Select Energy Services (WTTR) 10-Q 19 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 15, 2017
Entity Registrant Name	Select Energy Services, Inc.
Entity Central Index Key	1,693,256
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Class A common stock
Entity Common Stock, Shares Outstanding		14,082,970
Class A-1 common stock
Entity Common Stock, Shares Outstanding		16,100,000
Class B common stock
Entity Common Stock, Shares Outstanding		38,462,541

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 8,048	$ 40,041
Accounts receivable trade, net of allowance for doubtful accounts of $2,203 and $2,144, respectively	103,180	75,892
Accounts receivable, related parties	279	135
Inventories	940	1,001
Prepaid expenses and other current assets	5,683	7,586
Total current assets	118,130	124,655
Property and equipment	756,124	739,386
Accumulated depreciation	(500,541)	(490,519)
Property and equipment, net	255,583	248,867
Goodwill	22,975	12,242
Other intangible assets, net	36,017	11,586
Other assets	8,410	7,716
Total assets	441,115	405,066
Current liabilities
Accounts payable	13,012	10,796
Accounts payable and accrued expenses, related parties	666	648
Accrued salaries and benefits	6,431	2,511
Accrued insurance	9,351	10,338
Accrued expenses and other current liabilities	24,031	22,091
Total current liabilities	53,491	46,384
Accrued lease obligations	17,282	15,946
Other long term liabilities	7,771	8,028
Long-term debt, net of current maturities	34,000
Total liabilities	112,544	70,358
Commitments and contingencies (Note 8)
Preferred stock
Additional paid-in capital	115,891	113,175
Accumulated deficit	(5,215)	(1,043)
Total stockholders’ equity	111,263	112,716
Noncontrolling interests	217,308	221,992
Total equity	328,571	334,708
Total liabilities and equity	441,115	405,066
Class A-1 common stock
Current liabilities
Common stock	161	161
Total equity	161	161
Class A common stock
Current liabilities
Common stock	41	38
Total equity	41	38
Class B common stock
Current liabilities
Common stock	385	385
Total equity	$ 385	$ 385

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts	$ 2,203	$ 2,144
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Class A-1 common stock
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	40,000,000	40,000,000
Common Stock, Shares, Issued	16,100,000	16,100,000
Common Stock, Shares, Outstanding	16,100,000	16,100,000
Class A common stock
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Shares, Issued	4,077,970	3,802,792
Common Stock, Shares, Outstanding	4,077,970	3,802,792
Class B common stock
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Shares, Issued	38,462,541	38,462,541
Common Stock, Shares, Outstanding	38,462,541	38,462,541

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue
Water solutions	$ 78,377	$ 62,289
Accommodations and rentals	9,515	8,514
Wellsite completion and construction services	12,033	8,036
Total revenue	99,925	78,839
Costs of revenue
Water solutions	60,621	51,534
Accommodations and rentals	7,923	6,238
Wellsite completion and construction services	10,419	6,862
Depreciation and amortization	21,204	26,142
Total costs of revenue	100,167	90,776
Gross profit (loss)	(242)	(11,937)
Operating expenses
Selling, general and administrative	9,957	8,980
Depreciation and amortization	446	634
Lease abandonment costs	1,863
Total operating expenses	12,266	9,614
Loss from operations	(12,508)	(21,551)
Other income (expense)
Interest expense, net	(730)	(3,367)
Other income (expense), net	1,064	(566)
Loss before tax expense	(12,174)	(25,484)
Tax expense	(106)	(309)
Net income (loss)	(12,280)	(25,793)
Less: Net loss attributable to noncontrolling interests	8,108	456
Net loss attributable to Select Energy Services, Inc.	(4,172)	(25,337)
Predecessor
Other income (expense)
Less: Net loss attributable to noncontrolling interests		$ 25,337
Class A-1 common stock
Other income (expense)
Net loss attributable to Select Energy Services, Inc.	$ (3,363)
EARNINGS PER SHARE
Weighted average shares outstanding:	16,100,000
Net loss per share attributable to common stockholders:	$ (0.21)
Class A common stock
Other income (expense)
Net loss attributable to Select Energy Services, Inc.	$ (809)
EARNINGS PER SHARE
Weighted average shares outstanding:	3,870,194
Net loss per share attributable to common stockholders:	$ (0.21)
Class B common stock
EARNINGS PER SHARE
Weighted average shares outstanding:	38,462,541

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net loss	$ (12,280)	$ (25,793)
Interest rate derivatives designated as cash flow hedges
Unrealized holding loss arising during period		(80)
Net amount reclassified to earnings		85
Net change in unrealized gain (loss)		5
Comprehensive loss	(12,280)	(25,788)
Less: Comprehensive loss attributable to noncontrolling interests	8,108	456
Comprehensive loss attributable to Select Energy Services, Inc.	$ (4,172)
Predecessor
Interest rate derivatives designated as cash flow hedges
Less: Comprehensive loss attributable to noncontrolling interests		$ (25,332)

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands	Class A-1 common stock	Class A common stock	Class B common stock	Total Stockholders’ Equity	Additional Paid-In Capital	Accumulated Deficit	Noncontrolling Interests	Total
Beginning balance at Dec. 31, 2016	$ 161	$ 38	$ 385	$ 112,716	$ 113,175	$ (1,043)	$ 221,992	$ 334,708
Beginning balance (in shares) at Dec. 31, 2016	16,100,000	3,802,972	38,462,541
Issuance of shares for acquisition		$ 3		2,498	2,495		3,002	5,500
Issuance of shares for acquisition (in shares)		274,998
Equity-based compensation				221	221		422	643
Net income (loss)				(4,172)		(4,172)	(8,108)	(12,280)
Ending balance at Mar. 31, 2017	$ 161	$ 41	$ 385	$ 111,263	$ 115,891	$ (5,215)	$ 217,308	$ 328,571
Ending balance (in shares) at Mar. 31, 2017	16,100,000	4,077,970	38,462,541

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net loss	$ (12,280)	$ (25,793)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	21,650	26,776
(Gain) loss on disposal of property and equipment	(1,105)	622
Bad debt expense	334	158
Amortization of debt issuance costs	309	651
Equity-based compensation	643	308
Changes in operating assets and liabilities
Accounts receivable	(21,157)	18,994
Prepaid expenses and other assets	1,337	2,006
Accounts payable and accrued liabilities	2,333	(7,302)
Net cash (used in) provided by operating activities	(7,936)	16,420
Cash flows from investing activities
Acquisitions, net of cash received	(49,004)
Purchase of property, equipment, and intangible assets	(10,806)	(22,275)
Proceeds received from sale of property and equipment	1,753	2,736
Net cash used in investing activities	(58,057)	(19,539)
Cash flows from financing activities
Proceeds from revolving line of credit	34,000	8,500
Payments on long-term debt		(7,625)
Payment of debt issuance costs		(376)
Member distributions		212
Net cash provided by financing activities	34,000	711
Net decrease in cash and cash equivalents	(31,993)	(2,408)
Cash and cash equivalents, beginning of period	40,041	16,305
Cash and cash equivalents, end of period	8,048	13,897
Supplemental cash flow disclosure:
Cash paid for interest	427	2,711
Cash paid for taxes	12	208
Supplemental disclosure of noncash investing activities:
Capital expenditures included in accounts payable and accrued liabilities	$ 4,766	$ 28

BUSINESS AND BASIS OF PRESENTAT

BUSINESS AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
BUSINESS AND BASIS OF PRESENTATION
BUSINESS AND BASIS OF PRESENTATION	NOTE 1—BUSINESS AND BASIS OF PRESENTATION Description of the business : Select Energy Services, Inc. (“Select Energy Services” or “the Company”) was incorporated as a Delaware corporation on November 21, 2016. The Company is a holding company whose sole material asset consists of a membership interest in SES Holdings, LLC (“SES Holdings” or the “Predecessor”). SES Holdings was formed in July 2008 and in October 2008, members of Select Energy Services, LLC (“Select”), formerly known as Peak Oilfield Services, LLC (“Peak”), a Delaware limited liability company formed in December 2006, transferred all interests in Select to SES Holdings in exchange for membership interests in SES Holdings and Select became a wholly‑owned subsidiary of SES Holdings. Select Energy Services is an oilfield services company that provides water solutions to the U.S conventional oil and natural gas industry. The Company offers water‑related services that support oil and gas well completion and production activities including sourcing, transfer, containment, monitoring, treatment, flowback, hauling and disposal in the U.S. shale basins. These services establish and maintain the flow of oil and natural gas throughout the productive life of a horizontal well. The Company also operates a wellsite services group as a part of its total water solutions offering. These services include equipment rental, accommodations, crane and logistics services, wellsite and pipeline construction, and field services. The Company conducts its wellsite services activities on a third‑party contractual basis unrelated to its water‑related services. Reorganization : On December 20, 2016, Select Energy Services completed a private placement of 16,100,000 shares of Class A‑1 common stock (the “144A Offering”) at an offering price of $20.00 per share. In conjunction with the 144A Offering, SES Holdings’ then existing Class A and Class B units were converted into a single class of common units (the “SES Holdings LLC Units”) and SES Holdings effected a 10.3583 for 1 unit split. In exchange for the contribution of all net proceeds from the 144A Offering to SES Holdings, SES Holdings issued 16,100,000 SES Holdings LLC Units to Select Energy Services, and Select Energy Services became the sole managing member of SES Holdings. Select Energy Services issued 38,462,541 shares of Class B common stock to the other member of SES Holdings, SES Legacy Holdings, LLC (“Legacy Owner Holdco”), or one share for each SES Holdings LLC Unit held by Legacy Owner Holdco. The Company also acquired 3,802,972 SES Holdings LLC Units from certain legacy owners (the “Contributing Legacy Owners”) in exchange for the issuance of 3,802,972 shares of Class A common stock. Shareholders of Class A‑1, Class A, and Class B common stock vote together as a single class on all matters, subject to certain exceptions in our amended and restated certificate of incorporation. Shareholders of Class B common stock have voting rights only and are not entitled to an economic interest in Select Energy Services based on their ownership of Class B common stock. The reorganization transactions were treated as a combination of entities under common control with assets and liabilities transferred at their carrying amounts in a manner similar to a pooling of interests. Unless otherwise stated or the context otherwise indicates, all references to the “Company” or similar expressions for time periods prior to the reorganization and 144A Offering transactions refer to SES Holdings and its subsidiaries. For time periods subsequent to the reorganization and 144A Offering transactions, these terms refer to Select Energy Services, Inc. and its subsidiaries. Credit Facility : Concurrent with the closing of the 144A Offering, the Company repaid all of its outstanding indebtedness and amended its Credit Facility to reduce the total commitment of its revolving line of credit to $100.0 million. See Note 7—Debt for further discussion. Exchange rights : Under the Eighth Amended and Restated Limited Liability Company Agreement of SES Holdings (the “SES Holdings LLC Agreement”), Legacy Owner Holdco has the right (an “Exchange Right”) to cause SES Holdings to acquire all or a portion of its SES Holdings LLC Units for, at SES Holdings’ election, (i) shares of the Company’s Class A common stock at an exchange ratio of one share of Class A common stock for each SES Holdings LLC Unit exchanged, subject to conversion rate adjustments for stock splits, stock dividends, reclassification and other similar transactions or (ii) cash in an amount equal to the Cash Election Value (as defined within the SES Holdings LLC Agreement) of such Class A common stock. Alternatively, upon the exercise of any Exchange Right, the Company will have the right (the “Call Right”) to acquire the tendered SES Holdings LLC Units from the exchanging unitholder for, at its election, (i) the number of shares of Class A common stock the exchanging unitholder would have received under the exchange Right or (ii) cash in an amount equal to the Cash Election Value of such Class A common stock. In connection with any exchange of SES Holdings LLC Units pursuant to an Exchange Right or Call Right, the corresponding number of shares of the Company’s Class B common stock will be cancelled. Registration rights : In December 2016, in connection with the closing of the 144A Offering, Select Energy Services entered into a registration rights agreement with FBR Capital Markets & Co. for the benefit of the investors in the 144A Offering. Under this registration rights agreement, the Company agreed, at its expense, to file with the SEC, in no event later than April 30, 2017, a shelf registration statement registering for resale the 16,100,000 shares of the Company’s Class A common stock issuable upon conversion of the Class A‑1 common stock sold in the 144A Offering plus any additional shares of Class A‑1 common stock issued in respect thereof whether by stock dividend, stock distribution, stock split, or otherwise, and to use commercially reasonable efforts to cause such registration statement to be declared effective by the SEC as soon as practicable but in any event within 60 days after the closing of the Company’s IPO (as defined below). The Company filed this registration statement with the SEC on April 28, 2017. Each share of Class A‑1 common stock will be automatically converted into a share of Class A common stock on a one‑for‑one basis upon the effectiveness of such registration statement. Investors in the 144A Offering will be restricted from selling shares for a period of 60 days following the effective date of the registration statement related to the Company’s initial public offering of 8,700,000 shares of Class A common stock at a price of $14.00 per share (the “IPO”), or April 20, 2017. In addition, Legacy Owner Holdco has the right, under certain circumstances, to cause the Company to register the shares of Class A common stock obtained pursuant to the Exchange Right. Tax receivable agreement : Concurrent with the closing of the 144A Offering, the Company entered into two tax receivable agreements with Legacy Owner Holdco and certain legacy owners of SES Holdings. See Note 12—Related Party Transactions for further discussion. Basis of presentation : The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC. These unaudited interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all disclosures required for financial statements prepared in conformity with GAAP. Accordingly, the accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the Company’s consolidated financial statements for the years ended December 31, 2016 and 2015 included in the Final Prospectus. The consolidated financial statements include the accounts of Select Energy Services and all of its majority‑owned or controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments which are of a normal recurring nature and considered necessary for a fair presentation of our interim financial statements have been included in these unaudited interim consolidated financial statements. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017. The Company’s historical financial statements prior to the 144A Offering and reorganization transactions are prepared using SES Holdings’ historical basis in the assets and liabilities, and include all revenues, costs, assets and liabilities attributed to SES Holdings. For investments in subsidiaries that are not wholly‑owned, but where the Company exercises control, the equity held by the minority owners and their portion of net income (loss) are reflected as noncontrolling interests. Investments in entities in which Select Energy Services exercises significant influence over operating and financial policies are accounted for using the equity method, and investments in entities for which the Company does not have significant control or influence are accounted for using the cost method.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2017
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2—SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies : Our significant accounting policies are disclosed in Note 2 of the consolidated financial statements for the years ended December 31, 2016 and 2015 included in the Final Prospectus. There have been no changes in such policies or the application of such policies during the quarter ended March 31, 2017. Use of estimates : The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to recoverability of long‑lived assets and intangibles, useful lives used in depreciation and amortization, uncollectible accounts receivable, income taxes, self‑insurance liabilities, share‑based compensation and contingent liabilities. The Company bases its estimates on historical and other pertinent information that are believed to be reasonable under the circumstances. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Emerging Growth Company status: Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), we are an “emerging growth company,” which allows us to have an extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. We intend to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase‑in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act until we are no longer an emerging growth company. Our election to use the phase‑in periods permitted by this election may make it difficult to compare our financial statements to those of non‑emerging growth companies and other emerging growth companies that have opted out of the longer phase‑in periods under Section 107 of the JOBS Act and who will comply with new or revised financial accounting standards. If we were to subsequently elect instead to comply immediately with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act. Recent accounting pronouncements : In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , outlining a comprehensive new revenue recognition standard that will supersede ASC 605, Revenue Recognition. The new accounting guidance creates a framework under which an entity will allocate the transaction price to separate performance obligations and recognize revenue when each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation, and determining when an entity satisfies its performance obligations. The standard allows for either “full retrospective” adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch‑up as of the earliest period presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch‑up as of the current period. In August 2015, the FASB decided to defer the original effective date by one year to be effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019 for nonpublic entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures and has not yet determined the method by which it will adopt the standard. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which amends existing guidance on income taxes to require the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet. The pronouncement is effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018 for nonpublic entities, and may be applied either prospectively or retrospectively. The Company prospectively adopted this guidance during the three months ended March 31, 2017. Prior periods were not retrospectively adjusted. As the Company’s deferred tax assets and liabilities are all noncurrent, the adoption did not result in a change to the consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in the current accounting guidance as well as the FASB’s new revenue recognition standard. However, the ASU eliminates the use of bright‑line tests in determining lease classification as required in the current guidance. The ASU also requires additional qualitative disclosures along with specific quantitative disclosures to better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The pronouncement is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, for nonpublic entities using a modified retrospective approach. Early adoption is permitted. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , that provides a new requirement to record all of the tax effects related to share‑based payments at settlement (or expiration) through the income statement. This pronouncement is effective for annual reporting periods beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018, for nonpublic entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, which addresses the classification and presentation of eight specific cash flow issues that currently result in diverse practices. The amendments provide guidance in the presentation and classification of certain cash receipts and cash payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero‑coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate‑owned life insurance policies, and distributions received from equity method investees. This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, for nonpublic entities. The amendments in this ASU should be applied using a retrospective approach. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-01 , Clarifying the Definition of a Business , with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, for nonpublic entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . This pronouncement removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This pronouncement is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2019. The amendments in this ASU should be applied using a prospective approach. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures.

ACQUISITION

ACQUISITION	3 Months Ended
	Mar. 31, 2017
ACQUISITION
ACQUISITION	NOTE 3— ACQUISITION On March 10, 2017, the Company completed its acquisition (the “Permian Acquisition”) of Gregory Rockhouse Ranch, Inc. and certain other affiliated entities and assets (collectively, the “GRR Entities”). The GRR Entities provide water and water‑related services to E&P companies in the Permian Basin and own and have rights to a vast array of fresh, brackish and effluent water sources with access to significant volumes of water annually and water transport infrastructure, including over 900 miles of temporary and permanent pipeline infrastructure and related storage facilities and pumps, all located in the northern Delaware Basin portion of the Permian Basin. The total consideration paid for this acquisition was $56.5 million, with $51.0 million paid in cash and $5.5 million paid in shares of Class A common stock valued at $20.00 per share, subject to customary post‑closing adjustments. The Company funded the cash portion of the consideration for the Permian Acquisition with $17.0 million of cash on hand and $34.0 million of borrowings under the Company’s Credit Facility. For the three months ended March 31, 2017, the Company expensed $0.7 million of transaction-related costs. The Permian Acquisition is being accounted for as a business combination under the acquisition method of accounting. The preliminary allocation of the consideration transferred is based on management’s estimates, judgments and assumptions. When determining the fair values of assets acquire and liabilities assumed, management made significant estimates, judgments, and assumptions. These estimates, judgments and assumptions are subject to change upon final valuation and should be treated as preliminary values. Management estimated that consideration paid exceeded the fair value of the net assets acquired. Therefore, goodwill of $10.7 million was recorded. The goodwill recognized is primarily attributable to synergies related to the Company’s comprehensive water solutions strategy that are expected to arise from the Permian Acquisition and is attributable to the Company’s Water Solutions segment. The assets acquired and liabilities assumed and the results of operations of the acquired business are included in the Company’s Water Solutions segment. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Preliminary purchase price allocation Amount Consideration transferred (in thousand) Cash paid $ 51,000 Class A common stock issued 5,500 Total consideration transferred 56,500 Less: identified assets Working capital 6,000 Fixed assets 13,225 Customer relationship intangible assets 21,392 Other intangible assets 5,150 Total identified assets 45,767 Goodwill $ 10,733 The Permian Acquisition contributed revenue and net income of $1.9 million and $0.3 million, respectively, to the Company for the period from March 10, 2017 to March 31, 2017. The following unaudited consolidated pro forma information is presented as if the Permian Acquisition had occurred on January 1, 2016: Pro Forma Three Months Ended March 31, 2017 2016 (unaudited) (in thousands) Revenue $ 105,531 $ 83,942 Net loss $ (12,055) $ (26,242) Less: net loss attributable to noncontrolling interests 1 7,932 17,369 Net loss attributable to Select Energy Services, Inc. 1 $ (4,123) $ (8,873) 1 The allocation of net loss attributable to noncontrolling interests and Select Energy Services gives effect to the corporate reorganization as though the 144A Offering occurred as of January 1, 2016. However, the calculation of pro forma net loss does not give effect to any pro forma adjustments for the 144A Offering. The unaudited pro forma amounts above have been calculated after applying the Company’s accounting policies and adjusting the Permian Acquisition results to reflect the increase to depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied from January 1, 2016 and other related pro forma adjustments. The pro forma amounts do not include any potential synergies, cost savings or other expected benefits of the Permian Acquisition, and are presented for illustrative purposes only and are not necessarily indicative of results that would have been achieved if the Permian Acquisition had occurred as of January 1, 2016 or of future operating performance.

EXIT AND DISPOSAL ACTIVITIES

EXIT AND DISPOSAL ACTIVITIES	3 Months Ended
	Mar. 31, 2017
EXIT AND DISPOSAL ACTIVITIES
EXIT AND DISPOSAL ACTIVITIES	NOTE 4—EXIT AND DISPOSAL ACTIVITIES Due to a reduction in industry activity from 2014, the Company made the decision during the year ended December 31, 2016 to close 15 facilities and consolidate operations for the purpose of improving operating efficiencies. The Company recorded $1.9 million of charges related to exit and disposal activities and reclassified $0.2 million of deferred rent related to accrued lease obligations related to exited facilities during the three months ended March 31, 2017. The Company had a remaining balance of $20.4 million, inclusive of a short‑term balance of $3.1 million in accrued expenses and other current liabilities, as of March 31, 2017 related to accrued lease obligations and terminations at exited facilities within its Water Solutions segment. As of March 31, 2017, the Company has completed its exit from underperforming facilities but will continue to make non‑cancelable lease payments for related facilities through the year ended 2027. The Company’s abandonment of these facilities is not a part of a formalized exit plan. Provision during the Usage during the Balance as of three months ended three months ended Balance as of December 31, 2016 March 31, 2017 March 31, 2017 March 31, 2017 (in thousands) Lease obligations and terminations $ 18,000 $ 1,863 $ 712 $ 19,151 Reclassification of deferred rent 1,069 1,254 Total $ 19,069 $ 20,405

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	3 Months Ended
	Mar. 31, 2017
PROPERTY AND EQUIPMENT.
PROPERTY AND EQUIPMENT	NOTE 5—PROPERTY AND EQUIPMENT Property and equipment consists of the following as of March 31, 2017 and December 31, 2016: March 31, 2017 December 31, 2016 (in thousands) Land $ 8,540 $ 8,593 Buildings and leasehold improvements 83,061 83,352 Vehicles and equipment 27,711 24,114 Machinery and equipment 538,693 534,303 Computer equipment and software 11,221 11,102 Office furniture and equipment 4,277 4,275 Disposal wells 67,566 67,566 Helicopters 497 497 Construction in progress 14,558 5,584 756,124 739,386 Less accumulated depreciation and impairment (500,541) (490,519) Total property and equipment, net $ 255,583 $ 248,867 Long‑lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company had no capital lease obligations as of March 31, 2017 and December 31, 2016.

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2017
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 6—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill is evaluated for impairment on at least an annual basis, or more frequently if indicators of impairment exist. The annual impairment tests are based on Level 3 inputs. The changes in the carrying amounts of goodwill by reportable segment for the three months ended March 31, 2017 and the year ended December 31, 2016 are as follows: Wellsite Completion Water and Construction Accommodations Solutions Services and Rentals Total (in thousands) Balance as of December 31, 2015 $ 137,534 $ 12,242 $ 995 $ 150,771 Impairment (137,534) — (995) (138,529) Balance as of December 31, 2016 — 12,242 — 12,242 Additions 10,733 — — 10,733 Balance as of March 31, 2017 $ 10,733 $ 12,242 $ — $ 22,975 The components of other intangible assets are as follows: March 31, 2017 Gross Accumulated Net Value Amortization Value (in thousands) Customer relationships $ 78,218 $ 50,207 $ 28,011 Other 10,641 2,635 8,006 Total other intangible assets $ 88,859 $ 52,842 $ 36,017 December 31, 2016 Gross Accumulated Net Value Amortization Value (in thousands) Customer relationships $ 56,826 $ 48,236 $ 8,590 Other 5,491 2,495 2,996 Total other intangible assets $ 62,317 $ 50,731 $ 11,586 Intangibles obtained through acquisitions are initially recorded at estimated fair value based on preliminary information which is subject to change until final valuations are obtained. Customer relationships and non‑compete agreements are being amortized over estimated useful lives ranging from five to seven years and three to five years, respectively. Other intangible assets primarily relate to certain water rights that are amortized over estimated useful lives ranging from three to eight years. Intangible assets obtained in the Permian Acquisition consisted of customer relationships and non-compete agreements that will be amortized over estimated useful lives of thirteen and five years, respectively. As a result of the Permian Acquisition, the Company also obtained water rights that have an indefinite life and will be tested periodically for impairment. Amortization expense was $2.1 million and $2.2 million for the three months ended March 31, 2017 and 2016, respectively.

DEBT

DEBT	3 Months Ended
	Mar. 31, 2017
DEBT
DEBT	NOTE 7—DEBT Credit Facility term loans and revolving line of credit Select Energy Services’ Credit Facility, originally executed in May 2011, has been amended over time. Effective December 20, 2016, the Company amended its Credit Facility to extend the maturity date from February 28, 2018 to February 28, 2020 and reduce the revolving line of credit to $100 million. The agreement also amended certain financial covenants and restrictions and outlined a new pricing grid that is effective after receipt of the third quarter 2017 compliance certificate. Accrued interest is payable at the end of each quarter. The Credit Facility has a variable interest rate that ranges from either (i) the London interbank rate (“LIBOR”) plus a margin for Eurodollar advances or (ii) the applicable base rate plus a margin for base rate advances based on the Company’s Leverage Ratio (as defined in the Credit Facility) as outlined below. In addition, a commitment fee related to the revolving line of credit is payable at the end of each calendar quarter based on a rate of 0.500% per annum on any unused portion of the commitment under the Credit Facility. Leverage Ratio Before Receipt of Third Quarter 2017 Eurodollar Base Rate Compliance Certificate Advances Advances < 4.00 4.00 % 3.00 % ≥ 4.00 4.50 % 3.50 % Leverage Ratio After Receipt of Third Quarter 2017 Eurodollar Base Rate Compliance Certificate Advances Advances < 2.00 3.00 % 2.00 % ≥ 2.00 < 2.50 3.25 % 2.25 % ≥ 2.50 < 3.00 3.50 % 2.50 % ≥ 3.00 < 3.50 3.75 % 2.75 % ≥ 3.50 < 4.00 4.00 % 3.00 % ≥ 4.00 4.50 % 3.50 % Select Energy Services had $34.0 million outstanding under the revolving line of credit as of March 31, 2017 and no debt outstanding under the revolving line of credit as of December 31, 2016. The weighted‑average interest rate of outstanding borrowings under the revolving line of credit was 5.50% as of March 31, 2017. The borrowing capacity under the revolving line of credit was reduced by outstanding letters of credit of $16.1 million as of March 31, 2017. The Company’s letters of credit have a variable interest rate between 3.00% and 4.50% based on the Company’s Leverage Ratio as outlined above. The unused portion of the available borrowings under the revolving line of credit was $49.9 million at March 31, 2017. Debt issuance costs are amortized to interest expense over the life of the debt to which they pertain. Total unamortized debt issuance costs as of March 31, 2017 were $3.6 million. As these debt issuance costs relate to a revolving line of credit, they are presented as a deferred charge within other assets on the consolidated balance sheet. The Company’s obligations under its Credit Facility are secured by substantially all of its assets. The Credit Facility contains customary events of default and covenants and limits its ability to incur additional indebtedness, pay dividends or make other distributions, create liens and sell assets. The Company was in compliance with all debt covenants as of March 31, 2017.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2017
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 8—COMMITMENTS AND CONTINGENCIES Litigation The Company is named from time to time in various legal proceedings in the ordinary course of business. The legal proceedings are at different stages; however, the Company does not believe the resolution of any of these proceedings would be material to its financial position or results of operations. General Business Risk As discussed in Note 1, the substantial majority of Company’s customers are in the oil and gas industry. The oil and gas industry is currently facing unique challenges due to the continued volatility and depressed state of oil and gas prices.

EQUITY_BASED COMPENSATION

EQUITY‑BASED COMPENSATION	3 Months Ended
	Mar. 31, 2017
EQUITY BASED COMPENSATION
EQUITY‑BASED COMPENSATION	NOTE 9—EQUITY‑BASED COMPENSATION The SES Holdings 2011 Equity Incentive Plan, (“2011 Plan”) was approved by the Predecessor’s board of managers in April 2011. In conjunction with the 144A Offering, the Company adopted the Select Energy Services, Inc. 2016 Equity Incentive Plan (the “2016 Plan”) for employees, consultants and directors of the Company and its affiliates. Options that were outstanding under the 2011 Plan immediately prior to the 144A Offering were cancelled in exchange for new options granted under the 2016 Plan. The maximum number of shares that may be issued pursuant to the 2016 Plan shall not exceed 4,600,000 shares of Class A common stock plus 8% of any shares of Class A common stock sold in any underwritten public offering, subject to adjustment in the event of recapitalization or reorganization, or related to forfeitures or the expiration of awards. Stock options are granted with terms not to exceed ten years. Phantom unit awards granted under the 2011 Plan, upon vesting, entitled each participant with the right to receive an amount of cash based in part on the fair market value of a share of Class A common stock on the date of the Company’s initial public offering. Based on the fair market value of a share of the Company’s Class A common stock of $14.00 on the date of the Company’s initial public offering, each participant received a cash payment equal to $5.53 for each phantom unit on May 5, 2017. Refer to Note 17 – Subsequent Events for details related to the payments made in respect of outstanding phantom units in connection with the Company’s initial public offering. Stock option awards Stock options were granted with an exercise price equal to or greater than the fair market value of a share of the Company’s Class A common stock as of the date of grant. The Company historically valued its Class A common stock on a quarterly basis using a market approach that includes a comparison to publicly traded peer companies using earnings multiples based on their market values and a discount for lack of marketability. The fair value measurement relies on Level 3 inputs. The estimated fair value of its stock options is expensed over their vesting period, which is generally three years from the applicable date of grant. However, certain awards that were granted during 2016 in exchange for cancelled awards were immediately vested and fully exercisable on the date of grant because they were granted in exchange for the cancellation of outstanding options granted under the 2011 Plan that were fully vested and exercisable prior to such cancellation. The Company utilizes the Black‑Scholes model to determine fair value, which incorporates assumptions to value equity‑based awards. The risk‑free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant. At the time of grant, there was no public market for the Company’s equity. Therefore, the Company considered the historic volatility of publicly traded peer companies when determining the volatility factor. The expected life of the options was based on a formula considering the vesting period and term of the options awarded, which is generally seven to ten years. A summary of the Company’s stock option activity and related information for the three months ended March 31, 2017 is as follows: For the three months ended March 31, 2017 Weighted-average Equity Options Exercise Price Beginning balance 620,721 $ 16.50 Granted 418,184 20.00 Ending balance 1,038,905 $ 17.91 The weighted‑average grant date fair value of stock options granted during the three months ended March 31, 2017 was $7.98. The relevant assumptions for stock options granted during the period are as follows: $20.00 Strike Underlying Equity $ 20.00 Strike Price $ 20.00 Dividend Yield (%) % Risk free rate (%) 1.64% - 1.99 % Volatility (%) 46.6% - 46.7 % Expected Term (Years) 4-6 There was no vested stock option activity, or exercise of vested stock options, during the three months ended March 31, 2017. A summary of the Company’s restricted stock unit activity and related information for the three months ended March 31, 2017 is as follows: For the three months ended March 31, 2017 Grant Date Fair Restricted Stock Value Beginning balance — $ — Granted 39,242 20.00 Ending balance 39,242 $ 20.00 The Company recognized approximately $0.6 million and $0.3 million of compensation expense related to stock options and restricted stock unit awards during the three months ended March 31, 2017 and 2016, respectively. Phantom unit awards The Company’s phantom unit awards are cash settled awards that were contingent upon meeting certain equity returns and a liquidation event. The settlement amount was based on the fair market value of a share of the Company’s Class A common stock on the date of completion of the Company’s initial public offering, which constituted a liquidation event with respect to such phantom unit awards. As a result of the cash‑settlement feature of these awards, the Company considers these awards to be liability awards, which are measured at fair value at each reporting date and the pro rata vested portion of the award is recognized as a liability to the extent that the performance condition is deemed probable. No compensation expense was recognized through March 31, 2017 due to the non‑occurrence of the performance condition, which was not considered probable as of March 31, 2017. There was no activity related to the Company’s phantom unit awards for the three months ended March 31, 2017. Refer to Note 17 – Subsequent Events for details related to the payments made in respect of outstanding phantom units in connection with the Company’s initial public offering.

DERIVATIVE FINANCIAL INSTRUMENT

DERIVATIVE FINANCIAL INSTRUMENTS	3 Months Ended
	Mar. 31, 2017
DERIVATIVE FINANCIAL INSTRUMENTS
DERIVATIVE FINANCIAL INSTRUMENTS	NOTE 10—DERIVATIVE FINANCIAL INSTRUMENTS The Company had variable rate debt outstanding which was subject to interest rate risk based on volatility in underlying interest rates. In April 2013, the Company entered into a pay fixed, receive variable interest rate swap, with an aggregate notional amount of $125.0 million, which the Company designated as a cash flow hedge. The derivative contract matured in April 2016. The change in value and amounts reclassified to interest expense during the three months ended March 31, 2016 were nominal. There was no activity during the three months ended March 31, 2017. Changes in the fair values of the Company’s derivative instruments are presented on a net basis in the accompanying consolidated statements of operations. Changes in the fair value of the Company’s interest rate swap derivative instruments are as follows: Three Months Ended March 31, Derivatives designated as cash flow hedges 2016 (in thousands) Beginning fair value of interest rate swap derivative instruments $ (7) Amount of unrealized losses recognized in OCI (80) Amount of gains reclassified from AOCI to earnings (effective portion) 85 Net change in fair value of interest rate swap derivative instruments 5 Ending fair value of interest rate swap derivative instruments $ (2)

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT	3 Months Ended
	Mar. 31, 2017
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT	NOTE 11—FAIR VALUE MEASUREMENT The Company utilizes fair value measurements to measure assets and liabilities in a business combination or assess impairment of property and equipment, intangible assets and goodwill. Fair value is defined as the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in an orderly transaction between market participants at the measurement date. Further, ASC 820, Fair Value Measurements, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and includes certain disclosure requirements. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. ASC 820 establishes a three‑level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows: Level 1 —Unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 —Quoted prices for similar assets or liabilities in non‑active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 —Inputs that are unobservable and significant to the fair value measurement (including the Company’s own assumptions in determining fair value). A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers into, or out of, the three levels of the fair value hierarchy for the three months ended March 31, 2017 or the year ended December 31, 2016. Other fair value considerations The carrying values of the Company’s current financial instruments, which include cash and cash equivalents, accounts receivable trade and accounts payable, approximate their fair value at March 31, 2017 and December 31, 2016 due to the short‑term maturity of these instruments. The Company had no outstanding debt as of December 31, 2016. The carrying value of debt as of March 31, 2017 approximates fair value due to variable market rates of interest. These fair values, which are Level 3 measurements, were estimated based on the Company’s incremental borrowing rates for similar types of borrowing arrangements, when quoted market prices were not available. The estimated fair values of the Company’s financial instruments are not necessarily indicative of the amounts that would be realized in a current market exchange. The consideration transferred and the purchase price allocation of identified assets acquired and liabilities assumed related to the Permian Acquisition are based on the Company’s estimate of fair value utilizing Level 3 inputs at the date of acquisition. Refer to Note 3 – Acquisition for further discussion.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Mar. 31, 2017
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 12—RELATED PARTY TRANSACTIONS The Company considers its related parties to be those stockholders who are beneficial owners of more than 5.0% of its common stock, executive officers, members of its board of directors or immediate family members of any of the foregoing persons. The Company has entered into a significant number of transactions with related parties. The Company’s board of directors regularly reviews these transactions; however, the Company’s results of operations may have been different if these transactions were conducted with non‑related parties. During the three months ended March 31, 2017, sales to related parties were $0.5 million and purchases from related party vendors were $1.2 million. These purchases comprised $0.2 million relating to purchases of property and equipment, less than $0.1 million relating to inventory and consumables, $0.4 million relating to rent of certain equipment or other services used in operations, and $0.5 million relating to management, consulting and other services. During the three months ended March 31, 2016, sales to related parties were $0.3 million and purchases from related party vendors were $1.0 million. These purchases comprised $0.1 million relating to purchases of property and equipment, less than $0.1 million relating to inventory and consumables, $0.3 million relating to rent of certain equipment or other services used in operations, and $0.6 million relating to management, consulting and other services. Tax receivable agreements In connection with the 144A Offering, the Company entered into two tax receivable agreements (the “Tax Receivable Agreements”) with Legacy Owner Holdco, Crestview GP, and certain affiliates of Predecessor unitholders (collectively, the “TRA Holders”). The first of the Tax Receivable Agreements, which the Company entered into with Legacy Owner Holdco and Crestview GP, generally provides for the payment by the Company to such TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that the Company actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the 144A Offering as a result of, as applicable to each such TRA Holder, (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s SES Holdings LLC Units in connection with the 144A Offering or pursuant to the exercise of the Exchange Right or the Company’s Call Right and (ii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under such Tax Receivable Agreement. The second of the Tax Receivable Agreements, which the Company entered into with an affiliate of the Contributing Legacy Owners, generally provides for the payment by the Company to such TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that the Company actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the 144A Offering as a result of, as applicable to each such TRA Holder, (i) any net operating losses available to the Company as a result of certain reorganization transactions entered into in connection with the 144A Offering and (ii) imputed interest deemed to be paid by the Company as a result of any payments the Company makes under such Tax Receivable Agreement.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2017
INCOME TAXES
INCOME TAXES	NOTE 13—INCOME TAXES The Company is subject to U.S. federal and state income taxes as a corporation. SES Holdings and its subsidiaries, with the exception of certain corporate subsidiaries, are treated as flow‑through entities for U.S. federal income tax purposes, and as such, are generally not subject to U.S. federal income tax at the entity level. Rather, the tax liability with respect to their taxable income is passed through to their members or partners. Accordingly, prior to our reorganization in connection with the 144A Offering, the Predecessor only recorded a provision for Texas franchise tax and U.S. federal and state provisions for certain corporate subsidiaries as the Predecessor’s taxable income or loss was includable in the income tax returns of the individual partners and members. However, for periods following our reorganization in connection with the 144A Offering, Select Energy Services will recognize a tax liability on its allocable share of SES Holdings’ taxable income. The Company’s effective tax rate for the three months ended March 31, 2017 and 2016 was -0.9% and -1.2%, respectively. The effective tax rate for the three months ended March 31, 2017 differs from the statutory rate of 35% due to net income allocated to noncontrolling interests, state income taxes, other permanent differences between book and tax accounting, and valuation allowances. The Company recorded income tax expense of $0.1 million and $0.3 million for the three months ended March 31, 2017 and 2016, respectively. The tax benefits of deferred tax assets are recorded as an asset to the extent that management assesses the utilization of such assets to be more likely than not. When the future utilization of some portion of deferred tax assets is determined not to be more likely than not, a valuation allowance is provided to reduce the recorded tax benefits from such assets. As of March 31, 2017, management’s assessment as to the realizability of certain deferred tax assets has resulted in the recording of a valuation allowance to reduce deferred tax assets to the amounts that are considered more likely than not to be realized. Management believes there will be sufficient future taxable income based on the reversal of temporary differences to enable utilization or sustainability of those deferred tax assets that do not have a valuation allowance recorded against them. Separate federal and state income tax returns are filed for Select Energy Services, SES Holdings, and certain consolidated affiliates. The tax years 2012 through 2015 remain open to examination by the major taxing jurisdictions to which the Company is subject to income tax. Select Energy Services and SES Holdings are not currently under any income tax audits. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of March 31, 2017 and December 31, 2016, there was no material liability or expense for the periods then ended recorded for payments of interest and penalties associated with uncertain tax positions or material unrecognized tax positions and the Company’s unrecognized tax benefits were not material.

NONCONTROLLING INTERESTS

NONCONTROLLING INTERESTS	3 Months Ended
	Mar. 31, 2017
NONCONTROLLING INTERESTS.
NONCONTROLLING INTERESTS	NOTE 14—NONCONTROLLING INTERESTS The Company has ownership interests in multiple subsidiaries that are consolidated within the Company’s financial statements but are not wholly owned. During the three months ended March 31, 2017 and 2016, the Company and its Predecessor purchased additional interests from third parties in certain of these subsidiaries. As a result of the Company’s increased interest in these subsidiaries, the Company reduced its noncontrolling interests and recognized an increase in equity related to transactions with holders of noncontrolling interests. The following table summarizes the effects of changes in noncontrolling interests on equity for the three months ended March 31, 2017: For the three months ended March 31, 2017 2016 (in thousands) Net loss attributable to Select Energy Services, Inc. and its Predecessor $ (4,172) $ (25,337) Transfers from noncontrolling interests: Increase in equity due to transactions with holder of noncontrolling interests 2,495 — Change to equity from net loss attributable to Select Energy Services, Inc. and its Predecessor and transfers from noncontrolling interests $ (1,677) $ (25,337)

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	Mar. 31, 2017
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 15—EARNINGS PER SHARE Earnings per share are based on the amount of income allocated to the shareholders and the weighted‑average number of shares outstanding during the period for each class of common stock. The Company’s outstanding options are not included in the calculation of diluted weighted-average shares outstanding for the periods presented as the effect is antidilutive. Earnings related to periods prior to the reorganization and 144A Offering are attributable to the Predecessor. The following table presents the Company’s calculation of basic and diluted earnings per share for the three months ended March 31, 2017 and 2016 (dollars in thousands, except share and per share amounts): Three Months Ended March 31, 2017 2016 Net loss (12,280) (25,793) Less: Net loss attributable to Predecessor — 25,337 Less: Net loss attributable to noncontrolling interests 8,108 456 Net loss attributable to Select Energy Services, Inc. $ (4,172) $ — Allocation of net loss attributable to: Class A-1 stockholders $ (3,363) Class A stockholders (809) Class B stockholders — $ (4,172) Weighted average shares outstanding: Class A-1-Basic & Diluted 16,100,000 Class A-Basic & Diluted 3,870,194 Class B-Basic & Diluted 38,462,541 Net loss per share attributable to common stockholders: Class A-1-Basic & Diluted $ (0.21) Class A-Basic & Diluted $ (0.21) Class B-Basic & Diluted $ —

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2017
SEGMENT INFORMATION
SEGMENT INFORMATION	NOTE 16—SEGMENT INFORMATION Select Energy Services is an oilfield services company that provides solutions to the North American onshore oil and natural gas industry. The Company’s services are offered through three operating segments. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker assesses performance and allocates resources on the basis of the three reportable segments. Corporate and other expenses that do not individually meet the criteria for segment reporting are reported separately as Corporate. Each operating segment reflects a reportable segment led by separate managers that report directly to the Company’s CODM. The Company’s CODM assesses performance and allocates resources on the basis of the following three reportable segments: Water Solutions —The Water Solutions segment provides water‑related services to customers that include major integrated oil companies and independent oil and natural gas producers. These services include: the sourcing of water; the transfer of the water to the wellsite through permanent pipeline infrastructure and temporary pipe; the containment of fluids off‑ and on‑location; measuring and monitoring of water; the filtering and treatment of fluids, well testing and handling of flowback and produced formation water; and the transportation and recycling or disposal of drilling, completion and production fluids. Accommodations and Rentals —The Accommodations and Rentals segment provides workforce accommodations and surface rental equipment supporting drilling, completion and production operations to the U.S. onshore oil and gas industry. Wellsite Completion and Construction Services —The Wellsite Completion and Construction Services segment provides oil and natural gas operators with a variety of services, including crane and logistics services, wellsite and pipeline construction and field services. These services are performed to establish, maintain and improve production throughout the productive life of an oil or gas well, or to otherwise facilitate other services performed on a well. Financial information as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016, by segment, is as follows: Total Assets As of As of March 31, 2017 December 31, 2016 (in thousands) Water Solutions $ 357,168 $ 324,171 Accommodations and Rentals 39,247 38,874 Wellsite Completion and Construction Services 31,598 29,994 Corporate 13,102 12,027 $ 441,115 $ 405,066 For the three months ended March 31, 2017 Income (loss) before Depreciation and Capital Revenue taxes Amortization Expenditures (in thousands) Water Solutions $ 78,765 $ (7,672) $ 17,548 $ 11,955 Accommodations and Rentals 9,543 (2,403) 2,672 713 Wellsite Completion and Construction Services 12,267 (248) 984 1,342 Elimination (650) — — — Loss from operations (10,323) Corporate — (2,185) 446 — Interest expense, net — (730) — — Other income, net — 1,064 — — $ 99,925 $ (12,174) $ 21,650 $ 14,010 For the three months ended March 31, 2016 Income (loss) before Depreciation and Capital Revenue taxes Amortization Expenditures (in thousands) Water Solutions $ 62,309 $ (17,499) $ 21,922 $ 20,787 Accommodations and Rentals 8,596 (1,695) 2,829 500 Wellsite Completion and Construction Services 8,081 (1,192) 1,391 81 Elimination (147) — — — Loss from operations (20,386) Corporate — (1,165) 634 — Interest expense, net — (3,367) — — Other (expense), net — (566) — — $ 78,839 $ (25,484) $ 26,776 $ 21,368

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2017
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 17—SUBSEQUENT EVENTS On April 26, 2017, the Company completed its IPO of 8,700,000 shares of Class A common stock at a price of $14.00 per share. On May 10, 2017, the underwriters of the IPO exercised their over-allotment option to purchase an additional 1,305,000 shares of Class A common stock at the IPO price of $14.00 per share. After deducting underwriting discounts and commissions and estimated offering expenses payable by us, we received approximately $128.6 million of the aggregate net proceeds from the IPO (including the over-allotment option). We contributed all of the net proceeds received by us to SES Holdings in exchange for SES Holdings LLC Units. SES Holdings used the net proceeds in the following manner: (i) $34.0 was used to repay borrowings incurred under our Credit Facility to fund the cash portion of the purchase price of the Permian Acquisition, (ii) $7.8 million was used for the cash settlement of outstanding phantom unit awards and (iii) the remaining net proceeds are intended to be used for general corporate purposes, including funding our 2017 budgeted capital expenditures. On May 5, 2017, the Company settled its outstanding phantom unit awards for an aggregate amount equal to $7.8 million as a result of the completion of its IPO, which constituted a liquidity event with respect to such phantom unit awards. Based on the fair market value of a share of the Company’s Class A common stock on the date of the IPO of $14.00, the cash payment with respect to each phantom unit was approximately $5.53.

SIGNIFICANT ACCOUNTING POLICI25

SIGNIFICANT ACCOUNTING POLICIES (POLICIES)	3 Months Ended
	Mar. 31, 2017
SIGNIFICANT ACCOUNTING POLICIES
Use of estimates	Use of estimates : The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to recoverability of long‑lived assets and intangibles, useful lives used in depreciation and amortization, uncollectible accounts receivable, income taxes, self‑insurance liabilities, share‑based compensation and contingent liabilities. The Company bases its estimates on historical and other pertinent information that are believed to be reasonable under the circumstances. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes.
Emerging Growth Company Status	Emerging Growth Company status: Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), we are an “emerging growth company,” which allows us to have an extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. We intend to take advantage of all of the reduced reporting requirements and exemptions, including the longer phase‑in periods for the adoption of new or revised financial accounting standards under Section 107 of the JOBS Act until we are no longer an emerging growth company. Our election to use the phase‑in periods permitted by this election may make it difficult to compare our financial statements to those of non‑emerging growth companies and other emerging growth companies that have opted out of the longer phase‑in periods under Section 107 of the JOBS Act and who will comply with new or revised financial accounting standards. If we were to subsequently elect instead to comply immediately with these public company effective dates, such election would be irrevocable pursuant to Section 107 of the JOBS Act.
Recent accounting pronouncements:	Recent accounting pronouncements : In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , outlining a comprehensive new revenue recognition standard that will supersede ASC 605, Revenue Recognition. The new accounting guidance creates a framework under which an entity will allocate the transaction price to separate performance obligations and recognize revenue when each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation, and determining when an entity satisfies its performance obligations. The standard allows for either “full retrospective” adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch‑up as of the earliest period presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch‑up as of the current period. In August 2015, the FASB decided to defer the original effective date by one year to be effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019 for nonpublic entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures and has not yet determined the method by which it will adopt the standard. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which amends existing guidance on income taxes to require the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet. The pronouncement is effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018 for nonpublic entities, and may be applied either prospectively or retrospectively. The Company prospectively adopted this guidance during the three months ended March 31, 2017. Prior periods were not retrospectively adjusted. As the Company’s deferred tax assets and liabilities are all noncurrent, the adoption did not result in a change to the consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in the current accounting guidance as well as the FASB’s new revenue recognition standard. However, the ASU eliminates the use of bright‑line tests in determining lease classification as required in the current guidance. The ASU also requires additional qualitative disclosures along with specific quantitative disclosures to better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The pronouncement is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, for nonpublic entities using a modified retrospective approach. Early adoption is permitted. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting , that provides a new requirement to record all of the tax effects related to share‑based payments at settlement (or expiration) through the income statement. This pronouncement is effective for annual reporting periods beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018, for nonpublic entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, which addresses the classification and presentation of eight specific cash flow issues that currently result in diverse practices. The amendments provide guidance in the presentation and classification of certain cash receipts and cash payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero‑coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate‑owned life insurance policies, and distributions received from equity method investees. This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, for nonpublic entities. The amendments in this ASU should be applied using a retrospective approach. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-01 , Clarifying the Definition of a Business , with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, for nonpublic entities. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . This pronouncement removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This pronouncement is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2019. The amendments in this ASU should be applied using a prospective approach. The Company is still evaluating the impact that the new accounting guidance will have on its consolidated financial statements and related disclosures

ACQUISITION (Tables)

ACQUISITION (Tables)	3 Months Ended
	Mar. 31, 2017
ACQUISITION
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities	Preliminary purchase price allocation Amount Consideration transferred (in thousand) Cash paid $ 51,000 Class A common stock issued 5,500 Total consideration transferred 56,500 Less: identified assets Working capital 6,000 Fixed assets 13,225 Customer relationship intangible assets 21,392 Other intangible assets 5,150 Total identified assets 45,767 Goodwill $ 10,733
Schedule of unaudited consolidated pro forma information	Pro Forma Three Months Ended March 31, 2017 2016 (unaudited) (in thousands) Revenue $ 105,531 $ 83,942 Net loss $ (12,055) $ (26,242) Less: net loss attributable to noncontrolling interests 1 7,932 17,369 Net loss attributable to Select Energy Services, Inc. 1 $ (4,123) $ (8,873) 1 The allocation of net loss attributable to noncontrolling interests and Select Energy Services gives effect to the corporate reorganization as though the 144A Offering occurred as of January 1, 2016. However, the calculation of pro forma net loss does not give effect to any pro forma adjustments for the 144A Offering.

EXIT AND DISPOSAL ACTIVITIES (T

EXIT AND DISPOSAL ACTIVITIES (Tables)	3 Months Ended
	Mar. 31, 2017
EXIT AND DISPOSAL ACTIVITIES
Summary of exit and disposal activities	Provision during the Usage during the Balance as of three months ended three months ended Balance as of December 31, 2016 March 31, 2017 March 31, 2017 March 31, 2017 (in thousands) Lease obligations and terminations $ 18,000 $ 1,863 $ 712 $ 19,151 Reclassification of deferred rent 1,069 1,254 Total $ 19,069 $ 20,405

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	3 Months Ended
	Mar. 31, 2017
PROPERTY AND EQUIPMENT.
Schedule of property and equipment	March 31, 2017 December 31, 2016 (in thousands) Land $ 8,540 $ 8,593 Buildings and leasehold improvements 83,061 83,352 Vehicles and equipment 27,711 24,114 Machinery and equipment 538,693 534,303 Computer equipment and software 11,221 11,102 Office furniture and equipment 4,277 4,275 Disposal wells 67,566 67,566 Helicopters 497 497 Construction in progress 14,558 5,584 756,124 739,386 Less accumulated depreciation and impairment (500,541) (490,519) Total property and equipment, net $ 255,583 $ 248,867

GOODWILL AND OTHER INTANGIBLE29

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2017
GOODWILL AND OTHER INTANGIBLE ASSETS
Schedule of changes in the carrying amounts of goodwill by reportable segment	Wellsite Completion Water and Construction Accommodations Solutions Services and Rentals Total (in thousands) Balance as of December 31, 2015 $ 137,534 $ 12,242 $ 995 $ 150,771 Impairment (137,534) — (995) (138,529) Balance as of December 31, 2016 — 12,242 — 12,242 Additions 10,733 — — 10,733 Balance as of March 31, 2017 $ 10,733 $ 12,242 $ — $ 22,975
Summary of components of other intangible assets	March 31, 2017 Gross Accumulated Net Value Amortization Value (in thousands) Customer relationships $ 78,218 $ 50,207 $ 28,011 Other 10,641 2,635 8,006 Total other intangible assets $ 88,859 $ 52,842 $ 36,017 December 31, 2016 Gross Accumulated Net Value Amortization Value (in thousands) Customer relationships $ 56,826 $ 48,236 $ 8,590 Other 5,491 2,495 2,996 Total other intangible assets $ 62,317 $ 50,731 $ 11,586

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Mar. 31, 2017
DEBT
Summary of Company’s leverage ratio	Leverage Ratio Before Receipt of Third Quarter 2017 Eurodollar Base Rate Compliance Certificate Advances Advances < 4.00 4.00 % 3.00 % ≥ 4.00 4.50 % 3.50 % Leverage Ratio After Receipt of Third Quarter 2017 Eurodollar Base Rate Compliance Certificate Advances Advances < 2.00 3.00 % 2.00 % ≥ 2.00 < 2.50 3.25 % 2.25 % ≥ 2.50 < 3.00 3.50 % 2.50 % ≥ 3.00 < 3.50 3.75 % 2.75 % ≥ 3.50 < 4.00 4.00 % 3.00 % ≥ 4.00 4.50 % 3.50 %

EQUITY_BASED COMPENSATION (Tabl

EQUITY‑BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2017
EQUITY BASED COMPENSATION
Schedule of equity option activity and related information	For the three months ended March 31, 2017 Weighted-average Equity Options Exercise Price Beginning balance 620,721 $ 16.50 Granted 418,184 20.00 Ending balance 1,038,905 $ 17.91
Schedule of assumptions used in determining the fair value of certain equity options	$20.00 Strike Underlying Equity $ 20.00 Strike Price $ 20.00 Dividend Yield (%) % Risk free rate (%) 1.64% - 1.99 % Volatility (%) 46.6% - 46.7 % Expected Term (Years) 4-6
Schedule of restricted stock activity	For the three months ended March 31, 2017 Grant Date Fair Restricted Stock Value Beginning balance — $ — Granted 39,242 20.00 Ending balance 39,242 $ 20.00

DERIVATIVE FINANCIAL INSTRUME32

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
DERIVATIVE FINANCIAL INSTRUMENTS
Summary of changes in the fair value of the interest rate swap derivative instruments	Three Months Ended March 31, Derivatives designated as cash flow hedges 2016 (in thousands) Beginning fair value of interest rate swap derivative instruments $ (7) Amount of unrealized losses recognized in OCI (80) Amount of gains reclassified from AOCI to earnings (effective portion) 85 Net change in fair value of interest rate swap derivative instruments 5 Ending fair value of interest rate swap derivative instruments $ (2)

NONCONTROLLING INTERESTS (Table

NONCONTROLLING INTERESTS (Tables)	3 Months Ended
	Mar. 31, 2017
NONCONTROLLING INTERESTS.
Summary of the effects of changes in noncontrolling interests	For the three months ended March 31, 2017 2016 (in thousands) Net loss attributable to Select Energy Services, Inc. and its Predecessor $ (4,172) $ (25,337) Transfers from noncontrolling interests: Increase in equity due to transactions with holder of noncontrolling interests 2,495 — Change to equity from net loss attributable to Select Energy Services, Inc. and its Predecessor and transfers from noncontrolling interests $ (1,677) $ (25,337)

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2017
EARNINGS PER SHARE
Summary of calculation of basic and diluted earnings per share	The following table presents the Company’s calculation of basic and diluted earnings per share for the three months ended March 31, 2017 and 2016 (dollars in thousands, except share and per share amounts): Three Months Ended March 31, 2017 2016 Net loss (12,280) (25,793) Less: Net loss attributable to Predecessor — 25,337 Less: Net loss attributable to noncontrolling interests 8,108 456 Net loss attributable to Select Energy Services, Inc. $ (4,172) $ — Allocation of net loss attributable to: Class A-1 stockholders $ (3,363) Class A stockholders (809) Class B stockholders — $ (4,172) Weighted average shares outstanding: Class A-1-Basic & Diluted 16,100,000 Class A-Basic & Diluted 3,870,194 Class B-Basic & Diluted 38,462,541 Net loss per share attributable to common stockholders: Class A-1-Basic & Diluted $ (0.21) Class A-Basic & Diluted $ (0.21) Class B-Basic & Diluted $ —

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2017
SEGMENT INFORMATION
Summary of financial information by segment	Total Assets As of As of March 31, 2017 December 31, 2016 (in thousands) Water Solutions $ 357,168 $ 324,171 Accommodations and Rentals 39,247 38,874 Wellsite Completion and Construction Services 31,598 29,994 Corporate 13,102 12,027 $ 441,115 $ 405,066 For the three months ended March 31, 2017 Income (loss) before Depreciation and Capital Revenue taxes Amortization Expenditures (in thousands) Water Solutions $ 78,765 $ (7,672) $ 17,548 $ 11,955 Accommodations and Rentals 9,543 (2,403) 2,672 713 Wellsite Completion and Construction Services 12,267 (248) 984 1,342 Elimination (650) — — — Loss from operations (10,323) Corporate — (2,185) 446 — Interest expense, net — (730) — — Other income, net — 1,064 — — $ 99,925 $ (12,174) $ 21,650 $ 14,010 For the three months ended March 31, 2016 Income (loss) before Depreciation and Capital Revenue taxes Amortization Expenditures (in thousands) Water Solutions $ 62,309 $ (17,499) $ 21,922 $ 20,787 Accommodations and Rentals 8,596 (1,695) 2,829 500 Wellsite Completion and Construction Services 8,081 (1,192) 1,391 81 Elimination (147) — — — Loss from operations (20,386) Corporate — (1,165) 634 — Interest expense, net — (3,367) — — Other (expense), net — (566) — — $ 78,839 $ (25,484) $ 26,776 $ 21,368

BUSINESS AND BASIS OF PRESENT36

BUSINESS AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Millions	Apr. 26, 2017$ / sharesshares	Dec. 20, 2016USD ($)$ / sharesshares	May 05, 2017$ / shares	Mar. 31, 2017$ / sharesshares	Dec. 31, 2016shares
Share price | $ / shares				$ 20
Revolving line of credit
Maximum borrowing capacity | $		$ 100
Predecessor
Ratio		10.3583
Common units issued		16,100,000
Class A-1 common stock
Common stock issued				16,100,000	16,100,000
Class A-1 common stock | Private Placement
Shares issued		16,100,000
Share price | $ / shares		$ 20
Class A common stock
Common stock issued				4,077,970	3,802,792
Class A common stock | IPO
Shares issued	8,700,000
Share price | $ / shares	$ 14		$ 14
Class B common stock
Common stock issued				38,462,541	38,462,541
Legacy Owner Holdco | Class B common stock | Private Placement
Common units issued		38,462,541
Contributing Legacy Owners | Class A common stock | Predecessor
Common units issued		3,802,972
Common stock issued		3,802,972

ACQUISITION (Details)

ACQUISITION (Details) - USD ($) $ / shares in Units, $ in Thousands	Mar. 10, 2017	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
ACQUISITION
Proceeds from credit facility	$ 34,000
Goodwill	10,700	$ 22,975	$ 12,242	$ 150,771
Class A common stock
ACQUISITION
Total consideration paid	56,500
Cash paid	51,000
Class A common stock issued	$ 5,500
Class A Common stock issued, Share Price	$ 20
Permian Acquisition
ACQUISITION
Total consideration paid	$ 56,500
Cash paid	51,000
Class A common stock issued	5,500
Cash on hand	17,000
Goodwill	$ 10,733

ACQUISITION - Purchase price al

ACQUISITION - Purchase price allocation (Details2) - USD ($) $ in Thousands	Mar. 10, 2017	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Less: identified assets
Transaction cost		$ 700
Goodwill	$ 10,700	$ 22,975	$ 12,242	$ 150,771
Class A common stock
Consideration transferred
Cash paid	51,000
Class A common stock issued	5,500
Total consideration transferred	56,500
Permian Acquisition
Consideration transferred
Cash paid	51,000
Class A common stock issued	5,500
Total consideration transferred	56,500
Less: identified assets
Working capital	6,000
Fixed assets	13,225
Total identified assets	45,767
Goodwill	10,733
Permian Acquisition | Customer relationships
Less: identified assets
intangible assets	21,392
Permian Acquisition | Other
Less: identified assets
intangible assets	$ 5,150

ACQUISITION - Proforma (Details

ACQUISITION - Proforma (Details3) - USD ($) $ in Thousands	Mar. 10, 2017	Mar. 31, 2017	Mar. 31, 2016
ACQUISITION
Revenue		$ 99,925	$ 78,839
Net income		(4,172)	(25,337)
Permian Acquisition
ACQUISITION
Revenue	$ 1,900
Net income		300
Pro forma information
Revenue		105,531	83,942
Net loss		(12,055)	(26,242)
Less: net loss attributable to noncontrolling interests		7,932	17,369
Net loss attributable to Select Energy Services, Inc.		$ (4,123)	$ (8,873)

EXIT AND DISPOSAL ACTIVITIES (D

EXIT AND DISPOSAL ACTIVITIES (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017USD ($)	Dec. 31, 2016USD ($)item
Exit and disposal activities
Number of facilities closed | item		15
Charges related to exit and disposal activities	$ 1,900
Accrued Liabilities and Other Liabilities	24,031	$ 22,091
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	19,069
Restructuring Reserve, Ending Balance	20,405	19,069
Accrued Liabilities [Member]
Exit and disposal activities
Accrued Liabilities and Other Liabilities	3,100
Lease obligations and terminations
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	18,000
Provision for Restructuring	1,863
Payments for Restructuring	712
Restructuring Reserve, Ending Balance	19,151	18,000
Reclassifications of deferred rent
Exit and disposal activities
Amount reclassed to accrued lease obligations	200
Restructuring Reserve [Roll Forward]
Restructuring Reserve, Beginning Balance	1,069
Restructuring Reserve, Ending Balance	$ 1,254	$ 1,069

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Property and equipment
Property and equipment, gross	$ 756,124		$ 739,386
Less accumulated depreciation and impairment	(500,541)		(490,519)
Total property and equipment, net	255,583		248,867
Capital lease obligations	0	$ 0
Land
Property and equipment
Property and equipment, gross	8,540		8,593
Building and leasehold improvements
Property and equipment
Property and equipment, gross	83,061		83,352
Vehicles and equipment
Property and equipment
Property and equipment, gross	27,711		24,114
Machinery and equipment
Property and equipment
Property and equipment, gross	538,693		534,303
Computer equipment and software
Property and equipment
Property and equipment, gross	11,221		11,102
Office furniture and equipment
Property and equipment
Property and equipment, gross	4,277		4,275
Disposal wells
Property and equipment
Property and equipment, gross	67,566		67,566
Helicopters
Property and equipment
Property and equipment, gross	497		497
Construction in progress
Property and equipment
Property and equipment, gross	$ 14,558		$ 5,584

GOODWILL AND OTHER INTANGIBLE42

GOODWILL AND OTHER INTANGIBLE ASSETS - GOODWILL (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Goodwill
Balance at the beginning of the period	$ 12,242	$ 150,771
Impairment		(138,529)
Additions	10,733
Balance at the end of the period	22,975	12,242
Water Solutions
Goodwill
Balance at the beginning of the period		137,534
Impairment		(137,534)
Additions	10,733
Balance at the end of the period	10,733
Wellsite Completion and Construction Services
Goodwill
Balance at the beginning of the period	12,242	12,242
Balance at the end of the period	$ 12,242	12,242
Accommodations and Rentals
Goodwill
Balance at the beginning of the period		995
Impairment		$ (995)

GOODWILL AND OTHER INTANGIBLE43

GOODWILL AND OTHER INTANGIBLE ASSETS - OTHER INTANGIBLE ASSETS (Details2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Other intangible assets
Gross Value	$ 88,859		$ 62,317
Accumulated Amortization	52,842		50,731
Net Value	36,017		11,586
Amortization expense	2,100	$ 2,200
Customer relationships
Other intangible assets
Gross Value	78,218		56,826
Accumulated Amortization	50,207		48,236
Net Value	$ 28,011		8,590
Useful life of acquired intangible asset	13 years
Customer relationships | Minimum
Other intangible assets
Useful life of intangible asset	5 years
Customer relationships | Maximum
Other intangible assets
Useful life of intangible asset	7 years
Noncompete agreements
Other intangible assets
Useful life of acquired intangible asset	5 years
Noncompete agreements | Minimum
Other intangible assets
Useful life of intangible asset	3 years
Noncompete agreements | Maximum
Other intangible assets
Useful life of intangible asset	5 years
Other
Other intangible assets
Gross Value	$ 10,641		5,491
Accumulated Amortization	2,635		2,495
Net Value	$ 8,006		$ 2,996
Other | Minimum
Other intangible assets
Useful life of intangible asset	3 years
Other | Maximum
Other intangible assets
Useful life of intangible asset	8 years

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Dec. 20, 2016
DEBT
Debt outstanding	$ 34,000
Revolving line of credit
DEBT
Maximum borrowing capacity			$ 100,000
Commitment fee (as a percent)	0.50%
Debt outstanding	$ 34,000	$ 0
Weighted average interest rate (as a percent)	5.50%
Outstanding letters of credit	$ 16,100
Unamortized debt issuance cost	$ 3,600
Revolving line of credit | Before Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio less than 4.00 | Eurodollar Advances
DEBT
Margin (as a percent)	4.00%
Revolving line of credit | Before Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio less than 4.00 | Base Rate Advances
DEBT
Margin (as a percent)	3.00%
Revolving line of credit | Before Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 4.00 | Eurodollar Advances
DEBT
Margin (as a percent)	4.50%
Revolving line of credit | Before Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 4.00 | Base Rate Advances
DEBT
Margin (as a percent)	3.50%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio less than 2.00 | Eurodollar Advances
DEBT
Margin (as a percent)	3.00%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio less than 2.00 | Base Rate Advances
DEBT
Margin (as a percent)	2.00%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 2.00 less than 2.50 | Eurodollar Advances
DEBT
Margin (as a percent)	3.25%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 2.00 less than 2.50 | Base Rate Advances
DEBT
Margin (as a percent)	2.25%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 2.50 less than 3.00 | Eurodollar Advances
DEBT
Margin (as a percent)	3.50%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 2.50 less than 3.00 | Base Rate Advances
DEBT
Margin (as a percent)	2.50%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 3.00 less than 3.50 | Eurodollar Advances
DEBT
Margin (as a percent)	3.75%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 3.00 less than 3.50 | Base Rate Advances
DEBT
Margin (as a percent)	2.75%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 3.50 less than 4.00 | Eurodollar Advances
DEBT
Margin (as a percent)	4.00%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 3.50 less than 4.00 | Base Rate Advances
DEBT
Margin (as a percent)	3.00%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 4.00 | Eurodollar Advances
DEBT
Margin (as a percent)	4.50%
Revolving line of credit | After Receipt Of Third Quarter 2017 Compliance Certificate | Leverage ratio greater than equal to 4.00 | Base Rate Advances
DEBT
Margin (as a percent)	3.50%
Letter of credit
DEBT
Unused portion of available borrowing	$ 49,900
Letter of credit | Minimum
DEBT
Variable interest rate (as a percent)	3.00%
Letter of credit | Maximum
DEBT
Variable interest rate (as a percent)	4.50%

EQUITY BASED COMPENSATION (Deta

EQUITY BASED COMPENSATION (Details) - $ / shares	3 Months Ended
	Mar. 31, 2017	May 05, 2017	Apr. 26, 2017
EQUITY-BASED COMPENSATION
Vesting period	3 years
Share Price	$ 20
Minimum
EQUITY-BASED COMPENSATION
Equity options term	7 years
Maximum
EQUITY-BASED COMPENSATION
Equity options term	10 years
Class A common stock | IPO
EQUITY-BASED COMPENSATION
Share Price		$ 14	$ 14
2016 plan | Maximum
EQUITY-BASED COMPENSATION
Equity options term	10 years
2016 plan | Class A common stock
EQUITY-BASED COMPENSATION
Maximum number of shares	4,600,000
2016 plan | Class A common stock | Over-allotment option
EQUITY-BASED COMPENSATION
Percentage of common stock sold in underwritten public offering	8.00%
Phantom Equity Awards
EQUITY-BASED COMPENSATION
Cash payment (per phantom unit)		$ 5.53

EQUITY BASED COMPENSATION - Equ

EQUITY BASED COMPENSATION - Equity Options (Details2)	3 Months Ended
	Mar. 31, 2017$ / sharesshares
Equity Options
Beginning balance (in shares) | shares	620,721
Granted (in shares) | shares	418,184
Ending balance (in shares) | shares	1,038,905
Weighted-average Exercise Price
Beginning balance (in dollars per share) | $ / shares	$ 16.50
Granted (in dollars per share) | $ / shares	20
Ending balance (in dollars per share) | $ / shares	$ 17.91

EQUITY BASED COMPENSATION - Ass

EQUITY BASED COMPENSATION - Assumptions (Details3)	3 Months Ended
	Mar. 31, 2017$ / sharesshares
EQUITY-BASED COMPENSATION
Weighted-average grant date fair value of equity options granted	$ 7.98
Assumptions for equity options granted:
Underlying Equity	20
Strike Price	$ 20
Dividend Yield (%)	0.00%
Risk free rate(%), minimum	1.64%
Risk free rate(%), maximum	1.99%
Volatility (%), minimum	46.60%
Volatility (%), maximum	46.70%
Vested (in shares) | shares	0
Minimum
Assumptions for equity options granted:
Expected Term (Years)	4 years
Maximum
Assumptions for equity options granted:
Expected Term (Years)	6 years

EQUITY BASED COMPENSATION - Res

EQUITY BASED COMPENSATION - Restricted stock (Details4) - Restricted Stock - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Restricted stock
Granted (in shares)	39,242
Ending balance (in shares)	39,242
Grant Date Fair Value
Granted (in dollars per share)	$ 20
Ending balance (in dollars per share)	$ 20
Compensation expense	$ 0.6	$ 0.3

EQUITY BASED COMPENSATION - Pha

EQUITY BASED COMPENSATION - Phantom Awards (Details5) $ in Millions	3 Months Ended
	Mar. 31, 2017USD ($)
Phantom Awards
EQUITY-BASED COMPENSATION
Compensation expense	$ 0

DERIVATIVE FINANCIAL INSTRUME50

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Apr. 30, 2013
DERIVATIVE FINANCIAL INSTRUMENTS
Unrealized holding loss arising during period	$ (80)
Amount of gains reclassified from AOCI to earnings (effective portion)	85
Net change in unrealized gain (loss)	5
Interest Rate Swap | Cash Flow Hedging
DERIVATIVE FINANCIAL INSTRUMENTS
Aggregate notional amount		$ 125,000
Beginning fair value of interest rate swap derivative instruments	(7)
Unrealized holding loss arising during period	(80)
Amount of gains reclassified from AOCI to earnings (effective portion)	85
Net change in unrealized gain (loss)	5
Ending fair value of interest rate swap derivative instruments	$ (2)

FAIR VALUE MEASUREMENT (Details

FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
FAIR VALUE MEASUREMENT
Transfers into Level3	$ 0	$ 0
Transfers out of Level3	$ 0	0
Debt outstanding		$ 0

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
RELATED PARTY TRANSACTIONS
Sales to related parties	$ 500,000	$ 300,000
Purchases from related party vendors	$ 1,200,000	1,000,000
Minimum
RELATED PARTY TRANSACTIONS
Beneficial ownership (as a percent)	5.00%
Tax Receivable Agreement
RELATED PARTY TRANSACTIONS
Number of tax receivable agreements	$ 2
Tax Receivable Agreement | Legacy Owner Holdco and Crestview GP
RELATED PARTY TRANSACTIONS
Percentage of net tax savings for payment to TRA Holders	85
Tax Receivable Agreement | Contributing Legacy Owners
RELATED PARTY TRANSACTIONS
Percentage of net tax savings for payment to TRA Holders	85
Property and equipment
RELATED PARTY TRANSACTIONS
Purchases from related party vendors	200,000	100,000
Inventory and consumables | Maximum
RELATED PARTY TRANSACTIONS
Purchases from related party vendors	100,000	100,000
Rent of certain equipment or other services
RELATED PARTY TRANSACTIONS
Purchases from related party vendors	400,000	300,000
Management, consulting and other services
RELATED PARTY TRANSACTIONS
Purchases from related party vendors	$ 500,000	$ 600,000

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
INCOME TAXES
Effective Income tax (as percent)	(0.90%)	(1.20%)
Statutory tax rate (as a percent)	35.00%
Tax benefit (expense)	$ 106,000	$ 309,000
Liability or expense	$ 0		$ 0

NONCONTROLLING INTERESTS (Detai

NONCONTROLLING INTERESTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Effects of changes in noncontrolling interests on equity
Net loss attributable to Select Energy Services, Inc. and its Predecessor	$ (4,172)	$ (25,337)
Transfers from noncontrolling interests:
Increase in equity due to transactions with holder of noncontrolling interests	2,495
Change to equity from net loss attributable to Select Energy Services, Inc. and its Predecessor and transfers from noncontrollig interests	$ (1,677)	$ (25,337)

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Calculation of basic and diluted earnings per share:
Net loss	$ (12,280)	$ (25,793)
Less: Net loss attributable to noncontrolling interests	8,108	456
Net loss attributable to Select Energy Services, Inc.	(4,172)	(25,337)
Predecessor
Calculation of basic and diluted earnings per share:
Less: Net loss attributable to noncontrolling interests		$ 25,337
Class A-1 common stock
Calculation of basic and diluted earnings per share:
Net loss attributable to Select Energy Services, Inc.	$ (3,363)
Weighted average shares outstanding:	16,100,000
Net loss per share attributable to common stockholders:	$ (0.21)
Class A common stock
Calculation of basic and diluted earnings per share:
Net loss attributable to Select Energy Services, Inc.	$ (809)
Weighted average shares outstanding:	3,870,194
Net loss per share attributable to common stockholders:	$ (0.21)
Class B common stock
Calculation of basic and diluted earnings per share:
Weighted average shares outstanding:	38,462,541

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)segment	Mar. 31, 2016USD ($)	Dec. 31, 2016USD ($)
SEGMENT INFORMATION
Number of operating segments | segment	3
Number of reportable segments | segment	3
Assets	$ 441,115		$ 405,066
Segment information
Revenue	99,925	$ 78,839
Income (loss) before taxes	(12,174)	(25,484)
Depreciation and amortization	21,650	26,776
Capital Expenditures	14,010	21,368
Loss from operations	(12,508)	(21,551)
Other income (expense), net	1,064	(566)
Water Solutions
SEGMENT INFORMATION
Assets	357,168		324,171
Segment information
Revenue	78,765	62,309
Income (loss) before taxes	(7,672)	(17,499)
Depreciation and amortization	17,548	21,922
Capital Expenditures	11,955	20,787
Accommodations and Rentals
SEGMENT INFORMATION
Assets	39,247		38,874
Segment information
Revenue	9,543	8,596
Income (loss) before taxes	(2,403)	(1,695)
Depreciation and amortization	2,672	2,829
Capital Expenditures	713	500
Wellsite Completion and Construction Services
SEGMENT INFORMATION
Assets	31,598		29,994
Segment information
Revenue	12,267	8,081
Income (loss) before taxes	(248)	(1,192)
Depreciation and amortization	984	1,391
Capital Expenditures	1,342	81
Elimination
Segment information
Revenue	(650)	(147)
Corporate
SEGMENT INFORMATION
Assets	13,102		$ 12,027
Segment information
Income (loss) before taxes	(2,185)	(1,165)
Depreciation and amortization	446	634
Material reconciling items
Segment information
Loss from operations	(10,323)	(20,386)
Interest expense, net	(730)	(3,367)
Other income (expense), net	$ 1,064	$ (566)

SUBSEQUENT EVENTS - (Details)

SUBSEQUENT EVENTS - (Details) - USD ($) $ / shares in Units, $ in Thousands	May 10, 2017	May 05, 2017	Apr. 26, 2017	Mar. 31, 2016	Mar. 31, 2017
Subsequent Events
Share price					$ 20
Repayments of Debt				$ 7,625
Phantom Equity Awards
Subsequent Events
Cash payment (per phantom unit)		$ 5.53
Class A common stock | IPO
Subsequent Events
Shares issued			8,700,000
Share price		$ 14	$ 14
Subsequent Event | Phantom Equity Awards
Subsequent Events
Settlement of phantom equity awards		$ 7,800
Subsequent Event | Class A common stock
Subsequent Events
Net proceeds from the IPO	$ 128,600
Repayments of Debt	$ 34,000
Subsequent Event | Class A common stock | IPO
Subsequent Events
Shares issued			8,700,000
Share price		$ 14	$ 14
Cash payment (per phantom unit)		$ 5.53
Subsequent Event | Class A common stock | Over-allotment option
Subsequent Events
Shares issued	1,305,000
Share price	$ 14