10-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K

(MARK ONE)

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

For the fiscal year ended December 31, 2024

or

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

For the transition period from             to

Commission file no. 001-33666

Archrock, Inc .

(Exact name of registrant as specified in its charter)

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Delaware	74-3204509
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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9807 Katy Freeway , Suite 100 , Houston , Texas **** 77024

(Address of principal executive offices, zip code)

( 281 ) 836-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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Title of each class	​	Trading Symbol	​	Name of exchange on which registered
Common Stock, $0.01 par value per share	​	AROC	​	New York Stock Exchange

Securities registered pursuant to 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐  No ☒

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 ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

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

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Large accelerated filer	☒	​	Accelerated filer	☐
Non-accelerated filer	☐	​	Smaller reporting company	☐
​	​	​	Emerging growth company	☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

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Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

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Aggregate market value of the common stock of the registrant held by non-affiliates as of June 30, 2024: $3,066,717,416.

Number of shares of the common stock of the registrant outstanding as of February 18, 2025: 175,268,710 shares.

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DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the 2024 Meeting of Stockholders, which is expected to be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, are incorporated by reference into Part III of this Form 10-K.

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Table of Contents

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TABLE OF CONTENTS

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​<br><br>​<br><br>​		Page
Glossary	​	3
Forward-Looking Statements	​	5
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Part I	​	​
Item 1. Business	​	6
Item 1A. Risk Factors	​	19
Item 1B. Unresolved Staff Comments	​	33
Item 1C. Cybersecurity	​	33
Item 2. Properties	​	36
Item 3. Legal Proceedings	​	36
Item 4. Mine Safety Disclosures	​	36
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Part II	​	​
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	​	36
Item 6. [Reserved]	​	38
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	​	38
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	​	50
Item 8. Financial Statements and Supplementary Data	​	50
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	​	50
Item 9A. Controls and Procedures	​	51
Item 9B. Other Information	​	54
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	​	54
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Part III	​	​
Item 10. Directors, Executive Officers and Corporate Governance	​	54
Item 11. Executive Compensation	​	54
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	​	54
Item 13. Certain Relationships and Related Transactions and Director Independence	​	55
Item 14. Principal Accountant Fees and Services	​	55
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Part IV	​	​
Item 15. Exhibits and Financial Statement Schedules	​	55
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Signatures	​	61

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GLOSSARY

The following terms and abbreviations appearing in the text of this report, including the Financial Statements, have the meanings indicated below.

2020 Plan	​	2020 Stock Incentive Plan
Form 10–K	​	Annual Report on Form 10–K for the year ended December 31, 2024
2027 Notes	​	$500.0 million of 6.875% senior notes due April 2027
2027 Notes Tender Offer	​	$200.0 million partial redemption of the 2027 Notes, completed in August 2024
2028 Notes	​	$800.0 million of 6.25% senior notes due April 2028
2032 Notes	​	$700.0 million of 6.625% senior notes due September 2032, issued in August 2024
Amended and Restated Credit Agreement	​	Amended and Restated Credit Agreement, dated May 16, 2023, which amended and restated that Credit Agreement, dated as of March 30, 2017, and which governs the Credit Facility
AMNAX	​	Alerian Midstream Energy Index
AMZ	​	Alerian MLP Index
Archrock ELT	​	Archrock ELT LLC, an indirect, wholly owned subsidiary of Archrock
Archrock, our, we, us	​	Archrock, Inc., individually and together with its wholly owned subsidiaries
ARRC	​	Alternative Reference Rates Committee
ASU	​	Accounting Standards Update
ATM Agreement	​	Equity Distribution Agreement, dated February 23, 2021, entered into with Wells Fargo Securities, LLC and BofA Securities, Inc., as sales agents, relating to the at–the–market offer and sale of shares of our common stock from time to time
Bcf/d	​	Billion cubic feet per day
BoLM	​	U.S. Department of the Interior’s Bureau of Land Management
CAA	​	Clean Air Act
CERCLA	​	Comprehensive Environmental Response, Compensation, and Liability Act
CIS CSC	​	Center for Internal Security Critical Security Controls
CISSP	​	Certified Information Systems Security Professional
Code	​	Internal Revenue Code of 1986, as amended
CODM	​	Chief operating decision maker
Congress	​	The United States Congress is the legislature of the federal government of the United States, composed of a lower body, the House of Representatives, and an upper body, the Senate
COP	​	Conference of the Parties of the United Nations Framework Convention on Climate Change
Credit Facility	​	$1.1 billion asset-based revolving credit facility due May 2028, as governed by the Amended and Restated Credit Agreement
CWA	​	Clean Water Act
Debt Agreements	​	Credit Facility, 2027 Notes, 2028 Notes and 2032 Notes, collectively
DOE	​	Department of Energy
DSDP	​	Directors’ Stock and Deferral Plan
EBITDA	​	Earnings before interest, taxes, depreciation and amortization
ECOTEC	​	Ecotec International Holdings, LLC
EIA	​	U.S. Energy Information Administration
EIA Outlook	​	February 2025 EIA Short Term Outlook
EPA	​	U.S. Environmental Protection Agency
ERP	​	Enterprise Resource Planning
ESG	​	Environmental, Social and Governance
ESPP	​	Employee Stock Purchase Plan
Exchange Act	​	Securities Exchange Act of 1934, as amended
FASB	​	Financial Accounting Standards Board
Federal Funds Effective Rate	​	The target interest rate depository institutions charge each other for overnight loans of funds

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Financial Statements	​	Consolidated financial statements included in Part IV Item 15 of this Form 10–K
First Amendment to the Amended and Restated Credit Agreement	​	First Amendment to the Amended and Restated Credit Agreement, dated August 28, 2024, which amended the Amended and Restated Credit Agreement
GAAP	​	Accounting principles generally accepted in the U.S.
GHG	​	Greenhouse gases (carbon dioxide, methane and water vapor for example)
Hilcorp	​	Hilcorp Energy Company
Ionada	​	Ionada PLC
IRS	​	Internal Revenue Service
IT	​	Information Technology
July 2024 Equity Offering	​	Public underwriting offering whereby Archrock sold approximately 12.7 million shares of its common stock, completed in July 2024
LIBOR	​	London Interbank Offered Rate
LNG	​	Liquified natural gas
MMb/d	​	Million barrels per day
NAAQS	​	National Ambient Air Quality Standards
NOL	​	Net operating loss
NSPS	​	New Source Performance Standards
OOOOb and OOOOc	​	Subpart of the NSPS commonly referred to as the EPA’s methane rule for new and existing sources
OSHA	​	Occupational Safety and Health Act
OTC	​	Over–the–counter, as related to aftermarket services parts and components
Paris Agreement	​	Resulting agreement of the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change held in Paris, France
ppb	​	Parts per billion
Prime Rate	​	Rate of interest last quoted by The Wall Street Journal as the prime rate in the U.S.
RCRA	​	Resource Conservation and Recovery Act
ROU	​	Right–of–use, as related to operating leases
S&P 500	​	S&P 500 Composite Stock Price Index
SEC	​	U.S. Securities and Exchange Commission
SG&A	​	Selling, general and administrative
Share Repurchase Program	​	Share repurchase program approved by our Board of Directors on April 27, 2023 that allowed us to repurchase up to $50.0 million of outstanding common stock for a period of twelve months, which prior to its expiration was extended on April 25, 2024 for an additional 24-month period and a replenishment of the authorized share repurchase amount to $50.0 million
SOFR	​	Secured Overnight Financing Rate
Spin–off	​	Spin–off of our international contract operations, international aftermarket services and global fabrication businesses into a standalone public company operating as Exterran Corporation in November 2015. Exterran Corporation was subsequently acquired by Enerflex Ltd. in October 2022.
TOPS	​	Total Operations and Production Services, LLC, a portfolio company managed by certain affiliates of Apollo Global Management, Inc.
TOPS Acquisition	​	Transaction completed on August 30, 2024 (“acquisition date”) pursuant to that certain purchase and sale agreement, dated as of July 22, 2024, by and among Archrock, Archrock ELT, TOPS Pledge1, LLC, TOPS Pledge2, LLC and for limited purposes therein, TOPS Holdings, LLC, whereby Archrock acquired all of the issued and outstanding equity interests in TOPS
UNFCCC	​	United Nations Framework Convention on Climate Change
U.S.	​	United States of America
VOC	​	Volatile organic compounds
WACC	​	Weighted average cost of capital

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FORWARD–LOOKING STATEMENTS

This Form 10-K contains “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this Form 10-K are forward-looking statements within the meaning of the Exchange Act, including, without limitation, statements regarding our business growth strategy and projected costs; future financial position; the sufficiency of available cash flows to fund continuing operations and pay dividends; the expected amount of our capital expenditures; anticipated cost savings; future revenue, adjusted gross margin and other financial or operational measures related to our business; the future value of our equipment; and plans and objectives of our management for our future operations. You can identify many of these statements by 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 Form 10-K. 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 are described in Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10–K. These risk factors include, but are not limited to, risks related to macroeconomic conditions, including an increase in inflation and trade tensions; pandemics and other public health crises; ongoing international conflicts and tensions; risks related to our operations; competitive pressures; risks of acquisitions to reduce our ability to make distributions to our common stockholders; inability to make acquisitions on economically acceptable terms; risks related to our sustainability initiatives; uncertainty to pay dividends in the future; risks related to a substantial amount of debt and our debt agreements; inability to access the capital and credit markets or borrow on affordable terms to obtain additional capital; inability to fund purchases of additional compression equipment; vulnerability to interest rate increases; erosion of the financial condition of our customers; risks related to the loss of our most significant customers; uncertainty of the renewals for our contract operations service agreements; risks related to losing management or operational personnel; dependence on particular suppliers and vulnerability to product shortages and price increases; information technology and cybersecurity risks; tax-related risks; legal and regulatory risks, including climate-related and environmental, social and governance risks.

All forward-looking statements included in this Form 10-K are based on information available to us on the date of this Form 10-K. 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 Form 10-K.

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PART I

Item 1. Business

We were incorporated in February 2007 as a wholly owned subsidiary of Universal Compression Holdings, Inc. In August 2007, Universal Compression Holdings, Inc. and Hanover Compressor Company merged into our wholly owned subsidiaries and we became Exterran Holdings, Inc., the parent entity of Universal Compression Holdings, Inc. and Hanover Compressor Company. In November 2015, we completed the spin–off of our international contract operations, international aftermarket services and global fabrication business into a standalone public company operating as Exterran Corporation, and we were renamed “Archrock, Inc.”

We are an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping our customers produce, compress and transport natural gas in a safe and environmentally responsible way. We are a premier provider of natural gas compression services to customers in the energy industry throughout the U.S., and a leading supplier of aftermarket services to customers that own compression equipment in the U.S. Our business supports a must–run service that is essential to the production, processing, transportation and storage of natural gas. Our mission to help our customers deliver natural gas in an affordable and responsible manner, to a variety of critical industries is more critical now than ever.

We operate in two business segments:

•	Contract Operations – Our contract operations business is comprised of our owned fleet of natural gas compression equipment that we use to provide compression services to our customers.
•	Aftermarket Services – Our aftermarket services business provides a full range of services to support the compression needs of our customers that own compression equipment, including operations, maintenance, overhaul and reconfiguration services and sales of parts and components.
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Natural Gas Compression Industry Overview

Natural gas compression is a mechanical process whereby the pressure of a given volume of natural gas is increased to a desired higher pressure for transportation from one point to another. It is essential to the production and transportation of natural gas. Compression is also critical to minimizing flaring and reducing the waste of natural gas and natural gas liquids that results from insufficient gathering and processing capacity.

Compression is typically required throughout the natural gas production and transportation cycle, including at the wellhead, throughout gathering and distribution systems, into and out of processing and storage facilities and along intrastate and interstate pipelines. Our service offerings focus primarily on midstream applications, with 64% of our operating fleet being used in the gathering and processing cycle stages. The remaining 36% of our operating fleet is used in gas lift applications.

Wellhead and Gathering Systems. Natural gas compression is used to transport natural gas from the wellhead through the gathering system. At some point during the life of natural gas wells, reservoir pressures typically fall below the line pressure of the natural gas gathering or pipeline system used to transport the natural gas to market. At that point, natural gas no longer naturally flows into the pipeline. Compression equipment is applied in both field and gathering systems to boost the pressure levels of the natural gas flowing from the well, allowing it to be transported to market. Changes in pressure levels in natural gas fields require periodic changes to the size and/or type of on–site compression equipment. Compression equipment is also used to increase the efficiency of a low–capacity natural gas field by providing a central compression point from which the natural gas can be produced and injected into a pipeline for transmission to facilities for further processing.

Processing Applications. Compressors may be used in combination with natural gas production and processing equipment to process natural gas into other marketable energy sources. In addition, compression services are used for compression applications in refineries and petrochemical plants. Processing applications typically utilize multiple large horsepower compressors.

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Gas Lift Applications. Compression is used to reinject natural gas into producing oil wells to help lift liquids to the surface, which is known as natural gas lift. These applications utilize low– to mid–range horsepower compression equipment located at or near the wellhead or large horsepower compression equipment of over 1,000 horsepower for a centralized gas lift system servicing multiple wells.

Many oil and natural gas producers, transporters and processors outsource their compression services due to the benefits and flexibility of contract compression. Changing well and pipeline pressures and conditions over the life of a well often require producers to reconfigure or replace their compression packages to optimize the well production or gathering system efficiency.

We believe outsourcing compression operations to compression service providers such as us offers customers:

•	the ability to efficiently meet their changing compression needs over time while limiting the underutilization of their owned compression equipment;
•	access to the compression service provider’s specialized personnel and technical skills, including engineers and field service and maintenance employees, which we believe generally leads to improved production rates and/or increased throughput;
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•	the ability to increase their profitability by transporting or producing a higher volume of natural gas and crude oil through decreased compression downtime and reduced operating, maintenance and equipment costs by allowing the compression service provider to efficiently manage their compression needs; and
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•	the flexibility to deploy their capital on projects more directly related to their primary business by reducing their compression equipment and maintenance capital requirements.
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We believe the U.S. natural gas compression services industry continues to have growth potential over time due to, among other things, increased natural gas production in the U.S. from unconventional sources, the aging of producing natural gas fields that will require more compression to continue producing the same volume of natural gas due to lower pressures and the rise in gas-to-oil ratios for maturing wells and expected increased demand for natural gas in the U.S. for power generation, industrial uses and exports, including liquefied natural gas exports and exports of natural gas via pipeline to Mexico.

Contract Operations Overview

Compression Services

We provide comprehensive contract operations services including the personnel, equipment, tools, materials and supplies to meet our customers’ natural gas compression needs. Based on the operating specifications at the customer location and each customer’s unique needs, these services include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining the equipment. We work closely with our customers’ field service personnel so that compression services can be adjusted to efficiently match changing characteristics of the reservoir and the natural gas produced and may repackage or reconfigure our existing fleet to adapt to our customers’ compression needs.

During the years ended December 31, 2024, 2023 and 2022, we generated 85%, 82% and 80%, respectively, of our total revenue from contract operations.

Compression Fleet

The compressors that we own and use to provide contract operations services are predominantly large horsepower, which we define as greater than 1,000 horsepower per unit, and consist primarily of reciprocating compressors driven by natural gas–powered or electric motor drive engines. Our fleet is largely standardized around major components and key suppliers, which minimizes our fleet operating costs and maintenance capital requirements, reduces inventory costs, facilitates low–cost compressor resizing and improves technical proficiency in our maintenance and overhaul operations, which in turn allows us to achieve higher uptime while maintaining lower operating costs. 7

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All of our compressors are designed to automatically shut down if operating conditions deviate from a pre–determined range and substantially all are also equipped with telematic devices that enable us to remotely monitor the units. We maintain field service locations from which we service and overhaul our fleet. Our equipment undergoes routine and preventive maintenance in accordance with our established maintenance schedules, standards and procedures, which we update as technology changes and as our operations group develops new techniques and procedures to better service our equipment. In our experience, these maintenance practices maximize equipment life and unit availability, minimize emissions and avoidable downtime while reducing the overall maintenance expenditures over the equipment life. As of December 31, 2024, the average age of our operating fleet was 10 years.

The following table summarizes the size of our natural gas compression fleet as of December 31, 2024:

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​	​	Number	​	Horsepower	​	% of	​
​	​	of Units	​	(in thousands)	​	Horsepower	​
0 — 1,000 horsepower per unit		2,994		1,146		26	%
1,001 — 1,500 horsepower per unit		1,241		1,683		38	%
Over 1,500 horsepower per unit		729		1,572		36	%
Total		4,964		4,401		100	%

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General Terms of our Contract Operations Service Agreements

We typically enter into a master service agreement with each customer that sets forth the general terms and conditions of our services, and then enter into a separate supplemental service agreement for each distinct site at which we provide contract operations services. The following describes select material terms common to our standard contract operations service agreements.

Term and Termination. Our customers typically contract for our contract operations services on a site–by–site basis that is generally reduced if we fail to operate in accordance with the contract requirements. Following the initial minimum term, which generally ranges from 12 to 36 months, or up to 60 months for the largest horsepower units in our fleet, contract operations services generally continue on a month–to–month basis until terminated by either party with 30 days’ advance notice.

Fees and Expenses. Our customers pay a fixed monthly fee for our contract operations services, which generally is based on the amount of horsepower associated with a specific application. In certain circumstances, such as limited or disrupted natural gas flows, our customers may be provided a reduced monthly fee. We are typically responsible for the costs and expenses associated with our compression equipment except for fuel gas or electricity, which is provided by our customers.

Service Standards and Specifications. We provide contract operations services according to the particular specifications of each job, as set forth in the applicable contract. These are typically turn–key service contracts under which we supply all services and support and use our compression equipment to provide the contract operations services necessary for a particular application. In certain circumstances, if the availability of our services does not meet certain percentages specified in our contracts, our customers are generally entitled, upon request, to specified credits against our service fees.

Title and Risk of Loss. We own and retain title to or have an exclusive possessory interest in all compression equipment used to provide contract operations services and we generally bear risk of loss for such equipment to the extent the loss is not caused by gas conditions, our customers’ acts or omissions or the failure or collapse of the customer’s over–water job site upon which we provide the contract operations services. 8

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Insurance. Typically, both we and our customers are required to carry general liability, workers’ compensation, employer’s liability, automobile and excess liability insurance. Our insurance coverage includes property damage, general liability and commercial automobile liability and other coverage we believe is appropriate. Additionally, we are substantially self-insured for workers’ compensation and employee group health claims in view of the relatively high per-incident deductibles we absorb under our insurance arrangements for these risks. We are also self-insured for property damage to our offshore assets.

Aftermarket Services Overview

Our aftermarket services business sells parts and components and provides operations, major and routine maintenance, overhaul and reconfiguration services to customers who own compression equipment. We believe that we are particularly well–qualified to provide these services because our highly experienced operating personnel have access to the full range of our compression services and facilities. In addition, our aftermarket services business provides opportunities to cross–sell our contract operations services. During the years ended December 31, 2024, 2023 and 2022, we generated 15%, 18% and 20%, respectively, of our total revenue from aftermarket services.

Competitive Strengths

We believe we have the following key competitive strengths:

Superior safety performance. We believe our collective safety performance is pivotal to the success of our business and is of primary importance to our customers. We have a strong safety culture and a proven ability to safely manage our business in a variety of commodity and economic environments. Our safety–centric culture has consistently produced industry–leading safety performance for many years, including a 2024 total recordable incident rate of 0.17.

Large horsepower. As of December 31, 2024, we have the largest fleet of large horsepower equipment among all outsourced compression service providers in the U.S. In addition, 74% of our fleet, as measured by operating horsepower, was comprised of units that exceed 1,000 horsepower per unit. We believe the trends driving demand for large horsepower units will continue. These trends include (i) high levels of associated gas production from shale wells, which are generally produced at a lower initial pressure than dry gas wells, (ii) pad drilling, which brings multiple wells to a single well site with larger volumes of gas, (iii) increasing well lateral lengths, which increase natural gas flow through gas gathering systems, and (iv) high probability drilling programs that allow for efficient infrastructure planning.

Excellent customer service. We operate in a relationship–driven, service–intensive industry and therefore need to provide superior customer service. We believe that our regionally–based network, local presence, experience and in–depth knowledge of our customers’ operating needs and growth plans enable us to respond to our customers’ needs and meet their evolving demands on a timely basis. In addition, we focus on achieving a high level of reliability for the services we provide in order to maximize uptime and our customers’ production levels. Our sales efforts concentrate on demonstrating our commitment to enhancing our customers’ cash flows through superior customer service and after–market support.

Large and stable customer base. We have strong relationships with a deep base of midstream companies and natural gas and crude oil producers. Our contract operations revenue base is sourced from approximately 280 customers operating throughout all major U.S. natural gas and crude oil producing regions.

Fee–based cash flows. We charge a fixed monthly fee for our contract operations services and a reduced monthly fee during periods of limited or disrupted natural gas flows. Our compression packages, on average, operate at a customer location for approximately four years. We believe this fee structure and the longevity of our operations reduces volatility and enhances the stability and predictability of our cash flows.

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Diversified geographic footprint. We operate in substantially all major natural gas and crude oil producing regions in the U.S. We have a meaningful presence in associated gas plays, including the Permian and Eagle Ford shales, which, combined, account for approximately three-fourths of our operating horsepower. Increased size and geographic density offer compression services providers operating and cost advantages. As the number of compression locations and size of the compression fleet increases, the number of required sales, administrative and maintenance personnel increases at a lesser rate, resulting in operational efficiencies and potential cost advantages. Additionally, broad geographic scope allows compression service providers to more efficiently provide services to all customers, particularly those with compression applications in remote locations. Our large fleet and numerous operating locations throughout the U.S., combined with our ability to efficiently move equipment among producing regions, mean that we are not dependent on production activity in any particular region. We believe our size, geographic scope and broad customer base give us more flexibility in meeting our customers’ needs than many of our competitors and provide us with improved operating expertise and business development opportunities.

Long operating history. We have a long, sustained history of operating in the compression industry and a robust database of fleet financial and operating metrics that provides an advantage compared to our younger competitors. We have extensive experience working with our customers to meet their evolving needs.

Financial resilience and flexibility. We have historically shown and are committed to maintaining capital discipline and financial strength, which is critical in a cyclical industry and business such as ours. Maintaining ample liquidity and a prudent balance sheet supports our ability to continue to deliver on our long–term strategies and positions us to take advantage of future growth opportunities as they arise.

Technology Deployment. We are focused on harnessing technology across all aspects of our business to drive operational efficiencies and enhance our value proposition to our customers. This includes the automation of workflows, integration of digital and mobile tools for our field service technicians, expanded remote monitoring capabilities of our compression fleet and emissions solutions. We believe these efforts, among other things, will help us achieve increased asset uptime, improve the efficiency of our field service technicians, improve our supply chain and inventory management and reduce our emissions and carbon footprint, thereby improving our profitability as discussed further below in “Business Strategies.”

Business Strategies

We intend to continue to capitalize on our competitive strengths to meet our customers’ needs through the following key strategies:

Capitalize on the long–term fundamentals for the U.S. natural gas compression industry. We believe our ability to efficiently meet our customers’ evolving compression needs, our long–standing customer relationships and our large compression fleet will enable us to capitalize on what we believe are favorable long–term fundamentals for the U.S. natural gas compression industry. These fundamentals include significant natural gas resources in the U.S., increased unconventional oil and natural gas production, decreasing natural reservoir pressures, rising gas-to-oil ratios for maturing wells and expected increased natural gas demand in the U.S. from the growth of liquefied natural gas exports, exports of natural gas via pipeline to Mexico, power generation and industrial uses.

Improve profitability. We are focused on increasing productivity and optimizing our processes. Between 2019 and 2021, we invested in a process and technology transformation project that replaced our existing ERP, supply chain and inventory management systems and expanded the remote monitoring capabilities of our compression fleet. Beginning in 2023, our focus shifted to fully harnessing these technologies across our business. We expect the technological transformations to lower our internal costs and improve our profitability over time. Implementing telematics and advanced data analysis across our fleet has enabled us to respond more quickly and optimally to downtime events, minimize prolonged troubleshooting, prevent unnecessary unit touches and stops, which are the primary cause of wear and tear of the equipment, and, ultimately, predict failures before they occur. We expect this will increase the number of units a field service technician can oversee and reduce vehicle miles traveled and fuel consumption, thereby also reducing emissions.

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In addition, our primary focus is on large horsepower equipment as we aim to continue to capitalize on the trends that have been driving, and that we believe will continue to drive the demand for these units. As part of this strategy, we sold approximately 175,000 and 199,000 of horsepower units during the years ended December 31, 2024 and 2023, respectively.  Of the units sold during the years ended December 31, 2024 and 2023, approximately 75% and 80%, respectively, were small horsepower units.

Optimize our business to generate attractive returns. We plan to continue to invest in strategically growing our business both organically and through third–party acquisitions. We see opportunities to grow our contract operations business over the long term by putting idle units back to work and profitably adding new horsepower in key growth areas. In addition, because a large amount of compression equipment is owned by natural gas and crude oil producers, processors, gatherers, transporters and storage providers, we believe there will be additional opportunities for our aftermarket services business to provide services and parts to support the operation of this equipment.

Oil and Natural Gas Industry Cyclicality and Volatility

Demand for our products and services is correlated to natural gas and crude oil production. Fluctuations in energy prices can affect the levels of expenditures by our customers, production volumes and ultimately, demand for our products and services, however, we believe our contract operations business is typically less impacted by commodity prices for the following reasons:

•	fee–based contracts minimize our direct commodity price exposure;
•	the natural gas we use as fuel for our compression packages is supplied by our customers, further reducing our direct exposure to commodity price risk;
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•	compression services are a necessary part of midstream energy infrastructure that facilitate the transportation of natural gas through gathering systems;
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•	our contract operations business is tied primarily to oil and natural gas production, transportation and consumption, which are generally less cyclical in nature than exploration and new well drilling and completion activities;
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•	the need for compression services and equipment has grown over time due to the increased production of natural gas, the natural pressure decline of natural gas–producing basins and the increased percentage of natural gas production from unconventional sources; and
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•	our compression packages operate at a customer location for an average of approximately four years, during which time our customers are generally required to pay a fixed monthly fee for our contract operations services or a reduced monthly fee during periods of limited or disrupted natural gas flows.
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Seasonal Fluctuations

Our results of operations have not historically reflected any material seasonal tendencies and we do not believe that seasonal fluctuations will have a material impact on us in the foreseeable future.

Sales and Marketing

Our marketing and client service functions are coordinated and performed by our sales and field service personnel. Salespeople, application engineers and field service personnel qualify, analyze and scope new compression applications as well as regularly visit our customers to ensure customer satisfaction, determine customer needs as to services currently being provided and ascertain potential future compression services requirements. This ongoing communication allows us to respond swiftly to customer requests. 11

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Customers

Our customer base consists primarily of companies engaged in all aspects of the oil and natural gas industry, including large integrated and independent oil and natural gas processors, gatherers and transporters. We have entered into preferred vendor arrangements with some of our customers that give us preferential consideration for their compression needs. In exchange, we provide these customers with enhanced product availability, product support and favorable pricing. During the years ended December 31, 2024, 2023 and 2022, our five most significant customers collectively accounted for 35%, 33% and 32%, respectively, of our contract operations and aftermarket services revenue. During the year ended December 31, 2024, one customer accounted for $121.4 million, or more than 10% of our consolidated revenue, and another customer accounted for more than 13% of our consolidated trade accounts receivable, both primarily related to our contract operations segment.

Suppliers

We have pricing agreements in place with all of our primary suppliers of compression equipment, parts and services, and work closely with these key suppliers on value engineering, to lower total lifecycle cost and improve equipment reliability. Though we rely on these suppliers to a significant degree, we believe alternative sources for compression equipment, parts and services are generally available.

Competition

The natural gas compression services business is highly competitive with low barriers to entry. Overall, we experience considerable competition from companies that may be able to more quickly adapt to changing technology within our industry and changes in economic conditions as a whole, more readily take advantage of acquisitions and other opportunities and adopt more aggressive pricing policies. We believe we are competitive with respect to price, equipment availability, customer service, flexibility in meeting customer needs, technical expertise and quality and reliability of our compression packages and related services. See “Competitive Strengths” above for further discussion.

Governmental Regulation

Environmental Regulation

Our operations are subject to stringent and complex U.S. federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to protection of the environment and to occupational safety and health. Compliance with these environmental laws and regulations may expose us to significant costs and liabilities and cause us to incur significant capital expenditures in our operations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, imposition of investigatory and remedial obligations and the issuance of injunctions delaying or prohibiting operations. We believe that our operations are in substantial compliance with applicable environmental, health and safety laws and regulations and that continued compliance with currently applicable requirements would not have a material adverse effect on us. However, the trend in environmental regulation has been to place more restrictions on activities that may affect the environment, and thus, any changes in these laws and regulations that result in more stringent and costly waste handling, storage, transport, disposal, emission or remediation requirements could have a material adverse effect on our results of operations and financial position. 12

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The primary U.S. federal environmental laws to which our operations are subject include the CAA and regulations thereunder, which regulate air emissions; the CWA and regulations thereunder, which regulate the discharge of pollutants in industrial wastewater and storm water runoff; the RCRA and regulations thereunder, which regulate the management and disposal of hazardous and non–hazardous solid wastes; and the CERCLA and regulations thereunder, known more commonly as “Superfund,” which impose liability for the remediation of releases of hazardous substances in the environment. We are also subject to regulation under the OSHA and regulations thereunder, which regulate the protection of the safety and health of workers. Analogous state and local laws and regulations may also apply. We also acknowledge the potential for policy shifts that could impact our operations. On January 20, 2025, the current administration issued a series of executive orders and memoranda signaling a shift in environmental and energy policy in the U.S., including the revocation of approximately 80 former administration-era executive orders related to public health, the environment, climate change and climate-related financial risks. The current administration also declared a “national energy emergency,” directing agencies to expedite conventional energy projects. While the extent of the current administration’s changes to the environmental regulatory landscape in the U.S. is unknown at this time, it is possible that additional changes in the future could impact our results of operation and those of our customers.

Air Emissions

The CAA and analogous state laws and their implementing regulations regulate emissions of air pollutants from various sources, including natural gas compressors, and also impose various monitoring and reporting requirements. Such laws and regulations may require a facility to obtain pre–approval for the construction or modification of certain projects or facilities expected to produce air emissions or result in the increase of existing air emissions, obtain and strictly comply with air permits containing various emissions and operational limitations, or utilize specific emission control technologies to limit emissions. Our standard contract operations agreement typically provides that the customer will assume permitting responsibilities and certain environmental risks related to site operations.

New Source Performance Standards. In June 2016, the EPA issued final regulations under the CAA amending the NSPS for the oil and natural gas source category and applying to sources of emissions of methane and VOC from certain processes, activities and equipment that is constructed, modified or reconstructed after September 18, 2015. Specifically, the regulation imposed both methane and VOC standards for several emission sources not previously covered by the NSPS, such as fugitive emissions from compressor stations and pneumatic pumps and methane standards for certain emission sources that are already regulated for VOC, such as equipment leaks at natural gas processing plants. The amendments also established methane standards for a subset of equipment that the NSPS regulates, including reciprocating compressors and pneumatic controllers, and extend the VOC standards to the remaining unregulated equipment.

On March 8, 2024, the EPA published even more stringent rules with respect to methane and VOC for new and existing sources, via NSPS Subparts OOOOb and OOOOc, with the OOOOb rules for sources constructed, modified, or reconstructed after December 6, 2022, which became effective on May 7, 2024. The OOOOc rules for existing sources gives the States a two-year deadline to develop and submit to EPA plans for addressing emissions from those sources.

On April 10, 2024, BoLM published a separate final rule, known as the “Waste Prevention, Production Subject to Royalties, and Resource Conservation” rule, to address methane emissions from oil and gas activities on public lands, which became effective on June 10, 2024. The rule is currently stayed pending litigation in North Dakota, Texas, Montana, Wyoming, and Utah. Among the newly adopted methane requirements that may impact our operations are broader applicability to compression equipment relative to the existing rules, increased work practices and inspection requirements and mandates for certain new zero–emissions equipment.

Both the EPA rules and the BoLM rules are subject to ongoing judicial challenges.

Meanwhile, several states — including, most notably, New Mexico and Colorado — have continued to develop their own more stringent methane rules that will or are anticipated to impose additional requirements on the industry. For example, Colorado’s Air Quality Control Commission adopted the “Midstream Rule” on December 20, 2024, to address GHG emissions from midstream oil and gas operations, including from natural gas compressor stations. Under the Midstream Rule, midstream facilities must begin taking steps to reduce GHG emissions from combustion fuel equipment by February 14, 2025. 13

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We do not believe that these rules will have a material adverse impact on our business, financial condition, results of operations or cash flows, but we cannot yet definitively predict the impact of any revision of the current rules or issuance of new rules, which impact could be material.

National Ambient Air Quality Standards. On October 1, 2015, the EPA issued a new NAAQS ozone standard of 70 ppb, which is a tightening from the 75-ppb standard set in 2008. This new standard became effective on December 28, 2015, and the EPA completed designating attainment/non–attainment regions under the revised ozone standard in 2018. In November 2016, the EPA proposed an implementation rule for the 2015 NAAQS ozone standard, but the agency has yet to issue a final implementation rule. State implementation of the revised NAAQS could result in stricter permitting requirements, delay or prohibit our customers’ ability to obtain such permits and result in increased expenditures for pollution control equipment, the costs of which could be significant. By law, the EPA must review each NAAQS every five years. In December 2018 and again in December 2020, the EPA announced that it was retaining without revision the 2015 NAAQS ozone standard. In June 2021, the EPA commenced a process for reconsidering the December 2020 decision. In August 2023, the EPA announced a new review of the ozone NAAQS and most recently released reports on December 23, 2024, related to its review. We do not believe continued implementation of the NAAQS ozone standard will have a material adverse impact on our business, financial condition, results of operations or cash flows, but we cannot yet predict the impact, if any, of any new Federal Implementation Plan involving new NAAQS standards.

General. New environmental regulations and proposals similar to these, when finalized, and any other new regulations requiring the installation of more sophisticated pollution control equipment or the adoption of other environmental protection measures, could have a material adverse impact on our business, financial condition, results of operations and cash flows. Notably, opposition to energy development and infrastructure projects has led to regulatory and judicial challenges to new facilities, including compression facilities, in many states. While we have not directly faced any such challenges to the facilities at which we provide contract operations and know of no pending or threatened efforts targeting those facilities, expanded opposition to energy infrastructure, including facilities at which we provide contract operations or in the future might otherwise have an opportunity to provide contract operations, could potentially give rise to material impacts in the future.

Climate Change

Climate change legislation and regulatory initiatives may arise from a variety of sources, including international, national, regional and state levels of government and associated administrative bodies, seeking to restrict or regulate emissions of GHGs such as carbon dioxide and methane.

Congress and various federal and state legislative and regulatory bodies have previously considered legislation to restrict or regulate emissions of GHG. Energy legislation and other initiatives continue to be proposed that may be relevant to GHG emissions issues. For example, the SEC adopted rules in March 2024 that would, if the rules survive legal challenge, mandate extensive disclosure for certain public companies of climate-related data, risks and opportunities, including financial impacts, physical and transition risks, related governance and strategy, and greenhouse gas emissions. Almost half of the states, either individually or through multi–state regional initiatives, have begun to address GHG emissions, primarily through the planned development of emission inventories or regional GHG cap and trade programs. Various states, such as California, Colorado and New York have passed or proposed similar climate change disclosure laws. Although most of the state–level initiatives have to date been focused on large sources of GHG emissions, such as electric power plants, it is possible that smaller sources such as our natural gas–powered compressors could become subject to GHG–related regulation. Depending on the particular program, we could be required to control emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. Our customers or other business partners may require us to provide additional climate-related information if they are also subject to these or additional climate-related disclosure laws or regulations. These actions could result in increased (i) costs to operate and maintain our facilities, (ii) capital expenditures to install new emission controls on our facilities, and (iii) costs to administer and manage any potential GHG emissions regulations or carbon trading or tax programs. Such climate-related disclosure requirements could result in increased compliance costs, and possible litigation and reputational risks if such disclosures are incomplete, inaccurate, misleading or do not otherwise meet the expectations of our stakeholders. Moreover, such requirements may not always be uniform across jurisdictions, which may result in increased complexity and cost for compliance. In addition, we may take voluntary steps to mitigate any impact our operations might have on climate change. 14

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As a result, we may experience increases in energy, transportation and raw material costs, capital expenditures or insurance premiums; however, there is no guarantee that such efforts will have the desired effects.

The $1 trillion legislative infrastructure package passed by Congress in November 2021 includes a number of climate-focused spending initiatives targeted at climate resilience, enhanced response and preparation for extreme weather events, and clean energy and transportation investments. Significant additional legislative action by Congress also occurred in August 2022 with the Inflation Reduction Act, signed into law by the former administration, which provides $391 billion in funding for research and development and incentives for low-carbon energy production methods, carbon capture, and other programs directed at encouraging de-carbonization and addressing climate change. The IRA also amends the Clean Air Act to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems. This program requires the EPA to impose a “waste emissions charge” on certain natural gas and oil sources that are already required to report under EPA’s GHG Reporting Program. In November 2024, the EPA released its final rule to implement the methane emissions fee with an effective date in January 2025, which is expected to apply to reporting year 2024 emissions. Twenty-three states have filed a lawsuit challenging the rule, and the change in U.S. presidential administration provides additional uncertainty as to the rule’s future. While the current administration has issued an executive order pausing the disbursement of funds appropriated through the IRA and roll back these environmental policies implemented during the former administration, U.S. climate leaders have vowed to continue protecting and building on climate progress. Such legislation, regulations, and initiatives, as well as uncertainty regarding the future success of such regulations and initiatives in reducing demand for oil and gas, could indirectly affect our business and our results of operations by reducing demand for our services.

Separately, the EPA has promulgated regulations controlling GHG emissions under its existing CAA authority. The EPA has adopted rules requiring many facilities, including petroleum and natural gas systems, to inventory and report their GHG emissions. In 2024, we did not operate any facilities that were subject to these reporting obligations. In addition, the EPA rules provide air permitting requirements for certain large sources of GHG emissions. The requirement for large sources of GHG emissions to obtain and comply with permits will affect some of our and our customers’ largest new or modified facilities going forward but is not expected to cause us to incur material costs. As noted above, the EPA has undertaken efforts to regulate emissions of methane, considered a GHG, in the oil and gas sector, and could develop additional, more stringent rules in the future.

In an executive order issued on January 20, 2021, the former administration asked the heads of all executive departments and agencies to review and take action to address any federal regulations, orders, guidance documents, policies and any similar agency actions promulgated during the prior administration that may be inconsistent with or present obstacles to the administration’s stated goals of protecting public health and the environment, and conserving national monuments and refuges. The executive order also established an Interagency Working Group on the Social Cost of Greenhouse Gases, which is called on to, among other things, capture the full costs of GHG emissions, including the “social cost of carbon,” “social cost of nitrous oxide” and “social cost of methane,” which are “the monetized damages associated with incremental increases in greenhouse gas emissions,” including “changes in net agricultural productivity, human health, property damage from increased flood risk, and the value of ecosystem services.” The former administration adopted an interim social cost of carbon of $51 per ton in February 2021, but in recent reports the EPA has referenced a figure as high as $2,400 per ton of methane effective in 2030. The EPA published a final report in December 2023 with the social cost of carbon at $190 per metric ton of carbon dioxide emitted in 2020 at a 2% discount rate. This figure is intended to be used to guide federal decisions on the costs and benefits of various policies and approvals; such efforts have been the subject of a series of judicial challenges, which have been largely unsuccessful to date. With the re-election of the current administration, however, these climate-focused initiatives have and will likely face major headwinds, and regulations will likely be scaled back (during his first term, more than 125 U.S. environmental rules and policies were rolled back). Already, the current administration has released a series of executive orders impacting the energy sector. Ranging from declaring a national emergency due to the U.S.’s inadequate energy supply, infrastructure, and prices, to halting wind energy leasing and promoting fossil fuel exploration.  These executive orders are already reshaping the current direction of the U.S. climate agenda. At this time, we cannot determine how the current administration will continue to proceed and cannot accurately predict the ensuing impact on social cost or other interagency climate efforts, which may give rise to a material adverse effect on our business, financial condition, results of operations and cash flows. 15

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At the international level, the U.S. joined the international community at the 21st COP of the UNFCCC in Paris, France, which resulted in the “Paris Agreement,” which intended for signatory countries to nationally determine their contributions and set GHG emission reduction goals every five years beginning in 2020. While the Paris Agreement did not impose direct requirements on emitters, national plans to meet its pledge resulted in new regulatory requirements. After withdrawing from the Paris Agreement in November 2020, the U.S. re-entered the Paris Agreement in April 2021 along with a new “nationally determined contribution” that the U.S. would achieve GHG emissions reductions of at least 50% relative to 2005 levels by 2030. In November 2021, at COP26 in Glasgow, the U.S. and European Union jointly announced the launch of the “Global Methane Pledge,” by which signatory countries aim to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector. The December 2023 COP28 meeting in Dubai reaffirmed commitments to the Paris Agreement and concluded that the world should move away from fossil fuel energy in a just, orderly, and equitable manner and aim to achieve net zero GHG emissions by 2050, while recognizing a transitional role for fossil fuels. In November 2024, at COP29 in Azerbaijan, countries agreed on the final building blocks that set out how carbon markets will operate under the Paris Agreement, among other outcomes that further indicate the global push to mitigate climate change. Given that the current administration has issued an executive order that initiated the process to withdraw the U.S. from the Paris Agreement and from any commitments made under the UNFCCC, however, it remains to be seen which of these aforementioned U.S. commitments will survive in 2025 and beyond. Just as we cannot fully anticipate the impact of the methane rules discussed above, we also cannot predict whether potential future re-entry into, or pending withdrawal from, the Paris Agreement or other international pledges will result in any particular new federal regulatory requirements or whether such requirements will cause us to incur material costs. Nevertheless, several states and geographic regions in the U.S. have adopted legislation and regulations to reduce emissions of GHGs, including cap and trade regimes and commitments to contribute to meeting the goals of the Paris Agreement.

Increasingly, parties have sought to bring suit against various natural gas and oil companies alleging that the companies have been aware of the adverse effects of climate change but defrauded their investors or customers by failing to adequately disclose those impacts. Any such litigation targeting our customers could negatively impact their operation and, in turn, decrease demand for our operations, which could have an adverse impact on our financial condition.

In sum, any legislation, regulatory programs or social pressures related to climate change could increase our costs and require substantial capital, compliance, operating and maintenance costs, reduce demand for our services and reduce our access to financial markets. Current, as well as potential future, laws and regulations that limit GHG emissions or that otherwise promote the use of renewable energy over fossil fuel energy sources could increase the cost of our services and, thereby, further reduce demand and adversely affect our sales volumes, revenues and margins.

Water Discharges

The CWA and analogous state laws and their implementing regulations impose restrictions and strict controls with respect to the discharge of pollutants into state waters or waters of the U.S. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. In addition, the CWA regulates storm water discharges associated with industrial activities depending on a facility’s primary standard industrial classification. Four of our facilities have applied for and obtained industrial wastewater discharge permits and/or have sought coverage under local wastewater ordinances. U.S. federal laws also require development and implementation of spill prevention, controls and countermeasure plans where petroleum storage quantities exceed certain thresholds, including appropriate containment berms and similar structures to help prevent the contamination of navigable waters in the event of a petroleum hydrocarbon tank spill, rupture or leak at such facilities. The definition of “waters of the U.S.” and, relatedly, the scope of CWA jurisdiction, have been the subject of notable rulemaking efforts and judicial challenges over several decades. In May 2023, the U.S. Supreme Court announced a decision that sharply narrowed that definition to relatively permanent bodies of water connected to traditional navigable waters and wetlands with a continuous surface connection to other jurisdictional waters, thereby invalidating protections for many other historically regulated wetlands and waters. The EPA and the Army Corps of Engineers issued a final rule effective September 8, 2023 to implement the terms of that decision. As a result of prior litigation, that amended rule has gone into effect in only part of the country, and new legislation with respect to the amended rule is ongoing. 16

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Waste Management and Disposal

RCRA and analogous state laws and their implementing regulations govern the generation, transportation, treatment, storage and disposal of hazardous and non–hazardous solid wastes. During the course of our operations, we generate wastes (including, but not limited to, used oil, antifreeze, used oil filters, sludges, paints, solvents and abrasive blasting materials) in quantities regulated under RCRA. The EPA and various state agencies have limited the approved methods of disposal for these types of wastes. CERCLA and analogous state laws and their implementing regulations impose strict, and under certain conditions, joint and several liability without regard to fault or the legality of the original conduct on classes of persons who are considered to be responsible for the release of a hazardous substance into the environment. These persons include current and past owners and operators of the facility or disposal site where the release occurred and any company that transported, disposed of, or arranged for the transport or disposal of the hazardous substances released at the site. Under CERCLA, such persons may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. In addition, where contamination may be present, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury, property damage and recovery of response costs allegedly caused by hazardous substances or other pollutants released into the environment. Additionally, emerging contaminants, like per- and polyfluoroalkyl substances such as perfluorooctanoic acid and perfluorooctanesulfonic acid compounds, have become subject to CERCLA regulation in addition to existing federal and state chemicals regulation, and polyfluoroalkyl substances have recently been regulated under the Toxic Substances Control Act. Other emerging contaminants could also become subject to regulation under CERCLA, Toxic Substances Control Act or comparable state laws. We cannot provide any assurance that the costs and liabilities associated with the future imposition of such remedial or regulatory compliance obligations upon us would not have a material adverse effect on our operations or financial position.

We currently own or lease, and in the past have owned or leased, a number of properties that have been used in support of our operations for a number of years. Although we have utilized operating and disposal practices that were standard in the industry at the time, hydrocarbons, hazardous substances, or other regulated wastes may have been disposed of or released on or under the properties owned or leased by us or on or under other locations where such materials have been taken for disposal by companies subcontracted by us. In addition, many of these properties have been previously owned or operated by third parties whose treatment and disposal or release of hydrocarbons, hazardous substances or other regulated wastes was not under our control. These properties and the materials released or disposed thereon may be subject to CERCLA, RCRA and analogous state laws. Under such laws, we could be required to remove or remediate historical property contamination, or to perform certain operations to prevent future contamination. At certain of such sites, we are currently working with the prior owners who have undertaken to monitor and clean up contamination that occurred prior to our acquisition of these sites. We are not currently under any order requiring that we undertake or pay for any cleanup activities. However, we cannot provide any assurance that we will not receive any such order in the future.

Occupational Safety and Health

We are subject to the requirements of the OSHA and comparable state statutes. These laws and the implementing regulations strictly govern the protection of the safety and health of employees. The OSHA’s hazard communication standard, the EPA’s community right–to–know regulations under Title III of CERCLA and similar state statutes require that we organize and/or disclose information about hazardous materials used or produced in our operations.

Human Capital

As of December 31, 2024, we employed approximately 1,300 employees in 13 states and conducted business in 42 states. None of our employees are subject to a collective bargaining agreement. 17

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We consider our employees to be our greatest asset and believe that our success depends on our ability to attract, develop and retain our employees. While we operate on a merit-based approach, we support diversity and inclusion in hiring, as is reflected in the diversity of our Board of Directors, of which three of our independent directors are female or identify as a member of an underrepresented racial/ethnic group. Similarly, one–third of our executive leadership team is female and 28% of our total workforce is ethnically diverse.

We support pay equity and believe we offer competitive and comprehensive compensation benefits packages that include bonuses, an employee stock purchase plan, a 401(k) plan with employer contribution, healthcare and insurance benefits, health savings and flexible spending accounts with employer contribution, paid time off (including 16 hours per year as paid time to volunteer), family leave, an employee assistance program and tuition assistance, among many others.

We believe in the ultimate goal of serving as the best corporate citizen possible and are dedicated to inspiring and empowering our employees to operate continuously according to our core values of safety, service, integrity, respect and pride. To that end, the Governance and Sustainability Committee of our Board of Directors provides oversight of our policies, practices and programs regarding the fair and equitable promotion of employees within our company and the health and safety of our employees and communities.

Learning and Talent Development

We invest significant resources to develop the talent needed to provide our industry–leading natural gas compression services. We work closely with suppliers to develop training programs for our field service technicians. Our field service technicians are supported by a dedicated training team and collectively completed over 41,000 hours of operational and technical training during 2024. Generally, new hire field employees enter a program whereby they are assigned an experienced mentor, for an average of six months, under whose direct supervision they apply their classroom learning in the real world setting.

In addition, we offer a number of non–technical, targeted skills–based and career–enhancing training programs, including technical orientation for non–technical employees, supervisor coaching, performance management and conflict resolution. Our talent development programs provide employees with the resources they need to help achieve their career goals, build management skills and lead their organizations.

Safety, Health and Wellness

The success of our business is fundamentally connected to the well–being of our people and so we are committed to the safety, health and wellness of our employees.

Safety is a core value of our company, and safety performance is a key measure of success that has been included in our short–term incentive program for over 18 years. We actively promote the highest standards of safety behavior and environmental awareness and strive to meet or exceed all applicable local and national regulations. “Stop the Job” is an adopted edict that establishes the obligation of and provides the authority to all employees to stop any task or operation where they perceive that a risk to people, the environment or assets is not properly controlled. We believe that all incidents are preventable and that through proper training, planning and hazard recognition, we can achieve a workplace with zero incidents. To this end, we created the TARGET ZERO program that includes over 90 safety and environmental procedures, and their necessary tools, equipment and training, which are designed to foster a mindset that integrates safety into every work process. Through this program, we achieved excellent safety performance, with a total recordable incident rate of 0.17 in 2024. While no incidents are acceptable, the incidents we experienced were extremely minor in nature and resulted in no lost time. It will be our continuous goal that we achieve a rate of zero in all future periods.

We also provide our employees and their families with access to a variety of flexible and convenient health and wellness programs that support the maintenance or improvement of our employees’ physical and mental health and encourage engagement in healthy behaviors, including our employee–led RockFIT program that develops and sponsors corporate health and fitness challenges throughout the year. 18

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Building Employee and Community Connections

We consider ourselves a member of every community in which we operate and believe that building connections between our employees, their families and our communities creates a more meaningful and enjoyable workplace. Our employees give generously and are passionate towards many causes, for which they receive 16 hours per year of paid time off to volunteer. Our employee–led Archrock Cares program brings together employees across functions and backgrounds to break down traditional corporate barriers and form strong bonds through the pursuit of shared interests and volunteering and giving opportunities across the country.

Available Information

Our annual reports on Form 10–K, quarterly reports on Form 10–Q, current reports on Form 8–K and any amendments to those reports are available free of charge on our website, www.archrock.com, as soon as reasonably practicable after they are filed electronically with the SEC. Information on our website is not incorporated by reference in this Form 10–K or any of our other securities filings. Paper copies of our filings are also available, without charge, from Archrock, Inc., 9807 Katy Freeway, Suite 100, Houston, Texas 77024, Attention: Investor Relations. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding issuers who file electronically with the SEC. The SEC’s website address is www.sec.gov.

Additionally, we make available free of charge on our website:

•	our Code of Business Conduct;
•	our Corporate Governance Principles; and
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•	the charters of our audit, compensation and nominating and corporate governance committees.
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Item 1A. Risk Factors

As described in “Forward–Looking Statements,” this Form 10–K contains forward–looking statements regarding us, our business and our industry. The risk factors described below, among others, could cause our actual results to differ materially from the expectations reflected in the forward–looking statements. If any of the following risks actually occur, our business, financial condition, results of operations and cash flows could be negatively impacted.

Industry and General Economic Risks

Macroeconomic conditions, including an increase in inflation and trade tensions, could have adverse effects on our results of operations.

Uncertainty on future inflation trends and fluctuations on interest rates have created further uncertainty for the economy and for our customers. Elevated inflation will increase our labor costs and the costs of parts, lube oil and other materials used in our operations. An increase in inflation rates could negatively affect our profitability and cash flows, due to higher wages, higher operating costs, higher financing costs, and/or higher supplier prices. We may be unable to pass along such higher costs to our customers. In addition, inflation may adversely affect customers’ financing costs, cash flows, and profitability, which could adversely impact their operations and our ability to collect receivables.

Additionally, trade tensions or restrictions on free trade, including the tariffs that have been proposed by the current administration, could exacerbate these effects. Any widespread imposition of new or increased tariffs could increase the cost of imported materials and products, such as steel, which accordingly could increase costs of our products, disrupt our supply chain, cause adverse financial impacts due to volatility in foreign exchange rates and interest rates, increase inflationary pressures on raw materials and energy, and negatively impact our profit margins. New or increased tariffs could also negatively affect U.S. national or regional economies, which could affect the demand for our products. 19

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Pandemics and other public health crises may negatively affect demand for our services, and may have a material adverse impact on our financial condition, results of operations and cash flows.

Pandemics or other public health crises could significantly impact public health, economic growth, supply chains and markets. The extent to which our operating and financial results may be affected by future pandemics or other public health crises will depend on various factors and consequences beyond our control, such as the duration and scope of such pandemic or public health crisis, additional actions by businesses and governments in response to the pandemic and the speed and effectiveness of responses to combat any such pandemic or public health crisis. Any future pandemic or public health crisis may materially adversely affect our operating and financial results in a manner that is not currently known to us or that we do not currently consider to present significant risks to our operations.

Ongoing International Conflicts and Tensions

The conflict in Ukraine, the Israel-Hamas war and related price volatility and geopolitical instability could negatively impact our business.

In late February 2022, Russia launched significant military action against Ukraine, and in October 2023, Israel launched a military response against Hamas in Gaza. These ongoing conflicts have caused, and could intensify, volatility in oil and natural gas prices, and the extent and duration of these military actions, sanctions and resulting market disruptions could be significant and could potentially have a substantial negative impact on the global economy and/or our business for an unknown period of time. Any such volatility and disruptions may also magnify the impact of other risks described in this “Risk Factors” section.

Business and Operational Risks

Our operations entail inherent risks that may result in substantial liability. We do not insure against all potential losses and could be seriously harmed by unexpected liabilities.

Our operations entail inherent risks, including equipment defects, malfunctions and failures and natural disasters, which could result in uncontrollable flows of natural gas or well fluids, fires and explosions. These risks may expose us, as an equipment operator, to liability for personal injury, wrongful death, property damage, pollution and other environmental damage. The insurance we carry against many of these risks may not be adequate to cover our claims or losses. Our insurance coverage includes property damage, general liability and commercial automobile liability and other coverage we believe is appropriate. Additionally, we are substantially self–insured for workers’ compensation and employee group health claims in view of the relatively high per–incident deductibles we absorb under our insurance arrangements for these risks. We are also self–insured for property damage to our offshore assets. Further, insurance covering the risks we expect to face or in the amounts we desire may not be available in the future or, if available, the premiums may not be commercially justifiable. If we were to incur substantial liability and such damages were not covered by insurance or were in excess of policy limits, or if we were to incur liability at a time when we are not able to obtain liability insurance, our business, results of operations and financial condition could be negatively impacted.

We face significant competitive pressures that may cause us to lose market share and harm our financial performance.

Our business is highly competitive, and there are low barriers to entry. Our competitors may be able to more quickly adapt to technological changes within our industry and changes in economic and market conditions as a whole, more readily take advantage of acquisitions and other opportunities and adopt more aggressive pricing policies. Our ability to renew or replace existing contract operations service agreements with our customers at rates sufficient to maintain current revenue and cash flows could be adversely affected by the activities of our competitors. If our competitors substantially increase the resources they devote to the development and marketing of competitive products, equipment or services or substantially decrease the price at which they offer their products, equipment or services, we may not be able to compete effectively. 20

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In addition, we could face significant competition from new entrants into the compression services business. Some of our existing competitors or new entrants may expand or fabricate new compressors that would create additional competition for the services we provide to our customers. In addition, our customers may purchase and operate their own compression fleets in lieu of using our natural gas compression services. We also may not be able to take advantage of certain opportunities or make certain investments because of our debt levels and our other obligations. Any of these competitive pressures could have a material adverse effect on our business, results of operations and financial condition.

Any acquisitions we complete are subject to substantial risks that could reduce our ability to make distributions to our common stockholders.

Even if we do make acquisitions that we believe will increase the amount of cash available for distribution to our common stockholders, these acquisitions may nevertheless result in a decrease in the amount of cash available for distribution to our common stockholders. Any acquisition involves potential risks, including, among other things:

●	the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which any indemnity we receive is inadequate;
●	our inability to obtain satisfactory title to the assets we acquire; and
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●	the occurrence of other significant changes, such as impairment of long-lived assets, asset devaluation or restructuring charges.
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If we do not make acquisitions on economically acceptable terms, our future growth could be limited.

Our ability to grow depends, in part, on our ability to make accretive acquisitions. If we are unable to make accretive acquisitions either because we are (i) unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts with them, (ii) unable to obtain financing for these acquisitions on economically acceptable terms or (iii) outbid by competitors, then our future growth and ability to maintain dividends could be limited. Furthermore, even if we make acquisitions that we believe will be accretive, these acquisitions may nevertheless result in a decrease in the cash generated from operations.

Any acquisition involves potential risks, including, among other things:

•	an inability to successfully integrate the businesses we acquire;
•	the assumption of unknown liabilities;
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•	limitations on rights to indemnity from the seller;
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•	mistaken assumptions about the cash generated or anticipated to be generated by the business acquired or the overall costs of equity or debt;
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•	the diversion of management’s attention from other business concerns;
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•	unforeseen operating difficulties; and
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•	customer or key employee losses at the acquired businesses.
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If we consummate any future acquisitions, our capitalization and results of operations may change significantly and we will not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of our future funds and other resources. In addition, competition from other buyers could reduce our acquisition opportunities or cause us to pay a higher price than we might otherwise pay.

Our sustainability initiatives, including emissions reduction and our public statements and disclosures regarding the same, expose us to numerous risks.

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We have developed, and we will continue to develop objectives related to sustainability matters. Statements related to these objectives are made using various underlying assumptions and reflect our current intentions, and do not constitute a guarantee that they will be achieved. Our efforts to research, establish, accomplish, and accurately report on these objectives expose us to numerous operational, reputational, financial, legal and other risks. Our ability to achieve any objective is subject to numerous factors and conditions, many of which are outside of our control, including the availability of alternative energy sources in the jurisdictions in which we operate, the capacity of electrical grids to support traditional 21

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and alternative energy sources, and the broader economic and legal circumstances affecting energy and electricity locally. We cannot predict the ultimate impact of achieving our objectives, or the various implementation aspects, on our financial condition and results of operations.

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There can be no assurance that we will pay dividends in the future.

We cannot provide assurance that we will, at any time in the future, again generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend or that our Board of Directors would determine to use any of our net profits to pay a dividend.

Future dividends may be affected by, among other factors:

•	the availability of surplus or net profits, which in turn depend on the performance of our business and operating subsidiaries;
•	our debt service requirements and other liabilities;
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•	our ability to refinance our debt in the future or borrow funds and access capital markets;
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•	restrictions contained in our Debt Agreements;
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•	our future capital requirements, including to fund our operating expenses and other working capital needs;
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•	the rates we charge for our services;
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•	the level of demand for our services;
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•	the creditworthiness of our customers;
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•	our level of operating expenses; and
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•	changes in U.S. federal, state and local income tax laws or corporate laws.
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We cannot provide assurance that we will declare or pay dividends in any particular amount or at all in the future. A decision not to pay dividends or a reduction in our dividend payments in the future could have a negative effect on our stock price.

Financial Risks

We have a substantial amount of debt that could limit our ability to fund future growth and operations and increase our exposure to risk during adverse economic conditions.

As of December 31, 2024, we had $2.2 billion in outstanding debt obligations, net of unamortized debt premiums and unamortized deferred financing costs, outstanding under our Credit Facility and Senior Notes. Many factors, including factors beyond our control, may affect our ability to make payments on our outstanding indebtedness. These factors include those discussed elsewhere in these Risk Factors.

Our substantial debt level and associated commitments could have important consequences to our liquidity, particularly to the extent our borrowing capacity becomes covenant restricted. For example, these commitments could:

•	make it more difficult for us to satisfy contractual obligations;
•	increase our vulnerability to general adverse economic and industry conditions;
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•	limit our ability to fund future working capital, capital expenditures, acquisitions or other corporate requirements;
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•	increase our vulnerability to interest rate fluctuations because the interest payments on a portion of our debt are based upon variable interest rates, and a portion can adjust based on our credit statistics;
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•	limit our flexibility in planning for, or reacting to, changes in our business and our industry;
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•	place us at a disadvantage compared to our competitors that have less debt or less restrictive covenants in such debt; and
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•	limit our ability to incur indebtedness in the future.
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Covenants in our Debt Agreements may impair our ability to operate our business.

Our Debt Agreements contain various covenants with which we or certain of our subsidiaries must comply, including, but not limited to, restrictions on the use of proceeds from borrowings, limitations on the incurrence of indebtedness, investments, acquisitions, making loans, liens on assets, repurchasing equity, making dividends, transactions with affiliates, mergers, consolidations, dispositions of assets and other provisions customary in similar types of agreements. The Debt Agreements also contain various covenants requiring mandatory prepayments from the net cash proceeds of certain asset transfers.

Our Credit Facility is also subject to financial covenants, including the following ratios, as defined in the corresponding agreement:

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EBITDA to Interest Expense	​	2.5 to 1.0
Senior Secured Debt to EBITDA	​	3.0 to 1.0
Total Debt to EBITDA^(1)^	​	5.25 to 1.0
(1)	Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter.
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If we were to anticipate non–compliance with these financial ratios, we may take actions to maintain compliance with them. These actions include reductions in our general and administrative expenses, capital expenditures or the payment of cash dividends. Any of these measures may reduce the amount of cash available for payment of dividends and the funding of our business requirements, which could have an adverse effect on our business, operations, cash flows or the price of our common stock.

The breach of any of the covenants under the Debt Agreements could result in a default under the Debt Agreements, which could cause indebtedness under the Debt Agreements to become due and payable. If the repayment obligations under the Debt Agreements were to be accelerated, we may not be able to repay the debt or refinance the debt on acceptable terms and our financial position would be materially adversely affected. A material adverse effect on our assets, liabilities, financial condition, business or operations that, taken as a whole, impacts our ability to perform the obligations under the Debt Agreements could lead to a default under those agreements. Further, a default under one or more of the Debt Agreements would trigger cross–default provisions under the other Debt Agreements, which would accelerate our obligation to repay the indebtedness under those agreements.

As of December 31, 2024, we were in compliance with all covenants under the Debt Agreements.

We may be unable to access the capital and credit markets or borrow on affordable terms to obtain additional capital that we may require.

Historically, we have financed acquisitions, operating expenditures and capital expenditures with a combination of cash provided by operating and financing activities. However, to the extent we are unable to finance our operating expenditures, capital expenditures, scheduled interest and debt repayments and any future dividends with net cash provided by operating activities and borrowings under the Credit Facility, we may require additional capital. Periods of instability in the capital and credit markets (both generally and in the oil and gas industry in particular) could limit our ability to access these markets to raise debt or equity capital on affordable terms or to obtain additional financing. Among other things, our lenders may seek to increase interest rates, enact tighter lending standards, refuse to refinance existing debt at maturity at favorable terms or at all and may reduce or cease to provide funding to us. If we are unable to access the capital and credit markets on favorable terms, or if we are not successful in raising capital within the time period required or at all, we may not be able to grow or maintain our business, which could have a material adverse effect on our business, results of operations and financial condition. 23

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Our inability to fund purchases of additional compression equipment could adversely impact our financial results.

We may not be able to maintain or increase our asset and customer base unless we have access to sufficient capital to purchase additional compression equipment. Cash flow from our operations and availability under our Credit Facility may not provide us with sufficient cash to fund our capital expenditure requirements, including any funding requirements related to acquisitions. Our ability to grow our asset and customer base could be impacted by limits on our ability to access additional capital.

We may be vulnerable to fluctuations in interest rates due to our variable rate debt obligations.

Borrowings under our Credit Facility are subject to variable interest rates. Changes in economic conditions outside of our control could result in fluctuations in interest rates, and higher interest rates will thereby increase our interest expense and reduce the funds available for capital investment, operations or other purposes. In addition, a substantial portion of our cash flow must be used to service our debt obligations. Any increase in our interest expense could negatively impact our results of operations and cash flows, including our ability to pay dividends in the future.

Our Amended and Restated Credit Agreement changed the referenced rate from LIBOR to SOFR so that borrowings under the Credit Facility bear interest at, based on our election, either a base rate or SOFR, plus an applicable margin. The Amended and Restated Credit Agreement contains SOFR benchmark replacement provisions. At this time, there can be no assurance as to whether any alternative benchmark or resulting interest rates may be more or less favorable than SOFR.

Customer and Contract Risks

The erosion of the financial condition of our customers could adversely affect our business.

Many of our customers finance their exploration and production activities through cash flow from operations, the incurrence of debt or the issuance of equity. During times when the oil or natural gas markets weaken, our customers are more likely to experience a downturn in their financial condition. 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. A reduction in borrowing bases under reserve–based credit facilities, the lack of availability of debt or equity financing or other factors that negatively impact our customers’ financial condition could result in a reduction in our customers’ spending for our products and services, which may result in their cancellation of contracts, the cancellation or delay of scheduled maintenance of their existing natural gas compression equipment, their determination not to enter into new natural gas compression service contracts or their determination to cancel or delay orders for our services. Furthermore, the loss by our 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. Any such action by our customers would reduce demand for our services. Reduced demand for our services could adversely affect our business, results of operations, financial condition and cash flows. In addition, in the event of the financial failure of a customer, we could experience a loss on all or a portion of our outstanding accounts receivable associated with that customer.

The loss of any of our most significant customers would result in a decline in our revenue and cash available to pay dividends to our common stockholders.

Our five most significant customers collectively accounted for 35%, 33% and 32% of our revenues during the years ended December 31, 2024, 2023 and 2022, respectively. Our services are provided to these customers pursuant to contract operations service agreements, which generally have an initial term of 12 to 36 months, or up to 60 months for the largest horsepower units in our fleet, and continue thereafter until terminated by either party with 30 days’ advance notice. The loss of all or even a portion of the services we provide to these customers, as a result of competition or otherwise, could have a material adverse effect on our business, results of operations and financial condition. 24

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Many of our contract operations service agreements have short initial terms and are cancelable on short notice after the initial term, and we cannot be sure that such contracts will be extended or renewed after the end of the initial contractual term. Any such non renewals, or renewals at reduced rates or the loss of contracts with any significant customer could adversely impact our results of operations.

The length of our contract operations service agreements with customers varies based on operating conditions and customer needs. Our initial contract terms typically are not long enough to enable us to recoup the cost of the equipment we utilize to provide contract operations services, and these contracts are typically cancelable on short notice after the initial term. We cannot be sure that a substantial number of these contracts will be extended or renewed by our customers or that any of our customers will continue to contract with us. The inability to negotiate extensions or renew a substantial portion of our contract operations services contracts, the renewal of such contracts at reduced rates, the inability to contract for additional services with our customers or the loss of all or a significant portion of our services contracts with any significant customer could lead to a reduction in revenue and net income and could require us to record asset impairments. Moreover, we have limited ability to increase prices during our initial contract terms. As a result, we are unable to pass increases in the prices of the equipment, materials and services we utilize to provide contract operations services, as a result of inflation of otherwise, onto our customers, which could result in a reduction in net income. This could have a material adverse effect upon our business, results of operations, financial condition and cash flows.

Labor and Supply Chain Risks

Our ability to manage and grow our business effectively may be adversely affected if we lose management or operational personnel.

We believe that our ability to hire, train and retain qualified personnel will continue to be challenging and important. The supply of experienced operational and field personnel, in particular, decreases as other energy companies’ needs for the same personnel increase. Our ability to grow and to continue our current level of service to our customers will be adversely impacted if we are unable to successfully hire, train and retain these important personnel. In addition, the cost of labor has increased and may continue to increase in the future with increases in demand, which could require us to incur additional costs and negatively impact our results of operations.

We depend on particular suppliers and are vulnerable to product shortages and price increases. With respect to our suppliers of newly–fabricated compression equipment specifically, we occasionally experience long lead times, and therefore may at times make purchases in anticipation of future business. If we are unable to purchase compression equipment or other integral equipment, materials and services from third-party suppliers, we may be unable to retain existing customers or compete for new customers, which could have a material adverse effect on our business, results of operations and financial condition.

Some equipment, materials and services used in our business are obtained from a limited group of suppliers. Our reliance on these suppliers involves several risks, including price increases (as a result of inflation or otherwise), inferior quality and a potential inability to obtain an adequate supply of such equipment, materials and services in a timely manner. Additionally, we occasionally experience long lead times from our suppliers of newly–fabricated compression equipment and may at times make purchases in anticipation of future business. We do not have long–term contracts with some of these suppliers, and the partial or complete loss of certain of these suppliers could have a negative impact on our results of operations and could damage our customer relationships.

If we are unable to purchase compression equipment, in particular, on a timely basis to meet the demands of our customers, our existing customers may terminate their contractual relationships with us, or we may not be able to compete for business from new or existing customers, which, in each case, could have a material adverse effect on our business, results of operations and financial condition. Further, supply chain bottlenecks could adversely affect our ability to obtain necessary materials, parts or lube oil used in our operations or increase the costs of such items. A significant increase in the price of such equipment, materials and services, as a result of inflation, or other factors, could have a negative impact on our business, results of operations, financial condition and cash flows. 25

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Information Technology and Cybersecurity Risks

We may not realize the intended benefits of our process and technology transformation project, which could have an adverse effect on our business.

Between 2019 and 2021, we invested in a process and technology transformation project that replaced our existing ERP, supply chain and inventory management systems and expanded the remote monitoring capabilities of our compression fleet. Beginning in 2023, our focus shifted to fully harnessing these technologies across our business. We expect the technological transformations to lower our internal costs and improve our profitability over time. However, the implementation of the process and technology transformation project has required significant capital and other resources from which we may not realize the benefits we expect to realize. Any such difficulties could have an adverse effect on our business, results of operations and financial condition.

Threats of cyber-attacks or terrorism could affect our business.

We rely on our information technology systems and data for critical operations. We own and manage some of these technology systems, but also rely on the systems provided by a host of third-party service providers, vendors, and business partners. We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners and others, including personally identifiable information, as well as proprietary information belonging to our business, such as trade secrets. We are subject to numerous and evolving cybersecurity risks and threats, including cyber-attacks, computer viruses and terrorism that threaten the confidentiality, integrity and availability of critical technology systems or information and may disrupt our operations and harm our operating results. Our industry requires the continued operation of sophisticated information technology systems and network infrastructure. Any integration of artificial intelligence in our or relevant third parties’ operations, products or services is expected to pose new and/or unknown cybersecurity risks and challenges. In addition, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to significant cybersecurity, operational, and financial risks.

Despite our implementation of security measures, our technology systems and data are vulnerable to material compromises, disruption and failures due to social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, hacking, viruses, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, acts of war or terrorism and other causes. Given the complexity of our technology systems, which includes operational technology deployed in the field, we are unable to comprehensively identify, patch or mitigate against all security vulnerabilities. In addition, a successful cyberattack against a critical third party could materially impact our operations and financial results, and because we cannot control the scope or effectiveness of the security measures deployed by our third-party suppliers and service providers, such as cloud services that support our internal and customer-facing operations, successful cyberattacks that disrupt or result in unauthorized access to third-party technology systems can materially impact our operations and financial results.

Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are increasingly sophisticated in using techniques and tools, including generative and other artificial intelligence, that circumvent security controls, evade detection and remove forensic evidence. As a result, there is no guarantee that we will detect, investigate, remediate or recover from future attacks or incidents, or avoid a material adverse impact to our systems or information. There also can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information. If our information technology systems were to fail and we were unable to recover in a timely way, we may be unable to fulfill critical business functions, which could have a material adverse effect on our business, results of operations and financial condition. 26

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The nature of our industry and assets makes us a target for terrorist activities designed to disrupt our ability to service our customers. Increased cybersecurity regulations and an escalating cyber terrorist threat environment are expected to require additional investments in security that we cannot currently predict. The implementation of security guidelines and measures and maintenance of insurance, to the extent available, addressing such activities could increase costs. We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all. These types of events could materially adversely affect our business and results of operations. In addition, these types of events could require significant management attention and resources and could adversely affect our reputation among customers and the public.

Tax–related Risks

Tax legislation and administrative initiatives or challenges to our tax positions could adversely affect our results of operations and financial condition.

We operate or are registered in locations throughout the U.S. and Canada and, as a result, we are subject to the tax laws and regulations of U.S. federal, state and local and Canadian governments. We have investments in unconsolidated affiliates that operate in the U.S. and international locations. From time to time, various legislative or administrative initiatives may be proposed that could adversely affect our tax positions. There can be no assurance that our tax provision or tax payments will not be adversely affected by these initiatives. In addition, U.S. federal, state and local, and international tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge.

Our ability to use NOLs and interest expense limitation carryovers to offset future income may be limited.

Our ability to use any NOLs and interest expense limitation carryovers generated by us could be substantially limited if we were to experience an “ownership change” as defined under Section 382 of the Code. In general, an “ownership change” would occur if our “5–percent stockholders,” as defined under Section 382 of the Code, including certain groups of persons treated as “5–percent stockholders,” collectively increased their ownership in us by more than 50 percentage points over a rolling three–year period. An ownership change can occur as a result of a public offering of our common stock, as well as through secondary market purchases of our common stock and certain types of reorganization transactions. We have experienced ownership changes, which may result in an annual limitation on the use of our pre–ownership change NOLs (and certain other losses and/or credits) equal to the equity value of our stock immediately before the ownership change, multiplied by the long–term tax–exempt rate for the month in which the ownership change occurred. During the year ended December 31, 2019, the IRS proposed regulations that would prevent us from using unrealized built–in gains to increase this limitation. If these regulations were finalized and we experienced an ownership change our ability to use our NOLs (and certain other losses and/or credits) may be limited. Such a limitation could, for any given year, have the effect of increasing the amount of our U.S. federal and state income tax liability, which would negatively impact the amount of after–tax cash available for distribution to our stockholders and our financial condition.

Legal and Regulatory Risks

From 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.

The size, nature and complexity of our business make us susceptible to various claims, tax audits, litigation and binding arbitration proceedings. We are currently, and may in the future become, subject to various claims, which, if not resolved within amounts we have accrued, could have a material adverse effect on our financial position, results of operations or cash flows, including our ability to pay dividends. Similarly, any claims, even if fully indemnified or insured, could negatively impact our reputation among our customers and the public and make it more difficult for us to compete effectively or obtain adequate insurance in the future. See Part I, Item 3 “Legal Proceedings” of this form 10-K and Note 16 27

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(“Commitments and Contingencies”) to our Financial Statements for additional information regarding certain legal proceedings to which we are a party.

New regulations, proposed regulations and proposed modifications to existing regulations under the CAA, if implemented, could result in increased compliance costs.

In June 2016, the EPA issued final regulations under the CAA amending the NSPS for the oil and natural gas source category and applying to sources of emissions of methane and VOC from certain processes, activities and equipment that is constructed, modified or reconstructed after September 18, 2015. Specifically, the regulation imposed both methane and VOC standards for several emission sources not previously covered by the NSPS, such as fugitive emissions from compressor stations and pneumatic pumps and methane standards for certain emission sources that are already regulated for VOC, such as equipment leaks at natural gas processing plants. The amendments also established methane standards for a subset of equipment that the NSPS regulates, including reciprocating compressors and pneumatic controllers, and extend the VOC standards to the remaining unregulated equipment.

On March 8, 2024, the EPA published even more stringent rules with respect to methane and VOC for new and existing sources, via NSPS Subparts OOOOb and OOOOc, with the OOOOb rules for sources constructed, modified, or reconstructed after December 6, 2022, which became effective on May 7, 2024. The OOOOc rules for existing sources gives the States a two-year deadline to develop and submit to EPA plans for addressing emissions from those sources.

On April 10, 2024, BoLM published a separate final rule, known as the “Waste Prevention, Production Subject to Royalties, and Resource Conservation” rule, to address methane emissions from oil and gas activities on public lands, which became effective on June 10, 2024. The rule is currently stayed pending litigation in North Dakota, Texas, Montana, Wyoming, and Utah. Among the newly adopted methane requirements that may impact our operations are broader applicability to compression equipment relative to the existing rules, increased work practices and inspection requirements and mandates for certain new zero–emissions equipment.

Both the EPA rules and the BoLM rules are subject to ongoing judicial challenges.

Meanwhile, several states — including, most notably, New Mexico and Colorado — have continued to develop their own more stringent methane rules that will or are anticipated to impose additional requirements on the industry. For example, Colorado’s Air Quality Control Commission adopted the “Midstream Rule” on December 20, 2024, to address GHG emissions from midstream oil and gas operations, including from natural gas compressor stations. Under the Midstream Rule, midstream facilities must begin taking steps to reduce GHG emissions from combustion fuel equipment by February 14, 2025.

We do not believe that these rules will have a material adverse impact on our business, financial condition, results of operations or cash flows, but we cannot yet definitively predict the impact of any revision of the current rules or issuance of new rules, which impact could be material.

On October 1, 2015, the EPA issued a new NAAQS ozone standard of 70 ppb, which is a tightening from the 75-ppb standard set in 2008. This new standard became effective on December 28, 2015, and the EPA completed designating attainment/non–attainment regions under the revised ozone standard in 2018. In November 2016, the EPA proposed an implementation rule for the 2015 NAAQS ozone standard, but the agency has yet to issue a final implementation rule. State implementation of the revised NAAQS could result in stricter permitting requirements, delay or prohibit our customers’ ability to obtain such permits and result in increased expenditures for pollution control equipment, the costs of which could be significant. By law, the EPA must review each NAAQS every five years. In December 2018 and again in December 2020, the EPA announced that it was retaining without revision the 2015 NAAQS ozone standard. In June 2021, the EPA commenced a process for reconsidering the December 2020 decision. In August 2023, the EPA announced a new review of the ozone NAAQS and most recently released reports on December 23, 2024, related to its review. We do not believe continued implementation of the NAAQS ozone standard will have a material adverse impact on our business, financial condition, results of operations or cash flows, but we cannot yet predict the impact, if any, of any new Federal Implementation Plan involving new NAAQS standards. 28

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New environmental regulations and proposals similar to these, when finalized, and any other new regulations requiring the installation of more sophisticated pollution control equipment or the adoption of other environmental protection measures, could have a material adverse impact on our business, financial condition, results of operations and cash flows. Notably, opposition to energy development and infrastructure projects has led to regulatory and judicial challenges to new facilities, including compression facilities, in many states. While we have not directly faced any such challenges to the facilities at which we provide contract operations and know of no pending or threatened efforts targeting those facilities, expanded opposition to energy infrastructure, including facilities at which we provide contract operations or in the future might otherwise have an opportunity to provide contract operations, could potentially give rise to material impacts in the future.

We are subject to a variety of governmental regulations; failure to comply with these regulations may result in administrative, civil and criminal enforcement measures and changes in these regulations could increase our costs or liabilities.

We are subject to a variety of U.S. federal, state and local laws and regulations, including relating to the environment, health and safety, labor and employment and taxation. We have investments in unconsolidated affiliates that are subject to U.S. and international regulations. Many of these laws and regulations are complex, change frequently, are becoming increasingly stringent, and the cost of compliance with these requirements can be expected to increase over time. Failure to comply with these laws and regulations may result in a variety of administrative, civil and criminal enforcement measures, including assessment of monetary penalties, imposition of remedial requirements and issuance of injunctions as to future compliance. From time to time, as part of our operations, including newly acquired or potential future contract operations, we may be subject to compliance audits by regulatory authorities in the various states in which we operate.

Environmental laws and regulations may, in certain circumstances, impose strict liability for environmental contamination, which may render us liable for remediation costs, natural resource damages and other damages as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior owners or operators or other third parties. In addition, where contamination may be present, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury, property damage and recovery of response costs. Remediation costs and other damages arising as a result of environmental laws and regulations, and costs associated with new information, changes in existing environmental laws and regulations or the adoption of new environmental laws and regulations could be substantial and could negatively impact our financial condition, profitability and results of operations. Moreover, failure to comply with these environmental laws and regulations, may result in the imposition of administrative, civil and criminal penalties and the issuance of injunctions delaying or prohibiting operations.

We may need to apply for or amend facility permits or licenses from time to time with respect to storm water or wastewater discharges, waste handling, or air emissions relating to manufacturing activities or equipment operations, which subjects us to new or revised permitting conditions that may be onerous or costly to comply with. In addition, certain of our customer service arrangements may require us to operate, on behalf of a specific customer, petroleum storage units such as underground tanks or pipelines and other regulated units, all of which may impose additional compliance and permitting obligations. Any failure to obtain or delay in obtaining required permits, licenses and other governmental approvals by our customers could result in production delays and thereby indirectly materially and adversely impact our operations and business.

We conduct operations at numerous facilities in a wide variety of locations across the continental U.S. The operations at many of these facilities require environmental permits or other authorizations. Additionally, natural gas compressors at many of our customers’ facilities require individual air permits or general authorizations to operate under various air regulatory programs established by rule or regulation. These permits and authorizations frequently contain numerous compliance requirements, including monitoring and reporting obligations and operational restrictions, such as emission limits. Given the large number of facilities in which we operate, and the numerous environmental permits and other authorizations that are applicable to our operations, we may occasionally identify or be notified of violations of certain requirements existing in various permits or other authorizations. Occasionally, we have been assessed penalties for non–compliance, and we could be subject to such penalties in the future. We have not been subject to any penalties to date that have materially and adversely impacted or are expected to materially and adversely impact our operations or business. 29

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We routinely deal with oil, natural gas and other petroleum products. Hydrocarbons or other hazardous substances or wastes may have been disposed or released on, under or from properties used by us to provide contract operations services or inactive compression storage or on or under other locations where such substances or wastes have been taken for disposal. These properties may be subject to investigatory, remediation and monitoring requirements under environmental laws and regulations, and such requirements may vary.

The modification or interpretation of existing environmental laws or regulations, the more vigorous enforcement of existing environmental laws or regulations, or the adoption of new environmental laws or regulations may also negatively impact oil and natural gas exploration and production, gathering and pipeline companies, including our customers, which in turn could have a negative impact on us.

Climate change legislation, regulatory initiatives and stakeholder pressures could result in increased compliance costs, financial risks and potential reduction in demand for our services.

Climate change legislation and regulatory initiatives may arise from a variety of sources, including international, national, regional and state levels of government and associated administrative bodies, seeking to restrict or regulate emissions of GHGs such as carbon dioxide and methane.

Congress and various federal and state legislative and regulatory bodies have previously considered legislation to restrict or regulate emissions of GHG. Energy legislation and other initiatives continue to be proposed that may be relevant to GHG emissions issues. For example, the SEC adopted rules in March 2024 that would, if the rules survive legal challenge, mandate extensive disclosure for certain public companies of climate-related data, risks and opportunities, including financial impacts, physical and transition risks, related governance and strategy, and greenhouse gas emissions. Almost half of the states, either individually or through multi–state regional initiatives, have begun to address GHG emissions, primarily through the planned development of emission inventories or regional GHG cap and trade programs. Various states, such as California, Colorado and New York have passed or proposed similar climate change disclosure laws. Although most of the state–level initiatives have to date been focused on large sources of GHG emissions, such as electric power plants, it is possible that smaller sources such as our natural gas–powered compressors could become subject to GHG–related regulation. Depending on the particular program, we could be required to control emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. Our customers or other business partners may require us to provide additional climate-related information if they are also subject to these or additional climate-related disclosure laws or regulations. These actions could result in increased (i) costs to operate and maintain our facilities, (ii) capital expenditures to install new emission controls on our facilities, and (iii) costs to administer and manage any potential GHG emissions regulations or carbon trading or tax programs. Such climate-related disclosure requirements could result in increased compliance costs, and possible litigation and reputational risks if such disclosures are incomplete, inaccurate, misleading or do not otherwise meet the expectations of our stakeholders. Moreover, such requirements may not always be uniform across jurisdictions, which may result in increased complexity and cost for compliance. In addition, we may take voluntary steps to mitigate any impact our operations might have on climate change. As a result, we may experience increases in energy, transportation and raw material costs, capital expenditures or insurance premiums; however, there is no guarantee that such efforts will have the desired effects.

The $1 trillion legislative infrastructure package passed by Congress in November 2021 includes a number of climate-focused spending initiatives targeted at climate resilience, enhanced response and preparation for extreme weather events, and clean energy and transportation investments. Significant additional legislative action by Congress also occurred in August 2022 with the Inflation Reduction Act, signed into law by the former administration, which provides $391 billion in funding for research and development and incentives for low-carbon energy production methods, carbon capture, and other programs directed at encouraging de-carbonization and addressing climate change. The IRA also amends the Clean Air Act to include a Methane Emissions and Waste Reduction Incentive Program for petroleum and natural gas systems. This program requires the EPA to impose a “waste emissions charge” on certain natural gas and oil sources that are already required to report under EPA’s GHG Reporting Program. In November 2024, the EPA released its final rule to implement the methane emissions fee with an effective date in January 2025, which is expected to apply to reporting year 2024 emissions. While the current administration has issued an executive order pausing the disbursement of all unspent funds appropriated through the IRA and has already begun to roll back these environmental policies implemented during the former administration, U.S. climate leaders have vowed to continue protecting and building on climate progress. Such 30

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legislation, regulations, and initiatives, as well as uncertainty regarding the future success of such regulations and initiatives in reducing demand for oil and gas, could indirectly affect our business and our results of operations by reducing demand for our services.

Separately, the EPA has promulgated regulations controlling GHG emissions under its existing CAA authority. The EPA has adopted rules requiring many facilities, including petroleum and natural gas systems, to inventory and report their GHG emissions. In 2024, we did not operate any facilities that were subject to these reporting obligations. In addition, the EPA rules provide air permitting requirements for certain large sources of GHG emissions. The requirement for large sources of GHG emissions to obtain and comply with permits will affect some of our and our customers’ largest new or modified facilities going forward but is not expected to cause us to incur material costs. As noted above, the EPA has undertaken efforts to regulate emissions of methane, considered a GHG, in the oil and gas sector, and could develop additional, more stringent rules in the future.

With the re-election of the current administration, however, these climate-focused initiatives have and will likely face major headwinds, and regulations will likely be scaled back (during his first term, more than 125 U.S. environmental rules and policies were rolled back). Already, the current administration has released a series of executive orders impacting the energy sector. Ranging from declaring a national emergency due to the U.S.’s inadequate energy supply, infrastructure, and prices, to halting wind energy leasing and promoting fossil fuel exploration, these executive orders are already reshaping the current direction of the U.S. climate agenda. At this time, we cannot determine how the current administration will continue to proceed and cannot accurately predict the ensuing impact on social cost or other interagency climate efforts, which may give rise to a material adverse effect on our business, financial condition, results of operations and cash flows.

At the international level, the U.S. joined the international community at the 21st COP of the UNFCCC in Paris, France, which resulted in the “Paris Agreement,” which intended for signatory countries to nationally determine their contributions and set GHG emission reduction goals every five years beginning in 2020. While the Paris Agreement did not impose direct requirements on emitters, national plans to meet its pledge resulted in new regulatory requirements. After withdrawing from the Paris Agreement in November 2020, the U.S. re-entered the Paris Agreement in April 2021 along with a new “nationally determined contribution” that the U.S. would achieve GHG emissions reductions of at least 50% relative to 2005 levels by 2030. In November 2021, at COP26 in Glasgow, the U.S. and European Union jointly announced the launch of the “Global Methane Pledge,” by which signatory countries aim to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector. The December 2023 COP28 meeting in Dubai reaffirmed commitments to the Paris Agreement and concluded that the world should move away from fossil fuel energy in a just, orderly, and equitable manner and aim to achieve net zero GHG emissions by 2050, while recognizing a transitional role for fossil fuels. In November 2024, at COP29 in Azerbaijan, countries agreed on the final building blocks that set out how carbon markets will operate under the Paris Agreement, among other outcomes that further indicate the global push to mitigate climate change. Given that the current administration has issued an executive order that initiated the process to withdraw the U.S. from the Paris Agreement and from any commitments made under the UNFCCC, however, it remains to be seen which of these aforementioned U.S. commitments will survive in 2025 and beyond. Just as we cannot fully anticipate the impact of the methane rules discussed above, we also cannot predict whether potential future re-entry, or pending withdrawal from, into the Paris Agreement or other international pledges will result in any particular new federal regulatory requirements or whether such requirements will cause us to incur material costs. Nevertheless, several states and geographic regions in the U.S. have adopted legislation and regulations to reduce emissions of GHGs, including cap and trade regimes and commitments to contribute to meeting the goals of the Paris Agreement.

Increasingly, parties have sought to bring suit against various natural gas and oil companies alleging that the companies have been aware of the adverse effects of climate change but defrauded their investors or customers by failing to adequately disclose those impacts. Any such litigation targeting our customers could negatively impact their operation and, in turn, decrease demand for our operations, which could have an adverse impact on our financial condition. 31

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In sum, any legislation, regulatory programs or social pressures related to climate change could increase our costs and require substantial capital, compliance, operating and maintenance costs, reduce demand for our services and reduce our access to financial markets. Current, as well as potential future, laws and regulations that limit GHG emissions or that otherwise promote the use of renewable energy over fossil fuel energy sources could increase the cost of our services and, thereby, further reduce demand and adversely affect our sales volumes, revenues and margins.

A climate–related decrease in demand for oil and natural gas could negatively affect our business.

Supply and demand for oil and natural gas is dependent upon a variety of factors, many of which are beyond our control. These factors include, among others, the potential adoption of new government regulations, including those related to fuel conservation measures and climate change regulations, technological advances in fuel economy and energy generation devices. For example, legislative, regulatory or executive actions intended to reduce emissions of GHG could increase the cost of consuming crude oil and natural gas, thereby potentially causing a reduction in the demand for such products. A broader transition to alternative fuels or energy sources, whether resulting from potential new government regulation, carbon taxes or consumer preferences could result in decreased demand for crude oil, natural gas and NGLs. Any decrease in demand for these products could consequently reduce demand for our services and could have a negative effect on our business.

Also, recent activism directed at shifting funding away from companies with fossil fuel energy-related assets could result in a reduction of funding for the energy sector overall. As of September 2024, 86 climate lawsuits have been filed against the world’s largest oil, gas, and coal producing corporations, with the number of cases filed against fossil fuel companies each year nearly tripling since the Paris Agreement was reached in 2025. Such actions could adversely impact our business by distracting management and other personnel from their primary responsibilities, require us to incur increased costs, and/or result in reputational harm. Moreover, any such litigation targeting our customers could negatively impact their operation and, in turn, decrease demand for our services. Such shareholder activism in relation to environmental, social and governance matters could have an adverse effect on our ability to obtain external financing as well as negatively affect the cost of, and terms for, financing to fund capital expenditures or other aspects of our business. Attention to climate change and other ESG risks has also resulted in governmental investigations and public and private litigation, which could increase our costs or otherwise adversely affect our business.

Climate change may increase the frequency and severity of weather events that could result in severe personal injury, property and environmental damage, which could curtail our or our customers’ operations and otherwise materially adversely affect our cash flows.

Some scientists have concluded that increasing concentrations of GHG in the Earth’s atmosphere may produce climate changes that have significant weather–related effects, such as increased frequency and severity of storms, droughts, hurricanes, blizzards, floods and other climatic events, in addition to more chronic changes such as shifting temperature, precipitation, and other meteorological patterns. If any of those effects were to occur, they could have an adverse effect on our assets and operations, including, but not limited to, damages to our or our customers’ facilities and assets from powerful wind or rising waters. We may experience increased insurance costs, or difficulty obtaining adequate insurance coverage, for our assets in areas subject to more frequent severe weather. We may not be able to recoup these increased costs through the rates we charge our customers. Extreme weather events could cause damage to property or facilities that could exceed our insurance coverage, and our business, financial condition and results of operations could be adversely affected. Such impacts may be proportionately more severe given the geographical concentration of our operations. These disruptions could further result in evacuation of personnel, curtailment of services, interruption of the transportation of products and materials, and loss of productivity.

Another possible consequence of climate change is increased volatility in seasonal temperatures. The market for natural gas and natural gas liquids is generally impacted by periods of colder weather and warmer weather, so any changes in climate could affect the market for those fuels, and thus demand for our services. Increased energy use due to weather changes may require us to invest in additional equipment to serve increased demand. A decrease in energy use due to weather changes may negatively affect our financial condition through decreased revenues. Despite the use of the term “global warming” as a shorthand for climate change, some studies indicate that climate change could cause some areas to 32

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experience temperatures substantially colder than their historical averages. As a result, it is difficult to predict how the market for our services could be affected by increased temperature volatility.

Environmental, social and governance scrutiny and changing expectations from stakeholders may impose additional costs or additional risks.

In recent years, attention has been given to corporate activities related to ESG matters. A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including demands for action related to climate change, promoting the use of substitutes to fossil fuel products and encouraging the divestment of companies in the fossil fuel industry. Various members of the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities, and other groups, have begun promoting the divestment of fossil fuel equities as well as pressuring lenders and other financial services companies and their regulators, such as the Federal Reserve, to limit or curtail activities with fossil fuel companies. These efforts could have a material adverse effect on the price of our securities and our ability to access equity capital markets. Members of the investment community have also begun to screen companies like ours for sustainability performance, including practices related to GHGs and climate change, and through the use of ESG ratings or otherwise, before investing in our securities. As a result, we could experience additional costs or financial penalties, delayed or cancelled projects, and/or reduced production and reduced demand, which could have a material adverse effect on our earnings, cash flows, and financial condition. If we do not adapt to or comply with expectations and standards on ESG matters, as they continue to evolve, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage, and our business, financial condition and/or stock price could be materially and adversely affected.

Our operations, projects and growth opportunities require us to have strong relationships with various key stakeholders, including our shareholders, employees, suppliers, customers, local communities and others. We may face pressures from stakeholders, many of whom may be concerned by on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability while at the same time remaining a successfully operating public company. If we do not successfully manage expectations across these varied stakeholder interests, it could erode our stakeholder trust and thereby affect our brand and reputation. The lack of an established single approach to identifying, measuring, and reporting on many ESG matters may further create uncertainty and ambiguities. Failure to realize or timely achieve progress on such aspirational goals, targets, cost estimates, and other expectations or assumptions may adversely impact us. Unfavorable ESG ratings could also lead to further increased negative sentiment towards us, our customers, and our industry, negatively impacting us and our access to and costs of capital. Such erosion of confidence could negatively impact our business through decreased demand and growth opportunities, delays in projects, increased legal action and regulatory oversight, adverse press coverage and other adverse public statements, difficulty hiring and retaining top talent, difficulty obtaining necessary approvals and permits from governments and regulatory agencies on a timely basis and on acceptable terms, and difficulty securing investors and access to capital. The occurrence of any of the foregoing could have a material adverse effect on our business and financial condition.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Information Technology and Cybersecurity Risks

We utilize technology in all aspects of our business to drive operational efficiencies and enhance our value proposition to our customers. Our investments have focused on implementing cloud-based solutions to replace legacy systems, the automation of workflows, integration of digital and mobile tools for our field service technicians and expanded remote monitoring capabilities of our compression fleet. We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See Part I, Item 1A “Risk Factors – Information Technology and Cybersecurity Risks” of this Form 10-K. 33

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Cybersecurity Incidents

​

We have not experienced a material cybersecurity incident and although we are subject to ongoing and evolving cybersecurity threats, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Risk Management and Strategy

​

Overall Process

Our cybersecurity risk management program is designed to monitor, detect, prevent and respond to cybersecurity threats to our critical systems, information, services and IT environment. Our internal IT team has committed resources to review and enhance our cybersecurity risk management program, work with internal and third-party experts to determine and implement appropriate controls, partner with our compliance team to provide employee training and awareness, stay abreast of emerging potential threats and best practices, and to respond to cybersecurity incidents. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.

We utilize the CIS CSC to promote best practices and reduce the risk of a successful cybersecurity attack. This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the CIS CSC as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.

Enterprise Risk Management Process Integration

Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply to other legal, compliance, strategic, operational, and financial risk areas. This provides cross-functional visibility, as well as executive leadership oversight, to address and mitigate associated risks.

​

Our IT policy communicates internal guidelines for our IT infrastructure and services, baseline controls that help safeguard the security of our operating environment, and reporting and escalation protocols. Our IT security training program is designed to help our employees recognize and report suspicious activity. The program includes annual cybersecurity training for employees and executive leadership, phishing simulations, and other security exercises for employees. Cybersecurity awareness and education is further emphasized through a company-wide education campaign during National Cybersecurity Awareness Month.

Independent Third-Party Assessment

As part of our cybersecurity strategy, we engage third-party firms to perform assessments, including detailed penetration testing, to identify potential vulnerabilities and evaluate the effectiveness of our security controls. In addition, we maintain a Business Continuity and Incident Response Plan, which is validated through tabletop exercises to support our readiness to respond to cybersecurity events.

​

Third-Party Risk Oversight

We utilize a third-party risk management solution to monitor key vendors. Prior to engagement, we conduct initial risk assessments of our vendors based on security questionnaire responses and open-source intelligence gathering. After engagement, our third-party management solution provides a repeatable measure of security performance based on external security indicators, including monitoring changes to vendor cybersecurity risk scores and identification of new cybersecurity risks. Key vendor cybersecurity risk scores are included in our cybersecurity risk report provided to executive leadership when there is a noticeable change in the vendor’s cybersecurity risk score. These visibility, insights, and processes help us to manage vendor risks. 34

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Risk Management with Respect to Information Technology and Cybersecurity

Our Board of Directors has an active role, as a whole and through its subcommittees, in oversight of our risks and is assisted by management in the exercise of these responsibilities. Our Board of Directors delegates oversight to specific subcommittees and is informed quarterly through committee reports. The Audit Committee is responsible for overseeing our cybersecurity risk management program. Various Audit Committee members have first-hand or supervisory experience over cybersecurity, and our Audit Committee chair is certified in the National Association of Corporate Directors Cyber Risk Oversight Program.

​

Our Vice President of IT is a member of our senior IT management team and is primarily responsible for assessing and managing our material risks from cybersecurity threats. Our Vice President of IT has primary responsibility for our overall cybersecurity risk management program, including supervising both our internal cybersecurity personnel and external cybersecurity consultants. Our Vice President of IT has over 25 years of experience primarily focused on managing large scale, complex programs and projects as well as managing application development teams in a global environment. Our senior manager in charge of IT security has more than a decade of experience in cybersecurity risk management, including CISSP certification.

Our IT management team utilizes various processes and technologies to identify, protect, detect, respond, and recover from cybersecurity events and incidents. During 2024, our IT management team initiated an independent evaluation of our cybersecurity framework and implemented certain company-wide security enhancements. In addition, the IT management team is subject to specific key performance indicators and performance against such key performance indicators is reviewed by our Audit Committee. To create awareness in our first line of defense, training is also provided to employees to help them identify security risks, which includes routine phishing exercises and appraisal of and assistance with security-related performance.

Cybersecurity events and incidents can be reported to our IT management team in several ways, including through our externally managed detection and response provider, system alerts, or employees reporting suspicious activity. The Vice President of IT reports to our executive leadership team and along with our senior manager in charge of IT security, provides cybersecurity risk assessment and response updates to the Audit Committee on a regular basis, or as often as deemed necessary.

Other Areas of Risk Management

See our 2023 Sustainability Report at www.archrock.com for information associated with additional areas of risk management addressed by our management team and reviewed by our Board of Directors and committees of our Board of Directors.

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Item 2. Properties

The following table describes the material facilities, all of which are used by both of our business segments, that we owned or leased at December 31, 2024:

​	​	​	​	​
Location	****	Status	****	Square Feet
Houston, Texas - Corporate office		Leased		75,000
Greeley, Colorado	​	Leased	​	10,000
Houma, Louisiana	​	Owned	​	60,000
Carlsbad, New Mexico	​	Leased	​	11,200
Yukon, Oklahoma		Owned		85,000
West Alexander, Pennsylvania		Leased		15,000
Asherton, Texas		Leased		9,000
Midland, Texas		Owned		51,000
Midland, Texas	​	Leased	​	17,000
Midland, Texas	​	Leased	​	28,375
Pecos, Texas		Leased		10,000
Victoria, Texas	​	Owned	​	23,000
Victoria, Texas		Owned		53,700

​

Our executive office is located at 9807 Katy Freeway, Suite 100, Houston, Texas 77024 and our telephone number is 281–836–8000.

Item 3. Legal Proceedings

In the ordinary course of business, we are involved in various pending or threatened legal actions. While we are unable to predict the ultimate outcome of these actions, we believe that any ultimate liability arising from any of these actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to pay dividends. However, because of the inherent uncertainty of litigation and arbitration proceedings, 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 pay dividends.

See Note 17 (“Commitments and Contingencies”) to our Financial Statements for additional information regarding litigation, claims and other legal proceedings.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Common Stock

Our common stock is traded on the New York Stock Exchange under the symbol “AROC.” On February 18, 2025, the closing price of our common stock was $27.96 per share. 36

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Comparison of Five Year Cumulative Total Return

The performance graph below shows the cumulative total stockholder return on our common stock compared with the S&P 500, AMNAX and AMZ indices over the five–year period beginning on December 31, 2019. The results are based on an investment of $100 in each of our common stock, the S&P 500, the AMNAX and the AMZ. The graph assumes reinvestment of dividends and adjusts all closing prices and dividends for stock splits.

The performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Form 10–K into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under those Acts.

Holders

As of February 18, 2025, there were approximately 1,200 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by banks, brokers and other nominees.

Dividends

On January 30, 2025, our Board of Directors declared a quarterly dividend of $0.19 per share of common stock, or approximately $33.5 million, which was paid on February 19, 2025 to stockholders of record at the close of business on February 12, 2025. Any future determinations to pay cash dividends to our stockholders will be at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, and credit and loan agreements in effect at that time and other factors deemed relevant by our Board of Directors. We cannot provide assurance that we will declare or pay dividends in any particular amount or at all in the future.

Securities Authorized for Issuance under Equity Compensation Plans

For disclosures regarding securities authorized for issuance under equity compensation plans, see Part III, Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Form 10–K. 37

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Unregistered Sales of Equity Securities and Use of Proceeds

None.

Purchases of Equity Securities by Issuer and Affiliated Purchasers

The following table summarizes our purchases of equity securities during the three months ended December 31, 2024:

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	Approximate Dollar
​	​	​	​	​	​	​	​	​	Value of Shares
​	​	​	​	​	​	​	Total Number of	​	That May Yet be
​	​	​	​	Average		​	Shares Purchased	​	Purchased Under
​	​	Total Number	​	Price		​	as Part of Publicly	​	the Publicly
​	​	of Shares	​	Paid per		​	Announced Plans	​	Announced Plans
(dollars in thousands, except per share amounts)	****	Purchased^(1)^	****	Share^(2)^		****	or Programs^(3)^	****	or Programs^(3)^
October 1, 2024 — October 31, 2024	​	—	​	$	—	​	—	​	$	37,893
November 1, 2024 — November 30, 2024		309	​		19.86		—			37,893
December 1, 2024 — December 31, 2024		—	​		—		—			37,893
Total		309	​	$	19.86		—		​	​

(1) Represents shares of common stock purchased from employees to satisfy tax withholding obligations in connection with the vesting of restricted stock awards.

(2) Average price paid per share includes costs associated with the repurchase, as applicable.

(3) See Note 18 (“Stockholders’ Equity”) for further details on the Share Repurchase Program.

​

Item 6. [Reserved]

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Item 7. 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 Financial Statements, the notes thereto, and the other financial information appearing elsewhere in this Form 10–K. The following discussion includes forward–looking statements that involve certain risks and uncertainties. See “Forward–Looking Statements” and Part I, Item 1A. “Risk Factors” in this Form 10–K.

This section primarily discusses 2024 and 2023 items and comparisons between these years. For a discussion of changes from 2022 to 2023 and other financial information related to 2023, refer to Part II,

Item 7. “Manag Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

of our Annual Report on Form 10–K for the year ended December 31, 2023 filed with the SEC on February 21, 2024. Overview

We are an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping our customers produce, compress and transport natural gas in a safe and environmentally responsible way. We are a premier provider of natural gas compression services to customers in the energy industry throughout the U.S., and a leading supplier of aftermarket services to customers that own compression equipment in the U.S. We operate in two business segments: contract operations and aftermarket services. Our contract operations services primarily include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining our owned fleet of natural gas compression equipment to provide natural gas compression services to our customers. In our aftermarket services business, we sell parts and components and provide operations, maintenance, overhaul and reconfiguration services to customers who own compression equipment. 38

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Significant 2024 Transactions

TOPS Acquisition

On August 30, 2024, we completed the TOPS Acquisition whereby we acquired all of the issued and outstanding equity interests in TOPS, including a fleet of approximately 580,000 horsepower for aggregate consideration consisting of $868.7 million in cash and approximately 6.9 million shares of common stock with an acquisition date fair value of $139.1 million. The cash portion of the purchase price was funded with proceeds from the July 2024 Equity Offering, the 2032 Notes offering and borrowings under the Credit Facility. See Note 4 (“Business Transactions”) for further details.

2032 Notes

On August 26, 2024, we completed a private offering of $700.0 million aggregate principal amount of 6.625% senior notes due September 2032 and received net proceeds of $690.0 million after deducting issuance costs. The $10.0 million of issuance costs were recorded as deferred financing costs within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statement of operations over the term of the notes. A portion of the net proceeds was used to fund a portion of the cash consideration for the TOPS Acquisition, the 2027 Notes Tender Offer and to repay borrowings outstanding under our Credit Facility. See Note 16 (“Long-Term Debt”) for further details.

2027 Notes Tender Offer

In connection with the TOPS Acquisition and offering of the 2032 Notes, we completed a concurrent cash tender offer of $202.0 million, which reflects approximately 101% of the aggregate principal amount of the tendered 2027 Notes and $0.2 million of agent and legal fees. On the date of tender, the net carrying value of the tendered 2027 Notes was $198.8 million and we recorded a debt extinguishment loss of $3.2 million in our consolidated statements of operations. See Note 16 (“Long-Term Debt”) for further details.

July 2024 Equity Offering

On July 24, 2024, Archrock sold, pursuant to a public underwriting offering, approximately 12.7 million shares of common stock, including approximately 1.7 million shares of common stock pursuant to an over-allotment option. Archrock received net proceeds of $255.7 million, after deducting underwriting discounts, commissions and offering expenses. Proceeds from this equity offering were used to fund a portion of the TOPS Acquisition. See Note 18 (“Stockholders’ Equity”) for further details.

Trends and Outlook

The key driver of our business is the production of U.S. oil and natural gas. Approximately 64% of our operating fleet is deployed for midstream natural gas gathering applications, with the remaining fleet being used in gas lift applications to enhance oil production. As our business is so closely aligned with production and is typically less directly impacted by commodity prices, we are not as exposed to the volatility often faced in shorter–cycle oil field service businesses.

Domestic natural gas production generally occurs either in basins where natural gas is produced alongside oil, also known as “associated” gas, such as the Permian and Delaware Basins, the Eagle Ford and the Mid–Continent or in natural gas basins, such as the Marcellus, Utica and Haynesville Shales. Significant investment in domestic exploration and production and midstream infrastructure across the energy industry has been made over much of the past decade, particularly in the low–cost basins characterized by oil and associated natural gas production. The development of these basins producing both commodities has created additional incremental demand for natural gas compression over the recent past as it is a critical method to transport associated gas volumes or enhance oil production through gas lift. 39

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Current Trends

According to the EIA Outlook, average U.S. oil and dry natural gas and production were as follows:

​	​	​	​	​	​	​
​	****	Year Ended December 31,
​	​	2024	****	2023	****	2022
Average dry natural gas production (Bcf/d)		103.0		103.8		98.0
Average oil production (MMb/d)		13.2		12.9		11.9

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During 2024, U.S. natural gas and oil production grew to record levels, resulting in strong demand for our compression services. In response, we increased our investment in new large horsepower fleet units and expanded our fleet through the TOPS Acquisition. Our contract operations revenue and total operating horsepower increased 21% and 17%, respectively in 2024.

Outlook

The EIA Outlook forecasts the following year–over–year changes:

​	​	​	​	​	​	​
​	​	Year Ended December 31,
​	​	2025		​	2026	​
U.S. dry natural gas production		2	%	​	2	%
U.S. oil production		3	%	​	1	%
U.S. natural gas domestic consumption	​	1	%	​	(1)	%
Liquefied natural gas exports		17	%	​	16	%

The EIA Outlook expects natural gas production to continue to increase to all-time highs in 2025 and 2026. Natural gas consumption is expected to be largely consistent with 2024, reflecting consistent usage of natural gas in the electric power generation and residential sectors, as well as increased LNG exports and exports of natural gas via pipeline to Mexico.

We believe the outlook for the energy industry in the U.S. is positive. While we anticipate that the combination of commodity prices and demand may likely have a positive impact on activity levels in both the upstream and midstream sectors, we cannot predict the ultimate magnitude of that impact on our business and expect it to be varied across our operations, depending on the region, customer, nature of our services, contract term and other factors. However, we continue to believe that overall the long–term demand for our compression services will continue given the necessity of compression in facilitating the transportation and processing of natural gas.

Regarding our aftermarket services business, the base of owned compression in the U.S. has increased over the past several years, which we believe will help sustain our aftermarket services business over the long term.

Key Challenges and Uncertainties

In addition to general market conditions in the oil and natural gas industry and competition in the natural gas compression industry, we believe the following represent the key challenges and uncertainties we will face in the future.

Labor. We believe that our ability to hire, train and retain qualified personnel will continue to be important. Although we have been able to historically satisfy our personnel needs, retaining employees in our industry continues to be a challenge. Our ability to grow and to continue our current level of service to our customers will depend in part on our success in hiring, training and retaining our employees. Further, the cost of labor has increased and may continue to increase in the future with increases in demand, which will require us to incur additional costs.

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Cost Management. In order to improve our operations and further reduce operating expenses, we invested and continue to invest significant resources into a process and technology transformation project that has, among other things, replaced our former ERP, supply chain and inventory management systems and expanded the remote monitoring capabilities of our compression fleet. Cost management continues to be challenging, however, and there is no guarantee that our efforts will result in a reduction in our operating expenses. Natural gas production growth and resulting demand for our services could cause us to experience increased operating expenses as we hire employees and incur additional expenses needed to support the rebound in market demand.

Further, we depend on suppliers for the materials, parts, equipment and lube oil necessary to our operations, which exposes us to volatility in prices. Significant price increases for these inputs could adversely affect our operating profits. Supply chain disruptions could also adversely affect our ability to obtain, or increase the cost of, such items. While we generally attempt to mitigate the impact of increased prices through strategic purchasing decisions, diversification of our supplier base, where possible, and the passing along of increased costs to customers, there may be a time delay between the increased commodity prices and the ability to increase the price of our services.

Capital Requirements and the Availability of External Sources of Capital. We funded a significant portion of our capital expenditures and the TOPS Acquisition with proceeds from the July 2024 Equity Offering and the 2032 Notes offering and borrowings under the Credit Facility. Current conditions could limit our ability to access the debt and equity markets to raise capital on affordable terms in 2025 and beyond. If we are not successful in raising capital within the time period required or at all, we may not be able to fund these capital expenditures or acquisitions, which could impair our ability to grow or maintain our business.

Demand for natural gas-powered compression. Demand for our services is dependent on the demand for natural gas in the markets we serve. Although the EIA currently forecasts natural gas demand will grow through 2050, technological advances and accelerated adoption of renewable sources of energy could reduce demand for natural gas in our markets and have an adverse effect on our business. In addition, increased focus of our customers on reducing emissions from, or the use of, combustion engines in compression could increase demand for electric motor-driven compressors or require us to make modifications to our existing natural gas-powered units.

Operating Highlights

​	​	​	​	​	​	​
​	Year Ended December 31,					​
(horsepower in thousands)	2024	​	2023	​	2022	​
Total available horsepower (at period end)^(1)^	4,401		3,759		3,726
Total operating horsepower (at period end)^(2)^	4,227		3,607		3,448
Average operating horsepower^(3)^	3,794		3,554		3,328
Horsepower utilization:
Spot (at period end)	96	%	96	%	93	%
Average	95	%	95	%	87	%

(1) Defined as idle and operating horsepower. Includes new compressors completed by third party manufacturers that have been delivered to us.

(2) Defined as horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue.

(3) Defined as average of period end horsepower that is operating under contract and horsepower that is idle but under contract and generating revenue such as standby revenue, including operating horsepower as of September 30, 2024 through December 31, 2024 for compressors acquired in the TOPS Acquisition.

Non–GAAP Financial Measures

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 measure of adjusted gross margin. 41

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We define adjusted gross margin as total revenue less cost of sales, exclusive of depreciation and amortization. Adjusted 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, exclusive of depreciation and amortization, which are key components of our operations. We believe adjusted 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 SG&A activities, our financing methods and income taxes. In addition, depreciation and amortization may not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs of current operating activity. As an indicator of our operating performance, adjusted gross margin should not be considered an alternative to, or more meaningful than, gross margin, net income (loss) or any other measure presented in accordance with GAAP. Our adjusted gross margin may not be comparable to a similarly titled measure of other entities because other entities may not calculate adjusted gross margin in the same manner.

Adjusted gross margin has certain material limitations associated with its use as compared to net income. These limitations are primarily due to the exclusion of SG&A, depreciation and amortization, long-lived and other asset impairments, restructuring charges, debt extinguishment loss, interest expense, transaction-related costs, gain on sale of assets, net, other expense (income), net and provision for income taxes. 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 is necessary to support our operations and required corporate 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.

The reconciliation of net income to adjusted gross margin is as follows:

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		****	2023		****	2022
Net income	​	$	172,231	​	$	104,998	​	$	44,296
Selling, general and administrative	​		139,121	​		116,639	​		117,184
Depreciation and amortization	​		193,194	​		166,241	​		164,259
Long-lived and other asset impairment	​		10,681	​		12,041	​		21,442
Restructuring charges	​	​	—	​	​	1,775	​	​	—
Debt extinguishment loss	​	​	3,181	​	​	—	​	​	—
Interest expense	​		123,610	​		111,488	​		101,259
Transaction-related costs	​	​	13,249	​	​	—	​	​	—
Gain on sale of assets, net	​	​	(17,887)	​	​	(10,199)	​	​	(40,494)
Other expenses, net	​		1,561	​		1,086	​		1,845
Provision for income taxes	​		60,149	​		37,249	​		16,293
Adjusted gross margin	​	$	699,090	​	$	541,318	​	$	426,084

​

The following table reconciles adjusted gross margin to gross margin, its most directly comparable to GAAP measure:

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		****	2023		****	2022
Total revenues	​	$	1,157,591	​	$	990,337	​	$	845,568
Cost of sales, exclusive of depreciation and amortization	​		(458,501)	​		(449,019)	​		(419,484)
Depreciation and amortization	​		(193,194)	​		(166,241)	​		(164,259)
Gross margin	​		505,896	​		375,077	​		261,825
Depreciation and amortization	​	​	193,194	​	​	166,241	​	​	164,259
Adjusted gross margin	​	$	699,090	​	$	541,318	​	$	426,084

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RESULTS OF OPERATIONS

Summary of Results

Revenue was $1,157.6 million and $990.3 million during the years ended December 31, 2024 and 2023, respectively. The increase in revenue was primarily due to increased revenue from our contract operations business. See “Contract Operations” below for further details.

Net income was $172.2 million and $105.0 million during the years ended December 31, 2024 and 2023, respectively. The increase was primarily driven by higher adjusted gross margin from our contract operations business and higher gain on sale of assets, net. These increases were partially offset by increases in depreciation and amortization, provision for income taxes, SG&A, transaction-related costs, interest expense and debt extinguishment loss.

​

**** Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Contract Operations

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,					​	Increase	​
(dollars in thousands)	​	2024		****	2023		****	(Decrease)	​
Revenue	​	$	980,405	​	$	809,439	​	21	%
Cost of sales, exclusive of depreciation and amortization	​		323,052	​		306,748	​	5	%
Adjusted gross margin	​	$	657,353	​	$	502,691	​	31	%
Adjusted gross margin percentage ^(1)^	​		67	%		62	%	5	%

(1) Defined as adjusted gross margin divided by revenue.

Revenue in our contract operations business increased approximately $105.6 million due to higher rates and an increase in average operating horsepower, as well as an increase of $65.5 million due to the compression units acquired in the TOPS Acquisition.

​

The increase in cost of sales, exclusive of depreciation and amortization, was primarily due to a $17.9 million increase in employee compensation, including the addition of headcount from the TOPS Acquisition, a $4.1 million increase in parts expense, a $1.4 million increase in auto expense and a $1.3 million increase in local and miscellaneous taxes. This increase was partially offset by a decrease of $6.6 million in startup expenses resulting from average horsepower utilization for the fleet at record levels as well as fewer unit stops and a decrease of $2.9 million in lube oil expenses mainly due to lower prices.

​

The increases in adjusted gross margin and adjusted gross margin percentage were mainly driven by revenue growth that outpaced the increase in cost of sales, exclusive of depreciation and amortization.

​

Aftermarket Services

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,					​	Increase	​
(dollars in thousands)	​	2024		****	2023		****	(Decrease)	​
Revenue	​	$	177,186	​	$	180,898		(2)	%
Cost of sales, exclusive of depreciation and amortization	​		135,449	​		142,271		(5)	%
Adjusted gross margin	​	$	41,737	​	$	38,627		8	%
Adjusted gross margin percentage ^(1)^	​		24	%		21	%	3	%

(1) Defined as adjusted gross margin divided by revenue.

Revenue in our aftermarket services business decreased primarily due to lower parts sales, which was partially offset by increased service activity driven by higher customer demand, and an increase in maintenance service contracts. 43

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The increases in adjusted gross margin and adjusted gross margin percentage were mainly due to a reduction in cost of sales, exclusive of depreciation and amortization, due to a difference in the scope, timing and type of services performed, including additional work associated with maintenance service contracts, which outpaced the decline in overall revenue.

Costs and Expenses

​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	****	2024		****	2023
Selling, general and administrative		$	139,121	​	$	116,639
Depreciation and amortization			193,194	​		166,241
Long-lived and other asset impairment			10,681	​		12,041
Restructuring charges	​	​	—	​	​	1,775
Debt extinguishment loss	​	​	3,181	​	​	—
Interest expense			123,610	​		111,488
Transaction-related costs	​	​	13,249	​	​	—
Gain on sale of assets, net	​	​	(17,887)	​	​	(10,199)
Other expense, net	​	​	1,561	​	​	1,086

​

Selling, general and administrative. The increase in SG&A was primarily driven by a $17.2 million increase in employee incentive and other compensation expense, a $2.4 million increase in professional and consulting fees, a $0.8 million increase in network and computer-related costs and a $0.7 million increase in insurance expense.

Depreciation and amortization. The increase in depreciation and amortization was primarily due to fixed assets additions, including $15.8 million depreciation and amortization associated with the compression units and intangible assets acquired in the TOPS Acquisition, and accelerated depreciation associated with certain assets. The increase was partially offset by a decrease in depreciation associated with assets reaching the end of their depreciable lives, the impact of compression and other asset sales, and long-lived asset impairments.

Long–lived and other asset impairment. We periodically review the future deployment of our idle compressors for units that are not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. We also evaluate for impairment our idle units that have been culled from our compression fleet in prior years and are available for sale. During the years ended December 31, 2024 and 2023, we recognized $10.7 million and $12.0 million, respectively, of impairment charges to write down these compressors to their fair value. The decrease in impairment charges on compressors is due to an increase in customer demand and as a result, higher utilization of our equipment. See Note 22 (“Long-Lived Asset and Other Impairments”) for further details on these impairment charges. The following table presents the results of our compression fleet impairment review, as recorded in our contract operations segment:

​	​	​	​	​	​	​
​	​	Year Ended December 31,
(dollars in thousands)	​	2024		****	2023
Idle compressors retired from the active fleet	​	​	95		​	105
Horsepower of idle compressors retired from the active fleet	​	​	66,000		​	53,000
Impairment recorded on idle compressors retired from the active fleet	​	$	10,681	​	$	12,034

​

Restructuring charges. Restructuring charges of $1.8 million during the year ended December 31, 2023 consisted of severance and consulting costs related to our restructuring activities. See Note 23 (“Restructuring Charges”) for further details on these restructuring charges.

Debt extinguishment loss. We incurred $3.2 million of debt extinguishment loss during the year ended December 31, 2024 as a result of the 2027 Notes Tender Offer. 44

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Interest expense. The increase in interest expense was primarily due to a higher average outstanding balance of long-term debt due to the 2032 Notes offering, an increase in the outstanding balance on the Credit Facility and higher interest rates. These increases were partially offset by the 2027 Notes Tender Offer and the write-off of $1.0 million of unamortized deferred financing costs as a result of the Amended and Restated Credit Agreement during the year ended December 31, 2023.

Transaction-related costs. We incurred $13.2 million of professional fees, compensation-related and other costs during the year ended December 31, 2024 related to the TOPS Acquisition. See Note 4 (“Business Transactions”) for further details on these transaction-related costs.

Gain on sale of assets, net. The increase in gain on sale of assets, net was primarily due to gains of $17.6 million on compression asset sales during the year ended December 31, 2024 compared to gains of $7.6 million on compression asset sales during the year ended December 31, 2023.

Other expense, net. The increase in other expense, net was primarily due to a $0.5 million increase in unrealized change in the fair value of our investment in an unconsolidated affiliate recognized during the year ended December 31, 2024, compared to the year ended December 31, 2023.

Provision for Income Taxes

The increase in provision for income taxes was primarily due to the tax effect of the increase in book income and the limitation on executive compensation offset by the benefit from equity-settled long-term incentive compensation during the year ended December 31, 2024, compared to the year ended December 31, 2023.

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,					​	Increase	​
(dollars in thousands)	​	2024		****	2023		****	(Decrease)	​
Provision for income taxes	​	$	60,149	​	$	37,249		61	%
Effective tax rate	​		26	%		26	%	-	%

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our ability to fund operations, finance capital expenditures and pay dividends depends on the levels of our operating cash flows and access to the capital and credit markets. Our primary sources of liquidity are cash flows generated from our operations and our borrowing availability under our Credit Facility. Our cash flow is affected by numerous factors, including prices and demand for our services, oil and natural gas exploration and production spending, conditions in the financial markets and other factors. We have no near-term maturities and believe that our operating cash flows and borrowings under the Credit Facility will be sufficient to meet our future liquidity needs.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt securities in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, may be material, will be upon terms and prices as we may determine and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. 45

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Cash Requirements

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

•	operating expenses, namely employee compensation and benefits, inventory and lube oil purchases;
•	growth capital expenditures;
---	---
•	maintenance capital expenditures;
---	---
•	interest on our outstanding debt obligations;
---	---
•	dividend payments to our stockholders; and
---	---
•	shares repurchased under the Share Repurchase Program and to cover taxes required to be withheld on the vesting date of long-term incentive grants to employees.
---	---

Capital Expenditures

Growth Capital Expenditures. The majority of our growth capital expenditures are related to the acquisition cost of new compressors when our idle equipment cannot be reconfigured to economically fulfill a project’s requirements, and the new compressor is expected to generate economic returns that exceed our cost of capital over the compressor’s expected useful life. In addition to newly–acquired compressors, growth capital expenditures include the upgrading of major components on an existing compression package where the current configuration of the compression package is no longer in demand and the compressor is not likely to return to an operating status without the capital expenditures. These expenditures substantially modify the operating parameters of the compression package such that it can be used in applications for which it previously was not suited.

Growth capital expenditures for the year ended December 31, 2024 were $250.9 million, including TOPS’ specific growth capital expenditures of $69.4 million.  Growth capital expenditures for the year ended December 31, 2023 were $190.3 million.

Maintenance Capital Expenditures. Maintenance capital expenditures are related to major overhauls of significant components of a compression package, such as the engine, electric motor, compressor and cooler, which return the components to a like–new condition, but do not modify the application for which the compression package was designed.

Maintenance capital expenditures were $87.8 million and $92.2 million during the years ended December 31, 2024 and 2023, respectively. The decrease in maintenance capital expenditures from 2023 to 2024 was primarily due to lower make–ready investment, as our fleet’s average horsepower utilization reached record levels, and we experienced fewer stops in 2024 compared to 2023. This decrease was partially offset by an increase in scheduled and unscheduled maintenance activities due to maintenance cycle requirements.

Projected Capital Expenditures. We currently plan to spend approximately $470 million to $535 million on capital expenditures during 2025, primarily consisting of approximately $330 million to $370 million for growth capital expenditures and approximately $105 million to $115 million for maintenance capital expenditures.

Dividends

On January 30, 2025, our Board of Directors declared a quarterly dividend of $0.19 per share of common stock, or approximately $33.5 million, which was paid on February 19, 2025 to stockholders of record at the close of business on February 12, 2025. Any future determinations to pay cash dividends to our stockholders will be at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, and credit and loan agreements in effect at that time and other factors deemed relevant by our Board of Directors. 46

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Contractual Obligations

Our material contractual obligations as of December 31, 2024 consisted of the following:

•	Long–term debt of $2.2 billion, all of which is due in 2027, 2028 and 2032;
•	Estimated interest on our long–term debt of $666.1 million, consisting of annual payments of approximately $147.1 million in 2025 and 2026, approximately $131.7 million in 2027, approximately $70.1 million in 2028, approximately $46.4 million in 2029, and approximately $123.7 million thereafter;
---	---
•	Purchase commitments of $341.1 million, of which $337.5 million is due in 2025, that primarily consist of commitments to purchase fleet assets; and
---	---
•	Operating lease payments of $18.9 million, consisting of annual payments of approximately $4.6 million in 2025, approximately $4.0 million in 2026, approximately $3.0 million in 2027, approximately $2.5 million in 2028 and 2029, and approximately $2.3 million thereafter.
---	---

In addition, we had $19.5 million of unrecognized tax benefits (including discontinued operations) recorded as liabilities related to uncertain tax positions at December 31, 2024, which are uncertain as to if or when such amounts may be settled. We had a liability of $2.7 million recorded for potential penalties and interest (including discontinued operations) related to these unrecognized tax benefits at December 31, 2024, which we are uncertain as to if or when such amounts may be settled.

Sources of Cash

Revolving Credit Facility

During the years ended December 31, 2024 and 2023, our Credit Facility had an average daily balance of $315.0 million and $298.8 million, respectively. The weighted average annual interest rate on the outstanding balance under the Credit Facility was 6.8% and 7.7% at December 31, 2024 and 2023, respectively. As of December 31, 2024, there were $4.0 million of letters of credit outstanding under the Credit Facility and the applicable margin on borrowings outstanding was 2.2%. We amended and restated our Credit Facility on May 16, 2023; see Note 16 (“Long-Term Debt”) to our Financial Statements for details on the Amended and Restated Credit Agreement.

Credit Facility Terms. Our Credit Facility matures on May 16, 2028 (or December 2, 2026 or December 3, 2027, as applicable, if any portion of our 2027 Senior Notes and 2028 Senior Notes, respectively, remain outstanding at such date) and has an aggregate revolving commitment of $1.1 billion. Portions of the Credit Facility, up to $110.0 million, are available for the issuance of swing line loans and $50.0 million is available for the issuance of letters of credit. Subject to certain conditions, including approval by the lenders, we are able to increase the aggregate commitments under the Credit Facility by up to an additional $750.0 million. The Credit Facility borrowing base consists of eligible accounts receivable, inventory and compressors.

Covenants. Our Amended and Restated Credit Agreement requires that we meet certain financial ratios (see Note 16 (“Long-Term Debt”)) and contains various additional covenants including, but not limited to, mandatory prepayments from the net cash proceeds of certain asset transfers, 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 distributions. As of December 31, 2024, we were in compliance with all covenants under our Amended and Restated Credit Agreement.

​

2032 Notes and 2027 Notes Tender Offer

On August 26, 2024, we completed a private offering of $700.0 million aggregate principal amount of 6.625% senior notes due September 2032 and received net proceeds of $690.0 million after deducting issuance costs. In connection with the offering of the 2032 Notes, we completed a concurrent cash tender offer of $202.0 million for our 2027 Notes. See Note 16 (“Long-Term Debt”) for further details. 47

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July 2024 Equity Offering

On July 24, 2024, Archrock sold, pursuant to a public underwriting offering, approximately 12.7 million shares of common stock, including approximately 1.7 million shares of common stock pursuant to an over-allotment option. Archrock received net proceeds of $255.7 million, after deducting underwriting discounts, commissions and offering expenses. See Note 18 (“Stockholders’ Equity”) for further details.

Other Sources of Cash

Asset Sales. We received proceeds of $67.6 million and $72.2 million from asset sales during the years ended December 31, 2024 and 2023, respectively. We typically use the proceeds from these sales to repay borrowings outstanding under our Credit Facility; however, we are not able to estimate the timing of asset sales or the amount of proceeds to be received and as such, we do not rely on asset sale proceeds as a future source of capital.

Cash Flows

Cash flows provided by (used in) each type of activity were as follows:

​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		****	2023
Net cash provided by (used in):	​	​			​
Operating activities	​	$	429,591	​	$	310,187
Investing activities	​		(1,160,063)	​		(232,491)
Financing activities	​	​	733,554	​		(77,924)
Net increase (decrease) in cash and cash equivalents	​	$	3,082	​	$	(228)

​

Operating Activities.

The increase in net cash provided by operating activities was primarily due to increased cash inflows of $161.4 million from adjusted gross margin, excluding deferred revenue recognized in earnings and amortization of freight and mobilization charges, changes of $9.6 million in accounts receivable due to increased cash receipts from customers and of $2.7 million in deferred revenue. These increases were partially offset by changes of $6.1 million in inventory and of $3.7 million in accounts payable and accrued liabilities.

Investing Activities.

The increase in net cash used in investing activities was primarily due to $868.7 million of cash paid in the TOPS Acquisition and a $60.4 million increase in capital expenditures, partially offset by a decrease of $4.8 million in investment in non-consolidated affiliates and a $4.6 million decrease in proceeds from the sale of property, plant and equipment.

Financing Activities.

The change from net cash used in financing activities in 2023 to net cash provided by financing activities in 2024 was primarily due to $700.0 million of proceeds from the issuance of the 2032 Notes, $255.7 million of proceeds from the July 2024 Equity Offering and a $85.5 million increase in net borrowings of long-term debt, partially offset by $202.0 million for the 2027 Notes Tender Offer, a $14.6 million increase in dividends to Archrock shareholders, a $6.3 million increase in debt issuance costs paid, a $4.5 million increase in shares repurchased under the Share Repurchase Program and a $2.7 million increase in taxes paid related to net share settlement of equity awards. 48

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Critical Accounting Estimates

We describe our significant accounting policies more fully in Note 2 (“Basis of Presentation and Significant Accounting Policies”) to our Financial Statements. As disclosed in Note 2, the preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses and related disclosures of contingent assets and liabilities. We evaluate our estimates and accounting policies on an ongoing basis and base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. The results of this process form the basis of our judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and these differences can be material to our financial condition, results of operations and cash flows.

Depreciation

Property, plant and equipment, net, at December 31, 2024 was $3.3 billion and depreciation expense was $185.1 million for the year ended December 31, 2024. Property, plant and equipment are carried at cost and depreciated using the straight–line basis over the estimated useful life of the asset.

Our estimate of useful lives and salvage values are based on assumptions and judgments that reflect both historical experience and expectations regarding future use of our assets, including wear and tear, obsolescence, technical standards, market demand and geographic location. The use of different assumptions and judgments in the calculation of depreciation, especially those involving useful lives, would likely result in significantly different net book values and results of operations.

The estimated useful life of an asset is monitored to determine its appropriateness, especially when business circumstances change. For example, changes in technology, excessive wear and tear, or unanticipated government actions may result in a shorter estimated useful life than originally anticipated. In these cases, we would depreciate the remaining net book value over the new estimated remaining life, thereby increasing depreciation expense per year on a prospective basis. Likewise, if the estimated useful life is increased, the adjustment to the useful life would decrease depreciation expense per year on a prospective basis.

Impairment of Assets

During the year ended December 31, 2024, we recorded long–lived and other asset impairments of $10.7 million.

Impairment Assessments of Property, Plant and Equipment and Identifiable Intangible Assets

We review long–lived assets, which include property, plant and equipment and intangibles assets that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. An impairment loss may exist when the estimated undiscounted cash flows expected from the use of the asset and its eventual disposition are less than its carrying amount. Determining whether the carrying amount of an asset is recoverable requires us to make judgments regarding long-term forecasts of future revenue and costs related to the asset subject to review. These forecasts are uncertain as they require significant assumptions about future market conditions. Significant and unanticipated changes to these assumptions could require a provision for impairment in a future period. Given the nature of these evaluations and their application to specific assets and specific times, it is not possible to reasonably quantify the impact of changes in these assumptions.

Compression Fleet. The fair value of a compressor is estimated on the expected net sale proceeds compared to fleet units we recently sold, a review of other units recently offered for sale by third parties or the estimated component value of the equipment we plan to use. See Note 22 (“Long-Lived and Other Asset Impairment”) and Note 27 (“Fair Value Measurements”) to our Financial Statements for further details of our fleet asset impairments. 49

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Income Taxes

Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We operate in the U.S. and have investments in unconsolidated affiliates that operate in the U.S. and international locations. Significant judgments and estimates are required in determining consolidated income tax expense.

Deferred income taxes arise from temporary differences between the financial statements and the tax basis of assets and liabilities. In evaluating our ability to recover our deferred tax assets, we consider all available positive and negative evidence including scheduled reversals of deferred tax liabilities, projected future taxable income, tax–planning strategies and results of recent operations. In projecting future taxable income, we begin with historical results adjusted for results of discontinued operations and changes in accounting policies and incorporate assumptions, including the amount of future U.S. federal, state, and international pretax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax–planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we use to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative income (loss) before income taxes.

Changes in tax laws and rates could also affect recorded deferred tax assets and liabilities in the future. Aside from the budget reconciliation process currently occurring in Congress, management is not aware of any such changes that would have a material effect on our financial position, results of operations or cash flows. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various state and local jurisdictions.

The accounting standards for income taxes provide that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. We adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the liabilities. Such differences are reflected as increases or decreases to income tax expense in the period in which the new information becomes available.

Recent Accounting Developments

See Note 3 (“Recent Accounting Developments”) to our Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk associated with changes in the variable interest rate of our Credit Facility.

As of December 31, 2024, we had $408.3 million of variable interest rate indebtedness outstanding at a weighted average interest rate of 6.8%.

A 1% increase or decrease in the effective interest rate on the outstanding balance under our Credit Facility at December 31, 2024 would have resulted in an annual increase or decrease in our interest expense of approximately $4.1 million.

Item 8. Financial Statements and Supplementary Data

The information specified by this Item is presented in Part IV, Item 15 of this Form 10–K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None. 50

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Item 9A. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Form 10–K, 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 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 SEC. Based on the evaluation, as of December 31, 2024, 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.

Management’s Annual Report on Internal Control Over Financial Reporting

As required by Exchange Act Rules 13a–15(c) and 15d–15(c), our management, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness as to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on the results of management’s evaluation described above, management concluded that our internal control over financial reporting was effective as of December 31, 2024.

On August 30, 2024, we completed the TOPS Acquisition which was the acquisition of a privately-held company that was not subject to Section 404 of the Sarbanes-Oxley Act. As the TOPS Acquisition occurred during the third quarter of 2024, and TOPS was not previously subject to Section 404 of the Sarbanes-Oxley Act, management concluded there was insufficient time for management to complete its assessment of the internal controls over financial reporting related to TOPS, and, therefore, TOPS’s internal controls over financial reporting were excluded from this report on internal control over financial reporting.

Our management with the participation of the Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting excluding TOPS’ internal controls as of December 31, 2024 (covering approximately 94.3% of the revenue on the Consolidated Statements of Operations for the year ended December 31, 2024 and 70.2% of the total assets on the Consolidated Balance Sheets as of December 31, 2024) based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on its evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.

The effectiveness of internal control over financial reporting as of December 31, 2024 was audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in its report found within this Form 10–K.

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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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Archrock, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Archrock, Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 25, 2025, expressed an unqualified opinion on those financial statements.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, appearing in Item 9A, management excluded from its assessment the internal control over financial reporting at TOPS which was acquired on August 30, 2024, and whose financial statements constitute 29.8% and 5.7% of total assets and revenue, respectively of the consolidated financial statement amounts as of and for the year ended December 31, 2024. Accordingly, our audit did not include the internal control over financial reporting at TOPS.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 52

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

February 25, 2025

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Item 9B. Other Information

Insider Trading Arrangements

During the three months ended December 31, 2024, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by Part III Item 10 of this Form 10-K is incorporated by reference to the sections entitled “Election of Directors,” “Governance” and “Stock Ownership” in the definitive proxy statement related to our 2025 Annual Meeting of Stockholders, which is to be filed with the SEC within 120 days following the end of our 2024 fiscal year.

We have adopted an Insider Trading Policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations and NYSE listing standards. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Form 10-K.

Item 11. Executive Compensation

The information required by Part III Item 11 of this Form 10-K is incorporated by reference to the sections entitled “Governance” and “Compensation Discussion and Analysis” in the definitive proxy statement related to our 2025 Annual Meeting of Stockholders, which is to be filed with the SEC within 120 days following the end of our 2024 fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Portions of the information required in Part III Item 12 of this Form 10-K are incorporated by reference to the section entitled “Stock Ownership” in the definitive proxy statement related to our 2025 Annual Meeting of Stockholders, which is to be filed with the SEC within 120 days following the end of our 2024 fiscal year.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information as of December 31, 2024, with respect to our compensation plans under which our common stock is authorized for issuance, aggregated as follows: 54

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​	​	​	​	​	​	​	​	​	​	​
​	​	Number of Securities	​	​	​	​	​	​	​	​
​	​	to be Issued Upon	​	​	Weighted Average		​	​	Number of Securities	​
​	​	Exercise of	​	​	Exercise Price of		​	​	Remaining Available for	​
​	​	Outstanding Options,	​	​	Outstanding Options,		​	​	Future Issuance Under	​
​	​	Warrants and Rights	​	​	Warrants and Rights		​	​	Equity Compensation Plans	​
​		(a)	​	****	(b)		​	****	(c)	****
Equity compensation plans approved by security holders ^(1)^	​	585,987	^(2)^​	​	$	—	^(3)^​	​	3,961,157	​
Equity compensation plans not approved by security holders ^(4)^	​	—		​	​	—		​	35,399	​
Total	​	585,987		​	​	—		​	3,996,556	​
(1)	Comprised of the 2020 Plan and the ESPP.
---	---
(2)	Comprised of unvested performance–based restricted stock units payable in common stock upon vesting at target performance.
---	---
(3)	Performance–based restricted stock units do not have an exercise price.
---	---
(4)	Comprised of our DSDP. See Note 20 (“Stock-Based Compensation”) to our Financial Statements for further details of our DSDP.
---	---

Item 13. Certain Relationships and Related Transactions and Director Independence

The information required by Part III Item 13 of this Form 10-K is incorporated by reference to the section entitled “Governance” in the definitive proxy statement related to our 2025 Annual Meeting of Stockholders, which is to be filed with the SEC within 120 days following the end of our 2024 fiscal year.

Item 14. Principal Accountant Fees and Services

The information required by Part III Item 14 of this Form 10-K is incorporated by reference to the section entitled “Ratification of the Appointment of the Independent Registered Public Accounting Firm” in the definitive proxy statement related to our 2025 Annual Meeting of Stockholders, which is to be filed with the SEC within 120 days following the end of our 2024 fiscal year.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)	List of Documents filed as a part of this Form 10–K
1.	Financial Statements. The following financial statements are filed as a part of this Form 10-K.
---	---
Report of Independent Registered Public Accounting Firm (PCAOB ID 34)		F–1
---	---	---	---
Consolidated Balance Sheets	​	F–3	​
Consolidated Statements of Operations	​	F–4	​
Consolidated Statements of Comprehensive Income	​	F–5	​
Consolidated Statements of Equity	​	F–6	​
Consolidated Statements of Cash Flows	​	F–7	​
Notes to Consolidated Financial Statements	​	F–8	​

​

2.Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable or the information is set forth in the consolidated financial statements or notes thereto within Item 8 “Financial Statements and Supplementary Data.” 55

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3.Exhibits

Exhibit No.		Description
2.1	​	Separation and Distribution Agreement, dated as of November 3, 2015, by and among Exterran Holdings, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8–K filed on November 5, 2015
2.2	​	Amendment No. 1 to Separation and Distribution Agreement, dated as of December 15, 2015, by and among Archrock, Inc., formerly named Exterran Holdings, Inc., Exterran General Holdings LLC, Exterran Energy Solutions, L.P., Exterran Corporation, AROC Corp., EESLP LP LLC, AROC Services GP LLC, AROC Services LP LLC and Archrock Services, L.P., incorporated by reference to Exhibit 2.3 to the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2015
2.3	​	Agreement and Plan of Merger, dated as of January 1, 2018, by and among Archrock, Inc., Archrock GP LLC, Archrock General Partner, L.P. and Archrock Partners, L.P., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8–K filed on January 2, 2018
2.4	​	Amendment No. 1 to Agreement and Plan of Merger, dated as of January 11, 2018, by and among Archrock, Inc., Archrock GP LLC, Archrock General Partner, L.P., Archrock Partners, L.P. and Amethyst Merger Sub LLC, incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8–K filed on January 16, 2018
2.5#	​	Purchase and Sale Agreement, dated as of July 22, 2024, by and among Archrock ELT LLC, Archrock, Inc., TOPS Pledge1, LLC and TOPS Pledge2, LLC and, solely with respect to Section 6.25 of the Purchase and Sale Agreement, TOPS Holdings, LLC, incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8–K filed on July 22, 2024
3.1	​	Composite Restated Certificate of Incorporation of Archrock, Inc., incorporated by reference to Exhibit 3.3 to the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2015
3.2	​	Fourth Amended and Restated Bylaws of Archrock, Inc. (incorporated by reference to Exhibit 3.1 of Archrock Inc.’s Current Report on Form 8–K filed on July 28, 2023)
4.1	​	Indenture, dated as of March 21, 2019, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8–K filed on March 21, 2019
4.2	​	Indenture, dated as of December 20, 2019, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8–K filed on December 20, 2019
4.3	​	Indenture, dated as of August 26, 2024, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., the guarantors party thereto and Regions Bank, as trustee, incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8–K filed on August 26, 2024
4.4	​	Supplemental Indenture, dated August 26, 2024, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and Computershare Trust Company (as successor in interest to Wells Fargo Bank, National Association), as trustee, incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8–K filed on August 26, 2024
4.5	​	Supplemental Indenture, dated August 26, 2024, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and Computershare Trust Company (as successor in interest to Wells Fargo Bank, National Association), as trustee, incorporated by reference to Exhibit 4.3 of the Registrant’s Current Report on Form 8–K filed on August 26, 2024

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Exhibit No.		Description
4.6	​	Description of Common Stock, incorporated by reference to Exhibit 4.3 of the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2019
10.1†	​	Exterran (now Archrock, Inc.) Employees’ Supplemental Savings Plan, incorporated by reference to Exhibit 10.30 of the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2007
10.2†	​	Summary of Donna A. Henderson Compensation Arrangement, incorporated by reference to Exhibit 10.50 to the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2015
10.3†	​	Summary of Jason Ingersoll Compensation Arrangement, incorporated by reference to Exhibit 10.51 to the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2015
10.4†	​	Form of Compensation Letter applicable to Mr. Childers, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8–K filed on August 4, 2016.
10.5†	​	Form of Indemnification Agreement, incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8–K filed on November 5, 2015
10.6†	​	Exterran Holdings, Inc. (now Archrock, Inc.) Directors’ Stock and Deferral Plan, incorporated by reference to Exhibit 10.16 of the Registrant’s Current Report on Form 8–K filed on August 23, 2007
10.7†	​	First Amendment to Exterran Holdings, Inc. (now Archrock, Inc.) Directors’ Stock and Deferral Plan, incorporated by reference to Exhibit 10.22 of the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2008
10.8†	​	Second Amendment to Exterran Holdings, Inc. (now Archrock, Inc.) Directors’ Stock and Deferral Plan, incorporated by reference to Exhibit 10.16 to the Registrant’s Current Report on Form 8–K filed on November 5, 2015
10.9†	​	Form of Employment Letter applicable to Messrs. Childers and Ingersoll, incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8–K filed on November 5, 2015
10.10†	​	Form of Severance Benefit Agreement applicable to Messrs. Childers and Ingersoll, incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8–K filed on November 5, 2015
10.11†	​	Form of Change of Control Agreement applicable to Messrs. Childers and Ingersoll, incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8–K filed on November 5, 2015
10.12†	​	Archrock, Inc. 2017 Employee Stock Purchase Plan, incorporated by reference to Annex A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed March 16, 2017
10.13†	​	Form of Amendment to Severance Benefit Agreement incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10–Q for the quarter ended June 30, 2017
10.14†	​	Form of Second Amendment to Severance Benefit Agreement, incorporated by reference to Exhibit 10.73 to the Registrant’s Annual Report on Form 10–K for the year ended December 31, 2017
10.15	​	Pledge and Security Agreement, dated as of March 30, 2017, among Archrock Partners Operating LLC and the other Grantors party thereto in favor or JPMorgan Chase Bank, N.A., as Administrative Agent, incorporated by reference to Exhibit 10.2 to Archrock Partners, L.P.’s Current Report on Form 8–K filed on April 5, 2017.
10.16	​	Omnibus Joinder Agreement, dated as of April 26, 2018, by and among Archrock, Inc., Archrock Services, L.P., AROC Corp., AROC Services GP LLC, AROC Services LP LLC, Archrock Services Leasing LLC, Archrock GP LP LLC, and Archrock MLP LP LLC and acknowledged and accepted by JPMorgan Chase Bank, N.A., as the Administrative Agent, incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8–K filed on April 26, 2018	57

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Exhibit No.		Description
10.17	​	Amendment and Supplement to Pledge and Security Agreement dated as of April 26, 2018, by and among Archrock Partners Operating LLC, Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock Partners Leasing LLC, Archrock, Inc., Archrock Services, L.P., AROC Corp., AROC Services GP LLC, AROC Services LP LLC, Archrock Services Leasing LLC, Archrock GP LP LLC, Archrock MLP LP LLC and JPMorgan Chase Bank, N.A., as the Administrative Agent, incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8–K filed on April 26, 2018
10.18†	​	Form of Employment Letter applicable to Mr. Douglas S. Aron, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8–K filed on July 12, 2018
10.19†	​	Form of Change of Control Agreement applicable to Mr. Douglas S. Aron, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8–K filed on July 12, 2018
10.20†	​	Form of Archrock, Inc. Award Notice and Agreement for Restricted Stock, incorporated by reference to Exhibit 10.85 to the Registrant’s Annual Report on Form 10–K filed on February 20, 2019
10.21†	​	Form of Archrock, Inc. Award Notice and Agreement for Performance Units (Cash–Settled), incorporated by reference to Exhibit 10.87 to the Registrant’s Annual Report on Form 10–K filed on February 20, 2019
10.22†	​	Form of Archrock, Inc. Award Notice and Agreement for Performance Units (Stock–Settled), incorporated by reference to Exhibit 10.88 to the Registrant’s Annual Report on Form 10–K filed on February 20, 2019
10.23	​	Purchase Agreement, dated as of March 7, 2019, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and J.P. Morgan Securities LLC, as representative of the initial purchasers named therein, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8–K filed on March 8, 2019
10.24	​	Omnibus Joinder Agreement, dated as of March 21, 2019, by and among Archrock GP LLC, Archrock Partners Corp., Archrock General Partner, L.P. and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8–K filed on March 21, 2019
10.25	​	Purchase Agreement, dated as of December 16, 2019, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and RBC Capital Markets, LLC, as representative of the initial purchasers named therein, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8–K filed on December 17, 2019
10.26†	​	Form of Compensation Letter applicable to Messrs. Childers, Aron, Ingersoll and Thode and Mme. Hildebrandt, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on April 30, 2020
10.27	​	Purchase Agreement, dated as of December 14, 2020, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and RBC Capital Markets, LLC, as representative of the initial purchasers named therein, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on December 15, 2020
10.28†	​	Archrock Deferred Compensation Plan, dated as of October 28, 2021, incorporated by reference to Exhibit 10.41 to Registrant’s Annual Report on Form 10-K filed on February 22, 2023
10.29†	​	Archrock, Inc. 2020 Stock Incentive Plan, incorporated by reference to Annex A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on March 17, 2020
10.30†*	​	Amendment to the Archrock, Inc. 2020 Stock Incentive Plan
10.31†	​	Form of Letter Agreement, incorporated by reference to Exhibit 10.99 of the Registrant’s Annual Report on Form 10–K filed on February 23, 2022	58

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Exhibit No.		Description
10.32†	​	Form of Archrock, Inc. Award Notice and Agreement for Restricted Stock, incorporated by reference to Exhibit 10.100 of the Registrant’s Annual Report on Form 10–K filed on February 23, 2022
10.33†	​	Form of Archrock, Inc. Award Notice and Agreement for Restricted Stock for Non–Employee Directors, incorporated by reference to Exhibit 10.101 of the Registrant’s Annual Report on Form 10–K filed on February 23, 2022
10.34†	​	Form of Archrock, Inc. Award Notice and Agreement for Restricted Stock Units for Non–Employee Directors, incorporated by reference to Exhibit 10.102 of the Registrant’s Annual Report on Form 10–K filed on February 23, 2022
10.35†	​	Form of Archrock, Inc. Award Notice and Agreement for Performance Units (Cash–Settled) , incorporated by reference to Exhibit 10.103 of the Registrant’s Annual Report on Form 10–K filed on February 23, 2022
10.36†	​	Form of Archrock, Inc. Award Notice and Agreement for Performance Units (Stock–Settled) , incorporated by reference to Exhibit 10.104 of the Registrant’s Annual Report on Form 10–K filed on February 23, 2022
10.37†	​	Form of Compensation Letter (incorporated by reference and filed as Exhibit 10.1 to Form 8–K filed on April 30, 2020), incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on June 21, 2021
10.38	​	Amended and Restated Credit Agreement, dated as of May 16, 2023, by and among Archrock, Inc., Archrock Partners Operating LLC, Archrock Services, L.P., the other Loan Parties thereto, the Lenders thereto, and JPMorgan Chase Bank, N.A., as the Administrative Agent, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on May 18, 2023
10.39	​	First Amendment to Amended and Restated Credit Agreement, dated as of August 28, 2024, by and among Archrock, Inc., Archrock Partners Operating LLC, Archrock Services, L.P., the other Loan Parties thereto, the Lenders thereto, and JPMorgan Chase Bank, N.A., as the Administrative Agent, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on August 28, 2024
10.40	​	Retention Incentive Agreement, dated January 25, 2024, by and between Archrock, Inc. and D. Bradley Childers, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on January 26, 2024
10.41*#	​	Sixth Amended and Restated Omnibus Agreement, effective August 30, 2024, by and among Archrock, Inc., AROC Corp., AROC Services GP LLC, AROC Services LP LLC, Archrock Services, L.P., Archrock Services Leasing LLC, Archrock ELT LLC, Total Operations and Production Services, LLC, Archrock Ecotec LLC, Archrock Ionada LLC, Archrock FGC LLC, Archrock GP LLC, Archrock GP LP LLC, Archrock MLP LP LLC, Archrock General Partner, L.P., Archrock Partners Corp., Archrock Partners, L.P., Archrock Partners Operating LLC, Archrock Partners Leasing LLC and Archrock Partners Finance Corp.
10.42	​	Tax Matters Agreement, dated as of November 3, 2015, by and between Exterran Holdings, Inc. (now Archrock, Inc.) and Exterran Corporation, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8–K filed on November 5, 2015
10.43	​	Purchase Agreement, dated as of August 12, 2024, by and among Archrock Partners, L.P., Archrock Partners Finance Corp., Archrock, Inc., the other guarantors party thereto and Wells Fargo Securities, LLC, as representative of the initial purchasers named therein, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on August 13, 2024
10.44	​	Registration Rights and Lock-Up Agreement, dated as of August 30, 2024, by and between Archrock, Inc., TOPS Pledge1, LLC, TOPS Pledge2, LLC and TOPS NewCo, LLC, incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8–K filed on August 30, 2024
19.1*	​	Insider Trading Policy
21.1*	​	List of Subsidiaries of Archrock, Inc.
23.1*	​	Consent of Deloitte & Touche LLP	59

Table of Contents

​

Exhibit No.		Description
31.1*	​	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes–Oxley Act of 2002
31.2*	​	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes–Oxley Act of 2002
32.1**	​	Certification of the Chief Executive Officer 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 pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002
97.1	​	Archrock’s Compensation Recovery Policy, dated effective October 2, 2023, incorporated by reference to Exhibit 97.1 of the Registrant’s Annual Report on Form 10–K filed on February 21, 2024
101.1*	​	Interactive data files pursuant to Rule 405 of Regulation S–T
104.1*	​	Cover page interactive data files pursuant to Rule 406 of Regulation S–T

​

†	Management contract or compensatory plan or arrangement.
*	Filed herewith.
---	---
**	Furnished, not filed.
---	---
#	Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.
---	---

​ 60

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​

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

​

​	Archrock, Inc.
​	​
​	/s/ D. Bradley Childers
​	D. Bradley Childers
​	President and Chief Executive Officer
​	​
​	February 25, 2025

​

​

​

​ 61

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​

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints D. Bradley Childers, Douglas S. Aron, Donna A. Henderson and Stephanie C. Hildebrandt, and each of them, his or her true and lawful attorneys–in–fact and agents, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission granting unto said attorneys–in–fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all said attorneys–in–fact and agents, or any of them, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 25, 2025.

​	​	​
Signature		Title
​	​	​
/s/ D. Bradley Childers	​	President, Chief Executive Officer and Director
D. Bradley Childers	​	(Principal Executive Officer)
​	​	​
/s/ Douglas S. Aron	​	Senior Vice President and Chief Financial Officer
Douglas S. Aron	​	(Principal Financial Officer)
​	​	​
/s/ Donna A. Henderson	​	Vice President and Chief Accounting Officer
Donna A. Henderson	​	(Principal Accounting Officer)
​	​	​
/s/ Anne–Marie N. Ainsworth	​	Director
Anne–Marie N. Ainsworth	​	​
​	​	​
/s/ Gordon T. Hall	​	Director
Gordon T. Hall	​	​
​	​	​
/s/ Frances Powell Hawes	​	Director
Frances Powell Hawes	​	​
​	​	​
/s/ J.W.G. Honeybourne	​	Director
J.W.G. Honeybourne	​	​
​	​	​
/s/ James H. Lytal	​	Director
James H. Lytal	​	​
​	​	​
/s/ Leonard W. Mallett	​	Director
Leonard W. Mallett	​	​
​	​	​
/s/ Jason C. Rebrook	​	Director
Jason C. Rebrook	​	​
​	​	​
/s/ Edmund P. Segner, III	​	Director
Edmund P. Segner, III	​	​

​

​

​ 62

Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Archrock, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Archrock, Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

TOPS ACQUISITION - Refer to Note 4 and 18 to the financial statements.

Critical Audit Matter Description F-1

Table of Contents The Company completed the acquisition of Total Operations and Production Services, LLC (TOPS) for cash consideration of $868.7 million and 6,873,650 shares of common stock with an acquisition date fair value of $139.1 million. Accordingly, the purchase price paid for assets acquired and liabilities assumed was allocated, based on respective fair value, to property, plant and equipment (including compressors) and other intangible assets. The method for determining respective fair value varied depending on the type of asset or liability and involved management making significant estimates related to assumptions such as future cash flows, discount rates, market data, projected revenue, and current market interest rates.

Given the respective fair value determination of assets acquired and liabilities assumed requires management to make significant estimates related to assumptions such as future cash flows, discount rates, market data, projected revenue, and current market interest rates, performing audit procedures to evaluate the reasonableness of these assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management's selection of a weighted average cost of capital, and the fair value of acquired property, plant and equipment and intangible assets for TOPS included the following, among others:

•	We tested the effectiveness of controls over the purchase price allocation, including management's controls over the assumptions used in the valuation of the property, plant and equipment and intangible assets, including estimating the fair value of the acquired property, plant and equipment and intangible assets, determination of the weighted average cost of capital, and reviewing the work of third-party specialists.
•	With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) current market data, (3) cost to replace certain assets, and (4) assumptions used in the discounted cash flows, including testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing our estimates to those used by management.
---	---
•	We assessed the reasonableness of management’s projections of contract revenue by comparing the assumptions used in the projections to projected capital expenditures, historical data, and results from other areas of the audit.
---	---

Our audit procedures also included testing the effectiveness of internal controls over the long-lived asset impairment process, including those over the identification of units to be retired from the active fleet and assessed for impairment.

​

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

February 25, 2025

We have served as the Company’s auditor since 2007

​

​ F-2

Table of Contents

Archrock, Inc.

Consolidated Balance Sheets

(in thousands, except par value and share amounts)

​

​

x

​	​	​	​	​	​	​
​	****	December 31, 2024		****	December 31, 2023
Assets		​			​
Current assets:		​			​
Cash and cash equivalents	​	$	4,420	​	$	1,338
Accounts receivable, net of allowance of $414 and $587, respectively	​		132,478	​		124,069
Inventory	​		89,686	​		81,761
Other current assets	​		6,538	​		5,989
Total current assets	​		233,122	​		213,157
Property, plant and equipment, net	​		3,323,830	​		2,301,982
Operating lease right-of-use assets	​		15,365	​		14,097
Goodwill	​	​	52,155	​	​	—
Intangible assets, net	​		98,271	​		30,182
Contract costs, net	​		37,764	​		37,739
Deferred tax assets	​		2,975	​		3,192
Other assets	​		52,855	​		47,733
Non-current assets of discontinued operations	​		7,868	​		7,868
Total assets	​	$	3,824,205	​	$	2,655,950
​	​	​	​	​	​	​
Liabilities and Stockholders' Equity	​			​
Current liabilities:	​			​
Accounts payable, trade	​	$	57,567	​	$	61,026
Accrued liabilities	​		124,105	​		85,381
Deferred revenue	​		6,932	​		5,736
Total current liabilities	​		188,604	​		152,143
Long-term debt	​		2,198,376	​		1,584,869
Operating lease liabilities	​		12,415	​		12,271
Deferred tax liabilities	​		62,505	​		4,921
Other liabilities	​		30,906	​		22,857
Non-current liabilities of discontinued operations	​		7,868	​		7,868
Total liabilities	​		2,500,674	​		1,784,929
​	​	​	​	​	​	​
Commitments and contingencies (Note 17)	​			​
​	​	​	​	​	​	​
Equity:	​			​
Preferred stock: $0.01 par value per share, 50,000,000 shares authorized, zero issued	​		—	​		—
Common stock: $0.01 par value per share, 250,000,000 shares authorized, 185,350,510 and 164,984,401 shares issued, respectively	​		1,854	​		1,650
Additional paid-in capital	​		3,880,936	​		3,470,576
Accumulated deficit	​		(2,438,074)	​		(2,499,931)
Treasury stock: 10,182,985 and 9,020,454 common shares, at cost, respectively	​		(121,185)	​		(101,274)
Total equity	​		1,323,531	​		871,021
Total liabilities and equity	​	$	3,824,205	​	$	2,655,950

​

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

​

​ F-3

Table of Contents

Archrock, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
​	​	2024			2023			2022
Revenue:	​	​			​			​
Contract operations	​	$	980,405	​	$	809,439	​	$	677,801
Aftermarket services	​		177,186	​		180,898	​		167,767
Total revenue	​		1,157,591	​		990,337	​		845,568
Cost of sales, exclusive of depreciation and amortization	​	​	​	​	​	​	​	​	​
Contract operations	​		323,052	​		306,748	​		278,898
Aftermarket services	​		135,449	​		142,271	​		140,586
Total cost of sales, exclusive of depreciation and amortization	​		458,501	​		449,019	​		419,484
Selling, general and administrative	​		139,121	​		116,639	​		117,184
Depreciation and amortization	​		193,194	​		166,241	​	​	164,259
Long-lived and other asset impairment	​		10,681	​		12,041	​	​	21,442
Restructuring charges	​	​	—	​	​	1,775	​		—
Debt extinguishment loss	​	​	3,181	​	​	—	​	​	—
Interest expense	​		123,610	​		111,488	​		101,259
Transaction-related costs	​	​	13,249	​	​	—	​	​	—
Gain on sale of assets, net	​	​	(17,887)	​	​	(10,199)	​	​	(40,494)
Other expenses, net	​		1,561	​		1,086	​		1,845
Income before income taxes	​		232,380	​		142,247	​		60,589
Provision for income taxes	​		60,149	​		37,249	​		16,293
Net income	​	$	172,231	​	$	104,998	​	$	44,296
​	​	​	​	​	​	​	​	​	​
Basic and diluted earnings per common share	​	$	1.05	​	$	0.67	​	$	0.28
​	​	​	​	​	​	​	​	​	​
Weighted-average common shares outstanding:	​			​			​
Basic	​		162,037	​		154,126	​		153,281
Diluted	​		162,375	​		154,344	​		153,410

​

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

​ F-4

Table of Contents

Archrock, Inc.

Consolidated Statements of Comprehensive Income

(in thousands, except share amounts)

​

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	Year Ended December 31,
​		​	2024		****	2023		****	2022
Net income	​	​	$	172,231		$	104,998		$	44,296
Other comprehensive income, net of tax:	​	​			​			​
Interest rate swap gain, net of reclassifications to earnings	​	​		—	​		—	​		574
Amortization of dedesignated interest rate swap	​	​		—	​		—	​		410
Total other comprehensive income, net of tax	​	​		—	​		—	​		984
Comprehensive income	​	​	$	172,231	​	$	104,998	​	$	45,280

​

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

​

​ F-5

Table of Contents

Archrock, Inc.

Consolidated Statements of Equity

(in thousands, except share amounts)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​		​	Accumulated		​	​	​	​	​	​	​	​
​	​	​				​	Additional		​	​		​	Other		​	​				​	​	​
​	​	Common Stock				​	Paid-in		​	Accumulated		​	Comprehensive		​	Treasury Stock				​	​	​
​		Amount		​	Shares		Capital			Deficit			Income (Loss)			Amount		​	Shares		Total
Balance at December 31, 2021	​	$	1,615	​	161,482,852		$	3,440,059	​	$	(2,463,114)		$	(984)	​	$	(86,138)	​	(7,417,401)	​	$	891,438
Shares withheld related to net settlement of equity awards	​		—	​	—	​		—	​		—	​		—	​		(2,447)	​	(283,024)	​		(2,447)
Cash dividends ($0.58 per common share)	​		—	​	​	​	​	—	​		(90,315)	​	​	—	​		—	​	—	​		(90,315)
Shares issued under ESPP	​		1	​	92,469	​	​	632	​		—	​		—	​		—	​	—	​		633
Stock-based compensation, net of forfeitures	​		14	​	1,416,672	​	​	11,914	​		—	​		—	​		—	​	(110,123)	​		11,928
Net proceeds from issuance of common stock	​	​	4	​	447,020	​	​	4,172	​	​	—	​	​	—	​	​	—	​	—	​		4,176
Comprehensive income	​		​	​	​	​	​	​	​		​	​			​			​		​		—
Net income	​		—	​	—	​	​	—	​		44,296	​		—	​		—	​	—	​		44,296
Other comprehensive income	​	​	—	​	—	​	​	—	​	​	​	​	​	984	​	​	—	​	—	​		984
Balance at December 31, 2022	​	$	1,634	​	163,439,013		$	3,456,777	​	$	(2,509,133)		$	—	​	$	(88,585)	​	(7,810,548)	​	$	860,693
Shares repurchased	​		—	​	—	​	​	—	​	​	—	​	​	—	​	​	(8,860)	​	(750,374)	​		(8,860)
Shares withheld related to net settlement of equity awards	​	​	—	​	—	​		—	​		—	​		—	​		(3,829)	​	(388,128)	​		(3,829)
Cash dividends ($0.61 per common share)	​	​	—	​	​	​	​	—	​		(95,796)	​	​	—	​		—	​	—	​	​	(95,796)
Shares issued under ESPP	​	​	1	​	82,359	​	​	816	​		—	​		—	​		—	​	—	​	​	817
Stock-based compensation, net of forfeitures	​	​	15	​	1,463,029	​	​	12,983	​		—	​		—	​		—	​	(71,404)	​	​	12,998
Net proceeds from issuance of common stock	​	​	—	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	—	​		—
Comprehensive income	​	​	​	​	​	​	​	​	​		​	​			​			​		​		—
Net income	​	​	—	​	—	​	​	—	​		104,998	​		—	​		—	​	—	​		104,998
Balance at December 31, 2023	​	$	1,650	​	164,984,401		$	3,470,576	​	$	(2,499,931)		$	—	​	$	(101,274)	​	(9,020,454)	​	$	871,021
Shares repurchased	​	​	—	​	—	​	​	—	​	​	—	​	​	—	​	​	(13,337)	​	(732,826)	​	​	(13,337)
Shares withheld related to net settlement of equity awards	​		—	​	—	​		—	​		—	​		—	​		(6,574)	​	(392,177)	​		(6,574)
Cash dividends ($0.67 per common share)	​	​	—	​	​	​	​	—	​		(110,374)	​	​	—	​		—	​	—	​		(110,374)
Shares issued under ESPP	​	​	—	​	65,824	​	​	1,117	​		—	​		—	​		—	​	—	​		1,117
Stock-based compensation, net of forfeitures	​	​	8	​	776,635	​	​	14,638	​		—	​		—	​		—	​	(37,528)	​		14,646
Net proceeds from issuance of common stock	​	​	127	​	12,650,000	​	​	255,620	​	​	—	​	​	—	​	​	—	​	—	​	​	255,747
Shares issued for TOPS Acquisition	​	​	69	​	6,873,650	​	​	138,985	​	​	—	​	​	—	​	​	—	​	—	​	​	139,054
Comprehensive income	​	​	​	​	​	​	​	​	​		​	​			​			​		​		—
Net income	​	​	—	​	—	​	​	—	​		172,231	​		—	​		—	​	—	​		172,231
Balance at December 31, 2024	​	$	1,854	​	185,350,510		$	3,880,936	​	$	(2,438,074)		$	—	​	$	(121,185)	​	(10,182,985)	​	$	1,323,531

​

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

​ F-6

Table of Contents

Archrock, Inc.

Consolidated Statements of Cash Flows

(in thousands)

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
​	​	2024			2023			2022
Cash flows from operating activities:	​	​		​	​		​	​
Net income	​	$	172,231	​	$	104,998	​	$	44,296
Adjustments to reconcile net income to net cash provided by operating activities:	​			​			​
Depreciation and amortization	​		193,194	​		166,241	​		164,259
Long-lived and other asset impairment	​		10,681	​		12,041	​		21,442
Non-cash restructuring charges	​	​	—	​	​	221	​	​	—
Unrealized change in fair value of investment in unconsolidated affiliate	​	​	1,484	​	​	973	​	​	1,864
Inventory write-downs	​		550	​		545	​		1,640
Amortization of operating lease right-of-use assets	​	​	3,852	​	​	3,319	​	​	3,206
Amortization of deferred financing costs	​	​	5,072	​	​	5,729	​	​	5,152
Amortization of debt premium	​	​	(2,006)	​	​	(2,006)	​	​	(2,006)
Amortization of capitalized implementation costs	​	​	3,009	​	​	2,624	​	​	1,984
Amortization of dedesignated interest rate swap	​	​	—	​	​	—	​	​	410
Interest rate swaps	​		—	​		—	​		631
Debt extinguishment loss	​	​	3,181	​	​	—	​	​	—
Stock-based compensation expense	​		14,646	​		12,998	​		11,928
Provision for credit losses	​		381	​		224	​		206
Gain on sale of assets, net	​		(17,887)	​		(10,199)	​		(12,396)
Gain on sale of business	​	​	—	​	​	—	​	​	(28,098)
Deferred income tax provision	​		58,090	​		35,658	​		15,229
Amortization of contract costs	​	​	23,877	​	​	21,289	​	​	19,162
Deferred revenue recognized in earnings	​	​	(15,001)	​	​	(16,464)	​	​	(20,956)
Changes in operating assets and liabilities:	​		​	​		​	​		​
Accounts receivable, net	​	​	524	​	​	(9,123)	​	​	(19,971)
Inventory	​	​	(1,920)	​	​	4,189	​	​	(10,520)
Other assets	​	​	(2,537)	​	​	(1,895)	​	​	(2,653)
Contract costs	​	​	(23,902)	​	​	(24,292)	​	​	(29,575)
Accounts payable and other liabilities	​	​	(15,850)	​	​	(12,166)	​	​	13,529
Deferred revenue	​	​	18,052	​	​	15,386	​	​	24,642
Other	​	​	(130)	​	​	(103)	​	​	45
Net cash provided by operating activities	​		429,591	​		310,187	​		203,450
​	​	​	​	​	​	​	​	​	​
Cash flows from investing activities:	​			​			​
Capital expenditures	​		(359,032)	​		(298,632)	​		(239,867)
Proceeds from sale of business	​	​	—	​	​	—	​	​	99,611
Proceeds from sale of property, equipment and other assets	​		67,591	​		72,206	​		20,654
Proceeds from insurance and other settlements	​	​	45	​	​	1,222	​	​	3,353
Cash paid in TOPS Acquisition, net of cash acquired	​	​	(866,170)	​	​	—	​	​	—
Investments in unconsolidated entities	​	​	(2,497)	​	​	(7,287)	​	​	(14,667)
Net cash used in investing activities	​		(1,160,063)	​		(232,491)	​		(130,916)
​	​	​	​	​	​	​	​	​	​
Cash flows from financing activities:	​			​			​
Borrowings of long-term debt	​		1,429,500	​		802,825	​		826,733
Repayments of long-term debt	​		(1,308,200)	​		(767,050)	​		(809,983)
Proceeds from 2032 Notes offering	​	​	700,000	​	​	—	​	​	—
Partial repayment of 2027 Notes	​	​	(201,987)	​	​	—	​	​	—
Payments of debt issuance costs	​		(12,338)	​		(6,031)	​		—
Payments for settlement of interest rate swaps that include financing elements	​		—	​		—	​		(1,334)
Dividends paid to stockholders	​		(110,374)	​		(95,796)	​		(90,315)
Repurchases of common stock	​	​	(13,337)	​	​	(8,860)	​	​	—
Taxes paid related to net share settlement of equity awards	​	​	(6,574)	​	​	(3,829)	​	​	(2,447)
Net proceeds from issuance of common stock	​	​	255,747	​	​	—	​	​	4,176
Proceeds from stock issued under ESPP	​		1,117	​		817	​		633
Net cash provided by (used in) financing activities	​		733,554	​		(77,924)	​		(72,537)
Net increase (decrease) in cash and cash equivalents	​		3,082	​		(228)	​		(3)
Cash and cash equivalents, beginning of period	​		1,338	​		1,566	​		1,569
Cash and cash equivalents, end of period	​	$	4,420	​	$	1,338	​	$	1,566
​	​	​	​	​	​	​	​	​	​
Supplemental disclosure of cash flow information:	​			​			​
Interest paid	​	$	120,544	​	$	107,765	​	$	98,406
Supplemental disclosure of non-cash investing transactions:	​	​	​	​	​	​	​	​	​
Accrued capital expenditures	​	$	19,742	​	$	25,689	​	$	9,899
Issuance of Archrock common stock pursuant to TOPS Acquisition	​	​	139,054	​	​	—	​	​	—

​

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

​

​ F-7

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ARCHROCK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

​

1. Description of Business

We are an energy infrastructure company with a primary focus on midstream natural gas compression. We are a premier provider of natural gas compression services, in terms of total compression fleet horsepower, to customers in the energy industry throughout the U.S., and a leading supplier of aftermarket services to customers that own compression equipment in the U.S. We operate in two business segments: contract operations and aftermarket services. Our predominant segment, contract operations, primarily includes designing, sourcing, owning, installing, operating, servicing, repairing and maintaining our owned fleet of natural gas compression equipment to provide natural gas compression services to our customers. In our aftermarket services business, we sell parts and components and provide operations, maintenance, overhaul and reconfiguration services to customers who own compression equipment.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

Our Financial Statements include the accounts of Archrock and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Our Financial Statements are prepared in accordance with GAAP and the rules and regulations of the SEC. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures of contingent assets and liabilities. Because of the inherent uncertainties in this process, actual future results could differ from those expected as of the reporting date. Management believes that the estimates and assumptions used are reasonable.

Except as otherwise noted, any capitalized term used but not defined in our Financial Statements shall have the same meaning provided in our 2024 Form 10-K.

Significant Accounting Policies

Cash and Cash Equivalents

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Credit Losses

The contractual life of our trade receivables is primarily 30 days based on the payment terms specified in the contract. Contract operations services are generally billed monthly at the beginning of the month in which service is being provided. Aftermarket services billings typically occur when parts are delivered or service is completed. Due to the short–term nature of our trade accounts receivable, we consider the amortized cost to be the same as the carrying value amount of the receivable, excluding the allowance for credit losses.

We recognize an allowance for credit losses when a receivable is recorded, even when the risk of loss is remote. We utilize an aging schedule to determine our allowance for credit losses, and measure expected credit losses on a collective (pool) basis when similar risk characteristics exist. We rely primarily on ratings assigned by external rating agencies and credit monitoring services to assess credit risk and aggregate customers first by low, medium or high-risk asset pools, and then by delinquency status. We also consider the internal risk associated with geographic location and the services we provide to the customer when determining asset pools. If a customer does not share similar risk characteristics with other customers, we evaluate the customer’s outstanding trade receivables for expected credit losses on an individual basis. Each reporting period, we reassess our customers’ risk profiles and determine the appropriate asset pool classification, or perform individual assessments of expected credit losses, based on the customers’ risk characteristics at the reporting date. F-8

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Loss rates are separately determined for each asset pool based on the length of time a trade receivable has been outstanding. We analyze two years of internal historical loss data, including the effects of prepayments, write–offs and subsequent recoveries, to determine our historical loss experience. Our historical loss information is a relevant data point for estimating credit losses, as the data closely aligns with trade receivables due from our customers. Ratings assigned by external rating agencies and credit monitoring services consider past performance and forecasts of future economic conditions in assessing credit risk.

Inventory

Inventory primarily consists of parts used for maintenance of natural gas compression equipment. Inventory is stated at the lower of cost and net realizable value using the average cost method.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost and depreciated using the straight–line method over their estimated useful lives as follows:

​

​	​	​
Compression equipment, facilities and other fleet assets		3 to 30 years
Buildings	​	20 to 35 years
Transportation and shop equipment	​	3 to 10 years
Computer hardware and software	​	3 to 5 years
Other	​	3 to 10 years

​

Major improvements that extend the useful life of an asset are capitalized and depreciated over the estimated useful life of the major improvement, up to seven years. Repairs and maintenance are expensed as incurred.

Goodwill

The goodwill acquired in connection with the TOPS Acquisition represents the excess of consideration transferred over the fair value of the assets and liabilities acquired. We review the carrying amount of our goodwill in the fourth quarter of every year, or whenever indicators of potential impairment exist, to determine if the carrying amount of a reporting unit exceeds its fair value, including the applicable goodwill. We perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is impaired. If the fair value is more-likely-than-not impaired, we perform a quantitative impairment test to identify impairment and measure the amount of impairment loss to be recognized, if any.

Our qualitative assessment includes consideration of various events and circumstances and their potential impact to a reporting unit’s fair value, including macroeconomic and industry conditions such as a deterioration in our operating environment and limitations on access to capital and other developments in the equity and credit markets, cost factors that could have a negative effect on earnings and cash flows, relevant entity-specific and reporting unit-specific events and overall financial performance such as declining earnings or cash flows or a sustained decrease in share price.

The quantitative impairment test (i) allocates goodwill and our other assets and liabilities to our reporting units, contract operations and aftermarket services, (ii) calculates the fair value of the reporting units and (iii) determines the impairment loss, if any, as the amount by which the carrying amount of the reporting unit exceeds its fair value (limited to the total amount of goodwill allocated to that reporting unit). All of the goodwill recognized in the TOPS Acquisition was attributed to our contract operations reporting unit. F-9

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Leases

We determine if an arrangement is a lease, or contains a lease, at inception and record the leases in our consolidated financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor. We recognize ROU assets and operating lease liabilities based on the present value of lease payments over the lease term. As the discount rate implicit in the lease is rarely readily determinable, we estimate our incremental borrowing rate using information available at commencement date in determining the present value of the lease payments.

The lease term includes options to extend when we are reasonably certain to exercise the option. Short–term leases, those with an initial term of 12 months or less, are not recorded on the balance sheet. Variable costs such as our proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. Operating lease expense for lease payments is recognized on a straight–line basis over the term of the lease.

Our facility leases, of which we are the lessee, contain lease and nonlease components, which we have elected to account for as a single lease component, as the nonlease components are not significant to the total consideration of the contract and separating the nonlease component would have no effect on lease classification.

For contract operations service agreements in which we are a lessor, we do not account for these agreements as operating leases, as the services nonlease component is predominant over the compression package lease component.

Impairment of Long–Lived Assets

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 compressors from our active fleet, indicate that the carrying amount of an asset may not be recoverable. An impairment loss exists when estimated undiscounted cash flows expected from the use of the asset and its eventual disposition are less than its carrying amount. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its fair value.

Internal–Use Software

Certain of our contracts have been deemed to be hosting arrangements that are service contracts, including those related to the cloud migration of our ERP system and cloud services for our mobile workforce, telematics and inventory management tools. Certain costs incurred for the implementation of a hosting arrangement that is a service contract are capitalized and amortized on a straight–line basis over the term of the respective contract. Amortization begins for each component of the hosting arrangement when the component becomes ready for its intended use.

Capitalized implementation costs are presented in other assets, the same line item in our consolidated balance sheets that a prepayment of the fees for the associated hosting arrangement would be presented. Amortization expense of the capitalized implementation costs is presented in SG&A, the same line item in our consolidated statements of operations as the expense for fees for the associated hosting arrangement.

Revenue Recognition

We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we are entitled to receive in exchange for those goods or services. Sales and usage–based taxes that are collected from the customer are excluded from revenue. F-10

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Contract Operations

Natural Gas Compression Services. Natural gas compression services are generally satisfied over time, as the customer simultaneously receives and consumes the benefits provided by these services. Our performance obligation is a series in which the unit of service is one month, as the customer receives substantially the same benefit each month from the services regardless of the type of service activity performed, which may vary. If the transaction price is based on a fixed fee, revenue is recognized monthly on a straight–line basis over the period that we are providing services to the customer. Amounts invoiced to customers for costs associated with moving our compression assets to a customer site are also included in the transaction price and are amortized over the initial contract term. We do not consider the effects of the time value of money, as the expected time between the transfer of services and payment for such services is less than one year.

Variable consideration exists if customers are billed at a lesser standby rate when a unit is not running. We recognize revenue for such variable consideration monthly, as the invoice corresponds directly to the value transferred to the customer based on our performance completed to date. The rate for standby service is lower to reflect the decrease in costs and effort required to provide standby service when a unit is not running.

Billable Maintenance Service. We perform billable maintenance service on our natural gas compression equipment at the customer’s request on an as–needed basis. The performance obligation is satisfied, and revenue is recognized at the agreed–upon transaction price at the point in time when service is complete and the customer has accepted the work performed and can obtain the remaining benefits of the service that the unit will provide.

Aftermarket Services

OTC Parts and Components Sales. For sales of OTC parts and components, the performance obligation is generally satisfied at the point in time when delivery takes place, and the customer obtains control of the part or component. The transaction price is the fixed sales price for the part stated in the contract. Revenue is recognized upon delivery, as we have a present right to payment and the customer has legal title.

Maintenance, Overhaul and Reconfiguration Services. For our service activities, the performance obligation is satisfied over time, as the work performed enhances the customer–controlled asset and another entity would not have to substantially re–perform the work we completed if they were to fulfill the remaining performance obligation. The transaction price may be a fixed monthly service fee, a fixed quoted fee or entirely variable, calculated on a time and materials basis.

For service provided based on a fixed monthly fee, the performance obligation is a series in which the unit of service is one month. The customer receives substantially the same benefit each month from the service, regardless of the type of service activity performed, which may vary. As the progress towards satisfaction of the performance obligation is measured based on the passage of time, revenue is recognized monthly based on the fixed fee provided for in the contract.

For service provided based on a quoted fixed fee, progress towards satisfaction of the performance obligation is measured using an input method based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue each reporting period is determined by multiplying the transaction price by the ratio of actual costs incurred to date to total estimated costs expected for the service. Significant judgment is involved in the estimation of the progress to completion. Any adjustments to the measure of the progress to completion are accounted for on a prospective basis. Changes to the scope of service are recognized as an adjustment to the transaction price in the period in which the change occurs.

Service provided based on time and materials is generally short–term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. We apply an estimated adjusted gross margin percentage, which is fixed based on historical time and materials–based service, to actual costs incurred. We evaluate the estimated adjusted gross margin percentage at the end of each reporting period and adjust the transaction price as appropriate. F-11

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Contract Assets and Liabilities

We recognize a contract asset when we have the right to consideration in exchange for goods or services transferred to a customer when the right is conditioned on something other than the passage of time. We recognize a contract liability when we have an obligation to transfer goods or services to a customer for which we have already received consideration.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period of the enactment date.

We record net deferred tax assets to the extent we believe these assets will more-likely-than-not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax–planning strategies and results of recent operations. If a valuation allowance was previously recorded and we subsequently determined we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax assets’ valuation allowance, which would reduce the provision for income taxes.

We record uncertain tax positions in accordance with the accounting standard on income taxes under a two–step process whereby (1) we determine whether it is more-likely-than-not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more–likely–than–not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and trade accounts receivable. Our temporary cash investments have a zero–loss expectation because we maintain minimal balances in our cash investment accounts and have no history of loss. Trade accounts receivable are due from companies of varying size engaged principally in oil and natural gas activities throughout the U.S; therefore, our customers may be similarly affected by changes in economic and other conditions within the industry. We perform periodic evaluations of our customers’ financial condition, including monitoring our customers’ payment history and current credit worthiness to manage this risk. We generally do not obtain collateral for trade accounts receivables, but we may require payment in advance. Payment terms are on a short–term basis and in accordance with industry practice. We consider this credit risk to be limited due to these companies’ financial resources, the nature of the products and services we provide and the terms of our customer agreements.

During the year ended December 31, 2024, one customer accounted for $121.4 million, or more than 10% of our consolidated revenue, and another customer accounted for more than 13% of our consolidated trade accounts receivable, both primarily related to our contract operations segment.

​ F-12

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

3. Recent Accounting Developments

Accounting Standards Updates Implemented

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosures of significant expenses for each reportable segment, as well as certain other disclosures to help investors understand how the CODM evaluates segment expenses and operating results. ASU 2023-07 allows disclosure of multiple measures of segment profitability if those measures are used to allocate resources and assess performance. We adopted ASU 2023-07 retrospectively during the year ended December 31, 2024. See Note 30 (“Segments”) for further details.

Accounting Standards Updates Not Yet Implemented

Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require significant additional disclosures, primarily focused on the disclosure of income taxes paid and the rate reconciliation table. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025, and should be applied on a prospective basis, with a retrospective option. Early adoption is permitted. We are assessing and modifying our systems and processes to comply with our future adoption of ASU 2023-09.

​

Business Combinations – Joint Venture Formations

In August 2023, the FASB issued ASU 2023-05, to reduce diversity in practice and provide decision-useful information to a joint venture’s investors by requiring that a joint venture apply a new basis of accounting upon formation. By applying a new basis of accounting, a joint venture will recognize and initially measure its assets and liabilities at fair value, with exceptions to fair value measurement that are consistent with the business combinations guidance, on the date of formation. ASU 2023-05 is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. Additionally, a joint venture that was formed before January 1, 2025, may elect to apply the amendments retrospectively if it has sufficient information to do so. Early adoption is permitted in any interim or annual period in which financial statements have not been issued or been made available for issuance, either prospectively or retrospectively. We expect that the adoption of ASU 2023-05 will have no impact on our consolidated financial statements.

Disaggregation of Income Statement Expenses

​

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40), which will require tabular disclosures about certain expenses included in the expense captions presented on the face of the income statement, as well as disclosures about selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Entities are required to adopt ASU 2024-03 prospectively with the option for retrospective application. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

​ F-13

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

4. Business Transactions

TOPS Acquisition

On August 30, 2024, we completed the TOPS Acquisition, whereby we acquired all of the issued and outstanding equity interests in TOPS, including a fleet of approximately 580,000 horsepower, including approximately 530,000 operating horsepower, for aggregate consideration consisting of $868.7 million in cash and approximately 6.9 million shares of common stock with an acquisition date fair value of $139.1 million. The cash portion of the purchase price was funded with proceeds from the July 2024 Equity Offering, the 2032 Notes offering and borrowings under the Credit Facility. In accordance with the terms of the purchase and sale agreement, customary post-closing adjustments were made during the fourth quarter of 2024, resulting in a $0.4 million reduction to the purchase price.

The TOPS Acquisition was accounted for using the acquisition method of accounting, which requires, among other things, assets acquired and liabilities assumed to be recorded at their fair value on the acquisition date. The excess of the consideration transferred over those fair values was recorded as goodwill.

The following table summarizes the purchase price allocation based on the fair values of the assets acquired and liabilities assumed as of the acquisition date:

​	​	​	​
(in thousands)		​	​
Cash		$	2,498
Accounts receivable	​	​	9,737
Inventory	​	​	7,346
Other current assets	​	​	495
Property, plant and equipment	​	​	912,877
Operating lease right-of-use assets	​	​	1,424
Goodwill	​	​	52,155
Intangible assets	​	​	76,228
Other assets	​	​	4,032
Accounts payable, trade	​	​	(48,946)
Accrued liabilities	​	​	(4,667)
Operating lease liabilities	​	​	(1,424)
Other liabilities	​	​	(4,032)
Purchase price	​	$	1,007,723

​

The valuation methodologies and significant inputs for fair value measurements are detailed by significant asset class below. The fair value measurements for property, plant and equipment and intangible assets are based on significant inputs that are not observable in the market and therefore represent Level 3 measurements.

​

Property, Plant and Equipment

​

Property, plant and equipment is primarily comprised of electric motor drive compression equipment that will depreciate on a straight-line basis over an estimated average remaining useful life of 25 years. The fair value of the property, plant and equipment was determined using both the cost and market approach. For most of the compression equipment, we estimated the replacement cost using the direct cost method by evaluating recent purchases of similar assets or published data, then adjusting the replacement cost for physical deterioration and functional and economic obsolescence, as applicable. For certain compression equipment, we then considered the market approach by comparing our estimated dollar per horsepower to market comparables and market participant assumptions and adjusted as necessary.

​

Other fixed assets were valued using the indirect cost method, whereby we applied asset-specific trend information using published indexes to calculate the estimated replacement cost of assets that were identified to be reflected at historical cost. Other assets were depreciated based on published normal useful life estimates and prior experience with similar assets. F-14

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Intangible Assets

​

The intangible assets consist of customer relationships and trade names that have estimated useful lives of 12 years and five years, respectively. The amount of intangible assets and their associated useful life were determined based on the period over which the assets are expected to contribute directly or indirectly to our future cash flows.

​

The fair value of the identifiable intangible assets related to customer relationships was determined using the multi-period excess earnings method, which is a specific application of the discounted cash flow method, an income approach, whereby we estimated and then discounted the future cash flows of the intangible asset by adjusting overall business revenue for attrition, obsolescence, cost of sales, operating expenses, taxes and the required returns attributable to other contributory assets acquired. Significant estimates made in arriving at expected future cash flows included our expected customer attrition rate and the amount of earnings attributable to the assets. To discount the estimated future cash flows, we utilized a discount rate that was at a premium to our WACC to reflect the less liquid nature of the customer relationships relative to the tangible assets acquired.

​

It is generally accepted that the fair market value of a trade name is best measured by the relief-from-royalty method under the income approach, whereby we calculated the royalty savings by estimating a reasonable royalty rate that a third party would negotiate in a licensing agreement expressed as a percentage of total revenue involving a trade name. The revenue related to the trade name was multiplied by the selected royalty rate over the estimated expected useful life of the trade name to arrive at the royalty savings. The royalty savings were tax effected and discounted to present value using a discount rate commensurate with the risk profile of the trade name relative to our WACC and the return on the other acquired assets.

​

Goodwill

​

The amount of goodwill resulting from the TOPS Acquisition is attributable to the expansion of our services in the Permian Basin, where we currently operate, and was allocated to our contract operations segment. The goodwill recorded is considered to have an indefinite life and will be reviewed annually for impairment or more frequently if indicators of potential impairment exist. All of the goodwill recorded for the TOPS Acquisition is expected to be deductible for U.S. federal income tax purposes.

​

Tax Contingency and Indemnification Asset

We recorded a non-income tax based contingency of $4.3 million and a corresponding indemnification asset of $4.3 million based on facts existing on the acquisition date. The tax contingency arose from pre-acquisition activities of TOPS. As part of the acquisition, the sellers agreed to indemnify us for certain tax contingencies up to $21.6 million as of the acquisition date. Dependent upon facts and circumstances, the sellers’ indemnification obligation may be reduced over a period of five years from the acquisition date but may also be extended until the resolution of claims timely submitted to the sellers.

Results of Operations

The results of operations attributable to the TOPS Acquisition have been included in our consolidated financial statements as part of our contract operations segment since the acquisition date. Revenue attributable to the assets acquired from the acquisition date through December 31, 2024 was $65.5 million. We are unable to provide earnings attributable to the assets and liabilities acquired since the acquisition date, as we do not prepare full stand-alone earnings reports for those assets and liabilities.

​

Transaction-Related Costs

​

We recorded $13.2 million of transaction-related costs in our consolidated statements of operations during the year ended December 31, 2024. F-15

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table presents transaction-related cost incurred by cost type:

​

​	​	​	​
​	​	Year ended
(in thousands)	​	December 31, 2024
Professional fees ^(1)^	​	$	11,387
Compensation-related costs ^(2)^	​	​	1,553
Other costs	​	​	309
Total transaction-related costs	​	$	13,249
(1)	Professional fees include legal, advisory, consulting and other fees.
---	---
(2)	Compensation-related costs include amounts related to employee retention and other compensation related arrangements associated with the acquisition. Payments are due and payable at various times up to and including the two-year anniversary of the TOPS Acquisition.
---	---

​

Unaudited Pro Forma Financial Information

​

The unaudited pro forma financial information for the years ended December 31, 2024 and 2023 was derived by adjusting our historical financial statements in order to give effect to the assets and liabilities acquired in the TOPS Acquisition. The TOPS Acquisition is presented in this unaudited pro forma financial information as though the acquisition occurred as of January 1, 2023, and reflects the following:

​

●	the effects of the employee retention and other compensation-related arrangements associated with the TOPS Acquisition;

​

●	the application of our accounting policies and adjusting the results of TOPS to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant, and equipment, and intangible assets had been applied from January 1, 2023;

​

●	the interest expense resulting from the 2032 Notes, the 2027 Notes Tender Offer, and the First Amendment to the Amended and Restated Credit Agreement;

​

●	the exclusion of $11.4 million of nonrecurring financial advisory, legal, audit and other professional fees incurred related to the acquisition and recorded to transaction-related costs in our consolidated statements of operations during the year ended December 31, 2024, respectively. For the year ended December 31, 2023, pro forma earnings were adjusted to reflect these charges; and

​

●	the income tax effects of the adjustments based on the estimated blended statutory tax rate of 23%.

The unaudited 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.

​

​	​	​	​	​	​	​
​	​	Year Ended
​	​	December 31,
(in thousands)		2024			2023
Revenue	​	$	1,266,659	​	$	1,099,080
Net income attributable to Archrock stockholders	​	​	191,434	​	​	78,554

​

​

5. Dispositions

During 2022, we completed sales of certain contract operations customer service agreements and approximately 770 compressors, comprising approximately 172,000 horsepower, used to provide compression services under those agreements, as well as other assets used to support the operations. The sale constituted a business, and accordingly, we allocated customer–related and contract–based intangible assets based on a ratio of the horsepower sold relative to the total horsepower of the asset group. We recognized an aggregate gain of $28.1 million. F-16

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

6. Accounts Receivable, net

Accounts receivable, net is comprised of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	​	​	2024		​	2023
Customer related:	​	​	​	​	​	​
Third party	​	$	123,107	​	$	116,475
Related parties ^(1)^	​	​	3,585	​	​	3,839
Other ^(2)^	​		6,200	​		4,342
Accounts receivable	​	​	132,892	​	​	124,656
Allowance for credit losses	​	​	(414)	​	​	(587)
Accounts receivable, net	​	$	132,478	​	$	124,069
(1)	See Note 29 (“Related Party Transactions”) for additional information.
---	---
(2)	Other receivables primarily consist of amounts due from the sale of used equipment.
---	---

​

As December 31, 2024 and 2023, our receivables from contracts with customers, net of allowance for credit losses, were $126.3 million and $119.7 million, respectively.

​

Allowance for Credit Losses

​

The changes in our allowance for credit losses are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)		2024			2023			2022
Balance at beginning of period		$	587	​	$	1,674	​	$	2,152
Provision for credit losses	​	​	381	​	​	224	​	​	206
Write-offs charged against allowance	​	​	(554)	​	​	(1,311)	​	​	(684)
Balance at end of period	​	$	414	​	$	587	​	$	1,674

​

​

7. Inventory

Inventory is comprised of the following:

​

​	​	​	​	​	​
​	December 31,
(in thousands)	2024		​	2023
Parts and supplies	$	76,505	​	$	70,759
Work in progress		13,181	​		11,002
Inventory	$	89,686	​	$	81,761

​

During the years ended December 31, 2024, 2023 and 2022 we recorded write–downs to inventory of $0.6 million, $0.5 million and $1.6 million, respectively, for inventory considered to be excess, obsolete or carried at an amount in excess of net realizable value. F-17

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

8. Property, Plant and Equipment, net

Property, plant and equipment, net is comprised of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	​	2024		​	2023
Compression equipment, facilities and other fleet assets	​	$	4,392,818	​	$	3,326,919
Land and buildings	​		32,060	​		30,169
Transportation and shop equipment	​		118,413	​		100,474
Computer hardware and software	​		78,021	​		77,532
Other	​		7,411	​		5,678
Property, plant and equipment	​		4,628,723	​		3,540,772
Accumulated depreciation	​		(1,304,893)	​		(1,238,790)
Property, plant and equipment, net	​	$	3,323,830	​	$	2,301,982

​

Depreciation expense was $185.1 million, $159.3 million and $155.4 million during the years ended December 31, 2024, 2023 and 2022, respectively. Assets under construction of $125.0 million and $64.7 million at December 31, 2024 and 2023, respectively, primarily consisted of compression equipment and other fleet assets.

9. Leases

We have operating leases for office space, temporary housing, storage and shops. Our leases have remaining lease terms of less than one year to approximately eight years and most include options to extend the lease term, at our discretion, for an additional one to ten years. We are not, however, reasonably certain that we will exercise any of the options to extend them and as such, they have not been included in the remaining lease terms.

Financial and other supplemental information related to our operating leases is as follows:

​

​	​	​	​	​	​	​	​	​
​	​	​	****	December 31,
(in thousands)	****	Classification	****	2024		****	2023
ROU assets		Operating lease ROU assets	​	$	15,365	​	$	14,097
​	​	​	​	​	​	​	​	​
Lease liabilities			​			​
Current		Accrued liabilities	​	$	4,121	​	$	3,160
Noncurrent		Operating lease liabilities	​		12,415	​		12,271
Total lease liabilities			​	$	16,536	​	$	15,431

​

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		​	2023		​	2022
Operating lease cost	​	$	4,607	​	$	4,131	​	$	4,041
Short-term lease cost	​		390	​		412	​		447
Variable lease cost	​		1,901	​		1,881	​		1,802
Total lease cost	​	$	6,898	​	$	6,424	​	$	6,290

​ F-18

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		​	2023		​	2022
Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities	​	$	6,692	​	$	6,157	​	$	5,951
Operating lease ROU assets obtained in exchange for lease liabilities, net ^(1)^	​		5,120	​		710	​		2,421

(1) Includes decreases to our ROU assets of $0.4 million, and $0.2 million related to lease amendments and terminations during 2023 and 2022 respectively. There were no lease amendments or terminations during 2024 that resulted in decreases to our ROU assets.

​

​	​	​	​	​	​	​	​
​	​	December 31,					​
​	​	2024	​	2023	​	2022	​
Weighted-average remaining lease term (in years)	​	4.9	​	6.0	​	6.7	​
Weighted-average discount rate	​	5.6	%	4.9	%	4.7	%

​

Remaining maturities of our lease liabilities as of December 31, 2024 are as follows:

​

​	​	​	​
(in thousands)	​	​	​
2025	​	$	4,569
2026	​	​	4,002
2027	​		3,026
2028	​		2,576
2029	​	​	2,509
Thereafter	​		2,254
Total lease payments	​		18,936
Less: Interest	​		(2,400)
Total lease liabilities	​	$	16,536

​

​

10. Intangible Assets, net

Intangible assets include customer relationships associated with various business and asset acquisitions as well as a trade name intangible asset associated with the TOPS Acquisition. These acquired intangible assets were recorded at fair value determined as of the acquisition date and are being amortized over the period we expect to benefit from the assets.

Intangible assets, net is comprised of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	​	2024		​	2023
Gross carrying amount	​	$	218,564	​	$	142,336
Accumulated amortization	​		(120,293)	​		(112,154)
Intangible assets, net	​	$	98,271	​	$	30,182

​

Intangible assets are amortized on a straight–line basis with estimated useful lives ranging from five to 25 years. Amortization expense was $8.1 million, $6.9 million and $8.9 million during the years ended December 31, 2024, 2023 and 2022, respectively. F-19

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Estimated amortization expense for each of the subsequent five fiscal years and thereafter is expected to be as follows:

​

​	​	​	​
(in thousands)	​	​	​
2025	​	$	11,072
2026	​		10,509
2027	​		9,634
2028	​		9,280
2029	​		9,139
Thereafter	​		48,637
Total	​	$	98,271

​

​

11. Contract Costs

For our contract operations segment, we capitalize incremental costs to obtain a contract with a customer if we expect to recover those costs. Capitalized contract costs include commissions paid to our sales force to obtain contract operations contracts. We expense commissions paid for sales of service contracts and OTC parts and components within our aftermarket services segment, as the amortization period is less than one year. We had contract costs of $4.1 million and $2.2 million associated with sales commissions recorded in our consolidated balance sheets as of December 31, 2024 and 2023, respectively.

For our contract operations segment, we capitalize costs incurred to fulfill a contract if those costs relate directly to a contract, enhance resources that we will use in satisfying performance obligations and if we expect to recover those costs. Contract costs incurred to fulfill our customer contracts include freight charges to transport compression assets before transferring services to the customer and mobilization activities associated with our contract operations services. Aftermarket services fulfillment costs are recognized based on the percentage–of–completion method applicable to the customer contract and do not typically result in the recognition of a contract asset. We had contract costs of $19.8 million and $18.9 million associated with freight and mobilization recorded in our consolidated balance sheets as of December 31, 2024 and 2023, respectively.

Contract operations obtainment and fulfillment costs are amortized based on the transfer of service to which the assets relate, which is estimated to be 46 months based on average contract term, including anticipated renewals. Annually, we assess whether the 46–month estimate fairly represents the average contract term and adjust as appropriate. Contract costs associated with commissions are amortized to SG&A. Contract costs associated with freight and mobilization are amortized to cost of sales, exclusive of depreciation and amortization. During the years ended December 31, 2024, 2023 and 2022, we amortized $2.3 million, $1.9 million and $1.9 million, respectively, related to sales commissions, and $21.5 million, $19.4 million and $17.3 million, respectively, related to freight and mobilization.

12. Hosting Arrangements

We have hosting arrangements that are service contracts for cloud applications including our ERP, mobile workforce, telematics and inventory management tools.

Capitalized implementation costs and accumulated amortization related to our hosting arrangements that are service contracts are as follows:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	​	2024		​	2023
Hosting arrangements	​	$	20,002	​	$	17,832
Accumulated amortization	​		(8,329)	​		(5,320)
Hosting arrangements, net	​	$	11,673	​	$	12,512

​ F-20

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

These costs are included in other assets in our consolidated balance sheets. Amortization expense, which is recorded in SG&A in our consolidated statements of operations, was $3.0 million, $2.6 million and $2.0 million during December 31, 2024, 2023 and 2022, respectively.

13. Investments in Unconsolidated Affiliates

Investments in which we are deemed to exert significant influence, but not control, are accounted for using the equity method of accounting, except in cases where the fair value option is elected. For such investments where we have elected the fair value option, the election is irrevocable and is applied on an investment–by–investment basis at initial recognition.

For ownership interests that are not accounted for under the equity method and that do not have readily determinable fair values, we have elected the fair value measurement alternative to record these investments at cost minus impairment, if any, including adjustments for observable price changes in orderly transactions for an identical or similar investment of the same issuer. Investments in equity securities measured using the fair value measurement alternative are reviewed for impairment or observable price changes in orderly transactions each reporting period

Investment in ECOTEC

In April 2022, we agreed to acquire for cash a 25% equity interest in ECOTEC, a company specializing in methane emissions detection, monitoring and management. We have elected the fair value option to account for this investment, and during the years ended December 31, 2024, 2023 and 2022, we recognized unrealized losses of $1.5 million, $1.0 million and $1.9 million, respectively, related to the change in fair value of our investment (see Note 27 (“Fair Value Measurements”)). Changes in the fair value of this investment are recognized in other expense, net in our consolidated statements of operations. During the years ended December 31, 2024 and 2023, we contributed $1.3 million and $3.1 million, respectively, to maintain our 25% ownership interest in ECOTEC, which is included in other assets in our consolidated balance sheets.

Investment in Ionada

In November 2023, we agreed and made initial investment of $3.8 million, to serve as the lead investor in a series A preferred financing round for Ionada, a global carbon capture technology company committed to reducing GHG emissions and creating a sustainable future. Ionada has developed a post-combustion carbon capture solution to reduce carbon dioxide emissions from various small to mid-sized industrial emitters in the energy, marine and e-fuels industries, among others. As of December 31, 2024 and 2023, we had a fully diluted ownership equity interest in Ionada of 12% and 10%, respectively. We have elected the fair value measurement alternative to account for this investment (see Note 27 (“Fair Value Measurements”)).

On November 19, 2024, subject to the same terms and conditions of our initial investment, we invested an additional $1.2 million and as a result, the carrying value of our investment in Ionada at December 31, 2024 was $5.5 million, including cumulative transaction costs of $0.5 million, and is included in other assets in our consolidated balance sheets. There were no upward adjustments, impairments or downward adjustments to the carrying value of the investment as of December 31, 2024. Subject to certain contractual conditions, we may invest on the same terms and conditions as the initial and secondary investments, $1.3 million in November 2025 and $4.8 million prior to July 2026, for a fully diluted ownership interest of 15% and 24%, respectively.

​ F-21

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

14. Accrued Liabilities

Accrued liabilities are comprised of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	****	2024		****	2023
Accrued salaries and other benefits	​	$	56,873	​	$	37,425
Accrued income and other taxes	​		8,434	​		7,160
Accrued interest	​		35,366	​		22,464
Other accrued liabilities	​		23,432	​		18,332
Accrued liabilities	​	$	124,105	​	$	85,381

​

​

15. Contract Liabilities

As of December 31, 2024 and 2023, our contract liabilities were $10.0 million and $7.0 million, respectively. These liabilities are included in deferred revenue and other liabilities in our consolidated balance sheets.

During the years ended December 31, 2024 and 2023, we deferred revenue of $18.1 million and $15.4 million, respectively, and recognized revenue of $15.0 million and $16.5 million, respectively. The revenue recognized and deferred during the periods is primarily related to freight billings for contract operations and milestone billings for aftermarket services.

16. Long–Term Debt

Long–term debt is comprised of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	****	2024		​	2023
Credit Facility	​	$	408,325	​	$	287,025
​	​	​	​	​	​	​
6.625% senior notes due September 2032:	​	​	​	​	​	​
Principal outstanding	​	​	700,000	​		—
Unamortized debt issuance costs	​	​	(9,609)	​		—
​	​	​	690,391	​		—
6.25% senior notes due April 2028:	​	​	​	​	​	​
Principal outstanding	​		800,000	​		800,000
Unamortized debt premium	​	​	6,519	​		8,524
Unamortized debt issuance costs	​		(5,401)	​		(7,081)
​	​		801,118	​		801,443
6.875% senior notes due April 2027:	​	​	​	​	​	​
Principal outstanding	​	​	300,000	​		500,000
Unamortized debt issuance costs	​	​	(1,458)	​		(3,599)
​	​	​	298,542	​		496,401
​	​	​	​	​	​	​
Long-term debt	​	$	2,198,376	​	$	1,584,869

​ F-22

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Credit Facility

First Amendment to the Amended and Restated Credit Agreement

On August 28, 2024, we amended our Amended and Restated Credit Agreement to, among other things:

●	increase the borrowing capacity of the Credit Facility from $750.0 million to $1.1 billion;
●	increase the portion of the Credit Facility available for the issuance of swing line loans from $75.0 million to $110.0 million;
---	---
●	increase the cash dominion trigger threshold amount from $75.0 million to $110.0 million;
---	---
●	add certain financial institutions as lenders under the Credit Facility;
---	---
●	join a newly formed wholly owned subsidiary of Archrock Services, L.P. as a guarantor and grantor under the Credit Facility; and
---	---
●	modify certain other covenants to which we are subject.
---	---

We incurred $2.6 million in transaction costs related to the First Amendment to the Amended and Restated Credit Agreement, which were included in other assets in our consolidated balance sheets and are being amortized over the remaining term of the Credit Facility.

​

Amended and Restated Credit Agreement

​

On May 16, 2023, we amended and restated our Credit Facility to, among other things:

●	extend the maturity date of the Credit Facility from November 8, 2024 to May 16, 2028 (or December 2, 2026 or December 3, 2027 if any portion of the 2027 Notes and 2028 Notes, respectively, remain outstanding at such date);
●	change the referenced rate from LIBOR to SOFR so that borrowings under the Credit Facility bear interest at, based on our election, either a base rate or SOFR, plus an applicable margin; and
---	---
●	increase the portion of the Credit Facility available for the issuance of swing line loans from $50.0 million to $75.0 million.
---	---

We incurred $6.0 million in transaction costs related to the Amended and Restated Credit Agreement, which were included in other assets in our consolidated balance sheets and are being amortized over the remaining term of the Credit Facility. In addition, we wrote off $1.0 million of unamortized deferred financing costs as a result of the Amended and Restated Credit Agreement, which was recorded to interest expense in our consolidated statements of operations during the year ended December 31, 2023.

As of December 31, 2024, there were $4.0 million letters of credit outstanding under the Credit Facility and the applicable margin on borrowings was 2.2%. The weighted average annual interest rate on the outstanding balance under our Credit Facility was 6.8% and 7.7% at December 31, 2024 and 2023, respectively. As of December 31, 2024, we were in compliance with all covenants under our Amended and Restated Credit Agreement. Additionally, all undrawn capacity on our Credit Facility was available for borrowings as of December 31, 2024.

​ F-23

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Other Facility Terms

​

As of December 31, 2024, our Credit Facility had an aggregate borrowing commitment of $1.1 billion. Subject to certain conditions, including approval by the lenders, we are able to increase the aggregate commitments under the Credit Facility by up to an additional $750.0 million. Portions of the Credit Facility, up to $110.0 million, are available for the issuance of swing line loans and $50.0 million is available for the issuance of letters of credit.

The Credit Facility bears interest at either a base rate or SOFR, at our option, plus an applicable margin. The base rate is the highest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.50% and (iii) one-month SOFR plus 1.00%. Depending on our leverage ratio, the applicable margin varies (i) in the case of base rate loans, from 1.00% to 1.75% and (ii) in the case of SOFR loans, from 2.00% to 2.75%.

Additionally, we are required to pay commitment fees based on the daily unused amount of the Credit Facility at a rate of 0.25% to 0.375% depending on the ratio of the outstanding balance to the aggregate borrowing commitment. We incurred $2.1 million, $1.7 million and $1.9 million in commitment fees during the years ended December 31, 2024, 2023 and 2022, respectively.

The Credit Facility borrowing base consists of eligible accounts receivable, inventory and compressors, the largest of which is compressors. Borrowings under the Credit Facility are secured by substantially all of our personal property assets and certain of our subsidiaries.

The Amended and Restated Credit Agreement contains various covenants 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 distributions. The Amended and Restated Credit Agreement also contains various covenants requiring mandatory prepayments from the net cash proceeds of certain asset transfers.

As of December 31, 2024, the following consolidated financial ratios, as defined in our Amended and Restated Credit Agreement, were required:

​

​	​	​
EBITDA to Interest Expense	​	2.5 to 1.0
Senior Secured Debt to EBITDA	​	3.0 to 1.0
Total Debt to EBITDA^(1)^	​	5.25 to 1.0

(1) Subject to a temporary increase to 5.50 to 1.0 for any quarter during which an acquisition satisfying certain thresholds is completed and for the two quarters immediately following such quarter.

2032 Notes

​

On August 26, 2024, we completed a private offering of $700.0 million aggregate principal amount of 6.625% senior notes due September 2032 and received net proceeds of $690.0 million after deducting issuance costs. The $10.0 million of issuance costs were recorded as deferred financing costs within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statement of operations over the term of the notes. A portion of the net proceeds were used to fund a portion of the cash consideration for the TOPS Acquisition, the 2027 Notes Tender Offer and to repay borrowings outstanding under our Credit Facility.

The 2032 Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the U.S. except pursuant to a registration exemption under the Securities Act and applicable state securities laws. We offered and issued the 2032 Notes only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to certain non-U.S. persons outside the U.S. in accordance with Regulation S under the Securities Act. F-24

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The 2032 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us, and by all of our existing subsidiaries, other than Archrock Partners Finance Corp., which is the issuer of the 2032 Notes. The 2032 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness.

We may, at our option, redeem all of part of the 2032 Notes at any time on or after September 1, 2027, at specified redemption prices, plus any accrued and unpaid interest. In addition, prior to September 1, 2027, we may redeem up to 40% of the 2032 Notes, in an amount equal to the net cash proceeds of one or more equity offerings, at a specified redemption price, plus any accrued and unpaid interest. We may also redeem all or part of the 2032 Notes at any time prior to September 1, 2027 at a redemption price equal to the principal amount and a make whole premium, plus any accrued and unpaid interest.

​

2027 Notes Tender Offer

In connection with the offering of the 2032 Notes, we completed a concurrent cash tender offer of $202.0 million, which reflects approximately 101% of the aggregate principal amount of the tendered 2027 Notes and $0.2 million of agent and legal fees. On the date of tender, the net carrying value of the tendered 2027 Notes was $198.8 million and we recorded a debt extinguishment loss of $3.2 million in our consolidated statements of operations during the year ended December 31, 2024.

2027 Notes and 2028 Notes

In December 2020, we completed a private offering of $300.0 million aggregate principal amount of 6.25% senior notes due April 2028, which were issued pursuant to the indenture under which we completed a private offering of $500.0 million aggregate principal amount of 6.25% senior notes in December 2019. The notes of the two offerings have identical terms and are treated as a single class of securities. The $300.0 million of notes were issued at 104.875% of their face value and have an effective interest rate of 5.6%. The $500.0 million of notes were issued at 100% of their face value and have an effective interest rate of 6.8%. We received net proceeds of $309.9 million, after deducting issuance costs of $4.7 million, from our December 2020 offering and net proceeds of $491.8 million, after deducting issuance costs of $8.2 million, from our December 2019 offering.

In March 2019, we completed a private offering of $500.0 million aggregate principal amount of 6.875% senior notes due April 2027 and received net proceeds of $491.2 million after deducting issuance costs of $8.8 million. The $500.0 million of notes were issued at 100% of their face value and have an effective interest rate of 7.9%.  In August 2024, we completed a cash tender offer to purchase $200 million aggregate principal amount of the 2027 Notes, after which $300 million aggregate principal amount of the 2027 Notes remained outstanding.

The net proceeds from the 2027 Notes and 2028 Notes were used to repay borrowings outstanding under our Credit Facility. Issuance costs related to the 2027 Notes and 2028 Notes are considered deferred financing costs, and together with the issue premium of the December 2020 offering of 2028 Notes, are recorded within long-term debt in our consolidated balance sheets and are being amortized to interest expense in our consolidated statements of operations over the terms of the notes.

The 2027 Notes and 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by us and all of our existing subsidiaries, other than Archrock Partners, L.P. and Archrock Partners Finance Corp., which are co–issuers of both offerings, and certain of our future subsidiaries. The 2027 Notes and 2028 Notes and the guarantees rank equally in right of payment with all of our and the guarantors’ existing and future senior unsecured indebtedness.

The 2027 Notes and 2028 Notes may be redeemed at any time, in whole or in part, at specified redemption prices and make–whole premiums, plus any accrued and unpaid interest. F-25

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Maturities of Long–Term Debt

As of December 31, 2024, the maturities of our long–term debt, excluding interest to be accrued, are as follows:

​

​	​	​	​
​		​	​
(in thousands)	​	​	​
2025	​	$	—
2026	​		—
2027	​		298,542
2028	​	​	1,209,443
2029	​		—
Thereafter	​		690,391

​

​

17. Commitments and Contingencies

Insurance Matters

Our business can be hazardous, involving unforeseen circumstances such as uncontrollable flows of natural gas or well fluids and fires or explosions. As is customary in our industry, we review our safety equipment and procedures and carry insurance against some, but not all, risks of our business. Our insurance coverage includes property damage, general liability and commercial automobile liability and other coverage we believe is appropriate. We believe that our insurance coverage is customary for the industry and adequate for our business; however, losses and liabilities not covered by insurance would increase our costs.

Additionally, we are substantially self–insured for workers’ compensation and employee group health claims in view of the relatively high per–incident deductibles we absorb under our insurance arrangements for these risks. Losses up to the deductible amounts are estimated and accrued based upon known facts, historical trends and industry averages. We are also self–insured for property damage to our offshore assets.

In August 2021, Hurricane Ida made landfall in Louisiana, causing operational disruptions, damage to compressors and a temporary shutdown of facilities in Louisiana that negatively impacted our financial performance in the quarter. As of December 31, 2021, we had an insurance recovery of $2.8 million related to the facility and compressor damages, which we received in cash during the three months ended March 31, 2022. In September 2022, we received an additional $0.4 million related to business interruption insurance recovery proceeds.

Tax Matters

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 both December 31, 2024 and 2023, we accrued $8.6 million and $3.9 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 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 consolidated results of operations or cash flows.

As of both December 31, 2024 and 2023, $0.6 million of the tax contingencies mentioned above related to audits that have advanced from the audit review phase to the contested hearing phase. As of December 31, 2024, $4.3 million of the tax contingencies mentioned above had an offsetting indemnification asset. None were indemnified as of December 31, 2023. F-26

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Litigation and Claims

In the ordinary course of business, we are involved in various pending or threatened legal actions. While we are unable to predict the ultimate outcome of these actions, we believe that any ultimate liability arising from any of these actions will not have a material adverse effect on our consolidated financial position, results of operations or cash flows, including our ability to pay dividends. However, because of the inherent uncertainty of litigation and arbitration proceedings, 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 pay dividends.

18. Stockholders’ Equity

July 2024 Equity Offering

On July 24, 2024, Archrock sold, pursuant to a public underwriting offering, approximately 12.7 million shares of common stock, including approximately 1.7 million shares of common stock pursuant to an over-allotment option. Archrock received net proceeds of $255.7 million, after deducting underwriting discounts, commissions and offering expenses. Proceeds from this equity offering were used to fund a portion of the TOPS Acquisition.

TOPS Acquisition

On August 30, 2024, we completed the TOPS Acquisition and issued approximately 6.9 million shares of common stock to the sellers as part of the acquisition purchase price. The acquisition date fair value was $139.1 million and is reflected in common stock and additional paid-in capital in our consolidated statements of equity. See Note 4 (“Business Transactions”) for further details.

Share Repurchases

​

Share Repurchase Program

​

On April 27, 2023, our Board of Directors authorized a share repurchase program that allowed us to repurchase up to $50.0 million of outstanding common stock. Under the Share Repurchase Program, shares of our common stock may be repurchased periodically, including in the open market, privately negotiated transactions, or otherwise in accordance with applicable federal securities laws, at any time. On April 25, 2024, our Board of Directors approved an extension of the Share Repurchase Program upon expiry of the current authorization on April 27, 2024, for an additional 24-month period. In connection with the extension, the Board of Directors replenished the amount of shares authorized for repurchase under the Share Repurchase Program, resulting in available capacity of $50.0 million at that time. Through December 31, 2024, we had repurchased 1,483,200 common shares at an average price of $14.97 per share for an aggregate of $22.2 million. As of December 31, 2024, $37.9 million remained available for purchase under the Share Repurchase Program. The actual timing, manner, number, and value of shares repurchased under the program will be determined by us at our discretion.

​

Shares Withheld to Cover

​

The 2020 Plan allows us to withhold shares upon vesting of restricted stock at the then-current market price to cover taxes required to be withheld on the vesting date. F-27

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table summarizes shares repurchased:

​

​	​	​	​	​	​	​	​	​	​	​
​	****	​	Year Ended
​	​	​	December 31, 2024
(dollars in thousands, except per share amounts)	​	​	Total Number of Shares Repurchased		​	Average Price per Share		​	Total Cost of Shares Repurchased
Shares repurchased under the Share Repurchase Program	​	​	​	732,826	​	$	18.20	​	$	13,337
Shares withheld related to net settlement of equity awards	​	​	​	392,177	​	​	16.76	​	​	6,574
Total	​	​	​	1,125,003	​	$	17.70	​	$	19,911
​	​	​	​	​	​	​	​	​	​	​
​	****	​	Year Ended
​	​	​	December 31, 2023
(dollars in thousands, except per share amounts)	​	​	Total Number of Shares Repurchased		​	Average Price per Share		​	Total Cost of Shares Repurchased
Shares repurchased under the Share Repurchase Program	​	​	​	750,374	​	$	11.81	​	$	8,860
Shares withheld related to net settlement of equity awards	​	​	​	388,128	​	​	9.87	​	​	3,829
Total	​	​	​	1,138,502	​	$	11.15	​	$	12,689

​

At–the–Market Continuous Equity Offering Program

​

In February 2021, we entered into the ATM Agreement, pursuant to which we may offer and sell shares of our common stock from time to time for an aggregate offering price of up to $50.0 million. We use the net proceeds of these offerings, after deducting sales agent fees and offering expenses, for general corporate purposes. Offerings of common stock pursuant to the ATM Agreement will terminate upon the earlier of (i) the sale of all shares of common stock subject to the ATM Agreement or (ii) the termination of the ATM Agreement by us or by each of the sales agents. Any sales agent may also terminate the ATM Agreement but only with respect to itself.

During the year ended December 31, 2022, we sold 447,020 shares of common stock, for net proceeds of $4.2 million, pursuant to the ATM Agreement. There were no shares of common stock sold during the years ended December 31, 2024 and 2023. F-28

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Cash Dividends

The following table summarizes our dividends declared and paid in each of the quarterly periods of 2024, 2023 and 2022:

​

​	​	​	​	​	​	​
​		Dividends per			​
(dollars in thousands, except per share amounts)		Common Share			Dividends Paid
2024	​			​
Q4	​	$	0.175	​	$	30,690
Q3	​	​	0.165	​	​	27,865
Q2	​	​	0.165	​	​	25,819
Q1	​	​	0.165	​	​	26,000
​	​	​	​	​	​	​
2023		​			​
Q4	​	$	0.155	​	$	24,190
Q3	​		0.155	​	​	24,250
Q2	​		0.150	​	​	23,504
Q1	​		0.150	​	​	23,852
​	​	​	​	​	​	​
2022		​			​
Q4	​	$	0.145	​	$	22,589
Q3	​		0.145	​		22,559
Q2	​		0.145	​		22,494
Q1	​		0.145	​		22,673

​

On January 30, 2025, our Board of Directors declared a quarterly dividend of $0.19 per share of common stock, or approximately $33.5 million, which was paid on February 19, 2025 to stockholders of record at the close of business on February 12, 2025.

Accumulated Other Comprehensive Loss

Components of comprehensive income are net income (and all changes in equity during a period except those resulting from transactions with owners. Our accumulated other comprehensive loss consists of changes in the fair value of our interest rate swap derivative instruments, net of tax. See Note 26 (“Derivatives and Hedging”) for further details on our interest rate swap derivative instruments.

The following table presents the changes in accumulated other comprehensive loss, net of tax:

​

​	​	​	​
​	​	Year ended
(in thousands)	​	December 31, 2022
Beginning accumulated other comprehensive loss	​	$	(984)
Other comprehensive income, net of tax:	​	​	​
Loss recognized in other comprehensive income	​		(405)
Loss reclassified from accumulated other comprehensive loss to interest expense	​		1,389
Total other comprehensive income	​		984
Ending accumulated other comprehensive loss	​	$	—

​

​ F-29

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

19. Revenue from Contracts with Customers

The following table presents our revenue from contracts with customers by segment (see Note 30 (“Segments”)) and disaggregated by revenue source:

​

​	​	​	​	​	​	​	​	​	​
​	​	​					​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024			2023			2022
Contract operations:	​	​		​	​		​	​
0 ― 1,000 horsepower per unit	​	$	246,524	​	$	170,320	​	$	159,140
1,001 ― 1,500 horsepower per unit	​		384,956	​		350,961	​		285,758
Over 1,500 horsepower per unit	​		348,295	​		287,183	​		231,923
Other ^(1)^	​		630	​		975	​		980
Total contract operations revenue ^(2)^	​		980,405	​		809,439	​		677,801
​	​	​	​	​	​	​	​	​	​
Aftermarket services:	​			​			​
Services	​		100,847	​		98,803	​		88,728
OTC parts and components sales	​	​	76,023	​		82,095	​		79,039
Other	​		316	​	​	—	​	​	—
Total aftermarket services revenue ^(3)^	​		177,186	​		180,898	​		167,767
​	​	​	​	​	​	​	​	​	​
Total revenue	​	$	1,157,591	​	$	990,337	​	$	845,568
(1)	Primarily relates to fees associated with owned non–compression equipment.
---	---
(2)	Includes $5.3 million, $4.2 million and $3.2 million during the years ended December 31, 2024, 2023 and 2022, respectively, related to billable maintenance on owned compressors that was recognized at a point in time. All other contract operations revenue is recognized over time.
---	---
(3)	Services revenue within aftermarket services is recognized over time. OTC parts and components sales and other revenue is recognized at a point in time.
---	---

Performance Obligations

As of December 31, 2024, we had $839.9 million of remaining performance obligations related to our contract operations segment, which will be recognized through 2029 as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
(in thousands)	​	​	2025		​	2026		****	2027		****	2028		****	2029		****	Total
Remaining performance obligations	​	​	$	499,522	​	$	254,034	​	$	65,933	​	$	16,218	​	$	4,176	​	$	839,883

​

We do not disclose the aggregate transaction price for the remaining performance obligations for aftermarket services as there are no contracts with customers with an original contract term that is greater than one year.

​

​

20. Stock–Based Compensation

We recognize stock-based compensation expense related to restricted stock awards, restricted stock units, performance-based restricted stock units and shares issued under our ESPP. We account for forfeitures as they occur.

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024			2023			2022
Equity award expense	​	$	14,646	​	$	12,998	​	$	11,928
Liability award expense	​		18,393	​		7,910	​		2,569
Total stock-based compensation expense	​	$	33,039	​	$	20,908	​	$	14,497

​ F-30

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Stock Incentive Plans

The 2020 Plan was adopted in April 2020 and provides for the granting of stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, other stock-based awards and dividend equivalent rights to employees, directors and consultants of Archrock. The 2020 Plan is administered by the Compensation Committee of our Board of Directors. Under the 2020 Plan, the maximum number of shares of common stock available for issuance is 8,500,000. Each stock-settled award granted under the 2020 Plan reduces the number of shares available for issuance by one share. Cash-settled awards are not counted against the aggregate share limit. Shares subject to awards granted under the 2020 Plan that are subsequently canceled, terminated, settled in cash or forfeited, excluding shares withheld to satisfy tax withholding obligations or to pay the exercise price of an option, are available for future grant under the 2020 Plan.

The 2020 Plan allows us to withhold shares upon vesting of restricted stock at the then–current market price to cover taxes required to be withheld on the vesting date. During the years ended December 31, 2024, 2023 and 2022, we withheld 392,177 shares valued at $6.6 million, 383,128 shares valued at $3.8 million and 283,024 shares valued at $2.4 million, respectively, to cover tax withholding.

On February 19, 2025, the Compensation Committee approved an amendment to the 2020 Plan that provides for the delegation to a subcommittee, which may be comprised of one or more officers of the Company, the authority to grant awards to employees who are not subject to Section 16 of the Exchange Act, subject to certain award size and other limitations.

Restricted Stock Awards and Performance–Based Restricted Stock Units

Grants of restricted stock are subject to forfeiture, restrictions on transfer and certain other conditions until vesting, which generally occurs in three equal installments following the date of grant. Compensation expense is recognized over the vesting period equal to the fair value of our common stock at the grant date. Our restricted stock includes rights to receive dividends or dividend equivalents.

Grants of performance–based restricted stock units are three–year equity settled awards linked to the performance of our common stock. The awards also include dividend equivalent rights that accumulate during the vesting period.

We have performance–based restricted stock units whose vesting is dependent on the satisfaction of a combination of certain service–related conditions and our total shareholder return ranked against that of a predetermined peer group over a three–year performance period, as well as performance–based restricted stock units whose vesting is contingent on meeting various horsepower utilization targets over a three–year performance period. The awards vest in their entirety on the date specified in the award agreement following the conclusion of the performance period. The final number of shares of common stock issuable upon vesting can range from 0% to 250% of the initial grant depending on the level of achievement as determined by the Compensation Committee of our Board of Directors.

The fair value of the horsepower utilization performance-based restricted stock units is equal to the fair value of our common stock at the grant date. The fair value of the total shareholder return performance–based restricted stock units, incorporating the market condition, is estimated on the grant date using a Monte Carlo simulation model. Expected volatilities for us and each peer company utilized in the model are estimated using a historical period consistent with the awards’ remaining performance period as of the grant date. The risk–free interest rate is based on the yield on U.S. Treasury Separate Trading of Registered Interest and Principal Securities for a term consistent with the remaining performance period. The dividend yield used is 0.0% to approximate accumulation of earnings. F-31

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The assumptions that were used to estimate the fair value of our restricted stock units and performance–based stock units are as follows:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,								​
​	​	2024		​	2023		​	2022		​
Remaining performance period as of grant date (in years)		​	2.9		​	2.9		​	2.9
Risk-free interest rate used		​	4.1	%	​	3.9	%	​	1.4	%
Grant-date fair value	​	$	23.67	​	$	15.68	​	$	11.96	​

​

Activity related to our restricted stock and performance–based restricted stock units is as follows:

​

​	​	​	​	​	​
​	​	​	​	Weighted
​	​	​	​	Average
​	​	​	​	Grant Date
​	​	​	​	Fair Value
(in thousands, except per share amounts)		Shares		Per Share
Non-vested restricted stock and performance-based restricted stock units, December 31, 2023		2,625	​	$	10.19
Granted		864	​		17.44
Adjustment for performance	​	13	​	​	14.30
Vested		(1,188)	​		10.22
Canceled		(38)	​		12.08
Non-vested restricted stock and performance-based restricted stock units, December 31, 2024		2,276	​	$	12.81

​

The grant date fair value of the restricted stock and performance–based restricted stock units granted during the years ended December 31, 2024, 2023 and 2022 was $15.1 million, $15.3 million and $14.3 million, respectively. The fair value of the restricted stock and performance–based restricted stock units vested during the years ended December 31, 2024, 2023 and 2022 was $20.2 million, $12.4 million and $9.3 million, respectively.

As of December 31, 2024, we expect $14.5 million of unrecognized compensation cost related to our non–vested restricted stock and performance–based restricted stock units to be recognized over the weighted–average period of 1.7 years.

Cash Settled Performance Units

Grants of cash–settled performance units vest at the end of the three-year vesting period and are payable in an amount of cash equivalent to the value of our common stock at the vesting date for each unit vested. These awards are subject to one or more performance conditions and are accounted for as liability awards with expense based on the fair value measured at the end of each reporting period. These awards also include dividend equivalent rights that accumulate during the vesting period. At the end of each reporting period, the Compensation Committee of our Board of Directors approves the determination of achievement for each performance measure, which can range from 0% to 200%. F-32

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Activity related to our cash–settled performance units is as follows:

​

​	​	​	​	​	​
​	​	​	​	Weighted
​	​	​	​	Average
​	​	​	​	Grant Date
​	​	​	​	Fair Value
(in thousands, except per share amounts)		Shares		Per Share
Non-vested cash-settled performance units, December 31, 2023		548	​	$	9.37
Granted		134	​		16.00
Adjustment for performance	​	92	​	​	10.70
Vested		(235)	​		10.70
Canceled		—	​		—
Non-vested cash-settled performance units, December 31, 2024		539	​	$	10.67

​

The grant date fair value of the cash settled performance units granted during the years ended December 31, 2024, 2023 and 2022 was $2.1 million, $1.9 million and $2.5 million, respectively. The performance criteria for the cash settled performance units granted during the year ended December 31, 2020, were not met over the performance period; therefore, the Compensation Committee of our Board of Directors determined that no payout was earned, and no cash was paid upon vesting during the year ended December 31, 2023. Cash paid upon vesting of the cash settled performance units during the years ended December 31, 2024 and 2022 was $4.3 million and $1.2 million, respectively.

As of December 31, 2024, we expect $8.4 million of unrecognized compensation cost related to our non–vested liability awards to be recognized over the weighted–average period of 1.5 years.

Time-Based Cash or Equity Settled Performance Units

In 2024, we issued time-based equity awards that vest in three equal installments following the grant date.  These awards are payable in either cash or restricted stock units, at the employees’ option, based on the value of the Company’s common stock at the vesting date. These awards are subject to certain qualifying retirement provisions, are classified as liability awards and expense recognized based on the fair value measured at the end of each reporting period.  These awards also include dividend equivalent rights that accumulate during the vesting period.

​

During the year ended December 31, 2024, 187,500 restricted stock units were granted, with a total grant date fair value of $3.0 million, none of which vested during the year. As of December 31, 2024, we expect $1.8 million of unrecognized compensation cost related to non-vested restricted stock units over a weighted-average period of 1.5 years.

​

Employee Stock Purchase Plan

Our ESPP provides employees with an opportunity to participate in our long–term performance and success through the purchase of shares of common stock at a price that may be less than fair market value. Each quarter, eligible employees may elect to withhold a portion of their salary up to the lesser of $25,000 per year or 10% of their eligible pay at a price equal to 85% to 100% of the fair market value of the stock as defined by the plan. For the year ended December 31, 2023 and for prior years, the purchase discount under the ESPP was 5% of the fair market value of our common stock on the first or last trading day of the quarter, whichever is lower. Effective on January 1, 2024, the purchase discount under the ESPP increased to 10% of the fair market value of our common stock on the first or last trading day or the quarter, whichever is lower. Our ESPP is compensatory and, as a result, we record an expense in our consolidated statements of operations related to the ESPP.

The ESPP will terminate on the date that all shares of common stock authorized for sale under the ESPP have been purchased, unless it is extended. The maximum number of shares of common stock available for purchase under the ESPP is 1.0 million. As of December 31, 2024, 281,067 shares remained available for purchase under the ESPP. F-33

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Directors’ Stock and Deferral Plan

Our DSDP provides non–employee members of the Board of Directors with an opportunity to elect to receive our common stock as payment for a portion or all of their retainer. The number of shares paid each quarter is determined by dividing the dollar amount of fees elected to be paid in common stock by the closing sales price per share of the common stock on the last day of the quarter. In addition, directors who elect to receive a portion or all of their fees in the form of common stock may also elect to defer, until a later date, the receipt of a portion or all of their fees to be received in common stock. In this case, we issue restricted stock units and the rights to receive dividends or dividend equivalents is accrued and paid when the shares are issued.

There are 100,000 shares reserved under the DSDP and, as of December 31, 2024, 37,771 shares remained available to be issued under the plan.

21. Retirement Benefit Plan

Our 401(k) retirement plan provides for optional employee contributions up to the applicable IRS annual limit and discretionary employer matching contributions. We make discretionary matching contributions to each participant’s account at a rate of 100% of each participant’s contributions up to 6% of eligible compensation as of July 2024. Prior to July 2024, we made discretionary matching contributions to each participant’s account at a rate of 100% of each participant’s contributions up to 5% of eligible compensation. We recorded matching contributions of $5.9 million, $5.2 million and $4.9 million during the years ended December 31, 2024, 2023 and 2022, respectively.

22. Long–Lived and Other Asset Impairment

Compression Fleet

We periodically review the future deployment of our idle compression assets for units that are not of the type, configuration, condition, make or model that are cost efficient to maintain and operate. Based on these reviews, we determine that certain idle compressors should be retired from the active fleet. The retirement of these units from the active fleet triggers a review of these assets for impairment and as a result of our review, we may record an asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit is estimated based on the expected net sale proceeds compared to other fleet units we recently sold, 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 review of our idle compression assets, we evaluate for impairment idle units that were culled from our fleet in prior years and are available for sale. Based on that review, we may reduce the expected proceeds from disposition and record additional impairment to reduce the book value of each unit to its estimated fair value.

The following table presents the results of our compression fleet impairment review as recorded to our contract operations segment:

​

​	​	​	​	​	​	​	​	​	​
​	​	​
​	​	Year Ended December 31,
(dollars in thousands)	​	2024		****	2023		****	2022
Idle compressors retired from the active fleet	​	​	95		​	105		​	145
Horsepower of idle compressors retired from the active fleet		​	66,000		​	53,000		​	100,000
Impairment recorded on idle compressors retired from the active fleet	​	$	10,681	​	$	12,034	​	$	21,431

​

​ F-34

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

23. Restructuring Charges

During the first quarter of 2023, a plan to further streamline our organization and more fully align our teams to improve our customer service and profitability was approved by management. We did not incur restructuring charges during the year ended December 31, 2024, and we do not expect to incur additional restructuring charges related to these restructuring activities.

The following table presents restructuring charges incurred by segment:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	****	Contract		​	Aftermarket		​	​	​	​	​	​
(in thousands)	​	Operations		​	Services		​	Other^(1)^		​	Total
2023	​	​	​	​	​	​	​	​	​	​	​	​
Organizational restructuring	​	$	101	​	$	387	​	$	1,287	​	$	1,775
Total restructuring charges	​	$	101	​	$	387	​	$	1,287	​	$	1,775

(1) Represents expense incurred within our corporate function and not directly attributable to our segments.

The following table presents restructuring charges incurred by cost type:

​

​	​	​	​
​	​	Year Ended
(in thousands)	​	December 31, 2023
Organizational Restructuring	​	​	​
Organizational costs	​	$	1,517
Other restructuring costs	​	​	258
Total restructuring costs	​	$	1,775

​

​

24. Income Taxes

Current and Deferred Tax Provision

Our provision for income taxes consisted of the following:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)		2024			2023			2022
Current tax provision:	​	​	​	​	​	​	​	​	​
U.S. federal	​	$	—	​	$	—	​	$	—
State	​		2,059	​		1,591	​		1,064
Total current	​	​	2,059	​	​	1,591	​	​	1,064
Deferred tax provision:	​	​		​	​		​	​
U.S. federal	​	​	53,340	​	​	32,928	​	​	14,320
State	​		4,750	​		2,730	​		909
Total deferred	​	​	58,090	​	​	35,658	​	​	15,229
Provision for income taxes	​	$	60,149	​	$	37,249	​	$	16,293

​

The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 resulted in effective tax rates of 26%, 26% and 27%, respectively.  During the years ended December 31, 2024, 2023 and 2022, we paid income taxes, net of $2.2 million, $1.3 million and $0.4 million, respectively. F-35

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The reconciliation of these effective tax rates to the U.S. statutory rate of 21% is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024			2023			2022
Income taxes at U.S. federal statutory rate		$	48,800		$	29,872		$	12,724
Net state income taxes	​		5,397	​		3,614	​		1,795
Tax credits	​		—	​		—	​		(26)
Unrecognized tax benefits ^(1)^	​		229	​		118	​		17
Valuation allowances and write off of tax attributes ^(2)^	​		285	​		570	​		(68)
Executive compensation limitation	​		7,146	​		3,470	​		1,901
Stock	​		(1,569)	​		(213)	​		152
Other	​		(139)	​		(182)	​		(202)
Provision for income taxes	​	$	60,149	​	$	37,249	​	$	16,293
(1)	Includes the expiration of statute of limitations. See “Unrecognized Tax Benefits” below for further details.
---	---
(2)	See “Tax Attributes and Valuation Allowances” below for further details.
---	---

Deferred income tax balances are the direct effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the taxes are actually paid or recovered. The tax effects of our temporary differences that gave rise to deferred tax assets and deferred tax liabilities were as follows:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	​	2024		​	2023
Deferred tax assets:		​			​
Net operating loss carryforwards	​	$	143,412	​	$	164,972
Interest expense limitation carryforward	​		41,555	​		30,343
Basis difference in unconsolidated affiliate	​	​	943	​	​	686
Goodwill and intangible assets	​	​	40,201	​	​	—
Accrued liabilities	​		8,351	​		6,704
Other	​		12,822	​		12,015
​	​	​	247,284	​	​	214,720
Valuation allowances^(1)^	​		(1,462)	​		(1,177)
Total deferred tax assets	​	​	245,822	​	​	213,543
​	​	​	​	​	​	​
Deferred tax liabilities:	​			​
Property, plant and equipment	​	​	(78,477)	​	​	(12,125)
Basis difference in partnership	​		(221,149)	​		(197,999)
Other	​		(5,726)	​		(5,148)
Total deferred tax liabilities	​		(305,352)	​		(215,272)
​	​	​	​	​	​	​
Net deferred tax asset (liability) ^(2)^	​	$	(59,530)	​	$	(1,729)
(1)	See “Tax Attributes and Valuation Allowances” below for further details.
---	---
(2)	The 2024 and 2023 net deferred tax asset or liability are reflected in our consolidated balance sheets as deferred tax assets of $3.0 million and $3.2 million, respectively, and deferred tax liabilities of $62.5 million and $4.9 million, respectively.
---	---

Both the 2024 and 2023 balances are based on a U.S. federal tax rate of 21%. F-36

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Tax Attributes and Valuation Allowances

Changes in our valuation allowance are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024			2023			2022
Balance at beginning of period		$	(1,177)		$	(607)		$	(735)
Additions to valuation allowance	​	​	(455)	​	​	(742)	​	​	(88)
Reductions to valuation allowance	​	​	170	​	​	172	​	​	216
Balance at end of period	​	$	(1,462)	​	$	(1,177)	​	$	(607)

​

Pursuant to Sections 382 and 383 of the Code, utilization of loss and credit carryforwards are subject to annual limitations due to any ownership changes of 5% stockholders. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a rolling three–year period. We do not currently expect that any loss carryforwards or credit carryforwards will expire as a result of any 382 or 383 limitations. Our ability to utilize loss carryforwards and credit carryforwards against future U.S. federal taxable income and future U.S. federal income tax may be limited in the future if we have a 50% or more ownership change in our 5% stockholders.

We record valuation allowances when it is more-likely-than-not that some portion or all of our deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character and in the appropriate taxing jurisdictions in the future. If we do not meet our expectations with respect to taxable income, we may not realize the full benefit from our deferred tax assets, which would require us to record a valuation allowance in our tax provision in future years. As of each reporting date, we consider new evidence to evaluate the realizability of our net deferred tax asset position by assessing the available positive and negative evidence. Changes to the valuation allowance are reflected in the statement of operations.

The amount of our deferred tax assets considered realizable could be adjusted if projections of future taxable income are reduced or objective negative evidence in the form of a three–year cumulative loss is present or both. Should we no longer have a level of sustained profitability, excluding nonrecurring charges, we will have to rely more on our future projections of taxable income to determine if we have an adequate source of taxable income for the realization of our deferred tax assets, namely NOL, interest expense limitation, and tax credit carryforwards. This may result in the need to record a valuation allowance against all or a portion of our deferred tax assets.

As of December 31, 2024, we recorded a valuation allowance of $0.9 million on our deferred tax asset associated with our ECOTEC investment.

At December 31, 2024, we had U.S. federal and state NOL carryforwards of $632.3 million and $261.5 million, respectively, included in our NOL deferred tax asset that are available to offset future taxable income. If not used, the federal and state NOL carryforwards will begin to expire in 2037 and 2026, respectively, though $629.4 million of the U.S. federal and $162.9 million of the state NOL carryforwards have no expiration date. In connection with the state NOL deferred tax asset, we recorded a valuation allowance of $0.5 million as of both December 31, 2024 and 2023.

At December 31, 2024, we had a U.S. federal tax credit carryforward of $3.0 million. If not used, the federal tax credit carryforward will begin to expire in 2037.

As of December 31, 2024, we had U.S. federal and state interest expense limitation carryforwards of $185.8 million and $59.4 million, respectively, included in our interest expense limitation deferred tax asset that are available to offset future taxable income. These carryforwards have no expiration. F-37

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Unrecognized Tax Benefits

Changes in our unrecognized tax benefits (including discontinued operations) are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024			2023			2022
Beginning balance		$	19,465		$	19,651		$	19,594
Additions based on tax positions related to current year	​		2,402	​		1,886	​		2,151
Additions based on tax positions related to prior years	​		—	​		—	​		6
Reductions based on tax positions related to prior years	​		(18)	​		(7)	​		(105)
Reductions based on lapse of statute of limitations	​		(2,382)	​		(2,065)	​		(1,995)
Ending balance	​	$	19,467	​	$	19,465	​	$	19,651

​

We had $19.5 million, $19.5 million and $19.7 million of unrecognized tax benefits at December 31, 2024, 2023 and 2022, respectively, of which $(0.6) million, $1.1 million and $1.1 million, respectively, would affect the effective tax rate if recognized and $7.9 million, $7.9 million and $7.9 million, respectively, would be reflected in income from discontinued operations, net of tax if recognized.

We recorded $2.7 million, $2.5 million and $2.1 million of potential interest expense and penalties related to unrecognized tax benefits associated with uncertain tax positions (including discontinued operations) in our consolidated balance sheets as of year ended December 31, 2024, 2023 and 2022, respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as reductions in income tax expense. We recorded $0.3 million of potential expenses or releases of interest or penalties in our consolidated statements of operations during 2024, $0.3 million of potential expenses or releases of interest or penalties during 2023, and no potential interest expense and penalties during 2022.

Subject to the provisions of our tax matters agreement with Exterran Corporation, both parties agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin–off (including any ongoing or future amendments and audits for these returns) for the portion of the tax liability (including interest and penalties) that relates to their respective operations reported in the filing. As of December 31, 2024 and 2023, we recorded an indemnification asset (including penalties and interest) of $7.9 million and $7.9 million, respectively, which is related to unrecognized tax benefits in our consolidated balance sheets (see Note 28 (“Discontinued Operations”)).

We and our subsidiaries file consolidated and separate income tax returns in the U.S. federal and state jurisdictions. U.S. federal and state income tax returns are generally subject to examination for a period of three to five years after filing the returns. The state impact of any U.S. federal audit adjustments and amendments remains subject to examination by various states for up to one year after formal notification to the states. Due to our NOL carryforwards, our U.S. federal and state income tax returns can be examined back to the inception of our NOL carryforwards; therefore, expanding our examination period beyond 20 years.  We are not currently involved in federal nor any state income tax audits.

As of December 31, 2024, we believe it is reasonably possible that $3.6 million of our unrecognized tax benefits, including penalties, interest and discontinued operations, will be reduced prior to December 31, 2025 due to the settlement of audits or the expiration of statutes of limitations or both. However, due to the uncertain and complex application of the tax regulations, it is possible that the ultimate resolution of these matters may result in liabilities that could materially differ from this estimate. F-38

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Impact of New Legislation

​

The Organization for Economic Co-operation and Development has proposed a framework to implement a global minimum tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2). During 2023, many countries took steps to incorporate Pillar 2 model rule concepts into their domestic laws. While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which our unconsolidated affiliates operate have adopted legislation. Based on enacted law we have determined that Pillar 2 does not have a material impact on our Financial Statements.

25. Earnings per Common Share

Basic earnings per common share is computed using the two-class method, which is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic earnings per common share is determined by dividing net income, after deducting amounts allocated to participating securities, by the weighted-average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock-settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, only distributed earnings (dividends) are allocated to participating securities, as participating securities do not have a contractual obligation to participate in our undistributed losses.

Diluted earnings per common share is computed using the weighted-average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding performance-based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would have been anti-dilutive.

The following table shows the calculation of net income attributable to common stockholders, which is used in the calculation of basic and diluted earnings per common share, potential shares of common stock that were included in computing diluted earnings per common share and the potential shares of common stock issuable that were excluded from computing diluted earnings per common share as their inclusion would have been anti-dilutive:

​

​	​	​	​	​	​	​	​	​	​
​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		****	2023		****	2022
Net income	​	$	172,231	​	$	104,998	​	$	44,296
Less: Allocation of earnings to participating securities	​		(2,279)	​		(1,878)	​		(1,429)
Net income attributable to common stockholders	​	$	169,952	​	$	103,120	​	$	42,867
​	​	​	​	​	​	​	​	​	​
Less: Allocation of earnings to cash or share settled restricted stock units	​	​	1,004	​	​	—	​	​	—
Diluted net income attributable to common stockholders	​	$	170,956	​	$	103,120	​	$	42,867
​	​	​	​	​	​	​	​	​	​
Weighted-average common shares outstanding used in basic earnings per common share	​	​	162,037	​	​	154,126	​	​	153,281
Effect of dilutive securities:	​	​	​	​	​	​	​	​	​
Performance-based restricted stock units	​	​	328	​	​	207	​	​	125
ESPP shares	​	​	10	​	​	11	​	​	4
Weighted-average common shares outstanding used in diluted earnings per common share	​	​	162,375	​	​	154,344	​	​	153,410

​

​

​

​ F-39

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

26. Derivatives and Hedging

Prior to the expiration of our interest rate swaps in March 2022, we used derivative instruments to manage our exposure to fluctuations in the variable interest rate of our Credit Facility. We did not use derivative instruments for trading or other speculative purposes.

The effect of our derivative instruments on our consolidated statements of operations is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		****	2023		****	2022
Total amount of interest expense in which the effects of cash flow hedges and undesignated interest rate swaps are recorded	​	$	—	​	$	—	​	$	101,259
​	​	​	​	​	​	​	​	​	​
Interest rate swaps designated as cash flow hedging instruments:	​	​	​	​	​	​	​	​	​
Pre-tax loss recognized in other comprehensive income	​	$	—	​	$	—	​	$	(512)
Pre-tax loss reclassified from accumulated other comprehensive loss into interest expense	​		—	​		—	​		(1,758)
​	​	​	​	​	​	​	​	​	​
Interest rate swaps not designated as hedging instruments:	​	​	​	​	​	​	​	​	​
Gain recognized in interest expense	​	$	—	​	$	—	​	$	523

​

See Note 18 (“Stockholders’ Equity”) for further details on our derivative instruments.

27. Fair Value Measurements

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

●	Level 1 – quoted unadjusted prices for identical markets 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 markets makers.
---	---
●	Level 3 – model–derived valuation in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information.
---	---

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Investment in ECOTEC

​

As of December 31, 2024, we owned a 25% equity interest in ECOTEC (see Note 13 (“Investments in Unconsolidated Affiliates”)). We have elected the fair value option to account for this investment. As of December 31, 2024, the fair value of our investment in ECOTEC is $14.7 million. F-40

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The fair value determination of this investment primarily consisted of unobservable inputs, which creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement, which was valued through an average of an income approach (discounted cash flow method) and a market approach (guideline public company method), are the WACC and the revenue multiples. Significant increases (decreases) in these inputs in isolation would result in a significantly higher (lower) fair value measurement.

This fair value measurement is classified as Level 3. The significant unobservable inputs are as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Significant		​	Year Ended					​	Year Ended
​	​	Unobservable		​	December 31, 2024					​	December 31, 2023
​	​	Inputs		​	Range		​	Median		​	Range		​	Median
Valuation technique:		​	​	​	​	​	​	​	​	​	​	​	​	​	​
Discounted cash flow	​	WACC		​	0.0% - 17.0%		​	​	12.9%	​	0.4% - 20.0%		​	​	13.5%
Guideline public company	​	Revenue multiple		​	1.6x - 7.3x		​	​	4.3x	​	1.5x - 7.2x		​	​	3.8x

​

The reconciliation of changes in the fair value of our investment in ECOTEC is as follows:

​

​	​	​	​	​	​	​	​
​	​	​	Year Ended December 31,
(in thousands)	​	​	​	2024	​	​	2023
Balance at beginning of period		​	$	14,905		$	12,803
Purchases of equity interests	​	​	​	1,250	​	​	3,075
Unrealized loss ^(1)^	​	​	​	(1,484)	​	​	(973)
Balance at end of period	​	​	$	14,671	​	$	14,905
^(1)^	Included in other expense, net in our consolidated statements of operations.
---	---

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Investment in Ionada

As of December 31, 2024 and 2023, we had a fully diluted ownership equity interest in Ionada of 12% and 10%, respectively, (see Note 13 (“Investments in Unconsolidated Affiliates”)). We have elected the fair value measurement alternative to account for this investment. On November 19, 2024, subject to the same terms and conditions of our initial investment of $3.8 million, we invested an additional $1.2 million dollars and as a result, the carrying value of our investment in Ionada at December 31, 2024 was $5.5 million, which includes cumulative transaction costs of $0.5 million. There were no upward adjustments, impairments or downward adjustments to the carrying value of the investment as of December 31, 2024. Subject to certain contractual conditions, we may invest on the same terms and conditions as the initial and secondary investments, $1.3 million in November 2025 and $4.8 million prior to July 2026, for a fully diluted ownership interest of 15% and 24%, respectively.

Compression Fleet

During the years ended December 31, 2024 and 2023, we recorded nonrecurring fair value measurements related to our idle compressors. Our estimate of the compressors’ fair value was primarily based on the expected net sale proceeds compared to other fleet units we recently sold, 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. These fair value measurements are classified as Level 3.

The fair value of our impaired compression fleet impaired is as follows:

​

​	​	​	​	​	​	​
(in thousands)	​	2024		​	2023

F-41

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Impaired compression fleet	​	$	1,048	​	$	1,423

​

The significant unobservable inputs used to develop the above fair value measurements were weighted by the relative fair value of the compression fleet being measured. Additional quantitative information related to our significant unobservable inputs follows:

​

​	​	​	​	​
​	****	Range	****	Weighted Average ^(1)^
Estimated net sale proceeds:	​	​	​	​
As of December 31, 2024	​	$0 - $188 per horsepower	​	$46 per horsepower
As of December 31, 2023	​	$0 - $294 per horsepower	​	$50 per horsepower
(1)	Calculated based on an estimated discount for market liquidity of 25% and 33% as of December 31, 2024 and 2023, respectively.
---	---

See Note 22 (“Long-Lived and Other Asset Impairment”) for further details.

Other Financial Instruments

The carrying amounts of our cash, receivables and payables approximate fair value due to the short–term nature of those instruments.

The carrying amount of borrowings outstanding under our Credit Facility approximates fair value due to its variable interest rate. The fair value of these outstanding borrowings is a Level 3 measurement.

The fair value of our fixed rate debt is estimated using yields observable in active markets, which are Level 2 inputs, and was as follows:

​

​	​	​	​	​	​	​
(in thousands)	​	December 31,
​	​	2024		​	2023
Carrying amount of fixed rate debt ^(1)^	​	$	1,790,051	​	$	1,297,844
Fair value of fixed rate debt	​		1,796,000	​		1,289,000
(1)	Carrying amounts are shown net of unamortized debt premium and deferred financing costs. See Note 16 (“Long-Term Debt”).
---	---

​

​

28. Discontinued Operations

In order to effect the Spin-off and govern our relationship with Exterran Corporation after the Spin-off, we entered into several agreements with Exterran Corporation, including a tax matters agreement, which governs the respective rights, responsibilities and obligations of Exterran Corporation and us with respect to certain tax matters. As of both December 31, 2024 and 2023, we had $7.9 million of unrecognized tax benefits (including interest and penalties) related to Exterran Corporation operations prior to the Spin-off recorded to liabilities of discontinued operations in our consolidated balance sheets. We had an offsetting indemnification asset of $7.9 million related to these unrecognized tax benefits recorded to assets of discontinued operations as of both December 31, 2024 and 2023.

Assets and liabilities of discontinued operations are as follows:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	​	2024		​	2023
Other assets	​	$	7,868	​	$	7,868
Deferred tax assets	​	​	—	​	​	—
Assets of discontinued operations	​	$	7,868	​	$	7,868
​	​	​	​	​	​	​
Deferred tax liabilities	​	$	7,868	​	$	7,868

F-42

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Liabilities of discontinued operations	​	$	7,868	​	$	7,868

​

The acquisition of Exterran Corporation by Enerflex, Ltd. in October 2022 had no impact on the Spin–off related agreements discussed above.

​

​

​

29. Related Party Transactions

ECOTEC

​

During the year ended December 31, 2024, we made purchases of $0.5 million from our unconsolidated affiliate ECOTEC for use in our operations.

Hilcorp

From August 2019 to present, our Board of Directors has included a member affiliated with our customer Hilcorp or its subsidiaries or affiliates. Revenue from Hilcorp and affiliates was $40.7 million, $35.4 million and $36.2 million during the years ended December 31, 2024, 2023 and 2022, respectively. Accounts receivable, net due from Hilcorp and affiliates was $3.6 million and $3.8 million as of December 31, 2024 and 2023, respectively (see Note 6 (“Accounts Receivable, net”)).

30. Segments

We manage our business segments primarily based on the type of product or service provided. We operate two segments within the U.S.: contract operations and aftermarket services. The contract operations segment provides natural gas compression services to meet specific customer requirements. The aftermarket services segment provides a full range of services to support the compression needs of customers, from parts sales and normal maintenance services to full operation of a customer’s owned assets.

The CODM of Archrock is our President & CEO. Our CODM evaluates the performance of our segments and allocates resources primarily based on adjusted gross margin, defined as revenue less cost of sales, exclusive of depreciation and amortization, which are key components of segment operations. Adjusted gross margin is the primary measure used by our CODM to evaluate segment performance because it focuses on the current performance of segment operations and excludes the impact of the prior historical costs of assets acquired or constructed that are utilized in those operations, the indirect costs associated with our SG&A activities, our financing methods and income taxes. Our CODM considers adjusted gross margin forecast to actual results and period over period financial variances in conjunction with product and customer service metrics and market trends when assessing segment performance and deciding how to allocate resources.

As an indicator of our operating performance, adjusted gross margin should not be considered an alternative to, or more meaningful than, gross margin, net income (loss) or any other measure presented in accordance with GAAP. Our adjusted gross margin may not be comparable to a similarly titled measure of other entities because other entities may not calculate adjusted gross margin in the same manner. F-43

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

Summarized financial information for our reporting segments is shown below:

​	​	​	​	​	​	​	​	​	​
​		Contract			Aftermarket			​	​
(in thousands)		Operations			Services			Total
2024		​			​			​
Revenue^(1)^	​	$	980,405	​	$	177,186	​	$	1,157,591
Cost of sales, exclusive of depreciation and amortization	​	​	323,052	​	​	135,449	​	​	458,501
Adjusted gross margin	​		657,353	​		41,737	​		699,090
​	​	​	​	​	​	​	​	​	​
2023	​			​			​
Revenue^(1)^	​	$	809,439	​	$	180,898	​	$	990,337
Cost of sales, exclusive of depreciation and amortization	​	​	306,748	​	​	142,271	​	​	449,019
Adjusted gross margin	​		502,691	​		38,627	​		541,318
​	​	​	​	​	​	​	​	​	​
2022	​			​			​
Revenue^(1)^	​	$	677,801	​	$	167,767	​	$	845,568
Cost of sales, exclusive of depreciation and amortization	​	​	278,898	​	​	140,586	​	​	419,484
Adjusted gross margin	​		398,903	​		27,181	​		426,084

(1) Segment revenue includes only sales to external customers.

​

The following table reconciles adjusted gross margin to gross margin, its most directly comparable to GAAP measure:

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024		****	2023		****	2022
Total revenues	​	$	1,157,591	​	$	990,337	​	$	845,568
Cost of sales, exclusive of depreciation and amortization	​		(458,501)	​		(449,019)	​		(419,484)
Depreciation and amortization	​		(193,194)	​		(166,241)	​		(164,259)
Gross margin	​		505,896	​		375,077	​		261,825
Depreciation and amortization	​	​	193,194	​	​	166,241	​	​	164,259
Adjusted gross margin	​	$	699,090	​	$	541,318	​	$	426,084

​

The following table reconciles total adjusted gross margin to income before income taxes:

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024			2023			2022
Total adjusted gross margin	​	$	699,090	​	$	541,318	​	$	426,084
Less:	​			​			​
Selling, general and administrative	​		139,121	​		116,639	​		117,184
Depreciation and amortization	​		193,194	​		166,241	​		164,259
Long-lived and other asset impairment	​		10,681	​		12,041	​		21,442
Restructuring charges	​	​	—	​	​	1,775	​	​	—
Debt extinguishment loss	​	​	3,181	​	​	—	​	​	—
Interest expense	​		123,610	​		111,488	​		101,259
Transaction-related costs	​	​	13,249	​	​	—	​	​	—
Gain on sale of assets, net	​	​	(17,887)	​	​	(10,199)	​	​	(40,494)
Other expenses, net	​		1,561	​		1,086	​		1,845
Income before income taxes	​	$	232,380	​	$	142,247	​	$	60,589

​ F-44

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Archrock, Inc.

Notes to Consolidated Financial Statements (continued)

The following table reconciles capital expenditures by segment to total capital expenditures:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2024			2023			2022
Contract Operations	​	$	353,785	​	$	294,315	​	$	237,246
Aftermarket services	​		3,277	​		3,300	​		1,964
Segment capital expenditures	​		357,062	​		297,615	​		239,210
Other ^(1)^	​		1,970	​		1,017	​		657
Total capital expenditures	​	$	359,032	​	$	298,632	​	$	239,867

(1) Corporate–related items.

​

The following table reconciles total assets by segment to total assets per the consolidated balance sheets:

​

​	​	​	​	​	​	​
​	****	December 31,
(in thousands)	****	2024		​	2023
Contract operations assets	​	$	3,677,056	​	$	2,518,282
Aftermarket services assets	​		57,642	​		57,459
Segment assets	​	​	3,734,698	​	​	2,575,741
Other assets ^(1)^	​	​	81,639	​	​	72,341
Assets of discontinued operations	​	​	7,868	​	​	7,868
Total assets	​	$	3,824,205	​	$	2,655,950

(1) Corporate–related items.

​ F-45

Exhibit 10.30

​

Exhibit A

​

AMENDMENT TO THE ARCHROCK, INC.

2020 STOCK INCENTIVE PLAN

This Amendment to the Archrock, Inc. 2020 Stock Incentive Plan (this “Amendment”) is dated February 19, 2025, and amends the Archrock, Inc. 2020 Stock Incentive Plan, as amended (the “Plan”) pursuant to Article XIV of the Plan.

1.	Paragraph IV(d) of the Plan is hereby amended and restated in its entirety to read as follows:

**(d)**Delegation of Powers.  Subject to Paragraph IV(a) above, the Committee may delegate to the Board or to one or more other subcommittees of the Board comprised of one or more independent Directors and/or officers of the Company the authority to grant Awards to Employees who are not subject to Section 16 of the Exchange Act. Notwithstanding the foregoing, if the Committee delegates to a subcommittee comprised of one or more officers of the Company (who are not also Directors) the authority to grant Awards, the resolution so authorizing such subcommittee shall specify the total number of shares of Common Stock such subcommittee may award pursuant to such delegated authority. Further, the Committee may delegate to the Governance Committee of the Board the authority to make non-discretionary (routine) Awards to Directors, including to determine which Director shall receive an Award, the time or times when such an Award shall be made, the terms and conditions of such an Award, the type of Award that shall be made to a Director, the number of shares subject to such an Award, and the value of such an Award; provided, however, that the Committee may not delegate its authority to grant discretionary (non-routine) Awards to Directors. The Committee may delegate to the Chief Executive Officer or one or more other senior officers of the Company its administrative functions under this Plan with respect to the Awards. Any delegation described in this paragraph shall contain such limitations and restrictions as the Committee may provide and shall comply in all respects with the requirements of applicable law, including the Delaware General Corporation Law. The Committee may engage or authorize the engagement of a third party administrator or administrators to carry out administrative functions under the Plan.

No member of the Committee or officer of the Company or an Affiliate or other person to whom the Committee has delegated authority in accordance with the provisions of Paragraph IV of this Plan shall be liable for anything done or omitted to be done by him or her, by any member of the Committee or by any officer of the Company or Affiliate or other person in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute or otherwise required under applicable Law, including the Delaware General Corporation Law, or Company’s corporate charter or bylaws.

2.This Amendment shall be and is hereby incorporated into and forms a part of the Plan.

3.Except as expressly provided herein, all terms and conditions of the Plan shall remain in full force and effect.

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​ [Signature Page Follows]

I hereby certify that the foregoing Amendment was duly approved by the Compensation Committee of the Board of Directors of Archrock, Inc., effective as of the date first set forth above.

​	By:	​
​	​	Name:	D. Bradley Childers
​	​	Title:	Chief Executive Officer

​ [Amendment to 2020 Stock Incentive Plan]

Exhibit 10.41

EXECUTION VERSION

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SIXTH AMENDED AND RESTATED OMNIBUS AGREEMENT

BY AND AMONG

ARCHROCK, INC.

AROC CORP.

AROC SERVICES GP LLC

AROC SERVICES LP LLC

ARCHROCK SERVICES, L.P.

ARCHROCK SERVICES LEASING LLC

ARCHROCK ELT LLC

TOTAL OPERATIONS AND PRODUCTION SERVICES, LLC

ARCHROCK ECOTEC LLC

ARCHROCK IONADA LLC

ARCHROCK FGC LLC

ARCHROCK GP LLC

ARCHROCK GP LP LLC

ARCHROCK MLP LP LLC

ARCHROCK GENERAL PARTNER, L.P.

ARCHROCK PARTNERS CORP.

ARCHROCK PARTNERS, L.P.

ARCHROCK PARTNERS OPERATING LLC

ARCHROCK PARTNERS LEASING LLC

AND

ARCHROCK PARTNERS FINANCE CORP.

AUGUST 30, 2024

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TABLE OF CONTENTS

​	​	​
ARTICLE I DEFINITIONS		1
​		​
1.1	Definitions	1
​	​	​
ARTICLE II BUSINESS OPPORTUNITIES		8
​		​
2.1	Overlapping Customers	8
2.2	New Customers	8
2.3	Scope of the Prohibition	8
2.4	Lease Takeover Arrangements	8
2.5	Volitional Customer Allocations	9
2.6	Enforcement	9
2.7	Non-Compression Equipment at a Particular Site	9
​	​	​
ARTICLE III SHARED EMPLOYEES AND AGENT COSTS		9
​		​
3.1	Provision of and Reimbursement for OPCO’s Shared Employees, Agent Goods and Services, and Corporate Overhead	9
3.2	Provision of and Reimbursement for TOPS’ Shared Employees, Agent Goods and Services, and Corporate Overhead	10
​	​	​
ARTICLE IV COMPRESSION EQUIPMENT TRANSFERS		11
​		​
4.1	Transfer Mechanics	11
4.2	Settlement; Appraised Value	13
4.3	Other Sales Permitted	14
4.4	Proration of Ad Valorem Taxes	14
​	​	​
ARTICLE V LICENSE		15
​		​
5.1	Grant of License	15
5.2	Restrictions on Marks	15
5.3	Ownership	15
5.4	Confidentiality	15
5.5	Estoppel	16
5.6	Warranties; Disclaimers	16
​	​	​
ARTICLE VI INDEMNIFICATION		16
​		​
6.1	Environmental Indemnification	16
6.2	Additional Indemnification	17
6.3	Limitations Regarding Indemnification	18
6.4	Indemnification Procedures	18
​	​	​
ARTICLE VII TAX SHARING		20

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7.1	Filing of Combined Returns and Payment of Tax	20
7.2	Allocation and Reimbursement of Combined Tax Liability	20
7.3	Adjustments to Combined Tax Liability	20
7.4	Miscellaneous	21
​	​	​
ARTICLE VIII MISCELLANEOUS		21
​		​
8.1	Governing Law; Submission to Jurisdiction	21
8.2	Notices	21
8.3	Entire Agreement	22
8.4	Waivers of Default	22
8.5	Amendments	22
8.6	Assignability; Third Party Beneficiaries	22
8.7	Counterparts	23
8.8	Severability	23
8.9	Interpretation	23
8.10	Further Assurances	23
8.11	Withholding or Granting of Consent	23
8.12	Laws and Regulations	23
8.13	Negation of Rights of Limited Partners, Assignees and Third Parties	23
8.14	No Recourse Against Officers or Directors	24
8.15	Right of Offset	24
​	​	​
EXHIBITS AND SCHEDULES		​
​		​
Schedule 3.1(a) – Services		​
Exhibit 1 – Form Bill of Sale		​
Exhibit 2 – Form Lease Agreement		​
Exhibit 3 – [RESERVED]		​
Exhibit 4 – Archrock Customers		​
Exhibit 5 – Partnership Customers		​

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SIXTH AMENDED AND RESTATED

OMNIBUS AGREEMENT

THIS SIXTH AMENDED AND RESTATED OMNIBUS AGREEMENT is entered into on, and effective as of August 30, 2024 (the “Effective Date”), by and among Archrock, Inc., a Delaware corporation (“Archrock”), AROC Corp., a Delaware corporation, AROC Services GP LLC, a Delaware limited liability company, AROC Services LP LLC, a Delaware limited liability company, Archrock Services, L.P., a Delaware limited partnership (“OPCO”), Archrock Services Leasing LLC, a Delaware limited liability company, Archrock ELT LLC, a Delaware limited liability company, Total Operations and Production Services, LLC, a Delaware limited liability company (“TOPS”), Archrock Ecotec LLC, a Delaware limited liability company, Archrock Ionada LLC, a Delaware limited liability company, Archrock FGC LLC, a Delaware limited liability company, Archrock GP LLC, a Delaware limited liability company (“GP LLC”), Archrock GP LP LLC, a Delaware limited liability company, Archrock MLP LP LLC, a Delaware limited liability company, Archrock General Partner, L.P., a Delaware limited partnership (the “General Partner”), Archrock Partners Corp., a Delaware corporation, Archrock Partners, L.P., a Delaware limited partnership (the “Partnership”), Archrock Partners Operating LLC, a Delaware limited liability company (the “Operating Company”), Archrock Partners Leasing LLC, a Delaware limited liability company, and Archrock Partners Finance Corp., a Delaware corporation.  The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

RECITALS:

The Parties desire to amend and restate in its entirety the Fifth Amended and Restated Omnibus Agreement, dated as of April 26, 2018, by and among certain of the Parties, as amended to the date hereof (as so amended, the “Prior Omnibus Agreement”), to evidence, among other things, (i) the inclusion of additional entities as Parties due to various acquisitions and investments of pre-existing Parties and (ii) the modification of certain provisions of the Prior Omnibus Agreement as set forth herein.

In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1Definitions

(a)As used in this Agreement, the following terms shall have the respective meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

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“Agent Goods and Services” means goods or services that OPCO or TOPS procures while acting as agent for another Party.

“Agreement” means this Sixth Amended and Restated Omnibus Agreement, as it may be amended, modified or supplemented from time to time in accordance with the terms hereof.

“Appraisal” means an appraisal of Compression Equipment prepared by an Appraiser in conformity with, and subject to, the requirements of the code of professional ethics and standards of professional conduct of the American Society of Appraisers.  The Appraisal shall specify value based upon the cost or income approach or a combination thereof for the Compression Equipment appraised.

“Appraised Value” means an amount equal to (A) (i) the most recent Appraisal with respect to a particular piece of Compression Equipment owned by the USCSB or the Partnership Group at the time of the Appraisal or (ii) with respect to a particular piece of Compression Equipment for which an Appraisal has not been conducted, the Appraised Value of substantially similar Compression Equipment or (iii) an amount calculated by a Party, in its reasonable judgment, based on the sales price of nearly contemporaneous sales of substantially similar equipment, plus (B) to the extent not included in (A), any costs incurred by the Transferor pursuant to Section 4.1(b)(iv) to place the Compression Equipment in a condition appropriate for its anticipated commercial use, less (C) if there is no anticipated commercial use or if the anticipated commercial use is inconsistent with the historical use of the Compression Equipment at the time of its transfer and to the extent included in (A) above, such Party’s estimate, in its reasonable judgment, of any costs necessary to be incurred to place the Compression Equipment in good working order consistent with its most recent commercial use.

“Appraiser” means an appraiser mutually acceptable to the Transferor and Transferee that is independent with respect to the Archrock Entities and the Partnership Entities and their respective affiliates within the meaning of the code of professional ethics of the American Society of Appraisers.

“Archrock” has the meaning given such term in the introduction of this Agreement.

“Archrock Customers” means (a) the Persons set forth on Exhibit 4 and any of their respective Affiliates other than Affiliates otherwise set forth on Exhibit 5, (b) any New Customer that enters into an agreement with an Archrock Entity in accordance with Section 2.2 pursuant to which such Archrock Entity agrees to provide Compression Services to such New Customer and (c) any agreed to recharacterization of a Partnership Customer as an Archrock Customer in accordance with Section 2.5.

“Archrock Entities” means Archrock and any Person (other than the Partnership Entities) controlled, directly or indirectly, by Archrock; and “Archrock Entity” means any of the Archrock Entities.

“Archrock Site” means a Site of an Archrock Customer.

“Billed Party” has the meaning given such term in Section 4.4.

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“Code” means the Internal Revenue Code of 1986, as amended.

“Combined Return” means a state or local income or franchise tax return that is filed on a unitary combined basis and includes the activity of both an Archrock Entity and a Partnership Entity.

“Combined Tax Liability” means the tax liability reflected on a Combined Return, as finally adjusted.

“Compression Equipment” means natural gas compressor units, including electrically powered compressors, together with any tangible components thereof, all related appliances, parts, accessories, appurtenances, accessions, additions, improvements and replacements thereto, all other equipment or components of any nature from time to time incorporated or installed therein and all substitutions for any of the foregoing.

“Compression Services” means the provision by a Person of natural gas contract compression services to a third-party customer, whether pursuant to a Master Compression Services Agreement, a lease arrangement pursuant to which such Person leases Compression Equipment to a third-party customer (whether or not required to provide other compression services to such customer pursuant to one or more agreements) or otherwise.

“Compressor Logistics” means operation, maintenance, repair, overhaul and transportation duties performed by a Shared Employee with respect to equipment owned or leased by a Party other than OPCO or TOPS.

“Corporate Administration” means those administrative activities reasonably necessary for a Party to operate its business, including without limitation, those activities set forth on Schedule 3.1(a).

“Corporate Overhead” means overhead expenses incurred by OPCO other than Corporate Administration, and costs and expenses directly related to Compression Equipment.

“Covered Environmental Losses” has the meaning given such term in Section 6.1(a).

“Effective Date” has the meaning given such term in the introduction to this Agreement.

“Effective Time” has the meaning given such term in Section 4.1(b).

“Environmental Laws” means all federal, state, and local laws, statutes, rules, regulations, orders and ordinances, legally enforceable requirements and rules of common law relating to protection of the environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act and other environmental conservation and protection laws, each as amended through the applicable Closing Date.

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“Form Bill of Sale” means the form of Bill of Sale attached hereto as Exhibit 1, which form may be amended or replaced with a new form of Bill of Sale from time to time as long as such amended or replacement form does not materially conflict with the terms and provisions of this Agreement.

“Form Lease Agreement” means the form of Compression Equipment Lease Agreement attached hereto as Exhibit 2, which form may be amended or replaced with a new form of Compression Equipment Lease Agreement from time to time as long as such amended or replacement form does not materially conflict with the terms and provisions of this Agreement.

“General Partner” has the meaning given such term in the introduction to this Agreement.

“GP LLC” has the meaning given such term in the introduction to this Agreement.

“Hazardous Substance” means (a) any substance that is designated, defined or classified as a hazardous waste, hazardous material, pollutant, contaminant or toxic or hazardous substance, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as such term is defined under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, and (b) petroleum, petroleum products, crude oil, gasoline, fuel oil, motor oil, waste oil, diesel fuel, jet fuel and other petroleum hydrocarbons whether refined or unrefined and (c) asbestos, whether in a friable or a non-friable condition, and polychlorinated biphenyls.

“Indemnified Party” means either the Partnership Group or Archrock, as the case may be, each in its capacity as a party entitled to indemnification in accordance with Article VI.

“Indemnifying Party” means either the Partnership Group or Archrock, as the case may be, each in its capacity as a party from whom indemnification may be required in accordance with Article VI.

“Lease Takeover Arrangement” has the meaning given such term in Section 2.4.

“Licensees” means, for purposes of Article V hereof, the Subsidiaries of Archrock (excepting in their Licensor capacity, if any), including the Partnership Entities.

“Licensor” means, for purposes of Article V hereof, Archrock, together with any Mark-owning Archrock Entity.

“Liens” means any mortgages, pledges, security interests, liens, charges, claims, restrictions, easements or other encumbrances of any nature.

“Marks” means all current and future trademarks, trade names, logos and/or service marks held by any Archrock Entity, whether via ownership or licensing arrangement, that relate to the Licensees’ businesses and the services performed therewith.

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“Master Compression Services Agreement” means any form of master agreement utilized to document the provision of Compression Services, which may include any Archrock Entity’s standard form of Master Compression Services Agreement, any Partnership Entity’s standard form of Master Compression Services Agreement, an Archrock Customer’s master compression agreement, or a Partnership Customer’s master compression agreement,  in any of the foregoing cases whether a past, current or future form of such agreement, including negotiated versions of the same.

“New Customer” means any Person that is not an Archrock Customer or a Partnership Customer that informs any of the Parties hereto of a need for Compression Services.

“Non-Compression Equipment” means natural gas gathering, production and processing equipment and related appliances, parts, accessories, appurtenances, accessions, additions, improvements and replacements thereto, all other equipment or components of any nature from time to time incorporated or installed therein and all substitutions for any of the foregoing.

“OPCO” has the meaning given such term in the introduction to this Agreement.

“Operating Company” has the meaning given such term in the introduction to this Agreement.

“Organizational Documents” means certificates or articles of incorporation, by-laws, certificates of formation, limited liability company operating agreements, certificates of limited partnership or limited partnership agreements or other formation or governing documents of a particular entity.

“Other Losses” is defined in 6.2(a).

“Partnership” has the meaning given such term in the introduction to this Agreement.

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of the Partnership dated as of October 20, 2006, amended by Amendment No. 1 dated as of April 14, 2008 and amended by Amendment No. 2 dated as of December 20, 2017, as such agreement is in effect on the Effective Date, to which reference is hereby made for all purposes of this Agreement.  An amendment or modification to the Partnership Agreement subsequent to the Effective Date shall be given effect for the purposes of this Agreement only if it has received the approval of the Partnership that would be required, if any, pursuant to Section 8.5 hereof if such amendment or modification were an amendment or modification of this Agreement.

“Partnership Assets” means the compression services contracts and related customer relationships; gathering, processing or production services contracts and related customer relationships; and Compression Equipment and Non-Compression Equipment, owned by the Partnership Group

“Partnership Customers” means (a) the Persons set forth on Exhibit 5 and any of their respective Affiliates other than Affiliates otherwise set forth on Exhibit 4, (b) any New

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Customer that enters into an agreement with a member of the Partnership Group in accordance with Section 2.2 pursuant to which such member of the Partnership Group agrees to provide Compression Services to such New Customer and (c) any agreed to recharacterization of an Archrock Customer as a Partnership Customer in accordance with Section 2.5.

“Partnership Entities” means GP LLC, the General Partner and each member of the Partnership Group; and “Partnership Entity” means any of the Partnership Entities.

“Partnership Group” means the Partnership, the Operating Company and any Subsidiary of the Partnership or the Operating Company.

“Partnership Horsepower” means, with respect to a particular month, the quotient of (i) the sum of the aggregate amount of Compression Equipment horsepower owned or leased by the Partnership Group (excluding units owned by the Partnership Group but leased to USCSB), regardless of whether such Compression Equipment is working or idle, on the last day of the month immediately preceding such month and on the last day of each of such month, divided by (ii) two.

“Partnership Site” means a Site of a Partnership Customer.

“Party” or “Parties” have the meaning given such terms in the introduction to this Agreement.

“Permitted Liens” means (i) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business, (ii) Liens for taxes that are not due and payable or that may thereafter be paid without penalty, (iii) Liens securing debt of a transferor that will be released prior to or as of the date of the applicable transfer and (iv) other imperfections of title or encumbrances that, individually or in the aggregate, could not reasonably be expected to materially interfere with the ordinary operation of the Compression Equipment to which the Permitted Liens are attached.

“Person” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization, association, governmental agency or political subdivision thereof or other entity.

“Prior Omnibus Agreement” has the meaning given such term in the Recitals.

“Requesting Party” a Party requesting joint employment services by Shared Employees from OPCO or TOPS.

“Separate Tax Liability” means, for the tax period covered by a Combined Return, the amount of income or franchise tax that would have been imposed on the Partnership Group had the Partnership Group filed its own income or franchise tax return on a unitary combined basis including only activity of Partnership Entities included in the Combined Return and adopting all tax elections and accounting methods used on the Combined Return.

“Shared Employees” means employees jointly employed by OPCO or TOPS and one or more other Parties.

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“Site” means the specific geographic site at which a particular item of Compression Equipment engaged in is being utilized in the provision of Compression Services, as further specified by the customer contract, or any schedule thereto, pursuant to which such Compression Services are being provided.

“Subsidiary” means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

“Total Domestic Horsepower” means, with respect to a particular month, the sum of the USCSB Horsepower and the Partnership Horsepower.

“TOPS” has the meaning given such term in the introduction to this Agreement.

“Transferee” means a transferee of Compression Equipment pursuant to Article IV.

“Transferor” means a transferor of Compression Equipment pursuant to Article IV.

“USCSB” means the Archrock Entities’ U.S. contract Compression Services business

“USCSB Horsepower” means, with respect to a particular month, the quotient of (i) the sum of the aggregate amount of Compression Equipment horsepower owned or leased by USCSB (excluding units designated “for sale only” by the Archrock Entities or units owned by USCSB but leased to the Partnership Group), regardless of whether such Compression Equipment is working or idle, on the last day of the month immediately preceding such month and on the last day of such month, divided by (ii) two.

“Voluntary Cleanup Program” means a program of the United States or a state of the United States enacted pursuant to Environmental Laws which provides for a mechanism for the written approval of, or authorization to conduct, voluntary remedial action for the clean-up, removal or remediation of contamination that exceeds actionable levels established pursuant to Environmental Laws.

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ARTICLE II

BUSINESS OPPORTUNITIES

2.1Overlapping Customers.

(a)The Parties agree that in the event that, after the date of this Agreement, an Archrock Customer or a Partnership Customer requests Compression Services involving the provision of additional Compression Equipment or additional contract compression services at a Partnership Site or an Archrock Site, whether in addition to or in replacement of Compression Equipment or contract compression services existing at such Site as of the Effective Date, (i) any member of the Partnership Group shall be entitled to provide such Compression Services if such customer is a Partnership Customer and (ii) any Archrock Entity shall be entitled to provide such Compression Services if such customer is an Archrock Customer.

(b)Except as expressly provided otherwise in this Article II, the Parties agree that any offer by any of the Parties hereto to provide Compression Services to (i) a Partnership Customer in any state or territory of the United States shall be made solely on behalf of the Partnership Entities and (ii) an Archrock Customer in any state or territory of the United States shall be made solely on behalf of the Archrock Entities.

2.2New Customers.  The Parties agree that any offer by any of the Parties hereto to provide Compression Services to New Customers in any state or territory of the United States shall be first made on behalf of the Archrock Entities and shall include an offer to provide such Compression Services under an agreement substantially in the form of a Master Compression Services Agreement.  If a New Customer enters into an agreement with a member of the Partnership Group for Compression Services, then such New Customer will then constitute a Partnership Customer for the purposes of this Agreement and if, in accordance with this Section 2.2, a New Customer enters into an agreement with an Archrock Entity for Compression Services, then such New Customer will then constitute an Archrock Customer for the purposes of this Agreement.

2.3Scope of the Prohibition.  Except as provided in this Article II, each of the Parties shall be free to engage (whether directly or through the acquisition of or investment in equity or debt interests in any Person) in any business activity whatsoever, including those that may be in direct competition with any of the other Parties.

2.4Lease Takeover Arrangements.  If a Partnership Customer (or that customer’s applicable business) and an Archrock Customer (or that customer’s applicable business) enter into an arrangement whereby one assigns or otherwise disposes of certain mineral leasehold interests to the other or to a New Customer for whom Compression Services are provided by a Partnership Entity or an Archrock Entity, respectively (a “Lease Takeover Arrangement”), the Compression Services shall continue to be provided by the Partnership Entity or Archrock Entity that had provided the Compression Services to the assignor at the relevant Site(s). Notwithstanding the provision of Compression Services by a Partnership Entity to a customer as a result of a Lease Takeover Arrangement, if the assignee would qualify as a new customer but for the Lease Takeover Arrangement, then that assignee shall be deemed a New Customer for purposes of

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Section 2.2 with respect to any subsequent Compression Services provided that are not a result of a Lease Takeover Arrangement.

2.5Volitional Customer Allocations.  Notwithstanding anything in this Article II to the contrary, if at any time a Compression Services customer—whether a New Customer, an Archrock Customer and/or a Partnership Customer (each a “Customer”)—and/or its Compression Services provider—whether an Archrock Entity and/or a Partnership Entity—desire to consolidate their Compression Services with a particular Compression Services provider, then the parties to the underlying Compression Services contracts may allocate any or all existing and/or future Compression Services business via those Compression Services contracts to either an Archrock Entity or a Partnership Entity. Any agreed to reallocation of future Compression Services business shall be accompanied by a conforming redesignation of an Archrock Customer as a Partnership Customer or vice versa and will be memorialized via any relevant changes to or supplementation of Exhibits 4 and 5, each effective as of the effective date of such redesignation. Acknowledging that accommodating the wishes of Compression Services Customers and/or working toward a more customer-friendly and/or efficient invoicing framework (i.e., allowing receipt of invoices from either an Archrock Entity or a Partnership Entity, but ideally not both), for example, could ultimately benefit both the Archrock Entity and the Partnership Entity (e.g., via better customer relations, potentially additional Compression Services work and more efficient invoicing), the Parties agree that the aforementioned allocations may be made without further compensation to the entity from which those Compression Services contracts may be moved.

2.6Enforcement.  Each Party agrees and acknowledges that the other Parties hereto do not have an adequate remedy at law for the breach by such Party of the covenants and agreements set forth in this Article II, and that any breach by such Party of the covenants and agreements set forth in this Article II would result in irreparable harm to the other Parties hereto.  Each Party further agrees and acknowledges that the other Parties hereto may, in addition to the other remedies that may be available to the other Parties hereto, file a suit in equity to enjoin such Party from such breach, and consents to the issuance of injunctive relief under this Agreement.

2.7Non-Compression Equipment at a Particular Site.  Each Party agrees that if a member of the Partnership Group or an Archrock Entity owns and is operating Non-Compression Equipment at a particular site, that entity shall have the first right, but not the obligation, to expand the facility or capacity of such Non-Compression Equipment.

ARTICLE III

SHARED EMPLOYEES AND AGENT COSTS

3.1Provision of and Reimbursement for OPCO’s Shared Employees, Agent Goods and Services, and Corporate Overhead. Upon the reasonable request of a Party, OPCO shall (i) make Shared Employees available to such Party to provide Compressor Logistics and Corporate Administration and (ii) procure Agent Goods and Services, as agent for the Requesting Party, inclusive of those set forth on Schedule 3.1(a).

(a)The Shared Employees specified in Section 3.1 above shall be common law employees of both OPCO and the Requesting Party; OPCO and Requesting Party shall be co-employers or joint-employers with respect thereto. OPCO shall have authority and responsibility

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for, on behalf of itself and Requesting Parties, (1) training, evaluating, replacing, directing, controlling, supervising, disciplining, and terminating a Shared Employee, as necessary to conduct the Requesting Party’s business, discharge any applicable fiduciary duty, or comply with any licensure, regulatory, or statutory requirement; (2) goods and services produced by the Requesting Party; (3) the acts, errors, and omissions of Shared Employee committed within the scope of the Requesting Party’s business. OPCO will serve as agent of the other Parties for purposes of providing staff management and human resources services and for paying and providing wages, salary, benefits, worker’s compensation, unemployment insurance, and federal, state, and local tax withholding. All Parties utilizing Shared Employees shall reimburse OPCO on a dollar-for-dollar basis for their proportionate share of all actual costs and expenses that OPCO incurs as their agent with respect to their use of Shared Employees. The Parties may utilize any reasonable and mutually agreeable method for approximating their respective use of Shared Employees for purposes of calculating the Shared Employee reimbursement.

(b) OPCO shall, on behalf of itself and the Requesting Party, hire, fire, discipline, and reassign the assigned Shared Employees.

(c)OPCO shall, on behalf of itself and the Requesting Party, control the adoption of employment and safety policies and the management of workers’ compensation claims, claim filings, and related procedures.

(d)OPCO shall provide and administer employee benefits for the Shared Employees.

(e)The Requesting Party receiving Agent Goods and Services shall reimburse OPCO for the direct and indirect costs and expenses of procuring the Agent Goods and Services on such Party’s behalf. OPCO shall provide such Party with records supporting the amount of such costs and expenses.

(f)The Requesting Parties shall reimburse OPCO for their respective share of Corporate Overhead on any reasonable basis mutually agreeable to the Parties.

3.2Provision of and Reimbursement for TOPS’ Shared Employees, Agent Goods and Services, and Corporate Overhead Upon the reasonable request of a Party, TOPS shall (i) make Shared Employees available to such Party to provide Compressor Logistics and Corporate Administration and (ii) procure Agent Goods and Services, as agent for the Requesting Party, inclusive of those set forth on Schedule 3.1(a).

(a)The Shared Employees specified in Section 3.2 above shall be common law employees of both TOPS and the Requesting Party; TOPS and Requesting Parties shall be co-employers or joint-employers with respect thereto. TOPS shall have authority and responsibility for, on behalf of itself and the Requesting Party, (1) training, evaluating, replacing, directing, controlling supervising, disciplining, and terminating a Shared Employee, as necessary to conduct the Requesting Party’s business, discharge any applicable fiduciary duty, or comply with any licensure, regulatory, or statutory requirement; (2) goods and services produced by the Requesting Party; (3) the acts, errors, and omissions of Shared Employees committed within the scope of the Requesting Party’s business TOPS will serve as agent of the other Parties for purposes of providing

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staff management and human resources services and for paying and providing wages, salary, benefits, worker’s compensation, unemployment insurance, and federal, state, and local tax withholding. All Parties utilizing Shared Employees shall reimburse TOPS on a dollar-for-dollar basis for their proportionate share of all actual costs and expenses that TOPS incurs as their agent with respect to their use of Shared Employees. The Parties may utilize any reasonable and mutually agreeable method for approximating their respective use of Shared Employees for purposes of calculating the Shared Employee reimbursement.

(b)TOPS shall, on behalf of itself and the Requesting Party, hire, fire, discipline, and reassign the assigned Shared Employees.

(c)TOPS shall, on behalf of itself and the Requesting Party, control the adoption of employment and safety policies and the management of workers’ compensation claims, claim filings, and related procedures.

(d)TOPS shall, on behalf of itself and the Requesting Party, provide and administer employee benefits for the Shared Employees.

(e)The Requesting Party receiving Agent Goods and Services shall reimburse TOPS for the direct and indirect costs and expenses of procuring the Agent Goods and Services on such Party’s behalf. TOPS shall provide such Party with records supporting the amount of such costs and expenses.

(f)The Requesting Parties shall reimburse TOPS for their respective share of Corporate Overhead on any reasonable basis mutually agreeable to the Parties.

ARTICLE IV

COMPRESSION EQUIPMENT TRANSFERS

4.1Transfer Mechanics

(a)In the event an Archrock Entity or a Partnership Entity determines in good faith that there exists a need to transfer Compression Equipment between the Archrock Entities, on the one hand, and the Partnership Group, on the other hand, such Compression Equipment shall be so transferred (or, to the extent provided in Section 4.2, leased), from a member of the Archrock Entities to a member of the Partnership Group, or from a member of the Partnership Group to a member of the Archrock Entities, as the case may be; provided, that all of the following conditions are satisfied with respect to such transfer or lease (each such transfer or lease for the purposes of this Article IV, unless set forth otherwise, a “transfer”) at the Effective Time (as defined below) of such transfer:

(i)Except as provided in Section 4.2 in respect of Compression Equipment that is leased, such transfer will constitute a valid and absolute transfer (each such transfer, as the case may be, constituting a “true sale” for bankruptcy law purposes) of all right, title and interest of the Transferor in, to and under the transferred Compression Equipment, free and clear of any Liens except for any Liens created by the Transferee and any Permitted Liens;

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(ii)Such transfer will not conflict with any of the terms and provisions of, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Organizational Documents of the Transferor or the Transferee, or any material term of any indenture, agreement, mortgage, deed of trust, derivative instrument or other instrument to which the Transferor or Transferee or any of their respective subsidiaries is a party or by which either of them is bound, or result in the creation or imposition of any Lien upon any of their respective properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust, derivative instrument or other instrument, or violate any law or any order, rule, or regulation applicable to the Transferor or Transferee or any of their respective subsidiaries of any court or of any federal or state regulatory body, administrative agency, or other governmental authority having jurisdiction over either of them or any of their respective properties;

(iii)The Compression Equipment will be transferred under this Article IV in a condition appropriate for the Transferee’s anticipated commercial use; provided, that such anticipated commercial use shall be consistent with such equipment’s historical use; provided, further, that any repairs or modifications, or any costs associated therewith, required to make such Compression Equipment appropriate for the Transferee’s anticipated commercial use of such Compression Equipment shall be the obligation of the Transferor.  If there is no anticipated commercial use at the time of the transfer or the anticipated commercial use is inconsistent with the Compression Equipment’s historical use, the Compression Equipment will be transferred under this Article IV in its then-current condition.

In connection with each proposed transfer, each of the Transferee and the Transferor will use their respective commercially reasonable efforts to cause the conditions set forth above to be satisfied as of the Effective Time (as defined below).

(b)All transfers of Compression Equipment pursuant to this Section 4.1 shall be deemed to take place at 12:01 a.m. on the date of transfer (the “Effective Time”) and shall include all of the following assets, rights and properties of the Transferor with respect to such transferred Compression Equipment; provided, that with respect to transfers that are effected under a lease pursuant to Section 4.2, the following assets, rights and properties shall be so transferred to the extent provided for in, and not inconsistent with, the relevant lease agreement, and except as provided below:

(i)All Transferor-owned appliances, parts, instruments, machinery, accessories and other equipment attached or installed thereto;

(ii)The rights of the Transferor under all permits relating exclusively to such Compression Equipment, to the extent that such permits are transferable and the transfer of which is authorized or consented to by any third parties required to make such transfer effective as to third parties;

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(iii)Except in the case of a lease, all warranties and guarantees, if any, express or implied, existing for the benefit of the Transferor in connection with such Compression Equipment to the extent assignable;

(iv)Except in the case of a lease, any fuels, lubricants and maintenance supplies exclusively related to such Compression Equipment; and

(v)Except in the case of a lease, all vendor information, catalogs, technical information, specifications, designs, drawings and maintenance records related to such Compression Equipment and to which the Transferor has ready access without undue effort.

(c)Except as provided in Section 4.2 in respect of Compression Equipment that is leased, on the date of any transfer of Compression Equipment, the Transferor shall deliver or cause to be delivered to the Transferee the following:

(i)A general conveyance or bill of sale in the form of the Form Bill of Sale transferring to Transferee, as of the Effective Time, good, marketable and indefeasible title to all of the tangible personal property contemplated by Section 4.2(b) and included in the transferred Compression Equipment, free and clear of any Liens, except for any Liens created by the Transferee and except for Permitted Liens;

(ii)All appropriate documents for the assignment as of the Effective Time of the Transferor’s rights under the permits referred to in Section 4.1(b)(ii), together with all consents of third parties required to make such assignments effective as to such third parties; and

(iii)Such other instruments of transfer and assignment in respect of the transferred Compression Equipment as the Transferee shall reasonably require and as shall be consistent with the terms and provisions of this Agreement.

4.2Settlement; Appraised Value

(a)Prior to the Effective Time of any transfer pursuant to Section 4.1, the Partnership Group and the applicable Archrock Entity will determine the aggregate Appraised Value of the Compression Equipment to be so transferred.

(b)In consideration for such transfer, the Transferee, at its discretion (subject to the provisos of Sections 4.2(b)(ii) and (iii) and subject to Sections 4.2(b) and (c)), shall take any one or more of the following actions prior to or contemporaneously with the Effective Time of such transfer:

(i)Transfer Compression Equipment to the Transferor of equal or greater Appraised Value than the Appraised Value of the Compression Equipment to be transferred to the Transferee pursuant to Section 4.1 (provided, that if such Compression Equipment is of greater Appraised Value than the Appraised Value of the Compression Equipment to be transferred to the Transferee pursuant to Section 4.1, such excess Appraised Value shall be deemed to be a transfer of Compression Equipment with a value

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equal to such excess Appraised Value and Transferor shall be required to take one or more of the actions contemplated by this Section 4.2(b) in consideration for such excess Appraised Value) in accordance with this Article IV;

(ii)Execute and deliver a lease agreement substantially in the form of the Form Lease Agreement pursuant to which the Transferee agrees to lease from the Transferor the Compression Equipment to be transferred to the Transferee pursuant to Section 4.1, which lease agreement shall be counter-signed by the Transferor (provided, however, that the ability of the Transferee to execute and deliver such a lease may be limited in the sole discretion of Archrock, to the extent that an Archrock Entity is the Transferor, or in the sole discretion of the Partnership, to the extent that a member of the Partnership Group is the Transferor); or

(iii)Deliver to the Transferor cash (or an obligation to make payment in cash no later than 60 days following the end of the fiscal quarter in which the transfer is effected) in the amount of the aggregate Appraised Value of the Compression Equipment to be transferred to the Transferee pursuant to Section 4.1 (provided, however, that the ability of the Transferee to make such a payment may be limited in the sole discretion of Archrock, to the extent that an Archrock Entity is the Transferor, or in the sole discretion of the Partnership, to the extent that a member of the Partnership Group is the Transferor).

(c)In the event that the Transferee cannot through the use of its commercially reasonable efforts provide adequate consideration to the Transferor for Compression Equipment to be transferred in any of the manners set forth in Section 4.2(b), then no such transfer pursuant to the terms of this Article III shall occur.

(d)Notwithstanding Section 4.2(b), if the Transferor is a member of the Partnership Group, the Transferee shall not be entitled to take the actions contemplated by Section 4.2(b)(ii) if such action would cause the Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes.  In such event, if compliance by Archrock with Sections 4.2(b)(i) or (iii) is not commercially practicable, the Partnership and Archrock shall negotiate in good faith to reach agreement on another manner in which to reimburse the Partnership for such Compression Equipment; provided, that the final terms of such reimbursement shall be approved by the Partnership.

4.3Other Sales Permitted. Nothing otherwise set forth in this Article III shall be deemed to preclude any of the Archrock Entities and any member of the Partnership Group from negotiating or consummating at any time the purchase and sale of newly fabricated Compression Equipment, existing Compression Equipment or all or any part of the USCSB or Partnership Assets; provided, however, that such negotiations or purchase and sale shall be conducted pursuant to the terms and procedures then mutually agreed upon by Archrock and the General Partner or the Partnership, as applicable.

4.4Proration of Ad Valorem Taxes.  Ad valorem taxes (other than Texas ad valorem taxes subject to Texas Tax Code §§ 23.1241, 23.1242) relating to the ownership of Compression Equipment transferred pursuant to Section 4.1 shall be prorated on a daily basis between the Archrock Entities and the Partnership Group with the Archrock Entities and the Partnership Group

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responsible for the prorated portion of such taxes for the period (for purposes of this Section 4.4, “period” means the period beginning on the assessment date for ad valorem taxes through the day before the next assessment date for such taxes) of their respective ownership of such transferred Compression Equipment.  As between the Archrock Entities and the Partnership Group, the Party that receives the ad valorem tax billing (the “Billed Party”) shall provide a copy of such billing to the other Party together with a calculation of the prorated ad valorem taxes owed by each party.  The Party that did not receive the ad valorem tax billing shall pay its prorated portion of the ad valorem taxes to the Billed Party prior to the due date of such taxes and the Billed Party shall be responsible for the timely payment of the ad valorem taxes to the taxing authorities. No reimbursement will be required for Texas ad valorem taxes subject to Texas Tax Code § 23.1241, 23.1242.

ARTICLE V

LICENSE

5.1Grant of License.  Subject to the terms and conditions herein, Licensor hereby grants to Licensees a limited, royalty-free right and license to use the Marks within the United States during the term of this Agreement.

5.2Restrictions on Marks.  In order to ensure the quality of uses under the Marks, and to protect the goodwill of the Marks, Licensees agree as follows:

(a)Licensees will use the Marks only in accordance with such quality standards and specifications as may be established by Licensor and communicated to Licensees from time to time, it being understood that Licensor has evaluated Licensees’ businesses and services and determined that they are of a quality that justifies this grant of a license.  Licensees recognize the substantial goodwill associated with the Marks and will not permit the quality of the businesses or services with which Licensees use the Marks to deteriorate so as to affect adversely the goodwill associated with the Marks. Licensees will not cause any action, or permit or fail to prevent any action by Licensees’ affiliates or any other Party under Licensees’ control, that is deemed to injure, harm or dilute the distinctiveness or goodwill of the Marks;

(b)Licensees will only use the Marks in strict association with Licensees’ businesses and the services performed therewith;

5.3Ownership.  Licensor shall own all right, title and interest, including all goodwill relating thereto, in and to the Marks, and all trademark rights embodied therein shall at all times be solely vested in Licensor. Licensees have no right, title, interest or claim of ownership in the Marks, except for the licenses granted in this Agreement. All use of the Marks shall inure to the benefit of Licensor. Licensees agree that they will not attack the title of Licensor in and to the Marks.

5.4Confidentiality.  The Licensees shall maintain in strictest confidence all confidential or nonpublic information or material disclosed by Licensor and in the materials supplied hereunder in connection with the license of the Marks, whether in writing or orally and whether or not marked as confidential. Such confidential information includes, but is not limited to, algorithms, inventions, ideas, processes, computer system architecture and design, operator

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interfaces, operational systems, technical information, technical specifications, training and instruction manuals, and the like. In furtherance of the foregoing confidentiality obligation, Licensees shall limit disclosure of such confidential information to those of their employees, contractors or agents having a need to access the confidential information for the purpose of exercising rights granted hereunder.

5.5Estoppel.  Nothing in this Agreement shall be construed as conferring by implication, estoppel, or otherwise upon Licensees (a) any license or other right under the intellectual property rights of Licensor other than the license granted herein to the Marks as set forth expressly herein or (b) any license rights other than those expressly granted herein.

5.6Warranties; Disclaimers.  The Licensor represents and warrants that (i) it owns and has the right to license the Marks licensed under this Agreement and (ii) the Marks do not infringe upon the rights of any third parties.

(a)EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS DESCRIBED IN SECTION 5.5, LICENSOR DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO THE SUBJECT MATTER HEREOF, OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED OR EXPRESS WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS (WHETHER ANY LICENSEE KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.

ARTICLE VI

INDEMNIFICATION

6.1Environmental Indemnification.

(a)Subject to Section 6.3, Archrock shall indemnify, defend and hold harmless the Partnership Group from and against any environmental claims, losses and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by the Partnership Group by reason of or arising out of:

(i)any violation of Environmental Laws associated with the ownership or operation of the Partnership Assets;

(ii)any event or condition associated with ownership or operation of the Partnership Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Partnership Assets or the disposal or release of Hazardous Substances generated by operation of the Partnership Assets) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws or to satisfy any applicable

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Voluntary Cleanup Program, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action or other plans required or necessary under Environmental Laws or to satisfy any applicable Voluntary Cleanup Program and (C) the cost and expense for any environmental pre-trial, trial, or appellate legal or litigation support work; provided, in the case of clauses (A) and (B) such cost and expense shall not include the costs of and associated with project management and soil and ground water monitoring; or

(iii)but only to the extent that such violation complained of under Section 6.1(a)(i) or such events or conditions included under Section 6.1(a)(ii) occurred before the applicable Closing Date with respect to such Partnership Assets (collectively, “Covered Environmental Losses”).

(b)The Partnership Group shall indemnify, defend and hold harmless Archrock and its Affiliates from and against any Covered Environmental Losses suffered or incurred by Archrock and its Affiliates relating to the Partnership Assets occurring on or after the applicable Closing Date, except to the extent that the Partnership Group is indemnified with respect to any of such Covered Environmental Losses under Section 6.1(a), and unless such indemnification would not be permitted under the Partnership Agreement by reason of one of the provisos contained in Section 6.7(a) of the Partnership Agreement.

(c)Except for claims for Covered Environmental Losses made before the third anniversary of the applicable Closing Date, which shall not terminate, all indemnification obligations in this Section 6.1 shall terminate on the third anniversary of the applicable Closing Date.

6.2Additional Indemnification.

(a)In addition to and not in limitation of the indemnification provided under Section 6.1(a) and/or in any contribution agreement relating to any transaction involving the purchase or contribution of Partnership Assets, subject to Section 6.3 and except as otherwise set forth in any Exhibit hereto, Archrock shall indemnify, defend and hold harmless the Partnership Group from and against any claims, losses and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by the Partnership Group (“Other Losses” and, together with Covered Environmental Losses, “Losses”) by reason of or arising out of:

(i)failure to convey good and defensible title to the Partnership Assets to one or more members of the Partnership Group, and such failure render the Partnership Group unable to use or operate the Partnership Assets in substantially the same manner as they were operated by the Archrock Entities immediately prior to the applicable Closing Date with respect to such Partnership Assets;

(ii)events and conditions associated with the Retained Assets whether occurring before or after the applicable Closing Date;

(iii)all federal, state and local income tax liabilities attributable to the operation of the Partnership Assets prior to the applicable Closing Date, including any such

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income tax liabilities of Archrock that may result from the consummation of the formation transactions for the Partnership Entities; and

(iv)provided, however, that in the case of clauses (i) and (ii) above, such indemnification obligations shall terminate on the third anniversary of the applicable Closing Date; and that in the case of clause (iii) above, such indemnification obligations shall survive until sixty (60) days after the termination of any applicable statute of limitations.

(b)In addition to and not in limitation of the indemnification provided under Section 6.1(b), the Partnership Agreement and/or any contribution agreement relating to any transaction involving the purchase or contribution of Partnership Assets, and except as otherwise set forth in any Exhibit hereto, the Partnership Group shall indemnify, defend and hold harmless Archrock and its Affiliates from and against any claims, losses and expenses (including, without limitation, court costs and reasonable attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent, suffered or incurred by Archrock and its Affiliates by reason of or arising out of events and conditions associated with the operation of the Partnership Assets and occurring on or after the applicable Closing Date unless such indemnification would not be permitted under the Partnership Agreement by reason of one of the provisos contained in Section 6.7(a) of the Partnership Agreement.  Notwithstanding the foregoing, in the event this Section 6.2(b) conflicts with the terms and conditions of any instrument or agreement relating to the transfer of a particular Partnership Asset, the terms of that other instrument or agreement shall control.

6.3Limitations Regarding Indemnification.

(a)The aggregate liability of Archrock under Section 6.1(a) shall not exceed $5.0 million.

(b)No claims may be made against Archrock for indemnification pursuant to Sections 6.1(a) or 6.2(a) unless the aggregate dollar amount of the Losses suffered or incurred by the Partnership Group exceed $250,000, after such time Archrock shall be liable for the full amount of such claims, subject to the limitations of Section 6.3(a).

(c)Notwithstanding anything herein to the contrary, in no event shall Archrock have any indemnification obligations under Section 6.1(a) for claims made as a result of additions to or modifications of Environmental Laws promulgated after the applicable Closing Date with respect to a particular Partnership Asset.

6.4Indemnification Procedures.

(a)The Indemnified Party agrees that promptly after it becomes aware of facts giving rise to a claim for indemnification under this Article VI, it will provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim; provided, however, that the Indemnified Party shall not submit claims more frequently than once a calendar quarter (or twice in the case of the last calendar quarter prior to the expiration of the applicable indemnity coverage under this Agreement).

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(b)The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Article VI, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent of the Indemnified Party (with the concurrence of the Partnership in the case of the Partnership Group) unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be, and does not include the admission of fault, culpability or a failure to act, by or on behalf of such Indemnified Party.

(c)The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any claims covered by the indemnification under this Article VI, including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party, at no cost to the Indemnifying Party, of any employees of the Indemnified Party; provided, however, that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party and further agrees to endeavor to maintain the confidentiality of all files, records and other information furnished by the Indemnified Party pursuant to this Section 6.4.  In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article VI; provided, however, that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense.  The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.

In determining the amount of any loss, cost, damage or expense for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Indemnified Party and (ii) all amounts recovered by the Indemnified Party under contractual indemnities from third Persons.  The Partnership hereby agrees to use commercially reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under such contractual indemnities.

The date on which the Indemnifying Party receives notification of a claim for indemnification shall determine whether such claim is timely made.

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ARTICLE VII

TAX SHARING

7.1Filing of Combined Returns and Payment of Tax.

(a)Archrock shall prepare and timely file all required Combined Returns and shall timely pay the Combined Tax Liability to the appropriate taxing authority. Archrock may take all actions necessary or incidental to preparing and filing a Combined Return, including making elections, adopting accounting methods, filing extensions, filing refund claims, executing waivers, managing audits, contesting tax determinations before administrative or judicial bodies, executing closing or settlement agreements, and obtaining administrative rulings.

(b)The Partnership agrees to cooperate with Archrock in filing any Combined Return and agrees to take such action as Archrock may reasonably request in connection therewith, including providing information Archrock may reasonably request (and retaining such documentation through the statutory period for assessment) and executing election forms.

7.2Allocation and Reimbursement of Combined Tax Liability.

(a)For each Combined Return, Archrock, in its sole discretion, may require the Partnership to pay to Archrock the amount of Separate Tax Liability as reimbursement for the Partnership’s share of the Combined Tax Liability. Partnership shall pay such amount to Archrock on or before 45 days after the date Archrock files the related Combined Return.

(b)If Archrock is required to make estimated payments of Combined Tax Liability, Archrock may, at its sole discretion, estimate Separate Tax Liability and require the Partnership to pay Archrock an amount that equals the estimated Separate Tax Liability multiplied by the ratio of the estimated Separate Tax Liability to estimated Combined Tax Liability. The Partnership shall pay such amount to Archrock within 30 days after Archrock provides a written request for the payment, which request may not be made until after Archrock makes an estimated payment of Combined Tax Liability. Payments required from the Partnership under Section 7.2(a) above shall be reduced by amounts the Partnership pays under this subsection for the same tax year. If amounts the Partnership pays under this subsection for a given tax year exceed the amounts due under Section 7.2(a) for such tax year, Archrock shall pay such excess to the Partnership within 30 days of filing the Combined Return for that year.

7.3Adjustments to Combined Tax Liability.

(a)If Combined Tax Liability is adjusted for any taxable period, Archrock shall recalculate Separate Tax Liability to reflect such adjustment. If the adjustment increases Separate Tax Liability, Archrock may require the Partnership to pay it the amount of the increase. If the adjustment decreases Separate Tax Liability, Archrock shall pay the Partnership the amount of the decrease. The Party responsible for making payment under this subsection shall make such payment within 30 days of the earlier of Archrock either (i) filing an amended Combined Return or (ii) resolving the adjustment with the relevant taxing authority (e.g., by way of settlement or final administrative or judicial decision).

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(b)Any interest and/or penalty not specifically allocated to the Partnership by the taxing authority may be allocated to Partnership upon such basis as Archrock and the Partnership deem appropriate in view of applicable circumstances.

7.4Miscellaneous.

(a)This Agreement shall be interpreted with the intent of causing the Partnership to reimburse Archrock for the Partnership’s economic share of Combined Tax Liability. Archrock and the Partnership may, by written agreement, deviate from the terms of this Article VII to accomplish this intent.

(b)The provisions of this Article VII shall govern Combined Returns that include the activity of only Archrock and its wholly owned (directly and indirectly) subsidiaries and shall not apply to Combined Returns that include the activity of legal entities that Archrock does not wholly own (directly or indirectly).

(c)If the Parties terminate the Agreement, the provisions of this Article VII shall continue in effect with respect to payments or refunds due for all Combined Returns filed while the Agreement was in effect.

(d)The Parties shall be responsible for their own taxes not reported on a Combined Return. Archrock shall indemnify the Partnership against any Combined Tax Liability that is assessed against the Partnership to the extent the assessment exceeds Separate Tax Liability.

ARTICLE VIII

MISCELLANEOUS

8.1Governing Law; Submission to Jurisdiction.  This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby and thereby or to the inducement of any Party to enter herein and therein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed and construed and interpreted in accordance with the laws of the State of Texas, irrespective of the choice of laws principles of the State of Texas, including all matters of validity, construction, effect, enforceability, performance and remedies. Each Party hereby submits to the jurisdiction of the state and federal courts in the State of Texas and to venue in Texas.

8.2Notices.  Any notice, request, claim, demand or other communications required or permitted under this Agreement shall be in writing and delivered personally, by reputable overnight delivery or other reputable courier service or by certified mail, by postage prepaid, return receipt requested or by e-mail, and shall be deemed to have been duly given (a) as of the date of delivery if delivered personally or by overnight delivery service or other courier, or by e-mail (if delivered prior to 5:00 p.m. Central Time or, if thereafter, then as of the next day) or (b) on the date receipt is acknowledged if delivered by certified mail, addressed to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 8.2):

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If to any of the Archrock Entities, to:

9807 Katy Freeway, Suite 100 Houston, Texas 77024 Attention: General Counsel Email: Legal.Review@Archrock.com

If to any of the Partnership Entities, to:

9807 Katy Freeway, Suite 100 Houston, Texas 77024 Attention: General Counsel Email: Legal.Review@Archrock.com

Any Party may, by notice to the other Party, change the address and contact person to which any such notices are to be given.

8.3Entire Agreement.  This Agreement supersedes and replaces in its entirety the Prior Omnibus Agreement. This Agreement and the exhibits, annexes and schedules hereto, contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein.

8.4Waivers of Default.  Waiver by any Party of any default by another Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of such Party.  No failure or delay by any Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

8.5Amendments*.* No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom such waiver, amendment, supplement or modification is sought to be enforced.

8.6Assignability; Third Party Beneficiaries.  This agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns; provided, however, that no Party hereto may assign its respective rights or delegate its respective obligations under this Agreement without the express prior written consent of the other Parties hereto. Subject to the limitations set forth in Section 8.13, each of the Parties hereto specifically intends that each entity comprising the Archrock Entities and each entity comprising the Partnership Entities, as applicable, whether or not a Party to this Agreement, shall be entitled to assert rights and remedies hereunder as third-party beneficiaries hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to any such entity.

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8.7Counterparts.  This Agreement may be executed in one or more counterparts all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to each other Party.  Each Party hereto acknowledges that it and each other Party hereto may execute this Agreement by facsimile, stamp, mechanical signature or electronically. Each Party hereto expressly adopts and confirms each such facsimile, stamp, mechanical signature or electronic signature made in its respective name as if it were a manual signature, agrees that it shall not assert that any such signature is not adequate to bind such Party to the same extent as if it were signed manually and agrees that at the reasonable request of any other Party hereto at any time it shall as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof).

8.8Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid and unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.  Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

8.9Interpretation.  In this Agreement, words in the singular shall be held to include the plural, and vice versa and words of one gender shall be held to include the other genders as the context requires.  Article, Section and Exhibit references are to the Articles, Sections and Exhibits to this Agreement unless otherwise specified.

8.10Further Assurances.  In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties hereto shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable on its part under applicable laws, regulations and agreements, to consummate and make effective the transactions contemplated by this Agreement.

8.11Withholding or Granting of Consent. Except as otherwise expressly provided in this Agreement, each Party may, with respect to any consent or approval that it is entitled to grant pursuant to this Agreement, grant or withhold such consent or approval in its sole and uncontrolled discretion, with or without cause, and subject to such conditions as it shall deem appropriate.

8.12Laws and Regulations.  Notwithstanding any provision of this Agreement to the contrary, no Party shall be required to take any act, or fail to take any act, under this Agreement if the effect thereof would be to cause such Party to be in violation of any applicable law, statute, rule or regulation.

8.13Negation of Rights of Limited Partners, Assignees and Third Parties.  The provisions of this Agreement are enforceable solely by the Parties, and no shareholder, limited partner, member, or assignee of any of the Parties or other Person shall have the right, separate and apart from such Party, to enforce any provision of this Agreement or to compel any Party to comply with the terms of this Agreement.

​ 23

8.14No Recourse Against Officers or Directors.  For the avoidance of doubt, the provisions of this Agreement shall not give rise to any right of recourse against any officer or director of any Archrock Entity or any Partnership Entity.

8.15Right of Offset.  Each Party agrees that, in addition to, and without limitation of, any right of set-off, lien or counterclaim a Party may otherwise have, each Party shall have the right and be entitled, at its option, to offset (a) balances held by it or by any of its Affiliates for account of any other Party at any of its offices and (b) other obligations at any time owing by such Party in connection with any obligations to or for the credit or account of the other Party, against any principal of or interest on any of such other Party’s indebtedness or any other amount due and payable to such other Party hereunder that is not paid when due.

[Signature pages follow.]

​

​ 24

IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Effective Date.

​	​	​
​	ARCHROCK, INC.
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	AROC CORP.
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	AROC SERVICES GP LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	AROC SERVICES LP LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK SERVICES, L.P.
​	​	​
​	By:	AROC Services GP LLC,
​	​	its general partner
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary

​

​ Signature Page – Omnibus Agreement

​

/s/ Stephanie C. Hildebrandt	​	​
​	ARCHROCK SERVICES LEASING LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK ELT LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	TOTAL OPERATIONS AND PRODUCTION SERVICES, LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK ECOTEC LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK IONADA LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary

​

​ Signature Page – Omnibus Agreement

​

/s/ Stephanie C. Hildebrandt	​	​
​	ARCHROCK FGC LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK GP LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK GP LP LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK MLP LP LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK GENERAL PARTNER, L.P.
​	​	​
​	By:	Archrock GP LLC,
​	​	its general partner
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary

​

​ Signature Page – Omnibus Agreement

​

​	​	​
​	ARCHROCK PARTNERS CORP.
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK PARTNERS, L.P.
​	​	​
​	By:	Archrock General Partner, L.P.,
​	​	its general partner
​	​	​
​	By:	Archrock GP LLC,
​	​	its general partner
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK PARTNERS OPERATING LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK PARTNERS LEASING LLC
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary
​	​	​
​	ARCHROCK PARTNERS FINANCE CORP.
​	​	​
​	By:	/s/ Stephanie C. Hildebrandt
​	Name:	Stephanie C. Hildebrandt
​	Title:	Senior Vice President, General Counsel and
​	​	Secretary

​

​

​ Signature Page – Omnibus Agreement

​ Schedule 3.1(a) to the Omnibus Agreement

Agent Goods and Services

1)	operations,
2)	marketing,
---	---
3)	inventory management,
---	---
4)	legal,
---	---
5)	accounting,
---	---
6)	treasury,
---	---
7)	insurance administration and claims processing,
---	---
8)	risk management,
---	---
9)	health, safety and environmental,
---	---
10)	information technology,
---	---
11)	human resources,
---	---
12)	credit,
---	---
13)	collections,
---	---
14)	payroll,
---	---
15)	internal audit,
---	---
16)	taxes,
---	---
17)	engineering,
---	---
18)	facilities management,
---	---
19)	investor relations,
---	---
20)	ERP,
---	---
21)	training,
---	---
22)	executive,
---	---
23)	sales, and
---	---
24)	business development.
---	---

​

​ Schedule 3.1(a)

Exhibit 1 to Omnibus Agreement FORM BILL OF SALE

EQUIPMENT TRANSFER CERTIFICATE

AND BILL OF SALE

[Effective Date]

___________ (“Transferor”) and ______________ (“Transferee”) (collectively, the “Parties”) hereby confirm their understandings with respect to the transfer effective as of ________________ ___, ____ by Transferor to Transferee of the equipment listed on Schedule 1 attached hereto and made part hereof together with all Transferor-owned appliances, parts, instruments, machinery, accessories, other equipment attached or installed thereto; the rights of the Transferor under all permits relating exclusively to such equipment , to the extent that such permits are transferable and the transfer of which is authorized or consented to by any third parties; all warranties and guarantees, if any, express or implied, existing for the benefit of the Transferor in connection with such equipment to the extent assignable; all vendor information, catalogs, technical information, specifications, designs, drawings and maintenance records related to such equipment and to which the Transferor has ready access without undue effort (“Equipment”).

For good and valuable consideration including an obligation under a note in principal amount equal to the fair value of the Equipment that is the subject of this Equipment Transfer Certificate and Bill of Sale (“Certificate”), Transferor hereby distributes, grants, bargains, sells, transfers, conveys, assigns and sets over unto Transferee all of Transferor’s right, title and interest in, to, and under the Equipment.  Such transfer and conveyance is made without recourse to Transferor.

Transferor hereby warrants and represents to Transferee and its successors and assigns that (a) Transferor has good and marketable legal and indefeasible title to, and good and lawful right to sell, the Equipment; (b) the Equipment is free and clear of any and all mortgages, pledges, security interests, liens, charges, claims, restrictions, easements, and other encumbrances of any nature, other than (1) mechanic’s, carrier’s, workmen’s, repairmen’s or other like liens, arising or incurred in the ordinary course of business; (2) liens for taxes that are not yet due and payable or that may thereafter be paid without penalty; (3) liens securing debt of Transferor that will be released prior to or as of the date of the transfer hereunder or which continue under any senior debt; (4) other imperfections of title or encumbrances that, individually or in the aggregate could not reasonably be expected to materially interfere with the ordinary operation of the Equipment; and (f) liens created by the Transferee (items 1-5, “Permitted Liens”); and (c) it has the power and authority to sell or otherwise transfer the Equipment in the manner provided in this Certificate.  Transferor covenants that it will defend title in and to the Equipment against any and all mortgages, pledges, security interests, liens, charges, claims, restrictions, easements, and other encumbrances of any nature whatsoever, other than Permitted Liens.  EXCEPT AS SET FORTH HEREIN, THE EQUIPMENT IS BEING SOLD WITHOUT ANY WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF FITNESS FOR USE OR MERCHANTABILITY.

This Certificate is made and given in good faith and not for the purpose of defrauding creditors or purchasers.  The transfer evidenced by this Certificate is intended to be an absolute

​

​ Exhibit 1-1

Exhibit 1 to Omnibus Agreement assignment and conveyance and a true sale, as contemplated in Section 9-109(e) of the Uniform Commercial Code, as adopted by the State of Texas.

**THIS CERTIFICATE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, THE UNITED STATES OF AMERICA, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.**The Parties agree to submit to the jurisdiction of the courts of the State of Texas, the United States of America.

The language governing this Certificate shall be English, and any translation of this Certificate into any other language shall not have legal effect.

This Certificate may be executed in any number of counterparts, each of which when executed and delivered shall constitute an original, but all of which when taken together shall constitute a single agreement.  Delivery of an executed counterpart of a signature page of this Certificate by facsimile transmission or electronic mail (in .pdf form) shall be effective as delivery of a manually executed counterpart of this Certificate.

Transferor covenants and agrees to execute and deliver to Transferee all such other additional instruments and other documents and will do all such other acts and things as may be necessary to fully assign to Transferee, or its successors and assigns, all of the Equipment.

All of the provisions hereof shall inure to the benefit of and be binding upon the respective heirs, successors and assigns of Transferor and Transferee.

IN WITNESS WHEREOF, Transferee and Transferor have caused this Certificate to be duly executed by its authorized representative.

​

​	TRANSFEROR:
​	​
​	​
​	By:	​
​	Name:	​
​	Title:	​
​	​	​
​	TRANSFEREE:
​	​	​
​	​
​	​
​	By:	​
​	Name:	​
​	Title:	​
​	​	​

​ Exhibit 1-2

Exhibit 1 to Omnibus Agreement Schedule 1 to Bill of Sale

​

​

​ Exhibit 1-3

Exhibit 2 to Omnibus Agreement FORM LEASE AGREEMENT

EQUIPMENT MASTER RENTAL AGREEMENT

This Equipment Master Rental Agreement including all Schedule(s), which are hereby incorporated by reference (collectively, this “Agreement”), is made between _________________ (“Lessor”) and _________________, (“Lessee”).

Lessor and Lessee agree as follows:

1.Lease.  Subject to and on the terms and conditions set forth in Article IV of the Fourth Amended and Restated Omnibus Agreement among Archrock, Inc., Archrock Services, L.P., Archrock GP LLC, Archrock General Partner, L.P., Archrock Partners, L.P., and Archrock Field Services LLC, as such agreement may be amended, restated, modified, supplemented or replaced (the “Omnibus Agreement”) and herein, Lessee and Lessor may from time to time execute Schedule(s) to this Agreement (each a “Schedule”) and Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the personal property described and detailed as the “Equipment” on the applicable Schedule.  Each Schedule in conjunction with this Agreement shall be deemed to be a separately enforceable lease between Lessee and Lessor with respect to the Equipment specified in such Schedule.  Lessee and Lessor each represent and warrant for itself that with respect to this Agreement and each applicable Schedule:

a.the execution, delivery and performance by each party have been duly authorized by all necessary corporate action;

b.the individual executing the same was duly authorized to do so; and

c.each constitutes legal, valid and binding agreements, enforceable in accordance with their terms.

2.Term; Rent; Equipment Type.

a.Each applicable Schedule shall set forth the term of the lease and amount of rental payments for the Equipment listed thereon, which Lessee shall pay as set forth on the applicable Schedule.  If Lessee fails to pay any rental or other sum when due, then, if Lessee has received written notice from Lessor, Lessee also shall pay to Lessor interest thereon from the due date thereof to the date of payment at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (“Applicable Rate”).  All payments by Lessee hereunder shall be payable at the office of Lessor, or at such other place as Lessor may from time to time may designate in writing.  It is the intent of the parties that the applicable Schedule shall have a term that is no greater than a whole or fractional month less than 75% of the remaining useful life of the Equipment subject to such Schedule.  Notwithstanding the foregoing, Lessor and Lessee may offset any amounts due and owing from the other against any amounts due and owing to the other.

b.Each applicable Schedule shall set forth the specific Equipment type.

​ Exhibit 2-1

Exhibit 2 to Omnibus Agreement 3.Taxes.

a.Lessee shall be liable for any and all license fees and assessments and all consumption, sales, use, property, excise and other taxes or charges (including any interest and penalties), now or hereafter imposed by any governmental body or agency upon the Equipment or the purchase, ownership, possession, leasing, operation, use, or disposition thereof hereunder, or the rentals or other payments hereunder (excluding taxes on or measured by the net income of Lessor) (“Taxes”).  In this regard, Lessee shall prepare and file promptly with the appropriate offices any and all Tax and other similar returns required to be filed with respect thereto (sending copies thereof to Lessor) or, if requested by Lessor, notify Lessor of such requirement and furnish Lessor with all information required by Lessor so that it may effect such filing.  If such filings shall be made by Lessor, Lessee shall reimburse Lessor for any such Taxes promptly when due.

4.Inspection and Acceptance upon Delivery of Equipment to Lessee and Return of Equipment to Lessor.  Upon delivery, Lessee assumes the care, custody, supervision and control of the Equipment and of any and all persons or property in the vicinity of the Equipment during the time of delivery, operation and return.  Lessee acknowledges that all Equipment rented hereunder and specified in the Schedule(s) is being delivered in its then-current condition.  Lessee acknowledges that Lessor may not be the manufacturer or supplier of the Equipment and any quotations or recommendations made by Lessor are based on information supplied by Lessee and the manufacturer or supplier of the Equipment.  Within five (5) business days after return of Equipment by Lessee to Lessor at its designated yard, Lessor shall inspect such Equipment and notify Lessee of any damage of the Equipment in addition to damage previously reported to Lessee pursuant to Section 7(e) and invoice Lessor for any such damage.

5.Freight.  Lessee agrees to bear all of the cost of connecting the Equipment and of disconnecting the Equipment prior to returning the Equipment to Lessor.  Except as otherwise provided in the applicable Schedule, all costs of transporting the Equipment from Lessor’s yard to Lessee’s Site described on the applicable Schedule and of transporting the Equipment from such Site back to Lessor’s designated yard will be at Lessee’s sole cost and expense.

6.Insurance.  Lessee shall, at Lessee’s sole cost and expense, maintain insurance or Lessor-approved self-insurance in such amounts, against such risks (including, but not limited to, all risk and public liability and property insurance with respect to the Equipment (including, but not limited to, windstorm, flood and earthquake)) from the time of Lessee’s acceptance of the Equipment in accordance with Section 4 until it is returned to the Lessor’s designated yard, with such carriers and in such form as shall be satisfactory to Lessor.

7.Use / Lessee’s Responsibilities.  Lessee agrees to use the Equipment in a careful and prudent manner with competent agents, employees or subcontractors in accordance with the specifications, if any, of the manufacturer of the Equipment.  If the Equipment is compression equipment, Lessee agrees to pay for damages to the Equipment resulting from free water, excessive condensate or foreign solids, or impurities contained in the gas stream.  Lessee further agrees to pay for all damages to the Equipment resulting from abusive use, failure to maintain the Equipment in accordance with this Agreement or from any negligence on the part of Lessee, its agents, employees or subcontractors; provided, however, Lessee shall not be liable for such damages to the extent such damages are caused by the acts or omissions of Lessor or its parent company,

​ Exhibit 2-2

Exhibit 2 to Omnibus Agreement including where services are provided by the Archrock Entities (as defined in the Omnibus Agreement) under the Omnibus Agreement or other similar arrangement.

In addition to any Lessee obligations contained elsewhere in this Agreement and within any Schedule hereto, except to the extent any Schedule provides otherwise, Lessee agrees to and shall:

a.If Lessor is to install the equipment, provide Lessor with authorized ingress and egress to and from the site designated in the applicable Schedule for installation of the Equipment (the “Site”).  Should Lessor be denied access to the Site for any reason not reasonably within Lessor’s control, any time lost by Lessor shall be paid for by Lessee on demand, and if not then paid, shall incur interest at the Applicable Rate.  To the extent that Lessee has superior knowledge of the Site and access routes to the Site, Lessee must advise Lessor of any conditions or obstructions which Lessor might encounter while en route to the Site.  Lessee agrees to maintain the road, if any, and the Site in such a condition that will allow free access and movement to and from the Site in an ordinary highway type vehicle.  If because of an attribute of Lessee’s operations, Lessor is required to use any specialized transportation equipment, cranes or other services and supplies, Lessee shall furnish the same at its expense and without cost to Lessor;

b.Prepare a sound location at the Site adequate in size and capable of properly supporting the Equipment;

c.Immediately mitigate and repair any stoppage, malfunction or leaks of oil or coolant from the Equipment;

d.Return the Equipment in good operating condition, which by way of example, but not exclusion, means free of hydrocarbons, mud, sand and naturally occurring radioactive materials and with castings (e.g. blocks, frames, heads, manifolds, housings, distance pieces, cylinders), shafts (e.g. crankshafts, camshafts, cooler shafts), rods (e.g. connecting rods, piston rods), controls, pumps, scrubbers, bottles, processing piping, header, box, fan and accessories that are not, by way of example, but not exclusion, damaged, rusted or pitted, bent, cracked or inoperable.  If the Equipment is not returned in good operating condition, Lessee agrees to pay Lessor such amounts necessary to bring Equipment up to good operating condition upon invoice by Lessor; provided, however, Lessee shall not be liable for such amounts to the extent such damages are caused by the acts or omissions of Lessor or its parent company; and

e.Perform such other obligations set forth in Annex A hereto.

8.Maintenance.  Unless otherwise provided in the applicable Schedule or separate written operation and maintenance agreement, including the Omnibus Agreement, Lessee acknowledges that Lessor is providing the Equipment as a “bare rental” and, therefore, Lessor will have no maintenance or inspection obligations with respect to the Equipment except capitalizable maintenance obligations.

9.Inspection.  Lessor shall have the right at all reasonable times to enter upon the premises where the Equipment may be located for the purpose of inspecting it or observing its use.

10.Title; Personal Property; Encumbrances; Location.  Lessee covenants that:

​ Exhibit 2-3

Exhibit 2 to Omnibus Agreement a.The Equipment is and shall remain personal property and shall not be attached to or become part of any realty;

b.The Equipment will be installed and used at the Site specified in the applicable Schedule pertaining thereto and that it shall not be removed therefrom without the permission of Lessor;

c.That Lessee will not, except as expressly authorized in this Agreement, sell, secrete, mortgage, assign, transfer, lease, sublet, loan part with possession of, or encumber the Equipment or permit any liens or charges to become effective thereon or permit or attempt to do any of the acts aforesaid.  Lessee agrees, at Lessee’s own expense, to take such action as may be necessary to remove any such encumbrance, lien or charge and to prevent any third party from acquiring any other interest in the Equipment (including, but not limited to, by reason of such Equipment being deemed to be a fixture or a part of any realty); and

d.Lessee will not change or remove any insignia, serial number or lettering of the Equipment.

11.Licenses, Permits and Compliance.  Lessee shall, at its sole expense:

a.Comply with all applicable rules and regulations of any federal, provincial, state, county, city, local, municipal or regulatory agency relating to the construction or operation of the Equipment at the Site, or environmental requirements associated therewith (including, but not limited to, air emission, noise and environmental discharges); and

b.Obtain and maintain throughout the term, or any extension thereof, any and all licenses and/or permit fees assessed as a result of this Agreement or against said Equipment.

12.Waste Disposal. Lessee bears responsibility for disposal of liquids, solid, and hazardous waste discharged by the Equipment at the Site in accordance with federal, state and local environmental rules and regulations.

13.Events of Default; Remedies; Expenses.  In the event that:

a.Lessee shall default in the payment of any installment of rent or other sum payable under this Agreement or default in the observance or performance of any other covenant or agreement in this Agreement and the failure to cure said default within ten (10) days after notice by Lessor;

b.Lessee shall dissolve, or become insolvent (however evidenced) or bankrupt, make an assignment for the benefit of creditors, suspend the transaction of its usual business or consent to the appointment of a trustee or receiver, or a trustee or a receiver shall be appointed for Lessee or for a substantial part of its property, or bankruptcy, reorganization, insolvency, or similar proceedings shall be instituted by or against Lessee;

c.an order, judgment, or decree shall be entered against Lessee by a court of competent jurisdiction and such order, judgment or decree shall continue unpaid or unsatisfied and in effect for any period of sixty (60) consecutive days without a stay of execution, or any execution

​ Exhibit 2-4

Exhibit 2 to Omnibus Agreement or writ or process shall be issued in connection with any action or proceeding against Lessee or its property whereby all Equipment under the Schedules or any substantial part of Lessee’s property may be taken or restrained;

d.any indebtedness of Lessee for borrowed money shall become due and payable by acceleration of maturity thereof; or

e.Lessor shall in good faith believe that the prospect of payment or performance by Lessee is impaired,

then and in any such event, Lessor may, by written notice to Lessee:

(1)Immediately terminate this Agreement and any Schedule then in effect, at its option, and Lessee’s rights thereunder; and/or

(2)Declare immediately due, and payable all rental installments and other sums hereunder forthwith due and payable whereupon the same shall forthwith become due and payable as liquidated damages and not as a penalty; and/or

(3)Proceed by appropriate court action or actions either at law or in equity, to enforce performance by Lessee of the applicable covenants of this Agreement or to recover damages for the breach thereof; and/or

(4)Without necessity of process or other legal action, enter onto the premises of Lessee or such other premises as the Equipment may then be located and stop the operation of the Equipment and/or take possession of the Equipment, disconnecting and separating the Equipment from any other property and using all force necessary or permitted by applicable law, without Lessor incurring any liability to Lessee or any other person arising out of the taking of any such action.  Lessee agrees to and shall indemnify and hold harmless Lessor from any and all claims, losses, damages, causes of action, suits and liabilities of any kind arising in favor of Lessee, or any interest owner that Lessee represents or serves as operator and arising out of or in connection with the stopping of the operation of the Equipment and/or the removal of the Equipment as aforesaid, whether same result from the forfeiture of any oil, gas or mineral lease, damage to a producing reservoir or lease operations, lost production or other event or condition.  In addition, Lessee shall continue to be liable for all other indemnities under this Agreement and for all legal fees and other costs and expenses resulting from the foregoing defaults or the exercise of Lessor’s remedies.  Lessor shall be entitled to take or retain, by way of offset against any or all amounts due and owing under this Agreement, any assets, tangible or intangible, of Lessee which may then be in the possession of Lessor, its correspondents or agents, wheresoever situated.

14.Indemnity of Lessor.

a.Lessee is responsible and liable for loss of or damage to Equipment arising between the time of delivery and redelivery of the Equipment and Lessee shall protect, defend, indemnify and hold Lessor harmless from and against any such loss or damage, including, but not limited to, improper operation, improper maintenance (unless Lessor performs maintenance), compression of dirty or wet gas, fire, freezing, theft, windstorm, hailstorm, flood, riot, insurrection or explosion, except to the extent such loss or damage is caused by the acts or omissions of Lessor

​ Exhibit 2-5

Exhibit 2 to Omnibus Agreement or its parent company (including where services are provided by the Archrock Entities (as defined in the Omnibus Agreement) under the Omnibus Agreement or other similar arrangement).

b.Lessee shall protect, defend, indemnify and hold Lessor harmless from and against any loss, damage, liability, suit, expense, cost or claim, however occurring as the result of loss of or damage to property (other than the Equipment), arising between the time of delivery and redelivery of the Equipment, whether such property is owned by Lessee or third party, and for injury to or death of persons, whether Lessee or its employees or third parties, except to the extent such loss or damage is caused by the acts or omissions of Lessor or its parent company (including where services are provided by the Archrock Entities (as defined in the Omnibus Agreement) under the Omnibus Agreement or other similar arrangement).

c.No Limit.  Except as otherwise provided herein, the indemnity obligations in this Agreement shall not be limited to the amount of insurance carried by either party hereto.

d.Application, Construction and Interpretation.  Notwithstanding any provision in this Agreement to the contrary, the parties agree that the indemnities in this Agreement shall be limited to the extent and only to the extent necessary to comply with applicable law and that this Agreement shall be deemed to be amended to the extent necessary to enforce the indemnities herein.

e.Waiver of Consequential Damages.  NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR, AND EACH PARTY HEREBY RELEASES THE OTHER PARTY FROM, ANY INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES OR LOSSES RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, OR ANY EQUIPMENT, INCLUDING, BUT NOT LIMITED TO, DAMAGES OR LOSSES FOR LOST PRODUCTION, LOST REVENUE, LOST PRODUCT, LOST PROFITS, LOST BUSINESS OR BUSINESS INTERRUPTIONS, REGARDLESS OF WHETHER CAUSED OR CONTRIBUTED TO BY PRE-EXISTING CONDITIONS, WHETHER SUCH CONDITIONS BE PATENT OR LATENT, BREACH OF REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED), ULTRAHAZARDOUS ACTIVITY, STRICT LIABILITY, TORT, BREACH OF CONTRACT, BREACH OF STATUTORY DUTY, BREACH OF ANY SAFETY REQUIREMENT OR REGULATION, OR THE NEGLIGENCE OF ANY PERSON OR PARTY, INCLUDING, BUT NOT LIMITED TO, THE INDEMNIFIED PARTY OR PARTIES AND ITS OR THEIR GROUPS, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT AND/OR CONCURRENT, ACTIVE OR PASSIVE, OR ANY OTHER THEORY OF LEGAL LIABILITY WITHOUT LIMITATION, EXCEPT TO THE EXTENT ANY SUCH RELEASING PARTY ACTUALLY SUFFERS SUCH DAMAGES OR LOSSES TO A THIRD PARTY AND SUCH DAMAGES OR LOSSES ARE OTHERWISE INDEMNIFIABLE UNDER SECTION 14 OF THIS AGREEMENT.  THE PARTIES FURTHER AGREE THAT THE FORGOING RELEASE OF LIABILITY SHALL ALSO EXTEND TO EACH PARTY’S PARENT, SUBSIDIARY, AFFILIATED AND RELATED COMPANIES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND REPRESENTATIVES.

​ Exhibit 2-6

Exhibit 2 to Omnibus Agreement 15.Savings Clause.  The parties agree that the indemnities in this Agreement are limited to the extent necessary to comply with applicable state or federal law and that this Agreement shall be deemed to be amended to comply with those laws to the extent their requirements are at variance with any indemnification provisions set forth in this Agreement.

16.Assignment By Lessor.  Lessor may assign its rights and delegate its duties under this Agreement.  Lessor covenants to Lessee that Lessor is empowered to execute this Agreement.  Conditioned upon Lessee’s performing the conditions hereof, Lessee shall peaceably and quietly hold, possess and use the Equipment during the term and any extensions thereof without hindrance.  If Lessor assigns the rents reserved herein or all or any of Lessor’s rights hereunder, such assignee’s rights shall be independent of any claim of Lessee against Lessor.  Lessee on receiving notice of any such assignment shall abide thereby and make payment as may therein be directed.  Following such assignment, the term “Lessor” shall be deemed to include or refer to Lessor’s assignee, except such assignee’s rights shall be independent of any claim of Lessee against Lessor as provided herein.

17.Assignment and Subleasing by Lessee.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 17, LESSEE SHALL NOT, WITHOUT THE PRIOR CONSENT OF LESSOR, ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS UNDER THIS AGREEMENT.  ANY ATTEMPTED ASSIGNMENT, TRANSFER OR ENCUMBRANCE BY LESSEE OF ITS RIGHTS, INTERESTS OR OBLIGATIONS UNDER THIS AGREEMENT SHALL BE NULL AND VOID.  So long as no material event of default shall have occurred and be continuing, Lessee may, without the consent of Lessor, sublease one or more of the Equipment to any third party or use the Equipment in connection with the provision of contract compression services pursuant to a contract (a “User Contract”).  No such subleasing, or use in connection with provision of services, by Lessee will reduce or affect any of the obligations of Lessee hereunder or the rights of Lessor under this Agreement, and all of the obligations of Lessee hereunder shall be and remain primary and shall continue in full force and effect as the obligations of a principal and not of a guarantor or surety.

18.No Lessor Equipment Warranties.  EXCEPT AS OTHERWISE PROVIDED IN THE APPLICABLE SCHEDULE, LESSOR LEASES THE EQUIPMENT TO LESSEE AS-IS AND EXPRESSLY DISCLAIMS AND MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE CONDITION, DESIGN, QUALITY, CAPACITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF OR CONCERNING THE EQUIPMENT, OR ANY WARRANTY THAT THE EQUIPMENT IS FREE OF THE RIGHTFUL CLAIM OF ANY THIRD PERSON BY WAY OF INFRINGEMENT OR THE LIKE, WHETHER PATENT OR TRADEMARK INFRINGEMENT OR OTHERWISE, OR ANY OTHER MATTER, CONCERNING THE EQUIPMENT.

19.Enforceability.  If any part hereof is contrary to, prohibited by or deemed invalid under applicable laws or regulations of any jurisdiction, such provision shall be inapplicable and deemed omitted but shall not invalidate the remaining provisions hereof.

​ Exhibit 2-7

Exhibit 2 to Omnibus Agreement 20.No Conditional Sale.  It is the intention of the parties hereto to hereby create a lease on the Equipment described herein, and not a conditional sale.  To provide solely for the eventuality that a court might hold this to be a conditional sale, Lessor hereby retains a purchase money security interest to secure payment of the sales price of the Equipment as determined by such court, and Lessee grants to Lessor all rights given to a secured party under the Uniform Commercial Code of the United States or similar law of the governing jurisdiction, if any other law should govern this Agreement or the Equipment, in addition to Lessor’s other rights hereunder.  It is the intention of the parties that the Equipment shall be deemed personal property and that it not be deemed a fixture, even though it may be attached in some manner to realty.  To provide solely for the eventuality that a court might also hold the Equipment to be a fixture, the parties state for the purpose of complying with the legal requirements for a financing statement that collateral is or includes fixtures and the Equipment is affixed or is to be affixed to the lands described in the applicable Schedule(s).

21.Alterations.  Except as required or permitted by this Agreement, and subject to this Section 21, Lessee shall not modify or alter the Equipment without the prior approval of Lessor.

22.Miscellaneous.

a.No representation, covenant or condition of this Agreement can be waived or changed except by the written consent of both parties.  Forbearance or indulgence by Lessor in any regard whatsoever shall not constitute a waiver or change of the representation, covenant or condition to be performed by Lessee to which the same may apply, and until complete performance by Lessee of said covenant or condition, Lessor shall be entitled to invoke any remedy available to Lessor under this Agreement or by law or equity despite said forbearance or indulgence.  Waiver of any defaults shall not waive any other default.

b.The language governing this Agreement shall be in English, any translation thereof into other languages shall not have any legal effect.

c.Service of all notices under this Agreement shall be sufficient if mailed to the party involved at its respective address on file with the other party.  Any such notices mailed to such address shall be effective when deposited in the mail, duly addressed and with postage prepaid, or delivered by hand or electronic mail delivery.

d.“Lessor” and “Lessee” as used in this Agreement shall include the heirs, executors, administrators, successors, and/or permitted assigns of such parties.

e.If more than one Lessee executes this Agreement, their obligations under this Agreement shall be joint and several.

f.Lessee will, if requested by Lessor, join with Lessor in executing one or more financing statements, as may be desired by Lessor, in form satisfactory to Lessor.

g.In case of conflict between provisions found in this Agreement and those listed in the Schedule(s) hereto, the provisions on the Schedule(s) shall prevail.

​ Exhibit 2-8

Exhibit 2 to Omnibus Agreement h.The law governing this Agreement shall be that of the State of Texas, United States in force at the date of this Agreement, excepting any conflict of laws provisions that provide for the application of the laws of another jurisdiction.

i.Lessor and Lessee agree that venue of any lawsuit arising from or in connection with the terms of this Agreement shall be in Houston, Harris County, Texas, United States. For purposes of this Agreement, Lessee irrevocably consents to the jurisdiction of the courts of Houston, Harris County, Texas, United States.

j.This Agreement contains the full agreement between the parties.  No representation or promise has been made by either party to the other as an inducement to enter into this Agreement.  Lessor does not in any way or for any purpose become partner of Lessee, or a joint venture, or a member of a joint enterprise with Lessee.

k.Lessee hereby waives its right to receive a copy of any financing statement or financing change statement registered by Lessor in connection with this Agreement.

l.Lessor and Lessee hereby agree that no rights or remedies referred to in Article 2A of the Uniform Commercial Code of the United States or similar law of the governing jurisdiction shall be conferred upon either Lessor or Lessee unless expressly granted in this Agreement. To the extent any Schedule contains chattel paper under the Uniform Commercial Code of the United States or similar law of the governing jurisdiction, no security interest in any Schedule may be created through the transfer and possession of any counterpart thereof other than the counterpart retained by Lessor.

m.If Lessee at any time shall fail to pay any sum which Lessee is required by this Agreement to pay or shall fail to do or perform any other act Lessee is required by this Agreement to do or perform, Lessor at its option may pay such sum or do or perform such act (or have it performed by a third party), and Lessee shall reimburse Lessor on demand for the amount of such payment and for the cost and expenses which may be incurred by Lessor for such acts or performance, together with interest thereon at the Applicable Rate from the date of demand until paid.

n.This Agreement is based on the applicable laws existing at the time of its execution.  Any changes, including, but not limited to, changes in governmental enforcement practices, revisions or new applicable laws, including, but not limited to, those related to taxes, permits, fees and duties, that have the effect of increasing Lessor’s burden, including, but not limited to, cost, time-consumption and risk exposure, shall entitle Lessor to fair and equitable Agreement modifications, which modifications the parties agree to work toward in good faith and in a timely fashion, failing which Lessor may terminate this Agreement or any Schedule(s) hereunder immediately upon written notice to Lessee.

o.This Agreement may be executed in any number of counterparts and by the different parties to this Agreement on separate counterparts, each of which when executed and delivered shall be an original but all the counterparts shall together constitute one and the same instrument.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or e-mail shall be effective as delivery of a manually executed counterpart of this Agreement.

​ Exhibit 2-9

Exhibit 2 to Omnibus Agreement

Executed this day of                                           , 20     .
​	​	​	​
LESSOR:	​		​
​	​	​	​
​	BY:	​	​
​	​	​	​
​	NAME:	​	​
​	​	​	​
​	TITLE:	​	​
​	​	​	​
LESSEE:	​		​
​	​	​	​
​	BY:	​	​
​	​	​	​
​	NAME:	​	​
​	​	​	​
​	TITLE:	​	​

​

​ Exhibit 2-10

Exhibit 2 to Omnibus Agreement Annex A

LESSEE’S RESPONSIBILITIES

Lessee –

In addition to the responsibilities detailed in the Master Agreement, Lessee shall furnish the following:

​

Daily maintenance and inspections of all engines, compressors and accessory parts forming the Equipment (both labor and necessary parts), including without limitation:
☐Monthly adjustments on the engine and compressor per Lessor’s guidelines;
☐Anti-freeze in accordance with Lessor’s requirements;
☐Lubricants and related filters in accordance with Lessor’s requirements; and
☐Daily inspections/monitoring.
Competent and prudent Equipment operator for normal operations.
Provide an inlet separator for the Equipment to remove solids (such as sand) and all entrained liquids from the gas stream; Lessee hereby acknowledging that the scrubber provided by Lessor with the Equipment is only an emergency scrubber.
Site preparation, including suitable sand or gravel pad or concrete base as required.
Valves and piping to suction and discharge flanges, and fuel gas inlet(s) of compressor(s).
Suction to discharge bypass piping and suction pressure control valve (if required).
All installation expenses.
Suitable, sweet, dry natural gas fuel for engine use with 900 to 1100 BTU/ft3 and no more than 10 ppm H2S.
Air/gas pressure of with sufficient pressure and volume for engine starting.
Provide, connect and maintain a properly functioning waste discharge system downstream of the Equipment, including an outlet connection from the skid drain and all pipes, connections, the blow casing and tank downstream of the skid drain; and remove and dispose of all fluids discharged by the discharge tank, the blow casing and any pipes or connections to the skid plus collection and disposal of such liquids from the Equipment’s skid and any other liquids incidental to Equipment operations.
Equipment Site with ingress and egress satisfactory to Lessor.
Disconnection of Equipment and Site restoration expenses.
Site fencing, if requested by Lessor.
Any and all necessary equipment, supplies and services not specifically listed as Lessor’s responsibility, above.
THE FOLLOWING RESPONSIBILITIES APPLY WHEN SITE IS OFFSHORE OR IN INLAND WATERWAYS:
Suitable platform or barge capable of supporting the Equipment.
All transporation (including air and water) and cranes necessary for delivery, installation, maintenance, repair and removal of the Equipment.
All transportation (including air and water) for Lessor personnel, parts, tools and supplies.
Cost for any standby time in excess of 4 hours that is beyond the direct control of Lessor (including due to inclement weather that, in the sole but reasonable discretion of Lessor impedes safe travel).

​

​

​ Exhibit 2-11

Exhibit 2 to Omnibus Agreement SCHEDULE ‘A’ TO EQUIPMENT MASTER RENTAL AGREEMENT

(BARE RENTAL)

Lessee:_______________________________________________Date:________________

In accordance with your request, we are pleased to offer the herein described Equipment for your application on the _______________ lease in ______________________ (detail, to the extent available, section, township, range, county/parish, state and country) (“Site”).

Unit #:

HP:

Equipment Description:

The term of this Schedule A shall commence upon the date the Equipment is accepted in accordance with the Master Agreement and shall continue indefinitely until terminated by either party, upon thirty (30) days’ advanced written notice.  Neither party may terminate this Schedule A within twelve (12) months of commencement of the term.  Notwithstanding the foregoing, this Schedule A shall terminate if (a) gas conditions change or the use of the Equipment by the Lessee pursuant to a User Contract ends rendering the Equipment unnecessary; (b) force majeure prevents a party from performing its obligations hereunder; or (c) a default occurs under this Schedule A or the Master Agreement.  The RENTAL RATE is $__________ per month for the duration of the term of this Schedule A.  The Rental Rate shall be invoiced monthly and payable monthly in arrears but in any event shall be paid no later than 30 days after the end of the fiscal quarter in which a particular month’s Rental Rate is incurred (beginning on the date the Equipment is accepted) in which the Equipment is leased.

Any manufacturing check the box designation in any User Contract shall apply in equal force to this Schedule A.

When executed by Lessor and Lessee, this Schedule A shall apply to the EQUIPMENT MASTER RENTAL AGREEMENT (or equivalent master agreement) executed by Lessee and Lessor (or their respective predecessors or affiliates) and dated as shown below (the “Master Agreement”) whether or not attached hereto, and shall be deemed an individual agreement between the parties hereto for the Equipment described herein. This Schedule A and the applicable Master Agreement contains the entire agreement between the parties relating to the matters contained herein and therein, superseding all prior contracts and agreements, relating to the mattes contained herein and therein.  Unless otherwise defined herein, terms have the meanings set forth in the Master Agreement.

Master Agreement Date:___________________________

​ Exhibit 2-12

Exhibit 2 to Omnibus Agreement ACKNOWLEDGED and ACCEPTED by the undersigned, duly-authorized representatives of the parties as of the date first shown above.

LESSOR:	​	​
​	​	​
By:	​	​
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Title:	​	​
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LESSEE:	​	​
​	​	​
By:	​	​
​	​	​
Title:	​	​

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​ Exhibit 2-13

Exhibit 3 to Omnibus Agreement ​

[RESERVED]

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​ Exhibit 3-1

Exhibit 4 to Omnibus Agreement Archrock Customers

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​ Exhibit 4-1

Exhibit 5 to Omnibus AgreementPartnership CustomersExhibit 5-1

Exhibit 19.1

​

Compensation Recovery Policy

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Effective Date: March 28, 2023

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POLICY STATEMENT

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1.	Overview and Purpose. Archrock, Inc. (“Archrock” or “the Company”) has adopted this Securities Trading Policy (the “Policy”) to assist in compliance with insider trading laws and to prevent the appearance of improper insider trading.

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In the course of their employment or service, Archrock’s Insiders (as defined below) may come into possession of information about Archrock or other companies that is not generally available to the public. Except as otherwise provided in this Policy, Archrock Insiders are prohibited from trading in Archrock securities or the securities of other publicly traded companies while in possession of material nonpublic information, also called “inside information,” about those securities. This type of illegal conduct is referred to as “insider trading.” The fact that an individual possesses inside information is enough to bar them from trading; it is no defense that the reasons for trading are not based on that information.

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2.

Applicability. This Policy applies to members of our Board of Directors (the “Board”), officers, employees and contractors of the Company, as well as their respective Immediate Family Members (collectively referred to as “Insiders”), as well as any other individuals the Chief Compliance Officer may designate as Insiders because they may have access to material nonpublic information concerning the Company.

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Except as set forth explicitly below, this Policy applies to any and all transactions in the Company’s securities, including transactions in common stock, options, preferred stock, restricted stock, restricted stock units, debt instruments and any other type of securities that the Company may issue. This Policy applies to such securities regardless of whether they are held in a brokerage account, a 401(k) or similar account, through an employee stock purchase plan or otherwise.

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3.	Definitions.

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a.	Immediate Family Member. Includes an Insider’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, dependents, anyone to whom such person provides financial support or from whom such person receives financial support and any other person (other than domestic employees) who shares the Insider’s home.
b.	“Material” Information. There is no bright line test for determining whether particular information is material. Such a determination depends on the facts and circumstances unique to each situation and cannot be made solely based on the potential financial impact of the information. In general, information about the Company should be considered “material” if a reasonable investor would consider the information significant when deciding whether to buy or sell Company securities, or if the information, if disclosed, could be viewed by a reasonable investor as having significantly altered the total mix of information available in the marketplace about the Company. Examples of material information may include (but are not limited to):
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·	New major contracts, orders, suppliers, customers, or finance sources, or the loss thereof.
·	Major discoveries or significant changes or developments in products or product lines, research or technologies.
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·	Significant changes or developments in supplies or inventory, including significant product defects, recalls, delays or product returns.
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·	Stock splits, public or private securities/debt offerings, or changes in dividend policies or amounts.
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·	Significant changes in senior management.
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·	Actual or threatened major litigation, or the resolution of such litigation.
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·	An imminent change in the Company’s credit rating by a rating agency.
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·	The contents of forthcoming publications that may affect the market price of Company securities.
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·	Significant breaches of information technology systems or other events impacting cybersecurity.
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Put simply, if the information could reasonably be expected to affect the price of the Company’s stock, it should be considered material. It is important to remember that whether information is material will be viewed by enforcement authorities with the benefit of hindsight. In other words, if the price of the Company’s stock changed as a result of the information having been made public, it will likely be considered material by enforcement authorities.

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While it is not possible to identify every type of information that could be deemed “material,” the following matters ordinarily should be considered material:

·	Projections of future earnings or losses, or other earnings guidance, or changes in projections or guidance.
·	Financial performance, especially quarterly and year-end earnings or significant changes in financial performance or liquidity.
---	---
·	Potential significant mergers and acquisitions or the sale of significant assets or subsidiaries.
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c.

“Nonpublic” Information. Information is “nonpublic” if it has not been disseminated in a manner that makes it generally available to investors in a Regulation FD-compliant method, such as through a widely circulated news or wire service (e.g., Dow Jones, Bloomberg, PR Newswire, etc.) or through a public filing with the Securities and Exchange Commission (the “SEC”). For the purposes of this Policy, information will be not considered public until after the close of trading on the first full trading day following the Company’s widespread public release of the information.

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GUIDANCE

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4.	Generally Prohibited Activities. The prohibitions below apply to actions an Insider may take directly or indirectly through Immediate Family Members or other persons or entities.

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a.	Possession of Non-Public Information. No Insider may buy, sell or otherwise transact in (including gifting of) Company securities while aware of material nonpublic information concerning the Company, even if they are not subject to a trading blackout.

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b.	Trading Blackouts. No Insider who is subject to a trading blackout may buy, sell or otherwise transact in Company securities during any such trading blackout period even if the Insider is not aware of any material nonpublic information regarding the Company. The Chief Compliance Officer shall determine and inform those Insiders who are subject to regular quarterly or special trading blackouts*.*

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c.

Tipping. Providing material nonpublic information to another person who may trade or advising others to trade on the basis of that information is known as “tipping” and is illegal. Tipping inside information to another person may constitute a violation by both the person who provides the information, the “tipper,” and the person who receives it, the “tippee.” Tipping of inside information is a violation of the law that is just as serious as if the tipper had traded on the information himself or herself. It is particularly important to recognize the risk of inadvertently tipping inside information to someone outside of Archrock, such as when fielding inquiries from customers and vendors. If there is any doubt whether a person is authorized to receive certain information about Archrock, the information should not be disclosed until the Chief Compliance Officer has been consulted. Penalties will apply whether or not the tipper derives any personal benefit from the tippee’s actions.

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d.	Giving Trading Advice. No Insider may give trading advice of any kind about the Company to anyone, whether or not such Insider is aware of material nonpublic information about the Company, except that Insiders should advise other Insiders not to trade if such trading might violate the law or this Policy.

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e.	Engaging in Short Sales. No Insider may engage in short sales of Company securities. A short sale is the sale of a security that the seller does not own at the time of the trade.

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f.	Engaging in Derivative Transactions. No Insider may engage in puts, calls, warrants or other derivative instruments that relate to or involve Company securities. Such transactions are, in effect, bets on short-term movements in the Company’s stock price and therefore can create the appearance that the transaction is based on nonpublic information.

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g.	Hedging. No Insider may engage in hedging transactions involving Company securities, including forward sale or purchase contracts, equity swaps, collars or exchange funds. Such transactions are speculative in nature and therefore can create the appearance that the transaction is based on nonpublic information.

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h.	Trading on Margin or Pledging. No Insider may hold Company securities in a margin account or pledge or hypothecate^1^ Company securities as collateral for a loan. Margin sales or foreclosure sales may occur at a time when the Insider is aware of material nonpublic information or otherwise is not permitted to trade in Company securities.

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i.

Trading in Securities of Other Companies. No Insider may, while in possession of material nonpublic information about any other public company gained in the course of employment with the Company, (a) trade in the securities of the other public company, (b) “tip” or disclose such material nonpublic information concerning that company to anyone, or (c) give trading advice of any kind to anyone concerning the other public company.

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5.	Permitted Transactions. The following activities are not restricted pursuant to this Policy:

​

a.

Restricted Stock Vesting. The vesting of restricted stock, or the exercise of a tax withhold right pursuant to which an Insider elects to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock, provided that any securities acquired pursuant to such vesting may not be sold while the Insider is in possession of material nonpublic information or is subject to a trading blackout.

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b.

Stock Option Exercises. Exercises of stock options or similar equity awards or the surrender of shares to the Company in payment of the stock option exercise price or in satisfaction of any tax withholding obligations, provided that any securities acquired pursuant to such exercise may not be sold, including as part of a broker-assisted cashless exercise, while the Insider is in possession of material nonpublic information or is subject to a trading blackout*.*

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c.	Employee Stock Purchase Plan. The election to acquire shares of Company securities under the Archrock, Inc. Employee Stock Purchase Plan or any other individual account that is made pursuant to standing instructions entered into while the Insider is not in possession of material nonpublic information or is not otherwise subject to a trading blackout.

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d.	Rule 10b5-1 Trading Plans. Purchases or sales made pursuant to a Rule 10b5-1 trading plan that is adopted and operated in compliance with the terms of this Policy (see Addendum B).

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e.	Other Transactions. Other purchases or sales of securities that do not involve a discretionary market transaction, for example, the purchase or sale of mutual funds where the individual investor has no discretion over the individual investments in the mutual fund or the timing of such investments.

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6.

Post-Termination Transactions. This Policy continues to apply to transactions in the Company’s securities after termination of service to the Company. If an Insider is in possession of material nonpublic information when his or her service terminates, or if the Insider was subject to a trading blackout at the time of termination, that individual may not trade in the Company’s securities until any such material nonpublic information has become public or is no longer material and/or the Company’s trading window has opened. If applicable, the pre-clearance procedures specified herein, however, will cease to apply to transactions in the Company’s securities upon the opening of the Company’s trading window and/or expiration of any trading blackout period, at which point the provisions set forth herein shall no longer apply.

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^1^  Pledge: lender (pledgee) takes possession of security.

Hypothecation: lender does not take possession unless and until debt must be satisfied through delivery or sale of the security.

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7.	Potential Penalties and Sanctions.

​

a.

Civil and Criminal Penalties. The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge the profit made or the loss avoided by the trading, pay the loss suffered by the person who purchased securities from or sold securities to the Insider or tippee, pay significant civil and/or criminal penalties, and serve a lengthy jail term. The Company in such circumstances may also be required to pay major civil or criminal penalties as well as suffer significant reputational damage.

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b.	Company Discipline. Violation of this Policy or federal or state insider trading or tipping laws by any Insider may, in the case of a director, subject the director to dismissal proceedings and, in the case of an officer or employee, subject the officer or employee to disciplinary action by the Company up to and including termination for cause.

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c.

Reporting of Violations. Any Insider who violates this Policy, including the Policy Addendums, or any federal or state law governing insider trading or tipping, or knows of any such violation by any other Insider, must report the violation immediately to the Chief Compliance Officer. Upon determining that any such violation has occurred, the Chief Compliance Officer, in consultation with the Company’s Disclosure Committee and, where appropriate, the Chair of the Audit Committee of the Board, will determine whether the Company should release any material nonpublic information, and, when required by applicable law, shall cause the Company to report the violation to the SEC or other appropriate governmental authority.

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8.	Chief Compliance Officer Responsibilities. The Company has designated its General Counsel as the individual responsible for administration of this Policy (the “Chief Compliance Officer”). The duties of the Chief Compliance Officer include:

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·	Administer the Policy and monitor and enforce compliance with all Policy provisions and procedures.
·	Respond to all inquiries relating to this Policy.
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·	Review and either approve or deny all proposed trades by Reporting Persons and hardship trades in accordance with the procedures set forth in Addendum A.
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·	After discussing with the executive leadership team, designate and announce regular quarterly and special trading blackout periods during which Control Group Members (as defined in Addendum A) may not trade in Company securities.
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·	Make this Policy available to all directors, officers, employees and dedicated contractors and provide for additional securities trading compliance training.
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·	Assist in the preparation and filing of all required SEC reports relating to insider trading in Company securities.
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·	Ensure public disclosure of this Policy and Addendums as required by the SEC.
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·	Revise the Policy as necessary to reflect changes in federal or state insider trading laws and regulations, or as otherwise deemed necessary or appropriate.
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The Chief Compliance Officer may designate one or more individuals who may perform such duties.

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ADDITIONAL GUIDANCE OR QUESTIONS

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Any Insider who is unsure whether the information that he or she possesses is material or nonpublic or otherwise has questions concerning this Policy should consult the Chief Compliance Officer for guidance before trading in Company securities.

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THIS POLICY IS NOT LEGAL ADVICE

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This Policy and the Policy Addendums set forth only a general discussion of the prohibited conduct regulated by U.S. law; they are not complete descriptions of the law and are not intended to be and should not be relied on as legal advice.

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RELATED ATTACHMENTS, POLICIES OR PROCEDURES

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Policy No.	Name / Hyperlink
N/A	Code of Business Conduct
Addendum A	Additional Provisions for Reporting Persons and Control Group Members
Addendum B	Additional Provisions for Rule 10b5-1 Trading Plans

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REVISION HISTORY

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​

Revision Code	Effective Date	Description of Changes
C	4/22/2020	Updated the quarterly trading/blackout windows
D	3/28/2023	Revised Rule 10b5-1 guidelines pursuant to new SEC rules and regulations and moved special restrictions relating to Reporting Persons, Control Group Members and trading plans to addendums.

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​ ​

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ADDITIONAL PROVISIONS FOR REPORTING PERSONS AND CONTROL GROUP MEMBERS

​

1.	Definitions.

​

a.

Reporting Persons. Pursuant to Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”), each member of the Company’s Board and certain officers of the Company are designated by the Board as “Reporting Persons” who are required to adhere to strict Section 16 reporting requirements. Transactions in Company securities made by a Reporting Person’s Immediate Family Members are also subject to such Reporting Person’s compliance and reporting obligations.

​

b.	Control Group Member. Generally, members of the Control Group are limited to the Company’s Board, executive officers and employees who may have access to key financial information or other material developments concerning the Company. Any individual who is designated a Control Group Member shall be advised by the Company’s Legal Department in writing.

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2.	Trading Windows.

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a.	Trading Only While Trading Window is Open. Subject to certain exceptions set forth pursuant to an approved Rule 10b5-1 trading plan (see Addendum B) or hardship trade, Control Group Members may not engage in market transactions involving Archrock securities when the trading window is “closed.”
·	The trading window closes when the market closes on the last business day of each quarter.
---	---
·	The trading window opens when the market opens on the third trading day after the Company’s public release of its earnings for that quarter (the “Control Group blackout period”). For the avoidance of doubt, the first trading day “after the Company’s public release of its earnings” shall be the day of such earnings release, provided that the Company has filed an 8-K announcing its earnings for the reporting period before 10:00 a.m. Central Time on such day.
---	---

​

b.

No Trading While Aware of Material Nonpublic Information. Notwithstanding the provisions of the immediately preceding section, any Control Group Member who is in possession of material nonpublic information regarding the Company may not trade in Company securities during an open trading window until the close of trading on the first full trading day following the Company’s widespread public release of such information.

​

c.	Exceptions for Hardship Cases. The Chief Compliance Officer may, on a case-by-case basis, authorize trading in Company securities outside of the applicable trading windows (but not during special trading blackout periods) due to financial hardship or other hardships, but only in accordance with the procedures set forth below.

​

3.	Procedures for Approving Trades by Reporting Persons and Hardship Cases.

​

a.	Trades by Reporting Persons. All transactions in Company securities by Reporting Persons, including their Immediate Family Members, must be approved in advance by the Chief Compliance Officer, even when the trading window is open, according to the following procedures:
·	the individual has notified the Chief Compliance Officer in writing prior to the proposed trade(s), of the amount and nature of the proposed trade(s),
---	---
·	the individual has certified to the Chief Compliance Officer in writing, no more than two business days prior to the proposed trade(s), that he or she is not aware of material nonpublic information regarding the Company, and
---	---
·	the Chief Compliance Officer has approved the trade in writing.
---	---

​

b.	Hardship Trades. The Chief Compliance Officer may, on a case-by-case basis, authorize trading in Company securities outside of an applicable trading window due to financial hardship or other hardships only after:
·	the person trading has notified the Chief Compliance Officer in writing of the circumstances of the hardship and the amount and nature of the proposed trade(s),
---	---
·	the person trading has certified to the Chief Compliance Officer in writing, no more than two business days prior to the proposed trade(s), that he or she is not aware of material nonpublic information concerning the Company, and
---	---
·	the Chief Compliance Officer has approved the terms of the hardship trade in writing.
---	---

​

​ ​

​

Approval of a hardship trade in one instance does not create a presumption that similar approval will be given in the future.

​

c.	Chief Compliance Officer Trades. If the Chief Compliance Officer desires to complete any trades involving Company securities, he or she must first obtain the approval of the Chief Executive Officer or the Chief Financial Officer of the Company.

​

c.	No Obligation to Approve Trades. The existence of the foregoing approval procedures does not in any way obligate the Chief Compliance Officer (or, in the case of any trade by the Chief Compliance Officer, the Chief Executive Officer or the Chief Financial Officer of the Company) to approve any trades requested by a Reporting Person, a hardship applicant or the Chief Compliance Officer.

​

4.	Compliance and Reporting Requirements.

​

a.

Opposite Way Transactions. All Reporting Persons are subject to the "short-swing" profit rules imposed by Section 16 of the Exchange Act, which states that an Insider should return to the Company profits realized from the purchase and sale (or sale and purchase) of Company securities when such opposite way transactions occur within the same six-month period. The Chief Compliance Officer is responsible for determining and administering the disgorgement of profits in the event of a trade by a Reporting Person under the short-swing profit rules. Certain transactions are exempt from the short-swing profit rule (e.g., the withholding of shares for taxes associated with equity vesting). Questions should be directed to the Chief Compliance Officer.

​

b.	Reporting. All Reporting Persons are subject to certain reporting requirements, such as Form 3, 4, and 5 filings under Section 16 of the Exchange Act. Reporting Persons who are subject to these requirements will be notified by the Chief Compliance Officer and are required to follow the procedures established to assist in meeting these disclosure requirements.

​

​ ​

​

RULE 10b5-1 TRADING PLANS

​

1.

General Information. Under Rule 10b5-1 of the Exchange Act, an individual has an affirmative defense against an allegation of insider trading if he or she demonstrates that the purchase, sale or trade in question took place pursuant to a binding contract, specific instruction or written plan that was put into place before he or she became aware of material nonpublic information. Such contracts, irrevocable instructions and plans are commonly referred to as Rule 10b5-1 plans (a “trading plan”).

​

Trading plans have the obvious advantage of protecting against insider trading liability. However, they also require advance commitments regarding the amounts, prices and timing of purchases or sales of Company securities and thus limit flexibility and discretion. In addition, once a trading plan has been adopted, it is generally not advisable to amend or modify such plan. Accordingly, while some individuals may find trading plans attractive, they may not be suitable for all Insiders.

​

**2.**Specific Requirements.

​

a.

Pre-Approval. For a trading plan to serve as an adequate defense against an allegation of insider trading, a number of legal requirements must be satisfied. Accordingly, anyone wishing to establish a trading plan must first receive approval from the Chief Compliance Officer or his or her designee and provide sufficient notice for the terms of the trading plan to be reviewed and approved by the Chief Compliance Officer.

​

b.	Timing. An individual desiring to enter into a trading plan must enter into the trading plan during an open trading window. Even if the trading window is open, the individual must not be in possession of material nonpublic information when entering into a trading plan.

​

c.	Good Faith Requirements. An individual must act in good faith when entering into and throughout the duration of the trading plan. As an example, the affirmative defense would not be available for an individual who influences the timing of a corporate disclosure to benefit a planned trade under a trading plan.

​

d.	Certifications. The individual must personally certify in the trading plan that they:
·	are not aware of any material nonpublic information about the security or the Company; and
---	---
·	are adopting the trading plan in good faith and not as part of a plan or scheme to evade insider trading prohibitions.
---	---

​

e.	Required Information. The trading plan must either specify the amounts, prices and dates of all transactions under the trading plan, or provide a written formula, algorithm or computer program for determining the amount, price and date of the transactions, and must prohibit the individual adopting or modifying such trading plan from exercising any subsequent influence over the transactions.

​

f.	Waiting Period. A waiting period between the date the trading plan is adopted or modified and the date of the first possible transaction under the trading plan is required pursuant to the rules of the SEC. This “cooling off” period for Reporting Persons must be the later of:
·	90 days following trading plan adoption or modification; or
---	---
·	2 business days following the disclosure in Forms 10-K or 10-Q of the Company’s financial results for the fiscal quarter in which the trading plan was adopted or modified.
---	---

In any case, such waiting period shall not exceed 120 days following trading plan adoption or modification.

The “cooling off” period for non-Reporting Person employees and any other persons, other than the Company, must be at least 30 days following trading plan adoption or modification.

​

g.	Overlapping Trading Plans. An individual may not enter into multiple trading plans which provide for trades during an overlapping time period unless:
·	such trading plans only authorize the sale of securities necessary to satisfy tax withholding obligations in connection with the vesting of a compensatory award (e.g., restricted stock or restricted stock units); and
---	---
·	the individual does not otherwise exercise control over the timing of such sales.
---	---

​

​ ​

​

h.

Plan Amendment or Termination. Approval of the Chief Compliance Officer is required to amend or terminate a trading plan. An individual may only modify a trading plan outside of a blackout period and, in any event, when the individual does not possess material nonpublic information Amendments are highly discouraged and may compromise the affirmative defense under the SEC’s Rule 10b5-1 trading rules.

​

i.	Trades Outside of a Trading Plan. An individual with a trading plan in effect should be aware that trades made outside of such trading plan during the same period the trading plan is in effect will not be afforded the safe-harbor protections of Rule 10b5-1.

​

j.	Reporting. Market transactions made by Reporting Persons pursuant to a trading plan shall be indicated on Forms 4 and 5. In addition, the adoption, modification or termination of a trading plan by any director or officer shall be reported in the Company’s Form 10-Q or Form 10-K for the reporting quarter and shall include the material terms of such adoption, modification or termination.

​

k.	Company Authority. The Chief Compliance Officer or his or her designee may exercise the Company’s right to suspend all trading in its stock under a trading plan with notice to the applicable broker.

​

​ Exhibit 21.1

​

Archrock, Inc. and Subsidiaries

Company Listing as of December 31, 2024

​

​	​	​	​	​
Company	​	Ownership	​	Incorporation
AROC Corp.	​	Wholly owned	​	Delaware
AROC Services GP LLC	​	Wholly owned	​	Delaware
AROC Services LP LLC	​	Wholly owned	​	Delaware
Archrock Services, L.P.	​	Wholly owned	​	Delaware
Archrock Services Leasing LLC	​	Wholly owned	​	Delaware
Archrock GP LLC	​	Wholly owned	​	Delaware
Archrock GP LP LLC	​	Wholly owned	​	Delaware
Archrock MLP LP LLC	​	Wholly owned	​	Delaware
Archrock General Partner, L.P.	​	Wholly owned	​	Delaware
Archrock Partners Corp.	​	Wholly owned	​	Delaware
Archrock Partners, L.P.	​	Wholly owned	​	Delaware
Archrock Partners Finance Corp.	​	Wholly owned	​	Delaware
Archrock Partners Operating LLC	​	Wholly owned	​	Delaware
Archrock Partners Leasing LLC	​	Wholly owned	​	Delaware<br><br>Ar
Archrock Ecotec LLC	​	Wholly owned	​	Delaware
Archrock FGC LLC	​	Wholly owned	​	Delaware
Archrock Ionada LLC	​	Wholly owned	​	Delaware
Archrock ELT LLC	​	Wholly owned	​	Delaware
Total Operations and Production Services, LLC	​	Wholly owned	​	Delaware
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​
​	​	​	​	​

​ ​

Exhibit 23.1

​

​

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

​

We consent to the incorporation by reference in Registration Statements No. 333-238264, and No. 333-217923 on Form S-8, Registration Statement No. 333-267523 on Form S-3ASR of our reports dated February 26, 2025, relating to the financial statements of Archrock, Inc. and subsidiaries (the “Company”) and the effectiveness of the Company’s internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended December 31, 2024.

/s/ DELOITTE & TOUCHE LLP

Houston, Texas

February 25, 2025

​ 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 Annual Report on Form 10-K of Archrock, Inc.;

​

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: February 25, 2025

​

​	​	​	​
By:	/s/ D. Bradley Childers		​
​	Name:	D. Bradley Childers	​
​	Title:	President and Chief Executive Officer	​
​	​	(Principal Executive Officer)	​

​ ​

​ Exhibit 31.2

​

Certification

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

​

I, Douglas S. Aron, certify that:

​

1. I have reviewed this Annual Report on Form 10-K of Archrock, Inc.;

​

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: February 25, 2025

​

​	​	​	​
By:	/s/ Douglas S. Aron		​
​	Name:	Douglas S. Aron	​
​	Title:	Senior Vice President and Chief Financial Officer
​	​	(Principal Financial Officer)	​

​ ​

​ 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 Annual Report on Form 10-K of Archrock, Inc. (the “Company”) for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), D. Bradley Childers, as Chief Executive Officer of the Company, 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 Company.

​

3	​	​
/s/ D. Bradley Childers		​
Name:	D. Bradley Childers	​
Title:	President and Chief Executive Officer	​
​		​
Date: February 25, 2025		​

​

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 Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. ​

​ 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 Annual Report on Form 10-K of Archrock, Inc. (the “Company”) for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Douglas S. Aron, as Chief Financial Officer of the Company, 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 Company.

​

3	​	​
/s/ Douglas S. Aron		​
Name:	Douglas S. Aron	​
Title:	Senior Vice President and Chief Financial Officer	​
​		​
Date: February 25, 2025		​

​

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 Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. ​