Select Water Solutions, Inc.

Previous wording

This discussion relates to the three and nine months ended September 30, 2025 (the “Current Quarter” and the “Current Period”, respectively) and the three and nine months ended September 30, 2024 (the “Prior Quarter” and the “Prior Period”, respectively).

Current wording

This discussion relates to the three months ended March 31, 2026 (the “Current Quarter”) and the three months ended March 31, 2025 (the “Prior Quarter”).

Previous wording

Select is committed to a corporate strategy that supports the long-term viability of our business model in a manner that focuses on all stakeholders, including our people, our customers, the environment, and the communities in which we operate. We believe this focus will help us and our customers achieve their short-term and long-term strategic goals, help us attract and retain top talent, and further our efforts to generate investor returns. We believe our commitment to foster a culture of corporate responsibility is an important part of being a company with operations spanning the contiguous U.S. Further, we believe being a good corporate steward is strategic to our growth in the energy industry and will better allow us to develop solutions that both address the needs of our customers and contribute to sustainable business practices. Our commitment to these principles is exemplified through our sustainability-linked credit facility, which incorporates certain key performance indicator targets related to growing produced water recycling volumes and maintaining market-leading employee safety performance. Additionally, as a customer-oriented company, we compete with other providers based on various factors, including safety and operational performance, technological innovation, process efficiencies and reputational awareness. We have identified the following four priorities as part of our comprehensive corporate responsibility initiative: Environmental Consciousness, Health and Safety, Human Capital Management and Community Outreach. We believe there is a strong link between these corporate responsibility initiatives and our ability to provide value to our stakeholders.

Current wording

Select is committed to a corporate strategy that supports the long-term viability of our business model in a manner that focuses on all stakeholders, including our people, our customers, the environment, and the communities in which we operate. We believe this focus will help us and our customers achieve their short-term and long-term strategic goals, help us attract and retain top talent, and further our efforts to generate investor returns. We believe our commitment to foster a culture of corporate responsibility is an important part of being a company with operations spanning the contiguous U.S. Further, we believe being a good corporate steward is strategic to our growth in the energy industry and will better allow us to develop solutions that both address the needs of our customers and contribute to sustainable business practices. Our commitment to these principles is exemplified through our sustainability-linked credit facility, which incorporates certain key performance indicator targets related to growing produced water recycling volumes and maintaining market-leading employee safety performance. Additionally, as a customer-oriented company,

Previous wording

We are one of the few public companies whose primary focus is on the management of water and water logistics in the energy industry, with a focus on driving efficient, environmentally responsible, and economical solutions that lower costs throughout the lifecycle of the well. We believe water is a valuable resource and understand that the energy industry, other industries, and the general public are competing for this resource. We continue to provide access to water as demanded by our customers and have significantly increased our focus on the recycling and reuse of produced water, as well as assessing other industrial water sources, to meet the industry’s water demand and align our operations with the goals of our customers. We have invested significantly in the development and acquisition of fixed and mobile recycling facilities that support the advancement of commercialized produced water reuse solutions. By doing so, we strive to reduce the amount of produced water being reinjected into SWDs and to reduce our usage of fresh water as well as that of our customers. By implementing our innovative approach to end-to-end water solutions, Select has become a leader in recycling produced water to be reused for energy production.

Current wording

We are one of the few public companies whose primary focus is on the management of water and water logistics in the energy industry, with a focus on driving efficient, environmentally responsible, and economical solutions that lower costs throughout the lifecycle of the well. We believe water is a valuable resource and understand that the energy industry, other industries, and the general public are competing for this resource. We continue to provide access to water as demanded by our customers and have significantly increased our focus on the recycling and reuse of produced water, as well as assessing other industrial water sources, to meet the industry’s water demand and align our operations with the goals of our customers. We have invested significantly in the development and acquisition of fixed and mobile recycling facilities that support the advancement of commercialized produced water reuse solutions. By doing so, we strive to reduce the amount of produced water being reinjected into SWDs and to reduce our usage of fresh water as well as that of our customers. By implementing our innovative approach to end-to-end water solutions, we have become a leader in recycling produced water to be reused for energy production.

Previous wording

Select is prioritizing investments in Water Infrastructure projects, which often bring a more predictable and steady revenue stream through long-term contracts and production-related operations. These investments typically produce higher gross margins and also foster stronger partnerships with customers, as Select becomes an integral partnerin ensuring well productivity for ongoing customer production over the life of a well. Our focus is on integrated solutions that enhance contracted infrastructure projects with logistics services and chemical solutions, and expanding the value we provide to our customers. Our approach has been to streamline operations and offer a more comprehensive

Current wording

We are prioritizing investments in Water Infrastructure projects, which often bring a more predictable and steady revenue stream through long-term contracts and production-related operations. These investments typically produce higher gross margins and also foster stronger partnerships with customers, as we become an integral partnerin ensuring well productivity for ongoing customer production over the life of a well. Our focus is on integrated solutions that enhance contracted infrastructure projects with logistics services and chemical solutions, and expanding the value we provide to our customers. Our approach has been to streamline operations and offer a more comprehensive and valuable overall package to customers that is built around optimizing the entire water lifecycle, as such integrated solutions drive revenue growth and enhance overall value to clients.

Previous wording

In August 2025, we announced that we had started an evaluation of strategic alternatives for Peak Rentals, our equipment rental and distributed power business within the Water Services segment. This evaluation includes a range of potential paths forward, including capital structure initiatives and other portfolio optimization opportunities. As of September 30, 2025, no transaction is pending or imminent, and we continue to own 100% of the business. We are continuing to evaluate strategic alternatives for Peak Rentals in the ordinary course; however, there can be no assurance that any particular outcome will ultimately be pursued or completed.

Current wording

In August 2025, we announced that we had started an evaluation of strategic alternatives for Peak Rentals business within our Water Services segment. Peak Rentals currently includes our accommodations and rentals platform as well as our well testing and flowback operations. This evaluation includes a range of potential paths forward, including capital structure initiatives and other portfolio optimization opportunities. As of March 31, 2026, no transaction is pending or imminent, and we continue to own 100% of the business. We are continuing to evaluate strategic alternatives for Peak Rentals in the ordinary course; however, there can be no assurance that any particular outcome will ultimately be pursued or completed.

Previous wording

Since 2021, OPEC+ countries have instituted production cuts (as well as voluntary production cuts), which currently cut output by approximately 4.2 million barrels/day in the aggregate, comprised of a core production cut of 3.65 million barrels/day and voluntary production cuts of approximately 0.55 million barrels/day, which are being gradually unwound. Most recently, in September 2025, OPEC+ announced the beginning of the unwinding of the core production cuts, with 0.14 million barrels/day expected to be unwound in October 2025, followed by an additional 0.14 million barrels/day in November 2025. OPEC+ may, at its discretion, continue to decrease, or increase, production, which will continue to impact crude oil and natural gas price volatility. The actions of OPEC+ countries with respect to oil production levels and announcements of potential changes in such levels, including agreement on and compliance with production targets, may result in volatility in the industry in which we and our customers operate. The average price of West Texas Intermediate (“WTI”) crude oil decreased in the Current Quarter versus the Prior Quarter due to a combination of factors, including heightened trade tensions, weakening global demand, rising domestic production, the threat of a global recession and increased production from OPEC+ countries and the unwinding of OPEC+ production

Current wording

Since 2021, OPEC+ countries have instituted production cuts (as well as voluntary production cuts), which currently cut output by approximately 3.0 million barrels/day in the aggregate. Most recently, in April 2026, OPEC+ announced a reduction in voluntary oil production cuts of approximately 0.2 million barrels per day. OPEC+ may, at its discretion, continue to decrease, or increase, production, which will continue to impact crude oil and natural gas price volatility. Further, on April 28, 2026, the United Arab Emirates, the third largest oil and gas producer within OPEC+, announced that it was leaving OPEC. The impact of the United Arab Emirates’ departure from OPEC+ on current OPEC+ production cuts and overall global production is not yet known, but such effects may be magnified if any additional countries leave OPEC+. The actions of OPEC+ countries with respect to oil production levels and announcements of potential changes in such levels, including agreement on and compliance with production targets, as well as each countries’ continued membership in OPEC+, may result in volatility in the industry in which we and our customers operate. However, despite this announced increase in production, the ongoing conflict in Iran, and related hostilities across Gulf countries and the Strait of Hormuz has resulted in a dramatic drop in OPEC+ production, with a decrease of approximately 7.3 million barrels per day month-to-month in March 2026, led by cuts⁠in Kuwait, Iraq, Saudi Arabia and the United Arab Emirates. The average price of West Texas Intermediate (“WTI”) crude oil increased in the Current Quarter versus the Prior Quarter due to a combination of factors, including the conflict in Iran and related hostilities across the Middle East, including the cessation or reduction of maritime traffic through the Strait of Hormuz, heightened trade tensions, global demand, and other various influences and impacts. During the Current Quarter, the average spot price of WTI crude oil was $72.74 versus an average price of $71.78 for the Prior Quarter. The average Henry Hub natural gas spot price during the Current Quarter was $4.71 versus an average of $4.14 for the Prior Quarter. Henry Hub natural gas price levels in the Current Quarter have increased relative to the Prior Quarter due to a variety of factors, including increased demand driven by power consumption, severe weather events, infrastructure disruptions, lower than expected inventories, and the ongoing liquified natural gas (“LNG”) export growth in the U.S., reduced LNG

Previous wording

Labor costs associated with our employees and contract labor comprise the largest portion of our costs of doing business. We incurred labor and labor-related costs of $115.8 million, $134.2 million, $369.6 million and $399.2 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively. The majority of our recurring labor costs are variable and dependent on the market environment and are incurred only while we are providing our operational services. We also incur costs to employ personnel to ensure safe operations, sell and supervise our services and perform maintenance on our assets, which is not as directly tied to our level of business activity. Additionally, we incur selling, general and administrative costs for compensation of our administrative personnel at our field sites and in our operational and corporate headquarters, as well as for third-party support, permitting, licensing and services.

Current wording

Labor costs associated with our employees and contract labor comprise the largest portion of our costs of doing business. We incurred labor and labor-related costs of $115.4 million and $129.4 million for the Current Quarter and Prior Quarter, respectively. The majority of our recurring labor costs are variable and dependent on the market environment and are incurred only while we are providing our operational services. We also incur costs to employ personnel to ensure safe operations, sell and supervise our services and perform maintenance on our assets, which is not as directly tied to our level of business activity. Additionally, we incur selling, general and administrative costs for compensation of our administrative personnel at our field sites and in our operational and corporate headquarters, as well as for third-party support, permitting, licensing and services.

Previous wording

We incur significant vehicle and equipment costs in connection with the services we provide, including depreciation, repairs and maintenance, rental and leasing costs. We incurred vehicle and equipment costs of $71.7 million, $80.0 million, $230.9 million and $238.5 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively.

Current wording

We incur significant vehicle and equipment costs in connection with the services we provide, including depreciation, repairs and maintenance, rental and leasing costs. We incurred vehicle and equipment costs of $81.0 million and $79.5 million for the Current Quarter and Prior Quarter, respectively.

Previous wording

We incur raw material costs in manufacturing our chemical products, as well as for water that we source for our customers. We incurred raw material costs of $60.4 million, $54.8 million, $184.4 million and $179.7 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively.

Current wording

We incur raw material costs in manufacturing our chemical products, as well as for water that we source for our customers. We incurred raw material costs of $66.5 million and $65.2 million for the Current Quarter and Prior Quarter, respectively.

Previous wording

We incur variable transportation costs associated with our service lines, predominantly fuel and freight. We incurred fuel and freight costs of $16.0 million, $19.7 million, $56.8 million and $64.7 million for the Current Quarter, Prior Quarter, Current Period and Prior Period, respectively. Changes to fuel prices impact our transportation costs, which affects the results of our operations.

Current wording

We incur variable transportation costs associated with our service lines, predominantly fuel and freight. We incurred fuel and freight costs of $20.1 million and $22.3 million for the Current Quarter and Prior Quarter, respectively. Changes to fuel prices impact our transportation costs, which affects the results of our operations.

Previous wording

gains on fixed assets related to business combinations, non-recurring compensation expense, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains), plus/(minus) losses/(earnings) on unconsolidated entities and plus tax receivable agreements expense. The adjustments to EBITDA are generally consistent with such adjustments described in our Sustainability-Linked Credit Facility. See “—Comparison of Non-GAAP Financial Measures—EBITDA and Adjusted EBITDA” for more information and a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Current wording

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income, plus interest expense, income taxes, and depreciation, amortization and accretion. We define Adjusted EBITDA as EBITDA plus any impairment and abandonment charges or asset write-offs pursuant to GAAP, plus non-cash losses on the sale of assets or subsidiaries less remeasurement gains on fixed assets related to business combinations, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains), plus/(minus) losses/(earnings) on unconsolidated entities and plus TRAs expense. The adjustments to EBITDA are generally consistent with such adjustments described in our Sustainability-Linked Credit Facility. See “—Comparison of Non-GAAP Financial Measures—EBITDA and Adjusted EBITDA” for more information and a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Previous wording

We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, plus proceeds received from sale of property and equipment. Our board of directors and executive management team use free cash flow to assess our liquidity and ability to repay maturing debt, fund operations and make additional investments. We believe free cash flow provides useful information to investors because it is an important indicator of our liquidity including our ability to reduce net debt, make strategic investments, pay dividends and distributions and repurchase common stock. Our measure of free cash flow may not be directly comparable to similar measures reported by other companies. Furthermore, free cash flow is not a substitute for, or more meaningful than, net cash provided by (used in) operating activities nor any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as free cash flow. Accordingly, free cash flow should not be considered a measure of the income generated by our business or discretionary cash available to it to invest in the growth of our business.

Current wording

We define FCF as net cash provided by (used in) operating activities less purchases of property and equipment, plus proceeds received from sale of property and equipment. Our board of directors and executive management team use FCF to assess our liquidity and ability to repay maturing debt, fund operations and make additional investments. We believe FCF provides useful information to investors because it is an important indicator of our liquidity including our ability to reduce net debt, make strategic investments, pay dividends and distributions and repurchase common stock. Our measure of FCF may not be directly comparable to similar measures reported by other companies. Furthermore, FCF is not a substitute for, or more meaningful than, net cash provided by (used in) operating activities nor any other measure prescribed by GAAP, and there are limitations to using non-GAAP measures such as FCF. Accordingly, FCF should not be considered a measure of the income generated by our business or discretionary cash available to it to invest in the growth of our business.

Previous wording

During the Current Period, we completed one business combination and nine asset acquisitions. Our historical financial statements for periods prior to the respective date each acquisition was completed do not include the results of operations of that acquisition. See “—Recent Developments” and “Note 3—Acquisitions” for a description of these transactions.

Current wording

Our historical financial statements for periods prior to the respective date each acquisition was completed do not include the results of operations of that acquisition. See “—Recent Developments” and “Note 3—Acquisitions” for a description of these transactions.

Previous wording

Our revenue decreased by $49.1 million, or 13.2%, to $322.2 million for the Current Quarter compared to $371.3 million for the Prior Quarter. This decrease was composed of a $67.1 million decrease in Water Services revenue and a $3.2 million decrease in Water Infrastructure revenue partially offset by a $21.2 million increase in Chemical Technologies revenue. For the Current Quarter, our Water Infrastructure, Water Services and Chemical Technologies constituted 24.5%, 51.7% and 23.8% of our total revenue, respectively, compared to 22.1%, 63.0% and 14.9%, respectively, for the Prior Quarter. The revenue changes by reportable segment are as follows:

Current wording

Our revenue decreased by $8.4 million, or 2.3%, to $366.0 million for the Current Quarter compared to $374.4 million for the Prior Quarter. This decrease was composed of a $34.4 million decrease in Water Services revenue partially offset by a $24.3 million increase in Water Infrastructure revenue and a $1.6 million increase in Chemical Technologies revenue. For the Current Quarter, our Water Infrastructure, Water Services and Chemical Technologies constituted 26.4%, 52.3% and 21.3% of our total revenue, respectively, compared to 19.3%, 60.3% and 20.4%, respectively, for the Prior Quarter. The revenue changes by reportable segment are as follows:

Previous wording

Chemical Technologies. Revenue increased by $21.2 million, or 38.4%, to $76.6 million for the Current Quarter compared to $55.3 million for the Prior Quarter. The increase in revenues was primarily driven by enhanced sales performance and new product developments.

Current wording

Chemical Technologies. Revenue increased by $1.6 million, or 2.2%, to $78.0 million for the Current Quarter compared to $76.3 million for the Prior Quarter. The increase in revenues was primarily driven by enhanced sales performance and new product developments.

Previous wording

Water Services. Costs of revenue decreased $49.2 million, or 26.5%, to $136.8 million for the Current Quarter compared to $186.0 million for the Prior Quarter. As a percentage of revenue, cost of revenue increased from 79.5% in the Prior Quarter to 82.0% in the Current Quarter. The increase was primarily impacted by lower revenue levels in the Water Transfer, Well Testing and Accommodation and Rentals business lines, as not all costs could be proportionally reduced. This increase was also impacted by a decline in water sourcing revenue, reflecting a transition from fresh water to produced water operations. This was partially offset by higher poly and containment margins stemming from the right-sizing of vehicle and equipment rentals, and higher Fluids Hauling margins, favorably impacted by the divestment of lower margin operations in connection with the Omni transaction.

Current wording

Water Services. Costs of revenue decreased $32.3 million, or 17.8%, to $149.5 million for the Current Quarter compared to $181.7 million for the Prior Quarter. As a percentage of revenue, cost of revenue decreased from 80.5% in the Prior Quarter to 78.2% in the Current Quarter. The favorable decrease was primarily driven by higher Fluids Hauling margins, reflecting the divestiture of lower-margin operations in connection with the Omni transaction. This was partially offset by lower Well Testing margins, as reduced activity levels limited our ability to proportionally reduce costs.

Previous wording

Chemical Technologies. Costs of revenue increased $12.9 million, or 26.6%, to $61.4 million for the Current Quarter compared to $48.5 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased from 87.6% to 80.1% attributable to a higher proportion of sales from higher margin products, coupled with reduced freight costs resulting from a shift from third-party providers to internal logistics execution.

Current wording

Chemical Technologies. Costs of revenue decreased $1.6 million, or 2.5%, to $63.1 million for the Current Quarter compared to $64.7 million for the Prior Quarter. Cost of revenue as a percentage of revenue decreased from 84.8% to 80.9% attributable to a higher proportion of sales from higher margin products, coupled with reduced freight costs resulting from a shift from third-party providers to internal logistics execution.

Previous wording

Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $4.7 million, or 12.0%, to $43.6 million for the Current Quarter compared to $38.9 million for the Prior Quarter primarily due to a higher fixed asset base resulting from recent acquisitions as well as increased capital expenditures made into new organic infrastructure projects.

Current wording

Depreciation, amortization and accretion. Depreciation, amortization and accretion expense increased $7.1 million, or 18.3%, to $45.7 million for the Current Quarter compared to $38.7 million for the Prior Quarter primarily due to increased capital expenditures made into new organic infrastructure projects as well as a higher fixed asset base resulting from recent acquisitions.

Previous wording

Gross profit was $43.6 million for the Current Quarter compared to $62.4 million for the Prior Quarter primarily driven by a $17.9 million decrease in gross profit from our Water Service segment, a $4.7 million decrease in gross profit from our Water Infrastructure segment and a $4.7 million increase in depreciation, amortization and accretion expense partially offset by an $8.3 million increase in gross profit from our Chemical Technologies segment. Gross margin as a percentage of revenue was 13.5% and 16.8% in the Current Quarter and Prior Quarter, respectively.

Current wording

Gross profit was $65.3 million for the Current Quarter compared to $55.8 million for the Prior Quarter primarily driven by a $15.5 million increase in gross profit from our Water Infrastructure segment and a $3.2 million increase in gross profit from our Chemical Technologies segment partially offset by a $2.2 million decrease in gross profit from our Water Services segment and a $7.1 million increase in depreciation, amortization and accretion expense. Gross margin as a percentage of revenue was 17.8% and 14.9% in the Current Quarter and Prior Quarter, respectively.

Previous wording

Selling, general and administrative expenses decreased $2.2 million, or 1.8%, to $118.0 million for the Current Period compared to $120.2 million for the Prior Period. The decrease was primarily driven by $4.6 million in lower transaction and rebranding costs, a $4.5 million decline in incentive and equity-based compensation and a $1.0 million reduction in legal and professional fees and other expenses, partially offset by $4.0 million in higher information technology costs, a $3.1 million increase in wages and associated taxes and benefits and contract labor and $0.8 million in higher severance expense.

Current wording

Selling, general and administrative expenses increased $3.1 million, or 8.3%, to $40.6 million for the Current Quarter compared to $37.4 million for the Prior Quarter, driven primarily by a $2.5 million increase in incentive and equity-based compensation, $1.1 million in higher legal and professional costs and $0.5 million in higher information technology costs partially offset by a decrease of $0.8 million in transaction costs and $0.2 million in other expenses.

Previous wording

During the Current Period, the Company recognized $4.9 million in impairments and abandonments, consisting of $3.1 million in the Water Infrastructure segment primarily associated with SWD abandonments and the termination of a disposal lease, $1.2 million in Other related to abandonment of back-office software development costs previously classified as Other long-term assets and $0.6 million in the Water Services segment related to the relocation of operations from a leased facility. Prior Period impairments and abandonments were less than $0.1 million.

Current wording

During the Current Quarter, we recognized $5.7 million in impairments and abandonments primarily due to the abandonment of a SWD well in the Haynesville region of our Water Infrastructure segment. During the Prior Quarter, we recognized $1.1 million in impairments and abandonments, consisting of $0.6 million in the Water Services segment related to the relocation of operations from a leased facility and $0.5 million in the Water Infrastructure segment associated with the termination of a disposal lease.

Previous wording

Net income decreased by $16.5 million, or 87.8%, to $2.3 million for the Current Quarter compared to $18.8 million for the Prior Quarter, driven primarily by lower gross profit, higher net interest expense, higher selling, general and administrative expenses and equity losses in the Current Quarter partially offset by lower income tax expense and the remeasurement gain on business combination in the Current Quarter.

Current wording

Net income decreased by $0.1 million, or 1.3%, to $9.4 million for the Current Quarter compared to $9.6 million for the Prior Quarter, driven primarily by higher gross profit offset by higher impairments and abandonments, higher selling, general and administrative expenses and higher net interest expense.

Previous wording

EBITDA was $53.6 million for the Current Quarter compared to $66.1 million for the Prior Quarter. The $12.5 million decrease in EBITDA was driven primarily by a $14.2 million decrease in gross profit, $5.3 million less in equity earnings in unconsolidated investments, a $4.4 million increase in selling, general and administrative expense and a $2.3 million increase in impairments and abandonments partially offset by the $14.9 million remeasurement gain on business combination with Omni. Adjusted EBITDA was $59.5 million for the Current Quarter compared to $72.8 million for the Prior Quarter.

Current wording

EBITDA was $64.6 million for the Current Quarter compared to $56.9 million for the Prior Quarter. The $7.7 million increase in EBITDA was driven primarily by a $16.6 million increase in gross profit, partially offset by a $4.6 million increase in impairments and abandonments, a $3.1 million increase in selling, general and administrative expense and a $1.0 million decrease in gains on asset sales. Adjusted EBITDA was $77.6 million for the Current Quarter compared to $64.0 million for the Prior Quarter.

Previous wording

Our primary sources of liquidity are cash on hand, borrowing capacity under the Sustainability-Linked Credit Facility, cash flows from operations and proceeds from the sale of excess property and equipment. Our primary uses of capital have been to fund current operations, maintain our asset base, implement technological advancements, make capital expenditures to support organic growth, fund acquisitions and equity investments, pay dividends and distributions, and when appropriate, repurchase shares of Class A common stock in the open market. Depending on available opportunities, market conditions and other factors, we may also issue debt and equity securities in the future, if needed.

Current wording

Our primary sources of liquidity are cash on hand, borrowing capacity under the Sustainability-Linked Credit Facility, cash flows from operations and proceeds from the sale of excess property and equipment and proceeds from underwritten public offerings of our Class A common stock. Our primary uses of capital have been to fund current operations, maintain our asset base, implement technological advancements, make capital expenditures to support organic growth, fund acquisitions and equity investments, pay dividends and distributions, make payments under the TRAs, and when appropriate, repurchase shares of Class A common stock in the open market. Depending on available opportunities, market conditions and other factors, we may also issue debt and equity securities in the future, if needed.

Previous wording

We prioritize sustained positive free cash flow and a strong balance sheet and evaluate potential acquisitions and investments in the context of those priorities, in addition to the economics of the opportunity. We believe this

Current wording

We prioritize sustained positive FCF and a strong balance sheet and evaluate potential acquisitions and investments in the context of those priorities, in addition to the economics of the opportunity. We believe this approach provides us with additional flexibility to evaluate larger investments as well as improved resilience in a sustained downturn versus many of our peers.

Previous wording

We intend to finance most of our capital expenditures, contractual obligations and working capital needs with cash on hand, cash generated from operations and borrowings under our Sustainability-Linked Credit Facility. For a discussion of the Sustainability-Linked Credit Facility, see “—Sustainability-Linked Credit Facility” below. Although we cannot provide any assurance, we believe that our current cash balance, operating cash flow and available borrowings under our Sustainability-Linked Credit Facility will be sufficient to fund our operations for at least the next twelve months.

Current wording

We intend to finance most of our capital expenditures, contractual obligations and working capital needs with cash on hand, cash generated from operations and borrowings under our Sustainability-Linked Credit Facility. For a discussion of the Sustainability-Linked Credit Facility, see “—Sustainability-Linked Credit Facility” below. Although we cannot provide any assurance, we believe that our current cash balance, operating cash flow and available borrowings under our Sustainability-Linked Credit Facility will be sufficient to fund our operations for at least the next twelve months. In addition, we may opportunistically seek to raise additional capital through securities offerings or other avenues, as appropriate, based on market circumstances and other factors.

Previous wording

During the fourth quarter of 2022, we initiated a quarterly dividend and distribution program of $0.05 per share and $0.05 per unit for holders of Class A and Class B shares, respectively. We paid quarterly dividends at the same rate through the third quarter of 2023, then the board of directors increased the quarterly dividend paid on November 17, 2023 to $0.06 per share and $0.06 per unit for holders of Class A and Class B shares, respectively. We paid quarterly dividends at the same rate through the third quarter of 2024, then the board of directors increased the quarterly dividend paid on November 15, 2024 to $0.07 per share and $0.07 per unit for holders of Class A and Class B shares, respectively. This resulted in a financing outflow of $25.3 million in the Current Period, and this quarterly dividend program is expected to continue. All future dividend payments are subject to quarterly review and approval by our board of directors.

Current wording

During the fourth quarter of 2022, we initiated a quarterly dividend and distribution program of $0.05 per share and $0.05 per unit for holders of Class A and Class B shares, respectively. We paid quarterly dividends at the same rate through the third quarter of 2023, then the board of directors increased the quarterly dividend paid on November 17, 2023 to $0.06 per share and $0.06 per unit for holders of Class A and Class B shares, respectively. We paid quarterly dividends at the same rate through the third quarter of 2024, then the board of directors increased the quarterly dividend paid on November 15, 2024 to $0.07 per share and $0.07 per unit for holders of Class A and Class B shares, respectively. This program resulted in a financing outflow of $8.8 million in the Current Quarter, and this quarterly dividend program is expected to continue. All future dividend payments are subject to quarterly review and approval by our board of directors.

Previous wording

As of September 30, 2025 cash and cash equivalents totaled $17.8 million, and we had approximately $157.7 million of available borrowing capacity under the Revolving Credit Facility under our Sustainability-Linked Credit Facility. As of September 30, 2025, we had $305.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $232.3 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million and outstanding letters of credit totaled $19.6 million. As of November 3, 2025, we had $315.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $229.2 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million, the outstanding letters of credit totaled $19.6 million, and the available borrowing capacity under the Sustainability-Linked Credit Facility was $144.6 million.

Current wording

As of March 31, 2026 cash and cash equivalents totaled $56.0 million, and we had approximately $251.7 million of available borrowing capacity under the Revolving Credit Facility under our Sustainability-Linked Credit Facility. As of March 31, 2026, we had $250.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $271.3 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million and outstanding letters of credit totaled $19.6 million. As of May 4, 2026, we had $250.0 million in outstanding indebtedness, the borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $271.3 million, the borrowing base for the Term Loan Facility under the Sustainability-Linked Credit Facility was $426.3 million, the outstanding letters of credit totaled $19.6 million, and the available borrowing capacity under the Sustainability-Linked Credit Facility was $251.7 million.

Previous wording

Analysis of Cash Flow Changes between the nine months ended September 30, 2025 and 2024

Current wording

Analysis of Cash Flow Changes between the three months ended March 31, 2026 and 2025

Previous wording

$19.9 million of net income combined with non-cash adjustments partially offset by a $2.0 million increase in converting working capital to cash.

Current wording

Operating Activities. Net cash provided by operating activities was $10.2 million for the Current Quarter, compared to $5.1 million net cash used by operating activities for the Prior Quarter. The $15.3 million increase is comprised primarily of an increase of $15.2 million of net income combined with non-cash adjustments and a $0.1 million increase in converting working capital to cash.

Previous wording

Investing Activities. Net cash used in investing activities was $333.7 million for the Current Period, compared to $264.2 million for the Prior Period. The $69.5 million increase in net cash used in investing activities was due primarily to a $105.0 million increase in purchases of property and equipment and a $72.1 million investment in unconsolidated entities during the Current Period partially offset by a $106.1 million decrease in spending for acquisitions net of cash received and $1.5 million higher proceeds received from sales of property and equipment.

Current wording

Investing Activities. Net cash used in investing activities was $77.5 million for the Current Quarter, compared to $132.5 million for the Prior Quarter The $55.0 million decrease in net cash used in investing activities was due primarily to the $72.1 million investment in unconsolidated entities in the Prior Quarter and a $13.8 million decrease in spending for acquisitions net of cash received partially offset by a $30.0 million increase in purchases of property and equipment and $0.9 million lower proceeds received from sales of property and equipment.

Previous wording

Financing Activities. Net cash provided by financing activities was $182.3 million for the Current Period, compared to $51.0 million for the Prior Period. The $131.3** million increase in net cash provided by financing activities was due primarily to a $140.0 **million increase in borrowings net of repayments and $2.9 million of cash received from noncontrolling interest holders in the Current Period partially offset by $7.9 million of debt issuance costs in the Current Period and a $3.7 million increase in dividends and distributions paid.

Current wording

Financing Activities. Net cash provided by financing activities was $105.2 million for the Current Quarter, compared to $145.5 million for the Prior Quarter. The $40.3** million decrease in net cash provided by financing activities was due primarily to a $235.0 **million decrease in borrowings net of repayments, a $2.9 million decrease in cash received from noncontrolling interest holders and a $1.3 million increase in repurchases of common stock partially offset by $191.7 million in proceeds received from a public offering of our Class A common stock and $7.4 million lower debt issuance costs.

Previous wording

On January 24, 2025 (the “Closing Date”), SES Holdings, LLC (“SES Holdings”), a subsidiary of the Company, Select Water Solutions, LLC, a subsidiary of SES Holdings (the “Select LLC”), Bank of America, N.A., as administrative agent, issuing lender and swingline lender (the “Administrative Agent”), and the other lenders party thereto, entered into that certain sustainability-linked senior secured credit facility (the “Sustainability-Linked Credit Facility”), which initially provides for $300.0 million in revolving commitments (the “Revolving Credit Facility”) and $250.0 million in term commitments (the “Term Loan Facility”), in each case, subject to a borrowing base. The Sustainability-Linked Credit Facility also has a sublimit of $50.0 million for letters of credit and a sublimit of $30.0 million for swingline loans. Subject to obtaining commitments from existing or new lenders, Select LLC has the option to increase the maximum amount under the sustainability-linked senior secured credit facility by (i) $150.0 million for additional revolving commitments and (ii) $50.0 million for additional term commitments, in each case, during the first four years following the Closing Date. As of the Closing Date, (i) there were no borrowings outstanding under the Revolving Credit Facility and approximately $20.0 million of letters of credit issued and outstanding thereunder and (ii) the Term Loan Facility was fully funded. Capitalized terms used but not defined herein have the meaning ascribed to them in the Sustainability-Linked Credit Facility.

Current wording

$250.0 million in term commitments (the “Term Loan Facility”), in each case, subject to a borrowing base. The Sustainability-Linked Credit Facility also has a sublimit of $50.0 million for letters of credit and a sublimit of $30.0 million for swingline loans. Subject to obtaining commitments from existing or new lenders, Select LLC has the option to increase the maximum amount under the sustainability-linked senior secured credit facility by (i) $150.0 million for additional revolving commitments and (ii) $50.0 million for additional term commitments, in each case, during the first four years following the Closing Date. As of the Closing Date, (i) there were no borrowings outstanding under the Revolving Credit Facility and approximately $20.0 million of letters of credit issued and outstanding thereunder and (ii) the Term Loan Facility was fully funded. Capitalized terms used but not defined herein have the meaning ascribed to them in the Sustainability-Linked Credit Facility.