USA Compression Partners, LP (NYSE:USAC) Files An 8-K Changes in Registrant’s Certifying AccountantItem 4.01 Changes in Registrant’s Certifying Accountant.
On April5, 2018, the Audit Committee (the “Committee”) of the board of directors (the “Board”) of USA Compression GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the “General Partner”), notified KPMG LLP (“KPMG”) of its appointment of Grant Thornton LLP (“Grant Thornton”) to serve as the Partnership’s new independent registered public accounting firm for the fiscal year ending December31, 2018. Concurrently on April5, 2018 (the “Dismissal Date”), KPMG was also dismissed as the auditor of the Partnership. The decision was made as part of the integration process related to the acquisition of the General Partner by ETE to the GP Purchase Agreement. The acquisition resulted in the Partnership becoming a consolidated subsidiary of ETE. As Grant Thornton currently serves as ETE’s independent registered public accounting firm, the Committee determined that it would be beneficial for ETE and the Partnership to have the same accounting firm audit their respective financial statements.
KPMG’s audit reports on the Partnership’s consolidated financial statements for the fiscal years ended December31, 2017 and 2016 did not contain any adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the Partnership’s two most recent fiscal years ended December31, 2017 and 2016 and in the subsequent interim period through the Dismissal Date, there were no (i)disagreements between the Partnership and KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of KPMG, would have caused KPMG to make reference to the subject matter of the disagreement in its reports on the consolidated financial statements for such years, or (ii)“reportable events” (as that term is defined in Item 304(a)(1)(v)of Regulation S-K).
The Partnership provided KPMG with a copy of this Current Report on Form8-K, and requested that KPMG furnish the Partnership with a letter addressed to the Securities and Exchange Commission stating whether KPMG agrees with the disclosures contained in this Current Report on Form8-K, and, if not, stating the respects in which it does not agree. The Partnership had not received a copy of the requested letter from KPMG as of the time that it filed this Current Report on Form 8-K. A copy of such letter, when received, will be included as Exhibit 16.1 to an Amendment of this Current Report on Form 8-K.
During the Partnership’s two most recent fiscal years ended December31, 2017 and 2016 and the subsequent interim period through the Dismissal Date, neither the Partnership nor anyone on its behalf has consulted with Grant Thornton regarding (i)the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Partnership’s financial statements, and neither a written report nor oral advice was provided to the Partnership that Grant Thornton concluded was an important factor considered by the Partnership in reaching a decision as to the accounting, auditing, or financial reporting issue
or (ii)any matter that was either the subject of a “disagreement” (as that term is defined in Item 304(a)(1)(iv)of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a “reportable event” (as that term is defined in Item 304(a)(1)(v)of Regulation S-K).
As of the date of this report, management has preliminarily concluded that the Partnership will be the predecessor for reporting purposes for periods prior to the date on which the CDM Acquisition was consummated. However, the Partnership may ultimately determine that CDM is the appropriate reporting predecessor and account for the CDM Acquisition as a “reverse acquisition”. If the Partnership accounts for the CDM Acquisition as a “reverse acquisition,” the financial statements of CDM as of December31, 2017 and 2016 and for the years ended December31, 2017, 2016 and 2015, which have been audited by Grant Thornton, will become the historical financial statements of the Partnership and the closing of the CDM Acquisition on April2, 2018 will constitute a deemed change in independent registered public accounting firms from KPMG to Grant Thornton as of such date. If management maintains its conclusion that the Partnership will be the predecessor for reporting purposes for periods prior to the date on which the CDM Acquisition was consummated, then the change in independent registered public accounting firms from KPMG to Grant Thornton will have occurred as of the Dismissal Date as noted above.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the closing of the GP Purchase and the CDM Acquisition, the following directors were removed from the Board effective as of April2, 2018: Jerry L. Peters, Jim H. Derryberry, Robert F. End, William H. Shea,Jr., Olivia C. Wassenaar, Forrest E. Wylie and Michael A. Wichterich. Such removals do not arise from any disagreement with the General Partner, its management or the Board on any matter relating to the General Partner’s, or the Partnership’s, operations, policies or practices, the general direction of the General Partner or the Partnership, or such directors’ role on the Board.
On April2, 2018, Energy Transfer Partners, L.L.C., as sole member of the General Partner, appointed Michael Bradley, Christopher R. Curia, Glenn E. Joyce, Thomas E. Long, Thomas P. Mason, Matthew S. Ramsey and William S. Waldheim to serve as directors on the Board to fill the vacancies created by the removal of Jerry L. Peters, Jim H. Derryberry, Robert F. End, William H. Shea,Jr., Olivia C. Wassenaar, Forrest E. Wylie and Michael A. Wichterich, effective April2, 2018. In addition, effective April2, 2018, Matthew Hartman was appointed as a director to the Board Representation Agreement, a description of which is included under Item 1.01 of the Partnership’s Current Report on Form8-K filed on April6, 2018 and incorporated herein by reference. Eric D. Long will also remain a director on the Board.
Messrs.End, Peters and Wylie served on the audit committee of the Board and Mr.Peters served as chairman of the audit committee. In place of the departing directors, the Board has appointed Messrs.Waldheim, Hartman and Joyce to serve on the audit committee, while Mr.Waldheim has been appointed as the chairman of the audit committee. Messrs.End and Shea and Ms.Wassenaar served on the compensation committee of the Board and Mr.End served as chairman of the compensation committee. In place of the departing directors, the Board has appointed Messrs.Joyce and Waldheim to serve on the compensation committee, while Mr.Joyce has been appointed as the chairman of the compensation committee.
With respect to each of the new directors, there are no arrangements or understandings between such director and any other persons to which he will serve as a director (other than the Board Representation Agreement with respect to Mr.Hartman). Mr.Thomas E. Long is the Group Chief Financial Officer of the general partner of ETE and the Chief Financial Officer of the general partner of ETP. Mr.Ramsey is the President and Chief Operating Officer of the general partner of ETP. Mr.Mason is the Executive Vice President and General Counsel of ETE. Mr.Curia is the Executive Vice President — Human Resources of both the general partner of ETE and the general partner of ETP. Mr.Bradley oversees ETP’s hyrdrocarbon export business. For the year ended December31, 2017, subsidiaries of ETP generated revenues to the Partnership, CDM and CDM E&T of approximately $19.3 million. There are no relationships between Messrs.Hartman, Joyce and Waldheim and the General Partner or any related person of the General Partner that would require disclosure to Item 404(a)of Regulation S-K.
Item 8.01 Other Events.
On April2, 2018, the Partnership entered into the First Supplemental Indenture (the “Supplemental Indenture”), among the Partnership, its wholly-owned subsidiary, USA Compression Finance Corp., a Delaware corporation (“Finance Corp.” and, together with the Partnership, the “Issuers”), the Guarantors named on the pages
thereto and Wells Fargo Bank, National Association, as trustee, to the indenture dated as of March23, 2018, relating to the 6.875% senior notes due 2026 of the Issuers (the “Indenture”).
The Supplemental Indenture provides for, among other things, the additions of CDM and CDM E&T as guarantors under the Indenture.
The foregoing description of the Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference to the complete text of the Supplemental Indenture, a copy of which is filed as Exhibit4.1 to this Current Report on Form8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
USA Compression Partners, LP ExhibitEX-4.1 2 a18-9616_2ex4d1.htm EX-4.1 Exhibit 4.1 USA COMPRESSION PARTNERS,…To view the full exhibit click
About USA Compression Partners, LP (NYSE:USAC)
USA Compression Partners, LP is an independent provider of compression services in the United States. The Company provides compression services to its customers primarily in connection with infrastructure applications, including both allowing for the processing and transportation of natural gas through the domestic pipeline system and managing crude oil production through artificial lift processes. The Company’s segment is the compression services business. The Company’s compression services play a role in the production, processing and transportation of both natural gas and crude oil. It provides compression services in various shale plays across the United States, including the Utica, Marcellus, Permian Basin, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara and Fayetteville shales. Its business focuses primarily on compression services serving infrastructure installations, including centralized natural gas gathering systems and processing facilities.
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