USA Compression Partners, LP 10-Q

ITEM 1. Financial Statements USA COMPRESSION PARTNERS, LP Unaudited Condensed Consolidated Balance Sheets (in thousands, except unit amounts) March 31, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 14,522 $ 8,564 Accounts receivable, net of allowances for credit losses of $ 2,725 and $ 1,475 , respectively 151,083 80,823 Related-party receivables 11,792 1,653 Inventories 154,365 134,488 Prepaid expenses and other assets 15,080 11,047 Total current assets 346,842 236,575 Property and equipment, net 3,048,371 2,162,624 Lease right-of-use assets 17,246 13,716 Identifiable intangible assets, net 184,546 186,893 Other assets 19,991 20,123 Goodwill 117,446 — Total assets $ 3,734,442 $ 2,619,931 Liabilities and Partners’ Capital (Deficit) Current liabilities: Accounts payable $ 39,585 $ 20,122 Related-party payables 12,530 7,997 Accrued liabilities 90,962 93,785 Deferred revenue 81,161 65,013 Total current liabilities 224,238 186,917 Long-term debt, net 2,980,327 2,523,970 Operating lease liabilities 13,697 10,704 Deferred income taxes 194,548 5,242 Other liabilities 4,966 5,600 Total liabilities 3,417,776 2,732,433 Commitments and contingencies Partners’ capital (deficit): Common units, 144,972,358 and 126,795,135 units issued and outstanding, respectively 316,666 ( 112,502 ) Total liabilities and partners’ capital (deficit) $ 3,734,442 $ 2,619,931 See accompanying notes to unaudited condensed consolidated financial statements. 1 Table of Contents USA COMPRESSION PARTNERS, LP Unaudited Condensed Consolidated Statements of Operations (in thousands, except per unit amounts) Three Months Ended March 31, 2026 2025 Revenues: Contract operations $ 293,509 $ 224,975 Parts and service 21,871 5,094 Related party 15,895 15,165 Total revenues 331,275 245,234 Costs and expenses: Cost of operations, exclusive of depreciation and amortization 117,902 81,618 Depreciation and amortization 87,146 70,393 Selling, general, and administrative 35,357 18,862 (Gain) loss on disposition of assets ( 545 ) 1,325 Impairment of assets 4 3,645 Total costs and expenses 239,864 175,843 Operating income 91,411 69,391 Other income (expense): Interest expense, net ( 48,966 ) ( 47,369 ) Loss on extinguishment of debt ( 1 ) — Other 20 25 Total other expense ( 48,947 ) ( 47,344 ) Net income before income tax expense 42,464 22,047 Income tax expense 4,122 1,535 Net income 38,342 20,512 Less: distributions on Preferred Units — ( 4,388 ) Net income attributable to common unitholders’ interests $ 38,342 $ 16,124 Weighted average common units outstanding – basic 142,750 117,513 Weighted average common units outstanding – diluted 143,131 118,254 Basic and diluted net income per common unit $ 0.27 $ 0.14 Distributions declared per common unit for respective periods $ 0.525 $ 0.525 See accompanying notes to unaudited condensed consolidated financial statements. 2 Table of Contents USA COMPRESSION PARTNERS, LP Unaudited Condensed Consolidated Statements of Changes in Partners’ Capital (Deficit) (in thousands, except per unit amounts) Common units Partners’ deficit ending balance, December 31, 2025 $ ( 112,502 ) Unit-based compensation for equity-classified awards 1,148 Distributions and DERs, $ 0.525 per unit ( 66,934 ) Issuance of common units under the DRIP 48 Common units issued for J-W Power Acquisition 456,564 Net income attributable to common unitholders’ interests 38,342 Partners’ capital ending balance, March 31, 2026 $ 316,666 Common units Partners’ deficit ending balance, December 31, 2024 $ ( 141,051 ) Vesting of phantom units 5,251 Distributions and DERs, $ 0.525 per unit ( 61,737 ) Issuance of common units under the DRIP 62 Unit-based compensation for equity-classified awards 640 Net income attributable to common unitholders’ interests 16,124 Partners’ deficit ending balance, March 31, 2025 $ ( 180,711 ) See accompanying notes to unaudited condensed consolidated financial statements. 3 Table of Contents USA COMPRESSION PARTNERS, LP Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income $ 38,342 $ 20,512 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 87,146 70,393 Provision for expected credit losses 398 — Amortization of debt issuance costs 1,829 2,241 Amortization of capitalized implementation costs 284 — Unit-based compensation expense 2,405 3,384 Deferred income tax expense 2,711 85 (Gain) loss on disposition of assets ( 545 ) 1,325 Loss on extinguishment of debt 1 — Impairment of assets 4 3,645 Changes in assets and liabilities, net of effect of acquisition: Accounts receivable and related-party receivables, net ( 38,174 ) ( 8,253 ) Inventories ( 15,390 ) ( 12,240 ) Prepaid expenses and other current assets ( 900 ) 410 Other assets 3,482 ( 2,377 ) Accounts payable and related-party payables 14,868 4,113 Accrued liabilities and deferred revenue ( 10,357 ) ( 28,177 ) Other liabilities ( 1 ) ( 410 ) Net cash provided by operating activities 86,103 54,651 Cash flows from investing activities: Cash paid for the J-W Power Acquisition, net of cash acquired ( 444,384 ) — Capital expenditures, net ( 24,238 ) ( 18,368 ) Proceeds from disposition of property and equipment 612 259 Proceeds from insurance recovery 118 68 Net cash used in investing activities ( 467,892 ) ( 18,041 ) Cash flows from financing activities: Proceeds from revolving credit facility 599,198 274,476 Repayments of revolving credit facility ( 144,037 ) ( 242,002 ) Cash paid related to net settlement of unit-based awards — ( 2,227 ) Cash distributions on common units ( 66,886 ) ( 62,386 ) Cash distributions on Preferred Units — ( 4,388 ) Deferred financing costs ( 232 ) ( 5 ) Other ( 296 ) ( 90 ) Net cash provided by (used in) financing activities 387,747 ( 36,622 ) Increase (decrease) in cash and cash equivalents 5,958 ( 12 ) Cash and cash equivalents, beginning of period 8,564 14 Cash and cash equivalents, end of period $ 14,522 $ 2 See accompanying notes to unaudited condensed consolidated financial statements. 4 Table of Contents USA COMPRESSION PARTNERS, LP Unaudited Condensed Consolidated Statements of Cash Flows (continued) (in thousands) Three Months Ended March 31, 2026 2025 Supplemental cash flow information: Cash paid for interest, net of capitalized amounts $ 52,344 $ 75,136 Cash paid for income taxes 4,092 — Supplemental non-cash transactions: Non-cash distributions to certain common unitholders (DRIP) $ 48 $ 62 Transfers from inventories to property and equipment, net 12,344 11,214 Reclassification of serialized inventory to fixed assets 62,722 — Changes in capital expenditures included in accounts payable and accrued liabilities ( 1,346 ) 2,724 Changes in financing costs included in accounts payable and accrued liabilities ( 221 ) 271 Common units issued in connection to the J-W Power Acquisition 456,564 — See accompanying notes to unaudited condensed consolidated financial statements. 5 Table of Contents USA COMPRESSION PARTNERS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) Organization and Description of Business Unless otherwise indicated, the terms “our,” “we,” “us,” “the Partnership,” and similar language refer to USA Compression Partners, LP, collectively with its consolidated subsidiaries. We are a Delaware limited partnership. Through our operating subsidiaries, we provide natural gas compression services to customers under fixed-term contracts in the natural gas and crude oil industries, using compression packages that we design, engineer, own, operate, and maintain. We also own and operate a fleet of equipment used to provide natural gas treating services, such as carbon dioxide and hydrogen sulfide removal, cooling, and dehydration, as well as specialized manufacturing facilities for compression units. We provide compression services in unconventional resource plays throughout the U.S., including the Utica, Marcellus, Permian, Denver-Julesburg, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, and Bakken. USA Compression GP, LLC, a Delaware limited liability company, serves as our general partner and is referred to herein as the “General Partner.” The General Partner is wholly owned by Energy Transfer. The accompanying unaudited condensed consolidated financial statements include the accounts of the Partnership and its subsidiaries, all of which are wholly owned by us. Acquisition of J-W Power Company 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 $ 860.0 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 of the Partnership, which had a fair value on the J-W Acquisition Date of approximately $ 456.6 million, 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 J-W Power Acquisition was recorded using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their estimated fair values on the date of acquisition with any excess purchase price over the fair value of net assets acquired recorded to goodwill. Determining the fair value of acquired assets requires management’s judgment and the utilization of a third-party valuation specialist and involves the use of significant estimates and assumptions. Pursuant to the acquisition method of accounting, the results of operations of J-W Power and J-W Energy prior to the J-W Acquisition Date are not included in the accompanying unaudited condensed consolidated financial statements. As of the date these consolidated financial statements were issued, management and the third-party valuation specialist continue to evaluate certain assumptions, which could result in a change to the allocation of the fair value between line items on 6 Table of Contents the consolidated balance sheet, potentially impacting goodwill. The following table summarizes the preliminary allocation of the purchase price among assets acquired and liabilities assumed (in thousands): At January 12, 2026 Total current assets $ 136,404 Property and equipment, net 868,672 Lease right-of-use assets, net 4,589 Intangible assets, net (1) 5,400 Other long-term assets, net 1,296 Goodwill (2) 117,446 Total assets 1,133,807 Total current liabilities 32,652 Non-current operating lease liabilities 2,966 Deferred income taxes 186,595 Total liabilities 222,213 Total consideration $ 911,594 Cash acquired 10,646 Total consideration, net of cash acquired $ 900,948 (1) Intangible assets, net is comprised of $ 5.4 million of trade names with a remaining useful life of approximately 3 years. (2) Goodwill recorded is primarily related to the recognition of deferred tax liabilities arising from acquisition date fair value adjustments with the remainder related to expected commercial and operational synergies, and is subject to change based on final purchase price allocations. None of the goodwill recorded as a result of this transaction is deductible for tax purposes. Pro Forma Results of Operations The following unaudited pro forma consolidated results of operations for the three months ended March 31, 2026 and 2025 are presented as if the J-W Power Acquisition had been completed on January 1, 2025 (in thousands). Three Months Ended March 31, 2026 2025 Revenues $ 341,556 $ 324,583 Net income 46,331 35,664 The pro forma consolidated results of operations include adjustments to: • include the results of J-W Power and J-W Energy for all periods presented; • include the incremental expenses associated with the fair value adjustments recorded as a result of applying the acquisition method of accounting; • include incremental interest expense related to financing the transaction; • adjust for one-time expenses; and • adjust for relative changes in ownership resulting from the acquisition. The pro forma information is not necessarily indicative of the results of operations that would have occurred had the J-W Power Acquisition been made at the beginning of the periods presented or the future results of the combined operations. J-W Power and J-W Energy’s revenue and net income since the J-W Acquisition Date to March 31, 2026 included in our consolidated statement of operations were $ 80.1 million and $ 12.8 million, respectively. 7 Table of Contents Expenses related to the J-W Power Acquisition As a result of the J-W Power Acquisition, we recognized $ 3.8 million of transaction-related costs in selling, general and administrative expenses during the three months ended March 31, 2026. (2) Basis of Presentation and Significant Accounting Policies Basis of Presentation Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to SEC rules and regulations. 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 months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. 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 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, 2025, filed on February 17, 2026. Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on net income or total partners’ capital. Use of Estimates Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions by management that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingent assets and liabilities that existed as of the date of the unaudited condensed consolidated financial statements. Although these estimates were based on management’s available knowledge of current and expected future events, actual results could differ from these estimates. Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents consist of all cash balances. We consider investments in highly liquid financial instruments purchased with an original maturity of 90 days or less to be cash equivalents. We maintain deposits primarily in one financial institution, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). We have not experienced any losses related to amounts in excess of FDIC limits. Trade Accounts Receivable Trade accounts receivable are recorded at their invoiced amounts. Allowance for Credit Losses We evaluate allowance for credit losses with reference to our trade accounts receivable balances, which are measured at amortized cost. Due to the short-term nature of our trade accounts receivable, we consider the amortized cost of trade accounts receivable to equal the receivable’s carrying amounts, excluding the allowance for credit losses. Our determination of the allowance for credit losses requires us to make estimates and judgments regarding our customers’ ability to pay amounts due. We continuously evaluate the financial strength of our customers and the overall business climate in which our customers operate, and make adjustments to the allowance for credit losses as necessary. We evaluate the financial strength of our customers by reviewing the aging of their receivables owed to us, our collection experiences with the customer, correspondence, financial information, and third-party credit ratings. We evaluate the business climate in which our customers operate by reviewing various publicly available materials regarding our customers’ industry, including the solvency of other companies within their industry. 8 Table of Contents Inventories Inventories consist of spare parts, raw materials, work in process, and finished goods used for fabrication or maintenance of compression units. All inventories are stated at the lower of cost or net realizable value. Spare parts inventories used in the maintenance of compression units are determined using the weighted-average cost method, while all other inventories used in the fabrication process are determined using the standard cost method. Property and Equipment Property and equipment are carried at cost except for (i) certain acquired assets which are recorded at fair value on their respective acquisition dates and (ii) impaired assets which are recorded at fair value as of the last impairment evaluation date for which an adjustment was required. Overhauls and major improvements that increase the value or extend the life of compression equipment are capitalized and depreciated over three to five years . Ordinary maintenance and repairs are charged to cost of operations, exclusive of depreciation and amortization. When property and equipment is retired or sold, the associated carrying value and the related accumulated depreciation are removed from our accounts and any related gains or losses are recorded within the unaudited condensed consolidated statements of operations within the period of sale or disposition. 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 $ 13 thousand and $ 39 thousand for the three months ended March 31, 2026 and 2025, respectively. Impairment of Long-Lived Assets The carrying value of long-lived assets that are not expected to be recovered from future cash flows are written down to estimated fair value. We test long-lived assets for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable or will no longer be utilized within the operating fleet. The most common circumstance requiring compression units to be evaluated for impairment involves idle units that do not meet the desired performance characteristics of our revenue-generating horsepower. The carrying value of a long-lived asset is not recoverable if the asset’s carrying value exceeds the sum of the undiscounted cash flows expected to be generated from the use and eventual disposition of the asset. If the carrying value of the long-lived asset exceeds the sum of the undiscounted cash flows associated with the asset, an impairment loss equal to the amount of the carrying value exceeding the fair value of the asset is recognized. The fair value of the asset is measured using quoted market prices or, in the absence of quoted market prices, based on an estimate of discounted cash flows, the expected net sale proceeds compared to the other similarly configured fleet units 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 months ended March 31, 2026 and 2025. Identifiable Intangible Assets Identifiable intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives, which is the period over which the assets are expected to contribute directly or indirectly to our future cash flows. The estimated useful lives of our intangible assets range from 3 to 25 years. Goodwill Goodwill represents consideration paid in excess of the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized, but is reviewed for impairment annually based on the carrying values as of October 1, or more frequently if impairment indicators arise that suggest the carrying value of goodwill may not be recovered. Revenue Recognition Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the provision of services or the transfer of goods. Revenue is measured at the amount of consideration we expect to receive in exchange for providing services or transferring goods. Incidental items, if any, that are immaterial in the context of the contract are recognized as expenses. 9 Table of Contents Unit-Based Compensation Our unit-based compensation awards include phantom units, restricted units, and cash restricted units. The fair values of phantom and cash restricted units granted to employees are estimated at the end of each reporting period and are accounted for as liabilities. The fair value of phantom units granted to directors and restricted units are determined at grant date and amortized using the straight-line method over the vesting period. Income Taxes USA Compression Partners, LP is organized as a partnership for U.S. federal and state income tax purposes. As a result, our partners are responsible for U.S. federal and state income taxes on their distributive share of our items of income, gain, loss, or deduction. Net earnings for financial statement purposes may differ significantly from taxable income reportable to unitholders as a result of differences between the tax basis and financial reporting basis of assets and liabilities. Texas also imposes an entity-level income tax on partnerships that is based on Texas-sourced taxable margin (the “Texas Margin Tax”). Texas Margin Tax impacts are included within our unaudited condensed consolidated financial statements. Our wholly owned finance subsidiary, USA Compression Finance Corp. (“Finance Corp”), and the subsidiaries we acquired in the J-W Power Acquisition are corporations for U.S. federal and state income tax purposes and any resulting tax impacts attributable to these subsidiaries are included within our unaudited condensed consolidated financial statements. The Partnership and its corporate subsidiaries account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. The determination of the provision for income taxes requires significant judgment, use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in our consolidated financial statements only after determining a more likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, we reassess these probabilities and record any changes through the provision for income taxes. Pass-Through Taxes Sales taxes incurred on behalf of, and passed through to, customers are accounted for on a net basis. Fair-Value Measurements Accounting standards applicable to fair-value measurements establish a framework for measuring fair value and stipulate disclosures about fair-value measurements. The standards apply to recurring and non-recurring financial and non-financial assets and liabilities that require or permit fair-value measurements. Among the required disclosures is the fair-value hierarchy of inputs we use to value an asset or a liability. The three levels of the fair-value hierarchy are described as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. As of March 31, 2026 and December 31, 2025, our financial instruments primarily consisted of cash and cash equivalents, trade accounts receivable, trade accounts payable, and long-term debt. 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. Our revolving credit facility applies floating interest rates to amounts drawn under the facility; therefore, the carrying amount of our revolving credit facility approximates its fair value. 10 Table of Contents The fair value of our Senior Notes 2029 and Senior Notes 2033 were estimated using quoted prices in inactive markets and are considered Level 2 measurements. The following table summarizes the aggregate principal amount and fair value of our Senior Notes 2029 and Senior Notes 2033 (in thousands): March 31, 2026 December 31, 2025 Senior Notes 2029, aggregate principal $ 1,000,000 $ 1,000,000 Fair value of Senior Notes 2029 1,022,500 1,033,800 Senior Notes 2033, aggregate principal 750,000 750,000 Fair Value of Senior Notes 2033 747,525 757,500 Operating Segment We operate in a single business segment, the compression services business. Refer to Note 14 for more detailed information about our compression services segment. (3) Trade Accounts Receivable The allowance for credit losses, which was $ 2.7 million and $ 1.5 million for March 31, 2026 and December 31, 2025, respectively, represents our best estimate of the amount of probable credit losses included within our existing accounts receivable balance. (4) Inventories Components of inventories consisted of the following (in thousands): March 31, 2026 December 31, 2025 Spare parts (1) $ 99,926 $ 134,488 Raw materials 11,955 — Work in process 31,972 — Finished goods 10,512 — Total inventories $ 154,365 $ 134,488 (1) As of January 1, 2026, we reclassified $ 62.7 million of serialized inventory to fixed assets. The intended use of these assets changed from sale to third party to internal use for fixed assets. 11 Table of Contents (5) Property and Equipment and Identifiable Intangible Assets Property and Equipment Property and equipment consisted of the following (in thousands): March 31, 2026 December 31, 2025 Compression and treating equipment (1) $ 5,142,677 $ 4,243,709 Automobiles and vehicles 84,733 62,461 Computer and other equipment 48,015 41,045 Leasehold improvements 11,033 11,004 Buildings 33,769 3,935 Furniture and fixtures 1,437 1,231 Land 5,462 77 Total property and equipment, gross 5,327,126 4,363,462 Less: accumulated depreciation and amortization ( 2,278,755 ) ( 2,200,838 ) Total property and equipment, net $ 3,048,371 $ 2,162,624 (1) As of January 1, 2026, we reclassified $ 62.7 million of serialized inventory to fixed assets. The intended use of these assets changed from sale to third party to internal use for fixed assets. Once the serialized inventory is placed into service, depreciation will commence in line with overhauls and major improvements that increase the value or extend the life of compression equipment which are capitalized and depreciated over three to five years . Depreciation is calculated using the straight-line method over the estimated useful lives of the assets as follows: Compression and treating equipment, acquired new 25 years Compression and treating equipment, acquired used 5 - 25 years Furniture and fixtures 3 - 10 years Vehicles and computer equipment 1 - 10 years Buildings 5 - 20 years Leasehold improvements 5 - 7 years Depreciation expense on property and equipment and loss (gain) on disposition of assets were as follows (in thousands): Three Months Ended March 31, 2026 2025 Depreciation expense $ 79,192 $ 63,048 (Gain) loss on disposition of assets ( 545 ) 1,325 On a quarterly basis, we evaluate the future deployment of our idle fleet assets under current market conditions. For the three months ended March 31, 2026, we retired one compression unit representing approximately 335 of horsepower, that previously was used to provide compression services in our business. As a result, we recorded an impairment of compression equipment of $ 4 thousand for the three months ended March 31, 2026. For the three months ended March 31, 2025, we retired 17 compression units representing approximately 10,200 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 $ 3.6 million for the three months ended March 31, 2025. 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. 12 Table of Contents Identifiable Intangible Assets Identifiable intangible assets, net consisted of the following (in thousands): Customer Relationships Trade Names Total Net balance as of December 31, 2025 $ 172,430 $ 14,463 $ 186,893 J-W Power Acquisition — 5,400 5,400 Amortization expense ( 6,534 ) ( 1,213 ) ( 7,747 ) Net balance as of March 31, 2026 $ 165,896 $ 18,650 $ 184,546 Accumulated amortization of intangible assets was $ 371.5 million and $ 363.8 million as of March 31, 2026 and December 31, 2025, respectively. (6) Accrued Liabilities Components of accrued liabilities included the following (in thousands): March 31, 2026 December 31, 2025 Accrued interest expense $ 31,518 $ 36,952 Accrued unit-based compensation liability 5,716 4,094 Accrued capital expenditures 5,100 5,428 Accrued payroll and benefits 12,918 20,832 (7) Income Tax Expense The Partnership is generally not subject to federal and most state and local income taxes. During the first quarter of 2026, the Partnership acquired the stock of J-W Power, a corporate entity that is subject to federal, state, and local income taxes. The acquired assets and liabilities of J-W Power included net deferred tax liabilities of approximately $ 186.6 million. The increase in income tax expense in the first quarter of 2026 versus the first quarter of 2025 is primarily attributable to the earnings of J-W Power which are subject to corporate taxes. (8) Debt Obligations Our debt obligations, of which there is no current portion, consisted of the following (in thousands): March 31, 2026 December 31, 2025 Senior Notes 2029, aggregate principal $ 1,000,000 $ 1,000,000 Senior Notes 2033, aggregate principal 750,000 750,000 Less: deferred financing costs, net of amortization ( 19,834 ) ( 21,030 ) Total senior notes, net 1,730,166 1,728,970 Revolving credit facility 1,250,161 795,000 Total long-term debt, net $ 2,980,327 $ 2,523,970 Revolving Credit Facility 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 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 for the Partnership in an aggregate amount of up to $ 1.75 billion (subject to availability under our borrowing base), with a further potential increase of up to an additional $ 300 million. The Partnership’s obligations under the Credit Agreement are guaranteed by the guarantors party to the Credit Agreement, which currently consist of all the Partnership’s existing subsidiaries. In addition, under the Credit Agreement the Partnership’s Secured Obligations (as defined therein) are secured by: (1) substantially all of the 13 Table of Contents Partnership’s assets and substantially all of the assets of the guarantors party to the Credit Agreement, excluding real property and other customary exclusions; and (2) all of the equity interests of the Partnership’s U.S. restricted subsidiaries (subject to customary exceptions). 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 %. 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 under the facility in an amount per annum equal to 0.25 %. Amounts borrowed and repaid under the Credit Agreement may be re-borrowed, subject to borrowing base availability. The Credit Agreement permits us to make distributions of available cash to unitholders so long as (i) no default under the Credit Agreement has occurred, is continuing, or would result from the distribution; (ii) immediately prior to and after giving effect to such distribution, we are in compliance with the Credit Agreement’s financial covenants; and (iii) immediately prior to and after giving effect to such distribution, we have availability under the facility of at least $ 100 million. In addition, the Credit Agreement contains various covenants that may limit, among other things, our ability to (subject to exceptions): • grant liens; • make certain loans or investments; • incur additional indebtedness or guarantee other indebtedness; • enter into transactions with affiliates; • merge or consolidate; • sell our assets; and • make certain acquisitions. 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; and • 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. If a default exists under the Credit Agreement, the lenders will be able to accelerate the maturity on the amount then outstanding and exercise other rights and remedies. For purposes of the above covenants, EBITDA is calculated as set forth in the Credit Agreement. As of March 31, 2026, 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 made to a bank account controlled by the administrative agent. While we are not required by the terms of the Credit Agreement to use these customer remittances to reduce borrowings under the facility unless certain events of default occur under the Credit Agreement or unused availability under the facility is reduced below $ 70 million, we have in the past routinely applied such remittances to reduce borrowings under the facility. In connection with entering into the Credit Agreement, we paid certain upfront fees and arrangement fees to the arrangers, syndication agents and senior managing agents of the Credit Agreement in the amount of $ 7.9 million during the year ended December 31, 2025. These fees were capitalized to loan costs and included in other assets, and are amortized over the remaining term of the Credit Agreement. 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. Our weighted-average interest rate in effect for all borrowings under the Credit Agreement for the three months ended March 31, 2026, was 5.79 %, 14 Table of Contents and our weighted-average interest rate under the Credit Agreement as of March 31, 2026, was 5.66 %. We pay an annualized commitment fee of 0.25 % on the unused portion of the aggregate commitment. Senior Notes 2033 On September 24, 2025, the Partnership and Finance Corp co-issued the Senior Notes 2033, a $ 750.0 million aggregate principal amount of senior notes that will mature on October 1, 2033. The Senior Notes 2033 accrue interest at the rate of 6.250 % per year. 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. The indenture governing the Senior Notes 2033 (the “2033 Indenture”) contains certain financial covenants that we must comply with in order to make certain restricted payments as described in the 2033 Indenture. As of March 31, 2026, we were in compliance with such financial covenants under the 2033 Indenture. The Senior Notes 2033 are fully and unconditionally guaranteed (the “2033 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 borrows under any other credit facility or guarantees certain of our indebtedness (collectively, the “Guarantors”). The Senior Notes 2033 and the 2033 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 2033 and the 2033 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 2033. Senior Notes 2029 On March 18, 2024, the Partnership and Finance Corp co-issued the Senior Notes 2029, a $ 1.00 billion aggregate principal amount of senior notes that will mature on March 15, 2029. The Senior Notes 2029 accrue interest at the rate of 7.125 % per year. Interest on the Senior Notes 2029 is payable semi-annually in arrears on each of March 15 and September 15. The indenture governing the Senior Notes 2029 (the “2029 Indenture”) contains certain financial covenants that we must comply with in order to make certain restricted payments as described in the 2029 Indenture. As of March 31, 2026, we were in compliance with such financial covenants under the 2029 Indenture. The Senior Notes 2029 are fully and unconditionally guaranteed (the “2029 Guarantees”), jointly and severally, on a senior unsecured basis by the Guarantors. The Senior Notes 2029 and the 2029 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 2029 and the 2029 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 2029. (9) Preferred Units The Preferred Units had a face value of $ 1,000 and ranked senior to our common units with respect to distributions and liquidation rights. The holders of the Preferred Units were entitled to receive cumulative quarterly cash distributions equal to $ 24.375 per Preferred Unit. The Preferred Units were convertible, at the option of the holder, into common units in accordance with the terms of our Second Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”). As of December 31, 2025, all of the Preferred Units had been converted to our common units. 15 Table of Contents Cash Distributions We have declared and paid per-unit quarterly cash distributions to the holders of the Preferred Units of record as follows: Payment Date Distribution per Preferred Unit February 7, 2025 $ 24.375 May 9, 2025 24.375 August 8, 2025 24.375 November 7, 2025 24.375 Total 2025 distributions $ 97.500 (10) Partners’ Capital (Deficit) Common Units The changes in common units outstanding were as follows: Common Units Outstanding Number of common units outstanding, December 31, 2025 126,795,135 J-W Power Acquisition 18,175,323 Issuance of common units under the DRIP 1,900 Number of common units outstanding, March 31, 2026 144,972,358 As of March 31, 2026, 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 We have declared and paid per-unit quarterly distributions to our limited partner unitholders of record, including DER payments to holders of our phantom and restricted units, as follows (dollars in millions, except distribution per unit): Payment Date Distribution per Limited Partner Unit Amount Paid to Common Unitholders Amount Paid to Phantom and Restricted Unitholders Total Distribution February 7, 2025 $ 0.525 $ 61.7 $ 0.7 $ 62.4 May 9, 2025 0.525 61.7 0.6 62.3 August 8, 2025 0.525 64.4 0.4 64.8 November 7, 2025 0.525 64.4 0.4 64.8 Total 2025 distributions $ 2.100 $ 252.2 $ 2.1 $ 254.3 February 6, 2026 $ 0.525 $ 66.6 $ 0.5 $ 67.1 Total 2026 distributions $ 0.525 $ 66.6 $ 0.5 $ 67.1 Announced Quarterly Distribution On April 16, 2026, we announced a cash distribution of $ 0.525 per unit on our common units. The distribution will be paid on May 8, 2026, to common unitholders of record as of the close of business on April 27, 2026. DRIP 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. 16 Table of Contents Income Per Unit The computation of income per unit is based on the weighted-average number of participating securities, which includes our common units and certain equity-based awards outstanding during the applicable period. Basic income per unit is determined by dividing net income 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 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 attributable to unitholders for the period, the excess distributions are allocated to all participating securities outstanding based on their respective ownership percentages. Diluted income per unit is computed using the treasury stock method, which considers the potential issuance of limited partner units associated with our long-term incentive plan. Unvested phantom and restricted units are not included in basic income per unit, as they are not considered to be participating securities, but are included in the calculation of diluted income per unit to the extent they are dilutive. For the three months ended March 31, 2026, approximately 381,000 incremental unvested phantom and restricted units, respectively, represent the difference between our basic and diluted weighted-average common units outstanding. For the three months ended March 31, 2025, approximately 741,000 incremental unvested phantom and restricted units represent the difference between our basic and diluted weighted-average common units outstanding. (11) Revenue Recognition Disaggregation of Revenue The following table disaggregates our revenue by type of service (in thousands): Three Months Ended March 31, 2026 2025 Contract operations revenue $ 309,336 $ 239,667 Retail parts and services revenue 21,939 5,567 Total revenues $ 331,275 $ 245,234 The following table disaggregates our revenue by timing of provision of services or transfer of goods (in thousands): Three Months Ended March 31, 2026 2025 Services provided over time: Primary term $ 230,808 $ 194,533 Month-to-month 78,528 45,134 Total services provided over time 309,336 239,667 Services provided or goods transferred at a point in time 21,939 5,567 Total revenues $ 331,275 $ 245,234 Contract Balances with Customers The balances of the Partnership’s accounts receivable from contracts with customers and contract liabilities at January 1, 2025 were $ 83.1 million, net of allowances for credit losses and $ 70.5 million, respectively. 17 Table of Contents Deferred Revenue We record deferred revenue when cash payments are received or due in advance of our performance. Components of deferred revenue were as follows (in thousands): Balance sheet location March 31, 2026 December 31, 2025 Current (1) Deferred revenue $ 81,161 $ 65,013 Noncurrent Other liabilities 3,960 4,486 Total $ 85,121 $ 69,499 ________________________________ (1) We recognized $ 65.8 million of revenue during the three months ended March 31, 2026 related to our deferred revenue balance as of December 31, 2025. Performance Obligations As of March 31, 2026, the aggregate amount of transaction price allocated to unsatisfied performance obligations related to our contract operations revenue was $ 1.2 billion. We expect to recognize these remaining performance obligations as follows (in thousands): 2026 (remainder) 2027 2028 2029 Thereafter Total Remaining performance obligations $ 560,034 $ 419,041 $ 177,893 $ 45,237 $ 17,333 $ 1,219,538 (12) Related Party Transactions We provide natural gas compression and treating services to entities affiliated with Energy Transfer, which as of March 31, 2026, owned approximately 32 % of our limited partner interests and 100 % of the General Partner. Under our Partnership Agreement, our General Partner does not receive a management fee or other compensation for its role as our general partner. However, our General Partner is reimbursed for expenses incurred on our behalf. These expenses include costs allocable to us under the shared services model with Energy Transfer, as well as all other expenses necessary or appropriate to the conduct of our business that are allocable to us, as provided for in our Partnership Agreement. There is no cap on the amount that may be paid or reimbursed to our General Partner. Related party transactions from those entities affiliated with Energy Transfer on our unaudited condensed consolidated statements of operations were as follows (in thousands): Three Months Ended March 31, 2026 2025 Related-party revenues $ 15,895 $ 15,165 Expense reimbursement 1,578 306 Losses on disposition of assets — 621 Balances with related parties from those entities affiliated with Energy Transfer on our unaudited condensed consolidated balance sheets were as follows (in thousands): March 31, 2026 December 31, 2025 Related-party receivables $ 11,792 $ 1,653 Related-party payables 12,530 7,997 For the three months ended March 31, 2026, we recognized capitalized expense reimbursement of $ 0.2 million to other assets related to cloud computing arrangement ERP implementation costs. For the three months ended March 31, 2026, we recognized capitalized expenditures of $ 2.6 million to property and equipment, net. We have binding commitments under purchase orders for new compression units ordered but not received with an entity affiliated with Energy Transfer. The commitments as of March 31, 2026, were $ 76.0 million. 18 Table of Contents (13) Commitments and Contingencies (a) Major Customers No customer accounted for more than 10% of total revenues for the three months ended March 31, 2026, and one customer accounted for 11 % of total revenues for the three months ended March 31, 2025. (b) Litigation From time to time, we and our subsidiaries may be involved in various claims and litigation arising in the ordinary course of business. In management’s opinion, the resolution of such matters is not expected to have a material adverse effect on our consolidated financial position, results of operations, or cash flows. (c) Tax Contingencies Our compliance with federal, state, and local tax regulations is subject to audit by various taxing authorities. Certain taxing authorities have either claimed or issued an assessment that specific operational processes, which we and others in our industry regularly conduct, result in transactions that are subject to taxes. We and others in our industry have disputed these claims and assessments based on either existing tax statutes or published guidance by the taxing authorities. On April 13, 2026, we settled and closed the IRS’ examination of our U.S. federal income tax returns for the years 2019 and 2020. The impact of the settlement is reflected in the Partnership’s financial statements, and it is not necessary for the Partnership to issue revised information statements to unitholders as a result of the settlement. (d) Equipment Purchase Commitments Our future capital commitments are comprised of binding commitments under purchase orders for new compression units and equipment ordered but not received. 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. (e) Environmental Our operations are subject to federal, state, and local laws, rules, and regulations regarding water quality, hazardous and solid waste management, air quality control, and other environmental matters. These laws, rules, and regulations require that we conduct our operations in a specified manner and to obtain and comply with a wide variety of environmental registrations, licenses, permits, inspections, and other approvals. Failure to comply with applicable environmental laws, rules, and regulations may expose us to significant fines, penalties, and/or interruptions in operations. Our environmental policies and procedures are designed to achieve compliance with such applicable laws, rules, and regulations. 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) Reportable Segments We manage our business through one operating and reportable segment: compression services. The compression services segment provides natural gas compression and treating services to customers, using a fleet of equipment that we design, engineer, own, operate, and maintain. Our services are primarily provided under fixed-fee contracts, and all revenue is derived from within the U.S. The accounting policies of the compression services segment are the same as those described in the summary of significant accounting policies. We do not have intra-entity sales or transfers. Our chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM assesses segment performance and allocates resources based on consolidated net income, a GAAP measure, and Adjusted EBITDA, a non-GAAP measure. Although we use Adjusted EBITDA to assess segment performance and allocate resources, our primary measure is consolidated net income. All expense categories on the unaudited condensed consolidated statements of operations are significant and there are no other significant segment expenses that would require disclosure. The CODM uses consolidated net income to assess operating performance as compared to historical results, budget and forecast amounts, expected return on capital investment, and our competitors. The CODM uses this information to allocate future operating and capital expenditures. The measure of segment assets is reported on the unaudited condensed consolidated balance sheets as total consolidated assets. 19 Table of Contents (15) Recent Accounting Pronouncements In Nove mber 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) . ASU 2024-03 requires disclosure of specifie d information about certain costs and expenses in the notes to the consolidated financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 is to be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of ASU 2024-03 on our consolidated financial statements and related disclosures. 20 Table of Contents