Organization and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Effects of changes in ownership interest

The following table presents the effects of changes in our ownership interest in the Partnership on the equity attributable to Archrock stockholders:



	Six Months Ended June 30,
	2018			2017
Net loss attributable to Archrock stockholders	$	(1,879	)	$	(18,372	)
Decrease in Archrock stockholders’ additional paid-in capital for purchase of Partnership common units	52,815			—
Change from net loss attributable to Archrock stockholders and transfers from noncontrolling interest	$	50,936		$	(18,372	)

Summary of net income (loss) attributable to Exterran common stockholders used in the calculation of basic and diluted income (loss) per common share

The following table summarizes net income (loss) attributable to Archrock common stockholders used in the calculation of basic and diluted loss per common share (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Net income (loss) attributable to Archrock stockholders	$	1,937		$	(6,687	)	$	(1,879	)	$	(18,372	)
Less: Net income attributable to participating securities	(157		)	(180		)	(313		)	(334		)
Net income (loss) attributable to Archrock common stockholders	$	1,780		$	(6,867	)	$	(2,192	)	$	(18,706	)

Schedule of potential shares of common stock that were included in computing diluted income (loss) attributable to Exterran common stockholders per common share

The following table shows the potential shares of common stock that were included in computing diluted income (loss) attributable to Archrock common stockholders per common share (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Weighted average common shares outstanding including participating securities	112,995		70,908		92,130		70,833
Less: Weighted average participating securities outstanding	(1,699	)	(1,320	)	(1,541	)	(1,337	)
Weighted average common shares outstanding — used in basic income (loss) per common share	111,296		69,588		90,589		69,496
Net dilutive potential common shares issuable:
On exercise of options	99		*		*		*
On the settlement of employee stock purchase plan shares	7		—		*		—
Weighted average common shares outstanding — used in diluted income (loss) per common share	111,402		69,588		90,589		69,496

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*	Excluded from diluted income (loss) per common share as their inclusion would have been anti-dilutive.

Schedule of potential shares of common stock issuable, excluded from computation of diluted income (loss), attributable to Exterran common stockholders per common share

The following table shows the potential shares of common stock issuable that were excluded from computing diluted income (loss) attributable to Archrock common stockholders per common share as their inclusion would have been anti-dilutive (in thousands):



	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Net dilutive potential common shares issuable:
On exercise of options where exercise price is greater than average market value for the period	187	282	205	297
On exercise of options	—	108	89	125
On the settlement of employee stock purchase plan shares	—	—	5	—
Net dilutive potential common shares issuable	187	390	299	422

Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax, excluding noncontrolling interest

The following table presents the changes in accumulated other comprehensive income (loss) by component, net of tax, and excluding noncontrolling interest, during the six months ended June 30, 2017 and 2018 (in thousands):



	Derivatives Cash Flow Hedges
Accumulated other comprehensive loss, January 1, 2017	$	(1,678	)
Gain recognized in other comprehensive income, net of tax⁽¹⁾	173
Loss reclassified from accumulated other comprehensive loss, net of tax⁽²⁾	569
Other comprehensive income attributable to Archrock stockholders	742
Accumulated other comprehensive loss, June 30, 2017	$	(936	)

Accumulated other comprehensive income, January 1, 2018	$	1,197
Gain recognized in other comprehensive income, net of tax⁽³⁾	2,051
Loss reclassified from accumulated other comprehensive loss, net of tax⁽⁴⁾	456
Merger-related adjustments ⁽⁵⁾	5,670
Other comprehensive income attributable to Archrock stockholders	8,177
Accumulated other comprehensive income, June 30, 2018	$	9,374

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⁽¹⁾

During the three months ended June 30, 2017, we recognized a loss of $0.1 million and a tax benefit of $0.1 million, in other comprehensive income (loss) related to the change in the fair value of derivative instruments. During the six months ended June 30, 2017, we recognized a gain of $0.2 million and immaterial tax expense in other comprehensive income (loss) related to change in the fair value of derivative financial instruments.

⁽²⁾

During the three months ended June 30, 2017, we reclassified a loss of $0.4 million to interest expense and a tax benefit of $0.1 million to provision for (benefit from) income taxes in our condensed consolidated statements of operations from accumulated other comprehensive income (loss). During the six months ended June 30, 2017, we reclassified a loss of $0.9 million to interest expense and a tax benefit of $0.3 million to provision for (benefit from) income taxes in our condensed consolidated statements of operations from accumulated other comprehensive income (loss).

⁽³⁾

During the three months ended June 30, 2018, we recognized a gain of $0.9 million and a tax provision of $0.5 million, in other comprehensive income (loss) related to the change in the fair value of derivative instruments. During the six months ended June 30, 2018, we recognized a gain of $2.9 million and a tax provision of $0.9 million, in other comprehensive income (loss) related to the change in the fair value of derivative instruments.

⁽⁴⁾

During the three months ended June 30, 2018, we reclassified an immaterial loss to interest expense and an immaterial tax benefit to provision for (benefit from) income taxes in our condensed consolidated statements of operations from accumulated other comprehensive income (loss). During the six months ended June 30, 2018, we reclassified a loss of $0.3 million to interest expense and a tax benefit of $0.1 million to provision for (benefit from) income taxes in our condensed consolidated statements of operations from accumulated other comprehensive income (loss). Additionally, during the six months ended June 30, 2018, we reclassified stranded tax effects resulting from the TCJA of $0.3 million to accumulated deficit in our condensed consolidated balance sheets. See Note 2 (“Recent Accounting Developments”) for further detail.


⁽⁵⁾	Pursuant to the Merger, we reclassified a gain of $5.7 million from noncontrolling interest to accumulated other comprehensive income (loss) related to fair value of derivative instruments that was previously attributed to public ownership of the Partnership.