ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.001 par value
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OTCQB
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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ý
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Emerging growth company
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¨
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Item 2
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•
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the expected timing and benefits of our contemplated restructuring under chapter 11 of the United States Bankruptcy Code to improve our long-term capital structure;
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•
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our ability to continue operations without interruption prior to and throughout a chapter 11 proceeding;
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•
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our ability to continue to meet the needs of our employees, customers, and vendors;
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•
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our ability to successfully commence and consummate the restructuring transactions;
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•
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our limited liquidity to meet debt obligations and operating needs;
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•
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future financial performance and growth targets or expectations;
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•
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market and industry trends and developments, including the prolonged decline in oil and natural gas prices; and
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•
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the potential benefits of our completed and any future merger, acquisition, disposition, restructuring, and financing transactions.
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•
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risks and uncertainties associated with the restructuring process, including our inability to obtain confirmation of a plan under chapter 11 of the United States Bankruptcy Code;
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•
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failure to implement the restructuring to improve our liquidity and long-term capital structure, and to address our debt service obligations;
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•
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the current default under our asset-based revolving credit facility and related cross-defaults under our term loan and indentures governing our notes;
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•
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the potential that the holders of our indebtedness may initiate foreclosure actions;
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•
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failure to make the scheduled interest payments under the agreements governing our debt obligations, including the upcoming interest payments on our notes;
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•
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failure to timely satisfy certain conditions and milestones under the restructuring support agreement;
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•
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our inability to maintain relationships with suppliers, customers, employees and other third parties as a result of our chapter 11 filing;
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•
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difficulties encountered in restructuring our debt in the chapter 11 bankruptcy proceeding, including our ability to obtain approval of the bankruptcy court with respect to motions or other requests made to the bankruptcy court, including maintaining strategic control as debtor-in-possession;
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•
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the effects of the restructuring on the Company and the interests of various constituents, including the holders of our common stock and notes;
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•
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the length of time that the Company will operate under chapter 11 protection and the availability of financing during the pendency of the proceedings;
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•
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the potential adverse effects of the chapter 11 proceedings on our liquidity and results of operations;
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•
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increased advisory costs to execute a reorganization;
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•
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risks of successfully consummating the restructuring within the time frames or on the terms contemplated;
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•
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the ability to successfully consummate the bankruptcy proceeding;
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•
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risks associated with our indebtedness, including changes to interest rates, deterioration in the value of our machinery and equipment or accounts receivables, our ability to manage our liquidity needs and to comply with covenants under our credit facilities, including the indentures governing our notes;
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•
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financial results that may be volatile and may not reflect historical trends due to, among other things, changes in commodity prices or general market conditions, acquisition and disposition activities, fluctuations in consumer trends, pricing pressures, changes in raw material or labor prices or rates related to our business and changing regulations or political developments in the markets in which we operate;
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•
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risks associated with our ability to collect outstanding receivables as a result of liquidity constraints on our customers resulting from low oil and/or natural gas prices;
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•
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the availability of less favorable credit and payment terms due to the downturn in our industry and our financial condition, including more stringent or costly payment terms from our vendors and additional requirements from sureties to collateralize our performance bonds with letters of credit, which may further constrain our liquidity and reduce availability under our revolving credit facility;
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•
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risks associated with our capital structure, including our ability to restructure our indebtedness to access necessary funding to generate sufficient operating cash flow to meet our debt service obligations;
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•
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changes in customer drilling, completion and production activities, operating methods and capital expenditure plans, including impacts due to low oil and/or natural gas prices or the economic or regulatory environment;
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•
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difficulties in identifying and completing acquisitions and divestitures, and differences in the type and availability of consideration or financing for such acquisitions and divestitures;
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•
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difficulties in successfully executing our growth initiatives, including difficulties in permitting, financing and constructing pipelines and waste treatment assets and in structuring economically viable agreements with potential customers, joint venture partners, financing sources and other parties;
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•
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our ability to attract, motivate and retain key executives and qualified employees in key areas of our business;
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•
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fluctuations in prices, transportation costs and demand for commodities such as oil and natural gas;
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•
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risks associated with the operation, construction and development of saltwater disposal wells, solids and liquids treatment and transportation assets, landfills and pipelines, including access to additional locations and rights-of-way, environmental remediation obligations, unscheduled delays or inefficiencies and reductions in volume due to micro- and macro-economic factors or the availability of less expensive alternatives;
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•
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risks associated with new technologies and the impact on our business;
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•
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the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets;
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•
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changes in economic conditions in the markets in which we operate or in the world generally, including as a result of political uncertainty;
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reduced demand for our services due to regulatory or other influences related to extraction methods such as hydraulic fracturing, shifts in production among shale areas in which we operate or into shale areas in which we do not currently have operations or the loss of key customers;
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•
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the impact of changes in laws and regulation on waste management and disposal activities, including those impacting the delivery, storage, collection, transportation, treatment and disposal of waste products, as well as the use or reuse of recycled or treated products or byproducts;
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control of costs and expenses;
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•
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present and possible future claims, litigation or enforcement actions or investigations;
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•
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natural disasters, such as hurricanes, earthquakes and floods, or acts of terrorism, or extreme weather conditions, that may impact our business locations, assets, including wells or pipelines, distribution channels, or which otherwise disrupt our or our customers’ operations or the markets we serve;
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•
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the threat or occurrence of international armed conflict;
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•
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the unknown future impact on our business from legislation and governmental rulemaking, including the Affordable Care Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules to be promulgated thereunder;
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•
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risks involving developments in environmental or other governmental laws and regulations in the markets in which we operate and our ability to effectively respond to those developments including laws and regulations relating to oil and natural gas extraction businesses, particularly relating to water usage, and the disposal, transportation and treatment of liquid and solid wastes; and
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•
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other risks identified in this Annual Report or referenced from time to time in our filings with the United States Securities and Exchange Commission.
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Logistics
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Disposal
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Treatment
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Water Midstream
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Solutions
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-Delivery of fresh water and (beginning in 2017) proppant to drilling sites
-Delivery of drilling mud
-Water procurement
-Staging and storage of equipment and materials
-Rental of wellsite equipment
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-Liquid waste from hydraulic fracturing
-Liquid waste from ongoing well production
-Solid drilling waste
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-Liquid and solid waste from drilling, completion and ongoing well production
-Separation of hydrocarbons from oily waste water
-Recycling of produced water for reuse in well completion activities
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-Collection and transportation of produced water from wellsites to disposal network via fixed pipeline system
-Supplying fresh water for drilling and completion via pipeline system
-Gathering systems for collection and transportation of flowback and produced water to disposal wells
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Assets
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-More than 760 trucks
-Approximately 5,220 tanks
-60 miles of produced water collection pipeline
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-Appalachian Water Services, LLC (“AWS”) plant: a wastewater treatment recycling facility designed to treat and recycle water involved in the hydraulic fracturing process in the Marcellus Shale area
-Thermal treatment assets for solid drilling waste
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-50 liquid waste disposal wells
-Solid waste landfill
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•
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Oil shale areas
: includes our operations in the Bakken and Eagle Ford Shale areas. During
2016
,
61%
of our revenues from continuing operations were derived from these shale areas.
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•
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Natural gas shale areas
: includes our operations in the Marcellus, Utica, and Haynesville Shale areas. During
2016
,
39%
of our revenues from continuing operations were derived from these shale areas.
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•
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Northeast Division
: comprising the Marcellus and Utica Shale areas;
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•
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Southern Division
: comprising the Haynesville and Eagle Ford Shale areas; and
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•
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Rocky Mountain Division
: comprising the Bakken Shale area.
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The Bakken and underlying Three Forks formations are the two primary reservoirs currently being developed in the Williston Basin, which covers most of western North Dakota, eastern Montana, northwest South Dakota and southern Saskatchewan. The Bakken formation occupies approximately 200,000 square miles of the subsurface of the Williston Basin in Montana, North Dakota and Saskatchewan. The Three Forks formation lies directly below North Dakota’s portion of the Bakken formation, where oil-producing rock is located between layers of shale approximately two miles underground. According to the
Assumptions to the Annual Energy Outlook 2016
report issued in January of 2017 by the United States Energy Information Administration (or the "EIA") with data as of January 1, 2014, the Bakken and Three Forks Shale formations in North Dakota, South Dakota, and Montana contain an estimated 22.7 billion barrels of technically recoverable oil reserves. According to the EIA's
Monthly Crude Oil Production
data, the Bakken Shale area is one of the most actively drilled unconventional resources in North America, with North Dakota crude oil production averaging 1.0 million barrels per day during 2016.
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The Marcellus Shale area is located in the Appalachian Basin in the Northeastern United States, primarily in Pennsylvania, West Virginia, New York and Ohio. The Marcellus Shale is the largest natural gas field in North America with approximately 214.2 trillion cubic feet (or "Tcf") of technically recoverable natural gas, according to the EIA's report issued in January of 2017 with data as of January 1, 2014.
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Adjacent to the Marcellus Shale is the Utica Shale, located primarily in southwestern Pennsylvania and eastern Ohio. Still in the early stages of development, the Utica Shale play has three identified areas: oil, condensate and dry natural gas. According to the EIA's report issued in January of 2017 with data as of January 1, 2014, the Utica Shale is estimated to have approximately 188.6 Tcf of technically recoverable natural gas and 2.0 billion barrels of technically recoverable oil reserves.
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•
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The Haynesville Shale area is located across northwest Louisiana and east Texas, and extends into Arkansas. The Haynesville Shale area is the third largest natural gas-producing basin in North America, with an estimated 80.3 Tcf of technically recoverable natural gas according to the EIA's report issued in January of 2017 with data as of January 1, 2014.
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•
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The Eagle Ford Shale area is a natural gas and oil play located across southern Texas. The play contains a high liquid component, which has led to the definition of three areas: oil, condensate and dry gas. The Eagle Ford Shale is estimated to have approximately 51.4 Tcf of technically recoverable natural gas and 15.3 billion barrels of technically recoverable oil reserves, according to the EIA's report issued in January of 2017 with data as of January 1, 2014.
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our ability to prosecute, confirm and consummate a plan of reorganization with respect to the chapter 11 proceedings;
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•
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the high costs of bankruptcy and related fees;
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•
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our ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute our business plan post-emergence;
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•
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our ability to maintain our relationships with our suppliers, service providers, customers, employees, and other third parties;
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•
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our ability to maintain contracts that are critical to our operations;
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•
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our ability to execute our business plan in the current depressed commodity price environment; and
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•
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the actions and decisions of our debtholders and other third parties who have interests in our chapter 11 proceedings that may be inconsistent with our plans.
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•
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we acted in accordance with the applicable provisions of the Bankruptcy Code; and
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the plan of reorganization has been proposed in good faith and not by any means forbidden by law.
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incur additional debt;
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•
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repurchase our indebtedness;
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pay dividends, redeem stock or make other distributions;
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•
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make other restricted payments and investments;
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•
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create liens;
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enter into sale and leaseback transactions;
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merge, consolidate or transfer or dispose of substantially all of our assets; and
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enter into certain types of transactions with affiliates.
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•
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the domestic and worldwide price and supply of gas, natural gas liquids and oil, including the natural gas inventories and oil reserves of the United States;
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•
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changes in the level of consumer demand;
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•
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the price and availability of alternative fuels;
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•
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weather conditions;
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•
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the availability, proximity and capacity of pipelines, other transportation facilities and processing facilities;
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•
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the level and effect of trading in commodity futures markets, including by commodity price speculators and others;
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•
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the nature and extent of domestic and foreign governmental regulations and taxes;
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•
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actions of the members of the Organization of the Petroleum Exporting Countries or "OPEC," relating to oil price and production controls;
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•
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the level of excess production and projected rates of production growth;
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•
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geo-political instability or armed conflict in oil and natural gas producing regions; and
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•
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overall domestic and global economic and market conditions.
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•
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personal injury or loss of life;
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•
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liabilities from pipeline breaks and accidents by our fleet of trucks and other equipment;
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•
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damage to or destruction of property, equipment and the environment; and
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•
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the suspension of operations.
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•
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variations in our quarterly operating results and changes in our liquidity position;
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•
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changes in securities analysts’ estimates of our financial performance;
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•
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inaccurate or negative comments about us on social networking websites or other media channels;
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•
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changes in market valuations of similar companies;
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•
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announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new products or product enhancements, as well as our or our competitors’ success or failure in successfully executing such matters;
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•
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announcements by us of strategic plans to restructure our indebtedness or of a bankruptcy filing;
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•
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changes in the price of oil and natural gas;
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•
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loss of a major customer or failure to complete significant transactions; and
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•
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additions or departures of key personnel.
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•
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authorizing the issuance of “blank check” preferred stock without any need for action by shareholders;
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•
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establishing a classified board of directors, so that only approximately one-third of our directors are elected each year;
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•
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providing our board of directors with the ability to set the number of directors and to fill vacancies on the board of directors occurring between shareholder meetings;
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•
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providing that directors may only be removed for “cause” and only by the affirmative vote of the holders of at least a majority in voting power of our issued and outstanding capital stock; and
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•
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limiting the ability of our shareholders to call special meetings.
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For the Year Ending December 31, 2015
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High
|
|
Low
|
||||
First Quarter
|
|
$
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5.73
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|
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$
|
1.65
|
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Second Quarter
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$
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6.78
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|
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$
|
3.45
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Third Quarter
|
|
$
|
6.29
|
|
|
$
|
1.26
|
|
Fourth Quarter
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|
$
|
2.28
|
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$
|
0.41
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|
|
|
|
|
|
||||
For the Year Ending December 31, 2016
|
|
High
|
|
Low
|
||||
First Quarter
|
|
$
|
0.55
|
|
|
$
|
0.13
|
|
Second Quarter
|
|
$
|
0.45
|
|
|
$
|
0.22
|
|
Third Quarter
|
|
$
|
0.30
|
|
|
$
|
0.17
|
|
Fourth Quarter
|
|
$
|
0.27
|
|
|
$
|
0.14
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share (1)
|
|||
January 1, 2016 to January 31, 2016
|
|
14,612
|
|
|
$
|
0.30
|
|
February 1, 2016 to February 29, 2016
|
|
862
|
|
|
0.33
|
|
|
March 1, 2016 to March 31, 2016
|
|
2,177
|
|
|
0.32
|
|
|
April 1, 2016 to April 30, 2016
|
|
4,354
|
|
|
0.26
|
|
|
May 1, 2016 to May 31, 2016
|
|
1,253
|
|
|
0.27
|
|
|
June 1, 2016 to June 30, 2016
|
|
109
|
|
|
0.22
|
|
|
July 1, 2016 to July 31, 2016
|
|
—
|
|
|
—
|
|
|
August 1, 2016 to August 31, 2016
|
|
570
|
|
|
0.25
|
|
|
September 1, 2016 to September 30, 2016
|
|
—
|
|
|
—
|
|
|
October 1, 2016 to October 31, 2016
|
|
60
|
|
|
0.24
|
|
|
November 1, 2016 to November 30, 2016
|
|
804
|
|
|
0.15
|
|
|
December 1, 2016 to December 31, 2016
|
|
—
|
|
|
—
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|
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Total shares repurchased and total average price per share
|
|
24,801
|
|
|
$
|
0.29
|
|
Company / Index
|
|
January 1,
2012
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December 30,
2012
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|
December 31,
2013
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December 31,
2014
|
|
December 30,
2015
|
|
December 31,
2016
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||||||||||||
NES
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$
|
100.00
|
|
|
$
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60.60
|
|
|
$
|
25.25
|
|
|
$
|
8.35
|
|
|
$
|
0.77
|
|
|
$
|
0.27
|
|
Russell 2000 Index
|
|
100.00
|
|
|
116.70
|
|
|
161.86
|
|
|
170.02
|
|
|
162.40
|
|
|
194.46
|
|
||||||
Peer Group
|
|
100.00
|
|
|
58.81
|
|
|
91.70
|
|
|
65.21
|
|
|
55.20
|
|
|
71.53
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
($ in thousands, except per share data)
|
||||||||||||||||||
Total revenue
|
|
$
|
152,176
|
|
|
$
|
356,699
|
|
|
$
|
536,282
|
|
|
$
|
525,816
|
|
|
$
|
256,671
|
|
Loss from operations (1)(2)(3)(4)(5)
|
|
(117,388
|
)
|
|
(144,839
|
)
|
|
(417,654
|
)
|
|
(149,659
|
)
|
|
(37,574
|
)
|
|||||
Loss from continuing operations (1)(2)(3)(4)(5)
|
|
(167,621
|
)
|
|
(195,167
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)
|
|
(457,178
|
)
|
|
(134,040
|
)
|
|
(6,597
|
)
|
|||||
(Loss) income from discontinued operations, net of income taxes (3)(4)
|
|
(1,235
|
)
|
|
(287
|
)
|
|
(58,426
|
)
|
|
(98,251
|
)
|
|
9,124
|
|
|||||
Net (loss) income attributable to common shareholders
|
|
(168,856
|
)
|
|
(195,454
|
)
|
|
(515,604
|
)
|
|
(232,291
|
)
|
|
2,527
|
|
|||||
Weighted average shares outstanding used in computing net (loss) income per basic and diluted common share
|
|
90,979
|
|
|
27,681
|
|
|
26,090
|
|
|
24,492
|
|
|
14,994
|
|
|||||
Basic and diluted loss per share from continuing operations
|
|
(1.84
|
)
|
|
(7.05
|
)
|
|
(17.52
|
)
|
|
(5.47
|
)
|
|
(0.44
|
)
|
|||||
Basic and diluted (loss) income per share from discontinued operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(2.24
|
)
|
|
(4.01
|
)
|
|
0.61
|
|
|||||
Net (loss) income per basic and diluted share
|
|
(1.85
|
)
|
|
(7.06
|
)
|
|
(19.76
|
)
|
|
(9.48
|
)
|
|
0.17
|
|
(1)
|
Loss from operations and loss from continuing operations for the year ended December 31, 2016 includes long-lived asset impairment charges of
$42.2 million
and $14.3 million in costs incurred in connection with our capital restructuring transactions during 2016, which are described in more detail in
Note 6
and
Note 9
in the Notes to the Consolidated Financial Statements herein, respectively.
|
(2)
|
Loss from operations and loss from continuing operations for the year ended December 31, 2015 includes a goodwill impairment charge of $104.7 million, restructuring charges of $7.1 million, approximately $1.4 million in litigation and environmental charges and the write-off of a portion of the unamortized debt issuance costs associated with amendments to our ABL Facility of approximately $2.1 million.
|
(3)
|
Loss from operations and loss from continuing operations for the year ended December 31, 2014 includes a goodwill impairment charge of $304.0 million, a long-lived asset impairment charge of $112.4 million, approximately $8.8 million in litigation and environmental charges and the write-off of a portion of the unamortized debt issuance costs of approximately $3.2 million. Additionally, as a result of the on-going sales process of our industrial solutions division, we recorded charges totaling $74.4 million, which is included within "Loss from discontinued operations, net of income taxes" in our consolidated statement of operations herein.
|
(4)
|
During the fourth quarter of 2013, our board of directors approved and committed to a plan to divest our Thermo Fluids Inc. ("TFI") subsidiary, which comprises our industrial solutions business and as a result, we considered TFI to be held for sale. As such, all prior periods were restated to reflect TFI as discontinued operations. Loss from discontinued operations, net of income taxes for the year ended December 31, 2013 includes $98.5 million in goodwill impairment charges associated with our industrial solutions business. On April 11, 2015, we completed the TFI disposition with Safety-Kleen, Inc. for
$85.0 million
in an all-cash transaction, subject to working capital adjustments. See
Note 21
in the Notes to the Consolidated Financial Statements herein for further information. Loss from operations and loss from continuing operations for the year ended December 31, 2013 includes long-lived asset impairment charges of $111.9 million, $24.6 million in litigation settlement charges and the write-off of $4.3 million of investments.
|
(5)
|
Loss from operations and loss from continuing operations for the year ended December 31, 2012 includes merger and acquisition costs of $7.7 million, impairment charges of $2.4 million and $3.7 million related to write-downs of the carrying values of a customer intangible asset and saltwater disposal wells, respectively, and a $1.4 million charge to accrue for the estimated costs of remediation and testing to comply with Louisiana Department of Environmental Quality
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
|
($ in thousands)
|
||||||||||||||||||
Consolidated balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents (1)
|
|
$
|
994
|
|
|
$
|
39,309
|
|
|
$
|
13,367
|
|
|
$
|
8,783
|
|
|
$
|
14,776
|
|
Total current assets (1)
|
|
33,478
|
|
|
94,481
|
|
|
154,672
|
|
|
161,691
|
|
|
165,981
|
|
|||||
Property, plant and equipment, net (2)
|
|
294,179
|
|
|
406,188
|
|
|
475,982
|
|
|
498,541
|
|
|
579,022
|
|
|||||
Goodwill (3)
|
|
—
|
|
|
—
|
|
|
104,721
|
|
|
408,696
|
|
|
415,176
|
|
|||||
Total assets (3)
|
|
342,604
|
|
|
522,619
|
|
|
871,572
|
|
|
1,410,763
|
|
|
1,644,339
|
|
|||||
Current portion of long-term debt (4)
|
|
465,835
|
|
|
499,709
|
|
|
4,863
|
|
|
5,464
|
|
|
4,699
|
|
|||||
Current liabilities
|
|
492,967
|
|
|
545,087
|
|
|
96,193
|
|
|
124,538
|
|
|
86,470
|
|
|||||
Long-term debt (4)
|
|
5,956
|
|
|
11,758
|
|
|
592,455
|
|
|
549,713
|
|
|
561,427
|
|
|||||
Total liabilities
|
|
511,670
|
|
|
560,890
|
|
|
718,625
|
|
|
766,394
|
|
|
796,578
|
|
|||||
Total shareholders' (deficit)/equity
|
|
(169,066
|
)
|
|
(38,271
|
)
|
|
152,947
|
|
|
644,369
|
|
|
847,761
|
|
(1)
|
On March 10, 2016, we entered into an amendment to our guaranty and security agreement related to our ABL Facility, which is described in further detail in
Note 9
in the Notes to the Consolidated Financial Statements herein under "ABL Facility Amendments." This amendment implemented a daily cash sweep of our collection lockbox and certain depository accounts, the proceeds of which are required to be applied against the outstanding balance of the ABL Facility. As a result of this amendment, our cash and cash equivalents balance decreased in 2016. Due to lower revenues in 2016, accounts receivable decreased by $18.4 million from the prior year, also contributing to the lower total current assets as of December 31, 2016.
|
(2)
|
During 2016, we recorded long-lived asset impairment charges of
$42.2 million
. During 2013, we recorded long-lived asset impairment charges of $111.9 million.
|
(3)
|
Goodwill was reduced to zero in 2015 as a result of a goodwill impairment charge of $104.7 million. The 2014 decrease in goodwill and total assets related to a goodwill and intangible asset impairment charge of $304.0 million and $112.4 million, respectively. Total assets as of December 31, 2014 and 2013 also reflect a reduction in goodwill relating to impairment charges for TFI of $48.0 million and $98.5 million, respectively, which were included in assets held for sale at those year ends. Additionally, total assets as of December 31, 2014 also reflected a reduction in intangible assets of $26.4 million for TFI.
|
(4)
|
As a result of the probability of breaching one of the financial covenants as of December 31, 2015, the carrying value of the ABL Facility and the 2018 Notes was reclassified as current in the consolidated balance sheet as of December 31, 2015. See
Note 9
in the Notes to the Consolidated Financial Statements herein for further discussion on our indebtedness and the capital restructuring transactions that occurred during 2016.
|
•
|
Oil shale areas
: includes our operations in the Bakken and Eagle Ford Shale areas.
|
•
|
Natural gas shale areas
: includes our operations in the Marcellus, Utica, and Haynesville Shale areas.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue - from predominantly oil shale areas (a)
|
$
|
92,650
|
|
|
$
|
241,403
|
|
|
$
|
403,371
|
|
Revenue - from predominantly natural gas shale areas (b)
|
59,526
|
|
|
115,296
|
|
|
132,911
|
|
|||
Total revenue
|
$
|
152,176
|
|
|
$
|
356,699
|
|
|
$
|
536,282
|
|
|
|
|
|
|
|
||||||
Loss from continuing operations before income taxes
|
$
|
(166,814
|
)
|
|
$
|
(195,284
|
)
|
|
$
|
(469,641
|
)
|
Loss from continuing operations
|
(167,621
|
)
|
|
(195,167
|
)
|
|
(457,178
|
)
|
|||
EBITDA (c, d)
|
(51,521
|
)
|
|
(75,579
|
)
|
|
(332,844
|
)
|
(a)
|
Represents revenues that are derived from predominantly oil-rich areas consisting of the Bakken, Eagle Ford, Mississippian and Tuscaloosa Marine Shale areas (prior to our substantial exit from the Mississippian and Tuscaloosa Marine basins during the three months ended March 31, 2015). Note that the Utica Shale area was previously included in the oil shale areas until the three months ended September 30, 2015 when it was reclassified as a natural gas shale area.
|
(b)
|
Represents revenues that are derived from predominantly natural gas-rich areas consisting of the Marcellus, Utica, Haynesville and Barnett Shale areas (prior to our substantial exit from the Barnett basin during the three months ended March 31, 2014). Note that the Utica Shale area was previously included in the oil shale areas until the three months ended September 30, 2015 when it was reclassified as a natural gas shale area.
|
(c)
|
Defined as consolidated net loss from continuing operations before net interest expense, income taxes and depreciation and amortization. EBITDA is not a recognized measure under generally accepted accounting principles in the United States (“GAAP”). See the reconciliation between loss from continuing operations and EBITDA under “Item 7. Liquidity and Capital Resources - EBITDA.”
|
(d)
|
The financial covenants referred to in
Note 9
in the Notes to the Consolidated Financial Statements are based on EBITDA adjusted for certain items as defined in the debt agreements. Most notably, long-lived asset and goodwill impairments are allowed to be adjusted out of EBITDA in calculating the Adjusted EBITDA for the asset-based revolving credit facility financial covenant.
|
|
Year Ended
|
|
Percent of Revenue
|
|
|
|
|
|||||||||||||
|
December 31,
|
|
December 31,
|
|
Increase (Decrease)
|
|||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016 versus 2015
|
|||||||||||
Non-rental revenue
|
$
|
139,886
|
|
|
$
|
327,655
|
|
|
91.9
|
%
|
|
91.9
|
%
|
|
$
|
(187,769
|
)
|
|
(57.3
|
)%
|
Rental revenue
|
12,290
|
|
|
29,044
|
|
|
8.1
|
%
|
|
8.1
|
%
|
|
(16,754
|
)
|
|
(57.7
|
)%
|
|||
Total revenue
|
152,176
|
|
|
356,699
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(204,523
|
)
|
|
(57.3
|
)%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct operating expenses
|
129,624
|
|
|
279,881
|
|
|
85.2
|
%
|
|
78.5
|
%
|
|
(150,257
|
)
|
|
(53.7
|
)%
|
|||
General and administrative expenses
|
37,013
|
|
|
39,327
|
|
|
24.3
|
%
|
|
11.0
|
%
|
|
(2,314
|
)
|
|
(5.9
|
)%
|
|||
Depreciation and amortization
|
60,763
|
|
|
70,511
|
|
|
39.9
|
%
|
|
19.8
|
%
|
|
(9,748
|
)
|
|
(13.8
|
)%
|
|||
Impairment of long-lived assets
|
42,164
|
|
|
—
|
|
|
27.7
|
%
|
|
—
|
%
|
|
42,164
|
|
|
100.0
|
%
|
|||
Impairment of goodwill
|
—
|
|
|
104,721
|
|
|
—
|
%
|
|
29.4
|
%
|
|
(104,721
|
)
|
|
(100.0
|
)%
|
|||
Other, net
|
—
|
|
|
7,098
|
|
|
—
|
%
|
|
2.0
|
%
|
|
(7,098
|
)
|
|
(100.0
|
)%
|
|||
Total costs and expenses
|
269,564
|
|
|
501,538
|
|
|
177.1
|
%
|
|
140.6
|
%
|
|
(231,974
|
)
|
|
(46.3
|
)%
|
|||
Loss from operations
|
(117,388
|
)
|
|
(144,839
|
)
|
|
(77.1
|
)%
|
|
(40.6
|
)%
|
|
(27,451
|
)
|
|
(19.0
|
)%
|
|||
Interest expense, net
|
(54,530
|
)
|
|
(49,194
|
)
|
|
(35.8
|
)%
|
|
(13.8
|
)%
|
|
5,336
|
|
|
10.8
|
%
|
|||
Other income, net
|
5,778
|
|
|
894
|
|
|
3.8
|
%
|
|
0.3
|
%
|
|
4,884
|
|
|
546.3
|
%
|
|||
Loss on extinguishment of debt
|
(674
|
)
|
|
(2,145
|
)
|
|
(0.4
|
)%
|
|
(0.6
|
)%
|
|
(1,471
|
)
|
|
(68.6
|
)%
|
|||
Loss from continuing operations before income taxes
|
(166,814
|
)
|
|
(195,284
|
)
|
|
(109.6
|
)%
|
|
(54.7
|
)%
|
|
(28,470
|
)
|
|
(14.6
|
)%
|
|||
Income tax (expense) benefit
|
(807
|
)
|
|
117
|
|
|
(0.5
|
)%
|
|
—
|
%
|
|
924
|
|
|
789.7
|
%
|
|||
Loss from continuing operations
|
(167,621
|
)
|
|
(195,167
|
)
|
|
(110.1
|
)%
|
|
(54.7
|
)%
|
|
(27,546
|
)
|
|
(14.1
|
)%
|
|||
Loss from discontinued operations, net of income taxes
|
(1,235
|
)
|
|
(287
|
)
|
|
(0.8
|
)%
|
|
(0.1
|
)%
|
|
948
|
|
|
330.3
|
%
|
|||
Net loss attributable to common shareholders
|
$
|
(168,856
|
)
|
|
$
|
(195,454
|
)
|
|
(111.0
|
)%
|
|
(54.8
|
)%
|
|
$
|
(26,598
|
)
|
|
(13.6
|
)%
|
|
Year Ended
|
|
Percent of Revenue
|
|
|
|
|
|||||||||||||
|
December 31,
|
|
December 31,
|
|
Increase (Decrease)
|
|||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015 versus 2014
|
|||||||||||
Non-rental revenue
|
$
|
327,655
|
|
|
463,418
|
|
|
91.9
|
%
|
|
86.4
|
%
|
|
$
|
(135,763
|
)
|
|
(29.3
|
)%
|
|
Rental revenue
|
29,044
|
|
|
72,864
|
|
|
8.1
|
%
|
|
13.6
|
%
|
|
(43,820
|
)
|
|
(60.1
|
)%
|
|||
Total revenue
|
356,699
|
|
|
536,282
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(179,583
|
)
|
|
(33.5
|
)%
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct operating expenses
|
279,881
|
|
|
392,458
|
|
|
78.5
|
%
|
|
73.2
|
%
|
|
(112,577
|
)
|
|
(28.7
|
)%
|
|||
General and administrative expenses
|
39,327
|
|
|
59,187
|
|
|
11.0
|
%
|
|
11.0
|
%
|
|
(19,860
|
)
|
|
(33.6
|
)%
|
|||
Depreciation and amortization
|
70,511
|
|
|
85,880
|
|
|
19.8
|
%
|
|
16.0
|
%
|
|
(15,369
|
)
|
|
(17.9
|
)%
|
|||
Impairment of long-lived assets
|
—
|
|
|
112,436
|
|
|
—
|
%
|
|
21.0
|
%
|
|
(112,436
|
)
|
|
(100.0
|
)%
|
|||
Impairment of goodwill
|
104,721
|
|
|
303,975
|
|
|
29.4
|
%
|
|
56.7
|
%
|
|
(199,254
|
)
|
|
(65.5
|
)%
|
|||
Other, net
|
7,098
|
|
|
—
|
|
|
2.0
|
%
|
|
—
|
%
|
|
7,098
|
|
|
100.0
|
%
|
|||
Total costs and expenses
|
501,538
|
|
|
953,936
|
|
|
140.6
|
%
|
|
177.9
|
%
|
|
(452,398
|
)
|
|
(47.4
|
)%
|
|||
Loss from operations
|
(144,839
|
)
|
|
(417,654
|
)
|
|
(40.6
|
)%
|
|
(77.9
|
)%
|
|
(272,815
|
)
|
|
(65.3
|
)%
|
|||
Interest expense, net
|
(49,194
|
)
|
|
(50,917
|
)
|
|
(13.8
|
)%
|
|
(9.5
|
)%
|
|
(1,723
|
)
|
|
(3.4
|
)%
|
|||
Other income, net
|
894
|
|
|
2,107
|
|
|
0.3
|
%
|
|
0.4
|
%
|
|
(1,213
|
)
|
|
(57.6
|
)%
|
|||
Loss on extinguishment of debt
|
(2,145
|
)
|
|
(3,177
|
)
|
|
(0.6
|
)%
|
|
(0.6
|
)%
|
|
(1,032
|
)
|
|
(32.5
|
)%
|
|||
Loss from continuing operations before income taxes
|
(195,284
|
)
|
|
(469,641
|
)
|
|
(54.7
|
)%
|
|
(87.6
|
)%
|
|
(274,357
|
)
|
|
(58.4
|
)%
|
|||
Income tax benefit
|
117
|
|
|
12,463
|
|
|
—
|
%
|
|
2.3
|
%
|
|
(12,346
|
)
|
|
(99.1
|
)%
|
|||
Loss from continuing operations
|
(195,167
|
)
|
|
(457,178
|
)
|
|
(54.7
|
)%
|
|
(85.2
|
)%
|
|
(262,011
|
)
|
|
(57.3
|
)%
|
|||
Loss from discontinued operations, net of income taxes
|
(287
|
)
|
|
(58,426
|
)
|
|
(0.1
|
)%
|
|
(10.9
|
)%
|
|
(58,139
|
)
|
|
(99.5
|
)%
|
|||
Net loss attributable to common stockholders
|
$
|
(195,454
|
)
|
|
$
|
(515,604
|
)
|
|
(54.8
|
)%
|
|
(96.1
|
)%
|
|
$
|
(320,150
|
)
|
|
(62.1
|
)%
|
|
|
Year Ended December 31,
|
||||||||||
Net cash (used in) provided by continuing operations:
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities
|
|
$
|
(26,251
|
)
|
|
49,827
|
|
|
17,376
|
|
||
Investing activities
|
|
14,732
|
|
|
68,178
|
|
|
(45,539
|
)
|
|||
Financing activities
|
|
(26,796
|
)
|
|
(93,118
|
)
|
|
32,747
|
|
|||
Net (decrease) increase in cash and cash equivalents from continuing operations
|
|
$
|
(38,315
|
)
|
|
$
|
24,887
|
|
|
$
|
4,584
|
|
•
|
debtor in possession financing (the “DIP Facilities”), consisting of a super-priority, secured, debtor-in-possession revolving credit facility (the “DIP Revolving Facility”) provided by the lenders under the Company’s ABL Facility and a super-priority, secured, debtor-in-possession term loan facility (the “DIP Term Loan”) provided by the one or more of the lenders under the Company’s Term Loan;
|
•
|
a rights offering (the “Rights Offering”) in connection with the consummation of the Restructuring, pursuant to which the Company will distribute freely transferrable rights (the “Rights”) to permit the holders thereof to acquire, in the aggregate,
$150.0 million
of newly issued common stock of the reorganized company at an enterprise valuation of
$400.0 million
(the “Plan Value”);
|
•
|
exit financing, to the extent necessary after the Rights Offering, to fund required disbursements under the Plan, through a new first lien, senior secured exit facility in the form of an asset backed revolver, term loan or combination thereof;
|
•
|
cash payment in full of all administrative expense claims, priority tax claims, priority claims, DIP Revolving Facility claims, and ABL Facility claims;
|
•
|
satisfaction in full of all DIP Term Loan claims and Term Loan claims (collectively, the “Term Loan Claims”) as follows: (i) by converting the first
$75.0 million
of Term Loan Claims to newly issued common stock of the reorganized company at Plan Value, subject to dilution by a new management incentive plan, the Rights Offering, and the conversion of the remainder of the Term Loan Claims, and (ii) the remaining Term Loan Claims, if any, to be paid in cash from the proceeds of the Rights Offering in excess of
$50.0 million
after repayment of the ABL Facility claims and other expenses, with any remaining balance thereafter to be converted to newly issued common stock of the reorganized company at Plan Value (subject to dilution);
|
•
|
receipt by the holders of the 2021 Notes, in full satisfaction of their claims, (a) their pro rata share of
99.75%
of the reorganized company’s newly issued common stock, subject to dilution by a new management incentive plan, the Rights Offering, and the conversion of the Term Loan Claims, and (b)
50.0%
of the Rights (which will be exercisable for up to two years following the completion of the Restructuring);
|
•
|
receipt by the holders of the 2018 Notes in full satisfaction of their claims of (a) their pro rata share of up to
0.25%
of the reorganized company’s newly issued common stock, subject to dilution by a new management incentive plan, the Rights Offering, and the conversion of the Term Loan Claims, and (b) a portion of
50.0%
of the Rights to be determined by the Nuverra Parties (which will be exercisable prior to the completion of the Restructuring);
|
•
|
existing equity interests shall receive no distribution; provided however that, subject to agreement among the Supporting Noteholders and the Nuverra Parties, existing equity holders may receive a portion of the Rights;
|
•
|
payment of all undisputed customer, employee, vendor or other trade obligations; and
|
•
|
continuation as a public reporting company under the Securities Exchange Act of 1934 and best efforts to have the new common stock listed on the New York Stock Exchange.
|
|
|
Payments due by Period
|
||||||||||||||||||
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
|
Total
|
||||||||||
Debt obligations including capital leases (1)
|
|
$
|
481,581
|
|
|
$
|
5,398
|
|
|
$
|
618
|
|
|
$
|
—
|
|
|
$
|
487,597
|
|
Interest on debt and capital leases (2)
|
|
32,145
|
|
|
238
|
|
|
29
|
|
|
—
|
|
|
32,412
|
|
|||||
Operating leases (3)
|
|
3,572
|
|
|
3,278
|
|
|
1,421
|
|
|
1,682
|
|
|
9,953
|
|
|||||
Contingent consideration (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,500
|
|
|
8,500
|
|
|||||
Asset retirement obligation (5)
|
|
525
|
|
|
176
|
|
|
371
|
|
|
2,066
|
|
|
3,138
|
|
|||||
Total
|
|
$
|
517,823
|
|
|
$
|
9,090
|
|
|
$
|
2,439
|
|
|
$
|
12,248
|
|
|
$
|
541,600
|
|
(1)
|
Principal payments are reflected when contractually required. Due to the default of the ABL Facility as of March 31, 2017, and the resulting cross-default of the 2018 Notes, 2021 Notes and Term Loan, the 2018 Notes, 2021 Notes and Term Loan are included in current portion of long-term debt as of December 31, 2016, and the payoff of those debts is reflected in the "Less than 1 Year" column.
|
(2)
|
Estimated interest on debt for all periods presented is calculated using interest rates available as of
December 31, 2016
and includes fees for the unused portion of our ABL Facility.
|
(3)
|
Represents operating leases primarily for facilities, vehicles and rental equipment.
|
(4)
|
Represents contingent consideration payments related to the acquisition of Ideal Oilfield Disposal LLC which is payable in shares of our common stock or cash at our discretion (
Note 10
).
|
(5)
|
Represents estimated future costs related to the closure and/or remediation of our disposal wells and landfill. As we are uncertain as to when these future costs will be paid, the majority of the obligation has been presented in the more than five years column.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Loss from continuing operations
|
$
|
(167,621
|
)
|
|
$
|
(195,167
|
)
|
|
$
|
(457,178
|
)
|
Depreciation and amortization
|
60,763
|
|
|
70,511
|
|
|
85,880
|
|
|||
Interest expense, net
|
54,530
|
|
|
49,194
|
|
|
50,917
|
|
|||
Income tax expense (benefit)
|
807
|
|
|
(117
|
)
|
|
(12,463
|
)
|
|||
EBITDA from continuing operations
|
$
|
(51,521
|
)
|
|
$
|
(75,579
|
)
|
|
$
|
(332,844
|
)
|
Name
|
|
Age
|
|
Position
|
Mark D. Johnsrud
|
|
58
|
|
Chairman of the Board and Chief Executive Officer
|
Robert B. Simonds, Jr.
|
|
54
|
|
Vice Chairman of the Board and Director
|
William M. Austin
|
|
71
|
|
Director
|
Edward A. Barkett
|
|
50
|
|
Director
|
Tod C. Holmes
|
|
68
|
|
Director
|
R.D. "Dan" Nelson
|
|
67
|
|
Director
|
Dr. Alfred E. Osborne, Jr.
|
|
72
|
|
Director
|
J. Danforth Quayle
|
|
70
|
|
Director
|
Name
|
|
Age
|
|
Position
|
Mark D. Johnsrud
|
|
58
|
|
Chairman of the Board and Chief Executive Officer
|
Joseph M. Crabb
|
|
49
|
|
Executive Vice President and Chief Legal Officer
|
•
|
honest and ethical conduct;
|
•
|
avoidance of conflicts of interest;
|
•
|
full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in our other public communications;
|
•
|
compliance with applicable governmental laws and regulations and stock exchange rules;
|
•
|
prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the code; and
|
•
|
accountability for adherence to the Code of Business Conduct and Ethics.
|
•
|
experience in corporate management;
|
•
|
experience with complex business organizations;
|
•
|
experience as a board member or officer of another publicly held company;
|
•
|
diversity of expertise, experience in substantive matters related to the Company’s business and professional experience as compared to existing members of our Board and other nominees; and
|
•
|
practical and mature business judgment.
|
•
|
selecting and hiring of our independent registered public accounting firm;
|
•
|
evaluating the qualifications, independence and performance of our independent registered public accounting firm;
|
•
|
reviewing and approving the audit and non-audit services to be performed by our independent registered public accounting firm;
|
•
|
reviewing the design, adequacy, implementation and effectiveness of our internal controls established for finance, accounting, legal compliance and ethics;
|
•
|
reviewing the design, adequacy, implementation and effectiveness of our critical accounting and financial policies;
|
•
|
overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
|
•
|
reviewing with management and our independent registered public accounting firm the results of our annual and quarterly financial statements;
|
•
|
reviewing with management and our independent registered public accounting firm any earnings announcements or other public announcements concerning our operating results;
|
•
|
reviewing and approving any related party transactions (See “Certain Relationships and Related Party Transactions” herein for further discussion); and
|
•
|
overseeing, discussing with our Board, management and our independent registered public accounting firm and, as necessary, making recommendations to our Board regarding how to address risks relating to accounting matters, financial reporting and legal and regulatory compliance and developments, and the services provided by our independent registered public accounting firm.
|
Name
|
|
Title
|
Mark D. Johnsrud
|
|
Chairman of the Board and Chief Executive Officer
|
Joseph M. Crabb
|
|
Executive Vice President, Chief Legal Officer and Corporate Secretary
|
Gregory J. Heinlein (1)
|
|
Former Executive Vice President and Chief Financial Officer
|
(1)
|
Mr. Heinlein resigned from his position effective April 1, 2016. Details of his departure and transition were included in the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2016.
|
•
|
The Senior Executive Incentive Plan (“SEIP”), a short-term annual cash incentive plan, was in effect for 2016 providing for annual cash incentive award opportunities tied heavily to achievement of specific, pre-determined financial performance goals based on adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”), safety goals and management objectives.
|
•
|
As of
March 31, 2017
, Mr. Johnsrud is the beneficial owner of
128,837,914
shares of common stock, which is approximately
85.36%
of the Company's shares outstanding. Due to his status as our largest stockholder and the continued challenging economic environment, Mr. Johnsrud declined salary increases in 2014, 2015, and 2016 and voluntarily reduced his salary to $1 for the first nine months of 2016. He also has not received an equity grant under the Company’s Equity Incentive Plan in 2014, 2015 or 2016.
|
•
|
No executive officer or senior executive received base salary increases. There were no restricted stock units and time based stock awarded to named executive officers during 2016.
|
•
|
We did not grant any restricted stock to non-executive members of our Board during 2016.
|
•
|
The Key Employee Incentive Plan (“KEIP”), which was adopted by the Company in December 2016 following approval by the Compensation Committee of the Board, provides the Company’s senior executive officers with monthly incentive payments based upon the Company’s achievement of pre-established performance targets relating to
|
•
|
We entered into an employment agreement with Mr. Crabb.
|
•
|
Executing the restructuring described in
Note 9
in the Notes to the Consolidated Financial Statements contained herein;
|
•
|
Driving ongoing restructuring discussions with our debtholders regarding strategic alternatives to improve our long-term capital structure;
|
•
|
Achieving ongoing cost-management initiatives;
|
•
|
Initiating various other restructuring activities, including sales of underutilized assets;
|
•
|
Developing a long-range business plan as part of restructuring activities; and
|
•
|
Achieving excellent safety results in 2016.
|
•
|
All members of the Compensation Committee meet the independence requirements of the Company’s Corporate Governance Guidelines, SEC rules, and other applicable law.
|
•
|
The Compensation Committee’s independent compensation consultant, Pearl Meyer & Partners, LLC ("Pearl Meyer") is retained directly by the Compensation Committee and performs no other services for the Company.
|
•
|
The Compensation Committee conducts an annual review and approval of our compensation strategy and compensation-related risk profile to ensure that our compensation-related risks are not reasonably likely to have a material adverse effect on the Company.
|
•
|
We align executive compensation with the interest of our shareholders through “Pay for Performance.”
|
•
|
We benchmark executive compensation against a representative and relevant peer group that compete with the Company for talent and general industry survey data for companies of similar revenue and size.
|
•
|
We have a Clawback policy.
|
•
|
We have a Related Party Transaction policy.
|
•
|
We have “double-trigger” change-in-control benefit payments.
|
•
|
The Compensation Committee uses an independent compensation consultant.
|
•
|
We prohibit the re-pricing, buyout, or exchange of underwater stock options or stock appreciation right.
|
•
|
We don’t grant stock options below fair market value.
|
•
|
We don’t provide additional benefits to executive officers that differ from those provided to all other employees.
|
•
|
We don’t have a supplemental executive retirement plan that provides extra benefits to the named executive officers.
|
•
|
We don’t provide excise tax gross-ups.
|
•
|
We don't provide guaranteed bonuses or uncapped incentives to our named executive officers.
|
•
|
Attract, motivate and retain highly qualified executives;
|
•
|
Establish challenging, but realistic performance objectives, balanced between short-term and long-term measurable results;
|
•
|
Provide a substantial portion of executive compensation in the form of variable (versus fixed) pay, with a significant portion of variable compensation in the form of possible incentive and equity payouts; and
|
•
|
Ensure internal alignment of executive activities and actions with Company financial performance and operating objectives, without undue risk.
|
•
|
The fees paid by the Company to Pearl Meyer were less than 1% of Pearl Meyer's total revenue;
|
•
|
Pearl Meyer maintains a conflicts policy with specific policies and procedures designed to ensure independence;
|
•
|
None of the Pearl Meyer consultants working on matters for the Company had any business or personal relationship with any members of the Compensation Committee;
|
•
|
None of the Pearl Meyer consultants had any business or personal relationship with any executive officer of the Company; and
|
•
|
None of the Pearl Meyer consultants working on matters for the Company directly owns any common stock of the Company.
|
•
|
That could compete with the Company for executive talent;
|
•
|
That are in the Environmental Services Industry and/or Oil and Gas Equipment Services Industry (appropriate GICS code classifications); and
|
•
|
That fell within relevant Company-size and industry parameters.
|
•
|
Tie variable pay directly to performance and outcomes that are likely to positively impact stockholder value. A significant portion of senior executive total target compensation is not guaranteed and is tied to performance metrics designed to drive stockholder value. Potential payouts under the executive cash incentive plan range from 0% to 110% of base salary, with a target of 55% of base salary.
|
•
|
Mitigate undue risk. We mitigate undue risk by utilizing caps on incentive award payments and vesting periods, and/or restrictive covenants on potential equity exercises. The Compensation Committee annually reviews our compensation risk profile to ensure that our compensation-related risks are not likely to have a material adverse effect on the Company.
|
Executive Officers
|
Annual Base Salary as of December 31, 2016
|
% Increase from Fiscal 2015
|
% Increase from Fiscal 2014
|
||||
Mark D. Johnsrud
|
$
|
700,000
|
|
0
|
%
|
0
|
%
|
Joseph M. Crabb
|
$
|
400,000
|
|
0
|
%
|
0
|
%
|
Gregory J. Heinlein (1)
|
$
|
425,000
|
|
0
|
%
|
N/A
|
|
(1)
|
Mr. Heinlein resigned from his position effective April 1, 2016. Represents Mr. Heinlein's annual base salary as of April 1, 2016.
|
Threshold
|
|
Target
|
|
Maximum
|
3% of salary
|
|
55% of salary
|
|
110% of salary
|
•
|
Restricted Stock Awards.
For each of our executives, grants of restricted stock provide an incentive to remain in our employ without the need for a short-term significant increase in our stock price, due to the inherent value of the stock underlying the awards (as opposed to stock option awards, which lose incentive and retention value if our stock price falls below the exercise price). During 2016, there were no grants of restricted stock awards to any of our named executive officers.
|
•
|
Stock Option Awards
. The value of a stock option is based on the growth of our stock price, thereby creating and enhancing incentives to maximize stockholder value. During 2016, there were no stock option grants to any of our named executive officers.
|
•
|
Be consistent and competitive with current market practices;
|
•
|
Afford reasonable protection without creating any undue windfall;
|
•
|
Enhance the Company’s ability to retain key employees during critical but uncertain times; and
|
•
|
Enhance an acquirer’s potential interest in retaining key executives.
|
Name and Principal Position
|
Year
|
Salary ($)
|
|
Bonus ($)
|
|
Stock Awards ($) (1)
|
Option Awards ($) (2)
|
Non-Equity Incentive Plan Comp
($) (3)
|
All Other Comp ($)
|
|
Total ($)
|
||||||||
Mark D. Johnsrud
|
2016
|
137,307
|
|
(4)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
15,165
|
|
(5)
|
152,472
|
|
|
Chairman of the Board
|
2015
|
702,692
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
21,361
|
|
|
724,053
|
|
|
& Chief Executive Officer
|
2014
|
702,692
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
37,113
|
|
|
739,805
|
|
|
Joseph M. Crabb
|
2016
|
401,539
|
|
|
300,000
|
|
(6
|
)
|
—
|
|
—
|
|
137,238
|
|
15,165
|
|
(7)
|
853,942
|
|
Executive Vice President,
|
2015
|
401,539
|
|
|
200,000
|
|
|
94,565
|
|
211,575
|
|
—
|
|
17,627
|
|
|
925,306
|
|
|
Chief Legal Officer and
|
2014
|
289,231
|
|
|
88,000
|
|
|
105,495
|
|
67,628
|
|
—
|
|
17,683
|
|
|
568,037
|
|
|
Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gregory J. Heinlein*
|
2016
|
132,665
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
5,055
|
|
(8)
|
137,720
|
|
|
Former Executive Vice
|
2015
|
423,365
|
|
|
75,000
|
|
|
169,274
|
|
289,299
|
|
—
|
|
11,374
|
|
|
968,312
|
|
|
President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The amounts reported in this column represent the aggregate grant date fair value of awards of the restricted stock awards or units granted to the named executive officers in each covered fiscal year and do not reflect whether the recipient has actually realized a financial benefit from the award. The assumptions used in the calculations of these amounts are included in
Note 14
in the Notes to the Consolidated Financial Statements contained herein.
|
(2)
|
The amount reported in this column reflects the aggregate grant date fair value of stock options, in accordance with ASC 718, and do not reflect compensation actually realized by our named executive officers. These stock options vest ratably on an annual basis over three years provided that the option recipient continues to be employed by us on such dates. Additional information regarding the assumptions used to estimate the fair value of the stock option awards is included in
Note 14
in the Notes to the Consolidated Financial Statements contained herein.
|
(3)
|
The amounts reported in this column represent monthly incentive payments earned under the KEIP for the months of October, November and December of 2016.
|
(4)
|
On January 25, 2016, Mr. Johnsrud voluntarily amended his employment agreement to voluntarily reduce his base salary to $1 for 2016, which could be increased to an amount not exceeding his prior annual base salary of $700,000 at any time by the Company or Mr. Johnsrud. Effective September 26, 2016, the Board reinstated Mr. Johnsrud's annual base salary back to $700,000.
|
(5)
|
The amount reported in this column for fiscal 2016 represents $12,529 in medical premiums, $370 in dental premiums, $2,119 in disability premiums and $147 in life insurance premiums.
|
(6)
|
Represents Mr. Crabb's 2016 bonus, which vested and was paid in 2017.
|
(7)
|
The amount reported in this column for fiscal 2016 represents $12,529 in medical premiums, $370 in dental premiums, $2,119 in disability premiums and $147 in life insurance premiums.
|
(8)
|
The amount reported in this column for fiscal 2016 represents $4,176 in medical premiums, $123 in dental premiums, $707 in disability premiums and $49 in life insurance premiums.
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||
Name
|
Award Date
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Option Exercise Price ($)
|
Option Expiration Date
|
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
|
Market Value of Shares or Units of Stock that Have Not Vested ($)
|
||||||||
Mark D. Johnsrud
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Joseph M. Crabb
|
May 6, 2014
|
|
5,000
|
|
2,500
|
|
(1)
|
$16.23
|
May 6, 2024
|
|
|
2,166
|
|
(1)
|
$
|
390
|
|
|
|
Jan 14, 2015
|
|
46,398
|
|
92,796
|
|
(1)
|
$5.52
|
Jan 14, 2025
|
|
|
—
|
|
(2)
|
$
|
—
|
|
|
Gregory J. Heinlein
|
Jan 14, 2015
|
|
—
|
|
—
|
|
(1)
|
$5.52
|
Jan 14, 2025
|
|
|
—
|
|
(2)
|
$
|
—
|
|
|
|
Mar 17, 2015
|
|
—
|
|
—
|
|
(1)
|
$3.44
|
Mar 17, 2025
|
|
|
—
|
|
(1)
|
$
|
—
|
|
(1)
|
Assuming continued employment with the Company, one-third of the granted units and options will vest on the anniversary date of the grant for each of the succeeding three years. On and effective as of April 1, 2016, Mr. Heinlein resigned from his position as Executive Vice President and Chief Financial Officer of the Company. In connection with Mr. Heinlein’s departure, the Company agreed to vest the unvested portion of the March 17, 2015 equity grants made at the time Mr. Heinlein joined the Company, which consisted of 13,333 restricted stock units and options to purchase 20,000 shares of common stock at an exercise price of $3.44 per share. Per the terms of the plan, Mr. Heinlein was given the opportunity to exercise all vested options to purchase common stock for up to 90 days after his departure. Once the 90 days ended, all vested options to purchase common stock would be canceled if not exercised. As Mr. Heinlein did not exercise these options, all of his vested options were canceled.
|
(2)
|
The January 14, 2015 restricted stock grant was tied to a 2015 performance target with a vesting date of March 15, 2016. The performance target was not met, therefore such grants were canceled effective March 15, 2016.
|
|
Option Awards
|
|
Stock Awards
|
|||||||
Name
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting (#) (1)
|
Value Realized on Vesting ($) (2)
|
|||||
Mark D. Johnsrud
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
Joseph M. Crabb
|
—
|
|
—
|
|
|
1,348
|
|
$
|
377
|
|
Gregory J. Heinlein
|
—
|
|
—
|
|
|
13,469
|
|
$
|
3,771
|
|
(1)
|
On May 6, 2016, 2,167 shares of restricted stock held by Mr. Crabb vested and 819 of such shares were withheld to settle the tax withholding obligations. As a result, Mr. Crabb received 1,348 shares of common stock. On March 17, 2016 and April 1, 2016, 20,000 shares of restricted stock held by Mr. Heinlein vested and 6,531 of such shares were withheld to settle tax withholding obligations. As a result, Mr. Heinlein received 13,469 shares of common stock.
|
Mark D. Johnsrud
|
||||||||||||
|
Termination Without Cause or For Good Reason
|
Termination Following Change in Control
|
Disability
|
Death
|
||||||||
Severance Payments (1)
|
$
|
700,000
|
|
$
|
2,030,000
|
|
$
|
700,000
|
|
$
|
700,000
|
|
Bonus (2)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Benefits (3)
|
19,636
|
|
40,043
|
|
19,636
|
|
8,440
|
|
||||
Stock Awards (4)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Total
|
$
|
719,636
|
|
$
|
2,070,043
|
|
$
|
719,636
|
|
$
|
708,440
|
|
(1)
|
Represents 12 months of base pay if terminated without a change-in-control and 2.9 times the annual salary with a change-in-control.
|
(2)
|
Represents discretionary bonus earned through termination date. For change-in-control, represents 2.9 times the discretionary bonus earned through termination date.
|
(3)
|
Represents 12 months medical, dental and vision insurance premiums. For a change-in-control, represents 24 months of coverage. If separation is the result of death, medical, dental and vision will be paid for the Executives’ spouse and/ or children.
|
(4)
|
Represents all outstanding stock options and unvested restricted stock, which become fully vested and exercisable upon a change-in-control or the executive’s death or disability.
|
•
|
Payment of an amount equal to his highest annual rate of base salary over the most recent twelve months in installments over a period of 12 months.
|
•
|
Payment of a pro-rata portion of the annual bonus he would have otherwise earned at the same time as bonuses are paid to continuing employees.
|
•
|
Reimbursement for health premiums payable for COBRA continuation coverage for a period of up to 12 months.
|
•
|
Full vesting of all outstanding equity awards, other than those awards intended to constitute “qualified performance-based compensation.”
|
•
|
Lump-sum payment of an amount equal to 2.9 times the sum of his annual base salary in effect on the termination date (or in effect immediately prior to the change-in-control, if higher).
|
•
|
Payment of 2.9 times his annual discretionary bonus for the year immediately prior to the year in which the change-in-control occurs.
|
•
|
Reimbursement for health premiums for COBRA continuation coverage or an individual health care plan for a period of up to 24 months.
|
•
|
Full vesting of all outstanding equity awards.
|
Joseph M. Crabb
|
||||||||||||
|
Termination Without Cause or For Good Reason
|
Termination Following Change in Control
|
Disability
|
Death
|
||||||||
Severance Payments (1)
|
$
|
400,000
|
|
$
|
1,160,000
|
|
$
|
400,000
|
|
$
|
400,000
|
|
Bonus (2)
|
300,000
|
|
300,000
|
|
300,000
|
|
300,000
|
|
||||
Benefits (3)
|
19,636
|
|
19,636
|
|
19,636
|
|
19,636
|
|
||||
Stock Awards (4)
|
390
|
|
390
|
|
390
|
|
390
|
|
||||
Total
|
$
|
720,026
|
|
$
|
1,480,026
|
|
$
|
720,026
|
|
$
|
720,026
|
|
(1)
|
Represents 12 months of base pay if terminated without a change-in-control and 2.9 times the annual salary with a change-in-control.
|
(2)
|
Represents Mr. Crabb's 2016 incentive bonus, at target, which is equal to 75% of his base salary. Mr. Crabb's 2016 incentive bonus vested and was paid in 2017.
|
(3)
|
Represents 12 months medical, dental and vision insurance premiums.
|
(4)
|
Represents all outstanding stock options and unvested restricted stock, which become fully vested and exercisable upon a change-in-control or the executive’s death or disability.
|
•
|
Payment of 12 months of the Base Salary in effect immediately prior to the Termination Date;
|
•
|
Payment of 12 months of the Company’s COBRA premiums in effect on the Termination Date;
|
•
|
Payment of at least 100% of the bonus or bonuses attributable to the fiscal year during which the Termination Date occurs if such bonus or bonuses would have been earned and paid but for the termination of Mr. Crabb’s employment;
|
•
|
Full vesting of all then outstanding equity awards other than those awards intended to constitute “qualified performance-based compensation;” and
|
•
|
Full vesting of 2016 incentive bonus (to the extent not previously vested and paid) in an amount equal to 75% of Mr. Crabb's annual base salary.
|
•
|
Lump-sum payment of an amount equal to 2.9 times the sum of his annual base salary in effect in effect immediately prior to the Termination Date;
|
•
|
Payment of 12 months of the Company’s COBRA premiums in effect on the Termination Date;
|
•
|
A lump-sum payment equal to 100% of all bonuses attributable to the fiscal year during which the Termination Date occurs at target;
|
•
|
Full vesting of all outstanding equity awards, including Performance-Based Awards; and
|
•
|
Full vesting of 2016 incentive bonus (to the extent not previously vested and paid) in an amount equal to 75% of Mr. Crabb's annual base salary.
|
Name
|
|
Fees Earned or Paid in Cash ($) (1)
|
|
Stock Awards ($) (2)
|
|
Total ($)
|
||||||
William M. Austin
|
|
$
|
30,000
|
|
|
$
|
—
|
|
|
$
|
30,000
|
|
Edward A. Barkett
|
|
30,000
|
|
|
—
|
|
|
30,000
|
|
|||
Tod C. Holmes
|
|
30,000
|
|
|
—
|
|
|
30,000
|
|
|||
R.D. "Dan" Nelson
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|||
Alfred E. Osborne, Jr.
|
|
35,000
|
|
|
—
|
|
|
35,000
|
|
|||
J. Danforth Quayle
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
|||
Robert B. Simonds, Jr.
|
|
25,000
|
|
|
—
|
|
|
25,000
|
|
(1)
|
Directors who are members of our Audit Committee receive $1,000 in fees per meeting attended, and the Chairperson of the Audit Committee (Dr. Osborne) receives an additional $1,000 in fees per meeting attended.
|
(2)
|
As a result of our ongoing refinancing and restructuring activities, we did not grant any restricted stock to non-executive members of our Board during 2016.
|
Name
|
|
Number of Awards (1)
|
|
William M. Austin
|
|
30,000
|
|
Edward A. Barkett
|
|
30,000
|
|
Tod C. Holmes
|
|
30,000
|
|
R.D. "Dan" Nelson
|
|
30,000
|
|
Alfred E. Osborne, Jr.
|
|
30,000
|
|
J. Danforth Quayle
|
|
30,000
|
|
Robert B. Simonds, Jr.
|
|
80,000
|
|
(1)
|
All awards consist of restricted stock except for the 50,000 stock options granted to Mr. Simonds in 2010.
|
|
|
Shares Beneficially Owned
|
||||
Name and Address of Beneficial Owner
|
|
Amount and Nature of Beneficial Ownership
|
|
Percent of Class
|
||
Mark D. Johnsrud (1)
Chairman of the Board and Chief Executive Officer
|
|
128,837,914
|
|
|
85.36
|
%
|
Joseph M. Crabb (2)
Executive Vice President and Chief Legal Officer and Corporate Secretary
|
|
127,542
|
|
|
*
|
|
Gregory J. Heinlein (3)
Former Executive Vice President and Chief Financial Officer
|
|
20,969
|
|
|
*
|
|
William M. Austin (4)
Director
|
|
61,579
|
|
|
*
|
|
Edward A. Barkett (5)
Director
|
|
89,504
|
|
|
*
|
|
Tod C. Holmes (6)
Director
|
|
70,946
|
|
|
*
|
|
R.D. "Dan" Nelson (7)
Director
|
|
76,729
|
|
|
*
|
|
Alfred E. Osborne, Jr. (8)
Director
|
|
103,175
|
|
|
*
|
|
J. Danforth Quayle (9)
Director
|
|
93,125
|
|
|
*
|
|
Robert B. Simonds, Jr. (10)
Director
|
|
139,664
|
|
|
*
|
|
Shares owned by executive officers and directors as a group
|
|
129,621,147
|
|
|
85.88
|
%
|
(1)
|
Includes 655,000 shares held by JPJ LP, a Delaware limited partnership of which Badlands Capital, LLC, a Delaware limited liability company is the general partner; Mr. Johnsrud is the sole member of Badlands Capital, LLC. In addition, includes 98,234,375 shares held by Badlands Development II, LLC. Also includes 1,305 shares in Mr. Johnsrud’s 401(k).
|
(2)
|
Includes 2,166 restricted stock units and 2,500 options which are both scheduled to vest within 60 days of March 31, 2017. Also includes 97,796 fully vested options and 1,565 shares in Mr. Crabb’s 401(k).
|
(3)
|
All fully vested options were cancelled 90 days after Mr. Heinlein's final day of employment per terms of the plan.
|
(4)
|
Includes 30,000 shares of restricted stock which are forfeitable until vested (scheduled to vest on 11/10/2017).
|
(5)
|
Includes 30,000 shares of restricted stock which are forfeitable until vested (scheduled to vest 11/10/17) and 10,000 shares by Mr. Barkett in an Individual Retirement Account.
|
(6)
|
Includes 30,000 shares of restricted stock which are forfeitable until vested (scheduled to vest on 11/10/17).
|
(7)
|
Includes 30,000 shares of restricted stock which are forfeitable until vested (scheduled to vest 11/10/17). Also includes 44,414 shares that are held of record by the Nelson Family Revocable Trust.
|
(8)
|
Includes 30,000 shares of restricted stock which are forfeitable until vested (scheduled to vest on 11/10/17). Also includes 59,175 shares that are held of record by the Rahnasto Osborne Revocable Trust and 9,000 shares that are held of record by Mr. Osborne’s Keogh Account.
|
(9)
|
Includes 30,000 shares of restricted stock which are forfeitable until vested (scheduled to vest on 11/10/17). Also includes 56,350 shares that are held of record by the James D. Quayle 2000 Irrevocable Trust and 2,500 shares that are held of record by the BTC Inc. Retirement Trust.
|
(10)
|
Includes 30,000 shares of restricted stock which are forfeitable until vested (scheduled to vest on 11/10/17). Also includes 10,554 shares that are held of record by the Simonds Family Trust and 50,000 fully vested options.
|
|
|
Common Stock
|
||||
Name and Address of Beneficial Owner
|
|
Amount and Nature of Beneficial Ownership
|
|
Percent of Class
|
||
Ascribe Capital LLC (1)
Ascribe III Investments LLC
America Securities LLC
299 Park Avenue, 34th Floor, New York, NY 10171
|
|
12,312,281
|
|
(2)
|
7.54
|
%
|
Gates Capital Management, L.P. (3)
Gates Capital Management GP, LLC
Gates Capital Management, Inc.
Jeffrey L. Gates
1177 Ave. of Americas, 46th Floor, New York, NY 10036
|
|
11,496,167
|
|
(2)
|
7.08
|
%
|
(1)
|
Ascribe Capital LLC is deemed to have shared voting and dispositive power of 12,312,281 shares, Ascribe Capital III Investments LLC is deemed to have shared voting and dispositive power of 11,311,531 shares, and American Securities LLC is deemed to have shared voting and dispositive power of 12,312,281 shares.
|
(2)
|
Reflects shares of common stock the beneficial owner has the right to acquire, within 60 days, upon exercise of warrants of which it is the record owner.
|
(3)
|
Gates Capital Management, L.P., Gates Capital Management GP, LLC, Gates Capital Management, Inc. and Jeffrey L. Gates are deemed to have shared voting and dispositive power of 11,496,167 shares.
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights or Vesting of Restricted Stock
(a)
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
(c)
|
|
||||
Equity compensation plans approved by security holders
|
25,898,645
|
|
(1)
|
$
|
0.20
|
|
|
1,983,106
|
|
(2)
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
25,898,645
|
|
|
$
|
0.20
|
|
|
1,983,106
|
|
|
(1)
|
The sum of options to acquire 366,658 shares of common stock and 249,304 shares of unvested restricted stock awarded under the 2009 Equity Incentive Plan, as well as warrants to acquire 25,282,683 shares of common stock issued in connection with the Company's Exchange Offer during 2016.
|
(2)
|
Available as of December 31, 2016.
|
Fee Category
|
|
Hein & Associates LLP
2016
|
|
KPMG LLP
2015
|
||||
Audit Fees
|
|
$
|
290,030
|
|
|
$
|
1,224,000
|
|
Audit Related Fees
|
|
—
|
|
|
17,000
|
|
||
Tax Fees
|
|
—
|
|
|
9,000
|
|
||
Total Fees
|
|
$
|
290,030
|
|
|
$
|
1,250,000
|
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
(b)
|
The exhibits listed on the “Exhibit Index” following the audited consolidated financial statements are filed with this Annual Report on Form 10-K or incorporated by reference as set forth below.
|
|
|
|
|
Nuverra Environmental Solutions, Inc.
|
||
|
|
|
|
|||
|
|
|
|
By:
|
|
/s/ MARK D. JOHNSRUD
|
|
|
|
|
Name:
|
|
Mark D. Johnsrud
|
|
|
|
|
Title:
|
|
Chief Executive Officer, President and Chairman
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ MARK D. JOHNSRUD
|
|
Chairman of the Board, Chief Executive Officer,
President and Director
(Principal Executive Officer & Principal Financial Officer)
|
|
April 14, 2017
|
Mark D. Johnsrud
|
|
|
|
|
|
|
|
|
|
/s/ STACY W. HILGENDORF
|
|
Vice President, Corporate Controller
(Principal Accounting Officer)
|
|
April 14, 2017
|
Stacy W. Hilgendorf
|
|
|
||
|
|
|
|
|
/s/ ROBERT B. SIMONDS, JR.
|
|
Vice Chairman of the Board and Director
|
|
April 14, 2017
|
Robert B. Simonds, Jr.
|
|
|
||
|
|
|
|
|
/s/ WILLIAM M. AUSTIN
|
|
Director
|
|
April 14, 2017
|
William M. Austin
|
|
|
||
|
|
|
|
|
/s/ EDWARD A. BARKETT
|
|
Director
|
|
April 14, 2017
|
Edward A. Barkett
|
|
|
|
|
|
|
|
|
|
/s/ TOD C. HOLMES
|
|
Director
|
|
April 14, 2017
|
Tod C. Holmes
|
|
|
|
|
|
|
|
|
|
/s/ R.D. "DAN" NELSON
|
|
Director
|
|
April 14, 2017
|
R.D. "Dan" Nelson
|
|
|
||
|
|
|
|
|
/s/ DR. ALFRED E. OSBORNE, JR.
|
|
Director
|
|
April 14, 2017
|
Dr. Alfred E. Osborne, Jr.
|
|
|
||
|
|
|
|
|
/s/ J. DANFORTH QUAYLE
|
|
Director
|
|
April 14, 2017
|
J. Danforth Quayle
|
|
|
|
|
|
|
|
|
|
Page
|
Audited Consolidated Financial Statements:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
994
|
|
|
$
|
39,309
|
|
Restricted cash
|
1,420
|
|
|
4,250
|
|
||
Accounts receivable, net
|
23,795
|
|
|
42,188
|
|
||
Inventories
|
2,464
|
|
|
2,985
|
|
||
Prepaid expenses and other receivables
|
3,516
|
|
|
3,377
|
|
||
Other current assets
|
107
|
|
|
2,372
|
|
||
Assets held for sale
|
1,182
|
|
|
—
|
|
||
Total current assets
|
33,478
|
|
|
94,481
|
|
||
Property, plant and equipment, net
|
294,179
|
|
|
406,188
|
|
||
Equity investments
|
73
|
|
|
3,750
|
|
||
Intangibles, net
|
14,310
|
|
|
16,867
|
|
||
Other assets
|
564
|
|
|
1,333
|
|
||
Total assets
|
$
|
342,604
|
|
|
$
|
522,619
|
|
Liabilities and Equity
|
|
|
|
||||
Accounts payable
|
$
|
4,047
|
|
|
$
|
6,907
|
|
Accrued liabilities
|
18,787
|
|
|
29,843
|
|
||
Current contingent consideration
|
—
|
|
|
8,628
|
|
||
Current portion of long-term debt
|
465,835
|
|
|
499,709
|
|
||
Derivative warrant liability
|
4,298
|
|
|
—
|
|
||
Total current liabilities
|
492,967
|
|
|
545,087
|
|
||
Deferred income taxes
|
495
|
|
|
270
|
|
||
Long-term debt
|
5,956
|
|
|
11,758
|
|
||
Long-term contingent consideration
|
8,500
|
|
|
—
|
|
||
Other long-term liabilities
|
3,752
|
|
|
3,775
|
|
||
Total liabilities
|
511,670
|
|
|
560,890
|
|
||
Commitments and contingencies
|
|
|
|
||||
Preferred stock $0.001 par value (1,000 shares authorized, no shares issued and outstanding at December 31, 2016 and December 31, 2015)
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value (350,000 shares authorized, 152,433 shares issued and 150,919 outstanding at December 31, 2016, and 29,624 shares issued and 28,135 outstanding at December 31, 2015)
|
152
|
|
|
30
|
|
||
Additional paid-in capital
|
1,407,867
|
|
|
1,369,921
|
|
||
Treasury stock, at cost (1,514 shares at December 31, 2016, and 1,489 shares at December 31, 2015)
|
(19,807
|
)
|
|
(19,800
|
)
|
||
Accumulated deficit
|
(1,557,278
|
)
|
|
(1,388,422
|
)
|
||
Total shareholders' deficit
|
(169,066
|
)
|
|
(38,271
|
)
|
||
Total liabilities and shareholders' deficit
|
$
|
342,604
|
|
|
$
|
522,619
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Non-rental revenue
|
$
|
139,886
|
|
|
$
|
327,655
|
|
|
$
|
463,418
|
|
Rental revenue
|
12,290
|
|
|
29,044
|
|
|
72,864
|
|
|||
Total revenue
|
152,176
|
|
|
356,699
|
|
|
536,282
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Direct operating expenses
|
129,624
|
|
|
279,881
|
|
|
392,458
|
|
|||
General and administrative expenses
|
37,013
|
|
|
39,327
|
|
|
59,187
|
|
|||
Depreciation and amortization
|
60,763
|
|
|
70,511
|
|
|
85,880
|
|
|||
Impairment of long-lived assets
|
42,164
|
|
|
—
|
|
|
112,436
|
|
|||
Impairment of goodwill
|
—
|
|
|
104,721
|
|
|
303,975
|
|
|||
Other, net
|
—
|
|
|
7,098
|
|
|
—
|
|
|||
Total costs and expenses
|
269,564
|
|
|
501,538
|
|
|
953,936
|
|
|||
Loss from operations
|
(117,388
|
)
|
|
(144,839
|
)
|
|
(417,654
|
)
|
|||
Interest expense, net
|
(54,530
|
)
|
|
(49,194
|
)
|
|
(50,917
|
)
|
|||
Other income, net
|
5,778
|
|
|
894
|
|
|
2,107
|
|
|||
Loss on extinguishment of debt
|
(674
|
)
|
|
(2,145
|
)
|
|
(3,177
|
)
|
|||
Loss from continuing operations before income taxes
|
(166,814
|
)
|
|
(195,284
|
)
|
|
(469,641
|
)
|
|||
Income tax (expense) benefit
|
(807
|
)
|
|
117
|
|
|
12,463
|
|
|||
Loss from continuing operations
|
(167,621
|
)
|
|
(195,167
|
)
|
|
(457,178
|
)
|
|||
Loss from discontinued operations, net of income taxes
|
(1,235
|
)
|
|
(287
|
)
|
|
(58,426
|
)
|
|||
Net loss attributable to common shareholders
|
$
|
(168,856
|
)
|
|
$
|
(195,454
|
)
|
|
$
|
(515,604
|
)
|
|
|
|
|
|
|
||||||
Net loss per common share attributable to common shareholders:
|
|
|
|
|
|
||||||
Basic and diluted loss from continuing operations
|
$
|
(1.84
|
)
|
|
$
|
(7.05
|
)
|
|
$
|
(17.52
|
)
|
Basic and diluted loss from discontinued operations
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(2.24
|
)
|
|||
Net loss per basic and diluted common share
|
$
|
(1.85
|
)
|
|
$
|
(7.06
|
)
|
|
$
|
(19.76
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding used in computing net loss per basic and diluted common share
|
90,979
|
|
|
27,681
|
|
|
26,090
|
|
|
|
Total
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Accumulated
Deficit
|
||||||||||||||||
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||
Balance at December 31, 2013
|
|
$
|
644,369
|
|
|
27,425
|
|
|
$
|
27
|
|
|
$
|
1,341,209
|
|
|
(1,431
|
)
|
|
$
|
(19,503
|
)
|
|
$
|
(677,364
|
)
|
Stock-based compensation
|
|
2,971
|
|
|
—
|
|
|
—
|
|
|
2,971
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
Issuance of common stock to employees
|
|
—
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Treasury stock acquired through surrender of shares for tax withholding
|
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(148
|
)
|
|
—
|
|
|||||
Issuance of common stock for contingent consideration
|
|
3,790
|
|
|
243
|
|
|
1
|
|
|
3,789
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for legal settlements
|
|
13,401
|
|
|
848
|
|
|
1
|
|
|
13,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
401(k) match issued
|
|
4,079
|
|
|
292
|
|
|
—
|
|
|
4,079
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
ESPP distribution
|
|
89
|
|
|
4
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
|
(515,604
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(515,604
|
)
|
|||||
Balance at December 31, 2014
|
|
$
|
152,947
|
|
|
28,937
|
|
|
$
|
29
|
|
|
$
|
1,365,537
|
|
|
(1,449
|
)
|
|
$
|
(19,651
|
)
|
|
$
|
(1,192,968
|
)
|
Stock-based compensation
|
|
2,321
|
|
|
—
|
|
|
—
|
|
|
2,321
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
Issuance of common stock to employees
|
|
(13
|
)
|
|
157
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Treasury stock acquired through surrender of shares for tax withholding
|
|
(149
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
(149
|
)
|
|
—
|
|
|||||
401(k) match issued
|
|
2,002
|
|
|
508
|
|
|
1
|
|
|
2,001
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
ESPP distribution
|
|
75
|
|
|
22
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
|
(195,454
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(195,454
|
)
|
|||||
Balance at December 31, 2015
|
|
$
|
(38,271
|
)
|
|
29,624
|
|
|
$
|
30
|
|
|
$
|
1,369,921
|
|
|
(1,489
|
)
|
|
$
|
(19,800
|
)
|
|
$
|
(1,388,422
|
)
|
Stock-based compensation
|
|
1,125
|
|
|
—
|
|
|
—
|
|
|
1,125
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
Issuance of common stock to employees
|
|
—
|
|
|
309
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for debt converted to equity
|
|
31,697
|
|
|
101,072
|
|
|
101
|
|
|
31,596
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for warrants exercised
|
|
229
|
|
|
1,070
|
|
|
1
|
|
|
228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for rights offering
|
|
5,000
|
|
|
20,312
|
|
|
20
|
|
|
4,980
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Treasury stock acquired through surrender of shares for tax withholding
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
(7
|
)
|
|
—
|
|
|||||
ESPP distribution
|
|
17
|
|
|
46
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
|
(168,856
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168,856
|
)
|
|||||
Balance at December 31, 2016
|
|
$
|
(169,066
|
)
|
|
152,433
|
|
|
$
|
152
|
|
|
$
|
1,407,867
|
|
|
(1,514
|
)
|
|
$
|
(19,807
|
)
|
|
$
|
(1,557,278
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(168,856
|
)
|
|
$
|
(195,454
|
)
|
|
$
|
(515,604
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
||||||
(Income) loss from discontinued operations, net of income taxes
|
|
—
|
|
|
(906
|
)
|
|
58,426
|
|
|||
Loss on the sale of TFI
|
|
1,235
|
|
|
1,534
|
|
|
—
|
|
|||
Depreciation and amortization of intangible assets
|
|
60,763
|
|
|
70,511
|
|
|
85,880
|
|
|||
Amortization of debt issuance costs, net
|
|
6,165
|
|
|
4,800
|
|
|
4,188
|
|
|||
Accrued interest added to debt principal
|
|
26,684
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
|
1,125
|
|
|
2,321
|
|
|
2,971
|
|
|||
Impairment of long-lived assets
|
|
42,164
|
|
|
5,921
|
|
|
112,436
|
|
|||
Impairment of goodwill
|
|
—
|
|
|
104,721
|
|
|
303,975
|
|
|||
Gain on sale of UGSI
|
|
(1,747
|
)
|
|
—
|
|
|
—
|
|
|||
Loss (gain) on disposal of property, plant and equipment
|
|
3,512
|
|
|
(321
|
)
|
|
(4,773
|
)
|
|||
Bad debt (recoveries) expense
|
|
(283
|
)
|
|
(1,110
|
)
|
|
3,833
|
|
|||
Change in fair value of derivative warrant liability
|
|
(3,311
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
|
674
|
|
|
2,145
|
|
|
3,177
|
|
|||
Deferred income taxes
|
|
225
|
|
|
(1
|
)
|
|
(12,641
|
)
|
|||
Other, net
|
|
560
|
|
|
(456
|
)
|
|
176
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
18,676
|
|
|
67,735
|
|
|
(25,560
|
)
|
|||
Prepaid expenses and other receivables
|
|
(285
|
)
|
|
543
|
|
|
6,310
|
|
|||
Accounts payable and accrued liabilities
|
|
(13,507
|
)
|
|
(17,059
|
)
|
|
(4,213
|
)
|
|||
Other assets and liabilities, net
|
|
(45
|
)
|
|
4,903
|
|
|
(1,205
|
)
|
|||
Net cash (used in) provided by operating activities from continuing operations
|
|
(26,251
|
)
|
|
49,827
|
|
|
17,376
|
|
|||
Net cash (used in) provided by operating activities from discontinued operations
|
|
—
|
|
|
(708
|
)
|
|
3,966
|
|
|||
Net cash provided by operating activities
|
|
(26,251
|
)
|
|
49,119
|
|
|
21,342
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Proceeds from the sale of TFI
|
|
—
|
|
|
78,897
|
|
|
—
|
|
|||
Proceeds from the sale of property, plant and equipment
|
|
10,696
|
|
|
12,732
|
|
|
10,192
|
|
|||
Purchases of property, plant and equipment
|
|
(3,826
|
)
|
|
(19,201
|
)
|
|
(55,731
|
)
|
|||
Proceeds from the sale of UGSI
|
|
5,032
|
|
|
—
|
|
|
—
|
|
|||
Change in restricted cash
|
|
2,830
|
|
|
(4,250
|
)
|
|
—
|
|
|||
Net cash provided by (used in) investing activities from continuing operations
|
|
14,732
|
|
|
68,178
|
|
|
(45,539
|
)
|
|||
Net cash used in investing activities from discontinued operations
|
|
—
|
|
|
(181
|
)
|
|
(2,451
|
)
|
|||
Net cash provided by (used in) investing activities
|
|
14,732
|
|
|
67,997
|
|
|
(47,990
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from revolving credit facility
|
|
154,514
|
|
|
—
|
|
|
107,725
|
|
|||
Payments on revolving credit facility
|
|
(233,667
|
)
|
|
(81,647
|
)
|
|
(67,500
|
)
|
|||
Proceeds from term loan
|
|
55,000
|
|
|
—
|
|
|
—
|
|
|||
Payments for debt issuance costs
|
|
(1,029
|
)
|
|
(225
|
)
|
|
(1,030
|
)
|
|||
Issuance of stock
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|||
Payments on vehicle financing and other financing activities
|
|
(6,614
|
)
|
|
(11,246
|
)
|
|
(6,448
|
)
|
|||
Net cash (used in) provided by financing activities from continuing operations
|
|
(26,796
|
)
|
|
(93,118
|
)
|
|
32,747
|
|
|||
Net cash (used in) provided by financing activities from discontinued operations
|
|
—
|
|
|
(105
|
)
|
|
105
|
|
|||
Net cash (used in) provided by financing activities
|
|
(26,796
|
)
|
|
(93,223
|
)
|
|
32,852
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(38,315
|
)
|
|
23,893
|
|
|
6,204
|
|
|||
Cash and cash equivalents - beginning of year
|
|
39,309
|
|
|
15,416
|
|
|
9,212
|
|
|||
Cash and cash equivalents - end of year
|
|
994
|
|
|
39,309
|
|
|
15,416
|
|
|||
Less: cash and cash equivalents of discontinued operations - end of year
|
|
—
|
|
|
—
|
|
|
2,049
|
|
|||
Cash and cash equivalents of continuing operations - end of year
|
|
$
|
994
|
|
|
$
|
39,309
|
|
|
$
|
13,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
25,154
|
|
|
$
|
43,382
|
|
|
$
|
40,471
|
|
Cash paid for taxes, net
|
|
610
|
|
|
323
|
|
|
(189
|
)
|
|||
Conversion of debt to equity
|
|
31,697
|
|
|
—
|
|
|
—
|
|
|||
Common stock issued for contingent consideration
|
|
—
|
|
|
—
|
|
|
3,790
|
|
|||
Common stock issued for legal settlements
|
|
—
|
|
|
—
|
|
|
13,401
|
|
|||
Common stock issued for 401(k) match
|
|
—
|
|
|
2,001
|
|
|
4,079
|
|
|||
Purchases of property, plant and equipment under capital leases
|
|
—
|
|
|
2,890
|
|
|
340
|
|
|||
Property, plant and equipment purchases in accounts payable
|
|
252
|
|
|
1,203
|
|
|
2,921
|
|
|||
Restricted cash payable to former sole owner of Power Fuels
|
|
—
|
|
|
—
|
|
|
114
|
|
|||
Conversion of accrued interest on principal debt balance
|
|
26,684
|
|
|
416
|
|
|
4,308
|
|
|||
Deferred financing costs financed through principal debt balance
|
|
3,220
|
|
|
—
|
|
|
2,541
|
|
|||
Deferred financing costs in accounts payable and accrued liabilities
|
|
—
|
|
|
86
|
|
|
180
|
|
|
|
December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of period
|
|
$
|
3,524
|
|
|
$
|
7,557
|
|
|
$
|
5,528
|
|
Bad debt (recoveries) expense
|
|
(283
|
)
|
|
(1,110
|
)
|
|
3,833
|
|
|||
Write-offs, net
|
|
(1,577
|
)
|
|
(2,923
|
)
|
|
(1,804
|
)
|
|||
Balance at end of period
|
|
$
|
1,664
|
|
|
$
|
3,524
|
|
|
$
|
7,557
|
|
Buildings
|
15-39 years
|
Building and land improvements
|
5-20 years
|
Pipelines
|
10-30 years
|
Disposal wells
|
3-10 years
|
Machinery and equipment
|
3-15 years
|
Equipment under capital leases
|
4-6 years
|
Motor vehicles and trailers
|
3-11 years
|
Rental equipment
|
5-15 years
|
Office equipment
|
3-7 years
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Land
|
$
|
11,496
|
|
|
$
|
11,750
|
|
Buildings
|
28,194
|
|
|
41,369
|
|
||
Building, leasehold and land improvements
|
14,240
|
|
|
12,796
|
|
||
Pipelines
|
71,076
|
|
|
70,511
|
|
||
Disposal wells
|
36,399
|
|
|
63,435
|
|
||
Landfill
|
28,130
|
|
|
28,130
|
|
||
Machinery and equipment
|
37,058
|
|
|
39,298
|
|
||
Equipment under capital leases
|
16,419
|
|
|
17,140
|
|
||
Motor vehicles and trailers
|
126,822
|
|
|
135,646
|
|
||
Rental equipment
|
58,181
|
|
|
154,651
|
|
||
Office equipment
|
7,403
|
|
|
6,790
|
|
||
|
435,418
|
|
|
581,516
|
|
||
Less accumulated depreciation
|
(148,886
|
)
|
|
(209,144
|
)
|
||
Construction in process
|
7,647
|
|
|
33,816
|
|
||
Property, plant and equipment, net
|
$
|
294,179
|
|
|
$
|
406,188
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Remaining Useful
Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Remaining Useful
Life
|
||||||||||||
Customer relationships
|
$
|
11,731
|
|
|
$
|
(8,229
|
)
|
|
$
|
3,502
|
|
|
5.7
|
|
$
|
11,731
|
|
|
$
|
(6,865
|
)
|
|
$
|
4,866
|
|
|
6.0
|
Disposal permits
|
1,269
|
|
|
(612
|
)
|
|
657
|
|
|
4.1
|
|
1,269
|
|
|
(451
|
)
|
|
818
|
|
|
5.2
|
||||||
Customer contracts
|
17,352
|
|
|
(7,201
|
)
|
|
10,151
|
|
|
9.8
|
|
17,352
|
|
|
(6,169
|
)
|
|
11,183
|
|
|
11.0
|
||||||
|
$
|
30,352
|
|
|
$
|
(16,042
|
)
|
|
$
|
14,310
|
|
|
8.5
|
|
$
|
30,352
|
|
|
$
|
(13,485
|
)
|
|
$
|
16,867
|
|
|
9.3
|
2017
|
$
|
2,089
|
|
2018
|
1,969
|
|
|
2019
|
1,788
|
|
|
2020
|
1,519
|
|
|
2021
|
1,402
|
|
|
Thereafter
|
5,543
|
|
|
Total
|
$
|
14,310
|
|
|
|
Northeast
|
|
Southern
|
|
Rocky Mountain
|
|
Total
|
||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Impairment of property, plant and equipment, net
|
|
$
|
8,025
|
|
|
$
|
2,427
|
|
|
$
|
31,712
|
|
|
$
|
42,164
|
|
Impairment of intangibles, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Impairment of Goodwill
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
8,025
|
|
|
$
|
2,427
|
|
|
$
|
31,712
|
|
|
$
|
42,164
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Impairment of property, plant and equipment, net
|
|
$
|
—
|
|
|
$
|
5,921
|
|
|
$
|
—
|
|
|
$
|
5,921
|
|
Impairment of intangibles, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Impairment of Goodwill
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
104,721
|
|
|
$
|
104,721
|
|
Total
|
|
$
|
—
|
|
|
$
|
5,921
|
|
|
$
|
104,721
|
|
|
$
|
110,642
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Impairment of property, plant and equipment, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Impairment of intangibles, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112,436
|
|
|
$
|
112,436
|
|
Impairment of Goodwill
|
|
$
|
33,831
|
|
|
$
|
66,885
|
|
|
$
|
203,259
|
|
|
$
|
303,975
|
|
Total
|
|
$
|
33,831
|
|
|
$
|
66,885
|
|
|
$
|
315,695
|
|
|
$
|
416,411
|
|
|
|
Year Ended December 31, 2015
|
||
Severance and termination benefits
|
|
$
|
724
|
|
Asset impairment charge
|
|
5,921
|
|
|
Contract termination costs and exit costs
|
|
453
|
|
|
Total restructuring and exit costs
|
|
$
|
7,098
|
|
|
|
Lease Exit Costs
|
||
Restructuring and exit costs accrued at December 31, 2015
|
|
$
|
180
|
|
Restructuring and exit-related costs
|
|
—
|
|
|
Cash payments
|
|
(50
|
)
|
|
Restructuring and exit costs accrued at December 31, 2016
|
|
$
|
130
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Accrued payroll and employee benefits
|
$
|
2,432
|
|
|
$
|
5,839
|
|
Accrued insurance
|
3,887
|
|
|
5,896
|
|
||
Accrued legal and environmental costs
|
3,570
|
|
|
1,531
|
|
||
Accrued taxes
|
1,458
|
|
|
1,514
|
|
||
Accrued interest
|
4,699
|
|
|
8,516
|
|
||
Accrued operating costs
|
1,255
|
|
|
4,233
|
|
||
Accrued other
|
1,486
|
|
|
2,314
|
|
||
Total accrued liabilities
|
$
|
18,787
|
|
|
$
|
29,843
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Interest Rate
|
|
Maturity Date
|
|
Unamortized Deferred Financing Costs (i)
|
|
Fair Value of Debt (h)
|
|
Carrying Value of Debt
|
|
Carrying Value of Debt
|
||||||||
ABL Facility (a)
|
6.15%
|
|
Mar. 2017
|
|
$
|
—
|
|
|
$
|
22,679
|
|
|
$
|
22,679
|
|
|
$
|
101,832
|
|
2018 Notes (b)
|
9.875%
|
|
Apr. 2018
|
|
523
|
|
|
4,650
|
|
|
40,436
|
|
|
400,000
|
|
||||
2021 Notes (c)
|
10.00%
|
|
Apr. 2021
|
|
5,420
|
|
|
65,165
|
|
|
351,294
|
|
|
—
|
|
||||
Term Loan (d)
|
13.00%
|
|
Apr. 2018
|
|
3,055
|
|
|
60,711
|
|
|
60,711
|
|
|
—
|
|
||||
Vehicle financings (e)
|
5.11%
|
|
Various
|
|
—
|
|
|
7,699
|
|
|
7,699
|
|
|
12,303
|
|
||||
Note payable (f)
|
4.25%
|
|
Apr. 2019
|
|
—
|
|
|
4,778
|
|
|
4,778
|
|
|
6,492
|
|
||||
Total debt
|
|
|
|
|
$
|
8,998
|
|
|
$
|
165,682
|
|
|
487,597
|
|
|
520,627
|
|
||
Original issue discount and premium for 2018 Notes (g)
|
|
|
|
|
|
(27
|
)
|
|
(452
|
)
|
|||||||||
Original issue discount and premium for 2021 Notes (g)
|
|
|
|
|
|
(282
|
)
|
|
—
|
|
|||||||||
Debt issuance costs presented with debt (i)
|
|
|
|
|
|
(8,998
|
)
|
|
(8,708
|
)
|
|||||||||
Debt discount for issuance of warrants (j)
|
|
|
|
|
|
(6,499
|
)
|
|
—
|
|
|||||||||
Total debt, net
|
|
|
|
|
|
|
|
|
471,791
|
|
|
511,467
|
|
||||||
Less: current portion of long-term debt (k)(l)
|
|
|
|
|
|
(465,835
|
)
|
|
(499,709
|
)
|
|||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
$
|
5,956
|
|
|
$
|
11,758
|
|
(a)
|
The interest rate presented represents the interest rate on the
$40.0 million
ABL Facility at
December 31, 2016
.
|
(b)
|
The interest rate presented represents the coupon rate on our 2018 Notes, excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately
11.0%
. Interest payments are due semi-annually on April 15 and October 15 of each year.
|
(c)
|
The interest rate presented represents the current coupon rate on our 2021 Notes, excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2021 Notes is approximately
12.4%
. Interest is paid in kind semi-annually by increasing the principal amount payable and due at maturity and/or in cash as follows: interest payable on October 15, 2016 will be paid in kind at an annual rate of
12.5%
; interest payable after October 15, 2016 but on or before April 15, 2018 will be paid at a rate of
10.0%
with
50%
in kind and
50%
in cash; interest payable after April 15, 2018 will be paid in cash at a rate of
10.0%
until maturity.
|
(d)
|
The Term Loan accrues interest at a rate of
13.0%
compounded monthly and which is paid in kind by increasing the principal amount payable thereunder. Principal including the paid in kind interest is due April 15, 2018. Additionally, a total of
$3.1 million
in amendment fees were added to the principal amount outstanding thereunder in lieu of a cash payment and capitalized as debt issuance costs.
|
(e)
|
Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately
5.11%
, which mature in varying installments between 2017 and 2020. Capital lease obligations were
$7.7 million
and
$12.3 million
at
December 31, 2016
and
December 31, 2015
, respectively.
|
(f)
|
During the three months ended June 30, 2015, we settled our
$11.0 million
financing obligation to acquire the remaining
49.0%
interest in Appalachian Water Services, LLC ("AWS") from the non-controlling interest holder with a
$4.0 million
cash payment and a
$7.4 million
note payable with principal and interest due in equal quarterly installments through April 2019.
|
(g)
|
As discussed in greater detail in the "Exchange Offer" section below, on April 15, 2016,
$327.2 million
in principal 2018 Notes were exchanged for new 2021 Notes. The note for note exchange was accounted for as a modification, and as a result
$57.3 thousand
and
$16.8 thousand
of the original issuance discount and premium, respectively, will continue to be amortized over the remaining term of the 2018 Notes, while
$0.5 million
and
$0.1 million
of the original issuance
|
(h)
|
The estimated fair value of our 2018 Notes and our 2021 Notes is based on reported trading prices as of
December 31, 2016
. Our ABL Facility, Term Loan, note payable and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.
|
(i)
|
As discussed previously in Note 2, upon retrospective adoption of ASU 2015-03, we have presented the debt issuance costs associated with the 2018 Notes, 2021 Notes and Term Loan in the balance sheet as a direct deduction from the carrying amount of the debt liability as of
December 31, 2016
and
December 31, 2015
. In accordance with ASU 2015-15, the debt issuance costs related to the ABL Facility should be presented as an asset, and are included in "Other current assets" on the consolidated balance sheet as of
December 31, 2015
. There were
no
debt issuance costs remaining associated with our ABL Facility as of December 31, 2016. Additionally, as discussed in greater detail in the "Exchange Offer" section below, on April 15, 2016,
$327.2 million
in principal 2018 Notes were exchanged for new 2021 Notes. The note for note exchange was accounted for as a modification, and as a result
$0.8 million
of the original debt issuance costs associated with the 2018 Notes will continue to be amortized over the remaining term of the 2018 Notes, while
$6.3 million
will be amortized over the term of the new 2021 Notes. Further, a total of
$32.3 million
in principal 2018 Notes were exchanged for common stock and
$0.6 million
of the original debt issuance costs associated with the 2018 Notes were included in the calculation of the gain/(loss) on extinguishment.
|
(j)
|
The debt discount for issuance of warrants represents the initial fair value of the warrants issued in connection with the debt restructuring described in the "Exchange Offer, 2018 Notes and 2021 Notes" and "Term Loan" sections below, which will be amortized through interest expense over the terms of the new 2021 Notes and the Term Loan. As described further in
Note 11
, these warrants are accounted for as derivative liabilities.
|
(k)
|
As the scheduled maturity date of the ABL Facility was March 31, 2016, the carrying value of the ABL Facility is presented in current portion of long-term debt in the consolidated balance sheet as of
December 31, 2016
. Further, due to the default of the ABL Facility as of March 31, 2017, and the resulting cross-default of the 2018 Notes, 2021 Notes and Term Loan, these items are also included in current portion of long-term debt as of December 31, 2016. Finally, the principal payments due within one year for the vehicle financings and note payable are also included in current portion of long-term debt as of December 31, 2016.
|
(l)
|
The carrying value of the ABL Facility and the 2018 Notes were presented in current portion of long-term debt as of December 31, 2015 due to the probability of breaching one of the financial covenants at that date. In addition, the principal payments due within one year for the vehicle financings and note payable were also included in current portion of long-term debt as of December 31, 2015.
|
2017
|
$
|
481,580
|
|
2018
|
3,404
|
|
|
2019
|
1,995
|
|
|
2020
|
618
|
|
|
2021
|
—
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
487,597
|
|
•
|
Reduced the maximum revolver commitments from
$125.0 million
to
$100.0 million
;
|
•
|
Replaced the leverage ratio financial maintenance covenant with a new minimum EBITDA financial maintenance covenant that will be tested monthly;
|
•
|
Amended the definition of “EBITDA” for purposes of the financial maintenance covenant to provide allowances for certain unusual or non-recurring fees, costs and expenses, with testing monthly beginning in April 2016;
|
•
|
Amended the definition of “Borrowing Base” (i) to set the eligible equipment advance rates based on net book value at
60%
and on Net Orderly Liquidation Value (as defined in the ABL Facility) at
80%
and (ii) to cap Borrowing Base availability attributable to eligible equipment at
75%
;
|
•
|
Increased the default rate upon the occurrence and continuation of an event of default from
2%
to
4%
;
|
•
|
Increased the applicable margin on LIBOR Rate and Base Rate Loans (each as defined in the ABL Facility) and the unused line fee;
|
•
|
Eliminated our ability to voluntarily reduce the commitments without termination of the ABL Facility;
|
•
|
Required us to apply proceeds from the Restructuring transactions and related agreements to pay down the ABL Facility;
|
•
|
Amended the definition of “Permitted Disposition” to permit the sale of our equity investment in Underground Solutions, Inc., discussed further in Note 19, and to expand the permitted disposition general basket (which excludes the sale of machinery and equipment in the ordinary course of business) from
$5.0 million
to
$7.5 million
;
|
•
|
Applied a Permitted Disposition Reserve of
50%
against our availability for net cash proceeds in excess of
$7.5 million
made on or after March 10, 2016 for sales specifically related to the Permitted Disposition general basket; and
|
•
|
Amended certain definitions in connection with the Restructuring transactions, including “Change of Control”, “Permitted Indebtedness”, and “Permitted Liens”.
|
•
|
Reduced the maximum revolver commitments from
$100.0 million
to
$85.0 million
;
|
•
|
Amended the minimum EBITDA financial maintenance covenant, modifying the applicable periods for measurement and reducing the applicable amounts required to be achieved for each period;
|
•
|
Changed the scheduled maturity date of the ABL Facility from January 15, 2018 to December 31, 2016;
|
•
|
Added a covenant requiring us to refinance the ABL Facility in full on or before September 30, 2016;
|
•
|
Required us to consummate a rights offering on or before July 29, 2016, which was subsequently waived by the ABL Lenders on August 5, 2016, and to apply the proceeds from the rights offering to pay down the ABL Facility, which must equal
$5.0 million
(with any shortfall to be covered by the
$5.0 million
backstop funds previously placed in escrow by Mark D. Johnsrud, the Company’s Chairman and Chief Executive Officer);
|
•
|
Replaced the minimum fixed charge coverage ratio covenant with an immediate availability block in the amount of
$12.5 million
, increasing to
$15.0 million
upon receipt of the Rights Offering proceeds;
|
•
|
Established a Permitted Disposition Reserve equal to
50%
of the aggregate amount of net cash proceeds arising from Permitted Dispositions of any property (excluding the sale of machinery and equipment in the ordinary course of business) consummated after June 29, 2016; and
|
•
|
Increased the applicable margin on LIBOR Rate and Base Rate Loans (as defined in the ABL Facility).
|
•
|
Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;
|
•
|
Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
•
|
Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
Fair Value
|
||
December 31, 2016
|
|
||
Assets: Cost method investment
|
$
|
—
|
|
Liabilities:
|
|
||
Derivative warrant liability
|
4,298
|
|
|
Contingent consideration
|
8,500
|
|
|
|
|
||
December 31, 2015
|
|
||
Assets: Cost method investment
|
$
|
3,169
|
|
Liabilities:
|
|
||
Derivative warrant liability
|
—
|
|
|
Contingent consideration
|
8,628
|
|
|
|
December 31, 2016
|
||
Balance at beginning of period
|
|
$
|
—
|
|
Issuance of warrants
|
|
7,838
|
|
|
Exercise of warrants
|
|
(229
|
)
|
|
Adjustments to estimated fair value
|
|
(3,311
|
)
|
|
Balance at end of period
|
|
$
|
4,298
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Balance at beginning of period
|
$
|
8,628
|
|
|
$
|
9,824
|
|
Cash payments
|
—
|
|
|
(909
|
)
|
||
Changes in fair value of contingent consideration, net
|
(128
|
)
|
|
(287
|
)
|
||
Balance at end of period
|
8,500
|
|
|
8,628
|
|
||
Less: current portion
|
—
|
|
|
(8,628
|
)
|
||
Long-term portion of contingent consideration
|
$
|
8,500
|
|
|
$
|
—
|
|
|
|
Number of Warrants
|
|
Outstanding as of December 31, 2015
|
|
—
|
|
Issued
|
|
26,400
|
|
Exercised
|
|
(1,117
|
)
|
Outstanding as of December 31, 2016
|
|
25,283
|
|
|
|
Period Ended
|
|
At Issuance
|
||||
|
|
December 31, 2016
|
|
April 15, 2016
|
||||
Exercise price
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Closing stock price
|
|
$
|
0.18
|
|
|
$
|
0.37
|
|
Risk free rate
|
|
2.40
|
%
|
|
0.21
|
%
|
||
Expected volatility
|
|
79.5
|
%
|
|
242.0
|
%
|
•
|
On March 14, 2014, we issued approximately
0.2 million
shares of common stock to the former shareholders of Complete Vacuum and Rentals, Inc. (or "CVRI") under the terms of a February 2014 settlement agreement and release, which resolved certain previous disputes regarding additional consideration due by us and indemnification obligations of the former shareholders of CVRI.
|
•
|
On July 2, 2014, we issued approximately
0.3 million
shares of common stock in connection with the settlement of the 2010 Class Action litigation.
|
•
|
On August 27, 2014, we issued an additional
0.5 million
shares of common stock in connection with the settlement of the 2010 Class Action litigation.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Loss from continuing operations
|
$
|
(167,621
|
)
|
|
$
|
(195,167
|
)
|
|
$
|
(457,178
|
)
|
Loss from discontinued operations
|
(1,235
|
)
|
|
(287
|
)
|
|
(58,426
|
)
|
|||
Net loss attributable to common stockholders
|
$
|
(168,856
|
)
|
|
$
|
(195,454
|
)
|
|
$
|
(515,604
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares—basic
|
90,979
|
|
|
27,681
|
|
|
26,090
|
|
|||
Common stock equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average shares—diluted
|
90,979
|
|
|
27,681
|
|
|
26,090
|
|
|||
|
|
|
|
|
|
||||||
Basic and diluted loss per common share from continuing operations
|
$
|
(1.84
|
)
|
|
$
|
(7.05
|
)
|
|
$
|
(17.52
|
)
|
Basic and diluted loss per common share from discontinued operations
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(2.24
|
)
|
|||
Net loss per basic and diluted common share
|
$
|
(1.85
|
)
|
|
$
|
(7.06
|
)
|
|
$
|
(19.76
|
)
|
|
|
|
|
|
|
||||||
Antidilutive stock-based awards excluded
|
367
|
|
|
799
|
|
|
230
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Stock options
|
|
$
|
213
|
|
|
$
|
536
|
|
|
$
|
835
|
|
Restricted stock
|
|
412
|
|
|
428
|
|
|
766
|
|
|||
Restricted stock units
|
|
500
|
|
|
1,357
|
|
|
1,370
|
|
|||
Total share-based compensation expense
|
|
$
|
1,125
|
|
|
$
|
2,321
|
|
|
$
|
2,971
|
|
|
|
Year Ended December 31,
|
||||
|
|
2015
|
|
2014
|
||
Volatility
|
|
55.3
|
%
|
|
48.7
|
%
|
Expected term (years)
|
|
8.0
|
|
|
8.0
|
|
Risk free interest rate
|
|
1.8
|
%
|
|
2.4
|
%
|
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
Options
|
|
Shares Outstanding
|
|
Shares Exercisable
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining
Contractual
Term (Years)
|
Aggregate Intrinsic Value
|
||||||
December 31, 2013
|
|
316
|
|
|
|
|
$
|
39.40
|
|
|
|
|
|||
Granted
|
|
16
|
|
|
|
|
$
|
16.14
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|||
Forfeited, canceled, or expired
|
|
(100
|
)
|
|
|
|
$
|
33.46
|
|
|
|
|
|||
December 31, 2014
|
|
232
|
|
|
|
|
$
|
40.30
|
|
|
7.2
|
$
|
—
|
|
|
Exercisable at December 31, 2014
|
|
|
|
102
|
|
|
$
|
45.82
|
|
|
5.9
|
$
|
—
|
|
|
Granted
|
|
736
|
|
|
|
|
$
|
5.29
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|||
Forfeited, canceled, or expired
|
|
(145
|
)
|
|
|
|
$
|
28.06
|
|
|
|
|
|||
December 31, 2015
|
|
823
|
|
|
|
|
$
|
11.16
|
|
|
8.6
|
$
|
—
|
|
|
Exercisable at December 31, 2015
|
|
|
|
92
|
|
|
$
|
40.63
|
|
|
5.3
|
$
|
—
|
|
|
Granted
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|||
Forfeited, canceled, or expired
|
|
(456
|
)
|
|
|
|
$
|
7.58
|
|
|
|
|
|||
December 31, 2016
|
|
367
|
|
|
|
|
$
|
13.55
|
|
|
7.2
|
$
|
—
|
|
|
Exercisable at December 31, 2016
|
|
|
|
185
|
|
|
$
|
21.24
|
|
|
6.3
|
$
|
—
|
|
Non-Vested Restricted Stock
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Non-vested at December 31, 2013
|
|
93
|
|
|
$
|
35.64
|
|
Granted
|
|
65
|
|
|
$
|
7.92
|
|
Vested
|
|
(87
|
)
|
|
$
|
33.96
|
|
Forfeited
|
|
(5
|
)
|
|
$
|
39.90
|
|
Non-vested at December 31, 2014
|
|
66
|
|
|
$
|
9.78
|
|
Granted
|
|
420
|
|
|
$
|
1.25
|
|
Vested
|
|
(39
|
)
|
|
$
|
10.23
|
|
Forfeited
|
|
—
|
|
|
$
|
—
|
|
Non-vested at December 31, 2015
|
|
447
|
|
|
$
|
1.73
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
Vested
|
|
(236
|
)
|
|
$
|
2.00
|
|
Forfeited
|
|
(1
|
)
|
|
$
|
41.50
|
|
Non-vested at December 31, 2016
|
|
210
|
|
|
$
|
1.25
|
|
Non-Vested Restricted Stock Units
|
|
Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||
Non-vested at December 31, 2013
|
|
56
|
|
|
$
|
35.64
|
|
Granted
|
|
296
|
|
|
$
|
14.90
|
|
Vested
|
|
(26
|
)
|
|
$
|
16.05
|
|
Forfeited
|
|
(78
|
)
|
|
$
|
18.19
|
|
Non-vested at December 31, 2014
|
|
248
|
|
|
$
|
18.42
|
|
Granted
|
|
164
|
|
|
$
|
3.54
|
|
Vested
|
|
(123
|
)
|
|
$
|
20.00
|
|
Forfeited
|
|
(29
|
)
|
|
$
|
10.94
|
|
Non-vested at December 31, 2015
|
|
260
|
|
|
$
|
8.04
|
|
Granted
|
|
1
|
|
|
$
|
0.30
|
|
Vested
|
|
(71
|
)
|
|
$
|
11.69
|
|
Forfeited
|
|
(151
|
)
|
|
$
|
4.81
|
|
Non-vested at December 31, 2016
|
|
39
|
|
|
$
|
13.93
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
477
|
|
|
$
|
(137
|
)
|
|
$
|
—
|
|
State
|
105
|
|
|
21
|
|
|
178
|
|
|||
Total Current
|
582
|
|
|
(116
|
)
|
|
178
|
|
|||
Deferred income tax expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
217
|
|
|
115
|
|
|
(8,589
|
)
|
|||
State
|
8
|
|
|
(116
|
)
|
|
(4,052
|
)
|
|||
Total Deferred
|
225
|
|
|
(1
|
)
|
|
(12,641
|
)
|
|||
Total income tax expense (benefit) from continuing operations
|
$
|
807
|
|
|
$
|
(117
|
)
|
|
$
|
(12,463
|
)
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
U.S. federal income tax benefit at statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local income taxes, net of federal benefit
|
3.3
|
%
|
|
0.9
|
%
|
|
1.3
|
%
|
Compensation
|
(0.2
|
)%
|
|
(0.6
|
)%
|
|
(0.2
|
)%
|
Change in fair value of contingent consideration
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
Impairment of Goodwill
|
—
|
%
|
|
(18.8
|
)%
|
|
(19.0
|
)%
|
Change in valuation allowance
|
(38.7
|
)%
|
|
(16.4
|
)%
|
|
(14.1
|
)%
|
Other
|
0.1
|
%
|
|
(0.1
|
)%
|
|
(0.4
|
)%
|
(Expense) benefit for income taxes
|
(0.5
|
)%
|
|
0.0
|
%
|
|
2.7
|
%
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Reserves
|
$
|
1,604
|
|
|
$
|
1,461
|
|
Deferred financing costs
|
530
|
|
|
—
|
|
||
Net operating losses
|
123,382
|
|
|
154,007
|
|
||
Federal credit carryover
|
477
|
|
|
—
|
|
||
Equity based compensation
|
624
|
|
|
602
|
|
||
Long-term debt
|
74,412
|
|
|
—
|
|
||
Intangible asset and goodwill
|
16,781
|
|
|
18,815
|
|
||
Capital loss carry forward
|
67,766
|
|
|
68,157
|
|
||
Other
|
6,360
|
|
|
7,902
|
|
||
Total
|
291,936
|
|
|
250,944
|
|
||
Less: Valuation allowance
|
(236,080
|
)
|
|
(171,720
|
)
|
||
Total deferred tax assets
|
55,856
|
|
|
79,224
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets
|
(55,649
|
)
|
|
(77,470
|
)
|
||
Deferred financing costs
|
—
|
|
|
(1,433
|
)
|
||
Other
|
(702
|
)
|
|
(591
|
)
|
||
Total deferred tax liabilities
|
(56,351
|
)
|
|
(79,494
|
)
|
||
Net deferred tax liability
|
$
|
(495
|
)
|
|
$
|
(270
|
)
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Balance at beginning of period
|
$
|
171,720
|
|
|
$
|
70,331
|
|
Additions to valuation allowance
|
64,360
|
|
|
101,389
|
|
||
Valuation allowance release, net
|
—
|
|
|
—
|
|
||
Balance at end of period
|
$
|
236,080
|
|
|
$
|
171,720
|
|
Leased equipment
|
$
|
16,419
|
|
Less accumulated depreciation
|
(11,103
|
)
|
|
Leased equipment, net
|
$
|
5,316
|
|
|
Operating Leases
|
|
Capital Leases
|
||||
2017
|
$
|
3,572
|
|
|
$
|
4,979
|
|
2018
|
2,448
|
|
|
1,788
|
|
||
2019
|
830
|
|
|
680
|
|
||
2020
|
724
|
|
|
622
|
|
||
2021
|
697
|
|
|
—
|
|
||
Thereafter
|
1,682
|
|
|
—
|
|
||
Total minimum lease payments
|
$
|
9,953
|
|
|
8,069
|
|
|
Less amount representing executor costs
|
|
|
(46
|
)
|
|||
Net minimum lease payments
|
|
|
8,023
|
|
|||
Less amount representing interest (5.11% at December 31, 2016)
|
|
|
(324
|
)
|
|||
Present value of net minimum lease payments
|
|
|
$
|
7,699
|
|
|
Northeast
|
|
Southern
|
|
Rocky Mountain
|
|
Corporate/ Other
|
|
Total
|
||||||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
36,446
|
|
|
$
|
33,166
|
|
|
$
|
82,564
|
|
|
$
|
—
|
|
|
$
|
152,176
|
|
Direct operating expenses
|
36,673
|
|
|
27,885
|
|
|
65,066
|
|
|
—
|
|
|
129,624
|
|
|||||
General and administrative expenses
|
2,632
|
|
|
2,951
|
|
|
5,951
|
|
|
25,479
|
|
|
37,013
|
|
|||||
Depreciation and amortization
|
13,446
|
|
|
15,559
|
|
|
31,498
|
|
|
260
|
|
|
60,763
|
|
|||||
Operating loss
|
(24,330
|
)
|
|
(15,656
|
)
|
|
(51,663
|
)
|
|
(25,739
|
)
|
|
(117,388
|
)
|
|||||
Loss from continuing operations before income taxes
|
(24,226
|
)
|
|
(15,741
|
)
|
|
(51,951
|
)
|
|
(74,896
|
)
|
|
(166,814
|
)
|
|||||
Total assets (a)
|
46,094
|
|
|
107,350
|
|
|
184,116
|
|
|
5,044
|
|
|
342,604
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
92,135
|
|
|
68,543
|
|
|
196,021
|
|
|
—
|
|
|
356,699
|
|
|||||
Direct operating expenses
|
74,364
|
|
|
58,303
|
|
|
147,214
|
|
|
—
|
|
|
279,881
|
|
|||||
General and administrative expenses
|
4,606
|
|
|
4,891
|
|
|
6,824
|
|
|
23,006
|
|
|
39,327
|
|
|||||
Depreciation and amortization
|
16,667
|
|
|
18,188
|
|
|
35,043
|
|
|
613
|
|
|
70,511
|
|
|||||
Operating loss
|
(3,624
|
)
|
|
(19,422
|
)
|
|
(97,781
|
)
|
|
(24,012
|
)
|
|
(144,839
|
)
|
|||||
Loss from continuing operations before income taxes
|
(4,228
|
)
|
|
(19,526
|
)
|
|
(97,632
|
)
|
|
(73,898
|
)
|
|
(195,284
|
)
|
|||||
Total assets (a)
|
76,472
|
|
|
128,482
|
|
|
263,871
|
|
|
53,794
|
|
|
522,619
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
95,577
|
|
|
105,935
|
|
|
334,770
|
|
|
—
|
|
|
536,282
|
|
|||||
Direct operating expenses
|
78,621
|
|
|
86,987
|
|
|
226,850
|
|
|
—
|
|
|
392,458
|
|
|||||
General and administrative expenses
|
9,929
|
|
|
14,233
|
|
|
10,791
|
|
|
24,234
|
|
|
59,187
|
|
|||||
Depreciation and amortization
|
15,643
|
|
|
18,321
|
|
|
51,247
|
|
|
669
|
|
|
85,880
|
|
|||||
Operating loss
|
(42,447
|
)
|
|
(80,491
|
)
|
|
(269,813
|
)
|
|
(24,903
|
)
|
|
(417,654
|
)
|
|||||
Loss from continuing operations before income taxes
|
(40,608
|
)
|
|
(82,440
|
)
|
|
(269,954
|
)
|
|
(76,639
|
)
|
|
(469,641
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
—
|
|
|
$
|
19,100
|
|
|
$
|
114,382
|
|
Income (loss) from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
1,171
|
|
|
$
|
(68,258
|
)
|
Income tax (expense) benefit
|
—
|
|
|
(265
|
)
|
|
9,832
|
|
|||
Income (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
906
|
|
|
$
|
(58,426
|
)
|
Loss on sale of TFI, net of taxes
|
(1,235
|
)
|
|
(1,193
|
)
|
|
—
|
|
|||
Loss on discontinued operations, net of income taxes
|
$
|
(1,235
|
)
|
|
$
|
(287
|
)
|
|
$
|
(58,426
|
)
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
46,975
|
|
|
$
|
33,978
|
|
|
$
|
35,441
|
|
|
$
|
35,782
|
|
Loss from continuing operations
|
|
(27,271
|
)
|
|
(40,638
|
)
|
|
(38,396
|
)
|
|
(61,316
|
)
|
||||
Income (loss) from discontinued operations
|
|
55
|
|
|
(1,290
|
)
|
|
—
|
|
|
—
|
|
||||
Net loss attributable to common stockholders
|
|
(27,216
|
)
|
|
(41,928
|
)
|
|
(38,396
|
)
|
|
(61,316
|
)
|
||||
Net loss per common share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted loss from continuing operations
|
|
(0.98
|
)
|
|
(0.60
|
)
|
|
(0.30
|
)
|
|
(0.45
|
)
|
||||
Basic and diluted loss from discontinued operations
|
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
||||
Net loss per basic and diluted common share
|
|
$
|
(0.98
|
)
|
|
$
|
(0.62
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.45
|
)
|
|
|
Three Months Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
119,112
|
|
|
$
|
92,427
|
|
|
$
|
76,528
|
|
|
$
|
68,632
|
|
Loss from continuing operations
|
|
(11,995
|
)
|
|
(20,647
|
)
|
|
(128,113
|
)
|
|
(34,412
|
)
|
||||
Loss (income) from discontinued operations
|
|
921
|
|
|
(2,089
|
)
|
|
350
|
|
|
531
|
|
||||
Net loss attributable to common stockholders
|
|
(11,074
|
)
|
|
(22,736
|
)
|
|
(127,763
|
)
|
|
(33,881
|
)
|
||||
Net loss per common share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted loss from continuing operations
|
|
(0.44
|
)
|
|
(0.75
|
)
|
|
(4.61
|
)
|
|
(1.24
|
)
|
||||
Basic and diluted income (loss) from discontinued operations
|
|
0.03
|
|
|
(0.08
|
)
|
|
0.01
|
|
|
0.02
|
|
||||
Net loss per basic and diluted common share
|
|
$
|
(0.41
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
(4.60
|
)
|
|
$
|
(1.22
|
)
|
•
|
in connection with any sale, disposition or transfer of all or substantially all of the assets to a person that is not the Company or a subsidiary guarantor;
|
•
|
in connection with any sale, disposition or transfer of all of the capital stock of that subsidiary guarantor to a person that is not the Company or a subsidiary guarantor;
|
•
|
if we designate any restricted subsidiary that is a subsidiary guarantor to be an unrestricted subsidiary; or
|
•
|
upon legal defeasance or the discharge of our obligations under the Indenture.
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
913
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
994
|
|
Restricted cash
|
475
|
|
|
945
|
|
|
—
|
|
|
1,420
|
|
||||
Accounts receivable, net
|
—
|
|
|
23,795
|
|
|
—
|
|
|
23,795
|
|
||||
Other current assets
|
1,022
|
|
|
5,065
|
|
|
—
|
|
|
6,087
|
|
||||
Assets held for sale
|
—
|
|
|
1,182
|
|
|
—
|
|
|
1,182
|
|
||||
Total current assets
|
2,410
|
|
|
31,068
|
|
|
—
|
|
|
33,478
|
|
||||
Property, plant and equipment, net
|
2,363
|
|
|
291,816
|
|
|
—
|
|
|
294,179
|
|
||||
Equity investments
|
(51,590
|
)
|
|
73
|
|
|
51,590
|
|
|
73
|
|
||||
Intangible assets, net
|
—
|
|
|
14,310
|
|
|
—
|
|
|
14,310
|
|
||||
Other assets
|
363,291
|
|
|
94,388
|
|
|
(457,115
|
)
|
|
564
|
|
||||
Total assets
|
$
|
316,474
|
|
|
$
|
431,655
|
|
|
$
|
(405,525
|
)
|
|
$
|
342,604
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
412
|
|
|
$
|
3,635
|
|
|
$
|
—
|
|
|
$
|
4,047
|
|
Accrued liabilities
|
6,961
|
|
|
11,826
|
|
|
—
|
|
|
18,787
|
|
||||
Current contingent consideration
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Current portion of long-term debt
|
459,313
|
|
|
6,522
|
|
|
—
|
|
|
465,835
|
|
||||
Derivative warrant liability
|
4,298
|
|
|
—
|
|
|
—
|
|
|
4,298
|
|
||||
Total current liabilities
|
470,984
|
|
|
21,983
|
|
|
—
|
|
|
492,967
|
|
||||
Deferred income taxes
|
(71,645
|
)
|
|
72,140
|
|
|
—
|
|
|
495
|
|
||||
Long-term debt
|
—
|
|
|
5,956
|
|
|
—
|
|
|
5,956
|
|
||||
Long-term contingent consideration
|
—
|
|
|
8,500
|
|
|
—
|
|
|
8,500
|
|
||||
Other long-term liabilities
|
86,201
|
|
|
374,666
|
|
|
(457,115
|
)
|
|
3,752
|
|
||||
Total shareholders' deficit
|
(169,066
|
)
|
|
(51,590
|
)
|
|
51,590
|
|
|
(169,066
|
)
|
||||
Total liabilities and shareholders' deficit
|
$
|
316,474
|
|
|
$
|
431,655
|
|
|
$
|
(405,525
|
)
|
|
$
|
342,604
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
40,660
|
|
|
$
|
(1,351
|
)
|
|
$
|
—
|
|
|
$
|
39,309
|
|
Restricted cash
|
4,250
|
|
|
—
|
|
|
—
|
|
|
4,250
|
|
||||
Accounts receivable, net
|
—
|
|
|
42,188
|
|
|
—
|
|
|
42,188
|
|
||||
Other current assets
|
2,654
|
|
|
6,080
|
|
|
—
|
|
|
8,734
|
|
||||
Total current assets
|
47,564
|
|
|
46,917
|
|
|
—
|
|
|
94,481
|
|
||||
Property, plant and equipment, net
|
2,609
|
|
|
403,579
|
|
|
—
|
|
|
406,188
|
|
||||
Equity investments
|
43,542
|
|
|
581
|
|
|
(40,373
|
)
|
|
3,750
|
|
||||
Intangible assets, net
|
—
|
|
|
16,867
|
|
|
—
|
|
|
16,867
|
|
||||
Other assets
|
404,620
|
|
|
72,137
|
|
|
(475,424
|
)
|
|
1,333
|
|
||||
Total assets
|
$
|
498,335
|
|
|
$
|
540,081
|
|
|
$
|
(515,797
|
)
|
|
$
|
522,619
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
172
|
|
|
$
|
6,735
|
|
|
$
|
—
|
|
|
$
|
6,907
|
|
Accrued liabilities
|
13,824
|
|
|
16,019
|
|
|
—
|
|
|
29,843
|
|
||||
Current contingent consideration
|
—
|
|
|
8,628
|
|
|
—
|
|
|
8,628
|
|
||||
Current portion of long-term debt
|
492,671
|
|
|
7,038
|
|
|
—
|
|
|
499,709
|
|
||||
Total current liabilities
|
506,667
|
|
|
38,420
|
|
|
—
|
|
|
545,087
|
|
||||
Deferred income taxes
|
(32,488
|
)
|
|
32,758
|
|
|
—
|
|
|
270
|
|
||||
Long-term debt
|
—
|
|
|
11,758
|
|
|
—
|
|
|
11,758
|
|
||||
Other long-term liabilities
|
62,427
|
|
|
416,772
|
|
|
(475,424
|
)
|
|
3,775
|
|
||||
Total shareholders' deficit
|
(38,271
|
)
|
|
40,373
|
|
|
(40,373
|
)
|
|
(38,271
|
)
|
||||
Total liabilities and shareholders' deficit
|
$
|
498,335
|
|
|
$
|
540,081
|
|
|
$
|
(515,797
|
)
|
|
$
|
522,619
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenue
|
$
|
—
|
|
|
$
|
152,176
|
|
|
$
|
—
|
|
|
$
|
152,176
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses
|
—
|
|
|
129,624
|
|
|
—
|
|
|
129,624
|
|
||||
General and administrative expenses
|
25,479
|
|
|
11,534
|
|
|
—
|
|
|
37,013
|
|
||||
Depreciation and amortization
|
260
|
|
|
60,503
|
|
|
—
|
|
|
60,763
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
42,164
|
|
|
—
|
|
|
42,164
|
|
||||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total costs and expenses
|
25,739
|
|
|
243,825
|
|
|
—
|
|
|
269,564
|
|
||||
Loss from operations
|
(25,739
|
)
|
|
(91,649
|
)
|
|
—
|
|
|
(117,388
|
)
|
||||
Interest expense, net
|
(53,541
|
)
|
|
(989
|
)
|
|
—
|
|
|
(54,530
|
)
|
||||
Other income, net
|
3,311
|
|
|
752
|
|
|
—
|
|
|
4,063
|
|
||||
Loss on extinguishment of debt
|
(674
|
)
|
|
—
|
|
|
—
|
|
|
(674
|
)
|
||||
(Loss) income from equity investments
|
(126,597
|
)
|
|
(32
|
)
|
|
128,344
|
|
|
1,715
|
|
||||
(Loss) income from continuing operations before income taxes
|
(203,240
|
)
|
|
(91,918
|
)
|
|
128,344
|
|
|
(166,814
|
)
|
||||
Income tax benefit (expense) (a)
|
35,619
|
|
|
(36,426
|
)
|
|
—
|
|
|
(807
|
)
|
||||
(Loss) income from continuing operations
|
(167,621
|
)
|
|
(128,344
|
)
|
|
128,344
|
|
|
(167,621
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
(1,235
|
)
|
|
—
|
|
|
—
|
|
|
(1,235
|
)
|
||||
Net (loss) income attributable to common shareholders
|
$
|
(168,856
|
)
|
|
$
|
(128,344
|
)
|
|
$
|
128,344
|
|
|
$
|
(168,856
|
)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenue
|
$
|
—
|
|
|
$
|
356,699
|
|
|
$
|
—
|
|
|
$
|
356,699
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses
|
—
|
|
|
279,881
|
|
|
—
|
|
|
279,881
|
|
||||
General and administrative expenses
|
23,006
|
|
|
16,321
|
|
|
—
|
|
|
39,327
|
|
||||
Depreciation and amortization
|
613
|
|
|
69,898
|
|
|
—
|
|
|
70,511
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Impairment of goodwill
|
—
|
|
|
104,721
|
|
|
—
|
|
|
104,721
|
|
||||
Other, net
|
393
|
|
|
6,705
|
|
|
—
|
|
|
7,098
|
|
||||
Total costs and expenses
|
24,012
|
|
|
477,526
|
|
|
—
|
|
|
501,538
|
|
||||
Loss from operations
|
(24,012
|
)
|
|
(120,827
|
)
|
|
—
|
|
|
(144,839
|
)
|
||||
Interest expense, net
|
(47,741
|
)
|
|
(1,453
|
)
|
|
—
|
|
|
(49,194
|
)
|
||||
Other income, net
|
—
|
|
|
958
|
|
|
—
|
|
|
958
|
|
||||
Loss on extinguishment of debt
|
(2,145
|
)
|
|
—
|
|
|
—
|
|
|
(2,145
|
)
|
||||
(Loss) income from equity investments
|
(130,855
|
)
|
|
(64
|
)
|
|
130,855
|
|
|
(64
|
)
|
||||
(Loss) income from continuing operations before income taxes
|
(204,753
|
)
|
|
(121,386
|
)
|
|
130,855
|
|
|
(195,284
|
)
|
||||
Income tax benefit (expense)
|
9,586
|
|
|
(9,469
|
)
|
|
—
|
|
|
117
|
|
||||
(Loss) income from continuing operations
|
(195,167
|
)
|
|
(130,855
|
)
|
|
130,855
|
|
|
(195,167
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
(287
|
)
|
|
—
|
|
|
—
|
|
|
(287
|
)
|
||||
Net (loss) income attributable to common shareholders
|
$
|
(195,454
|
)
|
|
$
|
(130,855
|
)
|
|
$
|
130,855
|
|
|
$
|
(195,454
|
)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenue
|
$
|
—
|
|
|
$
|
536,282
|
|
|
$
|
—
|
|
|
$
|
536,282
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Direct operating expenses
|
—
|
|
|
392,458
|
|
|
—
|
|
|
392,458
|
|
||||
General and administrative expenses
|
24,234
|
|
|
34,953
|
|
|
—
|
|
|
59,187
|
|
||||
Depreciation and amortization
|
669
|
|
|
85,211
|
|
|
—
|
|
|
85,880
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
112,436
|
|
|
—
|
|
|
112,436
|
|
||||
Impairment of goodwill
|
—
|
|
|
303,975
|
|
|
—
|
|
|
303,975
|
|
||||
Other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total costs and expenses
|
24,903
|
|
|
929,033
|
|
|
—
|
|
|
953,936
|
|
||||
Loss from operations
|
(24,903
|
)
|
|
(392,751
|
)
|
|
—
|
|
|
(417,654
|
)
|
||||
Interest expense, net
|
(48,559
|
)
|
|
(2,358
|
)
|
|
—
|
|
|
(50,917
|
)
|
||||
Other income, net
|
—
|
|
|
2,113
|
|
|
—
|
|
|
2,113
|
|
||||
Loss on extinguishment of debt
|
(3,177
|
)
|
|
—
|
|
|
—
|
|
|
(3,177
|
)
|
||||
(Loss) income from equity investments
|
(439,418
|
)
|
|
(6
|
)
|
|
439,418
|
|
|
(6
|
)
|
||||
(Loss) income from continuing operations before income taxes
|
(516,057
|
)
|
|
(393,002
|
)
|
|
439,418
|
|
|
(469,641
|
)
|
||||
Income tax benefit
|
453
|
|
|
12,010
|
|
|
—
|
|
|
12,463
|
|
||||
(Loss) income from continuing operations
|
(515,604
|
)
|
|
(380,992
|
)
|
|
439,418
|
|
|
(457,178
|
)
|
||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
(58,426
|
)
|
|
—
|
|
|
(58,426
|
)
|
||||
Net (loss) income attributable to common shareholders
|
$
|
(515,604
|
)
|
|
$
|
(439,418
|
)
|
|
$
|
439,418
|
|
|
$
|
(515,604
|
)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Consolidated
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net cash used in operating activities from continuing operations
|
$
|
(28,392
|
)
|
|
$
|
2,141
|
|
|
$
|
(26,251
|
)
|
Net cash used in operating activities from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in operating activities
|
(28,392
|
)
|
|
2,141
|
|
|
(26,251
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from the sale of property and equipment
|
27
|
|
|
10,669
|
|
|
10,696
|
|
|||
Purchase of property, plant and equipment
|
—
|
|
|
(3,826
|
)
|
|
(3,826
|
)
|
|||
Proceeds from the sale of UGSI
|
5,032
|
|
|
—
|
|
|
5,032
|
|
|||
Change in restricted cash
|
3,775
|
|
|
(945
|
)
|
|
2,830
|
|
|||
Net cash provided by investing activities from continuing operations
|
8,834
|
|
|
5,898
|
|
|
14,732
|
|
|||
Net cash used in investing activities from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by investing activities
|
8,834
|
|
|
5,898
|
|
|
14,732
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from revolving credit facility
|
154,514
|
|
|
—
|
|
|
154,514
|
|
|||
Payments on revolving credit facility
|
(233,667
|
)
|
|
—
|
|
|
(233,667
|
)
|
|||
Proceeds from term loan
|
55,000
|
|
|
—
|
|
|
55,000
|
|
|||
Payments for debt issuance costs
|
(1,029
|
)
|
|
—
|
|
|
(1,029
|
)
|
|||
Issuance of stock
|
5,000
|
|
|
—
|
|
|
5,000
|
|
|||
Payments on vehicle financing and other financing activities
|
(7
|
)
|
|
(6,607
|
)
|
|
(6,614
|
)
|
|||
Net cash used in financing activities from continuing operations
|
(20,189
|
)
|
|
(6,607
|
)
|
|
(26,796
|
)
|
|||
Net cash used in financing activities from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in financing activities
|
(20,189
|
)
|
|
(6,607
|
)
|
|
(26,796
|
)
|
|||
Net (decrease) increase in cash
|
(39,747
|
)
|
|
1,432
|
|
|
(38,315
|
)
|
|||
Cash and cash equivalents - beginning of year
|
40,660
|
|
|
(1,351
|
)
|
|
39,309
|
|
|||
Cash and cash equivalents - end of year
|
913
|
|
|
81
|
|
|
994
|
|
|||
Less: cash and cash equivalents of discontinued operations - end of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents of continuing operations - end of year
|
$
|
913
|
|
|
$
|
81
|
|
|
$
|
994
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Consolidated
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net cash provided by operating activities from continuing operations
|
$
|
33,977
|
|
|
$
|
15,850
|
|
|
$
|
49,827
|
|
Net cash used in operating activities from discontinued operations
|
—
|
|
|
(708
|
)
|
|
(708
|
)
|
|||
Net cash provided by operating activities
|
33,977
|
|
|
15,142
|
|
|
49,119
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from the sale of TFI
|
78,897
|
|
|
—
|
|
|
78,897
|
|
|||
Proceeds from the sale of property and equipment
|
255
|
|
|
12,477
|
|
|
12,732
|
|
|||
Purchase of property, plant and equipment
|
—
|
|
|
(19,201
|
)
|
|
(19,201
|
)
|
|||
Change in restricted cash
|
(4,250
|
)
|
|
—
|
|
|
(4,250
|
)
|
|||
Net cash provided by (used in) investing activities from continuing operations
|
74,902
|
|
|
(6,724
|
)
|
|
68,178
|
|
|||
Net cash used in investing activities from discontinued operations
|
—
|
|
|
(181
|
)
|
|
(181
|
)
|
|||
Net cash provided by (used in) investing activities
|
74,902
|
|
|
(6,905
|
)
|
|
67,997
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|||||
Payments on revolving credit facility
|
(81,647
|
)
|
|
—
|
|
|
(81,647
|
)
|
|||
Payments for debt issuance costs
|
(225
|
)
|
|
—
|
|
|
(225
|
)
|
|||
Payments on vehicle financing and other financing activities
|
(148
|
)
|
|
(11,098
|
)
|
|
(11,246
|
)
|
|||
Net cash used in financing activities from continuing operations
|
(82,020
|
)
|
|
(11,098
|
)
|
|
(93,118
|
)
|
|||
Net cash used in financing activities from discontinued operations
|
—
|
|
|
(105
|
)
|
|
(105
|
)
|
|||
Net cash used in financing activities
|
(82,020
|
)
|
|
(11,203
|
)
|
|
(93,223
|
)
|
|||
Net increase (decrease) in cash
|
26,859
|
|
|
(2,966
|
)
|
|
23,893
|
|
|||
Cash and cash equivalents - beginning of year
|
13,801
|
|
|
1,615
|
|
|
15,416
|
|
|||
Cash and cash equivalents - end of year
|
40,660
|
|
|
(1,351
|
)
|
|
39,309
|
|
|||
Less: cash and cash equivalents of discontinued operations - end of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents of continuing operations - end of year
|
$
|
40,660
|
|
|
$
|
(1,351
|
)
|
|
$
|
39,309
|
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Consolidated
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net cash (used in) provided by operating activities from continuing operations
|
$
|
(27,860
|
)
|
|
$
|
45,236
|
|
|
$
|
17,376
|
|
Net cash provided by operating activities from discontinued operations
|
—
|
|
|
3,966
|
|
|
3,966
|
|
|||
Net cash (used in) provided by operating activities
|
(27,860
|
)
|
|
49,202
|
|
|
21,342
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from the sale of property and equipment
|
—
|
|
|
10,192
|
|
|
10,192
|
|
|||
Purchase of property, plant and equipment
|
(1,228
|
)
|
|
(54,503
|
)
|
|
(55,731
|
)
|
|||
Net cash used in investing activities from continuing operations
|
(1,228
|
)
|
|
(44,311
|
)
|
|
(45,539
|
)
|
|||
Net cash used in investing activities from discontinued operations
|
—
|
|
|
(2,451
|
)
|
|
(2,451
|
)
|
|||
Net cash used in investing activities
|
(1,228
|
)
|
|
(46,762
|
)
|
|
(47,990
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from revolving credit facility
|
107,725
|
|
|
—
|
|
|
107,725
|
|
|||
Payments on revolving credit facility
|
(67,500
|
)
|
|
—
|
|
|
(67,500
|
)
|
|||
Payments for debt issuance costs
|
(1,030
|
)
|
|
—
|
|
|
(1,030
|
)
|
|||
Payments on vehicle financing and other financing activities
|
(145
|
)
|
|
(6,303
|
)
|
|
(6,448
|
)
|
|||
Net cash provided by (used in) financing activities from continuing operations
|
39,050
|
|
|
(6,303
|
)
|
|
32,747
|
|
|||
Net cash provided by financing activities from discontinued operations
|
—
|
|
|
105
|
|
|
105
|
|
|||
Net cash provided by (used in) financing activities
|
39,050
|
|
|
(6,198
|
)
|
|
32,852
|
|
|||
Net increase (decrease) in cash
|
9,962
|
|
|
(3,758
|
)
|
|
6,204
|
|
|||
Cash and cash equivalents - beginning of year
|
3,839
|
|
|
5,373
|
|
|
9,212
|
|
|||
Cash and cash equivalents - end of year
|
13,801
|
|
|
1,615
|
|
|
15,416
|
|
|||
Less: cash and cash equivalents of discontinued operations - end of year
|
—
|
|
|
(2,049
|
)
|
|
(2,049
|
)
|
|||
Cash and cash equivalents of continuing operations - end of year
|
$
|
13,801
|
|
|
$
|
(434
|
)
|
|
$
|
13,367
|
|
•
|
debtor in possession financing (the “DIP Facilities”), consisting of a super-priority, secured, debtor-in-possession revolving credit facility (the “DIP Revolving Facility”) provided by the lenders under the Company’s ABL Facility and a super-priority, secured, debtor-in-possession term loan facility (the “DIP Term Loan”) provided by the one or more of the lenders under the Company’s Term Loan;
|
•
|
a rights offering (the “Rights Offering”) in connection with the consummation of the Restructuring, pursuant to which the Company will distribute freely transferrable rights (the “Rights”) to permit the holders thereof to acquire, in the aggregate,
$150.0 million
of newly issued common stock of the reorganized company at an enterprise valuation of
$400.0 million
(the “Plan Value”);
|
•
|
exit financing, to the extent necessary after the Rights Offering, to fund required disbursements under the Plan, through a new first lien, senior secured exit facility in the form of an asset backed revolver, term loan or combination thereof;
|
•
|
cash payment in full of all administrative expense claims, priority tax claims, priority claims, DIP Revolving Facility claims, and ABL Facility claims;
|
•
|
satisfaction in full of all DIP Term Loan claims and Term Loan claims (collectively, the “Term Loan Claims”) as follows: (i) by converting the first
$75.0 million
of Term Loan Claims to newly issued common stock of the reorganized company at Plan Value, subject to dilution by a new management incentive plan, the Rights Offering, and the conversion of the remainder of the Term Loan Claims, and (ii) the remaining Term Loan Claims, if any, to be paid in cash from the proceeds of the Rights Offering in excess of
$50.0 million
after repayment of the ABL Facility claims and other expenses, with any remaining balance thereafter to be converted to newly issued common stock of the reorganized company at Plan Value (subject to dilution);
|
•
|
receipt by the holders of the 2021 Notes, in full satisfaction of their claims, (a) their pro rata share of
99.75%
of the reorganized company’s newly issued common stock, subject to dilution by a new management incentive plan, the Rights Offering, and the conversion of the Term Loan Claims, and (b)
50.0%
of the Rights (which will be exercisable for up to two years following the completion of the Restructuring);
|
•
|
receipt by the holders of the 2018 Notes in full satisfaction of their claims of (a) their pro rata share of up to
0.25%
of the reorganized company’s newly issued common stock, subject to dilution by a new management incentive plan, the Rights Offering, and the conversion of the Term Loan Claims, and (b) a portion of
50.0%
of the Rights to be determined by the Nuverra Parties (which will be exercisable prior to the completion of the Restructuring);
|
•
|
existing equity interests shall receive no distribution; provided however that, subject to agreement among the Supporting Noteholders and the Nuverra Parties, existing equity holders may receive a portion of the Rights;
|
•
|
payment of all undisputed customer, employee, vendor or other trade obligations; and
|
•
|
continuation as a public reporting company under the Securities Exchange Act of 1934 and best efforts to have the new common stock listed on the New York Stock Exchange.
|
Exhibit Number
|
|
Description
|
|||
|
|
|
|
|
|
2.2
|
|
|
|
|
Share Purchase Agreement, dated as of September 30, 2011, among Pacific Water & Drinks (HK) Group Limited (f/k/a Sino Bloom Investments Limited), China Water & Drinks (BVI) Inc., and China Water Drinks (H.K.) Holdings Limited (incorporated herein by reference to Exhibit 10.1 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on October 5, 2011).
|
|
|
|
|
|
|
2.3
|
|
|
|
|
Stock Purchase Agreement, dated as of March 7, 2012, among TFI Holdings, Inc., Green Fuel Services, LLC, Heckmann Hydrocarbons Holdings Corporation and Heckmann Corporation (incorporated herein by reference to Exhibit 2.1 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on March 13, 2012).
|
|
|
|
|
|
|
2.4
|
|
|
|
|
Agreement and Plan of Merger, dated as of September 3, 2012, among Rough Rider Acquisition, LLC, Heckmann Corporation, Badlands Energy, LLC and Mark D. Johnsrud (incorporated herein by reference to Exhibit 2.1 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on September 4, 2012).
|
|
|
|
|
|
|
2.4
|
|
A
|
|
|
Voting Agreement among Heckmann Corporation, Rough Rider Acquisition, LLC and the principal stockholders party thereto (incorporated herein by reference to Exhibit 10.1 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on September 4, 2012).
|
|
|
|
|
|
|
2.4
|
|
B
|
|
|
Side Letter, dated November 29, 2012, among Heckmann Corporation, Rough Rider Acquisition, LLC, Badlands Power Fuels, LLC and Mark D. Johnsrud (incorporated herein by reference to Exhibit 2.1A to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on December 6, 2012).
|
|
|
|
|
|
|
2.5
|
|
|
|
|
Stock Purchase Agreement by and among Nuverra Environmental Solutions, Inc., Heckmann Environmental Services, Inc., Thermo Fluids Inc., and Safety-Kleen, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 4, 2015).
|
|
|
|
|
|
|
2.5
|
|
A
|
|
|
Amendment No. 1 to Stock Purchase Agreement, dated March 25, 2015, by and among Nuverra Environmental Solutions, Inc. and Safety-Kleen, Inc. (incorporated herein by reference to Exhibit 2.2 to the Company's Quarterly Report on Form 10-Q filed with the SEC on May 5, 2015).
|
|
|
|
|
|
|
3.1
|
|
|
|
|
Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to Amendment No. 2 to Heckmann Corporation’s Registration Statement on Form S-1 filed with the SEC on September 4, 2007).
|
|
|
|
|
|
|
3.1
|
|
A
|
|
|
Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on November 5, 2008).
|
|
|
|
|
|
|
3.1
|
|
B
|
|
|
Second Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1B to Heckmann Corporation’s Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 14, 2011).
|
|
|
|
|
|
|
3.1
|
|
C
|
|
|
Third Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1C to the Company’s Registration Statement on Form S-4 filed with the SEC on May 23, 2013).
|
|
|
|
|
|
|
3.1
|
|
D
|
|
|
Fourth Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to Company’s Current Report on Form 8-K filed with the SEC on December 3, 2013).
|
|
|
|
|
|
|
3.1
|
|
E
|
|
|
Fifth Certificate of Amendment of Amended and Restated Certificate of Incorporation of Nuverra Environmental Solutions, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 26, 2016).
|
|
|
|
|
|
|
3.2
|
|
|
|
|
Amended and Restated Bylaws (incorporated herein by reference to Amendment No. 4 to Heckmann Corporation’s Registration Statement on Form S-1 filed with the SEC on October 26, 2007).
|
|
|
|
|
|
|
3.2
|
|
A
|
|
|
First Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2A to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 9, 2010)
|
|
|
|
|
|
|
3.2
|
|
B
|
|
|
Second Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on April 7, 2011).
|
|
|
|
|
|
|
4.1
|
|
|
|
|
Specimen Common Stock Certificate.
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|||
4.2
|
|
|
|
|
Indenture, dated as of April 15, 2016, among Nuverra Environmental Solutions, Inc., Wilmington Savings Fund Society, FSB, and the Guarantors party thereto (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
4.3
|
|
|
|
|
Indenture, dated as of April 10, 2012, among Heckmann Corporation, the Guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.1 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on April 13, 2012).
|
|
|
|
|
|
|
4.3
|
|
A
|
|
|
First Supplemental Indenture, dated as of April 10, 2012, among Heckmann Corporation, the Guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.1A to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on April 13, 2012).
|
|
|
|
|
|
|
4.3
|
|
B
|
|
|
Second Supplemental Indenture, dated as of September 19, 2012, among Heckmann Corporation, the Guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.1B to Heckmann Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, filed with the SEC on November 9, 2012).
|
|
|
|
|
|
|
4.3
|
|
C
|
|
|
Third Supplemental Indenture, dated as of November 30, 2012, among Heckmann Corporation, the Guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.2C to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on December 6, 2012).
|
|
|
|
|
|
|
4.4
|
|
|
|
|
Registration Rights Agreement, dated as of April 10, 2012, among Heckmann Corporation, the Guarantors named therein, Jefferies & Company, Inc., Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC, as Representatives of the various Initial Purchasers named therein, including Joinder Agreement, dated as of April 10, 2012 (incorporated herein by reference to Exhibit 4.2 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on April 13, 2012).
|
|
|
|
|
|
|
4.5
|
|
|
|
|
Registration Rights Agreement, dated as of November 5, 2012, among Heckmann Corporation, the Guarantors named therein, and Jefferies & Company, Inc., Wells Fargo Securities, LLC and Credit Suisse Securities (USA) LLC, as Representatives of the various Initial Purchasers named therein (incorporated herein by reference to Exhibit 4.3 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on November 7, 2012).
|
|
|
|
|
|
|
4.5
|
|
A
|
|
|
Joinder Agreement to the Registration Rights Agreement, dated November 30, 2012, among Badlands Power Fuels, LLC (Delaware), Badlands Power Fuels, LLC (North Dakota), Landtech Enterprises, L.L.C. and Badlands Leasing, LLC (incorporated herein by reference to Exhibit 4.3A to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on December 6, 2012).
|
|
|
|
|
|
|
4.6
|
|
|
|
|
Nuverra 2013 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8 filed with the SEC on August 16, 2013).
|
|
|
|
|
|
|
4.7
|
|
|
|
|
Intercreditor Agreement, dated as of April 15, 2016, among Wells Fargo Bank, National Association, as collateral agent, Wells Fargo Bank, National Association, as administrative agent under the Credit Agreement, and the Wilmington Savings Fund Society, FSB, as administrative agent under the Term Loan Agreement (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
4.7
|
|
A
|
|
|
Amendment No. 1 to Intercreditor Agreement, dated November 14, 2016, by and among Wells Fargo, as pari passu collateral agent, Wells Fargo, as revolving credit agreement agent under the ABL Facility, and Wilmington, as administrative agent under the Term Loan Agreement (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2016).
|
|
|
|
|
|
|
4.8
|
|
|
|
|
Intercreditor Agreement, dated as of April 15, 2016, among Wells Fargo Bank, National Association, as administrative agent under the Credit Agreement, Wilmington Savings Fund Society, FSB, as administrative agent under the Term Loan Agreement, and Wilmington Savings Fund Society, FSB, as collateral agent under the Indenture (incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
4.8
|
|
A
|
|
|
Amendment No. 1 to Intercreditor Agreement, dated November 14, 2016, by and among Wells Fargo, as revolving credit agreement agent under the ABL Facility, Wilmington, as administrative agent under the Term Loan Agreement, and Wilmington, as second lien agent under the Second Lien Intercreditor Agreement (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2016).
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|||
4.9
|
|
|
|
|
Warrant Agreement (Exchange), dated as of April 15, 2016, among Nuverra Environmental Solutions, Inc., Mark D. Johnsrud, and American Stock Transfer & Trust Company, LLC, as warrant agent (incorporated herein by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
4.10
|
|
|
|
|
Warrant Agreement (Term Loan), dated as of April 15, 2016, among Nuverra Environmental Solutions, Inc., Mark D. Johnsrud, and American Stock Transfer & Trust Company, LLC (incorporated herein by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.1
|
|
|
|
|
Amended and Restated Credit Agreement, dated February 3, 2014, by and among the Company, as borrower; Wells Fargo Bank, National Association, a national banking association, as administrative agent; Wells Fargo, Bank of America, N.A., a national banking association, and RBS Citizens, N.A., a national banking association, as joint lead arrangers; Wells Fargo, Bank of America and RBS Citizens, as joint book runners; Bank of America and RBS Citizens, as co-syndication agents; and Wells Fargo, Bank of America and Citizens Bank of Pennsylvania, as lenders (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2014).
|
|
|
|
|
|
|
10.1
|
|
A
|
|
|
Joinder and First Amendment to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as agent for the Lenders, the Lenders party thereto, Nuverra Environmental Solutions, Inc., a Delaware corporation, Capital One Business Credit Corporation and CIT Finance LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC March 24, 2014).
|
|
|
|
|
|
|
10.1
|
|
B
|
|
|
Amended and Restated Guaranty and Security Agreement, dated February 3, 2014, by and among the Company, Heckmann Environmental Services, Inc., Thermo Fluids Inc., Heckmann Water Resources Corporation, Heckmann Water Resources (CVR), Inc., 1960 Well Services, LLC, HEK Water Solutions, LLC, Appalachian Water Services, LLC, Badlands Power Fuels LLC, Badlands Power Fuels, LLC, Landtech Enterprises, LLC, Badlands Leasing, LLC, Ideal Oilfield Disposal, LLC; and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2014).
|
|
|
|
|
|
|
10.1
|
|
C
|
|
|
Intercompany Subordination Agreement, dated February 3, 2014, by and among the Company, Heckmann Environmental Services, Inc., Thermo Fluids Inc., Heckmann Water Resources Corporation, Heckmann Water Resources (CVR), Inc., 1960 Well Services, LLC, HEK Water Solutions, LLC, Appalachian Water Services, LLC, Badlands Power Fuels LLC, Badlands Power Fuels, LLC, Landtech Enterprises, LLC, Badlands Leasing, LLC and Ideal Oilfield Disposal, LLC; and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2014).
|
|
|
|
|
|
|
10.1
|
|
D
|
|
|
Patent Security Agreement, dated February 3, 2014, by and between the Company and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2014).
|
|
|
|
|
|
|
10.1
|
|
E
|
|
|
Second Amendment, Consent and Release to Amended and Restated Credit Agreement dated April 13, 2015, by and among the Company, the Agent and the Lenders (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on April 14, 2015).
|
|
|
|
|
|
|
10.1
|
|
F
|
|
|
First Amendment to Amended and Restated Guaranty and Security Agreement dated April 13, 2015, by and among the Company, certain subsidiaries of the Company named therein, as grantors, and the Agent (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on April 14, 2015).
|
|
|
|
|
|
|
10.1
|
|
G
|
|
|
Fourth Amendment, Consent and Release to Amended and Restated Credit Agreement dated November 2, 2015, by and among the Company, the Agent and the Lenders (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on November 5, 2015).
|
|
|
|
|
|
|
10.1
|
|
H
|
|
|
Second Amendment to Amended and Restated Guaranty and Security Agreement dated November 2, 2015, by and among the Company, certain subsidiaries of the Company named therein, as grantors, and the Agent (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on November 5, 2015).
|
|
|
|
|
|
|
10.1
|
|
I
|
|
|
Consent and Fifth Amendment to Amended and Restated Credit Agreement, dated March 10, 2016, by and among Wells Fargo Bank, National Association, the Lenders named therein, and Nuverra Environmental Solutions, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|||
10.1
|
|
J
|
|
|
Third Amendment to Amended and Restated Guaranty and Security Agreement, dated March 10, 2016, by and among Nuverra Environmental Solutions, Inc., certain subsidiaries of Nuverra Environmental Solutions, Inc. named therein, and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
|
|
|
|
|
|
|
10.1
|
|
K
|
|
|
Sixth Amendment to Amended and Restated Credit Agreement, dated March 24, 2016, by and among Wells Fargo Bank, National Association, the Lenders named therein, and Nuverra Environmental Solutions, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 29, 2016).
|
|
|
|
|
|
|
10.1
|
|
L
|
|
|
Seventh Amendment to Amended and Restated Credit Agreement, dated April 15, 2016, by and among Wells Fargo Bank, National Association, the lenders named therein, and Nuverra Environmental Solutions, Inc. (incorporated herein by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.1
|
|
M
|
|
|
Eighth Amendment to Amended and Restated Credit Agreement, dated as of June 29, 2016, by and among the Agent, the Lenders, and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2016).
|
|
|
|
|
|
|
10.1
|
|
N
|
|
|
Ninth Amendment to Amended and Restated Credit Agreement, dated as of August 5, 2016, by and among the Agent, the Lenders, and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 9, 2016).
|
|
|
|
|
|
|
10.1
|
|
O
|
|
|
Tenth Amendment to Amended and Restated Credit Agreement, dated as of September 29, 2016, by and among the Agent, the Lenders, and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2016).
|
|
|
|
|
|
|
10.1
|
|
P
|
|
|
Eleventh Amendment to Amended and Restated Credit Agreement, dated as of October 13, 2016, by and among the Agent, the Lenders, and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 17, 2016).
|
|
|
|
|
|
|
10.1
|
|
Q
|
|
|
Twelfth Amendment to Amended and Restated Credit Agreement, dated as of November 4, 2016, by and among the Agent, the Lenders, and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 7, 2016).
|
|
|
|
|
|
|
10.1
|
|
R
|
|
|
Thirteenth Amendment to Amended and Restated Credit Agreement, dated November 14, 2016, by and among Wells Fargo, the Lenders, and the Company (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2016).
|
|
|
|
|
|
|
10.1
|
|
S
|
|
|
Fourteenth Amendment to Amended and Restated Credit Agreement, dated December 16, 2016, by and among Wells Fargo, the Lenders, and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 19, 2016).
|
|
|
|
|
|
|
10.3
|
|
†
|
|
|
Heckmann Corporation 2009 Equity Incentive Plan (incorporated herein by reference to Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the SEC on March 27, 2012).
|
|
|
|
|
|
|
10.3
|
|
A
|
†
|
|
First Amendment of the Heckmann Corporation 2009 Equity Incentive Plan (incorporated herein by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the SEC on March 27, 2012).
|
|
|
|
|
|
|
10.3
|
|
B
|
†
|
|
Second Amendment to the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 the Company’s Current Report on Form 8-K filed with the SEC May 8, 2014).
|
|
|
|
|
|
|
10.4
|
|
†
|
|
|
Executive Employment Agreement, dated November 30, 2012, between Heckmann Corporation and Mark D. Johnsrud (incorporated herein by reference to Exhibit 10.4 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on December 6, 2012).
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|||
10.4
|
|
A
|
†
|
|
First Amendment to Executive Employment Agreement, dated January 25, 2016, between the Nuverra Environmental Solutions, Inc. and Mark D. Johnsrud (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 25, 2016).
|
|
|
|
|
|
|
10.5
|
|
|
|
|
Stockholder’s Agreement, dated as of November 30, 2012, between Heckmann Corporation and Mark D. Johnsrud (incorporated herein by reference to Exhibit 10.2 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on December 6, 2012).
|
|
|
|
|
|
|
10.5
|
|
A
|
|
|
First Amendment to Stockholder’s Agreement, dated as of March 10, 2014, between Nuverra Environmental Solutions, Inc. and Mark D. Johnsrud (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC March 10, 2014).
|
|
|
|
|
|
|
10.6
|
|
†
|
|
|
Second Amended and Restated Executive Employment Agreement, dated November 9, 2011, between Heckmann Corporation and Brian R. Anderson (incorporated herein by reference to Exhibit 10.2 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on November 9, 2011).
|
|
|
|
|
|
|
10.7
|
|
†
|
|
|
Employment Agreement, dated February 5, 2016, between Nuverra Environmental Solutions, Inc. and Joseph M. Crabb (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 9, 2016).
|
|
|
|
|
|
|
10.7
|
|
*
|
A
|
†
|
First Amendment to Employment Agreement, dated December 23, 2016, between Nuverra Environmental Solutions, Inc. and Joseph M. Crabb.
|
|
|
|
|
|
|
10.8
|
|
|
|
|
Restructuring and Support Agreement, dated March 11, 2016, by and among Nuverra Environmental Solutions, Inc., certain subsidiaries of Nuverra Environmental Solutions, Inc., the Supporting Holders, and Mark D. Johnsrud (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
|
|
|
|
|
|
|
10.9
|
|
|
|
|
Term Loan Credit Agreement, dated as of April 15, 2016, by and among Wilmington Savings Fund Society, FSB, as administrative agent, the lenders identified therein, and Nuverra Environmental Solutions, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.9
|
|
A
|
|
|
Guaranty and Security Agreement, dated as of April 15, 2016, among Nuverra Environmental Solutions, Inc., the other Grantors party thereto, Wilmington Savings Fund Society, FSB, as administrative agent, and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.9
|
|
B
|
|
|
Intercompany Subordination Agreement, dated as of April 15, 2016, among Nuverra Environmental Solutions, Inc., the other Obligors party thereto, and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.9
|
|
C
|
|
|
Trademark Security Agreement, dated as of April 15, 2016, between Nuverra Environmental Solutions, Inc. and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.9
|
|
D
|
|
|
Security Agreement, dated as of April 15, 2016, among Nuverra Environmental Solutions, Inc., the other Grantors party thereto and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.9
|
|
E
|
|
|
Intercompany Subordination Agreement, dated as of April 15, 2016, among Nuverra Environmental Solutions, Inc., the other Obligors party thereto, and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
|
10.9
|
|
F
|
|
|
Trademark Security Agreement, dated as of April 15, 2016, between Nuverra Environmental Solutions, Inc. and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2016).
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|||
10.9
|
|
G
|
|
|
First Amendment to Term Loan Credit Agreement, dated as of June 30, 2016, by and among the Required Lenders and the Company (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2016).
|
|
|
|
|
|
|
10.9
|
|
H
|
|
|
Second Amendment to Term Loan Credit Agreement, dated as of September 22, 2016, by and among the Required Lenders and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 28, 2016).
|
|
|
|
|
|
|
10.9
|
|
I
|
|
|
Third Amendment (Increase Amendment) to Term Loan Credit Agreement, dated November 14, 2016, by and among the Term Loan Lenders, Wilmington, Wells Fargo, the Company and the named therein (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 18, 2016).
|
|
|
|
|
|
|
10.9
|
|
J
|
|
|
Fourth Amendment (Increase Amendment) to Term Loan Credit Agreement, dated December 16, 2016, by and among the Term Loan Lenders, Wilmington, Wells Fargo, the Company and the guarantors named therein (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 19, 2016).
|
|
|
|
|
|
|
10.10
|
|
*
|
†
|
|
Key Employee Incentive Plan, dated December 23, 2016.
|
|
|
|
|
|
|
14.1
|
|
|
|
|
Code of Business Conduct and Ethics (incorporated herein by reference to Exhibit 14.1 to Heckmann Corporation’s Current Report on Form 8-K filed with the SEC on September 21, 2011).
|
|
|
|
|
|
|
21.1
|
|
*
|
|
|
Subsidiaries of Nuverra Environmental Solutions, Inc.
|
|
|
|
|
|
|
23.1
|
|
*
|
|
|
Consent of Hein & Associates LLP
|
|
|
|
|
|
|
23.2
|
|
*
|
|
|
Consent of KPMG LLP
|
|
|
|
|
|
|
24.1
|
|
*
|
|
|
Power of Attorney of Officers and Directors of the Company (set forth on the signature pages of this Form
10-K).
|
|
|
|
|
|
|
31.1
|
|
*
|
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
31.2
|
|
*
|
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
32.1
|
|
*
|
|
|
Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
101.INS
|
*
|
|
XBRL Instance Document
|
||
|
|
|
|
|
|
101.SCH
|
*
|
|
XBRL Taxonomy Extension Schema Document
|
||
|
|
|
|
|
|
101.CAL
|
*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
||
|
|
|
|
|
|
101.DEF
|
*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
||
|
|
|
|
|
|
101.LAB
|
*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
||
|
|
|
|
|
|
101.PRE
|
*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
||
|
|
|
|
|
|
*
|
|
|
|
|
Filed herewith
|
†
|
|
|
|
|
Compensatory plan, contract or arrangement in which directors or executive officers may participate
|
1.
|
The Employment Agreement is hereby amended as follows:
|
A.
|
The following is added as Section 2.r:
|
B.
|
The following sentences shall be added to the end of paragraph c under Section 5:
|
2.
|
Except as set forth in this Amendment, the Employment Agreement is unaffected and shall continue in full force and effect in accordance with its terms.
|
1.
|
Incentive Compensation
. You shall be entitled to receive Incentive Compensation, payable on the schedule set forth below, subject to your continued employment through each payment date (except as set forth in Section 4 of this Agreement) and certain exceptions as provided in Section 3 of this Agreement. The amount of the Incentive Compensation you receive will be determined based on the Company’s monthly performance (“
Company Performance
”), which shall consist of two metrics (the “
Performance Metrics
”): (a) the Company’s EBITDA, which shall be weighted at 80%, and (b) the Company’s Total Recordable Incident Rate (“
TRIR
”), which shall be weighted at 20%. The specific threshold, target, and maximum goals for each of the Performance Metrics are set forth on Exhibit A. The Company’ EBITDA and TRIR shall be determined, respectively, by the Company’s principal accounting officer and health and safety executive as soon as practicable after the end of each calendar month during the IC Period. For Company Performance at the target level, you will be entitled to receive Incentive Compensation for the entire IC period equal to $600,000 (“
Target IC
”). For Company Performance above or below the target level, your Incentive Compensation will be determined by application of linear interpolation; provided, however, that your Incentive Compensation will never exceed 150% of Target IC (or $900,000 for the entire IC period) and you will not receive any Incentive Compensation if Company Performance does not exceed the threshold level. You and the Company agree that the Company will pay you $46,530 of Incentive Compensation based on the attainment of Performance Metrics in the month of October 2016.
|
2.
|
Payment Schedule
. The Incentive Compensation will be paid to you monthly. The payment of the Incentive Compensation based on Company Performance in the month of October 2016 will be made as soon as administratively practicable after the execution of this Agreement. The remaining monthly payments will be made as soon as administratively practicable following the final determination by the Company’s principal accounting officer and health and safety executive of the Performance Metrics for the preceding month. The payments hereunder shall not be taken into account for purposes of any other compensation or benefit program of the Company.
|
3.
|
Forfeiture
. Notwithstanding anything herein or in any other agreement to the contrary, if prior to the end of the IC Period you voluntarily terminate your employment with the Company, other than for Good Reason, or
|
4.
|
Nonforfeiture
. If your employment with the Company is terminated without Cause, by you for Good Reason, or by reason of your Disability or death, you shall remain eligible to receive payments of Incentive Compensation for the IC Period, subject to Section 5 of this Agreement.
|
5.
|
Release of Claims
. Your right to receive payments of Incentive Compensation following your termination of employment by the Company without Cause or by you with Good Reason shall be contingent on your executing and not revoking a Release in the form set forth on Exhibit A to your Employment Agreement and your compliance with your obligations pursuant to Sections 13 and 14 of the Employment Agreement.
|
6.
|
409A
. The payments and benefits under this Agreement are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively “
Section
409A
”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from Section 409A.
|
7.
|
Assignment
. You may not assign your rights under this Agreement except upon your death. The Company may assign its obligations hereunder to any successor (including any acquirer of substantially all of the assets of the Company).
|
8.
|
Entire Agreement
. This Agreement sets forth the entire understanding of the Company and you regarding the subject matter hereof and supersedes all prior agreements, understandings and inducements, whether express or implied, oral or written;
provided, however
, this Agreement does not impact, alter, modify, amend or otherwise supersede any of the rights or obligations of either party under any employment or employment-related agreement or arrangement, or any existing severance agreements in place between you and the Company, including the Employment Agreement. No modification or amendment of this Agreement shall be effective without a prior written agreement signed by you and the Company.
|
9.
|
Notices
. All notices, approvals and other communications required or permitted to be given under this Agreement shall be in writing and shall be validly served or given if delivered in person, electronically (with read receipt acknowledgment), mailed by first class mail (registered or certified, return receipt requested), or overnight air courier with proof of delivery (i) if to the Company, at its principal corporate offices addressed to the attention of the Chief Executive Officer, and (ii) if to you, at your home address as such address may appear on the records of the Company, or to such other address as such party may hereafter specify in written notice to the other party.
|
10.
|
Confidentiality
. You hereby agree, to the maximum extent permitted by law, to, and to cause your affiliates and representatives to, keep strictly confidential the existence and the terms of this Agreement;
provided, however
, that (i) you may disclose the terms of this Agreement to your financial or legal advisers who reasonably need to have access to such information to provide services to you, provided that you have made such advisors aware of the confidential nature of such information prior to disclosure and that such advisors are bound by an equivalent obligation of confidentiality, and (ii) you may disclose the terms of this Agreement if required to do so by any applicable legal requirement so long as reasonable prior notice of such required disclosure is given to the Company.
|
11.
|
Governing Law;
WAIVER OF JURY TRIAL
. To the maximum extent permitted by law, this Agreement is governed by and to be construed in accordance with the laws of the State of Arizona, without regard to conflicts of laws principles thereof. The parties to this Agreement each hereby irrevocably submits to the non-exclusive jurisdiction of Arizona or federal court sitting in Maricopa County, Arizona in any action or proceeding arising out of or relating to this Agreement, and all such parties hereby irrevocably agree that all claims in respect of
|
12.
|
Tax
. Amounts payable under this Agreement shall be subject to withholding for federal, state, local or foreign taxes (including, but not limited to, any social security contributions) as shall be required to be withheld pursuant to any applicable law or regulation.
|
13.
|
Waiver
. Failure by either party to exercise, or any delay in exercising, any right or remedy provided under this Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy.
|
14.
|
Severability
. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
|
15.
|
Counterpart Originals
. This Agreement may be executed in two or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement electronically (including portable document format (pdf.)) or by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement.
|
EBITDA Target Calculation
|
||||||||||||
Month
|
Cumulative EBITDA Forecast (From B-Plan)
|
Threshold Requirement (50% of EBITDA)
|
Lower Band Requirement (75% of EBITDA)
|
Target Requirement (100% of EBITDA)
|
Higher Band Requirement (125% of EBITDA)
|
Maximum Requirement (150% of EBITDA)
|
||||||
Oct -16
|
6,038
|
|
3,019
|
|
4,528
|
|
6,038
|
|
7,547
|
|
9,057
|
|
Nov - 16
|
6,443
|
|
3,222
|
|
4,833
|
|
6,443
|
|
8,054
|
|
9,665
|
|
Dec - 16
|
6,848
|
|
3,424
|
|
5,136
|
|
6,848
|
|
8,560
|
|
10,273
|
|
Jan - 17
|
763
|
|
381
|
|
572
|
|
763
|
|
953
|
|
1,144
|
|
Feb - 17
|
1,513
|
|
757
|
|
1,135
|
|
1,513
|
|
1,891
|
|
2,270
|
|
Mar - 17
|
2,720
|
|
1,360
|
|
2,040
|
|
2,720
|
|
3,400
|
|
4,080
|
|
Apr - 17
|
4,036
|
|
2,018
|
|
3,027
|
|
4,036
|
|
5,045
|
|
6,054
|
|
May - 17
|
5,536
|
|
2,768
|
|
4,152
|
|
5,336
|
|
6,920
|
|
8,305
|
|
Jun - 17
|
7,175
|
|
3,587
|
|
5,381
|
|
7,175
|
|
8,968
|
|
10,762
|
|
Jul - 17
|
8,609
|
|
4,304
|
|
6,457
|
|
8,609
|
|
10,761
|
|
12,913
|
|
Aug - 17
|
10,601
|
|
5,301
|
|
7,951
|
|
10,601
|
|
13,252
|
|
15,902
|
|
Sep - 17
|
12,711
|
|
6,355
|
|
9,533
|
|
12,711
|
|
15,889
|
|
19,066
|
|
Oct - 17
|
15,033
|
|
7,517
|
|
11,275
|
|
15,033
|
|
18,792
|
|
22,550
|
|
Nov - 17
|
17,542
|
|
8,771
|
|
13,156
|
|
17,542
|
|
21,927
|
|
26,313
|
|
Dec - 17
|
20,293
|
|
10,146
|
|
15,219
|
|
20,293
|
|
25,366
|
|
30,439
|
|
TRIR Target Calculation
|
||||||||||
Month
|
YTD TRIR Threshold Requirement (50%)
|
YTD TRIR Lower Band Requirement (75%)
|
YTD TRIR Target Requirement (100%)
|
YTD TRIR Higher Band Requirement (125%)
|
YTD TRIR Maximum Requirement (150%)
|
|||||
Oct -16
|
3.12
|
|
2.08
|
|
1.56
|
|
1.25
|
|
1.04
|
|
Nov - 16
|
3.12
|
|
2.08
|
|
1.56
|
|
1.25
|
|
1.04
|
|
Dec - 16
|
3.12
|
|
2.08
|
|
1.56
|
|
1.25
|
|
1.04
|
|
Jan - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Feb - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Mar - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Apr - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
May - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Jun - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Jul - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Aug - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Sep - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Oct - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Nov - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Dec - 17
|
2.99
|
|
1.996
|
|
1.50
|
|
1.20
|
|
1.00
|
|
Name of Organization
|
|
State/Jurisdiction of Incorporation
|
Badlands Power Fuels, LLC
|
|
Delaware
|
Nuverra Rocky Mountain Pipeline, LLC
|
|
Delaware
|
Nuverra Total Solutions, LLC
|
|
Delaware
|
NES Water Solutions, LLC
|
|
Delaware
|
HEK Water Solutions, LLC
|
|
Delaware
|
Badlands Power Fuels, LLC
|
|
North Dakota
|
Landtech Enterprises, L.L.C.
|
|
North Dakota
|
Badlands Leasing, LLC
|
|
North Dakota
|
Ideal Oilfield Disposal, LLC
|
|
North Dakota
|
1960 Well Services, LLC
|
|
Ohio
|
Appalachian Water Services, LLC
|
|
Pennsylvania
|
Heckmann Water Resources Corporation
|
|
Texas
|
Heckmann Water Resources (CVR), Inc.
|
|
Texas
|
Heckmann Woods Cross, LLC
|
|
Utah
|
1.
|
I have reviewed this report on Form 10-K of Nuverra Environmental Solutions, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Mark D. Johnsrud
|
Name:
|
Mark D. Johnsrud
|
Title:
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this report on Form 10-K of Nuverra Environmental Solutions, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Mark D. Johnsrud
|
Name:
|
Mark D. Johnsrud
|
Title:
|
President and Chief Executive Officer
(Principal Financial Officer)
|
(1)
|
The report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 as amended; and
|
(2)
|
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Mark D. Johnsrud
|
Name:
|
Mark D. Johnsrud
|
Title:
|
President and Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)
|