v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Measurements  
Fair Value Measurements

17. 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 instruments 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 market 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

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Investment in ECOTEC

As of June 30, 2026, we owned a 25% equity interest in ECOTEC in which we have elected the fair value option to account for this investment. There were no purchases of equity interests or unrealized changes in the fair value of our investment in ECOTEC recognized during the three and six months ended June 30, 2026 or 2025. The fair value of our investment in ECOTEC at both June 30, 2026 and December 31, 2025 was $14.6 million, and is included in other assets in our condensed consolidated balance sheets.

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. See Note 7 (“Investments in Unconsolidated Affiliates and Other Strategic Investments”) for further details.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Investments in Unconsolidated Affiliates and Other Strategic Investments

As of June 30, 2026 and December 31, 2025, the carrying value of our investments in which we have elected the fair value measurement alternative was $12.0 million and $10.6 million, respectively, and is included in other assets in our condensed consolidated balance sheets. There were no upward adjustments, impairments or downward adjustments to the carrying value of these investments as of both June 30, 2026 and December 31, 2025. See Note 7 (“Investments in Unconsolidated Affiliates and Other Strategic Investments”) for further details.

Compression Fleet

During the six months ended June 30, 2026, we recorded nonrecurring fair value measurement adjustments related to our idle compressors. Our estimate of the compression fleet’s fair value was primarily based on the expected net sale proceeds compared with other fleet units we recently sold and/or 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 as of June 30, 2026 and December 31, 2025 was as follows:

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(in thousands)

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June 30, 2026

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December 31, 2025

Impaired compression fleet

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$

1,288

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$

871

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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:

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Range

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  ​ ​Weighted Average (1)

Estimated net sale proceeds:

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As of June 30, 2026

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$0 - $375 per horsepower

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$59 per horsepower

As of December 31, 2025

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$0 - $241 per horsepower

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$54 per horsepower

(1)Calculated based on an estimated discount for market liquidity of 19% as of both June 30, 2026 and December 31, 2025.

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See Note 13 (“Long-Lived and Other Asset Impairment”) for further details.

Other Financial Instruments

The carrying amounts of our cash, accounts receivable and accounts payable approximate fair value due to the short-term nature of these 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:

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(in thousands)

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June 30, 2026

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December 31, 2025

Carrying amount of fixed rate debt (1)

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$

1,500,000

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$

1,500,000

Fair value of fixed rate debt

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1,510,000

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1,527,000

(1) Carrying amounts exclude unamortized premium and deferred financing costs. See Note 9 (“Long-Term Debt”) for further details.