SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Schedule of Preferred Units

Activity related to the Preferred Units during the nine months ended September 30, 2019 is as follows:

	Nine Months Ended September 30, 2019
	Units Outstanding	Financial Position(3)
	(In thousands, except for unit data)
Redeemable noncontrolling interest - Preferred Units: beginning of period	—	$	—
Issuance of Preferred Units, net	625,000	516,790
Distribution of in-kind additional Preferred Units(1)	2,188	—
Allocation of Altus Midstream net income	N/A	20,844
Accreted value adjustment	N/A	779
Redeemable noncontrolling interest - Preferred Units: end of period	627,188	$	538,413
Embedded derivative liability(2)		98,228
		$	636,641

(1) Subsequent to the balance sheet date, Altus Midstream provided notice to the Preferred Unit holders of record at September 30, 2019 of the amount of the distribution on the Preferred Units for the quarter ended September 30, 2019. The holders also were notified that Altus Midstream elected to pay the entire amount of the approximate $11.0 million distribution in-kind in additional Preferred Units (PIK Units) on November 14, 2019. In total, 10,975.8 PIK Units will be issued in satisfaction of the required distribution.

(2) See Note 15 — Fair Value Measurements for discussion of the fair value changes in the embedded derivative liability during the period.

(3) As of September 30, 2019, the aggregate Redemption Price was $645.8 million, based on an internal rate of return of 11.5 percent.

N/A - not applicable.

The net transaction price as shown below was based on the negotiated transaction price, less issue discounts and transaction costs.

	June 12, 2019
	(In thousands)
Transaction price, gross	$	625,000
Issue discount	(3,675		)
Transaction costs to other third parties	(10,076		)
Transaction price, net	$	611,249

Certain redemption features embedded within the terms of the Preferred Units require bifurcation and measurement at fair value. As such, the net transaction price shown in the table above was allocated to the preferred redeemable noncontrolling interest and the embedded features according to the associated initial fair value measurements as follows:

	June 12, 2019
	(In thousands)
Redeemable noncontrolling interest - Preferred Units	$	516,790
Long-term liability: Embedded derivative(1)	94,459
	$	611,249

(1)

See Note 15 — Fair Value Measurements for further discussion on the nature and recognition of the embedded derivative.