Kodiak Gas Services (KGS) presents a deeply negative liquidation recovery posture as of December 31, 2025, consistent with the MFFAIS-calculated cash liquidation value of approximately -$2.98B. The capital structure is the dominant driver: total debt at face value stands at $2.61B (gross carrying amount per DebtInstrumentCarryingAmount), comprising $750M in 2029 Senior Notes, $770M in 2033 Senior Notes, $630M in 2035 Senior Notes, and $464.6M on the ABL Facility (net of unamortized financing costs, long-term debt on balance sheet is $2.56B). Against this liability stack, the asset side is haircut-impaired: gross PP&E of approximately $4.74B is offset by $1.16B of accumulated depreciation, leaving net PP&E of approximately $3.57B on book, which at a 50-70% liquidation recovery yields $1.79B to $2.50B — insufficient to cover the debt stack alone, leaving no residual for unsecured or equity claimants before considering other liabilities. Total assets of $4.32B drop significantly under liquidation haircuts: cash of $3.2M (100%), AR of $197.6M gross (90-95% = $178M to $188M), inventory of $101.5M (60% = $61M), goodwill of $408.7M and intangibles net $154.5M both zero out, and PP&E as above. Total haircutted asset recovery approximates $2.0B to $2.7B on a rough basis, versus total liabilities at face of $3.11B (per Liabilities tag). The negative equity spread is structural and wide. Material changes since the prior filing (10-Q/A for Q3 2025, which contained no balance sheet data — it was a narrow amendment disclosing Rule 10b5-1 trading plans only): comparison to 12/31/2024 is the operative prior period. From year-end 2024 to 2025, total assets declined from $4.44B to $4.32B, driven primarily by the sale of Mexico operations (completed 9/30/2025), which removed goodwill of $6.5M and contributed to the loss on sale of assets of $61.6M. The ABL Facility balance decreased sharply from $1.875B (fair value per 12/31/2024 disclosure) to $464.6M at 12/31/2025, as proceeds from new senior note issuances ($770M 2033 and $630M 2035) refinanced the revolver. This materially shifted the maturity profile but did not reduce aggregate debt. The Texas sales and use tax contingency escalated from $70.9M accrued at 12/31/2024 to $108.0M at 12/31/2025 (tagged as SalesAndExciseTaxPayableCurrent), plus $28M of additional interest accrued in 2025 other expense relating to a settlement offer from the Texas Comptroller — this is a hard face-value liability in liquidation. The pending acquisition of DPS ($675M, announced February 5, 2026) would, if consummated, add $575M of cash outflow and 2.4M shares issued, further compressing liquidity and equity recovery. Filing discusses the FTO/SDGT payments investigation in MD&A and the DOJ/OFAC/SEC voluntary self-disclosure, but does not separately tag any contingent liability reserve for this matter in XBRL — noted as a potential unquantified liability absent from XBRL tagging.
▼ Community Notes