10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(MARK ONE)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2016

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                TO                

Commission File No. 001-33078

Archrock Partners, L.P.

(Exact name of registrant as specified in its charter)

Delaware	22-3935108
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

16666 Northchase Drive
Houston, Texas	77060
(Address of principal executive offices)	(Zip Code)

(281) 836-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of October 25, 2016, there were 60,035,818 common units outstanding.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Income	5
Condensed Consolidated Statements of Partners’ Capital	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures About Market Risk	39
Item 4. Controls and Procedures	39
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	41
Item 1A. Risk Factors	41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3. Defaults Upon Senior Securities	41
Item 4. Mine Safety Disclosures	41
Item 5. Other Information	41
Item 6. Exhibits	42
SIGNATURES	43

2

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

ARCHROCK PARTNERS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for unit amounts)

(unaudited)

	September 30, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	398		$	472
Accounts receivable, trade, net of allowance of $1,305 and $2,463, respectively	71,336			85,183
Total current assets	71,734			85,655
Property, plant and equipment	2,605,853			2,661,996
Accumulated depreciation	(865,899		)	(846,213		)
Property, plant and equipment, net	1,739,954			1,815,783
Intangible and other assets, net	83,945			93,215
Total assets	$	1,895,633		$	1,994,653
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accrued liabilities	$	6,144		$	6,696
Accrued interest	23,022			12,443
Due to affiliates, net	2,830			5,980
Current portion of interest rate swaps	4,509			4,608
Total current liabilities	36,505			29,727
Long-term debt	1,370,382			1,410,382
Deferred income taxes	1,557			1,054
Other long-term liabilities	8,989			5,494
Total liabilities	1,417,433			1,446,657
Commitments and contingencies (Note 13)
Partners’ capital:
Common units, 60,122,062 and 59,796,514 units issued, respectively	478,515			538,197
General partner units, 2% interest with 1,215,925 and 1,209,562 equivalent units issued and outstanding, respectively	11,242			17,151
Accumulated other comprehensive loss	(9,674		)	(5,558		)
Treasury units, 86,244 and 74,888 common units, respectively	(1,883		)	(1,794		)
Total partners’ capital	478,200			547,996
Total liabilities and partners’ capital	$	1,895,633		$	1,994,653

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

ARCHROCK PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit amounts)

(unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
Revenue	$	135,478		$	163,293	$	426,954	$	495,389
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense) — affiliates	50,854			63,877		158,024		194,987
Depreciation and amortization	38,087			40,262		115,951		115,854
Long-lived asset impairment	7,909			7,163		22,507		12,473
Restructuring charges	1,946			—		7,293		—
Selling, general and administrative — affiliates	17,917			20,729		61,337		62,619
Interest expense	20,034			19,048		58,089		55,962
Other (income) loss, net	(890		)	585		20		(1,118		)
Total costs and expenses	135,857			151,664		423,221		440,777
Income (loss) before income taxes	(379		)	11,629		3,733		54,612
Provision for income taxes	188			131		469		702
Net income (loss)	$	(567	)	$	11,498	$	3,264	$	53,910
General partner interest in net income (loss)	$	(11	)	$	4,887	$	65	$	13,910
Common units interest in net income (loss)	$	(556	)	$	6,611	$	3,199	$	40,000
Weighted average common units outstanding used in income (loss) per common unit:
Basic	59,837			59,716		59,805		58,141
Diluted	59,837			59,716		59,805		58,141
Income (loss) per common unit:
Basic	$	(0.01	)	$	0.11	$	0.05	$	0.69
Diluted	$	(0.01	)	$	0.11	$	0.05	$	0.69
Distributions declared and paid per limited partner unit in respective periods	$	0.2850		$	0.5675	$	1.1425	$	1.6875

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

ARCHROCK PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	(567	)	$	11,498		$	3,264		$	53,910
Other comprehensive income (loss):
Interest rate swap gain (loss), net of reclassifications to earnings	3,201			(4,930		)	(4,116		)	(9,121		)
Amortization of terminated interest rate swaps	—			726			—			2,335
Total other comprehensive income (loss)	3,201			(4,204		)	(4,116		)	(6,786		)
Comprehensive income (loss)	$	2,634		$	7,294		$	(852	)	$	47,124

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

ARCHROCK PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(In thousands, except for unit amounts)

(unaudited)

														Accumulated
	Partners’ Capital													Other
	Common Units				General Partner Units				Treasury Units					Comprehensive
	$			Units	$			Units	$			Units		Loss			Total
Balance, January 1, 2015	$	668,714		55,724,022	$	19,542		1,129,221	$	(1,477	)	(61,665	)	$	(3,438	)	$	683,341
Issuance of common units for vesting of phantom units				52,224													—
Treasury units purchased									(274		)	(11,009	)				(274		)
Acquisition of a portion of Archrock's contract operations business	107,710			3,963,138	2,198			80,341									109,908
Issuance of common units	1,164			49,774													1,164
Contribution (distribution) of capital, net	564				(422		)										142
Excess of purchase price of equipment over Archrock’s cost of equipment	(11,108		)		(600		)										(11,708		)
Cash distributions	(96,402		)		(13,908		)										(110,310		)
Unit-based compensation expense	937																937
Comprehensive income (loss)	40,000				13,910									(6,786		)	47,124
Balance, September 30, 2015	$	711,579		59,789,158	$	20,720		1,209,562	$	(1,751	)	(72,674	)	$	(10,224	)	$	720,324
Balance, January 1, 2016	$	538,197		59,796,514	$	17,151		1,209,562	$	(1,794	)	(74,888	)	$	(5,558	)	$	547,996
Issuance of common units for vesting of phantom units				68,548													—
Treasury units purchased									(89		)	(11,356	)				(89		)
March 2016 Acquisition	1,799			257,000	37			5,205									1,836
Issuance of general partner units					8			1,158									8
Contribution of capital, net	3,086				118												3,204
Cash distributions	(68,569		)		(6,137		)										(74,706		)
Unit-based compensation expense	803																803
Comprehensive income (loss)	3,199				65									(4,116		)	(852		)
Balance, September 30, 2016	$	478,515		60,122,062	$	11,242		1,215,925	$	(1,883	)	(86,244	)	$	(9,674	)	$	478,200

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

ARCHROCK PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net income	$	3,264		$	53,910
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	115,951			115,854
Long-lived asset impairment	22,507			12,473
Amortization of deferred financing costs	3,397			2,861
Amortization of debt discount	927			871
Amortization of terminated interest rate swaps	—			2,335
Interest rate swaps	1,115			269
Unit-based compensation expense	803			937
Provision for doubtful accounts	2,277			1,190
Gain on sale of property, plant and equipment	(639		)	(1,496		)
Loss on non-cash consideration in March 2016 Acquisition	635			—
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, trade	11,602			(4,563		)
Other assets and liabilities	11,862			13,641
Net cash provided by operating activities	173,701			198,282
Cash flows from investing activities:
Capital expenditures	(50,945		)	(193,314		)
Payment for March 2016 Acquisition	(13,779		)	—
Proceeds from sale of property, plant and equipment	15,414			11,882
Increase in amounts due from affiliates, net	—			2,322
Net cash used in investing activities	(49,310		)	(179,110		)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	181,000			332,500
Repayments of long-term debt	(223,500		)	(238,500		)
Distributions to unitholders	(74,706		)	(110,310		)
Net proceeds from issuance of common units	—			1,164
Net proceeds from sale of general partner units	45			—
Payments for debt issuance costs	(1,721		)	(1,311		)
Payments for settlement of interest rate swaps that include financing elements	(2,344		)	(2,815		)
Purchases of treasury units	(89		)	(274		)
Increase (decrease) in amounts due to affiliates, net	(3,150		)	450
Net cash used in financing activities	(124,465		)	(19,096		)
Net increase (decrease) in cash and cash equivalents	(74		)	76
Cash and cash equivalents at beginning of period	472			295
Cash and cash equivalents at end of period	$	398		$	371
Supplemental disclosure of non-cash transactions:
Non-cash capital contribution from limited and general partner	$	793		$	8,500
Contract operations equipment acquired/exchanged, net	$	2,411		$	100,494
Common units issued in March 2016 Acquisition	$	1,799		$	—
Non-cash consideration in March 2016 Acquisition	$	3,165		$	—
Intangible assets allocated in April 2015 Contract Operations Acquisition	$	—		$	1,055
Non-cash capital contribution due to the April 2015 Contract Operations Acquisition	$	—		$	7,608
Common units issued in April 2015 Contract Operations Acquisition	$	—		$	100,267
General partner units issued in April 2015 Contract Operations Acquisition	$	—		$	2,033

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

ARCHROCK PARTNERS, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  Organization and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Archrock Partners, L.P. (“we,” “our,” “us,” or the “Partnership”) included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished includes all adjustments, consisting only of normal recurring adjustments, that are necessary to present fairly our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2015, which contains a more comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year.

Organization

Archrock General Partner, L.P. is our general partner and an indirect wholly owned subsidiary of Archrock, Inc. (individually, and together with its wholly owned subsidiaries, “Archrock”). As Archrock General Partner, L.P. is a limited partnership, its general partner, Archrock GP LLC, conducts our business and operations, and the board of directors and officers of Archrock GP LLC, which we refer to herein as our board of directors and our officers, make decisions on our behalf.

On November 3, 2015, Exterran Holdings, Inc. completed the spin-off (the “Spin-off”) of its international contract operations, international aftermarket services and global fabrication businesses into a standalone public company operating as Exterran Corporation (“Exterran”). To effect the Spin-off, Exterran Holdings, Inc. distributed, on a pro rata basis, all of the shares of Exterran common stock to the stockholders of Exterran Holdings, Inc. as of October 27, 2015. Upon the completion of the Spin-off, Exterran Holdings, Inc. was renamed “Archrock, Inc.” and, on November 4, 2015, the ticker symbol for Archrock’s common stock on the New York Stock Exchange was changed to “AROC.” Archrock continues to hold interests in us, which include the sole general partner interest and certain limited partner interests, as well as all of the incentive distribution rights. Effective on November 3, 2015, we were renamed “Archrock Partners, L.P.” and, on November 4, 2015, the ticker symbol for our common units on the Nasdaq Global Select Market was changed to “APLP.”

Comprehensive Income (Loss)

Components of comprehensive income (loss) are net income (loss) and all changes in equity during a period except those resulting from transactions with our limited partners or general partner. Our accumulated other comprehensive income (loss) consists only of derivative financial instruments. Changes in accumulated other comprehensive income (loss) represent changes in the fair value of derivative financial instruments that are designated as cash flow hedges to the extent the hedge is effective and amortization of terminated interest rate swaps. See Note 8(“Accounting for Derivatives”) for additional disclosures related to comprehensive income (loss).

Financial Instruments

Our financial instruments consist of cash, trade receivables, interest rate swaps and debt. At September 30, 2016 and December 31, 2015, the estimated fair values of these financial instruments approximated their carrying amounts as reflected in our condensed consolidated balance sheets. The fair value of our fixed rate debt was estimated based on quoted market yields in inactive markets, which are Level 2 inputs. The fair value of our floating rate debt was estimated using a discounted cash flow analysis based on interest rates offered on loans with similar terms to borrowers of similar credit quality, which are Level 3 inputs. See Note 9(“Fair Value Measurements”) for additional information regarding the fair value hierarchy.

8

The following table summarizes the carrying amount and fair value of our debt as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016				December 31, 2015
	Carrying Amount (1)		Fair Value		Carrying Amount (1)		Fair Value
Fixed rate debt	$	682,797	$	659,000	$	680,484	$	524,000
Floating rate debt	687,585		688,000		729,898		731,000
Total debt	$	1,370,382	$	1,347,000	$	1,410,382	$	1,255,000

⁽¹⁾  Carrying values are shown net of unamortized debt discounts and unamortized deferred financing costs. See Note 5(“Long-Term Debt”) for further details.

GAAP requires that all derivative instruments (including certain derivative instruments embedded in other contracts) be recognized in the balance sheet at fair value and that changes in such fair values be recognized in income (loss) unless specific hedging criteria are met. Changes in the values of derivatives that meet these hedging criteria will ultimately offset related income effects of the hedged item pending recognition in income.

Goodwill

Beginning in late 2014 and extending throughout 2015, the energy markets experienced a significant reduction in oil and natural gas prices which has had a significant impact on the financial performance and operating results of many oil and natural gas companies. Such declines accelerated in the fourth quarter of 2015, resulting in higher borrowing costs for companies and a substantial reduction in forecasted capital spending across the energy industry leading to lower projected growth rates over the short-term. Such declines impacted our future cash flow forecasts, our market capitalization, and the market capitalization of peer companies. We identified these conditions as a triggering event, which required us to perform a two-step goodwill impairment test as of December 31, 2015. Accordingly, we recorded a preliminary full impairment of our goodwill in the fourth quarter of 2015 of $127.8 million. During the first quarter of 2016, we finalized the impairment analysis which did not result in an adjustment to the preliminary impairment booked in the fourth quarter of 2015.

Income Per Common Unit

Income per common unit is computed using the two-class method. Under the two-class method, basic income per common unit is determined by dividing net income allocated to the common units after deducting the amounts allocated to our general partner (including distributions to our general partner on its incentive distribution rights) and participating securities, by the weighted average number of outstanding common units (also referred to as limited partner units) during the period. Participating securities include unvested phantom units with nonforfeitable tandem distribution equivalent rights to receive cash distributions in the quarter in which distributions are paid on common units. During periods of net loss, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses.

When computing income per common unit in periods when distributions are greater than income, the amount of the actual incentive distribution rights, if any, is deducted from net income and allocated to our general partner for the corresponding period. The remaining amount of net income, after deducting distributions to participating securities, is allocated between the general partner and common units based on how our partnership agreement allocates net losses.

When computing income per common unit in periods when income is greater than distributions, income is allocated to the general partner, participating securities and common units based on how our partnership agreement would allocate income if the full amount of income for the period had been distributed. This allocation of net income does not impact our total net income, consolidated results of operations or total cash distributions (including actual incentive distribution rights); however, it may result in our general partner being allocated additional incentive distributions for purposes of our income per unit calculation, which could reduce net income per common unit. However, as required by our partnership agreement, we determine cash distributions based on available cash and determine the actual incentive distributions allocable to our general partner based on actual distributions.

9

The following table reconciles net income used in the calculation of basic and diluted income per common unit (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	(567	)	$	11,498		$	3,264		$	53,910
Less: General partner incentive distribution rights	—			(4,753		)	—			(13,100		)
Less: General partner 2% ownership interest	11			(134		)	(65		)	(810		)
Common units interest in net income (loss)	(556		)	6,611			3,199			40,000
Less: Net income attributable to participating securities	(56		)	(49		)	(170		)	(144		)
Net income (loss) used in basic and diluted income per common unit	$	(612	)	$	6,562		$	3,029		$	39,856

The following table shows the potential common units that were included in computing diluted income per common unit (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Weighted average common units outstanding including participating securities	60,036		59,801		59,966		58,218
Less: Weighted average participating securities outstanding	(199	)	(85	)	(161	)	(77	)
Weighted average common units outstanding — used in basic income per common unit	59,837		59,716		59,805		58,141
Net dilutive potential common units issuable:
Phantom units	—		—		—		—
Weighted average common units and dilutive potential common units — used in diluted income (loss) per common unit	59,837		59,716		59,805		58,141

2.  Recent Accounting Developments

Accounting Standards Updates Not Yet Implemented

In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-15 (“Update 2016-15”) which addresses diversity in practice in that simplifies several elements of cash flow classification including how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Update 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Update 2016-15 will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. Early adoption is permitted. We are currently evaluating the impact of Update 2016-15 on our consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (“Update 2016-13”) that changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. Update 2016-13 is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. Entities will apply Update 2016-13 provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently evaluating the impact of Update 2016-13 on our consolidated financial statements.

10

In March2016, the FASB issued Accounting Standards Update No. 2016-09 (“Update 2016-09”) that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either debt or equity liabilities, and classification on the statement of cash flows. For public entities, Update 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of Update 2016-09 on our consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“Update 2016-02”) that establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new guidance, lessor accounting is largely unchanged. Update 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of Update 2016-02 on our consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“Update 2014-09”) that outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Update 2014-09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Update 2014-09 will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Early adoption is permitted for reporting periods beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach. In March2016, the FASB issued Accounting Standards Update No. 2016-08 (“Update 2016-08”), which clarifies the guidance in Update 2014-09 by providing guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. In April2016, the FASB issued Accounting Standards Update 2016-10 (“Update 2016-10”), clarifying the implementation guidance on identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Also in April2016, the FASB issued Accounting Standards Update No. 2016-11 (“Update 2016-11”), rescinding certain paragraphs pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May2016, the FASB issued Accounting Standards Update No. 2016-12 (“Update 2016-12”), clarifying implementation guidance on a few narrow areas and adds some practical expedients to the guidance. Each of these subsequent updates has the same effective date as Update 2014-09. We are currently evaluating the potential impact of Update 2014-09, Update 2016-08, Update 2016-10, Update 2016-11 and Update 2016-12 on our consolidated financial statements.

3.  Business Acquisitions

March 2016 Acquisition

On March1, 2016, we completed an acquisition of contract operations customer service agreements with four customers and a fleet of 19 compressor units used to provide compression services under those agreements comprising approximately 23,000 horsepower. The $18.8 million purchase price was funded with $13.8 million in borrowings under our revolving credit facility, a non-cash exchange of 24 compressor units for $3.2 million, and the issuance of 257,000 common units for $1.8 million. In connection with this acquisition, we issued and sold 5,205 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us. This acquisition is referred to as the “March2016 Acquisition.” During the nine months ended September 30, 2016, we incurred transaction costs of approximately $0.2 million related to the March2016 Acquisition, which is reflected in other (income) expense, net, in our condensed consolidated statement of operations.

We accounted for the March2016 Acquisition using the acquisition method, which requires, among other things, assets acquired to be recorded at their fair value on the acquisition date. The following table summarizes the purchase price allocation based on estimated fair values of the acquired assets as of the acquisition date (in thousands):

	Fair Value
Property, plant and equipment	$	14,929
Intangible assets	3,839
Purchase price	$	18,768

11

Property, Plant and Equipment and Intangible Assets Acquired

Property, plant and equipment is comprised of compressor units that will be depreciated on a straight-line basis over an estimated average remaining useful life of 15 years.

The amount of finite life intangible assets, and their associated average useful lives, was determined based on the period which the assets are expected to contribute directly or indirectly to our future cash flows, and consisted of the following:

	Amount (in thousands)		Average Useful Life
Customer related	$	3,839	2.3 years

The results of operations attributable to the assets acquired in the March2016 Acquisition have been included in our condensed consolidated financial statements since the date of acquisition.

Pro forma financial information is not presented for the March2016 Acquisition as it is immaterial to our reported results.

April 2015 Contract Operations Acquisition

On April 17, 2015, we acquired from Archrock contract operations customer service agreements with 60 customers and a fleet of 238 compressor units used to provide compression services under those agreements, comprising approximately 148,000 horsepower, or 3% (by then available horsepower) of the combined contract operations business of Archrock and us. The acquired assets also included 179 compressor units, comprising approximately 66,000 horsepower, previously leased from Archrock to us. At the acquisition date, the acquired fleet assets had a net book value of $108.8 million, net of accumulated depreciation of $59.9 million. Total consideration for the transaction was approximately $102.3 million, excluding transaction costs. In connection with this acquisition, we issued approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner. Based on the terms of the contribution, conveyance and assumption agreement, the common units and general partner units, including incentive distribution rights, we issued for this acquisition were not entitled to receive a cash distribution relating to the quarter ended March 31, 2015. This acquisition is referred to as the “April 2015 Contract Operations Acquisition.”

In connection with this acquisition, we were allocated $1.1 million finite life intangible assets associated with customer relationships of Archrock’s contract operations segment. The amounts allocated were based on the ratio of fair value of the net assets transferred to us to the total fair value of Archrock’s contract operations segment. These intangible assets are being amortized through 2024, based on the present value of income expected to be realized from these intangible assets.

Because Archrock and we are considered entities under common control, GAAP requires that we record the assets acquired and liabilities assumed from Archrock in connection with the April 2015 Contract Operations Acquisition using Archrock’s historical cost basis in the assets and liabilities. The difference between the historical cost basis of the assets acquired and liabilities assumed and the purchase price is treated as either a capital contribution or distribution. As a result, we recorded a capital contribution of $7.6 million for the April 2015 Contract Operations Acquisition during the nine months ended September 30, 2015.

An acquisition of a business from an entity under common control is generally accounted for under GAAP by the acquirer with retroactive application as if the acquisition date was the beginning of the earliest period included in the financial statements. Retroactive effect to the April 2015 Contract Operations Acquisition was impracticable because such retroactive application would have required significant assumptions in a prior period that cannot be substantiated. Accordingly, our financial statements include the assets acquired, liabilities assumed, revenue and direct operating expenses associated with the acquisition beginning on the date of such acquisition. However, the preparation of pro forma financial information allows for certain assumptions that do not meet the standards of financial statements prepared in accordance with GAAP.

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Pro Forma Financial Information

Pro forma financial information for the nine months ended September 30, 2015 has been included to give effect to the additional assets acquired in the April 2015 Contract Operations Acquisition. The April2015 Contract Operations Acquisition is presented in the pro forma financial information as though this transaction occurred as of January 1, 2015. The pro forma financial information reflects the following transactions related to the April 2015 Contract Operations Acquisition:

• our acquisition in April 2015 of certain contract operations customer service agreements, compression equipment and identifiable intangible assets from Archrock; and

• our issuance of approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner.

The pro forma financial information below is presented for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the transaction been consummated at the beginning of the period presented, nor is it necessarily indicative of future results. The pro forma financial information below was derived by adjusting our historical financial statements.

The following table shows pro forma financial information for the nine months ended September 30, 2015 (in thousands, except per unit amounts):

	Nine months ended September 30, 2015
Revenue	$	504,468
Net income	$	54,502
Basic income per common unit	$	0.67
Diluted income per common unit	$	0.67

Pro forma net income per common unit is determined by dividing the pro forma net income that would have been allocated to our common unitholders by the weighted average number of common units outstanding after the completion of the transactions included in the pro forma financial information. Pursuant to our partnership agreement, to the extent that the quarterly distributions exceed certain targets, our general partner is entitled to receive certain incentive distributions that will result in more net income proportionately being allocated to our general partner than to our common unitholders. The pro forma net income per limited partner unit calculations reflect the incentive distributions made to our general partner and a reduction of net income allocable to our limited partners of $0.3 million for the nine months ended September 30, 2015, which reflects the amount of additional incentive distributions that would have occurred if the pro forma limited partner units had been outstanding as of January 1, 2015.

4.  Related Party Transactions

We are a party to an omnibus agreement with Archrock, our general partner and others (as amended and/or restated, the “Omnibus Agreement”), which includes, among other things:

• certain agreements not to compete between Archrock and its affiliates, on the one hand, and us and our affiliates, on the other hand;

• Archrock’s obligation to provide all operational staff, corporate staff and support services reasonably necessary to operate our business and our obligation to reimburse Archrock for such services;

• the terms under which we, Archrock, and our respective affiliates may transfer, exchange or lease compression equipment among one another;

• Archrock’s grant to us of a license to use certain intellectual property, including our logo; and

• Archrock’s and our obligations to indemnify each other for certain liabilities.

The Omnibus Agreement will terminate upon a change of control of Archrock GP LLC, our general partner or us, and certain provisions of the Omnibus Agreement will terminate upon a change of control of Archrock.

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Purchase of New Compression Equipment from Archrock

In connection with the Spin-off, Archrock contributed its fabrication business to Exterran and we entered into a separate supply agreement with Exterran under which we are obligated to purchase our requirements of newly-fabricated compression equipment from Exterran and its affiliates, subject to certain exceptions. For the nine months ended September 30, 2016, we purchased $26.3 million of newly-manufactured compression equipment from Exterran. Prior to the November 2015 amendment and restatement of our Omnibus Agreement, in connection with the Spin-off, we were able to purchase newly-fabricated compression equipment from Archrock or its affiliates at Archrock’s cost to fabricate such equipment plus a fixed margin. During the nine months ended September 30, 2015, we purchased $146.3 million of newly-fabricated compression equipment from Archrock. Transactions between us and Archrock and its affiliates are transactions between entities under common control. Under GAAP, transfers of assets and liabilities between entities under common control are to be initially recorded on the books of the receiving entity at the carrying value of the transferor. Any difference between consideration given and the carrying value of the assets or liabilities is treated as a capital distribution or contribution. As a result, the newly-fabricated compression equipment purchased during the nine months ended September 30, 2015 was recorded in our condensed consolidated balance sheets as property, plant and equipment of $134.6 million, which represents the carrying value of Archrock’s affiliates that sold it to us, and as a distribution of equity of $11.7 million, which represents the fixed margin we paid above the carrying value in accordance with the Omnibus Agreement. During the nine months ended September 30, 2016 and 2015, Archrock contributed to us $0.8 million and $8.1 million, respectively, primarily related to the completion of overhauls on compression equipment that was exchanged with us or contributed to us and where overhauls were in progress on the date of exchange or contribution.

Transfer, Exchange or Lease of Compression Equipment with Archrock

If Archrock determines in good faith that we or Archrock’s contract operations services business need to transfer, exchange or lease compression equipment between Archrock and us, the Omnibus Agreement permits such equipment to be transferred, exchanged or leased if it will not cause us to breach any existing contracts, suffer a loss of revenue under an existing compression services contract or incur any unreimbursed costs. In consideration for such transfer, exchange or lease of compression equipment, the transferee will either (1) transfer to the transferor compression equipment equal in value to the appraised value of the compression equipment transferred to it, (2) agree to lease such compression equipment from the transferor or (3) pay the transferor an amount in cash equal to the appraised value of the compression equipment transferred to it.

During the nine months ended September 30, 2016, pursuant to the terms of the Omnibus Agreement, we transferred ownership of 354 compressor units, totaling approximately168,600 horsepower with a net book value of approximately $75.4 million, to Archrock. In exchange, Archrock transferred ownership of259 compressor units, totaling approximately 121,600 horsepower with a net book value of approximately $77.8 million, to us. During the nine months ended September 30, 2015, pursuant to the terms of the Omnibus Agreement, we transferred ownership of 349 compressor units, totaling approximately 112,800 horsepower with a net book value of approximately $54.7 million, to Archrock. In exchange, Archrock transferred ownership of 260 compressor units, totaling approximately 99,600 horsepower with a net book value of approximately $46.8 million, to us. During the nine months ended September 30, 2016 and 2015, we recorded capital contributions of approximately $2.4 million and capital distributions of $7.9 million, respectively, related to the differences in net book value on the exchanged compression equipment. No customer contracts were included in the transfers. Under the terms of the Omnibus Agreement, such transfers must be of equal appraised value, as defined in the Omnibus Agreement, with any difference being settled in cash.

At September 30, 2016, we had equipment on lease to Archrock with an aggregate cost and accumulated depreciation of $0.2 million and $0.1 million, respectively. At December 31, 2015, we had equipment on lease to Archrock with an aggregate cost and accumulated depreciation of $10.1 million and $3.3 million, respectively. During each of the nine month periods ended September 30, 2016 and 2015, we had revenue of $0.1 million from Archrock related to the lease of our compression equipment. During the nine months ended September 30, 2016 and 2015, we had cost of sales of $0.2 million and $1.5 million, respectively, with Archrock related to the lease of Archrock’s compression equipment.

Reimbursement of Operating and SG&A Expense

Archrock provides all operational staff, corporate staff and support services reasonably necessary to run our business. These services may include, without limitation, operations, marketing, maintenance and repair, periodic overhauls of compression equipment, inventory management, legal, accounting, treasury, insurance administration and claims processing, risk management, health, safety and environmental, information technology, human resources, credit, payroll, internal audit, taxes, facilities management, investor relations, enterprise resource planning system, training, executive, sales, business development and engineering.

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Archrock charges us for costs that are directly attributable to us. Costs that are indirectly attributable to us and Archrock’s other operations are allocated among Archrock’s other operations and us. The allocation methodologies vary based on the nature of the charge and have historically included, among other things, revenue, headcount and horsepower. We believe that the allocation methodologies used to allocate indirect costs to us are reasonable.

5.  Long-Term Debt

Long-term debt consisted of the following (in thousands):

	September 30, 2016			December 31, 2015
Revolving credit facility due May 2018	$	538,000		$	580,500
Term loan facility due May 2018	150,000			150,000
Less: Deferred financing costs, net of amortization	(415		)	(602		)
	149,585			149,398
6% senior notes due April 2021	350,000			350,000
Less: Debt discount, net of amortization	(3,379		)	(3,862		)
Less: Deferred financing costs, net of amortization	(4,623		)	(5,396		)
	341,998			340,742
6% senior notes due October 2022	350,000			350,000
Less: Debt discount, net of amortization	(4,229		)	(4,673		)
Less: Deferred financing costs, net of amortization	(4,972		)	(5,585		)
	340,799			339,742
Long-term debt	$	1,370,382		$	1,410,382

Revolving Credit Facility and Term Loan Facility

In February 2015, we amended our senior secured credit agreement (the “Credit Agreement”), which among other things, increased the borrowing capacity under the revolving credit facility by $250.0 million to $900.0 million. In May 2016, we further amended our Credit Agreement to, among other things, decrease the borrowing capacity under the revolving credit facility by $75.0 million to $825.0 million. Prior to this amendment, we were able to increase the aggregate commitments under the Credit Agreement by up to an additional $50 million subject to certain conditions, including the approval of the lenders. As a result of this amendment and subject to certain conditions, including the approval of the lenders, we are able to increase the aggregate commitments under the Credit Agreement by up to an additional $125 million. During the nine months ended September 30, 2016 and 2015, we incurred transaction costs of $1.7 million and $1.3 million, respectively, related to these amendments of our Credit Agreement. These costs were recorded in intangible and other assets, net, and are being amortized to interest expense over the term of the facility. The Credit Agreement, which matures in May 2018, also includes a $150.0 million term loan facility. As of September 30, 2016, we had undrawn capacity of $287.0 million under our revolving credit facility. Our Credit Agreement limits our Total Debt (as defined in the Credit Agreement) to EBITDA ratio (as defined in the Credit Agreement) to not greater than 5.95 to 1.0. As a result of this limitation, $274.3 million of the $287.0 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of September 30, 2016.

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6% Senior Notes Due April2021 and 6% Senior Notes Due October2022

In March 2013, we issued $350.0 million aggregate principal amount of 6% senior notes due April 2021 (the “2013 Notes”). In April 2014, we issued $350.0 million aggregate principal amount of 6% senior notes due October 2022 (the “2014 Notes”).The 2013 Notes and the 2014 Notes are guaranteed on a senior unsecured basis by all of our existing subsidiaries (other than Archrock Partners Finance Corp., which is a co-issuer of the 2013 Notes and the 2014 Notes) and certain of our future subsidiaries. The 2013 Notes and the 2014 Notes and the guarantees, respectively, are our and the guarantors’ general unsecured senior obligations, rank equally in right of payment with all of our and the guarantors’ other senior obligations, and are effectively subordinated to all of our and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such indebtedness. In addition, the 2013 Notes and the 2014 Notes and guarantees are effectively subordinated to all existing and future indebtedness and other liabilities of any future non-guarantor subsidiaries. All of our subsidiaries are 100% owned, directly or indirectly, by us and guarantees by our subsidiaries are full and unconditional (subject to customary release provisions which are discussed in our Annual Report on Form 10-K for the year ended December 31, 2015) and constitute joint and several obligations. We have no assets or operations independent of our subsidiaries, and there are no significant restrictions upon our subsidiaries’ ability to distribute funds to us. Archrock Partners Finance Corp. has no operations and does not have revenue other than as may be incidental as co-issuer of the 2013 Notes and the 2014 Notes. Because we have no independent operations, the guarantees are full and unconditional (subject to customary release provisions) and constitute joint and several obligations of our subsidiaries other than Archrock Partners Finance Corp., and as a result we have not included consolidated financial information of our subsidiaries.

6.  Cash Distributions

We make distributions of available cash (as defined in our partnership agreement) from operating surplus in the following manner:

• first, 98% to all common unitholders, pro rata, and 2% to our general partner, until each unit has received a distribution of $0.4025;

• second, 85% to all common unitholders, pro rata, and 15% to our general partner, until each unit has received a distribution of $0.4375;

• third, 75% to all common unitholders, pro rata, and 25% to our general partner, until each unit has received a total of $0.5250; and

• thereafter, 50% to all common unitholders, pro rata, and 50% to our general partner.

The following table summarizes our distributions per unit for 2015 and 2016:

Period Covering	Payment Date	Distribution per Limited Partner Unit		Total Distribution (1)
1/1/2015 — 3/31/2015	May 15, 2015	$	0.5625	$	35.9	million
4/1/2015 — 6/30/2015	August 14, 2015	0.5675		39.1		million
7/1/2015 — 9/30/2015	November 13, 2015	0.5725		39.7		million
10/1/2015 — 12/31/2015	February 12, 2016	0.5725		39.7		million
1/1/2016 — 3/31/2016	May 13, 2016	0.2850		17.5		million
4/1/2016 — 6/30/2016	August 15, 2016	0.2850		17.5		million

⁽¹⁾    Includes distributions to our general partner on its incentive distribution rights.

On October 31, 2016, our board of directors approved a cash distribution of $0.2850 per limited partner unit, or approximately $17.5 million. The distribution covers the period from July 1, 2016 through September 30, 2016. The record date for this distribution is November 10, 2016 and payment is expected to occur on November 14, 2016.

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7.  Unit-Based Compensation

Long-Term Incentive Plan

Our board of directors adopted the Archrock Partners, L.P. Long-Term Incentive Plan (the “Plan”) in October 2006 for the benefit of the employees, directors and consultants of us, Archrock and our respective affiliates. A maximum of 1,035,378 common units are available for the issuance of common unit options, restricted units, unit awards and phantom units under the Plan. The Plan is administered by the compensation committee of our board of directors (the “Plan Administrator”).

Phantom units are notional units that entitle the grantee to receive common units upon the vesting of such phantom units or, at the discretion of the Plan Administrator, cash equal to the fair market value of the underlying common units. Phantom units granted under the Plan may include nonforfeitable tandem distribution equivalent rights to receive cash distributions on unvested phantom units in the quarter in which distributions are paid on common units. Phantom units generally vest one-third per year on each of the first three anniversaries of the grant date.

Phantom Units

The following table presents phantom unit activity during the nine months ended September 30, 2016:

	Phantom Units (in thousands)		Weighted Average Grant Date Fair Value per Unit
Phantom units outstanding, January 1, 2016	77		$	27.01
Granted	190		7.84
Vested	(68	)	18.59
Phantom units outstanding, September 30, 2016	199		11.58

As of September 30, 2016, we expect $2.3 million of unrecognized compensation cost related to unvested phantom units to be recognized over the weighted-average period of 2.2 years.

8.  Accounting for Derivatives

We are exposed to market risks associated with changes in interest rates. We use derivative financial instruments to minimize the risks and/or costs associated with financial activities by managing our exposure to interest rate fluctuations on a portion of our debt obligations. We do not use derivative financial instruments for trading or other speculative purposes.

Interest Rate Risk

At September 30, 2016, we were a party to the following interest rate swaps, which were entered into to offset changes in expected cash flows due to fluctuations in the associated variable interest rates:

Expiration Date	Notional Value (in millions)
May 2018	$	300
May 2019	100
May 2020	100
	$	500

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As of September 30, 2016, the weighted average effective fixed interest rate on our interest rate swaps was 1.6%. We have designated these interest rate swaps as cash flow hedging instruments so that any change in their fair values is recognized as a component of comprehensive income (loss) and is included in accumulated other comprehensive income (loss) to the extent the hedge is effective. As the swap terms substantially coincide with the hedged item and are expected to offset changes in expected cash flows due to fluctuations in the variable rate, we currently do not expect a significant amount of ineffectiveness on these hedges. We perform quarterly calculations to determine whether the swap agreements are still effective and to calculate any ineffectiveness. We recorded an immaterial amount of interest expense during the nine months ended September 30, 2016 as compared to $0.4 million of interest income during the nine months ended September 30, 2015 due to ineffectiveness related to interest rate swaps. We estimate that $4.3 million of deferred losses attributable to interest rate swaps and included in our accumulated other comprehensive income (loss) at September 30, 2016, will be reclassified into earnings as interest expense at then-current values during the next twelve months as the underlying hedged transactions occur. Cash flows from derivatives designated as hedges are classified in our condensed consolidated statements of cash flows under the same category as the cash flows from the underlying assets, liabilities or anticipated transactions, unless the derivative contract contains a significant financing element; in this case, the cash settlements for these derivatives are classified as cash flows from financing activities in our condensed consolidated statements of cash flows.

The following tables present the effect of derivative instruments on our consolidated financial position and results of operations (in thousands):

		Fair Value Asset (Liability)
	Balance Sheet Location	September 30, 2016			December 31, 2015
Derivatives designated as hedging instruments:
Interest rate swaps	Intangible and other assets, net	$	—		$	45
Interest rate swaps	Current portion of interest rate swaps	(4,509		)	(4,608		)
Interest rate swaps	Other long-term liabilities	(4,413		)	(1,421		)
Total derivatives		$	(8,922	)	$	(5,984	)

	Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives			Location of Loss  Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)	Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)
Derivatives designated as cash flow hedges:
Interest rate swaps
Three months ended September 30, 2016	$	2,049		Interest expense	$	(1,152	)
Three months ended September 30, 2015	(6,100		)	Interest expense	(1,896		)
Nine months ended September 30, 2016	(7,401		)	Interest expense	(3,285		)
Nine months ended September 30, 2015	(12,098		)	Interest expense	(5,312		)

The counterparties to our derivative agreements are major international financial institutions. We monitor the credit quality of these financial institutions and do not expect non-performance by any counterparty, although such non-performance could have a material adverse effect on us. We have no specific collateral posted for our derivative instruments. The counterparties to our interest rate swaps are also lenders under our senior secured credit facility and, in that capacity, share proportionally in the collateral pledged under the related facility.

9.  Fair Value Measurements

The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories:

• Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement.

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• Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers.

• Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information.

The following table presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015, with pricing levels as of the date of valuation (in thousands):

	September 30, 2016							December 31, 2015
	Level 1		Level 2			Level 3		Level 1		Level 2			Level 3
Interest rate swaps asset	$	—	$	—		$	—	$	—	$	45		$	—
Interest rate swaps liability	—		(8,922		)	—		—		(6,029		)	—

Our interest rate swaps are recorded at fair value utilizing a combination of the market approach and income approach to estimate fair value based on forward LIBOR curves.

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2016 and December 31, 2015, with pricing levels as of the date of valuation (in thousands):

	September 30, 2016						December 31, 2015
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Impaired long-lived assets	$	—	$	—	$	1,170	$	—	$	—	$	2,789

Our estimate of the impaired long-lived assets’ fair value was primarily based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use. We discounted the expected proceeds, net of selling and other carrying costs, using a weighted average disposal period of four years.

10.  Long-Lived Asset Impairment

We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressor units from our active fleet, indicate that the carrying amount of an asset may not be recoverable.

During the three and nine months ended September 30, 2016, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 45 and 205 idle compressor units totaling approximately 14,000 and 67,000 horsepower would be retired from the active fleet during the three and nine months ended September 30, 2016, respectively. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $4.7 million and a $18.7 million asset impairment to reduce the book value of each unit to its estimated fair value during the three and nine months ended September 30, 2016, respectively. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the nine months ended September 30, 2016, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.2 million and $3.8 million during the three and nine months ended September 30, 2016, respectively, to reduce the book value of each unit to its estimated fair value.

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During the three and nine months ended September 30, 2015, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 80 and 130 idle compressor units totaling approximately 17,000 and 34,000 horsepower would be retired from the active fleet during the three and nine months ended September 30, 2015, respectively. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $4.0 million and an $8.9 million asset impairment to reduce the book value of each unit to its estimated fair value during the three and nine months ended September 30, 2015, respectively. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the three and nine months ended September 30, 2015, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.2 million and $3.6 million during the three and nine months ended September 30, 2015 respectively, to reduce the book value of each unit to its estimated fair value.

11.  Restructuring Charges

In the first quarter of 2016, Archrock determined to undertake a cost reduction program to reduce its on-going operating expenses, including workforce reductions and closure of certain make ready shops. These actions were the result of Archrock’s review of its business and efforts to efficiently manage cost and maintain its business in line with current and expected activity levels and anticipated make ready demand in the U.S. market. During the three and nine months ended September 30, 2016, we incurred $1.9 million and $7.3 million, respectively, of restructuring charges comprised of an allocation of expenses related to severance benefits and consulting fees associated with this cost reduction plan from Archrock to us pursuant to the terms of the Omnibus Agreement based on horsepower. These charges are reflected as restructuring charges in our condensed consolidated statements of operations.

12.  Unit Transactions

On September 30, 2016, we issued and sold 1,158 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us.

On March 1, 2016, the Partnership completed the March 2016 Acquisition. A portion of the $18.8 million purchase price was funded through the issuance of 257,000 common units for $1.8 million. In connection with this acquisition, we issued and sold 5,205 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us.

In May 2015, we entered into an At-The-Market Equity Offering Sales Agreement (the “ATM Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC. During the nine months ended September 30, 2015, we sold 49,774 common units for net proceeds of $1.2 million pursuant to the ATM Agreement. We did not make any sales under the ATM Agreement during 2016 and the ATM Agreement expired pursuant to its terms on June 21, 2016.

In April 2015, we completed the April 2015 Contract Operations Acquisition from Archrock. In connection with this acquisition, we issued approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner.

As of September 30, 2016, Archrock owned 23,582,056 common units and 1,215,925 general partner units, collectively representing approximately 40% interest in us.

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13.  Commitments and Contingencies

In 2011, the Texas Legislature enacted changes related to the appraisal of natural gas compressors for ad valorem tax purposes by expanding the definitions of “Heavy Equipment Dealer” and “Heavy Equipment” effective from the beginning of 2012 (the “Heavy Equipment Statutes”). Under the revised statutes, we believe we are a Heavy Equipment Dealer, that our natural gas compressors are Heavy Equipment and that we, therefore, are required to file our ad valorem taxes under this new methodology. We further believe that our natural gas compressors are taxable under the Heavy Equipment Statutes in the counties where we maintain a business location and keep natural gas compressors instead of where the compressors may be located on January 1 of a tax year. As a result of this new methodology, our ad valorem tax expense (which is reflected in our condensed consolidated statements of operations as a component of cost of sales (excluding depreciation and amortization expense)) includes a benefit of $10.9 million during the nine months ended September 30, 2016. Since the change in methodology became effective in 2012, we have recorded an aggregate benefit of $46.1 million as of September 30, 2016, of which approximately $11.0 million has been agreed to by a number of appraisal review boards and county appraisal districts and $35.1 million has been disputed and is currently in litigation. A large number of appraisal review boards denied our position, although some accepted it, and we filed 82 petitions for review in the appropriate district courts with respect to the 2012 tax year, 93 petitions for review in the appropriate district courts with respect to the 2013 tax year, 103 petitions for review in the appropriate district courts with respect to the 2014 tax year, 111 petitions for review in the appropriate district courts with respect to the 2015 tax year and 92 petitions for review in the appropriate district courts with respect to the 2016 tax year.

To date, only five cases have advanced to the point of trial or submission of summary judgment motions on the merits, and only three cases have been decided, with two of the decisions having been rendered by the same presiding judge. All three of those decisions were appealed, and all three of the appeals have been decided by intermediate appellate courts.

On October 17, 2013, the 143rd Judicial District Court of Loving County, Texas ruled in EXLP Leasing LLC & EES Leasing LLC v. Loving County Appraisal District that our wholly-owned subsidiary, Archrock Partners Leasing LLC, formerly known as EXLP Leasing LLC (“EXLP Leasing”), and Archrock’s subsidiary, Archrock Services Leasing LLC, formerly known as EES Leasing LLC (“EES Leasing”), are Heavy Equipment Dealers and that their compressors qualify as Heavy Equipment, but the district court further held that the Heavy Equipment Statutes were unconstitutional as applied to EXLP Leasing’s and EES Leasing’s compressors. EXLP Leasing and EES Leasing appealed the district court’s constitutionality holding to the Eighth Court of Appeals in El Paso, Texas. On September 23, 2015, the Eighth Court of Appeals ruled in EXLP Leasing’s and EES Leasing’s favor by overruling the 143rd District Court’s constitutionality ruling. The Eighth Court of Appeals also ruled, however, that EXLP Leasing’s and EES Leasing’s natural gas compressors are taxable in the counties where they were located on January 1 of the tax year at issue.

On October 28, 2013, the 143rd Judicial District Court of Ward County, Texas ruled in EES Leasing LLC & EXLP Leasing LLC v. Ward County Appraisal District that EXLP Leasing and EES Leasing are Heavy Equipment Dealers and that their compressors qualify as Heavy Equipment, but the court held that the Heavy Equipment Statutes were unconstitutional as applied to their compressors. EXLP Leasing and EES Leasing appealed the district court’s constitutionality holding to the Eighth Court of Appeals in El Paso, Texas, and the Ward County Appraisal District cross-appealed the district court’s rulings that EXLP Leasing’s and EES Leasing’s compressors qualify as Heavy Equipment. On September 23, 2015, the Eighth Court of Appeals ruled in EXLP Leasing’s and EES Leasing’s favor by overruling the 143rd District Court’s constitutionality ruling and affirming its ruling that EXLP Leasing’s and EES Leasing’s compressors qualify as Heavy Equipment. The Eighth Court of Appeals also ruled, however, that EXLP Leasing’s and EES Leasing’s natural gas compressors are taxable in the counties where they were located on January 1 of the tax year at issue. The Ward County Appraisal District and Loving County Appraisal District each filed (on January 27, 2016 and February 10, 2016, respectively) a petition asking the Texas Supreme Court to review its respective Eighth Court of Appeals decision. On March 11, 2016, EXLP Leasing and EES Leasing filed responses to the appraisal districts’ petitions and cross-petitions for review in each case asking the Texas Supreme Court to also review the Eighth Court of Appeals’ determination that natural gas compressors are taxable in the counties where they were located on January 1 of the tax year at issue. The Ward County Appraisal District filed its response to EXLP Leasing’s and EES Leasing’s cross-petition on June 6, 2016, and EXLP Leasing and EES Leasing filed their reply on June 21, 2016. The Loving County Appraisal District filed its response to EXLP Leasing’s and EES Leasing’s cross-petition on May 27, 2016, and EXLP Leasing and EES Leasing filed their reply on June 10, 2016.

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On March 18, 2014, the 10th Judicial District Court of Galveston, Texas ruled in EXLP Leasing LLC & EES Leasing LLC v. Galveston Central Appraisal District that EXLP Leasing and EES Leasing are Heavy Equipment Dealers and that their compressors qualify as Heavy Equipment, but the court held the Heavy Equipment Statutes unconstitutional as applied to their compressors. EXLP Leasing and EES Leasing appealed the district court’s constitutionality holding to the Fourteenth Court of Appeals in Houston, Texas. On August 25, 2015, the Fourteenth Court of Appeals issued a ruling stating that EXLP Leasing’s and EES Leasing’s compressors are taxable in the counties where they were located on January 1 of the tax year at issue, and it remanded the case to the district court for further evidence on the issue of whether the Heavy Equipment Statutes are constitutional as applied to EXLP Leasing’s and EES Leasing’s compressors. On November 24, 2015, EXLP Leasing and EES Leasing filed a petition asking the Texas Supreme Court to review this decision. On March 21, 2016, the Galveston Central Appraisal District filed a response to EXLP Leasing’s and EES Leasing’s petition for review, and EXLP Leasing and EES Leasing filed their reply on April 26, 2016.

In EES Leasing v. Irion County Appraisal District, EES Leasing and the appraisal district each filed motions for summary judgment in the 51st Judicial District Court of Irion County, Texas concerning the applicability and constitutionality of the Heavy Equipment Statutes. On May 20, 2014, the district court entered an order denying both motions for summary judgment, holding that a fact issue existed as to the applicability of the Heavy Equipment Statutes to the one compressor at issue. The presiding judge for the 51st District Court has since consolidated the 2012 tax year case with EES Leasing’s 2013 tax year case, which also included EXLP Leasing as a party. On August 27, 2015, the presiding judge abated the combined case, EES Leasing LLC and EXLP Leasing LLC v. Irion County Appraisal District, until the final resolution of the appellate cases considering the constitutionality of the Heavy Equipment Statutes, or further order of the court.

EXLP Leasing and EES Leasing also filed a motion for summary judgment in EES Leasing LLC & EXLP Leasing LLC v. Harris County Appraisal District, pending in the 189th Judicial District Court of Harris County, Texas. The court heard arguments on the motion on December 6, 2013 but has yet to rule. No trial date has been set.

On June 3, 2015, the Fourth Court of Appeals in San Antonio, Texas issued a decision reversing the 406th District Court’s dismissal of EXLP Leasing’s and EES Leasing’s tax appeals for want of jurisdiction. In EXLP Leasing LLC et. al v. Webb County Appraisal District, United Independent School District (“United ISD”) intervened as a party in interest and sought to dismiss the lawsuit arguing that the district court was without jurisdiction to hear the appeal. Under Section 42.08(b) of the Texas Tax Code, a property owner must pay before the delinquency date the lesser of (1) the amount of taxes due on the portion of the taxable value of the property that is not in dispute or (2) the amount of taxes due on the property under the order from which the appeal is taken. EXLP Leasing and EES Leasing paid zero taxes to Webb County because the entire amount of tax assessed by Webb County was in dispute. Instead, as required by the Heavy Equipment Statutes and Texas Comptroller forms, EXLP Leasing and EES Leasing paid taxes on the compressors at issue to Victoria County, where they maintain their place of business and keep natural gas compressors. The Webb County Appraisal District and United ISD contested EXLP Leasing’s and EES Leasing’s position that the Heavy Equipment Statutes contain situs provisions requiring that taxes be paid where the dealer has a business location and keeps its natural gas compressors, instead arguing that taxes are payable to the county where each compressor is located as of January 1 of the tax year at issue. The district court granted United ISD’s motion to dismiss on April 1, 2014 and declined EXLP Leasing’s and EES Leasing’s motion to reconsider. The Fourth Court of Appeals reversed, holding that, based on the plain meaning of Section 42.08(b)(1), and because the entire amount was in dispute, EXLP Leasing and EES Leasing were not required to prepay disputed taxes to invoke the trial court’s jurisdiction. The Fourth Court of Appeals denied United ISD’s request for a rehearing. On September 29, 2015, United ISD filed a petition for review in the Texas Supreme Court. On December 4, 2015, the Texas Supreme Court denied United ISD’s petition for review.

United ISD has four delinquency lawsuits pending against EXLP Leasing and EES Leasing in the 49th District Court of Webb County, Texas. The cases have been abated pending the resolution of EXLP Leasing’s and EES Leasing’s 2012 tax year case pending in the 406th Judicial District Court of Webb County, Texas.

On September 2, 2016, the Texas Supreme Court requested that consolidated merits briefs be filed in EXLP Leasing’s and EES Leasing’s cases against the Loving County Appraisal District, Ward County Appraisal District, and Galveston Central Appraisal District, as well as two similar cases involving different taxpayers. On September 19, 2016, the Supreme Court entered a consolidated briefing schedule for the five cases. Consolidated briefing is scheduled to be completed by February 7, 2017.

We continue to believe that the revised statutes are constitutional as applied to natural gas compressors and that under the revised statutes our natural gas compressors are taxable in the counties where we maintain a business location and keep natural gas compressors. Recognizing the similarity of the issues and that these cases will ultimately be resolved by the Texas appellate courts, most of the remaining 2012-2016 district court cases have been formally or effectively abated pending a decision from the Texas Supreme Court.

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If our appeals are ultimately unsuccessful, or if the Texas Supreme Court determines to review the matter and rules against us,

we would be required to pay ad valorem taxes up to the aggregate benefit we have recorded, and the additional ad valorem tax payments may also be subject to substantial penalties and interest. In addition, while we do not expect the ultimate determination of the issue of where the natural gas compressors are taxable under the Heavy Equipment Statutes would have an impact on the amount of taxes due, we could be subject to substantial penalties if we are unsuccessful on this issue. Also, if we are unsuccessful in our litigation with the appraisal districts, or if legislation is enacted in Texas that repeals or alters the Heavy Equipment Statutes such that in the future we do not qualify as a Heavy Equipment Dealer or our compressors do not qualify as Heavy Equipment, then we would likely be required to pay these ad valorem taxes under the old methodology going forward, which would increase our quarterly cost of sales expense up to approximately the amount of our then most recent quarterly benefit recorded. If this litigation is resolved against us in whole or in part, or if in the future we do not qualify as a Heavy Equipment Dealer or our compressors do not qualify as Heavy Equipment because of new or revised Texas statutes, we will incur additional taxes and could be subject to substantial penalties and interest, which would impact our future results of operations and cash flows, including our cash available for distribution.

In the ordinary course of business, we are also involved in various other pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these other actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to make cash distributions to our unitholders. However, because of the inherent uncertainty of litigation, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to make cash distributions to our unitholders.

We are subject to a number of state and local taxes that are not income-based. As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due. We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability. As of September 30, 2016 and December 31, 2015, we had accrued $1.3 million and $1.1 million, respectively, for the outcomes of non-income based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We also believe the likelihood is remote that the impact of potential unasserted claims from non-income based tax audits could be material to our consolidated financial position, but it is possible that the resolution of future audits could be material to our results of operations or cash flows for the period in which the resolution occurs.

14.  Subsequent Events

On October 31, 2016, we agreed to acquire from Archrock contract operations customer service agreements with 63 customers and a fleet of approximately 270  compressor units used to provide compression services under those agreements, comprising approximately 150,000 horsepower, or approximately 4% (by then available horsepower) of the combined U.S. contract operations business of Archrock and us (the “November 2016 Contract Operations Acquisition”). Total consideration for the transaction will be $85 million, excluding transaction costs. The consideration to be paid will consist entirely of newly issued common units and general partner units. The number of common units and general partner units to be issued by us will be determined by the daily volume weighted average price of our common units averaged over the thirty trading days preceding the closing date. This transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the fourth-quarter of 2016. Based on the terms of the contribution, conveyance and assumption agreement, the common units and general partner units, including incentive distribution rights, we issue for this acquisition are not entitled to receive a cash distribution relating to the quarter ended September 30, 2016.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes thereto included in the Condensed Consolidated Financial Statements in Part I, Item 1 (“Financial Statements”) of this Quarterly Report on Form 10-Q and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q are forward-looking statements, including, without limitation, statements regarding Archrock Partners, L.P.’s (together with its subsidiaries, “we,” “our,” “us,” or the “Partnership”) business growth strategy and projected costs; future financial position; the sufficiency of available cash flows to fund continuing operations and make cash distributions; the expected amount of our capital expenditures; anticipated cost savings; future revenue, gross margin and other financial or operational measures related to our business; the future value of our equipment; plans and objectives of our management for our future operations; and any potential contribution of additional assets from Archrock, Inc. (individually, and together with its wholly owned subsidiaries, “Archrock”) to us. You can identify many of these statements by looking for words such as “believe,” “expect,” “intend,” “project,” “anticipate,” “estimate,” “will continue” or similar words or the negative thereof.

Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this Quarterly Report on Form 10-Q. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations will prove to be correct. Known material factors that could cause our actual results to differ materially from the expectations reflected in these forward-looking statements include the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2015, and those set forth from time to time in our filings with the Securities and Exchange Commission (“SEC”), which are available through our website at www.archrock.com and through the SEC’s website at www.sec.gov, as well as the following risks and uncertainties:

• conditions in the oil and natural gas industry, including a sustained decrease in the level of supply or demand for oil or natural gas or a sustained low price of oil or natural gas;

• our reduced profit margins or the loss of market share resulting from competition or the introduction of competing technologies by other companies;

• our dependence on Archrock to provide personnel and services, including its ability to hire, train and retain key employees and to cost effectively perform the services necessary to conduct our business;

• changes in economic or political conditions, including terrorism and legislative changes;

• the inherent risks associated with our operations, such as equipment defects, impairments, malfunctions and natural disasters;

• loss of our status as a partnership for United States of America (“U.S.”) federal income tax purposes;

• the risk that counterparties will not perform their obligations under our financial instruments;

• the financial condition of our customers;

• our ability to implement certain business and financial objectives, such as:

• growing our asset base and asset utilization;

• winning profitable new business;

• integrating acquired businesses;

• generating sufficient cash;

• accessing the capital markets at an acceptable cost; and

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• purchasing additional contract operations contracts and equipment from Archrock;

• liability related to the provision of our services;

• changes in governmental safety, health, environmental or other regulations, which could require us to make significant expenditures; and

• our level of indebtedness and ability to fund our business.

All forward-looking statements included in this Quarterly Report on Form 10-Q are based on information available to us on the date of this Quarterly Report on Form 10-Q. 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 cautionary statements contained throughout this Quarterly Report on Form 10-Q.

General

We are a Delaware limited partnership formed in June 2006 and are the market leader in the U.S. full-service natural gas compression business. Our contract operations services primarily include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining equipment to provide natural gas compression services to our customers.

Archrock Spin-off Transaction

On November 3, 2015, Exterran Holdings, Inc. completed the spin-off (the “Spin-off”) of its international contract operations, international aftermarket services and global fabrication businesses into a standalone public company operating as Exterran Corporation (“Exterran”). To effect the Spin-off, Exterran Holdings, Inc. distributed, on a pro rata basis, all of the shares of Exterran common stock to the stockholders of Exterran Holdings, Inc. as of October 27, 2015. Upon the completion of the Spin-off, Exterran Holdings, Inc. was renamed “Archrock, Inc.” and, on November 4, 2015, the ticker symbol for Archrock’s common stock on the New York Stock Exchange was changed to “AROC.” Archrock continues to hold interests in us, which include the sole general partner interest and certain limited partner interests, as well as all of the incentive distribution rights. Effective on November 3, 2015, we were renamed “Archrock Partners, L.P.” and, on November 4, 2015, the ticker symbol for our common units on the Nasdaq Global Select Market was changed to “APLP.”

March 2016 Acquisition

On March1, 2016, we completed an acquisition of contract operations customer service agreements with four customers and a fleet of 19 compressor units used to provide compression services under those agreements comprising approximately 23,000 horsepower. The $18.8million purchase price was funded with $13.8million in borrowings under our revolving credit facility, a non-cash exchange of approximately 24 compressor units for $3.2million, and the issuance of 257,000 common units for $1.8million. In connection with this acquisition, we issued and sold 5,205 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us. This acquisition is referred to as the “March2016 Acquisition.”

April 2015 Contract Operations Acquisition

On April 17, 2015, we acquired from Archrock contract operations customer service agreements with 60 customers and a fleet of 238 compressor units used to provide compression services under those agreements, comprising approximately 148,000 horsepower, or 3% (by then available horsepower) of the combined contract operations business of Archrock and us. The acquired assets also included 179 compressor units, comprising approximately 66,000 horsepower, previously leased from Archrock to us. At the acquisition date, the acquired fleet assets had a net book value of $108.8 million, net of accumulated depreciation of $59.9 million. Total consideration for the transaction was approximately $102.3 million, excluding transaction costs. In connection with this acquisition, we issued approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner. Based on the terms of the contribution, conveyance and assumption agreement, the common units and general partner units, including incentive distribution rights, we issued for this acquisition were not entitled to receive a cash distribution relating to the quarter ended March 31, 2015. This acquisition is referred to as the “April 2015 Contract Operations Acquisition.”

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Omnibus Agreement

We are a party to an omnibus agreement with Archrock, our general partner and others (as amended and/or restated, the “Omnibus Agreement”), which includes, among other things:

• certain agreements not to compete between Archrock and its affiliates, on the one hand, and us and our affiliates, on the other hand;

• Archrock’s obligation to provide all operational staff, corporate staff and support services reasonably necessary to operate our business and our obligation to reimburse Archrock for such services;

• the terms under which we, Archrock, and our respective affiliates may transfer, exchange or lease compression equipment among one another;

• Archrock’s grant to us of a license to use certain intellectual property, including our logo; and

• Archrock’s and our obligations to indemnify each other for certain liabilities.

For further discussion of the Omnibus Agreement, please see Note 4(“Related Party Transactions”) to our Financial Statements.

Overview

Industry Conditions and Trends

Our business environment and corresponding operating results are affected by the level of energy industry spending for the exploration, development and production of oil and natural gas reserves in the U.S. Spending by oil and natural gas exploration and production companies is dependent upon these companies’ forecasts regarding the expected future supply, demand and pricing of oil and natural gas products as well as their estimates of risk-adjusted costs to find, develop and produce reserves. Oil and natural gas prices and the level of drilling and exploration activity can be volatile. For example, oil and natural gas exploration and development activity and the number of well completions typically decline when there is a significant reduction in oil and natural gas prices or significant instability in energy markets. Our revenue, earnings and financial position are affected by, among other things, market conditions that impact demand and pricing for natural gas compression, our customers’ decisions between using our services or our competitors’ services, our customers’ decisions regarding whether to own and operate the equipment themselves and the timing and consummation of any acquisition of additional contract operations customer service agreements and equipment from Archrock or others. Although we believe our business is typically less impacted by commodity prices than certain other oil and natural gas service providers, changes in oil and natural gas exploration and production spending normally result in changes in demand for our services.

Natural gas consumption in the U.S. for the twelve months ended July 31, 2016increased by approximately 0.2% to 27,239 billion cubic feet (“Bcf”) compared to 27,188 Bcf for the twelve months ended July 31, 2015. The U.S. Energy Information Administration (“EIA”) forecasts that total U.S. natural gas consumption will increase by approximately 2% in 2016 compared to 2015. The EIA estimates that the U.S. natural gas consumption level will be approximately 30 trillion cubic feet (“Tcf”) in 2040, or 15% of the projected worldwide total of approximately 203 Tcf.

Natural gas marketed production in the U.S. for the twelve months ended July 31, 2016increased by approximately 1% to 28,668 Bcf compared to 28,498 Bcf for the twelve months ended July 31, 2015. The EIA forecasts that total U.S. natural gas marketed production will decrease by approximately 2% in 2016 compared to 2015. The EIA estimates that the U.S. natural gas production level will be approximately 35 Tcf in 2040, or 17% of the projected worldwide total of approximately 202 Tcf.

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Historically, oil and natural gas prices in the U.S. have been volatile. For example, the Henry Hub spot price for natural gas was $2.84 per million British thermal unit (“MMBtu”) at September 30, 2016, which was approximately 25% and 15%higher than prices at December 31, 2015 and September 30, 2015, respectively, and the U.S. natural gas liquid composite price was $4.92 per MMBtu for the month of July 2016, which was approximately 16%higher and 1%higher than prices for the months of December 2015 and September 2015, respectively. While prices at September 30, 2016 have improved relative to the comparable periods above, lower natural gas and natural gas liquids prices during 2015 and the first nine months of 2016 as compared to 2014 prices have caused many companies to reduce their natural gas drilling and production activities from their 2014 levels in more mature dry gas areas and select shale plays in the U.S. We provide a significant amount of contract operations services to these areas, which led to a decline in our contract operations business during 2015 and the first nine months of 2016 which is expected to continue for the remainder of 2016. This has also led to a continued decrease in capital investment and in the number of new gas wells drilled by exploration and production companies in the first nine months of 2016 compared to the first nine months of 2015. In addition, the West Texas Intermediate crude oil spot price was $47.72 per barrel at September 30, 2016, which was approximately 29%higher and 6%higher than prices at December 31, 2015 and September 30, 2015, respectively. While the price at September 30, 2016 has improved relative to the comparable periods above, lower West Texas Intermediate crude oil prices during 2015 and the first nine months of 2016 as compared to 2014 prices have resulted in a continued decrease in capital investment and in the number of new oil wells drilled by exploration and production companies in the first nine months of 2016 compared to the first nine months of 2015. Because we provide a significant amount of contract operations services related to the production of associated gas from oil wells and the use of gas lift to enhance production of oil from oil wells, our operations and our levels of operating horsepower are also impacted by crude oil drilling and production activity.

During periods of lower oil or natural gas prices, our customers may not be able to recover the full amount of their drilling and production costs in the regions in which we operate. As a result, our customers may cease production in existing wells and decline to drill new wells, which would lower their demand for our services. Additionally, some of our midstream customers may provide their gathering, transportation and related services to a limited number of companies in the oil and gas production business. The loss by these midstream customers of their key customers could reduce demand for their services and result in a deterioration of their financial condition, which would in turn decrease their demand for our services. A reduction in the demand for our services could result in our customers seeking to preserve capital by canceling contracts or determining not to enter into new contract operations service contracts, which could force us to reduce our pricing substantially. As a result of the significant decline in oil and natural gas prices since the third quarter of 2014, U.S. producers reduced their capital budgets for 2015 and have further reduced capital spending for drilling activity in 2016. In 2015 and the first three quarters of 2016, we experienced a decline in operating horsepower and an increase in pricing pressure from our customers, but we experienced improved contract operations gross margin percentage and lower selling, general and administrative expense in the third quarter of 2016 compared to the fourth quarter of 2015, attributable in part to our cost management efforts. Additionally, the level of new orders increased in the second and third quarters of 2016 compared to the first quarter of 2016. If the recent improvement in market conditions is sustained, we expect a moderation of horsepower returns for the remainder of 2016. However, we continue to expect additional operating horsepower declines during the remainder of 2016, and we may also continue to experience pricing pressure from our customers, which is expected to result in a decline in our contract operations business in 2016 compared to 2015. We also anticipate investing less capital in new fleet units in 2016 than we did in 2015.

A 1% decrease in average operating horsepower of our contract operations fleet during the nine months ended September 30, 2016 would have resulted in a decrease of approximately $4.3 million and $2.7 million in our revenue and gross margin (defined as revenue less cost of sales, excluding depreciation and amortization expense), respectively. Gross margin is a non-GAAP financial measure. For a reconciliation of gross margin to net income, its most directly comparable financial measure, calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”), please read “— Non-GAAP Financial Measures.”

Archrock intends for us to be the primary long-term growth vehicle for its contract operations business and may, but is not obligated, to offer us the opportunity to purchase additional assets from its contract operations business in the future. Likewise, we are not required to purchase any additional assets of such business. The consummation of any future purchase of additional assets of Archrock’s contract operations business and the timing of any such purchase will depend upon, among other things, our ability to reach an agreement with Archrock regarding the terms of such purchase, which will require the approval of the conflicts committee of our board of directors. The timing of any such transaction would also depend on, among other things, market and economic conditions and our access to additional debt and equity capital. Any future acquisition of assets from Archrock may increase or decrease our operating performance, financial position and liquidity. Unless otherwise indicated, this discussion of performance trends and outlook excludes any future potential transfers of additional contract operations customer service agreements and equipment from Archrock to us.

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Operating Highlights

The following table summarizes total available horsepower, total operating horsepower, average operating horsepower and horsepower utilization percentages (in thousands, except percentages):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Total Available Horsepower (at period end)(1)(2)	3,221		3,383		3,221		3,383
Total Operating Horsepower (at period end)(1)(3)	2,762		3,107		2,762		3,107
Average Operating Horsepower	2,751		3,119		2,842		3,094
Horsepower Utilization:
Spot (at period end)	86	%	92	%	86	%	92	%
Average	84	%	93	%	86	%	94	%

⁽¹⁾  Includes compressor units comprising approximately 6,000 and 1,000 horsepower leased from Archrock as of September 30, 2016 and 2015, respectively. Excludes compressor units comprising approximately 100 and 1,000 horsepower leased to Archrock as of September 30, 2016 and 2015, respectively (see Note 4(“Related Party Transactions”) to our Financial Statements).

⁽²⁾  Available horsepower is defined as idle and operating horsepower. New units completed by a third party manufacturer that have been delivered to us are included in the fleet.

⁽³⁾  Operating horsepower is defined as horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue.

Non-GAAP Financial Measures

Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include the non-GAAP financial measures of gross margin and distributable cash flow.

We define gross margin as total revenue less cost of sales (excluding depreciation and amortization expense). Gross margin is included as a supplemental disclosure because it is a primary measure used by our management to evaluate the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations. We believe gross margin is important because it focuses on the current operating performance of our operations and excludes the impact of the prior historical costs of the assets acquired or constructed that are utilized in those operations, the indirect costs associated with our selling, general and administrative (“SG&A”) activities, the impact of our financing methods and income taxes. Depreciation and amortization expense may not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs from current operating activity. As an indicator of our operating performance, gross margin should not be considered an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.

Gross margin has certain material limitations associated with its use as compared to net income (loss). These limitations are primarily due to the exclusion of interest expense, depreciation and amortization expense, SG&A expense and impairments. Each of these excluded expenses is material to our condensed consolidated statements of operations. Because we intend to finance a portion of our operations through borrowings, interest expense is a necessary element of our costs and our ability to generate revenue. Additionally, because we use capital assets, depreciation expense is a necessary element of our costs and our ability to generate revenue, and SG&A expenses are necessary to support our operations and required partnership activities. To compensate for these limitations, management uses this non-GAAP measure as a supplemental measure to other GAAP results to provide a more complete understanding of our performance.

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The following table reconciles our net income to gross margin (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
Net income (loss)	$	(567	)	$	11,498	$	3,264	$	53,910
Depreciation and amortization	38,087			40,262		115,951		115,854
Long-lived asset impairment	7,909			7,163		22,507		12,473
Restructuring charges	1,946			—		7,293		—
Selling, general and administrative — affiliates	17,917			20,729		61,337		62,619
Interest expense	20,034			19,048		58,089		55,962
Other (income) loss, net	(890		)	585		20		(1,118		)
Provision for income taxes	188			131		469		702
Gross margin	$	84,624		$	99,416	$	268,930	$	300,402

We define distributable cash flow as net income (loss) (a) plus depreciation and amortization expense, impairment charges, restructuring charges, expensed acquisition costs, non-cash SG&A costs, and interest expense (b) less cash interest expense (excluding amortization of deferred financing fees, amortization of debt discount and non-cash transactions related to interest rate swaps) and maintenance capital expenditures, and (c) excluding gains or losses on asset sales and other items. Distributable cash flow is a supplemental financial measure that management and, we believe, external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess our operating performance as compared to other publicly traded partnerships without regard to historical cost basis. We also believe distributable cash flow is an important financial measure because it allows management and external users of our financial statements the ability to compute the ratio of distributable cash flow to the cash distributions declared to all unitholders, including incentive distribution rights, to determine the rate at which the distributable cash flow covers the distribution. Our distributable cash flow may not be comparable to a similarly titled measure of another company because other entities may not calculate distributable cash flow in the same manner.

Distributable cash flow is not a measure of financial performance under GAAP, and should not be considered in isolation or as an alternative to net income (loss), cash flows from operating activities and other measures determined in accordance with GAAP. The GAAP measure most directly comparable to distributable cash flow is net income. Items excluded from distributable cash flow are significant and necessary components to the operations of our business, and, therefore, distributable cash flow should only be used as a supplemental measure of our operating performance.

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The following table reconciles our net income to distributable cash flow (in thousands, except ratios):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	(567	)	$	11,498		$	3,264		$	53,910
Depreciation and amortization	38,087			40,262			115,951			115,854
Long-lived asset impairment	7,909			7,163			22,507			12,473
Restructuring charges	1,946			—			7,293			—
Non-cash selling, general and administrative — affiliates	323			98			803			937
Interest expense	20,034			19,048			58,089			55,962
Expensed acquisition costs	—			—			172			302
Less: (Gain) loss on sale of property, plant and equipment	(795		)	566			(639		)	(1,496		)
Less: Loss on non-cash consideration in March 2016 Acquisition	—			—			635			—
Less: Cash interest expense	(18,449		)	(17,780		)	(54,994		)	(52,441		)
Less: Maintenance capital expenditures	(4,785		)	(15,691		)	(18,710		)	(41,064		)
Distributable cash flow	$	43,703		$	45,164		$	134,371		$	144,437
Distributions declared to all unitholders for the period, including incentive distribution rights	$	17,513		$	39,682		$	52,539		$	114,669
Distributable cash flow coverage(1)	2.50		x	1.14		x	2.56		x	1.26		x

⁽¹⁾  Defined as distributable cash flow for the period divided by distributions declared to all unitholders for the period, including incentive distribution rights.

The following table reconciles our net cash provided by operating activities to distributable cash flow (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net cash provided by operating activities	$	64,813		$	78,187		$	173,701		$	198,282
Provision for doubtful accounts	(705		)	(721		)	(2,277		)	(1,190		)
Restructuring charges	1,946			—			7,293			—
Expensed acquisition costs	—			—			172			302
Payments for settlement of interest rate swaps that include financing elements	(754		)	(938		)	(2,344		)	(2,815		)
Maintenance capital expenditures	(4,785		)	(15,691		)	(18,710		)	(41,064		)
Changes in assets and liabilities	(16,812		)	(15,673		)	(23,464		)	(9,078		)
Distributable cash flow	$	43,703		$	45,164		$	134,371		$	144,437

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Summary of Results

Net income.  We generated a net loss of $0.6 million as compared to net income of $11.5 million during the three months ended September 30, 2016 and 2015, respectively. We generated net income of $3.3 million and $53.9 million during the nine months ended September 30, 2016 and 2015, respectively. The change in net income (loss) during the three months ended September 30, 2016 compared to the three months ended September 30, 2015 was primarily due to a $14.8 million decrease in gross margin and a $1.9 million increase in restructuring charges, partially offset by a $2.8 million decrease in SG&A expense and a $2.2 million decrease in depreciation and amortization. The decrease in net income during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 was primarily due to a $31.5 million decrease in gross margin, a $7.3 million increase in restructuring charges, and a $10.0 million increase in long-lived asset impairment.

Distributable cash flow.  Our distributable cash flow was $43.7 million and $45.2 million during the three months ended September 30, 2016 and 2015, respectively, and $134.4 million and $144.4 million during the nine months ended September 30, 2016 and 2015, respectively, and distributable cash flow coverage (distributable cash flow for the period divided by distributions declared to all unitholders for the period, including incentive distribution rights) was 2.50x and 1.14x during the three months ended September 30, 2016 and 2015, respectively, and 2.56x and 1.26x during the nine months ended September 30, 2016 and 2015, respectively. Distributable cash flow during the three months ended September 30, 2016 compared to the three months ended September 30, 2015 decreased primarily due to a $14.8 million decrease in gross margin, partially offset by a $2.6 million decrease in cash SG&A expense and a $10.9 million decrease in maintenance capital expenditures. Distributable cash flow during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 decreased primarily due to a $31.5 million decrease in gross margin, partially offset by a $22.4 million decrease in maintenance capital expenditures. For a reconciliation of distributable cash flow to net income and net cash provided by operating activities, its most directly comparable financial measures calculated and presented in accordance with GAAP, please read “— Non-GAAP Financial Measures.”

Financial Results of Operations

The Three Months Ended September 30, 2016 Compared to the Three Months Ended September 30, 2015

The following table summarizes our revenue, gross margin, gross margin percentage, expenses and net income (dollars in thousands):

	Three Months Ended September 30,
	2016			2015
Revenue	$	135,478		$	163,293
Gross margin(1)	84,624			99,416
Gross margin percentage(2)	62		%	61		%
Expenses:
Depreciation and amortization	38,087			40,262
Long-lived asset impairment	7,909			7,163
Restructuring charges	1,946			—
Selling, general and administrative — affiliates	17,917			20,729
Interest expense	20,034			19,048
Other (income) loss, net	(890		)	585
Provision for income taxes	188			131
Net income (loss)	$	(567	)	$	11,498

⁽¹⁾  Defined as revenue less cost of sales, excluding depreciation and amortization expense. For a reconciliation of gross margin to net income (loss), its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “— Non-GAAP Financial Measures.”

⁽²⁾  Defined as gross margin divided by revenue.

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Revenue.  The decrease in revenue during the three months ended September 30, 2016 compared to the three months ended September 30, 2015 was primarily due to a decline in average operating horsepower and a decrease in rates, driven by a decrease in customer demand due to current market conditions. Average operating horsepower decreased12% from approximately 3,119,000 during the three months ended September 30, 2015 to approximately 2,751,000 during the three months ended September 30, 2016.

Gross margin.  The decrease in gross margin during the three months ended September 30, 2016 compared to the three months ended September 30, 2015 was primarily due to the decrease in revenue explained above, partially offset by a decrease in cost of sales driven by a decrease in repair and maintenance expense and a decrease in lube oil expense. These cost decreases were primarily driven by the decrease in average operating horsepower explained above, a decrease in commodity prices and efficiency gains in lube oil consumption, and cost management initiatives. Gross margin percentage increased primarily due to a decrease in costs associated with the start-up of units, cost management initiatives and the decrease in lube oil expense explained above.

Depreciation and amortization.  The decrease in depreciation and amortization expense during the three months ended September 30, 2016 compared to the three months ended September 30, 2015 was primarily due to a decrease in depreciation expense from units fully reserved or retired and assets previously impaired.

Long-lived asset impairment.  During the three months ended September 30, 2016, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 45 idle compressor units totaling approximately 14,000 horsepower would be retired from the active fleet. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $4.7 million asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the three months ended September 30, 2016, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.2 million during the three months ended September 30, 2016 to reduce the book value of each unit to its estimated fair value.

During the three months ended September 30, 2015, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 80 idle compressor units totaling approximately 17,000 horsepower would be retired from the active fleet. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $4.0 million asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the three months ended September 30, 2015, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.2 million during the three months ended September 30, 2015 to reduce the book value of each unit to its estimated fair value.

Restructuring charges.  In the first quarter of 2016, Archrock determined to undertake a cost reduction program to reduce its on-going operating expenses, including workforce reductions and closure of certain make ready shops. These actions were the result of Archrock’s review of its business and efforts to efficiently manage cost and maintain its business in line with current and expected activity levels and anticipated make ready demand in the U.S. market. During the three months ended September 30, 2016, we incurred $1.9 million of restructuring charges comprised of an allocation of expenses related to severance benefits and consulting fees associated with this cost reduction plan from Archrock to us pursuant to the terms of the Omnibus Agreement based on horsepower and other factors.

SG&A — affiliates.  SG&A expenses are primarily comprised of an allocation of expenses, including costs for personnel support and related expenditures, from Archrock to us pursuant to the terms of the Omnibus Agreement. The decrease in SG&A expense was primarily due to a decrease in costs allocated to us by Archrock. SG&A expenses represented 13% of revenue during both the three months ended September 30, 2016 and 2015.

Interest expense.  The increase in interest expense during the three months ended September 30, 2016 compared to the three months ended September 30, 2015 was primarily due to an increase in interest rates period over period.

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Other income (loss), net.  The change in other income (loss), net, was primarily driven by a $0.8 million gain on sale of property, plant and equipment during the three months ended September 30, 2016 as compared to a $0.6 million loss on sale of property, plant and equipment during the three months ended September 30, 2015.

Provision for income taxes.  The increase in tax expense during the three months ended September 30, 2016, compared to the three months ended September 30, 2015, was primarily due to an inability to fully benefit the loss subject to state level taxation.

The Nine Months EndedSeptember 30, 2016 Compared to the Nine Months EndedSeptember 30, 2015

The following table summarizes our revenue, gross margin, gross margin percentage, expenses and net income (dollars in thousands):

	Nine Months Ended September 30,
	2016			2015
Revenue	$	426,954		$	495,389
Gross margin(1)	268,930			300,402
Gross margin percentage(2)	63		%	61		%
Expenses:
Depreciation and amortization	115,951			115,854
Long-lived asset impairment	22,507			12,473
Restructuring charges	7,293			—
Selling, general and administrative — affiliates	61,337			62,619
Interest expense	58,089			55,962
Other (income) expense, net	20			(1,118		)
Provision for income taxes	469			702
Net income	$	3,264		$	53,910

⁽¹⁾  Defined as revenue less cost of sales, excluding depreciation and amortization expense. For a reconciliation of gross margin to net income (loss), its most directly comparable financial measure calculated and presented in accordance with GAAP, please read “— Non-GAAP Financial Measures.”

⁽²⁾  Defined as gross margin divided by revenue.

Revenue.  The decrease in revenue during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 was primarily due to a decline in average operating horsepower and a decrease in rates, driven by a decrease in customer demand due to current market conditions, and a decrease in rebillable freight revenue, partially offset by an increase in revenue due to the inclusion of the results from the April 2015 Contract Operations Acquisition. Average operating horsepower decreased by 8% from approximately 3,094,000 during the nine months ended September 30, 2015 to approximately 2,842,000 during the nine months ended September 30, 2016.

Gross margin.  The decrease in gross margin during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 was primarily due to the decrease in revenue explained above, partially offset by decrease in cost of sales driven by a decrease in repair and maintenance expense and a decrease in lube oil expense. These cost decreases were primarily driven by the decrease in average operating horsepower explained above, a decrease in commodity prices and efficiency gains in lube oil consumption, and cost management initiatives. Gross margin percentage increased primarily due to a decrease in costs associated with the start-up of units, cost management initiatives and the decrease in lube oil expense explained above.

Depreciation and amortization.  Depreciation and amortization expense remained relatively flat during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 due to an increase in depreciation expense from fleet additions, partially offset by decreased depreciation on assets impaired during the nine months ended September 30, 2016 and the fourth quarter of 2015.

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Long-lived asset impairment.  During the nine months ended September 30, 2016, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 205 idle compressor units totaling approximately 67,000 horsepower would be retired from the active fleet. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded an $18.7 million asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the nine months ended September 30, 2016, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.8 million during the nine months ended September 30, 2016 to reduce the book value of each unit to its estimated fair value.

During the nine months ended September 30, 2015, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 130 idle compressor units totaling approximately 34,000 horsepower would be retired from the active fleet. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded an $8.9 million asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the nine months ended September 30, 2015, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.6 million during the nine months ended September 30, 2015 to reduce the book value of each unit to its estimated fair value.

Restructuring charges.  In the first quarter of 2016, Archrock determined to undertake a cost reduction program to reduce its on-going operating expenses, including workforce reductions and closure of certain make ready shops. These actions were the result of Archrock’s review of its business and efforts to efficiently manage cost and maintain its business in line with current and expected activity levels and anticipated make ready demand in the U.S. market. During the nine months ended September 30, 2016, we incurred $7.3 million of restructuring charges comprised of an allocation of expenses related to severance benefits and consulting fees associated with this cost reduction plan from Archrock to us pursuant to the terms of the Omnibus Agreement based on horsepower and other factors.

SG&A — affiliates.  SG&A expenses are primarily comprised of an allocation of expenses, including costs for personnel support and related expenditures, from Archrock to us pursuant to the terms of the Omnibus Agreement. The decrease in SG&A expense was primarily due to a decrease in costs allocated to us by Archrock, partially offset by a $1.1 million increase in bad debt expense. SG&A expenses represented 14% and 13% of revenue during the nine months ended September 30, 2016 and 2015, respectively.

Interest expense.  The increase in interest expense during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 was primarily due to an increase in the average balance of long-term debt.

Other income (loss), net.  The change in other income (loss), net, was primarily driven by a decrease in gain on sale of property, plant and equipment of $0.9 million and a $0.6 million loss on non-cash consideration in the March 2016 Acquisition during the nine months ended September 30, 2016.

Provision for income taxes. During the nine months ended September 30, 2016, we recorded the settlement of a state audit, which was offset by the inability to fully tax benefit the taxable loss subject to state level taxation. During the nine months ended September 30, 2015, we recorded a tax benefit for a state rate reduction, which was offset by tax expense on income subject to state level taxation.

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Liquidity and Capital Resources

The following tables summarize our sources and uses of cash during the nine months ended September 30, 2016 and 2015, and our cash and working capital as of the end of the periods presented (in thousands):

	Nine Months Ended September 30,
	2016			2015
Net cash provided by (used in):
Operating activities	$	173,701		$	198,282
Investing activities	(49,310		)	(179,110		)
Financing activities	(124,465		)	(19,096		)
Net change in cash and cash equivalents	$	(74	)	$	76

	September 30, 2016		December 31, 2015
Cash and cash equivalents	$	398	$	472
Working capital	35,229		55,928

Operating Activities.  The decrease in net cash provided by operating activities was primarily due to the decrease in gross margin and an increase in restructuring charges, partially offset by a decrease in accounts receivable in the current period as compared to an increase in accounts receivable in the prior period.

Investing Activities.  The decrease in net cash used in investing activities during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 was primarily due to a $142.4 million decrease in capital expenditures, partially offset by a $13.8 million payment for the March 2016 Acquisition. Capital expenditures during the nine months ended September 30, 2016 were $50.9 million, consisting of $32.2 million for fleet growth capital and $18.7 million for compressor maintenance activities.

Financing Activities.  The increase in net cash used in financing activities during the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 was primarily due to $42.5 million of net repayments of long-term debt during the nine months ended September 30, 2016 compared to $94.0 million of net borrowings of long-term debt during the nine months ended September 30, 2015, a decrease in amounts due to affiliates, net of $3.2 million during the nine months ended September 30, 2016 as compared to an increase in amounts due to affiliates, net of $0.5 million during the nine months ended September 30, 2015, and a decrease of $1.2 million in net proceeds from the issuance of common units, partially offset by a $35.6 million decrease in distributions to unitholders.

Working Capital.  The decrease in working capital at September 30, 2016 compared to December 31, 2015 was primarily due to a $13.8 milliondecrease in accounts receivable, and a $10.6 millionincrease in accrued interest partially offset by a $3.2 milliondecrease in due to affiliates, net.

Capital Requirements.  The natural gas compression business is capital intensive, requiring significant investment to maintain and upgrade existing operations. Our capital spending is dependent on the demand for our services and the availability of the type of compression equipment required for us to render those services to our customers. Our capital requirements have consisted primarily of, and we anticipate will continue to consist of, the following:

• growth capital expenditures, which are made to expand or to replace partially or fully depreciated assets or to expand the operating capacity or revenue generating capabilities of existing or new assets, whether through construction, acquisition or modification; and

• maintenance capital expenditures, which are made to maintain the existing operating capacity of our assets and related cash flows further extending the useful lives of the assets.

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A majority of our growth capital expenditures are related to the acquisition cost of new compressor units that we add to our fleet. In addition to the cost of new compressor units, growth capital expenditures can also include the upgrading of major components on an existing compressor unit where the current configuration of the compressor unit is no longer in demand and the compressor is not likely to return to an operating status without the capital expenditures. These latter expenditures substantially modify the operating parameters of the compressor unit such that it can be used in applications for which it previously was not suited. Maintenance capital expenditures are related to major overhauls of significant components of a compressor unit, such as the engine, compressor and cooler, that return the components to a like new condition, but do not modify the applications for which the compressor unit was designed.

Without giving effect to any equipment we may acquire pursuant to any future acquisitions, we currently plan to make approximately $65 million to $80 million in capital expenditures during 2016, including (1) approximately $45 million to $55 million on growth capital expenditures and (2) approximately $20 million to $25 million on equipment maintenance capital expenditures. Archrock manages its and our respective fleets as one pool of compression equipment from which we can each readily fulfill our respective customers’ service needs. When we or Archrock are advised of a contract operations services opportunity, Archrock reviews both our and its fleet for an available and appropriate compressor unit. The majority of the idle compression equipment required for servicing these contract operations services has been and is currently held by Archrock. The owner of the equipment being transferred is required to pay the costs associated with making the idle equipment suitable for the proposed customer and then has generally leased the equipment to the recipient of the equipment or exchanged the equipment for other equipment of the recipient. Because Archrock has owned the majority of such equipment, Archrock has generally had to bear a larger portion of the maintenance capital expenditures associated with making transferred equipment ready for service. For equipment that is then leased, the maintenance capital cost is a component of the lease rate that is paid under the lease. If we acquire more compression equipment, we expect that more of our equipment will be available to satisfy our or Archrock’s customer requirements. As a result, we expect that our maintenance capital expenditures will continue to increase and that our lease expense will decrease.

In addition, our capital requirements include funding distributions to our unitholders, which we anticipate will be funded through cash provided by operating activities and borrowings under our senior secured credit facility. Given our objective of long-term growth through acquisitions, growth capital expenditure projects and other internal growth projects, we anticipate that over time we will continue to invest capital to grow and acquire assets. We expect to actively consider a variety of assets for potential acquisitions and growth projects. We expect to fund these future capital expenditures with borrowings under our senior secured credit facility and the issuance of additional debt and equity securities, as appropriate, given market conditions. The timing of future capital expenditures will be based on the economic environment, including the availability of debt and equity capital. We expect that we will be able to generate cash or borrow adequate amounts of cash under our senior secured credit facility to meet our liquidity needs through December 31, 2016; however, to the extent we are not able to satisfy our liquidity needs with cash from operations or borrowings under the senior secured credit facility, we may seek additional external financing.

Our Ability to Grow Depends on Our Ability to Access External Growth Capital.  We expect that we will rely primarily upon external financing sources, including our senior secured credit facility and the issuance of debt and equity securities, rather than cash reserves established by our general partner, to fund our acquisitions and growth capital expenditures. Our ability to access the capital markets may be restricted at a time when we would like, or need, to do so, which could have an impact on our ability to grow.

We intend to distribute all of our available cash to our unitholders. Available cash is reduced by cash reserves established by our general partner to provide for the proper conduct of our business, including future capital expenditures. To the extent we are unable to finance growth externally and we are unwilling to establish cash reserves to fund future acquisitions, our cash distribution policy will significantly impair our ability to grow. Because we distribute all of our available cash, we may not grow as quickly as businesses that reinvest their available cash to expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or growth capital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain our per unit distribution level, which in turn may impact the available cash that we have to distribute for each unit. There are no limitations in our partnership agreement or in the terms of our senior secured credit facility on our ability to issue additional units, including units ranking senior to our common units.

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Long-Term Debt.  In February 2015, we amended our Credit Agreement, which among other things, increased the borrowing capacity under the revolving credit facility by $250.0 million to $900.0 million. In May 2016, we further amended our Credit Agreement to, among other things, decrease the borrowing capacity under the revolving credit facility by $75.0 million to $825.0 million. Prior to this amendment, we were able to increase the aggregate commitments under the Credit Agreement by up to an additional $50 million subject to certain conditions, including the approval of the lenders. As a result of this amendment and subject to certain conditions, including the approval of the lenders, we are able to increase the aggregate commitments under the Credit Agreement by up to an additional $125 million. The Credit Agreement, which matures in May 2018, also includes a $150.0 million term loan facility. As of September 30, 2016, we had undrawn capacity of $287.0 million under our revolving credit facility. Our Credit Agreement limits our Total Debt (as defined in the Credit Agreement) to EBITDA ratio (as defined in the Credit Agreement) to not greater than 5.95 to 1.0. As a result of this limitation, $274.3 million of the $287.0 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of September 30, 2016.

The revolving credit and term loan facilities bear interest at a base rate or the London Interbank Offered Rate (“LIBOR”), at our option, plus an applicable margin. Depending on our leverage ratio, the applicable margin for the revolving and term loans varies (i) in the case of LIBOR loans, from 2.0% to 3.0% and (ii) in the case of base rate loans, from 1.0% to 2.0%. The base rate is the highest of the prime rate announced by Wells Fargo Bank, National Association, the Federal Funds Effective Rate plus 0.5% and one-month LIBOR plus 1.0%. At September 30, 2016, all amounts outstanding under these facilities were LIBOR loans and the applicable margin was 3.0%. The weighted average annual interest rate on the outstanding balance under these facilities at September 30, 2016 and 2015, excluding the effect of interest rate swaps, was 3.6% and 2.7%, respectively. During the nine months ended September 30, 2016 and 2015, the average daily debt balance under these facilities was $733.7 million and $659.1 million, respectively.

Borrowings under the Credit Agreement are secured by substantially all of the U.S. personal property assets of us and our Significant Domestic Subsidiaries (as defined in the Credit Agreement), including all of the membership interests of our Domestic Subsidiaries (as defined in the Credit Agreement).

The Credit Agreement contains various covenants with which we must comply, including, but not limited to, restrictions on the use of proceeds from borrowings and limitations on our ability to incur additional indebtedness, engage in transactions with affiliates, merge or consolidate, sell assets, make certain investments and acquisitions, make loans, grant liens, repurchase equity and pay dividends and distributions. The Credit Agreement also contains various covenants, which have been amended effective March 31, 2016, requiring mandatory prepayments from the net cash proceeds of certain asset transfers. In addition, if as of any date we have cash and cash equivalents (other than proceeds from a debt or equity issuance in the 30 days prior to such date reasonably expected to be used to fund an acquisition permitted under the Credit Agreement) in excess of $50.0 million, then such excess amount will be used to pay down outstanding borrowings of a corresponding amount under the revolving credit facility.

We must maintain various consolidated financial ratios, including a ratio of EBITDA (as defined in the Credit Agreement) to Total Interest Expense (as defined in the Credit Agreement) of not less than 2.75 to 1.0, a ratio of Total Debt (as defined in the Credit Agreement) to EBITDA of not greater than 5.95 to 1.0 through the fourth quarter of 2017, 5.75 to 1.0 in the first quarter of 2018, and 5.25 to 1.0 (subject to a temporary increase to 5.5 to 1.0 for any quarter during which an acquisition meeting certain thresholds is completed and for the following two quarters after the acquisition closes) thereafter and a ratio of Senior Secured Debt (as defined in the Credit Agreement) to EBITDA of not greater than 3.50 to 1.0 through the fourth quarter of 2017, 3.75 to 1.0 in the first quarter of 2018 and 4.0 to 1.0 thereafter. As of September 30, 2016, we maintained a 3.8 to 1.0 EBITDA to Total Interest Expense ratio, a 5.0 to 1.0 Total Debt to EBITDA ratio and a 2.5 to 1.0 Senior Secured Debt to EBITDA ratio. If we were to anticipate non-compliance with these financial ratios, we may take actions to maintain compliance with them, including reductions in our general and administrative expenses, our capital expenditures or the payment of cash distributions at our current distribution rate. Any of these measures could have an adverse effect on our operations, cash flows and the price of our common units. A default under one of our debt agreements would trigger cross-default provisions under our other debt agreements, which would accelerate our obligation to repay our indebtedness under those agreements. In addition, a material adverse effect on our assets, liabilities, financial condition, business or operations that, taken as a whole, impacts our ability to perform our obligations under the Credit Agreement, could lead to a default under that agreement. As of September 30, 2016, we were in compliance with all financial covenants under the Credit Agreement.

In March 2013, we issued $350.0 million aggregate principal amount of 6% senior notes due April 2021 (the “2013 Notes”). We used the net proceeds of $336.9 million, after original issuance discount and issuance costs, to repay borrowings outstanding under our revolving credit facility. The 2013 Notes were issued at an original issuance discount of $5.5 million, which is being amortized using the effective interest method at an interest rate of 6.25% over their term. In January 2014, holders of the 2013 Notes exchanged their 2013 Notes for registered notes with the same terms.

37

Prior to April 1, 2017, we may redeem all or a part of the 2013 Notes at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) a make-whole premium at the redemption date, plus accrued and unpaid interest, if any, to the redemption date. On or after April 1, 2017, we may redeem all or a part of the 2013 Notes at redemption prices (expressed as percentages of principal amount) equal to 103.00% for the twelve-month period beginning on April 1, 2017, 101.500% for the twelve-month period beginning on April 1, 2018 and 100.00% for the twelve-month period beginning on April 1, 2019 and at any time thereafter, plus accrued and unpaid interest, if any, to the applicable redemption date of the 2013 Notes.

In April 2014, we issued $350.0million aggregate principal amount of 6% senior notes due October 2022 (the “2014 Notes”). We received net proceeds of $337.4million, after original issuance discount and issuance costs, from this offering, which we used to fund a portion of the April 2014 acquisition of natural gas compression assets from MidCon Compression, L.L.C. and repay borrowings under our revolving credit facility. The 2014 Notes were issued at an original issuance discount of $5.7million, which is being amortized using the effective interest method at an interest rate of 6.25% over their term. In February 2015, holders of the 2014 Notes exchanged their 2014 Notes for registered notes with the same terms.

Prior to April 1, 2018, we may redeem all or a part of the 2014 Notes at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) a make-whole premium at the redemption date, plus accrued and unpaid interest, if any, to the redemption date. In addition, we may redeem up to 35% of the aggregate principal amount of the 2014 Notes prior to April 1, 2017 with the net proceeds of one or more equity offerings at a redemption price of 106.00% of the principal amount of the 2014 Notes, plus any accrued and unpaid interest to the date of redemption, if at least 65% of the aggregate principal amount of the 2014 Notes issued under the indenture remains outstanding after such redemption and the redemption occurs within 180 days of the date of the closing of such equity offering. On or after April 1, 2018, we may redeem all or a part of the 2014 Notes at redemption prices (expressed as percentages of principal amount) equal to 103.00% for the twelve-month period beginning on April 1, 2018, 101.500% for the twelve-month period beginning on April 1, 2019 and 100.00% for the twelve-month period beginning on April 1, 2020 and at any time thereafter, plus accrued and unpaid interest, if any, to the applicable redemption date of the 2014 Notes.

The 2013 Notes and the 2014 Notes are guaranteed on a senior unsecured basis by all of our existing subsidiaries (other than APLP Finance Corp., which is a co-issuer of the 2013 Notes and the 2014 Notes) and certain of our future subsidiaries. The 2013 Notes and the 2014 Notes and the guarantees, respectively, are our and the guarantors’ general unsecured senior obligations, rank equally in right of payment with all of our and the guarantors’ other senior obligations, and are effectively subordinated to all of our and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such indebtedness. In addition, the 2013 Notes and the 2014 Notes and guarantees are effectively subordinated to all existing and future indebtedness and other liabilities of any future non-guarantor subsidiaries. All of our subsidiaries are 100% owned, directly or indirectly, by us and guarantees by our subsidiaries are full and unconditional (subject to customary release provisions as discussed in Note 5(“Long-Term Debt”) to our Financial Statements) and constitute joint and several obligations. We have no assets or operations independent of our subsidiaries, and there are no significant restrictions upon our subsidiaries’ ability to distribute funds to us.

We have entered into interest rate swap agreements to offset changes in expected cash flows due to fluctuations in the interest rates associated with our variable rate debt. At September 30, 2016, we were a party to interest rate swaps with a notional value of $500.0 million, pursuant to which we make fixed payments and receive floating payments. Our interest rate swaps expire over varying dates, with interest rate swaps having a notional amount of $300.0 million expiring in May 2018, interest rate swaps having a notional amount of $100.0 million expiring in May 2019 and the remaining interest rate swaps having a notional amount of $100.0 million expiring in May 2020. As of September 30, 2016, the weighted average effective fixed interest rate on our interest rate swaps was 1.6%. See Part I, Item 3 (“Quantitative and Qualitative Disclosures About Market Risk”) of this Quarterly Report on Form 10-Q for further discussion of our interest rate swap agreements.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Issuance of Partnership Units. On September 30, 2016, we issued and sold 1,158 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us.

On March 1, 2016, the Partnership completed the March 2016 Acquisition. A portion of the $18.8 million purchase price was funded through the issuance of 257,000 common units for $1.8 million. In connection with this acquisition, we issued and sold 5,205 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us.

38

In May 2015, we entered into an At-The-Market Equity Offering Sales Agreement (the “ATM Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC. During the three months ended September 30, 2015, we sold 49,774 common units for net proceeds of $1.2 million pursuant to the ATM Agreement. We did not make any sales under the ATM Agreement during 2016 and the ATM Agreement expired pursuant to its terms on June 21, 2016.

In April 2015, we completed the April 2015 Contract Operations Acquisition from Archrock. In connection with this acquisition, we issued approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner.

Distributions to Unitholders.  Our partnership agreement requires us to distribute all of our “available cash” quarterly. Under our partnership agreement, available cash is defined generally to mean, for each fiscal quarter, (i) our cash on hand at the end of the quarter in excess of the amount of reserves our general partner determines is necessary or appropriate to provide for the conduct of our business, to comply with applicable law, any of our debt instruments or other agreements or to provide for future distributions to our unitholders for any one or more of the upcoming four quarters, plus, (ii) if our general partner so determines, all or a portion of our cash on hand on the date of determination of available cash for the quarter.

On October 31, 2016, our board of directors approved a cash distribution of $0.2850 per limited partner unit, or approximately $17.5 million. The distribution covers the period from July 1, 2016 through September 30, 2016. The record date for this distribution is November 10, 2016 and payment is expected to occur on November 14, 2016. The amount of our cash distributions will be determined by our board of directors on a quarterly basis, taking into account a number of factors. Therefore, there is no guarantee that we will continue to pay cash distributions to our unitholders at the current level, or at all.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Variable Rate Debt

We are exposed to market risk primarily associated with changes in interest rates under our financing arrangements. We use derivative financial instruments to minimize the risks and/or costs associated with financial activities by managing our exposure to interest rate fluctuations on a portion of our debt obligations. We do not use derivative financial instruments for trading or other speculative purposes.

As of September 30, 2016, after taking into consideration interest rate swaps, we had $188.0 million of outstanding indebtedness that was effectively subject to floating interest rates. A 1% increase in the effective interest rate on our outstanding debt subject to floating interest rates at September 30, 2016 would result in an annual increase in our interest expense of approximately $1.9 million.

For further information regarding our use of interest rate swap agreements to manage our exposure to interest rate fluctuations on a portion of our debt obligations, see Note 8(“Accounting for Derivatives”) to our Financial Statements.

Item 4.  Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which are designed to provide reasonable assurance that we are able to record, process, summarize and report the information required to be disclosed in our reports under the Exchange Act within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based on the evaluation, as of September 30, 2016, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed in reports that we file or submit under the Exchange Act is accumulated and communicated to management, and made known to our principal executive officer and principal financial officer, on a timely basis to ensure that it is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

39

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

Please see Note 13 (“Commitments and Contingencies”) to our Financial Statements for a discussion of litigation related to the Heavy Equipment Statutes, which is incorporated by reference into this Item 1.

In the ordinary course of business, we are also involved in various other pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these other actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to make cash distributions to our unitholders. However, because of the inherent uncertainty of litigation, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to make cash distributions to our unitholders.

Item 1A.  Risk Factors

There have been no material changes or updates to our risk factors that were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

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Item 6.  Exhibits

Exhibit No.	Description
2.1	Contribution, Conveyance and Assumption Agreement, dated April 17, 2015, by and among Exterran Holdings, Inc., Exterran Energy Solutions, L.P., EES Leasing LLC, EXH GP LP LLC, Exterran GP LLC, EXH MLP LP LLC, Exterran General Partner, L.P., EXLP Operating LLC, EXLP Leasing LLC and Exterran Partners, L.P., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2015
3.1	Certificate of Limited Partnership of Universal Compression Partners, L.P. (now Archrock Partners, L.P), incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 filed on June 27, 2006
3.2	Certificate of Amendment to Certificate of Limited Partnership of Universal Compression Partners, L.P. (now Archrock Partners, L.P.), dated as of August 20, 2007, incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on August 24, 2007
3.3	Certificate of Amendment of Certificate of Limited Partnership of Exterran Partners, L.P. (now Archrock Partners, L.P.), incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
3.4	Composite Certificate of Limited Partnership of Archrock Partners, L.P., incorporated by reference to Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K filed on February 29, 2016
3.5	First Amended and Restated Agreement of Limited Partnership of Archrock Partners, L.P., as amended, incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008
3.6	Certificate of Limited Partnership of UCO General Partner, LP (now Archrock General Partner, L.P.), incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1 filed on June 27, 2006
3.7	Amended and Restated Limited Partnership Agreement of UCO General Partner, LP (now Archrock General Partner, L.P.), incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on October 26, 2006
3.8	Certificate of Formation of UCO GP, LLC (now Archrock GP, LLC), incorporated by reference to Exhibit 3.5 to the Registrant’s Registration Statement on Form S-1 filed June 27, 2006
3.9	Amended and Restated Limited Liability Company Agreement of UCO GP, LLC (now Archrock GP, LLC), incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed on October 26, 2006
4.1	Indenture, dated as of March 27, 2013, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 28, 2013
4.2	Registration Rights Agreement, dated as of March 27, 2013, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Securities, LLC, as representative of the Initial Purchasers, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on March 28, 2013
4.3	Indenture, dated as of April7, 2014, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April11, 2014
4.4	Registration Rights Agreement, dated as of April 7, 2014, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Securities, LLC, as representative of the Initial Purchasers, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on April 7, 2014
31.1 *	Certification of the Principal Executive Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
31.2 *	Certification of the Principal Financial Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
32.1 **	Certification of the Chief Executive Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 **	Certification of the Chief Financial Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.1 *	Interactive data files pursuant to Rule 405 of Regulation S-T

* Filed herewith.

** Furnished, not filed.

42

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 1, 2016	ARCHROCK PARTNERS, L.P.
	By:	ARCHROCK GENERAL PARTNER, L.P.
		its General Partner
	By:	ARCHROCK GP LLC
		its General Partner
	By:	/s/ DAVID S. MILLER
		David S. Miller
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)
	By:	/s/ DONNA A. HENDERSON
		Donna A. Henderson
		Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

43

Index to Exhibits

Exhibit No.	Description
2.1	Contribution, Conveyance and Assumption Agreement, dated April 17, 2015, by and among Exterran Holdings, Inc., Exterran Energy Solutions, L.P., EES Leasing LLC, EXH GP LP LLC, Exterran GP LLC, EXH MLP LP LLC, Exterran General Partner, L.P., EXLP Operating LLC, EXLP Leasing LLC and Exterran Partners, L.P., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2015
3.1	Certificate of Limited Partnership of Universal Compression Partners, L.P. (now Archrock Partners, L.P), incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 filed on June 27, 2006
3.2	Certificate of Amendment to Certificate of Limited Partnership of Universal Compression Partners, L.P. (now Archrock Partners, L.P.), dated as of August 20, 2007, incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on August 24, 2007
3.3	Certificate of Amendment of Certificate of Limited Partnership of Exterran Partners, L.P. (now Archrock Partners, L.P.), incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 5, 2015
3.4	Composite Certificate of Limited Partnership of Archrock Partners, L.P., incorporated by reference to Exhibit 3.4 to the Registrant’s Annual Report on Form 10-K filed on February 29, 2016
3.5	First Amended and Restated Agreement of Limited Partnership of Archrock Partners, L.P., as amended, incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008
3.6	Certificate of Limited Partnership of UCO General Partner, LP (now Archrock General Partner, L.P.), incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1 filed on June 27, 2006
3.7	Amended and Restated Limited Partnership Agreement of UCO General Partner, LP (now Archrock General Partner, L.P.), incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on October 26, 2006
3.8	Certificate of Formation of UCO GP, LLC (now Archrock GP, LLC), incorporated by reference to Exhibit 3.5 to the Registrant’s Registration Statement on Form S-1 filed June 27, 2006
3.9	Amended and Restated Limited Liability Company Agreement of UCO GP, LLC (now Archrock GP, LLC), incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed on October 26, 2006
4.1	Indenture, dated as of March 27, 2013, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 28, 2013
4.2	Registration Rights Agreement, dated as of March 27, 2013, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Securities, LLC, as representative of the Initial Purchasers, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on March 28, 2013
4.3	Indenture, dated as of April7, 2014, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Bank, National Association, incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April11, 2014
4.4	Registration Rights Agreement, dated as of April 7, 2014, by and among Exterran Partners, L.P., EXLP Finance Corp., the Guarantors named therein and Wells Fargo Securities, LLC, as representative of the Initial Purchasers, incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on April 7, 2014
31.1 *	Certification of the Principal Executive Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
31.2 *	Certification of the Principal Financial Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to Rule 13a-14 under the Securities Exchange Act of 1934
32.1 **	Certification of the Chief Executive Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 **	Certification of the Chief Financial Officer of Archrock GP LLC (as general partner of the general partner of Archrock Partners, L.P.) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.1 *	Interactive data files pursuant to Rule 405 of Regulation S-T

* Filed herewith.

** Furnished, not filed.

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EX-31.1

Exhibit 31.1

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, D. Bradley Childers, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Archrock Partners, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2016

/s/ D. BRADLEY CHILDERS
Name:	D. Bradley Childers
Title:	Chief Executive Officer, Archrock GP LLC
	(Principal Executive Officer)
	As General Partner of Archrock General Partner, L.P.
	As General Partner of Archrock Partners, L.P.

EX-31.2

Exhibit 31.2

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, David S. Miller, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Archrock Partners, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2016

/s/ DAVID S. MILLER
Name:	David S. Miller
Title:	Chief Financial Officer, Archrock GP LLC
	(Principal Financial Officer)
	As General Partner of Archrock General Partner, L.P.
	As General Partner of Archrock Partners, L.P.

EX-32.1

Exhibit 32.1

Certification of CEO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Archrock Partners, L.P. (the “Partnership”) for the quarter ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), D. Bradley Childers, as Chief Executive Officer of Archrock GP LLC, the general partner of the Partnership’s general partner, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ D. BRADLEY CHILDERS
Name:	D. Bradley Childers
Title:	Chief Executive Officer, Archrock GP LLC
	As General Partner of Archrock General Partner, L.P.
	As General Partner of Archrock Partners, L.P.

Date: November 1, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Archrock Partners, L.P. (the “Partnership”) for the quarter ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), David S. Miller, as Chief Financial Officer of Archrock GP LLC, the general partner of the Partnership’s general partner, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ DAVID S. MILLER
Name:	David S. Miller
Title:	Chief Financial Officer, Archrock GP LLC
	As General Partner of Archrock General Partner, L.P.
	As General Partner of Archrock Partners, L.P.

Date: November 1, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 25, 2016
Document and Entity Information
Entity Registrant Name	Archrock Partners, L.P.
Entity Central Index Key	0001367064
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		60,035,818
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 398	$ 472
Accounts receivable, trade, net of allowance of $1,305 and $2,463, respectively	71,336	85,183
Total current assets	71,734	85,655
Property, plant and equipment	2,605,853	2,661,996
Accumulated depreciation	(865,899)	(846,213)
Property, plant and equipment, net	1,739,954	1,815,783
Intangible and other assets, net	83,945	93,215
Total assets	1,895,633	1,994,653
Current liabilities:
Accrued liabilities	6,144	6,696
Accrued interest	23,022	12,443
Due to affiliates, net	2,830	5,980
Current portion of interest rate swaps	4,509	4,608
Total current liabilities	36,505	29,727
Long-term debt	1,370,382	1,410,382
Deferred income taxes	1,557	1,054
Other long-term liabilities	8,989	5,494
Total liabilities	1,417,433	1,446,657
Commitments and contingencies (Note 13)
Partners’ capital:
Common units, 60,122,062 and 59,796,514 units issued, respectively	478,515	538,197
General partner units, 2% interest with 1,215,925 and 1,209,562 equivalent units issued and outstanding, respectively	11,242	17,151
Accumulated other comprehensive loss	(9,674)	(5,558)
Treasury units, 86,244 and 74,888 common units, respectively	(1,883)	(1,794)
Total partners’ capital	478,200	547,996
Total liabilities and partners’ capital	$ 1,895,633	$ 1,994,653

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable, trade, allowance (in dollars)	$ 1,305	$ 2,463
Common units, units issued	60,122,062	59,796,514
General partner units, interest (as a percent)	2.00%	2.00%
General partner units, equivalent units issued	1,215,925	1,209,562
General partner units, equivalent units outstanding	1,215,925	1,209,562
Treasury units, common units	86,244	74,888

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Revenue	$ 135,478	$ 163,293	$ 426,954	$ 495,389
Costs and expenses:
Cost of sales (excluding depreciation and amortization expense) — affiliates	50,854	63,877	158,024	194,987
Depreciation and amortization	38,087	40,262	115,951	115,854
Long-lived asset impairment	7,909	7,163	22,507	12,473
Restructuring charges	1,946	0	7,293	0
Selling, general and administrative — affiliates	17,917	20,729	61,337	62,619
Interest expense	20,034	19,048	58,089	55,962
Other (income) loss, net	(890)	585	20	(1,118)
Total costs and expenses	135,857	151,664	423,221	440,777
Income (loss) before income taxes	(379)	11,629	3,733	54,612
Provision for income taxes	188	131	469	702
Net income (loss)	(567)	11,498	3,264	53,910
General partner interest in net income (loss)	(11)	4,887	65	13,910
Common units interest in net income (loss)	$ (556)	$ 6,611	$ 3,199	$ 40,000
Weighted average common units outstanding used in income (loss) per common unit:
Basic (in units)	59,837	59,716	59,805	58,141
Diluted (in units)	59,837	59,716	59,805	58,141
Income (loss) per common unit:
Basic (in dollars per unit)	$ (0.01)	$ 0.11	$ 0.05	$ 0.69
Diluted (in dollars per unit)	(0.01)	0.11	0.05	0.69
Distributions declared and paid per limited partner unit in respective periods (in dollars per unit)	$ 0.2850	$ 0.5675	$ 1.1425	$ 1.6875

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (567)	$ 11,498	$ 3,264	$ 53,910
Other comprehensive income (loss):
Interest rate swap gain (loss), net of reclassifications to earnings	3,201	(4,930)	(4,116)	(9,121)
Amortization of terminated interest rate swaps	0	726	0	2,335
Total other comprehensive income (loss)	3,201	(4,204)	(4,116)	(6,786)
Comprehensive income (loss)	$ 2,634	$ 7,294	$ (852)	$ 47,124

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CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL - USD ($) $ in Thousands	Total	Treasury Units	Accumulated Other Comprehensive Loss	Partners' Capital Common Units	Partners' Capital General Partner Units
Beginning balance at Dec. 31, 2014	$ 683,341	$ (1,477)	$ (3,438)	$ 668,714	$ 19,542
Beginning balance (in units) at Dec. 31, 2014		61,665		55,724,022	1,129,221
Increase (Decrease) in Partners' Capital
Issuance of common units for vesting of phantom units (in units)				52,224
Treasury units purchased	(274)	$ (274)
Treasury units purchased (in units)		(11,009)
Units issued in connection with acquisition (value)	109,908			$ 107,710	$ 2,198
Units issued in connection with acquisition (in units)				3,963,138	80,341
Issuance of units	1,164			$ 1,164
Issuance of common units (in units)				49,774
Contribution (distribution) of capital, net	142			$ 564	$ (422)
Excess of purchase price of equipment over Archrock’s cost of equipment	(11,708)			(11,108)	(600)
Cash distributions	(110,310)			(96,402)	(13,908)
Unit-based compensation expense	937			937
Comprehensive income (loss)	47,124		(6,786)	40,000	13,910
Ending balance at Sep. 30, 2015	720,324	$ (1,751)	(10,224)	$ 711,579	$ 20,720
Ending balance (in units) at Sep. 30, 2015		72,674		59,789,158	1,209,562
Beginning balance at Dec. 31, 2015	547,996	$ (1,794)	(5,558)	$ 538,197	$ 17,151
Beginning balance (in units) at Dec. 31, 2015		74,888		59,796,514	1,209,562
Increase (Decrease) in Partners' Capital
Issuance of common units for vesting of phantom units (in units)				68,548
Treasury units purchased	(89)	$ (89)
Treasury units purchased (in units)		(11,356)
Units issued in connection with acquisition (value)	1,836			$ 1,799	$ 37
Units issued in connection with acquisition (in units)				257,000	5,205
Issuance of units	8				$ 8
Issuance of common units (in units)					1,158
Contribution (distribution) of capital, net	3,204			$ 3,086	$ 118
Cash distributions	(74,706)			(68,569)	(6,137)
Unit-based compensation expense	803			803
Comprehensive income (loss)	(852)		(4,116)	3,199	65
Ending balance at Sep. 30, 2016	$ 478,200	$ (1,883)	$ (9,674)	$ 478,515	$ 11,242
Ending balance (in units) at Sep. 30, 2016		86,244		60,122,062	1,215,925

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net income (loss)	$ 3,264	$ 53,910
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	115,951	115,854
Long-lived asset impairment	22,507	12,473
Amortization of deferred financing costs	3,397	2,861
Amortization of debt discount	927	871
Amortization of terminated interest rate swaps	0	2,335
Interest rate swaps	1,115	269
Unit-based compensation expense	803	937
Provision for doubtful accounts	2,277	1,190
Gain on sale of property, plant and equipment	(639)	(1,496)
Loss on non-cash consideration in March 2016 Acquisition	635	0
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, trade	11,602	(4,563)
Other assets and liabilities	11,862	13,641
Net cash provided by operating activities	173,701	198,282
Cash flows from investing activities:
Capital expenditures	(50,945)	(193,314)
Payment for March 2016 Acquisition	(13,779)	0
Proceeds from sale of property, plant and equipment	15,414	11,882
Increase in amounts due from affiliates, net	0	2,322
Net cash used in investing activities	(49,310)	(179,110)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt	181,000	332,500
Repayments of long-term debt	(223,500)	(238,500)
Distributions to unitholders	(74,706)	(110,310)
Net proceeds from issuance of common units	0	1,164
Net proceeds from sale of general partner units	45	0
Payments for debt issuance costs	(1,721)	(1,311)
Payments for settlement of interest rate swaps that include financing elements	(2,344)	(2,815)
Purchases of treasury units	(89)	(274)
Increase (decrease) in amounts due to affiliates, net	(3,150)	450
Net cash used in financing activities	(124,465)	(19,096)
Net increase (decrease) in cash and cash equivalents	(74)	76
Cash and cash equivalents at beginning of period	472	295
Cash and cash equivalents at end of period	398	371
Supplemental disclosure of non-cash transactions:
Non-cash capital contribution from limited and general partner	793	8,500
Contract operations equipment acquired/exchanged, net	2,411	100,494
Common units issued in March 2016 Acquisition	1,799	0
Non-cash consideration in March 2016 Acquisition	3,165	0
Intangible assets allocated in April 2015 Contract Operations Acquisition	0	1,055
Non-cash capital contribution due to the April 2015 Contract Operations Acquisition	0	7,608
Common units issued in April 2015 Contract Operations Acquisition	0	100,267
General partner units issued in April 2015 Contract Operations Acquisition	$ 0	$ 2,033

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Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Organization and Summary of Significant Accounting Policies

1.  Organization and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Archrock Partners, L.P. (“we,” “our,” “us,” or the “Partnership”) included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished includes all adjustments, consisting only of normal recurring adjustments, that are necessary to present fairly our consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2015, which contains a more comprehensive summary of our accounting policies. The interim results reported herein are not necessarily indicative of results for a full year.

Organization

Archrock General Partner, L.P. is our general partner and an indirect wholly owned subsidiary of Archrock, Inc. (individually, and together with its wholly owned subsidiaries, “Archrock”). As Archrock General Partner, L.P. is a limited partnership, its general partner, Archrock GP LLC, conducts our business and operations, and the board of directors and officers of Archrock GP LLC, which we refer to herein as our board of directors and our officers, make decisions on our behalf.

On November 3, 2015, Exterran Holdings, Inc. completed the spin-off (the “Spin-off”) of its international contract operations, international aftermarket services and global fabrication businesses into a standalone public company operating as Exterran Corporation (“Exterran”). To effect the Spin-off, Exterran Holdings, Inc. distributed, on a pro rata basis, all of the shares of Exterran common stock to the stockholders of Exterran Holdings, Inc. as of October 27, 2015. Upon the completion of the Spin-off, Exterran Holdings, Inc. was renamed “Archrock, Inc.” and, on November 4, 2015, the ticker symbol for Archrock’s common stock on the New York Stock Exchange was changed to “AROC.” Archrock continues to hold interests in us, which include the sole general partner interest and certain limited partner interests, as well as all of the incentive distribution rights. Effective on November 3, 2015, we were renamed “Archrock Partners, L.P.” and, on November 4, 2015, the ticker symbol for our common units on the Nasdaq Global Select Market was changed to “APLP.”

Comprehensive Income (Loss)

Components of comprehensive income (loss) are net income (loss) and all changes in equity during a period except those resulting from transactions with our limited partners or general partner. Our accumulated other comprehensive income (loss) consists only of derivative financial instruments. Changes in accumulated other comprehensive income (loss) represent changes in the fair value of derivative financial instruments that are designated as cash flow hedges to the extent the hedge is effective and amortization of terminated interest rate swaps. See Note 8(“Accounting for Derivatives”) for additional disclosures related to comprehensive income (loss).

Financial Instruments

Our financial instruments consist of cash, trade receivables, interest rate swaps and debt. At September 30, 2016 and December 31, 2015, the estimated fair values of these financial instruments approximated their carrying amounts as reflected in our condensed consolidated balance sheets. The fair value of our fixed rate debt was estimated based on quoted market yields in inactive markets, which are Level 2 inputs. The fair value of our floating rate debt was estimated using a discounted cash flow analysis based on interest rates offered on loans with similar terms to borrowers of similar credit quality, which are Level 3 inputs. See Note 9(“Fair Value Measurements”) for additional information regarding the fair value hierarchy.

The following table summarizes the carrying amount and fair value of our debt as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016				December 31, 2015
	Carrying Amount (1)		Fair Value		Carrying Amount (1)		Fair Value
Fixed rate debt	$	682,797	$	659,000	$	680,484	$	524,000
Floating rate debt	687,585		688,000		729,898		731,000
Total debt	$	1,370,382	$	1,347,000	$	1,410,382	$	1,255,000

⁽¹⁾  Carrying values are shown net of unamortized debt discounts and unamortized deferred financing costs. See Note 5(“Long-Term Debt”) for further details.

GAAP requires that all derivative instruments (including certain derivative instruments embedded in other contracts) be recognized in the balance sheet at fair value and that changes in such fair values be recognized in income (loss) unless specific hedging criteria are met. Changes in the values of derivatives that meet these hedging criteria will ultimately offset related income effects of the hedged item pending recognition in income.

Goodwill

Beginning in late 2014 and extending throughout 2015, the energy markets experienced a significant reduction in oil and natural gas prices which has had a significant impact on the financial performance and operating results of many oil and natural gas companies. Such declines accelerated in the fourth quarter of 2015, resulting in higher borrowing costs for companies and a substantial reduction in forecasted capital spending across the energy industry leading to lower projected growth rates over the short-term. Such declines impacted our future cash flow forecasts, our market capitalization, and the market capitalization of peer companies. We identified these conditions as a triggering event, which required us to perform a two-step goodwill impairment test as of December 31, 2015. Accordingly, we recorded a preliminary full impairment of our goodwill in the fourth quarter of 2015 of $127.8 million. During the first quarter of 2016, we finalized the impairment analysis which did not result in an adjustment to the preliminary impairment booked in the fourth quarter of 2015.

Income Per Common Unit

Income per common unit is computed using the two-class method. Under the two-class method, basic income per common unit is determined by dividing net income allocated to the common units after deducting the amounts allocated to our general partner (including distributions to our general partner on its incentive distribution rights) and participating securities, by the weighted average number of outstanding common units (also referred to as limited partner units) during the period. Participating securities include unvested phantom units with nonforfeitable tandem distribution equivalent rights to receive cash distributions in the quarter in which distributions are paid on common units. During periods of net loss, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses.

When computing income per common unit in periods when distributions are greater than income, the amount of the actual incentive distribution rights, if any, is deducted from net income and allocated to our general partner for the corresponding period. The remaining amount of net income, after deducting distributions to participating securities, is allocated between the general partner and common units based on how our partnership agreement allocates net losses.

When computing income per common unit in periods when income is greater than distributions, income is allocated to the general partner, participating securities and common units based on how our partnership agreement would allocate income if the full amount of income for the period had been distributed. This allocation of net income does not impact our total net income, consolidated results of operations or total cash distributions (including actual incentive distribution rights); however, it may result in our general partner being allocated additional incentive distributions for purposes of our income per unit calculation, which could reduce net income per common unit. However, as required by our partnership agreement, we determine cash distributions based on available cash and determine the actual incentive distributions allocable to our general partner based on actual distributions.

The following table reconciles net income used in the calculation of basic and diluted income per common unit (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	(567	)	$	11,498		$	3,264		$	53,910
Less: General partner incentive distribution rights	—			(4,753		)	—			(13,100		)
Less: General partner 2% ownership interest	11			(134		)	(65		)	(810		)
Common units interest in net income (loss)	(556		)	6,611			3,199			40,000
Less: Net income attributable to participating securities	(56		)	(49		)	(170		)	(144		)
Net income (loss) used in basic and diluted income per common unit	$	(612	)	$	6,562		$	3,029		$	39,856

The following table shows the potential common units that were included in computing diluted income per common unit (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Weighted average common units outstanding including participating securities	60,036		59,801		59,966		58,218
Less: Weighted average participating securities outstanding	(199	)	(85	)	(161	)	(77	)
Weighted average common units outstanding — used in basic income per common unit	59,837		59,716		59,805		58,141
Net dilutive potential common units issuable:
Phantom units	—		—		—		—
Weighted average common units and dilutive potential common units — used in diluted income (loss) per common unit	59,837		59,716		59,805		58,141

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Recent Accounting Developments

9 Months Ended

Sep. 30, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Developments

2.  Recent Accounting Developments

Accounting Standards Updates Not Yet Implemented

In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-15 (“Update 2016-15”) which addresses diversity in practice in that simplifies several elements of cash flow classification including how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Update 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Update 2016-15 will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. Early adoption is permitted. We are currently evaluating the impact of Update 2016-15 on our consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (“Update 2016-13”) that changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. Update 2016-13 is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. Entities will apply Update 2016-13 provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently evaluating the impact of Update 2016-13 on our consolidated financial statements.

In March2016, the FASB issued Accounting Standards Update No. 2016-09 (“Update 2016-09”) that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either debt or equity liabilities, and classification on the statement of cash flows. For public entities, Update 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of Update 2016-09 on our consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“Update 2016-02”) that establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new guidance, lessor accounting is largely unchanged. Update 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of Update 2016-02 on our consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“Update 2014-09”) that outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Update 2014-09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Update 2014-09 will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Early adoption is permitted for reporting periods beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach. In March2016, the FASB issued Accounting Standards Update No. 2016-08 (“Update 2016-08”), which clarifies the guidance in Update 2014-09 by providing guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. In April2016, the FASB issued Accounting Standards Update 2016-10 (“Update 2016-10”), clarifying the implementation guidance on identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Also in April2016, the FASB issued Accounting Standards Update No. 2016-11 (“Update 2016-11”), rescinding certain paragraphs pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May2016, the FASB issued Accounting Standards Update No. 2016-12 (“Update 2016-12”), clarifying implementation guidance on a few narrow areas and adds some practical expedients to the guidance. Each of these subsequent updates has the same effective date as Update 2014-09. We are currently evaluating the potential impact of Update 2014-09, Update 2016-08, Update 2016-10, Update 2016-11 and Update 2016-12 on our consolidated financial statements.

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Business Acquisitions

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Business Acquisitions

3.  Business Acquisitions

March 2016 Acquisition

On March1, 2016, we completed an acquisition of contract operations customer service agreements with four customers and a fleet of 19 compressor units used to provide compression services under those agreements comprising approximately 23,000 horsepower. The $18.8 million purchase price was funded with $13.8 million in borrowings under our revolving credit facility, a non-cash exchange of 24 compressor units for $3.2 million, and the issuance of 257,000 common units for $1.8 million. In connection with this acquisition, we issued and sold 5,205 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us. This acquisition is referred to as the “March2016 Acquisition.” During the nine months ended September 30, 2016, we incurred transaction costs of approximately $0.2 million related to the March2016 Acquisition, which is reflected in other (income) expense, net, in our condensed consolidated statement of operations.

We accounted for the March2016 Acquisition using the acquisition method, which requires, among other things, assets acquired to be recorded at their fair value on the acquisition date. The following table summarizes the purchase price allocation based on estimated fair values of the acquired assets as of the acquisition date (in thousands):

	Fair Value
Property, plant and equipment	$	14,929
Intangible assets	3,839
Purchase price	$	18,768

Property, Plant and Equipment and Intangible Assets Acquired

Property, plant and equipment is comprised of compressor units that will be depreciated on a straight-line basis over an estimated average remaining useful life of 15 years.

The amount of finite life intangible assets, and their associated average useful lives, was determined based on the period which the assets are expected to contribute directly or indirectly to our future cash flows, and consisted of the following:

	Amount (in thousands)		Average Useful Life
Customer related	$	3,839	2.3 years

The results of operations attributable to the assets acquired in the March2016 Acquisition have been included in our condensed consolidated financial statements since the date of acquisition.

Pro forma financial information is not presented for the March2016 Acquisition as it is immaterial to our reported results.

April 2015 Contract Operations Acquisition

On April 17, 2015, we acquired from Archrock contract operations customer service agreements with 60 customers and a fleet of 238 compressor units used to provide compression services under those agreements, comprising approximately 148,000 horsepower, or 3% (by then available horsepower) of the combined contract operations business of Archrock and us. The acquired assets also included 179 compressor units, comprising approximately 66,000 horsepower, previously leased from Archrock to us. At the acquisition date, the acquired fleet assets had a net book value of $108.8 million, net of accumulated depreciation of $59.9 million. Total consideration for the transaction was approximately $102.3 million, excluding transaction costs. In connection with this acquisition, we issued approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner. Based on the terms of the contribution, conveyance and assumption agreement, the common units and general partner units, including incentive distribution rights, we issued for this acquisition were not entitled to receive a cash distribution relating to the quarter ended March 31, 2015. This acquisition is referred to as the “April 2015 Contract Operations Acquisition.”

In connection with this acquisition, we were allocated $1.1 million finite life intangible assets associated with customer relationships of Archrock’s contract operations segment. The amounts allocated were based on the ratio of fair value of the net assets transferred to us to the total fair value of Archrock’s contract operations segment. These intangible assets are being amortized through 2024, based on the present value of income expected to be realized from these intangible assets.

Because Archrock and we are considered entities under common control, GAAP requires that we record the assets acquired and liabilities assumed from Archrock in connection with the April 2015 Contract Operations Acquisition using Archrock’s historical cost basis in the assets and liabilities. The difference between the historical cost basis of the assets acquired and liabilities assumed and the purchase price is treated as either a capital contribution or distribution. As a result, we recorded a capital contribution of $7.6 million for the April 2015 Contract Operations Acquisition during the nine months ended September 30, 2015.

An acquisition of a business from an entity under common control is generally accounted for under GAAP by the acquirer with retroactive application as if the acquisition date was the beginning of the earliest period included in the financial statements. Retroactive effect to the April 2015 Contract Operations Acquisition was impracticable because such retroactive application would have required significant assumptions in a prior period that cannot be substantiated. Accordingly, our financial statements include the assets acquired, liabilities assumed, revenue and direct operating expenses associated with the acquisition beginning on the date of such acquisition. However, the preparation of pro forma financial information allows for certain assumptions that do not meet the standards of financial statements prepared in accordance with GAAP.

Pro Forma Financial Information

Pro forma financial information for the nine months ended September 30, 2015 has been included to give effect to the additional assets acquired in the April 2015 Contract Operations Acquisition. The April2015 Contract Operations Acquisition is presented in the pro forma financial information as though this transaction occurred as of January 1, 2015. The pro forma financial information reflects the following transactions related to the April 2015 Contract Operations Acquisition:

• our acquisition in April 2015 of certain contract operations customer service agreements, compression equipment and identifiable intangible assets from Archrock; and

• our issuance of approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner.

The pro forma financial information below is presented for informational purposes only and is not necessarily indicative of our results of operations that would have occurred had the transaction been consummated at the beginning of the period presented, nor is it necessarily indicative of future results. The pro forma financial information below was derived by adjusting our historical financial statements.

The following table shows pro forma financial information for the nine months ended September 30, 2015 (in thousands, except per unit amounts):

	Nine months ended September 30, 2015
Revenue	$	504,468
Net income	$	54,502
Basic income per common unit	$	0.67
Diluted income per common unit	$	0.67

Pro forma net income per common unit is determined by dividing the pro forma net income that would have been allocated to our common unitholders by the weighted average number of common units outstanding after the completion of the transactions included in the pro forma financial information. Pursuant to our partnership agreement, to the extent that the quarterly distributions exceed certain targets, our general partner is entitled to receive certain incentive distributions that will result in more net income proportionately being allocated to our general partner than to our common unitholders. The pro forma net income per limited partner unit calculations reflect the incentive distributions made to our general partner and a reduction of net income allocable to our limited partners of $0.3 million for the nine months ended September 30, 2015, which reflects the amount of additional incentive distributions that would have occurred if the pro forma limited partner units had been outstanding as of January 1, 2015.

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Related Party Transactions

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions

4.  Related Party Transactions

We are a party to an omnibus agreement with Archrock, our general partner and others (as amended and/or restated, the “Omnibus Agreement”), which includes, among other things:

• certain agreements not to compete between Archrock and its affiliates, on the one hand, and us and our affiliates, on the other hand;

• Archrock’s obligation to provide all operational staff, corporate staff and support services reasonably necessary to operate our business and our obligation to reimburse Archrock for such services;

• the terms under which we, Archrock, and our respective affiliates may transfer, exchange or lease compression equipment among one another;

• Archrock’s grant to us of a license to use certain intellectual property, including our logo; and

• Archrock’s and our obligations to indemnify each other for certain liabilities.

The Omnibus Agreement will terminate upon a change of control of Archrock GP LLC, our general partner or us, and certain provisions of the Omnibus Agreement will terminate upon a change of control of Archrock.

Purchase of New Compression Equipment from Archrock

In connection with the Spin-off, Archrock contributed its fabrication business to Exterran and we entered into a separate supply agreement with Exterran under which we are obligated to purchase our requirements of newly-fabricated compression equipment from Exterran and its affiliates, subject to certain exceptions. For the nine months ended September 30, 2016, we purchased $26.3 million of newly-manufactured compression equipment from Exterran. Prior to the November 2015 amendment and restatement of our Omnibus Agreement, in connection with the Spin-off, we were able to purchase newly-fabricated compression equipment from Archrock or its affiliates at Archrock’s cost to fabricate such equipment plus a fixed margin. During the nine months ended September 30, 2015, we purchased $146.3 million of newly-fabricated compression equipment from Archrock. Transactions between us and Archrock and its affiliates are transactions between entities under common control. Under GAAP, transfers of assets and liabilities between entities under common control are to be initially recorded on the books of the receiving entity at the carrying value of the transferor. Any difference between consideration given and the carrying value of the assets or liabilities is treated as a capital distribution or contribution. As a result, the newly-fabricated compression equipment purchased during the nine months ended September 30, 2015 was recorded in our condensed consolidated balance sheets as property, plant and equipment of $134.6 million, which represents the carrying value of Archrock’s affiliates that sold it to us, and as a distribution of equity of $11.7 million, which represents the fixed margin we paid above the carrying value in accordance with the Omnibus Agreement. During the nine months ended September 30, 2016 and 2015, Archrock contributed to us $0.8 million and $8.1 million, respectively, primarily related to the completion of overhauls on compression equipment that was exchanged with us or contributed to us and where overhauls were in progress on the date of exchange or contribution.

Transfer, Exchange or Lease of Compression Equipment with Archrock

If Archrock determines in good faith that we or Archrock’s contract operations services business need to transfer, exchange or lease compression equipment between Archrock and us, the Omnibus Agreement permits such equipment to be transferred, exchanged or leased if it will not cause us to breach any existing contracts, suffer a loss of revenue under an existing compression services contract or incur any unreimbursed costs. In consideration for such transfer, exchange or lease of compression equipment, the transferee will either (1) transfer to the transferor compression equipment equal in value to the appraised value of the compression equipment transferred to it, (2) agree to lease such compression equipment from the transferor or (3) pay the transferor an amount in cash equal to the appraised value of the compression equipment transferred to it.

During the nine months ended September 30, 2016, pursuant to the terms of the Omnibus Agreement, we transferred ownership of 354 compressor units, totaling approximately168,600 horsepower with a net book value of approximately $75.4 million, to Archrock. In exchange, Archrock transferred ownership of259 compressor units, totaling approximately 121,600 horsepower with a net book value of approximately $77.8 million, to us. During the nine months ended September 30, 2015, pursuant to the terms of the Omnibus Agreement, we transferred ownership of 349 compressor units, totaling approximately 112,800 horsepower with a net book value of approximately $54.7 million, to Archrock. In exchange, Archrock transferred ownership of 260 compressor units, totaling approximately 99,600 horsepower with a net book value of approximately $46.8 million, to us. During the nine months ended September 30, 2016 and 2015, we recorded capital contributions of approximately $2.4 million and capital distributions of $7.9 million, respectively, related to the differences in net book value on the exchanged compression equipment. No customer contracts were included in the transfers. Under the terms of the Omnibus Agreement, such transfers must be of equal appraised value, as defined in the Omnibus Agreement, with any difference being settled in cash.

At September 30, 2016, we had equipment on lease to Archrock with an aggregate cost and accumulated depreciation of $0.2 million and $0.1 million, respectively. At December 31, 2015, we had equipment on lease to Archrock with an aggregate cost and accumulated depreciation of $10.1 million and $3.3 million, respectively. During each of the nine month periods ended September 30, 2016 and 2015, we had revenue of $0.1 million from Archrock related to the lease of our compression equipment. During the nine months ended September 30, 2016 and 2015, we had cost of sales of $0.2 million and $1.5 million, respectively, with Archrock related to the lease of Archrock’s compression equipment.

Reimbursement of Operating and SG&A Expense

Archrock provides all operational staff, corporate staff and support services reasonably necessary to run our business. These services may include, without limitation, operations, marketing, maintenance and repair, periodic overhauls of compression equipment, inventory management, legal, accounting, treasury, insurance administration and claims processing, risk management, health, safety and environmental, information technology, human resources, credit, payroll, internal audit, taxes, facilities management, investor relations, enterprise resource planning system, training, executive, sales, business development and engineering.

Archrock charges us for costs that are directly attributable to us. Costs that are indirectly attributable to us and Archrock’s other operations are allocated among Archrock’s other operations and us. The allocation methodologies vary based on the nature of the charge and have historically included, among other things, revenue, headcount and horsepower. We believe that the allocation methodologies used to allocate indirect costs to us are reasonable.

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Long-Term Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Long-Term Debt

5.  Long-Term Debt

Long-term debt consisted of the following (in thousands):

	September 30, 2016			December 31, 2015
Revolving credit facility due May 2018	$	538,000		$	580,500
Term loan facility due May 2018	150,000			150,000
Less: Deferred financing costs, net of amortization	(415		)	(602		)
	149,585			149,398
6% senior notes due April 2021	350,000			350,000
Less: Debt discount, net of amortization	(3,379		)	(3,862		)
Less: Deferred financing costs, net of amortization	(4,623		)	(5,396		)
	341,998			340,742
6% senior notes due October 2022	350,000			350,000
Less: Debt discount, net of amortization	(4,229		)	(4,673		)
Less: Deferred financing costs, net of amortization	(4,972		)	(5,585		)
	340,799			339,742
Long-term debt	$	1,370,382		$	1,410,382

Revolving Credit Facility and Term Loan Facility

In February 2015, we amended our senior secured credit agreement (the “Credit Agreement”), which among other things, increased the borrowing capacity under the revolving credit facility by $250.0 million to $900.0 million. In May 2016, we further amended our Credit Agreement to, among other things, decrease the borrowing capacity under the revolving credit facility by $75.0 million to $825.0 million. Prior to this amendment, we were able to increase the aggregate commitments under the Credit Agreement by up to an additional $50 million subject to certain conditions, including the approval of the lenders. As a result of this amendment and subject to certain conditions, including the approval of the lenders, we are able to increase the aggregate commitments under the Credit Agreement by up to an additional $125 million. During the nine months ended September 30, 2016 and 2015, we incurred transaction costs of $1.7 million and $1.3 million, respectively, related to these amendments of our Credit Agreement. These costs were recorded in intangible and other assets, net, and are being amortized to interest expense over the term of the facility. The Credit Agreement, which matures in May 2018, also includes a $150.0 million term loan facility. As of September 30, 2016, we had undrawn capacity of $287.0 million under our revolving credit facility. Our Credit Agreement limits our Total Debt (as defined in the Credit Agreement) to EBITDA ratio (as defined in the Credit Agreement) to not greater than 5.95 to 1.0. As a result of this limitation, $274.3 million of the $287.0 million of undrawn capacity under our revolving credit facility was available for additional borrowings as of September 30, 2016.

6% Senior Notes Due April2021 and 6% Senior Notes Due October2022

In March 2013, we issued $350.0 million aggregate principal amount of 6% senior notes due April 2021 (the “2013 Notes”). In April 2014, we issued $350.0 million aggregate principal amount of 6% senior notes due October 2022 (the “2014 Notes”).The 2013 Notes and the 2014 Notes are guaranteed on a senior unsecured basis by all of our existing subsidiaries (other than Archrock Partners Finance Corp., which is a co-issuer of the 2013 Notes and the 2014 Notes) and certain of our future subsidiaries. The 2013 Notes and the 2014 Notes and the guarantees, respectively, are our and the guarantors’ general unsecured senior obligations, rank equally in right of payment with all of our and the guarantors’ other senior obligations, and are effectively subordinated to all of our and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such indebtedness. In addition, the 2013 Notes and the 2014 Notes and guarantees are effectively subordinated to all existing and future indebtedness and other liabilities of any future non-guarantor subsidiaries. All of our subsidiaries are 100% owned, directly or indirectly, by us and guarantees by our subsidiaries are full and unconditional (subject to customary release provisions which are discussed in our Annual Report on Form 10-K for the year ended December 31, 2015) and constitute joint and several obligations. We have no assets or operations independent of our subsidiaries, and there are no significant restrictions upon our subsidiaries’ ability to distribute funds to us. Archrock Partners Finance Corp. has no operations and does not have revenue other than as may be incidental as co-issuer of the 2013 Notes and the 2014 Notes. Because we have no independent operations, the guarantees are full and unconditional (subject to customary release provisions) and constitute joint and several obligations of our subsidiaries other than Archrock Partners Finance Corp., and as a result we have not included consolidated financial information of our subsidiaries.

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Cash Distributions

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Cash Distributions

6.  Cash Distributions

We make distributions of available cash (as defined in our partnership agreement) from operating surplus in the following manner:

• first, 98% to all common unitholders, pro rata, and 2% to our general partner, until each unit has received a distribution of $0.4025;

• second, 85% to all common unitholders, pro rata, and 15% to our general partner, until each unit has received a distribution of $0.4375;

• third, 75% to all common unitholders, pro rata, and 25% to our general partner, until each unit has received a total of $0.5250; and

• thereafter, 50% to all common unitholders, pro rata, and 50% to our general partner.

The following table summarizes our distributions per unit for 2015 and 2016:

Period Covering	Payment Date	Distribution per Limited Partner Unit		Total Distribution (1)
1/1/2015 — 3/31/2015	May 15, 2015	$	0.5625	$	35.9	million
4/1/2015 — 6/30/2015	August 14, 2015	0.5675		39.1		million
7/1/2015 — 9/30/2015	November 13, 2015	0.5725		39.7		million
10/1/2015 — 12/31/2015	February 12, 2016	0.5725		39.7		million
1/1/2016 — 3/31/2016	May 13, 2016	0.2850		17.5		million
4/1/2016 — 6/30/2016	August 15, 2016	0.2850		17.5		million

⁽¹⁾    Includes distributions to our general partner on its incentive distribution rights.

On October 31, 2016, our board of directors approved a cash distribution of $0.2850 per limited partner unit, or approximately $17.5 million. The distribution covers the period from July 1, 2016 through September 30, 2016. The record date for this distribution is November 10, 2016 and payment is expected to occur on November 14, 2016.

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Unit-Based Compensation

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Unit-Based Compensation

7.  Unit-Based Compensation

Long-Term Incentive Plan

Our board of directors adopted the Archrock Partners, L.P. Long-Term Incentive Plan (the “Plan”) in October 2006 for the benefit of the employees, directors and consultants of us, Archrock and our respective affiliates. A maximum of 1,035,378 common units are available for the issuance of common unit options, restricted units, unit awards and phantom units under the Plan. The Plan is administered by the compensation committee of our board of directors (the “Plan Administrator”).

Phantom units are notional units that entitle the grantee to receive common units upon the vesting of such phantom units or, at the discretion of the Plan Administrator, cash equal to the fair market value of the underlying common units. Phantom units granted under the Plan may include nonforfeitable tandem distribution equivalent rights to receive cash distributions on unvested phantom units in the quarter in which distributions are paid on common units. Phantom units generally vest one-third per year on each of the first three anniversaries of the grant date.

Phantom Units

The following table presents phantom unit activity during the nine months ended September 30, 2016:

	Phantom Units (in thousands)		Weighted Average Grant Date Fair Value per Unit
Phantom units outstanding, January 1, 2016	77		$	27.01
Granted	190		7.84
Vested	(68	)	18.59
Phantom units outstanding, September 30, 2016	199		11.58

As of September 30, 2016, we expect $2.3 million of unrecognized compensation cost related to unvested phantom units to be recognized over the weighted-average period of 2.2 years.

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Accounting for Derivatives

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Accounting for Derivatives

8.  Accounting for Derivatives

We are exposed to market risks associated with changes in interest rates. We use derivative financial instruments to minimize the risks and/or costs associated with financial activities by managing our exposure to interest rate fluctuations on a portion of our debt obligations. We do not use derivative financial instruments for trading or other speculative purposes.

Interest Rate Risk

At September 30, 2016, we were a party to the following interest rate swaps, which were entered into to offset changes in expected cash flows due to fluctuations in the associated variable interest rates:

Expiration Date	Notional Value (in millions)
May 2018	$	300
May 2019	100
May 2020	100
	$	500

As of September 30, 2016, the weighted average effective fixed interest rate on our interest rate swaps was 1.6%. We have designated these interest rate swaps as cash flow hedging instruments so that any change in their fair values is recognized as a component of comprehensive income (loss) and is included in accumulated other comprehensive income (loss) to the extent the hedge is effective. As the swap terms substantially coincide with the hedged item and are expected to offset changes in expected cash flows due to fluctuations in the variable rate, we currently do not expect a significant amount of ineffectiveness on these hedges. We perform quarterly calculations to determine whether the swap agreements are still effective and to calculate any ineffectiveness. We recorded an immaterial amount of interest expense during the nine months ended September 30, 2016 as compared to $0.4 million of interest income during the nine months ended September 30, 2015 due to ineffectiveness related to interest rate swaps. We estimate that $4.3 million of deferred losses attributable to interest rate swaps and included in our accumulated other comprehensive income (loss) at September 30, 2016, will be reclassified into earnings as interest expense at then-current values during the next twelve months as the underlying hedged transactions occur. Cash flows from derivatives designated as hedges are classified in our condensed consolidated statements of cash flows under the same category as the cash flows from the underlying assets, liabilities or anticipated transactions, unless the derivative contract contains a significant financing element; in this case, the cash settlements for these derivatives are classified as cash flows from financing activities in our condensed consolidated statements of cash flows.

The following tables present the effect of derivative instruments on our consolidated financial position and results of operations (in thousands):

		Fair Value Asset (Liability)
	Balance Sheet Location	September 30, 2016			December 31, 2015
Derivatives designated as hedging instruments:
Interest rate swaps	Intangible and other assets, net	$	—		$	45
Interest rate swaps	Current portion of interest rate swaps	(4,509		)	(4,608		)
Interest rate swaps	Other long-term liabilities	(4,413		)	(1,421		)
Total derivatives		$	(8,922	)	$	(5,984	)

	Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives			Location of Loss  Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)	Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)
Derivatives designated as cash flow hedges:
Interest rate swaps
Three months ended September 30, 2016	$	2,049		Interest expense	$	(1,152	)
Three months ended September 30, 2015	(6,100		)	Interest expense	(1,896		)
Nine months ended September 30, 2016	(7,401		)	Interest expense	(3,285		)
Nine months ended September 30, 2015	(12,098		)	Interest expense	(5,312		)

The counterparties to our derivative agreements are major international financial institutions. We monitor the credit quality of these financial institutions and do not expect non-performance by any counterparty, although such non-performance could have a material adverse effect on us. We have no specific collateral posted for our derivative instruments. The counterparties to our interest rate swaps are also lenders under our senior secured credit facility and, in that capacity, share proportionally in the collateral pledged under the related facility.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

9.  Fair Value Measurements

The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories:

• Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement.

• Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers.

• Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information.

The following table presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015, with pricing levels as of the date of valuation (in thousands):

	September 30, 2016							December 31, 2015
	Level 1		Level 2			Level 3		Level 1		Level 2			Level 3
Interest rate swaps asset	$	—	$	—		$	—	$	—	$	45		$	—
Interest rate swaps liability	—		(8,922		)	—		—		(6,029		)	—

Our interest rate swaps are recorded at fair value utilizing a combination of the market approach and income approach to estimate fair value based on forward LIBOR curves.

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2016 and December 31, 2015, with pricing levels as of the date of valuation (in thousands):

	September 30, 2016						December 31, 2015
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Impaired long-lived assets	$	—	$	—	$	1,170	$	—	$	—	$	2,789

Our estimate of the impaired long-lived assets’ fair value was primarily based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use. We discounted the expected proceeds, net of selling and other carrying costs, using a weighted average disposal period of four years.

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Long-Lived Asset Impairment

9 Months Ended

Sep. 30, 2016

Asset Impairment Charges [Abstract]

Long-Lived Asset Impairment

10.  Long-Lived Asset Impairment

We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressor units from our active fleet, indicate that the carrying amount of an asset may not be recoverable.

During the three and nine months ended September 30, 2016, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 45 and 205 idle compressor units totaling approximately 14,000 and 67,000 horsepower would be retired from the active fleet during the three and nine months ended September 30, 2016, respectively. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $4.7 million and a $18.7 million asset impairment to reduce the book value of each unit to its estimated fair value during the three and nine months ended September 30, 2016, respectively. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the nine months ended September 30, 2016, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.2 million and $3.8 million during the three and nine months ended September 30, 2016, respectively, to reduce the book value of each unit to its estimated fair value.

During the three and nine months ended September 30, 2015, we reviewed the future deployment of our idle compression assets for units that were not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on this review, we determined that approximately 80 and 130 idle compressor units totaling approximately 17,000 and 34,000 horsepower would be retired from the active fleet during the three and nine months ended September 30, 2015, respectively. The retirement of these units from the active fleet triggered a review of these assets for impairment. As a result, we recorded a $4.0 million and an $8.9 million asset impairment to reduce the book value of each unit to its estimated fair value during the three and nine months ended September 30, 2015, respectively. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

In connection with our fleet review during the three and nine months ended September 30, 2015, we evaluated for impairment idle units that had been culled from our fleet in prior years and were available for sale. Based upon that review, we reduced the expected proceeds from disposition for certain of the remaining units. This resulted in an additional impairment of $3.2 million and $3.6 million during the three and nine months ended September 30, 2015 respectively, to reduce the book value of each unit to its estimated fair value.

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Restructuring Charges

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Charges

11.  Restructuring Charges

In the first quarter of 2016, Archrock determined to undertake a cost reduction program to reduce its on-going operating expenses, including workforce reductions and closure of certain make ready shops. These actions were the result of Archrock’s review of its business and efforts to efficiently manage cost and maintain its business in line with current and expected activity levels and anticipated make ready demand in the U.S. market. During the three and nine months ended September 30, 2016, we incurred $1.9 million and $7.3 million, respectively, of restructuring charges comprised of an allocation of expenses related to severance benefits and consulting fees associated with this cost reduction plan from Archrock to us pursuant to the terms of the Omnibus Agreement based on horsepower. These charges are reflected as restructuring charges in our condensed consolidated statements of operations.

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Unit Transactions

9 Months Ended

Sep. 30, 2016

Partners' Capital [Abstract]

Unit Transactions

12.  Unit Transactions

On September 30, 2016, we issued and sold 1,158 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us.

On March 1, 2016, the Partnership completed the March 2016 Acquisition. A portion of the $18.8 million purchase price was funded through the issuance of 257,000 common units for $1.8 million. In connection with this acquisition, we issued and sold 5,205 general partner units to our general partner so it could maintain its approximate 2% general partner interest in us.

In May 2015, we entered into an At-The-Market Equity Offering Sales Agreement (the “ATM Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC. During the nine months ended September 30, 2015, we sold 49,774 common units for net proceeds of $1.2 million pursuant to the ATM Agreement. We did not make any sales under the ATM Agreement during 2016 and the ATM Agreement expired pursuant to its terms on June 21, 2016.

In April 2015, we completed the April 2015 Contract Operations Acquisition from Archrock. In connection with this acquisition, we issued approximately 4.0 million common units to Archrock and approximately 80,000 general partner units to our general partner.

As of September 30, 2016, Archrock owned 23,582,056 common units and 1,215,925 general partner units, collectively representing approximately 40% interest in us.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13.  Commitments and Contingencies

In 2011, the Texas Legislature enacted changes related to the appraisal of natural gas compressors for ad valorem tax purposes by expanding the definitions of “Heavy Equipment Dealer” and “Heavy Equipment” effective from the beginning of 2012 (the “Heavy Equipment Statutes”). Under the revised statutes, we believe we are a Heavy Equipment Dealer, that our natural gas compressors are Heavy Equipment and that we, therefore, are required to file our ad valorem taxes under this new methodology. We further believe that our natural gas compressors are taxable under the Heavy Equipment Statutes in the counties where we maintain a business location and keep natural gas compressors instead of where the compressors may be located on January 1 of a tax year. As a result of this new methodology, our ad valorem tax expense (which is reflected in our condensed consolidated statements of operations as a component of cost of sales (excluding depreciation and amortization expense)) includes a benefit of $10.9 million during the nine months ended September 30, 2016. Since the change in methodology became effective in 2012, we have recorded an aggregate benefit of $46.1 million as of September 30, 2016, of which approximately $11.0 million has been agreed to by a number of appraisal review boards and county appraisal districts and $35.1 million has been disputed and is currently in litigation. A large number of appraisal review boards denied our position, although some accepted it, and we filed 82 petitions for review in the appropriate district courts with respect to the 2012 tax year, 93 petitions for review in the appropriate district courts with respect to the 2013 tax year, 103 petitions for review in the appropriate district courts with respect to the 2014 tax year, 111 petitions for review in the appropriate district courts with respect to the 2015 tax year and 92 petitions for review in the appropriate district courts with respect to the 2016 tax year.

To date, only five cases have advanced to the point of trial or submission of summary judgment motions on the merits, and only three cases have been decided, with two of the decisions having been rendered by the same presiding judge. All three of those decisions were appealed, and all three of the appeals have been decided by intermediate appellate courts.

On October 17, 2013, the 143rd Judicial District Court of Loving County, Texas ruled in EXLP Leasing LLC & EES Leasing LLC v. Loving County Appraisal District that our wholly-owned subsidiary, Archrock Partners Leasing LLC, formerly known as EXLP Leasing LLC (“EXLP Leasing”), and Archrock’s subsidiary, Archrock Services Leasing LLC, formerly known as EES Leasing LLC (“EES Leasing”), are Heavy Equipment Dealers and that their compressors qualify as Heavy Equipment, but the district court further held that the Heavy Equipment Statutes were unconstitutional as applied to EXLP Leasing’s and EES Leasing’s compressors. EXLP Leasing and EES Leasing appealed the district court’s constitutionality holding to the Eighth Court of Appeals in El Paso, Texas. On September 23, 2015, the Eighth Court of Appeals ruled in EXLP Leasing’s and EES Leasing’s favor by overruling the 143rd District Court’s constitutionality ruling. The Eighth Court of Appeals also ruled, however, that EXLP Leasing’s and EES Leasing’s natural gas compressors are taxable in the counties where they were located on January 1 of the tax year at issue.

On October 28, 2013, the 143rd Judicial District Court of Ward County, Texas ruled in EES Leasing LLC & EXLP Leasing LLC v. Ward County Appraisal District that EXLP Leasing and EES Leasing are Heavy Equipment Dealers and that their compressors qualify as Heavy Equipment, but the court held that the Heavy Equipment Statutes were unconstitutional as applied to their compressors. EXLP Leasing and EES Leasing appealed the district court’s constitutionality holding to the Eighth Court of Appeals in El Paso, Texas, and the Ward County Appraisal District cross-appealed the district court’s rulings that EXLP Leasing’s and EES Leasing’s compressors qualify as Heavy Equipment. On September 23, 2015, the Eighth Court of Appeals ruled in EXLP Leasing’s and EES Leasing’s favor by overruling the 143rd District Court’s constitutionality ruling and affirming its ruling that EXLP Leasing’s and EES Leasing’s compressors qualify as Heavy Equipment. The Eighth Court of Appeals also ruled, however, that EXLP Leasing’s and EES Leasing’s natural gas compressors are taxable in the counties where they were located on January 1 of the tax year at issue. The Ward County Appraisal District and Loving County Appraisal District each filed (on January 27, 2016 and February 10, 2016, respectively) a petition asking the Texas Supreme Court to review its respective Eighth Court of Appeals decision. On March 11, 2016, EXLP Leasing and EES Leasing filed responses to the appraisal districts’ petitions and cross-petitions for review in each case asking the Texas Supreme Court to also review the Eighth Court of Appeals’ determination that natural gas compressors are taxable in the counties where they were located on January 1 of the tax year at issue. The Ward County Appraisal District filed its response to EXLP Leasing’s and EES Leasing’s cross-petition on June 6, 2016, and EXLP Leasing and EES Leasing filed their reply on June 21, 2016. The Loving County Appraisal District filed its response to EXLP Leasing’s and EES Leasing’s cross-petition on May 27, 2016, and EXLP Leasing and EES Leasing filed their reply on June 10, 2016.

On March 18, 2014, the 10th Judicial District Court of Galveston, Texas ruled in EXLP Leasing LLC & EES Leasing LLC v. Galveston Central Appraisal District that EXLP Leasing and EES Leasing are Heavy Equipment Dealers and that their compressors qualify as Heavy Equipment, but the court held the Heavy Equipment Statutes unconstitutional as applied to their compressors. EXLP Leasing and EES Leasing appealed the district court’s constitutionality holding to the Fourteenth Court of Appeals in Houston, Texas. On August 25, 2015, the Fourteenth Court of Appeals issued a ruling stating that EXLP Leasing’s and EES Leasing’s compressors are taxable in the counties where they were located on January 1 of the tax year at issue, and it remanded the case to the district court for further evidence on the issue of whether the Heavy Equipment Statutes are constitutional as applied to EXLP Leasing’s and EES Leasing’s compressors. On November 24, 2015, EXLP Leasing and EES Leasing filed a petition asking the Texas Supreme Court to review this decision. On March 21, 2016, the Galveston Central Appraisal District filed a response to EXLP Leasing’s and EES Leasing’s petition for review, and EXLP Leasing and EES Leasing filed their reply on April 26, 2016.

In EES Leasing v. Irion County Appraisal District, EES Leasing and the appraisal district each filed motions for summary judgment in the 51st Judicial District Court of Irion County, Texas concerning the applicability and constitutionality of the Heavy Equipment Statutes. On May 20, 2014, the district court entered an order denying both motions for summary judgment, holding that a fact issue existed as to the applicability of the Heavy Equipment Statutes to the one compressor at issue. The presiding judge for the 51st District Court has since consolidated the 2012 tax year case with EES Leasing’s 2013 tax year case, which also included EXLP Leasing as a party. On August 27, 2015, the presiding judge abated the combined case, EES Leasing LLC and EXLP Leasing LLC v. Irion County Appraisal District, until the final resolution of the appellate cases considering the constitutionality of the Heavy Equipment Statutes, or further order of the court.

EXLP Leasing and EES Leasing also filed a motion for summary judgment in EES Leasing LLC & EXLP Leasing LLC v. Harris County Appraisal District, pending in the 189th Judicial District Court of Harris County, Texas. The court heard arguments on the motion on December 6, 2013 but has yet to rule. No trial date has been set.

On June 3, 2015, the Fourth Court of Appeals in San Antonio, Texas issued a decision reversing the 406th District Court’s dismissal of EXLP Leasing’s and EES Leasing’s tax appeals for want of jurisdiction. In EXLP Leasing LLC et. al v. Webb County Appraisal District, United Independent School District (“United ISD”) intervened as a party in interest and sought to dismiss the lawsuit arguing that the district court was without jurisdiction to hear the appeal. Under Section 42.08(b) of the Texas Tax Code, a property owner must pay before the delinquency date the lesser of (1) the amount of taxes due on the portion of the taxable value of the property that is not in dispute or (2) the amount of taxes due on the property under the order from which the appeal is taken. EXLP Leasing and EES Leasing paid zero taxes to Webb County because the entire amount of tax assessed by Webb County was in dispute. Instead, as required by the Heavy Equipment Statutes and Texas Comptroller forms, EXLP Leasing and EES Leasing paid taxes on the compressors at issue to Victoria County, where they maintain their place of business and keep natural gas compressors. The Webb County Appraisal District and United ISD contested EXLP Leasing’s and EES Leasing’s position that the Heavy Equipment Statutes contain situs provisions requiring that taxes be paid where the dealer has a business location and keeps its natural gas compressors, instead arguing that taxes are payable to the county where each compressor is located as of January 1 of the tax year at issue. The district court granted United ISD’s motion to dismiss on April 1, 2014 and declined EXLP Leasing’s and EES Leasing’s motion to reconsider. The Fourth Court of Appeals reversed, holding that, based on the plain meaning of Section 42.08(b)(1), and because the entire amount was in dispute, EXLP Leasing and EES Leasing were not required to prepay disputed taxes to invoke the trial court’s jurisdiction. The Fourth Court of Appeals denied United ISD’s request for a rehearing. On September 29, 2015, United ISD filed a petition for review in the Texas Supreme Court. On December 4, 2015, the Texas Supreme Court denied United ISD’s petition for review.

United ISD has four delinquency lawsuits pending against EXLP Leasing and EES Leasing in the 49th District Court of Webb County, Texas. The cases have been abated pending the resolution of EXLP Leasing’s and EES Leasing’s 2012 tax year case pending in the 406th Judicial District Court of Webb County, Texas.

On September 2, 2016, the Texas Supreme Court requested that consolidated merits briefs be filed in EXLP Leasing’s and EES Leasing’s cases against the Loving County Appraisal District, Ward County Appraisal District, and Galveston Central Appraisal District, as well as two similar cases involving different taxpayers. On September 19, 2016, the Supreme Court entered a consolidated briefing schedule for the five cases. Consolidated briefing is scheduled to be completed by February 7, 2017.

We continue to believe that the revised statutes are constitutional as applied to natural gas compressors and that under the revised statutes our natural gas compressors are taxable in the counties where we maintain a business location and keep natural gas compressors. Recognizing the similarity of the issues and that these cases will ultimately be resolved by the Texas appellate courts, most of the remaining 2012-2016 district court cases have been formally or effectively abated pending a decision from the Texas Supreme Court.

If our appeals are ultimately unsuccessful, or if the Texas Supreme Court determines to review the matter and rules against us,

we would be required to pay ad valorem taxes up to the aggregate benefit we have recorded, and the additional ad valorem tax payments may also be subject to substantial penalties and interest. In addition, while we do not expect the ultimate determination of the issue of where the natural gas compressors are taxable under the Heavy Equipment Statutes would have an impact on the amount of taxes due, we could be subject to substantial penalties if we are unsuccessful on this issue. Also, if we are unsuccessful in our litigation with the appraisal districts, or if legislation is enacted in Texas that repeals or alters the Heavy Equipment Statutes such that in the future we do not qualify as a Heavy Equipment Dealer or our compressors do not qualify as Heavy Equipment, then we would likely be required to pay these ad valorem taxes under the old methodology going forward, which would increase our quarterly cost of sales expense up to approximately the amount of our then most recent quarterly benefit recorded. If this litigation is resolved against us in whole or in part, or if in the future we do not qualify as a Heavy Equipment Dealer or our compressors do not qualify as Heavy Equipment because of new or revised Texas statutes, we will incur additional taxes and could be subject to substantial penalties and interest, which would impact our future results of operations and cash flows, including our cash available for distribution.

In the ordinary course of business, we are also involved in various other pending or threatened legal actions. While management is unable to predict the ultimate outcome of these actions, it believes that any ultimate liability arising from any of these other actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to make cash distributions to our unitholders. However, because of the inherent uncertainty of litigation, we cannot provide assurance that the resolution of any particular claim or proceeding to which we are a party will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to make cash distributions to our unitholders.

We are subject to a number of state and local taxes that are not income-based. As many of these taxes are subject to audit by the taxing authorities, it is possible that an audit could result in additional taxes due. We accrue for such additional taxes when we determine that it is probable that we have incurred a liability and we can reasonably estimate the amount of the liability. As of September 30, 2016 and December 31, 2015, we had accrued $1.3 million and $1.1 million, respectively, for the outcomes of non-income based tax audits. We do not expect that the ultimate resolutions of these audits will result in a material variance from the amounts accrued. We do not accrue for unasserted claims for tax audits unless we believe the assertion of a claim is probable, it is probable that it will be determined that the claim is owed and we can reasonably estimate the claim or range of the claim. We also believe the likelihood is remote that the impact of potential unasserted claims from non-income based tax audits could be material to our consolidated financial position, but it is possible that the resolution of future audits could be material to our results of operations or cash flows for the period in which the resolution occurs.

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Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

14.  Subsequent Events

On October 31, 2016, we agreed to acquire from Archrock contract operations customer service agreements with 63 customers and a fleet of approximately 270  compressor units used to provide compression services under those agreements, comprising approximately 150,000 horsepower, or approximately 4% (by then available horsepower) of the combined U.S. contract operations business of Archrock and us (the “November 2016 Contract Operations Acquisition”). Total consideration for the transaction will be $85 million, excluding transaction costs. The consideration to be paid will consist entirely of newly issued common units and general partner units. The number of common units and general partner units to be issued by us will be determined by the daily volume weighted average price of our common units averaged over the thirty trading days preceding the closing date. This transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the fourth-quarter of 2016. Based on the terms of the contribution, conveyance and assumption agreement, the common units and general partner units, including incentive distribution rights, we issue for this acquisition are not entitled to receive a cash distribution relating to the quarter ended September 30, 2016.

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Organization and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Components of comprehensive income (loss) are net income (loss) and all changes in equity during a period except those resulting from transactions with our limited partners or general partner. Our accumulated other comprehensive income (loss) consists only of derivative financial instruments. Changes in accumulated other comprehensive income (loss) represent changes in the fair value of derivative financial instruments that are designated as cash flow hedges to the extent the hedge is effective and amortization of terminated interest rate swaps. See Note 8(“Accounting for Derivatives”) for additional disclosures related to comprehensive income (loss).

Financial Instruments

Financial Instruments

Our financial instruments consist of cash, trade receivables, interest rate swaps and debt. At September 30, 2016 and December 31, 2015, the estimated fair values of these financial instruments approximated their carrying amounts as reflected in our condensed consolidated balance sheets. The fair value of our fixed rate debt was estimated based on quoted market yields in inactive markets, which are Level 2 inputs. The fair value of our floating rate debt was estimated using a discounted cash flow analysis based on interest rates offered on loans with similar terms to borrowers of similar credit quality, which are Level 3 inputs. See Note 9(“Fair Value Measurements”) for additional information regarding the fair value hierarchy.

Income Per Common Unit

Income Per Common Unit

Income per common unit is computed using the two-class method. Under the two-class method, basic income per common unit is determined by dividing net income allocated to the common units after deducting the amounts allocated to our general partner (including distributions to our general partner on its incentive distribution rights) and participating securities, by the weighted average number of outstanding common units (also referred to as limited partner units) during the period. Participating securities include unvested phantom units with nonforfeitable tandem distribution equivalent rights to receive cash distributions in the quarter in which distributions are paid on common units. During periods of net loss, no effect is given to participating securities because they do not have a contractual obligation to participate in our losses.

When computing income per common unit in periods when distributions are greater than income, the amount of the actual incentive distribution rights, if any, is deducted from net income and allocated to our general partner for the corresponding period. The remaining amount of net income, after deducting distributions to participating securities, is allocated between the general partner and common units based on how our partnership agreement allocates net losses.

When computing income per common unit in periods when income is greater than distributions, income is allocated to the general partner, participating securities and common units based on how our partnership agreement would allocate income if the full amount of income for the period had been distributed. This allocation of net income does not impact our total net income, consolidated results of operations or total cash distributions (including actual incentive distribution rights); however, it may result in our general partner being allocated additional incentive distributions for purposes of our income per unit calculation, which could reduce net income per common unit. However, as required by our partnership agreement, we determine cash distributions based on available cash and determine the actual incentive distributions allocable to our general partner based on actual distributions.

Accounting Standards Updates Not Yet Implemented

Accounting Standards Updates Not Yet Implemented

In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-15 (“Update 2016-15”) which addresses diversity in practice in that simplifies several elements of cash flow classification including how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Update 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Update 2016-15 will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. Early adoption is permitted. We are currently evaluating the impact of Update 2016-15 on our consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (“Update 2016-13”) that changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. Update 2016-13 is effective for fiscal years beginning after December 15, 2019, and early adoption is permitted. Entities will apply Update 2016-13 provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We are currently evaluating the impact of Update 2016-13 on our consolidated financial statements.

In March2016, the FASB issued Accounting Standards Update No. 2016-09 (“Update 2016-09”) that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either debt or equity liabilities, and classification on the statement of cash flows. For public entities, Update 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of Update 2016-09 on our consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (“Update 2016-02”) that establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new guidance, lessor accounting is largely unchanged. Update 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of Update 2016-02 on our consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“Update 2014-09”) that outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Update 2014-09 also requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Update 2014-09 will be effective for reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Early adoption is permitted for reporting periods beginning after December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach. In March2016, the FASB issued Accounting Standards Update No. 2016-08 (“Update 2016-08”), which clarifies the guidance in Update 2014-09 by providing guidance on recording revenue on a gross basis versus a net basis based on the determination of whether an entity is a principal or an agent when another party is involved in providing goods or services to a customer. In April2016, the FASB issued Accounting Standards Update 2016-10 (“Update 2016-10”), clarifying the implementation guidance on identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Also in April2016, the FASB issued Accounting Standards Update No. 2016-11 (“Update 2016-11”), rescinding certain paragraphs pertaining to accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. In May2016, the FASB issued Accounting Standards Update No. 2016-12 (“Update 2016-12”), clarifying implementation guidance on a few narrow areas and adds some practical expedients to the guidance. Each of these subsequent updates has the same effective date as Update 2014-09. We are currently evaluating the potential impact of Update 2014-09, Update 2016-08, Update 2016-10, Update 2016-11 and Update 2016-12 on our consolidated financial statements.

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Organization and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Schedule of the carrying amount and fair value of debt

The following table summarizes the carrying amount and fair value of our debt as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016				December 31, 2015
	Carrying Amount (1)		Fair Value		Carrying Amount (1)		Fair Value
Fixed rate debt	$	682,797	$	659,000	$	680,484	$	524,000
Floating rate debt	687,585		688,000		729,898		731,000
Total debt	$	1,370,382	$	1,347,000	$	1,410,382	$	1,255,000

⁽¹⁾  Carrying values are shown net of unamortized debt discounts and unamortized deferred financing costs. See Note 5(“Long-Term Debt”) for further details.

Schedule of reconciliation of net income used in calculation of basic and diluted earnings per common unit

The following table reconciles net income used in the calculation of basic and diluted income per common unit (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	(567	)	$	11,498		$	3,264		$	53,910
Less: General partner incentive distribution rights	—			(4,753		)	—			(13,100		)
Less: General partner 2% ownership interest	11			(134		)	(65		)	(810		)
Common units interest in net income (loss)	(556		)	6,611			3,199			40,000
Less: Net income attributable to participating securities	(56		)	(49		)	(170		)	(144		)
Net income (loss) used in basic and diluted income per common unit	$	(612	)	$	6,562		$	3,029		$	39,856

Schedule of potential common units included in computing diluted earnings per common unit

The following table shows the potential common units that were included in computing diluted income per common unit (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Weighted average common units outstanding including participating securities	60,036		59,801		59,966		58,218
Less: Weighted average participating securities outstanding	(199	)	(85	)	(161	)	(77	)
Weighted average common units outstanding — used in basic income per common unit	59,837		59,716		59,805		58,141
Net dilutive potential common units issuable:
Phantom units	—		—		—		—
Weighted average common units and dilutive potential common units — used in diluted income (loss) per common unit	59,837		59,716		59,805		58,141

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Business Acquisitions (Tables)

9 Months Ended

Sep. 30, 2016

Business Acquisitions

Schedule of pro forma financial information

The following table shows pro forma financial information for the nine months ended September 30, 2015 (in thousands, except per unit amounts):

	Nine months ended September 30, 2015
Revenue	$	504,468
Net income	$	54,502
Basic income per common unit	$	0.67
Diluted income per common unit	$	0.67

March 2016 Acquisition

Business Acquisitions

Summary of purchase price allocation based on estimated fair values of acquired assets and liabilities as of the acquisition date

The following table summarizes the purchase price allocation based on estimated fair values of the acquired assets as of the acquisition date (in thousands):

	Fair Value
Property, plant and equipment	$	14,929
Intangible assets	3,839
Purchase price	$	18,768

Schedule of amounts of finite-lived intangible assets, and their associated average useful lives

The amount of finite life intangible assets, and their associated average useful lives, was determined based on the period which the assets are expected to contribute directly or indirectly to our future cash flows, and consisted of the following:

	Amount (in thousands)		Average Useful Life
Customer related	$	3,839	2.3 years

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Schedule of long-term debt

Long-term debt consisted of the following (in thousands):

	September 30, 2016			December 31, 2015
Revolving credit facility due May 2018	$	538,000		$	580,500
Term loan facility due May 2018	150,000			150,000
Less: Deferred financing costs, net of amortization	(415		)	(602		)
	149,585			149,398
6% senior notes due April 2021	350,000			350,000
Less: Debt discount, net of amortization	(3,379		)	(3,862		)
Less: Deferred financing costs, net of amortization	(4,623		)	(5,396		)
	341,998			340,742
6% senior notes due October 2022	350,000			350,000
Less: Debt discount, net of amortization	(4,229		)	(4,673		)
Less: Deferred financing costs, net of amortization	(4,972		)	(5,585		)
	340,799			339,742
Long-term debt	$	1,370,382		$	1,410,382

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Cash Distributions (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Summary of distributions per unit

The following table summarizes our distributions per unit for 2015 and 2016:

Period Covering	Payment Date	Distribution per Limited Partner Unit		Total Distribution (1)
1/1/2015 — 3/31/2015	May 15, 2015	$	0.5625	$	35.9	million
4/1/2015 — 6/30/2015	August 14, 2015	0.5675		39.1		million
7/1/2015 — 9/30/2015	November 13, 2015	0.5725		39.7		million
10/1/2015 — 12/31/2015	February 12, 2016	0.5725		39.7		million
1/1/2016 — 3/31/2016	May 13, 2016	0.2850		17.5		million
4/1/2016 — 6/30/2016	August 15, 2016	0.2850		17.5		million

⁽¹⁾    Includes distributions to our general partner on its incentive distribution right

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Unit-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of phantom unit activity

The following table presents phantom unit activity during the nine months ended September 30, 2016:

	Phantom Units (in thousands)		Weighted Average Grant Date Fair Value per Unit
Phantom units outstanding, January 1, 2016	77		$	27.01
Granted	190		7.84
Vested	(68	)	18.59
Phantom units outstanding, September 30, 2016	199		11.58

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Accounting for Derivatives (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

At September 30, 2016, we were a party to the following interest rate swaps, which were entered into to offset changes in expected cash flows due to fluctuations in the associated variable interest rates:

Expiration Date	Notional Value (in millions)
May 2018	$	300
May 2019	100
May 2020	100
	$	500

Effect of derivative instruments on consolidated financial position

The following tables present the effect of derivative instruments on our consolidated financial position and results of operations (in thousands):

		Fair Value Asset (Liability)
	Balance Sheet Location	September 30, 2016			December 31, 2015
Derivatives designated as hedging instruments:
Interest rate swaps	Intangible and other assets, net	$	—		$	45
Interest rate swaps	Current portion of interest rate swaps	(4,509		)	(4,608		)
Interest rate swaps	Other long-term liabilities	(4,413		)	(1,421		)
Total derivatives		$	(8,922	)	$	(5,984	)

Effect of derivative instruments on results of operations

	Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives			Location of Loss  Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)	Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)
Derivatives designated as cash flow hedges:
Interest rate swaps
Three months ended September 30, 2016	$	2,049		Interest expense	$	(1,152	)
Three months ended September 30, 2015	(6,100		)	Interest expense	(1,896		)
Nine months ended September 30, 2016	(7,401		)	Interest expense	(3,285		)
Nine months ended September 30, 2015	(12,098		)	Interest expense	(5,312		)

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities measured at fair value on a recurring basis with pricing levels as of the date of valuation

The following table presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015, with pricing levels as of the date of valuation (in thousands):

	September 30, 2016							December 31, 2015
	Level 1		Level 2			Level 3		Level 1		Level 2			Level 3
Interest rate swaps asset	$	—	$	—		$	—	$	—	$	45		$	—
Interest rate swaps liability	—		(8,922		)	—		—		(6,029		)	—

Schedule of assets and liabilities measured at fair value on a nonrecurring basis with pricing levels as of the date of valuation

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2016 and December 31, 2015, with pricing levels as of the date of valuation (in thousands):

	September 30, 2016						December 31, 2015
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Impaired long-lived assets	$	—	$	—	$	1,170	$	—	$	—	$	2,789

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Organization and Summary of Significant Accounting Policies - Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Carrying Amount
Financial Instruments
Total debt	$ 1,370,382	$ 1,410,382
Carrying Amount | Fixed rate debt
Financial Instruments
Total debt	682,797	680,484
Carrying Amount | Floating rate debt
Financial Instruments
Total debt	687,585	729,898
Fair Value
Financial Instruments
Total debt	1,347,000	1,255,000
Fair Value | Fixed rate debt
Financial Instruments
Total debt	659,000	524,000
Fair Value | Floating rate debt
Financial Instruments
Total debt	$ 688,000	$ 731,000

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Organization and Summary of Significant Accounting Policies - Goodwill (Details) $ in Millions	3 Months Ended
	Dec. 31, 2015 USD ($)
Goodwill, Impaired
Goodwill, impairment loss	$ 127.8

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Organization and Summary of Significant Accounting Policies - Income (Loss) Per Common Unit (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Earnings (Loss) Per Common Unit
Net income (loss)	$ (567)	$ 11,498	$ 3,264	$ 53,910
Less: General partner incentive distribution rights	0	(4,753)	0	(13,100)
Less: General partner 2% ownership interest	11	(134)	(65)	(810)
Common units interest in net income (loss)	(556)	6,611	3,199	40,000
Less: Net income attributable to participating securities	(56)	(49)	(170)	(144)
Net income (loss) used in basic and diluted income per common unit	$ (612)	$ 6,562	$ 3,029	$ 39,856
General partner units, interest (as a percent)	2.00%	2.00%	2.00%	2.00%	2.00%
Potential common units included in computing the dilutive potential common units used in dilutive earnings per common unit
Weighted average common units outstanding including participating securities (in units)	60,036	59,801	59,966	58,218
Less: Weighted average participating securities outstanding (in units)	(199)	(85)	(161)	(77)
Weighted average common units outstanding - used in basic earnings per common unit (in units)	59,837	59,716	59,805	58,141
Net dilutive potential common units issuable:
Phantom units (in units)	0	0	0	0
Weighted average common units and dilutive potential common units - used in diluted earnings per common unit (in units)	59,837	59,716	59,805	58,141

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Business Acquisitions - March 2016 Acquisition (Narratives) (Details) hp in Thousands, $ in Thousands		9 Months Ended
	Mar. 01, 2016 USD ($) customer compressor_unit hp shares	Sep. 30, 2016 USD ($) shares	Sep. 30, 2015 USD ($) shares	Dec. 31, 2015
Business Acquisitions
Payments to acquire business		$ 13,779	$ 0
Units issued in connection with acquisition (value)		$ 1,836	$ 109,908
General partner units, interest (as a percent)		2.00%	2.00%	2.00%
Partners' Capital Common Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares		257,000	3,963,138
Units issued in connection with acquisition (value)		$ 1,799	$ 107,710
Partners' Capital General Partner Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares		5,205	80,341
Units issued in connection with acquisition (value)		$ 37	$ 2,198
General partner units, interest (as a percent)		2.00%
March 2016 Acquisition
Business Acquisitions
Number of customers with service agreements | customer	4
Number of compressor units used to provide compression services | compressor_unit	19
Horsepower of compressor units used to provide compression services | hp	23
Payments to acquire business	$ 18,800
Line of credit outstanding	$ 13,800
Number of like kind exchanged compressor units | compressor_unit	24
Like kind exchanged compressor units, value	$ 3,200
Transaction costs incurred		$ 200
Property, plant and equipment, useful life	15 years
March 2016 Acquisition | Partners' Capital Common Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares	257,000
Units issued in connection with acquisition (value)	$ 1,800
March 2016 Acquisition | Partners' Capital General Partner Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares	5,205
General partner units, interest (as a percent)	2.00%

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Business Acquisitions - Net Assets Acquired (Details) - March 2016 Acquisition $ in Thousands	Mar. 01, 2016 USD ($)
Net Assets Acquired
Property, plant and equipment	$ 14,929
Intangible assets	3,839
Purchase price	$ 18,768

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Business Acquisitions - Finite Lived Assets Acquired (Details) - March 2016 Acquisition - Customer related $ in Thousands	Mar. 01, 2016 USD ($)
Business Acquisitions
Total acquired identifiable intangible assets	$ 3,839
Weighted average useful life	2 years 3 months 18 days

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Business Acquisitions - April 2015 Contract Operations Acquisition (Narratives) (Details) hp in Thousands, $ in Millions		1 Months Ended	9 Months Ended
	Apr. 17, 2015 USD ($) customer compressor_unit hp shares	Apr. 30, 2015 shares	Sep. 30, 2016 USD ($) shares	Sep. 30, 2015 USD ($) shares
Archrock
Business Acquisitions
Capital contributions recorded related to differences in net book value of compressor units exchanged to our assets transferred to related party			$ 2.4	$ (7.9)
Partners' Capital Common Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares			257,000	3,963,138
Partners' Capital General Partner Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares			5,205	80,341
April 2015 Contract Operations Acquisition
Business Acquisitions
Number of customers with service agreements | customer	60
Number of compressor units used to provide compression services | compressor_unit	238
Horsepower of compressor units used to provide compression services | hp	148
Business combination, percentage of available horsepower provided	3.00%
Property, plant and equipment	$ 108.8
Business acquisition, accumulated depreciation related to assets acquired	59.9
Business combination, consideration transferred	102.3
Capital contributions recorded related to differences in net book value of compressor units exchanged to our assets transferred to related party				$ 7.6
April 2015 Contract Operations Acquisition | Customer related
Business Acquisitions
Finite lived assets acquired	$ 1.1
April 2015 Contract Operations Acquisition | Archrock
Business Acquisitions
Number of compressor units acquired | compressor_unit	179
Horsepower of compressor units acquired | hp	66
April 2015 Contract Operations Acquisition | Partners' Capital Common Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares	4,000,000	4,000,000
April 2015 Contract Operations Acquisition | Partners' Capital General Partner Units
Business Acquisitions
Units issued in connection with acquisition (in units) | shares	80,000	80,000

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Business Acquisitions - Pro Forma Financial Information (Narratives) (Details) - USD ($) $ in Millions		1 Months Ended	9 Months Ended
	Apr. 17, 2015	Apr. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Acquisitions
Additional pro forma reduction of net income allocable to the entity's limited partners				$ 0.3
Partners' Capital Common Units
Business Acquisitions
Units issued in connection with acquisition (in units)			257,000	3,963,138
Partners' Capital General Partner Units
Business Acquisitions
Units issued in connection with acquisition (in units)			5,205	80,341
April 2015 Contract Operations Acquisition | Partners' Capital Common Units
Business Acquisitions
Units issued in connection with acquisition (in units)	4,000,000	4,000,000
April 2015 Contract Operations Acquisition | Partners' Capital General Partner Units
Business Acquisitions
Units issued in connection with acquisition (in units)	80,000	80,000

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Business Acquisitions - Pro Forma Financial Information (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($) $ / shares
Pro forma financial information
Revenue | $	$ 504,468
Net income | $	$ 54,502
Basic income per common unit (in dollars per unit) | $ / shares	$ 0.67
Diluted income per common unit (in dollars per unit) | $ / shares	$ 0.67

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Related Party Transactions (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) compressor_unit hp	Sep. 30, 2015 USD ($) compressor_unit hp	Dec. 31, 2015 USD ($)
Related party transactions
Accumulated depreciation of leased equipment	$ 865,899		$ 846,213
Archrock
Related party transactions
Amount of compression equipment purchased from related party		$ 146,300
Amount of fabricated compression equipment purchased from related party and recorded in our consolidated balance sheet as property, plant and equipment at carrying values of related party		134,600
Excess amount over carrying value of fabricated compression equipment purchased from related party recorded as distribution of equity		11,700
Amount contributed by related party related to completion of overhauls on compression equipment	$ 800	$ 8,100
Number of compressor units transferred to a related party | compressor_unit	354	349
Horsepower of compressor units transferred to related party | hp	168,600	112,800
Net book value of compressor units transferred to related party	$ 75,400	$ 54,700
Number of compressor units transferred by related party | compressor_unit	259	260
Horsepower of compressor units transferred by related party | hp	121,600	99,600
Net book value of compressor units transferred by related party	$ 77,800	$ 46,800
Capital Contributions (distributions) recorded related to differences in net book value of compressor units exchanged to our assets transferred to related party	2,400	(7,900)
Revenue — affiliates	100	100
Cost of sales related to lease	200	$ 1,500
Archrock | Equipment Leased to Other Party
Related party transactions
Aggregate costs of leased equipment	200		10,100
Accumulated depreciation of leased equipment	100		$ 3,300
Exterran Corporation
Related party transactions
Amount of compression equipment purchased from related party	$ 26,300

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Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Apr. 30, 2014	Mar. 31, 2013
Long-Term Debt
Long-term debt	$ 1,370,382	$ 1,410,382
6% senior notes due April 2021
Long-Term Debt
Long-term debt, gross	350,000	350,000
Less: Debt discount, net of amortization	(3,379)	(3,862)
Less: Deferred financing costs, net of amortization	(4,623)	(5,396)
Long-term debt	$ 341,998	$ 340,742
Interest rate (as a percent)	6.00%	6.00%		6.00%
6% senior notes due October 2022
Long-Term Debt
Long-term debt, gross	$ 350,000	$ 350,000
Less: Debt discount, net of amortization	(4,229)	(4,673)
Less: Deferred financing costs, net of amortization	(4,972)	(5,585)
Long-term debt	$ 340,799	$ 339,742
Interest rate (as a percent)	6.00%	6.00%	6.00%
Revolving credit facility due May 2018
Long-Term Debt
Long-term debt	$ 538,000	$ 580,500
Term loan facility due May 2018
Long-Term Debt
Long-term debt, gross	150,000	150,000
Less: Deferred financing costs, net of amortization	(415)	(602)
Long-term debt	$ 149,585	$ 149,398

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Long-Term Debt - Revolving Credit Facility and Term Loan (Details)		1 Months Ended	9 Months Ended
	May 31, 2016 USD ($)	Feb. 28, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)
Revolving credit facility and term loan facility
Long-Term Debt
Transaction costs			$ 1,700,000	$ 1,300,000
Revolving credit facility due May 2018
Long-Term Debt
Increase (decrease) in borrowing capacity	$ (75,000,000)	$ 250,000,000
Maximum borrowing capacity	825,000,000.0	$ 900,000,000.0
Line of credit remaining potential increase to borrowing capacity	50,000,000
Aggregate maximum increase to credit facility	$ 125,000,000
Undrawn capacity under revolving credit facility			$ 287,000,000
Debt to EBITDA ratio			5.95
Line of credit facility, remaining borrowing under per credit agreement			$ 274,300,000
Line of credit facility current available borrowing capacity			287,000,000
Term loan facility due May 2018
Long-Term Debt
Maximum borrowing capacity			$ 150,000,000.0

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Long-Term Debt Long-Term Debt - Senior Notes (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Apr. 30, 2014	Mar. 31, 2013
Long-Term Debt
Ownership percentage (as a percent)	100.00%
Amount of independent assets or operations	$ 0
6% senior notes due April 2021
Long-Term Debt
Principal amount of senior debt				$ 350,000,000.0
Interest rate (as a percent)	6.00%	6.00%		6.00%
6% senior notes due October 2022
Long-Term Debt
Principal amount of senior debt			$ 350,000,000.0
Interest rate (as a percent)	6.00%	6.00%	6.00%

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Cash Distributions (Narratives) (Details) - USD ($) $ / shares in Units, $ in Millions								3 Months Ended		9 Months Ended
	Oct. 31, 2016	Aug. 15, 2016	May 13, 2016	Feb. 12, 2016	Nov. 13, 2015	Aug. 14, 2015	May 15, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Partners' Equity, Allocations and Cash Distributions
Distribution per limited partner unit (in dollars per unit)		$ 0.2850	$ 0.2850	$ 0.5725	$ 0.5725	$ 0.5675	$ 0.5625	$ 0.2850	$ 0.5675	$ 1.1425	$ 1.6875
Subsequent Event
Partners' Equity, Allocations and Cash Distributions
Cash distribution declared (in dollars per unit)	$ 0.2850
Cash distribution amount declared	$ 17.5
Partners' Capital Common Units | First order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										98.00%
Partners' Capital Common Units | Second order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										85.00%
Partners' Capital Common Units | Third order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										75.00%
Partners' Capital Common Units | Thereafter order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										50.00%
Partners' Capital General Partner Units | First order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										2.00%
Partners' Capital General Partner Units | Second order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										15.00%
Partners' Capital General Partner Units | Third order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										25.00%
Partners' Capital General Partner Units | Thereafter order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Percentage of operating surplus distributed to unitholders										50.00%
Partners' Capital General Partner and Common Units | First order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Distribution per limited partner unit (in dollars per unit)										$ 0.4025
Partners' Capital General Partner and Common Units | Second order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Distribution per limited partner unit (in dollars per unit)										0.4375
Partners' Capital General Partner and Common Units | Third order of cash distribution
Partners' Equity, Allocations and Cash Distributions
Distribution per limited partner unit (in dollars per unit)										$ 0.5250

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Cash Distributions Cash Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands							3 Months Ended		9 Months Ended
	Aug. 15, 2016	May 13, 2016	Feb. 12, 2016	Nov. 13, 2015	Aug. 14, 2015	May 15, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Summary of distributions per unit
Distribution per limited partner unit (in dollars per unit)	$ 0.2850	$ 0.2850	$ 0.5725	$ 0.5725	$ 0.5675	$ 0.5625	$ 0.2850	$ 0.5675	$ 1.1425	$ 1.6875
Total Distribution	$ 17,500	$ 17,500	$ 39,700	$ 39,700	$ 39,100	$ 35,900			$ 74,706	$ 110,310

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Unit-Based Compensation - Long-term Incentive Plan (Details)	Sep. 30, 2016 shares
Long-Term Incentive Plan
Unit-Based Compensation
Maximum number of shares available under the Plan	1,035,378

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Unit-Based Compensation - Phantom Units (Details) - Phantom Units $ / shares in Units, shares in Thousands, $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Unit-Based Compensation
Vesting period	3 years
Phantom Units (in thousands)
Beginning balance (in units) | shares	77
Granted (in units) | shares	190
Vested (in units) | shares	(68)
Ending balance (in units) | shares	199
Weighted Average Grant Date Fair Value per Unit
Beginning balance (in dollars per unit) | $ / shares	$ 27.01
Granted (in dollars per unit) | $ / shares	7.84
Vested (in dollars per unit) | $ / shares	18.59
Ending balance (in dollars per unit) | $ / shares	$ 11.58
Unrecognized compensation cost
Expected unrecognized compensation cost related to unvested phantom units (in dollars) | $	$ 2.3
Weighted-average period during which the expected unrecognized compensation cost related to unvested phantom units to be recognized	2 years 2 months 12 days
First anniversary vesting
Unit-Based Compensation
Vesting percentage	33.33%
Second anniversary vesting
Unit-Based Compensation
Vesting percentage	33.33%
Third anniversary vesting
Unit-Based Compensation
Vesting percentage	33.33%

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Accounting for Derivatives - Interest Rate Risk (Details) - Derivatives designated as hedging instruments - Interest rate swaps $ in Millions	Sep. 30, 2016 USD ($)
Accounting for Derivatives
Notional amount of interest rate swaps	$ 500
Derivative expiring in 2018
Accounting for Derivatives
Notional amount of interest rate swaps	300
Derivative expiring in 2019
Accounting for Derivatives
Notional amount of interest rate swaps	100
Derivative expiring in 2020
Accounting for Derivatives
Notional amount of interest rate swaps	$ 100

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Accounting for Derivatives - Interest Rate Risk (Narratives) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2016
Accounting for Derivatives
Interest income recorded due to ineffectiveness related to interest rate swaps	$ 0.4
Deferred losses to be reclassified during next 12 months		$ 4.3
Interest rate swaps | Derivatives designated as hedging instruments
Accounting for Derivatives
Weighted average effective fixed interest rate on interest rate swaps (as a percent)		1.60%

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Accounting for Derivatives - Effect on Derivative Instruments on the Balance Sheet (Details) - Derivatives designated as hedging instruments - Interest rate swaps - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounting for Derivatives
Derivative asset, net	$ (8,922)	$ (5,984)
Intangible and other assets, net
Accounting for Derivatives
Derivative asset	0	45
Current portion of interest rate swaps
Accounting for Derivatives
Derivative liability	(4,509)	(4,608)
Other long-term liabilities
Accounting for Derivatives
Derivative liability	$ (4,413)	$ (1,421)

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Accounting for Derivatives - Effect on Derivative Instruments on the Income Statement (Details) - Derivatives designated as cash flow hedges - Interest rate swaps - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Effect of derivative instruments on results of operations
Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives	$ 2,049	$ (6,100)	$ (7,401)	$ (12,098)
Interest expense
Effect of derivative instruments on results of operations
Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Loss)	$ (1,152)	$ (1,896)	$ (3,285)	$ (5,312)

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Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Recurring basis | Level 1
Fair value measurements
Interest rate swaps asset	$ 0	$ 0
Interest rate swaps liability	0	0
Recurring basis | Level 2
Fair value measurements
Interest rate swaps asset	0	45
Interest rate swaps liability	(8,922)	(6,029)
Recurring basis | Level 3
Fair value measurements
Interest rate swaps asset	0	0
Interest rate swaps liability	0	0
Nonrecurring basis | Level 1
Fair value measurements
Impaired long-lived assets	0	0
Nonrecurring basis | Level 2
Fair value measurements
Impaired long-lived assets	0	0
Nonrecurring basis | Level 3
Fair value measurements
Impaired long-lived assets	$ 1,170	$ 2,789

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Fair Value Measurements (Narratives) (Details)	9 Months Ended
	Sep. 30, 2016
Impaired long-lived assets
Fair value measurements
Weighted average disposal period used in estimation of the fair value of the impaired long-lived assets	4 years

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Long-Lived Asset Impairment (Details) hp in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($) compressor_unit hp	Sep. 30, 2015 USD ($) compressor_unit hp	Sep. 30, 2016 USD ($) compressor_unit hp	Sep. 30, 2015 USD ($) compressor_unit hp
Long-lived asset impairment
Long-lived asset impairment	$ 7,909	$ 7,163	$ 22,507	$ 12,473
Held for sale
Long-lived asset impairment
Long-lived asset impairment	$ 3,200	$ 3,200	$ 3,800	$ 3,600
Idle compressor units
Long-lived asset impairment
Number of long-lived assets to be retired | compressor_unit	45	80	205	130
Horsepower of long-lived assets to be retired | hp	14	17	67	34
Long-lived asset impairment	$ 4,700	$ 4,000	$ 18,700	$ 8,900

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Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 1,946	$ 0	$ 7,293	$ 0

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Unit Transactions (Details) - USD ($) $ in Thousands				1 Months Ended	9 Months Ended
	Sep. 30, 2016	Mar. 01, 2016	Apr. 17, 2015	Apr. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Unit Transactions
General partner units, interest (as a percent)	2.00%				2.00%	2.00%	2.00%
Net proceeds from sale of common units					$ 0	$ 1,164
General partner units owned (in units)	1,215,925				1,215,925		1,209,562
Archrock
Unit Transactions
Common units owned (in units)	23,582,056				23,582,056
General partner units owned (in units)	1,215,925				1,215,925
General partner's ownership interest in partnership (as a percent)	40.00%				40.00%
Limited Partner Units | ATM Agreement
Unit Transactions
Sale of partner units (in units)						49,774
Net proceeds from sale of common units						$ 1,200
Partners' Capital Common Units
Unit Transactions
Units issued in connection with acquisition (in units)					257,000	3,963,138
Issuance of common units (in units)						49,774
Partners' Capital General Partner Units
Unit Transactions
Sale of partner units (in units)	1,158
General partner units, interest (as a percent)	2.00%				2.00%
Units issued in connection with acquisition (in units)					5,205	80,341
Issuance of common units (in units)					1,158
March 2016 Acquisition
Unit Transactions
Purchase price		$ 18,768
March 2016 Acquisition | Limited Partner Units
Unit Transactions
Units issued in connection with acquisition (in units)		257,000
Net proceeds from sale of common units		$ 1,800
March 2016 Acquisition | Partners' Capital Common Units
Unit Transactions
Units issued in connection with acquisition (in units)		257,000
March 2016 Acquisition | Partners' Capital General Partner Units
Unit Transactions
General partner units, interest (as a percent)		2.00%
Units issued in connection with acquisition (in units)		5,205
April 2015 Contract Operations Acquisition | Partners' Capital Common Units
Unit Transactions
Units issued in connection with acquisition (in units)			4,000,000	4,000,000
April 2015 Contract Operations Acquisition | Partners' Capital General Partner Units
Unit Transactions
Units issued in connection with acquisition (in units)			80,000	80,000

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Commitments and Contingencies (Details) $ in Millions	9 Months Ended	57 Months Ended
	Sep. 30, 2016 USD ($) petition	Sep. 30, 2016 USD ($) petition	Dec. 31, 2015 USD ($) petition	Dec. 31, 2014 petition	Dec. 31, 2013 petition	Dec. 31, 2012 petition
Commitments and Contingencies Disclosure [Abstract]
Ad valorem tax benefit	$ 10.9	$ 46.1
Ad valorem tax benefit agreed to by a number of appraisal review boards and county appraisal districts	11.0	11.0
Ad valorem tax benefit in litigation	$ 35.1	$ 35.1
Number of petitions | petition	92	92	111	103	93	82
Accrued liability for the outcomes of non-income based tax audits	$ 1.3	$ 1.3	$ 1.1

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Subsequent Events (Details) - Archrock - Subsequent Event hp in Thousands, $ in Millions	Oct. 31, 2016 USD ($) customer compressor_unit hp
Subsequent Event [Line Items]
Number of customers with service agreements | customer	63
Number of compressor units used to provide compression services | compressor_unit	270
Horsepower of compressor units used to provide compression services | hp	150
Business combination, percentage of available horsepower provided	4.00%
Business combination, total consideration | $	$ 85