TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or Delaware 75-2771546 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) | Title of each class | Trading Symbol(s) | Name of each exc ...

USA Compression Partners, LP (NYSE:USAC) Q4 2022 Earnings Conference Call February 14, 2023 11:00 AM ET Company Participants Chris Porter - VP, General Counsel & Secretary Eric Long - President & CEO Eric Scheller - COO Mike Pearl - CFO Conference Call Participants TJ Schultz - RBC Capital Markets Robert Mosca - Mizuho Securities Selman Akyol - Stifel Operator Good morning, and welcome to the USA Compression Partners, LP Fourth Quarter 2022 Earnings Call. All participants are in a listen-only mode. After th ...

USA Compression Partners, LP Wells Fargo Midstream and Utilities Symposium December 7, 2022 USA - Forward-Looking Statements and Ownership Structure | --- | --- | --- | --- | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

USA Compression Partners, LP (NYSE:USAC) Q3 2022 Earnings Conference Call November 11, 2022 11:00 AM ET Company Participants Chris Porter - Vice President, General Counsel & Secretary Eric Long - President & Chief Executive Officer Mike Pearl – Chief Financial Offier Conference Call Participants Selman Akyol - Stifel Gabe Moreen - Mizuho Operator Good morning. Welcome to USA Compression Partners of Third Quarter 2021 Earnings Conference Call. Today's conference call, all parties will be in listen-only mute ...

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 September 30, 2022 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware (State or other jurisdiction of incorporation or organization) 75-2771546 (I.R.S. Employer Identification No.) For the transition period from to . Commission File ...

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=5&type=section&id=ITEM%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in partners' capital, and cash flows, with detailed notes on organization and accounting policies [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Total assets | $2,719,892 | $2,767,979 | | Total liabilities | $2,254,648 | $2,189,562 | | Total partners' capital (deficit) | $(12,065) | $101,108 | | Long-term debt, net | $2,017,326 | $1,973,234 | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Total revenues | $171,461 | $156,562 | 9.5% | | Net income | $9,086 | $2,688 | 238.0% | | Basic and diluted net loss per common unit | $(0.03) | $(0.10) | -70.0% | | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------------------------------ | :------------------------------------------ | :------------------------------------------ | :--------- | | Total revenues | $334,873 | $314,075 | 6.6% | | Net income | $12,340 | $3,059 | 303.4% | | Basic and diluted net loss per common unit | $(0.12) | $(0.22) | -45.5% | [Unaudited Condensed Consolidated Statements of Changes in Partners' Capital (Deficit)](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Partners%27%20Capital%20%28Deficit%29) | Metric | December 31, 2021 (in thousands) | June 30, 2022 (in thousands) | | :------------------------------------------ | :------------------------------- | :--------------------------- | | Partners' capital ending balance | $101,108 | $(12,065) | | Distributions and DERs (6 months ended June 30, 2022) | N/A | $(102,291) | | Exercise and conversion of warrants into common units | N/A | $5,167 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | | Net cash provided by operating activities | $129,282 | $139,071 | $(9,789) | | Net cash used in investing activities | $(42,870) | $(10,269) | $(32,601) | | Net cash used in financing activities | $(86,412) | $(128,802) | $42,390 | | Capital expenditures, net | $(43,818) | $(15,435) | $(28,383) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [(1) Organization and Description of Business](index=9&type=section&id=%281%29%20Organization%20and%20Description%20of%20Business) - USA Compression Partners, LP provides natural gas compression and treating services under fixed-term contracts in the natural gas and crude oil industries, primarily in various U.S. shale plays[22](index=22&type=chunk) - The General Partner, USA Compression GP, LLC, is wholly owned by Energy Transfer[23](index=23&type=chunk) [(2) Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=%282%29%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules, reflecting normal recurring adjustments[24](index=24&type=chunk) - Operating results for the three and six months ended June 30, 2022, are not necessarily indicative of the results expected for the full year[25](index=25&type=chunk) - The company operates in a single business segment: compression services[47](index=47&type=chunk) [(3) Trade Accounts Receivable](index=11&type=section&id=%283%29%20Trade%20Accounts%20Receivable) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Allowance for credit losses | $1,254 | $2,057 | - The allowance for credit losses decreased by **$0.7 million** for the six months ended June 30, 2022, primarily due to favorable market conditions for customers driven by higher commodity prices[49](index=49&type=chunk) [(4) Inventories](index=12&type=section&id=%284%29%20Inventories) | Component | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------ | :----------------------------- | :------------------------------- | | Serialized parts | $46,619 | $44,642 | | Non-serialized parts | $43,585 | $41,174 | | Total inventories | $90,204 | $85,816 | [(5) Property and Equipment and Identifiable Intangible Assets](index=12&type=section&id=%285%29%20Property%20and%20Equipment%20and%20Identifiable%20Intangible%20Assets) | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :---------------------------------- | :----------------------------- | :------------------------------- | | Total property and equipment, net | $2,178,383 | $2,222,336 | | Identifiable intangible assets, net | $289,722 | $304,411 | | Impairment of Compression Equipment | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Impairment charge | $432 | $4,953 | - Impairments were due to units not being marketable, excessive maintenance costs, or inability to meet customer performance criteria without significant retrofitting[55](index=55&type=chunk) [(6) Other Current Liabilities](index=14&type=section&id=%286%29%20Other%20Current%20Liabilities) | Component | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :---------------------------------- | :----------------------------- | :------------------------------- | | Accrued sales tax contingencies | $44,923 | $44,923 | | Accrued interest expense | $31,951 | $30,850 | | Accrued capital expenditures | $14,544 | $3,521 | [(7) Lease Accounting](index=14&type=section&id=%287%29%20Lease%20Accounting) - A customer exercised a bargain purchase option during the second quarter of 2021, resulting in a **$1.1 million gain** on disposition of assets[60](index=60&type=chunk) [(8) Long-term Debt](index=15&type=section&id=%288%29%20Long-term%20Debt) | Debt Instrument | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :------------------------ | :----------------------------- | :------------------------------- | | Senior Notes 2026 | $725,000 | $725,000 | | Senior Notes 2027 | $750,000 | $750,000 | | Revolving credit facility | $558,664 | $516,342 | | Total long-term debt, net | $2,017,326 | $1,973,234 | - As of June 30, 2022, the company had **$360.9 million** in available borrowing capacity under its **$1.6 billion** revolving credit facility, with a weighted-average interest rate of **4.13%**[64](index=64&type=chunk) - The company was in compliance with all covenants under the Credit Agreement and Senior Notes indentures as of June 30, 2022[66](index=66&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) [(9) Preferred Units](index=16&type=section&id=%289%29%20Preferred%20Units) - There were **500,000 Preferred Units** outstanding as of June 30, 2022, and December 31, 2021, with a face value of **$1,000 per unit**[75](index=75&type=chunk) - Holders of Preferred Units are entitled to cumulative quarterly cash distributions of **$24.375 per unit**[75](index=75&type=chunk) - Preferred Units are convertible into common units, with conversion options phasing in from April 2, 2021, to April 2, 2023[78](index=78&type=chunk) [(10) Partners' Capital (Deficit)](index=17&type=section&id=%2810%29%20Partners%27%20Capital%20%28Deficit%29) | Metric | December 31, 2021 | June 30, 2022 | | :------------------------------------------ | :------------------ | :-------------- | | Common units outstanding | 97,344,707 | 97,940,715 | - Cash distributions of **$0.525 per common unit** were declared quarterly[81](index=81&type=chunk) - During the six months ended June 30, 2022, **$1.0 million** in distributions were reinvested under the DRIP, resulting in the issuance of **61,700 common units**[83](index=83&type=chunk) - Warrants to purchase **5,000,000 common units** were exercised in full on April 27, 2022, resulting in the net settlement for **534,308 common units**[85](index=85&type=chunk) [(11) Revenue Recognition](index=20&type=section&id=%2811%29%20Revenue%20Recognition) | Revenue Type | Three Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :-------------------------- | :-------------------------------------------- | :------------------------------------------ | | Contract operations revenue | $167,853 | $329,339 | | Retail parts and services | $3,608 | $5,534 | | Total revenues | $171,461 | $334,873 | - As of June 30, 2022, the aggregate amount of transaction price allocated to unsatisfied performance obligations related to contract operations revenue was **$505.6 million**, expected to be recognized through 2025 and thereafter[92](index=92&type=chunk) [(12) Transactions with Related Parties](index=21&type=section&id=%2812%29%20Transactions%20with%20Related%20Parties) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Related party revenues | $3,887 | $2,944 | $7,705 | $5,894 | - A **$44.9 million** related party receivable from Energy Transfer exists as of June 30, 2022, related to indemnification for sales tax contingencies[93](index=93&type=chunk) [(13) Commitments and Contingencies](index=21&type=section&id=%2813%29%20Commitments%20and%20Contingencies) - No single customer represented **10% or more** of total revenue for the three and six months ended June 30, 2022 or 2021[94](index=94&type=chunk) - Equipment purchase commitments totaled **$53.2 million** as of June 30, 2022, with **$24.2 million** expected to be settled in the remainder of 2022[96](index=96&type=chunk) - The company estimates a range of losses from **$0 to approximately $19.5 million** related to sales tax assessments by the Oklahoma Tax Commission[98](index=98&type=chunk) - A **$44.9 million** accrued liability for Texas sales tax contingencies is indemnified by a related party receivable from Energy Transfer[99](index=99&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the company's financial condition and operational performance, highlighting key metrics, financial results, liquidity, capital resources, and non-GAAP reconciliations [Operating Highlights](index=23&type=section&id=Operating%20Highlights) | Metric | June 30, 2022 | June 30, 2021 | Change (%) | | :------------------------------------------ | :------------ | :------------ | :--------- | | Fleet horsepower (at period end) | 3,695,955 | 3,686,584 | 0.3% | | Revenue generating horsepower (at period end) | 3,048,498 | 2,912,628 | 4.7% | | Horsepower utilization (at period end) | 88.4% | 81.9% | 7.9% | | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (%) | | :------------------------------------------ | :------------------------------- | :------------------------------- | :--------- | | Average revenue per revenue generating horsepower per month | $17.20 | $16.55 | 3.9% | - The increase in horsepower utilization was primarily due to increased revenue generating horsepower and horsepower under contract but not yet generating revenue, driven by increased demand for services in the oil and gas industry[113](index=113&type=chunk) [Financial Results of Operations](index=25&type=section&id=Financial%20Results%20of%20Operations) [Three months ended June 30, 2022 compared to the three months ended June 30, 2021](index=25&type=section&id=Three%20months%20ended%20June%2030%2C%202022%20compared%20to%20the%20three%20months%20ended%20June%2030%2C%202021) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Total revenues | $171,461 | $156,562 | 9.5% | | Contract operations revenue | $163,969 | $151,800 | 8.0% | | Parts and service revenue | $3,605 | $1,818 | 98.3% | | Net income | $9,086 | $2,688 | 238.0% | - Contract operations revenue increased due to select price increases on the existing fleet (**3.9% increase** in average revenue per revenue generating horsepower per month) and a **2.8% increase** in average revenue generating horsepower[117](index=117&type=chunk) - Cost of operations (exclusive of depreciation and amortization) increased by **$9.6 million (20.9%)** due to higher direct expenses (fluids, parts), non-income taxes, retail parts and services expenses, vehicle fleet expenses, and direct labor costs[121](index=121&type=chunk) - No impairment of compression equipment was recorded for the three months ended June 30, 2022, compared to **$2.4 million** in the prior year[125](index=125&type=chunk)[127](index=127&type=chunk) [Six months ended June 30, 2022 compared to the six months ended June 30, 2021](index=27&type=section&id=Six%20months%20ended%20June%2030%2C%202022%20compared%20to%20the%20six%20months%20ended%20June%2030%2C%202021) | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :--------- | | Total revenues | $334,873 | $314,075 | 6.6% | | Contract operations revenue | $321,637 | $304,325 | 5.7% | | Parts and service revenue | $5,531 | $3,856 | 43.4% | | Net income | $12,340 | $3,059 | 303.4% | - Contract operations revenue increased due to select price increases (**2.7% increase** in average revenue per revenue generating horsepower per month), a **1.1% increase** in average revenue generating horsepower, and increased natural gas treating services[131](index=131&type=chunk) - Cost of operations (exclusive of depreciation and amortization) increased by **$14.7 million (15.6%)** due to higher direct expenses (fluids, parts), outside maintenance costs, non-income taxes, vehicle fleet expenses, retail parts and services expenses, and direct labor costs[135](index=135&type=chunk) - Impairment of compression equipment decreased to **$0.4 million** for the six months ended June 30, 2022, from **$5.0 million** in the prior year[140](index=140&type=chunk) [Other Financial Data](index=29&type=section&id=Other%20Financial%20Data) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Gross margin | $57,344 | $51,731 | 10.9% | | Adjusted gross margin | $116,303 | $110,958 | 4.8% | | Adjusted EBITDA | $105,408 | $99,988 | 5.4% | | DCF | $55,576 | $52,536 | 5.8% | | DCF Coverage Ratio | 1.08x | 1.03x | 4.9% | | Cash Coverage Ratio | 1.09x | 1.04x | 4.8% | | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (%) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Gross margin | $107,960 | $99,586 | 8.4% | | Adjusted gross margin | $225,983 | $219,843 | 2.8% | | Adjusted EBITDA | $203,831 | $199,541 | 2.1% | | DCF | $105,722 | $105,116 | 0.6% | | DCF Coverage Ratio | 1.03x | 1.03x | 0.0% | | Cash Coverage Ratio | 1.04x | 1.04x | 0.0% | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity needs include financing capital expenditures, servicing debt, funding working capital, and paying distributions, primarily sourced from operating activities, Credit Agreement borrowings, and debt/equity issuances[155](index=155&type=chunk) | Capital Expenditures | Six Months Ended June 30, 2022 (in millions) | Six Months Ended June 30, 2021 (in millions) | | :--------------------------- | :------------------------------------------- | :------------------------------------------- | | Maintenance capital expenditures | $12.0 | $9.5 | | Expansion capital expenditures | $52.3 | $12.4 | - Projected maintenance capital expenditures for 2022 are approximately **$23.0 million**, and expansion capital expenditures are projected between **$100.0 million and $110.0 million**[158](index=158&type=chunk)[159](index=159&type=chunk) - Net cash provided by operating activities decreased by **$9.8 million** for the six months ended June 30, 2022, compared to the prior year, primarily due to changes in working capital[162](index=162&type=chunk) - Net cash used in investing activities increased by **$32.6 million**, mainly due to a **$28.4 million** increase in capital expenditures for new compression units and reconfiguration costs[163](index=163&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) [Adjusted Gross Margin](index=31&type=section&id=Adjusted%20Gross%20Margin) - Adjusted gross margin is defined as revenue less cost of operations, exclusive of depreciation and amortization expense, and is used as a supplemental measure of operating profitability[171](index=171&type=chunk) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------------ | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Adjusted gross margin | $116,303 | $110,958 | 4.8% | | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------------ | :------------------------------------------ | :------------------------------------------ | :--------- | | Adjusted gross margin | $225,983 | $219,843 | 2.8% | [Adjusted EBITDA](index=32&type=section&id=Adjusted%20EBITDA) - Adjusted EBITDA is a key management tool for evaluating results of operations, assessing financial performance, viability of capital expenditure projects, and the ability to generate cash for debt payments and distributions[173](index=173&type=chunk) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | | Adjusted EBITDA | $105,408 | $99,988 | 5.4% | | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (%) | | :------------- | :------------------------------------------ | :------------------------------------------ | :--------- | | Adjusted EBITDA | $203,831 | $199,541 | 2.1% | [Distributable Cash Flow](index=33&type=section&id=Distributable%20Cash%20Flow) - Distributable Cash Flow (DCF) is an important measure for comparing basic cash flows generated (after Preferred Unit distributions and prior to retained cash reserves) to expected cash distributions to common unitholders[180](index=180&type=chunk) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Change (%) | | :----- | :-------------------------------------------- | :-------------------------------------------- | :--------- | | DCF | $55,576 | $52,536 | 5.8% | | Metric | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | | DCF | $105,722 | $105,116 | 0.6% | [Coverage Ratios](index=35&type=section&id=Coverage%20Ratios) - DCF Coverage Ratio and Cash Coverage Ratio are used to gauge the company's ability to pay cash distributions to common unitholders[187](index=187&type=chunk) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (%) | | :------------------ | :------------------------------- | :------------------------------- | :--------- | | DCF Coverage Ratio | 1.08x | 1.03x | 4.9% | | Cash Coverage Ratio | 1.09x | 1.04x | 4.8% | | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change (%) | | :------------------ | :----------------------------- | :----------------------------- | :--------- | | DCF Coverage Ratio | 1.03x | 1.03x | 0.0% | | Cash Coverage Ratio | 1.04x | 1.04x | 0.0% | [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, including commodity price, interest rate, and credit risks related to customer receivables - The company has no direct exposure to fluctuating commodity prices but is indirectly affected by demand for natural gas and crude oil, with a **1% decrease** in average revenue generating horsepower potentially leading to an annual **$6.1 million decrease** in revenue[192](index=192&type=chunk) - As of June 30, 2022, the company had **$558.7 million** in variable-rate indebtedness, and a **1% change** in the effective interest rate would result in an annual **$5.6 million change** in interest expense[193](index=193&type=chunk) - Credit risk is associated with receivables for services provided, and significant customer credit problems could materially impact the business[195](index=195&type=chunk) [ITEM 4. Controls and Procedures](index=37&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2022[197](index=197&type=chunk) - No material changes in internal control over financial reporting occurred during the last fiscal quarter[198](index=198&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=38&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with management not anticipating material adverse effects on financial position, operations, or cash flows - Resolution of legal proceedings is not expected to have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows[201](index=201&type=chunk) [ITEM 1A. Risk Factors](index=38&type=section&id=ITEM%201A.%20Risk%20Factors) This section directs readers to comprehensive risk factors detailed in the 2021 Annual Report on Form 10-K and subsequent SEC filings - Security holders and potential investors are advised to consider risk factors outlined in the 2021 Annual Report on Form 10-K and subsequent SEC filings[202](index=202&type=chunk) [ITEM 6. Exhibits](index=38&type=section&id=ITEM%206.%20Exhibits) This section lists all documents filed, furnished, or incorporated by reference, including organizational documents, executive certifications, and XBRL financial data - The report includes certifications of the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL financial data (Exhibit 101.1)[203](index=203&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) This section contains official signatures of authorized officers Matthew C. Liuzzi and G. Tracy Owens, certifying the report on August 2, 2022 - The report was signed on August 2, 2022, by Matthew C. Liuzzi (Vice President, Chief Financial Officer and Treasurer) and G. Tracy Owens (Vice President of Finance and Chief Accounting Officer)[207](index=207&type=chunk)

Financial Data and Key Metrics Changes - Total revenues for Q2 2022 were approximately $171 million, representing a 5% increase compared to the previous quarter [60] - Adjusted EBITDA increased by 7% to approximately $105 million, with an adjusted EBITDA margin of 61.5% [60][62] - Distributable cash flow (DCF) to limited partners was $56 million, resulting in a coverage ratio of 1.08 times, an improvement of over 10% from the last quarter [8][66] - The bank covenant leverage ratio improved to 4.9 times, a reduction of over 5% from the previous quarter [9][66] Business Line Data and Key Metrics Changes - Average horsepower utilization increased by 3 percentage points from Q1 2022 to just below 88% [15][63] - Revenue per horsepower per month rose to $17.20, reflecting both market strength and contractual price escalators [61] Market Data and Key Metrics Changes - Commodity prices remained high, with natural gas averaging just shy of $7.50 per MMBtu and West Texas Intermediate crude oil averaging over $108 per barrel [17] - The market for compression services tightened due to limited new units being fabricated industry-wide, leading to increased revenues and cash flow [15][10] Company Strategy and Development Direction - The company is focused on redeploying existing idle units rather than ordering new ones, which requires less capital expenditure [35] - There is a strategic emphasis on safety, with zero recordable incidents reported as of mid-2022 [13][14] - The company is exploring innovative technologies as part of its long-term ESG initiatives, including dual drive units for reducing greenhouse gas emissions [46][49] Management's Comments on Operating Environment and Future Outlook - Management believes the supply-demand balance for oil and natural gas is extremely tight, which is expected to drive continued demand for compression services [23][31] - The company anticipates that the ongoing global energy crisis will increase the role of natural gas and compression services in the future [100][102] - Management expressed confidence in the stability of the business model, which has been resilient through market volatility [55][56] Other Important Information - The company has maintained a consistent distribution of $0.525 per unit for 38 consecutive quarters, returning over $1.4 billion to unitholders since its IPO [8][57] - The company is involved in providing compression services for ESG-driven projects, including hydrogen compression and carbon capture initiatives [52][93] Q&A Session Summary Question: How much more can gross margins increase with higher utilization? - Management indicated that historically, gross margins have been around 68% to 70%, and while further increases are possible, there may be a ceiling on pricing [72][74] Question: Are longer-term contracts being locked in due to the current market? - Management confirmed that they are seeing a willingness from producers to lock in longer-term contracts at higher rates due to the lack of available equipment [76][77] Question: How much idle equipment is left to redeploy? - Management noted that with utilization in the upper 80s, there is still a significant amount of horsepower available for redeployment [78] Question: What is the lead time for large horsepower equipment? - Management reported that lead times for large horsepower equipment are increasing, with some equipment taking over a year to deliver [79] Question: Why is there concern about the dividend despite strong performance? - Management explained that some investors may not fully understand the business model, which has proven stable even in tougher times, and emphasized the importance of compression services in the energy value chain [81][83] Question: Is there any change in order backlog for large compression units? - Management clarified that they do not measure backlog like fabricators but focus on utilization rates and ongoing contract activity [87][88]

USA Compression Partners LP (NYSE:USAC) Q1 2022 Earnings Conference Call May 3, 2022 11:00 AM ET Company Participants Christopher Porter - VP, General Counsel & Secretary Eric Long - CEO & President Matthew Liuzzi - VP, CFO & Treasurer Conference Call Participants Torrey Schultz - RBC Capital Markets Selman Akyol - Stifel, Nicolaus & Company Operator Welcome to USA Compression Partners LP's First Quarter '22 Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to Chris P ...

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, 2022 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) Delaware (State or other j ...

Financial Data and Key Metrics Changes - In Q4 2021, the company reported quarterly revenue of $160 million, adjusted EBIT of $99 million, and distributable cash flow (DCF) to limited partners of $52 million, all consistent with the previous quarter [37][39] - The adjusted gross margin as a percentage of revenue was 68%, and adjusted EBITDA margin was 62%, both consistent with historical averages [39] - The total fleet horsepower at the end of the quarter was approximately 3.7 million horsepower, flat compared to the third quarter, with average utilization up to 82.9% [40] Business Line Data and Key Metrics Changes - Approximately $157 million of total revenues reflected core contract operations, while parts and service revenue contributed roughly $3 million [37] - Capital spending guidance was maintained with total expansion capital of $14 million, primarily for reconfiguration of idle units [41] Market Data and Key Metrics Changes - Crude oil prices in Q4 were up over 80% from the previous year, while natural gas prices were up almost 100% [18][20] - U.S. crude oil inventories were reported to be 13% below last year and 9% below the five-year average, indicating a tight supply situation [25] Company Strategy and Development Direction - The company aims to continue providing natural gas compression services, focusing on long-term and strategic infrastructure-oriented customers [12] - The dual drive concept is expected to be a significant offering, allowing customers to switch between natural gas and electricity, thus reducing emissions [35] Management's Comments on Operating Environment and Future Outlook - Management noted that the current environment is characterized by high commodity prices and a tight supply-demand balance, which is expected to drive investment actions from customers [17][24] - The company anticipates continued demand for compression services as natural gas remains a critical energy source [33][36] Other Important Information - The company maintained its distribution at $0.525 per unit, resulting in a distributable cash flow ratio of 1.02 times [43] - The company has returned over $1.3 billion to unitholders since its IPO in 2013, demonstrating stability in cash flow generation [36] Q&A Session Summary Question: Current activity levels versus expectations - Management indicated that activity levels are consistent with expectations for 2022, significantly ahead of 2021, driven by increased CapEx from major players [48][49] Question: Capital allocation and distribution versus debt reduction - Management emphasized that the market has not fully recognized the stability of the business, and they plan to focus on accretive projects while maintaining distributions [51][52] Question: Growth areas and basin shifts - The Permian Delaware basin is currently leading in activity, with notable increases in rig counts and demand also seen in the Haynesville Shale and midcontinent areas [58][59] Question: Long-term debt leverage perspective - Management stated that their perspective on debt leverage remains unchanged, with plans to continue reducing debt as cash flows increase [62] Question: Pricing assumptions and inflationary pressures - Management noted that pricing assumptions in guidance are conservative, with expectations of moderate inflation in labor costs and effective management of parts pricing [68][71] Question: Supply chain constraints for large horsepower - Management confirmed that there are significant lead times for sourcing large horsepower equipment, which could impact the ability to meet customer demands if not ordered in advance [74][75]