Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 13, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-33666 | ||
Entity Registrant Name | Archrock, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 74-3204509 | ||
Entity Address, Address | 9807 Katy Freeway | ||
Entity Address, Suite | Suite 100 | ||
Entity Address, City | Houston | ||
Entity Address, State | TX | ||
Entity Address, Postal Zip Code | 77024 | ||
City Area Code | 281 | ||
Local Phone Number | 836-8000 | ||
Title of each class | Common Stock, $0.01 par value per share | ||
Trading Symbol | AROC | ||
Name of exchange on which registered | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,357,045,157 | ||
Entity Common Stock, Shares Outstanding | 152,879,266 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the 2019 Meeting of Stockholders, which is expected to be filed with the Securities and Exchange Commission within 120 days after December 31, 2019 , are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0001389050 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,685 | $ 5,610 |
Accounts receivable, trade, net of allowance of $2,210 and $1,452, respectively | 144,865 | 147,985 |
Inventory | 74,467 | 76,333 |
Tax refund receivable | 0 | 15,262 |
Other current assets | 9,186 | 10,706 |
Current assets associated with discontinued operations | 0 | 300 |
Total current assets | 232,203 | 256,196 |
Property, plant and equipment, net | 2,559,398 | 2,171,038 |
Operating lease ROU assets | 17,901 | |
Goodwill | 100,598 | 0 |
Intangible assets, net | 77,471 | 52,370 |
Contract costs, net | 42,927 | 39,020 |
Deferred tax assets | 36,642 | 4,256 |
Other assets | 29,934 | 22,572 |
Noncurrent assets associated with discontinued operations | 12,901 | 7,063 |
Total assets | 3,109,975 | 2,552,515 |
Current liabilities: | ||
Accounts payable, trade | 60,215 | 54,939 |
Accrued liabilities | 67,845 | 78,997 |
Deferred revenue | 10,683 | 16,509 |
Current liabilities associated with discontinued operations | 0 | 297 |
Total current liabilities | 138,743 | 150,742 |
Long-term debt | 1,842,549 | 1,529,501 |
Operating lease liabilities | 16,094 | |
Deferred tax liabilities | 1,289 | 2,842 |
Other liabilities | 16,829 | 20,793 |
Noncurrent liabilities associated with discontinued operations | 8,508 | 7,063 |
Total liabilities | 2,024,012 | 1,710,941 |
Commitments and contingencies (Note 26) | ||
Equity: | ||
Preferred stock: $0.01 par value per share, 50,000,000 shares authorized, zero issued | 0 | 0 |
Common stock: $0.01 par value per share, 250,000,000 shares authorized, 158,636,918 and 135,787,509 shares issued, respectively | 1,587 | 1,358 |
Additional paid-in capital | 3,412,509 | 3,177,982 |
Accumulated other comprehensive income (loss) | (1,387) | 5,773 |
Accumulated deficit | (2,244,877) | (2,263,677) |
Treasury stock: 6,702,602 and 6,381,605 common shares, at cost, respectively | (81,869) | (79,862) |
Total equity | 1,085,963 | 841,574 |
Total liabilities and equity | $ 3,109,975 | $ 2,552,515 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 2,210 | $ 1,452 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 158,636,918 | 135,787,509 |
Treasury stock, common shares (in shares) | 6,702,602 | 6,381,605 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Revenue | $ 965,485 | $ 904,441 | $ 794,655 |
Cost of sales (excluding depreciation and amortization): | |||
Total cost of sales (excluding depreciation and amortization) | 456,238 | 464,367 | 418,922 |
Selling, general and administrative | 117,727 | 101,563 | 111,483 |
Depreciation and amortization | 188,084 | 174,946 | 188,563 |
Long-lived asset impairment | 44,663 | 28,127 | 29,142 |
Restatement and other charges | 445 | 19 | 4,370 |
Restructuring and other charges | 0 | 0 | 1,386 |
Interest expense | 104,681 | 93,328 | 88,760 |
Debt extinguishment loss | 3,653 | 2,450 | 291 |
Transaction-related costs | 8,213 | 10,162 | 275 |
Gain on sale of assets, net | (16,016) | (5,674) | (5,675) |
Other income, net | (661) | (157) | (243) |
Income (loss) before income taxes | 58,458 | 35,310 | (42,619) |
Provision for (benefit from) income taxes | (39,145) | 6,150 | (61,083) |
Income from continuing operations | 97,603 | 29,160 | 18,464 |
Loss from discontinued operations, net of tax | (273) | 0 | (54) |
Net income | 97,330 | 29,160 | 18,410 |
Less: Net (income) loss attributable to the noncontrolling interest | 0 | (8,097) | 543 |
Net income attributable to Archrock stockholders | $ 97,330 | $ 21,063 | $ 18,953 |
Basic and diluted net income per common share Archrock common stockholders (usd per share) | $ 0.70 | $ 0.19 | $ 0.26 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 137,492 | 109,305 | 69,552 |
Diluted (in shares) | 137,528 | 109,421 | 69,664 |
Contract Operations | Contract operations | |||
Revenue: | |||
Revenue | $ 771,539 | $ 672,536 | $ 610,921 |
Cost of sales (excluding depreciation and amortization): | |||
Total cost of sales (excluding depreciation and amortization) | 297,260 | 273,013 | 263,005 |
Aftermarket Services | Aftermarket Services | |||
Revenue: | |||
Revenue | 193,946 | 231,905 | 183,734 |
Cost of sales (excluding depreciation and amortization): | |||
Total cost of sales (excluding depreciation and amortization) | $ 158,978 | $ 191,354 | $ 155,917 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 97,330 | $ 29,160 | $ 18,410 |
Other comprehensive income (loss), net of tax: | |||
Interest rate swap gain (loss), net of reclassifications to earnings | (7,160) | 2,681 | 7,107 |
Amortization of terminated interest rate swaps | 0 | 230 | 359 |
Merger-related adjustments | 0 | 5,670 | 0 |
Adjustments from other changes in ownership of Partnership | 0 | 0 | 32 |
Total other comprehensive income (loss), net of tax | (7,160) | 8,581 | 7,498 |
Comprehensive income | 90,170 | 37,741 | 25,908 |
Less: Comprehensive income attributable to the noncontrolling interest | 0 | (12,360) | (4,080) |
Comprehensive income attributable to Archrock stockholders | $ 90,170 | $ 25,381 | $ 21,828 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Partnership Merger | Common Stock | Common StockPartnership Merger | Additional Paid-in Capital | Additional Paid-in CapitalPartnership Merger | Accumulated Other Comprehensive Loss | Treasury Stock | Accumulated Deficit | Noncontrolling Interest | Noncontrolling InterestPartnership Merger |
Beginning balance at Dec. 31, 2016 | $ 684,928 | $ 762 | $ 3,021,040 | $ (1,678) | $ (73,944) | $ (2,227,214) | $ (34,038) | ||||
Beginning balance, shares at Dec. 31, 2016 | 76,162,279 | (5,626,074) | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Treasury stock purchased, shares | (225,237) | ||||||||||
Treasury stock purchased | (2,788) | $ (2,788) | |||||||||
Cash dividends | (34,063) | (34,063) | |||||||||
Shares issued in employee stock purchase plan, shares | 35,180 | ||||||||||
Shares issued in employee stock purchase plan | 356 | 356 | |||||||||
Stock-based compensation, net of forfeitures, shares | 616,799 | (79,069) | |||||||||
Stock-based compensation, net of forfeitures | 9,009 | $ 6 | 8,115 | 888 | |||||||
Stock options exercised, shares | 66,604 | ||||||||||
Stock options exercised | 992 | $ 1 | 991 | ||||||||
Contribution from Exterran Corporation | 44,709 | 44,709 | |||||||||
Net proceeds from the sale of Partnership units, net of tax | 49,726 | 17,638 | 32,088 | ||||||||
Cash distribution to noncontrolling unitholders of the Partnership | (44,449) | (44,449) | |||||||||
Shares issued for Elite Acquisition | $ 0 | ||||||||||
Comprehensive income | |||||||||||
Net income | 18,410 | 18,953 | (543) | ||||||||
Interest rate swap gain (loss), net of reclassifications to earnings | 7,107 | 2,484 | 4,623 | ||||||||
Amortization of terminated interest rate swaps | 359 | 359 | |||||||||
Adjustments from other changes in ownership of Partnership | 32 | 32 | |||||||||
Merger-related adjustments | 0 | 0 | |||||||||
Ending balance, share at Dec. 31, 2017 | 76,880,862 | (5,930,380) | |||||||||
Ending balance at Dec. 31, 2017 | 735,618 | $ 769 | 3,093,058 | 1,197 | $ (76,732) | (2,241,243) | (41,431) | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Treasury stock purchased, shares | (167,382) | ||||||||||
Treasury stock purchased | (1,759) | $ (1,759) | |||||||||
Cash dividends | (58,288) | (58,288) | |||||||||
Shares issued in employee stock purchase plan, shares | 93,617 | ||||||||||
Shares issued in employee stock purchase plan | 803 | $ 1 | 802 | ||||||||
Stock-based compensation, net of forfeitures, shares | 960,028 | (141,121) | |||||||||
Stock-based compensation, net of forfeitures | 7,138 | $ 10 | 7,192 | (64) | |||||||
Stock options exercised, shares | 218,997 | (142,722) | |||||||||
Stock options exercised | (28) | $ 2 | 1,341 | $ (1,371) | |||||||
Contribution from Exterran Corporation | 18,744 | 18,744 | |||||||||
Cash distribution to noncontrolling unitholders of the Partnership | (11,766) | (11,766) | |||||||||
Merger-related adjustments, shares | 57,634,005 | ||||||||||
Merger-related adjustments | 98,322 | $ 576 | $ 56,845 | $ 40,901 | |||||||
Shares issued for Elite Acquisition | 57,421 | ||||||||||
Comprehensive income | |||||||||||
Net income | 29,160 | 21,063 | 8,097 | ||||||||
Interest rate swap gain (loss), net of reclassifications to earnings | 2,681 | (1,582) | 4,263 | ||||||||
Amortization of terminated interest rate swaps | 230 | 230 | |||||||||
Adjustments from other changes in ownership of Partnership | 0 | ||||||||||
Merger-related adjustments | 5,670 | 5,670 | |||||||||
Ending balance, share at Dec. 31, 2018 | 135,787,509 | (6,381,605) | |||||||||
Ending balance at Dec. 31, 2018 | 841,574 | $ 1,358 | 3,177,982 | 5,773 | $ (79,862) | (2,263,677) | 0 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Treasury stock purchased, shares | (212,080) | ||||||||||
Treasury stock purchased | (2,007) | $ (2,007) | |||||||||
Cash dividends | (78,530) | (78,530) | |||||||||
Shares issued in employee stock purchase plan, shares | 87,933 | ||||||||||
Shares issued in employee stock purchase plan | 771 | $ 1 | 770 | ||||||||
Stock-based compensation, net of forfeitures, shares | 1,104,793 | (108,917) | |||||||||
Stock-based compensation, net of forfeitures | 8,105 | $ 11 | 8,094 | ||||||||
Shares issued for Elite Acquisition, shares | 21,656,683 | ||||||||||
Shares issued for Elite Acquisition | 225,880 | $ 0 | $ 217 | 225,663 | |||||||
Comprehensive income | |||||||||||
Net income | 97,330 | 97,330 | |||||||||
Interest rate swap gain (loss), net of reclassifications to earnings | (7,160) | (7,160) | |||||||||
Amortization of terminated interest rate swaps | 0 | ||||||||||
Adjustments from other changes in ownership of Partnership | 0 | ||||||||||
Merger-related adjustments | 0 | 0 | |||||||||
Ending balance, share at Dec. 31, 2019 | 158,636,918 | (6,702,602) | |||||||||
Ending balance at Dec. 31, 2019 | $ 1,085,963 | $ 1,587 | $ 3,412,509 | $ (1,387) | $ (81,869) | $ (2,244,877) | $ 0 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||||
Dividend declared per common stock (usd per share) | $ 0.145 | $ 0.145 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.554 | $ 0.5040 | $ 0.4800 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 97,330 | $ 29,160 | $ 18,410 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Loss from discontinued operations, net of tax | 273 | 0 | 54 |
Depreciation and amortization | 188,084 | 174,946 | 188,563 |
Long-lived asset impairment | 44,663 | 28,127 | 29,142 |
Inventory write-downs | 944 | 1,614 | 2,397 |
Amortization of operating lease ROU assets | 2,931 | ||
Amortization of deferred financing costs | 6,211 | 6,113 | 6,976 |
Amortization of debt discount | 910 | 1,410 | 1,325 |
Amortization of terminated interest rate swaps | 0 | 291 | 552 |
Debt extinguishment loss | 3,653 | 2,450 | 291 |
Interest rate swaps | (1,071) | (131) | 2,183 |
Stock-based compensation expense | 8,105 | 7,388 | 8,461 |
Non-cash restructuring charges | 0 | 0 | 997 |
Provision for doubtful accounts | 2,567 | 1,677 | 5,144 |
Gain on sale of assets, net | (16,016) | (5,674) | (5,675) |
Deferred income tax provision (benefit) | (39,597) | 5,238 | (59,760) |
Amortization of contract costs | 23,330 | 14,939 | 0 |
Deferred revenue recognized in earnings | (42,268) | (28,428) | 0 |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable, trade | 3,248 | (21,028) | (6,889) |
Inventory | 6,036 | 4,210 | (236) |
Other assets | 4,458 | (15,249) | (721) |
Contract costs, net | (27,237) | (32,435) | 0 |
Accounts payable and other liabilities | (12,728) | 14,964 | 9,616 |
Deferred revenue | 36,578 | 36,571 | 730 |
Other | 12 | (206) | 104 |
Net cash provided by continuing operations | 290,416 | 225,947 | 201,664 |
Net cash used in discontinued operations | (269) | 0 | 0 |
Net cash provided by operating activities | 290,147 | 225,947 | 201,664 |
Cash flows from investing activities: | |||
Capital expenditures | (385,198) | (319,102) | (221,693) |
Proceeds from sale of property, plant and equipment and other assets | 80,961 | 33,927 | 46,954 |
Proceeds from insurance and other settlements | 3,696 | 252 | 252 |
Cash paid in Elite Acquisition | (214,019) | 0 | 0 |
Net cash used in investing activities | (514,560) | (284,923) | (174,487) |
Cash flows from financing activities: | |||
Borrowings of long-term debt | 2,395,250 | 714,830 | 1,242,000 |
Repayments of long-term debt | (2,071,750) | (605,636) | (1,270,194) |
Payments for debt issuance costs | (22,426) | (3,332) | (14,855) |
Proceeds from (payments for) settlement of interest rate swaps that include financing elements | 1,180 | 190 | |
Proceeds from (payments for) settlement of interest rate swaps that include financing elements | (1,785) | ||
Dividends paid to Archrock stockholders | (78,530) | (58,288) | (34,063) |
Distributions paid to noncontrolling partners in the Partnership | 0 | (11,766) | (44,449) |
Net proceeds from sale of Partnership units | 0 | 0 | 60,291 |
Proceeds from stock options exercised | 0 | 264 | 992 |
Proceeds from stock issued under employee stock purchase plan | 771 | 803 | 356 |
Purchases of treasury stock | (2,007) | (1,759) | (2,788) |
Contribution from Exterran Corporation | 0 | 18,744 | 44,720 |
Net cash provided by (used in) financing activities | 222,488 | 54,050 | (19,775) |
Net increase (decrease) in cash and cash equivalents | (1,925) | (4,926) | 7,402 |
Cash and cash equivalents, beginning of period | 5,610 | 10,536 | 3,134 |
Cash and cash equivalents, end of period | 3,685 | 5,610 | 10,536 |
Supplemental disclosure of cash flow information: | |||
Interest paid | (97,451) | (86,758) | (78,891) |
Income taxes refunded, net | 1,973 | 2,131 | 695 |
Supplemental disclosure of non-cash transactions: | |||
Accrued capital expenditures | 11,767 | 17,491 | 22,490 |
Issuance of Archrock common stock pursuant to Elite Acquisition, net of tax | 225,880 | ||
Partnership Merger | |||
Supplemental disclosure of non-cash transactions: | |||
Issuance of Archrock common stock pursuant to Elite Acquisition, net of tax | 0 | 57,421 | 0 |
Elite Acquisition | |||
Supplemental disclosure of non-cash transactions: | |||
Issuance of Archrock common stock pursuant to Elite Acquisition, net of tax | $ 225,880 | $ 0 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business We are an energy infrastructure company with a pure-play focus on midstream natural gas compression. We are the leading provider of natural gas compression services to customers in the oil and natural gas industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment in the U.S. We operate in two business segments: contract operations and aftermarket services. Our predominant segment, contract operations, primarily includes designing, sourcing, owning, installing, operating, servicing, repairing and maintaining our owned fleet of natural gas compression equipment to provide natural gas compression services to our customers. In our aftermarket services business, we sell parts and components and provide operations, maintenance, overhaul and reconfiguration services to customers who own compression equipment. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation Our Financial Statements include Archrock and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. We consolidate the financial statements of the Partnership and reflect its operations in our contract operations segment. We control the Partnership through our ownership of its General Partner. Public ownership of the Partnership’s net assets and earnings prior to the Merger is reflected within noncontrolling interest in our Financial Statements. Our Financial Statements are prepared in accordance with GAAP and the rules and regulations of the SEC. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. Because of the inherent uncertainties in this process, actual future results could differ from those expected as of the reporting date. Management believes that the estimates and assumptions used are reasonable. Significant Accounting Policies Cash and Cash Equivalents We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Revenue Recognition As a result of our adoption of ASC 606 Revenue on January 1, 2018, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we are entitled to receive in exchange for those goods or services. Sales and usage-based taxes that are collected from the customer are excluded from revenue. In our contract operations business, natural gas compression service revenue is recognized over time and revenue associated with billable maintenance on our natural gas compression equipment is recognized at a point in time. The timing of revenue recognition is impacted by contractual provisions for service availability guarantees of our compression assets and re-billable costs associated with moving our compression assets to a customer site. Under previous guidance, contract operations revenue was recognized when earned, which generally occurs monthly when the service is provided under our customer contracts. In our aftermarket services business, maintenance, overhaul and reconfiguration services revenue is recognized over time using output or input methods to measure the progress toward complete satisfaction of the performance obligation and revenue from the sale of OTC parts is recognized at a point in time. Under previous guidance, revenue was recognized on a completed contract basis as products were delivered and title was transferred or services were performed for the customer. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and trade accounts receivable. We believe that the credit risk of our temporary cash investments is minimal because we maintain minimal balances in our cash investment accounts. Trade accounts receivable are due from companies of varying size engaged principally in oil and natural gas activities throughout the U.S. We review the financial condition of customers prior to extending credit and generally do not obtain collateral for trade receivables. Payment terms are on a short-term basis and in accordance with industry practice. We consider this credit risk to be limited due to these companies’ financial resources, the nature of the products and services we provide and the terms of our contract operations customer service agreements. No customer accounted for more than 10% of our trade accounts receivable balance at December 31, 2019 . At December 31, 2018 , Anadarko and Williams Partners accounted for 13% and 11% , respectively, of our trade accounts receivable balance. Outstanding accounts receivable are reviewed regularly for non-payment indicators and allowances for doubtful accounts are recorded based upon management’s estimate of collectibility at each balance sheet date. During the years ended December 31, 2019 , 2018 and 2017 , we recorded bad debt expense of $2.6 million , $1.7 million and $5.1 million , respectively. Inventory Inventory consists of parts used for maintenance of natural gas compression equipment. Inventory is stated at the lower of cost and net realizable value using the average cost method. Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 to 5 years Other 3 to 10 years Major improvements that extend the useful life of an asset are capitalized and depreciated over the estimated useful life of the major improvement, up to seven years . Repairs and maintenance are expensed as incurred. Long-Lived Assets We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. An impairment loss exists when estimated undiscounted cash flows expected from the use of the asset and its eventual disposition are less than its carrying amount. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its fair value. Identifiable intangibles are amortized over the estimated useful life of the asset. Leases As a result of our adoption of ASC 842 Leases on January 1, 2019, we recorded an operating lease ROU asset and an operating lease liability on our consolidated balance sheet. Under previous guidance, operating leases were not recorded to the balance sheet. We determine if an arrangement is a lease at inception and determine lease classification and recognize ROU assets and liabilities on the lease commencement date based on the present value of lease payments over the lease term. As the discount rate implicit in the lease is rarely readily determinable, we estimate our incremental borrowing rate using information available at commencement date in determining the present value of the lease payments. The lease term includes options to extend when we are reasonably certain to exercise the option. Short-term leases, those with an initial term of 12 months or less, are not recorded on the balance sheet. Variable costs such as our proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Operating lease expense for lease payments is recognized on a straight-line basis over the term of the lease. Our facility leases, of which we are the lessee, contain lease and nonlease components for which we have elected to account for as a single lease component, as the nonlease components are not significant to the total consideration of the contract and separating the nonlease component would have no effect on lease classification. As it relates to our contract operations service agreements, in which we are a lessor, the services nonlease component is predominant over the compression package lease component and therefore recognition of these agreements will continue to follow the ASC 606 Revenue guidance. Under previous guidance, no separation of lease and nonlease component is required, for either lessee or lessor. Goodwill The goodwill acquired in connection with the Elite Acquisition represents the excess of consideration transferred over the fair value of the assets and liabilities acquired. We review the carrying amount of our goodwill in the fourth quarter of every year, or whenever indicators of potential impairment exist, to determine if the carrying amount of a reporting unit exceeds its fair value, including the applicable goodwill. We perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is impaired. If the fair value is more likely than not impaired, we perform a quantitative impairment test to identify impairment and measure the amount of impairment loss to be recognized, if any. Our qualitative assessment includes consideration of various events and circumstances and their potential impact to a reporting unit’s fair value, including macroeconomic and industry conditions such as a deterioration in our operating environment and limitations on access to capital and other developments in the equity and credit markets, cost factors that could have a negative effect on earnings and cash flows, relevant entity-specific and reporting unit-specific events and overall financial performance such as declining earnings or cash flows or a sustained decrease in share price. The quantitative impairment test (i) allocates goodwill and our other assets and liabilities to our reporting units, contract operations and aftermarket services, (ii) calculates the fair value of the reporting units and (iii) determines the impairment loss, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value (limited to the total amount of goodwill allocated to that reporting unit). All of the goodwill recognized in the Elite Acquisition was allocated to our contract operations reporting unit. The fair value of the contract operations reporting unit is calculated using the expected present value of future cash flows method. Significant estimates are made to determine future cash flows including future revenues, costs and capital requirements and the appropriate risk-adjusted discount rate by which to discount the estimated future cash flows. Our fourth quarter qualitative assessment determined that it was not more likely than not that the fair value of the contract operations reporting unit was less than its carrying amount as of December 31, 2019, and as such, no quantitative impairment test of our goodwill was warranted. Internal-Use Software Certain of our contracts have been deemed to be hosting arrangements that are service contracts, including those related to the cloud migration of our ERP system and cloud services for our new mobile workforce, telematics and inventory management tools. Certain costs incurred for the implementation of a hosting arrangement that is a service contract are capitalized and amortized on a straight-line basis over the term of the respective contract. Capitalized implementation costs are presented in other assets, the same line item in our consolidated balance sheets that a prepayment of the fees for the associated hosting arrangement would be presented. Amortization expense of the capitalized implementation costs is presented in SG&A, the same line item in our consolidated statements of operations as the expense for fees for the associated hosting arrangement. Amortization begins for each component of the hosting arrangement when the component becomes ready for its intended use. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If a valuation allowance was previously recorded and we subsequently determined we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax assets’ valuation allowance, which would reduce the provision for income taxes. We record uncertain tax positions in accordance with the accounting standard on income taxes under a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Hedging and Use of Derivative Instruments We use derivative instruments to manage our exposure to fluctuations in the variable interest rate of the Credit Facility and thereby minimize the risks and costs associated with financial activities. We do not use derivative instruments for trading or other speculative purposes. We record interest rate swaps on the balance sheet as either derivative assets or derivative liabilities measured at their fair value. The fair value of our derivatives is based on the income approach (discounted cash flow) using market observable inputs, including LIBOR forward curves. Changes in the fair value of the derivatives designated as cash flow hedges are recognized as a component of other comprehensive income (loss) until the hedged transaction affects earnings. At that time, amounts are reclassified into earnings to interest expense, the same statement of operations line item to which the earnings effect of the hedged item is recorded. To qualify for hedge accounting treatment, we must formally document, designate and assess the effectiveness of the transactions. If the necessary correlation ceases to exist or if the anticipated transaction is no longer probable, we would discontinue hedge accounting and apply mark-to-market accounting. Amounts paid or received from interest rate swap agreements are recorded in interest expense and matched with the cash flows and interest expense of the debt being hedged, resulting in an adjustment to the effective interest rate. |
Recent Accounting Developments
Recent Accounting Developments | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Developments | 3. Recent Accounting Developments Accounting Standards Updates Implemented Goodwill On October 1, 2019, we prospectively adopted ASU 2017-04, which simplifies the test for goodwill impairment by eliminating Step 2 in the test for goodwill impairment, which required an entity to calculate the implied fair value of goodwill. Under this amendment, an entity should perform its goodwill impairment test on at least an annual basis by comparing the fair value of a reporting unit, including any income tax effects from any tax deductible goodwill, with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Leases ASC 842 Leases establishes a ROU model that requires a lessee to record a ROU asset and a lease liability on the balance sheet. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new guidance, lessor accounting is largely unchanged. We adopted ASC 842 Leases on January 1, 2019 using the modified retrospective transition method and elected the practical expedient package to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification of any expired or existing leases and (iii) initial direct costs for any existing leases. We did not elect the practical expedient to use hindsight in determining the lease term. Adoption of ASC 842 Leases resulted in recognition of an operating lease ROU asset of $18.6 million and an operating lease liability of $20.0 million in our consolidated balance sheet at January 1, 2019. The difference of $1.4 million related to accrued rent and prepaid lease payments recorded to our consolidated balance sheet as of December 31, 2018. We did not recognize any finance lease ROU assets or liabilities upon adoption of ASC 842 Leases. There was no impact to our consolidated statements of operations, equity or cash flows upon adoption. Comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. ASC 842 Leases also provides a practical expedient, elected by class of underlying asset, to not separate lease and nonlease components and instead account for those components as a single component if certain conditions are met. ASC 842 Leases also provides clarification for lessors on whether ASC 842 Leases or ASC 606 Revenue is applicable to the combined component based on determination of the predominant component. We have concluded that for our contract operations services agreements, in which we are a lessor, the services nonlease component is predominant over the compression unit lease component and therefore ongoing recognition of these agreements will continue to follow the ASC 606 Revenue guidance. We have also elected, as a lessee, to not separate lease and nonlease components as it relates to our facility leases. In addition, we have made an accounting policy election, as permitted by ASC 842 Leases, to not apply the recognition requirements of ASC 842 Leases to leases with an initial term of 12 months or less. Accounting Standards Updates Not Yet Implemented Income Taxes In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to various tax accounting principles and clarifies other existing guidance in order to improve consistency of application. These amendments are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted and requires that an entity early adopt all of the amendments within this update in the same period. We are currently evaluating the impact of ASU 2019-12 on our consolidated financial statements and footnote disclosures. Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, which amends the required fair value measurements disclosures related to valuation techniques and inputs used, uncertainty in measurement and changes in measurements applied. These amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty are to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments are to be applied retrospectively to all periods presented upon their effective date. We will adopt ASU 2018-13 effective January 1, 2020. These amendments will impact our disclosures related to our fair value measurements of our idle and previously-culled compressors and borrowings outstanding under our Credit Facility. We currently anticipate that the adoption will have no impact on our consolidated financial statements and are developing the new disclosures required by the new standard for inclusion in our first quarterly filing of 2020. Credit Losses In June 2016, the FASB issued ASU 2016-13, which changes the impairment model for financial assets measured at amortized cost and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new current expected credit loss model that will result in earlier recognition of allowance for losses. For public entities that meet the definition of an SEC filer, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. Entities will apply ASU 2016-13 provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We will adopt ASU 2016-13 effective January 1, 2020 and do not currently anticipate that the adoption will have a material impact on our consolidated financial statements. Our financial assets measured at amortized cost consist primarily of receivables from revenue transactions within the scope of ASC 606 Revenue. We are currently updating our accounting policies, documenting operational procedures and finalizing changes to our systems and internal control structure as necessary to implement the new standard and address the risks associated with estimating current expected credit losses. |
Business Transactions
Business Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Transactions | 4. Business Transactions Elite Acquisition On August 1, 2019, we completed the Elite Acquisition whereby we acquired from Elite Compression substantially all of its assets, including a fleet of predominantly large compressors comprising approximately 430,000 horsepower, vehicles, real property and inventory, and certain liabilities for aggregate consideration consisting of $214.0 million in cash and 21.7 million shares of common stock with an acquisition date fair value of $225.9 million . The cash portion of the acquisition was funded with borrowings on the Credit Facility. The Elite Acquisition was accounted for using the acquisition method, which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the acquisition date. The excess of the consideration transferred over those fair values is recorded as goodwill. The following table summarizes the purchase price allocation based on the estimated fair values of the acquired assets and liabilities as of the acquisition date (in thousands): Accounts receivable $ 9,007 Inventory 7,987 Other current assets 608 Property, plant and equipment 286,158 Operating lease ROU assets 682 Goodwill 100,598 Intangible assets 40,237 Accounts payable, trade (2,079 ) Accrued liabilities (2,973 ) Operating lease liabilities (326 ) Purchase price $ 439,899 Our valuation methodology and significant inputs for fair value measurements are detailed by asset class below. The fair value measurements for property, plant and equipment and intangible assets are based on significant inputs that are not observable in the market and therefore represent Level 3 measurements. Goodwill The goodwill resulting from the acquisition is attributable to the expansion of our services in various regions in which we currently operate and was allocated to our contract operations segment. The goodwill is considered to have an indefinite life and will be reviewed annually for impairment or more frequently if indicators of potential impairment exist. All of the goodwill recorded for this acquisition is expected to be deductible for U.S. federal income tax purposes. Property, Plant and Equipment The property, plant and equipment is primarily comprised of compression equipment that will be depreciated on a straight-line basis over an estimated average remaining useful life of 15 years . The fair value of the property, plant and equipment was determined using the cost approach, whereby we estimated the replacement cost of the assets by evaluating recent purchases of similar assets or published data, and then adjusted replacement cost for physical deterioration and functional and economic obsolescence, as applicable. Intangible Assets The intangible assets consist of customer relationships that have an estimated useful life of 15 years . The amount of intangible assets and their associated useful life were determined based on the period over which the assets are expected to contribute directly or indirectly to our future cash flows. The fair value of the identifiable intangible assets was determined using the multi-period excess earnings method, which is a specific application of the discounted cash flow method, an income approach, whereby we estimated and then discounted the future cash flows of the intangible asset by adjusting overall business revenue for attrition, obsolescence, cost of sales, operating expenses, taxes and the required returns attributable to other contributory assets acquired. Significant estimates made in arriving at expected future cash flows included our expected customer attrition rate and the amount of earnings attributable to the assets. To discount the estimated future cash flows, we utilized a discount rate that was at a premium to our weighted average cost of capital to reflect the less liquid nature of the customer relationships relative to the tangible assets acquired. Elite Compression Revenue and Earnings The results of operations attributable to the assets and liabilities acquired in the Elite Acquisition have been included in our consolidated financial statements as part of our contract operations segment since the date of acquisition. Revenue attributable to the assets acquired from the date of acquisition, August 1, 2019, through December 31, 2019 was $33.2 million . We are unable to provide earnings attributable to the assets and liabilities acquired since the date of acquisition as we do not prepare full stand-alone earnings reports for those assets and liabilities. Unaudited Pro Forma Financial Information Unaudited pro forma financial information for the years ended December 31, 2019 and 2018 was derived by adjusting our historical financial statements in order to give effect to the assets and liabilities acquired in the Elite Acquisition. The Elite Acquisition is presented in this unaudited pro forma financial information as though the acquisition occurred as of January 1, 2018, and reflects the following: • the acquisition of substantially all of Elite Compression’s assets, including a compression fleet of approximately 430,000 horsepower, vehicles, real property and inventory, and certain liabilities; • borrowings of $214.0 million under the Credit Facility for cash consideration exchanged in the acquisition; and • the exclusion of $7.8 million of financial advisory, legal and other professional fees incurred related to the acquisition and recorded to transaction-related costs in our consolidated statements of operations during the year ended December 31, 2019 . The unaudited pro forma financial information below is presented (in thousands) for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the transaction been consummated at the beginning of the period presented, nor is it necessarily indicative of future results. Year Ended December 31, 2019 2018 Revenue $ 1,009,763 $ 977,929 Net income attributable to Archrock stockholders 106,521 24,566 Harvest Sale On August 1, 2019, we completed an asset sale in which Harvest acquired from us approximately 80,000 active and idle compression horsepower, vehicles and parts inventory for cash consideration of $30.0 million . We recorded a $6.6 million gain on this sale to gain on sale of assets, net in our consolidated statements of operations during the year ended December 31, 2019 . The assets were previously reported under our contract operations segment. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 5. Discontinued Operations Spin-off of Exterran Corporation In 2015 we completed the Spin-off. In order to effect the Spin-off and govern our relationship with Exterran Corporation after the Spin-off, we entered into several agreements with Exterran Corporation, which include, but are not limited to, the separation and distribution agreement, the tax matters agreement and the supply agreement. Certain terms of these agreements follow: • The separation and distribution agreement specifies our right to promptly receive payments from Exterran Corporation based on a notional amount corresponding to payments received by Exterran Corporation from PDVSA Gas, S.A., a subsidiary of Petroleos de Venezuela, S.A., in respect of the sale of Exterran Corporation’s and joint ventures’ previously nationalized assets after such amounts are collected by Exterran Corporation. During the years ended December 31, 2018 and 2017 , we received $18.7 million and $19.7 million , respectively, from Exterran Corporation pursuant to this term of the separation and distribution agreement. The separation and distribution agreement also specifies our right to receive a $25.0 million cash payment from Exterran Corporation promptly following the occurrence of a qualified capital raise as defined in the Exterran Corporation credit agreement. Such a qualified capital raise occurred in April 2017 and we received a cash payment of $25.0 million later that month. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Exterran Corporation’s business with Exterran Corporation. Pursuant to the separation and distribution agreement, we and Exterran Corporation generally release the other party from all claims arising prior to the Spin-off that relate to the other party’s business. • The tax matters agreement governs the respective rights, responsibilities and obligations of Exterran Corporation and us with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes. Subject to the provisions of this agreement Exterran Corporation and we agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin-off (including any ongoing or future amendments and audits for these returns) for the portion of the tax liability (including interest and penalties) that relates to their respective operations reported in the filing. As of December 31, 2019 , we classified $8.5 million of unrecognized tax benefits (including interest and penalties) as noncurrent liabilities associated with discontinued operations since it relates to operations of Exterran Corporation prior to the Spin-off. We have also recorded an offsetting $8.5 million indemnification asset related to this reserve as noncurrent assets associated with discontinued operations. • The supply agreement, which expired November 2017, set forth the terms under which Exterran Corporation provided manufactured equipment, including the design, engineering, manufacturing and sale of natural gas compression equipment, on an exclusive basis to us and the Partnership, subject to certain exceptions. During the year ended December 31, 2017 , we purchased $150.2 million of newly-manufactured compression equipment from Exterran Corporation. The following table summarizes the balance sheet for discontinued operations (in thousands): December 31, 2019 2018 Other current assets $ — $ 300 Other assets 8,508 7,063 Deferred tax assets (1) 4,393 — Total assets associated with discontinued operations $ 12,901 $ 7,363 Other current liabilities $ — $ 297 Deferred tax liabilities 8,508 7,063 Total liabilities associated with discontinued operations $ 8,508 $ 7,360 —————— (1) As of December 31, 2018 , the $5.6 million net deferred tax asset was fully offset by a valuation allowance. As of December 31, 2019 , the $5.6 million valuation allowance was released and the net deferred tax asset decreased by $1.2 million due to current period tax amortization. See Note 20 (“Income Taxes”) for further details. The following table summarizes the statements of operations for discontinued operations (in thousands): Year Ended December 31, 2019 2018 2017 Other (income) loss, net $ (1,473 ) $ (654 ) $ 154 Provision for (benefit from) income taxes 1,746 654 (100 ) Loss from discontinued operations, net of tax $ (273 ) $ — $ (54 ) |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | 6. Inventory Inventory consisted of the following (in thousands): December 31, 2019 2018 Parts and supplies $ 66,121 $ 65,645 Work in progress 8,346 10,688 Inventory $ 74,467 $ 76,333 During the years ended December 31, 2019 , 2018 and 2017 we recorded write-downs to inventory of $0.9 million , $1.6 million and $2.4 million |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | 7. Property, Plant and Equipment, net Property, plant and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Compression equipment, facilities and other fleet assets $ 3,653,930 $ 3,323,465 Land and buildings 50,743 47,067 Transportation and shop equipment 116,057 103,766 Computer hardware and software 93,695 92,174 Other 15,308 11,880 Property, plant and equipment 3,929,733 3,578,352 Accumulated depreciation (1,370,335 ) (1,407,314 ) Property, plant and equipment, net $ 2,559,398 $ 2,171,038 Depreciation expense was $172.8 million , $158.4 million and $170.8 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. Assets under construction of $51.0 million and $55.4 million at December 31, 2019 and 2018 , respectively, were primarily included in compression equipment. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases We have operating leases and subleases for office space, temporary housing, storage and shops. Our leases have remaining lease terms of less than 1 year to 11 years and most include options to extend the lease term, at our discretion, for an additional three to five years . We are not, however, reasonably certain that we will exercise any of the options to extend and as such, they have not been included in the remaining lease terms. Balance sheet information related to our operating leases was as follows (in thousands): Classification December 31, 2019 ROU assets Operating lease ROU assets $ 17,901 Lease liabilities Current Accrued liabilities $ 3,037 Noncurrent Operating lease liabilities 16,094 Total lease liabilities $ 19,131 The components of lease cost were as follows (in thousands): Year Ended Operating lease cost $ 3,966 Short-term lease cost 348 Variable lease cost 1,607 Total lease cost $ 5,921 Cash flow and noncash information related to our operating leases were as follows (in thousands): Year Ended Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 5,420 Operating lease ROU assets obtained in exchange for new lease liabilities 2,247 Other supplemental information related to our operating leases was as follows: December 31, 2019 Weighted average remaining lease term (in years) 8.2 Weighted average discount rate 5.3 % Remaining maturities of lease liabilities governed under ASC 842 Leases as of December 31, 2019 were as follows (in thousands): 2020 $ 3,651 2021 3,715 2022 2,615 2023 2,310 2024 1,919 Thereafter 9,611 Total lease payments 23,821 Less: Interest (4,690 ) Total lease liabilities under ASC 842 Leases $ 19,131 Maturities of lease liabilities governed under ASC 840 Leases as of December 31, 2018 were as follows (in thousands): 2019 $ 4,317 2020 3,980 2021 3,562 2022 2,433 2023 2,170 Thereafter 11,935 Total lease liabilities under ASC 840 Leases $ 28,397 |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | 9. Intangible Assets, net Intangible assets include customer relationships and contracts associated with various business and asset acquisitions. These acquired intangible assets were recorded at fair value determined as of the acquisition date and are being amortized over the period we expect to benefit from the assets. Intangible assets, net consisted of the following (in thousands): December 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer-related (10-25 year life) $ 147,244 $ (76,176 ) $ 107,008 $ (69,678 ) Contract-based (5-7 year life) 37,773 (31,370 ) 64,556 (49,516 ) Intangible assets $ 185,017 $ (107,546 ) $ 171,564 $ (119,194 ) Amortization expense of these intangible assets totaled $15.3 million , $16.5 million and $17.8 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. Estimated future intangible assets amortization expense is as follows (in thousands): 2020 $ 15,675 2021 11,416 2022 9,078 2023 7,225 2024 6,136 Thereafter 27,941 Total $ 77,471 |
Contract Costs (Notes)
Contract Costs (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Contract Costs | 10. Contract Costs We capitalize incremental costs to obtain a contract with a customer if we expect to recover those costs. Capitalized costs include commissions paid to our sales force to obtain contract operations contracts. We expense commissions paid for sales of service contracts and OTC parts and components within our aftermarket services segment, as the amortization period is less than one year. We had contract costs of $4.8 million and $4.2 million associated with sales commissions recorded in our consolidated balance sheets at December 31, 2019 and 2018 , respectively. We capitalize costs incurred to fulfill a contract if those costs relate directly to a contract, enhance resources that we will use in satisfying performance obligations and if we expect to recover those costs. Capitalized costs incurred to fulfill our customer contracts include freight charges to transport compression assets before transferring services to the customer and mobilization activities associated with our contract operations services. We had contract costs of $38.1 million and $34.8 million associated with freight and mobilization recorded in our consolidated balance sheets at December 31, 2019 and 2018 , respectively. Contract operations costs are amortized based on the transfer of service to which the assets relate, which is estimated to be 38 months based on average contract term, including anticipated renewals. We assess periodically whether the 38 -month estimate fairly represents the average contract term and adjust as appropriate. Aftermarket services fulfillment costs are recognized based on the percentage-of-completion method applicable to the customer contract. Contract costs associated with commissions are amortized to SG&A. Contract costs associated with freight and mobilization are amortized to cost of sales (excluding depreciation and amortization). During the years ended December 31, 2019 and 2018 , we amortized $2.6 million and $1.5 million , respectively, related to sales commissions and $20.7 million and $13.4 million , respectively, related to freight and mobilization. No impairment losses were recorded related to our capitalized contract costs during the years ended December 31, 2019 and 2018 . 16. Revenue from Contracts with Customers Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we are entitled to receive in exchange for those goods or services. Sales and usage-based taxes that are collected from the customer are excluded from revenue. The following table presents our revenue from contracts with customers disaggregated by revenue source (in thousands): Year Ended December 31, 2019 2018 Contract operations (1) : 0 - 1,000 horsepower per unit $ 259,985 $ 241,810 1,001 - 1,500 horsepower per unit 316,082 276,775 Over 1,500 horsepower per unit 191,510 149,783 Other (2) 3,962 4,168 Total contract operations (3) 771,539 672,536 Aftermarket services (1) : Services (4) 122,076 142,476 OTC parts and components sales 71,870 89,429 Total aftermarket services (5) 193,946 231,905 Total revenue $ 965,485 $ 904,441 —————— (1) We operate in two segments: contract operations and aftermarket services. See Note 28 (“Segments”) for further details regarding our segments. (2) Primarily relates to fees associated with owned non-compression equipment. (3) Includes $7.9 million and $6.6 million for the years ended December 31, 2019 and 2018 , respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time. (4) Includes a reversal of $0.9 million of revenue during the year ended December 31, 2019 related to changes in estimates of performance obligations partially satisfied in prior periods. (5) All service revenue within aftermarket services is recognized over time. All OTC parts and components sales revenue is recognized at a point in time. Contract Operations We provide comprehensive contract operations services, including the personnel, equipment, tools, materials and supplies to meet our customers’ natural gas compression needs. Natural gas compression services are generally satisfied over time, as the customer simultaneously receives and consumes the benefits provided by these services. Our performance obligation is a series in which the unit of service is one month, as the customer receives substantially the same benefit each month from the services regardless of the type of service activity performed, which may vary. If the transaction price is based on a fixed fee, revenue is recognized monthly on a straight-line basis over the period that we are providing services to the customer. Amounts invoiced to customers for costs associated with moving our compression assets to a customer site are also included in the transaction price and are amortized over the initial contract term. We do not consider the effects of the time value of money, as the expected time between the transfer of services and payment for such services is less than one year. Variable consideration exists if customers are billed at a lesser standby rate when a unit is not running. We recognize revenue for such variable consideration monthly, as the invoice corresponds directly to the value transferred to the customer based on our performance completed to date. The rate for standby service is lower to reflect the decrease in costs and effort required to provide standby service when a unit is not running. We also perform billable maintenance service on our natural gas compression equipment at the customer’s request on an as-needed basis. The performance obligation is satisfied and revenue is recognized at the agreed-upon transaction price at the point in time when service is complete and the customer has accepted the work performed and can obtain the remaining benefits of the service that the unit will provide. As of December 31, 2019 , we had $469.6 million of remaining performance obligations related to our contract operations segment. The remaining performance obligations will be recognized through 2024 as follows (in thousands): 2020 2021 2022 2023 2024 Total Remaining performance obligations $ 288,204 $ 131,816 $ 43,808 $ 4,941 $ 813 $ 469,582 Aftermarket Services We sell OTC parts and components and provide operations, maintenance, overhaul and reconfiguration services to customers who own compression equipment. For sales of OTC parts and components, the performance obligation is generally satisfied at the point in time when delivery takes place and the customer obtains control of the part or component. The transaction price is the fixed sales price for the part stated in the contract. Revenue is recognized upon delivery, as we have a present right to payment and the customer has legal title. For our service activities, the performance obligation is satisfied over time, as the work performed enhances the customer-controlled asset and another entity would not have to substantially re-perform the work we completed if they were to fulfill the remaining performance obligation. The transaction price may be a fixed monthly service fee, a fixed quoted fee or entirely variable, calculated on a time and materials basis. For service provided based on a fixed monthly fee, the performance obligation is a series in which the unit of service is one month. The customer receives substantially the same benefit each month from the service, regardless of the type of service activity performed, which may vary. As the progress towards satisfaction of the performance obligation is measured based on the passage of time, revenue is recognized monthly based on the fixed fee provided for in the contract. For service provided based on a quoted fixed fee, progress towards satisfaction of the performance obligation is measured using an input method based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue each reporting period is determined by multiplying the transaction price by the ratio of actual costs incurred to date to total estimated costs expected for the service. Significant judgment is involved in the estimation of the progress to completion. Any adjustments to the measure of the progress to completion will be accounted for on a prospective basis. Changes to the scope of service is recognized as an adjustment to the transaction price in the period in which the change occurs. Service provided based on time and materials are generally short-term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. We have elected to use the right-to-invoice practical expedient using an estimated gross margin percentage applied to actual costs incurred. The estimated gross margin percentage is fixed based on historical time and materials-based service. We evaluate the estimated gross margin percentage at the end of each reporting period and adjust the transaction price as appropriate. We believe these fee-based and cost-based inputs fairly depict our efforts to provide aftermarket services and the amount of revenue recognized is representative of the transfer of service and value that the customer will have received as of the reporting date. As of December 31, 2019 we do not disclose the aggregate transaction price for the remaining performance obligations for aftermarket services, as there are no contracts with customers with an original contract term that is greater than one year. Contract Assets and Liabilities Contract operations services are generally billed monthly at the beginning of the month in which service is being provided. For aftermarket services, billings will typically occur when parts are delivered or when service is complete; however, milestone billings may be used in longer-term projects. We recognize a contract asset when we have the right to consideration in exchange for goods or services transferred to a customer when the right is conditioned on something other than the passage of time. We recognize a contract liability when we have an obligation to transfer goods or services to a customer for which we have already received consideration. As of December 31, 2019 and 2018 , our receivables from contracts with customers, net of allowance for doubtful accounts, were $139.4 million and $142.1 million , respectively. Freight billings to customers for the transport of compression assets, customer-specified modifications of compression assets and milestone billings on aftermarket services often result in a contract liability. As of December 31, 2019 and 2018 , our contract liabilities were $11.4 million and $17.1 million , respectively, which were included in deferred revenue and other liabilities in our consolidated balance sheets. The decrease in the contract liability balance during the year ended December 31, 2019 was due to the deferral of $36.6 million , partially offset by $42.3 million recognized as revenue during the period, each primarily related to freight billings and aftermarket services. |
Hosting Arrangements
Hosting Arrangements | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Hosting Arrangements | 11. Hosting Arrangements In the fourth quarter of 2018 we began a process and technology transformation project that will, among other things, upgrade or replace our existing ERP, supply chain and inventory management systems and expand the remote monitoring capabilities of our compression fleet. Included in this project are hosting arrangements that are service contracts related to the cloud migration of our ERP system and cloud services for our new mobile workforce, telematics and inventory management tools. Certain costs incurred for the implementation of our hosting arrangements that are service contracts are being capitalized and will be amortized on a straight-line basis over the term of the respective contract. As of December 31, 2019 and 2018 , we had $5.5 million and $0.4 million |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 12. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued salaries and other benefits $ 19,300 $ 24,252 Accrued income and other taxes 11,019 11,820 Accrued interest 16,462 11,999 Derivative liability - current 593 — Other accrued liabilities 20,471 30,926 Accrued liabilities $ 67,845 $ 78,997 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 13. Long-Term Debt Long-term debt consisted of the following (in thousands): December 31, 2019 2018 Credit Facility $ 513,000 $ 839,500 2028 Notes 500,000 — Less: Deferred financing costs, net of amortization (8,090 ) — 491,910 — 2027 Notes 500,000 — Less: Deferred financing costs, net of amortization (7,999 ) — 492,001 — 2022 Notes 350,000 350,000 Less: Debt discount, net of amortization (2,046 ) (2,766 ) Less: Deferred financing costs, net of amortization (2,316 ) (3,133 ) 345,638 344,101 2021 Notes — 350,000 Less: Debt discount, net of amortization — (1,789 ) Less: Deferred financing costs, net of amortization — (2,311 ) — 345,900 Long-term debt $ 1,842,549 $ 1,529,501 Credit Facility The Credit Facility is a $1.25 billion asset-based revolving credit facility that will mature on November 8, 2024 , except that if any portion of the 2022 Notes are outstanding as of June 3, 2022 , it will instead mature on June 3, 2022 . As of December 31, 2019 , there were $13.7 million outstanding letters of credit under the Credit Facility and the applicable margin on borrowings outstanding was 2.5% . The weighted average annual interest rate on the outstanding balance under the Credit Facility, excluding the effect of interest rate swaps, was 4.3% and 5.4% at December 31, 2019 and 2018 , respectively. As a result of the facility’s ratio requirements (see below), $669.7 million of the $723.3 million of undrawn capacity was available for additional borrowings as of December 31, 2019 . Amendment No. 2 On November 8, 2019, we amended the Credit Facility to, among other things: • extend the maturity date of the Credit Facility from March 30, 2022 to November 8, 2024 (or June 3, 2022 , if any portion of the 2022 Notes remains outstanding at such date), effective as of the execution of Amendment No. 2; and • change the applicable margin for borrowings under the Credit Facility to those discussed in “Other Facility Terms” below. We incurred $6.4 million in transaction costs related to Amendment No. 2, which were included in other assets in our consolidated balance sheet and are being amortized over the term of the Credit Facility. Amendment No. 1 In February 2018, we amended the Credit Facility to, among other things: • increase the maximum Total Debt to EBITDA ratios, as defined in the Credit Facility agreement (see below for the revised ratios), effective as of the execution of Amendment No. 1 in February 2018; and • effective upon completion of the Merger in April 2018: – increase the aggregate revolving commitment from $1.1 billion to $1.25 billion ; – increase the amount available for the issuance of letters of credit from $25.0 million to $50.0 million ; – increase the basket sizes under certain covenants including covenants limiting our ability to make investments, incur debt, make restricted payments, incur liens and make asset dispositions; – name Archrock Services, L.P., one of our subsidiaries, as a borrower under the Credit Facility and certain of our other subsidiaries as loan guarantors; and – amend the definition of “Borrowing Base” to include certain assets of ours and our subsidiaries. We incurred $3.3 million in transaction costs related to Amendment No. 1, which were included in other assets in our consolidated balance sheet and are being amortized over the term of the Credit Facility. Other Facility Terms Subject to certain conditions, including the approval by the lenders, we are able to increase the aggregate commitments under the Credit Facility by up to an additional $250.0 million . Portions of the Credit Facility up to $50.0 million will be available for the issuance of swing line loans. The Credit Facility bears interest at a base rate or LIBOR, at our option, plus an applicable margin. Depending on our leverage ratio, the applicable margin varies (i) in the case of LIBOR loans, from 2.00% to 2.75% and (ii) in the case of base rate loans, from 1.00% to 1.75% . The base rate is the highest of (i) the prime rate announced by JPMorgan Chase Bank, (ii) the Federal Funds Effective Rate plus 0.50% and (iii) one-month LIBOR plus 1.00% . Additionally, we are required to pay commitment fees based on the daily unused amount of the Credit Facility at a rate of 0.375% . We incurred $1.9 million , $2.1 million and $2.1 million in commitment fees on the daily unused amount of our facilities during the years ended December 31, 2019 , 2018 and 2017 , respectively. The Credit Facility borrowing base consists of eligible accounts receivable, inventory and compressors, the largest of which is compressors. Borrowings under the Credit Facility are secured by substantially all of our personal property assets and our Significant Domestic Subsidiaries (as defined in the Credit Facility agreement), including all of the membership interests of our Domestic Subsidiaries (as defined in the Credit Facility agreement). The Credit Facility agreement contains various covenants including, but not limited to, restrictions on the use of proceeds from borrowings and limitations on our ability to incur additional indebtedness, engage in transactions with affiliates, merge or consolidate, sell assets, make certain investments and acquisitions, make loans, grant liens, repurchase equity and pay distributions. The Credit Facility agreement also contains various covenants requiring mandatory prepayments from the net cash proceeds of certain asset transfers. In addition, if as of any date we have cash and cash equivalents (other than proceeds from a debt or equity issuance received in the 30 days prior to such date reasonably expected to be used to fund an acquisition permitted under the Credit Facility agreement) in excess of $50.0 million , then such excess amount will be used to pay down outstanding borrowings of a corresponding amount under the Credit Facility. We must maintain the following consolidated financial ratios, as defined in the Credit Facility agreement: EBITDA to Interest Expense 2.5 to 1.0 Senior Secured Debt to EBITDA 3.5 to 1.0 Total Debt to EBITDA Through fiscal year 2019 5.75 to 1.0 Through second quarter of 2020 5.50 to 1.0 Thereafter (1) 5.25 to 1.0 —————— (1) Subject to a temporary increase to 5.5 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter. A material adverse effect on our assets, liabilities, financial condition, business or operations that, taken as a whole, impacts our ability to perform our obligations under the Credit Facility agreement, could lead to a default under that agreement. A default under one of our debt agreements would trigger cross-default provisions under our other debt agreements, which would accelerate our obligation to repay our indebtedness under those agreements. As of December 31, 2019 , we were in compliance with all covenants under the Credit Facility agreement. Formation of the Credit Facility In March 2017, we incurred $14.9 million in transaction costs related to the formation of the Credit Facility, which were included in other assets in our consolidated balance sheets and are being amortized over the term of the Credit Facility. Concurrent with entering into the Credit Facility, we terminated our Former Credit Facility, and all commitments under the facility, and repaid $648.4 million in borrowings and accrued and unpaid interest and fees outstanding. As a result of the termination, we expensed $0.6 million of unamortized deferred financing costs, which were included in interest expense in our consolidated statements of operations, and recorded a debt extinguishment loss of $0.3 million . Archrock Credit Facility In April 2018, in connection with the Merger, the Archrock Credit Facility was terminated. Upon termination, we repaid $63.2 million in borrowings and accrued and unpaid interest and fees outstanding. All commitments under the Archrock Credit Facility were terminated and the $15.4 million of letters of credit outstanding under the Archrock Credit Facility were converted to letters of credit under the Credit Facility. As a result of the termination, we recorded a debt extinguishment loss of $2.5 million . We incurred commitment fees on the daily unused amount of the Archrock Credit Facility of $0.2 million in 2018 prior to the facility’s termination and $0.7 million during the year ended December 31, 2017. We were in compliance with all covenants under the Archrock Credit Facility through its closing. 2028 Notes and 2027 Notes On December 20, 2019, we completed a private offering of $500.0 million aggregate principal amount of 6.25% senior notes due April 2028 and received net proceeds of $491.8 million after deducting issuance costs. The net proceeds were used to repay borrowings outstanding under our Credit Facility. On March 21, 2019, we completed a private offering of $500.0 million aggregate principal amount of 6.875% senior notes due April 2027 and received net proceeds of $491.2 million after deducting issuance costs. The net proceeds were used to repay borrowings outstanding under our Credit Facility. Issuance costs of $8.2 million and $8.8 million related to the 2028 Notes and 2027 Notes, respectively, were recorded as deferred financing costs within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statements of operations over the terms of the notes. The 2027 Notes and 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us and all of our existing subsidiaries, other than Archrock Partners, L.P. and APLP Finance Corp., which are co-issuers of both offerings, and certain of our future subsidiaries. The 2027 Notes and 2028 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior indebtedness. The 2027 Notes and 2028 Notes may be redeemed at any time, in whole or in part, at specified redemption prices and make-whole premiums, plus any accrued and unpaid interest. 2022 Notes In April 2014, we issued $350.0 million aggregate principal amount of 6% senior notes due October 2022. These notes were issued at an original issuance discount of $5.7 million , which is being amortized at an effective interest rate of 6.25% over their term. In February 2015, holders of these notes exchanged their notes for registered notes with the same terms. We may redeem all or a portion of these notes at redemption prices (expressed as percentages of principal amount) equal to 101.5% for the 12-month period beginning on April 1, 2019 and 100.0% for the 12-month period beginning on April 1, 2020 and at any time thereafter, plus accrued and unpaid interest, if any, to the applicable redemption date. The 2022 Notes are guaranteed on a senior unsecured basis by all of the Partnership’s existing subsidiaries (other than Archrock Partners Finance Corp., which is a co-issuer of the 2022 Notes) and certain of the Partnership’s future subsidiaries. The 2022 Notes and the guarantees, respectively, are the Partnership’s and the guarantors’ general unsecured senior obligations, rank equally in right of payment with all of the Partnership’s and the guarantors’ other senior obligations and are effectively subordinated to all of the Partnership’s and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such indebtedness. In addition, the 2022 Notes and guarantees are effectively subordinated to all existing and future indebtedness and other liabilities of any future non-guarantor subsidiaries. Guarantees by the Partnership’s subsidiaries are full and unconditional, subject to customary release provisions, and constitute joint and several obligations. The Partnership has no assets or operations independent of its subsidiaries and there are no significant restrictions upon its subsidiaries’ ability to distribute funds to the Partnership. 2021 Notes On April 5, 2019, the 2021 Notes were redeemed at 100% of their $350.0 million aggregate principal amount plus accrued and unpaid interest of $0.2 million with borrowings from the Credit Facility. We recorded a debt extinguishment loss of $3.7 million related to the redemption during the year ended December 31, 2019. Long-Term Debt Maturity Contractual maturities of long-term debt over the next five years, excluding interest to be accrued, at December 31, 2019 were as follows (in thousands): 2020 $ — 2021 — 2022 (1) 350,000 2023 — 2024 513,000 Long-term debt maturities through 2024 (1) $ 863,000 —————— (1) Includes the full face value of the 2022 Notes and has not been reduced by the aggregate unamortized discount of $2.0 million and the aggregate unamortized deferred financing costs of $2.3 million as of December 31, 2019 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 14. Accumulated Other Comprehensive Income (Loss) Components of comprehensive income (loss) are net income (loss) and all changes in equity during a period except those resulting from transactions with owners. Our accumulated other comprehensive income (loss) consists of changes in the fair value of our interest rate swap derivative instruments, net of tax, which are designated as cash flow hedges, amortization of terminated interest rate swaps and adjustments related to changes in our ownership of the Partnership. The following table presents the changes in accumulated other comprehensive income (loss) of our derivative cash flow hedges, net of tax and excluding noncontrolling interest, during the years ended December 31, 2019 , 2018 and 2017 (in thousands): Year Ended December 31, 2019 2018 2017 Beginning accumulated other comprehensive income (loss) $ 5,773 $ 1,197 $ (1,678 ) Gain (loss) recognized in other comprehensive income (loss), net of tax provision (benefit) of $(1,425), $169 and $793, respectively (5,360 ) (659 ) 1,910 (Gain) loss reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax provision (benefit) of $478, $185 and $(520), respectively (1) (1,800 ) (435 ) 965 Merger-related adjustments (2) — 5,670 — Other comprehensive income (loss) attributable to Archrock stockholders (7,160 ) 4,576 2,875 Ending accumulated other comprehensive income (loss) $ (1,387 ) $ 5,773 $ 1,197 —————— (1) Included stranded tax effects resulting from the TCJA of $0.3 million reclassified to accumulated deficit during the year ended December 31, 2018. (2) Pursuant to the Merger, we reclassified a gain of $5.7 million from noncontrolling interest to accumulated other comprehensive income (loss) related to the fair value of our derivative instruments that was previously attributed to public ownership of the Partnership. See Note 22 (“Derivatives”) for further details on our interest rate swap derivative instruments. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | 15. Equity Elite Acquisition On August 1, 2019, we completed the Elite Acquisition. A portion of the acquisition’s purchase price was funded through the issuance of 21.7 million shares of common stock with an acquisition date fair value of $225.9 million , which was recorded to common stock and additional paid-in capital in our consolidated statements of equity. See Note 4 (“Business Transactions”) for further details of this acquisition. Merger Transaction In April 2018, we completed the Merger and issued 57.6 million shares of our common stock to acquire the 41.2 million common units of the Partnership not owned by us prior to the Merger at a fixed exchange ratio of 1.40 shares of our common stock for each Partnership common unit for total implied consideration of $625.3 million . Additionally, the incentive distribution rights in the Partnership, all of which we owned prior to the Merger, were canceled and ceased to exist. As a result of the Merger, the Partnership’s common units are no longer publicly traded. As we controlled the Partnership prior to the Merger and continue to control the Partnership after the Merger, we accounted for the change in our ownership interest in the Partnership as an equity transaction in the second quarter of 2018. No gain or loss was recognized in our consolidated statements of operations as a result of the Merger. Prior to the Merger, public unitholders held a 57% ownership interest in the Partnership and we owned the remaining 43% equity interest. The equity interests in the Partnership that were owned by the public prior to the Merger are reflected in noncontrolling interest in our consolidated statements of equity. The earnings of the Partnership that were attributed to its common units held by the public prior to the Merger are reflected in net income (loss) attributable to the noncontrolling interest in our consolidated statements of operations. The tax effects of the Merger were reported as adjustments to other assets, noncurrent assets associated with discontinued operations, deferred tax liabilities, additional paid-in capital and other comprehensive income. The change in ownership and tax step up from the consideration given in the Merger caused us to record a $156.0 million deferred tax asset, which resulted in an overall $52.2 million net deferred tax asset. We evaluated the realizability of our resulting net deferred tax asset position by assessing the available positive and negative evidence and concluded, based on the weight of the evidence, that a $50.8 million valuation allowance was required. The $105.2 million net tax impact of the change in deferred tax assets and the valuation allowance was recorded as an offsetting increase to additional paid-in capital. We incurred $0.5 million , $10.2 million and $0.3 million of transaction costs directly attributable to the Merger during the years ended December 31, 2019 , 2018 and 2017 respectively, including financial advisory, legal service and other professional fees, which were recorded to transaction-related costs on our consolidated statements of operations. Other Transactions Related to the Partnership In August 2017, the Partnership sold, pursuant to a public underwritten offering, 4.6 million common units, including 0.6 million common units pursuant to an over-allotment option. The Partnership received net proceeds of $60.3 million after deducting underwriting discounts, commissions and offering expenses, which it used to repay borrowings outstanding under the Credit Facility. In connection with this sale and as permitted under its partnership agreement, the Partnership sold 93,163 general partner units to its General Partner for a contribution of $1.3 million to maintain the General Partner’s approximate 2% general partner interest in the Partnership. As a result of this transaction, adjustments were made to noncontrolling interest, accumulated other comprehensive income (loss), deferred tax liabilities and additional paid-in capital to reflect our new ownership percentage in the Partnership. The following table presents the effects of changes in our ownership interest in the Partnership on the equity attributable to Archrock stockholders during the years ended December 31, 2018 and 2017 (in thousands): Year Ended December 31, 2018 2017 Net income attributable to Archrock stockholders $ 21,063 $ 18,953 Increase in Archrock stockholders’ additional paid-in capital for change in ownership of Partnership common units 56,845 17,638 Increase from net income attributable to Archrock stockholders and transfers from noncontrolling interest $ 77,908 $ 36,591 Cash Dividends The following table summarizes our dividends declared and paid in each of the quarterly periods of 2019 , 2018 and 2017 : Declared Dividends Dividends Paid 2017 Q1 $ 0.120 $ 8,458 Q2 0.120 8,534 Q3 0.120 8,536 Q4 0.120 8,536 2018 Q1 $ 0.120 $ 8,532 Q2 0.120 15,486 Q3 0.132 17,114 Q4 0.132 17,156 2019 Q1 $ 0.132 $ 17,231 Q2 0.132 17,206 Q3 0.145 22,062 Q4 0.145 22,031 On January 23, 2020 , our Board of Directors declared a quarterly dividend of $0.145 per share of common stock, or approximately $22.2 million , that was paid on February 14, 2020 to stockholders of record at the close of business on February 7, 2020 . |
Revenue From Contracts with Cus
Revenue From Contracts with Customers | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts with Customers | 10. Contract Costs We capitalize incremental costs to obtain a contract with a customer if we expect to recover those costs. Capitalized costs include commissions paid to our sales force to obtain contract operations contracts. We expense commissions paid for sales of service contracts and OTC parts and components within our aftermarket services segment, as the amortization period is less than one year. We had contract costs of $4.8 million and $4.2 million associated with sales commissions recorded in our consolidated balance sheets at December 31, 2019 and 2018 , respectively. We capitalize costs incurred to fulfill a contract if those costs relate directly to a contract, enhance resources that we will use in satisfying performance obligations and if we expect to recover those costs. Capitalized costs incurred to fulfill our customer contracts include freight charges to transport compression assets before transferring services to the customer and mobilization activities associated with our contract operations services. We had contract costs of $38.1 million and $34.8 million associated with freight and mobilization recorded in our consolidated balance sheets at December 31, 2019 and 2018 , respectively. Contract operations costs are amortized based on the transfer of service to which the assets relate, which is estimated to be 38 months based on average contract term, including anticipated renewals. We assess periodically whether the 38 -month estimate fairly represents the average contract term and adjust as appropriate. Aftermarket services fulfillment costs are recognized based on the percentage-of-completion method applicable to the customer contract. Contract costs associated with commissions are amortized to SG&A. Contract costs associated with freight and mobilization are amortized to cost of sales (excluding depreciation and amortization). During the years ended December 31, 2019 and 2018 , we amortized $2.6 million and $1.5 million , respectively, related to sales commissions and $20.7 million and $13.4 million , respectively, related to freight and mobilization. No impairment losses were recorded related to our capitalized contract costs during the years ended December 31, 2019 and 2018 . 16. Revenue from Contracts with Customers Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we are entitled to receive in exchange for those goods or services. Sales and usage-based taxes that are collected from the customer are excluded from revenue. The following table presents our revenue from contracts with customers disaggregated by revenue source (in thousands): Year Ended December 31, 2019 2018 Contract operations (1) : 0 - 1,000 horsepower per unit $ 259,985 $ 241,810 1,001 - 1,500 horsepower per unit 316,082 276,775 Over 1,500 horsepower per unit 191,510 149,783 Other (2) 3,962 4,168 Total contract operations (3) 771,539 672,536 Aftermarket services (1) : Services (4) 122,076 142,476 OTC parts and components sales 71,870 89,429 Total aftermarket services (5) 193,946 231,905 Total revenue $ 965,485 $ 904,441 —————— (1) We operate in two segments: contract operations and aftermarket services. See Note 28 (“Segments”) for further details regarding our segments. (2) Primarily relates to fees associated with owned non-compression equipment. (3) Includes $7.9 million and $6.6 million for the years ended December 31, 2019 and 2018 , respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time. (4) Includes a reversal of $0.9 million of revenue during the year ended December 31, 2019 related to changes in estimates of performance obligations partially satisfied in prior periods. (5) All service revenue within aftermarket services is recognized over time. All OTC parts and components sales revenue is recognized at a point in time. Contract Operations We provide comprehensive contract operations services, including the personnel, equipment, tools, materials and supplies to meet our customers’ natural gas compression needs. Natural gas compression services are generally satisfied over time, as the customer simultaneously receives and consumes the benefits provided by these services. Our performance obligation is a series in which the unit of service is one month, as the customer receives substantially the same benefit each month from the services regardless of the type of service activity performed, which may vary. If the transaction price is based on a fixed fee, revenue is recognized monthly on a straight-line basis over the period that we are providing services to the customer. Amounts invoiced to customers for costs associated with moving our compression assets to a customer site are also included in the transaction price and are amortized over the initial contract term. We do not consider the effects of the time value of money, as the expected time between the transfer of services and payment for such services is less than one year. Variable consideration exists if customers are billed at a lesser standby rate when a unit is not running. We recognize revenue for such variable consideration monthly, as the invoice corresponds directly to the value transferred to the customer based on our performance completed to date. The rate for standby service is lower to reflect the decrease in costs and effort required to provide standby service when a unit is not running. We also perform billable maintenance service on our natural gas compression equipment at the customer’s request on an as-needed basis. The performance obligation is satisfied and revenue is recognized at the agreed-upon transaction price at the point in time when service is complete and the customer has accepted the work performed and can obtain the remaining benefits of the service that the unit will provide. As of December 31, 2019 , we had $469.6 million of remaining performance obligations related to our contract operations segment. The remaining performance obligations will be recognized through 2024 as follows (in thousands): 2020 2021 2022 2023 2024 Total Remaining performance obligations $ 288,204 $ 131,816 $ 43,808 $ 4,941 $ 813 $ 469,582 Aftermarket Services We sell OTC parts and components and provide operations, maintenance, overhaul and reconfiguration services to customers who own compression equipment. For sales of OTC parts and components, the performance obligation is generally satisfied at the point in time when delivery takes place and the customer obtains control of the part or component. The transaction price is the fixed sales price for the part stated in the contract. Revenue is recognized upon delivery, as we have a present right to payment and the customer has legal title. For our service activities, the performance obligation is satisfied over time, as the work performed enhances the customer-controlled asset and another entity would not have to substantially re-perform the work we completed if they were to fulfill the remaining performance obligation. The transaction price may be a fixed monthly service fee, a fixed quoted fee or entirely variable, calculated on a time and materials basis. For service provided based on a fixed monthly fee, the performance obligation is a series in which the unit of service is one month. The customer receives substantially the same benefit each month from the service, regardless of the type of service activity performed, which may vary. As the progress towards satisfaction of the performance obligation is measured based on the passage of time, revenue is recognized monthly based on the fixed fee provided for in the contract. For service provided based on a quoted fixed fee, progress towards satisfaction of the performance obligation is measured using an input method based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue each reporting period is determined by multiplying the transaction price by the ratio of actual costs incurred to date to total estimated costs expected for the service. Significant judgment is involved in the estimation of the progress to completion. Any adjustments to the measure of the progress to completion will be accounted for on a prospective basis. Changes to the scope of service is recognized as an adjustment to the transaction price in the period in which the change occurs. Service provided based on time and materials are generally short-term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. We have elected to use the right-to-invoice practical expedient using an estimated gross margin percentage applied to actual costs incurred. The estimated gross margin percentage is fixed based on historical time and materials-based service. We evaluate the estimated gross margin percentage at the end of each reporting period and adjust the transaction price as appropriate. We believe these fee-based and cost-based inputs fairly depict our efforts to provide aftermarket services and the amount of revenue recognized is representative of the transfer of service and value that the customer will have received as of the reporting date. As of December 31, 2019 we do not disclose the aggregate transaction price for the remaining performance obligations for aftermarket services, as there are no contracts with customers with an original contract term that is greater than one year. Contract Assets and Liabilities Contract operations services are generally billed monthly at the beginning of the month in which service is being provided. For aftermarket services, billings will typically occur when parts are delivered or when service is complete; however, milestone billings may be used in longer-term projects. We recognize a contract asset when we have the right to consideration in exchange for goods or services transferred to a customer when the right is conditioned on something other than the passage of time. We recognize a contract liability when we have an obligation to transfer goods or services to a customer for which we have already received consideration. As of December 31, 2019 and 2018 , our receivables from contracts with customers, net of allowance for doubtful accounts, were $139.4 million and $142.1 million , respectively. Freight billings to customers for the transport of compression assets, customer-specified modifications of compression assets and milestone billings on aftermarket services often result in a contract liability. As of December 31, 2019 and 2018 , our contract liabilities were $11.4 million and $17.1 million , respectively, which were included in deferred revenue and other liabilities in our consolidated balance sheets. The decrease in the contract liability balance during the year ended December 31, 2019 was due to the deferral of $36.6 million , partially offset by $42.3 million recognized as revenue during the period, each primarily related to freight billings and aftermarket services. |
Long-Lived Asset Impairment
Long-Lived Asset Impairment | 12 Months Ended |
Dec. 31, 2019 | |
Asset Impairment Charges [Abstract] | |
Long-Lived Asset Impairment | 17. Long-Lived Asset Impairment We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. We periodically review the future deployment of our idle compression assets for units that are not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on these reviews, we determine that certain idle compressors should be retired from the active fleet. The retirement of these units from the active fleet triggers a review of these assets for impairment and as a result of our review, we may record an asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit is estimated based on the expected net sale proceeds compared to other fleet units we recently sold, a review of other units recently offered for sale by third parties or the estimated component value of the equipment we plan to use. In connection with our review of our idle compression assets, we evaluate for impairment idle units that were culled from our fleet in prior years and are available for sale. Based on that review, we may reduce the expected proceeds from disposition and record additional impairment to reduce the book value of each unit to its estimated fair value. The following table presents the results of our impairment review as recorded to our contract operations segment (dollars in thousands): Year Ended December 31, 2019 2018 2017 Idle compressors retired from the active fleet 975 310 325 Horsepower of idle compressors retired from the active fleet 170,000 115,000 100,000 Impairment recorded on idle compressors retired from the active fleet $ 44,663 $ 28,127 $ 26,287 In addition to the impairment discussed above, $2.9 million of property, plant and equipment was impaired during the year ended December 31, 2017 as the result of physical asset observations and other events that indicated the carrying values of the assets, which were comprised of approximately 7,000 horsepower of idle compressors, were not recoverable and $0.8 million of leasehold improvements and furniture and fixtures that were impaired in connection with the relocation of our corporate office. See Note 19 (“Corporate Office Relocation”) for further details. |
Restructuring and Other Charges
Restructuring and Other Charges | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | 18. Restructuring and Other Charges As discussed in Note 5 (“Discontinued Operations”) , we completed the Spin-off in 2015. During the year ended December 31, 2017 , we incurred $1.4 million of costs for retention benefits associated with the Spin-off that were directly attributable to Archrock. The restructuring charges associated with the Spin-off are not directly attributable to our reportable segments because they primarily represent costs incurred within the corporate function. No such costs were incurred subsequent to December 31, 2017 . The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the year ended December 31, 2017 (in thousands): Balance at January 1, 2017 $ 712 Additions for costs expensed 1,386 Less: non-cash expense (1) (997 ) Reductions for payments (1,101 ) Balance at December 31, 2017 $ — —————— (1) Included non-cash retention benefits associated with the Spin-off to be settled in Archrock stock. |
Corporate Office Relocation
Corporate Office Relocation | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Corporate Office Relocation | 19. Corporate Office Relocation During the year ended December 31, 2017, we recorded $2.1 million in charges associated with the relocation of our corporate headquarters during the third quarter of 2017. These charges were reflected in SG&A and included accelerated expense associated with the contractual lease payments of our former corporate office, which were made through the end of the lease term in the first quarter of 2018, and relocation costs to move our corporate office. Additionally, leasehold improvements and furniture and fixtures were impaired in the third quarter of 2017 and are reflected in long-lived asset impairment in our consolidated statements of operations (see Note 17 (“Long-Lived Asset Impairment”) ). No costs were incurred as a result of the relocation subsequent to September 30, 2017. The following table summarizes the changes to our accrued liability balance related to our corporate office relocation (in thousands): Year Ended Beginning balance $ 583 Reductions for payments (583 ) Ending balance $ — The following table summarizes our corporate office relocation costs by category (in thousands): Year Ended Remaining lease costs $ 1,258 Impairment of leasehold improvements and furniture and fixtures 795 Relocation costs 60 Total corporate relocation costs $ 2,113 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 20. Income Taxes Current and Deferred Tax Provision The provision for (benefit from) income taxes consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current tax provision (benefit): U.S. federal $ 75 $ — $ (1,495 ) State 377 912 172 Total current $ 452 $ 912 $ (1,323 ) Deferred tax provision (benefit): U.S. federal $ (35,597 ) $ 6,197 $ (67,443 ) State (4,000 ) (959 ) 7,683 Total deferred $ (39,597 ) $ 5,238 $ (59,760 ) Provision for (benefit from) income taxes $ (39,145 ) $ 6,150 $ (61,083 ) The provision for (benefit from) income taxes for the years ended December 31, 2019 , 2018 and 2017 resulted in effective tax rates on continuing operations of (67.0)% , 17.4% and 143.3% , respectively. The following table reconciles these effective tax rates to the U.S. statutory rate of 21% , the rate in effect during 2019 and 2018 , and 35% , the rate in effect during 2017 (in thousands): Year Ended December 31, 2019 2018 2017 Income taxes at U.S. federal statutory rate $ 12,276 $ 7,415 $ (14,917 ) Net state income taxes (1) 1,172 1,570 (4,693 ) Tax credits (1,295 ) (244 ) — Tax Cuts and Jobs Act (2) — — (53,442 ) Noncontrolling interest — (1,793 ) (1,091 ) Unrecognized tax benefits (3)(4) (1,958 ) (1,443 ) 9,566 Valuation allowances and write off of tax attributes (5) (50,219 ) (58 ) 247 Indemnification revenue / expense 42 (44 ) 692 Executive compensation limitation 1,102 977 2,433 Stock 66 (455 ) (858 ) Other (331 ) 225 980 Provision for (benefit from) income taxes $ (39,145 ) $ 6,150 $ (61,083 ) —————— (1) Includes a deferred state release, net of federal benefit, of $3.7 million due to the remeasurement of our uncertain tax benefits in 2017 . (2) See “Tax Cuts and Jobs Act” below for further details. (3) Reflects a decrease in our uncertain tax benefit, net of federal benefit, due to settlements of tax audits and expiration of statute of limitations in 2019 and 2018 . (4) Reflects an increase in our uncertain tax benefit, net of federal benefit, due to appellate court decisions in 2017 which required us to remeasure certain of our uncertain tax positions. (5) See “Tax Attributes and Valuation Allowances” below for further details. Deferred income tax balances are the direct effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the taxes are actually paid or recovered. The tax effects of temporary differences that gave rise to deferred tax assets and deferred tax liabilities were as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 116,378 $ 82,259 Accrued liabilities 3,486 5,726 Other 12,479 9,407 132,343 97,392 Valuation allowances (1) (822 ) (45,439 ) Total deferred tax assets $ 131,521 $ 51,953 Deferred tax liabilities: Property, plant and equipment $ (6,440 ) $ (10,763 ) Basis difference in the Partnership (81,645 ) (35,604 ) Other (8,083 ) (4,172 ) Total deferred tax liabilities (96,168 ) (50,539 ) Net deferred tax asset (2) $ 35,353 $ 1,414 —————— (1) See “Tax Attributes and Valuation Allowances” below for further details. (2) The 2019 and 2018 net deferred tax asset are reflected in our consolidated balance sheets as deferred tax assets of $36.6 million and $4.3 million , respectively, and deferred tax liabilities of $1.3 million and $2.8 million , respectively. Both the 2019 and 2018 balances are based on a U.S. federal tax rate of 21%. Tax Attributes and Valuation Allowances Pursuant to Sections 382 and 383 of the Code, utilization of loss and credit carryforwards are subject to annual limitations due to any ownership changes of 5% owners. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The Hanover/Universal merger in 2007 resulted in such an ownership change but the Spin-off in 2015 did not result in such an ownership change for Archrock. In 2018, the common stock we issued in the Merger caused a new ownership change to occur for Archrock. The limitations from this ownership change may cause us to pay U.S. federal income taxes earlier; however, we do not currently expect that any loss carryforwards or credit carryforwards will expire as a result of any 382 or 383 limitations. Our ability to utilize loss carryforwards and credit carryforwards against future U.S. federal taxable income and future U.S. federal income tax may be limited in the future if we have another 50% or more ownership change in our 5% shareholders. We record valuation allowances when it is more likely than not that some portion or all of our deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character and in the appropriate taxing jurisdictions in the future. If we do not meet our expectations with respect to taxable income, we may not realize the full benefit from our deferred tax assets, which would require us to record a valuation allowance in our tax provision in future years. As of each reporting date, we consider new evidence to evaluate the realizability of our net deferred tax asset position by assessing the available positive and negative evidence. Changes to the valuation allowance are reflected in the statement of operations. In 2018, the change in ownership and tax step up from the consideration given in the Merger caused us to record a $156.0 million deferred tax asset, which resulted in an overall $52.2 million net deferred tax asset, of which $46.6 million and $5.6 million related to continuing operations and discontinued operations, respectively. As of December 31, 2018, we had incurred a three-year cumulative book loss, which outweighed the positive evidence of projected future taxable income. Based on the weight of the evidence, we concluded that a $50.8 million valuation allowance was required, of which $45.2 million and $5.6 million were recorded to continuing operations and discontinued operations, respectively. The tax impact from the Merger was accounted for as an equity transaction; therefore, the valuation allowance was recorded as a decrease to additional paid-in capital. As of December 31, 2019 , we achieved a three-year cumulative book income, and together with other positive and negative evidence, we concluded that there is sufficient positive evidence of projected future taxable income to release the $50.8 million valuation allowance previously required for our overall net deferred tax asset position. This release was offset by a $0.6 million increase in the valuation allowance on our state NOL deferred tax asset. The overall impact of the change in the valuation allowance was recorded as a $50.2 million benefit from income taxes in our consolidated statements of operations and a $50.2 million increase in deferred tax assets in our consolidated balance sheets, of which $44.6 million and $5.6 million were recorded to continuing operations and discontinued operations, respectively. At December 31, 2019 , we had U.S. federal and state NOL carryforwards of $506.7 million and $202.1 million , respectively, included in our NOL deferred tax asset that are available to offset future taxable income. If not used, the federal and state NOL carryforwards will begin to expire in 2025 and 2020 , respectively, though $267.4 million of the U.S. federal and $54.3 million of the state NOL carryforwards have no expiration date. In connection with the state NOL deferred tax asset, we recorded a valuation allowance of $0.8 million and $0.2 million as of December 31, 2019 and 2018 , respectively. At December 31, 2019 , we had U.S. federal tax credit carryforwards of $1.5 million . If not used, the federal tax credit carryforwards will begin to expire in 2037. Unrecognized Tax Benefits A reconciliation of the unrecognized tax benefit (including discontinued operations) activity is shown below (in thousands): Year Ended December 31, 2019 2018 2017 Beginning balance $ 19,560 $ 21,400 $ 9,665 Additions based on tax positions related to current year 2,227 1,893 2,002 Additions based on tax positions related to prior years (1) 2,047 450 9,887 Reductions based on settlement refunds from government authorities (4,414 ) (3,461 ) (154 ) Reductions based on tax positions related to prior years (51 ) (20 ) — Reductions based on lapse of statute of limitations (916 ) (702 ) — Ending balance $ 18,453 $ 19,560 $ 21,400 —————— (1) Appellate court decisions during the year ended December 31, 2017 required us to remeasure certain of our uncertain tax positions and increase our unrecognized tax benefit for these positions in 2017. We had $18.5 million , $19.6 million and $21.4 million of unrecognized tax benefits at December 31, 2019 , 2018 and 2017 , respectively, of which $3.2 million , $6.9 million and $8.0 million , respectively, would affect the effective tax rate if recognized and $8.3 million , $6.9 million and $6.4 million , respectively, would be reflected in income from discontinued operations, net of tax if recognized. We recorded $2.1 million , $2.2 million and $1.6 million of potential interest expense and penalties related to unrecognized tax benefits associated with uncertain tax positions (including discontinued operations) in our consolidated balance sheets as of December 31, 2019 , 2018 and 2017 , respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as reductions in income tax expense. During the year ended December 31, 2019 , we recorded a $0.1 million release of potential interest expense and penalties, and during the years ended December 31, 2018 and 2017 , we recorded $0.7 million and $1.4 million , respectively, of potential interest expense and penalties in our consolidated statements of operations. Subject to the provisions of the tax matters agreement between Exterran Corporation and us, both parties agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin-off (including any ongoing or future amendments and audits for these returns) for the portion of the tax liability (including interest and penalties) that relates to their respective operations reported in the filing. As of December 31, 2019 and 2018 , we recorded an indemnification asset (including penalties and interest) of $8.5 million and $7.1 million , respectively, related to unrecognized tax benefits in our consolidated balance sheets. We and our subsidiaries file consolidated and separate income tax returns in the U.S. federal jurisdiction and in numerous state jurisdictions. U.S. federal income tax returns are generally subject to examination for up to three years after filing the returns. Due to our NOL carryforwards, our U.S. federal income tax returns can be examined back to the inception of our NOL carryforwards; therefore, expanding our examination period beyond 20 years. During the second quarter of 2017, the IRS commenced an examination of our U.S. federal income tax return for the 2014 tax year. During the third quarter of 2018, the IRS expanded the audit to include the 2015 tax year. Due to this audit being related to tax periods that commenced prior to the Spin-off, Exterran Corporation is also involved in this audit. We do not expect any tax adjustments from this audit to have a material impact on our consolidated financial position or consolidated results of operations. State income tax returns are generally subject to examination for a period of three to five years after filing the returns. However, the state impact of any U.S. federal audit adjustments and amendments remains subject to examination by various states for up to one year after formal notification to the states. We are currently involved in several state audits. During the years ended December 31, 2019 and 2018 , we settled certain state audits, which resulted in refunds of $2.4 million and $1.7 million , respectively, and reductions in previously-accrued uncertain tax benefits of $4.4 million and $3.5 million , respectively. As of December 31, 2019 , we did not have any state audits underway that we believe would have a material impact on our consolidated financial position or consolidated results of operations. As of December 31, 2019 , we believe it is reasonably possible that $2.6 million of our unrecognized tax benefits, including penalties, interest and discontinued operations, will be reduced prior to December 31, 2020 due to the settlement of audits or the expiration of statutes of limitations or both. However, due to the uncertain and complex application of the tax regulations, it is possible that the ultimate resolution of these matters may result in liabilities, which could materially differ from this estimate. Tax Cuts and Jobs Act In December 2017, the TCJA was enacted and significantly reformed the Code. The TCJA included a number of U.S. tax law changes that impact us, most notably the reduction in the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. In connection with our analysis of the TCJA, we remeasured our deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future. At December 31, 2017, we recorded a $53.4 million tax benefit to our provision for income taxes in our consolidated statements of operations, which consisted of a $57.7 million tax benefit due to reducing our continuing operations net deferred tax liability, a $4.6 million tax detriment due to reducing our discontinued operations deferred tax asset and a $0.3 million tax benefit due to reducing our other comprehensive income net deferred tax liability. Future guidance and additional information and interpretations with respect to the TCJA could impact our tax provision in future years. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 21. Earnings per Share Basic net income (loss) attributable to Archrock common stockholders per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) attributable to Archrock common stockholders per common share is determined by dividing net income (loss) attributable to Archrock common stockholders after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock-settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses. Diluted net income (loss) attributable to Archrock common stockholders per common share is computed using the weighted average number of shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options, performance-based restricted stock units and stock to be issued pursuant to our employee stock purchase plan unless their effect would be anti-dilutive. The following table summarizes net income attributable to Archrock common stockholders used in the calculation of basic and diluted net income per common share (in thousands): Year Ended December 31, 2019 2018 2017 Net income from continuing operations attributable to Archrock stockholders $ 97,603 $ 21,063 $ 19,007 Loss from discontinued operations, net of tax (273 ) — (54 ) Net income attributable to Archrock stockholders 97,330 21,063 18,953 Less: Net income attributable to participating securities (1,348 ) (815 ) (681 ) Net income attributable to Archrock common stockholders $ 95,982 $ 20,248 $ 18,272 The following table shows the potential shares of common stock that were included in computing diluted net income attributable to Archrock common stockholders per common share (in thousands): Year Ended December 31, 2019 2018 2017 Weighted average common shares outstanding including participating securities 139,317 110,843 70,860 Less: Weighted average participating securities outstanding (1,825 ) (1,538 ) (1,308 ) Weighted average common shares outstanding used in basic net income per common share 137,492 109,305 69,552 Net dilutive potential common shares issuable: On exercise of options and vesting of performance-based restricted stock units 34 111 112 On settlement of employee stock purchase plan shares 2 5 — Weighted average common shares outstanding used in diluted net income per common share 137,528 109,421 69,664 The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income attributable to Archrock common stockholders per common share as their inclusion would have been anti-dilutive (in thousands): Year Ended December 31, 2019 2018 2017 On exercise of options where exercise price is greater than average market value for the period 154 195 268 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 22. Derivatives We are exposed to market risks associated with changes in the variable interest rate of the Credit Facility. We use derivative instruments to manage our exposure to fluctuations in this variable interest rate and thereby minimize the risks and costs associated with financial activities. We do not use derivative instruments for trading or other speculative purposes. The following interest rate swaps, entered into to offset changes in expected cash flows due to fluctuations in the associated variable interest rates, were outstanding at December 31, 2019 (in millions): Expiration Date Notional Value May 2020 $ 100 March 2022 300 $ 400 The counterparties to our derivative agreements are major financial institutions. We monitor the credit quality of these financial institutions and do not expect non-performance by any counterparty, although such non-performance could have a material adverse effect on us. We have no collateral posted for the derivative instruments. We have designated these interest rate swaps as cash flow hedging instruments. Changes in the fair value of the interest rate swaps are recognized as a component of other comprehensive income (loss) until the hedged transaction affects earnings. At that time, amounts are reclassified into earnings to interest expense, the same statement of operations line item to which the earnings effect of the hedged item is recorded. Cash flows from derivatives designated as hedges are classified in our consolidated statements of cash flows under the same category as the cash flows from the underlying assets, liabilities or anticipated transactions unless the derivative contract contains a significant financing element; in this case, the cash settlements for these derivatives are classified as cash flows from financing activities. We expect the hedging relationship to be highly effective as the interest rate swap terms substantially coincide with the hedged item and are expected to offset changes in expected cash flows due to fluctuations in the variable rate. We perform quarterly qualitative prospective and retrospective hedge effectiveness assessments unless facts and circumstances related to the hedging relationships change such that we can no longer assert qualitatively that the cash flow hedge relationships were and continue to be highly effective. We estimate that $0.6 million of the deferred pre-tax loss attributable to interest rate swaps included in accumulated other comprehensive income (loss) at December 31, 2019 will be reclassified into earnings as interest expense at then-current values during the next 12 months as the underlying hedged transactions occur. As of December 31, 2019 , the weighted average effective fixed interest rate on our interest rate swaps was 1.8% . In August 2017, we amended the terms of $300.0 million of our interest rate swap agreements to adjust the fixed interest rate and extend the maturity dates to March 2022. These amendments effectively created new derivative contracts and terminated the old derivative contracts. As a result, as of the amendment date, we discontinued the original cash flow hedge relationships on a prospective basis and designated the amended interest rate swaps under new cash flow hedge relationships based on the amended terms. The fair value of the interest rate swaps immediately prior to the execution of the amendments was a liability o f $0.7 million . The associated amount in accumulated other comprehensive income (loss) was amortized into interest expense over the original terms of the interest rate swaps through May 2018. The following table presents the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated balance sheets (in thousands): December 31, 2019 2018 Other current assets $ 12 $ 3,185 Other assets — 4,122 Total derivative assets $ 12 $ 7,307 Accrued liabilities $ (593 ) $ — Other liabilities (1,175 ) — Total derivative liabilities $ (1,768 ) $ — The following tables present the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated statements of operations (in thousands): Year Ended December 31, 2019 2018 2017 Pre-tax gain (loss) recognized in other comprehensive income (loss) $ (6,785 ) $ 3,512 $ 5,553 Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense 2,278 617 (3,209 ) Year Ended Total amount of interest expense in which the effects of cash flow hedges are recorded $ 104,681 Pre-tax gain reclassified from accumulated other comprehensive income into interest expense 2,278 See Note 2 (“Basis of Presentation and Significant Accounting Policies”) , Note 14 (“Accumulated Other Comprehensive Income (Loss)”) and Note 23 (“Fair Value Measurements”) for further details on our derivative instruments. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 23. Fair Value Measurements The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value into the following three categories: • Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement. • Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers. • Level 3 — Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information. Assets and Liabilities Measured at Fair Value on a Recurring Basis On a quarterly basis, our interest rate swap derivative instruments are valued based on the income approach (discounted cash flow) using market observable inputs, including LIBOR forward curves. These fair value measurements are classified as Level 2. The following table presents our derivative asset and liability measured at fair value on a recurring basis, with pricing levels as of the date of valuation (in thousands): December 31, 2019 2018 Derivative asset $ 12 $ 7,307 Derivative liability (1,768 ) — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis During the years ended December 31, 2019 and 2018 , we recorded non-recurring fair value measurements related to our idle and previously-culled compressors. Our estimate of the compressors’ fair value was primarily based on the expected net sale proceeds compared to other fleet units we recently sold and/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. We discounted the expected proceeds, net of selling and other carrying costs, using a weighted average disposal period of four years . These fair value measurements are classified as Level 3. The fair value of our impaired compressors was $5.9 million and $2.3 million at December 31, 2019 and 2018 , respectively. See Note 17 (“Long-Lived Asset Impairment”) for further details. Other Financial Instruments The carrying amounts of our cash, receivables and payables approximate fair value due to the short-term nature of those instruments. The carrying amount of borrowings outstanding under our Credit Facility approximates fair value due to its variable interest rate. The fair value of these outstanding borrowings was estimated using a discounted cash flow analysis based on interest rates offered on loans with similar terms to borrowers of similar credit quality, which are Level 3 inputs. The fair value of our fixed rate debt was estimated based on quoted prices in inactive markets and is considered a Level 2 measurement. The following table presents the carrying amount and fair value of our fixed rate debt (in thousands): December 31, 2019 2018 Carrying amount of fixed rate debt (1) $ 1,329,549 $ 690,001 Fair value of fixed rate debt 1,400,000 674,000 —————— (1) Carrying amounts are shown net of unamortized debt discounts and unamortized deferred financing costs. See Note 13 (“Long-Term Debt”) . |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 24. Stock-Based Compensation We recognize stock-based compensation expense related to stock options, restricted stock units, performance units, phantom units and the employee stock purchase plan. We account for forfeitures as they occur. Stock-based compensation expense consisted of the following during the years ended December 31, 2019, 2018 and 2017 (in thousands): Year Ended December 31, 2019 2018 2017 Equity awards $ 8,105 $ 7,388 $ 8,460 Liability awards 2,336 1,096 1,580 Total stock-based compensation expense $ 10,441 $ 8,484 $ 10,040 Stock Incentive Plan In April 2013, we adopted the 2013 Plan to provide for the granting of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, other stock-based awards and dividend equivalent rights to employees, directors and consultants of Archrock. The 2013 Plan is administered by the compensation committee of our Board of Directors. Under the 2013 Plan, the maximum number of shares of common stock available for issuance pursuant to awards is 10,100,000 . An additional 2,832,994 shares were registered for issuance under the 2013 Plan pursuant to the terms of the Merger. Each option and stock appreciation right granted counts as one share against the aggregate share limit, and any share subject to a stock-settled award other than a stock option, stock appreciation right or other award for which the recipient pays intrinsic value counts as 1.75 shares against the aggregate share limit. Shares subject to awards granted under the 2013 Plan that are subsequently canceled, terminated, settled in cash or forfeited (excluding shares withheld to satisfy tax withholding obligations or to pay the exercise price of an option) are, to the extent of such cancellation, termination, settlement or forfeiture, available for future grant under the 2013 Plan. Cash-settled awards are not counted against the aggregate share limit. No additional grants have been or may be made under the 2007 Plan following the adoption of the 2013 Plan. Previous grants made under the 2007 Plan continue to be governed by that plan and the applicable award agreements. The 2013 Plan allows us to withhold shares upon vesting of restricted stock at the then-current market price to cover taxes required to be withheld on the vesting date. We withheld 212,080 shares from participants valued at $2.0 million during the year ended December 31, 2019 to cover tax withholding. The compensation committee of our Board of Directors generally establishes its schedule for making annual long-term incentive awards, consisting of a combination of restricted shares and performance units vesting over multiple years, to our named executive officers several months in advance and does not make such awards based on knowledge of material nonpublic information. Although the compensation committee of our Board of Directors has historically granted awards on a regular, predictable cycle, such awards may be granted at other times during the year, as determined in the sole discretion of the compensation committee. Stock Options Stock options are granted at fair market value at the grant date, are exercisable according to the vesting schedule established by the compensation committee of our Board of Directors in its sole discretion and expire no later than seven years after the grant date. Stock options generally vest one-third per year on each of the first three anniversaries of the grant date, subject to continued service through the applicable vesting date. During the years ended December 31, 2019 , 2018 , and 2017 , we did not grant any stock options, and there was no stock option activity during the year ended December 31, 2019 : Stock Options (in thousands) Weighted Average Exercise Price Per Share Weighted Average Remaining Life (in years) Aggregate Intrinsic Value (in thousands) Options outstanding and exercisable, January 1, 2019 154 $ 19.40 Options outstanding and exercisable, December 31, 2019 154 19.40 0.6 $ — Intrinsic value is the difference between the market value of our stock and the exercise price of each stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price. The total intrinsic value of stock options exercised during the years ended December 31, 2018 and 2017 was $0.8 million and $0.3 million , respectively. There were no stock options exercised during the year ended December 31, 2019. Stock options outstanding at December 31, 2019 expire in March 2020 and March 2021. Restricted Stock, Restricted Stock Units, Performance-Based Restricted Stock Units, Cash-Settled Restricted Stock Units and Cash-Settled Performance Units For grants of restricted stock and restricted stock units, we recognize compensation expense over the vesting period equal to the fair value of our common stock at the grant date. Our restricted stock and restricted stock units include rights to receive dividends or dividend equivalents. We remeasure the fair value of cash-settled restricted stock units and cash-settled performance units and record a cumulative adjustment of the expense previously recognized. Our obligation related to the cash-settled restricted stock units and cash-settled performance units is reflected as a liability in our consolidated balance sheets. Restricted stock, restricted stock units, cash-settled restricted stock units and cash-settled performance units generally vest one-third per year on dates as specified in the applicable award agreement, subject to continued service through the applicable vesting date. We also grant performance-based restricted stock units, which in addition to service conditions, have a market-based condition, which determines the number of restricted stock units and dividend equivalents earned. The market condition is based on our total shareholder return ranked against that of a predetermined peer group over a three-year performance period. The awards vest in their entirety on a date specified in the award agreement in the year following the conclusion of the performance period. The fair value of the performance-based restricted stock units, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model. Expected volatilities for us and each peer company utilized in the model are estimated using a historical period consistent with the awards’ remaining performance period as of the grant date. The risk-free interest rate is based on the yield on U.S. Treasury Separate Trading of Registered Interest and Principal Securities for a term consistent with the remaining performance period. The dividend yield used is 0.0% to approximate accumulation of earnings. The following table presents the inputs used and the grant date fair value calculated in the Monte Carlo simulation model for the performance-based restricted stock units awarded during the years ended December 31, 2019 and 2018 . Year Ended December 31, 2019 2018 Remaining performance period as of grant date (in years) 2.9 2.8 Risk-free interest rate used 2.6 % 2.4 % Grant-date fair value $ 12.91 $ 13.46 The following table presents restricted stock, restricted stock unit, performance-based restricted stock unit, cash-settled restricted stock unit and cash-settled performance unit activity during the year ended December 31, 2019 : Shares (in thousands) Weighted Average Grant Date Fair Value Per Share Non-vested awards, January 1, 2019 1,728 $ 9.68 Granted (1) 1,404 10.01 Vested (2) (957 ) 8.85 Canceled (153 ) 10.33 Non-vested awards, December 31, 2019 (3)(4) 2,022 10.25 —————— (1) The weighted average grant date fair value of shares granted during the years ended December 31, 2019 , 2018 and 2017 was $10.01 , $9.66 and $12.95 , respectively. (2) The total fair value of all awards vested during the years ended December 31, 2019 , 2018 and 2017 was $9.0 million , $8.2 million and $10.8 million , respectively. (3) Non-vested awards as of December 31, 2019 were comprised of 376,000 cash-settled restricted stock units and cash-settled performance units and 1,646,000 restricted stock, stock-settled restricted stock units and stock-settled performance-based restricted stock units. (4) During the year ended December 31, 2019 , the settlement terms of 99,631 performance units, with grant dates in 2018 and 2019, were modified from settlement in stock to cash. The change in award settlement from stock to cash was the only modification to these awards; the vesting, forfeiture and all other terms and conditions were unchanged. The modification resulted in a $0.2 million reclassification from additional paid-in capital to other current liabilities in our consolidated balance sheets and had an immaterial impact on our consolidated statements of operations. As of December 31, 2019 , we expect $13.7 million of unrecognized compensation cost related to unvested restricted stock, stock-settled restricted stock units, performance units, cash-settled restricted stock units and cash-settled performance units to be recognized over the weighted-average period of 1.8 years . Cash paid upon vesting of cash-settled restricted stock units during the years ended December 31, 2019 , 2018 and 2017 was $1.3 million , $1.1 million and $1.8 million , respectively. Employee Stock Purchase Plan Adopted in 2017, our ESPP provides employees with an opportunity to participate in our long-term performance and success through the purchase of shares of common stock at a price that may be less than fair market value. Each quarter, eligible employees may elect to withhold a portion of their salary up to the lesser of $25,000 per year or 10% of their eligible pay to purchase shares of our common stock at a price equal to 85% to 100% of the fair market value of the stock as defined by the plan. The ESPP will terminate on the date that all shares of common stock authorized for sale under the ESPP have been purchased, unless it is extended. The maximum number of shares of common stock available for purchase under the ESPP is 1,000,000 . As of December 31, 2019 , 783,270 shares remained available for purchase under the ESPP. Our ESPP is compensatory and, as a result, we record an expense in our consolidated statements of operations related to the ESPP. The purchase discount under the ESPP is 5% of the fair market value of our common stock on the first trading day of the quarter or the last trading day of the quarter, whichever is lower. Directors’ Stock and Deferral Plan Adopted in 2007, the Archrock, Inc. Directors’ Stock and Deferral Plan provides non-employee members of the Board of Directors with an opportunity to elect to receive our common stock as payment for a portion or all of their retainer. The number of shares paid each quarter is determined by dividing the dollar amount of fees elected to be paid in common stock by the closing sales price per share of the common stock on the last day of the quarter. In addition, directors who elect to receive a portion or all of their fees in the form of common stock may also elect to defer, until a later date, the receipt of a portion or all of their fees to be received in common stock. We have reserved 100,000 shares under the Directors’ Stock and Deferral Plan and, as of December 31, 2019 , 48,022 shares remained available to be issued under the plan. Partnership Long-Term Incentive Plans Pursuant to the Merger, all outstanding phantom units previously granted under the 2017 and 2006 Partnership LTIP were converted into comparable awards based on Archrock’s common shares. As such, all outstanding phantom units were converted, effective as of the closing of the Merger, into Archrock restricted stock units. See Note 15 (“Equity”) for further details of the Merger. Each Archrock restricted stock unit is subject to the same vesting, forfeiture and other terms and conditions applicable to the converted Partnership phantom units. There was no additional compensation cost to record as the conversion of awards did not result in incremental fair value. Prior to the Merger, in April 2017, the Partnership adopted the 2017 Partnership LTIP to provide for the benefit of employees, directors and consultants of the Partnership, us and our respective affiliates. The 2017 Partnership LTIP provided for the issuance of unit options, unit appreciation rights, restricted units, phantom units, performance awards, bonus awards, distribution equivalent rights, cash awards and other unit-based awards. Previous grants made under the 2006 Partnership LTIP continued to be governed by that plan and the applicable award agreements. We recognized compensation expense over the vesting period equal to the fair value of the Partnership’s common units at the grant date. Phantom units granted under the 2017 and 2006 LTIP may have included nonforfeitable tandem distribution equivalent rights to receive cash distributions on unvested phantom units in the quarter in which distributions were paid on common units. Phantom units generally vested one-third per year on dates specified in the applicable award agreements subject to continued service through the applicable vesting date. During the year ended December 31, 2018 , 53,091 phantom units vested with a weighted average grant date fair value per unit of $11.24 . |
Retirement Benefit Plan
Retirement Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Plan | 25. Retirement Benefit Plan Our 401(k) retirement plan provides for optional employee contributions up to the applicable Internal Revenue Service annual limit and discretionary employer matching contributions. Through June 2017 we made discretionary matching contributions to each participant’s account at a rate of (i) 100% of each participant’s first 1% of contributions plus (ii) 50% of each participant’s contributions up to the next 5% of eligible compensation. Beginning July 2017, we make discretionary matching contributions to each participant’s account at a rate of 100% of each participant’s contributions up to 5% of eligible compensation. We recorded matching contributions of $6.8 million , $6.5 million and $4.8 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 26. Commitments and Contingencies Performance Bonds In the normal course of business we have issued performance bonds to various state authorities that ensure payment of certain obligations. We have also issued a bond to protect our 401(k) retirement plan against losses caused by acts of fraud or dishonesty. The bonds have expiration dates in 2020 through the fourth quarter of 2022 and maximum potential future payments of $2.3 million . As of December 31, 2019 , we were in compliance with all obligations to which the performance bonds pertain. Tax Matters We are subject to a number of state and local taxes that are not income-based. As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due. We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability. As of December 31, 2019 and 2018 , we accrued $2.5 million and $4.5 million , respectively, for the outcomes of non-income based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We believe the likelihood is remote that the impact of potential unasserted claims from non-income based tax audits could be material to our consolidated financial position, but it is possible that the resolution of future audits could be material to our consolidated results of operations or cash flows. Subject to the provisions of the tax matters agreement between Exterran Corporation and us, both parties agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin-off (including any ongoing or future amendments and audits for these returns) for the portion of the tax liability (including interest and penalties) that relates to their respective operations reported in the filing. The tax contingencies mentioned above relate to tax matters for which we are responsible in managing the audit. As of December 31, 2019 and 2018 , we recorded an indemnification liability (including penalties and interest), in addition to the tax contingency above, of $2.8 million and $2.6 million , respectively, for our share of non-income based tax contingencies related to audits being managed by Exterran Corporation. During the fourth quarter of 2018, we settled certain sales and use tax audits, for which we recorded an $11.3 million net benefit in our consolidated statement of operations. This net benefit was reflected as a decrease of $1.8 million , $8.9 million and $0.1 million to cost of sales (excluding depreciation and amortization), SG&A and interest expense, respectively, and an increase to other income, net of $0.5 million . These settlements were reflected in our consolidated balance sheets as a $15.3 million tax refund receivable offset by $4.0 million in accrued liabilities at December 31, 2018. We received the cash refund for this settlement in the first quarter of 2019. Insurance Matters Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability and commercial automobile liability and other coverage we believe is appropriate. We believe that our insurance coverage is customary for the industry and adequate for our business; however, losses and liabilities not covered by insurance would increase our costs. Additionally, we are substantially self-insured for workers’ compensation and employee group health claims in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to the deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. We are also self-insured for property damage to our offshore assets. Litigation and Claims In the ordinary course of business, we are involved in various pending or threatened legal actions. While we are unable to predict the ultimate outcome of these actions, we believe that any ultimate liability arising from any of these actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to pay dividends. However, because of the inherent uncertainty of litigation and arbitration proceedings, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to pay dividends. The SEC conducted an investigation in connection with certain previously disclosed errors and irregularities at one of our former international operations. The SEC’s investigation related to the circumstances that gave rise to the restatement of prior period consolidated and combined financial statements. On April 8, 2019, we received notice that the investigation had concluded with no enforcement action. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 27. Related Party Transactions In connection with the closing of the Elite Acquisition, we issued 21.7 million shares of our common stock to JDH Capital, an affiliate of our customer Hilcorp. As long as JDH Capital, together with affiliates of Hilcorp, owns at least 7.5% of our outstanding common stock, it will have the right to designate one director to our Board of Directors. On August 1, 2019, Jeffery D. Hildebrand, founder and executive chairman of Hilcorp, was elected to our Board of Directors. Mr. Hildebrand receives no compensation for his role as a director. As of December 31, 2019 , JDH Capital owned 14.3% of our outstanding common stock. Revenue from Hilcorp and affiliates was $31.4 million , $12.0 million and $6.7 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. Accounts receivable, net due from Hilcorp and affiliates were $5.1 million and $3.6 million as of December 31, 2019 and 2018 , respectively. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segments | 28. Segments We manage our business segments primarily based on the type of product or service provided. We have two segments which we operate within the U.S.: contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The aftermarket services segment provides a full range of services to support the compression needs of customers, from part sales and normal maintenance services to full operation of a customer’s owned assets. We evaluate the performance of our segments based on gross margin for each segment. Revenue includes only sales to external customers. During the years ended December 31, 2019 , 2018 and 2017, Williams Partners accounted for 8% , 11% and 13% , respectively, of our contract operations and aftermarket services revenue. No other customer accounted for 10% or more of our revenue during these years. The following table presents revenue, gross margin and capital expenditures by segment during the years ended December 31, 2019 , 2018 and 2017 (in thousands): Contract Operations Aftermarket Services Segments Total Other (1) Total (2) 2019: Revenue $ 771,539 $ 193,946 $ 965,485 $ — $ 965,485 Gross margin 474,279 34,968 509,247 — 509,247 Capital expenditures 374,650 8,714 383,364 1,834 385,198 2018: Revenue $ 672,536 $ 231,905 $ 904,441 $ — $ 904,441 Gross margin 399,523 40,551 440,074 — 440,074 Capital expenditures 307,048 6,111 313,159 5,943 319,102 2017: Revenue $ 610,921 $ 183,734 $ 794,655 $ — $ 794,655 Gross margin 347,916 27,817 375,733 — 375,733 Capital expenditures 211,651 3,429 215,080 6,613 221,693 —————— (1) Includes corporate-related items. (2) Excludes capital expenditures and the operating results of discontinued operations. The following table presents assets by segment reconciled to total assets per the consolidated balance sheets (in thousands): December 31, 2019 2018 Contract operations $ 2,915,724 $ 2,383,381 Aftermarket services 67,832 79,383 Assets from segments 2,983,556 2,462,764 Other assets (1) 113,518 82,388 Assets associated with discontinued operations 12,901 7,363 Total assets $ 3,109,975 $ 2,552,515 —————— (1) Includes corporate-related items. The following table reconciles total gross margin to income (loss) before income taxes (in thousands): Year Ended December 31, 2019 2018 2017 Total gross margin $ 509,247 $ 440,074 $ 375,733 Less: Selling, general and administrative 117,727 101,563 111,483 Depreciation and amortization 188,084 174,946 188,563 Long-lived asset impairment 44,663 28,127 29,142 Restatement and other charges 445 19 4,370 Restructuring and other charges — — 1,386 Interest expense 104,681 93,328 88,760 Debt extinguishment loss 3,653 2,450 291 Transaction-related costs 8,213 10,162 275 Gain on sale of assets, net (16,016 ) (5,674 ) (5,675 ) Other income, net (661 ) (157 ) (243 ) Income (loss) before income taxes $ 58,458 $ 35,310 $ (42,619 ) |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 29. Selected Quarterly Financial Data (Unaudited) Selected quarterly financial data is presented below in thousands, except per share amounts: March 31, June 30, September 30, December 31, Revenue $ 236,159 $ 238,390 $ 244,949 $ 245,987 Gross profit (1) 76,171 77,454 81,481 64,963 Long-lived asset impairment 3,092 8,632 7,097 25,842 Debt extinguishment loss — 3,653 — — Transaction-related costs 180 2,687 4,905 441 (Gain) loss on sale of assets, net 16 (1,801 ) (7,859 ) (6,372 ) Net income (2) 19,456 11,423 20,407 46,044 Net income from continuing operations per common share: basic and diluted 0.15 0.09 0.14 0.30 March 31, June 30, September 30, December 31, Revenue $ 212,040 $ 226,870 $ 232,372 $ 233,159 Gross profit (1) 62,577 63,924 68,661 66,094 Long-lived asset impairment 4,710 6,953 6,660 9,804 Restatement and other charges 485 (1,076 ) 396 214 Debt extinguishment loss — 2,450 — — Transaction-related costs 4,125 5,686 182 169 Gain on sale of assets, net (1,195 ) (994 ) (719 ) (2,766 ) Net income 2,069 4,149 9,974 12,968 Net income (loss) attributable to Archrock stockholders (3,816 ) 1,937 9,974 12,968 Net income (loss) from continuing operations attributable to Archrock common stockholders per common share: basic and diluted (0.06 ) 0.02 0.08 0.10 —————— (1) Defined as revenue less cost of sales, direct depreciation and amortization and long-lived asset impairment charges. (2) Includes a $39.6 million one-time benefit from the release of a deferred tax asset valuation allowance in the fourth quarter of 2019. |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | ARCHROCK, INC. SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Beginning of Period Charged to Costs and Expenses Deductions (1) Balance at End of Period Allowance for doubtful accounts applied to accounts receivable in the balance sheet December 31, 2019 $ 1,452 $ 2,567 $ 1,809 $ 2,210 December 31, 2018 1,794 1,677 2,019 1,452 December 31, 2017 1,864 5,144 5,214 1,794 —————— (1) Uncollectible accounts written off. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our Financial Statements include Archrock and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. We consolidate the financial statements of the Partnership and reflect its operations in our contract operations segment. We control the Partnership through our ownership of its General Partner. Public ownership of the Partnership’s net assets and earnings prior to the Merger is reflected within noncontrolling interest in our Financial Statements. |
Use of Estimates in the Consolidated Financial Statements | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. Because of the inherent uncertainties in this process, actual future results could differ from those expected as of the reporting date. Management believes that the estimates and assumptions used are reasonable. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Revenue Recognition | Revenue Recognition As a result of our adoption of ASC 606 Revenue on January 1, 2018, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we are entitled to receive in exchange for those goods or services. Sales and usage-based taxes that are collected from the customer are excluded from revenue. In our contract operations business, natural gas compression service revenue is recognized over time and revenue associated with billable maintenance on our natural gas compression equipment is recognized at a point in time. The timing of revenue recognition is impacted by contractual provisions for service availability guarantees of our compression assets and re-billable costs associated with moving our compression assets to a customer site. Under previous guidance, contract operations revenue was recognized when earned, which generally occurs monthly when the service is provided under our customer contracts. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and trade accounts receivable. We believe that the credit risk of our temporary cash investments is minimal because we maintain minimal balances in our cash investment accounts. Trade accounts receivable are due from companies of varying size engaged principally in oil and natural gas activities throughout the U.S. We review the financial condition of customers prior to extending credit and generally do not obtain collateral for trade receivables. Payment terms are on a short-term basis and in accordance with industry practice. We consider this credit risk to be limited due to these companies’ financial resources, the nature of the products and services we provide and the terms of our contract operations customer service agreements. |
Inventory | Inventory Inventory consists of parts used for maintenance of natural gas compression equipment. Inventory is stated at the lower of cost and net realizable value using the average cost method. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 to 5 years Other 3 to 10 years Major improvements that extend the useful life of an asset are capitalized and depreciated over the estimated useful life of the major improvement, up to seven years . Repairs and maintenance are expensed as incurred. |
Long-Lived Assets | Long-Lived Assets We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. An impairment loss exists when estimated undiscounted cash flows expected from the use of the asset and its eventual disposition are less than its carrying amount. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its fair value. Identifiable intangibles are amortized over the estimated useful life of the asset. |
Leases | Leases As a result of our adoption of ASC 842 Leases on January 1, 2019, we recorded an operating lease ROU asset and an operating lease liability on our consolidated balance sheet. Under previous guidance, operating leases were not recorded to the balance sheet. We determine if an arrangement is a lease at inception and determine lease classification and recognize ROU assets and liabilities on the lease commencement date based on the present value of lease payments over the lease term. As the discount rate implicit in the lease is rarely readily determinable, we estimate our incremental borrowing rate using information available at commencement date in determining the present value of the lease payments. The lease term includes options to extend when we are reasonably certain to exercise the option. Short-term leases, those with an initial term of 12 months or less, are not recorded on the balance sheet. Variable costs such as our proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Operating lease expense for lease payments is recognized on a straight-line basis over the term of the lease. Our facility leases, of which we are the lessee, contain lease and nonlease components for which we have elected to account for as a single lease component, as the nonlease components are not significant to the total consideration of the contract and separating the nonlease component would have no effect on lease classification. As it relates to our contract operations service agreements, in which we are a lessor, the services nonlease component is predominant over the compression package lease component and therefore recognition of these agreements will continue to follow the ASC 606 Revenue guidance. Under previous guidance, no separation of lease and nonlease component is required, for either lessee or lessor. |
Goodwill | Goodwill The goodwill acquired in connection with the Elite Acquisition represents the excess of consideration transferred over the fair value of the assets and liabilities acquired. We review the carrying amount of our goodwill in the fourth quarter of every year, or whenever indicators of potential impairment exist, to determine if the carrying amount of a reporting unit exceeds its fair value, including the applicable goodwill. We perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is impaired. If the fair value is more likely than not impaired, we perform a quantitative impairment test to identify impairment and measure the amount of impairment loss to be recognized, if any. Our qualitative assessment includes consideration of various events and circumstances and their potential impact to a reporting unit’s fair value, including macroeconomic and industry conditions such as a deterioration in our operating environment and limitations on access to capital and other developments in the equity and credit markets, cost factors that could have a negative effect on earnings and cash flows, relevant entity-specific and reporting unit-specific events and overall financial performance such as declining earnings or cash flows or a sustained decrease in share price. The quantitative impairment test (i) allocates goodwill and our other assets and liabilities to our reporting units, contract operations and aftermarket services, (ii) calculates the fair value of the reporting units and (iii) determines the impairment loss, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value (limited to the total amount of goodwill allocated to that reporting unit). All of the goodwill recognized in the Elite Acquisition was allocated to our contract operations reporting unit. The fair value of the contract operations reporting unit is calculated using the expected present value of future cash flows method. Significant estimates are made to determine future cash flows including future revenues, costs and capital requirements and the appropriate risk-adjusted discount rate by which to discount the estimated future cash flows. Our fourth quarter qualitative assessment determined that it was not more likely than not that the fair value of the contract operations reporting unit was less than its carrying amount as of December 31, 2019, and as such, no quantitative impairment test of our goodwill was warranted. |
Internal-Use Software | Internal-Use Software Certain of our contracts have been deemed to be hosting arrangements that are service contracts, including those related to the cloud migration of our ERP system and cloud services for our new mobile workforce, telematics and inventory management tools. Certain costs incurred for the implementation of a hosting arrangement that is a service contract are capitalized and amortized on a straight-line basis over the term of the respective contract. Capitalized implementation costs are presented in other assets, the same line item in our consolidated balance sheets that a prepayment of the fees for the associated hosting arrangement would be presented. Amortization expense of the capitalized implementation costs is presented in SG&A, the same line item in our consolidated statements of operations as the expense for fees for the associated hosting arrangement. Amortization begins for each component of the hosting arrangement when the component becomes ready for its intended use. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If a valuation allowance was previously recorded and we subsequently determined we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax assets’ valuation allowance, which would reduce the provision for income taxes. We record uncertain tax positions in accordance with the accounting standard on income taxes under a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. |
Hedging and Use of Derivative Instruments | Hedging and Use of Derivative Instruments We use derivative instruments to manage our exposure to fluctuations in the variable interest rate of the Credit Facility and thereby minimize the risks and costs associated with financial activities. We do not use derivative instruments for trading or other speculative purposes. We record interest rate swaps on the balance sheet as either derivative assets or derivative liabilities measured at their fair value. The fair value of our derivatives is based on the income approach (discounted cash flow) using market observable inputs, including LIBOR forward curves. Changes in the fair value of the derivatives designated as cash flow hedges are recognized as a component of other comprehensive income (loss) until the hedged transaction affects earnings. At that time, amounts are reclassified into earnings to interest expense, the same statement of operations line item to which the earnings effect of the hedged item is recorded. To qualify for hedge accounting treatment, we must formally document, designate and assess the effectiveness of the transactions. If the necessary correlation ceases to exist or if the anticipated transaction is no longer probable, we would discontinue hedge accounting and apply mark-to-market accounting. Amounts paid or received from interest rate swap agreements are recorded in interest expense and matched with the cash flows and interest expense of the debt being hedged, resulting in an adjustment to the effective interest rate. |
Accounting Standards Updates Implemented and Accounting Standards Updates Not Yet Implemented | Accounting Standards Updates Implemented Goodwill On October 1, 2019, we prospectively adopted ASU 2017-04, which simplifies the test for goodwill impairment by eliminating Step 2 in the test for goodwill impairment, which required an entity to calculate the implied fair value of goodwill. Under this amendment, an entity should perform its goodwill impairment test on at least an annual basis by comparing the fair value of a reporting unit, including any income tax effects from any tax deductible goodwill, with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Leases ASC 842 Leases establishes a ROU model that requires a lessee to record a ROU asset and a lease liability on the balance sheet. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new guidance, lessor accounting is largely unchanged. We adopted ASC 842 Leases on January 1, 2019 using the modified retrospective transition method and elected the practical expedient package to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification of any expired or existing leases and (iii) initial direct costs for any existing leases. We did not elect the practical expedient to use hindsight in determining the lease term. Adoption of ASC 842 Leases resulted in recognition of an operating lease ROU asset of $18.6 million and an operating lease liability of $20.0 million in our consolidated balance sheet at January 1, 2019. The difference of $1.4 million related to accrued rent and prepaid lease payments recorded to our consolidated balance sheet as of December 31, 2018. We did not recognize any finance lease ROU assets or liabilities upon adoption of ASC 842 Leases. There was no impact to our consolidated statements of operations, equity or cash flows upon adoption. Comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. ASC 842 Leases also provides a practical expedient, elected by class of underlying asset, to not separate lease and nonlease components and instead account for those components as a single component if certain conditions are met. ASC 842 Leases also provides clarification for lessors on whether ASC 842 Leases or ASC 606 Revenue is applicable to the combined component based on determination of the predominant component. We have concluded that for our contract operations services agreements, in which we are a lessor, the services nonlease component is predominant over the compression unit lease component and therefore ongoing recognition of these agreements will continue to follow the ASC 606 Revenue guidance. We have also elected, as a lessee, to not separate lease and nonlease components as it relates to our facility leases. In addition, we have made an accounting policy election, as permitted by ASC 842 Leases, to not apply the recognition requirements of ASC 842 Leases to leases with an initial term of 12 months or less. Accounting Standards Updates Not Yet Implemented Income Taxes In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to various tax accounting principles and clarifies other existing guidance in order to improve consistency of application. These amendments are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted and requires that an entity early adopt all of the amendments within this update in the same period. We are currently evaluating the impact of ASU 2019-12 on our consolidated financial statements and footnote disclosures. Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, which amends the required fair value measurements disclosures related to valuation techniques and inputs used, uncertainty in measurement and changes in measurements applied. These amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty are to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments are to be applied retrospectively to all periods presented upon their effective date. We will adopt ASU 2018-13 effective January 1, 2020. These amendments will impact our disclosures related to our fair value measurements of our idle and previously-culled compressors and borrowings outstanding under our Credit Facility. We currently anticipate that the adoption will have no impact on our consolidated financial statements and are developing the new disclosures required by the new standard for inclusion in our first quarterly filing of 2020. Credit Losses In June 2016, the FASB issued ASU 2016-13, which changes the impairment model for financial assets measured at amortized cost and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new current expected credit loss model that will result in earlier recognition of allowance for losses. For public entities that meet the definition of an SEC filer, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. Entities will apply ASU 2016-13 provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We will adopt ASU 2016-13 effective January 1, 2020 and do not currently anticipate that the adoption will have a material impact on our consolidated financial statements. Our financial assets measured at amortized cost consist primarily of receivables from revenue transactions within the scope of ASC 606 Revenue. We are currently updating our accounting policies, documenting operational procedures and finalizing changes to our systems and internal control structure as necessary to implement the new standard and address the risks associated with estimating current expected credit losses. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Estimated useful life of property, plant and equipment | Property, plant and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 to 5 years Other 3 to 10 years Property, plant and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Compression equipment, facilities and other fleet assets $ 3,653,930 $ 3,323,465 Land and buildings 50,743 47,067 Transportation and shop equipment 116,057 103,766 Computer hardware and software 93,695 92,174 Other 15,308 11,880 Property, plant and equipment 3,929,733 3,578,352 Accumulated depreciation (1,370,335 ) (1,407,314 ) Property, plant and equipment, net $ 2,559,398 $ 2,171,038 |
Business Transactions (Tables)
Business Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Asset Acquisitions | The following table summarizes the purchase price allocation based on the estimated fair values of the acquired assets and liabilities as of the acquisition date (in thousands): Accounts receivable $ 9,007 Inventory 7,987 Other current assets 608 Property, plant and equipment 286,158 Operating lease ROU assets 682 Goodwill 100,598 Intangible assets 40,237 Accounts payable, trade (2,079 ) Accrued liabilities (2,973 ) Operating lease liabilities (326 ) Purchase price $ 439,899 |
Pro Forma Information | The unaudited pro forma financial information below is presented (in thousands) for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the transaction been consummated at the beginning of the period presented, nor is it necessarily indicative of future results. Year Ended December 31, 2019 2018 Revenue $ 1,009,763 $ 977,929 Net income attributable to Archrock stockholders 106,521 24,566 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of operating results and balance sheet data for discontinued operations | The following table summarizes the balance sheet for discontinued operations (in thousands): December 31, 2019 2018 Other current assets $ — $ 300 Other assets 8,508 7,063 Deferred tax assets (1) 4,393 — Total assets associated with discontinued operations $ 12,901 $ 7,363 Other current liabilities $ — $ 297 Deferred tax liabilities 8,508 7,063 Total liabilities associated with discontinued operations $ 8,508 $ 7,360 —————— (1) As of December 31, 2018 , the $5.6 million net deferred tax asset was fully offset by a valuation allowance. As of December 31, 2019 , the $5.6 million valuation allowance was released and the net deferred tax asset decreased by $1.2 million due to current period tax amortization. See Note 20 (“Income Taxes”) for further details. The following table summarizes the statements of operations for discontinued operations (in thousands): Year Ended December 31, 2019 2018 2017 Other (income) loss, net $ (1,473 ) $ (654 ) $ 154 Provision for (benefit from) income taxes 1,746 654 (100 ) Loss from discontinued operations, net of tax $ (273 ) $ — $ (54 ) |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory, net of reserves | Inventory consisted of the following (in thousands): December 31, 2019 2018 Parts and supplies $ 66,121 $ 65,645 Work in progress 8,346 10,688 Inventory $ 74,467 $ 76,333 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment, net | Property, plant and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 to 5 years Other 3 to 10 years Property, plant and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Compression equipment, facilities and other fleet assets $ 3,653,930 $ 3,323,465 Land and buildings 50,743 47,067 Transportation and shop equipment 116,057 103,766 Computer hardware and software 93,695 92,174 Other 15,308 11,880 Property, plant and equipment 3,929,733 3,578,352 Accumulated depreciation (1,370,335 ) (1,407,314 ) Property, plant and equipment, net $ 2,559,398 $ 2,171,038 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases Balance Sheet Location | Balance sheet information related to our operating leases was as follows (in thousands): Classification December 31, 2019 ROU assets Operating lease ROU assets $ 17,901 Lease liabilities Current Accrued liabilities $ 3,037 Noncurrent Operating lease liabilities 16,094 Total lease liabilities $ 19,131 |
Lease Cost | The components of lease cost were as follows (in thousands): Year Ended Operating lease cost $ 3,966 Short-term lease cost 348 Variable lease cost 1,607 Total lease cost $ 5,921 Cash flow and noncash information related to our operating leases were as follows (in thousands): Year Ended Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 5,420 Operating lease ROU assets obtained in exchange for new lease liabilities 2,247 Other supplemental information related to our operating leases was as follows: December 31, 2019 Weighted average remaining lease term (in years) 8.2 Weighted average discount rate 5.3 % |
Operating Lease Maturity Schedule | Remaining maturities of lease liabilities governed under ASC 842 Leases as of December 31, 2019 were as follows (in thousands): 2020 $ 3,651 2021 3,715 2022 2,615 2023 2,310 2024 1,919 Thereafter 9,611 Total lease payments 23,821 Less: Interest (4,690 ) Total lease liabilities under ASC 842 Leases $ 19,131 |
Maturities of Lease Liability Under ASC 840 | Maturities of lease liabilities governed under ASC 840 Leases as of December 31, 2018 were as follows (in thousands): 2019 $ 4,317 2020 3,980 2021 3,562 2022 2,433 2023 2,170 Thereafter 11,935 Total lease liabilities under ASC 840 Leases $ 28,397 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following (in thousands): December 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer-related (10-25 year life) $ 147,244 $ (76,176 ) $ 107,008 $ (69,678 ) Contract-based (5-7 year life) 37,773 (31,370 ) 64,556 (49,516 ) Intangible assets $ 185,017 $ (107,546 ) $ 171,564 $ (119,194 ) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future intangible assets amortization expense is as follows (in thousands): 2020 $ 15,675 2021 11,416 2022 9,078 2023 7,225 2024 6,136 Thereafter 27,941 Total $ 77,471 |
Accrued Liabilities Accrued Lia
Accrued Liabilities Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued salaries and other benefits $ 19,300 $ 24,252 Accrued income and other taxes 11,019 11,820 Accrued interest 16,462 11,999 Derivative liability - current 593 — Other accrued liabilities 20,471 30,926 Accrued liabilities $ 67,845 $ 78,997 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following (in thousands): December 31, 2019 2018 Credit Facility $ 513,000 $ 839,500 2028 Notes 500,000 — Less: Deferred financing costs, net of amortization (8,090 ) — 491,910 — 2027 Notes 500,000 — Less: Deferred financing costs, net of amortization (7,999 ) — 492,001 — 2022 Notes 350,000 350,000 Less: Debt discount, net of amortization (2,046 ) (2,766 ) Less: Deferred financing costs, net of amortization (2,316 ) (3,133 ) 345,638 344,101 2021 Notes — 350,000 Less: Debt discount, net of amortization — (1,789 ) Less: Deferred financing costs, net of amortization — (2,311 ) — 345,900 Long-term debt $ 1,842,549 $ 1,529,501 We must maintain the following consolidated financial ratios, as defined in the Credit Facility agreement: EBITDA to Interest Expense 2.5 to 1.0 Senior Secured Debt to EBITDA 3.5 to 1.0 Total Debt to EBITDA Through fiscal year 2019 5.75 to 1.0 Through second quarter of 2020 5.50 to 1.0 Thereafter (1) 5.25 to 1.0 —————— (1) Subject to a temporary increase to 5.5 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter. |
Schedule of Maturities of Long-term Debt | Contractual maturities of long-term debt over the next five years, excluding interest to be accrued, at December 31, 2019 were as follows (in thousands): 2020 $ — 2021 — 2022 (1) 350,000 2023 — 2024 513,000 Long-term debt maturities through 2024 (1) $ 863,000 —————— (1) Includes the full face value of the 2022 Notes and has not been reduced by the aggregate unamortized discount of $2.0 million and the aggregate unamortized deferred financing costs of $2.3 million as of December 31, 2019 . |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in accumulated other comprehensive income (loss) of our derivative cash flow hedges, net of tax and excluding noncontrolling interest, during the years ended December 31, 2019 , 2018 and 2017 (in thousands): Year Ended December 31, 2019 2018 2017 Beginning accumulated other comprehensive income (loss) $ 5,773 $ 1,197 $ (1,678 ) Gain (loss) recognized in other comprehensive income (loss), net of tax provision (benefit) of $(1,425), $169 and $793, respectively (5,360 ) (659 ) 1,910 (Gain) loss reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax provision (benefit) of $478, $185 and $(520), respectively (1) (1,800 ) (435 ) 965 Merger-related adjustments (2) — 5,670 — Other comprehensive income (loss) attributable to Archrock stockholders (7,160 ) 4,576 2,875 Ending accumulated other comprehensive income (loss) $ (1,387 ) $ 5,773 $ 1,197 —————— (1) Included stranded tax effects resulting from the TCJA of $0.3 million reclassified to accumulated deficit during the year ended December 31, 2018. (2) Pursuant to the Merger, we reclassified a gain of $5.7 million from noncontrolling interest to accumulated other comprehensive income (loss) related to the fair value of our derivative instruments that was previously attributed to public ownership of the Partnership. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Effects of changes in ownership interest | The following table presents the effects of changes in our ownership interest in the Partnership on the equity attributable to Archrock stockholders during the years ended December 31, 2018 and 2017 (in thousands): Year Ended December 31, 2018 2017 Net income attributable to Archrock stockholders $ 21,063 $ 18,953 Increase in Archrock stockholders’ additional paid-in capital for change in ownership of Partnership common units 56,845 17,638 Increase from net income attributable to Archrock stockholders and transfers from noncontrolling interest $ 77,908 $ 36,591 |
Summary of entity's dividends per common share | The following table summarizes our dividends declared and paid in each of the quarterly periods of 2019 , 2018 and 2017 : Declared Dividends Dividends Paid 2017 Q1 $ 0.120 $ 8,458 Q2 0.120 8,534 Q3 0.120 8,536 Q4 0.120 8,536 2018 Q1 $ 0.120 $ 8,532 Q2 0.120 15,486 Q3 0.132 17,114 Q4 0.132 17,156 2019 Q1 $ 0.132 $ 17,231 Q2 0.132 17,206 Q3 0.145 22,062 Q4 0.145 22,031 |
Revenue From Contracts with C_2
Revenue From Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our revenue from contracts with customers disaggregated by revenue source (in thousands): Year Ended December 31, 2019 2018 Contract operations (1) : 0 - 1,000 horsepower per unit $ 259,985 $ 241,810 1,001 - 1,500 horsepower per unit 316,082 276,775 Over 1,500 horsepower per unit 191,510 149,783 Other (2) 3,962 4,168 Total contract operations (3) 771,539 672,536 Aftermarket services (1) : Services (4) 122,076 142,476 OTC parts and components sales 71,870 89,429 Total aftermarket services (5) 193,946 231,905 Total revenue $ 965,485 $ 904,441 —————— (1) We operate in two segments: contract operations and aftermarket services. See Note 28 (“Segments”) for further details regarding our segments. (2) Primarily relates to fees associated with owned non-compression equipment. (3) Includes $7.9 million and $6.6 million for the years ended December 31, 2019 and 2018 , respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time. (4) Includes a reversal of $0.9 million of revenue during the year ended December 31, 2019 related to changes in estimates of performance obligations partially satisfied in prior periods. (5) All service revenue within aftermarket services is recognized over time. All OTC parts and components sales revenue is recognized at a point in time. |
Schedule of Remaining Performance Obligation | As of December 31, 2019 , we had $469.6 million of remaining performance obligations related to our contract operations segment. The remaining performance obligations will be recognized through 2024 as follows (in thousands): 2020 2021 2022 2023 2024 Total Remaining performance obligations $ 288,204 $ 131,816 $ 43,808 $ 4,941 $ 813 $ 469,582 |
Long-Lived Assets Impairment (T
Long-Lived Assets Impairment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Impairment Charges [Abstract] | |
Details of Impairment of Long-Lived Assets Held and Used by Asset | The following table presents the results of our impairment review as recorded to our contract operations segment (dollars in thousands): Year Ended December 31, 2019 2018 2017 Idle compressors retired from the active fleet 975 310 325 Horsepower of idle compressors retired from the active fleet 170,000 115,000 100,000 Impairment recorded on idle compressors retired from the active fleet $ 44,663 $ 28,127 $ 26,287 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of changes to accrued liability balance related to restructuring and other charges | The following table summarizes the changes to our accrued liability balance related to restructuring and other charges for the year ended December 31, 2017 (in thousands): Balance at January 1, 2017 $ 712 Additions for costs expensed 1,386 Less: non-cash expense (1) (997 ) Reductions for payments (1,101 ) Balance at December 31, 2017 $ — —————— (1) Included non-cash retention benefits associated with the Spin-off to be settled in Archrock stock. |
Corporate Office Relocation (Ta
Corporate Office Relocation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Summary of Relocation Accruals and Expenses | The following table summarizes the changes to our accrued liability balance related to our corporate office relocation (in thousands): Year Ended Beginning balance $ 583 Reductions for payments (583 ) Ending balance $ — The following table summarizes our corporate office relocation costs by category (in thousands): Year Ended Remaining lease costs $ 1,258 Impairment of leasehold improvements and furniture and fixtures 795 Relocation costs 60 Total corporate relocation costs $ 2,113 |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for (benefit from) income taxes consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current tax provision (benefit): U.S. federal $ 75 $ — $ (1,495 ) State 377 912 172 Total current $ 452 $ 912 $ (1,323 ) Deferred tax provision (benefit): U.S. federal $ (35,597 ) $ 6,197 $ (67,443 ) State (4,000 ) (959 ) 7,683 Total deferred $ (39,597 ) $ 5,238 $ (59,760 ) Provision for (benefit from) income taxes $ (39,145 ) $ 6,150 $ (61,083 ) |
Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles these effective tax rates to the U.S. statutory rate of 21% , the rate in effect during 2019 and 2018 , and 35% , the rate in effect during 2017 (in thousands): Year Ended December 31, 2019 2018 2017 Income taxes at U.S. federal statutory rate $ 12,276 $ 7,415 $ (14,917 ) Net state income taxes (1) 1,172 1,570 (4,693 ) Tax credits (1,295 ) (244 ) — Tax Cuts and Jobs Act (2) — — (53,442 ) Noncontrolling interest — (1,793 ) (1,091 ) Unrecognized tax benefits (3)(4) (1,958 ) (1,443 ) 9,566 Valuation allowances and write off of tax attributes (5) (50,219 ) (58 ) 247 Indemnification revenue / expense 42 (44 ) 692 Executive compensation limitation 1,102 977 2,433 Stock 66 (455 ) (858 ) Other (331 ) 225 980 Provision for (benefit from) income taxes $ (39,145 ) $ 6,150 $ (61,083 ) —————— (1) Includes a deferred state release, net of federal benefit, of $3.7 million due to the remeasurement of our uncertain tax benefits in 2017 . (2) See “Tax Cuts and Jobs Act” below for further details. (3) Reflects a decrease in our uncertain tax benefit, net of federal benefit, due to settlements of tax audits and expiration of statute of limitations in 2019 and 2018 . (4) Reflects an increase in our uncertain tax benefit, net of federal benefit, due to appellate court decisions in 2017 which required us to remeasure certain of our uncertain tax positions. (5) See “Tax Attributes and Valuation Allowances” below for further details. |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that gave rise to deferred tax assets and deferred tax liabilities were as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 116,378 $ 82,259 Accrued liabilities 3,486 5,726 Other 12,479 9,407 132,343 97,392 Valuation allowances (1) (822 ) (45,439 ) Total deferred tax assets $ 131,521 $ 51,953 Deferred tax liabilities: Property, plant and equipment $ (6,440 ) $ (10,763 ) Basis difference in the Partnership (81,645 ) (35,604 ) Other (8,083 ) (4,172 ) Total deferred tax liabilities (96,168 ) (50,539 ) Net deferred tax asset (2) $ 35,353 $ 1,414 —————— (1) See “Tax Attributes and Valuation Allowances” below for further details. (2) The 2019 and 2018 net deferred tax asset are reflected in our consolidated balance sheets as deferred tax assets of $36.6 million and $4.3 million , respectively, and deferred tax liabilities of $1.3 million and $2.8 million |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the unrecognized tax benefit (including discontinued operations) activity is shown below (in thousands): Year Ended December 31, 2019 2018 2017 Beginning balance $ 19,560 $ 21,400 $ 9,665 Additions based on tax positions related to current year 2,227 1,893 2,002 Additions based on tax positions related to prior years (1) 2,047 450 9,887 Reductions based on settlement refunds from government authorities (4,414 ) (3,461 ) (154 ) Reductions based on tax positions related to prior years (51 ) (20 ) — Reductions based on lapse of statute of limitations (916 ) (702 ) — Ending balance $ 18,453 $ 19,560 $ 21,400 —————— (1) Appellate court decisions during the year ended December 31, 2017 required us to remeasure certain of our uncertain tax positions and increase our unrecognized tax benefit for these positions in 2017. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Summary of net income (loss) attributable to Archrock common stockholders used in the calculation of basic and diluted income (loss) per common share | The following table summarizes net income attributable to Archrock common stockholders used in the calculation of basic and diluted net income per common share (in thousands): Year Ended December 31, 2019 2018 2017 Net income from continuing operations attributable to Archrock stockholders $ 97,603 $ 21,063 $ 19,007 Loss from discontinued operations, net of tax (273 ) — (54 ) Net income attributable to Archrock stockholders 97,330 21,063 18,953 Less: Net income attributable to participating securities (1,348 ) (815 ) (681 ) Net income attributable to Archrock common stockholders $ 95,982 $ 20,248 $ 18,272 |
Schedule of potential shares of common stock that were included in computing diluted income (loss) attributable to Archrock common stockholders per common share | The following table shows the potential shares of common stock that were included in computing diluted net income attributable to Archrock common stockholders per common share (in thousands): Year Ended December 31, 2019 2018 2017 Weighted average common shares outstanding including participating securities 139,317 110,843 70,860 Less: Weighted average participating securities outstanding (1,825 ) (1,538 ) (1,308 ) Weighted average common shares outstanding used in basic net income per common share 137,492 109,305 69,552 Net dilutive potential common shares issuable: On exercise of options and vesting of performance-based restricted stock units 34 111 112 On settlement of employee stock purchase plan shares 2 5 — Weighted average common shares outstanding used in diluted net income per common share 137,528 109,421 69,664 |
Schedule of potential shares of common stock issuable, excluded from computation of diluted income (loss), attributable to Archrock common stockholders per common share | The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income attributable to Archrock common stockholders per common share as their inclusion would have been anti-dilutive (in thousands): Year Ended December 31, 2019 2018 2017 On exercise of options where exercise price is greater than average market value for the period 154 195 268 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following interest rate swaps, entered into to offset changes in expected cash flows due to fluctuations in the associated variable interest rates, were outstanding at December 31, 2019 (in millions): Expiration Date Notional Value May 2020 $ 100 March 2022 300 $ 400 |
Effect of derivative instruments on consolidated financial position | The following table presents the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated balance sheets (in thousands): December 31, 2019 2018 Other current assets $ 12 $ 3,185 Other assets — 4,122 Total derivative assets $ 12 $ 7,307 Accrued liabilities $ (593 ) $ — Other liabilities (1,175 ) — Total derivative liabilities $ (1,768 ) $ — |
Effect of derivative instruments on results of operations | The following tables present the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated statements of operations (in thousands): Year Ended December 31, 2019 2018 2017 Pre-tax gain (loss) recognized in other comprehensive income (loss) $ (6,785 ) $ 3,512 $ 5,553 Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense 2,278 617 (3,209 ) Year Ended Total amount of interest expense in which the effects of cash flow hedges are recorded $ 104,681 Pre-tax gain reclassified from accumulated other comprehensive income into interest expense 2,278 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of assets and liabilities measured at fair value on recurring basis | The following table presents our derivative asset and liability measured at fair value on a recurring basis, with pricing levels as of the date of valuation (in thousands): December 31, 2019 2018 Derivative asset $ 12 $ 7,307 Derivative liability (1,768 ) — |
Schedule of carrying value and estimated fair value of debt instruments | The following table presents the carrying amount and fair value of our fixed rate debt (in thousands): December 31, 2019 2018 Carrying amount of fixed rate debt (1) $ 1,329,549 $ 690,001 Fair value of fixed rate debt 1,400,000 674,000 —————— (1) Carrying amounts are shown net of unamortized debt discounts and unamortized deferred financing costs. See Note 13 (“Long-Term Debt”) . |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of allocated stock-based compensation | tock-based compensation expense consisted of the following during the years ended December 31, 2019, 2018 and 2017 (in thousands): Year Ended December 31, 2019 2018 2017 Equity awards $ 8,105 $ 7,388 $ 8,460 Liability awards 2,336 1,096 1,580 Total stock-based compensation expense $ 10,441 $ 8,484 $ 10,040 |
Summary of stock option activity | December 31, 2019 : Stock Options (in thousands) Weighted Average Exercise Price Per Share Weighted Average Remaining Life (in years) Aggregate Intrinsic Value (in thousands) Options outstanding and exercisable, January 1, 2019 154 $ 19.40 Options outstanding and exercisable, December 31, 2019 154 19.40 0.6 $ — |
Schedule of valuaton assumptions | The following table presents the inputs used and the grant date fair value calculated in the Monte Carlo simulation model for the performance-based restricted stock units awarded during the years ended December 31, 2019 and 2018 . Year Ended December 31, 2019 2018 Remaining performance period as of grant date (in years) 2.9 2.8 Risk-free interest rate used 2.6 % 2.4 % Grant-date fair value $ 12.91 $ 13.46 |
Schedule of restricted stock, restricted stock unit, performance unit, cash settled restricted stock unit and cash settled performance unit activity | The following table presents restricted stock, restricted stock unit, performance-based restricted stock unit, cash-settled restricted stock unit and cash-settled performance unit activity during the year ended December 31, 2019 : Shares (in thousands) Weighted Average Grant Date Fair Value Per Share Non-vested awards, January 1, 2019 1,728 $ 9.68 Granted (1) 1,404 10.01 Vested (2) (957 ) 8.85 Canceled (153 ) 10.33 Non-vested awards, December 31, 2019 (3)(4) 2,022 10.25 —————— (1) The weighted average grant date fair value of shares granted during the years ended December 31, 2019 , 2018 and 2017 was $10.01 , $9.66 and $12.95 , respectively. (2) The total fair value of all awards vested during the years ended December 31, 2019 , 2018 and 2017 was $9.0 million , $8.2 million and $10.8 million , respectively. (3) Non-vested awards as of December 31, 2019 were comprised of 376,000 cash-settled restricted stock units and cash-settled performance units and 1,646,000 restricted stock, stock-settled restricted stock units and stock-settled performance-based restricted stock units. (4) During the year ended December 31, 2019 , the settlement terms of 99,631 performance units, with grant dates in 2018 and 2019, were modified from settlement in stock to cash. The change in award settlement from stock to cash was the only modification to these awards; the vesting, forfeiture and all other terms and conditions were unchanged. The modification resulted in a $0.2 million reclassification from additional paid-in capital to other current liabilities in our consolidated balance sheets and had an immaterial impact on our consolidated statements of operations. |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Revenue and other financial information by reportable segment | The following table presents revenue, gross margin and capital expenditures by segment during the years ended December 31, 2019 , 2018 and 2017 (in thousands): Contract Operations Aftermarket Services Segments Total Other (1) Total (2) 2019: Revenue $ 771,539 $ 193,946 $ 965,485 $ — $ 965,485 Gross margin 474,279 34,968 509,247 — 509,247 Capital expenditures 374,650 8,714 383,364 1,834 385,198 2018: Revenue $ 672,536 $ 231,905 $ 904,441 $ — $ 904,441 Gross margin 399,523 40,551 440,074 — 440,074 Capital expenditures 307,048 6,111 313,159 5,943 319,102 2017: Revenue $ 610,921 $ 183,734 $ 794,655 $ — $ 794,655 Gross margin 347,916 27,817 375,733 — 375,733 Capital expenditures 211,651 3,429 215,080 6,613 221,693 —————— (1) Includes corporate-related items. (2) Excludes capital expenditures and the operating results of discontinued operations. |
Reconciliation of Assets from Segment to Consolidated | The following table presents assets by segment reconciled to total assets per the consolidated balance sheets (in thousands): December 31, 2019 2018 Contract operations $ 2,915,724 $ 2,383,381 Aftermarket services 67,832 79,383 Assets from segments 2,983,556 2,462,764 Other assets (1) 113,518 82,388 Assets associated with discontinued operations 12,901 7,363 Total assets $ 3,109,975 $ 2,552,515 —————— (1) Includes corporate-related items. |
Reconciliation of net income (loss) to gross margin | The following table reconciles total gross margin to income (loss) before income taxes (in thousands): Year Ended December 31, 2019 2018 2017 Total gross margin $ 509,247 $ 440,074 $ 375,733 Less: Selling, general and administrative 117,727 101,563 111,483 Depreciation and amortization 188,084 174,946 188,563 Long-lived asset impairment 44,663 28,127 29,142 Restatement and other charges 445 19 4,370 Restructuring and other charges — — 1,386 Interest expense 104,681 93,328 88,760 Debt extinguishment loss 3,653 2,450 291 Transaction-related costs 8,213 10,162 275 Gain on sale of assets, net (16,016 ) (5,674 ) (5,675 ) Other income, net (661 ) (157 ) (243 ) Income (loss) before income taxes $ 58,458 $ 35,310 $ (42,619 ) |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Selected quarterly financial data is presented below in thousands, except per share amounts: March 31, June 30, September 30, December 31, Revenue $ 236,159 $ 238,390 $ 244,949 $ 245,987 Gross profit (1) 76,171 77,454 81,481 64,963 Long-lived asset impairment 3,092 8,632 7,097 25,842 Debt extinguishment loss — 3,653 — — Transaction-related costs 180 2,687 4,905 441 (Gain) loss on sale of assets, net 16 (1,801 ) (7,859 ) (6,372 ) Net income (2) 19,456 11,423 20,407 46,044 Net income from continuing operations per common share: basic and diluted 0.15 0.09 0.14 0.30 March 31, June 30, September 30, December 31, Revenue $ 212,040 $ 226,870 $ 232,372 $ 233,159 Gross profit (1) 62,577 63,924 68,661 66,094 Long-lived asset impairment 4,710 6,953 6,660 9,804 Restatement and other charges 485 (1,076 ) 396 214 Debt extinguishment loss — 2,450 — — Transaction-related costs 4,125 5,686 182 169 Gain on sale of assets, net (1,195 ) (994 ) (719 ) (2,766 ) Net income 2,069 4,149 9,974 12,968 Net income (loss) attributable to Archrock stockholders (3,816 ) 1,937 9,974 12,968 Net income (loss) from continuing operations attributable to Archrock common stockholders per common share: basic and diluted (0.06 ) 0.02 0.08 0.10 —————— (1) Defined as revenue less cost of sales, direct depreciation and amortization and long-lived asset impairment charges. (2) Includes a $39.6 million one-time benefit from the release of a deferred tax asset valuation allowance in the fourth quarter of 2019. |
Description of Business (Detail
Description of Business (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Organization (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 2 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Concentrations of Credit Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk | |||
Bad debt expense | $ 2,567 | $ 1,677 | $ 5,144 |
Trade Receivables | Customer Concentration Risk | Anadarko | |||
Concentration Risk | |||
Concentration risk (percent) | 13.00% | ||
Trade Receivables | Customer Concentration Risk | Williams Partners | |||
Concentration Risk | |||
Concentration risk (percent) | 11.00% |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Property Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Compression equipment, facilities and other fleet assets | Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 3 years |
Compression equipment, facilities and other fleet assets | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 30 years |
Buildings | Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 20 years |
Buildings | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 35 years |
Transportation and shop equipment | Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 3 years |
Transportation and shop equipment | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 10 years |
Computer hardware and software | Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 3 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 5 years |
Other | Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 3 years |
Other | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 10 years |
Major improvements | Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment useful life | 7 years |
Recent Accounting Developments
Recent Accounting Developments - Narratives (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Error Corrections and Prior Period Adjustments Restatement | |||
Operating lease ROU assets | $ 17,901 | ||
Total lease liabilities under ASC 842 Leases | $ 19,131 | ||
Prepaid rent | $ 1,400 | ||
ASU 2016-02 | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Operating lease ROU assets | $ 18,600 | ||
Total lease liabilities under ASC 842 Leases | $ 20,000 |
Business Transactions - Narrati
Business Transactions - Narratives (Details) $ in Thousands, shares in Millions | Aug. 01, 2019USD ($)hpcompressor_unitshares | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisitions | |||||||||||||
Payments to acquire assets | $ 214,019 | $ 0 | $ 0 | ||||||||||
Transaction-related costs | $ 441 | $ 4,905 | $ 2,687 | $ 180 | $ 169 | $ 182 | $ 5,686 | $ 4,125 | 8,213 | 10,162 | 275 | ||
Proceeds from sale of property, plant and equipment and other assets | 80,961 | $ 33,927 | $ 46,954 | ||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Harvest | |||||||||||||
Business Acquisitions | |||||||||||||
Compressor units (horsepower) | compressor_unit | 80,000 | ||||||||||||
Proceeds from sale of property, plant and equipment and other assets | $ 30,000 | ||||||||||||
Gain on sale of assets | 6,600 | ||||||||||||
Elite Acquisition | |||||||||||||
Business Acquisitions | |||||||||||||
Compressor units (horsepower) | hp | 430,000 | ||||||||||||
Payments to acquire assets | $ 214,000 | ||||||||||||
Property, plant and equipment useful life | 15 years | ||||||||||||
Asset Acquisition, Revenue Attributable To Assets Acquired | $ 33,200 | ||||||||||||
Transaction-related costs | $ 7,800 | ||||||||||||
Elite Acquisition | Contract-based intangible assets | |||||||||||||
Business Acquisitions | |||||||||||||
Estimated average remaining life intangible assets | 15 years | ||||||||||||
Elite Acquisition | Common Stock | |||||||||||||
Business Acquisitions | |||||||||||||
Shares issued as compensation for asset acquisition (shares) | shares | 21.7 | ||||||||||||
Issuance of Archrock common stock pursuant to Elite Acquisition, net of tax | $ 225,900 |
Business Transactions - Assets
Business Transactions - Assets Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Aug. 01, 2019 | Dec. 31, 2018 |
Net Assets Acquired | |||
Goodwill | $ 100,598 | $ 0 | |
Elite Acquisition | |||
Net Assets Acquired | |||
Accounts receivable | $ 9,007 | ||
Inventory | 7,987 | ||
Other current assets | 608 | ||
Property, plant and equipment | 286,158 | ||
Operating lease ROU assets | 682 | ||
Goodwill | 100,598 | ||
Intangible assets | 40,237 | ||
Accounts payable, trade | (2,079) | ||
Accrued liabilities | (2,973) | ||
Operating lease liabilities | (326) | ||
Purchase price | $ 439,899 |
Business Transactions - Pro For
Business Transactions - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Combinations [Abstract] | ||
Revenue | $ 1,009,763 | $ 977,929 |
Net income attributable to Archrock stockholders | $ 106,521 | $ 24,566 |
Discontinued Operations Discont
Discontinued Operations Discontinued Operations - Narratives (Details) - USD ($) $ in Thousands | Apr. 11, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 03, 2015 |
Spinoff | Exterran Corporation | |||||
Discontinued Operations | |||||
Deferred tax liabilities | $ 8,508 | $ 7,063 | |||
Other assets | 8,508 | 7,063 | |||
Compression units acquired | $ 150,200 | ||||
Deferred tax asset net | 5,600 | ||||
Deferred tax asset valuation allowance | 5,600 | ||||
Decrease in deferred tax asset | $ 1,200 | ||||
Affiliated Entity | Exterran Corporation | |||||
Discontinued Operations | |||||
Proceeds from sale of expropriated assets installment payment | $ 18,700 | $ 19,700 | |||
Due from affiliates | $ 25,000 | ||||
Proceeds from the repayment of debt | $ 25,000 |
Discontinued Operations - Balan
Discontinued Operations - Balance Sheet Data for Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of balance sheet data for discontinued operations | ||
Total assets associated with discontinued operations | $ 12,901 | $ 7,363 |
Other current liabilities | 0 | 297 |
Spinoff | Exterran Corporation | ||
Summary of balance sheet data for discontinued operations | ||
Other current assets | 0 | 300 |
Other assets | 8,508 | 7,063 |
Deferred tax assets | 4,393 | 0 |
Total assets associated with discontinued operations | 12,901 | 7,363 |
Other current liabilities | 0 | 297 |
Deferred tax liabilities | 8,508 | 7,063 |
Total liabilities associated with discontinued operations | $ 8,508 | $ 7,360 |
Discontinued Operations - Resul
Discontinued Operations - Results of Operation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of operating results of the discontinued operations | |||
Income (loss) from discontinued operations, net of tax | $ (273) | $ 0 | $ (54) |
Spinoff | Exterran Corporation | |||
Summary of operating results of the discontinued operations | |||
Other (income) loss, net | (1,473) | (654) | |
Other (income) loss, net | 154 | ||
Provision for (benefit from) income taxes | 1,746 | 654 | (100) |
Income (loss) from discontinued operations, net of tax | $ (273) | $ 0 | $ (54) |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Composition of Inventory net of reserves | ||
Parts and supplies | $ 66,121 | $ 65,645 |
Work in progress | 8,346 | 10,688 |
Inventory | $ 74,467 | $ 76,333 |
Inventory - Narratives (Details
Inventory - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |||
Inventory write-down | $ 944 | $ 1,614 | $ 2,397 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 3,929,733 | $ 3,578,352 |
Accumulated depreciation | (1,370,335) | (1,407,314) |
Property, plant and equipment, net | 2,559,398 | 2,171,038 |
Compression equipment, facilities and other fleet assets | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 3,653,930 | 3,323,465 |
Land and buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 50,743 | 47,067 |
Transportation and shop equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 116,057 | 103,766 |
Computer hardware and software | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 93,695 | 92,174 |
Other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 15,308 | $ 11,880 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net Property, Plant and Equipment, net - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 172.8 | $ 158.4 | $ 170.8 |
Construction in progress | $ 51 | $ 55.4 |
Leases - Narratives (Details)
Leases - Narratives (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Minimum | |
Lessee, Lease, Description | |
Weighted average remaining lease term (in years) | 1 year |
Operating lease renewal term (in years) | 3 years |
Maximum | |
Lessee, Lease, Description | |
Weighted average remaining lease term (in years) | 11 years |
Operating lease renewal term (in years) | 5 years |
Leases - Balance Sheet Location
Leases - Balance Sheet Location (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
ROU assets | $ 17,901 |
Lease liabilities | |
Current | 3,037 |
Noncurrent | 16,094 |
Total lease liabilities | $ 19,131 |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 3,966 |
Short-term lease cost | 348 |
Variable lease cost | 1,607 |
Total lease cost | $ 5,921 |
Leases - Cash Flow and Non-cash
Leases - Cash Flow and Non-cash Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities | $ 5,420 |
Operating lease ROU assets obtained in exchange for new lease liabilities | $ 2,247 |
Leases - Other Supplemental Inf
Leases - Other Supplemental Information (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term (in years) | 8 years 2 months 12 days |
Weighted average discount rate (percent) | 5.30% |
Leases - Maturity Schedule (Det
Leases - Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Lease Liabilities, Payments Due | ||
2020 | $ 3,651 | |
2021 | 3,715 | |
2022 | 2,615 | |
2023 | 2,310 | |
2024 | 1,919 | |
Thereafter | 9,611 | |
Total lease payments | 23,821 | |
Less: Interest | (4,690) | |
Total lease liabilities under ASC 842 Leases | $ 19,131 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity | ||
2019 | $ 4,317 | |
2020 | 3,980 | |
2021 | 3,562 | |
2022 | 2,433 | |
2023 | 2,170 | |
Thereafter | 11,935 | |
Total lease liabilities under ASC 840 Leases | $ 28,397 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 185,017 | $ 171,564 |
Accumulated Amortization | (107,546) | (119,194) |
Customer-related (10-25 year life) | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 147,244 | 107,008 |
Accumulated Amortization | $ (76,176) | (69,678) |
Customer-related (10-25 year life) | Minimum | ||
Finite-Lived Intangible Assets | ||
Useful life | 10 years | |
Customer-related (10-25 year life) | Maximum | ||
Finite-Lived Intangible Assets | ||
Useful life | 25 years | |
Contract-based (5-7 year life) | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 37,773 | 64,556 |
Accumulated Amortization | $ (31,370) | $ (49,516) |
Contract-based (5-7 year life) | Minimum | ||
Finite-Lived Intangible Assets | ||
Useful life | 5 years | |
Contract-based (5-7 year life) | Maximum | ||
Finite-Lived Intangible Assets | ||
Useful life | 7 years |
Intangible Assets, net - Deprec
Intangible Assets, net - Depreciation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 15.3 | $ 16.5 | $ 17.8 |
Intangible Assets, net - Estima
Intangible Assets, net - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 15,675 | |
2021 | 11,416 | |
2022 | 9,078 | |
2023 | 7,225 | |
2024 | 6,136 | |
Thereafter | 27,941 | |
Total | $ 77,471 | $ 52,370 |
Contract Costs (Details)
Contract Costs (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue | |||
Contract costs, net | $ 42,927,000 | $ 39,020,000 | |
Capitalized contract, term | 38 months | ||
Amortization of contract costs | $ 23,330,000 | 14,939,000 | $ 0 |
Impairment loss in relation to costs capitalized | 0 | 0 | |
Sales commissions | |||
Disaggregation of Revenue | |||
Contract costs, net | 4,800,000 | 4,200,000 | |
Amortization of contract costs | 2,600,000 | 1,500,000 | |
Freight and mobilization | |||
Disaggregation of Revenue | |||
Contract costs, net | 38,100,000 | 34,800,000 | |
Amortization of contract costs | $ 20,700,000 | $ 13,400,000 |
Hosting Arrangements Hosting Ar
Hosting Arrangements Hosting Arrangements (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Capitalized implementation costs | $ 5.5 | $ 0.4 |
Accrued Liabilities Accrued L_2
Accrued Liabilities Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued salaries and other benefits | $ 19,300 | $ 24,252 |
Accrued income and other taxes | 11,019 | 11,820 |
Accrued interest | 16,462 | 11,999 |
Derivative liability - current | 593 | 0 |
Other accrued liabilities | 20,471 | 30,926 |
Accrued liabilities | $ 67,845 | $ 78,997 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 20, 2019 | Nov. 08, 2019 | Mar. 21, 2019 | Dec. 31, 2018 | Apr. 26, 2018 | Apr. 30, 2014 |
Debt Instrument | |||||||
Long-term debt | $ 1,842,549 | $ 1,529,501 | |||||
2028 Notes | Senior Notes | |||||||
Debt Instrument | |||||||
Long term debt gross | 500,000 | 0 | |||||
Less: Deferred financing costs, net of amortization | (8,090) | $ (8,200) | 0 | ||||
Long-term debt | 491,910 | 0 | |||||
2027 Notes | Senior Notes | |||||||
Debt Instrument | |||||||
Long term debt gross | 500,000 | 0 | |||||
Less: Deferred financing costs, net of amortization | (7,999) | $ (8,800) | 0 | ||||
Long-term debt | 492,001 | 0 | |||||
2022 Notes | Senior Notes | |||||||
Debt Instrument | |||||||
Long term debt gross | 350,000 | 350,000 | |||||
Less: Debt discount, net of amortization | (2,046) | (2,766) | $ (5,700) | ||||
Less: Deferred financing costs, net of amortization | (2,316) | (3,133) | |||||
Long-term debt | 345,638 | 344,101 | |||||
2021 Notes | Senior Notes | |||||||
Debt Instrument | |||||||
Long term debt gross | 0 | 350,000 | |||||
Less: Debt discount, net of amortization | 0 | (1,789) | |||||
Less: Deferred financing costs, net of amortization | 0 | (2,311) | |||||
Long-term debt | 0 | 345,900 | |||||
Revolving Credit Facility | |||||||
Debt Instrument | |||||||
Less: Deferred financing costs, net of amortization | $ (6,400) | $ (3,300) | |||||
Revolving Credit Facility | Credit Facility | |||||||
Debt Instrument | |||||||
Long-term debt | $ 513,000 | $ 839,500 |
Long-Term Debt Long-Term Debt -
Long-Term Debt Long-Term Debt - Credit Facility (Details) - USD ($) | Mar. 30, 2017 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 08, 2019 | Apr. 26, 2018 |
Line of Credit Facility | ||||||||||||||
Repayments of long-term debt | $ 2,071,750,000 | $ 605,636,000 | $ 1,270,194,000 | |||||||||||
Debt extinguishment loss | $ 0 | $ 0 | $ 3,653,000 | $ 0 | $ 0 | $ 0 | $ 2,450,000 | $ 0 | 3,653,000 | $ 2,450,000 | 291,000 | |||
Revolving Credit Facility | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Capitalized debt issuance cost | $ 6,400,000 | $ 3,300,000 | ||||||||||||
Revolving Credit Facility | Credit facility | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Maximum borrowing capacity | 1,250,000,000 | 1,100,000,000 | 1,250,000,000 | 1,250,000,000 | ||||||||||
Line of credit outstanding | $ 13,700,000 | $ 13,700,000 | ||||||||||||
Debt instrument, variable rate (percent) | 2.50% | |||||||||||||
Weighted average interest rate (percent) | 4.30% | 5.40% | 4.30% | 5.40% | ||||||||||
Undrawn capacity under revolving credit facility | $ 723,300,000 | $ 723,300,000 | ||||||||||||
Change in borrowing capacity | $ 250,000,000 | |||||||||||||
Line of credit facility, commitment fee (percent) | 0.375% | |||||||||||||
Commitment fee amount | $ 1,900,000 | $ 2,100,000 | $ 2,100,000 | |||||||||||
Maximum consolidated cash balance | 50,000,000 | 50,000,000 | ||||||||||||
Payments for debt issuance costs | $ 14,900,000 | |||||||||||||
Revolving Credit Facility | Credit facility | Maximum | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Undrawn capacity under revolving credit facility | $ 669,700,000 | 669,700,000 | ||||||||||||
Revolving Credit Facility | Credit facility | Swing Line | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Change in borrowing capacity | $ 50,000,000 | |||||||||||||
Revolving Credit Facility | Partnership former credit facility | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Repayments of long-term debt | 648,400,000 | |||||||||||||
Debt issuance cost written off | 600,000 | |||||||||||||
Debt extinguishment loss | $ 300,000 | |||||||||||||
Letter of Credit | Credit facility | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Maximum borrowing capacity | $ 25,000,000 | $ 50,000,000 | ||||||||||||
Line of Credit | Credit facility | LIBOR | Minimum | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Debt instrument, variable rate (percent) | 2.00% | |||||||||||||
Line of Credit | Credit facility | LIBOR | Maximum | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Debt instrument, variable rate (percent) | 2.75% | |||||||||||||
Line of Credit | Credit facility | Base Rate | Minimum | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Debt instrument, variable rate (percent) | 1.00% | |||||||||||||
Line of Credit | Credit facility | Base Rate | Maximum | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Debt instrument, variable rate (percent) | 1.75% | |||||||||||||
Line of Credit | Credit facility | Federal Funds Rate | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Debt instrument, interest margin added to variable rate | 0.50% | |||||||||||||
Line of Credit | Credit facility | One-month LIBOR | ||||||||||||||
Line of Credit Facility | ||||||||||||||
Debt instrument, interest margin added to variable rate | 1.00% |
Long-Term Debt - Debt Ratios (D
Long-Term Debt - Debt Ratios (Details) - Revolving Credit Facility | 6 Months Ended | 12 Months Ended | 53 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | Nov. 30, 2024 | |
Line of Credit Facility | |||
Total interest to EBITDA covenant | 2.5 | ||
Maximum senior secured debt to Adjusted EBITDA | 3.5 | ||
Total Debt to EBITDA ratio | 5.75 | ||
Forecasted | |||
Line of Credit Facility | |||
Total Debt to EBITDA ratio | 5.50 | 5.25 | |
Forecasted | Conditional Event | |||
Line of Credit Facility | |||
Total Debt to EBITDA ratio | 5.5 |
Long-Term Debt - Archrock Credi
Long-Term Debt - Archrock Credit Facility (Details) - USD ($) $ in Thousands | Apr. 26, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility | ||||||||||||
Repayments of long-term debt | $ 2,071,750 | $ 605,636 | $ 1,270,194 | |||||||||
Debt extinguishment loss | $ 0 | $ 0 | $ 3,653 | $ 0 | $ 0 | $ 0 | $ 2,450 | $ 0 | $ 3,653 | 2,450 | 291 | |
Terminated Credit Facility | Revolving Credit Facility | ||||||||||||
Line of Credit Facility | ||||||||||||
Repayments of long-term debt | $ 63,200 | |||||||||||
Line of credit outstanding | 15,400 | |||||||||||
Debt extinguishment loss | $ 2,500 | |||||||||||
Commitment fee amount | $ 200 | $ 700 |
Long-Term Debt Long-Term Debt_2
Long-Term Debt Long-Term Debt - Notes (Details) - USD ($) | Dec. 20, 2019 | Apr. 05, 2019 | Mar. 21, 2019 | Apr. 30, 2014 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument | |||||||||||||||
Borrowings of long-term debt | $ 2,395,250,000 | $ 714,830,000 | $ 1,242,000,000 | ||||||||||||
Repayments of long-term debt | 2,071,750,000 | 605,636,000 | 1,270,194,000 | ||||||||||||
Interest paid, net of capitalized amounts | 97,451,000 | 86,758,000 | 78,891,000 | ||||||||||||
Debt extinguishment loss | $ 0 | $ 0 | $ 3,653,000 | $ 0 | $ 0 | $ 0 | $ 2,450,000 | $ 0 | 3,653,000 | 2,450,000 | $ 291,000 | ||||
Senior Notes | 2028 Notes | |||||||||||||||
Debt Instrument | |||||||||||||||
Principal amount | $ 500,000,000 | ||||||||||||||
Interest rate (as a percent) | 6.25% | ||||||||||||||
Borrowings of long-term debt | $ 491,800,000 | ||||||||||||||
Deferred finance cost | $ 8,200,000 | 8,090,000 | 0 | 8,090,000 | 0 | ||||||||||
Senior Notes | 2027 Notes | |||||||||||||||
Debt Instrument | |||||||||||||||
Principal amount | $ 500,000,000 | ||||||||||||||
Interest rate (as a percent) | 6.875% | ||||||||||||||
Borrowings of long-term debt | $ 491,200,000 | ||||||||||||||
Deferred finance cost | $ 8,800,000 | 7,999,000 | 0 | 7,999,000 | 0 | ||||||||||
Senior Notes | 2022 Notes | |||||||||||||||
Debt Instrument | |||||||||||||||
Principal amount | $ 350,000,000 | ||||||||||||||
Interest rate (as a percent) | 6.00% | ||||||||||||||
Deferred finance cost | 2,316,000 | 3,133,000 | 2,316,000 | 3,133,000 | |||||||||||
Unamortized debt issuance cost | $ 5,700,000 | 2,046,000 | 2,766,000 | 2,046,000 | 2,766,000 | ||||||||||
Debt instrument effective interest rate (percentage) | 6.25% | ||||||||||||||
Senior Notes | 2022 Notes | Debt Instrument, Redemption, Period One | |||||||||||||||
Debt Instrument | |||||||||||||||
Redemption rate | 101.50% | ||||||||||||||
Senior Notes | 2022 Notes | Debt Instrument, Redemption, Period Two | |||||||||||||||
Debt Instrument | |||||||||||||||
Redemption rate | 100.00% | ||||||||||||||
Senior Notes | 2021 Notes | |||||||||||||||
Debt Instrument | |||||||||||||||
Deferred finance cost | 0 | 2,311,000 | 0 | 2,311,000 | |||||||||||
Unamortized debt issuance cost | $ 0 | $ 1,789,000 | 0 | $ 1,789,000 | |||||||||||
Redemption rate | 100.00% | ||||||||||||||
Repayments of long-term debt | $ 350,000,000 | ||||||||||||||
Interest paid, net of capitalized amounts | $ 200,000 | ||||||||||||||
Debt extinguishment loss | $ 3,700,000 |
Long-Term Debt Long-Term Debt_3
Long-Term Debt Long-Term Debt - Debt Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 30, 2014 |
Long-term Debt, Fiscal Year Maturity | |||
2020 | $ 0 | ||
2021 | 0 | ||
2022 | 350,000 | ||
2023 | 0 | ||
2024 | 513,000 | ||
Long-term debt maturities through 2024 | 863,000 | ||
Senior Notes | 2022 Notes | |||
Long-term Debt, Fiscal Year Maturity | |||
Unamortized debt issuance cost | 2,046 | $ 2,766 | $ 5,700 |
Deferred finance cost | $ 2,316 | $ 3,133 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | $ 841,574 | $ 735,618 | $ 684,928 |
Merger-related adjustments | 0 | 5,670 | 0 |
Total other comprehensive income (loss), net of tax | (7,160) | 8,581 | 7,498 |
Ending balance | 1,085,963 | 841,574 | 735,618 |
Adjustment related to TCJA | 300 | ||
Accumulated Other Comprehensive Loss | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | 5,773 | 1,197 | (1,678) |
Gain (loss) recognized in other comprehensive income (loss), net of tax provision (benefit) of $(1,425), $169 and $793, respectively | (5,360) | (659) | 1,910 |
(Gain) loss reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax provision (benefit) of $478, $185 and $(520), respectively (1) | (1,800) | (435) | 965 |
Merger-related adjustments | 0 | 5,670 | 0 |
Total other comprehensive income (loss), net of tax | (7,160) | 4,576 | 2,875 |
Ending balance | (1,387) | 5,773 | 1,197 |
Gain recognized in other comprehensive income, tax expense (benefit) | (1,425) | 169 | 793 |
Gain (loss) reclassified from accumulated other comprehensive loss, tax expense (benefit) | $ 478 | $ 185 | $ (520) |
Equity - Narratives (Details)
Equity - Narratives (Details) $ / shares in Units, $ in Thousands | Feb. 14, 2020USD ($) | Jan. 23, 2020$ / shares | Aug. 01, 2019USD ($)shares | Apr. 26, 2018USD ($)shares | Apr. 25, 2018 | Aug. 31, 2017USD ($)shares | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) |
Class of Stock | |||||||||||||||||||||
Ownership percentage held by reporting entity | 57.00% | ||||||||||||||||||||
Deferred tax assets net | $ 131,521 | $ 51,953 | $ 131,521 | $ 51,953 | |||||||||||||||||
Deferred tax asset valuation allowances | 822 | 45,439 | 822 | 45,439 | |||||||||||||||||
Merger-related costs | 441 | $ 4,905 | $ 2,687 | $ 180 | 169 | $ 182 | $ 5,686 | $ 4,125 | 8,213 | 10,162 | $ 275 | ||||||||||
Dividends paid to Archrock stockholders | $ 22,031 | $ 22,062 | $ 17,206 | $ 17,231 | $ 17,156 | $ 17,114 | $ 15,486 | $ 8,532 | $ 8,536 | $ 8,536 | $ 8,534 | $ 8,458 | 78,530 | 58,288 | 34,063 | ||||||
Subsequent Event | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Dividends declared (usd per share) | $ / shares | $ 0.145 | ||||||||||||||||||||
Dividends paid to Archrock stockholders | $ 22,200 | ||||||||||||||||||||
Limited Partner Units | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Shares issued (shares) | shares | 4,600,000 | ||||||||||||||||||||
Shares issued, value | $ 60,300 | ||||||||||||||||||||
Limited Partner Units | Parent Company | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Net proceeds from sale of partnership units, net of tax | $ 1,300 | ||||||||||||||||||||
General Partner | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Partners' capital accounts (units) | shares | 93,163 | ||||||||||||||||||||
General Partner | Parent Company | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
General partner units interest (percent) | 2.00% | ||||||||||||||||||||
Over-Allotment | Limited Partner Units | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Shares issued (shares) | shares | 600,000 | ||||||||||||||||||||
Archrock | Archrock, Inc | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Ownership interest percentage | 43.00% | ||||||||||||||||||||
Elite Acquisition | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Merger-related costs | 7,800 | ||||||||||||||||||||
Elite Acquisition | Common Stock | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Shares issued as compensation for asset acquisition (shares) | shares | 21,700,000 | ||||||||||||||||||||
Issuance of Archrock common stock pursuant to Elite Acquisition, net of tax | $ 225,900 | ||||||||||||||||||||
Partnership Merger | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Deferred tax assets acquired | $ 156,000 | ||||||||||||||||||||
Deferred tax assets net | 52,200 | ||||||||||||||||||||
Deferred tax asset valuation allowances | $ 50,800 | ||||||||||||||||||||
Adjustments to additional paid in capital, deferred tax asset | 105,200 | ||||||||||||||||||||
Merger-related costs | $ 500 | $ 10,200 | $ 300 | ||||||||||||||||||
Partnership Merger | Common Stock | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Business acquisition, shares issued (shares) | shares | 57,600,000 | ||||||||||||||||||||
Business acquisition, shares acquired (shares) | shares | 41,200,000 | ||||||||||||||||||||
Share conversion rate (per share) | 1.40 | ||||||||||||||||||||
Value of shares used as consideration | $ 625,300 | ||||||||||||||||||||
Partnership Merger | Common Stock | |||||||||||||||||||||
Class of Stock | |||||||||||||||||||||
Business acquisition, shares issued (shares) | shares | 57,634,005 |
Equity - Effects of Change in O
Equity - Effects of Change in Ownership (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||||||
Net income (loss) attributable to Archrock stockholders | $ 12,968 | $ 9,974 | $ 1,937 | $ (3,816) | $ 97,330 | $ 21,063 | $ 18,953 |
Increase in Archrock stockholders’ additional paid-in capital for purchase of Partnership common units | 56,845 | 17,638 | |||||
Change from net loss attributable to Archrock stockholders and transfers from noncontrolling interest | $ 77,908 | $ 36,591 |
Equity - Cash Dividends (Detail
Equity - Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Distributions | |||||||||||||||
Dividend declared per common stock (usd per share) | $ 0.145 | $ 0.145 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.120 | $ 0.554 | $ 0.5040 | $ 0.4800 |
Total Dividends | $ 22,031 | $ 22,062 | $ 17,206 | $ 17,231 | $ 17,156 | $ 17,114 | $ 15,486 | $ 8,532 | $ 8,536 | $ 8,536 | $ 8,534 | $ 8,458 | $ 78,530 | $ 58,288 | $ 34,063 |
Revenue From Contracts with C_3
Revenue From Contracts with Customers - Disaggregate of Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Disaggregation of Revenue | |||||||||||
Revenue | $ 245,987 | $ 244,949 | $ 238,390 | $ 236,159 | $ 233,159 | $ 232,372 | $ 226,870 | $ 212,040 | $ 965,485 | $ 904,441 | $ 794,655 |
Number of reportable segments | segment | 2 | ||||||||||
Contract Operations | Transferred at Point in Time | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | $ 7,900 | 6,600 | |||||||||
Contract Operations | Contract operations | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | 771,539 | 672,536 | $ 610,921 | ||||||||
Contract Operations | 0 - 1,000 horsepower per unit | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | 259,985 | 241,810 | |||||||||
Contract Operations | 1,001 - 1,500 horsepower per unit | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | 316,082 | 276,775 | |||||||||
Contract Operations | Over 1,500 horsepower per unit | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | 191,510 | 149,783 | |||||||||
Contract Operations | Other | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | 3,962 | 4,168 | |||||||||
Aftermarket Services | Aftermarket Services | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | 193,946 | 231,905 | |||||||||
Aftermarket Services | Services | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | 122,076 | 142,476 | |||||||||
Aftermarket Services | Services | Adjustments | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | (900) | ||||||||||
Aftermarket Services | OTC parts and components sales | |||||||||||
Disaggregation of Revenue | |||||||||||
Revenue | $ 71,870 | $ 89,429 |
Revenue From Contracts with C_4
Revenue From Contracts with Customers - Remaining Performance Obligation (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 469,582 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 288,204 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 131,816 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 43,808 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 4,941 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 813 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue From Contracts with C_5
Revenue From Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue | |||
Accounts receivable, trade | $ 144,865 | $ 147,985 | |
Contract with customer | 11,400 | 17,100 | |
Deferred revenue | 36,578 | 36,571 | $ 730 |
Revenue from contract liability | (42,268) | (28,428) | $ 0 |
Trade receivable | |||
Disaggregation of Revenue | |||
Accounts receivable, trade | $ 139,400 | $ 142,100 |
Long-Lived Asset Impairment (De
Long-Lived Asset Impairment (Details) hp in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)compressor_unithp | Dec. 31, 2018USD ($)compressor_unithp | Dec. 31, 2017USD ($)compressor_unithp | |
Impaired Long-Lived Assets Held and Used | |||||||||||
Long-lived asset impairment | $ 25,842 | $ 7,097 | $ 8,632 | $ 3,092 | $ 9,804 | $ 6,660 | $ 6,953 | $ 4,710 | $ 44,663 | $ 28,127 | $ 29,142 |
Idle compressor units | |||||||||||
Impaired Long-Lived Assets Held and Used | |||||||||||
Idle compressor units retired from the active fleet (compressors) | compressor_unit | 975 | 310 | 325 | ||||||||
Horsepower of idle compressor units retired from the active fleet (horsepower) | hp | 170 | 115 | 100 | ||||||||
Long-lived asset impairment | $ 44,663 | $ 28,127 | $ 26,287 |
Long-Lived Asset Impairment Lon
Long-Lived Asset Impairment Long-Lived Asset Impairment - Narratives (Details) hp in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)hp | Dec. 31, 2018USD ($)hp | Dec. 31, 2017USD ($)hp | |
Impaired Long-Lived Assets Held and Used | |||||||||||
Long-lived asset impairment | $ 25,842 | $ 7,097 | $ 8,632 | $ 3,092 | $ 9,804 | $ 6,660 | $ 6,953 | $ 4,710 | $ 44,663 | $ 28,127 | $ 29,142 |
Corporate Office Relocation | |||||||||||
Impaired Long-Lived Assets Held and Used | |||||||||||
Remaining lease and relocation cost | 2,113 | ||||||||||
Asset Write Off | Corporate Office Relocation | |||||||||||
Impaired Long-Lived Assets Held and Used | |||||||||||
Remaining lease and relocation cost | 795 | ||||||||||
Idle compressor units | |||||||||||
Impaired Long-Lived Assets Held and Used | |||||||||||
Long-lived asset impairment | $ 44,663 | $ 28,127 | $ 26,287 | ||||||||
Horsepower of idle compressor units retired from the active fleet (horsepower) | hp | 170 | 115 | 100 | ||||||||
Physical Asset Observations And Other Events | |||||||||||
Impaired Long-Lived Assets Held and Used | |||||||||||
Long-lived asset impairment | $ 2,900 | ||||||||||
Horsepower of idle compressor units retired from the active fleet (horsepower) | hp | 7 |
Restructuring and Other Charg_3
Restructuring and Other Charges - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring and Other Charges | |||
Restructuring and other charges | $ 0 | $ 0 | $ 1,386 |
Spin-off | |||
Restructuring and Other Charges | |||
Restructuring and other charges | $ 1,400 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Rollforward of Accrued Liability Balance Related to Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Charges Accrual | |||
Beginning balance | $ 0 | $ 712 | |
Additions for costs expensed | $ 0 | $ 0 | 1,386 |
Less non-cash expense | (997) | ||
Reductions for payments | (1,101) | ||
Ending balance | $ 0 |
Corporate Office Relocation - A
Corporate Office Relocation - Accrual Rollforward (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Corporate Office Relocation | |
Ending balance | $ 78,997 |
Corporate Office Relocation | |
Corporate Office Relocation | |
Beginning balance | 583 |
Reductions for payments | (583) |
Ending balance | $ 0 |
Corporate Office Relocation - C
Corporate Office Relocation - Contract Termination and Relocation (Details) - Corporate Office Relocation $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Corporate Office Relocation | |
Remaining lease and relocation cost | $ 2,113 |
Remaining lease costs | |
Corporate Office Relocation | |
Remaining lease and relocation cost | 1,258 |
Impairment of leasehold improvements and furniture and fixtures | |
Corporate Office Relocation | |
Remaining lease and relocation cost | 795 |
Relocation costs | |
Corporate Office Relocation | |
Remaining lease and relocation cost | $ 60 |
Income Taxes Income Taxes - Nar
Income Taxes Income Taxes - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 26, 2018 | Dec. 31, 2016 | |
Operating Loss Carryforwards | ||||||
Effective income tax rate (percent) | (67.00%) | 17.40% | 143.30% | |||
Remeasurement of uncertain tax positions | $ 3,700 | |||||
Deferred tax assets | $ 36,642 | $ 36,642 | $ 4,256 | |||
Deferred tax liabilities | 1,289 | 1,289 | 2,842 | |||
Deferred tax assets net | 131,521 | 131,521 | 51,953 | |||
Valuation allowances | 822 | 822 | 45,439 | |||
Change in deferred tax asset valuation allowance | (39,600) | 50,800 | ||||
Tax benefit from adjustments to valuation allowance | 50,200 | |||||
Increase in deferred tax assets | 50,200 | |||||
Federal tax credit carryforward | 1,500 | 1,500 | ||||
Unrecognized tax benefits | 18,453 | 18,453 | 19,560 | 21,400 | $ 9,665 | |
Unrecognized tax benefits that would impact tax rate if recognized | 3,200 | 3,200 | 6,900 | 8,000 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 2,100 | 2,100 | 2,200 | 1,600 | ||
Income tax interest and penalty expenses | (100) | 700 | 1,400 | |||
Amount refunded | 2,400 | 2,400 | 1,700 | |||
Decrease in uncertain tax positions | 4,400 | 3,500 | ||||
Anticipated decrease to unrecognized tax benefits | 2,600 | 2,600 | ||||
Tax cuts and jobs act, income tax expense (benefit) | 53,400 | |||||
Spinoff | Exterran Corporation | ||||||
Operating Loss Carryforwards | ||||||
Indemnification asset | 8,508 | 8,508 | 7,063 | |||
Domestic | ||||||
Operating Loss Carryforwards | ||||||
Operating loss carryforwards | 506,700 | 506,700 | ||||
Operating loss carryforward not subject to expiration | 267,400 | 267,400 | ||||
State | ||||||
Operating Loss Carryforwards | ||||||
Operating loss carryforwards | 202,100 | 202,100 | ||||
Operating loss carryforward not subject to expiration | 54,300 | 54,300 | ||||
NOL valuation allowance | 800 | 800 | 200 | |||
Net Operating Loss Carryforward | ||||||
Operating Loss Carryforwards | ||||||
Change in deferred tax asset valuation allowance | 600 | |||||
Other comprehensive income | ||||||
Operating Loss Carryforwards | ||||||
Tax cuts and jobs act, income tax expense (benefit) | 300 | |||||
Continuing Operations | ||||||
Operating Loss Carryforwards | ||||||
Increase in deferred tax assets | 44,600 | |||||
Tax cuts and jobs act, income tax expense (benefit) | 57,700 | |||||
Discontinued Operations | ||||||
Operating Loss Carryforwards | ||||||
Increase in deferred tax assets | 5,600 | |||||
Unrecognized tax benefits that would impact tax rate if recognized | $ 8,300 | $ 8,300 | $ 6,900 | 6,400 | ||
Tax cuts and jobs act, income tax expense (benefit) | $ 4,600 | |||||
Partnership Merger | ||||||
Operating Loss Carryforwards | ||||||
Deferred tax assets acquired | $ 156,000 | |||||
Deferred tax assets net | 52,200 | |||||
Valuation allowances | 50,800 | |||||
Partnership Merger | Continuing Operations | ||||||
Operating Loss Carryforwards | ||||||
Deferred tax assets net | 46,600 | |||||
Valuation allowances | 45,200 | |||||
Partnership Merger | Discontinued Operations | ||||||
Operating Loss Carryforwards | ||||||
Deferred tax assets net | 5,600 | |||||
Valuation allowances | $ 5,600 |
Income Taxes Income Taxes - Cur
Income Taxes Income Taxes - Current and Deferred Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax provision (benefit): | |||
U.S. federal | $ 75 | $ 0 | $ (1,495) |
State | 377 | 912 | 172 |
Total current | 452 | 912 | (1,323) |
Deferred tax provision (benefit): | |||
U.S. federal | (35,597) | 6,197 | (67,443) |
State | (4,000) | (959) | 7,683 |
Total deferred | (39,597) | 5,238 | (59,760) |
Provision for (benefit from) income taxes | $ (39,145) | $ 6,150 | $ (61,083) |
Income Taxes Income Taxes - Rec
Income Taxes Income Taxes - Reconciliation of Effective Tax Rate to Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation | |||
Income taxes at U.S. federal statutory rate | $ 12,276 | $ 7,415 | $ (14,917) |
Net state income taxes | 1,172 | 1,570 | (4,693) |
Tax credits | (1,295) | (244) | 0 |
Tax Cuts and Jobs Act | 0 | 0 | (53,442) |
Noncontrolling interest | 0 | (1,793) | (1,091) |
Unrecognized tax benefits | (1,958) | (1,443) | 9,566 |
Valuation allowances and write off of tax attributes (5) | (50,219) | (58) | 247 |
Indemnification revenue / expense | 42 | (44) | 692 |
Executive compensation limitation | 1,102 | 977 | 2,433 |
Stock | 66 | (455) | (858) |
Other | (331) | 225 | 980 |
Provision for (benefit from) income taxes | $ (39,145) | $ 6,150 | $ (61,083) |
Income Taxes Income Taxes - Sum
Income Taxes Income Taxes - Summary of Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 116,378 | $ 82,259 |
Accrued liabilities | 3,486 | 5,726 |
Other | 12,479 | 9,407 |
Subtotal | 132,343 | 97,392 |
Valuation allowances | (822) | (45,439) |
Total deferred tax assets | 131,521 | 51,953 |
Deferred tax liabilities: | ||
Property, plant and equipment | (6,440) | (10,763) |
Basis difference in the Partnership | (81,645) | (35,604) |
Other | (8,083) | (4,172) |
Total deferred tax liabilities | (96,168) | (50,539) |
Net deferred tax asset | $ 35,353 | $ 1,414 |
Income Taxes Income Taxes - Unr
Income Taxes Income Taxes - Unrecognized Tax Benefit Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 19,560 | $ 21,400 | $ 9,665 |
Additions based on tax positions related to current year | 2,227 | 1,893 | 2,002 |
Additions based on tax positions related to prior years | 2,047 | 450 | 9,887 |
Reductions based on settlement refunds from government authorities | (4,414) | (3,461) | (154) |
Reductions based on tax positions related to prior years | (51) | (20) | 0 |
Reductions based on lapse of statute of limitations | (916) | (702) | 0 |
Ending balance | $ 18,453 | $ 19,560 | $ 21,400 |
Earnings per Share - Net Income
Earnings per Share - Net Income Attributable to Archrock Common Stockholders (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of net income attributable to Exterran common stockholders used in the calculation of basic and diluted income per common share | |||||||
Net income from continuing operations attributable to Archrock stockholders | $ 97,603 | $ 21,063 | $ 19,007 | ||||
Income (loss) from discontinued operations, net of tax | (273) | 0 | (54) | ||||
Net income attributable to Archrock stockholders | $ 12,968 | $ 9,974 | $ 1,937 | $ (3,816) | 97,330 | 21,063 | 18,953 |
Less: Net income attributable to participating securities | (1,348) | (815) | (681) | ||||
Net Income (Loss) Available to Common Stockholders, Basic | $ 95,982 | $ 20,248 | $ 18,272 | ||||
Potential shares of common stock included in computing diluted income attributable to Exterran common stockholders per common share | |||||||
Weighted average common shares outstanding including participating securities | 139,317 | 110,843 | 70,860 | ||||
Less: Weighted average participating securities outstanding | (1,825) | (1,538) | (1,308) | ||||
Weighted average common shares outstanding used in basic net income per common share | 137,492 | 109,305 | 69,552 | ||||
Net dilutive potential common shares issuable: | |||||||
Weighted average common shares outstanding - used in diluted income (loss) per common share (in shares) | 137,528 | 109,421 | 69,664 | ||||
On exercise of options and vesting of performance-based restricted stock units | |||||||
Net dilutive potential common shares issuable: | |||||||
On exercise of options and vesting of restricted stock units (in shares) | 34 | 111 | 112 | ||||
On settlement of employee stock purchase plan shares | |||||||
Net dilutive potential common shares issuable: | |||||||
On exercise of options and vesting of restricted stock units (in shares) | 2 | 5 | 0 |
Earnings per Share - Anti-dilut
Earnings per Share - Anti-dilutive Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
On exercise of options where exercise price is greater than average market value for the period | |||
Anti-dilutive effect of the calculation of net dilutive potential shares of common stock issuable | |||
Net dilutive potential common shares issuable (shares) | 154 | 195 | 268 |
Derivatives - Interest Rate Ris
Derivatives - Interest Rate Risk (Details) - Derivatives designated as hedging instruments - USD ($) $ in Millions | Dec. 31, 2019 | Aug. 31, 2017 |
Interest rate swaps | ||
Notional Disclosures | ||
Notional amount of interest rate swaps | $ 400 | |
May 2020 | ||
Notional Disclosures | ||
Notional amount of interest rate swaps | 100 | |
March 2022 | ||
Notional Disclosures | ||
Notional amount of interest rate swaps | $ 300 | $ 300 |
Derivatives - Interest Rate R_2
Derivatives - Interest Rate Risk - Narratives (Details) - Derivatives designated as hedging instruments - USD ($) $ in Millions | Dec. 31, 2019 | Aug. 31, 2017 |
Interest rate swaps | ||
Derivatives | ||
Deferred pre-tax losses to be reclassified during next 12 months | $ 0.6 | |
Derivative average fixed interest rate | 1.80% | |
Notional amount of interest rate swaps | $ 400 | |
March 2022 | ||
Derivatives | ||
Notional amount of interest rate swaps | $ 300 | $ 300 |
Derivative liability | $ 0.7 |
Derivatives - Effect of Derivat
Derivatives - Effect of Derivative Instruments on Balance Sheet (Details) - Derivatives designated as hedging instruments - Interest rate swaps - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Asset (Liability) | ||
Derivative assets | $ 12 | $ 7,307 |
Derivative liability | (1,768) | 0 |
Other current assets | ||
Fair Value Asset (Liability) | ||
Derivative assets | 12 | 3,185 |
Other assets | ||
Fair Value Asset (Liability) | ||
Derivative assets | 0 | 4,122 |
Accrued liabilities | ||
Fair Value Asset (Liability) | ||
Derivative liability | (593) | 0 |
Other liabilities | ||
Fair Value Asset (Liability) | ||
Derivative liability | $ (1,175) | $ 0 |
Derivatives - Effect of Deriv_2
Derivatives - Effect of Derivative Instruments on Income Statement (Details) - Interest rate swaps - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effect of derivative instruments on results of operations | |||
Pre-tax gain (loss) recognized in other comprehensive income (loss) | $ (6,785) | $ 3,512 | $ 5,553 |
Interest expense | |||
Effect of derivative instruments on results of operations | |||
Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense | $ 2,278 | $ 617 | $ (3,209) |
Derivatives - Derivative Gain (
Derivatives - Derivative Gain (Loss) Recognized in Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effect of derivative instruments on results of operations | |||
Interest expense | $ (104,681) | $ (93,328) | $ (88,760) |
Accumulated Other Comprehensive Loss | Reclassification adjustments | |||
Effect of derivative instruments on results of operations | |||
Interest expense | $ 2,278 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - Level 2 - Recurring basis - Interest rate swaps - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value measurement of assets and liabilities | ||
Derivative asset | $ 12 | $ 7,307 |
Derivative liability | $ (1,768) | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Nonrecurring basis | Level 3 | ||
Valuation of our interest rate swaps and impaired assets | ||
Impaired long-lived assets | $ 5.9 | $ 2.3 |
Impaired long-lived assets | ||
Valuation of our interest rate swaps and impaired assets | ||
Weighted average disposal period of impaired assets | 4 years |
- Fair Value of Debt (Details)
- Fair Value of Debt (Details) - Level 2 - Fixed rate debt - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,329,549 | $ 690,001 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,400,000 | $ 674,000 |
Stock-Based Compensation - Allo
Stock-Based Compensation - Allocated Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Total stock-based compensation expense | $ 10,441 | $ 8,484 | $ 10,040 |
Equity awards | |||
Stock-Based Compensation | |||
Total stock-based compensation expense | 8,105 | 7,388 | 8,460 |
Liability awards | |||
Stock-Based Compensation | |||
Total stock-based compensation expense | $ 2,336 | $ 1,096 | $ 1,580 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Incentive Plan - Narratives (Details) - USD ($) $ in Thousands | Apr. 26, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 30, 2013 |
Stock-Based Compensation | |||||
Treasury stock purchased | $ 2,007 | $ 1,759 | $ 2,788 | ||
2013 Plan | |||||
Stock-Based Compensation | |||||
Maximum number of shares available under the Plan | 10,100,000 | ||||
Additional shares authorized (shares) | 2,832,994 | ||||
Treasury stock purchased, shares | 212,080 | ||||
Treasury stock purchased | $ 2,000 | ||||
2013 Plan | On the settlement of employee stock purchase plan shares | |||||
Stock-Based Compensation | |||||
Number of shares counted by each award | 1 | ||||
2013 Plan | Stock-settled award other than an option, stock appreciation right or award for which the recipient pays intrinsic value | |||||
Stock-Based Compensation | |||||
Number of shares counted by each award | 1.75 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Activity - Narratives (Details) - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-Based Compensation | |||
Intrinsic value of options exercised during the period | $ 0 | ||
On the settlement of employee stock purchase plan shares | |||
Stock-Based Compensation | |||
Granted (shares) | 0 | 0 | 0 |
Intrinsic value of options exercised during the period | $ 800,000 | $ 300,000 | |
On the settlement of employee stock purchase plan shares | Maximum | |||
Stock-Based Compensation | |||
Expiration period | 7 years | ||
On the settlement of employee stock purchase plan shares | First anniversary vesting | |||
Stock-Based Compensation | |||
Vesting percentage | 33.33% | ||
On the settlement of employee stock purchase plan shares | Second anniversary vesting | |||
Stock-Based Compensation | |||
Vesting percentage | 33.33% | ||
On the settlement of employee stock purchase plan shares | Third anniversary vesting | |||
Stock-Based Compensation | |||
Vesting percentage | 33.33% | ||
Vesting period | 3 years |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock Options Activity (Details) - On the settlement of employee stock purchase plan shares $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Stock Options | |
Options outstanding at the beginning of the period (in shares) | shares | 154 |
Options outstanding at the end of the period (in shares) | shares | 154 |
Options exercisable at the end of the period (in shares) | shares | 154 |
Weighted Average Exercise Price Per Share | |
Options outstanding at the beginning of the period (usd per share) | $ / shares | $ 19.40 |
Options outstanding at end of period (usd per share) | $ / shares | 19.40 |
Options exercisable at the end of period (usd per share) | $ / shares | $ 19.40 |
Weighted Average Remaining Life | |
Outstanding at the end of the period | 7 months 6 days |
Exercisable at the end of the period | 7 months 2 days |
Aggregate Intrinsic Value | |
Outstanding at the end of the period (in dollars) | $ | $ 0 |
Intrinsic Value | $ | $ 0 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock, Restricted Stock Units, and Performance Units Activity - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Performance-based restricted stock units | |||
Stock-Based Compensation | |||
Dividend yield ( percent) | 0.00% | ||
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | |||
Unrecognized compensation | |||
Expected unrecognized compensation cost related to unvested awards (in dollars) | $ 13.7 | ||
Weighted-average period over which the expected unrecognized compensation cost related to unvested stock options will be recognized | 1 year 9 months 18 days | ||
Payments for vested shares | $ 1.3 | $ 1.1 | $ 1.8 |
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | First anniversary vesting | |||
Stock-Based Compensation | |||
Vesting percentage | 33.33% | ||
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | Second anniversary vesting | |||
Stock-Based Compensation | |||
Vesting percentage | 33.33% | ||
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | Third anniversary vesting | |||
Stock-Based Compensation | |||
Vesting percentage | 33.33% | ||
Vesting period | 3 years |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stock, Restricted Stock Units, and Performance Units Measurement Inputs (Details) - Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | ||
Remaining performance period as of grant date (in years) | 2 years 10 months 24 days | 2 years 9 months 18 days |
Risk free rate (percent) | 2.60% | 2.40% |
Grant-date fair value (usd per share) | $ 12,910 | $ 13,460 |
Stock-Based Compensation - Re_3
Stock-Based Compensation - Restricted Stock, Restricted Stock Units, and Performance Units Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted Average Grant Date Fair Value Per Share | |||
Additional paid-in capital | $ (3,412,509) | $ (3,177,982) | |
Reclassification as result of award modification | |||
Weighted Average Grant Date Fair Value Per Share | |||
Additional paid-in capital | $ 200 | ||
Restricted stock, restricted stock units, performance units, cash settled restricted stock units and cash settled performance units | |||
Shares | |||
Non-vested awards at the beginning of the period (in shares) | 1,728,000 | ||
Granted (in shares) | 1,404,000 | ||
Vested (in shares) | (957,000) | ||
Canceled (in shares) | (153,000) | ||
Non-vested awards at the end of the period (in shares) | 2,022,000 | 1,728,000 | |
Weighted Average Grant Date Fair Value Per Share | |||
Non-vested awards at the beginning of the period (usd per share) | $ 9.68 | ||
Granted (usd per share) | 10.01 | $ 9.66 | $ 12.95 |
Vested (usd per share) | 8.85 | ||
Canceled (usd per share) | 10.33 | ||
Non-vested awards at the end of the period (usd per share) | $ 10.25 | $ 9.68 | |
Fair value of vested shares | $ 9,000 | $ 8,200 | $ 10,800 |
Cash Settled Restricted Stock Units And Cash Settled Performance Units | |||
Shares | |||
Non-vested awards at the end of the period (in shares) | 376,000 | ||
Restricted Stock Restricted Stock Units And Performance Units | |||
Shares | |||
Non-vested awards at the end of the period (in shares) | 1,646,000 | ||
On exercise of options and vesting of performance-based restricted stock units | |||
Stock-based compensation | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Converted in Period | 99,631 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - On the settlement of employee stock purchase plan shares | 12 Months Ended |
Dec. 31, 2019USD ($)shares | |
Stock-Based Compensation | |
Maximum annual contribution per employee | $ | $ 25,000 |
Maximum annual contribution per employee, percent | 10.00% |
Maximum number of shares available under the Plan | 1,000,000 |
Non-vested awards at the end of the period (in shares) | 783,270 |
Purchase discount rate | 5.00% |
Minimum | |
Stock-Based Compensation | |
Percentage discount on per share fair market value of shares | 85.00% |
Maximum | |
Stock-Based Compensation | |
Percentage discount on per share fair market value of shares | 100.00% |
Stock-Based Compensation - Dire
Stock-Based Compensation - Directors Stock and Deferral Plan (Details) - Directors Stock And Deferral Plan - shares | Dec. 31, 2019 | Aug. 20, 2007 |
Stock-Based Compensation | ||
Maximum number of shares available under the Plan | 100,000 | |
Remaining shares available for purchase | 48,022 |
Stock-Based Compensation - Part
Stock-Based Compensation - Partnership Long Term Incentive Plan - Narratives (Details) - Partnership Phantom Units | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
First anniversary vesting | |
Stock-Based Compensation | |
Vesting percentage | 33.33% |
Second anniversary vesting | |
Stock-Based Compensation | |
Vesting percentage | 33.33% |
Third anniversary vesting | |
Stock-Based Compensation | |
Vesting percentage | 33.33% |
Vesting period | 3 years |
Partnership Long Term Incentive Plan | |
Stock-Based Compensation | |
Vested (in shares) | shares | 53,091 |
Vested (usd per share) | $ / shares | $ 11.24 |
Retirement Benefit Plan (Detail
Retirement Benefit Plan (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | 30 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||||
Employer match of employee contributions of first 1% of eligible compensation | 100.00% | ||||
Percentage of eligible compensation matched 100% by employer | 1.00% | ||||
Employer match of employee contributions of next 5% of eligible compensation | 50.00% | ||||
Percentage of eligible compensation matched by employer | 5.00% | ||||
Employer percentage match of employees contribution | 100.00% | ||||
Employer maximum contribution as a percentage of gross pay | 5.00% | ||||
Recognized matching contributions from retirement plan (in dollars) | $ 6.8 | $ 6.5 | $ 4.8 |
Commitments and Contingencies -
Commitments and Contingencies - Performance Bonds (Details) $ in Millions | Dec. 31, 2019USD ($) |
Performance bonds | |
Loss Contingencies | |
Maximum potential undiscounted payments | $ 2.3 |
Commitments and Contingencies_2
Commitments and Contingencies - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Loss contingency | ||
Accrued liability for the outcomes of non-income based tax audits | $ 4,500 | $ 2,500 |
Indemnification liability | 2,600 | 2,800 |
Loss Contingencies | ||
Benefit from tax audit | 11,300 | |
Tax refund receivable | 15,262 | $ 0 |
Accrued liabilities | ||
Loss Contingencies | ||
Accrued income taxes | 4,000 | |
Cost of sales excluding depreciation and amortization | ||
Loss Contingencies | ||
Benefit from tax audit | 1,800 | |
SG&A | ||
Loss Contingencies | ||
Benefit from tax audit | 8,900 | |
Interest expense | ||
Loss Contingencies | ||
Benefit from tax audit | 100 | |
Other income | ||
Loss Contingencies | ||
Benefit from tax audit | $ 500 |
Related Party Transactions Rela
Related Party Transactions Related Party Transactions - Narratives (Details) - USD ($) shares in Millions, $ in Millions | Aug. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Affiliated Entity | Hilcorp | ||||
Transactions related to the partnership | ||||
Revenue from related party transactions | $ 31.4 | $ 12 | $ 6.7 | |
Due from related party | $ 5.1 | $ 3.6 | ||
Affiliated Entity | Archrock, Inc | JDH Capital | ||||
Transactions related to the partnership | ||||
Ownership interest (percent) | 14.30% | |||
Elite Acquisition | Common Stock | Affiliated Entity | ||||
Transactions related to the partnership | ||||
Minimum ownership interest of outstanding shares required to elect a board of director (percent) | 7.50% | |||
Elite Acquisition | Common Stock | ||||
Transactions related to the partnership | ||||
Shares issued as compensation for asset acquisition (shares) | 21.7 |
Segments - Narratives (Details)
Segments - Narratives (Details) - segment | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | |||
Number of reportable segments | 2 | ||
Williams Partners | Customer Concentration Risk | Sales Revenue | |||
Disaggregation of Revenue | |||
Concentration risk (percent) | 8.00% | 11.00% | 13.00% |
Segments - Revenue and Gross Ma
Segments - Revenue and Gross Margin by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue and other financial information by reportable segment | |||||||||||
Revenue | $ 245,987 | $ 244,949 | $ 238,390 | $ 236,159 | $ 233,159 | $ 232,372 | $ 226,870 | $ 212,040 | $ 965,485 | $ 904,441 | $ 794,655 |
Gross margin | 509,247 | 440,074 | 375,733 | ||||||||
Capital expenditures | 385,198 | 319,102 | 221,693 | ||||||||
Contract Operations | Contract operations | |||||||||||
Revenue and other financial information by reportable segment | |||||||||||
Revenue | 771,539 | 672,536 | 610,921 | ||||||||
Aftermarket Services | Aftermarket Services | |||||||||||
Revenue and other financial information by reportable segment | |||||||||||
Revenue | 193,946 | 231,905 | |||||||||
Operating | |||||||||||
Revenue and other financial information by reportable segment | |||||||||||
Revenue | 965,485 | 904,441 | 794,655 | ||||||||
Gross margin | 509,247 | 440,074 | 375,733 | ||||||||
Capital expenditures | 383,364 | 313,159 | 215,080 | ||||||||
Operating | Contract Operations | |||||||||||
Revenue and other financial information by reportable segment | |||||||||||
Revenue | 771,539 | 672,536 | 610,921 | ||||||||
Gross margin | 474,279 | 399,523 | 347,916 | ||||||||
Capital expenditures | 374,650 | 307,048 | 211,651 | ||||||||
Operating | Aftermarket Services | |||||||||||
Revenue and other financial information by reportable segment | |||||||||||
Revenue | 193,946 | 231,905 | 183,734 | ||||||||
Gross margin | 34,968 | 40,551 | 27,817 | ||||||||
Capital expenditures | 8,714 | 6,111 | 3,429 | ||||||||
Other | |||||||||||
Revenue and other financial information by reportable segment | |||||||||||
Revenue | 0 | 0 | 0 | ||||||||
Gross margin | 0 | 0 | 0 | ||||||||
Capital expenditures | $ 1,834 | $ 5,943 | $ 6,613 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Assets to Total Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets | ||
Assets | $ 3,109,975 | $ 2,552,515 |
Assets associated with discontinued operations | 12,901 | 7,363 |
Operating | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | 2,983,556 | 2,462,764 |
Operating | Contract Operations | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | 2,915,724 | 2,383,381 |
Operating | Aftermarket Services | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | 67,832 | 79,383 |
Other | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | $ 113,518 | $ 82,388 |
Segments - Reconciliation of Ne
Segments - Reconciliation of Net Income to Gross Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation Net Income (Loss) to Gross Margin | |||||||||||
Gross margin | $ 509,247 | $ 440,074 | $ 375,733 | ||||||||
Less: | |||||||||||
Selling, general and administrative | 117,727 | 101,563 | 111,483 | ||||||||
Depreciation and amortization | 188,084 | 174,946 | 188,563 | ||||||||
Long-lived asset impairment | $ 25,842 | $ 7,097 | $ 8,632 | $ 3,092 | $ 9,804 | $ 6,660 | $ 6,953 | $ 4,710 | 44,663 | 28,127 | 29,142 |
Restatement and other charges | 214 | 396 | (1,076) | 485 | 445 | 19 | 4,370 | ||||
Restructuring and other charges | 0 | 0 | 1,386 | ||||||||
Interest expense | 104,681 | 93,328 | 88,760 | ||||||||
Debt extinguishment loss | 0 | 0 | 3,653 | 0 | 0 | 0 | 2,450 | 0 | 3,653 | 2,450 | 291 |
Transaction-related costs | 441 | 4,905 | 2,687 | 180 | 169 | 182 | 5,686 | 4,125 | 8,213 | 10,162 | 275 |
Gain on sale of assets, net | $ (6,372) | $ (7,859) | $ (1,801) | $ 16 | $ (2,766) | $ (719) | $ (994) | $ (1,195) | (16,016) | (5,674) | (5,675) |
Other income, net | (661) | (157) | (243) | ||||||||
Income (loss) before income taxes | $ 58,458 | $ 35,310 | $ (42,619) |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 245,987 | $ 244,949 | $ 238,390 | $ 236,159 | $ 233,159 | $ 232,372 | $ 226,870 | $ 212,040 | $ 965,485 | $ 904,441 | $ 794,655 |
Gross profit | 64,963 | 81,481 | 77,454 | 76,171 | 66,094 | 68,661 | 63,924 | 62,577 | |||
Long-lived asset impairment | 25,842 | 7,097 | 8,632 | 3,092 | 9,804 | 6,660 | 6,953 | 4,710 | 44,663 | 28,127 | 29,142 |
Restatement and other charges | 214 | 396 | (1,076) | 485 | 445 | 19 | 4,370 | ||||
Debt extinguishment loss | 0 | 0 | 3,653 | 0 | 0 | 0 | 2,450 | 0 | 3,653 | 2,450 | 291 |
Transaction-related costs | 441 | 4,905 | 2,687 | 180 | 169 | 182 | 5,686 | 4,125 | 8,213 | 10,162 | 275 |
(Gain) loss on sale of assets, net | (6,372) | (7,859) | (1,801) | 16 | (2,766) | (719) | (994) | (1,195) | (16,016) | (5,674) | (5,675) |
Net income | $ 46,044 | $ 20,407 | $ 11,423 | $ 19,456 | 12,968 | 9,974 | 4,149 | 2,069 | 97,330 | 29,160 | 18,410 |
Net income (loss) attributable to Archrock stockholders | $ 12,968 | $ 9,974 | $ 1,937 | $ (3,816) | $ 97,330 | $ 21,063 | $ 18,953 | ||||
Net income (loss) attributable to Archrock common stockholders per share: | |||||||||||
Basic and diluted net income per common share Archrock common stockholders (usd per share) | $ 0.30 | $ 0.14 | $ 0.09 | $ 0.15 | $ 0.10 | $ 0.08 | $ 0.02 | $ (0.06) | $ 0.70 | $ 0.19 | $ 0.26 |
Release of deferred tax asset valuation allowance | $ 39,600 | $ (50,800) |
SCHEDULE II VALUATION AND QUA_2
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for doubtful accounts applied to accounts receivable in the balance sheet - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Period | $ 1,452 | $ 1,794 | $ 1,864 |
Charged to Costs and Expenses | 2,567 | 1,677 | 5,144 |
Deductions(1) | 1,809 | 2,019 | 5,214 |
Balance at End of Period | $ 2,210 | $ 1,452 | $ 1,794 |
Uncategorized Items - a201910ka
Label | Element | Value |
Accounting Standards Update 2017-12 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 383,000 |
Accounting Standards Update 2017-12 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 383,000 |
Accounting Standards Update 2018-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 258,000 |
Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (258,000) |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 14,666,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 14,666,000 |
Accounting Standards Update 2016-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,290,000 |
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,081,000 |
Accounting Standards Update 2016-09 [Member] | Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 209,000 |