USA Compression Partners LP

Previous wording

(1)Fleet horsepower is horsepower for compression units that have been delivered to us (and excludes units on order). As of March 31, 2024, we had 5,000 large horsepower on order for delivery, all of which was delivered in April 2024.

Current wording

(1)Fleet horsepower is horsepower for compression units that have been delivered to us.

Previous wording

(2)Total available horsepower is revenue-generating horsepower under contract for which we are billing a customer, horsepower in our fleet that is under contract but is not yet generating revenue, horsepower not yet in our fleet that is under contract but not yet generating revenue and that is subject to a purchase order, and idle horsepower. Total available horsepower excludes new horsepower on order for which we do not have an executed compression services contract.

Current wording

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

Previous wording

(7)Horsepower utilization is calculated as (i) the sum of (a) revenue-generating horsepower, (b) horsepower in our fleet that is under contract but is not yet generating revenue, and (c) horsepower not yet in our fleet that is under contract but not yet generating revenue and that is subject to a purchase order, divided by (ii) total available horsepower less idle horsepower that is under repair. Horsepower utilization based on revenue-generating horsepower and fleet horsepower as of March 31, 2024 and 2023, was 91.2% and 87.5%, respectively.

Current wording

(7)Horsepower utilization is calculated as (i) the sum of (a) revenue-generating horsepower, (b) horsepower in our fleet that is under contract but is not yet generating revenue, and (c) horsepower not yet in our fleet that is under contract but not yet generating revenue and that is expected to be delivered, divided by (ii) total available horsepower less idle horsepower that is under repair. Horsepower utilization based on revenue-generating horsepower and fleet horsepower as of June 30, 2024 and 2023, was 91.9% and 90.1%, respectively.

Previous wording

(8)Calculated as the average utilization for the months in the period based on utilization at the end of each month in the period. Average horsepower utilization based on revenue-generating horsepower and fleet horsepower for the three months ended March 31, 2024 and 2023, was 91.0% and 87.2%, respectively.

Current wording

(8)Calculated as the average utilization for the months in the period based on utilization at the end of each month in the period. Average horsepower utilization based on revenue-generating horsepower and fleet horsepower for the three months ended June 30, 2024 and 2023, was 91.2% and 89.0%, respectively. Average horsepower utilization based on revenue-generating horsepower and fleet horsepower for the six months ended June 30, 2024 and 2023, was 91.1% and 88.1%, respectively.

Previous wording

The 2.9% increase in fleet horsepower as of March 31, 2024, compared to March 31, 2023, primarily was driven by new compression units added to our fleet to meet incremental demand from customers for our compression services.

Current wording

The 3.7% increase in fleet horsepower as of June 30, 2024, compared to June 30, 2023, primarily was driven by new compression units added to our fleet to meet incremental demand from customers for our compression services.

Previous wording

The increases in revenue-generating horsepower, revenue-generating compression units, average horsepower per revenue-generating compression unit, horsepower utilization, and horsepower utilization based on revenue-generating horsepower and fleet horsepower as of or for the three months ended March 31, 2024, compared to March 31, 2023, primarily were driven by the addition and deployment of new, and redeployment of existing, large-horsepower compression units due to increased demand for our services commensurate with an overall increase in U.S. oil and gas production levels.

Current wording

The increases in revenue-generating horsepower, average horsepower per revenue-generating compression unit, horsepower utilization, and horsepower utilization based on revenue-generating horsepower and fleet horsepower as of and for the three and six months ended June 30, 2024, compared to June 30, 2023, primarily were driven by the addition and deployment of new, and redeployment of existing, large-horsepower compression units due to increased demand for our services commensurate with an overall increase in crude oil and natural gas produced within the U.S.

Previous wording

The 9.7% increase in average revenue per revenue-generating horsepower per month for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit.

Current wording

The 8.8% and 9.3% increases in average revenue per revenue-generating horsepower per month for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, primarily were due to higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit.

Previous wording

Parts and service revenue. The $1.6 million increase in parts and service revenue for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to an increase in maintenance work performed on units at customer locations that are outside the scope of our core maintenance activities and that are offered as a convenience, and in directly reimbursable freight and crane charges that are the financial responsibility of the customers. Demand for retail parts and services fluctuates from period to period based on varying customer needs.

Current wording

Parts and service revenue. The $1.7 million increase in parts and service revenue for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily was due to an increase in maintenance work performed on units at customer locations that are outside the scope of our core maintenance activities and that are offered as a convenience, and in directly reimbursable freight and crane charges that are the financial responsibility of the customers. Demand for retail parts and services fluctuates from period to period based on varying customer needs.

Previous wording

Cost of operations, exclusive of depreciation and amortization. The $8.4 million increase in cost of operations, exclusive of depreciation and amortization, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to (i) a $5.0 million increase in direct labor costs due to increased headcount associated with increased revenue-generating horsepower and higher employee costs, (ii) a $4.1 million increase in direct expenses, primarily driven by increased spending on fluids and parts resulting from higher costs and increased usage associated with increased revenue-generating horsepower, (iii) a $0.8 million increase in retail parts and service expenses, for which a corresponding increase in parts and service revenue also occurred, (iv) a $0.6 million increase in other indirect expenses primarily due to increased consumption and costs of supplies associated with increased revenue-generating horsepower, partially offset by (v) a $2.5 million decrease in outside maintenance costs due to lower use of third-party labor during the current period.

Current wording

Cost of operations, exclusive of depreciation and amortization. The $8.2 million increase in cost of operations, exclusive of depreciation and amortization, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily was due to (i) a $4.9 million increase in direct labor costs due to increased headcount associated with increased revenue-generating horsepower and higher employee costs, (ii) a $2.1 million increase in direct expenses, primarily driven by increased spending on parts resulting from higher costs and increased usage associated with increased revenue-generating horsepower, and (iii) a $1.1 million increase in retail parts and service expenses, for which a corresponding increase in parts and service revenue also occurred, partially offset by (iv) a $1.0 million decrease in outside maintenance costs due to lower use of third-party labor during the current period.

Previous wording

Depreciation and amortization expense. The $3.8 million increase in depreciation and amortization expense for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to (i) overhauls and major improvements to compression units, (ii) new trucks in our vehicle fleet, and (iii) new compression units placed in service to meet incremental demand from customers.

Current wording

Depreciation and amortization expense. The $5.3 million increase in depreciation and amortization expense for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily was due to (i) overhauls and major improvements to compression units, (ii) new trucks in our vehicle fleet, and (iii) new compression units placed in service to meet incremental demand from customers.

Previous wording

Impairment of compression equipment. The $1.2 million impairment of compression equipment for the three months ended March 31, 2023 primarily resulted from our evaluation of the future deployment of our idle fleet under then-current market conditions. The primary circumstances supporting these impairments were: (i) unmarketability of certain compression units into the foreseeable future, (ii) excessive maintenance costs associated with certain fleet assets, and (iii) prohibitive retrofitting costs that likely would prevent certain compression units from securing customer acceptance. These compression units were written down to their estimated salvage values, if any.

Current wording

Impairment of compression equipment. The $0.3 million and $10.3 million impairments of compression equipment for the three months ended June 30, 2024 and 2023, respectively, primarily resulted from our evaluation of the future deployment of our idle fleet under then-current market conditions. The primary circumstances supporting these impairments were: (i) unmarketability of certain compression units into the foreseeable future, (ii) excessive maintenance costs associated with certain fleet assets, and (iii) prohibitive retrofitting costs that likely would prevent certain compression units from securing customer acceptance. These compression units were written down to their estimated salvage values, if any.

Previous wording

As a result of our evaluation during the three months ended March 31, 2023, we retired six compression units representing approximately 8,700 of aggregate horsepower that previously were used to provide compression services in our business.

Current wording

As a result of our evaluation during the three months ended June 30, 2024 and 2023, respectively, we retiredtwo and 33 compression units, representing approximately 1,300 and 26,900 of aggregate horsepower, respectively, that previously were used to provide compression services in our business.

Previous wording

Interest expense, net. The $6.9 million increase in interest expense, net for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to increased borrowings and higher weighted-average interest rates under the Credit Agreement.

Current wording

Interest expense, net. The $6.8 million increase in interest expense, net for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily was due to increased aggregate borrowings and higher aggregate weighted-average interest rates under the Credit Agreement and refinanced senior notes.

Previous wording

The average outstanding borrowings under the Credit Agreement were $886.9 million and $670.0 million for the three months ended March 31, 2024 and 2023, respectively, and the weighted-average interest rate applicable to borrowings under the Credit Agreement was 7.99% and 7.15% for the three months ended March 31, 2024 and 2023, respectively.

Current wording

The weighted-average interest rate applicable to borrowings under the Credit Agreement was 7.97% and 7.63% for the three months ended June 30, 2024 and 2023, respectively, and average outstanding borrowings under the Credit Agreement were $748.9 million and $745.1 million for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Gain on derivative instrument. The $8.8 million gain on derivative instrument for the three months ended March 31, 2024, resulted from the increase in fair value of the interest-rate swap due to an increase in the interest-rate forward curve and cash received during the current period. We had no derivative instruments outstanding for the three months ended March 31, 2023.

Current wording

Gain on derivative instrument. The $3.1 million and $14.6 million gains on derivative instrument for the three months ended June 30, 2024 and 2023, respectively, resulted from the increase in fair value of the interest-rate swap due to an increase in the interest-rate forward curve and cash received.

Previous wording

Contract operations revenue. The $29.6 million increase in contract operations revenue for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to (i) a 9.7% increase in average revenue per revenue-generating horsepower per month, as a result of higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit and (ii) a 7.1% increase in average revenue-generating horsepower as a result of increased demand for our services, commensurate with an overall increase in U.S. oil and gas production levels.

Current wording

Contract operations revenue. The $56.2 million increase in contract operations revenue for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily was due to (i) a 9.3% increase in average revenue per revenue-generating horsepower per month, as a result of higher market-based rates on newly deployed and redeployed compression units, and CPI-based and other market-based price increases on existing customer contracts that occur as market conditions permit and (ii) a 6.7% increase in average revenue-generating horsepower as a result of increased demand for our services, commensurate with an overall increase in crude oil and natural gas produced within the U.S.

Previous wording

Related-party revenue. Related-party revenue was earned through related-party transactions that occur in the ordinary course of business with various affiliated entities of Energy Transfer. The $1.0 million increase in related-party revenue for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to an increase in revenues attributable to natural gas treating services driven by increased demand for these services from these entities.

Current wording

Related-party revenue. Related-party revenue was earned through related-party transactions that occur in the ordinary course of business with various affiliated entities of Energy Transfer. The $1.0 million increase in related-party revenue for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily was due to an increase in revenues attributable to natural gas treating services driven by increased demand for these services from these entities.

Previous wording

Selling, general, and administrative expense. The $3.7 million increase in selling, general, and administrative expense for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to (i) a $2.0 million increase in professional fees primarily related to an initiative to improve business performance, (ii) a $1.0 million increase in unit-based compensation expense, attributable to mark-to-market changes to our unit-based compensation liability that occurred as a result of changes to our per-unit trading price as of March 31, 2024, and (iii) a $0.5 million increase in employee-related expenses driven by increased headcount.

Current wording

Selling, general, and administrative expense. The $2.9 million increase in selling, general, and administrative expense for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily was due to (i) a $2.9 million increase in professional fees primarily related to an initiative to improve business performance and (ii) a $0.7 million increase in employee-related expenses driven by increased headcount, partially offset by (iii) a $1.3 million decrease in unit-based compensation expense, attributable to mark-to-market changes to our unit-based compensation liability that occurred as a result of changes to our per-unit trading price as of June 30, 2024.

Previous wording

Loss on extinguishment of debt. The$5.0 million loss on extinguishment of debtfor the three months ended March 31, 2024 resulted from the satisfaction and discharge of the Senior Notes 2026, which constituted a legal defeasance under GAAP (the “Defeasance”). This loss consists of the write-off of deferred financing costs of $4.3 million and the difference between (i) the purchase price of U.S. government securities of $748.8 million, which were used for the Defeasance, and (ii) the aggregate outstanding principal balance and accrued interest of the Senior Notes 2026 of $748.1 million at the time of Defeasance. For additional information regarding the Defeasance of the Senior Notes 2026, see Note 8 to our unaudited condensed consolidated financial statements under Part I, Item 1 “Financial Statements” of this report.

Current wording

Loss on extinguishment of debt. The$5.0 million loss on extinguishment of debtfor the six months ended June 30, 2024 resulted from the satisfaction and discharge of the Senior Notes 2026, which constituted a legal defeasance under GAAP (the “Defeasance”). This loss consists of the write-off of deferred financing costs of $4.3 million and the difference between (i) the purchase price of U.S. government securities of $748.8 million, which were used for the Defeasance, and (ii) the aggregate outstanding principal balance and accrued interest of the Senior Notes 2026 of $748.1 million at the time of Defeasance. For additional information regarding the Defeasance of the Senior Notes 2026, see Note 8 to our unaudited condensed consolidated financial statements under Part I, Item 1 “Financial Statements” of this report.

Previous wording

Gross margin. The $20.0 million increase in gross margin for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was due to (i) a $32.2 million increase in revenues, offset by (ii) an $8.4 million increase in cost of operations, exclusive of depreciation and amortization, and (iii) a $3.8 million increase in depreciation and amortization.

Current wording

Gross margin. The $14.9 million increase in gross margin for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was due to (i) a $28.4 million increase in revenues, offset by (ii) an $8.2 million increase in cost of operations, exclusive of depreciation and amortization, and (iii) a $5.3 million increase in depreciation and amortization.

Previous wording

The 1.1% increase in Adjusted gross margin percentage for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to inflation-driven pressures easing within cost of operations, exclusive of depreciation and amortization, and CPI-based and other market-based price increases on customer contracts that occur as market conditions permit.

Current wording

The 0.6% and 0.8% increases in Adjusted gross margin percentage for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, respectively, primarily were due to inflation-driven pressures easing within cost of operations, exclusive of depreciation and amortization, and CPI-based and other market-based price increases on customer contracts that occur as market conditions permit.

Previous wording

Adjusted EBITDA and Adjusted EBITDA percentage. The $21.2 million increase in Adjusted EBITDA for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to a $23.7 million increase in Adjusted gross margin, partially offset by a $2.5 million increase in selling, general, and administrative expenses, excluding unit-based compensation expense, transaction expenses, and severance charges.

Current wording

Adjusted EBITDA and Adjusted EBITDA percentage. The $18.7 million increase in Adjusted EBITDA for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily was due to a $20.2 million increase in Adjusted gross margin, partially offset by a $1.4 million increase in selling, general, and administrative expenses, excluding unit-based compensation expense, transaction expenses, and severance charges.

Previous wording

The 0.9% increase in Adjusted EBITDA percentage for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to inflation-driven pressures easing within cost of operations, exclusive of depreciation and amortization, and CPI-based and other market-based price increases on customer contracts that occur as market conditions permit.

Current wording

The 0.7% increases in Adjusted EBITDA percentage for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, respectively, primarily were due to inflation-driven pressures easing within cost of operations, exclusive of depreciation and amortization, and CPI-based and other market-based price increases on customer contracts that occur as market conditions permit.

Previous wording

DCF. The $24.0 million increase in DCF for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to (i) a $23.7 million increase in Adjusted gross margin, (ii) a $7.8 million decrease in distributions on Preferred Units following the conversion of 320,000 Preferred Units into 15,990,804 common units during 2024, (iii) a $2.4 million increase in cash received on derivative instrument, partially offset by (iv) a $6.7 million increase in cash interest expense, net, (v) a $2.5 million increase in selling, general, and administrative expenses, excluding unit-based compensation expense, transaction expenses, and severance charges, and (vi) a $0.7 million increase in maintenance capital expenditures. For additional information regarding the conversion of the Preferred Units, see Note 9 to our unaudited condensed consolidated financial statements under Part I, Item 1 “Financial Statements” of this report.

Current wording

The $42.8 million increase in DCF for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily was due to (i) a $43.9 million increase in Adjusted gross margin, (ii) a $15.6 million decrease in distributions on Preferred Units following the conversion of 320,000 Preferred Units into 15,990,804 common units during 2024, and (iii) a $3.7 million increase in cash received on derivative instrument, partially offset by (iv) a $13.0 million increase in cash interest expense, net, (v) a $3.2 million increase in maintenance capital expenditures, and (vi) a $4.1 million increase in selling, general and administrative expenses, excluding unit-based compensation expense, severance charges, and transaction expenses.

Previous wording

DCF Coverage Ratio. The increase in DCF Coverage Ratio for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was due to the increase in DCF, partially offset by increased distributions due to an increase in the number of common units, largely attributable to the conversion of 320,000 Preferred Units into 15,990,804 common units during 2024 and the conversion of warrants into 2,360,488 common units during 2023.

Current wording

DCF Coverage Ratio. The increases in DCF Coverage Ratio for the three and six months ended June 30, 2024, compared to the three and six months ended June 30, 2023, was due to the increase in DCF for each period, partially offset by increased distributions due to an increase in the number of common units, largely attributable to the conversion of 320,000 Preferred Units into 15,990,804 common units during 2024 and the conversion of warrants into 2,360,488 common units in November 2023.

Previous wording

We classify capital expenditures as maintenance or expansion on an individual-asset basis. Over the long term, we expect that our maintenance capital expenditure requirements will continue to increase as the overall size and age of our fleet increases. Our aggregate maintenance capital expenditures for the three months ended March 31, 2024 and 2023, were $5.8 million and $5.0 million, respectively. We currently plan to spend approximately $32.0 million in maintenance capital expenditures for the year 2024, including parts consumed from inventory.

Current wording

We classify capital expenditures as maintenance or expansion on an individual-asset basis. Over the long term, we expect that our maintenance capital expenditure requirements will continue to increase as the overall size and age of our fleet increases. Our aggregate maintenance capital expenditures for the six months ended June 30, 2024 and 2023, were $14.6 million and $11.4 million, respectively. We currently plan to spend approximately $32.0 million in maintenance capital expenditures for the year 2024, including parts consumed from inventory.

Previous wording

Without giving effect to any equipment that we may acquire pursuant to any future acquisitions, we currently plan to spend between $115.0 million and $125.0 million in expansion capital expenditures for the year 2024. Our expansion capital expenditures for the three months ended March 31, 2024 and 2023, were $104.8 million and $51.2 million, respectively.

Current wording

Without giving effect to any equipment that we may acquire pursuant to any future acquisitions, we currently plan to spend between $195.0 million and $205.0 million in expansion capital expenditures for the year 2024. Our expansion capital expenditures for the six months ended June 30, 2024 and 2023, were $171.8 million and $122.8 million, respectively.

Previous wording

The following table summarizes our sources and uses of cash for the three months ended March 31, 2024 and 2023, (in thousands):

Current wording

The following table summarizes our sources and uses of cash for the six months ended June 30, 2024 and 2023, (in thousands):

Previous wording

Net cash provided by operating activities. The $23.6 million increase in net cash provided by operating activities for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to (i) an increase in cash flows from a $23.7 million increase in Adjusted gross margin and (ii) an $18.4 million decrease in cash paid for interest, net of capitalized amounts, driven by the Defeasance of the Senior Notes 2026, partially offset by (iii) a $17.7 million increase in inventory purchases.

Current wording

Net cash provided by operating activities. The $32.4 million increase in net cash provided by operating activities for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily was due to (i) an increase in cash flows from a $43.9 million increase in Adjusted gross margin and (ii) a $17.3 million decrease in cash paid for interest, net of capitalized amounts, driven by the Defeasance of the Senior Notes 2026, partially offset by (iii) a $28.1 million increase in inventory purchases.

Previous wording

Net cash used in investing activities. The $57.7 million increase in net cash used in investing activities for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was due to a $57.2 million increase in capital expenditures, for purchases of new compression units, overhauls and major improvements, and purchases of other equipment, and a $0.5 million decrease in proceeds from disposition of property and equipment.

Current wording

Net cash used in investing activities. The $41.4 million increase in net cash used in investing activities for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, was due to (i) a $40.7 million increase in capital expenditures, for purchases of new compression units, overhauls and major improvements, and purchases of other equipment, and (ii) a $0.7 million decrease in proceeds from disposition of property and equipment.

Previous wording

Net cash provided by (used in) financing activities. The $34.2 million decrease in net cash used in financing activities for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily was due to (i) a $1.0 billion increase in proceeds from issuance of the Senior Notes 2029, partially offset by (ii) a $748.8 million increase in investments in government securities purchased in connection with the Defeasance of the Senior Notes 2026, (iii) a $198.8 million decrease in net borrowings under the Credit Agreement, (iv) a $16.6 million increase in deferred financing costs driven by the issuance of the Senior Notes 2029, and (v) a $2.6 million increase in common unit distributions.

Current wording

Net cash used in financing activities. The $9.0 million decrease in net cash used in financing activities for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily was due to (i) a $1.0 billion increase in proceeds from issuance of the Senior Notes 2029 and (ii) an $8.8 million decrease in Preferred Unit distributions, partially offset by (iii) a $748.8 million increase in investments in government securities purchased in connection with the Defeasance of the Senior Notes 2026, (iv) a $220.1 million decrease in net borrowings under the Credit Agreement, (v) a $18.2 million increase in deferred financing costs driven by the issuance of the Senior Notes 2029, and (vi) a $12.3 million increase in common unit distributions.

Previous wording

As of March 31, 2024, we had outstanding borrowings under the Credit Agreement of $736.1 million and, after accounting for outstanding letters of credit in the amount of $0.5 million, $863.4 million of remaining unused availability, of which, due to restrictions related to compliance with the applicable financial covenants, $429.3 million was available to be drawn. As of March 31, 2024, we were in compliance with all of our covenants under the Credit Agreement.

Current wording

As of June 30, 2024, we had outstanding borrowings under the Credit Agreement of $756.2 million and, after accounting for outstanding letters of credit in the amount of $0.5 million, $843.3 million of remaining unused availability, of which, due to restrictions related to compliance with the applicable financial covenants, $424.4 million was available to be drawn. As of June 30, 2024, we were in compliance with all of our covenants under the Credit Agreement.

Previous wording

As of May 2, 2024, we had outstanding borrowings under the Credit Agreement of $782.5 million and outstanding letters of credit of $0.5 million.

Current wording

As of August 1, 2024, we had outstanding borrowings under the Credit Agreement of $781.8 million and outstanding letters of credit of $0.5 million.

Previous wording

During the three months ended March 31, 2024, distributions of $0.4 million were reinvested under the DRIP resulting in the issuance of 17,050 common units. Such distributions are treated as non-cash transactions in the accompanying unaudited condensed consolidated statements of cash flows included under Part I, Item 1 “Financial Statements” of this report.

Current wording

During the six months ended June 30, 2024, distributions of $0.8 million were reinvested under the DRIP resulting in the issuance of 30,596 common units. Such distributions are treated as non-cash transactions in the accompanying unaudited condensed consolidated statements of cash flows included under Part I, Item 1 “Financial Statements” of this report.

Previous wording

(1)For the three months ended March 31, 2024 and 2023, unit-based compensation expense included $1.0 million and $1.1 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom unit awards. The remainder of unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability.

Current wording

(1)For the three and six months ended June 30, 2024, unit-based compensation expense included $1.0 million and $2.0 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom unit awards. For the three and six months ended June 30, 2023, unit-based compensation expense included $1.1 million and $2.2 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom unit awards. The remainder of unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability.

Previous wording

(1)For the three months ended March 31, 2024 and 2023, unit-based compensation expense included $1.0 million and $1.1 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom unit awards. The remainder of unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability.

Current wording

(1)For the three and six months ended June 30, 2024, unit-based compensation expense included $1.0 million and $2.0 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom unit awards. For the three and six months ended June 30, 2023, unit-based compensation expense included $1.1 million and $2.2 million, respectively, of cash payments related to quarterly payments of DERs on outstanding phantom unit awards. The remainder of unit-based compensation expense for all periods was related to non-cash adjustments to the unit-based compensation liability.

Previous wording

(5)During 2024, 320,000 Preferred Units were converted into 15,990,804 common units, all of which occurred on or prior to the distribution record date.

Current wording

(5)During 2024, 320,000 Preferred Units were converted into 15,990,804 common units, all of which occurred on or prior to the distribution record date for the first-quarter 2024.