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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM
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10-K
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☒
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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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Delaware
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38-4016639
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3990 Rogerdale Rd
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Houston
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Texas
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77042
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(Address of principal executive offices)
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(Zip code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol
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Name of Each Exchange On Which Registered
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Common Stock, $0.01 par value
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NEX
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New York Stock Exchange
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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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☐
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Smaller reporting company
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☐
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Emerging Growth Company
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☐
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Completion Services, which consists of the following business lines: (1) fracturing services; (2) wireline and pumping services; and (3) completion support services, which includes our research and technology (“R&T”) department;
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Well Construction and Intervention Services (“WC&I”), which consists of the following business lines: (1) cementing services and (2) coiled tubing services; and
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Well Support Services, which consists of the following business lines: (1) rig services; (2) fluids management services; and (3) specialty well site services.
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developing and expanding our relationships with existing and new customers;
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•
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continuing our industry leading safety performance and focus on the environment;
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investing further in driving efficiencies, including our robust maintenance program;
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maintaining a conservative balance sheet to preserve operational and strategic flexibility; and
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continuing to evaluate potential consolidation opportunities that strengthen our capabilities, increase our scale and create shareholder value.
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prices and expectations about future prices for oil and natural gas;
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domestic and foreign supply of, and demand for, oil and natural gas and related products;
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the level of global and domestic oil and natural gas inventories;
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the supply of and demand for hydraulic fracturing and other oilfield services and equipment in the U.S. and the areas in which we operate;
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the cost of exploring for, developing, producing and delivering oil and natural gas;
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the availability of adequate pipeline, storage and other transportation capacity;
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lead times associated with acquiring equipment and products and availability of qualified personnel;
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the rates at which new oil and natural gas reserves are discovered;
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federal, state and local regulation of hydraulic fracturing and other oilfield service activities, as well as exploration and production activities, including public pressure on governmental bodies and regulatory agencies to regulate our industry;
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the availability of water resources, suitable proppant and chemicals in sufficient quantities for use in hydraulic fracturing fluids;
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geopolitical developments, political instability and recent (and potential future) armed hostilities in oil and natural gas producing countries;
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actions of the Organization of the Petroleum Exporting Countries (“OPEC”), its members and other state-controlled oil companies relating to oil price and production controls;
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advances in exploration, development and production technologies or in technologies affecting energy consumption;
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the price and availability of alternative fuels and energy sources;
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disruptions due to natural disasters, unexpected or extreme weather conditions, public health crises (such as coronavirus) and similar factors;
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merger and divestiture activity amongst oil and natural gas producers;
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uncertainty in capital and commodities markets and the ability of oil and natural gas producers and oil and natural gas midstream operators to raise equity capital and debt financing;
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investor and activist focus on corporate social responsibility and sustainability; and
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U.S. federal, state and local and non-U.S. governmental regulations and taxes.
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curtailment of services;
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weather-related damage to facilities and equipment, resulting in delays in operations;
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inability to deliver equipment, personnel and products to job sites in accordance with contract schedules;
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increase in the price of key products or insurance; and
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loss of productivity.
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equipment defects;
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vehicle accidents;
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fires, explosions and uncontrollable flows of gas or well fluids;
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unusual or unexpected geological formations or pressures and industrial accidents;
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blowouts;
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cratering;
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loss of well control;
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collapse of the borehole; and
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damaged or lost drilling and well completions equipment.
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combining the businesses operations and corporate functions of the Company and C&J, in a manner that permits the Company to achieve any cost savings or revenue synergies anticipated to result from the C&J Merger, the failure of which would result in the anticipated benefits of the C&J Merger not being realized in the time frame currently anticipated or at all;
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reducing additional and unforeseen expenses to prevent integration costs from more than anticipated;
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avoiding delays in the integration process;
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integrating personnel from the two companies and retaining key employees;
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integrating the companies' technologies;
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integrating and standardizing the offerings and services available to customers;
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identifying and eliminating redundant and underperforming functions and assets;
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harmonizing the companies' operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;
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maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors;
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addressing possible differences in business backgrounds, corporate cultures and management philosophies;
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consolidating the companies' administrative and information technology infrastructure;
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coordinating distribution and marketing efforts;
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managing the movement of certain positions to different locations; and
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effecting actions that may be required in connection with obtaining regulatory approvals.
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failure to identify attractive targets;
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incorrect assumptions regarding the future liabilities or future results of acquired operations or assets or expected cost reductions or other synergies expected to be realized as a result of acquiring operations or assets;
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failure to obtain financing on acceptable terms or at all;
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restrictions in our debt agreements;
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failure to successfully integrate the operations or management of any acquired operations or assets (particularly as we undertake the integration of the legacy Keane and C&J businesses);
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failure to retain or attract key employees;
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new or expanded areas of operational risk (such as offshore or international operations) and related costs and demands of any applicable regulatory compliance; and
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diversion of management’s attention from existing operations or other priorities.
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a failure of our due diligence process to identify significant risks or issues;
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the loss of customers of the acquired company or our company;
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negative impact on the brands or banners of the acquired company or our company;
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a failure to maintain or improve the quality of our customer service;
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difficulties assimilating the operations and personnel of the acquired company;
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our inability to retain key personnel of the acquired company;
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the incurrence of unexpected expenses and working capital requirements;
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our inability to achieve the financial and strategic goals, including synergies, for the combined businesses;
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difficulty in maintaining internal controls, procedures and policies;
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mistaken assumptions about the overall costs of equity or debt; and
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unforeseen difficulties operating in new product areas or new geographic areas.
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adversely affect the market price of our common stock;
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increase our vulnerability to interest rate increases and general adverse economic and industry conditions;
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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes, including acquisitions;
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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limit our ability to obtain additional financing on satisfactory terms to fund our working capital requirements, capital expenditures, acquisitions, investments, debt service requirements and other general corporate requirements; and
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place us at a competitive disadvantage compared to our competitors that have less debt.
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sales of assets;
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sales of equity; or
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negotiations with our lenders to restructure the applicable debt.
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the failure of securities analysts to cover, or continue to cover, our common stock or changes in financial estimates by analysts;
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changes in, or investors’ perception of, the oil field services industry, including hydraulic fracturing;
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the activities of competitors;
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future issuances and sales of our common stock, including in connection with acquisitions;
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our quarterly or annual earnings or those of other companies in our industry;
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the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
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regulatory or legal developments in the U.S.;
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litigation involving us, our industry, or both; and
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general economic conditions.
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on or after such date that Keane Investor and its respective Affiliates (as defined in Rule 12b-2 of the Exchange Act, or any person who is an express assignee or designee of Keane Investor’s respective rights under our certificate of incorporation (and such assignee’s or designee’s Affiliates)) (of these entities, the entity that is the beneficial owner of the largest number of shares is referred to as the “Designated Controlling Stockholder”) ceases to own, in the aggregate, at least 50% of the then-outstanding shares of our common stock (the “50% Trigger Date”),the authorized number of our directors may be increased or decreased only by the affirmative vote of two-thirds of the then-outstanding shares of our common stock or by resolution of our board of directors;
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on or after the 50% Trigger Date, our stockholders may only amend our bylaws with the approval of at least two-thirds of all of the outstanding shares of our capital stock entitled to vote;
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the manner in which stockholders can remove directors from the board will be limited;
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on or after the 50% Trigger Date, stockholder actions must be effected at a duly called stockholder meeting and actions by our stockholders by written consent are prohibited;
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from and after such date that the Designated Controlling Stockholder ceases to own, in the aggregate, at least 35% of the then-outstanding shares of our common stock (the “35% Trigger Date”), advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors will be established;
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who may call stockholder meetings is limited;
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requirements on any stockholder (or group of stockholders acting in concert), other than, prior to the 35% Trigger Date, the Designated Controlling Stockholder, who seeks to transact business at a meeting or nominate directors for election to submit a list of derivative interests in any of our Company’s securities, including any short interests and synthetic equity interests held by such proposing stockholder;
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requirements on any stockholder (or group of stockholders acting in concert) who seeks to nominate directors for election to submit a list of “related party transactions” with the proposed nominee(s) (as if such nominating person were a registrant pursuant to Item 404 of Regulation S-K, and the proposed nominee was an executive officer or director of the “registrant”); and
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our board of directors is authorized to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors.
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Issuer Purchases of Equity Securities
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Settlement Period
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(a) Total Number of Shares Purchased(3)
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(b) Average Price Paid per Share
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(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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(d) Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(1)(2)
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October 1, 2019 through October 31, 2019
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407,023
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$
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4.32
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—
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$
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100,000,000
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November 1, 2019 through November 30, 2019
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36,952
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$
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4.61
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—
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$
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100,000,000
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December 1, 2019 through December 31, 2019
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137,890
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$
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6.02
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—
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$
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150,000,000
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Total
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581,865
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$
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4.74
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—
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$
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150,000,000
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Years Ended December 31,
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2019(1)
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2018
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2017(2)
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2016(3)
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2015
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(in thousands of dollars, except per share amounts)
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Statement of Operations Data:
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Revenue
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$
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1,821,556
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$
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2,137,006
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$
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1,542,081
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$
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420,570
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$
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366,157
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Cost of services(4)
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1,403,932
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1,660,546
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1,282,561
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416,342
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306,596
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Depreciation and amortization
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292,150
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259,145
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159,280
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100,979
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69,547
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Selling, general and administrative expenses
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123,676
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113,810
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84,853
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36,615
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26,081
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Merger and integration
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68,731
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448
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8,673
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16,540
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—
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(Gain) loss on disposal of assets
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4,470
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5,047
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(2,555
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)
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(387
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)
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(270
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)
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Impairment
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12,346
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—
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—
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185
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3,914
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Total operating costs and expenses
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1,905,305
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2,038,996
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1,532,812
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570,274
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405,868
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Operating income (loss)
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(83,749
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)
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98,010
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9,269
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(149,704
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)
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(39,711
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)
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Other income (expense), net
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453
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(905
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)
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13,963
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916
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(1,481
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)
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Interest expense(5)
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(21,856
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)
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(33,504
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)
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(59,223
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)
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(38,299
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)
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(23,450
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)
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Total other expenses
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(21,403
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)
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(34,409
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)
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(45,260
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)
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(37,383
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)
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(24,931
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)
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Income (loss) before income taxes
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(105,152
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)
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63,601
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(35,991
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)
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(187,087
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)
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(64,642
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)
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Income tax expense
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(1,005
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)
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(4,270
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)
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(150
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)
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—
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—
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Net income (loss)
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$
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(106,157
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)
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$
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59,331
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$
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(36,141
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)
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$
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(187,087
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)
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$
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(64,642
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)
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Per Share Data(6)
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Basic net income (loss) per share
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$
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(0.86
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)
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$
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0.54
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$
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(0.34
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)
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$
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(2.14
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)
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$
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(0.74
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)
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Diluted net income (loss) per share
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(0.86
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)
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0.54
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(0.34
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)
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(2.14
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)
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(0.74
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)
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Weighted average number of shares:
basic
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122,977
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109,335
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106,321
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|
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87,313
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87,313
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Weighted average number of shares:
diluted
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122,977
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|
|
109,660
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|
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106,321
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|
|
87,313
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|
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87,313
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|
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Years Ended December 31,
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Statement of Cash Flows Data:
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Cash flows from operating activities
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$
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305,463
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|
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$
|
350,311
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|
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$
|
79,691
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|
|
$
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(54,054
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)
|
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$
|
37,521
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Cash flows from investing activities
|
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(114,100
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)
|
|
(297,506
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)
|
|
(250,776
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)
|
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(227,161
|
)
|
|
(26,038
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)
|
|||||
Cash flows from financing activities
|
|
(16,746
|
)
|
|
(68,554
|
)
|
|
218,122
|
|
|
276,633
|
|
|
(10,518
|
)
|
|||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures(7)
|
|
$
|
193,187
|
|
|
$
|
291,543
|
|
|
$
|
189,629
|
|
|
$
|
23,545
|
|
|
$
|
27,246
|
|
Balance Sheet Data (at end of period):
|
|
|
|
|
|
|
|
|
|
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||||||||||
Total assets
|
|
$
|
1,664,907
|
|
|
$
|
1,054,579
|
|
|
$
|
1,043,116
|
|
|
$
|
536,940
|
|
|
$
|
324,795
|
|
Long-term debt (including current portion) (8)
|
|
337,623
|
|
|
340,730
|
|
|
275,055
|
|
|
269,750
|
|
|
207,067
|
|
|||||
Total liabilities
|
|
778,135
|
|
|
567,398
|
|
|
530,024
|
|
|
374,688
|
|
|
244,635
|
|
|||||
Total stockholders’ equity
|
|
886,772
|
|
|
487,181
|
|
|
513,092
|
|
|
162,252
|
|
|
80,160
|
|
|||||
|
|
|
|
|
|
|
|
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(1)
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Commencing on November 1, 2019, our consolidated and combined financial statements also include the financial position, results of operations and cash flows of C&J.
|
(2)
|
Commencing on July 3, 2017, our consolidated and combined financial statements also include the financial position, results of operations and cash flows of RockPile.
|
(3)
|
Commencing on March 16, 2016, our consolidated and combined financial statements also include the financial position, results of operations and cash flows of the Acquired Trican Operations.
|
(4)
|
Excludes depreciation and amortization, shown separately.
|
(5)
|
Interest expense during the year ended December 31, 2019 includes $0.5 million in write-offs in connection with the modification of the 2017 ABL Facility. Interest expense during the year ended December 31, 2018 includes $7.6 million in write-offs of deferred financing costs, incurred in connection with the early debt extinguishment of our 2017 Term Loan Facility (as defined herein). Interest expense during the year ended December 31, 2017 includes $15.8 million of prepayment penalties and $15.3 million in write-offs of deferred financing costs, incurred in connection with the refinancing of our then existing revolving credit and security agreement (as amended, the “2016 ABL Facility”) and the early debt extinguishment of our the term loan facility provided by that certain credit agreement entered into on March 16, 2016 by KGH Intermediate Holdco I, LLC, Holdco II and Keane Frac, LP (as amended, the “2016 Term Loan Facility”) with certain financial institutions (collectively, the “2016 Term Lenders”) and CLMG Corp., as administrative agent for the 2016 Term Lenders, and Senior Secured Notes (as defined herein).
|
(6)
|
The pro forma earnings per unit amounts for 2017, 2016 and 2015 have been computed to give effect to the Organizational Transactions, including the limited liability company agreement of Keane Investor to, among other things, exchange all of our Existing Owners’ membership interests for the newly-created ownership interests. The computations of pro forma earnings per unit do not consider the 15,700,000 shares of common stock newly-issued by the Company to investors in the IPO.
|
(7)
|
Capital expenditures do not include, for the year ended December 31, 2018, $35.0 million of capital expenditures related to the asset acquisition from RSI, for the year ended December 31, 2017, $116.6 million of capital expenditures related to the acquisition of RockPile and, for the year ended December 31, 2016, $205.4 million of capital expenditures related to the acquisition of the Acquired Trican Operations.
|
(8)
|
Long-term debt includes $7.1 million, $7.5 million, $8.2 million and $18.4 million of unamortized debt discount and debt issuance costs for 2019, 2018, 2017, and 2016 respectively, and excludes capital lease obligations.
|
•
|
Completion Services, which consists of the following businesses and services lines: (1) hydraulic fracturing; (2) wireline and pumpdown services; and (3) completion support services, which includes our innovation centers and activities.
|
•
|
Well Construction and Intervention Services, which consists of the following businesses and service lines: (1) cementing services and (2) coiled tubing services.
|
•
|
Well Support Services, which consists of the following businesses and service lines: (1) rig services; (2) fluids management; and (3) other special well site services.
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
(Thousands of Dollars)
|
|
|
|
|
|
As a % of Revenue
|
|
Variance
|
|||||||||||||
Description
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||||
Completion Services
|
|
$
|
1,709,934
|
|
|
$
|
2,100,956
|
|
|
94
|
%
|
|
98
|
%
|
|
$
|
(391,022
|
)
|
|
(19
|
%)
|
Well Construction and Intervention Services
|
|
63,039
|
|
|
36,050
|
|
|
3
|
%
|
|
2
|
%
|
|
26,989
|
|
|
75
|
%
|
|||
Well Support Services
|
|
48,583
|
|
|
—
|
|
|
3
|
%
|
|
0
|
%
|
|
48,583
|
|
|
0
|
%
|
|||
Revenue
|
|
1,821,556
|
|
|
2,137,006
|
|
|
100
|
%
|
|
100
|
%
|
|
(315,450
|
)
|
|
(15
|
%)
|
|||
Completion Services
|
|
1,308,089
|
|
|
1,622,106
|
|
|
72
|
%
|
|
76
|
%
|
|
(314,017
|
)
|
|
(19
|
%)
|
|||
Well Construction and Intervention Services
|
|
55,227
|
|
|
38,440
|
|
|
3
|
%
|
|
2
|
%
|
|
16,787
|
|
|
44
|
%
|
|||
Well Support Services
|
|
40,616
|
|
|
—
|
|
|
2
|
%
|
|
0
|
%
|
|
40,616
|
|
|
0
|
%
|
|||
Costs of services
|
|
1,403,932
|
|
|
1,660,546
|
|
|
77
|
%
|
|
78
|
%
|
|
(256,614
|
)
|
|
(15
|
%)
|
|||
Depreciation and amortization
|
|
292,150
|
|
|
259,145
|
|
|
16
|
%
|
|
12
|
%
|
|
33,005
|
|
|
13
|
%
|
|||
Selling, general and administrative expenses
|
|
123,676
|
|
|
113,810
|
|
|
7
|
%
|
|
5
|
%
|
|
9,866
|
|
|
9
|
%
|
|||
Merger and integration
|
|
68,731
|
|
|
448
|
|
|
4
|
%
|
|
0
|
%
|
|
68,283
|
|
|
15,242
|
%
|
|||
(Gain) loss on disposal of assets
|
|
4,470
|
|
|
5,047
|
|
|
0
|
%
|
|
0
|
%
|
|
(577
|
)
|
|
(11
|
%)
|
|||
Impairment
|
|
12,346
|
|
|
—
|
|
|
1
|
%
|
|
0
|
%
|
|
12,346
|
|
|
0
|
%
|
|||
Operating income
|
|
(83,749
|
)
|
|
98,010
|
|
|
(5
|
%)
|
|
5
|
%
|
|
(181,759
|
)
|
|
(185
|
%)
|
|||
Other income (expense), net
|
|
453
|
|
|
(905
|
)
|
|
0
|
%
|
|
0
|
%
|
|
1,358
|
|
|
(150
|
%)
|
|||
Interest expense
|
|
(21,856
|
)
|
|
(33,504
|
)
|
|
(1
|
%)
|
|
(2
|
%)
|
|
11,648
|
|
|
(35
|
%)
|
|||
Total other expenses
|
|
(21,403
|
)
|
|
(34,409
|
)
|
|
(1
|
%)
|
|
(2
|
%)
|
|
13,006
|
|
|
(38
|
%)
|
|||
Income tax expense
|
|
(1,005
|
)
|
|
(4,270
|
)
|
|
0
|
%
|
|
0
|
%
|
|
3,265
|
|
|
(76
|
%)
|
|||
Net income (loss)
|
|
$
|
(106,157
|
)
|
|
$
|
59,331
|
|
|
(6
|
%)
|
|
3
|
%
|
|
$
|
(165,488
|
)
|
|
(279
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
partnering and growing with well-capitalized customers under dedicated agreements who focus their efforts on safety, high-efficiency completions, continuous improvement and innovation;
|
•
|
allocating our assets to maximize utilization and returns, including diversification of geographies and commodities;
|
•
|
maximizing profitability of fully-utilized fleets through leading-edge pricing and efficiencies;
|
•
|
investing in technology to further drive efficiencies, enable differentiation of service offerings, and reduce our overall cost structure;
|
•
|
leveraging our flexible and scalable logistics infrastructure to provide assurance of supply at lowest landed cost;
|
•
|
leveraging our platform to identify, retain and promote talent to sustain growth and support operational and commercial excellence; maintaining agreements with our existing strategic suppliers and identify and develop relationships with additional strategic suppliers to ensure continuity of supply and optimize efficiency;
|
•
|
maintaining our conservative and flexible capital position, supporting continued growth and maintenance of active equipment;
|
•
|
gaining scale, enhancing our service offering, and capturing targeted cost synergies from the C&J Merger; and
|
•
|
returning capital to shareholders in a disciplined fashion.
|
|
|
(Thousands of Dollars)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by operating activities
|
|
$
|
305,463
|
|
|
$
|
350,311
|
|
|
$
|
79,691
|
|
Net cash used in investing activities
|
|
$
|
(114,100
|
)
|
|
$
|
(297,506
|
)
|
|
$
|
(250,776
|
)
|
Net cash provided by (used in) financing activities
|
|
$
|
(16,746
|
)
|
|
$
|
(68,554
|
)
|
|
$
|
218,122
|
|
|
|
|
|
|
|
|
•
|
Operating activities:
|
–
|
Net cash generated by operating activities during the year ended December 31, 2019 of $305.5 million was a result of our thoroughness in receiving collections from our customers and controlling costs. We continue to focus on maintaining operational and spend efficiencies, resulting in positive working capital and net operating cash to support our capital expenditures and other investing activities.
|
•
|
Operating activities:
|
–
|
Net cash used in operating activities for the year ended December 31, 2019, included $61.9 million of merger and integration costs in connection with the C&J Merger.
|
•
|
Investing activities:
|
–
|
Net cash used in investing activities for the year ended December 31, 2019 consisted primarily of capital expenditures. This activity primarily related to our Completion Services segment.
|
•
|
Financing activities:
|
–
|
Cash used to repay our debt facilities, excluding leases and interest, during the year ended December 31, 2019 was $3.5 million.
|
–
|
Cash used to repay our finance leases during the year ended December 31, 2019 was $6.0 million.
|
–
|
Shares withheld and retired related to stock-based compensation during the year ended December 31, 2019 totaled $6.0 million.
|
•
|
Operating activities:
|
–
|
Net cash generated by operating activities in 2018 of $350.3 million was primarily driven by higher utilization of our combined asset base and increased gross profit in our Completion Services segment.
|
•
|
Investing activities:
|
–
|
Cash provided by the insurance proceeds received for losses resulting from the July 1, 2018 accidental fire was $18.1 million. For further details see Note (7) Property and Equipment, net of Part II, “Item 8. Financial Statements and Supplementary Data.”
|
–
|
$4.7 million in proceeds from sales of various assets, including our idle field operations facility in Mathis, Texas, within the Corporate segment, and hydraulic tractors and light general-purpose vehicles within the Completion Services segment.
|
•
|
Financing activities:
|
–
|
Cash provided by the 2018 Term Loan Facility, net of debt discount, was $348.2 million.
|
•
|
Operating activities:
|
–
|
$13.0 million of transaction costs, including underwriting discounts paid by the Company, primarily incurred to consummate the secondary stock offering completed in January 2018.
|
–
|
$7.9 million related to the portion of the cash settlement of our RockPile CVR liability that exceeded its acquisition-date fair value, with the remaining $12.0 million of the cash settlement cost reflected in the use of cash in financing activities as described below.
|
–
|
Net cash used in investing activities of $297.5 million was primarily associated with our asset acquisition from RSI and our newbuild and maintenance capital spend on active fleets, offset by insurance proceeds and proceeds from various asset sales, as discussed above under “Sources of cash.” This activity primarily related to our Completion Services segment.
|
•
|
Financing activities:
|
–
|
Cash used to repay our debt facilities, including capital leases but excluding interest, was $289.1 million.
|
–
|
Cash used to pay debt issuance costs associated with our debt facilities was $7.3 million.
|
–
|
Shares repurchased and retired related to our stock repurchase program totaled $104.9 million.
|
–
|
Shares repurchased and retired related to payroll tax withholdings on our share-based compensation totaled $3.6 million.
|
–
|
$12.0 million related to the portion of the cash settlement of our RockPile CVR liability that was reflective of its acquisition-date fair value.
|
•
|
Operating activities:
|
–
|
Net cash generated by operating activities in 2017 of $79.7 million was primarily driven by higher utilization of our combined asset base and increased gross profit in our Completion Services segment. We also had proceeds of $2.1 million and $4.2 million from the indemnification settlement with Trican and our insurance company related to the acquisition of
|
•
|
Investing activities:
|
–
|
Total proceeds of $30.6 million from the sale of assets relating to our facilities in Woodward, Oklahoma and Searcy, Arkansas, certain air compressor units, coiled tubing assets and the twelve workover rigs acquired in the acquisition of RockPile. See Note (7) Property and Equipment, net of Part II, “Item 8. Financial Statements and Supplementary Data.”
|
•
|
Financing activities:
|
–
|
Cash provided from IPO proceeds, $255.5 million. See Note (1)(a) Initial Public Offering of Part II, “Item 8. Financial Statements and Supplementary Data.”
|
–
|
The 2017 Term Loan Facility, entered into on March 15, 2017, provided for $145.0 million, net of associated origination and other transactions fees. Proceeds received were primarily used to fully repay our Senior Secured Notes. statements.
|
–
|
An incremental term loan facility, entered into on July 3, 2017, provided for $131.1 million, net of associated origination and other transaction fees. Proceeds received were primarily used to fund the acquisition of RockPile.
|
•
|
Investing activities:
|
–
|
Cash consideration of $116.6 million associated with the acquisition of RockPile, inclusive of a $7.8 million net working capital settlement.
|
–
|
Cash used for capital expenditures of $164.4 million, associated with maintenance capital spend on active fleets, commissioning costs associated with the deployment of our idle fleets, the newbuild acquired as part of the acquisition of RockPile and deposits on new equipment. This activity primarily related to our Completion Services segment.
|
•
|
Financing activities: Cash used to repay our debt facilities, including capital leases but excluding interest, in 2017 was $310.8 million. We used a portion of our IPO proceeds and the proceeds of the 2017 Term Loan Facility to repay our 2016 Term Loan Facility and Senior Secured Notes.
|
(Thousands of Dollars)
Contractual obligations
|
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
2025+
|
||||||||||
Long-term debt, including current portion(1)
|
|
$
|
344,750
|
|
|
$
|
3,500
|
|
|
$
|
7,000
|
|
|
$
|
7,000
|
|
|
$
|
327,250
|
|
Estimated interest payments(2)
|
|
115,729
|
|
|
22,262
|
|
|
43,572
|
|
|
42,031
|
|
|
7,864
|
|
|||||
Finance lease obligations(3)
|
|
10,061
|
|
|
4,977
|
|
|
4,811
|
|
|
273
|
|
|
—
|
|
|||||
Operating lease obligations(4)
|
|
68,344
|
|
|
26,068
|
|
|
22,096
|
|
|
9,259
|
|
|
10,921
|
|
|||||
Purchase commitments(5)
|
|
119,710
|
|
|
93,985
|
|
|
24,225
|
|
|
1,500
|
|
|
—
|
|
|||||
Equity-method investment(6)
|
|
1,302
|
|
|
1,302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Legal contingency
|
|
10,059
|
|
|
10,059
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
669,955
|
|
|
$
|
162,153
|
|
|
$
|
101,704
|
|
|
$
|
60,063
|
|
|
$
|
346,035
|
|
(1)
|
Long-term debt represents our obligations under our 2018 Term Loan Facility, exclusive of interest payments. In addition, these amounts exclude $7.1 million of unamortized debt discount and debt issuance costs associated with our 2018 Term Loan Facility.
|
(2)
|
Estimated interest payments are based on debt balances outstanding as of December 31, 2019 and include interest related to the 2018 Term Loan Facility. Interest rates used for variable rate debt are based on the prevailing current London Interbank Offer Rate (“LIBOR”).
|
(3)
|
Finance lease obligations primarily consist of obligations on our finance leases of light weight vehicles with ARI Financial Services Inc. and Enterprise FM Trust and includes interest payments.
|
(4)
|
Operating lease obligations are related to our real estate, rail cars, and light duty vehicles.
|
(5)
|
Purchase commitments primarily relate to our agreements with vendors for sand purchases and deposits on equipment. The purchase commitments to sand suppliers represent our annual obligations to purchase a minimum amount of sand from vendors. If the minimum purchase requirement is not met, the shortfall at the end of the year is settled in cash or, in some cases, carried forward to the next year.
|
(6)
|
Equity-method investment is related to our research and development commitments with our equity-method investee. See Notes (18) Commitments and Contingencies and (19) Related Party Transactions of Part II, “Item 8. Financial Statements and Supplementary Data” for further details.
|
NexTier Oilfield Solutions Inc.
|
|
|
|
Audited Consolidated and Combined Financial Statements
|
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets
|
|
Consolidated and Combined Statements of Operations and Comprehensive Income (Loss)
|
|
Consolidated and Combined Statements of Changes in Stockholders’ Equity
|
|
Consolidated and Combined Statements of Cash Flows
|
|
Notes to Consolidated and Combined Financial Statements
|
|
|
|
|
|
December 31,
2019 |
|
December 31,
2018 |
|
||||
Assets
|
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
255,015
|
|
|
$
|
80,206
|
|
|
Trade and other accounts receivable, net
|
|
350,765
|
|
|
210,428
|
|
|
||
Inventories, net
|
|
61,641
|
|
|
35,669
|
|
|
||
Assets held for sale
|
|
141
|
|
|
176
|
|
|
||
Prepaid and other current assets
|
|
20,492
|
|
|
5,784
|
|
|
||
Total current assets
|
|
688,054
|
|
|
332,263
|
|
|
||
Operating lease right-of-use assets
|
|
54,503
|
|
|
—
|
|
|
||
Finance lease right-of-use assets
|
|
9,511
|
|
|
—
|
|
|
||
Property and equipment, net
|
|
709,404
|
|
|
531,319
|
|
|
||
Goodwill
|
|
137,458
|
|
|
132,524
|
|
|
||
Intangible assets
|
|
55,021
|
|
|
51,904
|
|
|
||
Other noncurrent assets
|
|
10,956
|
|
|
6,569
|
|
|
||
Total assets
|
|
$
|
1,664,907
|
|
|
$
|
1,054,579
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||||
Accounts payable
|
|
$
|
115,251
|
|
|
$
|
106,702
|
|
|
Accrued expenses
|
|
234,895
|
|
|
101,539
|
|
|
||
Current maturities of long-term operating lease liabilities
|
|
23,473
|
|
|
—
|
|
|
||
Current maturities of long-term finance lease liabilities
|
|
4,594
|
|
|
4,928
|
|
|
||
Current maturities of long-term debt
|
|
2,311
|
|
|
2,776
|
|
|
||
Stock-based compensation
|
|
—
|
|
|
4,281
|
|
|
||
Other current liabilities
|
|
5,670
|
|
|
354
|
|
|
||
Total current liabilities
|
|
386,194
|
|
|
220,580
|
|
|
||
Long-term operating lease liabilities, less current maturities
|
|
35,123
|
|
|
—
|
|
|
||
Long-term finance lease liabilities, less current maturities
|
|
4,844
|
|
|
5,581
|
|
|
||
Long-term debt, net of deferred financing costs and debt discount, less current maturities
|
|
335,312
|
|
|
337,954
|
|
|
||
Other noncurrent liabilities
|
|
16,662
|
|
|
3,283
|
|
|
||
Total noncurrent liabilities
|
|
391,941
|
|
|
346,818
|
|
|
||
Total liabilities
|
|
778,135
|
|
|
567,398
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||||
Common stock, par value $0.01 per share (authorized 500,000 shares, issued and outstanding 212,410 and 104,188 shares, respectively)
|
|
2,124
|
|
|
1,038
|
|
|
||
Paid-in capital in excess of par value
|
|
966,762
|
|
|
455,447
|
|
|
||
Retained earnings (deficit)
|
|
(73,333
|
)
|
|
31,494
|
|
|
||
Accumulated other comprehensive loss
|
|
(8,781
|
)
|
|
(798
|
)
|
|
||
Total stockholders’ equity
|
|
886,772
|
|
|
487,181
|
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,664,907
|
|
|
$
|
1,054,579
|
|
|
|
|
Year Ended
December 31, |
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
|
$
|
1,821,556
|
|
|
$
|
2,137,006
|
|
|
$
|
1,542,081
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of services (1)
|
|
1,403,932
|
|
|
1,660,546
|
|
|
1,282,561
|
|
|||
Depreciation and amortization
|
|
292,150
|
|
|
259,145
|
|
|
159,280
|
|
|||
Selling, general and administrative expenses
|
|
123,676
|
|
|
113,810
|
|
|
84,853
|
|
|||
Merger and integration
|
|
68,731
|
|
|
448
|
|
|
8,673
|
|
|||
(Gain) loss on disposal of assets
|
|
4,470
|
|
|
5,047
|
|
|
(2,555
|
)
|
|||
Impairment expense
|
|
12,346
|
|
|
—
|
|
|
—
|
|
|||
Total operating costs and expenses
|
|
1,905,305
|
|
|
2,038,996
|
|
|
1,532,812
|
|
|||
Operating income (loss)
|
|
(83,749
|
)
|
|
98,010
|
|
|
9,269
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Other income (expense), net
|
|
453
|
|
|
(905
|
)
|
|
13,963
|
|
|||
Interest expense
|
|
(21,856
|
)
|
|
(33,504
|
)
|
|
(59,223
|
)
|
|||
Total other expenses
|
|
(21,403
|
)
|
|
(34,409
|
)
|
|
(45,260
|
)
|
|||
Income (loss) before income taxes
|
|
(105,152
|
)
|
|
63,601
|
|
|
(35,991
|
)
|
|||
Income tax expense
|
|
(1,005
|
)
|
|
(4,270
|
)
|
|
(150
|
)
|
|||
Net income (loss)
|
|
(106,157
|
)
|
|
59,331
|
|
|
(36,141
|
)
|
|||
Net loss attributable to predecessor
|
|
—
|
|
|
—
|
|
|
(7,918
|
)
|
|||
Net income (loss) attributable to NexTier
|
|
(106,157
|
)
|
|
59,331
|
|
|
(28,223
|
)
|
|||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(116
|
)
|
|
(114
|
)
|
|
96
|
|
|||
Hedging activities
|
|
(7,628
|
)
|
|
(880
|
)
|
|
791
|
|
|||
Total comprehensive income (loss)
|
|
$
|
(113,901
|
)
|
|
$
|
58,337
|
|
|
$
|
(35,254
|
)
|
|
|
|
|
|
|
|
||||||
Net income (loss) per share:
|
|
|
|
|
|
|
||||||
Basic net income (loss) per share
|
|
$
|
(0.86
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.34
|
)
|
Diluted net income (loss) per share
|
|
$
|
(0.86
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.34
|
)
|
|
|
|
|
|
|
|
||||||
Weighted-average shares outstanding: basic
|
|
122,977
|
|
|
109,335
|
|
|
106,321
|
|
|||
Weighted-average shares outstanding: diluted
|
|
122,977
|
|
|
109,660
|
|
|
106,321
|
|
(1)
|
Cost of services during the years ended December 31, 2019, 2018, and 2017 excludes depreciation of $276.8 million, $245.6 million, and $150.6 million, respectively. Depreciation related to cost of services is presented within depreciation and amortization separately.
|
|
|
Members’ equity
|
|
Common Stock
|
|
Paid-in Capital in Excess of Par Value
|
|
Retained Earnings (deficit)
|
|
Accumulated other comprehensive income (loss)
|
|
Total
|
||||||||||||
Balance as of December 31, 2016
|
|
$
|
453,810
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(288,771
|
)
|
|
$
|
(2,787
|
)
|
|
$
|
162,252
|
|
Net loss prior to the Organizational Transactions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,918
|
)
|
|
—
|
|
|
(7,918
|
)
|
||||||
Effect of the Organizational Transactions
|
|
(453,810
|
)
|
|
—
|
|
|
156,270
|
|
|
297,540
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock sold in initial public offering, net of offering costs and deferred stock awards for executives
|
|
—
|
|
|
1,031
|
|
|
245,902
|
|
|
—
|
|
|
—
|
|
|
246,933
|
|
||||||
Stock-based compensation recognized subsequent to the Organizational Transactions
|
|
—
|
|
|
—
|
|
|
10,578
|
|
|
—
|
|
|
—
|
|
|
10,578
|
|
||||||
Effect of RockPile acquisition
|
|
—
|
|
|
87
|
|
|
130,203
|
|
|
—
|
|
|
—
|
|
|
130,290
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,059
|
|
|
1,059
|
|
||||||
Deferred tax adjustment
|
|
—
|
|
|
—
|
|
|
(1,879
|
)
|
|
—
|
|
|
—
|
|
|
(1,879
|
)
|
||||||
Net loss subsequent to Organizational Transactions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,223
|
)
|
|
—
|
|
|
(28,223
|
)
|
||||||
Balance as of December 31, 2017
|
|
$
|
—
|
|
|
$
|
1,118
|
|
|
$
|
541,074
|
|
|
$
|
(27,372
|
)
|
|
$
|
(1,728
|
)
|
|
$
|
513,092
|
|
Stock-based compensation(1)
|
|
—
|
|
|
2
|
|
|
21,458
|
|
|
—
|
|
|
—
|
|
|
21,460
|
|
||||||
Shares repurchased and retired related to stock-based compensation
|
|
—
|
|
|
(1
|
)
|
|
(3,578
|
)
|
|
—
|
|
|
—
|
|
|
(3,579
|
)
|
||||||
Shares repurchased and retired related to stock repurchase program
|
|
—
|
|
|
(81
|
)
|
|
(103,507
|
)
|
|
(1,273
|
)
|
|
—
|
|
|
(104,861
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
808
|
|
|
930
|
|
|
1,738
|
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,331
|
|
|
—
|
|
|
59,331
|
|
||||||
Balance as of December 31, 2018
|
|
$
|
—
|
|
|
$
|
1,038
|
|
|
$
|
455,447
|
|
|
$
|
31,494
|
|
|
$
|
(798
|
)
|
|
$
|
487,181
|
|
New lease standard implementation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,330
|
|
|
—
|
|
|
1,330
|
|
||||||
Stock-based compensation(1)
|
|
—
|
|
|
33
|
|
|
33,226
|
|
|
—
|
|
|
—
|
|
|
33,259
|
|
||||||
Shares repurchased and retired related to stock-based compensation
|
|
—
|
|
|
(6
|
)
|
|
(5,976
|
)
|
|
—
|
|
|
—
|
|
|
(5,982
|
)
|
||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,983
|
)
|
|
(7,983
|
)
|
||||||
Equity issued in connection with the C&J Merger
|
|
—
|
|
|
1,059
|
|
|
484,065
|
|
|
—
|
|
|
—
|
|
|
485,124
|
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(106,157
|
)
|
|
—
|
|
|
(106,157
|
)
|
||||||
Balance as of December 31, 2019
|
|
$
|
—
|
|
|
$
|
2,124
|
|
|
$
|
966,762
|
|
|
$
|
(73,333
|
)
|
|
$
|
(8,781
|
)
|
|
$
|
886,772
|
|
(1)
|
Stock-based compensation during 2019 and 2018 includes stock-based compensation expense recognized during the period of $29.0 million and $17.2 million and the vested deferred stock awards of $4.3 million and $4.3 million, respectively. Refer to Note (12) Stock-Based Compensation for further discussion of the Company’s stock-based compensation.
|
|
|
Year Ended
December 31, |
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(106,157
|
)
|
|
$
|
59,331
|
|
|
$
|
(36,141
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
292,150
|
|
|
259,145
|
|
|
159,280
|
|
|||
Amortization of deferred financing fees
|
|
1,360
|
|
|
3,147
|
|
|
5,241
|
|
|||
(Gain) loss on disposal of assets
|
|
4,470
|
|
|
5,047
|
|
|
(2,555
|
)
|
|||
Stock-based compensation
|
|
28,977
|
|
|
17,166
|
|
|
10,578
|
|
|||
Loss on debt extinguishment/modification, including prepayment premiums
|
|
526
|
|
|
7,563
|
|
|
31,084
|
|
|||
Loss on contingent consideration liability
|
|
—
|
|
|
13,254
|
|
|
—
|
|
|||
Loss on foreign currency translation
|
|
—
|
|
|
2,621
|
|
|
—
|
|
|||
Unrealized gain (loss) on derivatives
|
|
(7,628
|
)
|
|
(880
|
)
|
|
791
|
|
|||
Realized (gain) loss on derivatives
|
|
(239
|
)
|
|
(697
|
)
|
|
172
|
|
|||
Gain on insurance proceeds recognized in other income
|
|
—
|
|
|
(14,892
|
)
|
|
—
|
|
|||
Loss on impairment of assets
|
|
12,346
|
|
|
—
|
|
|
—
|
|
|||
Other non-cash expenses
|
|
—
|
|
|
—
|
|
|
(322
|
)
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
||||||
Decrease (increase) in trade and other accounts receivable, net
|
|
172,566
|
|
|
27,485
|
|
|
(113,047
|
)
|
|||
Decrease (increase) in inventories
|
|
17,181
|
|
|
(2,725
|
)
|
|
(15,475
|
)
|
|||
Decrease in prepaid and other current assets
|
|
3,703
|
|
|
2,734
|
|
|
20,294
|
|
|||
Decrease (increase) in other assets
|
|
(242
|
)
|
|
362
|
|
|
(336
|
)
|
|||
Increase (decrease) in accounts payable
|
|
(17,799
|
)
|
|
11,304
|
|
|
(141
|
)
|
|||
Decrease in customer contract liabilities
|
|
—
|
|
|
(4,940
|
)
|
|
—
|
|
|||
Increase (decrease) in accrued expenses
|
|
(103,609
|
)
|
|
(32,318
|
)
|
|
41,446
|
|
|||
Increase (decrease) in other liabilities
|
|
7,858
|
|
|
(2,396
|
)
|
|
(21,178
|
)
|
|||
Net cash provided by operating activities
|
|
305,463
|
|
|
350,311
|
|
|
79,691
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
||||||
Asset and business acquisitions, including cash acquired
|
|
68,807
|
|
|
(35,003
|
)
|
|
(116,576
|
)
|
|||
Purchase of property and equipment
|
|
(200,385
|
)
|
|
(277,569
|
)
|
|
(141,340
|
)
|
|||
Advances of deposit on equipment
|
|
(7,451
|
)
|
|
(4,153
|
)
|
|
(23,096
|
)
|
|||
Payments for leasehold improvements
|
|
—
|
|
|
(1,651
|
)
|
|
(157
|
)
|
|||
Implementation of software
|
|
(4,408
|
)
|
|
(883
|
)
|
|
(687
|
)
|
|||
Proceeds from sale of assets
|
|
29,114
|
|
|
4,652
|
|
|
30,565
|
|
|||
Proceeds from insurance recoveries
|
|
223
|
|
|
18,247
|
|
|
515
|
|
|||
Equity-method investment
|
|
—
|
|
|
(1,146
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
|
(114,100
|
)
|
|
(297,506
|
)
|
|
(250,776
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
|
—
|
|
|
—
|
|
|
255,494
|
|
Proceeds from the secured notes and term loan facilities
|
|
—
|
|
|
348,250
|
|
|
285,000
|
|
|||
Payments on the secured notes and term loan facilities
|
|
(3,500
|
)
|
|
(284,952
|
)
|
|
(289,902
|
)
|
|||
Payments on finance leases
|
|
(6,035
|
)
|
|
(4,119
|
)
|
|
(2,861
|
)
|
|||
Prepayment premiums on early debt extinguishment
|
|
—
|
|
|
—
|
|
|
(15,817
|
)
|
|||
Payment of debt issuance costs
|
|
(1,229
|
)
|
|
(7,331
|
)
|
|
(13,792
|
)
|
|||
Payment of contingent consideration liability
|
|
—
|
|
|
(11,962
|
)
|
|
—
|
|
|||
Shares repurchased and retired related to share repurchase program
|
|
—
|
|
|
(104,861
|
)
|
|
—
|
|
|||
Shares repurchased and retired related to stock-based compensation
|
|
(5,982
|
)
|
|
(3,579
|
)
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
|
(16,746
|
)
|
|
(68,554
|
)
|
|
218,122
|
|
|||
Non-cash effect of foreign translation adjustments
|
|
192
|
|
|
(165
|
)
|
|
163
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
174,809
|
|
|
(15,914
|
)
|
|
47,200
|
|
|||
Cash, cash equivalents and restricted cash, beginning
|
|
80,206
|
|
|
96,120
|
|
|
48,920
|
|
|||
Cash, cash equivalents and restricted cash, ending
|
|
$
|
255,015
|
|
|
$
|
80,206
|
|
|
$
|
96,120
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
$
|
20,836
|
|
|
$
|
24,528
|
|
|
$
|
30,104
|
|
CVR settlement
|
|
—
|
|
|
19,918
|
|
|
—
|
|
|||
Income taxes
|
|
1,726
|
|
|
5,529
|
|
|
—
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
||||||
Change in accrued capital expenditures
|
|
$
|
(17,274
|
)
|
|
$
|
2,930
|
|
|
$
|
21,549
|
|
Non-cash additions to finance right-of use assets
|
|
6,269
|
|
|
—
|
|
|
—
|
|
|||
Non-cash additions to finance lease liabilities, including current maturities
|
|
(6,286
|
)
|
|
—
|
|
|
—
|
|
|||
Non-cash additions to operating right-of-use assets
|
|
65,551
|
|
|
—
|
|
|
—
|
|
|||
Non-cash additions to operating lease liabilities, including current maturities
|
|
(65,297
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Fair value of C&J assets acquired
|
|
806,218
|
|
|
—
|
|
|
—
|
|
|||
106,627 shares of NexTier common stock issued in exchange for C&J capital stock and replacement awards
|
|
(485,124
|
)
|
|
—
|
|
|
—
|
|
|||
C&J liabilities assumed
|
|
(321,094
|
)
|
|
—
|
|
|
—
|
|
•
|
Certain entities affiliated with Cerberus Capital Management, L.P., certain members of the Keane family, Trican Well Service Ltd. (“Trican”) and certain members of the Company’s management team (collectively, the “Existing Owners”) contributed all of their direct and indirect equity interests in Keane Group to Keane Investor Holdings LLC (“Keane Investor”);
|
•
|
Keane Investor contributed all of its equity interests in Keane Group to the Company in exchange for common stock of the Company; and
|
•
|
The Company’s independent directors received grants of restricted stock of the Company in substitution for their interests in Keane Group.
|
|
|
Year Ended December 31, 2019
|
||||||||||||||
|
|
Completion Services
|
|
WC&I
|
|
Well Support Services
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Geography
|
|
|
|
|
|
|
|
|
||||||||
Northeast
|
|
$
|
479,685
|
|
|
$
|
5,193
|
|
|
$
|
—
|
|
|
$
|
484,878
|
|
Central
|
|
104,225
|
|
|
5,741
|
|
|
—
|
|
|
109,966
|
|
||||
West Texas
|
|
839,652
|
|
|
24,575
|
|
|
9,336
|
|
|
873,563
|
|
||||
West
|
|
273,364
|
|
|
27,530
|
|
|
39,247
|
|
|
340,141
|
|
||||
International
|
|
13,008
|
|
|
—
|
|
|
—
|
|
|
13,008
|
|
||||
|
|
$
|
1,709,934
|
|
|
$
|
63,039
|
|
|
$
|
48,583
|
|
|
$
|
1,821,556
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
|
Completion Services
|
|
WC&I
|
|
Well Support Services
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Geography
|
|
|
|
|
|
|
|
|
||||||||
Northeast
|
|
$
|
790,026
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
790,026
|
|
Central
|
|
61,083
|
|
|
—
|
|
|
—
|
|
|
61,083
|
|
||||
West Texas
|
|
1,005,630
|
|
|
12,256
|
|
|
—
|
|
|
1,017,886
|
|
||||
West
|
|
244,217
|
|
|
23,794
|
|
|
—
|
|
|
268,011
|
|
||||
|
|
$
|
2,100,956
|
|
|
$
|
36,050
|
|
|
$
|
—
|
|
|
$
|
2,137,006
|
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
|
Completion Services
|
|
WC&I
|
|
Well Support Services
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Geography
|
|
|
|
|
|
|
|
|
||||||||
Northeast
|
|
$
|
566,931
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
566,931
|
|
Central
|
|
103,857
|
|
|
—
|
|
|
—
|
|
|
103,857
|
|
||||
West Texas
|
|
635,877
|
|
|
—
|
|
|
—
|
|
|
635,877
|
|
||||
West
|
|
220,623
|
|
|
7,526
|
|
|
7,267
|
|
|
235,416
|
|
||||
|
|
$
|
1,527,288
|
|
|
$
|
7,526
|
|
|
$
|
7,267
|
|
|
$
|
1,542,081
|
|
Land
|
Indefinite life
|
Building and leasehold improvements
|
13 months – 40 years
|
Machinery and equipment
|
13 months – 10 years
|
Office furniture, fixtures and equipment
|
3 years – 5 years
|
•
|
Level 1 Inputs: Quoted prices (unadjusted) in an active market for identical assets or liabilities.
|
•
|
Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
•
|
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
•
|
all short-term leases with term lengths of 12 months or less will not be capitalized; the underlying class of assets to which the Company has applied this expedient is primarily its apartment leases;
|
•
|
for non-revenue contracts containing both lease and non-lease components, both components will be combined and accounted for as one lease component and accounted for under ASC 842; and
|
•
|
for revenue contracts containing both lease and non-lease components, both components will be combined and accounted for as one component and accounted for under ASC 606.
|
•
|
reassess whether any expired or existing contracts contained leases;
|
•
|
reassess the lease classification for any expired or existing leases; and
|
•
|
reassess initial direct costs for any existing leases.
|
Total Purchase Consideration:
|
|
(Thousands of Dollars)
|
||
Equity consideration
|
|
$
|
481,912
|
|
Replacement awards attributable to pre-combination services
|
|
3,212
|
|
|
Less: Cash acquired
|
|
$
|
(68,807
|
)
|
Total purchase consideration
|
|
$
|
416,317
|
|
|
|
|
||
Trade and accounts receivable
|
|
$
|
312,620
|
|
Inventories
|
|
43,142
|
|
|
Prepaid and other current assets
|
|
18,512
|
|
|
Property and equipment
|
|
311,886
|
|
|
Intangible assets
|
|
17,590
|
|
|
Right of use assets
|
|
24,318
|
|
|
Other noncurrent assets
|
|
4,409
|
|
|
Total identifiable assets acquired
|
|
732,477
|
|
|
Accounts payable
|
|
43,620
|
|
|
Accrued expenses
|
|
236,959
|
|
|
Short term lease liability
|
|
7,842
|
|
|
Long term lease liability
|
|
15,517
|
|
|
Non-current liabilities
|
|
17,156
|
|
|
Total liabilities assumed
|
|
321,094
|
|
|
Goodwill
|
|
4,934
|
|
|
Total purchase consideration
|
|
$
|
416,317
|
|
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||
|
|
Weighted average remaining
amortization period (Years) |
|
Gross
Carrying Amounts |
||
Technology
|
|
3
|
|
17,590
|
|
|
Total
|
|
|
|
$
|
17,590
|
|
•
|
(i) the aggregate gross proceeds received in connection with the resale of any Acquisition Shares, plus
|
•
|
(ii) the product of the number of Acquisition Shares held by the RockPile Holders on April 10, 2018 and the Twenty-Day VWAP, plus
|
•
|
(iii) the Aggregate CVR Payment Amount.
|
Total Purchase Consideration:
|
|
Preliminary Purchase Price Allocation
|
|
Adjustments
|
|
Final Purchase Price Allocation
|
||||||
(Thousands of Dollars)
|
|
|
|
|
|
|
||||||
Cash consideration
|
|
$
|
123,293
|
|
|
$
|
(6,717
|
)
|
|
$
|
116,576
|
|
Equity consideration
|
|
130,290
|
|
|
—
|
|
|
130,290
|
|
|||
Contingent consideration
|
|
11,962
|
|
|
—
|
|
|
11,962
|
|
|||
Less: Cash acquired
|
|
(20,379
|
)
|
|
20,379
|
|
|
—
|
|
|||
Total purchase consideration, less cash acquired
|
|
$
|
245,166
|
|
|
$
|
13,662
|
|
|
$
|
258,828
|
|
|
|
|
|
|
|
|
||||||
Trade and other accounts receivable
|
|
$
|
57,117
|
|
|
$
|
1,484
|
|
|
$
|
58,601
|
|
Inventories, net
|
|
2,853
|
|
|
138
|
|
|
2,991
|
|
|||
Prepaid and other current assets
|
|
13,630
|
|
|
(717
|
)
|
|
12,913
|
|
|||
Property and equipment, net
|
|
157,654
|
|
|
8,653
|
|
|
166,307
|
|
|||
Intangible assets
|
|
20,967
|
|
|
(1,267
|
)
|
|
19,700
|
|
|||
Notes receivable
|
|
250
|
|
|
(250
|
)
|
|
—
|
|
|||
Other noncurrent assets
|
|
363
|
|
|
(57
|
)
|
|
306
|
|
|||
Total identifiable assets acquired
|
|
252,834
|
|
|
7,984
|
|
|
260,818
|
|
|||
Accounts payable
|
|
(38,999
|
)
|
|
16,180
|
|
|
(22,819
|
)
|
|||
Accrued expenses
|
|
(22,161
|
)
|
|
(13,315
|
)
|
|
(35,476
|
)
|
|||
Deferred revenue
|
|
(23,053
|
)
|
|
698
|
|
|
(22,355
|
)
|
|||
Other non-current liabilities
|
|
(827
|
)
|
|
(2,412
|
)
|
|
(3,239
|
)
|
|||
Total liabilities assumed
|
|
(85,040
|
)
|
|
1,151
|
|
|
(83,889
|
)
|
|||
Goodwill
|
|
77,372
|
|
|
4,527
|
|
|
81,899
|
|
|||
Total purchase price consideration
|
|
$
|
245,166
|
|
|
$
|
13,662
|
|
|
$
|
258,828
|
|
|
|
|
|
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||
|
|
Weighted average remaining
amortization period (Years) |
|
Gross
Carrying Amounts |
||
Customer contracts
|
|
10.8
|
|
$
|
19,700
|
|
Total
|
|
|
|
$
|
19,700
|
|
|
|
(Thousands of Dollars)
|
||
Transaction Type
|
|
Year Ended
December 31, 2017 |
||
Deal costs
|
|
$
|
6,679
|
|
Integration
|
|
1,994
|
|
|
|
|
$
|
8,673
|
|
|
|
(Thousands of Dollars)
|
||||||
|
|
Unaudited
|
||||||
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Revenue
|
|
$
|
1,732,279
|
|
|
$
|
543,966
|
|
Net loss
|
|
(49,348
|
)
|
|
(203,383
|
)
|
||
|
|
|
|
|
||||
Net loss per share (basic and diluted)
|
|
$
|
(0.44
|
)
|
|
$
|
(2.12
|
)
|
Weighted-average shares outstanding (basic and diluted)
|
|
111,939
|
|
|
96,112
|
|
||
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||||||||||
|
|
December 31, 2018
|
||||||||||
|
|
Gross
Carrying Amounts |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||
Customer contracts
|
|
$
|
67,600
|
|
|
$
|
(27,755
|
)
|
|
$
|
39,845
|
|
Non-compete agreements
|
|
700
|
|
|
(362
|
)
|
|
338
|
|
|||
Trade name
|
|
10,200
|
|
|
—
|
|
|
10,200
|
|
|||
Technology
|
|
2,262
|
|
|
(741
|
)
|
|
1,521
|
|
|||
Total
|
|
$
|
80,762
|
|
|
$
|
(28,858
|
)
|
|
$
|
51,904
|
|
|
|
|
|
|
|
|
Year-end December 31,
|
|
(Thousands of Dollars)
|
||
2020
|
|
$
|
(11,239
|
)
|
2021
|
|
(10,953
|
)
|
|
2022
|
|
(9,867
|
)
|
|
2023
|
|
(4,973
|
)
|
|
2024
|
|
(4,973
|
)
|
|
|
(Thousands of Dollars)
|
||||||
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Land
|
|
$
|
35,178
|
|
|
$
|
4,771
|
|
Building and leasehold improvements
|
|
90,950
|
|
|
32,134
|
|
||
Office furniture, fixtures and equipment
|
|
10,678
|
|
|
7,691
|
|
||
Machinery and equipment
|
|
1,259,697
|
|
|
1,041,212
|
|
||
|
|
1,396,503
|
|
|
1,085,808
|
|
||
Less accumulated depreciation
|
|
(723,060
|
)
|
|
(562,813
|
)
|
||
Construction in progress
|
|
35,961
|
|
|
8,324
|
|
||
Total property and equipment, net
|
|
$
|
709,404
|
|
|
$
|
531,319
|
|
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||||||
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
2018 Term Loan Facility
|
|
344,750
|
|
|
348,250
|
|
||
Less: Unamortized debt discount and debt issuance costs
|
|
(7,127
|
)
|
|
(7,520
|
)
|
||
Total debt, net of unamortized debt discount and debt issuance costs
|
|
337,623
|
|
|
340,730
|
|
||
Less: Current portion
|
|
(2,311
|
)
|
|
(2,776
|
)
|
||
Long-term debt, net of unamortized debt discount and debt issuance costs
|
|
$
|
335,312
|
|
|
$
|
337,954
|
|
(Thousands of Dollars)
|
|
|
||
Year-end December 31,
|
|
|
||
2020
|
|
$
|
3,500
|
|
2021
|
|
3,500
|
|
|
2022
|
|
3,500
|
|
|
2023
|
|
3,500
|
|
|
2024
|
|
3,500
|
|
|
|
|
$
|
17,500
|
|
|
(Thousands of Dollars)
|
||||||||||||||||||
|
Derivatives
designated as hedging instruments |
|
Derivatives
not designated as hedging instruments |
|
Gross Amounts
of Recognized Assets and Liabilities |
|
Gross
Amounts Offset in the Balance Sheet(1) |
|
Net Amounts
Presented in the Balance Sheet(2) |
||||||||||
As of December 31, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other current asset
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other noncurrent asset
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other current liability
|
(1,729
|
)
|
|
—
|
|
|
(1,729
|
)
|
|
—
|
|
|
(1,729
|
)
|
|||||
Other noncurrent liability
|
(5,559
|
)
|
|
—
|
|
|
(5,559
|
)
|
|
—
|
|
|
(5,559
|
)
|
|||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other current asset
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other noncurrent asset
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other current liability
|
(129
|
)
|
|
—
|
|
|
(129
|
)
|
|
—
|
|
|
(129
|
)
|
|||||
Other noncurrent liability
|
(169
|
)
|
|
—
|
|
|
(169
|
)
|
|
—
|
|
|
(169
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Agreements are in place that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements.
|
(2)
|
There are no amounts subject to an enforceable master netting arrangement that are not netted in these amounts. There are no amounts of related financial collateral received or pledged.
|
|
|
Year Ended December 31,
|
|
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
Location
|
||||||
Amount of gain (loss) recognized in other comprehensive income on derivative
|
|
$
|
(7,628
|
)
|
|
$
|
(880
|
)
|
|
$
|
791
|
|
|
OCI
|
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) (“AOCI”) into earnings
|
|
239
|
|
|
697
|
|
|
(72
|
)
|
|
Interest Expense
|
|||
Amount of loss reclassified from AOCI into earnings as a result of originally forecasted transaction becoming probable of not occurring
|
|
—
|
|
|
—
|
|
|
(100
|
)
|
|
Interest Expense
|
|
|
|
|
Year Ended December 31,
|
||||||||||
Description
|
|
Location
|
|
2019
|
|
2018
|
|
2017
|
||||||
Gains (loss) on interest contracts
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(367
|
)
|
|
|
|
|
Fair value measurements at reporting date using
|
||||||||||||
|
|
December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
|
$
|
(7,288
|
)
|
|
$
|
—
|
|
|
$
|
(7,288
|
)
|
|
$
|
—
|
|
|
|
|
|
Fair value measurements at reporting date using
|
||||||||
|
|
December 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||
Interest rate derivatives
|
|
(298
|
)
|
|
—
|
|
|
(298
|
)
|
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Deferred stock awards
|
|
—
|
|
|
4,280
|
|
|
4,280
|
|
|||
Restricted stock awards
|
|
1,486
|
|
|
611
|
|
|
399
|
|
|||
Restricted stock units
|
|
20,426
|
|
|
9,822
|
|
|
4,766
|
|
|||
Non-qualified stock options
|
|
3,498
|
|
|
2,453
|
|
|
1,133
|
|
|||
Restricted stock performance-based stock unit awards
|
|
3,567
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
|
$
|
28,977
|
|
|
$
|
17,166
|
|
|
$
|
10,578
|
|
Tax benefit
|
|
$
|
(6,954
|
)
|
|
(4,134
|
)
|
|
(2,532
|
)
|
||
Stock-based compensation, net of tax
|
|
22,023
|
|
|
$
|
13,032
|
|
|
$
|
8,046
|
|
|
|
Bonus Amounts (In thousands)
|
||||||
|
|
First
|
|
Second
|
||||
James C. Stewart
|
|
$
|
1,976
|
|
|
$
|
1,976
|
|
Gregory L. Powell
|
|
$
|
1,646
|
|
|
$
|
1,646
|
|
M. Paul DeBonis Jr.
|
|
$
|
659
|
|
|
$
|
659
|
|
|
|
Number of Restricted Stock Awards
(In thousands)
|
|
Weighted average grant date fair value
|
|||
Total non-vested at December 31, 2018
|
|
94
|
|
|
$
|
17.40
|
|
Shares issued
|
|
678
|
|
|
4.99
|
|
|
Shares vested
|
|
(478
|
)
|
|
7.70
|
|
|
Shares forfeited
|
|
(2
|
)
|
|
4.55
|
|
|
Non-vested balance at December 31, 2019
|
|
292
|
|
|
$
|
4.55
|
|
|
|
|
|
|
|
|
Number of Restricted Stock Units
(In thousands)
|
|
Weighted average grant date fair value
|
|||
Total non-vested at December 31, 2018
|
|
1,947
|
|
|
$
|
14.83
|
|
Units issued
|
|
2,679
|
|
|
8.57
|
|
|
Units vested
|
|
(1,700
|
)
|
|
11.58
|
|
|
Units forfeited
|
|
(166
|
)
|
|
13.89
|
|
|
Non-vested balance at December 31, 2019
|
|
2,760
|
|
|
$
|
10.82
|
|
|
|
|
|
|
|
|
Number of Stock Options
(In thousands)
|
|
Weighted average grant date fair value
|
|||
Total outstanding at December 31, 2018
|
|
1,219
|
|
|
$
|
6.75
|
|
Options granted
|
|
549
|
|
|
0.74
|
|
|
Options exercised
|
|
—
|
|
|
—
|
|
|
Actual options forfeited
|
|
(25
|
)
|
|
6.77
|
|
|
Options expired
|
|
—
|
|
|
—
|
|
|
Total outstanding at December 31, 2019
|
|
1,743
|
|
|
$
|
4.86
|
|
|
|
|
|
|
|
2019 Options Granted
|
|
2018 Options Granted
|
|
2017 Options Granted
|
||||||
Valuation assumptions:
|
|
|
|
|
|
||||||
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|||
Expected equity volatility
|
49.6
|
%
|
|
46.3
|
%
|
|
51.5
|
%
|
|||
Expected term (years)
|
7.3 - 8.1
|
|
|
6
|
|
|
6
|
|
|||
Risk-free interest rate
|
1.7
|
%
|
|
2.7
|
%
|
|
1.6
|
%
|
|||
Weighted average:
|
|
|
|
|
|
||||||
Exercise price per stock option
|
$19.09 - $26.41
|
|
|
$
|
15.31
|
|
|
$
|
19.00
|
|
|
Market price per share
|
$
|
4.55
|
|
|
$
|
15.31
|
|
|
$
|
14.49
|
|
Weighted average fair value per stock option
|
$
|
0.74
|
|
|
$
|
7.28
|
|
|
$
|
6.16
|
|
|
|
|
|
|
|
|
|
Number of Performance-based RSU’s
(In thousands)
|
|
Weighted average grant date fair value
|
|||
Total outstanding at December 31, 2018
|
|
—
|
|
|
$
|
—
|
|
Performance-based RSU’s issued
|
|
327
|
|
|
11.00
|
|
|
Performance-based RSU’s vested
|
|
(327
|
)
|
|
—
|
|
|
Performance-based RSU’s forfeited
|
|
—
|
|
|
—
|
|
|
Total outstanding at December 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
|
2019 Performance-based RSU’s Granted
|
|
Valuation assumptions:
|
|
|
|
Expected dividend yield
|
|
0
|
%
|
Expected equity volatility, including peers
|
|
40.2 % - 73.2%
|
|
Expected term (years)
|
|
1.8 - 2.8
|
|
Risk-free interest rate
|
|
2.2% - 2.3%
|
|
|
|
|
|
|
|
|
|
Affected line item
in the consolidated and combined statements of operations and comprehensive income (loss) |
||||||
|
|
Year Ended December 31,
|
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
|
||||||
Interest rate derivatives, hedging
|
|
$
|
239
|
|
|
$
|
697
|
|
|
$
|
(172
|
)
|
|
Interest expense
|
Foreign currency items(1)
|
|
—
|
|
|
(2,621
|
)
|
|
—
|
|
|
Other income
|
|||
Total reclassifications
|
|
$
|
239
|
|
|
$
|
(1,924
|
)
|
|
$
|
(172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(106,157
|
)
|
|
$
|
59,331
|
|
|
$
|
(36,141
|
)
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Basic weighted-average common shares outstanding(1)
|
|
122,977
|
|
|
109,335
|
|
|
106,321
|
|
|||
Dilutive effect of restricted stock awards
|
|
43
|
|
|
17
|
|
|
36
|
|
|||
Dilutive effect of deferred stock award granted to NEOs
|
|
—
|
|
|
214
|
|
|
—
|
|
|||
Dilutive effect of RSUs granted under stock incentive plans
|
|
81
|
|
|
94
|
|
|
135
|
|
|||
Diluted weighted-average common shares outstanding(2)
|
|
123,101
|
|
|
109,660
|
|
|
106,492
|
|
|||
|
|
|
|
|
|
|
(1)
|
The basic weighted-average common shares outstanding for the year ended December 31, 2017 have been computed to give effect to the Organizational Transactions, including the limited liability company agreement of Keane Investor to, among other things, exchange all of the Company’s Existing Owners’ membership interests for the newly-created ownership interests.
|
(2)
|
As a result of the net loss incurred by the Company for the years ended December 31, 2019 and 2017, the calculation of diluted net loss per share gives no consideration to the potentially anti-dilutive securities shown in the above reconciliation, and as such is the same as basic net loss per share.
|
|
|
December 31, 2018
|
|
|
|
January 1, 2019
|
||||||
Balance sheet line item
|
|
As Previously Reported
|
|
ASU 2016-02 Adoption
|
|
As Adjusted
|
||||||
Operating lease right-of-use assets
|
|
$
|
—
|
|
|
$
|
60,946
|
|
|
$
|
60,946
|
|
Finance lease right-of-use assets
|
|
—
|
|
|
7,864
|
|
|
7,864
|
|
|||
Property and equipment, net
|
|
531,319
|
|
|
(7,864
|
)
|
|
523,455
|
|
|||
Other noncurrent assets
|
|
6,569
|
|
|
(9
|
)
|
|
6,560
|
|
|||
Accrued expenses and other current liabilities
|
|
(101,833
|
)
|
|
1,066
|
|
|
(100,767
|
)
|
|||
Current maturities of operating lease liabilities
|
|
—
|
|
|
(25,211
|
)
|
|
(25,211
|
)
|
|||
Current maturities of finance lease liabilities
|
|
—
|
|
|
(4,928
|
)
|
|
(4,928
|
)
|
|||
Current maturities of capital lease obligations
|
|
(4,928
|
)
|
|
4,928
|
|
|
—
|
|
|||
Long-term operating lease liabilities, less current maturities
|
|
—
|
|
|
(35,512
|
)
|
|
(35,512
|
)
|
|||
Long-term finance lease liabilities, less current maturities
|
|
—
|
|
|
(5,581
|
)
|
|
(5,581
|
)
|
|||
Capital lease obligations, less current maturities
|
|
(5,581
|
)
|
|
5,581
|
|
|
—
|
|
|||
Other noncurrent liabilities
|
|
(3,283
|
)
|
|
50
|
|
|
(3,233
|
)
|
|||
Retained earnings
|
|
31,494
|
|
|
(1,330
|
)
|
|
30,164
|
|
|||
|
|
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||
|
|
Year ended
December 31, 2019
|
||
Operating lease cost
|
|
$
|
26,948
|
|
Finance lease cost:
|
|
|
||
Amortization of right-of-use assets
|
|
3,356
|
|
|
Interest on lease liabilities
|
|
625
|
|
|
Total finance lease cost
|
|
3,981
|
|
|
Short-term lease cost
|
|
1,184
|
|
|
Variable lease cost(1)
|
|
15,654
|
|
|
Sublease income
|
|
(116
|
)
|
|
Total lease cost
|
|
$
|
47,651
|
|
|
Year ended
December 31, 2019
|
Operating leases
|
4.74 years
|
Finance leases
|
2.28 years
|
|
Year ended
December 31, 2019
|
Operating leases
|
5.73%
|
Finance leases
|
5.53%
|
|
(Thousands of Dollars)
|
||||||
Year ending December 31,
|
Operating leases
|
|
Finance leases
|
||||
2020
|
$
|
26,068
|
|
|
$
|
4,977
|
|
2021
|
12,084
|
|
|
3,168
|
|
||
2022
|
10,012
|
|
|
1,643
|
|
||
2023
|
7,088
|
|
|
273
|
|
||
2024
|
2,171
|
|
|
—
|
|
||
Thereafter
|
10,921
|
|
|
—
|
|
||
Total undiscounted remaining minimum lease payments
|
68,344
|
|
|
10,061
|
|
||
Less imputed interest
|
(9,748
|
)
|
|
(623
|
)
|
||
Total discounted remaining minimum lease payments
|
$
|
58,596
|
|
|
$
|
9,438
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||||||
Year ending December 31,
|
Operating leases
|
|
Capital leases
|
||||
2019
|
$
|
26,327
|
|
|
$
|
5,484
|
|
2020
|
18,017
|
|
|
2,652
|
|
||
2021
|
5,688
|
|
|
2,430
|
|
||
2022
|
4,795
|
|
|
883
|
|
||
2023
|
3,172
|
|
|
—
|
|
||
Total
|
$
|
57,999
|
|
|
$
|
11,449
|
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
|
$
|
(106,879
|
)
|
|
$
|
66,260
|
|
|
$
|
(35,904
|
)
|
Foreign
|
|
1,727
|
|
|
(2,659
|
)
|
|
(87
|
)
|
|||
|
|
$
|
(105,152
|
)
|
|
$
|
63,601
|
|
|
$
|
(35,991
|
)
|
|
|
(Thousands of Dollars)
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Deferred tax assets:
|
|
|
|
|
|
|
||||||
Stock-based compensation
|
|
$
|
4,124
|
|
|
$
|
3,979
|
|
|
$
|
2,467
|
|
Net operating loss carry-forwards
|
|
196,949
|
|
|
90,565
|
|
|
70,745
|
|
|||
Accruals and other
|
|
21,411
|
|
|
4,524
|
|
|
3,994
|
|
|||
PPE & Intangibles
|
|
1,474
|
|
|
—
|
|
|
—
|
|
|||
Gross deferred tax assets
|
|
223,958
|
|
|
99,068
|
|
|
77,206
|
|
|||
Valuation allowance
|
|
(223,419
|
)
|
|
(41,779
|
)
|
|
(65,347
|
)
|
|||
Total deferred tax assets
|
|
$
|
539
|
|
|
$
|
57,289
|
|
|
$
|
11,859
|
|
Deferred tax liability:
|
|
|
|
|
|
|
||||||
PP&E and intangibles
|
|
$
|
—
|
|
|
$
|
(56,799
|
)
|
|
$
|
(11,319
|
)
|
Prepaids and other
|
|
(645
|
)
|
|
(756
|
)
|
|
(1,954
|
)
|
|||
Total deferred tax liability
|
|
(645
|
)
|
|
(57,555
|
)
|
|
(13,273
|
)
|
|||
Net deferred tax liability
|
|
$
|
(106
|
)
|
|
$
|
(266
|
)
|
|
$
|
(1,414
|
)
|
|
|
|
|
|
|
|
|
|
(Thousands of Dollars)
|
||
Valuation allowance as of the beginning of January 1, 2019
|
|
$
|
41,779
|
|
Acquisition accounting
|
|
164,950
|
|
|
Charge as (benefit) expense to income tax provision for current activities
|
|
14,987
|
|
|
Changes to other comprehensive income (loss)
|
|
1,703
|
|
|
Valuation allowance as of December 31, 2019
|
|
$
|
223,419
|
|
|
|
|
|
(Thousands of Dollars)
|
||
Year-end December 31,
|
|
||
2020
|
$
|
30,007
|
|
2021
|
14,925
|
|
|
2022
|
9,300
|
|
|
2023
|
1,500
|
|
|
2024
|
—
|
|
|
|
$
|
55,732
|
|
|
|
|
|
|||||||||||
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operations by reportable segment
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Completion Services
|
|
$
|
1,709,934
|
|
|
$
|
2,100,956
|
|
|
$
|
1,527,287
|
|
WC&I
|
|
63,039
|
|
|
36,050
|
|
|
14,794
|
|
|||
Well Support Services
|
|
48,583
|
|
|
—
|
|
|
—
|
|
|||
Total revenue
|
|
$
|
1,821,556
|
|
|
$
|
2,137,006
|
|
|
$
|
1,542,081
|
|
Adjusted gross profit (loss):
|
|
|
|
|
|
|
||||||
Completion Services(1)
|
|
$
|
401,845
|
|
|
$
|
478,850
|
|
|
$
|
258,024
|
|
WC&I(1)
|
|
7,812
|
|
|
(2,390
|
)
|
|
1,496
|
|
|||
Well Support Services(1)
|
|
7,967
|
|
|
—
|
|
|
—
|
|
|||
Total adjusted gross profit
|
|
$
|
417,624
|
|
|
$
|
476,460
|
|
|
$
|
259,520
|
|
Operating income (loss):
|
|
|
|
|
|
|
||||||
Completion Services
|
|
$
|
126,698
|
|
|
$
|
234,756
|
|
|
$
|
115,691
|
|
WC&I
|
|
3,855
|
|
|
(6,818
|
)
|
|
(197
|
)
|
|||
Well Support Services
|
|
6,959
|
|
|
—
|
|
|
—
|
|
|||
Corporate and Other
|
|
(221,261
|
)
|
|
(129,928
|
)
|
|
(106,225
|
)
|
|||
Total operating income (loss)
|
|
$
|
(83,749
|
)
|
|
$
|
98,010
|
|
|
$
|
9,269
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
||||||
Completion Services
|
|
$
|
270,918
|
|
|
$
|
241,169
|
|
|
$
|
141,385
|
|
WC&I
|
|
3,822
|
|
|
4,428
|
|
|
5,757
|
|
|||
Well Support Services
|
|
1,415
|
|
|
—
|
|
|
—
|
|
|||
Corporate and Other
|
|
15,995
|
|
|
13,548
|
|
|
12,138
|
|
|||
Total depreciation and amortization
|
|
$
|
292,150
|
|
|
$
|
259,145
|
|
|
$
|
159,280
|
|
Net income (loss):
|
|
|
|
|
|
|
||||||
Completion Services
|
|
$
|
126,698
|
|
|
$
|
234,756
|
|
|
$
|
115,691
|
|
WC&I
|
|
3,855
|
|
|
(6,818
|
)
|
|
(197
|
)
|
|||
Well Support Services
|
|
6,959
|
|
|
—
|
|
|
—
|
|
|||
Corporate and Other
|
|
(243,669
|
)
|
|
(168,607
|
)
|
|
(151,635
|
)
|
|||
Total net income (loss)
|
|
$
|
(106,157
|
)
|
|
$
|
59,331
|
|
|
$
|
(36,141
|
)
|
Capital expenditures(2):
|
|
|
|
|
|
|
||||||
Completion Services
|
|
$
|
179,044
|
|
|
$
|
281,081
|
|
|
$
|
185,329
|
|
WC&I
|
|
3,514
|
|
|
9,510
|
|
|
1,718
|
|
|||
Well Support Services
|
|
6,980
|
|
|
—
|
|
|
—
|
|
|||
Corporate and Other
|
|
3,649
|
|
|
952
|
|
|
2,582
|
|
|||
Total capital expenditures
|
|
$
|
193,187
|
|
|
$
|
291,543
|
|
|
$
|
189,629
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted gross profit at the segment level is not considered to be a non-GAAP financial measure as it is the Company's segment measure of profitability and is required to be disclosed under GAAP pursuant to ASC 280.
|
(2)
|
Capital expenditures do not include the asset acquisition of RSI on July 24, 2018 of $35.0 million, the business acquisition of RockPile on July 3, 2017 of $116.6 million
|
|
|
(Thousands of Dollars)
|
||||||
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Total assets by segment:
|
|
|
|
|
||||
Completion Services
|
|
$
|
1,091,965
|
|
|
$
|
894,467
|
|
WC&I
|
|
106,493
|
|
|
20,974
|
|
||
Well Support Services
|
|
109,792
|
|
|
—
|
|
||
Corporate and Other
|
|
356,657
|
|
|
139,138
|
|
||
Total assets
|
|
$
|
1,664,907
|
|
|
$
|
1,054,579
|
|
|
|
|
|
|
||||
Goodwill by segment:
|
|
|
|
|
||||
Completion Services
|
|
$
|
136,425
|
|
|
$
|
132,524
|
|
WC&I
|
|
372
|
|
|
—
|
|
||
Well Support Services
|
|
661
|
|
|
—
|
|
||
Corporate and Other
|
|
—
|
|
|
—
|
|
||
Total goodwill
|
|
$
|
137,458
|
|
|
$
|
132,524
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019
|
||||||||||||||
|
|
(Unaudited)
|
||||||||||||||
Selected Financial Data:
|
|
First
Quarter |
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Revenue
|
|
$
|
421,654
|
|
|
$
|
427,733
|
|
|
$
|
443,953
|
|
|
$
|
528,216
|
|
Costs of services (excluding depreciation and amortization, shown separately)
|
|
337,646
|
|
|
324,503
|
|
|
333,438
|
|
|
408,345
|
|
||||
Depreciation and amortization
|
|
71,476
|
|
|
69,886
|
|
|
68,708
|
|
|
82,080
|
|
||||
Selling, general and administrative expenses
|
|
27,936
|
|
|
26,463
|
|
|
26,579
|
|
|
42,698
|
|
||||
Merger and integration
|
|
—
|
|
|
6,108
|
|
|
6,651
|
|
|
55,972
|
|
||||
(Gain) loss on disposal of assets
|
|
481
|
|
|
(330
|
)
|
|
679
|
|
|
3,640
|
|
||||
Impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,346
|
|
||||
Total operating costs and expenses
|
|
437,539
|
|
|
426,630
|
|
|
436,055
|
|
|
605,081
|
|
||||
Operating income (loss)
|
|
(15,885
|
)
|
|
1,103
|
|
|
7,898
|
|
|
(76,865
|
)
|
||||
Other income (expense), net
|
|
448
|
|
|
(43
|
)
|
|
55
|
|
|
(7
|
)
|
||||
Interest expense
|
|
(5,395
|
)
|
|
(5,477
|
)
|
|
(5,215
|
)
|
|
(5,769
|
)
|
||||
Total other expenses
|
|
(4,947
|
)
|
|
(5,520
|
)
|
|
(5,160
|
)
|
|
(5,776
|
)
|
||||
Income tax income (expense)
|
|
(974
|
)
|
|
(564
|
)
|
|
820
|
|
|
(287
|
)
|
||||
Net income (loss)
|
|
$
|
(21,806
|
)
|
|
$
|
(4,981
|
)
|
|
$
|
3,558
|
|
|
$
|
(82,928
|
)
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
|
(Unaudited)
|
||||||||||||||
Selected Financial Data:
|
|
First
Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Revenue
|
|
$
|
513,016
|
|
|
$
|
578,533
|
|
|
$
|
558,908
|
|
|
$
|
486,549
|
|
Costs of services (excluding depreciation and amortization, shown separately)
|
|
403,408
|
|
|
447,685
|
|
|
436,799
|
|
|
372,654
|
|
||||
Depreciation and amortization
|
|
60,051
|
|
|
59,404
|
|
|
68,287
|
|
|
71,403
|
|
||||
Selling, general and administrative expenses
|
|
33,884
|
|
|
23,978
|
|
|
27,482
|
|
|
28,466
|
|
||||
Merger and integration
|
|
—
|
|
|
147
|
|
|
301
|
|
|
—
|
|
||||
(Gain) loss on disposal of assets
|
|
769
|
|
|
3,287
|
|
|
1,113
|
|
|
(122
|
)
|
||||
Total operating costs and expenses
|
|
498,112
|
|
|
534,501
|
|
|
533,982
|
|
|
472,401
|
|
||||
Operating income
|
|
14,904
|
|
|
44,032
|
|
|
24,926
|
|
|
14,148
|
|
||||
Other expense (income), net
|
|
(12,989
|
)
|
|
16
|
|
|
14,454
|
|
|
(2,386
|
)
|
||||
Interest expense
|
|
(6,990
|
)
|
|
(14,317
|
)
|
|
(5,978
|
)
|
|
(6,219
|
)
|
||||
Total other income (expenses)
|
|
(19,979
|
)
|
|
(14,301
|
)
|
|
8,476
|
|
|
(8,605
|
)
|
||||
Income tax income (expense)
|
|
(3,168
|
)
|
|
936
|
|
|
(2,623
|
)
|
|
585
|
|
||||
Net income (loss)
|
|
$
|
(8,243
|
)
|
|
$
|
30,667
|
|
|
$
|
30,779
|
|
|
$
|
6,128
|
|
Nextier Oilfield Solutions Inc.
|
|
Audited Consolidated and Combined Financial Statements
|
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets
|
|
Consolidated and Combined Statements of Operations and Comprehensive Income (Loss)
|
|
Consolidated and Combined Statements of Changes in Stockholders’ Equity
|
|
Consolidated and Combined Statements of Cash Flows
|
|
Notes to Consolidated and Combined Financial Statements
|
|
|
|
Exhibit
Number |
|
Exhibit Description
|
|
Agreement and Plan of Merger, dated as of June 16, 2019, by and among C&J Energy Services, Inc., Keane Group, Inc. and King Merger Sub Corp. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on June 17, 2019).
|
|
|
Certificate of Incorporation of Keane Group, Inc. dated October 13, 2016 (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 filed on December 14, 2016).
|
|
|
Certificate of Amendment to Certificate of Incorporation of Keane Group, Inc. dated October 31, 2019 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on October 31, 2019).
|
|
|
Bylaws (incorporated by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K filed on March 21, 2017).
|
|
|
Second Amended and Restated Stockholders' Agreement, dated October 31, 2019, by and among Keane Group, Inc. and Keane Investor Holdings LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 31, 2019).
|
|
4.2*
|
|
Description of Registrants Securities.
|
|
Second Amended and Restated Asset-Based Revolving Credit Agreement, dated October 31, 2019, by and among NexTier Oilfield Solutions Inc. (f/k/a Keane Group, Inc.), Keane Group Holdings, LLC, as the Lead Borrower, certain other subsidiaries of NexTier Oilfield Solutions Inc. as additional borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as administrative and collateral agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on October 31, 2019).
|
|
|
Term Loan Agreement, dated May 25, 2018, by and among Keane Group Inc., as the Parent, Keane Group Holdings, LLC, as the Lead Borrower, the Subsidiary Guarantors party thereto, Barclays Bank PLC, as Administrative Agent and Collateral Agent, and the Lenders from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 29, 2018).
|
|
10.3†
|
|
Keane Management Holdings LLC Management Incentive Plan (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1 filed on December 14, 2016).
|
10.4*
|
|
NexTier Oilfield Solutions Inc. Equity and Incentive Award Plan, amended and restated on October 31, 2019.
|
10.5†
|
|
Form of Keane Group, Inc. Executive Incentive Bonus Plan (incorporated by referent to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 filed on December 14, 2016).
|
10.6†
|
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.9 of the Registrant’s Registration Statement on Form S-1 filed with the SEC on December 14, 2016).
|
10.7†
|
|
Form of Director Services Agreement (incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1filed on December 14, 2016).
|
10.8†
|
|
Keane Group, Inc. Form of Restricted Stock Award (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on January 26, 2017).
|
10.9†
|
|
Keane Group, Inc. Form of Deferred Stock Award Agreement (incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K filed on March 21, 2017).
|
|
Form of Keane Group, Inc. Equity and Incentive Award Plan Amendment to Deferred Stock Award Agreement(incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
|
Form of RSU Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 3, 2017).
|
|
|
Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on August 3, 2017).
|
|
|
Keane Group, Inc. Form of Restricted Stock Award Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on August 1, 2018).
|
|
|
Keane Group, Inc. Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on August 1, 2018).
|
|
|
Keane Group, Inc. Form of Restricted Stock Unit Performance Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10Q filed on May 7, 2019).
|
|
|
Keane Group, Inc. Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed on August 1, 2018).
|
|
|
Form of Amendment to Keane Group, Inc. Restricted Unit Award Agreements with each of James Stewart, Greg Powell, Paul DeBonis and Kevin McDonald (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q filed on August 1, 2018).
|
|
|
Form of Amendment to Keane Group, Inc. Non-Qualified Stock Option Award Agreements with each of James Stewart, Greg Powell, Paul DeBonis and Kevin McDonald (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed on August 1, 2018).
|
|
|
NexTier Oilfield Solutions Inc. (Former C&J Energy) Management Incentive Plan, dated Effective October 31, 2019 (incorporated by reference to Exhibit 4.4 to the Registrant’s Registration Statement on Form S-8 filed with the SEC on November 1, 2019).
|
|
|
C&J Energy Services, Inc. 2017 Management Incentive Plan. (incorporated by reference to Exhibit 10.1 to C&J Energy Services Inc.’s Current Report on Form 8-K filed on January 13, 2017).
|
|
|
First Amendment to the C&J Energy Services, Inc. 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.1 to C&J Energy Services Inc.’s Current Report on Form 8-K filed on February 6, 2017).
|
|
10.22†*
|
|
Second Amendment to the C&J Energy Services, Inc. 2017 Management Incentive Plan.
|
|
Restricted Share Agreement (C&J Executive Employment Agreements) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.2 to C&J Energy Services Inc.’s Current Report on Form 8-K filed on February 6, 2017).
|
|
|
Restricted Share Agreement (Restrictive Covenants) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.3 to C&J Energy Services Inc.’s Current Report on Form 8-K filed on February 6, 2017).
|
|
|
Restricted Share Agreement (Non-Employee Directors) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.4 to C&J Energy Services Inc.’s Current Report on Form 8-K filed on February 6, 2017).
|
|
|
Nonqualified Stock Option Agreement (C&J Executive Employment Agreements) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.5 to C&J Energy Services Inc.’s Current Report on Form 8-K filed on February 6, 2017).
|
|
|
Nonqualified Stock Option Agreement (Restrictive Covenants) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.6 to C&J Energy Services Inc.’s Current Report on Form 8-K filed on February 6, 2017).
|
|
|
Performance Share Agreement under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.10 to C&J Energy Services Inc.’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
|
Performance Share Agreement (C&J Employment Agreement - Tier I) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.11 to C&J Energy Services Inc.’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
Performance Share Agreement (C&J Employment Agreement - Tier II) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.12 to C&J Energy Services Inc.’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
|
Restricted Share Unit Agreement (C&J Employment Agreement - Tier I) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.13 to C&J Energy Services Inc.’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
|
Restricted Share Unit Agreement (C&J Employment Agreement - Tier II) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.14 to C&J Energy Services Inc.’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
|
Cash Retention Award Agreement (C&J Employment Agreement - Tier I) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.15 to C&J Energy Services Inc.’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
|
Cash Retention Award Agreement (C&J Employment Agreement - Tier II) under the 2017 Management Incentive Plan (incorporated by reference to Exhibit 10.16 to C&J Energy Services Inc.’s Annual Report on Form 10-K filed on February 27, 2019).
|
|
10.35†*
|
|
Form of RSU Award Agreement 2020 (Executive).
|
10.36†*
|
|
Form of PSU Agreement 2020.
|
|
Amended and Restated Employment Agreement, dated July 12, 2019, by and between Keane Group, Inc. and Robert Drummond (incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-4 filed with the SEC on July 16, 2019).
|
|
|
Third Amended and Restated Employment Agreement, dated June 16, 2019, by and between Keane Group, Inc. and Greg Powell (incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-4 filed with the SEC on July 16, 2019).
|
|
|
Amended and Restated Employment Agreement, dated July 12, 2019, by and between Keane Group, Inc. and Kevin M. McDonald (incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-4 filed with the SEC on July 16, 2019).
|
|
10.40†*
|
|
Amended and Restated Employment Agreement, dated as of November 1, 2019, by and between NexTier Oilfield Solutions Inc. and Ian J. Henkes.
|
|
First Amended and Restated Employment Agreement, dated December 16, 2019, by and between NexTier Oilfield Solutions Inc. and Kenny Pucheu (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the SEC on December 16, 2019).
|
|
|
Employment Agreement, effective as of December 11, 2018, by and between C&J Spec-Rent Services, Inc. and William Driver (incorporated by reference to Exhibit 10.25 of C&J Energy Services, Inc.’s Annual Report on Form 10-K filed with the SEC on February 27, 2019).
|
|
|
Amended and Restated Employment Agreement, effective as of December 11, 2018, by and between C&J Spec-Rent Services, Inc. and Sterling Renshaw (incorporated by reference to Exhibit 10.19 of C&J Energy Services, Inc.’s Annual Report on Form 10-K filed with the SEC on February 27, 2019).
|
|
|
Amended and Restated Employment Agreement, effective as of December 11, 2018, by and between C&J Spec-Rent Services, Inc. and Michael Galvan (incorporated by reference to Exhibit 10.18 of C&J Energy Services, Inc.’s Annual Report on Form 10-K filed with the SEC on February 27, 2019).
|
|
|
Employment Agreement, dated September 17, 2018, by and between C&J Spec-Rent Services, Inc. and Jan Kees van Gaalen (incorporated by reference to Exhibit 10.1 to the C&J Energy Services, Inc.’s Current Report on Form 8-K/A filed on September 18, 2018).
|
|
|
Form of Second Amended and Restated Employment Agreement by and among KGH Intermediate Holdco II, LLC, Keane Group, Inc. and M. Paul DeBonis Jr. (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed on December 14, 2016).
|
|
|
Form of Third Amended and Restated Employment Agreement by and among KGH Intermediate Holdco II, LLC, Keane Group, Inc. and James C. Stewart (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1 filed on December 14, 2016).
|
|
10.48†*
|
|
Separation Agreement for James Stewart.
|
21.1*
|
|
Schedule of Subsidiaries of NexTier Completion Solutions Inc.
|
23.1*
|
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm
|
31.1*
|
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2*
|
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1*
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Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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NexTier Oilfield Solutions Inc.
(Registrant)
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By:
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/s/ Robert W. Drummond
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Robert W. Drummond
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Chief Executive Officer and Director
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(Principal Executive Officer)
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Signature
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Title
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Date
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/s/ Robert W. Drummond
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Chief Executive Officer and Director
(Principal Executive Officer)
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March 12, 2020
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Robert W. Drummond
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/s/ Kenneth Pucheu
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Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
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March 12, 2020
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Kenneth Pucheu
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/s/ Michael Galvan
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Chief Accounting Officer and Treasurer
(Principal Accounting Officer)
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March 12, 2020
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Michael Galvan
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/s/ James C. Stewart
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Director
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March 12, 2020
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James C. Stewart
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/s/ Stuart Brightman
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Director
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March 12, 2020
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Stuart Brightman
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/s/ Marc G. R. Edwards
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Director
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March 12, 2020
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Marc G. R. Edwards
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/s/ Gary M. Halverson
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Director
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March 12, 2020
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Gary M. Halverson
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/s/ John Kennedy
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Director
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March 12, 2020
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John Kennedy
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/s/ Steven Mueller
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Director
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March 12, 2020
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Steven Mueller
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/s/ Patrick Murray
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Director
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March 12, 2020
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Patrick Murray
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/s/ Amy H. Nelson
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Director
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March 12, 2020
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Amy H. Nelson
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/s/ Mel Riggs
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Director
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March 12, 2020
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Mel Riggs
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/s/ Michael Roemer
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Director
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March 12, 2020
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Michael Roemer
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/s/ Scott Wille
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Director
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March 12, 2020
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Scott Wille
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DOC ID - 32813717.3
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1.
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Following closing of the Transaction, all references to the following terms in the Plan or the Award Agreements shall have the following meanings: the "Company" or "C&J Energy Services, Inc." shall mean Keane Group, Inc.; the "Board" shall mean the board of directors of Keane; and the "Committee" shall mean the compensation committee of the board of directors of Keane.
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2.
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All Outstanding Awards that are assumed by Keane and converted pursuant to Section 2.3 of the Merger Agreement shall fully vest upon a termination of the applicable Participant's employment without Cause or for Good Reason (as such terms are defined below) (a "Qualifying Termination") on or within twelve (12) months following Closing (as defined in the Merger Agreement) (the "Protection Period"). For the avoidance of doubt, to the extent an Award Agreement or employment agreement entered into between a Participant and the Company provides for such acceleration benefits upon a Qualifying Termination or other Termination event, whether or not such occurs outside of the Protection Period, such acceleration benefits will continue to apply.
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3.
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As used in this Amendment, the following terms shall have the meanings set forth below:
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4.
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The Board and Committee previously determined to allow holders of Outstanding Awards that are equity based ("Outstanding Equity Awards") to satisfy tax obligations incurred as a result of the vesting of such Outstanding Equity Awards through any of the following methods (as chosen by the applicable holder of the Outstanding Equity Award, unless and until the Board or the Committee of the Board takes affirmative action to provide otherwise): (x) making a cash payment to the Company, (y) through the surrender or net withholding of a portion of the shares that have become vested, or a portion of the shares (or the corresponding amount of cash) to be delivered upon settlement of vested Awards (as applicable) ("Net Settlement"), or (z) surrendering shares of common stock owned by the applicable
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5.
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This Amendment only amends and modifies the Plan to the extent specifically provided herein. All terms, conditions, provisions and references of the Plan that are not specifically modified remain in full force and effect.
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Name:
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Robert W. Drummond
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1.
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General.
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2.
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Time Measure.
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3.
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Performance Criteria.
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Level
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Relative TSR Performance Rank
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Payout Percentage
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Maximum
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80th percentile
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200% of Target Number
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Target
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50th percentile
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100% of Target Number
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Threshold
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20th percentile
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50% of Target Number
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Below 20th percentile
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0%
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4.
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Accelerated Vesting.
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5.
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Award Settlement.
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6.
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Definitions
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1.
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General.
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2.
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Time Measure.
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3.
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Performance Criteria.
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Level
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Relative TSR Performance Rank
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Payout Percentage
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Maximum
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80th percentile
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200% of Target Number
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Target
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50th percentile
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100% of Target Number
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Threshold
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20th percentile
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50% of Target Number
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Below 20th percentile
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0%
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4.
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Accelerated Vesting.
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5.
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Award Settlement.
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EXECUTIVE:
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/s/ Ian Henkes
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Name: Ian J. Henkes
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THE COMPANY:
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NexTier Oilfield Solutions Inc.
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By:
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/s/ Kevin McDonald
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Name:
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Kevin McDonald
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Title:
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Executive Vice President, Chief Administrative Officer & General Counsel
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By:
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/s/Kevin McDonald
Name: Kevin M. McDonald Title: Executive Vice President, Chief Administrative Officer & General Counsel |
DOC ID - 32813580.10
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1
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Date: March 12, 2020
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By:
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/s/ Robert W. Drummond
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Robert W. Drummond
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President, Chief Executive Officer and Director
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(Principal Executive Officer)
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Date: March 12, 2020
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By:
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/s/ Kenneth Pucheu
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Kenneth Pucheu
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Senior Vice President and Chief Financial Officer
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(Principal Financial Officer)
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Date: March 12, 2020
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By:
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/s/ Robert W. Drummond
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Robert W. Drummond
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President, Chief Executive Officer and Director
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(Principal Executive Officer)
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Date: March 12, 2020
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By:
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/s/ Kenneth Pucheu
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Kenneth Pucheu
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Senior Vice President and Chief Financial Officer
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(Principal Financial Officer)
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