PART I [Business](index=3&type=section&id=Item%201.%20Business) USA Compression Partners, LP is a leading independent provider of natural gas compression services in the U.S., operating under fixed-fee contracts for infrastructure applications in key shale plays [Overview](index=4&type=section&id=Overview) The company is a major U.S. natural gas compression service provider with a large fleet, operating in key shale plays under fixed-fee, take-or-pay contracts - As of December 31, 2019, the company's fleet totaled **3,682,968 horsepower**, with an additional **56,500 horsepower** on order for 2020 delivery[16](index=16&type=chunk) - The company provides compression services in numerous U.S. shale plays, including the Utica, Marcellus, Permian Basin, and Eagle Ford[17](index=17&type=chunk) - Services are provided under fixed-fee, take-or-pay contracts with initial terms typically ranging from six months to five years, minimizing direct exposure to commodity price fluctuations[20](index=20&type=chunk)[21](index=21&type=chunk) [Recent Developments](index=5&type=section&id=Recent%20Developments) The company completed significant financial and strategic transactions, including a $1.7 billion acquisition, a $750 million senior notes issuance, and a $500 million preferred unit placement, while increasing credit facility capacity Recent Senior Notes Issuances | Notes Series | Principal Amount | Interest Rate | Issue Date | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | Senior Notes 2027 | $750.0 million | 6.875% | Mar 7, 2019 | Sep 1, 2027 | | Senior Notes 2026 | $725.0 million | 6.875% | Mar 23, 2018 | Apr 1, 2026 | - On April 2, 2018, the company acquired the USA Compression Predecessor (CDM) from ETO for approximately **$1.7 billion**, consisting of cash, common units, and Class B units[29](index=29&type=chunk) - The company completed a **$500 million** private placement of Series A Preferred Units and Warrants and increased its credit facility borrowing capacity from **$1.1 billion** to **$1.6 billion** on the Transactions Date[33](index=33&type=chunk)[35](index=35&type=chunk) [Our Operations](index=7&type=section&id=Our%20Operations) The company operates a modern, large-horsepower compression fleet, providing comprehensive services to over 375 energy companies, with significant revenue concentration and reliance on key suppliers Compression Fleet Summary as of Dec 31, 2019 | Unit Horsepower | Fleet Horsepower | Number of Units | Total Horsepower (incl. on order) | Percent of Total Horsepower | | :--- | :--- | :--- | :--- | :--- | | <400 (Small) | 516,674 | 3,031 | 516,674 | 13.8% | | >400 (Large) | 3,166,294 | 2,420 | 3,222,794 | 86.2% | | **Total** | **3,682,968** | **5,451** | **3,739,468** | **100.0%** | Key Operating Data (Year Ended Dec 31) | Operating Data | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Fleet horsepower (at period end) | 3,682,968 | 3,597,097 | 2.4% | | Revenue generating horsepower (at period end) | 3,310,024 | 3,262,470 | 1.5% | | Average revenue generating horsepower | 3,279,374 | 2,760,029 | 18.8% | | Horsepower utilization (at period end) | 93.7% | 94.0% | (0.3)% | | Average horsepower utilization | 94.1% | 91.4% | 3.0% | - The top ten customers accounted for approximately **33%** of revenue for the year ended December 31, 2019[47](index=47&type=chunk) - The company relies on a limited number of suppliers for critical components, including Caterpillar for engines and Ariel Corporation for compressor frames[48](index=48&type=chunk) [Environmental and Safety Regulations](index=10&type=section&id=Environmental%20and%20Safety%20Regulations) The company is subject to stringent environmental and safety regulations, including air emissions, climate change, and hydraulic fracturing rules, which can incur significant compliance costs and liabilities - The company is subject to complex environmental regulations, and failure to comply can result in significant penalties and operational interruptions[53](index=53&type=chunk) - Under standard contracts, the customer is typically responsible for obtaining air emissions permits. However, the company must comply with regulations like the EPA's Quad Z rule, which requires emissions control equipment on certain engines[55](index=55&type=chunk)[56](index=56&type=chunk) - Climate change legislation and regulations concerning greenhouse gases (GHGs) could increase compliance costs, restrict operations, or reduce demand for services. The EPA has adopted rules for GHG reporting and emissions from power plants[62](index=62&type=chunk)[64](index=64&type=chunk)[71](index=71&type=chunk) - Increased regulation of hydraulic fracturing, a key process for many customers, under laws like the Safe Drinking Water Act (SDWA) could lead to delays and increased costs, potentially reducing demand for compression services[75](index=75&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, investment, and tax risks, including cash flow insufficiency, commodity price dependence, customer concentration, high debt, limited unitholder rights, and potential corporate tax treatment [Risks Related to Our Business](index=15&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include insufficient cash for distributions, dependence on oil and gas production, customer concentration, intense competition, high debt levels, and increasing environmental compliance costs - The company requires **$50.7 million** per quarter for common unit distributions and **$12.2 million** per quarter for preferred unit distributions, which must be paid first[84](index=84&type=chunk)[85](index=85&type=chunk) - The ten largest customers accounted for approximately **33%** of revenue for the year ended December 31, 2019[90](index=90&type=chunk) - As of December 31, 2019, total debt was **$1.9 billion**. The credit agreement requires maintaining a maximum leverage ratio, which steps down from **5.5x** to **5.0x** after December 31, 2019[108](index=108&type=chunk)[109](index=109&type=chunk) - Goodwill and other intangible assets totaled **$619.4 million** and **$363.2 million**, respectively, as of December 31, 2019, and are subject to impairment risk from a prolonged economic downturn[121](index=121&type=chunk) [Risks Inherent in an Investment in Us](index=27&type=section&id=Risks%20Inherent%20in%20an%20Investment%20in%20Us) Investment risks stem from the MLP structure, including limited unitholder voting rights, conflicts of interest with the General Partner controlled by ETO, and the General Partner's call right if ownership exceeds 80% - Common unitholders have limited voting rights and cannot elect the General Partner or its board of directors[152](index=152&type=chunk) - Energy Transfer (ETO) controls the General Partner, creating conflicts of interest where it may favor its own interests over those of the Partnership's unitholders[154](index=154&type=chunk) - The Partnership Agreement modifies and reduces the fiduciary duties the General Partner would otherwise owe to unitholders under state law[158](index=158&type=chunk)[161](index=161&type=chunk) - If the General Partner and its affiliates own more than **80%** of outstanding common units, they have the right to purchase all remaining units at the current market price[169](index=169&type=chunk) [Tax Risks to Common Unitholders](index=32&type=section&id=Tax%20Risks%20to%20Common%20Unitholders) Key tax risks include potential corporate tax treatment, unitholders being allocated taxable income without cash distributions, and new IRS audit rules potentially reducing distributable cash - If the partnership were treated as a corporation for tax purposes, its cash available for distribution would be substantially reduced due to entity-level taxation[176](index=176&type=chunk)[178](index=178&type=chunk) - Unitholders are required to pay taxes on their share of the partnership's taxable income, regardless of whether they receive cash distributions[183](index=183&type=chunk) - Under new IRS audit rules, the partnership may be required to pay taxes resulting from audit adjustments directly, which could reduce cash available for distribution to current unitholders, even for adjustments related to prior years[187](index=187&type=chunk) [Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[203](index=203&type=chunk) [Properties](index=36&type=section&id=Item%202.%20Properties) The company does not own material storage or maintenance facilities, with its headquarters comprising 19,297 square feet of leased office space in Austin, Texas - The company's headquarters is located at 111 Congress Avenue, Austin, Texas 78701, consisting of **19,297 square feet** of leased office space[204](index=204&type=chunk) [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal matters, but management expects no material adverse effect on its financial position, results, or cash flows - Management does not expect the resolution of ordinary course legal matters to have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows[205](index=205&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports no mine safety disclosures - None[206](index=206&type=chunk) PART II [Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20For%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The Partnership's common units trade on the NYSE, with 96.7 million common and 500,000 preferred units outstanding as of February 2020, and quarterly distributions prioritize preferred unitholders - Common units trade on the NYSE under the symbol "USAC"[212](index=212&type=chunk) - As of February 13, 2020, there were **96,650,859 common units** and **500,000 Preferred Units** outstanding[209](index=209&type=chunk)[210](index=210&type=chunk) - The partnership agreement requires quarterly distribution of all "available cash" after establishing reserves for business conduct, legal compliance, and future distributions[214](index=214&type=chunk) [Selected Financial Data](index=38&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides five years of selected historical financial data, including key income statement, balance sheet, and cash flow items, along with definitions and reconciliations of non-GAAP measures [Selected Historical Financial Data](index=38&type=section&id=Selected%20Historical%20Financial%20Data) Total revenues increased to **$698.4 million** in 2019, with net income reaching **$39.1 million**, and Adjusted EBITDA and DCF showing strong growth, while total assets remained stable at **$3.7 billion** Selected Financial Data (in thousands) | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Total revenues | $698,365 | $584,352 | $276,671 | | Gross operating margin | $471,062 | $369,628 | $151,467 | | Operating income (loss) | $168,384 | $65,311 | $(262,668) | | Net income (loss) | $39,132 | $(10,551) | $(264,734) | | Adjusted EBITDA | $419,640 | $320,475 | $130,348 | | Distributable Cash Flow (DCF) | $221,868 | $177,757 | $109,326 | | Capital expenditures | $199,928 | $241,179 | $175,508 | | Total assets (at period end) | $3,730,407 | $3,774,649 | $1,718,953 | | Long-term debt, net (at period end) | $1,852,360 | $1,759,058 | $— | [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP measures like Gross Operating Margin, Adjusted EBITDA, and Distributable Cash Flow (DCF) to assess performance, with 2019 Adjusted EBITDA at **$419.6 million** and DCF at **$221.9 million** - Gross Operating Margin is defined as revenue less cost of operations, exclusive of depreciation and amortization expense[225](index=225&type=chunk) - Adjusted EBITDA is used by management to assess financial performance without regard to financing methods, capital structure, or historical cost basis[226](index=226&type=chunk) - Distributable Cash Flow (DCF) is used to compare cash flows generated to the cash distributions expected to be paid to common unitholders[234](index=234&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (2019, in thousands) | Line Item | Amount | | :--- | :--- | | **Net income** | **$39,132** | | Interest expense, net | $127,146 | | Depreciation and amortization | $231,447 | | Income tax expense | $2,186 | | **EBITDA** | **$399,911** | | Other adjustments (unit-based comp, impairments, etc.) | $19,729 | | **Adjusted EBITDA** | **$419,640** | Reconciliation of Net Income to DCF (2019, in thousands) | Line Item | Amount | | :--- | :--- | | **Net income** | **$39,132** | | Add back non-cash items (D&A, etc.) | $265,257 | | Less: Distributions on Preferred Units | $(48,750) | | Less: Maintenance capital expenditures | $(29,592) | | Other adjustments | $(4,179) | | **DCF** | **$221,868** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting a **19.5%** revenue increase in 2019 driven by higher horsepower and pricing, alongside liquidity, capital resources, debt, and critical accounting policies [General Trends and Outlook](index=50&type=section&id=General%20Trends%20and%20Outlook) Management anticipates continued demand for compression services, driven by forecasted increases in U.S. natural gas production to **94.7 Bcf/d** and crude oil production to **13.3 million bbl/d** in 2020 - The EIA forecasts U.S. dry natural gas production to increase by **3%** to **94.7 Bcf/d** in 2020, supporting demand for compression services[267](index=267&type=chunk) - Henry Hub natural gas spot prices are expected to average **$2.33/MMBtu** in 2020, down from **$2.57/MMBtu** in 2019[268](index=268&type=chunk) - U.S. crude oil production is forecasted to average **13.3 million bbl/d** in 2020, up **9%** from 2019, with most growth coming from the Permian and Delaware Basins, which will increase demand for handling associated natural gas[273](index=273&type=chunk) [Financial Results of Operations](index=53&type=section&id=Financial%20Results%20of%20Operations) Total revenues increased **19.5%** to **$698.4 million** in 2019, with gross operating margin up **27.4%** to **$471.1 million**, and net income turning around to **$39.1 million** from a **$10.6 million** loss Results of Operations (Year Ended Dec 31, in thousands) | Line Item | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Total revenues | $698,365 | $584,352 | 19.5% | | Gross operating margin | $471,062 | $369,628 | 27.4% | | Operating income | $168,384 | $65,311 | 157.8% | | Interest expense, net | $(127,146) | $(78,377) | 62.2% | | Net income (loss) | $39,132 | $(10,551) | 470.9% | - The **$117.3 million** increase in contract operations revenue was driven by the inclusion of the Partnership's historical assets for the full year and a **3.5%** increase in average revenue per revenue generating horsepower per month[287](index=287&type=chunk) - The **$4.6 million** decrease in SG&A expense was mainly due to a **$5.9 million** decrease in transaction and severance expenses related to the 2018 Transactions[292](index=292&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is driven by operating cash flow, which increased to **$300.6 million** in 2019, and a credit facility with **$484.4 million** available capacity, against **$2.8 billion** in total contractual obligations Cash Flow Summary (Year Ended Dec 31, in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $300,580 | $226,340 | | Net cash used in investing activities | $(144,490) | $(779,663) | | Net cash provided by (used in) financing activities | $(156,179) | $549,409 | - 2020 budgeted capital expenditures are **$110.0-$120.0 million** for expansion and approximately **$32.0 million** for maintenance[315](index=315&type=chunk)[316](index=316&type=chunk) - As of December 31, 2019, the company had **$484.4 million** of available borrowing capacity under its **$1.6 billion** credit facility[317](index=317&type=chunk) Contractual Cash Obligations as of Dec 31, 2019 (in thousands) | Obligation | Total | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Long-term debt | $1,877,722 | $— | $— | $402,722 | $1,475,000 | | Interest on long-term debt | $807,487 | $123,253 | $246,507 | $208,274 | $229,453 | | Equipment and capital purchases | $49,267 | $49,267 | $— | $— | $— | | Operating and finance lease obligations | $36,078 | $5,311 | $8,587 | $7,773 | $14,407 | | **Total** | **$2,770,554** | **$177,831** | **$255,094** | **$618,769** | **$1,718,860** | [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies include revenue recognition for fixed-fee contracts, annual goodwill impairment testing (no impairment in 2019), and long-lived asset impairment reviews, which resulted in **$5.9 million** and **$8.7 million** charges in 2019 and 2018 respectively - Revenue from contract operations is recognized ratably over the term of the fixed-fee contracts as services are provided[331](index=331&type=chunk) - Goodwill is tested for impairment annually on October 1. The 2019 and 2018 qualitative assessments concluded that it was not more likely than not that the fair value of the reporting unit was less than its carrying value[334](index=334&type=chunk)[337](index=337&type=chunk) - The company recorded impairment charges on compression equipment of **$5.9 million** in 2019 and **$8.7 million** in 2018 after evaluating the future deployment prospects of its idle fleet[342](index=342&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces indirect commodity price risk and direct interest rate risk, with a **1%** rate change impacting annual interest expense by approximately **$4.0 million**, alongside credit risk from energy industry receivables - The company has no direct exposure to commodity prices but is indirectly affected by long-term price levels that influence customer production and demand for compression services[346](index=346&type=chunk) - As of December 31, 2019, the company had **$402.7 million** of variable-rate debt. A **one percent** change in the effective interest rate would impact annual interest expense by approximately **$4.0 million**[347](index=347&type=chunk) [Financial Statements and Supplementary Data](index=61&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the consolidated financial statements and supplementary data presented in Part IV, Item 15 of the report - The financial statements and supplementary data are presented in Part IV, Item 15 of the Form 10-K[350](index=350&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=61&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[351](index=351&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with the independent auditor issuing an unqualified opinion - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of December 31, 2019[352](index=352&type=chunk) - Management assessed internal control over financial reporting as effective as of December 31, 2019, using the criteria set forth by the 2013 COSO framework[355](index=355&type=chunk) - The independent auditor, Grant Thornton LLP, issued an unqualified opinion on the effectiveness of the Partnership's internal control over financial reporting as of December 31, 2019[356](index=356&type=chunk) [Other Information](index=64&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[365](index=365&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=65&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The Partnership is managed by its General Partner, controlled by ETO, with a nine-member Board including three independent directors, and established Audit and Compensation Committees - The General Partner, owned by ETO, manages the Partnership's operations. Its Board has nine members, three of whom are independent[368](index=368&type=chunk)[369](index=369&type=chunk) - The Board has standing Audit and Compensation committees. The Audit Committee is comprised solely of independent directors[375](index=375&type=chunk)[377](index=377&type=chunk) - The Board has adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics, which are available on the company's website[381](index=381&type=chunk) [Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) The executive compensation program emphasizes competitive, at-risk incentive pay, including annual cash bonuses based on financial and safety targets, and long-term equity awards in phantom units - The compensation philosophy emphasizes performance-based, "at-risk" pay, targeting the **50th percentile** of the market for total compensation[411](index=411&type=chunk) - The annual cash bonus for 2019 was based on achieving targets for Adjusted EBITDA (**30%** weighting), DCF (**30%**), Leverage Ratio (**30%**), and Safety (**10%**)[427](index=427&type=chunk) - Long-term incentives are granted as time-based phantom units with a five-year incremental vesting schedule (**60%** after year three, **40%** after year five)[440](index=440&type=chunk) 2019 Summary Compensation for NEOs | Name | Position | Total Compensation ($) | | :--- | :--- | :--- | | Eric D. Long | President and CEO | 5,459,946 | | Matthew C. Liuzzi | CFO and Treasurer | 2,629,726 | | William G. Manias | COO | 2,301,985 | | David A. Smith | VP, President, Northeast Region | 1,502,392 | | Sean T. Kimble | VP, Human Resources | 1,294,056 | - The CEO pay ratio for 2019 was estimated to be **46.2 to 1**, based on the CEO's total compensation of **$5,459,946** and the median employee's total compensation of **$118,073**[495](index=495&type=chunk)[498](index=498&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters](index=90&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Unitholder%20Matters) This section details beneficial ownership of common units as of February 2020, with Energy Transfer Operating, L.P. holding **47.65%** and all directors and officers owning **1.18%**, alongside information on LTIP authorized securities Security Ownership of Certain Beneficial Owners (as of Feb 13, 2020) | Name of Beneficial Owner | Percentage of Common Units | | :--- | :--- | | Energy Transfer Operating, L.P. | 47.65% | | Invesco Ltd. | 19.30% | | EIG Veteran Equity Aggregator, L.P. | 11.55% | | All directors and officers as a group (14 persons) | 1.18% | - As of December 31, 2019, there were **6,805,000** securities remaining available for future issuance under the company's equity compensation plan (LTIP)[511](index=511&type=chunk) [Certain Relationships and Related Party Transactions, and Director Independence](index=93&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Party%20Transactions%2C%20and%20Director%20Independence) The company has a Services Agreement with USAC Management and engages in transactions with Energy Transfer affiliates, recognizing **$20.0 million** in revenue from them in 2019, with provisions for resolving conflicts of interest - The Partnership reimburses USAC Management, an affiliate of the General Partner, for all expenses incurred on its behalf, including employee compensation[515](index=515&type=chunk) Key Transactions with Energy Transfer (2019) | Transaction | Amount/Value | | :--- | :--- | | Quarterly distributions paid to Energy Transfer | $86.6 million | | Revenue for compression services | $20.0 million | | Receivable from ETO for sales tax contingency | $44.9 million | - The Partnership Agreement contains provisions to resolve conflicts of interest with the General Partner, which may be approved by a conflicts committee, a majority vote of unaffiliated unitholders, or determined by the General Partner to be on fair terms[522](index=522&type=chunk) [Principal Accountant Fees and Services](index=95&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section discloses **$1.1 million** in total fees paid to Grant Thornton LLP for audit services in 2019, all of which were pre-approved by the Audit Committee Accountant Fees (in millions) | Fee Type | 2019 | 2018 | | :--- | :--- | :--- | | Audit Fees | $1.1 | $1.5 | | Audit-Related Fees | $— | $— | | Tax Fees | $— | $— | | All Other Fees | $— | $— | | **Total** | **$1.1** | **$1.5** | - The Audit Committee pre-approved **100%** of the audit and non-audit services provided by the independent registered public accounting firm[529](index=529&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=96&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including key agreements, debt indentures, compensation plans, and required certifications - This item contains a list of all exhibits filed with the report, such as the Contribution Agreement, Equity Restructuring Agreement, Credit Agreement, and various indentures for senior notes[532](index=532&type=chunk) - Certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act are included as exhibits[538](index=538&type=chunk) [Financial Statements and Notes](index=103&type=section&id=Financial%20Statements%20and%20Notes) This section presents the audited consolidated financial statements for 2017-2019, including balance sheets, statements of operations, changes in partners' capital, and cash flows, along with detailed accounting notes [Report of Independent Registered Public Accounting Firm](index=104&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Grant Thornton LLP issued an unqualified opinion on the financial statements, noting a change in accounting principle for leases and identifying the Goodwill Impairment Assessment as a critical audit matter - The auditor, Grant Thornton LLP, issued an unqualified opinion on the financial statements[546](index=546&type=chunk) - The report highlights a change in accounting principle for leases due to the adoption of the new leasing standard (ASC Topic 842)[548](index=548&type=chunk) - The Goodwill Impairment Assessment was identified as a critical audit matter due to the significant judgments involved in management's qualitative assessment[552](index=552&type=chunk)[553](index=553&type=chunk) [Consolidated Financial Statements](index=106&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show total assets of **$3.73 billion** as of December 2019, with 2019 total revenues of **$698.4 million** and net income of **$39.1 million**, a significant improvement from 2018 Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total current assets | $230,923 | $217,740 | | Property and equipment, net | $2,482,943 | $2,521,488 | | Goodwill | $619,411 | $619,411 | | **Total assets** | **$3,730,407** | **$3,774,649** | | Total current liabilities | $189,375 | $149,599 | | Long-term debt, net | $1,852,360 | $1,759,058 | | **Total liabilities** | **$2,072,500** | **$1,918,484** | | Total partners' capital | $1,180,598 | $1,378,856 | Consolidated Statement of Operations Highlights (in thousands) | Account | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Total revenues | $698,365 | $584,352 | $276,671 | | Operating income (loss) | $168,384 | $65,311 | $(262,668) | | Net income (loss) | $39,132 | $(10,551) | $(264,734) | | Net loss per common unit | $(0.02) | $(0.43) | N/A | [Notes to Consolidated Financial Statements](index=112&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of financial statements, covering basis of presentation, long-term debt, preferred units, and commitments and contingencies, including sales tax issues - The financial statements reflect the USA Compression Predecessor as the accounting acquirer in the April 2, 2018 reverse merger, with its historical financials used for periods prior to the transaction date[579](index=579&type=chunk) - As of Dec 31, 2019, long-term debt consisted of a **$402.7 million** balance on the revolving credit facility and **$1.475 billion** in senior notes (net of deferred financing costs)[671](index=671&type=chunk) - The company has **500,000 Series A Preferred Units** outstanding, which are convertible into common units starting in April 2021 and are classified as temporary equity due to a redemption feature exercisable by holders starting in 2028[707](index=707&type=chunk)[710](index=710&type=chunk)[711](index=711&type=chunk) - The company has open sales tax audits with the Texas Comptroller regarding the applicability of a manufacturing exemption. Any liability for periods prior to the CDM Acquisition is covered by an indemnity from ETO, for which a **$44.9 million** receivable is recorded[779](index=779&type=chunk)[780](index=780&type=chunk)

Financial Data and Key Metrics Changes - Revenues for Q4 2019 were $178 million, an increase of nearly 4% compared to Q4 2018, while adjusted EBITDA rose almost 6% to $109 million [12][55] - Gross operating margin improved to 68.2%, with an adjusted EBITDA margin of 61.3% [13][40] - The bank covenant leverage was reduced to below 4.4x for the quarter, and the distributable cash flow coverage ratio improved to 1.14x [16][41] Business Line Data and Key Metrics Changes - The total fleet horsepower at the end of Q4 was approximately 3.7 million horsepower, with revenue-generating horsepower slightly above 3.3 million horsepower [56] - Average horsepower utilization for Q4 was 93.9%, consistent with both the previous quarter and the same period last year [14][33] - Average monthly revenue per horsepower increased to $16.82, up from $16.73 in Q3 [36][57] Market Data and Key Metrics Changes - Natural gas spot prices remained range-bound throughout 2019, generally between $2 and $3 per MMBtu, recently dropping below $1.75 [17] - The total rig count declined by 25% throughout the year, with certain basins experiencing even greater reductions in activity [17] - Domestic natural gas production increased by approximately 10% compared to 2018 levels [22] Company Strategy and Development Direction - The company focuses on maintaining high utilization rates and optimizing pricing while controlling expenses [118] - There is a commitment to prudent capital spending, with a reduction in new unit orders for 2020 to just over 56,000 horsepower [24][30] - The company aims to leverage its demand-driven business model to provide cash flow stability and sustainable distributions [20][30] Management's Comments on Operating Environment and Future Outlook - The management expressed caution regarding the operating environment in 2020, citing global demand uncertainty and commodity price weakness [31] - Despite potential slowdowns, the company believes that its stable, long-term contracts will allow it to maintain cash flows and distributions [33][96] - The focus remains on optimizing operations and ensuring that the fleet is utilized effectively [53][118] Other Important Information - The company announced a distribution of $0.525 per common unit, marking the 28th distribution since its IPO, totaling over $880 million returned to unit holders [15] - The company is actively managing underutilized assets and redeploying them to maintain strong cash flows [51] Q&A Session Summary Question: Utilization and redeployment of assets in the Permian - Management indicated that redeployment of assets is not material, with only a few pieces of equipment being redeployed [62] Question: Pricing stability and contracts - Pricing has remained stable, with about 60% of contracts under extended terms, allowing for annual upward pricing adjustments [67][68] Question: Gross margin performance - The gross margin was better than expected due to operating cost efficiencies, but some one-time items should be considered for future margin expectations [73][74] Question: Outsourcing of compression services - There is an expectation of increased outsourcing of compression services as companies focus on capital avoidance [84] Question: Impact of gas flaring regulations - Stricter regulations on gas flaring could benefit the company by increasing the demand for compression services [90] Question: Distribution strategy and cash flow stability - Management expressed confidence in maintaining distributions, citing a diversified customer base and strong counterparty relationships [92][94]

USA ＣＯＭＰＲＥＳＳＩＯＮ USA Compression Partners, LP UBS Midstream, MLP & Utilities Conference January 13‐15, 2020 Disclaimer This presentation contains forward‐looking statements relating to the operations of USA Compression Partners, LP (the "Partnership") that are based on management's current expectations, estimates and projections about its operations. You can identify many of these forward‐looking statements by words such as "believe," "expect," "intend," "project," "anticipate," "estimate," "continue," "if," ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) Unaudited consolidated financial statements reflect the business combination, showing improved net income and cash flow from operations [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$3.75 billion**, while total liabilities increased to **$2.04 billion** due to higher long-term debt Condensed Consolidated Balance Sheet Data (in thousands) | | September 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total current assets** | $ 232,698 | $ 217,740 | | **Property and equipment, net** | $ 2,497,456 | $ 2,521,488 | | **Total assets** | $ 3,751,230 | $ 3,774,649 | | **Total current liabilities** | $ 172,742 | $ 149,599 | | **Long-term debt, net** | $ 1,843,309 | $ 1,759,058 | | **Total liabilities** | $ 2,040,001 | $ 1,918,484 | | **Total partners' capital** | $ 1,233,920 | $ 1,378,856 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2019 saw **$175.8 million** in revenues and **$13.3 million** net income, a significant improvement from a net loss in Q3 2018 Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $175,756 | $168,947 | $520,177 | $412,375 | | **Operating income** | $46,164 | $23,940 | $124,583 | $28,744 | | **Interest expense, net** | ($32,626) | ($25,443) | ($94,162) | ($51,125) | | **Net income (loss)** | $13,315 | ($563) | $29,851 | ($20,736) | | **Net income (loss) attributable to common unitholders** | $2,084 | ($8,768) | $1,043 | ($33,185) | | **Basic and diluted net income (loss) per common unit** | $0.02 | ($0.10) | $0.01 | ($0.48) | [Unaudited Condensed Consolidated Statements of Changes in Partners' Capital](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Partners%27%20Capital) Total partners' capital decreased to **$1.234 billion**, influenced by distributions and the conversion of Class B Units to common units - On July 30, 2019, **6,397,965 Class B Units** automatically converted into common units on a one-for-one basis, eliminating all outstanding Class B Units[118](index=118&type=chunk) - Total partners' capital decreased from **$1,378,856 thousand** at the end of 2018 to **$1,233,920 thousand** at the end of Q3 2019, influenced by distributions and net income[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$208.9 million**, while cash was used in investing and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $ 208,880 | $ 133,200 | | **Net cash used in investing activities** | ($ 108,227) | ($ 715,849) | | **Net cash provided by (used in) financing activities** | ($ 100,750) | $ 581,466 | | **Decrease in cash and cash equivalents** | ($ 97) | ($ 1,183) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the basis of presentation, key accounting policies, ASC 842 adoption, and contingencies including a **$44.9 million** sales tax issue - The financial statements are presented following a reverse merger accounting treatment where the USA Compression Predecessor (acquired from ETO) is deemed the accounting acquirer of the Partnership[31](index=31&type=chunk) - The company adopted the new lease accounting standard ASC Topic 842 on January 1, 2019, recognizing additional net right-of-use (ROU) lease assets and lease liabilities of approximately **$3.5 million** and **$3.7 million**, respectively[63](index=63&type=chunk) - The company has a **$44.9 million** accrued liability for a sales tax contingency related to periods prior to the Transactions Date, fully covered by an indemnity from ETO, resulting in a corresponding related party receivable[143](index=143&type=chunk)[144](index=144&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Improved financial performance is driven by strong demand for compression services, with Q3 2019 revenues at **$175.8 million** and Adjusted EBITDA at **$104.3 million** [Operating Highlights](index=45&type=section&id=Operating%20Highlights) Operational metrics show positive trends, including **1.8%** fleet horsepower growth to **3.7 million HP** and improved horsepower utilization to **93.9%** Key Operating Metrics | | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | **Fleet horsepower (at period end)** | 3,678,804 | 3,613,647 | | **Average revenue generating horsepower** | 3,258,125 | 3,212,183 | | **Average revenue per revenue generating HP per month** | $16.73 | $16.17 | | **Horsepower utilization (Average for the period)** | 93.9% | 92.8% | [Financial Results of Operations](index=48&type=section&id=Financial%20Results%20of%20Operations) Financial results improved significantly, with Q3 2019 revenue growing **4.0%** to **$175.8 million** and operating income nearly doubling to **$46.2 million** - Q3 2019 contract operations revenue increased by **$7.5 million (4.7%)** year-over-year, driven by increased average revenue-generating horsepower and average revenue per horsepower per month[174](index=174&type=chunk) - Q3 2019 cost of operations decreased by **$6.9 million (10.7%)** year-over-year, primarily due to lower outside maintenance services, ad valorem tax expense, and direct labor expenses[177](index=177&type=chunk)[178](index=178&type=chunk) - For the nine months ended Sep 30, 2019, contract operations revenue increased by **$109.4 million (28.5%)** compared to the same period in 2018, primarily due to the full-period inclusion of the Partnership's historical assets post-acquisition[185](index=185&type=chunk) [Non-GAAP Financial Measures](index=54&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures show strong performance, with Q3 2019 Adjusted EBITDA increasing **15.7%** to **$104.3 million** and DCF at **$54.9 million** Non-GAAP Financial Data (in thousands) | | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | **Gross operating margin** | $118,333 | $104,638 | $349,484 | $253,198 | | **Adjusted EBITDA** | $104,327 | $90,132 | $310,412 | $217,219 | | **DCF** | $54,933 | $47,478 | $163,847 | $121,336 | | **DCF Coverage Ratio** | 1.08x | 1.01x | 1.13x | 1.28x | - Adjusted EBITDA for Q3 2019 increased by **$14.2 million (15.7%)** year-over-year, driven by a **$13.7 million** increase in gross operating margin[197](index=197&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is strong, supported by cash from operations and a **$1.6 billion** revolving credit facility, with **$410.4 million** available capacity - Net cash from operating activities increased by **$75.7 million** for the first nine months of 2019 compared to 2018, reaching **$208.9 million**[205](index=205&type=chunk) - Budgeted expansion capital expenditures for 2019 are between **$145 million** and **$155 million**, with maintenance capital expenditures planned at approximately **$28 million**[210](index=210&type=chunk)[211](index=211&type=chunk) - As of September 30, 2019, the company had **$394.5 million** in borrowings under its revolving credit facility and available borrowing capacity of **$410.4 million**[212](index=212&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include commodity prices, interest rates, and credit, with a **1%** interest rate change impacting annual interest expense by approximately **$3.9 million** - The company has no direct exposure to commodity prices but acknowledges that sustained low prices could reduce demand for its services, with a **1%** decrease in average revenue-generating horsepower decreasing annual revenue by approximately **$6.5 million**[243](index=243&type=chunk) - The company is exposed to interest rate risk on its variable-rate debt; a **1%** increase in the effective interest rate would result in an annual increase in interest expense of approximately **$3.9 million**[245](index=245&type=chunk) [Controls and Procedures](index=70&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2019[248](index=248&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[249](index=249&type=chunk) [PART II. OTHER INFORMATION](index=71&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=71&type=section&id=ITEM%201.%20Legal%20Proceedings) Management does not expect ordinary course legal proceedings to have a material adverse effect on the company's financial position or operations - In management's opinion, the resolution of any ordinary course legal proceedings is not expected to have a material adverse effect on the company's consolidated financial position, results of operations or cash flows[252](index=252&type=chunk) [Risk Factors](index=71&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers investors to detailed risk factors outlined in the company's 2018 Annual Report on Form 10-K - The report directs security holders and potential investors to the risk factors set forth in Part I, "Item 1A. Risk Factors" of the company's 2018 Annual Report[253](index=253&type=chunk) [Exhibits](index=71&type=section&id=ITEM%206.%20Exhibits) This section lists documents filed as part of the quarterly report, including CEO/CFO certifications and financial statements in Inline XBRL format - Key exhibits filed with the report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and financial data in Inline XBRL format (Exhibit 101.1)[254](index=254&type=chunk)

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements show significant revenue growth and a shift to net income in H1 2019, driven by the 2018 business combination [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $3.76 billion as of June 30, 2019, while liabilities rose, reducing partners' capital Condensed Consolidated Balance Sheet Data (in thousands) | | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$3,759,671** | **$3,774,649** | | Total current assets | $240,586 | $217,740 | | Property and equipment, net | $2,499,694 | $2,521,488 | | Goodwill | $619,411 | $619,411 | | **Total Liabilities** | **$2,002,503** | **$1,918,484** | | Total current liabilities | $176,997 | $149,599 | | Long-term debt, net | $1,811,106 | $1,759,058 | | **Total Partners' Capital** | **$1,279,859** | **$1,378,856** | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) H1 2019 revenues reached $344.4 million with net income of $16.5 million, a significant turnaround from a prior-year net loss Statement of Operations Highlights (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2019** | **2018** | **2019** | **2018** | | **Total revenues** | **$173,675** | **$166,898** | **$344,421** | **$243,428** | | Contract operations | $162,937 | $155,261 | $326,913 | $225,068 | | **Operating income** | **$42,891** | **$28,589** | **$78,419** | **$4,804** | | **Net income (loss)** | **$9,949** | **$3,197** | **$16,536** | **($20,173)** | | Net loss attributable to common and Class B unitholders | ($2,239) | ($8,857) | ($7,839) | ($32,227) | | Basic and diluted net income (loss) per common unit | $0.01 | ($0.06) | ($0.01) | ($0.42) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to $147.6 million in H1 2019, while investing and financing activities saw significant shifts post-acquisition Cash Flow Summary (in thousands) | | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2019** | **2018** | | **Net cash provided by operating activities** | **$147,586** | **$94,370** | | **Net cash used in investing activities** | **($75,949)** | **($664,970)** | | Capital expenditures, net | ($87,821) | ($149,363) | | Acquisitions of USA Compression Predecessor | — | ($1,232,546) | | Assumed cash acquired in business combination | — | $710,506 | | **Net cash provided by (used in) financing activities** | **($71,734)** | **$569,114** | | **Decrease in cash and cash equivalents** | **($97)** | **($1,486)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the 2018 CDM Acquisition, key accounting policies including ASC Topic 842 adoption, and financial commitments - On April 2, 2018, the company acquired the USA Compression Predecessor from ETO for approximately **$1.7 billion**, consisting of cash, common units, and Class B units, accounted for as a reverse merger[23](index=23&type=chunk)[27](index=27&type=chunk) - The company adopted the new lease accounting standard (ASC Topic 842) on January 1, 2019, recognizing net right-of-use (ROU) lease assets of **$3.5 million** and lease liabilities of **$3.7 million** on the balance sheet[58](index=58&type=chunk)[61](index=61&type=chunk) - As of June 30, 2019, the company had a **$44.9 million** accrued liability for a sales tax contingency related to Texas audits, fully indemnified by ETO, resulting in a corresponding **$44.9 million** related party receivable[134](index=134&type=chunk)[135](index=135&type=chunk) Long-Term Debt Composition (in thousands) | | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Revolving credit facility | $363,352 | $1,049,547 | | Senior Notes 2026 | $725,000 | $725,000 | | Senior Notes 2027 | $750,000 | — | | Less: deferred financing costs | ($27,246) | ($15,489) | | **Total long-term debt, net** | **$1,811,106** | **$1,759,058** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes significant revenue and profitability growth to the 2018 acquisition, highlighting strong operational performance and solid liquidity [Operating Highlights](index=43&type=section&id=Operating%20Highlights) Operational performance improved in Q2 2019, with average revenue-generating horsepower increasing and utilization rising to 94.6% Key Operating Metrics | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2019** | **2018** | **2019** | **2018** | | Fleet horsepower (at period end) | 3,657,362 | 3,559,987 | 3,657,362 | 3,559,987 | | Average revenue generating horsepower | 3,270,379 | 3,137,019 | 3,275,490 | 2,276,865 | | Average revenue per revenue generating HP per month | $16.60 | $15.77 | $16.53 | $15.88 | | Horsepower utilization (average for the period) | 94.6% | 91.5% | 94.4% | 89.5% | - The **43.9%** increase in average revenue-generating horsepower for the six-month period was primarily due to the addition of the Partnership's historical assets from the Transactions, combined with organic growth[162](index=162&type=chunk) [Financial Results of Operations](index=46&type=section&id=Financial%20Results%20of%20Operations) Q2 2019 revenues increased 4.1% and operating income grew 50.0%, with H1 2019 revenues surging 41.5% due to acquisition impact Q2 2019 vs Q2 2018 Financial Results (in thousands) | | Three Months Ended June 30, | Percent Change | | :--- | :--- | :--- | :--- | | | **2019** | **2018** | | | **Total revenues** | **$173,675** | **$166,898** | **4.1%** | | Gross operating margin | $117,430 | $109,365 | 7.4% | | Selling, general and administrative | $16,210 | $27,177 | (40.4)% | | **Operating income** | **$42,891** | **$28,589** | **50.0%** | | **Net income** | **$9,949** | **$3,197** | **211.2%** | H1 2019 vs H1 2018 Financial Results (in thousands) | | Six Months Ended June 30, | Percent Change | | :--- | :--- | :--- | :--- | | | **2019** | **2018** | | | **Total revenues** | **$344,421** | **$243,428** | **41.5%** | | Gross operating margin | $231,151 | $148,560 | 55.6% | | **Operating income** | **$78,419** | **$4,804** | **1,532.4%** | | **Net income (loss)** | **$16,536** | **($20,173)** | **182.0%** | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains solid liquidity through cash from operations and its credit facility, with $438.9 million available capacity and recent debt issuance - As of June 30, 2019, the company had **$438.9 million** of available borrowing capacity under its **$1.6 billion** credit facility[203](index=203&type=chunk) - The company issued **$750.0 million** of 6.875% Senior Notes due 2027 in March 2019, using the net proceeds to reduce borrowings under the Credit Agreement[199](index=199&type=chunk)[209](index=209&type=chunk) - For 2019, the company budgeted **$140-$150 million** for expansion capital expenditures and **~$25 million** for maintenance capital expenditures[201](index=201&type=chunk)[202](index=202&type=chunk) - On July 30, 2019, all **6,397,965** Class B Units automatically converted into common units on a one-for-one basis[211](index=211&type=chunk) [Non-GAAP Financial Measures](index=57&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA and DCF, showing strong growth in Q2 and H1 2019, with a healthy DCF Coverage Ratio Non-GAAP Financial Measures (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2019** | **2018** | **2019** | **2018** | | Gross operating margin | $117,430 | $109,365 | $231,151 | $148,560 | | Adjusted EBITDA | $104,708 | $95,438 | $206,085 | $127,087 | | DCF | $54,062 | $51,422 | $108,914 | $73,858 | | DCF Coverage Ratio | 1.14x | 1.09x | 1.15x | 1.56x | - The decrease in the DCF Coverage Ratio for the six-month period is because the 2018 period only reflects one quarter of distributions, as the USA Compression Predecessor did not pay distributions prior to the Transactions Date[193](index=193&type=chunk)[235](index=235&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces indirect commodity price risk, interest rate risk on variable-rate debt, and credit risk - The company has no direct exposure to commodity price risk as it does not take title to natural gas or crude oil[238](index=238&type=chunk) - The company is exposed to interest rate risk on its variable-rate debt, with **$363.4 million** outstanding as of June 30, 2019, where a 1% change would impact annual interest expense by about **$3.6 million**[239](index=239&type=chunk) [Controls and Procedures](index=65&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2019, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[243](index=243&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal controls[244](index=244&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=68&type=section&id=ITEM%201.%20Legal%20Proceedings) Management does not expect ongoing legal proceedings to have a material adverse effect on the company's financial position or results - Management does not expect any ongoing legal proceedings to have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows[247](index=247&type=chunk) [Risk Factors](index=68&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers investors to the detailed risk factors outlined in the company's 2018 Annual Report on Form 10-K - The report refers to the risk factors set forth in the 2018 Annual Report (Form 10-K) for a detailed discussion of potential risks[248](index=248&type=chunk) [Exhibits](index=68&type=section&id=ITEM%206.%20Exhibits) This section lists documents filed as exhibits with the quarterly report, including CEO and CFO certifications and interactive data files - Exhibits filed with the report include CEO/CFO certifications and interactive data files[249](index=249&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . Commission File No. 001-35779 USA Compression Partners, LP (Exact name of registrant as specified in its charter) (State or Other Jurisdic ...

Form 10-K Table of Contents (Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Washington, D.C. 20549 For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-35779 USA Compression Partners, LP (Exact Name of Registrant as Specified in its Charter) Delaware 75-2771546 (Sta ...