USA Compression Partners (USAC) FY2025 10-K Risk Factors: 8 New, 9 Dropped

What the changes say

Expansion via the J-W Power Acquisition and integration with Energy Transfer drive new operational and tax risks.

What changed since the prior 10-K

New

NewRisks Related to Our Business
compression services, which may have a material adverse effect on our business, results of operations, financial condition, and reduce our cash available for distribution
About 19% of 2025 compression service revenues were month-to-month and cancelable on 30 days' notice.
NewRisks Related to Our Business
operating reserves, we may not grow as quickly as businesses that are able to reinvest their available cash to expand ongoing operations
Issuing additional equity or debt to fund growth could increase interest expense or dilute distributions per common unit.
NewRisks Related to Our Business
If any of these risks or other unanticipated liabilities or costs were to materialize, we may not realize the desired benefits from past and future acquisitions, resulting in a negative impact on our results of operations
Unforeseen difficulties or below-forecast asset performance from the J-W Power Acquisition could harm our results of operations.
NewRisks Related to Our Business
Changes in U.S. trade policy and the impact of tariffs, including any resulting market volatility or trade tensions, may have a material adverse effect on our business and results of operations
Tariffs on steel and product imports, including 25% to 50% steel tariffs imposed in 2025, may increase our costs and market volatility.
NewRisks Related to Our Business
We may be subject to product liability claims if people or property are harmed by the compression units we package
Manufacturing compression units through J-W Power facilities exposes us to potential product liability lawsuits and damages.
NewRisks Related to Governmental Legislation and Regulation
The Partnership Agreement does not limit the number or timing of additional limited partner interests that we may issue, including limited partner interests that are convertible into or senior to our common units, without the approval of our common unitholders
Uncapped issuance of senior or convertible limited partner interests can dilute existing unitholders and lower market prices.
NewRisks Related to Governmental Legislation and Regulation
be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan and may recognize gain or loss on the disposition
Securities lending of common units to short sellers may cause unitholders to lose partnership status and trigger taxable gains.
NewRisks Related to Governmental Legislation and Regulation
We may have subsidiaries that will be treated as corporations for federal income tax purposes and subject to corporate-level income taxes
Subsidiaries acquired via J-W Power organized as corporations will be subject to corporate-level income taxes.

Dropped

Dropped
instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss, and deduction among our unitholders
IRS valuation challenges and state tax filing obligations.
DroppedRisks Related to Our Business
The deterioration of the financial condition of our customers could adversely affect our business
DroppedRisks Related to Our Business
The Preferred Units rank senior to our common units with respect to distribution rights and rights upon liquidation. These preferences could adversely affect the market price for our common units, or could make it more difficult for us to sell our common units in the future
DroppedRisks Related to Our Business
common unitholders will not be entitled to receive distributions covering any prior periods if we later recommence paying distributions on our common units
DroppedRisks Related to Our Business
Restrictions in the Partnership Agreement related to the Preferred Units may limit our ability to make distributions to our common unitholders and our ability to capitalize on acquisition and other business opportunities
DroppedRisks Related to Our Business
unanticipated costs in 2018 to utilize third-party contractors to service our compression units at a greater cost than we would have incurred to compensate employees to perform the same work
DroppedRisks Related to Governmental Legislation and Regulation
are applicable to our operations, we may occasionally identify or be notified of technical violations of certain requirements existing under various permits or other authorizations. We could be subject to penalties for any noncompliance in the future
DroppedRisks Related to Governmental Legislation and Regulation
adjustments directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced
DroppedRisks Related to Governmental Legislation and Regulation
matters, we make many fair market value estimates using a methodology based on the market value of our common units as a means to measure the fair market value of our assets. The IRS may challenge these valuation methods and the resulting allocations of income, gain, loss, and deduction

Reworded

85% rewrittenRisks Related to Our Business
As of December 31, 2025, we had $2.5 billion of total debt, net of amortized deferred financing costs, outstanding under our Credit Agreement and Senior Notes
Updated debt figures to $2.5 billion total debt, $1.75 billion credit facility commitments, and extended maturity to August 2030.
Was: As of December 31, 2024, we had $2.5 billion of total debt, net of amortized deferred financing costs, outstanding under our Credit Agreement and Senior Notes
77% rewrittenRisks Related to Governmental Legislation and Regulation
We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss, and deduction. The IRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units
Added detail on using common unit market value as a methodology for asset fair market value estimates subject to IRS challenge.
76% rewrittenRisks Related to Governmental Legislation and Regulation
Energy Transfer and Westerman, Ltd. may sell our common units in the public or private markets, and such sales could have an adverse impact on the trading price of our common units
Added Westerman, Ltd. owning 18,175,323 common units from the J-W Power Acquisition and related registration rights.
Was: Energy Transfer may sell, and the holders of the Preferred Units have sold and may continue to sell, our common units in the public or private markets, and such sales could have an adverse impact on the trading price of our common units
72% rewrittenRisks Related to Our Business
Implementing the shared services model with Energy Transfer has been and will continue to be a complex and time-consuming process. Disruptions to our systems or operations caused by the implementation may have a material adverse impact on us
Updated shared services integration with Energy Transfer to note that information systems have migrated to Energy Transfer ERP systems.
Was: Implementing the shared services model with Energy Transfer will be a complex and time-consuming process. Disruptions to our systems or operations caused by the implementation may have a material adverse impact on us
70% rewrittenRisks Related to Our Business
We may be unable to grow successfully through acquisitions, which may negatively impact our operations and limit our ability to maintain or increase the level of distributions on our common units
Added specific mention of the J-W Power Acquisition as a driver for potential future business acquisitions.
66% rewrittenRisks Related to Governmental Legislation and Regulation
An increase in interest rates may cause the market price of our common units to decline
Refined master limited partnership distribution yield sensitivity to interest rates with unchanged core risk text.
66% rewrittenRisks Related to Governmental Legislation and Regulation
We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposes or any other matter affecting us. The IRS may adopt positions that differ from the positions we take, and the IRS’s positions may ultimately be sustained
Generalized IRS audit adjustment risk text by removing specific references to tax years 2019 and 2020.
59% rewrittenRisks Related to Governmental Legislation and Regulation
Holders of our common units have limited voting rights and are not entitled to elect the General Partner or its directors
Updated board appointment rights to reflect Energy Transfer's appointment of all board members following the Board Representation Agreement removal.
55% rewrittenRisks Related to Our Business
We face significant competition that may cause us to lose market share and reduce our cash available for distribution
52% rewrittenRisks Related to Our Business
Our ability to fund purchases of additional compression units and expansion capital expenditures in the future is dependent on our ability to access external capital, and if we are unable to access this external capital, we may be limited in our ability to grow our operations or maintain or increase our distributions
50% rewrittenRisks Related to Our Business
A reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders
Was: An extended reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders
48% rewrittenRisks Related to Our Business
The J-W Power Acquisition could expose us to additional unknown and contingent liabilities
Was: The CDM Acquisition could expose us to additional unknown and contingent liabilities, which liabilities could materially adversely affect our business, results of operations, and cash flow
46% rewrittenRisks Related to Governmental Legislation and Regulation
We and our customers are subject to substantial environmental regulation, and changes in these regulations could increase our and their costs or liabilities and result in decreased demand for our services
44% rewrittenRisks Related to Our Business
Impairment to the carrying value of long-lived assets could reduce our earnings
40% rewrittenRisks Related to Our Business
A prolonged or severe sudden downturn in the economic environment could cause an impairment of identifiable intangible assets and reduce our earnings
36% rewrittenRisks Related to Governmental Legislation and Regulation
We treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of our common units
35% rewrittenRisks Related to Our Business
The terms of the Credit Agreement and the Indentures restrict our current and future operations, particularly our ability to respond to changes or to take certain actions, may limit our ability to pay distributions and may limit our ability to capitalize on acquisitions and other business opportunities
35% rewrittenRisks Related to Our Business
To make cash distributions at our current distribution rate of $0.525 per common unit per quarter, or $2.10 per common unit per year, we will require available cash of $76.1 million per quarter, or $304.4 million per year, based on the number of common units outstanding as of February 12, 2026
Was: To make cash distributions at our current distribution rate of $0.525 per common unit per quarter, or $2.10 per common unit per year, we will require available cash of $61.7 million per quarter, or $246.8 million per year, based on the number of common units outstanding as of February 6, 2025
32% rewrittenRisks Related to Our Business
As of December 31, 2025, we had $1.0 billion and $750.0 million aggregate principal amount outstanding on our Senior Notes 2029 and Senior Notes 2033, respectively. The Senior Notes 2029 and Senior Notes 2033 accrue interest at the rate of 7.125% and 6.250% per year, respectively
Was: As of December 31, 2024, we had $750.0 million and $1.0 billion aggregate principal amount outstanding on our Senior Notes 2027 and Senior Notes 2029, respectively. The Senior Notes 2027 and Senior Notes 2029 accrue interest at the rate of 6.875% and 7.125% per year, respectively
28% rewrittenRisks Related to Governmental Legislation and Regulation
Cybersecurity breaches and other disruptions of our information systems, or those of our service providers, could compromise our information and operations and expose us to liability, which would cause our business and reputation to suffer
Was: Cybersecurity breaches and other disruptions of our information systems could compromise our information and operations and expose us to liability, which would cause our business and reputation to suffer
27% rewrittenRisks Related to Our Business
We have several key customers. The loss of any of these customers would result in a decrease in our revenues and cash available for distribution

All 60 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business

01We may not generate sufficient cash from operations following the establishment of cash reserves and payment of fees and expenses, including cost reimbursements to the General Partner, to enable us to make cash distributions on our common units at the current level
02To make cash distributions at our current distribution rate of $0.525 per common unit per quarter, or $2.10 per common unit per year, we will require available cash of $76.1 million per quarter, or $304.4 million per year, based on the number of common units outstanding as of February 12, 202635% rewritten
03A reduction in the demand for, or production of, natural gas or crude oil could adversely affect the demand for our services or the prices we charge for our services, which could result in a decrease in our revenues and cash available for distribution to unitholders50% rewritten
04We have several key customers. The loss of any of these customers would result in a decrease in our revenues and cash available for distribution27% rewritten
05We face significant competition that may cause us to lose market share and reduce our cash available for distribution55% rewritten
06compression services, which may have a material adverse effect on our business, results of operations, financial condition, and reduce our cash available for distributionNew
07As of December 31, 2025, we had $2.5 billion of total debt, net of amortized deferred financing costs, outstanding under our Credit Agreement and Senior Notes85% rewritten
08As of December 31, 2025, we had $1.0 billion and $750.0 million aggregate principal amount outstanding on our Senior Notes 2029 and Senior Notes 2033, respectively. The Senior Notes 2029 and Senior Notes 2033 accrue interest at the rate of 7.125% and 6.250% per year, respectively32% rewritten
09We depend on a limited number of suppliers and are vulnerable to product shortages and price increases, which could have a negative impact on our results of operations
10We may be unable to grow our cash flows if we are unable to expand our business, which could limit our ability to maintain or increase the level of distributions to our common unitholders
11Our ability to fund purchases of additional compression units and expansion capital expenditures in the future is dependent on our ability to access external capital, and if we are unable to access this external capital, we may be limited in our ability to grow our operations or maintain or increase our distributions52% rewritten
12operating reserves, we may not grow as quickly as businesses that are able to reinvest their available cash to expand ongoing operationsNew
13The terms of the Credit Agreement and the Indentures restrict our current and future operations, particularly our ability to respond to changes or to take certain actions, may limit our ability to pay distributions and may limit our ability to capitalize on acquisitions and other business opportunities35% rewritten
14If any of these risks or other unanticipated liabilities or costs were to materialize, we may not realize the desired benefits from past and future acquisitions, resulting in a negative impact on our results of operationsNew
15The J-W Power Acquisition could expose us to additional unknown and contingent liabilities48% rewritten
16We may be unable to grow successfully through acquisitions, which may negatively impact our operations and limit our ability to maintain or increase the level of distributions on our common units70% rewritten
17A prolonged or severe sudden downturn in the economic environment could cause an impairment of identifiable intangible assets and reduce our earnings40% rewritten
18Impairment to the carrying value of long-lived assets could reduce our earnings44% rewritten
19Changes in U.S. trade policy and the impact of tariffs, including any resulting market volatility or trade tensions, may have a material adverse effect on our business and results of operationsNew
20We depend on the continuing efforts of our executive officers and the departure of any of our executive officers could have a significant negative effect on our business, operating results, financial condition, and on our ability to compete effectively in the marketplace
21Implementing the shared services model with Energy Transfer has been and will continue to be a complex and time-consuming process. Disruptions to our systems or operations caused by the implementation may have a material adverse impact on us72% rewritten
22We may be subject to product liability claims if people or property are harmed by the compression units we packageNew
23From time to time, we are subject to various claims, tax audits, litigation, and other proceedings that could ultimately be resolved against us and require material future cash payments or charges, which could impair our financial condition or results of operations

Risks Related to Governmental Legislation and Regulation

24We and our customers are subject to substantial environmental regulation, and changes in these regulations could increase our and their costs or liabilities and result in decreased demand for our services46% rewritten
25New regulations, proposed regulations, and proposed modifications to existing regulations under the Clean Air Act, if implemented, could result in increased compliance costs
26Climate change legislation, regulatory initiatives, and litigation could result in increased compliance costs and restrictions on our customers’ operations, which could materially adversely affect our cash flows and results of operations
27Climate change may increase the frequency and severity of weather events that could result in severe personal injury, property damage, and environmental damage, which could curtail our or our customers’ operations and otherwise materially adversely affect our cash flows
28A climate-related decrease in demand for crude oil and natural gas could negatively affect our business
29Focus on ESG matters and conservation measures may adversely impact our business
30Increased regulation of hydraulic fracturing could result in reductions of, or delays in, natural gas production by our customers, which could adversely impact our revenue
31Holders of our common units have limited voting rights and are not entitled to elect the General Partner or its directors59% rewritten
32Furthermore, the Partnership Agreement contains provisions limiting the ability of common unitholders to call meetings or to obtain information about our operations, as well as other provisions limiting our common unitholders’ ability to influence the manner or direction of management
33The General Partner’s liability for our obligations is limited
34The Partnership Agreement limits the General Partner’s fiduciary duties to our unitholders
35The Partnership Agreement restricts the remedies available to our unitholders for actions taken by the General Partner that otherwise might constitute breaches of fiduciary duty
36The Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units
37The general partner interest or the control of the General Partner may be transferred to a third-party without unitholder consent
38An increase in interest rates may cause the market price of our common units to decline66% rewritten
39The Partnership Agreement does not limit the number or timing of additional limited partner interests that we may issue, including limited partner interests that are convertible into or senior to our common units, without the approval of our common unitholdersNew
40Energy Transfer and Westerman, Ltd. may sell our common units in the public or private markets, and such sales could have an adverse impact on the trading price of our common units76% rewritten
41The General Partner has a call right that may require holders of our common units to sell their common units at an undesirable time or price
42Unitholders may not have limited liability if a court finds that limited partner actions constitute control of our business
43Unitholders may have liability to repay distributions that were wrongfully distributed to them
44The NYSE does not require a publicly traded partnership like us to comply with certain of its corporate governance requirements
45Tax Risks to Common Unitholders
46The anticipated after-tax economic benefit of an investment in our common units largely depends on us being treated as a partnership for federal income tax purposes. We have not requested a ruling from the IRS on this or any other tax matter affecting us
47The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial, or administrative changes or differing interpretations, possibly applied on a retroactive basis
48We have not requested a ruling from the IRS with respect to our treatment as a partnership for federal income tax purposes or any other matter affecting us. The IRS may adopt positions that differ from the positions we take, and the IRS’s positions may ultimately be sustained66% rewritten
49Tax gain or loss on the disposition of our common units could be more or less than expected
50Unitholders will be subject to limitation on their ability to deduct interest expense incurred by us
51Tax-exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences to them
52We treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of our common units36% rewritten
53be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan and may recognize gain or loss on the dispositionNew
54We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss, and deduction. The IRS may challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units77% rewritten
55As a result of investing in our common units, you likely will become subject to state and local taxes and income tax return filing requirements in jurisdictions where we operate or own or acquire properties
56We may have subsidiaries that will be treated as corporations for federal income tax purposes and subject to corporate-level income taxesNew
57If we fail to develop or maintain an effective system of internal controls, we may not be able to report our financial results accurately or prevent fraud, which likely would have a negative impact on the market price of our common units
58We do not insure against all potential losses and could be seriously harmed by unexpected liabilities
59Cybersecurity breaches and other disruptions of our information systems, or those of our service providers, could compromise our information and operations and expose us to liability, which would cause our business and reputation to suffer28% rewritten
60Terrorist attacks, the threat of terrorist attacks, or other sustained military campaigns may adversely impact our results of operations

Other USA Compression Partners 10-Ks

FY2024 10-K risk factors
61 risks
This initial risk disclosure highlights dependence on natural gas and crude oil demand, significant leverage under credit agreements, and integration risks related to Energy Transfer.
Filed Feb 11, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.