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Commitments and Contingencies
6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Accrued Capital Expenditures
As of June 30, 2024, and December 31, 2023, the Company has accrued capital expenditures of $42.8 million and $30.5 million, respectively. These amounts were included in accounts payable or accrued liabilities on the consolidated condensed balance sheets.
Purchase Commitments
Purchase commitments primarily consist of future commitments to purchase new compression units that have been ordered but not yet received. As of June 30, 2024, these commitments amounted to $220.7 million, of which $169.3 million is expected to be settled within the next twelve months.
Contingent Consideration
The Company agreed to pay, as contingent consideration, up to $3.7 million of certain past due accounts receivable acquired in connection with a prior acquisition in 2019, if collected, to the seller in that transaction. The Company records contingent consideration at the acquisition and end of reporting periods at fair value in accrued liabilities. As of June 30, 2024, and December 31, 2023, none of the outstanding receivables had been collected.
Sales Tax Contingency
Between October 2019 and April 2024, the Company received notices from the Texas Comptroller’s office in regards to audits for periods ranging from December 2015 through December 2023. The audits pertain to whether the Company may owe sales tax on certain of its compression equipment and related parts that it had purchased during that time period. As of December 31, 2023, the Company had accrued a total amount of $28.8 million for this contingent liability. During the six months ended June 30, 2024, based on current information, the Company accrued an additional $38.9 million, of which $15.0 million is related to fair value adjustments associated with purchase price allocation of the CSI Acquisition and $3.3 million is related to parts usage recorded to expense. As of June 30, 2024, the Company had a total of $67.7 million included as accrued liabilities on the condensed consolidated balance sheets.
Legal Matters
From time to time, the Company may become involved in various legal matters. Management believes that as of June 30, 2024, there are no legal matters whose resolution could have a material adverse effect on the unaudited condensed consolidated financial statements.