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Commitments and Contingencies
3 Months Ended
Mar. 31, 2018
Commitments and Contingencies  
Commitments and Contingencies

(10)  Commitments and Contingencies

 

(a)  Major Customers

 

We did not have revenue from any single customer representing 10% or more of total revenue for the three months ended March 31, 2018 or 2017.    

 

(b)  Litigation

 

From time to time, we and our subsidiaries may be involved in various claims and litigation arising in the ordinary course of business.  In management’s opinion, the resolution of such matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows.

 

(c)  Equipment Purchase Commitments

 

Our future capital commitments are comprised of binding commitments under purchase orders for new compression units and serialized parts ordered but not received.  The commitments as of March 31, 2018 were $128.7 million, which are expected to be settled throughout 2018 and early 2019. 

 

(d)  Sales Tax Contingency

 

Our compliance with state and local sales tax regulations is subject to audit by various taxing authorities.  Certain taxing authorities have claimed that specific operational processes, which we and others in our industry regularly conduct, result in transactions that are subject to state sales taxes.  We, and other entities in our industry, have disputed these claims based on existing tax statutes which provide for manufacturing exemptions on the transactions in question.  We continue to work with the state taxing authority in providing them the documentation available to us to support the position we have taken with regard to the disputed transactions.  We have recognized a liability of $0.1 million related to this issue; however, we believe it is reasonably possible that we could incur additional losses for this matter depending on whether the taxing authority accepts our documentation as sufficient to support our position that the disputed transactions are not taxable and the impact of any potential resulting litigation.  Management estimates that the range of losses we could incur related to this matter is from $0.1 million to approximately $3.7 million.  The upper end of this range assumes that we will be unable to apply the manufacturing exemption to any of the transactions in question, which management believes is remote.