SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS (Tables)

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Schedule of Preferred Units

The net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs.

	June 12, 2019
	(In thousands)
Transaction price, gross	$	625,000
Issue discount	(3,675)
Transaction costs to other third parties	(10,076)
Transaction price, net	$	611,249

Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows:

	June 12, 2019
	(In thousands)
Redeemable noncontrolling interest - Preferred Units	$	516,790
Long-term liability: Embedded derivative(1)	94,459
	$	611,249

(1)See Note 14—Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative.

Activity related to the Preferred Units for the years ended December 31, 2021 and 2020 is as follows:

	Units Outstanding	Financial Position(1)
	(In thousands, except for unit data)
Redeemable noncontrolling interest — Preferred Units: at December 31, 2019	638,163	$	555,599
Distribution of in-kind additional Preferred Units	22,531	—
Cash distributions paid to Preferred Unit limited partners	—	(23,124)
Allocation of Altus Midstream net income	N/A	75,906
Redeemable noncontrolling interest — Preferred Units: at December 31, 2020	660,694	608,381
Cash distributions paid to Preferred Unit limited partners	—	(46,249)
Distributions payable to Preferred Unit limited partners	—	(11,562)
Allocation of Altus Midstream net income	N/A	79,931
Accreted redemption value adjustment	N/A	81,975
Redeemable noncontrolling interest — Preferred Units: at December 31, 2021	660,694	$	712,476
Embedded derivative liability(2)		56,895
		$	769,371

(1)The Preferred Units are redeemable at Altus Midstream’s option at a redemption price (the Redemption Price), which as of December 31, 2021 is calculated as the greater of (i) an 11.5 percent internal rate of return and (ii) a 1.3 times multiple of invested capital. As of December 31, 2021, the Redemption Price would have been based on an 11.5 percent internal rate of return, which would equate to a redemption value of $738.7 million.

(2)Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. Refer to Note 14—Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.

N/A - not applicable.