Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 16, 2021 | Jun. 30, 2020 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Commission File Number | 001-33666 | ||
Entity Registrant Name | Archrock, Inc | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 74-3204509 | ||
Entity Street Address | 9807 Katy Freeway | ||
Entity Suite Number | Suite 100 | ||
Entity City | Houston | ||
Entity State | TX | ||
Entity Postal Zip Code | 77024 | ||
City Area Code | 281 | ||
Local Phone Number | 836-8000 | ||
Title of each class | Common Stock | ||
Trading Symbol | AROC | ||
Name of exchange on which registered | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 832,567,735 | ||
Entity Common Stock, Shares Outstanding | 152,788,049 | ||
Documents Incorporated by Reference [Text Block] | Portions of the registrant’s definitive proxy statement for the 2020 Meeting of Stockholders, which is expected to be filed with the Securities and Exchange Commission within 120 days after December 31, 2020, are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0001389050 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,097 | $ 3,685 |
Accounts receivable, trade, net of allowance of $3,370 and $2,210, respectively | 104,425 | 144,865 |
Inventory | 63,670 | 74,467 |
Other current assets | 12,819 | 9,186 |
Total current assets | 182,011 | 232,203 |
Property, plant and equipment, net | 2,389,674 | 2,559,398 |
Operating lease ROU assets | 19,236 | 17,901 |
Goodwill | 100,598 | |
Intangible assets, net | 61,531 | 77,471 |
Contract costs, net | 29,216 | 42,927 |
Deferred tax assets | 56,934 | 36,642 |
Other assets | 30,084 | 29,934 |
Noncurrent assets associated with discontinued operations | 11,036 | 12,901 |
Total assets | 2,779,722 | 3,109,975 |
Current liabilities: | ||
Accounts payable, trade | 30,819 | 60,215 |
Accrued liabilities | 76,993 | 67,845 |
Deferred revenue | 3,880 | 10,683 |
Total current liabilities | 111,692 | 138,743 |
Long-term debt | 1,688,867 | 1,842,549 |
Operating lease liabilities noncurrent | 16,925 | 16,094 |
Deferred tax liabilities | 725 | 1,289 |
Other liabilities | 18,088 | 16,829 |
Noncurrent liabilities associated with discontinued operations | 7,868 | 8,508 |
Total liabilities | 1,844,165 | 2,024,012 |
Commitments and contingencies (Note 26) | ||
Equity: | ||
Preferred stock: $0.01 par value per share, 50,000,000 shares authorized, zero issued | 0 | 0 |
Common stock: $0.01 par value per share, 250,000,000 shares authorized, 160,014,960 and 158,636,918 shares issued, respectively | 1,600 | 1,587 |
Additional paid-in capital | 3,424,624 | 3,412,509 |
Accumulated other comprehensive loss | (5,006) | (1,387) |
Accumulated deficit | (2,401,988) | (2,244,877) |
Treasury stock: 7,052,769 and 6,702,602 common shares, at cost, respectively | (83,673) | (81,869) |
Total equity | 935,557 | 1,085,963 |
Total liabilities and equity | $ 2,779,722 | $ 3,109,975 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 3,370 | $ 2,210 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 160,014,960 | 158,636,918 |
Treasury stock, common shares (in shares) | 7,052,769 | 6,702,602 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 874,970 | $ 965,485 | $ 904,441 |
Total cost of sales (excluding depreciation and amortization) | 377,193 | 456,238 | 464,367 |
Selling, general and administrative | 105,100 | 117,727 | 101,563 |
Depreciation and amortization | 193,138 | 188,084 | 174,946 |
Long-lived and other asset impairment | 79,556 | 44,663 | 28,127 |
Goodwill impairment | 99,830 | ||
Restatement and other charges | 445 | 19 | |
Restructuring charges | 8,450 | ||
Interest expense | 105,716 | 104,681 | 93,328 |
Debt extinguishment loss | 3,971 | 3,653 | 2,450 |
Transaction-related costs | 8,213 | 10,162 | |
Gain on sale of assets, net | (10,643) | (16,016) | (5,674) |
Other income, net | (1,359) | (661) | (157) |
Income (loss) before income taxes | (85,982) | 58,458 | 35,310 |
Provision for (benefit from) income taxes | (17,537) | (39,145) | 6,150 |
Income (loss) from continuing operations | (68,445) | 97,603 | 29,160 |
Loss from discontinued operations, net of tax | (273) | ||
Net income (loss) | (68,445) | 97,330 | 29,160 |
Less: Net income attributable to the noncontrolling interest | (8,097) | ||
Net income (loss) attributable to Archrock stockholders | $ (68,445) | $ 97,330 | $ 21,063 |
Basic and diluted net income (loss) per common share attributable to Archrock common stockholders (in dollars per share) | $ (0.46) | $ 0.70 | $ 0.19 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 150,828 | 137,492 | 109,305 |
Diluted (in shares) | 150,828 | 137,528 | 109,421 |
Contract Operations | |||
Revenue | $ 738,918 | $ 771,539 | $ 672,536 |
Total cost of sales (excluding depreciation and amortization) | 261,087 | 297,260 | 273,013 |
Aftermarket Services | |||
Revenue | 136,052 | 193,946 | 231,905 |
Total cost of sales (excluding depreciation and amortization) | $ 116,106 | $ 158,978 | $ 191,354 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (68,445) | $ 97,330 | $ 29,160 |
Other comprehensive income (loss), net of tax: | |||
Interest rate swap gain (loss), net of reclassifications to earnings | (3,619) | (7,160) | 2,681 |
Amortization of terminated interest rate swaps | 230 | ||
Merger-related adjustments | 5,670 | ||
Total other comprehensive income (loss), net of tax | (3,619) | (7,160) | 8,581 |
Comprehensive income (loss) | (72,064) | 90,170 | 37,741 |
Less: Comprehensive income attributable to the noncontrolling interest | (12,360) | ||
Comprehensive income (loss) attributable to Archrock stockholders | $ (72,064) | $ 90,170 | $ 25,381 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Noncontrolling Interest | Cumulative Effect, Period of Adoption, Adjustment | Total |
Stockholders' Equity, Beginning balance (ASC 606 Revenue) at Dec. 31, 2017 | $ 14,666 | $ 14,666 | ||||||||
Stockholders' Equity, Beginning balance (ASU 2017-12) at Dec. 31, 2017 | 383 | $ 383 | ||||||||
Stockholders' Equity, Beginning balance (ASU 2018-02) at Dec. 31, 2017 | $ 258 | (258) | ||||||||
Stockholders' Equity, Beginning balance at Dec. 31, 2017 | $ 769 | $ 3,093,058 | $ 1,197 | $ (76,732) | $ (2,241,243) | $ (41,431) | $ 735,618 | |||
Stockholders' Equity, Beginning, shares at Dec. 31, 2017 | 76,880,862 | (5,930,380) | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Treasury stock purchased | $ (1,759) | $ (1,759) | ||||||||
Treasury stock purchased, shares | (167,382) | (167,382) | ||||||||
Cash dividends | (58,288) | $ (58,288) | ||||||||
Shares issued in ESPP | $ 1 | 802 | 803 | |||||||
Shares issued in ESPP, shares | 93,617 | |||||||||
Stock-based compensation, net of forfeitures | $ 10 | 7,192 | (64) | 7,138 | ||||||
Stock-based compensation, net of forfeitures, shares | 960,028 | (141,121) | ||||||||
Stock options exercised | $ 2 | 1,341 | $ (1,371) | (28) | ||||||
Stock options exercised, shares | 218,997 | (142,722) | ||||||||
Contribution from Exterran Corporation | 18,744 | 18,744 | ||||||||
Cash distribution to noncontrolling unitholders of the Partnership | (11,766) | (11,766) | ||||||||
Merger-related adjustments/Shares issued for acquisition | $ 576 | 56,845 | 40,901 | 98,322 | ||||||
Merger-related adjustments/Shares issued for acquisition, shares | 57,634,005 | |||||||||
Comprehensive income (loss) | ||||||||||
Net income (loss) | 21,063 | 8,097 | 29,160 | |||||||
Interest rate swap gain (loss), net of reclassifications to earnings | (1,582) | $ 4,263 | 2,681 | |||||||
Amortization of terminated interest rate swaps | 230 | 230 | ||||||||
Adjustments for changes in ownership of Partnership | 5,670 | 5,670 | ||||||||
Stockholders' Equity, Ending balance at Dec. 31, 2018 | $ 1,358 | 3,177,982 | 5,773 | $ (79,862) | (2,263,677) | 841,574 | ||||
Stockholders' Equity, Ending, shares at Dec. 31, 2018 | 135,787,509 | (6,381,605) | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Treasury stock purchased | $ (2,007) | $ (2,007) | ||||||||
Treasury stock purchased, shares | (212,080) | (212,080) | ||||||||
Cash dividends | (78,530) | $ (78,530) | ||||||||
Shares issued in ESPP | $ 1 | 770 | 771 | |||||||
Shares issued in ESPP, shares | 87,933 | |||||||||
Stock-based compensation, net of forfeitures | $ 11 | 8,094 | $ 8,105 | |||||||
Stock-based compensation, net of forfeitures, shares | 1,104,793 | (108,917) | ||||||||
Stock options exercised, shares | 0 | |||||||||
Merger-related adjustments/Shares issued for acquisition | $ 217 | 225,663 | $ 225,880 | |||||||
Merger-related adjustments/Shares issued for acquisition, shares | 21,656,683 | |||||||||
Comprehensive income (loss) | ||||||||||
Net income (loss) | 97,330 | 97,330 | ||||||||
Interest rate swap gain (loss), net of reclassifications to earnings | (7,160) | (7,160) | ||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update201613 [Member] | |||||||||
Stockholders' Equity, Ending balance at Dec. 31, 2019 | $ 1,587 | 3,412,509 | (1,387) | $ (81,869) | $ 166 | (2,244,877) | $ 166 | 1,085,963 | ||
Stockholders' Equity, Ending, shares at Dec. 31, 2019 | 158,636,918 | (6,702,602) | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Treasury stock purchased | $ (1,804) | $ (1,804) | ||||||||
Treasury stock purchased, shares | (236,752) | (236,752) | ||||||||
Cash dividends | (88,832) | $ (88,832) | ||||||||
Shares issued in ESPP | $ 2 | 681 | 683 | |||||||
Shares issued in ESPP, shares | 171,563 | |||||||||
Stock-based compensation, net of forfeitures | $ 11 | 10,756 | $ 10,767 | |||||||
Stock-based compensation, net of forfeitures, shares | 1,206,479 | (113,415) | ||||||||
Stock options exercised, shares | 0 | |||||||||
Contribution from Exterran Corporation | 678 | $ 678 | ||||||||
Comprehensive income (loss) | ||||||||||
Net income (loss) | (68,445) | (68,445) | ||||||||
Interest rate swap gain (loss), net of reclassifications to earnings | (3,619) | (3,619) | ||||||||
Stockholders' Equity, Ending balance at Dec. 31, 2020 | $ 1,600 | $ 3,424,624 | $ (5,006) | $ (83,673) | $ (2,401,988) | $ 935,557 | ||||
Stockholders' Equity, Ending, shares at Dec. 31, 2020 | 160,014,960 | (7,052,769) |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parentheticals) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||||
Dividend declared per common stock (in dollars per share) | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.120 | $ 0.120 | $ 0.580 | $ 0.554 | $ 0.504 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (68,445) | $ 97,330 | $ 29,160 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Loss from discontinued operations, net of tax | 273 | ||
Depreciation and amortization | 193,138 | 188,084 | 174,946 |
Long-lived and other asset impairment | 79,556 | 44,663 | 28,127 |
Goodwill impairment | 99,830 | ||
Inventory write-downs | 1,349 | 944 | 1,614 |
Amortization of operating lease ROU assets | 3,477 | 2,931 | |
Amortization of deferred financing costs | 5,554 | 6,211 | 6,113 |
Amortization of debt discount | 187 | 910 | 1,410 |
Amortization of debt premium | (84) | ||
Amortization of terminated interest rate swaps | 291 | ||
Debt extinguishment loss | 3,971 | 3,653 | 2,450 |
Interest rate swaps | 3,178 | (1,071) | (131) |
Stock-based compensation expense | 10,551 | 8,105 | 7,388 |
Non-cash restructuring charges | 1,660 | ||
Provision for credit losses | 3,525 | 2,567 | 1,677 |
(Gain) loss on sale of assets, net | 1,832 | (16,016) | (5,674) |
Gain on sale of business | (12,475) | ||
Deferred income tax provision (benefit) | (17,764) | (39,597) | 5,238 |
Amortization of contract costs | 26,629 | 23,330 | 14,939 |
Deferred revenue recognized in earnings | (19,489) | (42,268) | (28,428) |
Change in assets and liabilities, net of acquisition: | |||
Accounts receivable, trade | 36,395 | 3,248 | (21,028) |
Inventory | 3,972 | 6,036 | 4,210 |
Other assets | (5,797) | 4,458 | (15,249) |
Contract costs, net | (13,262) | (27,237) | (32,435) |
Accounts payable and other liabilities | (15,089) | (12,728) | 14,964 |
Deferred revenue | 12,732 | 36,578 | 36,571 |
Other | 147 | 12 | (206) |
Net cash provided by continuing operations | 335,278 | 290,416 | 225,947 |
Net cash used in discontinued operations | (269) | ||
Net cash provided by operating activities | 335,278 | 290,147 | 225,947 |
Cash flows from investing activities: | |||
Capital expenditures | (140,302) | (385,198) | (319,102) |
Proceeds from sale of business | 33,651 | ||
Proceeds from sale of property, plant and equipment and other assets | 18,911 | 80,961 | 33,927 |
Proceeds from insurance and other settlements | 2,709 | 3,696 | 252 |
Cash paid in Elite Acquisition | (214,019) | ||
Net cash used in investing activities | (85,031) | (514,560) | (284,923) |
Cash flows from financing activities: | |||
Borrowings of long-term debt | 1,049,000 | 2,395,250 | 714,830 |
Repayments of long-term debt | (1,204,375) | (2,071,750) | (605,636) |
Payments for debt issuance costs | (5,269) | (22,426) | (3,332) |
Proceeds from (payments for) settlement of interest rate swaps that include financing elements | (2,916) | 1,180 | 190 |
Dividends paid to Archrock stockholders | (88,832) | (78,530) | (58,288) |
Distributions paid to noncontrolling partners in the Partnership | (11,766) | ||
Proceeds from stock options exercised | 264 | ||
Proceeds from stock issued under ESPP | 683 | 771 | 803 |
Purchases of treasury stock | (1,804) | (2,007) | (1,759) |
Contribution from Exterran Corporation | 678 | 18,744 | |
Net cash provided by (used in) financing activities | (252,835) | 222,488 | 54,050 |
Net decrease in cash and cash equivalents | (2,588) | (1,925) | (4,926) |
Cash and cash equivalents, beginning of period | 3,685 | 5,610 | 10,536 |
Cash and cash equivalents, end of period | 1,097 | 3,685 | 5,610 |
Supplemental disclosure of cash flow information: | |||
Interest paid | (99,797) | (97,451) | (86,758) |
Income taxes refunded (paid), net | (94) | 1,973 | 2,131 |
Supplemental disclosure of non-cash investing and financing transactions: | |||
Accrued capital expenditures | 1,624 | 11,767 | 17,491 |
Non-cash consideration received in July 2020 Disposition | $ 5,762 | ||
Elite Acquisition | |||
Supplemental disclosure of non-cash investing and financing transactions: | |||
Issuance of Archrock common stock pursuant to merger or acquisition, net of tax | $ 225,880 | ||
Merger Transaction | |||
Supplemental disclosure of non-cash investing and financing transactions: | |||
Issuance of Archrock common stock pursuant to merger or acquisition, net of tax | $ 57,421 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Description Of Business | |
Description of Business | 1. Description of Business We are an energy infrastructure company with a pure-play focus on midstream natural gas compression. We are the leading provider of natural gas compression services to customers in the oil and natural gas industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment in the U.S. We operate in two business segments: contract operations and aftermarket services. Our predominant segment, contract operations, primarily includes designing, sourcing, owning, installing, operating, servicing, repairing and maintaining our owned fleet of natural gas compression equipment to provide natural gas compression services to our customers. In our aftermarket services business, we sell parts and components and provide operations, maintenance, overhaul and reconfiguration services to customers who own compression equipment. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation Our Financial Statements include Archrock and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. Our Financial Statements are prepared in accordance with GAAP and the rules and regulations of the SEC. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. Because of the inherent uncertainties in this process, actual future results could differ from those expected as of the reporting date. Management believes that the estimates and assumptions used are reasonable. Significant Accounting Policies Cash and Cash Equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we are entitled to receive in exchange for those goods or services. Sales and usage-based taxes that are collected from the customer are excluded from revenue. Contract Operations Natural gas compression services. Variable consideration exists if customers are billed at a lesser standby rate when a unit is not running. We recognize revenue for such variable consideration monthly, as the invoice corresponds directly to the value transferred to the customer based on our performance completed to date. The rate for standby service is lower to reflect the decrease in costs and effort required to provide standby service when a unit is not running. Billable Maintenance Service Aftermarket Services OTC Parts and Components Sales Maintenance, Overhaul and Reconfiguration Services For service provided based on a fixed monthly fee, the performance obligation is a series in which the unit of service is one month. The customer receives substantially the same benefit each month from the service, regardless of the type of service activity performed, which may vary. As the progress towards satisfaction of the performance obligation is measured based on the passage of time, revenue is recognized monthly based on the fixed fee provided for in the contract. For service provided based on a quoted fixed fee, progress towards satisfaction of the performance obligation is measured using an input method based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue each reporting period is determined by multiplying the transaction price by the ratio of actual costs incurred to date to total estimated costs expected for the service. Significant judgment is involved in the estimation of the progress to completion. Any adjustments to the measure of the progress to completion is accounted for on a prospective basis. Changes to the scope of service is recognized as an adjustment to the transaction price in the period in which the change occurs. Service provided based on time and materials are generally short-term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. We apply an estimated gross margin percentage, which is fixed based on historical time and materials-based service, to actual costs incurred. We evaluate the estimated gross margin percentage at the end of each reporting period and adjust the transaction price as appropriate. Contract Assets and Liabilities We recognize a contract asset when we have the right to consideration in exchange for goods or services transferred to a customer when the right is conditioned on something other than the passage of time. We recognize a contract liability when we have an obligation to transfer goods or services to a customer for which we have already received consideration. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and trade accounts receivable. Our temporary cash investments have a zero loss expectation because we maintain minimal balances in our cash investment accounts and have no history of loss. Trade accounts receivable are due from companies of varying size engaged principally in oil and natural gas activities throughout the U.S. We review the financial condition of customers prior to extending credit and generally do not obtain collateral for trade receivables. Payment terms are on a short-term basis and in accordance with industry practice. We consider this credit risk to be limited due to these companies’ financial resources, the nature of the products and services we provide and the terms of our customer agreements. Due to the short-term nature of our trade receivables, we consider the amortized cost to be the same as the carrying amount of the receivable, excluding the allowance for credit losses. We recognize an allowance for credit losses when a receivable is recorded, even when the risk of loss is remote. We utilize an aging schedule to determine our allowance for credit losses, and measure expected credit losses on a collective (pool) basis when similar risk characteristics exist. We rely primarily on ratings assigned by external rating agencies and credit monitoring services to assess credit risk and aggregate customers first by low, medium or high risk asset pools, and then by delinquency status. We also consider the internal risk associated with geographic location and the services we provide to the customer when determining asset pools. If a customer does not share similar risk characteristics with other customers, we evaluate the customer’s outstanding trade receivables for expected credit losses on an individual basis. Trade receivables evaluated individually are not included in our collective assessment. Each reporting period, we reassess our customers’ risk profiles and determine the appropriate asset pool classification, or perform individual assessments of expected credit losses, based on the customers’ risk characteristics at the reporting date. The contractual life of our trade receivables is primarily 30 days based on the payment terms specified in the contract. Contract operations services are generally billed monthly at the beginning of the month in which service is being provided. Aftermarket services billings typically occur when parts are delivered or service is completed. Loss rates are separately determined for each asset pool based on the length of time a trade receivable has been outstanding. We analyze two years of internal historical loss data, including the effects of prepayments, write-offs and subsequent recoveries, to determine our historical loss experience. Our historical loss information is a relevant data point for estimating credit losses, as the data closely aligns with trade receivables due from our customers. Ratings assigned by external rating agencies and credit monitoring services consider past performance and forecasts of future economic conditions in assessing credit risk. We routinely update our historical loss data to reflect our customers’ current risk profile, to ensure the historical data and loss rates are relevant to the pool of assets for which we are estimating expected credit losses. At December 31, 2020, Chevron U.S.A. Inc. and Williams Partners accounted for 14% and 10% of our trade accounts receivable balance, respectively. No customer accounted for more than 10% of our trade accounts receivable balance at December 31, 2019. During the years ended December 31, 2020, 2019 and 2018, we recorded bad debt expense of $3.5 million, $2.6 million and $1.7 million, respectively. The following table summarizes the changes in our allowance for credit losses balance during the year ended December 31, 2020 (in thousands): Balance at December 31, 2019 $ 2,210 Impact of adoption of ASU 2016-13 on January 1, 2020 (216) Provision for credit losses 3,525 Write-offs charged against allowance (2,149) Balance at December 31, 2020 $ 3,370 Inventory Inventory consists of parts used for maintenance of natural gas compression equipment. Inventory is stated at the lower of cost and net realizable value using the average cost method. Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 Other 3 to 10 years Major improvements that extend the useful life of an asset are capitalized and depreciated over the estimated useful life of the major improvement, up to seven years. Repairs and maintenance are expensed as incurred. Long-Lived Assets We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. An impairment loss exists when estimated undiscounted cash flows expected from the use of the asset and its eventual disposition are less than its carrying amount. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its fair value. Identifiable intangibles are amortized over the estimated useful life of the asset. Leases As a result of our adoption of ASC 842 Leases on January 1, 2019, we recorded an operating lease ROU asset and an operating lease liability on our consolidated balance sheet. Under previous guidance, operating leases were not recorded to the balance sheet. We determine if an arrangement is a lease at inception and determine lease classification and recognize ROU assets and liabilities on the lease commencement date based on the present value of lease payments over the lease term. As the discount rate implicit in the lease is rarely readily determinable, we estimate our incremental borrowing rate using information available at commencement date in determining the present value of the lease payments. The lease term includes options to extend when we are reasonably certain to exercise the option. Short-term leases, those with an initial term of 12 months or less, are not recorded on the balance sheet. Variable costs such as our proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Operating lease expense for lease payments is recognized on a straight-line basis over the term of the lease. Our facility leases, of which we are the lessee, contain lease and nonlease components, which we have elected to account for as a single lease component, as the nonlease components are not significant to the total consideration of the contract and separating the nonlease component would have no effect on lease classification. As it relates to our contract operations service agreements in which we are a lessor, the services nonlease component is predominant over the compression package lease component and therefore recognition of these agreements will continue to follow the ASC 606 Revenue guidance. Under previous guidance, no separation of lease and nonlease components is required, for either lessee or lessor. Goodwill The goodwill acquired in connection with the Elite Acquisition represented the excess of consideration transferred over the fair value of the assets and liabilities acquired. We review the carrying amount of our goodwill in the fourth quarter of every year, or whenever indicators of potential impairment exist, to determine if the carrying amount of a reporting unit exceeds its fair value, including the applicable goodwill. We perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is impaired. If the fair value is more likely than not impaired, we perform a quantitative impairment test to identify impairment and measure the amount of impairment loss to be recognized, if any. Our qualitative assessment includes consideration of various events and circumstances and their potential impact to a reporting unit’s fair value, including macroeconomic and industry conditions such as a deterioration in our operating environment and limitations on access to capital and other developments in the equity and credit markets, cost factors that could have a negative effect on earnings and cash flows, relevant entity-specific and reporting unit-specific events and overall financial performance such as declining earnings or cash flows or a sustained decrease in share price. The quantitative impairment test (i) allocates goodwill and our other assets and liabilities to our reporting units, contract operations and aftermarket services, (ii) calculates the fair value of the reporting units and (iii) determines the impairment loss, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value (limited to the total amount of goodwill allocated to that reporting unit). All of the goodwill recognized in the Elite Acquisition was allocated to our contract operations reporting unit. The fair value of the contract operations reporting unit is calculated using the expected present value of future cash flows method. Significant estimates are made to determine future cash flows including future revenues, costs and capital requirements and the appropriate risk-adjusted discount rate by which to discount the estimated future cash flows. In the first quarter of 2020, the global response to the COVID-19 pandemic significantly impacted our market capitalization and estimates of future revenues and cash flows, which triggered the need to perform a quantitative test of the fair value of our contract operations reporting unit as of March 31, 2020. The quantitative test determined that the carrying amount of our contract operations reporting unit exceeded its fair value and we recorded a full impairment loss on goodwill in the first quarter as a result. Internal-Use Software Certain of our contracts have been deemed to be hosting arrangements that are service contracts, including those related to the cloud migration of our ERP system and cloud services for our new mobile workforce, telematics and inventory management tools. Certain costs incurred for the implementation of a hosting arrangement that is a service contract are capitalized and amortized on a straight-line basis over the term of the respective contract. Amortization begins for each component of the hosting arrangement when the component becomes ready for its intended use. Capitalized implementation costs are presented in other assets, the same line item in our consolidated balance sheets that a prepayment of the fees for the associated hosting arrangement would be presented. Amortization expense of the capitalized implementation costs is presented in SG&A, the same line item in our consolidated statements of operations as the expense for fees for the associated hosting arrangement. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If a valuation allowance was previously recorded and we subsequently determined we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax assets’ valuation allowance, which would reduce the provision for income taxes. We record uncertain tax positions in accordance with the accounting standard on income taxes under a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Hedging and Use of Derivative Instruments We use derivative instruments to manage our exposure to fluctuations in the variable interest rate of our Credit Facility and thereby minimize the risks and costs associated with financial activities. We do not use derivative instruments for trading or other speculative purposes. We record interest rate swaps on the balance sheet as either derivative assets or derivative liabilities measured at their fair value. The fair value of our derivatives is based on the income approach (discounted cash flow) using market observable inputs, including LIBOR forward curves. Changes in the fair value of the derivatives designated as cash flow hedges are recognized as a component of other comprehensive income (loss) until the hedged transaction affects earnings. At that time, amounts are reclassified into earnings to interest expense, the same statement of operations line item to which the earnings effect of the hedged item is recorded. Cash flows from derivatives designated as hedges are classified in our consolidated statements of cash flows under the same category as the cash flows from the underlying assets, liabilities or anticipated transactions unless the derivative contract contains a significant financing element, in which case, the cash settlements for these derivatives are classified as cash flows from financing activities. To qualify for hedge accounting treatment, we must formally document, designate and assess the effectiveness of the transactions. We perform quarterly qualitative prospective and retrospective hedge effectiveness assessments unless facts and circumstances related to the hedging relationships change such that we can no longer assert qualitatively that the cash flow hedge relationships were and continue to be highly effective. If the necessary correlation ceases to exist or if the anticipated transaction is no longer probable, we would discontinue hedge accounting and apply mark-to-market accounting. Amounts paid or received from interest rate swap agreements are recorded in interest expense and matched with the cash flows and interest expense of the debt being hedged, resulting in an adjustment to the effective interest rate. |
Recent Accounting Developments
Recent Accounting Developments | 12 Months Ended |
Dec. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Developments | 3. Recent Accounting Developments Accounting Standards Updates Implemented Credit Losses In June 2016, the FASB issued ASU 2016-13, which changes the impairment model for financial assets measured at amortized cost and certain other instruments, and requires entities to use a new current expected credit loss model that results in recognition of expected losses over the contractual life of an asset. We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach. The adoption resulted in a $0.2 million decrease in our allowance for credit losses and a corresponding pre-tax cumulative effect adjustment to retained earnings in our consolidated balance sheet at January 1, 2020. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Fair Value Measurements On January 1, 2020, we adopted ASU 2018-13, which amends the required fair value measurements disclosures related to valuation techniques and inputs used, uncertainty in measurement and changes in measurements applied. These amendments resulted in new, prospective disclosures of the range and weighted average of the significant unobservable inputs used to develop our Level 3 fair value measurements related to our idle and previously-culled compressors. The adoption of ASU 2018-13 had no impact on our consolidated financial statements. Income Taxes On January 1, 2020, we adopted ASU 2019-12, which simplifies the accounting for income taxes by, among other things, removing certain exceptions related to the incremental approach for intraperiod tax allocation, the year-to-date loss methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities on outside basis differences. ASU 2019-12 also clarifies other aspects of the accounting for income taxes in order to improve consistency of application. The adoption of ASU 2019-12 had no impact on our consolidated financial statements. Accounting Standards Updates Not Yet Implemented Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. Entities may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. Modifications to our interest rate swap and Credit Facility agreements during the effective period of this amendment will be assessed and if the modifications meet the criteria for the optional expedients and exceptions, we intend to adopt ASU 2020-04 and apply the amendments as applicable. |
Business Transactions
Business Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Business Transactions | |
Business Transactions | 4. Business Transactions July 2020 Disposition On July 9, 2020, we completed the sale of the turbocharger business included within our aftermarket services segment . In connection with the sale, we entered into a supply agreement to purchase a minimum amount of turbocharger goods and services over a two-year term. In addition to cash of $9.5 million received upon closing, an additional $3.0 million is due on the first anniversary of the closing date and $3.5 million will be received through the purchase of turbocharger goods and services under the supply agreement. During the year ended December 31, 2020, we received cash of $0.7 million under the supply agreement and recognized a gain on the sale of $9.3 million in gain on sale of assets, net in our consolidated statements of operations. March 2020 Disposition On March 1, 2020, we completed the sale of certain contract operations customer service agreements and approximately 200 compressors, comprising approximately 35,000 horsepower, used to provide compression services under those agreements as well as other assets used to support the operations. We allocated customer-related and contract-based intangible assets and goodwill based on a ratio of the horsepower sold relative to the total horsepower of the asset group. We recognized a gain on the sale of $3.2 million in gain on sale of assets, net in our consolidated statements of operations during the year ended December 31, 2020. Elite Acquisition On August 1, 2019, we completed the Elite Acquisition whereby we acquired from Elite Compression substantially all of its assets, including a fleet of predominantly large compressors comprising approximately 430,000 horsepower, vehicles, real property and inventory, and certain liabilities for aggregate consideration consisting of $214.0 million in cash and 21.7 million shares of common stock with an acquisition date fair value of $225.9 million. The cash portion of the acquisition was funded with borrowings on the Credit Facility. The Elite Acquisition was accounted for using the acquisition method, which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the acquisition date. The excess of the consideration transferred over those fair values is recorded as goodwill. The following table summarizes the purchase price allocation based on the estimated fair values of the acquired assets and liabilities as of the acquisition date (in thousands): Accounts receivable $ 9,007 Inventory 7,987 Other current assets 608 Property, plant and equipment 286,158 Operating lease ROU assets 682 Goodwill 100,598 Intangible assets 40,237 Accounts payable, trade (2,079) Accrued liabilities (2,973) Operating lease liabilities (326) Purchase price $ 439,899 Our valuation methodology and significant inputs for fair value measurements are detailed by asset class below. The fair value measurements for property, plant and equipment and intangible assets are based on significant inputs that are not observable in the market and therefore represent Level 3 measurements. Goodwill The goodwill resulting from the acquisition was attributable to the expansion of our services in various regions in which we currently operate and was allocated to our contract operations segment. The goodwill had an indefinite life that was to be reviewed annually for impairment or more frequently if indicators of potential impairment existed. All of the goodwill recorded for this acquisition is expected to be deductible for U.S. federal income tax purposes. See Note 9 (“Goodwill”) for details on the 2020 impairment of our goodwill. Property, Plant and Equipment The property, plant and equipment is primarily comprised of compression equipment that will be depreciated on a straight-line basis over an estimated average remaining useful life of 15 years. The fair value of the property, plant and equipment was determined using the cost approach, whereby we estimated the replacement cost of the assets by evaluating recent purchases of similar assets or published data, and then adjusted replacement cost for physical deterioration and functional and economic obsolescence, as applicable. Intangible Assets The intangible assets consist of customer relationships that have an estimated useful life of 15 years. The amount of intangible assets and their associated useful life were determined based on the period over which the assets are expected to contribute directly or indirectly to our future cash flows. The fair value of the identifiable intangible assets was determined using the multi-period excess earnings method, which is a specific application of the discounted cash flow method, an income approach, whereby we estimated and then discounted the future cash flows of the intangible asset by adjusting overall business revenue for attrition, obsolescence, cost of sales, operating expenses, taxes and the required returns attributable to other contributory assets acquired. Significant estimates made in arriving at expected future cash flows included our expected customer attrition rate and the amount of earnings attributable to the assets. To discount the estimated future cash flows, we utilized a discount rate that was at a premium to our weighted average cost of capital to reflect the less liquid nature of the customer relationships relative to the tangible assets acquired. Unaudited Pro Forma Financial Information Unaudited pro forma financial information for the years ended December 31, 2019 and 2018 was derived by adjusting our historical financial statements in order to give effect to the assets and liabilities acquired in the Elite Acquisition. The Elite Acquisition is presented in this unaudited pro forma financial information as though the acquisition occurred as of January 1, 2018, and reflects the following: ● the acquisition of substantially all of Elite Compression’s assets, including a compression fleet of approximately 430,000 horsepower, vehicles, real property and inventory, and certain liabilities; ● borrowings of $214.0 million under the Credit Facility for cash consideration exchanged in the acquisition; and ● the exclusion of $7.8 million of financial advisory, legal and other professional fees incurred related to the acquisition and recorded to transaction-related costs in our consolidated statements of operations during the year ended December 31, 2019. The unaudited pro forma financial information below is presented (in thousands) for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the transaction been consummated at the beginning of the period presented, nor is it necessarily indicative of future results. Year Ended December 31, 2019 2018 Revenue $ 1,009,763 $ 977,929 Net income attributable to Archrock stockholders 106,521 24,566 The results of operations attributable to the assets and liabilities acquired in the Elite Acquisition have been included in our consolidated financial statements as part of our contract operations segment since the date of acquisition. Revenue attributable to the assets acquired from the date of acquisition, August 1, 2019, through December 31, 2019 was $33.2 million. We are unable to provide earnings attributable to the assets and liabilities acquired since the date of acquisition as we do not prepare full stand-alone earnings reports for those assets and liabilities. Harvest Sale On August 1, 2019, we completed an asset sale in which Harvest acquired from us approximately 80,000 active and idle compression horsepower, vehicles and parts inventory for cash consideration of $30.0 million. We recorded a $6.6 million gain on this sale to gain on sale of assets, net in our consolidated statements of operations during the year ended December 31, 2019. The assets were previously reported under our contract operations segment. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 5. Discontinued Operations Spin-off of Exterran Corporation In 2015 we completed the Spin-off. In order to effect the Spin-off and govern our relationship with Exterran Corporation after the Spin-off, we entered into several agreements with Exterran Corporation, which include, but are not limited to, the separation and distribution agreement and the tax matters agreement. The separation and distribution agreement specifies, among other things, our right to promptly receive payments from Exterran Corporation based on a notional amount corresponding to payments received by Exterran Corporation from PDVSA in respect of the sale of Exterran Corporation’s previously nationalized assets after such amounts are collected by Exterran Corporation. During the years ended December 31, 2020 and 2018, we received $0.7 million and $18.7 million, respectively, from Exterran Corporation pursuant to this term of the separation and distribution agreement. We entered into an assignment from Exterran Corporation in 2020 such that any future payments by PDVSA would be received directly by us. The tax matters agreement governs the respective rights, responsibilities and obligations of Exterran Corporation and us with respect to certain tax matters. As of December 31, 2020 and 2019, we had $7.9 million and $8.5 million, respectively, of unrecognized tax benefits (including interest and penalties) related to Exterran Corporation operations prior to the Spin-off recorded to noncurrent liabilities associated with discontinued operations in our consolidated balance sheets. We had an offsetting indemnification asset of $7.9 million and $8.5 million related to these unrecognized tax benefits recorded to noncurrent assets associated with discontinued operations as of December 31, 2020 and 2019, respectively. The following table presents the balance sheet for our discontinued operations (in thousands): December 31, 2020 2019 Other assets $ 7,868 $ 8,508 Deferred tax assets 3,168 4,393 Total assets associated with discontinued operations $ 11,036 $ 12,901 Deferred tax liabilities $ 7,868 $ 8,508 Total liabilities associated with discontinued operations $ 7,868 $ 8,508 The following table presents the statements of operations for our discontinued operations (in thousands): Year Ended December 31, 2020 2019 2018 Other (income) expense, net $ 640 $ (1,473) $ (654) Provision for (benefit from) income taxes (640) 1,746 654 Loss from discontinued operations, net of tax $ — $ (273) $ — |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | 6. Inventory Inventory consisted of the following (in thousands): December 31, 2020 2019 Parts and supplies $ 57,433 $ 66,121 Work in progress 6,237 8,346 Inventory $ 63,670 $ 74,467 During the years ended December 31, 2020, 2019 and 2018, we recorded write-downs to inventory of $1.3 million, $0.9 million and $1.6 million, respectively, for inventory considered to be excess, obsolete or carried at an amount in excess of net realizable value. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | 7. Property, Plant and Equipment, net Property, plant and equipment, net, consisted of the following (in thousands): December 31, 2020 2019 Compression equipment, facilities and other fleet assets $ 3,439,432 $ 3,653,930 Land and buildings 45,167 50,743 Transportation and shop equipment 106,868 116,057 Computer hardware and software 84,680 93,695 Other 14,457 15,308 Property, plant and equipment 3,690,604 3,929,733 Accumulated depreciation (1,300,930) (1,370,335) Property, plant and equipment, net $ 2,389,674 $ 2,559,398 Depreciation expense was $177.5 million, $172.8 million and $158.4 million during the years ended December 31, 2020, 2019 and 2018, respectively. Assets under construction of $17.6 million and $51.0 million at December 31, 2020 and 2019, respectively, were primarily included in compression equipment, facilities and other fleet assets |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | 8. Leases We have operating leases and subleases for office space, temporary housing, storage and shops. Our leases have remaining lease terms of less than one year to approximately 10 years and most include options to extend the lease term, at our discretion, for an additional one Balance sheet information related to our operating leases follows (in thousands): December 31, Classification 2020 2019 ROU assets Operating lease ROU assets $ 19,236 $ 17,901 Lease liabilities Current Accrued liabilities $ 3,564 $ 3,037 Noncurrent Operating lease liabilities 16,925 16,094 Total lease liabilities $ 20,489 $ 19,131 The components of lease cost follow (in thousands): Year Ended December 31, 2020 2019 Operating lease cost $ 4,508 $ 3,966 Short-term lease cost 52 348 Variable lease cost 1,652 1,607 Total lease cost $ 6,212 $ 5,921 Cash flow and noncash information related to our operating leases follow (in thousands): Year Ended December 31, 2020 2019 Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 5,885 $ 5,420 Operating lease ROU assets obtained in exchange for new lease liabilities 4,812 2,247 Other supplemental information related to our operating leases follows: December 31, 2020 2019 Weighted average remaining lease term (in years) 7.9 8.2 Weighted average discount rate 4.8 % 5.3 % Remaining maturities of lease liabilities as of December 31, 2020 were as follows (in thousands): 2021 $ 4,126 2022 3,288 2023 2,933 2024 2,513 2025 2,213 Thereafter 9,766 Total lease payments 24,839 Less: Interest (4,350) Total lease liabilities $ 20,489 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill | |
Goodwill | 9. Goodwill Our goodwill was recognized in connection with the Elite Acquisition and represents the excess of consideration transferred over the fair value of the assets and liabilities acquired. All of the goodwill was allocated to our contract operations reporting unit. We review the carrying amount of our goodwill in the fourth quarter of every year, or whenever indicators of potential impairment exist, to determine if the carrying amount of our contract operations reporting unit exceeds its fair value, including the goodwill. Beginning in the first quarter of 2020, the COVID-19 pandemic caused a significant deterioration in global macroeconomic conditions, including a collapse in the demand for oil coupled with an oversupply of oil, which commenced substantial spending cuts by our customers and a decline in production. This global response to the pandemic significantly impacted our market capitalization and estimates of future revenues and cash flows, which triggered the need to perform a quantitative test of the fair value of our contract operations reporting unit as of March 31, 2020. The quantitative test determined that the carrying amount of our contract operations reporting unit exceeded its fair value and we recorded a full impairment loss on goodwill in the first quarter as a result. Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions, which have a significant impact on the fair value determined. We determine the fair value of our reporting unit using an equal weighting of both the expected present value of future cash flows and a market approach. The present value of future cash flows is estimated using our most recent forecast and the weighted average cost of capital. The market approach uses a market multiple on the earnings before interest expense, provision for income taxes and depreciation and amortization expense of comparable peer companies. Significant estimates for our reporting unit included in our impairment analysis are our cash flow forecasts, our estimate of the market’s weighted average cost of capital and market multiples. The following table presents the change in the carrying amount of goodwill during the year ended December 31, 2020 (in thousands): Balance at December 31, 2019 $ 100,598 Dispositions (768) Impairment loss (99,830) Balance at December 31, 2020 $ — |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | 10. Intangible Assets, net Intangible assets include customer relationships and contracts associated with various business and asset acquisitions. These acquired intangible assets were recorded at fair value determined as of the acquisition date and are being amortized over the period we expect to benefit from the assets. Intangible assets, net consisted of the following (in thousands): December 31, 2020 December 31, 2019 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Customer-related (10-25 year life) $ 147,169 $ (86,512) $ 147,244 $ (76,176) Contract-based (5-7 year life) 37,730 (36,856) 37,773 (31,370) Intangible assets $ 184,899 $ (123,368) $ 185,017 $ (107,546) Amortization expense of these intangible assets totaled $15.6 million, $15.3 million and $16.5 million during the years ended December 31, 2020, 2019 and 2018, respectively. Estimated future intangible assets amortization expense as of December 31, 2020 was as follows (in thousands): 2021 $ 11,372 2022 9,171 2023 7,318 2024 6,158 2025 3,947 Thereafter 23,565 Total $ 61,531 |
Contract Costs
Contract Costs | 12 Months Ended |
Dec. 31, 2020 | |
Capitalized Contract Cost [Abstract] | |
Contract Costs | 11. Contract Costs We capitalize incremental costs to obtain a contract with a customer if we expect to recover those costs. Capitalized costs include commissions paid to our sales force to obtain contract operations contracts. We expense commissions paid for sales of service contracts and OTC parts and components within our aftermarket services segment, as the amortization period is less than one year. We had contract costs of $3.2 million and $4.8 million associated with sales commissions recorded in our consolidated balance sheets at December 31, 2020 and 2019, respectively. We capitalize costs incurred to fulfill a contract if those costs relate directly to a contract, enhance resources that we will use in satisfying performance obligations and if we expect to recover those costs. Capitalized costs incurred to fulfill our customer contracts include freight charges to transport compression assets before transferring services to the customer and mobilization activities associated with our contract operations services. Aftermarket services fulfillment costs are recognized based on the percentage-of-completion method applicable to the customer contract and do not typically result in the recognition of contract costs. We had contract costs of $26.0 million and $38.1 million associated with freight and mobilization recorded in our consolidated balance sheets at December 31, 2020 and 2019, respectively. Contract operations obtainment and fulfillment costs are amortized based on the transfer of service to which the assets relate, which is estimated to be 38 months based on average contract term, including anticipated renewals. We assess periodically whether the 38-month estimate fairly represents the average contract term and adjust as appropriate. Contract costs associated with commissions are amortized to SG&A. Contract costs associated with freight and mobilization are amortized to cost of sales (excluding depreciation and amortization). During the years ended December 31, 2020, 2019 and 2018, we amortized $3.0 million, $2.6 million and $1.5 million, respectively, related to sales commissions and $23.6 million, $20.7 million and $13.4 million, respectively, related to freight and mobilization. |
Hosting Arrangements
Hosting Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Hosting Arrangements | 12. Hosting Arrangements In the fourth quarter of 2018 we began a process and technology transformation project that will, among other things, upgrade or replace our existing ERP, supply chain and inventory management systems and expand the remote monitoring capabilities of our compression fleet. Included in this project are hosting arrangements that are service contracts related to the cloud migration of our ERP system and cloud services for our new mobile workforce, telematics and inventory management tools. As of December 31, 2020 and 2019, we had $7.7 million and $5.5 million, respectively, of capitalized implementation costs related to our hosting arrangements that are service contracts included in other assets in our consolidated balance sheets. Accumulated amortization was $0.3 million at December 31, 2020. We recorded $0.3 million of amortization expense to SG&A in our consolidated statements of operations during the year ended December 31, 2020. During the year ended December 31, 2020, we impaired $1.6 million of capitalized implementation costs related to the hosting arrangements of the mobile workforce component of our project due to the termination of the agreement, which was included in long-lived and other asset impairment |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 13. Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2020 2019 Accrued salaries and other benefits $ 16,332 $ 19,300 Accrued income and other taxes 11,414 11,019 Accrued interest 22,693 16,462 Derivative liability - current 4,809 593 Other accrued liabilities 21,745 20,471 Accrued liabilities $ 76,993 $ 67,845 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 14. Long-Term Debt Long-term debt consisted of the following (in thousands): December 31, 2020 2019 Credit Facility $ 393,000 $ 513,000 2028 Notes 800,000 500,000 Add: Debt premium, net of amortization 14,541 — Less: Deferred financing costs, net of amortization (11,766) (8,090) 802,775 491,910 2027 Notes 500,000 500,000 Less: Deferred financing costs, net of amortization (6,908) (7,999) 493,092 492,001 2022 Notes — 350,000 Less: Debt discount, net of amortization — (2,046) Less: Deferred financing costs, net of amortization — (2,316) — 345,638 Long-term debt $ 1,688,867 $ 1,842,549 Credit Facility As of December 31, 2020, there were $12.4 million letters of credit outstanding under the Credit Facility and the applicable margin on borrowings outstanding was 2.4%. The weighted average annual interest rate on the outstanding balance under the Credit Facility, excluding the effect of interest rate swaps, was 2.7% and 4.3% at December 31, 2020 and 2019, respectively. As a result of the facility’s ratio requirements (see below), $444.1 million of the $844.6 million of undrawn capacity was available for additional borrowings as of December 31, 2020. As of December 31, 2020, we were in compliance with all covenants under the Credit Facility agreement. Amendment No. 2 On November 8, 2019, we amended the Credit Facility to, among other things: ● extend the maturity date of the Credit Facility from March 30, 2022 to November 8, 2024, effective as of the execution of Amendment No. 2; and ● change the applicable margin for borrowings under the Credit Facility to those discussed in “Other Facility Terms” below. We incurred $6.4 million in transaction costs related to Amendment No. 2, which were included in other assets in our consolidated balance sheet and are being amortized over the term of the Credit Facility. Amendment No. 1 In February 2018, we amended the Credit Facility to, among other things: ● increase the maximum Total Debt to EBITDA ratios, as defined in the Credit Facility agreement (see below for the revised ratios), effective as of the execution of Amendment No. 1 in February 2018; and ● effective upon completion of the Merger in April 2018: – increase the aggregate revolving commitment from $1.1 billion to $1.25 billion; – increase the amount available for the issuance of letters of credit from $25.0 million to $50.0 million; and – increase the basket sizes under certain covenants including covenants limiting our ability to make investments, incur debt, make restricted payments, incur liens and make asset dispositions. We incurred $3.3 million in transaction costs related to Amendment No. 1, which were included in other assets in our consolidated balance sheet and are being amortized over the term of the Credit Facility. Other Facility Terms Subject to certain conditions, including the approval by the lenders, we are able to increase the aggregate commitments under the Credit Facility by up to an additional $250.0 million. Portions of the Credit Facility up to $50.0 million are available for the issuance of swing line loans. The Credit Facility bears interest at a base rate or LIBOR, at our option, plus an applicable margin. Depending on our leverage ratio, the applicable margin varies (i) in the case of LIBOR loans, from 2.00% to 2.75% and (ii) in the case of base rate loans, from 1.00% to 1.75%. The base rate is the highest of (i) the prime rate announced by JPMorgan Chase Bank, (ii) the Federal Funds Effective Rate plus 0.50% and (iii) one-month LIBOR plus 1.00%. Additionally, we are required to pay commitment fees based on the daily unused amount of the Credit Facility at a rate of 0.375%. We incurred $2.0 million, $1.9 million and $2.1 million in commitment fees on the daily unused amount of our facilities during the years ended December 31, 2020, 2019 and 2018, respectively. The Credit Facility borrowing base consists of eligible accounts receivable, inventory and compressors, the largest of which is compressors. Borrowings under the Credit Facility are secured by substantially all of our personal property assets and our Significant Domestic Subsidiaries (as defined in the Credit Facility agreement), including all of the membership interests of our Domestic Subsidiaries (as defined in the Credit Facility agreement). The Credit Facility agreement contains various covenants including, but not limited to, restrictions on the use of proceeds from borrowings and limitations on our ability to incur additional indebtedness, engage in transactions with affiliates, merge or consolidate, sell assets, make certain investments and acquisitions, make loans, grant liens, repurchase equity and pay distributions. The Credit Facility agreement also contains various covenants requiring mandatory prepayments from the net cash proceeds of certain asset transfers. As of December 31, 2020, the following consolidated financial ratios, as defined in our Credit Facility agreement, were required: EBITDA to Interest Expense 2.5 to 1.0 Senior Secured Debt to EBITDA 3.5 to 1.0 Total Debt to EBITDA January 1 through June 30, 2020 5.50 to 1.0 Thereafter (1) 5.25 to 1.0 (1) Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter. Former Credit Facility In April 2018, in connection with the Merger, the Former Credit Facility was terminated. Upon termination, we repaid $63.2 million in borrowings and accrued and unpaid interest and fees outstanding. All commitments under the Former Credit Facility were terminated and the $15.4 million of letters of credit outstanding under the Former Credit Facility were converted to letters of credit under the Credit Facility. As a result of the termination, we recorded a debt extinguishment loss of $2.5 million. We were in compliance with all covenants under the Former Credit Facility through its closing. 2028 Notes and 2027 Notes On December 17, 2020, we completed a private offering of $300.0 million aggregate principal amount of 6.25% senior notes due April 2028, which were issued pursuant to the indenture under which we completed a private offering of $500.0 million aggregate principal amount of 6.25% senior notes in December 2019. The notes of the two offerings have identical terms and are treated as a single class of securities. The $300.0 million of notes were issued at 104.875% of their face value and have an effective interest rate of 5.6%. We received net proceeds of $309.9 million, after deducting issuance costs of $4.7 million, from our December 2020 offering and net proceeds of $491.8 million, after deducting issuance costs of $8.2 million, from our December 2019 offering. In March 2019, we completed a private offering of $500.0 million aggregate principal amount of 6.875% senior notes due April 2027 and received net proceeds of $491.2 million after deducting issuance costs of $8.8 million. The net proceeds from the 2027 Notes and 2028 Notes were used to repay borrowings outstanding under our Credit Facility. Issuance costs related to the 2027 Notes and 2028 Notes are considered deferred financing costs, and together with the issue premium of the December 2020 offering of 2028 Notes, are recorded within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statements of operations over the terms of the notes. The 2027 Notes and 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us and all of our existing subsidiaries, other than Archrock Partners, L.P. and APLP Finance Corp., which are co-issuers of both offerings, and certain of our future subsidiaries. The 2027 Notes and 2028 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior indebtedness. The 2027 Notes and 2028 Notes may be redeemed at any time, in whole or in part, at specified redemption prices and make-whole premiums, plus any accrued and unpaid interest. 2022 Notes On April 1, 2020, the 2022 Notes were redeemed at 100% of their $350.0 million aggregate principal amount plus accrued and unpaid interest of $10.5 million with borrowings under the Credit Facility. A debt extinguishment loss of $4.0 million related to the redemption was recognized during the year ended December 31, 2020. 2021 Notes In April 2019, the 2021 Notes were redeemed at 100% of their $350.0 million aggregate principal amount plus accrued and unpaid interest of $0.2 million with borrowings under the Credit Facility. We recorded a debt extinguishment loss of $3.7 million related to the redemption during the year ended December 31, 2019. Long-Term Debt Maturity Contractual maturities of long-term debt over the next five years, excluding interest to be accrued, at December 31, 2020 were as follows (in thousands): 2021 $ — 2022 — 2023 — 2024 393,000 2025 — Long-term debt maturities through 2025 $ 393,000 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss). | |
Accumulated Other Comprehensive Income (Loss) | 15. Accumulated Other Comprehensive Income (Loss) Components of comprehensive income (loss) are net income (loss) and all changes in equity during a period except those resulting from transactions with owners. Our accumulated other comprehensive income (loss) consists of changes in the fair value of our interest rate swap derivative instruments, net of tax, which are designated as cash flow hedges, amortization of terminated interest rate swaps and adjustments related to changes in our ownership of the Partnership as the result of the Merger. The following table presents the changes in accumulated other comprehensive income (loss) of our derivative cash flow hedges, net of tax and excluding noncontrolling interest (in thousands): Year Ended December 31, 2020 2019 2018 Beginning accumulated other comprehensive income (loss) $ (1,387) $ 5,773 $ 1,197 Loss recognized in other comprehensive income (loss), net of tax provision (benefit) of $(1,776), $(1,425) and $169, respectively (6,683) (5,360) (659) (Gain) loss reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax provision (benefit) of $(814), $478 and $185, respectively (1) 3,064 (1,800) (435) Merger-related adjustments (2) — — 5,670 Other comprehensive income (loss) attributable to Archrock stockholders (3,619) (7,160) 4,576 Ending accumulated other comprehensive income (loss) $ (5,006) $ (1,387) $ 5,773 (1) Included stranded tax effects resulting from the Tax Cuts and Jobs Act of $0.3 million reclassified to accumulated deficit during the year ended December 31, 2018. (2) Pursuant to the Merger, we reclassified a gain of $5.7 million from noncontrolling interest to accumulated other comprehensive income (loss) related to the fair value of our derivative instruments that was previously attributed to public ownership of the Partnership . See Note 22 (“Derivatives”) for further details on our interest rate swap derivative instruments. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Equity | 16. Equity Elite Acquisition In August 2019, we completed the Elite Acquisition. A portion of the acquisition’s purchase price was funded through the issuance of 21.7 million shares of common stock with an acquisition date fair value of $225.9 million, which was recorded to common stock and additional paid-in capital in our consolidated statements of equity. See Note 4 (“Business Transactions”) for further details of this acquisition. Merger Transaction In April 2018, we completed the Merger and issued 57.6 million shares of our common stock to acquire the 41.2 million common units of the Partnership not owned by us prior to the Merger at a fixed exchange ratio of 1.40 shares of our common stock for each Partnership common unit for total implied consideration of $625.3 million. Additionally, the incentive distribution rights in the Partnership, all of which we owned prior to the Merger, were canceled and ceased to exist. As a result of the Merger, the Partnership’s common units are no longer publicly traded. As we controlled the Partnership prior to the Merger and continue to control the Partnership after the Merger, we accounted for the change in our ownership interest in the Partnership as an equity transaction in the second quarter of 2018. No gain or loss was recognized in our consolidated statements of operations as a result of the Merger. Prior to the Merger, public unitholders held a 57% ownership interest in the Partnership and we owned the remaining 43% equity interest. The equity interests in the Partnership that were owned by the public prior to the Merger are reflected in noncontrolling interest in our consolidated statements of equity. The earnings of the Partnership that were attributed to its common units held by the public prior to the Merger are reflected in net income attributable to noncontrolling interest in our consolidated statements of operations. The tax effects of the Merger were reported as adjustments to other assets, noncurrent assets associated with discontinued operations, deferred tax liabilities, additional paid-in capital and other comprehensive income. The change in ownership and tax step up from the consideration given in the Merger caused us to record a $156.0 million deferred tax asset, which resulted in an overall $52.2 million net deferred tax asset. We evaluated the realizability of our resulting net deferred tax asset position by assessing the available positive and negative evidence and concluded, based on the weight of the evidence, that a $50.8 million valuation allowance was required. The $105.2 million net tax impact of the change in deferred tax assets and the valuation allowance was recorded as an offsetting increase to additional paid-in capital. We incurred $0.5 million and $10.2 million of transaction costs directly attributable to the Merger during the years ended December 31, 2019 and 2018, respectively, including financial advisory, legal service and other professional fees, which were recorded to transaction-related costs in our consolidated statements of operations. The following table presents the effects of changes in our ownership interest in the Partnership on the equity attributable to Archrock stockholders during the year ended December 31, 2018 (in thousands): Year Ended December 31, 2018 Net income attributable to Archrock stockholders $ 21,063 Increase in Archrock stockholders’ additional paid-in capital for change in ownership of Partnership common units 56,845 Increase from net income attributable to Archrock stockholders and transfers from noncontrolling interest $ 77,908 Cash Dividends The following table summarizes our dividends declared and paid in each of the quarterly periods of 2020, 2019 and 2018: Declared Dividends Dividends Paid per Common Share (in thousands) 2020 Q1 $ 0.145 $ 22,171 Q2 0.145 22,176 Q3 0.145 22,308 Q4 0.145 22,177 2019 Q1 $ 0.132 $ 17,231 Q2 0.132 17,206 Q3 0.145 22,062 Q4 0.145 22,031 2018 Q1 $ 0.120 $ 8,532 Q2 0.120 15,486 Q3 0.132 17,114 Q4 0.132 17,156 On January 27, 2021, our Board of Directors declared a quarterly dividend of $0.145 per share of common stock, or approximately $22.2 million, that was paid on February 16, 2021 to stockholders of record at the close of business on February 8, 2021. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 17. Revenue from Contracts with Customers The following table presents our revenue from contracts with customers disaggregated by revenue source (in thousands): Year Ended December 31, 2020 2019 2018 Contract operations (1) : 0 - 1,000 horsepower per unit $ 224,702 $ 259,985 $ 241,810 1,001 - 1,500 horsepower per unit 305,185 316,082 276,775 Over 1,500 horsepower per unit 206,749 191,510 149,783 Other (2) 2,282 3,962 4,168 Total contract operations (3) 738,918 771,539 672,536 Aftermarket services (1) : Services (4) 79,012 122,076 142,476 OTC parts and components sales 57,040 71,870 89,429 Total aftermarket services (5) 136,052 193,946 231,905 Total revenue $ 874,970 $ 965,485 $ 904,441 (1) We operate in two segments: contract operations and aftermarket services. See Note 28 (“Segments”) for further details regarding our segments. (2) Primarily relates to fees associated with owned non-compression equipment. (3) Includes $5.6 million, $7.9 million and $6.6 million for the years ended December 31, 2020, 2019 and 2018, respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time. (4) Includes a reversal of $0.9 million of revenue during the year ended December 31, 2019 related to changes in estimates of performance obligations partially satisfied in prior periods. (5) All service revenue within aftermarket services is recognized over time. All OTC parts and components sales revenue is recognized at a point in time. Performance Obligations As of December 31, 2020, we had $350.0 million of remaining performance obligations related to our contract operations segment. Our remaining performance obligations will be recognized through 2025 as follows (in thousands): 2021 2022 2023 2024 2025 Total Remaining performance obligations $ 252,807 $ 82,366 $ 13,216 $ 1,436 $ 168 $ 349,993 We do not disclose the aggregate transaction price for the remaining performance obligations for aftermarket services as there are no contracts with customers with an original contract term that is greater than one year. Contract Assets and Liabilities As of December 31, 2020 and 2019, our receivables from contracts with customers, net of allowance for credit losses, were $95.6 million and $139.4 million, respectively. Freight billings to customers for the transport of compression assets, customer-specified modifications of compression assets and milestone billings on aftermarket services often result in a contract liability. As of December 31, 2020 and 2019, our contract liabilities were $4.6 million and $11.4 million, respectively, which were included in deferred revenue and other liabilities in our consolidated balance sheets. The decrease in the contract liability balance during the year ended December 31, 2020 was primarily due to $19.5 million recognized as revenue during the period, partially offset by revenue deferral of $12.7 million, each primarily related to freight billings and milestone billings on aftermarket services. |
Long-Lived and Other Asset Impa
Long-Lived and Other Asset Impairment | 12 Months Ended |
Dec. 31, 2020 | |
Long-Lived and Other Asset Impairment | |
Long-Lived and Other Asset Impairment | 18. Long-Lived and Other Asset Impairment We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. In the first quarter of 2020, we determined that the impairment of our contract operations reporting unit’s goodwill was an indicator of potential impairment of the carrying amount of our long-lived assets, including our compressor fleet and associated customer and contract-based intangible assets. Accordingly, we performed a quantitative impairment test of our long-lived assets, by which we determined that they were not also impaired. No similar impairment has been indicated subsequent to the first quarter. Compression Fleet We periodically review the future deployment of our idle compression assets for units that are not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on these reviews, we determine that certain idle compressors should be retired from the active fleet. The retirement of these units from the active fleet triggers a review of these assets for impairment and as a result of our review, we may record an asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit is estimated based on the expected net sale proceeds compared to other fleet units we recently sold, a review of other units recently offered for sale by third parties or the estimated component value of the equipment we plan to use. In connection with our review of our idle compression assets, we evaluate for impairment idle units that were culled from our fleet in prior years and are available for sale. Based on that review, we may reduce the expected proceeds from disposition and record additional impairment to reduce the book value of each unit to its estimated fair value. The following table presents the results of our compression fleet impairment review as recorded to our contract operations segment (dollars in thousands): Year Ended December 31, 2020 2019 2018 Idle compressors retired from the active fleet 730 975 310 Horsepower of idle compressors retired from the active fleet 261,000 170,000 115,000 Impairment recorded on idle compressors retired from the active fleet $ 77,590 $ 44,663 $ 28,127 Other Impairment During the year ended December 31, 2020, $1.7 million of capitalized implementation and unamortized prepaid costs related to the mobile workforce component of our multi-year process and technology transformation project was impaired. See Note 12 (“Hosting Arrangements”) for further details. |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring Charges | |
Restructuring Charges | 19. Restructuring Charges During the first quarter of 2020, we completed restructuring activities to further streamline our organization and more fully align our teams to improve our customer service and profitability. We incurred severance costs during the first quarter related to these activities. No additional costs will be incurred related to these restructuring activities. In response to the decreased activity level of our customers that resulted from the COVID-19 pandemic beginning in the second quarter of 2020, we have incurred severance costs to right-size our business. We are not currently able to estimate the total amount of restructuring costs to be incurred as a result of the COVID-19 pandemic, as the magnitude and duration of the pandemic and its impact on our operations remain difficult to predict. During the third quarter of 2020, a plan to dispose of certain non-core properties was approved by management. We are not currently able to estimate the total amount of restructuring costs to be incurred as a result of our property disposals, as the timing of the disposals and magnitude of the financial impact of their ultimate disposition remain difficult to predict. The severance and property disposal costs incurred under the above restructuring plans were recorded to restructuring charges in our consolidated statements of operations. The following table presents the changes to our accrued liability balance related to restructuring charges during the year ended December 31, 2020 (in thousands): Organizational Pandemic Property Restructuring Restructuring Restructuring Total Balance at December 31, 2019 $ — $ — $ — $ — Charges incurred (1) 1,695 5,257 1,498 8,450 Non-cash expense (2) (61) (101) (1,498) (1,660) Payments (1,634) (4,955) — (6,589) Balance at December 31, 2020 $ — $ 201 $ — $ 201 (1) Includes a loss on sale of $0.9 million and an impairment loss of $0.6 million related to the property restructuring during the year ended December 31, 2020. (2) Represents accelerated vesting of stock awards related to the organizational and pandemic restructuring activities and the loss on sale and impairment loss related to the property restructuring during the year ended December 31, 2020. The following table presents, by segment, restructuring charges incurred during the year ended December 31, 2020 (in thousands): Contract Aftermarket Operations Services Other (1) Total Organizational restructuring $ 458 $ 625 $ 612 $ 1,695 Pandemic restructuring 2,505 1,218 1,534 5,257 Property restructuring Loss on sale — — 915 915 Impairment loss — — 583 583 Total property restructuring — — 1,498 1,498 Total restructuring charges $ 2,963 $ 1,843 $ 3,644 $ 8,450 (1) Represents expense incurred within our corporate function and not directly attributable to our segments. The following table presents, by cost type, restructuring charges incurred during the year ended December 31, 2020 (in thousands): Year Ended December 31, 2020 Severance costs Organizational restructuring $ 1,695 Pandemic restructuring 5,257 Total severance costs 6,952 Property restructuring Loss on sale 915 Impairment loss 583 Total property restructuring 1,498 Total restructuring charges $ 8,450 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 20. Income Taxes Current and Deferred Tax Provision Our provision for (benefit from) income taxes consisted of the following (in thousands): Year Ended December 31, 2020 2019 2018 Current tax provision (benefit): U.S. federal $ (99) $ 75 $ — State 326 377 912 Total current 227 452 912 Deferred tax provision (benefit): U.S. federal (17,246) (35,597) 6,197 State (518) (4,000) (959) Total deferred (17,764) (39,597) 5,238 Provision for (benefit from) income taxes $ (17,537) $ (39,145) $ 6,150 The provision for (benefit from) income taxes for the years ended December 31, 2020, 2019 and 2018 resulted in effective tax rates on continuing operations of 20.4%, (67.0)% and 17.4%, respectively. The following table reconciles these effective tax rates to the U.S. statutory rate of 21%, the rate in effect during 2020, 2019 and 2018 (in thousands): Year Ended December 31, 2020 2019 2018 Income taxes at U.S. federal statutory rate $ (18,056) $ 12,276 $ 7,415 Net state income taxes (817) 1,634 1,570 Tax credits (1,256) (1,757) (244) Noncontrolling interest — — (1,793) Unrecognized tax benefits (1) 772 (1,958) (1,443) Valuation allowances and write off of tax attributes (2) 236 (50,219) (58) Executive compensation limitation 1,159 1,102 977 Stock 538 66 (455) Other (113) (289) 181 Provision for (benefit from) income taxes $ (17,537) $ (39,145) $ 6,150 (1) Reflects a decrease in our uncertain tax benefit, net of federal benefit, due to settlements of tax audits and expiration of statute of limitations in 2019 and 2018. (2) See “Tax Attributes and Valuation Allowances” below for further details. Deferred income tax balances are the direct effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the taxes are actually paid or recovered. The tax effects of temporary differences that gave rise to deferred tax assets and deferred tax liabilities were as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 158,916 $ 116,378 Accrued liabilities 3,133 3,486 Other 12,124 12,479 174,173 132,343 Valuation allowances (1) (1,027) (822) Total deferred tax assets 173,146 131,521 Deferred tax liabilities: Property, plant and equipment (6,066) (6,440) Basis difference in the Partnership (103,721) (81,645) Other (7,150) (8,083) Total deferred tax liabilities (116,937) (96,168) Net deferred tax asset (2) $ 56,209 $ 35,353 (1) See “Tax Attributes and Valuation Allowances” below for further details. (2) The 2020 and 2019 net deferred tax asset are reflected in our consolidated balance sheets as deferred tax assets of $56.9 million and $36.6 million, respectively, and deferred tax liabilities of $0.7 million and $1.3 million, respectively. Both the 2020 and 2019 balances are based on a U.S. federal tax rate of 21%. Tax Attributes and Valuation Allowances Pursuant to Sections 382 and 383 of the Code, utilization of loss and credit carryforwards are subject to annual limitations due to any ownership changes of 5% stockholders. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a rolling three-year period. In 2018, the common stock we issued in the Merger caused a new ownership change to occur for Archrock. The limitations from this ownership change may cause us to pay U.S. federal income taxes earlier; however, we do not currently expect that any loss carryforwards or credit carryforwards will expire as a result of any 382 or 383 limitations. Our ability to utilize loss carryforwards and credit carryforwards against future U.S. federal taxable income and future U.S. federal income tax may be limited in the future if we have another 50% or more ownership change in our 5% stockholders. We record valuation allowances when it is more likely than not that some portion or all of our deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character and in the appropriate taxing jurisdictions in the future. If we do not meet our expectations with respect to taxable income, we may not realize the full benefit from our deferred tax assets, which would require us to record a valuation allowance in our tax provision in future years. As of each reporting date, we consider new evidence to evaluate the realizability of our net deferred tax asset position by assessing the available positive and negative evidence. Changes to the valuation allowance are reflected in the statement of operations. In 2018, the change in ownership and tax step up from the consideration given in the Merger caused us to record a $156.0 million deferred tax asset, which resulted in an overall $52.2 million net deferred tax asset, of which $46.6 million and $5.6 million related to continuing operations and discontinued operations, respectively. As of December 31, 2018, we had incurred a three-year cumulative book loss, which outweighed the positive evidence of projected future taxable income. Based on the weight of the evidence, we concluded that a $50.8 million valuation allowance was required, of which $45.2 million and $5.6 million were recorded to continuing operations and discontinued operations, respectively. The tax impact from the Merger was accounted for as an equity transaction; therefore, the valuation allowance was recorded as a decrease to additional paid-in capital. As of December 31, 2019, we achieved a three-year cumulative book income, and together with other positive and negative evidence, we concluded that there is sufficient positive evidence of projected future taxable income to release the $50.8 million valuation allowance previously required for our overall net deferred tax asset position. This release was offset by a $0.6 million increase in the valuation allowance on our state NOL deferred tax asset. The overall impact of the change in the valuation allowance was recorded as a $50.2 million benefit from income taxes in our consolidated statements of operations and a $50.2 million increase in deferred tax assets in our consolidated balance sheets, of which $44.6 million and $5.6 million were recorded to continuing operations and discontinued operations, respectively. The amount of our deferred tax assets considered realizable could be adjusted if projections of future taxable income are reduced or objective negative evidence in the form of a three-year cumulative loss is present or both. Should we no longer have a level of sustained profitability, excluding nonrecurring charges, we will have to rely more on our future projections of taxable income to determine if we have an adequate source of taxable income for the realization of our deferred tax assets, namely NOL carryforwards and tax credit carryforwards. This may result in the need to record a valuation allowance against all or a portion of our deferred tax assets. At December 31, 2020, we had U.S. federal and state NOL carryforwards of $696.3 million and $257.6 million, respectively, included in our NOL deferred tax asset that are available to offset future taxable income. If not used, the federal and state NOL carryforwards will begin to expire in 2025 and 2021, respectively, though $457.3 million of the U.S. federal and $88.3 million of the state NOL carryforwards have no expiration date. In connection with the state NOL deferred tax asset, we recorded a valuation allowance of $1.0 million and $0.8 million as of December 31, 2020 and 2019, respectively. At December 31, 2020, we had U.S. federal and state tax credit carryforwards of $2.5 million and $0.2 million, respectively. If not used, the federal and state tax credit carryforwards will begin to expire in 2037 and 2040, respectively. Unrecognized Tax Benefits A reconciliation of the unrecognized tax benefit (including discontinued operations) activity is shown below (in thousands): Year Ended December 31, 2020 2019 2018 Beginning balance $ 18,453 $ 19,560 $ 21,400 Additions based on tax positions related to current year 2,397 2,227 1,893 Additions based on tax positions related to prior years — 2,047 450 Reductions based on settlement refunds from government authorities — (4,414) (3,461) Reductions based on tax positions related to prior years (73) (51) (20) Reductions based on lapse of statute of limitations (1,885) (916) (702) Ending balance $ 18,892 $ 18,453 $ 19,560 We had $18.9 million, $18.5 million and $19.6 million of unrecognized tax benefits at December 31, 2020, 2019 and 2018, respectively, of which $2.9 million, $3.2 million and $6.9 million, respectively, would affect the effective tax rate if recognized and $7.9 million, $8.3 million and $6.9 million, respectively, would be reflected in income from discontinued operations, net of tax if recognized. We recorded $2.1 million, $2.1 million and $2.2 million of potential interest expense and penalties related to unrecognized tax benefits associated with uncertain tax positions (including discontinued operations) in our consolidated balance sheets as of the years ended December 31, 2020, 2019 and 2018, respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as reductions in income tax expense. During each of the years ended December 31, 2020 and 2019, we recorded releases of potential interest expense and penalties of $0.1 million and in the year ended December 31, 2018, we recorded $0.7 million of potential interest expense and penalties in our consolidated statements of operations. Subject to the provisions of our tax matters agreement with Exterran Corporation, both parties agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin-off (including any ongoing or future amendments and audits for these returns) for the portion of the tax liability (including interest and penalties) that relates to their respective operations reported in the filing. As of December 31, 2020 and 2019, we recorded an indemnification asset (including penalties and interest) of $7.9 million and $8.5 million, respectively, related to unrecognized tax benefits in our consolidated balance sheets. We and our subsidiaries file consolidated and separate income tax returns in the U.S. federal jurisdiction and in numerous state jurisdictions. U.S. federal income tax returns are generally subject to examination for up to three years after filing the returns. Due to our NOL carryforwards, our U.S. federal income tax returns can be examined back to the inception of our NOL carryforwards; therefore, expanding our examination period beyond 20 years. In 2020, the IRS completed their examination of our 2014 and 2015 tax years. Due to this audit being related to tax periods that commenced prior to the Spin-off, Exterran Corporation was also involved in the audit. The tax adjustments recorded from this audit did not have a material impact on our consolidated financial position or results of operations. State income tax returns are generally subject to examination for a period of three to five years after filing the returns. However, the state impact of any U.S. federal audit adjustments and amendments remains subject to examination by various states for up to one year after formal notification to the states. We are currently involved in two state audits. During the years ended December 31, 2019 and 2018, we settled certain state audits, which resulted in refunds of $2.4 million and $1.7 million, respectively, and reductions in previously-accrued uncertain tax benefits of $4.4 million and $3.5 million, respectively. As of December 31, 2020, we did not have any state audits underway that we believe would have a material impact on our consolidated financial statements. As of December 31, 2020, we believe it is reasonably possible that $2.7 million of our unrecognized tax benefits, including penalties, interest and discontinued operations, will be reduced prior to December 31, 2021 due to the settlement of audits or the expiration of statutes of limitations or both. However, due to the uncertain and complex application of the tax regulations, it is possible that the ultimate resolution of these matters may result in liabilities that could materially differ from this estimate. CARES Act On March 27, 2020, President Trump signed into law the CARES Act, which includes, among other things, refundable payroll tax credits, deferment of employer-side social security payments, NOL carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act provisions did not have a material impact on our consolidated financial statements. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 21. Earnings per Share Basic net income (loss) per common share attributable to Archrock common stockholders is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share attributable to Archrock common stockholders is determined by dividing net income (loss) attributable to Archrock common stockholders, after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock-settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, only distributed earnings (dividends) are allocated to participating securities, as they do not have a contractual obligation to participate in our undistributed losses. Diluted net income (loss) per common share attributable to Archrock common stockholders is computed using the weighted average number of shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options, performance-based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would be anti-dilutive. The following table shows the calculation for net income (loss) attributable to Archrock common stockholders, which is used in the calculation of basic and diluted net income (loss) per common share attributable to Archrock common stockholders (in thousands): Year Ended December 31, 2020 2019 2018 Income (loss) from continuing operations attributable to Archrock stockholders $ (68,445) $ 97,603 $ 21,063 Loss from discontinued operations, net of tax — (273) — Net income (loss) attributable to Archrock stockholders (68,445) 97,330 21,063 Less: Earnings attributable to participating securities (1,338) (1,348) (815) Net income (loss) attributable to Archrock common stockholders $ (69,783) $ 95,982 $ 20,248 The following table shows the potential shares of common stock that were included in computing diluted net income (loss) per common share attributable to Archrock common stockholders (in thousands): Year Ended December 31, 2020 2019 2018 Weighted average common shares outstanding including participating securities 152,827 139,317 110,843 Less: Weighted average participating securities outstanding (1,999) (1,825) (1,538) Weighted average common shares outstanding used in basic net income (loss) per common share 150,828 137,492 109,305 Net dilutive potential common shares issuable: On exercise of options and vesting of performance-based restricted stock units — 34 111 On settlement of ESPP shares — 2 5 Weighted average common shares outstanding used in diluted net income (loss) per common share 150,828 137,528 109,421 The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share attributable to Archrock common stockholders as their inclusion would have been anti-dilutive (in thousands): Year Ended December 31, 2020 2019 2018 On exercise of options where exercise price is greater than average market value for the period 96 154 195 On exercise of options and vesting of performance-based restricted stock units 54 — — On settlement of ESPP shares 17 — — Net dilutive potential common shares issuable 167 154 195 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 22. Derivatives We are exposed to market risks associated with changes in the variable interest rate of our Credit Facility. We use derivative instruments to manage our exposure to fluctuations in this variable interest rate and thereby minimize the risks and costs associated with financial activities. We do not use derivative instruments for trading or other speculative purposes. As of December 31, 2020, we had $300.0 million notional value of interest rate swaps outstanding, which expire in March 2022 and were entered into to offset changes in expected cash flows due to fluctuations in the associated variable interest rates. We have designated these interest rate swaps as cash flow hedging instruments. The counterparties to our derivative agreements are major financial institutions. We monitor the credit quality of these financial institutions and do not expect nonperformance by any counterparty, although such nonperformance could have a material adverse effect on us. We have no collateral posted for our derivative instruments. We expect the hedging relationship to be highly effective as the interest rate swap terms substantially coincide with the hedged item and are expected to offset changes in expected cash flows due to fluctuations in the variable rate. We estimate that $4.8 million of the deferred pre-tax loss attributable to interest rate swaps included in accumulated other comprehensive loss at December 31, 2020 will be reclassified into earnings as interest expense at then-current values during the next 12 months as the underlying hedged transactions occur. As of December 31, 2020, the weighted average effective fixed interest rate on our interest rate swaps was 1.8%. The following table presents the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated balance sheets (in thousands): December 31, 2020 2019 Other current assets $ — $ 12 Total derivative assets $ — $ 12 Accrued liabilities $ 4,810 $ 593 Other liabilities 1,527 1,175 Total derivative liabilities $ 6,337 $ 1,768 The following table presents the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated statements of operations (in thousands): Year Ended December 31, 2020 2019 2018 Pre-tax gain (loss) recognized in other comprehensive income (loss) $ (8,459) $ (6,785) $ 3,512 Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense (3,878) 2,278 617 Total amount of interest expense in which the effects of cash flow hedges are recorded 105,716 104,681 93,328 See Note 2 (“Basis of Presentation and Significant Accounting Policies”), Note 15 (“Accumulated Other Comprehensive Income (Loss)”) and Note 23 (“Fair Value Measurements”) for further details on our derivative instruments. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 23. Fair Value Measurements The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value into the following three categories: • Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement. • Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers. • Level 3 — Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information. Assets and Liabilities Measured at Fair Value on a Recurring Basis On a quarterly basis, our interest rate swap derivative instruments are valued based on the income approach (discounted cash flow) using market observable inputs, including LIBOR forward curves. These fair value measurements are classified as Level 2. The following table presents our derivative asset and liability measured at fair value on a recurring basis, with pricing levels as of the date of valuation (in thousands): December 31, 2020 2019 Derivative asset $ — $ 12 Derivative liability 6,337 1,768 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Goodwill In the first quarter of 2020, we determined that the significant deterioration in global macroeconomic conditions caused by the COVID-19 pandemic was an indicator of potential impairment of our goodwill, and we performed a quantitative impairment test as of March 31, 2020 that resulted in a $99.8 million impairment of our goodwill. Significant estimates used in our impairment analysis included cash flow forecasts, our estimate of the market’s weighted average cost of capital and market multiples, which are Level 3 inputs. See Note 9 (“Goodwill”) for further details of the valuation methodology used in connection with the goodwill impairment. Properties During the third quarter of 2020, a plan to dispose of certain non-core properties was approved by management. The properties not sold at auction were impaired and written down to fair value. The commercial real estate market where these properties are located is not an active market. Our estimate of fair value included inputs from offers received as well as market transactions for similar properties, which are Level 3 inputs. The fair value of our impaired properties was as follows (in thousands): December 31, 2020 Impaired properties $ 430 The significant unobservable inputs used to develop the Level 3 fair value measurements for the properties were the estimated sale values in an inactive market. In reviewing sales trends for the past three years, the probable pricing information based on market comparisons was as follows (in thousands): Range Weighted Average Estimated sale proceeds $100 - $600 $427 See Note 19 (“Restructuring Charges”) for further details of our approved plan of disposal. Compressors During the years ended December 31, 2020 and 2019, we recorded nonrecurring fair value measurements related to our idle and previously-culled compressors. Our estimate of the compressors’ fair value was primarily based on the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use. We discounted the expected proceeds, net of selling and other carrying costs, using a weighted average disposal period of four years. These fair value measurements are classified as Level 3. The fair value of our compressors impaired during the years ended December 31, 2020 and 2019 was as follows: December 31, 2020 2019 Impaired compressors $ 19,046 $ 5,859 The significant unobservable inputs used to develop the above fair value measurements were weighted by the relative fair value of the compressors being measured. Additional quantitative information related to our significant unobservable inputs as of December 31, 2020 follows: Range Weighted Average (1) Estimated net sale proceeds $0 - $289 per horsepower $20 per horsepower (1) Calculated based on an estimated discount for market liquidity of 81% . See Note 18 (“Long-Lived and Other Asset Impairment”) for further details. Other Financial Instruments The carrying amounts of our cash, receivables and payables approximate fair value due to the short-term nature of those instruments. The carrying amount of borrowings outstanding under our Credit Facility approximates fair value due to its variable interest rate. The fair value of these outstanding borrowings is a Level 3 measurement. The fair value of our fixed rate debt is estimated using yields observable in active markets, which are Level 2 inputs, and was as follows (in thousands): December 31, 2020 2019 Carrying amount of fixed rate debt (1) $ 1,295,867 $ 1,329,549 Fair value of fixed rate debt 1,371,000 1,400,000 (1) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 24. Stock-Based Compensation We recognize stock-based compensation expense related to stock options, restricted stock units, performance units, phantom units and our ESPP. We account for forfeitures as they occur. Stock-based compensation expense consisted of the following (in thousands): Year Ended December 31, 2020 2019 2018 Equity awards $ 10,551 $ 8,105 $ 7,388 Liability awards 1,521 2,336 1,096 Total stock-based compensation expense $ 12,072 $ 10,441 $ 8,484 Stock Incentive Plans The 2020 Plan was adopted in April 2020 and provides for the granting of stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, other stock-based awards and dividend equivalent rights to employees, directors and consultants of Archrock. The 2020 Plan is administered by the compensation committee of our Board of Directors. Under the 2020 Plan, the maximum number of shares of common stock available for issuance is 8,500,000. Each stock-settled award granted under the 2020 Plan reduces the number of shares available for issuance by one share. Cash-settled awards are not counted against the aggregate share limit. Shares subject to awards granted under the 2020 Plan that are subsequently canceled, terminated, settled in cash or forfeited, excluding shares withheld to satisfy tax withholding obligations or to pay the exercise price of an option, are available for future grant under the 2020 Plan. No additional grants may be made under the 2013 Plan following the adoption of the 2020 Plan. Previous grants made under the 2013 Plan continue to be governed by that plan and the applicable award agreements. The 2020 Plan and 2013 Plan allow us to withhold shares upon vesting of restricted stock at the then-current market price to cover taxes required to be withheld on the vesting date. During the years ended December 31, 2020, 2019 and 2018, we withheld 236,752 shares valued at $1.8 million, 212,080 shares valued at $2.0 million and 167,382 shares valued at $1.8 million, respectively, to cover tax withholding. The compensation committee of our Board of Directors generally establishes its schedule for making annual long-term incentive awards, consisting of a combination of restricted shares and performance units vesting over multiple years, several months in advance and does not make such awards based on knowledge of material nonpublic information. Although the compensation committee of our Board of Directors has historically granted awards on a regular, predictable cycle, such awards may be granted at other times during the year, as determined in the sole discretion of the compensation committee. Stock Options Stock options are granted at fair market value at the grant date, are exercisable according to the vesting schedule established by the compensation committee of our Board of Directors in its sole discretion and expire no later than seven years after the grant date. Stock options generally vest one per each three applicable vesting date Weighted Weighted Aggregate Stock Average Average Intrinsic Options Exercise Price Remaining Life Value (in thousands) per Share (in years) (in thousands) Options outstanding and exercisable, December 31, 2019 154 $ 19.40 Canceled (90) 15.32 Options outstanding and exercisable, December 31, 2020 64 25.18 0.2 $ — Intrinsic value is the difference between the market value of our stock and the exercise price of each stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price. The total intrinsic value of stock options exercised during the year ended December 31, 2018 was $0.8 million. There were no stock options exercised during the years ended December 31, 2020 and 2019. Stock options outstanding at December 31, 2020 expire in March 2021. Restricted Stock, Restricted Stock Units, Performance-Based Restricted Stock Units, Cash-Settled Restricted Stock Units and Cash-Settled Performance Units For grants of restricted stock and restricted stock units, we recognize compensation expense over the vesting period equal to the fair value of our common stock at the grant date. Our restricted stock and restricted stock units include rights to receive dividends or dividend equivalents. We periodically remeasure the fair value of cash-settled restricted stock units and cash-settled performance units and record a cumulative adjustment of the expense previously recognized. Our obligation related to the cash-settled restricted stock units and cash-settled performance units is reflected as a liability in our consolidated balance sheets. Restricted stock, restricted stock units, cash-settled restricted stock units and cash-settled performance units generally vest one year dates applicable award agreement We also grant performance-based restricted stock units, which in addition to service conditions, have a market-based condition, which determines the number of restricted stock units and dividend equivalents earned. The market condition is based on our total shareholder return ranked against that of a predetermined peer group over a three-year performance period. The awards vest in their entirety on a date specified in the award agreement in the year following the conclusion of the performance period. The fair value of the performance-based restricted stock units, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model. Expected volatilities for us and each peer company utilized in the model are estimated using a historical period consistent with the awards’ remaining performance period as of the grant date. The risk-free interest rate is based on the yield on U.S. Treasury Separate Trading of Registered Interest and Principal Securities for a term consistent with the remaining performance period. The dividend yield used is 0.0% to approximate accumulation of earnings. The following table presents the inputs used and the grant date fair value calculated in the Monte Carlo simulation model for the performance-based restricted stock units awarded during the years ended December 31, 2020, 2019 and 2018. Year Ended December 31, 2020 2019 2018 Remaining performance period as of grant date (in years) 2.9 2.9 2.8 Risk-free interest rate used 1.4 % 2.6 % 2.4 % Grant-date fair value $ 11.33 $ 12.91 $ 13.46 The following table presents restricted stock, restricted stock unit, performance-based restricted stock unit, cash-settled restricted stock unit and cash-settled performance unit activity during the year ended December 31, 2020: Weighted Average Grant Date Fair Value Shares Per Share Non-vested awards, December 31, 2019 2,022 $ 10.25 Granted (1) 1,467 9.37 Vested (2) (933) 10.39 Canceled (110) 9.78 Non-vested awards, December 31, 2020 (3) 2,446 9.69 (1) The weighted average grant date fair value of shares granted during the years ended December 31, 2020, 2019 and 2018 was $9.37 , $10.01 and $9.66 , respectively. (2) The total fair value of all awards vested during the years ended December 31, 2020, 2019 and 2018 was $7.1 million, $9.0 million and $8.2 million, respectively. (3) Non-vested awards as of December 31, 2020 were comprised of 454,000 cash-settled restricted stock units and cash-settled performance units and 1,992,000 restricted stock, stock-settled restricted stock units and stock-settled performance-based restricted stock units. As of December 31, 2020, we expect $13.7 million of unrecognized compensation cost related to unvested restricted stock, stock-settled restricted stock units, performance units, cash-settled restricted stock units and cash-settled performance units to be recognized over the weighted-average period of 1.7 Employee Stock Purchase Plan Adopted in 2017, our ESPP provides employees with an opportunity to participate in our long-term performance and success through the purchase of shares of common stock at a price that may be less than fair market value. Each quarter, eligible employees may elect to withhold a portion of their salary up to the lesser of $25,000 per year or 10% of their eligible pay to purchase shares of our common stock at a price equal to 85% to 100% of the fair market value of the stock as defined by the plan. The ESPP will terminate on the date that all shares of common stock authorized for sale under the ESPP have been purchased, unless it is extended. The maximum number of shares of common stock available for purchase under the ESPP is 1,000,000. As of December 31, 2020, 611,707 shares remained available for purchase under the ESPP. Our ESPP is compensatory and, as a result, we record an expense in our consolidated statements of operations related to the ESPP. The purchase discount under the ESPP is 5% of the fair market value of our common stock on the first trading day of the quarter or the last trading day of the quarter, whichever is lower. Directors’ Stock and Deferral Plan Adopted in 2007, our DSDP provides non-employee members of the Board of Directors with an opportunity to elect to receive our common stock as payment for a portion or all of their retainer. The number of shares paid each quarter is determined by dividing the dollar amount of fees elected to be paid in common stock by the closing sales price per share of the common stock on the last day of the quarter. In addition, directors who elect to receive a portion or all of their fees in the form of common stock may also elect to defer, until a later date, the receipt of a portion or all of their fees to be received in common stock. We have reserved 100,000 shares under the DSDP and, as of December 31, 2020, 37,771 shares remained available to be issued under the plan. |
Retirement Benefit Plan
Retirement Benefit Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Benefit Plan | 25. Retirement Benefit Plan Our 401(k) retirement plan provides for optional employee contributions up to the applicable Internal Revenue Service annual limit and discretionary employer matching contributions. We make discretionary matching contributions to each participant’s account at a rate of 100% of each participant’s contributions up to 5% of eligible compensation. We recorded matching contributions of $5.6 million, $6.8 million and $6.5 million during the years ended December 31, 2020, 2019 and 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 26. Commitments and Contingencies Performance Bonds In the normal course of business we have issued performance bonds to various state authorities that ensure payment of certain obligations. We have also issued a bond to protect our 401(k) retirement plan against losses caused by acts of fraud or dishonesty. The bonds have expiration dates in 2021 through the fourth quarter of 2022 and maximum potential future payments of $2.2 million. As of December 31, 2020, we were in compliance with all obligations to which the performance bonds pertain. Tax Matters We are subject to a number of state and local taxes that are not income-based. As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due. We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability. As of December 31, 2020 and 2019, we accrued $5.6 million and $2.5 million, respectively, for the outcomes of non-income-based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We believe the likelihood is remote that the impact of potential unasserted claims from non-income-based tax audits could be material to our consolidated financial position, but it is possible that the resolution of future audits could be material to our consolidated results of operations or cash flows. Subject to the provisions of the tax matters agreement between Exterran Corporation and us, both parties agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin-off (including any ongoing or future amendments and audits for these returns) for the portion of the tax liability (including interest and penalties) that relates to their respective operations reported in the filing. The tax contingencies mentioned above relate to tax matters for which we are responsible in managing the audit. As of December 31, 2020 and 2019, we had an indemnification liability (including penalties and interest), in addition to the tax contingency above, of $1.6 million and $2.8 million, respectively, for our share of non-income based tax contingencies related to audits being managed by Exterran Corporation. During the third quarter of 2020, we settled a certain sales and use tax audit for which we recorded a $12.4 million net benefit in our consolidated statements of operations. This net benefit was primarily reflected as decreases of $4.4 million and $7.9 million to cost of sales (excluding depreciation and amortization) and SG&A, respectively. We received a cash refund of $17.3 million in the fourth quarter of 2020 and have a $2.0 million accrued liability recorded as of December 31, 2020 related to this settlement. Insurance Matters Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability and commercial automobile liability and other coverage we believe is appropriate. We believe that our insurance coverage is customary for the industry and adequate for our business; however, losses and liabilities not covered by insurance would increase our costs. Additionally, we are substantially self-insured for workers’ compensation and employee group health claims in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. Losses up to the deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. We are also self-insured for property damage to our offshore assets. Litigation and Claims In the ordinary course of business, we are involved in various pending or threatened legal actions. While we are unable to predict the ultimate outcome of these actions, we believe that any ultimate liability arising from any of these actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to pay dividends. However, because of the inherent uncertainty of litigation and arbitration proceedings, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to pay dividends. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 27. Related Party Transactions In connection with the closing of the Elite Acquisition, we issued 21.7 million shares of our common stock to JDH Capital, an affiliate of our customer Hilcorp. As long as JDH Capital, together with affiliates of Hilcorp, owns at least 7.5% of our outstanding common stock, it will have the right to designate one director to our Board of Directors. Jeffery D. Hildebrand, founder and executive chairman of Hilcorp, was appointed Director in August 2019 and served until his resignation on July 29, 2020, at which time Jason C. Rebrook, President of Hilcorp, was appointed Director to fill the resulting vacancy. Mr. Hildebrand did not receive and Mr. Rebrook receives no compensation for their role as Director. As of December 31, 2020, JDH Capital owned 14.2% of our outstanding common stock. Revenue from Hilcorp and affiliates was $40.3 million, $31.4 million and $12.0 million during the years ended December 31, 2020, 2019 and 2018, respectively. Accounts receivable, net due from Hilcorp and affiliates was $3.9 million and $5.1 million as of December 31, 2020 and 2019, respectively. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segments | 28. Segments We manage our business segments primarily based on the type of product or service provided. We have two segments which we operate within the U.S.: contract operations and aftermarket services. The contract operations segment primarily provides natural gas compression services to meet specific customer requirements. The aftermarket services segment provides a full range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets. We evaluate the performance of our segments based on gross margin for each segment. Revenue includes only sales to external customers. No single customer accounted for 10% or more of our revenue during the years ended December 31, 2020 and 2019. During the year ended December 31, 2018, Williams Partners accounted for 11% of our contract operations and aftermarket services revenue. The following table presents revenue, gross margin and capital expenditures by segment during the years ended December 31, 2020, 2019 and 2018 (in thousands): Contract Aftermarket Segments Operations Services Total Other (1) Total 2020 Revenue $ 738,918 $ 136,052 $ 874,970 $ — $ 874,970 Gross margin 477,831 19,946 497,777 — 497,777 Capital expenditures 133,492 5,308 138,800 1,502 140,302 2019 Revenue $ 771,539 $ 193,946 $ 965,485 $ — $ 965,485 Gross margin 474,279 34,968 509,247 — 509,247 Capital expenditures 374,650 8,714 383,364 1,834 385,198 2018 Revenue $ 672,536 $ 231,905 $ 904,441 $ — $ 904,441 Gross margin 399,523 40,551 440,074 — 440,074 Capital expenditures 307,048 6,111 313,159 5,943 319,102 (1) Corporate-related items. The following table presents assets by segment reconciled to total assets per the consolidated balance sheets (in thousands): December 31, 2020 2019 Contract operations $ 2,593,864 $ 2,915,724 Aftermarket services 45,985 67,832 Segment assets 2,639,849 2,983,556 Other assets (1) 128,837 113,518 Assets associated with discontinued operations 11,036 12,901 Total assets $ 2,779,722 $ 3,109,975 (1) Corporate-related items. The following table reconciles total gross margin to income (loss) before income taxes (in thousands): Year Ended December 31, 2020 2019 2018 Total gross margin $ 497,777 $ 509,247 $ 440,074 Less: Selling, general and administrative 105,100 117,727 101,563 Depreciation and amortization 193,138 188,084 174,946 Long-lived and other asset impairment 79,556 44,663 28,127 Goodwill impairment 99,830 — — Restatement and other charges — 445 19 Restructuring charges 8,450 — — Interest expense 105,716 104,681 93,328 Debt extinguishment loss 3,971 3,653 2,450 Transaction-related costs — 8,213 10,162 Gain on sale of assets, net (10,643) (16,016) (5,674) Other income, net (1,359) (661) (157) Income (loss) before income taxes $ (85,982) $ 58,458 $ 35,310 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | 29. Subsequent Events February 2021 Disposition On February 10, 2021, we completed the sale of certain contract operations customer service agreements and approximately 300 compressors, comprising approximately 40,000 horsepower, used to provide compression services under those agreements as well as other assets used to support the operations. We allocated customer-related and contract-based intangible assets based on a ratio of the horsepower sold relative to the total horsepower of the asset group. A gain on the sale of approximately $6.0 million will be recognized in the first quarter of 2021. Amendment No. 3 to Credit Facility On February 22, 2021, we amended our credit facility to, among other things: ● reduce the aggregate revolving commitment from $1.25 billion to $750.0 million, and ● increase the maximum Total Debt to EBITDA ratios and reduce the maximum Senior Secured Debt to EBITDA ratio, as defined in the credit facility agreement, to the following: Senior Secured Debt to EBITDA 3.00 to 1.0 Total Debt to EBITDA Through fiscal year 2022 5.75 to 1.0 January 1, 2023 through September 30, 2023 5.50 to 1.0 Thereafter (1) 5.25 to 1.0 (1) Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter. We incurred approximately $1.8 million in transaction costs related to Amendment No. 3 during the first quarter of 2021. |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | ARCHROCK, INC. SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Charged to Balance at Beginning Costs and End of of Period Expenses Deductions (1) Period Allowance for credit losses applied to accounts receivable in the balance sheet December 31, 2020 $ 2,210 $ 3,525 $ 2,365 $ 3,370 December 31, 2019 1,452 2,567 1,809 2,210 December 31, 2018 1,794 1,677 2,019 1,452 (1) Primarily represents uncollectible accounts written off and, for 2020, the impact of the adoption of ASU 2016-13 on January 1, 2020. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Consolidation | Our Financial Statements include Archrock and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Basis of Presentation | Our Financial Statements are prepared in accordance with GAAP and the rules and regulations of the SEC. |
Use of Estimates | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues, expenses and disclosures of contingent assets and liabilities. Because of the inherent uncertainties in this process, actual future results could differ from those expected as of the reporting date. Management believes that the estimates and assumptions used are reasonable. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Revenue Recognition | Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we are entitled to receive in exchange for those goods or services. Sales and usage-based taxes that are collected from the customer are excluded from revenue. Contract Operations Natural gas compression services. Variable consideration exists if customers are billed at a lesser standby rate when a unit is not running. We recognize revenue for such variable consideration monthly, as the invoice corresponds directly to the value transferred to the customer based on our performance completed to date. The rate for standby service is lower to reflect the decrease in costs and effort required to provide standby service when a unit is not running. Billable Maintenance Service Aftermarket Services OTC Parts and Components Sales Maintenance, Overhaul and Reconfiguration Services For service provided based on a fixed monthly fee, the performance obligation is a series in which the unit of service is one month. The customer receives substantially the same benefit each month from the service, regardless of the type of service activity performed, which may vary. As the progress towards satisfaction of the performance obligation is measured based on the passage of time, revenue is recognized monthly based on the fixed fee provided for in the contract. For service provided based on a quoted fixed fee, progress towards satisfaction of the performance obligation is measured using an input method based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue each reporting period is determined by multiplying the transaction price by the ratio of actual costs incurred to date to total estimated costs expected for the service. Significant judgment is involved in the estimation of the progress to completion. Any adjustments to the measure of the progress to completion is accounted for on a prospective basis. Changes to the scope of service is recognized as an adjustment to the transaction price in the period in which the change occurs. Service provided based on time and materials are generally short-term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. We apply an estimated gross margin percentage, which is fixed based on historical time and materials-based service, to actual costs incurred. We evaluate the estimated gross margin percentage at the end of each reporting period and adjust the transaction price as appropriate. Contract Assets and Liabilities We recognize a contract asset when we have the right to consideration in exchange for goods or services transferred to a customer when the right is conditioned on something other than the passage of time. We recognize a contract liability when we have an obligation to transfer goods or services to a customer for which we have already received consideration. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and trade accounts receivable. Our temporary cash investments have a zero loss expectation because we maintain minimal balances in our cash investment accounts and have no history of loss. Trade accounts receivable are due from companies of varying size engaged principally in oil and natural gas activities throughout the U.S. We review the financial condition of customers prior to extending credit and generally do not obtain collateral for trade receivables. Payment terms are on a short-term basis and in accordance with industry practice. We consider this credit risk to be limited due to these companies’ financial resources, the nature of the products and services we provide and the terms of our customer agreements. Due to the short-term nature of our trade receivables, we consider the amortized cost to be the same as the carrying amount of the receivable, excluding the allowance for credit losses. We recognize an allowance for credit losses when a receivable is recorded, even when the risk of loss is remote. We utilize an aging schedule to determine our allowance for credit losses, and measure expected credit losses on a collective (pool) basis when similar risk characteristics exist. We rely primarily on ratings assigned by external rating agencies and credit monitoring services to assess credit risk and aggregate customers first by low, medium or high risk asset pools, and then by delinquency status. We also consider the internal risk associated with geographic location and the services we provide to the customer when determining asset pools. If a customer does not share similar risk characteristics with other customers, we evaluate the customer’s outstanding trade receivables for expected credit losses on an individual basis. Trade receivables evaluated individually are not included in our collective assessment. Each reporting period, we reassess our customers’ risk profiles and determine the appropriate asset pool classification, or perform individual assessments of expected credit losses, based on the customers’ risk characteristics at the reporting date. The contractual life of our trade receivables is primarily 30 days based on the payment terms specified in the contract. Contract operations services are generally billed monthly at the beginning of the month in which service is being provided. Aftermarket services billings typically occur when parts are delivered or service is completed. Loss rates are separately determined for each asset pool based on the length of time a trade receivable has been outstanding. We analyze two years of internal historical loss data, including the effects of prepayments, write-offs and subsequent recoveries, to determine our historical loss experience. Our historical loss information is a relevant data point for estimating credit losses, as the data closely aligns with trade receivables due from our customers. Ratings assigned by external rating agencies and credit monitoring services consider past performance and forecasts of future economic conditions in assessing credit risk. We routinely update our historical loss data to reflect our customers’ current risk profile, to ensure the historical data and loss rates are relevant to the pool of assets for which we are estimating expected credit losses. At December 31, 2020, Chevron U.S.A. Inc. and Williams Partners accounted for 14% and 10% of our trade accounts receivable balance, respectively. No customer accounted for more than 10% of our trade accounts receivable balance at December 31, 2019. During the years ended December 31, 2020, 2019 and 2018, we recorded bad debt expense of $3.5 million, $2.6 million and $1.7 million, respectively. The following table summarizes the changes in our allowance for credit losses balance during the year ended December 31, 2020 (in thousands): Balance at December 31, 2019 $ 2,210 Impact of adoption of ASU 2016-13 on January 1, 2020 (216) Provision for credit losses 3,525 Write-offs charged against allowance (2,149) Balance at December 31, 2020 $ 3,370 |
Inventory | Inventory Inventory consists of parts used for maintenance of natural gas compression equipment. Inventory is stated at the lower of cost and net realizable value using the average cost method. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 Other 3 to 10 years Major improvements that extend the useful life of an asset are capitalized and depreciated over the estimated useful life of the major improvement, up to seven years. Repairs and maintenance are expensed as incurred. |
Long-Lived Assets | Long-Lived Assets We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. An impairment loss exists when estimated undiscounted cash flows expected from the use of the asset and its eventual disposition are less than its carrying amount. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its fair value. Identifiable intangibles are amortized over the estimated useful life of the asset. |
Leases | Leases As a result of our adoption of ASC 842 Leases on January 1, 2019, we recorded an operating lease ROU asset and an operating lease liability on our consolidated balance sheet. Under previous guidance, operating leases were not recorded to the balance sheet. We determine if an arrangement is a lease at inception and determine lease classification and recognize ROU assets and liabilities on the lease commencement date based on the present value of lease payments over the lease term. As the discount rate implicit in the lease is rarely readily determinable, we estimate our incremental borrowing rate using information available at commencement date in determining the present value of the lease payments. The lease term includes options to extend when we are reasonably certain to exercise the option. Short-term leases, those with an initial term of 12 months or less, are not recorded on the balance sheet. Variable costs such as our proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Operating lease expense for lease payments is recognized on a straight-line basis over the term of the lease. Our facility leases, of which we are the lessee, contain lease and nonlease components, which we have elected to account for as a single lease component, as the nonlease components are not significant to the total consideration of the contract and separating the nonlease component would have no effect on lease classification. As it relates to our contract operations service agreements in which we are a lessor, the services nonlease component is predominant over the compression package lease component and therefore recognition of these agreements will continue to follow the ASC 606 Revenue guidance. Under previous guidance, no separation of lease and nonlease components is required, for either lessee or lessor. |
Goodwill | Goodwill The goodwill acquired in connection with the Elite Acquisition represented the excess of consideration transferred over the fair value of the assets and liabilities acquired. We review the carrying amount of our goodwill in the fourth quarter of every year, or whenever indicators of potential impairment exist, to determine if the carrying amount of a reporting unit exceeds its fair value, including the applicable goodwill. We perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is impaired. If the fair value is more likely than not impaired, we perform a quantitative impairment test to identify impairment and measure the amount of impairment loss to be recognized, if any. Our qualitative assessment includes consideration of various events and circumstances and their potential impact to a reporting unit’s fair value, including macroeconomic and industry conditions such as a deterioration in our operating environment and limitations on access to capital and other developments in the equity and credit markets, cost factors that could have a negative effect on earnings and cash flows, relevant entity-specific and reporting unit-specific events and overall financial performance such as declining earnings or cash flows or a sustained decrease in share price. The quantitative impairment test (i) allocates goodwill and our other assets and liabilities to our reporting units, contract operations and aftermarket services, (ii) calculates the fair value of the reporting units and (iii) determines the impairment loss, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value (limited to the total amount of goodwill allocated to that reporting unit). All of the goodwill recognized in the Elite Acquisition was allocated to our contract operations reporting unit. The fair value of the contract operations reporting unit is calculated using the expected present value of future cash flows method. Significant estimates are made to determine future cash flows including future revenues, costs and capital requirements and the appropriate risk-adjusted discount rate by which to discount the estimated future cash flows. In the first quarter of 2020, the global response to the COVID-19 pandemic significantly impacted our market capitalization and estimates of future revenues and cash flows, which triggered the need to perform a quantitative test of the fair value of our contract operations reporting unit as of March 31, 2020. The quantitative test determined that the carrying amount of our contract operations reporting unit exceeded its fair value and we recorded a full impairment loss on goodwill in the first quarter as a result. |
Internal-Use Software | Internal-Use Software Certain of our contracts have been deemed to be hosting arrangements that are service contracts, including those related to the cloud migration of our ERP system and cloud services for our new mobile workforce, telematics and inventory management tools. Certain costs incurred for the implementation of a hosting arrangement that is a service contract are capitalized and amortized on a straight-line basis over the term of the respective contract. Amortization begins for each component of the hosting arrangement when the component becomes ready for its intended use. Capitalized implementation costs are presented in other assets, the same line item in our consolidated balance sheets that a prepayment of the fees for the associated hosting arrangement would be presented. Amortization expense of the capitalized implementation costs is presented in SG&A, the same line item in our consolidated statements of operations as the expense for fees for the associated hosting arrangement. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period of the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. If a valuation allowance was previously recorded and we subsequently determined we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax assets’ valuation allowance, which would reduce the provision for income taxes. We record uncertain tax positions in accordance with the accounting standard on income taxes under a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. |
Hedging and Use of Derivative Instruments | Hedging and Use of Derivative Instruments We use derivative instruments to manage our exposure to fluctuations in the variable interest rate of our Credit Facility and thereby minimize the risks and costs associated with financial activities. We do not use derivative instruments for trading or other speculative purposes. We record interest rate swaps on the balance sheet as either derivative assets or derivative liabilities measured at their fair value. The fair value of our derivatives is based on the income approach (discounted cash flow) using market observable inputs, including LIBOR forward curves. Changes in the fair value of the derivatives designated as cash flow hedges are recognized as a component of other comprehensive income (loss) until the hedged transaction affects earnings. At that time, amounts are reclassified into earnings to interest expense, the same statement of operations line item to which the earnings effect of the hedged item is recorded. Cash flows from derivatives designated as hedges are classified in our consolidated statements of cash flows under the same category as the cash flows from the underlying assets, liabilities or anticipated transactions unless the derivative contract contains a significant financing element, in which case, the cash settlements for these derivatives are classified as cash flows from financing activities. To qualify for hedge accounting treatment, we must formally document, designate and assess the effectiveness of the transactions. We perform quarterly qualitative prospective and retrospective hedge effectiveness assessments unless facts and circumstances related to the hedging relationships change such that we can no longer assert qualitatively that the cash flow hedge relationships were and continue to be highly effective. If the necessary correlation ceases to exist or if the anticipated transaction is no longer probable, we would discontinue hedge accounting and apply mark-to-market accounting. Amounts paid or received from interest rate swap agreements are recorded in interest expense and matched with the cash flows and interest expense of the debt being hedged, resulting in an adjustment to the effective interest rate. |
Accounting Standards Updates Implemented and Accounting Standards Updates Not Yet Implemented | Accounting Standards Updates Implemented Credit Losses In June 2016, the FASB issued ASU 2016-13, which changes the impairment model for financial assets measured at amortized cost and certain other instruments, and requires entities to use a new current expected credit loss model that results in recognition of expected losses over the contractual life of an asset. We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective approach. The adoption resulted in a $0.2 million decrease in our allowance for credit losses and a corresponding pre-tax cumulative effect adjustment to retained earnings in our consolidated balance sheet at January 1, 2020. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Fair Value Measurements On January 1, 2020, we adopted ASU 2018-13, which amends the required fair value measurements disclosures related to valuation techniques and inputs used, uncertainty in measurement and changes in measurements applied. These amendments resulted in new, prospective disclosures of the range and weighted average of the significant unobservable inputs used to develop our Level 3 fair value measurements related to our idle and previously-culled compressors. The adoption of ASU 2018-13 had no impact on our consolidated financial statements. Income Taxes On January 1, 2020, we adopted ASU 2019-12, which simplifies the accounting for income taxes by, among other things, removing certain exceptions related to the incremental approach for intraperiod tax allocation, the year-to-date loss methodology for calculating income taxes in an interim period and the recognition for deferred tax liabilities on outside basis differences. ASU 2019-12 also clarifies other aspects of the accounting for income taxes in order to improve consistency of application. The adoption of ASU 2019-12 had no impact on our consolidated financial statements. Accounting Standards Updates Not Yet Implemented Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. Entities may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. Modifications to our interest rate swap and Credit Facility agreements during the effective period of this amendment will be assessed and if the modifications meet the criteria for the optional expedients and exceptions, we intend to adopt ASU 2020-04 and apply the amendments as applicable. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of changes in the allowance for credit losses balance | The following table summarizes the changes in our allowance for credit losses balance during the year ended December 31, 2020 (in thousands): Balance at December 31, 2019 $ 2,210 Impact of adoption of ASU 2016-13 on January 1, 2020 (216) Provision for credit losses 3,525 Write-offs charged against allowance (2,149) Balance at December 31, 2020 $ 3,370 |
Schedule of estimated useful life of property, plant and equipment | Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 Other 3 to 10 years |
Business Transactions (Tables)
Business Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Transactions | |
Asset Acquisitions | The following table summarizes the purchase price allocation based on the estimated fair values of the acquired assets and liabilities as of the acquisition date (in thousands): Accounts receivable $ 9,007 Inventory 7,987 Other current assets 608 Property, plant and equipment 286,158 Operating lease ROU assets 682 Goodwill 100,598 Intangible assets 40,237 Accounts payable, trade (2,079) Accrued liabilities (2,973) Operating lease liabilities (326) Purchase price $ 439,899 |
Pro Forma Information | The unaudited pro forma financial information below is presented (in thousands) for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the transaction been consummated at the beginning of the period presented, nor is it necessarily indicative of future results. Year Ended December 31, 2019 2018 Revenue $ 1,009,763 $ 977,929 Net income attributable to Archrock stockholders 106,521 24,566 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of operating results and balance sheet data for discontinued operations | The following table presents the balance sheet for our discontinued operations (in thousands): December 31, 2020 2019 Other assets $ 7,868 $ 8,508 Deferred tax assets 3,168 4,393 Total assets associated with discontinued operations $ 11,036 $ 12,901 Deferred tax liabilities $ 7,868 $ 8,508 Total liabilities associated with discontinued operations $ 7,868 $ 8,508 The following table presents the statements of operations for our discontinued operations (in thousands): Year Ended December 31, 2020 2019 2018 Other (income) expense, net $ 640 $ (1,473) $ (654) Provision for (benefit from) income taxes (640) 1,746 654 Loss from discontinued operations, net of tax $ — $ (273) $ — |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory, net of reserves | Inventory consisted of the following (in thousands): December 31, 2020 2019 Parts and supplies $ 57,433 $ 66,121 Work in progress 6,237 8,346 Inventory $ 63,670 $ 74,467 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment, net | Property, plant and equipment, net, consisted of the following (in thousands): December 31, 2020 2019 Compression equipment, facilities and other fleet assets $ 3,439,432 $ 3,653,930 Land and buildings 45,167 50,743 Transportation and shop equipment 106,868 116,057 Computer hardware and software 84,680 93,695 Other 14,457 15,308 Property, plant and equipment 3,690,604 3,929,733 Accumulated depreciation (1,300,930) (1,370,335) Property, plant and equipment, net $ 2,389,674 $ 2,559,398 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of balance sheet information of operating leases | Balance sheet information related to our operating leases follows (in thousands): December 31, Classification 2020 2019 ROU assets Operating lease ROU assets $ 19,236 $ 17,901 Lease liabilities Current Accrued liabilities $ 3,564 $ 3,037 Noncurrent Operating lease liabilities 16,925 16,094 Total lease liabilities $ 20,489 $ 19,131 |
Schedule of components of lease cost | The components of lease cost follow (in thousands): Year Ended December 31, 2020 2019 Operating lease cost $ 4,508 $ 3,966 Short-term lease cost 52 348 Variable lease cost 1,652 1,607 Total lease cost $ 6,212 $ 5,921 |
Schedule of operating lease cash flow and noncash information | Cash flow and noncash information related to our operating leases follow (in thousands): Year Ended December 31, 2020 2019 Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 5,885 $ 5,420 Operating lease ROU assets obtained in exchange for new lease liabilities 4,812 2,247 |
Schedule of lease supplemental information | Other supplemental information related to our operating leases follows: December 31, 2020 2019 Weighted average remaining lease term (in years) 7.9 8.2 Weighted average discount rate 4.8 % 5.3 % |
Schedule of maturities of lease liabilities | Remaining maturities of lease liabilities as of December 31, 2020 were as follows (in thousands): 2021 $ 4,126 2022 3,288 2023 2,933 2024 2,513 2025 2,213 Thereafter 9,766 Total lease payments 24,839 Less: Interest (4,350) Total lease liabilities $ 20,489 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill | |
Schedule of change in the carrying value of goodwill | The following table presents the change in the carrying amount of goodwill during the year ended December 31, 2020 (in thousands): Balance at December 31, 2019 $ 100,598 Dispositions (768) Impairment loss (99,830) Balance at December 31, 2020 $ — |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following (in thousands): December 31, 2020 December 31, 2019 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Customer-related (10-25 year life) $ 147,169 $ (86,512) $ 147,244 $ (76,176) Contract-based (5-7 year life) 37,730 (36,856) 37,773 (31,370) Intangible assets $ 184,899 $ (123,368) $ 185,017 $ (107,546) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future intangible assets amortization expense as of December 31, 2020 was as follows (in thousands): 2021 $ 11,372 2022 9,171 2023 7,318 2024 6,158 2025 3,947 Thereafter 23,565 Total $ 61,531 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): December 31, 2020 2019 Accrued salaries and other benefits $ 16,332 $ 19,300 Accrued income and other taxes 11,414 11,019 Accrued interest 22,693 16,462 Derivative liability - current 4,809 593 Other accrued liabilities 21,745 20,471 Accrued liabilities $ 76,993 $ 67,845 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Instruments | |
Schedule of long-term debt | Long-term debt consisted of the following (in thousands): December 31, 2020 2019 Credit Facility $ 393,000 $ 513,000 2028 Notes 800,000 500,000 Add: Debt premium, net of amortization 14,541 — Less: Deferred financing costs, net of amortization (11,766) (8,090) 802,775 491,910 2027 Notes 500,000 500,000 Less: Deferred financing costs, net of amortization (6,908) (7,999) 493,092 492,001 2022 Notes — 350,000 Less: Debt discount, net of amortization — (2,046) Less: Deferred financing costs, net of amortization — (2,316) — 345,638 Long-term debt $ 1,688,867 $ 1,842,549 |
Schedule of Maturities of Long-term Debt | Contractual maturities of long-term debt over the next five years, excluding interest to be accrued, at December 31, 2020 were as follows (in thousands): 2021 $ — 2022 — 2023 — 2024 393,000 2025 — Long-term debt maturities through 2025 $ 393,000 |
Credit Facility, Amendment 2 | |
Debt Instruments | |
Schedule of financial ratios to be maintained defined in Credit Facility agreement | As of December 31, 2020, the following consolidated financial ratios, as defined in our Credit Facility agreement, were required: EBITDA to Interest Expense 2.5 to 1.0 Senior Secured Debt to EBITDA 3.5 to 1.0 Total Debt to EBITDA January 1 through June 30, 2020 5.50 to 1.0 Thereafter (1) 5.25 to 1.0 (1) Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss). | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in accumulated other comprehensive income (loss) of our derivative cash flow hedges, net of tax and excluding noncontrolling interest (in thousands): Year Ended December 31, 2020 2019 2018 Beginning accumulated other comprehensive income (loss) $ (1,387) $ 5,773 $ 1,197 Loss recognized in other comprehensive income (loss), net of tax provision (benefit) of $(1,776), $(1,425) and $169, respectively (6,683) (5,360) (659) (Gain) loss reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax provision (benefit) of $(814), $478 and $185, respectively (1) 3,064 (1,800) (435) Merger-related adjustments (2) — — 5,670 Other comprehensive income (loss) attributable to Archrock stockholders (3,619) (7,160) 4,576 Ending accumulated other comprehensive income (loss) $ (5,006) $ (1,387) $ 5,773 (1) Included stranded tax effects resulting from the Tax Cuts and Jobs Act of $0.3 million reclassified to accumulated deficit during the year ended December 31, 2018. (2) Pursuant to the Merger, we reclassified a gain of $5.7 million from noncontrolling interest to accumulated other comprehensive income (loss) related to the fair value of our derivative instruments that was previously attributed to public ownership of the Partnership . |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of effects of changes in ownership interest | The following table presents the effects of changes in our ownership interest in the Partnership on the equity attributable to Archrock stockholders during the year ended December 31, 2018 (in thousands): Year Ended December 31, 2018 Net income attributable to Archrock stockholders $ 21,063 Increase in Archrock stockholders’ additional paid-in capital for change in ownership of Partnership common units 56,845 Increase from net income attributable to Archrock stockholders and transfers from noncontrolling interest $ 77,908 |
Summary of entity's dividends per common share | The following table summarizes our dividends declared and paid in each of the quarterly periods of 2020, 2019 and 2018: Declared Dividends Dividends Paid per Common Share (in thousands) 2020 Q1 $ 0.145 $ 22,171 Q2 0.145 22,176 Q3 0.145 22,308 Q4 0.145 22,177 2019 Q1 $ 0.132 $ 17,231 Q2 0.132 17,206 Q3 0.145 22,062 Q4 0.145 22,031 2018 Q1 $ 0.120 $ 8,532 Q2 0.120 15,486 Q3 0.132 17,114 Q4 0.132 17,156 |
Revenue from Contract with Cu_2
Revenue from Contract with Customers (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our revenue from contracts with customers disaggregated by revenue source (in thousands): Year Ended December 31, 2020 2019 2018 Contract operations (1) : 0 - 1,000 horsepower per unit $ 224,702 $ 259,985 $ 241,810 1,001 - 1,500 horsepower per unit 305,185 316,082 276,775 Over 1,500 horsepower per unit 206,749 191,510 149,783 Other (2) 2,282 3,962 4,168 Total contract operations (3) 738,918 771,539 672,536 Aftermarket services (1) : Services (4) 79,012 122,076 142,476 OTC parts and components sales 57,040 71,870 89,429 Total aftermarket services (5) 136,052 193,946 231,905 Total revenue $ 874,970 $ 965,485 $ 904,441 (1) We operate in two segments: contract operations and aftermarket services. See Note 28 (“Segments”) for further details regarding our segments. (2) Primarily relates to fees associated with owned non-compression equipment. (3) Includes $5.6 million, $7.9 million and $6.6 million for the years ended December 31, 2020, 2019 and 2018, respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time. (4) Includes a reversal of $0.9 million of revenue during the year ended December 31, 2019 related to changes in estimates of performance obligations partially satisfied in prior periods. (5) All service revenue within aftermarket services is recognized over time. All OTC parts and components sales revenue is recognized at a point in time. |
Remaining Performance Obligation | As of December 31, 2020, we had $350.0 million of remaining performance obligations related to our contract operations segment. Our remaining performance obligations will be recognized through 2025 as follows (in thousands): 2021 2022 2023 2024 2025 Total Remaining performance obligations $ 252,807 $ 82,366 $ 13,216 $ 1,436 $ 168 $ 349,993 |
Long-Lived and Other Asset Im_2
Long-Lived and Other Asset Impairment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Long-Lived and Other Asset Impairment | |
Schedule of impairment of long-lived assets | The following table presents the results of our compression fleet impairment review as recorded to our contract operations segment (dollars in thousands): Year Ended December 31, 2020 2019 2018 Idle compressors retired from the active fleet 730 975 310 Horsepower of idle compressors retired from the active fleet 261,000 170,000 115,000 Impairment recorded on idle compressors retired from the active fleet $ 77,590 $ 44,663 $ 28,127 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring Charges | |
Schedule of changes to accrued liability balance related to restructuring charges | The following table presents the changes to our accrued liability balance related to restructuring charges during the year ended December 31, 2020 (in thousands): Organizational Pandemic Property Restructuring Restructuring Restructuring Total Balance at December 31, 2019 $ — $ — $ — $ — Charges incurred (1) 1,695 5,257 1,498 8,450 Non-cash expense (2) (61) (101) (1,498) (1,660) Payments (1,634) (4,955) — (6,589) Balance at December 31, 2020 $ — $ 201 $ — $ 201 (1) Includes a loss on sale of $0.9 million and an impairment loss of $0.6 million related to the property restructuring during the year ended December 31, 2020. (2) Represents accelerated vesting of stock awards related to the organizational and pandemic restructuring activities and the loss on sale and impairment loss related to the property restructuring during the year ended December 31, 2020. |
Schedule of restructuring charges by segment | The following table presents, by segment, restructuring charges incurred during the year ended December 31, 2020 (in thousands): Contract Aftermarket Operations Services Other (1) Total Organizational restructuring $ 458 $ 625 $ 612 $ 1,695 Pandemic restructuring 2,505 1,218 1,534 5,257 Property restructuring Loss on sale — — 915 915 Impairment loss — — 583 583 Total property restructuring — — 1,498 1,498 Total restructuring charges $ 2,963 $ 1,843 $ 3,644 $ 8,450 (1) Represents expense incurred within our corporate function and not directly attributable to our segments. |
Schedule of restructuring charges by type | The following table presents, by cost type, restructuring charges incurred during the year ended December 31, 2020 (in thousands): Year Ended December 31, 2020 Severance costs Organizational restructuring $ 1,695 Pandemic restructuring 5,257 Total severance costs 6,952 Property restructuring Loss on sale 915 Impairment loss 583 Total property restructuring 1,498 Total restructuring charges $ 8,450 |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of Components of Income Tax Expense (Benefit) | Our provision for (benefit from) income taxes consisted of the following (in thousands): Year Ended December 31, 2020 2019 2018 Current tax provision (benefit): U.S. federal $ (99) $ 75 $ — State 326 377 912 Total current 227 452 912 Deferred tax provision (benefit): U.S. federal (17,246) (35,597) 6,197 State (518) (4,000) (959) Total deferred (17,764) (39,597) 5,238 Provision for (benefit from) income taxes $ (17,537) $ (39,145) $ 6,150 |
Schedule of Effective Income Tax Rate Reconciliation | The provision for (benefit from) income taxes for the years ended December 31, 2020, 2019 and 2018 resulted in effective tax rates on continuing operations of 20.4%, (67.0)% and 17.4%, respectively. The following table reconciles these effective tax rates to the U.S. statutory rate of 21%, the rate in effect during 2020, 2019 and 2018 (in thousands): Year Ended December 31, 2020 2019 2018 Income taxes at U.S. federal statutory rate $ (18,056) $ 12,276 $ 7,415 Net state income taxes (817) 1,634 1,570 Tax credits (1,256) (1,757) (244) Noncontrolling interest — — (1,793) Unrecognized tax benefits (1) 772 (1,958) (1,443) Valuation allowances and write off of tax attributes (2) 236 (50,219) (58) Executive compensation limitation 1,159 1,102 977 Stock 538 66 (455) Other (113) (289) 181 Provision for (benefit from) income taxes $ (17,537) $ (39,145) $ 6,150 (1) Reflects a decrease in our uncertain tax benefit, net of federal benefit, due to settlements of tax audits and expiration of statute of limitations in 2019 and 2018. (2) See “Tax Attributes and Valuation Allowances” below for further details. |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that gave rise to deferred tax assets and deferred tax liabilities were as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 158,916 $ 116,378 Accrued liabilities 3,133 3,486 Other 12,124 12,479 174,173 132,343 Valuation allowances (1) (1,027) (822) Total deferred tax assets 173,146 131,521 Deferred tax liabilities: Property, plant and equipment (6,066) (6,440) Basis difference in the Partnership (103,721) (81,645) Other (7,150) (8,083) Total deferred tax liabilities (116,937) (96,168) Net deferred tax asset (2) $ 56,209 $ 35,353 (1) See “Tax Attributes and Valuation Allowances” below for further details. (2) The 2020 and 2019 net deferred tax asset are reflected in our consolidated balance sheets as deferred tax assets of $56.9 million and $36.6 million, respectively, and deferred tax liabilities of $0.7 million and $1.3 million, respectively. |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the unrecognized tax benefit (including discontinued operations) activity is shown below (in thousands): Year Ended December 31, 2020 2019 2018 Beginning balance $ 18,453 $ 19,560 $ 21,400 Additions based on tax positions related to current year 2,397 2,227 1,893 Additions based on tax positions related to prior years — 2,047 450 Reductions based on settlement refunds from government authorities — (4,414) (3,461) Reductions based on tax positions related to prior years (73) (51) (20) Reductions based on lapse of statute of limitations (1,885) (916) (702) Ending balance $ 18,892 $ 18,453 $ 19,560 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of net income (loss) attributable to Archrock common stockholders used in the calculation of basic and diluted income (loss) per common share | The following table shows the calculation for net income (loss) attributable to Archrock common stockholders, which is used in the calculation of basic and diluted net income (loss) per common share attributable to Archrock common stockholders (in thousands): Year Ended December 31, 2020 2019 2018 Income (loss) from continuing operations attributable to Archrock stockholders $ (68,445) $ 97,603 $ 21,063 Loss from discontinued operations, net of tax — (273) — Net income (loss) attributable to Archrock stockholders (68,445) 97,330 21,063 Less: Earnings attributable to participating securities (1,338) (1,348) (815) Net income (loss) attributable to Archrock common stockholders $ (69,783) $ 95,982 $ 20,248 |
Schedule of potential shares of common stock that were included in computing diluted income (loss) attributable to Archrock common stockholders per common share | The following table shows the potential shares of common stock that were included in computing diluted net income (loss) per common share attributable to Archrock common stockholders (in thousands): Year Ended December 31, 2020 2019 2018 Weighted average common shares outstanding including participating securities 152,827 139,317 110,843 Less: Weighted average participating securities outstanding (1,999) (1,825) (1,538) Weighted average common shares outstanding used in basic net income (loss) per common share 150,828 137,492 109,305 Net dilutive potential common shares issuable: On exercise of options and vesting of performance-based restricted stock units — 34 111 On settlement of ESPP shares — 2 5 Weighted average common shares outstanding used in diluted net income (loss) per common share 150,828 137,528 109,421 |
Schedule of potential shares of common stock issuable, excluded from computation of diluted income (loss), attributable to Archrock common stockholders per common share | The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income (loss) per common share attributable to Archrock common stockholders as their inclusion would have been anti-dilutive (in thousands): Year Ended December 31, 2020 2019 2018 On exercise of options where exercise price is greater than average market value for the period 96 154 195 On exercise of options and vesting of performance-based restricted stock units 54 — — On settlement of ESPP shares 17 — — Net dilutive potential common shares issuable 167 154 195 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of derivative instruments on consolidated financial position | The following table presents the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated balance sheets (in thousands): December 31, 2020 2019 Other current assets $ — $ 12 Total derivative assets $ — $ 12 Accrued liabilities $ 4,810 $ 593 Other liabilities 1,527 1,175 Total derivative liabilities $ 6,337 $ 1,768 |
Effect of derivative instruments on results of operations | The following table presents the effect of our derivative instruments designated as cash flow hedging instruments on our consolidated statements of operations (in thousands): Year Ended December 31, 2020 2019 2018 Pre-tax gain (loss) recognized in other comprehensive income (loss) $ (8,459) $ (6,785) $ 3,512 Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense (3,878) 2,278 617 Total amount of interest expense in which the effects of cash flow hedges are recorded 105,716 104,681 93,328 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Valuation of our interest rate swaps and impaired assets | |
Summary of assets and liabilities measured at fair value on recurring basis | The following table presents our derivative asset and liability measured at fair value on a recurring basis, with pricing levels as of the date of valuation (in thousands): December 31, 2020 2019 Derivative asset $ — $ 12 Derivative liability 6,337 1,768 |
Schedule of carrying value and estimated fair value of debt instruments | The fair value of our fixed rate debt is estimated using yields observable in active markets, which are Level 2 inputs, and was as follows (in thousands): December 31, 2020 2019 Carrying amount of fixed rate debt (1) $ 1,295,867 $ 1,329,549 Fair value of fixed rate debt 1,371,000 1,400,000 (1) |
Land and buildings | |
Valuation of our interest rate swaps and impaired assets | |
Schedule of non-recurring fair value assets | The fair value of our impaired properties was as follows (in thousands): December 31, 2020 Impaired properties $ 430 |
Schedule of additional quantitative information related to our significant unobservable inputs | The significant unobservable inputs used to develop the Level 3 fair value measurements for the properties were the estimated sale values in an inactive market. In reviewing sales trends for the past three years, the probable pricing information based on market comparisons was as follows (in thousands): Range Weighted Average Estimated sale proceeds $100 - $600 $427 |
Compressors | |
Valuation of our interest rate swaps and impaired assets | |
Schedule of non-recurring fair value assets | December 31, 2020 2019 Impaired compressors $ 19,046 $ 5,859 |
Schedule of additional quantitative information related to our significant unobservable inputs | Range Weighted Average (1) Estimated net sale proceeds $0 - $289 per horsepower $20 per horsepower (1) Calculated based on an estimated discount for market liquidity of 81% . |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of allocated stock-based compensation | Stock-based compensation expense consisted of the following (in thousands): Year Ended December 31, 2020 2019 2018 Equity awards $ 10,551 $ 8,105 $ 7,388 Liability awards 1,521 2,336 1,096 Total stock-based compensation expense $ 12,072 $ 10,441 $ 8,484 |
Summary of stock option activity | Weighted Weighted Aggregate Stock Average Average Intrinsic Options Exercise Price Remaining Life Value (in thousands) per Share (in years) (in thousands) Options outstanding and exercisable, December 31, 2019 154 $ 19.40 Canceled (90) 15.32 Options outstanding and exercisable, December 31, 2020 64 25.18 0.2 $ — |
Share-Based Compensation Measurement Inputs [Table Text Block] | Year Ended December 31, 2020 2019 2018 Remaining performance period as of grant date (in years) 2.9 2.9 2.8 Risk-free interest rate used 1.4 % 2.6 % 2.4 % Grant-date fair value $ 11.33 $ 12.91 $ 13.46 |
Schedule of restricted stock, restricted stock unit, performance unit, cash settled restricted stock unit and cash settled performance unit activity | Weighted Average Grant Date Fair Value Shares Per Share Non-vested awards, December 31, 2019 2,022 $ 10.25 Granted (1) 1,467 9.37 Vested (2) (933) 10.39 Canceled (110) 9.78 Non-vested awards, December 31, 2020 (3) 2,446 9.69 (1) The weighted average grant date fair value of shares granted during the years ended December 31, 2020, 2019 and 2018 was $9.37 , $10.01 and $9.66 , respectively. (2) The total fair value of all awards vested during the years ended December 31, 2020, 2019 and 2018 was $7.1 million, $9.0 million and $8.2 million, respectively. (3) Non-vested awards as of December 31, 2020 were comprised of 454,000 cash-settled restricted stock units and cash-settled performance units and 1,992,000 restricted stock, stock-settled restricted stock units and stock-settled performance-based restricted stock units. |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Revenue and other financial information by reportable segment | The following table presents revenue, gross margin and capital expenditures by segment during the years ended December 31, 2020, 2019 and 2018 (in thousands): Contract Aftermarket Segments Operations Services Total Other (1) Total 2020 Revenue $ 738,918 $ 136,052 $ 874,970 $ — $ 874,970 Gross margin 477,831 19,946 497,777 — 497,777 Capital expenditures 133,492 5,308 138,800 1,502 140,302 2019 Revenue $ 771,539 $ 193,946 $ 965,485 $ — $ 965,485 Gross margin 474,279 34,968 509,247 — 509,247 Capital expenditures 374,650 8,714 383,364 1,834 385,198 2018 Revenue $ 672,536 $ 231,905 $ 904,441 $ — $ 904,441 Gross margin 399,523 40,551 440,074 — 440,074 Capital expenditures 307,048 6,111 313,159 5,943 319,102 (1) Corporate-related items. |
Schedule of assets by segment | The following table presents assets by segment reconciled to total assets per the consolidated balance sheets (in thousands): December 31, 2020 2019 Contract operations $ 2,593,864 $ 2,915,724 Aftermarket services 45,985 67,832 Segment assets 2,639,849 2,983,556 Other assets (1) 128,837 113,518 Assets associated with discontinued operations 11,036 12,901 Total assets $ 2,779,722 $ 3,109,975 (1) Corporate-related items. |
Reconciliation of net income (loss) to gross margin | The following table reconciles total gross margin to income (loss) before income taxes (in thousands): Year Ended December 31, 2020 2019 2018 Total gross margin $ 497,777 $ 509,247 $ 440,074 Less: Selling, general and administrative 105,100 117,727 101,563 Depreciation and amortization 193,138 188,084 174,946 Long-lived and other asset impairment 79,556 44,663 28,127 Goodwill impairment 99,830 — — Restatement and other charges — 445 19 Restructuring charges 8,450 — — Interest expense 105,716 104,681 93,328 Debt extinguishment loss 3,971 3,653 2,450 Transaction-related costs — 8,213 10,162 Gain on sale of assets, net (10,643) (16,016) (5,674) Other income, net (1,359) (661) (157) Income (loss) before income taxes $ (85,982) $ 58,458 $ 35,310 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Credit Facility, Amendment 3 | |
Subsequent Events | |
Schedule of financial ratios to be maintained defined in Credit Facility agreement | Senior Secured Debt to EBITDA 3.00 to 1.0 Total Debt to EBITDA Through fiscal year 2022 5.75 to 1.0 January 1, 2023 through September 30, 2023 5.50 to 1.0 Thereafter (1) 5.25 to 1.0 (1) Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter. |
Description of Business (Detail
Description of Business (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Description Of Business | |
Number of reportable segments | 2 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Concentrations of Credit Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Credit Losses | |||
Contractual life of accounts receivable | 30 days | ||
Period for analyzing historical loss data to determine loss experience | 2 years | ||
Provision for credit losses | $ 3,525 | $ 2,567 | $ 1,677 |
Trade Receivables | Credit Concentration Risk | Chevron, U.S.A. Inc. | |||
Credit Losses | |||
Concentration risk (as a percent) | 14.00% | ||
Trade Receivables | Credit Concentration Risk | Williams Partners | |||
Credit Losses | |||
Concentration risk (as a percent) | 10.00% |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Changes in Allowance for Credit Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the allowance for credit losses balance | |||
Balance at beginning of period | $ 2,210 | ||
Provision for credit losses | 3,525 | $ 2,567 | $ 1,677 |
Write-offs charged against the allowance | (2,149) | ||
Balance at end of period | 3,370 | 2,210 | |
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Changes in the allowance for credit losses balance | |||
Balance at beginning of period | $ (216) | ||
Balance at end of period | $ (216) |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Property Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Compression equipment, facilities and other fleet assets | Minimum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 3 years |
Compression equipment, facilities and other fleet assets | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 30 years |
Building | Minimum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 20 years |
Building | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 35 years |
Transportation and shop equipment | Minimum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 3 years |
Transportation and shop equipment | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 10 years |
Computer hardware and software | Minimum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 3 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 5 years |
Other property, plant and equipment | Minimum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 3 years |
Other property, plant and equipment | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 10 years |
Major improvements | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 7 years |
Recent Accounting Developments
Recent Accounting Developments - ASUs Implemented (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle | |||
Accumulated deficit | $ (2,401,988) | $ (2,244,877) | |
ASU 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | ||
ASU 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Accumulated deficit | $ (200) | ||
ASU 2018-13 | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | ||
ASU 2019-12 | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
Business Transactions - Disposi
Business Transactions - Dispositions (Details) hp in Thousands, $ in Thousands | Jul. 09, 2020USD ($) | Mar. 01, 2020USD ($)hpCompressorUnit | Dec. 31, 2020USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposition | $ 12,475 | ||
Disposed of by Sale, Not Discontinued Operations | July 2020 Disposition | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Disposal Group, Not Discontinued Operation, Name of Segment [Extensible List] | Aftermarket Services Segment [Member] | ||
Cash consideration received upon closing | $ 9,500 | ||
Cash consideration receivable on first anniversary | 3,000 | ||
Amount of consideration receivable as credit for purchases | $ 3,500 | ||
Cash received under supply agreement | 700 | ||
Gain on disposition | $ 9,300 | ||
Disposed of by Sale, Not Discontinued Operations | March 2020 Disposition | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of compressors | CompressorUnit | 200 | ||
Compressor units horsepower (horsepower) | hp | 35 | ||
Gain on disposition | $ 3,200 | ||
Turbocharger goods and services | July 2020 Disposition | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Term of supply agreement | 2 years |
Business Transactions - Elite A
Business Transactions - Elite Acquisition (Details) $ in Thousands, shares in Millions | Aug. 01, 2019USD ($)hpshares | Aug. 31, 2019USD ($)shares | Dec. 31, 2019USD ($) |
Purchase price allocation | |||
Goodwill | $ 100,598 | ||
Elite Acquisition | |||
Business Transactions | |||
Compressor units horsepower (horsepower) | hp | 430,000 | ||
Cash consideration | $ 214,000 | ||
Purchase price allocation | |||
Accounts receivable | 9,007 | ||
Inventory | 7,987 | ||
Other current assets | 608 | ||
Property, plant and equipment | 286,158 | ||
Operating lease ROU assets | 682 | ||
Goodwill | 100,598 | ||
Intangible assets | 40,237 | ||
Accounts payable, trade | (2,079) | ||
Accrued liabilities | (2,973) | ||
Operating lease liabilities | (326) | ||
Purchase price | $ 439,899 | ||
Elite Acquisition | Common Stock | |||
Business Transactions | |||
Shares issued as compensation for asset acquisition (shares) | shares | 21.7 | 21.7 | |
Fair value of equity consideration | $ 225,900 | $ 225,900 |
Business Transactions - Assets
Business Transactions - Assets Acquired (Details) - Elite Acquisition | Aug. 01, 2019 |
Weighted average | |
Business Acquisition [Line Items] | |
Property plant and equipment useful life | 15 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Intangible assets useful life | 15 years |
Business Transactions - Pro for
Business Transactions - Pro forma (Details) $ in Thousands | Aug. 01, 2019USD ($)hp | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Transactions | ||||
Transaction-related costs | $ 8,213 | $ 10,162 | ||
Pro forma financial information | ||||
Revenue | 1,009,763 | 977,929 | ||
Net income attributable to Archrock stockholders | 106,521 | $ 24,566 | ||
Elite Acquisition | ||||
Business Transactions | ||||
Compressor units horsepower (horsepower) | hp | 430,000 | |||
Cash consideration | $ 214,000 | |||
Transaction-related costs | $ 7,800 | |||
Revenue attributable to assets acquired | $ 33,200 |
Business Transactions - Harvest
Business Transactions - Harvest Sale (Details) $ in Thousands | Aug. 01, 2019USD ($)hp | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of property, plant and equipment and other assets | $ 18,911 | $ 80,961 | $ 33,927 | |
Disposed of by Sale, Not Discontinued Operations | Harvest | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Compressor units horsepower (horsepower) | hp | 80,000 | |||
Proceeds from sale of property, plant and equipment and other assets | $ 30,000 | |||
Gain on sale of assets | $ 6,600 |
Discontinued Operations - Narra
Discontinued Operations - Narratives (Details) - Spinoff - Exterran Corporation - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | |
Discontinued Operations | |||
Proceeds under terms of separation and distribution agreement | $ 700 | $ 18,700 | |
Deferred tax liabilities | 7,868 | $ 8,508 | |
Indemnification asset | $ 7,868 | $ 8,508 |
Discontinued Operations - Balan
Discontinued Operations - Balance Sheet Data for Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of balance sheet data for discontinued operations | ||
Total assets associated with discontinued operations | $ 11,036 | $ 12,901 |
Total liabilities associated with discontinued operations | 7,868 | 8,508 |
Spinoff | Exterran Corporation | ||
Summary of balance sheet data for discontinued operations | ||
Other assets | 7,868 | 8,508 |
Deferred tax assets | 3,168 | 4,393 |
Total assets associated with discontinued operations | 11,036 | 12,901 |
Deferred tax liabilities | 7,868 | 8,508 |
Total liabilities associated with discontinued operations | $ 7,868 | $ 8,508 |
Discontinued Operations - Incom
Discontinued Operations - Income Statement Data for Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of operating results of discontinued operations | |||
Loss from discontinued operations, net of tax | $ (273) | ||
Spinoff | Exterran Corporation | |||
Summary of operating results of discontinued operations | |||
Other (income) expense, net | $ 640 | (1,473) | $ (654) |
Provision for (benefit from) income taxes | $ (640) | 1,746 | $ 654 |
Loss from discontinued operations, net of tax | $ (273) |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Composition of Inventory net of reserves | ||
Parts and supplies | $ 57,433 | $ 66,121 |
Work in progress | 6,237 | 8,346 |
Inventory | $ 63,670 | $ 74,467 |
Inventory - Write-down (Details
Inventory - Write-down (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |||
Inventory write-downs | $ 1,349 | $ 944 | $ 1,614 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 3,690,604 | $ 3,929,733 |
Accumulated depreciation | (1,300,930) | (1,370,335) |
Property, plant and equipment, net | 2,389,674 | 2,559,398 |
Compression equipment, facilities and other fleet assets | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 3,439,432 | 3,653,930 |
Land and buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 45,167 | 50,743 |
Transportation and shop equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 106,868 | 116,057 |
Computer hardware and software | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 84,680 | 93,695 |
Other property, plant and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 14,457 | $ 15,308 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 177.5 | $ 172.8 | $ 158.4 |
Construction in progress | $ 17.6 | $ 51 |
Leases - Terms (Details)
Leases - Terms (Details) | Dec. 31, 2020 |
Minimum | |
Lessee, Lease, Description | |
Remaining lease term (in years) | 1 year |
Operating lease renewal term (in years) | 1 year |
Maximum | |
Lessee, Lease, Description | |
Remaining lease term (in years) | 10 years |
Operating lease renewal term (in years) | 5 years |
Leases - Balance Sheet Location
Leases - Balance Sheet Location (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease ROU assets | $ 19,236 | $ 17,901 |
Lease liabilities | ||
Operating lease liabilities current | 3,564 | 3,037 |
Operating lease liabilities noncurrent | 16,925 | 16,094 |
Total lease liabilities | $ 20,489 | $ 19,131 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 4,508 | $ 3,966 |
Short-term lease cost | 52 | 348 |
Variable lease cost | 1,652 | 1,607 |
Total lease cost | $ 6,212 | $ 5,921 |
Leases - Cash Flow and Non-cash
Leases - Cash Flow and Non-cash Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities | $ 5,885 | $ 5,420 |
Operating lease ROU assets obtained in exchange for new lease liabilities | $ 4,812 | $ 2,247 |
Leases - Other Supplemental Inf
Leases - Other Supplemental Information (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 7 years 10 months 24 days | 8 years 2 months 12 days |
Weighted average discount rate (as a percent) | 4.80% | 5.30% |
Leases - Maturity Schedule (Det
Leases - Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Lease Liabilities, Payments Due | ||
2021 | $ 4,126 | |
2022 | 3,288 | |
2023 | 2,933 | |
2024 | 2,513 | |
2025 | 2,213 | |
Thereafter | 9,766 | |
Total lease payments | 24,839 | |
Less: Interest | (4,350) | |
Lease liability | $ 20,489 | $ 19,131 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2020 | |
Change in the carrying value of goodwill | ||
Goodwill, net as of beginning of period | $ 100,598 | $ 100,598 |
Dispositions | (768) | |
Impairment loss | $ (99,800) | $ (99,830) |
Intangible Assets, net - By typ
Intangible Assets, net - By type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 184,899 | $ 185,017 |
Accumulated Amortization | (123,368) | (107,546) |
Customer-related | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 147,169 | 147,244 |
Accumulated Amortization | $ (86,512) | $ (76,176) |
Customer-related | Minimum | ||
Finite-Lived Intangible Assets | ||
Useful life | 10 years | 10 years |
Customer-related | Maximum | ||
Finite-Lived Intangible Assets | ||
Useful life | 25 years | 25 years |
Contract-based | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 37,730 | $ 37,773 |
Accumulated Amortization | $ (36,856) | $ (31,370) |
Contract-based | Minimum | ||
Finite-Lived Intangible Assets | ||
Useful life | 5 years | 5 years |
Contract-based | Maximum | ||
Finite-Lived Intangible Assets | ||
Useful life | 7 years | 7 years |
Intangible Assets, net - Amorti
Intangible Assets, net - Amortization expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 15.6 | $ 15.3 | $ 16.5 |
Intangible Assets, net - Estima
Intangible Assets, net - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 11,372 | |
2022 | 9,171 | |
2023 | 7,318 | |
2024 | 6,158 | |
2025 | 3,947 | |
Thereafter | 23,565 | |
Intangible Assets, Net (Excluding Goodwill), Total | $ 61,531 | $ 77,471 |
Contract Costs (Details)
Contract Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue | |||
Contract costs, net | $ 29,216 | $ 42,927 | |
Capitalized contract, term | 38 months | ||
Amortization of contract costs | $ 26,629 | 23,330 | $ 14,939 |
Sales commissions | |||
Disaggregation of Revenue | |||
Contract costs, net | 3,200 | 4,800 | |
Amortization of contract costs | 3,000 | 2,600 | 1,500 |
Freight and mobilization | |||
Disaggregation of Revenue | |||
Contract costs, net | 26,000 | 38,100 | |
Amortization of contract costs | $ 23,600 | $ 20,700 | $ 13,400 |
Hosting Arrangements (Details)
Hosting Arrangements (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Hosting arrangements, Capitalized costs | $ 7.7 | $ 5.5 |
Hosting arrangements, Accumulated amortization | 0.3 | |
Hosting arrangements, Amortization | 0.3 | |
Impairment of capitalized implementation costs | $ 1.6 | |
Hosting Arrangement, Service Contract, Implementation Cost, Impairment, Statement of Income [Extensible List] | Long-Lived and Other Asset Impairment. |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued salaries and other benefits | $ 16,332 | $ 19,300 |
Accrued income and other taxes | 11,414 | 11,019 |
Accrued interest | 22,693 | 16,462 |
Derivative liability - current | 4,809 | 593 |
Other accrued liabilities | 21,745 | 20,471 |
Accrued liabilities | $ 76,993 | $ 67,845 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instruments | ||
Long-term debt | $ 1,688,867 | $ 1,842,549 |
Credit Facility | ||
Debt Instruments | ||
Long-term debt | 393,000 | 513,000 |
2028 Notes | ||
Debt Instruments | ||
Long term debt gross | 800,000 | 500,000 |
Add: Debt premium, net of amortization | 14,541 | |
Less: Deferred financing costs, net of amortization | (11,766) | (8,090) |
Long-term debt | 802,775 | 491,910 |
2027 Notes | ||
Debt Instruments | ||
Long term debt gross | 500,000 | 500,000 |
Less: Deferred financing costs, net of amortization | (6,908) | (7,999) |
Long-term debt | $ 493,092 | 492,001 |
2022 Notes | ||
Debt Instruments | ||
Long term debt gross | 350,000 | |
Less: Debt discount, net of amortization | (2,046) | |
Less: Deferred financing costs, net of amortization | (2,316) | |
Long-term debt | $ 345,638 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facility (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 08, 2019 | Apr. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | |
Credit Facility | |||||||
Line of Credit Facility | |||||||
Letter of credit outstanding | $ 12.4 | ||||||
Debt instrument, variable rate (percentage) | 2.40% | ||||||
Debt instrument weighted average interest rate (percent) | 2.70% | 4.30% | |||||
Current borrowing capacity | $ 444.1 | ||||||
Undrawn capacity under revolving credit facility | 844.6 | ||||||
Issuance costs | $ 6.4 | $ 3.3 | |||||
Maximum borrowing capacity | 1,250 | $ 1,250 | $ 1,100 | ||||
Contingent increase in borrowing capacity | $ 250 | ||||||
Line of credit facility, commitment fee (percent) | 0.375% | ||||||
Commitment fee amount | $ 2 | $ 1.9 | $ 2.1 | ||||
Credit Facility | LIBOR | Minimum | |||||||
Line of Credit Facility | |||||||
Debt instrument, variable rate (percentage) | 2.00% | ||||||
Credit Facility | LIBOR | Maximum | |||||||
Line of Credit Facility | |||||||
Debt instrument, variable rate (percentage) | 2.75% | ||||||
Credit Facility | Base Rate | Minimum | |||||||
Line of Credit Facility | |||||||
Debt instrument, variable rate (percentage) | 1.00% | ||||||
Credit Facility | Base Rate | Maximum | |||||||
Line of Credit Facility | |||||||
Debt instrument, variable rate (percentage) | 1.75% | ||||||
Credit Facility | Federal Funds Rate | |||||||
Line of Credit Facility | |||||||
Debt instrument, interest margin added to variable rate | 0.50% | ||||||
Credit Facility | One-month LIBOR | |||||||
Line of Credit Facility | |||||||
Debt instrument, interest margin added to variable rate | 1.00% | ||||||
Letters of Credit, Credit Facility | |||||||
Line of Credit Facility | |||||||
Maximum borrowing capacity | $ 50 | $ 25 | |||||
Swing Line Loans, Credit Facility | |||||||
Line of Credit Facility | |||||||
Maximum borrowing capacity | $ 50 |
Long-Term Debt - Debt Ratios (D
Long-Term Debt - Debt Ratios (Details) - Credit Facility | 6 Months Ended | 12 Months Ended | 52 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | Nov. 08, 2024 | |
Line of Credit Facility | |||
Total interest to EBITDA covenant | 2.5 | ||
Senior Secured Debt to EBITDA | 3.5 | ||
Total Debt to EBITDA ratio | 5.50 | ||
Forecast | |||
Line of Credit Facility | |||
Total Debt to EBITDA ratio | 5.25 | ||
Forecast | Conditional Event | |||
Line of Credit Facility | |||
Total Debt to EBITDA ratio | 5.50 |
Long-Term Debt - Former Credit
Long-Term Debt - Former Credit Facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Line of Credit Facility | ||||
Repayments of long-term debt | $ 1,204,375 | $ 2,071,750 | $ 605,636 | |
Debt extinguishment loss | $ 3,971 | $ 3,653 | $ 2,450 | |
Former Credit Facility | ||||
Line of Credit Facility | ||||
Repayments of long-term debt | $ 63,200 | |||
Letter of credit outstanding | 15,400 | |||
Debt extinguishment loss | $ 2,500 |
Long-Term Debt - 2028 Notes and
Long-Term Debt - 2028 Notes and 2027 Notes (Details) $ in Thousands | Dec. 17, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 17, 2020USD ($)Offering |
Debt Instruments | |||||||
Borrowings of long-term debt | $ 1,049,000 | $ 2,395,250 | $ 714,830 | ||||
Proceeds from issuance of debt | 1,049,000 | 2,395,250 | 714,830 | ||||
Repayments of long-term debt | 1,204,375 | 2,071,750 | 605,636 | ||||
Interest paid | 99,797 | 97,451 | 86,758 | ||||
Debt extinguishment loss | $ 3,971 | 3,653 | $ 2,450 | ||||
2028 Notes | |||||||
Debt Instruments | |||||||
Debt instrument face amount | $ 300,000 | $ 500,000 | $ 500,000 | $ 300,000 | |||
Interest rate (as a percent) | 6.25% | 6.25% | 6.25% | 6.25% | |||
Number of offerings | Offering | 2 | ||||||
Borrowings of long-term debt | $ 309,900 | $ 491,800 | |||||
Percent of face value debt issued | 104.875% | 104.875% | |||||
Debt instrument effective interest rate (as a percent) | 5.60% | 5.60% | |||||
Proceeds from issuance of debt | $ 309,900 | 491,800 | |||||
Issuance costs | $ 4,700 | $ 8,200 | $ 8,200 | $ 4,700 | |||
2027 Notes | |||||||
Debt Instruments | |||||||
Debt instrument face amount | $ 500,000 | ||||||
Interest rate (as a percent) | 6.875% | ||||||
Borrowings of long-term debt | $ 491,200 | ||||||
Proceeds from issuance of debt | 491,200 | ||||||
Issuance costs | $ 8,800 |
Long-Term Debt - 2022 Notes and
Long-Term Debt - 2022 Notes and 2021 Notes (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Apr. 05, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instruments | |||||
Repayments of long-term debt | $ 1,204,375 | $ 2,071,750 | $ 605,636 | ||
Interest paid | 99,797 | 97,451 | 86,758 | ||
Debt extinguishment loss | $ 3,971 | 3,653 | $ 2,450 | ||
2022 Notes | |||||
Debt Instruments | |||||
Redemption rate (as a percent) | 100.00% | ||||
Repayments of long-term debt | $ 350,000 | ||||
Interest paid | 10,500 | ||||
Debt extinguishment loss | $ 4,000 | ||||
2021 Notes | |||||
Debt Instruments | |||||
Redemption rate (as a percent) | 100.00% | ||||
Repayments of long-term debt | $ 350,000 | ||||
Interest paid | $ 200 | ||||
Debt extinguishment loss | $ 3,700 |
Long-Term Debt Long-Term Debt -
Long-Term Debt Long-Term Debt - Debt Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Long-term Debt, Fiscal Year Maturity | ||
2024 | $ 393,000 | |
Long-term debt maturities through 2025 | $ 393,000 | |
2022 Notes | ||
Long-term Debt, Fiscal Year Maturity | ||
Unamortized debt issuance cost | $ 2,046 | |
Deferred finance cost | $ 2,316 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Increase (Decrease) in Stockholders' Equity | |||
Merger-related adjustments | $ 5,670 | ||
Adjustments related to TCJA | (300) | ||
Accumulated Other Comprehensive Income (Loss) | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | $ (1,387) | $ 5,773 | 1,197 |
Loss recognized in other comprehensive income (loss), net of tax provision (benefit) of $(1,776), $(1,425) and $169, respectively | (6,683) | (5,360) | (659) |
(Gain) loss reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax provision (benefit) of $(814), $478 and $185, respectively | 3,064 | (1,800) | (435) |
Merger-related adjustments | 5,670 | ||
Other comprehensive income (loss) attributable to Archrock stockholders | (3,619) | (7,160) | 4,576 |
Ending balance | (5,006) | (1,387) | 5,773 |
Loss recognized in other comprehensive income, tax expense (benefit) | (1,776) | (1,425) | 169 |
(Gain) loss reclassified from accumulated other comprehensive income (loss) to interest expense, tax provision (benefit) | $ (814) | $ 478 | $ 185 |
Equity - Elite Acquisition (Det
Equity - Elite Acquisition (Details) - Elite Acquisition - Common Stock - USD ($) shares in Millions, $ in Millions | Aug. 01, 2019 | Aug. 31, 2019 |
Business Acquisition | ||
Shares issued as compensation for asset acquisition (shares) | 21.7 | 21.7 |
Fair value of equity consideration | $ 225.9 | $ 225.9 |
Equity - Merger Transaction (De
Equity - Merger Transaction (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
Apr. 30, 2018USD ($)shares | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | |
Class of Stock | ||||||||||||||||
Deferred tax assets net | $ 173,146 | $ 131,521 | $ 173,146 | $ 131,521 | ||||||||||||
Deferred tax asset valuation allowances | 1,027 | 822 | 1,027 | 822 | ||||||||||||
Merger-related costs | 8,213 | $ 10,162 | ||||||||||||||
Dividends paid to Archrock stockholders | $ 22,177 | $ 22,308 | $ 22,176 | $ 22,171 | $ 22,031 | $ 22,062 | $ 17,206 | $ 17,231 | $ 17,156 | $ 17,114 | $ 15,486 | $ 8,532 | $ 88,832 | $ 78,530 | $ 58,288 | |
Partnership | ||||||||||||||||
Class of Stock | ||||||||||||||||
Ownership interest (percent) | 43.00% | |||||||||||||||
Public Unitholders | Partnership | ||||||||||||||||
Class of Stock | ||||||||||||||||
Ownership interest (percent) | 57.00% | |||||||||||||||
Common Stock | ||||||||||||||||
Class of Stock | ||||||||||||||||
Shares issued (in shares) | shares | 21,656,683 | 57,634,005 | ||||||||||||||
Merger Transaction | ||||||||||||||||
Class of Stock | ||||||||||||||||
Amount of gain (loss) from merger | $ 0 | |||||||||||||||
Deferred tax assets resulting from merger | 156,000 | 156,000 | $ 156,000 | |||||||||||||
Deferred tax assets net | 52,200 | 52,200 | 52,200 | |||||||||||||
Deferred tax asset valuation allowances | 50,800 | $ 50,800 | 50,800 | |||||||||||||
Adjustments to additional paid in capital, deferred tax asset | $ 105,200 | |||||||||||||||
Merger-related costs | $ 500 | $ 10,200 | ||||||||||||||
Merger Transaction | Common Stock | ||||||||||||||||
Class of Stock | ||||||||||||||||
Shares issued (in shares) | shares | 57,600,000 | |||||||||||||||
Merger Transaction | Partnership | ||||||||||||||||
Class of Stock | ||||||||||||||||
Business acquisition, shares acquired (shares) | shares | 41,200,000 | |||||||||||||||
Fair value of equity consideration | $ 625,300 | |||||||||||||||
Merger Transaction | Partnership | Common Stock | ||||||||||||||||
Class of Stock | ||||||||||||||||
Share conversion rate (per share) | 1.40 |
Equity - Effects of Change in O
Equity - Effects of Change in Ownership (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | |||
Net income attributable to Archrock stockholders | $ (68,445) | $ 97,330 | $ 21,063 |
Increase in Archrock stockholders' additional paid-in capital for change in ownership of Partnership common units | 56,845 | ||
Increase from net income attributable to Archrock stockholders and transfers from noncontrolling interest | $ 77,908 |
Equity - Cash Dividends (Detail
Equity - Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 16, 2021 | Jan. 27, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Distributions | |||||||||||||||||
Declared Dividends per Common Share (in dollars per share) | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.132 | $ 0.120 | $ 0.120 | $ 0.580 | $ 0.554 | $ 0.504 | ||
Dividends Paid | $ 22,177 | $ 22,308 | $ 22,176 | $ 22,171 | $ 22,031 | $ 22,062 | $ 17,206 | $ 17,231 | $ 17,156 | $ 17,114 | $ 15,486 | $ 8,532 | $ 88,832 | $ 78,530 | $ 58,288 | ||
Subsequent Event | |||||||||||||||||
Distributions | |||||||||||||||||
Declared Dividends per Common Share (in dollars per share) | $ 0.145 | ||||||||||||||||
Dividends Paid | $ 22,200 |
Revenue from Contract with Cu_3
Revenue from Contract with Customers - Disaggregate Revenue (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)hpsegment | Dec. 31, 2019USD ($)hp | Dec. 31, 2018USD ($)hp | |
Disaggregation of Revenue | |||
Revenue | $ 874,970 | $ 965,485 | $ 904,441 |
Number of reportable segments | segment | 2 | ||
Contract Operations | |||
Disaggregation of Revenue | |||
Revenue | $ 738,918 | 771,539 | 672,536 |
Contract Operations | Transferred at Point in Time | |||
Disaggregation of Revenue | |||
Revenue | 5,600 | 7,900 | 6,600 |
Contract Operations | 0 - 1,000 horsepower per unit | |||
Disaggregation of Revenue | |||
Revenue | $ 224,702 | $ 259,985 | $ 241,810 |
Contract Operations | 0 - 1,000 horsepower per unit | Minimum | |||
Disaggregation of Revenue | |||
Compressor units horsepower (horsepower) | hp | 0 | 0 | 0 |
Contract Operations | 0 - 1,000 horsepower per unit | Maximum | |||
Disaggregation of Revenue | |||
Compressor units horsepower (horsepower) | hp | 1,000 | 1,000 | 1,000 |
Contract Operations | 1,001 - 1,500 horsepower per unit | |||
Disaggregation of Revenue | |||
Revenue | $ 305,185 | $ 316,082 | $ 276,775 |
Contract Operations | 1,001 - 1,500 horsepower per unit | Minimum | |||
Disaggregation of Revenue | |||
Compressor units horsepower (horsepower) | hp | 1,001 | 1,001 | 1,001 |
Contract Operations | 1,001 - 1,500 horsepower per unit | Maximum | |||
Disaggregation of Revenue | |||
Compressor units horsepower (horsepower) | hp | 1,500 | 1,500 | 1,500 |
Contract Operations | Over 1,500 horsepower per unit | |||
Disaggregation of Revenue | |||
Revenue | $ 206,749 | $ 191,510 | $ 149,783 |
Contract Operations | Over 1,500 horsepower per unit | Minimum | |||
Disaggregation of Revenue | |||
Compressor units horsepower (horsepower) | hp | 1,500 | 1,500 | 1,500 |
Contract Operations | Other | |||
Disaggregation of Revenue | |||
Revenue | $ 2,282 | $ 3,962 | $ 4,168 |
Aftermarket Services | |||
Disaggregation of Revenue | |||
Revenue | 136,052 | 193,946 | 231,905 |
Aftermarket Services | Services | |||
Disaggregation of Revenue | |||
Revenue | 79,012 | 122,076 | 142,476 |
Reversal of revenue due to change in estimate of performance obligation partially satisfied in prior periods | 900 | ||
Aftermarket Services | OTC parts and components sales | |||
Disaggregation of Revenue | |||
Revenue | $ 57,040 | $ 71,870 | $ 89,429 |
Revenue from Contract with Cu_4
Revenue from Contract with Customers - Performance Obligations (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 349,993 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 252,807 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 82,366 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 13,216 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 1,436 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations | $ 168 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue from Contract with Cu_5
Revenue from Contract with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue | |||
Accounts receivable, trade, net of allowance of $3,370 and $2,210, respectively | $ 104,425 | $ 144,865 | |
Contract liability with customer | 4,600 | 11,400 | |
Deferred revenue recognized in earnings | 19,489 | 42,268 | $ 28,428 |
Deferred revenue | 12,732 | 36,578 | $ 36,571 |
Contract with Customers | |||
Disaggregation of Revenue | |||
Accounts receivable, trade, net of allowance of $3,370 and $2,210, respectively | $ 95,600 | $ 139,400 |
Long-Lived Asset Impairment (De
Long-Lived Asset Impairment (Details) hp in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)CompressorUnithp | Dec. 31, 2019USD ($)CompressorUnithp | Dec. 31, 2018USD ($)CompressorUnithp | |
Impaired Long-Lived Assets Held and Used | |||
Other asset impairment | $ 1,700 | ||
Idle Compressor Units | |||
Impaired Long-Lived Assets Held and Used | |||
Idle compressor units retired from the active fleet (compressors) | CompressorUnit | 730 | 975 | 310 |
Horsepower of idle compressor units retired from the active fleet (horsepower) | hp | 261 | 170 | 115 |
Impairment recorded on idle compressor units retired from the active fleet (in dollars) | $ 77,590 | $ 44,663 | $ 28,127 |
Restructuring Charges - Changes
Restructuring Charges - Changes to accrued liability balance (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Changes to accrued liability balance related to restructuring | |
Balance at beginning of period | $ 0 |
Charges incurred | 8,450 |
Non-cash expense | (1,660) |
Payments | (6,589) |
Balance at end of period | 201 |
Organizational Restructuring | |
Restructuring charges | |
Estimated additional charges | 0 |
Changes to accrued liability balance related to restructuring | |
Balance at beginning of period | 0 |
Charges incurred | 1,695 |
Non-cash expense | (61) |
Payments | (1,634) |
Pandemic Restructuring | |
Changes to accrued liability balance related to restructuring | |
Balance at beginning of period | 0 |
Charges incurred | 5,257 |
Non-cash expense | (101) |
Payments | (4,955) |
Balance at end of period | 201 |
Property Restructuring | |
Changes to accrued liability balance related to restructuring | |
Balance at beginning of period | 0 |
Charges incurred | 1,498 |
Non-cash expense | (1,498) |
Loss on sale | 915 |
Impairment loss | $ 583 |
Restructuring Charges - By segm
Restructuring Charges - By segment (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Restructuring charges | |
Restructuring charges | $ 8,450 |
Organizational Restructuring | |
Restructuring charges | |
Restructuring charges | 1,695 |
Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | 5,257 |
Property Restructuring | |
Restructuring charges | |
Loss on sale | 915 |
Impairment loss | 583 |
Restructuring charges | 1,498 |
Corporate | |
Restructuring charges | |
Restructuring charges | 3,644 |
Corporate | Organizational Restructuring | |
Restructuring charges | |
Restructuring charges | 612 |
Corporate | Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | 1,534 |
Corporate | Property Restructuring | |
Restructuring charges | |
Loss on sale | 915 |
Impairment loss | 583 |
Restructuring charges | 1,498 |
Contract Operations | Operating Segments | |
Restructuring charges | |
Restructuring charges | 2,963 |
Contract Operations | Operating Segments | Organizational Restructuring | |
Restructuring charges | |
Restructuring charges | 458 |
Contract Operations | Operating Segments | Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | 2,505 |
Aftermarket Services | Operating Segments | |
Restructuring charges | |
Restructuring charges | 1,843 |
Aftermarket Services | Operating Segments | Organizational Restructuring | |
Restructuring charges | |
Restructuring charges | 625 |
Aftermarket Services | Operating Segments | Pandemic Restructuring | |
Restructuring charges | |
Restructuring charges | $ 1,218 |
Restructuring Charges - By type
Restructuring Charges - By type (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Restructuring charges | |
Charges incurred | $ 8,450 |
Organizational Restructuring | |
Restructuring charges | |
Charges incurred | 1,695 |
Pandemic Restructuring | |
Restructuring charges | |
Charges incurred | 5,257 |
Property Restructuring | |
Restructuring charges | |
Loss on sale | 915 |
Impairment loss | 583 |
Charges incurred | 1,498 |
Severance costs | |
Restructuring charges | |
Charges incurred | 6,952 |
Severance costs | Organizational Restructuring | |
Restructuring charges | |
Charges incurred | 1,695 |
Severance costs | Pandemic Restructuring | |
Restructuring charges | |
Charges incurred | 5,257 |
Property restructuring | Property Restructuring | |
Restructuring charges | |
Loss on sale | 915 |
Impairment loss | 583 |
Charges incurred | $ 1,498 |
Income Taxes Income Taxes - Cur
Income Taxes Income Taxes - Current and Deferred Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax provision (benefit): | |||
U.S. federal | $ (99) | $ 75 | |
State | 326 | 377 | $ 912 |
Total current | 227 | 452 | 912 |
Deferred tax provision (benefit): | |||
U.S. federal | (17,246) | (35,597) | 6,197 |
State | (518) | (4,000) | (959) |
Deferred Income Tax Expense (Benefit), Total | (17,764) | (39,597) | 5,238 |
Provision for (benefit from) income taxes | $ (17,537) | $ (39,145) | $ 6,150 |
Income Taxes Income Taxes - Rec
Income Taxes Income Taxes - Reconciliation of Effective Tax Rate to Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Effective income tax rate (as a percent) | 20.40% | (67.00%) | 17.40% |
U.S. statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
Effective Income Tax Rate Reconciliation | |||
Income taxes at U.S. federal statutory rate | $ (18,056) | $ 12,276 | $ 7,415 |
Net state income taxes | (817) | 1,634 | 1,570 |
Tax credits | (1,256) | (1,757) | (244) |
Noncontrolling interest | (1,793) | ||
Unrecognized tax benefits | 772 | (1,958) | (1,443) |
Valuation allowances and write off of tax attributes | 236 | (50,219) | (58) |
Executive compensation limitation | 1,159 | 1,102 | 977 |
Stock | 538 | 66 | (455) |
Other | (113) | (289) | 181 |
Provision for (benefit from) income taxes | $ (17,537) | $ (39,145) | $ 6,150 |
Income Taxes Income Taxes - Def
Income Taxes Income Taxes - Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 158,916 | $ 116,378 | |
Accrued liabilities | 3,133 | 3,486 | |
Other | 12,124 | 12,479 | |
Deferred Tax Assets Gross | 174,173 | 132,343 | |
Valuation allowances | (1,027) | (822) | |
Total deferred tax assets | 173,146 | 131,521 | |
Deferred tax liabilities: | |||
Property, plant and equipment | (6,066) | (6,440) | |
Basis difference in the Partnership | (103,721) | (81,645) | |
Other | (7,150) | (8,083) | |
Total deferred tax liabilities | (116,937) | (96,168) | |
Net deferred tax asset | 56,209 | 35,353 | |
Deferred tax assets | 56,934 | 36,642 | |
Deferred tax liabilities | $ 725 | $ 1,289 | |
U.S. statutory tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
Income Taxes Income Taxes - Tax
Income Taxes Income Taxes - Tax Attributes and Valuation Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | Apr. 30, 2018 | |
Operating Loss Carryforwards | ||||
Deferred tax assets net | $ 131,521 | $ 173,146 | ||
Valuation allowances | 822 | 1,027 | ||
Tax benefit from adjustments to valuation allowance | 50,200 | |||
Increase in deferred tax assets | 50,200 | |||
Domestic | ||||
Operating Loss Carryforwards | ||||
Operating loss carryforwards | 696,300 | |||
Operating loss carryforward not subject to expiration | 457,300 | |||
Tax credit carryforward | 2,500 | |||
State | ||||
Operating Loss Carryforwards | ||||
Operating loss carryforwards | 257,600 | |||
Operating loss carryforward not subject to expiration | 88,300 | |||
NOL valuation allowance | 800 | 1,000 | ||
Tax credit carryforward | $ 200 | |||
Net Operating Loss Carryforward | State | ||||
Operating Loss Carryforwards | ||||
Change in deferred tax asset valuation allowance | 600 | |||
Continuing Operations | ||||
Operating Loss Carryforwards | ||||
Increase in deferred tax assets | 44,600 | |||
Discontinued Operations | ||||
Operating Loss Carryforwards | ||||
Increase in deferred tax assets | 5,600 | |||
Merger Transaction | ||||
Operating Loss Carryforwards | ||||
Deferred tax assets resulting from merger | $ 156,000 | $ 156,000 | ||
Deferred tax assets net | 52,200 | 52,200 | ||
Valuation allowances | 50,800 | $ 50,800 | ||
Change in deferred tax asset valuation allowance | $ (50,800) | |||
Merger Transaction | Continuing Operations | ||||
Operating Loss Carryforwards | ||||
Deferred tax assets net | 46,600 | |||
Valuation allowances | 45,200 | |||
Merger Transaction | Discontinued Operations | ||||
Operating Loss Carryforwards | ||||
Deferred tax assets net | 5,600 | |||
Valuation allowances | $ 5,600 |
Income Taxes Income Taxes - Unr
Income Taxes Income Taxes - Unrecognized Tax Benefit Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of the unrecognized tax benefit | |||
Beginning balance | $ 18,453 | $ 19,560 | $ 21,400 |
Additions based on tax positions related to current year | 2,397 | 2,227 | 1,893 |
Additions based on tax positions related to prior years | 2,047 | 450 | |
Reductions based on settlement refunds from government authorities | (4,414) | (3,461) | |
Reductions based on tax positions related to prior years | (73) | (51) | (20) |
Reductions based on lapse of statute of limitations | (1,885) | (916) | (702) |
Ending balance | $ 18,892 | $ 18,453 | $ 19,560 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefit Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Income taxes | ||||
Unrecognized tax benefits | $ 18,892 | $ 18,453 | $ 19,560 | $ 21,400 |
Unrecognized tax benefits, Income tax penalties and interest accrued | 2,100 | 2,100 | 2,200 | |
Income tax interest and penalty expenses | $ (100) | (100) | 700 | |
Number of state audits | item | 2 | |||
Amount refunded | 2,400 | 1,700 | ||
Decrease in uncertain tax positions | 4,400 | 3,500 | ||
Potential decrease in unrecognized tax benefit | $ 2,700 | |||
Exterran Corporation | Spinoff | ||||
Income taxes | ||||
Indemnification asset | 7,868 | 8,508 | ||
Continuing Operations | ||||
Income taxes | ||||
Unrecognized tax benefits that would impact tax rate if recognized | 2,900 | 3,200 | 6,900 | |
Discontinued Operations | ||||
Income taxes | ||||
Unrecognized tax benefits that would impact tax rate if recognized | $ 7,900 | $ 8,300 | $ 6,900 |
Earnings Per Share - Net Income
Earnings Per Share - Net Income Attributable to Common Stockholders (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of net income attributable to Archrock common stockholders used in the calculation of basic and diluted income per common share | |||
Income (loss) from continuing operations attributable to Archrock stockholders | $ (68,445) | $ 97,603 | $ 21,063 |
Loss from discontinued operations, net of tax | (273) | ||
Net income (loss) attributable to Archrock stockholders | (68,445) | 97,330 | 21,063 |
Less: Earnings attributable to participating securities | (1,338) | (1,348) | (815) |
Net income (loss) attributable to Archrock common stockholders, basic | (69,783) | 95,982 | 20,248 |
Net income (loss) attributable to Archrock common stockholders, diluted | $ (69,783) | $ 95,982 | $ 20,248 |
Potential shares of common stock included in computing diluted income (loss) attributable to Archrock common stockholders | |||
Weighted average common shares outstanding including participating securities (in shares) | 152,827 | 139,317 | 110,843 |
Less: Weighted average participating securities outstanding (in shares) | (1,999) | (1,825) | (1,538) |
Weighted average common shares outstanding used in basic net income (loss) per common share (in shares) | 150,828 | 137,492 | 109,305 |
Weighted average common shares outstanding used in diluted net income (loss) per common share (in shares) | 150,828 | 137,528 | 109,421 |
On exercise of options and vesting of performance-based restricted stock units | |||
Potential shares of common stock included in computing diluted income (loss) attributable to Archrock common stockholders | |||
Net dilutive potential common shares issuable (in shares) | 34 | 111 | |
On settlement of ESPP | |||
Potential shares of common stock included in computing diluted income (loss) attributable to Archrock common stockholders | |||
Net dilutive potential common shares issuable (in shares) | 2 | 5 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Anti-dilutive effect of the calculation of net dilutive potential shares of common stock issuable | |||
Net dilutive potential common shares issuable (shares) | 167 | 154 | 195 |
On exercise of options where exercise price is greater than average market value for the period | |||
Anti-dilutive effect of the calculation of net dilutive potential shares of common stock issuable | |||
Net dilutive potential common shares issuable (shares) | 96 | 154 | 195 |
On exercise of options and vesting of performance-based restricted stock units | |||
Anti-dilutive effect of the calculation of net dilutive potential shares of common stock issuable | |||
Net dilutive potential common shares issuable (shares) | 54 | ||
On settlement of ESPP | |||
Anti-dilutive effect of the calculation of net dilutive potential shares of common stock issuable | |||
Net dilutive potential common shares issuable (shares) | 17 |
Derivatives - Interest Rate Swa
Derivatives - Interest Rate Swaps (Details) - Derivatives Designated as Hedging Instruments $ in Millions | Dec. 31, 2020USD ($) |
Interest Rate Swaps | |
Notional Disclosures | |
Deferred pre-tax losses to be reclassified during next 12 months | $ 4.8 |
Weighted average effective fixed interest rate on interest rate swaps (as a percent) | 1.80% |
Interest Rate Swaps, expiring March 2022 | |
Notional Disclosures | |
Notional amount of interest rate swaps | $ 300 |
Derivatives - Effect of Derivat
Derivatives - Effect of Derivative Instruments on Balance Sheets (Details) - Derivatives Designated as Hedging Instruments - Interest Rate Swaps - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivatives | ||
Derivative assets | $ 12 | |
Derivative liability | $ 6,337 | 1,768 |
Other current assets | ||
Derivatives | ||
Derivative assets | 12 | |
Accrued liabilities | ||
Derivatives | ||
Derivative liability | 4,810 | 593 |
Other liabilities | ||
Derivatives | ||
Derivative liability | $ 1,527 | $ 1,175 |
Derivatives - Effect of Deriv_2
Derivatives - Effect of Derivative Instruments on Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effect of derivative instruments on results of operations | |||
Total amount of interest expense in which the effects of cash flow hedges are recorded | $ 105,716 | $ 104,681 | $ 93,328 |
Interest Rate Swaps | |||
Effect of derivative instruments on results of operations | |||
Pre-tax gain (loss) recognized in other comprehensive income (loss) | (8,459) | (6,785) | 3,512 |
Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense | (3,878) | 2,278 | 617 |
Total amount of interest expense in which the effects of cash flow hedges are recorded | $ 105,716 | $ 104,681 | $ 93,328 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on Recurring Basis (Details) - Recurring Basis - Level 2 - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value measurement of assets and liabilities | ||
Derivative asset | $ 12 | |
Derivative liability | $ 6,337 | $ 1,768 |
Fair Value Measurements - Mea_2
Fair Value Measurements - Measured on Nonrecurring Basis (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)$ / hpY | Dec. 31, 2019USD ($) | |
Valuation of our interest rate swaps and impaired assets | |||
Goodwill impairment | $ 99,800 | $ 99,830 | |
Level 3 | Impaired Long-Lived Assets | Land and buildings | Measurement Input, Sales trends period | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | Y | 3 | ||
Level 3 | Impaired Long-Lived Assets | Land and buildings | Measurement Input, Sale proceeds | Minimum | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | 100 | ||
Level 3 | Impaired Long-Lived Assets | Land and buildings | Measurement Input, Sale proceeds | Maximum | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | 600 | ||
Level 3 | Impaired Long-Lived Assets | Land and buildings | Measurement Input, Sale proceeds | Weighted average | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | 427 | ||
Level 3 | Impaired Long-Lived Assets | Compressors | Measurement Input, Weighted average disposal period | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | Y | 4 | ||
Level 3 | Impaired Long-Lived Assets | Compressors | Measurement Input, Sale proceeds | Minimum | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | $ / hp | 0 | ||
Level 3 | Impaired Long-Lived Assets | Compressors | Measurement Input, Sale proceeds | Maximum | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | $ / hp | 289 | ||
Level 3 | Impaired Long-Lived Assets | Compressors | Measurement Input, Sale proceeds | Weighted average | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | $ / hp | 20 | ||
Level 3 | Impaired Long-Lived Assets | Compressors | Measurement Input, Discount for market liquidity | |||
Valuation of our interest rate swaps and impaired assets | |||
Measurement input | 0.81 | ||
Nonrecurring Basis | Level 3 | Impaired Long-Lived Assets | Land and buildings | |||
Valuation of our interest rate swaps and impaired assets | |||
Impaired assets | $ 430 | ||
Nonrecurring Basis | Level 3 | Impaired Long-Lived Assets | Compressors | |||
Valuation of our interest rate swaps and impaired assets | |||
Impaired assets | $ 19,046 | $ 5,859 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Debt (Details) - Fixed Rate Debt - Level 2 - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,371,000 | $ 1,400,000 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,295,867 | $ 1,329,549 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Total stock-based compensation expense | $ 12,072 | $ 10,441 | $ 8,484 |
Equity awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Total stock-based compensation expense | 10,551 | 8,105 | 7,388 |
Liability awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Total stock-based compensation expense | $ 1,521 | $ 2,336 | $ 1,096 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Incentive Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based payment awards | |||
Shares withheld to cover tax withholding (in shares) | 236,752 | 212,080 | 167,382 |
Shares withheld to cover tax withholding (in dollars) | $ 1,804 | $ 2,007 | $ 1,759 |
2020 Plan | |||
Stock-based payment awards | |||
Number of shares authorized for issuance | 8,500,000 | ||
Reduction in number of shares available for issuance for each stock-settled award granted | 1 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based payment awards | |||
Options granted (in shares) | 0 | 0 | 0 |
Stock Options | |||
Options outstanding at beginning of period (in shares) | 154 | ||
Options canceled (in shares) | (90) | ||
Options outstanding at end of period (in shares) | 64 | 154 | |
Options exercisable (in shares) | 64 | 154 | |
Weighted Average Exercise Price Per Share | |||
Options outstanding at beginning of period (in dollars per share) | $ 19.40 | ||
Options canceled (in dollars per share) | 15.32 | ||
Options outstanding at end of period (in dollars per share) | 25.18 | $ 19.40 | |
Options exercisable (in dollars per share) | $ 25.18 | $ 19.40 | |
Weighted Average Remaining Life | |||
Weighted average remaining life of outstanding options at end of period | 2 months 12 days | ||
Weighted average remaining life of exercisable options at end of period | 2 months 12 days | ||
Intrinsic value of options exercised during period (n dollars) | $ 0.8 | ||
Options exercised during period (in shares) | 0 | 0 | |
Options | |||
Stock-based payment awards | |||
Vesting period | 3 years | ||
Options | Maximum | |||
Stock-based payment awards | |||
Expiration period | 7 years | ||
Options | First anniversary vesting | |||
Stock-based payment awards | |||
Vesting percentage | 33.33% | ||
Vesting period | 1 year | ||
Options | Second anniversary vesting | |||
Stock-based payment awards | |||
Vesting percentage | 33.33% | ||
Vesting period | 1 year | ||
Options | Third anniversary vesting | |||
Stock-based payment awards | |||
Vesting percentage | 33.33% | ||
Vesting period | 1 year |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock, Restricted Stock Units, and Performance Units Narrative (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Performance-based restricted stock units | |
Stock-based payment awards | |
Dividend yield (as a percent) | 0.00% |
Performance-based restricted stock units, Market conditions | |
Stock-based payment awards | |
Vesting period | 3 years |
Restricted stock, restricted stock units, performance-based restricted stock units, cash-settled restricted stock units and cash-settled performance units | First anniversary vesting | |
Stock-based payment awards | |
Vesting percentage | 33.33% |
Vesting period | 1 year |
Restricted stock, restricted stock units, performance-based restricted stock units, cash-settled restricted stock units and cash-settled performance units | Second anniversary vesting | |
Stock-based payment awards | |
Vesting percentage | 33.33% |
Vesting period | 1 year |
Restricted stock, restricted stock units, performance-based restricted stock units, cash-settled restricted stock units and cash-settled performance units | Third anniversary vesting | |
Stock-based payment awards | |
Vesting percentage | 33.33% |
Vesting period | 1 year |
Stock-Based Compensation - Re_2
Stock-Based Compensation - Restricted Stock, Restricted Stock Units, and Performance Units Measurement Inputs (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||
Remaining performance period as of grant date (in years) | 2 years 10 months 24 days | 2 years 10 months 24 days | 2 years 9 months 18 days |
Risk-free interest rate (as a percent) | 1.40% | 2.60% | 2.40% |
Grant-date fair value (in dollars per share) | $ 11.33 | $ 12.91 | $ 13.46 |
Restricted stock, restricted stock units, performance-based restricted stock units, cash-settled restricted stock units and cash-settled performance units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||
Grant-date fair value (in dollars per share) | $ 9.37 | $ 10.01 | $ 9.66 |
Stock-Based Compensation - Re_3
Stock-Based Compensation - Restricted Stock, Restricted Stock Units, and Performance Units Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted stock, restricted stock units, performance-based restricted stock units, cash-settled restricted stock units and cash-settled performance units | |||
Shares | |||
Non-vested awards at beginning of period (in shares) | 2,022 | ||
Granted (in shares) | 1,467 | ||
Vested (in shares) | (933) | ||
Canceled (in shares) | (110) | ||
Non-vested awards at end of period (in shares) | 2,446 | 2,022 | |
Weighted Average Grant Date Fair Value Per Share | |||
Non-vested awards at beginning of period (in dollars per share) | $ 10.25 | ||
Granted (in dollars per share) | 9.37 | $ 10.01 | $ 9.66 |
Vested (in dollars per share) | 10.39 | ||
Canceled (in dollars per share) | 9.78 | ||
Non-vested awards at end of period (in dollars per share) | $ 9.69 | $ 10.25 | |
Fair value of vested shares (in dollars) | $ 7.1 | $ 9 | $ 8.2 |
Cash-settled restricted stock units and cash-settled performance units | |||
Shares | |||
Non-vested awards at end of period (in shares) | 454 | ||
Restricted stock, stock-settled restricted stock units and stock-settled performance-based restricted stock units | |||
Shares | |||
Non-vested awards at end of period (in shares) | 1,992 |
Stock-Based Compensation - Re_4
Stock-Based Compensation - Restricted Stock, Restricted Stock Units, and Performance Units Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash-settled restricted stock units | |||
Unrecognized compensation | |||
Payments for vested cash-settled shares | $ 0.5 | $ 1.3 | $ 1.1 |
Restricted stock, restricted stock units, performance-based restricted stock units, cash-settled restricted stock units and cash-settled performance units | |||
Unrecognized compensation | |||
Unrecognized compensation cost related to unvested awards (in dollars) | $ 13.7 | ||
Weighted-average period over which the expected unrecognized compensation cost related to unvested stock options will be recognized | 1 year 9 months 18 days |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Stock-based payment awards | |
Maximum annual contribution per employee | $ | $ 25,000 |
Maximum annual contribution per employee (as a percent) | 10.00% |
Number of shares authorized for issuance | 1,000,000 |
Remaining shares available for purchase | 611,707 |
Purchase discount rate | 5.00% |
Minimum | |
Stock-based payment awards | |
Purchase price of shares (as a percent of fair market value) | 85.00% |
Maximum | |
Stock-based payment awards | |
Purchase price of shares (as a percent of fair market value) | 100.00% |
Stock-Based Compensation - Dire
Stock-Based Compensation - Directors' Stock and Deferral Plan (Details) - Directors Stock And Deferral Plan - shares | Dec. 31, 2020 | Dec. 31, 2007 |
Stock-based payment awards | ||
Number of shares authorized for issuance | 100,000 | |
Remaining shares available for purchase | 37,771 |
Retirement Benefit Plan (Detail
Retirement Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | 42 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||||
Employer percentage match of employees contribution | 100.00% | |||
Employer maximum contribution as a percentage of gross pay | 5.00% | |||
Employer matching contributions for retirement plan (in dollars) | $ 5.6 | $ 6.8 | $ 6.5 |
Commitments and Contingencies -
Commitments and Contingencies - Performance Bonds (Details) $ in Millions | Dec. 31, 2020USD ($) |
Performance Bonds | |
Commitments and contingencies | |
Maximum potential undiscounted payments | $ 2.2 |
Commitments and Contingencies_2
Commitments and Contingencies - Tax Matters - Loss contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Non-income based tax audits | ||
Loss Contingencies [Line Items] | ||
Accrued liability for the outcomes of non-income based tax audits | $ 5.6 | $ 2.5 |
Non-income based tax audits being managed by Exterran Corporation | ||
Loss Contingencies [Line Items] | ||
Accrued liability for the outcomes of non-income based tax audits | $ 1.6 | $ 2.8 |
Commitments and Contingencies_3
Commitments and Contingencies - Tax Matters - Sales and use tax (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | |
Gain Contingencies [Line Items] | ||
Net benefit recorded from sales and use tax audit | $ 12.4 | |
Sales and use tax refund | $ 17.3 | |
Accrued liability related to sales and use tax audit settlement | $ 2 | |
Cost of sales excluding depreciation and amortization | ||
Gain Contingencies [Line Items] | ||
Net benefit recorded from sales and use tax audit | 4.4 | |
SG&A | ||
Gain Contingencies [Line Items] | ||
Net benefit recorded from sales and use tax audit | $ 7.9 |
Related Party Transactions (Det
Related Party Transactions (Details) shares in Millions, $ in Millions | Aug. 01, 2019shares | Aug. 31, 2019shares | Dec. 31, 2020USD ($)director | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
JDH Capital and affiliates of Hilcorp | |||||
Related Party Transaction | |||||
Number of directors shareholders have right to designate | director | 1 | ||||
Affiliated Entity | JDH Capital | Archrock, Inc. | |||||
Related Party Transaction | |||||
Ownership interest (percent) | 14.20% | ||||
Affiliated Entity | JDH Capital | Elite Acquisition | Common Stock | |||||
Related Party Transaction | |||||
Minimum ownership interest of outstanding shares required to elect a board of director (percent) | 7.50% | ||||
Affiliated Entity | Hilcorp | |||||
Related Party Transaction | |||||
Revenue from related party transactions | $ 40.3 | $ 31.4 | $ 12 | ||
Due from related party | 3.9 | 5.1 | |||
Affiliated Entity | Jeffery D. Hildebrand | Director | |||||
Related Party Transaction | |||||
Compensation paid by entity to individual in role as Director | 0 | $ 0 | |||
Affiliated Entity | Jason C. Rebrook | Director | |||||
Related Party Transaction | |||||
Compensation paid by entity to individual in role as Director | $ 0 | ||||
Elite Acquisition | Common Stock | |||||
Related Party Transaction | |||||
Shares issued as compensation for asset acquisition (shares) | shares | 21.7 | 21.7 | |||
Elite Acquisition | Affiliated Entity | JDH Capital | Common Stock | |||||
Related Party Transaction | |||||
Shares issued as compensation for asset acquisition (shares) | shares | 21.7 |
Segments - Concentrations (Deta
Segments - Concentrations (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Williams Partners | Customer Concentration Risk | Sales Revenue | |
Customers | |
Concentration risk (as a percent) | 11.00% |
Segments - Revenue and Gross Ma
Segments - Revenue and Gross Margin by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue and other financial information by reportable segment | |||
Revenue | $ 874,970 | $ 965,485 | $ 904,441 |
Gross margin | 497,777 | 509,247 | 440,074 |
Capital expenditures | 140,302 | 385,198 | 319,102 |
Contract Operations | |||
Revenue and other financial information by reportable segment | |||
Revenue | 738,918 | 771,539 | 672,536 |
Gross margin | 477,831 | 474,279 | 399,523 |
Aftermarket Services | |||
Revenue and other financial information by reportable segment | |||
Revenue | 136,052 | 193,946 | 231,905 |
Gross margin | 19,946 | 34,968 | 40,551 |
Operating Segments | |||
Revenue and other financial information by reportable segment | |||
Capital expenditures | 138,800 | 383,364 | 313,159 |
Operating Segments | Contract Operations | |||
Revenue and other financial information by reportable segment | |||
Capital expenditures | 133,492 | 374,650 | 307,048 |
Operating Segments | Aftermarket Services | |||
Revenue and other financial information by reportable segment | |||
Capital expenditures | 5,308 | 8,714 | 6,111 |
Corporate | |||
Revenue and other financial information by reportable segment | |||
Capital expenditures | $ 1,502 | $ 1,834 | $ 5,943 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Assets to Total Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets | ||
Assets | $ 2,779,722 | $ 3,109,975 |
Assets associated with discontinued operations | 11,036 | 12,901 |
Operating Segments | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | 2,639,849 | 2,983,556 |
Operating Segments | Contract Operations | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | 2,593,864 | 2,915,724 |
Operating Segments | Aftermarket Services | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | 45,985 | 67,832 |
Corporate | ||
Revenues from External Customers and Long-Lived Assets | ||
Assets | $ 128,837 | $ 113,518 |
Segments - Reconciliation of Ne
Segments - Reconciliation of Net Income to Gross Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation Net Income (Loss) to Gross Margin | ||||
Total gross margin | $ 497,777 | $ 509,247 | $ 440,074 | |
Less: | ||||
Selling, general and administrative | 105,100 | 117,727 | 101,563 | |
Depreciation and amortization | 193,138 | 188,084 | 174,946 | |
Long-lived and other asset impairment | 79,556 | 44,663 | 28,127 | |
Goodwill impairment | $ 99,800 | 99,830 | ||
Restatement and other charges | 445 | 19 | ||
Restructuring charges | 8,450 | |||
Interest expense | 105,716 | 104,681 | 93,328 | |
Debt extinguishment loss | 3,971 | 3,653 | 2,450 | |
Transaction-related costs | 8,213 | 10,162 | ||
(Gain) loss on sale of assets, net | (10,643) | (16,016) | (5,674) | |
Other income, net | (1,359) | (661) | (157) | |
Income (loss) before income taxes | $ (85,982) | $ 58,458 | $ 35,310 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Feb. 10, 2021CompressorUnit | Mar. 31, 2021USD ($) | Jun. 30, 2020 | Sep. 30, 2023 | Dec. 31, 2020USD ($) | Nov. 08, 2024 | Dec. 31, 2022 | Nov. 08, 2024 | Feb. 22, 2021USD ($) | Nov. 08, 2019USD ($) | Apr. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Feb. 28, 2018USD ($) |
Subsequent Events | |||||||||||||
Gain on sale | $ 12,475 | ||||||||||||
Credit Facility | |||||||||||||
Subsequent Events | |||||||||||||
Maximum borrowing capacity | $ 1,250,000 | $ 1,250,000 | $ 1,100,000 | ||||||||||
Senior Secured Debt to EBITDA | 3.5 | ||||||||||||
Total Debt to EBITDA ratio | 5.50 | ||||||||||||
Issuance costs | $ 6,400 | $ 3,300 | |||||||||||
Credit Facility | Forecast | |||||||||||||
Subsequent Events | |||||||||||||
Total Debt to EBITDA ratio | 5.25 | ||||||||||||
Credit Facility | Conditional Event | Forecast | |||||||||||||
Subsequent Events | |||||||||||||
Total Debt to EBITDA ratio | 5.50 | ||||||||||||
Letters of Credit, Credit Facility | |||||||||||||
Subsequent Events | |||||||||||||
Maximum borrowing capacity | $ 50,000 | $ 25,000 | |||||||||||
Swing Line Loans, Credit Facility | |||||||||||||
Subsequent Events | |||||||||||||
Maximum borrowing capacity | $ 50,000 | ||||||||||||
Subsequent Event | Credit Facility | |||||||||||||
Subsequent Events | |||||||||||||
Maximum borrowing capacity | $ 750,000 | ||||||||||||
Senior Secured Debt to EBITDA | 3 | ||||||||||||
Issuance costs | $ 1,800 | ||||||||||||
Subsequent Event | Credit Facility | Forecast | |||||||||||||
Subsequent Events | |||||||||||||
Total Debt to EBITDA ratio | 5.50 | 5.25 | 5.75 | ||||||||||
Subsequent Event | Credit Facility | Conditional Event | Forecast | |||||||||||||
Subsequent Events | |||||||||||||
Total Debt to EBITDA ratio | 5.50 | ||||||||||||
Subsequent Event | Disposed of by Sale, Not Discontinued Operations | February 2021 Disposition | |||||||||||||
Subsequent Events | |||||||||||||
Number of compressors | CompressorUnit | 300 | ||||||||||||
Compressor units horsepower (horsepower) | CompressorUnit | 40,000 | ||||||||||||
Subsequent Event | Disposed of by Sale, Not Discontinued Operations | February 2021 Disposition | Forecast | |||||||||||||
Subsequent Events | |||||||||||||
Gain on sale | $ 6,000 |
SCHEDULE II VALUATION AND QUA_2
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowance for credit losses applied to accounts receivable in the balance sheet - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Period | $ 2,210 | $ 1,452 | $ 1,794 |
Charged to Costs and Expenses | 3,525 | 2,567 | 1,677 |
Deductions(1) | 2,365 | 1,809 | 2,019 |
Balance at End of Period | $ 3,370 | $ 2,210 | $ 1,452 |