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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-05 · 148 added, 186 removed, 234 unchanged (59% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

USA Compression Partners, LP (the “Partnership”) is a Delaware limited partnership that operates as one of the nation’s largest independent providers of natural gas compression services in terms of total compression fleet horsepower.

We are managed by our general partner, USA Compression GP, LLC (the “General Partner”), which is wholly owned by Energy Transfer.

All references in this section to the Partnership, as well as the terms “our,” “we,” “us,” and “its” refer to USA Compression Partners, LP, together with its consolidated subsidiaries, unless the context otherwise requires or where otherwise indicated.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

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Many of these statements can be identified by words such as “believe,” “expect,” “intend,” “project,” “anticipate,” “estimate,” “continue,” “if,” “outlook,” “will,” “could,” “should,” or similar words or the negatives thereof.

Known material factors that could cause our actual results to differ from those represented within these forward-looking statements are described in Part I, Item 1A “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2024, filed on February 11, 2025 (our “2024 Annual Report”), Part II, Item 1A.

“Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, as well as our subsequent filings with the SEC.

Known material factors that could cause our actual results to differ from those represented within these forward-looking statements are described in Part I, Item 1A “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2025, filed on February 17, 2026 (our “2025 Annual Report”), as well as our subsequent filings with the SEC.

Important factors that could cause our actual results to differ materially from the expectations reflected in these forward-looking statements include, among other things:

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• changes in the long-term supply of and demand for crude oil and natural gas;

• our ability to realize the anticipated benefits of the J-W Power Acquisition (as defined below) and to integrate the acquired assets with our existing fleet and operations;

• competitive conditions in our industry, including competition for employees in a tight labor market;

• our ability to realize the anticipated benefits of the shared services integration with Energy Transfer;

• changes in the availability and cost of capital, including changes to interest rates;

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• operating hazards, natural disasters, epidemics, pandemics, weather-related impacts, casualty losses, and other matters beyond our control;

• the macroeconomic, regulatory or other potential effects of a prolonged government shutdown;

• the deterioration of the financial condition of our customers, which may result in the initiation of bankruptcy proceedings with respect to certain customers;

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• information technology risks including the risk from cyberattacks, cybersecurity breaches, and other disruptions to our information systems;

• our ability to realize the anticipated benefits of the shared services integration with Energy Transfer;

• the effects of existing and future laws and governmental regulations;

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Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

All subsequent written and

oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

We are managed by our general partner, USA Compression GP, LLC (the “General Partner”), which is wholly owned by Energy

Recent Developments

On January 12, 2026 (the “J-W Acquisition Date”), the Partnership and USA Compression Partners, LLC, a wholly owned subsidiary of the Partnership, completed the acquisition of J-W Energy Company (“J-W Energy”) and its subsidiary, J-W Power Company (“J-W Power”), pursuant to which USA Compression Partners, LLC purchased all of the issued and outstanding capital stock of J-W Energy from Westerman, Ltd.

(the “J-W Power Acquisition”).

The J-W Power Acquisition had an initial purchase price of $860 million, which after accounting for our common unit price and certain purchase price adjustments, resulted in an aggregate payment of approximately $911.6 million, consisting of (i) approximately $455.0 million in cash and (ii) 18,175,323 common units in the Partnership, which had a fair value of approximately $456.6 million on the J-W Acquisition Date, subject to customary post-closing price adjustments.

Upon consummation of the J-W Power Acquisition, J-W Power and J-W Energy became consolidated subsidiaries of the Partnership.

The J-W Power Acquisition added approximately 0.8 million active horsepower and 1.0 million total horsepower to our fleet across key regions including the Northeast, Mid-Con, Rockies, Gulf Coast, Bakken and Permian Basin.

J-W Power also owns and operates specialized manufacturing facilities that support its internal compression requirements and those of third-party customers.

The results of operations of J-W Power and J-W Energy subsequent to the J-W Acquisition Date are reflected in our financial results of operations for the three months ended March 31, 2026.

Operating Highlights

The following table summarizes certain horsepower and horsepower-utilization percentages for the periods presented and excludes certain gas-treating assets for which horsepower is not a relevant metric.

Three Months Ended September 30, Increase (Decrease) Nine Months Ended September 30, Increase (Decrease)

2025 2024 2025 2024

Three Months Ended March 31, Increase (Decrease)

Fleet horsepower (at period end) (1)

4,930,737 3,859,920 27.7 %

Total available horsepower (at period end) (2)

5,012,892 3,885,560 29.0 %

Revenue-generating horsepower (at period end) (3)

4,439,968 3,559,624 24.7 %

Average revenue-generating horsepower (4)

4,438,366 3,557,164 24.8 %

Average revenue per revenue-generating horsepower per month (5)

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91.9 % 94.4 % (2.5) %

(1) Fleet horsepower is horsepower for compression units that have been delivered to us and excludes 14,985 and 23,030 of non-marketable horsepower as of September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had 28,900 large horsepower on order for delivery, all of which is expected to be delivered within the next 12 months.

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(1) Fleet horsepower is horsepower for compression units that have been delivered to us and excludes 14,985 and 13,210 of non-marketable horsepower as of March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had 61,350 large horsepower on order for delivery, all of which is expected to be delivered within the next 12 months.

(2) Total available horsepower is revenue-generating horsepower under contract for which we are billing a customer, horsepower in our fleet that is under contract but is not yet generating revenue, horsepower not yet in our fleet that is under contract but not yet generating revenue and that is expected to be delivered, and idle horsepower.

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(7) Horsepower utilization is calculated as (i) the sum of (a) revenue-generating horsepower, (b) horsepower in our fleet that is under contract but is not yet generating revenue, and (c) horsepower not yet in our fleet that is under contract but not yet generating revenue and that is expected to be delivered, divided by (ii) total available horsepower less idle horsepower that is under repair.

Horsepower utilization based on revenue-generating horsepower and fleet horsepower as of September 30, 2025 and 2024, was 92.0% and 92.4%, respectively.

Horsepower utilization based on revenue-generating horsepower and fleet horsepower as of March 31, 2026 and 2025, was 90.0% and 92.2%, respectively.

(8) Calculated as the average utilization for the months in the period based on utilization at the end of each month in the period.

Average horsepower utilization based on revenue-generating horsepower and fleet horsepower for the three months ended September 30, 2025 and 2024, was 91.8% and 92.3%, respectively.

Average horsepower utilization based on revenue-generating horsepower and fleet horsepower for the nine months ended September 30, 2025 and 2024, was 91.9% and 91.5%, respectively.

The 4.2% and 4.9% increases in average revenue per revenue-generating horsepower per month for the three and nine months ended September 30, 2025, respectively, compared to the three and nine months ended September 30, 2024, primarily was due to higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit.

The 2.7% decreases in revenue-generating compression units for both the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, primarily were due to (i) small-horsepower units coming off contract, offset by (ii) deployment of new and redeployment of previously idle large-horsepower units.

The 2.3% increases in average horsepower per revenue-generating compression unit for both the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, primarily was due to an increase in large-horsepower compression units deployed.

Average horsepower utilization based on revenue-generating horsepower and fleet horsepower for the three months ended March 31, 2026 and 2025, was 90.2% and 91.9%, respectively.

The 7.9% increase in average revenue per revenue-generating horsepower per month for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to the addition of higher revenue per-revenue generating horsepower acquired in the J-W Power Acquisition, which contributed 4.7% of the increase.

An additional 3.2% increase is attributable to higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit.

The 52.6% increase in revenue-generating compression units, 24.8% increase in average revenue-generating horsepower, and 24.7% increase in revenue-generating horsepower for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to the acquisition of approximately 2,070 revenue-generating compression units in the J-W Power Acquisition, with an additional increase due to the deployment of new and redeployment of previously idle compression units.

The 27.7% increase in fleet horsepower and 29.0% increase in total available horsepower for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to the acquisition of approximately 1.0 million total horsepower in the J-W Power Acquisition.

The 17.5% decrease in average horsepower per revenue-generating compression unit for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to the inclusion of a higher proportion of mid-size horsepower compression units from the J-W Power Acquisition.

The decreases in horsepower utilization and horsepower utilization based on revenue-generating horsepower and fleet horsepower were due to the J-W Power Acquisition.

Financial Results of Operations

Three months ended September 30, 2025, compared to the three months ended September 30, 2024

Three months ended March 31, 2026, compared to the three months ended March 31, 2025

The following table summarizes our results of operations for the periods presented (dollars in thousands):

Three Months Ended September 30, Increase (Decrease)

Three Months Ended March 31, Increase (Decrease)

Contract operations $ 293,509 $ 224,975 30.5 %

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Selling, general, and administrative 35,357 18,862 87.5 %

Loss (gain) on disposition of assets 830 (123) *

(Gain) loss on disposition of assets (545) 1,325 *

Impairment of assets 4 3,645 *

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Interest expense, net (48,966) (47,369) 3.4 %

Loss on derivative instrument — (6,218) *

Loss on extinguishment of debt (1) — *

Other 20 25 (20.0) %

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Contract operations revenue .

The $7.5 million increase in contract operations revenue for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to (i) a 4.2% increase in average revenue per revenue-generating horsepower per month as a result of higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit, partially offset by (ii) a $1.7 million decrease in contract operations revenue from existing customers acquired by Energy Transfer since the previous period that are now classified as related-party revenue in the current period and (iii) a $1.4 million decrease in revenue attributable to natural gas treating services.

The $68.5 million increase in contract operations revenue for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to a $60.3 million increase due to the J-W Power Acquisition with the remaining increase attributable to (i) an increase in average revenue per revenue-generating horsepower per month, which resulted from higher market-based rates on newly deployed and redeployed compression units and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit and (ii) an increase in average revenue-generating horsepower as a result of increased demand for our services, consistent with an overall increase in natural gas produced within the U.S.

Average revenue per revenue-generating horsepower per month associated with our compression services provided on a month-to-month basis did not differ significantly from the average revenue per revenue-generating horsepower per month associated with our compression services provided under contracts in their primary term during the period.

Parts and service revenue .

The $0.4 million decrease in parts and service revenue for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to a decrease in maintenance work performed on units outside the scope of our core maintenance activities and in directly reimbursable freight and crane charges that are the financial responsibility of the customers.

Demand for retail parts and services fluctuates from period to period based on varying customer needs.

The $16.8 million increase in parts and service revenue for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due to the additional revenue generated by the J-W Power Acquisition, including $11.7 million attributable to parts and service revenue earned on maintenance work performed on customer-owned equipment and $8.1 million attributable to manufacturing sales.

Related-party revenue .

Related-party revenue was earned through related-party transactions that occur in the ordinary course of business with various affiliated entities of Energy Transfer.

The $3.2 million increase in related-party revenue for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to revenue recognized from existing customers acquired by Energy Transfer since the previous period that are now classified as related-party revenue in the current period and an overall increase in compression services and parts and service revenue from entities affiliated with Energy Transfer.

Related-party revenue for the three months ended March 31, 2026 was consistent with the three months ended March 31, 2025.

Cost of operations, exclusive of depreciation and amortization .

The $4.9 million decrease in cost of operations, exclusive of depreciation and amortization, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to (i) a $4.7 million decrease in fluids expense driven by decreased pricing, (ii) a $2.9 million decrease in non-income taxes resulting from a prior year sales tax refund receipt, offset by (iii) a $1.9 million increase in direct labor costs due to increased operating headcount and higher employee costs, (iv) a $1.0 million increase in parts expense associated with higher cost and usage, and (v) a $0.7 million increase in retail parts and service expenses.

The $36.3 million increase in cost of operations, exclusive of depreciation and amortization, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to (i) a $40.1 million increase attributable to the J-W Power Acquisition, partially offset by (ii) a $1.4 million decrease in fluids expense and (iii) a $2.4 million decrease in part consumption.

Depreciation and amortization expense .

The $4.0 million increase in depreciation and amortization expense for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to overhauls and major improvements to compression units.

The $16.8 million increase in depreciation and amortization expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to (i) a $13.5 million increase resulting from the J-W Power Acquisition, and (ii) overhauls and major improvements to compression units.

Selling, general, and administrative expense .

The $1.3 million increase in selling, general, and administrative expense for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to (i) a $2.4 million increase in severance charges and other employee costs primarily related to the departure of certain senior management as well as retention and relocation payments related to the shared services integration during the current period, (ii) a $0.4 million increase in insurance and other administrative expenses and (iii) a $0.3 million increase in outside services and professional fees, partially offset by (iv) a $1.4 million decrease in unit-based compensation expense attributable to lower unit-based compensation expense resulting from the forfeiture and vesting of certain awards by certain former senior management and mark-to-market changes to our unit-based compensation liability that occurred as a result of changes to our per-unit trading price as of September 30, 2025 and (v) a $0.7 million decrease in employee related expenses due to decreased administrative headcount and lower employee costs.

The $16.5 million increase in selling, general, and administrative expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to (i) a $10.4 million increase related to the J-W Power Acquisition, (ii) a $3.8 million increase in transaction expenses related to the J-W Power Acquisition, and (iii) a $2.1 million increase in outside services and professional fees.

Impairment of assets .

The $0.6 million impairment of assets for the three months ended September 30, 2025 primarily resulted from our evaluation of the future deployment of our idle fleet under current market conditions.

The $4 thousand and $3.6 million impairment of assets for the three months ended March 31, 2026 and 2025, respectively, primarily resulted from our evaluation of the future deployment of our idle fleet under current market conditions.

The primary circumstances supporting this impairment were:

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These compression units were written down to their estimated salvage values, if any.

As a result of our evaluation during the three months ended September 30, 2025, we retired five compression units, with approximately 2,900 of aggregate horsepower, that previously were used to provide compression services in our business.

Interest expense, net .

The $2.3 million decrease in interest expense, net for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to lower weighted-average interest rates under the Credit Agreement and lower aggregate borrowings.

Loss on derivative instrument.

The $6.2 million loss on derivative instrument for the three months ended September 30, 2024, resulted from the change in fair value of the interest-rate swap due to changes in the interest-rate forward curve and cash received during the period.

This interest-rate swap was terminated in August 2024;

see Note 7 to our unaudited condensed consolidated financial statements in Part I, Item 1 “Financial Statements” of this report for additional information on this interest-rate swap and termination.

Income tax expense.

The $1.6 million increase in income tax expense for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was related to a charge of $1.9 million.

We believe that this amount, together with amounts previously accrued, is a reasonable estimate of the potential loss from the aggregate final imputed underpayment for the years 2019 and 2020 with the IRS.

See Note 13 to our unaudited condensed consolidated financial statements under Part I, Item 1 “Financial Statements” of this report for additional information regarding our IRS audit for the years 2019 and 2020.

Nine months ended September 30, 2025, compared to the nine months ended September 30, 2024

The following table summarizes our results of operations for the periods presented (dollars in thousands):

Nine Months Ended September 30, Increase (Decrease)

Contract operations $ 680,242 $ 662,265 2.7 %

Parts and service 16,971 17,043 (0.4) %

Related party 48,402 25,249 91.7 %

Total revenues 745,615 704,557 5.8 %

Costs and expenses:

Cost of operations, exclusive of depreciation and amortization 245,068 235,048 4.3 %

Depreciation and amortization 212,456 195,801 8.5 %

Selling, general, and administrative 48,452 52,364 (7.5) %

Loss on disposition of assets 2,194 1,113 *

Impairment of assets 7,509 311 *

Total costs and expenses 515,679 484,637 6.4 %

Operating income 229,936 219,920 4.6 %

Other income (expense):

Interest expense, net (142,109) (144,855) (1.9) %

Loss on debt extinguishment — (4,966) *

Gain on derivative instrument — 5,684 *

Other 65 83 (21.7) %

Total other expense (142,044) (144,054) (1.4) %

Net income before income tax expense 87,892 75,866 15.9 %

Income tax expense 4,333 1,728 150.8 %

Net income $ 83,559 $ 74,138 12.7 %

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* Not meaningful

Contract operations revenue.

The $18.0 million increase in contract operations revenue for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to (i) a 4.9% increase in average revenue per revenue-generating horsepower per month, as a result of higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit, (ii) a 1.0% increase in average revenue-generating horsepower as a result of increased demand for our services, commensurate with an overall increase in crude oil and natural gas produced within the U.S., partially offset by (iii) a $18.7 million decrease in contract operations revenue from existing customers acquired by Energy Transfer since the previous period that are now classified as related-party revenue in the current period and (iv) a $6.7 million decrease in revenue attributable to natural gas treating services.

Parts and service revenue .

The $0.1 million decrease in parts and service revenue for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to a decrease in maintenance work performed on units outside the scope of our core maintenance activities and in directly reimbursable freight and crane charges that are the financial responsibility of the customers.

Demand for retail parts and services fluctuates from period to period based on varying customer needs.

Related-party revenue .

Related-party revenue was earned through related-party transactions that occur in the ordinary course of business with various affiliated entities of Energy Transfer.

The $23.2 million increase in related-party revenue for the

nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to revenue recognized from existing customers acquired by Energy Transfer since the previous period that are now classified as related-party revenue in the current period.

Cost of operations, exclusive of depreciation and amortization .

The $10.0 million increase in cost of operations, exclusive of depreciation and amortization, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to (i) a $8.4 million increase in direct labor costs due to increased operating headcount associated with increased average revenue-generating horsepower and higher employee costs, (ii) a $6.2 million increase in parts expense resulting from higher costs and increased usage associated with increased average revenue-generating horsepower, (iii) a $2.2 million increase in retail parts and service expenses, for which a corresponding increase in parts and service revenue also occurred, offset by (iv) a $5.3 million decrease in fluids expense driven by decreased pricing and (v) a $2.8 million decrease in non-income taxes due to a prior year sales tax refund receipt.

Depreciation and amortization expense .

The $16.7 million increase in depreciation and amortization expense for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to overhauls and major improvements to compression units.

Selling, general, and administrative expense .

The $3.9 million decrease in selling, general, and administrative expense for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to (i) a $7.7 million decrease in unit-based compensation expense attributable to lower unit-based compensation expense resulting from the forfeiture and vesting of certain awards by certain former senior management and mark-to-market changes to our unit-based compensation liability that occurred as a result of changes to our per-unit trading price as of September 30, 2025, (ii) a $2.1 million decrease in employee related expenses due to decreased administrative headcount and lower employee costs, and (iii) a $0.6 million decrease in professional fees primarily related to an initiative to improve business performance, partially offset by (iv) a $4.2 million increase in severance charges and other employee costs primarily related to the departure of certain senior management as well as retention and relocation payments related to the shared services integration during the current period and (v) a $2.0 million increase in insurance and other administrative expenses.

Impairment of assets.

The $7.5 million and $0.3 million impairments of assets for the nine months ended September 30, 2025 and 2024, respectively, primarily resulted from our evaluation of the future deployment of idle fleet under current market conditions.

The primary circumstances supporting these impairments were:

(i) unmarketability of certain compression units into the foreseeable future, (ii) excessive maintenance costs associated with certain fleet assets, and (iii) prohibitive retrofitting costs that likely would prevent certain compression units from securing customer acceptance.

These compression units were written down to their estimated salvage values, if any.

As a result of our evaluations during the nine months ended September 30, 2025 and 2024, we retired 26 and two compression units, respectively, with approximately 19,000 and 1,300 aggregate horsepower, respectively, that previously were used to provide compression services in our business.

As a result of our evaluation during the three months ended March 31, 2026 and 2025, we retired one and 17 compression units, respectively, with approximately 335 and 10,200 of aggregate horsepower, respectively, that were previously used to provide compression services in our business.

Interest expense, net .

The $2.7 million decrease in interest expense, net for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to lower weighted-average interest rates under the Credit Agreement and decreased aggregate borrowings.

Loss on extinguishment of debt.

The $5.0 million loss on extinguishment of debt for the nine months ended September 30, 2024 resulted from the satisfaction and discharge of the Senior Notes 2026, which constituted a legal defeasance under GAAP (the “Defeasance”).

This loss consists of the write-off of deferred financing costs of $4.3 million and the difference between (i) the purchase price of U.S.

government securities of $748.8 million, which were used for the Defeasance, and (ii) the aggregate outstanding principal balance and accrued interest of the Senior Notes 2026 of $748.1 million at the time of Defeasance.

Gain on derivative instrument.

The $5.7 million gain on derivative instrument for the nine months ended September 30, 2024 resulted from the change in fair value of the interest-rate swap due to changes in the interest-rate forward curve and cash received during the period.

This interest-rate swap was terminated in August 2024;

The $2 million increase in interest expense, net for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to higher aggregate borrowings, offset by lower weighted-average interest rates under the Credit Agreement and our senior notes.

Income tax expense .

The $2.6 million increase in income tax expense for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was related to a charge of $2.9 million.

We believe that this amount is a reasonable estimate of the potential loss from the aggregate final imputed underpayment for the years 2019 and 2020 with the IRS.

The $2.6 million increase in income tax expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was related to additional taxes attributable to the J-W Power Acquisition.

For additional information on income tax expense, see Note 7 to our unaudited condensed consolidated financial statements in Part I, Item 1 “Financial Statements” of this report for additional information.

Other Financial Data

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Other Financial Data (1):

(1) Three Months Ended September 30, Increase (Decrease)

Nine Months Ended September 30, Increase (Decrease)

2025 2024 2025 2024

Three Months Ended March 31, Increase (Decrease)

Gross margin $ 126,227 $ 93,223 35.4 %

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Adjusted gross margin percentage (2)

64.4 % 66.7 % (2.3) %

Adjusted EBITDA $ 188,587 $ 149,514 26.1 %

Adjusted EBITDA percentage (2)

56.9 % 61.0 % (4.1) %

DCF $ 130,793 $ 88,695 47.5 %

DCF Coverage Ratio 1.61 x 1.41 x 14.2 % 1.48 x 1.41 x 5.0 %

DCF Coverage Ratio 1.72 x 1.44 x 19.4 %

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Gross margin.

The $11.2 million increase in gross margin for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was due to (i) a $10.3 million increase in revenues and (ii) a $4.9 million decrease in cost of operations, exclusive of depreciation and amortization, offset by (iii) a $4.0 million increase in depreciation and amortization.

The $14.4 million increase in gross margin for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due to (i) a $41.1 million increase in revenues, offset by (ii) a $10.0 million increase in cost of operations, exclusive of depreciation and amortization, and (iii) a $16.7 million increase in depreciation and amortization.

The $33.0 million increase in gross margin for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due to (i) an $86.0 million increase in revenues, partially offset by (ii) a $36.3 million increase in cost of operations, exclusive of depreciation and amortization, and (iii) a $16.8 million increase in depreciation and amortization.

Adjusted gross margin.

The $15.2 million increase in Adjusted gross margin for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was due to a $10.3 million increase in revenues and a $4.9 million decrease in cost of operations, exclusive of depreciation and amortization.

The $31.0 million increase in Adjusted gross margin for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was due to a $41.1 million increase in revenues, offset by a $10.0 million increase in cost of operations, exclusive of depreciation and amortization.

The $49.8 million increase in Adjusted gross margin for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due to an $86.0 million increase in revenues offset by a $36.3 million increase in cost of operations, exclusive of depreciation and amortization.

Adjusted EBITDA .

The $14.6 million increase in Adjusted EBITDA for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to a $15.2 million increase in Adjusted gross margin, offset by a $0.4 million increase in selling, general, and administrative expenses, excluding unit-based compensation expense, transaction expenses, and severance charges and other employee costs.

The $30.5 million increase in Adjusted EBITDA for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to a $31.0 million increase in Adjusted gross margin.

The $17.2 million increase in DCF for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily was due to (i) a $14.6 million increase in Adjusted EBITDA, (ii) a $2.4 million decrease in distributions on Preferred Units due to the conversion of 100,000 Preferred Units to 4,997,126 common units, and (iii) a $2.2 million decrease in cash interest expense, net, offset by (iv) a $2.0 million decrease in cash received on derivative instrument.

The $23.4 million increase in DCF for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to (i) a $30.5 million increase in Adjusted EBITDA, (ii) a $4.9 million decrease in distributions on Preferred Units due to the conversion of 100,000 Preferred Units to 4,997,126 common units, and (iii) a $2.8 million decrease in cash interest expense, net, offset by (iv) a $7.8 million increase in maintenance capital expenditures and (v) a $6.9 million decrease in cash received on derivative instrument.

The $39.1 million increase in Adjusted EBITDA for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to a $49.8 million increase in Adjusted gross margin, offset by a $12.7 million increase in selling, general, and administrative expenses, excluding unit-based compensation expense, transaction expenses, amortization of capitalized SaaS implementation costs, and severance charges and other employee costs.

The $42.1 million increase in DCF for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to (i) a $39.1 million increase in Adjusted EBITDA, (ii) a $4.4 million decrease in distributions on Preferred Units due to the conversion of the remaining Preferred Units into common units, and (iii) a $1.6 million decrease in maintenance capital expenditures, offset by (iv) a $2.0 million increase in cash interest expense, net.

DCF Coverage Ratio.

The increase in DCF Coverage Ratio for the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024, was due to the increase in DCF for the period, partially offset by increased distributions due to an increase in the number of common units.

The increase in DCF Coverage Ratio for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was due to the increase in DCF for the period offset by increased common unitholder distributions primarily due to (i) the conversion of the remaining Preferred Units into common units and (ii) the issuance of 18,175,323 common units pursuant to the J-W Power Acquisition.

Liquidity and Capital Resources

We operate in a capital-intensive industry, and our primary liquidity needs include financing the purchase of additional compression units, making other capital expenditures, servicing our debt, funding working capital, and paying cash distributions on our outstanding preferred and common equity.

Our principal sources of liquidity include cash generated by operating activities, borrowings under the Credit Agreement, and issuances of debt and equity securities, including common units under the DRIP.

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Over the long term, we expect that our maintenance capital expenditure requirements will continue to increase as the overall size and age of our fleet increases.

Our aggregate maintenance capital expenditures for the nine months ended September 30, 2025 and 2024, were $31.6 million and $23.8 million, respectively.

Our aggregate maintenance capital expenditures for the three months ended March 31, 2026 and 2025, were $9.2 million and $10.9 million, respectively.

We currently plan to spend between $60.0 million and $70.0 million in maintenance capital expenditures for the year 2026, including parts consumed from inventory.

Without giving effect to any equipment that we may acquire pursuant to any future acquisitions, we currently plan to spend between $230.0 million and $250.0 million in expansion capital expenditures for the year 2026.

Our expansion capital expenditures for the nine months ended September 30, 2025 and 2024, were $77.6 million and $205.9 million, respectively.

As of September 30, 2025, we had binding commitments to purchase $33.7 million worth of additional compression units and serialized parts, all of which is expected to be settled within the next 12 months.

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2025 and 2024 (in thousands):

Nine Months Ended September 30,

Our expansion capital expenditures for the three months ended March 31, 2026 and 2025, were $26.4 million and $22.2 million, respectively.

As of March 31, 2026, we had binding commitments to purchase $76.0 million of additional compression units and $83.9 million of major components for manufacturing compression units, in total $159.9 million, of which $106.9 million is expected to be settled within the next 12 months.

As of March 31, 2026, other commitments include operating and finance lease payments totaling $27.4 million, of which we expect to make payments of $6.6 million in the next twelve months.

During the first quarter of 2026, the Partnership reclassified $62.7 million of heavy equipment inventory, such as engines, compressor frames, coolers, and cylinders, from inventory to fixed assets.

The intended use of the assets changed from sale to third parties to internal use for fixed assets.

The following table summarizes our sources and uses of cash for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Net cash provided by operating activities $ 86,103 $ 54,651

Net cash used in investing activities (467,892) (18,041)

Net cash used in financing activities (191,012) (35,977)

Net cash provided by (used in) financing activities 387,747 (36,622)

Net cash provided by operating activities .

The $43.6 million increase in net cash provided by operating activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to (i) a $55.5 million decrease in inventory purchases and (ii) a $19.7 million increase in net income excluding non-cash charges, partially offset by (iii) a $23.9 million increase in interest payments due to the timing of payments related to our refinance of our Senior Notes 2026 and (iv) a $7.7 million increase in other working capital.

The $31.5 million increase in net cash provided by operating activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to (i) a $30.7 million increase in net income excluding non-cash charges and (ii) a $22.8 million decrease in interest payments, partially offset by (iii) a $19.2 million increase in working capital and (iv) a $3.2 million increase in inventory purchases.

Net cash used in investing activities .

The $111.3 million decrease in net cash used in investing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to a $110.3 million decrease in capital expenditures for purchases of new compression units, overhauls and major improvements, and purchases of other equipment.

Net cash used in financing activities .

The $155.0 million increase in net cash used in financing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily was due to (i) a $250.0 million decrease in proceeds from the issuances of senior notes, (ii) a $648.8 million decrease in net borrowings under the Credit Agreement, (iii) a $10.6 million increase in common unit distributions, (iv) a $5.9 million increase in cash paid related to the net settlement of unit-based awards, partially offset by (v) a $748.8 million decrease in investments in government securities purchased in connection with the Defeasance of the Senior Notes 2026, (vi) a $9.3 million decrease in Preferred Unit distributions, and (vii) a $1.2 million decrease in deferred financing costs.

The $449.9 million increase in net cash used in investing activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to (i) $444.4 million in cash paid, net of cash acquired, in connection with the J-W Power Acquisition and (ii) a $5.9 million increase in capital expenditures for purchases of new compression units, overhauls and major improvements, and purchases of other equipment.

Net cash provided by (used in) financing activities .

The $424.4 million increase in net cash provided by financing activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily was due to (i) a $422.7 million increase in net borrowings under the Credit Agreement, which was primarily used for the J-W Power Acquisition, (ii) a $4.4 million decrease in Preferred Unit distributions, and (iii) a $2.2 million decrease in cash paid related to the net settlement of unit-based awards, partially offset by (iv) a $4.5 million increase in common unit distributions, and (v) a $0.2 million increase in deferred financing costs.

Revolving Credit Facility

As of September 30, 2025, we had outstanding borrowings under the Credit Agreement of $54.7 million and, after accounting for outstanding letters of credit in the amount of $0.8 million, $1.69 billion of remaining unused availability, of which, due to restrictions related to compliance with the applicable financial covenants, $1.02 billion was available to be drawn.

As of September 30, 2025, we were in compliance with all of our covenants under the Credit Agreement.

As of October 31, 2025, we had outstanding borrowings under the Credit Agreement of $790 million and outstanding letters of credit of $0.8 million, which includes borrowings used to pay the redemption price of our Senior Notes 2027 as discussed below.

As of March 31, 2026, we had outstanding borrowings under the Credit Agreement of $1.25 billion and, after accounting for outstanding letters of credit in the amount of $2.0 million, $497.8 million of remaining unused availability, all of which was available to be drawn, inclusive of restrictions related to compliance with applicable financial covenants.

As of March 31, 2026, we were in compliance with all of our covenants under the Credit Agreement.

As of May 1, 2026, we had outstanding borrowings under the Credit Agreement of $1.22 billion and outstanding letters of credit of $2.0 million.

On August 27, 2025, the Partnership amended and restated its existing credit agreement by entering into the Credit Agreement.

The Credit Agreement matures on August 27, 2030, except that (1) if more than $50.0 million of the Senior Notes 2027 are outstanding on June 2, 2027, the Credit Agreement will mature on June 2, 2027 and (2) if more than $50.0 million of the Senior Notes 2029 are outstanding on December 14, 2028, the Credit Agreement will mature on December 14, 2028.

The Credit Agreement provides for an asset-based revolving credit facility to be made available to the Partnership in an aggregate amount of up to $1.75 billion (subject to availability under our borrowing base), with further potential increase of up to $300 million.

The Credit Agreement matures on August 27, 2030, except that if more than $50.0 million of the Senior Notes 2029 are outstanding on December 14, 2028, the Credit Agreement will mature on December 14, 2028.

Borrowings under the Credit Agreement will bear interest at a per annum interest rate equal to, at the Partnership’s option, either the Alternate Base Rate, one-month SOFR (which shall only be available for swingline loans made under the Credit Agreement), Daily Simple SOFR or SOFR plus, in each case, the applicable margin.

“Alternate Base Rate” means the greatest of (1) the prime rate, (2) the federal funds effective rate plus 0.50% and (3) one-month SOFR rate plus 1.00%.

“Alternate Base Rate” means the greatest

of (i) the prime rate, (ii) the federal funds effective rate plus 0.50% and (iii) one-month SOFR rate plus 1.00%.

The applicable margin for borrowings varies (a) in the case of Daily Simple SOFR and SOFR loans, from 1.75% to 2.50% per annum and (b) in the case of Alternate Base Rate loans and one-month SOFR loans, from 0.75% to 1.50% per annum, and will be determined based on a total leverage ratio pricing grid.

In addition, the Partnership is required to pay commitment fees based on the daily unused amount of the Credit Agreement in an amount per annum equal to 0.25%.

Amounts borrowed and repaid under the Credit Agreement may be re-borrowed.

The Partnership must also maintain, on a consolidated basis, as of the last day of each fiscal quarter a Total Leverage Ratio (as defined in the Credit Agreement) of not greater than 5.50 to 1.00 or less than 0.00 to 1.00, an Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 2.50 to 1.00 and a Secured Leverage Ratio (as defined in the Credit Agreement) of not greater than 3.00 to 1.00 or less than 0.00 to 1.00.

The Credit Agreement also contains various customary representations and warranties, affirmative covenants and events of default.

For a more detailed description of the Credit Agreement, see Note 8 to our unaudited condensed consolidated financial statements in Part I, Item 1 “Financial Statements” of this report.

For a more detailed description of our previous credit agreement, which was in place until August 27, 2025, please see Note 10 to the consolidated financial statements in Part II, Item 8 “Financial Statements and Supplementary Data” included in our 2024 Annual Report.

As of September 30, 2025, we had $750.0 million, $1.0 billion, and $750.0 million aggregate principal amount outstanding on our Senior Notes 2027, Senior Notes 2029, and Senior Notes 2033, respectively.

The Senior Notes 2027 accrued interest at the rate of 6.875% per year.

Interest on the Senior Notes 2027 was payable semi-annually in arrears on each of March 1 and September 1.

On September 15, 2025, we provided notice to the holders of our Senior Notes 2027 that, contingent on receipt of the proceeds from the Senior Notes 2033, the Senior Notes 2027 would be redeemed in full at par, plus accrued and unpaid interest, on October 15, 2025 (the “Redemption”).

The Redemption was completed on October 15, 2025.

For additional information on the Redemption, see Note 16 to our unaudited condensed consolidated financial statements in Part I, Item 1 “Financial Statements” of this report.

Amounts borrowed and repaid under the Credit Agreement may be re-borrowed, subject to borrowing base availability.

The Credit Agreement also contains various financial covenants, including covenants requiring us to maintain:

• a minimum EBITDA to interest coverage ratio of 2.50 to 1.00, determined as of the last day of each fiscal quarter, with EBITDA and interest expense annualized for the most-recent fiscal quarter;

• a ratio of total secured indebtedness to EBITDA not greater than 3.00 to 1.00 or less than 0.00 to 1.00, determined as of the last day of each fiscal quarter, with EBITDA annualized for the most-recent fiscal quarter;

• a 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 not greater than 5.50 to 1.00 or less than 0.00 to 1.00.

For purposes of the above covenants, EBITDA is calculated as set forth in the Credit Agreement.

For a more detailed description of the Credit Agreement, see Note 8 to our unaudited condensed consolidated financial statements in Part I, Item 1 “Financial Statements” of this report and Note 10 to the consolidated financial statements in Part II, Item 8 “Financial Statements and Supplementary Data” included in our 2025 Annual Report.

As of March 31, 2026, we had $1.0 billion and $750.0 million aggregate principal amount outstanding on our Senior Notes 2029 and Senior Notes 2033, respectively.

The Senior Notes 2029 are due on March 15, 2029, and accrue interest at the rate of 7.125% per year.

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Interest on the Senior Notes 2033 is payable semi-annually in arrears on each of April 1 and October 1, commencing on April 1, 2026.

For more detailed descriptions of the Senior Notes 2027, Senior Notes 2029, and Senior Notes 2033, see Note 8 to our unaudited condensed consolidated financial statements in Part I, Item 1 “Financial Statements” of this report and Note 10 to the consolidated financial statements in Part II, Item 8 “Financial Statements and Supplementary Data” included in our 2024 Annual Report.

During the nine months ended September 30, 2025, distributions of $0.2 million were reinvested under the DRIP resulting in the issuance of 6,230 common units.

For more detailed descriptions of the Senior Notes 2029 and Senior Notes 2033, see Note 8 to our unaudited condensed consolidated financial statements in Part I, Item 1 “Financial Statements” of this report and Note 10 to the consolidated financial statements in Part II, Item 8 “Financial Statements and Supplementary Data” included in our 2025 Annual Report.

During the three months ended March 31, 2026, distributions of $48 thousand were reinvested under the DRIP resulting in the issuance of 1,900 common units.

Such distributions are treated as non-cash transactions in the accompanying unaudited condensed consolidated statements of cash flows included under Part I, Item 1 “Financial Statements” of this report.

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The following table reconciles Adjusted gross margin to gross margin, its most directly comparable GAAP financial measure, for each of the periods presented (in thousands):

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

2025 2024 2025 2024

Three Months Ended March 31,

Total revenues $ 331,275 $ 245,234

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We define EBITDA as net income (loss) before net interest expense, depreciation and amortization expense, and income tax expense (benefit).

transaction expenses, loss (gain) on disposition of assets, loss on extinguishment of debt, loss (gain) on derivative instrument, and other.

We define Adjusted EBITDA as EBITDA plus impairment of assets, impairment of goodwill, interest income on capital leases, unit-based compensation expense (benefit), severance charges and other employee costs, certain transaction expenses, loss (gain) on disposition of assets, loss on extinguishment of debt, loss (gain) on derivative instrument, amortization of capitalized SaaS implementation costs, and other.

We view Adjusted EBITDA as one of management’s primary tools for evaluating our results of operations, and we track this item on a monthly basis as an absolute amount and as a percentage of revenue compared to the prior month, year-to-date, prior year, and budget.

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The following table reconciles Adjusted EBITDA to net income and net cash provided by operating activities, its most directly comparable GAAP financial measures, for each of the periods presented (in thousands):

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

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 38,342 $ 20,512

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Severance charges and other employee costs (3)

Loss (gain) on disposition of assets 830 (123) 2,194 1,113

(Gain) loss on disposition of assets (545) 1,325

Loss on extinguishment of debt 1 —

Gain (loss) on derivative instrument — 6,218 — (5,684)

Amortization of capitalized SaaS implementation costs 284 —

Impairment of assets (4)

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Income tax expense (4,122) (1,535)

Non-cash income tax expense 2,711 —

Transaction expenses (3,777) —

Severance charges and other employee costs (4,085) (1,351)

Cash received on derivative instrument — 2,000 — 6,888

Other (16) 330 30 427

Changes in operating assets and liabilities (46,472) (46,934)

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________________________________

(1) For the three and nine months ended September 30, 2025, unit-based compensation expense included $0.4 million and $1.6 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom and restricted unit awards.

For the three and nine months ended September 30, 2024, unit-based compensation expense included $1.0 million and $3.0 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom unit awards.

The nine months ended September 30, 2025 also reflected a $2.1 million reversal of unit-based compensation expense resulting from the forfeiture of certain awards by certain former senior management.

For the three and nine months ended September 30, 2025, unit-based compensation included $2.5 million and $5.7 million, respectively, related to the cash portion of the settlement of phantom unit awards upon vesting.

(1) For the three months ended March 31, 2026, unit-based compensation expense included $0.1 million of cash payments related to quarterly payments of DERs on outstanding unit awards.

For the three months ended March 31, 2025, unit-based compensation expense included $0.7 million of cash payments related to quarterly payments of DERs on outstanding unit awards.

For the three months ended March 31, 2025, unit-based compensation included $2.2 million related to the cash portion of the settlement of phantom unit awards upon vesting.

The remainder of unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability and other non-cash unit-based compensation expense.

(2) Represents certain expenses related to potential and completed transactions and other items.

(2) Represents certain expenses related to potential and completed transactions, including the J-W Power Acquisition, and other items.

We believe it is useful to investors to exclude these expenses.

(3) Severance charges and other employee costs includes (i) severance payments to former employees of the Partnership, (ii) retention payments to employees of the Partnership that have executed agreements to maintain operations during the shared services integration but do not intend to remain employed with the Partnership after their retention period, and (iii) relocation payments to employees of the Partnership for relocation resulting from the shared services integration and the relocation of the Partnership’s headquarters to Dallas, Texas.

(3) Severance charges and other employee costs includes (i) severance payments to former employees of the Partnership, (ii) retention payments to employees of the Partnership that have executed agreements to maintain operations during the shared services or the J-W Power Acquisition integration but do not intend to remain employed with the Partnership after their retention period, and (iii) relocation payments to employees of the Partnership for relocation resulting from the shared services integration and the relocation of the Partnership’s headquarters to Dallas, Texas.

These retention payments are incremental to the affected employees’ base pay.

For the three and nine months ended September 30, 2025, severance charges and other employee costs included $0.1 million and $0.4 million related to retention payments, respectively, and $0.3 million and $0.6 million related to relocation payments, respectively.

(4) This loss on extinguishment of debt is a result of the Defeasance of the Senior Notes 2026.

This amount represents the write-off of deferred financing costs of $4.3 million and the difference between (i) the purchase price of U.S.

government securities of $748.8 million and (ii) the aggregate outstanding principal balance and accrued interest of the Senior Notes 2026 of $748.1 million at the time of the Defeasance.

For the three months ended March 31, 2026 and 2025, severance charges and other employee costs included $0.6 million and $0.4 million related to retention payments, and $0.2 million and $0.1 million related to relocation payments, respectively.

(4) Represents non-cash charges incurred to decrease the carrying value of long-lived assets with recorded values that are not expected to be recovered through future cash flows.

Distributable Cash Flow

We define DCF as net income (loss) plus non-cash interest expense, non-cash income tax expense (benefit), depreciation and amortization expense, unit-based compensation expense (benefit), impairment of assets, impairment of goodwill, certain transaction expenses, severance charges and other employee costs, loss (gain) on disposition of assets, loss on extinguishment of debt, change in fair value of derivative instrument, proceeds from insurance recovery, and other, less distributions on Preferred Units and maintenance capital expenditures.

of debt, change in fair value of derivative instrument, proceeds from insurance recovery, amortization of capitalized SaaS implementation costs, and other, less distributions on Preferred Units and maintenance capital expenditures.

We believe DCF is an important measure of operating performance because it allows management, investors, and others to compare the cash flows that we generate (after distributions on the Preferred Units but prior to any retained cash reserves established by the General Partner and the effect of the DRIP) to the cash distributions that we expect to pay our common unitholders.

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The following table reconciles DCF to net income and net cash provided by operating activities, its most directly comparable GAAP financial measures, for each of the periods presented (in thousands):

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

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 38,342 $ 20,512

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Severance charges and other employee costs (3)

Other (4) 1,876 — 2,876 —

Loss (gain) on disposition of assets 830 (123) 2,194 1,113

(Gain) loss on disposition of assets (545) 1,325

Loss on extinguishment of debt 1 —

Change in fair value of derivative instrument — 8,218 — 1,204

Impairment of assets (5)

Distributions on Preferred Units — (4,388)

Amortization of capitalized SaaS implementation costs 284 —

Maintenance capital expenditures (6)

(9,246) (10,853)

DCF $ 130,793 $ 88,695

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________________________________

The nine months ended September 30, 2025 also reflected a $2.1 million reversal of unit-based compensation expense resulting from the forfeiture of certain awards by certain former senior management.

(1) For the three months ended March 31, 2026, unit-based compensation expense included $0.1 million of cash payments related to quarterly payments of DERs on outstanding phantom and restricted unit awards.

For the three months ended March 31, 2025, unit-based compensation expense included $0.7 million of cash payments related to quarterly payments of DERs on outstanding unit awards.

For the three months ended March 31, 2025, unit-based compensation included $2.2 million related to the cash portion of the settlement of phantom unit awards upon vesting.

The remainder of unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability and other non-cash unit-based compensation expense.

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We believe it is useful to investors to exclude these expenses.

(3) Severance charges and other employee costs includes (i) severance payments to former employees of the Partnership, (ii) retention payments to employees of the Partnership that have executed agreements to maintain operations during the shared services or the J-W Power Acquisition integration but do not intend to remain employed with the Partnership after their retention period, and (iii) relocation payments to employees of the Partnership for relocation resulting from the shared services integration and the relocation of the Partnership’s headquarters to Dallas, Texas.

These retention payments are incremental to the affected employees’ base pay.

(4) Represents incremental cash income tax expense accrued for the three and nine months ended September 30, 2025.

We believe that the amount accrued as of September 30, 2025 is a reasonable estimate of the potential loss from the aggregate final imputed underpayment for the federal tax years 2019 and 2020.

(5) This loss on extinguishment of debt is a result of the Defeasance of the Senior Notes 2026.

This amount represents the write-off of deferred financing costs of $4.3 million and the difference between (i) the purchase price of U.S.

government securities of $748.8 million and (ii) the aggregate outstanding principal balance and accrued interest of the Senior Notes 2026 of $748.1 million at the time of the Defeasance.

(4) Represents incremental cash income tax expense accrued for the period presented as a result of the IRS examination of our tax returns for the federal tax years 2019 and 2020.

(5) Represents non-cash charges incurred to decrease the carrying value of long-lived assets with recorded values that are not expected to be recovered through future cash flows.

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The following table summarizes our DCF Coverage Ratio for the periods presented (dollars in thousands):

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

2025 2024 2025 2024

Three Months Ended March 31,

DCF $ 130,793 $ 88,695

Distributions for DCF Coverage Ratio (1)

DCF Coverage Ratio 1.61 x 1.41 x 1.48 x 1.41 x

$ 76,110 $ 61,731

DCF Coverage Ratio 1.72 x 1.44 x

________________________________

(1) Represents distributions to the holders of our common units as of the record date.

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The Partnership’s critical accounting estimates are described in Part II, Item 7 “Critical Accounting Estimates” of our 2025 Annual Report.

There have been no material changes to our critical accounting estimates since the date of our 2024 Annual Report.

There have been no material changes to our critical accounting estimates since the date of our 2025 Annual Report, however, the following information describes estimates relevant to the recent J-W Power Acquisition.

Fair Value Estimates in Business Combination Accounting and Impairment of Long-Lived Assets, Goodwill, and Intangible Assets.

Business combination accounting and quantitative impairment testing are required from time to time due to the occurrence of events, changes in circumstances, or annual testing requirements.

For business combinations, assets and liabilities are required to be recorded at estimated fair value in connection with the initial recognition of the transaction.

For impairment testing, long-lived assets are required to be tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Goodwill and intangibles with indefinite lives must be tested for impairment annually or more frequently if events or changes in circumstances indicate that the related asset might be impaired.

An impairment loss should be recognized only if the carrying amount of the asset/goodwill is not recoverable and exceeds its fair value.

Calculating the fair value of assets or reporting units in connection with business combination accounting or impairment testing requires management to make several estimates, assumptions and judgments, and in some circumstances management may also utilize third-party specialists to assist and advise on those calculations.

In order to allocate the purchase price in a business combination or to test for recoverability when performing a quantitative impairment test, we must make estimates of projected cash flows related to the asset, which include, but are not limited to, assumptions about the use or disposition of the asset, estimated remaining life of the asset, and future expenditures necessary to maintain the asset’s existing service potential.

In order to determine fair value, we make certain estimates and assumptions, including, among other things, changes in general economic conditions in regions in which our operations are located, the expected demand and production of natural gas and crude oil, our ability to negotiate favorable service and sales agreements, our dependence on certain significant customers, and competition from other companies.

While we believe we have made reasonable assumptions to calculate the fair value, if future results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.

The Partnership determines the fair value of our assets using the discounted cash flow method, the guideline company method, or a weighted combination of these methods.

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 Partnership believes the estimates and assumptions used in our impairment assessments are reasonable and based on available market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated.

Under the discounted cash flow method, the Partnership determines fair value based on estimated future cash flows of a reporting unit including estimates for capital expenditures, discounted to present value using the risk-adjusted industry rate, which reflect the overall level of inherent risk of the reporting unit.

Cash flow projections are derived from one year budgeted amounts plus an estimate of later period cash flows, all of which are determined by management.

Subsequent period cash flows are developed using growth rates that management believes are reasonably likely to occur.

Under the guideline company method, the Partnership determines the estimated fair value of a reporting unit by applying valuation multiples of comparable publicly-traded companies to the reporting unit’s projected EBITDA and then averaging that estimate with similar historical calculations using a three year average.

In addition, the Partnership estimates a reasonable control premium representing the incremental value that accrues to the majority owner from the opportunity to dictate the strategic and operational actions of the business.

One key assumption in these fair value calculations is management’s estimate of future cash flows and EBITDA.

In accounting for a business combination, these estimates are generally based on the forecasts that were used to analyze the deal economics.

For impairment testing, these estimates are based on the annual budget for the upcoming year and forecasted amounts for multiple subsequent years.

The annual budget process is typically completed near the annual goodwill impairment testing date, and management uses the most recent information for the annual impairment tests.

The forecast is also subjected to a comprehensive update annually in conjunction with the annual budget process and is revised periodically to reflect new information and/or revised expectations.

The estimates of future cash flows and EBITDA are subjective in nature and are subject to impacts from the business risks described in “Item 1A.

Risk Factors” in our 2025 Annual Report.

Therefore, the actual results could differ significantly from the amounts used for business combination accounting and impairment testing, and significant changes in fair value estimates could occur in a given period.

Such changes in fair value estimates could result in changes to the fair value estimates used in business combination accounting, which could significantly impact results of operations in a period subsequent to the business combination, depending on multiple factors, including the timing of such changes.

In the case of impairment testing, such changes could result in additional impairments in future periods;

therefore, the actual results could differ significantly from the amounts used for goodwill impairment testing, and significant changes in fair value estimates could occur in a given period, resulting in additional impairments.

In addition, we may change our method of impairment testing, including changing the weight assigned to different valuation models.

Such changes could be driven by various factors, including the level of precision or availability of data for our assumptions.

Any changes in the method of testing could also result in an impairment or impact the magnitude of an impairment.

Management does not believe that any of the Partnership’s goodwill balance or long-lived assets is currently at significant risk of a material impairment.

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 2. Management’s Discussion and Analysis