What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-31 compared with 2023-08-01 · 108 added, 64 removed, 452 unchanged (28% of the section changed)

2 unchanged sentences

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

(in thousands, except unit amounts)

September 30,

2023 December 31,

36 unchanged sentences

(in thousands, except per unit amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

30 unchanged sentences

(in thousands, except per unit amounts)

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Common units Warrants Total

13 unchanged sentences

Partners’ capital (deficit) ending balance, June 30, 2023 ( 217,002 ) 8,812 ( 208,190 )

For the Six Months Ended June 30, 2022

Distributions and DERs, $ 0.525 per unit

( 51,628 ) — ( 51,628 )

Issuance of common units under the DRIP 414 — 414

Unit-based compensation for equity classified awards 69 — 69

Net income attributable to common unitholders’ interests 8,714 — 8,714

Partners’ capital (deficit) ending balance, September 30, 2023

$ ( 259,433 ) $ 8,812 $ ( 250,621 )

For the Nine Months Ended September 30, 2022

Common units Warrants Total

14 unchanged sentences

Partners’ capital (deficit) ending balance, June 30, 2022 ( 20,877 ) 8,812 ( 12,065 )

Vesting of phantom units 408 — 408

Distributions and DERs, $ 0.525 per unit

( 51,450 ) — ( 51,450 )

Issuance of common units under the DRIP 553 — 553

Unit-based compensation for equity classified awards 64 — 64

Net loss attributable to common unitholders’ interests ( 2,576 ) — ( 2,576 )

Partners’ capital (deficit) ending balance, September 30, 2022

$ ( 73,878 ) $ 8,812 $ ( 65,066 )

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

5 unchanged sentences

Unit-based compensation expense 17,652 9,716

Deferred income tax expense (benefit) 19 ( 183 )

Deferred income tax benefit ( 46 ) ( 216 )

Loss (gain) on disposition of assets ( 3,932 ) 1,970

17 unchanged sentences

Payments on revolving credit facility ( 631,305 ) ( 521,396 )

Cash paid related to net settlement of unit-based awards — ( 1,055 )

Cash distributions on common units ( 156,740 ) ( 155,554 )

3 unchanged sentences

Net cash used in financing activities ( 26,919 ) ( 92,070 )

Decrease in cash and cash equivalents ( 4 ) —

Increase (decrease) in cash and cash equivalents ( 29 ) 6

Cash and cash equivalents, beginning of period 35 —

24 unchanged sentences

In the opinion of our management, financial information presented herein reflects all normal recurring adjustments necessary for the fair presentation of these interim unaudited condensed consolidated financial statements in accordance with GAAP.

Operating results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with SEC rules and regulations.

Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, 2022, filed on February 14, 2023 (our “2022 Annual Report”).

Therefore, these interim unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements contained in our annual report on Form 10-K for the year ended December 31, 2022, filed on February 14, 2023 (our “2022 Annual Report”).

Use of Estimates

24 unchanged sentences

Capitalized interest is calculated by multiplying our monthly effective interest rate on outstanding variable-rate indebtedness by the amount of qualifying costs, which include upfront payments to acquire certain compression units.

Capitalized interest was $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2023, respectively, and $ 0.2 million and $ 0.3 million for the three and six months ended June 30, 2022, respectively.

Capitalized interest was $ 0.2 million and $ 0.8 million for the three and nine months ended September 30, 2023, respectively, and $ 0.3 million and $ 0.6 million for the three and nine months ended September 30, 2022, respectively.

Impairment of Long-Lived Assets

5 unchanged sentences

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 that 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 continue using.

Refer to Note 5 for more detailed information about impairment charges during the three and six months ended June 30, 2023, and 2022.

Refer to Note 5 for more detailed information about impairment charges during the three and nine months ended September 30, 2023, and 2022.

Identifiable Intangible Assets

26 unchanged sentences

Level 3 inputs are unobservable inputs for the asset or liability.

As of June 30, 2023, and December 31, 2022, our financial instruments primarily consisted of cash and cash equivalents, trade accounts receivable, trade accounts payable, long-term debt, and, as of June 30, 2023, a derivative instrument.

As of September 30, 2023, and December 31, 2022, our financial instruments primarily consisted of cash and cash equivalents, trade accounts receivable, trade accounts payable, long-term debt, and, as of September 30, 2023, a derivative instrument.

The book values of cash and cash equivalents, trade accounts receivable, and trade accounts payable are representative of fair value due to their short-term maturities.

3 unchanged sentences

The following table summarizes the aggregate principal amount and fair value of our Senior Notes 2026 and Senior Notes 2027 (in thousands):

September 30,

2023 December 31,

5 unchanged sentences

The following table summarizes the gross fair value of our interest-rate swap (in thousands):

September 30,

2023 December 31,

4 unchanged sentences

(3) Trade Accounts Receivable

The allowance for credit losses, which was $ 1.2 million at both June 30, 2023, and December 31, 2022, represents our best estimate of the amount of probable credit losses included within our existing accounts receivable balance.

For the three and six months ended June 30, 2022, we recognized reversals of $ 0.2 million and $ 0.7 million, respectively, to our provision for expected credit losses.

Favorable market conditions for customers, attributable to sustained increases in commodity prices, was the primary factor supporting the recorded decrease to the allowance for credit losses for the three and six months ended June 30, 2022.

The allowance for credit losses, which was $ 0.8 million and $ 1.2 million at September 30, 2023 and December 31, 2022, respectively, represents our best estimate of the amount of probable credit losses included within our existing accounts receivable balance.

The following summarizes activity within our trade accounts receivable allowance for credit losses balance (in thousands):

Allowance for Credit Losses

Balance as of December 31, 2022 $ 1,164

Write-offs charged against the allowance ( 462 )

Recoveries collected 82

Balance as of September 30, 2023 $ 784

For the nine months ended September 30, 2022, we recognized a reversal of $ 0.7 million to our provision for expected credit losses.

No change to our provision for expected credit losses was recognized for the three months ended September 30, 2022.

(4) Inventories

Components of inventories are as follows (in thousands):

September 30,

2023 December 31,

5 unchanged sentences

Property and equipment consisted of the following (in thousands):

September 30,

2023 December 31,

15 unchanged sentences

Depreciation expense on property and equipment and loss (gain) on disposition of assets were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

On a quarterly basis, we evaluate the future deployment of our idle fleet assets under current market conditions.

For the three and six months ended June 30, 2023, we retired 33 and 39 compression units, respectively, representing approximately 26,900 and 35,600 of aggregate horsepower, respectively, that previously were used to provide compression services in our business.

As a result, we recorded impairments of compression equipment of $ 10.3 million and $ 11.5 million for the three and six months ended June 30, 2023, respectively.

For the six months ended June 30, 2022, we retired 10 compression units representing approximately 1,400 of aggregate horsepower that previously were used to provide compression services in our business.

As a result, we recorded an impairment of compression equipment of $ 0.4 million for the six months ended June 30, 2022.

No impairment was recorded for the three months ended June 30, 2022.

For the three and nine months ended September 30, 2023, we retired three and 42 compression units, respectively, representing approximately 2,100 and 37,700 of aggregate horsepower, respectively, that previously were used to provide compression services in our business.

As a result, we recorded impairments of compression equipment of $ 0.9 million and $ 12.3 million for the three and nine months ended September 30, 2023, respectively.

For the three and nine months ended September 30, 2022, we retired two and 12 compression units, respectively, representing approximately 1,100 and 2,500 of aggregate horsepower, respectively, that previously were used to provide compression services in our business.

As a result, we recorded impairments of compression equipment of $ 0.5 million and $ 0.9 million for the three and nine months ended September 30, 2022, respectively.

The primary circumstances supporting these impairments were:

6 unchanged sentences

Amortization expense ( 19,579 ) ( 2,456 ) ( 22,035 )

Net balance as of June 30, 2023 $ 237,692 $ 22,650 $ 260,342

Accumulated amortization of intangible assets was $ 290.3 million and $ 275.6 million as of June 30, 2023, and December 31, 2022, respectively.

Net balance as of September 30, 2023 $ 231,165 $ 21,832 $ 252,997

Accumulated amortization of intangible assets was $ 297.7 million and $ 275.6 million as of September 30, 2023, and December 31, 2022, respectively.

(6) Other Current Liabilities

Components of other current liabilities included the following (in thousands):

September 30,

2023 December 31,

Accrued interest expense $ 6,799 $ 32,763

Accrued payroll and benefits 13,385 6,474

Accrued unit-based compensation liability 31,842 17,743

2 unchanged sentences

In April 2023, we entered into an interest-rate swap to manage interest-rate risk associated with the floating-rate Credit Agreement.

The interest-rate swap’s notional principal amount is $ 700 million and has a mandatory termination date in April 2025.

The interest-rate swap’s notional principal amount is $ 700 million and has a termination date in April 2025.

Under the interest-rate swap, we pay a fixed interest rate of 3.785 % and receive floating interest-rate payments that are indexed to the one-month SOFR.

We do not apply hedge accounting to our currently outstanding derivative.

Our derivative is carried on the unaudited condensed consolidated balance sheets at fair value and are classified as current or long-term depending on the expected timing of settlement, and gains and losses associated with the derivative instrument is recognized currently in gain on derivative instrument within the unaudited condensed consolidated statements of operations.

Our derivative is carried on the unaudited condensed consolidated balance sheets at fair value and is classified as current or long-term depending on the expected timing of settlement, and gains and losses associated with the derivative instrument are recognized currently in gain on derivative instrument within the unaudited condensed consolidated statements of operations.

Cash flows related to cash settlements for the periods presented are classified as operating activities within the unaudited condensed consolidated statements of cash flows.

The following table summarizes the location and fair value of our derivative instrument on our unaudited condensed consolidated balance sheets (in thousands):

Balance Sheet Classification June 30,

Balance Sheet Classification September 30,

2023 December 31,

2 unchanged sentences

The following table summarizes the location and amounts recognized related to our derivative instrument within our unaudited condensed consolidated statements of operations (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Income Statement Classification 2023 2022 2023 2022

2 unchanged sentences

Our long-term debt, of which there is no current portion, consisted of the following (in thousands):

September 30,

2023 December 31,

13 unchanged sentences

restricted subsidiaries (subject to customary exceptions).

As of June 30, 2023, we had outstanding borrowings under the Credit Agreement of $ 750.4 million, $ 849.6 million of availability and, subject to compliance with the applicable financial covenants, available borrowing capacity of $ 327.6 million.

Our weighted-average interest rate in effect for all borrowings under the Credit Agreement for the six months ended June 30, 2023, was 7.40 %, and our weighted-average interest rate under the Credit Agreement as of June 30, 2023, was 7.74 %.

There were no letters of credit issued under the Credit Agreement as of June 30, 2023.

As of September 30, 2023, we had outstanding borrowings under the Credit Agreement of $ 813.1 million, $ 786.9 million of availability and, subject to compliance with the applicable financial covenants, available borrowing capacity of $ 434.3 million.

Our weighted-average interest rate in effect for all borrowings under the Credit Agreement for the nine months ended September 30, 2023, was 7.57 %, and our weighted-average interest rate under the Credit Agreement as of September 30,

2023, was 7.99 %.

There were no letters of credit issued under the Credit Agreement as of September 30, 2023.

We pay an annualized commitment fee of 0.375 % on the unused portion of the aggregate commitment.

5 unchanged sentences

• a ratio of total secured indebtedness to EBITDA not greater than 3.0 to 1.0 or less than 0.0 to 1.0, determined as of the last day of each fiscal quarter, with EBITDA annualized for the most-recent fiscal quarter;

• a maximum funded debt-to-EBITDA ratio, determined as of the last day of each fiscal quarter with EBITDA annualized for the most-recent fiscal quarter, of (i) 5.50 to 1.00 through the third quarter of 2023 and (ii) 5.25 to 1.00 thereafter.

• a maximum funded debt-to-EBITDA ratio, defined in the Credit Agreement as the Total Leverage Ratio, determined as of the last day of each fiscal quarter with EBITDA annualized for the most-recent fiscal quarter, of (i) 5.50 to 1.00 through the third quarter of 2023 and (ii) 5.25 to 1.00 thereafter.

In addition, the Partnership may increase the applicable ratio by 0.25 for any fiscal quarter during which a Specified Acquisition (as defined in the Credit Agreement) occurs and for the following two fiscal quarters, but in no event shall the maximum ratio exceed 5.50 to 1.00 for any fiscal quarter as a result of such increase.

As of June 30, 2023, we were in compliance with all of our covenants under the Credit Agreement.

As of September 30, 2023, we were in compliance with all of our covenants under the Credit Agreement.

The Credit Agreement is a “revolving credit facility” that includes a lockbox 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.

4 unchanged sentences

The indenture governing the Senior Notes 2026 (the “2026 Indenture”) contains certain financial covenants that we must comply with in order to make certain restricted payments as described in the 2026 Indenture.

As of June 30, 2023, we were in compliance with such financial covenants under the 2026 Indenture.

As of September 30, 2023, we were in compliance with such financial covenants under the 2026 Indenture.

The Senior Notes 2026 are fully and unconditionally guaranteed (the “2026 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”).

6 unchanged sentences

The indenture governing the Senior Notes 2027 (the “2027 Indenture”) contains certain financial covenants that we must comply with in order to make certain restricted payments as described in the 2027 Indenture.

As of June 30, 2023, we were in compliance with such financial covenants under the 2027 Indenture.

As of September 30, 2023, we were in compliance with such financial covenants under the 2027 Indenture.

The Senior Notes 2027 are fully and unconditionally guaranteed (the “2027 Guarantees”), jointly and severally, on a senior unsecured basis by 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’, Finance Corp’s, and our existing and future senior indebtedness and senior to the Guarantors’, Finance Corp’s, and our future subordinated indebtedness, if any.

The Senior Notes 2027 and the 2027 Guarantees are general unsecured obligations and rank

equally in right of payment with all of the Guarantors’, Finance Corp’s, and our existing and future senior indebtedness and senior to the Guarantors’, Finance Corp’s, and our future subordinated indebtedness, if any.

The Senior Notes 2027 and the 2027 Guarantees effectively are subordinated in right of payment to all of the Guarantors’, Finance Corp’s, and our existing and future secured debt, including debt under the Credit Agreement and guarantees thereof, to the extent of the value of the assets securing such debt, and are structurally subordinate to all indebtedness of any of our subsidiaries that do not guarantee the Senior Notes 2027.

3 unchanged sentences

(9) Preferred Units

We had 500,000 Preferred Units outstanding as of June 30, 2023, and December 31, 2022, respectively, with a face value of $ 1,000 per Preferred Unit.

We had 500,000 Preferred Units outstanding as of September 30, 2023 and December 31, 2022, respectively, with a face value of $ 1,000 per Preferred Unit.

The Preferred Units rank senior to our common units with respect to distributions and liquidation rights.

9 unchanged sentences

May 5, 2023 24.375

August 4, 2023 24.375

Total 2023 distributions

Announced Quarterly Distribution

On July 13, 2023, we declared a cash distribution of $ 24.375 per unit on our Preferred Units.

The distribution will be paid on August 4, 2023, to the holders of the Preferred Units of record as of the close of business on July 24, 2023.

On October 12, 2023, we declared a cash distribution of $ 24.375 per unit on our Preferred Units.

The distribution will be paid on November 3, 2023, to the holders of the Preferred Units of record as of the close of business on October 23, 2023.

Changes in the Preferred Units’ balance are as follows (in thousands):

3 unchanged sentences

Cash distributions on Preferred Units ( 36,563 )

Balance as of June 30, 2023 $ 477,309

Balance as of September 30, 2023 $ 477,309

Redemption and Conversion Features

2 unchanged sentences

As of April 2, 2023, we have the option to redeem all or any portion of the Preferred Units then outstanding, subject to certain minimum redemption threshold amounts, for a redemption price set forth in the Partnership Agreement.

On or after April 2, 2028, each holder of the Preferred Units will have the right to require us to redeem all or a portion of their Preferred Units, subject to certain minimum redemption threshold amounts, for a redemption price set forth in the Partnership Agreement, which we may elect to pay up to 50 % in common units, subject to certain additional limits.

April 2, 2028, each holder of the Preferred Units will have the right to require us to redeem all or a portion of their Preferred Units, subject to certain minimum redemption threshold amounts, for a redemption price set forth in the Partnership Agreement, which we may elect to pay up to 50 % in common units, subject to certain additional limits.

(10) Partners’ Deficit

3 unchanged sentences

Issuance of common units under the DRIP 71,589

Number of common units outstanding, June 30, 2023 98,278,456

As of June 30, 2023, Energy Transfer held 46,056,228 common units, including 8,000,000 common units held by the General Partner and controlled by Energy Transfer.

Number of common units outstanding, September 30, 2023 98,299,245

As of September 30, 2023, Energy Transfer held 46,056,228 common units, including 8,000,000 common units held by the General Partner and controlled by Energy Transfer.

Cash Distributions

9 unchanged sentences

May 5, 2023 0.525 51.6 1.1 52.7

August 4, 2023 0.525 51.6 1.2 52.8

Total 2023 distributions

1 unchanged sentence

Announced Quarterly Distribution

On July 13, 2023, we announced a cash distribution of $ 0.525 per unit on our common units.

The distribution will be paid on August 4, 2023, to common unitholders of record as of the close of business on July 24, 2023.

During the six months ended June 30, 2023, distributions of $ 1.0 million were reinvested under the DRIP resulting in the issuance of 50,800 common units.

As of June 30, 2023, and December 31, 2022, we had warrants outstanding to purchase 10,000,000 common units with a strike price of $ 19.59 per common unit that may be exercised by the holders at any time prior to April 2, 2028.

On October 12, 2023, we announced a cash distribution of $ 0.525 per unit on our common units.

The distribution will be paid on November 3, 2023, to common unitholders of record as of the close of business on October 23, 2023.

During the nine months ended September 30, 2023, distributions of $ 1.5 million were reinvested under the DRIP resulting in the issuance of 71,589 common units.

As of September 30, 2023, and December 31, 2022, we had warrants outstanding to purchase 10,000,000 common units with a strike price of $ 19.59 per common unit that may be exercised by the holders at any time prior to April 2, 2028.

On April 27, 2022, a tranche of warrants with the right to purchase 5,000,000 common units with a strike price of $ 17.03 per common unit was exercised in full by the holders.

3 unchanged sentences

Basic income (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.

Income (loss) attributable to unitholders is allocated to participating securities based on their respective shares of the distributed and

undistributed earnings for the period.

Income (loss) attributable to unitholders is allocated to participating securities based on their respective shares of the distributed and undistributed earnings for the period.

To the extent cash distributions exceed net income (loss) attributable to unitholders for the period, the excess distributions are allocated to all participating securities outstanding based on their respective ownership percentages.

1 unchanged sentence

Unvested phantom units and unexercised warrants are not included in basic income (loss) per unit, as they are not considered to be participating securities, but are included in the calculation of diluted income (loss) per unit to the extent they are dilutive, and in the case of warrants to the extent they are considered “in the money.”

For the three months ended June 30, 2023, approximately 1,177,000 and 246,000 incremental unvested phantom units and “in the money” outstanding warrants, respectively, represent the difference between our basic and diluted weighted-average common units outstanding.

For the six months ended June 30, 2023, approximately 1,118,000 and 361,000 incremental unvested phantom units and “in the money” outstanding warrants, respectively, represent the difference between our basic and diluted weighted-average common units outstanding.

For the three and six months ended June 30, 2022, approximately 1,051,000 and 928,000 incremental unvested phantom units, respectively, were excluded from the calculation of diluted income (loss) per unit because the impact was anti-dilutive.

For the three and six months ended June 30, 2022, approximately 157,000 and 85,000 incremental “in the money” then-outstanding warrants, respectively, were excluded from the calculation of diluted income (loss) per unit because the impact was anti-dilutive.

Our outstanding warrants not “in the money” were excluded from the calculation for the three and six months ended June 30, 2022.

For the three months ended September 30, 2023, approximately 1,316,000 and 655,000 incremental unvested phantom units and “in the money” outstanding warrants, respectively, represent the difference between our basic and diluted weighted-average common units outstanding.

For the nine months ended September 30, 2023, approximately 1,185,000 and 460,000 incremental unvested phantom units and “in the money” outstanding warrants, respectively, represent the difference between our basic and diluted weighted-average common units outstanding.

For the three and nine months ended September 30, 2022, approximately 959,000 and 938,000 incremental unvested phantom units, respectively, were excluded from the calculation of diluted income (loss) per unit because the impact was anti-dilutive.

For the nine months ended September 30, 2022, approximately 57,000 incremental “in the money” then-outstanding warrants were excluded from the calculation of diluted income (loss) per unit because the impact was anti-dilutive.

Our outstanding warrants not “in the money” were excluded from the calculation for the three and nine months ended September 30, 2022.

(11) Revenue Recognition

1 unchanged sentence

The following table disaggregates our revenue by type of service (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

3 unchanged sentences

The following table disaggregates our revenue by timing of provision of services or transfer of goods (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

8 unchanged sentences

Components of deferred revenue were as follows (in thousands):

Balance sheet location June 30,

Balance sheet location September 30,

2023 December 31,

3 unchanged sentences

________________________________

(1) We recognized $ 3.9 million and $ 56.9 million of revenue during the three and six months ended June 30, 2023, respectively, related to our deferred revenue balance as of December 31, 2022.

(1) We recognized $ 1.2 million and $ 58.1 million of revenue during the three and nine months ended September 30, 2023, respectively, related to our deferred revenue balance as of December 31, 2022.

Performance Obligations

As of June 30, 2023, the aggregate amount of transaction price allocated to unsatisfied performance obligations related to our contract operations revenue was $ 814.4 million.

As of September 30, 2023, the aggregate amount of transaction price allocated to unsatisfied performance obligations related to our contract operations revenue was $ 964.7 million.

We expect to recognize these remaining performance obligations as follows (in thousands):

3 unchanged sentences

(12) Transactions with Related Parties

We provide natural gas compression and treating services to entities affiliated with Energy Transfer, which as of June 30, 2023, owned approximately 47 % of our limited partner interests and 100 % of the General Partner.

We provide natural gas compression and treating services to entities affiliated with Energy Transfer, which as of September 30, 2023, owned approximately 47 % of our limited partner interests and 100 % of the General Partner.

Revenue recognized from those entities affiliated with Energy Transfer on our unaudited condensed consolidated statements of operations were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Related-party revenues $ 5,216 $ 3,693 $ 15,759 $ 11,398

We had approximately $ 2.9 million and $ 52 thousand of related-party receivables on our unaudited condensed consolidated balance sheets as of June 30, 2023, and December 31, 2022, respectively, from those entities affiliated with Energy Transfer.

We had approximately $ 0.4 million and $ 52 thousand of related-party receivables on our unaudited condensed consolidated balance sheets as of September 30, 2023, and December 31, 2022, respectively, from those entities affiliated with Energy Transfer.

(13) Commitments and Contingencies

(a) Major Customers

One customer accounted for approximately 10 % of total revenues for the three and six months ended June 30, 2023.

No customer accounted for 10% or more of total revenues for the three and six months ended June 30, 2022.

One customer accounted for approximately 11 % of total revenues for the three and nine months ended September 30, 2023.

No customer accounted for 10% or more of total revenues for the three and nine months ended September 30, 2022.

(b) Litigation

3 unchanged sentences

Our future capital commitments are comprised of binding commitments under purchase orders for new compression units ordered but not received.

The commitments as of June 30, 2023, were $ 121.4 million, all of which is expected to be settled within the next twelve months and $ 95.7 million of which is expected to be settled by year-end 2023.

The commitments as of September 30, 2023, were $ 101.3 million, all of which is expected to be settled within the next twelve months and $ 63.0 million of which is expected to be settled by year-end 2023.

(d) Tax Contingencies

16 unchanged sentences

These evolving laws, rules, 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.

(14) Subsequent Events

Interest-rate Swap Modification

In October 2023, we modified our existing interest-rate swap to continue to manage interest-rate risk associated with the floating-rate Credit Agreement.

The notional principal amount under the modified interest-rate swap remains $ 700 million and the termination date was extended from April 1, 2025 to December 31, 2025.

Under the original interest-rate swap, we paid a fixed interest rate of 3.785 % and received floating interest rate payments that were indexed to the one-month SOFR.

Under the modified interest-rate swap, we pay a fixed interest rate of 3.9725 % and continue to receive floating interest rate payments that are indexed to the one-month SOFR.

Warrants Exercise

On October 27, 2023, the tranche of warrants with the right to purchase 10,000,000 common units with a strike price of $ 19.59 per common unit was exercised in full by the holders.

The exercise of the warrants will be net settled by the Partnership for approximately 2,360,000 common units.

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-Q

Item 1. Financial Statements