TETRA Technologies, Inc.
24955 Interstate 45 North
The Woodlands, Texas 77380
December 20, 2012
Dear Mr. Hiller:
• The Company is responsible for the adequacy and accuracy of the disclosure in the filing;
• Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and
• The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
TETRA TECHNOLOGIES, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011
- 1. We note your disclosure stating “Hurricane damage repair efforts consist of the repair of damaged facilities and equipment, well intervention, abandonment, decommissioning, and debris removal associated with the destroyed offshore platforms, construction of replacement platforms and facilities, and redrilling of destroyed wells.” It appears the activities you associated with the phrase “repair efforts” would be more appropriately characterized as “assessment and response efforts,” as repairs generally have the quality of restoring utility to an asset, and several of the activities that you mention are not clearly consistent with this outcome. Please modify your policy note to clarify how you determine whether costs associated with structures damaged by hurricanes are within the scope of FASB ASC 410-20 (capitalized and classified as asset retirement obligations) or FASB ASC 450 (expensed and classified as loss contingencies). It should also be clear how you determine the classification of costs associated with repairs to structures damaged by hurricanes as either period expense or asset retirement obligations. Please modify disclosures elsewhere in your filing as necessary to clarify the extent to which costs and charges associated with your hurricane damage assessment and response efforts represent recognition of loss, construction of new assets, and repairs.
• The costs to repair and restore damaged assets, including the costs for damage assessment, are accounted for as expenses as they are incurred.
• The estimated costs of expected well intervention, abandonment, decommissioning, and debris removal efforts associated with destroyed offshore platforms are accounted for in accordance with FASB ASC 410-20.
• The costs to replace destroyed platforms and facilities and redrill destroyed wells, which represent construction of new assets are capitalized as incurred as part of oil and gas properties.
• A range of the estimated expected costs to repair and restore damaged assets and replace destroyed platforms and facilities and redrill destroyed wells is disclosed in accordance with the loss contingency requirements as described in FASB ASC 450.
The Company will modify its disclosures in its future filings with regard to its accounting for each of the above hurricane response effort cost items to include the following disclosure:
- 2. We note your disclosure that management does not reasonably expect the outcome of lawsuits or other proceedings to have a material adverse impact on the financial statements. Please revise your disclosure to clarify whether it is reasonably possible that a material loss exceeding amounts already recognized may have been incurred, and if so either disclose an estimate of the additional loss or range of loss, or state that such an estimate cannot be made to comply with FASB ASC 450-20-50-4.
If such a material loss is reasonably possible, the Company will disclose an estimate of the additional loss or range of loss, or state that such an estimate cannot be made in accordance with FASB ASC 450-20-50-4.