Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 03, 2022 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Commission File Number | 001-33666 | |
Entity Registrant Name | Archrock, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 74-3204509 | |
Entity Street Address | 9807 Katy Freeway | |
Entity Suite Number | Suite 100 | |
Entity City | Houston | |
Entity State | TX | |
Entity Postal Zip Code | 77024 | |
City Area Code | 281 | |
Local Phone Number | 836-8000 | |
Title of each class | Common stock, $0.01 par value per share | |
Trading Symbol | AROC | |
Name of exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 155,215,024 | |
Entity Central Index Key | 0001389050 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 1,262 | $ 1,569 |
Accounts receivable, trade, net of allowance of $2,209 and $2,152, respectively | 115,162 | 104,931 |
Inventory | 73,596 | 72,869 |
Other current assets | 6,364 | 7,201 |
Total current assets | 196,384 | 186,570 |
Property, plant and equipment, net | 2,230,134 | 2,226,526 |
Operating lease ROU assets | 17,116 | 17,491 |
Intangible assets, net | 45,374 | 47,887 |
Contract costs, net | 26,262 | 25,418 |
Deferred tax assets | 47,504 | 47,879 |
Other assets | 27,741 | 28,384 |
Noncurrent assets associated with discontinued operations | 9,505 | 9,811 |
Total assets | 2,600,020 | 2,589,966 |
Current liabilities: | ||
Accounts payable, trade | 70,878 | 38,920 |
Accrued liabilities | 90,168 | 82,517 |
Deferred revenue | 7,264 | 3,817 |
Total current liabilities | 168,310 | 125,254 |
Long-term debt | 1,517,015 | 1,530,825 |
Operating lease liabilities | 15,448 | 15,940 |
Deferred tax liabilities | 1,177 | 1,136 |
Other liabilities | 17,879 | 17,505 |
Noncurrent liabilities associated with discontinued operations | 7,868 | 7,868 |
Total liabilities | 1,727,697 | 1,698,528 |
Commitments and contingencies (Note 17) | ||
Equity: | ||
Preferred stock: $0.01 par value per share, 50,000,000 shares authorized, zero issued | ||
Common stock: $0.01 par value per share, 250,000,000 shares authorized, 162,919,584 and 161,482,852 shares issued, respectively | 1,629 | 1,615 |
Additional paid-in capital | 3,443,261 | 3,440,059 |
Accumulated other comprehensive loss | (984) | |
Accumulated deficit | (2,484,066) | (2,463,114) |
Treasury stock: 7,698,812 and 7,417,401 common shares, at cost, respectively | (88,501) | (86,138) |
Total equity | 872,323 | 891,438 |
Total liabilities and equity | $ 2,600,020 | $ 2,589,966 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance | $ 2,209 | $ 2,152 |
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) | 162,919,584 | 161,482,852 |
Treasury stock, common shares (in shares) | 7,698,812 | 7,417,401 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues | $ 197,201 | $ 195,431 |
Total cost of sales (excluding depreciation and amortization) | 93,139 | 87,148 |
Selling, general and administrative | 27,773 | 25,084 |
Depreciation and amortization | 43,039 | 45,712 |
Long-lived and other asset impairment | 7,416 | 7,073 |
Restructuring charges | 897 | |
Interest expense | 25,246 | 31,245 |
Gain on sale of assets, net | (2,112) | (11,032) |
Other (income) expense, net | 36 | (1,889) |
Income (loss) before income taxes | 2,664 | 11,193 |
Provision for (benefit from) income taxes | 943 | 7,024 |
Net income (loss) | $ 1,721 | $ 4,169 |
Basic net income (loss) per common share (in dollars per share) | $ 0.01 | $ 0.03 |
Diluted net income (loss) per common share (in dollars per share) | $ 0.01 | $ 0.03 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 152,690 | 151,425 |
Diluted (in shares) | 152,810 | 151,578 |
Contract Operations | ||
Revenues | $ 163,656 | $ 166,034 |
Total cost of sales (excluding depreciation and amortization) | 64,501 | 61,365 |
Aftermarket Services | ||
Revenues | 33,545 | 29,397 |
Total cost of sales (excluding depreciation and amortization) | $ 28,638 | $ 25,783 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income (loss) | $ 1,721 | $ 4,169 |
Other comprehensive income (loss), net of tax: | ||
Interest rate swap gain (loss), net of reclassifications to earnings | 574 | 996 |
Amortization of dedesignated interest rate swap | 410 | |
Total other comprehensive income (loss), net of tax | 984 | 996 |
Comprehensive income (loss) | $ 2,705 | $ 5,165 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock | ATM Agreement | Total |
Beginning balance at Dec. 31, 2020 | $ 1,600 | $ 3,424,624 | $ (5,006) | $ (2,401,988) | $ (83,673) | $ 935,557 | |
Stockholders' Equity, Beginning, shares at Dec. 31, 2020 | 160,014,960 | (7,052,769) | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Treasury stock purchased | $ (1,742) | (1,742) | |||||
Treasury stock purchased, shares | (184,393) | ||||||
Cash dividends | (22,155) | (22,155) | |||||
Shares issued under ESPP | 235 | 235 | |||||
Shares issued under ESPP (in shares) | 28,054 | ||||||
Stock-based compensation, net of forfeitures | $ 9 | 2,654 | 2,663 | ||||
Stock-based compensation, net of forfeitures (in shares) | 923,330 | (26,011) | |||||
Net proceeds from issuance of common stock | $ 4 | 3,397 | 3,401 | ||||
Net proceeds from issuance of common stock (in shares) | 357,148 | 357,148 | |||||
Comprehensive income (loss) | |||||||
Net income (loss) | 4,169 | 4,169 | |||||
Interest rate swap gain (loss), net of reclassifications to earnings | 996 | 996 | |||||
Ending balance at Mar. 31, 2021 | $ 1,613 | 3,430,910 | (4,010) | (2,419,974) | $ (85,415) | 923,124 | |
Stockholders' Equity, Ending, shares at Mar. 31, 2021 | 161,323,492 | (7,263,173) | |||||
Beginning balance at Dec. 31, 2021 | $ 1,615 | 3,440,059 | (984) | (2,463,114) | $ (86,138) | 891,438 | |
Stockholders' Equity, Beginning, shares at Dec. 31, 2021 | 161,482,852 | (7,417,401) | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Treasury stock purchased | $ (2,363) | (2,363) | |||||
Treasury stock purchased, shares | (272,403) | ||||||
Cash dividends | (22,673) | (22,673) | |||||
Shares issued under ESPP | 149 | 149 | |||||
Shares issued under ESPP (in shares) | 20,060 | ||||||
Stock-based compensation, net of forfeitures | $ 14 | 3,053 | 3,067 | ||||
Stock-based compensation, net of forfeitures (in shares) | 1,416,672 | (9,008) | |||||
Comprehensive income (loss) | |||||||
Net income (loss) | 1,721 | 1,721 | |||||
Interest rate swap gain (loss), net of reclassifications to earnings | 574 | 574 | |||||
Amortization of dedesignated interest rate swap | $ 410 | 410 | |||||
Ending balance at Mar. 31, 2022 | $ 1,629 | $ 3,443,261 | $ (2,484,066) | $ (88,501) | $ 872,323 | ||
Stockholders' Equity, Ending, shares at Mar. 31, 2022 | 162,919,584 | (7,698,812) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Parentheticals) - $ / shares | 3 Months Ended | ||||
Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Condensed Consolidated Statements of Equityy | |||||
Dividend declared per common stock (in dollars per share) | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ 1,721 | $ 4,169 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 43,039 | 45,712 | ||
Long-lived and other asset impairment | 7,416 | 7,073 | ||
Inventory write-downs | 294 | 218 | ||
Amortization of operating lease ROU assets | 780 | 950 | ||
Amortization of deferred financing costs | 1,288 | 6,264 | ||
Amortization of debt premium | (502) | (501) | ||
Amortization of dedesignated interest rate swap | 410 | |||
Interest rate swaps | 631 | 1,071 | ||
Stock-based compensation expense | 3,067 | 2,663 | ||
Provision for credit losses | 108 | 224 | ||
(Gain) loss on sale of assets, net | (2,112) | (5,037) | ||
Gain on sale of business | (5,995) | |||
Deferred income tax [provision] (benefit) | 886 | 6,592 | ||
Amortization of contract costs | 4,476 | 5,591 | ||
Deferred revenue recognized in earnings | (3,115) | (2,328) | ||
Change in assets and liabilities, net of acquisition: | ||||
Accounts receivable, trade | (15,084) | (4,108) | ||
Inventory | (1,021) | (3,330) | ||
Other assets | 444 | 270 | ||
Contract costs, net | (5,320) | (2,283) | ||
Accounts payable and other liabilities | 32,718 | 18,881 | ||
Deferred revenue | 6,351 | 1,397 | ||
Other | 97 | 62 | ||
Net cash provided by operating activities | 76,572 | 77,555 | ||
Cash flows from investing activities: | ||||
Capital expenditures | (44,858) | (11,539) | ||
Proceeds from sale of business | 18,168 | |||
Proceeds from sale of property, plant and equipment and other assets | 5,437 | 9,114 | ||
Proceeds from insurance and other settlements | 2,763 | 775 | ||
Net cash provided by (used in) investing activities | (36,658) | 16,518 | ||
Cash flows from financing activities: | ||||
Borrowings of long-term debt | 172,500 | 159,751 | ||
Repayments of long-term debt | (186,500) | (229,251) | ||
Payments for debt issuance costs | (2,401) | |||
Proceeds from (payments for) settlement of interest rate swaps that include financing elements | (1,334) | (1,075) | ||
Dividends paid to stockholders | (22,673) | $ (22,351) | $ (22,331) | (22,155) |
Net proceeds from issuance of common stock | 3,401 | |||
Proceeds from stock issued under ESPP | 149 | 235 | ||
Purchases of treasury stock | (2,363) | (1,742) | ||
Net cash provided by (used in) financing activities | (40,221) | (93,237) | ||
Net increase (decrease) in cash and cash equivalents | (307) | 836 | ||
Cash and cash equivalents, beginning of period | 1,569 | $ 1,933 | 1,097 | |
Cash and cash equivalents, end of period | $ 1,262 | $ 1,569 | $ 1,933 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Basis of Presentation and Significant Accounting Policies | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation 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. The accompanying unaudited condensed consolidated financial statements included herein have been prepared in accordance with GAAP and the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished reflects all normal recurring adjustments necessary to fairly present our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements presented in our 2021 Form 10-K, which contains a more comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. |
Business Transactions
Business Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Business Transactions | |
Business Transactions | 2. Business Transactions February 2021 Disposition In February 2021, we completed the sale of certain contract operations customer service agreements and approximately 300 compressors, comprising approximately 40,000 horsepower, used to provide compression services under those agreements as well as other assets used to support the operations. We allocated customer-related and contract-based intangible assets based on a ratio of the horsepower sold relative to the total horsepower of the asset group. We recorded a gain on the sale of $6.0 million in gain on sale of assets, net in our condensed consolidated statements of operations during the three months ended March 31, 2021. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2022 | |
Inventory | |
Inventory | 3. Inventory (in thousands) March 31, 2022 December 31, 2021 Parts and supplies $ 62,248 $ 63,628 Work in progress 11,348 9,241 Inventory $ 73,596 $ 72,869 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment, net | |
Property, Plant and Equipment, Net | 4. Property, Plant and Equipment, net (in thousands) March 31, 2022 December 31, 2021 Compression equipment, facilities and other fleet assets $ 3,293,561 $ 3,273,770 Land and buildings 43,932 43,540 Transportation and shop equipment 91,211 92,490 Computer hardware and software 76,933 76,908 Other 6,260 6,229 Property, plant and equipment 3,511,897 3,492,937 Accumulated depreciation (1,281,763) (1,266,411) Property, plant and equipment, net $ 2,230,134 $ 2,226,526 |
Hosting Arrangements
Hosting Arrangements | 3 Months Ended |
Mar. 31, 2022 | |
Hosting Arrangements | |
Hosting Arrangements | 5. Hosting Arrangements We have hosting arrangements that are service contracts related to the cloud migration of our ERP system and cloud services for our mobile workforce, telematics and inventory management tools. As of March 31, 2022 and December 31, 2021, we had $13.8 million and $12.7 million, respectively, of capitalized implementation costs related to these hosting arrangements included in other assets in our condensed consolidated balance sheets. Accumulated amortization was $1.1 million and $0.7 million at March 31, 2022 and December 31, 2021, respectively. We recorded $0.4 million and $0.1 million of amortization expense to SG&A in our condensed consolidated statements of operations during the three months ended March 31, 2022 and 2021, respectively. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Long-Term Debt | |
Long-Term Debt | 6. Long-Term Debt (in thousands) March 31, 2022 December 31, 2021 Credit Facility $ 220,500 $ 234,500 2028 Notes Principal 800,000 800,000 Premium, net of amortization 12,034 12,536 Deferred financing costs, net of amortization (9,990) (10,406) 802,044 802,130 2027 Notes Principal 500,000 500,000 Deferred financing costs, net of amortization (5,529) (5,805) 494,471 494,195 Long-term debt $ 1,517,015 $ 1,530,825 Credit Facility As of March 31, 2022, there were $5.5 million letters of credit outstanding under the Credit Facility and the applicable margin on borrowings outstanding was 2.4%. The weighted average annual interest rate on the outstanding balance under the Credit Facility, excluding the effect of interest rate swaps, was 2.9% and 2.6% at March 31, 2022 and December 31, 2021, respectively. We incurred $0.5 million and $0.6 million in commitment fees on the daily unused amount of the Credit Facility during the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we were in compliance with all covenants under our Credit Facility agreement. As a result of the facility’s financial ratio requirements, $435.2 million of the $524.0 million of undrawn capacity was available for additional borrowings as of March 31, 2022. In February 2021, we amended our Credit Facility to, among other things, reduce the aggregate revolving commitment from $1.25 billion to $750.0 million and adjust certain financial ratios. We wrote off $4.9 million of unamortized deferred financing costs as a result of the amendment, which was recorded to interest expense in our condensed consolidated statements of operations during the three months ended March 31, 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss) | 7. Accumulated Other Comprehensive 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 loss consists of changes in the fair value of our interest rate swap derivative instruments, net of tax. Three Months Ended March 31, (in thousands) 2022 2021 Beginning accumulated other comprehensive loss $ (984) $ (5,006) Other comprehensive income, net of tax: Loss recognized in other comprehensive income, net of tax benefit of $107 and $2, respectively (405) (8) Loss reclassified from accumulated other comprehensive loss to interest expense, net of tax benefit of $369 and $267, respectively 1,389 1,004 Total other comprehensive income 984 996 Ending accumulated other comprehensive loss $ — $ (4,010) See Note 14 (“Derivatives”) for further details on our interest rate swap derivative instruments. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity | |
Equity | 8. Equity At-the-Market Continuous Equity Offering Program During the three months ended March 31, 2021, we sold 357,148 shares of common stock for net proceeds of $3.4 million pursuant to our ATM Agreement. Cash Dividends The following table summarizes our dividends declared and paid in each of the quarterly periods of 2022 and 2021: Declared Dividends Dividends Paid per Common Share (in thousands) 2022 Q1 $ 0.145 $ 22,673 2021 Q4 $ 0.145 $ 22,351 Q3 0.145 22,506 Q2 0.145 22,331 Q1 0.145 22,155 On April 28, 2022, our Board of Directors declared a quarterly dividend of $0.145 per share of common stock to be paid on May 17, 2022 to stockholders of record at the close of business on May 10, 2022. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer | |
Revenue from Contracts with Customers | 9. Revenue from Contracts with Customers The following table presents our revenue from contracts with customers by segment (see Note 19 (“Segments”)) and disaggregated by revenue source: Three Months Ended March 31, (in thousands) 2022 2021 Contract operations: 0 ― 1,000 horsepower per unit $ 41,842 $ 46,919 1,001 ― 1,500 horsepower per unit 67,001 68,464 Over 1,500 horsepower per unit 54,594 50,403 Other (1) 219 248 Total contract operations revenue (2) 163,656 166,034 Aftermarket services: Services 17,137 16,892 OTC parts and components sales 16,408 12,505 Total aftermarket services revenue (3) 33,545 29,397 Total revenue $ 197,201 $ 195,431 (1) Primarily relates to fees associated with owned non-compression equipment. (2) Includes $0.2 million and $1.0 million for the three months ended March 31, 2022 and 2021, 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. (3) Services revenue within aftermarket services is recognized over time. OTC parts and components sales revenue is recognized at a point in time. Performance Obligations As of March 31, 2022, we had $267.3 million of remaining performance obligations related to our contract operations segment, which will be recognized through 2027 as follows: (in thousands) 2022 2023 2024 2025 2026 2027 Total Remaining performance obligations $ 184,874 $ 60,283 $ 19,147 $ 1,981 $ 867 $ 98 $ 267,250 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 Assets As of March 31, 2022 and December 31, 2021, our receivables from contracts with customers, net of allowance for credit losses, were $103.0 million and $84.7 million, respectively. Allowance for Credit Losses 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 customer agreements. Due to the short-term nature of our trade receivables, we consider the amortized cost to be the same as the carrying amount of the receivable, excluding the allowance for credit losses. We recognize an allowance for credit losses when a receivable is recorded, even when the risk of loss is remote. We utilize an aging schedule to determine our allowance for credit losses and measure expected credit losses on a collective (pool) basis when similar risk characteristics exist. We rely primarily on ratings assigned by external rating agencies and credit monitoring services to assess credit risk and aggregate customers first by low, medium or high risk asset pools, and then by delinquency status. We also consider the internal risk associated with geographic location and the services we provide to the customer when determining asset pools. If a customer does not share similar risk characteristics with other customers, we evaluate the customer’s outstanding trade receivables for expected credit losses on an individual basis. Trade receivables evaluated individually are not included in our collective assessment. Each reporting period, we reassess our customers’ risk profiles and determine the appropriate asset pool classification, or perform individual assessments of expected credit losses, based on the customers’ risk characteristics at the reporting date. The contractual life of our trade receivables is primarily 30 days based on the payment terms specified in the contract. Contract operations services are generally billed monthly at the beginning of the month in which service is being provided. Aftermarket services billings typically occur when parts are delivered or service is completed. Loss rates are separately determined for each asset pool based on the length of time a trade receivable has been outstanding. We analyze two years of internal historical loss data, including the effects of prepayments, write-offs and subsequent recoveries, to determine our historical loss experience. Our historical loss information is a relevant data point for estimating credit losses, as the data closely aligns with trade receivables due from our customers. Ratings assigned by external rating agencies and credit monitoring services consider past performance and forecasts of future economic conditions in assessing credit risk. We routinely update our historical loss data to reflect our customers’ current risk profile, to ensure the historical data and loss rates are relevant to the pool of assets for which we are estimating expected credit losses. Our allowance for credit losses balance changed as follows during the three months ended March 31, 2022: (in thousands) Balance at December 31, 2021 $ 2,152 Provision for credit losses 108 Write-offs charged against allowance (51) Balance at March 31, 2022 $ 2,209 Contract Liabilities 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. Our contract liabilities were $7.6 million and $4.4 million as of March 31, 2022 and December 31, 2021, respectively, and were included in deferred revenue and other liabilities in our condensed consolidated balance sheets. During the three months ended March 31, 2022, we deferred revenue of $6.4 million and recognized $3.1 million as revenue. The revenue recognized and deferred during the period primarily related to freight billings and milestone billings on aftermarket services. |
Long-Lived and Other Asset Impa
Long-Lived and Other Asset Impairment | 3 Months Ended |
Mar. 31, 2022 | |
Long-Lived and Other Asset Impairment | |
Long-Lived and Other Asset Impairment | 10. Long-Lived and Other 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. Compression Fleet 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 compression fleet impairment review as recorded to our contract operations segment: Three Months Ended March 31, (dollars in thousands) 2022 2021 Idle compressors retired from the active fleet 45 70 Horsepower of idle compressors retired from the active fleet 31,000 24,000 Impairment recorded on idle compressors retired from the active fleet $ 7,409 $ 7,012 |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring Charges | |
Restructuring Charges | 11. Restructuring Charges In response to the decreased activity level of our customers that resulted from the coronavirus pandemic beginning in the second quarter of 2020, we incurred severance costs of $7.0 million to right-size our business in 2020 and 2021. No additional costs will be incurred under this restructuring plan. During the third quarter of 2020, a plan to dispose of certain non-core properties was approved by management. We incurred $1.5 million of costs in 2020 and 2021 as a result of these property disposals. No additional costs will be incurred under this restructuring plan. The severance and property disposal costs incurred under the above restructuring plans were recorded to restructuring charges in our condensed consolidated statements of operations. The following table presents restructuring charges incurred by segment: Contract Aftermarket (in thousands) Operations Services Other (1) Total Three months ended March 31, 2021 Pandemic restructuring $ 279 $ 24 $ 585 $ 888 2020 Property restructuring — — 9 9 Total restructuring charges $ 279 $ 24 $ 594 $ 897 (1) Represents expense incurred within our corporate function and not directly attributable to our segments. The following table presents restructuring charges incurred by cost type: Three Months Ended (in thousands) March 31, 2021 Severance costs - pandemic restructuring $ 888 Impairment - 2020 property restructuring 9 Total restructuring charges $ 897 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes | |
Income Taxes | 12. Income Taxes Valuation Allowance The amount of our deferred tax assets considered realizable could be adjusted if projections of future taxable income are reduced or objective negative evidence in the form of a three-year cumulative loss is present or both. Should we no longer have a level of sustained profitability, excluding nonrecurring charges, we will have to rely more on our future projections of taxable income to determine if we have an adequate source of taxable income for the realization of our deferred tax assets, namely net operating loss, interest limitation and tax credit carryforwards. This may result in the need to record a valuation allowance against all or a portion of our deferred tax assets. Effective Tax Rate The year-to-date effective tax rate for the three months ended March 31, 2022 differed significantly from our statutory rate primarily due to unrecognized tax benefits and the limitation on executive compensation. Unrecognized Tax Benefits As of March 31, 2022, we believe it is reasonably possible that $2.7 million of our unrecognized tax benefits, including penalties, interest and discontinued operations, will be reduced prior to March 31, 2023 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 that could materially differ from this estimate. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share | |
Earnings Per Share | 13. Earnings per Share Basic net income (loss) 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) per common share is determined by dividing net income (loss), 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, only distributed earnings (dividends) are allocated to participating securities, as participating securities do not have a contractual obligation to participate in our undistributed losses. Diluted net income (loss) 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 ESPP unless their effect would be anti-dilutive. The following table shows the calculation for net income attributable to common stockholders, which is used in the calculation of basic and diluted net income per common share: Three Months Ended March 31, (in thousands) 2022 2021 Net income $ 1,721 $ 4,169 Less: Earnings attributable to participating securities (515) (168) Net income attributable to common stockholders $ 1,206 $ 4,001 The following table shows the potential shares of common stock that were included in computing diluted net income per common share: Three Months Ended March 31, (in thousands) 2022 2021 Weighted average common shares outstanding including participating securities 154,832 153,004 Less: Weighted average participating securities outstanding (2,142) (1,579) Weighted average common shares outstanding used in basic net income per common share 152,690 151,425 Net dilutive potential common shares issuable: On vesting of restricted stock units 117 149 On settlement of ESPP shares 3 4 Weighted average common shares outstanding used in diluted net income per common share 152,810 151,578 The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income per common share as their inclusion would have been anti-dilutive: Three Months Ended March 31, (in thousands) 2022 2021 On exercise of options where exercise price is greater than average market value for the period — 44 |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2022 | |
Derivatives | |
Derivatives | 14. Derivatives We are exposed to market risks associated with changes in the variable interest rate of our Credit Facility. We have used derivative instruments, in the form of interest rate swaps, 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. In March 2022, our $300.0 million notional value of interest rate swaps expired. We previously entered into these swaps to offset changes in expected cash flows due to fluctuations in the associated variable interest rates and designated them as cash flow hedges. There was no nonperformance by any counterparty during the terms of the interest rate swaps and no collateral was posted for the instruments. Prior to expiration, during the third quarter of 2021, we dedesignated $125.0 million notional value of our interest rate swaps. The fair value of this interest rate swap immediately prior to dedesignation was a liability of $1.6 million. The associated amount in accumulated other comprehensive loss related to this interest rate swap was amortized into interest expense over the remaining term of the swap through March 2022. Changes in the fair value of the dedesignated interest rate swap after dedesignation and prior to expiration were recorded in interest expense. The remaining $175.0 million notional value of our interest rate swaps were designated as (highly effective) cash flow hedging instruments until their expiration. Changes in the fair value of cash flow hedging instruments 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 condensed 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 which case, the cash settlements for those derivatives are classified as cash flows from financing activities. The following table presents the effect of our derivative instruments on our condensed consolidated balance sheets: (in thousands) March 31, 2022 December 31, 2021 Interest rate swaps designated as cash flow hedging instruments Accrued liabilities $ — $ 727 Interest rate swaps not designated as hedging instruments Accrued liabilities — 523 Total derivative liabilities $ — $ 1,250 The following table presents the effect of our derivative instruments on our condensed consolidated statements of operations: Three Months Ended March 31, (in thousands) 2022 2021 Total amount of interest expense in which the effects of cash flow hedges and undesignated interest rate swaps are recorded $ 25,246 $ 31,245 Interest rate swaps designated as cash flow hedging instruments Pre-tax loss recognized in other comprehensive income $ (512) $ (10) Pre-tax loss reclassified from accumulated other comprehensive loss into interest expense (1,758) (1,271) Interest rate swaps not designated as hedging instruments Gain recognized in interest expense $ 523 $ — See Note 7 (“Accumulated Other Comprehensive Loss”) and Note 15 (“Fair Value Measurements”) for further details on our derivative instruments. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 15. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis Prior to their expiration in the first quarter of 2022, our interest rate swap derivative instruments were valued quarterly based on the income approach (discounted cash flow) using market observable inputs, including LIBOR forward curves. These fair value measurements were classified as Level 2. The following table presents our derivative position measured at fair value on a recurring basis, with pricing levels as of the date of valuation: (in thousands) March 31, 2022 December 31, 2021 Derivative liabilities $ — $ 1,250 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis During the three months ended March 31, 2022, we recorded nonrecurring fair value measurements related to our idle 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 compressors impaired during 2022 and 2021 was as follows: (in thousands) March 31, 2022 December 31, 2021 Impaired compressors $ 740 $ 4,380 The significant unobservable inputs used to develop the above fair value measurements were weighted by the relative fair value of the compressors being measured. Additional quantitative information related to our significant unobservable inputs follows: Range Weighted Average (1) Estimated net sale proceeds: As of March 31, 2022 $0 - $621 per horsepower $40 per horsepower As of December 31, 2021 $0 - $621 per horsepower $35 per horsepower (1) Calculated based on an estimated discount for market liquidity of 60% and 64% as of March 31, 2022 and December 31, 2021, respectively. See Note 10 (“Long-Lived and Other 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 is a Level 3 measurement. The fair value of our fixed rate debt is estimated using yields observable in active markets, which are Level 2 inputs, and was as follows: (in thousands) March 31, 2022 December 31, 2021 Carrying amount of fixed rate debt (1) $ 1,296,515 $ 1,296,325 Fair value of fixed rate debt 1,297,000 1,361,000 (1) Carrying amounts are shown net of unamortized premium and deferred financing costs. See Note 6 (“Long-Term Debt”). |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 16. Stock-Based Compensation We recognize stock-based compensation expense related to restricted stock awards, restricted stock units, performance-based restricted stock units and shares issued under our ESPP. Three Months Ended March 31, (in thousands) 2022 2021 Equity award expense $ 3,067 $ 2,663 Liability award expense 503 586 Total stock-based compensation expense $ 3,570 $ 3,249 The following table presents our restricted stock activity during the three months ended March 31, 2022: Weighted Average Grant Date Shares Fair Value (in thousands) Per Share Non-vested restricted stock, December 31, 2021 2,578 $ 10.35 Granted 1,861 9.03 Vested (1,074) 10.37 Canceled (146) 9.42 Non-vested restricted stock, March 31, 2022 (1) 3,219 9.62 (1) Comprised of 508 cash-settled units and 2,711 stock-settled awards and units. As of March 31, 2022, we expect $24.3 million of unrecognized compensation cost related to our non-vested awards and units to be recognized over the weighted average period of 2.2 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 17. Commitments and Contingencies 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. 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 March 31, 2022 and December 31, 2021, we had $5.6 million and $5.8 million, respectively, accrued 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. In 2021, one of our sales and use tax audits advanced from the audit review phase to the contested hearing phase. We had $0.6 million accrued for this audit as of both March 31, 2022 and December 31, 2021. 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | 18. Related Party Transactions Old Ocean Reserves, an affiliate of our customer Hilcorp, has the right to designate one director to our Board of Directors as long as Old Ocean Reserves, together with affiliates of Hilcorp, owns at least 7.5% of our outstanding common stock. As of March 31, 2022, Old Ocean Reserves owned 11.0% of our outstanding common stock. Jason C. Rebrook, President of Hilcorp, has served as their designated Director since July 2020. Revenue from Hilcorp and affiliates was $9.4 million and $9.5 million during the three months ended March 31, 2022 and 2021, respectively. Accounts receivable, net due from Hilcorp and affiliates was $3.0 million and $3.7 million as of March 31, 2022 and December 31, 2021, respectively. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2022 | |
Segments | |
Segments | 19. 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 parts 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. Contract Aftermarket (in thousands) Operations Services Total Three months ended March 31, 2022 Revenue $ 163,656 $ 33,545 $ 197,201 Gross margin 99,155 4,907 104,062 Three months ended March 31, 2021 Revenue $ 166,034 $ 29,397 $ 195,431 Gross margin 104,669 3,614 108,283 The following table reconciles total gross margin to income before income taxes: Three Months Ended March 31, (in thousands) 2022 2021 Total gross margin $ 104,062 $ 108,283 Less: Selling, general and administrative 27,773 25,084 Depreciation and amortization 43,039 45,712 Long-lived and other asset impairment 7,416 7,073 Restructuring charges — 897 Interest expense 25,246 31,245 Gain on sale of assets, net (2,112) (11,032) Other (income) expense, net 36 (1,889) Income before income taxes $ 2,664 $ 11,193 |
Impact of Hurricane
Impact of Hurricane | 3 Months Ended |
Mar. 31, 2022 | |
Impact of Hurricane | |
Impact of Hurricane | 20. Impact of Hurricane In August 2021, Hurricane Ida caused operational disruptions, damage to compressors and a temporary shutdown of facilities in Louisiana that negatively impacted our financial performance in the quarter. At December 31, 2021, we had an insurance recovery receivable of $2.8 million related to the facility and compressor damages, which we received in cash in the first quarter of 2022. The remaining portion of our insurance claim pertaining to business interruption is in process. Any amount recovered will not be subject to an additional deductible and will recognized upon notice of final settlement. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events | |
Subsequent Events | 21. Subsequent Events May 2022 Disposition On May 6, 2022, we completed the sale of certain contract operations customer service agreements and approximately 380 compressors, comprising approximately 70,000 horsepower, used to provide compression services under those agreements, as well as other assets used to support the operations. We allocated customer-related and contract-based intangible assets based on a ratio of the horsepower sold relative to the total horsepower of the asset group. We received cash consideration of $55.5 million for the sale and a gain on sale of approximately $17.0 million will be recognized in the second quarter of 2022. Investment in ECOTEC On April 21, 2022, we agreed to acquire for cash a 25% equity interest in ECOTEC, a company specializing in methane emissions monitoring and management. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory | |
Schedule of inventory, net of reserves | (in thousands) March 31, 2022 December 31, 2021 Parts and supplies $ 62,248 $ 63,628 Work in progress 11,348 9,241 Inventory $ 73,596 $ 72,869 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment, net | |
Schedule of property, plant and equipment, net | (in thousands) March 31, 2022 December 31, 2021 Compression equipment, facilities and other fleet assets $ 3,293,561 $ 3,273,770 Land and buildings 43,932 43,540 Transportation and shop equipment 91,211 92,490 Computer hardware and software 76,933 76,908 Other 6,260 6,229 Property, plant and equipment 3,511,897 3,492,937 Accumulated depreciation (1,281,763) (1,266,411) Property, plant and equipment, net $ 2,230,134 $ 2,226,526 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Long-Term Debt | |
Schedule of long-term debt | (in thousands) March 31, 2022 December 31, 2021 Credit Facility $ 220,500 $ 234,500 2028 Notes Principal 800,000 800,000 Premium, net of amortization 12,034 12,536 Deferred financing costs, net of amortization (9,990) (10,406) 802,044 802,130 2027 Notes Principal 500,000 500,000 Deferred financing costs, net of amortization (5,529) (5,805) 494,471 494,195 Long-term debt $ 1,517,015 $ 1,530,825 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss). | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Three Months Ended March 31, (in thousands) 2022 2021 Beginning accumulated other comprehensive loss $ (984) $ (5,006) Other comprehensive income, net of tax: Loss recognized in other comprehensive income, net of tax benefit of $107 and $2, respectively (405) (8) Loss reclassified from accumulated other comprehensive loss to interest expense, net of tax benefit of $369 and $267, respectively 1,389 1,004 Total other comprehensive income 984 996 Ending accumulated other comprehensive loss $ — $ (4,010) |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity | |
Summary of entity's dividends per common share | Declared Dividends Dividends Paid per Common Share (in thousands) 2022 Q1 $ 0.145 $ 22,673 2021 Q4 $ 0.145 $ 22,351 Q3 0.145 22,506 Q2 0.145 22,331 Q1 0.145 22,155 |
Revenue from Contract with Cu_2
Revenue from Contract with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer | |
Disaggregation of Revenue | Three Months Ended March 31, (in thousands) 2022 2021 Contract operations: 0 ― 1,000 horsepower per unit $ 41,842 $ 46,919 1,001 ― 1,500 horsepower per unit 67,001 68,464 Over 1,500 horsepower per unit 54,594 50,403 Other (1) 219 248 Total contract operations revenue (2) 163,656 166,034 Aftermarket services: Services 17,137 16,892 OTC parts and components sales 16,408 12,505 Total aftermarket services revenue (3) 33,545 29,397 Total revenue $ 197,201 $ 195,431 (1) Primarily relates to fees associated with owned non-compression equipment. (2) Includes $0.2 million and $1.0 million for the three months ended March 31, 2022 and 2021, 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. (3) Services revenue within aftermarket services is recognized over time. OTC parts and components sales revenue is recognized at a point in time. |
Schedule of remaining Performance Obligation | (in thousands) 2022 2023 2024 2025 2026 2027 Total Remaining performance obligations $ 184,874 $ 60,283 $ 19,147 $ 1,981 $ 867 $ 98 $ 267,250 |
Summary of changes in the allowance for credit losses balance | (in thousands) Balance at December 31, 2021 $ 2,152 Provision for credit losses 108 Write-offs charged against allowance (51) Balance at March 31, 2022 $ 2,209 |
Long-Lived and Other Asset Im_2
Long-Lived and Other Asset Impairment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Long-Lived and Other Asset Impairment | |
Schedule of impairment of long-lived assets | Three Months Ended March 31, (dollars in thousands) 2022 2021 Idle compressors retired from the active fleet 45 70 Horsepower of idle compressors retired from the active fleet 31,000 24,000 Impairment recorded on idle compressors retired from the active fleet $ 7,409 $ 7,012 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring Charges | |
Schedule of restructuring charges by segment | Contract Aftermarket (in thousands) Operations Services Other (1) Total Three months ended March 31, 2021 Pandemic restructuring $ 279 $ 24 $ 585 $ 888 2020 Property restructuring — — 9 9 Total restructuring charges $ 279 $ 24 $ 594 $ 897 (1) Represents expense incurred within our corporate function and not directly attributable to our segments. |
Schedule of restructuring charges by type | Three Months Ended (in thousands) March 31, 2021 Severance costs - pandemic restructuring $ 888 Impairment - 2020 property restructuring 9 Total restructuring charges $ 897 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share | |
Summary of net income (loss) attributable to Archrock common stockholders used in the calculation of basic and diluted income (loss) per common share | Three Months Ended March 31, (in thousands) 2022 2021 Net income $ 1,721 $ 4,169 Less: Earnings attributable to participating securities (515) (168) Net income attributable to common stockholders $ 1,206 $ 4,001 |
Schedule of potential shares of common stock that were included in computing diluted income (loss) attributable to Archrock common stockholders per common share | Three Months Ended March 31, (in thousands) 2022 2021 Weighted average common shares outstanding including participating securities 154,832 153,004 Less: Weighted average participating securities outstanding (2,142) (1,579) Weighted average common shares outstanding used in basic net income per common share 152,690 151,425 Net dilutive potential common shares issuable: On vesting of restricted stock units 117 149 On settlement of ESPP shares 3 4 Weighted average common shares outstanding used in diluted net income per common share 152,810 151,578 |
Schedule of potential shares of common stock issuable, excluded from computation of diluted income (loss), attributable to Archrock common stockholders per common share | Three Months Ended March 31, (in thousands) 2022 2021 On exercise of options where exercise price is greater than average market value for the period — 44 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivatives | |
Schedule of effect of derivative instruments on consolidated financial position | (in thousands) March 31, 2022 December 31, 2021 Interest rate swaps designated as cash flow hedging instruments Accrued liabilities $ — $ 727 Interest rate swaps not designated as hedging instruments Accrued liabilities — 523 Total derivative liabilities $ — $ 1,250 |
Schedule of effect of derivative instruments on results of operations | Three Months Ended March 31, (in thousands) 2022 2021 Total amount of interest expense in which the effects of cash flow hedges and undesignated interest rate swaps are recorded $ 25,246 $ 31,245 Interest rate swaps designated as cash flow hedging instruments Pre-tax loss recognized in other comprehensive income $ (512) $ (10) Pre-tax loss reclassified from accumulated other comprehensive loss into interest expense (1,758) (1,271) Interest rate swaps not designated as hedging instruments Gain recognized in interest expense $ 523 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair value | |
Summary of assets and liabilities measured at fair value on recurring basis | (in thousands) March 31, 2022 December 31, 2021 Derivative liabilities $ — $ 1,250 |
Schedule of carrying value and estimated fair value of debt instruments | (in thousands) March 31, 2022 December 31, 2021 Carrying amount of fixed rate debt (1) $ 1,296,515 $ 1,296,325 Fair value of fixed rate debt 1,297,000 1,361,000 (1) Carrying amounts are shown net of unamortized premium and deferred financing costs. See Note 6 (“Long-Term Debt”). |
Compressors | |
Fair value | |
Schedule of non-recurring fair value assets | (in thousands) March 31, 2022 December 31, 2021 Impaired compressors $ 740 $ 4,380 |
Schedule of significant unobservable inputs | Range Weighted Average (1) Estimated net sale proceeds: As of March 31, 2022 $0 - $621 per horsepower $40 per horsepower As of December 31, 2021 $0 - $621 per horsepower $35 per horsepower (1) Calculated based on an estimated discount for market liquidity of 60% and 64% as of March 31, 2022 and December 31, 2021, respectively. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stock-Based Compensation | |
Schedule of allocated stock-based compensation | Three Months Ended March 31, (in thousands) 2022 2021 Equity award expense $ 3,067 $ 2,663 Liability award expense 503 586 Total stock-based compensation expense $ 3,570 $ 3,249 |
Schedule of restricted stock, restricted stock unit, performance unit, cash settled restricted stock unit and cash settled performance unit activity | Weighted Average Grant Date Shares Fair Value (in thousands) Per Share Non-vested restricted stock, December 31, 2021 2,578 $ 10.35 Granted 1,861 9.03 Vested (1,074) 10.37 Canceled (146) 9.42 Non-vested restricted stock, March 31, 2022 (1) 3,219 9.62 (1) Comprised of 508 cash-settled units and 2,711 stock-settled awards and units. |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segments | |
Summary of revenue and other financial information by reportable segment | Contract Aftermarket (in thousands) Operations Services Total Three months ended March 31, 2022 Revenue $ 163,656 $ 33,545 $ 197,201 Gross margin 99,155 4,907 104,062 Three months ended March 31, 2021 Revenue $ 166,034 $ 29,397 $ 195,431 Gross margin 104,669 3,614 108,283 |
Reconciliation of net income (loss) to gross margin | Three Months Ended March 31, (in thousands) 2022 2021 Total gross margin $ 104,062 $ 108,283 Less: Selling, general and administrative 27,773 25,084 Depreciation and amortization 43,039 45,712 Long-lived and other asset impairment 7,416 7,073 Restructuring charges — 897 Interest expense 25,246 31,245 Gain on sale of assets, net (2,112) (11,032) Other (income) expense, net 36 (1,889) Income before income taxes $ 2,664 $ 11,193 |
Description of Business and Bas
Description of Business and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Basis of Presentation and Significant Accounting Policies | |
Number of reportable segments | 2 |
Business Transactions - Disposi
Business Transactions - Dispositions (Details) hp in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2021CompressorUnithp | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | |
Transactions | |||
Gain on disposition | $ 5,995 | ||
Proceeds from sale | $ 5,437 | 9,114 | |
Disposed of by Sale | February 2021 Disposition | |||
Transactions | |||
Number of compressors | CompressorUnit | 300 | ||
Compressor horsepower | hp | 40 | ||
Gain on disposition | $ 6,000 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Composition of Inventory net of reserves | ||
Parts and supplies | $ 62,248 | $ 63,628 |
Work in progress | 11,348 | 9,241 |
Inventory | $ 73,596 | $ 72,869 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 3,511,897 | $ 3,492,937 |
Accumulated depreciation | (1,281,763) | (1,266,411) |
Property, plant and equipment, net | 2,230,134 | 2,226,526 |
Compression equipment, facilities and other fleet assets | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 3,293,561 | 3,273,770 |
Land and buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 43,932 | 43,540 |
Transportation and shop equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 91,211 | 92,490 |
Computer hardware and software | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 76,933 | 76,908 |
Other property, plant and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 6,260 | $ 6,229 |
Hosting Arrangements (Details)
Hosting Arrangements (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Hosting Arrangements | |||
Hosting arrangements, Capitalized costs | $ 13.8 | $ 12.7 | |
Hosting arrangements, Accumulated amortization | 1.1 | $ 0.7 | |
Hosting arrangements, Amortization | $ 0.4 | $ 0.1 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instruments | ||
Long-term debt | $ 1,517,015 | $ 1,530,825 |
Credit Facility | ||
Debt Instruments | ||
Long-term debt | 220,500 | 234,500 |
2028 Notes | ||
Debt Instruments | ||
Long term debt gross | 800,000 | 800,000 |
Premium, net of amortization | 12,034 | 12,536 |
Deferred financing costs, net of amortization | (9,990) | (10,406) |
Long-term debt | 802,044 | 802,130 |
2027 Notes | ||
Debt Instruments | ||
Long term debt gross | 500,000 | 500,000 |
Deferred financing costs, net of amortization | (5,529) | (5,805) |
Long-term debt | $ 494,471 | $ 494,195 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facility (Details) - Credit Facility - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Feb. 28, 2021 | Dec. 31, 2020 | |
Line of Credit Facility | |||||
Letter of credit outstanding | $ 5.5 | ||||
Debt instrument, variable rate (percentage) | 2.40% | ||||
Debt instrument weighted average interest rate (percent) | 2.90% | 2.60% | |||
Commitment fee amount | $ 0.5 | $ 0.6 | |||
Current borrowing capacity | 435.2 | ||||
Undrawn capacity | $ 524 | ||||
Maximum borrowing capacity | $ 750 | $ 1,250 | |||
Debt issuance cost written off | $ 4.9 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity | ||
Beginning balance | $ 891,438 | $ 935,557 |
Other comprehensive income (loss), net of tax: | ||
Total other comprehensive income (loss), net of tax | 984 | 996 |
Ending balance | 872,323 | 923,124 |
Accumulated Other Comprehensive Income (Loss) | ||
Increase (Decrease) in Stockholders' Equity | ||
Beginning balance | (984) | (5,006) |
Other comprehensive income (loss), net of tax: | ||
Gain (loss) recognized in other comprehensive income, net of tax expense (benefit) | (405) | (8) |
(Gain) loss reclassified from accumulated other comprehensive loss to interest expense, net of tax (expense) benefit | 1,389 | 1,004 |
Total other comprehensive income (loss), net of tax | 984 | 996 |
Ending balance | (4,010) | |
Gain (loss) recognized in other comprehensive income, tax expense (benefit) | (107) | (2) |
(Gain) loss reclassified from accumulated other comprehensive loss, tax (expense) benefit | $ 369 | $ 267 |
Equity - Equity Offering (Detai
Equity - Equity Offering (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)shares | |
Equity offering | |
Net proceeds from issuance of common stock | $ 3,401 |
ATM Agreement | |
Equity offering | |
Stock issued (in shares) | shares | 357,148 |
Net proceeds from issuance of common stock | $ 3,400 |
Equity - Cash Dividends (Detail
Equity - Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 28, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 |
Distributions | ||||||
Declared Dividends per Common Share (in dollars per share) | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | |
Dividends Paid | $ 22,673 | $ 22,351 | $ 22,506 | $ 22,331 | $ 22,155 | |
Subsequent Event | ||||||
Distributions | ||||||
Declared Dividends per Common Share (in dollars per share) | $ 0.145 |
Revenue from Contract with Cu_3
Revenue from Contract with Customers - Disaggregate Revenue (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)hp | Mar. 31, 2021USD ($)hp | |
Disaggregation of Revenue | ||
Revenue | $ 197,201 | $ 195,431 |
Contract Operations | ||
Disaggregation of Revenue | ||
Revenue | 163,656 | 166,034 |
Contract Operations | Transferred at Point in Time | ||
Disaggregation of Revenue | ||
Revenue | 200 | 1,000 |
Contract Operations | 0 - 1,000 horsepower per unit | ||
Disaggregation of Revenue | ||
Revenue | $ 41,842 | $ 46,919 |
Contract Operations | 0 - 1,000 horsepower per unit | Minimum | ||
Disaggregation of Revenue | ||
Compressor unit horsepower (horsepower) | hp | 0 | 0 |
Contract Operations | 0 - 1,000 horsepower per unit | Maximum | ||
Disaggregation of Revenue | ||
Compressor unit horsepower (horsepower) | hp | 1,000 | 1,000 |
Contract Operations | 1,001 - 1,500 horsepower per unit | ||
Disaggregation of Revenue | ||
Revenue | $ 67,001 | $ 68,464 |
Contract Operations | 1,001 - 1,500 horsepower per unit | Minimum | ||
Disaggregation of Revenue | ||
Compressor unit horsepower (horsepower) | hp | 1,001 | 1,001 |
Contract Operations | 1,001 - 1,500 horsepower per unit | Maximum | ||
Disaggregation of Revenue | ||
Compressor unit horsepower (horsepower) | hp | 1,500 | 1,500 |
Contract Operations | Over 1,500 horsepower per unit | ||
Disaggregation of Revenue | ||
Revenue | $ 54,594 | $ 50,403 |
Contract Operations | Over 1,500 horsepower per unit | Minimum | ||
Disaggregation of Revenue | ||
Compressor unit horsepower (horsepower) | hp | 1,500 | 1,500 |
Contract Operations | Other, including fees | ||
Disaggregation of Revenue | ||
Revenue | $ 219 | $ 248 |
Aftermarket Services | ||
Disaggregation of Revenue | ||
Revenue | 33,545 | 29,397 |
Aftermarket Services | Services | ||
Disaggregation of Revenue | ||
Revenue | 17,137 | 16,892 |
Aftermarket Services | OTC parts and components sales | ||
Disaggregation of Revenue | ||
Revenue | $ 16,408 | $ 12,505 |
Revenue from Contract with Cu_4
Revenue from Contract with Customers - Performance Obligations (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 267,250 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 184,874 |
Performance obligations expected to be satisfied, expected timing | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 60,283 |
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, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 19,147 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 1,981 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 867 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 98 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue from Contract with Cu_5
Revenue from Contract with Customers - Contract Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables | ||
Accounts receivable, trade, net of allowance | $ 115,162 | $ 104,931 |
Contract with Customers | ||
Receivables | ||
Accounts receivable, trade, net of allowance | $ 103,000 | $ 84,700 |
Revenue from Contract with Cu_6
Revenue from Contract with Customers - Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer | ||
Contractual life of accounts receivable | 30 days | |
Period for analyzing historical loss data to determine loss experience | 2 years | |
Changes in the allowance for credit losses balance | ||
Balance at beginning of period | $ 2,152 | |
Provision for credit losses | 108 | $ 224 |
Write-offs charged against the allowance | (51) | |
Balance at end of period | $ 2,209 |
Revenue from Contract with Cu_7
Revenue from Contract with Customers - Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer | |||
Contract liability with customer | $ 7,600 | $ 4,400 | |
Deferred revenue | 6,351 | $ 1,397 | |
Deferred revenue recognized in earnings | $ 3,115 | $ 2,328 |
Long-Lived Asset Impairment (De
Long-Lived Asset Impairment (Details) - Idle Compressor Units hp in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)CompressorUnithp | Mar. 31, 2021USD ($)CompressorUnithp | |
Impaired Long-Lived Assets Held and Used | ||
Idle compressors retired from the active fleet | CompressorUnit | 45 | 70 |
Horsepower of idle compressors retired from the active fleet | hp | 31 | 24 |
Impairment recorded on idle compressors retired from the active fleet | $ | $ 7,409 | $ 7,012 |
Restructuring Charges - General
Restructuring Charges - General (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Pandemic Restructuring | ||
Restructuring charges | ||
Estimated additional charges | $ 0 | |
Pandemic Restructuring | Severance costs | ||
Restructuring charges | ||
Restructuring charges incurred to date | $ 7 | |
2020 Property Restructuring | ||
Restructuring charges | ||
Restructuring charges incurred to date | $ 1.5 | |
Estimated additional charges | $ 0 |
Restructuring Charges - By segm
Restructuring Charges - By segment (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Restructuring charges | |
Restructuring charges | $ 897 |
Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | 888 |
2020 Property Restructuring | |
Restructuring charges | |
Restructuring charges | 9 |
Corporate | |
Restructuring charges | |
Restructuring charges | 594 |
Corporate | Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | 585 |
Corporate | 2020 Property Restructuring | |
Restructuring charges | |
Restructuring charges | 9 |
Contract Operations | Operating | |
Restructuring charges | |
Restructuring charges | 279 |
Contract Operations | Operating | Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | 279 |
Aftermarket Services | Operating | |
Restructuring charges | |
Restructuring charges | 24 |
Aftermarket Services | Operating | Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | $ 24 |
Restructuring Charges - By type
Restructuring Charges - By type (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Restructuring charges | |
Restructuring charges | $ 897 |
Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | 888 |
2020 Property Restructuring | |
Restructuring charges | |
Restructuring charges | 9 |
Severance costs | |
Restructuring charges | |
Restructuring charges | 888 |
Property disposal costs, Impairment | |
Restructuring charges | |
Restructuring charges | $ 9 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Mar. 31, 2022USD ($) |
Income Taxes | |
Potential decrease in unrecognized tax benefit | $ 2.7 |
Earnings Per Share - Net Income
Earnings Per Share - Net Income Attributable to Common Stockholders (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Summary of net income attributable to Archrock common stockholders used in the calculation of basic and diluted income per common share | ||
Net income (loss) | $ 1,721 | $ 4,169 |
Less: Earnings attributable to participating securities | (515) | (168) |
Net income (loss) attributable to common stockholders, basic | 1,206 | 4,001 |
Net income (loss) attributable to common stockholders, diluted | $ 1,206 | $ 4,001 |
Potential shares of common stock included in computing diluted income (loss) attributable to Archrock common stockholders | ||
Weighted average common shares outstanding including participating securities | 154,832 | 153,004 |
Less: Weighted average participating securities outstanding | (2,142) | (1,579) |
Weighted average common shares outstanding used in basic net income (loss) per common share (in shares) | 152,690 | 151,425 |
Weighted average common shares outstanding used in diluted net income (loss) per common share (in shares) | 152,810 | 151,578 |
Restricted stock units | ||
Potential shares of common stock included in computing diluted income (loss) attributable to Archrock common stockholders | ||
Net dilutive potential common shares issuable (in shares) | 117 | 149 |
ESPP shares | ||
Potential shares of common stock included in computing diluted income (loss) attributable to Archrock common stockholders | ||
Net dilutive potential common shares issuable (in shares) | 3 | 4 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Shares (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2021shares | |
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) | 44 |
Derivatives - Interest Rate Swa
Derivatives - Interest Rate Swaps (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | |
Interest rate swap, March 2022 expiration | |||
Notional Disclosures | |||
Notional value of interest rate swaps that expired | $ 300 | ||
Collateral posted prior to expiration | 0 | ||
Notional value dedesignated | $ 125 | ||
Fair value of derivative prior to dedesignation | $ 1.6 | ||
Derivatives Designated as Hedging Instruments | Interest Rate Swaps | |||
Notional Disclosures | |||
Notional amount of interest rate swaps | $ 175 |
Derivatives - Effect of Derivat
Derivatives - Effect of Derivative Instruments on Balance Sheets (Details) - Interest Rate Swaps $ in Thousands | Dec. 31, 2021USD ($) |
Derivatives | |
Derivative liabilities | $ 1,250 |
Derivatives Designated as Hedging Instruments | Accrued liabilities | |
Derivatives | |
Derivative liabilities | 727 |
Derivatives Not Designated as Hedging Instruments | Accrued liabilities | |
Derivatives | |
Derivative liabilities | $ 523 |
Derivatives - Effect of Deriv_2
Derivatives - Effect of Derivative Instruments on Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Effect of derivative instruments on results of operations | ||
Total amount of interest expense in which the effects of cash flow hedges are recorded | $ 25,246 | $ 31,245 |
Derivatives Designated as Hedging Instruments | Interest Rate Swaps | ||
Effect of derivative instruments on results of operations | ||
Pre-tax gain (loss) recognized in other comprehensive income (loss) | (512) | (10) |
Derivatives Designated as Hedging Instruments | Interest Rate Swaps | Interest expense | ||
Effect of derivative instruments on results of operations | ||
Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense | (1,758) | $ (1,271) |
Derivatives Not Designated as Hedging Instruments | Interest Rate Swaps | Interest expense | ||
Effect of derivative instruments on results of operations | ||
Gain recognized in interest expense | $ 523 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair value measurement of assets and liabilities | ||
Derivative liabilities | $ 0 | $ 1,250 |
Derivative Liability, Fair Value by Fair Value Hierarchy Level | us-gaap:FairValueInputsLevel2Member | us-gaap:FairValueInputsLevel2Member |
Fair Value Measurements - Mea_2
Fair Value Measurements - Measured on Nonrecurring Basis (Details) - Level 3 - Impaired Long-Lived Assets - Compressors $ in Thousands | Mar. 31, 2022USD ($)$ / hpY | Dec. 31, 2021USD ($)$ / hp |
Measurement Input, Weighted average disposal period | ||
Fair value | ||
Measurement input | Y | 4 | |
Measurement Input, Sale proceeds | Minimum | ||
Fair value | ||
Measurement input | 0 | 0 |
Measurement Input, Sale proceeds | Maximum | ||
Fair value | ||
Measurement input | 621 | 621 |
Measurement Input, Sale proceeds | Weighted average | ||
Fair value | ||
Measurement input | 40 | 35 |
Measurement Input, Discount for market liquidity | ||
Fair value | ||
Measurement input | 0.60 | 0.64 |
Nonrecurring Basis | ||
Fair value | ||
Impaired assets | $ | $ 740 | $ 4,380 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Debt (Details) - Fixed Rate Debt - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,297,000 | $ 1,361,000 |
Long-Term Debt, Fair Value by Fair Value Hierarchy Level | us-gaap:FairValueInputsLevel2Member | us-gaap:FairValueInputsLevel2Member |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,296,515 | $ 1,296,325 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Total stock-based compensation expense | $ 3,570 | $ 3,249 |
Equity awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Total stock-based compensation expense | 3,067 | 2,663 |
Liability awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | ||
Total stock-based compensation expense | $ 503 | $ 586 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Restricted stock | |
Shares | |
Non-vested awards at beginning of period (in shares) | 2,578 |
Granted (in shares) | 1,861 |
Vested (in shares) | (1,074) |
Canceled (in shares) | (146) |
Non-vested awards at end of period (in shares) | 3,219 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested awards at beginning of period (in dollars per share) | $ / shares | $ 10.35 |
Granted (in dollars per share) | $ / shares | 9.03 |
Vested (in dollars per share) | $ / shares | 10.37 |
Canceled (in dollars per share) | $ / shares | 9.42 |
Non-vested awards at end of period (in dollars per share) | $ / shares | $ 9.62 |
Cash-settled units | |
Shares | |
Non-vested awards at end of period (in shares) | 508 |
Stock-settled awards and units | |
Shares | |
Non-vested awards at end of period (in shares) | 2,711 |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-vested Awards (Details) - Restricted stock and restricted stock units $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Unrecognized compensation | |
Unrecognized compensation cost related to unvested awards (in dollars) | $ 24.3 |
Weighted-average period over which the expected unrecognized compensation cost related to unvested stock options will be recognized | 2 years 2 months 12 days |
Commitments and Contingencies -
Commitments and Contingencies - Tax Matters - Loss contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Non-income based tax audits | ||
Loss Contingencies | ||
Accrued liability for the outcomes of non-income based tax audits | $ 5.6 | $ 5.8 |
Non-income based tax audits in contested hearing phase | ||
Loss Contingencies | ||
Accrued liability for the outcomes of non-income based tax audits | $ 0.6 | $ 0.6 |
Related Party Transactions (Det
Related Party Transactions (Details) - Affiliated Entity $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)director | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Old Ocean Reserves | Archrock, Inc. | |||
Related Party Transaction | |||
Ownership interest (percent) | 11.00% | ||
Old Ocean Reserves | |||
Related Party Transaction | |||
Minimum ownership interest of outstanding shares required to elect a board of director (percent) | 7.50% | ||
Number of directors shareholders have right to designate | director | 1 | ||
Hilcorp and affiliates | |||
Related Party Transaction | |||
Revenue from related party transactions | $ 9.4 | $ 9.5 | |
Due from related party | $ 3 | $ 3.7 |
Segments - Number (Details)
Segments - Number (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Segments | |
Number of reportable segments | 2 |
Segments - Revenue and Gross Ma
Segments - Revenue and Gross Margin by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue and other financial information by reportable segment | ||
Revenue | $ 197,201 | $ 195,431 |
Gross margin | 104,062 | 108,283 |
Contract Operations | ||
Revenue and other financial information by reportable segment | ||
Revenue | 163,656 | 166,034 |
Gross margin | 99,155 | 104,669 |
Aftermarket Services | ||
Revenue and other financial information by reportable segment | ||
Revenue | 33,545 | 29,397 |
Gross margin | $ 4,907 | $ 3,614 |
Segments - Reconciliation of Ne
Segments - Reconciliation of Net Income to Gross Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Reconciliation Net Income (Loss) to Gross Margin | ||
Total gross margin | $ 104,062 | $ 108,283 |
Less: | ||
Selling, general and administrative | 27,773 | 25,084 |
Depreciation and amortization | 43,039 | 45,712 |
Long-lived and other asset impairment | 7,416 | 7,073 |
Restructuring charges | 897 | |
Interest expense | 25,246 | 31,245 |
(Gain) loss on sale of assets, net | (2,112) | (11,032) |
Other (income) expense, net | 36 | (1,889) |
Income (loss) before income taxes | $ 2,664 | $ 11,193 |
Impact of Hurricane (Details)
Impact of Hurricane (Details) $ in Millions | Dec. 31, 2021USD ($) |
Hurricane Ida | |
Natural disaster | |
Insurance recovery receivable | $ 2.8 |
Subsequent Events (Details)
Subsequent Events (Details) hp in Thousands, $ in Thousands | May 06, 2022USD ($)CompressorUnithp | Apr. 21, 2022 | Mar. 31, 2021USD ($) |
Subsequent Events | |||
Gain on sale | $ 5,995 | ||
Disposed of by Sale | May 2022 Disposition | Forecasted | |||
Subsequent Events | |||
Cash consideration | $ 55,500 | ||
Gain on sale | $ 17,000 | ||
Subsequent Event | ECOTEC | |||
Subsequent Events | |||
Ownership percentage agreed to acquire | 25.00% | ||
Subsequent Event | Disposed of by Sale | May 2022 Disposition | |||
Subsequent Events | |||
Number of compressors | CompressorUnit | 380 | ||
Compressor horsepower | hp | 70 |