Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35195 | |
Entity Registrant Name | CSI Compressco LP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3450907 | |
Entity Address, Address Line One | 1735 Hughes Landing Boulevard, Suite 200 | |
Entity Address, City or Town | The Woodlands, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77380 | |
City Area Code | 832 | |
Local Phone Number | 365-2257 | |
Title of 12(b) Security | COMMON UNITS REPRESENTING LIMITED PARTNERSHIP INTERESTS | |
Trading Symbol | CCLP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Common Stock Shares Outstanding | 141,995,028 | |
Entity Central Index Key | 0001449488 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 96,779 | $ 84,522 | $ 188,150 | $ 164,534 |
Cost of revenues (excluding depreciation and amortization expense): | ||||
Total cost of revenues | 53,495 | 47,563 | 105,298 | 90,204 |
Depreciation and amortization | 19,086 | 19,346 | 37,937 | 38,705 |
Selling, general, and administrative expense | 12,291 | 10,911 | 22,270 | 21,752 |
Interest expense, net of capitalized interest of $7 and $10 in 2023 and $103 and $181 in 2022 | 13,747 | 12,556 | 27,062 | 24,937 |
Other (income) expense, net | (191) | 325 | (707) | 869 |
Loss before taxes and discontinued operations | (1,649) | (6,179) | (3,710) | (11,933) |
Provision for income taxes | 924 | 741 | 1,476 | 1,557 |
Loss from continuing operations | (2,573) | (6,920) | (5,186) | (13,490) |
Income (loss) from discontinued operations, net of taxes | 0 | 92 | 0 | 92 |
Net loss | (2,573) | (6,828) | (5,186) | (13,398) |
General partner interest in net loss | (12) | (32) | (24) | (63) |
Common units interest in net loss | $ (2,561) | $ (6,796) | $ (5,162) | $ (13,335) |
Earnings Per Unit [Abstract] | ||||
Net loss per common unit, basic (in dollars per share) | $ (0.02) | $ (0.05) | $ (0.04) | $ (0.09) |
Net loss per common unit, diluted (in dollars per share) | $ (0.02) | $ (0.05) | $ (0.04) | $ (0.09) |
Weighted average common units outstanding: | ||||
Basic (in shares) | 141,995,028 | 141,213,944 | 141,804,367 | 140,993,400 |
Diluted (in shares) | 141,995,028 | 141,213,944 | 141,804,367 | 140,993,400 |
Contract services | ||||
Revenues: | ||||
Total revenues | $ 70,521 | $ 64,348 | $ 140,168 | $ 127,155 |
Cost of revenues (excluding depreciation and amortization expense): | ||||
Total cost of revenues | 35,767 | 33,585 | 72,594 | 64,625 |
Aftermarket services | ||||
Revenues: | ||||
Total revenues | 21,209 | 16,213 | 38,560 | 29,081 |
Cost of revenues (excluding depreciation and amortization expense): | ||||
Total cost of revenues | 16,924 | 13,362 | 31,138 | 23,995 |
Equipment rentals | ||||
Revenues: | ||||
Total revenues | 4,773 | 3,618 | 8,887 | 7,118 |
Cost of revenues (excluding depreciation and amortization expense): | ||||
Total cost of revenues | 555 | 451 | 1,110 | 967 |
Equipment sales | ||||
Revenues: | ||||
Total revenues | 276 | 343 | 535 | 1,180 |
Cost of revenues (excluding depreciation and amortization expense): | ||||
Total cost of revenues | $ 249 | $ 165 | $ 456 | $ 617 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Capitalized interest | $ 7 | $ 103 | $ 10 | $ 181 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (2,573) | $ (6,828) | $ (5,186) | $ (13,398) |
Foreign currency translation adjustment, net of tax of $0 in 2023 and 2022 | 0 | (97) | 0 | (85) |
Comprehensive loss | $ (2,573) | $ (6,925) | $ (5,186) | $ (13,483) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||||
Foreign currency translation adjustment, tax | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 12,316 | $ 8,475 |
Inventories | 52,361 | 45,902 |
Prepaid expenses and other current assets | 7,252 | 7,905 |
Total current assets | 128,268 | 128,315 |
Property, plant, and equipment: | ||
Land and building | 7,227 | 7,227 |
Compressors and equipment | 1,120,944 | 1,103,657 |
Vehicles | 8,604 | 8,640 |
Construction in progress | 30,906 | 37,183 |
Total property, plant, and equipment | 1,167,681 | 1,156,707 |
Less accumulated depreciation | (638,814) | (611,734) |
Net property, plant, and equipment | 528,867 | 544,973 |
Other assets: | ||
Intangible assets, net of accumulated amortization of $38,106 as of June 30, 2023 and $36,627 as of December 31, 2022 | 17,661 | 19,140 |
Operating lease right-of-use assets | 27,841 | 27,205 |
Deferred tax assets | 3 | 3 |
Other assets | 2,959 | 2,767 |
Total other assets | 48,464 | 49,115 |
Total assets | 705,599 | 722,403 |
Current liabilities: | ||
Accounts payable | 25,146 | 34,589 |
Unearned income | 4,915 | 2,590 |
Accrued liabilities and other | 43,931 | 47,076 |
Total current liabilities | 73,992 | 84,255 |
Other liabilities: | ||
Long-term debt, net | 635,566 | 634,016 |
Deferred tax liabilities | 1,174 | 1,245 |
Operating lease liabilities | 18,194 | 19,419 |
Other long-term liabilities | 9,392 | 8,742 |
Total other liabilities | 664,326 | 663,422 |
Commitments and contingencies | ||
Partners' capital: | ||
General partner interest | (1,656) | (1,618) |
Common units (141,995,028 units issued and outstanding at June 30, 2023 and 141,237,462 units issued and outstanding at December 31, 2022) | (16,657) | (9,250) |
Accumulated other comprehensive loss | (14,406) | (14,406) |
Total partners' capital | (32,719) | (25,274) |
Total liabilities and partners' capital | 705,599 | 722,403 |
Nonrelated Party | ||
Current assets: | ||
Trade accounts receivable, net of allowance for credit losses of $389 as of June 30, 2023 and $736 as of December 31, 2022 | 55,641 | 65,085 |
Affiliated Entity | ||
Current assets: | ||
Trade accounts receivable, net of allowance for credit losses of $389 as of June 30, 2023 and $736 as of December 31, 2022 | $ 698 | $ 948 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Trade accounts receivable, allowances for doubtful accounts | $ 389 | $ 736 |
Intangible assets, accumulated amortization | $ 38,106 | $ 36,627 |
Partners' capital: | ||
Common units issued (in shares) | 141,995,028 | 141,237,462 |
Common units outstanding (in shares) | 141,995,028 | 141,237,462 |
Consolidated Statements of Part
Consolidated Statements of Partners' Capital - USD ($) shares in Thousands, $ in Thousands | Total | General Partner | Common Unitholders | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2021 | $ 1,159 | $ (1,486) | $ 17,049 | $ (14,404) |
Beginning balance (in shares) at Dec. 31, 2021 | 140,386 | |||
Partners' capital rollforward | ||||
Net loss | (6,570) | (31) | $ (6,539) | |
Distributions | (1,411) | (7) | (1,404) | |
Equity compensation, net | 52 | $ 52 | ||
Vesting of Phantom Units (in shares) | 828 | |||
Translation adjustment, net of taxes of $0 | 12 | 12 | ||
Ending balance at Mar. 31, 2022 | (6,758) | (1,524) | $ 9,158 | (14,392) |
Ending balance (in shares) at Mar. 31, 2022 | 141,214 | |||
Beginning balance at Dec. 31, 2021 | 1,159 | (1,486) | $ 17,049 | (14,404) |
Beginning balance (in shares) at Dec. 31, 2021 | 140,386 | |||
Partners' capital rollforward | ||||
Net loss | (13,398) | |||
Translation adjustment, net of taxes of $0 | (85) | |||
Ending balance at Jun. 30, 2022 | (14,671) | (1,563) | $ 1,381 | (14,489) |
Ending balance (in shares) at Jun. 30, 2022 | 141,214 | |||
Beginning balance at Mar. 31, 2022 | (6,758) | (1,524) | $ 9,158 | (14,392) |
Beginning balance (in shares) at Mar. 31, 2022 | 141,214 | |||
Partners' capital rollforward | ||||
Net loss | (6,828) | (32) | $ (6,796) | |
Distributions | (1,419) | (7) | (1,412) | |
Equity compensation, net | 431 | 431 | ||
Translation adjustment, net of taxes of $0 | (97) | (97) | ||
Ending balance at Jun. 30, 2022 | (14,671) | (1,563) | $ 1,381 | (14,489) |
Ending balance (in shares) at Jun. 30, 2022 | 141,214 | |||
Beginning balance at Dec. 31, 2022 | (25,274) | (1,618) | $ (9,250) | (14,406) |
Beginning balance (in shares) at Dec. 31, 2022 | 141,237 | |||
Partners' capital rollforward | ||||
Net loss | (2,613) | (12) | $ (2,601) | |
Distributions | (1,421) | (7) | (1,414) | |
Equity compensation, net | 75 | $ 75 | ||
Vesting of Phantom Units (in shares) | 758 | |||
Translation adjustment, net of taxes of $0 | 0 | 0 | ||
Ending balance at Mar. 31, 2023 | (29,233) | (1,637) | $ (13,190) | (14,406) |
Ending balance (in shares) at Mar. 31, 2023 | 141,995 | |||
Beginning balance at Dec. 31, 2022 | (25,274) | (1,618) | $ (9,250) | (14,406) |
Beginning balance (in shares) at Dec. 31, 2022 | 141,237 | |||
Partners' capital rollforward | ||||
Net loss | (5,186) | |||
Translation adjustment, net of taxes of $0 | 0 | |||
Ending balance at Jun. 30, 2023 | (32,719) | (1,656) | $ (16,657) | (14,406) |
Ending balance (in shares) at Jun. 30, 2023 | 141,995 | |||
Beginning balance at Mar. 31, 2023 | (29,233) | (1,637) | $ (13,190) | (14,406) |
Beginning balance (in shares) at Mar. 31, 2023 | 141,995 | |||
Partners' capital rollforward | ||||
Net loss | (2,573) | (12) | $ (2,561) | |
Distributions | (1,427) | (7) | (1,420) | |
Equity compensation, net | 514 | $ 514 | ||
Vesting of Phantom Units (in shares) | 0 | |||
Translation adjustment, net of taxes of $0 | 0 | |||
Ending balance at Jun. 30, 2023 | $ (32,719) | $ (1,656) | $ (16,657) | $ (14,406) |
Ending balance (in shares) at Jun. 30, 2023 | 141,995 |
Consolidated Statements of Pa_2
Consolidated Statements of Partners' Capital (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Partners' Capital [Abstract] | ||||
Distributions (in USD per units) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Foreign currency translation adjustment, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net loss | $ (5,186) | $ (13,398) |
Reconciliation of net loss to cash provided by operating activities: | ||
Depreciation and amortization | 37,937 | 38,705 |
Provision (benefit) for deferred income taxes | (229) | 55 |
Equity compensation expense | 589 | 483 |
Provision (recovery) for doubtful accounts | (1) | 65 |
Amortization of deferred financing costs | 39 | 262 |
Other non-cash charges and credits | 179 | (264) |
Gain on sale of property, plant, and equipment | 664 | 216 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 9,629 | (17,220) |
Inventories | (10,671) | (13,897) |
Prepaid expenses and other current assets | 343 | (435) |
Accounts payable and accrued expenses | (8,778) | 6,403 |
Other | 111 | 594 |
Net cash provided by operating activities | 24,626 | 1,569 |
Investing activities: | ||
Purchases of property, plant, and equipment, net | (27,707) | (21,032) |
Proceeds from sale of property, plant, and equipment | 5,752 | 3,267 |
Net cash used in investing activities | (21,955) | (17,765) |
Financing activities: | ||
Proceeds from long-term debt | 217,245 | 20,595 |
Payments of long-term debt | (215,669) | (6,803) |
Distributions | (2,848) | (2,829) |
Equipment financing lease, net | 2,484 | 0 |
Other financing activities | (65) | 6,981 |
Net cash (used in) provided by financing activities | 1,147 | 17,944 |
Effect of exchange rate changes on cash | 23 | 18 |
Increase (decrease) in cash and cash equivalents | 3,841 | 1,766 |
Cash and cash equivalents at beginning of period | 8,475 | 6,598 |
Cash and cash equivalents at end of period | 12,316 | 8,364 |
Supplemental cash flow information: | ||
Interest paid | 26,262 | 23,636 |
Income taxes paid | 2,539 | 4,170 |
Decrease (increase) in accrued capital expenditures | $ 4,896 | $ (947) |
Organization, Basis of Presenta
Organization, Basis of Presentation, and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES Organization CSI Compressco LP, a Delaware limited partnership, is a provider of compression and treating services. Natural gas compression is used for oil production, gathering, artificial lift, transmission, processing, and storage. Treating services include the removal of contaminants from a natural gas stream and cooling to reduce the temperature of produced gas and liquids. We also sell used standard compressor packages and provide aftermarket services and compressor package parts and components manufactured by third-party suppliers. We provide contract and treating services and compressor parts and component sales to a broad base of natural gas and oil exploration and production, midstream, and transmission companies operating throughout many of the onshore producing regions of the United States as well as in a number of international locations, including the countries of Mexico, Canada, Argentina and Chile. Unless the context requires otherwise, when we refer to “the Partnership,” “we,” “us,” and “our,” we are describing CSI Compressco LP and its wholly owned subsidiaries. Presentation Our unaudited consolidated financial statements include the accounts of our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. In the opinion of our management, our unaudited consolidated financial statements as of June 30, 2023, and for the three and six-month periods ended June 30, 2023 and June 30, 2022 include all normal recurring adjustments that are necessary to provide a fair statement of our results for these interim periods. Operating results for the three and six-month period ended June 30, 2023 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2023. The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (“SEC”) and do not include all information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2022 and notes thereto included in our Annual Report on Form 10-K , which we filed with the SEC on March 13, 2023. Segments Our general partner has concluded that we operate in one reportable segment. Significant Accounting Policies Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2022 included in our Annual Report on Form 10-K . There have been no significant changes in our accounting policies or the application thereof during the three and six-months ended June 30, 2023. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, and impairments during the reporting period. Actual results could differ from those estimates, and such differences could be material. Cash Equivalents We consider all highly liquid cash investments with maturities of three months or less when purchased to be cash equivalents. We have concentrated credit risk for cash by maintaining deposits in a major bank, which may at times exceed amounts covered by insurance provided by the United States Federal Deposit Insurance Corporation (“FDIC”). We monitor the financial health of the bank and have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk. Management believes the financial institutions are financially sound and risk of loss is minimal. Financial Instruments Financial instruments that subject us to concentrations of credit risk consist principally of trade accounts receivable, which are primarily due from companies of varying size engaged in oil and gas activities in the United States, Canada, Mexico, Argentina, Chile, and Egypt. Our policy is to review the financial condition of customers before extending credit and periodically updating customer credit information. Payment terms are on a short-term basis. The risk of loss from the inability to collect trade receivables is heightened during prolonged periods of low oil and natural gas commodity prices. We have currency exchange rate risk exposure related to transactions denominated in a foreign currency as well as to investments in certain of our international operations. Our risk management activities include the use of foreign currency forward purchase and sale derivative contracts as part of a program designed to mitigate the currency exchange rate risk exposure on selected international operations. We have $63.8 million outstanding under our variable rate revolving credit facilities as of June 30, 2023 and face market risk exposure related to changes in applicable interest rates. Foreign Currencies We have designated the Canadian dollar, Mexican peso, Egyptian pound, Chilean peso and the Euro as the functional currency for Canada, Mexico, Egypt, Chile, and the Netherlands, respectively. We are exposed to fluctuations between the U.S. dollar and certain foreign currencies, including the Canadian dollar, the Mexican peso, the Argentine peso, the Egyptian pound, the Chilean peso, and Euro as a result of our international operations. Foreign currency exchange (gains) losses are included in other (income) expense, net and totaled $0.8 million and $0.8 million during the three and six-month periods ended June 30, 2023, respectively, and $0.7 million and $1.2 million during the three and six-month periods ended June 30, 2022 , respectively. Leases Lessee As a lessee, unless the lease meets the criteria of short-term and is excluded per our policy election described below, we initially recognize a lease liability and related right-of-use asset on the commencement date. The right-of-use asset represents our right to use an underlying asset and the lease liability represents our obligation to make lease payments to the lessor over the lease term. All of our long-term leases are operating leases and are included in operating lease right-of-use assets, accrued liabilities and other, and operating lease liabilities in our consolidated balance sheet as of June 30, 2023 and December 31, 2022. We determine whether a contract is or contains a lease at inception of the contract. Where we are a lessee in a contract that includes an option to extend or terminate the lease, we include the extension period or exclude the period covered by the termination option in our lease term in determining the right-of-use asset and lease liability, if it is reasonably certain that we would exercise the option. As an accounting policy election, we do not include short-term leases on our balance sheet. Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to exercise. The lease payments for short-term leases are included as operating lease costs on a straight-line basis over the lease term in cost of revenues or selling, general, and administrative expense based on the use of the underlying asset. We recognize lease costs for variable lease payments not included in the determination of a lease liability in the period in which an obligation is incurred. As allowed by U.S. GAAP, we do not separate nonlease components from the associated lease component for our contract services contracts and instead account for those components as a single component based on the accounting treatment of the predominant component. In our evaluation of whether Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842 “Leases” or ASC 606 “Revenue from Contracts with Customers” is applicable to the combined component based on the predominant component, we determined the services nonlease component is predominant, resulting in the ongoing recognition of our compression services contracts following ASC 606. Our operating leases are recognized at the present value of lease payments over the lease term. When the implicit discount rate is not readily determinable, we use our incremental borrowing rate to calculate the discount rate used to determine the present value of lease payments. Consistent with other long-lived assets or asset groups that are held and used, we test for impairment of our right-of-use assets when impairment indicators are present. Lessor Our agreements for rental equipment contain an operating lease component under ASC 842 because we, as the lessor, retain substantial exposure to changes in the underlying asset’s value, unlike a sale or secured lending arrangement. Therefore, we do not derecognize the underlying asset, and recognize income associated with providing the lessee the right to control the use of the asset ratably over the lease term. As a lessor, we recognize operating lease revenue on our statement of operations as equipment rentals. This revenue is recognized on a straight-line basis over the term of the lease based on the monthly rate in the agreement. The leased asset remains on the balance sheet consistent with other property, plant and equipment. Cash receipts associated with all leases are classified as cash flows from operating activities in the statement of cash flows. The leased equipment primarily consists of the Spartan Treating amine plants, gas coolers and production equipment. All of this equipment is modular and skid mounted. It can be moved between locations. Lease terms for this equipment vary in length. Amine plants range from one Allowance for Credit Losses Trade accounts receivable are stated at their net realizable value. The allowance for credit losses against gross trade accounts receivable reflects the best estimate of expected credit losses of the receivables portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. In developing the estimate for expected credit losses, trade accounts receivables are segmented into pools of assets depending on market (U.S. versus international), delinquency status, and customer type, and fixed reserve percentages are established for each pool of trade accounts receivables. In determining the reserve percentages for each pool of trade accounts receivables, we considered our historical experience with certain customers and customer types, regulatory and legal environments, country and political risk, and other relevant current and future forecasted macroeconomic factors. These credit risk indicators are monitored on a quarterly basis to determine whether there have been any changes in the economic environment that would indicate the established reserve percentages should be adjusted and are considered on a regional basis to reflect more geographic-specific metrics. Additionally, write-offs and recoveries of customer receivables are tracked against collections on a quarterly basis to determine whether the reserve percentages remain appropriate. When management becomes aware of certain customer-specific factors that impact credit risk, specific allowances for these known troubled accounts are recorded. Trade accounts receivable are written off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted. As of June 30, 2023, additions to the allowance for credit losses, write-offs and recoveries of customer receivables were not material to our condensed consolidated financial statements. Inventories Inventories consist primarily of compressor package spare parts and supplies and work in process, and cost is determined using the weighted average cost method. The cost of work in progress is determined using the specific identification method. Impairments and Other Charges Impairments of long-lived assets, including identified intangible assets, are determined periodically, when indicators of impairment are present. If such indicators are present, the determination of the amount of impairment is based on our judgments as to the future undiscounted operating cash flows to be generated from the relevant assets throughout their remaining estimated useful lives. If these undiscounted cash flows are less than the carrying amount of the related asset, an impairment is recognized for the excess of the carrying value over its fair value. Fair value of intangible assets is generally determined using the discounted present value of future cash flows using discount rates commensurate with the risks inherent with the specific assets. Assets held for disposal are recorded at the lower of carrying value or estimated fair value less estimated selling costs. We did not record any impairments of long-lived assets during the three and six-month periods ended June 30, 2023 and June 30, 2022. Sale of Assets During June 2023, we entered into a purchase and sale agreement for the sale of our equipment in Egypt for a total sale price of $5.8 million. The sale of the equipment resulted in a loss of $0.2 million during the three and six-months ended June 30, 2023, which is reflected in other (income) expense, net in our statement of operations. As of June 30, 2023, we no longer have operations in Egypt. Income Taxes Our operations are not subject to U.S. federal income tax other than the operations that are conducted through taxable subsidiaries. We incur state and local income taxes in certain areas of the U.S. in which we conduct business. We incur income taxes and are subject to withholding requirements related to certain of our operations in Latin America, Canada, and other foreign countries in which we operate. Furthermore, we also incur Texas Margin Tax, which, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, is classified as an income tax for reporting purposes. A portion of the carrying value of certain deferred tax assets is subject to a valuation allowance. Earnings Per Common Unit Our computations of earnings per common unit are based on the weighted average number of common units outstanding during the applicable period. Basic earnings per common unit are determined by dividing net income (loss) allocated to the common units after deducting the amount allocated to our general partner by the weighted average number of outstanding common units during the period. When computing earnings per common unit under the two class method in periods when distributions are greater than earnings, the amount of the distribution is deducted from net income (loss) and the excess of distributions over earnings is allocated between the general partner and common units based on how our Partnership Agreement allocates net losses. Diluted earnings per common unit are computed using the treasury stock method, which considers the potential future issuance of limited partner common units. Unvested phantom units are not included in basic earnings per common unit, as they are not considered to be participating securities, but are included in the calculation of diluted earnings per common unit. For the three and six-month periods ended June 30, 2023 and June 30, 2022, all unvested phantom units were excluded from the calculation of diluted common units because the impact was anti-dilutive. Fair Value Measurements We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. We utilize fair value measurements on a recurring basis in the accounting for our foreign currency forward purchase and sale derivative contracts. For these fair value measurements, we utilize the quoted value (a Level 2 fair value measurement). Refer to Note 7 – “Fair Value Measurements” for further discussion. Fair value measurements are also utilized on a nonrecurring basis, such as in the allocation of purchase consideration for acquisition transactions to the assets and liabilities acquired, including intangible assets (a Level 3 fair value measurement) and for the impairment of long-lived assets (a Level 3 fair value measurement). Distributions On January 19, 2023 and April 17, 2023, the board of directors of our general partner declared a cash distribution attributable to the respective quarter ended of $0.01 per outstanding common unit. This distribution equates to a distribution of $0.04 per outstanding common unit on an annualized basis. This quarterly distribution was paid on February 14, 2023 and May 15, 2023 to each of the holders of common units of record as of the close of business on January 31, 2023 and April 30, 2023, respectively. Discontinued Operations On July 2, 2020, we completed the sale of our Midland manufacturing facility. The Midland facility was used to design, fabricate and assemble new standard and customized compressor packages for our new unit sales business. In connection with the Midland manufacturing facility sale, we entered into an agreement with the buyer to continue to operate a portion of the facility, which allowed us to close out the remaining backlog for the new unit sales business and to continue to operate our aftermarket services business at that location for an interim period. Following completion of the last unit in October 2020, we ceased fabricating new compressor packages for sales to third parties or for our own service fleet. The operations associated with the new unit sales business were previously reported in equipment sales revenues and are now reflected as discontinued operations in our financial statements for all periods presented. Used equipment sales revenue continues to be included in equipment sales revenue. Loss from discontinued operations, net of tax for the three and six-month periods ended June 30, 2022, was $0.1 million gain related to the warranty reserve not being utilized. New Accounting Pronouncements Standards adopted in 2023 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS As of June 30, 2023 , we had $216.7 million of remaining contractual performance obligations for compression services. As a practical expedient, thi s amount does not include revenue for compression service contracts whose original expected duration is less than twelve months an d does not consider the effects of the time value of money . Expected revenue to be recognized in the future as of June 30, 2023 for completion of performance obligations of compression service contracts are as follows: 2023 2024 2025 2026 Thereafter Total (In Thousands) Compression service contracts remaining performance obligations $ 56,278 $ 102,832 $ 43,594 $ 12,189 $ 1,785 $ 216,678 Our contract asset balances included in trade accounts receivable in our consolidated balance sheet, primarily associated with revenue accruals prior to invoicing, were $2.2 million and $4.2 million as of June 30, 2023 and December 31, 2022, respectively. The following table reflects the changes in unearned income in our consolidated balance sheets for the periods indicated: Six Months Ended 2023 2022 (In Thousands) Unearned income, beginning of period $ 2,590 $ 2,187 Additional unearned income 6,550 3,279 Revenue recognized (4,225) (3,246) Unearned income, end of period $ 4,915 $ 2,220 Unearned income is included in accrued liabilities and other on the consolidated balance sheets. As of June 30, 2023 and December 31, 2022, contract costs were immaterial. Disaggregated revenue from contracts with customers by geography is as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In Thousands) Contract services United States $ 64,412 $ 53,935 $ 128,089 $ 106,861 International 6,109 10,413 12,079 20,294 70,521 64,348 140,168 127,155 Aftermarket services United States 20,878 15,860 37,771 28,550 International 331 353 789 531 21,209 16,213 38,560 29,081 Equipment rentals United States 3,161 2,105 5,966 4,071 International 1,612 1,513 2,921 3,047 4,773 3,618 8,887 7,118 Equipment sales United States 180 302 264 1,017 International 96 41 271 163 276 343 535 1,180 Total Revenue United States 88,631 72,202 172,090 140,499 International 8,148 12,320 16,060 24,035 $ 96,779 $ 84,522 $ 188,150 $ 164,534 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Components of inventories as of June 30, 2023 and December 31, 2022, are as follows: June 30, 2023 December 31, 2022 (In Thousands) Parts and supplies $ 47,064 $ 44,042 Work in progress 5,297 1,860 Total inventories $ 52,361 $ 45,902 Inventories consist primarily of compressor package spare parts and supplies. Work in progress inventories consist of work in progress for our aftermarket business that has not been invoiced. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
LEASES | LEASES Lessee Accounting We have operating leases for some of our office space, warehouse space, operating locations, and machinery and equipment. Our leases have remaining lease terms up to ten years. Some of our leases have options to extend for various periods, while some have termination options with prior notice of generally 30 days or six months. Our leases generally require us to pay all maintenance and insurance costs. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease costs are included in either cost of revenues or selling, general, and administrative expense depending on the use of the underlying asset. Total lease expense (inclusive of lease expense for leases not included on our consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less), was $4.0 million and $7.9 million for the three and six month period ended June 30, 2023, respectively, of which $0.4 million and $0.6 million respectively, related to short-term leases. Total lease expense was $4.1 million and $8.3 million for the three and six month period ended June 30, 2022, respectively, of which $1.2 million and $2.6 million respectively, related to short-term leases. Variable rent expense was not material. Operating lease supplemental cash flow information: Six Months Ended June 30, 2023 2022 (In Thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 7,338 $ 5,684 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 6,182 $ 9,104 Supplemental balance sheet information: June 30, 2023 December 31, 2022 (In Thousands) Operating leases: Operating right-of-use asset $ 27,841 $ 27,205 Accrued liabilities and other $ 9,604 $ 7,620 Operating lease liabilities 18,194 19,419 Total operating lease liabilities $ 27,798 $ 27,039 Additional operating lease information: June 30, 2023 December 31, 2022 Weighted average remaining lease term: Operating leases 3.79 years 4.51 years Weighted average discount rate: Operating leases 10.05 % 9.93 % Future minimum lease payments by year and in the aggregate, under non-cancelable operating leases with terms in excess of one year, consist of the following at June 30, 2023: Operating Leases (In Thousands) Remainder of 2023 $ 6,559 2024 9,695 2025 6,221 2026 5,390 2027 2,540 Thereafter 2,781 Total lease payments 33,186 Less imputed interest (5,388) Total lease liabilities $ 27,798 Lessor Accounting Our leased equipment primarily consists of amine plants, gas coolers, and other production equipment. Certain of our agreements with our customers for rental equipment contain an operating lease component under ASC 842 because (i) there are identified assets, (ii) the customer has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use, and (iii) the customer directs the use of the identified assets throughout the period of use. We have elected to apply the practical expedient provided to lessors to combine the lease and non-lease component of a contract where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component. Our lease agreements generally have contract terms based on monthly rates. Lease revenue is recognized straight-line based on these monthly rates. We do not provide an option for the lessee to purchase the rented assets at the end of the lease and the lessees do not provide residual value guarantees on the rented assets. We recognized operating lease revenue, which is included in “Equipment rentals” on the consolidated statements of operations as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In Thousands) (In Thousands) Equipment rentals $ 4,773 $ 3,618 8,887 7,118 The following table presents the maturity of lease payments for operating lease agreements in effect as of June 30, 2023. This presentation includes minimum fixed lease payments and does not include an estimate of variable lease consideration. These agreements have remaining lease terms ranging from 1 month to 6 years. The following table presents the undiscounted cash flows expected to be received related to these agreements: 2023 2024 2025 2026 2027 Thereafter (In Thousands) Future minimum lease revenue $ 13,145 $ 8,973 $ 2,388 $ 1,576 $ 1,576 $ 2,233 |
LEASES | LEASES Lessee Accounting We have operating leases for some of our office space, warehouse space, operating locations, and machinery and equipment. Our leases have remaining lease terms up to ten years. Some of our leases have options to extend for various periods, while some have termination options with prior notice of generally 30 days or six months. Our leases generally require us to pay all maintenance and insurance costs. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Lease costs are included in either cost of revenues or selling, general, and administrative expense depending on the use of the underlying asset. Total lease expense (inclusive of lease expense for leases not included on our consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less), was $4.0 million and $7.9 million for the three and six month period ended June 30, 2023, respectively, of which $0.4 million and $0.6 million respectively, related to short-term leases. Total lease expense was $4.1 million and $8.3 million for the three and six month period ended June 30, 2022, respectively, of which $1.2 million and $2.6 million respectively, related to short-term leases. Variable rent expense was not material. Operating lease supplemental cash flow information: Six Months Ended June 30, 2023 2022 (In Thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 7,338 $ 5,684 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 6,182 $ 9,104 Supplemental balance sheet information: June 30, 2023 December 31, 2022 (In Thousands) Operating leases: Operating right-of-use asset $ 27,841 $ 27,205 Accrued liabilities and other $ 9,604 $ 7,620 Operating lease liabilities 18,194 19,419 Total operating lease liabilities $ 27,798 $ 27,039 Additional operating lease information: June 30, 2023 December 31, 2022 Weighted average remaining lease term: Operating leases 3.79 years 4.51 years Weighted average discount rate: Operating leases 10.05 % 9.93 % Future minimum lease payments by year and in the aggregate, under non-cancelable operating leases with terms in excess of one year, consist of the following at June 30, 2023: Operating Leases (In Thousands) Remainder of 2023 $ 6,559 2024 9,695 2025 6,221 2026 5,390 2027 2,540 Thereafter 2,781 Total lease payments 33,186 Less imputed interest (5,388) Total lease liabilities $ 27,798 Lessor Accounting Our leased equipment primarily consists of amine plants, gas coolers, and other production equipment. Certain of our agreements with our customers for rental equipment contain an operating lease component under ASC 842 because (i) there are identified assets, (ii) the customer has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use, and (iii) the customer directs the use of the identified assets throughout the period of use. We have elected to apply the practical expedient provided to lessors to combine the lease and non-lease component of a contract where the revenue recognition pattern is the same and where the lease component, when accounted for separately, would be considered an operating lease. The practical expedient also allows a lessor to account for the combined lease and non-lease components under ASC 606, Revenue from Contracts with Customers, when the non-lease component is the predominant element of the combined component. Our lease agreements generally have contract terms based on monthly rates. Lease revenue is recognized straight-line based on these monthly rates. We do not provide an option for the lessee to purchase the rented assets at the end of the lease and the lessees do not provide residual value guarantees on the rented assets. We recognized operating lease revenue, which is included in “Equipment rentals” on the consolidated statements of operations as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In Thousands) (In Thousands) Equipment rentals $ 4,773 $ 3,618 8,887 7,118 The following table presents the maturity of lease payments for operating lease agreements in effect as of June 30, 2023. This presentation includes minimum fixed lease payments and does not include an estimate of variable lease consideration. These agreements have remaining lease terms ranging from 1 month to 6 years. The following table presents the undiscounted cash flows expected to be received related to these agreements: 2023 2024 2025 2026 2027 Thereafter (In Thousands) Future minimum lease revenue $ 13,145 $ 8,973 $ 2,388 $ 1,576 $ 1,576 $ 2,233 |
Long-Term Debt and Other Borrow
Long-Term Debt and Other Borrowings | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND OTHER BORROWINGS | LONG-TERM DEBT AND OTHER BORROWINGS Long-term debt consists of the following: June 30, 2023 December 31, 2022 Scheduled Maturity (In Thousands) Credit Agreement (1) June 29, 2025 $ 21,465 $ 6,312 Spartan Credit Agreement (2) October 17, 2025 41,335 54,912 7.50% First Lien Notes due 2025 (3) April 1, 2025 400,187 400,293 10.00%/10.75% Second Lien Notes due 2026 (4) April 1, 2026 172,579 172,499 Total long-term debt 635,566 634,016 Other borrowings (5) Various 16,613 14,129 Total long-term debt and other borrowings $ 652,179 $ 648,145 (1) Net of unamortized deferred financing costs of $0.3 million and $0.4 million as of June 30, 2023 and December 31, 2022, respectively. (2) Net of unamortized deferred financing costs of $0.7 million and $0.6 million as of June 30, 2023 and December 31, 2022, respectively. (3) Net of unamortized deferred financing costs of $1.8 million and $2.3 million as of June 30, 2023 and December 31, 2022, respectively, unamortized discount of $0.1 million and $0.1 million as of June 30, 2023 and December 31, 2022, respectively, and deferred restructuring gain of $2.1 million and $2.7 million as of June 30, 2023 and December 31, 2022, respectively. (4) Net of unamortized deferred financing costs of $1.6 million and $1.9 million, unamortized discount of $0.6 million and $0.7 million, and deferred restructuring gain of $2.0 million and $2.4 million as of June 30, 2023 and December 31, 2022, respectively. (5) Includes $7.2 million and $5.4 million of current liability classified as Accrued liabilities and other, and $9.4 million and $8.7 million classified as Other long-term liabilities on the accompanying consolidated balance sheet as of June 30, 2023 and December 31, 2022, respectively . Our Credit Agreement and Senior Note agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments. We are in compliance with all covenants of our credit and senior note agreements as of June 30, 2023. See Note 6 – “Related Party Transactions,” for a discussion of our amounts payable to affiliates and long-term affiliate payable to Spartan Energy Partners LP (“Spartan”). Credit Agreement On June 30, 2022, the Partnership, CSI Compressco Sub Inc. and CSI Compressco Operating LLC (collectively with the Partnership and CSI Compressco Sub Inc., the “Borrowers”), and certain subsidiaries of the Partnership named therein as guarantors (the “Guarantors”), entered into that certain Fifth Amendment to Loan and Security Agreement (the “Fifth Amendment”) with the Lenders (as defined below) party thereto, and Bank of America, N.A., in its capacity as administrative agent (in such capacity, “Administrative Agent”), collateral agent, letter of credit issuer and swing line lender. The Fifth Amendment amends and modifies that certain Loan and Security Agreement among the Borrowers, the Guarantors, the financial institutions from time to time party thereto as lenders (the “Lenders”) and the Administrative Agent dated as of June 29, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). The Fifth Amendment provided for changes and modifications to the Credit Agreement as set forth therein, which include, among other things, the reduction of the reserve to $3.5 million and the extension of the Termination Date (as defined in the Credit Agreement) from June 29, 2023 to June 29, 2025. As of June 30, 2023, and subject to compliance with the covenants, borrowing base, and other provisions of the agreements that may limit borrowings under the Credit Agreement, we had availability of $4.7 million. The maturity date of the Credit Agreement is June 29, 2025. As of June 30, 2023 we had $21.8 million outstanding balance and $1.4 million in letters of credit against our Credit Agreement. Spartan Credit Agreement As of June 30, 2023, and subject to compliance with the covenants, borrowing base, and other provisions of the agreements that may limit borrowings under the Spartan Credit Agreement, we had availability of $27.8 million. As of June 30, 2023, we had $42.0 million outstanding and no letters of credit against the Spartan Credit Agreement and the maturity date of the Spartan Credit Agreement is October 17, 2025. 7.50% First Lien Notes due 2025 As of June 30, 2023, our 7.50% First Lien Notes due 2025 (the “First Lien Notes”) had $400.2 million outstanding net of unamortized discounts, unamortized deferred financing costs and deferred restructuring gains. Interest on these notes is payable on April 1 and October 1 of each year. The First Lien Notes are secured by a first-priority security interest in substantially all of the Partnership’s and its subsidiaries assets, subject to certain permitted encumbrances and exceptions, and are guaranteed on a senior secured basis by each of the Partnership’s U.S. restricted subsidiaries (other than Finance Corp, certain immaterial subsidiaries and certain other excluded U.S. subsidiaries). 10.000%/10.750% Second Lien Notes due 2026 As of June 30, 2023, our 10.000%/10.750% Second Lien Notes due 2026 (the “Second Lien Notes”) had $172.6 million outstanding, net of unamortized discounts, unamortized deferred financing costs and deferred restructuring gains. Interest on the Second Lien Notes is payable on April 1 and October 1 of each year. The Second Lien Notes are secured by a second-priority security interest in substantially all of the Partnership’s and its subsidiaries assets, subject to certain permitted encumbrances and exceptions, and are guaranteed on a senior secured basis by each of the Partnership’s U.S. restricted subsidiaries (other than Finance Corp and certain other excluded U.S. subsidiaries). In connection with the payment of PIK Interest (as defined below), if any, in respect of the Second Lien Notes, the issuers will be entitled, to increase the outstanding aggregate principal amount of the Second Lien Notes or issue additional notes (“PIK notes”) under the Second Lien Notes indenture on the same terms and conditions as the already outstanding Second Lien Notes. Interest will accrue at (1) the annual rate of 7.250% payable in cash, plus (2) at the election of the Issuers (made by delivering a notice to the Second Lien Trustee not less than five During the fourth quarter of 2020, the second quarter of 2021, and the fourth quarter of 2021, the Partnership elected to increase the principal amount outstanding through the issuance of PIK notes. As of June 30, 2023, our principal amount outstanding included $7.2 million of PIK notes. Finance Agreements During 2022, CSI Compressco Leasing LLC and CSI Compressco Operating LLC (individually and collectively as Debtor), with CSI Compressco LP (as Guarantor), entered into a Master Equipment Finance Agreement with a third party in the amount of $14.1 million to finance certain compression equipment. The note is payable in monthly installments of $0.4 million for 36 months. The current portion of this amount is classified in accrued liabilities and other and the long-term portion is classified in other long-term liabilities on the accompanying consolidated balance sheet. During the first quarter of 2023, CSI Compressco Leasing LLC and CSI Compressco Operating LLC (individually and collectively as Debtor), with CSI Compressco LP (as Guarantor), entered into a Master Equipment Finance Agreements with a third party totaling $5.1 million to finance certain compression equipment. The notes are payable in monthly installments totaling $0.2 million for 36 months. The current portion of these amounts are classified in accrued liabilities and other and the long-term portion is classified in other long-term liabilities on the accompanying consolidated balance sheet. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Spartan and General Partner Ownership As of June 30, 2023, Spartan’s ownership interest in us was approximately 45.2%, with the common units held by the public representing an approximate 55% interest in us. As of June 30, 2023, Spartan’s ownership was through various wholly owned subsidiaries and consisted of approximately 44.9% of the limited partner interests plus the approximate 0.5% general partner interest. As a result of its ownership of common units and its general partner interest in us, Spartan received distributions of $1.3 million during the six months ended June 30, 2023 and 2022. Indemnification Agreement We have entered into indemnification agreements with each of our current directors and officers with regard to their services as a director or officer, in order to enhance the indemnification rights provided under Delaware law and our Partnership Agreement. The individual indemnification agreements provide each such director or officer with the right to receive his or her costs of defense if he or she is made a party or witness to any proceeding other than a proceeding brought by or in the right of us, provided that such director or officer has not acted in bad faith or engaged in fraud with respect to the action that gave rise to his or her participation in the proceeding. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined by ASC Topic 820 as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” within an entity’s principal market, if any. The principal market is the market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity, regardless of whether it is the market in which the entity will ultimately transact for a particular asset or liability or if a different market is potentially more advantageous. Accordingly, this exit price concept may result in a fair value that may differ from the transaction price or market price of the asset or liability. Under U.S. GAAP, the fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value. Fair value measurements should maximize the use of observable inputs and minimize the use of unobservable inputs, where possible. Observable inputs are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs may be needed to measure fair value in situations where there is little or no market activity for the asset or liability at the measurement date and are developed based on the best information available in the circumstances, which could include the reporting entity’s own judgments about the assumptions market participants would utilize in pricing the asset or liability. Financial Instruments Derivative Contracts We have currency exchange rate risk exposure related to transactions denominated in a foreign currency as well as to investments in certain of our international operations. We enter into 30-day foreign currency forward derivative contracts as part of a program designed to mitigate the currency exchange rate risk exposure on selected transactions of certain foreign subsidiaries. As of June 30, 2023, we had the following foreign currency derivative contract outstanding relating to a portion of our foreign operations: Derivative contracts US Dollar Notional Amount Traded Exchange Rate Settlement Date (In Thousands) Forward sale Mexican peso $ 2,286 17.50 7/12/2023 Under a program designed to mitigate the currency exchange rate risk exposure on selected transactions of certain foreign subsidiaries, we may enter into similar derivative contracts from time to time. Although contracts pursuant to this program will serve as economic hedges of the cash flow of our currency exchange risk exposure, they will not be formally designated as hedge contracts or qualify for hedge accounting treatment. Accordingly, any change in the fair value of these derivative instruments during a period will be included in the determination of earnings for that period. The fair values of our foreign currency derivative contracts are based on quoted market values (a Level 2 fair value measurement). None of our foreign currency derivative instruments contains credit risk related contingent features that would require us to post assets or collateral for contracts that are classified as liabilities. During the three and six-month periods ended June 30, 2023 we recognized $0.1 million and $0.4 million, respectively, of net (gains) losses associated with our foreign currency derivatives program. During the three and six-month periods ended June 30, 2022, we recognized and $0.3 million and $1.4 million, respectively, of net (gains) losses associated with our foreign currency derivatives program. These amounts are included in other (income) expense, net, in the accompanying consolidated statement of operations. Fair Value of Debt The fair value of our debt has been estimated in accordance with the accounting standard regarding fair value. The fair value of our fixed rate long-term debt is estimated based on recent trades for these notes. The carrying and fair value of our debt, excluding unamortized debt issuance costs, are as follows (in thousands): June 30, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value (In Thousands) 7.50% First Lien Notes $ 400,000 $ 381,000 $ 400,000 $ 373,000 10.00%/10.75% Second Lien Notes 172,717 147,241 172,717 136,446 $ 572,717 $ 528,241 $ 572,717 $ 509,446 Other |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As a partnership, we are generally not subject to income taxes at the entity level because our income is included in the tax returns of our partners. Our operations are treated as a partnership for federal tax purposes with each partner being separately taxed on its share of taxable income. However, a portion of our business is conducted through taxable U.S. corporate subsidiaries. Accordingly, a U.S. federal and state income tax provision has been reflected in the accompanying statements of operations. State tax expense relating to the Texas franchise tax liability is included in the provision for income taxes. Certain of our operations are located outside of the U.S., and the Partnership, through its foreign subsidiaries, is responsible for income taxes in these countries. Our effective tax rates for the six-month periods ended June 30, 2023 and June 30, 2022 were negative 39.8% and negative 13.0%, respectively, primarily attributable to taxes in certain foreign jurisdictions and Texas gross margin taxes combined with losses generated in entities for which no related tax benefit has been recorded. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the U.S. as well as in certain foreign jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From time to time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. While the outcome of any lawsuits or other proceedings against us cannot be predicted with certainty, management does not consider it reasonably possible that a loss resulting from such lawsuits or proceedings in excess of any amounts accrued has been incurred that is expected to have a material adverse effect on our financial condition, results of operations, |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn July 17, 2023, the board of directors of our general partner declared a cash distribution attributable to the quarter ended June 30, 2023 of $0.01 per outstanding common unit. This distribution equates to a distribution of $0.04 per outstanding common unit on an annualized basis. This distribution will be paid on August 14, 2023 to each of the holders of common units of record as of the close of business on July 28, 2023. |
Organization, Basis of Presen_2
Organization, Basis of Presentation, and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Presentation | Presentation Our unaudited consolidated financial statements include the accounts of our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. In the opinion of our management, our unaudited consolidated financial statements as of June 30, 2023, and for the three and six-month periods ended June 30, 2023 and June 30, 2022 include all normal recurring adjustments that are necessary to provide a fair statement of our results for these interim periods. Operating results for the three and six-month period ended June 30, 2023 are not necessarily indicative of results that may be expected for the twelve months ended December 31, 2023. The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission (“SEC”) and do not include all information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2022 and notes thereto included in our Annual Report on Form 10-K , which we filed with the SEC on March 13, 2023. |
Segments | Segments Our general partner has concluded that we operate in one reportable segment. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, and impairments during the reporting period. Actual results could differ from those estimates, and such differences could be material. |
Cash Equivalents | Cash Equivalents We consider all highly liquid cash investments with maturities of three months or less when purchased to be cash equivalents. We have concentrated credit risk for cash by maintaining deposits in a major bank, which may at times exceed amounts covered by insurance provided by the United States Federal Deposit Insurance Corporation |
Financial Instruments | Financial Instruments Financial instruments that subject us to concentrations of credit risk consist principally of trade accounts receivable, which are primarily due from companies of varying size engaged in oil and gas activities in the United States, Canada, Mexico, Argentina, Chile, and Egypt. Our policy is to review the financial condition of customers before extending credit and periodically updating customer credit information. Payment terms are on a short-term basis. The risk of loss from the inability to collect trade receivables is heightened during prolonged periods of low oil and natural gas commodity prices. We have currency exchange rate risk exposure related to transactions denominated in a foreign currency as well as to investments in certain of our international operations. Our risk management activities include the use of foreign currency forward purchase and sale derivative contracts as part of a program designed to mitigate the currency exchange rate risk exposure on selected international operations. We have $63.8 million outstanding under our variable rate revolving credit facilities as of June 30, 2023 and face market risk exposure related to changes in applicable interest rates. |
Foreign Currencies | Foreign Currencies We have designated the Canadian dollar, Mexican peso, Egyptian pound, Chilean peso and the Euro as the functional currency for Canada, Mexico, Egypt, Chile, and the Netherlands, respectively. We are exposed to fluctuations between the U.S. dollar and certain foreign currencies, including the Canadian dollar, the Mexican peso, the Argentine peso, the Egyptian pound, the Chilean peso, and Euro as a result of our international operations. Foreign currency exchange (gains) losses are included in other (income) expense, net and totaled $0.8 million and $0.8 million during the three and six-month periods ended June 30, 2023, respectively, and $0.7 million and $1.2 million during the three and six-month periods ended June 30, 2022 , respectively. |
Leases, Lessee | Lessee As a lessee, unless the lease meets the criteria of short-term and is excluded per our policy election described below, we initially recognize a lease liability and related right-of-use asset on the commencement date. The right-of-use asset represents our right to use an underlying asset and the lease liability represents our obligation to make lease payments to the lessor over the lease term. All of our long-term leases are operating leases and are included in operating lease right-of-use assets, accrued liabilities and other, and operating lease liabilities in our consolidated balance sheet as of June 30, 2023 and December 31, 2022. We determine whether a contract is or contains a lease at inception of the contract. Where we are a lessee in a contract that includes an option to extend or terminate the lease, we include the extension period or exclude the period covered by the termination option in our lease term in determining the right-of-use asset and lease liability, if it is reasonably certain that we would exercise the option. As an accounting policy election, we do not include short-term leases on our balance sheet. Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to exercise. The lease payments for short-term leases are included as operating lease costs on a straight-line basis over the lease term in cost of revenues or selling, general, and administrative expense based on the use of the underlying asset. We recognize lease costs for variable lease payments not included in the determination of a lease liability in the period in which an obligation is incurred. As allowed by U.S. GAAP, we do not separate nonlease components from the associated lease component for our contract services contracts and instead account for those components as a single component based on the accounting treatment of the predominant component. In our evaluation of whether Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842 “Leases” or ASC 606 “Revenue from Contracts with Customers” is applicable to the combined component based on the predominant component, we determined the services nonlease component is predominant, resulting in the ongoing recognition of our compression services contracts following ASC 606. Our operating leases are recognized at the present value of lease payments over the lease term. When the implicit discount rate is not readily determinable, we use our incremental borrowing rate to calculate the discount rate used to determine the present value of lease payments. Consistent with other long-lived assets or asset groups that are held and used, we test for impairment of our right-of-use assets when impairment indicators are present. |
Leases, Lessor | Lessor Our agreements for rental equipment contain an operating lease component under ASC 842 because we, as the lessor, retain substantial exposure to changes in the underlying asset’s value, unlike a sale or secured lending arrangement. Therefore, we do not derecognize the underlying asset, and recognize income associated with providing the lessee the right to control the use of the asset ratably over the lease term. As a lessor, we recognize operating lease revenue on our statement of operations as equipment rentals. This revenue is recognized on a straight-line basis over the term of the lease based on the monthly rate in the agreement. The leased asset remains on the balance sheet consistent with other property, plant and equipment. Cash receipts associated with all leases are classified as cash flows from operating activities in the statement of cash flows. The leased equipment primarily consists of the Spartan Treating amine plants, gas coolers and production equipment. All of this equipment is modular and skid mounted. It can be moved between locations. Lease terms for this equipment vary in length. Amine plants range from one |
Allowance for Credit Losses | Allowance for Credit Losses Trade accounts receivable are stated at their net realizable value. The allowance for credit losses against gross trade accounts receivable reflects the best estimate of expected credit losses of the receivables portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. In developing the estimate for expected credit losses, trade accounts receivables are segmented into pools of assets depending on market (U.S. versus international), delinquency status, and customer type, and fixed reserve percentages are established for each pool of trade accounts receivables. In determining the reserve percentages for each pool of trade accounts receivables, we considered our historical experience with certain customers and customer types, regulatory and legal environments, country and political risk, and other relevant current and future forecasted macroeconomic factors. These credit risk indicators are monitored on a quarterly basis to determine whether there have been any changes in the economic environment that would indicate the established reserve percentages should be adjusted and are considered on a regional basis to reflect more geographic-specific metrics. Additionally, write-offs and recoveries of customer receivables are tracked against collections on a quarterly basis to determine whether the reserve percentages remain appropriate. When management becomes aware of certain customer-specific factors that impact credit risk, specific allowances for these known troubled accounts are recorded. Trade accounts receivable are written off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted. As of June 30, 2023, additions to the allowance for credit losses, write-offs and recoveries of customer receivables were not material to our condensed consolidated financial statements. |
Inventories | Inventories Inventories consist primarily of compressor package spare parts and supplies and work in process, and cost is determined using the weighted average cost |
Impairment and Other Charges and Sale of Assets | Impairments and Other Charges Impairments of long-lived assets, including identified intangible assets, are determined periodically, when indicators of impairment are present. If such indicators are present, the determination of the amount of impairment is based on our judgments as to the future undiscounted operating cash flows to be generated from the relevant assets throughout their remaining estimated useful lives. If these undiscounted cash flows are less than the carrying amount of the related asset, an impairment is recognized for the excess of the carrying value over its fair value. Fair value of intangible assets is generally determined using the discounted present value of future cash flows using discount rates commensurate with the risks inherent with the specific assets. Assets held for disposal are recorded at the lower of carrying value or estimated fair value less estimated selling costs. We did not record any impairments of long-lived assets during the three and six-month periods ended June 30, 2023 and June 30, 2022. |
Sale of Assets | Sale of AssetsDuring June 2023, we entered into a purchase and sale agreement for the sale of our equipment in Egypt for a total sale price of $5.8 million. The sale of the equipment resulted in a loss of $0.2 million during the three and six-months ended June 30, 2023, which is reflected in other (income) expense, net in our statement of operations. As of June 30, 2023, we no longer have operations in Egypt. |
Income Taxes | Income Taxes Our operations are not subject to U.S. federal income tax other than the operations that are conducted through taxable subsidiaries. We incur state and local income taxes in certain areas of the U.S. in which we conduct business. We incur income taxes and are subject to withholding requirements related to certain of our operations in Latin America, Canada, and other foreign countries in which we operate. Furthermore, we also incur Texas Margin Tax, which, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, is classified as an income tax for reporting purposes. A portion of the carrying value of certain deferred tax assets is subject to a valuation allowance. |
Earnings Per Common Unit | Earnings Per Common Unit Our computations of earnings per common unit are based on the weighted average number of common units outstanding during the applicable period. Basic earnings per common unit are determined by dividing net income (loss) allocated to the common units after deducting the amount allocated to our general partner by the weighted average number of outstanding common units during the period. When computing earnings per common unit under the two class method in periods when distributions are greater than earnings, the amount of the distribution is deducted from net income (loss) and the excess of distributions over earnings is allocated between the general partner and common units based on how our Partnership Agreement allocates net losses. Diluted earnings per common unit are computed using the treasury stock method, which considers the potential future issuance of limited partner common units. Unvested phantom units are not included in basic earnings per common unit, as they are not considered to be participating securities, but are included in the calculation of diluted earnings per common unit. For the three and six-month periods ended June 30, 2023 and June 30, 2022, all unvested phantom units were excluded from the calculation of diluted common units because the impact was anti-dilutive. |
Fair Value Measurements | Fair Value Measurements We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. We utilize fair value measurements on a recurring basis in the accounting for our foreign currency forward purchase and sale derivative contracts. For these fair value measurements, we utilize the quoted value (a Level 2 fair value measurement). Refer to Note 7 – “Fair Value Measurements” for further discussion. |
Distributions | DistributionsOn January 19, 2023 and April 17, 2023, the board of directors of our general partner declared a cash distribution attributable to the respective quarter ended of $0.01 per outstanding common unit. This distribution equates to a distribution of $0.04 per outstanding common unit on an annualized basis. This quarterly distribution was paid on February 14, 2023 and May 15, 2023 to each of the holders of common units of record as of the close of business on January 31, 2023 and April 30, 2023, respectively. |
Discontinued Operations | Discontinued OperationsOn July 2, 2020, we completed the sale of our Midland manufacturing facility. The Midland facility was used to design, fabricate and assemble new standard and customized compressor packages for our new unit sales business. In connection with the Midland manufacturing facility sale, we entered into an agreement with the buyer to continue to operate a portion of the facility, which allowed us to close out the remaining backlog for the new unit sales business and to continue to operate our aftermarket services business at that location for an interim period. Following completion of the last unit in October 2020, we ceased fabricating new compressor packages for sales to third parties or for our own service fleet. The operations associated with the new unit sales business were previously reported in equipment sales revenues and are now reflected as discontinued operations in our financial statements for all periods presented. Used equipment sales revenue continues to be included in equipment sales revenue. Loss from discontinued operations, net of tax for the three and six-month periods ended June 30, 2022, was $0.1 million gain related to the warranty reserve not being utilized. |
New Accounting Pronouncements | New Accounting Pronouncements Standards adopted in 2023 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | Expected revenue to be recognized in the future as of June 30, 2023 for completion of performance obligations of compression service contracts are as follows: 2023 2024 2025 2026 Thereafter Total (In Thousands) Compression service contracts remaining performance obligations $ 56,278 $ 102,832 $ 43,594 $ 12,189 $ 1,785 $ 216,678 |
Summary of Changes in Unearned Income in Balance Sheets | The following table reflects the changes in unearned income in our consolidated balance sheets for the periods indicated: Six Months Ended 2023 2022 (In Thousands) Unearned income, beginning of period $ 2,590 $ 2,187 Additional unearned income 6,550 3,279 Revenue recognized (4,225) (3,246) Unearned income, end of period $ 4,915 $ 2,220 |
Schedule of Disaggregation of Revenue | Disaggregated revenue from contracts with customers by geography is as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In Thousands) Contract services United States $ 64,412 $ 53,935 $ 128,089 $ 106,861 International 6,109 10,413 12,079 20,294 70,521 64,348 140,168 127,155 Aftermarket services United States 20,878 15,860 37,771 28,550 International 331 353 789 531 21,209 16,213 38,560 29,081 Equipment rentals United States 3,161 2,105 5,966 4,071 International 1,612 1,513 2,921 3,047 4,773 3,618 8,887 7,118 Equipment sales United States 180 302 264 1,017 International 96 41 271 163 276 343 535 1,180 Total Revenue United States 88,631 72,202 172,090 140,499 International 8,148 12,320 16,060 24,035 $ 96,779 $ 84,522 $ 188,150 $ 164,534 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories | Components of inventories as of June 30, 2023 and December 31, 2022, are as follows: June 30, 2023 December 31, 2022 (In Thousands) Parts and supplies $ 47,064 $ 44,042 Work in progress 5,297 1,860 Total inventories $ 52,361 $ 45,902 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease, Cost | Operating lease supplemental cash flow information: Six Months Ended June 30, 2023 2022 (In Thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 7,338 $ 5,684 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 6,182 $ 9,104 Supplemental balance sheet information: June 30, 2023 December 31, 2022 (In Thousands) Operating leases: Operating right-of-use asset $ 27,841 $ 27,205 Accrued liabilities and other $ 9,604 $ 7,620 Operating lease liabilities 18,194 19,419 Total operating lease liabilities $ 27,798 $ 27,039 Additional operating lease information: June 30, 2023 December 31, 2022 Weighted average remaining lease term: Operating leases 3.79 years 4.51 years Weighted average discount rate: Operating leases 10.05 % 9.93 % |
Schedule of Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments by year and in the aggregate, under non-cancelable operating leases with terms in excess of one year, consist of the following at June 30, 2023: Operating Leases (In Thousands) Remainder of 2023 $ 6,559 2024 9,695 2025 6,221 2026 5,390 2027 2,540 Thereafter 2,781 Total lease payments 33,186 Less imputed interest (5,388) Total lease liabilities $ 27,798 |
Schedule of Operating Lease, Lease Income | We recognized operating lease revenue, which is included in “Equipment rentals” on the consolidated statements of operations as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 (In Thousands) (In Thousands) Equipment rentals $ 4,773 $ 3,618 8,887 7,118 |
Schedule of Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | The following table presents the undiscounted cash flows expected to be received related to these agreements: 2023 2024 2025 2026 2027 Thereafter (In Thousands) Future minimum lease revenue $ 13,145 $ 8,973 $ 2,388 $ 1,576 $ 1,576 $ 2,233 |
Long-Term Debt and Other Borr_2
Long-Term Debt and Other Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-term debt consists of the following: June 30, 2023 December 31, 2022 Scheduled Maturity (In Thousands) Credit Agreement (1) June 29, 2025 $ 21,465 $ 6,312 Spartan Credit Agreement (2) October 17, 2025 41,335 54,912 7.50% First Lien Notes due 2025 (3) April 1, 2025 400,187 400,293 10.00%/10.75% Second Lien Notes due 2026 (4) April 1, 2026 172,579 172,499 Total long-term debt 635,566 634,016 Other borrowings (5) Various 16,613 14,129 Total long-term debt and other borrowings $ 652,179 $ 648,145 (1) Net of unamortized deferred financing costs of $0.3 million and $0.4 million as of June 30, 2023 and December 31, 2022, respectively. (2) Net of unamortized deferred financing costs of $0.7 million and $0.6 million as of June 30, 2023 and December 31, 2022, respectively. (3) Net of unamortized deferred financing costs of $1.8 million and $2.3 million as of June 30, 2023 and December 31, 2022, respectively, unamortized discount of $0.1 million and $0.1 million as of June 30, 2023 and December 31, 2022, respectively, and deferred restructuring gain of $2.1 million and $2.7 million as of June 30, 2023 and December 31, 2022, respectively. (4) Net of unamortized deferred financing costs of $1.6 million and $1.9 million, unamortized discount of $0.6 million and $0.7 million, and deferred restructuring gain of $2.0 million and $2.4 million as of June 30, 2023 and December 31, 2022, respectively. (5) Includes $7.2 million and $5.4 million of current liability classified as Accrued liabilities and other, and $9.4 million and $8.7 million classified as Other long-term liabilities on the accompanying consolidated balance sheet as of June 30, 2023 and December 31, 2022, respectively . |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions Table | As of June 30, 2023, we had the following foreign currency derivative contract outstanding relating to a portion of our foreign operations: Derivative contracts US Dollar Notional Amount Traded Exchange Rate Settlement Date (In Thousands) Forward sale Mexican peso $ 2,286 17.50 7/12/2023 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying and fair value of our debt, excluding unamortized debt issuance costs, are as follows (in thousands): June 30, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value (In Thousands) 7.50% First Lien Notes $ 400,000 $ 381,000 $ 400,000 $ 373,000 10.00%/10.75% Second Lien Notes 172,717 147,241 172,717 136,446 $ 572,717 $ 528,241 $ 572,717 $ 509,446 |
Organization, Basis of Presen_3
Organization, Basis of Presentation, and Significant Accounting Policies (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Apr. 17, 2023 $ / shares | Jan. 19, 2023 $ / shares | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||
Number of operating segments | segment | 1 | ||||||
Number of reportable segments | segment | 1 | ||||||
Foreign currency exchange gains (losses) | $ (800,000) | $ (700,000) | $ (800,000) | $ (1,200,000) | |||
Impairments and other charges | 0 | 0 | 0 | 0 | |||
Sale price of assets | $ 5,800,000 | ||||||
Gain (loss) on sale of assets | $ (200,000) | $ (200,000) | |||||
Distribution declared, quarterly basis (in USD per common unit) | $ / shares | $ 0.01 | $ 0.01 | |||||
Distribution declared, annualized basis (in USD per common unit) | $ / shares | $ 0.04 | $ 0.04 | |||||
Income (loss) from discontinued operations, net of taxes | $ 100,000 | $ 100,000 | |||||
Minimum | Amine Plants | |||||||
Debt Instrument [Line Items] | |||||||
Term of contract | 1 year | 1 year | 1 year | ||||
Minimum | Cooling Units | |||||||
Debt Instrument [Line Items] | |||||||
Term of contract | 6 months | 6 months | 6 months | ||||
Maximum | Amine Plants | |||||||
Debt Instrument [Line Items] | |||||||
Term of contract | 5 years | 5 years | 5 years | ||||
Maximum | Cooling Units | |||||||
Debt Instrument [Line Items] | |||||||
Term of contract | 2 years | 2 years | 2 years | ||||
Revolving Credit Facility | Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding balance | $ 63,800,000 | $ 63,800,000 | $ 63,800,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Revenue, remaining performance obligation | $ 216,678 | |
Contract with customer, asset, before allowance for credit loss | $ 2,200 | $ 4,200 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Revenue Performance Obligations (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 216,678 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 6 months |
Revenue, remaining performance obligation | $ 56,278 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, remaining performance obligation | $ 102,832 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, remaining performance obligation | $ 43,594 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, remaining performance obligation | $ 12,189 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | |
Revenue, remaining performance obligation | $ 1,785 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Contract With Customer, Change In Contract Liability [Roll Forward] | ||
Unearned income, beginning of period | $ 2,590 | $ 2,187 |
Additional unearned income | 6,550 | 3,279 |
Revenue recognized | (4,225) | (3,246) |
Unearned income, end of period | $ 4,915 | $ 2,220 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | $ 96,779 | $ 84,522 | $ 188,150 | $ 164,534 |
Contract services | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 70,521 | 64,348 | 140,168 | 127,155 |
Aftermarket services | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 21,209 | 16,213 | 38,560 | 29,081 |
Equipment rentals | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 4,773 | 3,618 | 8,887 | 7,118 |
Equipment sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 276 | 343 | 535 | 1,180 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 88,631 | 72,202 | 172,090 | 140,499 |
United States | Contract services | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 64,412 | 53,935 | 128,089 | 106,861 |
United States | Aftermarket services | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 20,878 | 15,860 | 37,771 | 28,550 |
United States | Equipment rentals | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 3,161 | 2,105 | 5,966 | 4,071 |
United States | Equipment sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 180 | 302 | 264 | 1,017 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 8,148 | 12,320 | 16,060 | 24,035 |
International | Contract services | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 6,109 | 10,413 | 12,079 | 20,294 |
International | Aftermarket services | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 331 | 353 | 789 | 531 |
International | Equipment rentals | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | 1,612 | 1,513 | 2,921 | 3,047 |
International | Equipment sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Compression and related services | $ 96 | $ 41 | $ 271 | $ 163 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Parts and supplies | $ 47,064 | $ 44,042 |
Work in progress | 5,297 | 1,860 |
Total inventories | $ 52,361 | $ 45,902 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease, remaining lease term | 10 years | |||
Operating lease cost | $ 4,000,000 | $ 4,100,000 | $ 7,900,000 | $ 8,300,000 |
Short-term lease cost | 400,000 | 1,200,000 | $ 600,000 | $ 2,600,000 |
Variable lease, cost | $ 0 | $ 0 | ||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Option to extend, period | 30 days | |||
Lessor, operating lease, remaining lease term | 1 month | 1 month | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Option to extend, period | 6 months | |||
Lessor, operating lease, remaining lease term | 6 years | 6 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows - operating leases | $ 7,338 | $ 5,684 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 6,182 | $ 9,104 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating leases: | ||
Operating right-of-use asset | $ 27,841 | $ 27,205 |
Accrued liabilities and other | 9,604 | 7,620 |
Operating lease liabilities | 18,194 | 19,419 |
Total operating lease liabilities | $ 27,798 | $ 27,039 |
Leases - Additional Operating L
Leases - Additional Operating Lease Information (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
Weighted average remaining lease term: | ||
Operating leases | 3 years 9 months 14 days | 4 years 6 months 3 days |
Weighted average discount rate: | ||
Operating leases | 10.05% | 9.93% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Remainder of 2023 | $ 6,559 | |
2024 | 9,695 | |
2025 | 6,221 | |
2026 | 5,390 | |
2027 | 2,540 | |
Thereafter | 2,781 | |
Total lease payments | 33,186 | |
Less imputed interest | (5,388) | |
Total lease liabilities | $ 27,798 | $ 27,039 |
Leases - Lessor Operating Lease
Leases - Lessor Operating Lease Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||
Compression and related services | $ 96,779 | $ 84,522 | $ 188,150 | $ 164,534 |
Equipment rentals | ||||
Lessee, Lease, Description [Line Items] | ||||
Compression and related services | $ 4,773 | $ 3,618 | $ 8,887 | $ 7,118 |
Leases - Lessor Future Minimum
Leases - Lessor Future Minimum Lease Revenue (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Leases [Abstract] | |
2023 | $ 13,145 |
2024 | 8,973 |
2025 | 2,388 |
2026 | 1,576 |
2027 | 1,576 |
Thereafter | $ 2,233 |
Long-Term Debt and Other Borr_3
Long-Term Debt and Other Borrowings - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Long-term debt, net | $ 635,566 | $ 634,016 |
Current portion of long-term debt | 16,613 | 14,129 |
Long-term debt | 652,179 | 648,145 |
Other liabilities, current | 7,200 | 5,400 |
Other long-term liabilities | 9,392 | 8,742 |
Line of Credit | Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, net | 21,465 | 6,312 |
Unamortized deferred financing costs | 300 | 400 |
Line of Credit | Spartan Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, net | 41,335 | 54,912 |
Unamortized deferred financing costs | 700 | 600 |
Secured Debt | 7.50% First Lien Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, net | $ 400,187 | 400,293 |
Interest rate | 7.50% | |
Long-term debt | $ 400,200 | |
Unamortized deferred financing costs | 1,800 | 2,300 |
Unamortized discount | 100 | 100 |
Gain on restructuring of debt | 2,100 | 2,700 |
Secured Debt | 10.00%/10.75% Second Lien Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, net | 172,579 | 172,499 |
Long-term debt | 172,600 | |
Unamortized deferred financing costs | 1,600 | 1,900 |
Unamortized discount | 600 | 700 |
Gain on restructuring of debt | $ 2,000 | $ 2,400 |
Secured Debt | 10.00%/10.75% Second Lien Notes | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Secured Debt | 10.00%/10.75% Second Lien Notes | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.75% |
Long-Term Debt and Other Borr_4
Long-Term Debt and Other Borrowings - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | |
Debt Instrument [Line Items] | |||
Long-term debt | $ 648,145,000 | $ 652,179,000 | |
Line of Credit | |||
Debt Instrument [Line Items] | |||
Outstanding balance | 42,000,000 | ||
Credit Agreement | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Reserve amount | 3,500,000 | ||
Credit agreement availability | 4,700,000 | ||
Line of credit facility, balance outstanding | 21,800,000 | ||
Outstanding balance | 63,800,000 | ||
Credit Agreement Sublimit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Letters of credit, balance outstanding | 1,400,000 | ||
Spartan Credit Agreement | Line of Credit | |||
Debt Instrument [Line Items] | |||
Credit agreement availability | 27,800,000 | ||
Letters of credit, balance outstanding | $ 0 | ||
7.50% First Lien Notes | Secured Debt | |||
Debt Instrument [Line Items] | |||
Interest rate | 7.50% | ||
Long-term debt | $ 400,200,000 | ||
10.00%/10.75% Second Lien Notes | Secured Debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 172,600,000 | ||
10.00%/10.75% Second Lien Notes | Secured Debt | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate | 10% | ||
10.00%/10.75% Second Lien Notes | Secured Debt | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate | 10.75% | ||
10.00%/10.75% Second Lien Notes | PIK Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 7,200,000 | ||
Second Lien Notes Indenture | PIK Notes | Rate 1 | |||
Debt Instrument [Line Items] | |||
Interest rate | 7.25% | ||
Second Lien Notes Indenture | PIK Notes | Rate 2 | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.75% | ||
Number of days to give notice to trustee prior to record date | 5 days | ||
Second Lien Notes Indenture | PIK Notes | Rate 3 | |||
Debt Instrument [Line Items] | |||
Interest rate | 3.50% | ||
Master Equipment Finance Agreement | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 5,100,000 | 14,100,000 | |
Monthly installment | $ 200,000 | $ 400,000 | |
Debt instrument, term | 36 months | 36 months |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||||||
Distributions | $ 1,427 | $ 1,421 | $ 1,419 | $ 1,411 | ||
Spartan Energy Partners LP | ||||||
Related Party Transaction [Line Items] | ||||||
Limited liability company interest | 45.20% | |||||
Public ownership interest | 44.90% | 44.90% | ||||
General partner percentage interest | 0.50% | |||||
Common Unitholders | ||||||
Related Party Transaction [Line Items] | ||||||
Public ownership interest | 55% | 55% | ||||
Spartan Energy Partners LP | ||||||
Related Party Transaction [Line Items] | ||||||
Distributions | $ 1,300 | $ 1,300 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Foreign Currency Derivative Contract Outstanding (Details) - Forward sale Mexican peso $ in Thousands | Jun. 30, 2023 USD ($) |
Derivative [Line Items] | |
US Dollar Notional Amount | $ 2,286 |
Traded Exchange Rate | 17.50 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | ||||
Net (gain) loss associated with foreign currency derivative program | $ 0.1 | $ 0.3 | $ 0.4 | $ 1.4 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Carrying Value | $ 572,717 | $ 572,717 |
Fair Value | $ 528,241 | 509,446 |
7.50% First Lien Notes | Secured Debt | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.50% | |
Carrying Value | $ 400,000 | 400,000 |
Fair Value | 381,000 | 373,000 |
10.00%/10.75% Second Lien Notes | Secured Debt | ||
Debt Instrument [Line Items] | ||
Carrying Value | 172,717 | 172,717 |
Fair Value | $ 147,241 | $ 136,446 |
10.00%/10.75% Second Lien Notes | Secured Debt | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
10.00%/10.75% Second Lien Notes | Secured Debt | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 10.75% |
Income Taxes (Details)
Income Taxes (Details) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate reconciliation, percent | (39.80%) | (13.00%) |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jul. 17, 2023 | Apr. 17, 2023 | Jan. 19, 2023 |
Subsequent Event [Line Items] | |||
Distribution declared, quarterly basis (in USD per common unit) | $ 0.01 | $ 0.01 | |
Distribution declared, annualized basis (in USD per common unit) | $ 0.04 | $ 0.04 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Distribution declared, quarterly basis (in USD per common unit) | $ 0.01 | ||
Distribution declared, annualized basis (in USD per common unit) | $ 0.04 |