6 unchanged sentences
Our Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America.
−Removed: Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
+Added: Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors;
3 unchanged sentences
Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 was conducted based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“COSO”).
−Removed: this assessment, management has determined that our internal control over financial reporting was effective as of December 31, 2020.
+Added: Based on this assessment, management has determined that our internal control over financial reporting was effective as of December 31, 2021.
Grant Thornton LLP, our independent registered public accounting firm, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2021.
3 unchanged sentences
Other Information.
+Added: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Directors, Executive Officers, and Corporate Governance.
The information required by this Item is hereby incorporated by reference from the information appearing under the captions “Proposal No.
−Removed: Election of Directors,” “Executive Officers,” “Corporate Governance,” “Board Meetings and Committees,” in our definitive proxy statement (the “Proxy Statement”) for the annual meeting of stockholders to be held on April 29, 2021, which involves the election of directors and is to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year on December 31, 2020.
+Added: Election of Directors,” “Executive Officers,” “Corporate Governance,” “Board Meetings and Committees,” in our definitive proxy statement (the “Proxy Statement”) for the annual meeting of stockholders to be held on May 24, 2022, which involves the election of directors and is to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year on December 31, 2021.
Executive Compensation.
10 unchanged sentences
Financial Statements of the Company
−Removed: Reports of Independent Registered Public Accounting Firm s
+Added: Reports of Independent Registered Public Accounting Firm s (PCAOB ID Numbers Grant Thornton LLP:
+Added: 248 & Ernst & Young LLP:
Consolidated Balance Sheets at December 31, 2021 and 2020
20 unchanged sentences
(incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report filed on August 9, 2017 (SEC File No.
−Removed: 4.1 Form of Senior Indenture (including form of senior debt security) (incorporated by reference to Exhibit 4.24 to the Company's Registration Statement on Form S-3 filed on March 23, 2016 (SEC File No.
+Added: 4.1 Form of Senior Indenture (including form of senior debt security) (incorporated by reference to Exhibit 4.10 to the Company's Registration Statement on Form S-3 filed on April 12, 2019 (SEC File No.
333-230818)).
−Removed: 4.2 Form of Subordinated Indenture (incorporated by reference to Exhibit 4.25 to the Company's Registration Statement on Form S-3 filed on March 23, 2016 (SEC File No.
+Added: 4.2 Form of Subordinated Indenture (incorporated by reference to Exhibit 4.11 to the Company's Registration Statement on Form S-3 filed on April 12, 2019 (SEC File No.
333-230818)).
−Removed: 4.3 Warrant Agreement, dated December 14, 2016, between TETRA Technologies, Inc.
−Removed: and Computershare Trust Company, N.A.
−Removed: (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on December 14, 2016 (SEC File No.
−Removed: 4.4 Form of Warrant Certificate, dated December 14, 2016, between TETRA Technologies, Inc.
−Removed: and Computershare Trust Company, N.A.
−Removed: (incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed on December 14, 2016 (SEC File No.
4.3 Credit Agreement, date September 10, 2018, among TETRA Technologies, Inc.
and JPMorgan Chase Bank (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on September 13, 2018 (SEC File No.
−Removed: 001-13455 ) ).
4.4 Credit Agreement, date September 10, 2018, among TETRA Technologies, Inc.
and Wilmington Trust, National Association (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on September 13, 2018 (SEC File No.
−Removed: 001-13455 ) ).
4.5 Intercreditor Agreement, date September 10, 2018, among TETRA Technologies, Inc., JPMorgan Chase Bank, and Wilmington Trust, National Association (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on September 13, 2018 (SEC File No.
−Removed: 001-13455) ) .
+Added: 4.6 Term Loan Letter Agreement, dated March 29, 2021, amending Credit Agreement, dated September 10, 2018, among the Company and Wilmington Trust, National Association (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report filed on May 5, 2021 (SEC File No.
+Added: 4.7 Second Amendment to the Credit Agreement dated as of July 30, 2021, by and among the Company, certain subsidiaries of TETRA party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and each of the lenders and issuing banks party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 2, 2021 (SEC File No.
+Added: 4.8 Amendment to Credit Agreement dated as of July 30, 2021, by and among the Company, Wilmington Trust, National Association, as administrative agent, and each of the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on August 2, 2021 (SEC File No.
4.9 Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 .
33 unchanged sentences
10.15*** Form of Change in Control Agreement (incorporated by reference to Exhibit 10.21 to the Company’s Form 10-K filed on March 16, 2020 (SEC File No.
−Removed: 001-13455)) .
−Removed: 10.16 Omnibus Agreement dated June 20, 2011, by and among Compressco Partners, L.P., TETRA Technologies, Inc.
−Removed: and Compressco Partners GP Inc.
−Removed: (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on June 30, 2011 (SEC File No.
−Removed: 10.17 First Amendment to Omnibus Agreement, dated June 20, 2014, by and among TETRA Technologies, Inc., Compressco Partners, L.P., and Compressco Partners GP Inc.
−Removed: (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on June 26, 2014 (SEC File No.
−Removed: 10.18 Indenture, dated as of August 4, 2014, by and among Compressco Partners, L.P., Compressco Finance Inc., the Guarantors party thereto and U.S.
−Removed: Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on August 5, 2014 (SEC File No.
−Removed: 10.19 Guaranty, dated July 20, 2014, by Compressco Partners, L.P.
−Removed: in favor of Warren Equipment Company (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on July 21, 2014 (SEC File No.
−Removed: 10.20 Contribution, Conveyance and Assumption Agreement, dated June 20, 2011, by and among Compressco, Inc., Compressco Field Services, Inc., Compressco Canada, Inc., Compressco de Mexico, S.
−Removed: de C.V., Compressco Partners GP Inc., Compressco Partners, L.P., Compressco Partners Operating, LLC, Compressco Netherlands B.V., Compressco Holdings, LLC, Compressco Netherlands Cooperatief U.A., Compressco Partners Sub, Inc., TETRA International Incorporated, Production Enhancement Mexico, S.
−Removed: and TETRA Technologies, Inc.
−Removed: (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 30, 2011 (SEC File No.
−Removed: 10.21 Contribution and Unit Purchase Agreement, dated as of July 20, 2014, by and among Compressco Partners, L.P., Compress c o Partners GP, Inc.
−Removed: and TETRA Technologies, Inc.
−Removed: (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on July 21, 2014 (SEC File No.
−Removed: 10.22 Purchase Agreement, dated as of July 29, 2014, by and among Compressco Partners, L.P., Compressco Finance Inc., the Guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated as representative of the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on August 5, 2014 (SEC File No.
−Removed: 10.23 Purchase Agreement Joinder, dated as of August 4, 2014, by and among the Guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Representative of the Initial Purchasers named therein (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on August 5, 2014 (SEC File No.
10.16*** TETRA Technologies, Inc.
12 unchanged sentences
333-222976)).
−Removed: 10.29*** Form of Restricted Stock Award Agreement under the TETRA Technologies, Inc.
−Removed: 2018 Inducement Restricted Stock Plan (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on February 12, 2018 (SEC File No.
+Added: 10.21*** Form of TETRA Technologies, Inc.
+Added: 2018 Inducement Restricted Stock Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on February 12, 2018 (SEC File No.
333-222976)).
8 unchanged sentences
10.25*** TETRA Technologies, Inc.
−Removed: 2018 Inducement Restricted Stock Plan (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8 filed on February 12, 2018 (SEC File No.
−Removed: 333-222976)).
−Removed: 10.34*** Form of Restricted Stock Award Agreement under the TETRA Technologies, Inc.
−Removed: 2018 Inducement Restricted Stock Plan (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on February 12, 2018 (SEC File No.
−Removed: 333-222976)).
−Removed: 10.35*** TETRA Technologies, Inc.
2018 Equity Incentive Plan (incorporated by reference to Exhibit 4.5 to the Company’s registration statement on Form S-8 filed on May 4, 2018 (SEC File No.
5 unchanged sentences
2018 Equity Incentive Plan Nonqualified Stock Option Award Agreement (incorporated by reference to Exhibit 4.8 to the Company’s registration statement on Form S-8 filed on May 4, 2018 (SEC File No.
+Added: 10.29*** Form of TETRA Technologies, Inc.
+Added: 2018 Equity Incentive Plan Cash Retention Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report filed on November 3, 2020 (SEC File No.
10.30*** TETRA Technologies, Inc.
−Removed: 2018 Non-Employee Director Equity Incentive Plan (incorporated by reference to Exhibit 4.5 to the Company’s registration statement on Form S-8 filed on May 4, 2018 (SEC File No.
+Added: First Amended and Restated 2018 Equity Incentive Plan (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed with the SEC on May 26, 2021 (SEC File No.
+Added: 333-256494)).
10.31*** Form of TETRA Technologies, Inc.
−Removed: 2018 Non-Employee Director Equity Incentive Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 4.6 to the Company’s registration statement on Form S-8 filed on May 4, 2018 (SEC File No.
−Removed: 10.41*** Form of Cash Retainer Award Agreement under the TETRA Technologies, Inc.
−Removed: 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.
−Removed: 2 to the Company’s Quarterly Report filed on November 3, 2020 (SEC File No.
−Removed: 16.1 Letter of Ernst & Young LLP dated as of June 18, 2020 (incorporated by reference to Exhibit 16.1 to the Company’s Form 8-K filed on June 18, 2020 (SEC File No.
+Added: First Amended and Restated 2018 Equity Incentive Plan Restricted Stock Unit Award (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed with the SEC on May 26, 2021 (SEC File No.
+Added: 333-256494)).
+Added: 10.32*** Form of TETRA Technologies, Inc.
+Added: First Amended and Restated 2018 Equity Incentive Plan Restricted Stock Unit Award for Outside Directors (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed with the SEC on May 26, 2021 (SEC File No.
+Added: 333-256494)).
+Added: 10.33*** Form of TETRA Technologies, Inc.
+Added: First Amended and Restated 2018 Equity Incentive Plan Cash Award Agreement (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed with the SEC on May 26, 2021 (SEC File No.
+Added: 333-256494)).
+Added: 10.34*** Cooperation Agreement, dated March 24, 2021, by and among TETRA Technologies, Inc., Bradley L.
+Added: Radoff and the Radoff Family Foundation (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 26, 2021 (SEC File No.
21+ Subsidiaries of the Company.
30 unchanged sentences
TETRA Technologies, Inc.
−Removed: March 5, 2021 By:
+Added: February 28, 2022 By:
Murphy, President and Chief Executive Officer
2 unchanged sentences
/s/William D.
−Removed: Sullivan Chairman of March 5, 2021
+Added: Sullivan Chairman of February 28, 2022
Sullivan the Board of Directors
−Removed: Murphy President, Chief Executive Officer, March 5, 2021
+Added: Murphy President, Chief Executive Officer, February 28, 2022
Murphy and Director
(Principal Executive Officer)
−Removed: Serrano Senior Vice President March 5, 2021
+Added: Serrano Senior Vice President February 28, 2022
Serrano and Chief Financial Officer
1 unchanged sentence
/s/Richard D.
−Removed: O’Brien Vice President – Finance and Global Controller March 5, 2021
+Added: O’Brien Vice President – Finance and Global Controller February 28, 2022
O’Brien (Principal Accounting Officer)
−Removed: Baldwin Director March 5, 2021
−Removed: Director March 5, 2021
−Removed: Coombs Director March 5, 2021
−Removed: Glick Director March 5, 2021
−Removed: Luna Director March 5, 2021
−Removed: Winkler III Director March 5, 2021
+Added: Baldwin Director February 28, 2022
+Added: Director February 28, 2022
+Added: Glick Director February 28, 2022
+Added: Luna Director February 28, 2022
+Added: McGee Director February 28, 2022
+Added: Williams Director February 28, 2022
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: Board of Directors and Stockholders of
+Added: Board of Directors and Shareholders
TETRA Technologies, Inc.
−Removed: and Subsidiaries
Opinion on the financial statements
−Removed: We have audited the accompanying consolidated balance sheet of TETRA Technologies, Inc.
−Removed: (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2020, the related consolidated statements of operations, comprehensive income(loss), equity, and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 5, 2021 expressed an unqualified opinion.
+Added: We have audited the accompanying consolidated balance sheets of TETRA Technologies, Inc.
+Added: (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2022 expressed an unqualified opinion.
Basis for opinion
These financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
+Added: We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
+Added: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
+Added: Accordingly, we express no such opinion.
+Added: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: Critical audit matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Long-lived asset impairment
−Removed: As described further in note 2 to the financial statements, the Company determines periodically whether there are impairments of long-lived assets, including identified intangible assets, when indicators of impairment are present.
−Removed: Long-lived assets consist primarily of property, plant, and equipment, right-of-use assets, and intangible assets.
−Removed: The Company evaluates the carrying value of long-lived assets when events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.
−Removed: When such indicators are present, the recoverability of the asset group is measured by a comparison of the carrying value of the asset group to the future undiscounted cash flows to be generated from the assets throughout their remaining estimated useful lives.
−Removed: If the undiscounted cash flows are less than the carrying amount of the related asset group, the Company performs an analysis of the fair value of the asset group and will recognize an impairment loss for the difference between the carrying value of the assets and their fair value.
−Removed: We identified the impairment of long-lived assets as a critical audit matter.
−Removed: The principal consideration for our determination that impairment of long-lived assets is a critical audit matter is the significant judgments and estimates involved in determining the fair values of long-lived assets, including the determination of projected cash flows used to evaluate asset recoverability.
−Removed: Our audit procedures related to the impairment of long-lived assets included the following procedures, among others.
−Removed: • We tested the design and operating effectiveness of key controls related to the appropriate identification of triggering events and the determination of key inputs such as the forecasting of future cash flows;
−Removed: • We assessed the qualifications and competence of management who performed the internal impairment analyses;
−Removed: • We evaluated the methodology used to determine the fair value of the long-lived assets, including the grouping of the assets;
−Removed: • We tested the inputs and assumptions used in the valuation models for the long-lived assets which included testing the reasonableness of the replacement costs for certain assets, tracing asset balances to the underlying accounting records and evaluating the reasonableness of the projected future cash flows for each asset group.
+Added: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical audit matters
+Added: Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: We determined that there are no critical audit matters.
/s/ GRANT THORNTON LLP
1 unchanged sentence
Houston, Texas
−Removed: March 5, 2021
+Added: February 28, 2022
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
3 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of TETRA Technologies, Inc.
−Removed: and subsidiaries (the Company) as of December 31, 2019, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for the years ended December 31, 2019 and 2018, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated financial statements).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for the years ended December 31, 2019 and 2018, in conformity with U.S.
+Added: We have audited the accompanying consolidated statements of operations, comprehensive income (loss), equity, and cash flows of TETRA Technologies, Inc.
+Added: and subsidiaries (the Company) for the year ended December 31, 2019, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated financial statements).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Company’s operations and cash flows for the year ended December 31, 2019, in conformity with U.S.
generally accepted accounting principles.
1 unchanged sentence
These financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
+Added: Our responsibility is to express an opinion on the Company’s financial statements based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audits provide a reasonable basis for our opinion.
+Added: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audit provides a reasonable basis for our opinion.
/s/ Ernst & Young LLP
4 unchanged sentences
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: Board of Directors and Stockholders of
+Added: Board of Directors and Stockholders
TETRA Technologies, Inc.
−Removed: and Subsidiaries
Opinion on internal control over financial reporting
2 unchanged sentences
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2020, and our report dated March 5, 2021 expressed an unqualified opinion on those financial statements.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2021, and our report dated February 28, 2022 expressed an unqualified opinion on those financial statements.
Basis for opinion
16 unchanged sentences
Houston, Texas
−Removed: March 5, 2021
+Added: February 28, 2022
TETRA Technologies, Inc.
10 unchanged sentences
Current assets associated with discontinued operations — 710,006
−Removed: 710,006 127,341
Prepaid expenses and other current assets 18,539 13,487
10 unchanged sentences
Other assets:
−Removed: Patents, trademarks and other intangible assets, net of accumulated amortization of $ 66,078 in 2020 and $ 60,671 in 2019
−Removed: 41,487 46,182
−Removed: Deferred tax assets, net 52 —
+Added: Other intangibles, net 36,958 41,487
Operating lease right-of-use assets 36,973 43,448
+Added: Investments 11,233 2,675
Other assets 13,736 16,827
−Removed: Long-term assets associated with discontinued operations
Total other assets 98,900 104,437
9 unchanged sentences
Trade accounts payable $ 37,943 $ 22,573
−Removed: Unearned Income 2,675 326
+Added: Compensation and employee benefits 20,811 14,336
+Added: Operating lease liabilities, current portion 8,108 8,795
+Added: Accrued taxes 7,085 4,323
Accrued liabilities and other 21,810 14,012
Current liabilities associated with discontinued operations 1,385 734,039
−Removed: 734,039 102,462
Total current liabilities 97,142 798,078
Long-term debt, net 151,936 199,894
−Removed: Deferred income taxes 1,942 1,777
−Removed: Asset retirement obligations 12,484 12,762
−Removed: Warrants liability 198 449
Operating lease liabilities 31,429 37,569
+Added: Asset retirement obligations 12,984 12,484
+Added: Deferred income taxes 1,669 1,942
Other liabilities 4,543 11,810
−Removed: Long-term liabilities associated with discontinued operations — 653,304
Total long-term liabilities 202,561 263,699
29 unchanged sentences
Impairments and other charges 581 556 92,037
−Removed: Insurance recoveries ( 126 ) ( 1,216 ) —
Total cost of revenues 329,035 310,172 549,434
4 unchanged sentences
Gain on sales of assets ( 1,040 ) ( 2,878 ) ( 1,665 )
−Removed: Warrants fair value adjustment (income) expense ( 251 ) ( 1,624 ) ( 11,129 )
Other (income) expense, net ( 16,428 ) ( 116 ) ( 1,925 )
3 unchanged sentences
( 16,805 ) ( 26,844 ) ( 130,920 )
−Removed: Loss from discontinued operations, net of taxes ( 72,089 ) ( 29,580 ) ( 77,928 )
−Removed: Net loss ( 98,933 ) ( 160,500 ) ( 84,240 )
−Removed: loss attributable to noncontrolling interest ($ 47,898 , $ 13,538 , and $ 22,623 related to discontinued operations)
+Added: Income (loss) from discontinued operations, net of taxes 120,407 ( 72,089 ) ( 29,580 )
+Added: Net income (loss) 103,602 ( 98,933 ) ( 160,500 )
+Added: (income) loss attributable to noncontrolling interest (1)
( 269 ) 47,790 13,087
−Removed: Net loss attributable to TETRA stockholders $ ( 51,143 ) $ ( 147,413 ) $ ( 61,617 )
−Removed: Basic and diluted net loss per common share attributable to TETRA stockholders:
+Added: Net income (loss) attributable to TETRA stockholders $ 103,333 $ ( 51,143 ) $ ( 147,413 )
+Added: Basic and diluted net income (loss) per common share attributable to TETRA stockholders:
Loss from continuing operations
$ ( 0.13 ) $ ( 0.22 ) $ ( 1.04 )
−Removed: Loss from discontinued operations ( 0.19 ) ( 0.13 ) ( 0.45 )
−Removed: Net loss $ ( 0.41 ) $ ( 1.17 ) $ ( 0.50 )
+Added: Income (loss) from discontinued operations 0.95 ( 0.19 ) ( 0.13 )
+Added: Net income (loss) $ 0.82 $ ( 0.41 ) $ ( 1.17 )
Weighted average common shares outstanding:
Basic and diluted 126,602 125,838 125,600
+Added: (1) (Income) loss attributable to noncontrolling interest includes (income) loss from discontinued operations, net of taxes of $( 333 ), $ 47,898 and $ 13,538 for the years ended December 31, 2021, 2020 and 2019, respectively.
See Notes to Consolidated Financial Statements
5 unchanged sentences
2021 2020 2019
−Removed: Net loss ( 98,933 ) ( 160,500 ) ( 84,240 )
+Added: Net income (loss) 103,602 ( 98,933 ) ( 160,500 )
Foreign currency translation gain (loss), net of taxes of $0 in 2021, $0 in 2020, and $0 in 2019 ( 4,623 ) 2,386 ( 188 )
−Removed: Comprehensive loss ( 96,547 ) ( 160,688 ) ( 94,324 )
−Removed: comprehensive loss attributable to noncontrolling interest 47,673 12,755 24,811
−Removed: Comprehensive loss attributable to TETRA stockholders $ ( 48,874 ) $ ( 147,933 ) $ ( 69,513 )
+Added: Comprehensive income (loss) 98,979 ( 96,547 ) ( 160,688 )
+Added: comprehensive (income) loss attributable to noncontrolling interest ( 269 ) 47,673 12,755
+Added: Comprehensive income (loss) attributable to TETRA stockholders $ 98,710 $ ( 48,874 ) $ ( 147,933 )
See Notes to Consolidated Financial Statements
13 unchanged sentences
Comprehensive loss ( 160,688 )
−Removed: Distributions to CCLP public unitholders — — — — — ( 19,224 ) ( 19,224 )
+Added: Distributions to CSI Compressco public unitholders — — — — — ( 1,233 ) ( 1,233 )
Equity award activity ( 2 ) — — — — — ( 2 )
Treasury stock activity, net — — ( 214 ) — — — ( 214 )
−Removed: Issuance of common stock for business combination 77 28,135 28,212
Equity compensation expense — 6,358 — — — 986 7,344
−Removed: Conversions of CCLP Series A Preferred — — — — — 38,322 38,322
+Added: Conversions of CSI Compressco Series A Preferred — — — — — 2,539 2,539
+Added: Cumulative effect adjustment 2,843 2,843
Other — ( 79 ) — — — ( 433 ) ( 512 )
3 unchanged sentences
Comprehensive loss ( 96,547 )
−Removed: Distributions to CCLP public unitholders — — — — — ( 1,233 ) ( 1,233 )
+Added: Distributions to CSI Compressco public unitholders — — — — — ( 1,244 ) ( 1,244 )
Equity award activity 6 — — — — — 6
1 unchanged sentence
Equity compensation expense — 5,184 — — — 1,254 6,438
−Removed: Conversions of CCLP Series A Preferred — — — — — 2,539 2,539
−Removed: Cumulative effect adjustment — — — — 2,843 — 2,843
Other — ( 9 ) — — — ( 88 ) ( 97 )
Balance at December 31, 2020 $ 1,289 $ 472,134 $ ( 19,484 ) $ ( 49,914 ) $ ( 413,665 ) $ 80,702 $ 71,062
−Removed: Net loss for 2020 — — — — ( 51,143 ) ( 47,790 ) ( 98,933 )
+Added: Net income for 2021 — — — — 103,333 269 103,602
Translation adjustment, net of taxes of $0 — — — ( 4,623 ) — — ( 4,623 )
−Removed: Comprehensive loss — — — — — — ( 96,547 )
−Removed: Distributions to CCLP public unitholders — — — — — ( 1,244 ) ( 1,244 )
+Added: Comprehensive income — — — — — — 98,979
+Added: Deconsolidation of CSI Compressco 7,605 — ( 82,775 ) ( 75,170 )
+Added: Dividend — — — — — ( 110 ) ( 110 )
Equity award activity 12 — — — — — 12
11 unchanged sentences
Operating activities:
−Removed: Net loss ( 98,933 ) ( 160,500 ) ( 84,240 )
−Removed: Adjustments to reconcile net loss to net cash provided by operating activities:
+Added: Net income (loss) $ 103,602 $ ( 98,933 ) $ ( 160,500 )
+Added: Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization, and accretion 33,532 118,747 124,278
+Added: (Gain on sale) or loss on disposal of discontinued operations ( 120,137 ) — 7,500
Impairments and other charges 581 20,940 95,196
Impairment of goodwill — — 25,784
−Removed: Benefit for deferred income taxes 188 ( 297 ) ( 888 )
+Added: Unrealized loss on CSI Compressco units
+Added: Realized gain on sale of Standard Lithium shares ( 15,479 ) — —
Equity-based compensation expense 4,664 6,616 8,127
−Removed: Provision for doubtful accounts 6,857 5,039 2,156
−Removed: Loss on disposal of discontinued operations — 7,500 34,072
+Added: (Recovery of) provision for doubtful accounts ( 654 ) 6,857 5,039
Amortization and expense of financing costs 3,091 5,252 4,782
−Removed: Gain from insurance recoveries associated with damaged equipment ( 643 ) ( 1,771 ) —
−Removed: Debt exchange expenses 4,892 — —
−Removed: CCLP Series A Preferred Unit distributions and adjustments — 3,574 4,005
−Removed: Warrants fair value adjustment ( 251 ) ( 1,624 ) ( 11,129 )
−Removed: Contingent consideration liability fair value adjustment — ( 1,000 ) 3,400
+Added: CSI Compressco debt exchange expenses
+Added: CSI Compressco Series A Preferred Unit distributions and adjustments
Gain on sale of assets ( 482 ) ( 4,668 ) ( 2,333 )
+Added: Other non-cash charges and credits ( 805 ) ( 706 ) ( 4,692 )
Changes in operating assets and liabilities, net of assets acquired:
8 unchanged sentences
Acquisition of businesses, net of cash acquired — — ( 12,024 )
−Removed: Proceeds from disposal of business — — 3,121
+Added: Purchase of CarbonFree convertible note ( 5,000 ) — —
+Added: Proceeds from sale of investment 17,627 — —
Proceeds from sale of property, plant, and equipment 1,687 36,168 12,885
5 unchanged sentences
Principal payments on long-term debt ( 50,477 ) ( 487,574 ) ( 258,217 )
−Removed: Distributions to CCLP public unitholders ( 1,244 ) ( 1,233 ) ( 19,224 )
−Removed: Redemptions of CCLP Series A Preferred — ( 28,049 ) —
−Removed: Proceeds from sale of common stock and exercise of stock options — — 251
−Removed: Tax remittances on equity based compensation ( 445 ) ( 581 ) ( 768 )
+Added: Distributions to CSI Compressco public unitholders
+Added: — ( 1,244 ) ( 1,233 )
+Added: Redemptions of CSI Compressco Series A Preferred
+Added: — — ( 28,049 )
Debt issuance costs and other financing activities ( 1,191 ) ( 6,458 ) ( 1,016 )
−Removed: Net cash provided by (used in) financing activities ( 17,629 ) ( 5,925 ) 154,994
+Added: Net cash used in financing activities ( 50,054 ) ( 17,629 ) ( 5,925 )
Effect of exchange rate changes on cash ( 1,771 ) 805 ( 199 )
−Removed: Increase (decrease) in cash and cash equivalents and restricted cash 66,126 ( 22,334 ) 13,713
+Added: (Decrease) increase in cash and cash equivalents and restricted cash ( 52,343 ) 66,126 ( 22,334 )
Cash and cash equivalents and restricted cash at beginning of period 83,894 17,768 40,102
+Added: Cash and cash equivalents at beginning of period associated with discontinued operations 16,577 2,370 15,858
+Added: Cash and cash equivalents and restricted cash at beginning of period associated with continuing operations 67,317 15,398 24,244
Cash and cash equivalents and restricted cash at end of period 31,551 83,894 17,768
−Removed: Cash and cash equivalents at end of period associated with discontinued operations ( 16,577 ) ( 2,370 ) ( 15,858 )
+Added: Cash and cash equivalents and restricted cash at end of period associated with discontinued operations — 16,577 2,370
Cash and cash equivalents and restricted cash at end of period associated with continuing operations $ 31,551 $ 67,317 $ 15,398
−Removed: Supplemental cash flow information:
−Removed: Interest paid $ 63,935 $ 68,332 $ 56,261
−Removed: Income taxes paid 5,633 7,274 4,680
−Removed: Accrued capital expenditures 1,573 3,625 1,561
See Notes to Consolidated Financial Statements
4 unchanged sentences
NOTE 1 — ORGANIZATION AND OPERATIONS
−Removed: We are a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, comprehensive water management, frac flowback and production well testing.
+Added: We are an industrial oil and gas products and services company operating on six continents, focused on bromine-based completion fluids, calcium chloride, water management solutions, frac flowback and production well testing services.
We were incorporated in Delaware in 1981.
−Removed: Our products and services are delivered through two reporting segments – Completion Fluids & Products and Water & Flowback Services.
+Added: Our products and services are delivered through two reporting segments – Completion Fluids & Products Division and Water & Flowback Services Division.
Unless the context requires otherwise, when we refer to “we,” “us,” and “our,” we are describing TETRA Technologies, Inc.
3 unchanged sentences
Our Water & Flowback Services Division provides onshore oil and gas operators with comprehensive water management services.
−Removed: The Division also provides frac flowback, production well testing, offshore rig cooling, and other associated services in many of the major oil and gas producing regions in the United States and Mexico, as well as in oil and gas basins in certain countries in Latin America, Europe, and the Middle East.
+Added: The Division also provides frac flowback, production well testing, and other associated services in many of the major oil and gas producing regions in the United States and Mexico, as well as in oil and gas basins in certain countries in Latin America, Europe, and the Middle East.
NOTE 2 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
1 unchanged sentence
Our consolidated financial statements include the accounts of our wholly owned subsidiaries.
−Removed: We consolidated the financial statements of our former CSI Compressco LP subsidiary (“CCLP”), as we determined that CCLP was a variable interest entity and we were the primary beneficiary as of December 31, 2020.
−Removed: As of December 31, 2020, we controlled the financial interests of CCLP and had the ability to direct the activities of CCLP that most significantly impacted its economic performance through our ownership of its general partner.
−Removed: As of December 31, 2020, our cash flows from our investment in CCLP were limited to the quarterly distributions we received on our CCLP common units and general partner interest (including incentive distribution rights (“IDRs”)) and the amounts collected for services we performed on behalf of CCLP.
−Removed: TETRA’s capital structure and CCLP’s capital structure are separate, and do not include cross default provisions, cross collateralization provisions or cross guarantees.
All intercompany accounts and transactions have been eliminated in consolidation.
−Removed: Substantially all of our former Compression Division’s operations were conducted through our partially-owned CCLP subsidiary.
−Removed: On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners LP and Spartan Energy Holdco, LLC (together, “Spartan”) pursuant to which we sold the general partner of CCLP, including the IDRs in CCLP and approximately 23.1% of the outstanding limited partner interests in CCLP, in exchange for a combination of $13.4 million in cash paid at closing, $0.5 million in cash payable on the six-month anniversary of the closing and $3.1 million in contingent consideration in the form of cash and/or CCLP common units if CCLP achieves certain financial targets on or before December 31, 2022.
−Removed: Following the closing of the transaction, we retained approximately 11.1% of the outstanding CCLP common units.
−Removed: Throughout this Annual Report, we refer to the transaction with Spartan as the “GP Sale.” We have reflected the operations of our former Compression Division as discontinued operations for all periods presented.
−Removed: See Note 3 - “Discontinued Operations” and Note 18 - “Subsequent Event.” for further information.
+Added: Our former subsidiary, CSI Compressco LP (“CSI Compressco”) is a publicly traded limited partnership with its common units traded on the NASDAQ Exchange (“NASDAQ”) under the symbol “CCLP.” TETRA’s capital structure and CSI Compressco’s capital structure were separate, and did not include cross default provisions, cross collateralization provisions or cross guarantees.
+Added: Through January 29, 2021, our cash flows from our investment in CSI Compressco were limited to the quarterly distributions we received on our CSI Compressco common units and general partner interest (including incentive distribution rights (“IDRs”)) and the amounts collected for services we performed on behalf of CSI Compressco.
+Added: Through January 29, 2021, CSI Compressco was determined to be a variable interest entity and we, through our ownership of the general partner in CSI Compressco, controlled the financial interests of CSI Compressco and had the ability to direct the activities of CSI Compressco that most significantly impacted its economic performance.
+Added: As such, we were considered the primary beneficiary and consolidated the financial statements of CSI Compressco through January 29, 2021.
+Added: On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners LP and Spartan Energy Holdco, LLC (together, “Spartan”) pursuant to which we sold the general partner of CSI Compressco, including the IDRs in CSI Compressco and approximately 23.1 % of the outstanding limited partner interests in CSI Compressco, in exchange for a combination of $ 13.9 million in cash and $ 3.1 million in contingent consideration in the form of cash and/or CSI Compressco common units if CSI Compressco achieves certain financial targets on or before December 31, 2022.
+Added: Following the closing of the transaction, we retained an interest in CSI Compressco representing approximately 3.8 % of the outstanding common units as of December 31, 2021.
+Added: We refer to this transaction with Spartan as the “GP Sale.” Substantially all of our former Compression Division’s operations were conducted through our partially-owned CSI Compressco subsidiary.
+Added: We have reflected the operations of our former Compression Division as discontinued operations for all periods presented.
+Added: See Note 3 - “Discontinued Operations” for further information.
Use of Estimates
1 unchanged sentence
generally accepted accounting principles (“U.S.
−Removed: GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported
−Removed: amounts of revenues, expenses and impairments during the reporting period.
+Added: GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and impairments during the reporting period.
Actual results could differ from those estimates, and such differences could be material.
9 unchanged sentences
We generally require appropriate, additional collateral as security for credit amounts in excess of approved limits.
−Removed: Our customers consist primarily of major, well-established oil and gas producers and independent oil and gas companies.
+Added: Our customers consist primarily of major, well-established oil and gas producers and independent oil and gas companies, as well as industrial, agricultural, road, and food and beverage purchasers for the chemicals we manufacture.
Payment terms are on a short-term basis.
1 unchanged sentence
Our risk management activities include the use of foreign currency forward purchase and sale derivative contracts as part of a program designed to mitigate the currency exchange rate risk exposure on selected international operations.
−Removed: We have no outstanding balance under our variable rate revolving credit facilities as of December 31, 2020.
+Added: We have $ 1.6 million outstanding balance under our variable rate revolving credit facilities as of December 31, 2021.
Outstanding balances on variable-rate bank credit facilities create market risk exposure related to changes in applicable interest rates.
8 unchanged sentences
Provision for doubtful accounts ( 4 ) 5,672 2,580
−Removed: Account (chargeoffs) recoveries ( 760 ) ( 2,022 ) ( 166 )
+Added: Account (charge offs) recoveries, net ( 6,531 ) ( 760 ) ( 2,022 )
At end of period $ 289 $ 6,824 $ 1,912
15 unchanged sentences
Intangible Assets other than Goodwill
−Removed: Patents, trademarks, and other intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 1 to 13 years.
−Removed: Amortization expense of patents, trademarks, and other intangible assets was $ 5.3 million, $ 5.1 million, and $ 4.3 million for the years ended December 31, 2020, 2019, and 2018, respectively, and is included in depreciation, amortization and accretion.
−Removed: The estimated future annual amortization expense of patents, trademarks, and other intangible assets is $ 4.5 million for 2021, $ 4.1 million for 2022, $ 3.8 million for 2023, $ 3.7 million for 2024, and $ 3.7 million for 2025.
+Added: Customer relationships, trademarks, tradenames, marketing rights and other intangible assets are amortized on a straight-line basis over their estimated useful lives, with remaining useful lives up to 12 years.
+Added: Amortization of intangible assets was $ 5.1 million, $ 5.3 million, and $ 5.1 million for the years ended December 31, 2021, 2020, and 2019, respectively, and is included in depreciation, amortization and accretion.
+Added: The estimated future annual amortization expense of intangible assets is $ 4.1 million for 2022, $ 3.8 million for 2023, $ 3.7 million for 2024, $ 3.7 million for 2025, $ 3.6 million for 2026 and $ 18.1 million thereafter.
+Added: See Note 5 - “Intangibles” for additional discussion.
Intangible assets other than goodwill are tested for recoverability whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.
1 unchanged sentence
If an impairment has occurred, we will recognize a loss for the difference between the carrying value and the estimated fair value of the intangible asset.
−Removed: During 2018, certain intangible assets were impaired.
See “Impairments of Long-Lived Assets” section in Note 6 - “Impairments and Other Charges”.
−Removed: Goodwill represents the excess of cost over the fair value of the net assets acquired in business combinations.
−Removed: We perform a goodwill impairment test at a reporting unit level on an annual basis or whenever indicators of impairment are present.
−Removed: We perform the annual test of goodwill impairment as of the last day of the fourth quarter of each year.
−Removed: The first step of the impairment test is to compare the estimated fair value of the reporting unit to its recorded net book value (including goodwill).
−Removed: If the estimated fair value is higher than the recorded net book value, no impairment is deemed to exist and no further testing is required.
−Removed: If, however, the carrying amount of the reporting unit exceeds its estimated fair value, an impairment loss is calculated based on the difference between the fair value and carrying value.
−Removed: These estimates are imprecise and are subject to our estimates of the future cash flows of the reporting unit.
−Removed: These estimates and judgments are affected by numerous factors, including the general economic environment at the time of our assessment.
−Removed: During the fourth quarter of 2019, we recorded an impairment on all our remaining goodwill.
−Removed: See Note 5 - “Goodwill” for additional discussion.
As a lessee, unless the lease meets the criteria of short-term and is excluded per our policy election described below, we initially recognize a lease liability and related right-of-use asset on the commencement date.
The right-of-use asset represents our right to use an underlying asset and the lease liability represents our obligation to make lease payments to the lessor over the lease term.
−Removed: Long-term operating leases are included in operating lease right-of-use assets, accrued liabilities and other, and operating lease liabilities in our consolidated balance sheet as of December 31, 2020.
+Added: Long-term operating leases are included in operating lease right-of-use assets, operating lease liabilities - current portion, and operating lease liabilities in our consolidated balance sheet as of December 31, 2021.
Long-term finance leases are not material.
3 unchanged sentences
Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to exercise.
−Removed: The lease payments for short-term leases are included as operating lease costs on a straight-line basis over the lease term in cost of revenues or general and administrative expense based on the use of the underlying asset.
+Added: The lease payments for short-term leases are included as operating lease costs on a straight-line basis
+Added: over the lease term in cost of revenues or general and administrative expense based on the use of the underlying asset.
We recognize lease costs for variable lease payments not included in the determination of a lease liability in the period in which an obligation is incurred.
−Removed: As allowed by U.S.
−Removed: GAAP, CCLP does not separate nonlease components from the associated lease component for its compression services contracts and instead accounts for those components as a single component based on the accounting treatment of the predominant component.
−Removed: In the evaluation of whether Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 842 “Leases” or ASC 606 “Revenue from Contracts with Customers” is applicable to the combined component based on the predominant component, CCLP determined the services nonlease component is predominant, resulting in the ongoing recognition of compression services contracts following ASC 606.
Our operating and finance leases are recognized at the present value of lease payments over the lease term.
7 unchanged sentences
See Note 6 - “Impairments and Other Charges” for additional discussion of recorded impairments.
−Removed: Asset Retirement Obligations
−Removed: We operate facilities in various U.S.
−Removed: and foreign locations that are used in the manufacture, storage, and sale of our products, inventories, and equipment.
−Removed: These facilities are a combination of owned and leased assets.
−Removed: We are required to take certain actions in connection with the retirement of these assets.
−Removed: Asset retirement obligations are recorded in accordance with ASC 410, “Asset Retirement and Environmental Obligations,” whereby the estimated fair value of a liability for asset retirement obligations is recognized in the period in which it is incurred and in which a reasonable estimate can be made.
−Removed: Such estimates are based on relevant assumptions that we believe are reasonable.
−Removed: We have reviewed our obligations in this regard in detail and estimated the cost of these actions.
−Removed: The associated asset retirement costs are capitalized as part of the carrying amount of these long-lived assets and are depreciated on a straight-line basis over the life of the assets.
−Removed: Environmental Liabilities
−Removed: Environmental expenditures that result in additions to property and equipment are capitalized, while other environmental expenditures are expensed.
−Removed: Environmental remediation liabilities are recorded on an undiscounted basis when environmental assessments or cleanups are probable and the costs can be reasonably estimated.
−Removed: We have no significant environmental remediation liabilities as of December 31, 2020 and 2019.
−Removed: Estimates of future environmental remediation expenditures often consist of a range of possible expenditure amounts, a portion of which may be in excess of amounts of liabilities recorded.
−Removed: In such an instance, we disclose the full range of amounts reasonably possible of being incurred.
−Removed: Any changes or developments in environmental remediation efforts are accounted for and disclosed each quarter as they occur.
−Removed: Any recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable.
−Removed: Complexities involving environmental remediation efforts can cause estimates of the associated liability to be imprecise.
−Removed: Factors that cause uncertainties regarding the estimation of future expenditures include, but are not limited to, the effectiveness of the anticipated work plans in achieving targeted results and changes in the desired remediation methods and outcomes as prescribed by regulatory agencies.
−Removed: Uncertainties associated with environmental remediation contingencies are pervasive and often result in wide ranges of reasonably possible outcomes.
−Removed: Estimates developed in the early stages of remediation can vary significantly.
−Removed: Normally, a finite estimate of cost does not become fixed and determinable at a specific point in time.
−Removed: Rather, the costs associated with environmental remediation become estimable as the work is performed and the range of ultimate cost becomes more defined.
−Removed: It is possible that cash flows and results of operations could be materially affected by the impact of the ultimate resolution of these contingencies.
Revenue Recognition
20 unchanged sentences
In recognizing revenue for variable consideration arrangements, the amount of variable consideration recognized is limited so that it is probable that significant amounts of revenues will not be reversed in future periods when the uncertainty is resolved.
−Removed: For products returned by the customer, we estimate the expected returns based on an analysis of historical experience.
+Added: For products returned by the customer, we estimate the expected
+Added: returns based on an analysis of historical experience.
For volume discounts earned by the customer, we estimate the discount (if any) based on our estimate of the total expected volume of products sold or services to be provided to the customer during the discount period.
22 unchanged sentences
We are party to agreements in which Standard Lithium has the right to explore, produce and extract lithium in our Arkansas leases as well as additional potential resources in the Mojave region of California.
−Removed: The Company receives cash and stock of Standard Lithium (TSXV:
−Removed: SLL) under the terms of the arrangements.
+Added: The Company receives cash and stock of Standard Lithium under the terms of the arrangements.
The cash and stock component of consideration received is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term.
1 unchanged sentence
This income is included in other income (expense), net in our consolidated statements of operations.
−Removed: Unearned revenue associated with these agreements was 0.9 million and 0.2 million as of December 31, 2020 and 2019, respectively, and is included in unearned income on our consolidated balance sheets.
+Added: We also recognized $ 15.5 million of income during 2021 from the sale of our shares in Standard Lithium.
See Note 14 - “Fair Value Measurements” for further discussion.
10 unchanged sentences
Noncontrolling interests represent third-party ownership in the net assets of the Company’s consolidated subsidiaries and are presented as a component of equity.
−Removed: Substantially all of the Company’s noncontrolling interests represent third-party ownership in CCLP.
+Added: Substantially all of the Company’s noncontrolling interests represented third-party ownership in CSI Compressco prior to the GP sale in January 2021.
Accumulated Other Comprehensive Income (Loss)
6 unchanged sentences
The calculation of basic earnings per share excludes any dilutive effects of equity awards or warrants.
−Removed: calculation of diluted earnings per share includes the effect of equity awards and warrants, if dilutive, which is computed using the treasury stock method during the periods such equity awards and warrants were outstanding.
+Added: The calculation of diluted earnings per share includes the effect of equity awards and warrants, if dilutive, which is
+Added: computed using the treasury stock method during the periods such equity awards and warrants were outstanding.
For the years ended December 31, 2021, 2020, and 2019, the average diluted shares outstanding excludes the impact of all outstanding equity awards and warrants, as the inclusion of these shares would have been anti-dilutive due to the net losses recorded during the year.
Foreign Currency Translation
−Removed: We have designated the euro, the British pound, the Norwegian krone, the Canadian dollar, the Brazilian real, and the Mexican peso as the functional currencies for our operations in Finland and Sweden, the United Kingdom, Norway, Canada, Brazil, and certain of our operations in Mexico, respectively.
−Removed: dollar is the designated functional currency for all of our other foreign operations.
+Added: We have designated the Euro, the British pound, the Canadian dollar, the Brazilian real, and the Mexican peso as the functional currencies for our operations in Finland and Sweden, the United Kingdom, Canada, Brazil, and certain of our operations in Mexico, respectively.
+Added: The United States dollar is the designated functional currency for all of our other non-U.S.
The cumulative translation effects of translating the applicable accounts from the functional currencies into the U.S.
1 unchanged sentence
Foreign currency exchange (gains) and losses are included in other (income) expense, net, and totaled $( 1.4 ) million, $ 2.7 million, and $( 0.5 ) million for the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: On June 30, 2018, we determined the economy in Argentina to be highly inflationary.
−Removed: As a result of this determination and in accordance with U.S.
−Removed: GAAP, on July 1, 2018, the functional currency of our operations in Argentina was changed from the Argentine peso to the U.S.
+Added: During 2021, we determined our business operations in Norway were primarily operating using the United States dollar.
+Added: Effective July 1, 2021, the functional currency of our operations in Norway was changed from the Norwegian krone to the United States dollar.
The remeasurement did not have a material impact on our consolidated financial position or results of operations.
1 unchanged sentence
We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements.
−Removed: Fair value measurements are utilized on a recurring basis in the determination of the carrying values of certain liabilities, including the liabilities for the warrants to purchase 11.2 million shares of our common stock (the “Warrants”) and our foreign currency derivative contracts.
+Added: Fair value measurements are utilized on a recurring basis in the determination of the carrying values of certain investments.
See Note 14 - “Fair Value Measurements” for further discussion.
Fair value measurements are also utilized on a nonrecurring basis in certain circumstances, such as in the allocation of purchase consideration for acquisition transactions to the assets and liabilities acquired, including intangible assets and goodwill (a Level 3 fair value measurement), the initial recording of our asset retirement obligations, and for the impairment of long-lived assets, including goodwill (a Level 3 fair value measurement).
+Added: Supplemental Cash Flow Information
+Added: Supplemental cash flow information from continuing and discontinued operations is as follows:
+Added: Year Ended December 31,
+Added: 2021 2020 2019
+Added: (in thousands)
+Added: Supplemental cash flow information (1) :
+Added: Interest paid
+Added: $ 14,347 $ 63,935 $ 68,332
+Added: Income taxes paid
+Added: 2,100 5,633 7,274
+Added: Accrued capital expenditures at year end 7,491 1,573 3,625
+Added: (1) Prior-year information includes the activity for CSI Compressco for the full period.
+Added: Current-year information includes activity for CSI Compressco for January only.
New Accounting Pronouncements
Standards adopted in 2021
−Removed: In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
−Removed: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”.
−Removed: ASU 2018-15 clarifies the accounting for implementation costs in cloud computing arrangements.
+Added: In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740):
+Added: Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocation, interim period income tax calculation methodology, and the recognition of deferred tax liabilities for outside basis differences.
+Added: It also simplifies certain aspects of accounting for franchise taxes and clarifies the accounting for transactions that results in a step-up in the tax basis of goodwill.
On January 1, 2021, we adopted ASU 2019-12.
9 unchanged sentences
We continue to assess the potential effects of these changes to our consolidated financial statements.
−Removed: In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes”.
−Removed: ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to intraperiod tax allocation, interim period income tax calculation methodology, and the recognition of deferred tax liabilities for outside basis differences.
−Removed: It also simplifies certain aspects of accounting for franchise taxes and clarifies the accounting for transactions that results in a step-up in the tax basis of goodwill.
−Removed: ASU 2019-12 is effective for us the first quarter of fiscal 2021.
−Removed: We continue to assess the potential effects of these changes to our consolidated financial statements
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)”, which provides optional expedients and exceptions for applying U.S.
GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued.
−Removed: The amendments are effective for all entities as of March 12, 2020 through December 31, 2022.
−Removed: Entities may elect to apply the amendments for contract modifications as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020.
−Removed: As of December 31, 2020, we have not modified our credit agreements to remove references to LIBOR.
−Removed: We are currently evaluating the impact of the provisions of ASU 2020-04 on our consolidated financial statements.
+Added: Entities may elect to apply the amendments for contract modifications made on or before December 31, 2022.
+Added: During the three months ended September 30, 2021, our asset-based credit agreement and term credit agreement were amended to allow replacement of LIBOR with another benchmark rate, such as the secured overnight financing rate (“SOFR”) in the event that LIBOR cannot be determined or does not fairly reflect the cost to our lenders of funding our loans.
+Added: If LIBOR is not available, we cannot predict what alternative index would be negotiated with our lenders.
+Added: We will assess the impact of adopting ASU 2020-04 on our consolidated financial statements if or when our contracts are modified to eliminate references to LIBOR.
NOTE 3 – DISCONTINUED OPERATIONS
−Removed: As discussed in Note 18 - “Subsequent Event,” on January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan pursuant to which we sold the general partner of CCLP, including the IDRs in CCLP and approximately 23.1% of the outstanding limited partner interests in CCLP.
−Removed: Our interest in CCLP and the general partner represented substantially all of our Compression Division.
−Removed: As of December 31, 2020, our Compression Division met the held for sale criteria and is reflected as discontinued operations in our financial statements for all periods presented.
−Removed: In addition, as discussed in Note 11 - “Acquisitions and Dispositions,” on March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division.
−Removed: As a result, we have accounted for our Offshore Division, consisting of our Offshore Services and Maritech segments, as discontinued operations.
−Removed: During the third quarter of 2019, as a result of the bankruptcy filing of Epic Companies, LLC, we recorded a reserve for the full amount of certain other receivables of discontinued operations related to our offshore division in the amount of $ 1.5 million and for the full amount of a $ 7.5 million promissory note, including accrued interest, that we received as part of the consideration for the sale.
−Removed: See Note 12 - “Commitments and Contingencies” for further discussion.
+Added: On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan pursuant to which we sold the general partner of CSI Compressco, including the IDRs in CSI Compressco and approximately 23.1 % of the outstanding limited partner interests in CSI Compressco.
+Added: As a result of these transactions, we no longer consolidate CSI Compressco as of January 29, 2021.
+Added: We recognized a primarily non-cash accounting gain of $ 120.1 million during the year ended December 31, 2021 related to the GP Sale.
+Added: The gain is included in income (loss) from discontinued operations, net of taxes in our consolidated statement of operations.
+Added: We also provided back-office support to CSI Compressco under a Transition Services Agreement for one year until CSI Compressco completed a full separation from our back-office support functions.
+Added: During the year ended December 31, 2021, we received $ 7.0 million from CSI Compressco for services provided under the Transition Services Agreement and other reimbursements and paid $ 0.5 million to CSI Compressco for reimbursement of expenses.
+Added: Our interest in CSI Compressco and the general partner represented substantially all of our Compression Division.
+Added: In addition, on March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division, consisting of our Offshore Services and Maritech segments.
+Added: Our former Compression and Offshore Divisions are reported as discontinued operations for all periods presented.
Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations.
−Removed: Our consolidated statements of comprehensive income, statements of equity
−Removed: and statements of cash flows combine continuing and discontinued operations.
+Added: Our consolidated statements of comprehensive income, statements of equity and statements of cash flows combine continuing and discontinued operations.
+Added: Our current-year consolidated statement of operations, statement of comprehensive income, statement of equity and statement of cash flows include CSI Compressco activity for January 1 through January 29.
+Added: Our consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019 included $ 3.0 million, $ 14.7 million and $ 75.8 million, respectively, of capital expenditures related to our former Compression division.
+Added: Our consolidated statements of cash flows also included $ 411.1 million of proceeds from long-term debt, $ 413.1 million of payments of long-term debt, $ 19.4 million from proceeds from sale of property, plant and equipment, $ 4.9 million of debt exchange expenses and $ 2.6 million from amortization of deferred financing discounts, costs and gains for the year ended December 31, 2020, and included $ 45.0 million of proceeds from long-term debt, $ 41.6 million of payments of long-term debt, $ 11.0 million from proceeds from sale of property, plant and equipment, and $ 2.6 million from amortization of deferred financing discounts, costs and gains for the year ended December 31, 2019.
+Added: Our current-year results do not include CSI Compressco depreciation or amortization as the assets were considered held for sale.
A summary of financial information related to our discontinued operations is as follows:
5 unchanged sentences
Cost of revenues 11,471 ( 142 ) 11,329
−Removed: Depreciation, amortization, and accretion 80,533 — 80,533
−Removed: Impairments and other charges 20,841 — 20,841
General and administrative expense 2,766 ( 179 ) 2,587
Interest expense, net 4,336 — 4,336
−Removed: Other (income) expense, net 2,688 — 2,688
−Removed: Pretax loss from discontinued operations ( 68,735 ) ( 143 ) ( 68,878 )
+Added: Other expense, net 164 252 416
+Added: Pretax income from discontinued operations 231 69 300
+Added: Pretax income on disposal of discontinued operations 120,137
+Added: Total pretax income from discontinued operations 120,437
Income tax provision 30
−Removed: Loss from discontinued operations ( 72,089 )
−Removed: Loss from discontinued operations attributable to noncontrolling interest 47,898
−Removed: Loss from discontinued operations attributable to TETRA stockholders $ ( 24,191 )
+Added: Income from discontinued operations 120,407
+Added: Income from discontinued operations attributable to noncontrolling interest ( 333 )
+Added: Income from discontinued operations attributable to TETRA stockholders $ 120,074
December 31, 2020
−Removed: Compression Offshore Services Maritech Total
+Added: Compression Offshore Services Total
Revenue 338,246 — 338,246
1 unchanged sentence
Depreciation, amortization, and accretion 80,533 — 80,533
+Added: Impairments and other charges 20,841 — 20,841
General and administrative expense 37,895 473 38,368
Interest expense, net 52,771 — 52,771
−Removed: CCLP Series A Preferred Units fair value adjustment (income) expense 1,309 — — 1,309
−Removed: Other (income) expense, net ( 558 ) 117 118 ( 323 )
+Added: Other expense, net 2,688 — 2,688
Pretax loss from discontinued operations ( 68,735 ) ( 143 ) ( 68,878 )
−Removed: Pretax loss on disposal of discontinued operations ( 7,500 )
−Removed: Total pretax loss from discontinued operations ( 26,227 )
Income tax provision 3,211
9 unchanged sentences
Interest expense, net 51,974 — — 51,974
−Removed: CCLP Series A Preferred Units fair value adjustment (income) expense ( 733 ) — — ( 733 )
+Added: CSI Compressco Series A Preferred Units fair value adjustment expense
+Added: 1,309 — — 1,309
Other (income) expense, net ( 558 ) 117 118 ( 323 )
9 unchanged sentences
December 31, 2021
−Removed: Compression Offshore Services Maritech Total
−Removed: Carrying amounts of major classes of assets included as part of discontinued operations
−Removed: Cash and cash equivalents $ 16,577 $ — $ — $ 16,577
−Removed: Trade receivables 43,837 — — 43,837
−Removed: Inventories 31,220 — — 31,220
−Removed: Other current assets 5,231 — — 5,231
−Removed: Property, plant, and equipment 551,401 — — 551,401
−Removed: Other assets 61,740 — — 61,740
−Removed: Total assets associated with discontinued operations (1)
−Removed: $ 96,865 $ — $ — $ 710,006
+Added: Offshore Services Maritech Total
Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables $ 1,157 $ — $ 1,157
−Removed: Unearned income 269 — — 269
Accrued liabilities and other — 228 228
−Removed: Long-term debt, net 638,631 — — 638,631
−Removed: Other liabilities 37,253 — — 37,253
Total liabilities associated with discontinued operations $ 1,157 $ 228 $ 1,385
−Removed: $ 732,237 $ 1,574 $ 228 $ 734,039
−Removed: (1) All assets and liabilities associated with discontinued operations of our former Compression Division are classified as current as of December 31, 2020 due to completion of the GP Sale within one year.
December 31, 2020
5 unchanged sentences
Other current assets 5,231 — — 5,231
−Removed: Current assets associated with discontinued operations (1)
−Removed: $ 127,341 $ — $ — $ 127,341
Property, plant, and equipment 551,401 — — 551,401
Other assets 61,740 — — 61,740
−Removed: Long-term assets associated with discontinued operations (1)
+Added: Total assets associated with discontinued operations (1)
$ 710,006 $ — $ — $ 710,006
−Removed: Total major classes of assets of the discontinued operations $ 822,699 $ — $ — $ 822,699
Carrying amounts of major classes of liabilities included as part of discontinued operations
2 unchanged sentences
Accrued liabilities and other 36,318 352 228 36,898
−Removed: Current liabilities associated with discontinued operations (1)
−Removed: $ 100,364 $ 1,978 $ 120 $ 102,462
Long-term debt, net 638,631 — — 638,631
Other liabilities 37,253 — — 37,253
−Removed: Long-term liabilities associated with discontinued operations (1)
+Added: Total liabilities associated with discontinued operations (1)
$ 732,237 $ 1,574 $ 228 $ 734,039
−Removed: Total major classes of liabilities of the discontinued operations $ 753,668 $ 1,978 $ 120 $ 755,766
+Added: (1) All assets and liabilities associated with discontinued operations of our former Compression Division are classified as current as of December 31, 2020 due to completion of the GP Sale within one year.
NOTE 4 — REVENUE FROM CONTRACTS WITH CUSTOMERS
Our contract asset balances, primarily associated with customer documentation requirements, were $ 20.5 million, $ 12.8 million and $ 25.3 million as of December 31, 2021, 2020 and 2019, respectively.
−Removed: The decrease in contract asset balances is primarily due to lower activity in our Water & Flowback Services Division driven by the significant reduction in capital spending by our customers in response to the decline in oil prices.
Contract assets, along with billed trade accounts receivable, are included in trade accounts receivable in our consolidated balance sheets.
1 unchanged sentence
Unearned income balances were $ 3.2 million and $ 1.9 million as of December 31, 2021 and 2020, respectively, and vary based on the timing of invoicing and performance obligations being met.
−Removed: Revenues recognized during the years ended December 31, 2020 and 2019 deferred as of the end of the preceding year was not significant.
+Added: Unearned income is included in accrued liabilities and other in our consolidated balance sheets.
+Added: Revenue recognized during the years ended December 31, 2021 , 2020 and 2019 deferred as of the end of the preceding year was not significant.
During the years ended December 31, 2021 , 2020 and 2019 , contract costs were not significant.
−Removed: Disaggregation of Revenue.
We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our two reportable segments in Note 17 - Industry Segments and Geographic Information .
4 unchanged sentences
Completion Fluids & Products
−Removed: $ 100,076 $ 149,191 $ 129,160
+Added: United States $ 96,291 $ 100,076 $ 149,191
International 123,357 142,585 130,064
1 unchanged sentence
Water & Flowback Services
−Removed: 125,759 262,093 261,238
+Added: United States 155,495 125,759 262,093
International 13,129 9,295 19,893
168,624 135,054 281,986
−Removed: Interdivision eliminations
−Removed: International — — ( 383 )
Total Revenue
−Removed: 225,835 411,284 390,403
+Added: United States 251,786 225,835 411,284
International 136,486 151,880 149,957
$ 388,272 $ 377,715 $ 561,241
−Removed: NOTE 5 — GOODWILL
−Removed: Our Water & Flowback Services Division consists of two reporting units, Production Testing and Water Management.
−Removed: During the third quarter of 2019, as part of our internal long-term outlook for each of these reporting units, we updated our assessment of the Water Management reporting unit and determined that the current decreased energy industry outlook was an indicator requiring further analysis for impairment of goodwill.
−Removed: As part of the first step of goodwill impairment testing for our Water Management reporting unit, the only reporting unit with goodwill, we updated our assessment of the future cash flows, applying expected long-term growth rates, discount rates, and terminal values that we consider reasonable for the reporting unit.
−Removed: We calculated a present value of the cash flows for the Water Management reporting unit to arrive at an estimate of fair value using a combination of the income approach and the market approach.
−Removed: Based on these assumptions, we determined that the fair value of the Water Management reporting unit exceeded its carrying value, resulting in no impairment at September 30, 2019.
−Removed: During the fourth quarter of 2019, coinciding with the timing of our annual goodwill assessment, there was further decline in the energy industry outlook resulting in decreased expected future cash flows for our Water Management reporting unit.
−Removed: As part of the first step of goodwill impairment testing for our Water Management reporting unit, the only reporting unit with goodwill, we updated our assessment of the future cash flows, applying expected long-term growth rates, discount rates, and terminal values that we consider reasonable for the reporting unit.
−Removed: We calculated a present value of the cash flows for the Water Management reporting unit to arrive at an estimate of fair value using a combination of the income approach and the market approach.
−Removed: Based on these assumptions, we determined that the fair value of the Water Management reporting unit was less than its carrying value indicating an impairment.
−Removed: The amount of impairment is calculated based on the difference between the fair value and carrying value in accordance with our early adoption of ASU 2017-04 “Intangibles-Goodwill and Other (Topic 350):
−Removed: Simplifying the Test for Goodwill Impairment.” This resulted in an impairment of the entire goodwill balance of $ 25.8 million at December 31, 2019.
−Removed: The changes in the carrying amount of goodwill for the Water & Flowback Services reporting segment were as follows:
+Added: NOTE 5 — INTANGIBLES
+Added: The components of intangible assets and their related accumulated amortization are as follows:
+Added: December 31, 2021
+Added: Gross Intangibles Accumulated Amortization Net Intangibles
(In Thousands)
−Removed: Balance as of December 31, 2017 $ 6,636
−Removed: Goodwill acquired during the year 19,223
−Removed: Balance as of December 31, 2018 25,859
−Removed: Goodwill impaired during the year ( 25,784 )
−Removed: Goodwill adjustments ( 75 )
−Removed: Balance as of December 31, 2019 and 2020 —
+Added: Customer Relationships $ 56,122 $ ( 24,470 ) $ 31,652
+Added: Trademarks and Tradenames 4,658 ( 2,091 ) 2,567
+Added: Marketing Rights 14,630 ( 13,310 ) 1,320
+Added: Other intangibles 5,871 ( 4,452 ) 1,419
+Added: Total intangibles $ 81,281 $ ( 44,323 ) $ 36,958
+Added: December 31, 2020
+Added: Gross Intangibles Accumulated Amortization Net Intangibles
+Added: (In Thousands)
+Added: Customer Relationships $ 56,117 $ ( 21,579 ) $ 34,538
+Added: Trademarks and Tradenames 4,672 ( 1,703 ) 2,969
+Added: Marketing Rights 14,728 ( 12,726 ) 2,002
+Added: Other intangibles 6,039 ( 4,061 ) 1,978
+Added: Total intangibles $ 81,556 $ ( 40,069 ) $ 41,487
NOTE 6 — IMPAIRMENTS AND OTHER CHARGES
Impairments of Long-Lived Assets
−Removed: During 2020, we recorded an impairment charge of $ 0.6 million primarily related to a right of use asset for the lease of our Canada office within our Water & Flowback Services Division as we ceased use of the office during the year.
During the fourth quarter of 2019, we recorded an impairment of $ 91.6 million in our Completion Fluids & Products Division related to our El Dorado, Arkansas calcium chloride production plant facility assets.
−Removed: The impairment charge is primarily the result of a reduction in the cost of raw materials for certain of our other chemical production plants, following the execution of a long-term raw material supply agreement during the fourth quarter of 2019.
−Removed: As a result, we expect to reduce our dependence on calcium chloride produced at the El Dorado facility, which uses a different production process, involving mechanical evaporation.
−Removed: In addition, demand for calcium chloride from the El Dorado plant is expected to be reduced due to general market conditions in the oil and gas industry.
+Added: The impairment charge was primarily the result of a reduction in the cost of raw materials for certain of our other chemical production plants, following the execution of a long-term raw material supply agreement during the fourth quarter of 2019.
+Added: As a result, we expected to reduce our dependence on calcium chloride produced at the El Dorado facility, which used a different production process, involving mechanical evaporation.
+Added: In addition, demand for calcium chloride from the El Dorado plant was expected to be reduced due to general market conditions in the oil and gas industry.
Using the reduced expected future net cash flows on an undiscounted basis, we determined that the carrying value of the El Dorado facility was not recoverable.
Fair value of the El Dorado facility was determined using a fair value in-exchange assumption, and the difference between the carrying value of the El Dorado facility asset group and its indicated fair value was recorded as an impairment.
−Removed: Also during the fourth quarter of 2019, we recorded an impairment of $ 0.3 million related to certain equipment assets in our Water & Flowback Services Division.
−Removed: During the third quarter of 2018, as a result of decreased expected future cash flows from a specific customer contract, we recorded a long-lived asset impairment of $ 2.9 million on an identified intangible asset within the Water & Flowback Services segment.
+Added: Impairment of Goodwill
+Added: Our Water & Flowback Services Division consists of two reporting units, Production Testing and Water Management.
+Added: During the fourth quarter of 2019, coinciding with the timing of our annual goodwill assessment, there was further decline in the energy industry outlook, resulting in decreased expected future cash flows for our Water Management reporting unit.
+Added: As part of the first step of goodwill impairment testing for our Water Management reporting unit, the only reporting unit with goodwill, we updated our assessment of the future cash flows, applying expected long-term growth rates, discount rates, and terminal values that we considered reasonable for the reporting unit.
+Added: We calculated a present value of the cash flows for the Water Management reporting unit to arrive at an estimate of fair value using a combination of the income approach and the market approach.
+Added: Based on these assumptions, we determined that the fair value of the Water Management reporting unit was less than its carrying value indicating an impairment.
+Added: The amount of impairment was calculated based on the difference between the fair value and carrying value in accordance with our early adoption of ASU 2017-04 “Intangibles-Goodwill and Other (Topic 350):
+Added: Simplifying the Test for Goodwill Impairment.” This resulted in an impairment of the entire goodwill balance of $ 25.8 million at December 31, 2019.
NOTE 7 – INVENTORIES
7 unchanged sentences
Finished goods inventories include newly manufactured clear brine fluids as well as used brines that are repurchased from certain customers for recycling.
+Added: NOTE 8 — INVESTMENTS
+Added: As of December 31, 2021, we retained an interest in CSI Compressco representing approximately 3.8 % of the outstanding common units.
+Added: We are party to agreements in which Standard Lithium has the right to explore, produce and extract lithium in our Arkansas leases as well as additional potential resources in the Mojave region of California.
+Added: The Company receives cash and stock of Standard Lithium (NYSE:SLI) under the terms of the arrangements.
+Added: The cash and stock component of consideration received is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term.
+Added: During the fourth quarter of 2021,
+Added: we sold the 1.6 million shares of Standard Lithium shares we owned for approximately $ 17.6 million, before broker and transaction fees.
+Added: In May 2021, we signed a memorandum of understanding (“MOU”) with CarbonFree Chemicals Holdings, LLC (“CarbonFree”), a carbon capture company with patented technologies that capture CO 2 and mineralize emissions to make commercial, carbon-negative chemicals.
+Added: During the one-year MOU period, both Companies will work towards a definitive agreement that might include investments by TETRA into CarbonFree, a joint venture, or other commercial arrangements.
+Added: In December 2021, we invested $ 5.0 million in a convertible note issued by CarbonFree.
+Added: Our exposure to potential losses by CarbonFree is limited to our investment in the convertible note.
+Added: Our investments as of December 31, 2021 and 2020, consist of the following:
+Added: (In Thousands)
+Added: Investment in CSI Compressco $ 6,233 $ —
+Added: Investment in CarbonFree 5,000 —
+Added: Investment in Standard Lithium — 2,675
+Added: Total investments $ 11,233 $ 2,675
+Added: See Note 14 - “Fair Value Measurements” for further information.
NOTE 9 — LEASES
10 unchanged sentences
Year Ended December 31,
+Added: 2021 2020 2019
(In Thousands)
2 unchanged sentences
Total lease expense $ 34,960 $ 31,071 $ 51,479
−Removed: Rental expense for all operating leases was $ 31.1 million, $ 51.4 million, and $ 35.3 million for the years ended December 31, 2020, 2019, and 2018, respectively.
−Removed: At December 31, 2020, future minimum rental receipts under a non-cancelable sublease for office space in one of our locations totaled $ 5.2 million.
For the years ended December 31, 2021, 2020 and 2019, we recognized sublease income of $ 1.0 million.
Variable rent expense was not material.
+Added: At December 31, 2021, future minimum rental receipts under non-cancelable subleases for office space in two of our locations totaled $ 5.1 million.
Supplemental cash flow information:
Year Ended December 31,
+Added: 2021 2020 2019
(In Thousands)
8 unchanged sentences
Operating lease right-of-use assets $ 36,973 $ 43,448
−Removed: Accrued liabilities and other $ 8,795 $ 9,144
+Added: Operating lease liabilities, current portion $ 8,108 $ 8,795
Operating lease liabilities $ 31,429 $ 37,569
14 unchanged sentences
Total lease liabilities $ 39,537
−Removed: NOTE 9 — ACCRUED LIABILITIES
−Removed: Accrued liabilities are detailed as follows:
−Removed: (In Thousands)
−Removed: Compensation and employee benefits $ 14,336 $ 18,657
−Removed: Operating lease liabilities, current portion 8,795 9,144
−Removed: Accrued taxes 4,323 6,894
−Removed: Accrued interest 2,951 299
−Removed: Accrued capital expenditures 194 978
−Removed: Other accrued liabilities 8,192 8,883
−Removed: Total accrued liabilities and other $ 38,791 $ 44,855
NOTE 10 — LONG-TERM DEBT AND OTHER BORROWINGS
Consolidated long-term debt consists of the following:
−Removed: 2020 December 31,
(In Thousands)
TETRA Scheduled Maturity
−Removed: Asset-based credit agreement September 10, 2023 $ — $ —
+Added: Asset-based credit agreement (1)
+Added: May 31, 2025 $ 67 $ —
Term credit agreement (2)
1 unchanged sentence
Total long-term debt $ 151,936 $ 199,894
+Added: (1) Net of deferred financing costs of $ 1.5 million as of December 31, 2021.
+Added: Because there was no outstanding balance on the ABL Credit Agreement as of December 31, 2020, associated deferred financing costs of $ 1.0 million were classified as other long-term assets on the accompanying consolidated balance sheet.
(2) Net of unamortized discount of $ 4.5 million and $ 5.5 million as of December 31, 2021 and 2020, respectively, and net of unamortized deferred financing costs of $ 6.7 million and $ 8.2 million as of December 31, 2021 and 2020, respectively.
−Removed: Scheduled maturities for the next five years and thereafter are as follows:
+Added: Scheduled maturities for the next five years and thereafter are as follows, not considering annual prepayment offers required by our Term Credit Agreement described below:
December 31, 2021
1 unchanged sentence
Total maturities $ 164,685
−Removed: Our credit agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments.
−Removed: As of December 31, 2020, we were in compliance with all covenants under the credit agreements.
Asset-Based Credit Agreement .
−Removed: As of December 31, 2020, TETRA had no balance outstanding and had $ 6.6 million in letters of credit against its asset-based lending agreement (“ABL Credit Agreement”).
−Removed: The ABL Credit Agreement provides for a senior secured revolving credit facility of up to $ 100 million, subject to a borrowing base to be determined by reference to the value of inventory and accounts receivable, and includes a sublimit of $ 20.0 million for letters of credit and a swingline loan sublimit of $ 10.0 million.
−Removed: The maturity date of the ABL Credit Agreement is September 10, 2023.
−Removed: The ABL Credit Agreement is subject to compliance with the covenants, borrowing base, and other provisions of the agreement that may limit borrowings, TETRA had an availability of $ 24.6 million under this agreement as of December 31, 2020.
−Removed: Because there was no outstanding balance on this ABL Credit Agreement as of December 31, 2020 or 2019, associated deferred financing costs of $ 1.0 million were classified as other long-term assets on the accompanying consolidated balance sheet.
+Added: On July 30, 2021, we entered into an amendment to our asset-based credit agreement (“ABL Credit Agreement”) that, among other things, extended the term of the credit facility to May 31, 2025 and revised our commitment to $ 80.0 million, with a $ 20.0 million accordion.
+Added: The amendment increased the availability by adding the value of accrued Unites States receivables, increased the forward rates on accounts receivable for investment grade customers and incorporated a new $ 15.0 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom.
+Added: As of December 31, 2021, TETRA had $ 1.6 million balance outstanding and had $ 7.5 million in letters of credit against its asset-based lending agreement (“ABL Credit Agreement”).
+Added: The ABL Credit Agreement provides for a senior secured revolving credit facility of up to $ 80.0 million, with a $ 20.0 million accordion.
+Added: The credit facility is subject to a borrowing base to be determined by reference to the value of inventory and accounts receivable, and includes a sublimit of $ 20.0 million for letters of credit, a swingline loan sublimit of $ 11.5 million, and a $ 15.0 million sub-facility subject to a borrowing base consisting of certain trade receivables and inventory in the United Kingdom.
+Added: The ABL Credit Agreement is subject to compliance with the covenants, borrowing base, and other provisions of the agreement that may limit borrowings.
+Added: TETRA had availability of $ 36.1 million under this agreement as of December 31, 2021.
Borrowings under the ABL Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) LIBOR plus a margin based upon a fixed charge coverage ratio or (ii) a base rate plus a margin based on a fixed charge coverage ratio.
2 unchanged sentences
Borrowings outstanding have an applicable margin ranging from 1.75 % to 2.25 % per annum for LIBOR-based loans and 0.75 % to 1.25 % per annum for base-rate loans, based upon the applicable fixed charge coverage ratio.
+Added: As of December 31, 2021, the interest rate per annum on borrowings under the ABL Credit Agreement is 4.75 %.
In addition to paying interest on the outstanding principal under the ABL Credit Agreement, TETRA is required to pay a commitment fee in respect of the unutilized commitments at an applicable rate ranging from 0.375 % to 0.5 % per annum, paid monthly in arrears based on utilization of the commitments under the ABL Credit Agreement.
3 unchanged sentences
As of December 31, 2021 TETRA had $ 151.9 million outstanding, net of unamortized discounts and unamortized deferred financing costs under the Term Credit Agreement.
−Removed: Borrowings under the Term Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) LIBOR plus a margin of 6.25 % per annum or (ii) a base rate plus a margin of 5.25 % per annum.
+Added: Our Term Credit Agreement requires us to offer to prepay a percentage of Excess Cash Flow (as defined in the Term Credit Agreement) within five business days of filing our Annual Report.
+Added: The minimum amount of $ 8.2 million that we would have been required to offer to prepay pursuant to this obligation for the year ending December 31, 2021 was paid on July 30, 2021 in connection with the amendment of our ABL Credit Agreement.
+Added: Borrowings under the Term Credit Agreement bear interest at a rate per annum equal to, at the option of TETRA, either (i) LIBOR (subject to a 1% floor) plus a margin of 6.25 % per annum or (ii) a base rate plus a margin of 5.25 % per annum.
+Added: As of December 31, 2021, the interest rate per annum on borrowings under the Term Credit Agreement is 7.25 %.
In addition to paying interest on the outstanding principal under the Term Credit Agreement, TETRA is required to pay a commitment fee in respect of the unutilized commitments at the rate of 1.0 % per annum, paid quarterly in arrears based on utilization of the commitments under the Term Credit Agreement.
All obligations under the Term Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest for the benefit of the Term Lenders on substantially all of the personal property of TETRA and certain of its subsidiaries, the equity interests in certain domestic subsidiaries, and a maximum of 65 % of the equity interests in certain foreign subsidiaries.
−Removed: NOTE 11 — ACQUISITIONS AND DISPOSITIONS
−Removed: Acquisition of SwiftWater Energy Services
−Removed: On February 28, 2018, pursuant to a purchase agreement dated February 13, 2018 (the “SwiftWater Purchase Agreement”), we purchased all of the equity interests in SwiftWater Energy Services, LLC (“SwiftWater”), which is engaged in the business of providing water management and water solutions to oil and gas operators in the Permian Basin market of Texas.
−Removed: Strategically, the acquisition of SwiftWater enhances our position as one of the leading integrated water management companies, providing water transfer, storage, and treatment services, along with proprietary automation technology and numerous other water-related services.
−Removed: Under the terms of the SwiftWater Purchase Agreement, consideration of $ 42.0 million of cash, subject to a working capital adjustment, and 7,772,021 shares of our common stock (valued at $ 28.2 million) were paid at closing.
−Removed: The allocation of the purchase price to the SwiftWater net tangible assets and liabilities and identifiable intangible assets was final as of December 31, 2018.
−Removed: Contingent consideration in the amount of $ 10.0 million was paid to the sellers during 2019 based on 2018 performance.
−Removed: As of December 31, 2019, all contingent consideration had been paid.
−Removed: Acquisition of JRGO Energy Services LLC
−Removed: On December 6, 2018, we purchased JRGO Energy Services LLC (“JRGO”) for a cash purchase price of $ 7.6 million paid at closing, subject to a working capital adjustment.
−Removed: In addition, contingent consideration of $ 1.4 million was paid during 2019, based on JRGO’s performance during the fourth quarter of 2018.
−Removed: JRGO specializes in delivering comprehensive water management services for oil and gas operators, as well as municipal, state and federal organizations.
−Removed: The acquisition of JRGO broadens our footprint in the Appalachian region and is expected to provide our customers an enhanced, more efficient, diverse, and strategically positioned portfolio of integrated water management services in the Marcellus and Utica basins.
−Removed: The allocation of the purchase price to the JRGO net tangible assets and liabilities and identifiable intangible assets was final as of December 31, 2019.
−Removed: Sale of Offshore Division
−Removed: On March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division.
−Removed: Pursuant to an Asset Purchase and Sale Agreement (the “Maritech Asset Purchase Agreement”) with Orinoco Natural Resources, LLC (“Orinoco”), Orinoco purchased certain remaining offshore oil, gas and mineral leases and related assets of Maritech (the “Maritech Properties”).
−Removed: Immediately thereafter, we closed the transactions contemplated by a Membership Interest Purchase and Sale Agreement (the “Maritech Equity Purchase Agreement”) with Orinoco, whereby Orinoco purchased all of the equity interests of Maritech (the “Maritech Equity Interests”).
−Removed: Immediately thereafter, we closed the transactions contemplated by an Equity Interest Purchase Agreement (the
−Removed: “Offshore Services Purchase Agreement”) with Epic Offshore Specialty, LLC, an affiliate of Orinoco (“Epic Offshore”), whereby Epic Offshore (the “Offshore Services Sale”) purchased all of the equity interests in the wholly owned subsidiaries that comprised our Offshore Services segment operations (the “Offshore Services Equity Interests”).
−Removed: Under the terms of the Maritech Asset Purchase Agreement, the Maritech Equity Purchase Agreement, and the Offshore Services Purchase Agreement, the consideration delivered by Orinoco and Epic Offshore for the Maritech Properties, the Maritech Equity Interests and the Offshore Services Equity Interests consisted of (i) the assumption by Orinoco of substantially all of the liabilities and obligations relating to the ownership, operation and condition of the Maritech Properties and the provision of certain indemnities by Orinoco to us under the Maritech Asset Purchase Agreement, (ii) the assumption by Orinoco of substantially all of the liabilities of Maritech and the provision of certain indemnities by Orinoco under the Maritech Equity Purchase Agreement, (iii) the assumption by Epic Offshore of substantially all of the liabilities of the Offshore Services Equity Interests relating to the periods following the closing of the Offshore Services Sale and the provision of certain indemnities by Epic Offshore under the Offshore Services Purchase Agreement, (iv) cash in the amount $ 3.1 million (v) a promissory note in the original principal amount of $ 7.5 million payable by Epic Offshore to us in full, together with interest at a rate of 1.52 % per annum, on December 31, 2019, (vi) performance by Orinoco under a Bonding Agreement executed in connection with the Maritech Asset Purchase Agreement and the Maritech Equity Purchase Agreement whereby Orinoco provided at closing non-revocable performance bonds in an amount equal to $ 46.8 million to cover the performance by Orinoco and Maritech of the asset retirement obligations of Maritech, and (vii) the delivery of a personal guaranty agreement from Thomas M.
−Removed: Clarke and Ana M.
−Removed: Clarke guaranteeing the payment obligations of Orinoco under the Bonding Agreement (collectively, the “Transaction Consideration”).
−Removed: See Note 12 - “Commitments and Contingencies” for further discussion of the promissory note and the Bonding Agreement.
−Removed: As a result of these transactions, we have effectively exited the businesses of our Offshore Services and Maritech segments, and these operations are reflected as discontinued operations in our consolidated financial statements.
−Removed: See Note 3 - “Discontinued Operations” for further discussion.
+Added: Our credit agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments.
+Added: As of December 31, 2021, we were in compliance with all covenants under the credit agreements.
NOTE 11 — COMMITMENTS AND CONTINGENCIES
7 unchanged sentences
We recognize a liability for the purchase of such products at the time we receive them.
−Removed: As of December 31, 2020, the aggregate amount of the fixed and determinable portion of the purchase obligation pursuant to our Completion Fluids & Products Division’s supply agreements was approximately $ 85.3 million, including $ 9.5 million per year from 2021 to 2025 and $ 37.8 million thereafter, extending through 2029.
+Added: As of December 31, 2021, the aggregate amount of the fixed and determinable portion of the purchase obligation pursuant to our Completion Fluids & Products Division’s supply agreements was approximately $ 114.5 million, including on average $ 15.3 million per year from 2022 to 2026 and $ 38.1 million thereafter, extending through 2029.
Amounts purchased under these agreements for each of the years ended December 31, 2021, 2020, and 2019, was $ 23.2 million, $ 17.3 million, and $ 18.7 million, respectively.
7 unchanged sentences
Pursuant to a Bonding Agreement entered into as part of these transactions (the “Bonding Agreement”), Orinoco provided non-revocable performance bonds in an aggregate amount of $ 46.8 million to cover the performance by Orinoco and Maritech of the asset retirement obligations of Maritech (the “Initial Bonds”) and agreed to replace, within 90 days following the closing, the Initial Bonds with other non-revocable performance bonds, meeting certain requirements, in the aggregate sum of $ 47.0 million (collectively, the “Interim Replacement Bonds”).
−Removed: Orinoco further agreed to replace, within 180 days following the closing, the Interim Replacement Bonds with a maximum of three non-revocable performance bonds in the aggregate sum of $ 47.0 million , meeting certain requirements (the “Final Bonds”).
+Added: Orinoco further agreed to replace, within 180 days following the closing, the Interim Replacement Bonds with a maximum of three non-revocable performance bonds in the aggregate sum of $ 47.0 million , meeting certain requirements (the “Final Bonds” and, together with the Interim Replacement Bonds, the “Replacement Bonds”).
Among the other requirements of the Final Bonds was that they must provide coverage for all of the asset retirement obligations of Maritech instead of only relating to specific properties.
3 unchanged sentences
Clarke pursuant to a separate guaranty agreement (the “Clarke Bonding Guaranty Agreement”).
−Removed: Orinoco has not delivered such replacement bonds and neither it nor the Clarkes has made any of the agreed upon cash escrow payments and we filed a lawsuit against Orinoco and the Clarkes to enforce the terms of the Bonding Agreement and the Clarke Bonding Guaranty Agreement.
+Added: Orinoco has not delivered the Replacement Bonds and neither it nor the Clarkes has made any of the agreed upon cash escrow payments and we filed a lawsuit against Orinoco and the Clarkes to enforce the terms of the Bonding Agreement and the Clarke Bonding Guaranty Agreement.
A summary judgment was initially granted in favor of Orinoco and the Clarkes which dismissed our claims against Orinoco under the Bonding Agreement and against the Clarkes under the Clarke Bonding Guaranty Agreement.
11 unchanged sentences
TETRA filed a lawsuit against the Clarkes on January 15, 2020 for breach of the promissory note guaranty agreement.
−Removed: In September 2020, the court granted TETRA’s Motion for Summary
−Removed: Judgment and entered Final Judgment in our favor, dismissing counterclaims by the Clarkes and awarded TETRA $7.9 million in damages.
−Removed: The Clarkes have filed an appeal which we will defend.
+Added: In September 2020, the court granted TETRA’s Motion for Summary Judgment and entered Final Judgment in our favor, dismissing counterclaims by the Clarkes and awarded TETRA $ 7.9 million in damages.
+Added: The Clarkes have filed an appeal of the Final Judgment, and the parties are awaiting a ruling from the court of appeals.
+Added: Since obtaining the Final Judgment, TETRA has undertaken efforts to abstract the judgment in Texas, Utah, Nevada, Massachusetts, and Georgia.
+Added: TETRA continues to work on identifying potential assets and/or engage with the Clarkes to resolve this dispute.
We cannot provide any assurance the Clarkes will pay the judgment or that they will not file for bankruptcy protection.
If the Clarkes do file for bankruptcy protection, we likely would be unable to collect all, or even a significant portion of, the judgment owed to us.
−Removed: See Note 3 - “Discontinued Operations” and Note 11 - “Acquisitions and Dispositions” for further discussion.
−Removed: NOTE 13 — CAPITAL STOCK AND WARRANTS
+Added: See Note 3 - “Discontinued Operations” for further discussion.
+Added: NOTE 12 — CAPITAL STOCK
Our Restated Certificate of Incorporation, as amended during 2017, authorizes us to issue 250,000,000 shares of common stock, par value $ .01 per share, and 5,000,000 shares of preferred stock, par value $ .01 per share.
4 unchanged sentences
Dividends may be declared and paid on common stock as determined by our Board of Directors, subject to any preferential dividend rights of any then outstanding preferred stock.
−Removed: Issuances of Common Stock.
−Removed: On February 28, 2018, we issued 7,772,021 shares of our common stock as part of the consideration paid for the acquisition of SwiftWater.
−Removed: For further discussion of the SwiftWater acquisition, see Note 11 - “Acquisitions and Dispositions”.
−Removed: On December 14, 2016, we completed a firm commitment underwritten offering of 22.3 million shares of our common stock at a price to the public of $ 5.15 per share ($ 4.9183 per share net of underwriting discounts) and the Warrants to purchase 11.2 million shares of our common stock at an exercise price of $ 5.75 per share prior to the 60-month expiration date of the Warrants.
−Removed: The 22.3 million shares of our common stock issued and the Warrants to purchase 11.2 million shares of our common stock includes 2.9 million shares of our common stock and Warrants to acquire an additional 1.5 million shares of our common stock related to the exercise of an option granted to the underwriters.
−Removed: We utilized the net offering proceeds of $ 109.7 million to repay outstanding indebtedness and other offering expenses.
−Removed: As of December 31, 2020, all of the Warrants remain outstanding.
−Removed: The Warrants were issued pursuant to a Warrant Agreement, dated December 14, 2016, and are exercisable immediately upon issuance and from time to time thereafter through and including the fifth year anniversary of the initial issuance date.
−Removed: At the request of a holder following a change of control, we or the successor entity will exchange such Warrant for consideration in accordance with a Black Scholes option pricing model in the form of, at our election, Rights (as defined in the Warrant Agreement) or cash.
−Removed: Similarly, within a period of time prior to the consummation of a change of control, we have the right to redeem all of the Warrants for cash in an amount determined in accordance with a Black-Scholes option pricing model.
−Removed: The Warrants are accounted for as a derivative liability in accordance with ASC 815 “Derivatives and Hedging” and accordingly are carried at their fair value, with changes in fair value included in earnings in the period of change.
A summary of the activity of our common shares outstanding and treasury shares held for the three-year period ending December 31, 2021, is as follows:
5 unchanged sentences
950,163 494,908 ( 256,402 )
−Removed: Issuance of common stock — — 7,772,021
At end of period 126,937,163 125,976,071 125,481,163
42 unchanged sentences
In May 2018, our stockholders approved the adoption of the TETRA Technologies, Inc.
−Removed: 2018 Equity Incentive Plan (“2018 Equity Plan”).
−Removed: Pursuant to this plan, we were authorized to grant up to 6,635,000 shares in the form of stock options, restricted stock, restricted stock units, bonus stock, stock appreciation rights, performance units, performance awards, other stock-based awards and cash-based awards to employees and non-employee directors.
−Removed: In May 2018, our stockholders approved the adoption of the TETRA Technologies, Inc.
+Added: 2018 Equity Incentive Plan (“2018 Equity Plan”) and the TETRA Technologies, Inc.
2018 Non-Employee Director Equity Incentive Plan (“2018 Director Plan”).
−Removed: Pursuant to this plan, we were authorized to grant up to 335,000 shares in the form of nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock‑based awards and cash-based awards to non-employee directors.
+Added: In May 2021, our stockholders approved the First Amended and Restated 2018 Equity Incentive Plan (the “Amended 2018 Equity Plan”), which amended the 2018 Equity Plan and terminated the 2018 Director Plan.
+Added: Pursuant to the Amended 2018 Equity Plan, we are authorized to grant up to 11,865,000 shares in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, performance shares, other stock-based awards and cash-based awards to employees and non-employee directors.
Stock Options
−Removed: We did not grant any stock options during the year ended December 31, 2020.
−Removed: The weighted average fair value of options granted during the years ended December 31, 2019, and 2018 , was $ 0.76 and $ 1.88 , respectively, using the Black-Scholes option valuation model with the following weighted average assumptions:
+Added: We did not grant any stock options during the year ended December 31, 2021 and 2020.
+Added: The weighted average fair value of options granted during the year ended December 31, 2019 was $ 0.76 , using the Black-Scholes option valuation model with the following weighted average assumptions:
Year Ended December 31,
Expected stock price volatility 61 %
−Removed: Expected life of options 4.4 years 4.5 years
+Added: Expected life of options 4.4 years
Risk-free interest rate 2.3 %
4 unchanged sentences
The dividend yield is based on the current annualized dividend rate in effect during the quarter in which the grant was made.
−Removed: At the time of the stock option grants during each of the years ended December 31, 2019 and 2018, we had not historically paid any dividends and did not expect to pay any dividends during the expected life of the stock options.
−Removed: The following is a summary of stock option activity for the years ended December 31, 2020 and 2019:
−Removed: Shares Under Option Weighted Average
−Removed: Per Share Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value
−Removed: (in thousands)
−Removed: (In Thousands)
−Removed: Outstanding at January 1, 2020 3,686 $ 6.90
−Removed: Options canceled ( 302 ) 6.78
−Removed: Options expired ( 176 ) 10.27
−Removed: Outstanding at December 31, 2020 3,208 6.73 4.8 years $ —
−Removed: Expected to vest at December 31, 2020 3,208 6.73 4.8 years —
−Removed: Exercisable at December 31, 2020 3,171 6.76 4.8 years —
−Removed: Available for grant, end of year
+Added: At the time of the stock option grant during the year ended December 31, 2019, we had not historically paid any dividends and did not expect to pay any dividends during the expected life of the stock options.
+Added: The following is a summary of stock option activity for the year ended December 31, 2021:
Shares Under Option Weighted Average
Per Share Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value
−Removed: (in thousands)
−Removed: (In Thousands)
+Added: (In Thousands) (In Thousands)
Outstanding at January 1, 2021 3,208 $ 6.73
−Removed: Options granted 72 4.51
Options canceled ( 61 ) 6.82
5 unchanged sentences
Intrinsic value is the difference between the market value of our stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price.
−Removed: The total intrinsic value of stock options exercised during the year ended December 31, 2018, was approximately $ 0.1 million.
−Removed: There were no options exercised during the years ended December 31, 2020 and 2019 .
+Added: The total intrinsic value of stock options exercised during the year ended December 31, 2021, was less than $ 0.1 million.
+Added: There were no options exercised during the years ended December 31, 2020 or 2019.
At December 31, 2021, total unrecognized compensation cost related to unvested stock options is not significant.
21 unchanged sentences
At December 31, 2021, net of options previously exercised pursuant to our various equity compensation plans, we have a maximum of 5,738,412 shares of common stock issuable pursuant to awards previously granted and outstanding and awards authorized to be granted in the future.
−Removed: We have a 401(k) retirement plan (the “Plan”) that covers substantially all employees and entitles them to contribute up to 75 % of their annual compensation, subject to maximum limitations imposed by the Internal
−Removed: Revenue Code.
+Added: We have a 401(k) retirement plan (the “Plan”) that covers substantially all employees and entitles them to contribute up to 75 % of their annual compensation, subject to maximum limitations imposed by the Internal Revenue Code.
Effective October 1, 2018, enhancements were made to the Plan, including changing the employer match to 50 % of each employee’s contribution up to 8 %.
1 unchanged sentence
In addition, we can make discretionary contributions which are allocable to participants in accordance with the Plan.
−Removed: During 2020, we suspended 401(k) matching for our employees due to the COVID pandemic and market conditions.
+Added: During the fourth quarter of 2021, we reinstated the 401(k) matching for our employees which was suspended during 2020 due to the COVID pandemic and market conditions.
Total expense related to our 401(k) plan was $ 0.5 million, $ 1.5 million, and $ 5.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.
19 unchanged sentences
Financial Instruments
−Removed: Mineral Resources Arrangements
−Removed: The Company receives cash and stock of Standard Lithium (TSXV:
−Removed: SLL) under the terms of its arrangements.
−Removed: Our investment in Standard Lithium is recorded in other assets on our consolidated balance sheets based on the quoted market stock price (a Level 2 fair value measurement).
−Removed: The stock component of consideration received is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term.
−Removed: The unearned income associated with the stock component of this agreement is not significant as of December 31, 2020 or 2019.
+Added: We retained an interest in CSI Compressco (NASDAQ:
+Added: CCLP) representing approximately 3.8 % of the outstanding common units as of December 31, 2021.
+Added: In December 2021, we invested $ 5.0 million in a convertible note issued by CarbonFree.
+Added: The Company receives cash and stock of Standard Lithium (NYSE:
+Added: SLI) under the terms of its arrangements.
+Added: Our investments in CSI Compressco and Standard Lithium are recorded in investments on our consolidated balance sheets based on the quoted market stock price (Level 1 fair value measurements).
+Added: The stock component of consideration received from Standard Lithium is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term.
Changes in the value of stock are recorded in other income (expense) in our consolidated statements of operations.
−Removed: The Warrants are valued by using a Black Scholes option valuation model that includes implied volatility of the trading price (a Level 3 fair value measurement).
−Removed: The fair value of the Warrants liability is increased by, among other factors, increases in our common stock price and increases in the volatility of our common stock price.
−Removed: Changes in the fair value of the Warrants will increase or decrease the associated liability and result in future adjustments to earnings for the associated valuation losses (gains).
−Removed: Contingent Consideration
−Removed: The February 2018 acquisition of SwiftWater resulted in a contingent purchase price consideration that was payable in two tranches based on 2018 and 2019 results.
−Removed: During the year ended December 31, 2019, the sellers received a payment of $ 10.0 million based on 2018 performance.
−Removed: Changes to the estimated contingent purchase price consideration for performance during 2019 resulted in $ 1.0 million being credited to other (income) expense, net, during the year ended December 31, 2019.
−Removed: Also during the year ended December 31, 2019, in accordance with the December 2018 purchase of JRGO, the sellers were paid contingent consideration of $ 1.4 million based on performance during the fourth quarter of 2018.
−Removed: As of December 31, 2019, there were no remaining contingent purchase price consideration liabilities for either acquisition.
+Added: Our investment in CarbonFree is also recorded in investments on our consolidated balance sheets based on an internal valuation (a Level 3 fair value measurement).
Derivative Contracts
9 unchanged sentences
The fair values of our foreign currency derivative instruments as of December 31, 2021 and 2020 was insignificant.
−Removed: During the years ended December 31, 2020, 2019, and 2018, we recognized approximately $ 0.2 million, $ 1.5 million and $( 0.4 ) million of net (gains) losses, respectively, reflected in other (income) expense, net, associated with our foreign currency derivative program.
+Added: During the years ended December 31, 2021, 2020, and 2019, we recognized approximately less than $ 0.1 million, $ 0.2 million and $ 1.5 million of net (gains) losses, respectively, reflected in other (income) expense, net, associated with our foreign currency derivative program.
A summary of significant recurring fair value measurements by valuation hierarchy as of December 31, 2021 and December 31, 2020, is as follows:
5 unchanged sentences
(In Thousands)
−Removed: Investment in Standard Lithium $ 2,675 — 2,675 —
−Removed: Warrants liability (198) — — ( 198 )
+Added: Investment in CSI Compressco $ 6,233 6,233 — —
+Added: Investment in CarbonFree 5,000 — — 5,000
+Added: Total $ 11,233
Fair Value Measurements Using
5 unchanged sentences
Investment in Standard Lithium $ 2,675 $ 2,675 $ — $ —
−Removed: Warrants liability
−Removed: ( 449 ) — — ( 449 )
+Added: Total $ 2,675
During 2019, our Completion Fluids & Products and Water & Flowback Services Divisions each recorded certain long-lived tangible asset impairments.
22 unchanged sentences
(In Thousands)
−Removed: Federal $ — $ — $ —
State $ 124 $ 191 $ 400
10 unchanged sentences
(In Thousands)
−Removed: Income tax provision (benefit) computed at statutory federal income tax rates $ ( 5,268 ) $ ( 26,903 ) $ ( 552 )
+Added: Income tax benefit computed at statutory federal income tax rates $ ( 3,091 ) $ ( 5,268 ) $ ( 26,903 )
State income taxes (net of federal benefit) ( 386 ) ( 2,124 ) ( 2,388 )
Impact of international operations ( 4,083 ) 4,036 672
−Removed: Impact of U.S.
−Removed: tax law change — — ( 2,510 )
Valuation allowance 9,055 4,598 30,640
16 unchanged sentences
We recognize interest and penalties related to uncertain tax positions in income tax expense.
−Removed: During the years ended December 31, 2020, 2019, and 2018, we recognized $( 0.2 ) million, $( 0.3 ) million, and $( 0.2 ) million, respectively, of interest and penalties.
−Removed: As of December 31, 2020 and 2019, we had less than $ 0.1 million and $ 0.2 million, respectively, of accrued potential interest and penalties associated with uncertain tax positions.
−Removed: The total amount of unrecognized tax benefits that would affect our effective tax rate if recognized was less than $ 0.1 million and $ 0.4 million as of December 31, 2020 and 2019, respectively.
+Added: During the years ended December 31, 2021, 2020, and 2019, we recognized less than $( 0.1 ) million, $( 0.2 ) million, and $( 0.3 ) million, respectively, of interest and penalties.
+Added: As of December 31, 2021 and 2020, we had zero and less than $ 0.1 million, respectively, of accrued potential interest and penalties associated with uncertain tax positions.
+Added: The total amount of unrecognized tax benefits that would affect our effective tax rate if recognized was zero and less than $ 0.1 million as of December 31, 2021 and 2020, respectively.
We do not expect a significant change to the unrecognized tax benefits during the next twelve months.
26 unchanged sentences
Depreciation and amortization for tax in excess of book expense 14,037 15,402
+Added: Investment in Partnership 5,471 —
All other 2,007 1,690
−Removed: Total deferred tax liability
−Removed: 24,900 33,322
−Removed: Net deferred tax liability
−Removed: $ 1,890 $ 1,777
+Added: Total deferred tax liabilities 28,586 24,900
+Added: Net deferred tax liabilities $ 1,669 $ 1,890
We believe that it is more likely than not we will not realize all the tax benefits of the deferred tax assets within the allowable carryforward period.
1 unchanged sentence
The valuation allowance as of December 31, 2021 and 2020 primarily relates to federal deferred tax assets.
−Removed: The $ 22.9 million increase in the valuation allowance during the year ended December 31, 2020 was primarily due to the increase in Federal deferred tax assets, the majority of which is related to the sale of our partnership interest in CCLP in January 2021 as discussed in Note 18 - “Subsequent Event.” Entering into the GP Sale in January 2021 resulted in the recognition of temporary deferred assets associated with the outside basis difference of some of our subsidiaries at December 31, 2020.
−Removed: These temporary differences are fully offset by an increase to the valuation allowance.
+Added: The $ 19.6 million decrease in the valuation allowance during the year ended December 31, 2021 was primarily due to the decrease in Federal deferred tax assets, the majority of which is related to the sale of our partnership interest in CSI Compressco in January 2021.
+Added: Entering into the GP Sale in January 2021 resulted in the recognition of temporary deferred assets associated with the outside basis difference of some of our subsidiaries at December 31, 2020, which were then reversed at the time of the sale in January 2021.
+Added: These temporary differences were fully offset by a valuation allowance.
At December 31, 2021, we had federal, state, and foreign net operating loss carryforwards/carrybacks equal to approximately $ 92.5 million, $ 12.3 million, and $ 9.9 million, respectively.
1 unchanged sentence
Utilization of the net operating loss and credit carryforwards may be subject to a significant annual limitation due to ownership changes that have occurred previously or could occur in the future provided by Section 382 of the Internal Revenue Code.
+Added: NOTE 16 — NET INCOME (LOSS) PER SHARE
+Added: The average diluted shares outstanding excludes the impact of certain outstanding equity awards and warrants of 1.8 million, 21 thousand and 48 thousand shares for the twelve-month periods ended December 31, 2021, 2020 and 2019, respectively, as the inclusion of these shares would have been anti-dilutive due to the net loss from continuing operations recorded during these periods.
NOTE 17 — INDUSTRY SEGMENTS AND GEOGRAPHIC INFORMATION
We manage our operations through two divisions:
−Removed: Completion Fluids & Products and Water & Flowback Services.
+Added: Completion Fluids & Products Division and Water & Flowback Services Division.
We generally evaluate the performance of and allocate resources to our segments based on profit or loss from their operations before income taxes and nonrecurring charges, return on investment, and other criteria.
13 unchanged sentences
Consolidated $ 173,043 $ 144,994 $ 301,688
−Removed: Interdivision revenues
−Removed: Completion Fluids & Products Division $ — $ — $ ( 6 )
−Removed: Water & Flowback Services Division — — 384
−Removed: Interdivision eliminations — — ( 378 )
−Removed: Consolidated $ — $ — $ —
Total revenues
1 unchanged sentence
Water & Flowback Services Division 168,624 135,054 281,986
−Removed: Interdivision eliminations — — ( 378 )
Consolidated $ 388,272 $ 377,715 $ 561,241
23 unchanged sentences
General and administrative expense $ 39,990 $ 36,201 $ 51,466
−Removed: Depreciation and amortization 818 631 658
+Added: Depreciation, amortization and impairment 1,032 818 631
Interest expense, net 17,483 20,727 21,977
−Removed: Warrants fair value adjustment (income) expense ( 251 ) ( 1,624 ) ( 11,128 )
Other general corporate (income) expense, net 93 836 ( 1,093 )
16 unchanged sentences
Consolidated $ 20,533 $ 29,386 $ 108,273
−Removed: (2) Amounts presented are net of cost of equipment sold, including $ 12.7 million during 2020, $ 6.5 million during 2019 and $ 10.0 million during 2018 for our former Compression Division.
+Added: (1) Amounts presented are net of cost of equipment sold, including zero during 2021, $ 12.7 million during 2020 and $ 6.5 million during 2019 for our former Compression Division.
Summarized financial information concerning the geographic areas of our customers and in which we operate at December 31, 2021, 2020, and 2019, is presented below:
3 unchanged sentences
Revenues from external customers
−Removed: $ 225,835 $ 411,284 $ 390,403
+Added: United States $ 251,786 $ 225,835 $ 411,284
Canada and Mexico 5,363 1,347 6,616
8 unchanged sentences
Total revenues $ 388,272 $ 377,715 $ 561,241
+Added: During each of the two years ended December 31, 2021 and 2020, no single customer accounted for more than 10% of our consolidated revenues.
+Added: One customer provided more than 10% of our consolidated revenues during the year ended December 31, 2019.
+Added: As of December 31, 2021 and 2020, no receivables from individual customers represented 10% or more of our consolidated trade accounts receivables net of allowance for doubtful accounts.
(In Thousands)
Identifiable assets
−Removed: $ 285,765 $ 338,054
+Added: United States $ 291,986 $ 285,765
Canada and Mexico 5,891 6,452
5 unchanged sentences
Total identifiable assets $ 398,266 $ 1,132,839
−Removed: During each of the two years ended December 31, 2020 and 2018, no single customer accounted for more than 10% of our consolidated revenues.
−Removed: One customer provided more than 10% of our total consolidated revenues during the year ended December 31, 2019.
−Removed: As of December 31, 2020 and 2019, no receivables from individual customers represented 10% or more of our consolidated trade accounts receivables net of allowance for doubtful accounts.
−Removed: NOTE 18 — SUBSEQUENT EVENT
−Removed: The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for the transaction described below.
−Removed: On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan pursuant to which we sold the general partner of CCLP, including the IDRs and approximately 23.1 % of the outstanding limited partner interests in CCLP, in exchange for combination of $ 13.4 million in cash paid at closing, $ 0.5 million in cash payable on the six-month anniversary of the closing and $ 3.1 million in contingent consideration in the form of cash and/or CCLP common units if CCLP achieves certain financial targets on or before December 31, 2022.
−Removed: As a result of these transactions, TETRA will not consolidate CCLP beginning in the first quarter of 2021 and TETRA is expected to report an accounting gain of approximately $ 125.0 million in the first quarter of 2021.
−Removed: Additionally, our former Compression division, including CCLP’s operations, are now included in discontinued operations.
−Removed: See Note 3 - “Discontinued Operations”.
−Removed: Following the transaction, TETRA owns 5.2 million common units of CCLP.
−Removed: TETRA will also continue to provide back-office support to CCLP under a Transition Services Agreement for a period of time until CCLP has completed a full separation from TETRA’s back-office support functions.
+Added: NOTE 18 — SUBSEQUENT EVENTS
+Added: The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for the transactions described below.
+Added: In January 2022, the Company entered into a new revolving credit facility for seasonal working capital needs of subsidiaries in Sweden and Finland (“Swedish Credit Facility”).
+Added: There are no borrowings and the facility has availability of 50.0 million Swedish Krona, or approximately $ 5.3 million United States dollars, as of February 25, 2022.
+Added: During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days.
+Added: Borrowings bear interest at a rate of 2.95 % per annum.
+Added: The Swedish Credit Facility expires on December 31, 2022 and the Company intends to renew it annually.
+Added: Our Lake Charles facility incurred damage due to Hurricane Laura in 2020 for which we received partial insurance proceeds in 2020.
+Added: In February 2022, we reached a voluntary settlement of an additional approximately $ 3.8 million, which we expect to recognize as other income during the first quarter of 2022.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.