# EDGAR Filing Document

**Accession Number:** 0001767042
**File Stem:** 0000000000-23-002966
**Filing Date:** 2023-3
**Character Count:** 19356
**Document Hash:** 5790565bbc23d12f36bd642e98478bd5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000000000-23-002966.hdr.sgml**: 20230727

**ACCESSION NUMBER**: 0000000000-23-002966

**CONFORMED SUBMISSION TYPE**: UPLOAD

**PUBLIC DOCUMENT COUNT**: 2

**FILED AS OF DATE**: 20230324

**FILED FOR**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Kodiak Gas Services, Inc.
- **CENTRAL INDEX KEY:** 0001767042
- **STANDARD INDUSTRIAL CLASSIFICATION:** NATURAL GAS TRANSMISSION [4922]
- **IRS NUMBER:** 833013440
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** UPLOAD

**BUSINESS ADDRESS:**
- **STREET 1:** 15320 HIGHWAY 105 W, SUITE 210
- **CITY:** MONTGOMERY
- **STATE:** TX
- **ZIP:** 77356
- **BUSINESS PHONE:** 936-539-3300

**MAIL ADDRESS:**
- **STREET 1:** 15320 HIGHWAY 105 W, SUITE 210
- **CITY:** MONTGOMERY
- **STATE:** TX
- **ZIP:** 77356

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Frontier TopCo, Inc.
- **DATE OF NAME CHANGE:** 20190206
**PUBLIC REFERENCE ACCESSION NUMBER**: 0000950123-22-012645

## Text-Extract

```

United States securities and exchange commission logo

                             March 24, 2023

       Robert McKee
       Chief Executive Officer
       Kodiak Gas Services, Inc.
       15320 Highway 105 W, Suite 210
       Montgomery, TX 77356

                                                        Re: Kodiak Gas
Services, Inc.
                                                            Amendment No. 3 to
Draft Registration Statement on Form S-1
                                                            Submitted March 6,
2023
                                                            CIK No. 0001767042

       Dear Robert McKee:

             We have reviewed your amended draft registration statement and
have the following
       comments. In some of our comments, we may ask you to provide us with
information so we
       may better understand your disclosure.

              Please respond to this letter by providing the requested
information and either submitting
       an amended draft registration statement or publicly filing your
registration statement on
       EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
       believe an amendment is appropriate, please tell us why in your
response.

             After reviewing the information you provide in response to these
comments and your
       amended draft registration statement or filed registration statement, we
may have additional
       comments. Unless otherwise noted, references to prior comments are to
our February 24, 2023
       comment letter.

       Amendment No. 3 to Draft Registration Statement on Form S-1 submitted
March 6, 2023

       Dividend Policy, page 54

   1.                                                   We understand from your
response to prior comment one and our phone conference on
                                                        March 1, 2023, that you
believe you have a reasonable basis for indicating that investors
                                                        will receive dividends
on an ongoing basis beginning with the first quarter subsequent to
                                                        the effective date of
your registration statement, which is based on your measure of
                                                        discretionary cash flow
as reported on page 75, coupled with savings on interest expense
                                                        associated with the
debt repayment discussed on page 53. As it relates to your expected
                                                        future dividend
payments, please address the following:
                                                            Disclosure on page
75 shows discretionary cash flow of $188.5 million and free cash
 Robert McKee
FirstName
Kodiak GasLastNameRobert
            Services, Inc. McKee
Comapany
March      NameKodiak Gas Services, Inc.
       24, 2023
March2 24, 2023 Page 2
Page
FirstName LastName
              flow of negative $8.6 million for the year ended December 31,
2022. Given the level
              of actual cash expenditures reported for property and equipment
on page F-6, we do
              not see rationale or historical support in formulating a view on
your ability to pay
              dividends based on discretionary cash flow alone, excluding the
historical capital
              expenditures. We note the net amount in your presentation is
identified as the free
              cash flow metric, and that this amount, combined with your
expected interest savings
              would not result in sufficient funds to pay your expected level
of dividends.
              Therefore, it appears that you would need to identify incremental
sources of funds to
              support your dividend plans, if you otherwise intend to suggest
that historical
              operations would be sufficient. Alternatively, if you are aware
of or are planning
              fundamental changes in the business that alleviate the need for
capital expenditures at
              the levels reported in the historical financial statements, we
expect that you will need
              to show how these changes are expected to impact your operations
in the succeeding
              future periods.
                Please describe any changes in operating activities and capital
formation that you
              believe would yield incremental cash flows to support your
dividend plans. Given
              the cash flow deficiency reflected in your free cash flow metric,
we expect that you
              will need to clearly describe your intentions and show with
quantification how capital
              expenditures will be funded, along with any other changes in cash
flows that would
              be made to meet your expected dividend amount.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources
Capital Expenditures, page 69

2.       We note the revisions made in response to prior comment two to the
non-GAAP measure
         on page 75, now identified as discretionary cash flow, and the
disclosures you have on
         page 69, regarding maintenance and growth capital expenditures. As it
relates to these
         disclosures, please address the following:
             Disclosure on page 69 explains that maintenance capital
expenditures increased in
              2022 versus 2021 as a result of scheduled unit overhauls based on
the age and
              operating hours of such units. You also disclose that the amount
of maintenance
              capital expenditures are predictable. Tell us how the amounts of
maintenance capital
              expenditures incurred in 2021 and 2022 compare to your expected
level of such
              expenditures over future operating periods on an average basis.
             Disclosure on page 75 indicates that the combined amount of
maintenance and
              growth capital expenditures was $245.5 million for the year ended
December 31,
              2022. Please reconcile this amount to the line item    Purchase
of capital assets
              reported on the statement of cash flows of $259.3 million for the
same period. Please
              describe each element of the difference and explain why these
amounts should not be
              reflected in your disclosure on page 75.
             Tell us the extent to which the amounts identified as maintenance
capital
              expenditures for each period were capitalized as property plant
and equipment on the
 Robert McKee
FirstName
Kodiak GasLastNameRobert
            Services, Inc. McKee
Comapany
March      NameKodiak Gas Services, Inc.
       24, 2023
March3 24, 2023 Page 3
Page
FirstName LastName
              balance sheet.
                Within the explanation of maintenance capital expenditures on
page 69, there appears
              to be two categories of expenditures, including i) capital
expenditures made to
              maintain the operating capacity of your assets and extend their
useful lives, and ii)
              other capital expenditures that are incurred in maintaining your
existing business and
              related operating income. Please clarify the distinction made
between these two
              categories with details sufficient to understand the relevance of
the distinction and
              rationale for capitalization if not readily apparent.
                For the years ended December 31, 2022 and 2021, maintenance
capital expenditures
              totaled $48.3 million and $38.1 million, respectively. Over those
same periods,
              depreciation and amortization expense was $174.5 million and
$160.1 million,
              respectively. Given that depreciation and amortization should
reflect an allocation of
              the costs of physical assets over their useful lives, tell us why
your maintenance
              capital expenditures on an average basis would not need to
approximate the amount
              of depreciation and amortization.
Exhibits

3.       We note your disclosure on page F-25 that 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 board members,
and as of
         December 31, 2022 and 2021, there were 61,068.0 authorized Class B
Units. Please file
         the 2019 Class B Unit Incentive Plan as an exhibit to your
registration statement. Refer to
         Item 601(b)(10)(iii)(A).
4.       We note that you intend to file the form of employment agreement with
your named
         executive officers as Exhibit 10.9. Please file complete executed
copies of these
         employment agreements as exhibits to your registration statement. In
this regard, we note
         your disclosure on page 104 that Kodiak Holdings has entered into
employment
         agreements with each of the Named Executive Officers that memorialize
each Named
         Executive Officer   s employment with the Company and provide for base
salaries, bonus
         opportunities, equity incentive opportunities, paid vacation,
reimbursement of reasonable
         business expenses and eligibility to participate in Company benefit
plans generally.
        You may contact Mark Wojciechowski, Staff Accountant, at (202) 551-3759
or John
Cannarella, Staff Accountant, at (202) 551-3337 if you have questions regarding
comments on
the financial statements and related matters. Please contact Cheryl Brown,
Staff Attorney, at
(202) 551-3905 or Irene Barberena-Meissner, Staff Attorney, at (202) 551-6548
with any other
questions.

                                                               Sincerely,

                                                               Division of
Corporation Finance
 Robert McKee
Kodiak Gas Services, Inc.
March 24, 2023
FirstName
Page 4         LastNameRobert McKee
Comapany NameKodiak Gas Services, Inc.
                                         Office of Energy & Transportation
March 24, 2023 Page 4
cc:       Matt Pacey, Esq.
FirstName LastName

```

### Attached PDF Documents

**Attachment 1:** `filename1`

DIVISION OF
CORPORATION FINANCE

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

March 24, 2023

Robert McKee
Chief Executive Officer
Kodiak Gas Services, Inc.
15320 Highway 105 W, Suite 210
Montgomery, TX 77356

**Re: Kodiak Gas Services, Inc.**
**Amendment No. 3 to Draft Registration Statement on Form S-1**
**Submitted March 6, 2023**
**CIK No. 0001767042**

Dear Robert McKee:

We have reviewed your amended draft registration statement and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.

Please respond to this letter by providing the requested information and either submitting an amended draft registration statement or publicly filing your registration statement on EDGAR. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these comments and your amended draft registration statement or filed registration statement, we may have additional comments. Unless otherwise noted, references to prior comments are to our February 24, 2023 comment letter.

Amendment No. 3 to Draft Registration Statement on Form S-1 submitted March 6, 2023

Dividend Policy, page 54

1. We understand from your response to prior comment one and our phone conference on March 1, 2023, that you believe you have a reasonable basis for indicating that investors will receive dividends on an ongoing basis beginning with the first quarter subsequent to the effective date of your registration statement, which is based on your measure of discretionary cash flow as reported on page 75, coupled with savings on interest expense associated with the debt repayment discussed on page 53. As it relates to your expected future dividend payments, please address the following:
- Disclosure on page 75 shows discretionary cash flow of $188.5 million and free cash

Robert McKee
Kodiak Gas Services, Inc.
March 24, 2023
Page 2

flow of negative $8.6 million for the year ended December 31, 2022. Given the level of actual cash expenditures reported for property and equipment on page F-6, we do not see rationale or historical support in formulating a view on your ability to pay dividends based on discretionary cash flow alone, excluding the historical capital expenditures. We note the net amount in your presentation is identified as the free cash flow metric, and that this amount, combined with your expected interest savings would not result in sufficient funds to pay your expected level of dividends. Therefore, it appears that you would need to identify incremental sources of funds to support your dividend plans, if you otherwise intend to suggest that historical operations would be sufficient. Alternatively, if you are aware of or are planning fundamental changes in the business that alleviate the need for capital expenditures at the levels reported in the historical financial statements, we expect that you will need to show how these changes are expected to impact your operations in the succeeding future periods.

- Please describe any changes in operating activities and capital formation that you believe would yield incremental cash flows to support your dividend plans. Given the cash flow deficiency reflected in your free cash flow metric, we expect that you will need to clearly describe your intentions and show with quantification how capital expenditures will be funded, along with any other changes in cash flows that would be made to meet your expected dividend amount.

Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
Capital Expenditures, page 69

2. We note the revisions made in response to prior comment two to the non-GAAP measure on page 75, now identified as discretionary cash flow, and the disclosures you have on page 69, regarding maintenance and growth capital expenditures. As it relates to these disclosures, please address the following:
- Disclosure on page 69 explains that maintenance capital expenditures increased in 2022 versus 2021 as a result of scheduled unit overhauls based on the age and operating hours of such units. You also disclose that the amount of maintenance capital expenditures are predictable. Tell us how the amounts of maintenance capital expenditures incurred in 2021 and 2022 compare to your expected level of such expenditures over future operating periods on an average basis.
- Disclosure on page 75 indicates that the combined amount of maintenance and growth capital expenditures was $245.5 million for the year ended December 31, 2022. Please reconcile this amount to the line item 'Purchase of capital assets' reported on the statement of cash flows of $259.3 million for the same period. Please describe each element of the difference and explain why these amounts should not be reflected in your disclosure on page 75.
- Tell us the extent to which the amounts identified as maintenance capital expenditures for each period were capitalized as property plant and equipment on the

Robert McKee
Kodiak Gas Services, Inc.
March 24, 2023
Page 3

balance sheet.

- Within the explanation of maintenance capital expenditures on page 69, there appears to be two categories of expenditures, including i) capital expenditures made to maintain the operating capacity of your assets and extend their useful lives, and ii) other capital expenditures that are incurred in maintaining your existing business and related operating income. Please clarify the distinction made between these two categories with details sufficient to understand the relevance of the distinction and rationale for capitalization if not readily apparent.
- For the years ended December 31, 2022 and 2021, maintenance capital expenditures totaled $48.3 million and $38.1 million, respectively. Over those same periods, depreciation and amortization expense was $174.5 million and $160.1 million, respectively. Given that depreciation and amortization should reflect an allocation of the costs of physical assets over their useful lives, tell us why your maintenance capital expenditures on an average basis would not need to approximate the amount of depreciation and amortization.

# Exhibits

3. We note your disclosure on page F-25 that 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 board members, and as of December 31, 2022 and 2021, there were 61,068.0 authorized Class B Units. Please file the 2019 Class B Unit Incentive Plan as an exhibit to your registration statement. Refer to Item 601(b)(10)(iii)(A).
4. We note that you intend to file the form of employment agreement with your named executive officers as Exhibit 10.9. Please file complete executed copies of these employment agreements as exhibits to your registration statement. In this regard, we note your disclosure on page 104 that Kodiak Holdings has entered into employment agreements with each of the Named Executive Officers that memorialize each Named Executive Officer's employment with the Company and provide for base salaries, bonus opportunities, equity incentive opportunities, paid vacation, reimbursement of reasonable business expenses and eligibility to participate in Company benefit plans generally.

You may contact Mark Wojciechowski, Staff Accountant, at (202) 551-3759 or John Cannarella, Staff Accountant, at (202) 551-3337 if you have questions regarding comments on the financial statements and related matters. Please contact Cheryl Brown, Staff Attorney, at (202) 551-3905 or Irene Barberena-Meissner, Staff Attorney, at (202) 551-6548 with any other questions.

Sincerely,

Division of Corporation Finance

Robert McKee  
Kodiak Gas Services, Inc.  
March 24, 2023  
Page 4

Office of Energy & Transportation

cc: Matt Pacey, Esq.