long-term incentive plans for the USA Compression Predecessor’s employees, officers and directors, which provided for various types of awards, including options to purchase ETP common units, restricted units, phantom units, distribution equivalent rights (“DERs”), ETP common unit appreciation rights and other unit-based awards. ETP had granted restricted unit awards to the USA Compression Predecessor’s employees that vested over a specified time period, typically five years, with vesting based on continued employment as of each applicable vesting date. Upon vesting, ETP common units were issued. These restricted unit awards also entitled the recipients of the unit awards to receive, with respect to each ETP common unit subject to such award that had not vested or been forfeited, a corresponding DER entitling the recipient to a cash payment equal to the cash distribution per ETP common unit paid by ETP to its unitholders promptly following each such distribution. All unit-based compensation awards were treated as equity within the USA Compression Predecessor financial statements. Employees of the USA Compression Predecessor were granted awards under these long-term incentive plans, and therefore the USA Compression Predecessor recognized unit-based compensation expense of $1.0 million and $3.2 million recorded in general and administrative expense in the statements of operations of the USA Compression Predecessor for the three and nine months ended September 30, 2017, respectively. On April 2, 2018 and in connection with the closing of the CDM Acquisition, and pursuant to the change in control provisions of the USA Compression Predecessor’s outstanding phantom unit awards, all of the USA Compression Predecessor’s outstanding phantom unit awards were forfeited.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	(16) Commitments and Contingencies (a) Major Customers Neither we nor the USA Compression Predecessor had revenue from any single customer representing 10% or more of total revenue for the three and nine months ended September 30, 2018 or 2017. (b) Litigation From time to time, we and our subsidiaries may be involved in various claims and litigation arising in the ordinary course of business. In management’s opinion, the resolution of such matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. (c) Equipment Purchase Commitments Our future capital commitments are comprised of binding commitments under purchase orders for new compression units and serialized parts ordered but not received. Those commitments as of September 30, 2018 were $126.4 million, the majority of which are expected to be settled throughout 2018 and 2019. (d) Sales Tax Contingency The Office of the Texas Comptroller of Public Accounts (“Comptroller”) has claimed that specific operational processes, which we and others in our industry regularly conduct, result in transactions that are subject to state sales taxes. We and other companies in our industry have disputed these claims based on existing tax statutes which provide for manufacturing exemptions on the transactions in question. The manufacturing exemptions are based on the fact that our natural gas compression equipment is used in the process of treating natural gas for ultimate use and sale. The USA Compression Predecessor has several open audits with the Comptroller for certain periods prior to the Transactions Date wherein the Comptroller has challenged the applicability of the manufacturing exemption. Any liability for the periods prior to the Transactions Date will be covered by an indemnity between us and ETP. As of September 30, 2018, we have recorded a $44.9 million accrued liability and $44.9 million related party receivable from ETP. During the three months ended September 30, 2018, we entered into a compromise and settlement agreement with the Comptroller for the audit of the Partnership for the period from January 2009 to August 2012 for a $0.2 million refund to the Partnership. For more information, please see Note 13 to the consolidated financial statements included in our 2017 Annual Report.

Recent Accounting Pronouncements	9 Months Ended
Recent Accounting Pronouncements	Sep. 30, 2018
Recent Accounting Pronouncements
Recent Accounting Pronouncements	(17) Recent Accounting Pronouncements In February 2016, the FASB issued ASC Topic 842 Leases (“ASC Topic 842”). ASC Topic 842 is a new leasing standard that increases transparency and comparability among organizations by, among other things, requiring lessees to recognize most lease assets and lease liabilities on the balance sheet and requiring both lessees and lessors to disclose expanded qualitative and quantitative information about leasing arrangements. ASC Topic 842 becomes effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption of this standard is permitted. In March 2018, the FASB approved amendments to ASC Topic 842 which allow the additional transition method of using the effective date as the date of initial application, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings as of the effective date. We will adopt this new standard on January 1, 2019 and plan to use the current period adjustment method. We are finalizing our analysis to determine the financial impact of adopting this standard on our consolidated financial statements and related disclosures. We are implementing processes and information technology tools to assist in our ongoing lease data collection and analysis, and updating our accounting policies and internal controls that would be impacted by the new guidance, to ensure readiness for adoption in the first quarter of 2019. In August 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (“ASC Topic 820”): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments to ASC Topic 820 eliminate, add and modify certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. The amendments in this update are effective for interim and annual periods beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the impact, if any, of the amendments to ASC Topic 820 on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (“ASC Subtopic 350-40”): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments to ASC Subtopic 350-40 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments to ASC Subtopic 350-40. The amendments in this update are effective for interim and annual periods beginning on January 1, 2020, with early adoption permitted. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the impact, if any, of the amendments to ASC Subtopic 350-40 on our consolidated financial statements.

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2018
Subsequent Events
Subsequent Events	(18) Subsequent Events Amendment to the USA Compression Partners, LP 2013 Long-Term Incentive Plan On November 1, 2018 and effective the same day, the Board of Directors of the General Partner (the “Board”) approved and adopted an amendment to the USA Compression Partners, LP 2013 Long-Term Incentive Plan (“LTIP”) which, among other things, increases the number of common units of the Partnership available to be awarded under the LTIP by 8,590,000 common units (which brings the total number of common units available to be awarded under the LTIP to 10,000,000 common units) and extends the term of the LTIP until November 1, 2028. Retention Phantom Unit Agreements Also on November 1, 2018, the Partnership entered into Retention Phantom Unit Agreements (“Agreements”) under the LTIP with certain executive officers of our General Partner. An aggregate of 170,000 phantom units (including the corresponding DERs) were granted under these Agreements. The phantom units and corresponding DERs awarded are subject to restrictions on transferability, customary forfeiture provisions and certain retention provisions, that will vest incrementally, with 60% of the phantom units vesting on December 5, 2021 and 40% of the phantom units vesting on December 5, 2023.

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Basis of Presentation and Summary of Significant Accounting Policies

Use of Estimates

Cash and Cash Equivalents

Cash and cash equivalents consist of all cash balances. We consider investments in highly liquid financial instruments purchased with an original maturity of 90 days or less to be cash equivalents.

Inventory

Identifiable Intangible Assets

Property and Equipment

Impairments of Long-Lived Assets

Impairment of Long-Lived Assets

The USA Compression Predecessor did not record any impairment of long-lived assets during the three and nine months ended September 30, 2017.

Goodwill

Neither we nor the USA Compression Predecessor recorded any impairment of goodwill during the three and nine months ended September 30, 2018 and 2017, respectively.

Pass Through Taxes

Sales taxes incurred on behalf of, and passed through to, customers are accounted for on a net basis.

Fair Value Measurements

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date.

Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.


	September 30, 2018		December 31, 2017
Assets (Liabilities)	Level 2		Level 2
Carrying amount of Senior Notes (1)	$	708,939	$	—
Fair value of Senior Notes		748,563		—

(1)

Operating Segment

We operate in a single business segment, the compression services business.

Parent Company Net Investment

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Basis of Presentation and Summary of Significant Accounting Policies

Schedule of assets and liabilities that are measured at fair value on a recurring basis

The following table summarizes the carrying amount and fair value of these assets and liabilities (in thousands):


	September 30, 2018		December 31, 2017
Assets (Liabilities)	Level 2		Level 2
Carrying amount of Senior Notes (1)	$	708,939	$	—
Fair value of Senior Notes		748,563		—

(1)

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

Acquisitions

Schedule of purchase price allocation (in thousands)

The following table summarizes the assumed purchase price and fair value and the allocation to the assets acquired and liabilities assumed (in thousands):


Assumed purchase price allocation to USA Compression Partners, LP
Current assets	$	786,258
Fixed assets		1,331,850
Other long-term assets		15,018
Customer relationships		221,500
Total identifiable assets acquired		2,354,626
Current liabilities		(110,465)
Long-term debt		(1,526,865)
Other long-term liabilities		(1,538)
Total liabilities assumed		(1,638,868)
Net identifiable assets acquired		715,758
Goodwill (1)		365,983
Net assets acquired	$	1,081,741

April 2, 2018 Transactions:
Cash used in the CDM Acquisition		(710,506)
Issuance of Preferred Units		(465,121)
Issuance of Class B Units for the CDM Acquisition		(86,125)
Issuance of Warrants		(13,979)
Issuance of common units for the Equity Restructuring		(135,440)
Issuance of common units for the CDM Acquisition		(324,910)
Purchase Price Adjustment for USA Compression Partners, LP	$	(654,340)

(1)

Summary of pro forma financial information


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Total revenues	$	168,947	$	139,223	$	490,114	$	417,670
Net loss	$	(563)	$	(86,249)	$	(53,839)	$	(258,746)
Net loss attributable to common and Class B unitholders' interests	$	(12,751)	$	(98,436)	$	(90,269)	$	(295,309)
Basic and diluted net loss per common unit and Class B Unit	$	(0.72)	$	(1.03)	$	(0.95)	$	(3.10)

Inventory (Tables)

9 Months Ended

Sep. 30, 2018

Inventory

Significant components of inventory

Components of inventory are as follows (in thousands):


	September 30, 2018		December 31, 2017
Serialized parts	$	40,997	$	—
Non-serialized parts		42,327		34,335
Total Inventory, gross		83,324		34,335
Less: obsolete and slow moving reserve		(281)		(1,114)
Total Inventory, net	$	83,043	$	33,221

Property And Equipment, Identifiable Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2018

Property And Equipment, Identifiable Intangible Assets and Goodwill

Schedule of property and equipment (in thousands)

Property and equipment consisted of the following (in thousands):


	September 30, 2018		December 31, 2017
Compression and treating equipment	$	3,224,882	$	1,799,151
Furniture and fixtures		1,114		780
Automobiles and vehicles		48,319		41,796
Computer equipment		51,896		25,049
Buildings		9,335		13,891
Land		77		77
Leasehold improvements		5,264		2,051
Total Property and equipment, gross		3,340,887		1,882,795
Less: accumulated depreciation and amortization		(799,544)		(689,874)
Total Property and equipment, net	$	2,541,343	$	1,192,921

Schedule of Estimated Useful Lives of Property, Plant and Equipment


Compression equipment, acquired new		25 years
Compression equipment, acquired used		5 - 25 years
Furniture and fixtures		3 - 10 years
Vehicles and computer equipment		1 - 10 years
Buildings		5 years
Leasehold improvements		5 years

Schedule of identifiable intangible assets

Identifiable intangible assets, net consisted of the following (in thousands):


	Customer
	Relationships		Trade Names		Total
Net Balance at December 31, 2017	$	157,551	$	40,664	$	198,215
Additions (1)		221,500		—		221,500
Amortization expense		(18,471)		(2,456)		(20,927)
Net Balance at September 30, 2018	$	360,580	$	38,207	$	398,788

(1)

Identifiable intangible assets were determined as part of the purchase price allocation to the Partnership’s assets acquired by the USA Compression Predecessor.

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2018

Income Taxes

Schedule of components of income tax expense (benefits)

Components of our income tax expense (benefit) related to the Texas Margin Tax are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Current tax expense	$	120	$	(42)	$	239	$	—
Deferred tax expense (benefit)	$	(1,038)	$	1,946	$	(1,863)	$	3,954
Total income tax expense (benefit)	$	(918)	$	1,904	$	(1,624)	$	3,954

Schedule of tax effects of temporary differences that gave rise to deferred tax liabilities

The tax effects of temporary differences that give rise to deferred tax liabilities are as follows (in thousands):


	September 30, 2018		December 31, 2017
Deferred tax liability - Property and equipment	$	3,340	$	3,791

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Long-Term Debt

Schedule of long-term debt of the Partnership (in thousands)

Our long-term debt, of which there is no current portion, consisted of the following (in thousands):


	September 30, 2018		December 31, 2017
Revolving credit facility	$	1,021,824	$	—
Senior Notes, aggregate principal		725,000		—
Less: deferred financing costs, net of amortization		(16,061)		—
Senior Notes, net		708,939		—
Total long-term debt, net	$	1,730,763	$	—

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Partners' Capital (Tables)

9 Months Ended

Sep. 30, 2018

Partners' Capital.

Schedule of cash distributions (in millions, except distribution per unit)


	Distribution per		Amount Paid to		Amount Paid to		Amount Paid to
	Limited Partner		Common		General		Phantom		Total
Payment Date	Unit		Unitholders		Partner		Unitholders		Distribution
August 11, 2017	$	0.525	$	32.3	$	0.8	$	0.6	$	33.7
November 10, 2017	$	0.525	$	32.6	$	0.8	$	0.5	$	33.9
February 14, 2018	$	0.525	$	32.7	$	0.8	$	0.8	$	34.3
May 11, 2018	$	0.525	$	47.2	$	—	$	0.4	$	47.6
August 10, 2018	$	0.525	$	47.2	$	—	$	0.4	$	47.6

Preferred Units and Warrants (Tables)

9 Months Ended

Sep. 30, 2018

Preferred Units and Warrants

Changes in the Preferred Units balance

The changes in the Preferred Units balance from December 31, 2017 through September 30, 2018 are summarized below (in thousands):


	Preferred Units
Balance at December 31, 2017	$	—
Issuance of Preferred Units on April 2, 2018, net		465,121
Net income allocated for April 2, 2018 through September 30, 2018		24,242
Distributions received by Preferred Unitholders		(12,054)
Balance at September 30, 2018	$	477,309

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2018

Revenue Recognition

Disaggregation of revenue by type of service

The following table disaggregates our revenue by type of service (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017 (1)		2018		2017 (1)
Contract operations revenue	$	162,895	$	66,914	$	396,134	$	195,320
Retail parts and services revenue		4,763		—		10,884		—
Station installations revenue		1,289		4,175		5,357		8,412
Total revenues	$	168,947	$	71,089	$	412,375	$	203,732

(1)

As noted above, prior period amounts have not been adjusted under the modified retrospective method of ASC Topic 606.

Disaggregation of revenue by timing of transfer of services

The following table disaggregates our revenue by timing of provision of services or transfer of goods (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017 (1)		2018		2017 (1)
Services provided or goods transferred at a point in time	$	4,763	$	—	$	10,884	$	—
Services provided over time:
Recurring term contracts:
Primary term		84,620		32,672		199,027		101,060
Month-to-month		78,275		34,242		197,107		94,260
Non-recurring term contracts:
Station installations		1,289		4,175		5,357		8,412
Total revenues	$	168,947	$	71,089	$	412,375	$	203,732

(1)

As noted above, prior period amounts have not been adjusted under the modified retrospective method of ASC Topic 606.

Organization and Description of the Business (Details) - USD ($) $ in Millions		1 Months Ended
	Apr. 02, 2018	Oct. 31, 2018
CDM
Organization
Aggregate consideration	$ 1,700
Cash paid	1,232
General partner \| ETP \| Subsequent Event
Organization
General partner interest (as a percent)		100.00%
Common units \| ETE
Organization
Cash paid	$ 250
Common units \| ETP
Organization
Number of units transferred in exchange for consideration	12,466,912
Common units \| General partner \| Equity Restructuring Agreement
Organization
Units issued	8,000,000
Common units \| Limited partner \| CDM
Organization
Number of units issued in exchange for consideration	19,191,351
Class B Units \| Limited partner \| CDM
Organization
Number of units issued in exchange for consideration	6,397,965

Basis of Presentation and Summary of Significant Accounting Policies - Partnership (Details) - USD ($) $ in Thousands		9 Months Ended
	Apr. 02, 2018	Sep. 30, 2018
Decrease to partners' capital		$ 37,178
CDM
Aggregate consideration	$ 1,700,000

Basis of Presentation and Summary of Significant Accounting Policies - Intangibles (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Identifiable intangible assets, net
Additions			$ 221,500,000
Accumulated amortization	$ 151,800,000		151,800,000		$ 130,900,000
Net Balance	398,788,000		398,788,000		198,215,000
Amortization expense			(20,927,000)
Expected aggregate amortization expense of the intangible assets for each of the five succeeding years
2018	31,600,000		31,600,000
2019	31,600,000		31,600,000
2020	31,600,000		31,600,000
2021	31,600,000		31,600,000
2022	31,600,000		31,600,000
Impairment of intangible assets	0	$ 0	0	$ 0
Impairment of goodwill	0	$ 0	0	$ 0
Goodwill	619,411,000		619,411,000		253,428,000
Interest Costs Capitalized	200,000		$ 300,000
Minimum
Identifiable intangible assets, net
Finite-Lived Intangible Asset, Useful Life			9 years
Maximum
Identifiable intangible assets, net
Finite-Lived Intangible Asset, Useful Life			20 years
Customer Relationships
Identifiable intangible assets, net
Additions			$ 221,500,000
Net Balance	360,580,000		360,580,000		157,551,000
Amortization expense			(18,471,000)
Trade Names
Identifiable intangible assets, net
Net Balance	$ 38,207,000		38,207,000		$ 40,664,000
Amortization expense			$ (2,456,000)

Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) item hp	Sep. 30, 2017 USD ($)
Property and Equipment
Number of compressor units that are to be retired or sold or reutilized \| item			18
Number of horsepower that are to be retired or sold or reutilized. \| hp			5,800
Capitalized interest	$ 0.2		$ 0.3
Impairments of long-lived assets
Impairment of long-lived assets	2.3	$ 0.0	2.3	$ 0.0
Impairment of goodwill	$ 0.0	0.0	$ 0.0	0.0
Newly acquired compression equipment
Property and Equipment
Estimated useful lives			25 years
Used compression equipment \| Minimum
Property and Equipment
Estimated useful lives			5 years
Used compression equipment \| Maximum
Property and Equipment
Estimated useful lives			25 years
Compression equipment overhauls \| Minimum
Property and Equipment
Estimated useful lives			3 years
Compression equipment overhauls \| Maximum
Property and Equipment
Estimated useful lives			5 years
Vehicles and computer equipment \| Minimum
Property and Equipment
Estimated useful lives			1 year
Vehicles and computer equipment \| Maximum
Property and Equipment
Estimated useful lives			10 years
Leasehold improvements
Property and Equipment
Estimated useful lives			5 years
Predecessor
Property and Equipment
Capitalized interest		$ 0.0		$ 0.0

Basis of Presentation and Summary of Significant Accounting Policies - Fair Value (Details) - Level 2 $ in Thousands	Sep. 30, 2018 USD ($)
Carrying amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	$ 708,939
Fair value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	$ 748,563

Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Apr. 02, 2018	Mar. 31, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Decrease to partners' capital				$ 37,178
Transition services agreement expenses				700
Assumed purchase price allocation
Goodwill	$ 619,411		$ 619,411	619,411				$ 253,428
Pro forma information
Total revenues	168,947	$ 139,223		490,114	$ 417,670
Net loss	(563)	(86,249)		(53,839)	(258,746)
Net loss attributable to common and Class B unitholders' interests	$ (12,751)	$ (98,436)		$ (90,269)	$ (295,309)
Basic and diluted net loss per common unit and Class B Unit	$ (0.72)	$ (1.03)		$ (0.95)	$ (3.10)
Employee severance related expenses	$ 1,000			$ 1,000
Advisory, audit and legal fees	21,700			21,700
Limited partner \| Common units
Business Acquisition [Line Items]
Decrease to partners' capital				37,178
USA Compression Partners, LP
Business Acquisition [Line Items]
Transaction-related expenses							$ 21,700
Revenue			177,000
Net income			10,800
Assumed purchase price allocation
Current assets						$ 786,258
Fixed Assets						1,331,850
Other long-term assets						15,018
Customer Relationships						221,500
Total identifiable assets acquired						2,354,626
Current liabilities						(110,465)
Long-term debt						(1,526,865)
Other long-term liabilities						(1,538)
Total liabilities assumed						(1,638,868)
Net identifiable assets acquired						715,758
Goodwill						365,983
Net assets acquired						1,081,741
Purchase price adjustment
Cash used in the CDM Acquisition						(710,506)
Issuance of common units for the Equity Restructuring						(135,440)
Purchase Price Adjustment for USA Compression Partners, LP						(654,340)
USA Compression Partners, LP \| Preferred Units
Purchase price adjustment
Issuance of units						(465,121)
USA Compression Partners, LP \| Class B Units
Purchase price adjustment
Issuance of units						(86,125)
USA Compression Partners, LP \| Warrants
Purchase price adjustment
Issuance of units						(13,979)
USA Compression Partners, LP \| Common units
Purchase price adjustment
Issuance of units						$ (324,910)
Predecessor
Assumed purchase price allocation
Goodwill	$ 366,000		$ 366,000	$ 366,000

Trade Accounts Receivable (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Trade Accounts Receivable (Details) - USD ($) $ in Millions	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Trade Accounts Receivable
Allowance for doubtful accounts	$ 1.7		$ 1.7		$ 0.8
Increase in allowance for doubtful accounts	$ 0.5		$ 0.9
Allowance for doubtful accounts receivable, reduction		$ 0.2		$ 3.7

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Inventory
Serialized parts	$ 40,997
Non-serialized parts	42,327	$ 34,335
Total Inventory, gross	83,324	34,335
Less: obsolete and slow moving reserve	(281)	(1,114)
Total Inventory, net	$ 83,043	$ 33,221

Property And Equipment, Identifiable Intangible Assets and Goodwill - Property and Equipment (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Property and Equipment
Property and Equipment, gross	$ 3,340,887		$ 3,340,887		$ 1,882,795
Less accumulated depreciation and amortization	(799,544)		(799,544)		(689,874)
Property and Equipment, net	2,541,343		2,541,343		1,192,921
Depreciation expense	51,500	$ 37,400	136,000	$ 107,500
Operating income	23,940	(10,400)	28,744	(28,468)
Net income	(563)	(12,355)	(20,736)	(32,518)
(Loss) gain on disposition of assets	(1,300)	$ (500)	(12,300)	$ 200
Accounts payable and accrued liabilities
Property and Equipment
Purchases of property and equipment			34,200		14,600
Compression and treating equipment
Property and Equipment
Property and Equipment, gross	3,224,882		$ 3,224,882		1,799,151
Newly acquired compression equipment
Property and Equipment
Estimated useful lives			25 years
Furniture and fixtures
Property and Equipment
Property and Equipment, gross	1,114		$ 1,114		780
Automobiles and vehicles
Property and Equipment
Property and Equipment, gross	48,319		48,319		41,796
Computer equipment
Property and Equipment
Property and Equipment, gross	51,896		51,896		25,049
Buildings
Property and Equipment
Property and Equipment, gross	9,335		$ 9,335		13,891
Estimated useful lives			5 years
Land
Property and Equipment
Property and Equipment, gross	77		$ 77		77
Leasehold improvements
Property and Equipment
Property and Equipment, gross	5,264		$ 5,264		$ 2,051
Estimated useful lives			5 years
Minimum \| Used compression equipment
Property and Equipment
Estimated useful lives			5 years
Minimum \| Furniture and fixtures \| Estimated useful lives
Property and Equipment
Estimated useful lives			3 years
Minimum \| Vehicles and computer equipment
Property and Equipment
Estimated useful lives			1 year
Maximum \| Used compression equipment
Property and Equipment
Estimated useful lives			25 years
Maximum \| Furniture and fixtures \| Estimated useful lives
Property and Equipment
Estimated useful lives			10 years
Maximum \| Vehicles and computer equipment
Property and Equipment
Estimated useful lives			10 years
Predecessor
Property and Equipment
Net income			$ (23,370)
Adjustment \| Estimated useful lives
Property and Equipment
Operating income	11,300		22,500
Net income	$ 11,300		$ 22,500
Basic and diluted earnings per common unit and Class B Unit (in dollars per unit)	$ 0.12		$ 0.30

Property And Equipment, Identifiable Intangible Assets and Goodwill - Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Identifiable intangible assets, net
Net Balance, beginning of period			$ 198,215
Additions			221,500
Amortization expense			(20,927)
Net Balance, end of period	$ 398,788		398,788
Accumulated amortization	151,800		151,800		$ 130,900
Expected amortization, year one	31,600		31,600
Expected amortization, year two	31,600		31,600
Expected amortization, year three	31,600		31,600
Expected amortization, year four	31,600		31,600
Expected amortization, year five	31,600		31,600
Goodwill	619,411		619,411		$ 253,428
Impairment of goodwill	0	$ 0	0	$ 0
Customer Relationships
Identifiable intangible assets, net
Net Balance, beginning of period			157,551
Additions			221,500
Amortization expense			(18,471)
Net Balance, end of period	360,580		360,580
Trade Names
Identifiable intangible assets, net
Net Balance, beginning of period			40,664
Amortization expense			(2,456)
Net Balance, end of period	38,207		38,207
Predecessor
Identifiable intangible assets, net
Goodwill	$ 366,000		$ 366,000

Installment Receivable (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Installment Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Installment Receivable
Long-term installment receivable	$ 7,544		$ 7,544
Revenue	158,664	$ 62,645	383,732	$ 182,737
Interest income on capital lease transactions	200		500
Sales type lease
Installment Receivable
Installment receivable, current	3,500		3,500
Long-term installment receivable	7,500		7,500
BPO Capital Lease Transaction
Installment Receivable
Revenue	$ 300		$ 600
Maximum \| Sales type lease
Installment Receivable
Lease term in years			7 years

Accrued Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Accrued Liabilities
Accrued sales tax	$ 44.9
Accrued property taxes	13.2
Accrued payroll and benefits	$ 11.3
Predecessor
Accrued Liabilities
Accrued property taxes		$ 0.7
Accrued equipment and other asset purchases		27.8
Accrued payroll and benefits		$ 8.3

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Components of income tax expense
Deferred tax expense (benefit)			$ (1,863)	$ 3,954
Total income tax expense (benefit)	$ (918)	$ 1,904	(1,624)	3,954
Deferred tax liabilities
Deferred tax liability - Property and equipment	3,340		$ 3,340		$ 3,791
Texas
Components of income tax expense
Texas margin tax (as a percent)			0.75%
Minimum tax base (as a percent)			70.00%
Current tax expense	120	(42)	$ 239
Deferred tax expense (benefit)	(1,038)	1,946	(1,863)	3,954
Total income tax expense (benefit)	$ (918)	$ 1,904	$ (1,624)	$ 3,954

Long-Term Debt (Details)	3 Months Ended	6 Months Ended	9 Months Ended
Long-Term Debt (Details)	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)	Apr. 02, 2018 USD ($)	Dec. 31, 2017 USD ($)
Long-term debt
Total long-term debt	$ 1,730,763,000	$ 1,730,763,000	$ 1,730,763,000
Loan fees and incurred costs paid during period			17,615,000
Amount of indebtedness repaid			279,651,000
Assets or operations independent of subsidiaries	0	0	$ 0
Ownership interest in guarantors (as a percent)			100.00%
Restricted net assets of subsidiaries	0	0	$ 0
Revolving credit facility
Long-term debt
Long-term debt, current portion	0	0	0		$ 0
Total long-term debt	1,021,824,000	1,021,824,000	1,021,824,000
Maximum borrowing capacity				$ 1,600,000,000
Amount of further potential increase in maximum capacity				400,000,000
Availability under credit agreement				$ 100,000,000
Loan fees and incurred costs paid during period			14,300,000
Increase in maximum funded debt to EBITDA ratio in connection with certain future acquisitions				0.5
Borrowing base availability	578,200,000	578,200,000	578,200,000
Borrowing capacity, subject to covenants	$ 309,700,000	$ 309,700,000	$ 309,700,000
Effective interest rate (as a percent)	4.68%	4.68%	4.68%
Weighted average interest rate (as a percent)	4.65%	4.60%
Letters of credit	$ 0	$ 0	$ 0
Revolving credit facility \| Minimum
Long-term debt
Minimum EBITDA to interest coverage ratio				2.5
Revolving credit facility \| Maximum \| Through the end of the fiscal quarter ending March 31, 2019
Long-term debt
Maximum Funded debt to EBITDA ratio				5.75
Revolving credit facility \| Maximum \| Through the end of the fiscal quarter ending December 31, 2019
Long-term debt
Maximum Funded debt to EBITDA ratio				5.5
Revolving credit facility \| Maximum \| Thereafter
Long-term debt
Credit facility leverage ratio				5.00
Senior Notes
Long-term debt
Long-term debt, aggregate principal	725,000,000	725,000,000	725,000,000
Less: deferred financing costs, net of amortization	(16,061,000)	(16,061,000)	(16,061,000)
Total long-term debt	$ 708,939,000	$ 708,939,000	$ 708,939,000
Effective interest rate (as a percent)	6.875%	6.875%	6.875%
Deferred finances costs, gross	$ 17,300,000	$ 17,300,000	$ 17,300,000
Senior Notes \| Redemption required from hypothetical change of control or ratings decline
Long-term debt
Redemption price (as a percent)			101.00%
Senior Notes \| Prior to April 1, 2021
Long-term debt
Principal amount redeemed (as a percent)			35.00%
Redemption price (as a percent)			106.875%
Principal amount of debt outstanding after redemption (as a percent)			65.00%
Redemption within number of days of equity offering			180 days
Senior Notes \| Twelve-month period beginning on April 1, 2021
Long-term debt
Redemption price (as a percent)			105.156%
Senior Notes \| Twelve-month period beginning on April 1, 2022
Long-term debt
Redemption price (as a percent)			103.438%
Senior Notes \| Twelve-month period beginning on April 1, 2023
Long-term debt
Redemption price (as a percent)			101.719%
Senior Notes \| April 1, 2024 and at any time thereafter
Long-term debt
Redemption price (as a percent)			100.00%

Partners' Capital (Details) - shares	Oct. 31, 2018	Sep. 30, 2018
Common units \| ETP \| Subsequent Event
Partners' Capital
Partners' capital (in units)	39,658,263
Limited partner \| Class B Units
Partners' Capital
Partners' capital (in units)		6,397,965
Limited partner \| Common units
Partners' Capital
Partners' capital (in units)		89,966,676
Limited partner \| Common units \| ETE
Partners' Capital
Partners' capital (in units)		20,466,912
Limited partner \| Common units \| ETP
Partners' Capital
Partners' capital (in units)		19,191,351
General partner \| Common units \| ETE
Partners' Capital
Partners' capital (in units)		8,000,000
General partner \| Common units \| ETP \| Subsequent Event
Partners' Capital
Partners' capital (in units)	8,000,000

Partners' Capital - Cash Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands							9 Months Ended
	Oct. 18, 2018	Aug. 10, 2018	May 11, 2018	Feb. 14, 2018	Nov. 10, 2017	Aug. 11, 2017	Sep. 30, 2018
Cash Distributions
Non-cash distributions							$ 424
Cash Distributions
Cash Distributions
Total Distribution		$ 47,600	$ 47,600	$ 34,300	$ 33,900	$ 33,700
Distribution reinvestment plan ("DRIP")
Cash Distributions
Common Unit, Issued							24,261
Common units
Cash Distributions
Limited partner units issued (in shares)							89,967,000
Phantom Unitholders \| Cash Distributions
Cash Distributions
Total Distribution		$ 400	$ 400	$ 800	$ 500	$ 600
Limited partner \| Common and Subordinated Units \| Cash Distributions
Cash Distributions
Distribution per Limited Partner Unit (in dollars per share)		$ 0.5250	$ 0.5250	$ 0.5250	$ 0.5250	$ 0.5250
Limited partner \| Common and Subordinated Units \| Distribution reinvestment plan ("DRIP")
Cash Distributions
Non-cash distributions							$ 400
Limited partner \| Common units \| Cash Distributions
Cash Distributions
Total Distribution		$ 47,200	$ 47,200	$ 32,700	$ 32,600	$ 32,300
Cash distribution announced per unit (in dollars per share)	$ 0.525
General partner \| Cash Distributions
Cash Distributions
Total Distribution				$ 800	$ 800	$ 800

Partners' Capital - Earnings Per Common and Subordinated Unit & Incentive Distribution Rights (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2018 $ / shares shares	Sep. 30, 2018 $ / shares shares
Phantom units
Partners' Capital
Units or warrants excluded from computation of earnings per unit \| shares	156,000	52,000
Warrants
Partners' Capital
Units or warrants excluded from computation of earnings per unit \| shares	0	31,000
Limited partner \| Incentive Distribution Rights \| Minimum Quarterly Distribution
Incentive Distribution Rights
Marginal percentage interest in distributions		98.80%
Limited partner \| Incentive Distribution Rights \| First Target Distribution
Incentive Distribution Rights
Marginal percentage interest in distributions		98.80%
Limited partner \| Incentive Distribution Rights \| Second Target Distribution
Incentive Distribution Rights
Marginal percentage interest in distributions		85.80%
Limited partner \| Incentive Distribution Rights \| Third Target Distribution
Incentive Distribution Rights
Marginal percentage interest in distributions		75.80%
Limited partner \| Incentive Distribution Rights \| Thereafter
Incentive Distribution Rights
Marginal percentage interest in distributions		50.80%
General partner \| Incentive Distribution Rights \| Minimum Quarterly Distribution
Incentive Distribution Rights
Distribution per unit (in dollars per share)	$ 0.425	$ 0.425
Marginal percentage interest in distributions		1.20%
General partner \| Incentive Distribution Rights \| First Target Distribution
Incentive Distribution Rights
Marginal percentage interest in distributions		1.20%
General partner \| Incentive Distribution Rights \| First Target Distribution \| Maximum
Incentive Distribution Rights
Distribution per unit (in dollars per share)	0.4888	$ 0.4888
General partner \| Incentive Distribution Rights \| Second Target Distribution
Incentive Distribution Rights
Marginal percentage interest in distributions		14.20%
General partner \| Incentive Distribution Rights \| Second Target Distribution \| Minimum
Incentive Distribution Rights
Distribution per unit (in dollars per share)	0.4888	$ 0.4888
General partner \| Incentive Distribution Rights \| Second Target Distribution \| Maximum
Incentive Distribution Rights
Distribution per unit (in dollars per share)	0.5313	$ 0.5313
General partner \| Incentive Distribution Rights \| Third Target Distribution
Incentive Distribution Rights
Marginal percentage interest in distributions		24.20%
General partner \| Incentive Distribution Rights \| Third Target Distribution \| Minimum
Incentive Distribution Rights
Distribution per unit (in dollars per share)	0.5313	$ 0.5313
General partner \| Incentive Distribution Rights \| Third Target Distribution \| Maximum
Incentive Distribution Rights
Distribution per unit (in dollars per share)	0.6375	$ 0.6375
General partner \| Incentive Distribution Rights \| Thereafter
Incentive Distribution Rights
Marginal percentage interest in distributions		49.20%
General partner \| Incentive Distribution Rights \| Thereafter \| Minimum
Incentive Distribution Rights
Distribution per unit (in dollars per share)	$ 0.6375	$ 0.6375

Preferred Units and Warrants (Details) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Apr. 02, 2018 USD ($) tranche $ / shares shares	Sep. 30, 2018 USD ($)	Jun. 30, 2018 $ / shares	Sep. 30, 2018 USD ($) $ / shares
Distributions received by Preferred Unitholders		$ (12,188)		$ (24,242)
Ending balance		477,309		$ 477,309
EIG
Number of tranches of warrants \| tranche	2
Series A Preferred Units
Distribution per unit (in dollars per share) \| $ / shares			$ 24.107
Preferred units, if redeemed, electable to be paid in common units (as a percent)				50.00%
Issuance of Preferred Units on April 2, 2018, net				$ 465,121
Net income allocated for April 2, 2018 through September 30, 2018				24,242
Distributions received by Preferred Unitholders				(12,054)
Ending balance		$ 477,309		$ 477,309
Series A Preferred Units \| On or after April 2, 2021
Preferred units convertible into common units at option of unitholders (as a percent)				33.33%
Series A Preferred Units \| On or after April 2, 2022
Preferred units convertible into common units at option of unitholders (as a percent)				66.67%
Series A Preferred Units \| On or after April 2, 2023
Preferred units convertible into common units at option of unitholders (as a percent)				100.00%
Series A Preferred Units \| Quarterly
Distribution per unit (in dollars per share) \| $ / shares				$ 24.375
Series A Preferred Units \| EIG
Proceeds from private placement sale	$ 500,000
Units issued \| shares	500,000
Face value (per unit) \| $ / shares	$ 1,000
Tranche 1 \| Common units \| EIG
Number of shares that can be purchased on the warrant \| shares	5,000,000
Warrant strike price \| $ / shares	$ 17.03
Tranche 2 \| Common units \| EIG
Number of shares that can be purchased on the warrant \| shares	10,000,000
Warrant strike price \| $ / shares	$ 19.59

Revenue Recognition (Disaggregated Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of Revenue [Line Items]
Total revenues	$ 168,947	$ 71,089	$ 412,375	$ 203,732
Services provided or goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	4,763		10,884
Recurring term contracts: Primary Term
Disaggregation of Revenue [Line Items]
Total revenues	84,620	32,672	199,027	101,060
Recurring term contracts: Month-to-month
Disaggregation of Revenue [Line Items]
Total revenues	78,275	34,242	197,107	94,260
Non-recurring term contracts: Station installations
Disaggregation of Revenue [Line Items]
Total revenues	1,289	4,175	5,357	8,412
Contract operations revenue
Disaggregation of Revenue [Line Items]
Total revenues	162,895	66,914	396,134	195,320
Retail parts and services revenue
Disaggregation of Revenue [Line Items]
Total revenues	4,763		10,884
Station installations revenue
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,289	$ 4,175	$ 5,357	$ 8,412

Revenue Recognition (Details) $ in Millions	3 Months Ended	9 Months Ended
Revenue Recognition (Details) $ in Millions	Sep. 30, 2018 USD ($)	Sep. 30, 2018 USD ($)
Revenue from External Customer [Line Items]
Contract assets	$ 0.0	$ 0.0
Trade accounts receivable increase		36.2
Deferred revenue	31.0	31.0
Deferred Revenue, revenue recognized		1.0
Capitalized contract cost, costs to fulfill a contract	0.1	0.1
Capitalized contract cost, amortization	$ 0.1	$ 0.1
Contract operations revenue
Revenue from External Customer [Line Items]
Services generally billed in number of months in advance of service commencement		1 month
Expected timing of satisfaction of service, period	30 days	30 days
Contract operations revenue \| Minimum
Revenue from External Customer [Line Items]
Typical initial contract terms		6 months
Contract operations revenue \| Maximum
Revenue from External Customer [Line Items]
Typical initial contract terms		5 years
Retail parts and services revenue
Revenue from External Customer [Line Items]
Expected timing of satisfaction of service, period	30 days	30 days
Predecessor
Revenue from External Customer [Line Items]
Capitalized contract cost, amortization	$ 0.0	$ 0.0

Transactions with Related Parties (Details) - USD ($)		3 Months Ended		9 Months Ended
Transactions with Related Parties (Details) - USD ($)	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Transactions with Related Parties
Revenue from related parties		$ 4,271,000	$ 4,383,000	$ 12,807,000	$ 12,925,000
ETP
Transactions with Related Parties
Related party receivables	$ 44,900,000	44,900,000		44,900,000
ETP \| Limited partner
Transactions with Related Parties
Ownership interest (as a percent)	26.60%
Entities affiliated with ETP
Transactions with Related Parties
Revenue from related parties		4,300,000		12,800,000
Related party receivables	$ 1,800,000	1,800,000		1,800,000
Predecessor \| ETP
Transactions with Related Parties
Medical, dental and other healthcare benefits		0	3,800,000	1,900,000	5,500,000
401(k) contribution cost		0	1,600,000	$ 900,000	2,300,000
401(k) match (as a percent)				3.00%
Related party, general and administrative expenses		$ 0	$ 1,200,000	$ 1,800,000	$ 3,200,000
Predecessor \| Entities affiliated with ETP
Transactions with Related Parties
Related party receivables						$ 45,000
Related party payables						$ 2,000,000

Unit-based Compensation (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended		12 Months Ended
Unit-based Compensation (Details) - USD ($) $ in Millions	Apr. 02, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Unit-based Compensation
Compensation expense		$ 1.9		$ 10.9
LTIP \| Phantom units
Unit-based Compensation
Percentage of outstanding unvested phantom units that vested upon change in control	100.00%
Number of Units
Granted (in units)				314,095
LTIP \| Employees \| Phantom units
Unit-based Compensation
Compensation expense				$ 6.8
Number of Units
Granted (in units)		23,600
Vested (in units)				563,544
Predecessor \| ETP \| Executive officers, employees and independent directors
Unit-based Compensation
Compensation expense			$ 1.0		$ 3.2
Vesting period						5 years

Commitments and Contingencies - Purchase Commitments (Details) $ in Millions	3 Months Ended
	Sep. 30, 2018 USD ($)
Other commitments
Sales and local taxes accrued	$ 44.9
Sales tax refund	0.2
Compression units
Other commitments
Future purchase commitments	126.4
ETP
Other commitments
Accrued liabilities	44.9
Related party receivables	$ 44.9

Subsequent Events (Details) - LTIP - shares			9 Months Ended
Subsequent Events (Details) - LTIP - shares	Nov. 01, 2018	Apr. 02, 2018	Sep. 30, 2018
Subsequent Event
Subsequent Event [Line Items]
Additional common units available to be awarded	8,590,000
Common units available to be awarded	10,000,000
Phantom units
Subsequent Event [Line Items]
Granted (in units)			314,095
Percentage of awards vesting		100.00%
Phantom units \| Subsequent Event
Subsequent Event [Line Items]
Granted (in units)	170,000
Phantom units \| Subsequent Event \| December 5, 2021
Subsequent Event [Line Items]
Percentage of awards vesting	60.00%
Phantom units \| Subsequent Event \| December 5, 2023
Subsequent Event [Line Items]
Percentage of awards vesting	40.00%