What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-27 compared with 2022-02-28 · 248 added, 292 removed, 1145 unchanged (32% of the section changed)

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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.

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;

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Reports of Independent Registered Public Accounting Firm s (PCAOB ID Numbers Grant Thornton LLP:

248 & Ernst & Young LLP:

Consolidated Balance Sheets at December 31, 2022 and 2021

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(incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report filed on August 9, 2017 (SEC File No.

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.

4.1 Form of Senior Indenture (including form of senior debt security) (incorporated by reference to Exhibit 4.11 to the Company's Registration Statement on Form S-3 filed on May 5, 2022 (SEC File No.

333-264709)) .

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23.1+ Consent of Grant Thornton LLP

23.2+ Consent of Ernst & Young LLP

31.1+ Certification Pursuant to Rule 13(a)-14(a) or 15(d)-14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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Signature Title Date

/s/William D.

Sullivan Chairman of February 28, 2022

Sullivan the Board of Directors

Glick Chairman of February 27, 2023

Glick the Board of Directors

Murphy President, Chief Executive Officer, February 27, 2023

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Director February 27, 2023

Glick Director February 28, 2022

Luna Director February 27, 2023

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We have audited the accompanying consolidated balance sheets of TETRA Technologies, Inc.

(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”).

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.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

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, 2022, 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 27, 2023 expressed an unqualified opinion.

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

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.

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.

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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.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

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.

Accordingly, we express no such opinion.

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.

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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:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgements.

We determined that there are no critical audit matters.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of

TETRA Technologies, Inc.

and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations, comprehensive income (loss), equity, and cash flows of TETRA Technologies, Inc.

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).

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.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

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.

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.

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.

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.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We served as the Company's auditor from 1981 to 2020.

Houston, Texas

March 16, 2020, except for Note 3, as to

which the date is March 5, 2021

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

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Cash and cash equivalents $ 13,592 $ 31,551

Restricted cash — 65

Trade accounts receivable, net of allowance for doubtful accounts of $ 538 in 2022 and $ 289 in 2021

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Inventories 72,113 69,098

Current assets associated with discontinued operations — 710,006

Prepaid expenses and other current assets 23,112 18,539

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Total long-term liabilities 203,702 202,561

Commitments and contingencies (Note 11)

Commitments and contingencies (Note 11 - “Commitments and Contingencies”)

TETRA stockholders’ equity:

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Impairments and other charges 2,804 581 556

Insurance recoveries ( 3,750 ) — —

Total cost of revenues 432,102 329,035 310,172

Gross profit 121,111 59,237 67,543

Exploration and pre-development costs 6,635 — —

General and administrative expense 91,942 75,049 76,697

Goodwill impairment — — 25,784

Interest expense, net 15,833 16,377 18,926

Gain on sales of assets ( 1,040 ) ( 2,878 ) ( 1,665 )

Other (income) expense, net ( 4,465 ) ( 17,468 ) ( 2,994 )

Loss before taxes and discontinued operations ( 14,721 ) ( 25,086 ) ( 128,109 )

Income (loss) before taxes and discontinued operations 11,166 ( 14,721 ) ( 25,086 )

Provision for income taxes 3,565 2,084 1,758

Loss from continuing operations

Income (loss) from continuing operations

7,601 ( 16,805 ) ( 26,844 )

Discontinued operations:

Income (loss) from discontinued operations, net of taxes 195 120,407 ( 72,089 )

Net income (loss) 7,796 103,602 ( 98,933 )

(income) loss attributable to noncontrolling interest (1)

loss (income) attributable to noncontrolling interest (1)

43 ( 269 ) 47,790

Net income (loss) attributable to TETRA stockholders $ 7,839 $ 103,333 $ ( 51,143 )

Basic and diluted net income (loss) per common share attributable to TETRA stockholders:

Loss from continuing operations

Basic net income (loss) per common share:

Income (loss) from continuing operations

$ 0.06 $ ( 0.13 ) $ ( 0.22 )

Income (loss) from discontinued operations 0.00 0.95 ( 0.19 )

Net income (loss) $ 0.82 $ ( 0.41 ) $ ( 1.17 )

Weighted average common shares outstanding:

Basic and diluted 126,602 125,838 125,600

(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.

Net income (loss) attributable to TETRA stockholders $ 0.06 $ 0.82 $ ( 0.41 )

Weighted average basic shares outstanding 128,082 126,602 125,838

Diluted net income (loss) per common share:

Income (loss) from continuing operations $ 0.06 $ ( 0.13 ) $ ( 0.22 )

Income (loss) from discontinued operations 0.00 0.95 ( 0.19 )

Net income (loss) attributable to TETRA stockholders $ 0.06 $ 0.82 $ ( 0.41 )

Weighted average diluted shares outstanding 129,778 126,602 125,838

(1) (Income) loss attributable to noncontrolling interest includes (income) loss from discontinued operations, net of taxes of zero , $( 333 ), and $ 47,898 for the years ended December 31, 2022, 2021 and 2020, respectively.

See Notes to Consolidated Financial Statements

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Foreign currency translation gain (loss), net of taxes of $0 in 2022, $0 in 2021, and $0 in 2020 ( 2,059 ) ( 4,623 ) 2,386

Unrealized loss on investment in CarbonFree convertible note ( 72 ) — —

Comprehensive income (loss) 5,665 98,979 ( 96,547 )

comprehensive (income) loss attributable to noncontrolling interest ( 269 ) 47,673 12,755

comprehensive loss (income) attributable to noncontrolling interest 43 ( 269 ) 47,673

Comprehensive income (loss) attributable to TETRA stockholders $ 5,708 $ 98,710 $ ( 48,874 )

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Comprehensive Income (Loss) Retained

Earnings Noncontrolling

Earnings Non-controlling

Interest Total

Translation Unrealized Gain (Loss) on Investment

Balance at December 31, 2019 $ 1,283 $ 466,959 $ ( 19,164 ) $ ( 52,183 ) $ — $ ( 362,522 ) $ 128,453 $ 162,826

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Translation adjustment, net of taxes of $0

— — — 2,269 — — 117 2,386

Comprehensive loss ( 96,547 )

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Equity compensation expense — 5,184 — — — — 1,254 6,438

Conversions of CSI Compressco Series A Preferred — — — — — 2,539 2,539

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

Net loss for 2020 — — — — ( 51,143 ) ( 47,790 ) ( 98,933 )

Net income for 2021 — — — — — 103,333 269 103,602

Translation adjustment, net of taxes of $0

Comprehensive loss ( 96,547 )

Distributions to CSI Compressco public unitholders — — — — — ( 1,244 ) ( 1,244 )

— — — ( 4,623 ) — — — ( 4,623 )

Comprehensive income 98,979

Deconsolidation of CSI Compressco — — — 7,605 — — ( 82,775 ) ( 75,170 )

Dividend — — — — — — ( 110 ) ( 110 )

Equity award activity 12 — — — — — — 12

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Translation adjustment, net of taxes of $0

— — — ( 2,059 ) — — — ( 2,059 )

Other comprehensive income (loss) — — — — ( 72 ) — — ( 72 )

Comprehensive income 5,665

Deconsolidation of CSI Compressco 7,605 — ( 82,775 ) ( 75,170 )

Dividend — — — — — ( 110 ) ( 110 )

Equity award activity 12 — — — — — 12

Treasury stock activity, net — — ( 473 ) — — — ( 473 )

Equity compensation expense — 4,482 — — — — — 4,482

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Depreciation, amortization, and accretion 32,819 33,532 118,747

(Gain on sale) or loss on disposal of discontinued operations ( 120,137 ) — 7,500

Gain on sale on disposal of discontinued operations — ( 120,137 ) —

Impairments and other charges 2,804 581 20,940

Impairment of goodwill — — 25,784

Unrealized loss on CSI Compressco units

Unrealized (gain) loss on Investments ( 180 ) 2,227 —

Realized gain on sale of Standard Lithium shares — ( 15,479 ) —

Equity-based compensation expense 6,880 4,664 6,616

(Recovery of) provision for doubtful accounts ( 654 ) 6,857 5,039

Provision for (recovery of) doubtful accounts 42 ( 654 ) 6,857

Amortization and expense of financing costs 3,376 3,091 5,252

Gain from insurance recoveries associated with damaged equipment ( 3,750 ) — —

CSI Compressco debt exchange expenses

CSI Compressco Series A Preferred Unit distributions and adjustments

Gain on sale of assets ( 1,170 ) ( 482 ) ( 4,668 )

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Principal payments on long-term debt ( 12,483 ) ( 50,477 ) ( 487,574 )

Payments on finance lease obligations ( 1,302 ) — —

Distributions to CSI Compressco public unitholders

— — ( 1,244 )

Redemptions of CSI Compressco Series A Preferred

— — ( 28,049 )

Debt issuance costs and other financing activities — ( 1,191 ) ( 6,458 )

Net cash used in financing activities ( 50,054 ) ( 17,629 ) ( 5,925 )

Net cash provided by (used in) financing activities 40 ( 50,054 ) ( 17,629 )

Effect of exchange rate changes on cash ( 452 ) ( 1,771 ) 805

(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

Increase (decrease) in cash and cash equivalents and restricted cash ( 17,959 ) ( 52,343 ) 66,126

Cash and cash equivalents at beginning of period 31,551 83,894 17,768

Cash and cash equivalents at beginning of period associated with discontinued operations — 16,577 2,370

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

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

Cash and cash equivalents at beginning of period associated with continuing operations 31,551 67,317 15,398

Cash and cash equivalents at end of period 13,592 31,551 83,894

Cash and cash equivalents at end of period associated with discontinued operations — — 16,577

Cash and cash equivalents at end of period associated with continuing operations $ 13,592 $ 31,551 $ 67,317

See Notes to Consolidated Financial Statements

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NOTE 1 — ORGANIZATION AND OPERATIONS

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 are an energy services and solutions 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.

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and its consolidated subsidiaries on a consolidated basis.

Our Completion Fluids & Products Division manufactures and markets clear brine fluids, additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States and in certain countries in Latin America, Europe, Asia, the Middle East and Africa.

Our Completion Fluids & Products Division manufactures and markets clear brine fluids (“CBFs”), additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States and in certain countries in Latin America, Europe, Asia, the Middle East, and Africa.

The Division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry, and markets TETRA PureFlow ® ultra-pure zinc bromide to several battery technology companies.

Our Water & Flowback Services Division provides onshore oil and gas operators with comprehensive water management services.

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.

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, 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

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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.

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.

CSI Compressco was determined to be a variable interest entity and we, through our ownership of the general partner in CSI Compressco through January 29, 2021, 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.

As such, we were considered the primary beneficiary and consolidated the financial statements of CSI Compressco through January 29, 2021.

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.

Following the closing of the transaction, we retained an interest in CSI Compressco representing approximately 3.7 % of the outstanding common units as of December 31, 2022.

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Financial Instruments

Financial instruments that subject us to concentrations of credit risk consist principally of trade receivables with companies in the energy industry.

Financial instruments that subject us to concentrations of credit risk consist principally of trade receivables.

Our policy is to evaluate, prior to providing goods or services, each customer’s financial condition and to determine the amount of open credit to be extended.

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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.

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.

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 sheets.

Long-term finance leases are included in machinery and equipment, accrued liabilities and other and other liabilities in our consolidated balance sheets.

We determine whether a contract is or contains a lease at inception of the contract.

Where we are a lessee in a contract that includes an option to extend or terminate the lease, we include the extension period or exclude the period covered by the termination option in our lease term in determining the right-of-use asset and lease liability, if it is reasonably certain that we would exercise the option.

As an accounting policy election, we do not include short-term leases on our balance sheet.

Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to exercise.

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.

As an accounting policy election, we do not include short-term leases on our balance sheets.

Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to

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.

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.

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Product sales revenues are recognized at a point in time when we transfer control of our product offerings to our customers, generally when we ship products from our facility to our customer.

The product sales for our Completion Fluids & Products Division consist primarily of clear brine fluids (“CBFs”), additives, and associated manufactured products.

The product sales for our Completion Fluids & Products Division consist primarily of CBFs, additives, and associated manufactured products.

Certain customers have bill-and-hold arrangements.

Revenue for bill-and-hold arrangements is recognized when control transfers to the customer, even though the customer may not have physical possession of the product.

Control transfers when there is a substantive reason for the arrangement, the product is identified as belonging to the customer, is ready for physical transfer, and cannot be directed for use by anyone but the customer.

Product sales for our Water & Flowback Services Division are typically attributed to specific performance obligations within certain production testing service arrangements.

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Service revenue recognized over time is associated with a majority of our Water & Flowback Services Division arrangements, and a small portion of Completion Fluids & Products Division revenue that is associated with completion fluid service arrangements.

O ur customer contracts are generally for terms of one year or less.

Our customer contracts are generally for terms of one year or less.

The majority of the service arrangements in the Water & Flowback Services Division are for a period of 90 days or less.

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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.

For products returned by the customer, we estimate the expected

returns based on an analysis of historical experience.

For products returned by the customer, we estimate the expected 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.

In certain contracts for the sale of CBFs, we may agree to issue credits for the repurchase of reclaimable used fluids from certain customers at an agreed price that is based on the condition of the fluids.

Contract Assets and Liabilities.

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Total equity-based compensation expense, net of taxes, for the three years ended December 31, 2022, 2021, and 2020, was $ 6.8 million, $ 4.6 million, and $ 4.3 million, respectively.

General and administrative expense for the year ended December 31, 2022 also includes $ 2.4 million for a portion of short-term incentive compensation that is expected to be settled in stock rather than cash during the first quarter of 2023.

For further discussion of equity-based compensation, see Note 13 – “Equity-Based Compensation and Other” .

Mineral Resources Arrangements

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.

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.

During the years ended December 31, 2021, 2020 and 2019, income from this arrangement was $ 1.1 million, $ 3.1 million and $ 1.1 million, respectively, including the value of cash and stock received, and changes in the value of stock held.

This income is included in other income (expense), net in our consolidated statements of operations.

We are party to agreements in which Standard Lithium Ltd.

(“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.

The Company receives cash and stock of Standard Lithium (NYSE:SLI) 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.

During the years ended December 31, 2022, 2021, and 2020, income from this arrangement was $ 3.3 million, $ 1.1 million, and $ 3.1 million, respectively, including the value of cash and stock received, and $( 1.4 ) million, $( 1.8 ) million and $ 0.9 million, respectively, for unrealized gains (losses) on changes in the value of Standard Lithium stock held.

We also recognized $ 15.5 million of income during 2021 from the sale of our shares in Standard Lithium.

This income is included in other (income) expense, net in our consolidated statements of operations.

See Note 14 - “Fair Value Measurements” for further discussion.

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Accumulated other comprehensive income (loss) is included in equity in the accompanying consolidated balance sheets and consists of the cumulative currency translation adjustments associated with such international operations.

Activity within our accumulated other comprehensive income (loss) is not subject to reclassifications to net income.

In addition, the change in the fair value of the convertible note issued by CarbonFree Chemicals Holdings, LLC (“CarbonFree”), excluding the embedded option, is included in other comprehensive income (loss) in our consolidated statements of comprehensive income.

The portion of our accumulated other comprehensive income (loss) attributable to the convertible note is subject to reclassifications to net income if or when we settle the CarbonFree convertible note.

See Note 8 – “Investments” for further discussion of the convertible note.

Income (Loss) per Common Share

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The calculation of basic earnings per share excludes any dilutive effects of equity awards or warrants.

The 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.

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.

The 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.

For the years ended December 31, 2021, and 2020, 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 from continuing operations recorded during the year.

Foreign Currency Translation

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.

The United States dollar is the designated functional currency for all of our other non-U.S.

We have designated the Euro, the British pound, the Canadian dollar, and the Brazilian real as the functional currencies for our operations in Finland and Sweden, the United Kingdom, Canada, and Brazil,

respectively.

The United States dollar is the designated functional currency for all of our other significant non-U.S.

The cumulative translation effects of translating the applicable accounts from the functional currencies into the U.S.

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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.

See Note 8 – “Investments” and 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).

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Interest paid $ 15,669 $ 14,347 $ 63,935

$ 14,347 $ 63,935 $ 68,332

Income taxes paid $ 3,270 $ 2,100 $ 5,633

2,100 5,633 7,274

Accrued capital expenditures at year end $ 7,036 $ 7,491 $ 1,573

(1) Prior-year information includes the activity for CSI Compressco for the full period.

Current-year information includes activity for CSI Compressco for January only.

(1) I nformation for the year ended December 31, 2020 includes the activity for CSI Compressco for the full period.

Information for the year ended December 31, 2021 includes activity for CSI Compressco for January only.

New Accounting Pronouncements

Standards adopted in 2021

In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740):

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.

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.

The adoption of this standard did not have a material impact on our consolidated financial statements.

Standards not yet adopted

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Updates at each reporting date after initial adoption will be recorded through selling, general, and administrative expense.

ASU 2016-13 is effective for us the first quarter of fiscal 2023.

We continue to assess the potential effects of these changes to our consolidated financial statements.

On January 1, 2023, we adopted ASU 2016-13.

The adoption of this standard did not have a material impact on 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.

Entities may elect to apply the amendments for contract modifications made on or before December 31, 2022.

In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.” Entities may elect to apply the amendments for contract

modifications made on or before December 31, 2024.

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.

If LIBOR is not available, we cannot predict what alternative index would be negotiated with our lenders.

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.

We will assess the impact of adopting ASU 2020-04, as extended by ASU 2022-06, on our consolidated financial statements if or when our contracts are modified to eliminate references to LIBOR.

NOTE 3 – DISCONTINUED OPERATIONS

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We recognized a primarily non-cash accounting gain of $ 120.1 million during the year ended December 31, 2021 related to the GP Sale.

The gain is included in income (loss) from discontinued operations, net of taxes in our consolidated statement of operations.

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.

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.

The gain, most of which was a function of CSI Compressco having a negative carrying value within our consolidated balance sheet due to our share of cumulative losses and distributions, is included in income (loss) from discontinued operations, net of taxes in our consolidated statement of operations.

We also provided back-office support to CSI Compressco under a Transition Services Agreement until CSI Compressco completed a full separation from our back-office support functions during the first quarter of 2022.

In the second quarter of 2022, we received $ 0.3 million from CSI Compressco for the sale of equipment.

During the year ended December 31, 2022, we received $ 0.4 million from CSI Compressco for services provided under the Transition Services Agreement and distributions, and paid less than $ 0.1 million to CSI Compressco for reimbursement of expenses.

During the year ended December 31, 2021, we received $ 7.0 million from CSI Compressco for services provided under the Transition Services Agreement, distributions and other reimbursements and paid $ 0.5 million to CSI Compressco for reimbursement of expenses.

Our interest in CSI Compressco and the general partner represented substantially all of our Compression Division.

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.

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.

Our consolidated statements of comprehensive income, statements of equity and statements of cash flows combine continuing and discontinued operations.

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.

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.

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.

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:

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December 31, 2022

Offshore Services Maritech Total

General and administrative expense $ 31 $ — $ 31

Other expense, net — ( 226 ) ( 226 )

Pretax income (loss) from discontinued operations $ ( 31 ) $ 226 195

Income from discontinued operations attributable to TETRA stockholders $ 195

December 31, 2021

Compression Offshore Services Total

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Loss from discontinued operations attributable to TETRA stockholders $ ( 24,191 )

December 31, 2019

Compression Offshore Services Maritech Total

Revenue 476,692 — — 476,692

Cost of revenues 320,037 ( 192 ) — 319,845

Depreciation, amortization, and accretion 76,663 52 — 76,715

General and administrative expense 43,281 2,618 — 45,899

Interest expense, net 51,974 — — 51,974

CSI Compressco Series A Preferred Units fair value adjustment expense

1,309 — — 1,309

Other (income) expense, net ( 558 ) 117 118 ( 323 )

Pretax loss from discontinued operations ( 16,014 ) ( 2,595 ) ( 118 ) ( 18,727 )

Pretax loss on disposal of discontinued operations ( 7,500 )

Total pretax loss from discontinued operations ( 26,227 )

Income tax provision 3,353

Loss from discontinued operations ( 29,580 )

Loss from discontinued operations attributable to noncontrolling interest 13,538

Loss from discontinued operations attributable to TETRA stockholders $ ( 16,042 )

Reconciliation of Major Classes of Assets and Liabilities of the Discontinued Operations to Amounts Presented Separately in the Statement of Financial Position

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December 31, 2021

Compression Offshore Services Maritech Total

Carrying amounts of major classes of assets included as part of discontinued operations

Cash and cash equivalents $ 16,577 $ — $ — $ 16,577

Trade receivables 43,837 — — 43,837

Inventories 31,220 — — 31,220

Other current assets 5,231 — — 5,231

Property, plant, and equipment 551,401 — — 551,401

Other assets 61,740 — — 61,740

Total assets associated with discontinued operations (1)

$ 710,006 $ — $ — $ 710,006

Offshore Services Maritech Total

Carrying amounts of major classes of liabilities included as part of discontinued operations

Trade payables $ 1,157 $ — $ 1,157

Unearned income 269 — — 269

Accrued liabilities and other — 228 228

Long-term debt, net 638,631 — — 638,631

Other liabilities 37,253 — — 37,253

Total liabilities associated with discontinued operations $ 1,157 $ 228 $ 1,385

$ 732,237 $ 1,574 $ 228 $ 734,039

(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.

See Note 11 - “Commitments and Contingencies” for further discussion of contingencies of discontinued operations.

NOTE 4 — REVENUE FROM CONTRACTS WITH CUSTOMERS

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Unearned income is included in accrued liabilities and other in our consolidated balance sheets.

During the year ended December 31, 2022 , we recognized approximately $ 0.6 million of revenue deferred in unearned income as of the beginning of the period.

This amount is included in products sales and services revenues in our consolidated statements of operations.

Revenue recognized during the years ended December 31 2021 and 2020 deferred as of the end of the preceding year was not significant.

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$ 553,213 $ 388,272 $ 377,715

We are also party to agreements in which Standard Lithium has the right to explore, and an option to acquire the rights to produce and extract lithium in our Arkansas leases as well as other potential resources in the Mojave region of California.

The Company receives cash and stock of Standard Lithium under the terms of the arrangements.

See Minerals Resources Arrangements within Note 2 - “Summary of Significant Accounting Policies” for further discussion.

NOTE 5 — INTANGIBLES

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NOTE 6 — IMPAIRMENTS AND OTHER CHARGES

Impairments of Long-Lived Assets

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.

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.

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.

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.

Impairment of Goodwill

Our Water & Flowback Services Division consists of two reporting units, Production Testing and Water Management.

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.

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.

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.

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.

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):

Simplifying the Test for Goodwill Impairment.” This resulted in an impairment of the entire goodwill balance of $ 25.8 million at December 31, 2019.

Impairments of Inventory and Long-Lived Assets

During the second quarter of 2022, our Completion Fluids & Products and Water & Flowback Services Divisions each recorded certain inventory and long-lived tangible asset impairments.

Our Water & Flowback Services Division recorded impairments, including $ 1.3 million of equipment, $ 0.2 million of inventory, and $ 0.5 million for land and buildings.

The Completion Fluids & Products Division also recorded a $ 0.2 million impairment related to obsolete inventory.

The inventory and equipment for both divisions are no longer expected to be used and were written down to zero or scrap value.

The fair value of land and buildings of $ 0.4 million was estimated based on recent sales price per square acre or square foot of comparable properties (a Level 3 fair value measurement in accordance with the fair value hierarchy).

During the fourth quarter of 2022, our Completion Fluids & Products and Water & Flowback Services Divisions recorded additional long-lived tangible asset impairments totaling $ 0.3 million and $ 0.1 million, respectively.

The Completion Fluids & Products Division impairment relates to equipment that is no longer expected to be used and was written down to estimated scrap value.

The long-lived tangible asset impairment recorded by the Water & Flowback Services Division in the fourth quarter of 2022 was a result of storm damage sustained to buildings in December 2022 and remediation work identified during the quarter.

The fair value of land and buildings was adjusted to $ 0.2 million based on recent sales offers (a Level 3 fair value measurement in accordance with the fair value hierarchy).

During 2021, we recorded an impairment charge of $ 0.6 million primarily related to idle equipment in our Canada office within our Water & Flowback Services Division.

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.

NOTE 7 – INVENTORIES

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Total inventories $ 72,113 $ 69,098

Finished goods inventories include newly manufactured clear brine fluids as well as used brines that are repurchased from certain customers for recycling.

Finished goods inventories include newly manufactured CBFs as well as used brines that are repurchased from certain customers for recycling.

NOTE 8 — INVESTMENTS

As of December 31, 2021, we retained an interest in CSI Compressco representing approximately 3.8 % of the outstanding common units.

The Company receives cash and stock of Standard Lithium (NYSE:SLI) under the terms of the arrangements.

During the fourth quarter of 2021,

we sold the 1.6 million shares of Standard Lithium shares we owned for approximately $ 17.6 million, before broker and transaction fees.

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.

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.

In December 2021, we invested $ 5.0 million in a convertible note issued by CarbonFree.

Our exposure to potential losses by CarbonFree is limited to our investment in the convertible note.

Our investments as of December 31, 2022 and 2021, consist of the following:

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Total investments $ 14,286 $ 11,233

Following the closing of the GP Sale, we continue to own approximately 3.7 % of the outstanding CSI Compressco common units (NASDAQ:

CCLP) as of December 31, 2022.

In May 2021, we signed a memorandum of understanding (“MOU”) with CarbonFree, a carbon capture company with patented technologies that capture CO 2 and mineralize emissions to make commercial, carbon-negative chemicals.

Although the MOU expired in May 2022 at the end of its twelve-month term, we have an intellectual property joint development agreement in place with CarbonFree to evaluate potential new technologies.

In December 2021, we invested $ 5.0 million in a convertible note issued by CarbonFree.

Interest on the convertible note is capitalized into the convertible note annually in December.

Our exposure to potential losses by CarbonFree is limited to our investment in the convertible note and associated interest.

The Company receives cash and stock of Standard Lithium under the terms of the arrangements.

During the fourth quarter of 2021, we sold 1.6 million shares of Standard Lithium shares we owned for approximately $ 17.6 million, before broker and transaction fees.

See Note 14 - “Fair Value Measurements” for further information.

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We have finance leases for certain facility storage tanks and equipment rentals.

These finance leases are not material to our financial statements.

Our leases have remaining lease terms ranging from 1 to 12 years.

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Short-term lease expense 39,890 22,055 17,125

Finance lease cost:

Amortization of right-of-use assets 177 — —

Interest on finance leases 135 — —

Total lease expense $ 52,805 $ 34,960 $ 31,071

For the years ended December 31, 2021, 2020 and 2019, we recognized sublease income of $ 1.0 million.

For the years ended December 31, 2022, 2021, and 2020, we recognized sublease income of $ 1.4 million, $ 1.0 million, and $ 1.0 million, respectively.

Variable rent expense was not material.

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Operating cash flows - operating leases $ 12,889 $ 12,962 $ 13,612

Operating cash flows - finance leases $ 135 $ — $ —

Financing cash flows - finance leases $ 1,302 $ — $ —

Right-of-use assets obtained in exchange for lease obligations:

Operating leases $ 5,524 $ 3,168 $ 5,612

Finance leases $ 3,261 $ — $ —

Supplemental balance sheet information:

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Total operating lease liabilities $ 35,903 $ 39,537

Finance leases:

Finance lease right-of-use assets $ 2,834 $ —

Finance lease liabilities, current portion 1,332 —

Finance lease liabilities 464 —

Total finance lease liabilities $ 1,796 $ —

Additional operating lease information:

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Operating leases 5.8 years 6.4 years

Finance leases 1.3 years 0.0 years

Weighted average discount rate:

Operating leases 9.7 % 9.7 %

Future minimum lease payments by year and in the aggregate, under non-cancelable operating leases with terms in excess of one year consist of the following at December 31, 2021:

Operating Leases

Finance leases 9.3 % — %

Future minimum lease payments by year and in the aggregate, under non-cancelable operating and finance leases with terms in excess of one year consist of the following at December 31, 2022:

Operating Leases Finance Leases

(In Thousands)

2023 $ 10,562 $ 1,435

2024 8,769 475

Thereafter 8,243 —

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TETRA Scheduled Maturity

Asset-based credit agreement (1)

May 31, 2025 $ 67 $ —

Term credit agreement (2)

September 10, 2025 $ 154,570 $ 151,869

Asset-based credit agreement (1)

May 31, 2025 1,885 67

Swedish credit facility December 31, 2023 3 —

TETRA total debt 156,458 151,936

Less current portion ( 3 ) —

Total long-term debt $ 156,455 $ 151,936

(1) Net of deferred financing costs of $ 1.5 million as of December 31, 2021.

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.

(1) Net of deferred financing costs of $ 1.1 million and $ 1.5 million as of December 31, 2022 and 2021, respectively.

(2) Net of unamortized discount of $ 3.4 million and $ 4.5 million as of December 31, 2022 and 2021, respectively, and net of unamortized deferred financing costs of $ 5.1 million and $ 6.7 million as of December 31, 2022 and 2021, respectively.

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Total maturities $ 166,022

Term Credit Agreement

As of December 31, 2022 TETRA had $ 154.6 million outstanding, net of unamortized discounts and unamortized deferred financing costs under the Term Credit Agreement.

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.

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.

We are not required to offer to prepay any amount based on our Excess Cash Flow for the year ended December 31, 2022.

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.

As of December 31, 2022, the interest rate per annum on borrowings under the Term Credit Agreement is 10.32 %.

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.

Asset-Based Credit Agreement

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.

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.

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”).

As of December 31, 2022, TETRA had $ 3.0 million outstanding and had $ 6.3 million in letters of credit against its asset-based lending agreement (“ABL Credit Agreement”).

The ABL Credit Agreement provides for a senior secured revolving credit facility of up to $ 80 million, with a $ 20 million accordion.

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All obligations under the ABL Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security interest for the benefit of the ABL Lenders on substantially all of the personal property of TETRA and certain subsidiaries of TETRA, the equity interests in certain domestic subsidiaries, and a maximum of 65 % of the equity interests in certain foreign subsidiaries.

Term Credit Agreement

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.

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.

As of December 31, 2021, the interest rate per annum on borrowings under the Term Credit Agreement is 7.25 %.

Swedish Credit Facility

In January 2022, the Company entered into a revolving credit facility for seasonal working capital needs of subsidiaries in Sweden and Finland (“Swedish Credit Facility”).

As of December 31, 2022, we had approximately $ 3 thousand outstanding and availability of approximately $ 4.8 million under the Swedish Credit Facility.

During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days.

Borrowings bear interest at a rate of 2.95 % per annum.

The Swedish Credit Facility expired on December 31, 2022 and has been renewed by the Company through December 31, 2023.

The balance outstanding under the Swedish Credit Facility is included in accrued liabilities and other in our consolidated balance sheet.

Finland Credit Agreement

In January 2022, the Company also entered into an agreement guaranteed by certain accounts receivable and inventory in Finland (“Finland Credit Agreement”).

As of December 31, 2022, we had $ 1.5 million of letters of credit outstanding against the Finland Credit Agreement.

The Finland Credit Agreement expired on January 31, 2023 and has been renewed by the Company through January 31, 2024.

Our credit agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments.

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We are named defendants in several lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business.

While the outcome of lawsuits or other proceedings against us cannot be predicted with certainty, management does not consider it reasonably possible that a loss resulting from such lawsuits or other proceedings in excess of any amounts accrued has been incurred that is expected to have a material adverse impact on our financial condition, results of operations, or liquidity.

While the outcome of lawsuits or other proceedings against us cannot be predicted with certainty, management does not consider it reasonably possible that a loss resulting from such

lawsuits or other proceedings in excess of any amounts accrued has been incurred that is expected to have a material adverse impact on our financial condition, results of operations, or liquidity.

We have a Bromine Requirements Sales Agreement (“Sales Agreement”) to purchase a certain volume of elemental bromine from LANXESS Corporation (formerly Chemtura Corporation) (“LANXESS”), included in Product Purchase Obligations below.

LANXESS notified us of a proposed non-ordinary course increase to the price of bromine, which we believe is not justified nor appropriate under the Sales Agreement.

After lengthy discussions, we and LANXESS were unable to reach an agreement regarding the validity of the proposed price increase;

therefore, we filed for arbitration in May 2022 seeking declaratory relief, among other relief, declaring that the proposed price increase is invalid.

In September 2022, LANXESS filed a counterclaim with the American Arbitration Association seeking declaratory relief, among other relief, declaring that the proposed price increase was valid and seeking damages in the amount of the price increase from July 1, 2022 forward.

In October 2022, we filed a reply to LANXESS’ counterclaim disputing the counterclaim and amending our original demand.

The arbitration is currently pending, and no final hearing date has been set.

Discussions with LANXESS regarding this arbitration are ongoing.

We are unable to predict the duration, scope, or impact of this proceeding on our consolidated financial statements.

Product Purchase Obligations

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The voting, dividend, and liquidation rights of the holders of common stock are subject to the rights of the holders of preferred stock.

The holders of common stock are entitled to one vote for each share held.

The holders of common stock

are entitled to one vote for each share held.

There is no cumulative voting.

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Compensation cost for all share-based payments is based on the grant date fair value and is recognized in earnings over the requisite service period.

Total equity-based compensation expense before tax for the three years ended December 31, 2021, 2020, and 2019, was $ 4.7 million, $ 5.5 million, and $ 5.8 million, respectively, and is included in general and administrative expense.

Total equity-based compensation expense before tax attributed to equity incentive compensation plans for the three years ended December 31, 2022, 2021, and 2020, was $ 4.5 million, $ 4.7 million, and $ 5.5 million, respectively, and is included in general and administrative expense.

Stock Incentive Plans

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In May 2010, our stockholders approved further amendments to the TETRA Technologies, Inc.

Amended and Restated 2007 Equity Incentive Compensation Plan (renamed as the 2007 Long Term Incentive Compensation Plan) which, among other changes, resulted in an additional increase in the maximum number of shares authorized for issuance.

Amended and Restated 2007 Equity Incentive Compensation Plan (renamed as the 2007 Long Term Incentive Compensation Plan) which, among other changes, resulted in an

additional increase in the maximum number of shares authorized for issuance.

Pursuant to the 2007 Long Term Incentive Compensation Plan, we are authorized to grant up to 5,590,000 shares in the form of stock options (including incentive stock options and nonqualified stock options);

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Stock Options

We did not grant any stock options during the year ended December 31, 2021 and 2020.

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 %

Expected life of options 4.4 years

Risk-free interest rate 2.3 %

Expected dividend yield —

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect on the grant date for a period commensurate with the estimated expected life of the stock options.

Expected volatility is based on the historical volatility of our stock over the period commensurate with the expected life of the stock options and other factors.

The dividend yield is based on the current annualized dividend rate in effect during the quarter in which the grant was made.

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.

We did not grant any stock options during the years ended December 31, 2022, 2021, and 2020.

We have stock options outstanding for awards granted prior to 2020.

The following is a summary of stock option activity for the year ended December 31, 2022:

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The total intrinsic value of stock options exercised during the year ended December 31, 2022, was less than $ 0.1 million.

There were no options exercised during the years ended December 31, 2020 or 2019.

There were 80,000 , 11,000 , and zero options exercised during the years ended December 31, 2022, 2021, and 2020, respectively.

At December 31, 2022, total unrecognized compensation cost related to unvested stock options is not significant.

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During the years ended December 31, 2022, 2021, and 2020, the total fair value of shares vested was $ 5.5 million, $ 5.5 million, and $ 4.5 million, respectively.

During 2021, 2020, and 2019, we received 184,699 , 130,785 and 105,622 shares, respectively, of our common stock related to the vesting of certain employee restricted stock.

During 2022, 2021, and 2020, we received zero , 184,699 and 130,785 shares, respectively, of our common stock related to the vesting of certain employee restricted stock.

Such surrendered shares received by us are included in treasury stock.

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We have a 401(k) retirement plan (the “Plan”) that covers substantially all employees and entitles them to contribute up to 70 % 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 %.

Participants will be 100 % vested in employer match contributions after 3 years of service, instead of after 5 years of service.

We match 50 % of each employee’s contribution up to 8 %.

Participants will be 100 % vested in employer match contributions after 3 years of service.

In addition, we can make discretionary contributions which are allocable to participants in accordance with the Plan.

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Financial Instruments

We retained an interest in CSI Compressco (NASDAQ:

CCLP) representing approximately 3.8 % of the outstanding common units as of December 31, 2021.

We retained an interest in CSI Compressco representing approximately 3.7 % of the outstanding common units as of December 31, 2022.

In December 2021, we invested $ 5.0 million in a convertible note issued by CarbonFree.

The Company receives cash and stock of Standard Lithium (NYSE:

SLI) under the terms of its arrangements.

The Company receives cash and stock of Standard Lithium under the terms of its arrangements.

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).

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.

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).

Changes in the value of stock are recorded in other (income) expense, net in our consolidated statements of operations.

Our investment in CarbonFree is recorded in our consolidated financial statements based on an internal valuation with assistance from a third-party valuation specialist (a Level 3 fair value measurement).

The valuation is impacted by key assumptions, including the assumed probability and timing of potential debt or equity offerings.

The convertible note includes an option to convert the note into equity interests issued by CarbonFree.

The change in the fair value of the embedded option is included in other (income) expense, net in our consolidated statements of operations.

The change in the fair value of the convertible note, excluding the embedded option, is included in other comprehensive income (loss) in our consolidated statements of comprehensive income.

Derivative Contracts

We are exposed to financial and market risks that affect our businesses.

We have concentrations of credit risk as a result of trade receivables owed to us by companies in the energy industry.

We have concentrations of credit risk as a result of trade receivables owed to us primarily by companies in the energy industry.

We have currency exchange rate risk exposure related to transactions denominated in foreign currencies as well as to investments in certain of our international operations.

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The fair values of foreign currency derivative instruments are based on quoted market values (a Level 2 fair value measurement).

The fair values of our foreign currency derivative instruments as of December 31, 2021 and 2020 was insignificant.

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:

We did not have foreign currency derivative instruments outstanding as of December 31, 2022 or 2021.

During the years ended December 31, 2022, 2021, and 2020, we recognized $ 0.4 million, less than $ 0.1 million, and $ 0.2 million of net 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, 2022 and 2021, is as follows:

Fair Value Measurements Using

6 unchanged sentences

Investment in CarbonFree 6,139 — — 6,139

Investment in Standard Lithium 1,180 1,180 — —

Total $ 14,286

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(In Thousands)

Investment in Standard Lithium $ 2,675 $ 2,675 $ — $ —

Investments in CSI Compressco $ 6,233 6,233 — —

Investments in CarbonFree 5,000 — — 5,000

Total $ 11,233

During 2019, our Completion Fluids & Products and Water & Flowback Services Divisions each recorded certain long-lived tangible asset impairments.

The Completion Fluids & Products Division recorded an impairment of $ 91.6 million related to our El Dorado, Arkansas calcium chloride production plant facility assets primarily due to 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.

Also in 2019, our Water & Flowback Services Division recorded goodwill impairment of $ 25.8 million.

The fair values used in these impairment calculations were estimated based on discounted estimated future cash flows, including projected future cash flows and/or estimated replacement costs, or a fair value in-exchange assumption, which are based on significant unobservable inputs (Level 3) in accordance with the fair value hierarchy.

For further discussion, see Note 6 - “Impairments and Other Charges”.

A summary of these nonrecurring fair value measurements during the year ended December 31, 2019, using the fair value hierarchy, is as follows:

Fair Value Measurements Using

Description Fair Value Quoted Prices in Active Markets for Identical Assets

or Liabilities

(Level 1) Significant

(Level 2) Significant

(Level 3) Year-to-Date

Impairment Losses

(In Thousands)

Completion Fluids & Products production facility $ 9,459 $ — $ — $ 9,459 $ 91,606

Water & Flowback Services goodwill $ — — — — 25,784

Water & Flowback Services equipment $ — — — — 284

$ 9,459 $ — $ — $ 9,459 $ 117,674

The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt pursuant to TETRA's ABL Credit Agreement and Term Credit Agreement approximate their carrying amounts.

The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings, and long-term debt pursuant to TETRA's Term Credit Agreement, ABL Credit Agreement and Swedish Credit Agreement approximate their carrying amounts.

NOTE 15 — INCOME TAXES

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(In Thousands)

Income tax benefit computed at statutory federal income tax rates $ ( 3,091 ) $ ( 5,268 ) $ ( 26,903 )

Income tax provision (benefit) computed at statutory federal income tax rates $ 2,345 $ ( 3,091 ) $ ( 5,268 )

State income taxes (net of federal benefit) 1,332 ( 386 ) ( 2,124 )

Nondeductible expenses 1,270 710 303

Impact of international operations 1,955 ( 4,083 ) 4,036

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We recognize interest and penalties related to uncertain tax positions in income tax expense.

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.

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.

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.

During the year ended December 31, 2022, we recognized no interest and penalties.

We recognized less than $ 0.1 million and $ 0.2 million for the years ended December 31, 2021 and 2020, respectively, of interest and penalties.

As of December 31, 2022 and 2021, we had no unrecognized tax benefits.

We do not expect a significant change to the unrecognized tax benefits during the next twelve months.

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The following table summarizes the earliest tax years that remain subject to examination by taxing authorities in any major jurisdiction in which we operate:

Jurisdiction Earliest Open Tax Period

Earliest Open Tax Period

United States – Federal 2012

United States – State and Local 2004

jurisdictions 2011

Non-United States Jurisdictions 2011

We use the liability method for reporting income taxes, under which current and deferred tax assets and liabilities are recorded in accordance with enacted tax laws and rates.

1 unchanged sentence

We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

We considered all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of our deferred tax assets.

We considered all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a

valuation allowance is needed for some portion or all of our deferred tax assets.

In determining the need for a valuation allowance on our deferred tax assets we placed greater weight on recent and objectively verifiable current information, as compared to more forward-looking information that is used in valuating other assets on the balance sheet.

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Depreciation and amortization for book in excess of tax expense 9,163 10,965

Investment in Partnership — 23,344

All other 10,512 11,913

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The valuation allowance as of December 31, 2022 and 2021 primarily relates to federal deferred tax assets.

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.

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.

These temporary differences were fully offset by a valuation allowance.

The $ 4.9 million decrease in the valuation allowance during the year ended December 31, 2022 was primarily due to the decrease in deferred tax assets related to utilization of loss carryforwards.

At December 31, 2022, we had federal, state, and foreign net operating loss carryforwards/carrybacks equal to approximately $ 86.2 million, $ 11.1 million, and $ 7.8 million, respectively.

2 unchanged sentences

NOTE 16 — NET INCOME (LOSS) PER SHARE

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.

The following is a reconciliation of the weighted average number of common shares outstanding with the number of shares used in the computations of net income (loss) per common and common equivalent share:

Year Ended December 31,

2022 2021 2020

(In Thousands)

Number of weighted average common shares outstanding 128,082 126,602 125,838

Assumed exercise of stock options 1,696 — —

Average diluted shares outstanding 129,778 126,602 125,838

The average diluted shares outstanding excludes the impact of certain outstanding equity awards and warrants of 1.8 million and 21 thousand shares for the twelve-month periods ended December 31, 2021 and 2020, 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

44 unchanged sentences

General and administrative expense $ 45,077 $ 39,990 $ 36,201

Depreciation, amortization and impairment 1,032 818 631

Depreciation, amortization, accretion, and impairments 692 1,032 818

Interest expense, net 17,041 17,483 20,727

5 unchanged sentences

Corporate, other and eliminations 34,440 51,287

Assets of discontinued operations — 710,006

Consolidated $ 434,366 $ 398,266

9 unchanged sentences

Consolidated $ 40,056 $ 20,533 $ 29,386

(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.

(1) Amounts presented are net of cost of equipment sold, including zero during 2022, zero during 2021 and $ 12.7 million during 2020 for our former Compression Division.

Summarized financial information concerning the geographic areas of our customers and in which we operate at December 31, 2022, 2021, and 2020, is presented below:

4 unchanged sentences

United States $ 391,964 $ 251,786 $ 225,835

Canada and Mexico 5,363 1,347 6,616

South America 10,473 11,583 13,188

Europe 89,077 88,136 90,303

South America 30,560 10,473 11,583

Canada and Mexico 2,213 5,363 1,347

Africa 2,826 2,262 8,128

5 unchanged sentences

Total revenues $ 553,213 $ 388,272 $ 377,715

During each of the two years ended December 31, 2021 and 2020, no single customer accounted for more than 10% of our consolidated revenues.

One customer provided more than 10% of our consolidated revenues during the year ended December 31, 2019.

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.

As of December 31, 2022, receivables from one customer represented more than 10 % of our consolidated trade accounts receivables, net of allowance for doubtful accounts.

During each of the years ended December 31, 2022, 2021, and 2020, no single customer accounted for more than 10% of our consolidated revenues.

(In Thousands)

1 unchanged sentence

United States $ 305,144 $ 291,986

Canada and Mexico 5,891 6,452

South America 21,837 10,388

Europe 71,075 72,685

South America 51,448 21,837

Canada and Mexico 1,355 5,891

Africa 199 199

Middle East, Asia and other 5,145 5,668

Assets of discontinued operations — 710,006

Total identifiable assets $ 434,366 $ 398,266

NOTE 18 — SUBSEQUENT EVENTS

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.

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”).

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.

During each year, all outstanding loans under the Swedish Credit Facility must be repaid for at least 30 consecutive days.

Borrowings bear interest at a rate of 2.95 % per annum.

The Swedish Credit Facility expires on December 31, 2022 and the Company intends to renew it annually.

Our Lake Charles facility incurred damage due to Hurricane Laura in 2020 for which we received partial insurance proceeds in 2020.

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.

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.

Our Lake Charles facility incurred damage due to Hurricane Laura in 2020 for which we received partial insurance proceeds in 2020 and a $ 3.8 million voluntary settlement in February 2022.

In February 2023, we reached a voluntary settlement of an additional $ 2.8 million with another party, which we expect to recognize as other income during the first half of 2023.

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.

What changed 10-K

Item 9A. Controls and Procedures