Cover Page
Cover Page | 9 Months Ended |
Sep. 30, 2023 | |
Document Information [Line Items] | |
Document Type | S-4 |
Entity Registrant Name | Kodiak Gas Services, Inc. |
Entity Incorporation, State or Country Code | DE |
Entity Address, Address Line One | 15320 Highway 105 W |
Entity Address, Address Line Two | Suite 210 |
Entity Address, City or Town | Montgomery |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 77356 |
City Area Code | 936 |
Local Phone Number | 539-3300 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001767042 |
Amendment Flag | false |
Entity Primary SIC Number | 4922 |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | 15320 Highway 105 W |
Entity Address, Address Line Two | Suite 210 |
Entity Address, City or Town | Montgomery |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 77356 |
City Area Code | 936 |
Local Phone Number | 539-3300 |
Contact Personnel Name | Robert M. McKee |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | |||
Cash and cash equivalents | $ 6,128 | $ 20,431 | $ 28,795 |
Accounts receivable, net | 116,875 | 97,551 | 80,749 |
Inventories, net | 70,606 | 72,155 | 48,353 |
Fair value of derivative instruments | 0 | 823 | 0 |
Contract assets | 9,608 | 3,555 | 0 |
Prepaid expenses and other current assets | 13,253 | 9,520 | 6,251 |
Total current assets | 216,470 | 204,035 | 164,148 |
Property, plant and equipment, net | 2,511,110 | 2,488,682 | 2,399,614 |
Operating lease right-of-use assets, net | 33,453 | 9,827 | 0 |
Goodwill | 305,553 | 305,553 | 305,553 |
Identifiable intangible assets, net | 125,257 | 132,362 | 141,835 |
Fair value of derivative instruments | 51,790 | 64,517 | 0 |
Other assets | 607 | 564 | 449 |
Total assets | 3,244,240 | 3,205,540 | 3,011,599 |
Current liabilities: | |||
Accounts payable | 48,835 | 37,992 | 37,593 |
Accrued liabilities | 102,448 | 93,873 | 54,866 |
Contract liabilities | 71,917 | 57,109 | 51,204 |
Fair value of derivative instruments | 0 | 398 | |
Total current liabilities | 223,200 | 188,974 | 144,061 |
Long-term debt, net of unamortized debt issuance cost | 1,747,912 | 2,720,019 | 1,845,122 |
Operating lease liabilities | 34,026 | 6,754 | 0 |
Fair value of derivative instruments | 0 | 21,625 | |
Deferred tax liabilities | 65,258 | 57,155 | 29,639 |
Other liabilities | 2,052 | 3,545 | 11,081 |
Total liabilities | 2,072,448 | 2,976,447 | 2,051,528 |
Commitments and contingencies (Note 13) | |||
Stockholders' Equity: | |||
Common stock, par value $0.01 per share; 750,000,000 shares of common stock authorized, 77,400,000 and 59,000,000 shares of common stock issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 774 | 590 | 1 |
Additional paid-in capital | 956,465 | 33,189 | 871,992 |
Retained earnings | 214,553 | 195,314 | 88,078 |
Total stockholders' equity | 1,171,792 | 229,093 | 960,071 |
Total liabilities and stockholders' equity | $ 3,244,240 | $ 3,205,540 | $ 3,011,599 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Jun. 20, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | 1,000 |
Common stock, shares issued (in shares) | 77,400,000 | 59,000,000 | 100 | |
Common stock, shares outstanding (in shares) | 77,400,000 | 59,000,000 | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues: | ||||||
Total revenues | $ 230,983 | $ 182,645 | $ 624,401 | $ 528,137 | $ 707,913 | $ 606,375 |
Cost of operations (exclusive of depreciation and amortization shown below): | ||||||
Depreciation and amortization | 46,087 | 44,111 | 136,414 | 129,913 | 174,463 | 160,045 |
Selling, general and administrative expenses | 19,648 | 11,190 | 46,171 | 32,760 | 44,882 | 37,665 |
Long-lived asset impairment | 0 | 0 | 0 | 0 | 0 | 9,107 |
Gain on sale of capital assets | 0 | (818) | (721) | (825) | (874) | 426 |
Total operating expenses | 170,025 | 124,392 | 441,028 | 363,631 | 485,822 | 417,420 |
Income from operations | 60,958 | 58,253 | 183,373 | 164,506 | 222,091 | 188,955 |
Other income (expenses): | ||||||
Interest expense, net | (39,710) | (49,859) | (182,030) | (104,616) | (165,867) | (84,640) |
Loss on extinguishment of debt | (6,757) | 0 | (6,757) | 0 | ||
Gain on derivatives | 15,141 | 51,862 | 42,080 | 76,972 | 83,116 | 18,174 |
Other income (expense) | 38 | (19) | 39 | (10) | 17 | (99) |
Total other income (expenses) | (31,288) | 1,984 | (146,668) | (27,654) | (82,734) | (66,565) |
Income before income taxes | 29,670 | 60,237 | 36,705 | 136,852 | 139,357 | 122,390 |
Income tax expense | 7,904 | 14,337 | 9,765 | 32,496 | 33,092 | (58,573) |
Net income | $ 21,766 | $ 45,900 | $ 26,940 | $ 104,356 | $ 106,265 | $ 180,963 |
Basic and diluted earnings per share | ||||||
Basic net earnings per share (in dollars per share) | $ 0.28 | $ 0.78 | $ 0.41 | $ 1.77 | $ 1,062,650 | $ 1,809,630 |
Diluted net earnings per share (in dollars per share) | $ 0.28 | $ 0.78 | $ 0.41 | $ 1.77 | $ 1,062,650 | $ 1,809,630 |
Basic weighted average shares of common stock outstanding (in shares) | 76,731,868 | 59,000,000 | 64,954,244 | 59,000,000 | 100 | 100 |
Diluted weighted average common shares of common stock outstanding (in shares) | 76,899,483 | 59,000,000 | 65,121,859 | 59,000,000 | 100 | 100 |
Other Services | ||||||
Revenues: | ||||||
Total revenues | $ 44,310 | $ 18,983 | $ 78,412 | $ 44,172 | $ 52,956 | $ 23,305 |
Cost of operations (exclusive of depreciation and amortization shown below): | ||||||
Cost of operations | 38,820 | 14,037 | 65,907 | 34,638 | 41,636 | 17,364 |
Compression Operations | ||||||
Revenues: | ||||||
Total revenues | 186,673 | 163,662 | 545,989 | 483,965 | 654,957 | 583,070 |
Cost of operations (exclusive of depreciation and amortization shown below): | ||||||
Cost of operations | $ 65,470 | $ 55,872 | $ 193,257 | $ 167,145 | $ 225,715 | $ 192,813 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings |
Beginning balance, shares (in shares) at Dec. 31, 2020 | 100 | |||
Beginning balance at Dec. 31, 2020 | $ 755,286 | $ 1 | $ 848,262 | $ (92,977) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Contribution from parent | 24,000 | 24,000 | ||
Equity compensation - profits interests | 954 | (270) | 1,224 | |
Distribution to parent | (1,132) | (1,132) | ||
Net income (loss) | 180,963 | 180,963 | ||
Ending balance, shares (in shares) at Dec. 31, 2021 | 59,000,000 | |||
Ending balance at Dec. 31, 2021 | 960,071 | $ 590 | 871,403 | 88,078 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity compensation - profits interests | 483 | (136) | 619 | |
Net income (loss) | 49,555 | 49,555 | ||
Ending balance, shares (in shares) at Mar. 31, 2022 | 59,000,000 | |||
Ending balance at Mar. 31, 2022 | 1,010,109 | $ 590 | 871,267 | 138,252 |
Beginning balance, shares (in shares) at Dec. 31, 2021 | 59,000,000 | |||
Beginning balance at Dec. 31, 2021 | 960,071 | $ 590 | 871,403 | 88,078 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 104,356 | |||
Ending balance, shares (in shares) at Sep. 30, 2022 | 59,000,000 | |||
Ending balance at Sep. 30, 2022 | 226,910 | $ 590 | 33,267 | 193,053 |
Beginning balance, shares (in shares) at Dec. 31, 2021 | 59,000,000 | |||
Beginning balance at Dec. 31, 2021 | 960,071 | $ 590 | 871,403 | 88,078 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Contribution from parent | 0 | |||
Equity compensation - profits interests | 757 | (214) | 971 | |
Distribution to parent | (838,000) | (838,000) | ||
Net income (loss) | 106,265 | 106,265 | ||
Ending balance, shares (in shares) at Dec. 31, 2022 | 59,000,000 | |||
Ending balance at Dec. 31, 2022 | 229,093 | $ 590 | 33,189 | 195,314 |
Beginning balance, shares (in shares) at Mar. 31, 2022 | 59,000,000 | |||
Beginning balance at Mar. 31, 2022 | 1,010,109 | $ 590 | 871,267 | 138,252 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Distribution to parent | (838,000) | (838,000) | ||
Net income (loss) | 8,901 | 8,901 | ||
Ending balance, shares (in shares) at Jun. 30, 2022 | 59,000,000 | |||
Ending balance at Jun. 30, 2022 | 181,010 | $ 590 | 33,267 | 147,153 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 45,900 | 45,900 | ||
Ending balance, shares (in shares) at Sep. 30, 2022 | 59,000,000 | |||
Ending balance at Sep. 30, 2022 | 226,910 | $ 590 | 33,267 | 193,053 |
Beginning balance, shares (in shares) at Dec. 31, 2022 | 59,000,000 | |||
Beginning balance at Dec. 31, 2022 | 229,093 | $ 590 | 33,189 | 195,314 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity compensation - profits interests | 686 | (193) | 879 | |
Net income (loss) | (12,343) | (12,343) | ||
Ending balance, shares (in shares) at Mar. 31, 2023 | 59,000,000 | |||
Ending balance at Mar. 31, 2023 | 217,436 | $ 590 | 32,996 | 183,850 |
Beginning balance, shares (in shares) at Dec. 31, 2022 | 59,000,000 | |||
Beginning balance at Dec. 31, 2022 | 229,093 | $ 590 | 33,189 | 195,314 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 26,940 | |||
Ending balance, shares (in shares) at Sep. 30, 2023 | 77,400,000 | |||
Ending balance at Sep. 30, 2023 | 1,171,792 | $ 774 | 956,465 | 214,553 |
Beginning balance, shares (in shares) at Mar. 31, 2023 | 59,000,000 | |||
Beginning balance at Mar. 31, 2023 | 217,436 | $ 590 | 32,996 | 183,850 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity compensation - profits interests | 222 | 193 | 29 | |
Distribution to parent | (42,300) | (33,189) | (9,111) | |
Net income (loss) | 17,517 | 17,517 | ||
Ending balance, shares (in shares) at Jun. 30, 2023 | 59,000,000 | |||
Ending balance at Jun. 30, 2023 | 192,875 | $ 590 | 0 | 192,285 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Proceeds from initial public offering, net of underwriter discount (in shares) | 18,400,000 | |||
Proceeds from initial public offering, net of underwriter discount | 277,840 | $ 184 | 277,656 | |
Offering costs | (10,823) | (10,823) | ||
Debt novation | 687,590 | 687,590 | ||
Equity compensation - profits interests | 502 | 502 | ||
Equity compensation - Omnibus Plan | 2,042 | 2,042 | ||
Net income (loss) | 21,766 | 21,766 | ||
Ending balance, shares (in shares) at Sep. 30, 2023 | 77,400,000 | |||
Ending balance at Sep. 30, 2023 | $ 1,171,792 | $ 774 | $ 956,465 | $ 214,553 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||||
Net income | $ 26,940 | $ 104,356 | $ 106,265 | $ 180,963 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization expense | 136,414 | 129,913 | 174,463 | 160,045 |
Stock-based compensation expense | 3,452 | 619 | 971 | 1,224 |
Long-lived asset impairment | 0 | 0 | 0 | 9,107 |
Amortization of debt issuance costs | 11,260 | 9,453 | 13,727 | 6,944 |
Non-cash lease expense | 3,132 | 2,066 | 2,817 | 0 |
Provision for credit losses | 2,047 | 85 | 86 | (538) |
Inventory reserve | 375 | 375 | 500 | 0 |
Gain on sale of capital assets | (721) | (825) | (874) | 426 |
Unrealized gain on derivatives | (87,363) | (40,827) | ||
Change in fair value of derivatives | 13,551 | (86,676) | ||
Deferred tax provision | 6,312 | 26,807 | 27,301 | (60,972) |
Loss on extinguishment of debt | 4,359 | 0 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (21,371) | 5,048 | (16,887) | (14,936) |
Inventories | 1,174 | (9,904) | (24,302) | (2,969) |
Contract assets | (6,053) | (8,111) | (3,555) | 0 |
Prepaid expenses and other current assets | (3,733) | 598 | (3,269) | 1,399 |
Accounts payable | 3,257 | 403 | (1,518) | (2,776) |
Accrued and other liabilities | 8,497 | 8,673 | 25,579 | 5,240 |
Contract liabilities | 14,807 | 3,974 | 5,905 | 7,648 |
Net cash provided by operating activities | 203,699 | 186,854 | 219,846 | 249,978 |
Cash flows from investing activities: | ||||
Purchase of capital assets | (145,573) | (199,707) | (259,349) | (201,934) |
Proceeds from sale of capital assets | 1,055 | 8,023 | 8,082 | 13 |
Investment in fund | (102) | (36) | ||
Other | (45) | (86) | (13) | (77) |
Net cash used in investing activities | (144,563) | (191,770) | (251,382) | (202,034) |
Cash flows from financing activities: | ||||
Borrowings on debt instruments | 756,418 | 1,409,006 | 1,613,886 | 564,109 |
Payments on debt instruments | (1,021,556) | (545,730) | (724,895) | (629,346) |
Payment of debt issuance cost | (32,759) | (27,819) | (27,819) | (885) |
Proceeds from initial public offering, net of underwriter discounts | 277,840 | 0 | ||
Offering costs | (9,247) | 0 | ||
Loss on extinguishment of debt | (1,835) | 0 | ||
Contribution from parent | 0 | 24,000 | ||
Distribution to parent | (42,300) | (838,000) | (838,000) | (1,132) |
Net cash used in financing activities | (73,439) | (2,543) | 23,172 | (43,254) |
Net decrease in cash and cash equivalents | (14,303) | (7,459) | (8,364) | 4,690 |
Cash and cash equivalents - beginning of period | 20,431 | 28,795 | 28,795 | 24,105 |
Cash and cash equivalents - end of period | 6,128 | 21,336 | 20,431 | 28,795 |
Supplemental cash disclosures: | ||||
Cash paid for interest | 173,006 | 88,569 | 147,513 | 97,234 |
Cash paid for taxes | 5,946 | 1,836 | 2,177 | 1,850 |
Supplemental disclosure of non-cash investing activities: | ||||
(Increase) decrease in accrued capital expenditures | (6,498) | 8,773 | ||
Supplemental disclosure of non-cash financing activities: | ||||
Non-cash debt novation | (689,829) | 0 | ||
Non-cash loss on extinguishment of debt | (563) | 0 | ||
Non-cash offering costs | $ (792) | $ 0 | ||
Non-cash accrued capital expenditures | $ (1,918) | $ (6,961) |
Organization and Description of
Organization and Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization and Description of Business | 1. Organization and Description of Business Kodiak Gas Services, Inc. (together with its subsidiaries, referred to as “Kodiak” or the “Company”) began its operations in 2011. On February 8, 2019, Kodiak was acquired by entities affiliated with EQT AB (publ). On October 24, 2019, the Company acquired Pegasus Optimization Managers, LLC, a provider of natural gas compression operations. The Company is an operator of contract compression infrastructure in the U.S., primarily in the Permian Basin and Eagle Ford Shale with additional operations in the Powder River Basin, Mid-Continent Stock Split On June 20, 2023, Kodiak’s board of directors approved a 590,000-for-1 IPO On June 28, 2023, Kodiak’s Registration Statement on Form S-1 | 1. Organization and Description of Business Kodiak Gas Services, Inc. (the “Company”, “Kodiak” or “KGS”) began operations in 2011 as Kodiak Gas Services, LLC. Shortly after commencing operations, the Company acquired all the assets and liabilities of KGS Investments, Inc. On February 8, 2019, Kodiak was acquired by EQT Partners through Frontier Acquisition I, Inc. and Frontier Acquisition II, Inc. (collectively, “Frontier”). On October 24, 2019, Kodiak acquired Pegasus Optimization Managers, LLC (“Pegasus”), a provider of natural gas compression operations. Kodiak’s key areas of operation are located in the Permian Basin and Eagle Ford Shale with other areas of operation in the Powder River Basin, Mid-Continent We are an operator of contract compression infrastructure in the U.S. We operate our compression units under, fixed-revenue contracts with upstream and midstream customers. We manage our business through two operating segments: Compression Operations and Other Services. Compression Operations consists of operating Company- owned and customer-owned compression infrastructure for our customers to enable the production and gathering and transportation of natural gas and oil. Other Services consists of station construction, maintenance and overhaul, and other ancillary time and material-based offerings. See Note 16 (“Segments”) to our Consolidated Financial Statements. |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | 2. Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared on the accrual basis using accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP are not required in these interim financial statements and have been condensed or omitted. Management believes that the information furnished reflects all normal recurring adjustments necessary to fairly present the Company’s consolidated financial position, results of operations and cash flows for the periods indicated. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements presented in Kodiak’s latest annual financial statements included in Kodiak’s final prospectus filed with the SEC on June 30, 2023 pursuant to Rule 424(b)(4) (the “IPO Prospectus”), which contain a more comprehensive summary of the Company’s accounting policies. The interim results reported herein are not necessarily indicative of results for a full year. These unaudited condensed consolidated financial statements include the accounts of Kodiak and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (“Topic 326”): Measurement of Credit Losses on Financial Instruments held-to-maturity |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying consolidated financial statements of the Company have been prepared on the accrual basis using principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. These consolidated financial statements include the accounts of Kodiak Gas Services, Inc. and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. Segment Information The Company operates in two business segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the Company’s chief executive officer (“CEO”), in deciding how to allocate resources and assessing performance. The Company has identified the operating segments as Compression Operations and Other Services. The Company’s chief operating decision maker allocates resources and assesses performance of the two operating segments based upon discrete financial information at the operating segment level. The Company manages its business through two operating segments: Compression Operations and Other Services. Compression Operations consists of operating Company-owned and customer-owned compression infrastructure for its customers, pursuant to fixed-revenue contracts to enable the production, gathering and transportation of natural gas and oil. Other Services consists of a full range of contract services to support the needs of our customers including station construction, maintenance and overhaul, and other ancillary time and material-based offerings. See Note 16 (“Segments”) to our Consolidated Financial Statements. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions used in preparing the accompanying consolidated financial statements. Significant estimates and assumptions that impact these consolidated financial statements relate to, among other things, allowance for doubtful accounts, estimates of net realizable value on excess obsolete inventory, capitalized installation costs and commissioning costs, fair value of derivative instruments, estimates of cost to complete on revenue contracts with customers, and useful lives of property, plant and equipment. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Revenue Recognition The Company recognizes revenue when obligations under the terms of a contract with customer are satisfied. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services to our customers. See Note 3 (“Revenue Recognition”) for more detailed information about revenue recognition for the years ended December 31, 2022 and 2021. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at their outstanding balances, net of any allowances for doubtful accounts, if determined necessary. In determining the allowance for doubtful accounts, the Company considers the length of time receivable balances have been outstanding, current economic conditions, and customer-specific information. Accounts deemed uncollectible are applied against the allowance for doubtful accounts. Recoveries of accounts receivable previously written off are recorded when received. There was $0.9 million and $1.0 million in allowance for doubtful accounts at December 31, 2022 and 2021, respectively. Inventories Inventories consist of non-serialized non-serialized Inventories consist of the following ( in thousands As of December 31, 2022 2021 Non-serialized $ 61,082 $ 44,308 Serialized parts 11,073 4,045 Total inventories $ 72,155 $ 48,353 Property, Plant and Equipment, Net Property, plant and equipment acquired in connection with business combinations are recorded at fair value as of the date of acquisition. All other additions of property, plant and equipment, which primarily consist of compression equipment, are recorded at cost. The Company depreciates the cost of property, plant and equipment using the straight-line method over the estimated useful lives. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss are reflected in the accompanying consolidated statements of operations for the period. The cost of additions and improvements that extend the useful lives of property, plant and equipment beyond its original life are capitalized. Routine maintenance and repair items are charged to current operations. The Company uses estimates to capitalize installation costs associated with the transport, installation, and commissioning of each compressor unit. Costs associated with these estimates include all direct costs required to get the unit in service for its intended use such as labor, parts, materials, and any other services that are unique in nature to each individual compressor unit. Capitalized installation costs are depreciated over the life of the agreement with the customer. Impairment of Long-Lived Assets Long-lived assets, including property, plant, and equipment, and other finite-lived identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances, including the removal of compressors from active fleet, indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in the Company’s business strategy, among others. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to estimated future undiscounted net cash flows expected to be generated by the asset. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its estimated future discounted net cash flows. No impairment was recorded for the year ended December 31, 2022. In December 2021, certain compression equipment was identified as not being part of the Company’s ongoing operations. As such, a recoverability assessment was performed, and fair value was assessed using a combination of a market and cost approach. Based on the assessed fair value an impairment expense of $9.1 million was recorded for the year end December 31, 2021. For the year ended December 31, 2022, no triggering event for any long-lived assets was identified. Leases As a result of the Company’s adoption of ASC 842 Leases on January 1, 2022, the Company recorded an operating lease right-of-use right-of-use ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. ROU lease assets also include any lease payments made and exclude lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable costs such as the Company’s proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. For short-term leases (leases that have terms of twelve months or less upon commencement), lease payments are recognized on a straight-line basis and no ROU assets are recorded. For certain equipment leases, such as office equipment, we have elected to account for the lease and non-lease As it relates to the Company’s compression operations service agreements, in which the Company is a lessor, the services nonlease component is predominant over the compression package lease component and therefore recognition of these agreements will continue to follow the ASC 606 Revenue guidance. Under previous guidance, no separation of lease and nonlease component is required, for either lessee or lessor. Identifiable Intangible Assets, Net Identifiable intangible assets acquired in connection with business combinations are recorded at fair value as of the date of acquisition. Other intangible assets are recorded at cost. The cost of identifiable intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives, which is the period over which the assets are expected to contribute directly or indirectly to future cash flows. The Company’s identifiable intangible assets consist of trade name and customer relationships. Goodwill Goodwill represents the excess of acquisition consideration paid over the fair value of net assets and liabilities acquired. Goodwill is not amortized, but rather is reviewed for impairment on an annual basis (or more frequently if impairment indicators exist). The Company tests goodwill at the reporting unit level, which is the level for which there are distinct cash flows, products, capabilities and available financial information by first performing a qualitative assessment to determine if it is more likely than not that the carrying value of the entity exceeds its fair value. As of December 31, 2022 and 2021, the Company has two reporting units, however the entire goodwill balance was allocated to the Company’s Compression Operations reporting unit. The Company conducts an annual impairment test during the fourth quarter or more frequently if there are indicators that goodwill may be impaired. The Company first performs a qualitative assessment, and if based on this assessment, it may be more likely than not that goodwill may be impaired then the Company must determine the fair value of the reporting unit and compare it to the reporting unit’s carrying value. Factors utilized in the qualitative assessment include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and Company specific events. Fair value of the reporting unit is determined based on the present value of estimated cash flows using available information regarding expected cash flows of each reporting unit, discount rates and the expected long-term cash flow growth rates. If the fair value of the reporting unit exceeds the carrying value, goodwill is not impaired, and no further testing is performed. The Company records impairment when the carrying value exceeds the fair value and to the extent there is remaining goodwill in the reporting unit under a one-step The Company performed a qualitative test and noted that there were no events or circumstances occurring that indicated that the fair value of the Compression Operations reporting unit may be below its carrying amount. No goodwill impairment was recorded for the years ended December 31, 2022 and 2021. Application of the goodwill impairment test requires judgments, including a qualitative assessment to determine whether there are any impairment indicators, and determining the fair value of the reporting unit if an impairment indicator is present. A number of significant assumptions and estimates are involved in the application of the income approach to forecast future cash flows, including revenue and operating income growth rates, discount rates and other factors. While we believe that our estimates of current value are reasonable, if actual results differ from the estimates and judgments used including such items as future cash flows and the volatility inherent in markets which we serve, impairment charges against the carrying value of those assets could be required in the future. Earnings Per Share Basic net income per share is computed by dividing net income attributable to common shareholders by the weighted-average number of common stock outstanding. Diluted net income per share is computed by dividing net income attributable to common stockholders by the Basic Weighted-Average Shares Outstanding plus all potential dilutive common shares outstanding during the period. However, the Company does not have any dilutive common shares outstanding during the years ended December 31, 2022 and 2021, respectively. Deferred Financing Costs Financing costs incurred related to debt issuance are deferred and amortized over the term of the related debt using a method that approximates the effective interest rate method. Unamortized debt issuance costs are recorded as a direct deduction from the carrying amount of the related loans on the consolidated balance sheets. Costs incurred in connection with revolving credit facilities are capitalized and amortized over the term of the loan. There were unamortized debt issuance costs of $34.2 million and $20.1 million at December 31, 2022 and 2021, respectively, which are being amortized over the terms of the ABL Facility and Term Loan. Amortization expense related to these costs of $13.7 million and $6.9 million for the years ended December 31, 2022 and 2021, respectively, are included in interest expense in the accompanying consolidated statements of operations. Derivative Instruments In accordance with ASC Topic 815, Derivatives and Hedging non-current Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and deferred tax liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the enactment date. Management is not aware of any changes in tax laws or rates that would have a material impact on our financial position, results of operations or cash flows. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning The Company applies a “more-likely-than-not” On March 27, 2020, former President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. It also appropriated funds for the Small Business Administration (“SBA”) Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. The Company examined the impact that the CARES Act may have on its business. The Company qualified for and put into practice deferment of the employer payable side of social security payments under the SBA Paycheck Protection Program totaling $1.7 million classified in accrued liabilities as of December 31, 2021. During 2022, the Company paid the outstanding amount of social security payments, presented on the consolidated balance sheets as accrued liabilities. The Company is unable to determine the impact future relief legislation will have on its financial condition, results of operation, or liquidity. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law. The IRA contains significant tax law changes, including a corporate alternative minimum tax (“CAMT”) of 15% on adjusted financial statement income for applicable corporations, and a 1% excise tax on stock repurchases after December 31, 2022. The IRA also extends certain federal tax credits and creates new tax credits to promote sustainability initiatives. The Company examined the IRA and determined that it did not have a material impact on the consolidated financial statements. The Company will continue to monitor this legislation as additional guidance is issued by the U.S. Treasury Department. Fair Value Measurements The Company uses any of three valuation approaches to measure fair value: the market approach, the income approach, and the cost approach in determining the appropriate valuation methodologies based on the nature of the asset or liability being measured and the reliability of the inputs used in arriving at fair value. The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative instruments and long-term debt. The carrying amounts of cash and cash equivalents, accounts receivable, accrued liabilities, and accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of variable rate long- term debt is based upon the current market rates for debt with similar credit risk and maturity which approximates fair value. The Company records derivative instruments at fair value using level 2 inputs of the fair value hierarchy. The interest rate swaps and interest rate collar are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. See Note 8 (“Derivative Instruments”) for more details. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These fair value measurements incorporate nonperformance risk (i.e., the risk that an obligation will not be fulfilled) and credit risk. The Company follows the provisions of ASC 820, Fair Value Measurements non-financial non-recurring The inputs used in applying valuation techniques include assumptions that market participants would use in pricing the asset or liability (i.e., assumptions about risk). Inputs may be observable or unobservable. The Company uses observable inputs in the Company’s valuation techniques and classifies those inputs in accordance with the fair value hierarchy established by applicable accounting guidance, which prioritizes those inputs. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the valuation hierarchy are defined as follows: • Level 1 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities. • Level 2 – Other inputs that are observable directly or indirectly such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 – Unobservable inputs for which there is little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The fair value of debt and contingent consideration are considered Level 3 measurements. These fair value measurements are based on unobservable inputs. Debt includes the Asset Based Lending (ABL) facility and the Term Loan. The fair value estimate reflects the contractual terms of the purchase agreement (e.g., potential payment amounts, length of measurement periods, manner of calculating any amounts due) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. Depending on the contractual terms of the purchase agreement, the probability of achieving future cash flows of earnings generally represents the only significant unobservable input. The contingent consideration liability is measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. See fair value tables below (in thousands): As of December 31, 2022 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,720,019 $ 2,720,019 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,723,719 $ 2,723,719 As of December 31, 2021 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,845,122 $ 1,845,122 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,848,822 $ 1,848,822 Concentrations of Credit Risk The Company’s assets that are potentially subject to concentrations of credit risk are cash and cash equivalents and trade accounts receivable. Cash balances are maintained in financial institutions which at times exceed federally insured limits. The Company monitors the financial condition of the financial institutions in which accounts are maintained and has not experienced any losses in such accounts. The accounts receivable of the Company are spread over a number of customers, a majority of which are operators and suppliers to the natural gas and oil industries. Major customers are defined as those individually comprising more than 10% of our revenues. For the year ended December 31, 2022, one customer comprised 13.0% of total revenues and all of these revenues were related to the Compression Operations segment. For the year ended December 31, 2021, two customers comprised 12.0% of total revenues each, and all of these revenues were related to the Compression Operations segment. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, 2018-11, Codification Improvements to Topic 842, Leases The Company adopted these lease accounting standards effective January 1, 2022, using the modified retrospective transition method and elected the Comparatives Under 840 Option in which prior comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. Upon adoption, the Company elected the package of practical expedients to not reassess whether existing contracts contained a lease, the lease classification of existing leases and initial direct cost for existing leases. In addition to the package of practical expedients, the Company elected not to capitalize amounts pertaining to leases with terms less than twelve months, to use the portfolio approach to determine discount rates, and not to separate non-lease right-of-use ASC 842 Leases also provides a practical expedient, elected by class of underlying asset, to not separate lease and nonlease components and instead account for those components as a single component if certain conditions are met. ASC 842 Leases also provides clarification for lessors on whether ASC 842 Leases or ASC Topic 606 Revenue from Contracts with Customers (“ASC 606 Revenue”) is applicable to the combined component based on determination of the predominant component. The Company concluded that for the Company’s contract compression services, in which the Company is a lessor, the services non-lease Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, available-for In March 2020, the FASB issued ASU No. 2020-03, 2020-03”). 2020-03 2020-03 |
Revenue Recognition
Revenue Recognition | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue Recognition | 3. Revenue Recognition The following table disaggregates the Company’s revenue by type and timing of provision of services or transfer of goods (in thousands) Three Months Ended 2023 2022 Services provided over time: Compression Operations $ 184,959 $ 162,063 Other Services 41,268 16,987 Total services provided over time 226,227 179,050 Services provided or goods transferred at a point in time: Compression Operations 1,714 1,599 Other Services 3,042 1,996 Total services provided or goods transferred at a point in time 4,756 3,595 Total revenue $ 230,983 $ 182,645 Nine Months Ended 2023 2022 Services provided over time: Compression Operations $ 539,576 $ 477,430 Other Services 69,543 39,757 Total services provided over time 609,119 517,187 Services provided or goods transferred at a point in time: Compression Operations 6,413 6,535 Other Services 8,869 4,415 Total services provided or goods transferred at a point in time 15,282 10,950 Total revenue $ 624,401 $ 528,137 The Company derives its revenue from contracts with customers, which comprise the following revenue streams: Compression Operations Compression Operations consists of operating Company-owned and customer-owned compression infrastructure for the Company’s customers, pursuant to fixed-revenue contracts enabling the production, gathering and transportation of natural gas and oil. Compression Operations for Company-owned, as well as customer-owned, compressors are generally satisfied over time as services are rendered based upon specific performance criteria identified in the applicable contract. The service performed is substantially the same during each period of the contract, and revenues are therefore recognized on a straight-line, time-based method over the contract term as the customer simultaneously receives and consumes the benefits provided by the service. If variable consideration exists, it is allocated to the distinct monthly service within the series to which such variable consideration relates. The Company has elected to apply the invoicing practical expedient to recognize revenue for such variable consideration, as the invoice corresponds to the value transferred to the customer based on the Company’s performance completed to date. Service revenue earned primarily on freight and crane charges that are directly reimbursable by the Company’s customers is recognized at the point in time the service is provided and control is transferred to the customer. At such time, the customer has the ability to direct the use of the benefits of such service after the performance obligation is satisfied. The amount of consideration the Company receives and revenue the Company recognizes is based upon the invoice amount. There are typically no material obligations for returns, refunds, or warranties. The Company’s standard contracts do not usually include non-cash Other Services This revenue stream primarily relates to compressor station construction services provided to certain customers and services provided based on time, parts and/or materials with customers. For most of the Company’s construction contracts, the Company integrates a significant set of tasks and components into a single contract for its customers. Hence, the entire contract is accounted for as one performance obligation. The Company recognizes revenue over time as the Company performance creates or enhances an asset that the customer controls. For construction services, revenue is recognized using an input method. Measure of the progress towards satisfaction of the performance obligation is based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue is determined by multiplying the transaction price by the ratio of actual costs incurred to total estimated costs expected for the construction services. Judgment is involved in the estimation of the progress toward completion. Any adjustments to the measure of the progress toward completion is accounted for on a prospective basis. Changes to the scope of service are recognized as an adjustment to the transaction price in the period in which the change occurs. Services provided based on time spent, parts and/or materials is generally short-term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. As revenue is recognized when time passes, this revenue is recognized at the point in time when the service is rendered. Contract Assets and Liabilities The Company recognizes a contract asset when the Company has the right to consideration in exchange for goods or services transferred to a customer. Contract assets are transferred to trade receivables when the rights become unconditional. The Company had contract assets of $9.6 million and $3.6 million as of September 30, 2023, and December 31, 2022, respectively. There was no contract asset balance as of January 1, 2022. The Company records contract liabilities when cash payments are received or due in advance of performance. The Company’s contract liabilities were $71.9 million as of September 30, 2023. As of January 1, 2023 and 2022, the beginning balances for contract liabilities were $57.1 million and $51.2 million, respectively, all of which was recognized as revenue in the nine months ended September 30, 2023 and 2022, respectively. No revenue was recognized from beginning balances in the three months ended September 30, 2023 and 2022. Performance Obligations As of September 30, 2023, the aggregate amount of transaction price allocated to unsatisfied performance obligations related to the Company’s revenue for the Compression Operations segment is $1.1 billion. The Company expects to recognize these remaining performance obligations as follows (in thousands) Remainder of 2024 2025 2026 2027 and Total Remaining performance obligations $ 162,915 $ 504,092 $ 241,526 $ 101,568 $ 54,906 $ 1,065,007 | 3. Revenue Recognition The following table disaggregates the Company’s revenue by type and timing of provision of services or transfer of goods (in thousands) Years Ended December 31, 2022 2021 Services provided over time: Compression Operations $ 646,281 $ 573,073 Other Services 47,220 18,773 Total services provided over time 693,501 591,846 Services provided or goods transferred at a point in time: Compression Operations 8,663 9,997 Other Services 5,749 4,532 Total services provided or goods transferred at a point in time 14,412 14,529 Total revenue $ 707,913 $ 606,375 The Company derives its revenue from contracts with customers, which comprise the following revenue streams: Compression Operations Compression Operations consists of operating Company-owned and customer-owned compression infrastructure for our customers, pursuant to fixed-revenue contracts enabling the production, gathering and transportation of natural gas and oil. Compression Operations for Kodiak owned, as well as customer-owned, compressors are generally satisfied over time as services are rendered at selected customer locations on a monthly basis and based upon specific performance criteria identified in the applicable contract. Terms are typically one to seven years and at the end of the term, transition to a month-to-month If variable consideration exists, it is allocated to the distinct monthly service within the series to which such variable consideration relates. The Company has elected to apply the invoicing practical expedient to recognize revenue for such variable consideration, as the invoice corresponds to the value transferred to the customer based on our performance completed to date. Service revenue earned primarily on freight and crane charges that are directly reimbursable by our customers are recognized at the point in time the service is provided and control is transferred to the customer. At such time, the customer has the ability to direct the use of the benefits of such service after the performance obligation is satisfied. The amount of consideration we receive and revenue we recognize is based upon the invoice amount. There are typically no material obligations for returns, refunds, or warranties. The Company’s standard contracts do not usually include non-cash Other Services This revenue stream relates to compressor station construction services provided to certain customers and services provided based on time, parts and/or materials with contracted customers. For most of the Company’s construction contracts, the customer contracts with the Company to provide a service of integrating a significant set of tasks and components into a single contract. Hence, the entire contract is accounted for as one performance obligation. The Company recognizes revenue over time as the Company performance creates or enhances an asset that the customer controls as the asset is created or enhanced. For construction services, revenue is recognized using an input method. Measure of the progress towards satisfaction of the performance obligation is based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue each reporting period is determined by multiplying the transaction price by the ratio of actual costs incurred to date to total estimated costs expected for the construction services. Judgment is involved in the estimation of the progress to completion. Any adjustments to the measure of the progress to completion is accounted for on a prospective basis. Changes to the scope of service is recognized as an adjustment to the transaction price in the period in which the change occurs. Service provided based on time spent, parts and/or materials is generally short-term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. The Company applies an estimated gross margin percentage, which is fixed based on historical time and materials-based service, to actual costs incurred. As revenue is recognized when time is incurred, this revenue is recognized at a point and time when the service is rendered. Contract Assets and Liabilities The Company recognizes a contract asset when the Company has the right to consideration in exchange for goods or services transferred to a customer. Contract assets are transferred to trade receivables when the rights become unconditional. The Company had contract assets of $3.6 million as of December 31, 2022 and no contract assets as of December 31, 2021. The Company records contract liabilities (deferred revenue) when cash payments are received or due in advance of performance. The Company’s deferred revenue was $57.1 million and $51.2 million, as of December 31, 2022 and 2021, respectively. As of January 1, 2022, the beginning balance for contract liability was $51.2 million. During the years ended December 31, 2022 and 2021 the Company recognized $51.2 million and $43.6 million, respectively, of revenue that was deferred as of the prior year end. Performance Obligations As of December 31, 2022, the aggregate amount of transaction price allocated to unsatisfied performance obligations related to the Company’s revenue for the Compression Operations segment is $1,042.4 million. The Company expects to recognize these remaining performance obligations as follows (in thousands) 2023 2024 2025 2026 2027 and Total Remaining performance obligations $ 471,091 $ 289,410 $ 153,944 $ 82,307 $ 45,599 $ 1,042,351 |
Accounts Receivable, net
Accounts Receivable, net | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable, net | 4. Accounts Receivable, net Accounts receivable, net consist of the following ( in thousands As of September 30, As of December 31, As of December 31, Accounts receivable $ 119,869 $ 98,500 $ 81,708 Allowance for credit losses 2,994 949 959 Accounts receivable, net $ 116,875 $ 97,551 $ 80,749 For the three and nine months ended September 30, 2023, the Company recorded a $2.0 million increase in allowance for credit losses related to expected credit losses from a customer in bankruptcy experiencing financial distress. For the three nine |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, net | 5. Inventories, net Inventories consist of the following ( in thousands As of September 30, As of December 31, Non-serialized $ 59,093 $ 61,082 Serialized parts 11,513 11,073 Total inventories $ 70,606 $ 72,155 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Property, Plant and Equipment, net | 6. Property, Plant and Equipment, net Property, plant and equipment, net consist of the following ( in thousands As of September 30, As of December 31, Compression equipment $ 3,113,641 $ 2,973,599 Trailers and vehicles 9,239 7,193 Field equipment 18,385 15,501 Technology hardware and software 10,330 6,698 Leasehold improvements 4,209 1,947 Shipping containers 3,349 3,137 Furniture and fixtures 1,570 1,519 Finance lease 530 981 Land 20 — Total property and equipment, gross 3,161,273 3,010,575 Less: accumulated depreciation (650,163 ) (521,893 ) Property, plant and equipment, net $ 2,511,110 $ 2,488,682 | 4. Property, Plant and Equipment, Net Property, plant and equipment, net consist of the following ( in thousands As of December 31, 2022 2021 Compression equipment $ 2,973,599 $ 2,731,638 Trailers and vehicles 7,193 6,516 Field equipment 15,501 11,417 Technology hardware and software 6,698 3,944 Leasehold improvements 1,947 1,772 Shipping containers 3,137 2,882 Furniture and fixtures 1,519 1,460 Other 981 1,541 Total property and equipment, gross 3,010,575 2,761,170 Less: accumulated depreciation (521,893 ) (361,556 ) Property, plant and equipment, net $ 2,488,682 $ 2,399,614 Depreciation expense was $165.0 million and $150.5 million for the years ended December 31, 2022 and 2021, respectively, and is recorded within depreciation and amortization on the accompanying consolidated statements of operations. The estimated useful lives of assets are as follows: Estimated Useful Life Compression equipment 4-25 years Trailers and vehicles 5 years Field equipment 1-5 Technology hardware and software 3 years Leasehold improvements Shorter of remaining lease term or 5 years Shipping containers 4 years Furniture and fixtures 7 years Other Shorter of remaining lease term or estimated useful life |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 5. Leases The Company maintains operating leases, primarily related to office space, and certain corporate equipment. The Company’s leases have remaining lease terms of up to 5 years, some of which include options that permit renewals for additional periods. Operating Leases Balance sheet information related to the Company’s operating leases were as follows (in thousands) Classification For the year ended ROU assets, net Operating lease ROU assets, net $ 9,827 Lease liabilities: Current Accrued liabilities $ 3,090 Noncurrent Operating lease liabilities 6,754 Total lease liabilities $ 9,844 The components of total lease expense are as follows (in thousands) For the year ended Operating lease cost $ 3,349 Variable lease cost — Short-term lease cost 337 Total lease cost $ 3,686 The short-term lease cost disclosed above reasonably reflects the Company’s ongoing short-term lease commitments. These lease costs are primarily recorded within cost of operations. Supplemental information related to the Company’s operating leases were as follows: December 31, 2022 Weighted average remaining lease term (in years) 3.55 Weighted average discount rate 5.25 % Supplemental cash flow information related to the Company’s operating leases were as follows (in thousands) For the year ended Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 3,332 Operating ROU assets obtained in exchange for new lease liabilities $ 71 As of December 31, 2022, the Company does not have any additional operating and finance leases that have not yet commenced. Maturities of operating lease liabilities, associated with ROU assets, as of December 31, 2022, were as follows (in thousands) Operating Leases Years ended December 31, 2023 $ 3,517 2024 3,119 2025 1,995 2026 1,313 2027 801 Thereafter 27 Total lease payments 10,772 Less: Interest (928 ) Total lease liabilities $ 9,844 As of December 31, 2021, future minimum rentals under the non-cancellable (in thousands) Operating Leases Years ended December 31, 2022 $ 3,015 2023 2,165 2024 1,878 2025 1,116 2026 965 Thereafter 555 Total lease payments $ 9,694 Rental expenses related to office leases amounted to $3.6 million for the year ended December 31, 2021. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill and Identifiable Intangible Assets, Net | 7. Goodwill and Identifiable Intangible Assets, net There were no changes in the carrying amount of goodwill during the nine months ended September 30, 2023. All of the goodwill was allocated to the Company’s Compression Operations reporting unit. The Company’s identifiable intangible assets consist of the following as of September 30, 2023 and December 31, 2022 ( in thousands As of September 30, 2023 Original Accumulated Amortization Net Remaining Weighted Average Amortization Period (years) Trade name $ 13,000 $ (3,018 ) $ 9,982 15.4 Customer relationships 150,000 (34,725 ) 115,275 13.1 Total identifiable intangible assets $ 163,000 $ (37,743 ) $ 125,257 As of December 31, 2022 Original Accumulated Amortization Net Remaining Weighted Average Amortization Period (years) Trade name $ 13,000 $ (2,531 ) $ 10,469 16.1 Customer relationships 150,000 (28,107 ) 121,893 13.8 Total identifiable intangible assets $ 163,000 $ (30,638 ) $ 132,362 Amortization expense was $2.4 million and $7.1 million for each of the three and nine months ended September 30, 2023 and 2022 and is recorded within depreciation and amortization on the condensed consolidated statements of operations. As of September 30, 2023, the following is a summary of future minimum amortization expense for identified intangible assets ( in thousands Amount Years ending December 31, Remainder of 2023 $ 2,368 2024 9,474 2025 9,474 2026 9,474 2027 9,474 Thereafter 84,993 Total $ 125,257 | 6. Goodwill and Identifiable Intangible Assets, Net There were no changes in the carrying amount of goodwill during the years ended December 31, 2022 and 2021. All of the goodwill was allocated to our Compression Operations reporting unit. The Company’s identifiable intangible assets consist of the following as of December 31, 2022 and 2021 ( in thousands As of December 31, 2022 Original Cost Accumulated Net Amount Remaining Weighted Trade name $ 13,000 $ (2,531 ) $ 10,469 16.1 Customer relationships 150,000 (28,107 ) 121,893 13.8 Total identifiable intangible assets $ 163,000 $ (30,638 ) $ 132,362 As of December 31, 2021 Original Cost Accumulated Net Amount Remaining Weighted Trade name $ 13,000 $ (1,881 ) $ 11,119 17.1 Customer relationships 150,000 (19,284 ) 130,716 14.8 Total identifiable intangible assets $ 163,000 $ (21,165 ) $ 141,835 Amortization expense was $9.5 million for each of the years ended December 31, 2022 and 2021 and is recorded within depreciation and amortization on the consolidated statements of operations. At December 31, 2022, the following is a summary of future minimum amortization expense for identified intangible assets ( in thousands Amount Years ending December 31, 2023 $ 9,474 2024 9,474 2025 9,474 2026 9,474 2027 9,474 Thereafter 84,992 Total $ 132,362 |
Long-Lived and Other Asset Impa
Long-Lived and Other Asset Impairment | 9 Months Ended |
Sep. 30, 2023 | |
Asset Impairment Charges [Abstract] | |
Long-Lived and Other Asset Impairment | 8. Long-Lived and Other Asset Impairment Long-lived assets, including property, plant, and equipment, and other finite-lived identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances, including the removal of compressors from the active fleet, indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in the Company’s business strategy, among others. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to estimated future undiscounted net cash flows expected to be generated by the asset. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its estimated future discounted net cash flows. No impairment was recorded nor triggering events were identified for the three and nine month periods ended September 30, 2023 and 2022. |
Debt and Credit Facilities
Debt and Credit Facilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Debt and Credit Facilities | 9. Debt and Credit Facilities Debt consists of the following (in thousands) As of September 30, As of December 31, ABL Facility $ 1,789,086 $ 1,754,224 Term Loan — 1,000,000 Total debt outstanding 1,789,086 2,754,224 Less: unamortized debt issuance cost (41,174 ) (34,205 ) Long-term debt, net of unamortized debt issuance cost $ 1,747,912 $ 2,720,019 ABL Facility As of January 1, 2022, a wholly-owned subsidiary of Kodiak had a revolving asset-based loan credit facility (the “ABL Facility”) with unaffiliated secured lenders and JPMorgan Chase Bank, N.A., as administrative agent. On May 19, 2022, wholly-owned subsidiaries of Kodiak entered into the Third Amendment to the Third Amended and Restated Credit Agreement which mainly served to amend the applicable rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”) and allow for the return of capital to the parent of Kodiak in the amount of $838 million by increasing borrowings on the ABL Facility by $225 million, increasing the Term Loan by $600 million and utilizing $13 million of cash on hand. In addition, the ABL Facility size was increased from $1.9 billion to $2.1 billion to increase available liquidity under the facility. New lender fees and costs totaling $13.2 million were incurred as a result of the amendment and will be amortized over the life of the loan to interest expense. On March 22, 2023, wholly-owned subsidiaries of Kodiak 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”) which mainly served to extend the maturity date from June 2024 to March 2028. The total facility size was increased from $2.1 billion to $2.2 billion to increase available liquidity under the facility. New lender fees and costs totaling $31.8 million were incurred and will be amortized over the life of the loan to interest expense. An additional $4.2 million in accrued interest related to exiting lenders was expensed and paid in the period. The remaining unamortized debt issuance costs of $1.2 million associated with the exiting lenders was written-off Pursuant to the ABL Credit Agreement, the Company must comply with certain restrictive covenants, including a minimum interest coverage ratio of 2.5x and a maximum Leverage Ratio (calculated based on the ratio of Consolidated Total Debt to Consolidated EBITDA, each as defined in the ABL Credit Agreement). The maximum Leverage Ratio is (i) 5.25 to 1.00 for the fiscal quarters ending September 30, 2023 and December 31, 2023, (ii) 5.00 to 1.00 for the fiscal quarter ending March 31, 2024, (iii) 4.75 to 1.00 for the fiscal quarter ending June 30, 2024 and (iv) 4.50 to 1.00 for each fiscal quarter ending on or after September 30, 2024. All loan amounts are collateralized by essentially all the assets of the Company. The Company was in compliance with all covenants as of September 30, 2023 and December 31, 2022. The ABL Credit Agreement also restricts the Company’s ability to: incur additional indebtedness and guarantee indebtedness; pay dividends or make other distributions or repurchase or redeem equity interests; prepay, redeem or repurchase certain debt; issue certain preferred units or similar equity securities; make loans and investments; sell, transfer or otherwise dispose of assets; incur liens; enter into transactions with affiliates; enter into agreements restricting the Company’s restricted subsidiaries’ ability to pay dividends; enter into certain swap agreements; amend certain organizational documents; enter into sale and leaseback transactions; and consolidate, merge or sell all or substantially all of the Company’s assets. The applicable interest rates as of September 30, 2023 were 10.25% (prime rate plus 2.00%) and 8.34% (Term SOFR rate plus 0.10% plus 2.75%). The applicable interest rates as of December 31, 2022 were 9.50% (prime rate plus 2.00%) and 7.60% (Term SOFR rate plus 0.10% plus 3.00%). We pay an annualized commitment fee of 0.25% on the unused portion of our ABL Facility if borrowings are greater than 50% of total commitments and 0.50% on the unused portion on the ABL Facility if borrowings are less than 50% of total commitments. The ABL Facility is a “revolving credit facility” that includes a lock box 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 when 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 September 30, 2023 and December 31, 2022, 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. Term Loan As of January 1, 2022, a wholly-owned subsidiary of Kodiak had a term loan (the “Term Loan”) pursuant to a credit agreement with unaffiliated unsecured lenders and Wells Fargo Bank, N.A., as administrative agent. In May 2022, the Company completed a recapitalization and distribution of $838 million to the parent of Kodiak primarily by increasing the borrowings from the ABL Facility by $225 million and the Term Loan by $600 million per the Amended and Restated Term Loan Credit Agreement entered into by the Company on May 19, 2022 (as amended from time to time, the “Term Loan Credit Agreement”) and utilizing $13 million of cash on hand. New lender fees and costs totaling $14.6 million were incurred for this amendment and will be amortized over the life of the loan to interest expense. On March 31, 2023, the Company’s wholly-owned subsidiary entered into the First Amendment to the Amended and Restated Term Loan Credit Agreement pursuant to which the maturity date was extended to September 22, 2028. Lender fees and costs totaling $0.75 million were incurred for this amendment and were amortized over the life of the loan to interest expense. On June 29, 2023, the Company terminated all interest rate swaps and collars attributable to the Term Loan and recognized a gain on derivatives and received cash of $25.8 million during the period ended June 30, 2023 (the “Term Loan Derivative Settlement”). On July 3, 2023, in connection with the IPO, the Company used the net proceeds from the IPO, together with the proceeds resulting from the Term Loan Derivative Settlement and borrowings under the ABL Facility, to repay $300 million of borrowings outstanding under the Term Loan. Additionally, a subsidiary of Kodiak entered into a Novation, Assignment, and Assumption Agreement (“Novation Agreement”) with Kodiak Holdings, pursuant to which all of the Company’s remaining obligations under the Term Loan were assumed by Kodiak Holdings, and the Company’s obligations thereunder were terminated. The Company is no longer a borrower or guarantor under, nor otherwise obligated with respect to the debt outstanding under the Term Loan. As part of the $300 million repayment of the Term Loan, unamortized debt issuance costs of $4.4 million and fees of $2.4 million were recorded to loss on extinguishment for the three and nine months ended September 30, 2023. The carrying value of the term debt novated under the Novation Agreement of $689.8 million (comprised of $700.0 million of principal balance less $10.2 million of unamortized debt issuance costs) was considered an equity transaction with the Parent and recorded to additional paid-in As of September 30, 2023, the scheduled maturities, without consideration of potential mandatory prepayments, of the long-term debt were as follows ( in thousands Amount Years ended December 31, Remainder of 2023 $ — 2024 — 2025 — 2026 — 2027 — Thereafter 1,789,086 Total $ 1,789,086 Debt Issuance Costs Debt issuance costs of $41.2 million, as of September 30, 2023, are being amortized over the term of the ABL Facility. As of December 31, 2022, $34.2 million were being amortized over the terms of the ABL Facility and Term Loan. Amortization expense related to these costs of $0.2 million and $11.3 million for the three and nine months ended September 30, 2023, are included in interest expense in the accompanying condensed consolidated statements of operations. Amortization expense was $4.3 million and $9.5 million for the three and nine months ended September 30, 2022. | 7. Debt and Credit Facilities Debt consists of the following (in thousands) As of December 31, 2022 2021 ABL Facility $ 1,754,224 $ 1,465,234 Term Loan 1,000,000 400,000 Total debt outstanding 2,754,224 1,865,234 Less: current maturities — — Less: unamortized debt issuance cost (34,205 ) (20,112 ) Long-term debt, net of unamortized debt issuance cost $ 2,720,019 $ 1,845,122 ABL Facility As of January 1, 2021 the Company’s wholly-owned subsidiary had an ABL Facility with unaffiliated secured lenders and a bank as administrative agent. During 2021, the total facility was upsized from $1.7 billion to $1.875 billion to increase available liquidity under the facility. New lender fees and costs totaling $0.9 million were incurred and will be amortized over the life of the loans to interest expense. In May 2022, the Company completed a recapitalization and return of capital of $838 million to the Parent Company primarily by increasing the borrowings from the current ABL Facility and Term Loan of which $225 million is related to the ABL Facility. On May 19, 2022, the Company’s wholly-owned subsidiary entered into the Third Amendment to the Third Amended and Restated Credit Agreement which mainly served to amend the applicable rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”) and allow for the return of capital to the Parent Company. During 2022, the total facility was upsized from $1.875 billion to $2.050 billion to increase available liquidity under the facility. New lender fees and costs totaling $13.2 million were incurred and will be amortized over the life of the loans to interest expense. Pursuant to the ABL Credit Agreement, the Company must comply with certain restrictive covenants, including a fixed charge coverage ratio and leverage ratio. As an update to the Third Amended and Restated Credit Agreement, the financial covenant restrictions were waived for the second quarter of 2022 and the maximum leverage ratio (calculated based on the ratio of Consolidated Total Debt to Consolidated EBITDA, each as defined in the ABL Credit Agreement) was increased to 7.25x through the first quarter of 2023; 7.00x thereafter through the third quarter of 2023; 6.75x thereafter through the first quarter of 2024; and 6.50x in the second quarter of 2024 and thereafter. All loan amounts are collateralized by the assets of the Company’s wholly-owned subsidiary. The Company was in compliance with all covenants as of December 31, 2022 and 2021. The applicable interest rates as of December 31, 2022 were 9.50% (prime rate) and 7.60% (Term SOFR rate plus 0.10%) plus (3.00% spread). The applicable interest rates as of December 31, 2021 were 5.25% (prime rate) and 3.125% (LIBOR rate plus 3.00%). The ABL Credit Agreement provides for a “revolving credit facility” that includes an 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 when availability falls below a specified threshold (i.e., the greater of $200.0 million or 10% of the aggregate commitments at such time of event). As of December 31, 2022 and 2021, availability under the agreement was in excess of the specified threshold and as such the entire balance was classified as long-term Term Loan As of January 1, 2021 the Company’s wholly-owned subsidiary had a Term Loan Credit Agreement with unaffiliated unsecured lenders and a bank as administrative agent. In May 2022, the Company completed a recapitalization and return of capital of $838 million to the Parent Company primarily by increasing the borrowings from the current ABL Facility and Term Loan of which $600 million is related to the Term Loan as per the Amended and Restated Term Loan Credit Agreement entered into by the Company on May 19, 2022. As an update to the Amended and Restated Term Credit Agreement, the covenant restrictions were waived for the second quarter of 2022 and the maximum leverage ratio (calculated based on the ratio of Consolidated Total Debt to Consolidated EBITDA, each as defined in the Term Loan Credit Agreement) was increased to 7.50x through the first quarter of 2023; 7.25x thereafter through the third quarter of 2023; 7.00x thereafter through the first quarter of 2024; 6.75x thereafter through the first quarter of 2025; 6.50x thereafter through the first quarter of 2026; 6.25x thereafter through the fourth quarter of 2026; and 6.00x in the first quarter of 2027 and thereafter. Additionally, the amendment allowed for the return of capital to the Parent Company. New lender fees and costs totaling $14.6 million were incurred for this amendment and will be amortized over the life of the loans to interest expense. Borrowings under the Term Loan bear the following applicable rates: interest rates are based on 6.00% plus an alternate base rate and 7.00% plus an adjusted eurocurrency rate for alternate base rate ABR loans and eurocurrency loans, respectively. The interest rates were 10.67% and 7.13% as of December 31, 2022 and 2021, respectively. The Term Loan has a maturity date of May 19, 2027, at which time all unpaid principal and interest is due. Commencing with the fiscal year ending December 31, 2023, an excess cash flow payment that would reduce the principal balance of the Term Loan is potentially due 120 days following each preceding fiscal year end. This excess cash flow payment is based the leverage ratio (calculated based on the ratio of Consolidated Total Debt to Consolidated EBITDA, each as defined in the Term Loan Credit Agreement) at year end. Based on the calculated ratio, a payment percentage is applied to the excess cash flow to determine the amount, if any, due. The Company was in compliance with all financial covenants as of December 31, 2022 and 2021. The ABL credit agreement and Term Loan restrict the Company’s wholly-owned subsidiary’s ability to: incur additional indebtedness and guarantee indebtedness; pay dividends or make other distributions or repurchase or redeem equity interests; prepay, redeem or repurchase certain debt; issue certain preferred units or similar equity securities; make loans and investments; sell, transfer or otherwise dispose of assets; incur liens; enter into transactions with affiliates; enter into agreements restricting our restricted subsidiaries’ ability to pay dividends; enter into certain swap agreements; amend certain organizational documents; enter into sale and leaseback transactions; and consolidate, merge or sell all or substantially all of our assets. The restricted net assets of the wholly-owned subsidiary of the Company exceed 25% of the consolidated net assets of the Parent. See Note 18, “Parent Company Information”. As of December 31, 2022, the scheduled maturities, without consideration of potential mandatory prepayments, of the long-term debt were as follows ( in thousands Amount Years ended December 31, 2023 $ — 2024 1,754,224 2025 — 2026 — 2027 1,000,000 Total $ 2,754,224 |
Derivative Instruments
Derivative Instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative Instruments | 10. Derivative Instruments The Company has entered into interest rate swaps exchanging variable interest rates for fixed interest rates and in prior periods, entered into interest rate collars that fix interest rates within a range through the simultaneous purchase of an interest rate cap and sale of an interest rate floor. The Company has not designated any derivative instruments as hedges for accounting purposes and does not enter into such instruments for speculative or trading purposes. The Company’s derivative instruments are recognized on the unaudited condensed consolidated balance sheets at fair value and classified as current or long-term depending on the maturity date of the derivative instrument and whether the net carrying value is in a net asset or net liability position. Realized and unrealized gains and losses associated with the derivative instruments are recognized in gain on derivative instrument within the unaudited condensed consolidated statements of operations. On June 29, 2023, the Company terminated $750.0 million of notional amounts related to interest rate swaps and collars attributable to the Term Loan and recognized a gain on derivatives of $25.8 million during the nine months ended September 30, 2023. The table below summarizes information related to the notional amount and maturity dates for interest rate swaps at September 30, 2023: Notional Amount Maturities $125,000,000 12/4/2024 $225,000,000 12/5/2024 $200,000,000 6/14/2025 $125,000,000 12/6/2025 $175,000,000 6/14/2026 $125,000,000 6/22/2026 $125,000,000 12/6/2026 $75,000,000 5/18/2027 $100,000,000 5/19/2027 $200,000,000 5/19/2027 $125,000,000 12/6/2027 Of the total notional amount of $1.6 billion, $375 million is related to forward dated interest rate swaps with an effective date after September 30, 2023. The following tables set forth the Company’s assets that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy and classification of the Company’s derivative instruments not designated as hedging instruments on the accompanying condensed consolidated balance sheets ( in thousands As of September 30, 2023 Level 1 Level 2 Level 3 Total Current assets: Interest rate swaps $ — $ — $ — $ — Total current assets $ — $ — $ — $ — Non-current Interest rate swaps $ — $ 51,790 $ — $ 51,790 Total non-current $ — $ 51,790 $ — $ 51,790 Total $ — $ 51,790 $ — $ 51,790 As of December 31, 2022 Level 1 Level 2 Level 3 Total Current assets: Interest rate swaps $ — $ 823 $ — $ 823 Total current assets $ — $ 823 $ — $ 823 Non-current Interest rate swaps $ — $ 48,955 $ — $ 48,955 Interest rate collars — 15,562 — 15,562 Total non-current $ — $ 64,517 $ — $ 64,517 Total $ — $ 65,340 $ — $ 65,340 The following table summarizes the effects of the Company’s derivative instruments in the condensed consolidated statements of operations ( in thousands Derivative Instruments Not Designated as Hedging Instrument Location of Gain Recognized Three Months Ended 2023 2022 Interest rate swaps Gain on derivatives $ 15,141 $ 44,809 Interest rate collars Gain on derivatives — 7,053 Total gain on derivative $ 15,141 $ 51,862 Derivative Instruments Not Designated as Hedging Instrument Location of Gain (Loss) Nine Months Ended 2023 2022 Interest rate swaps Gain on derivatives $ 42,649 $ 54,796 Interest rate collars Gain (loss) on derivatives (569 ) 22,176 Total gain on derivative $ 42,080 $ 76,972 We record derivative instruments at fair value using level 2 inputs of the fair value hierarchy. The interest rate swaps and interest rate collars are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs from actively quoted public markets. including interest rate curves and credit spreads. | 8. Derivative Instruments The Company has entered into interest rate swaps exchanging variable interest rate with fixed interest rates and interest rate collars which represent a simultaneous purchase of a cap rate with the sale of a floor rate. The Company has not designated any derivative instruments as hedge for accounting purposes and does not enter into such instruments for speculative or trading purposes. The Company’s cash flow is only impacted when the actual settlements under the derivative contracts result in the Company making a payment to or receiving a payment from the counterparty. Cash flows from all derivative activity for the periods presented appear in the operating section on the consolidated statements of cash flows. As a result of the increase to the ABL Facility and Term Loan during the year ended 2022, the Company entered into additional $975.0 million notional amounts of interest rate swaps to comply with hedging requirements set forth in the credit agreements. The table below summarizes information related to the notional amount and maturities dates for interest rate swaps at December 31, 2022: Notional Amount Maturities $100,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/14/2023 $100,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/4/2024 $375,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12/4/2024 $225,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12/5/2024 $200,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/14/2025 $175,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/14/2026 $125,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/22/2026 $75,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/18/2027 $100,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/19/2027 $200,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/29/2027 The following table presents summarized information related to the collar agreements maturing in 2024: Notional Amount Ceiling $ 200,000,000 Floor $ 200,000,000 The following tables set forth the Company’s assets and liabilities that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy and classification of the Company’s derivative instrument not designated as hedging instruments on the accompanying consolidated balance sheets ( in thousands As of December 31, 2022 Level 1 Level 2 Level 3 Total Current assets: Interest rate swaps $ — $ 823 $ — $ 823 Non-current Interest rate swaps $ — $ 48,955 $ — $ 48,955 Interest rate collars — 15,562 — 15,562 Total $ — $ 65,340 $ — $ 65,340 As of December 31, 2021 Level 1 Level 2 Level 3 Total Current liabilities: Interest rate swaps $ — $ (398 ) $ — $ (398 ) Non-current Interest rate swaps $ — $ (13,723 ) $ — $ (13,723 ) Interest rate collars — (7,902 ) — (7,902 ) Total $ — $ (22,023 ) $ — $ (22,023 ) The following table summarizes the effects of the Company’s derivative instruments in the consolidated statements of operations (in thousands): Derivative Instruments Not Designated as Hedging Instrument Location of Gain Recognized Years Ended 2022 2021 Interest rate swaps Gain on derivatives $ 59,592 $ 8,771 Interest rate collars Gain on derivatives 23,525 9,403 Total $ 83,116 $ 18,174 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative instruments and long-term debt. The carrying amounts of cash and cash equivalents, accounts receivable, accrued liabilities, and accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of debt and contingent consideration are considered Level 3 measurements. These fair value measurements are based on unobservable inputs. The fair value of variable rate long-term debt is based upon the current market rates for debt with similar credit risk and maturity which approximates fair value. Debt includes the ABL Facility and is shown net of unamortized debt issuance cost in the tables below. The contingent consideration liability is measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. The fair value estimate reflects the contractual terms of the purchase agreement (e.g., potential payment amounts, length of measurement periods, manner of calculating any amounts due) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. Depending on the contractual terms of the purchase agreement, the probability of achieving future cash flows generally represents the only significant unobservable input. There was no change in the fair value of contingent consideration during the three and nine months ended September 30, 2023. See fair value tables below ( in thousands As on September 30, 2023 Level 1 Level 2 Level 3 Total Debt $ — $ — $ 1,747,912 $ 1,747,912 Contingent Consideration — — 3,673 3,673 Total $ — $ — $ 1,751,585 $ 1,751,585 As of December 31, 2022 Level 1 Level 2 Level 3 Total Debt $ — $ — $ 2,720,019 $ 2,720,019 Contingent Consideration — — 3,673 3,673 Total $ — $ — $ 2,723,692 $ 2,723,692 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | ||
Stockholders' Equity | 12. Stockholders’ Equity Holders of the Company’s common stock are entitled to one vote for each share. As of September 30, 2023 and December 31, 2022, there were 77,400,000 and 59,000,000 shares of common stock issued and outstanding, respectively. Holders of common stock are entitled to receive, in the event of a liquidation, dissolution or winding up, ratably the assets available for distribution to the stockholders after payment of all liabilities. On July 3, 2023, 16,000,000 shares of common stock were issued and sold as part of the closing of the IPO, resulting in net proceeds of $230.8 million, after deducting expenses and underwriting discounts and commissions payable by us. On July 13, 2023, the underwriters exercised in full their option to purchase additional shares of common stock pursuant to the underwriting agreement relating to the IPO. On July 13, 2023, the Company issued and sold an additional 2,400,000 shares of common stock at a price to the public of $16.00 per share. The Company received net proceeds of approximately $36.2 million, after deducting underwriting discounts and commissions payable. The net proceeds were used for repayment of existing indebtedness and general corporate purposes. After giving effect to these transactions, Kodiak had 77,400,000 shares of common stock issued and outstanding. Class B and C Profits Interests Prior to the IPO, Kodiak Holdings issued incentive awards to certain employees of Kodiak Gas Services, LLC (a wholly-owned subsidiary of the Company) in the form of Class B incentive units (“Class B Units”). The Company records stock-based compensation expense associated with the Class B Units because of the employment relationship of the grantees with Kodiak Gas Services, LLC. On March 6, 2019, 61,098.4 Class B Units were authorized under the Kodiak Holdings 2019 Class B Unit Incentive Plan for grants to certain employees and non-employee There are no performance hurdles associated with the Time-Vesting Units. The fair value of each incentive award was estimated on its applicable grant date using an option pricing model. Stock compensation expense is recognized ratably over the vesting period of the awards. During the nine months ended September 30, 2023 and 2022, approximately $1.4 million and $0.6 million, respectively, in stock compensation expense was recognized in selling, general and administrative expenses. As of September 30, 2023, there were 3,079.1 unvested Time-Vesting Units, representing $0.5 million in unrecognized stock compensation expense. 2023 Omnibus Incentive Plan On June 20, 2023, Kodiak’s board of directors authorized and adopted the Kodiak Gas Services, Inc. Omnibus Incentive Plan (the “Omnibus Plan”) for employees, consultants and directors. The Omnibus Plan enables Kodiak’s board of directors (or a committee authorized by Kodiak’s board of directors) to award incentive and non-qualified On June 29, 2023, Kodiak granted 1,297,188 shares of common stock equity awards to certain employees, including Kodiak’s named executive officers, pursuant to awards under the Omnibus Plan. 985,313 of the shares were granted pursuant to awards of time-based restricted stock units (“RSUs”) that vest ratably over a three-year period, subject to continuous service through each vesting date. 311,875 of the shares were granted pursuant to awards of performance stock units (“PSUs”) that cliff vest at the end of a three-year performance period, with the ultimate number of shares earned and issued ranging from 0-190% The following table summarizes award activity under the Omnibus Plan for the nine-month period ending September 30, 2023: RSUs PSUs Number of RSUs Weighted-Average Price Number of PSUs Weighted-Average Price Outstanding at December 31, 2022 — — — — Granted 985,313 $ 16.00 311,875 $ 16.99 Vested or exercised — — — — Forfeited (20,679 ) — — — Outstanding at September 30, 2023 964,634 $ 16.00 311,875 $ 16.99 Restricted stock awards expected to vest 964,634 $ 16.00 311,875 $ 16.99 As of September 30, 2023, the total future compensation cost related to non-vested the three and nine months ended September 30, 2023, approximately $2.0 million in stock compensation expense was recognized in selling, general and administrative expenses. There was no such expense recorded for the three and nine months ended September 30, 2022. | 9. Stockholders’ Equity The Company is authorized to issue up to 1,000 shares of par value common shares. Holders of the Company’s common shares are entitled to one vote for each share. As of December 31, 2022 and 2021, there were 100 shares of common shares issued outstanding Class B and C Profits Interests Kodiak Holdings issued incentive awards to certain employees of Kodiak Gas Services, LLC (a wholly-owned subsidiary of the Company) in the form of Class B incentive units (“Class B Units”). The Company records a stock-based compensation expense associated with the Class B Units because of the employment relationship of the grantees with Kodiak Gas Services, LLC. On March 6, 2019, 61,098.4 Class B Units were authorized under the Kodiak Holdings (f/k/a Frontier Topco Partnership, L.P.) 2019 Class B Unit Incentive Plan for grants to certain employees and non-employee f i v e There are no performance hurdles associated with the Time-Vested Units. The fair value of each incentive award was estimated on their applicable grant date using an option pricing model. The grant date fair value of the Time-Vested Units was $1.3 million in 2022 and $3.1 million in 2021. Stock compensation expense is recognized ratably over the vesting period of the awards. During 2022 and 2021, approximately $1.0 million and $1.2 million, respectively, in stock compensation expense was recognized in selling, general and administrative expenses related to time-based vesting of 3,279.4 and 5,689 Class B Units. As of December 31, 2022, there were 6,122.4 unvested time-based Class B Units representing $2.2 million in unrecognized stock compensation expense. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 13. Commitments and Contingencies Purchase Commitments Purchase commitments primarily consist of future commitments to purchase new compression units ordered but not received. The commitments as of September 30, 2023, were $215.7 million, of which $182.9 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. The Company records contingent consideration at the acquisition and end of reporting periods at fair value in accrued liabilities. As of September 30, 2023 and December 31, 2022, none of the outstanding receivables had been collected. Sales Tax Contingency Between October 2019 and April 2023, the Company received notices from the Texas Comptroller’s office in regards to audits for periods ranging from December 2015 through December 2022. The audits pertain to whether the Company may owe sales tax on certain of its compression equipment that it had purchased during that time period. As of December 31, 2022, the Company had accrued a total amount of $27.8 million for this contingent liability. During the nine months ended September 30, 2023, based on current information the Company accrued an additional $0.9 million and as of September 30, 2023, the Company had accrued a total of $28.7 million for this contingent liability. Legal Matters From time to time, the Company may become involved in various legal matters. Management believes that there are no legal matters as of September 30, 2023 whose resolution could have a material adverse effect on the unaudited condensed consolidated financial statements. | 10. Commitments and Contingencies Purchase Commitments Purchase commitments of $166.9 million that primarily consist of commitments to purchase compression units are expected to be settled within the next twelve months. Contingent Consideration As part of a prior acquisition, the Company agreed on contingent consideration associated with the collectability of certain past due accounts receivable amounts of $7.3 million from a particular customer. The agreement calls for any amount collected of the outstanding receivables balance up to 50% is due to seller and any amount over 50% of the outstanding receivable balance to be due to the Company. The Company records contingent consideration at the acquisition and end of reporting periods at fair value. During 2020, the Company wrote off an outstanding receivable balance due to the Company of $3.7 million to bad debt and recorded $3.7 million related to the 50% of the receivable balance due to the seller in accrued liabilities. As of December 31, 2022 and 2021, none of the outstanding receivables had been collected. Sales Tax Contingency Beginning in October 2019 through September 2022, the Company received notices from the Texas Comptroller’s office in regards to audits for periods ranging from December 2015 through October 2022. The audits pertain to whether the Company may owe sales tax on certain of their compression equipment that they had purchased during that time period. As of December 31, 2021, based on information currently available, the Company had accrued a contingent liability of approximately $21.3 million, of which approximately $5.2 million was reclassed from other liabilities to accrued liabilities. During the year ended December 31, 2022, based on current information the Company accrued an additional amount of approximately $6.5 million and as of December 31, 2022, the Company had accrued a total amount of $27.8 million for this contingent liability. Legal Matters From time to time, the Company may become involved in various legal matters. Management believes that there are no legal matters as of December 31, 2022 whose resolution could have a material adverse effect on the consolidated financial statements. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid Expenses and Other Current Assets | 14. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following ( in thousands As of As of Prepaid insurance $ 3,733 $ 3,997 Prepaid rent 799 589 Deferred IPO issuance costs — 3,047 Deferred project costs 3,538 — Interest rate swap receivable 1,559 — Other 3,624 1,887 Total prepaid expenses and other current assets $ 13,253 $ 9,520 | 11. Prepaid Expenses and Other Current Assets The prepaid expenses and other current assets consisted of the following ( in thousands As of December 31, 2022 2021 Prepaid insurance $ 3,997 $ 4,104 Prepaid rent 589 606 Other 4,934 1,541 Total prepaid expenses and other current assets $ 9,520 $ 6,251 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Payables and Accruals [Abstract] | ||
Accrued Liabilities | 15. Accrued Liabilities Accrued liabilities consist of the following ( in thousands As of As of Sales tax liability $ 28,688 $ 27,820 Accrued interest 11,746 16,347 Accrued bonus 10,475 7,764 Accrued taxes 14,675 9,667 Accrued payroll 1,036 2,744 Accrued legal fee 1,823 1,906 Lease liabilities - current portion — 3,090 Contingent consideration 3,673 3,673 Accrued accounts payable 16,629 14,080 Accrued insurance 109 2,231 Station construction accrual 12,361 — Other 1,233 4,551 Total accrued liabilities $ 102,448 $ 93,873 | 12. Accrued Liabilities Accrued liabilities consisted of the following ( in thousands As of December 31, 2022 2021 Sales tax liability $ 27,820 $ 16,079 Accrued interest 16,347 6,237 Accrued accounts payable 14,080 6,144 Accrued taxes 9,667 4,713 Accrued bonus 7,764 7,105 Contingent consideration 3,673 3,673 Lease liabilities - current portion 3,090 — Accrued insurance 2,231 2,354 Accrued payroll 2,744 2,253 Social security deferral — 1,751 Other 6,457 4,557 Total accrued liabilities $ 93,873 $ 54,866 |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 16. Income Taxes For the three and nine months ended September 30, 2023, the Company recorded income tax expense of $7.9 million and $9.8 million, respectively. Income tax expense for the three and nine months ended September 30, 2022 was $14.3 million and $32.5 million, respectively. The effective tax rate was approximately 26.6% and 26.6% for the three and nine months ended September 30, 2023, compared to 23.8% and 23.7% for the three and nine months ended September 30, 2022. The difference between the Company’s effective tax rates for the three and nine months ended September 30, 2023 and 2022 and the U.S. statutory tax rate of 21% was primarily due to state income taxes. In August 2022, the U.S. Inflation Reduction Act of 2022 and the CHIPS and Science Act of 2022 were signed into law. These acts include, among other provisions, a corporate alternative minimum tax of 15%, an excise tax on the repurchase of corporate stock, various climate and energy provisions, and incentives for investment in semiconductor manufacturing. These provisions are not expected to have a material impact on the Company’s results of operations or financial position. The Company did not have any uncertain tax benefits as of September 30, 2023 and December 31, 2022. For the three and nine months ended September 30, 2023 and 2022, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the condensed consolidated statement of operations. | 13. Income Taxes The income tax expense (benefit) consisted of the following ( in thousands Year Ended 2022 2021 Current income taxes: Federal $ 2,746 $ — State and local 3,045 2,399 Total current tax 5,791 2,399 Deferred income taxes: Federal 25,704 (54,210 ) State and local 1,597 (6,762 ) Total deferred tax 27,301 (60,972 ) Income tax (benefit) expense $ 33,092 $ (58,573 ) The effective tax rates on continuing operations for the years ended December 31, 2022 and 2021, were 24.3% and (47.8)% respectively. The tax rate reconciliation is as follows ( in thousands Years Ended 2022 2021 Income before income taxes . $ 139,357 $ 122,390 Tax at Federal Statutory Rate . . . . . . . . . . . . . . . . . . . . . . 29,265 25,702 State, Net of Federal Benefit . 3,664 (761 ) Non-deductible 163 93 Change in valuation allowance — (83,607 ) Income tax (benefit) expense $ 33,092 $ (58,573 ) The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the deferred tax assets and liabilities are as follows ( in thousands Years Ended December 31, 2022 2021 Deferred tax assets: Net operating losses $ 450,543 $ 433,804 Interest expense carryforward 31,285 — Other assets — 233 Total gross deferred tax assets 481,828 434,037 Valuation allowance — — Total deferred tax assets, net of valuation allowance 481,828 434,037 Deferred tax liabilities: Investment in subsidiaries (538,983 ) (463,676 ) Total gross deferred tax liabilities (538,983 ) (463,676 ) Net deferred tax liabilities $ (57,155 ) $ (29,639 ) Deferred Tax Assets and Liabilities The Company regularly reviews its deferred tax assets, including net operating loss carryovers, for recoverability, and a valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset may not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences are deductible. In assessing the need for a valuation allowance, the Company makes estimates and assumptions regarding projected future taxable income, its ability to carry back operating losses to prior periods, the reversal of deferred tax liabilities and the implementation of tax planning strategies. Based on our cumulative earnings history and forecasted future sources of taxable income, the Company determined it is more-likely-than-not The Company’s ability to utilize its net operating loss carryforwards and other tax attributes to reduce future taxable income is subject to potential annual limitations under Internal Revenue Code Section 382 and Section 383 and similar state provisions. These limitations are applicable to the extent certain ownership changes by 5% shareholders and stock issuances by the Company during any three-year period result in a cumulative change of more than 50% in the beneficial ownership of the Company. The Company has assessed the provisions of Section 382 and Section 383 and determined there to be no impact to the Company’s deferred tax balances. Federal and State Net Operating Losses We have gross federal tax net operating loss carryforwards of $2.0 billion which have an indefinite life. We have gross post-apportionment state net operating loss carryforwards of $498.0 million which have various expiration dates through 2042. Uncertain Tax Benefits The Company evaluates its tax positions and recognizes only tax benefits that, more likely than not, will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax position is measured at the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. The Company did not have any uncertain tax benefits as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts had been recognized in the consolidated statement of operations. As of December 31, 2022, tax years 2018 and forward are subject to examination by the tax authorities in the U.S. No income tax returns are currently under examination. |
Defined Contribution Plan
Defined Contribution Plan | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Defined Contribution Plan [Abstract] | ||
Defined Contribution Plan | 17. Defined Contribution Plan The Company maintains a defined contribution savings plan for its employees. The Company contributed $0.7 million and $2.3 million to the plan for the three and nine months ended September 30, 2023, respectively. The Company contributed $0.7 million and $2.1 million to the plan for the three and nine months ended September 30, 2022, respectively. | 14. Defined Contribution Plan The Company maintains a defined contribution savings plan for its employees. The Company contributed $2.9 million and $2.7 million to the plan for the years ended December 31, 2022 and 2021, respectively. |
Compensation Plans
Compensation Plans | 12 Months Ended |
Dec. 31, 2022 | |
Compensation Related Costs [Abstract] | |
Compensation Plans | 15. Compensation Plans Deferred Compensation Plan The Company contributes to a deferred compensation plan that was established to offer added cash basis incentives for the retention of key employees. On January 1, 2021, cash awards under the Company’s 2020 Long-Term Incentive Plan (the “Plan”) were granted. In addition, the Company approved an additional grant for its 2021 calendar year. The awards were granted to eligible participating employees. The vesting of the granted long term incentive awards is time-based and the only remaining condition is contingent on providing subsequent services as an employee at the time of vesting. The awards vest, and pay out in cash ratably (25%) on January 1st of each year, over a four-year period, during which time the awards are generally forfeitable in the event of employment termination other than for death, disability, or qualifying retirement. Based on an expected probability of future payments, the Company’s obligations related to the plan totaled $5.4 million and $6.8 million as of December 31, 2022 and 2021, respectively. The non-current |
Segments
Segments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Segment Reporting [Abstract] | ||
Segments | 18. Segments The Company manages its business through two operating segments: Compression Operations and Other Servi ce The Company evaluates performance and allocates resources based on the gross margin of each segment, which includes revenues directly attributable to the specific segment and all costs of service directly attributable to the specific segment, which includes cost of operations and depreciation and amortization. Depreciation and amortization for the Compression Operations segment was $46.1 million and $136.4 million for the three and nine months ended September 30, 2023 respectively. Depreciation and amortization for the Compression Operations segment was $44.1 million and $129.9 million for the three and nine months ended September 30, 2022 respectively. Revenue includes only sales to external customers. The following table represents financial metrics by segment ( in thousands Compression Operations Other Services Total Three Months Ended September 30, 2023 Revenue $ 186,673 $ 44,310 $ 230,983 Gross margin 75,116 5,490 80,606 Total assets 3,213,764 30,476 3,244,240 Capital expenditures 51,539 — 51,539 Three Months Ended September 30, 2022 Revenue $ 163,662 $ 18,983 $ 182,645 Gross margin 63,679 4,946 68,625 Total assets 3,133,249 3,715 3,136,964 Capital expenditures 53,755 — 53,755 Nine Months Ended September 30, 2023 Revenue $ 545,989 $ 78,412 $ 624,401 Gross margin 216,318 12,505 228,823 Total assets 3,213,764 30,476 3,244,240 Capital expenditures 145,573 — 145,573 Nine Months Ended September 30, 2022 Revenue $ 483,965 $ 44,172 $ 528,137 Gross margin 186,907 9,534 196,441 Total assets 3,133,249 3,715 3,136,964 Capital expenditures 199,707 — 199,707 The following table reconciles total gross margin to income before income taxes ( in thousands Three Months Ended Nine Months Ended 2023 2022 2023 2022 Total gross margin $ 80,606 $ 68,625 $ 228,823 $ 196,441 Selling, general and administrative expenses (19,648 ) (11,190 ) (46,171 ) (32,760 ) Gain on sale of capital assets — 818 721 825 Interest expense, net (39,710 ) (49,859 ) (182,030 ) (104,616 ) Loss on extinguishment of debt (6,757 ) — (6,757 ) — Gain on derivatives 15,141 51,862 42,080 76,972 Other (expense) income 38 (19 ) 39 (10 ) Income before income taxes $ 29,670 $ 60,237 $ 36,705 $ 136,852 | 16. Segments The Company manages its business through two operating segments: Compression Operations and Other Services. Compression Operations consists of operating Company and customer-owned compression infrastructure for its customers, pursuant to fixed-revenue contracts to enable the production, gathering and transportation of natural gas and oil. Other Services consists of a full range of contract services to support the needs of customers, including station construction, maintenance and overhaul, and other ancillary time and material based offerings. The chief operating decision maker evaluates performance and allocates resources based on the gross margin of each segment, which includes revenues directly attributable to the specific segment and all costs of service directly attributable to the specific segment, which includes cost of operations and depreciation and amortization. Depreciation and amortization for the Compression Operations segment was $174,463 and $160,045 for the years ended December 31, 2022 and 2021, respectively. Revenue includes only sales to external customers. The following table represents financial metrics by segment ( in thousands Compression Other Total 2022 Revenue $ 654,957 $ 52,956 $ 707,913 Gross Margin 254,779 11,320 266,099 Total assets 3,184,286 21,254 3,205,540 Capital expenditures 259,349 — 259,349 2021 Revenue $ 583,070 $ 23,305 $ 606,375 Gross Margin 230,212 5,941 236,153 Total assets 3,004,608 6,991 3,011,599 Capital expenditures 201,934 — 201,934 The following table reconciles total gross margin to income before income taxes ( in thousands Years Ended December 31 2022 2021 Total Gross Margin $ 266,099 $ 236,153 Selling, general and administrative expenses (44,882 ) (37,665 ) Long lived asset impairment — (9,107 ) Gain / (loss) on sale of fixed assets 874 (426 ) Interest expense, net (165,867 ) (84,640 ) Gain on derivatives 83,116 18,174 Other income (expense) 17 (99 ) Income before income taxes $ 139,357 $ 122,390 |
Earnings Per Share of Common St
Earnings Per Share of Common Stock | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share of Common Stock | 19. Earnings Per Share of Common Stock Basic earnings per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock is computed by using the weighted average shares of common stock outstanding, including the dilutive effect of restricted shares based on an average share price during the period. For the three and nine months ended September 30, 2023 and September 30, 2022, there were no anti-dilutive shares, respectively. The computations of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and September 30, 2022 are as follows: Three Months Ended Nine Months Ended (in thousands, except share and per share data) 2023 2022 2023 2022 Net income $ 21,766 $ 45,900 $ 26,940 $ 104,356 Basic weighted average shares of common stock 76,731,868 59,000,000 64,954,244 59,000,000 Effect of dilutive securities 167,615 — 167,615 — Diluted weighted average shares of common stock 76,899,483 59,000,000 65,121,859 59,000,000 Basic earnings per share of common stock $ 0.28 $ 0.78 $ 0.41 $ 1.77 Diluted earnings per share of common stock $ 0.28 $ 0.78 $ 0.41 $ 1.77 |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 20. Subsequent Events The following event occurred subsequent to the date the condensed financial statements were available to be issued: On October 24, 2023 the Company’s board of directors declared an initial cash dividend of $0.38 per share of common stock, or $1.52 per share of common stock on an annualized basis, for the third quarter of 2023. The cash dividend of approximately $29 million will be paid on November 10, 2023 to all stockholders of record as of the close of business on November 3, 2023. | 17. Subsequent Events The Company evaluates events and transactions occurring after the consolidated balance sheet date, but before the consolidated financial statements are available to be issued. The Company has evaluated such events and transactions through March 6, 2023, the date the consolidated financial statements were available for issuance. |
Parent Company Information
Parent Company Information | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Information | 18. Parent Company Information Kodiak Gas Services, Inc. (Parent Company Only) Condensed Balance Sheets (in thousands, except per share data) As of December 31, 2022 2021 Assets Current Assets Cash and cash equivalents $ 10,990 $ 24,000 Total current assets 10,990 24,000 Investment in Subsidiaries 31,780 856,780 Total assets $ 42,770 $ 880,780 Liabilities and Stockholders’ Equity Accounts payable $ 103 $ 94 Accrued liabilities 67 34 Total liabilities 170 128 Stockholders’ Equity: Common shares, $ 0.01 par value; 1,000 common shares authorized, 100 common shares issued and outstanding as of December 31, 2022 and 2021 1 1 Additional paid-in 42,780 880,780 Accumulated deficit (181 ) (129 ) Total stockholders’ equity 42,600 880,652 Total liabilities and stockholders’ equity $ 42,770 $ 880,780 Kodiak Gas Services, Inc. (Parent Company Only) Condensed Statements of Operations (in thousands) For Years Ended December 31, 2022 2021 Selling, general and administrative expenses $ 52 $ 73 Total operating expenses 52 73 Loss from operations (52 ) (73 ) Net loss $ (52 ) $ (73 ) Kodiak Gas Services, Inc. (Parent Company Only) Condensed Statements of Cash Flows (in thousands) For Years Ended 2022 2021 Cash flows from operating activities: Net loss $ (52 ) $ (73 ) Changes in operating assets and liabilities Accrued liabilities 9 34 Accounts payable 33 39 Net cash used in operating activities (10 ) — Cash flows from investing activities: Proceeds from investment in subsidiaries 825,000 — Net cash provided by investment activities 825,000 — Cash flows from financing activities: Contribution from parent — 24,000 Distribution to parent (838,000 ) — Net cash (used in) provided by financing activities (838,000 ) 24,000 Net (decrease) increase in cash and cash equivalents (13,010 ) 24,000 Cash and cash equivalents - beginning of year 24,000 — Cash and cash equivalents - end of year $ 10,990 $ 24,000 Basis of Presentation These condensed financial statements of Kodiak Gas Services, Inc. (the “Company”, “Kodiak” or “KGS”) (Parent Company Only) have been prepared in accordance with Rule 12-04 S-X, 5-04, S-X. These condensed Parent Company Only financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes thereto. In May 2022, the Company completed a return of capital of $838 million to the Parent Company. The Parent Company contributed $24 million to the Company in 2021. Dividends Paid No cash dividends were paid for the years ended December 31, 2022 and 2021. |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements of the Company have been prepared on the accrual basis using accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. | Basis of Presentation and Consolidation The accompanying consolidated financial statements of the Company have been prepared on the accrual basis using principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. These consolidated financial statements include the accounts of Kodiak Gas Services, Inc. and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. |
Consolidation | These unaudited condensed consolidated financial statements include the accounts of Kodiak and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. | |
Recently Adopted Accounting Pronouncements | In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (“Topic 326”): Measurement of Credit Losses on Financial Instruments held-to-maturity | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, 2018-11, Codification Improvements to Topic 842, Leases The Company adopted these lease accounting standards effective January 1, 2022, using the modified retrospective transition method and elected the Comparatives Under 840 Option in which prior comparative information has not been recast and continues to be reported under the accounting standards in effect for those periods. Upon adoption, the Company elected the package of practical expedients to not reassess whether existing contracts contained a lease, the lease classification of existing leases and initial direct cost for existing leases. In addition to the package of practical expedients, the Company elected not to capitalize amounts pertaining to leases with terms less than twelve months, to use the portfolio approach to determine discount rates, and not to separate non-lease right-of-use ASC 842 Leases also provides a practical expedient, elected by class of underlying asset, to not separate lease and nonlease components and instead account for those components as a single component if certain conditions are met. ASC 842 Leases also provides clarification for lessors on whether ASC 842 Leases or ASC Topic 606 Revenue from Contracts with Customers (“ASC 606 Revenue”) is applicable to the combined component based on determination of the predominant component. The Company concluded that for the Company’s contract compression services, in which the Company is a lessor, the services non-lease |
Revenue Recognition | Compression Operations for Company-owned, as well as customer-owned, compressors are generally satisfied over time as services are rendered based upon specific performance criteria identified in the applicable contract. The service performed is substantially the same during each period of the contract, and revenues are therefore recognized on a straight-line, time-based method over the contract term as the customer simultaneously receives and consumes the benefits provided by the service. If variable consideration exists, it is allocated to the distinct monthly service within the series to which such variable consideration relates. The Company has elected to apply the invoicing practical expedient to recognize revenue for such variable consideration, as the invoice corresponds to the value transferred to the customer based on the Company’s performance completed to date. Service revenue earned primarily on freight and crane charges that are directly reimbursable by the Company’s customers is recognized at the point in time the service is provided and control is transferred to the customer. At such time, the customer has the ability to direct the use of the benefits of such service after the performance obligation is satisfied. The amount of consideration the Company receives and revenue the Company recognizes is based upon the invoice amount. There are typically no material obligations for returns, refunds, or warranties. The Company’s standard contracts do not usually include non-cash For most of the Company’s construction contracts, the Company integrates a significant set of tasks and components into a single contract for its customers. Hence, the entire contract is accounted for as one performance obligation. The Company recognizes revenue over time as the Company performance creates or enhances an asset that the customer controls. For construction services, revenue is recognized using an input method. Measure of the progress towards satisfaction of the performance obligation is based on the actual amount of labor and material costs incurred. The amount of the transaction price recognized as revenue is determined by multiplying the transaction price by the ratio of actual costs incurred to total estimated costs expected for the construction services. Judgment is involved in the estimation of the progress toward completion. Any adjustments to the measure of the progress toward completion is accounted for on a prospective basis. Changes to the scope of service are recognized as an adjustment to the transaction price in the period in which the change occurs. Services provided based on time spent, parts and/or materials is generally short-term in nature and labor rates and parts pricing is agreed upon prior to commencing the service. As revenue is recognized when time passes, this revenue is recognized at the point in time when the service is rendered. | |
Long-Lived and Other Asset Impairment | Long-lived assets, including property, plant, and equipment, and other finite-lived identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances, including the removal of compressors from the active fleet, indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in the Company’s business strategy, among others. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to estimated future undiscounted net cash flows expected to be generated by the asset. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its estimated future discounted net cash flows | |
Derivative Instruments | The Company has not designated any derivative instruments as hedges for accounting purposes and does not enter into such instruments for speculative or trading purposes. The Company’s derivative instruments are recognized on the unaudited condensed consolidated balance sheets at fair value and classified as current or long-term depending on the maturity date of the derivative instrument and whether the net carrying value is in a net asset or net liability position. Realized and unrealized gains and losses associated with the derivative instruments are recognized in gain on derivative instrument within the unaudited condensed consolidated statements of operations. | Derivative Instruments In accordance with ASC Topic 815, Derivatives and Hedging non-current |
Segment Information | Segment Information The Company operates in two business segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker, who is the Company’s chief executive officer (“CEO”), in deciding how to allocate resources and assessing performance. The Company has identified the operating segments as Compression Operations and Other Services. The Company’s chief operating decision maker allocates resources and assesses performance of the two operating segments based upon discrete financial information at the operating segment level. The Company manages its business through two operating segments: Compression Operations and Other Services. Compression Operations consists of operating Company-owned and customer-owned compression infrastructure for its customers, pursuant to fixed-revenue contracts to enable the production, gathering and transportation of natural gas and oil. Other Services consists of a full range of contract services to support the needs of our customers including station construction, maintenance and overhaul, and other ancillary time and material-based offerings. See Note 16 (“Segments”) to our Consolidated Financial Statements. | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions used in preparing the accompanying consolidated financial statements. Significant estimates and assumptions that impact these consolidated financial statements relate to, among other things, allowance for doubtful accounts, estimates of net realizable value on excess obsolete inventory, capitalized installation costs and commissioning costs, fair value of derivative instruments, estimates of cost to complete on revenue contracts with customers, and useful lives of property, plant and equipment. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. | |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when obligations under the terms of a contract with customer are satisfied. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services to our customers. See Note 3 (“Revenue Recognition”) for more detailed information about revenue recognition for the years ended December 31, 2022 and 2021. | |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are recorded at their outstanding balances, net of any allowances for doubtful accounts, if determined necessary. In determining the allowance for doubtful accounts, the Company considers the length of time receivable balances have been outstanding, current economic conditions, and customer-specific information. Accounts deemed uncollectible are applied against the allowance for doubtful accounts. Recoveries of accounts receivable previously written off are recorded when received. There was $0.9 million and $1.0 million in allowance for doubtful accounts at December 31, 2022 and 2021, respectively. | |
Inventories | Inventories Inventories consist of non-serialized non-serialized Inventories consist of the following ( in thousands As of December 31, 2022 2021 Non-serialized $ 61,082 $ 44,308 Serialized parts 11,073 4,045 Total inventories $ 72,155 $ 48,353 | |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment acquired in connection with business combinations are recorded at fair value as of the date of acquisition. All other additions of property, plant and equipment, which primarily consist of compression equipment, are recorded at cost. The Company depreciates the cost of property, plant and equipment using the straight-line method over the estimated useful lives. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss are reflected in the accompanying consolidated statements of operations for the period. The cost of additions and improvements that extend the useful lives of property, plant and equipment beyond its original life are capitalized. Routine maintenance and repair items are charged to current operations. The Company uses estimates to capitalize installation costs associated with the transport, installation, and commissioning of each compressor unit. Costs associated with these estimates include all direct costs required to get the unit in service for its intended use such as labor, parts, materials, and any other services that are unique in nature to each individual compressor unit. Capitalized installation costs are depreciated over the life of the agreement with the customer. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including property, plant, and equipment, and other finite-lived identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances, including the removal of compressors from active fleet, indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in the Company’s business strategy, among others. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to estimated future undiscounted net cash flows expected to be generated by the asset. Impairment losses are recognized in the period in which the impairment occurs and represent the excess of the asset carrying value over its estimated future discounted net cash flows. No impairment was recorded for the year ended December 31, 2022. In December 2021, certain compression equipment was identified as not being part of the Company’s ongoing operations. As such, a recoverability assessment was performed, and fair value was assessed using a combination of a market and cost approach. Based on the assessed fair value an impairment expense of $9.1 million was recorded for the year end December 31, 2021. For the year ended December 31, 2022, no triggering event for any long-lived assets was identified. | |
Leases | Leases As a result of the Company’s adoption of ASC 842 Leases on January 1, 2022, the Company recorded an operating lease right-of-use right-of-use ROU lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. ROU lease assets also include any lease payments made and exclude lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Variable costs such as the Company’s proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance are not included in the lease liability and are recognized in the period in which they are incurred. For short-term leases (leases that have terms of twelve months or less upon commencement), lease payments are recognized on a straight-line basis and no ROU assets are recorded. For certain equipment leases, such as office equipment, we have elected to account for the lease and non-lease As it relates to the Company’s compression operations service agreements, in which the Company is a lessor, the services nonlease component is predominant over the compression package lease component and therefore recognition of these agreements will continue to follow the ASC 606 Revenue guidance. Under previous guidance, no separation of lease and nonlease component is required, for either lessee or lessor. | |
Identifiable Intangible Assets, Net | Identifiable Intangible Assets, Net Identifiable intangible assets acquired in connection with business combinations are recorded at fair value as of the date of acquisition. Other intangible assets are recorded at cost. The cost of identifiable intangible assets with finite lives are amortized using the straight-line method over their estimated useful lives, which is the period over which the assets are expected to contribute directly or indirectly to future cash flows. The Company’s identifiable intangible assets consist of trade name and customer relationships. | |
Goodwill | Goodwill Goodwill represents the excess of acquisition consideration paid over the fair value of net assets and liabilities acquired. Goodwill is not amortized, but rather is reviewed for impairment on an annual basis (or more frequently if impairment indicators exist). The Company tests goodwill at the reporting unit level, which is the level for which there are distinct cash flows, products, capabilities and available financial information by first performing a qualitative assessment to determine if it is more likely than not that the carrying value of the entity exceeds its fair value. As of December 31, 2022 and 2021, the Company has two reporting units, however the entire goodwill balance was allocated to the Company’s Compression Operations reporting unit. The Company conducts an annual impairment test during the fourth quarter or more frequently if there are indicators that goodwill may be impaired. The Company first performs a qualitative assessment, and if based on this assessment, it may be more likely than not that goodwill may be impaired then the Company must determine the fair value of the reporting unit and compare it to the reporting unit’s carrying value. Factors utilized in the qualitative assessment include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and Company specific events. Fair value of the reporting unit is determined based on the present value of estimated cash flows using available information regarding expected cash flows of each reporting unit, discount rates and the expected long-term cash flow growth rates. If the fair value of the reporting unit exceeds the carrying value, goodwill is not impaired, and no further testing is performed. The Company records impairment when the carrying value exceeds the fair value and to the extent there is remaining goodwill in the reporting unit under a one-step The Company performed a qualitative test and noted that there were no events or circumstances occurring that indicated that the fair value of the Compression Operations reporting unit may be below its carrying amount. No goodwill impairment was recorded for the years ended December 31, 2022 and 2021. Application of the goodwill impairment test requires judgments, including a qualitative assessment to determine whether there are any impairment indicators, and determining the fair value of the reporting unit if an impairment indicator is present. A number of significant assumptions and estimates are involved in the application of the income approach to forecast future cash flows, including revenue and operating income growth rates, discount rates and other factors. While we believe that our estimates of current value are reasonable, if actual results differ from the estimates and judgments used including such items as future cash flows and the volatility inherent in markets which we serve, impairment charges against the carrying value of those assets could be required in the future. | |
Earnings Per Share | Earnings Per Share Basic net income per share is computed by dividing net income attributable to common shareholders by the weighted-average number of common stock outstanding. Diluted net income per share is computed by dividing net income attributable to common stockholders by the Basic Weighted-Average Shares Outstanding plus all potential dilutive common shares outstanding during the period. However, the Company does not have any dilutive common shares outstanding during the years ended December 31, 2022 and 2021, respectively. | |
Deferred Financing Costs | Deferred Financing Costs Financing costs incurred related to debt issuance are deferred and amortized over the term of the related debt using a method that approximates the effective interest rate method. Unamortized debt issuance costs are recorded as a direct deduction from the carrying amount of the related loans on the consolidated balance sheets. Costs incurred in connection with revolving credit facilities are capitalized and amortized over the term of the loan. There were unamortized debt issuance costs of $34.2 million and $20.1 million at December 31, 2022 and 2021, respectively, which are being amortized over the terms of the ABL Facility and Term Loan. Amortization expense related to these costs of $13.7 million and $6.9 million for the years ended December 31, 2022 and 2021, respectively, are included in interest expense in the accompanying consolidated statements of operations. | |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and deferred tax liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the enactment date. Management is not aware of any changes in tax laws or rates that would have a material impact on our financial position, results of operations or cash flows. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning The Company applies a “more-likely-than-not” On March 27, 2020, former President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. It also appropriated funds for the Small Business Administration (“SBA”) Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. The Company examined the impact that the CARES Act may have on its business. The Company qualified for and put into practice deferment of the employer payable side of social security payments under the SBA Paycheck Protection Program totaling $1.7 million classified in accrued liabilities as of December 31, 2021. During 2022, the Company paid the outstanding amount of social security payments, presented on the consolidated balance sheets as accrued liabilities. The Company is unable to determine the impact future relief legislation will have on its financial condition, results of operation, or liquidity. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law. The IRA contains significant tax law changes, including a corporate alternative minimum tax (“CAMT”) of 15% on adjusted financial statement income for applicable corporations, and a 1% excise tax on stock repurchases after December 31, 2022. The IRA also extends certain federal tax credits and creates new tax credits to promote sustainability initiatives. The Company examined the IRA and determined that it did not have a material impact on the consolidated financial statements. The Company will continue to monitor this legislation as additional guidance is issued by the U.S. Treasury Department. | |
Fair Value Measurements | Fair Value Measurements The Company uses any of three valuation approaches to measure fair value: the market approach, the income approach, and the cost approach in determining the appropriate valuation methodologies based on the nature of the asset or liability being measured and the reliability of the inputs used in arriving at fair value. The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative instruments and long-term debt. The carrying amounts of cash and cash equivalents, accounts receivable, accrued liabilities, and accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of variable rate long- term debt is based upon the current market rates for debt with similar credit risk and maturity which approximates fair value. The Company records derivative instruments at fair value using level 2 inputs of the fair value hierarchy. The interest rate swaps and interest rate collar are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. See Note 8 (“Derivative Instruments”) for more details. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These fair value measurements incorporate nonperformance risk (i.e., the risk that an obligation will not be fulfilled) and credit risk. The Company follows the provisions of ASC 820, Fair Value Measurements non-financial non-recurring The inputs used in applying valuation techniques include assumptions that market participants would use in pricing the asset or liability (i.e., assumptions about risk). Inputs may be observable or unobservable. The Company uses observable inputs in the Company’s valuation techniques and classifies those inputs in accordance with the fair value hierarchy established by applicable accounting guidance, which prioritizes those inputs. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the valuation hierarchy are defined as follows: • Level 1 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities. • Level 2 – Other inputs that are observable directly or indirectly such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 – Unobservable inputs for which there is little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The fair value of debt and contingent consideration are considered Level 3 measurements. These fair value measurements are based on unobservable inputs. Debt includes the Asset Based Lending (ABL) facility and the Term Loan. The fair value estimate reflects the contractual terms of the purchase agreement (e.g., potential payment amounts, length of measurement periods, manner of calculating any amounts due) and utilizes assumptions with regard to future cash flows, probabilities of achieving such future cash flows and a discount rate. Depending on the contractual terms of the purchase agreement, the probability of achieving future cash flows of earnings generally represents the only significant unobservable input. The contingent consideration liability is measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. See fair value tables below (in thousands): As of December 31, 2022 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,720,019 $ 2,720,019 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,723,719 $ 2,723,719 As of December 31, 2021 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,845,122 $ 1,845,122 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,848,822 $ 1,848,822 | |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company’s assets that are potentially subject to concentrations of credit risk are cash and cash equivalents and trade accounts receivable. Cash balances are maintained in financial institutions which at times exceed federally insured limits. The Company monitors the financial condition of the financial institutions in which accounts are maintained and has not experienced any losses in such accounts. The accounts receivable of the Company are spread over a number of customers, a majority of which are operators and suppliers to the natural gas and oil industries. Major customers are defined as those individually comprising more than 10% of our revenues. For the year ended December 31, 2022, one customer comprised 13.0% of total revenues and all of these revenues were related to the Compression Operations segment. For the year ended December 31, 2021, two customers comprised 12.0% of total revenues each, and all of these revenues were related to the Compression Operations segment. | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, available-for In March 2020, the FASB issued ASU No. 2020-03, 2020-03”). 2020-03 2020-03 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Summary of Inventories | Inventories consist of the following ( in thousands As of September 30, As of December 31, Non-serialized $ 59,093 $ 61,082 Serialized parts 11,513 11,073 Total inventories $ 70,606 $ 72,155 | Inventories consist of the following ( in thousands As of December 31, 2022 2021 Non-serialized $ 61,082 $ 44,308 Serialized parts 11,073 4,045 Total inventories $ 72,155 $ 48,353 |
Schedule of Fair Value of Liabilities | See fair value tables below ( in thousands As on September 30, 2023 Level 1 Level 2 Level 3 Total Debt $ — $ — $ 1,747,912 $ 1,747,912 Contingent Consideration — — 3,673 3,673 Total $ — $ — $ 1,751,585 $ 1,751,585 As of December 31, 2022 Level 1 Level 2 Level 3 Total Debt $ — $ — $ 2,720,019 $ 2,720,019 Contingent Consideration — — 3,673 3,673 Total $ — $ — $ 2,723,692 $ 2,723,692 | See fair value tables below (in thousands): As of December 31, 2022 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,720,019 $ 2,720,019 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,723,719 $ 2,723,719 As of December 31, 2021 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,845,122 $ 1,845,122 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,848,822 $ 1,848,822 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Summary of Disaggregation of Revenue | The following table disaggregates the Company’s revenue by type and timing of provision of services or transfer of goods (in thousands) Three Months Ended 2023 2022 Services provided over time: Compression Operations $ 184,959 $ 162,063 Other Services 41,268 16,987 Total services provided over time 226,227 179,050 Services provided or goods transferred at a point in time: Compression Operations 1,714 1,599 Other Services 3,042 1,996 Total services provided or goods transferred at a point in time 4,756 3,595 Total revenue $ 230,983 $ 182,645 Nine Months Ended 2023 2022 Services provided over time: Compression Operations $ 539,576 $ 477,430 Other Services 69,543 39,757 Total services provided over time 609,119 517,187 Services provided or goods transferred at a point in time: Compression Operations 6,413 6,535 Other Services 8,869 4,415 Total services provided or goods transferred at a point in time 15,282 10,950 Total revenue $ 624,401 $ 528,137 | The following table disaggregates the Company’s revenue by type and timing of provision of services or transfer of goods (in thousands) Years Ended December 31, 2022 2021 Services provided over time: Compression Operations $ 646,281 $ 573,073 Other Services 47,220 18,773 Total services provided over time 693,501 591,846 Services provided or goods transferred at a point in time: Compression Operations 8,663 9,997 Other Services 5,749 4,532 Total services provided or goods transferred at a point in time 14,412 14,529 Total revenue $ 707,913 $ 606,375 |
Summary of Revenue Remaining Performance Obligations | The Company expects to recognize these remaining performance obligations as follows (in thousands) Remainder of 2024 2025 2026 2027 and Total Remaining performance obligations $ 162,915 $ 504,092 $ 241,526 $ 101,568 $ 54,906 $ 1,065,007 | The Company expects to recognize these remaining performance obligations as follows (in thousands) 2023 2024 2025 2026 2027 and Total Remaining performance obligations $ 471,091 $ 289,410 $ 153,944 $ 82,307 $ 45,599 $ 1,042,351 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Summary of Accounts Receivable, net | Accounts receivable, net consist of the following ( in thousands As of September 30, As of December 31, As of December 31, Accounts receivable $ 119,869 $ 98,500 $ 81,708 Allowance for credit losses 2,994 949 959 Accounts receivable, net $ 116,875 $ 97,551 $ 80,749 |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | ||
Summary of Inventories | Inventories consist of the following ( in thousands As of September 30, As of December 31, Non-serialized $ 59,093 $ 61,082 Serialized parts 11,513 11,073 Total inventories $ 70,606 $ 72,155 | Inventories consist of the following ( in thousands As of December 31, 2022 2021 Non-serialized $ 61,082 $ 44,308 Serialized parts 11,073 4,045 Total inventories $ 72,155 $ 48,353 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Summary of Property, Plant and Equipment, Net | Property, plant and equipment, net consist of the following ( in thousands As of September 30, As of December 31, Compression equipment $ 3,113,641 $ 2,973,599 Trailers and vehicles 9,239 7,193 Field equipment 18,385 15,501 Technology hardware and software 10,330 6,698 Leasehold improvements 4,209 1,947 Shipping containers 3,349 3,137 Furniture and fixtures 1,570 1,519 Finance lease 530 981 Land 20 — Total property and equipment, gross 3,161,273 3,010,575 Less: accumulated depreciation (650,163 ) (521,893 ) Property, plant and equipment, net $ 2,511,110 $ 2,488,682 | Property, plant and equipment, net consist of the following ( in thousands As of December 31, 2022 2021 Compression equipment $ 2,973,599 $ 2,731,638 Trailers and vehicles 7,193 6,516 Field equipment 15,501 11,417 Technology hardware and software 6,698 3,944 Leasehold improvements 1,947 1,772 Shipping containers 3,137 2,882 Furniture and fixtures 1,519 1,460 Other 981 1,541 Total property and equipment, gross 3,010,575 2,761,170 Less: accumulated depreciation (521,893 ) (361,556 ) Property, plant and equipment, net $ 2,488,682 $ 2,399,614 The estimated useful lives of assets are as follows: Estimated Useful Life Compression equipment 4-25 years Trailers and vehicles 5 years Field equipment 1-5 Technology hardware and software 3 years Leasehold improvements Shorter of remaining lease term or 5 years Shipping containers 4 years Furniture and fixtures 7 years Other Shorter of remaining lease term or estimated useful life |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Balance Sheet Information Related to Operating Leases | Balance sheet information related to the Company’s operating leases were as follows (in thousands) Classification For the year ended ROU assets, net Operating lease ROU assets, net $ 9,827 Lease liabilities: Current Accrued liabilities $ 3,090 Noncurrent Operating lease liabilities 6,754 Total lease liabilities $ 9,844 |
Schedule of Components of Total Lease Expense | The components of total lease expense are as follows (in thousands) For the year ended Operating lease cost $ 3,349 Variable lease cost — Short-term lease cost 337 Total lease cost $ 3,686 |
Schedule of Supplemental Information Related to the Company's Operating Leases | Supplemental information related to the Company’s operating leases were as follows: December 31, 2022 Weighted average remaining lease term (in years) 3.55 Weighted average discount rate 5.25 % |
Schedule of Supplemental Cash Flow Information Related to the Company's Operating Leases | Supplemental cash flow information related to the Company’s operating leases were as follows (in thousands) For the year ended Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 3,332 Operating ROU assets obtained in exchange for new lease liabilities $ 71 |
Schedule of Maturities of Operating Lease Liabilities, Associated With ROU Assets | Maturities of operating lease liabilities, associated with ROU assets, as of December 31, 2022, were as follows (in thousands) Operating Leases Years ended December 31, 2023 $ 3,517 2024 3,119 2025 1,995 2026 1,313 2027 801 Thereafter 27 Total lease payments 10,772 Less: Interest (928 ) Total lease liabilities $ 9,844 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2021, future minimum rentals under the non-cancellable (in thousands) Operating Leases Years ended December 31, 2022 $ 3,015 2023 2,165 2024 1,878 2025 1,116 2026 965 Thereafter 555 Total lease payments $ 9,694 |
Goodwill and Identifiable Int_2
Goodwill and Identifiable Intangible Assets, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Summary of the Company's Identifiable Intangible Assets | The Company’s identifiable intangible assets consist of the following as of September 30, 2023 and December 31, 2022 ( in thousands As of September 30, 2023 Original Accumulated Amortization Net Remaining Weighted Average Amortization Period (years) Trade name $ 13,000 $ (3,018 ) $ 9,982 15.4 Customer relationships 150,000 (34,725 ) 115,275 13.1 Total identifiable intangible assets $ 163,000 $ (37,743 ) $ 125,257 As of December 31, 2022 Original Accumulated Amortization Net Remaining Weighted Average Amortization Period (years) Trade name $ 13,000 $ (2,531 ) $ 10,469 16.1 Customer relationships 150,000 (28,107 ) 121,893 13.8 Total identifiable intangible assets $ 163,000 $ (30,638 ) $ 132,362 | The Company’s identifiable intangible assets consist of the following as of December 31, 2022 and 2021 ( in thousands As of December 31, 2022 Original Cost Accumulated Net Amount Remaining Weighted Trade name $ 13,000 $ (2,531 ) $ 10,469 16.1 Customer relationships 150,000 (28,107 ) 121,893 13.8 Total identifiable intangible assets $ 163,000 $ (30,638 ) $ 132,362 As of December 31, 2021 Original Cost Accumulated Net Amount Remaining Weighted Trade name $ 13,000 $ (1,881 ) $ 11,119 17.1 Customer relationships 150,000 (19,284 ) 130,716 14.8 Total identifiable intangible assets $ 163,000 $ (21,165 ) $ 141,835 |
Summary of Future Minimum Amortization Expense for Identified Intangible Assets | As of September 30, 2023, the following is a summary of future minimum amortization expense for identified intangible assets ( in thousands Amount Years ending December 31, Remainder of 2023 $ 2,368 2024 9,474 2025 9,474 2026 9,474 2027 9,474 Thereafter 84,993 Total $ 125,257 | At December 31, 2022, the following is a summary of future minimum amortization expense for identified intangible assets ( in thousands Amount Years ending December 31, 2023 $ 9,474 2024 9,474 2025 9,474 2026 9,474 2027 9,474 Thereafter 84,992 Total $ 132,362 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Schedule of Long-term Debt Instruments | Debt consists of the following (in thousands) As of September 30, As of December 31, ABL Facility $ 1,789,086 $ 1,754,224 Term Loan — 1,000,000 Total debt outstanding 1,789,086 2,754,224 Less: unamortized debt issuance cost (41,174 ) (34,205 ) Long-term debt, net of unamortized debt issuance cost $ 1,747,912 $ 2,720,019 | Debt consists of the following (in thousands) As of December 31, 2022 2021 ABL Facility $ 1,754,224 $ 1,465,234 Term Loan 1,000,000 400,000 Total debt outstanding 2,754,224 1,865,234 Less: current maturities — — Less: unamortized debt issuance cost (34,205 ) (20,112 ) Long-term debt, net of unamortized debt issuance cost $ 2,720,019 $ 1,845,122 |
Schedule of Maturities of Long-term Debt | As of September 30, 2023, the scheduled maturities, without consideration of potential mandatory prepayments, of the long-term debt were as follows ( in thousands Amount Years ended December 31, Remainder of 2023 $ — 2024 — 2025 — 2026 — 2027 — Thereafter 1,789,086 Total $ 1,789,086 | As of December 31, 2022, the scheduled maturities, without consideration of potential mandatory prepayments, of the long-term debt were as follows ( in thousands Amount Years ended December 31, 2023 $ — 2024 1,754,224 2025 — 2026 — 2027 1,000,000 Total $ 2,754,224 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Summary of Information Related to Notional Amount and Maturities Dates for Interest Rate Swaps | The table below summarizes information related to the notional amount and maturity dates for interest rate swaps at September 30, 2023: Notional Amount Maturities $125,000,000 12/4/2024 $225,000,000 12/5/2024 $200,000,000 6/14/2025 $125,000,000 12/6/2025 $175,000,000 6/14/2026 $125,000,000 6/22/2026 $125,000,000 12/6/2026 $75,000,000 5/18/2027 $100,000,000 5/19/2027 $200,000,000 5/19/2027 $125,000,000 12/6/2027 | The table below summarizes information related to the notional amount and maturities dates for interest rate swaps at December 31, 2022: Notional Amount Maturities $100,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/14/2023 $100,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/4/2024 $375,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12/4/2024 $225,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12/5/2024 $200,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/14/2025 $175,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/14/2026 $125,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6/22/2026 $75,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/18/2027 $100,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/19/2027 $200,000,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5/29/2027 |
Summary of Summarized Information Related to the Collar Agreements Maturing | The following table presents summarized information related to the collar agreements maturing in 2024: Notional Amount Ceiling $ 200,000,000 Floor $ 200,000,000 | |
Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables set forth the Company’s assets that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy and classification of the Company’s derivative instruments not designated as hedging instruments on the accompanying condensed consolidated balance sheets ( in thousands As of September 30, 2023 Level 1 Level 2 Level 3 Total Current assets: Interest rate swaps $ — $ — $ — $ — Total current assets $ — $ — $ — $ — Non-current Interest rate swaps $ — $ 51,790 $ — $ 51,790 Total non-current $ — $ 51,790 $ — $ 51,790 Total $ — $ 51,790 $ — $ 51,790 As of December 31, 2022 Level 1 Level 2 Level 3 Total Current assets: Interest rate swaps $ — $ 823 $ — $ 823 Total current assets $ — $ 823 $ — $ 823 Non-current Interest rate swaps $ — $ 48,955 $ — $ 48,955 Interest rate collars — 15,562 — 15,562 Total non-current $ — $ 64,517 $ — $ 64,517 Total $ — $ 65,340 $ — $ 65,340 | The following tables set forth the Company’s assets and liabilities that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy and classification of the Company’s derivative instrument not designated as hedging instruments on the accompanying consolidated balance sheets ( in thousands As of December 31, 2022 Level 1 Level 2 Level 3 Total Current assets: Interest rate swaps $ — $ 823 $ — $ 823 Non-current Interest rate swaps $ — $ 48,955 $ — $ 48,955 Interest rate collars — 15,562 — 15,562 Total $ — $ 65,340 $ — $ 65,340 As of December 31, 2021 Level 1 Level 2 Level 3 Total Current liabilities: Interest rate swaps $ — $ (398 ) $ — $ (398 ) Non-current Interest rate swaps $ — $ (13,723 ) $ — $ (13,723 ) Interest rate collars — (7,902 ) — (7,902 ) Total $ — $ (22,023 ) $ — $ (22,023 ) |
Summary of Effects of Company's Derivative Instruments | The following table summarizes the effects of the Company’s derivative instruments in the condensed consolidated statements of operations ( in thousands Derivative Instruments Not Designated as Hedging Instrument Location of Gain Recognized Three Months Ended 2023 2022 Interest rate swaps Gain on derivatives $ 15,141 $ 44,809 Interest rate collars Gain on derivatives — 7,053 Total gain on derivative $ 15,141 $ 51,862 Derivative Instruments Not Designated as Hedging Instrument Location of Gain (Loss) Nine Months Ended 2023 2022 Interest rate swaps Gain on derivatives $ 42,649 $ 54,796 Interest rate collars Gain (loss) on derivatives (569 ) 22,176 Total gain on derivative $ 42,080 $ 76,972 | The following table summarizes the effects of the Company’s derivative instruments in the consolidated statements of operations (in thousands): Derivative Instruments Not Designated as Hedging Instrument Location of Gain Recognized Years Ended 2022 2021 Interest rate swaps Gain on derivatives $ 59,592 $ 8,771 Interest rate collars Gain on derivatives 23,525 9,403 Total $ 83,116 $ 18,174 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Schedule of Fair Value of Liabilities | See fair value tables below ( in thousands As on September 30, 2023 Level 1 Level 2 Level 3 Total Debt $ — $ — $ 1,747,912 $ 1,747,912 Contingent Consideration — — 3,673 3,673 Total $ — $ — $ 1,751,585 $ 1,751,585 As of December 31, 2022 Level 1 Level 2 Level 3 Total Debt $ — $ — $ 2,720,019 $ 2,720,019 Contingent Consideration — — 3,673 3,673 Total $ — $ — $ 2,723,692 $ 2,723,692 | See fair value tables below (in thousands): As of December 31, 2022 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,720,019 $ 2,720,019 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 2,723,719 $ 2,723,719 As of December 31, 2021 Level 1 Level 2 Level 3 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,845,122 $ 1,845,122 Contingent Consideration . . . . . . . . . . . . . . . . — — 3,700 3,700 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,848,822 $ 1,848,822 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Summary of Award Activity Under Omnibus Plan | The following table summarizes award activity under the Omnibus Plan for the nine-month period ending September 30, 2023: RSUs PSUs Number of RSUs Weighted-Average Price Number of PSUs Weighted-Average Price Outstanding at December 31, 2022 — — — — Granted 985,313 $ 16.00 311,875 $ 16.99 Vested or exercised — — — — Forfeited (20,679 ) — — — Outstanding at September 30, 2023 964,634 $ 16.00 311,875 $ 16.99 Restricted stock awards expected to vest 964,634 $ 16.00 311,875 $ 16.99 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following ( in thousands As of As of Prepaid insurance $ 3,733 $ 3,997 Prepaid rent 799 589 Deferred IPO issuance costs — 3,047 Deferred project costs 3,538 — Interest rate swap receivable 1,559 — Other 3,624 1,887 Total prepaid expenses and other current assets $ 13,253 $ 9,520 | The prepaid expenses and other current assets consisted of the following ( in thousands As of December 31, 2022 2021 Prepaid insurance $ 3,997 $ 4,104 Prepaid rent 589 606 Other 4,934 1,541 Total prepaid expenses and other current assets $ 9,520 $ 6,251 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Payables and Accruals [Abstract] | ||
Summary of Accrued Liabilities | Accrued liabilities consist of the following ( in thousands As of As of Sales tax liability $ 28,688 $ 27,820 Accrued interest 11,746 16,347 Accrued bonus 10,475 7,764 Accrued taxes 14,675 9,667 Accrued payroll 1,036 2,744 Accrued legal fee 1,823 1,906 Lease liabilities - current portion — 3,090 Contingent consideration 3,673 3,673 Accrued accounts payable 16,629 14,080 Accrued insurance 109 2,231 Station construction accrual 12,361 — Other 1,233 4,551 Total accrued liabilities $ 102,448 $ 93,873 | Accrued liabilities consisted of the following ( in thousands As of December 31, 2022 2021 Sales tax liability $ 27,820 $ 16,079 Accrued interest 16,347 6,237 Accrued accounts payable 14,080 6,144 Accrued taxes 9,667 4,713 Accrued bonus 7,764 7,105 Contingent consideration 3,673 3,673 Lease liabilities - current portion 3,090 — Accrued insurance 2,231 2,354 Accrued payroll 2,744 2,253 Social security deferral — 1,751 Other 6,457 4,557 Total accrued liabilities $ 93,873 $ 54,866 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Summary Of Components Of Income Tax Expense Benefit | The income tax expense (benefit) consisted of the following ( in thousands Year Ended 2022 2021 Current income taxes: Federal $ 2,746 $ — State and local 3,045 2,399 Total current tax 5,791 2,399 Deferred income taxes: Federal 25,704 (54,210 ) State and local 1,597 (6,762 ) Total deferred tax 27,301 (60,972 ) Income tax (benefit) expense $ 33,092 $ (58,573 ) |
Summary Of Effective Income Tax Rate Reconciliation | The effective tax rates on continuing operations for the years ended December 31, 2022 and 2021, were 24.3% and (47.8)% respectively. The tax rate reconciliation is as follows ( in thousands Years Ended 2022 2021 Income before income taxes . $ 139,357 $ 122,390 Tax at Federal Statutory Rate . . . . . . . . . . . . . . . . . . . . . . 29,265 25,702 State, Net of Federal Benefit . 3,664 (761 ) Non-deductible 163 93 Change in valuation allowance — (83,607 ) Income tax (benefit) expense $ 33,092 $ (58,573 ) |
Summary Of Components Of Deferred Tax Assets And Liabilities | The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the deferred tax assets and liabilities are as follows ( in thousands Years Ended December 31, 2022 2021 Deferred tax assets: Net operating losses $ 450,543 $ 433,804 Interest expense carryforward 31,285 — Other assets — 233 Total gross deferred tax assets 481,828 434,037 Valuation allowance — — Total deferred tax assets, net of valuation allowance 481,828 434,037 Deferred tax liabilities: Investment in subsidiaries (538,983 ) (463,676 ) Total gross deferred tax liabilities (538,983 ) (463,676 ) Net deferred tax liabilities $ (57,155 ) $ (29,639 ) |
Segments (Tables)
Segments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Segment Reporting [Abstract] | ||
Summary of Financial Metrics by Segment | The following table represents financial metrics by segment ( in thousands Compression Operations Other Services Total Three Months Ended September 30, 2023 Revenue $ 186,673 $ 44,310 $ 230,983 Gross margin 75,116 5,490 80,606 Total assets 3,213,764 30,476 3,244,240 Capital expenditures 51,539 — 51,539 Three Months Ended September 30, 2022 Revenue $ 163,662 $ 18,983 $ 182,645 Gross margin 63,679 4,946 68,625 Total assets 3,133,249 3,715 3,136,964 Capital expenditures 53,755 — 53,755 Nine Months Ended September 30, 2023 Revenue $ 545,989 $ 78,412 $ 624,401 Gross margin 216,318 12,505 228,823 Total assets 3,213,764 30,476 3,244,240 Capital expenditures 145,573 — 145,573 Nine Months Ended September 30, 2022 Revenue $ 483,965 $ 44,172 $ 528,137 Gross margin 186,907 9,534 196,441 Total assets 3,133,249 3,715 3,136,964 Capital expenditures 199,707 — 199,707 | The following table represents financial metrics by segment ( in thousands Compression Other Total 2022 Revenue $ 654,957 $ 52,956 $ 707,913 Gross Margin 254,779 11,320 266,099 Total assets 3,184,286 21,254 3,205,540 Capital expenditures 259,349 — 259,349 2021 Revenue $ 583,070 $ 23,305 $ 606,375 Gross Margin 230,212 5,941 236,153 Total assets 3,004,608 6,991 3,011,599 Capital expenditures 201,934 — 201,934 |
Summary of Total Gross Margin to Income Before Income Taxes | The following table reconciles total gross margin to income before income taxes ( in thousands Three Months Ended Nine Months Ended 2023 2022 2023 2022 Total gross margin $ 80,606 $ 68,625 $ 228,823 $ 196,441 Selling, general and administrative expenses (19,648 ) (11,190 ) (46,171 ) (32,760 ) Gain on sale of capital assets — 818 721 825 Interest expense, net (39,710 ) (49,859 ) (182,030 ) (104,616 ) Loss on extinguishment of debt (6,757 ) — (6,757 ) — Gain on derivatives 15,141 51,862 42,080 76,972 Other (expense) income 38 (19 ) 39 (10 ) Income before income taxes $ 29,670 $ 60,237 $ 36,705 $ 136,852 | The following table reconciles total gross margin to income before income taxes ( in thousands Years Ended December 31 2022 2021 Total Gross Margin $ 266,099 $ 236,153 Selling, general and administrative expenses (44,882 ) (37,665 ) Long lived asset impairment — (9,107 ) Gain / (loss) on sale of fixed assets 874 (426 ) Interest expense, net (165,867 ) (84,640 ) Gain on derivatives 83,116 18,174 Other income (expense) 17 (99 ) Income before income taxes $ 139,357 $ 122,390 |
Earnings Per Share of Common _2
Earnings Per Share of Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Share | The computations of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and September 30, 2022 are as follows: Three Months Ended Nine Months Ended (in thousands, except share and per share data) 2023 2022 2023 2022 Net income $ 21,766 $ 45,900 $ 26,940 $ 104,356 Basic weighted average shares of common stock 76,731,868 59,000,000 64,954,244 59,000,000 Effect of dilutive securities 167,615 — 167,615 — Diluted weighted average shares of common stock 76,899,483 59,000,000 65,121,859 59,000,000 Basic earnings per share of common stock $ 0.28 $ 0.78 $ 0.41 $ 1.77 Diluted earnings per share of common stock $ 0.28 $ 0.78 $ 0.41 $ 1.77 |
Parent Company Information (Tab
Parent Company Information (Tables) - Parent Company | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Income Statements, Captions [Line Items] | |
Summary of Condensed Balance Sheet | As of December 31, 2022 2021 Assets Current Assets Cash and cash equivalents $ 10,990 $ 24,000 Total current assets 10,990 24,000 Investment in Subsidiaries 31,780 856,780 Total assets $ 42,770 $ 880,780 Liabilities and Stockholders’ Equity Accounts payable $ 103 $ 94 Accrued liabilities 67 34 Total liabilities 170 128 Stockholders’ Equity: Common shares, $ 0.01 par value; 1,000 common shares authorized, 100 common shares issued and outstanding as of December 31, 2022 and 2021 1 1 Additional paid-in 42,780 880,780 Accumulated deficit (181 ) (129 ) Total stockholders’ equity 42,600 880,652 Total liabilities and stockholders’ equity $ 42,770 $ 880,780 |
Summary of Condensed Income Statement | For Years Ended December 31, 2022 2021 Selling, general and administrative expenses $ 52 $ 73 Total operating expenses 52 73 Loss from operations (52 ) (73 ) Net loss $ (52 ) $ (73 ) |
Summary of Condensed Cash Flow Statement | For Years Ended 2022 2021 Cash flows from operating activities: Net loss $ (52 ) $ (73 ) Changes in operating assets and liabilities Accrued liabilities 9 34 Accounts payable 33 39 Net cash used in operating activities (10 ) — Cash flows from investing activities: Proceeds from investment in subsidiaries 825,000 — Net cash provided by investment activities 825,000 — Cash flows from financing activities: Contribution from parent — 24,000 Distribution to parent (838,000 ) — Net cash (used in) provided by financing activities (838,000 ) 24,000 Net (decrease) increase in cash and cash equivalents (13,010 ) 24,000 Cash and cash equivalents - beginning of year 24,000 — Cash and cash equivalents - end of year $ 10,990 $ 24,000 |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||||
Jul. 13, 2023 USD ($) $ / shares shares | Jul. 03, 2023 USD ($) $ / shares shares | Jun. 20, 2023 shares | Sep. 30, 2023 USD ($) Segment shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 Segment shares | Dec. 31, 2021 shares | |
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of operating segments | Segment | 2 | 2 | |||||
Stock split ratio | 590,000 | ||||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | 1,000 | |||
Proceeds from initial public offering, net of underwriter discounts | $ | $ 230,800 | $ 277,840 | $ 0 | ||||
Common stock, shares issued (in shares) | 77,400,000 | 59,000,000 | 100 | ||||
Common stock, shares outstanding (in shares) | 77,400,000 | 59,000,000 | 100 | ||||
Kodiak Holdings | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock issued during period as a result of the stock split (in shares) | 59,000,000 | ||||||
IPO | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Shares issued and sold (in shares) | 16,000,000 | ||||||
Per share price (in dollars per share) | $ / shares | $ 16 | ||||||
Proceeds from issuance of common stock | $ | $ 230,800 | ||||||
Over-Allotment Option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Shares issued and sold (in shares) | 2,400,000 | ||||||
Common stock, shares issued (in shares) | 77,400,000 | ||||||
Common stock, shares outstanding (in shares) | 77,400,000 | ||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 16 | ||||||
Proceeds from issuance of common stock | $ | $ 36,200 | ||||||
Parent Company | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Percentage of ownership held before initial public offering | 100% | ||||||
Common stock, shares authorized (in shares) | 1,000 | 1,000 | |||||
Common stock, shares issued (in shares) | 100 | 100 | |||||
Common stock, shares outstanding (in shares) | 100 | 100 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Customers Segment Units | Dec. 31, 2021 USD ($) Customers Units | Aug. 16, 2022 | Jan. 01, 2022 USD ($) | |
Product Information [Line Items] | ||||||||
Number of operating segments | Segment | 2 | 2 | ||||||
Accounts receivable, allowance for doubtful accounts | $ 2,994 | $ 2,994 | $ 949 | $ 959 | ||||
Asset impairment charges | 0 | $ 0 | 0 | $ 0 | $ 0 | $ 9,107 | ||
Number of reporting units | Units | 2 | 2 | ||||||
Goodwill impairment | $ 0 | $ 0 | ||||||
Debt Issuance costs, net | 41,174 | 41,174 | 34,205 | 20,112 | ||||
Amortization of debt issuance costs | 200 | $ 4,300 | 11,260 | $ 9,453 | 13,727 | 6,944 | ||
Other employee-related liabilities | 1,700 | |||||||
Corporate alternative minimum tax | 15% | |||||||
Excise tax | 1% | |||||||
Operating right-of-use ("ROU") lease asset | $ 33,453 | $ 33,453 | $ 9,827 | $ 0 | $ 11,400 | |||
Finance lease ROU assets | 0 | |||||||
Finance lease liabilities | $ 0 | |||||||
Revenue Benchmark | Customer Concentration Risk | ||||||||
Product Information [Line Items] | ||||||||
Number of customer | Customers | 1 | 2 | ||||||
Revenue Benchmark | Customer Concentration Risk | Customer | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk, percentage | 13% | 12% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | |||
Total inventories | $ 70,606 | $ 72,155 | $ 48,353 |
Non-serialized parts | |||
Inventory [Line Items] | |||
Total inventories | 59,093 | 61,082 | 44,308 |
Serialized parts | |||
Inventory [Line Items] | |||
Total inventories | $ 11,513 | $ 11,073 | $ 4,045 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Fair Value of Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | $ 1,751,585 | $ 2,723,692 | |
Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 2,723,719 | $ 1,848,822 | |
Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 1,747,912 | 2,720,019 | |
Debt | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 2,720,019 | 1,845,122 | |
Contingent Consideration | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 3,673 | 3,673 | |
Contingent Consideration | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 3,700 | 3,700 | |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 1 | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 1 | Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 1 | Debt | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 1 | Contingent Consideration | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 1 | Contingent Consideration | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 2 | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 2 | Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 2 | Debt | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 2 | Contingent Consideration | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 2 | Contingent Consideration | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 0 | 0 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 1,751,585 | 2,723,692 | |
Level 3 | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 2,723,719 | 1,848,822 | |
Level 3 | Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 1,747,912 | 2,720,019 | |
Level 3 | Debt | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | 2,720,019 | 1,845,122 | |
Level 3 | Contingent Consideration | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | $ 3,673 | 3,673 | |
Level 3 | Contingent Consideration | Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities fair value disclosure | $ 3,700 | $ 3,700 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | $ 230,983 | $ 182,645 | $ 624,401 | $ 528,137 | $ 707,913 | $ 606,375 |
Compression Operations | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | 186,673 | 163,662 | 545,989 | 483,965 | 654,957 | 583,070 |
Other Services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | 44,310 | 18,983 | 78,412 | 44,172 | 52,956 | 23,305 |
Total services provided over time | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | 226,227 | 179,050 | 609,119 | 517,187 | 693,501 | 591,846 |
Total services provided over time | Compression Operations | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | 184,959 | 162,063 | 539,576 | 477,430 | 646,281 | 573,073 |
Total services provided over time | Other Services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | 41,268 | 16,987 | 69,543 | 39,757 | 47,220 | 18,773 |
Total services provided or goods transferred at a point in time | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | 4,756 | 3,595 | 15,282 | 10,950 | 14,412 | 14,529 |
Total services provided or goods transferred at a point in time | Compression Operations | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | 1,714 | 1,599 | 6,413 | 6,535 | 8,663 | 9,997 |
Total services provided or goods transferred at a point in time | Other Services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenues | $ 3,042 | $ 1,996 | $ 8,869 | $ 4,415 | $ 5,749 | $ 4,532 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2023 | Jan. 01, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||||
Contract assets | $ 9,608 | $ 3,555 | $ 0 | $ 0 | ||
Deferred revenue | 57,100 | 51,200 | ||||
Contract liabilities | 71,917 | 57,109 | 51,204 | $ 57,100 | $ 51,200 | |
Transaction price allocated to unsatisfied performance obligations | 1,100,000 | 1,042,400 | ||||
Revenue recognized | $ 0 | $ 0 | $ 51,200 | $ 43,600 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Revenue Remaining Performance Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 1,065,007 | $ 1,042,351 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | 162,915 | 471,091 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | 504,092 | 289,410 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | 241,526 | 153,944 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | 101,568 | 82,307 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 54,906 | $ 45,599 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||||||
Accounts receivable | $ 119,869 | $ 119,869 | $ 98,500 | $ 81,708 | ||
Allowance for credit losses | 2,994 | 2,994 | 949 | 959 | ||
Accounts receivable, net | 116,875 | 116,875 | $ 97,551 | $ 80,749 | ||
Increase in allowance for credit losses | $ 2,000 | $ 0 | $ 2,000 | $ 0 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | |||
Total inventories | $ 70,606 | $ 72,155 | $ 48,353 |
Non-serialized parts | |||
Inventory [Line Items] | |||
Total inventories | 59,093 | 61,082 | 44,308 |
Serialized parts | |||
Inventory [Line Items] | |||
Total inventories | $ 11,513 | $ 11,073 | $ 4,045 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net - Summary of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 3,161,273 | $ 3,010,575 | $ 2,761,170 |
Less: accumulated depreciation | (650,163) | (521,893) | (361,556) |
Property, plant and equipment, net | 2,511,110 | 2,488,682 | 2,399,614 |
Compression equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 3,113,641 | 2,973,599 | 2,731,638 |
Trailers and vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 9,239 | 7,193 | 6,516 |
Field equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 18,385 | 15,501 | 11,417 |
Technology hardware and software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 10,330 | 6,698 | 3,944 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 4,209 | 1,947 | 1,772 |
Shipping containers | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 3,349 | 3,137 | 2,882 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 1,570 | 1,519 | 1,460 |
Finance lease | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 530 | 981 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 20 | 0 | |
Other | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 981 | $ 1,541 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 43.7 | $ 41.7 | $ 129.3 | $ 122.8 | $ 165 | $ 150.5 |
Property, Plant and Equipment_5
Property, Plant and Equipment, net - Summary of estimated useful lives of assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Compression equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 25 years |
Compression equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 4 years |
Trailers and vehicles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Field equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Field equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Technology hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | Shorter of remaining lease term or 5 years |
Shipping containers | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 4 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Other | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | Shorter of remaining lease term or estimated useful life |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease, remaining lease term | 5 years | |
Rental expenses related to office leases | $ 3.6 |
Leases - Schedule of Balance Sh
Leases - Schedule of Balance Sheet Information Related to Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Assets and Liabilities, Lessee [Abstract] | ||||
ROU assets, net | $ 33,453 | $ 9,827 | $ 11,400 | $ 0 |
Lease liabilities: | ||||
Current | 0 | 3,090 | 0 | |
Noncurrent | $ 34,026 | 6,754 | $ 0 | |
Total lease liabilities | $ 9,844 |
Leases - Schedule of Components
Leases - Schedule of Components of Total Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Lease, Cost [Abstract] | |
Operating lease cost | $ 3,349 |
Variable lease cost | 0 |
Short-term lease cost | 337 |
Total lease cost | $ 3,686 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Information Related to the Company's Operating Leases (Details) | Dec. 31, 2022 |
Lease, Cost [Abstract] | |
Weighted average remaining lease term (in years) | 3 years 6 months 18 days |
Weighted average discount rate | 5.25% |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information Related to the Company's Operating Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Lease, Cost [Abstract] | |
Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities | $ 3,332 |
Operating ROU assets obtained in exchange for new lease liabilities | $ 71 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities, Associated With ROU Assets (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |
2023 | $ 3,517 |
2024 | 3,119 |
2025 | 1,995 |
2026 | 1,313 |
2027 | 801 |
Thereafter | 27 |
Total lease payments | 10,772 |
Less: Interest | (928) |
Total lease liabilities | $ 9,844 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Leases [Abstract] | |
2022 | $ 3,015 |
2023 | 2,165 |
2024 | 1,878 |
2025 | 1,116 |
2026 | 965 |
Thereafter | 555 |
Total lease payments | $ 9,694 |
Goodwill and Identifiable Int_3
Goodwill and Identifiable Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Changes to goodwill carrying amount during period | $ 0 | $ 0 | $ 0 | |||
Amortization expense | $ 2,400 | $ 2,400 | $ 7,100 | $ 7,100 | $ 9,500 | $ 9,500 |
Goodwill and Identifiable Int_4
Goodwill and Identifiable Intangible Assets, Net - Summary of the Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | |||
Original Cost | $ 163,000 | $ 163,000 | $ 163,000 |
Accumulated Amortization | (37,743) | (30,638) | (21,165) |
Net Amount | 125,257 | 132,362 | 141,835 |
Trade name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original Cost | 13,000 | 13,000 | 13,000 |
Accumulated Amortization | (3,018) | (2,531) | (1,881) |
Net Amount | $ 9,982 | $ 10,469 | $ 11,119 |
Remaining Weighted Average Amortization Period (years) | 15 years 4 months 24 days | 16 years 1 month 6 days | 17 years 1 month 6 days |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original Cost | $ 150,000 | $ 150,000 | $ 150,000 |
Accumulated Amortization | (34,725) | (28,107) | (19,284) |
Net Amount | $ 115,275 | $ 121,893 | $ 130,716 |
Remaining Weighted Average Amortization Period (years) | 13 years 1 month 6 days | 13 years 9 months 18 days | 14 years 9 months 18 days |
Goodwill and Identifiable Int_5
Goodwill and Identifiable Intangible Assets, Net - Summary of Future Minimum Amortization Expense for Identified Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Remainder of 2023 | $ 2,368 | $ 9,474 | |
2024 | 9,474 | 9,474 | |
2025 | 9,474 | 9,474 | |
2026 | 9,474 | 9,474 | |
2027 | 9,474 | 9,474 | |
Thereafter | 84,993 | 84,992 | |
Net Amount | $ 125,257 | $ 132,362 | $ 141,835 |
Long-Lived and Other Asset Im_2
Long-Lived and Other Asset Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Asset Impairment Charges [Abstract] | ||||||
Asset impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 9,107 |
Debt and Credit Facilities - Sc
Debt and Credit Facilities - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 1,789,086 | $ 2,754,224 | $ 1,865,234 |
Less: current maturities | 0 | 0 | |
Less: unamortized debt issuance cost | (41,174) | (34,205) | (20,112) |
Long-term debt, net of unamortized debt issuance cost | 1,747,912 | 2,720,019 | 1,845,122 |
ABL Facility | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | 1,789,086 | 1,754,224 | 1,465,234 |
Term Loan | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 0 | $ 1,000,000 | $ 400,000 |
Debt and Credit Facilities - Na
Debt and Credit Facilities - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||
Sep. 30, 2023 USD ($) | Jul. 03, 2023 USD ($) | Dec. 31, 2022 USD ($) | May 19, 2022 USD ($) | May 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2027 | Dec. 31, 2026 | Mar. 31, 2026 | Mar. 31, 2025 | Sep. 30, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 USD ($) | Mar. 22, 2023 USD ($) | Jan. 01, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||||||||||
Return of capital | $ 42,300 | $ 838,000 | $ 838,000 | $ 1,132 | |||||||||||||||||||
Cash on hand utilized | $ 13,000 | $ 13,000 | |||||||||||||||||||||
Interest expense | 165,867 | 84,640 | |||||||||||||||||||||
Deferred financing costs written off | 4,359 | 0 | |||||||||||||||||||||
Proceeds from termination of interest rate swaps and collars | $ 25,800 | ||||||||||||||||||||||
Unamortized debt issuance costs | $ 41,174 | $ 34,205 | $ 41,174 | 41,174 | 34,205 | 20,112 | |||||||||||||||||
Amortization of debt issuance costs | 200 | $ 4,300 | 11,260 | $ 9,453 | $ 13,727 | $ 6,944 | |||||||||||||||||
Wholly Owned Subsidiary | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Restricted assets net as a percentage of consolidated net assets | 25% | 25% | |||||||||||||||||||||
Term Loan | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt instrument face value | $ 700,000 | ||||||||||||||||||||||
Deferred financing costs written off | 4,400 | 4,400 | |||||||||||||||||||||
Repayment of debt | 300,000 | ||||||||||||||||||||||
Debt fees expense | $ 2,400 | $ 2,400 | |||||||||||||||||||||
Carrying value of debt | 689,800 | ||||||||||||||||||||||
Unamortized debt issuance costs | $ 10,200 | ||||||||||||||||||||||
Adjusted Eurocurrency Rate | Term Loan | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Long term debt base rate percentage | 7% | 7% | |||||||||||||||||||||
Third Amendment and Restated Credit Agreement | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Return of capital | 838,000 | 838,000 | |||||||||||||||||||||
Increase in the Term Loan Facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt instrument face value | 600,000 | 600,000 | |||||||||||||||||||||
Debt issuance costs | 14,600 | ||||||||||||||||||||||
Increase in the Term Loan Facility | Third Amendment and Restated Credit Agreement | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Return of capital | 838,000 | ||||||||||||||||||||||
Debt instrument face value | 600,000 | ||||||||||||||||||||||
Maximum leverage ratio | 7.25 | 7.25 | 7.25 | 6 | 6.25 | 6.5 | 6.75 | 7 | 7.5 | ||||||||||||||
Debt issuance costs | $ 14,600 | $ 14,600 | |||||||||||||||||||||
Term Loan Facility as per Amendment Agreement One | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt issuance costs | $ 750 | ||||||||||||||||||||||
Term Loan | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Variable interest rate (as a percent) | 10.67% | 10.67% | 7.13% | ||||||||||||||||||||
Long term debt date of maturity | May 19, 2027 | May 19, 2027 | |||||||||||||||||||||
Number of days from the end of the fiscal year within which payment is due when there is excess cash flow | 120 days | ||||||||||||||||||||||
Term Loan | Alternate Base Rate | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Long term debt base rate percentage | 6% | 6% | |||||||||||||||||||||
ABL Facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Increase in the line of credit | 225,000 | 225,000 | |||||||||||||||||||||
Line of credit, maximum borrowing capacity | $ 1,700,000 | $ 1,875,000 | |||||||||||||||||||||
Letters of credit outstanding | $ 14,700 | $ 14,700 | $ 14,700 | ||||||||||||||||||||
Minimum fixed charge coverage ratio | 2.5 | ||||||||||||||||||||||
Line of credit, commitment fee percentage, unused portion of line of credit, percentage to total commitments | 0.50 | ||||||||||||||||||||||
ABL Facility | Minimum | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Commitment fee (as a percent) | 0.25% | ||||||||||||||||||||||
ABL Facility | Maximum | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Commitment fee (as a percent) | 0.50% | ||||||||||||||||||||||
ABL Facility | Forecast | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Maximum leverage ratio | 4.5 | 4.75 | 5 | 5.25 | |||||||||||||||||||
ABL Facility | Third Amendment and Restated Credit Agreement | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Return of capital | $ 838,000 | ||||||||||||||||||||||
Line of credit, maximum borrowing capacity | $ 2,100,000 | 2,050,000 | $ 2,100,000 | 1,875,000 | |||||||||||||||||||
Lender fees and costs | $ 13,200 | $ 900 | |||||||||||||||||||||
Deferred financing costs written off | $ 1,200 | ||||||||||||||||||||||
ABL Facility | Third Amendment and Restated Credit Agreement | Forecast | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Maximum leverage ratio | 7 | 7 | 7 | 6.5 | 6.75 | 7.25 | |||||||||||||||||
ABL Facility | Fourth Amendment and Restated Credit Agreement | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Line of credit, maximum borrowing capacity | $ 2,200,000 | ||||||||||||||||||||||
Lender fees and costs | $ 31,800 | ||||||||||||||||||||||
Interest expense | $ 4,200 | ||||||||||||||||||||||
Payment of accrued interest | 4,200 | ||||||||||||||||||||||
Maximum threshold limit value beyond which cash dominion is triggered | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 | $ 200,000 | ||||||||||||||||||
Percentage of aggregate commitments beyond which cash dominion is triggered | 10% | 10% | 10% | 10% | 10% | ||||||||||||||||||
ABL Facility | Fourth Amendment and Restated Credit Agreement | Prime Rate | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Fixed interest rate (as a percent) | 10.25% | 9.50% | 10.25% | 10.25% | 9.50% | 5.25% | |||||||||||||||||
Basis spread on variable interest rate (as a percent) | 2% | 2% | 7.60% | ||||||||||||||||||||
ABL Facility | Fourth Amendment and Restated Credit Agreement | SOFR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable interest rate (as a percent) | 0.10% | 0.10% | |||||||||||||||||||||
Variable interest rate (as a percent) | 8.34% | 7.60% | 8.34% | 8.34% | 7.60% | ||||||||||||||||||
Additional basis spread on variable rate (as a percent) | 2.75% | 3% | |||||||||||||||||||||
ABL Facility | Fourth Amendment and Restated Credit Agreement | LIBOR Rate | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable interest rate (as a percent) | 3% | ||||||||||||||||||||||
Variable interest rate (as a percent) | 3.125% |
Debt and Credit Facilities - _2
Debt and Credit Facilities - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | |||
Remainder of 2023 | $ 0 | ||
2024 | 0 | $ 0 | |
2025 | 0 | 1,754,224 | |
2026 | 0 | 0 | |
2027 | 0 | 0 | |
2027 | 1,000,000 | ||
Thereafter | 1,789,086 | ||
Total | $ 1,789,086 | $ 2,754,224 | $ 1,865,234 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2023 | Jun. 29, 2023 | Dec. 31, 2022 | |
Term Loan Derivative Settlement | |||
Derivatives, Fair Value [Line Items] | |||
Gain on derivatives | $ 25.8 | ||
Interest rate swaps and collars | Term Loan | |||
Derivatives, Fair Value [Line Items] | |||
Notional amount | $ 750 | ||
Interest rate forward | |||
Derivatives, Fair Value [Line Items] | |||
Notional amount | 1,600 | ||
Interest rate forward | After September 30, 2023 | |||
Derivatives, Fair Value [Line Items] | |||
Notional amount | $ 375 | ||
Additional Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional amount | $ 975 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Information Related to Notional Amount and Maturities Dates for Interest Rate Swaps (Details) - Interest rate swaps and collars - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
6/14/2023 | ||
Derivative [Line Items] | ||
Notional Amount | $ 100,000,000 | |
6/4/2024 | ||
Derivative [Line Items] | ||
Notional Amount | 100,000,000 | |
12/4/2024 | ||
Derivative [Line Items] | ||
Notional Amount | $ 125,000,000 | 375,000,000 |
12/5/2024 | ||
Derivative [Line Items] | ||
Notional Amount | 225,000,000 | 225,000,000 |
6/14/2025 | ||
Derivative [Line Items] | ||
Notional Amount | 200,000,000 | 200,000,000 |
12/6/2025 | ||
Derivative [Line Items] | ||
Notional Amount | 125,000,000 | |
6/14/2026 | ||
Derivative [Line Items] | ||
Notional Amount | 175,000,000 | 175,000,000 |
6/22/2026 | ||
Derivative [Line Items] | ||
Notional Amount | 125,000,000 | 125,000,000 |
12/6/2026 | ||
Derivative [Line Items] | ||
Notional Amount | 125,000,000 | |
5/18/2027 | ||
Derivative [Line Items] | ||
Notional Amount | 75,000,000 | 75,000,000 |
5/19/2027 | ||
Derivative [Line Items] | ||
Notional Amount | 100,000,000 | 100,000,000 |
5/19/2027 | ||
Derivative [Line Items] | ||
Notional Amount | 200,000,000 | |
12/6/2027 | ||
Derivative [Line Items] | ||
Notional Amount | $ 125,000,000 | |
5/29/2027 | ||
Derivative [Line Items] | ||
Notional Amount | $ 200,000,000 |
Derivative Instruments - Summ_2
Derivative Instruments - Summary of Summarized Information Related to the Collar Agreements Maturing (Details) - Interest rate collars | Dec. 31, 2022 USD ($) |
Minimum | |
Derivative [Line Items] | |
Notional amount | $ 200,000,000 |
Maximum | |
Derivative [Line Items] | |
Notional amount | $ 200,000,000 |
Derivative Instruments - Summ_3
Derivative Instruments - Summary of Company's Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | $ 0 | $ 823 | $ 0 |
Total non-current assets | 51,790 | 64,517 | 0 |
Total current liabilities | 0 | 398 | |
Total non-current liabilities | 0 | 21,625 | |
Not Designated as Hedging Instrument | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 823 | |
Total non-current assets | 51,790 | 64,517 | |
Total | 51,790 | 65,340 | |
Total | (22,023) | ||
Not Designated as Hedging Instrument | Interest rate swaps | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 823 | |
Total non-current assets | 51,790 | 48,955 | |
Total current liabilities | (398) | ||
Total non-current liabilities | (13,723) | ||
Not Designated as Hedging Instrument | Interest rate collars | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total non-current assets | 15,562 | ||
Total non-current liabilities | (7,902) | ||
Not Designated as Hedging Instrument | Level 1 | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 0 | |
Total non-current assets | 0 | 0 | |
Total | 0 | 0 | |
Total | 0 | ||
Not Designated as Hedging Instrument | Level 1 | Interest rate swaps | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 0 | |
Total non-current assets | 0 | 0 | |
Total current liabilities | 0 | ||
Total non-current liabilities | 0 | ||
Not Designated as Hedging Instrument | Level 1 | Interest rate collars | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total non-current assets | 0 | ||
Total non-current liabilities | 0 | ||
Not Designated as Hedging Instrument | Level 2 | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 823 | |
Total non-current assets | 51,790 | 64,517 | |
Total | 51,790 | 65,340 | |
Total | (22,023) | ||
Not Designated as Hedging Instrument | Level 2 | Interest rate swaps | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 823 | |
Total non-current assets | 51,790 | 48,955 | |
Total current liabilities | (398) | ||
Total non-current liabilities | (13,723) | ||
Not Designated as Hedging Instrument | Level 2 | Interest rate collars | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total non-current assets | 15,562 | ||
Total non-current liabilities | (7,902) | ||
Not Designated as Hedging Instrument | Level 3 | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 0 | |
Total non-current assets | 0 | 0 | |
Total | 0 | 0 | |
Total | 0 | ||
Not Designated as Hedging Instrument | Level 3 | Interest rate swaps | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total current assets | 0 | 0 | |
Total non-current assets | $ 0 | 0 | |
Total current liabilities | 0 | ||
Total non-current liabilities | 0 | ||
Not Designated as Hedging Instrument | Level 3 | Interest rate collars | |||
Disclosure in Tabular Form of Derivative Instruments at Fair Value [Line Items] | |||
Total non-current assets | $ 0 | ||
Total non-current liabilities | $ 0 |
Derivative Instruments - Summ_4
Derivative Instruments - Summary of Effects of Company's Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives, Fair Value [Line Items] | ||||||
Gain (loss) on derivatives | $ 87,363 | $ 40,827 | ||||
Not Designated as Hedging Instrument | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Gain (loss) on derivatives | $ 15,141 | $ 51,862 | $ 42,080 | $ 76,972 | 83,116 | 18,174 |
Not Designated as Hedging Instrument | Interest rate swaps | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Gain (loss) on derivatives | 15,141 | 44,809 | 42,649 | 54,796 | 59,592 | 8,771 |
Not Designated as Hedging Instrument | Interest rate collars | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Gain (loss) on derivatives | $ 0 | $ 7,053 | $ (569) | $ 22,176 | $ 23,525 | $ 9,403 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | ||
Change in the fair value of contingent consideration | $ 0 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | $ 1,751,585 | $ 2,723,692 |
Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 1,747,912 | 2,720,019 |
Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 3,673 | 3,673 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 0 | 0 |
Level 1 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 0 | 0 |
Level 1 | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 0 | 0 |
Level 2 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 0 | 0 |
Level 2 | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 1,751,585 | 2,723,692 |
Level 3 | Debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | 1,747,912 | 2,720,019 |
Level 3 | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities fair value disclosure | $ 3,673 | $ 3,673 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Jul. 13, 2023 | Jul. 03, 2023 | Jun. 29, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 20, 2023 | Mar. 06, 2019 | |
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Common stock, shares issued (in shares) | 77,400,000 | 77,400,000 | 59,000,000 | 100 | |||||||
Common stock, shares outstanding (in shares) | 77,400,000 | 77,400,000 | 59,000,000 | 100 | |||||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | 1,000 | 750,000,000 | ||||||
Omnibus Plan | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Shares granted (in shares) | 1,297,188 | ||||||||||
Common stock, shares reserved for issuance (in shares) | 6,375,000 | ||||||||||
Class B Incentive Units | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Shares authorized (in shares) | 60,406.9 | 60,406.9 | 61,068 | 61,068 | |||||||
Shares outstanding (in shares) | 57,058.5 | 57,058.5 | 60,363.4 | ||||||||
Shares granted (in shares) | 0 | 0 | 2,861 | 57,502.4 | |||||||
Award vesting rights, term | five | five | |||||||||
Class B Incentive Units | Time Vesting | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 25% | 25% | |||||||||
Share Based Compensation By Share Based Awards Non Option Equity Instruments Granted Aggregate Fair Value | $ 1.3 | $ 3.1 | |||||||||
Share based compensation by share based award Equity Instruments other than options vested during the period shares | 3,279.4 | 5,689 | |||||||||
Class B Incentive Units | Time Vesting | Vesting Subtranche One | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 20% | ||||||||||
Class B Incentive Units | Time Vesting | Vesting Subtranche Two | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 20% | ||||||||||
Class B Incentive Units | Time Vesting | Vesting Subtranche Three | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 20% | ||||||||||
Class B Incentive Units | Time Vesting | Vesting Subtranche Four | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 20% | ||||||||||
Class B Incentive Units | Time Vesting | Vesting Subtranche Five | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 20% | ||||||||||
Class B Incentive Units | Performance Vesting | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 75% | 75% | |||||||||
Class B Incentive Units | Time Vesting | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Unvested time vesting units (in shares) | 3,079.1 | 3,079.1 | 6,122.4 | ||||||||
Unrecognized stock compensation expense | $ 0.5 | $ 0.5 | $ 2.2 | ||||||||
Class B Incentive Units | Selling, General and Administrative Expenses | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Stock compensation expense | $ 1.4 | $ 0.6 | $ 1 | $ 1.2 | |||||||
Class B Incentive Units | 2019 Class B Unit Incentive Plan | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Shares authorized (in shares) | 61,098.4 | ||||||||||
RSUs | Omnibus Plan | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Shares granted (in shares) | 985,313 | ||||||||||
Award vesting period of RSU activity | 3 years | ||||||||||
Share based compensation by share based award Equity Instruments other than options vested during the period shares | 0 | ||||||||||
PSUs | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of award vesting rights | 100% | ||||||||||
Unrecognized stock compensation expense | 18.7 | $ 18.7 | |||||||||
PSUs | Minimum | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of shares issued | 0% | ||||||||||
PSUs | Maximum | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Percentage of shares issued | 190% | ||||||||||
PSUs | Selling, General and Administrative Expenses | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Stock compensation expense | $ 2 | $ 0 | $ 2 | $ 0 | |||||||
PSUs | Omnibus Plan | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Shares granted (in shares) | 311,875 | ||||||||||
Award vesting period of RSU activity | 3 years | ||||||||||
Share based compensation by share based award Equity Instruments other than options vested during the period shares | 0 | ||||||||||
IPO | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Additional purchase of shares (in shares) | 16,000,000 | ||||||||||
Proceeds from issuance of common stock | $ 230.8 | ||||||||||
Over-Allotment Option | |||||||||||
Schedule of Stock by Class and Share Based Arrangement [Line Items] | |||||||||||
Common stock, shares issued (in shares) | 77,400,000 | ||||||||||
Common stock, shares outstanding (in shares) | 77,400,000 | ||||||||||
Additional purchase of shares (in shares) | 2,400,000 | ||||||||||
Proceeds from issuance of common stock | $ 36.2 | ||||||||||
Sale of stock, price per share (in dollars per share) | $ 16 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Award Activity Under Omnibus Plan (Details) - Omnibus Plan | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
RSUs | |
Number of RSUs and PSUs | |
Outstanding, Beginning of Period (in shares) | shares | 0 |
Granted (in shares) | shares | 985,313 |
Vested or exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | (20,679) |
Outstanding, End of Period (in shares) | shares | 964,634 |
Restricted stock awards expected to vest (in shares) | shares | 964,634 |
Weighted-Average Price | |
Outstanding, Beginning of Period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 16 |
Vested or exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding, End of Period (in dollars per share) | $ / shares | 16 |
Restricted stock awards expected to vest (in dollars per share) | $ / shares | $ 16 |
PSUs | |
Number of RSUs and PSUs | |
Outstanding, Beginning of Period (in shares) | shares | 0 |
Granted (in shares) | shares | 311,875 |
Vested or exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding, End of Period (in shares) | shares | 311,875 |
Restricted stock awards expected to vest (in shares) | shares | 311,875 |
Weighted-Average Price | |
Outstanding, Beginning of Period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 16.99 |
Vested or exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding, End of Period (in dollars per share) | $ / shares | 16.99 |
Restricted stock awards expected to vest (in dollars per share) | $ / shares | $ 16.99 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Purchase commitments | $ 215,700,000 | $ 215,700,000 | |||
Purchase commitments to be paid in the next twelve months | 182,900,000 | 182,900,000 | $ 166,900,000 | ||
Contingent consideration | 3,700,000 | 3,700,000 | |||
Outstanding receivables | 0 | 0 | 0 | $ 0 | |
Sales tax contingency | 28,688,000 | 28,688,000 | 27,820,000 | 16,079,000 | |
Additional sales tax contingency for the period | 900,000 | ||||
Accounts receivable past due in respect of prior acquisition | $ 7,300,000 | ||||
Percentage of outstanding receivables collected and payable towards contingent consideration | 50% | ||||
Percentage of outstanding receivables collected and eligible for the companies purpose | 50% | ||||
Accounts receivable written off | $ 3,700,000 | ||||
Contigent consideration accrued during the period | $ 0 | $ 0 | |||
Sales tax contingency | |||||
Sales tax contingency | 27,800,000 | 21,300,000 | |||
Additional sales tax contingency for the period | $ 6,500,000 | ||||
Reclassification from other liabilities to accrued liabilities sales tax contingency | $ 5,200,000 | ||||
Other Current Liabilities | Due To The Seller For Accounts Receivable | |||||
Contigent consideration accrued during the period | $ 3,700,000 | ||||
Percentage of receivables due from acquiree | 50% |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid insurance | $ 3,733 | $ 3,997 | $ 4,104 |
Prepaid rent | 799 | 589 | 606 |
Deferred IPO issuance costs | 0 | 3,047 | |
Deferred project costs | 3,538 | 0 | |
Interest rate swap receivable | 1,559 | 0 | |
Other | 3,624 | 1,887 | |
Other expense | 4,934 | 1,541 | |
Total prepaid expenses and other current assets | $ 13,253 | $ 9,520 | $ 6,251 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | |||
Sales tax liability | $ 28,688 | $ 27,820 | $ 16,079 |
Accrued interest | 11,746 | 16,347 | 6,237 |
Accrued bonus | 10,475 | 7,764 | 7,105 |
Accrued taxes | 14,675 | 9,667 | 4,713 |
Accrued payroll | 1,036 | 2,744 | 2,253 |
Accrued legal fee | 1,823 | 1,906 | |
Lease liabilities - current portion | 0 | 3,090 | 0 |
Contingent consideration | 3,673 | 3,673 | 3,673 |
Accrued accounts payable | 16,629 | 14,080 | 6,144 |
Accrued insurance | 109 | 2,231 | 2,354 |
Station construction accrual | 12,361 | 0 | |
Other | 1,233 | 4,551 | |
Other liabilities | 6,457 | 4,557 | |
Social security deferral | 0 | 1,751 | |
Total accrued liabilities | $ 102,448 | $ 93,873 | $ 54,866 |
Income Taxes - Summary Of Compo
Income Taxes - Summary Of Components Of Income Tax Expense Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current income taxes: | ||||||
Federal | $ 2,746 | |||||
State and local | 3,045 | $ 2,399 | ||||
Total current tax | 5,791 | 2,399 | ||||
Deferred income taxes | ||||||
Federal | 25,704 | (54,210) | ||||
State and local | 1,597 | (6,762) | ||||
Total deferred tax | $ 6,312 | $ 26,807 | 27,301 | (60,972) | ||
Income tax (benefit) expense | $ 7,904 | $ 14,337 | $ 9,765 | $ 32,496 | $ 33,092 | $ (58,573) |
Income Taxes - Summary Of Effec
Income Taxes - Summary Of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | ||||||
Income before income taxes | $ 29,670 | $ 60,237 | $ 36,705 | $ 136,852 | $ 139,357 | $ 122,390 |
Tax at Federal Statutory Rate | 29,265 | 25,702 | ||||
State, Net of Federal Benefit | 3,664 | (761) | ||||
Non-deductible expenses | 163 | 93 | ||||
Change in valuation allowance | (83,607) | |||||
Income tax (benefit) expense | $ 7,904 | $ 14,337 | $ 9,765 | $ 32,496 | $ 33,092 | $ (58,573) |
Income Taxes - Summary Of Com_2
Income Taxes - Summary Of Components Of Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating losses | $ 450,543 | $ 433,804 |
Interest expense carryforward | 31,285 | |
Other assets | 233 | |
Total gross deferred tax assets | 481,828 | 434,037 |
Total deferred tax assets, net of valuation allowance | 481,828 | 434,037 |
Deferred tax liabilities: | ||
Investment in subsidiaries | (538,983) | (463,676) |
Total gross deferred tax liabilities | (538,983) | (463,676) |
Net deferred tax liabilities | $ (57,155) | $ (29,639) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | ||||||
Significant shareholding percentage considered for calculating limitation of operating losses to be carried forward | 5% | |||||
Term considered for restriction on operating losses to be carried forward | 3 years | |||||
Maximum percentage change in the ownership percentage permissible | 50% | |||||
Uncertain tax positions, interest and penalties | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Uncertain tax positions, accrued interest and penalties | 0 | 0 | 0 | 0 | ||
Income tax (benefit) expense | $ 7,904,000 | $ 14,337,000 | $ 9,765,000 | $ 32,496,000 | $ 33,092,000 | $ (58,573,000) |
Effective tax rate | 26.60% | 23.80% | 26.60% | 23.70% | 24.30% | (47.80%) |
Uncertain tax benefits | $ 0 | $ 0 | $ 0 | $ 0 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | |||||
Corporate alternative minimum tax | 15% | |||||
Probability of tax benefit being realized minimum for recognition In the income statement | 50% | 50% | ||||
Earliest Tax Year | ||||||
Income Tax Contingency [Line Items] | ||||||
Open tax year | 2018 | |||||
Domestic Tax Authority | Indefinitely | ||||||
Income Tax Contingency [Line Items] | ||||||
Operating loss carry forwards | $ 2,000,000,000 | |||||
State and Local Jurisdiction | Two Thousand And Fourty Two | ||||||
Income Tax Contingency [Line Items] | ||||||
Operating loss carry forwards | $ 498,000,000 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan [Abstract] | ||||||
Defined contribution plan cost | $ 0.7 | $ 0.7 | $ 2.3 | $ 2.1 | $ 2.9 | $ 2.7 |
Compensation Plans - Additional
Compensation Plans - Additional Information (Details) - Two thousand and twenty long term incentive plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation arrangement with individual requisite service period | 4 years | |
Deferred compensation cash based arrangement liability current and non current | $ 5.4 | $ 6.8 |
Deferred compensation cash based arrangement liability non current | $ 4.4 | $ 5.9 |
Tranche one | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation arrangment with individual cash based vesting percentage | 25% | |
Tranche two | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation arrangment with individual cash based vesting percentage | 25% | |
Tranche three | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation arrangment with individual cash based vesting percentage | 25% | |
Tranche four | ||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation arrangment with individual cash based vesting percentage | 25% |
Segments - Narrative (Details)
Segments - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | |
Segment Reporting [Abstract] | ||||||
Number of operating segments | Segment | 2 | 2 | ||||
Depreciation and amortization | $ | $ 46,100 | $ 44,100 | $ 136,414 | $ 129,913 | $ 174,463 | $ 160,045 |
Segments - Summary of Financial
Segments - Summary of Financial Metrics by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||||
Revenue | $ 230,983 | $ 182,645 | $ 624,401 | $ 528,137 | $ 707,913 | $ 606,375 |
Gross margin | 80,606 | 68,625 | 228,823 | 196,441 | 266,099 | 236,153 |
Total assets | 3,244,240 | 3,136,964 | 3,244,240 | 3,136,964 | 3,205,540 | 3,011,599 |
Capital expenditures | 51,539 | 53,755 | 145,573 | 199,707 | 259,349 | 201,934 |
Compression Operations | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 186,673 | 163,662 | 545,989 | 483,965 | 654,957 | 583,070 |
Gross margin | 75,116 | 63,679 | 216,318 | 186,907 | 254,779 | 230,212 |
Total assets | 3,213,764 | 3,133,249 | 3,213,764 | 3,133,249 | 3,184,286 | 3,004,608 |
Capital expenditures | 51,539 | 53,755 | 145,573 | 199,707 | 259,349 | 201,934 |
Other Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 44,310 | 18,983 | 78,412 | 44,172 | 52,956 | 23,305 |
Gross margin | 5,490 | 4,946 | 12,505 | 9,534 | 11,320 | 5,941 |
Total assets | 30,476 | 3,715 | 30,476 | 3,715 | 21,254 | 6,991 |
Capital expenditures | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Segments - Summary of Total Gro
Segments - Summary of Total Gross Margin to Income Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | ||||||
Total gross margin | $ 80,606 | $ 68,625 | $ 228,823 | $ 196,441 | $ 266,099 | $ 236,153 |
Selling, general and administrative expenses | (19,648) | (11,190) | (46,171) | (32,760) | (44,882) | (37,665) |
Long lived asset impairment | (9,107) | |||||
Gain / (loss) on sale of fixed assets | 0 | 818 | 721 | 825 | 874 | (426) |
Interest expense, net | (39,710) | (49,859) | (182,030) | (104,616) | (165,867) | (84,640) |
Interest expense, net | (165,867) | (84,640) | ||||
Loss on extinguishment of debt | (6,757) | 0 | (6,757) | 0 | ||
Gain on derivatives | 15,141 | 51,862 | 42,080 | 76,972 | 83,116 | 18,174 |
Other (expense) income | 38 | (19) | 39 | (10) | 17 | (99) |
Income before income taxes | $ 29,670 | $ 60,237 | $ 36,705 | $ 136,852 | $ 139,357 | $ 122,390 |
Earnings Per Share of Common _3
Earnings Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||||||||||
Net income (loss) | $ 21,766 | $ 17,517 | $ (12,343) | $ 45,900 | $ 8,901 | $ 49,555 | $ 26,940 | $ 104,356 | $ 106,265 | $ 180,963 |
Basic weighted average shares of common stock (in shares) | 76,731,868 | 59,000,000 | 64,954,244 | 59,000,000 | 100 | 100 | ||||
Effect of dilutive securities (in shares) | 167,615 | 0 | 167,615 | 0 | ||||||
Diluted weighted average shares of common stock (in shares) | 76,899,483 | 59,000,000 | 65,121,859 | 59,000,000 | 100 | 100 | ||||
Basic net earnings per share (in dollars per share) | $ 0.28 | $ 0.78 | $ 0.41 | $ 1.77 | $ 1,062,650 | $ 1,809,630 | ||||
Diluted earnings per share of common stock (in dollars per share) | $ 0.28 | $ 0.78 | $ 0.41 | $ 1.77 | $ 1,062,650 | $ 1,809,630 |
Parent Company Information - Su
Parent Company Information - Summary of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets, Current [Abstract] | |||||||||
Cash and cash equivalents | $ 6,128 | $ 20,431 | $ 28,795 | ||||||
Total current assets | 216,470 | 204,035 | 164,148 | ||||||
Total assets | 3,244,240 | 3,205,540 | $ 3,136,964 | 3,011,599 | |||||
Current liabilities: | |||||||||
Accounts payable | 48,835 | 37,992 | 37,593 | ||||||
Accrued liabilities | 102,448 | 93,873 | 54,866 | ||||||
Total liabilities | 2,072,448 | 2,976,447 | 2,051,528 | ||||||
Stockholders' Equity: | |||||||||
Common shares, $ 0.01 par value; 1,000 common shares authorized, 100 common shares issued and outstanding as of December 31, 2022 and 2021 | 774 | 590 | 1 | ||||||
Additional paid-in capital | 956,465 | 33,189 | 871,992 | ||||||
Accumulated deficit | 214,553 | 195,314 | 88,078 | ||||||
Total stockholders' equity | 1,171,792 | $ 192,875 | $ 217,436 | 229,093 | $ 226,910 | $ 181,010 | $ 1,010,109 | 960,071 | $ 755,286 |
Total liabilities and stockholders' equity | $ 3,244,240 | 3,205,540 | 3,011,599 | ||||||
Parent Company | |||||||||
Assets, Current [Abstract] | |||||||||
Cash and cash equivalents | 10,990 | 24,000 | |||||||
Total current assets | 10,990 | 24,000 | |||||||
Investment in Subsidiaries | 31,780 | 856,780 | |||||||
Total assets | 42,770 | 880,780 | |||||||
Current liabilities: | |||||||||
Accounts payable | 103 | 94 | |||||||
Accrued liabilities | 67 | 34 | |||||||
Total liabilities | 170 | 128 | |||||||
Stockholders' Equity: | |||||||||
Common shares, $ 0.01 par value; 1,000 common shares authorized, 100 common shares issued and outstanding as of December 31, 2022 and 2021 | 1 | 1 | |||||||
Additional paid-in capital | 42,780 | 880,780 | |||||||
Accumulated deficit | (181) | (129) | |||||||
Total stockholders' equity | 42,600 | 880,652 | |||||||
Total liabilities and stockholders' equity | $ 42,770 | $ 880,780 |
Parent Company Information - _2
Parent Company Information - Summary of Condensed Balance Sheet (Parenthetical) (Details) - $ / shares | Sep. 30, 2023 | Jun. 20, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Condensed Income Statements, Captions [Line Items] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 | |
Common Stock, Shares Authorized | 750,000,000 | 750,000,000 | 750,000,000 | 1,000 |
Common Stock, Shares, Issued | 77,400,000 | 59,000,000 | 100 | |
Common Stock, Shares, Outstanding | 77,400,000 | 59,000,000 | 100 | |
Parent Company | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | ||
Common Stock, Shares Authorized | 1,000 | 1,000 | ||
Common Stock, Shares, Issued | 100 | 100 | ||
Common Stock, Shares, Outstanding | 100 | 100 |
Parent Company Information - _3
Parent Company Information - Summary of Condensed Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Income Statements, Captions [Line Items] | ||||||||||
Selling, general and administrative expenses | $ 19,648 | $ 11,190 | $ 46,171 | $ 32,760 | $ 44,882 | $ 37,665 | ||||
Total operating expenses | 170,025 | 124,392 | 441,028 | 363,631 | 485,822 | 417,420 | ||||
Income (loss) from operations | 60,958 | 58,253 | 183,373 | 164,506 | 222,091 | 188,955 | ||||
Net loss | $ 21,766 | $ 17,517 | $ (12,343) | $ 45,900 | $ 8,901 | $ 49,555 | $ 26,940 | $ 104,356 | 106,265 | 180,963 |
Parent Company | ||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||
Selling, general and administrative expenses | 52 | 73 | ||||||||
Total operating expenses | 52 | 73 | ||||||||
Income (loss) from operations | (52) | (73) | ||||||||
Net loss | $ (52) | $ (73) |
Parent Company Information - _4
Parent Company Information - Summary of Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||||||||||
Net loss | $ 21,766 | $ 17,517 | $ (12,343) | $ 45,900 | $ 8,901 | $ 49,555 | $ 26,940 | $ 104,356 | $ 106,265 | $ 180,963 |
Accounts payable | 3,257 | 403 | (1,518) | (2,776) | ||||||
Net cash used in operating activities | 203,699 | 186,854 | 219,846 | 249,978 | ||||||
Cash flows from investing activities: | ||||||||||
Net cash provided by investment activities | (144,563) | (191,770) | (251,382) | (202,034) | ||||||
Cash flows from financing activities: | ||||||||||
Contribution from parent | 0 | 24,000 | ||||||||
Distribution to parent | 42,300 | 838,000 | 838,000 | 1,132 | ||||||
Net cash (used in) provided by financing activities | (73,439) | (2,543) | 23,172 | (43,254) | ||||||
Net (decrease) increase in cash and cash equivalents | (14,303) | (7,459) | (8,364) | 4,690 | ||||||
Cash and cash equivalents - beginning of period | 20,431 | 28,795 | 20,431 | 28,795 | 28,795 | 24,105 | ||||
Cash and cash equivalents - end of period | $ 6,128 | $ 21,336 | 6,128 | 21,336 | 20,431 | 28,795 | ||||
Parent Company | ||||||||||
Cash flows from operating activities: | ||||||||||
Net loss | (52) | (73) | ||||||||
Accrued liabilities | 9 | 34 | ||||||||
Accounts payable | 33 | 39 | ||||||||
Net cash used in operating activities | (10) | |||||||||
Cash flows from investing activities: | ||||||||||
Proceeds from investment in subsidiaries | 825,000 | |||||||||
Net cash provided by investment activities | 825,000 | |||||||||
Cash flows from financing activities: | ||||||||||
Contribution from parent | 838,000 | 24,000 | ||||||||
Distribution to parent | (838,000) | 24,000 | ||||||||
Net cash (used in) provided by financing activities | (838,000) | 24,000 | ||||||||
Net (decrease) increase in cash and cash equivalents | (13,010) | 24,000 | ||||||||
Cash and cash equivalents - beginning of period | $ 10,990 | $ 24,000 | $ 10,990 | $ 24,000 | 24,000 | |||||
Cash and cash equivalents - end of period | $ 10,990 | $ 24,000 |
Parent Company Information - Na
Parent Company Information - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Proceeds from contributions from parent | $ 0 | $ 24,000 | ||
Payment of capital distribution | $ 42,300 | $ 838,000 | 838,000 | 1,132 |
Parent Company | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Proceeds from contributions from parent | 838,000 | 24,000 | ||
Payment of capital distribution | (838,000) | 24,000 | ||
Payment of cash dividends | $ 0 | $ 0 | ||
Parent Company | Minimum | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Restricted assets as a percentage of consolidated net assets | 25% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 10, 2023 | Oct. 24, 2023 |
Forecast | ||
Subsequent Event [Line Items] | ||
Payment of ordinary dividends | $ 29 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Common stock cash dividend declared (in dollars per share) | $ 0.38 | |
Common stock cash dividend declared, annualized (in dollars per share) | $ 1.52 |