What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-16 compared with 2020-02-18 · 1016 added, 724 removed, 1473 unchanged (54% of the section changed)

15 unchanged sentences

Based on this assessment, our management believes that, as of December 31, 2020, our internal control over financial reporting was effective.

Grant Thornton LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2019 , as stated in their report, which is included herein.

Grant Thornton LLP, an independent registered public accounting firm that audited our consolidated financial statements included herein, has also audited the effectiveness of our internal control over financial reporting as of December 31, 2020, as stated in their report, which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

6 unchanged sentences

Basis for opinion

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent

with respect to the Partnership in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

24 unchanged sentences

As the sole member of the General Partner, ETO is entitled under the limited liability company agreement of the General Partner (the “GP LLC Agreement”) to appoint all directors of the General Partner, subject to rights and restrictions contained in other agreements.

The GP LLC Agreement provides that the Board shall consist of between two and nine persons, at least two of whom are required to meet the independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the SEC thereunder, and by the NYSE pertaining to qualification for service on an audit committee.

The GP LLC Agreement provides that the Board shall consist of between two and nine persons, at least two of whom are required to meet the independence standards required of directors who serve on an audit committee of a board of directors established by the Exchange Act, and the rules and regulations of the SEC thereunder, and by the NYSE pertaining to qualification for service on an audit committee.

The Board is comprised of nine members, eight of whom were designated by ETO and one of whom was designated by EIG Management Company, LLC (“EIG Management”) pursuant to that certain Board Representation Agreement among us, the General Partner, Energy Transfer Equity, L.P.

1 unchanged sentence

acquired the General Partner in the Transactions and subsequently contributed it to ETO in connection with a merger among several Energy Transfer entities that closed in October 2018) and EIG Veteran Equity Aggregator, L.P.

(along with its affiliated funds, “EIG”) on the Transactions Date in connection with our private placement to EIG and FS Energy and Power Fund (“FS Energy”) of Series A Preferred Units in the Partnership (the “Preferred Units”) and warrants to purchase common units of the Partnership (the “Warrants”).

(along with its affiliated funds, “EIG”) on the Transactions Date in connection with our private placement to EIG and FS Energy and Power Fund (“FS Energy”) of Preferred Units and warrants to purchase common units of the Partnership (the “Warrants”).

Under the Board Representation Agreement, EIG Management has the right to designate one member of the Board for so long as EIG and FS Energy own, in the aggregate, more than 5% of the Partnership’s outstanding common units (taking into account the common units issuable upon conversion of the Preferred Units and exercise of the Warrants).

EIG Management has designated Matthew S.

Hartman to serve on the Board.

Three members of the Board are independent as defined under the independence standards established by the NYSE and the SEC.

71 unchanged sentences

The following table shows information as of February 11, 2021 regarding the current directors and executive officers of USA Compression GP, LLC.

Position with USA Compression GP, LLC

President and Chief Executive Officer and Director

Vice President, Chief Financial Officer and Treasurer

Vice President and Chief Operating Officer

Vice President, Human Resources

Name Age Position with USA Compression GP, LLC

Long 62 President and Chief Executive Officer and Director

Liuzzi 46 Vice President, Chief Financial Officer and Treasurer

Eric Scheller 57 Vice President and Chief Operating Officer

Christopher W.

Vice President, General Counsel and Secretary

Porter 37 Vice President, General Counsel and Secretary

Kimble 56 Vice President, Human Resources

Christopher R.

Curia 65 Director

Hartman 40 Director

Joyce 63 Director

Long 64 Director

Mason 64 Director

Ramsey 65 Director

Waldheim 64 Director

Whitehurst 46 Director

The directors of the General Partner hold office until the earlier of their death, resignation, removal or disqualification or until their successors have been elected and qualified.

18 unchanged sentences

Liuzzi served as our Senior Vice President – Strategic Development since joining us in April 2013.

Liuzzi joined us after nine years in investment banking, since 2008 at Barclays, where he was most recently a Director in the Global Natural Resources Group in Houston.

joined us after nine years in investment banking, since 2008 at Barclays, where he was most recently a Director in the Global Natural Resources Group in Houston.

At Barclays, Mr.

2 unchanged sentences

and an M.B.A., both from the University of Virginia.

Manias has served as our Vice President and Chief Operating Officer since July 2013.

He served as a director of the General Partner from February 2013 to July 2013.

From October 2009 until January 2013, Mr.

Manias served as Senior Vice President and Chief Financial Officer of Crestwood Midstream Partners LP and its affiliates, where his general responsibilities included managing the partnership’s financial and treasury activities.

Before joining Crestwood in January 2009, Mr.

Manias was the Chief Financial Officer of TEPPCO Partners, L.P.

starting in January 2006.

From September 2004 until January 2006, he served as Vice President of Business Development and Strategic Planning at Enterprise Products Partners L.P.

He previously served as Vice President and Chief Financial Officer of GulfTerra Energy Partners, L.P.

from February 2004 to September 2004 at which time GulfTerra Energy Partners, L.P.

was merged with Enterprise Products Partners L.P.

Prior to GulfTerra Energy Partners, L.P., Mr.

Manias held several executive management positions with El Paso Corporation.

Prior to El Paso, he worked as an energy investment banker for J.P.

Morgan Securities Inc.

and its predecessor companies from May 1992 to August 2001.

Manias earned a B.S.E.

in civil engineering from Princeton University in 1984, a M.S.

in petroleum engineering from Louisiana State University in 1986 and an M.B.A.

from Rice University in 1992.

Kimble has served as our Vice President, Human Resources since June 2014.

Kimble brings to us over twenty-five years of human resources leadership experience.

Prior to joining us, he was most recently the Senior Vice President of Human Resources at Millard Refrigerated Services from January 2011 to May 2014 where he led all aspects of human resources.

Before joining Millard, he was the Chief Administrative Officer and Executive Vice President of Human Resources at MV Transportation from March 2005 to February 2009 where he led human resources, safety, labor relations and various other operating support functions.

Kimble holds a B.S.

in marketing from Sacramento State University and an M.B.A.

from Saint Mary’s College of California.

Kimble also completed the University of Michigan’s Strategic HR and Strategic Collective Bargaining Programs.

Scheller has served as our Vice President, Chief Operating Officer since June 2020.

Prior to that, Mr.

Scheller served as our Vice President—Fleet Operations since April 2018, and prior to that was our Vice President, Operations & Performance Management beginning in August 2015.

Prior to joining us, Mr.

Scheller was a Director at Sapient Global Markets since August 2013.

Before Sapient, Mr.

Scheller was a consultant in private practice advising midstream and chemicals firms from January 2012 to July 2013.

Prior to that, he held several positions with Enterprise Products Partners LP from November 2004 to December 2011, most recently as Regional Director, Pipeline & Storage Services.

Scheller holds a B.S.

in Chemical Engineering (Math minor), a Masters of Chemical Engineering and an M.B.A., all from the University of Houston.

Scheller is also a CFA ® charterholder.

Christopher W.

6 unchanged sentences

degree from The George Washington University.

Kimble has served as our Vice President, Human Resources since June 2014.

Kimble brings to us over twenty-five years of human resources leadership experience.

Prior to joining us, he was most recently the Senior Vice President of Human Resources at Millard Refrigerated Services from January 2011 to May 2014 where he led all aspects of human resources.

Kimble holds a B.S.

in marketing from Sacramento State University and an M.B.A.

from Saint Mary’s College of California.

Kimble also completed the University of Michigan’s Strategic HR and Strategic Collective Bargaining Programs.

Christopher R.

2 unchanged sentences

SUN) since August 2014 and as its Executive Vice President-Human Resources since April 2015.

Curia also serves as the Executive Vice President and Chief Human Resources Officer of LE GP, LLC (“LE GP”), the general partner of Energy Transfer LP (“ET LP”) and has served in that capacity since January 2015.

Curia joined ETO in July 2008 and was appointed the Executive Vice President and Chief Human Resources Officer of ET LP in January 2015.

Curia joined ETO in July 2008 and was appointed the Executive Vice President and Chief Human Resources Officer of the general partner of ET LP in January 2015.

Prior to joining Energy Transfer, Mr.

5 unchanged sentences

In this capacity, he invests in and monitors energy midstream investments.

Hartman also serves on the board of directors of Southcross Holdings GP LLC.

Prior to joining EIG in 2014, Mr.

14 unchanged sentences

He has also served on the board of directors of the general partner of Sunoco LP since May 2016.

Long also serves as the Chief Financial Officer of the general partner of ET LP since February 2016 and a director of the general partner of ET LP since April 2019.

Long was appointed as Co-Chief Executive Officer of the general partner of ET LP effective January 2021.

Long previously served as the Chief Financial Officer of the general partner of ET LP from February 2016 until January 2021.

Long has also served as a director of the general partner of ET LP since April 2019.

Long also serves as Co-Chief Executive Officer of ETO’s general partner and was previously Chief Financial Officer of ETO’s general partner.

Long also served as the Chief Financial Officer and as a director of PennTex Midstream Partners, LP’s general partner from November 2016 to July 2017.

Long also serves as Chief Financial Officer of ETO and was previously Executive Vice President and Chief Financial Officer of Regency GP LLC from November 2010 to April 2015.

Long also served as Executive Vice President and Chief Financial Officer of Regency GP LLC from November 2010 to April 2015.

From May 2008 to November 2010, Mr.

6 unchanged sentences

Mason has served on the Board since April 2018.

Mason serves as Executive Vice President and General Counsel of the general partner of ET LP since December 2015, and has served as the Executive Vice President, General Counsel and President - LNG since October 2018 following the merger of ET LP and ETO.

Mason became Executive Vice President and General Counsel of the general partner of ET LP in December 2015, and has served as the Executive Vice President, General Counsel and President - LNG of the general partner of ET LP since October 2018 following the merger of ET LP and ETO.

Mason also served as a director of PennTex Midstream Partners, LP’s general partner from November 2016 to July 2017.

8 unchanged sentences

Ramsey also served as President and Chief Operating Officer and Chairman of the board of directors of PennTex Midstream Partners, LP’s general partner from November 2016 to July 2017.

Ramsey is also a director of Sunoco LP, having served as chairman of Sunoco LP’s board since April 2015.

Since August 2014, Mr.

Ramsey has served on the board of directors of the general partner of Sunoco LP, having served as the chairman of the board of directors of the general partner of Sunoco LP since April 2015.

Ramsey previously served as President of RPM Exploration, Ltd., a private oil and gas exploration partnership, and previously served as a director of RSP Permian, Inc.

13 unchanged sentences

Ramsey is licensed to practice law in the State of Texas.

He is qualified to practice in the Western District of Texas and the United States Court of Appeals for the Fifth Circuit.

He is qualified to practice in the Western District of Texas and the U.S.

Court of Appeals for the Fifth Circuit.

Ramsey formerly served as a director of Southern Union Company.

9 unchanged sentences

From 2005 to 2008, he was Group Vice President of Commercial for DCP Midstream, managing its upstream and downstream commercial business.

Waldheim started his professional career in 1978 with Champlin Petroleum as an auditor and financial analyst and served in roles involving NGL and crude oil distribution and marketing.

Waldheim started his professional career in 1978

with Champlin Petroleum as an auditor and financial analyst and served in roles involving NGL and crude oil distribution and marketing.

He served as Vice President of NGL and Crude Oil Marketing for Union Pacific Fuels from 1987 until 1998 at which time it was acquired by DCP Midstream.

1 unchanged sentence

Whitehurst has served on the Board since April 2019.

Whitehurst has served as the Executive Vice President and Head of Tax of LE GP since August 2014.

Whitehurst currently serves as the Chief Financial Officer of the general partner of ET LP, a position he has held since January 2021.

Prior to that, Mr.

Whitehurst served as the Executive Vice President and Head of Tax of LE GP since August 2014.

Prior to joining Energy Transfer, Mr.

5 unchanged sentences

To our knowledge and based solely on a review of Section 16(a) forms filed electronically with the SEC, we believe that all reporting obligations of the members of the Board, our executive officers and greater than 10 percent unitholders under Section 16(a) were satisfied during the year ended December 31, 2020, with the exception of one late Form 4 filing on behalf of Mr.

Tracy Owens reporting a vesting of phantom units.

Common Unit Ownership by Directors and Executive Officers

3 unchanged sentences

These expenses include all expenditures necessary or appropriate to the conduct of our business and that are allocable to us.

The Second Amended and Restated Agreement of Limited Partnership of USA Compression Partners, LP (the “Partnership Agreement”) provides that the General Partner will determine in good faith the expenses that are allocable to us.

The Partnership Agreement provides that the General Partner will determine in good faith the expenses that are allocable to us.

There is no cap on the amount that may be paid or reimbursed to the General Partner or its affiliates for compensation or expenses incurred on our behalf.

10 unchanged sentences

Liuzzi, Vice President, Chief Financial Officer and Treasurer;

Manias, Vice President and Chief Operating Officer;

Smith, Vice President and President, Northeast Region;

Scheller, Vice President and Chief Operating Officer;

• Christopher W.

Porter, Vice President, General Counsel and Secretary;

Kimble, Vice President, Human Resources;

Manias, Former Vice President and Chief Operating Officer.

Manias left the Partnership effective June 1, 2020.

Scheller was appointed as our new Vice President and Chief Operating Officer effective June 2, 2020.

Compensation Philosophy and Objectives

1 unchanged sentence

We share Energy Transfer’s philosophy that the NEOs’ total compensation levels should be competitive in the marketplace for executive talent and abilities.

The Compensation Committee generally targets at or near the 50th percentile of the market for the three main components of our compensation program:

The Compensation Committee generally targets a competitive range at or near the 50th percentile of the market for aggregate compensation consisting of the three main components of our compensation program:

base salary, annual discretionary cash bonus and long-term equity incentive awards.

The Compensation Committee believes the incentive-based balance is achieved by (i) the payment of annual discretionary cash bonuses that consider (a) the achievement of the financial performance objectives for a fiscal year set at the beginning of such fiscal year and (b) the individual contributions of each of the NEOs to our level of success in achieving the annual financial performance objectives, and (ii) the annual grant of time-based restricted phantom unit awards under the LTIP, which awards are intended to incentivize and retain our key employees for the long-term and motivate them to focus their efforts on increasing the market price of our common units and the level of cash distributions we pay to our common unitholders.

The Compensation Committee believes that a desirable balance of incentive-based compensation is achieved by:

(i) the payment of annual discretionary cash bonuses that consider (a) the achievement of the financial and operational performance objectives for a fiscal year set at the beginning of such fiscal year and (b) the individual contributions of each NEO to our level of success in achieving the annual financial and operational performance objectives, and (ii) the annual grant of time-based restricted phantom unit awards under the LTIP, which awards are intended to incentivize and retain our key employees for the long-term and motivate them to focus their efforts on increasing the market price of our common units and the level of cash distributions we pay to our common unitholders.

The following charts illustrate the level of at-risk incentive compensation we awarded in 2020 to our CEO and, on an averaged basis, the other NEOs.

1 unchanged sentence

Our compensation program is structured to achieve the following:

compensate executives with an industry-competitive total compensation package of competitive base salaries and significant incentive opportunities yielding a total compensation package at or near the 50th percentile of the market;

• compensate executive officers with an industry-competitive total compensation package of competitive base salaries and significant incentive opportunities yielding a total compensation package in a competitive range at or near the 50th percentile of the market;

• attract, retain and reward talented executive officers and key members of management by providing a total compensation package competitive with those of their counterparts at similarly situated companies;

• motivate executive officers and key employees to achieve strong financial and operational performance;

emphasize performance-based or “at risk” compensation;

• ensure that a significant portion of each executive officer’s compensation is performance-based or “at risk” compensation;

• reward individual performance.

1 unchanged sentence

Our executive compensation program is administered by the Compensation Committee.

The Compensation Committee considers market trends in compensation, including the practices of identified competitors, and the alignment of the compensation program with the Partnership’s strategy.

The Compensation Committee considers market trends in compensation, including the practices of identified competitors, and the alignment of the

compensation program with the Partnership’s compensation philosophy described above.

Specifically, for the NEOs, the Compensation Committee:

4 unchanged sentences

• approves the resulting cash or equity awards to the NEOs.

The Compensation Committee also considers other factors such as the role, contribution and performance of an individual relative to his or her peers at the Partnership.

The Compensation Committee does not assign specific weight to these factors, but rather makes a subjective judgment taking all of these factors into account.

The Compensation Committee also considers other factors such as the role, contribution, skills, experience and performance of an individual relative to his or her peers at the Partnership.

The Compensation Committee does not assign a specific weight to these factors, but rather makes a subjective judgment taking all of these factors into account.

The Compensation Committee reviews and approves all compensation for the NEOs.

5 unchanged sentences

The Compensation Committee also reviews publicly filed peer group executive compensation disclosures pertaining to certain executive roles, but because of limited sample size due to the relatively small number of publicly traded natural gas compression companies, the Compensation Committee uses this data as a reference point rather than a primary data source.

Periodically, we engage a third-party consultant to provide the Compensation Committee with market information about compensation levels at peer companies to assist in setting compensation levels for our executives, including the NEOs.

In light of the Transactions and resulting increased size of the Partnership and greater level of responsibility for each of the NEOs, in May 2018 the Compensation Committee engaged Longnecker & Associates (“Longnecker”), who is also the independent compensation advisor to Energy Transfer, to provide an updated targeted market review and benchmarking for certain members of our senior leadership team (the “2018 Longnecker Report”).

The Compensation Committee relied on the results of the 2018 Longnecker Report for determinations of base salary, bonus and general compensation items for 2019 for the NEOs.

The Compensation Committee also engaged Longnecker to conduct a new report in the latter part of the 2019 year that provided the Compensation Committee with assistance in setting NEO compensation for the 2020 year (the “2019 Longnecker Report”).

The Compensation Committee did not make long-term incentive compensation decisions until October of 2019, therefore the Compensation Committee used the 2019 Longnecker Report when determining the number of equity awards that should be granted to our NEOs in December 2019.

In connection with its engagement of Longnecker in both 2018 and 2019, based on the information presented to it, the Compensation Committee assessed the independence of Longnecker under applicable SEC and NYSE rules and concluded that Longnecker’s work for the Compensation Committee did not raise any conflicts of interest.

Our peer group selected by the Compensation Committee in consultation with Longnecker included the following companies for the 2018 Longnecker Report:

American Midstream Partners, LP

Antero Midstream GP LP

Periodically, we engage a third-party consultant to provide the Compensation Committee with market information about compensation levels at peer companies to assist in evaluating compensation levels for our executives, including the NEOs.

In the latter part of 2019, the Compensation Committee engaged Longnecker & Associates (“Longnecker”), who is also the independent compensation advisor to Energy Transfer, to provide an updated targeted market review and benchmarking for certain members of our senior leadership team (the “2019 Longnecker Report”).

The Compensation Committee relied on the results of the 2019 Longnecker Report for information on base salary, bonus and general compensation items for 2020 for the NEOs.

The long-term equity incentive awards granted to our NEOs in December 2020 were based on the then-determined 2021 base salaries of the NEOs.

In 2020, the Compensation Committee determined that the 2019 Longnecker Report was completed recently enough to be utilized as a data source in reviewing and setting 2021 NEO compensation levels.

In connection with its engagement of Longnecker in 2019, based on the information presented to it, the Compensation Committee assessed the independence of Longnecker under applicable SEC and NYSE rules and concluded that Longnecker’s work for the Compensation Committee did not raise any conflicts of interest.

Our peer group, as selected by the Compensation Committee in consultation with Longnecker, included the following companies for purposes of the 2019 Longnecker Report:

Company Ticker

Antero Midstream Corporation AM

Archrock, Inc.

Buckeye Partners, L.P.

Crestwood Equity Partners LP

Enlink Midstream, LLC

EQT Midstream Partners, LP

Exterran Corporation

Crestwood Equity Partners LP CEQP

Genesis Energy, L.P.

Holly Energy Partners, L.P.

Martin Midstream Partners L.P.

SemGroup Corporation

Summit Midstream Partners, LP

Tallgrass Energy Partners, LP

TETRA Technologies, Inc.

NuStar Energy, L.P.

SemGroup Corporation SEMG

Summit Midstream Partners, LP SMLP

Tallgrass Energy, LP TGE

Elements of the Compensation Program

Compensation for the NEOs consists primarily of the following elements and corresponding objectives:

Compensation Element

Primary Objective

To recognize performance of job responsibilities and to attract and retain individuals with superior talent.

Annual incentive compensation

To promote near-term performance objectives and reward individual contributions to the achievement of those objectives.

Long-term equity incentive awards

To emphasize long-term performance objectives, encourage the maximization of unitholder value and retain key executives by providing an opportunity to participate in the ownership of the Partnership.

Retirement savings (401(k)) plan

To provide an opportunity for tax-efficient savings.

Other elements of compensation and perquisites

To attract and retain talented executives in a cost-efficient manner by providing benefits comparable to those offered by similarly situated companies.

Compensation Element Primary Objective

Base salary To recognize performance of job responsibilities and to attract and retain individuals with superior talent.

Annual incentive compensation To promote near-term performance objectives and reward individual contributions to the achievement of those objectives.

Long-term equity incentive awards To emphasize long-term performance objectives, encourage the maximization of unitholder value and retain key executives by providing an opportunity to participate in the ownership of the Partnership.

Retirement savings (401(k)) plan To provide an opportunity for tax-efficient savings.

Other elements of compensation and perquisites To attract and retain talented executives in a cost-efficient manner by providing benefits comparable to those offered by similarly situated companies.

Base Salary for 2020

1 unchanged sentence

Base salary increases are determined based upon the job responsibilities, demonstrated proficiency and performance of the NEO and market conditions.

In connection with determining base salaries for each of the NEOs for 2019, the Compensation Committee and CEO utilized the 2018 Longnecker Report to determine comparable salaries for such executive roles within our peer group, and determined that the NEOs’ base salaries were generally in line with the market, and no material changes were needed for the 2019 year.

The 2019 base salaries (and 2018 base salaries, for comparison purposes) for the NEOs, including our CEO, are set forth in the following table:

Name and Principal Position

2019 Base Salary ($)

2018 Base Salary ($)

In connection with determining base salaries for each of the NEOs for 2020, other than Mr.

Scheller, the Compensation Committee and CEO utilized the 2019 Longnecker Report to determine comparable salaries for such executive roles within our peer group, and determined that the NEOs’ base salaries were generally in line with the market, and provided a merit increase for each NEO for the 2020 year.

Scheller’s base salary was determined in June 2020 in connection with his promotion to Vice President and Chief Operating Officer, based on available market data, including the 2019 Longnecker Report, and the role, contribution, skills, experience and performance of Mr.

Scheller relative to his peers at the Partnership.

The 2020 base salaries (and 2019 base salaries, where applicable, for comparison purposes) for the NEOs, including our CEO, are set forth in the following table:

Name and Principal Position 2020 Base Salary ($) 2019 Base Salary ($)

Long, President and Chief Executive Officer 664,050 644,709

Liuzzi, Vice President, Chief Financial Officer and Treasurer 412,000 400,000

Manias, Vice President and Chief Operating Officer

Smith, Vice President and President, Northeast Region

Scheller, Vice President and Chief Operating Officer 331,500 (1) (3)

Christopher W.

Porter, Vice President, General Counsel and Secretary 315,000 (3)

Kimble, Vice President, Human Resources 316,900 307,670

Manias, Former Vice President and Chief Operating Officer 450,205 (2) 437,091

________________________

(1) The amount above reflects the base salary effective upon Mr.

Scheller’s appointment as Vice President and Chief Operating Officer on June 2, 2020.

Scheller’s base salary for 2020 in his prior position was $265,225.

See “ – Summary Compensation Table” below for the salary received by Mr.

Scheller in 2020.

Manias left the Partnership effective June 1, 2020.

The amount above reflects his annualized base salary for 2020.

See “ – Summary Compensation Table” below for the salary received by Mr.

Manias in 2020.

Scheller and Mr.

Porter were not NEOs in 2019;

therefore, only their 2020 Base Salary is reported.

Annual Cash Incentive Compensation for 2020

In February 2019, the Compensation Committee made several modifications to the Partnership’s previous annual cash incentive program and approved the USA Compression Partners, LP Amended and Restated Annual Cash Incentive Plan (the “Bonus Plan”), which was effective for fiscal year 2019.

Each of the NEOs is entitled to participate in the Bonus Plan and their potential bonus is governed by the Bonus Plan and, for Messrs.

Smith and Kimble, also governed by their respective employment agreements.

Porter and Kimble, also governed by their respective employment agreements.

The Compensation Committee acts as the administrator of the Bonus Plan under the supervision of the full Board, and has the discretion to amend, modify or terminate the Bonus Plan at any time.

In February 2020, the Compensation Committee determined whether to make annual cash bonus awards to executives, including the NEOs, under the Bonus Plan attributable to the year ended December 31, 2019.

Although the Bonus Plan is generally based upon our satisfaction of certain performance measures that were pre-determined for the 2019 year, the Compensation Committee does retain the authority to use its business judgement to make decisions or adjustments to the Bonus Plan’s funding pool or the individual bonus awards resulting from the guidelines set forth below.

The Bonus Plan contains four payout factors and corresponding percentages that comprise the total annual target bonus for all eligible employees, including the NEOs (the “Annual Target Bonus Pool”):

(i) the Adjusted EBITDA Budget Target Factor (the “Adjusted EBITDA Factor”):

(ii) the Distributable Cash Flow Budget Target Payout Factor (the “DCF Factor”):

(iii) the Leverage Ratio Budget Target Factor (the “Leverage Ratio Factor”):

30% and (iv) the Safety Budget Target Payout Factor (the “Safety Factor”):

Each of the Adjusted EBITDA Factor and DCF Factor assign payout factors from 0% to 120% based on the percentage of the Partnership’s budgeted Adjusted EBITDA and DCF, respectively, achieved for the year, as shown in the following chart.

In February 2021, the Compensation Committee made the determination to pay annual cash bonus awards to executives, including the NEOs, under the Bonus Plan attributable to the year ended December 31, 2020.

Although the Bonus Plan is generally based upon our satisfaction of certain performance measures that were previously established for the 2020 year, the Compensation Committee retains the authority to use its business judgement to make decisions or adjustments to the Bonus Plan’s funding pool or the individual bonus awards resulting from the guidelines set forth below.

Bonus Plan Payout Factors

Payout Factor % of Total Annual Target Bonus

Adjusted EBITDA Budget Target Factor 30%

Distributable Cash Flow Budget Target Payout Factor 30%

Leverage Ratio Budget Target Factor 30%

Safety Budget Target Payout Factor 10%

Each of the Adjusted EBITDA Budget Target Factor (the “Adjusted EBITDA Factor”) and the Distributable Cash Flow Budget Target Payout Factor (the “DCF Factor”) assign payout factors from 0% to 120% based on the percentage of the Partnership’s budgeted Adjusted EBITDA and DCF, respectively, achieved for the year, as shown in the following chart.

Adjusted EBITDA and DCF Factors

% of Budget Target

Bonus Pool Payout Factor

Greater than or equal to 110%

109.9%-105.0%

Less than 80.0%

For the 2019 year, the Compensation Committee set the Adjusted EBITDA Budget Target at $402,958,000 and the DCF Budget Target at $207,750,000.

The Leverage Ratio Factor assigns payout factors based on the Partnership’s achievement of its budgeted Leverage Ratio (as defined in the Partnership’s Sixth Amended and Restated Credit Agreement, provided that, for the purposes of calculating the Leverage Ratio for the Bonus Plan, EBITDA attributable to the full plan year shall be used in lieu of any other time period) for the year, as shown in the following chart.

% of Budget Target Bonus Pool Payout Factor

Greater than or equal to 110% 1.20x

109.9%-105.0% 1.10x

104.9%-95.0% 1.00x

94.9%-90.0% 0.90x

89.9%-80.0% 0.75x

Less than 80.0% 0.00x

For the 2020 year, the Compensation Committee set the Adjusted EBITDA Budget Target at $426.4 million and the DCF Budget Target at $221.4 million.

The Leverage Ratio Budget Target Factor (the “Leverage Ratio Factor”) assigns payout factors based on the Partnership’s achievement of its budgeted Leverage Ratio (as defined in the Partnership’s Credit Agreement, provided that, for purposes of calculating the Leverage Ratio for the Bonus Plan, EBITDA attributable to the full plan year is used in lieu of any other time period) for the year, as shown in the following chart.

Leverage Ratio Factor

Range within Budget Target

Bonus Pool Payout Factor

More than 0.250 below budget target

0.250-0.125 below

0.124 below-0.125 above

0.126-0.375 above

0.376-0.500 above

Greater than 0.500 above

Range within Budget Target Bonus Pool Payout Factor

More than 0.250 below budget target 1.20x

0.250-0.125 below 1.10x

0.124 below-0.125 above 1.00x

0.126-0.375 above 0.70x

0.376-0.500 above 0.50x

Greater than 0.500 above 0.00x

For the 2020 year, the Compensation Committee set the Leverage Ratio Budget Target at 4.65x.

The Safety Factor assigns payout factors based on the Partnership’s Total Recordable Incident Rate, or TRIR (as calculated by the U.S.

The Safety Budget Target Payout Factor (the “Safety Factor”) assigns payout factors based on the Partnership’s Total Recordable Incident Rate, or TRIR (as calculated by the U.S.

Occupational Safety and Health Administration) against the Partnership’s TRIR target, as shown in the following chart.

Safety Factor

Bonus Pool Payout Factor

Less than 100%

Greater than 125%

% of Target Bonus Pool Payout Factor

Less than 100% 1.00x

100%-105% 0.90x

105.1%-110% 0.80x

110.1%-115% 0.70x

115.1%-125% 0.60x

Greater than 125% 0.00x

For the 2020 year, the Compensation Committee set the Safety Target at 0.90.

The establishment and amount of the Funded Bonus Pool is 100% discretionary and subject to approval and/or adjustment by the Compensation Committee.

The establishment and amount of the bonus pool is 100% discretionary and subject to approval and/or adjustment by the Compensation Committee.

In determining bonuses for the NEOs, the Compensation Committee takes into account whether the Partnership achieved or exceeded its targeted performance objectives.

In the case of the NEOs, their bonus pool targets range from 60% to 125% of their respective annual base earnings (which amount reflects the actual base salary earned during the calendar year to reflect periods before and after any base salary adjustment).

In the case of the NEOs, their bonus pool targets for the 2020 year range from 80% to 125% of their respective annual base earnings (which amount reflects the actual base salary earned during the calendar year to reflect periods before and after any base salary adjustment).

For the 2020 year, the Compensation Committee set a target bonus amount (the “Target Bonus”) for each NEO prior to the first quarter of the 2020 year, which was set as a percentage of the NEO’s base salary.

For the bonus applicable to the 2019 year, the Target Bonus, as a percentage of base salary and as a dollar amount, is reflected in the table below.

Percentage of Base Salary

The annual cash bonus pool targets for 2019 were based on the determination of the Compensation Committee in consultation with Longnecker, and in consideration of the available compensation data and internal compensation levels within Energy Transfer.

Scheller’s Target Bonus was determined in June 2020 in connection with his appointment as Vice President and Chief Operating Officer.

For the bonus applicable to the 2020 year, the Target Bonus, as a percentage of base salary and as a dollar amount, is reflected in the table

Name Percentage of Base Salary Amount ($)

Long, President and Chief Executive Officer 125 % 830,063

Liuzzi, Vice President, Chief Financial Officer and Treasurer 105 % 432,600

Scheller, Vice President and Chief Operating Officer (1) 85 % 281,775

Christopher W.

Porter, Vice President, General Counsel and Secretary 80 % 252,000

Kimble, Vice President, Human Resources 80 % 253,520

Manias, Former Vice President and Chief Operating Officer 100 % 450,205

________________________

(1) In connection with his appointment as Vice President and Chief Operating Officer on June 2, 2020, the Compensation Committee increased Mr.

Scheller’s Target Bonus from 60% of his base salary to 85% of his base salary and increased his base salary.

The Percentage of Base Salary column reflects this increased Target Bonus and the value reflected in the Amount column assumes that Mr.

Scheller’s increased Target Bonus and base salary were applicable for all of 2020.

Scheller’s actual Target Bonus for 2020 approved by the Compensation Committee was determined on a pro-rated basis, based on the amount of time he spent in his role as Vice President and Chief Operating Officer during 2020.

Scheller’s Target Bonus based on the prorated formula is $230,675.

The annual cash bonus pool targets for 2020 were based on the determination of the Compensation Committee in consultation with Longnecker, and in consideration of the available compensation data and the role, contribution, skills, experience and performance of an individual relative to his or her peers at the Partnership.

Target Bonuses, if any, are paid within one week following delivery by our independent auditor of the audit of our financial statements for the year to which the Target Bonus relates, but in any case no later than March 15 of the year following the year to which the Target Bonus relates.

3 unchanged sentences

and (iv) a TRIR of 0.32 resulting in a Safety Bonus Pool Payout Factor of 1.0.

The awards made pursuant to the Bonus Plan with respect to the year ended December 31, 2019 were:

Based on these payout factors, the awards made pursuant to the Bonus Plan with respect to the year ended December 31, 2020 equal 91% of each NEOs Target Bonus and were as follows:

Name Bonus ($)

Long, President and Chief Executive Officer 755,357

Liuzzi, Vice President, Chief Financial Officer and Treasurer 393,666

Scheller, Vice President and Chief Operating Officer (1) 209,914

Christopher W.

Porter, Vice President, General Counsel and Secretary 229,320

Kimble, Vice President, Human Resources 230,703

Manias, Former Vice President and Chief Operating Officer (1) —

________________________

Manias left the Partnership effective June 1, 2020.

Scheller was appointed as our new Vice President and Chief Operating Officer effective June 2, 2020.

Long-Term Equity Incentive Awards

The Board adopted the LTIP, which is designed to promote our interests, as well as the interests of our unitholders, by rewarding our officers, directors and certain of our employees for delivering desired performance results, as well as by strengthening our ability to attract, retain and motivate qualified individuals to serve as officers, directors and employees.

The LTIP provides for the grant, from time to time at the discretion of the Board, of unit awards, restricted units, phantom units, unit options, unit appreciation rights, distribution equivalent rights (“DERs”) and other common unit-based awards, although since our initial public offering in 2013 the Board has only granted awards of phantom units with DERs under the LTIP (the “Phantom Units”).

The LTIP provides for the grant, from time to time at the discretion of the Compensation Committee, of unit awards, restricted units, phantom units, unit options, unit appreciation rights, DERs and other common unit-based awards, although since our initial public offering in 2013 the Board has only granted awards of phantom units with DERs under the LTIP.

The Compensation Committee acts as the administrator of the LTIP.

Each phantom unit (“Phantom Unit”) relates to one of our common units, and represents the right to receive (as applicable) a common unit or an amount of cash equal to the fair market value of a common unit (or a combination thereof) upon the vesting of such Phantom Unit pursuant to the LTIP, the applicable award agreement thereunder (“Phantom Unit Agreement”) and as determined by the Compensation Committee in its discretion.

The outstanding, unvested Phantom Units granted under the LTIP and held by the NEOs are reflected below in “– Outstanding Equity Awards as of December 31, 2020.”

On November 1, 2018, following the Transactions, the Board adopted a new form of employee Phantom Unit award agreement under the LTIP (the “Phantom Unit Agreement”) to bring our long-term equity incentive compensation program in line with Energy Transfer’s practices.

The Phantom Unit Agreement (i) altered the vesting schedule of our time-based Phantom Units from three equal annual installments to incremental vesting over five years (60% on the third December 5 following the grant and 40% on the fifth December 5 following the grant) and (ii) provides for vesting of 100% of the outstanding, unvested Phantom Units in the event of a Change in Control (as defined under the LTIP and set forth below under “Potential Payments upon Termination or Change in Control”).

Our current Phantom Unit Agreement (i) provides for incremental vesting over five years in two tranches ((a) 60% on the third December 5 following the grant and (b) 40% on the fifth December 5 following the grant), (ii) provides for vesting of 100% of the outstanding, unvested Phantom Units in the event of (a) a Change in Control (as defined under the LTIP and set forth below under “Potential Payments upon Termination or Change in Control”) or (b) the death or Disability (as defined under the LTIP and set forth below under “Potential Payments upon Termination or Change in Control”) of the NEO, (iii) provides for vesting of 40% of the outstanding, unvested Phantom Units if the NEO voluntarily retires between the ages of 65-68 and has been employed by us, our General Partner, or our or its affiliates for at least 10 years (with the remaining 60% being forfeited), and (iv) provides for vesting of 50% of the outstanding, unvested Phantom Units if the NEO voluntarily retires over the age 68 and has been employed by us, our General Partner, or our or its affiliates for at least 10 years (with the remaining 50% being forfeited).

The vesting of the Phantom Units are subject, in each case, to the NEO’s continued employment with us until the relevant vesting date.

The target level of annual long-term incentive awards for each of the NEOs is expressed as a percentage of the NEO’s base salary.

In determining the level of the December 2019 grants of phantom units to the NEOs, the Compensation Committee, in consultation with Longnecker and taking into account internal compensation levels within Energy Transfer, determined each of the NEOs’ long-term incentive targets.

Due to the fact that determinations were made in late 2019, the base salaries used for these calculations were the base salaries set for the 2020 calendar year.

In determining the level of the December 2020 grants of Phantom Units to the NEOs, the Compensation Committee, taking into account market data and the role, contribution, skills, experience and performance of an NEO relative to his or her peers at the Partnership, determined each of the NEOs’ long-term incentive targets.

Due to the fact that determinations were made in late 2020, the base salaries used for these calculations were the then-determined base salaries set for the 2021 calendar year.

Each NEO’s grant value is shown in the following table:

Long-Term Incentive Target Amounts for the Year Ended December 31, 2020

Percentage of

Grant Date Amount ($)

Under the LTIP, the Compensation Committee has the discretion to determine whether any portion of phantom units should be settled in cash upon vesting for the purpose of conserving common units approved for issuance under the LTIP.

On February 13, 2019, the Compensation Committee approved the default settlement method for phantom units of 50% in cash (valued based on the closing price on the NYSE of the Partnership’s common units on the date of vesting) and 50% in common units for all vesting of phantom units occurring during 2019.

employee agrees to pay out of his or her own funds the amount of any required federal withholding to the extent that the cash portion is insufficient for the Partnership to withhold and pay such amounts on the employee’s behalf), the Board approves in advance such lesser cash settlement percentage.

Name (1) Percentage of

Base Salary Grant Date Amount ($)

Long, President and Chief Executive Officer 400 % 2,656,200

Liuzzi, Vice President, Chief Financial Officer and Treasurer 250 % 1,030,000

Scheller, Vice President and Chief Operating Officer 175 % 612,500

Christopher W.

Porter, Vice President, General Counsel and Secretary 175 % 577,500

Kimble, Vice President, Human Resources 175 % 568,750

________________________

Manias left the Partnership prior to the grant of the long-term incentive awards for 2020.

Under the LTIP, the Compensation Committee has the discretion to determine whether any portion of Phantom Units should be settled in cash upon vesting.

On October 29, 2019, the Compensation Committee approved the default settlement method for Phantom Units of 50% in cash (valued based on the closing price on the NYSE of the Partnership’s common units on the date of vesting) and 50% in common units for all vesting of Phantom Units occurring during 2020.

However, the Compensation Committee also specified that if an employee affirmatively requests in writing that the percentage of cash settlement be set at a specific amount that is less than 50% (and such employee agrees to pay out of his or her own funds the amount of any required federal withholding to the extent that the cash portion is insufficient for the Partnership to withhold and pay such amounts on the employee’s behalf), the Board approves in advance such lesser cash settlement percentage.

Each Phantom Unit granted to an employee, including the NEOs, is granted in tandem with a corresponding DER, which entitles the recipient to receive an amount in cash on a quarterly basis equal to the product of (a) the number of Phantom Units granted to the grantee that remain outstanding and unvested as of the record date for the distribution on the Partnership’s common units for such quarter and (b) the quarterly distribution with respect to the Partnership’s common units.

1 unchanged sentence

Retention Phantom Unit Awards

On October 29, 2019, the Compensation Committee approved a grant of Phantom Units (the “Retention Units”), which occurred on December 5, 2019, in the following amounts:

(i) 41,764 Retention Units to Mr.

and (ii) 25,911 Retention Units to Mr.

Liuzzi, and were made pursuant to Retention Phantom Unit Agreements (the “Retention Agreements”), the form of which was approved by the Compensation Committee on November 1, 2018, entered into between the Partnership and each of Messrs.

Long and Liuzzi.

The Retention Units will vest incrementally, with 60% of the Retention Units vesting on December 5, 2022 and 40% of the Retention Units vesting on December 5, 2024, subject in each case to the NEO’s continued employment with the Partnership.

Each Retention Unit was granted with a corresponding DER.

The Compensation Committee approved the grant of Retention Units in recognition of the importance of Messrs.

Long and Liuzzi to the Partnership’s long-term success and to encourage their retention by providing additional time-based compensation.

In 2018 the Compensation Committee approved an additional grant of Phantom Units to each of Messrs.

Long, Liuzzi and Manias, and in 2019 approved an additional grant of Phantom Units to each of Messrs.

Long and Liuzzi, in each case in recognition of the importance of such NEO to the Partnership’s long term success and to encourage their retention by providing additional time-based compensation.

These Phantom Units are referred to as “Retention Units” and were issued pursuant to Retention Phantom Unit Agreements entered into between our General Partner and the applicable NEO on the grant date of the award (the “Retention Agreements”).

The Compensation Committee did not award any Retention Units to our NEOs in 2020.

The Retention Units will vest incrementally, with 60% of the Retention Units vesting on the third December 5 following the grant and 40% on the fifth December 5 following the grant.

The Retention Agreements also provide for the vesting of 100% of the then-unvested Retention Units upon (i) the NEO’s termination of employment without Cause or for Good Reason (each as defined in the Retention Agreement and set forth below under “Potential Payments upon Termination or Change in Control”),

(ii) a Change in Control (as defined under the LTIP and set forth below under “Potential Payments upon Termination or Change in Control”) or (iii) the death or Disability (as defined under the LTIP and set forth below under “Potential Payments upon Termination or Change in Control”) of the NEO.

In addition, Mr.

Long’s Retention Agreement provides for vesting of 40% of the outstanding, unvested Phantom Units if Mr.

Long voluntarily retires at age 65 or older and has been employed by us, our General Partner, or our or its affiliates for at least 10 years (with the remaining 60% being forfeited).

The vesting of the Retention Units are subject, in each case, to the NEO’s continued employment with us until the relevant vesting date.

For additional information regarding the Retention Agreements, please see “– Potential Payments upon Termination or Change in Control-Retention Phantom Unit Agreements” below.

Benefit Plans and Perquisites

We provide the NEOs with certain personal benefits and perquisites, which we do not consider to be a significant component of our overall executive compensation program, but which we recognize are an important factor in attracting and retaining talented executives.

The NEOs are eligible under the same plans as all other employees with respect to our medical, dental, vision, disability and life insurance benefits and a defined contribution plan that is tax-qualified under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”).

In addition, we currently provide one or more NEOs with (i) an annual automobile allowance;

(ii) club memberships;

(iii) personal administrative support;

and (iv) personal tax support.

We provide the NEOs with certain other benefits and perquisites, which we do not consider to be a significant component of our overall executive compensation program, but which we recognize as an important factor in attracting and retaining talented executives.

The NEOs are eligible under the same plans as all other employees with respect to our (i) medical, dental, vision, disability and life insurance benefits and (ii) a defined contribution plan that is tax-qualified under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”).

In addition, we currently provide one or more NEOs with (a) an annual automobile allowance;

(b) club memberships;

and (c) personal tax support.

During 2020, we also provided one or more NEOs with personal administrative support.

The Compensation Committee has determined it is appropriate to offer these perquisites in order to provide compensation opportunities competitive with those offered by similarly situated public companies.

In determining the compensation payable to the NEOs, the Compensation Committee considers perquisites in the context of the total compensation the NEOs are eligible to receive.

However, given the fact that perquisites represent a relatively small portion of the NEOs’ total compensation, the availability of these perquisites does not materially influence the Compensation Committee’s decision making with respect to other elements of the total compensation to which the NEOs are entitled or which they are awarded.

The value of personal benefits and perquisites we provided to each of the NEOs in 2020 is set forth below in “– Summary Compensation Table.”

1 unchanged sentence

Each of Messrs.

Smith and Kimble is party to an employment agreement with us (together, the “Employment Agreements”), each of which have been extended on a year-to-year basis and will be automatically extended for successive twelve month periods unless either party delivers written notice to the other at least 90 days prior to the end of the current employment term.

Porter and Kimble is party to an employment agreement with us (together, the “Employment Agreements”), each of which has been extended on a year-to-year basis and will be automatically extended for successive twelve month periods unless either party delivers written notice to the other at least 90 days prior to the end of the current employment term.

Please see the description of the Employment Agreements under “Potential Payments upon Termination or Change in Control” for further details on the terms of the Employment Agreements.

6 unchanged sentences

We have also allocated our compensation among base salary and short and long-term compensation in such a way as to not encourage excessive risk-taking.

Furthermore, all business groups and employees receive the same core compensation components of base pay and short-term incentives.

We typically offer long-term equity incentives to employees at the director level or above, and we use phantom units rather than unit options for these equity awards because phantom units retain value even in a depressed market, so employees are less likely to take unreasonable risks to get or keep options “in-the-money.” Finally, the time-based vesting over three to five years for our long-term incentive awards ensures that our employees’ interests align with those of our unitholders with respect to our long-term performance.

Furthermore, all business groups and employees receive the similar compensation components of base pay and short-term incentives.

We typically offer long-term equity incentives to employees at the director level or above, and we use Phantom Units rather than unit options for these equity awards because Phantom Units retain value even in a depressed market, so employees are less likely to take unreasonable risks to get or keep options “in-the-money.” Finally, the time-based vesting over three to five years for our currently outstanding long-term incentive awards ensures that our employees’ interests align with those of our unitholders with respect to our long-term performance.

Accounting and Tax Considerations

We account for the equity compensation expense for equity awards granted under our LTIP in accordance with U.S.

generally accepted accounting principles, which requires us to estimate and record an expense for each equity award over the vesting period of the award.

Phantom Units are accounted for as a liability and are re-measured at fair value at the end of each reporting period using the market price of the Partnership’s common units.

We account for the equity compensation expense for equity awards granted under our LTIP in accordance with GAAP, which requires us to estimate and record an expense for each equity award over the vesting period of the award.

For employees, Phantom Units are accounted for as a liability and are re-measured at fair value at the end of each reporting period using the market price of the Partnership’s common units.

Phantom Units granted to independent directors do not have a cash settlement option;

1 unchanged sentence

During the requisite service period, compensation cost is recognized using the proportionate amount of the award’s fair value that has been earned through service to date.

Because we are a partnership and the General Partner is a limited liability company, Section 162(m) of the Internal Revenue Code (the “Code”) does not apply to the compensation paid to the NEOs and, accordingly, the Compensation Committee did not consider its impact in making the compensation recommendations discussed above.

Because we are a partnership and the General Partner is a limited liability company, Section 162(m) of the Internal Revenue Code (the “Code”), which generally precludes public corporations from taking a tax deduction for individual compensation to certain of its executive officers in excess of $1 million, does not apply to the compensation paid to the NEOs and, accordingly, the Compensation Committee did not consider its impact in making the compensation recommendations discussed above.

Compensation Committee Interlocks and Insider Participation

12 unchanged sentences

Summary Compensation Table

Since our initial public offering (“IPO”) in 2013 and until December 31, 2018, we were considered an “emerging growth company” (“EGC”) under the Jumpstart Our Business Startups Act.

As an EGC we were only required to disclose compensation information for our three most highly compensated individuals, compared to five individuals as is required of companies that do not qualify for reduced disclosure requirements.

Since 2018 was the first fiscal year for which we were required to disclose compensation information for five NEOs, the following table provides a summary of the compensation paid to (i) three NEOs for the years ended December 31, 2019, 2018 and 2017 and (ii) five NEOs for the years ended December 31, 2019 and 2018.

Summary Compensation Table

Name and Principal Position

Non-Equity Incentive Plan Compensation ($) (3)

The following table provides information concerning compensation of our NEOs for the fiscal years presented below, as applicable.

Name and Principal Position Year Salary ($) Bonus

($) (2) Non-Equity Incentive Plan Compensation ($) (3) All Other

($) (4)(5) Total ($)

2020 688,846 — 2,656,189 755,357 1,053,015 5,153,407

President and Chief Executive Officer 2019 644,709 — 3,320,238 878,416 616,583 5,459,946

2018 644,709 818,597 5,942,922 — 322,176 7,728,404

2020 427,385 — 1,029,995 393,666 459,159 2,310,205

Vice President, Chief Financial Officer and Treasurer 2019 399,509 — 1,441,971 457,800 330,446 2,629,726

2018 387,239 368,763 2,331,734 — 261,277 3,349,013

Scheller 2020 314,384 — 612,496 209,914 114,911 1,251,705

Vice President and Chief Operating Officer

Vice President and President, Northeast Region

Christopher W.

Porter 2020 326,154 — 577,490 229,320 150,872 1,283,836

Vice President, General Counsel and Secretary

2020 328,733 — 568,744 230,703 193,124 1,321,304

Vice President, Human Resources 2019 307,670 — 554,560 268,288 163,538 1,294,056

2018 307,670 273,457 1,105,336 — 176,784 1,863,247

Represents the awards earned under the applicable Bonus Plan for the years ended December 31, 2018 and 2017 for Messrs.

Long, Liuzzi and Manias, and for the year ended December 31, 2018 for Messrs.

Smith and Kimble.

Manias 2020 200,356 — — — 2,507,199 2,707,555

Former Vice President and Chief Operating Officer 2019 437,092 — 1,012,957 476,430 375,506 2,301,985

2018 437,092 443,986 2,682,754 — 323,631 3,887,463

________________________

(1) Represents the awards earned under our previous bonus plan for the year ended December 31, 2018.

(2) The Phantom Unit values reflect the grant date fair value of the awards calculated in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification (“ASC”) Topic 718, disregarding the estimated likelihood of forfeitures.

For a discussion of the assumptions utilized in determining the fair value of these awards, please see Note 15 in Part II, Item 8 “Financial Statements and Supplementary Data”.

In the 2017 and 2018 years, the awards reflected in this column reflect both Phantom Units and performance-based phantom unit awards, which were all accelerated in connection with the Transactions and are no longer outstanding.

Represents the awards earned under the Bonus Plan for 2019 for each of the NEOs.

The awards reflected in the 2018 year row reflect both Phantom Units and performance-based Phantom Unit awards, which performance-based Phantom Unit awards were all accelerated in connection with the Transactions and are no longer outstanding.

(3) Represents the awards earned under the Bonus Plan for 2020 and 2019 for each of the NEOs.

Amounts earned for the 2020 year will be paid after the Partnership’s audited financials are finalized.

See the chart below for a detailed breakdown of amounts reported in this column:

Automobile Allowance

Employer 401(k) Contributions

Club Membership Dues

Administrative Support

(4) See the chart and footnote (5) below for a detailed breakdown of amounts reported in this column for 2020:

Name DERs Automobile Allowance Employer 401(k) Contributions Club Membership Dues Administrative Support Tax Support Parking

$ 998,957 $ 18,000 $ 14,250 $ 11,808 $ 2,461 $ 0 $ 7,540

$ 443,934 — $ 14,250 — — — $ 974

Scheller $ 101,457 — $ 12,480 — — — $ 974

Porter $ 133,532 — $ 14,250 — — — $ 3,090

$ 175,784 — $ 14,250 — — — $ 3,090

Manias $ 215,265 — $ 10,018 — — $ 0 $ 406

Manias left the Partnership effective June 1, 2020.

In connection with his departure, he received a separation payment of $1,340,997 and, pursuant to his Retention Agreement dated November 1, 2018, a release payment in the amount of $165,375.

Additionally, 59,626 unvested Phantom Units granted to Mr.

Manias under his Retention Agreement dated November 1, 2018 and his Employee Phantom Unit Agreement dated February 12, 2018 vested in connection with his departure, which units had a value of $775,138 on the date of Mr.

Manias’s departure.

Grants of Plan-Based Awards during the Year Ended December 31, 2020

The below reflects awards granted to our NEOs under the LTIP during 2019.

Approval Date of Equity-Based

Estimated Possible Payouts Under Non-equity Incentive Plan Awards (1)

All Other Unit Awards:

The below reflects awards granted to our NEOs under the LTIP and our Bonus Plan during 2020.

Name Grant Date Approval Date of Equity-Based

Awards Estimated Possible Payouts Under Non-equity Incentive Plan Awards (1) All Other Unit Awards:

Number of Units

(#) (2) (3) Grant Date Fair Value of Unit Awards

Target ($) Maximum ($)

Long 2/13/2020 830,063 979,474

President and Chief Executive Officer 12/5/2020 10/28/2020 213,520 2,656,189

Liuzzi 2/13/2020 432,600 510,468

Vice President, Chief Financial Officer and Treasurer 12/5/2020 10/28/2020 82,797 1,029,995

Scheller 5/21/2020 230,675 272,197

Vice President and Chief Operating Officer 12/5/2020 10/28/2020 49,236 612,496

Christopher W.

Porter 2/13/2020 252,000 297,360

Vice President, General Counsel and Secretary 12/5/2020 10/28/2020 46,422 577,490

Kimble 2/13/2020 253,520 299,154

Vice President, Human Resources 12/5/2020 10/28/2020 45,719 568,744

Manias (5) 2/13/2020 450,205 531,242

Former Vice President and Chief Operating Officer

________________________

The potential payout pursuant to the 2019 Bonus Plan awards could be zero, thus we have not reflected a threshold amount in the table above.

(1) These awards were granted in 2020 pursuant to our Bonus Plan.

The potential payout pursuant to these awards could be zero, thus we have not reflected a threshold amount in the table above.

Actual amounts earned for the 2020 year have been reflected within the Summary Compensation Table above.

The Retention Units granted on December 5, 2019 to Messrs.

Long and Liuzzi and the Phantom Units granted on December 5, 2019 to all of the NEOs will vest incrementally, with 60% of the Retention Units and Phantom Units vesting on December 5, 2022 and the remaining 40% of the Retention Units and Phantom Units vesting on December 5, 2024.

The Retention Units and the Phantom Units granted on December 5, 2019 will also vest in full upon a Change in Control (as defined in the LTIP) or the death or Disability (as defined in the LTIP) of the NEO.

Long retires after attaining the age of 65, 60% of his then-unvested Retention Units will be forfeited, and the remainder will vest, at the time of retirement.

With respect to the Phantom Units granted December 5, 2019 to all of the NEOs, if the NEO retires after attaining the age of 65, 60% of his then-unvested Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

(2) The Phantom Units granted on December 5, 2020 to our NEOs were granted pursuant to our LTIP and will vest incrementally, with 60% of the Phantom Units vesting on December 5, 2023 and the remaining 40% of the Phantom Units vesting on December 5, 2025.

These Phantom Units will also vest in full upon a Change in Control (as defined in the LTIP) or the death or Disability (as defined in the LTIP) of the NEO.

If the NEO retires after attaining the age of 65, 60% of his then-unvested Phantom Units granted on December 5, 2020 will be forfeited, and the remainder will vest, at the time of retirement.

If the NEO is over age 68 at the time of retirement, 50% of his then-unvested Phantom Units granted December 5, 2020 will be forfeited, and the remainder will vest, at the time of retirement.

The reported grant date fair value of unit awards was calculated by multiplying $15.90, the closing price of the Partnership’s common units on the date of grant (December 5, 2019) by the number of units granted, as required by FASB ASC Topic 718.

(3) The Phantom Units granted on December 5, 2020 were granted in tandem with a corresponding DER.

(4) The reported grant date fair value of unit awards was calculated by multiplying $12.44, the closing price of the Partnership’s common units on December 4, 2020, the last business day prior to the date of grant (December 5, 2020), due to the grant date falling on a Saturday, by the number of units granted, as required by FASB ASC Topic 718.

Manias left the Partnership effective June 1, 2020.

Outstanding Equity Awards as of December 31, 2020

The following table provides information regarding Phantom Units granted to the NEOs pursuant to the LTIP in each of the years ended December 31, 2018, 2019 and 2020 that were outstanding as of December 31, 2020, as well as the scheduled vesting schedule for each outstanding award.

Potential acceleration events or change in control treatment for the phantom units will be described below in the section titled “Potential Payments Upon Termination or Change in Control.” None of the NEOs held any outstanding option awards as of December 31, 2019.

Number of Outstanding Phantom Units

Potential acceleration events or change in control treatment for the Phantom Units are described below in the section titled “Potential Payments Upon Termination or Change in Control.” None of the NEOs held any outstanding option awards as of December 31, 2020.

Name Number of Outstanding Phantom Units

(#) Market Value of Outstanding Phantom Units

Long, President and Chief Executive Officer

266,874 (1)(2) 3,629,486

208,820 (4)(5) 2,839,952

2020 Grant 213,520 (6) 2,903,872

Liuzzi, Vice President, Chief Financial Officer and Treasurer

115,105 (1)(2)(3) 1,565,428

90,690 (4)(5) 1,233,384

2020 Grant 82,797 (6) 1,126,039

Scheller, Vice President and Chief Operating Officer

15,947 (2)(3) 216,879

2019 Grant 31,446 (4) 427,666

2020 Grant 49,236 (6) 669,610

Christopher W.

Porter, Vice President, General Counsel and Secretary

30,718 (2)(3) 417,765

2019 Grant 31,698 (4) 431,093

2020 Grant 46,422 (6) 631,339

Kimble, Vice President, Human Resources

44,934 (2)(3) 611,102

2019 Grant 34,878 (4) 474,341

2020 Grant 45,719 (6) 621,778

________________________

(1) On November 1, 2018, Mr.

Long received a grant of 90,000 Retention Units pursuant to the LTIP and a Retention Agreement entered into by Mr.

Long and the General Partner.

Liuzzi received a grant of 90,000 Retention Units and 35,000 Retention Units, respectively, pursuant to the LTIP and applicable Retention Agreement.

The Retention Units vest incrementally, with 60% of the Retention Units vesting on December 5, 2021 and 40% of the Retention Units vesting on December 5, 2023.

On December 5, 2018, Mr.

Long received a grant of 176,874 Phantom Units pursuant to the LTIP with the same vesting schedule as the Retention Units.

Represents the number of Phantom Units granted on February 13, 2017 pursuant to the LTIP that had not vested as of December 31, 2019.

The Phantom Units vest in three equal annual installments on each subsequent February 15th, beginning with the first installment that vested on February 15, 2018.

(2) Includes Phantom Units granted pursuant to the LTIP on December 5, 2018 to each of the NEOs:

176,874 to Mr.

68,587 to Mr.

13,717 to Mr.

27,846 to Mr.

and 36,927 to Mr.

The Phantom Units granted on December 5, 2018 vest incrementally, with 60% of the Phantom Units vesting on December 5, 2021 and the remaining 40% of the Phantom Units vesting on December 5, 2023.

(3) Includes Phantom Units granted pursuant to the LTIP on February 12, 2018 that had not vested as of December 31, 2020.

The Phantom Units granted on February 12, 2018 vest in three equal annual installments on each subsequent February 15th, beginning with the first installment that vested on February 15, 2019.

Amounts shown also include Phantom Units granted on December 5, 2018 to each of the NEOs.

The Phantom Units granted on December 5, 2018 vest incrementally, with 60% of the Phantom Units vesting on December 5, 2021 and 40% of the Phantom Units vesting on December 5, 2023.

Includes Retention Units granted on November 1, 2018 pursuant to the LTIP and a Retention Agreement entered into by the applicable NEO and the General Partner that had not vested as of December 31, 2019.

The Retention Units vest incrementally, with 60% of the Retention Units vesting on December 5, 2021 and the remaining 40% of the Retention Units vesting on December 5, 2023.

On February 15, 2021, the remaining unvested Phantom Units awarded on February 12, 2018 held by the NEOs vested as follows:

11,518 to Mr.

and 8,007 to Mr.

(4) Includes Phantom Units granted pursuant to the LTIP on December 5, 2019 to each of the NEOs:

6 unchanged sentences

(5) On December 5, 2019, Mr.

Long also received a grant of 41,764 Retention Units pursuant to the LTIP and a Retention Agreement entered into by Mr.

Long and the General Partner.

Liuzzi received a grant of 41,764 and 25,911 Retention Units, respectively, pursuant to the LTIP and applicable Retention Agreement.

The Retention Units vest incrementally, with 60% of the Retention Units vesting on December 5, 2022 and 40% of the Retention Units vesting on December 5, 2024.

On December 5, 2019, Mr.

Liuzzi also received a grant of 25,911 Retention Units pursuant to the LTIP and a Retention Agreement entered into by Mr.

Liuzzi and the General Partner.

Each Retention Unit is the economic equivalent of one common unit.

The Retention Units vest incrementally, with 60% of the Retention Units vesting on December 5, 2022 and the remaining 40% of the Retention Units vesting on December 5, 2024.

(6) Includes Phantom Units granted pursuant to the LTIP on December 5, 2020 to each of the NEOs:

213,520 to Mr.

82,797 to Mr.

49,236 to Mr.

46,422 to Mr.

and 45,719 to Mr.

The Phantom Units granted on December 5, 2020 vest

incrementally, with 60% of the Phantom Units vesting on December 5, 2023 and the remaining 40% of the Phantom Units vesting on December 5, 2025.

(7) The market value of Phantom Units is calculated by multiplying $13.60, the closing price of the Partnership’s common units on December 31, 2020, by the number of Phantom Units outstanding.

3 unchanged sentences

Long did not have any awards vest during the 2020 year.

Number of Phantom Units Vested

Name Number of Phantom Units Vested

(#) Value Realized on Vesting

Long, President and Chief Executive Officer — —

Liuzzi, Vice President, Chief Financial Officer and Treasurer 22,409 (1) 338,824

Scheller, Vice President and Chief Operating Officer 3,679 55,626

Christopher W.

Porter, Vice President, General Counsel and Secretary 4,682 (2) 70,792

Kimble, Vice President, Human Resources 15,578 (3) 235,539

Manias, Former Vice President and Chief Operating Officer 88,082 (4)(5) 1,205,393

________________________

1 unchanged sentence

The remaining 16,806 Phantom Units vested following such cash settlement.

Manias settled approximately 35% of his newly vested Phantom Units in cash in the amount of $348,637 (before taxes), which cash settlement was reported as a disposition of those Phantom Units.

The remaining 43,188 Phantom Units vested following such cash settlement.

Smith settled approximately 50% of his newly vested Phantom Units in cash in the amount of $171,980 (before taxes), which cash settlement was reported as a disposition of those Phantom Units.

Porter settled approximately 50% of his newly vested Phantom Units in cash in the amount of $35,396 (before taxes), which cash settlement was reported as a disposition of those Phantom Units.

The remaining 2,341 Phantom Units vested following such cash settlement.

1 unchanged sentence

The remaining 7,788 Phantom Units vested following such cash settlement.

The value realized on vesting of Phantom Units was calculated by multiplying $14.99, the closing price of the Partnership’s common units on the date of vesting (February 15, 2019) by the number of Phantom Units vesting.

Manias settled approximately 50% of his newly vested Phantom Units in cash in the amount of $602,696 (before taxes), which cash settlement was reported as a disposition of those Phantom Units.

The remaining 44,041 Phantom Units vested following the applicable cash settlement.

(5) Pursuant to the terms of Mr.

Manias’s Retention Agreement dated November 1, 2018 and Phantom Unit Agreement dated February 12, 2018, 59,626 unvested Phantom Units granted to Mr.

Manias under such agreements vested in connection with his departure on June 1, 2020.

(6) The value realized on vesting of Phantom Units for Messrs.

Liuzzi, Scheller, Porter and Kimble was calculated by multiplying $15.12, the closing price of the Partnership’s common units on February 14, 2020, the last business day prior to the date of vesting (February 15, 2020), which vesting date fell on a Saturday, by the number of Phantom Units vesting.

(7) The value realized on vesting of Phantom Units for Mr.

Manias was calculated by adding the following amounts:

(i) the amount determined by multiplying $15.12, the closing price of the Partnership’s common units on February 14, 2020, the last business day prior to the date of vesting (February 15, 2020), which vesting date fell on a Saturday, by the number of Phantom Units vesting on February 15, 2020, and (ii) the amount determined by multiplying $13.00, the closing price of the Partnership’s common units on June 1, 2020, by the number of Phantom Units vesting on that date.

Potential Payments upon Termination or Change in Control

The NEOs are entitled to severance payments and/or other benefits upon certain terminations of employment and, in certain cases, in connection with a Change in Control (as defined below) of the General Partner.

All capitalized terms used in the following description but not defined therein shall have the definitions set forth in the referenced document.

All capitalized terms used in the following description but not defined therein will have the definitions set forth in the referenced document.

Retention Phantom Unit Agreements

2 unchanged sentences

Also, on December 5, 2019, each of Messrs.

Long and Liuzzi entered into a Retention Agreement providing for a grant of Retention Units that will vest incrementally, with 60% of the Retention Units vesting on December 5, 2022 and 40% of the Retention Units vesting on December 5, 2024.

The Retention Agreements provide for the vesting of 100% of the then-unvested Retention Units upon (i) the NEO’s termination of employment without Cause or for Good Reason (ii) a Change in Control or (iii) the death or Disability (as defined under the LTIP) of the NEO.

Long and Liuzzi entered into a Retention Agreement providing for a grant of Retention Units that will vest incrementally, with 60% of the

Retention Units vesting on December 5, 2022 and 40% of the Retention Units vesting on December 5, 2024.

For the purposes of the following description, the “Company” means USA Compression GP, LLC.

The Retention Agreements provide for the vesting of 100% of the then-unvested Retention Units upon (i) the NEO’s termination of employment without Cause or for Good Reason (each as defined in the Retention Agreement and described below), (ii) a Change in Control (as defined under the LTIP and as described below) or (iii) the death or Disability (as defined under the LTIP and as described below) of the NEO.

In the event of the NEO’s termination of employment without Cause or for Good Reason, provided that the NEO executes and does not revoke a general release and waiver of claims, the NEO will also be entitled to a severance payment intended to capture the value of future distributions associated with Retention Units forfeited for tax withholding purposes upon vesting.

Long’s termination of employment due to retirement, provided that Mr.

Long is at least 65 years of age at the time of such retirement, 40% of his then-outstanding, unvested Retention Units will receive accelerated vesting and 60% of his then-outstanding, unvested Retention Units will automatically be forfeited at the time of his retirement pursuant to the terms of Mr.

Pursuant to the terms of Mr.

Long’s Retention Agreements, upon Mr.

Long’s termination of employment due to voluntary retirement, provided that Mr.

Long is at least 65 years of age at the time of such retirement and has been employed by the Company, the Partnership or their Affiliates for at least 10 years, 40% of his then-outstanding, unvested Retention Units will receive accelerated vesting and the remaining 60% will automatically be forfeited at the time of his retirement pursuant to the terms of Mr.

Long’s Retention Agreement.

As used in the Retention Agreements, “Cause” means (1) the commission by the NEO of a criminal or other act that involves dishonesty, misrepresentation or moral turpitude;

(2) engagement by the NEO in any willful or deliberate misconduct which causes or is reasonably likely to cause economic damage to the Company, the Partnership or any of its and their subsidiaries or injury to

the business reputation of the Company, the Partnership or its or their subsidiaries;

(3) engagement in any dishonest or fraudulent conduct by the NEO in the performance of the NEO’s duties on behalf of the Company, the Partnership or its or their subsidiaries, including, without limitation, the theft or misappropriation of funds or the disclosure of confidential or proprietary information;

4 unchanged sentences

or (8) any other conduct materially detrimental (as determined in the sole reasonable judgment of the Company) to the Company’s, the Partnership’s or its or their subsidiaries’ business.

With respect to a termination for Cause pursuant to clauses (5), (6), (7) and (8) above, such termination will not be considered for Cause unless the NEO has been given written notice specifying in detail the conduct that allegedly constitutes grounds to terminate for Cause and an opportunity for thirty (30) days after receipt of such notice to cure such grounds, if curable.

With respect to a termination for Cause pursuant to clauses (5), (6), (7) and (8) above, such termination will not be considered for Cause unless the NEO has been given written notice specifying in detail the conduct that allegedly constitutes grounds to terminate for Cause and an opportunity for 30 days after receipt of such notice to cure such grounds, if curable.

Termination for Cause under clauses (1), (2), (3) or (4) above cannot be cured by the individual and no such notice to cure will be delivered.

“Good Reason” is defined under the Retention Agreements as the occurrence, during the Restricted Period and without the NEO’s prior written consent, of any one or more of the following:

“Good Reason” is defined under the Retention Agreements as the occurrence, during the Restricted Period (as defined in the Retention Agreement) and without the NEO’s prior written consent, of any one or more of the following:

(1) a material reduction in the NEO’s current title;

(2) a more than 10% reduction by the Company in the NEO’s rate of annual base salary, annual bonus target or annual long-term incentive target, each determined as of the grant date;

(3) a material diminution in the NEO’s authority, duties, reporting relationship or responsibilities that is inconsistent in a material and adverse respect with the NEO’s authority, duties, reporting relationship or responsibilities with the Partnership on the date of the Grant Date, provided that such material diminution is also accompanied with any associated reduction in the NEO’s annual base salary, annual bonus target or annual long-term incentive target, determined based on the NEO’s highest annual base salary, annual bonus target or annual long-term incentive target during the most recent 365-day period prior to the date the change described in this clause (3) occurs;

(3) a material diminution in the NEO’s authority, duties, reporting relationship or responsibilities that is inconsistent in a material and adverse respect with the NEO’s authority, duties, reporting relationship or responsibilities with the Partnership on the grant date, provided that such material diminution is also accompanied with any associated reduction in the NEO’s annual base salary, annual bonus target or annual long-term incentive target, determined based on the NEO’s highest annual base salary, annual bonus target or annual long-term incentive target during the most recent 365-day period prior to the date the change described in this clause (3) occurs;

or (4) a change of 50 miles or more in the geographic location of the NEO’s principal place of employment as of the grant date.

For any resignation to be treated as based on “Good Reason” under the Retention Agreement, the following must occur:

(x) the NEO must provide written notice to the Company of the existence of the Good Reason condition within a period not to exceed thirty (30) days of the initial existence of the condition;

(x) the NEO must provide written notice to the Company of the existence of the Good Reason condition within a period not to exceed 30 days of the initial existence of the condition;

(y) the Company shall have not less than thirty (30) days following its receipt of such during which it may remedy the condition;

and (z) the NEO’s termination of employment must occur within the ninety (90)-day period after the initial existence of the condition specified in such notice.

and (z) the NEO’s termination of employment must occur within the 90 day period after the initial existence of the condition specified in such notice.

Further, no act or omission shall be “Good Reason” if the NEO has consented in writing to such act or omission.

“Disability” as defined under the LTIP means, as determined by the Compensation Committee in its discretion exercised in good faith, a physical or mental condition of the NEO that would entitle him or her to payment of disability income payments under the Company’s or the Partnership’s or one of its subsidiaries’ long-term disability insurance policy or plan for employees as then in effect;

or in the event that an NEO is not covered, for whatever reason, under the Company’s or the Partnership’s or one of its subsidiaries’ long-term disability insurance policy or plan for employees or the Company’s or the Partnership’s or one of its subsidiaries’ does not maintain such a long-term disability insurance policy, “Disability” means a total and permanent disability within the meaning of Section 22(e)(3) of the Code;

provided, however, that if a Disability constitutes a payment event with respect to any Award which provides for the deferral of compensation and is subject to Section 409A of the Code, then, to the extent required to comply with Section 409A of the Code, the NEO must also be considered “disabled” within the meaning of Section 409A(a)(2)(C) of the Code.

A determination of Disability may be made by a physician selected or approved by the Compensation Committee and, in this respect, NEOs shall submit to an examination by such physician upon request by the Compensation Committee.

Employment Agreements

As previously noted, each of Messrs.

Smith and Kimble is party to an Employment Agreement providing for certain payments and benefits upon certain terminations of employment.

Porter and Kimble is party to an Employment Agreement providing for certain payments and benefits upon certain terminations of employment.

For the purposes of the following description, the “Company” means USAC Management with respect to Messrs.

Smith and Kimble.

All capitalized terms used in the following description but not defined therein shall have the definitions set forth in the referenced document.

The Employment Agreements provide for the following in the event of a termination of the NEO without Cause or by the NEO with Good Reason:

(i) semi-monthly severance payments for the one year period following the NEO’s Separation from Service in an amount totaling the higher of the NEO’s Base Salary for (a) the current year and (b) the previous year (the “Severance Payment”);

(ii) the entire amount of any earned Annual Bonus for the year preceding the year in which the NEO is terminated by the Company for convenience or resigns for Good Reason;

Porter and Kimble.

All capitalized terms used in the following description but not defined therein will have the definitions set forth in the referenced document.

The Employment Agreements provide for the following in the event of a termination of the NEO without Cause or by the NEO with Good Reason (each as defined in the Employment Agreements and set forth below):

(i) semi-monthly severance payments for the one year period following the NEO’s Separation from Service (the “Severance Period”) in an amount totaling the higher of the NEO’s Base Salary for (a) the current year and (b) any previous year during the term of the Employment

Agreement (the “Severance Payment”);

(ii) the entire amount of any earned Annual Bonus for the year preceding the year in which the NEO is terminated by the Company for “convenience” (as defined in the Employment Agreements and set forth below) or resigns for Good Reason;

(iii) a pro rata portion (based on the number of days the NEO was employed during the year) of any earned Annual Bonus for the year in which the NEO is terminated without Cause or resigns for Good Reason;

(iv) continued health insurance benefits for the NEO and his eligible dependents for a period of 24 months, as follows:

(a) for the first 12 months of the Coverage Period, the Company will provide such health insurance coverage at its own

expense (other than the NEO’s monthly cost-sharing contribution under the Company’s group health plan, as in effect at the time of the NEO’s Separation from Service);

(iv) continued health insurance benefits for the NEO and his eligible dependents for a period of 24 months following his Separation from Service (the “Coverage Period”), as follows:

(a) for the first 12 months of the Coverage Period, the Company will provide such health insurance coverage at its own expense (other than the NEO’s monthly cost-sharing contribution under the Company’s group health plan, as in effect at the time of the NEO’s Separation from Service);

(b) for the following six months of the Coverage Period, such health insurance coverage will be at the NEO’s sole expense;

2 unchanged sentences

and (v) within 30 days of the NEO’s Separation from Service, all earned but unpaid base salary and paid time off.

The NEO’s right to the Severance Payment and continued health insurance benefits described in (i) and (iv) of the preceding sentence are subject to (1) the NEO’s execution of a release of claims against the Company within 45 days of such NEO’s Separation from Service and (2) the NEO’s compliance with the continuing obligations under his Employment Agreement, including confidentiality, non-compete and non-solicit obligations.

In the event of the termination of Mr.

Smith’s or Mr.

Kimble’s employment by the Company without Cause or by the NEO with Good Reason within two years of a “change in control event” within the meaning of Treasury Regulation 1.409A-3(i)(5), the Severance Payment will be paid in a lump sum on the Company’s first regular payroll date that occurs on or before 30 days after the date of the NEO’s Separation from Service.

Porter’s or Mr.

Kimble’s employment by the Company without Cause or by the NEO with Good Reason within two years of a “change in control event” within the meaning of Treasury Regulation 1.409A-3(i)(5), the Severance Payment will be paid in a lump sum on the Company’s first regular payroll date that occurs on or after 30 days after the date of the NEO’s Separation from Service.

In the event of a termination of Mr.

Smith’s or Mr.

Porter’s or Mr.

Kimble’s employment due to death or Disability (as defined in the Employment Agreements), the Company shall pay the following to the NEO or the NEO’s estate:

(i) the Severance Payment and (ii) the entire amount of any earned but unpaid Annual Bonus for the year preceding the year in which the NEO dies or becomes Disabled;

(iii) a pro rata portion (based on the number of days employed during the year) of any earned Annual Bonus for the year in which the NEO dies or becomes Disabled;

and (iv) all earned but unpaid base salary and paid time off.

(i) the entire amount of any earned Annual Bonus for the year preceding the year in which the NEO dies or becomes Disabled;

(ii) a pro rata portion (based on the number of days employed during the year) of any earned Annual Bonus for the year in which the NEO dies or becomes Disabled;

and (iii) all earned but unpaid base salary and paid time off.

In the event of the NEO’s death during the Severance Period, the Severance Payment will be paid in a lump sum within 30 days of his death.

As used in the Employment Agreements, a termination for “convenience” means an involuntary termination for any reason, including a failure to renew the employment agreement at the end of an initial term or any renewal term, other than a termination for “Cause.” “Cause” is defined in the Employment Agreements to mean (i) any material breach of the Employment Agreement, including the material breach of any representation, warranty or covenant made under the Employment Agreement by the NEO, (ii) the NEO’s breach of any applicable duties of loyalty to the Company or any of its affiliates, gross negligence or misconduct, or a significant act or acts of personal dishonesty or deceit, taken by the NEO, in the performance of the duties and services required of the NEO that is demonstrably and significantly injurious to the Company or any of its affiliates, (iii) conviction of a felony or crime involving moral turpitude, (iv) the NEO’s willful and continued failure or refusal to perform substantially the NEO’s material obligations pursuant to the Employment Agreement or follow any lawful and reasonable directive from the CEO or the Board, other than as a result of the NEO’s incapacity, or (v) a violation of federal, state or local law or regulation applicable to the business of the Company that is demonstrably and significantly injurious to the Company.

As used in the Employment Agreements, a termination for “convenience” generally means an involuntary termination for any reason, including, under certain circumstances, a failure to renew the employment agreement at the end of an initial term or any renewal term, other than a termination for “Cause.” “Cause” is defined in the Employment Agreements to mean (i) any material breach of the Employment Agreement, including the material breach of any representation, warranty or covenant made under the Employment Agreement by the NEO, (ii) the NEO’s breach of any applicable duties of loyalty to the Company or any of its affiliates, gross negligence or material misconduct, or a significant act or acts of personal dishonesty or deceit, taken by the NEO, in the performance of the duties and services required of the NEO that is demonstrably and significantly injurious to the Company or any of its affiliates, (iii) conviction of a felony or crime involving moral turpitude, (iv) the NEO’s willful and continued failure or refusal to perform substantially the NEO’s material obligations pursuant to the Employment Agreement or follow any lawful and reasonable directive from the CEO or the Board, as applicable, other than as a result of the NEO’s incapacity, or (v) a violation of federal, state or local law or regulation applicable to the business of the Company that is demonstrably and significantly injurious to the Company.

“Good Reason” is defined in Employment Agreements to mean (i) a material breach by the Company of the Employment Agreement or any other material agreement with the NEO, (ii) a material reduction in the NEO’s base salary, other than a reduction that is generally applicable to all similarly situated employees of the Company, (iii) a material reduction in the NEO’s duties, authority, responsibilities, job title or reporting relationships, (iv) a material reduction by the Company in the facilities or perquisites available to the NEO, other than a reduction that is generally applicable to all similarly situated employees, or (v) the relocation of the geographic location of the NEO’s current principal place of employment by more than 50 miles from the location of the NEO’s principal place of employment as of the effective date of the Employment Agreement.

“Disability” is defined in the Employment Agreements as the NEO being unable to perform essential functions of his position, with reasonable accommodation, due to an illness or physical or mental impairment or other incapacity which continues for a period in excess of 20 consecutive weeks.

The determination of Disability will be made by a physician selected by the NEO and acceptable to the Company or its insurers.

Change in Control Benefits – LTIP

On November 1, 2018, the Board adopted the Phantom Unit Agreement, which (i) provides for incremental vesting of Phantom Units over five years (60% on the third December 5 following the grant and 40% on the fifth December 5 following the grant) and (ii) provides for vesting of 100% of the outstanding, unvested Phantom Units in the event of (a) a Change in Control (as defined under the LTIP and set forth below) or (b) the death or Disability of the NEO.

Also, under the Phantom Unit Agreement, if the NEO is at least 65 at the time of his voluntary retirement, 60% of his then-unvested Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

If the NEO is over age 68 at the time of his retirement, 50% of his then-unvested Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

On November 1, 2018, the Compensation Committee adopted the Phantom Unit Agreement, which (i) provides for incremental vesting of Phantom Units over five years (60% on the third December 5 following the grant and 40% on the fifth December 5 following the grant) and (ii) provides for vesting of 100% of the outstanding, unvested Phantom Units in the event

of (a) a Change in Control (as defined under the LTIP and set forth below) or (b) the death or Disability of the NEO.

Also, under the Phantom Unit Agreement, if the NEO has been employed by the Company, the Partnership or their Affiliates for at least 10 years and is at least 65 at the time of his voluntary retirement, 60% of his then-unvested Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

If the NEO has been employed by the Company, the Partnership or their Affiliates for at least 10 years and is over age 68 at the time of his voluntary retirement, 50% of his then-unvested Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

Prior to November 1, 2018, we had historically included double-trigger change in control provisions for our outstanding LTIP awards, such that in order for accelerated vesting of Phantom Units to occur in connection with a change in control, such change in control must be followed by a termination of employment by the Company without Cause or by the NEO with Good Reason (each as defined in the applicable Phantom Unit award agreement).

1 unchanged sentence

However, because the agreements contained the double-trigger vesting provisions described below, and the Transactions were deemed to satisfy the first trigger of a change in control transaction, a termination by the Company without Cause or by the NEO for Good Reason following the Transactions would result in the acceleration of the Phantom Units granted prior to the Transactions.

For purposes of this description, the “Company” means USA Compression GP, LLC.

A “Change in Control” is defined under the LTIP as follows:

10 unchanged sentences

However, if an LTIP award is subject to section 409A of the Internal Revenue Code, a “Change in Control” will be defined in accordance with section 409A of the Internal Revenue Code and the regulations promulgated thereunder.

Potential Payments upon Termination or Change in Control

1 unchanged sentence

The amounts actually payable to any NEO can only be calculated with certainty upon actual termination or a Change in Control.

The value of the acceleration of the LTIP awards was calculated using the value of $18.14, which was the closing price of the Partnership’s common units on December 31, 2019.

Except as otherwise noted, the value of the acceleration of the LTIP awards was calculated using the value of $13.60, which was the closing price of the Partnership’s common units on December 31, 2020.

Executive Benefits and

Change in Control followed by termination without “Cause” or for

Payments Change in Control followed by termination without “Cause” or for

“Good Reason”

5 unchanged sentences

“Good Reason”

($) (5) Continued

Employment Following Change of Control

President and Chief Executive Officer

Salary — — — — —

Bonus — — — — —

Accelerated Vesting of Phantom Units (8) 7,581,320 — 7,581,320 — 7,581,320

1 unchanged sentence

Severance Payment under Retention Agreements (10) 361,169 361,169 — — —

9,734,479 2,153,159 9,373,310 — 9,373,310

Vice President, Chief Financial Officer and Treasurer

Salary — — — — —

Bonus — — — — —

Accelerated Vesting of Phantom Units (8) 3,096,462 156,645 2,939,817 — 2,939,817

1 unchanged sentence

Severance Payment under Retention Agreements (10) 172,416 172,416 — — —

4,097,268 1,157,451 3,768,207 — 3,768,207

Vice President and Chief Operating Officer

Salary — — — — —

Bonus — — — — —

Accelerated Vesting of Phantom Units (8) 1,314,154 30,328 1,283,826 — 1,283,826

Accelerated Vesting of Retention Units (8)

Severance Payment under Retention Agreements (9)

1,314,154 30,328 1,283,826 — 1,283,826

Christopher W.

Vice President, General Counsel and Secretary

337,307 337,307 22,307 22,307 —

Bonus (2) 482,200 482,200 482,200 — —

Accelerated Vesting of Phantom Units (8) 1,480,197 39,059 1,441,138 — 1,441,138

Health and Welfare Plan Benefits (7) 20,673 20,673 — — —

2,320,377 879,239 1,945,645 22,307 1,441,138

Vice President, Human Resources

331,384 331,384 14,484 14,484 —

Bonus (2) 498,991 498,991 498,991 — —

Accelerated Vesting of Phantom Units (8) 1,707,222 108,895 1,598,326 — 1,598,326

1 unchanged sentence

2,558,270 959,943 2,111,801 14,484 1,598,326

Former Vice President and Chief Operating Officer

Salary — — — — —

Bonus — — — — —

Accelerated Vesting of Phantom Units — — — — —

Accelerated Vesting of Retention Units — — — — —

Severance Payment under Retention Agreements — — — — —

________________________

(1) The listed salary for each of Messrs.

Smith and Kimble represents his annualized rate of pay as of December 31, 2019, plus, with respect to the first three columns of the table, his accrued but unused paid time off as of December 31, 2019.

Porter and Kimble represents his accrued but unused paid time off as of December 31, 2020 plus, with respect to the first two columns, his base salary as of December 31, 2020.

Any accrued but unused paid time off owed to Mr.

Porter or Mr.

Kimble would be paid within 30 days of the date of his termination of employment, and the base salary would be paid out as set forth in footnote (3).

(2) The listed bonus amount for each of Messrs.

Smith and Kimble is his bonus awarded with respect to the year ended December 31, 2019.

Because the assumed termination date for each NEO is December 31, 2019, no pro rata bonus amounts based on a partial year of continued employment prior to termination are included.

The amount shown for each of Messrs.

Long, Liuzzi and Manias represents the amount of earned but unpaid base salary he would be entitled to receive.

Kimble and Porter is his pro rata bonus awarded with respect to the year ended December 31, 2020 and his bonus awarded with respect to the year ended December 31, 2019.

(3) The Employment Agreements for each of Messrs.

Smith and Kimble provide that upon termination by the Company without Cause or by the NEO for Good Reason, the NEO is entitled to receive one times his base salary, payable in equal semimonthly installments over the course of one year (or, if such termination occurs within two years after a “change in control event” within the meaning of Treasury Regulation 1.409A-3(i)(5), in a lump sum within 30 days of termination of employment).

Upon the death or Disability of Mr.

Kimble or Mr.

Smith during the Severance Period (as defined in the Employment Agreements), his salary payment will be accelerated and he (or his estate) will be entitled to the same bonus payment as if the death or Disability had not occurred.

Porter and Kimble provide that upon termination by the Company without Cause or by the NEO for Good Reason, the NEO is entitled to receive one times his base salary, payable in equal semi-monthly installments over the course of one year.

Upon the death of Mr.

Porter or Mr.

Kimble during this one year period, his salary payment will be accelerated and all remaining Severance Payments (as defined in the Employment Agreements) would be paid in a lump sum within 30 days of his death.

If such termination occurs within two years after a “change in control event” within the meaning of Treasury Regulation 1.409A-3(i)(5), the Severance Payment will be made in a lump sum on the first regular payroll date that occurs on or after 30 days of the NEO’s termination date.

(4) Upon the death or Disability (as defined in the Employment Agreements) of Mr.

Porter or Mr.

Kimble, he (or his estate) will be entitled to the same bonus payment as if the death or Disability had not occurred.

(5) In the event of the termination of employment by any of the NEOs without Good Reason, the NEO will be entitled to all earned but unpaid annual base salary.

None of the NEOs had earned but unpaid annual base salary as of December 31, 2020.

(6) The NEOs are not entitled to a certain level of compensation in the event of continued employment following a Change in Control, but for purposes of this table it is assumed that the NEO would continue to receive a level of base salary, bonus, benefits and other compensation in the event of continued employment following a Change in Control that is the same as, or similar to, the amounts shown in the Summary Compensation Table.

1 unchanged sentence

(7) In the event of Mr.

Smith’s or Mr.

Kimble’s termination by the Company without Cause or by the NEO with Good Reason, he and his eligible dependents will be entitled to continued health insurance benefits for a period of 24 months following his Separation from Service (the “Coverage Period”), as follows:

(i) for the first twelve months of the Coverage Period, the Company will provide such health insurance coverage at its own expense (other than the NEO’s monthly cost-sharing contribution under the Company’s group health plan, as in effect at the time of the NEO’s Separation from Service) (ii) for the following six months of the Coverage Period, such health insurance coverage will be at the NEO’s sole expense;

and (iii) for the final six months of the Coverage Period, the Company will be responsible for the proportion of the cost of such health insurance coverage that the NEO covered in the first 12 months of the Coverage Period;

Porter’s or Mr.

Kimble’s termination by the Company without Cause or by the NEO with Good Reason, he and his eligible dependents will be entitled to continued health insurance benefits for the Coverage Period, as follows:

(b) for the following six months of the Coverage Period, such health insurance coverage will be at the NEO’s sole expense;

and (c) for the final six months of the Coverage Period, the Company will be responsible for the proportion of the cost of such health insurance coverage that the NEO covered in the first 12 months of the Coverage Period;

and the NEO will be responsible for the proportion that the Company covered during the first 12 months of the Coverage Period.

The amount shown represents the Company’s contribution to the NEO’s health insurance benefits during the first half of the Coverage Period.

Long, Liuzzi and Manias are not currently party to any contractual arrangements providing for continued health insurance coverage by the Company following a termination of employment.

Long, Liuzzi and Scheller are not currently party to any contractual arrangements providing for continued health insurance coverage by the Company following a termination of employment.

(8) In the event of the NEO’s cessation of service for any reason (other than death or Disability), 100% of the NEO’s Phantom Units that have not vested prior to or in connection with such cessation of service shall be automatically forfeited.

Notwithstanding the foregoing, with respect to the Phantom Units granted on December 5, 2018 and on December 5, 2019, if the NEO retires after attaining the age of 65, 60% of his then-unvested Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

For the Phantom Units granted on December 5, 2018 and on December 5, 2019, if the NEO is over age 68 at the time of retirement, 50% of his then-unvested Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

For the Phantom Units granted on December 5, 2018 and on December 5, 2019, in the event of the death or Disability of the NEO, 100% of the then-unvested Phantom Units shall vest in full immediately prior to such cessation of service due to death or Disability.

In the event of a Change in Control (as defined under the LTIP), 100% of the NEO’s outstanding, unvested Phantom Units granted on December 5, 2018 and on December 5, 2019 would vest.

As noted above, the Phantom Units granted prior to the Transactions contained a double-trigger change in control provision, and the Transactions satisfied the first trigger, therefore they could become vested upon a termination by the Company without Cause or by the NEO without Good Reason that occurred on December 31, 2019.

Notwithstanding the foregoing, with respect to the Phantom Units granted on December 5, 2018, December 5, 2019 and December 5, 2020 (collectively, the “December LTIP Phantom Units”), if the NEO retires after attaining the age of 65, 60% of his then-unvested December LTIP Phantom Units will be forfeited, and the remainder will vest, at the time of retirement and, if the NEO is over age 68 at the time of retirement, 50% of his then-unvested December LTIP Phantom Units will be forfeited, and the remainder will vest, at the time of retirement.

In the event of the death or Disability (as defined under the LTIP) of the NEO, 100% of the then-unvested December LTIP Phantom Units shall vest in full immediately prior to such NEO’s cessation of service due to death or Disability.

In the event of a Change in Control (as defined under the LTIP), 100% of the NEO’s outstanding, unvested December LTIP Phantom Units would vest.

As noted above, the Phantom Units granted prior to the Transactions contained a double-trigger change in control provision, and the Transactions satisfied the first trigger,

therefore they could become vested upon a termination by the Company without Cause or by the NEO without Good Reason that occurred on December 31, 2020.

(9) The Retention Agreements for Messrs.

Long, Liuzzi and Manias provide that 100% of the outstanding, unvested Retention Units held by the applicable NEO will vest immediately prior to the NEO’s Separation from Service for the following reasons:

Long and Liuzzi provide that 100% of the outstanding, unvested Retention Units held by the applicable NEO will vest immediately prior to the NEO’s Separation from Service for the following reasons:

(i) termination of the NEO by the Company without Cause or by the NEO with Good Reason, (ii) upon a Change in Control, and (iii) upon the death or Disability of the NEO.

Long terminates his employment due to retirement, if he is at the time of retirement 65 years of age or older, 40% of his then-unvested Retention Units will vest and the remaining 60% of his then-unvested Retention Units will be forfeited.

Long, Liuzzi and Manias, provided that the NEO executes and does not revoke a general release and waiver of claims, the NEO will be entitled to a severance payment intended to capture the value of future distributions associated with Retention Units forfeited for tax withholding purposes.

Long terminates his employment due to retirement and he is at the time of retirement 65 years of age or older, 40% of his then-unvested Retention Units will vest and the remaining 60% of his then-unvested Retention Units will be forfeited.

(10) For Messrs.

Long and Liuzzi, provided that the NEO executes and does not revoke a general release and waiver of claims, the NEO will be entitled to a severance payment intended to capture the value of future distributions associated with Retention Units forfeited for tax withholding purposes, which payment would be paid within 60 days of the NEO’s date of separation.

Manias left the Partnership effective June 1, 2020.

In recognition of his service and contributions to us, we paid Mr.

Manias a separation payment of $1,340,997, as approved by our Compensation Committee.

Under the terms of Mr.

Manias’s Retention Agreement dated November 1, 2018, in connection with his departure (i) Mr.

Manias received a $165,375 release payment and (ii) all 45,000 unvested Phantom Units granted to Mr.

Manias under that agreement vested.

Additionally, pursuant to the terms of Mr.

Manias’s Phantom Unit Agreement dated February 12, 2018, the 14,626 unvested Phantom Units granted to Mr.

Manias pursuant to that agreement vested in connection with his departure.

These Phantom Units had a value of $585,000 and $190,138, respectively, on the date they vested.

In connection with Mr.

Manias’s departure and receipt of the payments and Phantom Units described in this footnote, Mr.

Manias executed a Full Release and Waiver of Claims in our favor, pursuant to which he released all claims against us and acknowledged his continuing obligations under his Retention Agreement dated November 1, 2018 and his Phantom Unit Agreement dated February 12, 2018, including the non-solicitation and non-disparagement provisions therein.

Manias also received $10,389 of earned but unpaid base salary as of June 1, 2020, the date of his departure, bringing the total amount received by Mr.

Manias pursuant to his departure to $2,291,899.

CEO Pay Ratio

8 unchanged sentences

Long to the median of the annual total compensation of all employees was reasonably estimated to be 49.3 to 1.

To identity the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps:

We determined that, as of December 31, 2019, our employee population consisted of approximately 879 individuals with all of these individuals located in the United States (as reported in Part I, Item 1 “Business”, above).

This population consisted of our full-time, as we do not have any part-time, temporary employees, or seasonal workers.

To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps:

• We determined that, as of December 31, 2020, our employee population consisted of approximately 742 individuals with all of these individuals located in the U.S.

This population consisted of our full-time employees, as we do not have any part-time employees, temporary employees, or seasonal workers.

• We selected December 31, 2020 as our identification date for determining our median employee because it enabled us to make such identification in a reasonably efficient and economic manner.

1 unchanged sentence

• We identified our median employee by consistently applying this compensation measure to all of our employees included in our analysis.

Since all of our employees, including our CEO, are located in the United States, we did not make any cost of living adjustments in identifying the median employee.

Since all of our employees, including our CEO, are located in the U.S., we did not make any cost of living adjustments in identifying the median employee.

• After we identified our median employee, we combined all of the elements of such employee’s compensation for the 2020 year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $104,631.

The difference between such employee’s total W-2 earnings and the employee’s annual total compensation represents the estimated value of the employee’s net health care benefits (estimated at $4,115 per employee), the employer’s 401(k) matching contribution (estimated at $5,194 per employee) and the employee’s 401(k) contribution (estimated at $18,698 per employee).

• With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2020 Summary Compensation Table included in this Form 10-K.

1 unchanged sentence

For the year ended December 31, 2020, our CEO was the only NEO who also served as a director, and he did not receive additional compensation for his service on the Board.

Eric Long’s compensation as an NEO is reflected in the Summary Compensation Table above.

Long’s compensation as an NEO is reflected in the Summary Compensation Table above.

Officers, employees or paid consultants or advisors of us or the General Partner or its affiliates who also serve as directors do not receive additional compensation for their service as directors.

3 unchanged sentences

The following table shows the total fees earned and other compensation paid in cash to each independent director during 2020.

($) Unit Awards

($) (1) All Other

($) (2) Total

Hartman (3) — — — —

Joyce 130,000 99,985 45,851 275,836

Waldheim 132,500 99,985 45,851 278,336

________________________

1 unchanged sentence

For a detailed discussion of the assumptions utilized in coming to these values, please see Note 15 in Part II, Item 8 “Financial Statements and Supplementary Data”.

As of December

31, 2019, the independent members of the Board who receive equity awards held the following number of outstanding equity awards under the LTIP:

As of December 31, 2020, the independent members of the Board who receive equity awards held the following number of outstanding equity awards under the LTIP:

16,617 Phantom Units;

5 unchanged sentences

Joyce and Waldheim, the amount shown includes DERs paid with respect to the Partnership’s quarterly distribution on its common units with respect to each quarter in the 2020 year.

Hartman was appointed to the Board pursuant to that certain Board Representation Agreement entered to among us, the General Partner, ETE and EIG on the Transactions Date in connection with our private placement to EIG of Preferred Units and Warrants.

Hartman was appointed to the Board pursuant to that certain Board Representation Agreement entered to among us, the General Partner, ET LP and EIG on the Transactions Date in connection with our private placement to EIG of Preferred Units and Warrants.

Hartman does not receive compensation for his service on the Board.

1 unchanged sentence

(i) an annual cash retainer of $100,000;

(ii) a cash retainer for acting as Chairman of a standing committee;

(iii) an annual cash retainer for acting as the Chairman of the Audit Committee and for acting as Chairman of the Compensation Committee;

(iv) an annual cash retainer for membership on a standing committee;

(ii) an annual cash retainer for acting as the Chairman of the Audit Committee and for acting as Chairman of the Compensation Committee;

(iii) an annual cash retainer for membership on the Audit Committee or Compensation Committee;

(iv) an undetermined fixed sum for membership on a special or conflicts committee;

(v) an annual equity grant with a value of $100,000;

and (vi) a one-time director onboarding equity of 2,500 Phantom Units.

The Phantom Units granted pursuant to the Director Compensation Policy vest incrementally over five years and all outstanding, unvested Phantom Units vest in full in the event of the director’s death, Disability or upon a Change in Control.

and (vi) a one-time director onboarding equity award of 2,500 Phantom Units.

The Director Compensation Policy does not provide for per meeting attendance fees.

The following chart summarizes the Director Compensation Policy.

Compensation Element

Director Compensation Detail

Compensation Element Director Compensation Detail

Annual Cash Retainer $100,000

Committee Chair Cash Retainer

Audit Committee:

Committee Chair Cash Retainer Audit Committee:

Compensation Committee:

Committee Membership Retainer (if not Committee Chair)

Audit Committee:

Committee Membership Retainer (if not Committee Chair) Audit Committee:

Compensation Committee:

Initial Phantom Unit Award

2,500 Phantom Units

Annual Phantom Unit Award

$100,000 value

DERs on Unvested Phantom Units

Yes (paid on a current basis)

Phantom Unit Vesting Schedule

60% vest on third December 5 following grant

Initial Phantom Unit Award 2,500 Phantom Units

Annual Phantom Unit Award $100,000 value

DERs on Unvested Phantom Units Yes (paid on a current basis)

Phantom Unit Vesting Schedule 60% vest on third December 5 following grant

40% vest on fifth December 5 following grant

Change-in-Control

Unvested phantom units vest in full

Cessation of Service due to Death or Disability

Unvested phantom units vest in full

Attendance Fee Per Meeting

Reimbursement of Out-of-Pocket Expenses

Indemnification

Yes, to fullest extent permitted under Delaware law

Change-in-Control Unvested Phantom Units vest in full

Cessation of Service due to Death or Disability Unvested Phantom Units vest in full

Attendance Fee Per Meeting None

Reimbursement of Out-of-Pocket Expenses Yes

Indemnification Yes, to fullest extent permitted under Delaware law

Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters

2 unchanged sentences

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth the beneficial ownership of the Partnership’s common units and Series A Preferred Units as of February 13, 2020 held by:

The following table sets forth the beneficial ownership of the Partnership’s common units and Preferred Units as of February 11, 2021 held by:

• each person who beneficially owns 5% or more of the Partnership’s outstanding common units;

1 unchanged sentence

• each NEO of the General Partner;

all directors and NEOs of the General Partner as a group.

• all directors and executive officers of the General Partner as a group.

As of February 11, 2021, there were 96,996,304 common units outstanding.

Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all common units shown as beneficially owned by them and their address is 111 Congress Avenue, Suite 2400, Austin, Texas 78701.

Name of Beneficial Owner

Beneficially Owned

Percentage of

Any fractional common units are rounded down to the nearest whole number.

The table also presents information with respect to ET LP’s common units beneficially owned as of February 11, 2021, by each current director and named executive officer of the General Partner and by all directors and executive officers of the General Partner as a group.

As of February 11, 2021, ET LP had 2,702,436,307 common units outstanding.

Any fractional common units are rounded down to the nearest whole number.

USA Compression Partners, LP Energy Transfer LP

Name of Beneficial Owner Common Units

Beneficially Owned Percentage of

Common Units Common Units

Beneficially Owned Percentage of

Energy Transfer Operating, L.P.

(1) (2) 46,056,228 47.48 % — *

(3) 18,181,762 18.74 % — *

EIG Veteran Equity Aggregator, L.P.

(4) 19,626,959 16.83 % — *

Long (5) 529,327 * 22,144 *

Liuzzi (6) 237,500 * — *

Scheller (7) 39,169 * — *

Christopher W.

Porter (8) 20,051 * — *

Kimble (9) 91,186 * 500 *

Manias 246,772 * — *

Christopher R.

Curia — * 258,424 *

Hartman — * — *

Joyce 5,217 * 2,000 *

Long — * 395,231 *

Mason — * 598,760 *

Ramsey — * 428,745 *

Waldheim 5,217 * — *

Whitehurst (10) — * 280,680 *

All directors and officers as a group (14 persons) (11) 1,174,439 1.21 % 1,986,484 *

2 unchanged sentences

(1) Energy Transfer Operating, L.P.

has sole voting and dispositive power over 46,056,228 common units based on a Schedule 13D/A filed on August 5, 2019 with the SEC.

The principal business address of Energy Transfer Operating, L.P.

is 8111 Westchester Drive, Suite 600, Dallas, Texas 75225.

has shared voting and dispositive power over 46,056,228 common units based on a Schedule 13D/A filed on August 5, 2019 with the SEC.

The Schedule 13D/A was filed jointly by Energy Transfer LP, LE GP, LLC, Kelcy L.

Warren, USA Compression GP, LLC, Energy Transfer Partners, L.L.C., Energy Transfer Partners GP, L.P.

and Energy Transfer Operating, L.P.

(collectively, the “ET Reporting Companies”).

The principal business address of each of the ET Reporting Companies, other than USA Compression GP, LLC, is 8111 Westchester Drive, Suite 600, Dallas, Texas 75225.

The principal business address of USA Compression GP, LLC is 111 Congress Avenue, Suite 2400, Austin, Texas 78701.

(2) Includes 8,000,000 common units held by USA Compression GP, LLC.

has the shared power to dispose or to direct the disposition of 18,649,774 common units based on Schedule 13G/A filed on February 7, 2020 with the SEC.

Pursuant to the provisions of the Partnership Agreement providing that the holder of 20% or more of any class of the Partnership’s securities may not, subject to certain exceptions, vote any of those securities, Invesco Ltd.

does not have the shared power to vote or direct the vote with respect to any of the common units it owns.

(3) Invesco Ltd.

has the sole power to dispose or to direct the disposition of 18,181,762 common units based on a Schedule 13G/A filed on February 12, 2021 with the SEC.

Invesco Ltd., in its capacity as a parent holding company to its investment advisers, may be deemed to beneficially own these 18,181,762 common units which are held of record by clients of Invesco Ltd.

The principal business address of Invesco Ltd.

3 unchanged sentences

The Warrants became exercisable on April 2, 2019 and will expire on April 2, 2028.

Upon exercise of the Warrants in full and assuming the Partnership does not elect to settle the Warrants in common units on a net basis, EIG would have sole voting and dispositive power over 12,619,921 common units of the Partnership based on the Schedule 13D filed on February 4, 2019 with the SEC.

EIG owns 420,664 Preferred Units, 140,221 of which will be convertible within 60 days into 7,007,038 common units at the election of the holder.

At the option of the holder of Preferred Units, (i) from and after April 2, 2021, 33 1/3% of the Preferred Units are convertible into common units, (ii) from and after April 2, 2022, 66 2/3% of the Preferred Units are convertible into common units and (iii) from and after April 2, 2023, all of the Preferred Units are convertible into common units.

Upon (1) exercise of the Warrants in full and assuming the Partnership does not elect to settle the Warrants in common units on a net basis, and (2) conversion of all 140,221 Preferred Units, EIG would have sole voting and dispositive power over 19,626,959 common units of the Partnership based on the Schedule 13D/A filed on February 1, 2021 with the SEC and our records.

The principal business address of EIG Veteran Equity Aggregator, L.P.

is 333 Clay Street, Suite 3500, Houston, Texas 77002.

Includes 414,926 common units held directly by Mr.

Long, 17,592 common units held by Aladdin Partners, L.P., a limited partnership affiliated with Mr.

Long, 55,248 common units held by certain trusts of which Mr.

Long is the trustee and 2,174 common units held by Mr.

Long’s spouse.

Long disclaims any beneficial ownership of the units held by Mr.

Long’s spouse, except to the extent of his pecuniary interest therein.

is 1700 Pennsylvania Ave NW, STE.

800, Washington, DC 20006.

(5) Includes 455,371 of our common units held directly by Mr.

Long, 17,592 of our common units held by Aladdin Partners, L.P., a limited partnership affiliated with Mr.

Long and, 56,364 of our common units held by certain trusts of which Mr.

Long is the trustee.

The ET LP common units reported as owned by Mr.

Long include 12,000 common units held directly by Mr.

Long, 4,000 common units held by Aladdin Partners, L.P., and 6,144 common units held by certain trusts of which Mr.

Long is the trustee.

(6) Includes 11,518 common units that Mr.

Liuzzi has the right to acquire within 60 days upon the vesting and/or settlement of his Phantom Units and Retention Units, subject to Compensation Committee discretion.

Liuzzi has the right to acquire within 60 days upon the vesting and/or settlement of his Phantom Units, subject to Compensation Committee discretion.

(7) Includes 2,230 common units that Mr.

Manias has the right to acquire within 60 days upon the vesting and/or settlement of his Phantom Units and Retention Units, subject to Compensation Committee discretion.

Scheller has the right to acquire within 60 days upon the vesting and/or settlement of his Phantom Units, subject to Compensation Committee discretion.

(8) Includes 2,872 common units that Mr.

Smith has the right to acquire within 60 days upon the vesting and/or settlement of his Phantom Units, subject to Compensation Committee discretion.

Porter has the right to acquire within 60 days upon the vesting and/or settlement of his Phantom Units, subject to Compensation Committee discretion.

(9) Includes 8,007 common units that Mr.

Kimble has the right to acquire within 60 days upon the vesting and/or settlement of his Phantom Units, subject to Compensation Committee discretion.

Includes 81,547 common units that certain of our directors and executive officers have the right to receive within 60 days upon the vesting and/or settlement of phantom units held by such directors and executive officers.

Whitehurst holds 186,898 of ET LP’s common units in a margin account.

(11) Includes 24,627 of our common units that certain of our directors and executive officers have the right to receive within 60 days upon the vesting and/or settlement of Phantom Units held by such directors and executive officers.

Securities Authorized for Issuance Under Equity Compensation Plans

6 unchanged sentences

The following table provides certain information with respect to the LTIP as of December 31, 2020:

Plan Category

Number of securities to

Plan Category Number of securities to

be issued upon exercise

of outstanding options,

warrants and rights

Weighted-average

warrants and rights Weighted-average

exercise price of

outstanding options,

warrants and rights

Number of securities

warrants and rights Number of securities

remaining available for

3 unchanged sentences

reflected in the first

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Equity compensation plans approved by security holders — N/A —

Equity compensation plans not approved by security holders 2,137,957 N/A 6,327,375 (1)

________________________

As of December 31, 2019, the number of common units that may be delivered pursuant to awards under the LTIP was 8,606,984 common units before giving effect to any outstanding awards.

Phantom units withheld to satisfy the exercise price or tax withholdings of an award and phantom units that are forfeited, cancelled, paid or otherwise terminate or expire without the actual delivery of common units will be available for delivery pursuant to other awards.

Currently, only phantom unit awards are outstanding under the LTIP.

Pursuant to the terms of the LTIP, each phantom unit is the economic equivalent of one common unit and, other than director phantom unit awards, may be settled in cash or common units at the discretion of the Board or a committee thereof.

(1) As of December 31, 2020, we had 8,465,332 common units available under the LTIP before giving effect to the outstanding awards of 2,137,957 Phantom Units.

Pursuant to the terms of the LTIP, other than director Phantom Unit awards, awards of Phantom Units may be settled in cash or common units at the discretion of the Board or a committee thereof.

Any Phantom Unit settled in cash will not result in the actual delivery of a common unit.

Additionally, Phantom Units withheld to satisfy the exercise price or tax withholdings of an award and Phantom Units that are forfeited, cancelled, or otherwise terminate or expire without the actual delivery of common units will be available for delivery pursuant to other awards.

For more information about the LTIP, please see Note 15 in Part II, Item 8 “Financial Statements and Supplementary Data”.

7 unchanged sentences

These expenses include, among other things, salary, bonus, cash incentive compensation and other amounts paid to persons who perform services for us or on our behalf and other expenses allocated by USAC Management to us.

USAC Management has substantial discretion to determine in good faith which expenses to incur on our behalf and what portion to allocate to us.

Management has substantial discretion to determine in good faith which expenses to incur on our behalf and what portion to allocate to us.

On November 3, 2017, the Services Agreement was amended to extend its term to December 31, 2022.

7 unchanged sentences

Transactions with Energy Transfer

We provide compression services to entities affiliated with Energy Transfer, which became a related party of ours on the Transactions Date as a result of the Transactions and its resultant ownership and control of the General Partner and ownership of approximately 48% of our limited partner interests as of December 31, 2019 (including the 8,000,000 common units owned by the General Partner and after giving effect to the conversion of the 6,397,965 Class B Units to common units that occurred in 2019).

We provide compression services to entities affiliated with Energy Transfer, which became a related party of ours on the Transactions Date as a result of the Transactions and its resultant ownership and control of the General Partner and ownership of approximately 47% of our limited partner interests as of December 31, 2020 (including the 8,000,000 common units owned by the General Partner).

We recognized $12.4 million in revenue from compression services from entities affiliated with Energy Transfer for the year ended December 31, 2020.

We may provide compression services to entities affiliated with Energy Transfer in the future, and any significant transactions will be disclosed.

The following table summarizes payments and accounts receivable and payable between us and Energy Transfer during 2019 .

The following table summarizes payments and receivables between us and Energy Transfer during 2020.

Transaction Explanation Amount/Value

2020 quarterly distributions on limited partner interests

Represents the aggregate amount of distributions made to Energy Transfer in respect of the Partnership’s common units during 2020.

Revenue for compression services

Represents the aggregate amount of revenue recognized for providing compression services to entities affiliated with Energy Transfer for the full year 2019.

Sales Tax Contingency

Receivable from ETO as of December 31, 2019 related to indemnification for sales tax contingencies incurred by the USA Compression Predecessor.

Accounts receivable

Receivables for compression services provided to entities affiliated with Energy Transfer as of December 31, 2019.

Accounts payable

Payables to entities affiliated with Energy Transfer as of December 31, 2019.

$ 96.7 million

Revenue for compression services Represents the aggregate amount of revenue recognized for providing compression services to entities affiliated with Energy Transfer for the full year 2020.

$ 12.4 million

Sales Tax Contingency Receivable from ETO as of December 31, 2020 related to indemnification for sales tax contingencies incurred by the USA Compression Predecessor.

$ 44.9 million

Accounts receivable Receivables for compression services provided to entities affiliated with Energy Transfer as of December 31, 2020.

$ 0.1 million

Conflicts of Interest

20 unchanged sentences

Principal Accountant Fees and Services

The following table sets forth fees paid for professional services rendered by Grant Thornton LLP (“Grant Thornton”), our independent registered public accounting firm since April 5, 2018, during the years ended December 31, 2019 and 2018 :

The following table sets forth fees paid for professional services rendered by Grant Thornton LLP (“Grant Thornton”) during the years ended December 31, 2020 and 2019 (in millions):

Year Ended December 31,

(in millions)

Audit fees (1) $ 1.0 $ 1.1

2 unchanged sentences

________________________

In connection with the Transactions, we appointed Grant Thornton as our independent registered public accounting firm on April 5, 2018, replacing KPMG LLP.

No fees were paid to KPMG LLP for professional services rendered related to fiscal year 2018.

(1) Expenditures classified as “Audit fees” above were billed to the Partnership and include the audits of our annual financial statements and internal control over financial reporting, reviews of our quarterly financial statements, and fees associated with comfort letters and consents related to securities offerings and registration statements.

3 unchanged sentences

Exhibits and Financial Statement Schedules

Documents filed as a part of this report.

(a) Documents filed as a part of this report.

Financial Statements .

3 unchanged sentences

The following documents are filed as exhibits to this report:

Exhibit Number Description

2.1 Contribution Agreement dated as of January 15, 2018, by and among USA Compression Partners, LP, Energy Transfer Partners, L.P., Energy Transfer Partners GP, L.P., ETC Compression, LLC and, solely for certain purposes therein, Energy Transfer Equity, L.P.

22 unchanged sentences

001-35779) filed on April 6, 2018)

Registration Rights Agreement, dated as of March 7, 2019, by and among USA Compression Partners, LP, USA Compression Finance Corp., the subsidiary guarantors named therein and J.P.

Morgan Securities LLC, as representative of the initial purchasers named therein (incorporated by reference to Exhibit 4.3 to the Partnership’s Current Report on Form 8-K (File No.

001-35779) filed on March 7, 2019)

4.8 Board Representation Agreement, dated as of April 2, 2018, by and among USA Compression Partners, LP, USA Compression GP, LLC, Energy Transfer Equity, L.P.

1 unchanged sentence

001-35779) filed on April 6, 2018)

Description of the USA Compression Partners, LP Common Units

4.9 Description of the USA Compression Partners, LP Common Units (incorporated by reference to Exhibit 4.10 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No.

001-35779) filed on February 18, 2020)

10.1 Sixth Amended and Restated Credit Agreement, dated as of April 2, 2018, by and among the Partnership, as borrower, USAC OpCo 2, LLC, USAC Leasing 2, LLC, USA Compression Partners, LLC, USAC Leasing, LLC, CDM Resource Management LLC and CDM Environmental & Technical Services LLC and USA Compression Finance Corp., the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as agent and an LC issuer, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Regions Capital Markets, a division of Regions Bank, RBC Capital Markets and Wells Fargo Bank, N.A., as joint lead arrangers and joint book runners, Barclays Bank PLC, Regions Bank, RBC Capital Markets and Wells Fargo Bank, N.A., as syndication agents, and MUFG Union Bank, N.A., SunTrust Bank and The Bank of Nova Scotia, as senior managing agents (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K (File No.

001-35779) filed on April 6, 2018)

10.2 Amendment No.

1 to Sixth Amended and Restated Credit Agreement, dated as of August 3, 2020, among USA Compression Partners LP, as borrower, each of the Guarantors and Lenders party thereto and JPMorgan Chase bank, N.A., as an LC Issuer and as the Agent (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K (File No.

001-35779) filed on August 3, 2020)

10.3† Long-Term Incentive Plan of USA Compression Partners, LP (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K (File No.

2 unchanged sentences

001-35779) filed on November 6, 2018)

Employment Agreement, dated December 23, 2010, between USA Compression Partners, LLC and David A.

Smith (incorporated by reference to Exhibit 10.8 to Amendment No.

4 of the Partnership’s registration statement on Form S-1 (Registration No.

333-174803) filed on February 13, 2012)

10.5† Employment Agreement, dated July 1, 2016, between USA Compression Management Services, LLC and Sean T.

1 unchanged sentence

001-35779) filed on February 19 , 2019)

10.6†* Employment Agreement, dated December 14, 2016, between USA Compression Management Services, LLC and Christopher W.

10.7 Services Agreement, dated effective January 1, 2013, by and among USA Compression Partners, LP, USA Compression GP, LLC and USA Compression Management Services, LLC (incorporated by reference to Exhibit 10.11 to Amendment No.

28 unchanged sentences

001-35779) filed on January 16, 2018)

Letter of KPMG LLP, dated April 9, 2018, regarding change in independent registered accounting firm (incorporated by reference to Exhibit 16.1 to the Partnership’s Current Report on Form 8-K/A (File No.

001-35779) filed on April 9, 2018)

21.1* List of subsidiaries of USA Compression Partners, LP

22.1* List of Subsidiary Guarantors and Co-Issuer

23.1* Consent of Grant Thornton LLP

6 unchanged sentences

101* Interactive data files pursuant to Rule 405 of Regulation S-T:

(i) our Consolidated Balance Sheets as of December 31, 2019 and December 31, 2018;

(i) our Consolidated Balance Sheets as of December 31, 2020 and 2019;

(ii) our Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018;

11 unchanged sentences

its General Partner

February 18, 2020

February 16, 2021 By:

President and Chief Executive Officer

1 unchanged sentence

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 16, 2021.

President and Chief Executive Officer and Director

(Principal Executive Officer)

Long President and Chief Executive Officer and Director

Long (Principal Executive Officer)

/s/ Matthew C.

Vice President, Chief Financial Officer and Treasurer

(Principal Financial Officer)

Vice President, Finance and Chief Accounting Officer

(Principal Accounting Officer)

Liuzzi Vice President, Chief Financial Officer and Treasurer

Liuzzi (Principal Financial Officer)

Tracy Owens Vice President, Finance and Chief Accounting Officer

Tracy Owens (Principal Accounting Officer)

/s/ Christopher R.

Curia Director

Christopher R.

/s/ Matthew S.

Joyce Director

/s/ Thomas E.

Long Director

/s/ Thomas P.

Mason Director

/s/ Matthew S.

Ramsey Director

/s/ William S.

Waldheim Director

/s/ Bradford D.

Whitehurst Director

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

13 unchanged sentences

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Partnership’s internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 16, 2021 expressed an unqualified opinion thereon.

Change in accounting principle

As discussed in Note 2 to the consolidated financial statements, the Partnership has changed its method of accounting for leases due to the adoption of the new leasing standard.

The Partnership adopted the new leasing standard by recognizing a cumulative catch-up adjustment to the opening balance sheet as of January 1, 2019.

Basis for opinion

6 unchanged sentences

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

2 unchanged sentences

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which it relates.

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessment

In evaluating whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Partnership performed a qualitative assessment of relevant events and circumstances.

If, after assessing the totality of events and circumstances, it was deemed more likely than not that the fair value of the reporting unit is less than its carrying amount, the Partnership estimated the fair value of the reporting unit by performing a quantitative goodwill impairment assessment.

As of October 1, 2019, the Partnership’s most recent assessment date, the Partnership concluded that it is not more likely than not that the fair value of its reporting unit was less than its carrying amount.

We have identified management’s assessment of qualitative factors for the annual goodwill impairment assessment as a critical audit matter.

The principal consideration for our determination that the assessment of qualitative factors for the annual goodwill impairment assessment is a critical audit matter is that there are significant judgements management made in assessing and weighting the relevant qualitative factors in determining whether it was more likely than not that the fair value of its reporting unit was less than its carrying amount.

Those factors include (i) macroeconomic conditions, (ii) industry and market considerations, (iii) cost factors,

(iv) overall financial performance of the reporting unit, (v) other relevant entity-specific events, and (vi) consideration of whether there was a sustained decrease in the price of Partnership units.

Our audit procedures related to the assessment of qualitative factors for the annual goodwill impairment assessment included the following procedures, among others.

We tested the effectiveness of controls relating to management’s review of the assessment of qualitative factors.

As described in Note 6 to the consolidated financial statements, the Partnership recognized a goodwill impairment of $619.4 million during the year ended December 31, 2020.

Annually, or whenever events or changes in circumstances indicate potential impairment has occurred, the Partnership evaluates the recoverability of the carrying value of goodwill.

The COVID-19 pandemic and the corresponding decrease in demand for crude oil, natural gas liquids and natural gas negatively impacted the Partnership’s current and projected operating results, cash flow and market capitalization.

Therefore, the Partnership determined that a triggering event had occurred and completed an interim goodwill impairment assessment of its single reporting unit during the first quarter of 2020.

The results of the quantitative impairment test indicated that the reporting unit had a carrying value that exceeded its fair value.

As a result, the Partnership recorded $619.4 million of impairment charges to goodwill during the fiscal year ended December 31, 2020.

We identified the Partnership’s goodwill impairment assessment as a critical audit matter.

The determination of the fair value of the reporting unit was a critical audit matter due to the significant judgment required by management when determining the fair value of a reporting unit.

In particular, the fair value estimates were sensitive to significant assumptions such as management’s cash flow projections, discount rates, and the inherent uncertainty around the timing of increases or decreases in future projected results utilized to estimate the fair value of the reporting unit.

Our audit procedures related to the estimation of the fair value of the reporting unit included the following procedures, among others.

We tested the effectiveness of controls relating to management’s review of the assumptions used to develop the future cash flows, the reconciliation of cash flows prepared by management to the data used in the valuation analyses, and the discount rate used.

In addition to testing the effectiveness of controls, we also performed the following:

Reviewed the application of the relevant accounting guidance with respect to the qualitative factors considered by the Partnership.

Evaluated the qualitative factors assessed by management for reasonableness.

Compared the actual current results of the reporting unit to the Partnership’s historical and forecasted performance.

• Evaluated the reasonableness of management’s forecasted financial results by:

• Testing forecasted revenues and gross margins by comparing forecasted amounts to actual historical results to identify material changes, corroborating the basis for increases or decreases in forecasted revenues and gross margins, as applicable, and

• Testing significant costs and cash expenditures by comparing to historical trends and evaluating significant deviations from recent actual amounts.

• Utilized an internal valuation specialist to evaluate:

• The methodologies used and whether they were acceptable for the underlying assets or operations and whether such methodologies were being applied correctly,

• The appropriateness of the discount rate by recalculating the weighted average cost of capital or developing independent ranges of the acceptable discount rate and comparing those ranges to the amounts selected and applied by management, and

• The qualifications of the valuation specialists engaged by the Partnership based on their credentials and experience.

/s/ GRANT THORNTON LLP

8 unchanged sentences

Accounts receivable:

Trade, net of allowances for credit losses of $ 4,982 and $ 2,479 , respectively

63,727 80,276

Other 3,707 11,057

Related party receivables 45,043 45,461

Inventories 84,632 91,923

Prepaid expenses and other assets 2,444 2,196

Total current assets 199,555 230,923

Lease right-of-use assets

Property and equipment, net 2,380,633 2,482,943

Lease right-of-use assets 22,766 18,317

Identifiable intangible assets, net 333,791 363,171

Goodwill — 619,411

Other assets 11,955 15,642

Total assets $ 2,948,700 $ 3,730,407

Liabilities, Preferred Units and Partners’ Capital

11 unchanged sentences

Partners’ capital:

Limited partner interest:

Common units, 96,632 and 89,984 units issued and outstanding as of December 31, 2019 and December 31, 2018, respectively

Class B Units, 6,398 units issued and outstanding as of December 31, 2018

Common units, 96,962 and 96,632 units issued and outstanding, respectively

323,676 1,166,619

Warrants 13,979 13,979

Total partners’ capital 337,655 1,180,598

5 unchanged sentences

Year Ended December 31,

2020 2019 2018

Contract operations $ 644,194 $ 664,162 $ 546,896

4 unchanged sentences

Cost of operations, exclusive of depreciation and amortization 205,939 227,303 214,724

Selling, general and administrative

Depreciation and amortization 238,968 231,447 213,692

Loss (gain) on disposition of assets

Selling, general and administrative 59,981 64,397 68,995

Loss on disposition of assets 146 940 12,964

Impairment of compression equipment 8,090 5,894 8,666

4 unchanged sentences

Interest expense, net ( 128,633 ) ( 127,146 ) ( 78,377 )

Other 86 80 41

Total other expense ( 128,547 ) ( 127,066 ) ( 78,336 )

5 unchanged sentences

Net loss attributable to:

Common units $ ( 643,482 ) $ ( 1,774 ) $ ( 32,053 )

Class B Units $ — $ ( 7,844 ) $ ( 14,928 )

10 unchanged sentences

Limited Partners

Class B Units

Predecessor Parent

Ending balance, December 31, 2016

Predecessor net loss

Predecessor parent company net contributions

Common Units Class B Units Warrants Predecessor Parent

Investment Total

Ending balance, December 31, 2017 $ — $ — $ — $ 1,664,870 $ 1,664,870

9 unchanged sentences

Vesting of phantom units 5,242 — — — 5,242

Distributions and distribution equivalent rights, $1.575 per unit

Distributions and DERs, $ 1.575 per unit

( 141,694 ) — — — ( 141,694 )

Issuance of common units under the DRIP 645 — — — 645

3 unchanged sentences

Vesting of phantom units 2,926 — — — 2,926

Distributions and distribution equivalent rights, $2.10 per unit

Distributions and DERs, $ 2.10 per unit

( 192,723 ) — — — ( 192,723 )

Issuance of common units under the DRIP 997 — — — 997

3 unchanged sentences

Partners' capital ending balance, December 31, 2019 1,166,619 — 13,979 — 1,180,598

Vesting of phantom units 1,748 — — — 1,748

Distributions and DERs, $ 2.10 per unit

( 203,325 ) — — — ( 203,325 )

Issuance of common units under the DRIP 1,901 — — — 1,901

Unit-based compensation for equity classified awards 215 — — — 215

Net loss attributable to common unitholders’ interests ( 643,482 ) — — — ( 643,482 )

Partners' capital ending balance, December 31, 2020 $ 323,676 $ — $ 13,979 $ — $ 337,655

See accompanying notes to consolidated financial statements.

3 unchanged sentences

Year Ended December 31,

2020 2019 2018

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization 238,968 231,447 213,692

Bad debt expense (recovery)

Provision for expected credit losses 3,700 1,050 633

Amortization of debt issuance costs 8,402 7,607 5,080

1 unchanged sentence

Deferred income tax expense (benefit) 530 1,376 ( 2,663 )

Loss (gain) on disposition of assets

Loss on disposition of assets 146 940 12,964

Impairment of compression equipment 8,090 5,894 8,666

2 unchanged sentences

Accounts receivable and related party receivables, net 23,542 ( 5,657 ) ( 50,029 )

Inventories ( 11,682 ) ( 25,137 ) ( 6,736 )

Prepaid expenses and other current assets ( 248 ) ( 604 ) 9,298

Other assets 3,167 2,589 ( 59 )

Accounts payable ( 3,745 ) ( 5,764 ) ( 5,140 )

18 unchanged sentences

Deferred financing costs ( 3,875 ) ( 13,679 ) ( 17,683 )

Contributions from (distributions to) Parent, net

Contributions from Parent, net — — 28,520

Other ( 772 ) ( 1,035 ) —

Net cash provided by (used in) financing activities ( 188,107 ) ( 156,179 ) 549,409

9 unchanged sentences

Change in capital expenditures included in accounts payable and accrued liabilities $ ( 8,557 ) $ 3,408 $ ( 32,168 )

Financing costs included in accounts payable and accrued liabilities $ 115 $ 18 $ —

Conversion of Class B Units to common units $ — $ 67,302 $ —

Predecessor’s non-cash contribution (to) from Predecessor’s Parent

Predecessor’s non-cash contribution to Predecessor’s Parent $ — $ — $ ( 1,790 )

Deemed distribution for additional interest in USA Compression Predecessor $ — $ — $ ( 36,111 )

10 unchanged sentences

Through our operating subsidiaries, we provide compression services under fixed-term contracts with customers in the natural gas and crude oil industries, using natural gas compression packages that we design, engineer, own, operate and maintain.

We primarily provide compression services in a number of shale plays throughout the United States, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara and Fayetteville shales.

We primarily provide compression services in a number of shale plays throughout the U.S., including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara and Fayetteville shales.

USA Compression GP, LLC, a Delaware limited liability company, serves as our general partner and is referred to herein as the “General Partner.” The General Partner has been wholly owned by Energy Transfer Operating, L.P.

9 unchanged sentences

The accompanying consolidated financial statements include the accounts of the Partnership and its operating subsidiaries, all of which are wholly owned by us.

Net loss attributable to partners is allocated to our common units and Class B Units using the two-class income allocation method.

Net loss attributable to partners is allocated to our common units and participating securities using the two-class income allocation method.

All intercompany balances and transactions have been eliminated in consolidation.

22 unchanged sentences

The Partnership

The consolidated financial statements give effect to the business combination and the Transactions discussed above under the acquisition method of accounting, and the business combination has been accounted for in accordance with the applicable reverse merger accounting guidance.

Our accompanying consolidated financial statements have been prepared in conformity with GAAP and pursuant to the rules and regulations of the SEC.

As noted below, the historical consolidated financial statements of the Partnership reflect the historical consolidated financial statements of the USA Compression Predecessor in accordance with the applicable accounting and financial reporting guidance.

The historical consolidated financial statements reflect the consolidated balance sheet and statement of operations of the Partnership, which includes the USA Compression Predecessor, as of and for all periods subsequent to the Transactions Date and includes only the USA Compression Predecessor for all periods prior to the Transactions Date.

The consolidated financial statements give effect to the business combination and the Transactions discussed in Note 1 under the acquisition method of accounting, and the business combination has been accounted for in accordance with the applicable reverse merger accounting guidance.

ET LP acquired a controlling financial interest in us through the acquisition of the General Partner.

As a result, the USA Compression Predecessor is deemed to be the accounting acquirer of the Partnership because its ultimate parent company obtained control of the Partnership through its control of the General Partner.

Consequently, the USA Compression Predecessor is deemed to be the predecessor of the Partnership for financial reporting purposes, and the historical financial statements of the Partnership now reflect the USA Compression Predecessor for all periods prior to the closing of the Transactions.

The closing of the Transactions occurred on the Transactions Date.

As a result, the USA Compression Predecessor was deemed to be the accounting acquirer of the Partnership because its ultimate parent company obtained control of the Partnership through its control of the General Partner.

Consequently, the USA Compression Predecessor was deemed to be the predecessor of the Partnership for financial reporting purposes, and the historical consolidated financial statements of the Partnership reflect the USA Compression Predecessor for all periods prior to the Transactions Date.

The USA Compression Predecessor’s assets and liabilities retained their historical carrying values.

Additionally, the Partnership’s assets acquired and liabilities assumed by the USA Compression Predecessor in the business combination have been recorded at their fair values measured as of the Transactions Date.

The excess of the assumed purchase price of the Partnership over the estimated fair values of the Partnership’s net assets acquired has been recorded as goodwill.

The assumed purchase price and fair value of the Partnership has been determined using acceptable fair value methods.

Additionally, because the USA Compression Predecessor is reflected at ET LP’s historical cost, the difference between the $ 1.7 billion in consideration paid by the Partnership and ET LP’s historical carrying values (net book value) at the Transactions Date has been recorded as a decrease to partners’ capital in the amount of $ 36.1 million .

Our accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

As noted above, the historical consolidated financial statements of the Partnership now reflect the historical consolidated financial statements of the USA Compression Predecessor in accordance with the applicable accounting and financial reporting guidance.

Therefore, the historical consolidated financial statements are comprised of the balance sheet and statement of operations of the USA Compression Predecessor as of and for periods prior to the Transactions Date.

The historical consolidated financial statements are also comprised of the consolidated balance sheet and statement of operations of the Partnership, which includes the USA Compression Predecessor, as of and for all periods subsequent to the Transactions Date.

The presentation of certain line items in historical periods have been conformed to the Partnership’s current year presentation for comparability.

Additionally, the Partnership’s assets acquired and liabilities assumed by the USA Compression Predecessor in the business combination were recorded at their fair values measured as of the Transactions Date.

The excess of the assumed purchase price of the Partnership over the estimated fair values of the Partnership’s net assets acquired were recorded as goodwill.

The assumed purchase price and fair value of the Partnership was determined using acceptable fair value methods.

Additionally, because the USA Compression Predecessor was reflected at ET LP’s historical cost, the difference between the $ 1.7 billion in consideration paid by the Partnership and ET LP’s historical carrying values (net book value) at the Transactions Date were recorded as a decrease to partners’ capital in the amount of $ 36.1 million.

USA COMPRESSION PARTNERS, LP

1 unchanged sentence

USA Compression Predecessor

ETO allocated various corporate overhead expenses to the USA Compression Predecessor based on a percentage of assets, net income (loss), or adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”).

ETO allocated various corporate overhead expenses to the USA Compression Predecessor based on a percentage of assets, net income (loss), or Adjusted EBITDA.

These allocations are not necessarily indicative of the cost that the USA Compression Predecessor would have incurred had it operated as an independent standalone entity.

The USA Compression Predecessor also historically relied upon ETO for funding operating and capital expenditures as necessary.

As a result, the historical financial statements of the USA Compression Predecessor may not fully reflect or be necessarily indicative of what the USA Compression Predecessor’s balance sheet, results of operations and cash flows would have been or will be in the future.

As a result, the historical financial statements of the USA Compression Predecessor may not fully reflect or be necessarily indicative of what the USA Compression Predecessor’s results of operations and cash flows would have been or will be in the future.

Certain expenses incurred by ETO are only indirectly attributable to the USA Compression Predecessor.

6 unchanged sentences

We consider investments in highly liquid financial instruments purchased with an original maturity of 90 days or less to be cash equivalents.

Trade Accounts Receivable and Allowance for Doubtful Accounts

Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest.

Our determination of the allowance for doubtful accounts requires us to make estimates and judgments regarding our customers’ ability to pay amounts due.

We continuously evaluate the financial strength of our customers based on payment history, the overall business climate in which our customers operate and specific identification of customer bad debt and make adjustments to the allowance as necessary.

Allowance for Credit Losses

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (“Topic 326”):

Measurement of Credit Losses on Financial Instruments .

On January 1, 2020, we adopted Topic 326 using the modified retrospective approach, which was effective for interim and annual reporting periods beginning on or after December 15, 2019.

Topic 326 requires immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets.

To adopt Topic 326, we evaluated our allowance for credit losses related to our two financial assets measured at amortized cost:

(i) trade accounts receivable and (ii) net investment in lease related to our sales-type lease discussed further in Note 8.

Due to the short-term nature of our trade accounts receivable, we consider the amortized cost to be the same as the carrying amount of the receivable, excluding the allowance for credit losses.

There was no cumulative effect adjustment to partners’ capital upon adoption.

Our determination of the allowance for credit losses requires us to make estimates and judgments regarding our customers’ ability to pay amounts due and is the same process for both of our financial assets as they have similar risk characteristics.

We continuously evaluate the financial strength of our customers based on collection experience, the overall business climate in which our customers operate and specific identification of customer credit losses and make adjustments to the allowance as necessary.

Our evaluation of our customers’ financial strength is based on the aging of their respective receivables balance, customer correspondence, financial information and third-party credit ratings.

Our evaluation of the business climate in which our customers operate is based on a review of various publicly available materials regarding our customers’ industries, including the solvency of various companies in the industry.

The USA Compression Predecessor determined its allowance for doubtful accounts based upon historical write-off experience and specific identification of unrecoverable amounts.

Inventories consist of serialized and non-serialized parts used primarily in the repair of compression units.

The USA Compression Predecessor determined its allowance for credit losses based upon historical write-off experience and specific identification of unrecoverable amounts.

Inventories consist of serialized and non-serialized parts used primarily on compression units.

All inventories are stated at the lower of cost or net realizable value.

Serialized parts inventories are recorded using the specific identification method, while non-serialized parts inventories are recorded using the weighted average cost method.

Purchases of these assets are considered operating activities in the Consolidated Statements of Cash Flows.

Serialized parts inventories are determined using the specific identification method, while non-serialized parts inventories are determined using the weighted average cost method.

Purchases of inventories are considered operating activities in the Consolidated Statements of Cash Flows.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Property and Equipment

3 unchanged sentences

When property and equipment is retired or sold, its carrying value and the related accumulated depreciation are removed from our accounts and any associated gains or losses are recorded on our statements of operations in the period of sale or disposition.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Capitalized interest is calculated by multiplying the Partnership’s monthly effective interest rate on outstanding debt by the amount of qualifying costs, which include upfront payments to acquire certain compression units.

Capitalized interest was $ 0.5 million and $ 0.3 million for the years ended December 31, 2019 and 2018 , respectively.

The USA Compression Predecessor had no capitalized interest for the year ended December 31, 2017 , as it did not hold any debt during the period.

Capitalized interest was $ 0.2 million, $ 0.5 million and $ 0.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Impairments of Long-Lived Assets

1 unchanged sentence

We test long-lived assets for impairment when events or circumstances indicate that the assets’ carrying value may not be recoverable or will no longer be utilized in the operating fleet.

The most common circumstance requiring compression units to be tested for impairment is when idle units do not meet the performance characteristics of our active revenue generating horsepower.

The most common circumstance requiring compression units to be evaluated for impairment is when idle units do not meet the performance characteristics of our active revenue generating horsepower.

The carrying value of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

If the carrying value exceeds the sum of the undiscounted cash flows associated with the operating fleet, an impairment loss equal to the amount of the carrying value exceeding the fair value of the asset is recognized.

If the carrying value of the long-lived asset exceeds the sum of the undiscounted cash flows associated with the asset, an impairment loss equal to the amount of the carrying value exceeding the fair value of the asset is recognized.

The fair value of the asset is measured using quoted market prices or, in the absence of quoted market prices, based on an estimate of discounted cash flows, the expected net sale proceeds compared to the other similarly configured fleet units we recently sold or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In the first quarter of 2020, we determined that the impairment of our goodwill was an indicator of potential impairment of the carrying amount of our long-lived assets.

Accordingly, we performed a quantitative impairment test of our long-lived assets, by which we determined that they were not also impaired.

No triggering events have been identified subsequent to the first quarter of 2020.

Refer to Note 6 for more detailed information about impairment charges during the years ended December 31, 2020, 2019 and 2018.

3 unchanged sentences

We assess identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

We did not record any impairment of identifiable intangible assets for the years ended December 31, 2019 , 2018 or 2017 .

In the first quarter of 2020, we determined that the impairment of our goodwill was an indicator of potential impairment of the carrying amount of our identifiable intangible assets.

Accordingly, we performed a quantitative impairment test of our identifiable intangible assets, by which we determined that they were not also impaired.

No triggering events have been identified subsequent to the first quarter of 2020.

We did no t record any impairment of identifiable intangible assets for the years ended December 31, 2020, 2019 or 2018.

Goodwill represents consideration paid in excess of the fair value of the identifiable net assets acquired in a business combination.

Goodwill is not amortized, but is reviewed for impairment annually based on the carrying values as of October 1, or more frequently if impairment indicators arise that suggest the carrying value of goodwill may not be recovered.

The Partnership did not record any goodwill impairment during the years ended December 31, 2019 and 2018 .

The USA Compression Predecessor recorded $ 223.0 million of goodwill impairment for the year ended December 31, 2017 .

We recorded a $ 619.4 million goodwill impairment for the year ended December 31, 2020 and did no t record any goodwill impairment during the years ended December 31, 2019 and 2018.

Refer to the Goodwill section in Note 6 for more information about the goodwill impairment assessment performed during the years ended December 31, 2020, 2019 and 2018.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Predecessor Parent Company Net Investment

1 unchanged sentence

Balances payable to or due from ETO generated under this arrangement are reflected in Predecessor parent company net investment.

ETO’s net investment in the operations of the USA Compression Predecessor is presented as Predecessor parent company net investment within the consolidated balance sheets.

ETO’s net investment in the operations of the USA Compression Predecessor is presented within the consolidated statements of changes in partners’ capital and predecessor parent company net investment.

Predecessor parent company net investment represents the accumulated net earnings of the operations of the USA Compression Predecessor and accumulated net contributions from ETO.

Net contributions for the period January 1, 2018 to April 1, 2018 were primarily comprised of intercompany operations and expense, cash clearing and other financing activities, and general and administrative cost allocations to the USA Compression Predecessor.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Revenue Recognition

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied;

generally this occurs with the transfer of our services or goods.

Revenue is measured as the amount of consideration we expect to receive in exchange for providing services or transferring goods.

Incidental items, if any, that are immaterial in the context of the contract are recognized as expenses.

Refer to Note 13 for more detailed information about revenue recognition for the years ended December 31, 2020, 2019 and 2018.

We are organized as a partnership for U.S.

18 unchanged sentences

The carrying amount of our revolving credit facility approximates fair value due to the floating interest rates associated with the debt.

The fair value of our Senior Notes 2026 and Senior Notes 2027 (collectively, the “Senior Notes”), both defined in Note 10 , were estimated using quoted prices in inactive markets and are considered Level 2 measurements.

The following table summarizes the aggregate principal amount and fair value of our Senior Notes (in thousands):

The fair value of our Senior Notes 2026 and Senior Notes 2027 were estimated using quoted prices in inactive markets and are considered Level 2 measurements.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

The following table summarizes the aggregate principal amount and fair value of our Senior Notes 2026 and Senior Notes 2027 (in thousands):

Senior Notes 2026, aggregate principal

$ 725,000 $ 725,000

Fair value of Senior Notes 2026

761,250 764,875

Senior Notes 2027, aggregate principal

750,000 750,000

Fair value of Senior Notes 2027

As part of the impairment analysis of goodwill as of December 31, 2017 , the fair value of the USA Compression Predecessor’s goodwill was re-measured using Level 3 inputs.

Refer to the Goodwill section in Note 6 for more information about this valuation as of December 31, 2017 .

800,625 785,625

Nonrecurring Fair Value Measurements

During the first quarter of 2020 certain potential impairment indicators were identified, specifically (i) the decline in the market price of our common units, (ii) the decline in global commodity prices and (iii) the COVID-19 pandemic;

which together indicated the fair value of the reporting unit was less than its carrying amount as of March 31, 2020.

We performed a quantitative impairment test as of March 31, 2020 that resulted in a goodwill impairment of $ 619.4 million for the year ended December 31, 2020.

Significant estimates used in our goodwill impairment analysis included cash flow forecasts, our estimate of the market’s weighted average cost of capital and market multiples, which are Level 3 inputs.

Refer to Note 6 for further information on our goodwill impairment analysis.

Use of Estimates

1 unchanged sentence

Although these estimates are based on management’s available knowledge of current and expected future events, actual results could differ from these estimates.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Operating Segment

We operate in a single business segment, the compression services business.

Adoption of Lease Accounting Standard

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-02, Leases (Topic 842) , which has amended the FASB Accounting Standards Codification (“ASC”) and introduced ASC Topic 842, Leases (“ASC Topic 842”).

On January 1, 2019, we adopted ASC Topic 842, which is effective for interim and annual reporting periods beginning on or after December 15, 2018.

ASC Topic 842 requires entities to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which historically were not recorded on the balance sheet in accordance with the prior standard.

To adopt ASC Topic 842, we recognized a cumulative catch-up adjustment to the opening balance sheet presented January 1, 2019 related to certain leases that existed as of that date.

As permitted, we have not retrospectively modified our consolidated financial statements for comparative purposes.

The adoption of the standard had an impact on our consolidated balance sheet, but did not have an impact on our consolidated statements of operations or cash flows.

As a result of adoption, we have recorded additional net right-of-use (“ROU”) lease assets and lease liabilities of approximately $ 3.5 million and $ 3.7 million , respectively, as of January 1, 2019.

In addition, we have updated our business processes, systems and internal controls to support the on-going reporting requirements under the new standard.

To adopt ASC Topic 842, we elected the package of practical expedients permitted under the transition guidance within the standard.

The expedient package allowed us not to reassess whether existing contracts contained a lease, the lease classification of existing leases and initial direct cost for existing leases.

In addition to the package of practical expedients, we have elected not to capitalize amounts pertaining to leases with terms less than twelve months, to use the portfolio approach to determine discount rates, not to separate non-lease components from lease components and not to apply the use of hindsight to the active lease population.

Cumulative-effect adjustments made to the opening balance sheet at January 1, 2019 were as follows (in thousands):

Balance Sheet Line Item

Balance at December 31, 2018, as previously reported

Adjustments due to ASC Topic 842 (Leases)

Balance at January 1, 2019

Accrued liabilities

Other liabilities

Additional disclosures related to lease accounting are included in Note 8 .

The USA Compression Predecessor is deemed to be the accounting acquirer of the Partnership in the business combination because its ultimate parent company obtained control of the Partnership through its control of the General Partner.

(3) Acquisitions

The USA Compression Predecessor was deemed to be the accounting acquirer of the Partnership in the business combination because its ultimate parent company obtained control of the Partnership through its control of the General Partner.

Consequently, the USA Compression Predecessor’s assets and liabilities retained their historical carrying values.

The Partnership’s assets acquired and liabilities assumed by the USA Compression Predecessor have been recorded at their fair values measured as of the Transactions Date.

The excess of the assumed purchase price of the Partnership over the estimated fair values of the Partnership’s net assets acquired has been recorded as goodwill.

The Partnership’s assets acquired and liabilities assumed by the USA Compression Predecessor were recorded at their fair values measured as of the Transactions Date.

The excess of the assumed purchase price of the Partnership over the estimated fair values of the Partnership’s net assets acquired were recorded as goodwill.

The assumed purchase price and fair value of the Partnership was determined using a combination of an income and cost valuation methodology, the fair value of the Partnership’s common units as of the Transactions Date and the consideration paid by ET LP for the General Partner and IDRs.

The valuation and purchase price allocation is considered final.

The property and equipment of the USA Compression Predecessor is reflected at historical carrying value, which is less than the consideration paid for the business.

The excess of the consideration paid over the historical carrying value was $ 36.1 million and is reflected as a decrease to partners’ capital.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

The Partnership incurred $ 21.7 million in transaction-related expenses prior to the Transactions Date, which were recognized by the Partnership when incurred in the periods prior to the Transactions Date, and therefore are not included within the results of operations presented within the consolidated financial statements for the year ended December 31, 2018.

For the period from April 2, 2018 to December 31, 2018, we recognized $ 269.2 million in revenues and $ 23.1 million in net income attributable to the Partnership’s historical assets.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

The following table summarizes the assumed purchase price and fair value and the allocation to the assets acquired and liabilities assumed (in thousands):

6 unchanged sentences

Long-term debt

( 1,526,865 )

Other long-term liabilities

Total liabilities assumed

( 1,638,868 )

Net identifiable assets acquired

2 unchanged sentences

Cash assumed in the CDM Acquisition

$ ( 710,506 )

Issuance of Preferred Units

5 unchanged sentences

$ ( 654,340 )

Goodwill recognized from the business combination primarily relates to the value attributed to additional growth opportunities, synergies and operating leverage within the Partnership’s areas of operation.

The valuation of goodwill recognized from the business combination is final.

________________________

(1) Goodwill recognized from the business combination primarily related to the value attributed to additional growth opportunities, synergies and operating leverage within the Partnership’s areas of operation.

Transition Services Agreement

2 unchanged sentences

Unaudited Pro Forma Financial Information

The following unaudited pro forma condensed financial information for the years ended December 31, 2018 and 2017 gives effect to the Transactions as if they had occurred on January 1, 2017.

The following unaudited pro forma condensed financial information for the year ended December 31, 2018 gives effect to the Transactions as if they had occurred on January 1, 2018.

The unaudited pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the Transactions taken place on the dates indicated and is not intended to be a projection of future events.

The pro forma adjustments

The pro forma adjustments for the periods presented consist of (i) adjustments to combine the USA Compression Predecessor’s and the Partnership’s historical results of operations for the periods, (ii) adjustments to interest expense to include interest expense for additional revolving credit facility borrowings and include the interest expense associated with our Senior Notes 2026 (see Note 10), (iii) adjustments to depreciation and amortization expense attributable to adjustments recorded as a result of the purchase price allocation to the Partnership’s assets and liabilities and (iv) adjustments to net loss attributable to common units and Class B Units attributable to distributions on the Partnership’s Preferred Units.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

for the periods presented consist of (i) adjustments to combine the USA Compression Predecessor’s and the Partnership’s historical results of operations for the periods, (ii) adjustments to interest expense to include interest expense for additional revolving credit facility borrowings and include the interest expense associated with our Senior Notes 2026 (see Note 10 ), (iii) adjustments to depreciation and amortization expense attributable to adjustments recorded as a result of the purchase price allocation to the Partnership’s assets and liabilities and (iv) adjustments to net loss attributable to common units and Class B Units attributable to distributions on the Partnership’s Series A Preferred Units (the “Preferred Units”).

The following table presents the unaudited pro forma revenues, net loss and basic and diluted net loss per unit information for each period (in thousands, except per unit amounts):

Year Ended December 31,

The following table presents the unaudited pro forma revenues, net loss and basic and diluted net loss per unit information for the year ended December 31, 2018 (in thousands, except per unit amounts):

Total revenues $ 662,091

Net loss ( 44,894 )

Net loss attributable to common and Class B unitholders’ interests ( 93,644 )

1 unchanged sentence

The pro forma net loss for the year ended December 31, 2018 includes expenses that were a direct result of the Transactions, including $ 1.0 million in employee severance charges attributable to employees not retained by the Partnership subsequent to the Transactions and $ 21.7 million in transaction expenses, including advisory, audit and legal fees.

These expenses were recognized by the Partnership as they were incurred during the period from January 1, 2018 to April 1, 2018, but because the USA Compression Predecessor’s historical condensed consolidated financial statements are now reflected for that period, the condensed consolidated financial statements presented in accordance with GAAP for the year ended December 31, 2018 do not reflect such expenses incurred as a direct result of the Transactions.

These expenses were recognized by the Partnership as they were incurred during the period from January 1, 2018 to April 1, 2018, but because the USA Compression Predecessor’s historical condensed consolidated financial statements were reflected for that period, the condensed consolidated financial statements presented in accordance with GAAP for the year ended December 31, 2018 do not reflect such expenses incurred as a direct result of the Transactions.

(4) Trade Accounts Receivable

The allowance for doubtful accounts, which was $ 2.5 million and $ 1.7 million as of December 31, 2019 and 2018 , respectively, is our best estimate of the amount of probable credit losses included in our existing accounts receivable.

During the year ended December 31, 2019 , we recognized bad debt expense of $ 1.1 million and wrote-off $ 0.3 million of receivables on accounts previously reserved, resulting in an $ 0.8 million increase in our allowance for doubtful accounts.

During the year ended December 31, 2018 , we increased our allowance for doubtful accounts by $ 0.9 million , due primarily to estimated uncollectible amounts from customers of the USA Compression Predecessor.

The USA Compression Predecessor reduced its allowance for doubtful accounts by $ 4.1 million during the year ended December 31, 2017 due to write-offs of receivables and collections on accounts previously reserved.

Due to the decrease in the allowance for doubtful accounts during 2017 , the USA Compression Predecessor recognized a reduction of bad debt expense of $ 1.8 million for the year ended December 31, 2017 .

The allowance for credit losses, which was $ 5.0 million and $ 2.5 million as of December 31, 2020 and 2019, respectively, is our best estimate of the amount of probable credit losses included in our existing accounts receivable.

The following summarizes activity within our trade accounts receivable allowance for credit losses balance (in thousands):

Allowance for Credit Losses (1)

Balance, December 31, 2018 $ 1,705

Current-period provision for expected credit losses 1,050

Writeoffs charged against the allowance ( 276 )

Balance, December 31, 2019 2,479

Current-period provision for expected credit losses 3,700

Writeoffs charged against the allowance ( 1,197 )

Balance, December 31, 2020 $ 4,982

________________________

(1) On January 1, 2020, we adopted Topic 326 using the modified retrospective approach, refer to Note 2 for more information.

The potential negative impact to our customers of low crude oil prices during 2020, driven by decreased demand for and global oversupply of crude oil as a result of the COVID-19 pandemic, is the primary factor contributing to the increase to the allowance for credit losses for the year ended December 31, 2020.

We cannot predict the duration of these conditions or the severity of their impact on our customers and the collectability of their accounts receivable.

During the year ended December 31, 2018, we recorded $ 0.6 million to the current-period provision for expected credit losses.

(5) Inventories

Components of inventories were as follows (in thousands):

Serialized parts

$ 42,233 $ 43,890

Non-serialized parts

42,399 48,033

Total inventories

$ 84,632 $ 91,923

USA COMPRESSION PARTNERS, LP

7 unchanged sentences

Leasehold improvements 8,218 7,395

Buildings 5,334 8,639

Furniture and fixtures 1,110 1,543

3 unchanged sentences

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets as follows:

Compression equipment, acquired new

Compression equipment, acquired used

Furniture and fixtures

Vehicles and computer equipment

Leasehold improvements

Compression equipment, acquired new 25 years

Compression equipment, acquired used 5 - 25 years

Furniture and fixtures 3 - 10 years

Vehicles and computer equipment 1 - 10 years

Buildings 5 years

Leasehold improvements 5 years

Depreciation expense on property and equipment was $ 209.6 million, $ 202.0 million and $ 186.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.

1 unchanged sentence

This change resulted in a $ 33.8 million increase to both operating income and net income for the year ended December 31, 2018, and a $ 0.42 increase to both basic and diluted earnings per common unit and Class B Unit for year ended December 31, 2018.

As of December 31, 2019 and 2018 , there was $ 11.4 million and $ 7.9 million , respectively, of property and equipment purchases in accounts payable and accrued liabilities.

During the years ended December 31, 2019 and 2018 , there were net losses on the disposition of assets of $ 0.9 million and $ 13.0 million , respectively.

During the years ended December 31, 2020, 2019 and 2018, there were net losses on the disposition of assets of $ 0.1 million, $ 0.9 million and $ 13.0 million, respectively.

For the year ended December 31, 2018, these net losses were primarily related to disposals of various property and equipment by the USA Compression Predecessor.

During the year ended December 31, 2017 , the USA Compression Predecessor recognized a $ 0.4 million net gain on disposition of assets.

For the years ended December 31, 2019 and 2018 , we evaluated the future deployment of our idle fleet under then-current market conditions and determined to retire and re-utilize key components of 33 and 103 compressor units, respectively, or approximately 11,000 and 33,000 horsepower, respectively, that were previously used to provide services in our business.

As a result, we recorded $ 5.9 million and $ 8.7 million in impairment of compression equipment for the years ended December 31, 2019 and 2018 , respectively.

The primary causes for this impairment were:

(i) units were not considered marketable in the foreseeable future, (ii) units were subject to excessive maintenance costs or (iii) units were unlikely to be accepted by customers due to certain

For the years ended December 31, 2020, 2019 and 2018, we evaluated the future deployment of our idle fleet under current market conditions and determined to retire 37 , 33 and 103 compressor units, respectively, for a total of approximately 15,000 , 11,000 and 33,000 horsepower, respectively, that were previously used to provide compression services in our business.

As a result, we recorded impairments of compression equipment of $ 8.1 million, $ 5.9 million and $ 8.7 million for the years ended December 31, 2020, 2019 and 2018, respectively.

The primary causes for these impairments were:

(i) units were not considered marketable in the foreseeable future, (ii) units were subject to excessive maintenance costs or (iii) units were unlikely to be accepted by customers due to certain performance characteristics of the unit, such as the inability to meet current quoting criteria without excessive retrofitting costs.

These compression units were written down to their respective estimated salvage values, if any.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

performance characteristics of the unit, such as the inability to meet then-current quoting criteria without excessive retrofitting costs.

These compression units were written down to their respective estimated salvage values, if any .

The USA Compression Predecessor did not record any impairment of long-lived assets during the year ended December 31, 2017 .

Identifiable Intangible Assets

Identifiable intangible assets, net consisted of the following (in thousands):

Relationships

Relationships Trade Names Total

Gross balance at December 31, 2018 $ 485,162 $ 65,500 $ 550,662

Additions (1)

Accumulated amortization ( 156,105 ) ( 31,386 ) ( 187,491 )

3 unchanged sentences

Net balance at December 31, 2020 $ 302,952 $ 30,839 $ 333,791

________________________________

Additions for customer relationships recognized during the year ended December 31, 2018 were related to the Transactions, see Note 3 for further information on the purchase price and fair value allocation.

Amortization expense for the years ended December 31, 2020, 2019 and 2018 was $ 29.4 million, $ 29.4 million and $ 27.2 million, respectively.

The expected amortization of the intangible assets for each of the five succeeding years is $ 29.4 million.

As of December 31, 2019 and 2018 , the Partnership had $ 619.4 million of goodwill.

There were no changes to the carrying value of goodwill during the year ended December 31, 2019 .

As of December 31, 2020 and 2019, the Partnership had $ 0 and $ 619.4 million of goodwill, respectively.

which together indicated the fair value of the reporting unit was less than its carrying amount as of March 31, 2020.

We performed a quantitative goodwill impairment test as of March 31, 2020 and determined fair value using a weighted combination of the income approach and the market approach.

Determining fair value of a reporting unit requires judgment and use of significant estimates and assumptions.

Such estimates and assumptions include revenue growth rates, EBITDA margins, weighted average costs of capital and future market conditions, among others.

We believe the estimates and assumptions used were reasonable and based on available market information, but variations in any of the assumptions could have resulted in materially different calculations of fair value and determinations of whether or not an impairment is indicated.

Under the income approach, we determined fair value based on estimated future cash flows, including estimates for capital expenditures, discounted to present value using the risk-adjusted industry rate, which reflects the overall level of inherent risk of the Partnership.

Cash flow projections were derived from four-year operating forecasts plus an estimate of later period cash flows, all of which were developed by management.

Subsequent period cash flows were developed using growth rates that management believed were reasonably likely to occur.

Under the market approach, we determined fair value by applying valuation multiples of comparable publicly-traded companies to the projected EBITDA of the Partnership and then averaging that estimate with similar historical calculations using a three-year average.

In addition, we estimated a reasonable control premium representing the incremental value that would accrue to us if we were to be acquired.

Based on the quantitative goodwill impairment test described above, our carrying amount exceeded fair value and as a result, we recognized a goodwill impairment of $ 619.4 million for the year ended December 31, 2020.

As of October 1, 2019 and 2018, we performed a qualitative assessment of relevant events and circumstances potentially indicating the likelihood of goodwill impairment.

The qualitative assessment included weighting such factors as (i) macroeconomic conditions, (ii) industry and market considerations, (iii) cost factors, (iv) overall financial performance of the reporting unit, (v) other relevant entity-specific events, and (vi) consideration of whether there was a sustained decrease in the price of our units.

Upon completion of our qualitative assessment, we concluded that it is not more likely than not that the fair value of our single reporting unit was less than its carrying value and that our goodwill was not impaired for the years ended December 31, 2019 and 2018 .

For the year ended December 31, 2017 and in accordance with its early adoption of ASU 2017-04, the USA Compression Predecessor performed a quantitative assessment for its annual goodwill impairment test and determined its fair value using a weighted combination of the discounted cash flow method and the guideline company method.

Determining the fair value of a reporting unit requires judgment and the use of significant estimates and assumptions.

Such estimates and assumptions include revenue growth rates, operating margins, weighted average costs of capital and future market conditions, among others.

The USA Compression Predecessor believed the estimates and assumptions used in the impairment assessment were reasonable and based on available market information, but variations in any of the assumptions could have resulted in materially different calculations of fair value and determinations of whether or not an impairment is indicated.

Under the discounted cash flow method, the USA Compression Predecessor determined fair value based on estimated future cash flows including estimates for capital expenditures, discounted to present value using the risk-adjusted industry rate, which reflects the overall level of inherent risk of the company.

Cash flow projections were derived from one year budgeted amounts and five year operating forecasts plus an estimate of later period cash flows, all of which were developed by management.

Subsequent period cash flows were developed using growth rates that management believed were reasonably likely to occur.

Under the guideline company method, the USA Compression Predecessor determined its estimated fair value by applying valuation multiples of comparable publicly-traded companies to the

Upon completion of our qualitative assessment, we concluded that it was not more likely than not that the fair value of our single reporting unit was less than its carrying value and that our goodwill was no t impaired for the years ended December 31, 2019 and 2018.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

projected EBITDA of the company and then averaging that estimate with similar historical calculations using a three-year average.

In addition, the USA Compression Predecessor estimated a reasonable control premium representing the incremental value that accrues to the predecessor’s majority owner from the opportunity to dictate the strategic and operational actions of the business.

Additionally, the USA Compression Predecessor considered the presence and probability of subsequent events on market transactions in estimating the fair value of the company, such as the Transactions discussed in Note 1 .

Based on the completion of the annual goodwill impairment testing as described above, the USA Compression Predecessor recorded a $ 223.0 million impairment equal to the excess of the carrying value over fair value for the year ended December 31, 2017 .

(7) Other Current Liabilities

3 unchanged sentences

Accrued payroll and benefits 8,416 10,687

Accrued unit-based compensation liability 9,183 7,120

Accrued capital expenditures 2,800 11,357

2 unchanged sentences

(8) Lease Accounting

On January 1, 2019, we adopted FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC Topic 842”).

Lessee Accounting

We maintain both finance leases and operating leases, primarily related to office space, warehouse facilities and certain corporate equipment.

Our leases have remaining lease terms of up to 10 years , some of which include options that permit renewals for additional periods.

Our leases have remaining lease terms of up to nine years , some of which include options that permit renewals for additional periods.

We determine if an arrangement is a lease at inception.

24 unchanged sentences

Components of lease expense consisted of the following (in thousands):

Income Statement Line Item

Year Ended December 31,

Income Statement Line Item 2020 2019

Operating lease costs:

Operating lease cost

Cost of operations, exclusive of depreciation and amortization

Operating lease cost

Selling, general and administrative

Operating lease cost Cost of operations, exclusive of depreciation and amortization $ 2,874 $ 1,796

Operating lease cost Selling, general and administrative 1,566 1,165

Total operating lease costs 4,440 2,961

Finance lease costs:

Amortization of lease assets

Depreciation and amortization

Amortization of lease assets Depreciation and amortization 410 1,638

Short-term lease costs:

Short-term lease cost

Cost of operations, exclusive of depreciation and amortization

Short-term lease cost

Selling, general and administrative

Short-term lease cost Cost of operations, exclusive of depreciation and amortization 308 309

Short-term lease cost Selling, general and administrative 38 34

Total short-term lease costs 346 343

Variable lease costs:

Variable lease cost

Cost of operations, exclusive of depreciation and amortization

Variable lease cost

Selling, general and administrative

Variable lease cost Cost of operations, exclusive of depreciation and amortization 263 226

Variable lease cost Selling, general and administrative 1,126 1,130

Total variable lease costs 1,389 1,356

1 unchanged sentence

The weighted average remaining lease terms and weighted average discount rates were as follows:

December 31, 2019

Year Ended December 31,

Weighted average remaining lease term:

Operating leases

Finance leases

Operating leases 8 years 8 years

Finance leases 3 years 4 years

Weighted average discount rate:

13 unchanged sentences

Maturities of lease liabilities as of December 31, 2020 consisted of the following (in thousands):

Operating Leases

Finance Leases

Operating Leases Finance Leases Total

2021 $ 4,241 $ 567 $ 4,808

2022 3,924 398 4,322

2023 3,562 369 3,931

2024 3,345 284 3,629

2025 3,281 — 3,281

Thereafter 11,264 — 11,264

Total lease payments 29,617 1,618 31,235

1 unchanged sentence

Present value of lease liabilities $ 24,328 $ 1,550 $ 25,878

As of December 31, 2019 , we have entered into two operating leases that have not yet commenced with an estimated present value of $ 7.1 million .

These operating leases will both commence in the first quarter of 2020 and have terms of two years and ten years .

As of December 31, 2020, we have no t entered into any additional leases that have not yet commenced.

Lessor Accounting

1 unchanged sentence

The bargain purchase option provides the customer with an option to acquire the equipment at a value significantly less than the fair market value at the end of the lease term in 2021.

We accounted for this option as a sales type lease resulting in a current installment receivable included in other accounts receivable of $ 4.0 million and $ 3.7 million , and a long-term installment receivable included in other assets of $ 2.9 million and $ 6.9 million as of December 31, 2019 and December 31, 2018 , respectively.

We accounted for this option as a sales type lease resulting in a current installment receivable included in other accounts receivable of $ 2.9 million and $ 4.0 million, and a long-term installment receivable included in other assets of $ 0 and $ 2.9 million as of December 31, 2020 and December 31, 2019, respectively.

As of December 31, 2020, there is no allowance for credit losses on our net investment in the sales-type lease based on our collections experience with the customer.

Revenue and interest income related to the lease is recognized over the lease term.

We recognize maintenance revenue within contract operations revenue and interest income within interest expense, net.

Maintenance revenue recognized for the years ended December 31, 2019 and 2018 was $ 1.3 million and $ 1.0 million , respectively.

Interest income recognized for the years ended December 31, 2019 and 2018 was $ 0.7 million and $ 0.7 million , respectively.

The USA Compression Predecessor had no lease revenue, maintenance revenue or interest income related to leases for the year ended December 31, 2017 .

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Maintenance revenue recognized for the years ended December 31, 2020, 2019 and 2018 was $ 1.3 million, $ 1.3 million and $ 1.0 million, respectively.

Interest income recognized for the years ended December 31, 2020, 2019 and 2018 was $ 0.4 million, $ 0.7 million and $ 0.7 million, respectively.

Lease payments expected to be received subsequent to December 31, 2020 are as follows (in thousands):

2 unchanged sentences

Present value of installment receivables $ 2,925

________________________

(1) As discussed above, the installment receivable lease term ends in 2021.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

ASC Topic 842 provides lessors with a practical expedient to not separate non-lease components from the associated lease components and, instead, to account for those components as a single component if the non-lease components otherwise would be accounted for under ASC Topic 606 Revenue from Contracts with Customers (“ASC Topic 606”) and certain conditions are met.

7 unchanged sentences

Year Ended December 31,

2020 2019 2018

Current tax expense

$ 803 $ 810 $ 189

Deferred tax expense (benefit)

530 1,376 ( 2,663 )

Total income tax expense (benefit)

$ 1,333 $ 2,186 $ ( 2,474 )

Deferred income tax balances are the direct effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the taxes are actually paid or recovered.

The tax effects of temporary differences related to property and equipment and identifiable intangible assets that give rise to deferred tax liabilities, included in other liabilities, are as follows (in thousands):

The tax effects of temporary differences related to property and equipment, identifiable intangible assets and goodwill that gives rise to deferred tax assets (liabilities), included net within other liabilities, are as follows (in thousands):

Deferred tax assets:

Goodwill $ 4 $ —

Deferred tax liabilities:

2 unchanged sentences

Total deferred tax liabilities ( 4,450 ) ( 3,916 )

FASB ASC Topic 740 Income Taxes (“ASC Topic 740”) provides guidance on measurement and recognition in accounting for income tax uncertainties and provides related guidance on derecognition, classification, disclosure, interest, and penalties.

As of December 31, 2019 , we had no material unrecognized tax benefits (as defined in ASC Topic 740).

We do not expect to incur interest charges or penalties related to our tax positions, but if such charges or penalties are incurred, our policy is to account for interest charges as Interest expense, net and penalties as Income tax expense in the Consolidated Statements of Operations.

Deferred tax liabilities, net $ ( 4,446 ) $ ( 3,916 )

FASB ASC Topic 740 Income Taxes (“Topic 740”) provides guidance on measurement and recognition in accounting for income tax uncertainties and provides related guidance on derecognition, classification, disclosure, interest, and penalties.

As of December 31, 2020, we had no material unrecognized tax benefits (as defined in Topic 740).

We do not expect to incur interest charges or penalties related to our tax positions, but if such charges or penalties are incurred, our policy is to account for interest charges and penalties as income tax expense in the Consolidated Statements of Operations.

In general, we are not currently subject to examination by the IRS, and most state jurisdictions, for the 2014 and prior tax years.

The Bipartisan Budget Act of 2015 provides that any tax adjustments (including any applicable penalties and interest) resulting from partnership audits will generally be determined at the partnership level for tax years beginning after December 31, 2017.

To the extent possible under these rules, our general partner may elect to either pay the taxes (including any applicable penalties and

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

interest) directly to the Internal Revenue Service or, if we are eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return.

To the extent possible under these rules, our general partner may elect to either pay the taxes (including any applicable penalties and interest) directly to the Internal Revenue Service or, if we are eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited and adjusted return.

The Bipartisan Budget Act of 2015 allows a partnership to elect to apply these provisions to any return of the partnership filed for partnership taxable years beginning after the date of the enactment, November 2, 2015.

We do not intend to elect to apply these provisions for any tax return filed for partnership taxable years beginning before January 1, 2018.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

(10) Long-Term Debt

1 unchanged sentence

Senior Notes 2026, aggregate principal

$ 725,000 $ 725,000

Senior Notes 2027, aggregate principal

750,000 750,000

deferred financing costs, net of amortization

( 21,805 ) ( 25,362 )

Total Senior Notes, net

1,453,195 1,449,638

Revolving Credit Facility

473,810 402,722

Total long-term debt, net

$ 1,927,005 $ 1,852,360

Revolving Credit Facility

On the Transactions Date, we entered into the Sixth Amended and Restated Credit Agreement (the “Credit Agreement”) by and among the Partnership, as borrower, USAC OpCo 2, LLC, USAC Leasing 2, LLC, USA Compression Partners, LLC, USAC Leasing, LLC, CDM Resource, CDM E&T and USA Compression Finance Corp.

(“Finance Corp”), our wholly owned finance subsidiary, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as agent and a Letter of Credit (“LC”) issuer, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Regions Capital Markets, a division of Regions Bank, RBC Capital Markets and Wells Fargo Bank, N.A., as joint lead arrangers and joint book runners, Barclays Bank PLC, Regions Bank, RBC Capital Markets and Wells Fargo Bank, N.A., as syndication agents, and MUFG Union Bank, N.A., SunTrust Bank and The Bank of Nova Scotia, as senior managing agents.

The Credit Agreement has an aggregate commitment of $ 1.6 billion (subject to availability under our borrowing base), with a further potential increase of $ 400 million , and has a maturity date of April 2, 2023.

The Credit Agreement permits us to make distributions of available cash to unitholders so long as (i) no default under the facility has occurred, is continuing or would result from the distribution, (ii) immediately prior to and after giving effect to such distribution, we are in compliance with the facility’s financial covenants and (iii) immediately after giving effect to such distribution, we have availability under the revolving credit facility of at least $ 100 million .

On the Transactions Date, we entered into the Credit Agreement.

The Credit Agreement was amended on August 3, 2020 (the “Amendment Effective Date”) to amend, among other things, the requirements of certain covenants and the date on which certain covenants in the Credit Agreement must be met beginning on the Amendment Effective Date until the last day of the fiscal quarter ending December 31, 2021 (the “Covenant Relief Period”).

The Credit Agreement permits us to make distributions of available cash to unitholders so long as (i) no default under the facility has occurred, is continuing or would result from the distribution, (ii) immediately prior to and after giving effect to such distribution, we are in compliance with the facility’s financial covenants and (iii) immediately after giving effect to such distribution, we have availability under the Credit Agreement of at least $ 250 million (reverting back to $ 100 million after the Covenant Relief Period).

In addition, the Credit Agreement contains various covenants that may limit, among other things, our ability to (subject to exceptions):

• grant liens;

• make certain loans or investments;

4 unchanged sentences

• make certain acquisitions.

The revolving credit facility also contains various financial covenants, including covenants requiring us to maintain:

a minimum EBITDA to interest coverage ratio of 2.5 to 1.0 , determined as of the last day of each fiscal quarter;

a maximum funded debt to EBITDA ratio, determined as of the last day of each fiscal quarter, for the annualized trailing three months of (i) 5.5 to 1.0 through the end of the fiscal quarter ending December 31, 2019 and (ii) 5.0 to 1.0 thereafter,

The Credit Agreement also contains various financial covenants, including covenants requiring us to maintain:

• a minimum EBITDA to interest coverage ratio of 2.5 to 1.0, determined as of the last day of each fiscal quarter, for the annualized trailing three months;

• a maximum funded debt to EBITDA ratio, determined as of the last day of each fiscal quarter, for the annualized trailing three months of (i) 5.75 to 1.00 for the fiscal quarters ending September 30, 2020 and December 31, 2020, (ii) 5.50 to 1.00 for the fiscal quarters ending March 31, 2021 and June 30, 2021 and (iii) 5.25 to 1.00 for the fiscal quarters ending September 30, 2021 and December 31, 2021 (reverting back to 5.00 to 1.00 after the Covenant Relief Period).

In addition, the amendment provides that the 0.50 increase in maximum funded debt to EBITDA ratio applicable to certain future acquisitions (for the six consecutive month period in which any such acquisition occurs) is only available beginning with the fiscal quarter ending September 30, 2021, and in any case shall not increase the maximum funded debt to EBITDA ratio above 5.50 to 1.00.

In addition, during the Covenant Relief Period, the applicable margin for Eurodollar borrowings is increased from a range of 2.00 % – 2.75 % to a range of 2.25 % – 3.00 %.

The amendment further provides that the Partnership becomes guarantor of the obligations of all other guarantors under the Credit Agreement.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

in each case subject to a provision for increases to such thresholds by 0.5 in connection with certain future acquisitions for the six consecutive month period following the period in which any such acquisition occurs.

If a default exists under the Credit Agreement, the lenders will be able to accelerate the maturity on the amount then outstanding and exercise other rights and remedies.

In connection with entering into the amended Credit Agreement, we paid certain upfront fees and arrangement fees to the arrangers, syndication agents and senior managing agents of the Credit Agreement in the amount of $ 14.3 million during the year ended December 31, 2018.

These fees were capitalized to loan costs and will be amortized through April 2023.

Amounts borrowed and repaid under the Credit Agreement may be re-borrowed.

In connection with the Credit Agreement amendment, we incurred arrangement fees, consent fees and other fees in the amount of $ 3.4 million during the year ended December 31, 2020.

These fees were capitalized to loan costs and are amortized over the remaining term of the Credit Agreement.

As of December 31, 2020, we were in compliance with all of our covenants under the Credit Agreement.

2 unchanged sentences

The largest component, representing 95 % of the borrowing base as of December 31, 2020, was eligible compression units.

Eligible compression units consist of compressor packages that are leased, rented or under service contracts to customers and carried in the financial statements as fixed assets.

Eligible compression units consist of compressor packages that are under service contracts, leased or rented and carried in the financial statements as fixed assets.

Our weighted-average interest rate in effect for all borrowings under the Credit Agreement as of December 31, 2020 was 2.95 %, with a weighted-average interest rate of 3.27 % for the year ended December 31, 2020.

There were no LCs issued as of December 31, 2019 .

We pay a commitment fee of 0.375 % on the unused portion of the revolving credit facility.

The Credit Agreement matures in April 2023 and we expect to maintain it for the term.

There were no letters of credit issued as of December 31, 2020.

We pay a commitment fee of 0.375 % on the unused portion of the Credit Agreement.

The Credit Agreement is a “revolving credit facility” that includes a lock box arrangement, whereby remittances from customers are forwarded to a bank account controlled by the administrative agent and are applied to reduce borrowings under the facility.

Amounts borrowed and repaid under the Credit Agreement may be re-borrowed.

Senior Notes 2027

On March 7, 2019, the Partnership and Finance Corp co-issued $ 750.0 million aggregate principal amount of senior notes due on September 1, 2027 (the “Senior Notes 2027”).

The Senior Notes 2027 accrue interest from March 7, 2019 at the rate of 6.875 % per year.

On March 7, 2019, the Partnership and USA Compression Finance Corp.

(“Finance Corp”) co-issued the Senior Notes 2027.

The Senior Notes 2027 are due on September 1, 2027 and accrue interest from March 7, 2019 at the rate of 6.875 % per year.

Interest on the Senior Notes 2027 is payable semi-annually in arrears on each of March 1 and September 1, with the first such payment having occurred on September 1, 2019.

2 unchanged sentences

On or after September 1, 2022, we may redeem all or a part of the Senior Notes 2027 at redemption prices (expressed as percentages of the principal amount) set forth below, plus accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on September 1 of the years indicated below:

Year Percentages

2022 105.156 %

2023 103.438 %

2024 101.719 %

2025 and thereafter 100.000 %

If we experience a change of control followed by a ratings decline, unless we have previously exercised or concurrently exercise our right to redeem the Senior Notes 2027 (as described above), we may be required to offer to repurchase the Senior Notes 2027 at a purchase price equal to 101 % of the principal amount repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Notes 2027 at a purchase price equal to 101 % of the principal amount repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

The indenture governing the Senior Notes 2027 (the “2027 Indenture”) contains certain financial ratios that we must comply with in order to make certain restricted payments as described in the 2027 Indenture.

As of December 31, 2020, we were in compliance with such financial covenants under the 2027 Indenture.

In connection with issuing the Senior Notes 2027, we incurred certain issuance costs in the amount of $ 13.3 million during the year ended December 31, 2019, which is amortized over the term of the Senior Notes 2027.

The Senior Notes 2027 are fully and unconditionally guaranteed (the “2027 Guarantees”), jointly and severally, on a senior unsecured basis by all of our existing subsidiaries (other than Finance Corp), and will be fully and unconditionally guaranteed, jointly and severally, by each of our future restricted subsidiaries that either borrows under, or guarantees, our revolving credit facility of guarantees certain of our other indebtedness (collectively, the “Guarantors”).

The Senior Notes 2027 are fully and unconditionally guaranteed (the “2027 Guarantees”), jointly and severally, on a senior unsecured basis by all of our existing subsidiaries (other than Finance Corp), and will be fully and unconditionally guaranteed, jointly and severally, by each of our future restricted subsidiaries that either borrows under, or guarantees, the Credit Agreement or guarantees certain of our other indebtedness (collectively, the “Guarantors”).

The Senior Notes 2027 and the 2027 Guarantees are general unsecured obligations and rank equally in right of payment with all of the Guarantors’ and our existing and future senior indebtedness and senior to the Guarantors’ and our future subordinated indebtedness, if any.

3 unchanged sentences

Senior Notes 2026

On March 23, 2018, the Partnership and Finance Corp co-issued $ 725.0 million aggregate principal amount of senior notes due on April 1, 2026 (the “Senior Notes 2026”).

The Senior Notes 2026 accrue interest from March 23, 2018 at the rate of 6.875 % per year.

On March 23, 2018, the Partnership and Finance Corp co-issued the Senior Notes 2026.

The Senior Notes 2026 are due on April 1, 2026 and accrue interest from March 23, 2018 at the rate of 6.875 % per year.

Interest on the Senior Notes 2026 is payable semi-annually in arrears on each of April 1 and October 1, with the first such payment having occurred on October 1, 2018.

2 unchanged sentences

On or after April 1, 2021, we may redeem all or a part of the Senior Notes 2026 at redemption prices (expressed as percentages of the principal amount) set forth below, plus accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on April 1 of the years indicated below:

Year Percentages

2021 105.156 %

2022 103.438 %

2023 101.719 %

2024 and thereafter 100.000 %

If we experience a change of control followed by a ratings decline, unless we have previously exercised or concurrently exercise our right to redeem the Senior Notes 2026 (as described above), we may be required to offer to repurchase the Senior Notes 2026 at a purchase price equal to 101 % of the principal amount repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Notes 2026 at a purchase price equal to 101 % of the principal amount repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

The indenture governing the Senior Notes 2026 (the “2026 Indenture”) contains certain financial ratios that we must comply with in order to make certain restricted payments as described in the 2026 Indenture.

As of December 31, 2020, we were in compliance with such financial covenants under the 2026 Indenture.

In connection with issuing the Senior Notes 2026, we incurred certain issuance costs in the amount of $ 17.3 million during the year ended December 31, 2018, which is amortized over the term of the Senior Notes 2026.

3 unchanged sentences

On January 14, 2019, the Partnership closed an exchange offer whereby holders of the Senior Notes 2026 exchanged all of the Senior Notes 2026 for an equivalent amount of senior notes (“Exchange Notes 2026”) registered under the Securities Act.

The Exchange Notes 2026 are substantially identical to the Senior Notes 2026, except that the Exchange Notes 2026 have been registered and do not contain the transfer restrictions, restrictive legends, registration rights or additional interest provisions of the Senior Notes 2026.

The Exchange Notes 2026 are substantially identical to the Senior Notes 2026, except that the Exchange Notes 2026 have been registered with the SEC and do not contain the transfer restrictions, restrictive legends, registration rights or additional interest provisions of the Senior Notes 2026.

We have no assets or operations independent of our subsidiaries, and there are no significant restrictions upon our ability to obtain funds from our subsidiaries by dividend or loan.

6 unchanged sentences

Maturities of long-term debt for each of the five succeeding years are as follows (in thousands):

Years Ending December 31,

Preferred Units and Warrants

Series A Preferred Unit and Warrant Private Placement

Year Ending December 31,

(11) Preferred Units

Preferred Unit and Warrant Private Placement

On the Transactions Date, we completed a private placement of $ 500 million in the aggregate of (i) newly authorized and established Preferred Units and (ii) warrants to purchase common units (the “Warrants”) pursuant to a Series A Preferred Unit and Warrant Purchase Agreement dated January 15, 2018, with certain investment funds managed or advised by EIG Global Energy Partners (collectively, the “Preferred Unitholders”).

We issued 500,000 Preferred Units with a face value of $ 1,000 per Preferred Unit and issued two tranches of Warrants to the Preferred Unitholders, which included Warrants to purchase 5,000,000 common units with a strike price of $ 17.03 per unit and 10,000,000 common units with a strike price of $ 19.59 per unit.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Warrant Purchase Agreement dated January 15, 2018, with certain investment funds managed or advised by EIG Global Energy Partners (collectively, the “Preferred Unitholders”).

The Warrants may be exercised by the holders thereof at any time beginning April 2, 2019 and before April 2, 2028.

On November 13, 2018, the Partnership filed a Registration Statement on Form S-3 to register 41,202,553 common units that are potentially issuable upon conversion of the Preferred Units and exercise of the Warrants.

3 unchanged sentences

We have declared and paid quarterly cash distributions per unit to our Preferred Unitholders of record as follows:

Distribution per Preferred Unit

Payment date Distribution per Preferred Unit

August 10, 2018 (1) $ 24.107

November 9, 2018 24.375

Total 2018 distributions $ 48.482

February 8, 2019 $ 24.375

May 10, 2019 24.375

August 9, 2019 24.375

November 8, 2019 24.375

Total 2019 distributions $ 97.500

February 7, 2020 $ 24.375

May 8, 2020 24.375

August 10, 2020 24.375

November 6, 2020 24.375

Total 2020 distributions $ 97.500

________________________

(1) Pro-rated initial distribution

13 unchanged sentences

Net income allocations increase the carrying value and declared distributions decrease the carrying value of the Preferred Units.

As the Preferred Units are not currently redeemable and it is not probable that they will become redeemable, adjustment to the initial carrying value is not necessary and would only be required if it becomes probable that the Preferred Units would become redeemable.

As the Preferred Units are not

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

currently redeemable and it is not probable that they will become redeemable, adjustment to the initial carrying value is not necessary and would only be required if it becomes probable that the Preferred Units would become redeemable.

Changes in the Preferred Units balance are summarized below (in thousands):

8 unchanged sentences

Balance at December 31, 2019 477,309

The Warrants are presented within the equity section of the Consolidated Balance Sheets in accordance with GAAP as they are indexed to the Partnership’s own stock and require physical settlement or net share settlement.

The Warrants were valued at issuance using the Black-Scholes-Merton model.

Net income allocated to Preferred Units

Cash distributions on Preferred Units

Balance at December 31, 2020 $ 477,309

Refer to Note 14 for information about the rights EIG Veteran Equity Aggregator, L.P.

1 unchanged sentence

(12) Partners’ Capital

Common and Class B Units

The change in common units and Class B Units outstanding were as follows:

Units outstanding

Common Class B

Number of units outstanding, December 31, 2018 89,983,790 6,397,965

2 unchanged sentences

Conversion of Class B Units to common units

6,397,965 ( 6,397,965 )

Number of units outstanding, December 31, 2019 96,631,976 —

Vesting of phantom units

Issuance of common units under the DRIP

Number of units outstanding, December 31, 2020 96,962,323 —

As of December 31, 2020, ETO held 46,056,228 common units, including 8,000,000 common units held by the General Partner and controlled by ETO.

USA Compression Holdings, which controlled the General Partner and its IDRs until the Transactions Date, sold all of its remaining common units during the year ended December 31, 2018.

The limited partners holding our common units have the following rights, among others:

10 unchanged sentences

Cash Distributions

As the USA Compression Predecessor is deemed to be the predecessor of the Partnership for financial reporting purposes, cash distributions made by the Partnership in periods prior to the Transactions Date are not included within the results of operations presented within the consolidated financial statements for the years ended December 31, 2018 and 2017 .

We have declared and paid quarterly distributions per unit to our limited partner unitholders of record, including holders of our common and phantom units, as follows (dollars in millions, except distribution per unit):

Distribution per

Payment Date Distribution per

Limited Partner

Amount Paid to

Unit Amount Paid to

Unitholders Amount Paid to

Unitholders Total

May 11, 2018 $ 0.525 $ 47.2 $ 0.4 $ 47.6

August 10, 2018 0.525 47.2 0.4 47.6

2 unchanged sentences

February 8, 2019 $ 0.525 $ 47.2 $ 0.7 $ 47.9

May 10, 2019 0.525 47.3 0.6 47.9

August 9, 2019 0.525 47.4 0.6 48.0

1 unchanged sentence

2019 total distributions $ 2.10 $ 192.6 $ 2.5 $ 195.1

February 7, 2020 $ 0.525 $ 50.7 $ 0.9 $ 51.6

May 8, 2020 0.525 50.8 0.9 51.7

August 10, 2020 0.525 50.9 0.8 51.7

November 6, 2020 0.525 50.9 0.7 51.6

Total 2020 distributions $ 2.10 $ 203.3 $ 3.3 $ 206.6

Announced Quarterly Distribution

1 unchanged sentence

The distribution was paid on February 5, 2021 to unitholders of record as of the close of business on January 25, 2021.

Distribution Reinvestment Plan

During the years ended December 31, 2019 and 2018 , distributions of $ 1.0 million and $ 0.6 million , respectively, were reinvested under the Distribution Reinvestment Plan (the “DRIP”) resulting in the issuance of 60,584 and 39,280 common units, respectively.

Earnings Per Unit

The computations of earnings per unit are based on the weighted average number of participating securities outstanding during the period.

Basic earnings per unit is determined by dividing net loss allocated to participating securities after deducting the amount distributed on Preferred Units, by the weighted average number of participating securities outstanding during the period.

During the years ended December 31, 2020, 2019 and 2018, distributions of $ 1.9 million, $ 1.0 million and $ 0.6 million, respectively, were reinvested under the DRIP resulting in the issuance of 188,695 , 60,584 and 39,280 common units, respectively.

On August 5, 2020, we filed a registration statement on Form S-3 for the issuance of up to 5,000,000 units under the DRIP.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

As of December 31, 2020 and December 31, 2019, we had two tranches of warrants outstanding, which includes warrants to purchase (i) 5,000,000 common units with a strike price of $ 17.03 per common unit and (ii) 10,000,000 common units with a strike price of $ 19.59 per common unit.

The Warrants may be exercised by the holders at any time before April 2, 2028.

The Warrants were valued at issuance using the Black-Scholes-Merton model.

Loss Per Unit

The computations of loss per unit are based on the weighted average number of participating securities outstanding during the period.

Basic loss per unit is determined by dividing net income (loss) allocated to participating securities after deducting the amount distributed on Preferred Units, by the weighted average number of participating securities outstanding during the period.

Net loss attributable to unitholders is allocated to participating securities based on their respective shares of the distributed and undistributed earnings for the period.

4 unchanged sentences

For the years ended December 31, 2020, 2019 and 2018, approximately 634,000 , 290,000 and 208,000 incremental unvested phantom units, respectively, were excluded from the calculation of diluted earnings per unit because the impact was anti-dilutive.

Our outstanding

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

warrants are not applicable to the computation as they are not considered “in the money” for the years ended December 31, 2019 or 2018 .

Earnings per unit is not applicable to the USA Compression Predecessor for the year ended December 31, 2017 as the USA Compression Predecessor had no outstanding common units prior to the Transactions.

Our outstanding warrants are not applicable to the computation as they are not considered “in the money” for the years ended December 31, 2020, 2019 or 2018.

(13) Revenue Recognition

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied;

generally this occurs with the transfer of our services or goods.

Revenue is measured at the amount of consideration we expect to receive in exchange for providing services or transferring goods.

Sales taxes incurred on behalf of, and passed through to, customers are excluded from revenue.

Incidental items, if any, that are immaterial in the context of the contract are recognized as expense.

Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

On January 1, 2018, we adopted ASC Topic 606 Revenue from Contracts with Customers (“ASC Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018.

Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606, while 2017 amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605.

We identified no material impact on our historical revenues upon initial application of ASC Topic 606, and as such have not recognized any cumulative catch-up effect to the opening balance of our partners’ capital as of January 1, 2018.

Additionally, the application of ASC Topic 606 has no material impact on any current financial statement line items.

The following table disaggregates our revenue by type of service (in thousands):

Year Ended December 31,

2020 2019 2018

Contract operations revenue

$ 656,616 $ 681,472 $ 563,416

Retail parts and services revenue

11,067 16,893 20,936

Total revenues

$ 667,683 $ 698,365 $ 584,352

As noted above, 2017 amounts have not been adjusted under the modified retrospective method of ASC Topic 606.

The following table disaggregates our revenue by timing of provision of services or transfer of goods (in thousands):

Year Ended December 31,

Services provided or goods transferred at a point in time

2020 2019 2018

Services provided over time:

Primary term $ 458,479 $ 434,705 $ 288,299

Month-to-month 198,137 246,767 275,117

Total services provided over time 656,616 681,472 563,416

Services provided or goods transferred at a point in time 11,067 16,893 20,936

Total revenues $ 667,683 $ 698,365 $ 584,352

_______________________________

As noted above, 2017 amounts have not been adjusted under the modified retrospective method of ASC Topic 606.

Contract operations revenue

1 unchanged sentence

Initial contract terms typically range from six months to five years , however we usually continue to provide compression services at a specific location beyond the initial contract term, either through contract renewal or on a month-to-month or longer basis.

We primarily enter into fixed-fee contracts whereby our customers are required to pay our monthly fee even during periods of limited or disrupted throughput.

Services are generally billed monthly, one month in advance of the commencement of the service month, except for certain customers who are

We primarily enter into fixed-fee

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

billed at the beginning of the service month, and payment is generally due 30 days after receipt of our invoice.

contracts whereby our customers are required to pay our monthly fee even during periods of limited or disrupted throughput.

Services are generally billed monthly, one month in advance of the commencement of the service month, except for certain customers who are billed at the beginning of the service month, and payment is generally due 30 days after receipt of our invoice.

Amounts invoiced in advance are recorded as deferred revenue until earned, at which time they are recognized as revenue.

19 unchanged sentences

Our standard contracts do not usually include material variable or non-cash consideration.

Contract assets and trade accounts receivable

Contract Assets

We record contract assets when we have completed performance under a contract but our right to consideration is not yet unconditional.

We had no contract assets as of December 31, 2020 or 2019.

There were no significant changes to our trade accounts receivable balances due to contract modifications or adjustments, or changes in time frame for a right to consideration to become unconditional during December 31, 2019 or 2018 .

Deferred Revenue

5 unchanged sentences

$ 55,402 $ 56,246

All current deferred revenue as of December 31, 2018 was recognized during the year ended December 31, 2019 .

________________________

(1) We recognized $ 45.8 million of revenue during the year ended December 31, 2020 related to our deferred revenue balance as of December 31, 2019.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

The increase in the deferred revenue balance as of December 31, 2019 is primarily driven by an increase in cash payments received or due in advance of satisfying our performance obligations under contracts as compared to 2018.

There was no significant change to our deferred revenue balance as a result of changes in time frame for a performance obligation to be satisfied during the periods presented.

Performance Obligations

1 unchanged sentence

We expect to recognize these remaining performance obligations as follows (in thousands):

2021 2022 2023 2024 2025 Total

Remaining performance obligations

$ 284,449 $ 114,769 $ 47,954 $ 16,442 $ 259 $ 463,873

(14) Transactions with Related Parties

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Related party revenues

The USA Compression Predecessor also provided compression services to entities affiliated with ETO.

During the year ended December 31, 2017 , the USA Compression Predecessor recognized $ 17.2 million in revenue from such affiliated entities.

The following table summarizes accounts receivable from and accounts payable to ETO on our consolidated balance sheets (in thousands):

Related party receivables (1)

Related party payables (2)

$ 12,372 $ 19,967 $ 17,054

Related party receivables as of December 31, 2019 and 2018 from ETO included $ 44.9 million related to indemnification for sales tax contingencies incurred by the USA Compression Predecessor.

We had $ 0.1 million and $ 0.5 million within related party receivables on our consolidated balance sheets as of December 31, 2020 and December 31, 2019, respectively, from such affiliated ETO entities.

Additionally, the Partnership had a $ 44.9 million related party receivable from ETO as of December 31, 2020 and December 31, 2019 related to indemnification for sales tax contingencies incurred by the USA Compression Predecessor.

See Note 17 for more information related to such sales tax contingencies.

Related party payables are included in accounts payable on our consolidated balance sheets.

ETO provided certain benefits to the USA Compression Predecessor employees which did not continue following the Transactions Date.

ETO provided medical, dental and other healthcare benefits to the USA Compression Predecessor employees.

The total amount incurred by ETO for the benefit of the USA Compression Predecessor employees for the years ended December 31, 2018 and 2017 was $ 1.9 million and $ 7.4 million , respectively, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate.

The total amount incurred by ETO for the benefit of the USA Compression Predecessor employees for the year ended December 31, 2018 was $ 1.9 million, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate.

ETO also provided a matching contribution to the USA Compression Predecessor employees’ 401(k) accounts.

The total amount of matching contributions incurred for the benefit of the USA Compression Predecessor employees for the years ended December 31, 2018 and 2017 was $ 0.9 million and $ 3.0 million , respectively, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate.

The total amount of matching contributions incurred for the benefit of the USA Compression Predecessor employees for the year ended December 31, 2018 was $ 0.9 million, which was allocated to the USA Compression Predecessor and recorded in operation and maintenance and general and administrative expenses, as appropriate.

ETO also provided a 3 % profit sharing contribution to the 401(k) accounts for all USA Compression Predecessor employees with base compensation below a specified threshold.

The contribution was in

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

addition to the 401(k) matching contribution and employees became vested in the profit sharing contribution based on years of service.

The contribution was in addition to the 401(k) matching contribution and employees became vested in the profit sharing contribution based on years of service.

ETO allocated certain overhead costs associated with general and administrative services, including salaries and benefits, facilities, insurance, information services, human resources and other support departments to the USA Compression Predecessor which did not continue following the Transactions Date.

2 unchanged sentences

However, the allocations may not fully reflect the expenses that would have been incurred had the USA Compression Predecessor been a standalone company during the periods presented.

During the years ended December 31, 2018 and 2017 , ETO allocated general and administrative expenses of $ 1.8 million and $ 3.6 million , respectively, to the USA Compression Predecessor.

During the year ended December 31, 2018, ETO allocated general and administrative expenses of $ 1.8 million to the USA Compression Predecessor.

Pursuant to that certain Board Representation Agreement entered into by us, the General Partner, ET LP and EIG in connection with our private placement of Preferred Units and Warrants to EIG, EIG Management Company, LLC has the right to designate one of the members of the Board for so long as the holders of the Preferred Units hold more than 5 % of the Partnership’s outstanding common units in the aggregate (taking into account the common units that would be issuable upon conversion of the Preferred Units and exercise of the Warrants).

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

(15) Unit-Based Compensation

1 unchanged sentence

In connection with the Partnership’s initial public offering in January 2013, the board of directors of the General Partner (the “Board”) adopted the USA Compression Partners, LP 2013 Long-Term Incentive Plan (“LTIP”) for certain employees, consultants and directors of the General Partner and any of its affiliates who perform services for us.

The LTIP provides for awards of unit options, unit appreciation rights, restricted units, phantom units, distribution equivalent rights (“DERs”), unit awards, profits interest units and other unit-based awards.

The LTIP provides for awards of unit options, unit appreciation rights, restricted units, phantom units, DERs, unit awards, profits interest units and other unit-based awards.

On November 1, 2018 and effective the same day, the Board approved and adopted The First Amendment to the LTIP which, among other things, increased the number of common units of the Partnership available to be awarded under the LTIP by 8,590,000 common units (which brought the total number of common units available to be awarded under the LTIP to 10,000,000 common units) and extended the term of the LTIP until November 1, 2028.

10 unchanged sentences

Each phantom unit is granted in tandem with a corresponding DER, which entitles the recipient to receive an amount in cash on a quarterly basis equal to the product of (a) the number of the recipient’s outstanding, unvested phantom units on the record date for such quarter and (b) the quarterly distribution declared by the Board for such quarter with respect to the Partnership’s common units.

During the year ended December 31, 2019 and the period from the Transactions Date to December 31, 2018, an aggregate of 717,869 and 1,136,447 , respectively, phantom units (including the corresponding DERs) were granted under the LTIP to the General Partner’s executive officers and certain of its employees and independent directors.

During the years ended December 31, 2020 and 2019, and the period from the Transactions Date to December 31, 2018, an aggregate of 741,963 , 717,869 and 1,136,447 , respectively, phantom units (including the corresponding DERs) were granted under the LTIP to the General Partner’s executive officers and certain of its employees and independent directors.

The phantom units (including the corresponding DERs) awarded are subject to restrictions on transferability, customary forfeiture provisions and time vesting provisions.

1 unchanged sentence

Phantom unit awards that were granted to employees of USAC Management prior to July 30, 2018 vest evenly over a three-year service period.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Phantom units granted prior to July 30, 2018 vest in full in the event of a change in control followed by a termination of employment, and phantom units granted on or after July 30, 2018 vest in full upon a change in control.

8 unchanged sentences

All unit-based compensation awards were treated as equity within the USA Compression Predecessor financial statements.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

The unit and per-unit amounts disclosed in the remainder of this note for periods prior to the Transactions Date reflect amounts related to ETO.

5 unchanged sentences

During the years ended December 31, 2020, 2019 and 2018, we recognized $ 8.4 million, $ 10.8 million and $ 11.7 million of compensation expense associated with these awards, respectively, recorded in selling, general and administrative expense.

During the years ended December 31, 2019 and 2018 , amounts paid related to the cash settlement of vested awards under the LTIP were $ 1.7 million and $ 4.4 million , respectively.

During the year ended December 31, 2017 , amounts paid related to the cash settlement of vested awards by the USA Compression Predecessor were $ 0.6 million .

The total fair value and intrinsic value of the phantom units vested under the LTIP was $ 4.6 million and $ 9.7 million for the year ended December 31, 2019 and for the period from the Transactions Date to December 31, 2018, respectively, and $ 1.6 million during the year ended December 31, 2017 .

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

During the years ended December 31, 2020, 2019 and 2018, amounts paid related to the cash settlement of vested awards under the LTIP were $ 1.1 million, $ 1.7 million and $ 4.4 million, respectively.

The total fair value and intrinsic value of the phantom units vested under the LTIP was $ 1.7 million, $ 4.6 million and $ 9.7 million for the years ended December 31, 2020 and 2019, and for the period from the Transactions Date to December 31, 2018, respectively.

The following table summarizes information regarding phantom unit awards for the periods presented:

Number of Units

Weighted-Average

Number of Units Weighted-Average

Grant Date Fair

1 unchanged sentence

USA Compression Predecessor's phantom units outstanding at December 31, 2017 324,922 $ 27.10

USA Compression Predecessor's phantom units outstanding at December 31, 2017

Forfeited upon change in control, April 2, 2018

( 324,922 ) 27.10

Assumed upon change in control, April 2, 2018 (1)

1,010,522 14.24

1,136,447 15.47

( 571,892 ) 14.79

Forfeited (1)

( 144,013 ) 17.85

Phantom units outstanding at December 31, 2018 1,431,064 $ 14.98

717,869 15.88

( 301,329 ) 13.06

( 45,620 ) 16.78

Phantom units outstanding at December 31, 2019 1,801,984 $ 15.09

741,963 12.55

( 223,658 ) 17.27

( 182,332 ) 15.36

Phantom units outstanding at December 31, 2020 2,137,957 $ 14.88

________________________

(1) Following the Transactions Date, the outstanding unvested phantom units granted by the USA Compression Predecessor were forfeited and the outstanding unvested phantom units granted by the Partnership prior to the Transactions Date were maintained.

7 unchanged sentences

The plan provides for discretionary matching contributions by us on an annual basis.

Aggregate matching contributions made to employees’ 401(k) plans were $ 3.4 million for the year ended December 31, 2019 and $ 3.2 million for the year ended December 31, 2018 , including $ 0.9 million made by ETO to employees of the USA Compression Predecessor prior to the Transactions Date.

Aggregate matching contributions made to employees’ 401(k) plans were $ 3.4 million and $ 3.4 million for the

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

years ended December 31, 2020 and 2019, and $ 3.2 million for the year ended December 31, 2018, including $ 0.9 million made by ETO to employees of the USA Compression Predecessor prior to the Transactions Date.

Refer to Note 14 for information about the 401(k) plan provided by ETO to employees of the USA Compression Predecessor.

(17) Commitments and Contingencies

Major Customers

Neither we nor the USA Compression Predecessor had revenue from any single customer representing 10% or more of total revenue for the years ended December 31, 2019 , 2018 or 2017 .

(a) Major Customers

We did not have revenue from any single customer representing 10% or more of total revenue for the years ended December 31, 2020, 2019 or 2018.

As of December 31, 2020, two customers accounted for 13 % and 11 % of our trade account receivables, net balance, respectively.

As of December 31, 2019, no single customer accounted for 10% or more of our trade accounts receivables, net balance.

(b) Litigation

From time to time, we and our subsidiaries may be involved in various claims and litigation arising in the ordinary course of business.

In management’s opinion, the resolution of such matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

Equipment Purchase Commitments

Our future capital commitments are comprised of binding commitments under purchase orders for new compression units ordered but not received.

The commitments as of December 31, 2019 were $ 49.3 million , all of which is expected to be settled within the next twelve months.

Sales Tax Contingencies

Our compliance with state and local sales tax regulations is subject to audit by various taxing authorities.

The Office of the Texas Comptroller of Public Accounts (“Comptroller”) has claimed that specific operational processes, which we and others in our industry regularly conduct, result in transactions that are subject to state sales taxes.

We and other companies in our industry have disputed these claims based on existing tax statutes which provide for manufacturing exemptions on the transactions in question.

The manufacturing exemptions are based on the fact that our natural gas compression equipment is used in the process of treating natural gas for ultimate use and sale.

Certain taxing authorities have either claimed or issued an assessment that specific operational processes, which we and other companies in our industry regularly conduct, result in transactions that are subject to state sales taxes.

We and other companies in our industry have disputed these claims and assessments based on either existing tax statutes or published guidance by the taxing authorities.

We are currently in discussions with the Oklahoma Tax Commission (“OTC”) regarding its assessment.

We believe it is reasonably possible that we could incur losses related to this assessment depending on whether the OTC accepts our position that the transactions are not taxable and we ultimately lose any and all subsequent legal challenges to such determination by the OTC.

We estimate that the range of losses we could incur is from $ 0.0 million to approximately $ 20.0 million, including penalty and interest.

The upper end of this range assumes that all compression services in Oklahoma are taxable, which we believe is remote.

The USA Compression Predecessor has several open audits with the Comptroller for certain periods prior to the Transactions Date wherein the Comptroller has challenged the applicability of the manufacturing exemption.

1 unchanged sentence

As of December 31, 2020 and 2019, we have recorded a $ 44.9 million accrued liability and $ 44.9 million related party receivable from ETO.

During January 2020, we entered into a compromise and settlement agreement with the Comptroller for the audit of the USA Compression Predecessor for the period from August 2006 to December 2007 for $ 4.0 million to be paid by the USA Compression Predecessor’s former owner.

As of December 31, 2019 , we have recorded a $ 4.0 million asset from the USA Compression Predecessor’s former owner in other accounts receivable and a $ 4.0 million liability in accrued liabilities in our consolidated balance sheets.

The payment was made in February 2020.

Self-Insurance

Effective January 1, 2019, we became self-insured for medical claims up to certain stop loss limits.

Liabilities are accrued for self-insured claims when sufficient information is available to reasonably estimate the amount of the loss.

As of December 31, 2019 , we have recorded a $ 0.6 million accrued liability.

Environmental

During January 2020, we entered into a compromise and settlement agreement with the Comptroller for the audit of the USA Compression Predecessor for the period from August 2006 to December 2007 for $ 4.0 million, which was paid by the USA Compression Predecessor’s former owner in February 2020.

As of December 31, 2019, we recorded a $ 4.0 million asset from the USA Compression Predecessor’s former owner in other accounts receivable and a $ 4.0 million liability in accrued liabilities in our consolidated balance sheets.

(d) Environmental

The Partnership’s operations are subject to federal, state and local laws and rules and regulations regarding water quality, hazardous and solid waste management, air quality control and other environmental matters.

3 unchanged sentences

These evolving laws and regulations and claims for damages to property, employees, other persons and the environment resulting from current or past operations may result in significant expenditures and liabilities in the future.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC Topic 326”):

Measurement of Credit Losses on Financial Instruments .

The amendments to ASC Topic 326 require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets.

The amendments in this update are effective for interim and annual periods beginning after January 1, 2020, with early adoption permitted by one year.

We adopted this new standard on January 1, 2020 and our adoption of this standard did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“ASC Topic 820”):

Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement .

The amendments to ASC Topic 820 eliminate, add and modify certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project.

The amendments in this update are effective for interim and annual periods beginning on January 1, 2020, with early adoption permitted.

We adopted this new standard on January 1, 2020 and the impact to our disclosures will not be material and there was no impact to our consolidated financial statements.

USA COMPRESSION PARTNERS, LP

Notes to Consolidated Financial Statements

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (“ASC Subtopic 350-40”):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract .

The amendments to ASC Subtopic 350-40 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).

The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments to ASC Subtopic 350-40.

The amendments in this update are effective for interim and annual periods beginning on January 1, 2020, with early adoption permitted.

The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.

We adopted this new standard, on a prospective basis, on January 1, 2020 and our adoption of this standard did not have a material impact on our consolidated financial statements.

(18) Recent Accounting Pronouncements

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (“Topic 848”):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

The amendment to Topic 848 provides relief from certain contract modification accounting requirements for the transition away from LIBOR and certain other reference rates.

Adoption of the amendments in this update are optional, effective upon issuance and may be adopted during any interim or annual period through December 31, 2022.

Modifications to our Credit Agreement during the effective period of this amendment will be assessed and if the modifications meet the criteria for the optional expedients and exceptions, we intend to adopt Topic 848 and apply the amendments as applicable.

In August 2020, FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

ASU 2020-06 changes how entities account for convertible instruments and contracts in an entity’s own equity, as well as updates guidance on earnings per unit and other related disclosures.

The amendments in this update are effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020.

We are currently evaluating the impact, if any, of the amendments to ASU 2020-06 on our consolidated financial statements.

Supplemental Selected Quarterly Financial Data

In the opinion of our management, the summarized quarterly financial data below (in thousands, except per unit amounts) contains all appropriate adjustments, all of which are normally recurring adjustments, considered necessary to present fairly our financial position and the results of operations for the respective periods.

September 30,

Gross profit (1)

Net income (loss) attributable to common and Class B unitholders’ interests

Net income (loss) per common unit – basic and diluted

Net loss per Class B Unit – basic and diluted

September 30,

Gross profit (1)

March 31, June 30, September 30, December 31,

2020 (1) 2020 2020 2020

$ 178,999 $ 168,651 $ 161,666 $ 158,367

Operating income (loss) $ ( 569,710 ) $ 34,894 $ 38,771 $ 31,193

Net income (loss) $ ( 602,461 ) $ 2,684 $ 6,519 $ ( 1,474 )

Net loss attributable to common and Class B unitholders’ interests

Net loss attributable to common unitholders’ interests $ ( 614,648 ) $ ( 9,504 ) $ ( 5,669 ) $ ( 13,661 )

Net loss per common unit – basic and diluted $ ( 6.36 ) $ ( 0.10 ) $ ( 0.06 ) $ ( 0.14 )

March 31, June 30, September 30, December 31,

2019 2019 2019 2019

$ 170,746 $ 173,675 $ 175,756 $ 178,188

Operating income $ 35,528 $ 42,891 $ 46,164 $ 43,801

Net income $ 6,587 $ 9,949 $ 13,315 $ 9,281

Net income (loss) attributable to common and Class B unitholders’ interests

$ ( 5,600 ) $ ( 2,239 ) $ 1,127 $ ( 2,906 )

Net income (loss) per common unit – basic and diluted

$ ( 0.02 ) $ 0.01 $ 0.02 $ ( 0.03 )

Net loss per Class B Unit – basic and diluted

$ ( 0.55 ) $ ( 0.51 ) $ ( 0.47 ) $ —

Gross profit is defined as revenue less cost of operations, exclusive of depreciation and amortization expense.

Earnings per unit is not applicable to the USA Compression Predecessor for periods prior to the Transactions Date as the USA Compression Predecessor had no outstanding common units prior to the Transactions.

________________________

(1) During the three months ended March 31, 2020, we recognized a $ 619.4 million impairment of goodwill.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures