(12) Partners’ Capital

Common Units

As of December 31, 2018, we had 89,983,790 common units outstanding. As of December 31, 2018, ETP held 39,658,263 common units, including 8,000,000 common units held by the General Partner and controlled by ETP.

USA Compression Holdings, which controlled the General Partner and its IDRs until the Transactions Date, sold all of its remaining common units during the year ended December 31, 2018.

The limited partners holding our common units have the following rights, among others:

Right to receive distributions of our available cash (as defined in our Second Amended and Restated Agreement of Limited Partnership of the Partnership (the “Partnership Agreement”)) within 45 days after the end of each quarter, so long as we have paid the required distributions on the Preferred Units for such quarter;

Right to transfer limited partner unit ownership to substitute limited partners;

Right to approve certain amendments of the Partnership Agreement;

Right to electronic access of an annual report, containing audited financial statements and a report on those financial statements by our independent public accountants within 90 days after the close of the fiscal year end; and

Right to receive information reasonably required for tax reporting purposes within 90 days after the close of the calendar year.

Class B Units

As of December 31, 2018, we had 6,397,965 Class B Units outstanding which represent limited partner interests in the Partnership, all of which are held by ETP. Each Class B Unit will automatically be converted into one common unit following the record date attributable to the quarter ending June 30, 2019. Each Class B Unit has all of the rights and obligations of a common unit, except the right to participate in distributions made prior to conversion of the Class B Units into common units.

Cash Distributions

As the USA Compression Predecessor is deemed to be the predecessor of the Partnership for financial reporting purposes, cash distributions made by the Partnership in periods prior to the Transactions Date are not included within the results of operations presented within the consolidated financial statements for the year ended December 31, 2018.

We have declared quarterly distributions per unit to our limited partner unitholders of record, including holders of our common and phantom units, as follows (dollars in millions, except distribution per unit):


	Distribution per		Amount Paid to		Amount Paid to
	Limited Partner		Common		Phantom		Total
Payment Date	Unit		Unitholders		Unitholders		Distribution
May 11, 2018	$	0.525	$	47.2	$	0.4	$	47.6
August 10, 2018		0.525		47.2		0.4		47.6
November 9, 2018		0.525		47.2		0.5		47.7
2018 Total Distributions	$	1.575	$	141.6	$	1.3	$	142.9

Announced Quarterly Distribution

On January 17, 2019, we announced a cash distribution of $0.525 per unit on our common units. The distribution was paid on February 8, 2019 to unitholders of record as of the close of business on January 28, 2019.

Distribution Reinvestment Plan

During the year ended December 31, 2018, distributions of $0.6 million were reinvested under the Distribution Reinvestment Plan (the “DRIP”) resulting in the issuance of 39,280 common units.

Earnings Per Common Unit

The computations of earnings per unit are based on the weighted average number of participating securities outstanding during the period. Basic earnings per unit is determined by dividing net loss allocated to participating securities after deducting the amount distributed on Preferred Units, by the weighted average number of participating securities outstanding during the period. Net loss is allocated to participating securities based on their respective shares of the distributed and undistributed earnings for the period. To the extent cash distributions exceed net income (loss) for the period, the excess distributions are allocated to all participating securities outstanding based on their respective ownership percentages. Diluted earnings per unit are computed using the treasury stock method, which considers the potential issuance of limited partner units associated with our long-term incentive plan and warrants. The classes of participating securities include common units, Class B Units, and certain equity-based compensation awards. Unvested phantom units and unexercised warrants are not included in basic earnings per unit, as they are not considered to be participating securities, but are included in the calculation of diluted earnings per unit to the extent that they are dilutive, and in the case of warrants to the extent they are considered “in the money”. For the year ended December 31, 2018, approximately 208,000 incremental unvested phantom units were excluded from the calculation of diluted earnings per unit because the impact was anti-dilutive. Our outstanding warrants are not applicable to the computation as of December 31, 2018 as they are not considered “in the money” for the period. Earnings per unit is not applicable to the USA Compression Predecessor as the USA Compression Predecessor had no outstanding common units prior to the Transactions.