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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2019	May 03, 2019
Entity Registrant Name	USA Compression Partners, LP
Entity Central Index Key	0001522727
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Trading Symbol	USAC
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Common units
Units outstanding		90,158,987
Class B Units
Units outstanding		6,397,965

Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 227	$ 99
Accounts receivable, net:
Trade, net	78,990	75,572
Other	4,816	3,809
Related party receivables	45,589	47,661
Inventory, net	93,780	89,007
Prepaid expenses and other assets	2,842	1,592
Total current assets	226,244	217,740
Installment receivable	5,952	6,924
Property and equipment, net	2,502,392	2,521,488
Identifiable intangible assets, net	385,205	392,550
Goodwill	619,411	619,411
Other assets	18,643	16,536
Total assets	3,757,847	3,774,649
Current liabilities:
Accounts payable	19,593	23,804
Related party payables		395
Accrued liabilities	79,150	94,028
Deferred revenue	34,540	31,372
Total current liabilities	133,283	149,599
Long-term debt, net	1,808,309	1,759,058
Other liabilities	10,304	9,827
Total Liabilities	1,951,896	1,918,484
Preferred Units	477,309	477,309
Commitments and contingencies
Partners' capital:
Warrants	13,979	13,979
Total partners’ capital and predecessor parent company net investment	$ 1,328,642	$ 1,378,856
Total liabilities, partners’ capital and predecessor parent company net investment	3,757,847	3,774,649
Limited partner \| Common units
Partners' capital:
Limited partner interest	1,243,029	1,289,731
Limited partner \| Class B Units
Partners' capital:
Limited partner interest	$ 71,634	$ 75,146

Condensed Consolidated Balance Sheets (Parenthetical) - Limited partner - shares shares in Thousands	Mar. 31, 2019	Dec. 31, 2018
Common units
Limited partner units issued (in shares)	90,158	89,984
Limited partner units outstanding (in shares)	90,158	89,984
Class B Units
Limited partner units issued (in shares)	6,398	6,398
Limited partner units outstanding (in shares)	6,398	6,398

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues:
Revenue	$ 163,976	$ 69,807
Parts and service	2,684	2,750
Related party	4,086	3,973
Total revenues	170,746	76,530
Costs and expenses:
Cost of operations, exclusive of depreciation and amortization	57,025	37,335
Selling, general, and administrative	15,995	7,961
Depreciation and amortization	58,924	44,672
Loss on disposition of assets	40	10,347
Impairment of compression equipment	3,234	0
Total costs and expenses	135,218	100,315
Operating income (loss)	35,528	(23,785)
Other income (expense):
Interest expense, net	(28,857)
Other	20	(20)
Total other expense	(28,837)	(20)
Net income (loss) before income tax expense (benefit)	6,691	(23,805)
Income tax expense (benefit)	104	(435)
Net income (loss)	6,587	(23,370)
Less: distributions on Preferred Units	(12,187)
Net loss attributable to common and Class B unitholders' interests	$ (5,600)	$ (23,370)
Weighted average units outstanding:
Distributions declared per common unit	$ 0.525
Common units
Net loss attributable to:
Common and Class B units	$ (2,088)
Weighted average units outstanding:
Basic and diluted (in units)	90,060
Basic and diluted net loss per common unit and Class B Unit (in dollars per unit)	$ (0.02)
Class B Units
Net loss attributable to:
Common and Class B units	$ (3,512)
Weighted average units outstanding:
Basic and diluted (in units)	6,398
Basic and diluted net loss per common unit and Class B Unit (in dollars per unit)	$ (0.55)

Condensed Consolidated Statements of Changes in Partners' Capital And Predecessor Parent Company Net Investment - USD ($) $ in Thousands	Common units Limited partner	Class B Units Limited partner	Warrants	Total
Partners' capital (Predecessor) at Dec. 31, 2017				$ 1,664,870
Partners' capital at Dec. 31, 2017				1,664,870
Increase (Decrease) in Partners' Capital
Net loss \| Predecessor				(23,370)
Net loss				(23,370)
Other contribution from (distribution to) parent, net \| Predecessor				26,730
Other contribution from (distribution to) parent, net				26,730
Partners' capital (Predecessor) at Mar. 31, 2018				1,668,230
Partners' capital at Mar. 31, 2018				1,668,230
Limited Partners' Capital Account at Dec. 31, 2018	$ 1,289,731	$ 75,146	$ 13,979
Partners' capital at Dec. 31, 2018				1,378,856
Increase (Decrease) in Partners' Capital
Net loss	(2,088)	(3,512)		(5,600)
Vesting of phantom units	2,393			2,393
Distributions and distribution equivalent rights	(47,259)			(47,259)
Issuance of common units under the DRIP	252			252
Limited Partners' Capital Account at Mar. 31, 2019	$ 1,243,029	$ 71,634	$ 13,979
Partners' capital at Mar. 31, 2019				$ 1,328,642

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net income (loss)	$ 6,587	$ (23,370)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	58,924	44,672
Bad debt recovery		(192)
Amortization of debt issue costs	1,680
Unit-based compensation expense	3,134	435
Deferred income tax expense (benefit)	14	(435)
Loss on disposition of assets	40	10,347
Impairment of compression equipment	3,234
Changes in assets and liabilities:
Accounts receivable, net	(1,381)	(8,637)
Inventory, net	(6,659)	(660)
Prepaid expenses and other current assets	(1,250)	3,162
Other noncurrent assets	449	(3)
Accounts payable and related party payables	(4,013)	(1,586)
Accrued liabilities and deferred revenue	(12,990)	(4,866)
Net cash provided by operating activities	47,769	18,867
Cash flows from investing activities:
Capital expenditures, net	(36,339)	(51,669)
Proceeds from disposition of property and equipment	321	5,845
Proceeds from insurance recovery	1,365
Net cash used in investing activities	(34,653)	(45,824)
Cash flows from financing activities:
Proceeds from revolving credit facility	221,792
Proceeds from senior notes	750,000
Payments on revolving credit facility	(909,914)
Cash paid related to net settlement of unit-based awards	(1,433)
Financing costs	(13,220)
Other	(287)
Contributions from Parent, net		28,520
Net cash provided by (used in) financing activities	(12,988)	28,520
Increase in cash and cash equivalents	128	1,563
Cash and cash equivalents, beginning of period	99	4,013
Cash and cash equivalents, end of period	227	5,576
Supplemental cash flow information:
Cash paid for interest, net of capitalized amounts	38,737
Supplemental non-cash transactions:
Non-cash distributions to certain common unitholders (DRIP)	252
Transfers from inventory to property and equipment	1,951
Change in capital expenditures included in accounts payable and accrued liabilities	(782)	(5,322)
Financing costs included in accounts payable and accrued liabilities	139
Predecessor's Non-cash contribution to Predecessor's Parent		$ (1,790)
Common units
Cash flows from financing activities:
Cash distributions	(47,739)
Preferred Units
Cash flows from financing activities:
Cash distributions	$ (12,187)

Organization and Description of the Business	3 Months Ended
Organization and Description of the Business	Mar. 31, 2019
Organization and Description of 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 a historical context or in reference to periods prior to the Transactions Date, refer to CDM Resource Management LLC and CDM Environmental & Technical Services LLC 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.” The General Partner has been wholly owned by Energy Transfer Operating, L.P. (“ETO”) since October 2018, when Energy Transfer Equity, L.P. (“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” (“ET LP”) and ETP changed its name to “Energy Transfer Operating, L.P.” Upon the closing of the ETE Merger, ETE contributed to ETO 100% of the limited liability company interests in the General Partner. References herein to “ETO” refer to ETP for periods prior to the ETE Merger and ETO following the ETE Merger, and references to “ET LP” refer to ETE for periods prior to the ETE Merger and ET 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 natural gas treating services, such as carbon dioxide and hydrogen sulfide removal, 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 ETO (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, (ii) 6,397,965 Class B units representing limited partner interests in us (“Class B Units”) and (iii) $1.2 billion in cash (including 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 ET LP, Energy Transfer Partners, L.L.C., USA Compression Holdings, LLC (“USA Compression Holdings”) and, solely for certain purposes therein, R/C IV USACP Holdings, L.P. and ETO, pursuant to which, among other things, ET LP 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 ET LP to USA Compression Holdings equal to $250.0 million (the “GP Purchase”). Upon the closing of the ETE Merger, ET LP contributed all of the interests in the General Partner and the 12,466,912 common units to ETO. 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 ET LP agreed to cancel the Partnership’s Incentive Distribution Rights 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 Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and 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. ET LP acquired a controlling financial interest in us through the acquisition of the 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 reflect the USA Compression Predecessor for all periods prior to the closing of the Transactions, which 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 were 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 was recorded as goodwill. The assumed purchase price and fair value of the Partnership was determined using acceptable fair value methods. Additionally, the USA Compression Predecessor was reflected at ET LP’s historical cost, and the difference between the consideration paid by the Partnership and ET LP’s historical carrying values (net book value) at the Transactions Date was recorded to partners’ capital.

Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“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 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 USA Compression Predecessor 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 ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. 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, 2018 filed on February 19, 2019 (our “2018 Annual Report”).

USA Compression Predecessor

ETO 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 ETO 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 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 ETO 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 12.

Certain amounts of the USA Compression Predecessor’s revenues are derived from related party transactions, as described more fully in Note 12.

Significant Accounting Policies

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.

Trade Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Our 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.

The USA Compression Predecessor determined its allowance for doubtful accounts based upon historical write-off experience and specific identification of unrecoverable amounts.

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. Serialized parts inventory is determined using the specific identification method, while non-serialized parts inventory is determined using the weighted average cost method. Purchases of inventory are considered operating activities on the unaudited condensed consolidated statements of cash flows.

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 three to five 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 for the three months ended March 31, 2019. The USA Compression Predecessor had no capitalized interest for the three months ended March 31, 2018.

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.

The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value exceeds the sum of the undiscounted cash flows associated with the operating fleet, an impairment loss equal to the amount of the carrying value exceeding the fair value of the asset is recognized. The fair value of the asset is measured using quoted market prices or, in the absence of quoted market prices, based on an estimate of discounted cash flows, the expected net sale proceeds compared to the other similarly configured fleet units we recently sold or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

Refer to Note 5 for more detailed information about impairment charges during the three months ended March 31, 2019.

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 15 to 25 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 months ended March 31, 2019 and 2018.

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 months ended March 31, 2019 and 2018.

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. Incidental items, if any, that are immaterial in the context of the contract are recognized as expenses.

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 March 31, 2019, 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 Senior Notes 2026 and Senior Notes 2027, both defined in Note 8, were estimated using quoted prices in inactive markets and are considered Level 2 measurements.

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


	March 31, 2019		December 31, 2018
	Level 2		Level 2
Senior Notes 2026, aggregate principal	$	725,000	$	725,000
Fair value of Senior Notes 2026		744,938		696,000
Senior Notes 2027, aggregate principal	$	750,000	$	—
Fair value of Senior Notes 2027		767,813		—

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.

Operating Segment

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

Adoption of Lease Accounting Standard

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which has amended the FASB Accounting Standards Codification (“ASC”) and introduced ASC Topic 842, Leases (“ASC Topic 842”). On January 1, 2019, we adopted ASC Topic 842, which is effective for interim and annual reporting periods beginning on or after December 15, 2018. ASC Topic 842 requires entities to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which historically were not recorded on the balance sheet in accordance with the prior standard.

To adopt ASC Topic 842, we recognized a cumulative catch-up adjustment to the opening balance sheet presented January 1, 2019 related to certain leases that existed as of that date. As permitted, we have not retrospectively modified our consolidated financial statements for comparative purposes. The adoption of the standard had an impact on our consolidated balance sheet, but did not have an impact on our consolidated statements of operations or cash flows. As a result of adoption, we have recorded additional net right-of-use (“ROU”) lease assets and lease liabilities of approximately $3.5 million and $3.7 million, respectively, as of January 1, 2019. In addition, we have updated our business processes, systems and internal controls to support the on-going reporting requirements under the new standard.

To adopt ASC Topic 842, we elected the package of practical expedients permitted under the transition guidance within the standard. The expedient package allowed us not to reassess whether existing contracts contained a lease, the lease classification of existing leases and initial direct cost for existing leases. In addition to the package of practical expedients, we have elected not to capitalize amounts pertaining to leases with terms less than twelve months, to use the portfolio approach to determine discount rates, not to separate non-lease components from lease components and not to apply the use of hindsight to the active lease population.

Cumulative-effect adjustments made to the opening balance sheet at January 1, 2019 were as follows (in thousands):


		Balance at
		December 31,		Adjustments
		2018, as		Due to		Balance at
	Balance Sheet	Previously		ASC Topic 842		January 1,
Assets (liabilities)	Line Item	Reported		(Leases)		2019
Operating lease right-of use assets	Other assets	$	-	$	3,502	$	3,502
Operating lease liabilities, current	Accrued liabilities		-		(2,015)		(2,015)
Operating lease liabilities, long term	Other liabilities		-		(1,706)		(1,706)

Additional disclosures related to lease accounting are included in Note 7.

Trade Accounts Receivable	3 Months Ended
Trade Accounts Receivable	Mar. 31, 2019
Trade Accounts Receivable
Trade Accounts Receivable	(3) Trade Accounts Receivable The allowance for doubtful accounts, which was $1.7 million at March 31, 2019 and December 31, 2018, is our best estimate of the amount of probable credit losses included in our existing accounts receivable. The USA Compression Predecessor reduced its allowance for doubtful accounts by $0.4 million during the three months ended March 31, 2018, 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

3 Months Ended

Mar. 31, 2019

Inventory

Inventory

(4) Inventory

Components of inventory are as follows (in thousands):


	March 31, 2019		December 31, 2018
Serialized parts	$	47,018	$	45,568
Non-serialized parts		46,762		43,439
Total Inventory, gross		93,780		89,007
Less: obsolete and slow moving reserve		—		—
Total Inventory, net	$	93,780	$	89,007

Property And Equipment, Identifiable Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2019

Property And Equipment, Identifiable Intangible Assets and Goodwill

Property And Equipment, Identifiable Intangible Assets and Goodwill

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

Property and Equipment

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


	March 31, 2019		December 31, 2018
Compression and treating equipment	$	3,270,065	$	3,239,831
Furniture and fixtures		1,129		1,129
Automobiles and vehicles		31,863		32,490
Computer equipment		55,810		54,806
Buildings		9,146		9,314
Land		77		77
Leasehold improvements		5,511		5,377
Total Property and equipment, gross		3,373,601		3,343,024
Less: accumulated depreciation and amortization		(871,209)		(821,536)
Total Property and equipment, net	$	2,502,392	$	2,521,488

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 $51.6 million for the three months ended March 31, 2019. The USA Compression Predecessor recognized $39.5 million of depreciation expense on property and equipment for the three months ended March 31, 2018.

As of March 31, 2019 and December 31, 2018, there was $7.2 million and $7.9 million, respectively, of property and equipment purchases in accounts payable and accrued liabilities.

During the three months ended March 31, 2018, the USA Compression Predecessor recognized a $10.3 million net loss on disposition of assets.

During the three months ended March 31, 2019, 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 14 compressor units, or approximately 4,700 horsepower, that were previously used to provide services in our business. As a result, we recorded $3.2 million in impairment of compression equipment for the three months ended March 31, 2019. 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 months ended March 31, 2018.

Identifiable Intangible Assets

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


	Customer
	Relationships		Trade Names		Total
Net Balance at December 31, 2018	$	355,161	$	37,389	$	392,550
Amortization expense		(6,526)		(819)		(7,345)
Net Balance at March 31, 2019	$	348,635	$	36,570	$	385,205

Accumulated amortization of intangible assets was $165.5 million and $158.1 million as of March 31, 2019 and December 31, 2018, respectively. The expected amortization of the intangible assets for each of the five succeeding years is $29.4 million.

- 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

Other Current Assets and Other Current Liabilities	3 Months Ended
Other Current Assets and Other Current Liabilities	Mar. 31, 2019
Other Current Assets and Other Current Liabilities
Other Current Assets and Other Current Liabilities	(6) Other Current Liabilities As of March 31, 2019, accrued liabilities included $44.9 million of accrued sales tax contingency (Note 13), $5.0 million of accrued interest expense, $6.1 million of accrued payroll and benefits and $7.2 million of accrued capital expenditures. As of December 31, 2018, accrued liabilities included $44.9 million of accrued sales tax contingency (Note 13), $16.4 million of accrued interest expense, $10.7 million of accrued payroll and benefits and $7.9 million of accrued capital expenditures.

Leases

3 Months Ended

Mar. 31, 2019

Leases

Leases

(7) Lease Accounting

Lessee Accounting

We maintain both finance leases and operating leases, primarily related to office space, warehouse facilities and certain corporate equipment. Our leases have remaining lease terms of one to seven years, some of which include options to extend the leases for up to two years, and some of which include options to terminate the leases within one year.

We determine if an arrangement is a lease at inception. Operating leases are included in other assets, accrued liabilities and other liabilities in our unaudited condensed consolidated balance sheets. Finance leases are included in property and equipment, accrued liabilities and other liabilities in our unaudited condensed consolidated balance sheets.

ROU lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. ROU lease assets also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For short-term leases (leases that have terms of twelve months or less upon commencement), lease payments are recognized on a straight line basis and no ROU assets are recorded. For certain equipment leases, such as office equipment, we account for the lease and non-lease components as a single lease component.

Components of lease expense consisted of the following (in thousands):


	Income Statement Line Item	Three months ended March 31, 2019
Operating lease cost	Cost of operations & Selling, general and administrative	$	610
Amortization of finance lease right-of-use assets	Depreciation and amortization		819

Supplemental balance sheet information related to leases consisted of the following (in thousands):


Operating Leases

Assets (liabilities)	Balance Sheet Line Item	March 31, 2019		December 31, 2018
Operating lease right-of-use assets	Other assets	$	2,943	$	-
Operating lease liabilities, current	Accrued liabilities		(1,485)		-
Operating lease liabilities, long-term	Other liabilities		(1,626)		-


Finance Leases

Assets (liabilities)	March 31, 2019		December 31, 2018
Property and equipment, gross	$	7,516	$	7,683
Accumulated depreciation		(5,533)		(4,882)
Property and equipment, net	$	1,983	$	2,801
Accrued liabilities		(1,050)		(1,085)
Other liabilities		(1,852)		(2,114)


Weighted Average Remaining Lease Term	March 31, 2019
Operating leases		3.66 years
Finance Leases		3.85 years


Weighted Average Discount Rate	March 31, 2019
Operating leases		2.92%
Finance Leases		2.17%

Supplemental cash flow information related to leases consisted of the following (in thousands):


	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(662)
Operating cash flows from finance leases		(194)
Financing cash flows from finance leases		(287)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	-
Finance leases		-

Maturities of lease liabilities consisted of the following (in thousands):


	Operating Leases		Finance Leases		Total
2019 (remainder)	$	1,396	$	1,147	$	2,543
2020		595		1,026		1,621
2021		390		509		899
2022		276		342		618
2023		241		312		553
Thereafter		405		237		642
Total lease payments		3,303		3,573		6,876
Less: present value discount		(192)		(671)		(863)
Present value of lease liabilities	$	3,111	$	2,902	$	6,013

As of March 31, 2019, we have an additional operating lease that has not yet commenced of $6.7 million. This operating lease will commence in 2020 with a lease term of 10 years.

Lessor Accounting

We granted a bargain purchase option to a 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 in 2021.

We accounted for this option as a sales type lease resulting in a current installment receivable included in other accounts receivable of $3.8 million and $3.7 million and a long-term installment receivable of $6.0 million and $6.9 million as of March 31, 2019 and December 31, 2018, respectively.

Revenue and interest income related to the 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 for the three months ended March 31, 2019. Interest income was $0.2 million for the three months ended March 31, 2019.

Lease payments expected to be received subsequent to March 31, 2019 are as follows:


	Lease payments
2019 (remainder)	$	4,254
2020		5,673
2021		3,356
Total installment receivables		13,283
Less: present value discount		(3,550)
Present value of installment receivables	$	9,733

The USA Compression Predecessor had no capital lease revenue or maintenance revenue related to capital leases for the three months ended March 31, 2018.

ASC Topic 842 provides lessors with a practical expedient to not separate non-lease components from the associated lease components and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under ASC Topic 606 Revenue from Contracts with Customers (“ASC Topic 606”) and certain conditions are met. Our contract operations services agreements meet these conditions and we consider the predominant component to be the non-lease components, resulting in the ongoing recognition of revenue following ASC Topic 606 guidance.

Long-Term Debt

3 Months Ended

Mar. 31, 2019

Long-Term Debt

Long-Term Debt

(8) Long-Term Debt

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


	March 31, 2019		December 31, 2018
Revolving credit facility	$	361,425	$	1,049,547
Senior Notes 2026, aggregate principal		725,000		725,000
Senior Notes 2027, aggregate principal		750,000		—
Less: deferred financing costs, net of amortization		(28,116)		(15,489)
Total Senior Notes, net		1,446,884		709,511
Total long-term debt, net	$	1,808,309	$	1,759,058

Revolving Credit Facility

As of March 31, 2019, we were in compliance with all of our covenants under the Sixth Amended and Restated Credit Agreement (the “Credit Agreement”).

As of March 31, 2019, we had outstanding borrowings under the Credit Agreement of $361.4 million, $1.2 billion of borrowing base availability and, subject to compliance with the applicable financial covenants, available borrowing capacity of $492.7 million. Our interest rate in effect for all borrowings under the Credit Agreement as of March 31, 2019 was 5.17%, with a weighted average interest rate of 5.07% for the three months ended March 31, 2019. There were no letters of credit issued as of March 31, 2019.

The 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 Credit Agreement of at least $100 million.

The Credit Agreement 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.

The Credit Agreement matures in April 2023 and we expect to maintain it for the term. The Credit Agreement 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 2026

On March 23, 2018, the Partnership and its wholly owned finance subsidiary, USA Compression Finance Corp. (“Finance Corp”), co-issued $725.0 million aggregate principal amount of senior notes due on April 1, 2026 (the “Senior Notes 2026”). The Senior Notes 2026 accrue interest at the rate of 6.875% per year. Interest on the Senior Notes 2026 is payable semi-annually in arrears on each of April 1 and October 1.

The indenture governing the Senior Notes 2026 (the “2026 Indenture”) contains a Fixed Charge Coverage Ratio (as defined in the 2026 Indenture) that we must comply with in order to make certain Restricted Payments (as defined in the 2026 Indenture).

The Senior Notes 2026 are fully and unconditionally guaranteed (the “2026 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 2026 and the 2026 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 2026 and the 2026 Guarantees are effectively subordinated in right of payment to all of the Guarantors’ and our existing and future secured debt, including debt under the Credit Agreement 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 2026.

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.

On January 14, 2019, the Partnership closed an exchange offer whereby holders of the Senior Notes 2026 exchanged all of the Senior Notes 2026 for an equivalent amount of senior notes (“Exchange Notes”) registered under the Securities Act of 1933, as amended (the “Securities Act”). The Exchange Notes are substantially identical to the Senior Notes 2026, except that the Exchange Notes have been registered with the SEC and do not contain the transfer restrictions, restrictive legends, registration rights or additional interest provisions of the Senior Notes 2026.

Senior Notes 2027

On March 7, 2019, the Partnership and Finance Corp co-issued $750.0 million aggregate principal amount of senior notes due on September 1, 2027 (the “Senior Notes 2027”). The Senior Notes 2027 accrue interest from March 7, 2019 at the rate of 6.875% per year. Interest on the Senior Notes 2027 is payable semi-annually in arrears on each of March 1 and September 1, commencing on September 1, 2019.

At any time prior to September 1, 2022, we may redeem up to 35% of the aggregate principal amount of the Senior Notes 2027 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 2027 remains outstanding immediately after the occurrence of such redemption (excluding Senior Notes 2027 held by us and our subsidiaries) and redemption occurs within 180 days of the date of the closing of such equity offering.

Prior to September 1, 2022, we may redeem all or a part of the Senior Notes 2027 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 September 1, 2022, we may redeem all or a part of the Senior Notes 2027 at redemption prices (expressed as percentages of the principal amount) set forth below, plus accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on September 1 of the years indicated below:


Year	Percentages
2022	105.156	%
2023	103.438	%
2024	101.719	%
2025 and thereafter	100.000	%

If we experience a change of control followed by a ratings decline, unless we have previously exercised or concurrently exercise our right to redeem the Senior Notes 2027 (as described above), we may be required to offer to repurchase the Senior Notes 2027 at a purchase price equal to 101% of the principal amount repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

The indenture governing the Senior Notes 2027 (the “2027 Indenture”) contains a Fixed Charge Coverage Ratio (as defined in the 2027 Indenture) that we must comply with in order to make certain Restricted Payments (as defined in the 2027 Indenture).

In connection with issuing the Senior Notes 2027, we incurred certain issuance costs in the amount of $13.1 million, which is amortized over the term of the Senior Notes 2027.

The Senior Notes 2027 are fully and unconditionally guaranteed (the “2027 Guarantees”), jointly and severally, on a senior unsecured basis by the Guarantors. The Senior Notes 2027 and the 2027 Guarantees are general unsecured obligations and rank equally in right of payment with all of the Guarantors’ and our existing and future senior indebtedness, including the Exchange Notes, and senior to the Guarantors’ and our future subordinated indebtedness, if any. The Senior Notes 2027 and the 2027 Guarantees are effectively subordinated in right of payment to all of the Guarantors’ and our existing and future secured debt, including debt under the Credit Agreement 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 2027.

Preferred Units and Warrants

3 Months Ended

Mar. 31, 2019

Preferred Units and Warrants

Preferred Units and Warrants

(9) Preferred Units and Warrants

Series A Preferred Unit and Warrant Private Placement

On the Transactions Date, we completed a private placement of $500 million in the aggregate of (i) newly authorized and established Series A Preferred Units (the “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, 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. The distribution attributable to the quarter ended March 31, 2019 will be paid on May 10, 2019 to Preferred Unitholders of record as of the close of business on April 29, 2019.

The Preferred Units are presented as temporary equity in the mezzanine section of the unaudited condensed consolidated balance sheets because the redemption provisions exercisable on or after April 2, 2028 are outside the Partnership’s control. 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 by us, 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 by us.

Changes in the Preferred Units balance from December 31, 2018 through March 31, 2019 are summarized below (in thousands):


	Preferred Units
Balance at December 31, 2018	$	477,309
Net income allocated to Preferred Units		12,187
Cash distributions on Preferred Units		(12,187)
Balance at March 31, 2019	$	477,309

The Warrants are presented within the equity section of the unaudited condensed consolidated balance sheets in accordance with GAAP as they are indexed to the Partnership’s common units and require physical settlement or net common unit settlement.

Refer to Note 12 for information about the rights EIG Veteran Equity Aggregator, L.P. (along with its affiliated funds, “EIG”) has to designate one of the members of the Board of Directors of USA Compression GP, LLC (the “Board”).

Partners' Capital

3 Months Ended

Mar. 31, 2019

Partners' Capital.

Partners' Capital

(10) Partners’ Capital

Common Units

As of March 31, 2019, we had 90,157,764 common units outstanding. As of March 31, 2019, ETO held 39,658,263 common units, including 8,000,000 common units held by the General Partner and controlled by ETO.

Class B Units

As of March 31, 2019, we had 6,397,965 Class B Units outstanding which represent limited partner interests in the Partnership, all of which were held by ETO. Each Class B Unit will automatically convert 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 a common unit.

Cash Distributions

As the USA Compression Predecessor is deemed to be the predecessor of the Partnership for financial reporting purposes, cash distributions made by the Partnership in periods prior to the Transactions Date are not included within the results of operations presented within the unaudited condensed consolidated financial statements for the three months ended March 31, 2018.

We have declared quarterly distributions per unit to our limited partner unitholders of record, including holders of our common units and phantom units, as follows (dollars in millions, except distribution per unit):

Distribution per

Amount Paid to

Limited Partner

Common

Phantom

Total

Payment Date

Unit

Unitholders

Distribution

February 8, 2019

0.525

47.2

0.7

47.9

Announced Quarterly Distribution

On April 18, 2019, we announced a cash distribution of $0.525 per unit on our common units. The distribution will be paid on May 10, 2019 to common unitholders of record as of the close of business on April 29, 2019.

Distribution Reinvestment Plan

During the three months ended March 31, 2019, distributions of $0.3 million were reinvested under the Distribution Reinvestment Plan (“DRIP”) resulting in the issuance of 16,714 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, and in the case of Warrants to the extent they are considered “in the money.” For the three months ended March 31, 2019, approximately 114,000 incremental unvested phantom units were excluded from the calculation of diluted earnings per unit because the impact was anti-dilutive. Our outstanding Warrants are not included in the computation as of March 31, 2019 as they are not considered “in the money” for the period. 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.

Revenue Recognition

3 Months Ended

Mar. 31, 2019

Revenue Recognition

Revenue Recognition

(11) Revenue Recognition

On January 1, 2018, we adopted ASC Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018.

We identified no material impact on our historical revenues upon initial application of ASC Topic 606, and as such did not recognize 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 had no material impact on any financial statement line items.

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


	Three Months Ended March 31,
	2019		2018
Contract operations revenue	$	168,010	$	73,665
Retail parts and services revenue		2,736		2,865
Total revenues	$	170,746	$	76,530

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


	Three Months Ended March 31,
	2019		2018
Services provided or goods transferred at a point in time	$	2,736	$	2,865
Services provided over time:
Primary term		97,359		33,796
Month-to-month		70,651		39,869
Total revenues	$	170,746	$	76,530

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 March 31, 2019 and December 31, 2018. 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 three months ended March 31, 2019 is primarily driven by cash payments received or due in advance of satisfying our performance obligations under a contract. 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.

Transactions with Related Parties	3 Months Ended
Transactions with Related Parties	Mar. 31, 2019
Transactions with Related Parties
Transactions with Related Parties	(12) Transactions with Related Parties We provide compression services to entities affiliated with ETO, which as of March 31, 2019 owned approximately 48% of our limited partner interests, including all of the Class B Units and 100% of the General Partner. During the three months ended March 31, 2019, we recognized $4.1 million in revenue from such affiliated entities, and we had $0.7 million and $2.7 million in receivables as of March 31, 2019 and December 31, 2018, respectively, from such affiliated entities. Additionally, the Partnership had a $44.9 million related party receivable from ETO as of March 31, 2019 and December 31, 2018, related to indemnification for sales tax contingencies incurred by the USA Compression Predecessor. See Note 13 for more information related to such sales tax contingencies. The USA Compression Predecessor also provided compression services to entities affiliated with ETO. During the three months ended March 31, 2018, the USA Compression Predecessor recognized $4.0 million in revenue from such affiliated entities. ETO provided certain benefits to the USA Compression Predecessor employees which did not continue following the Transactions Date. ETO provided medical, dental and other healthcare benefits to the USA Compression Predecessor employees. The total amount incurred by ETO for the benefit of the USA Compression Predecessor employees for the three months ended March 31, 2018 was $1.9 million, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate. ETO 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 months ended March 31, 2018 was $0.9 million, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate. ETO 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. ETO 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 months ended March 31, 2018, ETO allocated general and administrative expenses of $1.8 million to the USA Compression Predecessor. Pursuant to that certain Board Representation Agreement entered into by us, the General Partner, ET LP and EIG in connection with our private placement of Preferred Units and Warrants to EIG, EIG Management Company, LLC has the right to designate one of the members of the Board for so long as the holders of the Preferred Units hold more than 5% of the Partnership’s outstanding common units in the aggregate (taking into account the common units that would be issuable upon conversion of the Preferred Units and exercise of the Warrants).

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2019
Commitments and Contingencies
Commitments and Contingencies	(13) 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 months ended March 31, 2019 or 2018. (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 March 31, 2019 were $84.5 million, which are expected to be settled throughout 2019. (d) Sales Tax Contingency Our compliance with state and local sales tax regulations is subject to audit by various taxing authorities. 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 preparing 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 is covered by an indemnity between us and ETO. As of March 31, 2019, we have recorded a $44.9 million accrued liability and $44.9 million related party receivable from ETO. For more information, see Note 17 to the consolidated financial statements included in our 2018 Annual Report. (e) Self-Insurance Effective January 1, 2019, we became self-insured for medical claims up to certain stop loss limits. Liabilities are accrued for self-insured claims when sufficient information is available to reasonably estimate the amount of the loss. As of March 31, 2019, we have recorded a $0.8 million accrued liability.

Recent Accounting Pronouncements	3 Months Ended
Recent Accounting Pronouncements	Mar. 31, 2019
Recent Accounting Pronouncements
Recent Accounting Pronouncements	(14) Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (“ASC Topic 326”): Measurement of Credit Losses on Financial Instruments. The amendments to ASC Topic 326 require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. The amendments in this update are effective for interim and annual periods beginning after January 1, 2020, with early adoption permitted by one year. We plan to adopt this new standard on January 1, 2020 and expect that our adoption of this standard will not have a material impact on our consolidated financial statements. In August 2018, the FASB issued 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.

Basis of Presentation and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Basis of Presentation and Significant Accounting Policies

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.

Trade Accounts Receivable and Allowance for Doubtful Accounts

The USA Compression Predecessor determined its allowance for doubtful accounts based upon historical write-off experience and specific identification of unrecoverable amounts.

Inventory

Property and Equipment

Impairments of Long-Lived Assets

Impairment of Long-Lived Assets

Refer to Note 5 for more detailed information about impairment charges during the three months ended March 31, 2019.

Identifiable Intangible Assets

Goodwill

Neither we nor the USA Compression Predecessor recorded any impairment of goodwill during the three months ended March 31, 2019 and 2018.

Revenue Recognition

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.

The fair value of our Senior Notes 2026 and Senior Notes 2027, both defined in Note 8, were estimated using quoted prices in inactive markets and are considered Level 2 measurements.

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


	March 31, 2019		December 31, 2018
	Level 2		Level 2
Senior Notes 2026, aggregate principal	$	725,000	$	725,000
Fair value of Senior Notes 2026		744,938		696,000
Senior Notes 2027, aggregate principal	$	750,000	$	—
Fair value of Senior Notes 2027		767,813		—

Use of Estimates

Operating Segment

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

Adoption of Lease Accounting Standard

Cumulative-effect adjustments made to the opening balance sheet at January 1, 2019 were as follows (in thousands):


		Balance at
		December 31,		Adjustments
		2018, as		Due to		Balance at
	Balance Sheet	Previously		ASC Topic 842		January 1,
Assets (liabilities)	Line Item	Reported		(Leases)		2019
Operating lease right-of use assets	Other assets	$	-	$	3,502	$	3,502
Operating lease liabilities, current	Accrued liabilities		-		(2,015)		(2,015)
Operating lease liabilities, long term	Other liabilities		-		(1,706)		(1,706)

Additional disclosures related to lease accounting are included in Note 7.

Basis of Presentation and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Basis of Presentation and Significant Accounting Policies

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

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


	March 31, 2019		December 31, 2018
	Level 2		Level 2
Senior Notes 2026, aggregate principal	$	725,000	$	725,000
Fair value of Senior Notes 2026		744,938		696,000
Senior Notes 2027, aggregate principal	$	750,000	$	—
Fair value of Senior Notes 2027		767,813		—

Schedule of impact of adoption of ASC Topic 842

Cumulative-effect adjustments made to the opening balance sheet at January 1, 2019 were as follows (in thousands):


		Balance at
		December 31,		Adjustments
		2018, as		Due to		Balance at
	Balance Sheet	Previously		ASC Topic 842		January 1,
Assets (liabilities)	Line Item	Reported		(Leases)		2019
Operating lease right-of use assets	Other assets	$	-	$	3,502	$	3,502
Operating lease liabilities, current	Accrued liabilities		-		(2,015)		(2,015)
Operating lease liabilities, long term	Other liabilities		-		(1,706)		(1,706)

Inventory (Tables)

3 Months Ended

Mar. 31, 2019

Inventory

Schedule of components of inventory

Components of inventory are as follows (in thousands):


	March 31, 2019		December 31, 2018
Serialized parts	$	47,018	$	45,568
Non-serialized parts		46,762		43,439
Total Inventory, gross		93,780		89,007
Less: obsolete and slow moving reserve		—		—
Total Inventory, net	$	93,780	$	89,007

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

3 Months Ended

Mar. 31, 2019

Property And Equipment, Identifiable Intangible Assets and Goodwill

Schedule of property and equipment (in thousands)

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


	March 31, 2019		December 31, 2018
Compression and treating equipment	$	3,270,065	$	3,239,831
Furniture and fixtures		1,129		1,129
Automobiles and vehicles		31,863		32,490
Computer equipment		55,810		54,806
Buildings		9,146		9,314
Land		77		77
Leasehold improvements		5,511		5,377
Total Property and equipment, gross		3,373,601		3,343,024
Less: accumulated depreciation and amortization		(871,209)		(821,536)
Total Property and equipment, net	$	2,502,392	$	2,521,488

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, 2018	$	355,161	$	37,389	$	392,550
Amortization expense		(6,526)		(819)		(7,345)
Net Balance at March 31, 2019	$	348,635	$	36,570	$	385,205

Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases

Schedule of impact of adoption of ASC Topic 842

Cumulative-effect adjustments made to the opening balance sheet at January 1, 2019 were as follows (in thousands):


		Balance at
		December 31,		Adjustments
		2018, as		Due to		Balance at
	Balance Sheet	Previously		ASC Topic 842		January 1,
Assets (liabilities)	Line Item	Reported		(Leases)		2019
Operating lease right-of use assets	Other assets	$	-	$	3,502	$	3,502
Operating lease liabilities, current	Accrued liabilities		-		(2,015)		(2,015)
Operating lease liabilities, long term	Other liabilities		-		(1,706)		(1,706)

Schedule of components of lease expense

Components of lease expense consisted of the following (in thousands):


	Income Statement Line Item	Three months ended March 31, 2019
Operating lease cost	Cost of operations & Selling, general and administrative	$	610
Amortization of finance lease right-of-use assets	Depreciation and amortization		819

Schedule of supplemental cash flow information related to leases

Supplemental cash flow information related to leases consisted of the following (in thousands):


	Three months ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(662)
Operating cash flows from finance leases		(194)
Financing cash flows from finance leases		(287)
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	-
Finance leases		-

Schedule of supplemental balance sheet information related to leases

Supplemental balance sheet information related to leases consisted of the following (in thousands):


Operating Leases

Assets (liabilities)	Balance Sheet Line Item	March 31, 2019		December 31, 2018
Operating lease right-of-use assets	Other assets	$	2,943	$	-
Operating lease liabilities, current	Accrued liabilities		(1,485)		-
Operating lease liabilities, long-term	Other liabilities		(1,626)		-


Finance Leases

Assets (liabilities)	March 31, 2019		December 31, 2018
Property and equipment, gross	$	7,516	$	7,683
Accumulated depreciation		(5,533)		(4,882)
Property and equipment, net	$	1,983	$	2,801
Accrued liabilities		(1,050)		(1,085)
Other liabilities		(1,852)		(2,114)

Schedule of weighted average remaining lease term


Weighted Average Remaining Lease Term	March 31, 2019
Operating leases		3.66 years
Finance Leases		3.85 years

Schedule of weighted average discount rate


Weighted Average Discount Rate	March 31, 2019
Operating leases		2.92%
Finance Leases		2.17%

Schedule of maturities of lease liabilities

Maturities of lease liabilities consisted of the following (in thousands):


	Operating Leases		Finance Leases		Total
2019 (remainder)	$	1,396	$	1,147	$	2,543
2020		595		1,026		1,621
2021		390		509		899
2022		276		342		618
2023		241		312		553
Thereafter		405		237		642
Total lease payments		3,303		3,573		6,876
Less: present value discount		(192)		(671)		(863)
Present value of lease liabilities	$	3,111	$	2,902	$	6,013

Lease payments expected to be received

Lease payments expected to be received subsequent to March 31, 2019 are as follows:


	Lease payments
2019 (remainder)	$	4,254
2020		5,673
2021		3,356
Total installment receivables		13,283
Less: present value discount		(3,550)
Present value of installment receivables	$	9,733

Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt Instrument [Line Items]

Schedule of long-term debt (in thousands)

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


	March 31, 2019		December 31, 2018
Revolving credit facility	$	361,425	$	1,049,547
Senior Notes 2026, aggregate principal		725,000		725,000
Senior Notes 2027, aggregate principal		750,000		—
Less: deferred financing costs, net of amortization		(28,116)		(15,489)
Total Senior Notes, net		1,446,884		709,511
Total long-term debt, net	$	1,808,309	$	1,759,058

Senior Notes 2019

Debt Instrument [Line Items]

Schedule of redemption prices (expressed as percentages of the principal amount)


Year	Percentages
2022	105.156	%
2023	103.438	%
2024	101.719	%
2025 and thereafter	100.000	%

- 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
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-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
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-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
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-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
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-Name Accounting Standards Codification
-Topic 235
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-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
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 505
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-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 505
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-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
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-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

Preferred Units and Warrants (Tables)

3 Months Ended

Mar. 31, 2018

Preferred Units and Warrants

Changes in the Preferred Units balance

Changes in the Preferred Units balance from December 31, 2018 through March 31, 2019 are summarized below (in thousands):


	Preferred Units
Balance at December 31, 2018	$	477,309
Net income allocated to Preferred Units		12,187
Cash distributions on Preferred Units		(12,187)
Balance at March 31, 2019	$	477,309

Partners' Capital (Tables)

3 Months Ended

Mar. 31, 2019

Partners' Capital.

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

Distribution per

Amount Paid to

Limited Partner

Common

Phantom

Total

Payment Date

Unit

Unitholders

Distribution

February 8, 2019

0.525

47.2

0.7

47.9

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2019

Revenue Recognition

Disaggregation of revenue by type of service

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


	Three Months Ended March 31,
	2019		2018
Contract operations revenue	$	168,010	$	73,665
Retail parts and services revenue		2,736		2,865
Total revenues	$	170,746	$	76,530

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 March 31,
	2019		2018
Services provided or goods transferred at a point in time	$	2,736	$	2,865
Services provided over time:
Primary term		97,359		33,796
Month-to-month		70,651		39,869
Total revenues	$	170,746	$	76,530

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	1,200
General partner \| ETP
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 - Property and Equipment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Property and Equipment
Capitalized interest	$ 200,000
Impairment of intangible assets	0	$ 0
Impairment of goodwill	$ 0	0
Minimum
Property and Equipment
Amortization period of identifiable intangible asset	15 years
Maximum
Property and Equipment
Amortization period of identifiable intangible asset	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
Predecessor
Property and Equipment
Capitalized interest		$ 0

Basis of Presentation and Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Senior Notes 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, aggregate principal	$ 725,000	$ 725,000
Senior Notes 2027
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, aggregate principal	750,000
Carrying amount \| Senior Notes 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets		725,000
Fair value \| Senior Notes 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets		$ 696,000
Level 2 \| Carrying amount \| Senior Notes 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	725,000
Level 2 \| Carrying amount \| Senior Notes 2027
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	750,000
Level 2 \| Fair value \| Senior Notes 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	744,938
Level 2 \| Fair value \| Senior Notes 2027
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets	$ 767,813

Basis of Presentation and Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Operating lease right-of use assets	$ 2,943
Operating lease liabilities, current	(1,485)
Operating lease liabilities, long-term	$ (1,626)
Accounting Standards Update 2016-02
Lessee, Lease, Description [Line Items]
Operating lease right-of use assets		$ 3,502
Operating lease liabilities, current		(2,015)
Operating lease liabilities, long-term		$ (1,706)
Accounting Standards Update 2016-02 \| New Lease Standard Adjustment
Lessee, Lease, Description [Line Items]
Operating lease right-of use assets			$ 3,502
Operating lease liabilities, current			(2,015)
Operating lease liabilities, long-term			$ (1,706)

Trade Accounts Receivable (Details) - USD ($) $ in Millions	3 Months Ended
Trade Accounts Receivable (Details) - USD ($) $ in Millions	Mar. 31, 2018	Mar. 31, 2019	Dec. 31, 2018
Trade Accounts Receivable
Allowance for doubtful accounts		$ 1.7	$ 1.7
Allowance for doubtful accounts receivable, reduction	$ 0.4

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Inventory
Serialized parts	$ 47,018	$ 45,568
Non-serialized parts	46,762	43,439
Total Inventory, gross	93,780	89,007
Total Inventory, net	$ 93,780	$ 89,007

Property And Equipment, Identifiable Intangible Assets and Goodwill - Property and Equipment (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019 USD ($) item hp	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Property and Equipment
Property and Equipment, gross	$ 3,373,601		$ 3,343,024
Less accumulated depreciation and amortization	(871,209)		(821,536)
Property and Equipment, net	2,502,392		2,521,488
Depreciation expense	$ 51,600	$ 39,500
(Loss) gain on disposition of assets		(10,300)
Number of compressor units that are to be retired or sold or reutilized \| item	14
Number of horsepower that are to be retired or sold or reutilized \| hp	4,700
Impairment of long-lived assets	$ 3,234	$ 0
Accounts payable and accrued liabilities
Property and Equipment
Purchases of property and equipment	7,200		7,900
Compression and treating equipment
Property and Equipment
Property and Equipment, gross	$ 3,270,065		3,239,831
Newly acquired compression equipment
Property and Equipment
Estimated useful lives	25 years
Furniture and fixtures
Property and Equipment
Property and Equipment, gross	$ 1,129		1,129
Automobiles and vehicles
Property and Equipment
Property and Equipment, gross	31,863		32,490
Computer equipment
Property and Equipment
Property and Equipment, gross	55,810		54,806
Buildings
Property and Equipment
Property and Equipment, gross	$ 9,146		9,314
Estimated useful lives	5 years
Land
Property and Equipment
Property and Equipment, gross	$ 77		77
Leasehold improvements
Property and Equipment
Property and Equipment, gross	$ 5,511		$ 5,377
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

Property And Equipment, Identifiable Intangible Assets and Goodwill - Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Identifiable intangible assets, net
Net Balance, beginning of period	$ 392,550
Amortization expense	(7,345)
Net Balance, end of period	385,205
Accumulated amortization	165,500		$ 158,100
Expected amortization, year one	29,400
Expected amortization, year two	29,400
Expected amortization, year three	29,400
Expected amortization, year four	29,400
Expected amortization, year five	29,400
Goodwill	619,411		$ 619,411
Impairment of goodwill	0	$ 0
Customer Relationships
Identifiable intangible assets, net
Net Balance, beginning of period	355,161
Amortization expense	(6,526)
Net Balance, end of period	348,635
Trade Names
Identifiable intangible assets, net
Net Balance, beginning of period	37,389
Amortization expense	(819)
Net Balance, end of period	$ 36,570

Other Current Assets and Other Current Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Other Current Assets and Other Current Liabilities
Accrued sales tax	$ 44.9	$ 44.9
Accrued interest expense	5.0	16.4
Accrued payroll and benefits	6.1	10.7
Accrued capital expenditures	$ 7.2	$ 7.9

Leases (Details) - USD ($) $ in Thousands	3 Months Ended
Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease cost	$ 610
Amortization of finance lease right-of-use assets	819
Operating lease right-of use assets	2,943
Operating lease liabilities, current	(1,485)
Operating lease liabilities, long-term	(1,626)
Property and equipment, gross	7,516		$ 7,683
Accumulated depreciation	(5,533)		(4,882)
Property and equipment, net	1,983		2,801
Accrued liabilities	(1,050)		(1,085)
Other liabilities	$ (1,852)		(2,114)
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of use assets		$ 3,502
Operating lease liabilities, current		(2,015)
Operating lease liabilities, long-term		$ (1,706)
Accounting Standards Update 2016-02 \| New Lease Standard Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of use assets			3,502
Operating lease liabilities, current			(2,015)
Operating lease liabilities, long-term			$ (1,706)

Leases - Weighted Average (Details)	Mar. 31, 2019
Leases
Weighted Average Remaining Lease Term, Operating leases	3 years 7 months 28 days
Weighted Average Remaining Lease Term, Finance leases	3 years 10 months 6 days
Weighted Average Discount Rate, Operating leases (as a percentage)	2.92%
Weighted Average Discount Rate, Finance leases (as a percentage)	2.17%

Leases - Supplemental Cash Flow Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases
Operating cash flows from operating leases	$ (662)
Operating cash flows from finance leases	(194)
Financing cash flows from finance leases	$ (287)

Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Operating Leases
2019 (remainder)	$ 1,396
2020	595
2021	390
2022	276
2023	241
Thereafter	405
Total lease payments	3,303
Less: present value discount	(192)
Present value of lease liabilities	3,111
Finance Leases
2019 (remainder)	1,147
2020	1,026
2021	509
2022	342
2023	312
Thereafter	237
Total lease payments	3,573
Less: present value discount	(671)
Present value of lease liabilities	2,902
Total
2019 (remainder)	2,543
2020	1,621
2021	899
2022	618
2023	553
Thereafter	642
Total lease payments	6,876
Less: present value discount	(863)
Present value of lease liabilities	6,013
Operating leases not yet commenced, amount	$ 6,700
Operating leases not yet commenced, term	10 years

Leases - Lease Terms (Details)	3 Months Ended
Leases - Lease Terms (Details)	Mar. 31, 2019
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	2 years
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, term	1 year
Capital lease, term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, term	7 years
Capital lease, term	7 years
Capital lease, renewal term	2 years
Operating lease, option to terminate term	1 year
Capital lease, option to terminate term	1 year

Leases - Lessor Accounting (Details) - USD ($)	3 Months Ended
Leases - Lessor Accounting (Details) - USD ($)	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Lessor, Lease, Description [Line Items]
Installment receivable	$ 5,952,000		$ 6,924,000
Revenue	163,976,000	$ 69,807,000
Interest income on capital lease transactions	200,000
2019 (remainder)	4,254
2020	5,673
2021	3,356
Total installment receivables	13,283
Less: present value discount	(3,550)
Present value of installment receivables	9,733
Sales type lease
Lessor, Lease, Description [Line Items]
Installment receivable, current	3,800,000		3,700,000
Installment receivable	6,000,000		$ 6,900,000
BPO Capital Lease Transaction
Lessor, Lease, Description [Line Items]
Revenue	$ 300,000

Long-Term Debt (Details)	3 Months Ended
Long-Term Debt (Details)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Long-term debt
Less: deferred financing costs, net of amortization	$ (28,116,000)	$ (15,489,000)
Total long-term debt	1,808,309,000	1,759,058,000
Loan fees and incurred costs paid during period	13,220,000
Amount of indebtedness repaid	$ 909,914,000
USA Compression Partners, LP
Long-term debt
Ownership interest in guarantors (as a percent)	100.00%
Revolving credit facility
Long-term debt
Long-term debt, current portion	$ 0	0
Long-term debt, aggregate principal	361,425,000	1,049,547,000
Availability under credit agreement	$ 100,000,000
Minimum EBITDA to interest coverage ratio	2.5
Increase in maximum funded debt to EBITDA ratio in connection with certain future acquisitions	0.5
Consecutive period following the period in which any acquisition occurs for maintaining increased maximum funded debt to EBITDA ratio	6 months
Borrowing base availability	$ 1,200,000,000
Borrowing capacity, subject to covenants	$ 492,700,000
Effective interest rate (as a percent)	5.17%
Weighted average interest rate (as a percent)	5.07%
Letters of credit	$ 0
Revolving credit facility \| 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 \| 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 \| Thereafter
Long-term debt
Maximum Funded debt to EBITDA ratio	5.00
Senior Notes 2026
Long-term debt
Long-term debt, aggregate principal	$ 725,000,000	725,000,000
Senior Notes 2027
Long-term debt
Long-term debt, aggregate principal	750,000,000
Loan fees and incurred costs paid during period	$ 13,100,000
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 2027 \| Prior to April 1, 2021 \| Redemption required from hypothetical change of control or ratings decline
Long-term debt
Redemption price (as a percent)	101.00%
Senior Notes 2027 \| 2022
Long-term debt
Redemption price (as a percent)	105.156%
Senior Notes 2027 \| 2023
Long-term debt
Redemption price (as a percent)	103.438%
Senior Notes 2027 \| 2024 and thereafter
Long-term debt
Redemption price (as a percent)	101.719%
Senior Notes 2027 \| 2025 and thereafter
Long-term debt
Redemption price (as a percent)	100.00%
Senior Notes 2018
Long-term debt
Effective interest rate (as a percent)	6.875%
Senior Notes
Long-term debt
Total long-term debt	$ 1,446,884,000	$ 709,511,000

Preferred Units and Warrants (Details) $ / shares in Units, $ in Thousands		3 Months Ended
	Apr. 02, 2018 USD ($) tranche $ / shares shares	Mar. 31, 2019 USD ($) $ / shares
Beginning balance		$ 477,309
Cash distributions on Preferred Units		(12,187)
Ending balance		477,309
EIG
Number of tranches of warrants \| tranche	2
Series A Preferred Units
Beginning balance		477,309
Net income allocated to Preferred Units		12,187
Cash distributions on Preferred Units		(12,187)
Ending balance		$ 477,309
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

Partners' Capital (Details)	Mar. 31, 2019 shares
Limited partner \| Class B Units
Partners' Capital
Partners' capital (in units)	6,397,965
Limited partner \| Common units
Partners' Capital
Partners' capital (in units)	90,157,764
Limited partner \| Common units \| ETE
Partners' Capital
Partners' capital (in units)	39,658,263
General partner \| Common units \| ETE
Partners' Capital
Partners' capital (in units)	8,000,000

Partners' Capital - Cash Distributions (Details) - USD ($)			3 Months Ended
	Apr. 18, 2019	Feb. 08, 2019	Mar. 31, 2019	Dec. 31, 2018
Cash Distributions
Cash Distributions
Total Distribution		$ 47.9
Distribution reinvestment plan ("DRIP")
Cash Distributions
Common Unit, Issued			16,714
Phantom Unitholders \| Cash Distributions
Cash Distributions
Total Distribution		$ 0.7
Limited partner \| Common and Subordinated Units \| Cash Distributions
Cash Distributions
Distribution per Limited Partner Unit (in dollars per share)		$ 0.525
Limited partner \| Common and Subordinated Units \| Distribution reinvestment plan ("DRIP")
Cash Distributions
Non-cash distributions			$ 300,000
Limited partner \| Common units
Cash Distributions
Limited partner units issued (in shares)			90,158,000	89,984,000
Limited partner \| Common units \| Cash Distributions
Cash Distributions
Total Distribution		$ 47.2
Cash distribution announced per unit (in dollars per share)	$ 0.525

Partners' Capital - Earnings Per Unit (Details)	3 Months Ended
Partners' Capital - Earnings Per Unit (Details)	Mar. 31, 2019 shares
Phantom units
Partners' Capital
Units or warrants excluded from computation of earnings per unit	114,000

Revenue Recognition (Disaggregated Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Total revenues	$ 170,746	$ 76,530
Services provided or goods transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenues	2,736	2,865
Recurring term contracts: Primary Term
Disaggregation of Revenue [Line Items]
Total revenues	97,359	33,796
Recurring term contracts: Month-to-month
Disaggregation of Revenue [Line Items]
Total revenues	70,651	39,869
Contract operations revenue
Disaggregation of Revenue [Line Items]
Total revenues	168,010	73,665
Retail parts and services revenue
Disaggregation of Revenue [Line Items]
Total revenues	$ 2,736	$ 2,865

Revenue Recognition (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Revenue Recognition
Contract assets	$ 0.0	$ 0.0

Transactions with Related Parties (Details) - USD ($) $ in Thousands		3 Months Ended
	Mar. 31, 2019	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Transactions with Related Parties
Revenue from related parties		$ 4,086	$ 3,973
Related party receivables				$ 2,700
Limited partner \| ETP
Transactions with Related Parties
Ownership interest (as a percent)	48.00%
General partner \| ETP
Transactions with Related Parties
Ownership interest (as a percent)	100.00%
ETP
Transactions with Related Parties
Related party receivables	$ 44,900	44,900
Entities affiliated with ETP
Transactions with Related Parties
Revenue from related parties		4,100
Related party receivables	$ 700	700
Predecessor \| ETP
Transactions with Related Parties
Medical, dental and other healthcare benefits		1,900
401(k) contribution cost		900
401(k) match (as a percent)			3.00%
Related party, general and administrative expenses		$ 1,800

Commitments and Contingencies - Purchase Commitments and Sales Tax Contingency (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Other commitments
Related party receivables		$ 2.7
Sales and local taxes accrued	$ 44.9	$ 44.9
Self insurance liability	0.8
Compression units
Other commitments
Future purchase commitments	84.5
ETP
Other commitments
Accrued liabilities	44.9
Related party receivables	$ 44.9