ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
storage silos and SmartPathTM transloader, access to all Class I rail lines, and the industry experience of our senior management team make us as a highly attractive provider of sand and logistics services.
Our historical results of operations and cash flows are not indicative of results of operations and cash flows to be expected in the future.
Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021
In 2021 we qualified for federal government assistance through employee retention credit provisions of the Consolidated Appropriations Act of 2021. During the three months ended June 30, 2021, we recorded $3.4 million in employee retention credits, whereas for the three months ended June 30, 2022, we did not record any employee retention credits.
We incurred $0.4 million and $0.5 million of net interest expense for the three months ended June 30, 2022 and 2021, respectively.
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021
million for the six months ended June 30, 2021. The decrease in logistics revenue was due to the shift from mine gate sales to in-basin sales, which include transportation and any other handling services, partially offset by higher utilization of our SmartSystems fleet.
•the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets;
•the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities;
•our ability to incur and service debt and fund capital expenditures;
•our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and
•our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the ABL Credit Facility.
Free cash flow was $(3.7) million for the three months ended June 30, 2022 compared to $29.7 million for the three months ended June 30, 2021.
As of June 30, 2022, we had contractual obligations for the ABL Credit Facility, Oakdale Equipment Financing, notes payable, operating and finance leases, minimum payments for the rights to mine land, capital expenditures, asset retirement obligations, and other commitments to municipalities for maintenance.
We are subject to various federal, state and local laws and regulations governing, among other things, hazardous materials, air and water emissions, environmental contamination and reclamation and the protection of the environment and natural resources. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures.
conditions may curtail drilling activities and, as a result, our sales volumes to those areas may be reduced during such severe weather periods.
Critical Accounting Policies and Estimates
There have been no material changes in our critical accounting policies and procedures during the six months ended June 30, 2022.
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