Kodiak Gas Services, Inc.

Previous wording

Recently announced changes and proposed changes to the U.S. global trade policy, along with potential international retaliatory measures, have resulted in volatility in global markets and uncertainty around short- and long-term economic impacts in the United States, including concerns over potential tariff impacts for the cost of goods, inflation, recession and slowing growth. Although these recent events did not materially impact our first quarter results and we do not expect any material impact on our 2025 results, we are continuing to actively monitor and evaluate the potential impacts of these measures, including the imposition of tariffs, on our business and operations, as well as opportunities to mitigate their related impacts. We remain cautious, as there are risks that increased tariffs could, among other things, create new trade barriers that disrupt supply chains, raise costs, and weaken consumer confidence; however, it is not currently possible to predict the impact, if any, of any changes or proposed changes to the U.S. global trade policy, or any international retaliatory measures, on our financial condition, results of operations and cash flows.

Current wording

Proposed changes and the announcement related to the U.S. global trade policy, along with potential international retaliatory measures, have resulted in volatility in global markets and uncertainty around short- and long-term economic impacts in the United States, including concerns over potential tariff impacts for the cost of goods, inflation, recession and slowing economic growth. Although these developments did not materially impact our first or second quarter results, we are continuing to actively monitor and evaluate the potential impacts of these measures, including the imposition of tariffs, on our business and operations, as well as opportunities to mitigate their related impacts. We remain cautious, as there are risks that increased tariffs could, among other things, create new trade barriers that disrupt supply chains, raise costs, and weaken consumer confidence; however, it is not currently possible to predict the impact, if any, of any changes or proposed changes to the U.S. global trade policy, or any international retaliatory measures, on our financial condition, results of operations and cash flows.

Previous wording

We are also monitoring and evaluating the potential impact of various executive orders issued by the U.S. government, including the executive orders entitled “Reducing Anti-Competitive Regulatory Barriers” and “Zero-Based Regulatory Budgeting to Unleash American Energy,” on our business, including potential impacts to our financial condition, results of operations and cash flows.

Current wording

We are also monitoring and evaluating the potential impact of various executive orders issued by the U.S. government, including the executive orders entitled “Reducing Anti-Competitive Regulatory Barriers” and “Zero-Based Regulatory

Previous wording

The following table presents selected financial and operating information for the periods presented(in thousands):

Current wording

The following table presents selected financial and operating information for the periods presented:

Previous wording

Contract Services revenue increased $95.6 million, or 49.4%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This was primarily due to incremental revenues associated with the CSI Acquisition. The remainder of the increase in Contract Services is due to revenue-generating horsepower increases not attributable to the CSI acquisition and an increase of $2.3 million related to gas treating and cooling services.

Current wording

Contract Services revenue increased $17.3 million, or 6.3%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This was primarily due to a $16.3 million increase in Contract Services resulting from increases in price and revenue-generating horsepower as well as an increase of $1.0 million related to gas treating and cooling services.

Previous wording

Other Services expenses increased $17.5 million, or 99.2%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily due to costs associated with increased parts sales, increased freight and crane charges related to mobilization of units, increased maintenance and overhaul services, increased other field services, and increased station construction service expenses.

Current wording

Other Services expenses decreased $5.8 million, or 20.8%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This decrease was primarily due to costs associated with decreased station construction service expenses, decreased parts sales, decreased maintenance and overhaul services, and decreased freight and crane charges related to mobilization of units. These decreases were offset by increased field services.

Previous wording

Selling, general and administrative expenses increased $7.4 million, or 29.9%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was due to a $6.6 million increase in labor and benefits, a $4.1 million increase in equity compensation expense related to equity compensation plans, and a $1.6 million increase in software expense, mainly related to the termination of an agreement as part of the CSI Acquisition. These increases were partially offset by a $4.6 million decrease in professional fees, primarily related to transactions costs associated with the CSI Acquisition, and a $0.2 million decrease in other selling, general, and administrative expenses.

Current wording

Selling, general and administrative expenses decreased $24.8 million, or 41.4%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This decrease was due to a $10.8 million decrease in professional fees, primarily related to transaction costs associated with the CSI Acquisition in the prior year period, an $8.8 million decrease in labor and benefits, a $3.5 million decrease in the provision for credit losses, and a $3.1 million decrease in software expense, mainly related to the termination of an agreement as part of the CSI Acquisition. These decreases were partially offset by a $1.0 million increase in equity compensation expense related to equity compensation plans, and a $0.5 million increase in other selling, general, and administrative expenses.

Previous wording

Income tax expense increased by $0.6 million, or 6.6%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily due to an increase in pre-tax income of $1.5 million and inclusion of international operations acquired in connection with the CSI Acquisition for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Current wording

Income tax expense increased by $11.1 million, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. This increase was primarily due to an increase in pre-tax income of $44.4 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Previous wording

Contract Services expenses increased $27.4 million, or 41.5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This was primarily due to a $27.9 million increase in direct labor expenses, a $3.5 million increase in parts used in support of our operations, a $3.1 million increase in lubricant oil and coolant, and a $0.7 million increase in gas treating expenses, much of which was attributable to the CSI Acquisition. These increases were partially offset by a $6.8 million decrease in indirect expenses, mainly relating to vehicle and facility expenses.

Current wording

Contract Services expenses increased $21.2 million (12.8%) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This was primarily due to a $23.6 million increase in direct labor expenses, a $3.7 million increase in parts used in support of our operations, a $2.5 million increase in lubricant oil and coolant expenses, and a $0.3 million increase in gas treating expenses. These increases were offset by a $5.5 million decrease in indirect expenses, and a $3.4 million decrease related to sales and use tax accrual amounts related to parts purchases as part of ongoing sales and use tax audits with the State of Texas.

Previous wording

Other Services revenue increased $18.6 million, or 84.2%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily due to incremental revenues associated with the CSI Acquisition, increased parts sales, increased freight and crane charges related to mobilization of units, increased maintenance and overhaul services, increased other field services, and increased revenues from station construction services.

Current wording

Other Services expense increased $11.7 million (25.7%) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily due to increased other field service expenses, increased parts sales, increased freight and crane charges related to mobilization of units. This was partially offset by decreased expenses from station construction services.

Previous wording

Interest expense, net increased $7.5 million, or 18.8%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This increase was primarily due to increased interest expense associated with higher outstanding borrowings on the ABL Facility in the current quarter as compared to the comparable quarter in the prior year as well as incremental interest expense attributed to a full quarter of borrowings on the 2029 Senior Notes, which were issued in February 2024. This increase in interest expense was partially offset by settlements received from interest rate swaps, which are recognized in the same financial statement line item as the underlying hedged debt, thereby reducing the net impact on reported interest expense.

Current wording

Interest expense, net increased $1.1 million (1.2%) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily due to higher interest rates on the ABL Facility in the current year to date period as compared to the comparable year to date period. This increase in interest expense was partially offset by settlements received from interest rate swaps, which are recognized in the same financial statement line item as the underlying hedged debt, thereby reducing the net impact on reported interest expense.

Previous wording

Gain on derivatives decreased $19.8 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. This decrease was attributed to the designation of the interest rate swap as a cash flow hedge as of January 1, 2025. As a result, all changes in the fair value of the interest rate swap are now recognized in accumulated other comprehensive income (loss) and reclassified into earnings in the same period the hedged transaction affects earnings within interest expense. The net gain on derivatives recognized during the three months ended March 31, 2024 related to a $14.3 million increase in the fair value of derivatives and an increase in cash received on derivatives of $5.5 million due to the increase in the long-term Secured Overnight Financing Rate (“SOFR”) yield curve.

Current wording

Gain on derivatives decreased $26.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was attributed to the designation of the interest rate swap as a cash flow hedge as of January 1, 2025. As a result, all changes in the fair value of the interest rate swap are now recognized in accumulated other comprehensive income (loss) and reclassified into earnings in the same period the hedged transaction affects earnings within interest expense. The net gain on derivatives recognized during the six months ended June 30, 2024 related to a $14.3 million increase in the fair value of derivatives and an increase in cash received on derivatives of $12.3 million due to the increase in the long-term SOFR yield curve.

Previous wording

Our ability to fund operations, finance capital expenditures, service our debt and pay dividends depends on our operating cash flows and access to the capital and credit markets. Our primary sources of liquidity are cash flows generated from our operations and our borrowing availability under the ABL Facility. Our cash flow is affected by numerous factors, including prices and demand for our compression infrastructure assets and services, conditions in the financial markets and various other factors. We believe cash generated by operating activities will be sufficient to service our debt, fund working capital, fund our estimated capital expenditures in the short-term and long-term and, as our Board may determine from time to time in its discretion, pay dividends. At March 31, 2025, we had approximately $321.2 million of liquidity consisting of $2.0 million in cash and cash equivalents and $319.3 million available under the ABL Facility.

Current wording

Our ability to fund operations, finance capital expenditures, service our debt and pay dividends depends on our operating cash flows and access to the capital and credit markets. Our primary sources of liquidity are cash flows generated from our operations and our borrowing availability under the ABL Facility. Our cash flow is affected by numerous factors, including prices and demand for our compression infrastructure assets and services, conditions in the financial markets and various other factors. We believe cash generated by operating activities will be sufficient to service our debt, fund working capital, fund our estimated capital expenditures in the short-term and long-term and, as our Board may determine from time to time in its discretion, pay dividends as discussed below. As of June 30, 2025, we had approximately $371.8 million of liquidity consisting of $5.4 million in cash and cash equivalents and $366.4 million available under the ABL Facility.

Previous wording

For the three months ended March 31, 2025, growth capital expenditures were $56.0 million, other capital expenditures were $22.3 million, and maintenance capital expenditures were $16.4 million. This compares to growth capital expenditures of $52.2 million, other capital expenditures of $7.2 million, and maintenance capital expenditures of $10.6 million for the three months ended March 31, 2024. The increase in growth capital expenditures was primarily related to the timing of compression unit purchases necessary to support operating capacity demand. The increase in other capital expenditures was primarily related to safety upgrades related to compression purchased in the CSI Acquisition and the ongoing implementation of new business system. The increase in maintenance capital expenditures was primarily due to maintenance capital expenditures on the assets acquired in the CSI Acquisition and an increase in unit overhauls scheduled based on the age and operating hours of such units.

Current wording

For the six months ended June 30, 2025, growth capital expenditures were $93.9 million, other capital expenditures were $38.7 million, and maintenance capital expenditures were $34.0 million as compared to growth capital expenditures of $129.5 million, other capital expenditures of $20.3 million, and maintenance capital expenditures of $29.8 million for the six months ended June 30, 2024. The decrease in growth capital expenditures was primarily related to the timing of compression unit purchases necessary to support operating capacity demand. The increase in other capital expenditures was primarily related to safety upgrades related to compression equipment purchased in the CSI Acquisition and the ongoing implementation of a new business system. The increase in maintenance capital expenditures was primarily due to maintenance capital expenditures on the assets acquired in the CSI Acquisition and an increase in unit overhauls scheduled based on the age and operating hours of such units.

Previous wording

Our Board of Directors (“Board”) may elect to declare cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements and restrictions in the agreements governing our indebtedness (as further discussed herein).

Current wording

Our Board may elect to declare cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, future business conditions, economic conditions, our financial condition, results of operations, projections, liquidity, earnings, legal requirements and restrictions in the agreements governing our indebtedness as discussed in this Report.

Previous wording

On April 23, 2025, our Board declared a cash dividend of $0.45 per share for the quarterly period ended March 31, 2025, which is payable on May 15, 2025, to shareholders of record as of the close of business on May 5, 2025 (the “Common Stock Dividend”) and, in conjunction with the Common Stock Dividend, Kodiak Services declared a distribution on its units of $0.45 per unit payable on May 15, 2025 to all unitholders of record of Kodiak Services as of the close of business on May 5, 2025. The declaration and payment of future dividends will be at the discretion of the Board and will depend on future business conditions, financial conditions, results of operations and other factors.

Current wording

Subsequent to the quarter end, on July 24, 2025, the Company’s Board declared a cash dividend of $0.45 per share for the quarter ended June 30, 2025, which is payable on August 14, 2025, to shareholders of record as of the close of business on August 4, 2025. In conjunction with the Common Stock Dividend, Kodiak Services declared a distribution on its units of $0.45 per unit payable on August 14, 2025 to all unitholders of record of Kodiak Services as of the close of business on August 4, 2025. The declaration and payment of future dividends will be at the discretion of the Board and will depend on the factors discussed above.

Previous wording

Over the long-term, we expect to fund any dividends and our budgeted growth capital expenditures using our Discretionary Cash Flow. In the event our Discretionary Cash Flow is insufficient for the purpose of funding any such dividends and our budgeted growth capital expenditures for such period, we may fund such shortfall (i) with additional borrowings under our ABL Facility, which, as of March 31, 2025, had $319.3 million available (subject to the requirement that our availability, in the case of dividends, under the ABL Facility (calculated on a pro forma basis after giving effect to such Specified Transaction) is not less than $125,000,000) or (ii) reduce our growth capital expenditures for such period. Any such additional borrowings under our ABL Facility will result in an increase in our interest expense for such period. Any such reduction in our growth capital expenditures may result in lower growth in our revenue-generating horsepower in future periods.

Current wording

Over the long-term, we expect to fund any dividends and our budgeted growth capital expenditures using our Discretionary Cash Flow. In the event our Discretionary Cash Flow is insufficient to fund any such dividends and our budgeted growth capital expenditures for such period, we may fund our dividend or budgeted growth expenditures (i) with additional borrowings under our ABL Facility (subject to the requirement that our availability, in the case of dividends, under the ABL Facility calculated on a pro forma basis after giving effect to the payment of a dividend, is not less than $125,000,000) or (ii) by reducing our growth capital expenditures. Any additional borrowings under our ABL Facility may result in an increase in our interest expense and any such reduction in our growth capital expenditures may result in lower growth in our revenue-generating horsepower in future periods. As of June 30, 2025, we had $366.4 million available under our ABL Facility.

Previous wording

•Long-term debt of $2.6 billion, of which $1.9 billion is due in 2028 and $750.0 million is due in 2029.

Current wording

•Long-term debt of $2.6 billion, of which $1.8 billion matures in 2028 and $750.0 million matures in 2029.

Previous wording

•Purchase commitments of $127.4 million, of which all is expected to be settled within the next twelve months; primarily consisting of future commitments to purchase new compression units that have been ordered but not yet received. See Note 13. Commitments and Contingencies to the condensed consolidated financial statements included elsewhere in this Report.

Current wording

•Purchase commitments of $131.1 million, of which all is expected to be settled within the next twelve months; primarily consisting of future commitments to purchase new compression units that have been ordered but not yet received. See Note 13. Commitments and Contingencies to the condensed consolidated financial statements included in this Report.

Previous wording

As of March 31, 2025, other commitments include future operating and finance lease payments totaling $84.8 million.

Current wording

As of June 30, 2025, other commitments include future operating and finance lease payments totaling $80.5 million.

Previous wording

The following table summarizes our cash flows (in thousands):

Current wording

The following table summarizes our cash flows:

Previous wording

The $62.8 million increase in net cash provided by operating activities for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a $29.0 million increase in income from operations and a $38.0 million increase in non-cash operating expenses, namely depreciation and amortization, taxes and equity compensation. Additionally, cash provided by operating activities was impacted by a $7.0 million increase in interest expense, net of debt issuance cost amortization. Changes in working capital items used cash of $18.7 million during the three months ended March 31, 2025 compared to $24.6 million during the three months ended March 31, 2024.

Current wording

The $118.9 million increase in net cash provided by operating activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to a $74.6 million increase in income from operations and a $40.2 million increase in non-cash operating expenses, namely depreciation and amortization, taxes and equity compensation. Additionally, cash provided by operating activities was impacted by a $0.2 million decrease in interest expense, net of debt issuance cost amortization. Changes in working capital items used cash of $19.8 million during the six months ended June 30, 2025 compared to $7.8 million during the six months ended June 30, 2024. The change in working capital items primarily related to enhancements in customer collection processes and timing of supplier payments.

Previous wording

The $8.0 million increase in net cash used in investing activities for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to a $17.4 million increase in cash used for capital expenditures, net of accrued capital expenditures, partially offset by a $9.4 million increase in cash provided by proceeds on sale of assets.

Current wording

The $24.8 million decrease in net cash used in investing activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to a $17.0 million decrease in cash used for capital expenditures, net of accrued capital expenditures and a $17.2 million increase in cash provided by proceeds on sale of assets. This was partially offset by $9.5 million in cash acquired in connection with the CSI Acquisition.

Previous wording

Net cash provided by financing activities decreased $61.3 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Cash used for financing activities of $49.0 million in three months ended March 31, 2025 was primarily the result of $36.4 million of dividends paid to stockholders, $10.0 million of share repurchases, $2.8 million of cash paid for shares withheld to cover taxes, $2.0 million of cash paid on principal payments of other borrowings, $0.7 million of cash paid on principal payments of finance leases, and $0.4 million of distributions to noncontrolling interest. This was partially offset by net cash provided by borrowings of $3.3 million.

Current wording

Net cash used for financing activities increased $141.3 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Cash used for financing activities of $148.3 million in six months ended June 30, 2025 was primarily the result of $76.6 million of dividends paid to stockholders, net borrowings of $43.2 million, $20.0 million of share repurchases, $3.3 million of cash paid for shares withheld to cover taxes, $3.5 million of cash paid on principal payments of other borrowings, $1.5 million of cash paid on principal payments of finance leases, and $0.7 million of distributions to noncontrolling interest.

Previous wording

Cash provided by financing activities of $12.4 million during the three months ended March 31, 2024 was primarily the result of $50.5 million of net cash provided by borrowings. This was offset by $29.8 million of dividends paid to stockholders, $7.6 million of payments of debt issuance costs, $0.4 million of offering costs, and $0.3 million of cash paid for shares withheld to cover taxes.

Current wording

Cash used for financing activities of $7.0 million during the six months ended June 30, 2024 was primarily the result of $62.4 million of dividends paid to stockholders, $16.3 million of payments of debt issuance costs, $2.5 million of distributions to noncontrolling interest, $1.8 million of cash paid on principal payments of other borrowings, $1.2 million of offering costs, $0.4 million of cash paid on principal payments of finance leases, and $0.3 million of cash paid for shares withheld to cover taxes. This was offset by $77.9 million of net cash provided by borrowings.

Previous wording

On March 22, 2023, Kodiak and Kodiak Services entered into the Fourth Amended and Restated Credit Agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (as amended or restated from time to time, the “ABL Credit Agreement” or “ABL Facility”), which mainly served to extend the maturity date from June 2024 to March 2028. On January 22, 2024, Kodiak entered into the Third Amendment to the ABL Credit Agreement (the “Third Amendment”). The Third Amendment, among other things, amended certain provisions of the ABL Facility (i) to accommodate the consummation of the transactions contemplated by the Merger Agreement (see Note 3. Acquisitions and Divestitures) and (ii) to account for the Company’s organizational structure after giving effect to the transactions contemplated by the Merger Agreement. The total commitments under the facility are $2.2 billion. As of March 31, 2025, there were $2.4 million in letters of credit outstanding under the ABL Facility. Fees and costs totaling $2.9 million were incurred related to the Third Amendment and will be amortized over the life of the loan to interest expense. See Note 9.

Current wording

On March 22, 2023, Kodiak and Kodiak Services entered into the Fourth Amended and Restated Credit Agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (as amended or restated from time to time, the “ABL Credit Agreement” or “ABL Facility”), which mainly served to extend the maturity date from June 2024 to March 2028. On January 22, 2024, Kodiak entered into the Third Amendment to the ABL Credit Agreement (the “Third Amendment”). The Third Amendment, among other things, amended certain provisions of the ABL Facility (i) to accommodate the consummation of the transactions contemplated by the Merger Agreement (see Note 3. Acquisitions and Divestitures) and (ii) to account for the Company’s organizational structure after giving effect to the transactions contemplated by the Merger Agreement. The total commitments under the facility are $2.2 billion. As of June 30, 2025, there were $1.6 million in letters of credit outstanding under the ABL Facility. Fees and costs totaling $2.9 million were incurred related to the Third Amendment and will be amortized over the life of the loan to interest expense. See Note 9. Debt and Credit Facilities to the condensed consolidated financial statements included in this Report for further description.

Previous wording

The ABL Facility is a “revolving credit facility” that includes a lockbox arrangement whereby, under certain events, remittances from customers are forwarded to a bank account controlled by the administrative agent and are applied to reduce borrowings under the facility. One such event occurs if availability under the ABL Credit Agreement falls below a specified threshold (i.e., the greater of $200 million or 10% of the aggregate commitments at the time of measurement). As of March 31, 2025, and December 31, 2024, availability under the ABL Facility was in excess of the specified threshold, and, as such, the entire balance was classified as long term in accordance with its maturity.

Current wording

The ABL Facility is a “revolving credit facility” that includes a lockbox arrangement whereby, under certain events, remittances from customers are forwarded to a bank account controlled by the administrative agent and are applied to reduce borrowings under the facility. One such event occurs if availability under the ABL Credit Agreement falls below a specified threshold (i.e., the greater of $200 million or 10% of the aggregate commitments at the time of measurement). As of June 30, 2025, and December 31, 2024, availability under the ABL Facility was in excess of the specified threshold, and, as such, the entire balance was classified as long term debt in accordance with its maturity.

Previous wording

The weighted average interest rate as of March 31, 2025, and December 31, 2024, was 6.78% and 6.80%, respectively, excluding the effect of our interest rate swap. The Company pays an annualized commitment fee of 0.25% on the unused portion of its ABL Facility if borrowings are greater than 50% of total commitments and 0.50% on the unused portion of the ABL Facility if borrowings are less than 50% of total commitments.

Current wording

As of June 30, 2025, we had $366.4 million available under our ABL Facility. The weighted average interest rate as of June 30, 2025, and December 31, 2024, was 6.51% and 6.80%, respectively, excluding the effect of our interest rate swap. The Company pays an annualized commitment fee of 0.25% on the unused portion of its ABL Facility if borrowings are greater than 50% of total commitments and 0.50% on the unused portion of the ABL Facility if borrowings are less than 50% of total commitments.

Previous wording

The proceeds from the 2029 Senior Notes were used to repay a portion of the outstanding indebtedness under the ABL Facility and to pay related fees and expenses in connection with the notes offering. In connection with the close of the CSI Acquisition on April 1, 2024, the Company used proceeds from additional draws on the ABL Facility to repay $651.8 million of existing outstanding indebtedness, except for certain equipment financing obligations, and pay fees and expenses related to the notes offering and the CSI Acquisition.

Current wording

On February 2, 2024, Kodiak Services issued $750.0 million aggregate principal amount of 2029 Senior Notes. The proceeds from the 2029 Senior Notes were used to repay a portion of then outstanding borrowings under the ABL Facility and to pay related fees and expenses in connection with the issuance. In connection with the closing of the CSI Acquisition on April 1, 2024, the Company used proceeds from additional draws on the ABL Facility to repay $651.8 million of existing outstanding indebtedness, except for certain equipment financing obligations, and pay fees and expenses related to the notes offering and the CSI Acquisition.

Previous wording

To mitigate a portion of the exposure to fluctuations in the variable interest rate of the ABL Facility, we have entered into an interest rate swap.

Current wording

To mitigate a portion of the exposure to fluctuations in the variable interest rate of the ABL Facility, we have entered into the interest rate swap discussed above.

Previous wording

Our interest rate swap exchanges variable interest rates for fixed interest rates. During the first quarter of 2025, the Company designated the interest rate swap as a cash flow hedge, evaluated hedge effectiveness and determined it to be highly effective. See Note 10. Derivative Instruments to the condensed consolidated financial statements included elsewhere in this Report.

Current wording

Our interest rate swap exchanges variable interest rates for fixed interest rates. During the first quarter of 2025, the Company designated the interest rate swap as a cash flow hedge, evaluated hedge effectiveness and determined it to be highly effective. See Note 10. Derivative Instruments to the condensed consolidated financial statements included in this Report.

Previous wording

The following table reconciles adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for each of the periods presented(in thousands):

Current wording

The following table reconciles adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for each of the periods presented:

Previous wording

Discretionary cash flow is considered a non-GAAP measure. We define discretionary cash flow as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; and (iii) certain other expenses; plus (w) cash loss on extinguishment of debt; (x) severance expenses; and (y) transaction expenses. We believe discretionary cash flow is a useful liquidity and performance measure and supplemental financial measure for us in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. Our ability to pay dividends is subject to limitations due to restrictions contained in our ABL Credit Agreement, as further described elsewhere herein. Discretionary cash flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP, such as revenues, net income (loss), operating income (loss) or cash flows from operating activities. Discretionary cash flow as presented may not be comparable to similarly titled measures of other companies.

Current wording

Discretionary cash flow is considered a non-GAAP measure. We define discretionary cash flow as net cash provided by operating activities less (i) maintenance capital expenditures; (ii) certain changes in operating assets and liabilities; and (iii) certain other expenses; plus (w) cash loss on extinguishment of debt; (x) severance expenses; and (y) transaction expenses. We believe discretionary cash flow is a useful liquidity and performance measure and supplemental financial measure for us in assessing our ability to pay cash dividends to our stockholders, make growth capital expenditures and assess our operating performance. Our ability to pay dividends is subject to limitations due to restrictions contained in our ABL Credit Agreement, as further described in this Report. Discretionary cash flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP, such as revenues, net income (loss), operating income (loss) or cash flows from operating activities. Discretionary cash flow as presented may not be comparable to similarly titled measures of other companies.

Previous wording

The following table reconciles net cash provided by operating activities, to discretionary cash flow and free cash flow, for each of the periods presented(in thousands):

Current wording

The following table reconciles net cash provided by operating activities, to discretionary cash flow and free cash flow, for each of the periods presented: