UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR THE QUARTERLY PERIOD ENDED~~For the quarterly period ended MARCH 31, ~~2018~~2019

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR THE TRANSITION PERIOD~~ For the transition period from ~~FROM~~ TOto .

~~COMMISSION FILE NUMBER~~Commission File Number 1-13455

TETRA Technologies, Inc.

(Exact name of registrant as specified in its charter)



Delaware	74-2148293
(State or Other Jurisdiction of ~~incorporation)~~Incorporation or Organization)	(I.R.S. Employer Identification No.)

24955 Interstate 45 North
The Woodlands, Texas	77380
(Address of ~~principal executive offices)~~Principal Executive Offices)	(~~zip code)~~Zip Code)

(281) 367-1983

(Registrant’s ~~telephone number, including area code)~~Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes [ X ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. ~~(Check One):~~



Large accelerated filer [ ]	Accelerated filer [ X ]
Non-accelerated filer [ ] ~~(Do not check if a smaller reporting company)~~	Smaller reporting company [ ]
Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	TTI	New York Stock Exchange

As of May ~~9, 2018,~~8, 2019, there were ~~125,569,741~~125,609,276 shares outstanding of the Company’s Common Stock, $0.01 par value per share.

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Revenues:
Product sales	$	75,953		$	67,978		$	91,781		$	75,953
Services	123,428			91,431			151,947			123,428
Total revenues	199,381			159,409			243,728			199,381
Cost of revenues:
Cost of product sales	60,214			49,582			74,588			60,214
Cost of services	84,743			63,649			102,156			84,743
Depreciation, amortization, and accretion	26,441			26,524			30,628			26,441
Impairments and other charges							146			—
Total cost of revenues	171,398			139,755			207,518			171,398
Gross profit	27,983			19,654			36,210			27,983
General and administrative expense	30,803			26,751			34,277			30,803
Interest expense, net	14,973			13,767			18,379			14,973
Warrants fair value adjustment	(1,994		)	(5,976		)
CCLP Series A Preferred Units fair value adjustment	1,358			1,631
Litigation arbitration award income	—			(12,816		)
Other expense, net	2,776			461
Warrants fair value adjustment (income) expense							407			(1,994		)
CCLP Series A Preferred Units fair value adjustment (income) expense							1,163			1,358
Other (income) expense, net							(951		)	2,776
Loss before taxes and discontinued operations	(19,933		)	(4,164		)	(17,065		)	(19,933		)
Provision for income taxes	1,124			81			1,609			1,124
Loss before discontinued operations	(21,057		)	(4,245		)	(18,674		)	(21,057		)
Discontinued operations:
Loss from discontinued operations (including 2018 loss on disposal of $31.5 million), net of taxes	(41,706		)	(7,007		)	(426		)	(41,706		)
Net loss	(62,763		)	(11,252		)	(19,100		)	(62,763		)
Loss attributable to noncontrolling interest	9,115			8,789
Loss attributable to TETRA stockholders	$	(53,648	)	$	(2,463	)
Basic net income (loss) per common share:
Income (loss) before discontinued operations attributable to TETRA stockholders	$	(0.10	)	$	0.04
Less: loss attributable to noncontrolling interest							8,262			9,115
Net loss attributable to TETRA stockholders							$	(10,838	)	$	(53,648	)
Basic net loss per common share:
Loss before discontinued operations attributable to TETRA stockholders							$	(0.09	)	$	(0.10	)
Loss from discontinued operations attributable to TETRA stockholders	$	(0.36	)	$	(0.06	)	$	0.00		$	(0.36	)
Net loss attributable to TETRA stockholders	$	(0.46	)	$	(0.02	)	$	(0.09	)	$	(0.46	)
Average shares outstanding	117,598			114,197			125,681			117,598
Diluted net income (loss) per common share:
Income (loss) before discontinued operations attributable to TETRA stockholders	$	(0.10	)	$	0.04
Diluted net loss per common share:
Loss before discontinued operations attributable to TETRA stockholders							$	(0.09	)	$	(0.10	)
Loss from discontinued operations attributable to TETRA stockholders	$	(0.36	)	$	(0.06	)	$	0.00		$	(0.36	)
Net loss attributable to TETRA stockholders	$	(0.46	)	$	(0.02	)	$	(0.09	)	$	(0.46	)
Average diluted shares outstanding	117,598			114,304			125,681			117,598

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(In Thousands)

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Net loss	$	(62,763	)	$	(11,252	)	$	(19,100	)	$	(62,763	)
Foreign currency translation adjustment	1,283			2,193
Foreign currency translation adjustment, net of taxes of $0 in 2019 and 2018							(406		)	1,283
Comprehensive loss	(61,480		)	(9,059		)	(19,506		)	(61,480		)
Comprehensive loss attributable to noncontrolling interest	9,500			8,648
Less: Comprehensive loss attributable to noncontrolling interest							8,086			9,500
Comprehensive loss attributable to TETRA stockholders	$	(51,980	)	$	(411	)	$	(11,420	)	$	(51,980	)

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands)


	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	104,113		$	26,128		$	36,868		$	40,038
Restricted cash	8,978			261			65			64
Trade accounts receivable, net of allowances of $1,073 in 2018 and $1,286 in 2017	175,262			144,051
Trade accounts receivable, net of allowances of $1,651 in 2019 and $2,583 in 2018							183,646			187,592
Inventories	127,925			115,438			156,628			143,571
Assets of discontinued operations	7,907			121,134			1,422			1,354
Notes receivable							7,586			7,544
Prepaid expenses and other current assets	22,618			17,597			24,078			20,528
Total current assets	446,803			424,609			410,293			400,691
Property, plant, and equipment:
Land and building	78,940			78,559			78,183			78,746
Machinery and equipment	1,195,458			1,167,680			1,286,832			1,265,732
Automobiles and trucks	36,392			34,744			35,519			35,568
Chemical plants	189,173			186,790			189,522			188,641
Construction in progress	37,930			31,566			49,540			44,419
Total property, plant, and equipment	1,537,893			1,499,339			1,639,596			1,613,106
Less accumulated depreciation	(713,125		)	(689,907		)	(778,647		)	(759,175		)
Net property, plant, and equipment	824,768			809,432			860,949			853,931
Other assets:
Goodwill	21,856			6,636			25,859			25,859
Patents, trademarks and other intangible assets, net of accumulated amortization of $72,946 in 2018 and $71,114 in 2017	88,134			47,405
Patents, trademarks and other intangible assets, net of accumulated amortization of $82,634 in 2019 and $80,401 in 2018							80,293			82,184
Deferred tax assets, net	10			10			13			13
Notes receivable	7,462			44
Operating lease right-of-use assets							60,149			—
Other assets	19,229			20,478			21,969			22,849
Total other assets	136,691			74,573			188,283			130,905
Total assets	$	1,408,262		$	1,308,614		$	1,459,525		$	1,385,527

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share Amounts)


	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
	(Unaudited)						(Unaudited)
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable	$	60,135		$	70,847		$	88,223		$	80,279
Unearned income	38,168			18,701			50,379			26,695
Accrued liabilities	45,171			58,478
Accrued liabilities and other							77,107			89,232
Liabilities of discontinued operations	14,287			71,874			3,529			4,145
Total current liabilities	157,761			219,900			219,238			200,351
Long-term debt, net	823,565			629,855			845,843			815,560
Deferred income taxes	4,040			4,404			3,456			3,242
Asset retirement obligations, net of current portion	11,929			11,738
Asset retirement obligations							12,331			12,202
CCLP Series A Preferred Units	54,214			61,436			18,278			27,019
Warrants liability	11,207			13,202			2,480			2,073
Operating lease liabilities							49,632			—
Other liabilities	20,085			15,518			8,157			12,331
Total long-term liabilities	925,040			736,153			940,177			872,427
Commitments and contingencies
Equity:
TETRA stockholders' equity:
Common stock, par value $0.01 per share; 250,000,000 shares authorized at March 31, 2018 and December 31, 2017; 128,212,198 shares issued at March 31, 2018 and 118,515,797 shares issued at December 31, 2017	1,282			1,185
Common stock, par value $0.01 per share; 250,000,000 shares authorized at March 31, 2019 and December 31, 2018; 128,412,688 shares issued at March 31, 2019 and 128,455,134 shares issued at December 31, 2018							1,284			1,285
Additional paid-in capital	455,046			425,648			462,241			460,680
Treasury stock, at cost; 2,683,245 shares held at March 31, 2018, and 2,638,093 shares held at December 31, 2017	(18,821		)	(18,651		)
Treasury stock, at cost; 2,785,981 shares held at March 31, 2019, and 2,717,569 shares held at December 31, 2018							(19,105		)	(18,950		)
Accumulated other comprehensive income (loss)	(42,099		)	(43,767		)	(52,245		)	(51,663		)
Retained earnings (deficit)	(209,983		)	(156,335		)
Retained deficit							(225,947		)	(217,952		)
Total TETRA stockholders' equity	185,425			208,080			166,228			173,400
Noncontrolling interests	140,036			144,481			133,882			139,349
Total equity	325,461			352,561			300,110			312,749
Total liabilities and equity	$	1,408,262		$	1,308,614		$	1,459,525		$	1,385,527

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Equity

(In Thousands)



	Common Stock Par Value			Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Noncontrolling Interest			Total Equity
	Common Stock Par Value			Additional Paid-In Capital			Treasury Stock			Currency Translation			Retained Earnings			Noncontrolling Interest			Total Equity

Balance at December 31, 2018	$	1,285		$	460,680		$	(18,950	)	$	(51,663	)	$	(217,952	)	$	139,349		$	312,749
Net loss for first quarter 2019	—			—			—			—			(10,838		)	(8,262		)	(19,100		)
Translation adjustment, net of taxes of $0	—			—			—			(582		)	—			176			(406		)
Comprehensive loss	—			—			—			—			—			—			(19,506		)
Distributions to public unitholders	—			—			—			—			—			(307		)	(307		)
Equity award activity	(1		)	—			—			—			—			—			(1		)
Treasury stock activity, net	—			—			(155		)	—			—			—			(155		)
Equity compensation expense	—			1,628			—			—			—			311			1,939
Conversions of CCLP Series A Preferred	—			—			—			—			—			2,539			2,539
Cumulative effect adjustment	—			—			—			—			2,843			—			2,843
Other	—			(67		)	—			—			—			76			9
Balance at March 31, 2019	$	1,284		$	462,241		$	(19,105	)	$	(52,245	)	$	(225,947	)	$	133,882		$	300,110



	Common Stock Par Value		Additional Paid-In Capital			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Noncontrolling Interest			Total Equity
	Common Stock Par Value		Additional Paid-In Capital			Treasury Stock			Currency Translation			Retained Earnings			Noncontrolling Interest			Total Equity

Balance at December 31, 2017	$	1,185	$	425,648		$	(18,651	)	$	(43,767	)	$	(156,335	)	$	144,481		$	352,561
Net loss for first quarter 2018	—		—			—			—			(53,648		)	(9,115		)	(62,763		)
Translation adjustment, net of taxes of $0	—		—			—			1,668			—			(385		)	1,283
Comprehensive loss	—		—			—			—			—			—			(61,480		)
Distributions to public unitholders	—		—			—			—			—			(4,358		)	(4,358		)
Equity award activity	20		—			—			—			—			—			20
Treasury stock activity, net	—		—			(170		)	—			—			—			(170		)
Issuance of common stock for business combination	77		28,135			—			—			—			—			28,212
Equity compensation expense	—		1,434			—			—			—			(655		)	779
Conversions of CCLP Series A Preferred	—		—			—			—			—			10,103			10,103
Other	—		(171		)	—			—			—			(35		)	(206		)
Balance at March 31, 2018	$	1,282	$	455,046		$	(18,821	)	$	(42,099	)	$	(209,983	)	$	140,036		$	325,461

TETRA Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Operating activities:
Net loss	$	(62,763	)	$	(11,252	)	$	(19,100	)	$	(62,763	)
Reconciliation of net loss to cash provided by operating activities:
Reconciliation of net loss to cash provided by (used in) operating activities:
Depreciation, amortization, and accretion	28,509			29,478			30,627			28,509
Provision (benefit) for deferred income taxes	(61		)	(6		)
Impairment and other charges							146			—
Benefit for deferred income taxes							229			(61		)
Equity-based compensation expense	876			2,469			2,165			876
Provision for doubtful accounts	453			772			627			453
Non-cash loss on disposition of business	32,369			—			—			32,369
Amortization of deferred financing costs	1,224			1,091			953			1,224
CCLP Series A Preferred offering costs	—			37
CCLP Series A Preferred redemption premium							397			—
CCLP Series A Preferred accrued paid in kind distributions	1,523			1,955			599			1,523
CCLP Series A Preferred fair value adjustment	1,358			1,631			1,163			1,358
Warrants fair value adjustment	(1,995		)	(5,976		)	407			(1,994		)
Contingent consideration liability fair value adjustment							(400		)	—
Expense for unamortized finance costs and other non-cash charges and credits	3,668			(532		)	339			3,668
Gain on sale of assets	90			(83		)	(201		)	90
Changes in operating assets and liabilities:
Accounts receivable	6,584			(10,909		)	2,353			6,584
Inventories	(13,467		)	(10,627		)	(15,809		)	(13,467		)
Prepaid expenses and other current assets	(4,311		)	(527		)	(3,222		)	(4,311		)
Trade accounts payable and accrued expenses	(24,586		)	(16,919		)	6,638			(24,586		)
Decommissioning liabilities	—			(474		)
Other	(732		)	(666		)	(499		)	(733		)
Net cash used in operating activities	(31,261		)	(20,538		)
Net cash provided by (used in) operating activities							7,412			(31,261		)
Investing activities:
Purchases of property, plant, and equipment, net	(28,892		)	(5,060		)	(32,409		)	(28,892		)
Acquisition of businesses, net of cash acquired	(42,002		)	—			—			(42,002		)
Proceeds from disposal of business	3,121			—			—			3,121
Proceeds on sale of property, plant, and equipment	76			248			364			76
Other investing activities	146			196			319			146
Net cash used in investing activities	(67,551		)	(4,616		)	(31,726		)	(67,551		)
Financing activities:
Proceeds from long-term debt	474,550			74,550			66,000			474,550
Principal payments on long-term debt	(278,150		)	(59,150		)	(35,451		)	(278,150		)
CCLP distributions	(4,358		)	(7,248		)	(307		)	(4,358		)
Redemptions of CCLP Series A Preferred							(8,346		)	—
Tax remittances on equity based compensation	(293		)	—			(429		)	(293		)
Debt issuance costs and other financing activities	(6,139		)	(119		)
Debt issuance costs							(155		)	(6,139		)
Net cash provided by financing activities	185,610			8,033			21,312			185,610
Effect of exchange rate changes on cash	(96		)	112			(167		)	(96		)
Increase (decrease) in cash and cash equivalents	86,702			(17,009		)	(3,169		)	86,702
Cash and cash equivalents and restricted cash at beginning of period	26,389			36,531			40,102			26,389
Cash and cash equivalents and restricted cash at end of period	$	113,091		$	19,522		$	36,933		$	113,091


Supplemental cash flow information:
Interest paid	$	17,710		$	14,395		$	15,544		$	17,710
Income taxes paid	1,331			1,929			1,644			1,331

See Notes to Consolidated Financial Statements

TETRA Technologies, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

NOTE A – ORGANIZATION, BASIS OF PRESENTATION, AND SIGNIFICANT ACCOUNTING POLICIES

Organization

We are a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, water management, frac flowback, production well testing and offshore rig cooling services, and compression services and equipment. We were incorporated in Delaware in 1981. ~~Following the acquisition and disposition transactions that closed during the three month period ended March 31, 2018, we reorganized our reporting segments and~~We are ~~now~~ composed of three divisions – Completion Fluids & Products, Water & Flowback Services, and Compression. Unless the context requires otherwise, when we refer to “we,” “us,” and “our,” we are describing TETRA Technologies, Inc. and its consolidated subsidiaries on a consolidated basis.

Presentation

Our unaudited consolidated financial statements include the accounts of our wholly owned subsidiaries. All intercompany ~~accounts~~balances and transactions have been eliminated in consolidation. The information furnished reflects all normal recurring adjustments, which are, in the opinion of management, necessary to provide a fair statement of the results for the interim periods. Operating results for the period ended March 31, ~~2018~~2019 are not necessarily indicative of results that may be expected for the twelve months ended December 31, ~~2018.~~2019.

We consolidate the financial statements of CSI Compressco LP and its subsidiaries ("CCLP") as part of our Compression Division, as we determined that CCLP is a variable interest entity and we are the primary beneficiary. We control the financial interests of CCLP and have the ability to direct the activities of CCLP that most significantly impact its economic performance through our ownership of its general partner. The share of CCLP net assets and earnings that is not owned by us is presented as noncontrolling interest in our consolidated financial statements. Our cash flows from our investment in CCLP are limited to the quarterly distributions we receive on our CCLP common units and general partner interest (including incentive distribution rights) and the amounts collected for services we perform on behalf of CCLP, as TETRA's capital structure and CCLP's capital structure are separate, and do not include cross default provisions, cross collateralization provisions, or cross guarantees.

The accompanying unaudited consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the U.S. Securities and Exchange Commission ("SEC") and do not include all information and footnotes required by U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements. These financial statements should be read in ~~connection~~conjunction with the financial statements for the year ended December 31, ~~2017,~~2018 and notes thereto included in our Annual Report on Form 10-K, whichwe filed with the SEC on March ~~5, 2018.~~4, 2019.

We have reviewed our financial forecasts as of May 10, 2018 for the subsequent twelve month period, which consider the impact of the current distribution levels from CCLP. Based on our financial forecasts, which reflect certain operating and other business assumptions that we believe to be reasonable as of May 10, 2018, we believe that we will have adequate liquidity, earnings, and operating cash flows to fund our operations and debt obligations and maintain compliance with our debt covenants through May 10, 2019.Significant Accounting Policies

~~In March 2018, CCLP closed an offering~~We have added policies for the recording of ~~CCLP senior secured notes~~leases in conjunction with the ~~aggregate amount of $350.0 million, and a portion~~adoption of the ~~proceeds were used to repay~~new lease standard discussed in our "Leases" and ~~terminate CCLP's bank revolving credit facility (as amended,~~"New Accounting Pronouncements" sections below. Other than the ~~"CCLP Credit Agreement"). (See Note D - Long-Term Debt and Other Borrowings.) Based on its financial forecasts that reflect~~additional lease policies described herein, there have been no significant changes in our accounting policies or the ~~current level~~application of distributions and certain operating and other business assumptions that CCLP believes to be reasonable as of May 10, 2018, CCLP believes that it will have adequate liquidity, earnings, and operating cash flows to fund its operations and debt obligations and maintain compliance with its debt covenants through May 10, 2019.these policies.

Use of Estimates

The preparation of financial statements in conformity with U.S. ~~generally accepted accounting principles ("GAAP")~~GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses, and impairments during the reporting period. Actual results could differ from those estimates, and such differences could be material.

Leases

~~Reclassifications~~As a lessee, unless the lease meets the criteria of short-term and is excluded per our policy election described below, we initially recognize a lease liability and related right-of-use asset on the commencement date.

~~Certain previously reported financial information has been reclassified~~The right-of-use asset represents our right to ~~conform~~use an underlying asset and the lease liability represents our obligation to make lease payments to the ~~current period’s presentation. For a discussion of~~lessor over the ~~reclassification of the financial presentation of our Offshore Division as discontinued operations, see Note C - Discontinued Operations.~~lease term.

~~Cash Equivalents~~

~~We consider all highly liquid cash investments with a maturity of three months or less when purchased to be cash equivalents.~~

~~Restricted Cash~~

~~Restricted cash is classified as a current asset when it is expected to be repaid or settled~~Long-term operating leases are included in ~~the next twelve month period. Restricted cash~~operating lease right-of-use assets, accrued liabilities and other, and operating lease liabilities in our consolidated balance sheet as of March 31, ~~2018 consists~~2019. Long-term finance leases are included in property, plant and equipment, accrued liabilities and other, and other liabilities in our consolidated balance sheet as of ~~cash~~March 31, 2019. We determine whether a contract is or contains a lease at inception of the contract. Where we are a lessee in a contract that includes an option to extend or terminate the lease, we include the extension period or exclude the period covered by the termination option in our lease term, if it is reasonably certain that we would exercise the option.

As an accounting policy election, we do not include short-term leases on our balance sheet. Short-term leases include leases with a term of 12 months or less, inclusive of renewal options we are reasonably certain to exercise. The lease payments for short-term leases are included as operating lease costs on a straight-line basis over the lease term in cost of revenues or general and administrative expense based on the use of the underlying asset. We recognize lease costs for variable lease payments not included in the determination of a lease liability in the period in which an obligation is incurred.

As allowed by U.S. GAAP, we do not separate nonlease components from the associated lease component for our compression services contracts and instead account for those components as a single component based on the accounting treatment of the predominant component. In our evaluation of whether Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 842 "Leases" or ASC 606 "Revenue from Contracts with Customers" is applicable to the combined component based on the predominant component, we determined the services nonlease component is predominant, resulting in the ongoing recognition of our compression services contracts following ASC 606.

Our operating and finance leases are recognized at the present value of lease payments over the lease term. When the implicit discount rate is not readily determinable, we use our incremental borrowing rate to calculate the discount rate used to ~~secure outstanding letters~~determine the present value of ~~credit~~lease payments. Consistent with other long-lived assets or asset groups that are held and used, we test for impairment of our ~~Compression Division.~~

~~Inventories~~

~~Inventories~~right-of-use assets when impairment indicators are ~~stated at the lower of cost or net realizable value. Except for work in progress inventory discussed below, cost is determined using the weighted average method. Components of inventories as of~~ ~~March 31, 2018~~ ~~and~~ ~~December 31, 2017~~ ~~are as follows:~~

March 31, 2018 December 31, 2017
(In Thousands)
Finished goods $ 67,283
$ 66,377
Raw materials 3,692
4,027
Parts and supplies 36,584
33,632
Work in progress 20,366
11,402
Total inventories $ 127,925
$ 115,438

Finished goods inventories include newly manufactured clear brine fluids as well as used brines that are repurchased from certain customers for recycling. Recycled brines are recorded at cost, using the weighted average method. Work in progress inventory consists primarily of new compressor packages located in the CCLP fabrication facility in Midland, Texas. The cost of work in progress is determined using the specific identification method. We write down the value of inventory by an amount equal to the difference between its cost and its estimated net realizable value.

~~Net Income (Loss) per Share~~

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

Three Months Ended
March 31,
2018 2017
(In Thousands)
Number of weighted average common shares outstanding 117,598
114,197
Assumed exercise of equity awards and warrants —
107
Average diluted shares outstanding 117,598
114,304

~~For the~~three month period ended March 31, 2018, the average diluted shares outstanding excludes the impact of all outstanding equity awards and warrants, as the inclusion of these shares would have been anti-dilutive due to the net losses recorded during the periods. In addition, for the three month periods ended March 31, 2018 and March 31, 2017, the calculation of diluted earnings per common share excludes the impact of the CCLP

~~Preferred Units, as the inclusion of the impact from conversion of the CCLP Preferred Units into CCLP common units would have been anti-dilutive.~~present.

Foreign Currency Translation

~~We have designated the euro, the British pound, the Norwegian krone, the Canadian dollar, theBrazilian real, the Argentine peso, and theMexican peso, respectively, as the functional currency for our operations in Finland and Sweden, the United Kingdom, Norway, Canada, Brazil, Argentina,and certain of our operations in Mexico. The U.S. dollar is the designated functional currency for all of our other foreign operations.~~ The cumulative translation effects of translating the applicable accounts from the functional currencies into the U.S. dollar at current exchange rates are included as a separate component of equity. Foreign currency exchange ~~gains~~(gains) and ~~(losses)~~losses are included in other (income) expense, net and totaled ~~$0.9 million and $(0.6)~~$1.2 million during ~~the three month periods ended March 31, 2018 and March 31, 2017, respectively.~~

~~Income Taxes~~

Our consolidated provision for income taxes during the first three months of 2017 and 2018 is primarily attributable to taxes in certain foreign jurisdictions and Texas gross margin taxes. Our consolidated effective tax rate for the three month period ended March 31, 2018 of negative 5.6% was primarily the result of losses generated in entities for which no related tax benefit has been recorded. The losses generated by these entities do not result in tax benefits due to offsetting valuation allowances being recorded against the related net deferred tax assets. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the U.S. as well as in certain foreign jurisdictions.

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. At March 31, 2018 and December 31, 2017, we had not completed our accounting for the tax effects of enactment of the Act; however, in certain cases, as described below, we made reasonable estimates of the effects and recorded provisional amounts. We will continue to make and refine our calculations as additional analysis is completed. We recognized an income tax expense of $54.1 million in the fourth quarter of 2017 associated with the impact of the Act in our 2017 filing. This income tax expense was fully offset by a decrease in the valuation allowance previously recorded on our net deferred tax assets. As such, the Act resulted in no net tax expense in the fourth quarter of 2017. We have considered in our estimated annual effective tax rate for 2018, the impact of the statutory changes enacted by the Act, including reasonable estimates of those provisions effective for the 2018 tax year. Our provisional estimate on Global Intangible Low Taxed Income (“GILTI”), Foreign Derived Intangible Income (“FDII”), Base Erosion and Anti-Abuse Tax (“BEAT”), and IRC Section 163(j) interest limitation do not impact our effective tax rate for the three months ended March 31, ~~2018. The accounting for the tax effects of the Act will be completed in 2018 as provided by the U.S. Securities~~2019 and ~~Exchange Commission’s SAB No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act.~~

~~Asset Retirement Obligations~~

We operate facilities in various U.S. and foreign locations that are used in the manufacture, storage, and sale of our products, inventories, and equipment. These facilities are a combination of owned and leased assets. The values of our asset retirement obligations for these properties were $11.9$0.9 million and $11.7 million as of March 31, 2018 and December 31, 2017, respectively. We are required to take certain actions in connection with the retirement of these assets. Asset retirement obligations are recorded in accordance with FASB ASC 410, "Asset Retirement and Environmental Obligations," whereby the estimated fair value of a liability for asset retirement obligations is recognized in the period in which it is incurred and in which a reasonable estimate can be made. Such estimates are based on relevant assumptions that we believe are reasonable. We have reviewed our obligations in this regard in detail and estimated the cost of these actions. The associated asset retirement costs are capitalized as part of the carrying amount of these long-lived assets and are depreciated on a straight-line basis over the life of the assets.

~~The changes in the values of our asset retirement obligations~~ during ~~the three month period ended March 31, 2018, are as follows:~~

Three Months Ended March 31, 2018
(In Thousands)
Beginning balance for the period, as reported $ 11,738
Activity in the period:
Accretion of liability 159
Revisions in estimated cash flows 32
Ending balance $ 11,929

~~We review the adequacy of our asset retirement obligation liabilities whenever indicators suggest that the estimated cash flows underlying the liabilities have changed.~~

~~Fair Value Measurements~~

Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” within an entity’s principal market, if any. The principal market is the market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity, regardless of whether it is the market in which the entity will ultimately transact for a particular asset or liability or if a different market is potentially more advantageous. Accordingly, this exit price concept may result in a fair value that may differ from the transaction price or market price of the asset or liability.

Under U.S. generally accepted accounting principles ("GAAP"), the fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value. Fair value measurements should maximize the use of observable inputs and minimize the use of unobservable inputs, where possible. Observable inputs are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs may be needed to measure fair value in situations where there is little or no market activity for the asset or liability at the measurement date and are developed based on the best information available in the circumstances, which could include the reporting entity’s own judgments about the assumptions market participants would utilize in pricing the asset or liability.

We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. Fair value measurements are utilized on a recurring basis in the determination of the carrying value of the liability for the warrants to purchase 11.2 million shares of our common stock (the "Warrants") and CCLP Preferred Units (as herein defined). We also utilize fair value measurements on a recurring basis in the accounting for our foreign currency derivative contracts. For these fair value measurements, we utilize the quoted value as determined by our counterparty financial institution (a level 2 fair value measurement). Fair value measurements are also utilized on a nonrecurring basis, such as in the allocation of purchase consideration for acquisition transactions to the assets and liabilities acquired, including intangible assets and goodwill (a level 3 fair value measurement), the initial recording of our asset retirement obligations, and for the impairment of long-lived assets, including goodwill (a level 3 fair value measurement). The fair value of certain of our financial instruments, which include cash, restricted cash, accounts receivable, accounts payable, short-term borrowings, and long-term debt pursuant to our bank credit agreement, approximate their carrying amounts. The aggregate fair values of our long-term 11% Senior Note at March 31, 2018 and December 31, 2017, were approximately $128.5 million and $130.8 million, respectively, based on current interest rates on those dates, which were different from the stated interest rate on the 11% Senior Note. Those fair values compare to face amounts of the 11% Senior Note of $125.0 million both at March 31, 2018 and December 31, 2017. The fair values of the publicly traded CCLP 7.25% Senior Notes (as herein defined) at March 31, 2018 and December 31, 2017, were approximately $277.4 million and $279.7 million, respectively. Those fair values compare to a face amount of $295.9 million both at March 31, 2018 and December 31, 2017. The fair value of the publicly traded CCLP 7.50% Senior Secured Notes at March 31, 2018 was approximately $353.5 million. This fair value compares to aggregate principal amount of such notes at March 31, 2018 of $350.0 million. We calculated the fair values of our 11% Senior Note as of March 31, 2018 and December 31, 2017 internally, using current market conditions and average cost of debt (a level 2 fair value measurement). We based the fair values of the CCLP 7.25% Senior Notes and the CCLP 7.50% Senior Secured Notes as of March 31, 2018 on recent trades for these notes (a level 1 fair value measurement). See Note D - Long-Term Debt and Other Borrowings, for further discussion.

The CCLP Preferred Units are valued using a lattice modeling technique that, among a number of lattice structures, includes significant unobservable items (a Level 3 fair value measurement). These unobservable items include (i) the volatility of the trading price of CCLP's common units compared to a volatility analysis of equity prices of CCLP's comparable peer companies, (ii) a yield analysis that utilizes market information related to the debt yields of comparable peer companies, and (iii) a future conversion price analysis. The fair valuation of the CCLP Preferred Units liability is increased by, among other factors, projected increases in CCLP's common unit price and by increases in the volatility and decreases in the debt yields of CCLP's comparable peer companies. Increases (or decreases) in the fair value of CCLP Preferred Units will increase (decrease) the associated liability and result in future adjustments to earnings for the associated valuation losses (gains). During the three months ended March 31, 2018, ~~the fair value of the CCLP Preferred Units increased by $1.4 million, which was charged to earnings in the consolidated statement of operations.~~

The Warrants are valued either by using their traded market prices (a level 1 fair value measurement) or, for periods when market prices are not available, by using the Black Scholes option valuation model that includes estimates of the volatility of the Warrants implied by their trading prices (a level 3 fair value measurement). As of March 31, 2018respectively.and December 31, 2017, the fair valuation methodology utilized for the Warrants was a level 3 fair value measurement, as there were no available traded market prices to value the Warrants. The fair valuation of the Warrants liability is increased by, among other factors, increases in our common stock price, and by increases in the volatility of our common stock price. Increases (or decreases) in the fair value of the Warrants will increase (decrease) the associated liability and result in future adjustments to earnings for the associated valuation losses (gains). During the three months ended March 31, 2018, the fair value of the Warrants liability decreased by $2.0 million, which was credited to earnings in the consolidated statement of operations.

During the third quarter of 2017 and the first quarter of 2018, we issued stand-alone, cash-settled stock appreciation rights awards to an executive officer. These awards are valued by using the Black Scholes option valuation model and such fair value is recognized based on the portion of the requisite service period satisfied as of each valuation date. The fair valuation of the stock appreciation rights liability is increased by, among other factors, increases in our common stock price, and by increases in the volatility of our common stock price. This stock appreciation rights awards are reflected as an accrued liability in our consolidated balance sheet. Increases (or decreases) in the fair value of the stock appreciation rights awards will increase (decrease) the associated liability and result in future adjustments to earnings for the associated valuation losses (gains).

~~A summary of these fair value measurements as of March 31, 2018 and December 31, 2017, is as follows:~~

Fair Value Measurements Using
Total as of Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs
Description March 31, 2018 (Level 1) (Level 2) (Level 3)
(In Thousands)
CCLP Series A Preferred Units $ (54,214 ) $ —
$ —
$ (54,214 )
Warrants liability (11,207 ) —
—
(11,207 )
Cash-settled stock appreciation rights (142 ) —
—
(142 )
Asset for foreign currency derivative contracts 104
—
104
—
Liability for foreign currency derivative contracts (264 ) —
(264 ) —
Net liability $ (65,723 )

Fair Value Measurements Using
Total as of Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs
Description December 31, 2017 (Level 1) (Level 2) (Level 3)
(In Thousands)
CCLP Series A Preferred Units $ (61,436 ) $ —
$ —
$ (61,436 )
Warrants liability (13,202 ) —
—
(13,202 )
Cash-settled stock appreciation rights (97 ) —
—
(97 )
Asset for foreign currency derivative contracts 241
—
241
—
Liability for foreign currency derivative contracts (378 ) —
(378 ) —
Net liability $ (74,872 )

New Accounting Pronouncements

~~In May 2014, the Financial Accounting~~ Standards ~~Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers." This ASU supersedes the revenue recognition requirements~~adopted in Accounting Standards Codification ("ASC") 605, "Revenue Recognition", and most industry-specific guidance. This ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those years, under either full or modified retrospective adoption.2019

In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" to clarify the guidance on principal versus agent considerations. This ASU does not change the effective date or adoption method under ASU 2014-09 which is noted above.

In April 2016, the FASB issued ASU 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing" to clarify the guidance on identifying performance obligations and the licensing implementation guidance. This ASU does not change the effective date or adoption method under ASU 2014-09, which is noted above.

Additionally, in May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients." This ASU addresses and amends several aspects of ASU 2014-09, but does not change the core principle of the guidance. This ASU does not change the effective date or adoption method under ASU 2014-09 which is noted above.

On January 1, 2018, we adopted ASU 2014-09 and all related amendments ("ASU 2014-09"). We utilized the modified retrospective method of adoption. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also provides a five-step model for determining revenue recognition for arrangements that are within the scope of the standard: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASU 2014-09, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for revenues, see Note J - Revenue from Contracts with Customers.

The impact from the adoption of ASU 2014-09 to our January 1, 2018 consolidated balance sheet, our March 31, 2018 consolidated balance sheet, and our consolidated results of operations for the three months ended March 31, 2018 was immaterial. The adoption of ASU 2014-09 had no impact to cash provided by operating, financing, or investing activities in our consolidated statement of cash flows. We do not expect the adoption of the new revenue standard to have a material impact to our net income on an ongoing basis.

In February 2016, the FASB issued ~~ASU~~Accounting Standards Update ("ASU") 2016-02, ~~"Leases"~~"Leases (Topic 842)" to increase comparability and transparency among different organizations. Organizations are required to recognize right-of-use lease assets and lease liabilities onin the balance sheet related to the right to use the underlying asset for the lease term. In addition, through improved disclosure requirements, ASC 842 will enable users of financial statements to further understand the amount, timing, and ~~disclose key~~uncertainty of cash flows arising from leases. We adopted the standard effective January 1, 2019. The standard had a material impact on our consolidated balance sheet, specifically, the reporting of our operating leases. The impact in the reporting of our finance leases was insignificant.

We chose to transition using a modified retrospective approach which allows for the recognition of a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption rather than the earliest period presented. Comparative information ~~about~~is reported under the ~~leasing arrangements~~accounting standards that were in effect for those periods. In addition, upon transition, we elected the package of practical expedients, which allows us to continue to apply historical lease classifications to existing contracts. Upon adoption, we recognized $60.6 million in operating right-of-use assets, $12.0 million in accrued liabilities and ~~cash flows. The~~other, and $50.7 million in operating lease liabilities in our consolidated balance sheet. In addition, we also recognized a $2.8 million cumulative effect adjustment to increase retained earnings, primarily as a result of a deferred gain from a previous sale and

leaseback transaction on our corporate headquarters facility that was accounted for as an operating lease. Refer to Note K - “Leases” for further information on our leases.

In February 2018, the FASB issued ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220)" that gives entities the option to reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. This is effective for ~~annual periods beginning after December 15,~~us on January 1, 2019, however, as we do not have associated tax effects in accumulated other comprehensive income, there was no impact.

In June 2018, the FASB issued ASU 2018-07, “Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” to align the measurement and ~~interim periods within those annual periods, under a modified retrospective adoption~~classification guidance for share-based payments to nonemployees with ~~early adoption permitted.~~the guidance currently applied to employees, with certain exceptions. We ~~are currently assessing~~adopted this ASU during the ~~potential effects of these changes~~three months ended March 31, 2019, with no material impact to our consolidated financial statements.

Standards not yet adopted

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU 2016-13 ~~which~~ has an effective date of the first quarter of fiscal ~~2022, also applies to employee benefit plan accounting.~~2020. We are currently assessing the potential effects of these changes to our consolidated financial ~~statements and employee benefit plan accounting.~~

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" to reduce diversity in practice in classification of certain transactions in the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted, under a retrospective transition adoption. We adopted this ASU during the three month period ended March 31, 2018, with no material impact to our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory" which requires companies to account for the income tax effects of intercompany transfers of assets other than inventory when the transfer occurs. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted, under a modified retrospective transition adoption. We adopted this ASU during the three month period ended March 31, 2018. The adoption of this standard did not have a material impact to our consolidated financial statements due to a previously recorded valuation allowance on our net deferred tax assets.

Additionally, in November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash" to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted, under a retrospective transition adoption. We adopted this ASU during the three month period ended March 31, 2018, resulting in restricted cash being classified with cash and cash equivalents in our consolidated statement of cash flows.

In January 2017, the FASB issued ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill ~~Impairment"~~Impairment," which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. The ASU is effective for annual periods beginning after December 15, ~~2020,~~2019, and interim periods within those annual periods, with early adoption permitted, under a prospective adoption. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting" to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. The ASU is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. We adopted this ASU during the three month period ended March 31, 2018, with no material impact to our consolidated financial statements.

In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception" to consider “down round” features when determining whether certain equity-linked financial

instruments or embedded features are indexed to an entity’s own stock. Entities that present EPS under ASC 260 will recognize the effect of a down round feature in a freestanding equity-classified financial instrument only when it is triggered. The effect of triggering such a feature will be recognized as a dividend and a reduction to income available to common shareholders in basic EPS. The ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. We are currently assessing the potential effects of these changes to our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" to change how companies account for and disclose hedges. The ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. We are currently assessing the potential effects of these changes to our consolidated financial statements.

NOTE B – ~~ACQUISITIONS AND DISPOSITIONS~~INVENTORIES

~~Acquisition~~Components of ~~SwiftWater Energy Services~~

On February 28, 2018, pursuant to a purchase agreement dated February 13, 2018 (the "SwiftWater Purchase Agreement"), we purchased all of the equity interests in SwiftWater Energy Services, LLC ("SwiftWater"), which is engaged in the business of providing water management and water solutions to oil and gas operators in the Permian Basin market of Texas. Strategically, the acquisition of SwiftWater enhances our positioninventories as one of the leading integrated water management companies, providing water transfer, storage, and treatment services, along with proprietary automation technology and numerous other water-related services.

Under the terms of the SwiftWater Purchase Agreement, consideration of $42.0 million of cash, subject to a working capital adjustment, and 7,772,021 shares of our common stock (valued at $28.2 million) were paid at closing. The sellers will also have the right to receive contingent consideration payments, in an aggregate amount of up to $15.0 million, calculated on EBITDA and revenue (each as defined in the SwiftWater Purchase Agreement) of the water management business of SwiftWater and all of our pre-existing operations in the Permian Basin in respect of the period from January 1, 2018 through December 31, 2019. The contingent consideration may be paid in cash or shares of our common stock, at our election.

As of March 31, 2019 and December 31, 2018 ~~our preliminary allocation of the SwiftWater purchase price is~~are as ~~follows (in thousands):~~

follows:

Current assets $ 16,880
Property and equipment 10,999
Intangible assets 42,032
Goodwill 15,220
Total assets acquired 85,131

Current liabilities 7,189
Total liabilities assumed 7,189
Net assets acquired $ 77,942



	March 31, 2019		December 31, 2018
	(In Thousands)
Finished goods	$	72,831	$	69,762
Raw materials	3,279		3,503
Parts and supplies	44,915		47,386
Work in progress	35,603		22,920
Total inventories	$	156,628	$	143,571

The above allocation of the purchase price to the SwiftWater net tangible assets and liabilities considers approximately $6.7 million of estimated fair value for the liabilities associated with the contingent purchase price consideration. The fair value of the obligation to pay the contingent purchase price consideration was calculated based on the anticipated EBITDA and revenue for our water management business comprised of SwiftWater and all of our pre-existing operations in the Permian Basin and could increase (to $15.0 million) or decrease (to $0) depending on the actual earnings from these operations going forward. Increases or decreases in the value of the anticipated contingent purchase price consideration liability due to changes in the amounts paid or expected to be paid will be charged or credited to earnings in the period in which such changes occur. The allocation of the purchase price to the SwiftWater net tangible assets and liabilities and identifiable intangible assets,Finished goods inventories include newly manufactured clear brine fluids as well as used brines that are repurchased from certain customers for recycling. Work in progress inventory consists primarily of new compressor packages located in the ~~contingent consideration liabilities, as of February 28, 2018, is preliminary and subject to revisions to the fair value~~CCLP fabrication facility in Midland, Texas.

~~calculations for certain~~NOTE C – NET INCOME (LOSS) PER SHARE

The following is a reconciliation of the ~~tangible and identified intangible assets as well as~~weighted average number of common shares outstanding with the ~~fair value calculation~~number of ~~the contingent purchase price consideration liability. The final purchase price allocation could differ materially from the preliminary allocation noted~~shares used in the ~~summary above. The preliminary allocation~~computations of ~~purchase price includes approximately $15.2 million of deductible goodwill allocated to our Water & Flowback Services segment,~~net income (loss) per common and is supported by the strategic benefits discussed above and expected to be generated from the acquisition. The acquired property and equipment is stated at fair value, and depreciation on the acquired property and equipment is computed using the straight-line method over the estimated useful lives of each asset. Machinery and equipment is depreciated using useful lives of 3 to 15 years; and automobiles and trucks are depreciated using useful lives of 3 to 4 years. The acquired intangible assets represent approximately $3.3 million for the trademark/tradename, approximately $37.2 million for customer relationships, and approximately $1.5 million of other intangible assets that are stated at estimated fair value and are amortized on a straight-line basis over their estimated useful lives, ranging from 5 to 16 years. These identified intangible assets are recorded net of approximately $0.2 million of accumulated amortization as of March 31, 2018.common equivalent share:



	Three Months Ended March 31,
	2019	2018
	(In Thousands)
Number of weighted average common shares outstanding	125,681	117,598
Assumed exercise of equity awards and warrants	—	—
Average diluted shares outstanding	125,681	117,598

For thethree month ~~period~~periods ended March 31, ~~2018, our revenues, depreciation~~2019 and amortization, and pretax earnings included $8.1 million, $0.5 million, and $1.8 million, respectively, associated with the SwiftWater acquisition after the closing on February 28, 2018. In addition, SwiftWater acquisition-related costs of approximately $0.4 million were incurred during the three month period ended March 31, 2018, ~~consisting of external legal fees, transaction consulting fees, and due diligence costs. These costs have been recognized in general and administrative expenses in~~ the ~~consolidated statement of operations.~~

The pro forma information presented below has been prepared to give effect to the SwiftWater acquisition as if the transaction had occurred at the beginning of the periods presented. The pro forma information includesaverage diluted shares outstanding excludes the impact ~~from~~of all outstanding equity awards and warrants, as the ~~allocation~~inclusion of the acquisition purchase price on depreciation and amortization. The pro forma information also excludes the SwiftWater acquisition-related costs charged to earnings during the 2018 period. The pro forma information is presented for illustrative purposes only and is based on estimates and assumptions we deemed appropriate. The following pro forma information is not necessarily indicative of the historical results thatthese shares would have been achieved if the acquisition transaction had occurred in the past, and our operating results may have been different from those reflected in the pro forma information below. Therefore, the pro forma information should not be relied upon as an indication of the operating results that we would have achieved if the transaction had occurred at the beginning of the periods presented or the future results that we will achieve after the transaction.

Three Months Ended March 31,
2018 2017
(In Thousands)
Revenues $ 213,531
$ 170,933
Depreciation, amortization, and accretion $ 26,951
$ 27,051
Gross profit $ 32,432
$ 23,659

Net income (loss) from continuing operations $ (21,437 ) $ (5,411 )
Net income (loss) attributable to TETRA stockholders $ (12,322 ) $ 3,378

~~Sale of Offshore Division~~

On March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division. Pursuant to an Asset Purchase and Sale Agreement (the "Maritech Asset Purchase Agreement") with Orinoco Natural Resources, LLC ("Orinoco"), Orinoco purchased certain remaining offshore oil, gas and mineral leases and related assets of Maritech (the "Maritech Properties"). Immediately thereafter, we closed the transactions contemplated by a Membership Interest Purchase and Sale Agreement (the "Maritech Equity Purchase Agreement") with Orinoco, whereby Orinoco purchased all of the equity interests of Maritech (the "Maritech Equity Interests"). Immediately thereafter, we closed the transactions contemplated by an Equity Interest Purchase Agreement (the "Offshore Services Purchase Agreement") with Epic Offshore Specialty, LLC, an affiliate of Orinoco ("Epic Offshore"), whereby Epic Offshore (the "Offshore Services Sale") purchased all of the equity interests in the wholly owned subsidiaries that comprised our Offshore Services segment operations (the "Offshore Services Equity Interests").

Under the terms of the Maritech Asset Purchase Agreement, the Maritech Equity Purchase Agreement, and the Offshore Services Purchase Agreement, the consideration delivered by Orinoco and Epic Offshore for the Maritech Properties, the Maritech Equity Interests and the Offshore Services Equity Interests consisted of (i) the assumption by Orinoco of substantially all of the liabilities and obligations relatinganti-dilutive due to the ~~ownership, operation and condition of~~net losses recorded during the Maritech Properties and the provision of certain indemnities by Orinoco to us under the Maritech Asset Purchase Agreement, (ii) the assumption by Orinoco of substantially all of the liabilities of Maritech and the provision of certain indemnities by Orinoco under the Maritech Equity Purchase Agreement, (iii) the assumption by Epic Offshore of substantially all of the liabilities of the Offshore Services Equity Interests relating to the periods following the closing of the Offshore Services Sale and the provision of certain indemnities by Epic Offshore under the Offshore Services Purchase Agreement, (iv) cash in the amount $3.1 million, (v) a promissory note in the original principal amount of $7.5 million payable by Epic Offshore to us in full, together with interest at a rate of 1.52% per annum, on December 31, 2019, (vi) performance by Orinoco under a Bonding Agreement executed in connection with the Maritech Asset Purchase Agreement and the Maritech Equity Purchase Agreement whereby Orinoco provided at closing non-revocable performance bonds in an amount equal to $46.8 million to cover the performance by Orinoco and Maritech of the asset retirement obligations of Maritech, to be replaced within 90 days of the closing with non-revocable performance bonds, meeting certain requirements, in the sum of $47.0 million, and (vii) the delivery of a personal guaranty agreement from Thomas M. Clarke and Ana M. Clarke guaranteeing the payment obligations of Orinoco under the Bonding Agreement (collectively, the "Transaction Consideration").

As a result of these transactions, we have effectively exited the businesses of our Offshore Services and Maritech segments, and these operations are reflected as discontinued operations in our consolidated financial statements. See Note C - "Discontinued Operations" for further discussion. Our consolidated pre-tax results of operationsperiods. In addition, for the three month ~~period ending~~periods ended March 31, 2019 and March 31, 2018, ~~included a loss on~~ the ~~disposal~~calculation of ~~our Offshore Division~~diluted earnings per common share excludes the impact of ~~$31.5 million, net~~the CCLP Preferred Units (as defined in Note F), as the inclusion of ~~tax, including transaction costs~~the impact from conversion of ~~$1.4 million, during~~ the ~~three month period ended March 31, 2018.~~

CCLP Preferred Units into CCLP common units would have been anti-dilutive.

NOTE CD – DISCONTINUED OPERATIONS

~~As discussed in Note B - "Acquisitions and Dispositions," on~~On March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division. As a result, we have accounted for our Offshore Division, consisting of our Offshore Services and Maritech segments, as discontinued operations and have revised prior period financial statements to exclude these businesses from continuing operations. A summary of financial information related to our discontinued operations is as follows:

Reconciliation of the Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations

(in thousands)


	Three Months Ended March 31, 2018									Three Months Ended March 31, 2017									Three Months Ended March 31, 2019								Three Months Ended March 31, 2018
	Offshore Services			Maritech			Total			Offshore Services			Maritech			Total			Offshore Services			Maritech		Total			Offshore Services			Maritech			Total
Major classes of line items constituting pretax loss from discontinued operations
Revenue	$	4,477		$	186		$	4,663		$	8,361		$	231		$	8,592		$	—		$	—	$	—		$	4,477		$	186		$	4,663
Cost of revenues	11,123			238			11,361			10,740			287			11,027			22			—		22			11,123			238			11,361
Depreciation, amortization, and accretion	1,856			213			2,069			2,584			370			2,954			—			—		—			1,856			213			2,069
General and administrative expense	1,253			186			1,439			1,468			237			1,705			404			—		404			1,253			186			1,439
Other (income) expense, net	39			—			39			(96		)	—			(96		)	—			—		—			39			—			39
Pretax loss from discontinued operations	(9,794		)	(451		)	(10,245		)	(6,335		)	(663		)	(6,998		)	(426		)	—		(426		)	(9,794		)	(451		)	(10,245		)
Pretax loss on disposal of discontinued operations							(33,788		)							—								—									(33,788		)
Total pretax loss from discontinued operations							(44,033		)							(6,998		)						(426		)							(44,033		)
Income tax benefit							(2,327		)							9								—									(2,327		)
Total loss from discontinued operations							$	(41,706	)							$	(7,007	)						$	(426	)							$	(41,706	)

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

(in thousands)

March 31, 2018 December 31, 2017
Offshore Services Maritech Total Offshore Services Maritech Total
Carrying amounts of major classes of assets included as part of discontinued operations
Trade receivables $ 6,474
$ 1,433
$ 7,907
$ 27,385
$ 1,542
$ 28,927
Inventories —
—
—
4,616
—
4,616
Property, plant, and equipment —
—
—
85,873
—
85,873
Other assets —
—
—
1,674
44
1,718
Total major classes of assets of the discontinued operations $ 6,474
$ 1,433
$ 7,907
$ 119,548
$ 1,586
$ 121,134

Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables 6,509
228
6,737
13,942
87
14,029
Accrued liabilities 5,328
2,222
7,550
8,905
2,278
11,183
Decommissioning and other asset retirement obligations —
—
—
—
46,662
46,662
Total major classes of liabilities of the discontinued operations $ 11,837
$ 2,450
$ 14,287
$ 22,847
$ 49,027
$ 71,874



	March 31, 2019						December 31, 2018
	Offshore Services		Maritech		Total		Offshore Services		Maritech		Total
Carrying amounts of major classes of assets included as part of discontinued operations
Trade receivables	$	81	$	1,340	$	1,421	$	—	$	1,340	$	1,340
Other current assets	1		—		1		14		—		14
Assets of discontinued operations	$	82	$	1,340	$	1,422	$	14	$	1,340	$	1,354

Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables	$	616	$	—	$	616	$	740	$	—	$	740
Accrued liabilities	838		2,075		2,913		1,330		2,075		3,405
Liabilities of discontinued operations	$	1,454	$	2,075	$	3,529	$	2,070	$	2,075	$	4,145

NOTE DE – LONG-TERM DEBT AND OTHER BORROWINGS

We believe ~~TETRA's~~our capital structure, excluding CCLP, ("TETRA") and CCLP's capital structure should be considered separately, as there are no cross default provisions, cross collateralization provisions, or cross guarantees between CCLP's debt and TETRA's debt.

Consolidated long-term debt as of March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, consists of the following:


		March 31, 2018		December 31, 2017			March 31, 2019		December 31, 2018
		(In Thousands)					(In Thousands)
TETRA	Scheduled Maturity					Scheduled Maturity
Bank revolving line of credit facility (presented net of the unamortized deferred financing costs of $1.3 million as of March 31, 2018)	September 30, 2019	$	73,143	$	—
11.0% Senior Note, Series 2015 (presented net of the unamortized discount of $3.7 million as of March 31, 2018 and $3.9 million as of December 31, 2017 and net of unamortized deferred financing costs of $3.3 million as of March 31, 2018 and $3.4 million as of December 31, 2017)	November 5, 2022	118,008		117,679
Asset-based credit agreement (presented net of unamortized deferred financing costs of $1.6 million as of March 31, 2019)						September 10, 2023	$	29,131	$	—
Term credit agreement (presented net of the unamortized discount of $7 million as of March 31, 2019 and $7.2 million as of December 31, 2018 and net of unamortized deferred financing costs of $10 million as of March 31, 2019 and $10.2 million as of December 31, 2018)						September 10, 2025	183,020		182,547
TETRA total debt		191,151		117,679			212,151		182,547
Less current portion		—		—			—		—
TETRA total long-term debt		$	191,151	$	117,679		$	212,151	$	182,547

CCLP
CCLP Bank Credit Facility (presented net of the unamortized deferred financing costs of $4.0 million as of December 31, 2017), terminated March 22, 2018	August 4, 2019	—		223,985
CCLP 7.25% Senior Notes (presented net of the unamortized discount of $2.7 million as of March 31, 2018 and $2.8 million as of December 31, 2017 and net of unamortized deferred financing costs of $4.7 million as of March 31, 2018 and $5.0 million as of December 31, 2017)	August 15, 2022	288,588		288,191
CCLP 7.50% Senior Secured Notes (presented net of unamortized deferred financing costs of $6.2 million as of March 31, 2018)	March 22, 2025	343,826		—
CCLP asset-based credit agreement						June 29, 2023	—		—
CCLP 7.25% Senior Notes (presented net of the unamortized discount of $2.1 million as of March 31, 2019 and $2.2 million as of December 31, 2018 and net of unamortized deferred financing costs of $3.6 million as of March 31, 2019 and $3.9 million as of December 31, 2018)						August 15, 2022	290,204		289,797
CCLP 7.50% Senior Secured Notes (presented net of unamortized deferred financing costs of $6.5 million as of March 31, 2019 and $6.8 million as of December 31, 2018)						April 1, 2025	343,488		343,216
CCLP total debt		632,414		512,176			633,692		633,013
Less current portion		$	—	$	—		—		—
Consolidated total long-term debt		$	823,565	$	629,855		$	845,843	$	815,560

As of March 31, ~~2018,~~2019, TETRA ~~(excluding CCLP)~~ had a ~~$74.4~~$30.7 million outstanding balance and $~~6.1~~9.0 million in letters of credit against its asset-based credit agreement ("ABL Credit ~~Agreement, leaving a net~~Agreement"). As of March 31, 2019, subject to compliance

with the covenants, borrowing base, and other provisions of the agreement that may limit borrowings, TETRA had an availability of ~~$119.5 million. Availability~~$27.3 million under this agreement. There was no balance outstanding under the ~~TETRA~~CCLP asset-based credit agreement ("CCLP Credit ~~Agreement is~~Agreement") as of March 31, 2019. As of March 31, 2019, and subject to compliance with the covenants, borrowing base, and other provisions inof the ~~credit agreement~~agreements that may limit borrowings ~~thereunder. The~~under the CCLP Credit Agreement, ~~was terminated in March 2018.~~CCLP had availability of $18.4 million.

~~As described below, we~~TETRA and CCLP credit and senior note agreements contain certain affirmative and negative covenants, including covenants that restrict the ability to pay dividends or other restricted payments. TETRA and CCLP are both in compliance with all covenants of ~~our~~their respective ~~debt~~credit and senior note agreements as of March 31, ~~2018.~~

~~Our Long-Term Debt~~

~~Our Credit Agreement~~.

At March 31, 2018, our consolidated leverage ratio was 2.62 to 1 (compared to a 4.75 to 1 maximum allowed under the Credit Agreement) and our fixed charge coverage ratio was 2.54 to 1 (compared to a 1.25 to 1 minimum required under the Credit Agreement).

~~CCLP Long-Term Debt~~

~~CCLP Senior Secured Notes~~. On March 8, 2018, CCLP, and its wholly owned subsidiary, CSI Compressco Finance Inc. (together with CCLP, the "CCLP Issuers") entered into the Purchase Agreement (the “Purchase Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated as representative of the initial purchasers listed in Schedule A thereto (collectively, the “Initial Purchasers”), pursuant to which the CCLPIssuers agreed to issue and sell to the Initial Purchasers $350 million aggregate principal amount of the CCLP Issuers’ 7.50% Senior Secured First Lien Notes due 2025 (the "CCLP Senior Secured Notes") (the "CCLP Offering") pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act").

The CCLP Issuers closed the Offering on March 22, 2018. The CCLP Senior Secured Notes were issued at par for net proceeds of approximately $344.1 million, after deducting certain financing costs. CCLP used the net proceeds to repay in full and terminate its existing bank Credit Agreement and for general partnership purposes, including the expansion of its compression fleet. The CCLP Senior Secured Notes~~are jointly and severally, and fully and unconditionally, guaranteed (the "Guarantees" and, together with the CCLP Senior Secured Notes, the "CCLP Senior Secured Note Securities")~~on a senior secured basis initially by each of CCLP's domestic restricted subsidiaries (other than CSI Compressco Finance Inc., certain immaterial subsidiaries and certain other excluded domestic subsidiaries) and are secured by a first-priority security interest in substantially all of the CCLP Issuers' and the Guarantors' assets (other than certain excluded assets) (the "Collateral") as collateral security for their obligations under the CCLP Senior Secured Notes, subject to certain permitted encumbrances and exceptions. On the closing date, CCLP entered into an indenture (the "Indenture") by and among the Obligors and U.S. Bank National Association, as trustee with respect to the Securities. The CCLP Senior Secured Notesaccrue interest at a rate of 7.50% per annum. Interest on the CCLP Senior Secured Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning October 1, 2018. The CCLP Senior Secured Notes are scheduled to mature on April 1, 2025. During the three months ended March 31, 2018, CCLP incurred total financing costs of $6.2 million related to the~~CCLP Senior Secured Notes. These costs are deferred, netting against the carrying value of the amount outstanding.~~

On and after April 1, 2021, CCLP may redeem all or a part of the CCLP Senior Secured Notes, from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest thereon to, but not including, the applicable redemption date, subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the 12-month period beginning on April 1 of the years indicated below:

Date Price
2021 105.625 %
2022 103.750 %
2023 101.875 %
2024 100.000 %

In addition, any time or from time to time before April 1, 2021, CCLP may, at its option, redeem all or a portion of the CCLP Senior Secured Notes at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium (as defined in the Indenture) with respect to the CCLP Senior Secured Notes plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, subject to the rights of holders of the CCLP Senior Secured Notes on the relevant record date to receive interest due on the relevant interest payment date.

relevant interest payment date, provided that (a) at least 65% of the aggregate principal amount of the CCLP Senior Secured Notes originally issued on the issue date (excluding notes held by CCLP and its subsidiaries) remains outstanding after each such redemption; and (b) the redemption occurs within 180 days after the date of the closing of the equity offering.

If CCLP experiences certain kinds of changes of control, each holder of the CCLP Senior Secured Notes will be entitled to require CCLP to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) of that holder’s CCLP Senior Secured Notes pursuant to an offer on the terms set forth in the Indenture. CCLP will offer to make a cash payment equal to 101% of the aggregate principal amount of the CCLP Senior Secured Notes repurchased plus accrued and unpaid interest, if any, on the CCLP Senior Secured Notes repurchased to the date of repurchase, subject to the rights of holders of the CCLP Senior Secured Notes on the relevant record date to receive interest due on the relevant interest payment date.

The Indenture contains customary covenants restricting CCLP's ability and the ability of CCLP restricted subsidiaries to: (i) pay distributions on, purchase or redeem CCLP common units or purchase or redeem CCLP subordinated debt; (ii) incur or guarantee additional indebtedness or issue certain kinds of preferred equity securities; (iii) create or incur certain liens securing indebtedness; (iv) sell assets, including dispositions of the Collateral; (v) consolidate, merge or transfer all or substantially all of its assets; (vi) enter into transactions with affiliates; and (vii) enter into agreements that restrict distributions or other payments from its restricted subsidiaries to CCLP. These covenants are subject to a number of important limitations and exceptions, including certain provisions permitting CCLP, subject to the satisfaction of certain conditions, to transfer assets to certain of CCLP's unrestricted subsidiaries. Moreover, if the CCLP Senior Secured Notes receive an investment grade rating from at least two rating agencies and no default has occurred and is continuing under the Indenture, many of the restrictive covenants in the Indenture will be terminated. The Indenture also contains customary events of default and acceleration provisions relating to such events of default, which provide that upon an event of default under the Indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding CCLP Senior Secured Notes may declare all of the CCLP Senior Secured Notes to be due and payable immediately.

On March 22, 2018, CCLP, the grantors named therein, the Trustee and U.S. Bank National Association, as the collateral trustee (the “Collateral Trustee”), entered into a collateral trust agreement (the “Collateral Trust Agreement”) pursuant to which the Collateral Trustee will receive, hold, administer, maintain, enforce and distribute the proceeds of all of its liens upon the collateral for the benefit of the current and future holders of the CCLP Senior Secured Notes and any future priority lien obligations, if any.

~~CCLP Bank Credit Facilities.~~

On March 22, 2018, in connection with the closing of the CCLP Offering, CCLP repaid all outstanding borrowings and obligations under its existing CCLP Credit Agreement with a portion of the net proceeds from the CCLP Offering, and terminated the CCLP Credit Agreement. As a result of the termination of the CCLP Credit Agreement, associated unamortized deferred financing costs of $3.5 million were charged to other (income) expense, net, during the three month period ended March 31, 2018.

2019.

NOTE EF – CCLP SERIES A CONVERTIBLE PREFERRED UNITS

During 2016, CCLP entered into Series A Preferred Unit Purchase Agreements (the “CCLP Unit Purchase Agreements”) with certain purchasers to issue and sell in private placements (the "Initial Private Placement" and "Subsequent Private Placement," respectively)issued an aggregate of 6,999,126 of CSI Compressco LP Series A Convertible Preferred Units representing limited partner interests in CCLP (the “CCLP Preferred Units”) for a cash purchase price of $11.43 per CCLP Preferred Unit (the “Issue Price”)~~, resulting in total 2016 net proceeds to CCLP, after deducting certain offering expenses, of $77.3 million.~~. We purchased 874,891 of the CCLP Preferred Units ~~in the Initial Private Placement~~ at the aggregate Issue Price of $10.0 million.

~~We and the other holders of CCLP Preferred Units (each,~~Unless otherwise redeemed for cash, a “CCLP Preferred Unitholder”) receive quarterly distributions, which are paid in kind in additional CCLP Preferred Units, equal to an annual rate of 11.00% of the Issue Price ($1.2573 per unit annualized), subject to certain adjustments. The rights of the CCLP Preferred Units include certain anti-dilution adjustments, including adjustments for economic dilution resulting from the issuance of CCLP common units in the future below a set price.

A ratable portion of the CCLP Preferred Units has been, and will continue to be, converted into CCLP common units on the eighth day of each month over a period of thirty months that began in March 2017 and will end in August 2019 (each, a “Conversion Date”), subject to certain provisions of the Second Amended and Restated CCLP Partnership Agreement that may delay or accelerate all or a portion of such monthly conversions. On each Conversion Date, a portion of the CCLP Preferred Units will convert into CCLP common units representing limited partner interests in CCLP in an amount equal to, with respect to each CCLP Preferred Unitholder, the number of CCLP Preferred Units held by such CCLP Preferred Unitholder divided by the number of Conversion Dates remaining, subject to adjustment described in the Second Amended and Restated CCLP Partnership Agreement, with the conversion price (the "Conversion Price") determined by the trading prices of the common units over the prior month, among other factors, and as otherwise impacted by the existence of certain conditions related to the CCLP common units.. Based on the number of CCLP Preferred Units outstanding as of March 31, ~~2018,~~2019, the maximum aggregate number of CCLP common units that could be required to be issued pursuant to the conversion provisions of the CCLP Preferred Units is approximately ~~30.0~~10.2 million CCLP common units; however, CCLP may, at its option, pay cash, or a combination of cash and common units, to the holders of the CCLP Preferred ~~Unitholders~~Units instead of issuing common units on any Conversion Date, subject to certain restrictions as described in the Second Amended and Restated CCLP Partnership Agreement and the CCLP Credit Agreement. Beginning with the January 2019 Conversion Date, CCLP has elected to redeem the remaining CCLP Preferred Units for cash, resulting in 783,046 CCLP Preferred Units being redeemed during the three months ended March 31, 2019 for $8.3 million, which includes approximately $0.4 million of redemption premium that was paid and charged to other (income) expense, net in the accompanying consolidated statements of operations. The total number of CCLP Preferred Units outstanding as of March 31, ~~2018~~2019 was ~~5,241,563,~~1,779,417, of which we held ~~658,281.~~223,474.

Because the CCLP Preferred Units may be settled using a variable number of CCLP common units, the fair value of the CCLP Preferred Units, net of the units we purchased, is classified as long-term liabilities on our consolidated balance sheet in accordance with ASC 480 "Distinguishing Liabilities and Equity." The fair value of the CCLP Preferred Units as of March 31, 2018 was $54.2 million. Changes in the fair value during each quarterly period, including the $1.4 million and $1.6 million net increases in fair value during the three month period ended March 31, 2018 and 2017, respectively, are charged or credited to earnings in the accompanying consolidated statements of operations. Based on the conversion provisions of the CCLP Preferred Units, ~~and using the Conversion Price~~ calculated as of March 31, ~~2018,~~2019, using the trading prices of the common units over the prior month, along with other factors, and as otherwise impacted by the existence of certain conditions related to the CCLP common units (the "Conversion Price"), the theoretical number of CCLP common units that would be issued if all of the outstanding CCLP Preferred Units were converted on March 31, ~~2018~~2019 on the same basis as the monthly conversions would be approximately ~~8.6~~7.4 million CCLP common units, with an aggregate market value of ~~$62.6~~$21.0 million. AIf converted to CCLP common units, a $1 decrease in the Conversion Price would result in the issuance of ~~1.4~~2.8 million additional CCLP common units pursuant to these conversion provisions.

NOTE FG – ~~MARKET RISKS AND DERIVATIVE CONTRACTS~~FAIR VALUE MEASUREMENTS

WeFinancial Instruments

CCLP Preferred Units

The CCLP Preferred Units are ~~exposed~~valued using a lattice modeling technique that, among a number of lattice structures, includes significant unobservable items (a Level 3 fair value measurement). These unobservable items include (i) the volatility of the trading price of CCLP's common units compared to ~~financial~~a volatility analysis of equity prices of CCLP's comparable peer companies, (ii) a yield analysis that utilizes market information related to the debt yields of comparable peer companies, and ~~market risks that affect our businesses. We have concentrations of credit risk as~~(iii) a ~~result of trade receivables owed to us by companies~~future conversion price analysis. During the three month periods ended March 31, 2019 and March 31, 2018, the changes in the ~~energy industry. We have currency exchange rate risk exposure related~~fair value of the CCLP Preferred Units resulted in $1.2 million and $1.4 million being charged to ~~transactions denominated~~earnings, respectively, in ~~foreign currencies as well as~~the consolidated statements of operations.

Warrants

The Warrants are valued using a Black Scholes option valuation model that includes implied volatility of the trading price (a Level 3 fair value measurement). During the three month periods ended March 31, 2019 and March 31, 2018, the changes in the fair value of the Warrants liability resulted in $0.4 million being charged to ~~investments~~earnings and $2.0 million being credited to earnings, respectively, in ~~certain~~the consolidated statement of operations.

Contingent Consideration

The fair value of the contingent consideration associated with the February 2018 acquisition of SwiftWater Energy Services, LLC ("SwiftWater") is based on a probability simulation utilizing forecasted revenues and EBITDA of the water management business of SwiftWater and all of our ~~international operations. As~~pre-existing operations in the Permian Basin (a Level 3 fair value measurement). At March 31, 2019, the estimated fair value for the liability associated with the contingent purchase price consideration was $10.6 million, resulting in $0.4 million being credited to other (income) expense, net, during the three months ended March 31, 2019. In addition, as part of the purchase of JRGO Energy Services LLC ("JRGO") during December 2018, the sellers have the right to receive contingent consideration of up to $1.5 million to be paid during 2019, based on JRGO's performance during the fourth quarter of 2018. Approximately $11.5 million of the $12.1 million combined contingent consideration liability is based on actual 2018 performance and was paid in April 2019, with the remaining being a ~~result~~fair value measurement based on a forecast of our variable rate bank credit facility, we face market risk exposure related to changes in applicable interest rates. Our financial risk management activities may at times involve, among other measures, the use of derivative financial instruments, such as swapSwiftWater 2019 revenues and ~~collar agreements, to hedge the impact of market price risk exposures.~~EBITDA.

Derivative Contracts

~~Foreign Currency Derivative Contracts~~. We and CCLP each enter into ~~30-day~~short term foreign currency forward derivative contracts with third parties as part of a program designed to mitigate the currency exchange rate risk exposure on selected transactions of certain foreign subsidiaries. As of March 31, ~~2018,~~2019, we and CCLP had the following foreign currency derivative contracts outstanding relating to portions of our foreign operations:


Derivative Contracts	US Dollar Notional Amount		Traded Exchange Rate	Settlement Date	US Dollar Notional Amount		Traded Exchange Rate	Settlement Date
	(In Thousands)				(In Thousands)
Forward purchase Euro					$	7,245	1.14	6/19/2019
Forward sale Euro	$	1,117	1.24	4/18/2018	1,139		1.14	4/17/2019
Forward purchase pounds sterling	5,624		1.41	4/18/2018
Forward sale Canadian dollar	5,925		1.30	4/18/2018
Forward sale pounds sterling					1,329		1.33	4/17/2019
Forward purchase Mexican peso	1,653		18.76	4/18/2018	820		19.52	4/17/2019
Forward sale Norwegian krone	3,782		7.75	4/18/2018	527		8.53	4/17/2019
Forward sale Mexican peso	6,760		18.79	4/18/2018	6,301		19.52	4/17/2019



Derivative Contracts	British Pound Notional Amount	Traded Exchange Rate	Settlement Date
	(In Thousands)
Forward purchase Euro	1,535	0.85	4/17/2019



Derivative Contracts	Swedish Krona Notional Amount	Traded Exchange Rate	Settlement Date
	(In Thousands)
Forward sale Euro	14,041	10.40	4/17/2019

Under this program, we and CCLP may enter into similar derivative contracts from time to time. Although contracts pursuant to this program will serve as an economic hedge of the cash flow of our currency exchange risk exposure, they are not formally designated as hedge contracts or qualify for hedge accounting treatment. Accordingly, any change in the fair value of these derivative instruments during a period will be included in the determination of earnings for that period.

The fair values of foreign currency derivative instruments are based on quoted market values ~~as reported to us by our counterparty~~ (a ~~level~~Level 2 fair value measurement). The fair values of our and CCLP's foreign currency derivative instruments as of March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, are as follows:


Foreign currency derivative instruments	Foreign currency derivative instruments	Balance Sheet Location	Fair Value at March 31, 2018			Fair Value at December 31, 2017			Foreign currency derivative instruments	Balance Sheet Location	Fair Value at March 31, 2019			Fair Value at December 31, 2018
			(In Thousands)								(In Thousands)
Forward purchase contracts		Current assets	$	48		$	111			Current assets	$	27		$	41
Forward sale contracts		Current assets	56			130				Current assets	49			76
Forward sale contracts		Current liabilities	(259		)	(255		)		Current liabilities	(22		)	(126		)
Forward purchase contracts		Current liabilities	(6		)	(113		)		Current liabilities	(100		)	(168		)
Net asset (liability)			$	(161	)	$	(127	)			$	(46	)	$	(177	)

None of the foreign currency derivative contracts contain credit risk related contingent features that would require us to post assets or collateral for contracts that are classified as liabilities. During the three ~~month periods~~months ended March 31, ~~2018~~2019 and March 31, ~~2017,~~2018, we recognized ~~$28,000 and $0.7~~$0.6 million and $28,000 of net gains (losses), respectively, reflected in other (income) expense, net, associated with our foreign currency derivative program.

~~NOTE G – EQUITY~~

~~Changes in equity for the three month periods ended~~ A summary of these recurring fair value measurements by valuation hierarchy as of March 31, ~~2018~~2019 and ~~2017 are~~December 31, 2018, is as follows:



				Fair Value Measurements Using
	Total as of			Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	March 31, 2019			(Level 1)		(Level 2)			(Level 3)
	(In Thousands)
CCLP Series A Preferred Units	$	(18,278	)	$	—	$	—		$	(18,278	)
Warrants liability	(2,480		)	—		—			(2,480		)
Asset for foreign currency derivative contracts	75			—		75			—
Liability for foreign currency derivative contracts	(121		)	—		(121		)	—
Acquisition contingent consideration liability	(12,052		)	—		—			(12,052		)
Net liability	$	(32,856	)

Three Months Ended March 31,
2018 2017
TETRA Non-
controlling
Interest Total TETRA Non-
controlling
Interest Total
(In Thousands)
Beginning balance for the period $ 208,080
$ 144,481
$ 352,561
$ 233,523
$ 166,943
$ 400,466
Net income (loss) (53,648 ) (9,115 ) (62,763 ) (2,463 ) (8,789 ) (11,252 )
Foreign currency translation adjustment 1,668
(385 ) 1,283
2,052
141
2,193
Comprehensive Income (loss) (51,980 ) (9,500 ) (61,480 ) (411 ) (8,648 ) (9,059 )
Issuance of common stock, net 28,115
—
28,115
(11 ) —
(11 )
Conversions of CCLP Series A Preferred —
10,103
10,103
—
2,388
2,388
Distributions to public unitholders —
(4,358 ) (4,358 ) —
(7,248 ) (7,248 )
Equity-based compensation 1,434
(655 ) 779
1,513
956
2,469
Treasury stock and other (224 ) (35 ) (259 ) (36 ) (42 ) (78 )
Ending balance as of March 31 $ 185,425
$ 140,036
$ 325,461
$ 234,578
$ 154,349
$ 388,927



				Fair Value Measurements Using
	Total as of			Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs			Significant Unobservable Inputs
Description	December 31, 2018			(Level 1)		(Level 2)			(Level 3)
	(In Thousands)
CCLP Series A Preferred Units	$	(27,019	)	$	—	$	—		$	(27,019	)
Warrants liability	(2,073		)	—		—			(2,073		)
Asset for foreign currency derivative contracts	117			—		117			—
Liability for foreign currency derivative contracts	(294		)	—		(294		)	—
Acquisition contingent consideration liability	(12,452		)	—		—			(12,452		)
Net liability	$	(41,721	)

~~Activity within~~The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt pursuant to TETRA's ABL Credit Agreement and Term Credit Agreement, and the ~~foreign currency translation adjustment account during~~CCLP Credit Agreement approximate their carrying amounts. The fair values of the ~~periods includes no reclassifications~~publicly traded CCLP 7.25% Senior Notes at March 31, 2019 and December 31, 2018, were approximately $264.9 million and $266.3 million, respectively. Those fair values compare to ~~net income (loss).~~the face amount of $295.9 million both at March 31, 2019 and

December 31, 2018. The fair value of the publicly traded CCLP 7.50% Senior Secured Notes at March 31, 2019 and December 31, 2018 were approximately $336.0 million and $332.5 million, respectively. This fair value compares to aggregate principal amount of such notes at both March 31, 2019 and December 31, 2018, of $350.0 million. We based the fair values of the CCLP 7.25% Senior Notes and the CCLP 7.50% Senior Secured Notes as of March 31, 2019 on recent trades for these notes.

NOTE H – COMMITMENTS AND CONTINGENCIES

Litigation

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

~~On March 18, 2011, we filed a lawsuit in the Circuit Court~~Contingencies of Union County, Arkansas, asserting claims of professional negligence, breach of contract and other claims against the engineering firm we hired for engineering design, equipment, procurement, advisory, testing and startup services for our El Dorado, Arkansas chemical production facility. The engineering firm disputed our claims and promptly filed a motion to compel the matter to arbitration. After a lengthy procedural dispute in Arkansas state court, arbitration proceedings were initiated on November 15, 2013. Ultimately, on December 16, 2016, the arbitration panel ruled in our favor, declared us as the prevailing party, and awarded us a total net amount of $12.8 million. We received full payment of the $12.8 million final award on January 5, 2017, and this amount was credited to earnings in the accompanying consolidated statement of operations for the three months ended March 31, 2017.Discontinued Operations

~~Other Contingencies~~

During 2011, in connection with the sale of a significant majority of Maritech's oil and gas producing properties, the buyers of the properties assumed the associated decommissioning liabilities pursuant to the purchase and sale agreements. To the extent that a buyer of these properties fails to perform the abandonment and decommissioning work required, a previous owner, including Maritech, may be required to perform the abandonment and decommissioning obligation. As the former parent company of Maritech, we also may be responsible for performing these abandonment and decommissioning obligations. In March 2018, we closed the Maritech Asset Purchase Agreement with Orinoco Natural Resources, LLC ("Orinoco") that provided for the purchase by Orinoco of the Maritech Properties. Also in March 2018, we finalized the Maritech Equity Purchase Agreement with Orinoco that provided for the purchase by Orinoco of the Maritech Equity Interests. Pursuant to a bonding agreement as part of these transactions (the "Bonding Agreement"), Orinoco is required to replace, within 90 days following the closing, the initial bonds delivered at closing with non-revocable performance bonds, meeting certain requirements, in the aggregate sum of $47.0 million. Orinoco has not delivered such replacement bonds and we are seeking to enforce the terms of the Bonding Agreement. The non-revocable performance bonds delivered at the closing remain in effect. As a result of these transactions, we have effectively exited the businesses of our Offshore Services and Maritech segments and Orinoco ~~has~~ assumed all of Maritech's remaining abandonment and decommissioning obligations.

NOTE I – INDUSTRY SEGMENTS

~~Following the transactions closed during the three month period ended March 31, 2018, we reorganized our reporting segments and now~~We manage our operations through three Divisions: Completion Fluids & Products, Water & Flowback Services, and Compression. Our Completion Fluids & Products Division was previously reported as our Fluids Division, and included our water management services operations. Following the acquisition of SwiftWater in February 2018, our expanded water management operations are now included with our production testing operations as part of our Water & Flowback Services Division. The operations of our previous Offshore Division, consisting of our previous Offshore Services and Maritech, are now reported as discontinued operations following their disposal in March 2018.

~~Our~~ ~~Completion Fluids & Products Division~~ manufactures and markets clear brine fluids, additives, and associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations in the United States and in certain countries in Latin America, Europe, Asia, the Middle East, and Africa. The division also markets liquid and dry calcium chloride products manufactured at its production facilities or purchased from third-party suppliers to a variety of markets outside the energy industry.

~~Our~~ ~~Water & Flowback Services Division~~ provides domestic onshore oil and gas operators with comprehensive water management services. The division also provides frac flowback, production well testing, offshore rig cooling, and other associated services in many of the major oil and gas producing regions in the United States, Mexico, and Canada, as well as in basins in certain regions in South America, Africa, Europe, the Middle East, and Australia.

The Compression Division is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing, and storage. The Compression Division's equipment sales business includes the fabrication and sale of standard compressor packages, custom-designed compressor packages, and oilfield pump systems designed and fabricated at the division's facilities. The Compression Division's aftermarket services business provides compressor package reconfiguration and maintenance services as well as

providing compressor package parts and components manufactured by third-party suppliers. The Compression Division provides its services and equipment to a broad base of natural gas and oil exploration and production, midstream, transmission, and storage companies operating throughout many of the onshore producing regions of the United States as well as in a number of foreign countries, including Mexico, Canada, and Argentina.

We generally evaluate the performance of and allocate resources to our segments based on profit or loss from their operations before income taxes and nonrecurring charges, return on investment, and other criteria. Transfers between segments and geographic areas are priced at the estimated fair value of the products or services as negotiated between the operating units. “Corporate overhead” includes corporate general and administrative expenses, corporate depreciation and amortization, interest income and expense, and other income and expense.

Summarized financial information concerning the business segments is as follows:

Three Months Ended
March 31,
2018 2017
(In Thousands)
Revenues from external customers

Product sales

Completion Fluids & Products Division $ 51,057
$ 52,211
Water & Flowback Services Division 1,250
6,113
Compression Division 23,646
9,654
Consolidated $ 75,953
$ 67,978

Services

Completion Fluids & Products Division $ 2,049
$ 4,016
Water & Flowback Services Division 59,603
31,510
Compression Division 61,776
55,905
Consolidated $ 123,428
$ 91,431

Interdivision revenues

Completion Fluids & Products Division $ (2 ) $ 1
Water & Flowback Services Division 222
556
Compression Division —
—
Interdivision eliminations (220 ) (557 )
Consolidated $ —
$ —

Total revenues

Completion Fluids & Products Division $ 53,104
$ 56,228
Water & Flowback Services Division 61,075
38,179
Compression Division 85,422
65,559
Interdivision eliminations (220 ) (557 )
Consolidated $ 199,381
$ 159,409

Income (loss) before taxes

Completion Fluids & Products Division $ 2,449
$ 19,473
Water & Flowback Services Division 6,548
(1,265 )
Compression Division (14,018 ) (14,333 )
Interdivision eliminations —
(167 )
Corporate Overhead⁽¹⁾
(14,912 ) (7,872 )
Consolidated $ (19,933 ) $ (4,164 )


	March 31, 2018			December 31, 2017			Three Months Ended March 31,
	(In Thousands)						2019			2018
Total assets
							(In Thousands)
Revenues from external customers
Product sales
Completion Fluids & Products Division	$	303,157		$	293,507		$	57,328		$	51,057
Water & Flowback Services Division	224,570			139,771			364			1,250
Compression Division	895,979			784,745			34,089			23,646
Corporate Overhead and eliminations	(23,351		)	(30,501		)
Assets of discontinued operations	7,907			121,092
Consolidated	$	1,408,262		$	1,308,614		$	91,781		$	75,953

Services
Completion Fluids & Products Division							$	4,253		$	2,049
Water & Flowback Services Division							78,314			59,603
Compression Division							69,380			61,776
Consolidated							$	151,947		$	123,428

Interdivision revenues
Completion Fluids & Products Division							$	—		$	(2	)
Water & Flowback Services Division							—			222
Compression Division							—			—
Interdivision eliminations							—			(220		)
Consolidated							$	—		$	—

Total revenues
Completion Fluids & Products Division							$	61,581		$	53,104
Water & Flowback Services Division							78,678			61,075
Compression Division							103,469			85,422
Interdivision eliminations							—			(220		)
Consolidated							$	243,728		$	199,381

Income (loss) before taxes
Completion Fluids & Products Division							$	6,186		$	2,449
Water & Flowback Services Division							2,231			6,548
Compression Division							(7,801		)	(14,018		)
Interdivision eliminations							6			—
Corporate Overhead⁽¹⁾							(17,687		)	(14,912		)
Consolidated							$	(17,065	)	$	(19,933	)


(1)	Amounts reflected include the following general corporate expenses:

Three Months Ended
March 31,
2018 2017
(In Thousands)
General and administrative expense $ 12,598
$ 9,555
Depreciation and amortization 151
91
Interest expense 4,007
3,774
Warrants fair value adjustment (1,994 ) (5,976 )
Other general corporate (income) expense, net 150
428
Total $ 14,912
$ 7,872



	Three Months Ended March 31,
	2019			2018
	(In Thousands)
General and administrative expense	$	12,089		$	12,598
Depreciation and amortization	168			151
Interest expense	5,342			4,007
Warrants fair value adjustment (income) expense	407			(1,994		)
Other general corporate (income) expense, net	(319		)	150
Total	$	17,687		$	14,912

NOTE J – REVENUE FROM CONTRACTS WITH CUSTOMERS

Performance Obligations. Revenue is generally recognized when ~~performance obligations under the terms of a contract with our customer are satisfied. Generally this occurs with the~~we transfer of control of our products or services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or providing services to our customers. ~~For a general discussion of the nature of the goods and services that we provide, see Note I - Industry Segments.~~

Product Sales. Product sales revenues are generally recognized ~~at a point in time when we transfer control of our product offerings to our customers, generally~~ when we ship products from our facility to our customer. The product sales for our Completion Fluid & Products Division consist primarily of clear brine fluids ("CBFs"), additives, and associated manufactured products. Product sales for our Water & Flowback Services Division are typically attributed to specific performance obligations within certain production testing service arrangements. Parts and equipment sales comprise the product sales for the Compression Division.

Services. Service revenues represent revenue recognized over time, as our customer arrangements typically provide agreed upon day-rates (monthly service rates for compression services) and we recognize service revenue based upon the number of days services have been performed. Service revenue recognized over time is associated with a majority of our Water & Flowback Services Division arrangements, compression service and aftermarket service contracts within our Compression Division, and a small portion of Completion Fluids & Products Division revenue that is associated with completion fluid service arrangements. With the exception of the initial terms of the compression services contracts for medium- and high-horsepower compressor packages of our Compression Division, our customer contracts are generally for terms of one year or less. The majority of the service arrangements in the Water & Flowback Services Division are for a period of 90 days or less. Within our Compression Division service revenue, most aftermarket service revenues are recognized at a point in time when we transfer control of our products and complete the delivery of services to our customers.

We receive cash equal to the invoice price for most product sales and services and payment terms typically range from 30 to 60 days from the date we invoice our customer. Since the period between when we deliver products or services and when the customer pays for products or services are not expected to exceed one year, we have elected not to calculate or disclose a financing component for our customer contracts.

Depending on the terms of the arrangement, we may also defer the recognition of revenue for a portion of the consideration received because we have to satisfy a future performance obligation. For example, consideration received from customers during the fabrication of new compressor packages is typically deferred until control of the compressor package is transferred to our customer. For any arrangements with multiple performance obligations, we use management's estimated selling price to determine the stand-alone selling price for separate performance obligations. For revenue associated with mobilization of service equipment as part of a service contract arrangement, such revenue, if significant, is deferred and amortized over the estimated service period. As of March 31, ~~2018,~~2019, we had ~~$6.6~~$24.6 million of remaining performance obligations related to our compression service contracts. As a practical expedient, this amount does not reflect revenue for compression service contracts whose original expected duration is less than 12 months andand does not consider the effects of the time value of ~~money~~money. T~~. The~~he remaining performance obligations are expected to be recognized through 2022 as follows (in thousands):

2018 2019 2020 2021 2022 Total
(In Thousands)
Compression service contracts remaining performance obligations $ 1,732
$ 1,929
$ 1,740
$ 702
$ 546
$ 6,649



	2019		2020		2021		2022		2023		Total
	(In Thousands)
Compression service contracts remaining performance obligations	$	10,444	$	9,851	$	4,240	$	32	$	—	$	24,567

Sales taxes, value added taxes, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. We have elected to recognize the cost for freight and shipping costs as part of cost of product sales when control over our products (i.e. delivery) has transferred to the customer.

Use of Estimates. C~~ontracts where the amount of revenue that will ultimately be realized is subject to uncertainties not fully known as of the time revenue is recognized are known as variable consideration arrangements.~~ In recognizing revenue for ~~these~~variable consideration arrangements, the amount of variable consideration recognized is limited so that it is probable that significant amounts of revenues will not be reversed in future periods when the

uncertainty is resolved. For products returned by the customer, we estimate the expected returns based on an analysis of historical experience. For volume discounts earned by the customer, we estimate the discount (if any) based on our estimate of the total expected volume of products sold or services to be provided to the customer during the discount period. In certain contracts for the sale of ~~clear brine fluids,~~CBF, we may agree to issue credits for the repurchase of reclaimable used fluids from certain customers at an agreed price that is based on the condition of the fluids. For sales of ~~clear brine fluids,~~CBF, we adjust the revenue recognized in the period of shipment by the estimated amount of the credit expected to be issued to the customer, and this estimate is based on historical

experience. As of March 31, ~~2018 and December 31, 2017,~~2019, the amount of remaining credits expected to be issued for the repurchase of reclaimable used fluids was ~~$0.6~~$1.1 million ~~and $2.8 million, respectively, that~~ that were recorded in inventory (right of return asset) and accounts payable. ~~For~~There were no material differences between amounts recognized during the three month period ended March 31, ~~2018, there were no material differences between amounts recognized~~2019, compared to estimates made in a prior period from these variable consideration arrangements.

Contract Assets and Liabilities. Contract assets arise when we transfer products or perform services in fulfillment of a contract obligation but must perform other performance obligations before being entitled to payment. Generally, once we have transferred products or performed services for the customer pursuant to a contract, we recognize revenue and trade accounts receivable, as we are entitled to payment that is unconditional. Any contract assets, along with billed and unbilled accounts receivable, are included in ~~Trade Accounts Receivable~~trade accounts receivable in our consolidated balance sheets. Contract liabilities arise when we receive consideration, or consideration is unconditionally due, from a customer prior to transferring products or services to the customer under the terms of a sales contract. We classify contract liabilities as ~~Deferred Revenue~~Unearned Income in our consolidated balance sheets. Such deferred revenue typically results from advance payments received on ~~sales of~~orders for new compressor equipment prior to ~~when it~~the time such equipment is completed and transferred to the customer in accordance with the customer contract.

As of March 31, ~~2018~~2019 and December 31, ~~2017,~~2018, contract assets were immaterial. The following table reflects the changes in our contract liabilities during the three month period ended March 31, ~~2018:~~2019:

March 31, 2018 December 31, 2017 Increase (Decrease)
(In Thousands)
Contract liabilities
Deferred revenue $ 35,929
$ 17,050
$ 18,879



	March 31, 2019
	(In Thousands)
Unearned Income, beginning of period	$	25,333
Additional unearned income	49,363
Revenue recognized	(24,858		)
Unearned income, end of period	$	49,838

~~Bad debt expense on accounts receivables and contract assets was $0.2 million~~ ~~and $0.6 million during~~During the three month ~~periods~~period ended March 31, ~~2018 and 2017, respectively. During the three months ended March 31, 2018,~~2019, contract liabilities increased due to ~~deferred revenue~~unearned income for consideration received on new compressor equipment being fabricated. During the three ~~months~~month period ended March 31, ~~2018,~~2019, ~~$17.8~~$24.9 million of ~~deferred revenue as of December 31, 2017~~unearned income was recognized as product sales revenue, primarily associated with deliveries of new compression equipment.

Contract Costs. When costs are incurred to obtain contracts, such as professional fees and sales bonuses, such costs are deferred and amortized over the expected period of benefit. Costs of mobilizing service equipment necessary to perform under service contracts, if significant, are deferred and amortized over the estimated service period, which is generally a few weeks. As of March 31, 2019 and March 31, 2018, ~~such~~ contract costs were immaterial. Where applicable, we establish provisions for estimated obligations pursuant to product warranties by accruing for estimated future product warranty cost in the period of the product sale. Such estimates are based on historical warranty loss experience. Major components of fabricated compressor packages have manufacturer warranties that we pass through to the customer.

Disaggregation of Revenue. We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our three reportable segments in Note I. In addition, we disaggregate revenue from contracts with customers by geography based on the following table below.



	Three months ended March 31,
	2019		2018
	(In Thousands)
Completion Fluids & Products
U.S.	$	31,606	$	27,909
International	29,975		25,195
	61,581		53,104
Water & Flowback Services
U.S.	73,199		47,038
International	5,479		14,037
	78,678		61,075
Compression
U.S.	93,517		76,980
International	9,952		8,442
	103,469		85,422
Interdivision eliminations
U.S.	—		2
International	—		(222		)
	—		(220		)
Total Revenue
U.S.	198,322		151,929
International	45,406		47,452
	$	243,728	$	199,381

NOTE K – LEASES

We have operating leases for some of our transportation equipment, office space, warehouse space, operating locations, and machinery and equipment. We have finance leases for certain storage tanks and equipment rentals. Our leases have remaining lease terms ranging from 1 to 16 years. Some of our leases have options to extend for various periods, while some have termination options with prior notice of generally 30 days or six months. The office space, warehouse space, operating location leases, and machinery and equipment leases generally require us to pay all maintenance and insurance costs. We do not have leases that have not yet commenced that create significant rights and obligations. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Variable rent expense was not material.

Our corporate headquarters facility located in The Woodlands, Texas, was sold on December 31, 2012, pursuant to a sale and leaseback transaction. As a condition to the consummation of the purchase and sale of the facility, the parties entered into a lease agreement for the facility having an initial lease term of 15 years, which is classified as an operating lease. Under the terms of the lease agreement, we have the ability to extend the lease for five successive five year periods at base rental rates to be determined at the time of each extension.

Components of lease expense, included in either cost of revenues or general and administrative expense based on the use of the underlying asset, are as follows (inclusive of lease expense for leases not included on our consolidated balance sheet based on our accounting policy election to exclude leases with a term of 12 months or less):



	Three Months Ended March 31, 2019
	(In Thousands)
Operating lease expense	$	5,044
Short-term lease expense	11,161
Finance lease cost:
Accumulated depreciation	31
Interest on lease liabilities	3
Total lease expense	$	16,239

Supplemental cash flow information:



	Three Months Ended March 31, 2019
	(In Thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	4,657
Financing cash flows - finance leases	$	43
Operating cash flows - finance leases	$	3

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	3,257
Finance leases	$	—

Supplemental balance sheet information:

March 31, 2018 March 31, 2017
(In Thousands)
Completion Fluids & Products
U.S. 27,909
40,802
International 25,195
15,426
53,104
56,228
Water & Flowback Services
U.S. 47,038
24,140
International 14,037
14,039
61,075
38,179
Compression
U.S. 76,980
57,968
International 8,442
7,591
85,422
65,559
Interdivision eliminations
U.S. 2
(1 )
International (222 ) (556 )
(220 ) (557 )
Total Revenue
U.S. 151,929
122,909
International 47,452
36,500
199,381
159,409



	March 31, 2019
	(In Thousands)
Operating leases:
Operating lease right-of-use assets	$	60,149

Accrued liabilities and other	$	12,659
Operating lease liabilities	49,632
Total operating lease liabilities	$	62,291

Finance leases:
Property, plant and equipment	$	875
Accumulated depreciation	(664		)
Net property, plant and equipment	$	211

Accrued liabilities and other	$	147
Other liabilities	48
Total finance lease liabilities	$	195

Additional operating and finance lease information:



	March 31, 2019
Weighted average remaining lease term:
Operating leases	7 years
Finance leases	1 year

Weighted average discount rate:
Operating leases	9.37	%
Finance leases	5.80	%

Future minimum lease payments by year and in the aggregate, under non-cancelable finance and operating leases with terms in excess of one year consist of the following at March 31, 2019:



	Finance Leases			Operating Leases
	(In Thousands)

2019	$	148		$	13,350
2020	33			15,536
2021	17			11,488
2022	—			9,009
2023	—			7,770
Thereafter	—			29,351
Total lease payments	198			86,504
Less imputed interest	(3		)	(24,213		)
Total lease liabilities	$	195		$	62,291

At March 31, 2019, future minimum rental receipts under a non-cancelable sublease for office space in one of our locations totaled $6.1 million. For the three months ended March 31, 2019, we recognized sublease income of $0.2 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and accompanying notes included in this Quarterly Report. In addition, the following discussion and analysis also should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 filed with the SEC on March ~~5, 2018.~~4, 2019 ("2018 Annual Report"). This discussion includes forward-looking statements that involve certain risks and uncertainties.

Business Overview

~~Significant strategic transactions that closed~~The growth in revenues for each of our divisions during the ~~first quarter~~three months ended March 31, 2019, resulted in consolidated revenues increasing 22.2% compared to the corresponding prior year quarter. Our Water & Flowback Services Division reported a 28.8% growth in revenues, primarily due to the impact of 2018 ~~have positioned us to further capitalize on~~acquisition activity, including the ~~current increased level of oil and gas industry activity. Following~~impact from the February ~~28,~~ 2018 acquisition of SwiftWater Energy Services, LLC ("SwiftWater"), ~~we have enhanced and expanded our position~~ ~~as one of the leading integrated water management companies, providing water transfer, storage, and treatment services,~~ along with ~~proprietary automation technology~~growth in our existing operations. Our Compression Division also reported strong growth, as continued high demand for compression equipment and ~~numerous other water-related services. The acquisition of SwiftWater, which serves the key Permian Basin market~~services, reflected by a strong new equipment sales backlog and increased compression fleet utilization, resulted in ~~Texas, has begun to contribute significantly~~a 21.1% increase in Compression Division revenues compared to the prior year quarter. Our Completion Fluids & Products Division also reported increased revenues, a 16.0% increase compared to the prior year quarter, primarily due to increased international CBF product sales. Demand for many of our products and services remains strong despite continued volatility in pricing for oil, which affects the plans of many of our oil and gas operations customers. Consolidated gross profit increased, primarily due to improved Compression Division profitability, and despite continuing pricing and operating ~~cash flows of~~cost challenges in certain markets for our Water & Flowback Services ~~Division. The total purchase price for SwiftWater consisted of $42.0 million of cash~~Division and 7.7 million shares of newly issued common stock, as well as contingent consideration of up to $15.0 million depending on operating results. On March 22, 2018, our CSI Compressco LP subsidiary ("CCLP") issued $350 million aggregate principal amount of CCLP 7.50% Senior Secured First Lien Notes due 2025 (the "CCLP Senior Secured Notes"), which generated $344.1 million of net proceeds, a portion of which was used to repay the borrowings outstanding under CCLP's bank revolving credit facility (the "CCLP Credit Agreement"), which was then terminated. Following the repayment of this credit agreement, the remaining proceeds from the issuance of the CCLP Senior Secured Notes are available to fund additional Compression Division capital expenditures to further grow its compression equipment fleet. Also, on March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division. As a result of this disposition, we have effectively exited the businesses of our Offshore Services and Maritech segments, and the buyer has assumed all liabilities and obligations associated with Maritech, including but not limited to all currently identified and any future identified decommissioning obligations.

~~Following the above transactions, we reorganized our reporting segments and now manage our operations through three Divisions:~~ Completion Fluids & Products ~~Water & Flowback Services,~~Division. Consolidated increases in interest expense and ~~Compression. Our~~

~~Completion Fluids & Products Division was previously reported as our Fluids Division,~~general and ~~included our water management services operations. Following~~administrative costs, attributed to the ~~acquisition of SwiftWater, our expanded water management~~overall growth in operations, are now included with our production testing operations as part of our Water & Flowback Services Division. The operations of our previous Offshore Services and Maritech segments are now reported as discontinued operations following their disposal in March 2018, and prior period financial information retroactively excludes their operating results from our continuing operations.

~~Consolidated revenues~~partially offset the improved profitability during the three months ended March 31, ~~2018 increased approximately 25%~~2019 compared to the ~~corresponding~~ prior year ~~period, primarily due~~quarter.

Funding for the expected continuing growth in our operations remains a key focus. Consolidated capital expenditures and consolidated cash provided by operating activities during the three months ended March 31, 2019 both increased compared to ~~increased revenues~~the prior year quarter. Following the financing restructuring transactions completed during 2018, we have capacity under our term credit agreement (the “Term Credit Agreement”) and our asset-based lending credit agreement (the “ABL Credit Agreement”) to fund our growth capital expenditure plans, as well as potential acquisition transactions. These growth plans, particularly of our Water & Flowback Services Division, are designed to enable us to capitalize on the current demand for domestic onshore services that support hydraulic fracturing in unconventional oil and gas reservoirs. In addition, our Compression ~~Division. With~~Division, through the ~~increase in crude oil prices in early 2018, operating plans and~~separate capital ~~expenditure levels of many~~structure of our ~~oil and natural gas customers have increased, benefiting certain of our operating segments with improved revenues and cash flows. In addition~~CSI Compressco LP ("CCLP") subsidiary, expects to reflecting one month of impact from the February 28, 2018 SwiftWater acquisition, our Water & Flowback Services Division benefited from increased activity levels in several of its markets, as a result of increased domestic rig count levels and improved customer contract pricing. Compression Division revenues also improved, with increased revenuesfund additional 2019 growth capital expenditures for ~~compression equipment product sales and increased~~new compression services ~~revenues from the increased utilization~~equipment through $16.9 million of ~~its~~currently available cash as of March 31, 2019, expected operating cash flows, and through up to $15.0 million of new compression ~~fleet. The increases in Water & Flowback Services~~services equipment to be purchased by us, and Compression revenues were partially offset by decreased Completion Fluids & Products revenues, as offshore activity levels remain challenged. The increased revenues resulted in improved consolidated gross profit comparedleased to ~~the corresponding prior year period, despite the increased costs from the acquired SwiftWater operations and overall increased activity.~~

~~In addition~~CCLP. These sources are expected to ~~the acquisition of SwiftWater, we also are continuing~~enable CCLP to ~~grow our operations through increased capital expenditure activity. Our Compression Division increased~~meet its growth capital expenditure ~~levels during~~requirements without having to access available borrowings under its credit agreement (the "CCLP Credit Agreement") and without having to access the first quarter of 2018 compared to the corresponding prior year period, as it increased its compression equipment fleet to meet the increasing customer demand for compression services. In addition, we have also increased capital expenditure levels, particularly in our Water & Flowback Services Division, as we selectively grow our capacity in certain markets. Cash provided by operating activities is expected to increase going forward, reflecting the increased revenues and earnings of our businesses. While significant borrowing capacity remains under our bank credit facility, we and CCLP also continue to consider additional sources of capital, including issuances of additional long-termcurrent debt and equity markets. We and ~~as it relates~~CCLP are aggressively managing our working capital and capital expenditure needs in order to ~~CCLP,~~maximize our liquidity in the ~~establishment~~current environment. The earliest maturity date of ~~a revolving credit facility.~~our long-term debt is September 2023 and the earliest maturity date of CCLP's long-term debt is August 2022.

Approximately ~~$632.4~~$633.7 million of our consolidated debt balance carrying value is owed by CCLP, serviced by CCLP's existing cash balances and cash provided by CCLP's operations (less its capital expenditures), and ~~$343.8~~$343.5 million of which is secured by certain assets of CCLP. The following table provides condensed consolidating balance sheet information reflecting ~~our~~TETRA's net assets and CCLP's net assets that service and secure ~~our~~TETRA's and CCLP's respective capital structures.

March 31, 2018
Condensed Consolidating Balance Sheet TETRA CCLP Eliminations Consolidated
(In Thousands)
Cash, excluding restricted cash $ 14,013
$ 90,100
$ —
$ 104,113
Affiliate receivables 11,630
—
(11,630 ) —
Other current assets 222,104
120,586
—
342,690
Property, plant and equipment, net 215,062
609,706
—
824,768
Other assets, including investment in CCLP 53,121
33,549
50,021
136,691
Total assets $ 515,930
$ 853,941
$ 38,391
$ 1,408,262

Affiliate payables $ —
$ 11,630
$ (11,630 ) $ —
Other current liabilities 93,550
64,211
—
157,761
Long-term debt, net 191,151
632,414
—
823,565
CCLP Series A Preferred Units

—
62,000
(7,786 ) 54,214
Warrants liability 11,207
—
—
11,207
Other non-current liabilities 34,597
1,457
—
36,054
Total equity 185,425
82,229
57,807
325,461
Total liabilities and equity $ 515,930
$ 853,941
$ 38,391
$ 1,408,262

Cash used by operating activities for the three months ended March 31, 2018 was $31.3 million compared to $20.5 million for the three months ended March 31, 2017, an increase of $10.7 million, or 52.2%, despite improved operating profitability, primarily due to cash utilized due to timing of payments of accounts payable. Consolidated capital expenditures were $28.9 million during the three months ended March 31, 2018, and included $17.0 million of capital expenditures by our Compression Division, primarily for growth capital expenditures. Corresponding prior year period consolidated capital expenditures, net of sales proceeds, were $5.1 million, including $7.2 million by our Compression Division. Although our capital expenditure levels are expected to increase going forward, we continue to defer or reduce capital expenditure projects where possible in order to conserve cash. Key objectives associated with our capital structure (excluding the capital structure of CCLP) include the ongoing management of amounts outstanding and available under our bank revolving credit facility and repayment of our 11% Senior Note. CCLP also continues to carefully monitor its 2018 capital expenditure program in order to conserve its cash. During the first three months of 2018, we received $3.0 million from CCLP as our share of CCLP common unit distributions.



	March 31, 2019
Condensed Consolidating Balance Sheet	TETRA		CCLP		Eliminations			Consolidated
	(In Thousands)
Cash, excluding restricted cash	$	19,998	$	16,870	$	—		$	36,868
Affiliate receivables	9,856		—		(9,856		)	—
Other current assets	233,774		139,651		—			373,425
Property, plant and equipment, net	210,898		650,051		—			860,949
Long-term affiliate receivables	2,402		—		(2,402		)	—
Other assets, including investment in CCLP	71,750		43,297		73,236			188,283
Total assets	$	548,678	$	849,869	$	60,978		$	1,459,525

Affiliate payables	$	—	$	9,856	$	(9,856	)	$	—
Other current liabilities	102,643		116,595		—			219,238
Long-term debt, net	212,151		633,692		—			845,843
CCLP Series A Preferred Units	—		20,890		(2,612		)	18,278
Warrants liability	2,480		—		—			2,480
Long-term affiliate payable	—		2,402		(2,402		)	—
Other non-current liabilities	65,176		8,400		—			73,576
Total equity	166,228		58,034		75,848			300,110
Total liabilities and equity	$	548,678	$	849,869	$	60,978		$	1,459,525

Critical Accounting Policies

There have been no material changes or developments in the evaluation of the accounting estimates and

the underlying assumptions or methodologies pertaining to our Critical Accounting Policies and Estimates disclosed

in our 2018 Annual Report. In preparing our consolidated financial statements, we make assumptions, estimates, and judgments that affect the amounts reported. ~~We base these estimates on historical experience, available information, and various other assumptions that we believe are reasonable.~~We periodically evaluate these estimates and judgments, including those related to potential impairments of long-lived assets (including goodwill), the collectability of accounts receivable, the current cost of future asset retirement obligations, and the allocation of acquisition purchase price. The fair values of portions of our total assets and liabilities are measured using significant unobservable inputs. The combination of these factors forms the basis for judgments made about the carrying values of assets and liabilities that are not readily apparent from other sources. These judgments and estimates may change as new events occur, as new information is acquired, and as changes in our operating environments are encountered. Actual results are likely to differ from our current estimates, and those differences may be material.

~~Acquisition Purchase Price Allocations~~

We account for acquisitions of businesses using the purchase method, which requires the allocation of the purchase price based on the fair values of the assets and liabilities acquired. We estimate the fair values of the assets and liabilities acquired using accepted valuation methods, and, in many cases, such estimates are based on our judgments as to the future operating cash flows expected to be generated from the acquired assets throughout their estimated useful lives.Following the February 28, 2018 acquisition of SwiftWater, we have accounted for the various assets (including intangible assets) and liabilities acquired based on our estimate of their fair values. Goodwill represents the excess of acquisition purchase price over the estimated fair values of the net assets acquired. Our estimates and judgments of the fair value of acquired businesses are imprecise, and the use of inaccurate fair value estimates could result in the improper allocation of the acquisition purchase price to acquired assets and liabilities, which could result in asset impairments,~~the~~recording of previously unrecorded liabilities, and other financial statement adjustments. The difficulty in estimating the fair values of acquired assets and liabilities is increased during periods of economic uncertainty.

Results of Operations

Three months ended March 31, ~~2018~~2019 compared with three months ended March 31, ~~2017~~.2018.

Consolidated Comparisons


	Three Months Ended March 31,						Period to Period Change					Three Months Ended March 31,						Period to Period Change
	2018			2017			2018 vs 2017			% Change		2019			2018			2019 vs 2018			% Change
	(In Thousands, Except Percentages)											(In Thousands, Except Percentages)
Revenues	$	199,381		$	159,409		$	39,972		25.1	%	$	243,728		$	199,381		$	44,347		22.2	%
Gross profit	27,983			19,654			8,329			42.4	%	36,210			27,983			8,227			29.4	%
Gross profit as a percentage of revenue	14.0		%	12.3		%						14.9		%	14.0		%
General and administrative expense	30,803			26,751			4,052			15.1	%	34,277			30,803			3,474			11.3	%
General and administrative expense as a percentage of revenue	15.4		%	16.8		%						14.1		%	15.4		%
Interest expense, net	14,973			13,767			1,206			8.8	%	18,379			14,973			3,406			22.7	%
Warrants fair value adjustment	(1,994		)	(5,976		)	3,982
CCLP Series A Preferred Units fair value adjustment	1,358			1,631			(273		)
Litigation arbitration award income	—			(12,816		)	12,816
Warrants fair value adjustment (income) expense												407			(1,994		)	2,401
CCLP Series A Preferred Units fair value adjustment (income) expense												1,163			1,358			(195		)
Other (income) expense, net	2,776			461			2,315					(951		)	2,776			(3,727		)
Loss before taxes and discontinued operations	(19,933		)	(4,164		)	(15,769		)			(17,065		)	(19,933		)	2,868			14.4	%
Loss before taxes and discontinued operations as a percentage of revenue	(10.0		)%	(2.6		)%						(7.0		)%	(10.0		)%
Provision for income taxes	1,124			81			1,043					1,609			1,124			485
Loss before discontinued operations	(21,057		)	(4,245		)	(16,812		)			(18,674		)	(21,057		)	2,383
Discontinued operations:
Loss from discontinued operations (including 2018 loss on disposal of $31.5 million), net of taxes	(41,706		)	(7,007		)	(34,699		)			(426		)	(41,706		)	41,280
Net loss	(62,763		)	(11,252		)	(51,511		)			(19,100		)	(62,763		)	43,663
Loss attributable to noncontrolling interest	9,115			8,789			326					8,262			9,115			(853		)
Loss attributable to TETRA stockholders	$	(53,648	)	$	(2,463	)	$	(51,185	)
Net loss attributable to TETRA stockholders												$	(10,838	)	$	(53,648	)	$	42,810

Consolidated revenues ~~during~~for the ~~current year~~first quarter of 2019 increased compared to the prior year quarter, primarily due to ~~a $22.9 million increase in~~increased Compression Division and Water & Flowback Services Division ~~revenues.~~revenues, which increased by $18.0 millionand $17.6 million, respectively. Our Compression Division reported increased revenues of $18.0 million, primarily due to increased new compressor equipment sales activity. The increase in Water & Flowback Services Division revenues was primarily driven by increased activity in certain domestic and international markets and the impact of a full quarter of SwiftWater, which was acquired on February 28, ~~2018 acquisition of SwiftWater.~~2018. Our ~~Compression~~Completion Fluids & Products Division also reported increased revenues, ~~of $19.9 million,~~ primarily due to increased ~~compressor equipment sales activity.~~international product sales. See Divisional Comparisons section below for additional discussion.

Consolidated gross profit increased during the current year quarter compared to the prior year quarter primarily due to the increased revenues of our Compression Division and our Completion Fluids & Products Division. The increased gross profit from these divisions more than offset the lower gross profit of our Water & Flowback Services Division, which experienced increased costs and ~~Compression Division.~~challenging customer pricing in competitive markets compared to the prior year quarter. Despite the improvement in ~~the~~ activity levels of certain of our businesses, offshore U.S. Gulf of Mexico activity levels remain flat and the impact of pricing pressures continues to ~~impact profitability.~~challenge profitability in certain onshore markets. Operating expenses reflect the increase in consolidated revenues, although we remain aggressive in managing operating costs and minimizing increased headcount, despite the increased operations.

Consolidated general and administrative expenses increased during the ~~first~~current year quarter ~~of 2018~~ compared to the prior year quarter, primarily due to ~~increased professional services fees of $2.1 million (including $0.9~~$3.9 million of ~~corporate transaction costs),~~ increased salary related expenses and ~~employee expenses~~$0.3 million of ~~$1.0 million, as well as~~ increased insurance and other general expenses, partially offset by $0.6 million of ~~$0.9 million.~~decreased professional services fees, and $0.2 million of decreased consulting and other expenses. Increased general and administrative expenses were driven primarily by our Compression and Water & Flowback Services Divisions. Due to the increased consolidated revenues discussed above, general and administrative expense as a percentage of revenues decreased compared to the prior year period.

Consolidated interest expense, net, increased ~~during~~in the ~~first quarter of 2018 compared to the prior~~current year quarter primarily due to Compression Division interest expense. Compression Division interest expense increased due to ~~the~~higher CCLP outstanding debt balances and a higher interest rate on the CCLP Senior Secured Notes, a portion of the proceeds of which were used to repay the balance outstanding under the previous CCLP bank credit facility. Corporate interest expense also increased due to higher outstanding debt balances under the TETRA Term Credit Agreement and ~~is expected to remain increased compared to prior year periods.~~ABL Credit Agreement. Interest expense during ~~the~~2019 and 2018 ~~and 2017 periods~~ includes ~~$1.2~~$1.0 million and ~~$1.1~~$1.2 million, respectively, of finance cost amortization.

The Warrants are accounted for as a derivative liability in accordance with Accounting Standards Codification ("ASC") 815 and therefore they are classified as a long-term liability on our consolidated balance sheet at their fair value. Increases (or decreases) in the fair value of the Warrants are generally associated with increases (or decreases) in the trading price of our common stock, resulting in adjustments to earnings for the associated valuation losses (gains), and resulting in future volatility of our earnings during the period the Warrants are outstanding.

The CCLP Preferred Units may be settled using a variable number of CCLP common units, and therefore the fair value of the CCLP Preferred Units is classified as a long-term liability on our consolidated balance sheet in accordance with ASC 480. Because the CCLP Preferred Units are convertible into CCLP common units at the option of the holder, the fair value of the CCLP Preferred Units will generally increase or decrease with the trading price of the CCLP common units, and this increase (decrease) in CCLP Preferred Unit fair value will be charged (credited) to earnings, as appropriate, resulting in future volatility of our earnings during the period the CCLP Preferred Units are outstanding.

In January 2017, our Completion Fluids & Products Division collected $12.8 million from a legal arbitration award, resulting in a credit to earnings. See Commitments and Contingencies - Litigation section below for additional discussion.

Consolidated other (income) expense, net, was ~~$2.8~~$1.0 million of ~~other expense~~income during the current year quarter compared to ~~$0.5~~$2.8 million of ~~other~~ expense during the prior year quarter, primarily due to $3.5 million of increased expense related to the unamortized deferred financing costs charged to earnings during the prior year quarter as a result of the termination of the CCLP Bank Credit ~~Agreement.~~Facility. In addition, other income during the current year period includes $0.4 million associated with the remeasurement of the contingent purchase price consideration for the SwiftWater acquisition.

Our consolidated provision for income taxes during the first ~~quarter~~three months of ~~2018~~2019 is primarily attributable to taxes in certain foreign jurisdictions and Texas gross margin taxes. Our consolidated effective tax rate for the three month period ended March 31, 2019 and March 31, 2018 of negative 9.4% and negative 5.6%, respectively, was primarily the result of losses generated in entities for which no related tax benefit has been recorded. The losses generated by these entities do not result in tax benefits due to offsetting valuation allowances being recorded against the related net deferred tax assets. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in our deferred tax assets are net operating loss carryforwards and tax credits that are available to offset future income tax liabilities in the U.S. as well as in certain foreign jurisdictions.

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. At March 31, 2018 and December 31, 2017, we had not completed our accounting for the tax effects of enactment of the Act; however, in certain cases, as described below, we made reasonable estimates of the effects and recorded provisional amounts. We will continue to make and refine our calculations as additional analysis is completed. We recognized an income tax expense of $54.1 million in the fourth quarter of 2017 associated with the impact of the Act in our 2017 filing. This income tax expense was fully offset by a decrease in the valuation allowance previously recorded on our net deferred tax assets. As such, the Act resulted in no net tax expense in the fourth quarter of 2017. We have considered in our estimated annual effective tax rate for 2018, the impact of the statutory changes enacted by the Act, including reasonable estimates of those provisions effective for the 2018 tax year. Our provisional estimate on Global Intangible Low Taxed Income (“GILTI”), Foreign Derived Intangible Income (“FDII”), Base Erosion and Anti-Abuse Tax (“BEAT”), and IRC Section 163(j) interest limitation do not impact our effective tax rate for the three months ended March 31, 2018. The accounting for the tax effects of the Act will be completed in 2018 as provided by the U.S. Securities and Exchange Commission’s SAB No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act.

Divisional Comparisons

Completion Fluids & Products Division


	Three Months Ended March 31,						Period to Period Change					Three Months Ended March 31,						Period to Period Change
	2018			2017			2018 vs 2017			% Change		2019			2018			2019 vs 2018		% Change
	(In Thousands, Except Percentages)											(In Thousands, Except Percentages)
Revenues	$	53,104		$	56,228		$	(3,124	)	(5.6	)%	$	61,581		$	53,104		$	8,477	16.0	%
Gross profit	6,686			11,330			(4,644		)	(41.0	)%	10,664			6,686			3,978		59.5	%
Gross profit as a percentage of revenue	12.6		%	20.2		%						17.3		%	12.6		%
General and administrative expense	4,640			4,684			(44		)	(0.9	)%	4,728			4,640			88		1.9	%
General and administrative expense as a percentage of revenue	8.7		%	8.3		%						7.7		%	8.7		%
Interest (income) expense, net	(233		)	13			(246		)			(179		)	(233		)	54
Litigation arbitration award income	—			(12,816		)	12,816
Other (income) expense, net	(170		)	(24		)	(146		)			(71		)	(170		)	99
Income before taxes	$	2,449		$	19,473		$	(17,024	)	(87.4	)%	$	6,186		$	2,449		$	3,737	152.6	%
Income before taxes as a percentage of revenue	4.6		%	34.6		%						10.0		%	4.6		%

The ~~decrease~~increase in Completion Fluids & Products Division revenues during the current year quarter compared to the prior year quarter was primarily due to ~~$2.0~~$6.3 million of ~~decreased completion services revenues and $1.2 million of decreased~~increased product sales ~~revenue. These decreases reflect decreased clear brine fluids ("CBF")~~revenue primarily due to increased international CBF product sales and ~~associated~~domestic manufactured products sales, partially offset by reduced CBF product sales revenues in the U.S. Gulf of ~~Mexico, including decreased~~Mexico. Additionally, service revenues ~~as a result of a TETRA CS Neptune~~increased^(R)~~completion fluid project that was completed during 2017. These decreases were partially offset by~~$2.2 million, due to increased international ~~CBF~~completion services activity. Offshore U.S. Gulf of Mexico activity levels remain challenged, and ~~manufactured products sales.~~the impact of pricing pressures continues to hamper profitability.

Completion Fluids & Products Division gross profit during the current year quarter ~~decreased~~increased significantly compared to the prior year quarter primarily due to the ~~decreased revenues and~~ profitability associated with the ~~mix of CBF~~increased manufactured products and ~~services, including the prior year impact~~international CBF sales revenues. Gross profit was negatively affected by approximately $0.7 million of ~~the TETRA CS Neptune completion fluid project discussed above.~~costs associated with a damaged manufactured products facility, a portion of which is expected to be reimbursed from insurance proceeds in future periods. Completion Fluids & Products Division profitability in future periods will ~~continue to~~ be affected by the mix of its products and services, including the timing of TETRA CS Neptunecompletion fluid projects.

The Completion Fluids & Products Division reported a significant ~~decrease~~increase in pretax earnings during the current year quarter compared to the prior year quarter ~~primarily~~ due to the ~~collection of an arbitration award of $12.8 million during January 2017 that was credited to earnings, and from the decreased~~increase in gross profit discussed ~~above.~~above . Completion Fluids & Products Division administrative cost levels remained ~~consistent~~level compared to the prior year ~~quarter,~~period, as ~~$0.3~~$0.4 million of increased legal and professional fees and $0.2 million of increased general expenses were partially offset by $0.5 million of decreased salary and employee related expenses ~~were offset by $0.2 million of increased legal and professional fees~~ and $0.1 million of ~~increased general expenses. The Completion Fluids & Products Division continues to review opportunities to further reduce its administrative costs.~~decreased bad debt expense.

Water & Flowback Services Division


	Three Months Ended March 31,						Period to Period Change					Three Months Ended March 31,						Period to Period Change
	2018			2017			2018 vs 2017			% Change		2019			2018			2019 vs 2018			% Change
	(In Thousands, Except Percentages)											(In Thousands, Except Percentages)
Revenues	$	61,075		$	38,179		$	22,896		60.0	%	$	78,678		$	61,075		$	17,603		28.8	%
Gross profit	11,404			2,248			9,156					8,851			11,404			(2,553		)	(22.4	)%
Gross profit as a percentage of revenue	18.7		%	5.9		%						11.2		%	18.7		%
General and administrative expense	5,278			3,742			1,536			41.0	%	6,796			5,278			1,518			28.8	%
General and administrative expense as a percentage of revenue	8.6		%	9.8		%						8.6		%	8.6		%
Interest (income) expense, net	(15		)	(122		)	107					4			(15		)	19
Other (income) expense, net	(407		)	(107		)	(300		)			(180		)	(407		)	227
Income (loss) before taxes	$	6,548		$	(1,265	)	$	7,813
Income (loss) before taxes as a percentage of revenue	10.7		%	(3.3		)%
Income before taxes												$	2,231		$	6,548		$	(4,317	)	65.9	%
Income before taxes as a percentage of revenue												2.8		%	10.7		%

Water & Flowback Services Division revenues increased during the current year quarter compared to the prior year quarter ~~primarily~~ due to increased water management ~~services.~~services activity. Water management and flowback services ~~activity~~revenues increased ~~$27.8~~$18.5 million during the current year quarter compared to the prior year quarter primarily resulting from the impact of ~~increased demand, reflecting the growth in domestic onshore rig count. Approximately $8.1 million of the water management increase was generated from the operations~~a full quarter of SwiftWater, which was acquired on February 28, ~~2018. Increased service revenues were partially offset~~2018, the impact of the December 2018 acquisition of JRGO, and increased demand in completion activity. Product sales revenue decreased by ~~$4.9~~$0.9 million, ~~of decreased product sales revenue,~~ due to an international equipment sale ~~during~~in the prior ~~year~~ period.

The Water & Flowback Services Division reflected ~~increased~~decreased gross profit during the current year quarter compared to the prior year quarter, despite increased revenues, due to a shift in revenue mix away from smaller, capital constrained customers towards larger operators with stronger balance sheets. The costs to demobilize from one customer to mobilize for another within the ~~increase in revenues and improving customer pricing levels. However, customer pricing continues to be challenging due to excess availability of~~same quarterly period had a meaningful impact on profitability. We also experienced high maintenance costs on our flowback service equipment ~~in certain markets. The Water & Flowback Services Division continues to monitor its cost structure, minimizing increased costs despite increasing activity levels, and looking to capture synergies~~ following the ~~SwiftWater acquisition.~~significant activity experienced in the fourth quarter of 2018, which was our highest flowback service revenue quarter in over three years.

The Water & Flowback Services Division reported decreased pretax income during the current year quarter compared to a pretax loss during the prior year quarter, primarily due to the improvement in gross profit described above. General and administrative expenses levels increased compared to the prior year quarter, primarily due to the ~~acquisition of SwiftWater,~~decrease in gross profit described above. General and administrative expenses increased primarily due to the $1.1 million impact from additional administrative expenses from the operations added as a result of the 2018 acquisitions. Total general and administrative increases included increased ~~salary~~wage and ~~employee~~benefit related expenses of ~~$1.3~~$1.1 million, increased sales and marketing expenses of $0.4 million, and increased ~~insurance and other~~ general expenses of ~~$0.2~~$0.1 million, offset by decreased professional fees of $0.1 million. Other income, ~~increased~~net, decreased during the current year period despite $0.4 million of income associated with the remeasurement of the contingent purchase price consideration for SwiftWater, primarily due to increased foreign currency ~~gains.~~losses.

Compression Division


	Three Months Ended March 31,						Period to Period Change					Three Months Ended March 31,						Period to Period Change
	2018			2017			2018 vs 2017			% Change		2019			2018			2019 vs 2018			% Change
	(In Thousands, Except Percentages)											(In Thousands, Except Percentages)
Revenues	$	85,422		$	65,559		$	19,863		30.3	%	$	103,469		$	85,422		$	18,047		21.1	%
Gross profit	10,040			6,163			3,877			62.9	%	16,859			10,040			6,819			67.9	%
Gross profit as a percentage of revenue	11.8		%	9.4		%						16.3		%	11.8		%
General and administrative expense	8,286			8,770			(484		)	(5.5	)%	10,664			8,286			2,378			28.7	%
General and administrative expense as a percentage of revenue	9.7		%	13.4		%						10.3		%	9.7		%
Interest expense, net	11,214			10,102			1,112					13,213			11,214			1,999
CCLP Series A Preferred fair value adjustment	1,358			1,631			(273		)			1,163			1,358			(195		)
Other (income) expense, net	3,200			(7		)	3,207					(380		)	3,200			(3,580		)
Loss before taxes	$	(14,018	)	$	(14,333	)	$	(315	)	(2.2	)%	$	(7,801	)	$	(14,018	)	$	6,217		44.4	%
Loss before taxes as a percentage of revenue	(16.4		)%	(21.9		)%						(7.5		)%	(16.4		)%

Compression Division revenues increased during the current year quarter compared to the prior year quarter, primarily due to a ~~$14.0~~$10.4 million increase in product sales revenues, due to ~~a higher number of new compressor equipment sales compared to the prior year quarter.~~improving demand. Demand for new compressor equipment ~~continues to improve,~~remains strong, and the current equipment sales backlog has ~~increased significantly~~decreased only slightly compared to the prior year ~~quarter.~~quarter, despite significant sales recorded. Changes in our new equipment sales backlog are a function of additional customer orders less completed orders that result in equipment sales revenues. In addition, current year revenues reflect a ~~$5.9~~$7.6 million increase in service revenues from compression and aftermarket services operations. This increase in service revenues was primarily due to increasing demand for compression services, as reflected by increased compressor fleet utilization rates. Overall utilization of the Compression Division's compressor fleet has improved sequentially for ~~six consecutive quarterly periods,~~the past two year period, led by increased utilization of the high- and medium-horsepower fleet.

Compression Division gross profit increased during the current year ~~quarter~~period compared to the prior year ~~quarter~~ due to increased revenues discussed above. The increased compressor fleet utilization rates have led to increases in customer contract pricing.

The Compression Division recorded a ~~slightly~~ decreased pretax loss ~~during~~primarily due to the ~~current year quarter~~increased gross profit discussed above. Interest expense increased compared to the prior year ~~quarter despite~~period due to higher outstanding CCLP debt balances and a higher interest rate from the CCLP Senior Secured Notes, issued in March 2018, when compared to the previous CCLP bank credit facility. General and administrative expense levels increased ~~gross profit discussed above. Other (income)~~compared to the prior year period, due to increased salary and employee-related expenses, including the impact of increased headcount, incentives and equity compensation, of $2.1 million and increased other general expenses of $0.3 million, offset by $0.1 million of decreased sales and marketing expenses. Largely offsetting the increase in general and administrative and interest expense, prior year other expense, net, reflected ~~an expense primarily due to~~ $3.5 million of unamortized deferred financing costs charged to earnings as a result of the termination of the previous CCLP ~~Credit Agreement.~~bank credit facility. In addition, ~~interest expense increased~~the Series A Preferred fair value adjustment resulted in a $1.2 million charge to earnings during the current year period compared to ~~the~~

~~prior year period, due~~a $1.4 million charge to ~~the higher interest rate from the CCLP Senior Secured Notes, which were issued~~earnings in ~~March 2018, compared to the previous CCLP Credit Agreement. Increased interest expense is expected to continue compared to~~ the prior year periods. General and administrative expense levels decreased compared to the prior year quarter, as decreased salary and employee-related expenses, including equity compensation, of $0.6 million and decreased bad debt expense of $0.4 million were partially offset by $0.2 million of increased other general expenses and increased professional fees of $0.2 million.period.

Corporate Overhead


	Three Months Ended March 31,						Period to Period Change					Three Months Ended March 31,						Period to Period Change
	2018			2017			2018 vs 2017			% Change		2019			2018			2019 vs 2018			% Change
	(In Thousands, Except Percentages)											(In Thousands, Except Percentages)
Gross profit (loss) (depreciation expense)	$	(151	)	$	(91	)	$	(60	)	(65.9	)%	$	(168	)	$	(151	)	$	(17	)	(11.3	)%
General and administrative expense	12,598			9,555			3,043			31.8	%	12,089			12,598			(509		)	(4.0	)%
Interest (income) expense, net	4,007			3,774			233
Warrants fair value adjustment income	(1,994		)	(5,976		)	3,982
Interest expense, net												5,342			4,007			1,335
Warrants fair value adjustment (income)/expense												407			(1,994		)	2,401
Other (income) expense, net	150			428			(278		)			(319		)	150			(469		)
Loss before taxes	$	(14,912	)	$	(7,872	)	$	(7,040	)	(89.4	)%	$	(17,687	)	$	(14,912	)	$	(2,775	)	(18.6	)%

Corporate Overhead pretax loss increased during the current year ~~quarter~~period compared to the prior year quarter, primarily due to ~~increased general and administrative expense. Corporate general and administrative expense increased due to $1.7 million~~the adjustment of increased professional service fees (including $0.9 million of transaction costs), $0.5 million of increased salary, incentives and employee related expenses, $0.4 million of increased other general expenses, and $0.4 million of increased consulting marketing fees. In addition, the fair value of the outstanding Warrants liability that resulted in a $0.4 million charge to earnings compared to an $2.0 million credit to earnings during ~~2018~~the prior year quarter. Corporate general and administrative expense decreased primarily due to $0.9 million of decreased professional fees, $0.4 million of decreased general expenses, and $0.5 million of decreased consulting fees. These decreases were offset by increased salary related expense of $1.1 million. In addition, other income of $0.3 million was recorded during the current year quarter, compared to ~~a $6.0~~$0.2 million ~~credit~~of expense during the prior year quarter, primarily due to ~~earnings in 2017.~~

increased foreign currency gains.

Liquidity and Capital Resources

We reported a decrease in consolidated cash flows from operating activities during the first three months of 2018 compared to the corresponding prior year period. This decrease occurred despite the improved profitability of our operations, due to increased working capital needs largely due to the timing of payments of accounts payable. CCLP used $0.4 million of our consolidated operating cash flows during the three months ended March 31, 2018, and we received $3.0 million of cash distributions from CCLP during the three months ended March 31, 2018 compared to $5.6 million during the corresponding prior year period. We believe that the ~~cost reduction and~~ capital structure steps we have taken during the past ~~two~~three years continue to support our ability to meet our financial obligations and fund future growth as needed, despite current uncertain operating and financial markets.

We As of March 31, 2019, we and CCLP are in compliance with all covenants of our respective debt ~~agreements as~~agreements. Information about the terms and covenants of March 31, 2018. With regard to CCLP, considering financial forecasts as of May 10, 2018 for the subsequent twelve month period, which consider the current level of cash distributions to be paid on CCLP common units, CCLP believes that it will have adequate liquidity, earnings, and operating cash flows to fund its operations and debt obligations and maintain compliance with its debt covenants through May 10, 2019. We have reviewed our financial forecasts as of May 10, 2018 for the subsequent twelve month period, which consider the current level of cash distributions expected to be received on the CCLP common units we own. Based on this review as of May 10, 2018, we anticipate that we will have sufficient liquidity, earnings, and operating cash flows to fund our operations and debt obligations and maintain compliance with the covenants under our debt agreements ~~through May 10, 2019.~~

~~Our consolidated sources and uses of cash during the three months ended March 31,~~ can be found in our 2018 ~~and 2017 are as follows:~~

Three months ended March 31,
2018 2017
(In Thousands)
Operating activities $ (31,261 ) $ (20,538 )
Investing activities (67,551 ) (4,616 )
Financing activities 185,610
8,033
Annual Report.

Because of the level of consolidated debt, we believe it is important to consider our capital structure and CCLP's capital structure separately, as there are no cross default provisions, cross collateralization provisions, or cross guarantees between CCLP's debt and TETRA's debt. ~~(See Financing Activities section below for a discussion of the terms of our and CCLP's respective debt arrangements.)~~ Our consolidated debt outstanding has a carrying value of approximately ~~$823.6~~$845.8 million as of March 31, ~~2018.~~2019. However, approximately ~~$632.4~~$633.7 million of this consolidated debt balance is owed by CCLP and is serviced from the existing cash balances and cash flows of CCLP, and ~~$343.8 million of which~~ is secured by certain of CCLP's assets. Through our common unit ownership interest in CCLP, which was approximately ~~38%~~34% as of March 31, ~~2018,~~2019, and ownership of an approximately 2%1% general partner interest, ~~that includes incentive distribution rights,~~ we receive our share of the distributable cash flows of CCLP through its quarterly cash distributions. Approximately ~~$90.1~~$16.9 million of the ~~$104.1~~$36.9 million of the cash balance reflected on our consolidated balance sheet is owned by CCLP and is not accessible by us. As of March 31, ~~2018,~~2019, subject to compliance with the covenants, borrowing base, and other provisions of the agreement that may limit borrowings, we had $27.3 million availability under the ABL Credit Agreement. As of March 31, 2019, and subject to compliance with the covenants, borrowing base, and other provisions of the ~~agreements~~agreement that may limit borrowings under ~~our~~the CCLP Credit Agreement, weCCLP had availability of ~~$119.5 million under our Credit Agreement. Following~~$18.4 million.

Our consolidated sources and uses of cash during the ~~issuance of the CCLP Senior Secured Notes, CCLP used a portion of the proceeds to repay the borrowings outstanding under CCLP's bank revolving credit facility, which was then terminated.~~three months ended March 31, 2019 and 2018 are as follows:



	Three months ended March 31,
	2019			2018
	(In Thousands)
Operating activities	$	7,412		$	(31,261	)
Investing activities	(31,726		)	(67,551		)
Financing activities	21,312			185,610

Operating Activities

Consolidated cash flows ~~used~~increased by $38.7 million. CCLP generated $31.6 million of our consolidated cash flows provided by operating activities~~totaled $31.3 million~~during the ~~first~~ three months ~~of 2018~~ended March 31, 2019 compared to ~~$20.5~~$0.4 million during the ~~corresponding~~ prior year ~~period, an increaseof $10.7 million or 52%.~~period. Operating cash flows ~~decreased despite~~increased due to improved operating profitability and due to minimizing the ~~decrease to~~use of cash ~~provided by~~for working capital changes, particularly related to the timing of payments of accounts payable. We have taken steps to aggressively manage working capital, including increased collection ~~efforts and a focus on minimizing inventory levels.~~efforts. We continue to monitor customer credit risk in the current environment and have historically focused on serving larger capitalized oil and gas operators and national oil companies.

Demand for the vast majority of our products and services is driven by oil and gas industry activity, which is affected by oil and natural gas commodity pricing. With the increase in crude oil prices in early 2018, operating plans and capital expenditure levels of many of our oil and natural gas customers has increased, benefiting certain of our operating segments with improved revenues and cash flows. The acquisition of SwiftWater during the three months ended March 31, 2018 is expected to provide additional revenues and operating cash flows going forward. Domestic onshore rig counts have improved compared to early 2017, and this increase in activity has resulted in improved cash provided by operating activities of our Water & Flowback Services Division. However, offshore and international rig count levels remain relatively unchanged. The increased crude oil pricing and resulting increased capital expenditure activity of our Compression Division customers has resulted in increased demand for compression services and equipment, which has also resulted in increased cash provided by operating activities of our Compression Division. However, oil and natural gas prices are expected to continue to be volatile in the future, and if oil and gas industry activity levels decrease in the future, we expect that our levels of operating cash flows will be negatively affected.

During early 2018, and despite increasing activity levels, we have taken steps to minimize growth to our operating and administrative headcount and continue to maintain a low cost structure for our businesses. Continuing specific cost reduction steps taken during prior periods, we also continue to review for other further opportunities to reduce costs.

As part of the sale of our Offshore Division in March 2018, Orinoco assumed all liabilities and obligations currently associated with our former Maritech subsidiary, including but not limited to all currently identified and any future identified Maritech decommissioning obligations.

Investing Activities

~~During the first~~ ~~three~~ months of 2018, the total amount of our net cash utilized on investing activities was $67.6 million. The acquisition of SwiftWater included cash purchase consideration of $42.0 million, which is subject to further working capital adjustment. Total cash capital expenditures during the first three months of ~~2018~~2019 were ~~$28.9 million, net of disposals.~~$32.4 million. Our Completion Fluids & Products Division spent ~~$1.1~~$1.5 million on capital expenditures during the first three months of ~~2018~~2019, the majority of which related to plant and facility additions. Our Water & Flowback Services Division spent ~~$8.8~~$7.6 million

on capital expenditures, primarily to add to its water management equipment fleet. Our Compression Division spent ~~$17.1~~$23.3 million, primarily for growth capital expenditure projects to increase its compression fleet.

Generally, a majority of our planned capital expenditures has been related to identified opportunities to grow and expand certain of our existing businesses. However, certain of these planned expenditures have been, and may continue to be, postponed or canceled as we are reviewing all capital expenditure plans carefully in an effort to conserve cash. We currently have no long-term capital expenditure commitments. The deferral of capital projects could affect our ability to ~~compete~~expand our operations in the future. Excluding our Compression Division, we expect to spend approximately ~~$40~~$25.0 million to ~~$50~~$35.0 million during ~~2018~~2019 on capital expenditures, primarily to expand our ~~water management services~~Water & Flowback Services Division equipment fleet. Our Compression Division expects to spend approximately ~~$90~~$75.0 million to ~~$110~~$80.0 million on capital expenditures during ~~2018~~2019 to expand its compressor fleet in response to increased demand for compression services. ~~The level of future growth capital expenditures depends on forecasted demand for our products and services.~~ If the forecasted demand for our products and services during ~~2018~~2019 increases or decreases, the amount of planned expenditures on growth and expansion ~~will~~may be ~~adjusted accordingly.~~adjusted.

Financing Activities

During the first three months of ~~2018,~~2019, the total amount of consolidated cash provided by financing activities was ~~$185.6~~$21.3 million, consisting primarily ~~consisting~~ of the ~~proceeds from the issuance~~use of ~~the CCLP Senior Secured Notes, which were used to repay the CCLP Credit Agreement and provide additional funding for future capital expenditures, and borrowings~~available funds provided under our ABL Credit ~~Agreement that were primarily used to fund the purchase of SwiftWater. To fund future capital~~Agreement. We and ~~working capital requirements, we~~CCLP may supplement our existing cash balances and cash flow from operating activities with short-term borrowings, long-term borrowings, leases, issuances of equity ~~issuances,~~and debt securities, and other sources of capital. ~~We and CCLP are in compliance with all covenants of our respective debt agreements as of March 31, 2018.~~

~~See~~ ~~CCLP Financing Activities~~ ~~below for discussion of the CCLP Preferred Units and CCLP's long-term debt.~~

~~Our~~TETRA Long-Term Debt

~~Our Bank~~Asset-Based Credit ~~Facility~~Agreement. The ABL Credit Agreement provides for a senior secured revolving credit facility of up to $100 million, subject to a borrowing base to be determined by reference to the value of TETRA’s and any other borrowers’ inventory and accounts receivable, and contains within the facility a letter of credit sublimit of $20.0 million and a swingline loan sublimit of $10.0 million. The ABL Credit Agreement is scheduled to mature on September 10, 2023. As of May ~~10, 2018, TETRA (excluding CCLP) had an~~9, 2019, we have $26.9 million outstanding ~~balance on its revolving credit facility (as amended, the "Credit Agreement"), of $90.2 million, andhad $6.1 million in letters of credit against therevolving credit facility, leaving a net availability, subject to compliance with~~under our covenants and other provisions of the Credit Agreement that limit borrowings under the Credit Facility, of $103.7 million. The Credit Agreement, as amended, matures on September 30, 2019 and limits aggregate lender commitments to $200 million. Borrowings generally bear interest at the British Bankers Association LIBOR rate plus 2.50% to 4.25%, depending on one of our financial ratios. We pay a commitment fee ranging from 0.35% to 1.00% on unused portions of the facility. All obligations under theABL Credit Agreement and ~~the guarantees~~$8.9 million letters of such obligations are secured by first-lien security interests in substantially all of our assets and the assets of our subsidiaries other than CCLP and its subsidiaries (limited, in the case of foreign subsidiaries, to 66% of the voting stock or equity interests of first-tier foreign subsidiaries). Such security interests are for the benefit of the lenders under the Credit Agreement as well as the holder of our 11% Senior Note on a pari passu basis. In addition, the Credit Agreement includes limitations on aggregate asset sales, individual acquisitions, and aggregate annual acquisitions, dispositions, and capital expenditures.credit.

~~Our~~Term Credit Agreement contains customary covenants and other restrictions, including certain financial ratio covenants based on our levels of debt and interest cost compared to a defined measure of our operating cash flows over a twelve month period.. The Term Credit Agreement ~~requires us~~provides for an initial loan in the amount of $200 million and the availability of additional loans, subject to ~~maintain (i) a fixed charge coverage ratio that may not be less than 1.25 to 1 as~~the terms of the ~~end of any fiscal quarter; and (ii) a consolidated leverage ratio that may not exceed (a) 5.00 to 1 at the end of fiscal quarters ending during the period from and including March 31, 2017~~

through and including December 31, 2017, (b) 4.75 to 1 at the end of fiscal quarters ending March 31, 2018 and June 30, 2018, (c) 4.50 to 1 at the end of fiscal quarters ending September 30, 2018 and December 31, 2018, and (d) 4.00 to 1 at the end of each of the fiscal quarters thereafter. At March 31, 2018, our consolidated leverage ratio was 2.62 to 1 (compared to a 4.75 to 1 maximum allowed under the Credit Agreement). At March 31, 2018, our fixed charge coverage ratio was 2.54 to 1 (compared to a 1.25 to 1 minimum required under the Credit Agreement). Deterioration of these financial ratios could result in a default by us under theTerm Credit Agreement, ~~that, if not remedied, could result in termination~~up to an aggregate amount of ~~the~~$75 million. The Term Credit Agreement ~~and acceleration of any outstanding balances. Any such default could also result in a cross-default under our 11% Senior Note. We have reviewed our financial forecasts as of May~~is scheduled to mature on September 10, 2018 for the subsequent twelve month period, which consider the current level of distributions expected to be received on the CCLP common units we own. Based on this review, and the current market conditions as of May 10, 2018, we anticipate that we will have sufficient liquidity, earnings, and operating cash flows to maintain compliance with the covenants under our debt agreements through May 10, 2019.

CCLP is an unrestricted subsidiary and is not a borrower or a guarantor under our Credit Agreement. Our Credit Agreement includes cross-default provisions relating to any other indebtedness (excluding indebtedness of CCLP) greater than a defined amount. Our Credit Agreement also contains a covenant that restricts us from paying dividends in the event of a default or if such payment would result in an event of default.

~~Our Senior Note~~. ~~Our senior note consists of the 11% Senior Note that was initially issued and sold in November 2015 and later amended (the "Amended and Restated 11% Senior Note Agreement").~~2025. As of May ~~10, 2018, the~~9, 2019, $220.5 million in aggregate principal amount ~~outstanding of the 11% Senior Note is $125.0 million.~~

The 11% Senior Note bears interest at the fixed rate of 11.0% and matures on November 5, 2022. Interest on the 11% Senior Note is due quarterly on March 15, June 15, September 15, and December 15 of each year. We may prepay the 11% Senior Note, in whole or in part at a prepayment price equal to (i) prior to November 20, 2018, 100% of the principal amount so prepaid, plus accrued and unpaid interest and a “make-whole” prepayment amount, (ii) during the period commencing on November 20, 2018, and ending on November 19, 2019, 104% of the principal amount so prepaid, plus accrued and unpaid interest, (iii) during the period commencing on November 20, 2019 and ending on November 19, 2020, 102% of the principal amount so prepaid, plus accrued and unpaid interest, (iv) during the period commencing on November 20, 2020, and ending on November 19, 2021, 101% of the principal amount so prepaid, plus accrued and unpaid interest, and (v) on or after November 20, 2021, 100% of the principal amount so prepaid, plus accrued and unpaid interest.

~~The 11% Senior Note is guaranteed by substantially all~~ of our wholly owned U.S. subsidiaries. The Amended and Restated 11% Senior Note Agreement contains customary covenants that limit our ability and the ability of certain of our restricted subsidiaries to, among other things: incur or guarantee additional indebtedness; incur or create liens; merge or consolidate or sell substantially all of our assets; engage in a different business; enter into transactions with affiliates; and make certain payments. In addition, the Amended and Restated 11% Senior Note Agreement requires us to maintain certain financial ratios, including a maximum leverage ratio (ratio of debt and letters of credit outstanding to a defined measure of earnings). The maximum leverage ratio is further defined in the Amended and Restated 11% Senior Note Agreement. Consolidated net earnings under the Amended and Restated 11% Senior NoteTerm Credit Agreement is the aggregate of our net income (or loss) of our consolidated restricted subsidiaries, including cash dividends and distributions (not the return of capital) received from persons other than consolidated restricted subsidiaries (such as CCLP) and after allowances for taxes for such period determined on a consolidated basis in accordance with U.S. generally accepted accounting principles ("GAAP"), excluding certain items more specifically described therein. CCLP is an unrestricted subsidiary and is not a borrower or a guarantor under the Amended and Restated 11% Senior Note Agreement.outstanding.

The Amended and Restated 11% Senior Note Agreement includes customary default provisions, as well as cross-default provisions relating to other indebtedness (excluding indebtedness of CCLP) greater than a defined amount. In addition, the Amended and Restated 11% Senior Note Agreement requires a minimum fixed charge coverage ratio at the end of any fiscal quarter of 1.25 to 1 and allows a maximum ratio of consolidated funded indebtedness at the end of any fiscal quarter of a defined measure of earnings ("EBITDA") of (a) 5.00 to 1 as of the end of any fiscal quarter ending during the period commencing March 31, 2017 and ending December 31, 2017, (b) 4.75 to 1 as of the end of any fiscal quarter ending March 31, 2018 and June 30, 2018 and (c) 4.50 to 1 as of the end of any fiscal quarter ending September 30, 2018 and December 31, 2018, and (d) 4.00 to 1 at the end of fiscal quarters ending thereafter. Pursuant to the Amended and Restated 11% Senior Note Agreement, the 11% Senior Note is secured by first-lien security interests in substantially all of our assets and the assets of our subsidiaries on a pari passu basis with the lenders under the Credit Agreement. See the above discussion of our Credit Agreement for a description of these security interests. The 11% Senior Note is pari passu in right of payment with all borrowings under the Credit Agreement and ranks at least pari passu in right of payment with all other outstanding indebtedness. We are in compliance with all covenants of the Amended and Restated 11% Senior Note Purchase Agreement as of March 31, 2018. At March 31, 2018, our ratio of consolidated funded indebtedness to EBITDA was 2.62 to 1 (compared to 4.75 to 1 maximum allowed under the Amended and Restated 11% Senior Note Agreement) and our fixed charge coverage ratio was 2.54 to 1 (compared to a 1.25 to 1 minimum required under the Amended and Restated 11% Senior Note Purchase Agreement). CCLP is an unrestricted subsidiary and is not a borrower or a guarantor under our Amended and Restated 11% Senior Note Purchase Agreement.

CCLP Financing Activities

In March 2018, CCLP issued an aggregate $350.0 million of its CCLP Senior Secured Notes, and the net proceeds of $344.1 million were partially used to repay the remaining outstanding balance of $258.0 million under the CCLP Credit Agreement, which was then terminated. See below for a further discussion of the CCLP Senior Secured Notes. The remaining proceeds are available to fund future CCLP capital expenditures, including the increasing capital expenditures mentioned above that are needed in order to grow and maintain the capacity of CCLP's compressor and equipment fleet, as well as for general partnership needs.

CCLP Preferred Units. On August 8, 2016 and September 20, 2016, CCLP entered into Series A Preferred Unit Purchase Agreements (the “Unit Purchase Agreements”) with certain purchasers with regard to its issuance and sale in private placements (the "Initial Private Placement" and "Subsequent Private Placement," respectively) of an aggregate of 6,999,126 of CSI Compressco LP Series A Convertible Preferred Units representing limited partner interests in CCLP (the “CCLP Preferred Units”) for a cash purchase price of $11.43 per CCLP Preferred Unit (the “Issue Price”), resulting in total 2016 net proceeds, after deducting certain offering expenses, of approximately $77.3 million. We purchased 874,891 of the CCLP Preferred Units at the aggregate Issue Price of $10.0 million.

In connection with the closing of the Initial Private Placement, CSI Compressco GP Inc (our wholly owned subsidiary) executed the Second Amended and Restated CCLP Partnership Agreement to, among other things, authorize and establish the rights and preferences of the CCLP Preferred Units. The CCLP Preferred Units ~~are a new class of equity security that will~~ rank senior to all classes or series of equity securities of CCLP with respect to distribution rights and rights upon liquidation. We and the other holders of CCLP Preferred Units ~~(each, a “CCLP Preferred Unitholder”) will~~ receive quarterly distributions, which ~~will be~~are paid in kind in additional CCLP Preferred Units, equal to an annual rate of 11.00% of the Issue Price ($1.2573 per unit annualized), of the outstanding CCLP Preferred Units, subject to certain adjustments. The rights of the CCLP Preferred Units include certain anti-dilution adjustments, including adjustments for economic dilution resulting from the issuance of common units in the future below a set price.

AUnless otherwise redeemed for cash, a ratable portion of the CCLP Preferred Units has been, and will ~~continue to~~ be, converted into CCLP common units on the eighth day of each month over a period of thirty months that began in March 2017 and will end in August 2019 (each, a “Conversion Date”)~~, subject to certain provisions of~~. Beginning with the ~~Second Amended and Restated CCLP Partnership Agreement that may delay or accelerate all or a portion of such monthly conversions. On each~~January 2019 Conversion Date, ~~a portion of~~CCLP elected to redeem the remaining CCLP Preferred Units ~~will convert into CCLP common units representing limited partner interests~~for cash, resulting in ~~CCLP in an amount equal to, with respect to each CCLP Preferred Unitholder, the number of CCLP~~783,046 Preferred Units ~~held by such CCLP Preferred Unitholder divided by~~being redeemed during the ~~number~~three months ended March 31, 2019 for $9.4 million, which includes approximately $0.4 million of Conversion Dates remaining, subject to adjustment described in the Second Amended and Restated CCLP Partnership Agreement, with the conversion price (the "Conversion Price") determined by the trading prices of the common units over the prior month, among other factors, and as otherwise impacted by the existence of certain conditions related to the CCLP common units. The maximum aggregate number of CCLP common unitsredemption premium that ~~could be required to be issued pursuant to the conversion provisions of the~~

CCLP Preferred Units is potentially unlimited; however, CCLP may, at its option, pay cash, or a combination of cash and CCLP common units, to the CCLP Preferred Unitholders instead of issuing CCLP common units on any Conversion Date, subject to certain restrictions as described in the Second Amended and Restated CCLP Partnership Agreement and the CCLP Credit Agreement.was paid. Including the impact of paid in kind distributions of CCLP Preferred Units and conversions of CCLP Preferred Units into CCLP common units, and the redemption of CCLP Preferred Units for cash, the total number of CCLP Preferred Units outstanding as of March 31, ~~2018~~2019 was ~~5,241,563,~~1,779,417, of which we held ~~658,281.~~223,474.

~~Because~~CCLP Bank Credit Facilities. The CCLP Credit Agreement includes a maximum credit commitment of $50.0 million available for loans, letters of credit (with a sublimit of $25.0 million) and swingline loans (with a sublimit of $5.0 million), subject to a borrowing base to be determined by reference to the ~~CCLP Preferred Units~~value of CCLP’s and any other borrowers’ accounts receivable. Such maximum credit commitment may be ~~settled using a variable number of CCLP common units,~~increased by $25.0 million in accordance with the ~~fair value~~terms and conditions of the CCLP Preferred Units is classified as a long-term liability on our consolidated balance sheet in accordance with ASC 480 "Distinguishing Liabilities and Equity." The fair value of the CCLP Preferred Units asCredit Agreement. As of March 31, ~~2018 was $54.2 million. Changes~~2019, CCLP had no

outstanding balance and had $3.5 million in ~~the fair value during each quarterly period, if any, are charged or credited to earnings in the accompanying consolidated statements~~letters of ~~operations. Charges or credits to earnings for changes in the fair value of~~credit against the CCLP ~~Preferred Units, along with the interest expense for the accrual and payment~~Credit Agreement. The CCLP Credit Agreement is scheduled to mature on June 29, 2023. As of ~~paid-in-kind distributions associated with~~May 8, 2019, CCLP has no balance outstanding under the CCLP ~~Preferred Units, are non-cash charges~~Credit Agreement and ~~credits associated with the CCLP Preferred Units.~~

~~In addition, the CCLP Unit Purchase Agreements include certain provisions regarding change~~$5.3 million in letters of control, transfer of CCLP Preferred Units, indemnities, and other matters described in detail in the CCLP Unit Purchase Agreements. The CCLP Unit Purchase Agreements contain customary representations, warranties and covenants of CCLP and the purchasers.credit.

CCLP Senior Secured Notes. ~~On March~~As of May 8, ~~2018, CCLP entered into the Purchase Agreement (the “Purchase Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated as representative of the initial purchasers listed~~2019, $350.0 million in ~~Schedule A thereto (collectively, the “Initial Purchasers”), pursuant to which the CCLP Issuers agreed to issue and sell to the Initial Purchasers $350 million~~ aggregate principal amount of the CCLP Issuers’ 7.50% Senior Secured First Lien Notes due 2025 (the "CCLP Senior Secured Notes") (the "CCLP Offering") pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act").

The CCLP Issuers closed the Offering on March 22, 2018. The CCLP Senior Secured Notes were issued at par for net proceeds of approximately $344.1 million, after deducting certain financing costs. CCLP used the net proceeds to repay in full and terminate CCLP's existing bank Credit Agreement and for general partnership purposes, including the expansion of its compression fleet. The CCLP Senior Secured Notes are jointly and severally, and fully and unconditionally, guaranteed (the "Guarantees" and, together with the CCLP Senior Secured Notes, the "CCLP Senior Secured Note Securities") on a senior secured basis initially by each of CCLP's domestic restricted subsidiaries (other than CSI Compressco Finance Inc., certain immaterial subsidiaries and certain other excluded domestic subsidiaries) and are secured by a first-priority security interest in substantially all of the CCLP Issuers' and the Guarantors' assets (other than certain excluded assets) (the "Collateral") as collateral security for their obligations under the CCLP Senior Secured Notes, subject to certain permitted encumbrances and exceptions. On the closing date, we entered into an indenture (the "Indenture") by and among the Obligors and U.S. Bank National Association, as trustee with respect to the Securities.was outstanding. The CCLP Senior Secured Notes accrue interest at a rate of 7.50% per ~~annum. Interest on the CCLP Senior Secured Notes is payable semi-annually in arrears on April 1~~annum and ~~October 1 of each year, beginning October 1, 2018. The CCLP Senior Secured Notes~~ are scheduled to mature on April 1, 2025. During the three months ended March 31, 2018, CCLP incurred total financing costs of $6.2 million related to the CCLP Senior Secured Notes. These costs are deferred, netting against the carrying value of the amount outstanding.

Date Price
2021 105.625%
2022 103.750%
2023 101.875%
2024 100.000%

In addition, any time or from time to time before April 1, 2021, CCLP may, at our option, redeem all or a portion of the CCLP Senior Secured Notes at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium (as defined in the Indenture) with respect to the CCLP Senior Secured Notes plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, subject to the rights of holders of the CCLP Senior Secured Notes on the relevant record date to receive interest due on the relevant interest payment date.

Prior to April 1, 2021, CCLP may on one or more occasions redeem up to 35% of the principal amount of the CCLP Senior Secured Notes with an amount of cash not greater than the amount of the net cash proceeds from one or more equity offerings at a redemption price equal to 107.500% of the principal amount of the CCLP Senior Secured Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption, subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date, provided that (a) at least 65% of the aggregate principal amount of the CCLP Senior Secured Notes originally issued on the issue date (excluding notes held by CCLP and its subsidiaries) remains outstanding after each such redemption; and (b) the redemption occurs within 180 days after the date of the closing of the equity offering.

If CCLP experiences certain kinds of changes of control, each holder of the CCLP Senior Secured Notes will be entitled to require us to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) of that holder’s CCLP Senior Secured Notes pursuant to an offer on the terms set forth in the Indenture. CCLP will offer to make a cash payment equal to 101% of the aggregate principal amount of the CCLP Senior Secured Notes repurchased plus accrued and unpaid interest, if any, on the CCLP Senior Secured Notes repurchased to the date of repurchase, subject to the rights of holders of the CCLP Senior Secured Notes on the relevant record date to receive interest due on the relevant interest payment date.

The Indenture contains customary covenants restricting CCLP ability and the ability of CCLP restricted subsidiaries to: (i) pay distributions on, purchase or redeem CCLP common units or purchase or redeem CCLP subordinated debt; (ii) incur or guarantee additional indebtedness or issue certain kinds of preferred equity securities; (iii) create or incur certain liens securing indebtedness; (iv) sell assets, including dispositions of the Collateral; (v) consolidate, merge or transfer all or substantially all of our assets; (vi) enter into transactions with affiliates; and (vii) enter into agreements that restrict distributions or other payments from our restricted subsidiaries to CCLP. These covenants are subject to a number of important limitations and exceptions, including certain provisions permitting CCLP, subject to the satisfaction of certain conditions, to transfer assets to certain of CCLP unrestricted subsidiaries. Moreover, if the CCLP Senior Secured Notes receive an investment grade rating from at least two rating agencies and no default has occurred and is continuing under the Indenture, many of the restrictive covenants in the Indenture will be terminated. The Indenture also contains customary events of default and acceleration provisions relating to such events of default, which provide that upon an event of default under the Indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding CCLP Senior Secured Notes may declare all of the CCLP Senior Secured Notes to be due and payable immediately.

CCLP Senior Notes. The obligations under the CCLP 7.25% Senior Notes (the "CCLP Senior Notes") are jointly and severally and fully and unconditionally, guaranteed on a senior unsecured basis by each of CCLP’s domestic restricted subsidiaries (other than CSI Compressco Finance) that guarantee CCLP’s other indebtedness (the "Guarantors" and together with the Issuers, the "Obligors"). The CCLP Senior Notes and the subsidiary

~~guarantees thereof (together, the "CCLP Senior Note Securities") were issued pursuant to an indenture described below.~~ As of May ~~9, 2018,~~8, 2019, $295.9 million in aggregate principal amount ~~of the CCLP Senior Notes are~~was outstanding.

The Obligors issued the CCLP Senior Note Securities pursuant to the Indenture dated as of August 4, 2014 (the "CCLP Senior Note Indenture") by and among the Obligors and U.S. Bank National Association, as trustee (the "Trustee"). The CCLP Senior Notes accrue interest at a rate of 7.25% per ~~annum. Interest on the CCLP Senior Notes is payable semi-annually in arrears on February 15~~annum and ~~August 15 of each year. The CCLP Senior Notes~~ are scheduled to mature on August 15, 2022.

The CCLP Senior Note Indenture contains customary covenants restricting CCLP’s ability and the ability of its restricted subsidiaries to: (i) pay dividends and make certain distributions, investments and other restricted payments; (ii) incur additional indebtedness or issue certain preferred shares; (iii) create certain liens; (iv) sell assets; (v) merge, consolidate, sell or otherwise dispose of all or substantially all of its assets; (vi) enter into transactions with affiliates; and (vii) designate its subsidiaries as unrestricted subsidiaries under the CCLP Senior Note Indenture. The CCLP Senior Note Indenture also contains customary events of default and acceleration provisions relating to such events of default, which provide that upon an event of default under the CCLP Senior Note Indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the CCLP Senior Notes then outstanding may declare all amounts owing under the CCLP Senior Notes to be due and payable. CCLP is in compliance with all covenants of the CCLP Senior Note Purchase Agreement as of March 31, 2018.

Other Sources and Uses

In addition to the various aforementioned ~~revolving~~ credit ~~facility,~~facilities and senior notes, we and CCLP fund our respective short-term liquidity requirements from cash generated by our respective operations, leases, and from short-term vendor financing. Should additional capital be required, we believe that we have the ability to raise such capital through the issuance of additional debt or ~~equity.~~equity securities. However, instability or volatility in the capital markets at the times we need to access capital may affect the cost of capital and the ability to raise capital for an indeterminable length of time.

TETRA's Credit Agreement, as amended, matures in September 2019, TETRA's 11% Senior Note matures in November 2022, the CCLP Senior Notes mature in August 2022 and the CCLP Senior Secured Notes mature in March 2025. The replacement of these capital sources at similar or more favorable terms is not certain. If it is necessary to issue additional equity to fund our capital needs, additional dilution to our common stockholders will occur.

Although near-term growth plans pursuant to our long-term growth strategy have resumed, they are being reviewed carefully and are subject to our continuing efforts to conserve cash. CCLP has also increased its growth capital expenditure activity in response to increased demand for compression services. CCLP's long-term growth objectives are funded from its available cash available, other borrowings, and cash generated from the issuance of common or preferred units.

On ~~March 23, 2016,~~April 11, 2019, we filed a universal shelf Registration Statement on Form S-3 with the ~~Securities and Exchange Commission ("SEC").~~SEC. On ~~April 13, 2016,~~May 1, 2019, the Registration Statement on Form S-3 was declared effective by the SEC. Pursuant to this registration statement, we have the ability to sell debt or equity securities in one or more public offerings up to an aggregate public offering price of ~~$164.4 million.~~$464.1 million, inclusive of $64.1 million of our common stock issuable upon conversion of our currently outstanding warrants. This shelf registration statement currently provides us additional flexibility with regard to potential financings that we may undertake when market conditions permit or our financial condition may require.

As part of our long-term strategic growth plans, we evaluate opportunities to acquire businesses and assets that may require the payment of cash. Such acquisitions may be funded with existing cash balances, funds under credit facilities, or cash generated from the issuance of equity or debt securities.

The ~~CCLP~~ Second Amended and Restated Partnership Agreement of CCLP requires that within 45 days after the end of each quarter, itCCLP distribute all of its available cash, as defined in the Second Amended and Restated Partnership Agreement, to its common unitholders of record on the applicable record date. During the three months ended March 31, ~~2018~~,2019, CCLP distributed ~~$7.3~~$0.5 million in cash, including ~~$4.4~~$0.3 million to its public ~~unitholders. The amount of~~unitholders, reflecting the reduction in quarterly distributions ~~is determined based on a variety of factors, including estimates of CCLP's cash needs to fund its future operating, investing, and debt services requirements.~~announced previously by CCLP in December 2018. There can be no assurance that quarterly distributions from CCLP will increase from this amount per unit ~~or that there will not be future decreases in the amount of distributions~~ going forward.

Off Balance Sheet Arrangements

As of March 31, ~~2018~~,2019, we had no “off balance sheet arrangements” that may have a current or future material effect on our consolidated financial condition or results of operations.

Recently Adopted Accounting Guidance

We adopted the new lease accounting standard on January 1, 2019. The new lease standard had a material impact to our consolidated financial statements, resulting from the inclusion of operating lease right-of-use assets and operating lease liabilities in our consolidated balance sheet. Refer to Part I, Item 1. Financial Statements- Note A - "Organization, Basis of Presentation and Significant Accounting Policies" and Note K - “Leases” for further discussion.

Commitments and Contingencies

Litigation

~~Other Contingencies~~

Contractual Obligations

Our contractual obligations and commitments principally include obligations associated with our outstanding

indebtedness and obligations under operating leases. The table below summarizes our consolidated contractual cash obligations as of March 31, 2019:


	Payments Due														Payments Due
	Total		2018		2019		2020		2021		2022		Thereafter		Total		2019		2020		2021		2022		2023		Thereafter
	(In Thousands)														(In Thousands)
Long-term debt - TETRA	$	191,151	$	—	$	73,143	$	—	$	—	$	118,008	$	—	$	230,701	$	—	$	—	$	—	$	—	$	—	$	230,701
Long-term debt - CCLP	632,414		—		—		—		—		288,588		343,826		645,930		—		—		—		295,930		—		350,000
Interest on debt - TETRA	67,556		12,656		15,991		13,340		13,340		12,229		—		114,270		13,553		18,071		18,071		18,071		17,672		28,832
Interest on debt - CCLP	277,662		35,635		47,513		47,513		47,513		40,425		59,063		230,286		35,665		47,553		47,553		40,452		26,250		32,813
Purchase obligations	113,428		9,478		9,450		9,450		9,450		9,450		66,150		101,625		7,125		9,500		9,500		9,500		9,500		56,500
Decommissioning and other asset retirement obligations	11,929		—		—		—		—		—		11,929
Operating and capital leases	86,238		12,000		12,022		10,548		8,517		6,358		36,793
Asset retirement obligations⁽¹⁾															12,331		—		—		—		—		—		12,331
Operating and finance leases															86,702		13,498		15,569		11,505		9,009		7,770		29,351
Total contractual cash obligations⁽¹⁾⁽²⁾	$	1,380,378	$	69,769	$	158,119	$	80,851	$	78,820	$	475,058	$	517,761	$	1,421,845	$	69,841	$	90,693	$	86,629	$	372,962	$	61,192	$	740,528


⁽¹⁾	We have estimated the timing of these paymentsfor asset retirement obligation liabilities based upon our plans. The amounts shown represent the discounted obligation as of March 31, 2019.

⁽²⁾

Amounts exclude other long-term liabilities reflected in our Consolidated Balance Sheet that do not have known payment streams. These excluded amounts include approximately $~~1.2~~0.8 million of liabilities under FASB Codification Topic 740, “Accounting for Uncertainty in Income Taxes,” as we are unable to reasonably estimate the ultimate amount or timing of ~~tax~~ settlements. These excluded amounts also include approximately~~$54.2~~ $18.3 million of liabilities related to the CCLP ~~Series A Convertible~~ Preferred Units. The ~~preferred units~~CCLP Preferred Units are expected to be serviced ~~and satisfied~~ with non-cash paid-in-kind distributions, and may be satisfied either through conversions to CCLP common ~~units. See "Note E~~units or redemptions for cash, at CCLP's election. Refer to Part I, Item 1. Financial Statements- Note F – ~~CCLP~~"CCLP Series A Convertible Preferred Units," ~~in the Notes to Consolidated Financial Statements~~ for further discussion.

For additional information about our contractual obligations as of December 31, ~~2017,~~2018, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2018 Annual Report ~~on Form 10-K for the year ended December 31, 2017.~~

Cautionary Statement for Purposes of Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this Quarterly Report are identifiable by the use of the following words, the negative of such words, and other similar words: “anticipates", "assumes", “believes,” "budgets", “could,” “estimates,” "expects", "forecasts", "goal", "intends", "may", "might", "plans", "predicts", "projects", "schedules", "seeks", "should", "targets", "will", and "would".

Such forward-looking statements reflect our current views with respect to future events and financial performance and are based on assumptions that we believe to be reasonable, but such forward-looking statements are subject to numerous risks, and uncertainties, including, but not limited to:

economic and operating conditions that are outside of our control, including the supply, demand, and prices of ~~crude~~ oil and natural gas;

the availability of adequate sources of capital to us;

the levels of competition we encounter;

the activity levels of our customers;

our operational performance;

the availability of raw materials and labor at reasonable prices;

risks related to acquisitions and our growth strategy;

~~our ability to comply with the financial covenants in~~restrictions under our debt agreements and the consequences of any failure to comply with ~~such financial~~debt covenants;

~~the availability of adequate sources of capital to us;~~

the effect and results of litigation, regulatory matters, settlements, audits, assessments, and contingencies;

risks related to our foreign operations;

information technology risks including the risk from cyberattack, and

other risks and uncertainties under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, those set forth in Item 1A "Risk Factors" in Part II of this Quarterly Report on Form 10-Q, and as included in our other filings with the U.S. Securities and Exchange Commission (“SEC”)


•	other risks and uncertainties under “Item 1A. Risk Factors” in our 2018 Annual Report, and as included in our other filings with the SEC, which are available free of charge on the SEC website at www.sec.gov.

The risks and uncertainties referred to above are generally beyond our ability to control and we cannot predict all the risks and uncertainties that could cause our actual results to differ from those indicated by the forward-looking statements. If any of these risks or uncertainties materialize, or if any of the underlying assumptions prove incorrect, actual results may vary from those indicated by the forward-looking statements, and such variances may be material.

All subsequent written and oral forward-looking statements made by or attributable to us or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements we may make, except as may be required by law.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Market risk is the risk of loss arising from adverse changes in market rates and prices. For a discussion of our indirect exposure to fluctuating commodity prices, please read “Risk Factors — Certain Business Risks” in our 2018 Annual Report ~~on Form 10-K filed with the SEC on March 5, 2018.~~. We depend on U.S. and international demand for and production of oil and natural gas, and a reduction in this demand or production could adversely affect the demand or the prices we charge for our services, which could cause our revenues and operating cash flows to

decrease in the future. We do not currently hedge, and do not intend to hedge, our indirect exposure to fluctuating commodity prices.

Interest Rate Risk

As of March 31, ~~2018,~~2019, due to borrowings made during the ~~three month~~ period then ended, we had a balance outstanding under ~~our~~the Term Credit Agreement and ABL Credit Agreement, and such borrowings bear interest at variable rates of ~~interest (currently 4.30%).~~

interest.

Expected Maturity Date Fair Market
Value
($ amounts in thousands) 2018 2019 2020 2021 2022 Thereafter Total
March 31, 2018
Variable rate
Long-term debt: $ —
$ 74,400
$ —
$ —
$— $ —
$ 74,400
$ 74,400
U.S. dollar fixed rate - TETRA $ —
$ —
$ —
$ —
$125,000 $ —
$ 125,000
$ 128,500
U.S. dollar fixed rate - CCLP $ —
$ —
$ —
$ —
$295,930 $ 350,000
$ 645,930
$ 630,900
Weighted average interest rate (fixed) —
—
—
—
8.36 % 7.50 % —



	Expected Maturity Date																				Fair Market Value
($ amounts in thousands)	2019			2020			2021			2022			2023			Thereafter			Total		Fair Market Value
March 31, 2019
U.S. dollar variable rate - TETRA	$	—		$	—		$	—		$	—		$	—		$	230,701		$	230,701	$	230,701
Weighted average interest rate (variable)	—		%	—		%	—		%	—		%	—		%	8.08		%
U.S. dollar fixed rate - CCLP	$	—		$	—		$	—		$	295,930		$—			$	350,000		$	645,930	$	600,900
Weighted average interest rate (fixed)	—		%	—		%	—		%	7.25		%	—		%	7.50		%

Exchange Rate Risk

As of March 31, ~~2018,~~2019, there have been no material changes pertaining to our exchange rate exposures as disclosed in our ~~Form 10-K for the year ended December 31, 2017.~~

2018 Annual Report.

Item 4. Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, ~~2018,~~2019, the end of the period covered by this quarterly report.

As discussed above in this Quarterly Report on Form 10-Q, onin February ~~28,~~ 2018, we completed the acquisition of SwiftWater, and in December 2018, we purchased JRGO. SwiftWater and JRGO were both excluded from our assessment of the effectiveness of internal control over financial reporting as of December 31, 2018, as disclosed in our 2018 Annual Report in accordance with SEC Staff guidance permitting the exclusion for the year in which an acquisition is completed. During the quarter ended March 31, 2019, we completed our integration of SwiftWater and the oversight, policies, procedures, and monitoring that support our internal control over financial reporting has been extended to include SwiftWater. We are ~~currently integrating SwiftWater~~continuing to integrate JRGO into our internal control over financial reporting processes. In executing this integration, we are analyzing, evaluating, and, where necessary, making changes in controls and procedures related to the ~~SwiftWater~~JRGO business, which we expect to be completed in fiscal year 2019. We ~~expect to exclude~~will include both SwiftWater ~~from~~and JRGO in our annual assessment of internal control over financial reporting ~~as of~~for our fiscal year ending December 31, 2018. Total assets of SwiftWater represented approximately 6% of our consolidated total assets as of March 31, 2018, and SwiftWater's revenues following the February 28, 2018 acquisition date represented approximately 4% of our consolidated revenues for the three month period ended March 31, 2018.2019.

~~Other than~~In connection with the ~~changes described above, there~~adoption of the new lease accounting standard on January 1, 2019, we evaluated and updated certain internal controls to facilitate the proper capture and assessment of contractual information required to support proper preparation of financial information upon adoption.

There were no other changes in our internal control over financial reporting that occurred during the ~~fiscal~~ quarter ended March 31, ~~2018,~~2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

We are named defendants in several lawsuits and respondents in certain governmental proceedings arising in the ordinary course of business. While the outcome of lawsuits or other proceedings against us cannot be predicted with certainty, management does not consider it reasonably possible that a loss resulting from such lawsuits or other proceedings in excess of amounts accrued has been incurred that is expected to have a material adverse impact on our financial condition, results of operations, or liquidity.

Environmental Proceedings

One of our subsidiaries, TETRA Micronutrients, Inc. ("TMI"), previously owned and operated a production facility located in Fairbury, Nebraska. TMI is subject to an Administrative Order on Consent issued to American Microtrace, Inc. (n/k/a/ TETRA Micronutrients, Inc.) in the proceeding styled In the Matter of American Microtrace Corporation, EPA I.D. No. NED00610550, Respondent, Docket No. VII-98-H-0016, dated September 25, 1998 (the "Consent Order"), with regard to the Fairbury facility. TMI is liable for ongoing environmental monitoring at the Fairbury facility under the Consent Order; however, the current owner of the Fairbury facility is responsible for costs associated with the closure of that facility.While the outcome cannot be predicted with certainty, management does not consider it reasonably possible that a loss in excess of any amounts accrued has been incurred or is expected to have a material adverse impact on our financial condition, results of operations, or liquidity.

Item 1A. Risk Factors.

There have been no material changes in the information pertaining to our Risk Factors as disclosed in our ~~Form 10-K for the year ended December 31, 2017.~~2018 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) None.

(b) None.

Period
Total Number
of Shares Purchased

Average
Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾

Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Publicly Announced Plans or Programs⁽¹⁾
January 1 – January 31, 2017 —
(2) $ —
—
$ 14,327,000
February 1 – February 28, 2017 45,152
(2) 3.89
—
14,327,000
March 1 – March 31, 2017 —
(2) —
—
14,327,000
Total 45,152

—
$ 14,327,000



Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾	Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Publicly Announced Plans or Programs⁽¹⁾
January 1 – January 31, 2019	—		$	—	—	$	14,327,000
February 1 – February 28, 2019	68,412	(2)	2.49		—	14,327,000
March 1 – March 31, 2019	—		—		—	14,327,000
Total	68,412				—	$	14,327,000


(1)	In January 2004, our Board of Directors authorized the repurchase of up to $20 million of our common stock. Purchases will be made from time to time in open market transactions at prevailing market prices. The repurchase program may continue until the authorized limit is reached, at which time the Board of Directors may review the option of increasing the authorized limit.


(2)	Shares we received in connection with the exercise of certain employee stock options or the vesting of certain shares of employee restricted stock. These shares were not acquired pursuant to the stock repurchase program.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibits:



2.1**	~~Asset Purchase and Sale Agreement, dated February 28, 2018, by and between Maritech Resources, LLC, TETRA Technologies, Inc., and Orinoco Natural Resources, LLC.~~
2.2**	~~Equity Interest Purchase Agreement, dated February 28, 2018, by and among TETRA Technologies, Inc., TETRA Production Testing Holding LLC, and Epic Offshore Specialty, LLC.~~
2.3**	~~Equity Interest Purchase Agreement, dated February 13, 2018, by and among the sellers listed therein, the sellers representative and TETRA Technologies, Inc.~~
2.4**	Membership Interest Purchase And Sale Agreement, dated as of February 28, 2018, by and among TETRA Applied Technologies, LLC, Maritech Resources, LLC, TETRA Technologies, Inc., and Orinoco Natural Resources, LLC.
~~10.1~~	TETRA Technologies, Inc. 2018 Inducement Restricted Stock Plan (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8 filed on February 12, 2018 (SEC File No. 333-222976)).
~~10.2~~10.1*	Form of Employee Restricted Stock Unit Award Agreement ~~under the TETRA Technologies, Inc. 2018 Inducement~~
10.2*	Form of Director Restricted Stock ~~Plan (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on February 12, 2018 (SEC File No. 333-222976)).~~Unit Award Agreement
10.3*	~~Bonding~~Form of Cash Award Agreement ~~dated~~
10.4*	Purchase and Lease Consent and Amendment to Credit Agreement, date February ~~28, 2018, between TETRA Technologies, Inc., Orinoco Natural Resources, LLC, and Epic Offshore Specialty, LLC.~~4, 2019
31.1*	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1***	Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2***	Certification Furnished Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS+	XBRL Instance Document.
101.SCH+	XBRL Taxonomy Extension Schema Document.
101.CAL+	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB+	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE+	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF+	XBRL Taxonomy Extension Definition Linkbase Document.


*	Filed with this report.


**	Filed with this report. The schedules and exhibits to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementary any omitted schedules and exhibits to the Securities Exchange Commission upon request.


~~***~~	Furnished with this report.

Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Operations for the three month periods ended March 31, ~~2018~~2019 and ~~2017~~2018; (ii) Consolidated Statements of Comprehensive Income for the three month periods ended March 31, ~~2018~~2019 and ~~2017~~2018; (iii) Consolidated Balance Sheets as of March 31, ~~2018~~2019 and December 31, ~~2017~~2018; (iv) Consolidated Statements of Cash Flows for the three month periods ended March 31, ~~2018~~2019 and ~~2017~~2018; and (v) Notes to Consolidated Financial Statements for the three months ended March 31, ~~2018~~2019.

A statement of computation of per share earnings is included in Note A of the Notes to Consolidated Financial Statements included in this report and is incorporated by reference into Part II of this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		TETRA Technologies, Inc.

Date:	May ~~10, 2018~~9, 2019	By:	/s/~~Stuart~~Brady M. ~~Brightman~~Murphy
			~~Stuart~~Brady M. ~~Brightman~~Murphy
			President
			Chief Executive Officer

Date:	May ~~10, 2018~~9, 2019	By:	/s/Elijio V. Serrano
			Elijio V. Serrano
			Senior Vice President
			Chief Financial Officer

Date:	May ~~10, 2018~~9, 2019	By:	/s/~~Ben C. Chambers~~Richard D. O'Brien
			~~Ben C. Chambers~~Richard D. O'Brien
			Vice President – ~~Accounting~~Finance and Global Controller
			Principal Accounting Officer

4735



TETRA Technologies, Inc. and Subsidiaries
Table of Contents
	Page
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations	1
Consolidated Statements of Comprehensive Income (Loss)	2
Consolidated Balance Sheets	3
Consolidated Statements of Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures about Market Risk	31
Item 4. Controls and Procedures	32

PART II—OTHER INFORMATION
Item 1. Legal Proceedings	32
Item 1A. Risk Factors	32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	34
SIGNATURES	35



	Three Months Ended March 31, 2018
	(In Thousands)
Beginning balance for the period, as reported	$	11,738
Activity in the period:
Accretion of liability	159
Revisions in estimated cash flows	32
Ending balance	$	11,929



Current assets	$	16,880
Property and equipment	10,999
Intangible assets	42,032
Goodwill	15,220
Total assets acquired	85,131

Current liabilities	7,189
Total liabilities assumed	7,189
Net assets acquired	$	77,942



	March 31, 2018		December 31, 2017		Increase (Decrease)
	(In Thousands)
Contract liabilities
Deferred revenue	$	35,929	$	17,050	$	18,879



	March 31, 2018		March 31, 2017
	(In Thousands)
Completion Fluids & Products
U.S.	27,909		40,802
International	25,195		15,426
	53,104		56,228
Water & Flowback Services
U.S.	47,038		24,140
International	14,037		14,039
	61,075		38,179
Compression
U.S.	76,980		57,968
International	8,442		7,591
	85,422		65,559
Interdivision eliminations
U.S.	2		(1	)
International	(222	)	(556	)
	(220	)	(557	)
Total Revenue
U.S.	151,929		122,909
International	47,452		36,500
	199,381		159,409