Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 22, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-38066 | ||
Entity Registrant Name | Select Energy Services, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-4561945 | ||
Entity Address, Address Line One | 1233 W. Loop South, Suite 1400 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77027 | ||
City Area Code | 713 | ||
Local Phone Number | 235-9500 | ||
Title of 12(b) Security | Class A common stock, par value $0.01 per share | ||
Trading Symbol | WTTR | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Public Float | $ 284.2 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001693256 | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 86,437,630 | ||
Class B Common Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 16,221,101 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 169,039 | $ 79,268 |
Accounts receivable trade, net of allowance for credit losses of $9,157 and $5,773, respectively | 129,392 | 267,628 |
Accounts receivable, related parties | 69 | 4,677 |
Inventories | 33,384 | 37,542 |
Prepaid expenses and other current assets | 19,621 | 26,486 |
Total current assets | 351,505 | 415,601 |
Property and equipment | 878,902 | 1,015,379 |
Accumulated depreciation | (528,537) | (562,986) |
Property and equipment held-for-sale, net | 885 | |
Total property and equipment, net | 350,365 | 453,278 |
Right-of-use assets, net | 52,331 | 70,635 |
Goodwill | 266,934 | |
Other intangible assets, net | 116,079 | 136,952 |
Other long-term assets, net | 5,079 | 4,220 |
Total assets | 875,359 | 1,347,620 |
Current liabilities | ||
Accounts payable | 12,995 | 35,686 |
Accrued accounts payable | 21,359 | 47,547 |
Accounts payable and accrued expenses, related parties | 519 | 2,789 |
Accrued salaries and benefits | 16,279 | 20,079 |
Accrued insurance | 9,788 | 8,843 |
Sales tax payable | 1,415 | 2,119 |
Accrued expenses and other current liabilities | 12,077 | 15,375 |
Current operating lease liabilities | 14,019 | 19,315 |
Current portion of finance lease obligations | 307 | 128 |
Total current liabilities | 88,758 | 151,881 |
Long-term operating lease liabilities | 60,984 | 72,143 |
Other long-term liabilities | 19,735 | 10,784 |
Total liabilities | 169,477 | 234,808 |
Commitments and contingencies (Note 11) | ||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued and outstanding as of December 31, 2020 and December 31, 2019 | ||
Additional paid-in capital | 909,278 | 914,699 |
Accumulated (deficit) retained earnings | (317,247) | 21,437 |
Total stockholders' equity | 593,061 | 937,177 |
Noncontrolling interests | 112,821 | 175,635 |
Total equity | 705,882 | 1,112,812 |
Total liabilities and equity | 875,359 | 1,347,620 |
Class A Common Stock | ||
Current liabilities | ||
Common stock | 868 | 879 |
Total equity | 868 | 879 |
Class B Common Stock | ||
Current liabilities | ||
Common stock | 162 | 162 |
Total equity | $ 162 | $ 162 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 9,157 | $ 5,773 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Class A Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 350,000,000 | 350,000,000 |
Common Stock, Shares, Issued | 86,812,647 | 87,893,525 |
Common Stock, Shares, Outstanding | 86,812,647 | 87,893,525 |
Class A-2 Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
Common Stock, Shares, Issued | 0 | 0 |
Common Stock, Shares, Outstanding | 0 | 0 |
Class B Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 16,221,101 | 16,221,101 |
Common Stock, Shares, Outstanding | 16,221,101 | 16,221,101 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | |||
Total revenue | $ 605,105 | $ 1,291,589 | $ 1,528,930 |
Costs of revenue | |||
Depreciation and amortization | 98,800 | 116,809 | 130,537 |
Total costs of revenue | 634,370 | 1,142,849 | 1,330,448 |
Gross (loss) profit | (29,265) | 148,740 | 198,482 |
Operating expenses | |||
Selling, general and administrative | 74,364 | 111,622 | 103,156 |
Depreciation and amortization | 2,872 | 3,860 | 3,176 |
Impairment of goodwill and trademark | 276,016 | 4,396 | 17,894 |
Impairment and abandonment of property and equipment | 7,910 | 3,715 | 6,657 |
Impairment of cost-method investment | 2,000 | ||
Lease abandonment costs | 4,350 | 2,073 | 3,925 |
Total operating expenses | 365,512 | 125,666 | 136,808 |
(Loss) income from operations | (394,777) | 23,074 | 61,674 |
Other income (expense) | |||
(Losses) gains on sales of property and equipment and divestitures, net | (2,815) | (11,626) | 3,804 |
Interest expense, net | (2,136) | (2,688) | (5,311) |
Foreign currency gain (loss), net | 39 | 273 | (1,292) |
Other expense, net | (3,519) | (2,948) | (2,872) |
(Loss) income before income tax benefit (expense) | (403,208) | 6,085 | 56,003 |
Income tax benefit (expense) | 1,476 | (1,949) | (1,704) |
Net (loss) income | (401,732) | 4,136 | 54,299 |
Less: net loss (income) attributable to noncontrolling interests | 63,048 | (1,352) | (17,787) |
Net (loss) income attributable to Select Energy Services, Inc. | (338,684) | 2,784 | 36,512 |
Water Services | |||
Revenue | |||
Total revenue | 319,766 | 772,311 | 896,783 |
Costs of revenue | |||
Costs of revenue | 291,734 | 598,405 | 681,546 |
Operating expenses | |||
Impairment of goodwill and trademark | 186,468 | ||
Lease abandonment costs | 4,321 | 1,218 | 2,150 |
Water Infrastructure | |||
Revenue | |||
Total revenue | 125,356 | 221,593 | 230,115 |
Costs of revenue | |||
Costs of revenue | 99,546 | 166,962 | 160,072 |
Operating expenses | |||
Impairment of goodwill and trademark | 80,466 | ||
Lease abandonment costs | 51 | ||
Oilfield Chemicals | |||
Revenue | |||
Total revenue | 159,983 | 268,614 | 259,791 |
Costs of revenue | |||
Costs of revenue | 143,550 | 230,434 | 233,454 |
Operating expenses | |||
Impairment of goodwill and trademark | 9,082 | 12,652 | |
Lease abandonment costs | 42 | 11 | 28 |
Other | |||
Revenue | |||
Total revenue | 29,071 | 142,241 | |
Costs of revenue | |||
Costs of revenue | 740 | 30,239 | 124,839 |
Operating expenses | |||
Impairment of goodwill and trademark | 4,396 | 5,242 | |
Lease abandonment costs | (64) | 844 | 1,747 |
Class A Common Stock | |||
Other income (expense) | |||
Net (loss) income attributable to Select Energy Services, Inc. | $ (338,684) | $ 2,784 | $ 35,720 |
Net (loss) income per share attributable to common stockholders (Note 16): | |||
Basic | $ (3.98) | $ 0.03 | $ 0.49 |
Diluted | $ (3.98) | $ 0.03 | $ 0.49 |
Class A-2 Common Stock | |||
Other income (expense) | |||
Net (loss) income attributable to Select Energy Services, Inc. | $ 792 | ||
Net (loss) income per share attributable to common stockholders (Note 16): | |||
Basic | $ 0.49 | ||
Diluted | $ 0.49 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net (loss) income | $ (401,732) | $ 4,136 | $ 54,299 |
Other comprehensive (loss) income | |||
Foreign currency translation adjustment, net of tax of $0 | 368 | (670) | |
Comprehensive (loss) income | (401,732) | 4,504 | 53,629 |
Less: comprehensive loss (income) attributable to noncontrolling interests | 63,048 | (1,472) | (17,568) |
Comprehensive (loss) income attributable to Select Energy Services, Inc. | $ (338,684) | $ 3,032 | $ 36,061 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustment, tax amount | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Class A Common StockConversion of Class A-2 to Class A | Class A Common StockConversion of Class B to Class A | Class A Common Stock | Class A-2 Common StockConversion of Class A-2 to Class A | Class A-2 Common Stock | Class B Common StockConversion of Class B to Class A | Class B Common Stock | Conversion of Class B to Class ATotal Stockholders' Equity | Conversion of Class B to Class AAdditional Paid-In Capital | Conversion of Class B to Class ANoncontrolling Interests | Total Stockholders' Equity | Additional Paid-In Capital | Accumulated (Deficit) Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Beginning balance at Dec. 31, 2017 | $ 592,000 | $ 67,000 | $ 404,000 | $ 656,647,000 | $ 673,141,000 | $ (17,859,000) | $ 302,000 | $ 406,722,000 | $ 1,063,369,000 | |||||||
Beginning balance (in shares) at Dec. 31, 2017 | 59,182,176 | 6,731,845 | 40,331,989 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Conversion of common stock | $ 67,000 | $ (67,000) | ||||||||||||||
Conversion of common stock (in shares) | 6,731,839 | (6,731,839) | ||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC units for shares of Class A common stock | $ 144,000 | $ (144,000) | $ 146,865,000 | $ 146,865,000 | $ (146,865,000) | |||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC common units for shares of Class A common stock (in shares) | 14,305,146 | (14,305,146) | ||||||||||||||
ESPP shares issued | 132,000 | 132,000 | (15,000) | 117,000 | ||||||||||||
ESPP shares issued (in shares) | 9,793 | |||||||||||||||
Equity-based compensation | 7,312,000 | 7,312,000 | 3,059,000 | 10,371,000 | ||||||||||||
Issuance of restricted shares | $ 4,000 | 2,325,000 | 2,321,000 | (2,325,000) | ||||||||||||
Issuance of restricted shares (in shares) | 438,182 | |||||||||||||||
Exercise of restricted stock units | 104,000 | 104,000 | (104,000) | |||||||||||||
Exercise of restricted stock units (in shares) | 27,860 | |||||||||||||||
Stock options exercised | $ 1,000 | 1,019,000 | 1,018,000 | (374,000) | 645,000 | |||||||||||
Stock options exercised (in shares) | 79,333 | |||||||||||||||
Repurchase of common stock | $ (17,000) | (17,138,000) | (17,121,000) | 576,000 | (16,562,000) | |||||||||||
Repurchase of common stock ( in shares) | (1,766,428) | (6) | ||||||||||||||
Restricted shares forfeited | $ (1,000) | (383,000) | (382,000) | 383,000 | ||||||||||||
Restricted shares forfeited (in shares) | (51,346) | |||||||||||||||
Distributions to noncontrolling interests, net | (506,000) | (506,000) | ||||||||||||||
NCI income tax adjustment | 209,000 | 209,000 | (209,000) | |||||||||||||
Foreign currency translation adjustment | (670,000) | (670,000) | (290,000) | (960,000) | ||||||||||||
Net (loss) income | 36,512,000 | 36,512,000 | 17,787,000 | 54,299,000 | ||||||||||||
Ending balance at Dec. 31, 2018 | $ 790,000 | $ 260,000 | 832,934,000 | 813,599,000 | 18,653,000 | (368,000) | 277,839,000 | 1,110,773,000 | ||||||||
Ending balance (in shares) at Dec. 31, 2018 | 78,956,555 | 26,026,843 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC units for shares of Class A common stock | $ 98,000 | $ (98,000) | $ 107,062,000 | $ 107,062,000 | $ (107,062,000) | |||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC common units for shares of Class A common stock (in shares) | 9,805,742 | (9,805,742) | ||||||||||||||
ESPP shares issued | 154,000 | 154,000 | (42,000) | 112,000 | ||||||||||||
ESPP shares issued (in shares) | 13,178 | |||||||||||||||
Equity-based compensation | 12,050,000 | 12,050,000 | 3,435,000 | 15,485,000 | ||||||||||||
Issuance of restricted shares | $ 14,000 | 3,653,000 | 3,639,000 | (3,653,000) | ||||||||||||
Issuance of restricted shares (in shares) | 1,417,458 | |||||||||||||||
Exercise of restricted stock units | 4,000 | 4,000 | (4,000) | |||||||||||||
Exercise of restricted stock units (in shares) | 1,250 | |||||||||||||||
Stock options exercised | 84,000 | 84,000 | (54,000) | 30,000 | ||||||||||||
Stock options exercised (in shares) | 5,282 | |||||||||||||||
Repurchase of common stock | $ (23,000) | (21,962,000) | (21,939,000) | 3,362,000 | (18,600,000) | |||||||||||
Repurchase of common stock ( in shares) | (2,288,880) | |||||||||||||||
Restricted shares forfeited | (39,000) | (39,000) | 39,000 | |||||||||||||
Restricted shares forfeited (in shares) | (17,060) | |||||||||||||||
Distributions to noncontrolling interests, net | (404,000) | (404,000) | ||||||||||||||
NCI income tax adjustment | 66,000 | 66,000 | (66,000) | |||||||||||||
Foreign currency translation adjustment | 387,000 | 19,000 | $ 368,000 | 85,000 | 472,000 | |||||||||||
Net (loss) income | 2,784,000 | 2,784,000 | 1,352,000 | 4,136,000 | ||||||||||||
Ending balance at Dec. 31, 2019 | $ 879,000 | $ 162,000 | 937,177,000 | 914,699,000 | 21,437,000 | 175,635,000 | 1,112,812,000 | |||||||||
Ending balance (in shares) at Dec. 31, 2019 | 87,893,525 | 16,221,101 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
ESPP shares issued | $ 15,132 | 83,000 | 83,000 | (7,000) | 76,000 | |||||||||||
Equity-based compensation | 4,856,000 | 4,856,000 | 908,000 | 5,764,000 | ||||||||||||
Issuance of restricted shares | $ 15,000 | 2,422,000 | 2,407,000 | (2,422,000) | ||||||||||||
Issuance of restricted shares (in shares) | 1,477,488 | |||||||||||||||
Exercise of restricted stock units | 1,000 | 1,000 | (1,000) | |||||||||||||
Exercise of restricted stock units (in shares) | 625 | |||||||||||||||
Repurchase of common stock | $ (22,000) | (12,292,000) | (12,270,000) | 1,416,000 | (10,876,000) | |||||||||||
Repurchase of common stock ( in shares) | (2,199,824) | |||||||||||||||
Restricted shares forfeited | $ (4,000) | (548,000) | (544,000) | 548,000 | ||||||||||||
Restricted shares forfeited (in shares) | (374,299) | |||||||||||||||
Distributions to noncontrolling interests, net | (162,000) | (162,000) | ||||||||||||||
NCI income tax adjustment | 46,000 | 46,000 | (46,000) | |||||||||||||
Net (loss) income | (338,684,000) | (338,684,000) | (63,048,000) | (401,732,000) | ||||||||||||
Ending balance at Dec. 31, 2020 | $ 868,000 | $ 162,000 | $ 593,061,000 | $ 909,278,000 | $ (317,247,000) | $ 112,821,000 | $ 705,882,000 | |||||||||
Ending balance (in shares) at Dec. 31, 2020 | 86,812,647 | 16,221,101 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net (loss) income | $ (401,732) | $ 4,136 | $ 54,299 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities | |||
Depreciation and amortization | 101,672 | 120,669 | 133,713 |
Net loss (gain) on disposal of property and equipment | 2,405 | 7,950 | (3,803) |
Bad debt expense | 6,373 | 2,553 | 2,210 |
Amortization of debt issuance costs | 688 | 688 | 688 |
Inventory write-downs | 852 | 250 | 442 |
Equity-based compensation | 5,764 | 15,485 | 10,371 |
Impairment of goodwill and trademark | 276,016 | 4,396 | 17,894 |
Impairment and abandonment of property and equipment | 7,910 | 3,715 | 6,657 |
Impairment of cost-method investment | 2,000 | ||
Loss on divestitures | 410 | 3,676 | |
Unrealized gain on short-term investment | (1,799) | ||
Other operating items, net | (407) | 240 | 1,287 |
Changes in operating assets and liabilities | |||
Accounts receivable | 142,873 | 57,908 | 36,537 |
Prepaid expenses and other assets | 14,886 | 11,321 | (9,115) |
Accounts payable and accrued liabilities | (50,101) | (29,039) | (20,771) |
Net cash provided by operating activities | 105,810 | 203,948 | 232,409 |
Cash flows from investing activities | |||
Working capital settlement | 691 | ||
Proceeds received from divestitures | 197 | 24,872 | |
Purchase of property and equipment | (21,239) | (110,143) | (165,360) |
Investment in note receivable | (3,000) | ||
Distribution from cost method investment | 200 | ||
Acquisitions, net of cash received | (10,000) | (16,999) | |
Proceeds received from sales of property and equipment | 18,449 | 17,223 | 13,998 |
Net cash used in investing activities | (5,393) | (77,357) | (168,361) |
Cash flows from financing activities | |||
Borrowings from revolving line of credit | 5,000 | 60,000 | |
Payments on long-term debt | (50,000) | (90,000) | |
Payments of finance lease obligations | (264) | (883) | (1,881) |
Proceeds from share issuance | 76 | 142 | 762 |
Contributions from (distributions to) noncontrolling interests | 354 | (349) | (506) |
Repurchase of common stock | (10,876) | (18,600) | (16,562) |
Contingent consideration | (1,106) | ||
Net cash used in financing activities | (10,710) | (64,690) | (49,293) |
Effect of exchange rate changes on cash | 64 | 130 | (292) |
Net increase in cash and cash equivalents | 89,771 | 62,031 | 14,463 |
Cash and cash equivalents, beginning of period | 79,268 | 17,237 | 2,774 |
Cash and cash equivalents, end of period | 169,039 | 79,268 | 17,237 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 1,838 | 2,716 | 5,243 |
Cash (refunds received) paid for income taxes, net | (174) | 1,793 | (550) |
Supplemental disclosure of noncash operating activities: | |||
Noncash settlement of accounts receivable | 1,578 | ||
Lease liabilities arising from obtaining right-of-use assets | 9,322 | 119,358 | |
Supplemental disclosure of noncash investing activities: | |||
Capital expenditures included in accounts payable and accrued liabilities | 5,733 | $ 10,472 | $ 17,910 |
Noncash proceeds received from sale of interest in a formerly consolidated joint venture | $ 367 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2020 | |
BUSINESS AND BASIS OF PRESENTATION | |
BUSINESS AND BASIS OF PRESENTATION | NOTE 1—BUSINESS AND BASIS OF PRESENTATION Description of the business : Select Energy Services, Inc. (“we,” “Select Inc.” or “the Company”) was incorporated as a Delaware corporation on November 21, 2016. The Company is a holding company whose sole material asset consists of common units (“SES Holdings LLC Units”) in SES Holdings, LLC (“SES Holdings”). We are a leading provider of comprehensive water-management and chemical solutions to the oil and gas industry in the United States (“U.S.”). We also develop, manufacture and deliver a full suite of chemical solutions for use in oil and gas well completion and production operations. As a leader in the water solutions industry, we place the utmost importance on safe, environmentally responsible management of oilfield water throughout the lifecycle of a well. Additionally, we believe that responsibly managing water resources through our operations to help conserve and protect the environment in the communities in which we operate is paramount to our continued success. Rockwater Merger: On November 1, 2017, the Company completed a merger with Rockwater (the “Rockwater Merger”). Class A and Class B Common Stock: Exchange rights: Basis of presentation : The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) and pursuant to the rules and regulations of the SEC. The consolidated financial statements include the accounts of the Company and all of its majority-owned or controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. For investments in subsidiaries that are not wholly owned, but where the Company exercises control, the equity held by the minority owners and their portion of net income or loss are reflected as noncontrolling interests. Investments in entities in which the Company exercises significant influence over operating and financial policies are accounted for using the equity method, and investments in entities for which the Company does not have significant control or influence are accounted for using the cost-method or other appropriate basis as applicable. As of December 31, 2020, and 2019, the Company had no equity method investees and one cost-method investee. As of December 31, 2020, the Company also had one investment in notes receivable accounted for using the amortized cost basis and one investment in publicly-traded securities accounted for using the fair value option. The Company’s investments are reviewed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. When circumstances indicate that the fair value of its investment is less than its carrying value and the reduction in value is other than temporary, the reduction in value is recognized in earnings. During the first quarter of 2018, the Company determined that its cost-method investee was no longer fully recoverable and was written down to its then estimated fair value of $0.5 million. The impairment expense of $2.0 million is included in impairment of cost-method investment within the consolidated statements of operations. Segment reporting : The Water Services segment consists of the Company’s services businesses, including water transfer, flowback and well testing, fluids hauling, water containment and water network automation, primarily serving exploration and production (“E&P”) companies. Additionally, this segment includes the operations of our accommodations and rentals business. The Water Infrastructure segment consists of the Company’s infrastructure assets, including operations associated with our water sourcing and pipeline infrastructure, our water recycling solutions and infrastructure, and our produced water gathering systems and saltwater disposal wells, primarily serving E&P companies. The Oilfield Chemicals segment provides technical solutions and expertise related to chemical applications in the oil and gas industry. We also have significant capabilities in supplying logistics for chemical applications. We develop, manufacture and provide a full suite of chemicals used in hydraulic fracturing, stimulation, cementing, production, pipelines and well completions. With our broad chemicals product line, combined with our expertise in oilfield chemicals application, we serve pressure pumpers and major integrated and independent U.S. and international oil and gas producers. We further utilize our chemicals experience and lab testing capabilities to customize water treatment solutions tailored to the customer’s water quality and other fluid system design objectives. The results of service lines divested during 2019, including the operations of our Affirm Oilfield Services, LLC subsidiary (“Affirm”), our sand hauling operations and our Canadian operations, are combined in the “Other” category. Reclassifications : Substantially complete liquidation: |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SIGNIFICANT ACCOUNTING POLICIES Use of estimates : The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, uncollectible accounts receivable, inventory reserve, income taxes, self-insurance liabilities, share-based compensation, contingent liabilities and the incremental borrowing rate for leases. The Company bases its estimates on historical and other pertinent information that are believed to be reasonable under the circumstances. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Cash and cash equivalents : The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts receivable : Accounts receivable are stated at the invoiced amount, or the earned but not yet invoiced amount, net of an allowance for credit losses. Allowance for credit losses: The change in the allowance for credit losses is as follows: For the year ended December 31, 2020 2019 2018 (in thousands) Balance at beginning of year $ 5,773 $ 5,329 $ 2,979 Increase to allowance based on a percent of revenue 1,212 2,641 2,253 Adjustment based on aged receivable analysis 5,161 (88) (43) Charge-offs (3,003) (2,504) (23) Recoveries 14 395 163 Balance at end of year $ 9,157 $ 5,773 $ 5,329 The Company also has a $3.0 million note receivable resulting from an investment in the fourth quarter of 2020, with no allowance for credit losses as of December 31, 2020. See Note 14 – Related Party Transactions for additional information. Concentrations of credit and customer risk : Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The amounts held in financial institutions periodically exceed the federally insured limit. Management believes that the financial institutions are financially sound and the risk of loss is minimal. The Company minimizes its exposure to counterparty credit risk by performing credit evaluations and ongoing monitoring of the financial stability of its customers. There were Inventories : The Company values its inventories at lower of cost or net realizable value. Inventory costs are determined under the weighted-average method. Inventory costs primarily consist of chemicals and materials available for resale and parts and consumables used in operations. Property and equipment : Property and equipment are stated at cost less accumulated depreciation. Depreciation (and amortization of finance lease assets) is calculated on a straight-line basis over the estimated useful life of each asset as noted below: Asset Classification Useful Life (years) Land Indefinite Buildings and leasehold improvements 30 or lease term Vehicles and equipment 4 - 7 or lease term Machinery and equipment 2 - 15 Computer equipment and software 3 - 4 or lease term Office furniture and equipment 7 Disposal wells 7 - 10 Depreciation expense related to the Company’s property and equipment, including amortization of property under finance leases, was $90.2 million, $108.7 million and $120.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. Change in depreciable lives of property and equipment: The average estimated useful lives of the assets impacted in the vehicles and equipment category increased from 6.0 The change in the estimated useful lives of fixed assets and change in salvage value estimates was implemented on a prospective basis starting January 1, 2018. Excluding fixed assets attained through mergers and acquisitions during 2017, the impact of the change in useful life estimate of fixed assets purchased on or before December 31, 2017, was to reduce and defer depreciation expense by $12.6 million during the year ended December 31, 2018. Also, the increase in estimated vehicle salvage value produced a permanent depreciation expense reduction of $3.9 million during the year ended December 31, 2018. For the year ended December 31, 2018, the changes in useful life estimate and increased salvage value produced an increase to net income of $10.9 million (including the impact of noncontrolling interests) and increased both basic and diluted earnings per share attributable to our stockholders by $0.15. Business Combinations: Goodwill and other intangible assets : Goodwill represents the excess of the purchase price of acquisitions over the fair value of the net assets acquired. Goodwill and other intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible assets are realized. Impairment of goodwill, long-lived assets and intangible assets : Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. Recoverability is measured by a comparison of its carrying amount to the estimated undiscounted cash flows to be generated by those assets. If the undiscounted cash flows are less than the carrying amount, the Company records impairment losses for the excess of its carrying value over the estimated fair value. The development of future cash flows and the estimate of fair value represent its best estimates based on industry trends and reference to market transactions and are subject to variability. The Company considers the factors within the fair value analysis to be Level 3 inputs within the fair value hierarchy. See Note 4—Impairments and Other Costs for further discussion. The Company conducts its annual goodwill impairment tests in the fourth quarter of each year, and whenever impairment indicators arise, by examining relevant events and circumstances which could have a negative impact on its goodwill such as macroeconomic conditions, industry and market conditions, cost factors that have a negative effect on earnings and cash flows, overall financial performance, acquisitions and divestitures and other relevant entity-specific events. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is required to perform a quantitative impairment test for goodwill comparing the reporting unit’s carrying value to its fair value. The Company’s reporting units are based on its organizational and reporting structure. In determining fair values for the reporting units, the Company relies primarily on the income and market approaches for valuation. In the income approach, the Company discounts predicted future cash flows using a weighted-average cost of capital calculation based on publicly-traded peer companies. In the market approach, valuation multiples are developed from both publicly-traded peer companies as well as other company transactions. The cost approach, when used, considers replacement cost as the primary indicator of value. If the fair value of a reporting unit is less than its carrying value, goodwill impairment is calculated by subtracting the fair value of the reporting unit from the carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, allocation of assets (including goodwill) and liabilities to reporting units and determining the fair value. The determination of reporting unit fair value relies upon certain estimates and assumptions that are complex and are affected by numerous factors, including the general economic environment and levels of exploration and production (“E&P”) activity of oil and gas companies, the Company’s financial performance and trends and the Company’s strategies and business plans, among others. Unanticipated changes, including immaterial revisions, to these assumptions, could result in a provision for impairment in a future period. Given the nature of these evaluations and their application to specific assets and time frames, it is not possible to reasonably quantify the impact of changes in these assumptions. See Note 4—Impairments and Other Costs for further discussion. Asset retirement obligations : The asset retirement obligation (“ARO”) liability reflects the present value of estimated costs of plugging, site reclamation and similar activities associated with the Company’s saltwater disposal wells. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The Company also estimates the productive life of the disposal wells, a credit-adjusted risk-free discount rate and an inflation factor in order to determine the current present value of this obligation. The Company’s ARO liabilities are included in accrued expenses and other current liabilities and other long-term liabilities as of December 31, 2020, and 2019. The change in asset retirement obligations is as follows: For the year ended December 31, 2020 2019 (in thousands) Balance at December 31, 2019 $ 1,527 $ 1,898 Accretion expense, included in depreciation and amortization expense 121 115 Disposals, included in depreciation and amortization expense (272) — Payments (377) (486) Balance at December 31, 2020 $ 999 $ 1,527 In addition to the obligations described above, the Company may be obligated to remove facilities or perform other remediation upon retirement of certain other assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminable. If applicable, the Company will record an asset retirement obligation for these assets in the periods in which settlement dates are reasonably determinable. Self-insurance : The Company self-insures, through deductibles and retentions, up to certain levels for losses related to general liability, workers’ compensation and employer’s liability, vehicle liability, and effective June 1, 2020, health insurance. The Company’s exposure (i.e. the retention or deductible) per occurrence is Defined Contribution Plan : The Company sponsors a defined contribution 401(k) Profit Sharing Plan (the “401(k) Plan”) for the benefit of substantially all employees of the Company. The 401(k) Plan allows eligible employees to make tax-deferred contributions, not to exceed annual limits established by the Internal Revenue Service. The During the year ended December 31, 2020, due to worsening economic conditions, the Company suspended the match to the 401(k) Plan and incurred no match expense in 2020. The Company’s contributions to the 401(k) Plan were $4.2 million and $3.6 million for the years ended December 31, 2019 and 2018, respectively. Payroll Tax Deferral: Revenue recognition : The Company follows ASU 2014-09, Revenue from Contracts with Customers (Topic 606). . Water Services and Water Infrastructure The Company’s agreements with its customers are often referred to as “price sheets” and sometimes provide pricing for multiple services. However, these agreements generally do not authorize the performance of specific services or provide for guaranteed throughput amounts. As customers are free to choose which services, if any, to use based on the Company’s price sheet, the Company prices its separate services on the basis of their standalone selling prices. Customer agreements generally do not provide for performance-, cancellation-, termination-, or refund-type provisions. Services based on price sheets with customers are generally performed under separately-issued “work orders” or “field tickets” as services are requested. Of the Company’s Water Services and Water Infrastructure service lines, only sourcing and transfer of water are consistently provided as part of the same arrangement. In these instances, revenue for both sourcing and transfer are recognized concurrently when delivered. Additionally, asset rentals are recognized on a straight-line basis. Oilfield Chemical Product Sales— Oilfield Chemicals products are generally sold under sales agreements based upon purchase orders or contracts with customers that do not include right of return provisions or other significant post-delivery obligations. The Company’s products are produced in a standard manufacturing operation, even if produced to the customer’s specifications. The prices of products are fixed and determinable and are established in price lists or customer purchase orders. The Company recognizes revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, collectability is reasonably assured and delivery occurs as directed by the customer. Equity-based compensation : The Company accounts for equity-based awards for restricted stock awards, restricted stock units, and stock-settled appreciation awards by measuring the awards at the date of grant and recognizing the grant-date fair value as an expense using either straight-line or accelerated attribution, depending on the specific terms of the award agreements over the requisite service period, which is usually equivalent to the vesting period. The Company expenses awards with graded-vesting service conditions on a straight-line basis and accounts for forfeitures as they occur. The Company accounts for performance share units by remeasuring the awards at the end of each reporting period based on the period-end closing share price, factoring in the percentage expected to vest, Fair value measurements : The Company measures certain assets and liabilities pursuant to accounting guidance, which establishes a three-tier fair value hierarchy and prioritizes the inputs used in measuring fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices or other market data for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 inputs are unobservable inputs based upon the Company’s own judgment and assumptions used to measure assets and liabilities at fair value. See Note 13—Fair Value Measurement for further discussion. Income taxes The Company and its subsidiaries account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. The determination of the provision for income taxes requires significant judgment, use of estimates and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more likely than not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes through the provision for income taxes. The Company recognizes interest and penalties relating to uncertain tax provisions as a component of tax expense. The Company identified no material uncertain tax positions as of December 31, 2020, 2019 and 2018. See Note 15—Income Taxes for further discussion. Recent accounting pronouncements Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2020 | |
ACQUISITIONS AND DIVESTITURES | |
ACQUISITIONS AND DIVESTITURES | NOTE 3—ACQUISITIONS AND DIVESTITURES Business combinations Well Chemical Services Acquisition On September 30, 2019, the Company acquired a well chemical services business (“WCS”), for $10.0 million, funded with cash on hand (the “WCS Acquisition”). WCS provides advanced water treatment solutions, specialized stimulation flow assurance and integrity additives and post-treatment monitoring service in the U.S. This acquisition expanded the Company’s service offerings in oilfield water treatment across the full life-cycle of water, from pre-fracturing treatment through reuse and recycling. The WCS Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. These estimates, judgments and assumptions and valuation of the inventory and property and equipment acquired, customer relationships, and current liabilities were finalized as of December 31, 2019. The assets acquired and liabilities assumed are included in the Company’s Oilfield Chemicals segment. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 10,000 Total consideration transferred 10,000 Less: identifiable assets acquired and liabilities assumed Inventory 5,221 Property and equipment 4,473 Customer relationships 476 Current liabilities (170) Total identifiable net assets acquired 10,000 Fair value allocated to net assets acquired $ 10,000 Pro Well Acquisition On November 20, 2018, the Company acquired Pro Well Testing and Wireline, Inc. (“Pro Well”) with an initial payment of $12.4 million, funded with cash on hand (the “Pro Well Acquisition”). During March 2019, upon final settlement, the purchase price was revised to $11.8 million. This acquisition expanded the Company’s flowback footprint into New Mexico and added new strategic customers. The Pro Well Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. Management estimated that total consideration paid exceeded the fair value of the net assets acquired by $1.1 million, with the excess recorded as goodwill. The goodwill recognized was primarily attributable to expanding the Company’s flowback footprint into New Mexico and adding new strategic customers. The assets acquired, liabilities assumed and the results of operations of the acquired business are included in the Company’s Water Services segment. The goodwill acquired is deductible for tax purposes. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 11,754 Total consideration transferred 11,754 Less: identifiable assets acquired and liabilities assumed Working capital 1,051 Property and equipment 6,588 Customer relationship intangible assets 3,000 Total identifiable net assets acquired 10,639 Goodwill 1,115 Fair value allocated to net assets acquired $ 11,754 Divestitures Affirm and Canadian Operations Divestitures During the year ended December 31, 2019, the Company closed on four sale transactions and wound down the remaining Affirm and Canadian operations. The Company sold property and equipment with a combined net book value of $18.6 million and assigned contracts to the buyers. Additionally, two of the four transactions included the assignment of working capital. The following table summarizes sales details for each of the four transactions: Date of Divestiture Entity Initial Net Proceeds Working Capital True Up Adjusted Net Proceeds Working Capital Status at (Gain)/loss for the year ended December 31, 2019 (in thousands) February 26, 2019 Affirm $ 10,982 $ (208) $ 10,774 Final $ 208 June 28, 2019 Affirm 6,968 — 6,968 Final (1,646) March 19, 2019 Canada 4,975 (302) 4,673 Final 5,013 April 1, 2019 Canada 2,242 — 2,242 Final 101 In connection with the Affirm crane operation divestiture in 2019, no gain or loss was initially recognized and goodwill was reduced by $2.6 million. Additionally, during 2019, the Company recorded an impairment of the remaining Affirm goodwill of $4.4 million (see Note 9—Goodwill and Other Intangible Assets). |
IMPAIRMENTS AND OTHER COSTS
IMPAIRMENTS AND OTHER COSTS | 12 Months Ended |
Dec. 31, 2020 | |
IMPAIRMENTS AND OTHER COSTS | |
IMPAIRMENTS AND OTHER COSTS | NOTE 4—IMPAIRMENTS AND OTHER COSTS Significant challenges that emerged during the year ended December 31, 2020, and that are expected to continue, have had and will likely continue to have a negative impact on our results of operations. The COVID-19 pandemic has caused a worldwide slowdown in economic activity, resulting in a sharp decline in global oil demand and therefore, lower oil and natural gas prices. Global oil demand is expected to remain challenged at least until the COVID-19 pandemic can be contained. In response to lower oil and gas prices, our E&P customers have cut capital spending, resulting in a sharp drop in the number of wells drilled and completed in all of our markets. Reduced demand for our services has had a material, negative impact on our financial results for the year ended December 31, 2020. While oil prices and U.S. unconventional completions activity have partially recovered from the recent lows, given the continued uncertainty around the COVID-19 pandemic and the associated impact on oil demand, we are unable to predict if, when, and by how much the demand for our services and therefore our financial performance will improve. Because the magnitude and duration of the COVID-19 pandemic is unknown, we cannot forecast with reasonable certainty the impact of COVID-19 on our business, financial condition or near or longer-term financial or operational results. During the year ended December 31, 2020, we took actions to protect our balance sheet and maintain our liquidity, including significantly decreasing our operating expenses by reducing headcount, reducing salaries and director compensation, idling facilities, closing yard locations, reducing third-party expenses and streamlining operations, as well as reducing capital expenditures. We also deferred employer payroll tax payments, in accordance with the provisions of the CARES Act, and may take advantage of future legislation passed by the United States Congress in response to the COVID-19 pandemic. As a result of the downturn in our business, we recorded impairment expenses in the first half of 2020 related to goodwill, property and equipment and other intangible assets. A summary of impairments to goodwill and trademark for the years ended December 31, 2020, 2019 and 2018 is as follows: Year ended December 31, 2020 2019 2018 (in thousands) Impairment of goodwill and trademark Water Services $ 186,468 $ — $ — Water Infrastructure 80,466 — — Oilfield Chemicals 9,082 — 12,652 Other — 4,396 5,242 Total impairment of goodwill and trademark $ 276,016 $ 4,396 $ 17,894 For a discussion of the impairments to goodwill and trademark, See Note 9—Goodwill and Other Intangible Assets. A summary of impairments to and abandonment of property and equipment for the years ended December 31, 2020, 2019 and 2018 is as follows: Year ended December 31, 2020 2019 2018 (in thousands) Impairment and abandonment of property and equipment Water Services $ 3,894 $ 969 $ — Water Infrastructure 4,016 1,804 2,282 Other — 942 4,375 Total impairment and abandonment of property and equipment $ 7,910 $ 3,715 $ 6,657 For the year ended December 31, 2020, impairment and abandonment costs of $7.9 million were comprised of leasehold improvements related to abandoned facilities, abandonment of certain saltwater and freshwater wells and obsolete machinery and equipment. For the year ended December 31, 2019, the Company impaired $3.7 million of property and equipment as the carrying values were not deemed recoverable including $1.1 million of pipelines with low utilization, $1.0 million of layflat hose considered obsolete, $0.9 million related to divesting Canadian fixed assets, and $0.6 million related to an owned facility for sale. For the year ended December 31, 2018, the Company determined that long-lived assets with a carrying value of $2.3 million were no longer recoverable and were written down to their estimated fair value of zero . Additionally, the Company determined that $4.4 million of Canadian fixed assets were impaired due to an expectation of a loss on asset disposals. A summary of severance, yard closure, and lease abandonment costs for the years ended December 31, 2020, 2019 and 2018 is as follows: Year ended December 31, 2020 2019 2018 (in thousands) Severance Water Services $ 4,569 $ — $ 538 Water Infrastructure 500 — — Oilfield Chemicals 813 — — Other 1,286 1,691 682 Total severance expense $ 7,168 $ 1,691 $ 1,220 Yard closure costs Water Services $ 2,645 $ — $ — Oilfield Chemicals 316 — — Total yard closure costs $ 2,961 $ — $ — Lease abandonment costs Water Services $ 4,321 $ 1,218 $ 2,150 Water Infrastructure 51 — — Oilfield Chemicals 42 11 28 Other (64) 844 1,747 Total lease abandonment costs $ 4,350 $ 2,073 $ 3,925 During the year ended December 31, 2020, the Company recorded exit-disposal costs including $7.2 million of severance costs, with $0.6 million of accrued severance at December 31, 2020 recorded as accrued salary and benefits on the accompanying consolidated balance sheets, $3.0 million in yard closure costs recognized within costs of revenue on the accompanying consolidated statements of operations with $0.1 million accrued yard closure costs at December 31, 2020, recorded as accrued expenses and other current liabilities on the accompanying balance sheets, and $4.4 million of lease abandonment costs. Severance costs of $4.0 million and $3.2 million are recognized within costs of revenue and selling, general and administrative expenses, respectively, on the accompanying consolidated statements of operations. During the year ended December 31, 2019, the Company recorded exit-disposal costs including $1.7 million of severance costs recognized within selling, general and administrative expenses on the accompanying consolidated statements of operations, and $2.1 million of lease abandonment costs, both of which primarily related to the Company’s divested service lines, the abandonment of two facilities and accretion of expenses for previously abandoned facilities. During the year ended December 31, 2018, the Company recorded exit-disposal costs including $1.2 million of severance costs of which $0.7 million was recognized within selling, general and administrative expenses and $0.5 million was recognized as costs of revenue on the accompanying consolidated statements of operations. The severance costs were associated with the retirement of the Company’s former Chief Administrative Officer as well as the termination of employees assigned to the Company’s divested service lines. Additionally, the Company recorded $3.9 million of lease abandonment costs primarily due to excess facility capacity stemming from the Rockwater Merger and the Company’s divested services lines. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
REVENUE | |
REVENUE | NOTE 5—REVENUE Effective for the year ended December 31, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Leases Topic 606 is that revenue is recognized when goods or services are transferred to customers in an amount that reflects consideration for which entitlement is expected in exchange for those goods or services. ASU 2014-09 provides a five-step model for determining revenue recognition for arrangements that are within the scope of the standard: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that we will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customer. The following factors are applicable to all three of the Company’s segments for the years 2020, 2019 and 2018, respectively: ● The vast majority of customer agreements are short-term, lasting less than one year. ● Contracts are seldom combined together as virtually all of our customer agreements constitute separate performance obligations. Each job is typically distinct, thereby not interdependent or interrelated with other customer agreements. ● Most contracts allow either party to terminate at any time without substantive penalties. If the customer terminates the contract, the Company is unconditionally entitled to the payments for the services rendered and products delivered to date. ● Contract terminations before the end of the agreement are rare. ● Sales returns are rare and no sales return assets have been recognized on the balance sheet. ● There are minimal volume discounts. ● There are no service-type warranties. ● There is no long-term customer financing. In the Water Services and Water Infrastructure segments, performance obligations arise in connection with services provided to customers in accordance with contractual terms, in an amount the Company expects to collect. Services are generally sold based upon customer orders or contracts with customers that include fixed or determinable prices. Revenues are generated by services rendered and measured based on output generated, which is usually simultaneously received and consumed by customers at their job sites. As a multi-job site organization, contract terms, including pricing for the Company’s services, are negotiated on a job site level on a per-job basis. Most jobs are completed in a short period of time, usually between one day and one month. Revenue is recognized as performance obligations are completed on a daily, hourly or per unit basis with unconditional rights to consideration for services rendered reflected as accounts receivable trade, net of allowance for credit losses. In cases where a prepayment is received before the Company satisfies its performance obligations, a contract liability is recorded in accrued expenses and other current liabilities. Final billings generally occur once all of the proper approvals are obtained. No revenue is associated with mobilization or demobilization of personnel and equipment. Rather, mobilization and demobilization are factored into pricing for services. Billings and costs related to mobilization and demobilization is not material for customer agreements that start in one period and end in another. During the year ended December 31, 2020, the Company had five contracts in place for these segments lasting over one year. The Company has recorded an $8.2 million contract liability associated with one of the five long-term contracts as of December 31, 2020, recognized in other long-term liabilities in the accompanying balance sheets. The Company expects this contract liability to be converted to revenue under the terms of the contract as it is earned. In the Oilfield Chemicals segment, the typical performance obligation is to provide a specific quantity of chemicals to customers in accordance with the customer agreement in an amount the Company expects to collect. Products and services are generally sold based upon customer orders or contracts with customers that include fixed or determinable prices. Revenue is recognized as the customer takes title to chemical products in accordance with the agreement. Products may be provided to customers in packaging or delivered to the customers’ containers through a hose. In some cases, the customer takes title to the chemicals upon consumption from storage containers on their property, where the chemicals are considered inventory until customer usage. In cases where the Company delivers products and recognizes revenue before collecting payment, the Company has an unconditional right to payment reflected in accounts receivable trade, net of allowance for credit losses. Customer returns are rare and immaterial, and there were no material in-process customer agreements for this segment as of December 31, 2020 lasting greater than one year. The Company accounts for accommodations and rentals agreements as an operating lease. The Company recognizes revenue from renting equipment on a straight-line basis. Accommodations and rental contract periods are generally daily, weekly or monthly. The average lease term is less than three months and as of December 31, 2020, no rental agreements lasted more than a year. The following table sets forth certain financial information with respect to the Company’s disaggregation of revenues by geographic location: Year ended December 31, 2020 2019 2018 (in thousands) Geographic Region Permian Basin $ 278,439 $ 610,528 $ 606,591 Haynesville/E. Texas 73,116 73,658 59,969 Eagle Ford 69,440 156,621 171,942 MidCon 56,687 176,216 243,524 Marcellus/Utica 54,473 96,454 134,984 Bakken 38,986 92,956 153,212 Rockies 37,517 85,339 111,901 Eliminations and other regions (3,553) (183) 46,807 Total $ 605,105 $ 1,291,589 $ 1,528,930 In the Water Services segment, the top three revenue-producing regions are the Permian Basin, Eagle Ford and Marcellus/Utica, which collectively comprised 71%, 72% and 67% of segment revenue for 2020, 2019 and 2018, respectively. In the Water Infrastructure segment, the top two-revenue producing regions are the Permian Basin and Bakken, which collectively comprised 88%, 84% and 85% of segment revenue for 2020, 2019 and 2018, respectively. In the Oilfield Chemicals segment, the top three revenue-producing regions are the Permian Basin, Haynesville/E. Texas and MidCon, which collectively comprised 87%, 89% and 83% of segment revenue for 2020, 2019 and 2018, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
LEASES | NOTE 6—LEASES As of December 31, 2020, the Company was the lessee for approximately 388 operating leases with durations greater than a year, approximately 14 subleases, approximately two finance leases, and is the lessor for two owned properties. Most of the operating leases either have renewal options of between one or convert to month-to-month agreements at the end of the specified lease term. In addition to normal lease activity, the Affirm and Canadian divestitures occurring during 2019 included the assignment of leases to the buyers. The assigned leases impacted expenses during 2019, but were not included in the December 31, 2019 consolidated balance sheet. The Company’s operating leases are primarily for (i) housing personnel for operations, (ii) operational yards for storing and staging equipment, (iii) equipment used in operations, (iv) facilities used for back-office functions and (v) equipment used for back-office functions. The majority of the Company’s long-term lease expenses are at fixed prices. Primarily due to future uncertainty stemming from the COVID-19 pandemic, certain renewal options were no longer considered reasonably certain of being exercised. This caused a reduction of approximately $5.7 million in right-of-use assets and lease liabilities on the consolidated balance sheets during the second quarter of 2020. Additionally, during the second quarter of 2020, the Company successfully negotiated certain lease payment deferrals as well as lease payment reductions that are being accounted for as modifications, with no impact to straight-line lease expense from lease payment deferrals and a reduction in straight-line rent expense from lease payment reductions. The majority of the Company’s lease expenses are in connection with short-term agreements, including expenses incurred hourly, daily, monthly and for other durations of time of one year or less. Due to the volatility of the price of a barrel of oil and the short term nature of the vast majority of customer agreements, the Company must have flexibility to continuously scale operations at multiple locations. Consequently, the Company avoids committing to long-term agreements with numerous equipment rentals, vehicle fleet agreements and man-camp agreements, unless a business case supports a longer term agreement. Consequently, the Company’s future lease commitments at December 31, 2020 do not reflect all of the Company’s short-term lease commitments. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has a significant number of short-term leases, including month-to-month agreements that continue in perpetuity until the lessor or the Company terminates the lease agreement. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company estimates the incremental borrowing rate based on what it would pay to borrow on a collateralized basis, over a similar term based on information available at lease commencement. The Company’s lease arrangements may contain both lease and non-lease components. The Company has elected to combine and account for lease and non-lease components as a single lease component for its leases. The Company’s variable lease costs are comprised of variable royalties, variable common area maintenance, and variable reimbursement of lessor insurance and property taxes. Variable lease costs were $1.1 million and $1.6 million during the years ended December 31, 2020 and 2019, respectively. $0.8 million of property tax expense is excluded from the lease expense discussed above for both years ended December 31, 2020 and 2019. The lease disclosures in this Note 6—Leases exclude revenue governed by the new lease standard associated with the Company’s accommodations and rentals business, as all customer agreements are short-term. See Note 5—Revenue for a comprehensive discussion on revenue recognition. The financial impact of leases is listed in the tables below: Balance Sheet Classification December 31, 2020 December 31, 2019 (in thousands) Assets Right-of-use assets (1) Long-term right-of-use assets $ 52,331 $ 70,635 Finance lease assets Property and equipment 302 213 Liabilities Operating lease liabilities ― ST Current operating lease liabilities $ 14,019 $ 19,315 Operating lease liabilities ― LT Long-term operating lease liabilities 60,984 72,143 Finance lease liabilities ― ST Current portion of finance lease obligations 307 128 Finance lease liabilities ― LT Other long term liabilities 94 87 (1) Year ended December 31, Statements of Operations and Cash Flows Classification 2020 2019 (in thousands) Operating lease cost: Operating lease cost ― fixed Cost of revenue and Selling, general and administrative $ 19,968 $ 27,856 Lease abandonment costs Lease abandonment costs 4,350 2,073 Short-term agreements: Cost of revenue $ 44,062 $ 93,949 Finance lease cost: Amortization of leased assets Depreciation and amortization $ 314 $ 916 Interest on lease liabilities Interest expense, net 14 32 Lessor income: Sublease income Cost of sales and lease abandonment costs $ 1,463 $ 1,544 Lessor income Cost of sales 350 478 Statement of cash flows Cash paid for operating leases Operating cash flows $ 22,385 $ 30,670 Cash paid for finance leases lease interest Operating cash flows 14 32 Cash paid for finance leases Financing cash flows 264 883 Long Term and Discount Rate As of December 31, 2020 As of December 31, 2019 Weighted-average remaining lease term (years) Operating leases 6.7 7.9 Finance leases 1.3 1.6 Weighted-average discount rate Operating leases 4.7 % 5.3 % Finance leases 3.6 % 5.1 % The Company has the following operating and finance lease commitments as of December 31, 2020: Period Operating Leases (1) Finance Leases Total (in thousands) 2021 $ 17,478 $ 315 $ 17,793 2022 13,956 95 14,051 2023 11,858 — 11,858 2024 11,117 — 11,117 2025 10,376 — 10,376 Thereafter 22,908 — 22,908 Total minimum lease payments $ 87,693 $ 410 $ 88,103 Less reconciling items to reconcile undiscounted cash flows to lease liabilities: Short-term leases excluded from balance sheet 562 — 562 Imputed interest 12,128 9 12,137 Total reconciling items 12,690 9 12,699 Total liabilities per balance sheet $ 75,003 $ 401 $ 75,404 (1) The table above excludes sublease and lessor income of $1.1 million during 2021, $0.8 million during 2022 and $0.3 million during 2023. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
INVENTORIES | |
INVENTORIES | NOTE 7—INVENTORIES Inventories, which are comprised of chemicals and materials available for resale and parts and consumables used in operations, are valued at the lower of cost and net realizable value, with cost determined under the weighted-average method. The significant components of inventory are as follows: As of December 31, 2020 2019 (in thousands) Raw materials $ 16,701 $ 12,365 Finished goods 16,683 24,724 Materials and supplies — 453 Total $ 33,384 $ 37,542 During the years ended December 31, 2020 and 2019, the Company recorded charges to the reserve for excess and obsolete inventory for $0.9 million and $0.3 million, respectively, which were recognized within costs of revenue on the accompanying consolidated statements of operations. The Company’s inventory reserve was $4.1 million as of both December 31, 2020 and 2019. The reserve for excess and obsolete inventories is determined based on the Company’s historical usage of inventory on hand, as well as future expectations, and the amount necessary to reduce the cost of the inventory to its estimated net realizable value. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 8—PROPERTY AND EQUIPMENT Property and equipment consists of the following as of December 31, 2020 and 2019: As of December 31, 2020 2019 (in thousands) Machinery and equipment $ 596,441 $ 659,835 Buildings and leasehold improvements 93,236 97,426 Pipelines 72,458 69,327 Disposal wells 48,097 64,149 Vehicles and equipment 30,975 53,819 Land 13,497 16,030 Computer equipment and software 7,127 8,051 Office furniture and equipment 892 1,157 Machinery and equipment - finance lease 537 162 Vehicles and equipment - finance lease 475 1,291 Computer equipment and software - finance lease 356 356 Other — 497 Construction in progress 14,811 43,279 878,902 1,015,379 Less accumulated depreciation (1) (528,537) (562,986) Property and equipment held-for-sale, net — 885 Total property and equipment, net $ 350,365 $ 453,278 (1) Includes $1.1 million and $1.6 million of accumulated depreciation related to finance leases as of December 31, 2020 and December 31, 2019, respectively. Total depreciation and amortization expense related to property and equipment and finance leases presented in the table above, as well as amortization of intangible assets presented in Note 9—Goodwill and Other Intangible Assets is as follows: Year ended December 31, 2020 2019 2018 (in thousands) Category Depreciation expense from property and equipment $ 89,848 $ 107,738 $ 119,114 Amortization expense from finance leases 314 916 1,314 Amortization expense from intangible assets 11,661 11,900 13,102 Accretion expense from asset retirement obligations (151) 115 183 Total depreciation and amortization $ 101,672 $ 120,669 $ 133,713 Long- lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Note 4 – Impairment and Other Costs for impairment and abandonment of property and equipment during the years ended December 31, 2020, 2019 and 2018. During the year ended December 31, 2020, the Company sold the remaining Canadian assets that were previously designated as held for sale at a loss of $0.1 million recognized within (Losses) gains on sales of property, equipment and divestitures, net on the accompanying consolidated statements of operations. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS. | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 9—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill is evaluated for impairment on at least an annual basis, or more frequently if indicators of impairment exist. The annual impairment tests are based on Level 3 inputs (see Note 13—Fair Value Measurement). During the first quarter of 2020, the Company had triggering events related to the significant adverse change to the demand for the Company’s services in connection with a significant decline in the price of oil and the related global economic impacts resulting from the OPEC+ disputes as well as the COVID-19 pandemic. This included uncertainty regarding oil prices and the length of the recovery following the significant market disruption in the oil and gas industry. Given the volatile market environment at March 31, 2020, the Company utilized third-party valuation advisors to assist with these evaluations. These evaluations included significant judgment, including management’s short-term and long-term forecast of operating performance, discount rates based on our weighted-average cost of capital, revenue growth rates, profitability margins, capital expenditures, the timing of future cash flows based on an eventual recovery of the oil and gas industry, and in the case of long-lived assets, the remaining useful life and service potential of the asset. The Company performed quantitative tests for reporting units in both the Water Services and Water Infrastructure segments using the income and market approaches, resulting in a full impairment to goodwill in both segments. During 2019, the Affirm goodwill was reduced to zero from the crane divestiture and impairment. The $4.4 million of goodwill impairment was based on the expected proceeds from selling and winding down the rest of the Affirm business following the Affirm crane business divestiture. Also, in connection with the Company’s segment realignment, the Company reallocated goodwill from one reporting unit in the 2018 Water Solutions segment to reporting units in the 2019 Water Services and Water Infrastructure segments using the reporting units’ relative fair values as of March 31, 2019. The changes in the carrying amounts of goodwill by reportable segment for the years ended December 31, 2020, and 2019 are as follows: Water Wellsite Water Water Solutions Services Services Infrastructure Other Total (in thousands) Balance as of December 31, 2018 $ 266,801 $ 7,000 $ — $ — $ — $ 273,801 Resegmentation (266,801) (7,000) 186,335 80,466 7,000 — Measurement period adjustment (1) — — 133 — — 133 Affirm crane business divestiture — — — — (2,604) (2,604) Affirm impairment — — — — (4,396) (4,396) Balance as of December 31, 2019 — — 186,468 80,466 — 266,934 Impairment (186,468) (80,466) (266,934) Balance as of December 31, 2020 $ — $ — $ — $ — $ — $ — (1) See Note 3―Acquisitions and Divestitures for additional information. The components of other intangible assets as of December 31, 2020 and 2019 are as follows: As of December 31, 2020 As of December 31, 2019 Gross Accumulated Net Gross Accumulated Net Value Impairment Amortization Value Value Amortization Value (in thousands) (in thousands) Definite-lived Customer relationships $ 116,554 $ — $ (29,302) $ 87,252 $ 116,554 $ (20,233) $ 96,321 Patents 9,741 — (3,166) 6,575 10,110 (2,420) 7,690 Other 7,234 — (6,373) 861 7,234 (4,766) 2,468 Total definite-lived 133,529 — (38,841) 94,688 133,898 (27,419) 106,479 Indefinite-lived Water rights 7,031 — — 7,031 7,031 — 7,031 Trademarks 23,442 (9,082) — 14,360 23,442 — 23,442 Total indefinite-lived 30,473 (9,082) — 21,391 30,473 — 30,473 Total other intangible assets, net $ 164,002 $ (9,082) $ (38,841) $ 116,079 $ 164,371 $ (27,419) $ 136,952 Due to the triggering events discussed above, the Company also tested all intangible assets for impairment during the first quarter of 2020. These evaluations included significant judgment, including discount rates based on our weighted-average cost of capital and the royalty rate. This resulted in $9.1 million of impairment to trademarks using the relief from royalty method, which was recorded in the Oilfield Chemicals segment. During the year ended December 31, 2020, the Company added no new intangible assets. During the year ended December 31, 2019, the Company added $0.5 million in customer relationships. The weighted-average amortization period for customer relationships, patents and other definite-lived intangible assets as of December 31, 2020 was 9.7 years, 6.8 years and 2.7 years, respectively. The indefinite-lived water trademarks five Amortization expense of $11.7 million, $11.9 million and $13.1 million was recorded for the years ended December 31, 2020, 2019 and 2018, respectively. Annual amortization of intangible assets for the next five years and beyond is as follows: Year Ending December 31, Amount (in thousands) 2021 $ 10,466 2022 10,252 2023 10,180 2024 10,111 2025 9,948 Thereafter 43,731 Total $ 94,688 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
DEBT | |
DEBT | NOTE 10—DEBT Credit facility and revolving line of credit On November 1, 2017, SES Holdings and Select Energy Services, LLC (“Select LLC”) entered into a $300.0 million senior secured revolving credit facility (the “Credit Agreement”), by and among SES Holdings, as parent, Select LLC, as Borrower and certain of SES Holdings’ subsidiaries, as guarantors, each of the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent, issuing lender and swingline lender (the “Administrative Agent”). The Credit Agreement also has a sublimit of $40.0 million for letters of credit and a sublimit of $30.0 million for swingline loans. The maturity date of the Credit Agreement is the earlier of (a) November 1, 2022, and (b) the earlier termination in whole of the Commitments pursuant to Section 2.1(b) of Article VII of the Credit Agreement. The Credit Agreement permits extensions of credit up to the lesser of $300.0 million and a borrowing base that is determined by calculating the amount equal to the sum of (i) 85% of the Eligible Billed Receivables (as defined in the Credit Agreement), plus (ii) 75% of Eligible Unbilled Receivables (as defined in the Credit Agreement), provided that this amount will not equal more than 35% of the borrowing base, plus (iii) the lesser of (A) the product of 70% multiplied by the value of Eligible Inventory (as defined in the Credit Agreement) at such time and (B) the product of 85% multiplied by the Net Recovery Percentage (as defined in the Credit Agreement) identified in the most recent Acceptable Appraisal of Inventory (as defined in the Credit Agreement), multiplied by the value of Eligible Inventory at such time, provided that this amount will not equal more than 30% of the borrowing base, minus (iv) the aggregate amount of Reserves (as defined in the Credit Agreement), if any, established by the Administrative Agent from time to time, including, if any, the amount of the Dilution Reserve (as defined in the Credit Agreement). The borrowing base is calculated on a monthly basis pursuant to a borrowing base certificate delivered by Select LLC to the Administrative Agent. Borrowings under the Credit Agreement bear interest, at Select LLC’s election, at either the (a) one-, two-, three- or six-month LIBOR (“Eurocurrency Rate”) or (b) the greatest of (i) the federal funds rate plus 0.5%, (ii) the one-month Eurocurrency Rate plus 1% and (iii) the Administrative Agent’s prime rate (the ”Base Rate”), in each case plus an applicable margin. Interest is payable monthly in arrears. The applicable margin for Eurocurrency Rate loans ranges from 1.50% to 2.00% and the applicable margin for Base Rate loans ranges from 0.50% to 1.00%, in each case, depending on Select LLC’s average excess availability under the Credit Agreement. During the continuance of a bankruptcy event of default, automatically and during the continuance of any other default, upon the Administrative Agent’s or the required lenders’ election, all outstanding amounts under the Credit Agreement will bear interest at 2.00% plus the otherwise applicable interest rate. Level Average Excess Availability Base Rate Margin Eurocurrency Rate Margin I < 33% of the commitments 1.00% 2.00% II < 66.67% of the commitments and ≥ 33.33% of the commitments 0.75% 1.75% III ≥ 66.67% of the commitments 0.50% 1.50% Level Average Revolver Usage Unused Line Fee Percentage I ≥ 50% of the commitments 0.250% II < 50% of the commitments 0.375% The obligations under the Credit Agreement are guaranteed by SES Holdings and certain subsidiaries of SES Holdings and Select LLC and secured by a security interest in substantially all of the personal property assets of SES Holdings, Select LLC and their domestic subsidiaries. The Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the Credit Agreement to be immediately due and payable. In addition, the Credit Agreement restricts SES Holdings’ and Select LLC’s ability to make distributions on, or redeem or repurchase, its equity interests, except for certain distributions, including distributions of cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under the Credit Agreement and either (a) excess availability at all times during the preceding 30 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 25% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $37.5 million or (b) if SES Holdings’ fixed charge coverage ratio is at least 1.0 to 1.0 on a pro forma basis, and excess availability at all times during the preceding 30 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 20% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $30.0 million. Additionally, the Credit Agreement generally permits Select LLC to make distributions to allow Select Inc. to make payments required under the existing Tax Receivable Agreements. See Note 14—Related Party Transactions for further discussion of the Tax Receivable Agreements. The Credit Agreement also requires SES Holdings to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 at any time availability under the Credit Agreement is less than the greater of (i) 10% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (ii) $15.0 million and continuing through and including the first day after such time that availability under the Credit Agreement has equaled or exceeded the greater of (i) 10% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (ii) $15.0 million for 60 consecutive calendar days. Certain lenders party to the Credit Agreement and their respective affiliates have from time to time performed, and may in the future perform, various financial advisory, commercial banking and investment banking services for the Company and its affiliates in the ordinary course of business for which they have received and would receive customary compensation. In addition, in the ordinary course of their various business activities, such parties and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investments and securities activities may involve the Company’s securities and/or instruments. The Company had no borrowings outstanding under the Credit Agreement as of December 31, 2020 and 2019. As of December 31, 2020 and 2019, the borrowing base under the Credit Agreement was $96.4 million and $214.6 million, respectively. The significant reduction in our borrowing base since December 31, 2019 was driven primarily by the meaningful reductions during the year ended December 31, 2020 in our accounts receivable, which represent the primary collateral for the borrowing base. The borrowing capacity under the Credit Agreement was reduced by outstanding letters of credit of $15.6 million and $19.9 million as of December 31, 2020 and 2019, respectively. The Company’s letters of credit have a variable interest rate between 1.50% and 2.00% based on the Company’s average excess availability as outlined above. The unused portion of the available borrowings under the Credit Agreement was $80.8 million at December 31, 2020. Debt issuance costs are amortized to interest expense over the life of the debt to which they pertain. Total unamortized debt issuance costs as of December 31, 2020 and 2019 were $1.3 million and $2.0 million, respectively. As the debt issuance costs relate to a revolving line of credit, they are presented as a deferred charge within other long-term assets on the consolidated balance sheet. Amortization expense related to debt issuance costs were $0.7 million, $0.7 million and $0.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company was in compliance with all debt covenants as of and throughout the year ended December 31, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 11—COMMITMENTS AND CONTINGENCIES Litigation The Company is subject to a number of lawsuits and claims arising out of the normal conduct of its business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. Based on a consideration of all relevant facts and circumstances, including applicable insurance coverage, it is not expected that the ultimate outcome of any currently pending lawsuits or claims against the Company will have a material adverse effect on its consolidated financial position, results of operations or cash flows; however, there can be no assurance as to the ultimate outcome of these matters. As previously disclosed, certain subsidiaries acquired in the Rockwater Merger are under investigation by the U.S. Attorney's Office for the Middle District of Pennsylvania and the U.S. Environmental Protection Agency. It is alleged that certain employees at some of the facilities altered emissions controls systems on less than 5% of the vehicles in the fleet in violation of the Clean Air Act. The Company is continuing to cooperate with the relevant authorities to resolve the matter, and while at this time no administrative, civil or criminal charges have been brought against the Company, the Company accrued $4.3 million related to the settlement of this investigation and made payments of $1.7 million related to this accrual during 2020. The Company does not believe that the ultimate resolution of this matter will be material to the Company’s financial statements. Self-Insured Reserves We are self-insured up to certain retention limits with respect to workers’ compensation, general liability and vehicle liability matters, and effective June 1, 2020, health insurance. We maintain accruals for self-insurance retentions that we estimate using third-party data and claims history. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
EQUITY-BASED COMPENSATION | |
EQUITY-BASED COMPENSATION | NOTE 12—EQUITY-BASED COMPENSATION The SES Holdings 2011 Equity Incentive Plan, (“2011 Plan”) was approved by the board of managers of SES Holdings in April 2011. In conjunction with the private placement of 16,100,000 shares of the Company’s Class A Common Stock on December 20, 2016 (the “Select 144A Offering”), the Company adopted the Select Energy Services, Inc. 2016 Equity Incentive Plan (as amended, the “2016 Plan”) for employees, consultants and directors of the Company and its affiliates. Options that were outstanding under the 2011 Plan immediately prior to the Select 144A Offering were cancelled in exchange for new options granted under the 2016 Plan. On May 8, 2020, the Company’s stockholders approved an amendment to the 2016 Plan to increase the number of shares of the Company’s Class A common stock that may be issued under the 2016 Plan by 4,000,000 shares and to make certain other administrative changes. Currently, the maximum number of shares reserved for issuance under the 2016 Plan is approximately 13.3 million shares, with approximately 3.8 million shares available to be issued as of December 31, 2020. For all share-based compensation award types, the Company accounts for forfeitures as they occur. Stock option awards Stock options were granted with an exercise price equal to or greater than the fair market value of a share of Class A Common Stock as of the date of grant. The Company utilized the Monte Carlo option pricing model to determine fair value of the options granted during 2018, which incorporates assumptions to value equity-based awards. The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant. The expected life of the options is based on the vesting period and term of the options awarded, which is ten years. The table below presents the assumptions used in determining the fair value of stock options granted during the year ended December 31, 2018. No options were granted during the years ended December 31, 2020 and 2019. The weighted-average grant date fair value of stock options granted was $8.98 for the year ended December 31, 2018. For the year ended December 31, 2018 Underlying equity $ 20.50 Strike price $ 20.50 - 30.75 Dividend yield (%) 0.0 % Risk-free rate (%) 2.3 % Volatility (%) 50.0 % Expected term (years) 10.0 A summary of the Company’s stock option activity and related information as of and for the year ended December 31, 2020 is as follows: For the year ended December 31, 2020 Weighted-average Weighted-average Weighted-average Grant Date Value Aggregate Intrinsic Stock Options Grant Date Value Exercise Price Term (Years) Value (in thousands) (a) Beginning balance, outstanding 3,797,319 $ 8.19 $ 15.95 4.2 $ 509 Forfeited (22,437) 8.42 18.52 Expired (255,723) 2.81 13.47 Ending balance, outstanding 3,519,159 $ 8.58 $ 16.11 3.3 $ — Ending balance, exercisable 3,515,784 $ 8.58 $ 16.11 3.3 $ — Nonvested at December 31, 2020 3,375 N/A $ 22.22 (a) as of December 31, 2020 and 2019, respectively. The Company recognized $0.2 million, $4.3 million and $5.2 million of compensation expense related to stock options during the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, there was a nominal amount of unrecognized equity-based compensation expense related to nonvested stock options that is expected to be recognized during the first quarter of 2021. Restricted Stock Awards and Restricted Stock Units The value of the restricted stock awards and restricted stock units granted was established by the market price of the Class A Common Stock on the date of grant and is recorded as compensation expense ratably over the vesting term, which is generally one compensation expense with a weighted-average remaining life of 1.7 years related to unvested restricted stock awards. During 2020 and 2019, the Company paid $1.5 million and $1.0 million, respectively, to repurchase shares in connection with employee minimum tax withholding obligation on vested shares. No restricted stock units were granted during the year ended December 31, 2020. A summary of the Company’s restricted stock awards activity and related information for the year ended December 31, 2020 is as follows: For the year ended December 31, 2020 Weighted-average Restricted Stock Awards Grant Date Fair Value Nonvested at December 31, 2019 1,518,193 $ 10.08 Granted 1,477,488 5.80 Vested (578,281) 11.79 Forfeited (374,299) 7.43 Repurchased (40,029) 7.81 Nonvested at December 31, 2020 2,003,072 $ 6.97 A summary of the Company’s restricted stock unit activity and related information for the year ended December 31, 2020 is as follows: For the year ended December 31, 2020 Weighted-average Restricted Stock Units Grant Date Fair Value Nonvested at December 31, 2019 1,250 $ 19.00 Vested (625) 20.00 Forfeited (625) 18.00 Nonvested at December 31, 2020 — $ — Performance Share Units During 2018 and 2019, the Company approved grants of performance share units (“PSUs”) that are subject to both performance-based and service-based vesting provisions. The number of shares of Class A Common Stock issued to a recipient upon vesting of the PSU will be calculated based on performance against certain metrics that relate to the Company’s return on asset performance over the January 1, 2018 through December 31, 2020 and January 1, 2019 through December 31, 2021 performance periods, respectively. The target number of shares of Class A Common Stock subject to each PSU granted in 2018 and 2019 is Return on Assets at Performance Period-End Date Percentage of Target PSUs Earned Less than 9.6% 0% 9.6% 50% 12% 100% 14.4% 175% During 2020, the Company approved grants of PSUs that are subject to both performance-based and service-based vesting provisions related to (i) return on asset performance (“ROA”) in comparison to thirteen peer companies and (ii) Adjusted Free Cash Flow (“FCF”) performance percentage. The number of shares of Class A Common Stock issued to a recipient upon vesting of the PSUs will be calculated based on ROA and FCF performance over the period from January 1, 2020 through December 31, 2022. The target number of shares of Class A Common Stock subject to each PSU granted in 2020 is one; however, based on the achievement of performance criteria, the number of shares of Class A Common Stock that may be received in settlement of each PSU can range from zero to 1.75 times the target number. The PSUs become earned at the end of the performance period after the attainment of the performance level has been certified by the compensation committee, which will be no later than June 30, 2023 for the 2020 PSU grants, assuming the minimum performance metrics are achieved. The target PSUs that become earned connected with the ROA in comparison to other companies will be determined based on the Company’s Average Return on Assets (as defined in the applicable PSU agreement) relative to the Average Return on Assets of the peer companies (as defined in the applicable PSU agreement) in accordance with the following table, but only if the Company’s Average Return on Assets is equal to or greater than Ranking Among Peer Group Percentage of Target Amount Earned Outside of Top 10 0% Top 10 50% Top 7 100% Top 3 175% The target PSUs that become earned in connection with the adjusted FCF performance percentage will be determined (as defined in the applicable PSU agreement) in accordance with the following table: Adjusted FCF Performance Percentage Percentage of Target Amount Earned Less than 70% 0% 70% 50% 100% 100% 130% 175% The fair value on the date the PSUs were granted during 2020, 2019 and 2018 was $4.4 million, $7.0 million and $5.9 million, respectively. Compensation expense related to the PSUs is determined by multiplying the number of shares of Class A Common Stock underlying such awards that, based on the Company’s estimate, are probable to vest by the measurement-date (i.e., the last day of each reporting period date) fair value and recognized using the accelerated attribution method. During the year ended December 31, 2020, the Company revised the estimates for the PSUs granted in 2018 and 2019 and expect 0% to vest. The Company recognized a reduction to compensation expense of $1.7 million, compensation expense of $2.1 million and compensation expense of $0.5 million related to the PSUs for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, the unrecognized compensation cost related to our unvested PSUs is estimated to be $2.2 million and is expected to be recognized over a weighted-average period of 2.0 years. However, this compensation cost will be adjusted as appropriate throughout the applicable performance periods. The following table summarizes the information about the performance share units outstanding at December 31, 2020: Performance Share Units Nonvested as of December 31, 2019 1,014,990 Target shares granted 753,378 Target shares forfeited (4,459) Target shares outstanding as of December 31, 2020 1,763,909 Stock-Settled Incentive Awards Effective May 17, 2018, the Company approved grants of stock-settled incentive awards to certain key employees under the 2016 Plan that were subject to both market-based and service-based vesting provisions. These awards vested after a two-year service period and, if earned, would have been settled in shares of Class A Common Stock. The ultimate amount earned was based on the achievement of the market metrics, which was based on the stock price of the Class A Common Stock at the vesting date, for which payout could have ranged from 0% to 200%. Any award not earned on the vesting date was forfeited. The target amount that became earned during the performance period was determined in accordance with the following table: Stock Price at Vesting Date (1) Percentage of Target Amount Earned Less than $20.00 0% At least $20.00, but less than $25.00 100% $25.00 or greater 200% (1) The stock price at vesting date equals the greater of (i) the fair market value of a share of the Class A Common Stock on the vesting date, or (ii) the volume weighted-average closing price of a share of the Class A Common Stock, as reported on the NYSE, for the 30 trading days preceding the vesting date. The target amount of stock-settled incentive awards granted was $3.9 million. However, the ultimate settlement of the awards was in shares of Class A Common Stock with a fair market value equal to the earned amount, which could have ranged from 0% to 200% of the target amount depending on the stock price at vesting date. The earned amount was 0% and no shares of Class A Common Stock were issued. The Company recognized $0.1 million, $0.5 million and $0.4 million of compensation expense related to the stock-settled incentive awards during the years ended December 31, 2020, 2019 and 2018, respectively. The following table summarizes the information about the stock-settled incentive awards as of May 17, 2020, the date at which the awards expired: Award Value Value at Target Being Recognized (in thousands) Nonvested as of December 31, 2019 $ 2,937 $ 1,122 Forfeited during 2020 (410) (157) Awards earned and forfeited as market condition not satisfied as of vesting date (2,527) — Cumulative expense recognized $ — $ 965 Employee Stock Purchase Plan (ESPP) The Company maintains the Employee Stock Purchase Plan (the “ESPP”) under which employees that have been continuously employed for at least one year may purchase shares of Class A Common Stock at a discount. The ESPP provides for four The following table summarizes ESPP activity (in thousands, except shares): For the year ended December 31, 2020 Cash received for shares issued $ 76 Shares issued 15,132 Share-repurchases During the years ended December 31, 2020 and 2019, the Company repurchased 1,989,440 and 2,180,806 shares, respectively, of Class A Common Stock in the open market and repurchased 210,384 and 108,074 shares, respectively, of Class A Common Stock in connection with employee minimum tax withholding requirements for units vested under the 2016 Plan. All repurchased shares were retired. During the year ended December 31, 2020, the repurchases were accounted for as a decrease to paid in-capital of $12.3 million and a decrease to Class A common stock of approximately $22,000. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | NOTE 13—FAIR VALUE MEASUREMENT The Company utilizes fair value measurements to measure assets and liabilities in a business combination or assess impairment and abandonment of property and equipment, intangible assets and goodwill. Fair value is defined as the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in an orderly transaction between market participants at the measurement date. Further, ASC 820, Fair Value Measurements ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows: Level 1 Level 2 Level 3 A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers into, or out of, the three levels of the fair value hierarchy for the years ended December 31, 2020, 2019 and 2018. Assets and liabilities measured at fair value on a recurring and non-recurring basis Nonfinancial assets and liabilities measured at fair value on a non-recurring basis include certain nonfinancial assets and liabilities as may be acquired in a business combination and measurements of goodwill and intangible impairment. As there is no corroborating market activity to support the assumptions used, the Company has designated these measurements as Level 3. Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. The development of future cash flows and the estimate of fair value represent the Company’s best estimates based on industry trends and reference to market transactions and are subject to variability. The Company’s estimates of fair value have been determined at discrete points in time based on relevant information. These estimates involve uncertainty and cannot be determined with precision. There were no significant changes in valuation techniques or related inputs for the years ended December 31, 2020, 2019 and 2018. The following table presents information about the Company’s assets measured at fair value on a recurring and non-recurring basis for the years ended December 31, 2020, 2019 and 2018. Fair Value Measurements Using Carrying Frequency Measurement Date Level 1 Level 2 Level 3 Value (1) Impairment (in thousands) Year Ended December 31, 2020 Goodwill Non-recurring March 31 $ — $ — $ — $ 266,934 $ 266,934 Trademark Non-recurring March 31 — — 14,360 23,442 9,082 Property and equipment Non-recurring March 31 — — 176 3,360 3,184 Property and equipment Non-recurring June 30 — — — 4,726 4,726 Investments Recurring September 30 — 1,768 — 1,768 — Investments Recurring December 31 3,377 — — 3,377 — Year Ended December 31, 2019 Goodwill Non-recurring March 31 $ — $ — $ — $ 4,396 $ 4,396 Property and equipment Non-recurring March 31 — — 2,346 2,865 519 Property and equipment Non-recurring June 30 — — 2,386 2,760 374 Property and equipment Non-recurring September 30 — — 38 87 49 Property and equipment Non-recurring December 31 — — 2,555 5,328 2,773 Year Ended December 31, 2018 Cost-Method Investment Non-recurring March 31 $ — $ — $ 500 $ 2,500 $ 2,000 Property and equipment Non-recurring June 30 — — — 2,282 2,282 Property and equipment Non-recurring December 31 — — 10,262 14,637 4,375 Goodwill Non-recurring December 31 — — 7,000 24,894 17,894 (1) Amount represents carrying value at the date of assessment. Other fair value considerations See Note 4—Impairments and Other Costs for a discussion of impairment reflected above incurred during the years ended December 31, 2020, 2019 and 2018, respectively. Also, see Note 3—Acquisitions and Divestitures for a discussion of the fair value incorporated into the purchase price allocation for the WCS and Pro Well acquisitions occurring during the years ended December 31, 2019 and December 31, 2018, respectively. The carrying values of the Company’s current financial instruments, which include cash and cash equivalents, accounts receivable trade and accounts payable, approximate their fair value at December 31, 2020 and 2019 due to the short-term maturity of these instruments. The Company did not have any bank debt as of December 31, 2020 or 2019. The estimated fair values of the Company’s financial instruments are not necessarily indicative of the amounts that would be realized in a current market exchange. Nonmonetary transaction |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 14—RELATED PARTY TRANSACTIONS The Company considers its related parties to be those stockholders who are beneficial owners of more than 5.0% of its common stock, executive officers, members of its board of directors or immediate family members of any of the foregoing persons, an investment in a company that is significantly influenced by a related party, and an unconsolidated joint venture. The Company has entered into a number of transactions with related parties. In accordance with the Company’s related persons transactions policy, the audit committee of the Company’s board of directors regularly reviews these transactions. However, the Company’s results of operations may have been different if these transactions were conducted with non-related parties. During the year ended December 31, 2020, sales to related parties were $3.9 million and purchases from related party vendors were $7.3 million. These purchases consisted of $6.3 million relating to the rental of certain equipment or other services used in operations, $0.5 million relating to purchases of property and equipment, $0.4 million relating to management, consulting and other services and $0.1 million relating to inventory and consumables. Additionally, the Company invested $3.0 million in a note receivable with an affiliate through common ownership for which the balance is included in other long-term assets, net on the consolidated balance sheets. During the year ended December 31, 2019, sales to related parties were $16.8 million and purchases from related party vendors were $18.8 million. These purchases consisted of $14.3 million relating to the rental of certain equipment or other services used in operations, $3.0 million relating to purchases of property and equipment, $1.3 million relating to management, consulting and other services and $0.2 million relating to inventory and consumables. During the year ended December 31, 2018, sales to related parties were $8.3 million and purchases from related party vendors were $16.7 million. These purchases consisted of $10.3 million relating to the rental of certain equipment or other services used in operations, $4.7 million relating to purchases of property and equipment, $1.4 million relating to management, consulting and other services and $0.3 million relating to inventory and consumables. Tax Receivable Agreements In connection with the Select 144A Offering, the Company entered into the Tax Receivable Agreements with the TRA Holders. The first of the Tax Receivable Agreements, which the Company entered into with Legacy Owner Holdco and Crestview Partners II GP, L.P. (“Crestview GP”), generally provides for the payment by the Company to such TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that the Company actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the Select 144A Offering as a result of, as applicable to each such TRA Holder, (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s SES Holdings LLC Units in connection with the Select 144A Offering or pursuant to the exercise of the Exchange Right or the Company’s Call Right and (ii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under such Tax Receivable Agreement. The second of the Tax Receivable Agreements, which the Company entered into with an affiliate of certain Legacy Owners and Crestview GP, generally provides for the payment by the Company to such TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that the Company actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the Select 144A Offering as a result of, as applicable to each such TRA Holder, (i) any net operating losses available to the Company as a result of certain reorganization transactions entered into in connection with the Select 144A Offering and (ii) imputed interest deemed to be paid by the Company as a result of any payments the Company makes under such Tax Receivable Agreement. The Company has not recognized a liability associated with the Tax Receivable Agreements as of December 31, 2020, or 2019. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 15—INCOME TAXES Select Inc. is subject to U.S. federal and state income taxes as a corporation. SES Holdings and its subsidiaries, with the exception of certain corporate subsidiaries, are treated as flow-through entities for U.S. federal income tax purposes and as such, are generally not subject to U.S. federal income tax at the entity level. Rather, the tax liability with respect to their taxable income is passed through to their members or partners. Select Inc. recognizes a tax liability on its allocable share of SES Holdings’ taxable income. The Company’s effective tax rates for the years ended December 31, 2020, 2019 and 2018 were 0.4%, 32.0% and 3.0% respectively. The effective tax rates for the years ended December 31, 2020, 2019 and 2018 differ from the statutory rate of 21% for 2020, 2019 and 2018 due to net income allocated to noncontrolling interests, state income taxes and valuation allowances. The components of the federal and state income tax (benefit) expense are summarized as follows: For the year ended December 31, 2020 2019 2018 (in thousands) Current tax (benefit) expense Federal income tax (benefit) expense $ (941) $ 696 $ 1,073 State and local income tax (benefit) expense (439) 1,034 1,077 Total current (benefit) expense (1,380) 1,730 2,150 Deferred tax (benefit) expense Federal income tax (benefit) expense (105) 49 (20) State and local income tax expense (benefit) 9 170 (426) Total deferred (benefit) expense (96) 219 (446) Total income tax (benefit) expense $ (1,476) $ 1,949 $ 1,704 Tax (benefit) expense attributable to controlling interests $ (1,246) $ 1,488 $ 1,425 Tax (benefit) expense attributable to noncontrolling interests (230) 461 279 Total income tax (benefit) expense $ (1,476) $ 1,949 $ 1,704 A reconciliation of the Company’s provision for income taxes as reported and the amount computed by multiplying income before taxes, less noncontrolling interest, by the U.S. federal statutory rate of 21% for 2020, 2019 and 2018: For the year ended December 31, 2020 2019 2018 (in thousands) Provision calculated at federal statutory income tax rate: (Loss) income before taxes $ (403,208) $ 6,085 $ 56,003 Statutory rate 21 % 21 % 21 % Income tax (benefit) expense computed at statutory rate (84,674) 1,278 11,761 Less: noncontrolling interests 13,272 (284) (3,735) Income tax (benefit) expense attributable to controlling interests (71,402) 994 8,026 State and local income taxes, net of federal benefit (430) 884 515 Change in subsidiary tax status (409) 587 — CARES Act NOL carryback benefit (459) — — Change in valuation allowance 71,454 (1,833) (7,696) Deferred adjustment due to restructuring — 856 — Other — — 580 Income tax (benefit) expense attributable to controlling interests (1,246) 1,488 1,425 Income tax (benefit) expense attributable to noncontrolling interests (230) 461 279 Total income tax (benefit) expense $ (1,476) $ 1,949 $ 1,704 Deferred taxes result from the temporary differences between financial reporting carrying amounts and the tax basis of existing assets and liabilities. As of December 31, 2020, and 2019, the Company had net deferred tax liabilities of $0.2 million and $0.3 million, respectively, which are recorded in other long-term liabilities on the consolidated balance sheets. The principal components of the deferred tax assets (liabilities) are summarized as follows: For the year ended December 31, 2020 2019 (in thousands) Deferred tax assets Outside basis difference in SES Holdings $ 78,918 $ 27,935 Net operating losses 69,601 46,782 Credits and other carryforwards 4,111 1,451 Other 541 944 Total deferred tax assets before valuation allowance 153,171 77,112 Valuation allowance (152,659) (76,883) Total deferred tax assets 512 229 Deferred tax liabilities Property and equipment 718 540 Other 41 32 Total deferred tax liabilities 759 572 Net deferred tax liabilities $ (247) $ (343) For the year ended December 31, 2020, the Company recorded an increase in valuation allowance of $75.8 million against certain deferred tax assets. The Company has assessed the future potential to realize these deferred tax assets and has concluded it is more likely than not that these deferred tax assets will not be realized based on current economic conditions and expectations of the future. Furthermore, the Company has not recorded a liability for the effect of any associated Tax Receivable Agreement liabilities as the liability is based on the actual cash tax savings expected to be realized by the Company, which are not considered probable as of December 31, 2020 or 2019. The Company considers all available evidence (both positive and negative), including continuing periods of income and other tax planning strategies, in determining whether realization of the tax benefit is more likely than not. The Company will continue to monitor facts and circumstances in the reassessment of the likelihood that the tax benefit will be realized. If this were to occur, the valuation allowance, or a portion thereof, would be released. Similarly, the Company considers all available evidence (both positive and negative) in order to determine the probability of a payment under the Tax Receivable Agreements in its assessment of establishing a liability. If determined to be probable, there would be a corresponding charge to Tax Receivable Agreement expense. See Note 14—Related Party Transactions for further discussion of the Tax Receivable Agreements. The U.S. federal income tax legislation enacted in Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. As of December 31, 2018, the Company completed our accounting for the tax effects of the Tax Cuts and Jobs Act (TCJA). During the year ended December 31, 2017, the Company recognized the reasonably estimated (i) effects on our existing deferred tax balances and (ii) one-time transition tax. During the year ended December 31, 2018, the Company finalized the accounting for of the Tax Act and incurred $0.6 million in incremental income tax expense from transitioning to the TCJA. On March 27, 2020, the CARES Act was enacted. The CARES Act includes, among other things, certain income tax provisions for businesses. The Company recognized an income tax benefit of $0.5 million during 2020, as a result of the net operating loss carryback and interest expense limitation provisions of the CARES Act. As of December 31, 2020, the Company and certain corporate subsidiaries of SES Holdings had approximately $291.6 million of U.S. federal net operating loss carryforwards (“NOLs”), of which $133.8 million will begin to expire in 2031 and $157.8 million have no expiration, approximately $128.1 million of state NOLs which will begin to expire in 2023, and approximately $6.5 million of foreign NOLs, which will begin to expire in 2037. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2020 and 2019 there was no material liability or expense for the periods then ended recorded for payments of interest and penalties associated with uncertain tax positions or material unrecognized tax positions. Separate federal and state income tax returns are filed for Select Inc., SES Holdings and certain consolidated affiliates. The tax years 2016 through 2019 remain open to examination by the major taxing jurisdictions to which the Company is subject to income tax. The Louisiana Department of Revenue is currently auditing the corporate income and franchise tax returns of Select Inc. and Select Western, a corporate subsidiary of SES Holdings, for the years ended 2016 through 2018. The Company does not believe that the audits will result in a material tax assessment. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2020 | |
NONCONTROLLING INTERESTS | |
NONCONTROLLING INTERESTS | NOTE 16—NONCONTROLLING INTERESTS The Company’s noncontrolling interests fall into two categories as follows: ● Noncontrolling interests attributable to joint ventures formed for water-related services. ● Noncontrolling interests attributable to holders of Class B Common Stock. As of December 31 2020 2019 (in thousands) Noncontrolling interests attributable to joint ventures formed for water-related services $ 2,002 $ 2,674 Noncontrolling interests attributable to holders of Class B Common Stock 110,819 172,961 Total noncontrolling interests $ 112,821 $ 175,635 During the years ended December 31, 2020 and 2019, the Company had divestitures of joint ventures that eliminated $0.2 million and $0.4 million of noncontrolling interest in 2020 and 2019, respectively. For all periods presented, there were no other changes to Select’s ownership interest in joint ventures formed for water-related services. However, during the years ended December 31, 2020, 2019 and 2018, there were changes in Select’s ownership interest in SES Holdings LLC. The effects of the changes in Select’s ownership interest in SES Holdings LLC are as follows: For the year ended December 31, 2020 2019 2018 (in thousands) Net (loss) income attributable to Select Energy Services, Inc. $ (338,684) $ 2,784 $ 36,512 Transfers from (to) noncontrolling interests: Increase in additional paid-in capital as a result of stock option exercises — 54 374 Increase in additional paid-in capital as a result of restricted stock issuance, net of forfeitures 1,874 3,614 1,942 Increase in additional paid-in capital as a result of issuance of common stock due to vesting of restricted stock units 1 4 104 Decrease in additional paid-in capital as a result of the repurchase of SES Holdings LLC Units (1,416) (3,362) (576) Increase in additional paid-in capital as a result of exchanges of SES Holdings LLC Units (an equivalent number of shares of Class B Common Stock) for shares of Class A Common Stock — 107,062 146,865 Increase in additional paid-in capital as a result of the Employee Stock Purchase Plan shares issued 7 42 15 Change to equity from net (loss) income attributable to Select Energy Services, Inc. and transfers from noncontrolling interests $ (338,218) $ 110,198 $ 185,236 |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
(LOSS) EARNINGS PER SHARE | |
(LOSS) EARNINGS PER SHARE | NOTE 17— (LOSS) EARNINGS PER SHARE (Loss) earnings per share are based on the amount of (loss) income allocated to the shareholders and the weighted-average number of shares outstanding during the period for each class of common stock. Outstanding options to purchase 3,519,159 and 2,961,439 shares are not included in the calculation of diluted weighted-average shares outstanding for the year ended December 31, 2020 and 2019 respectively, as the effect is antidilutive. The following tables present the Company’s calculation of basic and diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 (dollars in thousands, except share and per share amounts): Year ended December 31, 2020 Select Energy Services, Inc. Class A Class B Numerator: Net loss $ (401,732) Net loss attributable to noncontrolling interests 63,048 Net loss income attributable to Select Energy Services, Inc. — basic $ (338,684) $ (338,684) $ — Net loss income attributable to Select Energy Services, Inc. — diluted $ (338,684) $ (338,684) $ — Denominator: Weighted-average shares of common stock outstanding — basic 85,158,764 16,221,101 Weighted-average shares of common stock outstanding — diluted 85,158,764 16,221,101 Loss per share: Basic $ (3.98) $ — Diluted $ (3.98) $ — Year ended December 31, 2019 Select Energy Services, Inc. Class A Class B Numerator: Net income $ 4,136 Net income attributable to noncontrolling interests (1,352) Net income attributable to Select Energy Services, Inc. — basic $ 2,784 $ 2,784 $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 7 7 — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units 2 2 Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 1 1 — Net loss attributable to Select Energy Services, Inc. — diluted $ 2,794 $ 2,794 $ — Denominator: Weighted-average shares of common stock outstanding — basic 80,176,323 23,806,646 Dilutive effect of restricted stock 373,366 — Dilutive effect of performance share units 80,979 Dilutive effect of stock options 40,215 — Dilutive effect of ESPP 446 — Weighted-average shares of common stock outstanding — diluted 80,671,329 23,806,646 Earnings per share: Basic $ 0.03 $ — Diluted $ 0.03 $ — Year ended December 31, 2018 Select Energy Services, Inc. Class A Class A-2 Class B Numerator: Net loss $ 54,299 Net loss attributable to noncontrolling interests (17,787) Net loss attributable to Select Energy Services, Inc. — basic $ 36,512 $ 35,720 $ 792 $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 13 13 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 30 30 — — Net loss attributable to Select Energy Services, Inc. — diluted $ 36,555 $ 35,763 $ 792 $ — Denominator: Weighted-average shares of common stock outstanding — basic 72,403,318 1,604,575 31,986,438 Dilutive effect of restricted stock 71,718 — — Dilutive effect of stock options 166,999 — — Dilutive effect of ESPP 112 — — Weighted-average shares of common stock outstanding — diluted 72,642,147 1,604,575 31,986,438 Loss per share: Basic $ 0.49 $ 0.49 $ — Diluted $ 0.49 $ 0.49 $ — |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 18—SEGMENT INFORMATION Select Inc. is a leading provider of comprehensive water-management and chemical solutions to the oil and gas industry in the U.S. The Company’s services are offered through three reportable segments. Reportable segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the CODM in deciding how to allocate resources and assess performance. The Company’s CODM assesses performance and allocates resources on the basis of the three reportable segments. Corporate and other expenses that do not individually meet the criteria for segment reporting are reported separately as Corporate or Other. The Company’s CODM assesses performance and allocates resources on the basis of the following Water Services Water Infrastructure Oilfield Chemicals Financial information by segment for the years ended December 31, 2020, 2019 and 2018 is as follows: For the year ended December 31, 2020 Loss Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 322,461 $ (250,779) $ 61,758 $ 2,161 Water Infrastructure 125,710 (96,290) 27,599 6,852 Oilfield Chemicals 160,825 (13,365) 9,443 7,157 Other — (733) — 330 Eliminations (3,891) — — — Loss from operations (361,167) Corporate — (33,610) 2,872 — Interest expense, net — (2,136) — — Other expense, net — (6,295) — — $ 605,105 $ (403,208) $ 101,672 $ 16,500 For the year ended December 31, 2019 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 773,946 $ 51,185 $ 80,664 $ 37,692 Water Infrastructure 221,661 15,103 25,665 53,839 Oilfield Chemicals 268,963 17,942 8,766 11,110 Other 33,365 (8,066) 1,714 64 Eliminations (6,346) — — — Income from operations 76,164 Corporate — (53,090) 3,860 — Interest expense, net — (2,688) — — Other expense, net — (14,301) — — $ 1,291,589 $ 6,085 $ 120,669 $ 102,705 For the year ended December 31, 2018 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 897,160 $ 89,826 $ 82,875 $ 120,883 Water Infrastructure 230,130 31,579 23,042 33,372 Oilfield Chemicals 260,281 (7,107) 10,496 10,832 Other 144,499 (14,021) 14,124 7,045 Eliminations (3,140) — — — Income from operations 100,277 Corporate — (38,603) 3,176 — Interest expense, net — (5,311) — — Other expense, net — (360) — — $ 1,528,930 $ 56,003 $ 133,713 $ 172,132 Total assets by segment as of December 31, 2020 and 2019 is as follows: As of December 31, 2020 2019 (in thousands) Water Services $ 515,856 $ 831,123 Water Infrastructure 204,995 314,026 Oilfield Chemicals 147,612 192,224 Other 6,896 10,247 $ 875,359 $ 1,347,620 Revenue by groups of similar products and services are as follows: For the year ended December 31, 2020 2019 2018 (in thousands) Oilfield chemicals $ 160,825 $ 268,963 $ 260,281 Water transfer 146,728 355,535 443,650 Pipeline logistics and disposal 91,971 101,145 100,172 Accommodations and rentals (1) 62,593 150,793 153,013 Flowback and well testing 61,839 208,572 223,828 Fluid hauling 52,748 63,156 79,568 Water sourcing 33,739 120,517 129,958 Eliminations and other service lines (5,338) 22,908 138,460 $ 605,105 $ 1,291,589 $ 1,528,930 (1) During 2020, 2019 and 2018, approximately $28.4 million, $69.0 million and $67.2 million of accommodations and rentals revenue was accounted for under ASC 842 lease guidance, with the remainder accounted for under ASC 606 revenue guidance. In connection with the Rockwater Merger in November 2017, the Company expanded into Canada and during 2019, the Company divested and wound down Canadian operations. The Company attributed revenue to the U.S. and Canada based on the location where services were performed or the destination of the products or equipment sold or rented. Long-lived assets consisted of property and equipment and are attributed to the U.S. and Canada based on the physical location of the asset at the end of the period. The Company’s revenue attributed to the U.S. was $605.1 million or 100.0%, $1,283.4 million or 99.4% and $1,480.4 million or 96.8% of total revenue during the years ended December 31, 2020, 2019 and 2018, respectively. The Company’s revenue attributed to Canada was zero, $8.2 million or 0.6% and $48.6 million or 3.2% of total revenue during the years ended December 31, 2020, 2019 and 2018, respectively. The Company’s net long-lived assets attributed to the U.S. was $350.4 million or 100.0%, $452.4 million or 99.8% and $492.4 million or 97.9% of total net long-lived assets as of December 31, 2020, December 31, 2019 and December 31, 2018, respectively. The Company’s net long-lived assets attributed to Canada was zero, $0.9 million or 0.2% and $10.5 million or 2.1% of total net long-lived assets as of December 31, 2020, December 31, 2019 and December 31, 2018, respectively. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | NOTE 19—QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) 2020 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 278,285 $ 92,239 $ 101,242 $ 133,339 Gross profit (loss) 15,296 (23,719) (16,900) (3,942) Loss from operations (290,831) (47,805) (34,212) (21,929) Net loss (291,220) (53,044) (36,260) (21,208) Net loss attributable to Select Energy Services, Inc. (245,862) (44,298) (30,541) (17,983) Net loss per share attributable to common stockholders: Class A-Basic & Diluted $ (2.86) $ (0.52) $ (0.36) $ (0.21) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ — $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — 2019 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 362,646 $ 323,887 $ 328,968 $ 276,088 Gross profit 45,997 39,939 40,994 21,810 Income (loss) from operations 6,633 11,179 12,475 (7,213) Net income (loss) 1,400 8,068 7,172 (12,504) Net income (loss) attributable to Select Energy Services, Inc. 1,135 6,200 5,379 (9,930) Net income (loss) per share attributable to common stockholders: Class A-Basic & Diluted $ 0.01 $ 0.08 $ 0.07 $ (0.12) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ — $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 20—SUBSEQUENT EVENTS On January 3, 2021, John D. Schmitz was appointed as Chief Executive Officer and President of the Company. In connection with such appointments, Mr. Schmitz remained a director and Chairman of the board of directors of the Company. On January 4, 2021, the Company announced that Holli C. Ladhani departed the Company and will no longer serve as the Chief Executive Officer and President of the Company, or a member of the Board, effective January 3, 2021. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Use of estimates | Use of estimates : The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, uncollectible accounts receivable, inventory reserve, income taxes, self-insurance liabilities, share-based compensation, contingent liabilities and the incremental borrowing rate for leases. The Company bases its estimates on historical and other pertinent information that are believed to be reasonable under the circumstances. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. |
Cash and cash equivalents | Cash and cash equivalents : The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts receivable and allowance for credit losses | Accounts receivable : Accounts receivable are stated at the invoiced amount, or the earned but not yet invoiced amount, net of an allowance for credit losses. Allowance for credit losses: The change in the allowance for credit losses is as follows: For the year ended December 31, 2020 2019 2018 (in thousands) Balance at beginning of year $ 5,773 $ 5,329 $ 2,979 Increase to allowance based on a percent of revenue 1,212 2,641 2,253 Adjustment based on aged receivable analysis 5,161 (88) (43) Charge-offs (3,003) (2,504) (23) Recoveries 14 395 163 Balance at end of year $ 9,157 $ 5,773 $ 5,329 |
Concentrations of credit and customer risk | Concentrations of credit and customer risk : Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The amounts held in financial institutions periodically exceed the federally insured limit. Management believes that the financial institutions are financially sound and the risk of loss is minimal. The Company minimizes its exposure to counterparty credit risk by performing credit evaluations and ongoing monitoring of the financial stability of its customers. There were |
Inventories | Inventories : The Company values its inventories at lower of cost or net realizable value. Inventory costs are determined under the weighted-average method. Inventory costs primarily consist of chemicals and materials available for resale and parts and consumables used in operations. |
Property and equipment | Property and equipment : Property and equipment are stated at cost less accumulated depreciation. Depreciation (and amortization of finance lease assets) is calculated on a straight-line basis over the estimated useful life of each asset as noted below: Asset Classification Useful Life (years) Land Indefinite Buildings and leasehold improvements 30 or lease term Vehicles and equipment 4 - 7 or lease term Machinery and equipment 2 - 15 Computer equipment and software 3 - 4 or lease term Office furniture and equipment 7 Disposal wells 7 - 10 Depreciation expense related to the Company’s property and equipment, including amortization of property under finance leases, was $90.2 million, $108.7 million and $120.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. Change in depreciable lives of property and equipment: The average estimated useful lives of the assets impacted in the vehicles and equipment category increased from 6.0 The change in the estimated useful lives of fixed assets and change in salvage value estimates was implemented on a prospective basis starting January 1, 2018. Excluding fixed assets attained through mergers and acquisitions during 2017, the impact of the change in useful life estimate of fixed assets purchased on or before December 31, 2017, was to reduce and defer depreciation expense by $12.6 million during the year ended December 31, 2018. Also, the increase in estimated vehicle salvage value produced a permanent depreciation expense reduction of $3.9 million during the year ended December 31, 2018. For the year ended December 31, 2018, the changes in useful life estimate and increased salvage value produced an increase to net income of $10.9 million (including the impact of noncontrolling interests) and increased both basic and diluted earnings per share attributable to our stockholders by $0.15. |
Business combination | Business Combinations: |
Goodwill and other intangible assets | Goodwill and other intangible assets : Goodwill represents the excess of the purchase price of acquisitions over the fair value of the net assets acquired. Goodwill and other intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible assets are realized. |
Impairment of goodwill, long lived assets and intangible assets: | Impairment of goodwill, long-lived assets and intangible assets : Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. Recoverability is measured by a comparison of its carrying amount to the estimated undiscounted cash flows to be generated by those assets. If the undiscounted cash flows are less than the carrying amount, the Company records impairment losses for the excess of its carrying value over the estimated fair value. The development of future cash flows and the estimate of fair value represent its best estimates based on industry trends and reference to market transactions and are subject to variability. The Company considers the factors within the fair value analysis to be Level 3 inputs within the fair value hierarchy. See Note 4—Impairments and Other Costs for further discussion. The Company conducts its annual goodwill impairment tests in the fourth quarter of each year, and whenever impairment indicators arise, by examining relevant events and circumstances which could have a negative impact on its goodwill such as macroeconomic conditions, industry and market conditions, cost factors that have a negative effect on earnings and cash flows, overall financial performance, acquisitions and divestitures and other relevant entity-specific events. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is required to perform a quantitative impairment test for goodwill comparing the reporting unit’s carrying value to its fair value. The Company’s reporting units are based on its organizational and reporting structure. In determining fair values for the reporting units, the Company relies primarily on the income and market approaches for valuation. In the income approach, the Company discounts predicted future cash flows using a weighted-average cost of capital calculation based on publicly-traded peer companies. In the market approach, valuation multiples are developed from both publicly-traded peer companies as well as other company transactions. The cost approach, when used, considers replacement cost as the primary indicator of value. If the fair value of a reporting unit is less than its carrying value, goodwill impairment is calculated by subtracting the fair value of the reporting unit from the carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, allocation of assets (including goodwill) and liabilities to reporting units and determining the fair value. The determination of reporting unit fair value relies upon certain estimates and assumptions that are complex and are affected by numerous factors, including the general economic environment and levels of exploration and production (“E&P”) activity of oil and gas companies, the Company’s financial performance and trends and the Company’s strategies and business plans, among others. Unanticipated changes, including immaterial revisions, to these assumptions, could result in a provision for impairment in a future period. Given the nature of these evaluations and their application to specific assets and time frames, it is not possible to reasonably quantify the impact of changes in these assumptions. See Note 4—Impairments and Other Costs for further discussion. |
Asset retirement obligations | Asset retirement obligations : The asset retirement obligation (“ARO”) liability reflects the present value of estimated costs of plugging, site reclamation and similar activities associated with the Company’s saltwater disposal wells. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The Company also estimates the productive life of the disposal wells, a credit-adjusted risk-free discount rate and an inflation factor in order to determine the current present value of this obligation. The Company’s ARO liabilities are included in accrued expenses and other current liabilities and other long-term liabilities as of December 31, 2020, and 2019. The change in asset retirement obligations is as follows: For the year ended December 31, 2020 2019 (in thousands) Balance at December 31, 2019 $ 1,527 $ 1,898 Accretion expense, included in depreciation and amortization expense 121 115 Disposals, included in depreciation and amortization expense (272) — Payments (377) (486) Balance at December 31, 2020 $ 999 $ 1,527 In addition to the obligations described above, the Company may be obligated to remove facilities or perform other remediation upon retirement of certain other assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminable. If applicable, the Company will record an asset retirement obligation for these assets in the periods in which settlement dates are reasonably determinable. |
Self-insurance | Self-insurance : The Company self-insures, through deductibles and retentions, up to certain levels for losses related to general liability, workers’ compensation and employer’s liability, vehicle liability, and effective June 1, 2020, health insurance. The Company’s exposure (i.e. the retention or deductible) per occurrence is |
Defined contribution plan | Defined Contribution Plan : The Company sponsors a defined contribution 401(k) Profit Sharing Plan (the “401(k) Plan”) for the benefit of substantially all employees of the Company. The 401(k) Plan allows eligible employees to make tax-deferred contributions, not to exceed annual limits established by the Internal Revenue Service. The During the year ended December 31, 2020, due to worsening economic conditions, the Company suspended the match to the 401(k) Plan and incurred no match expense in 2020. The Company’s contributions to the 401(k) Plan were $4.2 million and $3.6 million for the years ended December 31, 2019 and 2018, respectively. |
Payroll Tax Deferral | Payroll Tax Deferral: |
Revenue recognition | Revenue recognition : The Company follows ASU 2014-09, Revenue from Contracts with Customers (Topic 606). . Water Services and Water Infrastructure The Company’s agreements with its customers are often referred to as “price sheets” and sometimes provide pricing for multiple services. However, these agreements generally do not authorize the performance of specific services or provide for guaranteed throughput amounts. As customers are free to choose which services, if any, to use based on the Company’s price sheet, the Company prices its separate services on the basis of their standalone selling prices. Customer agreements generally do not provide for performance-, cancellation-, termination-, or refund-type provisions. Services based on price sheets with customers are generally performed under separately-issued “work orders” or “field tickets” as services are requested. Of the Company’s Water Services and Water Infrastructure service lines, only sourcing and transfer of water are consistently provided as part of the same arrangement. In these instances, revenue for both sourcing and transfer are recognized concurrently when delivered. Additionally, asset rentals are recognized on a straight-line basis. Oilfield Chemical Product Sales— Oilfield Chemicals products are generally sold under sales agreements based upon purchase orders or contracts with customers that do not include right of return provisions or other significant post-delivery obligations. The Company’s products are produced in a standard manufacturing operation, even if produced to the customer’s specifications. The prices of products are fixed and determinable and are established in price lists or customer purchase orders. The Company recognizes revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, collectability is reasonably assured and delivery occurs as directed by the customer. |
Equity-based compensation | Equity-based compensation : The Company accounts for equity-based awards for restricted stock awards, restricted stock units, and stock-settled appreciation awards by measuring the awards at the date of grant and recognizing the grant-date fair value as an expense using either straight-line or accelerated attribution, depending on the specific terms of the award agreements over the requisite service period, which is usually equivalent to the vesting period. The Company expenses awards with graded-vesting service conditions on a straight-line basis and accounts for forfeitures as they occur. The Company accounts for performance share units by remeasuring the awards at the end of each reporting period based on the period-end closing share price, factoring in the percentage expected to vest, |
Fair value measurements | Fair value measurements : The Company measures certain assets and liabilities pursuant to accounting guidance, which establishes a three-tier fair value hierarchy and prioritizes the inputs used in measuring fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices or other market data for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 inputs are unobservable inputs based upon the Company’s own judgment and assumptions used to measure assets and liabilities at fair value. See Note 13—Fair Value Measurement for further discussion. |
Income taxes | Income taxes The Company and its subsidiaries account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. The determination of the provision for income taxes requires significant judgment, use of estimates and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more likely than not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes through the provision for income taxes. The Company recognizes interest and penalties relating to uncertain tax provisions as a component of tax expense. The Company identified no material uncertain tax positions as of December 31, 2020, 2019 and 2018. See Note 15—Income Taxes for further discussion. |
Recent accounting pronouncements | Recent accounting pronouncements Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of change in allowance for doubtful accounts | The change in the allowance for credit losses is as follows: For the year ended December 31, 2020 2019 2018 (in thousands) Balance at beginning of year $ 5,773 $ 5,329 $ 2,979 Increase to allowance based on a percent of revenue 1,212 2,641 2,253 Adjustment based on aged receivable analysis 5,161 (88) (43) Charge-offs (3,003) (2,504) (23) Recoveries 14 395 163 Balance at end of year $ 9,157 $ 5,773 $ 5,329 |
Schedule of estimated useful life of property and equipment | Asset Classification Useful Life (years) Land Indefinite Buildings and leasehold improvements 30 or lease term Vehicles and equipment 4 - 7 or lease term Machinery and equipment 2 - 15 Computer equipment and software 3 - 4 or lease term Office furniture and equipment 7 Disposal wells 7 - 10 |
Summary of change in asset retirement obligations | For the year ended December 31, 2020 2019 (in thousands) Balance at December 31, 2019 $ 1,527 $ 1,898 Accretion expense, included in depreciation and amortization expense 121 115 Disposals, included in depreciation and amortization expense (272) — Payments (377) (486) Balance at December 31, 2020 $ 999 $ 1,527 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of sales details | Date of Divestiture Entity Initial Net Proceeds Working Capital True Up Adjusted Net Proceeds Working Capital Status at (Gain)/loss for the year ended December 31, 2019 (in thousands) February 26, 2019 Affirm $ 10,982 $ (208) $ 10,774 Final $ 208 June 28, 2019 Affirm 6,968 — 6,968 Final (1,646) March 19, 2019 Canada 4,975 (302) 4,673 Final 5,013 April 1, 2019 Canada 2,242 — 2,242 Final 101 |
Well Chemical Services Acquisition | |
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities | Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 10,000 Total consideration transferred 10,000 Less: identifiable assets acquired and liabilities assumed Inventory 5,221 Property and equipment 4,473 Customer relationships 476 Current liabilities (170) Total identifiable net assets acquired 10,000 Fair value allocated to net assets acquired $ 10,000 |
Pro Well Acquisition | |
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities | Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 11,754 Total consideration transferred 11,754 Less: identifiable assets acquired and liabilities assumed Working capital 1,051 Property and equipment 6,588 Customer relationship intangible assets 3,000 Total identifiable net assets acquired 10,639 Goodwill 1,115 Fair value allocated to net assets acquired $ 11,754 |
IMPAIRMENTS AND OTHER COSTS (Ta
IMPAIRMENTS AND OTHER COSTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
IMPAIRMENTS AND OTHER COSTS | |
Schedule of impairment, severance, yard closure and lease abandonment costs | Year ended December 31, 2020 2019 2018 (in thousands) Impairment of goodwill and trademark Water Services $ 186,468 $ — $ — Water Infrastructure 80,466 — — Oilfield Chemicals 9,082 — 12,652 Other — 4,396 5,242 Total impairment of goodwill and trademark $ 276,016 $ 4,396 $ 17,894 For a discussion of the impairments to goodwill and trademark, See Note 9—Goodwill and Other Intangible Assets. A summary of impairments to and abandonment of property and equipment for the years ended December 31, 2020, 2019 and 2018 is as follows: Year ended December 31, 2020 2019 2018 (in thousands) Impairment and abandonment of property and equipment Water Services $ 3,894 $ 969 $ — Water Infrastructure 4,016 1,804 2,282 Other — 942 4,375 Total impairment and abandonment of property and equipment $ 7,910 $ 3,715 $ 6,657 For the year ended December 31, 2020, impairment and abandonment costs of $7.9 million were comprised of leasehold improvements related to abandoned facilities, abandonment of certain saltwater and freshwater wells and obsolete machinery and equipment. For the year ended December 31, 2019, the Company impaired $3.7 million of property and equipment as the carrying values were not deemed recoverable including $1.1 million of pipelines with low utilization, $1.0 million of layflat hose considered obsolete, $0.9 million related to divesting Canadian fixed assets, and $0.6 million related to an owned facility for sale. For the year ended December 31, 2018, the Company determined that long-lived assets with a carrying value of $2.3 million were no longer recoverable and were written down to their estimated fair value of zero . Additionally, the Company determined that $4.4 million of Canadian fixed assets were impaired due to an expectation of a loss on asset disposals. A summary of severance, yard closure, and lease abandonment costs for the years ended December 31, 2020, 2019 and 2018 is as follows: Year ended December 31, 2020 2019 2018 (in thousands) Severance Water Services $ 4,569 $ — $ 538 Water Infrastructure 500 — — Oilfield Chemicals 813 — — Other 1,286 1,691 682 Total severance expense $ 7,168 $ 1,691 $ 1,220 Yard closure costs Water Services $ 2,645 $ — $ — Oilfield Chemicals 316 — — Total yard closure costs $ 2,961 $ — $ — Lease abandonment costs Water Services $ 4,321 $ 1,218 $ 2,150 Water Infrastructure 51 — — Oilfield Chemicals 42 11 28 Other (64) 844 1,747 Total lease abandonment costs $ 4,350 $ 2,073 $ 3,925 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
REVENUE | |
Schedule of disaggregation of revenue by geographic location | Year ended December 31, 2020 2019 2018 (in thousands) Geographic Region Permian Basin $ 278,439 $ 610,528 $ 606,591 Haynesville/E. Texas 73,116 73,658 59,969 Eagle Ford 69,440 156,621 171,942 MidCon 56,687 176,216 243,524 Marcellus/Utica 54,473 96,454 134,984 Bakken 38,986 92,956 153,212 Rockies 37,517 85,339 111,901 Eliminations and other regions (3,553) (183) 46,807 Total $ 605,105 $ 1,291,589 $ 1,528,930 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
LEASES | |
Schedule of financial impact of leases | Balance Sheet Classification December 31, 2020 December 31, 2019 (in thousands) Assets Right-of-use assets (1) Long-term right-of-use assets $ 52,331 $ 70,635 Finance lease assets Property and equipment 302 213 Liabilities Operating lease liabilities ― ST Current operating lease liabilities $ 14,019 $ 19,315 Operating lease liabilities ― LT Long-term operating lease liabilities 60,984 72,143 Finance lease liabilities ― ST Current portion of finance lease obligations 307 128 Finance lease liabilities ― LT Other long term liabilities 94 87 (1) Year ended December 31, Statements of Operations and Cash Flows Classification 2020 2019 (in thousands) Operating lease cost: Operating lease cost ― fixed Cost of revenue and Selling, general and administrative $ 19,968 $ 27,856 Lease abandonment costs Lease abandonment costs 4,350 2,073 Short-term agreements: Cost of revenue $ 44,062 $ 93,949 Finance lease cost: Amortization of leased assets Depreciation and amortization $ 314 $ 916 Interest on lease liabilities Interest expense, net 14 32 Lessor income: Sublease income Cost of sales and lease abandonment costs $ 1,463 $ 1,544 Lessor income Cost of sales 350 478 Statement of cash flows Cash paid for operating leases Operating cash flows $ 22,385 $ 30,670 Cash paid for finance leases lease interest Operating cash flows 14 32 Cash paid for finance leases Financing cash flows 264 883 Long Term and Discount Rate As of December 31, 2020 As of December 31, 2019 Weighted-average remaining lease term (years) Operating leases 6.7 7.9 Finance leases 1.3 1.6 Weighted-average discount rate Operating leases 4.7 % 5.3 % Finance leases 3.6 % 5.1 % |
Schedule of operating and finance lease commitments | Period Operating Leases (1) Finance Leases Total (in thousands) 2021 $ 17,478 $ 315 $ 17,793 2022 13,956 95 14,051 2023 11,858 — 11,858 2024 11,117 — 11,117 2025 10,376 — 10,376 Thereafter 22,908 — 22,908 Total minimum lease payments $ 87,693 $ 410 $ 88,103 Less reconciling items to reconcile undiscounted cash flows to lease liabilities: Short-term leases excluded from balance sheet 562 — 562 Imputed interest 12,128 9 12,137 Total reconciling items 12,690 9 12,699 Total liabilities per balance sheet $ 75,003 $ 401 $ 75,404 (1) The table above excludes sublease and lessor income of $1.1 million during 2021, $0.8 million during 2022 and $0.3 million during 2023. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INVENTORIES | |
Schedule of inventory | As of December 31, 2020 2019 (in thousands) Raw materials $ 16,701 $ 12,365 Finished goods 16,683 24,724 Materials and supplies — 453 Total $ 33,384 $ 37,542 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | As of December 31, 2020 2019 (in thousands) Machinery and equipment $ 596,441 $ 659,835 Buildings and leasehold improvements 93,236 97,426 Pipelines 72,458 69,327 Disposal wells 48,097 64,149 Vehicles and equipment 30,975 53,819 Land 13,497 16,030 Computer equipment and software 7,127 8,051 Office furniture and equipment 892 1,157 Machinery and equipment - finance lease 537 162 Vehicles and equipment - finance lease 475 1,291 Computer equipment and software - finance lease 356 356 Other — 497 Construction in progress 14,811 43,279 878,902 1,015,379 Less accumulated depreciation (1) (528,537) (562,986) Property and equipment held-for-sale, net — 885 Total property and equipment, net $ 350,365 $ 453,278 (1) Includes $1.1 million and $1.6 million of accumulated depreciation related to finance leases as of December 31, 2020 and December 31, 2019, respectively. |
Schedule of amortization of intangible assets | Year ended December 31, 2020 2019 2018 (in thousands) Category Depreciation expense from property and equipment $ 89,848 $ 107,738 $ 119,114 Amortization expense from finance leases 314 916 1,314 Amortization expense from intangible assets 11,661 11,900 13,102 Accretion expense from asset retirement obligations (151) 115 183 Total depreciation and amortization $ 101,672 $ 120,669 $ 133,713 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS. | |
Schedule of changes in the carrying amounts of goodwill by reportable segment | Water Wellsite Water Water Solutions Services Services Infrastructure Other Total (in thousands) Balance as of December 31, 2018 $ 266,801 $ 7,000 $ — $ — $ — $ 273,801 Resegmentation (266,801) (7,000) 186,335 80,466 7,000 — Measurement period adjustment (1) — — 133 — — 133 Affirm crane business divestiture — — — — (2,604) (2,604) Affirm impairment — — — — (4,396) (4,396) Balance as of December 31, 2019 — — 186,468 80,466 — 266,934 Impairment (186,468) (80,466) (266,934) Balance as of December 31, 2020 $ — $ — $ — $ — $ — $ — (1) See Note 3―Acquisitions and Divestitures for additional information. |
Summary of components of other intangible assets | As of December 31, 2020 As of December 31, 2019 Gross Accumulated Net Gross Accumulated Net Value Impairment Amortization Value Value Amortization Value (in thousands) (in thousands) Definite-lived Customer relationships $ 116,554 $ — $ (29,302) $ 87,252 $ 116,554 $ (20,233) $ 96,321 Patents 9,741 — (3,166) 6,575 10,110 (2,420) 7,690 Other 7,234 — (6,373) 861 7,234 (4,766) 2,468 Total definite-lived 133,529 — (38,841) 94,688 133,898 (27,419) 106,479 Indefinite-lived Water rights 7,031 — — 7,031 7,031 — 7,031 Trademarks 23,442 (9,082) — 14,360 23,442 — 23,442 Total indefinite-lived 30,473 (9,082) — 21,391 30,473 — 30,473 Total other intangible assets, net $ 164,002 $ (9,082) $ (38,841) $ 116,079 $ 164,371 $ (27,419) $ 136,952 |
Summary of future estimated amortization expense for other intangible assets | Year Ending December 31, Amount (in thousands) 2021 $ 10,466 2022 10,252 2023 10,180 2024 10,111 2025 9,948 Thereafter 43,731 Total $ 94,688 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
DEBT | |
Summary of Company's leverage ratio | Level Average Excess Availability Base Rate Margin Eurocurrency Rate Margin I < 33% of the commitments 1.00% 2.00% II < 66.67% of the commitments and ≥ 33.33% of the commitments 0.75% 1.75% III ≥ 66.67% of the commitments 0.50% 1.50% |
Schedule of fee Percentage on unused credit facility | Level Average Revolver Usage Unused Line Fee Percentage I ≥ 50% of the commitments 0.250% II < 50% of the commitments 0.375% |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of assumptions used in determining the fair value of certain equity options | For the year ended December 31, 2018 Underlying equity $ 20.50 Strike price $ 20.50 - 30.75 Dividend yield (%) 0.0 % Risk-free rate (%) 2.3 % Volatility (%) 50.0 % Expected term (years) 10.0 |
Schedule of equity option activity and related information | For the year ended December 31, 2020 Weighted-average Weighted-average Weighted-average Grant Date Value Aggregate Intrinsic Stock Options Grant Date Value Exercise Price Term (Years) Value (in thousands) (a) Beginning balance, outstanding 3,797,319 $ 8.19 $ 15.95 4.2 $ 509 Forfeited (22,437) 8.42 18.52 Expired (255,723) 2.81 13.47 Ending balance, outstanding 3,519,159 $ 8.58 $ 16.11 3.3 $ — Ending balance, exercisable 3,515,784 $ 8.58 $ 16.11 3.3 $ — Nonvested at December 31, 2020 3,375 N/A $ 22.22 (a) as of December 31, 2020 and 2019, respectively. |
Schedule of percentage of stock settled incentives earned | Stock Price at Vesting Date (1) Percentage of Target Amount Earned Less than $20.00 0% At least $20.00, but less than $25.00 100% $25.00 or greater 200% (1) The stock price at vesting date equals the greater of (i) the fair market value of a share of the Class A Common Stock on the vesting date, or (ii) the volume weighted-average closing price of a share of the Class A Common Stock, as reported on the NYSE, for the 30 trading days preceding the vesting date. |
Schedule of stock-settled incentive awards outstanding | Award Value Value at Target Being Recognized (in thousands) Nonvested as of December 31, 2019 $ 2,937 $ 1,122 Forfeited during 2020 (410) (157) Awards earned and forfeited as market condition not satisfied as of vesting date (2,527) — Cumulative expense recognized $ — $ 965 |
summary of ESPP activity | The following table summarizes ESPP activity (in thousands, except shares): For the year ended December 31, 2020 Cash received for shares issued $ 76 Shares issued 15,132 |
Restricted Stock | |
Schedule of restricted stock activity | For the year ended December 31, 2020 Weighted-average Restricted Stock Awards Grant Date Fair Value Nonvested at December 31, 2019 1,518,193 $ 10.08 Granted 1,477,488 5.80 Vested (578,281) 11.79 Forfeited (374,299) 7.43 Repurchased (40,029) 7.81 Nonvested at December 31, 2020 2,003,072 $ 6.97 |
Restricted Stock Units | |
Schedule of restricted stock activity | For the year ended December 31, 2020 Weighted-average Restricted Stock Units Grant Date Fair Value Nonvested at December 31, 2019 1,250 $ 19.00 Vested (625) 20.00 Forfeited (625) 18.00 Nonvested at December 31, 2020 — $ — |
Performance share units | |
Schedule of percentage of target PSUs earned | Return on Assets at Performance Period-End Date Percentage of Target PSUs Earned Less than 9.6% 0% 9.6% 50% 12% 100% 14.4% 175% Ranking Among Peer Group Percentage of Target Amount Earned Outside of Top 10 0% Top 10 50% Top 7 100% Top 3 175% Adjusted FCF Performance Percentage Percentage of Target Amount Earned Less than 70% 0% 70% 50% 100% 100% 130% 175% |
Summary of activity related to the units outstanding | Performance Share Units Nonvested as of December 31, 2019 1,014,990 Target shares granted 753,378 Target shares forfeited (4,459) Target shares outstanding as of December 31, 2020 1,763,909 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
FAIR VALUE MEASUREMENT | |
Summary of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements Using Carrying Frequency Measurement Date Level 1 Level 2 Level 3 Value (1) Impairment (in thousands) Year Ended December 31, 2020 Goodwill Non-recurring March 31 $ — $ — $ — $ 266,934 $ 266,934 Trademark Non-recurring March 31 — — 14,360 23,442 9,082 Property and equipment Non-recurring March 31 — — 176 3,360 3,184 Property and equipment Non-recurring June 30 — — — 4,726 4,726 Investments Recurring September 30 — 1,768 — 1,768 — Investments Recurring December 31 3,377 — — 3,377 — Year Ended December 31, 2019 Goodwill Non-recurring March 31 $ — $ — $ — $ 4,396 $ 4,396 Property and equipment Non-recurring March 31 — — 2,346 2,865 519 Property and equipment Non-recurring June 30 — — 2,386 2,760 374 Property and equipment Non-recurring September 30 — — 38 87 49 Property and equipment Non-recurring December 31 — — 2,555 5,328 2,773 Year Ended December 31, 2018 Cost-Method Investment Non-recurring March 31 $ — $ — $ 500 $ 2,500 $ 2,000 Property and equipment Non-recurring June 30 — — — 2,282 2,282 Property and equipment Non-recurring December 31 — — 10,262 14,637 4,375 Goodwill Non-recurring December 31 — — 7,000 24,894 17,894 (1) Amount represents carrying value at the date of assessment. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
INCOME TAXES | |
Summary of components of the federal and state income tax expense (benefit) | For the year ended December 31, 2020 2019 2018 (in thousands) Current tax (benefit) expense Federal income tax (benefit) expense $ (941) $ 696 $ 1,073 State and local income tax (benefit) expense (439) 1,034 1,077 Total current (benefit) expense (1,380) 1,730 2,150 Deferred tax (benefit) expense Federal income tax (benefit) expense (105) 49 (20) State and local income tax expense (benefit) 9 170 (426) Total deferred (benefit) expense (96) 219 (446) Total income tax (benefit) expense $ (1,476) $ 1,949 $ 1,704 Tax (benefit) expense attributable to controlling interests $ (1,246) $ 1,488 $ 1,425 Tax (benefit) expense attributable to noncontrolling interests (230) 461 279 Total income tax (benefit) expense $ (1,476) $ 1,949 $ 1,704 |
Summary of reconciliation of the provision for income taxes | For the year ended December 31, 2020 2019 2018 (in thousands) Provision calculated at federal statutory income tax rate: (Loss) income before taxes $ (403,208) $ 6,085 $ 56,003 Statutory rate 21 % 21 % 21 % Income tax (benefit) expense computed at statutory rate (84,674) 1,278 11,761 Less: noncontrolling interests 13,272 (284) (3,735) Income tax (benefit) expense attributable to controlling interests (71,402) 994 8,026 State and local income taxes, net of federal benefit (430) 884 515 Change in subsidiary tax status (409) 587 — CARES Act NOL carryback benefit (459) — — Change in valuation allowance 71,454 (1,833) (7,696) Deferred adjustment due to restructuring — 856 — Other — — 580 Income tax (benefit) expense attributable to controlling interests (1,246) 1,488 1,425 Income tax (benefit) expense attributable to noncontrolling interests (230) 461 279 Total income tax (benefit) expense $ (1,476) $ 1,949 $ 1,704 |
Summary of principal components of the deferred tax assets (liabilities) | For the year ended December 31, 2020 2019 (in thousands) Deferred tax assets Outside basis difference in SES Holdings $ 78,918 $ 27,935 Net operating losses 69,601 46,782 Credits and other carryforwards 4,111 1,451 Other 541 944 Total deferred tax assets before valuation allowance 153,171 77,112 Valuation allowance (152,659) (76,883) Total deferred tax assets 512 229 Deferred tax liabilities Property and equipment 718 540 Other 41 32 Total deferred tax liabilities 759 572 Net deferred tax liabilities $ (247) $ (343) |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
NONCONTROLLING INTERESTS | |
Schedule of Non Controlling Interests Categories | As of December 31 2020 2019 (in thousands) Noncontrolling interests attributable to joint ventures formed for water-related services $ 2,002 $ 2,674 Noncontrolling interests attributable to holders of Class B Common Stock 110,819 172,961 Total noncontrolling interests $ 112,821 $ 175,635 |
Summary of the effects of changes in noncontrolling interests | For the year ended December 31, 2020 2019 2018 (in thousands) Net (loss) income attributable to Select Energy Services, Inc. $ (338,684) $ 2,784 $ 36,512 Transfers from (to) noncontrolling interests: Increase in additional paid-in capital as a result of stock option exercises — 54 374 Increase in additional paid-in capital as a result of restricted stock issuance, net of forfeitures 1,874 3,614 1,942 Increase in additional paid-in capital as a result of issuance of common stock due to vesting of restricted stock units 1 4 104 Decrease in additional paid-in capital as a result of the repurchase of SES Holdings LLC Units (1,416) (3,362) (576) Increase in additional paid-in capital as a result of exchanges of SES Holdings LLC Units (an equivalent number of shares of Class B Common Stock) for shares of Class A Common Stock — 107,062 146,865 Increase in additional paid-in capital as a result of the Employee Stock Purchase Plan shares issued 7 42 15 Change to equity from net (loss) income attributable to Select Energy Services, Inc. and transfers from noncontrolling interests $ (338,218) $ 110,198 $ 185,236 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
(LOSS) EARNINGS PER SHARE | |
Summary of calculation of basic and diluted earnings per share | The following tables present the Company’s calculation of basic and diluted earnings per share for the years ended December 31, 2020, 2019 and 2018 (dollars in thousands, except share and per share amounts): Year ended December 31, 2020 Select Energy Services, Inc. Class A Class B Numerator: Net loss $ (401,732) Net loss attributable to noncontrolling interests 63,048 Net loss income attributable to Select Energy Services, Inc. — basic $ (338,684) $ (338,684) $ — Net loss income attributable to Select Energy Services, Inc. — diluted $ (338,684) $ (338,684) $ — Denominator: Weighted-average shares of common stock outstanding — basic 85,158,764 16,221,101 Weighted-average shares of common stock outstanding — diluted 85,158,764 16,221,101 Loss per share: Basic $ (3.98) $ — Diluted $ (3.98) $ — Year ended December 31, 2019 Select Energy Services, Inc. Class A Class B Numerator: Net income $ 4,136 Net income attributable to noncontrolling interests (1,352) Net income attributable to Select Energy Services, Inc. — basic $ 2,784 $ 2,784 $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 7 7 — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units 2 2 Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 1 1 — Net loss attributable to Select Energy Services, Inc. — diluted $ 2,794 $ 2,794 $ — Denominator: Weighted-average shares of common stock outstanding — basic 80,176,323 23,806,646 Dilutive effect of restricted stock 373,366 — Dilutive effect of performance share units 80,979 Dilutive effect of stock options 40,215 — Dilutive effect of ESPP 446 — Weighted-average shares of common stock outstanding — diluted 80,671,329 23,806,646 Earnings per share: Basic $ 0.03 $ — Diluted $ 0.03 $ — Year ended December 31, 2018 Select Energy Services, Inc. Class A Class A-2 Class B Numerator: Net loss $ 54,299 Net loss attributable to noncontrolling interests (17,787) Net loss attributable to Select Energy Services, Inc. — basic $ 36,512 $ 35,720 $ 792 $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 13 13 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 30 30 — — Net loss attributable to Select Energy Services, Inc. — diluted $ 36,555 $ 35,763 $ 792 $ — Denominator: Weighted-average shares of common stock outstanding — basic 72,403,318 1,604,575 31,986,438 Dilutive effect of restricted stock 71,718 — — Dilutive effect of stock options 166,999 — — Dilutive effect of ESPP 112 — — Weighted-average shares of common stock outstanding — diluted 72,642,147 1,604,575 31,986,438 Loss per share: Basic $ 0.49 $ 0.49 $ — Diluted $ 0.49 $ 0.49 $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SEGMENT INFORMATION | |
Summary of financial information by segment | For the year ended December 31, 2020 Loss Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 322,461 $ (250,779) $ 61,758 $ 2,161 Water Infrastructure 125,710 (96,290) 27,599 6,852 Oilfield Chemicals 160,825 (13,365) 9,443 7,157 Other — (733) — 330 Eliminations (3,891) — — — Loss from operations (361,167) Corporate — (33,610) 2,872 — Interest expense, net — (2,136) — — Other expense, net — (6,295) — — $ 605,105 $ (403,208) $ 101,672 $ 16,500 For the year ended December 31, 2019 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 773,946 $ 51,185 $ 80,664 $ 37,692 Water Infrastructure 221,661 15,103 25,665 53,839 Oilfield Chemicals 268,963 17,942 8,766 11,110 Other 33,365 (8,066) 1,714 64 Eliminations (6,346) — — — Income from operations 76,164 Corporate — (53,090) 3,860 — Interest expense, net — (2,688) — — Other expense, net — (14,301) — — $ 1,291,589 $ 6,085 $ 120,669 $ 102,705 For the year ended December 31, 2018 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 897,160 $ 89,826 $ 82,875 $ 120,883 Water Infrastructure 230,130 31,579 23,042 33,372 Oilfield Chemicals 260,281 (7,107) 10,496 10,832 Other 144,499 (14,021) 14,124 7,045 Eliminations (3,140) — — — Income from operations 100,277 Corporate — (38,603) 3,176 — Interest expense, net — (5,311) — — Other expense, net — (360) — — $ 1,528,930 $ 56,003 $ 133,713 $ 172,132 Total assets by segment as of December 31, 2020 and 2019 is as follows: As of December 31, 2020 2019 (in thousands) Water Services $ 515,856 $ 831,123 Water Infrastructure 204,995 314,026 Oilfield Chemicals 147,612 192,224 Other 6,896 10,247 $ 875,359 $ 1,347,620 |
Revenue from External Customers by Products and Services | For the year ended December 31, 2020 2019 2018 (in thousands) Oilfield chemicals $ 160,825 $ 268,963 $ 260,281 Water transfer 146,728 355,535 443,650 Pipeline logistics and disposal 91,971 101,145 100,172 Accommodations and rentals (1) 62,593 150,793 153,013 Flowback and well testing 61,839 208,572 223,828 Fluid hauling 52,748 63,156 79,568 Water sourcing 33,739 120,517 129,958 Eliminations and other service lines (5,338) 22,908 138,460 $ 605,105 $ 1,291,589 $ 1,528,930 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
Schedule of quarterly results of operations | 2020 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 278,285 $ 92,239 $ 101,242 $ 133,339 Gross profit (loss) 15,296 (23,719) (16,900) (3,942) Loss from operations (290,831) (47,805) (34,212) (21,929) Net loss (291,220) (53,044) (36,260) (21,208) Net loss attributable to Select Energy Services, Inc. (245,862) (44,298) (30,541) (17,983) Net loss per share attributable to common stockholders: Class A-Basic & Diluted $ (2.86) $ (0.52) $ (0.36) $ (0.21) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ — $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — 2019 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 362,646 $ 323,887 $ 328,968 $ 276,088 Gross profit 45,997 39,939 40,994 21,810 Income (loss) from operations 6,633 11,179 12,475 (7,213) Net income (loss) 1,400 8,068 7,172 (12,504) Net income (loss) attributable to Select Energy Services, Inc. 1,135 6,200 5,379 (9,930) Net income (loss) per share attributable to common stockholders: Class A-Basic & Diluted $ 0.01 $ 0.08 $ 0.07 $ (0.12) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ — $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — |
BUSINESS AND BASIS OF PRESENT_2
BUSINESS AND BASIS OF PRESENTATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($) | Dec. 31, 2020segmentitemVote | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Number of vote per share | Vote | 1 | |||
Number of equity method investee | 0 | 0 | ||
Number of cost-method investee | 1 | 1 | ||
Number of investment in notes receivable | 1 | |||
Number of investment in publicly traded securities | 1 | |||
Fair value of cost method investee | $ | $ 500 | |||
Impairment of cost-method investment | $ | $ 2,000 | $ 2,000 | ||
Number of operating segments | segment | 3 | |||
Cumulative translation adjustment | $ | $ 400 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Allowance activity (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($)customer | Dec. 31, 2019USD ($)customer | Dec. 31, 2018USD ($)customer | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of year | $ 5,773 | $ 5,329 | $ 2,979 | |
Increase to allowance based on a percent of revenue | 1,212 | 2,641 | 2,253 | |
Adjustment based on aged receivable analysis | 5,161 | (88) | (43) | |
Charge-offs | (3,003) | (2,504) | (23) | |
Recoveries | 14 | 395 | 163 | |
Balance at end of year | $ 9,157 | 9,157 | $ 5,773 | $ 5,329 |
Notes Receivables | $ 3,000 | |||
Concentrations of credit and customer risk | ||||
Number of customers accounting for more than 10% of consolidated revenues | customer | 0 | 0 | 0 | |
Notes receivable with affiliates | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at end of year | 0 | $ 0 | ||
Notes Receivables | $ 3,000 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)lease | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)$ / shares | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||||||||||
Balance at beginning of Current Period | $ 1,527 | $ 1,898 | $ 1,527 | $ 1,898 | |||||||
Accretion expense, included in depreciation and amortization expense | 121 | 115 | |||||||||
Disposals | (272) | ||||||||||
Payments | (377) | (486) | |||||||||
Balance at end of Current Period | $ 999 | $ 1,527 | $ 999 | 1,527 | $ 1,898 | ||||||
Lessor Income | |||||||||||
Number of owned operating leases | lease | 388 | ||||||||||
Number of subleases | lease | 14 | ||||||||||
Sublease income | $ 1,463 | 1,544 | |||||||||
Defined Contribution Plan | |||||||||||
401(k) match expense | 0 | ||||||||||
Payroll Tax Deferral | 6,000 | 6,000 | |||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Depreciation and amortization | 2,872 | 3,860 | 3,176 | ||||||||
Depreciation | 89,848 | 107,738 | 119,114 | ||||||||
Net (loss) income attributable to Select Energy Services, Inc. | $ (17,983) | $ (30,541) | $ (44,298) | $ (245,862) | $ (9,930) | $ 5,379 | $ 6,200 | $ 1,135 | $ (338,684) | 2,784 | 36,512 |
Goodwill and Intangible Asset Impairment | |||||||||||
Impaired asset carrying value | 2,300 | ||||||||||
Buildings and leasehold improvements | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 30 years | ||||||||||
Vehicles and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 4 years | ||||||||||
Vehicles and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 7 years | ||||||||||
Machinery and equipment | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Depreciation and amortization | $ 90,200 | $ 108,700 | $ 120,400 | ||||||||
Machinery and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 2 years | ||||||||||
Machinery and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 15 years | ||||||||||
Computer equipment and software | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 3 years | ||||||||||
Computer equipment and software | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 4 years | ||||||||||
Office furniture and equipment | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 7 years | ||||||||||
Disposal wells | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 7 years | ||||||||||
Disposal wells | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 10 years | ||||||||||
Change in useful life estimate and increased salvage value | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Earnings Per Share, Basic and Diluted | $ / shares | $ 0.15 | ||||||||||
Depreciation | $ 12,600 | ||||||||||
Net (loss) income attributable to Select Energy Services, Inc. | 10,900 | ||||||||||
Change in useful life estimate and increased salvage value | Vehicles and equipment | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Depreciation | $ 3,900 | ||||||||||
Change in useful life estimate and increased salvage value | Vehicles and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 6 years | ||||||||||
Change in useful life estimate and increased salvage value | Vehicles and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 8 years 1 month 6 days | ||||||||||
Change in useful life estimate and increased salvage value | Machinery and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 5 years 6 months | ||||||||||
Change in useful life estimate and increased salvage value | Machinery and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 6 years 10 months 24 days |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Self Insurance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||
Self insurance reserve towards deductible for general liability | $ 2 | ||
Self insurance reserve towards deductible for workers compensation and employers liability | 1 | ||
Self insurance reserve towards deductible for vehicle liability | 2 | ||
Self insurance reserve towards deductible for health liability | 0.2 | ||
Excess loss policy limit | 100 | ||
Workers' Compensation Liability, Current | 13.9 | ||
Accrued general insurance | 0.5 | ||
Accrued health insurance | $ 1.7 | ||
Employee benefit plans | |||
Matching contribution as a percentage of employee contributions | 100.00% | ||
Matching contribution as a percentage of employee compensation | 4.00% | ||
Company 401k contribution | $ 4.2 | $ 3.6 | |
First year | |||
Employee benefit plans | |||
Annual vesting matching contribution as a percentage of employee compensation | 25.00% | ||
Second year | |||
Employee benefit plans | |||
Annual vesting matching contribution as a percentage of employee compensation | 50.00% | ||
Third year | |||
Employee benefit plans | |||
Annual vesting matching contribution as a percentage of employee compensation | 75.00% | ||
Fourth year | |||
Employee benefit plans | |||
Annual vesting matching contribution as a percentage of employee compensation | 100.00% | ||
Minimum | |||
Class of Stock [Line Items] | |||
Estimated exposure amount of workers compensation claims | $ 12.9 | ||
Maximum | |||
Class of Stock [Line Items] | |||
Estimated exposure amount of workers compensation claims | $ 14.9 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Pro Well Acquisition (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Nov. 20, 2018 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Less: identified assets acquired and liabilities assumed | ||||||
Goodwill | $ 266,934 | $ 273,801 | ||||
Well Chemical Services Acquisition | ||||||
Consideration transferred | ||||||
Cash paid | $ 10,000 | |||||
Total consideration transferred | 10,000 | |||||
Less: identified assets acquired and liabilities assumed | ||||||
Inventory | 5,221 | |||||
Property and equipment | 4,473 | |||||
Intangible assets | 476 | |||||
Current liabilities | (170) | |||||
Total identifiable net assets acquired | 10,000 | |||||
Fair value allocated to net assets acquired | 10,000 | |||||
Initial payment | $ 10,000 | |||||
Pro Well Acquisition | ||||||
Consideration transferred | ||||||
Cash paid | 11,754 | |||||
Total consideration transferred | $ 11,800 | 11,754 | ||||
Less: identified assets acquired and liabilities assumed | ||||||
Working capital | 1,051 | |||||
Property and equipment | 6,588 | |||||
Intangible assets | 3,000 | |||||
Total identifiable net assets acquired | 10,639 | |||||
Fair value allocated to net assets acquired | 11,754 | |||||
Goodwill | $ 1,100 | $ 1,115 | ||||
Initial payment | $ 12,400 |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES - Rockwater Merger (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Less: identified assets acquired and liabilities assumed | ||
Goodwill | $ 266,934 | $ 273,801 |
Water Solutions | ||
Less: identified assets acquired and liabilities assumed | ||
Goodwill | $ 266,801 |
ACQUISITIONS AND DIVESTITURES_3
ACQUISITIONS AND DIVESTITURES - Resource Water Acquisition - Purchase price allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Less: identified assets acquired and liabilities assumed | ||
Goodwill | $ 266,934 | $ 273,801 |
ACQUISITIONS AND DIVESTITURES_4
ACQUISITIONS AND DIVESTITURES - GRR Acquisition (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ACQUISITIONS AND DIVESTITURES | ||
Goodwill | $ 266,934 | $ 273,801 |
ACQUISITIONS AND DIVESTITURES_5
ACQUISITIONS AND DIVESTITURES - GRR Acquisition - Purchase price allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Less: identified assets acquired and liabilities assumed | ||
Goodwill | $ 266,934 | $ 273,801 |
ACQUISITIONS AND DIVESTITURES_6
ACQUISITIONS AND DIVESTITURES - Affirm and Canadian Operations Divestitures (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 28, 2019USD ($) | Apr. 01, 2019USD ($) | Mar. 19, 2019USD ($) | Feb. 26, 2019USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of sales transactions | 4 | ||||||
Reduction in goodwill | $ 2,604 | ||||||
Impairment of Goodwill | $ 0 | $ 266,934 | 4,396 | ||||
Affirm Crane Operations [Member] | February 26, 2019 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Initial Net Proceeds | $ 10,982 | ||||||
Working Capital True Up | (208) | ||||||
Adjusted Net Proceeds | $ 10,774 | ||||||
Gain or loss | 208 | ||||||
Affirm Crane Operations [Member] | June 28, 2019 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Initial Net Proceeds | $ 6,968 | ||||||
Adjusted Net Proceeds | $ 6,968 | ||||||
Gain or loss | (1,646) | ||||||
Canadian Business | March 19, 2019 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Initial Net Proceeds | $ 4,975 | ||||||
Working Capital True Up | (302) | ||||||
Adjusted Net Proceeds | $ 4,673 | ||||||
Gain or loss | 5,013 | ||||||
Canadian Business | Apri 1, 2019 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Initial Net Proceeds | $ 2,242 | ||||||
Adjusted Net Proceeds | $ 2,242 | ||||||
Gain or loss | 101 | ||||||
Sale | Affirm Crane Operations [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain or loss | $ 0 | ||||||
Number of transactions assigned for working capital | 2 | ||||||
Reduction in goodwill | $ 2,600 | ||||||
Impairment of Goodwill | $ 4,400 | ||||||
Sale | Affirm and Canadian Operations Divestitures [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of sales transactions | 4 | ||||||
Net book value | $ 18,600 |
IMPAIRMENTS AND OTHER COSTS (De
IMPAIRMENTS AND OTHER COSTS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)facility | Dec. 31, 2018USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||
Impairment of goodwill and trademark | $ 276,016 | $ 4,396 | $ 17,894 |
Impairment and abandonment of property and equipment | 7,910 | 3,715 | 6,657 |
Severance Costs | 7,168 | 1,691 | 1,220 |
Yard closure costs | 2,961 | ||
Lease Abandonment Costs | 4,350 | $ 2,073 | 3,925 |
Accrued severance | 600 | ||
Number of abandoned facilities | facility | 2 | ||
Carrying value of impaired asset | 2,300 | ||
Fair value of impaired asset | 0 | ||
Water Services | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of goodwill and trademark | 186,468 | ||
Impairment and abandonment of property and equipment | 3,894 | $ 969 | |
Severance Costs | 4,569 | 538 | |
Yard closure costs | 2,645 | ||
Lease Abandonment Costs | 4,321 | 1,218 | 2,150 |
Water Infrastructure | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of goodwill and trademark | 80,466 | ||
Impairment and abandonment of property and equipment | 4,016 | 1,804 | 2,282 |
Severance Costs | 500 | ||
Lease Abandonment Costs | 51 | ||
Oilfield Chemicals | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of goodwill and trademark | 9,082 | 12,652 | |
Severance Costs | 813 | ||
Yard closure costs | 316 | ||
Lease Abandonment Costs | 42 | 11 | 28 |
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment of goodwill and trademark | 4,396 | 5,242 | |
Impairment and abandonment of property and equipment | 942 | 4,375 | |
Severance Costs | 1,286 | 1,691 | 682 |
Lease Abandonment Costs | (64) | 844 | 1,747 |
Pipelines | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment and abandonment of property and equipment | 1,100 | ||
layflat [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment and abandonment of property and equipment | 1,000 | ||
Canadian Fixed Assets [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment and abandonment of property and equipment | 900 | 4,400 | |
Owned Facility | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment and abandonment of property and equipment | 600 | ||
Costs of revenue | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 4,000 | 500 | |
Yard closure costs | 3,000 | ||
Selling, general and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 3,200 | $ 1,700 | $ 700 |
Accrued Expenses and Other Current Liabilities | |||
Restructuring Cost and Reserve [Line Items] | |||
Yard closure costs | $ 100 |
REVENUE (Details)
REVENUE (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)regionsegment | Dec. 31, 2019USD ($)regionsegment | Dec. 31, 2018USD ($)regionsegment | Dec. 31, 2020USD ($)segment | |
REVENUE | ||||||||||||
Number of Reportable Segments | segment | 3 | 3 | 3 | 3 | ||||||||
Contract liability | $ 8,200 | $ 8,200 | $ 8,200 | |||||||||
Revenue | $ 133,339 | $ 101,242 | $ 92,239 | $ 278,285 | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | 605,105 | $ 1,291,589 | $ 1,528,930 | |
Permian Basin | ||||||||||||
REVENUE | ||||||||||||
Revenue | 278,439 | 610,528 | 606,591 | |||||||||
Haynesville/E. Texas | ||||||||||||
REVENUE | ||||||||||||
Revenue | 73,116 | 73,658 | 59,969 | |||||||||
Eagle Ford | ||||||||||||
REVENUE | ||||||||||||
Revenue | 69,440 | 156,621 | 171,942 | |||||||||
MidCon | ||||||||||||
REVENUE | ||||||||||||
Revenue | 56,687 | 176,216 | 243,524 | |||||||||
Marcellus/Utica | ||||||||||||
REVENUE | ||||||||||||
Revenue | 54,473 | 96,454 | 134,984 | |||||||||
Bakken | ||||||||||||
REVENUE | ||||||||||||
Revenue | 38,986 | 92,956 | 153,212 | |||||||||
Rockies | ||||||||||||
REVENUE | ||||||||||||
Revenue | 37,517 | 85,339 | 111,901 | |||||||||
Eliminations and other regions | ||||||||||||
REVENUE | ||||||||||||
Revenue | $ (3,553) | $ (183) | $ 46,807 | |||||||||
Permian Basin, MidCon and Eagle Ford | Water Services | ||||||||||||
REVENUE | ||||||||||||
Number of revenue producing regions | region | 3 | 3 | 3 | |||||||||
Percentage of revenue | 71.00% | 72.00% | 67.00% | |||||||||
Permian Basin and Bakken | Water Infrastructure | ||||||||||||
REVENUE | ||||||||||||
Percentage of revenue | 88.00% | 84.00% | 85.00% | |||||||||
Permian Basin and MidCon | Oilfield Chemicals | ||||||||||||
REVENUE | ||||||||||||
Number of revenue producing regions | region | 3 | 3 | 3 | |||||||||
Percentage of revenue | 87.00% | 89.00% | 83.00% |
LEASES - Description (Details)
LEASES - Description (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)lease | Dec. 31, 2019USD ($) | |
LEASES | |||
Number of facility leases | lease | 388 | ||
Number of subleases | lease | 14 | ||
Number of finance leases | lease | 2 | ||
Number of lessor owned properties | lease | 2 | ||
Reduction in right- of-use assets | $ 5,700 | $ 5,700 | |
Reduction in Lease liability | $ 5,700 | 5,700 | |
Operating lease liabilities | 60,984 | $ 72,143 | |
Variable Lease, Cost | 1,100 | 1,600 | |
Property tax expense | $ 800 | $ 800 | |
Minimum | |||
LEASES | |||
Lessee operating lease renewal term | 1 year | ||
Maximum | |||
LEASES | |||
Lessee operating lease renewal term | 5 years |
LEASES - Financial Impact of Le
LEASES - Financial Impact of Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Financial Position | |||
Right-of-use assets | $ 52,331 | $ 70,635 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:LongTermRightOfUseAssetsMember | us-gaap:LongTermRightOfUseAssetsMember | |
Finance lease assets | $ 302 | $ 213 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property Plant And Equipment [Member] | ||
Operating lease liabilities | $ 14,019 | 19,315 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | wttr:CurrentOperatingLeaseLiabilitiesMember | ||
Operating lease liabilities | $ 60,984 | 72,143 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | wttr:LongTermOperatingLeaseLiabilitiesMember | ||
Finance lease liabilities | $ 307 | 128 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Finance Lease, Liability | ||
Finance lease liabilities | $ 94 | 87 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | wttr:OtherLongTermLliabilitiesMember | ||
Right-of-use asset impairment | $ 3,600 | 600 | |
Operating lease cost: | |||
Operating lease cost - fixed | 19,968 | 27,856 | |
Lease abandonment costs | 4,350 | 2,073 | |
Short-term agreements: | 44,062 | 93,949 | |
Finance lease cost: | |||
Amortization of leased assets | 314 | 916 | $ 1,314 |
Interest on lease liabilities | 14 | 32 | |
Sublease income | 1,463 | 1,544 | |
Lessor income | 350 | 478 | |
Statement of cash flows | |||
Cash paid for operating leases | 22,385 | 30,670 | |
Cash paid for finance leases lease interest | 14 | 32 | |
Cash paid for finance leases | $ 264 | $ 883 | $ 1,881 |
LEASES - Lease Term and Discoun
LEASES - Lease Term and Discount Rate (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
LEASES | ||
Operating leases, weighted average remaining lease term | 6 years 8 months 12 days | 7 years 10 months 24 days |
Finance leases, weighted average remaining lease term | 1 year 3 months 18 days | 1 year 7 months 6 days |
Operating Leases, Weighted-average discount rate | 4.70% | 5.30% |
Finance leases, Weighted average discount rate | 3.60% | 5.10% |
LEASES - Lease Commitments (Det
LEASES - Lease Commitments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Operating Leases | |
2021 | $ 17,478 |
2022 | 13,956 |
2023 | 11,858 |
2024 | 11,117 |
2025 | 10,376 |
Thereafter | 22,908 |
Total minimum lease payments | 87,693 |
Operating lease, Less reconciling items to reconcile undiscounted cash flows to lease liabilities: | |
Short-term leases excluded from balance sheet | 562 |
Imputed interest | 12,128 |
Total reconciling items | 12,690 |
Total liabilities per balance sheet | $ 75,003 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Operating Lease, Liability, Current |
Finance Leases | |
2021 | $ 315 |
2022 | 95 |
Total minimum lease payments | 410 |
Finance Lease, Less reconciling items to reconcile undiscounted cash flows to lease liabilities: | |
Imputed interest | 9 |
Total reconciling items | 9 |
Total liabilities per balance sheet | 401 |
Total | |
2021 | 17,793 |
2022 | 14,051 |
2023 | 11,858 |
2024 | 11,117 |
2025 | 10,376 |
Thereafter | 22,908 |
Total minimum lease payments | 88,103 |
Leases Total , Less reconciling items to reconcile undiscounted cash flows to lease liabilities: | |
Short-term leases excluded from balance sheet | 562 |
Imputed interest | 12,137 |
Total reconciling items | 12,699 |
Total liabilities per balance sheet | 75,404 |
2021 | 1,100 |
2022 | 800 |
2023 | $ 300 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant components of inventory | |||
Raw materials | $ 16,701 | $ 12,365 | |
Finished goods | 16,683 | 24,724 | |
Materials and supplies | 453 | ||
Total | 33,384 | 37,542 | |
Inventory write-downs | 852 | 250 | $ 442 |
Inventory Valuation Reserves | $ 4,100 | $ 4,100 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment | |||
Property and equipment | $ 878,902 | $ 1,015,379 | |
Accumulated depreciation | (528,537) | (562,986) | |
Property and equipment held-for-sale, net | 885 | ||
Total property and equipment, net | 350,365 | 453,278 | |
Accumulated depreciation related to finance leases | 1,100 | 1,600 | |
depreciation and amortization expense | |||
Depreciation expense from property and equipment | 89,848 | 107,738 | $ 119,114 |
Amortization expense from finance lease | 314 | 916 | 1,314 |
Amortization expense from intangible assets | 11,661 | 11,900 | 13,102 |
Accretion expense from asset retirement obligation | (151) | 115 | 183 |
Total depreciation and amortization | 101,672 | 120,669 | 133,713 |
Property and Equipment Held-for-Sale and Impairments | |||
Net loss on disposal of property and equipment | 2,405 | 7,950 | $ (3,803) |
Canadian Assets | |||
Property and Equipment Held-for-Sale and Impairments | |||
Net loss on disposal of property and equipment | 100 | ||
Machinery and equipment | |||
Property and equipment | |||
Property and equipment | 596,441 | 659,835 | |
Buildings and leasehold improvements | |||
Property and equipment | |||
Property and equipment | 93,236 | 97,426 | |
Pipelines | |||
Property and equipment | |||
Property and equipment | 72,458 | 69,327 | |
Disposal wells | |||
Property and equipment | |||
Property and equipment | 48,097 | 64,149 | |
Vehicles and equipment | |||
Property and equipment | |||
Property and equipment | 30,975 | 53,819 | |
Land | |||
Property and equipment | |||
Property and equipment | 13,497 | 16,030 | |
Computer equipment and software | |||
Property and equipment | |||
Property and equipment | 7,127 | 8,051 | |
Office furniture and equipment | |||
Property and equipment | |||
Property and equipment | 892 | 1,157 | |
Machinery and equipment - finance lease | |||
Property and equipment | |||
Property and equipment | 537 | 162 | |
Vehicles and equipment - finance lease | |||
Property and equipment | |||
Property and equipment | 475 | 1,291 | |
Computer equipment and software - finance lease | |||
Property and equipment | |||
Property and equipment | 356 | 356 | |
Other | |||
Property and equipment | |||
Property and equipment | 497 | ||
Construction in progress | |||
Property and equipment | |||
Property and equipment | $ 14,811 | $ 43,279 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)segment | |
Goodwill | |||
Number of Reporting Units | segment | 1 | ||
Balance at the beginning of the period | $ 273,801 | $ 266,934 | $ 273,801 |
Measurement period adjustment | 133 | ||
Affirm crane business divestiture | 2,604 | ||
Impairment | 0 | (266,934) | (4,396) |
Balance at the end of the period | 266,934 | ||
Water Solutions | |||
Goodwill | |||
Balance at the beginning of the period | 266,801 | 266,801 | |
Resegmentation | (266,801) | ||
Balance at the end of the period | |||
Wellsite Services | |||
Goodwill | |||
Balance at the beginning of the period | $ 7,000 | 7,000 | |
Resegmentation | (7,000) | ||
Balance at the end of the period | |||
Water Services | |||
Goodwill | |||
Balance at the beginning of the period | 186,468 | ||
Resegmentation | 186,335 | ||
Measurement period adjustment | 133 | ||
Impairment | (186,468) | ||
Balance at the end of the period | 186,468 | ||
Water Infrastructure | |||
Goodwill | |||
Balance at the beginning of the period | 80,466 | ||
Resegmentation | 80,466 | ||
Impairment | $ (80,466) | ||
Balance at the end of the period | 80,466 | ||
Other | |||
Goodwill | |||
Resegmentation | 7,000 | ||
Affirm crane business divestiture | 2,604 | ||
Impairment | $ (4,396) |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other intangible assets | ||||
Gross Value, Definite-lived | $ 133,529 | $ 133,898 | ||
Accumulated Amortization, Definite-lived | (38,841) | (27,419) | ||
Total | 94,688 | 106,479 | ||
Gross Value, Indefinite-lived | 30,473 | 30,473 | ||
Impairment, Indefinite-lived | $ 9,100 | (9,082) | ||
Net Value, Indefinite-lived | 21,391 | 136,952 | ||
Intangible Assets, Gross (Excluding Goodwill) | 164,002 | 164,371 | ||
Intangible Assets, Net (Excluding Goodwill) | 116,079 | |||
Definite-lived intangible asset acquired | 0 | |||
Amortization of Intangible Assets | 11,661 | 11,900 | $ 13,102 | |
Water rights | ||||
Other intangible assets | ||||
Gross Value, Indefinite-lived | $ 7,031 | 7,031 | ||
Water rights | Minimum | ||||
Other intangible assets | ||||
Renewal term | 5 years | |||
Water rights | Maximum | ||||
Other intangible assets | ||||
Renewal term | 10 years | |||
Trademarks | ||||
Other intangible assets | ||||
Gross Value, Indefinite-lived | $ 23,442 | 23,442 | ||
Impairment, Indefinite-lived | (9,082) | |||
Net Value, Indefinite-lived | $ 14,360 | |||
Trademarks | Minimum | ||||
Other intangible assets | ||||
Renewal term | 5 years | |||
Trademarks | Maximum | ||||
Other intangible assets | ||||
Renewal term | 10 years | |||
Customer relationships | ||||
Other intangible assets | ||||
Gross Value, Definite-lived | $ 116,554 | 116,554 | ||
Accumulated Amortization, Definite-lived | (29,302) | (20,233) | ||
Total | $ 87,252 | 96,321 | ||
Definite-lived intangible asset acquired | 500 | |||
Weighted average amortization period | 9 years 8 months 12 days | |||
Patents | ||||
Other intangible assets | ||||
Gross Value, Definite-lived | $ 9,741 | 10,110 | ||
Accumulated Amortization, Definite-lived | (3,166) | (2,420) | ||
Total | $ 6,575 | 7,690 | ||
Weighted average amortization period | 6 years 9 months 18 days | |||
Other intangibles | ||||
Other intangible assets | ||||
Gross Value, Definite-lived | $ 7,234 | 7,234 | ||
Accumulated Amortization, Definite-lived | (6,373) | (4,766) | ||
Total | $ 861 | $ 2,468 | ||
Weighted average amortization period | 2 years 8 months 12 days |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Annual Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Annual amortization of intangible assets | ||
Year Ending December 31, 2021 | $ 10,466 | |
Year ending December 31, 2022 | 10,252 | |
Year ending December 31, 2023 | 10,180 | |
Year ending December 31, 2024 | 10,111 | |
Year ending December 31, 2025 | 9,948 | |
Thereafter | 43,731 | |
Total | $ 94,688 | $ 106,479 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Nov. 01, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
DEBT | ||||
Amortization of debt issuance costs | $ 688 | $ 688 | $ 688 | |
Average excess availability, less than 33% of the commitments | Base Rate Advances | ||||
DEBT | ||||
Variable interest rate (as a percent) | 1.00% | |||
Average excess availability, less than 33% of the commitments | LIBOR | ||||
DEBT | ||||
Variable interest rate (as a percent) | 2.00% | |||
Average excess availability, less than 66.67% of the commitments and more than or equal to 33.33% of the commitments | Base Rate Advances | ||||
DEBT | ||||
Variable interest rate (as a percent) | 0.75% | |||
Average excess availability, less than 66.67% of the commitments and more than or equal to 33.33% of the commitments | LIBOR | ||||
DEBT | ||||
Variable interest rate (as a percent) | 1.75% | |||
Average excess availability, more than or equal to 66.67% of the commitments | Base Rate Advances | ||||
DEBT | ||||
Variable interest rate (as a percent) | 0.50% | |||
Average excess availability, more than or equal to 66.67% of the commitments | LIBOR | ||||
DEBT | ||||
Variable interest rate (as a percent) | 1.50% | |||
Average excess availability more than or equal to fifty percent | ||||
DEBT | ||||
Unused line fee (as a percent) | 0.25% | |||
Average excess availability less than fifty percent | ||||
DEBT | ||||
Unused line fee (as a percent) | 0.375% | |||
Eligible unbilled receivables | ||||
DEBT | ||||
Borrowing base (as a percent) | 75.00% | |||
Letter of credit | ||||
DEBT | ||||
Amount outstanding | $ 0 | 0 | ||
Revolving line of credit | ||||
DEBT | ||||
Maximum borrowing capacity | $ 300,000 | |||
Revolving line of credit | Letter of credit | ||||
DEBT | ||||
Maximum borrowing capacity | 96,400 | 214,600 | ||
Senior secured credit facility | ||||
DEBT | ||||
Percentage of borrowing base allowed | 35.00% | |||
Margin (as a percent) | 2.00% | |||
Reduction in borrowing capacity | 15,600 | 19,900 | ||
Unused portion of available borrowing | 80,800 | |||
Unamortized Debt issuance Costs | $ 1,300 | $ 2,000 | ||
Senior secured credit facility | Minimum | ||||
DEBT | ||||
Percentage of borrowing base allowed | 30.00% | |||
Variable interest rate (as a percent) | 1.50% | |||
Senior secured credit facility | Maximum | ||||
DEBT | ||||
Variable interest rate (as a percent) | 2.00% | |||
Senior secured credit facility | Base Rate Advances | Minimum | ||||
DEBT | ||||
Margin (as a percent) | 0.50% | |||
Senior secured credit facility | Base Rate Advances | Maximum | ||||
DEBT | ||||
Margin (as a percent) | 1.00% | |||
Senior secured credit facility | LIBOR | ||||
DEBT | ||||
Margin (as a percent) | 1.00% | |||
Senior secured credit facility | LIBOR | Minimum | ||||
DEBT | ||||
Margin (as a percent) | 1.50% | |||
Senior secured credit facility | LIBOR | Maximum | ||||
DEBT | ||||
Margin (as a percent) | 2.00% | |||
Senior secured credit facility | Federal Funds Rate | ||||
DEBT | ||||
Margin (as a percent) | 0.50% | |||
Senior secured credit facility | Eligible billed receivables | ||||
DEBT | ||||
Borrowing base (as a percent) | 85.00% | |||
Senior secured credit facility | Eligible inventory | ||||
DEBT | ||||
Borrowing base (as a percent) | 70.00% | |||
Senior secured credit facility | Net recovery percentage | ||||
DEBT | ||||
Borrowing base (as a percent) | 85.00% | |||
Senior secured credit facility | Criteria for distributions, scenario one | ||||
DEBT | ||||
Lookback period | 30 days | |||
Percentage outstanding | 25.00% | |||
Base amount | $ 37,500 | |||
Senior secured credit facility | Criteria for distributions, scenario two | ||||
DEBT | ||||
Lookback period | 30 days | |||
Percentage outstanding | 20.00% | |||
Base amount | $ 30,000 | |||
Fixed charge coverage ratio | 1.00% | |||
Senior secured credit facility | Coverage Ratio Criteria | ||||
DEBT | ||||
Lookback period | 60 days | |||
Percentage outstanding | 10.00% | |||
Base amount | $ 15,000 | |||
Fixed charge coverage ratio | 1.00% | |||
Senior secured credit facility | Letter of credit | ||||
DEBT | ||||
Maximum borrowing capacity | $ 40,000 | |||
Senior secured credit facility | Swingline loan | ||||
DEBT | ||||
Maximum borrowing capacity | $ 30,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Percentage of vehicles in which certain employees at some of the facilities altered emissions controls systems | 5.00% |
Litigation Settlement Accrual | $ 4.3 |
Litigation Payment Accrual | $ 1.7 |
EQUITY-BASED COMPENSATION (Deta
EQUITY-BASED COMPENSATION (Details) - shares | Dec. 20, 2016 | Dec. 31, 2020 | May 08, 2020 | Nov. 01, 2017 |
Class A-1 Common Stock | Private Placement | ||||
EQUITY-BASED COMPENSATION | ||||
Shares issued | 16,100,000 | |||
2016 plan | ||||
EQUITY-BASED COMPENSATION | ||||
Maximum number of shares | 3,800,000 | 13,300,000 | ||
2016 plan | Maximum | ||||
EQUITY-BASED COMPENSATION | ||||
Equity options term | 10 years | |||
Second Amendment to the 2016 Plan [Member] | Class A Common Stock | ||||
EQUITY-BASED COMPENSATION | ||||
Maximum number of shares | 4,000,000 |
EQUITY-BASED COMPENSATION - Ass
EQUITY-BASED COMPENSATION - Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
EQUITY-BASED COMPENSATION | |||
Granted (in shares) | 0 | 0 | |
Weighted-average grant date fair value of equity options granted | $ 8.98 | ||
Assumptions for equity options granted: | |||
Underlying equity | $ 20.50 | ||
Dividend yield (%) | 0.00% | ||
Risk free rate(%) | 2.30% | ||
Volatility (%) | 50.00% | ||
Expected term (years) | 10 years | ||
Equity options | Minimum | |||
Assumptions for equity options granted: | |||
Strike price | $ 20.50 | ||
Equity options | Maximum | |||
Assumptions for equity options granted: | |||
Strike price | $ 30.75 |
EQUITY-BASED COMPENSATION - Equ
EQUITY-BASED COMPENSATION - Equity Options Changed During Period (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity Options | ||
Granted (in shares) | 0 | 0 |
Equity options | ||
Equity Options | ||
Beginning balance (in shares) | 3,797,319 | |
Forfeited (in shares) | (22,437) | |
Expired (in shares) | (255,723) | |
Ending balance (in shares) | 3,519,159 | 3,797,319 |
Ending balance, exercisable (in shares) | 3,515,784 | |
Nonvested at end of period (in shares) | 3,375 | |
Weighted-average Grant Date Value | ||
Beginning balance (in dollars per share) | $ 8.19 | |
Forfeited (in dollars per share) | 8.42 | |
Expired (in dollars per share) | 2.81 | |
Ending balance (in dollars per share) | 8.58 | $ 8.19 |
Ending balance, exercisable | 8.58 | |
Weighted-average Exercise Price | ||
Beginning balance (in dollars per share) | 15.95 | |
Forfeited (in dollars per share) | 18.52 | |
Expired (in dollars per share) | 13.47 | |
Ending balance (in dollars per share) | 16.11 | $ 15.95 |
Ending balance, exercisable | 16.11 | |
Nonvested at end of period (in dollar per share) | $ 22.22 | |
Weighted-average Remaining Contractual Term (Years) | ||
Outstanding | 3 years 3 months 18 days | 4 years 2 months 12 days |
Ending balance, exercisable | 3 years 3 months 18 days | |
Aggregate Intrinsic Value | ||
Beginning balance, outstanding | $ 509 | |
Ending balance, outstanding | $ 509 |
EQUITY-BASED COMPENSATION - E_2
EQUITY-BASED COMPENSATION - Equity Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 20.50 | ||
Equity options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 0.2 | $ 4.3 | $ 5.2 |
Class A Common Stock | Equity options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 4.10 | $ 9.28 |
EQUITY-BASED COMPENSATION - Res
EQUITY-BASED COMPENSATION - Restricted stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
EQUITY-BASED COMPENSATION | |||
Payments for repurchase of common stock | $ 10,876 | $ 18,600 | $ 16,562 |
Restricted Stock | |||
EQUITY-BASED COMPENSATION | |||
Compensation expense | 7,200 | 8,500 | $ 4,300 |
Unrecognized compensation expense | 7,200 | ||
Payments for repurchase of common stock | $ 1,500 | $ 1,000 | |
Weighted-average remaining life | 1 year 8 months 12 days | ||
Restricted Stock | Minimum | |||
EQUITY-BASED COMPENSATION | |||
offering period | 1 year | ||
Restricted Stock | Maximum | |||
EQUITY-BASED COMPENSATION | |||
offering period | 3 years | ||
Restricted Stock Awards | |||
Restricted stock | |||
Beginning balance (in shares) | 1,518,193 | ||
Granted (in shares) | 1,477,488 | ||
Vested (in shares) | (578,281) | ||
Forfeited (in shares) | (374,299) | ||
Repurchased (in shares) | (40,029) | ||
Ending balance (in shares) | 2,003,072 | 1,518,193 | |
Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 10.08 | ||
Granted (in dollars per share) | 5.80 | ||
Vested (in dollars per share) | 11.79 | ||
Forfeited (in dollars per share) | 7.43 | ||
Repurchased (in dollars per share) | 7.81 | ||
Ending balance (in dollars per share) | $ 6.97 | $ 10.08 | |
Restricted Stock Units | |||
Restricted stock | |||
Beginning balance (in shares) | 1,250 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | (625) | ||
Forfeited (in shares) | (625) | ||
Ending balance (in shares) | 1,250 | ||
Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 19 | ||
Vested (in dollars per share) | 20 | ||
Forfeited (in dollars per share) | $ 18 | ||
Ending balance (in dollars per share) | $ 19 |
EQUITY-BASED COMPENSATION - Per
EQUITY-BASED COMPENSATION - Performance share units (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of times shares issued for each performance share settlement | $ / shares | 1 | ||
Grant date fair value of PSUs | $ 4,400,000 | $ 7,000,000 | $ 5,900,000 |
Compensation expense | (1,700,000) | $ 2,100,000 | $ 500,000 |
Unrecognized compensation expense | $ 2,200,000 | ||
Weighted-average remaining life | 2 years | ||
Performance share units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of times shares issued for each performance share settlement | 0 | ||
Percentage of Target PSUs Earned | 0.00% | ||
Percentage of Target Amount Earned | 0.00% | ||
Performance share units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of times shares issued for each performance share settlement | 1.75 | ||
Percentage of Target PSUs Earned | 1.75% | ||
Return on assets Less than 9.6% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target PSUs Earned | 0.00% | ||
Return on assets 9.6% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target PSUs Earned | 50.00% | ||
Return on assets 12% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target PSUs Earned | 100.00% | ||
Return on assets 14.4% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target PSUs Earned | 175.00% | ||
Peer Group Outside of Top 10 | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 0.00% | ||
Peer Group Top 10 | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 50.00% | ||
Peer Group Top 7 | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 100.00% | ||
Peer Group Top 3 | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 175.00% | ||
Adjusted FCF Performance Percentage Less than 70% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 0.00% | ||
Adjusted FCF Performance Percentage 70% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 50.00% | ||
Adjusted FCF Performance Percentage 100% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 100.00% | ||
Adjusted FCF Performance Percentage 130% | Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 175.00% | ||
Return On Assets Five Percent [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of Target Amount Earned | 5.00% |
EQUITY-BASED COMPENSATION - P_2
EQUITY-BASED COMPENSATION - Performance share units outstanding (Details) - Performance share units - 2019 | 12 Months Ended |
Dec. 31, 2020shares | |
Performance share units | |
Beginning balance (in shares) | 1,014,990 |
Target shares granted | 753,378 |
Target shares forfeited | (4,459) |
Ending balance (in shares) | 1,763,909 |
EQUITY-BASED COMPENSATION - Sto
EQUITY-BASED COMPENSATION - Stock-Settled Incentive Awards (Details) - Stock-Settled Incentive Awards - USD ($) $ in Millions | May 17, 2018 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
EQUITY-BASED COMPENSATION | |||||
offering period | 2 years | ||||
Percentage of Target Amount Earned | 0.00% | ||||
Vesting date | 30 days | ||||
Target amount of stock settled incentive awards granted | $ 3.9 | ||||
Number of shares issued | 0 | ||||
Compensation expense | $ 0.1 | $ 0.5 | $ 0.4 | ||
Minimum | |||||
EQUITY-BASED COMPENSATION | |||||
Pay out percentage | 0.00% | ||||
Maximum | |||||
EQUITY-BASED COMPENSATION | |||||
Pay out percentage | 200.00% | ||||
Less than $20.00 | |||||
EQUITY-BASED COMPENSATION | |||||
Percentage of Target Amount Earned | 0.00% | ||||
At least $20.00, but less than $25.00 | |||||
EQUITY-BASED COMPENSATION | |||||
Percentage of Target Amount Earned | 100.00% | ||||
$25.00 or greater | |||||
EQUITY-BASED COMPENSATION | |||||
Percentage of Target Amount Earned | 200.00% |
EQUITY-BASED COMPENSATION - S_2
EQUITY-BASED COMPENSATION - Stock-settled incentive awards outstanding (Details) - Stock-Settled Incentive Awards shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Value at Target | |
Non-vested at beginning of period | $ 2,937 |
Forfeited during 2020 | $ (410) |
Awards earned and forfeited as market condition not satisfied as of vesting date | shares | (2,527) |
Award Value Being Recognized | |
Non-vested at beginning of period | $ 1,122 |
Forfeited during 2020 | (157) |
Non-vested at end of period | $ 965 |
EQUITY-BASED COMPENSATION - Emp
EQUITY-BASED COMPENSATION - Employee Stock Purchase Plan (ESPP) (Details) - ESPP | 12 Months Ended |
Dec. 31, 2020USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
offering period | 4 years |
Issue price (percentage) | 95.00% |
Maximum annual employees contribution | $ 15,000 |
Cash received for shares issued | $ 76,000 |
Shares issued | shares | 15,132 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service period | 1 year |
EQUITY-BASED COMPENSATION - Pha
EQUITY-BASED COMPENSATION - Phantom unit awards (Details) | Dec. 31, 2018$ / shares |
EQUITY-BASED COMPENSATION | |
Underlying equity | $ 20.50 |
EQUITY-BASED COMPENSATION - Sha
EQUITY-BASED COMPENSATION - Share-repurchases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Decrease in paid-in capital | $ 10,876,000 | $ 18,600,000 | $ 16,562,000 |
2016 plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares repurchased in open market | 1,989,440 | 2,180,806 | |
Number of shares repurchased with employee minimum tax withholding requirements | 210,384 | 108,074 | |
Decrease in paid-in capital | $ 12,300,000 | ||
Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares repurchased in open market | 2,199,824 | 2,288,880 | 1,766,428 |
Decrease in paid-in capital | $ 22,000 | $ 23,000 | $ 17,000 |
Class A Common Stock | 2016 plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Decrease in Class A common stock | $ 22,000 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers into Level3 | $ 0 | $ 0 | $ 0 | ||
Transfers out of Level3 | 0 | 0 | 0 | ||
Impairment of Goodwill | $ 0 | 266,934 | 4,396 | ||
Impairment of property and equipment | 7,910 | 3,715 | 6,657 | ||
Impairment of investments | $ 2,000 | 2,000 | |||
Recurring | September 30 | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Investments | 1,768 | ||||
Recurring | December 31 | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Investments | 3,377 | ||||
Nonrecurring | March 31 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cost-Method Investment | 2,000 | ||||
Impairment of Goodwill | 266,934 | 4,396 | |||
Impairment of Trademark | 9,082 | ||||
Impairment of property and equipment | 3,184 | 519 | |||
Nonrecurring | March 31 | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 266,934 | 4,396 | |||
Trademark | 23,442 | ||||
Cost-Method Investment | 2,500 | ||||
Property and equipment. | 3,360 | 2,865 | |||
Nonrecurring | June 30 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of property and equipment | 4,726 | 374 | 2,282 | ||
Nonrecurring | June 30 | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Property and equipment. | 4,726 | 2,760 | 2,282 | ||
Nonrecurring | September 30 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of property and equipment | 49 | ||||
Nonrecurring | September 30 | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Property and equipment. | 87 | ||||
Nonrecurring | December 31 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of Goodwill | 17,894 | ||||
Impairment of property and equipment | 2,773 | 4,375 | |||
Nonrecurring | December 31 | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 24,894 | ||||
Property and equipment. | 5,328 | 14,637 | |||
Level 1 | Recurring | December 31 | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Investments | 3,377 | ||||
Level 2 | Recurring | September 30 | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Investments | 1,768 | ||||
Level 3 | Nonrecurring | March 31 | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Trademark | 14,360 | ||||
Cost-Method Investment | 500 | ||||
Property and equipment. | $ 176 | 2,346 | |||
Level 3 | Nonrecurring | June 30 | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Property and equipment. | 2,386 | ||||
Level 3 | Nonrecurring | September 30 | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Property and equipment. | 38 | ||||
Level 3 | Nonrecurring | December 31 | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 7,000 | ||||
Property and equipment. | $ 2,555 | $ 10,262 |
FAIR VALUE MEASUREMENT - Nonmon
FAIR VALUE MEASUREMENT - Nonmonetary transaction (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Exchange for accounts receivable | $ 1.6 |
Prepaid Expenses and Other Current Assets | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
common stock and related securities prepaid expenses | 3.4 |
Other Nonoperating Income (Expense) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Unrealized gains/losses | $ 1.8 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS | |||
Sales to related parties | $ 3.9 | $ 16.8 | $ 8.3 |
Purchases from related party vendors | $ 7.3 | 18.8 | 16.7 |
Minimum | |||
RELATED PARTY TRANSACTIONS | |||
Beneficial ownership (as a percent) | 5.00% | ||
Tax Receivable Agreement | Legacy Owner Holdco and Crestview GP | |||
RELATED PARTY TRANSACTIONS | |||
Percentage of net tax savings for payment to TRA Holders | 85.00% | ||
Tax Receivable Agreement | Contributing Legacy Owners | |||
RELATED PARTY TRANSACTIONS | |||
Percentage of net tax savings for payment to TRA Holders | 85.00% | ||
Property and equipment | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | $ 0.5 | 3 | 4.7 |
Inventory and consumables | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | 0.1 | 0.2 | 0.3 |
Rent of certain equipment or other services | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | 6.3 | 14.3 | 10.3 |
Management, consulting and other services | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | 0.4 | $ 1.3 | $ 1.4 |
Notes receivable with affiliates | |||
RELATED PARTY TRANSACTIONS | |||
Investment in note receivable | $ 3 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
INCOME TAXES | |||||||
Effective Income tax (as percent) | 0.40% | 32.00% | 3.00% | ||||
Statutory tax rate (as a percent) | 21.00% | 35.00% | 21.00% | 21.00% | 21.00% | ||
Tax benefit (expense) | $ 500 | $ 600 | $ (1,476) | $ 1,949 | $ 1,704 | ||
Current tax (benefit) expense | |||||||
Federal income tax (benefit) expense | (941) | 696 | 1,073 | ||||
State and local income tax (benefit) expense | (439) | 1,034 | 1,077 | ||||
Total current (benefit) expense | (1,380) | 1,730 | 2,150 | ||||
Deferred tax (benefit) expense | |||||||
Federal income tax (benefit) expense | (105) | 49 | (20) | ||||
State and local income tax expense (benefit) | 9 | 170 | (426) | ||||
Total deferred (benefit) expense | (96) | 219 | (446) | ||||
Total income tax (benefit) expense | 500 | 600 | (1,476) | 1,949 | 1,704 | ||
Tax (benefit) expense attributable to controlling interests | (1,246) | 1,488 | 1,425 | ||||
Income tax (benefit) expense attributable to noncontrolling interests | (230) | 461 | 279 | ||||
Provision calculated at federal statutory income tax rate: | |||||||
(Loss) income before taxes | $ (403,208) | $ 6,085 | $ 56,003 | ||||
Statutory rate | 21.00% | 35.00% | 21.00% | 21.00% | 21.00% | ||
Income tax (benefit) expense computed at statutory rate | $ (84,674) | $ 1,278 | $ 11,761 | ||||
Less: noncontrolling interests | 13,272 | (284) | (3,735) | ||||
Income tax (benefit) expense attributable to controlling interests | (71,402) | 994 | 8,026 | ||||
State and local income taxes, net of federal benefit | (430) | 884 | 515 | ||||
Change in subsidiary tax status | (409) | 587 | |||||
CARES Act NOL carryback benefit | (459) | ||||||
Change in valuation allowance | 71,454 | (1,833) | (7,696) | ||||
Deferred adjustment due to restructuring | 856 | ||||||
Other | 580 | ||||||
Income tax (benefit) expense attributable to controlling interests | (1,246) | 1,488 | 1,425 | ||||
Income tax (benefit) expense attributable to noncontrolling interests | (230) | 461 | 279 | ||||
Total income tax (benefit) expense | $ 500 | $ 600 | $ (1,476) | $ 1,949 | $ 1,704 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | ||
Outside basis difference in SES Holdings | $ 78,918 | $ 27,935 |
Federal net operating loss carryforward | 69,601 | 46,782 |
Federal net operating loss carryforward expires beginning in 2031 | 133,800 | |
Federal net operating loss carry forward with no expiration | 157,800 | |
State NOLs | 128,100 | |
Foreign NOLs | 6,500 | |
Credits and other carryforwards | 4,111 | 1,451 |
Other | 541 | 944 |
Total deferred tax assets before valuation allowance | 153,171 | 77,112 |
Valuation allowance | (152,659) | (76,883) |
Total deferred tax assets | 512 | 229 |
Deferred tax liabilities | ||
Property and equipment | 718 | 540 |
Other | 41 | 32 |
Total deferred tax liabilities | 759 | 572 |
Net deferred tax (liabilities) | $ (247) | $ (343) |
INCOME TAXES - Valuation allowa
INCOME TAXES - Valuation allowance (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Change in valuation allowance | |||||
Change during the year | $ 75.8 | ||||
Net operating loss carryforward | $ 291.6 | ||||
Statutory rate | 21.00% | 35.00% | 21.00% | 21.00% | 21.00% |
Liability or expense | $ 0 | $ 0 |
NONCONTROLLING INTERESTS (Detai
NONCONTROLLING INTERESTS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
NONCONTROLLING INTERESTS | ||
Noncontrolling interests attributable to joint ventures formed for water-related services | $ 2,002 | $ 2,674 |
Noncontrolling interests attributable to holders of Class B Common Stock | 110,819 | 172,961 |
Total noncontrolling interests | $ 112,821 | $ 175,635 |
NONCONTROLLING INTERESTS - Effe
NONCONTROLLING INTERESTS - Effect of Changes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effects of changes in noncontrolling interests on equity | |||||||||||
Net (loss) income attributable to Select Energy Services, Inc. | $ (17,983) | $ (30,541) | $ (44,298) | $ (245,862) | $ (9,930) | $ 5,379 | $ 6,200 | $ 1,135 | $ (338,684) | $ 2,784 | $ 36,512 |
Transfers (to) from noncontrolling interests: | |||||||||||
Noncontrolling interest in subsidiary | 200 | 400 | |||||||||
Increase in additional paid-in capital as a result of stock option exercises | 54 | 374 | |||||||||
Increase in additional paid-in capital as a result of restricted stock issuance, net of forfeitures | 1,874 | 3,614 | 1,942 | ||||||||
Increase in additional paid-in capital as a result of issuance of common stock due to vesting of restricted stock units | 1 | 4 | 104 | ||||||||
Decrease in additional paid-in capital as a result of the repurchase of SES Holdings LLC Units | (1,416) | (3,362) | (576) | ||||||||
Increase in additional paid-in capital as a result of exchanges of SES Holdings LLC Units (an equivalent number of shares of Class B Common Stock) for shares of Class A Common Stock | 107,062 | 146,865 | |||||||||
Increase (decrease) in additional paid-in capital as a result of the Employee Stock Purchase Plan shares issued | 7 | 42 | 15 | ||||||||
Change to equity from net (loss) income attributable to Select Energy Services, Inc. and transfers from noncontrolling interests | $ (338,218) | $ 110,198 | $ 185,236 |
(LOSS) EARNINGS PER SHARE (Deta
(LOSS) EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Calculation of basic and diluted earnings per share: | |||||||||||
Antidilutive shares | 3,519,159 | 2,961,439 | |||||||||
Net (loss) income | $ (21,208) | $ (36,260) | $ (53,044) | $ (291,220) | $ (12,504) | $ 7,172 | $ 8,068 | $ 1,400 | $ (401,732) | $ 4,136 | $ 54,299 |
Net (loss) income attributable to noncontrolling interests | 63,048 | (1,352) | (17,787) | ||||||||
Net (loss) income attributable to Select Energy Services, Inc. | $ (17,983) | $ (30,541) | $ (44,298) | $ (245,862) | $ (9,930) | $ 5,379 | $ 6,200 | $ 1,135 | (338,684) | 2,784 | 36,512 |
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units | 2 | ||||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock | 7 | 13 | |||||||||
Add: Reallocation of net loss (income) attributable to noncontrolling interests for the dilutive effect of stock options | 1 | 30 | |||||||||
Net (loss) income attributable to Select Energy Services, Inc. - diluted | (338,684) | 2,794 | 36,555 | ||||||||
Class A Common Stock | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Net (loss) income attributable to Select Energy Services, Inc. | (338,684) | 2,784 | 35,720 | ||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units | 2 | ||||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock | 7 | 13 | |||||||||
Add: Reallocation of net loss (income) attributable to noncontrolling interests for the dilutive effect of stock options | 1 | 30 | |||||||||
Net (loss) income attributable to Select Energy Services, Inc. - diluted | $ (338,684) | $ 2,794 | $ 35,763 | ||||||||
Weighted-average shares of common stock outstanding - basic | 85,158,764 | 80,176,323 | 72,403,318 | ||||||||
Dilutive effect of restricted stock | 373,366 | 71,718 | |||||||||
Dilutive effect of performance share units | 80,979 | ||||||||||
Dilutive effect of stock options | 40,215 | 166,999 | |||||||||
Dilutive effect of ESPP | 446 | 112 | |||||||||
Weighted-average shares of common stock outstanding - diluted | 85,158,764 | 80,671,329 | 72,642,147 | ||||||||
Earnings (loss) per share, Basic (in dollars per share) | $ (3.98) | $ 0.03 | $ 0.49 | ||||||||
Earnings (loss) per share, Diluted (in dollars per share) | $ (3.98) | $ 0.03 | $ 0.49 | ||||||||
Class A-2 Common Stock | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Net (loss) income attributable to Select Energy Services, Inc. | $ 792 | ||||||||||
Net (loss) income attributable to Select Energy Services, Inc. - diluted | $ 792 | ||||||||||
Weighted-average shares of common stock outstanding - basic | 1,604,575 | ||||||||||
Weighted-average shares of common stock outstanding - diluted | 1,604,575 | ||||||||||
Earnings (loss) per share, Basic (in dollars per share) | $ 0.49 | ||||||||||
Earnings (loss) per share, Diluted (in dollars per share) | $ 0.49 | ||||||||||
Class B Common Stock | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Weighted-average shares of common stock outstanding - basic | 16,221,101 | 23,806,646 | 31,986,438 | ||||||||
Weighted-average shares of common stock outstanding - diluted | 16,221,101 | 23,806,646 | 31,986,438 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($)segment | Dec. 31, 2020segment | |
SEGMENT INFORMATION | ||||||||||||
Number of operating segments | segment | 3 | |||||||||||
Number of reportable segments | segment | 3 | 3 | 3 | 3 | ||||||||
Segment information | ||||||||||||
Revenue | $ 133,339 | $ 101,242 | $ 92,239 | $ 278,285 | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 605,105 | $ 1,291,589 | $ 1,528,930 | |
Income (loss) before taxes | (403,208) | 6,085 | 56,003 | |||||||||
Depreciation and Amortization | 101,672 | 120,669 | 133,713 | |||||||||
Capital Expenditures | 16,500 | 102,705 | 172,132 | |||||||||
(Loss) income from operations | $ (21,929) | $ (34,212) | $ (47,805) | $ (290,831) | $ (7,213) | $ 12,475 | $ 11,179 | $ 6,633 | (394,777) | 23,074 | 61,674 | |
Other expense, net | (3,519) | (2,948) | (2,872) | |||||||||
Other | ||||||||||||
Segment information | ||||||||||||
Revenue | 33,365 | 144,499 | ||||||||||
Income (loss) before taxes | (733) | (8,066) | (14,021) | |||||||||
Depreciation and Amortization | 1,714 | 14,124 | ||||||||||
Capital Expenditures | 330 | 64 | 7,045 | |||||||||
Operating segment | Water Services | ||||||||||||
Segment information | ||||||||||||
Revenue | 322,461 | 773,946 | 897,160 | |||||||||
Income (loss) before taxes | (250,779) | 51,185 | 89,826 | |||||||||
Depreciation and Amortization | 61,758 | 80,664 | 82,875 | |||||||||
Capital Expenditures | 2,161 | 37,692 | 120,883 | |||||||||
Operating segment | Water Infrastructure | ||||||||||||
Segment information | ||||||||||||
Revenue | 125,710 | 221,661 | 230,130 | |||||||||
Income (loss) before taxes | (96,290) | 15,103 | 31,579 | |||||||||
Depreciation and Amortization | 27,599 | 25,665 | 23,042 | |||||||||
Capital Expenditures | 6,852 | 53,839 | 33,372 | |||||||||
Operating segment | Oilfield Chemicals | ||||||||||||
Segment information | ||||||||||||
Revenue | 160,825 | 268,963 | 260,281 | |||||||||
Income (loss) before taxes | (13,365) | 17,942 | (7,107) | |||||||||
Depreciation and Amortization | 9,443 | 8,766 | 10,496 | |||||||||
Capital Expenditures | 7,157 | 11,110 | 10,832 | |||||||||
Elimination | ||||||||||||
Segment information | ||||||||||||
Revenue | (3,891) | (6,346) | (3,140) | |||||||||
Corporate | ||||||||||||
Segment information | ||||||||||||
Income (loss) before taxes | (33,610) | (53,090) | (38,603) | |||||||||
Depreciation and Amortization | 2,872 | 3,860 | 3,176 | |||||||||
Material reconciling items | ||||||||||||
Segment information | ||||||||||||
(Loss) income from operations | (361,167) | 76,164 | 100,277 | |||||||||
Interest expense, net | (2,136) | (2,688) | (5,311) | |||||||||
Other expense, net | $ (6,295) | $ (14,301) | $ (360) |
SEGMENT INFORMATION - Total Ass
SEGMENT INFORMATION - Total Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Assets | $ 875,359 | $ 1,347,620 |
Operating segment | Water Services | ||
Segment Reporting Information [Line Items] | ||
Assets | 515,856 | 831,123 |
Operating segment | Water Infrastructure | ||
Segment Reporting Information [Line Items] | ||
Assets | 204,995 | 314,026 |
Operating segment | Oilfield Chemicals | ||
Segment Reporting Information [Line Items] | ||
Assets | 147,612 | 192,224 |
Operating segment | Other | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 6,896 | $ 10,247 |
SEGMENT INFORMATION - Revenue b
SEGMENT INFORMATION - Revenue by product (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 133,339 | $ 101,242 | $ 92,239 | $ 278,285 | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 605,105 | $ 1,291,589 | $ 1,528,930 |
Oilfield chemicals | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 160,825 | 268,963 | 260,281 | ||||||||
Water transfer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 146,728 | 355,535 | 443,650 | ||||||||
Pipeline logistics and disposal | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 91,971 | 101,145 | 100,172 | ||||||||
Accommodations and rentals | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 62,593 | 150,793 | 153,013 | ||||||||
Accommodations and rentals | ASC 842 | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 28,400 | 69,000 | 67,200 | ||||||||
Flowback and well testing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 61,839 | 208,572 | 223,828 | ||||||||
Fluid hauling | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 52,748 | 63,156 | 79,568 | ||||||||
Water Sourcing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 33,739 | 120,517 | 129,958 | ||||||||
Eliminations and other service lines | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ (5,338) | $ 22,908 | $ 138,460 |
SEGMENT INFORMATION - Other dis
SEGMENT INFORMATION - Other disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 133,339 | $ 101,242 | $ 92,239 | $ 278,285 | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 605,105 | $ 1,291,589 | $ 1,528,930 |
Geographic concentration risk | UNITED STATES | Revenue | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 605,100 | $ 1,283,400 | $ 1,480,400 | ||||||||
Concentration risk (as a percent) | 100.00% | 99.40% | 96.80% | ||||||||
Geographic concentration risk | UNITED STATES | Long Lived Asset | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Long-lived assets | $ 350,400 | 452,400 | $ 350,400 | $ 452,400 | $ 492,400 | ||||||
Concentration risk (as a percent) | 100.00% | 99.80% | 97.90% | ||||||||
Geographic concentration risk | CANADA | Revenue | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 8,200 | $ 48,600 | |||||||||
Concentration risk (as a percent) | 0.60% | 3.20% | |||||||||
Geographic concentration risk | CANADA | Long Lived Asset | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Long-lived assets | $ 900 | $ 900 | $ 10,500 | ||||||||
Concentration risk (as a percent) | 0.20% | 2.10% |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |||||||||||
Revenue | $ 133,339 | $ 101,242 | $ 92,239 | $ 278,285 | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 605,105 | $ 1,291,589 | $ 1,528,930 |
Gross profit (loss) | (3,942) | (16,900) | (23,719) | 15,296 | 21,810 | 40,994 | 39,939 | 45,997 | (29,265) | 148,740 | 198,482 |
Income (loss) from operations | (21,929) | (34,212) | (47,805) | (290,831) | (7,213) | 12,475 | 11,179 | 6,633 | (394,777) | 23,074 | 61,674 |
Net (loss) income | (21,208) | (36,260) | (53,044) | (291,220) | (12,504) | 7,172 | 8,068 | 1,400 | (401,732) | 4,136 | 54,299 |
Net (loss) income attributable to Select Energy Services, Inc. | $ (17,983) | $ (30,541) | $ (44,298) | $ (245,862) | $ (9,930) | $ 5,379 | $ 6,200 | $ 1,135 | (338,684) | 2,784 | 36,512 |
Class A Common Stock | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||
Net (loss) income attributable to Select Energy Services, Inc. | $ (338,684) | $ 2,784 | 35,720 | ||||||||
Net income (loss) per share attributable to common stockholders: | |||||||||||
Basic & Diluted | $ (0.21) | $ (0.36) | $ (0.52) | $ (2.86) | $ (0.12) | $ 0.07 | $ 0.08 | $ 0.01 | |||
Class A-2 Common Stock | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||
Net (loss) income attributable to Select Energy Services, Inc. | $ 792 |