Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 15, 2023 | Jun. 30, 2022 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Commission File Number | 001-33666 | ||
Entity Registrant Name | Archrock, Inc | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 74-3204509 | ||
Entity Street Address | 9807 Katy Freeway | ||
Entity Suite Number | Suite 100 | ||
Entity City | Houston | ||
Entity State | TX | ||
Entity Postal Zip Code | 77024 | ||
City Area Code | 281 | ||
Local Phone Number | 836-8000 | ||
Title of each class | Common Stock | ||
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 | $ 1.1 | ||
Entity Common Stock, Shares Outstanding | 156,644,485 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the 2022 Meeting of Stockholders, which is expected to be filed with the Securities and Exchange Commission within 120 days after December 31, 2022, are incorporated by reference into Part III of this Form 10-K. | ||
Auditor Firm ID | 34 | ||
Auditor Name | DELOITTE & TOUCHE LLP | ||
Auditor Location | Houston, Texas | ||
Entity Central Index Key | 0001389050 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 1,566 | $ 1,569 |
Accounts receivable, net | 137,544 | 104,931 |
Inventory | 84,622 | 72,869 |
Other current assets | 8,228 | 7,201 |
Total current assets | 231,960 | 186,570 |
Property, plant and equipment, net | 2,199,253 | 2,226,526 |
Operating lease ROU asset | 16,706 | 17,491 |
Intangible assets, net | 37,077 | 47,887 |
Contract costs, net | 34,736 | 25,418 |
Deferred tax assets | 33,353 | 47,879 |
Other assets | 37,079 | 28,384 |
Assets of discontinued operations | 8,586 | 9,811 |
Total assets | 2,598,750 | 2,589,966 |
Current liabilities: | ||
Accounts payable | 64,324 | 38,920 |
Accrued liabilities | 76,915 | 82,517 |
Deferred revenue | 7,332 | 3,817 |
Total current liabilities | 148,571 | 125,254 |
Long-term debt | 1,548,334 | 1,530,825 |
Operating lease liabilities | 14,861 | 15,940 |
Deferred tax liabilities | 854 | 1,136 |
Other liabilities | 17,569 | 17,505 |
Liabilities of discontinued operations | 7,868 | 7,868 |
Total liabilities | 1,738,057 | 1,698,528 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred stock - $0.01 par value, 50,000,000 shares authorized, zero issued | ||
Common stock: $0.01 par value 250,000,000 shares authorized, 163,439,013 and 161,482,852 shares issued, respectively | 1,634 | 1,615 |
Additional paid-in capital | 3,456,777 | 3,440,059 |
Accumulated deficit | (2,509,133) | (2,463,114) |
Accumulated other comprehensive loss | (984) | |
Treasury stock: 7,810,548 and 7,417,401 common shares, at cost, respectively | (88,585) | (86,138) |
Total stockholders' equity | 860,693 | 891,438 |
Total liabilities and stockholders' equity | $ 2,598,750 | $ 2,589,966 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
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) | 163,439,013 | 161,482,852 |
Treasury stock, common shares (in shares) | 7,810,548 | 7,417,401 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | $ 845,568 | $ 781,461 | $ 874,970 |
Total cost of sales (excluding depreciation and amortization) | 419,484 | 358,917 | 377,193 |
Selling, general and administrative | 117,184 | 107,167 | 105,100 |
Depreciation and amortization | 164,259 | 178,946 | 193,138 |
Long-lived and other asset impairment | 21,442 | 21,397 | 79,556 |
Goodwill impairment | 99,830 | ||
Restructuring charges | 2,903 | 8,450 | |
Interest expense | 101,259 | 108,135 | 105,716 |
Debt extinguishment loss | 3,971 | ||
Gain on sale of assets, net | (40,494) | (30,258) | (10,643) |
Other expense (income), net | 1,845 | (4,707) | (1,359) |
Income (loss) before income taxes | 60,589 | 38,961 | (85,982) |
Provision for (benefit from) income taxes | 16,293 | 10,744 | (17,537) |
Net income (loss) | $ 44,296 | $ 28,217 | $ (68,445) |
Basic income (loss) per common share (in dollars per share) | $ 0.28 | $ 0.18 | $ (0.46) |
Diluted income (loss) per common share (in dollars per share) | $ 0.28 | $ 0.18 | $ (0.46) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 153,281 | 151,684 | 150,828 |
Diluted (in shares) | 153,410 | 151,830 | 150,828 |
Contract Operations | |||
Revenues | $ 677,801 | $ 648,311 | $ 738,918 |
Total cost of sales (excluding depreciation and amortization) | 278,898 | 244,486 | 261,087 |
Aftermarket Services | |||
Revenues | 167,767 | 133,150 | 136,052 |
Total cost of sales (excluding depreciation and amortization) | $ 140,586 | $ 114,431 | $ 116,106 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Comprehensive Income | |||
Net income (loss) | $ 44,296 | $ 28,217 | $ (68,445) |
Other comprehensive income (loss), net of tax: | |||
Interest rate swap gain (loss), net of reclassifications to earnings | 574 | 3,159 | (3,619) |
Amortization of dedesignated interest rate swap | 410 | 863 | |
Total other comprehensive income (loss), net of tax | 984 | 4,022 | (3,619) |
Comprehensive income (loss) | $ 45,280 | $ 32,239 | $ (72,064) |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock, Common | Cumulative Effect, Period of Adoption, Adjustment | Total |
Beginning balance at Dec. 31, 2019 | $ 1,587 | $ 3,412,509 | $ (2,244,877) | $ (1,387) | $ (81,869) | $ 1,085,963 | ||
Beginning balance (in shares) at Dec. 31, 2019 | 158,636,918 | |||||||
Treasury stock, common shares, Beginning balance (in shares) at Dec. 31, 2019 | (6,702,602) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Treasury stock purchased | $ (1,804) | $ (1,804) | ||||||
Treasury stock purchased (in shares) | (236,752) | (236,752) | ||||||
Cash dividends | (88,832) | $ (88,832) | ||||||
Shares issued in ESPP | $ 2 | 681 | 683 | |||||
Shares issued in ESPP (in shares) | 171,563 | |||||||
Stock-based compensation, net of forfeitures | $ 11 | 10,756 | 10,767 | |||||
Stock-based compensation, net of forfeitures (in shares) | 1,206,479 | (113,415) | ||||||
Shares issued for Elite acquisition | 678 | 678 | ||||||
Comprehensive income (loss) | ||||||||
Net income (loss) | (68,445) | (68,445) | ||||||
Other comprehensive income | (3,619) | (3,619) | ||||||
Ending balance at Dec. 31, 2020 | $ 1,600 | 3,424,624 | $ 166 | (2,401,988) | (5,006) | $ (83,673) | $ 166 | 935,557 |
Ending balance (in shares) at Dec. 31, 2020 | 160,014,960 | |||||||
Treasury stock, common shares, Ending balance (in shares) at Dec. 31, 2020 | (7,052,769) | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Treasury stock purchased | $ (2,465) | $ (2,465) | ||||||
Treasury stock purchased (in shares) | (283,972) | (283,972) | ||||||
Cash dividends | (89,343) | $ (89,343) | ||||||
Shares issued in ESPP | $ 1 | 712 | 713 | |||||
Shares issued in ESPP (in shares) | 89,988 | |||||||
Stock-based compensation, net of forfeitures | $ 10 | 11,326 | 11,336 | |||||
Stock-based compensation, net of forfeitures (in shares) | 1,020,756 | (80,660) | ||||||
Contribution from Exterran Corporation | $ 4 | 3,397 | 3,401 | |||||
Net proceeds from issuance of common stock (in shares) | 357,148 | |||||||
Comprehensive income (loss) | ||||||||
Net income (loss) | 28,217 | 28,217 | ||||||
Other comprehensive income | 4,022 | 4,022 | ||||||
Ending balance at Dec. 31, 2021 | $ 1,615 | 3,440,059 | (2,463,114) | (984) | $ (86,138) | $ 891,438 | ||
Ending balance (in shares) at Dec. 31, 2021 | 161,482,852 | |||||||
Treasury stock, common shares, Ending balance (in shares) at Dec. 31, 2021 | (7,417,401) | (7,417,401) | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Treasury stock purchased | $ (2,447) | $ (2,447) | ||||||
Treasury stock purchased (in shares) | (283,024) | (283,024) | ||||||
Cash dividends | (90,315) | $ (90,315) | ||||||
Shares issued in ESPP | $ 1 | 632 | 633 | |||||
Shares issued in ESPP (in shares) | 92,469 | |||||||
Stock-based compensation, net of forfeitures | $ 14 | 11,914 | 11,928 | |||||
Stock-based compensation, net of forfeitures (in shares) | 1,416,672 | (110,123) | ||||||
Net proceeds from issuance of common stock | $ 4 | 4,172 | 4,176 | |||||
Net proceeds from issuance of common stock (in shares) | 447,020 | |||||||
Comprehensive income (loss) | ||||||||
Net income (loss) | 44,296 | 44,296 | ||||||
Other comprehensive income | $ 984 | 984 | ||||||
Ending balance at Dec. 31, 2022 | $ 1,634 | $ 3,456,777 | $ (2,509,133) | $ (88,585) | $ 860,693 | |||
Ending balance (in shares) at Dec. 31, 2022 | 163,439,013 | |||||||
Treasury stock, common shares, Ending balance (in shares) at Dec. 31, 2022 | (7,810,548) | (7,810,548) |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Equity | |||||||||||||||
Dividend declared per common stock (in dollars per share) | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.58 | $ 0.58 | $ 0.58 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 44,296 | $ 28,217 | $ (68,445) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 164,259 | 178,946 | 193,138 |
Long-lived and other asset impairment | 21,442 | 21,397 | 79,556 |
Goodwill impairment | 99,830 | ||
Unrealized change in fair value of investment in unconsolidated affiliate | 1,864 | ||
Inventory write-downs | 1,640 | 997 | 1,349 |
Amortization of operating lease ROU asset | 3,206 | 3,880 | 3,477 |
Amortization of debt issuance costs | 5,152 | 10,127 | 5,554 |
Amortization of debt discount | 187 | ||
Amortization of debt premium | (2,006) | (2,006) | (84) |
Amortization of capitalized implementation costs | 1,984 | ||
Amortization of dedesignated interest rate swap | 410 | 863 | |
Debt extinguishment loss | 3,971 | ||
Interest rate swaps | 631 | 3,539 | 3,178 |
Stock-based compensation expense | 11,928 | 11,336 | 10,551 |
Non-cash restructuring charges | 1,660 | ||
Provision for (benefit) from credit losses | 206 | (90) | 3,525 |
(Gain) loss on sale of assets, net | (12,396) | (11,313) | 1,832 |
Gain on sale of business | (28,098) | (18,945) | (12,475) |
Deferred income tax provision (benefit) | 15,229 | 10,379 | (17,764) |
Amortization of contract costs | 19,162 | 19,990 | 26,629 |
Deferred revenue recognized in earnings | (20,956) | (10,382) | (19,489) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (19,971) | 4,445 | 36,395 |
Inventory | (10,520) | (12,989) | 3,972 |
Other assets | (2,653) | 635 | (5,797) |
Contract costs | (29,575) | (16,991) | (13,262) |
Accounts payable and other liabilities | 13,529 | 5,269 | (15,089) |
Deferred revenue | 24,642 | 10,217 | 12,732 |
Other | 45 | (121) | 147 |
Net cash provided by operating activities | 203,450 | 237,400 | 335,278 |
Cash flows from investing activities: | |||
Capital expenditures | (239,867) | (97,885) | (140,302) |
Proceeds from sale of business | 20,654 | 29,562 | 18,911 |
Proceeds from sale of property, equipment and other assets | 99,611 | 83,345 | 33,651 |
Proceeds from insurance and other settlements | 3,353 | 1,085 | 2,709 |
Investments in unconsolidated entities | (14,667) | ||
Net cash (used in) provided by investing activities | (130,916) | 16,107 | (85,031) |
Cash flows from financing activities: | |||
Borrowings of long-term debt | 826,733 | 704,751 | 1,049,000 |
Repayments of long-term debt | (809,983) | (863,251) | (1,204,375) |
Payments of debt issuance costs | (2,451) | (5,269) | |
Payments for settlement of interest rate swaps that include financing elements | (1,334) | (4,390) | (2,916) |
Dividends paid to stockholders | (90,315) | (89,343) | (88,832) |
Net proceeds from issuance of common stock | 4,176 | 3,401 | |
Proceeds from stock issued under ESPP | 633 | 713 | 683 |
Purchases of treasury stock | (2,447) | (2,465) | (1,804) |
Contribution from Exterran Corporation | 678 | ||
Net cash used in financing activities | (72,537) | (253,035) | (252,835) |
Net increase (decrease) in cash and cash equivalents | (3) | 472 | (2,588) |
Cash and cash equivalents, beginning of period | 1,569 | 1,097 | 3,685 |
Cash and cash equivalents, end of period | 1,566 | 1,569 | 1,097 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 98,406 | 100,002 | 99,797 |
Income taxes refunded (paid), net | (407) | (247) | (94) |
Supplemental disclosure of non-cash investing and financing transactions: | |||
Accrued capital expenditures | $ 9,899 | $ 7,641 | 1,624 |
Non-cash consideration received in sales of a business | $ 5,762 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2022 | |
DESCRIPTION OF BUSINESS | |
Description of Business | NOTE 1. DESCRIPTION OF BUSINESS We are an energy infrastructure company with a primary 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our consolidated financial statements include the accounts of Archrock and its wholly–owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Consolidated Financial Statements, all dollar and share amounts in tabulations are in thousands of dollars and shares, respectively, unless otherwise noted. 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 amounts of assets and liabilities, revenues and 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 sued are reasonable. Cash and Cash Equivalents We consider all highly–liquid investments purchased with an original maturity of three months or less to be cash equivalents. Accounts Receivable and Allowance for Credit Losses 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. Due to the short–term nature of our trade accounts receivable, we consider the amortized cost to be the same as the carrying value 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. 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. 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. Inventory Inventory consists of parts used for maintenance of natural gas compression equipment. Inventory is stated at the lower of cost and net realizable value using the average cost method. Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated using the straight–line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 to 5 years Other 3 to 10 years Major improvements that extend the useful life of an asset are capitalized and depreciated over the estimated useful life of the major improvement, up to seven years. Repairs and maintenance are expensed as incurred. Leases We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our consolidated financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. We recognize ROU assets and liabilities 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. For contract operations service agreements in which we are a lessor, as the services nonlease component is predominant over the compression package lease component, we do not account for these agreements as operating leases. Impairment of 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. 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. 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 is 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. 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. 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; therefore, our customers may be similarly affected by changes in economic and other conditions within the industry. We perform periodic evaluations of our customers’ financial condition, including monitoring our customers’ payment history and current credit worthiness to manage this risk. We generally do not obtain collateral for trade receivables, but we may require payment in advance. 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. During the years ended December 31, 2022, 2021 and 2020, no customers accounted for more than 10% of our consolidated revenues. Accounting Standard Update Implemented In December 2022, the FASB issued ASU No. 2022–06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848) No other new accounting pronouncements issued or effective during 2022 have had or are expected to have a material impact on our consolidated financial statements. |
DISPOSITIONS
DISPOSITIONS | 12 Months Ended |
Dec. 31, 2022 | |
DISPOSITIONS | |
DISPOSITIONS | NOTE 3. DISPOSITIONS During 2022, we completed sales of certain contract operations customer service agreements and approximately 770 compressors, comprising approximately 172,000 horsepower, used to provide compression services under those agreements, as well as other assets used to support the operations. We allocated customer–related and contract–based intangible assets based on a ratio of the horsepower sold relative to the total horsepower of the asset group. We recognized an aggregate gain of During 2021, we completed sales of certain contract operations customer service agreements and approximately 875 compressors, comprising approximately 140,000 horsepower, used to provide compression services under those agreements, as well as other assets used to support the operations. We allocated customer–related and contract–based intangible assets based on a ratio of the horsepower sold relative to the total horsepower of the asset group. We recognized an aggregate gain on the sales of $19.0 million. In July 2020, we completed the sale of the turbocharger business included within our aftermarket services segment two–year In March 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 2020. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | NOTE 4. ACCOUNTS RECEIVABLE, NET Accounts receivable, net is comprised of the following: December 31, 2022 2021 Customer related: Third party $ 110,636 $ 83,204 Related parties (1) 2,998 3,675 Other (2) 25,584 20,204 Accounts receivable 139,218 107,083 Allowance for credit losses (1,674) (2,152) Accounts receivable, net $ 137,544 $ 104,931 (1) See Note 27 for additional information. (2) Other receivables primarily consist of amounts due from the sale of used equipment. The changes in our allowance for credit losses are as follows: Year Ended December 31, 2022 2021 2020 Balance at January 1 $ 2,152 $ 3,370 $ 2,210 Impact of adoption of new accounting standard — — (216) Provision for credit losses 206 (90) 3,525 Write-offs charged against allowance (684) (1,128) (2,149) Balance at December 31 $ 1,674 $ 2,152 $ 3,370 |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORY | |
INVENTORY | NOTE 5. INVENTORY Inventory is comprised of the following: December 31, 2022 2021 Parts and supplies $ 70,228 $ 63,628 Work in progress 14,394 9,241 Inventory $ 84,622 $ 72,869 During the years ended December 31, 2022, 2021 and 2020 we recorded write–downs to inventory of $1.6 million, $1.0 million and $1.3 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 | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 6. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net is comprised of the following: December 31, 2022 2021 Compression equipment, facilities and other fleet assets $ 3,234,239 $ 3,273,770 Land and buildings 44,304 43,540 Transportation and shop equipment 93,189 92,490 Computer hardware and software 77,357 76,908 Other 5,754 6,229 Property, plant and equipment 3,454,843 3,492,937 Accumulated depreciation (1,255,590) (1,266,411) Property, plant and equipment, net $ 2,199,253 $ 2,226,526 Depreciation expense was $155.4 million, $167.6 million and $177.5 million during the years ended December 31, 2022, 2021 and 2020, respectively. Assets under construction of $ 92.5 million and $ 30.1 million at December 31, 2022 and 2021, respectively, primarily consisted of compression equipment, facilities and other fleet assets |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | NOTE 7. 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 ten years and most include options to extend the lease term, at our discretion, for an additional six months to ten years. We are not, however, reasonably certain that we will exercise any of the options to extend and as such, they have not been included in the remaining lease terms. Financial and other supplemental information related to our operating leases is as follows: December 31, Classification 2022 2021 ROU assets Operating lease ROU assets $ 16,706 $ 17,491 Lease liabilities Current Accrued liabilities $ 3,244 $ 2,940 Noncurrent Operating lease liabilities 14,861 15,940 Total lease liabilities $ 18,105 $ 18,880 Year Ended December 31, 2022 2021 2020 Operating lease cost $ 4,041 $ 4,836 $ 4,508 Short-term lease cost 447 169 52 Variable lease cost 1,802 2,123 1,652 Total lease cost $ 6,290 $ 7,128 $ 6,212 Year Ended December 31, 2022 2021 2020 Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 5,951 $ 6,568 $ 5,885 Operating lease ROU assets obtained in exchange for lease liabilities, net (1) 2,421 2,135 4,812 (3) Includes decreases to our ROU assets of $0.2 million and $0.6 million related to lease amendments and terminations during 2022 and 2021, respectively. December 31, 2022 2021 2020 Weighted average remaining lease term (in years) 6.7 7.2 7.9 Weighted average discount rate 4.7 % 4.6 % 4.8 % Remaining maturities of our lease liabilities as of December 31, 2022 are as follows: 2023 $ 3,719 2024 3,425 2025 2,846 2026 2,556 2027 2,374 Thereafter 6,486 Total lease payments 21,406 Less: Interest (3,301) Total lease liabilities $ 18,105 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, net | |
Intangible Assets, net | NOTE 8. INTANGIBLE ASSETS, NET Intangible assets include customer relationships associated with various business and asset acquisitions. These acquired intangible assets were recorded at fair value determined as of the date of acquisition and are being amortized over the period we expect to benefit from the assets. Intangible assets, net is comprised of the following: December 31, 2022 2021 Gross carrying amount $ 141,462 $ 144,322 Accumulated amortization (104,385) (96,435) Intangible assets, net $ 37,077 $ 47,887 Intangible assets are amortized on a straight–line basis with estimated useful lives ranging from 15 . Amortization expense was Estimated amortization expense for each of the subsequent five fiscal years is expected to be as follows: 2023 $ 6,890 2024 5,721 2025 3,595 2026 3,032 2027 2,157 Thereafter 15,682 Total $ 37,077 |
CONTRACT COSTS
CONTRACT COSTS | 12 Months Ended |
Dec. 31, 2022 | |
Contract Costs | |
Contract Costs | NOTE 9. CONTRACT COSTS We capitalize incremental costs to obtain a contract with a customer if we expect to recover those costs. Capitalized contract costs included commissions paid to our sales force to obtain contract operations contracts. As of December 31, 2022 and 2021, we had contract costs of $3.0 million and $2.6 million associated with sales commissions recorded in our consolidated balance sheets. We also 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 we expect to recover those costs. Contract 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. As of December 31, 2022 and 2021, we had contract costs of $31.7 million and $22.8 million associated with freight and mobilization recorded in our consolidated balance sheets. 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 a contract asset. These obtainment and fulfillment costs associated with our contract operations segment are amortized based on the transfer of service to which the assets relate, which is estimated to be 36 months based on average contract term, including anticipated renewals. We periodically assess whether the 36–month estimate fairly represents the average contract term and adjust as appropriate. Costs associated with sales commissions in our aftermarket services segment are expensed when paid, as the amortization period is less than one year . 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 a contract asset. Costs associated with sales commissions in our contract operations segment are amortized to SG&A. During the years ended December 31, 2022, 2021 and 2020, we amortized $1.9 million, $2.2 million and $3.0 million, respectively, related to sales commissions. Contract costs associated with freight and mobilization are amortized to costs of sales (excluding depreciation and amortization). During the years ended December 31, 2022, 2021 and 2020, we amortized $17.3 million, $17.8 million and $23.6 million, respectively, related to freight and mobilization. |
HOSTING ARRANGEMENTS
HOSTING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
HOSTING ARRANGEMENTS | |
Hosting Arrangements | NOTE 10. HOSTING ARRANGEMENTS We have hosting arrangements that are service contracts for cloud applications including our ERP, mobile workforce, telematics and inventory management tools. Capitalized implementation costs and accumulated amortization related to our hosting arrangements that are service contracts are as follows: December 31, 2022 2021 Hosting arrangements $ 15,675 $ 12,674 Accumulated amortization (2,637) (653) Hosting arrangements, net $ 13,038 $ 12,021 These costs are included in other assets in our consolidated balance sheets. Amortization expense, which is recorded in SG&A in our consolidated statements of operations, was $2.0 million, $0.3 million and $0.3 million during the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2020, we impaired $1.7 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 |
INVESTMENT IN UNCONSOLIDATED AF
INVESTMENT IN UNCONSOLIDATED AFFILIATE | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENT IN UNCONSOLIDATED AFFILIATE | |
INVESTMENT IN UNCONSOLIDATED AFFILIATE | NOTE 11. INVESTMENT IN UNCONSOLIDATED AFFILIATE Investments in which we are deemed to exert significant influence, but not control, are accounted for using the equity method of accounting, except in cases where the fair value option is elected. For such investments where we have elected the fair value option, the election is irrevocable and is applied on an investment–by–investment basis at initial recognition. In April 2022, we agreed to acquire for cash a 25% equity interest in ECOTEC, a company specializing in methane emissions detection, monitoring and management. We have elected the fair value option to account for this investment, and during the year ended December 31, 2022, we recognized an unrealized loss of $1.9 million related to the change in fair value of our investment (see Note 25). Changes in the fair value of this investment are recognized in other (income) expense, net in our consolidated statements of operations. As of December 31, 2022, our ownership interest in ECOTEC is |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities | |
Accrued Liabilities | NOTE 12. ACCRUED LIABILITIES Accrued liabilities are comprised of the following: December 31, 2022 2021 Accrued salaries and other benefits $ 22,288 $ 20,891 Accrued income and other taxes 10,108 9,957 Accrued interest 22,380 22,368 Derivative liability — 1,250 Other accrued liabilities 22,139 28,051 Accrued liabilities $ 76,915 $ 82,517 |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
CONTRACT LIABILITIES | |
CONTRACT LIABILITIES | NOTE 13. CONTRACT LIABILITIES As of December 31, 2022 and 2021, our contract liabilities were $8.0 million and $4.4 million, respectively. These liabilities are included in deferred revenue and other liabilities in our consolidated balance sheets. We deferred revenue of $24.6 million and $10.2 million, respectively, and recognized $21.0 million and $10.4 million, respectively, as revenue during the years ended December 31, 2022 and 2021, respectively. The revenue recognized and deferred during the periods primarily related to freight billings and milestone billings on aftermarket services. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | NOTE 14. LONG–TERM DEBT Long–term debt is comprised of the following: December 31, 2022 2021 Credit facility $ 251,250 $ 234,500 6.25% senior notes due April 2028: Principal outstanding 800,000 800,000 Unamortized debt premium 10,530 12,536 Unamortized debt issuance costs (8,744) (10,406) 801,786 802,130 6.875% senior notes due April 2027: Principal outstanding 500,000 500,000 Unamortized debt issuance costs (4,702) (5,805) 495,298 494,195 Long-term debt $ 1,548,334 $ 1,530,825 Credit Facility As of December 31, 2022, our Credit Facility has an aggregate borrowing commitment of $750.0 million and will expire in November 2024 unless renewed or amended prior to that date. Subject to certain conditions, including approval by the lenders, we are able to increase the aggregate commitments under the Credit Facility by up to an additional 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 certain of our subsidiaries. Borrowings under the Credit Facility bear interest at, based on our election, either a base rate or LIBOR, plus an applicable margin. The base rate is the highest of (i) the prime rate announced by JPMorgan Chase Bank, (ii) the Federal Funds Effective Rate plus Additionally, we are required to pay commitment fees based on the daily unused amount of the Credit Facility at a rate of 0.375%. We incurred $1.9 million, $2.0 million and $2.0 million in commitment fees during 2022, 2021 and 2020, respectively. As a result of the facility’s ratio requirements, $487.6 million of the $493.0 million of undrawn capacity was available for additional borrowings as of December 31, 2022. As of December 31, 2022, 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 3.0 to 1.0 Total Debt to EBITDA 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. In addition to the financial covenants discussed above, 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, 2022, we were in compliance with all covenants under our Credit Facility agreement. 2027 Notes and 2028 Notes Our 2027 Notes were issued under an indenture dated March 21, 2019 and mature on April 1, 2027. The notes were issued in a private offering at 100% of their face value and have an effective interest rate of 7.9% . We received net proceeds of Our 2028 Notes were issued under an indenture dated December 20, 2019 and mature on April 1, 2028. The 2028 Notes were issued in 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 Archrock Partners 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. Maturities of Long–Term Debt As of December 31, 2022, the maturities of our long–term debt, excluding interest to be accrued, are as follows: 2023 $ — 2024 251,250 2025 — 2026 — 2027 495,298 Thereafter 801,786 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 15. COMMITMENTS AND CONTINGENCIES Insurance Matters Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability and commercial automobile liability and other coverage we believe is appropriate. We believe that our insurance coverage is customary for the industry and adequate for our business, however, losses and liabilities not covered by insurance would increase our costs. Additionally, we are substantially self–insured for workers’ compensation and employee group health claims in view of the relatively high per–incident deductibles we absorb under our insurance arrangements for these risks. Losses up to the deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. We are also self–insured for property damage to our offshore assets. In August 2021, Hurricane Ida made landfall in Louisiana, causing operational disruptions, damage to compressors and a temporary shutdown of facilities in Louisiana that negatively impacted our financial performance in the quarter. As of December 31, 2021, we had an insurance recovery of $2.8 million related to the facility and compressor damages, which we received in cash 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, 2022 and 2021, we accrued $3.9 million and $5.8 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. During the years ended December 31, 2022 and 2021, certain of our sales and use tax audits advanced from the audit review phase to the contested hearing phase. As of both December 31, 2022 and 2021, we accrued $0.6 million for these audits. In 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 related to this settlement and have a $2.0 million accrued liability recorded as of December 31, 2022, which is included in our accrual for non–income–based tax audits discussed above. 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. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 16. STOCKHOLDERS’ EQUITY At–the–Market Continuous Equity Offering Program In February 2021, we entered into the ATM Agreement, pursuant to which we may offer and sell shares of our common stock from time to time for an aggregate offering price of up to $50.0 million. We use the net proceeds of these offerings, after deducting sales agent fees and offering expenses, for general corporate purposes. Offerings of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all shares of common stock subject to the ATM Agreement or (ii) the termination of the ATM Agreement by us or by each of the sales agents. Any sales agent may also terminate the ATM Agreement but only with respect to itself. During the years ended December 31, 2022 and 2021, we sold 447,020 and 357,148 shares of common stock, respectively, for net proceeds of $4.2 million and $3.4 million, respectively, pursuant to the ATM Agreement. Cash Dividends The following table summarizes our dividends declared and paid in each of the quarterly periods of 2022, 2021 and 2020: Dividends per Common Share Dividends Paid 2022 Q4 $ 0.145 $ 22,589 Q3 0.145 22,559 Q2 0.145 22,494 Q1 0.145 22,673 2021 Q4 $ 0.145 $ 22,351 Q3 0.145 22,506 Q2 0.145 22,331 Q1 0.145 22,155 2020 Q4 $ 0.145 $ 22,177 Q3 0.145 22,308 Q2 0.145 22,176 Q1 0.145 22,171 On January 26, 2023, our Board of Directors declared a quarterly dividend of $0.15 per share of common stock, or approximately $23.6 million, which was paid on February 14, 2023 to stockholders of record at the close of business on February 7, 2023. Accumulated Other Comprehensive Loss Components of comprehensive income (loss) are net income (loss) and all changes in equity during a period except those resulting from transactions with owners. Our accumulated other comprehensive loss consists of changes in the fair value of our interest rate swap derivative instruments, net of tax. See Note 24 for further details on our interest rate swap derivative instruments. The following table presents the changes in accumulated other comprehensive loss, net of tax: Year Ended December 31, 2022 2021 2020 Beginning accumulated other comprehensive loss $ (984) $ (5,006) $ (1,387) Other comprehensive income (loss), net of tax: Loss recognized in other comprehensive income (405) (962) (6,683) Loss reclassified from accumulated other comprehensive loss to interest expense 1,389 4,984 3,064 Total other comprehensive income (loss) 984 4,022 (3,619) Ending accumulated other comprehensive loss $ — $ (984) $ (5,006) |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 17. REVENUE FROM CONTRACTS WITH CUSTOMERS The following table presents our revenue from contracts with customers by segment (see Note 28) and disaggregated by revenue source: Year Ended December 31, 2022 2021 2020 Contract operations: 0 ― 1,000 horsepower per unit $ 159,140 $ 175,457 $ 224,702 1,001 ― 1,500 horsepower per unit 285,758 267,191 305,185 Over 1,500 horsepower per unit 231,923 204,893 206,749 Other (1) 980 770 2,282 Total contract operations revenue (2) 677,801 648,311 738,918 Aftermarket services: Services 88,728 69,876 79,012 OTC parts and components sales 79,039 63,274 57,040 Total aftermarket services revenue (3) 167,767 133,150 136,052 Total revenue $ 845,568 $ 781,461 $ 874,970 (1) Primarily relates to fees associated with owned non–compression equipment. (2) Includes $3.2 million, $4.0 million and $5.6 million during the years ended December 31, 2022, 2021 and 2020, respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time. (3) Services revenue within aftermarket services is recognized over time. OTC parts and components sales revenue is recognized at a point in time. Performance Obligations As of December 31, 2022, we had $310.5 million of remaining performance obligations related to our contract operations segment, which will be recognized through 2027 as follows: 2023 2024 2025 2026 2027 Total Remaining performance obligations $ 205,999 $ 67,137 $ 32,096 $ 4,067 $ 1,151 $ 310,450 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. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 18. STOCK–BASED COMPENSATION The 2020 Plan and the 2013 Plan both provide 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 our employees, directors and consultants. 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. As of December 31, 2022, the maximum number of shares of common stock available for issuance under the 2020 Plan is 8,500,000, and 5.9 million shares remain available for grant. 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. Our policy is to issue new shares when restricted stock units and performance–based restricted stock units are vested. We account for forfeitures as they occur. Both the 2020 Plan and the 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, 2022, 2021 and 2020, we withheld Restricted Stock Awards and Performance–Based Restricted Stock Units Grants of restricted stock are subject to forfeiture, restrictions on transfer and certain other conditions until vesting, which generally occurs in three equal installments following the date of grant. Compensation expense is recognized over the vesting period equal to the fair value of our common stock at the grant date. Our restricted stock includes rights to receive dividends or dividend equivalents. Grants of performance–based restricted stock units are three –year equity settled awards linked to the performance of our common stock. The awards also include dividend equivalent rights that accumulate during the vesting period. The vesting of the performance–based restricted stock units is dependent of the satisfaction of a combination of certain service–related conditions and our total shareholder return ranked against that of a predetermined peer group over a three –year 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 assumptions that were used to estimate the fair value of our performance–based stock units are as follows: Year Ended December 31, 2022 2021 2020 Remaining performance period as of grant date (in years) 2.9 2.8 2.9 Risk-free interest rate used 1.4 % 0.3 % 1.4 % Grant-date fair value $ 11.96 $ 14.30 $ 11.33 Activity related to our restricted stock and performance–based restricted stock units is as follows: Weighted Average Grant Date Fair Value Shares Per Share Non-vested restricted stock and performance-based restricted stock units, December 31, 2021 2,055 $ 10.38 Granted 1,599 8.97 Vested (1,071) 9.78 Canceled (110) 9.09 Non-vested restricted stock and performance-based restricted stock units, December 31, 2022 2,473 $ 9.79 The grant date fair value of the restricted stock and performance–based restricted stock units granted during the years ended December 31, 2022, 2021 and 2020 was $14.3 million, $12.1 million and $11.9 million, respectively. The fair value of the restricted stock and performance–based restricted stock units vested during the years ended December 31, 2022, 2021 and 2020 was As of December 31, 2022, we expect $12.7 million of unrecognized compensation cost related to our non–vested restricted stock and performance–based restricted stock units to be recognized over the weighted–average period of 1.8 years. Cash Settled Performance Units Grants of cash–settled performance units vest at the end of the three year vesting period and are payable in an amount of cash equivalent to the value of our common stock at the vesting date for each unit vested. These awards are subject to one of more performance conditions and are accounted for as liability awards with expense based on the fair value measured at the end of each reporting period. These awards also include dividend equivalent rights that accumulated during the vesting period. At the end of each reporting period, the Compensation Committee of our Board of Directors approves the determination of achievement for each performance measure, which can range from . Activity related to our cash–settled performance units is as follows: Weighted Average Grant Date Fair Value Shares Per Share Non-vested cash-settled performance units, December 31, 2021 523 $ 10.22 Granted 262 9.38 Vested (139) 12.91 Canceled (137) 9.42 Non-vested cash-settled performance units, December 31, 2022 509 $ 9.27 The grant date fair value of the cash settled performance units granted during the years ended December 31, 2022, 2021 and 2020 was $2.5 million, $2.3 million and $1.8 million, respectively. Cash paid upon vesting of these cash settled performance units during the years ended December 31, 2022, 2021 and 2020 was As of December 31, 2022, we expect $3.0 million of unrecognized compensation cost related to our non–vested liability awards to be recognized over the weighted–average period of 1.9 years. Employee Stock Purchase Plan 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 of the fair market value of our common stock on the first or last trading day of the quarter, whichever is lesser. Our ESPP is compensatory and, as a result, we record an expense in our consolidated statements of operations related to the ESPP. 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 1.0 million. As of December 31, 2022, 429,250 shares remained available for purchase under the ESPP. Directors’ Stock and Deferral Plan 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. In this case, we issue restricted stock units and the rights to receive dividends or dividend equivalents is accrued and paid when the shares are issued. There are 100,000 shares reserved under the DSDP and, as of December 31, 2022, 37,771 shares remained available to be issued under the plan. Stock–Based Compensation Expense Stock–based compensation expense is as follows: Year Ended December 31, 2022 2021 2020 Equity award expense $ 11,928 $ 11,336 $ 10,551 Liability award expense (1) 2,569 (816) 1,521 Total stock-based compensation expense $ 14,497 $ 10,520 $ 12,072 (1) In 2021, we reversed a prior period expense of $2.1 million as the result of revised estimates of performance achievement of our 2020 and 2019 cash–settled performance–based restricted stock units. |
RETIREMENT BENEFIT PLAN
RETIREMENT BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefit Plan | |
Retirement Benefit Plan | NOTE 19. RETIREMENT BENEFIT PLAN Our 401(k) retirement plan provides for optional employee contributions up to the applicable IRS 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 $4.9 million, $4.4 million and $5.6 million during the years ended December 31, 2022, 2021 and 2020, respectively. |
LONG-LIVED AND OTHER ASSET IMPA
LONG-LIVED AND OTHER ASSET IMPAIRMENT | 12 Months Ended |
Dec. 31, 2022 | |
LONG-LIVED AND OTHER ASSET IMPAIRMENT | |
Long-Lived and Other Asset Impairment | NOTE 20. LONG–LIVED AND OTHER ASSET IMPAIRMENT 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: Year Ended December 31, 2022 2021 2020 Idle compressors retired from the active fleet 145 230 730 Horsepower of idle compressors retired from the active fleet 100,000 85,000 261,000 Impairment recorded on idle compressors retired from the active fleet $ 21,431 $ 21,208 $ 77,590 Goodwill 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 goodwill impairment loss of $99.8 million during the first quarter of 2020. 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 process and technology transformation project was impaired. See Note 10 for further details. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring Charges | |
Restructuring Charges | NOTE 21. RESTRUCTURING CHARGES In response to the decreased activity level of our customers that resulted from the COVID–19 pandemic, we recorded pandemic restructuring charges for severance costs of $1.7 million and $5.3 million during the years ended December 31, 2021 and 2020, respectively. We do not expect to incur additional material costs under this restructuring plan. During the year ended December 31, 2021, management approved and initiated a plan to exit a facility no longer deemed economical for our business, and we incurred $0.9 million of costs to complete the exit of the facility. We do not expect to incur additional material costs under this restructuring plan. During the year ended December 31, 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 of million related to these activities during the first quarter of 2020. additional costs will be incurred for this organizational restructuring. Management also approved a plan to dispose of certain non–core properties, and we incurred The following table presents restructuring charges incurred by segment: Contract Aftermarket Operations Services Other Total 2021 Pandemic restructuring $ 616 $ 145 $ 956 $ 1,717 2021 property restructuring 929 — — 929 2020 property restructuring — — 35 35 Other restructuring — — 222 222 Total restructuring charges $ 1,545 $ 145 $ 1,213 $ 2,903 2020 Organizational restructuring $ 458 $ 625 $ 612 $ 1,695 Pandemic restructuring 2,505 1,218 1,534 5,257 2020 property restructuring Loss on sale — — 915 915 Impairment loss — — 583 583 Total restructuring charges $ 2,963 $ 1,843 $ 3,644 $ 8,450 The following table presents restructuring charges incurred by cost type: Year Ended December 31, 2021 2020 Severance costs Organizational restructuring $ — $ 1,695 Pandemic restructuring 1,717 5,257 Total severance costs 1,717 6,952 Property disposal costs: Loss on sale — 915 Impairment loss — 583 Other exit costs 964 — Total property disposal costs 964 1,498 Other restructuring costs 222 — Total restructuring charges $ 2,903 $ 8,450 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 22. INCOME TAXES Current and Deferred Tax Provision Our provision for (benefit from) income taxes consisted of the following: Year Ended December 31, 2022 2021 2020 Current tax provision (benefit): U.S. federal $ — $ (1) $ (99) State 1,064 366 326 Total current 1,064 365 227 Deferred tax provision (benefit): U.S. federal 14,320 8,800 (17,246) State 909 1,579 (518) Total deferred 15,229 10,379 (17,764) Provision for (benefit from) income taxes $ 16,293 $ 10,744 $ (17,537) The provision for (benefit from) income taxes for the years ended December 31, 2022, 2021 and 2020 resulted in effective tax rates of 27%, 28% and 20% , respectively. The reconciliation of these effective tax rates to the U.S. statutory rate of Year Ended December 31, 2022 2021 2020 Income taxes at U.S. federal statutory rate $ 12,724 $ 8,182 $ (18,056) Net state income taxes 1,795 1,374 (817) Tax credits (26) (720) (1,256) Unrecognized tax benefits (1) 17 598 772 Valuation allowances and write off of tax attributes (2) (68) (167) 236 Executive compensation limitation 1,901 1,559 1,159 Stock 152 162 538 Other (202) (244) (113) Provision for (benefit from) income taxes $ 16,293 $ 10,744 $ (17,537) (1) Includes the expiration of statute of limitations. See “Unrecognized Tax Benefits” below for further details. (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 our temporary differences that gave rise to deferred tax assets and deferred tax liabilities were as follows: December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 191,916 $ 196,654 Interest expense limitation carryforward 19,327 — Accrued liabilities 4,979 4,527 Other 12,834 12,503 229,056 213,684 Valuation allowances (1) (607) (735) Total deferred tax assets 228,449 212,949 Deferred tax liabilities: Property, plant and equipment (8,386) (7,762) Basis difference in the Partnership (181,377) (151,469) Other (6,187) (6,975) Total deferred tax liabilities (195,950) (166,206) Net deferred tax asset (2) $ 32,499 $ 46,743 (1) See “Tax Attributes and Valuation Allowances” below for further details. (2) The 2022 net deferred tax assets are reflected in our consolidated balance sheets as deferred tax assets of $33.4 million and $47.9 million, respectively, and deferred tax liabilities of $0.9 million and $1.1 million, respectively. Both the 2022 and 2021 balances are based on a U.S. federal tax rate of 21%. Tax Attributes and Valuation Allowances Changes in our valuation allowance are as follows: Year Ended December 31, 2022 2021 2020 Balance at beginning of period $ (735) $ (1,027) $ (822) Additions to valuation allowance (88) — (205) Reductions to valuation allowance 216 292 — Balance at end of period $ (607) $ (735) $ (1,027) 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. 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 a 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. 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, interest expense limitation and tax credit carryforwards. This may result in the need to record a valuation allowance against all or a portion of our deferred tax assets. At December 31, 2022, we had U.S. federal and state NOL carryforwards of $848.5 million and $314.8 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 2029 and 2023, respectively, though $629.2 million of the U.S. federal and $169.9 million of the state NOL carryforwards have no expiration date. In connection with the state NOL deferred tax asset, we recorded a valuation allowance of $0.6 million and $0.7 million as of December 31, 2022 and 2021, respectively. At December 31, 2022, we had a U.S. federal tax credit carryforward of $3.0 million. If not used, the federal tax credit carryforward will begin to expire in 2037. As of December 31, 2022, we had U.S. federal and state interest expense limitation carryforwards of $86.4 million and $26.5 million, respectively, included in our interest expense limitation deferred tax asset that are available to offset future taxable income. These carryforwards have no expiration. Unrecognized Tax Benefits Changes in our unrecognized tax benefits (including discontinued operations) are as follows: Year Ended December 31, 2022 2021 2020 Beginning balance $ 19,594 $ 18,892 $ 18,453 Additions based on tax positions related to current year 2,151 2,246 2,397 Additions based on tax positions related to prior years 6 632 — Reductions based on tax positions related to prior years (105) (138) (73) Reductions based on lapse of statute of limitations (1,995) (2,038) (1,885) Ending balance $ 19,651 $ 19,594 $ 18,892 We had $19.7 million, $19.6 million and $18.9 million of unrecognized tax benefits at December 31, 2022, 2021 and 2020, respectively, of which $1.1 million, $2.1 million and $2.9 million, respectively, would affect the effective tax rate if recognized and $7.9 million, $7.9 million and $7.9 million, respectively, would be reflected in income from discontinued operations, net of tax if recognized. We recorded $2.1 million, $2.2 million and $2.1 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, 2022, 2021 and 2020, 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. We recorded no potential expenses or releases of interest or penalties in our consolidated statements of operations during 2022, $0.1 million of potential interest expense and penalties during 2021, and releases of $0.1 million during 2020. 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 both December 31, 2022 and 2021, we recorded an indemnification asset (including penalties and interest) of $7.9 million, which is related to unrecognized tax benefits in our consolidated balance sheets (see Note 26). 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 not currently involved in any state audits. As of December 31, 2022, we believe it is reasonably possible that $2.7 million of our unrecognized tax benefits, including penalties, interest and discontinued operations, will be reduced prior to December 31, 2023 due to the settlement of audits or the expiration of statutes of limitations or both. However, due to the uncertain and complex application of the tax regulations, it is possible that the ultimate resolution of these matters may result in liabilities that could materially differ from this estimate. Impact of New Legislation On August 16, 2022, President Biden signed into law the Inflation Reduction Act (Public Law Number 117–169). The legislation is expected to have an immaterial impact to our effective tax rate. |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER COMMON SHARE | |
EARNINGS PER COMMON SHARE | NOTE 23. NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is computed using the two–class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two–class method, basic net income (loss) per common share is determined by dividing net income (loss), after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock–settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, only distributed earnings (dividends) are allocated to participating securities, as participating securities do not have a contractual obligation to participate in our undistributed losses. Diluted net income (loss) per common share is computed using the weighted average number of shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options, performance–based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would be anti–dilutive. The following table shows the calculations for net income (loss) attributable to common stockholders and potential shares of common stock, which is used in the calculation of basic and diluted net income (loss) per common share: Year Ended December 31, 2022 2021 2020 Net income (loss) $ 44,296 $ 28,217 $ (68,445) Allocation of earnings to participating securities (1,429) (1,172) (1,338) Net income (loss) attributable to common stockholders $ 42,867 $ 27,045 $ (69,783) Weighted average common shares outstanding used in basic income (loss) per common share 153,281 151,684 150,828 Effect of dilutive securities: Performance-based restricted stock units 125 144 — ESPP shares 4 2 — Weighted average common shares outstanding used in diluted income (loss) per common share 153,410 151,830 150,828 Anti-dilutive shares excluded from diluted income (loss) per common share Stock options — 31 96 Performance-based restricted stock units — — 54 ESPP shares — — 17 Net dilutive potential common shares issuable — 31 167 |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVES AND HEDGING | |
DERIVATIVES AND HEDGING | NOTE 24. DERIVATIVES AND HEDGING Prior to the expiration of our interest rate swaps in March 2022, we used derivative instruments to manage our exposure to fluctuations in the variable interest rate of our Credit Facility. We do not use derivative instruments for trading or other speculative purposes. We had entered into three interest rate swaps with an aggregate notional amount of $300.0 million to offset changes in the expected cash flows due to fluctuations in the associated variable interest rates and designated them as cash flow hedges. In 2021, we dedesignated one of the interest rate swaps with a $125.0 million notional value. At the time of dedesignation, the fair value of this interest rate swap was a liability of $1.6 million. The associated amount in accumulated other comprehensive loss related to this interest rate swap was amortized into interest expense over the remaining term of the swap through its expiration in March 2022. Changes in the fair value of this interest rate swap subsequent to dedesignation and prior to expiration were recorded in interest expense, the same consolidated statement of operations line item to which the earnings effect of the hedged item was recorded. The remaining interest rate swaps had a $175.0 million notional value and were designated as (highly effective) cash flow hedging instruments until their expiration. Changes in the fair value of these interest rate swaps were recognized as a component of other comprehensive income (loss) until the hedged transactions affected earnings. At that time, amounts were reclassified into earnings to interest expense, the same consolidated statement of operations line item to which the earnings effect of the hedged items were recorded. The effect of our derivative instruments on our consolidated balance sheet is as follows: December 31, 2022 2021 Interest rate swaps designated as cash flow hedging instruments Accrued liabilities $ — $ 727 Interest rate swaps not designated as hedging instruments Accrued liabilities — 523 Total derivative liabilities $ — $ 1,250 The effect of our derivative instruments on our consolidated statements of operations is as follows: Year Ended December 31, 2022 2021 2020 Total amount of interest expense in which the effects of cash flow hedges and undesignated interest rate swaps are recorded $ 101,259 $ 108,135 $ 105,716 Interest rate swaps designated as cash flow hedging instruments: Pre-tax loss recognized in other comprehensive income $ (512) $ (1,219) $ (8,459) Pre-tax loss reclassified from accumulated other comprehensive loss into interest expense (1,758) (6,308) (3,878) Interest rate swaps not designated as hedging instruments: Gain recognized in interest expense $ 523 $ 1,088 $ — See Note 16 and Note 25 for further details on our derivative instruments. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 25. 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 markets 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 markets makers. ● Level 3 – model–derived valuation in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those 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 Investment in ECOTEC As of December 31, 2022, we owned a 22.7% equity interest in ECOTEC (see Note 11). We have elected the fair value option to account for this investment. The fair value determination of this investment primarily consisted of unobservable inputs, which creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement, which was valued through an average of an income approach (discounted cash flow method) and a market approach (guideline public company method), are the WACC and the revenue multiples. Significant increases (decreases) in these inputs in isolation would result in a significantly higher (lower) fair value measurement. As of December 31, 2022, the fair value of our investment in ECOTEC is million. This fair value measurement is classified as Level 3 Significant Unobservable Inputs Range Median Valuation technique: Discounted cash flow WACC 0% - 22.1% 11.3% Guideline public company Revenue multiple 1.7x - 8.0x 3.9x The reconciliation of changes in the fair value of our investment in ECOTEC is as follows: Year Ended December 31, 2022 Balance at January 1 $ — Purchases of equity interests 14,667 Unrealized loss (1) (1,864) Balance at December 31 $ 12,803 (1) Included in other expense (income) in our consolidated statements of operations. Interest Rate Swaps As of December 31, 2021, the fair value of our interest rate swaps was a liability of $1.3 million. Prior to their expiration in the first quarter of 2022, our interest rate swaps were valued quarterly based on the income approach (discounted cash flows) using market observable inputs, including LIBOR forward curves. These fair value measurements were classified as Level 2 . Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Compressors During the years ended December 31, 2022 and 2021, we recorded nonrecurring fair value measurements related to our idle compressors (see Note 20). 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 is as follows: December 31, 2022 2021 Impaired compressors $ 1,961 $ 4,380 The significant unobservable inputs used to develop the above fair value measurements were weighted by the relative fair value of the compressors being measured. Additional quantitative information related to our significant unobservable inputs follows: Range Weighted Average (1) Estimated net sale proceeds: As of December 31, 2022 $0 - $621 per horsepower $47 per horsepower As of December 31, 2021 $0 - $621 per horsepower $35 per horsepower (1) Calculated based on an estimated discount for market liquidity of 51% and 64% as of December 31, 2022 and 2021, respectively . See Note 20 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: December 31, 2022 2021 Carrying amount of fixed rate debt (1) $ 1,297,084 $ 1,296,325 Fair value of fixed rate debt 1,214,000 1,361,000 (1) Carrying amounts are shown net of unamortized debt premium and deferred financing costs. See Note 14. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | NOTE 26. DISCONTINUED OPERATIONS 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, including a tax matters agreement, which governs the respective rights, responsibilities and obligations of Exterran Corporation and us with respect to certain tax matters. As of both December 31, 2022 and 2021, we had $7.9 million of unrecognized tax benefits (including interest and penalties) related to Exterran Corporation operations prior to the Spin-off recorded to liabilities of discontinued operations in our consolidated balance sheets. We had an offsetting indemnification asset of $7.9 million related to these unrecognized tax benefits recorded to assets of discontinued operations as of both December 31, 2022 and 2021. Assets and liabilities of discontinued operations are as follows: December 31, 2022 2021 Other assets $ 7,868 $ 7,868 Deferred tax assets 718 1,943 Assets of discontinued operations $ 8,586 $ 9,811 Deferred tax liabilities $ 7,868 $ 7,868 Liabilities of discontinued operations $ 7,868 $ 7,868 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 27. RELATED PARTY TRANSACTIONS Old Ocean Reserves, an affiliate of our customer Hilcorp, has the right to designate one director to serve on our board of directors as long as Old Ocean Reserves or its successors (together with its affiliates) owns at least 7.5% of our outstanding common stock. As of December 31, 2022, Old Ocean Reserves owned 10.8% of our outstanding common stock. Jason C. Rebrook, Chief Executive Officer and Director of Harvest Midstream Company, a Hilcorp affiliate, has served as Old Ocean Reserves’ representative director since July 2020. Revenue from Hilcorp and affiliates was $36.2 million, $38.2 million and $40.3 million during the years ended December 31, 2022, 2021 and 2020, respectively. Accounts receivable, net due from Hilcorp and affiliates was $3.0 million and $3.7 million as of December 31, 2022 and 2021, respectively (see Note 4). |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 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, defined as revenue less cost of sales (excluding depreciation and amortization) for each segment. Segment revenue includes only sales to external customers. Summarized financial information for our segments is shown below: Contract Aftermarket Operations Services Other (1) Total 2022 Revenue $ 677,801 $ 167,767 $ — $ 845,568 Gross margin 398,903 27,181 — 426,084 Capital expenditures 237,246 1,964 657 239,867 2021 Revenue $ 648,311 $ 133,150 $ — $ 781,461 Gross margin 403,825 18,719 — 422,544 Capital expenditures 94,863 2,675 347 97,885 2020 Revenue $ 738,918 $ 136,052 $ — $ 874,970 Gross margin 477,831 19,946 — 497,777 Capital expenditures 133,492 5,308 1,502 140,302 (1) Corporate–related items. The reconciliations of total assets by segment to total assets per the consolidated balance sheets are as follows: December 31, 2022 2021 Contract operations assets $ 2,431,145 $ 2,429,805 Aftermarket services assets 61,282 49,420 Segment assets 2,492,427 2,479,225 Other assets (1) 97,737 100,930 Assets of discontinued operations 8,586 9,811 Total assets $ 2,598,750 $ 2,589,966 (1) Corporate–related items. The reconciliations of total gross margin to income (loss) before income taxes are as follows: Year Ended December 31, 2022 2021 2020 Total gross margin $ 426,084 $ 422,544 $ 497,777 Less: Selling, general and administrative 117,184 107,167 105,100 Depreciation and amortization 164,259 178,946 193,138 Long-lived and other asset impairment 21,442 21,397 79,556 Goodwill impairment — — 99,830 Restructuring charges — 2,903 8,450 Interest expense 101,259 108,135 105,716 Debt extinguishment loss — — 3,971 Gain on sale of assets, net (40,494) (30,258) (10,643) Other expense (income), net 1,845 (4,707) (1,359) Income (loss) before income taxes $ 60,589 $ 38,961 $ (85,982) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation Our consolidated financial statements include the accounts of Archrock and its wholly–owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Consolidated Financial Statements, all dollar and share amounts in tabulations are in thousands of dollars and shares, respectively, unless otherwise noted. 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 amounts of assets and liabilities, revenues and 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 sued 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. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses 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. Due to the short–term nature of our trade accounts receivable, we consider the amortized cost to be the same as the carrying value 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. 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. 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. |
Inventory | Inventory Inventory consists of parts used for maintenance of natural gas compression equipment. Inventory is stated at the lower of cost and net realizable value using the average cost method. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated using the straight–line method over their estimated useful lives as follows: Compression equipment, facilities and other fleet assets 3 to 30 years Buildings 20 to 35 years Transportation and shop equipment 3 to 10 years Computer hardware and software 3 to 5 years Other 3 to 10 years Major improvements that extend the useful life of an asset are capitalized and depreciated over the estimated useful life of the major improvement, up to seven years. Repairs and maintenance are expensed as incurred. |
Leases | Leases We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our consolidated financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. We recognize ROU assets and liabilities 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. For contract operations service agreements in which we are a lessor, as the services nonlease component is predominant over the compression package lease component, we do not account for these agreements as operating leases. |
Impairment of Long-Lived Assets | Impairment of 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. |
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. |
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 is 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. |
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. |
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; therefore, our customers may be similarly affected by changes in economic and other conditions within the industry. We perform periodic evaluations of our customers’ financial condition, including monitoring our customers’ payment history and current credit worthiness to manage this risk. We generally do not obtain collateral for trade receivables, but we may require payment in advance. 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. During the years ended December 31, 2022, 2021 and 2020, no customers accounted for more than 10% of our consolidated revenues. |
Accounting Standard Update Implemented | Accounting Standard Update Implemented In December 2022, the FASB issued ASU No. 2022–06, Deferral of the Sunset Date of Reference Rate Reform (Topic 848) No other new accounting pronouncements issued or effective during 2022 have had or are expected to have a material impact on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
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 to 5 years Other 3 to 10 years |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of components of accounts receivable, net | December 31, 2022 2021 Customer related: Third party $ 110,636 $ 83,204 Related parties (1) 2,998 3,675 Other (2) 25,584 20,204 Accounts receivable 139,218 107,083 Allowance for credit losses (1,674) (2,152) Accounts receivable, net $ 137,544 $ 104,931 (1) See Note 27 for additional information. (2) Other receivables primarily consist of amounts due from the sale of used equipment. |
Summary of changes in allowance for credit losses | Year Ended December 31, 2022 2021 2020 Balance at January 1 $ 2,152 $ 3,370 $ 2,210 Impact of adoption of new accounting standard — — (216) Provision for credit losses 206 (90) 3,525 Write-offs charged against allowance (684) (1,128) (2,149) Balance at December 31 $ 1,674 $ 2,152 $ 3,370 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORY | |
Schedule of inventory, net of reserves | December 31, 2022 2021 Parts and supplies $ 70,228 $ 63,628 Work in progress 14,394 9,241 Inventory $ 84,622 $ 72,869 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of property, plant and equipment, net | December 31, 2022 2021 Compression equipment, facilities and other fleet assets $ 3,234,239 $ 3,273,770 Land and buildings 44,304 43,540 Transportation and shop equipment 93,189 92,490 Computer hardware and software 77,357 76,908 Other 5,754 6,229 Property, plant and equipment 3,454,843 3,492,937 Accumulated depreciation (1,255,590) (1,266,411) Property, plant and equipment, net $ 2,199,253 $ 2,226,526 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of balance sheet information of operating leases | December 31, Classification 2022 2021 ROU assets Operating lease ROU assets $ 16,706 $ 17,491 Lease liabilities Current Accrued liabilities $ 3,244 $ 2,940 Noncurrent Operating lease liabilities 14,861 15,940 Total lease liabilities $ 18,105 $ 18,880 |
Schedule of components of lease cost | Year Ended December 31, 2022 2021 2020 Operating lease cost $ 4,041 $ 4,836 $ 4,508 Short-term lease cost 447 169 52 Variable lease cost 1,802 2,123 1,652 Total lease cost $ 6,290 $ 7,128 $ 6,212 |
Schedule of operating lease cash flow and noncash information | Year Ended December 31, 2022 2021 2020 Operating lease cost $ 4,041 $ 4,836 $ 4,508 Short-term lease cost 447 169 52 Variable lease cost 1,802 2,123 1,652 Total lease cost $ 6,290 $ 7,128 $ 6,212 Year Ended December 31, 2022 2021 2020 Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 5,951 $ 6,568 $ 5,885 Operating lease ROU assets obtained in exchange for lease liabilities, net (1) 2,421 2,135 4,812 (3) Includes decreases to our ROU assets of $0.2 million and $0.6 million related to lease amendments and terminations during 2022 and 2021, respectively. |
Schedule of lease supplemental information | |
Schedule of maturities of lease liabilities | 2023 $ 3,719 2024 3,425 2025 2,846 2026 2,556 2027 2,374 Thereafter 6,486 Total lease payments 21,406 Less: Interest (3,301) Total lease liabilities $ 18,105 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, net | |
Schedule of Finite-Lived Intangible Assets | December 31, 2022 2021 Gross carrying amount $ 141,462 $ 144,322 Accumulated amortization (104,385) (96,435) Intangible assets, net $ 37,077 $ 47,887 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | 2023 $ 6,890 2024 5,721 2025 3,595 2026 3,032 2027 2,157 Thereafter 15,682 Total $ 37,077 |
HOSTING ARRANGEMENTS (Tables)
HOSTING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
HOSTING ARRANGEMENTS | |
Schedule of capitalized implementation costs and accumulated amortization, hosting arrangements | December 31, 2022 2021 Hosting arrangements $ 15,675 $ 12,674 Accumulated amortization (2,637) (653) Hosting arrangements, net $ 13,038 $ 12,021 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities | |
Schedule of Accrued Liabilities | December 31, 2022 2021 Accrued salaries and other benefits $ 22,288 $ 20,891 Accrued income and other taxes 10,108 9,957 Accrued interest 22,380 22,368 Derivative liability — 1,250 Other accrued liabilities 22,139 28,051 Accrued liabilities $ 76,915 $ 82,517 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT | |
Schedule of long-term debt | December 31, 2022 2021 Credit facility $ 251,250 $ 234,500 6.25% senior notes due April 2028: Principal outstanding 800,000 800,000 Unamortized debt premium 10,530 12,536 Unamortized debt issuance costs (8,744) (10,406) 801,786 802,130 6.875% senior notes due April 2027: Principal outstanding 500,000 500,000 Unamortized debt issuance costs (4,702) (5,805) 495,298 494,195 Long-term debt $ 1,548,334 $ 1,530,825 |
Schedule of Maturities of Long-term Debt | 2023 $ — 2024 251,250 2025 — 2026 — 2027 495,298 Thereafter 801,786 |
Schedule of financial ratios to be maintained defined in Credit Facility agreement | EBITDA to Interest Expense 2.5 to 1.0 Senior Secured Debt to EBITDA 3.0 to 1.0 Total Debt to EBITDA 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. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
Summary of entity's dividends per common share | Dividends per Common Share Dividends Paid 2022 Q4 $ 0.145 $ 22,589 Q3 0.145 22,559 Q2 0.145 22,494 Q1 0.145 22,673 2021 Q4 $ 0.145 $ 22,351 Q3 0.145 22,506 Q2 0.145 22,331 Q1 0.145 22,155 2020 Q4 $ 0.145 $ 22,177 Q3 0.145 22,308 Q2 0.145 22,176 Q1 0.145 22,171 |
Schedule of changes in accumulated other comprehensive loss | Year Ended December 31, 2022 2021 2020 Beginning accumulated other comprehensive loss $ (984) $ (5,006) $ (1,387) Other comprehensive income (loss), net of tax: Loss recognized in other comprehensive income (405) (962) (6,683) Loss reclassified from accumulated other comprehensive loss to interest expense 1,389 4,984 3,064 Total other comprehensive income (loss) 984 4,022 (3,619) Ending accumulated other comprehensive loss $ — $ (984) $ (5,006) |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Schedule of disaggregation of revenue | Year Ended December 31, 2022 2021 2020 Contract operations: 0 ― 1,000 horsepower per unit $ 159,140 $ 175,457 $ 224,702 1,001 ― 1,500 horsepower per unit 285,758 267,191 305,185 Over 1,500 horsepower per unit 231,923 204,893 206,749 Other (1) 980 770 2,282 Total contract operations revenue (2) 677,801 648,311 738,918 Aftermarket services: Services 88,728 69,876 79,012 OTC parts and components sales 79,039 63,274 57,040 Total aftermarket services revenue (3) 167,767 133,150 136,052 Total revenue $ 845,568 $ 781,461 $ 874,970 (1) Primarily relates to fees associated with owned non–compression equipment. (2) Includes $3.2 million, $4.0 million and $5.6 million during the years ended December 31, 2022, 2021 and 2020, respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time. (3) Services revenue within aftermarket services is recognized over time. OTC parts and components sales revenue is recognized at a point in time. |
Schedule of remaining Performance Obligation | 2023 2024 2025 2026 2027 Total Remaining performance obligations $ 205,999 $ 67,137 $ 32,096 $ 4,067 $ 1,151 $ 310,450 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock-based payment awards | |
Schedule of valuation assumptions | Year Ended December 31, 2022 2021 2020 Remaining performance period as of grant date (in years) 2.9 2.8 2.9 Risk-free interest rate used 1.4 % 0.3 % 1.4 % Grant-date fair value $ 11.96 $ 14.30 $ 11.33 |
Schedule stock-based compensation expense | Year Ended December 31, 2022 2021 2020 Equity award expense $ 11,928 $ 11,336 $ 10,551 Liability award expense (1) 2,569 (816) 1,521 Total stock-based compensation expense $ 14,497 $ 10,520 $ 12,072 (1) In 2021, we reversed a prior period expense of $2.1 million as the result of revised estimates of performance achievement of our 2020 and 2019 cash–settled performance–based restricted stock units. |
Restricted stock and performance-based restricted stock units | |
Stock-based payment awards | |
Schedule of restricted stock activity | Weighted Average Grant Date Fair Value Shares Per Share Non-vested restricted stock and performance-based restricted stock units, December 31, 2021 2,055 $ 10.38 Granted 1,599 8.97 Vested (1,071) 9.78 Canceled (110) 9.09 Non-vested restricted stock and performance-based restricted stock units, December 31, 2022 2,473 $ 9.79 |
Cash-settled performance units | |
Stock-based payment awards | |
Schedule of restricted stock activity | Weighted Average Grant Date Fair Value Shares Per Share Non-vested cash-settled performance units, December 31, 2021 523 $ 10.22 Granted 262 9.38 Vested (139) 12.91 Canceled (137) 9.42 Non-vested cash-settled performance units, December 31, 2022 509 $ 9.27 |
LONG-LIVED AND OTHER ASSET IM_2
LONG-LIVED AND OTHER ASSET IMPAIRMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LONG-LIVED AND OTHER ASSET IMPAIRMENT | |
Schedule of impairment of long-lived assets | Year Ended December 31, 2022 2021 2020 Idle compressors retired from the active fleet 145 230 730 Horsepower of idle compressors retired from the active fleet 100,000 85,000 261,000 Impairment recorded on idle compressors retired from the active fleet $ 21,431 $ 21,208 $ 77,590 |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring Charges | |
Schedule of restructuring charges by segment | Contract Aftermarket Operations Services Other Total 2021 Pandemic restructuring $ 616 $ 145 $ 956 $ 1,717 2021 property restructuring 929 — — 929 2020 property restructuring — — 35 35 Other restructuring — — 222 222 Total restructuring charges $ 1,545 $ 145 $ 1,213 $ 2,903 2020 Organizational restructuring $ 458 $ 625 $ 612 $ 1,695 Pandemic restructuring 2,505 1,218 1,534 5,257 2020 property restructuring Loss on sale — — 915 915 Impairment loss — — 583 583 Total restructuring charges $ 2,963 $ 1,843 $ 3,644 $ 8,450 |
Schedule of restructuring charges by type | Year Ended December 31, 2021 2020 Severance costs Organizational restructuring $ — $ 1,695 Pandemic restructuring 1,717 5,257 Total severance costs 1,717 6,952 Property disposal costs: Loss on sale — 915 Impairment loss — 583 Other exit costs 964 — Total property disposal costs 964 1,498 Other restructuring costs 222 — Total restructuring charges $ 2,903 $ 8,450 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of provision for (benefit from) income taxes | Year Ended December 31, 2022 2021 2020 Current tax provision (benefit): U.S. federal $ — $ (1) $ (99) State 1,064 366 326 Total current 1,064 365 227 Deferred tax provision (benefit): U.S. federal 14,320 8,800 (17,246) State 909 1,579 (518) Total deferred 15,229 10,379 (17,764) Provision for (benefit from) income taxes $ 16,293 $ 10,744 $ (17,537) |
Schedule of provision for (benefit from) income taxes | Year Ended December 31, 2022 2021 2020 Income taxes at U.S. federal statutory rate $ 12,724 $ 8,182 $ (18,056) Net state income taxes 1,795 1,374 (817) Tax credits (26) (720) (1,256) Unrecognized tax benefits (1) 17 598 772 Valuation allowances and write off of tax attributes (2) (68) (167) 236 Executive compensation limitation 1,901 1,559 1,159 Stock 152 162 538 Other (202) (244) (113) Provision for (benefit from) income taxes $ 16,293 $ 10,744 $ (17,537) (1) Includes the expiration of statute of limitations. See “Unrecognized Tax Benefits” below for further details. (2) See “Tax Attributes and Valuation Allowances” below for further details. |
Schedule of deferred income tax balances | December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 191,916 $ 196,654 Interest expense limitation carryforward 19,327 — Accrued liabilities 4,979 4,527 Other 12,834 12,503 229,056 213,684 Valuation allowances (1) (607) (735) Total deferred tax assets 228,449 212,949 Deferred tax liabilities: Property, plant and equipment (8,386) (7,762) Basis difference in the Partnership (181,377) (151,469) Other (6,187) (6,975) Total deferred tax liabilities (195,950) (166,206) Net deferred tax asset (2) $ 32,499 $ 46,743 (1) See “Tax Attributes and Valuation Allowances” below for further details. (2) The 2022 net deferred tax assets are reflected in our consolidated balance sheets as deferred tax assets of $33.4 million and $47.9 million, respectively, and deferred tax liabilities of $0.9 million and $1.1 million, respectively. |
Schedule of changes in valuation allowance | Year Ended December 31, 2022 2021 2020 Balance at beginning of period $ (735) $ (1,027) $ (822) Additions to valuation allowance (88) — (205) Reductions to valuation allowance 216 292 — Balance at end of period $ (607) $ (735) $ (1,027) |
Schedule of changes in unrecognized tax benefits | Year Ended December 31, 2022 2021 2020 Beginning balance $ 19,594 $ 18,892 $ 18,453 Additions based on tax positions related to current year 2,151 2,246 2,397 Additions based on tax positions related to prior years 6 632 — Reductions based on tax positions related to prior years (105) (138) (73) Reductions based on lapse of statute of limitations (1,995) (2,038) (1,885) Ending balance $ 19,651 $ 19,594 $ 18,892 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER COMMON SHARE | |
Schedule of anti-dilutive shares excluded from diluted income (loss) per common share | Year Ended December 31, 2022 2021 2020 Net income (loss) $ 44,296 $ 28,217 $ (68,445) Allocation of earnings to participating securities (1,429) (1,172) (1,338) Net income (loss) attributable to common stockholders $ 42,867 $ 27,045 $ (69,783) Weighted average common shares outstanding used in basic income (loss) per common share 153,281 151,684 150,828 Effect of dilutive securities: Performance-based restricted stock units 125 144 — ESPP shares 4 2 — Weighted average common shares outstanding used in diluted income (loss) per common share 153,410 151,830 150,828 Anti-dilutive shares excluded from diluted income (loss) per common share Stock options — 31 96 Performance-based restricted stock units — — 54 ESPP shares — — 17 Net dilutive potential common shares issuable — 31 167 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVES AND HEDGING | |
Schedule of effect of derivative instruments on consolidated balance sheet | December 31, 2022 2021 Interest rate swaps designated as cash flow hedging instruments Accrued liabilities $ — $ 727 Interest rate swaps not designated as hedging instruments Accrued liabilities — 523 Total derivative liabilities $ — $ 1,250 |
Schedule of effect of derivative instruments on consolidated statements of operations | Year Ended December 31, 2022 2021 2020 Total amount of interest expense in which the effects of cash flow hedges and undesignated interest rate swaps are recorded $ 101,259 $ 108,135 $ 105,716 Interest rate swaps designated as cash flow hedging instruments: Pre-tax loss recognized in other comprehensive income $ (512) $ (1,219) $ (8,459) Pre-tax loss reclassified from accumulated other comprehensive loss into interest expense (1,758) (6,308) (3,878) Interest rate swaps not designated as hedging instruments: Gain recognized in interest expense $ 523 $ 1,088 $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair value | |
Schedule of changes in assets measured at fair value on a recurring basis | Year Ended December 31, 2022 Balance at January 1 $ — Purchases of equity interests 14,667 Unrealized loss (1) (1,864) Balance at December 31 $ 12,803 (1) Included in other expense (income) in our consolidated statements of operations. |
Schedule of carrying value and estimated fair value of debt instruments | December 31, 2022 2021 Carrying amount of fixed rate debt (1) $ 1,297,084 $ 1,296,325 Fair value of fixed rate debt 1,214,000 1,361,000 (1) Carrying amounts are shown net of unamortized debt premium and deferred financing costs. See Note 14. |
Compressors | |
Fair value | |
Schedule of significant unobservable inputs | Range Weighted Average (1) Estimated net sale proceeds: As of December 31, 2022 $0 - $621 per horsepower $47 per horsepower As of December 31, 2021 $0 - $621 per horsepower $35 per horsepower (1) Calculated based on an estimated discount for market liquidity of 51% and 64% as of December 31, 2022 and 2021, respectively . |
Schedule of non-recurring fair value assets | December 31, 2022 2021 Impaired compressors $ 1,961 $ 4,380 |
Ecotec | Equity investment | |
Fair value | |
Schedule of significant unobservable inputs | Significant Unobservable Inputs Range Median Valuation technique: Discounted cash flow WACC 0% - 22.1% 11.3% Guideline public company Revenue multiple 1.7x - 8.0x 3.9x |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DISCONTINUED OPERATIONS | |
Summary of assets and liabilities of discontinued operations | December 31, 2022 2021 Other assets $ 7,868 $ 7,868 Deferred tax assets 718 1,943 Assets of discontinued operations $ 8,586 $ 9,811 Deferred tax liabilities $ 7,868 $ 7,868 Liabilities of discontinued operations $ 7,868 $ 7,868 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
Summary of revenue and other financial information by reportable segment | Contract Aftermarket Operations Services Other (1) Total 2022 Revenue $ 677,801 $ 167,767 $ — $ 845,568 Gross margin 398,903 27,181 — 426,084 Capital expenditures 237,246 1,964 657 239,867 2021 Revenue $ 648,311 $ 133,150 $ — $ 781,461 Gross margin 403,825 18,719 — 422,544 Capital expenditures 94,863 2,675 347 97,885 2020 Revenue $ 738,918 $ 136,052 $ — $ 874,970 Gross margin 477,831 19,946 — 497,777 Capital expenditures 133,492 5,308 1,502 140,302 (1) Corporate–related items. |
Schedule of assets by segment | December 31, 2022 2021 Contract operations assets $ 2,431,145 $ 2,429,805 Aftermarket services assets 61,282 49,420 Segment assets 2,492,427 2,479,225 Other assets (1) 97,737 100,930 Assets of discontinued operations 8,586 9,811 Total assets $ 2,598,750 $ 2,589,966 (1) Corporate–related items. |
Reconciliation of total gross margin to income before taxes | Year Ended December 31, 2022 2021 2020 Total gross margin $ 426,084 $ 422,544 $ 497,777 Less: Selling, general and administrative 117,184 107,167 105,100 Depreciation and amortization 164,259 178,946 193,138 Long-lived and other asset impairment 21,442 21,397 79,556 Goodwill impairment — — 99,830 Restructuring charges — 2,903 8,450 Interest expense 101,259 108,135 105,716 Debt extinguishment loss — — 3,971 Gain on sale of assets, net (40,494) (30,258) (10,643) Other expense (income), net 1,845 (4,707) (1,359) Income (loss) before income taxes $ 60,589 $ 38,961 $ (85,982) |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
DESCRIPTION OF BUSINESS | |
Number of reportable segments | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable and Allowance for Credit Losses (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Credit Losses | |
Period for analyzing historical loss data to determine loss experience | 2 years |
Contractual life of accounts receivable | 30 days |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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 | Minimum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 3 years |
Other | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 10 years |
Major improvements | Maximum | |
Property, Plant and Equipment | |
Property plant and equipment useful life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New Accounting Standards to be Adopted (Details) | Dec. 31, 2022 |
ASU 2022-06 | |
New Accounting Pronouncements or Change in Accounting Principle | |
Change in Accounting Principle, Accounting Standards Update, Adopted | true |
DISPOSITIONS (Details)
DISPOSITIONS (Details) hp in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | 18 Months Ended | ||||
Jul. 31, 2021 USD ($) | Jul. 31, 2020 USD ($) | Mar. 31, 2020 CompressorUnit hp | Dec. 31, 2022 USD ($) CompressorUnit hp | Dec. 31, 2021 USD ($) CompressorUnit hp | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) | |
Transactions | |||||||
Gain on disposition | $ 28,098 | $ 18,945 | $ 12,475 | ||||
Disposed of by Sale | 2022 Dispositions | |||||||
Transactions | |||||||
Number of compressors | CompressorUnit | 770 | ||||||
Compressor horsepower | hp | 172 | ||||||
Gain on disposition | $ 28,100 | ||||||
Disposed of by Sale | July 2021 Disposition | |||||||
Transactions | |||||||
Number of compressors | CompressorUnit | 875 | ||||||
Compressor horsepower | hp | 140 | ||||||
Gain on disposition | $ 19,000 | ||||||
Disposed of by Sale | July 2020 Disposition | |||||||
Transactions | |||||||
Disposal Group, Not Discontinued Operation, Name of Segment | Aftermarket Services | ||||||
Cash consideration received upon closing | $ 9,500 | ||||||
Cash consideration received on first anniversary of closing | $ 3,000 | ||||||
Cash received under supply agreement | $ 2,800 | $ 3,500 | |||||
Gain on disposition | 9,300 | ||||||
Disposed of by Sale | March 2020 Disposition | |||||||
Transactions | |||||||
Number of compressors | CompressorUnit | 200 | ||||||
Compressor horsepower | hp | 35 | ||||||
Gain on disposition | $ 3,200 | ||||||
Turbocharger goods and services | July 2020 Disposition | |||||||
Transactions | |||||||
Term of supply agreement | 2 years |
ACCOUNTS RECEIVABLE, NET - Comp
ACCOUNTS RECEIVABLE, NET - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
ACCOUNTS RECEIVABLE, NET | ||||
Customer related - Third party | $ 110,636 | $ 83,204 | ||
Customer related - Related parties | 2,998 | 3,675 | ||
Other | 25,584 | 20,204 | ||
Accounts receivable | 139,218 | 107,083 | ||
Allowance for credit losses | (1,674) | (2,152) | $ (3,370) | $ (2,210) |
Accounts receivable, net | $ 137,544 | $ 104,931 |
ACCOUNTS RECEIVABLE, NET - Chan
ACCOUNTS RECEIVABLE, NET - Changes in allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in the allowance for credit losses balance | |||
Balance at beginning of period | $ 2,152 | $ 3,370 | $ 2,210 |
Impact of adoption of new accounting standard | (216) | ||
Provision for (benefit) from credit losses | 206 | (90) | 3,525 |
Write-offs charged against the allowance | (684) | (1,128) | (2,149) |
Balance at end of period | $ 1,674 | $ 2,152 | $ 3,370 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Composition of Inventory net of reserves | ||
Parts and supplies | $ 70,228 | $ 63,628 |
Work in progress | 14,394 | 9,241 |
Inventory | $ 84,622 | $ 72,869 |
INVENTORY - Write-down (Details
INVENTORY - Write-down (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INVENTORY | |||
Inventory write-downs | $ 1,640 | $ 997 | $ 1,349 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 3,454,843 | $ 3,492,937 |
Accumulated depreciation | (1,255,590) | (1,266,411) |
Property, plant and equipment, net | 2,199,253 | 2,226,526 |
Compression equipment, facilities and other fleet assets | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 3,234,239 | 3,273,770 |
Land and buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 44,304 | 43,540 |
Transportation and shop equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 93,189 | 92,490 |
Computer hardware and software | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 77,357 | 76,908 |
Other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 5,754 | $ 6,229 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PROPERTY, PLANT AND EQUIPMENT | |||
Depreciation expense | $ 155.4 | $ 167.6 | $ 177.5 |
Construction in progress | $ 92.5 | $ 30.1 |
LEASES - Terms (Details)
LEASES - Terms (Details) | Dec. 31, 2022 |
Minimum | |
Lessee, Lease, Description | |
Remaining lease term (in years) | 1 year |
Operating lease renewal term (in years) | 6 months |
Maximum | |
Lessee, Lease, Description | |
Remaining lease term (in years) | 10 years |
Operating lease renewal term (in years) | 10 years |
LEASES - Balance Sheet Location
LEASES - Balance Sheet Location (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Operating lease ROU asset | $ 16,706 | $ 17,491 |
Lease liabilities | ||
Operating lease liabilities current | $ 3,244 | $ 2,940 |
Operating Lease, Liability, Current, Statement of Financial Position | Accrued liabilities | Accrued liabilities |
Operating lease liabilities | $ 14,861 | $ 15,940 |
Total lease liabilities | $ 18,105 | $ 18,880 |
Operating Lease, Liability, Statement of Financial Position | Accrued liabilities, Operating lease liabilities | Accrued liabilities, Operating lease liabilities |
LEASES - Components of Lease Co
LEASES - Components of Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | |||
Operating lease cost | $ 4,041 | $ 4,836 | $ 4,508 |
Short-term lease cost | 447 | 169 | 52 |
Variable lease cost | 1,802 | 2,123 | 1,652 |
Total lease cost | $ 6,290 | $ 7,128 | $ 6,212 |
LEASES - Cash Flow and Non-cash
LEASES - Cash Flow and Non-cash Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | |||
Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities | $ 5,951 | $ 6,568 | $ 5,885 |
Operating lease ROU assets obtained in exchange for new lease liabilities, net | $ 2,421 | 2,135 | 4,812 |
Decreases in ROU related to lease amendments and terminations | $ 200 | $ 600 |
LEASES - Other Supplemental Inf
LEASES - Other Supplemental Information (Details) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Leases | |||
Weighted average remaining lease term (in years) | 6 years 8 months 12 days | 7 years 2 months 12 days | 7 years 10 months 24 days |
Weighted average discount rate (as a percent) | 4.70% | 4.60% | 4.80% |
LEASES - Maturity Schedule (Det
LEASES - Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Lease Liabilities, Payments Due | ||
2023 | $ 3,719 | |
2024 | 3,425 | |
2025 | 2,846 | |
2026 | 2,556 | |
2027 | 2,374 | |
Thereafter | 6,486 | |
Total lease payments | 21,406 | |
Less: Interest | (3,301) | |
Lease liability | $ 18,105 | $ 18,880 |
INTANGIBLE ASSETS, NET - By typ
INTANGIBLE ASSETS, NET - By type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets | ||
Gross carrying amount | $ 141,462 | $ 144,322 |
Accumulated amortization | (104,385) | (96,435) |
Intangible assets, net | $ 37,077 | $ 47,887 |
Minimum | ||
Finite-Lived Intangible Assets | ||
Useful life | 15 years | |
Maximum | ||
Finite-Lived Intangible Assets | ||
Useful life | 25 years |
INTANGIBLE ASSETS, NET - Amorti
INTANGIBLE ASSETS, NET - Amortization expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets, net | |||
Amortization expense | $ 8.9 | $ 11.3 | $ 15.6 |
INTANGIBLE ASSETS, NET - Estima
INTANGIBLE ASSETS, NET - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets, net | ||
2023 | $ 6,890 | |
2024 | 5,721 | |
2025 | 3,595 | |
2026 | 3,032 | |
2027 | 2,157 | |
Thereafter | 15,682 | |
Intangible Assets, Net (Excluding Goodwill), Total | $ 37,077 | $ 47,887 |
CONTRACT COSTS (Details)
CONTRACT COSTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract costs | |||
Contract costs, net | $ 34,736 | $ 25,418 | |
Amortization of contract costs | 19,162 | 19,990 | $ 26,629 |
Sales commissions | |||
Contract costs | |||
Contract costs, net | 3,000 | 2,600 | |
Amortization of contract costs | $ 1,900 | 2,200 | 3,000 |
Sales commissions | Maximum | |||
Contract costs | |||
Capitalized contract, amortization period | 1 year | ||
Freight and mobilization | |||
Contract costs | |||
Contract costs, net | $ 31,700 | 22,800 | |
Capitalized contract, amortization period | 36 months | ||
Amortization of contract costs | $ 17,300 | $ 17,800 | $ 23,600 |
HOSTING ARRANGEMENTS (Details)
HOSTING ARRANGEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
HOSTING ARRANGEMENTS | |||
Hosting arrangements, Capitalized costs | $ 15,675 | $ 12,674 | |
Hosting arrangements, Accumulated amortization | (2,637) | (653) | |
Hosting arrangements, net | 13,038 | 12,021 | |
Hosting arrangements, Amortization expense | $ 2,000 | $ 300 | $ 300 |
Impairment of capitalized implementation costs | $ 1,700 | ||
Hosting Arrangement, Service Contract, Implementation Cost, Impairment, Statement of Income or Comprehensive Income | Long-lived and other asset impairment |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED AFFILIATE (Details) - Ecotec - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2023 | Apr. 30, 2022 | Dec. 31, 2022 | |
Investments | |||
Equity interest agreed to acquire (as a percent) | 25% | ||
Amount of recognized unrealized loss due to change in fair value | $ (1.9) | ||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Other Nonoperating Income (Expense) | ||
Ownership interest (as a percent) | 22.70% | ||
Subsequent Event. | |||
Investments | |||
Equity interest acquired (as a percent) | 2.30% |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Liabilities | ||
Accrued salaries and other benefits | $ 22,288 | $ 20,891 |
Accrued income and other taxes | 10,108 | 9,957 |
Accrued interest | 22,380 | 22,368 |
Derivative liability - current | 1,250 | |
Other accrued liabilities | 22,139 | 28,051 |
Accrued liabilities | $ 76,915 | $ 82,517 |
CONTRACT LIABILITIES (Details)
CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONTRACT LIABILITIES | |||
Contract liability | $ 8,000 | $ 4,400 | |
Contract liabilities, Current portion | (7,332) | (3,817) | |
Deferred revenue | 24,642 | 10,217 | $ 12,732 |
Deferred revenue recognized in earnings | $ 20,956 | $ 10,382 | $ 19,489 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instruments | ||
Long-term debt | $ 1,548,334 | $ 1,530,825 |
Credit facility | ||
Debt Instruments | ||
Long-term debt | 251,250 | 234,500 |
6.25% senior notes due April 2028 | ||
Debt Instruments | ||
Principal outstanding | 800,000 | 800,000 |
Unamortized debt premium | 10,530 | 12,536 |
Unamortized debt issuance costs | (8,744) | (10,406) |
Long-term debt | $ 801,786 | $ 802,130 |
Interest rate (as a percent) | 6.25% | 6.25% |
6.875% senior notes due April 2027 | ||
Debt Instruments | ||
Principal outstanding | $ 500,000 | $ 500,000 |
Unamortized debt issuance costs | (4,702) | (5,805) |
Long-term debt | $ 495,298 | $ 494,195 |
Interest rate (as a percent) | 6.875% | 6.875% |
LONG-TERM DEBT - Credit Facilit
LONG-TERM DEBT - Credit Facility (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Credit facility | |||
Line of Credit Facility | |||
Maximum borrowing capacity | $ 750 | ||
Contingent increase in borrowing capacity | 250 | ||
Letter of credit outstanding | $ 5.7 | ||
Debt instrument weighted average interest rate (percent) | 6.90% | 2.60% | |
Line of credit facility, commitment fee (percent) | 0.375% | ||
Commitment fee amount | $ 1.9 | $ 2 | $ 2 |
Current borrowing capacity | 487.6 | ||
Undrawn capacity | $ 493 | ||
Credit facility | LIBOR | Minimum | |||
Line of Credit Facility | |||
Debt instrument, variable rate (percentage) | 2% | ||
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% | ||
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% | ||
Letters of Credit, Credit Facility | |||
Line of Credit Facility | |||
Maximum borrowing capacity | $ 50 | ||
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 | 3 Months Ended | 9 Months Ended | 12 Months Ended | 13 Months Ended |
Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Nov. 08, 2024 | |
Line of Credit Facility | ||||
EBITDA to Interest Expense | 2.5 | |||
Senior Secured Debt to EBITDA | 3 | |||
Forecasted | ||||
Line of Credit Facility | ||||
Total Debt to EBITDA | 5.25 | 5.50 | ||
Forecasted | Conditional Event | ||||
Line of Credit Facility | ||||
Total Debt to EBITDA | 5.50 |
LONG-TERM DEBT - 2028 Notes and
LONG-TERM DEBT - 2028 Notes and 2027 Notes (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | 24 Months Ended | ||||
Mar. 21, 2019 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 USD ($) Offering | |
Debt Instruments | |||||||
Proceeds from issuance of debt | $ 826,733 | $ 704,751 | $ 1,049,000 | ||||
Repayments of long-term debt | 809,983 | 863,251 | 1,204,375 | ||||
Interest paid | $ 98,406 | $ 100,002 | 99,797 | ||||
Debt extinguishment loss | 3,971 | ||||||
6.25% senior notes due April 2028 | |||||||
Debt Instruments | |||||||
Number of private offerings | Offering | 2 | ||||||
Interest rate (as a percent) | 6.25% | 6.25% | |||||
2028 Senior Notes, Tranche One | |||||||
Debt Instruments | |||||||
Debt instrument face amount | $ 500,000 | ||||||
Proceeds from issuance of debt | $ 491,800 | ||||||
Percent of face value notes issued | 100% | ||||||
Debt instrument effective interest rate (as a percent) | 6.80% | ||||||
Issuance costs | $ 8,200 | ||||||
2028 Senior Notes, Tranche Two | |||||||
Debt Instruments | |||||||
Debt instrument face amount | $ 300,000 | $ 300,000 | $ 300,000 | ||||
Proceeds from issuance of debt | $ 309,900 | ||||||
Percent of face value notes issued | 104.875% | 104.875% | 104.875% | ||||
Debt instrument effective interest rate (as a percent) | 5.60% | 5.60% | 5.60% | ||||
Issuance costs | $ 4,700 | $ 4,700 | $ 4,700 | ||||
6.875% senior notes due April 2027 | |||||||
Debt Instruments | |||||||
Interest rate (as a percent) | 6.875% | 6.875% | |||||
Proceeds from issuance of debt | $ 491,200 | ||||||
Percent of face value notes issued | 100% | ||||||
Debt instrument effective interest rate (as a percent) | 7.90% | ||||||
Issuance costs | $ 8,800 |
LONG-TERM DEBT - Debt Maturity
LONG-TERM DEBT - Debt Maturity Schedule (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long-term Debt, Fiscal Year Maturity | |
2024 | $ 251,250 |
2027 | 495,298 |
Thereafter | $ 801,786 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Insurance Matters (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Natural disaster | |||||
Proceeds from insurance and other settlements | $ 3,353 | $ 1,085 | $ 2,709 | ||
Hurricane Ida | |||||
Natural disaster | |||||
Insurance recovery receivable | $ 2,800 | ||||
Proceeds from insurance and other settlements | $ 400 | $ 2,800 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Tax Matters - Loss contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Non-income based tax audits | ||
Loss Contingencies | ||
Accrued liability | $ 3.9 | $ 5.8 |
Non-income based tax audits in contested hearing phase | ||
Loss Contingencies | ||
Accrued liability | $ 0.6 | $ 0.6 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Tax Matters - Sales and use tax (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2021 | |
Contingencies | |||
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 | |||
Contingencies | |||
Net benefit recorded from sales and use tax audit | 4.4 | ||
SG&A | |||
Contingencies | |||
Net benefit recorded from sales and use tax audit | $ 7.9 |
STOCKHOLDERS' EQUITY - At-the-M
STOCKHOLDERS' EQUITY - At-the-Market Continuous Equity Offering Program (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Feb. 28, 2021 | |
Equity offering | |||
Net proceeds from issuance of common stock | $ 4,176 | $ 3,401 | |
ATM Agreement | |||
Equity offering | |||
Maximum amount of shares to be issued | $ 50,000 | ||
Stock issued (in shares) | 447,020 | 357,148 | |
Net proceeds from issuance of common stock | $ 4,200 | $ 3,400 |
STOCKHOLDERS' EQUITY - Cash Div
STOCKHOLDERS' EQUITY - Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||
Feb. 14, 2023 | Jan. 26, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Distributions | |||||||||||||||||
Declared Dividends per Common Share (in dollars per share) | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.145 | $ 0.58 | $ 0.58 | $ 0.58 | ||
Dividends Paid (in dollars) | $ 22,589 | $ 22,559 | $ 22,494 | $ 22,673 | $ 22,351 | $ 22,506 | $ 22,331 | $ 22,155 | $ 22,177 | $ 22,308 | $ 22,176 | $ 22,171 | $ 90,315 | $ 89,343 | $ 88,832 | ||
Subsequent Event. | |||||||||||||||||
Distributions | |||||||||||||||||
Declared Dividends per Common Share (in dollars per share) | $ 0.15 | ||||||||||||||||
Dividends Paid (in dollars) | $ 23,600 |
STOCKHOLDERS' EQUITY - Accumula
STOCKHOLDERS' EQUITY - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | $ 891,438 | $ 935,557 | $ 1,085,963 |
Other comprehensive income (loss), net of tax | |||
Total other comprehensive income (loss), net of tax | 984 | 4,022 | (3,619) |
Ending balance | 860,693 | 891,438 | 935,557 |
Accumulated Other Comprehensive Loss | |||
Increase (Decrease) in Stockholders' Equity | |||
Beginning balance | (984) | (5,006) | (1,387) |
Other comprehensive income (loss), net of tax | |||
Loss recognized in other comprehensive income | (405) | (962) | (6,683) |
Loss reclassified from accumulated other comprehensive loss to interest expense | 1,389 | 4,984 | 3,064 |
Total other comprehensive income (loss), net of tax | $ 984 | 4,022 | (3,619) |
Ending balance | $ (984) | $ (5,006) |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregate Revenue (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) hp | Dec. 31, 2021 USD ($) hp | Dec. 31, 2020 USD ($) hp | |
Disaggregation of Revenue | |||
Revenue | $ 845,568 | $ 781,461 | $ 874,970 |
Contract Operations | |||
Disaggregation of Revenue | |||
Revenue | 677,801 | 648,311 | 738,918 |
Contract Operations | Transferred at Point in Time | |||
Disaggregation of Revenue | |||
Revenue | 3,200 | 4,000 | 5,600 |
Contract Operations | 0 - 1,000 horsepower per unit | |||
Disaggregation of Revenue | |||
Revenue | $ 159,140 | $ 175,457 | $ 224,702 |
Contract Operations | 0 - 1,000 horsepower per unit | Minimum | |||
Disaggregation of Revenue | |||
Compressor unit horsepower (horsepower) | hp | 0 | 0 | 0 |
Contract Operations | 0 - 1,000 horsepower per unit | Maximum | |||
Disaggregation of Revenue | |||
Compressor unit horsepower (horsepower) | hp | 1,000 | 1,000 | 1,000 |
Contract Operations | 1,001 - 1,500 horsepower per unit | |||
Disaggregation of Revenue | |||
Revenue | $ 285,758 | $ 267,191 | $ 305,185 |
Contract Operations | 1,001 - 1,500 horsepower per unit | Minimum | |||
Disaggregation of Revenue | |||
Compressor unit horsepower (horsepower) | hp | 1,001 | 1,001 | 1,001 |
Contract Operations | 1,001 - 1,500 horsepower per unit | Maximum | |||
Disaggregation of Revenue | |||
Compressor unit horsepower (horsepower) | hp | 1,500 | 1,500 | 1,500 |
Contract Operations | Over 1,500 horsepower per unit | |||
Disaggregation of Revenue | |||
Revenue | $ 231,923 | $ 204,893 | $ 206,749 |
Contract Operations | Other | |||
Disaggregation of Revenue | |||
Revenue | 980 | 770 | 2,282 |
Aftermarket Services | |||
Disaggregation of Revenue | |||
Revenue | 167,767 | 133,150 | 136,052 |
Aftermarket Services | Services | |||
Disaggregation of Revenue | |||
Revenue | 88,728 | 69,876 | 79,012 |
Aftermarket Services | OTC parts and components sales | |||
Disaggregation of Revenue | |||
Revenue | $ 79,039 | $ 63,274 | $ 57,040 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Performance Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 310,450 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 205,999 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 67,137 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 32,096 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 4,067 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligations | $ 1,151 |
Performance obligations expected to be satisfied, expected timing | 1 year |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Incentive Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based payment awards | |||
Shares withheld to cover tax withholding (in shares) | 283,024 | 283,972 | 236,752 |
Shares withheld to cover tax withholding (in dollars) | $ 2,447 | $ 2,465 | $ 1,804 |
2013 Plan | |||
Stock-based payment awards | |||
Remaining shares available for grant. | 0 | ||
2020 Plan | |||
Stock-based payment awards | |||
Number of shares authorized for issuance | 8,500,000 | ||
Remaining shares available for grant. | 5,900,000 | ||
Reduction in number of shares available for issuance for each stock-settled award granted | 1 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Awards and Performance-Based RSUs - Vesting (Details) | 12 Months Ended |
Dec. 31, 2022 installment | |
Restricted stock awards | |
Stock-based payment awards | |
Number of equal installments following the date of grant in which awards will vest | 3 |
Performance-based restricted stock units | |
Stock-based payment awards | |
Vesting period | 3 years |
Performance period | 3 years |
Dividend yield (as a percent) | 0% |
Performance-based restricted stock units | Minimum | |
Stock-based payment awards | |
Vesting percentage | 0% |
Performance-based restricted stock units | Maximum | |
Stock-based payment awards | |
Vesting percentage | 200% |
Performance-based restricted stock units, Market conditions | |
Stock-based payment awards | |
Performance period | 3 years |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted Stock Awards and Performance-Based RSUs - FV Assumptions (Details) - Performance-based restricted stock units - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | |||
Remaining performance period as of grant date (in years) | 2 years 10 months 24 days | 2 years 9 months 18 days | 2 years 10 months 24 days |
Risk-free interest rate (as a percent) | 1.40% | 0.30% | 1.40% |
Weighted average fair value of awards granted (in dollars per share) | $ 11.96 | $ 14.30 | $ 11.33 |
STOCK-BASED COMPENSATION - Re_3
STOCK-BASED COMPENSATION - Restricted Stock Awards and Performance-Based RSUs - Activity (Details) - Restricted stock and performance-based restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | |||
Non-vested awards at beginning of period (in shares) | 2,055 | ||
Granted (in shares) | 1,599 | ||
Vested (in shares) | (1,071) | ||
Canceled (in shares) | (110) | ||
Non-vested awards at end of period (in shares) | 2,473 | 2,055 | |
Weighted Average Grant Date Fair Value Per Share | |||
Non-vested awards at beginning of period (in dollars per share) | $ 10.38 | ||
Granted (in dollars per share) | 8.97 | ||
Vested (in dollars per share) | 9.78 | ||
Canceled (in dollars per share) | 9.09 | ||
Non-vested awards at end of period (in dollars per share) | $ 9.79 | $ 10.38 | |
Fair value of awards granted (in dollars) | $ 14.3 | $ 12.1 | $ 11.9 |
Fair value of vested shares (in dollars) | 9.3 | $ 8.5 | $ 6.6 |
Unrecognized compensation | |||
Unrecognized stock-based compensation expenses (in dollars) | $ 12.7 | ||
Weighted-average period over which the expected unrecognized compensation cost is expected to be recognized | 1 year 9 months 18 days |
STOCK-BASED COMPENSATION - Cash
STOCK-BASED COMPENSATION - Cash Settled Performance Units (Details) - Cash-settled performance units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock-based payment awards | |||
Vesting period | 3 years | ||
Shares | |||
Non-vested awards at beginning of period (in shares) | 523 | ||
Granted (in shares) | 262 | ||
Vested (in shares) | (139) | ||
Canceled (in shares) | (137) | ||
Non-vested awards at end of period (in shares) | 509 | 523 | |
Weighted Average Grant Date Fair Value Per Share | |||
Non-vested awards at beginning of period (in dollars per share) | $ 10.22 | ||
Granted (in dollars per share) | 9.38 | ||
Vested (in dollars per share) | 12.91 | ||
Canceled (in dollars per share) | 9.42 | ||
Non-vested awards at end of period (in dollars per share) | $ 9.27 | $ 10.22 | |
Fair value of awards granted (in dollars) | $ 2.5 | $ 2.3 | $ 1.8 |
Cash paid upon vesting | 1.2 | $ 0.6 | $ 0.5 |
Unrecognized compensation | |||
Unrecognized stock-based compensation expenses (in dollars) | $ 3 | ||
Weighted-average period over which the expected unrecognized compensation cost is expected to be recognized | 1 year 10 months 24 days | ||
Minimum | |||
Stock-based payment awards | |||
Vesting percentage | 0% | ||
Maximum | |||
Stock-based payment awards | |||
Vesting percentage | 200% |
STOCK-BASED COMPENSATION - Empl
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Stock-based payment awards | |
Maximum annual contribution per employee | $ | $ 25,000 |
Maximum annual contribution per employee (as a percent) | 10% |
Number of shares authorized for issuance | 1,000,000 |
Remaining shares available for purchase | 429,250 |
Purchase discount rate | 5% |
Minimum | |
Stock-based payment awards | |
Purchase price of shares (as a percent of fair market value) | 85% |
Maximum | |
Stock-based payment awards | |
Purchase price of shares (as a percent of fair market value) | 100% |
STOCK-BASED COMPENSATION - Dire
STOCK-BASED COMPENSATION - Directors' Stock and Deferral Plan (Details) - Directors Stock And Deferral Plan | Dec. 31, 2022 shares |
Stock-based payment awards | |
Number of shares authorized for issuance | 100,000 |
Remaining shares available for purchase | 37,771 |
STOCK-BASED COMPENSATION - Comp
STOCK-BASED COMPENSATION - Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Total stock-based compensation expense | $ 14,497 | $ 10,520 | $ 12,072 |
Reversal of stock-based compensation expense | 2,100 | ||
Equity awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Total stock-based compensation expense | 11,928 | 11,336 | 10,551 |
Liability awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | |||
Total stock-based compensation expense | $ 2,569 | $ (816) | $ 1,521 |
RETIREMENT BENEFIT PLAN (Detail
RETIREMENT BENEFIT PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefit Plan | |||
Employer percentage match of employees contribution | 100% | ||
Employer maximum contribution as a percentage of gross pay | 5% | ||
Employer matching contributions for retirement plan (in dollars) | $ 4.9 | $ 4.4 | $ 5.6 |
LONG-LIVED AND OTHER ASSET IM_3
LONG-LIVED AND OTHER ASSET IMPAIRMENT (Details) hp in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) CompressorUnit hp | Dec. 31, 2021 USD ($) CompressorUnit hp | Dec. 31, 2020 USD ($) CompressorUnit hp | |
Impaired Long-Lived Assets Held and Used | ||||
Goodwill impairment | $ 99,800 | $ 99,830 | ||
Other asset impairment | $ 1,700 | |||
Idle Compressor Units | ||||
Impaired Long-Lived Assets Held and Used | ||||
Idle compressors retired from the active fleet | CompressorUnit | 145 | 230 | 730 | |
Horsepower of idle compressors retired from the active fleet | hp | 100 | 85 | 261 | |
Impairment recorded on idle compressors retired from the active fleet | $ 21,431 | $ 21,208 | $ 77,590 | |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income | Long-lived and other asset impairment | Long-lived and other asset impairment | Long-lived and other asset impairment |
RESTRUCTURING CHARGES - By segm
RESTRUCTURING CHARGES - By segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | |
Restructuring charges | ||||
Restructuring charges | $ 2,903 | $ 8,450 | ||
Severance costs | ||||
Restructuring charges | ||||
Restructuring charges | 1,717 | 6,952 | ||
Property disposal costs | ||||
Restructuring charges | ||||
Loss on sale | 915 | |||
Impairment loss | 583 | |||
Restructuring charges | 964 | 1,498 | ||
Organizational Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 1,695 | |||
Expected additional charges | $ 0 | |||
Organizational Restructuring | Severance costs | ||||
Restructuring charges | ||||
Restructuring charges | 1,695 | |||
Pandemic Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 1,717 | 5,257 | ||
Pandemic Restructuring | Severance costs | ||||
Restructuring charges | ||||
Restructuring charges | $ 5,300 | 1,717 | 5,257 | |
2021 Property Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 929 | |||
Expected additional charges | $ 0 | |||
2020 Property Restructuring | ||||
Restructuring charges | ||||
Loss on sale | 915 | |||
Impairment loss | 583 | |||
Restructuring charges | 35 | |||
2020 Property Restructuring | Property disposal costs | ||||
Restructuring charges | ||||
Restructuring charges | 1,500 | |||
Other Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 222 | |||
Corporate | ||||
Restructuring charges | ||||
Restructuring charges | 1,213 | 3,644 | ||
Corporate | Organizational Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 612 | |||
Corporate | Pandemic Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 956 | 1,534 | ||
Corporate | 2020 Property Restructuring | ||||
Restructuring charges | ||||
Loss on sale | 915 | |||
Impairment loss | 583 | |||
Restructuring charges | 35 | |||
Corporate | Other Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 222 | |||
Contract Operations | Operating | ||||
Restructuring charges | ||||
Restructuring charges | 1,545 | 2,963 | ||
Contract Operations | Operating | Organizational Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 458 | |||
Contract Operations | Operating | Pandemic Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 616 | 2,505 | ||
Contract Operations | Operating | 2021 Property Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 929 | |||
Aftermarket Services | Operating | ||||
Restructuring charges | ||||
Restructuring charges | 145 | 1,843 | ||
Aftermarket Services | Operating | Organizational Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | 625 | |||
Aftermarket Services | Operating | Pandemic Restructuring | ||||
Restructuring charges | ||||
Restructuring charges | $ 145 | $ 1,218 |
RESTRUCTURING CHARGES - By type
RESTRUCTURING CHARGES - By type (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring charges | |||
Restructuring charges | $ 2,903 | $ 8,450 | |
Organizational Restructuring | |||
Restructuring charges | |||
Restructuring charges | 1,695 | ||
Pandemic Restructuring | |||
Restructuring charges | |||
Restructuring charges | 1,717 | 5,257 | |
Severance costs | |||
Restructuring charges | |||
Restructuring charges | 1,717 | 6,952 | |
Severance costs | Organizational Restructuring | |||
Restructuring charges | |||
Restructuring charges | 1,695 | ||
Severance costs | Pandemic Restructuring | |||
Restructuring charges | |||
Restructuring charges | $ 5,300 | 1,717 | 5,257 |
Property disposal costs | |||
Restructuring charges | |||
Loss on sale | 915 | ||
Impairment loss | 583 | ||
Other exit costs | 964 | ||
Restructuring charges | 964 | $ 1,498 | |
Other restructuring costs | |||
Restructuring charges | |||
Restructuring charges | $ 222 |
INCOME TAXES - Current and Defe
INCOME TAXES - Current and Deferred Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax provision (benefit): | |||
U.S. federal | $ (1) | $ (99) | |
State | $ 1,064 | 366 | 326 |
Total current | 1,064 | 365 | 227 |
Deferred tax provision (benefit): | |||
U.S. federal | 14,320 | 8,800 | (17,246) |
State | 909 | 1,579 | (518) |
Total deferred | 15,229 | 10,379 | (17,764) |
Provision for (benefit from) income taxes | $ 16,293 | $ 10,744 | $ (17,537) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Effective Tax Rate to Statutory Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Effective income tax rate (as a percent) | 27% | 28% | 20% |
U.S. statutory tax rate (as a percent) | 21% | 21% | 21% |
Effective Income Tax Rate Reconciliation | |||
Income taxes at U.S. federal statutory rate | $ 12,724 | $ 8,182 | $ (18,056) |
Net state income taxes | 1,795 | 1,374 | (817) |
Tax credits | (26) | (720) | (1,256) |
Unrecognized tax benefits | 17 | 598 | 772 |
Valuation allowances and write off of tax attributes | (68) | (167) | 236 |
Executive compensation limitation | 1,901 | 1,559 | 1,159 |
Stock | 152 | 162 | 538 |
Other | (202) | (244) | (113) |
Provision for (benefit from) income taxes | $ 16,293 | $ 10,744 | $ (17,537) |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Asset (Liability) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax assets: | ||||
Net operating loss carryforwards | $ 191,916 | $ 196,654 | ||
Interest expense limitation carryforward | 19,327 | |||
Accrued liabilities | 4,979 | 4,527 | ||
Other | 12,834 | 12,503 | ||
Deferred tax assets, gross | 229,056 | 213,684 | ||
Valuation allowances | (607) | (735) | $ (1,027) | $ (822) |
Total deferred tax assets | 228,449 | 212,949 | ||
Deferred tax liabilities: | ||||
Property, plant and equipment | (8,386) | (7,762) | ||
Basis difference in the Partnership | (181,377) | (151,469) | ||
Other | (6,187) | (6,975) | ||
Total deferred tax liabilities | (195,950) | (166,206) | ||
Net deferred tax asset | 32,499 | 46,743 | ||
Deferred tax assets | 33,353 | 47,879 | ||
Deferred tax liabilities | $ 854 | $ 1,136 | ||
U.S. statutory tax rate (as a percent) | 21% | 21% | 21% |
INCOME TAXES - Tax Attributes a
INCOME TAXES - Tax Attributes and Valuation Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards | |||
Balance at beginning of period, Valuation allowance | $ (735) | $ (1,027) | $ (822) |
Additions to valuation allowance | (88) | (205) | |
Reductions to valuation allowance | 216 | 292 | |
Balance at end of period, Valuation allowance | (607) | (735) | $ (1,027) |
Deferred tax assets net | 228,449 | 212,949 | |
Domestic | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards | 848,500 | ||
Operating loss carryforward not subject to expiration | 629,200 | ||
Tax credit carryforward | 3,000 | ||
Interest expense limitation carryforwards | 86,400 | ||
State | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards | 314,800 | ||
Operating loss carryforward not subject to expiration | 169,900 | ||
NOL valuation allowance | 600 | $ 700 | |
Interest expense limitation carryforwards | $ 26,500 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefit Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of the unrecognized tax benefit | |||
Beginning balance | $ 19,594 | $ 18,892 | $ 18,453 |
Additions based on tax positions related to current year | 2,151 | 2,246 | 2,397 |
Additions based on tax positions related to prior years | 6 | 632 | |
Reductions based on tax positions related to prior years | (105) | (138) | (73) |
Reductions based on lapse of statute of limitations | (1,995) | (2,038) | (1,885) |
Ending balance | $ 19,651 | $ 19,594 | $ 18,892 |
INCOME TAXES - Unrecognized T_2
INCOME TAXES - Unrecognized Tax Benefit Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income taxes | ||||
Unrecognized tax benefits | $ 19,651 | $ 19,594 | $ 18,892 | $ 18,453 |
Unrecognized tax benefits, Income tax penalties and interest accrued | 2,100 | 2,200 | 2,100 | |
Income tax interest and penalty expenses | 0 | 100 | 100 | |
Indemnification asset, discontinued operations | 7,900 | 7,900 | ||
Potential decrease in unrecognized tax benefit in next twelve months | 2,700 | |||
Exterran Corporation | Spinoff | ||||
Income taxes | ||||
Indemnification asset, discontinued operations | 7,868 | 7,868 | ||
Continuing Operations | ||||
Income taxes | ||||
Unrecognized tax benefits that would impact tax rate if recognized | 1,100 | 2,100 | 2,900 | |
Discontinued Operations. | ||||
Income taxes | ||||
Unrecognized tax benefits that would impact tax rate if recognized | $ 7,900 | $ 7,900 | $ 7,900 |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE - Calculation (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EARNINGS PER COMMON SHARE | |||
Net income (loss) | $ 44,296 | $ 28,217 | $ (68,445) |
Allocation of earnings to participating securities | (1,429) | (1,172) | (1,338) |
Net income (loss) attributable to common stockholders, basic | 42,867 | 27,045 | (69,783) |
Net income (loss) attributable to common stockholders, diluted | $ 42,867 | $ 27,045 | $ (69,783) |
Weighted average common shares outstanding used in basic net income (loss) per common share (in shares) | 153,281 | 151,684 | 150,828 |
Effect of dilutive securities: | |||
Performance-based restricted stock units (in shares) | 125 | 144 | |
ESPP shares (in shares) | 4 | 2 | |
Weighted average common shares outstanding used in diluted income (loss) per common share (in shares) | 153,410 | 151,830 | 150,828 |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE - Anti-dilutive Shares (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Anti-dilutive shares excluded from diluted income (loss) per common share | ||
Net dilutive potential common shares issuable (shares) | 31 | 167 |
Stock options | ||
Anti-dilutive shares excluded from diluted income (loss) per common share | ||
Net dilutive potential common shares issuable (shares) | 31 | 96 |
Performance-based restricted stock units | ||
Anti-dilutive shares excluded from diluted income (loss) per common share | ||
Net dilutive potential common shares issuable (shares) | 54 | |
ESPP shares | ||
Anti-dilutive shares excluded from diluted income (loss) per common share | ||
Net dilutive potential common shares issuable (shares) | 17 |
DERIVATIVES AND HEDGING - Inter
DERIVATIVES AND HEDGING - Interest Rate Swaps (Details) - Interest rate swap, March 2022 expiration $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | |
Notional Disclosures | ||
Number of interest rate swaps that expired | item | 3 | |
Notional value of interest rate swaps that expired | $ 300 | |
Designated as hedging instruments | ||
Notional Disclosures | ||
Notional amount of interest rate swaps | $ 175 | |
Not designated as hedging instruments | ||
Notional Disclosures | ||
Number of interest rate swaps dedesignated | item | 1 | |
Notional value dedesignated | $ 125 | |
Fair value of derivative prior to dedesignation | $ 1.6 |
DERIVATIVES AND HEDGING - Effec
DERIVATIVES AND HEDGING - Effect of Derivative Instruments on Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivatives | ||
Derivative liabilities | $ 1,300 | |
Interest rate swaps | ||
Derivatives | ||
Derivative liabilities | $ 1,250 | |
Derivative Liability, Statement of Financial Position | Accrued liabilities | Accrued liabilities |
Designated as hedging instruments | Interest rate swaps | ||
Derivatives | ||
Derivative liabilities | $ 727 | |
Not designated as hedging instruments | Interest rate swaps | ||
Derivatives | ||
Derivative liabilities | $ 523 |
DERIVATIVES AND HEDGING - Eff_2
DERIVATIVES AND HEDGING - Effect of Derivative Instruments on Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effect of derivative instruments on results of operations | |||
Interest expense | $ 101,259 | $ 108,135 | $ 105,716 |
Interest rate swaps | |||
Effect of derivative instruments on results of operations | |||
Interest expense | 101,259 | 108,135 | 105,716 |
Designated as hedging instruments | Interest rate swaps | |||
Effect of derivative instruments on results of operations | |||
Pre-tax loss recognized in other comprehensive income | (512) | (1,219) | (8,459) |
Designated as hedging instruments | Interest rate swaps | Interest expense | |||
Effect of derivative instruments on results of operations | |||
Pre-tax loss reclassified from accumulated other comprehensive loss into interest expense | (1,758) | (6,308) | $ (3,878) |
Not designated as hedging instruments | Interest rate swaps | |||
Effect of derivative instruments on results of operations | |||
Gain recognized in interest expense | $ 523 | $ 1,088 | |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income | Interest expense | Interest expense |
FAIR VALUE MEASUREMENTS - FV on
FAIR VALUE MEASUREMENTS - FV on Recurring Basis - Investment (Details) - Ecotec $ in Millions | Dec. 31, 2022 USD ($) |
Fair value measurement of assets and liabilities | |
Ownership interest (as a percent) | 22.70% |
Investment | $ 12.8 |
Equity Securities, FV-NI, Fair Value by Fair Value Hierarchy Level [Extensible Enumeration] | Level 3 |
FAIR VALUE MEASUREMENTS - Inves
FAIR VALUE MEASUREMENTS - Investment unobservable inputs (Details) - Ecotec - Equity investment - Level 3 | Dec. 31, 2022 |
Discounted cash flow | WACC | Minimum | |
Fair value measurement of assets and liabilities | |
Equity Securities, FV-NI, Measurement Input | 0 |
Discounted cash flow | WACC | Maximum | |
Fair value measurement of assets and liabilities | |
Equity Securities, FV-NI, Measurement Input | 0.221 |
Discounted cash flow | WACC | Median | |
Fair value measurement of assets and liabilities | |
Equity Securities, FV-NI, Measurement Input | 0.113 |
Guideline public company | Revenue multiple | Minimum | |
Fair value measurement of assets and liabilities | |
Equity Securities, FV-NI, Measurement Input | 1.7 |
Guideline public company | Revenue multiple | Maximum | |
Fair value measurement of assets and liabilities | |
Equity Securities, FV-NI, Measurement Input | 8 |
Guideline public company | Revenue multiple | Median | |
Fair value measurement of assets and liabilities | |
Equity Securities, FV-NI, Measurement Input | 3.9 |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of changes in FV of investment (Details) - Ecotec $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Reconciliation of changes in fair value | |
Unrealized loss | $ (1,900) |
Equity investment | |
Reconciliation of changes in fair value | |
Purchases of equity interests | 14,667 |
Unrealized loss | (1,864) |
Balance, end of period | $ 12,803 |
FAIR VALUE MEASUREMENTS - Measu
FAIR VALUE MEASUREMENTS - Measured at FV on Recurring Basis - Interest Rate Swaps (Details) $ in Millions | Dec. 31, 2021 USD ($) |
FAIR VALUE MEASUREMENTS | |
Derivative liabilities | $ 1.3 |
Derivative Liability, Fair Value by Fair Value Hierarchy Level | us-gaap:FairValueInputsLevel2Member |
FAIR VALUE MEASUREMENTS - Mea_2
FAIR VALUE MEASUREMENTS - Measured on Nonrecurring Basis (Details) - Level 3 - Impaired Long-Lived Assets - Compressors $ in Thousands | Dec. 31, 2022 USD ($) $ / hp Y | Dec. 31, 2021 USD ($) $ / hp |
Measurement Input, Weighted average disposal period | ||
Fair value | ||
Measurement input | Y | 4 | |
Measurement Input, Sale proceeds | Minimum | ||
Fair value | ||
Measurement input | 0 | 0 |
Measurement Input, Sale proceeds | Maximum | ||
Fair value | ||
Measurement input | 621 | 621 |
Measurement Input, Sale proceeds | Weighted average | ||
Fair value | ||
Measurement input | 47 | 35 |
Measurement Input, Discount for market liquidity | ||
Fair value | ||
Measurement input | 0.51 | 0.64 |
Nonrecurring Basis | ||
Fair value | ||
Impaired assets | $ | $ 1,961 | $ 4,380 |
FAIR VALUE MEASUREMENTS - Other
FAIR VALUE MEASUREMENTS - Other Financial Instruments (Details) - Fixed Rate Debt - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,297,084 | $ 1,296,325 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term debt, fair value | $ 1,214,000 | $ 1,361,000 |
Long-Term Debt, Fair Value by Fair Value Hierarchy Level | us-gaap:FairValueInputsLevel2Member | us-gaap:FairValueInputsLevel2Member |
DISCONTINUED OPERATIONS - Asset
DISCONTINUED OPERATIONS - Assets and liabilities of discontinued operations (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets and liabilities of discontinued operations | ||
Other assets, discontinued operations | $ 7,900 | $ 7,900 |
Assets of discontinued operations | 8,586 | 9,811 |
Liabilities of discontinued operations | 7,868 | 7,868 |
Spinoff | Exterran Corporation | ||
Assets and liabilities of discontinued operations | ||
Other assets, discontinued operations | 7,868 | 7,868 |
Deferred tax assets, discontinued operations | 718 | 1,943 |
Assets of discontinued operations | 8,586 | 9,811 |
Deferred tax liabilities, discontinued operations | 7,868 | 7,868 |
Liabilities of discontinued operations | $ 7,868 | $ 7,868 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) director | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Related Party Transaction | |||
Accounts receivable, related party | $ 2,998 | $ 3,675 | |
Affiliated Entity | Old Ocean Reserves | Archrock, Inc. | |||
Related Party Transaction | |||
Ownership interest (percent) | 10.80% | ||
Affiliated Entity | Old Ocean Reserves | |||
Related Party Transaction | |||
Number of directors shareholders have right to designate | director | 1 | ||
Minimum ownership interest of outstanding shares required to elect a board of director (percent) | 7.50% | ||
Affiliated Entity | Hilcorp and affiliates | |||
Related Party Transaction | |||
Revenue from related party transactions | $ 36,200 | 38,200 | $ 40,300 |
Due from related party | $ 3,000 | $ 3,700 |
SEGMENT INFORMATION - Number (D
SEGMENT INFORMATION - Number (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
SEGMENT INFORMATION | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Revenue a
SEGMENT INFORMATION - Revenue and Gross Margin by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue and other financial information by reportable segment | |||
Revenue | $ 845,568 | $ 781,461 | $ 874,970 |
Gross margin | 426,084 | 422,544 | 497,777 |
Capital expenditures | 239,867 | 97,885 | 140,302 |
Contract Operations | |||
Revenue and other financial information by reportable segment | |||
Revenue | 677,801 | 648,311 | 738,918 |
Gross margin | 398,903 | 403,825 | 477,831 |
Aftermarket Services | |||
Revenue and other financial information by reportable segment | |||
Revenue | 167,767 | 133,150 | 136,052 |
Gross margin | 27,181 | 18,719 | 19,946 |
Operating | Contract Operations | |||
Revenue and other financial information by reportable segment | |||
Capital expenditures | 237,246 | 94,863 | 133,492 |
Operating | Aftermarket Services | |||
Revenue and other financial information by reportable segment | |||
Capital expenditures | 1,964 | 2,675 | 5,308 |
Corporate | |||
Revenue and other financial information by reportable segment | |||
Capital expenditures | $ 657 | $ 347 | $ 1,502 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Segment Assets to Total Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Segments | ||
Assets associated with discontinued operations | $ 8,586 | $ 9,811 |
Assets | 2,598,750 | 2,589,966 |
Operating | ||
Segments | ||
Assets | 2,492,427 | 2,479,225 |
Operating | Contract Operations | ||
Segments | ||
Assets | 2,431,145 | 2,429,805 |
Operating | Aftermarket Services | ||
Segments | ||
Assets | 61,282 | 49,420 |
Corporate | ||
Segments | ||
Assets | $ 97,737 | $ 100,930 |
SEGMENT INFORMATION - Reconci_2
SEGMENT INFORMATION - Reconciliation of Net Income to Gross Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation Net Income (Loss) to Gross Margin | ||||
Total gross margin | $ 426,084 | $ 422,544 | $ 497,777 | |
Less: | ||||
Selling, general and administrative | 117,184 | 107,167 | 105,100 | |
Depreciation and amortization | 164,259 | 178,946 | 193,138 | |
Long-lived and other asset impairment | 21,442 | 21,397 | 79,556 | |
Goodwill impairment | $ 99,800 | 99,830 | ||
Restructuring charges | 2,903 | 8,450 | ||
Interest expense | 101,259 | 108,135 | 105,716 | |
Debt extinguishment loss | 3,971 | |||
Gain on sale of assets, net | (40,494) | (30,258) | (10,643) | |
Other expense (income), net | 1,845 | (4,707) | (1,359) | |
Income (loss) before income taxes | $ 60,589 | $ 38,961 | $ (85,982) |